<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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 Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
C. BREWER 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[COMPANY LOGO]
C. BREWER HOMES, INC.
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 11, 1996
To our Stockholders:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders
of C. BREWER HOMES, INC. (the ``Company''), which will be held at 827 Fort
Street, Honolulu, Hawaii 96813 at 10:00 a.m. on September 11, 1996 for the
following purposes:
1. To elect five directors to the Board of Directors;
2. To consider and vote upon a proposal to ratify the selection of
Coopers & Lybrand L.L.P. as independent public accountants for the
Company for the fiscal year ending March 31, 1997; and
3. To act upon such other business as may properly come before the
meeting or any adjournment or postponement thereof.
These matters are more fully described in the Proxy Statement accompanying
this Notice.
The Board of Directors has fixed the close of business on July 15, 1996 as
the record date for determining those stockholders who will be 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 shares of Class A
Common Stock and Class B Common Stock of C. Brewer Homes, Inc., considered as a
single class, excluding Treasury Stock, 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.
Sincerely yours,
/s/ John W.A. Buyers
-------------------------
John W.A. Buyers
CHAIRMAN OF THE BOARD
August 21, 1996
Honolulu, Hawaii
<PAGE>
STOCKHOLDERS SHOULD READ THE ENTIRE PROXY STATEMENT
CAREFULLY PRIOR TO RETURNING THEIR PROXIES
PROXY STATEMENT
FOR
1996 ANNUAL MEETING OF STOCKHOLDERS
OF
C. BREWER HOMES, INC.
TO BE HELD ON SEPTEMBER 11, 1996
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of C. BREWER HOMES, INC. (``C. Brewer Homes'' or the
``Company'') of proxies to be voted at the 1996 Annual Meeting of Stockholders,
which will be held at 10:00 a.m. on September 11, 1996 at 827 Fort Street,
Honolulu, Hawaii 96813, or at any adjournments or postponements thereof, for the
purposes set forth in the accompanying Notice of 1996 Annual Meeting of
Stockholders. This Proxy Statement and the proxy card were first mailed to
stockholders on or about August 21, 1996. The Company's 1996 Annual Report is
being mailed to stockholders concurrently with this Proxy Statement. The 1996
Annual Report is not to be regarded as proxy soliciting material or as a
communication by means of which any solicitation of proxies is to be made.
VOTING RIGHTS AND SOLICITATION
The close of business on July 15, 1996 was the record date for stockholders
entitled to notice of and to vote at the 1996 Annual Meeting of Stockholders.
As of that date, C. Brewer Homes had 2,870,423 shares of Class A Common Stock,
$.01 par value per share, and 5,465,577 shares of Class B Common Stock, $.01 par
value per share (collectively, the ``Common Stock''), issued and outstanding.
All of the shares of the Company's Common Stock outstanding on the record date,
except for Treasury Stock, are entitled to vote at the 1996 Annual Meeting of
Stockholders, and stockholders of record entitled to vote at the meeting will
have one vote for each share of Class A Common Stock and three votes for each
share of Class B Common Stock so held with regard to each matter to be voted
upon.
Shares of the Company's Common Stock represented by proxies in the
accompanying form which are properly executed and returned to C. Brewer Homes
will be voted at the 1996 Annual Meeting of Stockholders in accordance with the
stockholders' instructions contained therein. In the absence of contrary
instructions, shares represented by such proxies will be voted FOR the election
of each of the directors as described herein under ``Proposal 1--Election of
Directors'' and FOR ratification of the selection of accountants as described
herein under ``Proposal 2--Ratification of Selection of Independent Public
Accountants.'' Management does not know of any matters to be presented at this
Annual Meeting other than 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 judgment. Any stockholder has the right to revoke his or her
proxy at any time before it is voted at the meeting. Election of directors by
stockholders shall be determined by a plurality of the votes cast by the
stockholders entitled to vote at the election present in person or represented
by proxy. Abstentions and broker non-votes are each included in the
determination of the number of shares present for quorum purposes. Abstentions
are counted in tabulations of the votes cast on proposals presented to
stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
The entire cost of soliciting proxies will be borne by C. Brewer Homes.
Proxies will be solicited principally through the use of the mails, but, if
deemed desirable, may be solicited personally or by telephone, telegraph or
special letter by officers and regular C. Brewer Homes employees for no
additional compensation.
1.
<PAGE>
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 Stock, and such persons may be reimbursed for their
expenses.
PROPOSAL 1
ELECTION OF DIRECTORS
A board of five directors will be elected at the 1996 Annual Meeting of
Stockholders. The nominees for the Board of Directors are set forth below. The
proxy holders intend to vote all proxies received by them in the accompanying
form for the nominees for director listed below, unless instructions to the
contrary are marked on the proxy. In the event that a nominee is unable or
declines to serve as a director at the time of the 1996 Annual Meeting of
Stockholders, the proxies will be voted for any nominee who shall be designated
by the present Board of Directors to fill the vacancy. In the event that
additional persons are nominated for election as directors, the proxy holders
intend to vote all proxies received by them for the nominees listed below. As
of the date of this Proxy Statement, the Board of Directors is not aware of any
nominee who is unable or will decline to serve as a director. The term of
office of each person elected as a director will continue until the next Annual
Meeting of Stockholders or until the director's successor has been elected.
NOMINEES TO BOARD OF DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE AGE
- ---- -------------------- ----- ---
<S> <C> <C> <C>
John W.A. Buyers Chairman of the Board of C. Brewer Homes, Inc.; 1992 68
Chairman and Chief Executive Officer of
C. Brewer and Company, Limited and Chairman, President and
Chief Executive Officer of Buyco, Inc.
Clinton R. Churchill Trustee for the Estate of James Campbell 1993 52
David A. Heenan Trustee for the Estate of James Campbell 1993 56
Kent T. Lucien Executive Vice President and Chief Financial Officer of 1989 42
C. Brewer and Company, Limited
B.G. Moynahan President and Chief Executive Officer of C. Brewer Homes, Inc. 1991 48
</TABLE>
John W.A. Buyers has been Chairman of the Board of the Company since May
1992. Mr. Buyers was appointed President and Chief Executive Officer of C.
Brewer and Company, Limited (``CBCL'') in 1975, and was the Chairman, President
and Chief Executive Officer of CBCL from 1982 to 1993. Mr. Buyers has been the
Chairman, President and Chief Executive Officer of Buyco, Inc. (``Buyco''), the
parent of CBCL, since 1986. Mr. Buyers is a director of First Hawaiian Bank,
Mauna Loa Resources, Inc. and John B. San Filippo & Sons, Inc., a commercial nut
company.
Clinton R. Churchill has been a Trustee for the Estate of James Campbell
since July 1992. From July 1988 through July 1992, Mr. Churchill was the
estate's Chief Executive Officer, and from October 1984 to June 1988, he served
as its Chief Operating Officer. From 1981 to 1984, Mr. Churchill was the
President and Chief Executive Officer of Gaspro, Inc. Mr. Churchill is also a
director of the Bank of Hawaii.
2.
<PAGE>
David A. Heenan has been a Trustee for the Estate of James Campbell since
January 1995. From May 1982 to December 1994, Mr. Heenan was Chairman,
President and Chief Executive Officer of Theo. H. Davies & Co., Ltd., the North
American holding company for the Hong Kong-based Jardine Matheson. Mr. Heenan
joined Theo. H. Davies & Co., Ltd. in May 1982. From April 1975 to April 1982,
Mr. Heenan served as vice president for academic affairs at the University of
Hawaii and, before that, as dean of its business school. Mr. Heenan is also a
director of the Bank of Hawaii and Aloha Airlines, Inc.
Kent T. Lucien was the Executive Vice President and Chief Financial Officer
of the Company from April 1993 to April 1994. Mr. Lucien has been the Executive
Vice President and Chief Financial Officer of CBCL since June 1991. From
January 1989 to May 1991, Mr. Lucien was Senior Vice President and Chief
Financial Officer of CBCL, and from January 1987 to December 1988, he was Vice
President, Chief Financial Officer and Treasurer of CBCL. Mr. Lucien has been
the Vice President of Mauna Loa Resources, Inc. since June 1986.
B.G. Moynahan has been the President of the Company since July 1990 and its
Chief Executive Officer since July 1991. From July 1990 to July 1991, Mr.
Moynahan was also the Company's Chief Operating Officer, and from July 1989 to
June 1990, he was the Company's Executive Vice President. From December 1986
until June 1989, Mr. Moynahan was the Company's Senior Vice President of Real
Estate Development. From July 1983 to November 1986, Mr. Moynahan was Vice
President, Planning and Control, and from October 1981 until June 1983, he was
Manager, Special Projects.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of nine meetings during
the fiscal year ended March 31, 1996 (the ``1996 fiscal year''). Each director
attended at least 75% of the aggregate of (i) the total number of meetings of
the Board and (ii) the total number of meetings held by all committees of the
Board on which he served.
The Company has an Audit Committee, a Compensation Committee and a
Conflicts Committee of the Board of Directors. There is no nominating committee
or committee performing the functions of such committee.
The Audit Committee meets with the Company's financial management and its
independent public accountants to review internal control conditions, audit
plans and results, and financial reporting procedures. This Committee, which
currently consists of Kent T. Lucien, Clinton R. Churchill and David A. Heenan,
held one meeting during the 1996 fiscal year.
The Compensation Committee reviews and approves the Company's compensation
arrangements for executive officers and key employees and administers the
Company's 1993 Stock Option/Stock Issuance Plan (the ``1993 Plan''). This
Committee, which currently consists of David A. Heenan, John W.A. Buyers and
Clinton R. Churchill, held two meetings during the 1996 fiscal year.
The Conflicts Committee resolves any conflicts of interest that may arise
in connection with the Company's ongoing relationship with Buyco, CBCL and their
affiliates, including the amendment of any of the agreements between the Company
and Buyco, CBCL and their affiliates. Prior to the initial public offering of
the Company's Class A Common Stock in December 1993 (the ``Initial Public
Offering''), the Company was a wholly owned subsidiary of CBCL, which is a
wholly owned subsidiary of Buyco. Buyco is the common parent of an affiliated
group of corporations formed in connection with the acquisition of CBCL in 1986.
This Committee, which currently consists of Clinton R. Churchill, David A.
Heenan and B.G. Moynahan, held one meeting during the 1996 fiscal year.
3.
<PAGE>
DIRECTOR REMUNERATION
Non-employee members of the Board are each paid an annual retainer fee of
$15,000 and are reimbursed for all reasonable out-of-pocket costs incurred in
connection with their attendance at such meetings. They also receive $500 for
each meeting of the Board attended, $400 for each committee meeting attended on
a day on which no Board meeting is held, and $200 for each committee meeting
attended on the same day on which a Board meeting is held. Pursuant to the
automatic option grant program under the 1993 Plan, each individual who first
becomes a non-employee Board member after the effective date of the 1993 Plan is
eligible to receive an option grant for 5,000 shares of Class A Common Stock at
an exercise price per share equal to the fair market value on the date of grant.
Each individual who continues to serve as a non-employee Board member is also
eligible to receive a 5,000-share option grant biennially on the date of every
second Annual Meeting of Stockholders since the 1995 Annual Meeting of
Stockholders, provided such individual has served as a non-employee Board member
for at least six months. A non-employee Board member may not receive options to
purchase more than 25,000 shares of Class A Common Stock over his or her period
of Board service.
4.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Class A Common Stock and Class B Common Stock as of
May 9, 1996 by: (i) each person who is known to the Company to own beneficially
more than five percent of the outstanding shares of the Company's Class A Common
Stock or Class B Common Stock; (ii) each director; (iii) each officer listed in
the Summary Compensation Table; and (iv) all directors and executive officers as
a group.
<TABLE>
<CAPTION>
COMMON STOCK (1)
---------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------- -----------------------------------
PERCENTAGE PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES OF CLASS(2) SHARES OF CLASS(3)
- ------------------------------------ ----------------- --------------- ----------------- ----------------
<S> <C> <C> <C> <C>
John W.A. Buyers (4) (5) (15). . . . . . . . . . 1,389 * 1,094,185 19.4%
SC Fundamental Inc.,
The SC Fundamental Value Fund, L.P.,
SC Fundamental Value BVI, Inc., Gary N.
Siegler and Peter M. Collery (6) . . . . . . 490,600 18.2% -- --
712 Fifth Avenue
New York, NY 10019
Brinson Partners, Inc.,
Brinson Holdings, Inc.,
SBC Holding (USA), Inc.
and Swiss Bank Corporation (7) . . . . . . . 426,25 15.8% -- --
209 South LaSalle
Chicago, IL 60604
Dimensional Fund Advisors, Inc.. . . . . . . . . 283,400 10.5% -- --
1299 Ocean Avenue
Santa Monica, CA 90401
Marvin J. Tilker (8) . . . . . . . . . . . . . . -- -- 397,050 7.0%
415 South St. I4004
Honolulu, HI 96813
Richard W. Kazmaier Trust (9). . . . . . . . . . -- -- 388,379 6.9%
676 Elm Street
Concord, MA 01742
John J. F. Sherrerd (10) . . . . . . . . . . . . -- -- 367,787 6.5%
833 Miurfield Road
Bryn Mawr, PA 19010
Jean E. Rolles Trust UA Feb. 4, 1988 (11). . . . -- -- 364,543 6.5%
3087 La Pietra Circle
Honolulu, HI 96815
Paul C.T. & Violet S.W. Loo (12) . . . . . . . . -- -- 362,535 6.4%
950 Waiiki Street
Honolulu, HI 96821
Ing Family Partnership . . . . . . . . . . . . . -- -- 361,283 6.4%
130 Merchant Street, Suite 1000
Honolulu, HI 96813
B.G. Moynahan (13)(14) . . . . . . . . . . . . . 205,000 7.2% 54,974 1.0%
Clinton R. Churchill (15). . . . . . . . . . . . 10,589 * -- --
David A. Heenan (15) (16). . . . . . . . . . . . 7,189 * -- --
Kent T. Lucien (15) . . . . . . . . . . . . . . 6,389 * 112,901 2.0%
Craig S. Champion (13) . . . . . . . . . . . . . 26,781 1.0% -- --
Edward T. Foley (13) . . . . . . . . . . . . . . 13,021 * -- --
Rodney L. Gilliland (13) . . . . . . . . . . . . -- -- -- --
David W. Blane . . . . . . . . . . . . . . . . . -- -- -- --
All executive officers and directors as
a group (12 persons) (17). . . . . . . . . . 296,169 10.0% 1,278,317 22.7%
- -----------------------------------------------------------
* Less than 1%
</TABLE>
5.
<PAGE>
(1) Except as indicated in the footnotes to this table, the stockholders
named in the table are known to the Company to have sole voting and
investment power with respect to all shares of Class A Common Stock and
Class B Common Stock shown as beneficially owned by them, subject to
community property laws where applicable.
(2) Based on 2,700,173 shares of the Company's Class A Common Stock
outstanding on May 9, 1996.
(3) Based on 5,635,827 shares of the Company's Class B Common Stock
outstanding on May 9, 1996.
(4) Mr. Buyer's address is 827 Fort Street, Honolulu, HI 96813.
(5) Includes 1,064,185 shares of Class B Common Stock beneficially owned by
the J.W.A. Buyers Revocable Living Trust dated December 20, 1989 and
30,000 shares of Class B Common Stock beneficially owned by the John W.A.
Buyers and Elsie P. Buyers Irrevocable Trust.
(6) Beneficial ownership is based on an amended Schedule 13D filed on or
about January 5, 1996, which states: (i) The SC Fundamental Value Fund,
L.P. and its general partner, SC Fundamental, Inc., beneficially own and
share voting and dispositive power over 322,950 shares of Class A Common
Stock; (ii) SC Fundamental Value BVI, Inc. beneficially owns 167,650
shares of Class A Common Stock which it purchased as managing general
partner of the investment manager of SC Fundamental Value BVI, Ltd. and
shares voting and dispositive power with respect to such shares; and
(iii) Gary N. Siegler and Peter M. Collery is each a controlling
stockholder, executive officer and director of SC Fundamental Inc. and SC
Fundamental Value BVI, Inc. and by virtue of such status may be deemed to
own beneficially these 490,600 shares of Class A Common Stock.
(7) Beneficial ownership is based on a Schedule 13G filed on or about
February 14, 1996, which states: Brinson Partners, Inc. is a wholly
owned subsidiary of Brinson Holdings, Inc. Brinson Holdings, Inc. is a
wholly owned subsidiary of SBC Holding (USA), Inc. SBC Holding (USA),
Inc. is a wholly owned subsidiary of Swiss Bank Corporation. By virtue
of such corporate relationships, Swiss Bank Corporation, SBC Holding
(USA), Inc., and Brinson Holdings, Inc. may be deemed to own beneficially
these 426,250 shares.
(8) Includes 39,646 shares beneficially owned by the Marvin J. Tilker Trust,
12,379 shares beneficially owned by the Marvin Tilker Irrevocable Trust,
and 345,025 shares beneficially owned by the Marvin J. Tilker Revocable
Trust.
(9) Includes 27,096 shares beneficially owned by the Richard W. Kazmaier
Trust UA December 8, 1989, 252,898 shares beneficially owned by the
Richard W. Kazmaier 1988 Trust and 108,385 shares beneficially owned by
the KSG Trust.
(10) Includes 61,947 shares beneficially owned by the John J.F. Sherrerd Deed
Trust, 39,019 shares beneficially owned by the John J.F. Sherrerd Trust,
and 27,457 shares beneficially owned by Kathleen C. Sherrerd.
(11) Includes 1,081 shares beneficially owned by the Jean E. Rolles Trust UA
December 26, 1985 and 1,081 shares beneficially owned by the Jean E.
Rolles Trust UA October 12, 1988.
(12) Includes 66,076 shares beneficially owned by Pamela M. Y. Loo, 66,076
shares beneficially owned by Rodney K.H. Loo, 20,632 shares beneficially
owned by the Pamela M.Y. Loo Irrevocable Living Trust, and 20,632
beneficially owned by the R.K.H. Loo Irrevocable Living Trust.
(13) Includes options exercisable within 60 days of May 9, 1996, held by Mr.
Moynahan, Mr. Champion, Mr. Foley and Mr. Gilliland, to purchase 165,000;
25,781; 13,021; and zero shares of Class A Common Stock, respectively.
(14) Mr. Moynahan's address is P.O. Box 1437, Wailuku, Hawaii 96793.
(15) Includes options exercisable within 60 days of May 9, 1996, held by
Messrs. Churchill, Heenan and Lucien, to each purchase 6,389 shares of
Class A Common Stock, and options exercisable within 60 days of May 9,
1996, held by Mr. Buyers, to purchase 1,389 shares of Common Stock.
These options were granted pursuant to the Company's automatic option
grant program for non-employee Board members.
(16) Includes 800 shares of Class A Common Stock beneficially owned by the
Nery L. Heenan Revocable Living Trust.
(17) Includes options exercisable within 60 days of May 9, 1996, held by all
executive officers and directors as a group, to purchase an aggregate of
246,858 shares of Class A Common Stock.
6.
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning the
compensation earned by (i) the Company's Chief Executive Officer, (ii) each of
the three other most highly compensated executive officers of the Company
serving as such as of the end of the last fiscal year whose total annual salary
and bonus exceeded $100,000, and (iii) one former executive officer of the
Company, for services rendered in all capacities to the Company for the fiscal
years ended March 31, 1996, March 31, 1995 and March 31, 1994. Such individuals
will be hereafter referred to as the ``Named Executive Officers.''
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
------------------------------------------------ ----------------------------
Other Securities All Other
Name and Principal Fiscal Annual Underlying Compensation
Position Year Salary(1) Bonus(2) Compensation Options (3)(4)
- ------------------------- ------ --------- ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
B.G. Moynahan 1996 $250,000 -- -- -- $11,256
Chief Executive Officer 1995 225,000 $ 71,250 -- -- 9,100
and President 1994 182,077 239,833 $137,472(5) $330,000 5,687
Craig S. Champion 1996 135,000 -- -- -- 8,550
Senior Vice President, 1995 120,000 31,000 -- -- 3,600
Development 1994 106,667 78,267 -- 41,250 860
Edward T. Foley 1996 115,000 -- -- -- 4,777
Senior Vice President 1995 92,138 24,607 -- 25,000 1,306
and Chief Financial 1994 -- -- -- -- --
Officer (6)
Rodney L. Gilliland 1996 126,250 -- -- 25,000 2,175
Senior Vice President, 1995 33,333 5,000 -- 15,000(8) --
Sales and Marketing (7) 1994 -- -- -- -- --
David W. Blane 1996 26,000 -- -- -- 42,640
Senior Vice President, 1995 98,141 19,907 -- -- 2,944
Maui Operations (9) 1994 92,500 61,500 -- 33,000 750
</TABLE>
- ---------------------------------
(1) Includes employee contributions to CBCL's 401(k) Plan and Buyco's 401(k)
Plan in which the Company's employees participated prior to the Initial
Public Offering. The Company's employees continue to participate in CBCL's
401(k) Plan.
(2) No bonuses were awarded by the Company in the 1996 fiscal year. The
bonuses earned for the 1995 fiscal year were paid in May 1995 and the
bonuses earned for the 1994 fiscal year were paid in the 1995 fiscal year.
7.
<PAGE>
(3) The indicated amount for each Named Executive Officer is comprised of the
contributions made by the Company to CBCL's 401(k) Plan on behalf of each
such officer which match his or her salary deferral contributions to such
plan as follows:
401(K) PLAN
NAME YEAR CONTRIBUTION
---- ---- ------------
B.G. Moynahan 1996 $6,656
1995 4,500
1994 1,687
Craig S. Champion 1996 8,550
1995 3,600
1994 860
Edward T. Foley 1996 4,777
1995 1,306
1994 --
Rodney L. Gilliland 1996 2,175
1995 --
1994 --
David W. Blane 1996(a) 5,440
1995 2,944
1994 750
(a) Mr. Blane also received $30,000 as severance pay in connection with
his resignation from the Company, and $7,200 as the value of his
accrued by unused vacation.
(4) The indicated amount for Mr. Moynahan also is comprised of the life
insurance premiums paid by the Company on behalf of Mr. Moynahan. Such
premiums were $4,600, $4,600 and $4,000 in the 1996 fiscal year, the 1995
fiscal year and the 1994 fiscal year, respectively.
(5) Other annual compensation is comprised of perquisites and other benefits
paid by the Company or Buyco. Included in the amount shown for Mr.
Moynahan in the 1994 fiscal year is $128,097 paid by Buyco under its tax
offset program. Pursuant to this program, eligible participants received a
tax offset payment which is designed to compensate the participant for the
federal and Hawaii state income tax liability incurred upon exercise by
such participant of a non-qualified option granted under the Buyco, Inc.
1985 Stock Option Plan.
(6) Mr. Foley became an employee of the Company in April 1994.
(7) Mr. Gilliland became an employee of the Company in December 1994. His
annual base salary for the 1995 fiscal year was $100,000.
(8) These options were cancelled in connection with the grant of options to
Mr. Gilliland in the 1996 fiscal year.
(9) Mr. Blane resigned from the Company effective June 1995. His annual base
salary for the 1996 fiscal year was $104,000.
8.
<PAGE>
STOCK OPTIONS
The following table sets forth information concerning the stock options
granted by the Company during the 1996 fiscal year to the Named Executive
Officers. Except for the limited stock appreciation rights described in
footnote (1) below, no stock appreciation rights were granted during the 1996
fiscal year to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
Number of Percent of Total Potential Realizable Value at
Securities Options Granted Assumed Annual Rates of
Underlying to Employees in Exercise or Base Stock Price Appreciation
Options Fiscal Price Per Expiration for Option Term(4)
-----------------------------
Name Granted (1) Year (2) Share (3) Date 5% 10%
- ------------------- ----------- ---------------- ---------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
B.G. Moynahan -- -- -- -- -- --
Craig S. Champion -- -- -- -- -- --
Edward T. Foley -- -- -- -- -- --
Rodney L. Gilliland 25,000 83% $5.125 08/20/05 $80,577 $204,198
David W. Blane -- -- -- -- -- --
</TABLE>
- --------------------------------
(1) The option was granted on August 21, 1995 under the 1993 Plan and entitles
Mr. Gilliland to purchase shares of the Company's Class A Common Stock.
The option will become exercisable for 25% of the option shares upon the
completion of one year of service measured from the grant date and for the
remaining shares in 36 equal monthly installments upon completion of each
additional month of service thereafter. In connection with this option
grant, Mr. Gilliland's option for 15,000 shares, granted in the 1995 fiscal
year, was cancelled.
The shares subject to the option will immediately vest in the event the
Company is acquired by a merger or asset sale, unless the options are
assumed by the acquiring entity. The Plan Administrator has the
discretionary authority to provide for accelerated vesting of the option
shares following a hostile change in control of the Company, whether by
tender offer for more than 50% of the Company's outstanding voting stock or
change in the majority of the Board effected through one or more proxy
contests. The option has a maximum term of ten years, subject to earlier
termination in the event of the optionee's cessation of service with the
Company.
The Plan Administrator may grant stock appreciation rights in connection
with one or more option grants made under the Plan. Two types of stock
appreciation rights may be issued: (i) tandem rights which require the
holder to elect between the exercise of the underlying option for shares of
Class A Common Stock and the surrender of such option for a distribution
from the Company, payable in cash or shares of Common Stock, based upon the
appreciated value of the option shares or (ii) limited rights pursuant to
which each outstanding option is cancelled upon a take-over of the Company
effected through a hostile tender offer for more than 50% of the
outstanding Class A Common Stock in exchange for a cash distribution from
the Company equal to the tender-offer price of the vested shares of Class A
Common Stock subject to that option less the exercise price payable for
those shares. The option listed above contains limited stock appreciation
rights.
(2) The Company granted options to employees to purchase a total of 30,000
shares of Class A Common Stock during the 1996 fiscal year.
(3) The exercise price may be paid in cash, in shares of the Company's Class A
Common Stock valued at fair market value on the exercise date or through a
cashless exercise procedure involving a same-day sale of the purchased
shares. The Company may also finance the option exercise by loaning the
optionee sufficient funds to pay the exercise price for the purchased
shares and the federal and state income and employment tax liability
incurred by the optionee in connection with such exercise. The optionee
may be permitted, subject to the approval of the Plan Administrator, to
apply a portion of the shares purchased under the option (or to deliver
existing shares of Class A Common Stock) in satisfaction of such tax
liability. The Plan Administrator also has the discretionary authority to
reprice outstanding
9.
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options through the cancellation of those options and the grant of
replacement options with an exercise price equal to the lower fair market
value of the option shares on the regrant date.
(4) The five percent and ten percent assumed annual rates of compounded stock
price appreciation are mandated by the rules of the Securities and Exchange
Commission. There is no assurance that the actual stock price appreciation
over the ten-year option term will be at those assumed rates or at any
other level. Unless the market price of the Company's Class A Common Stock
does in fact appreciate over the option term, no value will be realized
from the option grants.
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to the
Named Executive Officers concerning shares of the Company's Class A Common Stock
subject to exercisable and unexercisable stock options which the Named Executive
Officers held at the end of the 1996 fiscal year. No options or SARs were
exercised by any Named Executive Officer during the 1996 fiscal year. Except to
the extent of any limited stock appreciation rights awarded in connection with
outstanding options, none of the Named Executive Officers held any stock
appreciation rights at the end of that fiscal year.
FISCAL YEAR-END OPTION VALUES
Value of unexercised
Number of Securities in-the-money options at
underlying unexercised fiscal year end less
options at fiscal year-end exercise price(1)
---------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------- ------------ ------------- ----------- -------------
B.G. Moynahan 148,500 181,500 0 0
Craig S. Champion 23,203 18,047 0 0
Edward T. Foley 11,458 13,542 0 0
Rodney L. Gilliland -- 25,000 0 0
David W. Blane (2) -- -- 0 0
- -------------------------------
(1) None of the outstanding options held by the Named Executive Officers as of
the 1996 fiscal year-end have an exercise price less than the fair market
value on March 31, 1996, which was $4.1875.
(2) Mr. Blane resigned from the Company effective June 1995. In accordance
with the terms of the 1993 Plan, Mr. Blane's options were subsequently
cancelled.
DEFINED BENEFIT PLAN
Prior to the Initial Public Offering, the Company's employees with at least
one year of service participated in a qualified retirement plan sponsored by
CBCL (the ``Defined Benefit Plan''). CBCL had made annual contributions to the
Defined Benefit Plan as determined by the Defined Benefit Plan's actuary. In
connection with the Initial Public Offering, the benefit accruals for the
Company's employees were calculated and frozen based on final average
compensation and credited service prior to December 1, 1993. During the 1996
fiscal year, CBCL terminated the Defined Benefit Plan.
10.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the ``Compensation
Committee'') establishes and administers the Company's executive compensation
program. The Compensation Committee reviews compensation levels of persons
designated as executive officers (``Executive Officers'') and key employees by
the Board of Directors and evaluates significant employee benefit programs,
executive management performance and related matters pertaining to Executive
Officers. The Compensation Committee also administers the 1993 Plan.
In December 1993, prior to the Company's Initial Public Offering, the
Company entered into an employment agreement with B.G. Moynahan, the Company's
President and Chief Executive Officer, providing for the payment of an initial
base salary of $225,000. The employment agreement has a term of three years.
The Compensation Committee played no role in establishing the terms of this
agreement. The following is a summary of policies of the Committee that affect
the compensation paid to Executive Officers, as reflected in the tables and text
set forth elsewhere in this Proxy Statement.
OVERALL EXECUTIVE COMPENSATION PHILOSOPHY
The Company's executive compensation programs are designed to allow the
Company to compete for, retain and motivate talented executives necessary for
the Company's success by creating a strong relationship between executive
compensation and the interests of stockholders, as reflected by the Company's
financial performance and long-term stock price appreciation.
The Company's executive compensation philosophy is based on the following
objectives:
- ATTRACT AND RETAIN HIGHLY QUALIFIED EXECUTIVE TALENT BY PROVIDING
COMPETITIVE TOTAL COMPENSATION. The Company relies on publicly-
available information, independent homebuilding industry compensation
surveys and the advice of independent compensation consultants to
ensure that this objective is achieved.
- MOTIVATE EXECUTIVE OFFICERS TO ACHIEVE HIGHEST LEVELS OF PERFORMANCE
BY PROVIDING A SIGNIFICANT PORTION OF TOTAL COMPENSATION THROUGH
ANNUAL INCENTIVES. All Executive Officers receive a significant
portion of their total compensation in annual incentives and, as
levels of responsibility increase, a greater proportion of total
compensation is performance-based.
- ALIGN EXECUTIVE OFFICERS' INTERESTS WITH THE INTEREST OF STOCKHOLDERS
BY PROVIDING SIGNIFICANT INCENTIVES TO MANAGE THE COMPANY FROM THE
PERSPECTIVE OF AN OWNER. A significant portion of Executive Officers'
total compensation is provided in the form of stock options which
reward long-term Company performance and create a commonality of
interests between executives and stockholders.
- STRIVE FOR FAIRNESS IN THE ADMINISTRATION OF COMPENSATION. The
Company strives to fairly balance compensation for individuals within
the Company as well as between the Company and comparable companies.
The Company's executive compensation program consists of three primary
elements: base salaries, annual incentives and stock options which are
described below. Executive Officers are also eligible to receive other benefits
which are generally available to all full-time employees of the Company.
11.
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BASE SALARY
In order to achieve the Company's objective to attract and retain a highly
qualified executive team, the base salaries of Executive Officers are
established at levels which are consistent with the average amounts paid by
competing public and private companies with comparable operations. Each
executive's base salary is then established after considering individual
performance, experience and level of responsibility.
ANNUAL INCENTIVES
The Company's annual executive incentive program, which includes the Chief
Executive Officer, Executive Officers (including Named Executive Officers) and
other key management employees, is intended to motivate and reward participants
for their contribution toward the attainment of the Company's annual performance
targets, typically including pre-tax income, earnings per share, cash flow, and
certain operational and strategic goals which may vary from period to period
such as land use approvals, project financing, corporate financing,
acquisitions/joint ventures and organizational development. The aggregate
amount of the Company's annual incentive pool is based on a percentage of the
Company's pre-tax income. This amount is allocated to program participants
based on the Company's performance and the individual performance and
contribution of participants. Participants in the annual executive incentive
program are also eligible for annual incentives available to all Company
employees through the Company's Performance Improvement Incentive Plan, which
provides for awards of up to a maximum of 15% of the employee's base salary
based on the Company's achievement of targeted performance objectives. The
Company did not meet its performance targets for the 1996 fiscal year.
Accordingly, no individual annual incentives were awarded by the Company in the
1996 fiscal year.
STOCK OPTIONS
Executive Officers are eligible to receive periodic grants of stock options
pursuant to the 1993 Plan. These stock options closely align the interests of
executives and stockholders as the ultimate value received by option holders is
directly related to increases in the Company's stock price.
Rodney L. Gilliland received a stock option grant for 25,000 shares of
Class A Common Stock in connection with his employment as the Company's Senior
Vice President, Sales and Marketing. No other options were granted to any other
Named Executive Officers in the 1996 fiscal year.
The Compensation Committee intends to evaluate additional grants annually
for the Named Executive Officers and other key personnel.
CHIEF EXECUTIVE OFFICER COMPENSATION
Based upon competitive salary information, Mr. Moynahan's base salary for
the 1996 fiscal year was adjusted to $250,000 from the $225,000 annual rate
established in December 1993.
DEDUCTION LIMIT FOR EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code (``Section 162(m)'') limits
federal income tax deductions for compensation paid to the Chief Executive
Officer and the four other most highly compensated officers of a public company
to $1 million per year, but contains an exception for performance-based
compensation that satisfies certain conditions.
The Company believes that stock options granted to its executives currently
qualify for the performance-based exception to the deduction limit. In
addition, future amendments to the plan under which those options are granted
may be necessary to preserve such qualification in the future.
12.
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While it is unlikely that other compensation payable to any Executive
Officer would exceed the deduction limit in the near future, the Compensation
Committee has not yet considered whether it will seek to qualify compensation
other than options for the performance-based exception or will prohibit the
payment of compensation that would exceed the deduction limit. However, in
approving the amount and form of compensation for Executive Officers, the
Compensation Committee will continue to consider all elements of cost to the
Company of providing that compensation.
Submitted by the Compensation Committee of the Company's Board of
Directors:
David A. Heenan, Chairman
John W.A. Buyers
Clinton R. Churchill
13.
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PERFORMANCE GRAPH
The following performance graph shows the percentage change in cumulative
total return to a holder of the Company's Class A Common Stock, assuming
dividend reinvestment, compared with the cumulative total return, assuming
dividend reinvestment, of the Standard & Poor's 500 Stock Index and the peer
group indicated below, during the period from December 14, 1993 through
March 31, 1996.
COMPARISON OF CUMULATIVE TOTAL RETURN*
DECEMBER 14, 1993 TO MARCH 31, 1996
[GRAPH]
PEER GROUP
CENTEX CORP
CONTINENTAL HOMES
HOLDGS CORP
D R HORTON LENNAR CORP
ENGLE HOMES ORIOLE HOMES CORP SCHULER HOMES INC
HOVNANIAN ENTR PRESLEY COS/DE STANDARD PACIFIC UDC HOMES INC
INCO HOMES CORP PULTE CORP SUNDANCE HOMES INC WASH HOMES INC
KAUFMAN & BROAD HOME RYLAND GRP INC TOLL BROS INC WEBB(DEL E) CORP
12/14/93 3/31/94 3/31/95 3/31/96
C. BREWER HOMES, INC. $100.00 $104.13 $49.98 $34.89
S&P 500 STOCK INDEX $100.00 $97.55 $112.74 $148.93
PEER GROUP $100.00 $89.96 $69.69 $82.34
* $100 invested on 12/14/93 in stock, group or index.
14.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
John W.A. Buyers was a member of the Compensation Committee of the Board of
Directors of the Company during the last fiscal year. Mr. Buyers is also the
Chairman of the Board of Directors of the Company, as well as the Chairman,
President and Chief Executive Officer of Buyco and Chairman and Chief Executive
Officer of CBCL. Mr. Buyers owns greater than ten percent of the outstanding
shares of Buyco, of which CBCL is a wholly owned subsidiary.
RELATIONSHIP WITH C. BREWER AND COMPANY, LIMITED
The Company was initially incorporated in the State of Hawaii in
October 1970. (The Company changed its state of incorporation from Hawaii to
Delaware in October 1994.) Prior to the Initial Public Offering, the Company
was a wholly owned subsidiary of CBCL, which is a wholly owned subsidiary of
Buyco. Buyco is the common parent of an affiliated group of corporations formed
in connection with the acquisition of CBCL in 1986. Initially a trading
company, in 1876 CBCL's business became principally focused on the operation of
sugar plantations and, over the subsequent years, CBCL increased its
landholdings to support this business. In the late 1970s and early 1980s, CBCL
diversified into other businesses, including the growing, packaging and
marketing of macadamia nut, guava, and coffee products, as well as the
distribution of industrial products and services. CBCL was an independent,
publicly traded company listed on the New York Stock Exchange until 1978, when
it was acquired by International Utilities Corporation. In 1986, a group of
investors led by John W.A. Buyers, CBCL's Chairman, President and Chief
Executive Officer, formed Buyco, which completed a leveraged buyout of CBCL.
In connection with the Initial Public Offering, the Company and CBCL
entered into a number of agreements for the purpose of defining their ongoing
relationship. These agreements were not the result of negotiations between
independent parties. There can be no assurance that each of such agreements is,
or that all of the agreements taken as a whole are, on terms comparable to those
that would have resulted from negotiations between unaffiliated parties.
Additional or modified agreements, arrangements and transactions may be entered
into by the Company and CBCL and its affiliates. Any such future agreements,
arrangements and transactions will be determined through negotiation among the
Company, CBCL and its affiliates, as the case may be, and it is possible that
conflicts of interest may arise. The Conflicts Committee of the Board of
Directors will resolve such conflicts of interest.
Set forth below are summaries of certain agreements, arrangements and
transactions among the Company, CBCL and certain of their affiliates. Copies of
such agreements are included as exhibits to the Company's Registration Statement
on Form S-1, and the following discussions with respect to such agreements are
qualified in their entirety by reference to the agreements as filed with the
Securities and Exchange Commission.
INTERCOMPANY AGREEMENT
Management Services. The Intercompany Agreement provides that CBCL will
make available to the Company, at the Company's request, various services to the
Company, including human resources and risk management. The Company will pay
CBCL monthly the fully burdened cost of such services, including where
appropriate, a reasonable allocation of the costs of data processing facilities,
wage and fringe benefit costs, and occupancy and material costs. In addition,
CBCL will be reimbursed for any out-of-pocket expenses incurred in connection
with providing the services, as well as for extraordinary services.
The agreement between the Company and CBCL regarding provision of services
renews automatically for one-year periods unless written notice of termination
by either party is received by the other party not less than 60 days prior to
the end of the applicable term. CBCL makes no representations or warranties
with respect
15.
<PAGE>
to services provided under the Intercompany Agreement, except that CBCL agrees
to perform such services with the same degree of care, skill and prudence
customarily exercised in its own operations. CBCL will not be liable for any
losses or damages suffered in respect of services performed under the
Intercompany Agreement, other than losses or damages arising from CBCL's
intentional or negligent failure to perform or its negligence in the performance
of such services.
Access to Information. The Intercompany Agreement provides that each of
CBCL and the Company will be granted access to certain records and information
in the possession of the other party. The Intercompany Agreement generally
requires each party to retain all such information in its possession until
December 1996 (other than tax returns and related documents, which may be
requested to be retained for a longer period), and thereafter to give the other
party prior notice of any planned disposition of such information.
Insurance. The Intercompany Agreement requires CBCL to provide insurance
coverage to the Company under insurance policies issued to CBCL and CBCL's
self-insurance programs, and requires the Company to pay a premium for such
coverage, subject to renegotiation annually. The insurance includes property
damage, builders' risk, general and automobile liability, workers' compensation,
blanket crime and fiduciary liability. Risks not covered under such policies or
programs will be borne by the Company. Either party may terminate the insurance
coverage, in whole but not in part, upon 120 days' prior written notice. If the
Company terminates the insurance coverage, the Company will nonetheless be
obligated to pay the then-current annual premium. If CBCL terminates the
insurance coverage, the Company will receive a pro-rata refund on the premium
paid. The Intercompany Agreement also provides for the allocation of proceeds
under existing insurance policies between CBCL and the Company after the Initial
Public Offering and sets forth procedures for the administration of insured
claims.
Trademark License. Under the Intercompany Agreement, CBCL granted to the
Company in perpetuity (subject to the conditions described below) an exclusive
royalty-free right and license to use the trade name, trademark and service mark
``C. Brewer'' as the distinctive portion of the Company's name and in connection
with the development and sale of residential real estate. The Company may
sublicense the trademark and may change the form and manner of the trademark, in
each case subject to the prior written approval of CBCL, which shall not be
unreasonably withheld. As a condition of the trademark license, the Company
must maintain quality control standards, policies and procedures acceptable to
CBCL. The trademark license may be terminated by CBCL only upon an uncured
material breach of the section of the Intercompany Agreement relating to the
trademark license or upon the insolvency or liquidation of the Company.
Taxes. Pursuant to the Intercompany Agreement, Buyco, CBCL and their
affiliated companies (other than the Company) paid all federal and state income
taxes and other taxes accrued to the Buyco affiliated group of corporations
prior to the Initial Public Offering and paid all taxes arising from the Initial
Public Offering (including any taxes resulting from the transfer of assets to
CBCL and its affiliates pursuant to the restructuring in connection with the
Initial Public Offering); and the Company paid all taxes associated with the
Company's operations accrued during 1993 and thereafter and certain fees and
conveyance taxes arising from the transfer of assets from the Company to
affiliates of CBCL as part of the restructuring.
ASSET EXCHANGE AGREEMENT AND CONTRIBUTION AGREEMENT
Allocation of Assets and Liabilities. The Company, CBCL and certain of
their subsidiaries entered into an Asset Exchange Agreement (the ``Asset
Exchange Agreement'') and a Contribution Agreement (the ``Contribution
Agreement''), which together provided for the principal corporate transactions
required to effect the restructuring, including the transfer to the Company of
CBCL's inventory of entitled land and certain unentitled land at CBCL's
historical cost basis, the transfer by the Company to CBCL of certain
unentitled, undeveloped land as well as the stock of Kilauea Irrigation Co.,
Inc. and the allocation between the Company and CBCL of certain liabilities.
The Asset Exchange Agreement contains representations by the parties thereto
regarding each company's ownership of the real property being transferred by it
in connection with the
16.
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restructuring. The Contribution Agreement contains representations by CBCL and
certain of its subsidiaries regarding their ownership of the real property being
contributed by them to the Company in connection with the restructuring.
Subject to certain exceptions, these agreements provide for assumptions and
cross-indemnities designed to allocate financial responsibility for general
corporate liabilities. The liabilities assumed by the Company include
(i) certain liabilities specifically assumed by the Company arising out of or in
connection with the real property transferred by the Company to CBCL and
(ii) certain liabilities arising under the Securities Act of 1933, as amended.
Liabilities assumed by CBCL include liabilities primarily arising out of or in
connection with real property transferred to the Company by CBCL and to CBCL by
the Company in the restructuring, including environmental liabilities and
liabilities for any deferred or rollback taxes with respect to such property.
Both the Asset Exchange Agreement and the Contribution Agreement include
procedures for notice and payment of indemnification claims and provide that a
party required to indemnify another party for a claim or suit brought by a third
party may elect to assume the defense of such claim. Any indemnification
payments will be adjusted to reflect the receipt of insurance proceeds and the
effect of federal, state and local taxes. In addition, (i) to the extent that
CBCL or any affiliate of CBCL defaults in the making of any indemnification
payments owed to the Company and such default is not cured, the Company may
offset against such defaulted amounts any payments owed by it to CBCL pursuant
to the Option/Right of First Refusal Agreement (as described below) at a rate of
$1.20 for every $1.00 of unpaid indemnification obligation and (ii) to the
extent that the Company defaults in the making of any indemnification payments
owed CBCL or any of its affiliates and such default is not cured, CBCL may
offset against such defaulted amounts any payments owed by it to the Company
pursuant to the Development and Management Services Agreement (described below)
at a rate of $1.20 for every $1.00 of unpaid indemnification obligation.
Office Sublease. The Asset Exchange Agreement provides that CBCL will
sublease approximately 2,800 square feet of office space to the Company in
Honolulu. The aggregate rental expense for this property currently rented to
the Company from CBCL is approximately $150,000 annually. The Company
anticipates that rental obligations under this sublease will terminate in the
1997 fiscal year in connection with the relocation of its corporate headquarters
to the island of Maui.
DEVELOPMENT AND MANAGEMENT SERVICES AGREEMENT
The Company and CBCL entered into a Development and Management Services
Agreement (the ``Development and Management Services Agreement'') pursuant to
which the Company provides certain land entitlement, development (including
planning and engineering) and management services to CBCL. CBCL pays the
Company on a monthly basis the fully burdened cost of such services plus 30%.
In addition, the Company is reimbursed for the actual cost of any out-of-pocket
expenses incurred in connection with providing the services, as well as for
extraordinary services.
The Development and Management Services Agreement will expire in December
1996. The Company and CBCL are presently discussing the possibility of renewal
of this Agreement.
OPTION/RIGHT OF FIRST REFUSAL AGREEMENT
The Company, CBCL and certain of their subsidiaries entered into an
Option/Right of First Refusal Agreement which provides that, among other things,
for 20 years from the date of the Initial Public Offering in December 1993, the
Company will have the option to purchase up to approximately 1,982 acres of
currently unentitled land in the State of Hawaii from CBCL at its fair market
value (less a discount of 3.5% representing customary selling costs avoided by
CBCL) at the time of exercise of the option. The Company will undertake an
appraisal of such property at the time of exercise of the option and will not be
required to purchase any property at a price above such appraisal (less a
discount of 3.5% representing customary selling costs avoided by CBCL). In the
event the Company and CBCL are unable to agree on a fair market value, the fair
market
17.
<PAGE>
value will be determined by a three-party appraisal procedure set forth in the
Option/Right of First Refusal Agreement.
If, prior to the Company's exercise of the option, CBCL desires to sell
such property, the Company will have a right of first offer and a right of first
refusal prior to the sale of such property to a third party upon the same terms
as those available to a third party. Except pursuant to the Development and
Management Services Agreement, for a period of ten years from December 1993,
CBCL is restricted from developing or causing to be developed any of its
properties for residential use. However, CBCL retains the right (i) to
subdivide its properties, (ii) subject to the option and right of first refusal,
to sell its properties, and (iii) subject to the option and right of first
refusal, to hold direct and indirect interests in entities that are engaged in
the planning or construction of such properties, provided that neither CBCL nor
any of its subsidiaries controls any such entity or is actively involved in the
development of such residential real estate. CBCL has agreed that for a period
of five years from December 1993, it will not, without the consent of the
Company's outside directors, take any steps to entitle any property not subject
to the option and right of first refusal. If the Company's outside directors
consent to such entitlement activities or if such property is otherwise
entitled, such property will then become subject to the right of first refusal.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission 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 stockholders are
required by Securities and Exchange Commission regulation to furnish the Company
with copies of all Section 16(a) reports they file.
Based solely upon review of the copies of such reports furnished to the
Company and written representations that no other reports were required, the
Company believes that there was compliance for the fiscal year ended March 31,
1996 with all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than ten percent beneficial owners.
18.
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PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Coopers & Lybrand L.L.P. served as independent public
accountants for the Company for the fiscal year ended March 31, 1996. 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 selection of Coopers & Lybrand L.L.P. by the Board of Directors as
independent public accountants to audit the accounts and records of the Company
for the fiscal year ending March 31, 1997, and to perform other appropriate
services. In the event that stockholders fail to ratify the selection of
Coopers & Lybrand L.L.P., the Board of Directors would reconsider such
selection.
A representative of Coopers & Lybrand L.L.P. will be present at the Annual
Meeting to respond to appropriate questions and to make a statement if such
representative desires to do so.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be considered at the 1997 Annual Meeting
of Stockholders must be received by C. Brewer Homes no later than May 13, 1997.
The proposal must be mailed to the Company's principal executive offices, P.O.
Box 1437, Wailuku, Hawaii 96793, Attention: B.G. Moynahan. 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.
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. Stockholders 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.
By Order of the Board of Directors,
/S/John W.A. Buyers
John W.A. Buyers
CHAIRMAN OF THE BOARD
August 21, 1996
Honolulu, Hawaii
19.
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C. BREWER HOMES, INC.
PROXY
1996 ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 11, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John W.A. Buyers, B.G. Moynahan and Kent T.
Lucien, and each or either of them as Proxies of the undersigned, with full
power of substitution, and hereby authorizes them to represent and to vote, as
designated below, all of the shares of Class A Common Stock and Class B Common
Stock of C. BREWER HOMES, INC. held of record by the undersigned on July 15,
1996 at the 1996 Annual Meeting of Stockholders of C. Brewer Homes, Inc. to be
held on September 11, 1996, or at any adjournment thereof.
IMPORTANT: PLEASE DATE AND SIGN ON REVERSE SIDE
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
<PAGE>
I plan to attend the meeting.
/ /
1. ELECTION OF DIRECTORS
FOR all nominees listed below (Except as marked to the contrary below)
/ /
WITHHOLD AUTHORITY to vote for all nominees listed below
/ /
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent auditors
of the Company.
FOR AGAINST ABSTAIN
/ / / / / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
John W.A. Buyers Clinton R. Churchill David A. Heenan Kent T. Lucien
B.G. Moynahan
3. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NOS. 1 AND 2. THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED ABOVE. THIS PROXY WILL
BE VOTED FOR PROPOSAL NOS. 1 AND 2 IF NO SPECIFICATION IS MADE.
Dated:____________________________________________________________________, 1996
________________________________________________________________________________
Signature
________________________________________________________________________________
(Additional signature if held jointly)
Please sign exactly as your name(s) is (are) shown on the share certificate to
which the Proxy applies. 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 in full corporate
name by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
PLEASE COMPLETE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
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* FOLD AND DETACH HERE *
