Crossmann Communities, Inc.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 28, 1998
To our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
CROSSMANN COMMUNITIES, INC. ("Crossmann" or the "Company") which will be held at
the Radisson Plaza & Suite Hotel, The Conference Center, 8787 Keystone Crossing,
Indianapolis, Indiana, at 9:00 a.m. on May 28, 1998 for the following purposes:
1. To elect two directors;
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors of the Company for the fiscal year ending December 31, 1998;
3. To act upon such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on March 31, 1998 as
the record date for determining those shareholders entitled to vote at the
meeting. The stock transfer books will not be closed between the record date
and the date of the meeting.
Representation of at least a majority of all outstanding Common Shares of
Crossmann Communities, Inc. is required to constitute a quorum. Accordingly, it
is important that your shares be represented at the meeting. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND RETURN IT IN THE ENCLOSED ENVELOPE. Your proxy may be revoked at any
time prior to the time it is voted.
Please read the proxy material carefully. Your vote is important and the
Company appreciates your cooperation in considering and acting on the matters
presented.
Very truly yours,
/s/ John B. Scheumann
------------------------
John B. Scheumann
Chairman of the Board of Directors
and Chief Executive Officer
CROSSMANN COMMUNITIES, INC.
9202 North Meridian Street
Indianapolis, Indiana 46260
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of CROSSMANN COMMUNITIES, INC. ("Crossmann" or the
"Company") of proxies to be voted at the Annual Meeting of Shareholders, which
will be held at 9:00 a.m. on May 28, 1998 at the Radisson Plaza & Suite Hotel,
Conference Center, 8787 Keystone Crossing , Indianapolis, Indiana, 46240 or at
any adjournments or postponements thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. This Proxy Statement and
the proxy card were first mailed to shareholders on or about April 22, 1998.
Shareholders Should Read the Entire Proxy Statement Carefully Prior to Returning
Their Proxies
VOTING RIGHTS AND SOLICITATION
The close of business on March 31, 1998 was the record date for
shareholders entitled to notice of and to vote at the Annual Meeting. As of
that date, Crossmann had 11,126,229 common shares without par value, (the
"Common Shares"), issued and outstanding. All of the holders of the Company's
Common Shares outstanding on the record date are entitled to vote at the Annual
Meeting, and shareholders of record entitled to vote at the meeting will have
one (1) vote for each share so held on the matters to be voted upon.
Common Shares represented by proxies in the accompanying form which are
properly executed and returned to Crossmann will be voted at the Annual Meeting
of Shareholders in accordance with the shareholders' instructions contained
therein. In the absence of contrary instructions, shares represented by such
proxies will be voted FOR the election of the director as described herein
under "Proposal 1--Election of Director" and FOR ratification of the appointment
of auditors as described herein under "Proposal 2--Ratification of Appointment
of Auditors." Management does not know of any matters to be presented at this
Annual Meeting other that those set forth in this Proxy Statement and in the
Notice accompanying this Proxy Statement. If other matters should properly come
before the meeting, the proxy holders will vote on such matters in accordance
with their best judgement. Any shareholder has the right to revoke his or her
proxy at any time before it is voted. Abstentions and broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
The solicitation of proxies is being made by Crossmann, and the entire cost
of soliciting proxies will be borne by Crossmann Communities, Inc. Proxies will
be solicited principally through the use of the mail, but, if deemed desirable,
may be solicited personally or by telephone, telegraph or special letter by
officers and regular Crossmann employees for no additional compensation.
Arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to send proxies and proxy material to the beneficial owners of
the Company's Common Shares, and such persons may be reimbursed for their
expenses.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information regarding the beneficial
ownership of the Company's Common Shares as of March 24, 1998 by (i) each person
or entity who is known to the Company to own beneficially more than 5% of the
outstanding shares of Common Shares of the Company, (ii) each director, (iii)
each officer listed in the Summary Compensation Table on page 6 of this Proxy
Statement and (iv) all directors and officers as a group. All shares are
subject to the named person's sole voting and investment power except where
otherwise indicated.
