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-12
CALPROP CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / 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:
------------------------------------------------------------------------
CALPROP CORPORATION
13160 MINDANAO WAY, #180
MARINA DEL REY, CALIFORNIA 90292
----------
NOTICE OF THE 2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 24, 2001
----------
To the Shareholders of
Calprop Corporation:
The 2001 Annual Meeting of Shareholders of Calprop Corporation, a
California corporation (the "Company"), will be held on May 24, 2001 at 2:00
p.m., local time, at the Courtyard Marriot, 13480 Maxella Avenue, Marina Del
Rey, California, for the following purposes, all as more fully set forth in the
accompanying Proxy Statement:
1. To elect five directors of the Company to serve until the Next Annual
Meeting of Shareholders and until their successors are elected and qualified;
and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on April 4, 2001 as
the record date for determining shareholders entitled to notice of and to vote
at the meeting and any adjournments thereof.
By Order of the Board of Directors,
Mark F. Spiro
VICE PRESIDENT/SECRETARY/TREASURER
Dated: April 16, 2001
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
CALPROP CORPORATION
13160 MINDANAO WAY, #180
MARINA DEL REY, CALIFORNIA 90292
PROXY STATEMENT FOR THE 2001 ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD ON MAY 24, 2001
GENERAL INFORMATION
This Proxy Statement is being mailed on or about April 16, 2001, to the
shareholders of Calprop Corporation, a California corporation (the "Company"),
in connection with the solicitation of proxies on behalf of the Board of
Directors of the Company (the "Board of Directors") to be used at the 2001
Annual Meeting of the Shareholders of the Company to be held on May 24, 2001
(the "Meeting") and any adjournment or adjournments thereof. Any proxy given may
be revoked at any time prior to the exercise of the powers conferred by it by
filing with the Secretary of the Company a written notice signed by the
shareholder revoking such proxy or a duly executed proxy bearing a later date.
In addition, the powers conferred by such proxy may be suspended if the person
executing the proxy is present at the meeting and elects to vote in person.
Shares represented by proxies that reflect abstentions or "broker non-votes"
(i.e. shares held by a broker or nominee which are represented at the Meeting,
but with respect to which such broker or nominee is not empowered to vote on a
particular proposal) will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum. All shares
represented by each properly executed and unrevoked proxy received in time for
the Meeting will be voted (unless otherwise indicated thereon) in the manner
specified therein at the Meeting and any adjournment or adjournments thereof.
The Company will pay the expenses of soliciting proxies, including the
charges and expenses of brokerage firms and others for forwarding solicitation
material to beneficial owners of shares. In addition to the use of the mails,
some of the Company's directors, officers and regular employees, without extra
compensation, may solicit proxies by telegram, telephone and personal interview.
The Annual Report of the Company for year ended December 31, 2000 is being
mailed to shareholders concurrently with the mailing of this Notice of Annual
Meeting and Proxy Statement.
VOTING RIGHTS
The close of business on April 4, 2001 (the "Record Date") has been fixed
by the Board of Directors as the record date for determining shareholders
entitled to notice of and to vote at the Meeting and any adjournment or
adjournments thereof. On the Record Date, there were outstanding 10,290,535
shares of the Company's Common Stock, no par value ("Common Stock"), all of one
class and all of which are entitled to be voted at the Meeting. Holders of such
issued and outstanding shares of Common Stock are entitled to vote their shares
on a cumulative basis as described in "Election of Directors" below.
A majority of the outstanding shares will constitute a quorum at the
Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions are counted in the tabulation of the votes cast on proposals
presented to shareholders, whereas broker non-votes are not counted for purposes
of determining whether a proposal has been approved.
1
Victor Zaccaglin, Chairman of the Board and Chief Executive Officer of the
Company, beneficially owns approximately 45.4% of the outstanding shares of the
Company's Common Stock entitled to be voted at the Meeting and has advised the
Company that he intends to vote such shares for the nominees for director listed
below. Other officers, directors and affiliates of the Company beneficially own
in the aggregate approximately 46.3% of the outstanding shares of the Company's
Common Stock entitled to be voted at the Meeting, and it is anticipated that
such persons will vote for the nominees for director set forth below.
