<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
SAXTON INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] 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:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(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> 2
SAXTON INCORPORATED
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 2, 1998
To the Stockholders of
Saxton Incorporated:
The Annual Meeting of Stockholders of Saxton Incorporated will be held on
Thursday, July 2, 1998, 10:00 a.m., local time, at the Armadillo Meeting Room in
Texas Station Casino, located at 2101 Texas Star Lane, North Las Vegas, Nevada
89030, for the following purposes:
1. To elect eight directors to serve until the next annual meeting of
stockholders and until their respective successors are duly elected and
qualified; and
2. To transact any other business which may properly come before the
meeting and any adjournments or postponements thereof.
A proxy statement containing information for stockholders is annexed hereto
and a copy of the Annual Report of the Company on Form 10-K for the fiscal year
ended December 31, 1997 is enclosed herewith.
The Board of Directors has fixed the close of business, June 1, 1998, as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE DATE AND
SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE ENCLOSED
FOR THAT PURPOSE.
By the order of the Board of Directors
James C. Saxton
Chairman of the Board and President
Las Vegas, Nevada
June 12, 1998
<PAGE> 3
SAXTON INCORPORATED
5440 WEST SAHARA AVENUE, THIRD FLOOR
LAS VEGAS, NEVADA 89102
(702) 221-1111
------------------------
PROXY STATEMENT
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Saxton Incorporated ("Saxton" or the
"Company"), a Nevada corporation, for use only at its Annual Meeting of
Stockholders to be held on Thursday, July 2, 1998, and any adjournments or
postponements thereof (the "Annual Meeting").
Shares may not be voted unless the signed proxy card is returned, the
Stockholder attends the Annual Meeting in person or other specific arrangements
are made to have shares represented at the meeting. Any stockholder of record
giving a proxy may revoke it at any time before it is voted by filing with the
Secretary of Saxton a notice in writing revoking it, by duly executing a proxy
bearing a later date, or by attending the Annual Meeting and expressing a desire
to revoke the proxy and vote the shares in person. Stockholders whose shares are
held in street name should consult with their brokers or other nominees
concerning procedures for revocation. Subject to such revocation, all shares
represented by a properly executed proxy card will be voted as directed by the
Stockholder on the proxy card. IF NO CHOICE IS SPECIFIED, PROXIES WILL BE VOTED
FOR THE PERSONS NOMINATED BY THE BOARD OF DIRECTORS FOR ELECTION AS DIRECTORS.
In addition to soliciting proxies by mail, Company directors, officers and
other regular employees, without additional compensation, may solicit proxies
personally or by other appropriate means. The total cost of solicitation of
proxies will be borne by Saxton. Although there are no formal agreements to do
so, it is anticipated that Saxton will reimburse banks, brokerage houses and
other custodians, nominees and fiduciaries for their reasonable expenses in
forwarding any proxy soliciting materials to their principals.
Only Stockholders of record at the close of business on June 1, 1998 are
entitled to receive notice of and to vote at the Annual Meeting. On June 1,
1998, Saxton had outstanding 7,661,422 shares of common stock (the "Common
Stock"), which constituted all of the outstanding voting securities of Saxton.
Each share is entitled to one vote. A majority of the outstanding shares of
Common Stock will constitute a quorum. Abstentions and broker non-votes are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business but will not be counted for purposes of determining
whether a proposal has been approved, and thus will have the effect of a "No"
vote. Directors are elected by a plurality of votes cast. Stockholders may not
cumulate their votes for any one or more nominees for election. The affirmative
vote of a majority of the shares present and voting at the Annual Meeting will
be required to approve any other items which might be submitted for
consideration at the Annual Meeting.
It is anticipated that this proxy statement and accompanying proxy card
will first be mailed to stockholders on or about June 12, 1998.
1
<PAGE> 4
ELECTION OF DIRECTORS
NOMINEES
Directors of the Company are elected annually to serve until the next
annual meeting of Stockholders and until their respective successors are duly
elected and qualified. The Company's Articles of Incorporation and Bylaws
provide that the Board of Directors shall consist of not less than two and not
more than fifteen directors, as set by resolution of the Board of Directors. The
Board of Directors has set the number of directors at eight and has nominated
each of the following incumbent Directors for re-election as directors at the
Annual Meeting:
James C. Saxton
Michele Saxton-Pori
Douglas W. Hensley
Marc S. Hechter
Timothy J. Adams
Paul Eisenberg
Bernard H. Mikell, Jr.
Robert L. Seale
Information concerning the nominees for election as directors is set forth
under the caption "MANAGEMENT -- Directors and Executive Officers of the
Company."
