PRELIMINARY COPY
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
FILED BY THE REGISTRANT |X| | | CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED
FILED BY A PARTY OTHER THAN BY RULE 14a-6(e)(2))
THE REGISTRANT | |
CHECK THE APPROPRIATE BOX
|X| PRELIMINARY PROXY STATEMENT
| | DEFINITIVE PROXY STATEMENT
| | SOLICITING MATERIAL UNDER RULE 14a-12
WINFIELD CAPITAL CORP.
------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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| | 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:
___________________________________________________________________________
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
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:______________________________________________________________
4) Date Filed:________________________________________________________________
<PAGE>
PRELIMINARY COPY
WINFIELD CAPITAL CORP.
237 MAMARONECK AVENUE
WHITE PLAINS, NEW YORK 10605
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER __, 2000
To the Shareholders of Winfield Capital Corp.:
The Annual Meeting of shareholders (the "Annual Meeting") of Winfield
Capital Corp., a New York corporation (the "Company"), will be held at 9:00 a.m.
Eastern Time, September __, 2000, 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;
2. To ratify the appointment of PricewaterhouseCoopers LLP as the Company's
independent accountants for the fiscal year ending March 31, 2001;
3. To approve an Amendment to the Company's Certificate of Incorporation to
increase the authorized number of shares of common stock to 30,000,000 shares;
4. To consider and vote upon such other matters as may properly come before
the meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on August __, 2000 are
entitled to receive notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof.
The Board of Directors of the Company extends a cordial invitation to all
shareholders to attend the Annual 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 Annual 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
July __, 2000
R. SCOT PERLIN, SECRETARY
<PAGE>
PRELIMINARY COPY
WINFIELD CAPITAL CORP.
237 MAMARONECK AVENUE
WHITE PLAINS, NEW YORK
-------------
PRELIMINARY PROXY STATEMENT
-------------
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is being furnished to the holders of record as of
August __, 2000 of the common stock, $.01 par value ("Common Stock") 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 Annual Meeting of Shareholders of the Company. The
Annual Meeting will be held on September __, 2000 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 Annual 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 Annual
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, FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants for the
fiscal year ending March 31, 2001 and FOR an Amendment to the Company's
Certificate of Incorporation to increase the authorized number of shares of
Common Stock to 30,000,000 shares; 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 __, 2000. 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, with each share entitled to one vote. Only shareholders of record
at the close of business on August __, 2000 are entitled to receive notice of
and to vote at the Annual Meeting or any adjournment. At the close of business
on July __, 2000, there were 5,346,084 shares of Common Stock issued and
outstanding. A majority of the shares of Common Stock issued and outstanding
must be represented at the Annual Meeting, in person or by proxy, in order to
constitute a quorum. Cumulative voting is not allowed for any purpose.
<PAGE>
The election of directors requires the affirmative vote of the holders of a
plurality of the shares present and represented at the meeting. The proposals to
ratify the appointment of PricewaterhouseCoopers, LLP as the Company's
independent accountants for the fiscal year ending March 31, 2001 and to approve
an Amendment to the Company's Certificate of Incorporation to increase the
authorized number of shares of Common Stock both require the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock in person or
represented by proxy at the Annual Meeting.
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.
Broker "non-votes" are shares held by brokers or nominees which are present in
person or represented by proxy but which are not voted on a particular matter
because instructions have not been received from the beneficial owner. Broker
"non-votes" are counted as present and entitled to vote for the purpose of
determining the existence or absence of a quorum but are not counted as votes
cast with respect to any such matter.
HOLDINGS OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
As of July __, 2000, there were 5,346,084 shares of Common Stock
outstanding. The Company has no other class of voting securities outstanding.
The following table sets forth information, as of July __, 2000, 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 (a person
is deemed to be a beneficial owner of any securities of which that person has
the right to acquire beneficial ownership, as determined in accordance with Rule
13d-5 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), within 60 days), (b) each of the Company's officers and directors, and
(c) all officers and directors of the Company as a group:
PERCENTAGE OF
NAME OF CERTAIN BENEFICIAL NUMBER OF SHARES COMMON STOCK
OWNERS (1) BENEFICIALLY OWNED BENEFICIALLY OWNED
-------------------------- ------------------ ------------------
Paul A. Perlin (2) 872,819 15.2%
David Greenberg (3) 551,333 9.8%
R. Scot Perlin (4) 223,714 4.1%
Joel I. Barad (5) 82,857 1.5%
Barry J. Gordon (5) 45,357 0.8%
Allen L. Weingarten (5) 86,357 1.6%
Bruce A. Kaufman (6) 13,000 0.2%
All Directors and Officers
as a Group (7 persons) 1,875,437 (7) 30.5%
---------------------
(1) The business address for the above listed beneficial owners of the Company
is c/o Winfield Capital Corp., 237 Mamaroneck Avenue, White Plains, New
York 10605.
<PAGE>
(2) Includes 414,286 shares issuable upon the exercise of stock options granted
to Mr. Paul A. Perlin. See "ELECTION OF DIRECTORS - Stock Options".
(3) Includes 259,910 shares issuable upon the exercise of stock options granted
to Mr. Greenberg. See "ELECTION OF DIRECTORS - Stock Options".
(4) Includes 55,910 shares issuable upon the exercise of stock options granted
to Mr. R. Scot Perlin. See "ELECTION OF DIRECTORS - Stock Options".
(5) Includes 21,000 shares that, subject to approval by the U.S. Securities and
Exchange Commission (the "Commission"), are issuable upon the exercise of
stock options granted to Messrs. Barad, Gordon and Weingarten. See
"ELECTION OF DIRECTORS - Stock Options".
(6) Includes 6,000 shares that, subject to approval by the Commission, are
issuable upon the exercise of stock options granted to Mr. Kaufman. See
"ELECTION OF DIRECTORS - Stock Options".
(7) Includes all shares owned by officers and directors of the Company,
including shares that, subject to approval by the Commission, are issuable
upon the exercise of outstanding stock options. See "ELECTION OF DIRECTORS
- Stock Options".
The number of stock options that may be granted by the Company under its
stock option plan is restricted under the Investment Company Act of 1940, as
amended (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. No such other warrant,
option or right is outstanding at the date of this Proxy Statement.
There are no material proceedings pending to which any director or
executive officer is a party adverse to the Company or has a material interest
adverse to the Company.
PROPOSAL NO. 1 - 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 Annual Meeting. The
following table lists the names, ages, and the positions held with the Company.
All of the persons listed have been nominated to be directors. All of the
nominees are incumbent directors who have been approved as directors of the
Company by the Small Business Administration ("SBA"), as required.
NAME AGE POSITION
---- --- --------
Paul A. Perlin (1) 48 Chairman, Chief Executive Officer &
Director
David Greenberg (1) 41 Managing Director & Director
R. Scot Perlin (1) 52 Chief Financial Officer, Secretary &
Director
Joel I. Barad 48 Director
Barry J. Gordon 55 Director
Allen L. Weingarten 46 Director
Bruce A. Kaufman 40 Director
----------------
(1) 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 (1) pertains is an "interested
person".
<PAGE>
The directors to be elected at the Annual Meeting will serve until the next
annual meeting of shareholders and thereafter until their respective successors
are duly 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 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, served as
its Chief Operating Officer from November 1, 1995 to October 31, 1998 and since
November 1, 1998 has been a Managing Director of the Company. 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, its Chief
Financial Officer on October 3, 1996 and its Secretary on September 24, 1998. He
is currently an Adjunct Professor at both Columbia University's and New York
University's Executive MBA Programs and at Fordham University's Graduate School
of Business Administration. From April 1994 to May 1995, he was Executive Vice
President and Chief Financial Officer of Meridien Corporation, a multinational
financial institution. 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. Since
March 1999, Mr. Barad has been Chief Operating Officer at the Peterson Group, a
corporate and brand identity and design firm which is a subsidiary of True North
Communications, Inc. He was a Vice President at Curran Partners, Inc., a
retained executive search firm from September 1997 to March 1999. From August
1995 to August 1997, he ran his own management consulting practice. He was an
Executive Vice President of Pet Products from 1993 to July 1995. From 1988 to
1993, he was Vice President, Marketing, Seagram Asia Pacific and Global Duty
Free, a distributor of alcoholic beverages. 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.
