<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
THE PRESLEY COMPANIES
- --------------------------------------------------------------------------------
(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] Fee not 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:
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<PAGE> 2
[THE PRESLEY COMPANIES LOGO]
April 16, 1997
Dear Stockholder:
This letter accompanies the Proxy Statement for our Annual Meeting of
Holders of Series A Common Stock to be held at 3:30 p.m. on Wednesday, May 14,
1997, at the Sheraton Hotel, 4545 MacArthur Boulevard, Newport Beach, California
92660. We hope that it will be possible for you to attend in person.
At the meeting, the holders of the Company's Series A Common Stock will be
asked to elect two Class A directors and to ratify the Board's selection of
auditors. In addition, we will present a report on the operations and activities
of the Company. Following the meeting, management will be pleased to answer your
questions about the Company.
The Notice of Annual Meeting and Proxy Statement accompanying this letter
describe the matters upon which stockholders will vote at the upcoming meeting,
and we urge you to read these materials carefully. We also urge you to sign and
return your proxy card so that you may vote on these proposals for stockholder
action.
Sincerely,
[SIG]
William Lyon
Chairman of the Board
[SIG]
Wade H. Cable
President and Chief
Executive Officer
19 Corporate Plaza, Newport Beach, California 92660
<PAGE> 3
[THE PRESLEY COMPANIES LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF HOLDERS OF
SERIES A COMMON STOCK
To be held May 14, 1997
To the Holders of Series A Common Stock of The Presley Companies:
The Annual Meeting of Holders of Series A Common Stock of The Presley
Companies will be held at the Sheraton Hotel, 4545 MacArthur Boulevard, Newport
Beach, California 92660, on Wednesday, May 14, 1997 at 3:30 p.m., for the
following purposes:
1. To elect two Class A Directors; and
2. To consider and act upon a proposal to ratify the selection of
Ernst & Young LLP as the Company's auditors for the fiscal year ending
December 31, 1997; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Holders of record of Series A Common Stock at the close of business on
March 27, 1997 will be entitled to vote at the meeting.
By order of the Board of Directors,
[SIG]
Linda L. Foster
Vice President and Corporate Secretary
Newport Beach, California
April 16, 1997
TO ASSURE THAT YOUR SHARES WILL BE VOTED AT THE MEETING, YOU ARE REQUESTED
TO SIGN THE ATTACHED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE PAID,
ADDRESSED ENVELOPE. NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. IF YOU ATTEND THE MEETING YOU MAY VOTE IN PERSON EVEN THOUGH YOU HAVE
SENT IN YOUR PROXY.
<PAGE> 4
[THE PRESLEY COMPANIES LOGO]
------------------------
PROXY STATEMENT
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Series A Directors of the Board
of Directors of The Presley Companies ("Presley" or the "Company") for use at
the Annual Meeting of Holders of Series A Common Stock (the "Annual Meeting") to
be held at the Sheraton Hotel, 4545 MacArthur Boulevard, Newport Beach,
California 92660, on Wednesday, May 14, 1997 at 3:30 p.m. and at any
adjournments or postponements thereof. The shares represented by the proxy will
be voted at the meeting if the proxy is properly executed and returned to the
Company. Any stockholder giving a proxy has the right to revoke it by giving
written notice to the Vice President and Corporate Secretary of the Company at
any time prior to the voting, or by executing and delivering a later dated
proxy, or by voting in person at the Annual Meeting. A holder of record of
Series A Common Stock at the close of business on March 27, 1997, if present at
the Annual Meeting, may vote in person whether or not he has previously given a
proxy. This Proxy Statement and its enclosures are being mailed to the Company's
Series A Common stockholders on or about April 16, 1997.
The cost of the solicitation will be paid by the Company. In addition to
solicitation of proxies by use of the mails, directors, officers or employees of
the Company may solicit proxies personally, or by other appropriate means. The
Company will request banks, brokerage houses and other custodians, nominees or
fiduciaries holding stock in their names for others to send proxy materials to
and to obtain proxies from their principals; the Company will reimburse them for
their reasonable expenses in doing so. The Company has retained the services of
Proxy Express, Inc. to assist in the distribution of proxies at an estimated
cost of $550 plus certain out-of-pocket expenses.
VOTING
As of March 27, 1997, the securities of the Company entitled to vote at the
Annual Meeting consist of 17,838,535 shares of Series A Common Stock, par value
$.01 per share ("Series A Common"). Only holders of record of Series A Common on
the books of the Company at the close of business on that date will be entitled
to vote at the Annual Meeting, and such stockholders are entitled to one vote
for each share of common stock held by such person. All proxies received and not
revoked will be voted as directed.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Pursuant to a capital restructuring approved by the Company's stockholders
in 1994, the Company's then outstanding common stock was reclassified into
Series A Common, and a new series of common stock ("Series B Common") was
subsequently issued to certain of the Company's lenders. (Each share of Series B
Common will be convertible to a share of Series A Common from and after May 20,
1997.) As part of the capital restructuring, two series of directors were
established, the Series A Directors, to be elected by Series A Common, and the
Series B Directors, to be elected by Series B Common; additionally, the Series A
Directors were classified into three classes, Class III directors whose initial
term expires at the Annual Meeting, and the Class I directors and the Class II
directors, whose respective current terms will expire upon the election of
<PAGE> 5
successor directors at the annual meetings of holders of Series A Common to be
held in 1998 (for the Class I directors) and in 1999 (for the Class II
directors).
