NATIONAL PROPERTIES CORPORATION
4500 Merle Hay Road
Des Moines, Iowa 50310
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 17, 2002
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Stockholders of National
Properties Corporation will be held at the offices of the Company, 4500 Merle
Hay Road, Des Moines, Iowa, on Friday, May 17, 2002, at 10:00 a.m., Des Moines
time, for the following purposes.
(a) Election of three nominees to the Board of Directors;
(b) Approval of the appointment of Northup, Haines, Kaduce, Schmid, Macklin,
P.C., as independent certified public accountants for the Company; and
(c) Transacting such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on April 12, 2002, as
the record date for the determination of stockholders entitled to notice of
and to vote at the meeting.
You are cordially invited to attend the meeting. Whether or not you plan to
attend, however, please sign, date and return the enclosed proxy at your
earliest convenience in the enclosed return envelope.
BY ORDER OF THE BOARD OF DIRECTORS
KRISTINE M. FASANO
Secretary
Des Moines, Iowa
April 26, 2002
VOTING YOUR PROXY IS IMPORTANT
- ------------------------------
The Company has approximately 600 stockholders. To assure a proper
representation at the meeting, each stockholder is requested to promptly
complete and return the enclosed proxy, using the accompanying addressed
envelope.
PROXY STATEMENT
NATIONAL PROPERTIES CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
May 17, 2002
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of National Properties Corporation (the
"Company") for use at the annual meeting of stockholders to be held at the
offices of the Company, 4500 Merle Hay Road, Des Moines, Iowa, at 10:00 a.m.,
Des Moines time, on Friday May 17, 2002, and at any adjournments thereof.
SHARES OUTSTANDING AND VOTING RIGHTS
On April 12, 2002, the record date for determination of stockholders entitled
to notice of and to vote at the annual meeting, the Company had outstanding
412,823 shares of Common Stock, which is the only voting security of the
Company. Holders of the Common Stock are entitled to one vote on a
noncumulative basis for each share held on the record date in the election of
directors and on any other matters brought before the meeting. Any person
giving a proxy has the right to revoke it at any time before it is voted by
written notice to the Secretary. All shares represented by effective proxies
on the enclosed form, received by the Company, will be voted at the meeting or
any adjourned session thereof in accordance with the terms of such proxies.
To the Company's knowledge, the following persons owned or may be deemed to
have beneficial ownership or control of, by virtue of actual or attributed
voting rights or investment powers, more than 5% of the outstanding shares of
Common Stock of the Company:
Number of Shares
In which Voting
Rights or
Number Investment Power Percentage
of Shares May Be Deemed Total of Shares
Name Owned To Exist Shares Outstanding
- ---- --------- ---------------- ------ -----------
Raymond Di Paglia (2)
(as of April 12, 2002) 131,000 87,650(1) 218,650(1) 52.96%
4500 Merle Hay Road
Des Moines, Iowa 50310
Robert W. Guely
(as of April 12, 2002) 30,000(3) 30,000(3) 30,000(3) 7.27%
4320 Park Hill Cir.
Urbandale, Iowa 50322
I. Wistar Morris III
(as of December 30, 2001 29,621(4) 29,621(4) 29,621(4) 7.17%
200 Four Falls Corp. Center, Suite 208
W. Conshohocken, PA 19428
(1) Includes 1,650 shares which are held as trustee for the benefit of one
child, 1,000 shares which were purchased and are owned by his wife, and 85,000
shares which are held as trustee of a testamentary trust created under his
father's will. Mr. Di Paglia disclaims beneficial ownership and control of
these shares, except to the extent of his beneficial interest in the
testamentary trust.
(2) Mr. Di Paglia may be deemed to be a controlling person of the Company.
(3) These shares are held by two trusts of which Mr. Guely serves as trustee
and is a beneficiary.
(4) As reported on Schedule 13D filed with the Securities and Exchange
Commission on December 30, 2001.
