NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Dover Investments Corporation
will be held at 235 Montgomery Street, Conference Room #740, Seventh Floor,
San Francisco, California, on Friday, April 26, 1996, at 9:00 A.M., for the
following purposes:
(1) To elect six directors (two of whom will be elected by holders
of the Class A Common Stock and four of whom will be elected by holders
of the Class B Common Stock), each to hold office until the next annual
meeting and until his successor has been elected and qualified;
(2) To ratify the appointment of Grant Thornton LLP as the
Company's independent public accountant for the year ended December 31,
1995; and
(3) 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 March 18,
1996 as the record date for the determination of stockholders entitled to
notice of and to vote at this meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
LAWRENCE WEISSBERG
Chairman of the Board of Directors,
President and Chief Executive Officer
San Francisco, California
March 25, 1996
IMPORTANT: To ensure your representation at the meeting please
date, sign and mail the enclosed Proxy card(s) promptly in the return envelope
which has been provided.
DOVER INVESTMENTS CORPORATION
Proxy Statement
for the
Annual Meeting of Stockholders of
DOVER INVESTMENTS CORPORATION
350 California Street, Suite 1650
San Francisco, California 94104
to be Held on April 26, 1996
The accompanying proxy is solicited on behalf of the Board of
Directors of Dover Investments Corporation (the "Company") for use at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held at 9:00 a.m.
on Friday, April 26, 1996, at 235 Montgomery Street, Conference Room #740,
Seventh Floor, San Francisco, California, or any adjournment thereof. Any
stockholder giving a proxy has the power to revoke it at any time prior to the
exercise thereof by filing with any Assistant Secretary of the Company a
written revocation, by attending the Annual Meeting and voting in person, or
by submitting a duly executed proxy bearing a later date. The expense of
soliciting proxies will be paid by the Company. The Company will request
brokers, custodians, nominees and other holders of record to forward copies of
soliciting material to persons for whom they hold shares of Company stock and to
request authority for the execution of proxies. In such cases, the Company
will reimburse holders for their reasonable charges or expenses. The
Company's principal executive office is located at 350 California Street,
Suite 1650, San Francisco, California 94104. This proxy statement and the
accompanying form(s) of proxy were mailed on or about March 25, 1996.
VOTING RIGHTS
The Board of Directors has fixed the close of business on March 18,
1996 as the record date for determination of stockholders entitled to notice
of and to vote at the Annual Meeting. The voting securities of the Company
outstanding at the close of business on that date were 646,878 shares of
Class A Common Stock and 321,018 shares of Class B Common Stock, each with a
$.01 par value. The Company's Restated Certificate of Incorporation provides
that, so long as the total number of shares of Class B Common Stock
outstanding on any record date for a meeting of stockholders at which
directors are to be elected equals or exceeds 12 1/2% of the total number of
outstanding shares of Common Stock of both classes on such date, the holders
of Class A Common Stock will vote as a separate class to elect 25% of the
Board of Directors (the "Class A Directors") and the holders of the Class B
Common Stock will vote as a separate class to elect the remaining 75% of the
Board of Directors (the "Class B Directors"). If 25% of the authorized number
of directors is not a whole number, then the holders of Class A Common Stock
are entitled to elect the next higher whole number of directors that is at
least 25% of the authorized number of directors. The total number of
outstanding shares of Class B Common Stock on March 18, 1996 constituted
33.17% of the total number of outstanding shares of Common Stock of both
classes. Accordingly, holders of record of Class A Common Stock will vote as
a separate class at the Annual Meeting with respect to the election of
directors and be entitled to elect two Class A Directors. Holders of record
of Class B Common Stock, voting as a separate class, will be entitled to
elect the four Class B Directors. Holders of the Class A Common Stock and of
the Class B Common Stock generally will vote together as a single class on
other matters submitted to a stockholders' vote, with the Class A Common Stock
entitled to one vote per share and the Class B Common Stock entitled to ten
votes per share.
