INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/x/ Definitve proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WINFIELD CAPITAL CORP.
- - - --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Board of Directors Winfield Capital Corp.
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or Rule
14a-6(i)(2).
/ / $500 per each party per Exchange Act Rule 14a-6(i)(3), or Rule
14a-6(i)(2).
/ / 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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
WINFIELD CAPITAL CORP.
237 MAMARONECK AVENUE
WHITE PLAINS, NEW YORK 10605
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 30, 1996
To the shareholders of Winfield Capital Corp.:
The special meeting ("Special Meeting") of shareholders of Winfield Capital
Corp., a New York corporation, (the "Company"), will be held at 9:00 a.m.
(Eastern Time) on Monday, September 30, 1996 at The Yale Club of New York City
(Trumbull Room, 18th Floor), 50 Vanderbilt Avenue, New York, New York 10017, for
the following purposes:
1. To elect seven members to the Board of Directors to hold office until
the next annual meeting of shareholders and until their respective successors
are duly elected and have qualified; and
2. To consider and vote upon such other matters as may properly come before
the meeting and any adjournment(s) or postponement(s) thereof.
Only shareholders of record at the close of business on August 30, 1996,
are entitled to receive notice of and to vote at the Special Meeting.
The Board of Directors of the Company extends a cordial invitation to all
shareholders to attend the Special Meeting in person. Whether or not you plan to
attend the meeting, please fill in, date, sign and mail the enclosed proxy in
the return envelope as promptly as possible. Your proxy may be revoked by you at
any time prior to the meeting. The prompt return of your completed proxy will
assist the Company in obtaining a quorum of shareholders for the Special
Meeting, but will not affect your ability to change your vote by subsequent
proxy or by attending the meeting and voting in person. If you are unable to
attend, your signed proxy will assure that your vote is counted.
By Order of the Board of Directors
AUGUST 30, 1996 BRUCE A. KAUFMAN, SECRETARY
<PAGE>
WINFIELD CAPITAL CORP.
237 MAMARONECK AVENUE
WHITE PLAINS, NEW YORK 10605
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
SEPTEMBER 30, 1996
This Proxy Statement is furnished to the shareholders of Winfield Capital
Corp., a New York corporation (the "Company"), in connection with the
solicitation by and on behalf of the Company's Board of Directors (the "Board")
of proxies to be voted at the Special Meeting of Shareholders of the Company.
The meeting will be held on Monday, September 30, 1996 at 9:00 a.m. (Eastern
Time) at The Yale Club of New York City (Trumbull Room, 18th Floor), 50
Vanderbilt Avenue, New York, New York 10017, for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders. Officers and other
employees of the Company, without additional compensation, may solicit proxies
personally or by telephone if deemed necessary. Solicitation expenses, which are
not expected to exceed $5,000, will be paid by the Company.
All proxies that are properly executed and received prior to the Special
Meeting will be voted at the meeting. If a shareholder specifies how the proxy
is to be voted on any business to come before the meeting, it will be voted in
accordance with such specification. If a shareholder does not specify how to
vote the proxy, it will be voted FOR the election of the seven nominees to the
Board named in this Proxy Statement; and on such other business as may properly
come before the meeting. Any proxy may be revoked by a shareholder at any time
before it is actually voted at the meeting by delivering written notification to
the Secretary of the Company, by delivering another valid proxy bearing a later
date, or by attending the meeting and voting in person.
This Proxy Statement and the accompanying proxy are first being sent to
shareholders on or about August 30, 1996. The Company will bear the cost of
preparing, assembling, and mailing the notice, Proxy Statement, and form of
proxy for the meeting.
VOTING SECURITIES
All voting rights are vested exclusively in the holders of the Company's
common stock, $.01 par value per share (the "Common Stock"), with each share
entitled to one vote. Only shareholders of record at the close of business on
August 30, 1996 are entitled to receive notice of and to vote at the Special
Meeting or any adjournment. At the close of business on July 29, 1996, there
were 5,023,361 shares of Common Stock issued and outstanding. The Company
estimates that such shares are held by approximately 1,625 beneficial owners. A
majority of the shares of Common Stock issued and outstanding must be
represented at the Special Meeting, in person or by proxy, in order to
constitute a quorum. Cumulative voting is not allowed for any purpose.
The election of directors requires the affirmative vote of the holders of a
plurality of the shares present and represented at the meeting.
- 2 -
<PAGE>
A shareholder who abstains from voting or withholds his or her vote will be
counted as present for determining whether the quorum requirement is satisfied.
If a shareholder returns a signed proxy but fails to indicate a vote for or
against any proposal, for purposes of determining the outcome of the vote on any
such proposal, such shareholder will be deemed to have voted FOR the proposal. A
broker "non-vote" occurs when a nominee holding shares for a beneficial holder
does not have discretionary voting power and does not receive voting
instructions from the beneficial owner. Broker "non-votes" with respect to any
item to be voted upon at the Special Meeting will, however, be treated as shares
present and entitled to vote.
HOLDINGS OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
As of July 29, 1996, there were 5,023,361 shares of the Common Stock of the
Company outstanding. The Company has no other class of voting securities
outstanding.
The following table sets forth information, as of July 29, 1996, as to the
ownership of Common Stock by (a) each person known by the Company to own,
beneficially or of record, 5% or more of the outstanding Common Stock, and (b)
the directors and officers of the Company as a group:
=============================================================================
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF COMMON
OF OWNER OWNED (1) STOCK (2)
- - - -----------------------------------------------------------------------------
Paul A. Perlin 681,519 shs. (3) 13.01%
c/o Winfield Capital Corp.
237 Mamaroneck Avenue
White Plains, NY 10605
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David Greenberg 617,233 shs. (4) 11.93%
c/o Winfield Capital Corp.
237 Mamaroneck Avenue
White Plains, NY 10605
- - - -----------------------------------------------------------------------------
All Directors and
Officers as a
Group 1,751,323 shs. (5) 32.06%
=============================================================================
(1) All shares are held of record, as well as beneficially, unless otherwise
stated.
(2) Based on 5,023,361 outstanding shares of Common Stock plus the number
of shares underlying any stock options granted to the person whose
percentage interest is indicated.
(3) Includes 214,286 shares issuable upon the exercise of stock options granted
to Mr. Perlin. See "ELECTION OF DIRECTORS - Stock Options".
(4) Includes 150,000 shares issuable upon the exercise of stock options granted
to Mr. Greenberg. See "ELECTION OF DIRECTORS - Stock Options".
(5) Includes all shares owned by officers and directors of the Company,
including shares issuable upon the exercise of outstanding stock
options and stock options that are subject to approval by the
Securities and Exchange Commission (the "Commission"), but excluding
shares issuable upon the exercise of formula stock options granted to
each non-employee director as of March 31, 1996 (2,000 shares), which
management intends to reprice. See "ELECTION OF DIRECTORS - Stock
Options".
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<PAGE>
ELECTION OF DIRECTORS
The Company's Board of Directors consists of seven members. There is no
provision for cumulative voting in the election of directors. Directors will be
elected by a plurality vote of the shares represented at the Special Meeting.
The following table lists the names, ages, and the positions held with the
Company of, and the number of shares of the Company beneficially owned by, the
persons nominated to be directors of the Company. All of the nominees are
incumbent directors, and all have been approved as directors of the Company by
the Small Business Administration ("SBA"), as required. Additional information
regarding the business experience, length of time served in each capacity, and
other matters relevant to each individual are set forth in or below the table.
SHARES
NAME AND ADDRESS (1) AGE POSITION OWNED (2)
Paul A. Perlin (3) 44 Chairman, Chief Executive Officer and 681,519
Director
David Greenberg (3) 37 Chief Operating Officer and Director 617,233
R. Scot Perlin (3) 48 Director 87,714
Joel I. Barad 45 Director 44,857
Barry J. Gordon 51 Director 44,857
Allen L. Weingarten 42 Director 44,857
Scott A. Ziegler 36 Director 152,000
- - - ----------------------
(1) The business address for the directors of the Company is c/o Winfield
Capital Corp., 237 Mamaroneck Avenue, White Plains, New York 10605.
(2) Includes shares issuable upon the exercise of outstanding stock options
and, in the case of the non-employee directors, stock options that are
subject to the approval of the Commission under the Investment Company
Act of 1940, as amended (the "1940 Act"). Excludes shares issuable upon
the exercise of formula stock options granted to each non-employee
director (2,000 shares) as of March 31, 1996, which management intends
to reprice. See "Stock Options" below.
(3) The 1940 Act requires that a majority of the directors of a Business
Development Company, which the Company has elected to be, may not be
"interested persons," as defined in the 1940 Act. Each of the directors
named in the table above to which this note (3) pertains is an
"interested person."
The directors elected at the Special Meeting serve until the next annual
meeting of shareholders and thereafter until their respective successors are
elected and qualified.
The following sets forth biographical information as to the business
experience of each nominee for director of the Company for at least the past
five years.
Paul A. Perlin became the Chief Executive Officer, Chairman and a director
of the Company on May 2, 1995. He was Secretary of Pet Products Inc., a
manufacturer and distributor of dog chews ("Pet
- 4 -
<PAGE>
Products"), from November 1991 to February 1995, and a member of its Board of
Directors from March 1992 to February 1995, when it was acquired by The Hartz
Mountain Corporation ("Hartz"). From 1986 to 1990, Mr. Perlin was a Vice
President of Chase Manhattan Capital Corporation (an SBIC), Chase Manhattan
Investment Holdings, Inc. and The Chase Manhattan Bank, N.A., and a Director of
Chase Manhattan Capital Markets Corporation. Prior to joining Chase, Mr. Perlin
was Director of Corporate Finance at Neuberger & Berman, a New York Stock
Exchange member firm. Paul A. Perlin and R. Scot Perlin are brothers.
David Greenberg became a director of the Company on May 2, 1995 and its
Chief Operating Officer on November 1, 1995. He was a co-founder, President,
Chief Financial Officer and a director of Pet Products from its inception in
1981 to February 1995, when it was acquired by Hartz.
R. Scot Perlin became a director of the Company on May 2, 1995. The Company
intends, subject to the approval of the Board of Directors and the SBA, to elect
Mr. Perlin as an executive officer of the Company. From April 1994 to May 1995,
he was Executive Vice President and Chief Financial Officer of Meridien
Corporation, a multinational financial institution. He is currently an Adjunct
Professor at Columbia University's and Fordham University's Graduate Schools of
Business Administration at New York University's Stern School of Business. From
1987 to 1989, Mr. Perlin was a Senior Vice President for Yamaichi International
(America), Inc., a securities firm. From 1978 to 1987 he was with American
International Group ("AIG"), an insurance company, where he held several senior
management positions, including Senior Vice President and Chief Investment
Officer for American International Underwriters and Treasurer of AIG Capital
Corp., both subsidiaries of AIG, and Assistant Treasurer of AIG. Paul A. Perlin
and R. Scot Perlin are brothers.
Joel I. Barad became a director of the Company on October 24, 1995. He was
the Executive Vice President of Pet Products from 1993 to July 1995. He was Vice
President, Marketing, Seagram Asia Pacific and Global Duty Free, a distributor
of alcoholic beverages, from 1988 to 1993. From 1976 to 1988, he was an account
executive and later a Vice President of Ogilvy & Mather, an advertising agency.
Barry J. Gordon became a director of the Company on October 24, 1995. He
has been the President since 1980, and the Chairman of the Board of Directors
since 1987, of American Fund Advisors, Inc., a money management firm. Since
1990, he has been the President, and from 1990 to 1993, he was a director, of
John Hancock Technology Series, Inc., an investment company. From 1985 to 1992,
he was the Chairman, the President and a director of National Value Fund, Inc.,
an investment company. From 1981 to 1990, he was a director, and from 1983 to
1990, he was the President, of National Aviation & Technology Corp. and National
Telecommunications and Technology Fund, both investment companies and
predecessors of John Hancock Technology Series, Inc. Mr. Gordon is also a
director of various other companies.
Allen L. Weingarten became a director of the Company on October 24, 1995.
He has been special counsel to the New York law firm of Skadden, Arps, Slate,
Meagher & Flom since 1987, and previously was an associate in that firm for
eight years.
Scott A. Ziegler became a director of the Company on October 24, 1995. He
has been a partner in the New York law firm of Ziegler, Ziegler & Altman for the
past four years.
The Company did not have any standing committees during the fiscal year
ended March 31, 1996. At its meeting on May 21, 1996, the Company's Board of
Directors authorized the formation of an audit
- 5 -
<PAGE>
committee, consisting of Messrs. R. Scot Perlin, Barry J. Gordon and Allen L.
Weingarten, a compensation committee consisting of Messrs. Joel I. Barad,
Barry J. Gordon, Allen L. Weingarten and Scott A. Ziegler, and an executive
committee consisting of Messrs. Paul A. Perlin and David Greenberg and two
directors who are not "interested" persons, initially, Mr. Barad and Mr.
Ziegler.
During the fiscal year ended March 31, 1996, there were four meetings of
the Company's Board of Directors. No incumbent director, who was a director when
such meetings were held, attended fewer than three of such meetings.
EXECUTIVE COMPENSATION
The aggregate compensation payable to management of the Company is limited
by the SBA Regulations. The following table summarizes the compensation of the
named executive officers for each of the Company's past three fiscal years:
================================================================================
Name and Principal Fiscal Year(s) ended Salary Shares Underlying
Position March 31, Stock Options
- - - --------------------------------------------------------------------------------
Paul A. Perlin, 1996 $106,617 214,285 shares
Chairman of the Board ----------------------------------
Chief Executive Officer 1995 NONE
----------------------------------
1994 NONE
- - - --------------------------------------------------------------------------------
David Greenberg, 1996 $55,762 150,000 shares
Chief Operating Officer ----------------------------------
1995 NONE
----------------------------------
1994 NONE
- - - --------------------------------------------------------------------------------
Stanley M. Pechman, 1996 $65,536 64,286 shares
President ----------------------------------
1995 $70,000
----------------------------------
1994 $81,526
================================================================================
None of the named persons received bonuses or compensation other than as
shown in the above table.
Effective May 2, 1995, the Company entered into an employment agreement
with Paul A. Perlin for a term ending October 31, 1998, under which he is to
serve as the Chief Executive Officer of the Company. Mr. Perlin received a
salary at the rate of $95,000 per annum, through October 31, 1995 and is
currently receiving a salary at the rate of $165,000 per annum. Mr. Perlin's
salary is subject to annual cost-of-living adjustments. The employment agreement
contains provisions, in general, prohibiting Mr. Perlin from owning more than a
five percent equity interest in any companies or engaging in any other business
activities, that are competitive with the business of the Company. In addition,
Mr. Perlin has been granted, pursuant to the Company's stock option plan, an
option to purchase up to 214,286 shares of the Company's Common Stock at an
exercise price of $1.16 per share until May 2, 2002. The agreement provides for
the use of an automobile for Mr. Perlin, for the reimbursement of certain
business expenses and payment of annual premiums on a term life insurance policy
in the amount of $1,000,000, payable to beneficiaries named by Mr. Perlin.
- 6 -
<PAGE>
Effective November 1, 1995 the Company entered into an employment agreement
with David Greenberg, for a term ending three years ending on October 31, 1998,
to act as Chief Operating Officer of the Company. The agreement provides Mr.
Greenberg with a salary of $145,000 per annum, subject to annual cost of living
adjustments. The employment agreement contains provisions, in general,
prohibiting Mr. Greenberg from owning more than a five percent equity interest
in any companies, or engaging in any other business activities, that are
competitive with the business of the Company. The agreement provides for the use
of an automobile for Mr. Greenberg, for the reimbursement of certain business
expenses and a term life insurance policy in the amount of $1,000,000, payable
to beneficiaries named by Mr. Greenberg. In addition, Mr. Greenberg has been
granted, pursuant to the Company's stock option plan, an option to purchase up
to 150,000 shares of the Company's Common Stock at an exercise price of $1.16
per share until June 13, 2002.
On May 2, 1995, the Company entered into an employment agreement with
Stanley M. Pechman for a term of three years, under which he is to serve as
President of the Company. Mr. Pechman will receive a salary of $65,000 per
annum. The employment agreement contains provisions prohibiting Mr. Pechman from
owning more than a one percent equity interest in any companies, or engaging in
any other business activities, that are competitive with the business of the
Company. In addition, Mr. Pechman has been granted, pursuant to the Company's
stock option plan, an option to purchase up to 64,286 shares of the Company's
Common Stock at an exercise price of $1.16 per share until May 12, 1998. The
agreement also provides for the use of an automobile for Mr. Pechman and
reimbursement of certain business expenses.
In addition to the compensation provided in the agreements described above,
the Board of Directors, in its discretion, may grant bonuses to the Company's
officers subject to the overall management compensation limits in the SBA
Regulations.
The directors of the Company do not currently receive compensation other
than the stock options listed in the table below and reimbursement of certain
expenses relating to their directorships.
STOCK OPTIONS
At the date of this Proxy Statement, the following options had been granted
by the Company's Board of Directors under the Company's stock option plan;
formula options granted to each non-employee director as of March 31, 1996
(2,000 shares), which management intends to reprice, are excluded from the
table:
<TABLE>
<CAPTION>
======================================================================================================================
NUMBER
NAME OR DESCRIPTION RELATIONSHIP TO OF EXERCISE EXPIRATION OF POTENTIAL
OF OPTIONEE COMPANY SHARES PRICE (1) OPTION VALUE (2)
- - - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Paul A. Perlin Chairman of the 214,286 $1.16 May 2, 2002 $101,194
Board, Chief
Executive Officer
and Director
- - - ---------------------------------------------------------------------------------------------------------------------
David Greenberg Chief Operating 150,000 $1.16 May 2, 2002 $ 70,835
Officer and
Director
- - - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
NUMBER
NAME OR DESCRIPTION RELATIONSHIP TO OF EXERCISE EXPIRATION OF POTENTIAL
OF OPTIONEE COMPANY SHARES PRICE (1) OPTION VALUE (2)
- - - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stanley M. Pechman President and 64,286 $1.16 May 2, 1998 $ 11,754
Director
- - - ---------------------------------------------------------------------------------------------------------------------
R. Scot Perlin Director 2,000 $1.16 May 2, 2000 $ 641
- - - ---------------------------------------------------------------------------------------------------------------------
Joel I. Barad Director 2,000 $5.00 October 24, 2000 $ 2,763
- - - ---------------------------------------------------------------------------------------------------------------------
Barry J. Gordon Director 2,000 $5.00 October 24, 2000 $ 2,763
- - - ---------------------------------------------------------------------------------------------------------------------
Allen L. Weingarten Director 2,000 $5.00 October 24, 2000 $ 2,763
- - - ---------------------------------------------------------------------------------------------------------------------
Scott A. Ziegler Director 2,000 $5.00 October 24, 2000 $ 2,763
=====================================================================================================================
</TABLE>
(1) The exercise prices were based upon the fair market value of the shares
underlying the options on the date of the grants.
(2) The potential value is equal to the appreciated market value of the
underlying shares, assuming for this purpose that the market value of
the Common Stock will appreciate in value from the grant date to the
expiration of the option at an annualized (compounded) rate of 5%, less
the aggregate exercise price of the underlying shares.
The number of stock options that may be granted by the Company under its
stock option plan is restricted under the 1940 Act to 25% of the outstanding
number of shares of the Common Stock less the number of outstanding warrants and
any other warrants, options or right to purchase shares of Common Stock. Under
the 1940 Act, the options granted to non-officer directors require the approval
of the Commission, which at the date of this Proxy Statement has not been
applied for.
PENSION PLAN
The Company terminated its defined benefit pension plan on April 8, 1994.
The distribution of benefits was paid in full as of June 24, 1994. The Company
will incur no termination or withdrawal liability as a result of the action
taken by the Company to terminate its plan. The Company currently has no pension
or other retirement plan, or profit sharing plan or other contingent forms of
remuneration.
INDEMNIFICATION
Pursuant to Article EIGHTH of the Company's certificate of incorporation
and Article VI of the Company's by-laws, the Company is obligated to indemnify
any person, made, or threatened to be made, a party to an action or proceeding
(other than an action or proceeding by or in the right of the Company to procure
a judgment in its favor), whether civil or criminal, including an action by or
in the right of any other corporation, domestic or foreign, or any partnership,
joint venture, trust, employee benefit plan or other enterprise, which any
director or officer of the Company served in any capacity at the request of the
Company, by reason of the fact that he, was a director or officer of the
Company, or served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement and reasonable expenses, including
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<PAGE>
attorneys' fees, actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein. It is a requirement for such indemnity that
such director or officer have acted in good faith, for a purpose which he
reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interests of the Company, as
determined by a disinterested person and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his conduct was unlawful.
CERTAIN TRANSACTIONS
Maple Investors, Inc. ("Maple"), a corporation whose shares are held in
trust for members of Stanley M. Pechman's family, and Mr. Pechman, individually,
have on occasion participated with the Company in portfolio investments. On
October 31, 1993, the Company purchased certain of Maple's participation loan
receivables for $122,158, thereby eliminating Maple's investments in those
particular loans. The SBA, in a letter issued on July 29, 1994, found such
transaction to be self-dealing, therefore requiring SBA approval. In addition,
the sale from Maple to the Company caused the Company to exceed its single loan
limit. The SBA required that the receivables be resold to Maple. On April 28,
1995, as required by the SBA, Maple repurchased all such receivables for
$33,737.94, representing the Company's then remaining net investment therein.
On two occasions, Mr. Pechman, for his own account, has coinvested with the
Company in portfolio companies. In 1987, the Company and Mr. Pechman made loans
totalling $200,000 to Francis A. Lee, Inc., a construction company, on identical
terms and conditions. The loans were refinanced in 1992, and as of March 31,
1995, the borrower (which has filed for bankruptcy protection) owed the Company
and Mr. Pechman approximately $87,800 and $57,800, respectively. In 1985, the
Company, Maple and Mr. Pechman made loans totalling $200,000 to Maypat Realty
Corp., a real estate developer, on identical terms and conditions. The loans
were refinanced in 1988, and as of March 31, 1995 (after giving effect to
Maple's repurchase of receivables described in the preceding paragraph), the
borrower owed the Company and Mr. Pechman approximately $86,600 and $42,000,
respectively.
Reference is made to "ELECTION OF DIRECTORS" - Executive Compensation" for
information about employment agreements between the Company and Messrs. Paul A.
Perlin, David Greenberg and Stanley M. Pechman and for information about stock
options granted to management personnel and directors.
THE PRIVATE PLACEMENT AND CHANGE OF CONTROL
On May 2, 1995, the Company sold 2,581,753 shares of Common Stock in a
private placement to 34 investors (including certain officers and directors of
the Company) at a price of $1.16 per share (the "Private Placement").
Paul A. Perlin, the Chairman and Chief Executive Officer of the Company,
purchased 171,429 shares of Common Stock in the Private Placement, and David
Greenberg, the Chief Operating Officer-designate and a director of the Company
purchased 171,429 shares of Common Stock in the Private Placement. R. Scot
Perlin, a director, purchased 85,714 shares of Common Stock in the Private
Placement. In addition, a trust for the benefit of family members of the parents
of Paul A. Perlin and R. Scot Perlin purchased an aggregate of 85,714 shares of
Common Stock in the Private Placement and various family members of David
Greenberg and trusts for the benefit of such family members purchased an
aggregate of 565,477 shares of Common Stock in the Private Placement. Joel I.
Barad, Barry J. Gordon and Allen L. Weingarten, directors of the Company, each
purchased 42,857 shares, and Scott
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<PAGE>
A. Ziegler, also a director, purchased 128,571 shares, respectively, in the
Private Placement. Ziegler, Ziegler & Altman, of which Mr. Ziegler is a partner,
purchased 42,857 shares in the Private Placement.
Also on May 2, 1995, immediately prior to the Private Placement, Paul A.
Perlin and David Greenberg purchased all of the then outstanding shares of
Common Stock from the then existing shareholders of the Company (including
Stanley M. Pechman). Such purchase was made pursuant to a Stock Purchase
Agreement, dated as of August 25, 1994, as amended on November 30, 1994 (the
"Stock Purchase Agreement"), among the then existing shareholders of the
Company, Messrs. Perlin and Greenberg, and the Company. Pursuant to the Stock
Purchase Agreement, Mr. Perlin acquired 295,804 shares of Common Stock and Mr.
Greenberg acquired 295,804 shares of Common Stock, or an aggregate of 591,608
shares, for an aggregate purchase price of $686,858, which was the net asset
value of the Company at December 31, 1993 (approximately $1.16 per share). When
the parties began their negotiations in early 1994, they selected December 31,
1993 as the date for determining the Company's net asset value which formed the
basis of the purchase price for the outstanding shares of the Company. The
purchase price was evidenced by a promissory note (the "Note") signed by Paul A.
Perlin and David Greenberg, who are jointly and severally obligated to pay the
Note. The Note is payable to Mr. Pechman and the other former shareholders of
the Company and bears interest at a rate per annum equal to the "prime rate"
designated from time to time by Citibank, N. A., plus 1%, but not more than 12%
per annum. The principal amount of the Note and all accrued interest thereon are
due and payable on May 2, 1998. If the Company determines that the book value of
the loans and investments that were in its portfolio on December 31, 1993, as
reported to the SBA, has decreased between December 31, 1993 and April 21, 1998,
the principal amount of the Note ($686,858) will be reduced by the amount by
which the book value of such investments has decreased.
In the Stock Purchase Agreement, Mr. Pechman agreed to indemnify Messrs.
Perlin and Greenberg, from the date of the consummation of the transactions
contemplated by the Stock Purchase Agreement and thereafter, for any breach of
the representations and warranties contained therein in an amount no greater
than the face amount of the Note and any interest accrued thereon (except for
tax related matters, as to which there is no dollar limit on Mr. Pechman's
indemnity obligation). All other former shareholders of the Company agreed to
forego his or her right of payment under the Note if Mr. Pechman were to become
liable to Messrs. Perlin and Greenberg under the foregoing indemnity.
On May 2, 1995, immediately after the closing of the Stock Purchase
Agreement, Paul A. Perlin, R. Scot Perlin and David Greenberg were elected
directors of the Company.
SHAREHOLDER PROPOSALS
Proposals by shareholders of the Company to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Company no later than May 1,
1997 to be included in the Company's Proxy Statement and proxy for that meeting.
The proponent must be a record or beneficial owner of Common Stock of the
Company entitled to vote on his or her proposal at the 1997 Annual Meeting and
must continue to own such stock entitling him or her to vote through that date
on which the meeting is held.
ANNUAL REPORT
The Annual Report to Shareholders concerning the Company's operations
during the fiscal year ended March 31, 1996, including certified financial
statements as of and for the year then ended, is being
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<PAGE>
furnished to shareholders, together with this Proxy Statement. The Annual Report
is incorporated in this Proxy Statement and should be considered part of the
soliciting material.
OTHER MATTERS
The Company has requested representatives of Joel Popkin & Company, P.C.,
the Company's independent public accountants, to be present at the Special
Meeting. The Company will give such representatives an opportunity to make a
statement if they so desire, and it expects them to be available to respond to
appropriate questions from shareholders. The Board of Directors knows of no
other business to be presented at the Special Meeting of Shareholders. If other
matters properly come before the Special Meeting, the persons named in the
accompanying form of proxy intend to vote on such other matters in accordance
with their best judgment.
By Order of the Board of Directors
Bruce A. Kaufman, Secretary
August 30, 1996
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<PAGE>
WINFIELD CAPITAL CORP.
SPECIAL MEETING OF SHAREHOLDERS
SEPTEMBER 30, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby acknowledges receipt of the
Proxy Statement dated August 30, 1996 (the "Proxy Statement") and appoints Paul
A. Perlin and David Greenberg and each of them, with full power of substitution,
as the undersigned's proxies (the "Proxies") to vote at the Special Meeting of
Shareholders to be held at 9:00 a.m., Eastern Time, on Monday, September 30,
1996, at The Yale Club of New York City (Trumbull Room, 18th Floor), 50
Vanderbilt Avenue, New York, New York 10017, and at any adjournments thereof
(the "Meeting").
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER, UNLESS OTHERWISE INDICATED. THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES AS DIRECTORS REFERRED TO HEREIN.
(1) ELECTION OF DIRECTORS:
JOEL I. BARAD
BARRY J. GORDON
DAVID GREENBERG
PAUL A. PERLIN
R. SCOT PERLIN
ALLEN L. WEINGARTEN
SCOTT A. ZIEGLER
(TO WITHHOLD VOTE FOR ANY NOMINEE, STRIKE OUT HIS NAME)
(2) IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY BE BROUGHT BEFORE THE MEETING OR ANY
ADJOURNMENTS THEREOF.
IN WITNESS WHEREOF, THE UNDERSIGNED HAS SET HIS OR HER HAND THIS _______ DAY OF
___________________, 1996.
-----------------------------------
SHAREHOLDER'S SIGNATURE
-----------------------------------
PRINT SHAREHOLDER'S NAME
(Please sign exactly as name appears
to the left. When signing as
attorney, executor, trustee,
guardian, etc., please give full
title as such.)
