FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KA
(Mark One)
/X/ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
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/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED] For the transition period from to
Commission file number 1-10104
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UNITED CAPITAL CORP.
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(Exact name of registrant as specified in its charter)
Delaware 04-2294493
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(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
9 Park Place, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
Issuer's telephone number, including area code: (516) 466-6464
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Securities registered under Section 12(b) of the Exchange Act:
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Title of Each Class Name of Each Exchange on Which Registered
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Common Stock, $.10 par value American Stock Exchange
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Securities registered pursuant to Section 12(g) of the Exchange Act:
None
Indicate by check mark whether the registrant: (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
-- --
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
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The aggregate market value of the shares of the voting stock held by
nonaffiliates of the Registrant as of March 15, 2000 was approximately
$18,781,000.
The number of shares of the Registrant's $.10 par value Common Stock
outstanding as of March 15, 2000 was 4,735,915.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
MANAGEMENT
As of April 24, 2000, the executive officers and directors of
United Capital Corp. (the "Company") are as follows:
Name Principal Occupation Age
- --------------------- ---------------------------------- --------
A.F. Petrocelli Chairman of the Board, 56
President and Chief
Executive Officer of the
Company
Anthony J. Miceli Vice President, Chief 37
Financial Officer and
Secretary of the Company
Arnold S. Penner Self employed real estate 63
investor and broker
Howard M. Lorber Chairman and Chief Executive 51
Officer of Hallman &
Lorber Associates, Inc.
A.F. PETROCELLI, has been Chairman of the Board and Chief Executive
Officer since December, 1987, President of the Company since June, 1991 and from
June, 1983 to March, 1989 and a Director of the Company since June 1981. Mr.
Petrocelli has been President, Chief Executive Officer and Chairman of the Board
of Prime Hospitality Corp. ("Prime"), a New York Stock Exchange listed company
since 1998 and a Director of Prime since 1992, a Director of Boyer Value Fund (a
public mutual fund), a Director of Philips International Realty Corp.
("Philips") and a Director of Nathan's Famous Inc. ("Nathan's").
ANTHONY J. MICELI, has been a Director and a Vice President and Chief
Financial Officer of the Company since June, 1996 and prior thereto was the
Corporate Controller of the Company for more than one year. Mr. Miceli is a
Certified Public Accountant and a member of the American Institute of Certified
Public Accountants and New Jersey Society of Certified Public Accountants.
ARNOLD S. PENNER, has been a Director of the Company since 1989 and has
worked for more than the past five years as a private real estate
<PAGE>
investor and as a self-employed real estate broker in New York. Mr. Penner is
also a Director of Philips.
HOWARD M. LORBER has been a Director of the Company since 1991. Mr.
Lorber has been Chairman of the Board and Chief Executive Officer of Nathan's
for more than the past five years and Chairman of the Board of Directors and
Chief Executive Officer of Hallman & Lorber Associates, Inc. ("Hallman &
Lorber") for over five years. He has been a director, President and Chief
Operating Officer of New Valley Corporation for more than five years. He has
been a director of and member of the Audit Committee and Compensation Committee
of Prime since 1994 and Chairman since 1998 and he has been a director of PLM
International, Inc. since January 1999.
Item 11. Executive Compensation
The following table sets forth, for the Company's 1999 fiscal year, all
compensation awarded to, earned by or paid to the chief executive officer
("CEO") and the most highly compensated executive officer of the Company other
than the CEO who was an executive officer of the Company during the fiscal year
ended December 31, 1999 and whose salary and bonus exceeded $100,000 (one
individual) with respect to the fiscal year ended December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Other
Annual All Other
Compensation Number of Compensation
Name and Principal Year Salary($) Bonus($) ($)(1) Options ($)
- ------------------------------- ----- ---------- -------- ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli, 1999 $650,000 $700,000 ---- 300,000 ----
Chairman of the 1998 650,000 700,000 ---- 300,000 ----
Board, President 1997 650,000 700,000 ---- 222,381 ----
and Chief Executive
Officer
Anthony J. Miceli, 1999 $150,577 $100,000 ---- 30,000 ----
Vice President and 1998 142,619 70,000 ---- 30,000 ----
Chief Financial 1997 113,731 100,000 ---- 30,000 ----
Officer
</TABLE>
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<PAGE>
(1) Perquisites and other personal benefits, securities or property to each
executive officer did not exceed the lesser of $50,000 or 10% of such
executive officer's salary and bonus.
Option Grants During 1999 Fiscal Year
The following table provides information related to options to purchase
Common Stock granted to the CEO and the named executive officer during 1999. The
Company currently does not have any plans providing for the grant of stock
appreciation rights.
<TABLE>
<CAPTION>
Individual Grants
- -------------------------------------------------------------------------------- Potential Realizable Value
% of Total at Assumed Rates of Stock
Options Price Appreciation for
Granted -----------------------
Number of to Exercise
Securities Employees or Base
Underlying in Fiscal Price
Name Option(#) Year ($/Sh)(1) Expiration Date 5% 10%
- ------------------- ------------- ------------- ---------- --------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli 300,000 69.1 $14.0625 July 14, 2009 $2,653,149 $6,723,601
Anthony J. Miceli 30,000 6.9 $14.0625 July 14, 2009 $265,315 $672,360
</TABLE>
(1) The option exercise price may be paid in shares of Common Stock owned by
the executive, in cash, or a combination of any of the foregoing, as
determined by the Stock Option Committee administering the Company's
stock option plans. The exercise price is equal to or greater than the
fair market value of the Common Stock on the date of grant.
(2) The potential realizable value portion of the foregoing table
illustrates values that might be realized upon exercise of the options
immediately prior to the expiration of their term, assuming the
specified compounded rates of appreciation on the Company's Common Stock
over the term of the options. These numbers do not take into account
provisions of certain options providing for termination of the option
following termination of employment, non-transferability or differences
in vesting periods. Regardless of the theoretical value of an option,
its ultimate value will depend upon the market value of the Common Stock
at a future date, and that value will depend on a variety of factors,
including the overall condition of the stock market and the Company's
results of operations and financial condition. There can be no assurance
that the values reflected in this table will be achieved.
Fiscal Year End Option Values
The following table provides information related to the exercise of
options by the CEO and the named executive officer and the number and value of
options held by the CEO and the named executive officer at fiscal year end.
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<PAGE>
<TABLE>
<CAPTION>
Shares
Acquired Value Number of Securities Underlying Value of Unexercised In-the-
on Realized Unexercised Options at FY-End Money options at FY-End ($)
Name Exercise (1) (1) (2)
- ---- -------- --- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C>
A.F. Petrocelli..... 25,000 $275,000 298,254 574,127 $603,045 $1,479, 648
Anthony J. Miceli... 1,300 $14,300 55,000 60,000 $281,875 $145,000
</TABLE>
(1) Based on the difference between the exercise price of the options and
the closing price of a share of Common Stock on June 9, 1999, the date
of exercise as reported on the American Stock Exchange ("AMEX").
(2) Based on the closing price of a share of Common Stock on December 31,
1999 of $18.625, as reported on AMEX.
Employee Retirement Plan
The Company, through one of its subsidiaries, has a noncontributory
pension plan that covers the executive officers of the Company. The following
table discloses estimated annual benefits payable upon retirement in specified
compensation and years of service classifications, based on current limits set
by the Internal Revenue Code of 1986, as amended.
Projected Annual Benefit at Retirement
<TABLE>
<CAPTION>
Years of Service
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Salary 10 15 20 25 30 35
------ ---------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 20,000............... $1,750 $2,625 $3,500 $4,375 $5,250 $6,125
30,000............... 3,250 4,875 6,500 8,125 9,750 11,375
40,000............... 4,750 7,125 9,500 11,875 14,250 16,625
50,000............... 6,250 9,375 12,500 15,625 18,750 21,875
60,000............... 7,750 11,625 15,500 19,375 23,250 27,125
70,000............... 9,250 13,875 18,500 23,125 27,750 32,375
80,000............... 10,750 16,125 21,500 26,875 32,250 37,625
90,000............... 12,250 18,375 24,500 30,625 36,750 42,875
100,000............... 13,750 20,625 27,500 34,375 41,250 48,125
150,000............... 21,250 31,875 42,500 53,125 63,750 74,375
160,000............... 22,750 34,125 45,500 56,875 68,250 79,625
</TABLE>
The Company did not make any contributions for the benefit of executive
officers for the year ended December 31, 1999.