The Board of Directors has no reason to believe that its nominees will be
unable or unwilling to serve if elected. However, should any nominee named
herein become unable or unwilling to accept nomination or election, the proxies
solicited by the Board will be voted instead for such other person as the Board
of Directors may recommend.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ELECTION OF THE
ABOVE-MENTIONED NOMINEES AS DIRECTORS
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of June 1, 1998, with
respect to the beneficial ownership of the Company's outstanding Common Stock by
(i) each person or group who was on such date the beneficial owner of more than
five percent of the outstanding Common Stock, (ii) each Director of the Company,
(iii) each Named Executive Officer and (iv) all Directors and executive officers
of the Company as a group.
SHARES OWNED BENEFICIALLY
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENTAGE OF
NAME AND ADDRESS(1) OWNED(2)(3) SHARES BENEFICIALLY OWNED
------------------- ------------------- -------------------------
<S> <C> <C>
James C. and Dorothy J. Saxton(4)....................... 3,755,798 48.5%
Michele Saxton-Pori..................................... 531,611 6.9%
Lee-Ann Saxton(5)....................................... 531,378 6.9%
James C. Saxton II...................................... 530,000 6.8%
Douglas W. Hensley(5)(6)................................ 69,388 *
Marc S. Hechter(6)...................................... 18,337 *
Jeffrey A. Pori(6)...................................... 9,563 *
Timothy J. Adams(5)(6).................................. 5,000 *
Paul Eisenberg.......................................... -- --
Bernard J. Mikell, Jr................................... -- --
Robert L. Seale......................................... -- --
All Directors and executive officers as a group (12
persons)(7)........................................... 4,389,697 56.6%
</TABLE>
- ---------------
* Less than 1%.
(1) The address of each beneficial owner of more than five percent of the
outstanding Common Stock is 5440 West Sahara Avenue, Third Floor, Las Vegas,
Nevada 89102.
(2) Unless otherwise noted, sole voting and dispositive power are possessed with
respect to all shares of Common Stock shown.
(3) Includes shares allocated to the account of the following individuals and
for all directors and executive officers as a group under the Company's
Employee Stock Ownership Plan ("ESOP"): James C. Saxton -- 5,798 shares;
Michele Saxton-Pori -- 1,611 shares; Lee-Ann Saxton -- 1,378 shares; Douglas
W. Hensley -- 2,941 shares; Jeffrey A. Pori -- 1,496; and all directors and
executive officers as a group -- 11,846 shares. ESOP participants have sole
discretion as to voting of such allocated shares.
(4) Includes 1,885,798 shares beneficially owned by James C. Saxton and
1,870,000 shares beneficially owned by Mr. Saxton's wife, Dorothy J. Saxton.
Mr. and Mrs. Saxton may each be deemed to beneficially own the shares owned
by the other.
(5) Does not include 27,460 shares owned by the Company's ESOP Trust, which are
not currently allocated to the account of any ESOP participants. The voting
of such unallocated shares may be directed by Lee-Ann Saxton, Douglas W.
Hensley and Timothy J. Adams as members of the ESOP Administrative
Committee. Ms. Saxton and Messrs. Hensley and Adams each disclaim beneficial
ownership of all such shares.
(6) Includes shares which may be acquired upon exercise of options exercisable
within 60 days.
(7) Includes 1,870,000 shares owned by Dorothy J. Saxton, as to which James C.
Saxton may be deemed to beneficially own, and an aggregate of 97,851 shares
which may be acquired by Messrs. Hensley, Hechter, Pori and Adams upon the
exercise of options exercisable within 60 days. Excludes shares owned by
Lee-Ann Saxton and James C. Saxton II, who are not executive officers or
directors of the Company.
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<PAGE> 6
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information as of June 1, 1998 with
regard to (i) each director, including the eight nominees (all of whom currently
serve as directors), and (ii) each executive officer of the Company who is
neither a director nor a nominee.
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
---- --- -----------
<S> <C> <C>
James C. Saxton.............. 62 Chairman of the Board of Directors, Chief Executive
Officer
and President
Douglas W. Hensley........... 43 Executive Vice President, Chief Financial Officer and
Director
Michele Saxton-Pori.......... 30 Executive Vice President and Director
Timothy J. Adams............. 37 General Counsel and Director
Brian Moffitt................ 44 Vice President Construction Technologies
Jeffrey A. Pori.............. 32 Vice President of Marketing and Commercial Development
Michael Etter................ 52 Vice President of Construction
Bruce Barton................. 46 Vice President of Development
Marc S. Hechter.............. 46 Senior Vice President of Business Affairs and Director
Paul Eisenberg(1)(2)......... 72 Director
Bernard J. Mikell, 59 Director
Jr.(1)(2)..................
