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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
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Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as Permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
ENGLE HOMES, INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN 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)(1) 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:
(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 No.:
(3) Filing Party:
(4) Date Filed:
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<PAGE>
ENGLE HOMES LOGO
123 N.W. 13TH STREET, BOCA RATON, FLORIDA 33432
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 17, 2000
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To the Shareholders
of Engle Homes, Inc.:
NOTICE IS HEREBY GIVEN that the 2000 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 17, 2000, at the Company's
offices located at 123 N.W. 13th Street, Suite 300, Boca Raton, Florida for the
following purposes:
(1) To elect seven members to the Company's Board of Directors to
hold office until the Company's 2001 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 December 16, 1999 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 10, 2000
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.
<PAGE>
2000 ANNUAL MEETING OF SHAREHOLDERS
OF
ENGLE HOMES, INC.
-----------------------
PROXY STATEMENT
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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 2000 Annual Meeting of
Shareholders of the Company to be held on Thursday, February 17, 2000, 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 10, 2000. Shareholders
should review the information provided herein in conjunction with the Company's
1999 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 seven members to the Company's Board of
Directors to serve until the Company's 2000 Annual Meeting of
Shareholders or until their successors are duly elected and
qualified;
(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 (i) FOR the election of the seven nominees for director named
below under "Election of Directors; Nominees," and (ii) by the proxies in their
discretion upon any other proposals as may properly come before the Annual
Meeting. In the event a shareholder specifies a different choice by means of the
enclosed proxy, such shareholder's shares will be voted in accordance with the
specification so made.
<PAGE>
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on December 16,
1999 as the record date (the "Record Date") for determining shareholders of the
Company entitled to notice of, and to vote at, the Annual Meeting. As of the
Record Date, there were 11,050,996 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 are considered as shares present and entitled to vote for
purposes of determining the presence of a quorum and will be counted as votes
cast for purposes of determining the outcome of any matter submitted to the
shareholders for a vote, but are not counted as votes "for" or "against" any
matter. The inspectors of election will treat shares referred to as "broker or
nominee non-votes" (shares held by brokers or nominees as to which instructions
have not been received from the beneficial owners or persons entitled to vote
and the broker or nominee does not have discretionary voting power on a
particular matter) as shares that are present and entitled to vote for purposes
of determining the presence of a quorum. For purposes of determining the outcome
of any matter as to which the proxies reflect broker or nominee non-votes,
shares represented by such proxies will be treated as not present and not
entitled to vote on that subject matter and therefore will not be considered by
the inspectors of election when counting votes cast on the matter (even though
those shares are considered entitled to vote for quorum purposes and may be
entitled to vote on other matters). Accordingly, broker or nominee non-votes and
abstentions will not have the same effect as a vote against the election of any
director.
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<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........................................ 3,185,780 (2) 28.1%
Harry Engelstein....................................... 753,219 (3) 6.8
John A. Kraynick....................................... 65,455 (4) *
Lawrence R. Shawe...................................... 62,000 (5) *
David Shapiro ......................................... 324,238 (6) *
Paul M. Leikert........................................ 14,300 (7) *
Henry H. Fishkind, Ph.D................................ 1,400 *
Ronald J. Korn......................................... 7,499 *
Alan Shulman .......................................... 5,000 *
All directors and executive officers as a group (9
persons)............................................ 4,418,891 (8) 38.1%
FMR Corp. ............................................. 1,450,200 (9) 13.1%
82 Devonshire Street
Boston, Massachusetts 02109
Heartland Advisors, Inc................................ 1,166,700 (10) 10.6%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Franklin Resources, Inc................................ 579,900 (11) 5.3%
777 Mariners Island Boulevard
San Mateo, California 94404
Kennedy Capital Management, Inc........................ 575,200 (12) 5.2%
10829 Olive Blvd.
St. Louis, Missouri 63141
</TABLE>
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* Less than 1%
(1) Unless otherwise indicated, amounts are as of December 20, 1999 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 272,000 shares issuable upon exercise of outstanding
options.
(3) Includes 111,000 shares issuable upon exercise of outstanding options.
(4) Includes 54,900 shares issuable upon exercise of outstanding options.
(5) Includes 62,000 shares issuable upon exercise of outstanding options.
(6) Includes 22,000 shares issuable upon exercise of outstanding options and
248,640 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.
(7) Includes 12,000 shares issuable upon exercise of outstanding options.
(8) Includes an aggregate of 533,900 shares issuable upon exercise of
outstanding options and 248,640 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) This disclosure is based solely upon information set forth in a Schedule
13G/A dated February 1, 1999.
(10) This disclosure is based solely upon information set forth in a Schedule
13G/A dated February 4, 1999.
(11) This disclosure is based solely upon information set forth in a Schedule
13G dated January 22, 1999.
(12) This disclosure is based solely upon information set forth in a Schedule
13G dated February 5, 1999.
-3-
<PAGE>
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.
(REMAINDER OF PAGE INTENTIONALLY BLANK.)
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<PAGE>
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 seven 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 2001 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.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
- -------------------------------- --------- -----------------------------------------------------------
<S> <C> <C>
Alec Engelstein................. 69 Chairman of the Board, President and Chief Executive
Officer
Harry Engelstein................ 65 Executive Vice President, Chief Construction Officer and
Director
John A. Kraynick................ 45 Executive Vice President and Director
Lawrence R. Shawe............... 44 Senior Vice President-Sales and Marketing
David Shapiro................... 44 Vice President-Finance, Chief Financial Officer and
Director
Paul M. Leikert................. 43 Senior Vice President-Chief Accounting Officer
Henry H. Fishkind, Ph.D......... 50 Director
Ronald J. Korn.................. 59 Director
Alan L. Shulman ................ 67 Director
</TABLE>
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 37 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 32 years of experience in home construction.
JOHN A. KRAYNICK has served as a Vice President of the Company since
August 1986, was appointed Senior Vice President in July 1991 and appointed
Executive Vice President in December 1998. Mr. Kraynick is responsible for
administrative matters and coordinating the Company's compliance with Federal,
state and local regulatory requirements. Mr. Kraynick has over 21 years of
experience in the homebuilding industry.
-5-
<PAGE>
LAWRENCE R. SHAWE has served as the Company's Vice President-Sales and
Marketing since April 1986 and was appointed Senior Vice President Sales and
Marketing in December, 1998. 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 19 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, was appointed Vice
President-Finance in October 1991 and was appointed as a director on December
17, 1997. David Shapiro is Alec Engelstein's son-in-law.
PAUL M. LEIKERT has served as the Vice President-Chief of Accounting
since March 1994, in January of 1995, was appointed Vice President--Chief
Accounting Officer and appointed Senior Vice President-Chief Accounting Officer
in December, 1998. Mr. Leikert is a certified public accountant and has over 15
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 a director of Summit Properties.
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. Mr.
Korn serves as a director of Mansur Industries, Inc, which develops and produces
self-contained recycling industrial parts washers. He is also a director of
Horizon Bank, FSB, a Federal Savings Bank. Mr. Korn served as a director of
Magicworks Entertainment, Inc. from 1996 until September, 1998 when Magicworks
was acquired by a subsidiary of SFX Entertainment. Mr. Korn served as a director
of Vacation Break USA, Inc. ("Vacation Break") from December 1995 to December
1997 when Vacation Break merged with Fairfield Communities, Inc.
ALAN L. SHULMAN was appointed as a director of the Company on December
17, 1997. Mr. Shulman is currently a private investor. Mr. Shulman served on the
board of directors of Island National Bank in Palm Beach, Florida from its
inception in 1989 until April 1, 1997 when the bank was sold and currently
serves on the board of directors of CV Reit, Inc., a New York Stock Exchange
listed Company.
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, 1999, the Company's
Board of Directors held four meetings and took certain actions by written
consent. During the 1999 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 are the current members of the Audit
Committee, which held two meetings during the 1999 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
-6-
<PAGE>
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 1999 fiscal year. The Compensation
Committee reviews and approves the compensation of the Company's executive
officers and administers the Company's stock option plan and performance bonus
plan.
DIRECTOR COMPENSATION
The Company pays each director who is not an employee an annual
retainer of $16,000 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,
1999, 1998 and 1997, 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>
<CAPTION>
LONG TERM
COMPENSATION
-------------
ANNUAL COMPENSATION (1) NUMBER OF
FISCAL ------------------------- OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS GRANTED COMPENSATION (2)
- -------------------------------- ------ ---------- --------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Alec Engelstein 1999 $500,000 $500,000 - $5,353
Chairman of the Board, 1998 $370,833 $300,000 - $5,353
President and Chief 1997 $338,417 $193,750 - $4,700
Executive Officer
Harry Engelstein 1999 $293,333 $295,000 25,000 $2,725
Executive Vice President 1998 $254,167 $147,500 - $2,725
Chief Construction Officer 1997 $223,200 $105,000 - $2,775
John A. Kraynick 1999 $245,000 $300,000 20,000 $7,183
Executive Vice President 1998 $216,667 $227,500 80,000 $7,183
1997 $195,227 $105,000 - $6,381
Lawrence R. Shawe 1999 $230,000 $120,000 20,000 $8,006
Senior Vice President 1998 $175,000 $117,500 80,000 $8,006
Sales & Marketing 1997 $161,667 $ 60,000 - $5,936
Paul M. Leikert 1999 $205,000 $110,000 25,000 $2,256
Senior Vice President 1998 $175,000 $ 91,250 20,000 $2,947
Chief Accounting Officer 1997 $147,950 $ 41,250 - $6,400
</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.
(2) Represents contributions made by the Company to the Company's 401(k) plan.
-7-
<PAGE>
OPTIONS GRANTS IN LAST FISCAL YEAR
The following table sets forth information on option grants in fiscal
1999 to each of the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
FOR OPTION TERM (2)
------------------------------
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (1) FISCAL YEAR PER SHARE DATE 5% 10%
- ---------------------- ----------- ------------ --------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harry Engelstein 25,000 20.8% $10.88 3/15/09 $171,000 $433,500
John A. Kraynick 20,000 16.7% $10.88 3/15/09 $136,800 $346,800
Lawrence A. Shawe 20,000 16.7% $10.88 3/15/09 $136,800 $346,800
Paul M. Leikert 25,000 20.8% $10.88 3/15/09 $171,000 $433,500
</TABLE>
- ---------------
(1) All such options were granted under the Company's 1991 Stock Option Plan
and become exercisable at the rate of 20% per year commencing one year from
the date of grant, with full vesting occurring on the fifth anniversary of
the grant date.
(2) In accordance with the rules of the Commission, the potential realizable
values for such options shown in the table are based on assumed rates of
stock price appreciation of 5% and 10% compounded annually from the date
the respective options were granted to their expiration date. These assumed
rates of appreciation do not represent the Company's estimate or projection
of the appreciation of shares of Common Stock of the Company.
AGGREGATED STOCK OPTION EXERCISES AND FISCAL YEAR--END OPTION VALUE TABLE
The following table sets forth certain information concerning options
exercised by Named Executive Officers during the 1999 fiscal year and the
unexercised stock options held by the Named Executive Officers at the end of the
1999 fiscal year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NUMBER OF SHARES AT 1999 FISCAL YEAR AT 1999 FISCAL YEAR
ACQUIRED UPON END EXERCISABLE (E) END EXERCISABLE (E)
NAME EXERCISE VALUE REALIZED ($) UNEXERCISABLE (U) UNEXERCISABLE (U)(1)
- ----------------------- ------------------- ------------------- ----------------------- ---------------------
<S> <C> <C> <C> <C>
Alec Engelstein 0 0 272,000 (E) $36,160 (E)
8,000 (U) $ 9,040 (U)
Harry Engelstein 0 0 111,000 (E) $18,080 (E)
29,000 (U) $ 4,520 (U)
John A. Kraynick 0 0 54,900 (E) $10,057 (E)
88,000 (U) $ 4,520 (U)
Lawrence R. Shawe 0 0 62,000 (E) $18,080 (E)
88,000 (U) $ 4,520 (U)
Paul Leikert 0 0 12,000 (E) $ 9,040 (E)
43,000 (U) $ 2,260 (U)
</TABLE>
(1) Based on the closing price of the Common Stock on October 29, 1999 ($10.13)
as reported on the Nasdaq National Market System
-8-
<PAGE>
LONG-TERM INCENTIVE AND PENSION PLANS
The Company does not have any long-term incentive or defined benefit
pension plans.
EMPLOYMENT AGREEMENTS
Effective November 1, 1998, the Company entered into an employment
agreement with Alec Engelstein, the Chairman of the Board, President and Chief
Executive Officer of the Company (the "Employment Agreement"). The Employment
Agreement has a term of five years and expires in October 2003. The Employment
Agreement provides for an annual base salary to Mr. Engelstein of $500,000 in
the first year, subject to increases in the discretion of the Compensation
Committee. In addition, the base salary shall be increased, but shall not be
decreased, by that percentage by which the Consumer Price Index, for the Palm
Beach, Florida area for the immediately preceding calendar year exceeds such
index for the next preceding calendar year.
The Employment Agreement provides for an annual bonus to Mr. Engelstein
based on objective performance standards. Mr. Engelstein will be eligible to
receive bonuses for each fiscal year of the Company only in the event that the
Company's Adjusted Pre-Tax Income (as defined below) equals or exceeds 10% of
the Average Stockholders' Equity (as defined below), for such fiscal year (the
"Goal"). If the Goal is met, Mr. Engelstein shall receive a bonus for such
fiscal year equal to the sum of (i) 1% of 10% of the Company's Adjusted Pre-Tax
Income for the year plus (ii) 2.5% of the amount by which the Adjusted Pre-Tax
Income exceeds 10% of the Adjusted Pre-Tax Income for such fiscal year.
"Adjusted Pre-Tax Income" means the Company's income or loss before income
taxes, extraordinary gains or losses and cumulative effect of accounting changes
plus any amounts paid or accrued for bonuses payable to Mr. Engelstein pursuant
to the Employment Agreement. "Average Stockholders' Equity" means the average of
the Company's year-end stockholders' equity for the two fiscal years preceding
the fiscal year of the Company for which the bonus is being determined.
Mr. Engelstein may elect to receive payment of all or any portion of
the Incentive Compensation payable for any fiscal year in the form of cash or
shares of Common Stock of the Company, valued based upon the average closing
price for the Company's Common Stock as reported on the Nasdaq National Market
during the last calendar month of the fiscal year for which the bonus is being
determined. The Incentive Compensation shall be paid to Mr. Englestein within
two and one-half months after the end of the fiscal year for which it is
payable.
At the 1999 annual meeting of the Company, the shareholders approved
the material terms of the performance goals relating to the incentive
compensation provisions of the Employment Agreement. Therefore, all incentive
compensation paid to Mr. Engelstein pursuant to the Employment Agreement will be
deductible by the Company for purposes of Section 162(m) of the Internal Revenue
Code or 1986, as amended. The Employment Agreement also contains certain
non-competition covenants and covenants against solicitation of clients and
employees for a competitive business and provides for certain payments to Mr.
Engelstein upon his termination.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Securities and Exchange Commission, the
Compensation Committee of the Board of Directors of the Company is required to
provide a report explaining the rationale and considerations that led to
fundamental compensation decisions affecting the Company's executive officers
(including the Named Executive Officers) during the past fiscal year.
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.
-9-
<PAGE>
Fiscal 1999 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 1998. The Compensation Committee's determination of fiscal
1999 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 1998 fiscal
year, compensation levels at competitive companies, the Company's historical
compensation levels, and the Chief Executive Officer's recommendations regarding
fiscal 1999 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.
It is the Compensation Committee's practice periodically to grant stock
options to executive officers and other key management employees. The
Compensation Committee believes that stock options serve to link closely
management and shareholder interests and motivate executives to make long-term
decisions and investments that will serve to increase the long-term total return
to shareholders. Vesting provisions also serve to provide long-term incentives
to retain key executive officers. Awards of stock options for executive officers
are intended to be consistent with competitive practice, with the ultimate value
received by option holders directly linked to increases in the Company's stock
price. In determining the grant of stock options, the Compensation Committee
considers various subjective factors primarily relating to the responsibilities
of the individual officers, and also to their expected future contributions and
the number of shares owned by the officer or which continue to be subject to
vesting under outstanding options. During fiscal 1999 stock options were granted
to the Named Executive Officers listed in the Options Grant Table above and to
certain other key management employees.
In December 1998, the Committee adopted, and in February 1999 the
shareholders approved, the Employment Agreement which governs the terms and
conditions of the employment of Alec Engelstein, the Company's Chairman of the
Board, President and Chief Executive Officer, including Alec Engelstein's salary
and bonus for fiscal 1999. The Employment Agreement is designed to provide Mr.
Engelstein with annual incentive compensation based on achievement of specific
performance objectives linked to shareholder return and provide for exemption
from limits on the ability of the Company to deduct executive compensation.
Accordingly, Mr. Engelstein's base salary for fiscal 1999 was determined
pursuant to the terms of the Employment Agreement. The Compensation Committee
considered the Company's fiscal 1998 earnings and other performance measures in
determining Alec Engelstein's bonus, but there was no specific relationship or
formula by which Mr. Engelstein's bonus compensation was tied to Company
performance. For fiscal 1999 and years subsequent, the bonus will be determined
based on the goals set forth in the Employment Agreement.
Henry H. Fishkind, Ph.D.
Ronald J. Korn
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Henry H. Fishkind, Ph.D. and
Ronald J. Korn. No member of the Compensation Committee was during the last
fiscal year, nor has ever been, an officer or employee of the Company.
-10-
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return
on the Company's Common Stock from October 29, 1994 through October 31, 1999,
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).
[GRAPH OMITTED]
Comparison of Cumulative Total Return
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
10/94 10/95 10/96 10/97 10/98 10/99
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
|X| Engle Homes 100 104.2 84.9 184.9 160.5 128.3
- ----------------------------------------------------------------------------------------------------------------------
/bullet/ CRSP Index for Nasdaq Stock Market (US Companies) 100 134.6 158.9 209.2 234.1 390.8
- ----------------------------------------------------------------------------------------------------------------------
/bullet/ CRSP Index for General Building Contractors -
Residential Buildings 100 106.7 112.3 135.8 140.5 97.2
- -------------------------------------------------------------- -------- --------- -------- -------- --------- --------
</TABLE>
Notes:
A. The lines represent 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 on 10/31/94.
-11-
<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, 1999. 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, 2000. One or more of
the representatives of BDO Seidman, LLP 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 2001 Annual Meeting of Shareholders
must deliver a proposal in writing to the Company's principal executive offices
no later than September 18, 2000.
By Order of The Board of Directors
ALEC ENGELSTEIN
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Boca Raton, Florida
January 10, 2000
-12-
<PAGE>
PROXY FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
of
ENGLE HOMES, INC.
123 NW 13th Street, Suite 300
Boca Raton, Florida 33432
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
COMMON STOCK
The undersigned holder of Common Stock of Engle Homes, Inc., a Florida
Corporation, hereby appoints Alec Engelstein and David Shapiro, and each of
them, as proxies for the undersigned, each with full power of substitution, to
act for the undersigned and to vote, as designated below, all shares of stock of
the Company and that the undersigned is entitled to vote at the 2000 Annual
Meeting of Shareholders of the Company, to be held on Thursday, February 17,
2000 at 11:00 a.m. local time at the Company's offices located at 123 N.W. 13th
Street, Suite 300, Boca Raton, Florida, and at any adjournment(s) or
postponements(s) thereof.
The Board of Directors unanimously recommends a vote FOR the election
of all the director nominees listed in proposal (1) and FOR approval of proposal
(2) below.
(1) Election of Alec Engelstein, Harry Engelstein, John A. Kraynick,
David Shapiro, Henry Fishkind, Ph.D., Ronald Korn and Alan L. Shulman as
directors of the Company.
[ ] VOTE FOR all nominees listed above, except vote withheld from the
following nominees(s) (if any).
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[ ] VOTE WITHHELD from all nominees.
(2) The Proxies are authorized to vote in their discretion upon such other
business as may properly come before the Annual Meeting and any
adjournments or postponements thereof.
(SEE REVERSE SIDE)
<PAGE>
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" THE ELECTION OF ALL DIRECTOR NOMINEES LISTED IN PROPOSAL (1) ABOVE.
The undersigned hereby acknowledges receipt of (i) the Notice of Annual
Meeting and related Proxy Statement, and (ii) the Company's 2000 Annual Report
to Shareholders.
Dated: , 2000
---------------------
- -------------------------------
(Signature)
- --------------------------------
(Signature if held jointly)
IMPORTANT: Please sign exactly as your name appears hereon and mail it promptly
even though you plan to attend the meeting. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign fill corporate name by president or other authorized officer. If a
partnership name, by authorized person.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
