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
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(Name of Registrant as Specified In Its Charter)
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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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(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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CALPROP CORPORATION
13160 Mindanao Way, #180
MARINA DEL REY, CALIFORNIA 90292
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NOTICE OF THE 2002 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 23, 2002
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To the Shareholders of
Calprop Corporation:
The 2002 Annual Meeting of Shareholders of Calprop Corporation, a
California corporation (the "Company"), will be held on May 23, 2002 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;
2. To ratify the selection of independent auditors; and
3. 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, 2002 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 17, 2002
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
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PROXY STATEMENT FOR THE 2002 ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD ON MAY 23, 2002
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GENERAL INFORMATION
This Proxy Statement is being mailed on or about April 17, 2002, 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 2002
Annual Meeting of the Shareholders of the Company to be held on May 23, 2002
(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. 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, 2001 is being
mailed to shareholders concurrently with the mailing of this Notice of Annual
Meeting and Proxy Statement. In addition to this mailing, both Internet voting
(www.eproxy.com/CLPO) and telephonic voting (1-800-435-6710) are being offered
as an alternatives. Furthermore, shareholders may view the above referenced
Annual Report and Proxy Statement on the Company's website at www.calprop.com.
VOTING RIGHTS
The close of business on April 4, 2002 (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 10,293,735
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. 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 for the
transaction of business. Abstentions are counted in the tabulation of the votes
cast on proposals
1
presented to shareholders, whereas broker non-votes are not counted for purposes
of determining whether a proposal has been approved.
Victor Zaccaglin, Chairman of the Board and Chief Executive Officer of the
Company, beneficially owns approximately 43.7% 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 45.4% 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, 2002 (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. 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 10,293,735 shares of Common Stock outstanding on April 4, 2002,
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) . . . . . . . . . . . . . . . . . . . . . . . 4,599,459(3) 44.3%
13160 Mindanao Way, #180
Marina Del Rey, California 90292
John Curci(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,961,610 28.8%
717 Lido Park Drive
Newport Beach, California 92663
Ronald S. Petch(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633,309(6) 6.0%
13160 Mindanao Way, #180
Marina Del Rey, CA 90292
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(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 100,000 shares acquirable under options which
were exercisable by Mr. Zaccaglin on or within sixty (60) days after April
4, 2002.
(4) John Curci is Victor Zaccaglin's cousin.
(5) Ronald S. Petch is Victor Zaccaglin's nephew.
(6) This amount also includes 230,000 shares acquirable under options which
were exercisable by Mr. Ronald S. Petch on or within sixty (60) days after
April 4, 2002.
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following table sets forth, as of April 4, 2002, 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,599,459 44.3%
Ronald S. Petch(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633,309 6.0%
Mark F. Spiro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455,000 4.3%
Richard Greene . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,000 1.8%
Susan Soh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000 0.2%
E. James Murar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 0.1%
Mark T. Duvall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 0.2%
All Directors and Executive Officers as a group (8 persons) . . . . . . . . 5,944,868 53.8%
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(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, 2002:
Ronald S. Petch, 230,000; Mark F. Spiro, 220,000; Richard Greene, 150,000;
Curtis Gullett, 8,600; Susan Soh, 16,000; E. James Murar, 15,000; Mark T.
Duvall, 15,000; all Directors and Executive Officers as a group, 754,600.
(3) See Notes 2 and 3 to the preceding table.
(4) See Notes 5 and 6 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 2003 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 . . . . . . . . . . . . . 57 President of the Company since November, 1993 1974
and prior to that he served as Executive Vice
President, Operations since February, 1992.
Victor Zaccaglin . . . . . . . . . . . . 81 Chairman of the Board and Chief Executive Officer 1961
of the Company since 1961 and also President from
1961 to October, 1987 and from March, 1992 to
November, 1993.
Mark F. Spiro . . . . . . . . . . . . . . 50 Chief Financial Officer of the Company since 1993 1998
and formerly, Chief Financial Officer of Inco
Homes from 1989 to 1993.
E. James Murar . . . . . . . . . . . . . 61 Chairman and Chief Executive Officer of 1999
RecreActions Group of Companies since 1971.
Mark T. Duvall . . . . . . . . . . . . . 41 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 2001. 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 auditors 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, 2001. 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 2001 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 2001 in which its current members, Messrs. Duvall, Zaccaglin and
Murar (the Chairman of the Audit Committee) were present.
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 2001 in which 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 awards its officers
and certain other employees stock options, the objective being to provide a
competitive total long-term incentive opportunity.
5
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 home-building 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 $208,500 for 2001 and
is currently at $208,500 for 2002.
