<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
NATIONAL CAPITAL MANAGEMENT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
PROXY STATEMENT
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
OCTOBER 29, 1996
Notice is hereby given that the Annual Meeting of Stockholders of National
Capital Management Corporation (the "Company") will be held at The Bristol
Suites Hotel, 7800 Alpha Road, Dallas Texas, on October 29, 1996, at 9:30 a.m.,
local time, to vote to:
1. Elect four directors to the Board of Directors for the ensuing year;
2. Ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors for the current fiscal year; and
3. Transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on September 20,
1996, as the record date to determine the stockholders entitled to notice of and
to vote at the annual meeting and any adjournments thereof.
By Order of the Board of Directors
......................................
Herbert J. Jaffe
PRESIDENT
San Francisco, California
September 30, 1996.
<PAGE>
PROXY STATEMENT
[LOGO]
160 SANSOME STREET
SAN FRANCISCO, CALIFORNIA 94104
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF SHAREHOLDERS--OCTOBER 29, 1996
The enclosed form of Proxy and the Proxy Statement have been mailed to
stockholders on or about September 30, 1996, in connection with the solicitation
by the Board of Directors of National Capital Management Corporation ("NCMC" or
the "Company") of proxies for use at its Annual Meeting of Stockholders to be
held on October 29, 1996, or at any adjournments thereof (the "Annual Meeting").
A copy of the Company's 1995 Annual Report to Stockholders, including
financial statements (the "Annual Report") and Report on Form 8-K dated October
3, 1996, is being mailed herewith to each stockholder entitled to vote at the
Annual Meeting.
As of September 1, 1996, the Company had outstanding 1,650,524 shares of
common stock, par value $.01 per share (the "Common Stock"). Holders of shares
of Common Stock of record at the close of business on September 20, 1996, are
entitled to vote at the Annual Meeting. Holders of shares of Common Stock are
entitled to one vote per share on each matter to be voted on at the Annual
Meeting. A majority of the outstanding shares will constitute a quorum at the
meeting. The election of directors requires a plurality of the votes cast and
votes may be cast in favor of, or withheld from, each nominee. Votes that are
withheld will be considered for purposes of determining a quorum, but will be
excluded entirely from the vote and will have no effect. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum for the transaction of business. Abstentions are counted in tabulations
of the votes cast on proposals presented to stockholders (and thus will have the
effect of the votes cast against the proposal), whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
It is the intention of the persons named as proxies to vote shares of Common
Stock represented by duly executed proxies for the election of the nominees for
directors selected by the Board of Directors unless authority to so vote has
been withheld or a contrary specification made. If any other business is
properly brought before the Annual Meeting, the Proxy will be voted in
accordance with the discretion of the persons named as proxies. Any such proxy
may be revoked by the stockholder at any time prior to the voting of the proxy
by a written revocation received by the Secretary of the Company, by properly
executing and delivering a later-dated proxy, or by attending the Annual Meeting
and voting in person.
<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
Four directors are to be elected to hold office until the next Annual
Meeting or until their successors shall have been elected and qualified. The
By-laws of the Company provide that the Board of Directors shall consist of not
less than one nor more than nine directors and that the number of directors at
any time shall be the number of directors fixed by resolution of the Board of
Directors. The Board of Directors has fixed the number of directors at four.
Each of the nominees is to be elected by the holders of Common Stock. Each of
the nominees has agreed to serve as a director, if elected. If, at the time of
the Annual Meeting, a nominee is unwilling or unable to serve (which is not
currently anticipated), the Board may fix the number of directors at less than
four, or the persons named as proxies may nominate and may vote for other
persons in their discretion.
Set forth below is a list of the nominees for the Board of Directors of the
Company. All of the nominees named below are currently directors of the Company.