Accordingly, only the Class III Series A Directors are to be elected at
this Annual Meeting, and to that end, the Board of Directors has nominated and
recommended for election as a Class III Series A Director each of the two
persons named below, for the term to expire upon the election of a successor
Class III Series A Director at the annual meeting of Series A Common
stockholders to be held in 2000. To be elected as a director, the nominee must
receive the favorable vote of a plurality of the shares represented and entitled
to be voted at the Annual Meeting. The candidate receiving the highest number of
affirmative votes for each director's position to be elected at the Annual
Meeting will be deemed elected to that position. At future Annual Meetings, so
long as the Series A Directors of the Company are so classified, the holders of
Series A Common will vote only for nominees for the class of Series A Directors
whose terms expire at that Annual Meeting. The holders of Series B Common,
voting as a separate class, elect the Series B Directors at a separate meeting
or by written consent. Holders of Series B Common are not entitled to vote in
the election of Series A Directors.
Since there is no specified percentage of either the outstanding shares or
the shares represented at the Annual Meeting required to elect a director,
abstentions of voting and broker non-votes will have the same effect as the
failure of shares to be represented at the Annual Meeting, except that the
shares subject to such abstentions or non-votes will be counted in determining
whether there is a quorum for taking stockholder action. Unless additional
persons are nominated, withholding a vote from a nominee will not adversely
affect the election of that nominee. If additional persons are nominated, each
vote withheld from a nominee may adversely affect the election of that nominee.
The proxies solicited hereby are intended to be voted only for the nominees
whose names are listed below, unless otherwise indicated. In the event that a
nominee for director is proposed at the Annual Meeting, the proxy may be voted
in favor of or against such nominee or any other nominee proposed by the Series
A Directors.
Both of the following nominees are new to Presley's Board and their names
were submitted to the Board of Directors by certain holders of Series B Common.
The Company has no reason to believe that the nominees will not be available for
election to serve their prescribed terms. However, the persons named in the
proxy will have discretionary authority to vote for others if any nominee is
unable or unwilling to serve. Any vacancy that occurs in the number of Series A
Directors serving as directors during the prescribed terms may be filled only by
the vote of a majority of the Series A Directors then in office or, if the
Series A Directors fail to fill the vacancy within 60 days of its occurrence, by
the vote of a majority of outstanding shares of Series A Common.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- --------------------- --- ------------------------------------------- --------
<S> <C> <C> <C>
Marshall E. Stearns 37 Vice President of The Foothill Group, Inc. N/A
Ray A. Watt 78 Chairman of the Board of Watt Group, Inc. N/A
</TABLE>
OTHER DIRECTORS; COMMITTEES
In addition to the above persons, the Company's Board of Directors consists
of the following Series A Directors and Series B Directors, none of whom are up
for election at this Annual Meeting.
SERIES A DIRECTORS
GENERAL WILLIAM LYON, age 74, was elected director and Chairman of the
Board of the Company in 1987. Additionally, General Lyon serves on the Company's
Compensation Committee. General Lyon is also the Chairman of the Board and Chief
Executive Officer of William Lyon Homes, Inc. General Lyon is a retired USAF
Major General and was Chief of the Air Force Reserve from 1975 to 1979.
GENERAL JAMES E. DALTON, USAF (RET.), age 66, was elected to the Board on
December 12, 1991. He serves as Chairman of the Company's Audit Committee and is
a member of the Stock Option Committee and the Compensation Committee. General
Dalton is the President of Logicon R&D Associates, a subsidiary of Logicon
Corporation (a defense contractor providing advanced technology systems and
services), a position
2
<PAGE> 6
he has held since 1985. He also has served as General Manager of Logicon's
Defense Technology Group since 1995.
WADE H. CABLE, age 48, has served as President and Chief Executive Officer
of Presley and has been a director of the Company since 1985. Prior to joining
the Company, he worked for thirteen years with Pacific Enterprises as a senior
executive in various of its real estate operations.
STEVEN B. SAMPLE, age 56, was elected to the Board on December 12, 1991 and
is a member of the Company's Audit Committee, the Stock Option Committee and the
Compensation Committee. Dr. Sample is the President of the University of
Southern California, a position he has held since March 1991. He was the
President of the State University of New York at Buffalo from 1982 to 1991. Dr.
Sample is a director of Western Atlas, Inc. and the Santa Catalina Island
Company.
MARSHALL E. STEARNS, age 37, is nominated for election to the Board at this
Annual Meeting. Mr. Stearns is Managing General Partner of Foothill Partners II,
L.P. and Foothill Partners III, L.P., and a Vice President of The Foothill
Group, Inc., a wholly owned subsidiary of Norwest Corporation. Prior experience
includes development of multi-family real estate.
RAY A. WATT, age 78, is nominated for election to the Board at this Annual
Meeting. Mr. Watt is the Founder and Chairman of the Board of Watt Group, Inc.,
a commercial and residential real estate development and building company. Mr.
