SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
---------------------
SCHEDULE 14A INFORMATION
Proxy Statement
(Pursuant to Section 14(a) of the Securities
Exchange Act of 1934)
-----------------------
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Rule 240.14a-11(c) or Rule
240.14a-12
ENGLE HOMES, INC.
(Name of Registrant as specified in its Charter)
ENGLE HOMES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] 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 0-11:1
(4) Proposed maximum aggregate value of
transaction:
(5) Total Fee paid:
[ ] 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 No.:
(3) Filing Parties:
(4) Date Filed:
<PAGE>
ENGLE HOMES, INC.
------------------
123 N.W. 13th Street, Boca Raton, Florida 33432
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on February 27, 1997
----------------------------
To the Shareholders
of Engle Homes, Inc.:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders (the
"Annual Meeting") of Engle Homes, Inc., a Florida corporation (the "Company"),
will be held at 11:00 a.m., local time, on Thursday, February 27, 1997, at the
Company's offices located at 123 N.W. 13th Street. Suite 300, Boca Raton,
Florida for the following purposes:
(1) To elect five members to the Company's Board of Directors
to hold office until the Company's 1998 Annual Meeting of
Shareholders or until their successors are duly elected
and qualified;
(2) To transact such other business as may properly come
before the Annual Meeting and any adjournments or
postponements thereof.
The Board of Directors has fixed the close of business on January 20,
1997 as the record date for determining those shareholders entitled to notice
of, and to vote at, the Annual Meeting and any adjournments or postponements
thereof.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors
ALEC ENGELSTEIN
Chairman of the Board, President
and Chief Executive Officer
Boca Raton, Florida
January 23, 1997
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. ALL SHAREHOLDERS ARE RESPECTFULLY URGED TO EXECUTE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO
EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY
AND VOTE THEIR SHARES IN PERSON.
1997 ANNUAL MEETING OF SHAREHOLDERS
OF
ENGLE HOMES, INC.
------------------
PROXY STATEMENT
------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Engle Homes, Inc., a Florida corporation (the
"Company"), of proxies from the holders of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), for use at the 1997 Annual Meeting
of Shareholders of the Company to be held on Thursday, February 27, 1997, or at
any adjournment(s) or postponement(s) thereof ("the Annual Meeting"), pursuant
to the foregoing Notice of Annual Meeting of Shareholders.
The approximate date that this Proxy Statement and the enclosed form of
proxy are first being sent to shareholders is January 24, 1997. Shareholders
should review the information provided herein in conjunction with the Company's
1996 Annual Report to Shareholders which accompanies this Proxy Statement. The
Company's principal executive offices are located at 123 N.W. 13th Street,
Suite 300, Boca Raton, Florida 33432, and its telephone number is
(561) 391-4012.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers and other custodians,
nominees and fiduciaries to forward copies of the proxy material to their
principals and to request authority for the execution of proxies. The Company
may reimburse such persons for their expenses in doing so.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and vote
upon the following matters:
(1) The election of five members to the Company's Board of
Directors to serve until the Company's 1998 Annual
Meeting of Shareholders or until their successors are
duly elected and qualified;
<PAGE>
(2) Such other business as may properly come before the
Annual Meeting, including any adjournments or
postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted for the election of the five nominees for director named below.
In the event a shareholder specifies a different choice by means of the
enclosed proxy, his shares will be voted in accordance with the specification
so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on January 20, 1997
as the record date (the "Record Date") for determining shareholders of the
Company entitled to notice and to vote at the Annual Meeting. As of the Record
Date, there were 6,929,200 shares of Common Stock issued and outstanding, all
of which are entitled to be voted at the Annual Meeting. Each share of Common
Stock is entitled to one vote on each matter submitted to shareholders for
approval at the Annual Meeting. Shareholders do not have the right to cumulate
their votes for directors.
The attendance, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Directors will be elected by a plurality of
the votes cast by the shares of Common Stock represented in person or by proxy
at the Annual Meeting. Any other matter that may be submitted to a vote of the
shareholders will be approved if the number of shares of Common Stock voted in
favor of the matter exceeds the number of shares voted in opposition of the
matter unless such other matter is one for which a greater vote is required by
law or by the Company's Articles of Incorporation or Bylaws. If less than a
majority of outstanding shares entitled to vote are represented at the Annual
Meeting, a majority of the shares so represented may adjourn the Annual Meeting
to another date, time or place, and notice need not be given of the new date,
time or place if the new date, time or place is announced at the meeting before
an adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more
inspectors of election for the meeting. Such inspector(s) shall determine the
number of shares of Common Stock represented at the Annual Meeting, the
existence of a quorum and the validity and effect of proxies, and shall
receive, count and tabulate ballots and votes and determine the results
thereof. Abstentions will be considered as shares present and entitled to vote
at the Annual Meeting and will be counted as votes cast at the Annual Meeting,
but will not be counted as votes cast for or against any given matter.
A broker or nominee holding shares registered in its name, or in the name
of its nominee, which are beneficially owned by another person and for which it
has not received instructions as to voting from the beneficial owner, may have
discretion to vote the beneficial owner's shares with respect to the election
of directors and other matters addressed at the Annual Meeting. Any such
shares which are not represented at the Annual Meeting either in person or by
Proxy will not be considered as shares present at the Annual Meeting, and will
not be considered to have cast votes on any matters addressed at the Annual
Meeting.<PAGE>
SECURITY OWNERSHIP
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock by (i) each of the "Named Executive
Officers" (as defined below in "Executive Compensation - Summary Compensation
Table"), (ii) each other director of the Company, (iii) all directors and
executive officers of the Company as a group and (iv) each person known by the
Company to be a beneficial owner of more than 5% of the Common Stock.
<TABLE>
<CAPTION>
Percent of
Amount and Nature Outstanding
Name of Beneficial Owner: of Beneficial Ownership(1) Shares
- ------------------------ -------------------------- --------------
<S> <C> <C>
Alec Engelstein 3,186,655 (2) 44.4%
Harry Engelstein 745,219 (3) 10.6%
John A. Kraynick 40,000 (4) *
Lawrence R. Shawe 40,500 (5) *
Paul M. Leikert 6,300 (6) *
Henry H. Fishkind, Ph.D 1,400 *
Ronald J. Korn 11,000 (7) *
All directors and executive
officers as a group (8 persons) 4,364,799 (8) 59.1%
Heartland Advisors, Inc.
790 North Milwaukee Street
Milwaukee, Wisconsin 53202 1,044,200 (9) 15.1%
Guardian Life Insurance Company
of America
201 Park Avenue South
New York, New York 10003 403,909(10) 5.4%
- -------------
<TABLE/>
* Less than 1%
(1) Unless otherwise indicated, amounts are as of December 31, 1996 and
each person has sole voting and investment power with respect to
such shares.
(2) Includes 232,468 shares held of record by Sheila Engelstein, Alec
Engelstein's wife, and 256,000 shares issuable upon exercise of
outstanding options.
(3) Includes 103,000 shares issuable upon exercise of outstanding options.
(4) Includes 38,000 shares issuable upon exercise of outstanding options.
(5) Includes 38,000 shares issuable upon exercise of outstanding options.
(6) Includes 4,000 shares issuable upon exercise of outstanding options.
(7) Includes 5,000 shares subject to issuance upon conversion of the
Company's 7% Convertible Subordinated Notes.
(8) Includes an aggregate of 453,000 shares issuable upon exercise of
outstanding options, 5,000 shares issuable upon conversion of the
Company's 7% Convertible Subordinated Notes and 300,950 shares held
in irrevocable trusts for the benefit of Alec Engelstein's and Harry
Engelstein's children and grandchildren. David Shapiro or his wife,
is a trustee of such trusts with shared voting and dispositive
power.
(9) The indicated amount is as of December 31, 1995 and includes
1,044,200 shares of Common Stock beneficially owned by Heartland
Advisors, Inc. ("Heartland Advisors"). Heartland Advisors has sole
dispositive power over 933,100 such shares. This disclosure of
Heartland Advisors' beneficial ownership is based solely upon
information set forth in Heartland Advisors' Schedule 13G dated
February 15, 1996.
(10) The indicated amount is as of December 31, 1995 and includes 403,909
shares subject to issuance upon conversion of $5.65 million in
aggregate principle amount of the Company's 7% Convertible Subordinated
Notes beneficially owned by Guardian Life Insurance Company of America
("Guardian"). Guardian has sole voting and dispositive power over all
such shares.
This disclosure of Guardian's beneficial ownership is based solely upon
information set forth in Guardian's Schedule 13G dated February
14,1996.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10
percent of the Company's outstanding Common Stock, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports
of changes in ownership of Common Stock. Such persons are required by SEC
regulations to furnish the Company with copies of all such reports they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to
its officers, directors and greater than 10 percent beneficial owners have been
complied with.
ELECTION OF DIRECTORS; NOMINEES
The Company's Articles of Incorporation provide that the number of
directors constituting the Company's Board of Directors shall not be less than
three nor more than nine, as determined in the matter provided by the Company's
Bylaws. The Company's Bylaws provide that the number of directors shall be
fixed from time to time by resolution of the Board of Directors. The Board of
Directors has fixed at five the number of directors that will constitute the
Board for the ensuing year. Each director elected at the Annual Meeting will
serve for a term expiring at the Company's 1998 Annual Meeting of Shareholders
or when his successor has been duly elected and qualified.
Each of the current members of the Board of Directors has been nominated
by the Company to be re-elected as a director at the Annual Meeting. The Board
of Directors has no reason to believe that any nominee will refuse or be unable
to accept election; however, in the event that one or more nominees are unable
to accept election or if any other unforeseen contingencies should arise, each
proxy that does not direct otherwise will be voted for the remaining nominees,
if any, and for such other persons as may be designated by the Board of
Directors.
<PAGE>
MANAGEMENT
Executive Officers and Directors
The executive officers and directors of the Company are as follows:
Name Age Position with Company
- ---- --- ---------------------
Alec Engelstein 67 Chairman of the Board, President and Chief
Executive Officer
Harry Engelstein 62 Executive Vice President, Chief Construction
Officer and Director
John A. Kraynick 42 Senior Vice President and Director
Lawrence R. Shawe 41 Vice President, Sales and Marketing
David Shapiro 41 Vice President, Finance and Chief Financial
Officer
Paul M. Leikert 41 Vice President, Chief Accounting Officer
Henry H. Fishkind, Ph.D 47 Director
Ronald J. Korn 56 Director
Alec Engelstein, a co-founder and Chairman of the Board of the Company,
has served as its President and Chief Executive Officer since its organization
in August 1982. Alec Engelstein has over 34 years of experience in the
homebuilding industry and has been actively engaged as a homebuilder in
southeast Florida since 1969.
Harry Engelstein, a co-founder and director of the Company and Alec
Engelstein's brother, has served as Executive Vice President and Chief
Construction Officer since the Company's inception in August 1982. Harry
Engelstein has over 29 years of experience in home construction.
John A. Kraynick has served as a Vice President of the Company since
August 1986 and was appointed Senior Vice President in July 1991. Mr. Kraynick
is responsible for administrative matters and coordinating the Company's
compliance with Federal, state and local regulatory requirements. Mr. Kraynick
has over 18 years of experience in the homebuilding industry.
Lawrence R. Shawe has served as the Company's Vice President, Sales and
Marketing since April 1986. Mr. Shawe joined the Company in April 1984 and
since such time has been responsible for the Company's sales and marketing
efforts. Mr. Shawe has over 16 years of experience in the homebuilding
industry.
David Shapiro joined the Company in June 1991, has served as the Company's
Chief Financial Officer since July 1991, and was appointed Vice President,
Finance in October 1991. From January 1986 until June 1991, he served as vice
president of a privately held retail clothing company located in West Palm
Beach, Florida. David Shapiro is Alec Engelstein's son-in-law.
Paul M. Leikert has served as the Vice President, Chief of Accounting
since March 1994 and in January of 1995, was appointed Vice President, Chief
Accounting Officer. Mr. Leikert is a certified public accountant and has over
12 years of experience in the homebuilding industry.
Henry H. Fishkind, Ph.D., has served as a director of the Company since
October 1991 and is a member of the Compensation and Audit Committees of the
Board of Directors. Dr. Fishkind has served as President of Fishkind &
Associates, Inc., an economic and financing consulting firm based in Orlando,
Florida, since 1988. From January 1984 until December 1987, Dr. Fishkind
served as president of M.G. Lewis Econometrics, Inc., the research subsidiary
of an investment banking firm based in Winter Park, Florida. Dr. Fishkind
also serves as editor of Econocast, a quarterly economic forecast, since
1984, as a director of the ABT family of mutual funds, registered investment
companies, from 1986 through 1995, and as a director of Summit Properties, a
NYSE REIT from March 1995 to present.
Ronald J. Korn, chairman of the Compensation and Audit Committees of the
Board of Directors, has served as a director of the Company since October 1991.
Since July 1991, Mr. Korn has served as President of Ronald Korn Consulting, a
business consulting firm, and as Chairman of the Board of Carole Korn
Interiors, Inc., an interior design firm. From August 1985 until June 1991,
Mr. Korn served as the managing partner of the Miami office of KPMG Peat
Marwick, a nationally recognized firm of independent public accountants. Since
December 1995, Mr. Korn has been a director of Vacation Break USA, Inc., which
develops, markets, operates and finances vacation ownership interest in premium
resort properties, the common shares of which are traded on the NASDAQ National
Market System. Mr. Korn also serves as a director of Magicworks Entertainment,
Inc., since December 1996 which acquires domestic and international stage and
ancillary rights to theatrical productions, the common shares of which are
traded on the Nasdaq National Market.
There are no arrangements or understandings with respect to the selection
of officers or directors.
Meetings and Committees of the Board of Directors
During the Company's fiscal year ended October 31, 1996, the Company's
Board of Directors held four meetings and took certain actions by written
consent. During the 1996 fiscal year, no director attended fewer than 75% of
the aggregate of (i) the number of meetings of the Board of Directors held
during the period he served on the Board, and (ii) the number of meetings of
committees of the Board of Directors held during the period he served on such
committees.
The only committees of the Board of Directors are the Audit Committee and
the Compensation Committee. The Board does not have a nominating or similar
committee.
Messrs. Fishkind and Korn and the current members of the Audit Committee,
which held two meetings during the 1996 fiscal year. The duties and
responsibilities of the Audit Committee include (a) recommending to the Board
of Directors the appointment of the Company's auditors and any termination of
engagement, (b) reviewing the plan and scope of audits, (c) reviewing the
Company's significant accounting policies and internal controls, (d) having
general responsibility for all related auditing matters, and (e) reporting its
recommendations and findings to the full Board of Directors.
Messrs. Fishkind and Korn are the current members of the Compensation
Committee, which held one meeting during the 1996 fiscal year. The
Compensation Committee reviews and approves the compensation of the Company's
executive officers and administers the Company's stock option plan.
<PAGE>
Director Compensation
The Company pays each director who is not an employee an annual retainer
of $12,000 and a $500 fee for each meeting of the Board of Directors attended.
The Company reimburses all directors for expenses incurred in connection with
their activities as directors.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth, for the fiscal years ended October 31,
1996, 1995 and 1994, respectively, the aggregate compensation paid to the
Company's Chief Executive Officer and the four other most highly compensated
officers of the Company (the Chief Executive Officer and such other executive
officers are sometimes referred to herein as the "Named Executive Officers").
</TABLE>
<TABLE>
<CAPTION>
Long term
Compensation
Number
Name and Fiscal Annual Compensation (1) of Options All
Principal Position Year Salary Bonus Granted Other
Compensation
<S> <C> <C> <C> <C> <C>
Alec Engelstein
Chairman of the Board, 1996 $279,583 $175,000 - $4,600
President and Chief 1995 $266,667 $162,500 40,000 $1,500
Executive Officer 1994 $222,981 $ 62,500 - $1,500
Harry Engelstein
Executive Vice President 1996 $213,500 $ 90,000 - $2,675
and Chief Construction 1995 $208,333 $ 86,250 20,000 $1,500
Officer 1994 $201,281 $ 37,500 - $1,500
John A. Kraynick
Senior Vice President 1996 $174,978 $ 90,000 - $6,281
1995 $166,667 $ 67,500 20,000 $1,500
1994 $161,949 $ 75,000 - $1,500
Lawrence R. Shawe
Vice President, Sales & 1996 $199,800 $ 30,000 - $5,836
Marketing 1995 $183,067 $ 22,500 20,000 $1,500
1994 $189,484 $ 30,000 - $1,500
Paul M. Leikert
Vice President, Chief 1996 $137,250 $ 30,000 - $6,300
Accounting Officer 1995 $132,500 $ 22,500 10,000 $1,500
1994 $123,705 $ 20,000 - $1,500
</TABLE>
- -------------------
(1) The column for "Other Annual Compensation" has been omitted because
there is no compensation required to be reported in such column. The
aggregate amount of perquisites and other personal benefits provided to
each Named Executive Officer is less than 10% of the total of annual
salary and bonus of such officer.
Aggregated Fiscal Year-End Option Value Table
The following table sets forth certain information concerning unexercised
stock options held by the Named Executive Officers at the end of the 1996
fiscal year. No stock options were exercised by any of the Named Executive
Officers during the 1996 fiscal year.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options at 1996 Options at 1995
Fiscal Year End Fiscal Year End
Exercisable (E) Exercisable (E)
Name Unexercisable (U) Unexercisable (U)
- ------------ ----------------- -----------------
<S> <C> <C>
Alec Engelstein 200,000 (E) $0 (E)
80,000 (U) 0 (U)
Harry Engelstein 80,000 (E) 0 (E)
35,000 (U) 0 (U)
John A. Kraynick 28,000 (E) 0 (E)
22,000 (U) 0 (U)
Lawrence R. Shawe 28,000 (E) 0 (E)
22,000 (U) 0 (U)
Paul Leikert 2,000 (E) 0 (E)
8,000 (U) 0 (U)
</TABLE>
Long-Term Incentive and Pension Plans
The Company does not have any long-term incentive or pension plans.
<PAGE>
Compensation Committee Report on Executive Compensation
The three primary components of the Company's executive compensation are
salary, bonus and stock options. These components are designed to facilitate
fulfillment of the compensation objectives of the Company's Board of Directors
and Compensation Committee, which objectives include (i) attracting and
retaining competent management, (ii) rewarding management for short and long
term accomplishments, (iii) aligning the interests of management with those of
the Company's shareholders, and (iv) relating management compensation to the
achievement of Company goals and the Company's performance.
Fiscal 1996 salary and bonus for the Company's executive officers were
determined and approved by the Compensation Committee of the Company's Board of
Directors in December 1995. No Stock Options were granted to any executive
officers during fiscal 1996.
The Compensation Committee's determination of fiscal 1996 salary and bonus
for the Company's executive officers other than Alec Engelstein was made after
reviewing and considering a number of factors, including each officer's level
of job responsibility, each officer's level of performance (with respect to
specific areas of responsibility and on an overall basis), achievement of
Company goals, Company performance during the 1995 fiscal year, compensation
levels at competitive companies, the Company's historical compensation levels,
and the Chief Executive Officer's recommendations regarding fiscal 1996
compensation. Although Company performance was one of the factors considered,
the Compensation Committee's decisions were based upon an overall review of
the relevant factors, and there was no specific relationship or formula by
which compensation was tied to Company performance. The Compensation
Committee's decisions were generally in accordance with the Chief Executive
Officer's recommendations.
The principal factor considered by the Compensation Committee in
determining the fiscal 1996 salary and bonus for Alec Engelstein, the Chairman
of the Board, President and Chief Executive Officer of the Company was the
analysis of the compensation of chief executive officers of public companies
within the homebuilding industry and public companies similar in size to the
Company (and it was the view of the Committee that Alec Engelstein's combined
fiscal 1996 salary and bonus was modest in comparison). The Compensation
Committee also considered the Company's fiscal 1995 earnings and other
performance measures in determining Alec Engelstein's salary and bonus, but
there was no specific relationship or formula by which Mr. Engelstein's
compensation was tied to Company performance.
Henry H. Fishkind, Ph.D
Ronald J. Korn
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return
on the Company's Common Stock from January 21, 1992 through October 31, 1996,
based on the market price of Common Stock and assuming reinvestment of
dividends, with (i) the Nasdaq Stock Market index prepared by the Center for
Research in Security Prices ("CRSP"), and (ii) CRSP's index for General
Building Contractors, Residential Buildings (SIC Industry Group No. 152).
<TABLE>
<CAPTION>
Comparison of Cumulative Total Return
01/21/92 10/30/92 10/29/93 10/31/94 10/31/95 10/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Engle Homes, Inc. 100 78 98 73 76 62
CRSP Index for Nasdaq
Stock Market (US Companies) 100 101 129 130 176 208
CRSP Index for General
Building Contractors-
Residential Buildings 100 74 137 86 92 97
</TABLE>
Notes:
A. The table represents annual index levels derived from
compounded daily returns that include all dividends.
B. If the annual interval, based on the fiscal year-end, is not
a trading day, the preceding trading day is used.
C. The index level for all series was set to 100.0 on 01/21/92,
the first trading day for the Common Stock of Engle Homes, Inc.
<PAGE>
CERTAIN TRANSACTIONS
In September 1989, the Company sold to Embassy Lakes Shopping Venture, a
Florida general partnership (the "Venture"), a 16.8 acre parcel of land for
approximately $5.1 million. The tract was acquired by the Company in October
1987 and had a book value of $4.3 million at the time of sale. Alec Engelstein
and Harry Engelstein beneficially owned 24% and 16% of the Venture's
partnership interests respectively. In connection with such sale, the Company
took back a second mortgage in the amount of approximately $811,000. At
October 31, 1995, the Company had deferred income of approximately $807,000
from the sale transaction. The Company effected the sale to the Venture
primarily because of the Company's lack of expertise in developing large
shopping plazas and management's desire to concentrate the Company's resources
in the homebuilding operations. On October 25, 1996, the Venture sold the
shopping center and the Company recognized the gain in accordance with
generally accepted accounting principles. The mortgage balance of $671,758 was
repaid in full upon the Venture's sale of the property.
In March 1990, the Company sold twelve units in its Alahambra Court
condominium project in Orlando, Florida to Spearhead Investment Corporation,
("Spearhead"), a Florida corporation now owned by David Shapiro, the Company's
Vice President-Finance and Chief Financial Officer. Spearhead's $420,000
commercial first mortgage was guaranteed by the Company at the time of sale
and such guaranty remains in effect. At October 31, 1996, the outstanding
balance of such mortgage was $220,000.
In October 1991, in connection with the Company's initial public offering, the
Company entered into a Registration Rights Agreement with the Company's
principle shareholders, Alec Engelstein, Sheila Engelstein and Harry Engelstein
(collectively the "Engelsteins"). Under such agreement, if the Company
proposes to register any of its securities (other than in connection with
employee benefit plans or under certain reclassifications, mergers,
consolidations or acquisitions), the Company will be required to include in the
filing, and to use its best efforts to register, the number of shares of Common
Stock as to which such shareholders request registration. Such registration
rights are subject to certain conditions and limitations, including the right
of the Company to reduce pro rata the amount of Common Stock of such
shareholder included in an underwritten public offering if the managing
underwriter determines that the aggregate requested participation will
adversely affect the offering or the offering price. The Company has agreed
that, upon the request of Alec Engelstein (or his legal representative) at any
time through January 1998, the Company will register all or any portion of the
Common Stock owned by the Engelsteins.
During Fiscal 1996, Alec Engelstein, who owns $5.0 million principle amount of
the Company's 11 3/4 % Senior Notes due 2000, received aggregate interest
payments of $587,500 on such notes.
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of BDO Seidman, LLP independent public accountants, served as the
Company's independent public accountants for the fiscal year ended October 31,
1996. The Board of Directors, on the recommendation of the Company's Audit
Committee, has selected BDO Seidman, LLP as the Company's independent public
accountants for the current fiscal year ending October 31, 1997. One or more
of the representatives of BDO Seidman are expected to be present at the Annual
Meeting, will have the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions from
shareholders.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the
Annual Meeting, the persons named in the accompanying proxy will vote proxies
as in their discretion they may deem appropriate, unless they are directed by a
proxy to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a shareholder intending to present a proposal to be included in the
Company's proxy statement for the Company's 1998 Annual Meeting of Shareholders
must deliver a proposal in writing to the Company's principal executive offices
no later than September 15, 1997.
By Order of The Board of Directors
ALEC ENGELSTEIN
Chairman of the Board, President
and Chief Executive Officer
Boca Raton, Florida
January 23, 1997
