<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
LEGEND PROPERTIES
- -------------------------------------------------------------------------------
(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.
[ ] 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> 2
LEGEND PROPERTIES, INC.
1420 FIFTH AVENUE, SUITE 4200
SEATTLE, WASHINGTON 98101
(206) 464-0123
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------
To the Shareholders of Legend Properties, Inc.:
Notice is hereby given that the annual meeting of shareholders (the
"Meeting" or the "Annual Meeting") of Legend Properties, Inc., a Delaware
corporation (the "Company"), will be convened at the office of the Company, U.S.
Bank Centre, 1420 Fifth Avenue, 42nd Floor, Seattle, Washington on June 26,
1997, at 10:00 a.m. pacific time (the "Meeting Date"). All shareholders of the
Company (the "Shareholders") are entitled to attend the Meeting. The Annual
Meeting of Shareholders will be held for the following purposes:
(1) To elect five Directors to hold office until the next Annual Meeting of
Shareholders or otherwise as provided in the Company's Amended and
Restated Certificate of Incorporation (the "Certificate");
(2) To concur in the selection of KPMG Peat Marwick LLP as the Company's
principal independent accountants for the fiscal year ending December
31, 1997;
(3) To amend Article Fourth of the Company's Amended and Restated
Certificate of Incorporation to reduce the number of authorized shares
of capital stock to 15,000,000 shares, of which 5,000,000 shares shall
be preferred stock, $0.01 par value, and 10,000,000 shares shall be
common stock, $0.01 par value.
(4) To transact any other business as may properly come before the Meeting,
or any adjournment thereof.
Only Shareholders of record at the close of business on May 29, 1997 are
entitled to receive notice of and to vote at the Meeting or any adjournment
thereof (the "Eligible Holders"). A complete list of Eligible Holders will be
available for inspection at the Company's offices for at least ten days prior to
the Meeting.
A PROXY STATEMENT AND FORM OF PROXY ARE ENCLOSED. WHETHER OR NOT YOU EXPECT
TO ATTEND THE ANNUAL MEETING, IT IS IMPORTANT THAT YOU PROMPTLY FILL IN, SIGN,
DATE AND MAIL THE PROXY IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES MAY BE
VOTED FOR YOU.
By order of the Board of Directors:
Raymond J. Whitty
Secretary
The Company's 1996 Annual Report on Form 10-K is enclosed with this notice.
<PAGE> 3
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS OF
LEGEND PROPERTIES, INC.
, 1997
This proxy statement is furnished to the holders of shares ("the
Shareholders") of Common Stock, $0.01 par value (the "Common Stock" or the
"Shares"), of Legend Properties, Inc., a Delaware corporation (the "Company"),
in connection with the solicitation of proxies by the Company's board of
Directors (the "Directors" or the "Board") for use at the annual meeting of
Shareholders. The Company's annual meeting of Shareholders for the fiscal year
ended December 31, 1996 will be convened on June 26, 1997, at approximately
10:00 a.m. pacific time, and any adjournment thereof (the "Annual Meeting" or
the "Meeting"). Copies of this Proxy Statement, the attached notice, and the
enclosed form of proxy were first sent or given to Shareholders on or about
, 1997. Shareholders who wish to attend the Annual Meeting should
contact the Company at 206-464-0123 so that arrangements can be made.
The Company will bear all costs in connection with the solicitation of
proxies, including the cost of preparing, printing and mailing this Proxy
Statement. In addition to the use of the mails, proxies may be solicited by the
Directors, the Company's officers or employees. None of these individuals will
be compensated for proxy solicitation services, but they may be reimbursed for
out-of-pocket expenses in connection with the solicitation. Arrangements will
also be made with brokerage houses, banks and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial
owners of the Shares held of record by those persons, and the Company may
reimburse these custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses incurred in connection therewith.
Shares represented by properly executed proxies in the accompanying form
received by the Board prior to the Annual Meeting will be voted at the Annual
Meeting. Shares not represented by properly executed proxies will not be voted.
If a Shareholder specifies a choice with respect to any matter to be acted upon,
the Shares represented by that proxy will be voted as specified. If the
Shareholders does not specify a choice, in an otherwise properly executed proxy,
with respect to any proposal referred to therein, the Shares represented by that
proxy will be voted with respect to that proposal in accordance with the
recommendations of the Board described herein and in accordance with the
judgment of the persons acting under proxies on other matters presented for a
vote. A Shareholder who signs and returns a proxy in the accompanying form may
revoke it by: (i) giving written notice of revocation to the Company before the
proxy is voted at the Annual Meeting; (ii) executing and delivering a
later-dated proxy; or (iii) attending the Annual Meeting and voting the Shares
in person.