Watt has served on the Boards of several civic organizations.
SERIES B DIRECTORS
GREGORY P. FLYNN, age 40, was elected to the Board on May 20, 1994. He is a
Managing Partner of ING Equity Partners, where he has worked since 1994. From
1989 to 1994, Mr. Flynn worked with ING Capital Holdings, a wholly-owned
subsidiary of Internationale Nederlanden Groep, a diversified financial services
company based in Amsterdam. From 1981 to 1988, Mr. Flynn was employed by The
Chase Manhattan Bank. Mr. Flynn is a director of Ladish Company.
CHARLES FROLAND, age 48, was elected to the Board on September 30, 1995. He
is Managing Director of Fixed Income for General Motors Investment Management
Corporation where he has worked since June 1995. From 1987 to 1995, Mr. Froland
worked with Stanford Management Co.; his prior employment includes Grubb & Ellis
Realty Advisors, and other investment and commercial banking firms.
KAREN S. SANDLER, age 38, was elected to the Board on September 30, 1995.
She is Managing General Partner of Foothill Partners II, L.P. and Foothill
Partners III, L.P., and a Vice President of The Foothill Group, Inc., a wholly
owned subsidiary of Norwest Corporation. Ms. Sandler serves on many lender and
creditor committees. Prior to joining Foothill, she worked at Price Waterhouse
and Security Pacific Bank.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS AND DIRECTORS' FEES
The Company's Board of Directors has an Audit Committee, a Compensation
Committee and a Stock Option Committee, but not a nominating committee. The
current members of the Audit Committee are Messrs. Howard P. Allen (a current
Series A Director whose term expires at the Annual Meeting and who is not
standing for re-election), Dalton and Sample. The Audit Committee monitors the
Company's basic accounting policies, reviews audit and management reports and
financial releases and makes recommendations regarding the appointment of the
independent auditors. The current members of the Compensation Committee are
Messrs. Lyon, Allen, Dalton, Flynn, Froland and Sample, and Ms. Sandler. The
Compensation Committee deals with salary and incentive compensation policies for
officers and executives. The current members of the Stock Option Committee are
Messrs. Allen, Dalton, Flynn, Froland and Sample, and Ms. Sandler. The Stock
Option Committee administers the stock option program of the Company, determines
the persons to whom options are to be granted, and fixes the number of shares to
be subject to such options and the other terms of the option agreements, subject
to the provisions of the relevant option plan.
3
<PAGE> 7
During the year ended December 31, 1996, the Board of Directors held four
meetings, the Audit Committee held five meetings, the Stock Option Committee
held one meeting, and the Compensation Committee held two meetings. No Series A
director attended fewer than 75% of all meetings of the Board of Directors
during the fiscal year ended December 31, 1996.
The Company compensates each of Messrs. Allen, Dalton and Sample (the
"Outside Series A Directors") for services performed in his capacity as a
director at a rate of $20,000 a year plus $1,000 for each meeting attended. None
of the other directors receives any compensation as directors. In addition, each
Outside Series A Director is paid $1,000 a year per committee for service on
committees of the Board of Directors. If he so elects, each Outside Series A
Director is entitled to defer payment of his compensation until his retirement
date, at which time he would receive all deferred amounts and all interest
accrued thereon. The rate of interest on such deferred compensation is adjusted
quarterly and is the prime rate used by the Company's principal corporate lender
on the quarterly adjustment date, plus one percent.
Under the Company's Non-Qualified Retirement Plan for Outside Directors
(the "Plan"), each Outside Series A Director of the Company is to receive $2,000
per month beginning on the first day of the month following death, disability or
retirement at age 72; or, in the case of an Outside Series A Director who ceases
participation in the Plan prior to death, disability or retirement at age 72 but
has completed at least ten (10) years of service as a director, eligibility for
benefit payments pursuant to the Plan begins on the first day of the month
following the latter of (a) the day on which such person attains the age of 65,
or (b) the day on which such person's service terminates after completing at
least ten (10) years of service as a director. Effective from December 1991, the
monthly payments are to continue for the number of months that equals the number
of months the Outside Series A Director served as a director of the Company. If
a retired Outside Series A Director receiving payments under the Plan resumes
his status as a director or becomes an employee of the Company, the payments
under the Plan are suspended during the period of such service.
4
<PAGE> 8
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information as to the number of
shares of the Series A Common Stock and the Series B Common Stock beneficially
owned as of March 27,1997. Holders of Series A Common Stock are entitled to
elect six of the nine members of the Company's Board of Directors and holders of
Series B Common Stock are currently entitled to elect three members of the Board
of Directors. Except for voting as separate classes on the election of directors
and certain charter amendments, the shares of Series A Common Stock and Series B
Common Stock have the same voting rights. The following table includes
information for (a) each person or group that is known to the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock, (b)
each of the directors of the Company, (c) each executive officer named in the
Summary Compensation Table, and (d) all officers and directors of the Company as
a group.
<TABLE>
<CAPTION>
AS OF MARCH 21, 1996
---------------------------
SHARES PERCENTAGE
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER OWNED ALL STOCK
------------------- ------------ ----------
<S> <C> <C>
SERIES A COMMON STOCK
General William Lyon................................................. 7,939,589 15.21%
c/o William Lyon Homes, Inc.