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--Northern California
Division, the Vice President--Southern California Division, Controller, and
Project Manager information concerning the annual and long-term compensation for
services rendered in all capacities to the Company during the fiscal year ended
December 31, 2001, and the two preceding fiscal years.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION
------------------------ --------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY AWARD(S)(9) OPTION(S) COMPENSATION(10)
- ----------------- ------ -------- ------------- ------------ ------------------
Victor Zaccaglin(2) 2001 $208,500 -- -- $ 887
Chairman of the Board and 2000 178,500 -- -- 887
Chief Executive Officer and Director 1999 170,000 -- -- 887
Ronald S. Petch(3) 2001 $286,000 -- -- $1,320
Director, Chief Operating 2000 173,250 -- -- 1,320
Officer and President 1999 165,000 -- 80,000 1,416
Mark F. Spiro(4) 2001 $265,000 -- -- $ 512
Director and Chief Financial Officer 2000 165,000 -- -- 512
1999 145,000 -- 80,000 554
Richard L. Greene(5) 2001 $169,243 -- -- $ 924
Vice President of Northern California Division 2000 120,000 -- -- 804
1999 112,000 -- 40,000 879
Curtis Gullet (6) 2001 $111,222 -- -- $ 246
Vice President of Northern California Division 2000 76,250 -- -- 219
1999 58,890 -- 3,300 5
Susan Soh (7) 2001 $133,750 -- -- $ 298
Controller 2000 95,000 -- -- 282
1999 87,500 -- 8,000 31
Jim Gibson (8) 2001 $121,837 -- -- $ 81
Project Manager 2000 80,000 -- -- 54
1999 71,000 -- 5,000 55
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(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, Gullett, Gibson, and Ms Soh.
7
(2) Mr. Zaccaglin, age 81, 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 57, 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) Mr. Spiro, age 50, has been employed by the Company since November 1993 as
its Vice President of Finance, 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) Mr. Greene, age 54, 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) Mr. Gullett, age 38, is a Vice President of the Southern California
Division of the Company. He has been employed by the Company since February
1997, and prior to December 2000, was general superintendent for the
Company.
(7) Ms Soh, age 32, 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.
(8) Mr. Gibson, age 48, is a project manager of the Company. He has been
employed by the Company since September 1995, and prior to June 1997 was
customer service manager for the Company.
(9) See Summary Restricted Stock Awards Table below.
(10) 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, Gullett, Gibson and Ms Soh.
All of the Company's executive officers serve at the pleasure of the Board
of Directors.
8
SUMMARY RESTRICTED STOCK AWARDS TABLE
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, as shown in the following table:
AGGREGATE NO. OF NO. OF SHARES
NAME DATE OF GRANT SHARES GRANTED SHARES GRANTED VESTED AT 12/31/01 VALUE AT 12/31/01
- ---- ------------- -------------- ---------------- ------------------ -----------------
Victor Zaccaglin 10/31/91 20,000 110,000 104,000 $ 93,500
10/6/93 30,000
10/4/95 30,000
10/8/97 30,000
Ronald S. Petch 2/2/92 10,000 120,000 104,000 $102,000
10/6/93 20,000
10/4/94 20,000
10/4/95 20,000
10/8/97 20,000
10/5/98 30,000
Mark F. Spiro 11/3/93 10,000 70,000 56,000 $ 59,500
10/4/94 10,000
10/4/95 10,000
10/8/97 10,000
10/5/98 30,000
Richard Greene 10/31/91 3,000 38,000 31,000 $ 32,300
10/6/93 5,000
10/4/94 5,000
10/4/95 5,000
10/8/97 5,000
10/5/98 15,000
Curtis Gullett 10/8/97 1,000 2,500 1,700 $ 2,125
10/5/98 1,500
Susan Soh 10/5/98 2,000 2,000 1,500 $ 2,125
Jim Gibson 10/5/98 2,500 2,500 1,200 $ 1,700
9
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, Gullett, Gibson and Ms Soh.
NUMBER OF SHARES OF
COMMON STOCK UNDERLYING VALUE OF UNEXERCISED
SHARES ACQUIRED UNEXERCISED OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
UPON EXERCISE DECEMBER 31, 2001 DECEMBER 31, 2001(1)
------------------------ --------------------------- ----------------------------
NAME NUMBER VALUE RECEIVED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------ -------------- ----------- ------------- ----------- -------------
Victor Zaccaglin 330,000 -- 100,000 -- $16,250 --
Ronald S. Petch 325,000 -- 230,000 -- 11,375 --
Mark F. Spiro 170,000 -- 220,000 -- 9,750 --
Richard L. Greene 10,000 $8,125 152,000 -- 5,875 --
Curtis Gullett -- -- 8,600 -- 325 --
Susan Soh -- -- 16,000 -- -- --
Jim Gibson -- -- 10,000 -- -- --
- --------------------
(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
10
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 maybe exercised
after the expiration of ten years from the date of grant.