Accordingly, if all such shares are voted for the nominees for director set
forth below, no additional affirmative vote of the outstanding shares of the
Company's Common Stock will be required for the election of the nominees for
director specified below.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
BENEFICIAL OWNERSHIP OF PRINCIPAL SHAREHOLDERS
The following table sets forth, as of April 4, 2001 (unless otherwise
indicated in the notes to the table), certain information concerning the
beneficial ownership of the Company's equity securities of each person known by
the Company to own beneficially five percent or more of the Company's Common
Stock, the Company's only outstanding class of securities presently entitled to
vote. A person is deemed to be the beneficial owner of securities, whether or
not he has any economic interest therein, if he directly or indirectly has (or
shares with others) voting or investment power with respect to the securities or
has the rights to acquire such beneficial ownership within sixty days. The
percentages set forth in the following table and in the table under the caption
"Beneficial Ownership of Management" as to each person's ownership of the
Company's Common Stock are based on the 10,290,535 shares of Common Stock
outstanding on April 4, 2001, plus any shares which may be acquired upon
exercise of stock options by such person which are exercisable on or within
sixty days after such date. Accordingly, the percentages are based upon
different denominators.
NUMBER OF SHARES
NAME AND ADDRESS OF OF COMMON STOCK PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED(1) OF CLASS
------------------- ------------------- --------
Victor and Hannah Zaccaglin(2) 4,671,227(3) 45.9%
13160 Mindanao Way, #180
Marina Del Rey, California 90292
John Curci(4) 2,957,010(5) 28.7%
717 Lido Park Drive
Newport Beach, California 92663
Ronald S. Petch(6) 687,109(7) 6.5%
13160 Mindanao Way, #180
Marina Del Rey, CA 90292
- ----------
(1) Information with respect to beneficial ownership is based on information
furnished to the Company by each shareholder included in the table or
included in filings with the Securities and Exchange Commission. Except as
indicated in the notes to the table, each shareholder included in the
table has sole voting and dispositive power with respect to the shares
shown
2
to be beneficially owned by such shareholder. The table may not reflect
limitations on voting power and investment power arising under community
property and similar laws.
(2) Various members of Victor and Hannah Zaccaglin's family own Common Stock
of the Company. Although there is no agreement or understanding between
such parties as to the holding or voting of their respective shares of
Common Stock, it is anticipated that such persons (including John Curci
and Ronald S. Petch) will vote for the slate of Directors as listed below.
(3) This amount also includes 73,368 shares (1.6%) held in trust by Victor and
Hannah Zaccaglin for the benefit of their children and relatives. This
amount also includes 100,000 shares acquirable under options which were
exercisable by Mr. Zaccaglin on or within sixty (60) days after April 4,
2001.
(4) John Curci is Victor Zaccaglin's cousin.
(5) This amount also includes 1,000,000 shares (33.8%) held in trust by John
Curci for the benefit of his children.
(6) Ronald S. Petch is Victor Zaccaglin's nephew.
(7) This amount also includes 280,000 shares acquirable under options which
were exercisable by Mr. Ronald S. Petch on or within sixty (60) days after
April 4, 2001.
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following table sets forth, as of April 4, 2001, certain information
concerning the beneficial ownership of the equity securities of the Company of
(i) each director and nominee for director of the Company, (ii) each executive
officer of the Company covered by the Summary Compensation Table below and (iii)
all directors and executive officers of the Company as a group.
NUMBER OF SHARES
OF COMMON STOCK PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1)(2) OF CLASS
----------------------- ---------------------- --------
Victor Zaccaglin(3) 4,767,227 45.9%
Ronald S. Petch(4) 687,109 6.5%
Mark F. Spiro 460,000 4.4%
Richard Greene 190,000 1.8%
Christopher Hoopes 45,000 0.4%
E. James Murar 7,500 --
Mark T. Duvall 17,500 --
All Directors and Executive Officers as a group (9 persons) 6,203,436 55.8%
- ----------
(1) See Note 1 to the preceding table.
(2) Includes the following numbers of shares of Common Stock acquirable under
options which were exercisable on or within sixty days after April 4,
2001: Ronald S. Petch, 280,000; Mark F. Spiro, 220,000; Richard Greene,
152,000; Christopher Hoopes, 40,000; E. James Murar, 7,500; Mark T.