4490 Von Karman, Newport Beach, CA 92660
Wade H. Cable and Susan M. Cable, Trustees of
The Cable Family Trust Est. 7-11-88................................ 463,527(1) *
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Howard P. Allen and Dixie M. Allen, Trustees of
the Allen Family Trust Est. 8-7-86................................. 500 *
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
General James E. Dalton.............................................. 2,000 *
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Gregory P. Flynn..................................................... 0 N/A
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Charles Froland...................................................... 0 N/A
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Steven B. Sample..................................................... 500 *
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Karen S. Sandler..................................................... 0(2) N/A
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
David M. Siegel and Linda A. Siegel, Trustees of
the Siegel Family Trust U/D/T Est. 6-20-89......................... 133,479(3) *
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Marshall E. Stearns.................................................. 0(2) N/A
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Lloyd C. Albertson, Jr. and Dorothy K. Albertson,
Trustees of The Lloyd C. Albertson, Jr. Family
Trust Est. 6-15-79................................................. 133,479(4) *
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Charles W. Reynolds.................................................. 6,001 *
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Ray A. Watt.......................................................... 0 N/A
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
AS OF MARCH 21, 1996
---------------------------
SHARES PERCENTAGE
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER OWNED ALL STOCK
------------------- ------------ ----------
<S> <C> <C>
Lewis N. Wilmot...................................................... 66,714 *
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
All directors and officers as a group (17 persons)................... 8,759,646 16.78%
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 27, 1997
---------------------------
SHARES PERCENTAGE
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER OWNED ALL STOCK
------------------- ------------ ----------
<S> <C> <C>
SERIES B COMMON STOCK
Foothill Capital Corporation and The Foothill Group, Inc............. 16,112,470(5) 30.87%
11111 Santa Monica Blvd., Los Angeles, CA 90025
Pearl Street, L.P.................................................... 5,920,362 11.34%
c/o Goldman, Sachs & Co.
85 Broad Street, New York, NY 10004
First Plaza Group Trust (Mellon Bank, N.A., acting as trustee as
directed by General Motors Investment Management Corporation)...... 5,099,206 9.77%
767 Fifth Avenue, New York, NY 10153
International Nederlanden (U.S.) Capital Corporation................. 4,547,269 8.71%
135 East 57th Street, New York, NY 10022
Continental Stock Transfer & Trust Company, solely in its capacity as
trustee for the Whippoorwill/Presley Obligations Trust-1994 under
that certain trust agreement dated as of January 11, 1994, and not
in its individual capacity......................................... 2,677,836 5.13%
c/o Continental Illinois Commercial Corporation
231 South LaSalle Street, Chicago, IL 60697
Karen S. Sandler..................................................... 0(2) N/A
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
Marshall E. Stearns.................................................. 0(2) N/A
c/o The Presley Companies
19 Corporate Plaza, Newport Beach, CA 92660
</TABLE>
- ---------------
* Less than 1%
(1) Does not include 6,017 shares directly owned by children of Mr. Cable, as to
which shares Mr. Cable disclaims beneficial ownership.
(2) Ms. Sandler and Mr. Stearns are managing general partners of Foothill
Partners II, L.P., a Delaware limited partnership that beneficially owns
11,429,878 shares of Series B Common Stock. Series B Common Stock is
convertible into a like number of shares of Series A Common Stock under
certain circumstances and in any event after May 20, 1997.
(3) Does not include 400 shares directly owned by children and family of Mr.
Siegel, as to which shares Mr. Siegel disclaims beneficial ownership, but
includes one share owned directly by Mr. Siegel.
(4) Includes one share directly owned by Mr. Albertson.
(5) Although all of these shares are owned directly by Foothill Capital
Corporation ("Capital"), Foothill Partners, L.P. ("Partners") has a claim to
2,846,482 of the shares and Foothill Partners II, L.P. ("Partners II") has a
claim to 11,429,878 of the shares. The Foothill Group, Inc., the parent of
Capital, is one of the general partners of Partners and Partners II and is a
wholly owned subsidiary of Norwest Corporation.
Except as otherwise indicated in the above notes, shares shown as
beneficially owned are those as to which the named person possesses sole voting
and investment power. However, under California law personal property owned by a
married person may be community property which either spouse may manage and
control, and the Company has no information as to whether any shares shown in
this table are subject to California community property law.
6
<PAGE> 10
PRESLEY MANAGEMENT
EXECUTIVE OFFICERS
The executive officers of Presley during the last fiscal year and their
ages are set forth in the following table. There are no family relationships
between any director or executive officer and any other director or executive
officer of Presley. Executive officers serve at the discretion of the Board of
Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------- ---- ------------------------------------------
<S> <C> <C>
General William Lyon 74 Director and Chairman of the Board
Wade H. Cable 48 Director, Chief Executive Officer and
President
David M. Siegel 55 Director, Senior Vice President, Chief
Financial Officer and Treasurer
L.C. Albertson, Jr. 53 Senior Vice President
Mary J. Connelly 45 Senior Vice President
Charles W. Reynolds 51 Senior Vice President
Lewis N. Wilmot 54 Senior Vice President
Nancy M. Harlan 50 Senior Vice President and General Counsel
Linda L. Foster 49 Vice President and Corporate Secretary
W. Douglass Harris 54 Vice President and Corporate Controller
Brian P. McGowan 45 Vice President -- Financial Operations
</TABLE>
GENERAL WILLIAM LYON was elected director and Chairman of the Board of the
Company in 1987. Additionally, General Lyon serves on the Company's Compensation
Committee. General Lyon is also the Chairman of the Board and Chief Executive
Officer of William Lyon Homes, Inc. General Lyon is a retired Major General and
was Chief of the Air Force Reserve from 1975 to 1979.