The close of business on May 29, 1997 has been fixed as the date for
determining those Shareholders entitled to notice of and to vote at the Annual
Meeting (the "Record Date"). On the Record Date, the Company had
Shares outstanding, each of which entitles the holder thereof to one vote at the
Annual Meeting. Only Shareholders of record as of the Record Date will be
entitled to vote at the Annual Meeting. The presence of a majority of the
outstanding shares of Common Stock, represented in person or by proxy at the
Annual Meeting, will constitute a quorum. Accordingly, abstentions and broker
non-votes will not affect the outcome of the election of directors. The
affirmative vote of a majority of the shares present or represented at the
meeting and entitled to vote will be required to approve proposal number two. An
abstention will have the same effect as a negative vote but, because Shares held
by brokers will not be considered entitled to vote on matters as to which the
brokers withhold authority, a broker non-vote will have no effect on the vote.
The affirmative vote of a majority of the Company's outstanding Shares is
required to approve proposal number three. Accordingly, abstentions and broker
non-votes will have the same effect as a negative vote.
The mailing address of the principal executive offices of the Company is
1420 Fifth Avenue, Suite 4200, Seattle, Washington 98101.
1
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following entity is the only entity or individual known to the Company
to be the beneficial owner of more than five percent (5%) of the outstanding
shares as of May 9, 1997:
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
-------------- ------------------------------------ ---------- ----------
<S> <C> <C> <C>
Common Stock, $0.01 par value............. RGI Holdings, Inc., 1420 Fifth 4,990,447 79%
Avenue, Suite 4200, Seattle,
Washington 98101(1)
</TABLE>
- -------------------------
(1) Mr. Uptain, the Company's President and a Director, and Mr. Storetvedt, a
nominee for Director, own 361,744 and 19,036 shares, respectively, of the
outstanding common stock of Aker RGI ASA which is the parent company of RGI
Holdings, Inc.
The following table sets forth the number of Shares owned by all Directors
and Officers owning Shares, and all Directors and Officers as a group as of May
9, 1997.
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP PERCENT OF INTEREST
------------------------ -------------------- -------------------
<S> <C> <C>
Walter E. Auch, Sr. ....................................... 640 shares Less than 1%
Robert M. Ungerleider...................................... 1,560 shares Less than 1%
All Directors and Officers of the Company, as a group
(seven persons).......................................... 2,200 shares Less than 1%
</TABLE>
The Company is not aware of any arrangements, the operation of which may at
a subsequent date result in a change of control of the Company.
Section 16(a) of the Securities Exchange Act of 1934, as amended, 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 initial
statements of beneficial ownership (Form 3), and statements of changes in
beneficial ownership (Forms 4 or 5), of Common Stock and other equity securities
of the Company with the Securities and Exchange Commission (the "SEC") and the
National Association of Securities Dealers, Inc. (the "NASD"). The SEC requires
officers, directors and greater than ten percent shareholders to furnish the
Company with copies of all these forms filed with the SEC or the NASD.
To the Company's knowledge, based solely on its review of the copies of
these forms received by it, or written representation from certain reporting
persons that no additional forms were required for those persons, the Company
believes that all filing requirements applicable to its officers, Directors, and
greater than ten percent beneficial owners were complied with during 1996.
2
<PAGE> 5
MATTERS TO BE CONSIDERED BY SHAREHOLDERS
1. ELECTION OF DIRECTORS
Five individuals will be elected at the Annual Meeting to serve as
Directors of the Company until the next annual meeting of Shareholders or
otherwise as provided in the Certificate. Unless instructions to the contrary
are given, the persons named as proxy voters in the accompanying proxy, or their
substitutes, will vote for the following nominees for Directors with respect to
all proxies received by the Company. If any nominee should become unavailable
for any reason, the votes will be cast for a substitute nominee designated by
the Board. The Directors have no reason to believe that the nominees named will
be unable to serve if elected.
