ctrl + v 5,24 is an empty box
ctrl + v 5,25 is a marked box.UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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 o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
x Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
SUNDANCE HOMES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
o 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 (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:
o Fee paid previously with preliminary materials.
o 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:
DOCUMENT #: CHGO02A (72020-00001-3) 286285.1;DATE:01/23/97/TIME:20:56
[SUNDANCE LOGO]
January 31, 1997
To the Shareholders of
SUNDANCE HOMES, INC.:
You are cordially invited to attend the Annual Meeting of
Shareholders of Sundance Homes, Inc. to be held at the Woodfield
Financial Center, 1375 East Woodfield Road, Suite 540,
Schaumburg, Illinois 60173, on Tuesday, March 4, 1997 at
9:00 a.m., local time.
The attached Notice of Annual Meeting and Proxy Statement
fully describe the formal business to be transacted at the Annual
Meeting, which includes the election of two directors as the
Class III directors of the Company.
Directors and officers of the Company will be present to
help host the Annual Meeting and to respond to any questions that
our shareholders may have. By attending the Annual Meeting, you
will have an opportunity to hear the plans for our Company's
future, to meet your officers and directors and to participate in
the business of the Annual Meeting. If it is not possible for
you to attend, please return the enclosed Proxy immediately to
ensure that your shares will be voted.
We look forward to seeing you at the Woodfield Financial
Center, 1375 East Woodfield Road, Suite 540, Schaumburg, Illinois
60173, on Tuesday, March 4, 1997 at 9:00 a.m., local time.
Sincerely,
/s/ MAURICE SANDERMAN
MAURICE SANDERMAN
Chairman and Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 4, 1997
To the Shareholders of
SUNDANCE HOMES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders (the "Annual Meeting") of Sundance Homes, Inc. (the
"Company") will be held at the Woodfield Financial Center, 1375
East Woodfield Road, Suite 540, Schaumburg, Illinois 60173 on
Tuesday, March 4, 1997, at 9:00 a.m., local time. A Proxy and a
Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the following purposes:
(1) To elect two directors as the Class III
directors of the Company.
(2) To transact such other business as may
properly come before the Annual Meeting or any
adjournments thereof.
The close of business on January 24, 1997 has been fixed as
the record date for determining shareholders entitled to notice
of and to vote at the Annual Meeting or any adjournments thereof.
For a period of at least ten days prior to the Annual Meeting, a
complete list of shareholders entitled to vote at the Annual
Meeting shall be open to the examination of any shareholder
during ordinary business hours at the offices of the Company at
1375 East Woodfield Road, Suite 600, Schaumburg, Illinois 60173.
Information concerning the matters to be acted upon at the
Annual Meeting is set forth in the accompanying Proxy Statement.
By Order of the Board of Directors,
DAVID APTER
Corporate Secretary
Schaumburg, Illinois
January 31, 1997
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE ANNUAL MEETING
IN PERSON ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
SUNDANCE HOMES, INC.
1375 East Woodfield Road
Suite 600
Schaumburg, Illinois 60173
(847) 255-5555
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
March 4, 1997
The accompanying Proxy is solicited by the Board of
Directors of Sundance Homes, Inc. (the "Company") for use at the
Annual Meeting of Shareholders to be held on March 4, 1997, or at
any adjournments thereof (the "Annual Meeting"). Giving the
Proxy will not in any way affect a shareholder's right to attend
the Annual Meeting and to vote in person. The approximate date
on which this Proxy Statement and the accompanying Proxy will be
mailed to shareholders is January 31, 1997.
A Proxy in the accompanying form which is properly signed,
dated, returned and not revoked will be voted in accordance with
the instructions contained therein. Unless authority to vote for
the election of directors (or for any one or more nominees) is
withheld, Proxies will be voted for the slate of two directors
proposed by the Board. Discretionary authority is provided in
the Proxy as to any matters not specifically referred to therein.
Management is not aware of any other matters which are likely to
be brought before the Annual Meeting. However, if any such
matters properly come before the Annual Meeting, it is understood
that the Proxy holder or holders are fully authorized to vote
thereon in accordance with his or their judgment and discretion.
The Proxy may be revoked at any time before it is exercised
by providing written notice of such revocation to Sundance Homes,
Inc., 1375 East Woodfield Road, Suite 600, Schaumburg, Illinois
60173, Attn: Corporate Secretary. The Proxy also may be revoked
by the attendance and voting by a shareholder at the Annual
Meeting or by the execution and delivery to the Company of a
Proxy dated subsequent to a prior Proxy.
RECORD DATE
The Board of Directors has fixed the close of business on
January 24, 1997 as the record date for the determination of
shareholders entitled to notice of, and to vote at, the Annual
Meeting. As of the record date of the Annual Meeting there were
outstanding 7,807,000 shares of Common Stock. The outstanding
shares of Common Stock constitute the only outstanding voting
securities of the Company entitled to be voted at the Annual
Meeting.
<PAGE>
REQUIRED VOTE
The vote of a plurality of the shares cast in person or by
proxy is required to elect nominees for directors. With respect
to the election of directors at the Annual Meeting, each holder
of Common Stock is entitled to vote the number of shares owned by
such Shareholder for as many persons as there are directors to be
elected, or to cumulate such votes and give one candidate as many
votes as shall equal the number of directors multiplied by the
number of such shares or to distribute such cumulative votes in
any proportion among any number of candidates. Nominees who
receive the greatest number of votes, up to the number of
directors to be elected, shall be elected. See "Election of
Directors."
