SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
CALPROP CORPORATION
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
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<PAGE>
CALPROP CORPORATION
13160 Mindanao Way, #180
MARINA DEL REY, CALIFORNIA 9029
----------
NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDER
TO BE HELD ON MAY 25, 2000
----------
To the Shareholders of
Calprop Corporation:
The 2000 Annual Meeting of Shareholders of Calprop Corporation, a
California corporation (the "Company"), will be held on May 25, 2000 at 2:00
p.m., local time, at the Courtyard Marriot, 13480 Maxella Avenue, Marina Del
Rey, California, for the following purposes, all as more fully set forth in the
accompanying Proxy Statement:
1. To elect five directors of the Company to serve as such until the Next
Annual Meeting of Shareholders and until their successors are elected and
qualified; and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on April 4, 2000 as
the record date for determining shareholders entitled to notice of and to vote
at the meeting and any adjournments thereof.
By Order of the Board of Directors,
Mark F. Spiro
Vice President/Secretary/Treasurer
Dated: April 16, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
<PAGE>
CALPROP CORPORATION
13160 Mindanao Way, #180
Marina Del Rey, California 90292
----------
Proxy Statement for the 2000 Annual Meeting
of Shareholders to be Held on May 25, 2000
----------
GENERAL INFORMATION
This Proxy Statement is being mailed on or about April 16, 2000, to the
shareholders of Calprop Corporation, a California corporation (the "Company"),
in connection with the solicitation of proxies on behalf of the Board of
Directors of the Company (the "Board of Directors") to be used at the 2000
Annual Meeting of the Shareholders of the Company to be held on May 25, 2000
(the "Meeting") and any adjournment or adjournments thereof. Any proxy given may
be revoked at any time prior to the exercise of the powers conferred by it by
filing with the Secretary of the Company a written notice signed by the
shareholder revoking such proxy or a duly executed proxy bearing a later date.
In addition, the powers conferred by such proxy may be suspended if the person
executing the proxy is present at the meeting and elects to vote in person.
Shares represented by proxies that reflect abstentions or "broker non-votes"
(i.e. shares held by a broker or nominee which are represented at the Meeting,
but with respect to which such broker or nominee is not empowered to vote on a
particular proposal) will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum. All shares
represented by each properly executed and unrevoked proxy received in time for
the Meeting will be voted (unless otherwise indicated thereon) in the manner
specified therein at the Meeting and any adjournment or adjournments thereof.
The Company will pay the expenses of soliciting proxies, including the
charges and expenses of brokerage firms and others for forwarding solicitation
material to beneficial owners of shares. In addition to the use of the mails,
some of the Company's directors, officers and regular employees, without extra
compensation, may solicit proxies by telegram, telephone and personal interview.
The Annual Report of the Company for year ended December 31, 1999 is being
mailed to shareholders concurrently with the mailing of this Notice of Annual
Meeting and Proxy Statement.
VOTING RIGHTS
The close of business on April 4, 2000 (the "Record Date") has been fixed
by the Board of Directors as the record date for determining shareholders
entitled to notice of and to vote at the Meeting and any adjournment or
adjournments thereof. On the Record Date, there were outstanding 10,290,535
shares of the Company's Common Stock, no par value ("Common Stock"), all of one
class and all of which are entitled to be voted at the Meeting. Holders of such
issued and outstanding shares of Common Stock are entitled to vote their shares
on a cumulative basis as described in "Election of Directors" below.
A majority of the outstanding shares will constitute a quorum at the
Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions are counted in the tabulation of the votes cast on proposals
presented to shareholders, whereas broker non-votes are not counted for purposes
of determining whether a proposal has been approved.
1
<PAGE>
Victor Zaccaglin, Chairman of the Board and Chief Executive Officer of the
Company, beneficially owns approximately 45.0% of the outstanding shares of the
Company's Common Stock entitled to be voted at the Meeting and has advised the
Company that he intends to vote such shares for the nominees for director listed
below. Other officers, directors and affiliates of the Company beneficially own
in the aggregate approximately 43.6% of the outstanding shares of the Company's
Common Stock entitled to be voted at the Meeting, and it is anticipated that
such persons will vote for the nominees for director set forth below.
Accordingly, if all such shares are voted for the nominees for director set
forth below, no additional affirmative vote of the outstanding shares of the
Company's Common Stock will be required for the election of the nominees for
director specified below.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Beneficial Ownership of Principal Shareholders
The following table sets forth, as of March 15, 2000 (unless otherwise
indicated in the notes to the table), certain information concerning the
beneficial ownership of the Company's equity securities of each person known by
the Company to own beneficially five percent or more of the Company's Common
Stock, the Company's only outstanding class of securities presently entitled to
vote. A person is deemed to be the beneficial owner of securities, whether or
not he has any economic interest therein, if he directly or indirectly has (or
shares with others) voting or investment power with respect to the securities or
has the rights to acquire such beneficial ownership within sixty days. The
percentages set forth in the following table and in the table under the caption
"Beneficial Ownership of Management" as to each person's ownership of the
Company's Common Stock are based on the 10,290,535 shares of Common Stock
outstanding on March 15, 2000, plus any shares which may be acquired upon
exercise of stock options by such person which are exercisable on or within
sixty days after such date. Accordingly, the percentages are based upon
different denominators.
Number of Shares
Name and Address of of Common Stock Percent
Beneficial Owner Beneficially Owned(1) of Class
------------------- -------------------- -------
Victor and Hannah Zaccaglin(2).................. 4,731,214(3) 45.5%
13160 Mindanao Way, #180
Marina Del Rey, California 90292
John Curci(4)................................... 2,175,997(5) 21.1%
717 Lido Park Drive
Newport Beach, California 92663
John L. Curci(6)................................ 1,138,367(7) 11.0%
717 Lido Park Drive
Newport Beach, California 92663
Ronald S. Petch (8)............................. 602,108 (9) 5.7%
13160 Mindanao Way, #180
Marina Del Rey, CA 90292
2
<PAGE>
- ----------
(1) Information with respect to beneficial ownership is based on information
furnished to the Company by each shareholder included in the table or
included in filings with the Securities and Exchange Commission. Except as
indicated in the notes to the table, each shareholder included in the
table has sole voting and dispositive power with respect to the shares
shown to be beneficially owned by such shareholder. The table may not
reflect limitations on voting power and investment power arising under
community property and similar laws.
(2) Various members of Victor and Hannah Zaccaglin's family own Common Stock
of the Company. Although there is no agreement or understanding between
such parties as to the holding or voting of their respective shares of
Common Stock, it is anticipated that such persons (including John Curci,
John L. Curci and Ronald S. Petch) will vote for the slate of Directors as
listed below.
(3) This amount also includes 73,368 shares (1.6%) held in trust by Victor and
Hannah Zaccaglin for the benefit of their children and relatives. This
amount also includes 100,000 shares acquirable under options which were
exercisable by Mr. Zaccaglin on or within sixty (60) days after March 15,
2000.
(4) John Curci is Victor Zaccaglin's cousin.
(5) This amount also includes 1,000,000 shares (46.0%) held in trust by John
Curci for the benefit of his children.
(6) John L. Curci is the son of John Curci, the cousin of Victor Zaccaglin.
(7) This amount also includes 20,000 shares acquirable under options which
were exercisable by Mr. John L. Curci on or within sixty (60) days after
March 15, 2000.
(8) Ronald S. Petch is Victor Zaccaglin's nephew.
(9) This amount also includes 195,000 shares acquirable under options which
were exercisable by Mr. Ronald S. Petch on or within sixty (60) days after
March 15, 2000.
Beneficial Ownership of Management
The following table sets forth, as of March 15, 2000, certain information
concerning the beneficial ownership of the equity securities of the Company of
(i) each director and nominee for director of the Company, (ii) each executive
officer of the Company covered by the Summary Compensation Table below and (iii)
all directors and executive officers of the Company as a group.
Number of Shares
Name and Address of of Common Stock Percent
Beneficial Owner Beneficially Owned(1)(2) of Class
------------------- ------------------------ -------
Victor Zaccaglin(3)........................... 4,731,214 45.5%
Ronald S. Petch(4)............................ 602,109 5.7%
Mark F. Spiro................................. 380,000 3.6%
Richard Greene................................ 150,000 1.4%
Christopher Hoopes ........................... 25,000 0.2%
E. James Murar................................ -- --
Mark T. Duvall................................ 5,000 --
All Directors and Executive Officers as a
group (8 persons) ........................... 5,903,323 54.2%
- ----------
(1) See Note 1 to the preceding table.
(2) Includes the following numbers of shares of Common Stock acquirable under
options which were exercisable on or within sixty days after March 15,
2000: John L. Curci, 20,000; Ronald S. Petch, 195,000; Mark F. Spiro,
140,000; Richard Greene, 112,000; Christopher Hoopes, 20,000; all
Directors and Executive Officers as a group, 595,000.
(3) See Notes 2 and 3 to the preceding table.
(4) See Notes 8 and 9 to the preceding table.
3
<PAGE>
PROPOSAL No. 1
NOMINATION AND ELECTION OF DIRECTORS
The Board of Directors is comprised of five directors each of whom is
standing for election at the annual meeting. Each director elected at the
Meeting will hold office for a term expiring at the 2001 Annual Meeting of
Shareholders and until his successor is duly elected and qualified.
It is intended that the shares represented by the enclosed proxy will be
voted, unless otherwise instructed, for the election of the five nominees named
below. While the Company has no reason to believe that any of the nominees will
be unable to serve as a director, it is intended that if such an event should
occur, such shares will be voted for such substitute nominee or nominees as may
be selected by the Board of Directors. The candidates receiving a plurality of
the votes of the shares present and entitled to vote at the Meeting in person or
by proxy will be elected.
Pursuant to California law, the election of directors is by cumulative
voting. Each shareholder may cumulate such shareholder's votes and give one
nominee a number of votes equal to the number of directors to be elected (5)
multiplied by the number of shares held by the shareholder, or such shareholder
can distribute his votes among all of the nominees as the shareholder sees fit.
By giving your Proxy, you are authorizing the Proxyholders to vote your shares
for the nominees as they determine is appropriate.
Set forth below is certain information regarding the nominees for director
of the Company. Messrs. Petch, Zaccaglin, Murar, Duvall and Spiro are presently
serving as directors of the Company for terms expiring at the Meeting.
Nominees For Election As Directors
Principal Occupation Director
Name Age and Other Positions With the Company Since
------ ---- ----------------------------------- --------
Ronald S. Petch............ 55 President of the Company since 1974
November, 1993 and prior to that he
served as Executive Vice President,
Operations since February, 1992.
Victor Zaccaglin........... 79 Chairman of the Board and Chief 1961
Executive Officer of the Company
since 1961 and also President from
1961 to October, 1987 and from
March, 1992 to November, 1993.
Mark F. Spiro.............. 48 Chief Financial Officer of the 1998
Company since 1993 and formerly,
Chief Financial Officer of Inco
Homes from 1989 to 1993.
E. James Murar............. 59 Chairman and Chief Executive Officer 1999
of RecreActions Group of Companies
since 1971.
Mark T. Duvall............. 39 Portfolio Manager at Wells Fargo 1999
since 1994; Chief Financial Analyst
at Strategic Wealth Management 1992
to 1994; and Financial Analyst at
Simpson Investment Company 1987 to
1992.
4
<PAGE>
Board of Directors Meetings and Committees
The Board of Directors held a total of four regular meetings during
calendar year 1999. All directors except Mark Duvall attended no less than 75%
of the aggregate of (a) the total number of meetings of the Board of Directors
and (b) the total number of meetings of all committees of the Board on which he
served. Mr. Duvall attended two Board of Directors meetings.
The Company has an Audit Committee, the function of which is to assist the
Board of Directors in fulfilling its responsibilities with respect to corporate
accounting, auditing, and reporting practices. In performing such function, the
Audit Committee is responsible for selecting the firm of certified public
accountants to be retained as the Company's auditors and maintains a direct line
of communication with the Company's independent auditors. The Audit Committee
held two meetings during calendar year 1999. Its current members are Messrs.
Zaccaglin, Duvall and Murar (the Chairman of the Audit Committee). Mr. Duvall
was absent from both of the meetings of the Audit Committee.
The Company also has a Stock Option/Compensation Committee which
authorizes and reviews officers' compensation and the granting of stock options
and stock to key employees and directors of the Company. This committee held one
meeting during calendar year 1999. Its current members are Messrs. Duvall and
Murar (the Chairman of the Stock Option/Compensation Committee). Mr. Duval was
absent from this meeting of the Stock Option/Compensation Committee.
The Company has no Nominating Committee.
COMPENSATION AND IDENTIFICATION OF EXECUTIVE OFFICERS;
TRANSACTIONS WITH MANAGEMENT
Executive Compensation
The following table sets forth as to the Chief Executive Officer, the
President, the Chief Financial Officer, and the Vice President of the Company,
information concerning the annual and long-term compensation for services
rendered in all capacities to the Company during the fiscal year ended December
31, 1999, and the two preceding fiscal years. No other executive officer
received more than $100,000 in annual salary and bonus during calendar year
1999.
5
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation(1) Long-Term Compensation
---------------------- ------------------------
Restricted Securities
Stock Underlying All Other
Name and Position Year Salary Award(s)(7) Option(s) Compensation(8)
- ----------------- ----- --------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Victor Zaccaglin(2) 1999 $170,000 -- -- $ 887
Chairman of the Board and 1998 155,000 -- -- 887
Chief Executive Officer and Director 1997 155,000 $20,625 100,000 887
Ronald S. Petch(3) 1999 $165,000 -- 80,000 $1,416
Director, Chief Operating 1998 150,000 $48,750 80,000 1,319
Officer and President 1997 155,000 13,750 70,000 1,319
Mark F. Spiro(4) 1999 $145,000 -- 80,000 $ 554
Director and Chief Financial Officer 1998 120,000 $48,750 80,000 587
1997 110,000 6,875 60,000 587
Richard L. Greene(5) 1999 $112,000 -- 40,000 $ 879
Vice President of Northern California division 1998 103,000 $24,375 40,000 912
1997 98,088 3,438 30,000 912
Christopher Hoopes (6) 1999 $132,000 -- 20,000 $ 132
President of Colorado Pacific Homes, Inc. 1998 96,445 $ 8,125 20,000 132
1997 -- -- -- --
</TABLE>
- ----------
(1) Does not include certain amounts paid by the Company which may have value
to the recipient as personal benefits. Although such amounts cannot be
precisely determined, the Company has concluded that the aggregate amount
thereof does not exceed 10% of the cash compensation of Messrs. Zaccaglin,
Petch, Spiro, Greene or Hoopes.
(2) Mr. Zaccaglin, age 79, has been Chairman of the Board and Chief Executive
Officer of the Company since 1961. He was President from March, 1992 to
November, 1993 and prior to that from 1961 to October, 1987.
(3) Mr. Petch, age 55, has been President since November, 1993 and prior to
that was Vice President, Operations of the Company since February 1992.
Since 1974, he has been a director of the Company, and from March 1981
until February 1992, he was engaged in real estate investments,
development and marketing.
(4) Mark F. Spiro, age 48, has been employed by the Company since November
1993 as its Vice President of Finance, Secretary and Treasurer. From July
1989 until September 1993 he was employed as chief financial officer at
Inco Homes, a residential builder in Southern California.
(5) Richard L. Greene, age 52, is a Vice President of the Northern California
Division of the Company. He has been employed by the Company since July
1985, and prior to September 1991, was a Senior Project Manager for the
Company.
(6) Christopher Hoopes, age 48, has served as President of Colorado Pacific
Homes, Inc., a Colorado corporation since April 1998. He was employed by
Watt Industries as President of the Colorado division from July 1993 to
June 1996 and from June 1996 to March 1998 he was manager of Christopher
Homes, LLC.
(7) Based upon the closing market price of shares of the Company's Common
Stock on the date of the restricted stock award multiplied by the number
of shares awarded. Mr. Zaccaglin received the following awards of
restricted stock: 20,000 shares on October 31, 1991, valued at $25,000,
30,000 shares on October 6, 1993, valued at $22,500, 30,000 shares on
October 4, 1995, valued at $31,875 and 30,000 shares on October 8, 1997,
valued at $20,625. Mr. Petch has received 10,000 shares on February 2,
1992, valued at $30,000, 20,000 shares on October 6, 1993, valued at
$15,000, 20,000 shares
6
<PAGE>
on October 4, 1994, valued at $15,000, 20,000 shares on October 4, 1995,
valued at $21,250, 20,000 shares on October 8, 1997, valued at $13,750 and
30,000 shares on October 5, 1998, valued at $48,750. Mr. Spiro has
received 10,000 shares on November 1, 1993, valued at $8,125, 10,000
shares on October 4, 1994, valued at $7,500, 10,000 shares on October 4,
1995, valued at $10,625, 10,000 shares on October 8, 1997, valued at
$6,875 and 30,000 shares on October 5, 1998, valued at $48,750. Mr. Greene
has received 3,000 shares on October 31, 1991, valued at $7,500, 5,000
shares on October 6, 1993, valued at $3,750, 5,000 shares on October 4,
1994, valued at $7,500, 5,000 shares on October 4, 1995, valued at
$5,312.50, 5,000 shares on October 8, 1997, valued at $3,437.50 and 15,000
shares on October 5, 1998, valued at $24,375. Mr. Hoopes has received
5,000 shares on October 5, 1998, valued at $8,125. The number of
restricted shares held by Messrs. Zaccaglin, Petch, Spiro, Greene, and
Hoopes as of December 31, 1999 is 110,000, 120,000, 70,000, 38,000 and
5,000, respectively. The value of such restricted shares as of December
31, 1999 is $178,750, $195,000, $113,750, $61,750 and $8,125,
respectively. Twenty percent of each award vests on the anniversary date
of each grant, resulting in Messrs. Zaccaglin, Petch, Spiro, Greene and
Hoopes holding a total of 86,000, 80,000, 38,000, 22,000, and 1,000 vested
shares, respectively, as of December 31, 1999.
(8) Such other compensation represents the amount of insurance premiums paid
by the Company with respect to term life insurance for the benefit of
Messrs. Zaccaglin, Petch, Spiro, Greene and Hoopes.
In addition to Messrs. Zaccaglin, Petch, Spiro, Greene and Hoopes, the
Company currently has one other executive officer: Susan Soh, age 30, has been
employed by the Company since June 1997 as its controller. From January 1997 to
June 1997 she was employed as financial manager at DFS North American and from
September 1993 to December 1997 at Deloitte & Touche, LLP as an accountant. All
of the Company's executive officers serve at the pleasure of the Board of
Directors.
Option Grants in Last Fiscal Year
Shown below is information on grants of stock options pursuant to the 1993
Stock Option Plan during the fiscal year ended December 31, 1999 to Messrs.
Zaccaglin, Petch, Spiro, Greene and Hoopes, the executive officers of the
Company named in the foregoing Summary Compensation Table.
<TABLE>
<CAPTION>
Percentage of
Number of Shares Total Options
of Common Stock Granted to Exercise
Underlying Options Employees in Price Expiration
Name Granted(1) 1999 (per share) Date
- ----- ---------------- ------------ ---------- ---------
<S> <C> <C> <C> <C>
Victor Zaccaglin............................ -- 0.0% -- --
Ronald S. Petch............................. 80,000 30.73% $1.5625 12-22-09
Mark F. Spiro............................... 80,000 30.73% 1.5625 12-22-09
Richard L. Greene........................... 40,000 15.36% 1.5625 12-22-09
Christopher Hoopes.......................... 20,000 7.68% 1.5625 12-22-09
</TABLE>
- ----------
(1) Such options were all granted under the Company's 1993 Stock Option Plan.
The purchase price of shares covered by such stock options may not be less
than the fair market value of the Company's Common Stock at the date of
grant. The term of each such option and the increments in which it is
exercisable are determined by the committee which administers the 1983 and
1993 Plans, provided that no option may have a term of more than 10 years
from the date of grant and no option may be exercised by a holder prior to
one year of continued employment with, or service as a director for, the
Company.
7
<PAGE>
Fiscal Year End Option Values
Shown below is information with respect to the unexercised options to
purchase the Company's Common Stock granted under the 1993 Stock Option Plan and
in prior years under the 1983 Stock Option Plans to Messrs. Zaccaglin, Petch,
Spiro, Greene and Hoopes.
<TABLE>
<CAPTION>
Number of Shares of
Common Stock Underlying
Unexercised Value of Unexercised
Shares Acquired Options Held at In-the-Money Options at
upon Exercise December 31, 1999 December 31, 1999 (1)
--------------- ----------------- --------------------
Name Number Value Received Exercisable Unexercisable Exercisable Unexercisable
- ---- ------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Victor Zaccaglin 330,000 -- 100,000 -- $86,875 --
Ronald S. Petch 325,000 -- 195,000 90,000 65,625 $5,000
Mark F. Spiro 170,000 -- 140,000 80,000 56,250 5,000
Richard L. Greene 10,000 $8,125 112,000 40,000 53,750 2,500
Christopher Hoopes -- -- 20,000 20,000 -- 1,250
</TABLE>
- ----------
(1) Options are "In-the-Money" if the fair market value of the underlying
Common Stock at year-end exceeds the exercise price of the option.
Compensation of Directors
No director of the Company (including Messrs. Zaccaglin, Petch and Spiro)
receives compensation for serving as a director and no additional fees for
serving as a member of any committee of the Board of Directors. All directors of
the Company (except directors serving on the Stock Option Committee) are
eligible to receive stock options under the Company's 1983 Stock Option Plan and
under the 1993 Stock Option Plan. All non-employee directors then serving on the
Stock Option/Compensation Committee are eligible to receive stock options under
the Company's Director Stock Option Plan, described below.
Director Stock Option Plan
The Company maintains the Calprop Corporation Director Stock Option Plan
(the "Director Plan") which authorizes the granting of options to purchase a
maximum of 100,000 shares of the Company's Common Stock to non-employee
directors of the Company who are serving on the Company's Stock
Option/Compensation Committee. The Director Plan was adopted in order to permit
non-employee directors of the Company who serve on the Stock Option/Compensation
Committee administering the Company's employee stock option plans to continue to
be eligible to receive stock options without adversely affecting the
qualification of the employee plans under Rule 16b-3 under the Securities
Exchange Act of 1934, as amended.
The Director Plan provides for annual grants of options to purchase 7,500
shares of the Company's Common Stock on the date of the organizational meeting
of the Board of Directors of the Company (which is the first meeting of the
Board of Directors following the Company's Annual Meeting of Shareholders). The
purchase price of shares covered by an option granted under the Director Plan
shall be the fair market value (as defined in the Director Plan) of the
Company's Common Stock on the date of grant of the option. Generally, fair
market value is defined as the closing price for such stock on the OTC Bulletin
Board on the date of grant. Each option granted under the Director Plan becomes
exercisable in full on the first anniversary of the date on which it was
granted, provided that no such option may be exercised after the expiration of
ten years from the date of grant.
8
<PAGE>
Certain Transactions with Management and Others
The Company has the following notes payable to Curci-Turner Company
("Curci"), a related party, at December 31, 1999. Under the terms of certain of
the notes payable, Curci participates in "Net Proceeds" from certain projects,
as defined in the loan agreement, which is comparable to net profit:
December 31,
Project Profit share 1999
------- ------------ -----------
Summertree Park ........................ 40% $ 860,150
Antares ................................ 33% --
Montserrat ............................. 50% --
Parkland Farms ......................... 50% 2,999,888
High Ridge Court ....................... 50% 2,196,261
Saddlerock ............................. 50% 2,350,000
Mockingbird Canyon ..................... 50% 2,750,000
Montserrat Classics .................... 50% 3,450,000
-----------
14,606,299
-----------
Other:
Unsecured loans ........................ 1,604,250
-----------
$16,210,549
===========
During 1999, the Company purchased RGC's fifty percent ownership in
RGCCLPO. Consideration for the purchase consisted of issuance of a note payable
for $2,000,000 and payment of cash of $1,000,000. As of December 31, 1999, the
outstanding principal balance on this loan totaled $2,000,000.
During 1996, the Company converted its Preferred Stock to Common Stock and
the accrued Preferred Stock dividend due an officer of the Company and a related
party of $581,542 and $472,545, respectively, was exchanged for notes with
interest payable at 10%. As of December 31, 1999, the outstanding principal due
an officer of the Company and a related party on these notes was $581,542 and
$462,330, respectively.
As of December 31, 1999, the Company had loans, which provide for interest
at 10% and in which certain loans are due on demand from related parties. As of
December 31, 1999, these loans totaled $740,000.
Included in notes payable to related parties are notes payable to an
officer which bear interest at 12%. The outstanding balance as of December 31,
1999, was $2,865,611.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP served as the Company's auditors in calendar year
1999. The Audit Committee of the Board of Directors has selected Deloitte &
Touche LLP as the independent public accountants of the Company for calendar
year 2000 and considers Deloitte & Touche LLP to be well qualified. If Deloitte
& Touche LLP shall decline to act, or otherwise become incapable of acting, or
if its engagement is otherwise terminated by the Board of Directors or the Audit
Committee (none of which events are currently anticipated), in any such case,
the Audit Committee will appoint other auditors for 2000. A representative of
Deloitte & Touche LLP will be present at the Meeting where he or she will be
given an opportunity to make a statement if he or she so desires and will be
available to respond to questions raised during the Meeting.
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The Company's Audit Committee approves in advance all audit and non-audit
services to be performed by the Company's independent public accountants and
considers the possible effect on the independence of the accountants. No
relationship exists between the Company and Deloitte & Touche LLP other than the
usual relationship between independent public accountants and client.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and certain of its officers,
and persons who own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission"). Officers, directors and
greater than 10% shareholders are required by the Commission's regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely upon a review of the copies of the forms furnished to the Company and the
representations made by the reporting persons to the Company, the company
believes that during the calendar year ended December 31, 1999, its directors,
officers and 10% shareholders complied with all filing requirements under
Section 16(a) of the Exchange Act (the "Exchange Act").
SHAREHOLDER PROPOSALS
A shareholder proposal intended to be presented at the Company's next
annual shareholders meeting must be received by the Company at its principal
executive offices on or before January 3, 2001, for inclusion in the Company's
proxy statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors does not intend to present any other business at
the Meeting and knows of no other matters which will be presented at the
Meeting.
By order of the Board of Directors
Mark F. Spiro
Vice President/Secretary/Treasurer
Dated: April 16, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT
IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
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