<TABLE>
<CAPTION>
<S> <C>
Number of Shares Beneficially Owned
-----------------------------------
NAME (1)
- -------------------------------------------------------------------
John B. Scheumann, Chairman and CEO . . . . . . . . . . . . . . . . 2,100,000
Richard H. Crosser, President, COO, Director (3). . . . . . . . . . 1,670,517
Steve M. Dunn, Vice President . . . . . . . . . . . . . . . . . . . 136,500
FMR Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,115,400
James C. Shook, Director. . . . . . . . . . . . . . . . . . . . . . 7,500
Larry S. Wechter, Director. . . . . . . . . . . . . . . . . . . . . 5,250
John M. Moody, Vice President . . . . . . . . . . . . . . . . . . . 30,000
Jennifer A. Holihen, Chief Financial Officer, Treasurer, Secretary
15,000
All directors and executive officers
as a group (12 persons) . . . . . . . . . . . . . . . . . . . . . . 4,139,481
<S> <C>
Percent of Common Shares (2)
----------------------------
NAME (1)
- -------------------------------------------------------------------
John B. Scheumann, Chairman and CEO . . . . . . . . . . . . . . . . 18.87
Richard H. Crosser, President, COO, Director (3). . . . . . . . . . 15.35
Steve M. Dunn, Vice President . . . . . . . . . . . . . . . . . . . 1.23
FMR Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02
James C. Shook, Director. . . . . . . . . . . . . . . . . . . . . . *
Larry S. Wechter, Director. . . . . . . . . . . . . . . . . . . . . *
John M. Moody, Vice President . . . . . . . . . . . . . . . . . . . *
Jennifer A. Holihen, Chief Financial Officer, Treasurer, Secretary
*
All directors and executive officers
as a group (12 persons) . . . . . . . . . . . . . . . . . . . . . . 37.20
<FN>
* Denotes less than 1%
(1) The address of each beneficial owner is 9202 North Meridian Street, Indianapolis, Indiana, 46260,
except FMR Corp. which is 82 Devonshire Street, Boston, Massachusetts, 02109.
(2) There are 11,126,229 shares issued and outstanding at March 24, 1998.
(3) All of the 1,670,517 shares owned beneficially by Mr. Crosser are owned by the Richard H. Crosser
Living Trust, a revocable trust established by Mr. Crosser on February 25, 1992. The beneficiaries of
the trust are Mr. Crosser's children. Mr. Crosser is the trustee of the trust.
(4) Seven hundred and fifty of the shares owned beneficially by Mr. Wechter are owned by the Penn
Meridian Foundation, a trust established by Mr. Wechter on December 11, 1995. Mr. Wechter and his wife,
Janis Wechter, are co-trustees of the trust.
</TABLE>
PROPOSAL 1
ELECTION OF DIRECTORS
The members of the Board of Directors of Crossmann Communities, Inc. are
classified into three classes, one of which is elected at each Annual Meeting of
Shareholders to hold office for a three-year term and until successors of such
class have been elected and qualified. The nominee for the class of Directors
to be elected at this annual meeting is set forth below. Unless otherwise
instructed, proxy holders will vote the proxies received by them for the
election of the nominee named below. If the nominee becomes unavailable for any
reason, it is intended that the proxies will be voted for a substitute nominee
designated by the Board of Directors. As of the date of this Proxy Statement,
the Board of Directors is not aware that the nominee is unable or will decline
to serve as a director.
<TABLE>
<CAPTION>
NOMINEES TO THE BOARD OF DIRECTORS
<S> <C> <C> <C> <C>
Class and Year
Name . . . . . . . Principal Occupation Director Since Term will Expire Age
- ------------------ ----------------------------- -------------- ---------------- ---
Richard H. Crosser President and Chief Operating
Officer, Crossmann 1992 Class II 2001 59
Communities, Inc.
James C. Shook . . President, The Shook Agency 1994 Class II 2001 66
</TABLE>
Richard H. Crosser has been the Company's President and Chief Operating
Officer since 1992 and serves on its Board of Directors and has served as a
senior executive officer since joining the predecessor Company in 1974. Prior
to 1974, Mr. Crosser was employed by National Homes Construction Corp. for 15
years in a variety of capacities, last serving as a regional manager of the
company.