The presence at the Annual Meeting by person or by Proxy, of
the holders of a majority of the outstanding Common Stock is
necessary to constitute a quorum. Votes cast by proxy or in
person at the Annual Meeting will be tabulated by the election
inspectors appointed for the meeting and will determine whether
or not a quorum is present. The election inspectors will treat
abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum but as unvoted
for purposes of determining the approval of any matter submitted
to the shareholders for a vote. If a broker indicates on the
proxy that it does not have discretionary authority as to certain
shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that
matter.
Maurice Sanderman, Chairman and Chief Executive Officer of
the Company, and an irrevocable trust established by Mr.
Sanderman for the benefit of members of his family, together have
sufficient voting power to elect the nominees proposed by the
Board of Directors, and they have advised the Board of Directors
that they will vote their shares in favor of the election of such
nominees.
PROXIES
Dennis Bookshester and Arthur Titus, the persons named as
proxies on the Proxy card accompanying this Proxy Statement, were
selected by the Board of Directors of the Company to serve in
such capacity. Messrs. Bookshester and Titus are each directors
of the Company. Each executed and returned Proxy will be voted
in accordance with the directions indicated thereon, or if no
direction is indicated, such Proxy will be voted in accordance
with the recommendations of the Board of Directors contained in
this Proxy Statement. Unless instructions to the contrary are
given, the shares represented by a Proxy at the Annual Meeting
will be voted pro rata for the Board of Directors' nominees.
ELECTION OF DIRECTORS
(Proposal 1)
The Articles of Incorporation of the Company provide that
the members of the Company's Board of Directors shall be divided
into three classes, with each class having two members. At the
1994 annual meeting of shareholders, as specified in the Articles
of Incorporation of the Company, the directors of the Company
were elected into three classes, with the Class I directors being
elected for a one-year term, Class II directors being elected for
a two-year term and Class III directors being elected for a three-
year term. The Articles of Incorporation of the Company provide
that, at each annual meeting after such election, successors to
the class of directors whose term expires at that annual meeting
shall be elected for a three-year term.
<PAGE>
With respect to the election of directors at the Annual
Meeting, each holder of Common Stock is entitled to vote the
number of shares owned by such Shareholder for as many persons as
there are directors to be elected, or to cumulate such votes and
give one candidate as many votes as shall equal the number of
directors multiplied by the number of such shares or to
distribute such cumulative votes in any proportion among any
number of candidates. Nominees who receive the greatest number
of votes, up to the number of directors to be elected, shall be
elected.
The persons named in the enclosed form of Proxy, unless
otherwise directed therein by the shareholder giving the Proxy,
intend to vote such Proxy FOR the election of the nominees named
below as directors for the terms specified and intend to vote the
number of shares owned by such shareholders for each nominee. If
any nominee becomes unavailable for election or unable to serve
as a director, the persons named in the enclosed form of Proxy
intend to cast votes for a person that will be designated by the
Board of Directors of the Company. Management has no reason to
doubt the availability of any of the nominees to serve and no
reason to believe that any of the nominees will be unavailable or
unwilling to serve if elected to office. To the knowledge of
management, the nominees intend to serve the terms for which
election is sought. In the event that a shareholder withholds
authority to vote for one or more nominees, the persons named in
the enclosed form of Proxy intend to distribute that
shareholder's cumulative votes pro rata among the nominees for
whom authority is not withheld.
The Board of Directors has nominated two persons for
election as Class III directors at this Annual Meeting to serve a
three year term expiring at the Annual Meeting in 2000 or until
their successors are elected and qualified. Both nominees are
currently serving as directors and have consented to serve for
new terms.
Nominees
<TABLE>
The names of the nominees for the office of director in
Class III, together with certain information concerning such
nominees, are set forth below:
<CAPTION>
Director
Name Age Position With the Company and Principal Occupation Since
<S> <C> <C> <C> Since
Maurice Sanderman 56 Chairman of the Board and Chief Executive Officer 1975
Charles Engles 49 Director; Chairman and Chief Executive Officer of 1994
Stillwater Mining Company
</TABLE>
Maurice Sanderman founded the Company in 1975 and has been
the Company's Chairman of the Board and Chief Executive Officer
since that time and was President until December 1995. Prior to
forming the Company, Mr. Sanderman served as Treasurer of Kaufman
and Broad Homes Inc. of Illinois, a homebuilder with developments
throughout the United States. Mr. Sanderman has been and
continues to be involved with numerous associations operating
within the homebuilding industry, including the Home Builders
Association of Greater Chicago of which he was a member of the
Board of Governors.
In February 1992, an involuntary bankruptcy proceeding was
initiated against Castle Products, Inc., a manufacturer of wood
railings of which Maurice Sanderman was the sole shareholder.
Charles Engles has served as Chairman and Chief Executive
Officer of Stillwater Mining Company, a platinum and palladium
mining company, since 1994. From 1989 until 1994, he served as
Senior Vice President, Corporate Development, for Manville
Corporation, Denver, Colorado, a manufacturer of various building
products. Previously, from 1984 to 1989, he served as Senior
Vice President of The Trump Group in Menlo Park, California, a
leveraged buy-out firm. Mr. Engles was a Rhodes Scholar at
Oxford University in England.
<PAGE>
Other Directors
<TABLE>
The following persons will continue as directors of the
Company after the Annual Meeting until their terms of office
expire (as indicated below) or until their successors are elected
and qualified.