<TABLE>
<CAPTION>
NOMINEE AND POSITION PRINCIPAL OCCUPATIONS
WITH THE COMPANY AND DIRECTORSHIPS
- --------------------------------- --------------------------------------------------------------------------------
<S> <C> <C>
James J. Pinto................... Chairman since 1989 NCMC
Chairman of the Board
Age 45
Director since 1988
Director Biscayne Holdings, Inc. (apparel
manufacturer and distributor)
Director Anderson Group, Inc. (dental and
electronics)
Director Electro Star, Inc. (printed circuit
board manufacturer)
John C. Shaw..................... Chief Executive Officer since 1994 NCMC
Director and Chief
Executive Officer
Age 42
Director since 1988
Co-Chairman from 1989 to 1992 NCMC
Managing Director since 1983 Resource Holdings, Ltd. (investment
firm)
Trustee Wedgestone Financial (diversified
lender and truck parts manufacturer)
Herbert J. Jaffe................. President-1988 to present NCMC
Director
Age 61
Director since 1987
Chairman-1983 to present NCM Management Ltd. (management company
of NCMC)
David Faulkner................... Vice President and Chief Financial Memorex Telex Inc. (computer industry)
Director Officer-1989 to 1995
Age 55
Director since July 1994
</TABLE>
The Board of Directors held four meetings during 1995. Each director
attended at least 75 percent of the meetings of the Board and of the committees
of the Board on which he served. The Board of Directors has a standing Executive
Committee, Audit Committee and Compensation Committee. The Executive Committee
may, to the extent permitted by law, perform such duties and exercise such
powers as the
2
<PAGE>
Board of Directors may perform and exercise. The Executive Committee is
responsible for identifying, considering and nominating candidates to serve on
the Company's Board of Directors and its committees. The Audit Committee is
charged with reviewing reports from the Company's accounting department and
independent public accountants; advising the Board of Directors on the Company's
accounting policies and internal controls; and reviewing the performance of the
Company's independent public accountants to make recommendations to the Board of
Directors concerning such accountants' engagements, the scope of their audits
and their fees. The Compensation Committee determines the compensation of the
Company's officers. Messrs. James J. Pinto, John C. Shaw and Herbert J. Jaffe
serve on the Executive Committee. Messrs. David Faulkner and Herbert J. Jaffe
serve on the Audit Committee. Messrs. Herbert J. Jaffe and David Faulkner serve
on the Compensation Committee. During 1995, the Executive Committee met ten
times, the Audit Committee met twice, and the Compensation Committee met three
times.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of NCMC Common Stock as of September 1, 1996, by: (i) each person
known by the Company to own beneficially more than 5 percent of the shares of
NCMC Common Stock, (ii) each person who is a director or executive officer of
the Company; and (iii) all directors and executive officers of the Company as a
group.
The Investor Warrants referred to below consist of warrants to acquire an
aggregate of 729,761 shares of NCMC Common Stock at any time prior to December
31, 1997. Of the aggregate Investor Warrants, 658,333 permit acquisition of
shares of NCMC Common Stock at an exercise price of $9.00 per share (the "$9.00
Investor Warrants") and 71,428 permit acquisition of shares of NCMC Common Stock
at an exercise price of $10.50 per share (the "$10.50 Investor Warrants"). The
Management Warrants, referred to below, consist of warrants to acquire an
aggregate of 133,333 shares of NCMC Common Stock at any time prior to December
31, 1997 for an exercise price of $9.00 per share. The Management Warrants and
the Investor Warrants are collectively referred to as the Warrants.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF BENEFICIAL OWNERSHIP OF
NCMC COMMON STOCK (1) NCMC COMMON STOCK (2)
-------------------------------- --------------------------------
<S> <C> <C> <C> <C>
PERCENT OF PERCENT OF
NAME AND ADDRESS OF NCMC BENEFICIAL OWNER (3) NUMBER OF SHARES CLASS NUMBER OF SHARES CLASS
- ----------------------------------------------------- ----------------- ------------- ----------------- -------------
RHEC, L.P............................................ 388,681 23.5% 757,728(4) 30.0%
520 Madison Avenue, 40th Fl.
New York, New York 10022
The Hawley Opportunity Fund, L.P..................... 142,695(5) 8.6% 201,028(6) 8.0%
c/o Hawley and Wright, Inc.
6053 S. Quebec Creekside 202
Englewood, CO 80111
Herbert J. Jaffe..................................... 11,512(7) * 51,512(8) 2.0%
James J. Pinto....................................... 144,571 8.8% 426,765(9) 16.9%
John C. Shaw......................................... 447,898(10) 27.1% 890,320(10) 35.3%
David Faulkner....................................... 0 * 0 *
All executive officers and directors as a group (4 (11) % (11) %
persons)........................................... 603,981 37.8 1,368,597 55.4
</TABLE>
- ------------
* Less than 1%
(1) This column assumes that none of the Warrants or Options have been
exercised.
(2) This column assumes that all of the Warrants and Options have been
exercised.
(3) Unless otherwise indicated, each shareholder listed has the sole power to
vote and direct the disposition of the shares beneficially owned by such
shareholder.
(4) Includes 369,047 shares which may be issued upon the exercise of Investor
Warrants. Mr. Shaw, a director of the Company, is a managing director of
Resource Holdings, Ltd., the general partner of RHEC, L.P.
3
<PAGE>
(5) Hawley and Wright, Inc. and Mr. MacDonald Hawley may also be deemed to
beneficially own these shares since Hawley and Wright, Inc. is the general
partner of the Hawley Opportunities Fund, L.P., and Mr. Hawley is the
president and controlling shareholder of Hawley and Wright, Inc.
(6) Includes 58,333 shares issuable upon exercise of Investor Warrants.
(7) Includes 11,379 shares owned by NCM Holdings, a general partnership of
which Mr. Jaffe is a general partner and 133 shares owned directly by Mr.
Jaffe.
(8) Includes 40,000 shares issuable upon exercise of Management Warrants,
11,379 shares owned by NCM Holdings and 133 shares owned directly by Mr.
Jaffe.
(9) Includes 144,571 shares owned directly by Mr. Pinto and 282,194 shares
issuable upon exercise of Investor Warrants.
(10) Mr. Shaw is a managing director of Resource Holdings, Ltd., the general
partner of RHEC, L.P. Except for 59,217 shares owned directly by Mr. Shaw,
as well as 73,375 shares issuable directly to Mr. Shaw upon exercise of
Investor Warrants, the shares shown as beneficially owned by Mr. Shaw are
the same shares shown as beneficially owned by RHEC, L.P.
(11) Includes 400,060 shares owned by NCM Holdings and RHEC, L.P. and 764,616
shares issuable upon exercise of all the Warrants and the Options.
EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation of the
Chief Executive Officer and each of the other three most highly compensated
executive officers of NCMC for services in all capacities to the Company and its
subsidiaries in 1995, 1994 and 1993.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------
<S> <C> <C> <C> <C>
SALARY ALL OTHER
YEAR ($) BONUS ($) COMPENSATION ($)
--------- --------- ----------- -------------------
John C. Shaw............................................. 1995 142,500 -- --
Chief Executive Officer, NCMC 1994 257,500 -- 4,000
1993 247,500 -- 9,000
James J. Pinto........................................... 1995 142,500 -- --
Chairman, NCMC 1994 257,500 -- 4,000
1993 247,500 -- 9,000
Herbert J. Jaffe......................................... 1995 100,000 -- --
President, NCMC 1994 100,000 10,000 4,000
1993 100,000 -- 9,000
Kenneth M. Klein......................................... 1995 150,000 -- --
President, National Capital Benefits Corp. 1994 170,835(1) -- 8,333
1993 0 0
</TABLE>
- ------------
(1) Mr. Klein was hired by National Capital Benefits Corp., a wholly-owned
subsidiary of NCMC, in May 1994.
The Company currently provides various non-cash benefits to its executive
officers, but it does not believe, except as noted, that such benefits exceed
the lesser of $50,000 or 10 percent of the cash compensation set forth for each
of them in the preceding summary compensation table.
No stock options were granted to the individuals named in the summary
compensation table during 1995 and none of those individuals exercised a stock
option during 1995. The following table sets forth for each of the executive
officers named in the summary compensation table above, the year-end value of
unexercised options.
4
<PAGE>
AGGREGATED OPTION EXERCISES IN 1995
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT YEAR END (#) AT YEAR-END ($)
-------------------------------- --------------------------------------
<S> <C> <C> <C> <C>
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------- ----------- ------------------- ----------------- -------------------
John C. Shaw.............................................. 73,375 0 0 0
James J. Pinto............................................ 282,194 0 0 0
Herbert J. Jaffe.......................................... 40,000 0 0 0
</TABLE>
Effective April 1, 1995, Messrs. Pinto and Shaw entered into agreements with
the Company to serve as Chairman of the Board and Chief Executive Officer,
respectively, through March 31, 1997, with options to extend these agreements
for one year if certain conditions are met. Messrs. Pinto and Shaw are each
compensated at the base annual rate of $125,000 plus (i) mandatory incentive
bonuses which are based on achieving certain Company operating objectives, and
(ii) discretionary bonuses which may be granted at the option of the Board of
Directors. If these agreements are terminated by the Company other than for
cause, disability or death, Messrs. Pinto and Shaw shall be entitled to receive
their base compensation through the existing term.
Pursuant to an agreement between the Company and NCM Management, Ltd., Mr.
Jaffe was entitled to receive $8,333 per month plus health benefits through July
31, 1996. See "Certain Relationships and Related Transactions." Effective August
1, 1996, Mr. Jaffe entered into a consulting arrangement with the Company and is
entitled to receive $5,000 per month through December 1996 and $4,000 per month
through July 1997.
The By-laws of the Company provide for indemnification of its officers and
directors to the fullest extent permitted by law.
During 1995, members of the Board of Directors who are not employees,
officers or consultants of the Company, received $2,000 per quarter as
compensation and $250 for each meeting attended. Directors are entitled to be
reimbursed for reasonable out-of-pocket expenses incurred in connection with
meetings of the Board.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and NCM Management, Ltd. ("NCM") have agreed that NCM will
provide management services through December 1996 and provide personnel,
equipment and facilities for the day-to-day management and operations of the
Company, including supervision of its remaining real estate properties. As
compensation for its services, NCM is receiving a monthly payment of $8,333
through July 31, 1996, plus management fees from three of the Company's
properties, consisting of 4 percent of revenues from Colony Ridge Apartments,
and 6 percent of revenues from each of Redbird Trails Apartments and North Oak
Apartments through June 30, 1996 and 4 percent thereafter. In addition, Mr.
Jaffe was provided health insurance benefits until July 31, 1996. Mr. Jaffe, a
director and officer of the Company, is NCM's Chairman of the Board; he also
owns approximately 33 percent of the outstanding capital stock of NCM and may be
deemed to have a material interest in all payments to NCM. During 1995, NCM
received an aggregate of $307,322 for management services rendered to the
Company, included in which amount was Mr. Jaffe's compensation.
In 1995, Resource Holdings, Ltd. ("Resource") provided office space and
related services at its principal office in New York City for John C. Shaw and
James J. Pinto, as well as for officers and directors of NCMC while in New York.
The Company reimbursed $75,492 to Resource for providing such office space and
related services in 1995. Mr. Shaw, a director and officer of the Company, is a
managing director and significant shareholder of Resource, and therefore may be
deemed to have a material interest in payments to Resource.
5
<PAGE>
PROPOSAL II
RATIFICATION AND APPROVAL OF THE
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Arthur Andersen LLP, the Company's
independent certified public accountants in 1995, to continue in that capacity
during 1996. Representatives of Arthur Anderson LLP are expected to be present
at the meeting with the opportunity to make a statement if they so desire and to
be available to respond to appropriate questions from stockholders.
STOCKHOLDERS PROPOSALS FOR NEXT ANNUAL MEETING
In order for any proposal that a stockholder intends to present at the 1997
Annual Meeting of Stockholders to be eligible for inclusion in the Company's
proxy statement for that meeting, such proposal must be received by the
Secretary of the Company at its offices in San Francisco, California, no later
than January 31, 1997. The proposals should be addressed to Herbert J. Jaffe,
160 Sansome Street (11th Floor), San Francisco, California 94104.
OTHER MATTERS
All properly executed Proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with the
directions given. In voting by proxy in regard to the election of four directors
to serve until the 1997 Annual Meeting of Shareholders, shareholders may vote in
favor of all nominees or withhold their votes as to all nominees or withhold
their votes as to specific nominees. With respect to other items to be voted
upon, shareholders may vote in favor of the item or against the item or may
abstain from voting. Shareholders should specify their choices on the enclosed
Proxy.
The Board of Directors does not intend to bring any matters before the
Annual Meeting other than as stated in this Proxy Statement and is not aware of
any other matters that will be presented for action at the Annual Meeting.
Should any other matters be properly presented, the person named in the enclosed
form of Proxy will vote the Proxy with respect thereto in accordance with their
best judgment, pursuant to the discretionary authority granted by the Proxy.
HERBERT J. JAFFE
PRESIDENT
Dated: September 30, 1996
6
<PAGE>
NATIONAL CAPITAL MANAGEMENT CORPORATION
Proxy-Solicited by the Board of Directors
The undersigned hereby appoints Herbert J. Jaffe and John C. Shaw, and
P each of them proxies of the undersigned, with power of substitution, to
R represent the undersigned and vote all shares of National Capital
O Management Corporation which the undersigned would be entitled to vote
X at the Annual Meeting of Stockholders to be held on October 29, 1996,
Y and any adjournment thereof, on the items set forth on the reverse hereof
and on such other business as may properly come before the meeting.
THE SHARES PRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY AUTHORIZED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1 AND
"FOR" THE RATIFICATION OF THE AUDITORS IN ITEM 2.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
(over)
<PAGE>
The Board of Directors Recommends vote "FOR All Nominees" in Item 1
and "FOR" the ratification of the auditors
in Item 2.
Item 1- Election of the following nominees as Directors:
Herbert J. Jaffe, James Pinto, John C. Shaw, David J. Faulkner
FOR ALL WITHHELD Item 2- Ratification of the appointment
NOMINEES / / FOR ALL / / of Arthur Andersen LLP as the
NOMINEES Company's independent auditor for
the Company's current year.
WITHHELD FOR THE FOLLOWING ONLY:
(write the name of the nomineee or the nominees)
- -----------------------------------------------
The undersigned hereby acknowledges receipt of Notice of Annual Meeting of
Stockholders and Proxy Statement dated September 30, 1996.
FOR / /
AGAINST / /
ABSTAIN / /
Please mark, date and sign as your name(s) appear(s) to the left and return
in the enclosed envelope. If acting as an executor, administrator, trustee,
guardian, etc. you should so indicate when signing. If the signer is a
corporation, please sign the full corporate name by duly authorized officer.
If shares are held jointly, each stockholder named should sign.
Signature(s) ________________________________ Dated____________________, 1996
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^FOLD AND DETACH HERE^