The nominees for Director are as follows:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS SINCE
---- --- ------------------------------------------- --------
<S> <C> <C> <C>
Walter E. Auch, Sr. ........... 75 Mr. Auch was the chairman and chief executive officer 1986
of the Chicago Board Options Exchange from 1979 to
1986. Prior to that time, he was executive vice
president, director and a member of the executive
committee of Paine Webber. Mr. Auch is a director of
Pimco L.P., Geotek Industries, Smith Barney Concert
Series Funds, Smith Barney Trak Fund, Nicholas
Applegate Funds and Fort Dearborn Fund, and a trustee
of Hillsdale College and the Arizona Heart Institute.
Mr. Auch has been a director of the Company since
1988. Mr. Auch is a trustee of Banyan Strategic
Realty Company and a director of Banyan Strategic
Land Fund II and BMC.
Robert M. Ungerleider.......... 55 Mr. Ungerleider is presently the President of Pilot 1988
Books, a book publisher located in Greenport, New
York, and practices law with and is of counsel to the
firm of Felcher, Fox & Litner P.C., in New York, New
York. He has founded, developed and sold a number of
start-up ventures including Verifone Finance, an
equipment leasing business, SmartPage, a paging
service company and Financial Risk Underwriting
Agency, Inc., an insurance agency specializing in
financial guarantee transactions. Prior to these
endeavors, Mr. Ungerleider practiced real estate and
corporate law. Mr. Ungerleider received his B.A.
Degree from Colgate University and his Law Degree
from Columbia University Law School. Mr. Ungerleider
has been a director of the Company since 1988. Mr.
Ungerleider is also a director of Banyan Strategic
Land Fund II.
Fred E. Welker, III............ 49 Mr. Welker has been the President of Realty Financial 1996
Advisors, Inc., a real estate investment banking
firm, since January 1993. From 1982 to 1992, Mr.
Welker was the Executive Vice President for the
Southeast Regional Office of Sonnenblick-Goldman
Company, a real estate investment banking firm. From
1981 to 1982, Mr. Welker was Vice President-Joint
Ventures for American Savings & Loan Association, and
from 1976 to 1981 he was a commercial loan officer
with First Federal of Broward (merged with Glendale
Federal).
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS SINCE
---- --- ------------------------------------------- --------
<S> <C> <C> <C>
Kenneth L. Uptain.............. 43 Mr. Uptain has been the President and Director of the 1996
Company since December 31, 1996. Prior to that from
August 1994 until December 1996, Mr. Uptain served as
President and Director of RGI US Holdings, inc.
(which was merged with and into the Company) and
since August 1994 has served as President and
Director of RGI/US, RGI Holdings and RGI Real Estate.
Since 1988, Mr. Uptain has served as President and a
Director of Resource Group, Inc., a real estate
development company affiliated with RGI Inc.
Jan Petter..................... 42 Mr. Storetvedt has not previously served in any
capacity with Storetvedt the Company. Mr. Storetvedt
has been the Senior Vice President, Investment Real
Estate in Aker RGI ASA since March 1997. In addition,
since December 1991 he has been President, Chief
Executive Officer and a Director in Avantor ASA, a
Norwegian publicly traded, real estate company, 15%
of which is owned Aker RGI ASA. Since March 1997, he
has served as chairman of the board of Avantor ASA.
Mr. Storetvedt has alsos been a director of RGI
Holdings Inc. since June 1995.
</TABLE>
The Board is required to meet at least four times per year, either in
person or by telephonic conference. The Board met 25 times in 1996, including
two times as the Audit Committee. The Directors did not establish any
nominating, compensation or other committees or other groups performing similar
functions during 1996, other than the Audit Committee which was comprised of
Messrs. Auch and Ungerleider. Mr. Welker joined the committee in January 1997.
RECOMMENDATION OF THE BOARD: The Board hereby recommends and nominates
Messrs. Auch, Welker, Ungerleider, Uptain and Storetvedt for election as
Directors of the Company by the Shareholders at the Annual Meeting to serve
until the next annual meeting of Shareholders or as otherwise provided in the
Certificate.
The five individuals receiving the highest vote totals will be elected as
directors.