<PAGE>
Allen L. Weingarten became a director of the Company on October 24, 1995.
He has been a partner in the New York office of the law firm of Morrison &
Foerster LLP since February 1998. Previously, Mr. Weingarten was special counsel
to the New York law firm of Skadden, Arps, Slate, Meagher & Flom LLP for more
than five years.
Bruce A. Kaufman became a director of the Company on September 24, 1998. He
served as the Company's Treasurer and Secretary from May 2, 1995 to September
24, 1998. He became Vice President, Corporate Finance at Loeb Partners
Corporation in July 1999. Previously, Mr. Kaufman ran his own independent
financial consulting practice from January 1998 until July 1999. He was a
co-founder and President of Rockwater International Group, Ltd., a manufacturer
and distributor of marine construction products from 1993 to 1997. From 1990 to
1993, Mr. Kaufman was an investment banker with Lehman Brothers, Inc.
At its meeting on September 24, 1998, the Company's Board of Directors
authorized the formation of an audit committee, consisting of Messrs. Barry J.
Gordon, Bruce A. Kaufman and R. Scot Perlin, and a compensation committee
consisting of Messrs. Joel I. Barad, Barry J. Gordon, Bruce A. Kaufman and Allen
L. Weingarten.
The Company is subject to the listing standards of the National Association
of Securities Dealers. In connection with such standards, the Company's Board of
Directors adopted a Charter of the Audit Committee at its meeting on June 13,
2000. Under this Charter, it appointed Messrs. Joel I. Barad, Barry J. Gordon,
Bruce A. Kaufman and Allen L. Weingarten (all of whom are independent directors
under the National Association of Securities Dealers listing standards) as
members of the Audit Committee. The Charter of the Audit Committee is attached
hereto as Appendix A.
The Audit Committee reviews, acts on and reports to the Board of Directors
with respect to various auditing and accounting matters, including the
recommendation of independent accountants, the scope of the annual audits, fees
to be paid to and the performance of the independent accountants and the
Company's accounting practices. Going forward, the Company will be in full
compliance with the Exchange Act Rules relating to Audit Committee disclosure.
The Compensation Committee of the Board of Directors is responsible for
setting the compensation of the officers of the Company and making
recommendations for the officers' compensation to the full Board of Directors.
The Compensation Committee approved and recommended the employment agreements of
Messrs. Paul A. Perlin and David Greenberg. See "Executive Compensation."
During the fiscal year ended March 31, 2000, there were six meetings of the
Company's Board of Directors. All of the directors attended 100% of the
meetings, except Messrs. Barad and Gordon who attended 83% of such meetings.
The Company has no independent investment advisor, principal underwriter or
sole Administrator. The Company's loan and other investment decisions are made
by its officers, subject to the Company's investment policies and objectives and
oversight by its Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's equity securities, to file with the Commission initial reports of
ownership and reports of changes in ownership of common stock and other equity
securities of the Company. Officers, directors and greater than 10% shareholders
are required by Commission regulations to furnish the Company with copies of all
Section 16(a) forms they file.
<PAGE>
To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company during the year ended March 31, 2000, no
officers, directors or persons who beneficially own more than 10% of the Common
Stock are not in compliance with Section 16(a).
EXECUTIVE COMPENSATION
The aggregate compensation payable to management of the Company is limited
by the SBA Regulations. The following table sets forth information with regard
to all compensation awarded to, earned by or paid to, all directors of the
Company, and for each of the three (3) highest paid executive officers that have
aggregate compensation for the most recently completed fiscal year in excess of
$60,000.00:
<TABLE>
<CAPTION>
NAME OF PERSON, AGGREGATE PENSION OR ESTIMATED TOTAL AWARDS LONG TERM PAYOUTS
POSITION COMPENSATION RETIREMENT ANNUAL COMPENSATION RESTRICTED COMPENSATION LTIP
FROM COMPANY BENEFITS BENEFITS FROM COMPANY STOCK AWARDS AWARDS PAYOUTS
ACCRUED AS UPON PAID TO SECURITIES
PART OF RETIREMENT DIRECTORS UNDERLYING
COMPANY OPTIONS
EXPENSES
--------------- ------------ ----------- ---------- ------------ ------------ -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul A. Perlin, $241,745 -0- -0- $241,745 -0- 414,286 Shares -0-
Chairman of the
Board, Chief
Executive Officer,
Director*
David Greenberg, $210,065 -0- -0- $210,065 -0- 259,910 Shares -0-
Managing Director,
Director*
R. Scot Perlin, Chief $157,444 -0- -0- $157,444 -0- 55,910 Shares -0-
Financial Officer,
Secretary, Director*
Joel I. Barad, -0- -0- -0- -0- -0- 21,000 Shares -0-
Director*
Barry J. Gordon, -0- -0- -0- -0- -0- 21,000 Shares -0-
Director*
Bruce A. Kaufman, -0- -0- -0- -0- -0- 6,000 Shares -0-
Director*
Allen L. Weingarten, -0- -0- -0- -0- -0- 21,000 Shares -0-
Director*
</TABLE>
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* None of the above persons received bonuses or compensation other than as
shown in the above table [including any pension or retirement benefits to
be paid at a future date.] Additionally, there were no individual grants of
stock options made during the last fiscal year.
Effective November 1, 1998, the Company entered into an employment
agreement with Paul A. Perlin for a term of two years ending October 31, 2000,
under which he is to continue to serve as the Chief Executive Officer of the
Company. Mr. Perlin receives a salary at the rate of $243,000 per annum. The
employment agreement contains provisions, in general, prohibiting Mr. Perlin
from owning more than a 5% equity interest in any companies, or engaging in any
other business activities, which are competitive with the business of the
Company. 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. Under his previous employment agreement, Mr.
Perlin had been granted, pursuant to the Company's stock option plan, options to
purchase up to 214,286 shares of the Common Stock at an exercise price of $1.16
per share until May 2, 2002.
<PAGE>
Effective November 1, 1998 the Company entered into an employment agreement
with David Greenberg for a term of two years ending October 31, 2000, under
which he is to act as Managing Director of the Company. Mr. Greenberg receives a
salary at the rate of $207,900 per annum. The employment agreement contains
provisions, in general, prohibiting Mr. Greenberg from owning more than a 5%
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. Under his previous agreement,
Mr. Greenberg had been granted, pursuant to the Company's stock option plan,
options to purchase up to 150,000 shares of the Common Stock at an exercise
price of $1.16 per share until May 2, 2002.
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 guidelines in the SBA Regulations and SBA approval. 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:
<TABLE>
<CAPTION>
NAME OR DESCRIPTION OF RELATIONSHIP TO NUMBER OF EXERCISE EXPIRATION POTENTIAL
OPTIONEE COMPANY SHARES PRICE (1) OF OPTION VALUE (2)
---------------------- --------------- --------- --------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Paul A. Perlin Chairman of the Board, Chief 214,286 $ 1.16 May 2, 2002 $ 101,194
Executive Officer & Director 200,000 $ 1.11 Feb. 24, 2003 $ 61,334
David Greenberg Managing Director & Director 150,000 $ 1.16 May 2, 2002 $ 70,835
109,910 $ 1.11 Feb. 24, 2003 $ 33,706
R. Scot Perlin Chief Financial Officer, 2,000 $ 1.16 May 2, 2003 (3) $ 641
Secretary & Director 4,000 $1.53125 Feb. 5, 2002 $ 1,692
49,910 $ 1.11 Feb. 24, 2003 $ 15,306
Joel I. Barad Director 2,000 $ 5.00 Oct. 24, 2003 (4) $ 2,763
4,000 $1.53125 Feb. 5, 2002 $ 1,692
15,000 $ 1.11 Feb. 24, 2003 $ 4,600
Barry J. Gordon Director 2,000 $ 5.00 Oct. 24, 2003 (4) $ 2,763
4,000 $1.53125 Feb. 5, 2002 $ 1,692
15,000 $ 1.11 Feb. 24, 2003 $ 4,600
Allen L. Weingarten Director 2,000 $ 5.00 Oct. 24, 2003 (4) $ 2,763
4,000 $1.53125 Feb. 5, 2002 $ 1,692
15,000 $ 1.11 Feb. 24, 2003 $ 4,600
Bruce A. Kaufman Director 4,000 $ 1.50 Apr. 24, 2002 $ 1,658
2,000 $ 1.11 Feb. 23, 2003 $ 613
</TABLE>
----------
(1) The exercise prices were based upon the fair market value of the shares
underlying the options on the date of the grants.
