SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| 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 ss. 240.14a-11(c) or ss. 240.14a-12
Liberte Investors Inc.
- --------------------------------------------------------------------------------
(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):
|X| No fee required.
|_| $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14(A).
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------
5) Total fee paid:
--------------------------------------------------------------------------
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------
3) Filing party:
--------------------------------------------------------------------------
4) Date Filed:
--------------------------------------------------------------------------
<PAGE>
LIBERTE INVESTORS INC.
200 Crescent Court, Suite 1365
Dallas, Texas 75201
October 8, 1999
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Liberte Investors Inc. to be held on November 12, 1999 at 10:00 a.m., local
time, at the Crescent Club, 200 Crescent Court, 17th Floor, Dallas, Texas 75201.
Enclosed are a notice to stockholders, a Proxy Statement describing the business
to be transacted at the meeting and a form of proxy for use in voting at the
meeting.
At the annual meeting, you will be asked (i) to elect six directors of the
Company, (ii) to ratify the selection of KPMG LLP as the independent accountants
for the Company for the fiscal year ending June 30, 2000, and (iii) to act upon
such other business as may properly come before the meeting or any adjournment
thereof.
We hope that you will be able to attend the annual meeting, and we urge
you to read the enclosed Proxy Statement before you decide to vote. Even if you
do not plan to attend, please complete, sign, date and return the enclosed proxy
as promptly as possible. It is important that your shares be represented at the
meeting.
Very truly yours,
/s/ Gerald J. Ford
Gerald J. Ford
Chairman of the Board
and Chief Executive Officer
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
All stockholders are cordially invited to attend the Annual Meeting in person.
However, to ensure your representation at the meeting, you are urged to
complete, sign, date and return the enclosed proxy as promptly as possible in
the enclosed postage paid envelope. Returning your proxy will help the Company
assure that a quorum will be present at the meeting and avoid the additional
expense of duplicate proxy solicitations. Any stockholder attending the meeting
may vote in person even if he or she has returned the proxy.
- --------------------------------------------------------------------------------
<PAGE>
LIBERTE INVESTORS INC.
200 Crescent Court, Suite 1365
Dallas, Texas 75201
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 12, 1999
PLEASE TAKE NOTICE THAT the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") of Liberte Investors Inc., a Delaware corporation (the
"Company"), will be held on November 12, 1999 at 10:00 a.m., local time, at the
Crescent Club, 200 Crescent Court, 17th Floor, Dallas, Texas 75201, to consider
and vote on the following matters:
(1) Election of six Directors of the Company to serve until the next
Annual Meeting of the Company's stockholders and until their
respective successors are elected and qualified or until their
earlier death, resignation or removal from office;
(2) Ratification of the selection of KPMG LLP as independent accountants
of the Company for the fiscal year ending June 30, 2000; and
(3) Such other business that may properly come before the Annual Meeting
or any postponement or adjournment thereof.
The close of business on September 24, 1999 has been fixed as the record
date for the determination of stockholders entitled to receive notice of, and to
vote at, the Annual Meeting and any adjournment or postponement thereof. Only
holders of record of the Company's Common Stock at the close of business on the
record date are entitled to notice of, and to vote at, the Annual Meeting. A
list of stockholders entitled to vote at the Annual Meeting will be available
for inspection by any stockholder for any purpose germane to the Annual Meeting
during ordinary business hours for the ten days preceding the Annual Meeting at
the Company's offices at the address on this notice and at the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, please complete,
sign, date and return the enclosed proxy as promptly as possible. You may revoke
your proxy at any time before the shares to which it relates are voted at the
Annual Meeting.
By Order of the Board of Directors,
/s/ Nancy J. Foederer
Nancy J. Foederer
Secretary
Dallas, Texas
October 8, 1999
<PAGE>
Liberte Investors Inc.
200 Crescent Court, Suite 1365
Dallas, Texas 75201
(214) 871-5935
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
The Board of Directors of Liberte Investors Inc. requests your Proxy for
use at the Annual Meeting of Stockholders to be held on November 12, 1999 at
10:00 a.m., local time, at the Crescent Club, 200 Crescent Court, 17th Floor,
Dallas, Texas 75201, and at any adjournment or postponement thereof. By signing
and returning the enclosed Proxy, you authorize the persons named on the Proxy
to represent you and to vote your shares at the Annual Meeting. This Proxy
Statement and Proxy were first mailed to stockholders of the Company on or about
October 8, 1999.
If you attend the Annual Meeting, you may vote in person. If you are not
present at the Annual Meeting, your shares can be voted only if you have
returned a properly signed Proxy or are represented by another proxy. You may
revoke the enclosed Proxy at any time before it is exercised at the Annual
Meeting by (a) signing and submitting a later-dated proxy to the Secretary of
the Company, (b) delivering written notice of revocation of the Proxy to the
Secretary of the Company, or (c) voting in person at the Annual Meeting. In the
absence of such revocation, shares represented by the persons named on the
Proxies will be voted at the Annual Meeting.