2. SELECTION OF INDEPENDENT AUDITOR
Effective December 31, 1996, the Registrant has engaged the independent
accounting firm of KPMG Peat Marwick LLP (KPMG) to serve as the Registrant's
principal independent accountant, to audit the Registrant's consolidated
financial statements. KPMG was the principal independent accountant for RGI/US,
and audited RGI/US' consolidated financial statements as of and for the years
ended December 31, 1993, 1994 and 1995. The independent accounting firm of Ernst
and Young LLP (E&Y) served as the principal independent accountant to audit
Banyan's financial statements since December 21, 1995. At no time during E&Y's
engagement as Banyan's principal accountant were there any disagreements between
Banyan and E&Y on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
The Board believes that KPMG is knowledgeable about the Company's
operations and accounting practices and is well qualified to act in the capacity
of principal independent accountants. Therefore, the Board has selected KPMG to
continue as the Company's principal independent accountants to examine its
consolidated financial statements for the fiscal year ended December 31, 1997.
Although the selection of independent accountants does not require approval of
the shareholders, the Board believes it is desirable to obtain the concurrence
of the Shareholders to this selection. Due to the difficulty and expense
involved in retaining another independent firm on short notice, the Board does
not contemplate appointing another firm to act as the Company's independent
accountants for fiscal year ended December 31, 1997 if the Shareholders do
4
<PAGE> 7
not concur in the appointment of KPMG. Instead, the Board will consider the vote
as advice in making their selection of independent accountants for the following
year.
Representatives of KPMG are expected to be present at the Annual Meeting
and will have the opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD: That the Shareholders concur in the following
resolution which will be presented for a vote of the Shareholders at the Annual
Meeting:
RESOLVED, that the Shareholders concur in the appointment by the Board of
KPMG Peat Marwick LLP to continue to serve as the Company's principal
independent accountants for the fiscal year ended December 31, 1997.
The affirmative vote of a majority of the votes cast by Shareholders
present in person or by proxy and eligible to vote at the Annual Meeting, a
quorum being present, is required to adopt the foregoing resolution.
3. AMENDMENT TO COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO
REDUCE THE NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK FROM 105.0 MILLION TO
15.0 MILLION
The Company currently is authorized to issue 105.0 million shares of
capital stock of which 5.0 million shares must be shares of preferred stock
having a par value of $0.01 per share and 100.0 million shares must be shares of
common stock of one class having a par value of $0.01 per share. As of May 9,
1997, the Company had 6,290,874 shares of common stock issued and outstanding.
No shares of preferred stock were issued. Following the Company's merger with
RGI U.S. Holdings and the "reverse-split" effected in connection therewith, the
Company's board of directors concluded, on the advice of the Company's
management that the Company's future business plans and financing needs do not
require the Company to maintain the flexibility afforded by having over 90.0
million shares of common stock available for issuance. In reaching this
decision, the Board considered the costs associated with maintaining these
unissued shares and the potential negative impact on the market for the
Company's common stock caused by such a large "overhang." Therefore, the Board
concluded that it is desirable to reduce the number of authorized shares of
common stock from 100.0 million to 10.0 million.
RECOMMENDATION OF THE BOARD: That the Shareholders concur in the following
resolution which will be presented for a vote of the Shareholders at the Annual
Meeting:
RESOLVED, that the first sentence of Article IV of the Company's Amended
and Restated Certificate of Incorporation be deleted in its entirety and be
replaced by the following:
The total number of shares of capital stock which the Corporation shall
have authority to issue is 15.0 million shares, of which 5,000,000 shares shall
be preferred stock, $0.01 par value, and 10,000,000 shares shall be common
stock, $0.01 par value.
The affirmative vote of a majority of the Company's shares of common stock
are required to adopt the proposal.
5
<PAGE> 8
EXECUTIVE OFFICERS
The following table sets forth information with respect to the Company's
executive officers. Each officer serves until his successor is elected and
qualified by the Directors or until his death, resignation or removal by the
Directors. For Mr. Uptain's biography see "Matters to be Considered by
Shareholders -- Election of Directors" above.
<TABLE>
<CAPTION>
OFFICE AND YEAR
NAME AGE OTHER PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS FIRST ELECTED
---- --- -------------------------------------------------- ---------------
<S> <C> <C> <C>
Raymond J. Whitty........... 52 Mr. Whitty has been Chief Financial Officer and Chief Financial Officer,
Treasurer of the Company since January 1997. He Treasurer, Secretary;
has been Secretary of the Company since February 1997
1997. From May 1996 to December 1996, Mr. Whitty
was a financial consultant to RGI. From October
1995 to May 1996 he was an independent financial
consultant. From August 1988 until September 1995,
Mr. Whitty was the Chief Financial Officer of
Westin Hotel Company.
Chris J. Pollak............. 30 Mr. Pollak has been Corporate Controller of the Vice President; 1997
Company since January 1997. Mr. Pollak has been
Vice President of the Company since February 1997.
From October 1996 to January 1997, Mr. Pollak was
the Corporate Controller for Northwest Lodging,
Inc. and American Motels Acquisition Company L.P.
(collectively "Northwest"). Northwest owns and
operates hotels and motels in the western United
States. Mr. Pollak was employed by KPMG Peat
Marwick LLP ("KPMG") from September 1990 to
September 1996. He was a manager in KPMG's Real
Estate Practice from July 1996 to September 1997.
Mr. Pollak received a B.A. Degree in Business
Administration with concentrations in Accounting
and Finance from Washington State University. He
is a Certified Public Accountant and a member of
the Washington State Society of CPAs.
</TABLE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
A. DIRECTOR COMPENSATION
The Directors are each paid an annual fee of $15,000 payable quarterly,
plus $875 for each Board meeting, including meetings of the Audit Committee,
attended in person and $250 an hour for each Board meeting, including meetings
of the Audit Committee, attended via telephonic conference call. In addition,
each Director is reimbursed for out-of-pocket expenses incurred in attending
meetings of the Board.
B. EXECUTIVE COMPENSATION
Since December 31, 1996, Ken Uptain has served as President of the Company,
but did not receive any compensation during the last three fiscal years from the
Company or from RGI U.S. Holdings, Inc. Prior to completion of the Company's
merger with RGI U.S. Holdings, Inc. on December 31, 1996, Leonard G. Levine
served as the Company's President. Mr. Levine served as Chief Executive Officer
of the Company
6
<PAGE> 9
pursuant to an employment agreement entered into on January 1, 1990 through
December 31, 1996. As amended, the agreement expires December 31, 1998. Under
the amended agreement, Mr. Levine was paid a base salary during 1996 of
$108,141. Mr. Levine was also eligible to receive compensation under an
incentive program included in his contract. Mr. Levine earned incentive
compensation based upon specified percentages of the Company's collateralized
claims which were converted into cash, the amount of the Company's unsecured
claims which were converted into cash, cash distributions of capital to
stockholders and distributions of income to stockholders of the Company.
Pursuant to Mr. Levine's amended employment agreement, all incentive
amounts earned had been paid 80% in cash and 20% in shares of the Company's
common stock (the "Award Shares") on or before March 15 of the year following
the period for which the incentive was earned. The preceding table set forth the
incentive compensation earned by Mr. Levine during the last three fiscal years.
Mr. Levine received 3,196 Award Shares (issue price equal to $13.43 per share)
and 2,017 Award Shares (issue price equal to $28.75 per share) in respect to
incentive compensation earned by Mr. Levine for the fiscal years ended December
31, 1994 and 1993 respectively. In addition, Mr. Levine received 742 Award
Shares (issue price equal to $10.78 per share) for the fiscal year ended
December 31, 1995. The Award Shares issued to Mr. Levine had been held in trust
by the Company, pending satisfaction of the vesting requirements contained in
the employment agreement. Mr. Levine satisfied the vesting requirement of his
amended employment agreement upon his resignation and termination of employment
with the Company without cause following a change in control of the Company,
pursuant to the terms of the Merger.
Pursuant to the Merger, Mr. Levine resigned and his employment was
terminated without cause following a change of control of the Company (as
defined in the Merger agreement). However, the Company remains obligated to pay
Mr. Levine his base salary as defined in the amended employment agreement
through its expiration date of December 31, 1998, which will result in a payment
to Mr. Levine of approximately $110,000 in base salary for the fiscal year ended
December 31, 1997. In addition, under the employment agreement, as a result of
the change of control, on December 31, 1996 Mr. Levine received a payment of
$1,218,285 representing incentive compensation equal to that which he would have
earned if all of the Company's assets had been converted into cash and all
proceeds were distributed as of the date of his employment termination.
The number of Award Shares issued to Mr. Levine and the share prices as
described above have been adjusted by multiplying the issue price and dividing
the number of shares issued by twenty-five thus giving effect to the Company's
reverse stock-split as approved by its stockholders.
The following sets forth the compensation, in excess of $100,000 paid to
the Company's executive officers for the years ended December 31, 1996, 1995 and
1994:
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- OTHER ---------------------- -------
ANNUAL RESTRICTED ALL OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
YEAR SALARY BONUS SATION AWARDS SARS(#) PAYOUTS SATION
---- ------ ----- ------- ---------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leonard G. Levine,.... 1996 $108,141 $ 32,044 N/A $ 8,011 N/A N/A N/A
President(1) 1995 105,606 171,805 N/A $42,951 N/A N/A N/A
1994 102,400 231,166 N/A $53,002 N/A N/A N/A
Donald Proctor(2)..... 1996 $200,000 $ 1,500 N/A N/A N/A N/A N/A
1995 N/A N/A N/A N/A N/A N/A N/A
1994.. N/A N/A N/A N/A N/A N/A N/A
Ronald
D'Haeseleer(3)...... 1996 $140,000 $ 1,000 N/A N/A N/A N/A N/A
1995.. N/A N/A N/A N/A N/A N/A N/A
1994.. N/A N/A N/A N/A N/A N/A N/A
Douglas Widell(4)..... 1996 $140,000 $ 11,500 N/A N/A N/A N/A N/A
1995 N/A N/A N/A N/A N/A N/A N/A
1994 N/A N/A N/A N/A N/A N/A N/A
</TABLE>
- -------------------------
(1) No other executive officer earned more than $100,000 in salary and bonus.
7
<PAGE> 10
(2) Mr. Proctor serves as an executive officer of Grand Harbor Property
Holdings, Inc. ("GHPH"), a subsidiary of the Company. In this capacity, Mr.
Proctor exercises policy making functions for GHPH. Although Mr. Proctor has
been employed by this entity or its predecessor since July 1991, prior to
1996 the Company owned only a minority interest in GHPH.
(3) Mr. D'Haeseleer serves as an executive officer of GHPH. In this capacity,
Mr. D'Haeseleer exercises policy making functions for GHPH. Although Mr.
D'Haeseleer has been employed by this entity or its predecessor since July
1991, prior to 1996, the Company owned only a minority interest in GHPH.
(4) Mr. Widell serves as an executive officer of Oak Harbor Property Holdings,
Inc. ("OHPH"), a subsidiary of the Company. Although Mr. Widell has been
employed by this entity since August 1994, prior to 1996 the Company owned
only a minority interest in OHPH.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board has formed a Compensation Committee comprised of the three
outside directors: Messrs. Auch, Ungerleider and Welker (the "Committee"). The
Committee will be responsible for setting and administering executive officer
salaries and the annual bonus and long-term incentive plans that the Company may
adopt to incentivize management of the Company. The Committee does not believe
that the compensation policies applicable to the Company's executives prior to
the merger are relevant for evaluating compensation on a going-forward basis.
The Committee is in the process of formulating the types of compensation
policies that will be put in place for the Company's officers and key employees
including those of the Company's subsidiaries. Presently, Messrs. Uptain and
Whitty are paid salaries equal to $200,000 and $150,000, respectively. The
Company does not presently have any other incentive or bonus plans in place.
The Compensation Committee:
Walter E. Auch, Sr.
Robert Ungerleider
Fred L. Welker
8
<PAGE> 11
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total return of
Legend Properties, Inc., the Russell 2000, and a "peer group" comprised of the
following companies: American Gulf Communities Corporation, Castle & Cooke,
Inc., HMG Courtland Properties, Inc., Interstate General Company, L.P., Oriole
Homes Corp. and Bluegreen Corporation (f/k/a Patten Corporation).
<TABLE>
<CAPTION>
MEASUREMENT PERIOD THE COMPANY PEER GROUP RUSSELL 2000
(FISCAL YEAR COVERED)
<S> <C> <C> <C>
DEC-91 100 100 100
DEC-92 123.21 121.49 116.52
DEC-93 223.21 170.94 136.64
DEC-94 100 155.31 132.17
DEC-95 71.43 142.71 167.16
DEC-96 55.36 159.84 191.84
</TABLE>
The above graph is based upon common stock and index prices calculated as
of December 31 for each of the last five years. The Company's December 31, 1996
closing price per share of common stock was $7.75 (adjusted for the 25:1 reverse
stock split which occurred on December 31, 1996). As of May 9, 1997, the
Company's common shares closed at $4.00 per share. The stock price performance
depicted in the graph above represents the past performance of Banyan Mortgage
Investment Fund (Banyan). Legend Properties, Inc., formerly known as Banyan, is
the surviving corporation from the December 31, 1996 merger with RGI U.S.
Holdings, Inc. (RGI/US). For financial reporting purposes, RGI/US was the
acquiror of Banyan, which changed its name to Legend Properties, Inc. upon the
effectiveness of the merger. The past performance of Banyan is not necessarily
indicative of the future performance of Legend Properties, Inc.
SHAREHOLDER PROPOSALS
Shareholder proposals for the 1997 Annual Meeting of Shareholders must be
received by the Company at its executive office in Seattle, Washington, on or
prior to , 1998 for inclusion in the Company's proxy statement for
that meeting. Any Shareholder proposal must meet the requirements set forth in
the rules of the Securities and Exchange Commission relating to Shareholder
proposals.
9
<PAGE> 12
OTHER MATTERS
As of the date of this Proxy Statement, no business other than that
discussed above is to be acted upon at the Meeting. If no other matters not
known to the Board should, however, properly come before the Meeting, the
persons appointed by the signed proxy intend to vote it in accordance with their
best judgment.
Legend Properties, Inc.
By the order of the Board of Directors
Kenneth L. Uptain
President
Seattle, Washington
, 1997
10
<PAGE> 13
ANNEX A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
LEGEND PROPERTIES, INC. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
FIRST: That on May , 1997, the Board of Directors of the Corporation duly
adopted the following resolution setting forth a proposed amendment to the
Corporation's Certificate of Incorporation declaring the amendment to be
advisable. The resolution setting forth the proposed amendments is as follows:
RESOLVED, that the first sentence of Article IV, Section A be, and hereby
is, deleted in its entirety and the following be substituted in its entirety:
"The total number of shares of capital stock which the Corporation shall
have authority to issue is fifteen million (15,000,000) shares, of which
5,000,000 shares shall be preferred stock, $0.1 par value, and 10,000,000 shares
shall be common stock, $.01 par value.
11
<PAGE> 14
PROXY
LEGEND PROPERTIES, INC.
1420 FIFTH AVENUE
SUITE 4200
SEATTLE, WASHINGTON 98101
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Kenneth L. Uptain and Raymond J. Whitty, and
each of them, as Proxies, with the power to appoint their substitutes, and
hereby authorizes them to represent and to vote, as designated on the reverse
side, all the Shares of Common Stock, $0.01 par value, of Legend Properties,
Inc. held of record by the undersigned on May 29, 1997, at the Annual Meeting
of Shareholders when convened on June 26, 1997, or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, AND 3.
CONTINUED ON THE REVERSE SIDE.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<TABLE>
<S><C>
Please mark
your votes
as in this /X/
example
1. Election of Directors 2. PROPOSAL to concur in the selection of
PROPOSAL to elect five Directors KPMG Peat Marwick LLP as the Company's
to hold office until the next principal independent accountants for
Annual Meeting of Shareholders, or FOR WITHHELD the fiscal year ending December 31, 1997 FOR AGAINST ABSTAIN
otherwise as provided in the / / / / (check one box): / / / / / /
Company's Amended and Restated
Certificate of Incorporation
(check one box): 3. To amend Article Fourth of the Company's
Amended and Restated Certificate of FOR AGAINST ABSTAIN
NOMINEES: Walter E. Auch, Sr. Incorporation to reduce the number of / / / / / /
Robert M. Ungerlelder authorized shares of capital stock to
Fred E. Welker 15,000,000 shares, of which 5,000,000
Kenneth L. Uptain shares shall be preferred stock, $0.01
Jan Petter Storetvedt par value, and 10,000,000 shares shall
be common stock, $0.01 par value.
For, except vote withheld from the following nominee(s):
4. In their discretion, the Proxies are
_______________________________________________________ authorized to transact any other FOR AGAINST ABSTAIN
business as may properly come before / / / / / /
the Meeting or any adjournment thereof
(check one box):
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN THIS
CARD USING THE ENCLOSED ENVELOPE. PLEASE CONTACT THE
COMPANY'S PROXY SOLICITOR, [CHEMICAL BANK AT
1-800-667-6589], WITH ANY QUESTIONS REGARDING THE
ABOVE.
SIGNATURE(S)_______________________________________________________________________________________ DATE___________________________
NOTE: Sign exactly as name appears at left. If joint tenant, both should sign. If attorney, executor, administrator, trustee or
guardian, give full title as such. If a corporation, please sign corporate name by President or authorized officer. If
partnership, sign in full partnership name by authorized person.
</TABLE>
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
