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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
WEITZER HOMEBUILDERS INCORPORATED
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(Name of Registrant as Specified In Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PRELIMINARY PROXY MATERIALS
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WEITZER HOMEBUILDERS INCORPORATED
(d/b/a Century Builders Group)
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held on April 20, 2000
TO ALL SHAREHOLDERS OF WEITZER HOMEBUILDERS INCORPORATED:
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of Weitzer
Homebuilders Incorporated (d/b/a Century Builders Group), a Florida corporation,
(the "Company") will be held at the Company's headquarters located at 7270 N.W.
12th Street, Suite 410, Miami, Florida 33126, on April 20, 2000 at 11:00 a.m.,
local time, for the following purposes:
1. To approve an amendment to the Company's Articles of Incorporation to
change the Company's name to "Century Builders Group, Inc."
2. To approve an amendment to the Company's Articles of Incorporation, to
provide for only one class of Common Stock, $.001 par value per share,
and in so doing to effectuate the automatic conversion of outstanding
shares of Class A Common Stock and outstanding shares of Class B
Common Stock into a like number of shares of the Company's newly
designated Common Stock;
3. To approve an amendment to the Company's Articles of Incorporation to
increase the number of authorized shares of Common Stock of the
Company to 75,000,000 shares, $.001 par value per share.
4. To elect six Directors for a term of one year and until their
successors are duly elected and qualified;
5. To ratify the appointment of Deloitte & Touche LLP, as the Company's
independent public accountants for the fiscal year ending December 31,
2000; and
6. To transact such other business as may properly come before the
Special Meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on March 20, 2000, are
entitled to notice of and to vote at the Special Meeting or any adjournments
thereof.
UNDER THE FLORIDA BUSINESS CORPORATION ACT, EACH SHAREHOLDER WHO OBJECTS TO
THE ADOPTION OF THE AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
RELATING TO THE ELIMINATION OF THE TWO CLASSES OF COMMON STOCK SHALL BE ENTITLED
TO ASSERT STATUTORY
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DISSENTERS' RIGHTS; PROVIDED HOWEVER THAT, IN ORDER TO ASSERT SUCH RIGHTS, A
SHAREHOLDER IS REQUIRED TO ADHERE STRICTLY TO CERTAIN STATUTORY REQUIREMENTS.
SHAREHOLDERS INTENDING TO EXERCISE THEIR DISSENTERS' RIGHTS MUST FILE WITH THE
COMPANY BEFORE THE SPECIAL MEETING, OR AT THE SPECIAL MEETING BUT BEFORE THE
VOTE ON SUCH AMENDMENT, A WRITTEN OBJECTION TO SUCH AMENDMENT, INCLUDING A
STATEMENT THAT THEY INTEND TO DEMAND PAYMENT FOR THEIR SHARES IF SUCH AMENDMENT
IS APPROVED. MOREOVER, SHAREHOLDERS SHOULD BE AWARE THAT A PROXY OR VOTE AGAINST
SUCH AMENDMENT SHALL NOT CONSTITUTE SUCH A DEMAND. A STATEMENT WITH RESPECT TO
THE RIGHTS OF DISSENTING SHAREHOLDERS IS SET FORTH IN THE ACCOMPANYING PROXY
STATEMENT.
By Order of the Board of Directors,
KEYLA ALBA-REILLY,
Secretary
Miami, Florida
March 23, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE PROMPTLY
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY, AND RETURN IT TO THE COMPANY. THE PROXY MAY BE
REVOKED AT ANY TIME BEFORE IT IS VOTED, AND SHAREHOLDERS EXECUTING PROXIES MAY
ATTEND THE MEETING AND VOTE IN PERSON, SHOULD THEY SO DESIRE.
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WEITZER HOMEBUILDERS INCORPORATED
(d/b/a Century Builders Group)
7270 N.W. 12th Street
Suite 410
Miami, Florida 33126
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PROXY STATEMENT
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The accompanying proxy is solicited by the Board of Directors of Weitzer
Homebuilders Incorporated (d/b/a Century Builders Group) a Florida corporation
(the "Company"), for the Special Meeting of Shareholders (the "Special
Meeting"), of the Company to be held at the Company's headquarters located at
7270 N.W. 12th Street, Suite 410, Miami, Florida 33126, on April 20, 2000 at
11:00 a.m., local time.
All proxies duly executed and received will be voted on all matters
presented at the Special Meeting in accordance with the instructions given by
such proxies. In the absence of specific instructions, proxies so received will
be voted in favor of the amendments to the Company's Articles of Incorporation
to change the Company's name, to eliminate the two classes of Common Stock
currently outstanding and to provide for only one class of Common Stock, $.001
par value per share, to be so designated as Common Stock, and to increase the
authorized shares of Common Stock of the Company to 75,000,000 shares, $.001 par
value per share; and in favor of all named nominees to the Company's Board of
Directors for the term of one year and until their successors are duly elected
and qualified; and for the ratification of Deloitte & Touche LLP, as the
Company's independent public accountants for the fiscal year ending December 31,
2000. The Board of Directors of the Company does not anticipate that any of the
nominees for election to the Board of Directors will be unavailable for election
and does not know of any other matters that may be brought before the Special
Meeting. In the event that any other matter should come before the Special
Meeting or that any nominee is not available for election, the persons named in
the enclosed proxy will have discretionary authority to vote all proxies not
marked to the contrary with respect to such matter in accordance with their best
judgment. The proxy may be revoked at any time before being voted. The Company
will pay the entire expense of soliciting the proxies, which solicitation will
be by use of the mails. This Proxy Statement is being mailed to shareholders on
or about March 23, 2000.
Only holders of shares of Class A Common Stock and Class B Common Stock of
record at the close of business on March 20, 2000 will be entitled to notice of
and to vote at the Special Meeting and at all adjournments thereof. As of the
close of business on March 20, 2000, the Company had outstanding 33,434,468
shares of Class A Common Stock and 1,500,000 shares of Class B Common Stock, and
no shares of Preferred Stock were outstanding.
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At the Special Meeting, the holders of Class A Common Stock and Class B
Common Stock will be entitled, as a single class, to vote on the amendment to
the Company's Articles of Incorporation relating to the Company's name change,
to elect the nominees to the Company's Board of Directors, and to ratify the
appointment of the independent public accountants. The vote in favor by a
majority of the shares of Class A and Class B Common Stock, voting as a single
class, represented at the Special Meeting is required for the amendment to the
Company's Articles of Incorporation relating to the Company's name change, for
the election of the Directors and for the ratification of the appointment of
Deloitte & Touche LLP, as the Company's independent public accountants. With
respect to the amendments to the Company's Articles of Incorporation relating to
the elimination of the two classes of Common Stock, and the increase in
authorized shares of the Company's Common Stock, as described above, the vote in
favor by a majority of the outstanding shares of each class of Common Stock,
voting as a separate class, is required.
Shares represented by proxies which are marked "abstained" or which are
marked to deny discretionary authority will only be counted for determining the
presence of a quorum. Votes withheld in connection with the election of one or
more of the nominees for Director will not be counted as votes cast for such
individuals. In addition, where brokers are prohibited from exercising
discretionary authority for beneficial owners who have not provided voting
instructions (commonly referred to as "broker non-votes"), those shares will not
be included in the vote totals.
A list of the shareholders entitled to vote at the Special Meeting will be
available at the Company's office, 7270 N.W. 12th Street, Suite 410, Miami,
Florida 33126, for a period of ten (10) days prior to the Special Meeting for
examination by any shareholder.
UNDER THE FLORIDA BUSINESS CORPORATION ACT, EACH SHAREHOLDER WHO OBJECTS TO
THE ADOPTION OF THE AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
RELATING TO THE ELIMINATION OF THE TWO CLASSES OF COMMON STOCK SHALL BE ENTITLED
TO ASSERT STATUTORY DISSENTERS' RIGHTS; PROVIDED HOWEVER THAT, IN ORDER TO
ASSERT SUCH RIGHTS, A SHAREHOLDER IS REQUIRED TO ADHERE STRICTLY TO CERTAIN
STATUTORY REQUIREMENTS. SHAREHOLDERS INTENDING TO EXERCISE THEIR DISSENTERS'
RIGHTS MUST FILE WITH THE COMPANY BEFORE THE SPECIAL MEETING, OR AT THE SPECIAL
MEETING BUT BEFORE THE VOTE ON SUCH AMENDMENT, A WRITTEN OBJECTION TO SUCH
AMENDMENT, INCLUDING A STATEMENT THAT THEY INTEND TO DEMAND PAYMENT FOR THEIR
SHARES IF SUCH AMENDMENT IS APPROVED. MOREOVER, SHAREHOLDERS SHOULD BE AWARE
THAT A PROXY OR VOTE AGAINST SUCH AMENDMENT SHALL NOT CONSTITUTE SUCH A DEMAND.