VOTING AND QUORUM
The only outstanding voting securities of the Company are its shares of
common stock, par value $.01 per share ("Common Stock"). On September 24, 1999,
the record date for the Annual Meeting, there were 20,256,097 shares of Common
Stock outstanding and entitled to be voted at the Annual Meeting.
Each outstanding share of Common Stock is entitled to one vote. The
presence, in person or by proxy, of a majority of the shares of Common Stock
outstanding on the record date shall constitute a quorum at the Annual Meeting.
If a quorum is not present, the stockholders entitled to vote who are present or
represented by proxy at the Annual Meeting have the power to adjourn the Annual
Meeting from time to time without notice, other than an announcement at the
Annual
1
<PAGE>
Meeting, until a quorum is present. At any such adjourned meeting at which a
quorum is present, any business may be transacted that may have been transacted
at the Annual Meeting had a quorum originally been present; provided, that if
the adjournment is for more than 30 days or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
adjourned meeting. Proxies solicited by this Proxy Statement may be used to vote
in favor of any motion to adjourn the Annual Meeting. The persons named on the
Proxies intend to vote in favor of any motion to adjourn the Annual Meeting to a
subsequent day if, prior to the Annual Meeting, such persons have not received
sufficient Proxies to approve the proposals described in this Proxy Statement.
If such a motion is approved but sufficient Proxies are not received by the time
set for the resumption of the Annual Meeting, this process will be repeated
until sufficient Proxies to vote in favor of the proposals to be presented to
the stockholders at the Annual Meeting have been received or it appears that
sufficient Proxies will not be received. Abstentions and broker non-votes will
count in determining if a quorum is present at the Annual Meeting. A broker
non-vote occurs if a broker or other nominee does not have discretionary
authority and has not received voting instructions with respect to a particular
item.
PROPOSAL ONE - ELECTION OF DIRECTORS
The Board of Directors has designated Messrs. Gerald J. Ford, Gene H.
Bishop, Harvey B. Cash, Robert Ted Enloe, III, Gary Shultz and Edward W. Rose,
III as nominees for election as directors of the Company at the Annual Meeting
(each, a "Nominee"). If elected, each Nominee will serve until the expiration of
his term at the 2000 annual meeting of stockholders and until his successor is
elected and qualified or until his earlier death, resignation or removal from
office. For information about each Nominee, see "Director Nominees and Executive
Officers."
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed Proxy will be voted for the election of the Nominees. The Board of
Directors has no reason to believe that any of the Nominees will be unable or
unwilling to serve if elected. If a Nominee becomes unable or unwilling to
serve, your Proxy will be voted for the election of a substitute nominee
recommended by the current Board of Directors, or the number of the Company's
directors will be reduced.
The election of directors requires the affirmative vote of a plurality of
the shares of Common Stock present or represented by proxy and entitled to vote
at the Annual Meeting. Accordingly, under Delaware law and the Company's
Certificate of Incorporation and Bylaws, abstentions and broker non-votes will
not have any effect on the election of a particular director.
The Board of Directors recommends that the stockholders vote FOR the
election of each of these Nominees.
2
<PAGE>
PROPOSAL TWO-SELECTION OF INDEPENDENT ACCOUNTANTS
On August 17, 1999, the Board of Directors ratified the selection of KPMG
LLP ("KPMG") as the Company's independent accountants for the fiscal year ending
June 30, 2000. KPMG served as the Company's independent accountants for the
fiscal year ended June 30, 1999. The Company expects that representatives of
KPMG LLP will be present at the Annual Meeting to respond to appropriate
questions and will have an opportunity to make a statement if they desire to do
so.
Ratification of KPMG as the Company's independent accountants for the
fiscal year ending June 30, 2000 requires the affirmative vote of a majority of
the shares of Common Stock present, in person or by proxy, and entitled to vote
at the Annual Meeting. Under Delaware law and the Company's Certificate of
Incorporation and Bylaws, an abstention will have the same effect as a vote
against the ratification of KPMG, and each broker non-vote will reduce the
absolute number, but not the percentage, of affirmative votes necessary for
approval of the ratification. If the appointment of KPMG as the Company's
independent accountants is not ratified at the Annual Meeting, the Board of
Directors will consider the appointment of other independent accountants. The
Board of Directors may terminate the appointment of KPMG as independent
accountants without the approval of the Company's stockholders whenever the
Board of Directors deems termination necessary or appropriate.
The Board of Directors recommends that stockholders vote FOR the
ratification of the selection of KPMG LLP as the Company's independent
accountants for the fiscal year ending June 30, 2000.
3
<PAGE>
DIRECTOR NOMINEES AND EXECUTIVE OFFICERS
The following table provides information concerning director nominees and
executive officers of the Company:
Name Age Position
---- --- --------
Gerald J. Ford 55 Chief Executive Officer, Chairman of
the Board and Director
Gene H. Bishop 69 Director
Robert Ted Enloe, III 60 Director
Harvey B. Cash 60 Director
Gary Shultz 57 Director
Edward W. Rose, III 58 Director
The directors are elected for one year terms. Executive officers are
generally elected annually by the Board of Directors to serve, subject to the
discretion of the Board of Directors, until their successors are appointed. A
brief biography of each Director nominee and executive officer follows:
Gerald J. Ford has been the Chairman of the Board, Chief Executive
Officer, and a Director of Liberte Investors Inc. since August 1996. Mr. Ford
also serves on the Company's Compensation Committee. Mr. Ford has also been the
Chairman of the Board, Chief Executive Officer and a Director of Golden State
Bancorp Inc., a holding company whose only significant asset is its indirect
ownership of Golden State Holdings Inc., and Golden State Holdings Inc., a bank
holding company, since September 1998. Mr. Ford has been Chairman of the Board,
Chief Executive Officer and a Director of California Federal Bank, A Federal
Savings Bank since October 1994, and of California Federal Preferred Capital
Corporation since its formation in November 1996. Mr. Ford was Chairman of the
Board and a Director of First Madison Bank, FSB from 1993 to 1994. Mr. Ford
previously served as Chairman of the Board, Chief Executive Officer and a
Director of First Gibraltar Bank, FSB, from 1988 through 1993. Mr. Ford served
as the Chairman of the Board, Chief Executive Officer and a Director of First
United Bank Group, Inc., from 1993 through 1994. Mr. Ford is Chairman of the
Board and a Director of First Nationwide Mortgage Corporation. Mr. Ford is also
a Director of McMoRan Exploration Co. He serves as a Trustee of Southern
Methodist University (S.M.U.), Southwestern Medical Foundation, Children's
Medical Foundation and Dallas Citizen's Council; as Vice Chairman of the
Executive Board of Dedman College, S.M.U., and as a Director of Dallas Boys &
Girls Clubs, Inc. Mr. Ford received his B.A. degree from Southern Methodist
University in 1966 and his J.D. degree from S.M.U.'s School of Law in 1969. In
1995, he was named a Distinguished Alumni of S.M.U.
Gene H. Bishop has served as a Director of the Company since its formation
in April 1996. Mr. Bishop also serves on the Company's Compensation committee.
Mr. Bishop served as a trustee of the Company predecessor, Liberte Investors, a
Massachusetts business trust (the "Trust") from its formation in June 1969 until
it was terminated in connection with the formation of the Company.
4
<PAGE>
From November 1991 until his retirement in October 1994, Mr. Bishop served as
the Chairman and Chief Executive Officer of Life Partners Group, Inc., a life
insurance holding company. From October 1990 to November 1991, Mr. Bishop was
the Vice Chairman and Chief Financial Officer of Lomas Financial Corporation
("Lomas Financial"), a financial services company and the original sponsor of
the Trust. From March 1975 to July 1990, Mr. Bishop was Chairman and Chief
Executive Officer of MCorp ("MCorp"), a bank holding company. Mr. Bishop is a
Director of Drew Industries, Inc., a manufacturing conglomerate, and Southwest
Airlines Co., a passenger airline. Mr. Bishop has a B.B.A. in Business and
Finance from the University of Mississippi.
Robert Ted Enloe, III has served as a Director of the Company since its
formation in April 1996. Mr. Enloe served as a trustee of the Trust from 1975
until it was terminated in 1996. Mr. Enloe began serving as the Trust's
President in March 1975, and as its Chief Executive Officer in April 1992, and
resigned from those positions in August 1996. Since December 1996, Mr. Enloe has
been managing general partner of Balquita Partners, Ltd., a real estate and
securities investment partnership. From August 1996 to December 1996, Mr. Enloe
served as Vice Chairman and Chief Executive Officer of Homebuilders Capital
Corporation, a residential construction lending company. Mr. Enloe is a Director
of Compaq Computer Corporation, a manufacturer of personal computers and
servers, Leggett & Platt, Inc., a diversified manufacturer of foam, plastic,
steel and wire components for the automotive, home furnishings and office
equipment industries, SIXX Holdings, Incorporated, a restaurant company that
operates the Patrizio Italian restaurants in Dallas, Texas, and First Sierra
Financial, Inc., a commercial leasing firm. Mr. Enloe has a B.S. in Petroleum
Engineering from Louisiana Polytechnic University and a J.D. from Southern
Methodist University.
Harvey B. Cash has served as a Director of the Company since November
1996. Mr. Cash also serves on the Company's Audit committee. Mr. Cash has been a
general partner of InterWest Partners, a venture capital fund, since 1985. Mr.
Cash serves on the Boards of Directors of Panja, Inc., Air Span Corp., KD-1
Technologies, Silicon Laboratories, I(2) Technologies, Inc. and Ciena
Corporation. Mr. Cash was employed by InteCom Corporation, a telecommunications
company, as Vice President of Business Strategy from 1982 to 1983. He was a
co-founder of Mostek Semiconductor Corporation ("Mostek"), a company that
designed, manufactured and marketed semiconductors and was acquired by United
Technologies, which subsequently sold Mostek to SGS-Thomson Microelectronics,
Inc. ("SGS-Thomson"). Mr. Cash was a Director of Mostek and served as Executive
Vice President with various marketing and engineering responsibilities from 1969
to 1981. Mr. Cash was also employed by Texas Instruments as a marketing manager
from 1964 to 1969. Mr. Cash has a B.S. in Electrical Engineering from Texas A&M
University and an M.B.A. from Western Michigan University.
Gary Shultz has served as a Director of the Company since November 1996.
Mr. Shultz also serves on the Company's Audit committee. Mr. Shultz has served
as President, Chief Executive Officer and Director of Global Apparel, Inc., a
manufacturer and importer of apparel since April, 1986. Mr. Shultz has also
served as owner and Director of Kingtex, Inc., a company owning several Burger
King franchises, since January, 1994. Mr. Shultz was President, Chief Executive
Officer and Director of FWI, Inc. from 1980 to 1986 and President of Stockton
Manufacturing Company from
5
<PAGE>
1971 to 1980. Mr. Shultz was employed by Arthur Young and Company from 1964 to
1971 and served as an audit manager prior to leaving. Mr. Shultz has a B.B.A. in
Accounting from the University of North Texas.
Edward W. Rose, III has served as a Director of the Company since March
1997. Mr. Rose also serves on the Company's Compensation committee. Mr. Rose
served as a trustee of the Trust from April 1992 until August 1996. Since
February 1974 Mr. Rose has been the President and sole shareholder of Cardinal
Investment Company, Inc. Mr. Rose is the Chairman of Drew Industries, Inc., a
manufacturing conglomerate, and LBP Inc., formerly engaged in manufacturing home
improvement products, and a Director of ACE Cash Express, Inc., a check cashing
company. Mr. Rose is also a Director of the Osprey Holding, Inc. Mr. Rose has a
B.S. in Engineering Science from the University of Texas and an M.B.A. from
Harvard University.
MEETINGS AND COMMITTEES OF DIRECTORS
The Company's Board of Directors held four meetings during the Company's
fiscal year ended June 30, 1999. No Director attended fewer than 75% of such
meetings, with the exception of Robert Ted Enloe, III, who attended 50% of the
meetings.
The Board of Directors has two standing committees: the Audit Committee
and the Compensation Committee. The Board of Directors has no nominating
committee or other committee which performs similar functions. The Board of
Directors as a whole oversees the nominating function.
The Audit Committee reviews the results and scope of the annual audit and
other services provided by the Company's independent accountants. The Audit
Committee met once, on November 5, 1998, during the Company's fiscal year ended
June 30, 1999. The current members of the Audit Committee are Messrs. Cash and
Shultz. If elected to serve on the Board of Directors at the Annual Meeting,
Messrs. Cash and Shultz will continue to serve as the members of the Audit
Committee and Mr. Schultz will serve as Chairman of the Audit Committee for the
Company's fiscal year ending June 30, 2000.
The Compensation Committee reviews and approves the salaries and other
compensation that the Company pays its executive officers. The Compensation
Committee did not meet during the Company's fiscal year ended June 30, 1999. The
current members of the Compensation Committee are Messrs. Bishop, Rose and Ford.
If elected to serve on the Board of Directors at the Annual Meeting, Messrs.
Bishop, Rose and Ford will continue to serve as the members of the Compensation
Committee and Mr. Bishop will serve as Chairman of the Compensation Committee
for the Company's fiscal year ending June 30, 2000.
6
<PAGE>
MANAGEMENT COMPENSATION
Executive Officer Compensation
The following table sets forth certain information with respect to
compensation paid or accrued by the Company during the fiscal years ended June
30, 1999, 1998 and 1997, to the Company's Chief Executive Officer, Mr. Ford (the
"named executive officer"). Because no other executive officer of the Company
earned more than $100,000 during the last fiscal year, the table does not
include any other individuals.
Annual Compensation
- ---------------------------------------------------------
Name and Principal Position Year Salary ($)
- --------------------------- ---- ----------
Gerald J. Ford, ............. 1999 (1) --
Chairman and Chief 1998 (1) --
Executive Officer of the 1997 (1) --
Company
- -------------------
(1) Mr. Ford is one of two general partners of Hunter's Glen, and the sole
shareholder of Ford Diamond Corporation, a Texas corporation and the other
general partner of Hunter's Glen, which owns 8,002,439 shares of Common
Stock of the Company. Mr. Ford does not receive any compensation from the
Company that would be required to be reported pursuant to Item 402 of
Regulation S-K.
Trustee Retirement Plan
The Trust had a retirement plan for trustees who attained the age of 75
during their term of office or who attained the age of 65 during their term of
office and had served as trustee for at least 15 years. Pursuant to this
retirement plan, a retiring trustee would serve as a trustee emeritus for the
year immediately after his retirement and would receive compensation equal to
the other trustees for such service. For the four years immediately following
service as a trustee emeritus, the Trust would pay the retired trustee an annual
retirement benefit of $18,000. The Company assumed the obligations of the Trust
under this retirement plan. The Company had accrued as the sole liability under
this plan $72,000 in retirement benefits payable to Mr. Bishop upon his
retirement. In 1997, the board of the Company terminated this plan and set aside
$72,000 for the benefit of Mr. Bishop, with interest to accrue thereon at the
rate of 6% per annum until paid to Mr. Bishop. The Company has no other
obligations under such plan.
Director Compensation
The Company currently pays each director other than Mr. Ford a monthly
retainer of $900 and $500 for each meeting of the directors or any committee
thereof attended. In addition, the
7
<PAGE>
Company currently reimburses each director for his travel and related expenses
when attending meetings or otherwise performing services on behalf of the
Company.
8
<PAGE>
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The goals of the Company's compensation program have been to compensate
the Company's executive officers and employees in a manner which advances the
Company toward its overall business objectives, to foster teamwork and to enable
the Company to attract, retain and reward employees who contribute to the
Company's long-term success.
Historically, the Company was in the business of originating and
purchasing real estate mortgage loans. Since emerging from bankruptcy
proceedings in 1994, however, the Company's corporate objectives have related to
the management of its portfolio of foreclosed real property and existing
mortgage loans and the pursuit of new business opportunities that would utilize
the Company's net operating loss carryforwards and maximize shareholder value.
Compensation of executive officers during these periods of transition was
adjusted based upon the Compensation Committee's assessment of the Company's
operating performance and the Company's experience in meeting its new key
corporate objectives.
Mr. Ford did not receive any compensation from the Company during the
Company's most recent fiscal year for services rendered as a director or
executive officer, or in any other capacity.
Gene H. Bishop
Edward W. Rose III
Gerald J. Ford
9
<PAGE>
PERFORMANCE GRAPH
The Performance Graph shown below was prepared by the Company for use in
this Proxy Statement. Note that historic stock price performance is not
necessarily indicative of future stock performance. The graph was prepared based
upon the following assumptions.
1. On July 1, 1994, $100 was invested in the Trust's Beneficial Shares,
the Real Estate Investment Trust Industry Index compiled by Media
General Financial Services (the "Industry Index") and the New York
Stock Exchange Market Value Index. When this performance graph was
prepared, the Industry Index was composed of those companies
included in SIC Code 6798 (Real Estate Investment Trusts).
2. Dividends are reinvested on the ex-dividend dates.
Liberte Investors
Comparison of Cumulative Total Return
July 1, 1994 - June 30, 1999
[GRAPHIC OMITTED]
The chart above was plotted using the following data:
<TABLE>
<CAPTION>
July 1
------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Liberte Investors $100.00 $121.43 $207.14 $253.57 $216.03 $201.42
Industry Index $100.00 $106.68 $127.94 $169.77 $181.39 $166.39
New York Stock Exchange $100.00 $119.37 $149.34 $195.08 $248.59 $282.59
Market Value Index
</TABLE>
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of September 24, 1999, by
(i) each person known by the Company to be the beneficial owner of 5% or more of
the outstanding shares of Common Stock, (ii) the sole named executive officer,
(iii) each director of the Company, and (iv) all executive officers and
directors of the Company as a group. Except as indicated in the footnotes to the
table, the Company believes that the persons named in the table have sole voting
and investment power with respect to the shares of Common Stock indicated.
Shares Percentage
Beneficially Beneficially
Beneficial Owner Owned(1) Owned(1)
- ----------------------------------------------- ------------ ------------
Mr. Gerald J. Ford ............................ 8,002,439(2) 39.50%
Hunter's Glen/Ford, Ltd.
200 Crescent Court
Suite 1350
Dallas, Texas 75201
Edward W. Rose, III ........................... 972,114(3) 4.8%
Mr. Robert Ted Enloe III ...................... 306,500(4) 1.5%
Gene H. Bishop ................................ 224,200(5) 1.1%
Gary Shultz ................................... 5,000 *
Harvey B. Cash ................................ -0- N/A
- ------------------------------------------------------------------------------
All executive officers and directors as a group
(6 persons) ................................... 9,510,253 47.0%
* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or disposition power with respect to
securities.
(2) Hunter's Glen owns 8,002,439 shares of Common Stock. Because Mr. Ford is
one of two general partners of Hunter's Glen, and the sole shareholder of
Ford Diamond Corporation, a Texas corporation and the other general
partner of Hunter's Glen, Mr. Ford is considered the beneficial owner of
the shares of Common Stock that Hunter's Glen owns.
(3) Willowwood Partners, L.P. ("Willowwood') owns 952,114 shares. Because Mr.
Rose is the owner of Cardinal Portfolios Company, the general partner of
Willowwood, he is also considered the beneficial owner of the shares that
Willowwood owns. Willowwood and Mr. Rose share voting and investment power
over the 952,114 shares. Trusts established for the benefit of Mr. Rose
and his descendants own 20,000 shares of Common Stock. As the investment
trustee and beneficiary under such trusts, Mr. Rose is considered the
beneficial owner of the 20,000 shares of Common Stock that such trusts
own. Mr. Rose possesses sole voting and investment power over the 20,000
shares owned by such trusts.
11
<PAGE>
(4) Mr. Enloe holds 38,000 shares of Common Stock in a Keogh Plan. The Enloe
Descendants' Trust owns 266,500 shares of Common Stock. As the investment
trustee and a beneficiary under the Enloe Descendants' Trust, Mr. Enloe is
considered the beneficial owner of the 266,500 shares of Common Stock that
such trust owns. 2,000 shares shown above are held by Mr. Enloe's wife.
Mr. Enloe possesses sole voting and investment power over all shares shown
in the table above except that he shares investment power over the shares
owned by his wife and lacks voting power with respect to them.
(5) 200,000 shares of such Common Stock are held by Mr. Bishop directly. 8,500
shares are held by Mr. Bishop as trustee of the JHB 1994 Trust, a trust
created for the benefit of Mr. Bishop's son, 5,200 shares are held by Mr.
Bishop as custodian for Andrew Taylor Morris, Mr. Bishop's step-son, 5,200
shares are held by John Hulen Bishop, Mr. Bishop's son, and 5,300 shares
are held by Kathryne Martin Morris, Mr. Bishop's step-daughter.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Registration Rights
Hunter's Glen and the Company have entered into a Registration Rights
Agreement dated August 16, 1996 (the "Purchaser Registration Rights Agreement"),
pursuant to which Hunter's Glen and certain subsequent holders of the shares of
Common Stock (the "Hunter's Glen Shares") were granted certain registration
rights with respect to their shares until (i) such shares have been sold
pursuant to a resale registration statement filed with the Commission, (ii) such
shares have been sold under the safe-harbor provision of Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), or (iii) such shares
have been otherwise transferred and the Company has issued new stock
certificates representing such shares without a legend restricting further
transfer. The holders of not less than 20% of the Hunter's Glen Shares may
require the Company to file a shelf registration statement registering their
sale of such shares. The Company will be required to maintain the effectiveness
of such registration statement for two years. In addition, the holders of not
less than 20% of the Hunter's Glen Shares may make two demands upon the Company
to register their sale of such shares in underwritten offerings, provided that
the shares to be sold have a fair market value in excess of $5.0 million.
Finally, the holders of the Hunter's Glen Shares may require the Company to
register the sale of their shares if the Company proposes to file a registration
statement under the Securities Act for its account or the account of its
securityholders, other than a registration statement concerning a business
combination, an exchange of securities or an employee benefit plan. The holders
of these registration rights may exercise them at any time until the holders of
such shares own an aggregate of less than 5% of the outstanding shares of Common
Stock and are no longer affiliates of the Company under the United States
federal securities laws. The Company will bear all of the expenses of these
registrations, except any underwriters' commissions, discounts and fees, and the
fees and expenses of any legal counsel to the holders of the Hunter's Glen
Shares. Hunter's Glen owns 8,002,439 shares of Common Stock. Because Mr. Ford is
one of two general partners of Hunter's Glen, and the sole shareholder of Ford
Diamond Corporation, a Texas corporation and the other general partner of
Hunter's Glen, Mr. Ford is considered the beneficial owner of the shares of
Common Stock that Hunter's Glen owns.
Hunter's Glen, the Company and certain other persons have also entered
into an Agreement Clarifying Registration Rights dated August 16, 1996 (the
"Agreement Clarifying Registration
12
<PAGE>
Rights"). Under this agreement, the registration rights that the Trust had
previously extended to 400,000 Beneficial Shares owned by the Enloe Descendants'
Trust were extended to the shares of Common Stock that the Enloe Descendants'
Trust, Mr. Enloe and his wife. The Agreement Clarifying Registration Rights also
defined the relationship between these registration rights and the registration
rights extended under the Purchaser Registration Rights Agreement. The Agreement
Clarifying Registration Rights generally permits Hunter's Glen to require the
Company to register the sale of its shares in connection with any exercise of
demand registration rights by the Enloe Descendants' Trust, and permits the
Enloe Descendants' Trust, Mr. Enloe and his wife to require the Company to
register the sale of their shares in connection with any exercise of demand
registration rights by Hunter's Glen. In addition, this Agreement provides that
the Enloe Descendants' Trust, Mr. Enloe, his wife and Hunter's Glen will not
publicly sell their shares of Common Stock during the period beginning ten days
before the filing of a registration statement in connection with certain
underwritten offerings and ending ninety days after the effective date of such
registration statement. Finally, the Agreement Clarifying Registration Rights
provides that the registration rights with respect to the shares of Common Stock
held by the Enloe Descendants' Trust, Mr. Enloe and his wife will be
transferable to the subsequent holders of such shares.
DIRECTOR AND OFFICER INDEMNIFICATION
The Company has entered into indemnification agreements with each of its
directors and executive officers pursuant to which the Company has agreed to
indemnify the director or executive officer to the fullest extent permitted by
law, and to advance expenses, if the director or executive officer becomes a
party to, or witness or other participant in, any threatened, pending or
completed action, suit or proceeding (a "Claim") by reason of any occurrence
related to the fact that such person is or was a director, officer, agent or
fiduciary of the Company or a subsidiary of the Company, or another entity at
the Company's request (an "Indemnifiable Event"), unless a reviewing party
(either outside counsel or a committee of the Board of Directors) determines
that the person would not be entitled to indemnification under applicable law.
In addition, if a change in control or a potential change in control of the
Company occurs and if the person indemnified so requests, the Company will
establish a trust for the benefit of the indemnitee and fund the trust in an
amount sufficient to satisfy all expenses reasonably anticipated at the time of
the request to be incurred in connection with any Claim relating to an
Indemnifiable Event. The reviewing party will determine the amount to be
deposited in the trust. An indemnitee's rights under the indemnification
agreements are not exclusive of any other rights under the Company's Certificate
of Incorporation or Bylaws or applicable law.
13
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of its shares of Common Stock to file with the
Commission and the New York Stock Exchange initial reports of ownership of
shares of Common Stock and reports of changes in such ownership. The
Commission's rules require such persons to furnish the Company with copies of
all Section 16(a) reports that they file. Based solely upon a review of the
copies of such reports furnished to the Company by its directors, executive
officers and holders of more than 10% of its shares of Common Stock, and written
representations that no other reports were required with respect to the year
ended June 30, 1999, the Company believes that all persons required to comply
with Section 16(a) complied with all applicable Section 16(a) filing
requirements for such year on a timely basis.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee of the Company for the Company's fiscal year
ended June 30, 1999 consisted of Messrs. Bishop, Rose and Ford, none of which
was a salaried employee of the Company or any of its subsidiaries during such
year. Mr. Ford, however, has been an officer of the Company since August 1996.
The Compensation Committee reviewed and approved the salary and other
compensation that the Company paid to its executive officers.
ADDITIONAL INFORMATION
Solicitation
This solicitation of proxies is made by the Board of Directors and will be
conducted primarily by mail. Officers, directors and employees of the Company
may solicit proxies personally or by telephone, telegram or other forms of wire
or facsimile communication. The Company may also request banking institutions,
brokerage firms, custodians, nominees and fiduciaries to forward solicitation
material to the beneficial owners of Common Stock that those companies hold of
record. The costs of the solicitation, including reimbursement of such
forwarding expenses, will be paid by the Company.
14
<PAGE>
Stockholder Proposals
Any stockholder who wishes to submit a proposal for inclusion in the proxy
material and for presentation at the Company's 2000 Annual Meeting of
Stockholders must forward such proposal to the Secretary of the Company at 200
Crescent Court, Suite 1365, Dallas, Texas 75201 so that the Secretary receives
it no later than June 10, 2000.
Information to Stockholders
Any Stockholder, upon written request made to the Company's Secretary, at
200 Crescent Court, Suite 1350, Dallas, Texas 75201, shall be provided, without
charge, a copy of the Company's annual report on Form 10-K (including the
financial statements, financial statement schedules and a list briefly
describing all exhibits not contained therein) for the Company's fiscal year
ended June 30, 1999.
Annual Report
The Company's annual report to stockholders for the year ended June 30,
1999, including financial statements, is being mailed herewith to all
stockholders entitled to vote at the Annual Meeting. The annual report does not
constitute a part of the proxy solicitation material.
By Order of the Board of Directors,
/s/ Nancy J. Foederer
Nancy J. Foederer
Secretary
15
<PAGE>
LIBERTE INVESTORS INC.
THIS IS YOUR PROXY
Dear Stockholder:
Your Proxy is being solicited by the Board of Directors of Liberte Investors
Inc. for the Annual Meeting of Stockholders to be held on November 12, 1999, at
10:00 a.m. local time, at the Crescent Club, 200 Crescent Court, 17th Floor,
Dallas, Texas 75201.
Enclosed with this Proxy is a Proxy Statement containing important information
about the matters that you are being asked to approve.
Your vote is important. Whether or not you plan to attend the Annual Meeting,
you can be sure your shares are represented at the meeting by promptly returning
your completed Proxy card prior to the Annual Meeting.
Please mark the boxes on the Proxy card below to indicate how your shares are to
be voted, then sign the card, detach it and return your Proxy card in the
enclosed envelope.
Thank you in advance for your prompt consideration of these matters.
Detach Proxy Card Here
Please Detach Here
You Must Detach This Portion of the Proxy Card
Before Returning it in the Enclosed Envelope
- --------------------------------------------------------------------------------
------
------
1. ELECTION OF DIRECTORS FOR all nominees |_| WITHHOLD AUTHORITY to |_|
listed below vote for all nominees
listed below.
*EXCEPTIONS |_|
Nominees: Messrs. Gene H. Bishop, Harvey B. Cash, Robert Ted Enloe, III,
Gerald J. Ford, Edward W. Rose, III, and Gary Shultz
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space
provided below).
*Exceptions ______________________________________________________________
2. To ratify the election of KPMG LLP as independent accountants for the
Company for the fiscal year ending June 30, 2000.
FOR |_| AGAINST |_| ABSTAIN |_|
This Proxy, when properly executed, will be voted in the manner directed
herein and will authorize the Proxies to take action in their discretion
upon other matters that may properly come before the meeting. If no
direction is made, the Proxy will be voted in accordance with the
recommendations of the Board of Directors. Proxies are authorized to vote
upon matters incident to the conduct of the meeting, such as approval of
one or more adjournments of the meeting for the purposes of obtaining
additional stockholder votes.
Change of Address and
or Comments Mark Here |_|
Joint owners must each sign. Please
sign your name(s) EXACTLY as your
name(s) appear(s) on this card. When
signing as attorney, trustee, executor,
administrator, guardian or corporate
officer please give your FULL title.
(PLEASE SIGN, DATE, AND MAIL TODAY.)
DATE: ___________________________, 1999
_______________________________________
SIGNATURE OF STOCKHOLDER(S)
_______________________________________
SIGNATURE OF STOCKHOLDER(S)
Please Sign, Date and Return the Proxy
Promptly Using the Enclosed Envelope. Votes MUST be indicated
(x) in Black or Blue ink. |X|
<PAGE>
LIBERTE INVESTORS INC.
Proxy Solicited on Behalf of the Board of Directors of the Company
for the Annual Meeting, November 12, 1999
You are encouraged to specify your vote by marking the appropriate box ON THE
REVERSE SIDE but you need not mark any box if you wish to vote in accordance
with the Board of Directors' recommendations which are FOR the election of the
named nominees as directors and FOR Proposal 2. The Proxies cannot vote your
shares unless you sign and return this card. This Proxy may be revoked in
writing at any time prior to the voting thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- --------------------------------------------------------------------------------
LIBERTE INVESTORS INC.
P R O X Y
BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
AT 10:00 AM, FRIDAY, NOVEMBER 12, 1999
CRESCENT CLUB, 200 CRESCENT COURT 17TH FLOOR, DALLAS, TX 75201
The undersigned hereby constitutes and appoints each of Gerald J. Ford and
Nancy J. Foederer his or her true and lawful agents and proxies with full power
of substitution in each to represent the undersigned, with all the powers which
the undersigned would possess if personally present, and to vote the Common
Stock of Liberte Investors Inc. held of record by the undersigned on the record
date, at the Annual Meeting of Stockholders of Liberte Investors Inc., to be
held at the Crescent Club, 200 Crescent Court, 17th Floor, Dallas, TX 75201, on
November 12, 1999, at 10:00 a.m. local time, and at any adjournment or
postponement thereof, on all matters coming before said meeting.
ELECTION OF DIRECTORS: To elect each of Messrs. Gene H. Bishop, Harvey B.
Cash, Robert Ted Enloe, III, Gerald J. Ford, Edward W. Rose, III and Gary Shultz
to serve until the next Annual Meeting of Stockholders and until their
successors are duly elected and qualified or their earlier death, resignation or
removal from office.
The Board of Directors recommends a vote FOR the election of all nominees
for director and FOR Proposal 2.
(SEE REVERSE SIDE) LIBERTE INVESTORS INC.
P.O. BOX 11150
NEW YORK, N.Y. 10203-0150