WADE H. CABLE has served as President and Chief Executive Officer of
Presley and has been a director of the Company since 1985. Prior to joining the
Company, he worked for thirteen years with Pacific Enterprises as a senior
executive in various of its real estate operations, including two years as an
Executive Vice President of Pacific Lighting Real Estate Group and four years as
the President of Fredricks Development Company, a residential developer and
homebuilder.
DAVID M. SIEGEL, a Senior Vice President, has been Chief Financial Officer
and Treasurer of Presley since February 1985 and was elected to the Board on
December 12, 1991. Prior to joining Presley, Mr. Siegel was Executive Vice
President and Chief Financial Officer for two homebuilding companies. Mr.
Siegel, a certified public accountant, was also a partner with Kenneth Leventhal
& Company, Certified Public Accountants, from 1972 to 1978, and has been
involved with the real estate development and homebuilding industry for more
than 30 years.
L.C. ALBERTSON, JR., a Senior Vice President of the Company, in September
1996 was named President of the Company's Inland Empire operations in Southern
California. Mr. Albertson's prior service at Presley from June 1985 to September
1996 included assignments as President of other operating entities of Presley.
From 1982 to 1984, he held the position of President of Barratt Irvine, a real
estate development company. Mr. Albertson has been in the real estate
development and homebuilding industry for more than 25 years.
MARY J. CONNELLY, a Senior Vice President, joined the Company in May 1995
as President of the Company's Nevada Region, after eight years' association with
Gateway Development -- six of which were served as Managing Partner in Nevada.
Ms. Connelly was Vice President -- Finance for Presley's San Diego, California
operations from 1985 to 1987, and she has more than 20 years experience in the
real estate development and homebuilding industry.
CHARLES W. REYNOLDS, a Senior Vice President of the Company, currently
serves as President of the Company's Arizona Region, a position he has held
since July 1987. In addition, and for the six years prior to 1987, Mr. Reynolds
held other operational and executive positions at Presley.
7
<PAGE> 11
LEWIS N. WILMOT, a Senior Vice President of the Company, currently serves
as President of the Company's New Mexico Region, a position he has most recently
held since June 1995, and previously held for four years from 1986 through 1989.
In addition, Mr. Wilmot has held other operational and executive positions over
his 23 years at Presley, and has been involved with the real estate development
and homebuilding industry for more than 30 years.
NANCY M. HARLAN, a Senior Vice President and General Counsel, joined
Presley in October 1987 after six years with Pacific Enterprises as Counsel to
its Real Estate Development subsidiaries. Ms. Harlan has been involved with the
real estate development and homebuilding industry for 20 years.
LINDA L. FOSTER, Vice President and Corporate Secretary since 1987, has
been employed by the Company since 1979 as Corporate Secretary and in other
administrative positions. Ms. Foster has been involved with the real estate
development and homebuilding industry for more than 15 years.
W. DOUGLASS HARRIS, Vice President and Corporate Controller, joined the
Company in June 1992, after seven years with Shapell Industries, Inc., another
major California home builder, as its vice president and corporate controller.
Mr. Harris has been involved with the real estate development and homebuilding
industry for more than 20 years.
BRIAN P. MCGOWAN, Vice President -- Financial Operations, joined the
Company in July 1995, after ten years with Sunrise Company, a privately held
company which develops large scale master-planned country club communities, as
its vice president and corporate controller.
8
<PAGE> 12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the annual and long-term compensation of the
Company's Chief Executive Officer and four additional most highly compensated
executive officers whose total annual salary and bonus exceeded $100,000 during
the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------------------
BONUS EARNED
BONUS PAID IN DURING
SPECIFIED YEAR SPECIFIED YEAR
BUT EARNED IN BUT PAYABLE
EARLIER YEARS IN FUTURE YEARS
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) ($)(2)(4) ($)(3)(4)
- ---------------------------------------- ---- ------------ -------------- ---------------
<S> <C> <C> <C> <C>
Wade H. Cable 1996 399,500 74,988 0
Director, Chief Executive 1995 399,500 74,988 0
Officer and President 1994 399,500 74,863 224,967
David M. Siegel 1996 196,620 37,494 0
Director, Senior Vice 1995 196,620 37,494 0
President, Chief Financial 1994 189,953 18,716 112,484
Officer and Treasurer
L.C. Albertson, Jr. 1996 196,620 13,739 12,000
Senior Vice President 1995 196,620 14,620 0
1994 196,620 56,108 41,217
Lewis N. Wilmot 1996 135,904 45,011 10,000
Senior Vice President 1995 135,904 45,011 0
1994 135,904 8,334 135,032
Charles W. Reynolds 1996 123,728 5,425 61,350
Senior Vice President 1995 123,728 5,425 0
1994 123,728 15,000 16,274
</TABLE>
- ---------------
(1) Includes amounts which the executive would have been entitled to be paid,
but which at the election of the executive were deferred by payment into the
Company's 401(k) plan ("executive elected deferrals"). The Company makes no
contributions for executives into the plan other than executive elected
deferrals.