The representation in person or by proxy of not less than a majority
of the shares entitled to vote at the meeting will constitute a quorum. Class
A Directors and Class B Directors will be elected by a plurality of the
respective votes cast by holders of Class A Common Stock and Class B Common
Stock. The affirmative vote of a majority of the shares represented at the
meeting is required for the approval and adoption of Proposal 2. Because
abstentions and "non-votes" are counted as present in determining whether the
quorum requirement is satisfied, abstentions and "non-votes" will have the
effect of a vote against a proposal. A "non-vote" occurs when a nominee
holding shares for a beneficial owner votes on one proposal but does not vote
on another proposal because the nominee does not have discretionary voting
power and has not received instructions from the beneficial owner.
A holder of Class A Common Stock or Class B Common Stock may be
entitled to cumulate votes and give one nominee a number of votes equal to the
number of directors to be elected by the Class A Common Stock or the Class B
Common Stock, as applicable, multiplied by the number of votes to which such
stockholder's shares are entitled, or distribute such stockholder's votes on
the same principle among as many nominees as the stockholder thinks fit. A
stockholder may cumulate votes for a nominee or nominees for Class A or Class
B Directors if such nominee or nominees' names have been placed in nomination
prior to the voting at the Annual Meeting and the stockholder has given notice
prior to the voting at the Annual Meeting of the stockholder's intention to
cumulate votes. If any one stockholder has given such notice, all
stockholders may cumulate their votes for nominees.
<TABLE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table shows as of March 18, 1996, (i) persons who are
known by the Company to be beneficial owners of more than 5% of the Company's
Class A or Class B Common Stock, and (ii) for each director and all directors
and officers as a group, the amount and nature of their beneficial ownership
and percentage of all outstanding Class A Common Stock and Class B Common
Stock owned by them:
<S> <C> <C> <C> <C> <C> <C>
Aggregate Voting
Class A Common Percentage of Class B Common Percentage of Power
Shares Outstanding Shares Outstanding Represented
Position with Beneficially Class A Common Beneficially Class B Common Shares Beneficially
Name and Address Company Owned Shares (1) Owned Shares Owned(2)
Lawrence Weissberg Chairman, 95,778(3) 14.81% 245,114 76.36% 66.03%
350 California Street President and
Suite 1650 Chief
San Francisco, CA Executive
94104 Officer
Arnold Addison Director 400(4) * 0 0 0
727 Industrial Parkway
Hayward, CA
94544
Larry Freels Director 4,750(5) * 0 0 0
655 Beach Street
Suite 400
San Francisco, CA
94109
John Gilbert Director 700(8) * 0 0 0
400 Montgomery Street
Suite 820
San Francisco, CA
94104
Michael Raddie Director and 2,350(6) * 0 0 0
400 Montgomery Street Chief
Suite 820 Financial
San Francisco, CA Officer (part-
94104 time)
Will C. Wood Director 9,550(7) 1.48% 0 0 1.48%
1550 El Camino Real
Suite 275
Menlo Park, CA
94025
Robert Naify N/A 54,407 8.41% 23,330 7.27% 7.46%
172 Golden Gate
Avenue
San Francisco, CA
94102
All current officers 113,528(9) 17.55% 245,114 76.36% 66.49%
and directors as a
group (6) persons
<FN>
* Less than one percent (1%) of the outstanding class of stock or aggregate
voting power of the Class A Common Stock and Class B Common Stock
combined.
(1) Based on a total of 646,878 currently outstanding shares and the
respective number of shares issuable upon exercise of options owned by
each individual exercisable within 60 days of March 18, 1996.
(2) For matters other than the election of directors only.
(3) Includes 7,257 shares of Class A Common Stock, of which 1,810 shares are
owned by Mr. Weissberg's wife, 4,660 shares are owned by the Weissberg
Foundation and 787 shares are held by a trust for the benefit of the
grandchildren of Mr. Weissberg of which Mr. Weissberg is trustee. Mr.
Weissberg disclaims beneficial ownership of the 1,810 shares owned by his
wife.
(4) Includes 400 shares issuable upon exercise of options exercisable within
60 days of March 18, 1996.
(5) Includes 550 shares issuable upon exercise of options exercisable within
60 days of March 18, 1996.
(6) 1,500 of such shares are owned by Raddie & Nouaux, a California general
partnership, of which Mr. Raddie is a general partner. The remaining 400
shares represent shares issuable upon exercise of options exercisable
within 60 days of March 18, 1996.
(7) Includes 450 shares issuable upon exercise of options exercisable within
60 days of March 18, 1996.
(8) Includes 200 shares issuable upon exercise of options exercisable within
60 days of March 18, 1996.
(9) Includes 2,850 shares issuable upon exercise of options exercisable within
60 days of March 18, 1996.
</TABLE>
PROPOSAL 1 -- ELECTION OF DIRECTORS
Company as Thrift Holding Company
The Company was the parent company of Homestead Savings, A
Federal Savings and Loan Association (hereafter referred to as the
"Association"), until August 1991, at which time the Company's voting interest
in the Association was reduced to 20.7% of the total shares eligible to vote
(the "Exchange"). The Association was placed in receivership by the Office of
Thrift Supervision on October 30, 1992, and the Resolution Trust Corporation
(the "RTC") was appointed receiver. Certain assets and liabilities of the
Association were transferred to a newly chartered federal savings association.
The Company has no interest in the new institution.
Following the shift in ownership in August 1991, all of the
executive officers and directors of the Company and the Association, except
Mr. Weissberg, resigned as executive officers and directors of the Company.
Mr. Weissberg presently is the only executive officer and the only director of
the Company who was formerly a director of the Association.
The Company has an agreement to indemnify its directors who
formerly served as directors and/or officers of the Association and its
subsidiaries. The RTC, in a letter dated March 10, 1993, advised the present
and former directors and officers of the Association and its subsidiaries of
potential claims that the RTC may assert against them for the recovery of
losses suffered by the Association and its subsidiaries in connection with
certain specified actions and loan transactions. No action has been taken by
the RTC on this matter for quite some time and the RTC went out of existence
on December 31, 1995. Counsel to the Company have advised the Company that in
light of these circumstances and the likelihood of the expiration of the
statute of limitation, they do not see any prospect of material liability to
the RTC. Consequently, the Company has not provided for any further
contingencies on these matters.
Nominees for Directors
Action is to be taken at the Annual Meeting with respect to the
election of a total of six directors, consisting of two Class A Directors and
four Class B Directors, to serve until the next annual meeting of stockholders
and until their successors are elected and qualified. Holders of the Class A
Common Stock will vote as a separate class for the election of the Class A
Directors and holders of the Class B Common Stock will vote as a separate
class for the election of the Class B Directors. Each proxy with respect to
the Class A Directors (the proxy card printed with black ink) may not be voted
for more than two nominees and each proxy with respect to the Class B
Directors (the proxy card printed with red ink) may not be voted for more than
four nominees. It is intended that the proxies solicited by and on behalf of
management will be voted for the election of the nominees listed in the
following table. In the event any of the nominees, for any reason, should
cease to be a candidate for a position as a director, the proxies will be
voted in accordance with the best judgment of the person or persons acting
under them and may be voted for another person nominated by management. The
Company knows of no current circumstances which would render any nominee
unable to accept nomination or election. Under the terms of the Company's
By-Laws, a vacancy may be filled by the Board of Directors.
The following table indicates as to each nominee the year when
he was first elected or appointed a director, his age and class of
directorship:
Director Class of
Name Since Age Directorship
Arnold Addison 1992 66 Class A
Michael Raddie 1991 65 Class A
Larry Freels 1993 58 Class B
John Gilbert 1993 56 Class B
Lawrence Weissberg 1968 75 Class B
Will C. Wood 1992 56 Class B
Mr. Weissberg may be deemed to be a control person of the
Company under the Securities Exchange Act of 1934.
Arnold Addison. Mr. Addison has been President of Addison
Financial Corporation, an auto leasing company, since October 1987. He has
also been the owner of Warm Springs Land Co., a real estate investment firm,
since January 1985.
Michael Raddie. Mr. Raddie has been President of The
Commonwealth Group, Inc., an investment banking firm, since March 1989. He
was designated Chief Financial Officer of the Company on a part-time,
consulting basis in December 1991. From July 1956 to January 1989, he was a
certified public accountant with KPMG Peat Marwick, having become a partner
of such firm in 1968. Mr. Raddie was a director of Continental Savings, a
savings and loan association, from April 1989 to July 1990.