A STATEMENT WITH RESPECT TO THE RIGHTS OF DISSENTING SHAREHOLDERS IS SET FORTH
HEREINAFTER.
Officers, Directors and affiliates of the Company beneficially own
approximately 92.7% of the outstanding shares of Class A Common Stock and all of
the outstanding shares of Class B Common Stock. Accordingly, with respect to
those proposals, described above, which require the vote of a majority of the
outstanding shares of Class A and Class B Common Stock, voting as separate
classes, or which require the vote of a majority of the outstanding shares of
Common Stock, voting as a single class, represented at the Special Meeting,
approval of all of such proposals is virtually assured.
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PROPOSAL 1
AMENDMENT OF ARTICLES OF INCORPORATION TO CHANGE THE NAME OF
WEITZER HOMEBUILDERS INCORPORATED
The Board of Directors is seeking the approval of an amendment to the
Company's Articles of Incorporation (the "Name Change Amendment"), to change the
name of the Company, to "Century Builders Group, Inc." (the "Name Change"). The
Company has previously filed a fictitious name certificate with the State of
Florida and has and continues to operate using the name Century Builders Group.
In the event such amendment to the Company's Article of Incorporation is not so
approved, the Company intends to continue using its fictitious name.
The Board of Directors of the Company believes that as consequence of the
consummation of the Stock Purchase Agreement, dated as of August 2, 1999, (the
"Purchase Agreement"), by and among the Company, its then affiliate, Chai
Capital, Ltd ("Chai"), and Century Partners Group, Ltd., ("Century"), and the
resulting change in control of the Company pursuant to which Century became the
majority beneficial equity owner of the Company, the Name Change would be
appropriate. In addition, the Board of Directors of the Company believes that
the Name Change will assist the Company in developing new marketing and sales
strategies and would afford the Company improved recognition in those markets
where the Century name is believed known. Moreover, said Purchase Agreement
requires that the Company use its best efforts to effectuate such Name Change.
Attached to this Proxy Statement as Exhibit A is the proposed amendment to
the Company's Articles of Incorporation with respect to the Name Change.
Shareholders are urged to review Exhibit A with respect to the same.
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Class A Common Stock and Class B Common Stock voting as a
single class and represented at the Special Meeting, is required to amend the
Company's Articles of Incorporation to approve the Name Change.
The Board of Directors recommends a vote "FOR" Proposal No. 1.
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PROPOSAL NO. 2
AMENDMENT
OF ARTICLES OF INCORPORATION TO PROVIDE FOR
ONE CLASS OF COMMON STOCK
The Board of Directors has determined that it is in the best interests of
the Company to amend the Company's Articles of Incorporation to provide for a
single class of Common Stock, par value $.001 per share, to be so designated as
"Common Stock." The authorized Preferred Stock of the Company, of which no
shares are currently outstanding, will not be affected by such change. To
effectuate the foregoing, the Board of Directors has proposed that each
outstanding share of Class A Common Stock and each outstanding share of Class B
Common Stock of the Company would, upon adoption of such amendment to the
Articles of Incorporation and the filing of the same with the State of Florida,
be automatically converted into one share of the Company's Common Stock, $.001
par value per share. Accordingly, for every share of either Class A or Class B
Common Stock held of record by a holder, upon adoption and filing of such
amendment, such share would be deemed automatically canceled and would instead
represent one share of the Company's Common Stock, $.001 par value. If the
amendment is so approved, the Company will notify each holder of shares as to
how to exchange such share certificate representing shares of either Class A or
Class B Common Stock into shares of Common Stock on a one-for one basis.
The Articles of Incorporation of the Company presently provide that until
the Company has attained operating income (as defined in the Articles of
Incorporation) of $7,500,000, holders of Class A Common Stock and Class B Common
Stock are entitled to receive, if, when and as declared by the Board of
Directors of the Company, cumulative cash dividends at the rate of $0.325 per
share of Class A Common Stock per annum and $.001 per share of Class B Common
Stock per annum, respectively, each payable on the fifteenth day of August,
November, February and May of each year, commencing August 15, 1995. No
dividends may be paid on the Class B Common Stock unless, simultaneously, all
accumulated and unpaid dividends on the Class A Common Stock have been declared
and paid in full.
Until May 15, 1996, the Company had been paying the cumulative dividends in
cash. Commencing as of August 15, 1996, the Board of Directors of the Company
determined that it would be in the Company's best interests to maximize the
Company's cash flow from operations and cease paying any cash dividends. As of
December 31, 1999, the Company had approximately $6,800,000 of unpaid cumulative
dividends on its Class A Common Stock, none of which were accrued on the
Company's books and records. Since August 1996, no record date was ever
declared by the Company's Board of Directors for the payment of such cash
dividends. In addition, as a consequence of the sole holder of the Company's
Class B Common Stock and its assignee waiving such dividends, as of December 31,
1999, there were no unpaid cumulative dividends on the Company's Class B Common
Stock.
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In connection with the amendment to the Company's Articles of Incorporation
to provide for a single class of Common Stock, such amendment would have the
effect of eliminating the requirement that the Company pay a cumulative dividend
on such shares of Common Stock. Any and all future dividends on the Common
Stock of the Company may thereafter only be declared at the discretion of the
Company's Board of Directors. The Company's Board of Directors has no current
intention of declaring any cash dividends with respect to the Company's Common
Stock and intends to use all retained earnings, if any, for working capital
purposes. No assurance can be given when, if ever, the Company will declare a
cash dividend on its capital stock.
In addition, in connection with the conversion of the outstanding shares of
Class A and Class B Common Stock into a like number of shares of Common Stock,
all unpaid dividends, irrespective of whether such dividends were accrued on the
Company's books and records, would be deemed automatically waived, and no
shareholder, irrespective of whether such shareholder is a holder of Class A or
Class B shares of Common Stock, would be entitled to share in any of such
dividends (accrued or otherwise). Accordingly, the approval of the amendment to
the Company's Articles of Incorporation would result in the cancellation of any
right by a shareholder of Class A or Class B Common Stock of the Company to any
such dividends.
Currently, the Company's authorized capital stock consists of 40,000,000
shares of Class A Common Stock, $.01 par value per share, 1,500,000 shares of
Class B Common Stock, $.01 par value per share, and 5,000,000 shares of
Preferred Stock, $.01 par value per share. Upon approval of Proposal No. 2, and
without taking into account the proposed increase in the authorized Common
Stock, as described in Proposal No. 3 below, the Company's authorized capital
stock would consist of 40,000,000 shares of Common Stock, $.001 par value per
share, and 5,000,000 shares of Preferred Stock, $.01 par value per share.
The Articles of Incorporation of the Company currently provide that the
Class B Common Stock may be converted into a like number of shares of Class A
Common Stock, at the option of the holder, only if, among other things, the
Company achieves an aggregate operating income (as defined in the Articles of
Incorporation) of $7,500,000. The adoption of Proposal No. 2 would effectively
eliminate the aforesaid financial criteria and automatically convert each
outstanding share of Class B Common Stock, together with the outstanding shares
of Class A Common Stock into a like number of shares of Common Stock. The Board
of Directors of the Company believes that the approval of the amendment to the
Company's Articles of Incorporation to eliminate the two classes of Common Stock
and in so doing so to eliminate the cumulative dividend would enable the Company
to more easily attract new investors in the future, and if desired, would enable
the Company to more easily procure additional financing on terms deemed
favorable by the Company. The elimination of the complex corporate structure
and the elimination of the cumulative dividend, whether accrued or not, in the
Board of Directors of the Company's belief would provide the Company with the
flexibility necessary to attract financing opportunities, when and if the need
and/or opportunity arises.
Since the Board of Directors of the Company has never established a record
date for the payment of any cumulative dividends, in the event the proposed
amendment is not approved, and the
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Company determines to so pay the cumulative dividend on its Class A and Class B
Common Stock, the Company would have to establish a current record date for the
payment of such dividends. Accordingly, Officers, Directors and affiliates of
the Company would be entitled to share in excess of 92% of such dividend
payment. The Board of Directors believes that it is in the best interests of the
Company that such cash remain in the Company to fund, in part, the Company's
working capital requirements.
The affirmative vote of (i) the holders of a majority of the outstanding
shares of the Company's Class A Common Stock voting as a separate class and (ii)
the holders of a majority of the Company's Class B Common Stock voting as a
separate class, is required to amend the Company's Articles of Incorporation, to
eliminate the two classes of Common Stock as described above. Officers,
Directors and affiliates of the Company have expressed their intent to vote all
shares of Class A Common Stock owned of record by them in favor of Proposal No.
2. In addition, Century, as the sole shareholder of Class B Common Stock, has
expressed its intent to vote all of said shares of Class B Common Stock owned of
record by it in favor of said Proposal No. 2. Accordingly, approval of Proposal
No. 2 is therefore virtually assured.
The Board of Directors recommends a vote "FOR" Proposal No. 2.
RIGHTS OF DISSENTING SHAREHOLDERS WITH RESPECT TO PROPOSAL NO. 2
Holders of Class A and/or Class B Common Stock are entitled to dissenters'
rights under Sections 607.1301, 607.1302 and 607.1320 of the Florida Business
Corporation Act (the "FBCA"), in connection with the conversion of outstanding
shares of Class A and Class B Common Stock into shares of Common Stock, the
elimination of the accrued dividend, the elimination of all dividends in arrears
and the elimination of cumulative dividend rights. All references in Sections
607.1301, 607.1302 and 607.1320 and in this summary to a "shareholder" are to
the recordholders of the Company's Class A or Class B Common Stock as to which
dissenters' rights are asserted. A person having a beneficial interest in the
Company's Class A or Class B Common Stock that is held of record in the name of
another person, such as a broker or nominee, must act promptly to cause the
recordholder to follow the steps summarized below properly and in a timely
manner to perfect whatever dissenters' rights the beneficial owner may have.
Holders of the Company's Class A or Class B Common Stock who follow the
procedure set forth in Section 607.1320 of the FBCA ("Section 607.1320") will be
entitled to receive payment of the "fair value" of such Common Stock. Section
607.1301 of FBCA ("Section 607.1301") defines "fair value" to be the value of
the Company's Class A or Class B Common Stock as of the close of business on the
date prior to the date of shareholder approval of Proposal No. 2, excluding any
appreciation or depreciation in anticipation of approval of such amendment,
unless exclusion would be inequitable.
This Proxy Statement shall constitute notice to the shareholders of the
Company of the ability of the Company's shareholders to dissent from approval of
the aforesaid amendment (Proposal No. 2)
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to the Articles of Incorporation eliminating the two classes of Common Stock;
and the proposed amendment to the Articles of Incorporation and the applicable
statutory provisions of the FBCA are attached to this Proxy Statement as
Exhibits A and B, respectively. The following discussion is not a complete
statement of the law pertaining to dissenters' rights under the FBCA and is
qualified in its entirety by the full text of Sections 607.1301, 607.1302 and
607.1320 of the FBCA attached to this Proxy Statement. Any shareholder who
wishes to exercise such dissenters' rights or who wishes to preserve his right
to do so, should review the following discussion and Exhibit B carefully because
failure to timely and properly comply with the procedures specified will result
in the loss of dissenters' rights under the FBCA.
Each shareholder who wishes to assert dissenters' rights must (i) deliver
to the Company, before the taking of the vote on Proposal No. 2, a written
notice of intent to demand payment for the Company's Class A or Class B Common
Stock if the proposed amendment is approved, and (ii) not vote his Class A or
Class B Common Stock in favor of the proposed amendment. Because an executed
proxy which does not contain voting instructions will, unless revoked, be voted
for adoption of the amendment, a shareholder who votes by proxy and who wishes
to exercise his dissenters' rights must (i) vote against adoption of the
amendment, or (ii) abstain from voting on adoption of the amendment. A vote
against adoption of the amendment, in person or by proxy, will not in and of
itself constitute a written notice of intent to demand payments for the
Company's Class A or Class B Common Stock satisfying the requirements of Section
607.1320.
Only a holder of record of the Company's Class A and Class B Common Stock
is entitled to assert dissenters' rights for the Class A or Class B Common Stock
registered in that holders' name. A notice of intent to demand payment for
Class A or Class B Common Stock must be executed by or on behalf of the holder
of record, fully and correctly, as his name appears on his stock certificates.
If the Class A or Class B Common Stock is owned of record in a fiduciary
capacity, such as by a trustee, guardian or custodian, execution of the notice
should be made in that capacity, and if the Class A or Class B Common Stock is
owned of record by more than one person, as in a joint tenancy or tenancy in
common, the notice should be executed by or on behalf of all joint owners. An
authorized agent, including one or two or more joint owners, may execute a
notice on behalf of a holder of record; however, the agent must identify the
record owner or owners and expressly disclose the fact that, in executing the
notice, the agent is acting as agent for such owner or owners. A record holder,
such as a broker, who holds Class A or Class B Common Stock as nominee for
several beneficial owners may exercise dissenters' rights with respect to the
Class A or Class B Common Stock held for one or more beneficial owners while not
exercising such rights with respect to the Class A or Class B Common Stock held
for other beneficial owners. In such case, the notice should set forth the
number of Class A or Class B Common Stock as to which dissenters' rights are
sought. Where no number of shares of Class A or Class B Common Stock is
expressly mentioned, the demand will be presumed to cover all Class A or Class B
Common Stock held in the name of the record owner. Shareholders who hold their
Class A or Class B Common Stock in brokerage accounts or other nominee forms and
who wish to exercise dissenters' rights are urged to consult with their brokers
to determine the appropriate procedures for the making of a notice of intent to
demand payment for such nominee's Class A or Class B Common Stock.
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Within ten days after the date of shareholder approval of the amendment,
the Company must give written notice of adoption of the amendment to each
shareholder who filed a notice of intent to demand payment for his Class A or
Class B Common Stock. Within twenty days after the giving of such notice to him
by the Company, any shareholder who elects to dissent must file with the Company
a notice of such election, stating his name and address, the number of shares of
Class A or Class B Common Stock as to which he dissents, and a demand for
payment of the fair value of his Class A or Class B Common Stock. Any
shareholder filing an election to dissent shall deposit his stock certificates
with the Company simultaneously with the filing of the election to dissent.
Within ten days after the expiration of the period in which shareholders
may file their notices of election to dissent, or within ten days after the
amendment is approved, whichever is later (but in no case later than ninety days
from the date of shareholder approval of such amendment), the Company shall make
a written offer to each dissenting shareholder who has made a demand as provided
in Section 607.1320 to pay an amount the Company estimates to be the fair value
for such Class A or Class B Common Stock. The fair value determined will
reflect the value of the Common Stock prior to the adoption of the amendment
which is the subject of Proposal No. 2.
Any shareholder who has duly filed a notice of election to dissent in
compliance with Section 607.1320 will thereafter be entitled only to payment of
the fair value of his Class A or Class B Common Stock and will not be entitled
to vote or to exercise any other rights of a shareholder. A notice of election
may be withdrawn in writing by the shareholder at any time before an offer is
made by the Company to pay for his Class A or Class B Common Stock. After such
offer, no such notice of election may be withdrawn unless the Company consents
thereto.
If within thirty days after the making of such offer by the Company, any
shareholder accepts the same, payment for his Class A or Class B Common Stock
will be made within ninety days after the making of such offer or the
effectuation of such amendment to the Articles of Incorporation, whichever is
later. Upon payment of the agreed value, the dissenting shareholder will cease
to have any interest in such Class A or Class B Common Stock.
If the Company fails to make an offer for the fair value of the Class A or
Class B Common Stock within the period specified above, or if the Company makes
the offer and any dissenting shareholder or shareholders fail to accept the same
within the period of thirty days thereafter, then the Company, within thirty
days after receipt of written demand from any dissenting shareholder given
within sixty days after the date of which the amendment to the Articles of
Incorporation was adopted, shall, or at its election at any time within such
period of sixty days may, file an action in any court of competent jurisdiction
in Miami-Dade County, Florida requesting the fair value of such Class A or
Class B Common Stock to be determined. The court shall also determine whether
each dissenting shareholder, as to whom the Company requests the court to make
such determination, is entitled to receive payment for his Class A or Class B
Common Stock. If the Company fails to institute such a proceeding, any
dissenting shareholder may do so in the name of the Company. All dissenting
shareholders (whether or not residents of the State of Florida), other than
shareholders
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who have agreed with the Company as to the value of their Class A or Class B
Common Stock, shall be made parties to the proceeding. The Company must pay to
each dissenting shareholder the amount found to be due him within ten days after
final determination of the proceedings. Upon payment of the judgment, the
dissenting shareholders will cease to have any interest in such Class A or Class
B Common Stock.
Shareholders considering seeking dissenters' rights should be aware that
any judicial determination of the "fair value" of the Class A or Class B Common
Stock can be based on numerous considerations, including, but not limited to,
the market value of the Class A or Class B Common Stock prior to the adoption of
Proposal No. 2 and the net asset value and earnings value of the Company. The
costs and expenses of any judicial proceeding will be determined by the court
and will be assessed against the Company, but all or any part of such costs and
expenses may be apportioned and assessed as the court deems equitable against
any or all of the dissenting shareholders who are parties to the proceeding, to
whom the Company has made an offer to pay for the Class A or Class B Common
Stock, if the court finds that the action of such shareholders in failing to
accept such offer was arbitrary, vexatious, or not in good faith.
Failure to follow the steps required by Section 607.1320 for perfecting
dissenters' rights may result in the loss of such rights, in which event a
shareholder will not be entitled to seek any cash consideration in exchange for
his shares.
A copy of the proposed amendment to the Company's Articles of Incorporation
is attached hereto as Exhibit A and is incorporated herein by reference. All
shareholders are urged to review the attached Exhibit A. In addition, all
shareholders are urged to review the attached Exhibit B, setting forth the
applicable statute with respect to a shareholder's dissenters' rights.
9
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PROPOSAL NO. 3
APPROVAL OF AN AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF
COMMON STOCK
Assuming the adoption of Proposal No. 2, as described above, the Company is
presently authorized to issue 40,000,000 shares of Common Stock, $.001 par value
per share, and 5,000,000 shares of Preferred Stock, $.01 par value per share.
As of December 31, 1999, of the 40,000,000 shares of Common Stock authorized,
34,925,068 shares were issued and outstanding. In addition, approximately
772,150 shares of Common Stock were reserved for issuance upon the exercise of
outstanding derivative securities, including options and warrants. Accordingly,
approximately 4,302,782 shares of Common Stock are currently available for
issuance by the Company. There are no shares of Preferred Stock currently
issued and outstanding.
The Board of Directors of the Company has adopted resolutions to amend,
subject to stockholder approval, the Company's Articles of Incorporation to
authorize an additional 35,000,000 shares of Common Stock, $.001 par value per
share. A copy of the proposed amendments, in substantially the form to be filed
with the Secretary of State of the State of Florida is attached hereto as part
of Exhibit A, and incorporated herein by reference. All stockholders are urged
to carefully review the attached Exhibit.
The 35,000,000 additional shares of Common Stock to be authorized would be
available to the Company for stock dividends and/or stock splits should the
Board of Directors decide that it would be desirable, in light of market
conditions then prevailing, to broaden the ownership of, and to enhance the
market for, the shares of Common Stock of the Company. Additional shares of the
Common Stock would also provide needed flexibility for future financial and
capital requirements so that proper advantage could be taken of propitious
market conditions and possible business acquisitions. The additional shares
would be available for issuance for these and other purposes, subject to the
laws of the State of Florida and the rules of any stock exchange or inter-dealer
quotation system on which the Company's securities may then be listed, at the
discretion of the Board of Directors of the Company without, in most cases, the
delays and expenses attendant to obtaining further shareholder approval. To the
extent required by Florida law, shareholder approval will be solicited in the
event shares of stock are to be issued in connection with a merger. The Company
has no current plans to issue any of the additional shares of Common Stock to be
authorized under the proposed amendment to the Company's Articles of
Incorporation.
Although the Board of Directors of the Company does not deem the proposed
amendment to the Company's Articles of Incorporation to be an anti-takeover
proposal, the ability to issue additional shares of Common Stock could also be
used to discourage hostile takeover attempts of the Company. The additional
shares could be privately placed, thereby diluting the stock ownership of
10
<PAGE>
persons seeking to obtain control of the Company. Moreover, the Company's
Officers, Directors and affiliates currently beneficially own approximately in
excess of 88% of the Company's Common Stock. Accordingly, even if the proposed
increase in the number of authorized shares of Common Stock is deemed to be an
anti-takeover proposal, the Company's Officers, Directors and affiliates may
have the ability to direct the disposition of any matter to be acted upon
irrespective of the number of authorized shares of Common Stock available for
future issuance.
The affirmative vote of (i) the holders of a majority of the outstanding
shares of the Company's Class A Common Stock voting as a separate class and (ii)
the holders of a majority of the Company's Class B Common Stock voting as a
separate class, is required to amend the Company's Articles of Incorporation, to
increase the number of authorized shares of Common Stock. Officers, Directors
and affiliates of the Company have expressed their intent to vote all shares of
Class A Common Stock owned of record by them in favor of Proposal No. 3. In
addition, Century, as the sole shareholder of Class B Common Stock, has
expressed its intent to vote all of said shares of Class B Common Stock owned of
record by it in favor of said Proposal No. 3. Accordingly, approval of Proposal
No. 3 is therefore virtually assured.
The Company has determined that it will not implement Proposal No. 3 in the
event Proposal No.2 is not approved by the Company's shareholders.
The Board of Directors recommends a vote "FOR" Proposal No. 3.
11
<PAGE>
PROPOSAL NO. 4
ELECTION OF DIRECTORS
Nominees for Director
Six Directors are to be elected at the Special Meeting of Shareholders.
The six nominees named below, if elected, at the meeting will serve for a term
of one year and until their successors are duly elected and qualified. In the
event that any nominee is unable or unwilling to serve, discretionary authority
is reserved to the persons named in the accompanying form of proxy to vote for
substitute nominees. It is not anticipated that such an event will occur. Each
Director must be elected by a majority of the outstanding shares of Class A
Common Stock and Class B Common Stock, voting as a single class, represented at
the Special Meeting by a plurality of the votes cast.
Three nominees for Director are currently serving as members of the
Company's Board of Directors. Such nominees were elected by the then Directors
of the Company following the consummation of the Purchase Agreement, described
under Proposal No. 1 above, to fill certain vacancies on the Board. Three
current members of the Board of Directors Harry Weitzer, Michael Ambrosio and
Larry Hellring are not standing for re-election.
Sergio Pino, age 43, has served as Chairman of the Board, President and
Chief Executive Officer of the Company since August 1999. Mr. Pino, since its
formation in January 1977, has also served as President and Chief Executive
Officer of Century Partners Group, Ltd., a company engaged in the business of
real estate development in South Florida of which Mr. Pino is the principal
shareholder. Mr. Pino also founded Century Plumbing Wholesale, Inc. in November
1977. Mr. Pino has served as President of the Latin Builders Association from
1989 until 1992, as a Director of Union Planters Bank from 1999 until the
present and is a member of the Greater Miami Chamber of Commerce and
C.A.M.A.C.O.L., the Latin Chamber of Commerce.
Armando J. Guerra, age 48, has served as a member of the Company's Board of
Directors from August 1999 until the present. Mr. Guerra has and continues to
serve as President of Sedano's Pharmacy and Discount Stores, Inc., which he
founded in May 1977 and currently operates as a 13 unit chain of pharmacies in
South Florida. Mr. Guerra is also Vice President of Sedano's Supermarkets,
Inc., a 27 unit chain of retail food markets, and has served in such capacity
since 1977. Mr. Guerra is an honorary director of the Latin Builders Association
and a director of the regional Board of Union Planters Bank. Mr. Guerra also
serves as a director of the American Red Cross blood services.
Jose Cancela, age 42, has served as a member of the Company's Board of
Directors from August 1999 until the present. Mr. Cancela has served as
President of Radio Unica Corp. since July 1998 and oversees the day-to-day
operations of Radio Unica Network, a Spanish-language radio network. Mr.
Cancela also served as Executive Vice President of Telemundo, a Spanish-language
12
<PAGE>
television network from 1992 to 1998. Mr. Cancela has more than 20 years of
media industry experience, including 13 years with Univision, also a television
network. Mr. Cancela is the current Chairman of the Greater Miami Chamber of
Commerce and is Chairman of the Advisory Board of First Union Bank of Miami-Dade
and Monroe Counties. Mr. Cancela also served as Chairman of the Public Health
Trust of Jackson Memorial Hospital from 1990 to 1992.
Gabriel M. Bustamante, age 44, a certified public accountant, is the
managing partner of the accounting firm of Bustamante, Nunez & Company, and has
served in such capacity since 1985. Mr. Bustamante is a Magna Cum Laude
graduate of Florida International University, where he received a bachelor's
degree in Business Administration with a major in Management and Accounting. He
was previously associated with Price Waterhouse as a manager, and practiced
public accounting for five years in both audit and taxation. Mr. Bustamante is
a member of the American Institute of Certified Public Accountants (AICPA) and
the Florida Institute of Certified Public Accountants (FICPA). He has served as
a member of the Board of Directors of the South Dade Chapter of the FICPA. He
has chaired the Coral Gables Chamber of Commerce. He is a former director of
Hamilton Bank, N.A. and has served on the City of Coral Gables Budget and Audit
Advisory Board. In February 1999, Florida Governor Jeb Bush appointed Mr.
Bustamante to serve on the City of Miami Financial Oversight Board.
Carlos Garcia, age 48, is a businessman active in the real estate and
firearms industries. Mr. Garcia is a fifty percent shareholder and secretary of
2-C Development, Inc., a construction firm founded in 1988. Such company
specializes in the development and management of several apartment building
projects. Mr. Garcia also is president of CMG Properties, Inc., a shopping
center development company, and he has served in such capacity since 1998. Mr.
Garcia's experience in the firearms industry began in 1973 when he founded
Garcia's National Gun, Inc., a retail gun store.
Humberto Lorenzo, age 62, has been active in the South Florida building
industry since 1970. Mr. Lorenzo formed his own company H&J Paving Corp. in
1974. In 1988 he founded H&J Asphalt Inc., a company which provides asphalt for
projects throughout Miami-Dade County. Mr. Lorenzo serves on the board of the
Hispanic American Builders Association and the Cuban American National
Foundation.
The vote of a majority of the shares of Class A and Class B Common Stock
represented at the Special Meeting, voting as a single class, is required for
the election of such nominees.
The Board of Directors recommends that shareholders vote "FOR" each nominee
for Director.
13
<PAGE>
PROPOSAL 5
RATIFY THE APPOINTMENT OF THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has retained Deloitte & Touche LLP, effective November 30 1999,
as its independent public accountants for the fiscal year ending September 30,
1999. The Company has also retained Deloitte & Touche LLP, as its independent
public accountants for the Company's fiscal year ending December 31, 2000,
subject to shareholder ratification. The Company is in the process of changing
its fiscal year to end as of December 31. To the extent the Company is unable
to so change its fiscal year without undue effort and expense, the Company will
retain its fiscal year ending September 30, and Deloitte & Touche LLP will be so
deemed retained to audit the Company's financial statement as of such fiscal
year ending September 30, 2000. Deloitte & Touche LLP has no financial
interest, either direct or indirect, in the Company. Formerly, the Company
engaged McKean, Paul, Chrycy, Fletcher & Co. as its independent public
accountants to audit the financial statements of the Company and its
subsidiaries for the fiscal year ended September 30, 1998, replacing Coopers &
Lybrand LLP, effective as of October 5, 1998. A representative of Deloitte &
Touche LLP is expected to attend the Special Meeting and to have an opportunity
to make a statement and/or respond to appropriate questions from shareholders.
If the shareholders do not ratify the appointment of Deloitte & Touche LLP as
the Company's independent public accountants for the Company's fiscal year
ending September 30, 2000, the Board of Directors will consider the selection of
another accounting firm.
The vote of a majority of the shares of Class A and Class B Common Stock
represented at the Special Meeting, voting as a single class, is required for
the ratification of Deloitte & Touche LLP, as the Company's independent public
accountants.
The Board of Directors recommends a vote "FOR" the ratification of the
appointment of Deloitte & Touche LLP, as the Company's independent public
accountants.
14
<PAGE>
SECURITY OWNERSHIP OF
MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth as of January 27, 2000, the number and
percentage of outstanding shares of Class A and Class B Common Stock owned
beneficially by (i) each shareholder known by the Company to own more than 5% of
the outstanding shares of Class A Common Stock and/or Class B Common Stock; (ii)
each Director of the Company; and (iii) all Directors and Executive Officers as
a group.
<TABLE>
<CAPTION>
Class A Class B
-------------------------------------- --------------------------------------
Name and Address of Amount and Nature Percent of Amount and Nature Percent of Class
Beneficial Owner(1)(5) of Beneficial Class of Beneficial
Ownership Ownership
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sergio Pino (2) (3) (3)
Jose Cancela (2) (3) (3)
Armando Guerra (2) (3) (3)
Harry Weitzer(5) 786,785 2.4% -- --
Michael Ambrosio(5) (4) * -- --
Lawrence Hellring(5) 10,000 * -- --
Century Partners Group, Ltd. 29,478,893 88.2% 1,500,000 100%
All Directors and Executive 796,785(2)(4) 2.4% -- --
All employees as a group (69 persons) 6,900 * -- --
</TABLE>
* Less than 1%.
(1) Address for all persons listed is c/o Weitzer Homebuilders Incorporated,
7270 N.W. 12th Street, Suite 410, Miami, Florida 33126.
(2) The reporting person claims indirect beneficial ownership by his status as
a Director and shareholder in a corporation, which is the general partner
of Century, which owns 29,478,893 shares of Class A Common Stock of the
Company.
(3) The reporting person claims indirect beneficial ownership by his status as
a Director and shareholder in a corporation, which is the general partner
of Century, which owns 1,500,000 shares of Class B Common Stock of the
Company.
(4) Represents 29,505 shares of Class A Common Stock acquired by a trust of
which Mr. Ambrosio's wife is a beneficiary.
(5) Represents current members of the Company's Board of Directors who are not
standing for re-election.
15
<PAGE>
COMPLIANCE WITH SECTION 16 UNDER THE 1934 ACT
Federal securities laws require the Company's Directors, Executive
Officers, and persons who beneficially own more than ten percent of the
Company's Class A and Class B Common Stock to file reports of initial ownership
and reports of subsequent changes in ownership with the Securities and Exchange
Commission and to provide copies of these reports to the Company. Specific due
dates have been established and the Company is required to disclose in this
Proxy Statement any failure of the foregoing persons to file timely those
reports during its fiscal year ended September 30, 1999. To the best of the
Company's knowledge, based solely upon a review of copies of reports furnished
to it and written representations that no other reports were required, all of
the Company's Directors, Executive Officers required to report, and ten percent
or greater beneficial owners of Class A and Class B Common Stock made all such
filings timely.
MEETINGS AND COMMITTEES OF THE BOARD
General
The Board of Directors of the Company held six meetings during its fiscal
year ended September 30, 1999 and each Director attended such meeting of the
Board. The Board has an Audit Committee and Compensation Committee.
The Audit Committee currently consists of Messrs. Pino, Cancela and Guerra.
Prior to August 1999, the Audit Committee consisted of Michael Ambrosio, Joseph
Rose and Larry Hellring. The Audit Committee oversees the procedures, scope and
results of the audit and reviews the services provided by the Company's
independent public accountants. The Audit Committee held no meetings during the
fiscal year ended September 30, 1999.
The Compensation Committee consists of Messrs. Cancela and Guerra, none of
whom are presently or formerly employees of the Company. Prior to August 1999,
the Compensation Committee consisted of Messrs. Rose and Hellring. The
Compensation Committee determines the compensation of the Company's Executive
Officers. The Compensation Committee held no meetings during the fiscal year
ended September 30, 1999.
DIRECTOR COMPENSATION
Directors who are not employees and who do not otherwise receive
compensation from the Company are entitled to $2,000 per Board meeting attended
in addition to the reimbursement of reasonable expenses incurred in attending
meetings. Directors who are officers or employees of the Company receive no
additional compensation for service as Directors, other than reimbursement of
reasonable expenses incurred in attending meetings. During the fiscal year
ended September 30, 1999, the Company made no other payments to Directors with
respect to participation on Board committees. See "Certain Relationships and
Related Transactions" for compensation paid by the Company to certain Directors
for consulting services and relationships of several Directors with Chai
Capital, Ltd., a former affiliate of the Company.
16
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning all
cash and non-cash compensation paid or accrued for services rendered to the
Company during the fiscal years ended September 30, 1997, 1998, 1999 to the
Company's Chief Executive Officer and each of the Company's four other most
highly compensated Executive Officers, who was serving as Executive Officers of
the Company as of September 30, 1999, and two additional individuals for whom
disclosure would have been provided but for the fact that such individuals were
not serving as Executive Officers of the Company at the end of the last
completed fiscal year. All Executive Officers of the Company (through February
28, 1999) were employees of an employee leasing company named Paychex Business
Solutions, Inc. (f/k/a National Business Solutions, Inc.).
Summary Compensation Table (1)
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
---------------------------------------------- ------------------------- ---------
Name and Principal Position Fiscal Salary Bonus Other Restricted Securities LTIP All
Year ($) ($) Annual Stock Underlying Payouts Other
Compensation ($) Awards Options/ ($) Compensation
(#) SARs ($) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sergio Pino 1999 0 0 0 0 0 0 0
Chairman of the Board 1998 0 0 0 0 0 0 0
President and Chief 1997 0 0 0 0 0 0 0
Executive Officer
Emiliano de la Fuente 1999 10,000 0 0 0 0 0 0
Chief Financial Officer 1998 0 0 0 0 0 0 0
1997 0 0 0 0 0 0 0
Luis Rabell 1999 31,000 0 0 0 0 0 0
Vice President of Operations 1998 0 0 0 0 0 0 0
1997 0 0 0 0 0 0 0
Harry Weitzer (2) 1999 289,000 0 58,000 0 150,000 0 0
1998 323,000 0 0 0 0 0 0
1997 319,000 0 0 0 250,000 0 0
James Rosewater (3) 1999 110,000 0 0 0 0 0 0
1998 120,000 0 0 0 0 0 0
1997 110,000 0 0 0 50,000 0 0
</TABLE>
(1) The amounts reflected in the above table do not include any amounts for
perquisites and other personal benefits extended to the named executive
officers. The aggregate amount of such compensation for the named
executive officer did not exceed 10% of the total annual salary and bonus
of such executive officer and, accordingly, has been omitted from the
table.
(2) Mr. Harry Weitzer served as Chairman of the Board, President and Chief
Executive Officer of the Company since its formation in 1994 until August
2, 1999. Mr. Harry Weitzer
17
<PAGE>
resigned his position effective August 2, 1999, and entered into a
consulting agreement for real estate consulting services through December
31, 1999.
(3) Mr. James Rosewater resigned as Vice-President of Sales and Marketing
effective August 2, 1999 and subsequently left the employ of the Company in
September 24, 1999.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
<TABLE>
<CAPTION>
Name(2) Shares Acquired Value Received Number of Securities Underlying Value of Unexercised In-the-Money
on Exercise Unexercised Options/SARs at September 30, Options/SARs at September 30,
1999(#) 1999($)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------------------------------ --------------------------------
<S> <C> <C> <C> <C> <C> <C>
Harry Weitzer - - 400,000 0 - -
Jim Rosewater - - 50,000 0 - -
</TABLE>
(1) The closing price for the Class A Common Stock as reported by the OTC
Bulletin Board on September 30, 1999 was $1.6875.
Compensation of Directors
Directors who are not employees and who do not otherwise receive
compensation from the Company are entitled to $2,000 per Board meeting attended
in addition to the reimbursement of reasonable expenses incurred in attending
meetings. Directors who are officers or employees of the Company receive no
additional compensation for service as Directors, other than reimbursement of
reasonable expenses incurred in attending meetings. During the fiscal year
ended September 30, 1999, the Company made no other payments to Directors with
respect to participation on Board committees. See "Certain Relationships and
Related Transactions" for compensation paid by the Company to certain Directors
for consulting services and relationships of several Directors with Chai
Capital, Ltd., a former affiliate of the Company.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
Effective as of January 1, 1999, the Company entered into a five-year
employment agreement (the "Employment Agreement"), with Mr. Harry Weitzer, its
former Chairman, President and Chief Executive Officer, whereby he agreed to
devote substantially all of his business time to the affairs of the Company.
The Employment Agreement provided for an initial salary of $350,000, with annual
cost of living adjustments. In addition, the Employment Agreement provided for
bonuses, reimbursement of business expenses, provision of an automobile, health
insurance and related benefits. Effective August 2, 1999, Mr. Weitzer's
Employment Agreement was terminated and he entered into a five month Consulting
Agreement with the Company whereby he agreed to devote substantially all of his
business time to the affairs of the Company. In consideration for acting as a
consultant to the Company, Mr. Weitzer is paid $29,167 per month.
Compensation Committee Report on Executive Compensation
18
<PAGE>
A change in control of the Company was effectuated on August 2, 1999
pursuant to which Century became the majority beneficial equity owner of the
Company. Accordingly, executive compensation subsequent to such date and for
the remainder of fiscal year ending September 30, 1999, was determined by the
newly constituted Board of Directors, consisting of three nominees of Century
and three remaining members of the Board who were Board members prior to the
change in control. The Compensation Committee of the Board of Directors has
indicated that as of and subsequent to August 2, 1999, the Company's executive
compensation would continue to consist of three primary components, base salary,
bonus and the grant of stock options.
The components of the Company's Executive Compensation (salary, bonus and
stock options) are designed to facilitate fulfillment of the compensation
objectives of the Company's Board of Directors and Compensation Committee, which
objectives include (i) attracting and retaining competent management, (ii)
rewarding management for short and long term accomplishments, (iii) aligning the
interests of management with those of the Company's shareholders, and (iv)
relating management compensation to the achievement of Company goals and the
Company's performance.
Prior to August 2, 1999, the Board's determination of fiscal 1999 salary
and bonus for the Company's executive officers (other than Harry Weitzer) was
made after reviewing and considering a number of factors, including job
responsibility, level of performance, achievement of Company goals, Company
performance, compensation levels at competitive companies and the Company's
historical compensation levels. Although Company performance was one of the
factors considered, the Board's compensation decisions were based upon an
overall review of the relevant factors and compensation was not tied to Company
performance by any specific relationship or formula.
To the knowledge of the current members of the Compensation Committee, the
determination of fiscal 1999 salary, bonus and stock options for Harry Weitzer,
the Chairman of the Board, President and Chief Executive Officer of the Company,
was based upon an employment agreement and a stock option agreement between the
Company and Mr. Weitzer. In negotiating the employment agreement, the Company
analyzed the compensation of chief executive officers of public companies within
the home building industry and public companies similar in size to the Company.
There was no specific relationship or formula by which Mr. Weitzer's
compensation was tied to Company performance.
Jose Cancela
Armando Guerra
19
<PAGE>
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was an officer or employee of the
Company or of any of its subsidiaries during the prior year or was formerly an
officer of the Company or of any of its subsidiaries. None of the Executive
Officers of the Company have served on the Board of Directors or Compensation
Committee during the last fiscal year of any other entity, any of whose officers
served either on the Board of Directors of the Company or on the Compensation
Committee of the Company.
Comparison of Total Shareholder Returns
The graph below compares the cumulative total returns, including the
reinvestment of dividends, of the Class A Common Stock with the companies in the
Nasdaq Stock Market (U.S.) Index and with seven peer group companies which
include: Borror Corp., Engle Homes, Inc., Oriole Homes Corp., Rottlund Homes
Inc., Sundance Homes, Inc., Washington Homes, Inc. and Zaring Homes, Inc. (the
"Peer Group"). The Peer Group consists of homebuilders who either (i)
concentrate their operations primarily within one geographical area of the
country and have a market capitalization of less than $50 million, or (ii)
concentrate their operations primarily in Florida and have a market
capitalization of less than $100 million. The comparison covers a period from
April 26, 1995 to September 30, 1999, and is based on an assumed $100 investment
on April 26, 1995 (the date of the initial public offering of the Class A Common
Stock) in the Nasdaq Stock Market (U.S.) Index, the Peer Group and in the Class
A Common Stock.
[CHART]
COMPARISON OF CUMULATIVE TOTAL RETURNS*
Date Weitzer Homebuilders, Inc. Peer Group NASDAQ Stock Market-US
---- -------------------------- ---------- ----------------------
4/26/95 100 100 100
9/30/96 31 117 164
9/30/97 15 132 225
9/30/98 6 122 229
9/30/99 26 92 372
*TOTAL RETURN BASED ON $100 INITIAL INVESTMENT & REINVESTMENT OF DIVIDENDS
20
<PAGE>
The preceding sections entitled "Compensation Committee Report on Executive
Compensation" and "Comparison of Total Shareholder Returns" do not constitute
soliciting material for purposes of Rule 14a-9 of the Securities and Exchange
Commission (the "Commission"), will not be deemed to have been filed with the
Commission for purposes of Section 18 of the Securities Exchange Act of 1934,
and are not to be incorporated by reference into any other filing made by the
Company with the Commission.
CERTAIN TRANSACTIONS
On August 2, 1999, Century Partners Group, Ltd. ("Century"), a Florida
limited partnership, purchased an aggregate 8,855,000 shares of Class A and
Class B common stock of the Company, from Chai Capital, Ltd. ("Chai"), the
Company's principal shareholder prior to this transaction, which resulted in a
change in control of the Company. In addition, Century acquired options to
purchase, directly from the Company, 22,123,893 shares of the Company's Class A
Common Stock at an exercise price of $1.13 per share (the "Options"), in
consideration of the payment of $1,130,998. The options provided the exercise
price may be tendered in cash or by conveyance to the Company, assets having a
fair market value equal to the exercise price.
On September 2, 1999 and September 30, 1999, Century exercised their option
and received 22,123,893 aggregate shares of Class A Common Stock of the Company
$1.13 per share. As consideration for issued shares, Century conveyed to the
Company cash, cash equivalents, Century's interest in five limited partnerships
and certain other assets. Three of the limited partnerships conveyed were
wholly owned subsidiaries of Century and the other two limited partnerships were
50% owned by Century.
As a result of the above transactions, as of September 30, 1999, Century
had obtained a 89.7% interest in the Company. In addition, at the closing of the
Chai transaction, two of the Company's then five directors resigned, the
Company's Board of Directors was expanded to six persons and the Company
appointed Sergio Pino, Armando Guerra and Jose Cancela to the Company's Board of
Directors.
Effective as of January 1, 1999, the Company entered into a five-year
employment agreement (the "Employment Agreement") with Mr. Harry Weitzer, its
former Chairman, President and Chief
21
<PAGE>
Executive Officer, whereby he agreed to devote substantially all of his business
time to the affairs of the Company. The Employment Agreement provided for an
initial salary of $350,000, with annual cost of living adjustments. In addition,
the Employment Agreement provided for bonuses, reimbursement of business
expenses, provision of an automobile, health insurance and related benefits. As
of August 2, 1999, Mr. Weitzer's Employment Agreement was terminated and he
entered into a five month Consulting Agreement with the Company whereby he
agreed to devote substantially all of his business time to the affairs of the
Company. In consideration for acting as a consultant to the Company, Mr. Weitzer
is paid $29,167 per month.
Michael Ambrosio, a Director of the Company, entered into an agreement with
the Company in September 1998 to furnish consulting services. The agreement
provides that Mr. Ambrosio will be paid a monthly fee of $3,000, on a month-to-
month basis. The agreement was canceled on August 2, 1999. For the fiscal year
ended September 30, 1999, Mr. Ambrosio was paid $30,000. A trust for the
benefit of Mr. Ambrosio's wife is a limited partner of Chai. Mr. Ambrosio is an
officer and director of Chai Capital Corp., the general partner of Chai.
Effective August 2, 1999, Mr. Rosewater resigned as Vice-President of Sales
and Marketing of the Company and left the employ of the Company on September 24,
1999. Upon his resignation as an employee, as a result of the change in
control, Mr. Rosewater was paid the sum of $75,000, which amount was funded by
Chai in accordance with its previously executed agreements between Chai and
Century.
22
<PAGE>
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of the Company Shareholders that are intended to be presented at
the Company's next Special Meeting must be received by the Company no later than
December 21, 2000 in order for them to be included in the proxy statement and
form of proxy relating to that meeting.
By Order of the Board of Directors,
KEYLA ALBA-REILLY,
Secretary
Miami, Florida
March 23, 2000
23
<PAGE>
EXHIBIT A
---------
PROPOSED AMENDMENT TO
THE ARTICLES OF INCORPORATION
OF
WEITZER HOMEBUILDERS INCORPORATED
(d/b/a Century Builders Group)
Article I of the Amended and Restated Articles of Incorporation of Weitzer
Homebuilders Incorporated (the "Corporation"), is hereby amended to read as
follows:
ARTICLE I - NAME
----------------
The name of the Corporation is Century Builders Group, Inc.
Article III of the Amended and Restated Articles of Incorporation of
Weitzer Homebuilders Incorporated is hereby amended to read as follows:
ARTICLE III - CAPITAL STOCK
---------------------------
Section 1. Authorized Capital Stock. The aggregate number of shares
------------------------
of all classes of capital stock which the Corporation shall have the
authority to issue is 80,000,000, of which 75,000,000 shares shall be
common stock, par value $.001 per share (the "Common Stock"), and 5,000,000
shares shall be Serial Preferred Stock, par value $.01 per share (the
"Preferred Stock").
Section 2. Serial Preferred Stock. The Board of Directors is
----------------------
authorized at any time, and from time to time, to provide for the issuance
of shares of Preferred Stock in one or more series, and to determine the
designations, preferences, limitations and relative or other rights of the
Preferred Stock or any series thereof. For each series, the Board of
Directors shall determine by resolution or resolutions adopted prior to the
issuance of any shares thereof, the designations, preferences, limitations
and relative or other rights thereof, including but not limited, to the
following relative rights and preferences, as to which there may be
variations among the different series:
(a) The rate and manner of payment of dividends, if any;
(b) Whether shares may be redeemed and, if so, the redemption
price and the terms and conditions of redemption;
(c) The amount payable upon shares in the event of liquidation,
dissolution or other winding-up of the Corporation;
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(d) Sinking funds provisions, if any, for the redemption or
purchase of shares;
(e) The terms and conditions, if any, on which shares may be
converted or exchanged;
(f) Voting rights, if any; and
(g) Any other rights and preferences of such shares, to the full
extent now or hereafter permitted by the laws of the State of Florida.
The Board of Directors shall have the authority to determine the
number of shares that will comprise each series.
Prior to the issuance of any shares of a series, but after adoption by
the Board of Directors of the resolution establishing such series, the
appropriate Officers of the Corporation shall file such documents with the
State of Florida as may be required by law.
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EXHIBIT B
SECTIONS 607.1301, 607.1302, 607.1320
OF THE
FLORIDA BUSINESS CORPORATION ACT
607.1301 Dissenters' rights; definitions.
The following definitions apply to ss. 607.1302 and 607.1320:
(1) "Corporation" means the issuer of the shares held by a dissenting
shareholder before the corporate action or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(2) "Fair value," with respect to a dissenter's shares, means the value of
the shares as of the close of business on the day prior to the shareholders'
authorization date, excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.
(3) "Shareholders' authorization date" means the date on which the
shareholders' vote authorizing the proposed action was taken, the date on which
the corporation received written consents without a meeting from the requisite
number of shareholders in order to authorize the action, or, in the case of a
merger pursuant to ss. 607.1104, the day prior to the date on which a copy of
the plan of merger was mailed to each shareholder of record of the subsidiary
corporation.
607.1302 Right of shareholders to dissent.
(1) Any shareholder of a corporation has the right to dissent from, and
obtain payment of the fair value of his or her shares in the event of, any of
the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a
party:
1. If the shareholder is entitled to vote on the merger, or
2. If the corporation is a subsidiary that is merged with its
parent under ss. 607.1104, and the shareholders would have been entitled to vote
on action taken, except for the applicability of ss. 607.1104;
(b) Consummation of a sale or exchange of all, or substantially all,
of the property of the corporation, other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or exchange
pursuant to ss. 607.1202, including a sale in dissolution but not including a
sale pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to the
shareholders within 1 year after the date of sale;
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(c) As provided in ss. 607.0902(11), the approval of a control-share
acquisition;
(d) Consummation of a plan of share exchange to which the corporation
is a party as the corporation the shares of which will be acquired, if the
shareholder is entitled to vote on the plan;
(e) Any amendment of the articles of incorporation if the shareholder
is entitled to vote on the amendment and if such amendment would adversely
affect such shareholder by:
1. Altering or abolishing any preemptive rights attached to any
of his or her shares;
2. Altering or abolishing the voting rights pertaining to any of
his or her shares, except as such rights may be affected by the voting rights of
new shares then being authorized of any existing or new class or series of
shares;
3. Effecting an exchange, cancellation, or reclassification of
any of his or her shares, when such exchange, cancellation, or reclassification
would alter or abolish the shareholder's voting rights or alter his or her
percentage of equity in the corporation, or effecting a reduction or
cancellation of accrued dividends or other arrearages in respect to such shares;
4. Reducing the stated redemption price of any of the
shareholder's redeemable shares, altering or abolishing any provision relating
to any sinking fund for the redemption or purchase of any of his or her shares,
or making any of his or her shares subject to redemption when they are not
otherwise redeemable;
5. Making noncumulative, in whole or in part, dividends of any
of the shareholder's preferred shares which had theretofore been cumulative;
6. Reducing the stated dividend preference of any of the
shareholder's preferred shares; or
7. Reducing any stated preferential amount payable on any of the
shareholder's preferred shares upon voluntary or involuntary liquidation; or
(f) Any corporate action taken, to the extent the articles of
incorporation provide that a voting or nonvoting shareholder is entitled to
dissent and obtain payment for his or her shares.
(2) A shareholder dissenting from any amendment specified in paragraph
(1)(e) has the right to dissent only as to those of his or her shares which are
adversely affected by the amendment.
(3) A shareholder may dissent as to less than all the shares registered in
his or her name. In that event, the shareholder's rights shall be determined as
if the shares as to which he or she has dissented and his or her other shares
were registered in the names of different shareholders.
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(4) Unless the articles of incorporation otherwise provide, this section
does not apply with respect to a plan of merger or share exchange or a proposed
sale or exchange of property, to the holders of shares of any class or series
which, on the record date fixed to determine the shareholders entitled to vote
at the meeting of shareholders at which such action is to be acted upon or to
consent to any such action without a meeting, were either registered on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc., or held of record by not fewer than 2,000 shareholders.
(5) A shareholder entitled to dissent and obtain payment for his or her
shares under this section may not challenge the corporate action creating his or
her entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
607.1320 Procedure for exercise of dissenters' rights.
(1)
(a) If a proposed corporate action creating dissenters' rights under
ss. 607.1302 is submitted to a vote at a shareholders' meeting, the meeting
notice shall state that shareholders are or may be entitled to assert
dissenters' rights and be accompanied by a copy of ss. 607.1301, 607.1302, and
607.1320. A shareholder who wishes to assert dissenters' rights shall:
1. Deliver to the corporation before the vote is taken written
notice of the shareholder's intent to demand payment for his or her shares if
the proposed action is effectuated, and
2. Not vote his or her shares in favor of the proposed action. A
proxy or vote against the proposed action does not constitute such a notice of
intent to demand payment.
(b) If proposed corporate action creating dissenters' rights under
ss. 607.1302 is effectuated by written consent without a meeting, the
corporation shall deliver a copy of ss. 607.1301, 607.1302, and 607.1320 to each
shareholder simultaneously with any request for the shareholder's written
consent or, if such a request is not made, within 10 days after the date the
corporation received written consents without a meeting from the requisite
number of shareholders necessary to authorize the action.
(2) Within 10 days after the shareholders' authorization date, the
corporation shall give written notice of such authorization or consent or
adoption of the plan of merger, as the case may be, to each shareholder who
filed a notice of intent to demand payment for his or her shares pursuant to
paragraph (1)(a) or, in the case of action authorized by written consent, to
each shareholder, excepting any who voted for, or consented in writing to, the
proposed action.
(3) Within 20 days after the giving of notice to him or her, any
shareholder who elects to dissent shall file with the corporation a notice of
such election, stating the shareholder's name and address, the number, classes,
and series of shares as to which he or she dissents, and a demand for payment of
the fair value of his or her shares. Any shareholder failing to file such
election to dissent
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within the period set forth shall be bound by the terms of the proposed
corporate action. Any shareholder filing an election to dissent shall deposit
his or her certificates for certificated shares with the corporation
simultaneously with the filing of the election to dissent. The corporation may
restrict the transfer of uncertificated shares from the date the shareholder's
election to dissent is filed with the corporation.
(4) Upon filing a notice of election to dissent, the shareholder shall
thereafter be entitled only to payment as provided in this section and shall not
be entitled to vote or to exercise any other rights of a shareholder. A notice
of election may be withdrawn in writing by the shareholder at any time before an
offer is made by the corporation, as provided in subsection (5), to pay for his
or her shares. After such offer, no such notice of election may be withdrawn
unless the corporation consents thereto. However, the right of such shareholder
to be paid the fair value of his or her shares shall cease, and the shareholder
shall be reinstated to have all his or her rights as a shareholder as of the
filing of his or her notice of election, including any intervening preemptive
rights and the right to payment of any intervening dividend or other
distribution or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the corporation, the fair value thereof in cash as determined by the
board as of the time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in the interim,
if:
(a) Such demand is withdrawn as provided in this section;
(b) The proposed corporate action is abandoned or rescinded or the
shareholders revoke the authority to effect such action;
(c) No demand or petition for the determination of fair value by a
court has been made or filed within the time provided in this section; or
(d) A court of competent jurisdiction determines that such
shareholder is not entitled to the relief provided by this section.
(5) Within 10 days after the expiration of the period in which
shareholders may file their notices of election to dissent, or within 10 days
after such corporate action is effected, whichever is later (but in no case
later than 90 days from the shareholders' authorization date), the corporation
shall make a written offer to each dissenting shareholder who has made demand as
provided in this section to pay an amount the corporation estimates to be the
fair value for such shares. If the corporate action has not been consummated
before the expiration of the 90-day period after the shareholders' authorization
date, the offer may be made conditional upon the consummation of such action.
Such notice and offer shall be accompanied by:
(a) A balance sheet of the corporation, the shares of which the
dissenting shareholder holds, as of the latest available date and not more than
12 months prior to the making of such offer; and
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(b) A profit and loss statement of such corporation for the 12-month
period ended on the date of such balance sheet or, if the corporation was not in
existence throughout such 12-month period, for the portion thereof during which
it was in existence.
(6) If within 30 days after the making of such offer any shareholder
accepts the same, payment for his or her shares shall be made within 90 days
after the making of such offer or the consummation of the proposed action,
whichever is later. Upon payment of the agreed value, the dissenting
shareholder shall cease to have any interest in such shares.
(7) If the corporation fails to make such offer within the period
specified therefor in subsection (5) or if it makes the offer and any dissenting
shareholder or shareholders fail to accept the same within the period of 30 days
thereafter, then the corporation, within 30 days after receipt of written demand
from any dissenting shareholder given within 60 days after the date on which
such corporate action was effected, shall, or at its election at any time within
such period of 60 days may, file an action in any court of competent
jurisdiction in the county in this state where the registered office of the
corporation is located requesting that the fair value of such shares be
determined. The court shall also determine whether each dissenting shareholder,
as to whom the corporation requests the court to make such determination, is
entitled to receive payment for his or her shares. If the corporation fails to
institute the proceeding as herein provided, any dissenting shareholder may do
so in the name of the corporation. All dissenting shareholders (whether or not
residents of this state), other than shareholders who have agreed with the
corporation as to the value of their shares, shall be made parties to the
proceeding as an action against their shares. The corporation shall serve a copy
of the initial pleading in such proceeding upon each dissenting shareholder who
is a resident of this state in the manner provided by law for the service of a
summons and complaint and upon each nonresident dissenting shareholder either by
registered or certified mail and publication or in such other manner as is
permitted by law. The jurisdiction of the court is plenary and exclusive. All
shareholders who are proper parties to the proceeding are entitled to judgment
against the corporation for the amount of the fair value of their shares. The
court may, if it so elects, appoint one or more persons as appraisers to receive
evidence and recommend a decision on the question of fair value. The appraisers
shall have such power and authority as is specified in the order of their
appointment or an amendment thereof. The corporation shall pay each dissenting
shareholder the amount found to be due him or her within 10 days after final
determination of the proceedings. Upon payment of the judgment, the dissenting
shareholder shall cease to have any interest in such shares.
(8) The judgment may, at the discretion of the court, include a fair rate
of interest, to be determined by the court.
(9) The costs and expenses of any such proceeding shall be determined by
the court and shall be assessed against the corporation, but all or any part of
such costs and expenses may be apportioned and assessed as the court deems
equitable against any or all of the dissenting shareholders who are parties to
the proceeding, to whom the corporation has made an offer to pay for the shares,
if the court finds that the action of such shareholders in failing to accept
such offer was arbitrary, vexatious, or not in good faith. Such expenses shall
include reasonable compensation for, and reasonable expenses of, the appraisers,
but shall exclude the fees and expenses of counsel for,
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and experts employed by, any party. If the fair value of the shares, as
determined, materially exceeds the amount which the corporation offered to pay
therefor or if no offer was made, the court in its discretion may award to any
shareholder who is a party to the proceeding such sum as the court determines to
be reasonable compensation to any attorney or expert employed by the shareholder
in the proceeding.
(10) Shares acquired by a corporation pursuant to payment of the agreed
value thereof or pursuant to payment of the judgment entered therefor, as
provided in this section, may be held and disposed of by such corporation as
authorized but unissued shares of the corporation, except that, in the case of a
merger, they may be held and disposed of as the plan of merger otherwise
provides. The shares of the surviving corporation into which the shares of such
dissenting shareholders would have been converted had they assented to the
merger shall have the status of authorized but unissued shares of the surviving
corporation.
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WEITZER HOMEBUILDERS INCORPORATED
(d/b/a Century Builders Group)
7270 N.W. 12th Street, Suite 410
Miami, Florida 33126
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Sergio Pino and Armando J. Guerra, and each
of them, with full power of substitution, proxies of the undersigned, to vote
all the shares of Class A Common Stock, $.001 par value per share, of Weitzer
Homebuilders Incorporated (d/b/a Century Builders Group), a Florida corporation,
(the "Company"), which the undersigned would be entitled to vote at the Special
Meeting of Shareholders to be held at the Company's headquarters 7270 N.W. 12th
Street, Suite 410, Miami, Florida 33126 at 11:00 a.m., local time, on April 20,
2000, or any adjournment thereof, upon the matters referred to on the reverse
side and, in their discretion, upon any other business as may come before the
meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS.
7. Proposal 1 - Approval of the Name Change Amendment to the Articles of
Incorporation
[ ] FOR [ ] AGAINST [ ]ABSTAIN
8. Proposal 2 - Approval of the Amendment to the Articles of Incorporation to
provide for one Class of Common Stock, $.001 par value per share
[ ] FOR [ ] AGAINST [ ]ABSTAIN
9. Proposal 3 - Approval of the Amendment to the Articles of Incorporation to
increase the number of authorized shares of Common Stock of the Company to
75,000,000
[ ] FOR [ ] AGAINST [ ]ABSTAIN
10. Proposal 4 - Election of Directors.
Election of the following persons as Directors of the Company:
Sergio Pino Armando J. Guerra Jose Cancela
[ ] [ ] [ ]
Gabriel M. Bustamante Carlos Garcia Humberto Lorenzo
[ ] [ ] [ ]
[ ] FOR all nominees except as indicated [ ] WITHHOLD authority to vote for
all nominees
(INSTRUCTION: To withhold authority to vote for an individual nominee,
strike a line through that nominee's name in the list above.)
(Continued and to be signed on other side)
<PAGE>
11. Proposal 5 - Ratification of Appointment of Deloitte & Touche LLP as
Independent Accountants
[ ] FOR [ ] AGAINST [ ]ABSTAIN
12. Proposal 6 - To transact such other business as may properly come before
the meeting
[ ] FOR [ ] AGAINST [ ]ABSTAIN
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR the proposals as set forth herein.
The undersigned acknowledges receipt of Notice of Special Meeting of
Shareholders dated March 23, 2000, and the accompanying Proxy Statement.
Dated:______________________________, 2000.
Signature
Names (s) (typed or printed)
Address(es)
Please sign exactly as name appears herein. When share are held by joint
tenants, both should sign. When singing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