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 at December 31, 2001. Mr. John Curci, Sr., a principal
shareholder of the Company, at December 31, 2001, is a principal of Curci-Turner
Company . Under the terms of certain of the notes payable, Mr. Curci receives
interest and participates in "Net Proceeds" from certain projects, as defined in
the loan agreement, which is comparable to net profit:
PROJECT MATURITY DATE INTEREST RATE PROFIT SHARE DECEMBER 31, 2001
--------- --------------- --------------- -------------- -------------------
Parc Metropolitan . . . . . June 2002 20% 0% $ 3,000,000
High Ridge Court . . . . . . December 2002 12% 50% 2,414,492
Saddlerock . . . . . . . . . Demand 12% 50% 2,595,711
Mockingbird Canyon . . . . April 2002 12% 50% 1,927,405
Montserrat Classics. . . . . November 2002 12% 50% 2,304,234
---------------
12,241,842
---------------
Other:
Unsecured loans. . . . . . June 2002 - July 2004 10% to 15% 8,366,236
---------------
$ 20,608,078
===============
During 1999, the Company purchased RGC's fifty percent ownership in RGCCLPO
Development Co., LLC, 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, 2001, the
outstanding principal balance on this loan totaled $1,000,000. The note was paid
in its entirety in January 2002.
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, 2001, the outstanding principal
due Mr. Victor Zaccaglin and Mr. John Curci, Sr. on these notes was $581,542 and
$462,330, respectively.
11
Included in notes payable to related parties is a note payable to Mission
Gorge, LLC which bears interest at 12%. The outstanding balance as of December
31, 2001 was $2,000,000. Mission Gorge, LLC was formed by the Company and the
Curci-Turner Company to develop a 20 acre parcel in the City of San Diego,
California.
Included in notes payable to related parties are notes payable to Victor
Zaccaglin which bear interest at 12%. Outstanding balances as of December 31,
2001 aggregated $557,211. The Company has other loans from related parties,
which provide for interest at 10% and prime plus 1% (5.75% at December 31, 2001)
per annum and in which certain loans are due on demand. As of December 31, 2001
these loans totaled $980,000.
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 $0.89
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 had an original maturity date of March 10, 2001. 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 had an original
maturity date of October 15, 2001. The note's maturity date was extended to
October 15, 2002 and the current amount outstanding is $4,062.50.
As of December 31, 2001, accrued interest for the stock purchase loans was
$86,421.
12
PROPOSAL No. 2
RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS
The Board of Directors selected Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending December 31, 2002, and has
further directed that management submit the selection of independent auditors
for ratification by the stockholders at the Annual Meeting. Deloitte & Touche
LLP has audited the Company's financial statements since 1989.
Shareholder ratification of the selection of Deloitte & Touche LLP as the
Company's independent auditors is not required by the Company's By-laws or
otherwise. The Board of Directors is submitting the selection of Deloitte &
Touche LLP to the stockholders for ratification as a matter of good corporate
practice. In the event the stockholders fail to ratify the selection, the Board
of Directors will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Board of Directors, in its discretion, may direct the
appointment of a different independent accounting firm at any time during the
year if the Board of Directors determines that such a change would be in the
best interest of the Company and its stockholders. The affirmative vote of the
holders of a majority of the shares represented and voting at the Annual Meeting
will be required to ratify the selection of Deloitte & Touche LLP.
INDEPENDENT AUDITORS
Deloitte & Touche LLP served as the Company's auditors in calendar year
2001. The Audit Committee of the Board of Directors has selected Deloitte &
Touche LLP as the independent auditors of the Company for calendar year 2002 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 2002. 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 auditors and considers the
possible effect on the independence of the accountants.
AUDIT FEES. The aggregate fees billed for professional services rendered by
Deloitte & Touche, LLP for the annual financial statements for the year ended
December 31, 2001 and the reviews of financial statemens included in our
Quarterly reports on Form 10-Q for the year was $47,250.
OTHER FEES. The aggregate fees billed for the services rendered to us by
Deloitte & Touche, other than the fees for services discussed above, during our
2001 fiscal year were $24,875. These services consisted of tax preparation.
No relationship exists between the Company and Deloitte & Touche LLP other
than the usual relationship between independent auditors and client.
13
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 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, 2001, its directors,
officers and 10% shareholders complied with all filing requirements under
Section 16(a) of the Exchange Act.
PERFORMANCE GRAPH
The following performance graph compares the performance of the Company's
common stock to the Russell 2001 Index and an average of a group of six home
builders, which includes California Coastal Communities, Inc. (CALC), Capital
Pacific Holdings, Inc. (CPH), Century Builders Group, Inc. (CNYB), Dover
Investments Corp., (DOVRA), Fortress Group, Inc. (FRTG), and Oriole Homes Corp.
(OHC.B) for the five years ended December 31, 2001. The graph assumes that the
value of the investment in the common stock and each index was $100 at December
31, 1996, and that all dividends were reinvested. The Company believes that such
comparison remains a fair reflection of companies with comparable market
capitalization to that of the Company.
14
CUMULATIVE TOTAL RETURN
BASED UPON AN INITIAL INVESTMENT OF $100 ON DECEMBER 31, 1996
WITH DIVIDENDS REINVESTED
[PERFORMANCE GRAPH]
DEC-96 DEC-97 DEC-98 DEC-99 DEC-00 DEC-01
Calprop Corporation $100 $138 $300 $319 $213 $170
Russell 2000 $100 $122 $119 $145 $140 $144
New Custom Composite Index (6 stocks) $100 $ 86 $ 55 $ 48 $ 29 $ 43
Old Custom Composite Index (4 stocks) $100 $104 $111 $ 93 $164 $302
THE OLD CUSTOM COMPOSITE INDEX CONSISTS OF CAPITOL COMMUNITIES CORPORATION,
MERITAGE CORPORATION, SCHULER HOMES, INC. AND FIRST CINCINNATI INC. (FKA ZARING
NATIONAL CORPORATION) (THROUGH 4Q00).
THE NEW CUSTOM COMPOSITE INDEX CONSISTS OF CALIFORNIA COASTAL COMMUNITIES, INC.,
CAPITAL PACIFIC HOLDINGS, INC., CENTURY BUILDERS GROUP, INC., DOVER INVESTMENTS
CORP., FORTRESS GROUP, INC., ORIOLE HOMESCORP. - CLASS B.
15
SHAREHOLDER PROPOSALS
A shareholder proposal intended to be presented at the Company's 2003
annual shareholders meeting must be received by the Company at its principal
executive offices on or before January 3, 2003, 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 17, 2002
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.
16
Please mark
your votes as [X]
THE BOARD OF DIRECTORS RECOMMENDS indicated in
A VOTE FOR ITEM 1. this example
FOR WITHHELD
FOR ALL
Item 1-ELECTION OF DIRECTORS / / / / FOR AGAINST ABSTAIN
Nominees: ITEM 2-TO RATIFY THE SELECTION OF INDEPENDENT PUBLIC / / / / / /
01 Victor Zaccaglin ACCOUNTANTS.
02 E. James Murar
03 Ronald S. Petch FOR AGAINST ABSTAIN
04 Mark F. Spiro ITEM 3-TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY / / / / / /
05 Mark T. Duvall COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
WITHHELD FOR: (Write that nominee's name in the
space provided below).
- -----------------------------------------------
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 2002 Annual Meeting of Shareholders and accompanying
Proxy Statement dated April 16, 2002. 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.
Signature __________________________________________ Signature ________________________________________ Date ________________, 2002
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.
- ------------------------------------------------------------------------------------------------------------------------------------
^ DETACH HERE FROM PROXY VOTING CARD ^
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 4PM EASTERN TIME
THE BUSINESS DAY PRIOR TO ANNUAL MEETING DAY.
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES IN THE SAME MANNER
AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
- ---------------------------------------- ---------------------------------------- ----------------------------------------
INTERNET TELEPHONE MAIL
HTTP://WWW.EPROXY.COM/CLPO 1-800-435-6710
Use the Internet to vote your proxy. Use any touch-tone telephone to Mark, sign and date
Have your proxy in hand when you vote your proxy. Have your proxy your proxy card
access the web site.You will be OR card in hand when you call. You will OR and
prompted to enter your control be prompted to enter your control return it in the
number, located in the box below, to number, located in the box below, enclosed postage-paid
create and submit an electronic ballot. and then follow the directions given. envelope.
- ---------------------------------------- ---------------------------------------- ----------------------------------------
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
YOU CAN VIEW THE ANNUAL REPORT AND PROXY STATEMENT
ON THE INTERNET AT: HTTP://WWW.CALPROP.COM
PROXY PROXY
CALPROP CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE 2002 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 2002
Annual Meeting of Shareholders of Calprop Corporation to be held on May 23, 2002
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 MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
^ DETACH HERE FROM PROXY VOTING CARD. ^
CALPROP CORPORATION
2002 ANNUAL MEETING OF SHAREHOLDERS
Date: May 23, 2002
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