SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM 10-K/A
AMENDMENT NO. 1
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NUMBER 1-8971
ROCKEFELLER CENTER PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 12-3280472
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1270 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10020
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 698-1440
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Name of Each Exchange
Title of Each Class on Which Registered
- ------------------- ---------------------
Common Stock, $.01 par value, all of one class New York Stock Exchange
(38,260,704 shares outstanding as of March 14, 1996)*
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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]
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Company's Annual Report on Form
10-K for the year ended December 31, 1995.
- ------------------------------------
* The aggregate market value of Registrant's voting stock held by
non-affiliates as of March 14, 1996, based on the closing price on
the New York Stock Exchange composite tape on that date, was
approximately $301,303,000.
<PAGE>
ROCKEFELLER CENTER PROPERTIES, INC.
Rockefeller Center Properties, Inc. (the "Company") hereby amends the
following items of its Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as set forth below.
Item Page
- ---- ----
Item 10. Directors and Executive Officers 1
Item 11. Executive Compensation 3
Item 12. Security Ownership of Certain Beneficial Owners and Management 8
Item 13. Certain Relationships and Related Transactions 11
Item 14. Exhibits 12
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
ROCKEFELLER CENTER PROPERTIES, INC.
Date: April 29, 1996 By: /s/ Richard M. Scarlata
-----------------------
Richard M. Scarlata
President and Chief Executive Officer
(Principal Financial Officer and Principal
Accounting Officer)
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company's directors and executive officers and their positions
with the Company are set forth below. None of the executive officers or
directors of the Company is related by blood, marriage or adoption to any
other executive officer or director of the Company.
Name Title
---- -----
Richard M. Scarlata President and Chief Executive Officer
Stevan A. Sandberg Executive Vice President
Stephanie Leggett Young Vice President and Secretary
Janet P. King Vice President and Treasurer
Peter D. Linneman Chairman of the Board and Director
Benjamin D. Holloway Director
William F. Murdoch, Jr. Director
Peter G. Peterson Director
RICHARD M. SCARLATA, age 53, has been President and Chief
Executive Officer of the Company since October 1, 1994. He was previously
Senior Vice President-Finance and Administration of the Company from June 1992
through September 1994 and Treasurer from June 1993 to May 1994, and was a
Vice President of the Company from March 1990 through June 1992 and Treasurer
from March 1991 through June 1992. Mr. Scarlata was Director-Financial
Services Group of Cushman & Wakefield, Inc. and Managing Director of Cushman &
Wakefield Realty Advisors, Inc. ("C&W Realty") from 1985 to June 1993.
STEVAN A. SANDBERG, age 43 has been Executive Vice President
of the Company since October 16, 1995. He was previously General Counsel and
Secretary of Cushman & Wakefield, Inc. from September 1987 through October
1995.
STEPHANIE LEGGETT YOUNG, age 37, has been a Vice President
of the Company since December 6, 1994 and Secretary of the Company since June
1993. She previously was Assistant Vice President of the Company from March
1990 through December 1994. Ms. Young was associated with C&W Realty from 1985
to June 1993, where she directed investor relations for the Company.
JANET P. KING, age 33, has been a Vice President of the
Company since March 16, 1995 and Treasurer since May 24, 1994. She previously
was Director of Finance
<PAGE>
2
from September 1993 through May 1994. From April 1993 to August 1993, she was
Eastern Regional Controller of GFS/Northstar, which has residential and
commercial real estate interests in various states. From January 1989 to March
1993, she was associated with Trammell Crow Residential Services as Assistant
Controller and Accounting Manager.
PETER D. LINNEMAN, age 45, has been Chairman of the Board of
Directors of the Company since December 29, 1994 and a Director of the Company
since April 26, 1993. Dr. Linneman has been associated with The Wharton School
of the University of Pennsylvania since 1979, where he is currently the Albert
Sussman Professor of Real Estate, Finance and Public Policy. He also serves as
the Director of The Wharton Real Estate Center and Chairman of the Real Estate
Unit. Dr. Linneman is a Director of Gables Residential Property Trust, Kranzco
Realty Trust and Universal Health Realty Income Trust. He is a member of the
Audit Committee.