The estimated credited years of service for each of the executive
officers named in the Summary Compensation Table is as follows: A.F. Petrocelli
twenty five years and Anthony J. Miceli twelve years, respectively.
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<PAGE>
Subject to compensation limitations under the Employee Retirement Income
Security Act of 1974, which was $160,000 in 1999, benefits are computed as
follows: For each year of credited service after June 30, 1989, the sum of one
percent (1%) of annual compensation, as defined, up to $25,000 plus one and
one-half percent (1 1/2%) of annual compensation in excess of $25,000.
Employment Contracts
The Company has an employment contract with Mr. Petrocelli which
provides for a base salary of $650,000 per annum plus a bonus as determined by
the Board of Directors. In the event of a change of control of the Company as
defined in the employment agreement, the Company shall pay Mr. Petrocelli a lump
sum severance payment equal to three years salary and purchase outstanding
options owned by Mr. Petrocelli. The employment agreement provides for
successive one year terms unless either the Company or Mr. Petrocelli gives the
other written notice that the employment agreement is terminated.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
A.F. Petrocelli serves on the Compensation Committee of Nathan's of
which Mr. Howard Lorber is Chairman of the Board and Chief Executive Officer.
Mr. Lorber is a member of the Compensation and Stock Option Committees of the
Company. Mr. Petrocelli also serves as President, Chief Executive Officer and
Chairman of the Board of Prime. Mr. Lorber is Chairman of the Compensation
Committee of Prime. For information relating to transactions involving Messrs.,
Petrocelli and Lorber and the Company, see "Certain Relationships and Related
Transactions."
Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of the
Company's Common Stock, as of April 24, 2000 by each person known by the Company
to be the beneficial owner of more than five percent of the Common Stock, each
director, each executive officer, and nominee for election as a director and by
all directors and executive officers of the Company as a group:
Name and Address Shares Percentage
of Beneficial Owner Beneficially Owned of Class (6)
- ---------------------------------- --------------------- ------------
A.F. Petrocelli 3,189,305(1)(2) 61.3%
9 Park Place
Great Neck, NY 11021
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<PAGE>
Name and Address Shares Percentage
of Beneficial Owner Beneficially Owned of Class (6)
- ---------------------------------- --------------------- ------------
Beverly Petrocelli 500,000(2) 10.6%
c/o 9 Park Place
Great Neck, NY 11021
Anthony J. Miceli 76,300(3) 1.6%
9 Park Place
Great Neck, NY 11021
Arnold S. Penner 16,000(4) *
249 East 71st Street
New York, NY 10021
Howard M. Lorber 124,500(5) 2.6%
70 E. Sunrise Highway
Valley Stream, NY 11581
All executive officers and 3,406,105(1)(3) 64.1%
directors as a group (4 (4)(5)
persons)
* Less than 1%
(1) Mr. Petrocelli owns directly 2,716,924 shares of Common Stock and
presently exercisable options or options exercisable within 60 days of
April 24, 2000 to purchase 472,381 shares of Common Stock. Does not
include shares held by the wife, adult children or the grandchildren of
Mr. Petrocelli. Mr. Petrocelli disclaims beneficial ownership of the
shares held by his wife, adult children and grandchildren.
(2) Beverly Petrocelli is the wife of Mr. Petrocelli. Mr. Petrocelli
disclaims beneficial ownership of all shares held by Mrs. Petrocelli.
Does not include shares held by the adult children or the grandchildren
of Mrs. Petrocelli. Mrs. Petrocelli disclaims beneficial ownership of
the shares held by her husband, adult
children and grandchildren.
(3) Consists of 1,300 shares of Common Stock and presently exercisable
options or options exercisable within 60 days of April 24, 2000 to
purchase 75,000 shares of Common Stock.
(4) Consists of 16,000 shares issuable upon the exercise of options which
are exercisable within 60 days of April 24, 2000.
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<PAGE>
(5) Includes 30,000 shares owned by Hallman & Lorber Associates Profit
Sharing Plan (an entity in which Mr. Lorber may be deemed to be a
control person) and 36,800 shares owned by the Howard M. Lorber
Irrevocable Trust. Mr. Lorber disclaims beneficial ownership of all
shares owned by Hallman & Lorber Associates Profit Sharing Plan and the
Howard M. Lorber Irrevocable Trust. Also includes 16,000 shares issuable
upon the exercise of options which are exercisable within 60 days of
April 24, 2000.