Robert L. Seale(1)(2)........ 56 Director
</TABLE>
- ---------------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
Messrs. Hensley, Hechter, Adams, Eisenberg, Mikell and Seale joined the
Board of Directors concurrently with the closing of the Company's initial public
offering in June 1997 (the "Offering").
James C. Saxton founded the Company in 1986 and has served as its Chairman,
Chief Executive Officer and President since its formation. For the two years
prior to the formation of the Company, Mr. Saxton concentrated on the
development in Las Vegas of privately owned construction projects financed
through private investments. From 1970 to May 1984, Mr. Saxton was employed by
Intel Corporation in various sales and management positions.
Douglas W. Hensley has served as Chief Financial Officer of the Company
since March 1990, as Executive Vice President of the Company since January 1994
and as a director since June 1997. Mr. Hensley joined the Company as Corporate
Controller in February 1990. Prior to joining the Company, Mr. Hensley was with
Henson, Stewart & Hensley, Certified Public Accountants, for six years, the last
three years as a partner.
Michele Saxton-Pori, Executive Vice President and Director, has served the
Company in various capacities with increasing levels of responsibility since
June 1990. The positions included: planning assistant, planning director,
marketing representative, financial analyst, Vice President of Development and
as a director since the Company's formation. Ms. Saxton-Pori is James Saxton's
daughter.
Timothy J. Adams has served as General Counsel of the Company since October
1996 and a director of the Company since June 1997. From July 1987 to September
1996, Mr. Adams was engaged in the private practice of law, most recently as a
partner of Adams & Tobler, Ltd. Mr. Adams has acted as counsel to the Company
since 1993.
Brian Moffitt has been the Senior Vice President of Design and Construction
Technologies of the Company since July 1997. He is a member of the American
Institute of Architects with over 16 years
4
<PAGE> 7
professional experience. He joined Saxton in March 1997 after having been a
principal and owner of Architronics and Moffitt Design Group from June 1987 to
January 1995. Mr. Moffitt is a former member of the City of Las Vegas Planning
Commission.
Jeffrey A. Pori has served as Vice President of Marketing and Sales of the
Company since April 1995. Mr. Pori also serves as President of the Company's
licensed real estate brokerage subsidiary. Mr. Pori joined the Company as
Leasing Manager in April 1991 and was promoted to Director of Marketing in
December 1992. Prior to joining the Company, Mr. Pori served as a sales
representative for Nevada Advertising from October 1990 to March 1991. Mr. Pori
is the son-in-law of James C. Saxton.
Michael Etter has served as Vice President of Construction and General
Manager of Walden, a division of Saxton, since February 1996. Mr. Etter joined
the Company as Director of Purchasing and Construction Services in October 1995.
From April 1991 to September 1995, Mr. Etter owned and operated Desert Sands
Masonry, a masonry subcontractor located in Orange County, California.
Bruce G. Barton joined the Company as Vice President of Development in
February 1998. Mr. Barton is a native of Las Vegas and has been involved with
the design, construction, development and brokerage of real property assets
since 1974. From March 1996 to January 1998, he worked for Carson Construction
to assist with construction management and project development. From October
1995 to February 1996, Mr. Barton owned and operated Commercial Development
Brokerage specializing in commercial real estate in Las Vegas. From July 1985 to
May 1995, he held positions as director and Vice President of Commercial
Development with American Nevada Corporation, one of Nevada's largest master
planned community developers.
Marc S. Hechter has served as Senior Vice President of Business Affairs
since January 1998 and director of the Company since June 1997, having served
since May 1995 as Senior Vice President of Finance. From July 1993 to May 1995,
Mr. Hechter served as a director of Jayne, Hechter and Company, Inc., a
consulting firm providing strategic planning and financial advice. In such
position, Mr. Hechter served as a financial consultant to the Company from March
1994 to May 1995. Mr. Hechter served as Assistant General Manager of
Administration for the Nevada State Industrial Insurance System from December
1991 to July 1993, and as Vice President of Wadhams and Associates, Inc. from
August 1990 to December 1991. Mr. Hechter was a past Administrator of the Nevada
Housing Division.
Paul Eisenberg has served as a director since June 1997 and is a retired
certified public accountant. Prior to his retirement in 1991, Mr. Eisenberg was
a partner in Eisenberg & Kimmell, Certified Public Accountants, for five years.
Bernard J. Mikell, Jr. has served as a director since June 1997 and has
been engaged in the private practice of law, legislative advocacy and financial
consulting since August 1995. From July 1994 to August 1995, Mr. Mikell served
as Senior Vice President, Public Finance for Sutro & Co. Incorporated. From
April 1991 to July 1994, Mr. Mikell was engaged in the private practice of law
and financial consulting. Other previous positions include Vice President,
Municipal Finance for Goldman, Sachs & Co., Vice President, Public Finance for
Dean Witter Reynolds Inc. and General Counsel of the California Housing Finance
Agency.