<PAGE>
(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 date of
expiration of the option at an annualized (compounded) rate of 5%, less the
aggregate exercise price the underlying shares.
(3) Expiration date of the option extended from May 2, 2000.
(4) Expiration date of the option extended from October 24, 2000.
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. No such
other warrant, option or right is outstanding at the date of this Proxy
Statement. Under the 1940 Act, the options granted to non-officer directors
require the approval of the Commission, which as of the date of this Proxy
Statement has been applied for and is pending.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINATED DIRECTORS
PROPOSAL NO. 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company, including a majority of the
disinterested directors, has appointed the firm of PricewaterhouseCoopers LLP to
serve as independent accountants of the Company for the fiscal year ending March
31, 2001, subject to ratification of this appointment by the affirmative vote of
the holders of the majority of shares present in person or by proxy at the
Annual Meeting.
One or more representatives of PricewaterhouseCoopers LLP is expected to be
present at the Annual Meeting, and such representative will be given an
opportunity to make a statement, if he or she wishes, and will be available to
answer appropriate questions from the shareholders present at the Annual
Meeting.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 31, 2001
PROPOSAL NO. 3 - APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has authorized, subject to shareholder approval, an
Amendment to the Company's Certificate of Incorporation to increase the
authorized number of shares of Common Stock from 10,000,000 to 30,000,000 shares
(the "Amendment").
As of July __, 2000, of the 10,000,000 shares of Common Stock authorized,
5,346,084 shares were issued and outstanding.
The additional shares that would be available for issuance if the Amendment
is adopted may be used, without further shareholder approval, for various
purposes, including, without limitation, raising capital, to effect stock
splits, providing equity incentives to employees, consultants, officers or
directors, establishing strategic relationships, investments and joint ventures
with other companies, and expanding the Company's business through the
acquisition of other businesses or products. The Company does not, at this time,
have any contract, plan, arrangement or other understanding with respect to any
issuance of the additional shares that would become authorized for future
issuance if the Amendment is adopted, but
<PAGE>
the Amendment would give the Company's Board of Directors the broad latitude and
flexibility to authorize at any future time and, from time to time, the issuance
of additional shares for these purposes without the need for subsequent
shareholder approval, except in certain circumstances in compliance with
applicable Nasdaq National Market listing requirements.
The additional shares of Common Stock that would be authorized for issuance
if the Amendment is adopted would have rights identical to the currently
outstanding Common Stock of the Company. Adoption of the Amendment and future
issuance of additional shares of Common Stock would not affect the rights of the
holders of the currently outstanding Common Stock of the Company, except for
effects incidental to increasing the number of shares of Common Stock
outstanding, such as dilution of earnings per share and dilution of the
percentage voting power of the current holders of Common Stock.
The Company does not contemplate seeking shareholder approval for any
future issuances of capital stock unless required to do so by applicable law, a
regulatory authority or a third party, including, without limitation, compliance
with the listing requirements of the Nasdaq National Market. Under the Company's
Certificate of Incorporation, no shareholder is entitled to preemptive rights
with respect to any future issuances of capital stock. The Board of Directors
believes the proposed increase in the authorized shares of Common Stock will
make a sufficient number of shares available should the Company decide to use
its shares of capital stock for one or more of such previously mentioned
purposes or otherwise.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock will be required to adopt the Amendment.
THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT
OF THE COMPANY'S CERTIFICATE OF INCORPORATION
CERTAIN TRANSACTIONS
Reference is made to "ELECTION OF DIRECTORS - Executive Compensation" for
information about employment agreements between the Company and Messrs. Paul A.
Perlin and David Greenberg and to "ELECTION OF DIRECTORS - Stock Options" for
information about stock options granted to management personnel and directors.
SHAREHOLDER PROPOSALS
Proposals by shareholders of the Company to be presented at the 2001 Annual
Meeting of Shareholders must be received by the Company no later than May 1,
2001 to be considered for inclusion 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 2001 Annual
Meeting and must continue to own such stock entitling him or her to vote through
that date on which the meeting is held.
<PAGE>
ANNUAL REPORT
The Annual Report to Shareholders on Form 10-K concerning the Company's
operations during the fiscal year ended March 31, 2000, including certified
financial statements as of and for the year then ended, is being 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 Board of Directors knows of no other business to be presented at the
Annual Meeting. If other matters properly come before the Annual 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
July __, 2000 R. SCOT PERLIN, SECRETARY
<PAGE>
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF WINFIELD CAPITAL CORP.
ARTICLE I - PURPOSE:
This Charter governs the operation of the Audit Committee of the Board of
Directors of Winfield Capital Corp. (the "Company'). The purpose of the Audit
Committee is to make such examinations as are necessary to monitor the Company's
systems of internal control, corporate financial reporting and its internal and
external audits, to provide to the Board of Directors the results of its
examinations and recommendations derived therefrom, to outline to the Board of
Directors improvements made, or to be made, in internal accounting controls, to
nominate independent auditors, and to provide to the Board of Directors such
additional information and materials as it may deem necessary to make the Board
of Directors aware of significant financial matters that require the Board of
Directors' attention.
In addition, the Audit Committee will undertake those specific duties and
responsibilities listed below and such other duties as the Board of Directors
from time to time prescribe.
ARTICLE II - MEMBERSHIP:
The Audit Committee members will be appointed by, and will serve at the
discretion of, the Board of Directors and will consist of at least three (3)
members of the Board of Directors, each of whom:
1. Will be able to read and understand fundamental financial statements,
in accordance with the Nasdaq National Market Audit Committee
requirements; and
2. At least one of whom will have past employment experience in finance
or accounting, requisite professional certification in accounting, or
other comparable experience or background, including a current or past
position as a chief executive or financial officer or other senior
officer with financial oversight responsibilities; and
3. Will (i) be an independent director; or (ii) if the Board of Directors
determines it to be in the best interests of the Company and its
stockholders to have one (1) non-independent director, and the Board
of Directors discloses the reasons for the determination in the
Company's next annual proxy statement, then the Company may appoint
one (1) non-independent director to the Audit Committee if the
director is not a current employee or officer, or an immediate family
member of a current employee or officer.
<PAGE>
ARTICLE III - RESPONSIBILITIES:
The Audit Committee shall:
1. Review on a continuing basis the adequacy of the Company's system of
internal and financial control;
2. Review on a continuing basis the activities, organizational structure
and qualifications of the Company's internal audit function;
3. Review the independent auditors' proposed audit scope, approach, and
independence;
4. Conduct a post-audit review of the financial statements and audit
findings, including any significant suggestions for improvements
provided to management by the independent auditors;
5. Review the performance of the independent auditors, who shall be
accountable to the Board and the Audit Committee;
6. Recommend the appointment of independent auditors to the Board of
Directors;
7. Review fee arrangements with the independent auditors;
8. Review before release the audited financial statements and
Management's Discussion and Analysis in the Company's annual report on
Form 10-K;
9. Review before release the unaudited quarterly operating results in the
Company's quarterly earnings release;
10. Oversee compliance with the requirements of the Securities and
Exchange Commission for disclosure of independent auditor's services
and audit committee members and activities;
11. Review management's monitoring of compliance with the Company's
Standards of Business Conduct and with the Foreign Corrupt Practices
Act;
12. Review, in conjunction with counsel, any legal matters that could have
a significant impact on the Company's financial statements;
13. Provide oversight and review of the Company's asset management
policies, including an annual review of the Company's investment
policies and performance for cash and short-term investments;
14. If necessary, institute special investigations and, if appropriate,
hire special counsel or experts to assist;
15. Review related party transactions for potential conflicts of interest;
<PAGE>
16. Provide a report in the Company's proxy statement in accordance with
the requirements of Item 306 of Regulations S-K and S-B and Item
7(e)(3) of Schedule 14A; and
17. Perform other oversight functions as requested by the full Board of
Directors.
In addition to the above responsibilities, the Audit Committee will
undertake such other duties as the Board of Directors delegates to it, and will
report, at least annually, to the Board regarding the Committee's examinations
and recommendations.
ARTICLE IV - MEETINGS:
The Audit Committee will meet at least two times each year. The Audit
Committee may establish its own schedule that it will provide to the Board of
Directors in advance.
The Audit Committee will meet separately with the Chief Executive Officer
and separately with the Chief Financial Officer of the Company at least annually
to review the financial affairs of the Company. The Audit Committee will meet
with the independent auditors of the Company, at such times as it deems
appropriate, to review the independent auditor's examination and management
report.
ARTICLE V - MINUTES:
The Audit Committee will maintain written minutes of its meetings, which
minutes will be filed with the minutes of the meetings of the Board of
Directors.
With respect to the foregoing responsibilities and processes, the Audit
Committee recognizes that the Company's financial management and the independent
auditors have more time, knowledge, and more detailed information regarding the
Company than do Committee members. Consequently, in discharging its oversight
responsibilities, the Audit Committee will not provide or be deemed to provide
any expertise or special assurance as to the Company's financial statements or
any professional certification as to the independent auditors' work. While the
Audit Committee has the responsibilities and powers set forth in this Charter,
it is not the duty of the Audit Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditors. Nor is it the duty of
the Audit Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditors, or to assure compliance with
laws and regulations and the Company's internal policies and procedures.
Dated: June , 2000
<PAGE>
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 July __, 2000 (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 Annual Meeting of
Shareholders to be held at 9:00 a.m., Eastern Time on September __, 2000, at The
Yale Club of New York City (Trumbull Room, 18th Floor), 50 Vanderbilt Avenue,
New York, New York 10017, and at any adjournment thereof (the "Meeting").
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, FOR THE
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS AND FOR THE AMENDMENT OF
THE COMPANY'S CERTIFICATE OF INCORPORATION.
(1) FOR ALL NOMINEES listed below (Except as marked to the contrary below) [ ]
WITHHOLD AUTHORITY to vote for all nominees listed below [ ]
Joel I. Barad, Barry J. Gordon, David Greenberg, Bruce A. Kaufman,
Paul A. Perlin, R. Scot Perlin, Allen L. Weingarten
Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.
--------------------------------------------------------------------------------
(continued on reverse side)
<PAGE>
(2) APPROVAL OF THE APPOINTMENT OF THE INDEPENDENT ACCOUNTANTS AS SET FORTH IN
THE ACCOMPANYING PROXY STAEMENT.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(4) IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY BE BROUGHT BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
IN WITNESS WHEREOF, THE UNDERSIGNED HAS SET HIS OR HER HAND THIS ____DAY OF
______________, 2000.
-------------------------
SHAREHOLDERS' SIGNATURE
-------------------------
PRINT SHAREHOLDERS' NAME
(Please sign exactly as name appears to
the left. When signing as attorney,
executor, trustee, guardian, etc.,
please give full title as such.)