Duvall, 7,500; all Directors and Executive Officers as a group, 831,600.
(3) See Notes 2 and 3 to the preceding table.
(4) See Notes 6 and 7 to the preceding table.
3
PROPOSAL NO. 1
NOMINATION AND ELECTION OF DIRECTORS
The Board of Directors is comprised of five directors each of whom is
standing for election at the annual meeting. Each director elected at the
Meeting will hold office for a term expiring at the 2002 Annual Meeting of
Shareholders and until his successor is duly elected and qualified.
It is intended that the shares represented by the enclosed proxy will be
voted, unless otherwise instructed, for the election of the five nominees named
below. While the Company has no reason to believe that any of the nominees will
be unable to serve as a director, it is intended that if such an event should
occur, such shares will be voted for such substitute nominee or nominees as may
be selected by the Board of Directors. The candidates receiving a plurality of
the votes of the shares present and entitled to vote at the Meeting in person or
by proxy will be elected.
Pursuant to California law, the election of directors is by cumulative
voting. Each shareholder may cumulate such shareholder's votes and give one
nominee a number of votes equal to the number of directors to be elected (5)
multiplied by the number of shares held by the shareholder, or such shareholder
can distribute his votes among all of the nominees as the shareholder sees fit.
By giving your Proxy, you are authorizing the Proxyholders to vote your shares
for the nominees as they determine is appropriate.
Set forth below is certain information regarding the nominees for director
of the Company. Messrs. Petch, Zaccaglin, Murar, Duvall and Spiro are presently
serving as directors of the Company for terms expiring at the Meeting.
NOMINEES FOR ELECTION AS DIRECTORS
PRINCIPAL OCCUPATION DIRECTOR
NAME AGE AND OTHER POSITIONS WITH THE COMPANY SINCE
------ ---- ----------------------------------- --------
Ronald S. Petch 56 President of the Company since November, 1993 1974
and prior to that he served as Executive Vice
President, Operations since February, 1992.
Victor Zaccaglin 80 Chairman of the Board and Chief Execu- 1961
tive Officer of the Company since 1961 and
also President from 1961 to October, 1987
and from March, 1992 to November, 1993.
Mark F. Spiro 49 Chief Financial Officer of the Company since 1998
1993 and formerly, Chief Financial Officer of
Inco Homes from 1989 to 1993.
E. James Murar 60 Chairman and Chief Executive Officer of 1999
RecreActions Group of Companies since 1971.
Mark T. Duvall 40 Portfolio Manager at Wells Fargo since 1994; 1999
Chief Financial Analyst at Strategic Wealth
Management 1992 to 1994; and Financial Analyst
at Simpson Investment Company 1987 to 1992.
4
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors held a total of four regular meetings during
calendar year 2000. All directors attended no less than 75% of the aggregate of
(a) the total number of meetings of the Board of Directors and (b) the total
number of meetings of all committees of the Board on which he served.
The Company has an Audit Committee, the function of which is to assist the
Board of Directors in fulfilling its responsibilities with respect to corporate
accounting, auditing, and reporting practices. In performing such function, the
Audit Committee is responsible for selecting the firm of certified public
accountants to be retained as the Company's auditors and maintains a direct line
of communication with the Company's independent auditors. The Audit Committee
has met and discussed with management the Company's audited financial statements
at and for the years ended December 31, 2000. Based on the Committee's review of
the audited statements and its discussion of certain items with the Company's
independent auditors (including matters required under Statement of Auditing
Standards 61 as well as the letter and disclosures required by Independence
Standards Board Standard No. 1), the Committee recommended that the audited
statements for 2000 be included in the Form 10-K Annual Report, a copy of which
accompanies this proxy statement. The Audit Committee held two meetings during
calendar year 2000. Its current members are Messrs. Zaccaglin, Duvall and Murar
(the Chairman of the Audit Committee). Mr. Duvall was absent from one of the
meetings of the Audit Committee.
The Company also has a Stock Option/Compensation Committee which
authorizes and reviews the chief executive officer's compensation and the
granting of stock options and stock to key employees and directors of the
Company. This committee held one meeting during calendar year 2000 in which both
of its current members, Messrs. Duvall, Zaccaglin and Murar (the Chairman of the
Stock Option/Compensation Committee) were present.
The Company has no Nominating Committee.
BOARD STOCK OPTION/COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Executive Compensation Program is administered by the Stock
Option/Compensation Committee (the "committee") of the Board of Directors. The
committee is comprised of two independent, nonemployee director and one director
who is an officer of the Company. The committee strives to set an executive
compensation program which emphasizes both business performance and shareholder
value. It attempts to do this by attracting, rewarding, and retaining qualified
and productive individuals, tying compensation to both Company and individual
performance, ensuring competitive and equitable compensation levels, and
fostering executive stock ownership. The committee also relies on
recommendations from the Company's management regarding executive compensation
levels.
The committee reviews each management employee's salary annually. In
determining an appropriate salary level, the committee considers the level and
scope of responsibility, experience, individual performance, an evaluation of
the Company's performance, and pay practices among similar companies in the
industry. There are no specific performance or other criteria assigned to any of
these measurements.
The Company has implemented an annual incentive compensation plan and as
discussed below, has adopted incentives as a component of the compensation of
its officers and other certain employees. The Company's long term incentive
philosophy is that compensation should be related to an improvement in
shareholder value, thereby creating a mutuality of interest with the Company's
stockholders. In furtherance of this objective, the Company
5
awards its officers and certain other employees stock options, the objective
being to provide a competitive total long-term incentive opportunity.
The committee believes that the Company's stock option plan is compatible
with shareholder interest in that it encourages executives to maintain a
long-term equity interest in the Company. The provisions of the plan are also
consistent with prevailing practices in the homebuilding industry. The committee
is currently reviewing ways in which both the award of options and their
exercise may be tied more closely to the performance of the Company's stock.
The salary of the Chief Executive Officer was set at $178,500 for 2000 and
is currently at $208,500 for 2001.
Each of the members of the Company's Stock Option/Compensation Committee
has specifically concurred in the foregoing report.
6
COMPENSATION AND IDENTIFICATION OF EXECUTIVE OFFICERS;
TRANSACTIONS WITH MANAGEMENT
EXECUTIVE COMPENSATION
The following table sets forth as to the Chief Executive Officer, the
President, the Chief Financial Officer, the Vice President of the Company and
the President of a subsidiary, information concerning the annual and long-term
compensation for services rendered in all capacities to the Company during the
fiscal year ended December 31, 2000, and the two preceding fiscal years. No
other executive officer received more than $100,000 in annual salary and bonus
during calendar year 2000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION
---------------------- -----------------------
RESTRICTED SECURITIES
STOCK UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY AWARD(S)(7) OPTION(S) COMPENSATION(8)
- ----------------- ----- ---------- ----------- ---------- --------------
Victor Zaccaglin(2) 2000 $178,500 -- -- $ 887
Chairman of the Board and 1999 170,000 -- -- 887
Chief Executive Officer and Director 1998 155,000 -- -- 887
Ronald S. Petch(3) 2000 $173,250 -- -- $1,320
Director, Chief Operating 1999 165,000 -- 80,000 1,416
Officer and President 1998 150,000 $48,750 80,000 1,319
Mark F. Spiro(4) 2000 $165,000 -- -- $ 512
Director and Chief Financial Officer 1999 145,000 -- 80,000 554
1998 120,000 $48,750 80,000 587
Richard L. Greene(5) 2000 $120,000 -- -- $ 804
Vice President of Northern California division 1999 112,000 -- 40,000 879
1998 103,000 $24,375 40,000 912
Christopher Hoopes(6) 2000 $132,000 -- -- $ 710
President of Colorado Pacific Homes, Inc. 1999 132,000 -- 20,000 132
1998 96,445 $ 8,125 20,000 132
- ----------
(1) Does not include certain amounts paid by the Company which may have value
to the recipient as personal benefits. Although such amounts cannot be
precisely determined, the Company has concluded that the aggregate amount
thereof does not exceed 10% of the cash compensation of Messrs. Zaccaglin,
Petch, Spiro, Greene or Hoopes.
(2) Mr. Zaccaglin, age 80, has been Chairman of the Board and Chief Executive
Officer of the Company since 1961. He was President from March, 1992 to
November, 1993 and prior to that from 1961 to October, 1987.
(3) Mr. Petch, age 56, has been President since November, 1993 and prior to
that was Vice President, Operations of the Company since February 1992.