(6) Includes the shares of Common Stock subject to options which are
presently exercisable or exercisable within 60 days after April 24, 2000
held by directors and executive officers as a group for purposes of
calculating the respective percentages of Common Stock owned by such
individuals or by the executive officers and directors as a group.
Item 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following sets forth the transactions involving the Company and its
subsidiaries and its executive officers and/or Directors from January 1, 1999.
Specific descriptions of these transactions are provided below.
In September 1996, the Company purchased a 50% interest in a limited
partnership that owns and operates a hotel in Miami Beach, Florida. At the time
of the acquisition, the Company participated in a $2.5 million loan transaction
to the limited partnership secured by a mortgage lien against the property. The
Company advanced approximately $682,500 in connection with this note. The
remaining amounts were advanced by the following: A.F. Petrocelli, $250,000;
Beverly Petrocelli, $1 million; an officer of the Company $100,000; and the
balance by unrelated parties. The note bore interest at 14% per annum payable
monthly and the participants also received a commitment fee of 4%. This note
matured in September 1997 and was extended in accordance with original terms of
the note, for one year, in consideration of a 4% commitment fee. The limited
partnership repaid the full amount outstanding together with accrued interest in
July 1998. In January 1999, the Company sold its 50% interest in the limited
partnership. A.F. Petrocelli disclaims beneficial ownership of the participation
interest held by Beverly Petrocelli.
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<PAGE>
The Company's two hotel properties are managed by Prime, a publicly
traded company for which A.F. Petrocelli is President, Chief Executive Officer
and Chairman of the Board and Howard M. Lorber is a director. Fees paid for the
management of these properties are based upon a percentage of revenue and were
approximately $134,000 for 1999. Included in the Company's marketable securities
at December 31, 1999 was approximately $11,089,000 of Common Stock in Prime
which represents approximately 2.6% of Prime's outstanding shares. Subsequent to
December 31, 1999 the Company purchased an additional 1,245,000 shares of Prime.
In March 1997, the Company completed a $73,250,000 sales/leaseback
transaction with Kmart Corporation for two of its distribution centers located
in Brighton, Colorado and Greensboro, North Carolina. Kmart will lease these
facilities for a minimum of 25 years. These sites encompass over 2.7 million
square feet and service approximately 300 Kmart stores. The Company has taken a
50% equity interest in this transaction. Also participating in this transaction
were Beverly Petrocelli, Arnold Penner, Howard M. Lorber and the spouse of a
director who have taken approximately an 8% interest in this transaction. A.F.
Petrocelli disclaims beneficial ownership of the participation interest held by
Beverly Petrocelli.
In July 1998, the Company participated in a $3 million loan transaction
secured by stock in a corporation whose principal assets were leased equipment
and stock in a cooperative apartment. The Company advanced approximately $1.8
million in connection with this loan. The remaining amounts were advanced by
A.F. Petrocelli, $250,000; and the balance by Beverly Petrocelli. The note,
which matured in August 1999, bore interest at 14% per annum payable monthly.
The participants also received a commitment fee of 4% in connection with the
loan.
In January 2000, the Company participated in a $4.5 million loan
transaction secured by mortgage liens against three properties in New York, New
York. The Company advanced approximately $3.5 million in connection with this
loan. The remaining $1.0 million was advanced by Beverly Petrocelli. The note,
which matures in February 2001, bears interest at 14% per annum payable monthly.
The participants also received a commitment fee of 4% in connection with the
loan. A.F.
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<PAGE>
Petrocelli disclaims beneficial ownership of the participating interest held by
Beverly Petrocelli.
The Company has Indemnity Agreements with certain directors
(individually, each an "Indemnitee"), indemnifying each Indemnitee against the
various legal risks and potential liabilities to which such individuals are
subject due to their position with the Company, in order to induce and encourage
highly experienced and capable persons such as the Indemnitees to continue to
serve as directors of the Company.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
UNITED CAPITAL CORP.
By: /s/ Anthony J. Miceli
-----------------------------------
Anthony J. Miceli, Vice President
and Chief Financial Officer
Dated: May 1, 2000
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