James C. Shook was elected to Crossmann's Board of Directors by the Board
of Directors in March 1994. Mr. Shook is President of The Shook Agency, Inc., a
real estate brokerage firm in Lafayette, Indiana specializing in commercial and
industrial sales and leasing. Mr. Shook's other corporate affiliations include
directorships of NBD Indiana, Inc., Indiana Energy Inc. (Indiana Gas Company),
and Lafayette Life Insurance Company. Community service includes past and
present directorships of The Indiana Chamber of Commerce, The Greater Lafayette
Chamber of Commerce, Great Lafayette Progress, Inc., United Way, Lafayette Home
Hospital, The Purdue Foundation, Dean's Advisory Committee, Krannert School of
Management at Purdue University, Greater Lafayette Museum of Art, YWCA
Foundation, and the Greater Lafayette Community Foundation.
DIRECTORS NOT STANDING FOR ELECTION
<TABLE>
<CAPTION>
The members of the Board of Directors who are not standing for election at this year's Annual Meeting are set
forth below.
<S> <C> <C> <C> <C>
Name. . . . . . . . Occupation Director Since Class and Year Term will Expire
- ------------------- -------------------------------------------- -------------- -------------------------------
Age
---
John B. Scheumann . Chairman of the Board of Directors and Chief 1992 Class III 1999 49
Executive Officer, Crossmann Communities,
Inc.
Jennifer A. Holihen Chief Financial Officer, Treasurer, 1993 Class I 2000 39
Secretary, Crossmann
Communities, Inc.
Larry S. Wechter. . Managing Director, Monument 1994 Class III 1999 42
Advisors
</TABLE>
John B. Scheumann has been the Company's Chairman of the Board of Directors
and Chief Executive Officer since 1992 and has served as a senior executive
officer since joining the predecessor Company in 1977. Before joining the
Company, Mr. Scheumann was employed by National Homes Construction Corp. for
three years in a variety of capacities, last serving as Division Controller for
Multi-Family Construction.
Jennifer A. Holihen has served as a director of the Company since September
1993. Ms. Holihen is Chief Financial Officer, Secretary and Treasurer of
Crossmann and has been employed by the Company since 1983 as its principal
financial and accounting officer. Ms. Holihen is a Certified Public Accountant
and holds an MBA in Accounting and Management Information Systems from Indiana
University. She is a member of the Indiana Society of Certified Public
Accountants and the American Institute of Certified Public Accountants.
Larry S. Wechter is one of the founders and the former President and
director of ADESA Corporation. ADESA Corporation was once a publicly held
company; today it is a wholly owned subsidiary of Minnesota Power & Light (NYSE:
MPL), a diversified utility based in Duluth, Minnesota. ADESA owns and operates
auto auctions and performs related services throughout the United States and
Canada. Mr. Wechter now serves as Managing Director of Monument Advisors, a
merchant bank based in Indianapolis, serves as CEO of Monument Realty, a real
estate investment trust specializing in the acquisition of automotive related
real estate and is a member of Eagle Investments I, LLC, a private investment
company. Mr. Wechter also serves on the board of directors of J.D. Byrider and
re:Member Data Services, Inc. Mr. Wechter was elected to Crossmann's Board of
Directors on May 25, 1994.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF AUDITORS
The firm of Deloitte & Touche LLP served as auditors for the Company for
the fiscal years ended December 31, 1995, 1996 and 1997. The Board of Directors
desires the firm to continue in this capacity for the current fiscal year.
Accordingly, a resolution will be presented to the meeting to ratify the
appointment of Deloitte & Touche LLP by the Board of Directors as independent
auditors to audit the accounts and records of the Company for the fiscal year
ending December 31, 1998 and to perform other appropriate services. In the
event that shareholders fail to ratify the appointment of Deloitte & Touche LLP,
the Board of Directors would reconsider such appointment.
A representative of Deloitte & Touche LLP will be present at the Annual
Meeting to respond to appropriate questions and to make a statement if such
representatives desire to do so.
BOARD OF DIRECTORS MEETINGS
The Board of Directors of the Company held a total of four meetings during
1997. All meetings were attended by all of the Directors.
In March 1994 the Board designated an Audit Committee and a Compensation
Committee of the Board of Directors, the functions of which are described below.
The Audit Committee is responsible for recommending independent auditors,
reviewing with the independent auditors the scope and results of the audit
engagement, establishing and monitoring the Company's financial policies and
control procedures, reviewing and monitoring the non-audit services performed by
the Company's auditors and reviewing all potential conflicts of interest. This
Committee, currently consisting of John B. Schuemann, Larry S. Wechter and James
C. Shook, held four meetings during 1997.
The Compensation Committee was formed and currently consists of James C.
Shook and Larry S. Wechter, non-employee members of the Board of Directors. The
Compensation Committee is responsible for reviewing, determining and
establishing the salaries, bonuses and other compensation of the executive
officers of the Company and for administering the Employee Option Plan. The
Compensation Committee held two meetings during 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Salaries, bonuses and option grants for all executive officers were
recommended by Messrs. Scheumann and Crosser and Ms. Holihen, and approved by
the Compensation Committee. Messrs. Scheumann and Crosser, and Ms. Holihen do
not participate in setting their personal salaries, bonuses or option grants.
DIRECTOR COMPENSATION
Non-employee members of the Board of Directors are each paid an annual
retainer fee of $10,000 plus fees for Board meeting attended, and are
reimbursed for all out-of-pocket costs incurred in connection with their
attendance at such meetings. During 1997, James C. Shook and Larry S. Wechter
each received fees of $12,000.
Under the Company's Outside Director Stock Option Plan, (the "Outside
Director Plan") each non-employee Director is entitled to receive the grant of
an option to purchase 1,500 Common Shares on their initial election and each
re-election to the Board of Directors, or more frequently as determined by the
employee Directors of the Company. The total number of Common Shares with
respect to which option may be granted under the Outside Director Plan may not
exceed 37,500 Common Shares. The Outside Director Plan is administered by the
Board members who are employees of the Company. Options granted under the
Outside Director Plan constitute non-qualified stock options for income tax
purposes. Messrs. Wechter and Shook each were granted options to purchase
1,500 Common Shares on February 18, 1997.
EXECUTIVE COMPENSATION
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and the Company's four other highest-paid executive
officers for services rendered in all capacities to the Company and its
subsidiaries for the fiscal years ended December 31, 1997, 1996, and 1995,
respectively.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Other All Other
------------- ----------------
Salary Bonus Compensation Options(2) Compensation (1)
-------- -------- ------------- ---------- ----------------
Name and Principal Position. . Year ($) ($) ($) ($)
- ------------------------------ ---- -------- -------- ------------- ----------------
John B. Scheumann, Chairman. . 1997 175,000 265,000 619 None 20,500
and Chief Executive Officer . 1996 166,000 249,000 508 18,715
1995 157,500 157,500 925 18,232
Richard H. Crosser, President. 1997 175,000 265,000 1,370 None 20,500
and Chief Operating Officer . 1996 166,000 249,000 1,171 18,715
1995 157,500 157,500 1,037 18,232
John M. Moody, Vice President. 1997 87,000 87,000 2,465 7,500 20,500
and General Manager,. . . . . 1996 82,500 82,500 2,075 7,500 18,715
Indianapolis Division. . . . . 1995 78,750 78,750 2,477 18,750 18,223
Steve M. Dunn, Vice President. 1997 100,320 75,000 592 -0- 20,500
and General Manager, Columbus 1996 100,320 60,000 614 -0- 18,715
Division. . . . . . . . . . . 1995 100,320 -0- 597 -0- 11,044
Jennifer A. Holihen, Chief . . 1997 75,000 100,000 3,678 7,500 20,500
Financial Officer, Treasurer, 1996 70,000 87,500 2,247 7,500 18,715
Secretary . . . . . . . . . . 1995 63,000 67,000 314 18,750 15,276
<FN>
(1) Represents contributions by the Company to the named individual's profit sharing plan.
(2) Options have been restated to reflect the three-for-two common stock split effective August 18,
1997.
</TABLE>
EMPLOYMENT CONTRACTS
On September 1, 1993, Crossmann entered into a five-year employment
agreement with Steven M. Dunn, the sole shareholder of Deluxe Homes of
Columbus, Inc. in connection with the acquisition of that company by Crossmann.
Pursuant to the terms of this employment agreement, Mr. Dunn manages the
Columbus division and serves as an officer of Crossmann and receives an annual
salary of $100,000 and is permitted to participate in the Company's benefit
plans, its bonus program and the Employee Option Plan.
OPTION PLAN BENEFITS
The following table sets forth the benefits allocated under the Outside
Director Plan and the Employee Option Plan (collectively, the "Plans") for the
fiscal year ended December 31, 1997 to each of the named executive officers; all
current executive officers as a group; all current directors who are not
executive officers as group; and all employees, including all current officers
who are not executive officers, as a group. The amount of such benefits are
not necessarily indicative of the amounts that will be granted in the future.
The closing sale price of a Common Share at the close of business on March 24,
1998 was $29.00.
<TABLE>
<CAPTION>
<S> <C> <C>
Employee Option Plan Number of Units Outside Director Option Plan Number of Units
Name
John B. Scheumann. . . . . . . . . . . . . . -0- -0-
Richard H. Crosser . . . . . . . . . . . . . -0- -0-
John M. Moody. . . . . . . . . . . . . . . . 7,500 -0-
Steve M. Dunn. . . . . . . . . . . . . . . . -0- -0-
Jennifer A. Holihen. . . . . . . . . . . . . 7,500 -0-
All Other Executive Officers . . . . . . . . 30,000 -0-
as a Group
All Directors who are not Executive Officers 3,000
All non-Executive Officers
and Employees as a Group . . . . . . . . . 91,500
</TABLE>
The following table contains information concerning the grant of stock options
under the Company's Employee Option Plan to the named executive officers and
groups indicated. The table also lists potential realizable values of such
options on the basis of assumed annual compounded appreciation rates of 5% and
10% over the life of the options, which are set at a maximum of 10 years.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
<S> <C> <C> <C> <C> <C>
% of Total Potential Realizable Value at Assumed Annual Rates of
Options Price Appreciation over 10
Granted to Exercise years
Options Employees Price Expiration 5% 10%
------------------------------------------------------
NAME. . . . . . . . Granted(#) in 1997 ($/share) Date
- ------------------- ---------- ---------- --------- ----------
John B. Scheumann . -0- -0- -0- -0- -0- -0-
Richard H. Crosser. -0- -0- -0- -0- -0- -0-
John M. Moody . . . 7,500 6 13.17 2/18/07 160,853 256,132
Steve M. Dunn . . . -0- -0- -0- -0- -0- -0-
Jennifer A. Holihen 7,500 6 13.17 2/18/08 160,853 256,132
</TABLE>
The following table provides information with respect to the named
executive officers and groups indicated concerning the unexercised options held
as of the end of the last fiscal year.
<TABLE>
<CAPTION>
AGGREGATED OPTION VALUES AT DECEMBER 31, 1997
<S> <C> <C> <C> <C>
VALUE
REALIZED: NUMBER OF OPTIONS VALUE OF UNEXERCISED OPTIONS AT YEAREND.
SHARES ACQUIRED MARKET PRICE OF UNEXERCISED AT MARKET PRICE OF $27.625 - EXERCISE PRICE
NAME . . . . ON EXERCISE $ 27.625 DECEMBER 31, 1997 RANGING FROM $5.17 TO $13.17
- ------------------- --------------- ---------------- ----------------- -----------------------------------------
John M. Moody . . . 3,750 $ 103,594 41,250 $ 789,531
Jennifer A. Holihen -- -- 59,700 1,204,513
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General. The Company has undertaken to formulate a competitive
compensation policy for executive officers that will attract, motivate and
retain qualified and productive personnel, reward superior performance, and
provide long-term incentives based on that performance. The Company also has
attempted to develop a compensation policy that will serve to align the
interests of the Company, its executive officers, and its shareholders. The
primary components of executive compensation consist of base salaries, a
performance-based cash bonus plan, and stock options.
Base salaries. Management has traditionally held that it is in the
Company's best interest to keep base salaries of employees at all levels as low
as possible, due to uncertainties inherent in the homebuilding business that
affect the amount and timing of income: weather, interest rates and other
credit issues, the availability of developed lots, labor supply, etc. This
policy ensures a low break-even point and conserves cash. Management also
believes that its compensation system is consistent with hiring young
professionals and developing them as managers in the Company.
Management believes that base salaries for the Company's executive officers
are lower than bases salaries in companies of similar size and performance, as
analyzed from time to time by the Compensation Committee of the Board of
Directors. In 1997, the Compensation Committee utilized salary surveys provided
by Deloitte & Touche LLP and examined recent proxy statements of other
homebuilders to confirm that this policy continues to be observed.
Bonuses. In light of relatively low base salaries, it is the Company's
policy to pay a substantial portion of the compensation an officer has the
opportunity to earn as a year-end bonus, provided that certain predetermined
corporate goals and individual performance objectives are achieved. By weighing
bonus compensation heavily, management believes it has an effective tool for
enhancing Company performance, while protecting the Company from high fixed
costs. Bonuses are computed only when actual earnings performance for the
entire year is known.
Division managers who are directly responsible for operating divisions work
toward goals that focus attention on activities critical to the survival and
success of the organization. In 1997, those factors critical to Crossmann's
success were:
- Unit growth in all divisions;
- Margin preservation in light of anticipated volume growth and
increasing competitive pressures;
- Concentration of sales on the Company's internally developed lots to
free capital for new projects.
In 1998, Crossmann's critical success factors are perceived to be the same.
The Company's executive officers earn substantial bonuses if overall
corporate earnings objectives are achieved by division managers and when they
accomplish predetermined strategic objectives. In 1997, Crossmann achieved or
exceeded its earnings objectives in every quarter and achieved its strategic
objective of expanding into new markets. In recognition of management's
substantial personal investment in the Company's stock, the Committee believes
that interest of senior management is consistent with that of the Company's
stockholders. The Committee believes that long-term share value will be
enhanced by continued strong financial performance. For these managers to
receive maximum bonuses in 1998, Crossmann must:
- Achieve its higher earnings targets;
- Support operating managers in producing acceptable volume levels and
margins, particularly monitoring new markets where performance is unproven; and
- Establish a market presence in one or more new markets that will
provide an adequate base for increased earnings in 1999.
The maximum bonus amounts are set based on a survey of comparable positions
in other publicly traded firms, within the constraints set by Company earning
objectives.
In 1997, goals were set by the Board of Directors and year-end bonuses for
1997 were paid in accordance with these guidelines. The Compensation Committee
participated in setting new unit and margin goals for each operating division
for 1998 and in formulating overall strategic objectives for 1998.
Stock Options. The Compensation Committee authorized incentive options to
key employees on February 18, 1997 at a grant price of $13.17 per share.
Submitted by the Compensation
Committee
James C. Shook
Larry S. Wechter
PERFORMANCE GRAPH
The following performance graph shows the percentage change in cumulative
total return to a holder of the Company's Common Stock, assuming dividend
reinvestment, compared with the cumulative total return, assuming dividend
reinvestment, of Standard & Poor's 500 Stock Index and the peer group indicated
below during the period from October 19, 1993 (the effective date of the
Company's initial public offering) through December 31, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Measurement Period. . Crossmann Communities, Inc. Homebuilding 500 S & P 500 Index
(Fiscal Year Covered)
10/19/93. . . . . . . 100.00 100.00 100.00
1993. . . . . . . . . 111.91 100.94 100.71
1994. . . . . . . . . 50.00 58.39 102.04
1995. . . . . . . . . 178.59 83.38 140.39
1996. . . . . . . . . 161.91 76.04 172.62
1997. . . . . . . . . 394.68 121.67 230.21
</TABLE>
CERTAIN TRANSACTIONS
The Company had business dealings with certain affiliates, including its
Chairman of the Board and CEO, John B. Scheumann and its President and COO,
Richard H. Crosser and entities with which they were affiliated prior to its
initial public offering in October 1993. Since its initial public offering ,
the policy of the Company has been to require that such transactions be on
terms not less favorable to the Company than reasonably available from unrelated
third parties and that they be approved by a majority of the disinterested
members of the Board of Directors of the Company.
The Company leases approximately 20,000 square feet of office space for its
headquarters, and an additional 4,000 square feet for its mortgage brokerage
subsidiary, and 5,000 square feet of warehouse space at 9202 North Meridian
Street in Indianapolis, Indiana from Pinnacle Properties LLC, an entity owned by
principal shareholders John B. Scheumann and Richard H. Crosser. The monthly
rent on these leases is $23,703. The Company relocated its headquarters to this
building in May 1994.
COMPLIANCE WITH REPORTING REQUIREMENTS OF SECTION 16(A) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 required the Company's
directors and executive officers, and persons who own more that ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) reports
they file. To the knowledge of the Company, all Section 16(a) filing
requirements applicable to the Company's officers, directors and greater than
ten-percent beneficial owners have been made in a timely manner.
OTHER MATTERS
Management does not know of any matters to be presented at this Annual
Meeting other than those set forth herein and in the Notice accompanying this
Proxy Statement.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. YOU ARE, THEREFORE, URGED TO EXECUTE
PROMPTLY AND RETURN THE ACCOMPANYING PROXY IN THE ENVELOPE WHICH HAS BEEN
ENCLOSED FOR YOUR CONVENIENCE. Shareholders who are present at the meeting may
revoke their proxies and vote in person or, if they prefer, may abstain from
voting in person and allow their proxies to be voted.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Shareholder proposals intended to be considered at the 1999 Annual Meeting
of Shareholders must be received by Crossmann Communities, Inc. no later than
December 31, 1998. The proposal must be mailed to the Company's principal
executive officer, 9202 North Meridian Street, Indianapolis, Indiana, 46260,
Attention: Jennifer A. Holihen. Such proposals may be included in next year's
proxy statement if they comply with certain rules and regulations promulgated by
the Securities and Exchange Commission.
By the Order of the Board of Directors
/s/ Jennifer A. Holihen
---------------------------
Jennifer A. Holihen
Secretary
April 3, 1998
Indianapolis, Indiana
REVOCABLE PROXY
CROSSMANN COMMUNITIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders
May 28, 1998
The undersigned hereby appoints the Board of Directors of Crossmann Communities,
Inc., or the majority of such directors, with powers of substitution, to act as
attorneys and proxies for the undersigned to vote all shares of capital stock of
Crossmann Communities, Inc., which the undersigned is entitled to vote at the
Annual Meeting of Shareholders to be held at the Radisson Plaza & Suite Hotel,
The Conference Center, 8787 Keystone Crossing, Indianapolis, Indiana, on
Thursday May 28, 1998 at 9:00 a.m. and at any and all adjournments thereof, as
follows:
(Continued on Reverse Side)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
CROSSMANN COMMUNITIES, INC.
May 28, 1998
[X] Please mark your
votes as in this
example.
<TABLE>
<CAPTION>
The Board of Directors recommends a vote "FOR" each of the listed propositions
<S> <C>
WITHHOLD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nominees: Richard H. Crosser
1. The election as FOR AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . James C. Shook
directors of the [ ] [ ]
nominees listed
at right.
(Instructions: To withhold authority to vote for any individual nominee, write that nominee's
name on the space provided below.)
2. Approval and ratification of the appointment . . . . . . . . . . . . . . . . . . . . . . . FOR AGAINST ABSTAIN
of Deloitte & Touche LLP as auditors for the . . . . . . . . . . . . . . . . . . . . . . . . . [ ] [ ] [ ]
year ending December 31, 1998.
3. In their discretion, the proxies are authorized to
vote on any other business that may properly
come before the Meeting or adjournment thereof.
This proxy may be revoked at any time prior to the voting thereof.
The undersigned acknowledges receipt from Crossmann Communities, Inc., prior
to the executor of this proxy, of notice of the Meeting, a proxy statement and an
Annual Report to shareholders.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE
PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS PRESENTED AT
SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN
THIS PROXY IN THEIR BEST JUDGEMENT. AT THE PRESENT TIME, THE
BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE MEETING.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
Signature(s)________________________________DATE___________
Note: (Please sign as your name appears on the envelope in which this card
was mailed. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If shares are held jointly, each holder
should sign.)
</TABLE>