Since 1974, he has been a director of the Company, and from March 1981
until February 1992, he was engaged in real estate investments,
development and marketing.
(4) Mark F. Spiro, age 49, has been employed by the Company since November
1993 as its Vice President of Finance,
7
Secretary and Treasurer. From July 1989 until September 1993 he was
employed as chief financial officer at Inco Homes, a residential builder
in Southern California.
(5) Richard L. Greene, age 53, is a Vice President of the Northern California
Division of the Company. He has been employed by the Company since July
1985, and prior to September 1991, was a Senior Project Manager for the
Company.
(6) Christopher Hoopes, age 49, has served as President of Colorado Pacific
Homes, Inc., a Colorado corporation since April 1998. He was employed by
Watt Industries as President of the Colorado division from July 1993 to
June 1996 and from June 1996 to March 1998 he was manager of Christopher
Homes, LLC.
(7) The amount shown is based upon the closing market price of shares of the
Company's Common Stock on the date of the restricted stock award
multiplied by the number of shares awarded. Mr. Zaccaglin received the
following awards of restricted stock: 20,000 shares on October 31, 1991,
valued at $25,000, 30,000 shares on October 6, 1993, valued at $22,500,
30,000 shares on October 4, 1995, valued at $31,875 and 30,000 shares on
October 8, 1997, valued at $20,625. Mr. Petch has received 10,000 shares
on February 2, 1992, valued at $30,000, 20,000 shares on October 6, 1993,
valued at $15,000, 20,000 shares on October 4, 1994, valued at $15,000,
20,000 shares on October 4, 1995, valued at $21,250, 20,000 shares on
October 8, 1997, valued at $13,750 and 30,000 shares on October 5, 1998,
valued at $48,750. Mr. Spiro has received 10,000 shares on November 1,
1993, valued at $8,125, 10,000 shares on October 4, 1994, valued at
$7,500, 10,000 shares on October 4, 1995, valued at $10,625, 10,000 shares
on October 8, 1997, valued at $6,875 and 30,000 shares on October 5, 1998,
valued at $48,750. Mr. Greene has received 3,000 shares on October 31,
1991, valued at $7,500, 5,000 shares on October 6, 1993, valued at $3,750,
5,000 shares on October 4, 1994, valued at $7,500, 5,000 shares on October
4, 1995, valued at $5,312.50, 5,000 shares on October 8, 1997, valued at
$3,437.50 and 15,000 shares on October 5, 1998, valued at $24,375. Mr.
Hoopes has received 5,000 shares on October 5, 1998, valued at $8,125. The
number of restricted shares held by Messrs. Zaccaglin, Petch, Spiro,
Greene, and Hoopes as of December 31, 2000 is 110,000, 120,000, 70,000,
38,000 and 5,000, respectively. The value of such restricted shares as of
December 31, 2000 is $116,875, $127,500, $74,375, $40,375 and $5,313,
respectively. Twenty percent of each award vests on the anniversary date
of each grant, resulting in Messrs. Zaccaglin, Petch, Spiro, Greene and
Hoopes holding a total of 98,000, 94,000, 48,000, 27,000, and 2,000 vested
shares, respectively, as of December 31, 2000.
(8) Such other compensation represents the amount of insurance premiums paid
by the Company with respect to term life insurance for the benefit of
Messrs. Zaccaglin, Petch, Spiro, Greene and Hoopes.
In addition to Messrs. Zaccaglin, Petch, Spiro, Greene and Hoopes, the
Company currently has two other executive officers: Susan Soh, age 31, has been
employed by the Company since June 1997 as its controller. From January 1997 to
June 1997 she was employed as financial manager at DFS North American and from
September 1993 to December 1997 at Deloitte & Touche, LLP as a senior
accountant. Curtis Gullett, age 37, has been employed by the Company since
February 1997 as field superintendent, general superintendent and presently, as
Vice President. All of the Company's executive officers serve at the pleasure of
the Board of Directors.
8
FISCAL YEAR END OPTION VALUES
Shown below is information with respect to the unexercised options to
purchase the Company's Common Stock granted under the 1993 Stock Option Plan and
in prior years under the 1983 Stock Option Plans to Messrs. Zaccaglin, Petch,
Spiro, Greene and Hoopes.