ELECTION OF DIRECTORS
Nominees
The Restated Articles of Incorporation provide for the classification of the
terms of the directors, and each director is elected to a three-year term. At
the 2002 annual meeting, three directors are to be elected. The Board of
Directors has nominated Tim Lynch for election to a term which will expire in
the year 2004, to complete the unexpired term of William D. Buzard. William
D. Buzard is resigning because of ill health effective at the 2002 annual
meeting. The Board of Directors has also nominated Kristine M. Fasano and
Robert H. Jamerson for election to a term which will expire in the year 2005.
Unless otherwise indicated on the proxy, the proxies being solicited by the
Board of Directors will be voted for Tim Lynch, Kristine M. Fasano and Robert
H. Jamerson. Kristine M. Fasano and Robert H. Jamerson, presently serves as
directors. If Tim Lynch, Kristine M. Fasano or Robert H. Jamerson becomes
unable to accept nomination or election for any reason, an event which the
Board of Directors does not anticipate, the enclosed proxy will be voted for
such other person(s) as may be determined by the holders of such proxy.
The nominees for election, and the name and term of office of the director
whose term does not expire at the annual meeting, are:
The Nominees The Continuing Director
- ------------ -----------------------
Term Expiring 2004 Term Expiring 2005 Term Expiring 2003
- ------------------ ------------------ ------------------
Tim Lynch Kristine M. Fasano Raymond Di Paglia
Robert H. Jamerson
INFORMATION ABOUT THE NOMINEES, THE CONTINUING DIRECTOR AND THE EXECUTIVE
OFFICERS
The Nominees and the Continuing Director
Shares Percentage
Benefi- of
Name, Age Principal Occupation Director cially outstanding
and Position During Past Five Years Since Owned(1) Shares
- ------------ ---------------------- ----- -------- -------
Raymond Di Paglia, 72 President of the Company 1960 218,650(2) 52.96%
President
and Director(3)
Robert H. Jamerson, 69 Retired Architect 1965 1,460 0.35%
Director(4) Since June, 2001
Kristine M. Fasano, 50 Vice President, , 1979 3,000 0.73%
Vice President, Secretary, Treasurer
Secretary, Treasurer, and Company Attorney
Director(3)
Tim Lynch, 39 Private Law Practice, 100 0.02%
Des Moines, IA
Since 1999, Lease Administrator
US Cellular, Cedar Rapids, IA
All executive officers and
directors as a group (4 persons) 223,110 54.04%
(1) As of April 12, 2002.
(2) Mr. Di Paglia disclaims beneficial ownership of a portion of such
shares. See Note 1 to the table on page 1.
(3) Kristine M. Fasano is the daughter of Raymond Di Paglia.
(4) Member of the Audit Committee of the Board of Directors.
The Board of Directors and Committees of the Board
The corporate powers of the Company are exercised by or under the authority
of, and the business affairs of the Company are managed under the direction of
the Board of Directors. During 2001, the Board of Directors held twelve
regular meetings. In carrying out its responsibilities, the Board of Directors
has established an Audit Committee, the membership of which is indicated in
the above table. Each director attended more than 75% of the meetings of the
Board and any committee on which such director served in 2001.
The duties of the Audit Committee, which met three times during 2001, are to
recommend to the Board of Directors the selection of the independent auditors;
consult with the auditors prior to and at the conclusion of the annual audit
with respect to matters of interest to the Committee; review with the auditors
the adequacy of internal controls, accounting personnel and proposed changes
in accounting policies; review with the auditors and management any comments
or recommendations from the auditors with respect to accounting procedures;
and approve the type, scope and costs of services to be performed by the
auditors. During its 2001 meetings, the Audit Committee approved the type,
scope and costs of services to be performed by the auditors. The Company's
Board of Directors has not adopted a written charter for the Audit Committee.
Audit Fees
The aggregate fees billed for professional services rendered for the audit of
the Company's annual financial statements for the most recent fiscal year and
the reviews of the financial statements included in the Company's Forms 10-Q
filed with the Securities and Exchange Commission was $30,976.
All Other Fees
The aggregate fees billed for non-audit services rendered by the principal
accountant for the most recent fiscal year was $2,175. The Company's Audit
Committee has considered whether the provision of these non-audit services
(consisting primary of tax return preparation) is compatible with maintaining
the principal accountant's independence.
Compensation of Executive Officers
The following table sets forth the annual compensation of the President and
Chief Executive Officer of the Company for each year of the 3-year period
ended December 31, 2001.
Summary Compensation Table
Name and Position Year Salary
- ------------------- ---- -------
Raymond Di Paglia 2001 133,813
President & Chief 2000 129,013
Executive Officer 1999 123,617
Mr. Di Paglia is employed under a ten-year contract which is
automatically renewed each year in the absence of action to the contrary
by the Board of Directors. His annual compensation is subject to an
increase equal to the greater of 3% or the increase in the Consumer
Price Index (CPI-U). In the event the Company should terminate Mr. Di
Paglia's employment, other than for disability or for cause, he shall be
entitled to receive (without offset by earnings of subsequent
employment) his then annual compensation for the unexpired term
(presently ten years) of the contract, payable, at his election, monthly
over such period (presently $1,354,080) payable in 120 monthly
installments) or in a lump sum discounted to present value (presently
$1,080,966). The Company shall be deemed to have terminated the
contract for the foregoing purposes in the event of Mr. Di Paglia's
determination made in good faith that, as a result of a change of
control of the Company, and a change in the circumstances which
thereafter significantly affect his position, he is unable to carry out
the authorities, powers and duties attached to this position. A change
in control would be deemed to have occurred upon the acquisition by a
person (or group of persons acting in concert), other than Mr. Di
Paglia, of over 50% of the Common Stock of the Company, or a significant
change in the composition of the Board of Directors without the
concurrence of the present directors. A termination would also be deemed
to occur in the event a successor to the Company in a business
combination did not assume the employment contract.
The Company has a profit-sharing plan qualified under Section 401 of the
Internal Revenue Code under which employees of the Company, including two
executive officers, may receive benefits upon retirement. Under the plan, the
Company contributes the lesser of 15% of the compensation of the participating
employees, or 5% of the pre-tax profits of the Company for such year
(excluding any capital gains or losses). All employees are eligible to
participate upon meeting certain requirements. Plan participants vest at the
rate of 10% annually for the first two years and 20% annually for the next
four years of service. Benefits are payable at normal retirement age 65 under
a variety of payment options upon disability, and upon termination of service
before normal retirement age in specified circumstances. For the year ended
December 31, 2001, the Company contributed $35,547 to the plan, of which
$20,463 was credited to Raymond Di Paglia, and $8,221 was credited to Kristine
M. Fasano. Because amounts contributed to the plan in the future will be
dependent upon future profits, it is not possible to presently estimate the
amount of benefits which may be payable to the executive officers of the
Company upon retirement.
Compensation of Directors
Directors' fees of $1,500 were paid for each meeting attended in 2001 to the
directors who were not also employees of the Company. No compensation was paid
for service on the Audit Committee.
APPROVAL OF APPOINTMENT OF ACCOUNTANTS
The Board of Directors of the Company has selected Northup, Haines, Kaduce,
Schmid, Macklin, P.C., as independent certified public accountants to provide
auditing services to the Company for the year 2002. This firm provided the
2001 audit services for the Company, and is believed by the Board of Directors
to be well qualified to continue this service. A representative of the firm is
expected to be present at the meeting to respond to appropriate questions, and
to make a statement if such representative desires to do so. The approval of
the selection of Northup, Haines, Kaduce, Schmid, Macklin, P.C., is being
submitted to the stockholders at the meeting. The Board of Directors
recommends approval of this appointment. If such appointment is not approved,
the Board of Directors will appoint other auditors deemed suitable by it.
The Board of Directors recommends a vote FOR the proposal to approve the
appointment of Northup, Haines, Kaduce, Schmid, Macklin, P.C. The enclosed
proxy will be so voted unless a contrary specification is made.
The report of the Audit Committee that follows shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement or future filings into any filing under the Securities
Act of 1933 or under the Securities Exchange Act of 1934, except to the extent
that the Company specifically incorporates the information by reference, and
shall not otherwise be deemed filed under such Acts.
AUDIT COMMITTEE REPORT
March 15, 2002
To the Board of Directors
The Audit Committee consists of the following members of the Board of
Directors: Robert H. Jamerson and William D. Buzard. Each of the
members is independent as defined under the rules of the Nasdaq Stock
market.
We have reviewed the Company's audited financial statements and met
separately with both management and Northup, Haines, Kaduce, Schmid,
Macklin, P.C., the Company's independent auditors, to discuss and review
those financial statements and reports prior to issuance.
We have discussed with the independent auditors, Northup, Haines,
Kaduce, Schmid, Macklin, P.C., the matters required to be discussed by
Statement of Auditing Standards No. 61, Communication with Auditing
Committees, as amended, issued by the Auditing Standards Board of the
American Institute of Certified Public Accountants.
We have received from and discussed with Northup, Haines, Kaduce,
Schmid, Macklin, P.C. the written disclosure and the letter required by
Independence Standards Board Standard No. 1 (Independence Discussions
with Audit Committees). These items relate to that firm's independence
from the Company.
Based on these reviews and discussions we recommend to the Board of
Directors that the Company's audited financial statements be included in
the Company's Annual Report on Form 10K for the year ended December 31,
2001 for filing with the Securities and Exchange Commission.
Audit Committee
Robert H. Jamerson (Chair)
William D. Buzard
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2003 annual meeting must
be received by the Company for inclusion in its proxy soliciting materials to
such meeting no later than December 24, 2002.
Under the Bylaws of the Company, any stockholder who wishes to nominate a
candidate for director is required to notify the Secretary of the Company in
writing of such intention at least 90 days in advance of the annual meeting.
Such notice must set forth specified information about the candidate. A copy
of the Bylaws prescribing such information may be secured from the Secretary.
OTHER BUSINESS
The Board of Directors is not aware of any other business which will come
before the meeting. If any other business should come before the meeting, the
persons named in the accompanying proxy will vote on it according to their
best judgment.
COST AND METHOD OF PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, arrangements have been made with brokerage houses,
nominees and other custodians and fiduciaries to send the proxy material to
their principals, and the Company will reimburse them for their expenses in
doing so. Proxies may also be solicited personally or by telephone or
telegraph by the directors and officers without additional compensation.
By Order of the Board of Directors
KRISTINE M. FASANO
Secretary
Des Moines, Iowa
April 26, 2002
PROXY NATIONAL PROPERTIES CORPORATION
Solicited on Behalf of the Board of Directors
The undersigned hereby appoints RAYMOND DI PAGLIA, ROBERT H. JAMERSON AND
KRISTINE M. FASANO, or any one or more of them, with full power of
substitution, attorneys and proxies to represent the undersigned at the Annual
Meeting of Stockholders of NATIONAL PROPERTIES CORPORATION, to be held on May
17, 2002, at 4500 Merle Hay Road, Des Moines, Iowa, and at any adjournments
thereof, with all power which the undersigned would possess if personally
present, and vote all shares of stock which the undersigned may be entitled to
vote, as designated on reverse side.
The proxies are instructed to vote as indicated on the other side. Where no
indication is shown, they are to vote FOR items 1 and 2. In addition, they may
vote in their discretion on such other matters as may properly come before the
meeting.
(Please mark this Proxy and sign and date it on the reverse side hereof, and
return it in the enclosed envelope).
The Board of Directors recommends a vote FOR Items (1) and (2).
I plan to attend
the meeting 0
1. Election of Directors, Nominees: Kristine M. Fasano - Robert H. Jamerson
Tim Lynch
For all (3) withhold
nominees authority
0 0
2. Proposal to approve the appointment of Northup, Haines, Kaduce, Schmid,
Macklin, P.C. as independent Certified Public Accountants.
FOR AGAINST ABSTAIN
0 0 0 PLEASE NOTE ANY CHANGE OF ADDRESS
Dated: ______________________________, 2002.
Signature of shareholder(s)
Please date, sign exactly as name(s) appear hereon and return in the enclosed
envelope (Do not print). Fiduciaries, please add title