(2) Represents amounts paid in 1996, 1995 or 1994, respectively, under the
Company's executive bonus plan or employment agreement with the executive,
but which were earned prior to the year of payment.
(3) Represents amounts which were earned in 1996, 1995 or 1994, respectively,
under the Company's executive bonus plan or employment agreement with the
executive, but which are payable after the year earned under the conditions
set forth in that plan and in any employment agreement with the executive.
(4) The 1996 executive bonus plan provides that designated executives receive a
percentage of corporate, region or division pre-tax income, according to the
employment agreements between the Company and each designated executive.
Bonus awards earned with respect to any year are distributed in equal
amounts over the following three-year period with no entitlement to payment,
in certain instances, if the executive's employment with Presley terminates
prior to payment. As of December 31, 1996, Messrs. Cable, Siegel, Albertson,
Wilmot and Reynolds had accrued but unpaid bonuses under the executive bonus
plan aggregating $74,991, $37,496, $25,739, $55,010 and $66,774,
respectively.
EMPLOYMENT CONTRACTS
The Company has employment agreements with certain officers, including
Messrs. Cable, Siegel, Albertson, Wilmot and Reynolds. Each of the agreements
provides for a three-year term and also provides for the payment of bonuses
which (through 1996) are generally based on the fiscal year pre-tax income of
the Company or of a specific region of the Company. Earned bonuses are paid over
a three-year period with no entitlement to payment, in certain instances, if the
officer's employment with Presley terminates prior to payment. The employment
agreements provide that if there is a change of control of the Company, and if,
in the cases of Messrs. Cable and Siegel, their employment ceases for any reason
or, in the case of each of the other officers, if employment is terminated by
the Company other than for cause or if there is a material
9
<PAGE> 13
change in the nature and extent of the duties of such officer, all stock options
granted to that officer will vest immediately and the following amounts will be
paid to that officer; (i) the salary for the remainder of the three-year
contract period (or, if longer, for 12 months); (ii) deferred bonus amounts, as
well as bonus accrued through date of termination; and (iii) accrued vacation
pay through date of termination.
During 1996, the base annual compensation of Messrs. Cable, Siegel,
Albertson, Wilmot and Reynolds under their respective employment agreements is
$399,500, $196,620 (increased to $220,000 effective in 1997), $196,620, $135,904
and $123,728, and the bonuses payable (through 1996) to those individuals are
based on the following annual results; for Messrs. Cable and Siegel, 2% and 1%,
respectively, of the Company's pre-tax income; for Mr. Albertson, 1% of the
pre-tax income of the Southern California Region; for Mr. Wilmot, 2% of the
pre-tax income of the Northern California and New Mexico Regions; and for Mr.
Reynolds, 3% of the pre-tax income of the Southwest and Arizona Regions.
Effective on January 1, 1997, the above described employment agreements and
bonus arrangements were modified by a revised incentive compensation plan. (See
Compensation Committee Report on page 12.)
1991 STOCK OPTION PLAN
Under the amended 1991 Stock Option Plan of the Company, options to
purchase an aggregate of not more than 2,642,000 shares of Series A Common Stock
may be granted from time to time to key employees, officers, directors,
consultants and advisors of Presley or any of its subsidiaries. The plan is
administered by the Stock Option Committee of the Board of Directors. The
committee is generally empowered to interpret the plan, prescribe rules and
regulations relating thereto, determine the terms of the option agreements,
amend them with the consent of the optionee, determine the employees to whom
options are to be granted, and determine the number of shares subject to each
option and the exercise price thereof. It is currently anticipated that the per
share exercise price for stock options will not be less than 100% of the fair
market value of a share of the Series A Common Stock on the date the option is
granted. The options will be exercisable for a term determined by the committee,
not to exceed ten years from the date of grant or upon a change of control.
10
<PAGE> 14
The following table sets forth the information noted for all stock options
held at December 31, 1996 by the Chief Executive Officer and the other four
executive officers named in the Summary Compensation Table above and by William
Lyon, the Chairman of the Board. No stock options were granted or exercised in
1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------------------------------
EXERCISE
NUMBER OF PRICE EXPIRATION
NAME OPTIONS(1) ($/SH)(2) DATE(1)
---- ---------- --------- --------------
<S> <C> <C> <C>
Wade H. Cable.................................. 175,000 $ 1.00 May 20, 2000
175,000 1.00 May 20, 2001
175,000 1.00 May 20, 2002
L.C. Albertson, Jr. ........................... 66,666 2.875 May 20, 2000
66,667 2.875 May 20, 2001
66,667 2.875 May 20, 2002
David M. Siegel................................ 66,666 1.00 May 20, 2000
66,667 1.00 May 20, 2001
66,667 1.00 May 20, 2002
Lewis N. Wilmot................................ 33,333 2.875 May 20, 2000
33,333 2.875 May 20, 2001
33,334 2.875 May 20, 2002
Charles W. Reynolds............................ 33,333 2.875 May 20, 2000
33,333 2.875 May 20, 2001
33,334 2.875 May 20, 2002
William Lyon................................... 250,000 2.875 May 20, 2000
250,000 2.875 May 20, 2001
250,000 2.875 May 20, 2002
</TABLE>
- ---------------
(1) All the options were granted on May 20, 1994 and cover Series A Common
Stock. The options vest and, except for the options held by Messrs. Cable
and Siegel, become exercisable, as to one-third of the shares covered
thereby at the end of each of the first three years from the date of grant
or, if earlier, upon the occurrence of a change of control (as defined in
the stock option agreements), and expire five years from the date of
vesting.
(2) For Messrs. Cable and Siegel, in connection with approval of the Company's
1997 Incentive Compensation Plan, the Board approved in 1996 repricing of
their outstanding stock options from $2.875 to $1.00. Of the originally
vested options held by Messrs. Cable and Siegel, 100,000 each remained
vested at December 31, 1996, and the balance of their respective options
become vested on May 20, 1997. (See Compensation Committee Report on page
12.)
RETIREMENT SAVINGS PLAN
The Company maintains a trusteed Retirement Savings Plan (the "Savings
Plan") which is available to all homebuilding employees who are 18 years old or
older and have completed one year of service with the Company. The Company
currently makes no contributions to the Savings Plan. The Savings Plan, which
has been qualified under Section 401(a) of the Code, permits elective deferrals
under Section 401(k) of the Code and permits participants to contribute up to
20% of their pre-tax earnings to the Savings Plan so long as this amount did not
exceed $9,500 for 1996.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company has entered into an indemnification agreement with each of its
Series A Directors and each of its executive officers named in the Summary
Compensation Table above, among others, to provide them with the maximum
indemnification allowed under its Bylaws and applicable law, including
indemnification for all judgments and expenses incurred as the result of any
lawsuit in which such person is named as a defendant by reason of being a
director, officer or employee of the Company, to the extent such indemnification
is permitted by the laws of Delaware.
11
<PAGE> 15
COMPENSATION COMMITTEE REPORT
In connection with the Company's capital restructuring in 1994, the Company
entered into employment contracts with eight executive officers for terms which
expire in May 1997. The compensation arrangements currently in effect are being
reviewed. The following report summarizes the current arrangements:
Chief Executive Officer Compensation -- The salary of Wade H. Cable, the
chief executive officer ("CEO") of Presley, has not changed since May 16, 1990.
Through 1996, the CEO participated in a bonus program, originally established in
1987, that provides for a bonus to the CEO of 2% of the Company pre-tax profits.
This bonus is paid, following annual audits, one-third in the year after it is
earned, one-third in the second year after it is earned and the final third in
the third year after it is earned. The CEO also receives an auto for his use and
related auto expenses, a policy that has been in place since 1985.
Compensation With Respect to Other Executive Officers -- The rate of
compensation for the other executive officers has been in effect for varying
periods, and was based in part upon the review of a survey of compensation paid
by other homebuilders of similar size. Through 1996, the bonuses for six of the
eight executive officers were based upon a fixed percentage of the pre-tax
profit of the Company or their respective regions, depending upon their job
responsibilities. Two executive officers' bonuses were discretionary. The
discretionary bonus has been paid in full annually, while the bonus based on
pre-tax profits has been paid in three equal annual installments as described
above for the CEO.
Approval of 1997 Incentive Compensation Plan -- Effective on January 1,
1997, the Company's Board of Directors approved a new incentive compensation
plan for all of the Company's full-time, salaried employees -- including the
Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), Executives,
Managers, Field Construction Supervisors, and certain other employees. Under the
terms of this new plan, the CEO and CFO will be eligible to receive bonuses at
the discretion of the Compensation Committee of the Board; in addition, the
stock options currently outstanding and held by the CEO and CFO were repriced
from $2.875 to $1.00.
In addition, the 1997 Executive Bonus Plan for 13 Area Managers and
designated Executives stipulates annual setting of individual bonus targets,
expressed as a percent of each executive's salary, with awards based on
performance against business plan goals pertaining to each participant's
operating area.
All awards will be prorated downward if the sum of all calculated awards for the
entire Company exceeds 20% of the Company's consolidated pre-tax income before
bonuses. After completion of the Company's applicable annual audit, awards will
be paid out over three years, with 50% paid following the determination of bonus
awards, 25% paid one year later, and 25% paid two years later. The deferred
amounts will be forfeited in the event of termination for any reason except
retirement, death or disability. The 1997 bonus target for each of Messrs.
Albertson, Wilmot and Reynolds is 50%, 60% and 60%, respectively, of his 1997
salary.
COMPENSATION COMMITTEE
William Lyon
Howard P. Allen
James E. Dalton
Gregory P. Flynn
Charles Froland
Steven B. Sample
Karen S. Sandler
12
<PAGE> 16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee has ever been an officer
or employee of the Company, except for Mr. Lyon who has been Chairman of the
Board since 1987.
COMMON STOCK PRICE PERFORMANCE
The graph below compares the cumulative total return of the Company, the S
& P 500 Index and S & P Homebuilding Index:
<TABLE>
<CAPTION>
Measurement Period S&P Homebuilding The Presley
(Fiscal Year Covered) Index S&P 500 Index Companies
--------------------- ---------------- ------------- -----------
<S> <C> <C> <C>
12/31/91 100 100 100
12/31/92 123 108 37
12/31/93 162 118 32
12/31/94 94 120 26
12/31/95 134 165 17
12/31/96 122 203 11
</TABLE>
The graph above is based upon common stock and index prices calculated as
of December 31, for 1991, 1992, 1993, 1994, 1995 and 1996. The base period is
December 31, 1991, on which date the Company's closing common stock price was
$10.50 per share. On December 31, 1996 and on March 27, 1997, the Company's
common stock closed at $1.125 and $1.00 per share, respectively. The stock price
performance of the Company's Series A Common Stock depicted in the graph above
represents past performance only and is not necessarily indicative of future
performance.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
The Board is seeking stockholder ratification of its selection of Ernst &
Young LLP to serve as the Company's auditors for the fiscal year ending December
31, 1997. Abstentions and broker non-votes will have the same effect as negative
votes. Kenneth Leventhal & Company, which merged with Ernst & Young LLP in 1995,
had served as the Company's auditors since 1987. Between 1984 and 1987, the
Company was a subsidiary of Pacific Enterprises (formally Pacific Lighting
Corporation) and Kenneth Leventhal & Company audited the Company's books and
records in connection with its audit of Pacific Enterprises' real estate
operations. In addition, from 1974 through 1984, Kenneth Leventhal & Company
served as the Company's auditors. It is anticipated that representatives from
Ernst & Young LLP will attend the Annual Meeting with the opportunity to make
any statement they may desire to make and will be available to respond to
appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
13
<PAGE> 17
OTHER BUSINESS
The Company knows of no other matters to be brought before the Annual
Meeting. If other matters should come before the Annual Meeting, it is the
intention of each person mentioned in the proxy to vote such proxy in accordance
with his judgment of such matters. Discretionary authority with respect to such
other matters is granted by the execution of the enclosed proxy.
STOCKHOLDERS' PROPOSALS
Proposals by stockholders intended to be presented at the next annual
meeting in 1997 must be sent in writing to the Vice President and Corporate
Secretary of the Company at the Company's principal executive offices and
received by November 30, 1997 to be considered for inclusion in the Company's
proxy material under the rules of the Securities and Exchange Commission.
FINANCIAL STATEMENTS; ANNUAL REPORT ON FORM 10-K
The Company's 1996 Annual Report on Form 10-K, exclusive of exhibits,
including financial statements for fiscal year 1996, accompanies this Proxy
Statement. Additional copies of the Company's 1996 Annual Report on Form 10-K
may be obtained by writing to: The Presley Companies, Attn: Investor Relations,
19 Corporate Plaza, Newport Beach, CA 92660.
14
<PAGE> 18
PROXY
THE PRESLEY COMPANIES
PROXY FOR ANNUAL MEETING OF HOLDERS OF SERIES A
COMMON STOCK TO BE HELD ON
MAY 14, 1997
The Undersigned hereby constitutes and appoints William Lyon and Wade
H. Cable, and each of them, the true and lawful attorneys, agents and proxies
of the undersigned, with full power of substitution, to vote, as specified
herein, with respect to all the shares of Series A Common Stock of The Presley
Companies (the "Company"), standing in the name of the undersigned at the close
of business on March 27, 1997, at the Annual Meeting of Holders of Series A
Common Stock to be held May 14, 1997 and at any and all adjournments or
postponements thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 19
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD Please mark
OF DIRECTORS OF THE PRESLEY COMPANIES your vote as [X]
indicated in
this example.
(1) ELECTION OF SERIES A DIRECTORS: FOR all WITHHOLD
Nominees listed AUTHORITY
(except as marked to vote for all
to the contrary below) Nominees listed below.
[ ] [ ]
NOMINEES: Howard P. Allen and David M. Siegel
(INSTRUCTION: To withhold authority to vote for any individual Nominee,
write that Nominee's name in the space provided below.)
-----------------------------------------------------------------------
(2) RATIFICATION OF AUDITORS FOR AGAINST ABSTAIN
Ratification of the selection of Ernst & Young [ ] [ ] [ ]
LLP as the Company's auditors for the fiscal
year ending December 31, 1997.
IN THEIR DISCRETION THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTIONS TO THE CONTRARY ARE
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTOR OF THE NOMINEES
NAMED ABOVE AND FOR RATIFICATION OF AUDITORS.
Signature(s) Dated: , 1997
------------------------------- ------------
IMPORTANT: Please sign exactly as name appears at the left. Each joint owner
should sign. Executors, administrators, trustees, etc., should give full
title. If a corporation, please sign in full corporate name by authorized
officer. If a partnership, please sign in partnership name by authorized
person.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
THE PRESLEY COMPANIES
YOUR VOTE IS IMPORTANT TO THE COMPANY
PLEASE SIGN AND RETURN YOUR PROXY BY
TEARING OFF THE TOP PORTION OF THE SHEET
AND RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE
