SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 2, 1997
CONTINENTAL HOMES HOLDING CORP.
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(Exact name of registrant as specified in its charter)
Delaware 0-14830 86-0554624
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
7001 North Scottsdale Road, Suite 2050
Scottsdale, Arizona 85253
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code:(602) 483-0006
Not Applicable
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(Former name or former address, if changed since last report.)
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Item 6. Resignations of Registrant's Directors.
On October 6, 1997, Continental Homes Holding Corp. (the "Registrant)
announced the resignations of Donald R. Loback as Chief Executive Officer and
Chairman and William Steinberg and Peter D. O'Conner as directors. The
resignations were given at a Board meeting held on October 3, 1997. During a
Board meeting held on October 5, 1997, the Board of Directors elected
Bradley S. Andersen as Interim Chairman and W. Thomas Hickcox, President and
Chief Operating Officer, as Chief Executive Officer of the Registrant.
Item 7. Exhibits.
Number Description
1 Copy of letter of resignation of Donald R. Loback to the Board of
Directors of the Registrant.
2 Copy of letter of resignation of William Steinberg to the Board of
Directors of the Registrant.
3 Copy of letter of resignation of Peter D. O'Conner to the Board of
Directors of the Registrant.
4 Copy of Press Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 8, 1997 CONTINENTAL HOMES HOLDING CORP.
/S/ Julie E. Collins
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Julie E. Collins
Chief Financial Officer
Exhibit 1
Donald R. Loback
8635 N. 56th Street
Paradise Valley, AZ 85253
October 5, 1997
To: Board of Directors and Shareholders Continental Homes
Holding Corp.
It was with much regret that I felt forced to tender my resignation from my
positions as Chairman and CEO of Continental Homes Holding Corp. ("CHHC") last
Friday. CHHC is a company I co-founded more than twelve years ago and I have
served in my positions with great pride. But I recognize that as a result of the
Company's success, it is time for a new direction. And to enable the Company to
pursue that direction I realized I must resign.
We have worked hard together to achieve our goals. CHHC is recognized in
its markets as the premier homebuilder for first-time and move-up homebuyers.
All of our loyal employees have worked hard to make that happen. In that
process, we became a family with a culture that, I hope, made each person feel
how important he or she was to the success of the organization.
At the same time, we worked hard to create value for our shareholders.
Today the Company is more financially sound and liquid than at any other time in
its history and the marketplace has rewarded our achievements by pushing the
price of our stock to an all time high.
So, why have I resigned?
Because, while I feel a strong sense of responsibility to our homebuyers,
subcontractors and to all of our dedicated employees, CHHC is a public company
and, as such, my principal responsibility is to our shareholders. I believe that
we have a unique window of opportunity to maximize the value to our
shareholders, while at the same time not adversely affecting these other very
important constituencies.
I tried to convince the others in your senior management, and my fellow
directors, that we needed to move forward in a new direction. I understand that
change can be difficult and a hard direction for management to pursue.
<PAGE>
-2-
The investment banking firms we have consulted have both confirmed that the
market will not ascribe to CHHC the premium value attributed to other
homebuilders solely because of their greater market capitalizations. There are
limited opportunities for us to consolidate with others of similar size -- and,
of course, no assurance that this would result in market recognition comparable
to that ascribed to established large market capitalization companies. The
market has provided this small window of opportunity to pursue a transaction
that can recognize the value we have created over these years. I think it is
critical that any such opportunity be presented without delay to our
shareholders for their consideration.
We have built together a strong organization. A valuable franchise. A
consolidation transaction can build on that organization and that franchise. If
we believe in what we have built, as I do, we can also believe that such a
transaction will build on what we have created and not destroy it. In any event,
I think that it is important for CHHC to explore immediately alternatives
available to it because of its strong track record and current market
conditions, and to present to shareholders the opportunities to achieve
appropriate values for their holdings in the Company.
It is to pursue those opportunities, for myself and all the shareholders of
CHHC, that I felt compelled to resign my positions with the Company.
Sincerely,
/S/ Donald R. Loback
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Donald R. Loback
Exhibit 2
William Steinberg
49 Highland Circle
Wayland, MA 01776
October 5, 1997
Board of Directors
Continental Homes Holding Corp.
7001 North Scottsdale Road
Suite 2050
Scottsdale, AZ 85253
Attn: Timothy C. Westfall
Dear Sirs:
This letter shall serve to inform you that as of 7:00 PM Pacific time, on
Friday, October 3, 1997, I formally resigned my position as Director of
Continental Homes Holding Corp. ("Continental"). The two primary reasons for my
departure are:
1. The refusal by four of the eight Directors to give serious consideration
to a bonafide offer from a third party to acquire the outstanding shares of
Continental. This transaction was believed by Smith Barney to potentially
have substantial benefits to shareholders. We were further advised by
investment bankers on October 3, 1997 that a significant combination with
or sale to another major homebuilder could be extremely beneficial to
shareholders. It is my strong conviction that the failure by some Directors
to support a full and fair assessment of this business opportunity was not
in the best interest of Continental's shareholders.
2. The strategy of the firm going forward, as proposed by the new management
team at the Board meeting, is, I believe, in contrast to my own views and
those of prior management. I believe that my continued presence as a member
of the Board of Directors would serve only to create an environment of
conflict, which would potentially hinder more than it would assist in the
firm's ability to function under the new management team.
<PAGE>
-2-
I have thoroughly enjoyed my tenure as a Director at Continental and wish
everyone there the very best going forward.
Very truly yours,
/S/ William Steinberg
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William Steinberg
Exhibit 3
Peter D. O'Connor
7502 N. Eucalyptus Drive
Paradise Valley, AZ 85253
October 5, 1997
Board of Directors
Continental Homes Holding Corp.
7001 N. Scottsdale Road
Suite 2050
Attn: Timothy C. Westfall
Dear Sirs:
This letter shall serve to inform you that I formally resign my position as
a Director of Continental Homes Holding Corp. (Continental) as of 7:00 P.M.
October 3, 1997. The reason for my resignation is the refusal by four of the
eight directors to give an objective consideration to a third party offer to
acquire the outstanding shares of Continental. Such offer was at a substantial
premium to the current share price of Continental and the refusal to objectively
consider such offer is not in the best interest of the shareholders. I believe
my continued presence as a member of the Board of Directors would not be
beneficial for those remaining with the firm.
Very truly yours,
/S/ Peter D. O'Connor
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Peter D. O'Connor
Exhibit 4
Letterhead
For Immediate Release: Contact: Julie E. Collins, CFO
(602) 483-0006
SCOTTSDALE, Arizona (October 6, 1997) - Continental Homes Holding Corp. (NYSE:
CON) today announced that on October 3, 1997, during a Board meeting held to
discuss an offer from another homebuilding company, Donald R. Loback resigned as
a Director, Chairman and CEO of Continental Homes Holding Corp. In addition,
William Steinberg and Peter D. O'Connor also resigned from the Board. During the
Board meeting, these three directors expressed a strong preference for pursuing
this offer.
Following the resignations, the Board determined not to pursue the other
company's offer at the present time. The Board also determined to pursue all
strategic alternatives, including a sale of the Company, in order to maximize
shareholder value. Smith Barney has been retained to assist the Board in this
review.
Bradley S. Anderson, an outside Director, has been elected Interim Chairman and
W. Thomas Hickcox, President and Chief Operating Officer has been named Chief
Executive Officer of the Company. Mr. Anderson has been a director of the
Company since 1993. Mr. Hickcox has been employed by the Company since 1985 and
President and Chief Operating Officer since September 1995. Mr. Hickcox stated
that "these changes will in no way affect the strong performance of our
operations due to the depth and experience of our management team."
Continental Homes designs, constructs, sells and finances single-family homes in
Phoenix, Arizona; Austin, San Antonio and Dallas, Texas; Denver, Colorado; South
Florida and Southern California.
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