BENJAMIN D. HOLLOWAY, age 71, has been a Director of the
Company since the incorporation of the Company on July 17, 1985. Mr. Holloway
is currently a financial consultant with Carnival Hotels and Resorts, Miami,
Florida. From September 1988 to March 1990, he was Vice Chairman of The
Equitable Life Assurance Society of the United States ("The Equitable"). From
June 1987 to 1988, he was President and Chief Executive Officer of Equitable
Investment Corporation, the holding company for the investment subsidiaries of
The Equitable. From 1984 to 1987, he served as Chairman and Chief Executive
Officer of Equitable Real Estate Group, Inc. He is also a Director of Alliance
Capital Management Corporation. Mr. Holloway is a member of the Compensation
Committee and Chairman of the Audit Committee and Nominating Committee.
WILLIAM F. MURDOCH, JR., age 65, has been a Director of the
Company since February 17, 1994. Mr. Murdoch has been Principal of Murdoch and
Associates, a real estate development, investment and counseling company,
since 1990. He was previously President and Chief Executive Officer of HRE
Properties, a real estate investment trust, from 1974 to 1989, and Trustee
from 1974 to 1994. Mr. Murdoch is currently a director of MGI Properties. He
is a member of the Audit Committee.
PETER G. PETERSON, age 69, has been a Director of the Company
since the incorporation of the Company on July 17, 1985. Mr. Peterson has been
Chairman of The Blackstone Group, a private investment banking firm, since its
founding in 1985. He is also a director of Sony Corporation and Transtar, Inc.
Mr. Peterson is a member of the Nominating Committee and Chairman of the
Compensation Committee.
<PAGE>
3
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the
annual and long-term compensation for services in all capacities to the
Company for the fiscal year ended December 31, 1995 for the chief executive
officer and the two most highly compensated executive officers (other than the
chief executive officer) of the Company (each, a "Named Executive Officer").
No other executive officers of the Company received salary and bonus of
$100,000 or more in 1995.
<TABLE>
<CAPTION>
Annual Compensation
--------------------------------------------------
Other Annual All Other
Name and Compensation Compensation
Principal Position Year Salary($) Bonus($) ($)(1) ($)(2)
- ------------------ ---- --------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Richard M. Scarlata 1995 $241,298 $33,333 $13,722 $11,003
President & Chief Executive 1994 188,750 45,000 7,407 10,564
Officer (3)(4) 1993 n/a n/a n/a n/a
Stephanie Leggett Young 1995 96,520 13,333 0 3,582
Vice President & 1994 n/a n/a n/a n/a
Secretary(5) 1993 n/a n/a n/a n/a
Janet P. King 1995 93,395 13,333 0 3,332
Vice President and Treasurer(5) 1994 n/a n/a n/a n/a
1993 n/a n/a n/a n/a
</TABLE>
- ----------------------
(1) "Other Annual Compensation" for 1995 consists of amounts reimbursed to
Mr. Scarlata for the payment of certain taxes.
(2) "All Other Compensation" for 1995 consists of (i) contributions by the
Company to the Rockefeller Group, Inc. Incentive Savings Plan (the
"ISP"), which the Company has adopted as a participating employer,
for the benefit of each Named Executive Officer in the following
amounts: Mr. Scarlata, $5,301; Ms. Young, $2,896; and Ms. King,
$2,802; and (ii) payments for life insurance premiums for each of the
Named Executive Officers in the following amounts: Mr. Scarlata,
$5,702; Ms. Young, $686; and Ms. King, $530.
(3) Prior to June 1993, Mr. Scarlata was an officer of C&W Realty and was
compensated by C&W Realty.
<PAGE>
4
(4) Effective October 1, 1994, Mr. Scarlata was elected President & Chief
Executive Officer. Prior to that date, he served as Senior Vice
President, Finance & Administration. In 1993, Mr. Scarlata's total
annual salary and bonus was less than $100,000.
(5) In 1993 and 1994, the total annual salary and bonus for each of Mses.
Young and King was less than $100,000.
The Pension Plan. The Company has adopted the Retirement
Income Plan for Salaried Employees of Rockefeller Group, Inc. (the "RIP") as a
participating employer. The RIP is a defined benefit pension plan intended to
be tax-qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). In general, officers and employees of the Company become
participants in the RIP six months after their employment commences.
The following table illustrates the annual pension benefits
payable to certain participants, including the Chief Executive Officer, under
the RIP assuming retirement in 1995 at age 65, based on the straight-life
annuity form of benefit payment and not subject to deduction or offset for an
employee's primary Social Security benefit.
PENSION PLAN TABLE
Years of Service
---------------------------------------------------------
Remuneration 15 20 25 30 35
- ------------ -- -- -- -- --
$100,000 $22,500 $30,000 $37,500 $45,000 $50,000
125,000 28,125 37,500 46,875 56,250 62,500
150,000 33,750 45,000 56,250 67,500 75,000
175,000 33,750 45,000 56,250 67,500 75,000
200,000 33,750 45,000 56,250 67,500 75,000
225,000 33,750 45,000 56,250 67,500 75,000
250,000 33,750 45,000 56,250 67,500 75,000
300,000 33,750 45,000 56,250 67,500 75,000
350,000 33,750 45,000 56,250 67,500 75,000
400,000 33,750 45,000 56,250 67,500 75,000
The RIP provides for a monthly Retirement Insurance Benefit
at age 65 equal to 1.5% of final salaried compensation multiplied by years of
credited service up to a maximum of 30 years plus 1.0% of final salaried
compensation multiplied by years of credited service over 30 years. Final
salaried compensation is the average monthly total base salary, bonuses,
overtime and commissions including all amounts contributed by the
<PAGE>
5
Company to the ISP on behalf of the employee ("Salary," "Bonus," and the
portion of "All Other Compensation" attributable to contributions to the ISP
in the Summary Compensation Table) for the last three years of employment.
Pursuant to recently enacted changes to the Code compensation in excess of
$150,000 is not taken into account under the RIP.
All executive officers participate in the RIP. None of the
Company's directors is eligible to participate in the RIP. The years of
credited service under the RIP as of December 31, 1995 for Mr. Scarlata was 20
years (of which only 10.5 years relate to his service for the Company, which
includes service for C&W Realty) and for Mses. Young and King were 10.5 (which
includes service for C&W Realty) and 2.5, respectively.
Employment Contracts. Effective May 5, 1995, the Company
entered into an employment agreement with Mr. Scarlata providing for a base
annual salary of $250,000 during the term of the agreement, plus the right to
participation in the Company's welfare and retirement plans, and selection of
perquisites generally available to senior executives up to an amount
equivalent to 5% of base annual salary. Compensation arrangements are to be
reviewed and updated by the Company's Board of Directors annually on or about
October 1 of each year. The agreement will terminate upon the occurrence of
the earliest of four stated events: (i) Mr. Scarlata's death or disability;
(ii) Mr. Scarlata's voluntary termination (upon ten days prior notice); (iii)
the third anniversary of the date on which Mr. Scarlata receives notice that
the agreement will terminate on the third anniversary of receipt of such
notice; or (iv) termination by the Company for cause. In the event of
termination by the Company other than pursuant to the three-year notice
provision or for cause, or if Mr. Scarlata terminates voluntarily within 90
days of a Change in Opportunity (as defined in Mr. Scarlata's employment
agreement), Mr. Scarlata is entitled to continuation of his base salary and
participation in the Company's welfare and retirement plans for three years
(the "Severance Period"), as well as professional outplacement assistance and
continued office and secretarial support and other perquisites for the
duration of the Severance Period. In the event that Mr. Scarlata's employment
with the Company is terminated following stockholder approval of the Merger
Agreement (as defined below under Item 13), he will be entitled to receive
from the Company a lump sum payment equal to the present value of three years'
annual salary in lieu of payments during the Severance Period, and if, in the
reasonable judgment of the Board, Mr. Scarlata assisted in consummating the
Merger (as defined in the Merger Agreement), a cash bonus of $75,000. If,
however, any amounts due to Mr. Scarlata under the employment agreement or any
other Company program constitute a parachute payment under Section 280G of the
Code, then such amounts will be reduced so as not to constitute such a
payment.
Effective May 5, 1995, the Company also entered into
employment agreements with Stephanie Leggett Young and Janet P. King with
substantially similar terms as those contained in Mr. Scarlata's employment
agreement, with the exceptions described below.
<PAGE>
6
Ms. Young's agreement provides for a base annual salary of
$100,000. The agreement provides for termination by the Company pursuant to a
two-year notice provision and the Severance Period during which Ms. Young may
receive benefits is limited to two years. Ms. Young will receive a lump sum
payment equal to the present value of two years' annual salary in lieu of
payments during the Severance Period in the event that her employment with the
Company is terminated following stockholder approval of the Merger, and if, in
the reasonable judgment of the Board, Ms. Young assisted the Company in
consummating the Merger, a cash bonus of $20,000. If, however, any amounts due
to Ms. Young under the employment agreement or any other Company program
constitute a parachute payment under Section 280G of the Code, then such
amounts will be reduced so as not to constitute such a payment.
Ms. King's agreement also provides for a base annual salary
of $100,000. The agreement provides for termination by the Company pursuant to
a one year notice provision, and the Severance Period during which Ms. King
may receive benefits is limited to one year. Ms. King will receive a lump sum
payment equal to the present value of one year's annual salary in lieu of
payments during the Severance Period in the event that her employment with the
Company is terminated following shareholder approval of the Merger, and if, in
the reasonable judgment of the Board, Ms. King assisted the Company in
consummating the Merger, a cash bonus of $20,000. If, however, any amounts due
to Ms. King under the employment agreement or any other Company program
constitute a parachute payment under Section 280G of the Code, then such
amounts will be reduced so as not to constitute such a payment.
It is anticipated that, upon consummation of the Merger,
the employment of Mr. Scarlata, Ms. Young and Ms. King will be terminated.
Compensation Committee Interlocks and Insider Participation.
The Compensation Committee in 1995 consisted of Messrs. Holloway and Peterson.
No officers or former officers of the Company act as directors.
Compensation of Directors. All directors who are not
affiliated directly or indirectly with RGI ("Independent Director") are
entitled to receive annual retainers of $25,000 for service on the Board. Each
of the Company's current directors earned $25,000 pursuant to the retainer
arrangement in 1995. Board members also receive $1,000 for attendance at each
meeting in excess of four meetings per annum. Messrs. Holloway, Linneman,
Murdoch and Peterson each attended 35 meetings in 1995 and earned additional
attendance fees of $31,000 in 1995. In addition, the Chairman of the Board, so
long as that person is an Independent Director, is paid a fee of $25,000 per
year for services as Chairman in addition to regular fees for service as a
director. Dr. Linneman received $25,000 for his services as Chairman in 1995.
On November 28, 1995, the Board agreed to pay Dr. Linneman a bonus of $200,000
upon consummation of the Merger or a similar
<PAGE>
7
transaction resulting in receipt by the Company stockholders of consideration
at least equal in value to the Company stockholders, in recognition of the
substantial services he performed for the Company in connection with
transactions considered by the Board in 1995. Directors receive no other
compensation from the Company except as set forth below under
"Indemnification" and "Reimbursement."
Indemnification. The By-laws of the Company provide that the
Company will indemnify, to the extent authorized by applicable law, its
directors, officers, employees and agents against liabilities (including
expenses, judgments, fines and settlements) incurred by them in connection
with any actual or threatened action, suit or proceeding to which they are or
may become parties and which arise out of their status as directors, officers,
employees or agents. The Company maintains insurance which insures, within
stated limits, the directors and executive officers against these liabilities.
The Merger Agreement provides that subsequent to the
Effective Time (as defined in the Merger Agreement) the Surviving Company (as
defined below under Item 13) will indemnify and hold harmless each present and
former director, officer, employee, fiduciary and agent of the Company against
all losses in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administration or investigative,
arising out of or pertaining to any action or omission in their capacity as
director, officer, employee, fiduciary or agent occurring before the Effective
Time, whether asserted or claimed prior to, at or after the Effective Time,
for a period of six years after the Effective Time, in each case to the
fullest extent permitted under applicable law (and shall pay any expenses in
advance of the final disposition of such action or proceeding to the fullest
extent permitted under Delaware law).
For a period of six years after the Effective Time, the
Surviving Company shall maintain in effect policies of directors' and
officers' liability insurance in substantially the same terms and conditions
as contained in the Company's current policies of directors' and officers'
liability insurance in an amount not less than the amount currently maintained
by the Company with respect to claims arising from facts or events that
occurred prior to the Effective Time; provided that such insurance is
available on commercially reasonable terms.
Reimbursement. All directors and executive officers are
entitled to receive reimbursement from the Company for travel and other
expenses incurred in connection with their duties as directors and executive
officers of the Company. During 1995, such reimbursements totalled $49,045.
<PAGE>
8
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information
concerning the beneficial ownership of the outstanding shares of common stock
of the Company (the "Common Stock") by each person known by the Company to own
more than 5% of the outstanding shares as of March 31, 1996.
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF SHARES
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
- ------------------- -------------------- -----------------
The Goldman Sachs Group, L.P. 4,155,927(1) 9.80%
85 Broad Street
New York, New York 10004
Whitehall Street Real 4,045,102(1)(2) 9.54
Estate Limited Partnership V
85 Broad Street
New York, New York 10004
Leucadia National Corporation 2,714,000(3) 7.10
315 Park Avenue South
New York, New York 10010
Gotham Partners L.P. 2,124,900(4) 5.55
237 Park Avenue
Ninth Floor
New York, New York 10017
Goodman & Company Ltd. 1,917,300(5) 5.00
40 King St. West
55th Floor
Toronto, Ontario M5H 4A9
Canada
Elliott Associates, L.P. 1,507,700(6) 3.94
712 Fifth Avenue
36th Floor
New York, New York 10019
Westgate International, L.P. 531,500(6) 1.39
Martley International, Inc.
222 Cedar Lane
Suite 111
Teaneck, New Jersey 07666
<PAGE>
9
(1) The Goldman Sachs Group, L.P. (the "G.S. Group"), as the direct
beneficial owner of all of the capital stock of the general partners
of Whitehall and certain other investment funds under the indirect
control of G.S. Group, may be deemed to beneficially own the
4,155,927 currently exercisable warrants (the "Warrants") owned by
such funds (4,045,102 of which are owned by Whitehall). Whitehall and
such other funds also own an aggregate of 5,349,541 stock
appreciation rights ("SARs") (5,206,887 of which are owned by
Whitehall) exchangeable for 14% Debentures or Warrants on a
one-for-one basis, unless such exchange for Warrants would cause the
holder of such Warrants to beneficially own more than 9.8% of the
outstanding shares of Common Stock (the "Limit"). When effect is
given to all of the Warrants and SARs beneficially owned by G.S.
Group, G.S. Group has a 19.9% fully diluted equity interest in the
Company. Because the SARs are not currently convertible within 60
days into shares of Common Stock, G.S. Group is not deemed to have
beneficial ownership of the shares of Common Stock into which such
SARs might be converted. The amount shown in the table does not
include 3,000 shares owned by David M. Silfen and 100 shares owned by
Thomas J. Healey, both of whom are partners of G.S. Group.
(2) Upon the satisfaction or waiver of certain conditions, the Merger
will be consummated, in which case the Investor Group would be the
beneficial owners of 100% of the Common Stock (other than certain
Excluded Shares). See Item 13 - "Certain Relationships and Related
Transactions".
(3) In a statement of Beneficial Ownership on Schedule 13D dated October
5, 1995 filed by Leucadia National Corporation, Leucadia Inc. and LNC
Investments Inc., such persons reported that funds controlled by
Leucadia National Corporation beneficially owned 2,714,000 shares of
Common Stock.
(4) In a statement of Beneficial Ownership on Schedule 13D dated March
21, 1996 filed by Gotham Partners L.P., such person reported that it
beneficially owned 2,124,900 shares of Common Stock.
(5) In a statement of Beneficial Ownership on Schedule 13D dated
September 14, 1995 filed by Goodman & Company Ltd., such person
reported that it beneficially owned 1,917,300 shares of Common Stock.
(6) In a statement of Beneficial Ownership on Schedule 13D dated December
8, 1995 filed by Elliot Associates, L.P., Westgate International,
L.P. ("Westgate") and Martley International, Inc. ("Martley"), such
persons reported that they constitute a "group" as defined in Rule
13d-5(b)(1) of the Exchange Act with respect to their beneficial
ownership of the shares of Common Stock and that they beneficially
owned an aggregate of 2,039,200 shares of Common Stock or 5.33% of
the Common Stock outstanding. Martley expressly disclaims equitable
ownership of and pecuniary interest in any shares. Westgate and
Martley have shared voting and dispositive power with respect to the
shares owned by Westgate.
<PAGE>
10
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the number of shares of the
Company's Common Stock beneficially owned by each Named Executive Officer and
Director of the Company and all executive officers and directors of the
Company as a group as of March 31, 1996.
Number of Shares Percent of Shares
Name Beneficially Owned(1) Outstanding
---- --------------------- -----------------
Richard M. Scarlata.............. 1,071(2) *
Stephanie Leggett Young.......... 2 *
Janet P. King.................... 0 *
Benjamin D. Holloway............. 3,799(3) *
Peter D. Linneman................ 1,000(4) *
William F. Murdoch, Jr........... 3,000 *
Daniel M. Neidich................ 4,155,927(5)(6) 9.8%
Peter G. Peterson................ 1,000 *
All executive officers and
directors as a group (8 persons). 10,932(7) *
- ------------------------
(1) The table lists beneficial ownership in accordance with the
definitions contained in Rule 13d-3 adopted by the Securities and
Exchange Commission under the Exchange Act. All shares listed are
subject to the sole investment and voting power of the named
beneficial owner, except as set forth in footnotes (3) and (4) below.
(2) Does not includes 106 shares held by Mr. Scarlata's daughter. Mr.
Scarlata has no voting or investment powers and disclaims beneficial
ownership of such shares.
(3) These shares are held by Mr. Holloway as a joint tenant with his
spouse with whom he shares voting and investment powers.
(4) These shares are held by Dr. Linneman as a joint tenant with his
spouse with whom he shares voting and investment powers.
(5) On August 8, 1995, Mr. Neidich resigned as director of the Company.
(6) Mr. Neidich is a general partner of G.S. Group and Goldman, Sachs &
Co. G.S. Group, as the direct beneficial owner of all of the capital
stock of the general partners of Whitehall and certain other
investment funds under the indirect control of G.S.
<PAGE>
11
Group, may be deemed to beneficially own the 4,155,927 currently
exercisable Warrants owned by such funds (4,045,102 of which are
owned by Whitehall). Whitehall and such other funds also own an
aggregate of 5,349,341 SARs (5,206,887 of which are owned by
Whitehall) exchangeable for 14% Debentures or Warrants on a
one-for-one basis, unless such exchange for Warrants would cause the
holder of such Warrants to exceed the Limit. When effect is given to
all of the Warrants and SARs beneficially owned by G.S. Group, G.S.
Group has a 19.9% fully diluted equity interest in the Company.
Because the SARs are not currently convertible within 60 days into
shares of Common Stock, G.S. Group is not deemed to have beneficial
ownership of the shares of Common Stock into which such SARs might be
converted. As a general partner of G.S. Group, Mr. Neidich could be
deemed to beneficially own the Warrants and SARs beneficially owned
by Whitehall and such other investment funds; however, Mr. Neidich
disclaims beneficial ownership of such Warrants and SARs. The shares
attributed to Mr. Neidich in the table do not include 3,000 shares
owned by David M. Silfen and 100 shares owned by Thomas J. Healey,
both of whom are partners of G.S. Group.
(7) See footnotes (2), (3) and (4). All executive officers and directors
as a group excludes Mr. Neidich.
* Shares beneficially owned represent less than 1% of the shares
outstanding.
CHANGE IN CONTROL
The only arrangements known to the Company that may result in a
change in control of the Company are set forth below under Item 13 -
"Certain Relationships and Related Transactions".
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company, the Investor Group, the members of which are Whitehall,
Exor Group S.A., David Rockefeller, Rockprop, L.L.C., and Troutlet Investments
Corporation, have entered into an Agreement and Plan of Merger dated as of
November 7, 1995, as amended by Amendment No. 1 thereto dated as of February
12, 1996, and Amendment No. 2 thereto dated as of April 25, 1996 (as so
amended, the "Merger Agreement") pursuant to which, subject to satisfaction of
the conditions specified in the Merger Agreement, a corporation formed by
members of the Investor Group or their designated affiliates will merge into
the Company (the "Surviving Company"). The Surviving Company will be wholly
owned by the Investor Group or their designated affiliates, and the
stockholders of the Company will receive $8.00 in cash for each of their
shares of the Company's Common Stock other than Excluded Shares. The Merger
Agreement was approved at a special meeting of the Company's stockholders on
March 25, 1996. If the Merger is consummated, the Investor Group (together
with their
<PAGE>
12
designated affiliates) will own 100% of the Company's Common Stock (other
than Excluded Shares), in the following approximate percentages:
Whitehall 50.0%
Exor Group S.A. 20.5
David Rockefeller 4.5
Rockprop L.L.C. 4.5
Troutlet Investments Corporation 20.5
In addition, under the Merger Agreement, Goldman Sachs Mortgage Company
("GSMC"), which is a party to the Merger Agreement for this purpose, agreed to
make available to the Company up to $49.2 million of credit during the period
between November 7, 1995 and the earlier of (1) the consummation of the Merger
contemplated by the Merger Agreement or (2) any termination of the Merger
Agreement. Such credit would be secured on the same basis as the Floating Rate
Notes and the 14% Debentures, but would accrue interest at the rate of 10% per
annum (compounded quarterly) and be prepayable at any time without penalty. If
borrowings under this facility have not been repaid by the earlier of May 31,
1996, the consummation of the Merger contemplated by the Merger Agreement or
any termination of the Merger Agreement in specified circumstances, including
any exercise by the Company of its "fiduciary out", such borrowings would be
subject to the same terms and conditions as those applicable to the Floating
Rate Notes. The Company had borrowed $10.2 million from GSMC under this
facility as of December 31, 1995 and $47.5 million as of April 1, 1996. The
Company plans to borrow the remaining $1.7 million from GSMC under this
facility prior to the consummation of the Merger.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
3. EXHIBITS
DOCUMENTS INCORPORATED BY REFERENCE:
(10.31) Employment Contract between the Registrant and Richard M.
Scarlata dated as of May 5, 1995 is incorporated by
reference to Exhibit 10.1 to the Registrants Quarterly
Report on Form 10-Q for the period ended March 31, 1995.
(10.32) Employment Contract between the Registrant and Stephanie
Leggett Young dated as of May 5, 1995 is incorporated by
reference to Exhibit 10.2 to the Registrants Quarterly
Report on Form 10-Q for the period ended March 31, 1995.
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13
(10.33) Employment Contract between the Registrant and Janet P. King
dated as of May 5, 1995 is incorporated by reference to
Exhibit 10.3 to the Registrants Quarterly Report on Form 10-Q
for the period ended March 31, 1995.