Larry Freels. Mr. Freels has been a self-employed real estate
owner and investor since 1973.
John Gilbert. Mr. Gilbert has been a self-employed financial
consultant since 1989 and has seventeen years of experience as a general
contractor and home builder.
Lawrence Weissberg. Mr. Weissberg is presently the Chairman of
the Board of Directors, President and Chief Executive Officer of the Company.
He was the President and Chief Executive Officer of the Company and the
Association from 1960 to 1973 and from 1975 to 1989. In May 1989, Mr.
Weissberg stepped down as President of the Company and the Association,
although he continued to serve as Chairman of the Board of Directors and Chief
Executive Officer of the Company. In August 1991, Mr. Weissberg was
re-appointed President of the Company. Mr. Weissberg stepped down as Chief
Executive Officer of the Association in August 1989 and as Chairman of the
Board of Directors and as a director of the Association in January 1992.
Will C. Wood. Mr. Wood has been a principal of Kentwood
Associates, a financial advisory firm, since November 1993. He was an
international banking executive with Wells Fargo Bank, Crocker Bank and
Citibank from 1972 through 1989 and was managing Director of IDI Associates
from 1989 to 1993.
Certain Legal Matters
Mr. Freels is a general partner of Station West Investors, a
California limited partnership, which filed a petition under Chapter 11 of the
United States Bankruptcy Code in October 1992. He was also a general partner
of The Kingsdale Co., an Ohio general partnership, which filed a petition
under Chapter 11 of the United States Bankruptcy Code in October 1991 and has
since dissolved.
Committees and Meetings of the Board of Directors
In 1995, the Board of Directors of the Company held five regular
meetings. Each of the directors attended at least 75% of the meetings of the
Board of Directors held during the period for which he has been a director.
The Board of Directors of the Company established a Compensation
Committee in January 1995. The Compensation Committee of the Board of
Directors consists of Arnold Addison, Michael Raddie and Will C. Wood. The
Compensation Committee reviews and sets company policies in addition to
recommending to the Board the level of compensation of the President. The
Compensation Committee held two meetings during fiscal 1995.
Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission (the "SEC").
Based solely on the Company's review of the reporting forms
received by it, and written representations from certain persons that no Form
5 reports were required to be filed by those persons, the Company believes
that during the period from January 1, 1995 to December 31, 1995, inclusive,
all filing requirements applicable to officers, directors and greater than ten
percent stockholders were satisfied.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" EACH OF THE NOMINEES.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Compensation of Executive Officers
The cash compensation of the only executive officer of the
Company whose total cash compensation exceeded $100,000 in 1995 for services
in all capacities to the Company and its subsidiaries during 1993, 1994 and
1995 was as follows:
SUMMARY COMPENSATION TABLE
Name and Annual
Principal Compensation All Other
Position Year Salary($) Compensation ($)
Lawrence Weissberg 1995 150,000 5,460(1)
Chairman of the 1994 150,000 5,438(1)
Board of Directors, 1993 150,000 8,437(1)
President and Chief
Executive Officer
___________________________
(1) Consists of an automobile allowance.
Stock Option Plan
Under the Company's 1995 Stock Option Plan (the "Plan"), stock
options may be granted to certain officers and key employees. The Plan is
administered by the Compensation Committee. Options granted under the Plan
provide for the purchase of shares of the Company's Common Stock, at the fair
market value of the stock on the date the option is granted. In the case of a
stock option held by an optionee who, on the date of grant of such option,
owns more than 10% of the total combined voting power of all classes of stock
of the Company, the exercise price will be not less than 110% of the fair
market value of the stock. Options granted under the Plan will be exercisable
during a period fixed by the Compensation Committee, provided that no
nonqualified stock options will be exercisable before the expiration of six
months from the date of grant and no incentive stock option will be
exercisable before the expiration of one year from the date of grant. No
option will be exercisable after the expiration of ten years from the date of
grant. The Plan provides that no option is exercisable after the expiration
of five years from the date of grant in the case of an incentive stock option
held by an optionee who, on the date of grant, owns more than 10% of the total
combined voting power of all classes of stock of the Company.
Compensation of Directors
The Company pays each nonemployee director $500 for each meeting of
the Board of Directors of the Company attended. None of the Company's
directors, other than Mr. Weissberg, are employees of the Company. In
addition, the Company paid Mr. Raddie $18,000 in consulting fees in 1995.
Nonemployee directors receive stock options pursuant to the
Company's Stock Option Plan for Nonemployee Directors (the "Director Plan").
Under the Director Plan, each nonemployee director is automatically granted
options to purchase 500 shares of Common Stock on each anniversary date of his
or her appointment, until the plan terminates or the director ceases to be a
director. Options granted under the Director Plan become exercisable in
installments to the extent of one-half on the date one year after the date of
grant, and the remaining one-half on the date two years after the date of
grant. The exercise price for shares subject to options granted under the
Director Plan is the fair market value of the shares at the date of the option
grant.
CERTAIN TRANSACTIONS
The Company elected to wind up and dissolve its wholly-owned
subsidiary, Gramercy Mortgage Corporation ("Gramercy") and its wholly-owned
subsidiary, Homestead Insurance Services Inc. ("HISI"), effective December 31,
1994. All remaining assets have been distributed to the Company as the sole
shareholder. Operations for both entities were discontinued in 1992.
In November 1991, the Company entered into an agreement with Westco
Community Builders, Inc. ("Westco") owned in part by Britt Evans, the former
Chief Executive Officer of the Association, concerning the future development
of a parcel of land located in San Leandro, California called the Marina
Vista. This agreement calls for Westco to act as developer and general
contractor for the Marina Vista property and to receive various types of
consideration for such future services, including a management fee. The bulk
of such consideration is payable out of future development sales proceeds from
the property. The agreement requires the Company to pay Westco a management
fee of $50,000 per month from November 1991 until April 1993. At December 31,
1995, the Company had paid Westco management fees aggregating $1,812,879, of
which $900,000 will be deducted from amounts owed to Westco in the future out
of sales proceeds of completed homes at Marina Vista.
In 1994, the Company and Westco entered into a partnership and
formed the Glenbriar Joint Venture ("Glenbriar") to acquire and develop
property located in Tracy, California.
On January 1, 1996, the Company formed Glenbriar Venture #2, a
limited liability company ("LLC"), with Westco, its partner in the Glenbriar
Joint Venture. The LLC purchased from Westco options to purchase land
adjacent to the Glenbriar Joint Venture property.
The Company anticipates developing and selling lots in both the
Glenbriar Joint Venture property and the Glenbriar Venture #2 property.
The Company has entered into an agreement to sublease its office
space for $2,800 per month from a corporation that is wholly-owned by Mr.
Weissberg. The term of the sublease is April 1, 1993 through February 15,
1999.
PROPOSAL 2 -- RATIFICATION OF ACCOUNTANTS
On February 2, 1995, the Company engaged Grant Thornton LLP as
the Company's independent public accountant to audit its financial statements
for the years ended December 31, 1994 and 1995.
Representatives of Grant Thornton LLP are expected to be present
at the Annual Meeting, will have an opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate stockholder
questions.
Required Vote
A vote FOR Proposal 2 by the holders of a majority of the
outstanding shares of the Company's Class A Common Stock and Class B Common
Stock, present at the Annual Meeting in person or by proxy and voting together
as a single class with holders of the Class A Common Stock casting one vote
per share and holders of the Class B Common Stock casting ten votes per share,
is required to approve and adopt the proposal. Votes with respect to this
proposal will be cast as specified in the proxy. If no specification is made,
votes represented by proxy will be cast FOR the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" PROPOSAL 2.
STOCKHOLDER PROPOSALS
Any proposals of stockholders intended to be presented at the
1997 Annual Meeting must be received by the Company by November 25, 1996 in
order to be included in the Company's proxy materials relating to that
meeting.
OTHER MATTERS
Management knows of no business other than that mentioned above
to be transacted at the Annual Meeting, but if other matters are properly
raised before the Annual Meeting it is the intention of the persons named in
the enclosed proxy, in the absence of instructions to the contrary, to vote in
regard thereto in accordance with their judgment; discretionary authority to
do so is included in the proxy.