NUMBER OF SHARES OF
COMMON STOCK UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
SHARES ACQUIRED OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
UPON EXERCISE DECEMBER 31, 2000 DECEMBER 31, 2000(1)
--------------- ----------------- --------------------
NAME NUMBER VALUE RECEIVED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----- --------- ------------- ---------- ------------ ---------- ------------
Victor Zaccaglin 330,000 -- 100,000 -- $30,625 --
Ronald S. Petch 325,000 -- 280,000 5,000 26,250 --
Mark F. Spiro 170,000 -- 220,000 -- 22,500 --
Richard L. Greene 10,000 $8,125 152,000 -- 14,375 --
Christopher Hoopes -- -- 40,000 -- -- --
- ----------
(1) Options are "In-the-Money" if the fair market value of the underlying
Common Stock at year-end exceeds the exercise price of the option.
COMPENSATION OF DIRECTORS
Each non-employee director (Messrs. Murar and Duvall) receives annual
compensation of $2,000 for serving as a director and no additional fees for
serving as a member of any committee of the Board of Directors. All directors of
the Company (except directors serving on the Stock Option Committee) are
eligible to receive stock options under the Company's 1993 Stock Option Plan.
All non-employee directors then serving on the Stock Option/Compensation
Committee are eligible to receive stock options under the Company's Director
Stock Option Plan, described below.
DIRECTOR STOCK OPTION PLAN
The Company maintains the Calprop Corporation Director Stock Option Plan
(the "Director Plan") which authorizes the granting of options to purchase a
maximum of 100,000 shares of the Company's Common Stock to non-employee
directors of the Company who are serving on the Company's Stock
Option/Compensation Committee. The Director Plan was adopted in order to permit
non-employee directors of the Company who serve on the Stock Option/Compensation
Committee administering the Company's employee stock option plans to continue to
be eligible to receive stock options without adversely affecting the
qualification of the employee plans under Rule 16b-3 under the Securities
Exchange Act of 1934, as amended.
The Director Plan provides for annual grants of options to purchase 7,500
shares of the Company's Common Stock on the date of the organizational meeting
of the Board of Directors of the Company (which is the first meeting of the
Board of Directors following the Company's Annual Meeting of Shareholders). The
purchase price of shares covered by an option granted under the Director Plan
shall be the fair market value (as defined in the Director Plan) of the
Company's Common Stock on the date of grant of the option. Generally, fair
market value is defined as the closing price for such stock on the OTC Bulletin
Board on the date of grant. Each option granted under the Director Plan becomes
exercisable in full on the first anniversary of the date on which it was
granted, provided that no such option may be exercised after the expiration of
ten years from the date of grant.
9
DEFERRED COMPENSATION PLAN
The Company has established a plan under which executive officers who have
received grants of restricted stock may defer the receipt of any stock which has
not become vested until the earliest of 2004, their separation from service with
the Company or a change in control of the Company. Participants in the plan may
elect to further defer receipt of such stock until 2007. Stock which is deferred
under the plan is held in a trust for the benefit of the participants; however,
assets in the trust (i.e., shares of the common stock) are subject to the claims
of the Company's creditors. Other than minor administrative costs borne by the
Company, the plan does not entail material costs to the Company nor income to
the participating officers (other than the value of the stock previously granted
to the participants, which the Company believes has been deferred for federal
income tax purposes until the stock is distributed to the participants).
CERTAIN TRANSACTIONS WITH MANAGEMENT AND OTHERS
Related-Party Notes--The Company has the following notes payable to the
Curci-Turner Company, Mr. John Curci, Sr. is the a principal and is a principal
shareholder of the Company, at December 31, 2000. Under the terms of certain of
the notes payable, Mr. Curci participates in "Net Proceeds" from certain
projects, as defined in the loan agreement, which is comparable to net profit:
DECEMBER 31,
PROJECT MATURITY DATE INTEREST RATE PROFIT SHARE 2000
------ ----------- ------------ --------- -----------
Summertree Park .......................... Paid Off Prime + 1.5% 40% $ --
Antares .................................. Paid Off 12% 33% --
Montserrat ............................... Paid Off 12% 50% --
Parkland Farms ........................... Paid Off 12% 50% --
High Ridge Court ......................... June 2001 12% 50% 3,084,491
Saddlerock ............................... Demand 12% 50% 2,600,000
Mockingbird Canyon ....................... June 2001 12% 50% 2,608,912
Montserrat Classics ...................... December 2001 12% 50% 3,450,000
-----------
11,743,403
-----------
Other:
Unsecured loans ....................... December 2001 10% to 12% 2,129,357
-----------
$13,872,760
===========
During 1999, the Company purchased RGC's fifty percent ownership in
RGCCLPO, E. James Murar is a principal of RGC and a director of the Company. RGC
and the Company formed RGCCLPO to develop Parc Metropolitan in Milpitas.
Consideration for the purchase consisted of issuance of a note payable for
$2,000,000 and payment of cash of $1,000,000. As of December 31, 2000, the
outstanding principal balance on this loan totaled $2,000,000.
During 1996, the Company converted its Preferred Stock to Common Stock and
the accrued Preferred Stock dividend due to an officer of the Company and a
related party of $581,542 and $472,545, respectively, was exchanged for notes
with interest payable at 10%. As of December 31, 2000, the outstanding principal
due Mr. Victor Zaccaglin and Mr. John Curci, Sr. on these notes was $581,542 and
$462,330, respectively.
10
Included in notes payable to related parties is a note payable to Mission
Gorge, LLC which bear interest at 12%. Outstanding balance as of December 31,
2000 was $2,000,000. Mission Gorge, LLC was formed between the Company and the
Curci-Turner Company to develop a certain 20 acres in the City of San Diego, CA.
Included in notes payable to related parties are notes payable to Victor
Zaccaglin which bear interest at 12%. Outstanding balances as of December 31,
2000 was $1,045,611. The Company has other loans from related parties, which
provide for interest at 10% and prime plus 1% (9.50% at December 31, 2000) per
annum and in which certain loans are due on demand. As of December 31, 2000
these loans totaled $740,000.
On March 10, 1998, three officers, Messrs Zaccaglin, Petch, Spiro and a
director of the Company, John L. Curci, exercised options to purchase a total of
720,000 shares of common stock with a weighted-average exercise price of $0.8989
per share. The Company received $199,395 cash from Mr. Zaccaglin and received
$447,813 in notes receivable from Messrs Spiro, Petch and Curci as a result of
the exercise of these options. The notes receivable accrue interest at 4.987%
and mature on March 10, 2001 and are guaranteed by the officers. The notes'
maturity dates have been extended to March 10, 2004.
On October 15, 1998, an officer of the Company, Mr. Richard Greene,
exercised options to purchase a total of 10,000 shares of common stock with a
weighted-average exercise price of $0.8125 per share. The Company received a
note receivable for $8,125 from the officer as a result of the exercise of these
options. The note receivable accrues interest at 4.987% and matures on October
15, 2001 and is guaranteed by the officer.
As of December 31, 2000, accrued interest for the stock purchase loans was
$63,796.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP served as the Company's auditors in calendar year
2000. The Audit Committee of the Board of Directors has selected Deloitte &
Touche LLP as the independent public accountants of the Company for calendar
year 2001 and considers Deloitte & Touche LLP to be well qualified. If Deloitte
& Touche LLP shall decline to act, or otherwise become incapable of acting, or
if its engagement is otherwise terminated by the Board of Directors or the Audit
Committee (none of which events are currently anticipated), the Audit Committee
will appoint other auditors for 2001. A representative of Deloitte & Touche LLP
will be present at the Meeting where he or she will be given an opportunity to
make a statement if he or she so desires and will be available to respond to
questions raised during the Meeting.
The Company's Audit Committee approves in advance all audit and non-audit
services to be performed by the Company's independent public accountants and
considers the possible effect on the independence of the accountants. No
relationship exists between the Company and Deloitte & Touche LLP other than the
usual relationship between independent public accountants and client.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and certain of its officers,
and persons who own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission"). Officers, directors and
greater than 10% shareholders are required by
11
the Commission's regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely upon a review of the copies of the forms
furnished to the Company and the representations made by the reporting persons
to the Company, the company believes that during the calendar year ended
December 31, 2000, its directors, officers and 10% shareholders complied with
all filing requirements under Section 16(a) of the Exchange Act.
12
PERFORMANCE GRAPH
The following performance graph compares the performance of the Company's
common stock to the Russell 2000 Index and an average of a group of four
homebuilders, which includes Capital Communities (CPCY), Zaring National (ZHOM),
Meritage (MTH) and Schuler Homes (SHLR), for the five years ended December 31,
2000. The graph assumes that the value of the investment in the common stock and
each index was $100 at December 31, 1995, and that all dividends were
reinvested. The Company believes that such comparison remains a fair reflection
of companies with comparable market capitalizations to that of the Company.
CUMULATIVE TOTAL RETURN
BASED UPON AN INITIAL INVESTMENT OF $100 ON DECEMBER 31, 1995
WITH DIVIDENDS REINVESTED
DEC-95 DEC-96 DEC-97 DEC-98 DEC-99 DEC-00
------ ------ ------ ------ ------ ------
Calprop Corporation $100 $ 62 $ 85 $185 $196 $131
Russell 2000 $100 $116 $143 $139 $168 $163
Custom Composite Index (4 Stocks) $100 $ 90 $ 94 $100 $ 84 $148
THE 4-STOCK CUSTOM COMPOSITE INDEX CONSISTS OF CAPITAL COMMUNITIES CORPORATION,
MERITAGE CORPORATION, SCHULER HOMES, INC. AND FIRST CINCINNATTI, INC. (AKA
ZERING NATIONAL CORPORATION).
13
SHAREHOLDER PROPOSALS
A shareholder proposal intended to be presented at the Company's 2002
annual shareholders meeting must be received by the Company at its principal
executive offices on or before January 3, 2002, for inclusion in the Company's
proxy statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors does not intend to present any other business at
the Meeting and knows of no other matters which will be presented at the
Meeting.
By order of the Board of Directors,
Mark F. Spiro
VICE PRESIDENT/SECRETARY/TREASURER
Dated: April 16, 2001
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT
IN THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
Please mark
your votes as /X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1. indicated in
this example
Item 1 - ELECTION OF DIRECTORS
Nominees: Victor Zaccaglin E. James Murar
Ronald S. Petch Mark F. Spiro Mark T. Duvall
WITHHELD
FOR FOR ALL
/ / / /
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
Item 2 - TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
FOR AGAINST ABSTAIN
/ / / / / /
The undersigned hereby revokes any prior proxy and ratifies and confirms all
acts that the proxies named on the reverse side of this page or their
substitutes, and each of them, shall lawfully do or cause to be done by virtue
hereof.
The undersigned hereby acknowledges receipt of the Notice of the 2001 Annual
Meeting of Shareholders and accompanying Proxy Statement dated April 16, 2001.
The proxies (or, if only one, then that one proxy) or their substitutes acting
at the meeting may exercise all powers, including the right to cumulate votes,
hereby conferred on the reverse side of this page.
Date: _____________________________________, 2001
_________________________________________________
SIGNATURE OF SHAREHOLDER
_________________________________________________
SIGNATURE, IF HELD JOINTLY
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
CALPROP CORPORATION
2001 ANNUAL MEETING OF SHAREHOLDERS
Date: May 24, 2001
Time: 2:00 p.m., local time
Location: Courtyard Marriot
13480 Maxella Avenue
Marina Del Rey, California
Contact: Ms Dori Baron
Telephone: (310) 306-4314
PROXY PROXY
CALPROP CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Calprop Corporation hereby appoints Victor
Zaccaglin and Mark T. Duvall and each of them, with full power of substitution
to each, proxies of the undersigned to represent the undersigned at the 2001
Annual Meeting of Shareholders of Calprop Corporation to be held on May 24, 2001
at the Courtyard Marriot, 13480 Maxella Avenue, Marina Del Rey, California, at
2:00 p.m., local time, and at any adjournment(s) thereof, with all powers,
including voting rights, which the undersigned would possess if personally
present at said meeting.
THIS PROXY WILL BE VOTED AS DIRECTED. UNLESS A CONTRARY DIRECTION IS INDICATED,
THIS PROXY WILL BE VOTED FOR THE PROPOSALS AND ALL OF THE NOMINEES FOR DIRECTOR
LISTED ON THE REVERSE SIDE OF THIS PAGE.
(Continued and to be SIGNED on the reverse side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE