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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only
[X] Definitive Information Statement
Capitol Communities Corporation
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(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and O-11.
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule O-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
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CAPITOL COMMUNITIES CORPORATION
25550 Hawthorne Boulevard
Torrance, CA. 90505
_______________________
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD SEPTEMBER 22, 2000
To Our Stockholders:
The Annual Meeting of Stockholders of Capitol Communities Corporation (the
"Company") will be held Friday, September 22, 2000, at 3 p.m., Pacific Time, at
the offices of the Company, 25550 Hawthorne Boulevard, Torrance, California
90505.
The purposes of the meeting are:
1. To elect a Board of Directors to serve for the ensuing year;
2. To consider and act upon such other matters as may properly come
before the meeting or any adjournment thereof.
Holders of the Company's Common Stock of record at the close of business
on August 8, 2000, are entitled to receive notice of and to vote at the meeting.
The accompanying Information Statement is furnished on behalf of the
Board of Directors of the Company, pursuant to Section 14(c) of the Securities
and Exchange Act of 1934 (the "Exchange Act"), to provide notice of the
Company's Annual Meeting of Stockholders.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
For the Board of Directors
/s/ Michael G. Todd
Michael G. Todd, President & Secretary
August 29, 2000
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CAPITOL COMMUNITIES CORPORATION
25550 Hawthorne Boulevard, Suite 207
Torrance, CA 90505
INFORMATION STATEMENT
Annual Meeting of Shareholders
September 22, 2000
This information Statement is being furnished on behalf of the Board of
Directors of Capitol Communities Corporation (the "Company") to provide notice
of the Company's Annual Meeting of Stockholders to be held Friday, September 22,
2000, at 3 p.m. Pacific Time at the principal place of business of the Company,
25550 Hawthorne Boulevard, Torrance, California. This Information Statement is
first being mailed or provided to stockholders of the Company on or about August
29, 2000.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
VOTING AT MEETING
This Information Statement is first being sent or given to stockholders on
August 29, 2000. The common stock, $0.01 par value (the "Common Stock"), of the
Company is the only outstanding class of voting securities of the Company.
Stockholders of record at the close of business on August 8, 2000, the record
date for determining stockholders entitled to notice, are the only stockholders
entitled to vote at the meeting. As of the record date, there were 4,230,361
shares of Common Stock outstanding and approximately 919 holders of the Common
Stock. Each record holder of the Company's Common Stock is entitled to one vote
for each share of common stock held.
The shares owned by Prescott Limited Partnership ("Prescott LP"), the
controlling shareholder of the Company, will be voted for the election of
directors recommended by the Board of Directors. See also discussion below,
"SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
QUORUM FOR MEETING
The By-Laws of the Company require, for a quorum, the presence at the
meeting in person or by proxy, of the holders of a majority of the shares of
capital stock of the Company entitled to vote.
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ELECTION OF DIRECTORS
Three (3) directors are to be elected to hold office for one year or until
their successors are elected and qualified. The Company has been informed that
Prescott LP intends to nominate and cast its votes for the persons named below.
The affirmative vote of a majority of the shares of Common Stock represented at
the Annual Meeting is required to elect a director.
Prescott LP is the beneficial owners of approximately 2,851,589 shares or
67.41% of the common stock of the Company, and as such can elect the three
Directors named below to the Company's Board of Directors at the stockholders
annual meeting.
Brief biographies of the nominees for the Board of Directors of the
Company, setting forth the nominees ages as of August 1, 2000, an account of
their business experience and other information appear below. All such nominees
are members of the present Board of Directors.
Michael G. Todd 50: Mr. Todd has served as a Director and President of the
Company since 1995. He is also the sole Director and President of the Company's
wholly-owned subsidiary, Capitol Development of Arkansas, Inc. Mr. Todd has
extensive experience in the banking industry, having been the President and
Chief Executive Officer of two Southern California banks, Orange City Bank and
Bay Cities National Bank. Mr. Todd is the sole managing partner of Granite
Industries LLC, which is the managing general partner of Prescott LP, the
controlling shareholder of the Company.
Robert R. Neyland 44: Mr. Neyland has been a Director of the Company since
1994. He also serves on the Board of Directors of HomeCapital Investment
Corporation, a public company. Since 1993, Mr. Neyland has been the Chief
Financial Officer for Select Switch Systems, Inc., a privately-held Texas
company. He was also, from 1990 to 1996, a partner in Living Suite, a weekly
and monthly residential rental company.
Thomas Blake 66: Mr. Blake has been a Director of the Company since March 1997,
when he was appointed by the Board of Directors to succeed Ronald J. Campbell.
Mr. Blake is the Director, Business/ Finance, of Glenwood L. Garvey Associates,
an urban planning and consulting firm. As Special Advisor to Self-Cleaning
Environments USA, Inc., a manufacturer of environmentally friendly waste
disposal units, Blake provides consulting services regarding business planning,
financing, and marketing. He is the founder and former principal of Thomas C.
Blake Consulting, an advisory service firm, and was Chief Executive Officer of
Interstate Group Administrators, Inc., a benefit services company. He is a
director of West Coast Savings & Loan and formerly was a director of various
other financial institutions.
The Board of Directors held four (4) meetings or meetings by teleconference
during the fiscal year ended September 30, 1999. All Directors attended or
participated by teleconference at least eighty percent of the meetings. The
Company has no audit, nominating or compensation committees.
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EXECUTIVE OFFICERS
The By-Laws of the Company provide for the election of executive officers
annually at the meeting of the Board of Directors following the annual meeting
of stockholders. Executive officers serve until their successors are chosen and
qualified or until their death, resignation or removal.
Brief statements setting forth the age, as of the date of this Information
Statement, the offices held and the business experience during the past five
years of each executive officer appearing below.
Michael G. Todd 50: Chairman of the Board, President and Secretary. For the
biography of Mr. Todd see "Election of Directors."
David Paes 45: Vice President, Treasure and Assistant Secretary. Paes is
Executive Vice President and a controlling shareholder of Maumelle Enterprises,
a real estate management company that currently provides management and
administrative service to the Company. He has been involved in real estate
development as a chief financial officer of two real estate land companies since
1977, and is a certified public accountant.
Raymond C. Baptista 58: Vice President of Finance and Assistant Secretary.
Baptista has 25 years experience in banking and finance, both nationally and
internationally. He has also been actively involved in real estate acquisitions
and development and was president and CEO of a national real estate management
company.
RELATED TRANSACTIONS
Services Provided by Affiliated Companies
The Company has paid fees or expects to pay fees to certain affiliated
companies for various types of services, and will continue to do so in the
future. These arrangements are summarized below.
Maumelle Enterprises, Inc. Agreement. The Company has an oral agreement
with Maumelle Enterprises, Inc. to provide management and administrative
services for the Maumelle Property. Currently, Maumelle Enterprises manages the
Company's inventory of property, oversees any sale of property, and manages
administrative matters such as ensuring payment of taxes, mortgages and other
expenditures incurred in management of the property. Maumelle Enterprises also
represents the Company at local and state hearings that may affect the Company's
property. Until March 1997, Maumelle Enterprises was owned primarily by officers
and directors of the Company. It has no clients other than the Company and
DeHaven Todd Limited Partnership, an Arkansas limited partnership ("DTLP"),
which is owned almost entirely by Michael G. Todd and John W. DeHaven. David
Paes, an officer of the Company and Mary
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Peyton, an officer of the Company's subsidiaries own 50% of the outstanding
shares of Maumelle Enterprises, as of the date of this Report. Mary Peyton, the
President of the Resort Subsidiary, receives a salary of $66,000 per annum as an
officer of Maumelle Enterprises. Mr. Paes, vice president, treasurer and
assistant secretary of the Company, receives a salary of $84,000 per annum as an
officer of Maumelle Enterprises.
Under the oral management and administrative services agreement, payment to
Maumelle Enterprises for management services depends upon the actual services
rendered in a given month and the current liquidity of the Company. If funds are
not available, Maumelle Enterprises has agreed to defer payment of its
management fees. For the fiscal year ended September 30, 1999, the Company paid
Maumelle Enterprises $269,649 in expenses, which effective after June 14, 1999,
included overhead expenses, paid accrued and previously unpaid management fees
of $50,599 and payment of $33,463 which is considered an overpayment. The
Company will be credited the $33,463 against future management fees and/or by
the assumption by Maumelle Enterprises of liabilities owed by the Company. Due
to the divestment of the Resort subsidiaries, management expenses have
decreased.
Subleasing of Office Space. The Company is currently subleasing its
principal office space in Torrance, California from DTC, a California
partnership. The partnership is owned fifty percent by Michael G. Todd and
charges the Company $2,144 per month. The Company paid DTC the total of
$23,776 in rental payments for the fiscal year ended September 30, 1999. The
Company plans to continue to sublease its office space from DTC until at least
September 30, 1999.
On October 1, 1995, the majority of the disinterested board of directors
voted to approve the oral agreement between the Company and DTC for the
subleasing of office space from DTC to the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of shares of Common
Stock as of August 8, 2000, for (i) each person who is known by the Company to
be the beneficial owner of more than a 5% interest in the Company, (ii)
directors of the Company, (iii) the sole "named executive officer" of the
Company, as defined in Item 402(a)(2) of SEC Regulation S-B, and (iv) the
directors and named executive officer of the Company as a group. Unless
otherwise indicated in the footnotes, all such interests are owned directly, and
the indicated person or entity has sole voting and investment power.
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<TABLE>
<CAPTION>
Name and
Title of Class address of Amount and Percent of
beneficial nature of bene- class
owner(1) ficial owner
<S> <C> <C> <C>
Common Stock Michael G. Todd(2) 2,896,589 shares 0%
Common Stock Robert R. Neyland 0 shares 0%
Common Stock Thomas Blake 0 shares 0%
Common Stock Director and Executive
Officers as a Group 2,896,589 shares 68.47%
</TABLE>
(1) Unless otherwise indicated, the address of the beneficial owner is 25550
Hawthorne Boulevard, Suite 207, Torrance, California 90505.
(2) All of these shares are owned by Prescott Investments, L.P., and Granite
Industries LLC. Michael G. Todd is the sole managing member of Granite
Industries LLC, which is the managing general partner of Prescott LP. Todd
is the sole "named executive officer" of the Company, as defined in Item
402(a)(2) of SEC Regulation S-B.
BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, as well as beneficial owners of more than 10 percent of any class
of securities which is registered under the Exchange Act to file initial reports
of ownership and reports of changes in ownership of securities of the Company
with the Securities and Exchange Commission (the "SEC"). Executive officers and
directors are required to furnish the Company with copies of all reports filed
with the SEC. Based solely on a review of the copies of such reports furnished
to the Company during the fiscal year ended September 30, 1999, all beneficial
ownership reports required to be filed pursuant to Section 16(a) by directors,
officers and beneficial owners of 10% of the Company's outstanding Common Stock
have been filed, but were filed late.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFERS
The following table sets forth certain information with respect to the
compensation that was paid for the fiscal year ended September 30, 1999, to the
Company's executive officers.
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the period indicated:
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Other Securities All
and Annual Restricted Underlying Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary($) Bonus($) sation($) Award(s)($) SARs(#) Payouts($) sation($)
-------- ---- -------- -------- --------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael 9/30/99 0/(1)/ 0 0 0 0 0 0
Todd,
Chairman/
President
David 9/30/99 0 0 0 50,000(2) 0 0 0
Paes (2)
Vice president,
Treasurer & Ass.
Secretary
Ray Baptista(3) 0 0 0 0 0 0 0
</TABLE>
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(1) Michael G. Todd has been employed as President of the Company since
November 1994. During fiscal year, Mr. Todd was paid $259,073, which is
deferred and current compensation for the period October 1, 1997, through
September 30, 1999. As of the fiscal year, Mr. Todd has accrued salary in the
amount of $220,927. Mr. Todd will continue to accrue one-half or $10,000 of his
$20,000 per month salary.
(2) David Paes has been Vice-President of the Company since July 1995, but has
not devoted any significant amount of time to its operations. Paes has
received no salary or other compensation from the Company from October 1, 1998
through September 30, 1999.
(3) Raymond C. Baptista has been Vice President of the Company since October,
1997.
The Company has a five-year written agreement with Todd to perform the
duties of President. Under the agreement, which became effective on October 1,
1995, Todd is to be compensated at a rate of $20,000 per month. As of the date
hereof, Mr. Todd has deferred his
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salary for the period October 1, 1998 through September 30, 1999. There can be
no assurance, however, that Mr. Todd will continue to defer his salary. The
agreement expires on September 30, 2000. The Company is not party to any other
employment agreements.
DIRECTOR COMPENSATION
Outside directors are compensated for their services in the amount of $500
per month. Outside directors Neyland and Blake have agreed to defer such
compensation until the Treasurer of the Company determines that sufficient funds
are available to make such payments. Such compensation has been deferred since
April 1994, and continues to be deferred. For the fiscal year ended September
30, 1999, the Company had a deferred liability in the amount of $12,000 for
outside directors' compensation.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Joel S. Baum, P.A., has served as the independent
auditors of the Company for the fiscal year ended September 30, 1999, and has
been appointed by the Board of Directors to serve as the Company's independent
auditors for the fiscal year ending September 30, 2000. The accounting firm of
Joel S. Baum has informed the Company that it will not have representatives at
the Company's Annual Meeting.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal intended to be presented by a stockholder at the Company's
2000 Annual Meeting of Stockholders must be received in writing at the Company's
principal executive offices by December 1, 2000 so that it may be considered by
the Company for inclusion in the proxy statement and form of proxy or in the
information statement relating to the meeting.
By Order of the Board of Directors
/s/ Michael G. Todd
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Michael G. Todd
President & Secretary
August 29, 2000
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