<CAPTION>
Class and Year
Director In Which Term
Name Age Position With the Company and Principal Occupation Since Will Expire
<S> <C> <C> <C> <C>
Gerald Ginsburg 55 Director; Partner in the public accounting firm of 1995 Class I
Checkers, Simon & Rosner 1998
Arthur Titus 52 Director; President and Chief Operating Officer 1995 Class I
1998
Dennis Bookshester 58 Director; President and Chief Executive Officer of 1993 Class II
Hydrotech-H20 Plus 1999
</TABLE>
Gerald Ginsburg is a certified public accountant and has
been a partner with the public accounting firm of Checkers, Simon
& Rosner since 1985. Mr. Ginsburg previously was the Managing
Director of the accounting firm of Berman & Berman, Ltd., which
merged with Checkers, Simon & Rosner in 1985. Mr. Ginsburg is a
former Chairman of the Business Management Committee of the Home
Builders Association of Greater Chicago.
Arthur Titus joined the Company in April 1995 as Senior Vice
President and Chief Operating Officer; in December 1995 he was
promoted to President. From 1990 until joining the Company, Mr.
Titus served as President of the Mid-Atlantic Region for the
Ryland Group. Previously, he was with Ryan Homes, Pittsburgh,
for over 19 years in a series of positions from Project
Supervisor to Executive Vice President of Operations responsible
for homebuilding operations.
Dennis Bookshester joined Hydrotech-H20 Plus as its
President and Chief Executive Officer in January 1997. From 1991
until joining Hydrotech-H20 Plus, Mr. Bookshester was an
independent business consultant and during 1990 and 1991 served
as Chief Executive Officer of Zale Corp., a Texas-based jewelry
store chain. From 1982 to 1989 he served as Chief Executive
Officer of the retail division of Carson Pirie Scott & Company, a
major Chicago department store. He also is a Director of Evans
Inc., Fruit of the Loom, Inc., and Playboy Enterprises, Inc.
In November 1994, a lawsuit was brought against the Company
and certain directors and employees of the Company by the Board
of Managers of the Parkside on the Green Condominium Association.
The complaint seeks damages against the Company for alleged
construction defects in the approximate amount of $1.6 million,
together with punitive damages against the named individuals for
alleged breach of fiduciary duty. The Company has assumed the
defense of this lawsuit on behalf of the individual defendants.
The lawsuit is in the discovery process and the Company is
defending the lawsuit vigorously.
<PAGE>
Meetings and Committees of the Board of Directors
The Board of Directors has an Audit Committee currently
composed of Charles Engles (Chairman), Dennis Bookshester and
Gerald Ginsburg. The Audit Committee met on one occasion during
fiscal 1996. The Audit Committee generally has responsibility
for recommending independent accountants to the Board for
selection, reviewing the plan and scope of the accountants'
audit, reviewing the Company's audit and control functions and
reporting to the full Board of Directors regarding all of the
foregoing.
The Board of Directors also has a Compensation Committee
currently composed of Dennis Bookshester (Chairman), Charles
Engles and Gerald Ginsburg. The Compensation Committee met on
three occasions during fiscal 1996. The Compensation Committee
establishes the overall compensation policies to be followed by
the Board of Directors, recommends the compensation of the
Company's key employees, administers the Stock Incentive Plan and
prepares the report of the Compensation Committee.
The Company does not have a Nominating Committee.
The Board of Directors regularly meets quarterly, however,
during fiscal 1996, the Board of Directors met five times.
Compensation of Directors
Members of the Board of Directors who are not employees of
the Company are paid $15,000 annually for their services as
directors. Outside directors are also eligible to receive
options under the Directors' Plan. The Directors' Plan provides
for the granting of options to purchase an aggregate of 100,000
shares (subject to adjustment in certain circumstances) of Common
Stock to members of the Board of Directors who are not also
employees of the Company (the "Outside Directors"). The
Directors' Plan is designed to promote the interests of the
Company by providing an increased opportunity for existing and
potential new directors to acquire an investment in the Company,
thereby maintaining and strengthening their desire to remain with
or join the Company's Board of Directors and align their
interests with those of the shareholders.
Outside Directors are granted options to acquire 5,000
shares of Common Stock on each of the date on which a person is
first elected as a Director, the date of the first annual meeting
of shareholders held subsequent to such person's election and,
thereafter, on the date of each succeeding annual meeting of
shareholders after which such person is still serving as a
director (with a limit of options to acquire a total of 25,000
shares to be granted to any Outside Director). All options
granted under the Directors' Plan are exercisable at the first
anniversary of the date granted and at a price per share equal to
the closing price of the Common Stock as reported on the Nasdaq
National Market on the date of grant or, if the market is closed
on such date, the next business day. Once granted, options may
be canceled under certain circumstances including death and
termination of directorship.
If any options under the Directors' Plan are surrendered
before exercise or lapse without exercise, in whole or in part,
the shares reserved for grant will revert to the status of
available shares. All options expire on the earlier to occur of
(a) ten years following the Grant Date, (b) two years after the
Outside Director's directorship terminates by reason of
Disability (as defined in the Directors' Plan), death or failure
to be renominated or elected as a director, and (c) six months
after the Outside Director's directorship terminates for any
reason other than disability, death or failure to be renominated
or reelected.
<PAGE>
EXECUTIVE OFFICERS
<TABLE>
The following persons are executive officers of the Company
who are not identified under the caption "Election of Directors."
<CAPTION>
Name Age Position
<S> <C> <C>
Joseph Atkin 51 Vice President and Chief Financial Officer
Thomas Small 47 Vice President - Land Acquisition and Development
Jon Tilkemeier 35 Vice President - Marketing and Sales
</TABLE>
Joseph Atkin has been the Company's Vice President and
Chief Financial Officer since December 1996. From February 1996
to December 1996, Mr. Atkin served as President and Chief
Financial Officer of Circle Fine Art Company ("Circle"), a
publisher and retailer of fine art, and from 1980 to February
1996, he served as Vice President and Chief Financial Officer of
Circle. In February 1996, Circle filed for relief under Chapter
11 of the United States Bankruptcy Code.
Thomas Small has been the Company's Vice President - Land
Acquisition and Development since February 1996 and from June
1994 to February 1996, he was the Company's Vice President -
Development. Mr. Small was appointed as an executive officer of
the Company in December 1996. From 1989 to May 1994, Mr. Small
was the Vice President of Construction/Development of Fogelsen
Development Company, a real estate development company.
Jon Tilkemeier has been the Company's Vice President -
Marketing and Sales since September 1996 and was appointed as an
executive officer of the Company in December 1996. From 1995
until joining the Company, Mr. Tilkemeier was the Director of
Corporate Strategy and Business Development of Ameritech
Corporation. From 1994 to 1995, he was the General Manager of
Marketing and Sales of New Media Enterprises, a subsidiary of
Ameritech Corporation specializing in development of interactive
television and cable television services. From 1989 to 1994, Mr.
Tilkemeier served in various operations, sales and marketing
managerial positions for Columbia TriStar Home Video, a
subsidiary of Sony Pictures Entertainment.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), requires executive officers and
directors, and persons who beneficially own more than ten percent
(10%) of the Company's stock, to file initial reports of
ownership and reports of changes in ownership with the Securities
and Exchange Commission ("SEC") and The Nasdaq Stock Market.
Executive officers, directors, and greater than ten percent (10%)
beneficial owners are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms
furnished to the Company and written representations from the
executive officers and directors, the Company believes that all
Section 16(a) filing requirements applicable to its executive
officers, directors, and greater than ten percent (10%)
beneficial owners were complied with during fiscal 1996.
<PAGE>
EXECUTIVE COMPENSATION
<TABLE>
The following table provides information concerning the
annual and long-term compensation for services in all capacities
to the Company for 1993, 1994, the first nine months of 1995 and
fiscal 1996 of those persons who were at September 30, 1996
(i) the Chief Executive Officer, (ii) an executive officer of the
Company whose salary and bonus exceeded $100,000 for fiscal 1996
and (iii) one executive officer whose employment terminated
during fiscal 1996, for whom, but for that fact, disclosure would
have been required (collectively, the "Named Officers").
<CAPTION>
Summary Compensation Table
Long Term
Compensation
Annual
Compensation Awards
Securities
Underlying All Other
Name and principal position Period Salary ($) Bonus ($) Options (#) Compensaton
<S> <C> <C> <C> <C> <C>
Maurice Sanderman, Year ended 9/30/96 $300,00 - - -
Chairman and Chief Executive Nine months ended 9/30/95 298,07 - - -
Officer Year ended 12/31/94 500,00 $260,000 - -
Year ended 12/31/93 500,00 260,000 - -
Arthur Titus, Year ended 9/30/96 210,00 - - -
President and Chief Operating Nine months ended 9/30/96 100,962(1) 25,231 50,000 22,800(2)
Officer
Daniel O'Brien, Year ended 9/30/96 132,178(3) - - 87,500(4)
Former Senior Vice President, Nine months ended 9/30/95 137,981 - - -
Chief Financial Officer, Year ended 12/31/94 175,000 35,000 20,000 -
Treasurer and Assistant Year ended 12/31/93 140,00 140,000 10,000 -
Secretary
<FN>
______________
(1) Represents salary earned since Mr. Titus joined the Company on April
10, 1995 through September 30, 1995.
(2) This amount was paid to Mr. Titus for reimbursement of nonrecurring
expenses associated with his relocation from Maryland to Illinois.
(3) Represents salary earned from October 1, 1995 until Mr. O'Brien's
resignation from the Company on May 3, 1996.
(4) Represents severance payments made in May 1996 and August 1996
pursuant to a severance agreement. Pursuant to such agreement, Mr.
O'Brien received an additional payment of $43,750 in January 1997 and
is entitled to one additional payment of $43,750 in February 1997.
</FN>
</TABLE>
Option Grants in Last Fiscal Year
No stock options were granted to Named Officers during
fiscal 1996. No stock appreciation rights were granted by the
Company in fiscal 1996.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-
End Option Values
<TABLE>
The following table provides information on the Named
Officers' unexercised options at September 30, 1996. All such
options were granted under the Company's Stock Incentive Plan.
None of the Named Officers exercised any options during fiscal
1996.
<CAPTION>
Fiscal Year-End Option Values
Numbers of Shares
Underlying Unexercised Value of Unexercised In-The-Money Options
Options at 9/30/96 (#) Options at 9/30/96 ($)(1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C>
Maurice Sanderman - -
Arthur Titus 12,500/37,500 $9,375/$28,125
Daniel O'Brien(2) - -
<FN>
__________________
(1) The value per option is calculated by subtracting the
exercise price from the closing price of the Company's Common
Stock of $4.00 as reported on the Nasdaq National Market on
September 30, 1996.
(2) All options held by Mr. O'Brien were terminated by August
1996 following his resignation from the Company.
</FN>
</TABLE>
Employment Agreements
The Company has entered into an agreement with Mr. Titus
providing for an annual base salary of $210,000. In the event
Mr. Titus's employment with the Company is terminated by the
Company without cause, Mr. Titus will be entitled to one year's
base salary, based on the most recently completed year.
Effective December 11, 1996, the Company entered into an
agreement with Mr. Atkin providing for an annual base salary of
$150,000 for the first year of the agreement and an amount not
less than $150,000 to be determined by the Compensation Committee
for the second year of the agreement. Mr. Atkin will receive a
minimum bonus of $50,000 at the end of his first year of
employment. Mr. Atkin was granted options to purchase 40,000
shares of Common Stock on December 12, 1996, the date of
commencement of his employment. The exercise price of the
options is $2.75, the fair market value on the date of grant, and
such options vest in four equal annual increments beginning on
December 13, 1997. In the event Mr. Atkin's employment with the
Company is terminated by the Company without "cause" (as defined
in the agreement) prior to December 31, 1997, Mr. Atkin is
entitled to receive a lump sum severance payment equal to one-
half of his base salary.
Effective September 26, 1996, the Company entered into an
agreement with Mr. Tilkemeier providing for an annual base salary
of $150,000 for the first year of the agreement and an amount not
less than $150,000 to be determined by the Compensation Committee
for the second year of the agreement. Mr. Tilkemeier will
receive a minimum bonus of $75,000 at the end of his first year
of employment subject to his and the Company meeting certain
performance criteria. Pursuant to the agreement, Mr. Tilkemeier
was granted options to purchase 40,000 shares of Common Stock on
September 26, 1996, the date of commencement of Mr. Tilkemeier's
employment. The exercise price of the options is $3.625, the
fair market value on the date of grant, and such options vest in
four equal annual increments beginning on September 27, 1997.
The agreement also provides that Mr. Tilkemeier will be entitled
to options to purchase at least 20,000 shares of Common Stock at
the end of each of his first two years of employment provided he
and the Company meet certain performance criteria. In the event
Mr. Tilkemeier's employment with the Company is terminated by the
Company without "cause" (as defined in the agreement) prior to
September 30, 1997, Mr. Tilkemeier is entitled to receive a lump
sum severance payment equal to one-half of his base salary. In
the event Mr. Tilkemeier's employment with the Company is
terminated by the Company without cause prior during the year
ending September 30, 1998, Mr. Tilkemeier is entitled to receive
a lump sum severance payment equal to one year's base salary.
<PAGE>
Stock Incentive Plan
The Stock Incentive Plan was effective as of April 7, 1993
and was amended effective as of February 16, 1996 to increase the
number of shares of Common Stock under the Stock Incentive Plan.
The purpose of the Stock Incentive Plan is to enable officers and
key employees of the Company to participate in the Company's
future and to enable the Company to attract and retain these
persons by offering them proprietary interests in the Company.
The Stock Incentive Plan is administered by the Company's
Compensation Committee and authorizes the issuance of up to
625,000 shares of Common Stock pursuant to the grant or exercise
of stock options, stock appreciation rights, restricted stock or
deferred stock (generally, "Awards").
On September 27, 1996, the Company granted to Mr. Tilkemeier
options to purchase a total of 40,000 shares of stock at an
exercise price of $3.625 per share and on February 16, 1996 the
Company granted to Mr. Small options to purchase a total of
10,000 shares of stock at an exercise price of $2.00 per share.
In addition, on May 23, 1996, the Company granted to 23 of its
employees options to purchase a total of 59,500 shares of Common
Stock at an exercise price of $1.625 per share and on August 26,
1996, the Company granted to one employee options to purchase
2,000 shares at an exercise price of $2.00 per share. As of
January 1, 1997, options to purchase a total of 676,500 shares
had been granted since April 7, 1993 at exercise prices ranging
from $1.625 to $11.25 per share. As of January 1, 1997, 2,000 of
these options had been exercised and options to purchase 101,625
shares were exercisable. As of January 1, 1997, options to
purchase 307,000 shares had been forfeited upon termination of
employment leaving 255,500 shares available for future awards.
In the event of a Change in Control of the Company (as
defined in the Stock Incentive Plan): (1) any Stock Appreciation
Rights and Stock Options outstanding as of the date of such
Change in Control which are not then exercisable and vested will
become fully exercisable and vested to the full extent of the
original grant; and (2) the restrictions and deferral limitations
applicable to any shares of Restricted Stock and Deferred Stock
will lapse, and such shares of Restricted Stock and Deferred
Stock will become free of all restrictions and become fully
vested and transferable to the full extent of the original grant.
A Change in Control includes any transaction which would
result in Maurice Sanderman and an irrevocable trust established
by Mr. Sanderman for the benefit of members of his family owning,
directly or indirectly, less than 50.1%, or any other person
owning, directly or indirectly, 20% or more of the outstanding
Common Stock of the Company or the voting power of the Company;
certain changes in the members of the Board of Directors; certain
corporate transactions (such as a merger); and the sale of
substantially all of the Company's assets.
<PAGE>
Report of the Compensation Committee on Executive Compensation
The Board of Directors approved a written charter regarding
the mission and functions of the Compensation Committee (the
"Compensation Committee") on August 2, 1995. The Compensation
Committee, currently composed of Dennis Bookshester, Charles
Engles and Gerald Ginsburg, met on three occasions during fiscal
1996. During that time, the Compensation Committee reviewed and
approved the Company's executive compensation program and
policies for executive personnel.
The overall objective of the Company's executive
compensation program is to provide base compensation levels and
compensation incentives (in the form of bonus and stock options)
that attract and retain the highest quality individuals for key
executive positions with the company. The executive compensation
program is intended to recognize individual contributions to
corporate performance and to recognize the overall performance of
the Company relative to the performance of other corporations in
the homebuilding industry.
Base Compensation
The Compensation Committee annually reviews base
compensation levels for its executive personnel to determine that
such compensation is competitive with other homebuilders of
similar size, based upon the results of a nation-wide survey
conducted by an independent third party. While there are 36
homebuilders participating in the survey, only one of the
participants is included in the Company's Peer Group Index
described below under the caption "Performance Graph." Base pay
ranges are evaluated against the results of the survey.
Individual base compensation levels within pay ranges vary
depending upon performance, experience and the scope of each
particular position.
Bonuses
In 1995, the Company hired a compensation consultant to
evaluate its bonus plan and to make recommendations for its
improvement. As a result of this study a new plan was proposed
which established a bonus pool for all executive officers based
upon pre-tax and pre-bonus income, return on capital, and growth
measurements. The new plan was approved by the Compensation
Committee on June 19, 1995. Individual amounts are determined by
an evaluation of individual performance as compared to
performance goals, then adjusted to conform to the bonus pool.
The performance goals address a wide range of objectives that are
designed to reflect the ways in which each person is expected to
contribute to the Company's performance. Examples of these
criteria include: achieving orders and delivery quotas, gaining
final subdivision approvals, and reducing operating costs.
The Company did not award any cash bonuses to its executive
personnel for fiscal 1996 in light of the financial results of
the Company over this time period.
Stock Options
Stock options are granted as a means of aligning the
economic interests of executive personnel with those of the
shareholders of the Company. During fiscal 1996, the Company did
not grant stock options to any executive officers.
Compensation of the Chief Executive Officer
Mr. Sanderman voluntarily took a $200,000 reduction in
salary at the time Arthur Titus (the Company's President and
Chief Operating Officer) was hired. The bonus plan for Mr.
Sanderman was determined by the Compensation Committee as
follows: up to 75% of the maximum bonus is based upon the
Company's attainment of certain financial objectives and up to
25% of the maximum bonus is based upon other discretionary
criteria such as growth and organization matters. This
arrangement was designed by the Compensation Committee to
compensate Mr. Sanderman on terms comparable to the terms of
employment of chief executive officers of other comparably sized,
publicly-owned homebuilders. No cash bonuses were awarded to Mr.
Sanderman for fiscal 1996. Effective October 1, 1996, the
Compensation Committee approved a $50,000 increase in Mr.
Sanderman's annual base salary from $300,000 to $350,000.
Section 162(m)
The Board of Directors currently intends for all
compensation paid to the Named Officers to be tax deductible to
the Company pursuant to Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"). Section 162(m) of the
Code provides that compensation paid to the Named Officers in
excess of $1,000,000 cannot be deducted by the Company for
Federal income tax purposes unless, in general, such compensation
is performance based, is established by an independent committee
of directors, is objective and the plan or agreement providing
for such performance based compensation has been approved in
advance by shareholders. The requirements of Section 162(m) of
the Code, however, are uncertain at this time and, the Company
believes, arbitrary and inflexible. In the future, the Board of
Directors may determine to adopt a compensation program that does
not satisfy the conditions of Section 162(m) of the Code if, in
the Board of Directors' judgment, after considering the
additional costs of not satisfying Section 162(m) of the Code,
such program is appropriate.
Compensation Committee
Dennis Bookshester (Chairman)
Charles Engles
Gerald Ginsburg
<PAGE>
PERFORMANCE GRAPH
<TABLE>
The graph set forth below compares the cumulative total
shareholder return on the Common Stock of the Company since its
initial public offering on July 9, 1993 through September 30,
1996 with the cumulative total return on the Nasdaq Market Index
and a Peer Group Index described below over the same period
(assuming the investment of $100 in the Common Stock at its
closing price of $8_ per share on July 9, 1993 and in each index
on such date, and the reinvestment of all dividends, if any).
(Performance graph plotted according to the following table)
<CAPTION>
7/9/93 12/31/93 12/31/94 9/30/95 9/30/96
<S> <C> <C> <C> <C> <C>
Sundance Homes 100.00 134.33 31.72 29.85 47.76
Peer Group 100.00 120.16 51.14 77.73 76.17
NASDAQ Composite (U.S.) 100.00 110.57 108.11 150.55 178.60
</TABLE>
Sources: Media General Financial Services, Richmond, Virginia.
The Peer Group Index includes the stock performance of the
following homebuilders: Inco Homes Corp., Continental Homes
Holding Corp., Engle Homes, Inc., Borror Corp., Washington Homes,
Inc., Crossman Communities, Inc., and Zaring Homes, Inc. The
group of companies included in the Peer Group Index is broader
than the Standard & Poors Index of Homebuilders, which consists
of only three companies, and the Company believes its Peer Group
Index is comprised of companies with similar operations and is
more indicative of the overall performance of the industry as a
whole. Borror Corp. completed its initial public offering in
March 1994 and its performance is not reflected in the Peer Group
data prior to the period ended December 31, 1994.
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
<TABLE>
The following table sets forth, as of January 1, 1997,
certain information with respect to the beneficial ownership of
the Company's Common Stock by (i) each person known by the
Company to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each director of the Company,
(iii) the Named Officers, and (iv) all executive officers and
directors as a group.
<CAPTION>
Number of Shares Percent of
Name and Address Beneficially Owned (1) Ownership
<S> <C> <C>
Maurice Sanderman (2)(3) 3,537,500 45.3%
Myra Sanderman, as Investment Adviser of the
Sanderman Descendants Trust U/A/D 12/29/92 (2) 1,175,000 15.1
Wellington Management Company (4) 693,000 8.9
75 State Street
Boston, Massachusetts 02109
Franklin Resources, Inc. (5) 690,000 8.8
777 Mariners Island Boulevard
San Mateo, California 94404
First Financial Fund, Inc. (4)(6) 539,500 6.9
One Seaport Plaza - 25th Floor
New York, New York 10292
Dennis Bookshester (7) 27,000 *
Charles Engles (7) 26,000 *
Gerald Ginsburg (7) 19,000 *
Arthur Titus (7) 12,500 *
Daniel O'Brien (8) 4,000 *
All executive officers and directors as a group (8 persons) (7) 3,626,000 46.1%
<FN>
__________________
* Less than 1%.
(1) Unless otherwise indicated below, the persons in the above
table have sole voting and investment power with respect to
all shares shown as beneficially owned by them.
(2) The address of the shareholder listed is c/o Sundance Homes,
Inc., 1375 East Woodfield Road, Suite 600, Schaumburg,
Illinois 60173.
(3) Excludes 1,175,000 shares beneficially owned by Maurice
Sanderman's wife, Myra Sanderman, as investment adviser of the
Sanderman Descendants Trust U/A/D 12/29/92, of which shares
Maurice Sanderman disclaims beneficial ownership.
(4) Based on a Schedule 13G filed with the SEC dated February
14, 1996. According to the Schedule 13G, Wellington
Management Company has shared voting power with respect to
153,500 shares and shared dispositive power with respect to
all 693,000 shares, including 539,500 shares beneficially
owned by First Financial Fund, Inc. as described in Note 6
below.
(5) Based on a Schedule 13G filed with the SEC dated February 9,
1996. According to the Schedule 13G, Franklin Resources, Inc.
has shared dispositive power with respect to all 690,000
shares.
(6) Based on a Schedule 13G filed with the SEC dated February
15, 1996. According to the Schedule 13G, First Financial
Fund, Inc. has shared dispositive power with respect to all
539,500 shares.
(7) Includes the following number of shares issuable on or
before March 2, 1997 pursuant to the exercise of stock
options: Dennis Bookshester and Charles Engles, 20,000 each;
Gerald Ginsburg, 15,000; and Arthur Titus, 12,500.
(8) Includes 1,000 shares owned by Mr. O'Brien's wife, Kathy
O'Brien.
</FN>
</TABLE>
<PAGE>
CERTAIN TRANSACTIONS
Due to the closely held nature of the Company prior to its initial
public offering in July 1993, the Company engaged in a number of
transactions with Maurice Sanderman, the President of the Company, and
affiliates.
In 1993, the Company issued promissory notes (collectively, the
"Dividend Notes") to Mr. Sanderman as distributions for periods prior to
1993 when the Company elected under Subchapter S of the Internal Revenue
Code of 1986, as amended, to have its net taxable income taxed directly to
Mr. Sanderman. These distributions were made to Mr. Sanderman to pay
income taxes on the Company's earnings and as a return of Mr. Sanderman's
investment. As of January 1, 1997, the principal balance outstanding on
the Dividend Notes was $4,193,000 plus accrued and unpaid interest of
approximately $1,300,000. The Dividend Notes are subordinated to all of
the Company's bank indebtedness and bear interest at a rate of 7.5% per
year, compounded daily. Mr. Sanderman is obligated to pledge the proceeds
of the Dividend Note to secure the Company's debt to its principal lenders,
LaSalle National Bank and Bank One, Milwaukee, N.A. On September 30, 1996,
the maturity date of the Dividend Notes was extended to September 30, 1997.
The Company has entered into a tax indemnification agreement with Mr.
Sanderman which provides for, among other things, the indemnification of
Mr. Sanderman for any losses or liabilities with respect to any additional
taxes (including interest, penalties and legal fees) resulting from the
Company's operations during the period in which it was an S Corporation.
The Company has entered into an indemnity agreement with each of its
directors and certain of its officers providing for indemnification of such
director or officer by the Company to the maximum extent permitted under
Illinois law. Such indemnity agreements provide, among other things,
indemnity for judgments and settlements in derivative actions, prompt
payment of legal expenses in advance of indemnification and equitable
contribution by the Company in certain instances in the event such director
or officer is not entitled to full indemnification.
INDEPENDENT AUDITORS
The Company's Board of Directors, upon recommendation of the Audit
Committee, has selected Price Waterhouse to audit the financial statements
of the Company for the fiscal year ended September 30, 1997. It is
expected that representatives of Price Waterhouse will be present at the
Annual Meeting and available to respond to questions. Such representatives
will be given an opportunity to make a statement if they desire to do so.
OTHER MATTERS
Solicitation
The cost, if any, of soliciting Proxies in the accompanying form has
been, or will be, paid by the Company. In addition to the solicitation of
Proxies by the use of the mails, certain officers and associates (who will
receive no compensation therefor in addition to their regular salaries) may
be used to solicit Proxies personally and by telephone and telegraph. In
addition, banks, brokers and other custodians, nominees and fiduciaries
will be requested to forward copies of the Proxy material to their
principals and to request authority for the execution of Proxies. The
Company will reimburse such persons for their expenses in so doing.
<PAGE>
Proposals of Shareholders
Proposals of shareholders intended to be considered at the 1998 Annual
Meeting of Shareholders must be received by the Corporate Secretary of the
Company not less than 120 days nor more than 150 days prior to January 31,
1998.
Shareholder List
A list of shareholders entitled to vote at the Annual Meeting,
arranged in alphabetical order, showing the address of and number of shares
registered in the name of each shareholder, will be open to the examination
of any shareholder, for any purpose germane to the Annual Meeting, during
ordinary business hours, for a period of at least ten days prior to the
Annual Meeting and continuing through the date of the Annual Meeting, at
the principal offices of the Company, 1375 East Woodfield Road, Suite 600,
Schaumburg, Illinois 60173.
Annual Report to Shareholders
The Company's Annual Report to Shareholders for the year ended
September 30, 1996, containing financial and other information pertaining
to the Company is enclosed with this Proxy Statement which is being mailed
to Shareholders on or about January 31, 1997. The Annual Report to
Shareholders does not constitute a part of this Proxy Statement. The
Financial Statements of the Company contained in the Annual Report are
incorporated herein by reference. (The remainder of the Annual Report is
not deemed to have been filed with the Securities and Exchange Commission.)
Annual Report on Form 10-K
The Company will furnish, without charge, to each person whose Proxy
is being solicited, upon request of any such person, a copy of the Annual
Report of the Company on Form 10-K for the year ended September 30, 1996 as
filed with the Securities and Exchange Commission, including the financial
statements and schedules. Such report was filed with the Securities and
Exchange Commission on December 24, 1996. Requests for copies of such
reports should be directed to Sundance Homes, Inc., Attention: Investor
Relations, 1375 East Woodfield Road, Suite 600, Schaumburg, Illinois 60173.
Please date, sign and return the enclosed Proxy at your earliest
convenience in the enclosed envelope. No postage is required for mailing
in the United States. A prompt return of your Proxy will be appreciated.
By Order of the Board of Directors,
DAVID APTER
Corporate Secretary
<PAGE>
PROXY SUNDANCE HOMES, INC. This proxy is solicited
1375 East Woodfield Road, Suite 600, on behalf of
Schaumburg, Illinois 60173 Board of Directors
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held On March 4, 1997
TO VOTE AT THE ANNUAL MEETING IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS OF SUNDANCE HOMES, INC., SIGN AND DATE THE REVERSE
SIDE OF THIS CARD WITHOUT CHECKING ANY BOX.
The undersigned holder of Common Stock, par value $.01 per share, of
Sundance Homes, Inc. (the "Company") hereby appoints Dennis Bookshester and
Arthur Titus, or either of them, with full power of substitution in each,
as proxies to cast all votes which the undersigned shareholder is entitled
to cast at the Annual Meeting of Shareholders (the "Annual Meeting") to be
held on Tuesday, March 4, 1997, at 9:00 a.m. local time, at the Company's
offices 1375 East Woodfield Road, Suite 600, Schaumburg, Illinois 60173,
and at any adjournments thereof, upon the following matters. The
undersigned shareholder hereby revokes any proxy or proxies heretofore
given.
1. ELECTION OF DIRECTORS TO CLASS III
" One vote for each share owned FOR " WITHHOLD AUTHORITY to vote for
each nominee listed below (except all nominees listed below
as marked to the contrary below)
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below.
Shareholders have cumulative voting rights in the election of
directors. Unless authority is withheld in accordance with these
instructions, the proxies will vote the shares covered by this proxy
equally to elect the two nominees hereinafter named. In the event that
a shareholder withholds authority to vote for one or more nominees,
that shareholder's cumulative votes will be distributed equally among
the nominees for whom authority is not withheld.)
Maurice Sanderman
Charles Engles
If a nominee becomes unavailable for election or unable to serve as a
director, the votes will be cast for a person that will be designated
by the Board of Directors of the Company.
2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting, or any
adjournments thereof.
(continued, and to be signed, on reverse side)
(continued from other side)
This proxy, when properly executed, will be voted in the manner as
directed herein by the undersigned shareholder. UNLESS CONTRARY DIRECTION
IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND IN ACCORDANCE WITH
THE UNANIMOUS DETERMINATION OF THE BOARD OF DIRECTORS AS TO OTHER MATTERS.
The undersigned shareholder may revoke this proxy at any time before it is
voted by delivering to the Corporate Secretary of the Company either a
written revocation of the proxy or a duly executed proxy bearing a later
date, or by appearing at the Annual Meeting and voting in person. The
undersigned shareholder hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. If you receive more than one proxy card, please sign and return
ALL cards in the enclosed envelope.
DATED:
Signature
Signature (if held jointly)
Please date and sign exactly as
the name appears hereon. When
signing as executor,
administrator, trustee, guardian,
attorney-in-fact or other
fiduciary, please give title as
such. When signing as
corporation, please sign in full
corporate name by President or
other authorized officer. If you
sign for a partnership, please
sign in partnership name by an
authorized person.