Robert L. Seale has served as a director since June 1997. Mr. Seale has
served as the elected Treasurer of the state of Nevada since January 1991. Prior
thereto, Mr. Seale was Managing Partner of Pangborn & Co., Ltd., Certified
Public Accountants, from 1983 to 1989. Mr. Seale is a past president of the
National Association of State Treasurers.
Each director holds office until the next annual meeting of Stockholders or
until his or her successor has been elected and qualified. Officers serve at the
pleasure of the Board of Directors.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has established an Audit Committee and a
Compensation Committee. The Audit Committee is responsible for reviewing the
audited financial statements of the Company and making recommendations to the
full Board on matters concerning the Company's audits and the selection of
5
<PAGE> 8
independent public accountants. The Compensation Committee is responsible for
establishing salaries, bonuses and other compensation for the Company's
executive officers and administering the Company's Management Stock Option
Incentive Plan. The Audit Committee is comprised of Bernard H. Mikell, Jr.
(Chairman), Paul Eisenberg and Robert L. Seale and held one meeting during
fiscal 1997. The Compensation Committee is comprised of Bernard H. Mikell, Jr.
(Chairman) and Robert L. Seale and held one meeting during fiscal 1997.
Directors who are not employees of the Company receive a fee of $625 per
Board meeting attended and are reimbursed for certain expenses incurred in
attending Board and committee meetings. No payments are made for participation
in telephonic meetings of the Board or actions taken in writing or participation
in Board committee meetings. Directors are eligible to participate in the
Company's Non-Employee Director Stock Option Plan. Directors who are employees
of the Company do not receive additional compensation for service as directors.
Each director attended at least 75% of the total number of meetings of the Board
and all committees thereof on which such director served held during the year
ended December 31, 1997.
The Company has no nominating committee or committee performing similar
functions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Bernard H. Mikell, Jr. and
Robert L. Seale. No member of such Compensation Committee is an executive
officer of the Company.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Pursuant to SEC rules, the Compensation Committee of the Board of Directors
has prepared the following report for inclusion in this Proxy Statement
addressing the Company's executive compensation policies for the fiscal year
ended December 31, 1997.
The Compensation Committee is composed of two outside directors. The
Compensation Committee is responsible for determining executive officer salary
and bonus compensation and determining annual contributions to the Company's
profit sharing plan. Stock option grants are determined by the Board of
Directors. The following is a report of the Compensation Committee and, as it
relates to stock options, the Board as a whole, concerning their policies and
actions during the year ended December 31, 1997 concerning executive
compensation.
The Company's compensation programs are designed to (a) link executive
compensation to the performance of the Company and to stockholder value as
measured by the long-term price appreciation of the Company's Common Stock and
(b) attract, retain and motivate employees by providing for the vesting of
certain components of compensation over a number of years.
The Company's compensation of executive officers, including its Chief
Executive Officer, currently consists principally of two components: (a) annual
cash compensation, generally consisting of base salary and a bonus, and (b)
long-term, stock-based compensation. Mr. James C. Saxton, who is founder of the
Company, and his daughter, Ms. Michele Pori-Saxton, typically do not receive
bonuses or stock-based compensation because it is currently deemed that their
significant equity position in the Company provides them with substantial
incentive to enhance stockholder value. The policies governing these components,
as well as the basis for determining the compensation payable to the Chief
Executive Officer, are described below.
Annual Salary and Bonus Compensation. The salaries of executive officers
are determined on the basis of, in no particular order of importance, the
responsibilities of the position held, the prior experience and compensation of
the officer, the compensation practices of competitors, as determined from
publicly available information, discussions with knowledgeable consultants and
participants in the real estate industry and other marketplace factors such as
housing and relocation requirements. The Compensation Committee also strives
6
<PAGE> 9
to compensate each executive officer at a level which is appropriate in relating
to the compensation of other executive officers of the Company. Bonuses may be
awarded, at the discretion of the Board of Directors, based upon the performance
of the Company and the officer during the fiscal year.
Long-Term Stock Option Compensation. The Company grants stock options to
its executive officers and other employees pursuant to its Management Stock
Option Incentive Plan. The Company believes that such options help to more
closely align the interests of its management employees with the long-term
interests of its stockholders by providing an incentive for increasing
stockholder value. Moreover, such options are believed to be instrumental in
retaining employees over the longer term, since full benefits of appreciated
options cannot be realized until the end of the applicable vesting period, which
is usually five years.
During the year ended December 31, 1997, stock options were granted to the
following executive officers: 15,000 shares each to Messrs. Hechter and Etter;
25,000 shares each to Messrs. Hensley, Adams and Pori; and 10,000 shares to Mr.
Moffitt.
CEO Compensation. The Company has entered into a three-year employment
agreement with James C. Saxton, the Company's President and Chief Executive
Officer, which terminates on March 10, 2000, subject to automatic one-year
renewals unless either the Company or Mr. Saxton gives 60 days prior notice to
the other of its desire not to renew. Pursuant to the terms of such agreement,
Mr. Saxton will be entitled to receive a base salary of $360,000 per year,
increasing each year by 3% or such other amount as is determined by the Board of
Directors in its discretion, and will receive supplemental life insurance and
long-term disability insurance at the Company's expense. Mr. Saxton will also be
eligible to receive an annual bonus at the discretion of the Board of Directors.
The agreement requires Mr. Saxton to devote his full-time attention and energies
to the Company's business and contains restrictive covenants pursuant to which
Mr. Saxton has agreed not to compete with the Company, within 90 miles of any
location in which the Company or any affiliate is doing business, for a period
of one year following termination of his employment if such termination is the
result of the Company's termination of Mr. Saxton "for cause" (as such term is
defined in the employment agreement), Mr. Saxton's election not to renew the
agreement at the end of any term thereof or if Mr. Saxton terminates the
agreement for other than "good reason" (as such term is defined in the
employment agreement). The agreement further provides that if Mr. Saxton is
terminated other than "for cause," Mr. Saxton will be entitled to receive any
unpaid compensation accrued through the last day of his employment together with
certain severance payments.
Internal Revenue Code Section 162(m). Internal Revenue Code Section 162(m),
enacted in 1993, provides that a public corporation generally may not deduct
compensation in excess of $1.0 million payable to its chief executive officer or
any of its other four most highly compensated officers. Certain
performance-based compensation is specially exempted. Since the Compensation
Committee currently does not anticipate that any executive officer of the
Company will receive compensation in excess of the deduction limitation in
fiscal 1998, it has not yet established a policy with respect to Section 162(m).
In future years, the Compensation Committee intends to take into account the
effect of Section 162(m) if the compensation payable to an executive officer
approaches $1.0 million. However, the provisions of Section 162(m) are not
expected to preclude the award of compensation believed to be merited, even if
in excess of $1.0 million.
The following tables reflect the decisions included in this report.
THE COMPENSATION COMMITTEE:
Paul Eisenberg
Bernard J. Mikell, Jr.
Robert L. Seale
7
<PAGE> 10
SUMMARY OF CASH AND OTHER COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for services rendered in all capacities to the Company
for the year ended December 31, 1997, of those persons who were, at December 31,
1997, (i) the Chief Executive Officer and (ii) each other executive officer of
the Company whose cash compensation exceeded $100,000 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------- LONG-TERM
OTHER COMPENSATION
FISCAL ANNUAL AWARDS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION PAYMENTS COMPENSATION
- --------------------------- ------ -------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
James C. Saxton, Chairman,
President and Chief
Executive Officer......... 1997 $341,800 $ -- $-- $-- $ 2,204(1)
Douglas W. Hensley,
Executive Vice President
and Chief Financial
Officer................... 1997 80,417 33,500 -- -- 2,204(1)
Jeffrey A. Pori, Vice
President of Marketing and
Commercial Development.... 1997 39,012 -- -- -- 128,005(2)
Timothy J. Adams, General
Counsel................... 1997 80,000 40,000 -- -- 2,204(1)
</TABLE>
- ---------------
(1) Represents medical premiums paid by the Company.
(2) Represents real estate commissions paid.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning grants of
stock options or stock appreciation rights ("SARs") during the year ended
December 31, 1997 for the Named Executive Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT
------------------------------------------------------ ASSUMED ANNUAL RATES
PERCENT OF OF
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION --------------------
GRANTED (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
------------ ------------ -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
James C. Saxton....... -- --% $ -- -- $ -- $ --
Douglas W. Hensley.... 25,000 11.1% 8.25 6/30/07 119,398 308,085
Jeffrey A. Pori....... 25,000 11.1% 8.25 6/30/07 119,398 308,085
Timothy J. Adams...... 25,000 11.1% 8.25 6/30/07 119,398 308,085
</TABLE>
8
<PAGE> 11
AGGREGATE OPTION EXERCISES IN FISCAL 1997 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning unexercised
stock options held by the Named Executive Officers as of December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED FISCAL YEAR-END FISCAL YEAR-END(1)
ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James C. Saxton...... -- $-- -- -- $ -- $ --
Douglas W. Hensley... -- -- 61,447 25,000 47,621 --
Jeffrey A. Pori...... -- -- 3,067 27,045 2,377 1,585
Timothy J. Adams..... -- -- -- 25,000 -- --
</TABLE>
- ---------------
(1) Amounts calculated by subtracting the exercise price of the options from the
value of the underlying Common Stock on December 31, 1997, which was the
closing market price on December 31, 1997 of $6.875 per share.
9
<PAGE> 12
PERFORMANCE GRAPH
The following graph presents a comparison of the Company's stock
performance with the broader base indices therein. The graph assumes $100
invested on June 24, 1997 in the Company's Common Stock and $100 invested at
that time in each of the indices shown. The comparison assumes that all
dividends, if any, are reinvested.
LOGO
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 (a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's Directors and executive officers, and persons who own
more than ten percent of the Company's outstanding shares of Common Stock to
file with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of the Common Stock. Such persons
are required by SEC regulations to furnish the Company with copies of all such
reports they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16 (a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners have been
satisfied.
FORM 10-K
The Company will furnish without charge to each stockholder, upon written
request addressed to the Company at 5440 West Sahara Avenue, Third Floor, Las
Vegas, Nevada 89102 Attention: Douglas W. Hensley, Executive Vice President and
Chief Financial Officer, a copy of its Annual Report on Form 10-K for the fiscal
year ended December 31, 1997 (excluding the exhibits thereto), as filed with the
Securities and Exchange Commission.
10
<PAGE> 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 1994, the Company distributed to certain stockholders (the
"Contributing Stockholders") $6.5 million of the Company's subordinated dividend
notes (the "Subordinated Dividend Notes") representing the Company's estimated
undistributed S corporation earnings as of December 31, 1994. The Subordinated
Dividend Notes were non-interest bearing, had 10-year terms and were
subordinated to all existing debt of the Company. In September 1996, the Company
distributed to the Contributing Stockholders approximately $1.6 million, which
represented the stockholders' estimated aggregate liability for federal income
taxes attributed to the Company's undistributed S corporation earnings through
September 30, 1995. Each Contributing Stockholder immediately thereafter loaned
the full amount of his or her distribution to the Company in exchange for
Subordinated Dividend Notes in the principal amount of the loan. The
distributions described above were made to the Contributing Stockholders on a
pro rata basis based on their ownership of Common Stock as follows: 70% to James
C. Saxton and his wife, Dorothy J. Saxton; 10% to Michele Saxton-Pori; 10% to
Lee-Ann Saxton; and 10% to James C. Saxton II. The Company was also indebted to
Mr. Saxton in the amount of $1.2 million at December 31, 1997 as later
described, related to demand loans made by Mr. Saxton to the Company due in
October and November 1998, with interest at an annual rate of 18%.
The Company received fees for construction, development and management of
properties owned by various partnerships which were combined with the Company in
connection with the Reorganization. The Company also sold land to such
partnerships. Because the consolidated financial statements of the Company
included in the Company's Form 10-K as of December 31, 1997, present the
financial operations of the Company and its subsidiaries on a consolidated
basis, all such transactions are treated as intercompany transactions and have
been eliminated.
In May 1997, James C. Saxton and Jeffrey A. Pori each sold to the Company
for $10 his respective 50% interest in RealNet Commercial Brokerage ("RealNet"),
a licensed real estate broker which provides real estate brokerage services to
the Company on a commission basis in connection with the sale and leasing of
Company properties. The aggregate amount earned by RealNet for such services was
approximately $55,000 in 1995 and approximately $252,000 in 1996 and $336,000 in
1997. Since its formation in 1995, Mr. Pori received an aggregate of $137,755
for services rendered to RealNet, $8,500 of which was paid in 1996 and $128,005
of which was paid in 1997. Messrs. Saxton and Pori each received $5,710 in
distributions from RealNet in 1996.
Pursuant to an agreement dated January 10, 1994, the Company agreed to
construct and sell an approximately 4,420 square-foot Turtle Stop convenience
store ("Turtle Stop") to L.'M.E.D.D., Inc., a privately-held corporation of
which Michele Saxton-Pori is a 25% stockholder ("L'MEDD"), for approximately
$1.3 million, subject to the Company's arranging permanent financing on behalf
of L'MEDD. Under the terms of the agreement, either the Company or L'MEDD had
the right to terminate the agreement if permanent financing was not obtained. To
date, financing has not been obtained, the sale has not been consummated and, on
June 18, 1997, the Company advised L'MEDD that it was terminating the agreement.
Pursuant to a lease dated December 1, 1994, the Company leased the property to
Operations Management Group ("OMG"), a corporation owned by the stockholders of
L'MEDD (including Ms. Saxton-Pori), on a triple net basis for a term of 20
years, with two five-year renewal options. Under the terms of the lease, OMG is
required to pay basic monthly rent of $13,244 during the initial lease year,
which amount is adjusted annually to reflect increases in the cost of living.
Management believes that the terms of the lease with OMG are comparable to the
terms which would have been negotiated with an unaffiliated third party. At
December 31, 1997, OMG was indebted to the Company in the aggregate amount of
approximately $349,200, of which $243,600 represented delinquent rent and
$105,800 represented amounts advanced by the Company to OMG for operating
capital. The Company had assisted in the operation of Turtle Stop by maintaining
the store books and records and providing a Company employee to train on-site
personnel for no compensation. In March 1998, the Company filed to evict OMG
from the premises after exhaustive efforts to collect the delinquent rent and
advances. The eviction was completed on April 30, 1998. The property is
currently vacant until a purchaser can be found.
11
<PAGE> 14
Marc S. Hechter, an executive officer and a director of the Company, was
previously employed by, and a 50% stockholder of, Jayne, Hechter and Company,
Inc., a consulting firm to which the Company made payments totaling
approximately $43,250 in 1995, exclusive of expense reimbursements, for services
rendered to the Company pursuant to a consulting agreement which was in effect
from January 1994 to May 1995. In December 1994, during the term of such
consulting agreement, the Company granted Mr. Hechter options to purchase an
aggregate of 25,562 shares of Common Stock, at an exercise price of $6.10 per
share. The options vest over a five-year period, subject to acceleration or
termination under certain circumstances.
Timothy J. Adams, an executive officer and a director of the Company, was
previously a partner of Adams & Tobler, Ltd., to which the Company made payments
totaling approximately $69,580, $170,940 and $45,650 in 1995, 1996 and 1997,
respectively. Prior to his affiliation with Adams & Tobler, Ltd., Mr. Adams was
sole proprietor of The Law Offices of Timothy J. Adams.
Paul Eisenberg, a director of the Company, loaned to the Company $500,000
in November 1994 for general corporate purposes. The loan was evidenced by a
secured promissory note bearing interest at 12% per annum. On March 31, 1997,
the principal amount owed to Mr. Eisenberg, including amounts borrowed prior to
1994, was approximately $868,000, which amount was paid in full with a portion
of the net proceeds of the Offering.
In the Reorganization, the Company acquired from Mr. Eisenberg for
approximately $800,000 his 14% interest in a limited partnership which owns
three contiguous operating properties and approximately 2.6 acres of vacant land
adjacent to such properties. Mr. Eisenberg's capital investment in the limited
partnership was $700,000, which investment was made in 1990. Mr. Eisenberg has
previously received distributions from the limited partnership in excess of his
capital investment. In addition, Mr. Eisenberg is a general partner of and owns
a 50% economic interest in an unconsolidated general partnership, with James C.
Saxton, that owns two small retail properties. Mr. Saxton has assigned his
economic interest to the Company.
From time to time, Mr. Saxton's sister, Dorothy Kidd, has advanced funds to
the Company for general corporate purposes. The aggregate amount borrowed from
Ms. Kidd during 1995, 1996 and 1997 was $0, $130,000 and $0, respectively. In
addition, the Company owed $30,000 to an affiliate of Ms. Kidd for services in
representing the Company before local governmental entities during 1995. The
amounts owed Ms. Kidd and her affiliate were evidenced by unsecured promissory
notes bearing interest at 12% per annum. At December 31, 1997, the aggregate
principal amount owed by the Company to Ms. Kidd and her affiliate was $0, due
to all amounts having been paid in full using a portion of the net proceeds of
the Offering.
During the year ended December 31, 1997, the Company's working capital
needs were augmented through a number of loans from affiliated parties, all of
which were approved by a majority of the disinterested members of the Company's
Board of Directors. The transactions were as follows:
On July 1, 1997, the Company entered into an unsecured note payable
with James Lanzilotti, a relative of the Company's President and principal
stockholder, in the amount of $466,231, bearing interest at 12% payable
monthly and a maturity date of July 1, 1998.
On August 1, 1997, the Company entered into an unsecured note payable
with Paul Eisenberg, a director of the Company, in the amount of $1.0
million bearing interest at 12% payable monthly and a maturity date of
August 1, 1998. This note is guaranteed by two of the principal
stockholders of the Company.
On August 27, 1997, the Company entered into an unsecured note payable
with James C. Saxton, the Company's President and principal stockholder, in
the amount of $721,000, bearing interest at 18% payable monthly and a
maturity date of November 27, 1998.
On September 30, 1997, the Company entered into a transaction with
James C. Saxton, the Company's President and principal stockholder, in
which the Company sold to Mr. Saxton its interest in a joint venture for
$755,000. The book value of the Company's interest was $500,000 and the net
gain of $255,000 is included in "Other income" on the Consolidated
Statements of Income. The sales price
12
<PAGE> 15
consisted of an offset to advances due to Mr. Saxton of $500,000 and a note
receivable of $255,000. The note receivable bears interest at 10.25% and
matures on September 30, 1998.
On October 6, 1997, the Company entered into an unsecured note payable
with James C. Saxton, the Company's President and principal stockholder, in
the amount of $420,000, bearing interest at 18%, payable monthly and a
maturity date of November 6, 1998.
On October 8, 1997, the Company entered into an unsecured note payable
with James C. Saxton, the Company's President and principal stockholder, in
the amount of $400,000, which has been paid down to a balance of $88,720,
bearing interest at 18%, payable monthly and a maturity date of November 8,
1998.
In the future, transactions with affiliates of the Company are anticipated
to be minimal due in part to the availability of borrowings under the Company's
$10.0 million revolving line of credit obtained in February 1998 from a
financial institution and the Company will continue to require approval by a
majority of the Board of Directors, including a majority of the disinterested
members of the Board of Directors and will be made on terms no less favorable to
the Company than could be obtained from unaffiliated third parties.
FUTURE STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the 1999 Annual
Meeting of Stockholders, currently anticipated to be held in May 1999, must be
submitted sufficiently far in advance so that it is received by Saxton not later
than January 4, 1999.
OTHER MATTERS
The Company's independent public accountants for the fiscal year ended
December 31, 1997 were KPMG Peat Marwick LLP, which firm has been appointed to
serve in such capacity for the current fiscal year. A representative of KPMG
Peat Marwick LLP is expected to be present at the meeting with the opportunity
to make a statement if he or she so desires and to respond to appropriate
questions.
Neither the Company nor any of the persons named as proxies knows of
matters other than those stated above to be voted on at the Annual Meeting.
However, if any other matters are properly presented at the meeting, the persons
named as proxies are empowered to vote in accordance with their discretion on
such matters.
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997 accompanies this Proxy Statement, but it is not to be deemed a part of
the proxy soliciting material.
PLEASE COMPLETE, SIGN AND RETURN
THE ENCLOSED PROXY PROMPTLY
SAXTON INCORPORATED
By order of the Board of Directors
--------------------------------------
James C. Saxton
Chairman of the Board and President
Las Vegas, Nevada
June 12, 1998
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<PAGE> 16
REVOCABLE PROXY
SAXTON INCORPORATED
ANNUAL MEETING OF STOCKHOLDERS -- JULY 2, 1998
The undersigned stockholder(s) of Saxton Incorporated (the "Company") hereby
nominates, constitutes and appoints James C. Saxton and Douglas W. Hensley, or
either of them, the attorney, agent and proxy of the undersigned, with full
power of substitution, to vote all stock of Saxton Incorporated which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company (the "Meeting") to be held in the Armadillo Meeting Room in Texas
Station Casino, located at 2101 Texas Star Lane, at 10:00 a.m., local time, and
any and all adjournments or postponements thereof, with respect to the matters
described in the accompanying Proxy Statement, and in their discretion, on such
other matters which properly come before the meeting, as fully and with the same
force and effect as the undersigned might or could do if personally present
thereat, as follows:
1. Election of Directors:
<TABLE>
<S> <C>
[ ]AUTHORITY GIVEN to vote for the nominees listed below [ ] WITHHOLD AUTHORITY to vote for the nominees.
(except as indicated to the contrary below).
</TABLE>
(INSTRUCTIONS: To withhold authority to vote for any nominee, strike a line
through such nominee's name below.)
<TABLE>
<S> <C> <C> <C>
James C. Saxton Douglas W. Hensley Timothy J. Adams Bernard H. Mikell, Jr.
Michele Saxton-Pori Marc S. Hechter Paul Eisenberg Robert L. Seale
</TABLE>
2. To transact such other business as may properly come before the Meeting and
any adjournments or postponements thereof. Management presently knows of no
other business to be presented by or on behalf of the Company or its Board of
Directors at the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
Please Sign and Date on Reverse Side.
<PAGE> 17
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" FOR THE
ELECTION OF DIRECTORS. THE PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED
"AUTHORITY GIVEN" FOR THE ELECTION OF DIRECTORS UNLESS OTHER INSTRUCTIONS ARE
INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH
INSTRUCTIONS.
IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED
IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
Dated:
------------------------
(Please print name)
------------------------
(Signature of
Stockholder)
------------------------
(Please print name)
------------------------
(Signature of
Stockholder)
(Please date this Proxy
and sign your name as it
appears on your stock
certificate(s).
Executors,
administrators,
trustees, etc., should
give their full titles.
All joint owners should
sign.)
I [We] do [ ] do not [ ]
expect to attend the
Meeting.
Number of Persons:
