<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
IMC Mortgage Company
- - --------------------------------------------------------------------------------
(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:
<PAGE> 2
[IMC (SM) LOGO]
3450 BUSCHWOOD PARK DRIVE
SUITE 250
TAMPA, FL 33618
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 9, 1997
To the Stockholders of IMC MORTGAGE COMPANY:
The 1997 annual meeting of stockholders of IMC Mortgage Company (the
"Company"), a Florida Corporation, will be held at the Sheraton Grand Hotel,
4860 West Kennedy Boulevard, Tampa, Florida on July 9, 1997 at 10:30 a.m.,
prevailing local time, for the following purposes:
1. To elect one director to the Board of Directors to serve until the
2000 annual meeting of stockholders;
2. To approve the adoption of the IMC Mortgage Company 1997 Incentive
Plan by the Board of Directors;
3. To ratify the appointment of Coopers & Lybrand L.L.P. as
independent accountants for the Company for the 1997 fiscal year; and
4. To transact such other business as may be properly brought before
the meeting and any adjournments thereof. The Board is presently aware of
no other business to come before the annual meeting.
The Board of Directors has fixed the close of business on May 30, 1997 as
the record date for the determination of stockholders entitled to receive notice
of and to vote at the annual meeting or any adjournment thereof. Shares of
Common Stock can be voted at the annual meeting only if the holder is present at
the annual meeting in person or by valid proxy. We hope that you will attend the
meeting in person. Your Board of Directors and management look forward to
greeting those stockholders able to attend.
By Order of the Board of Directors,
/s/ George Nicholas
George Nicholas
Chairman of the Board and Chief
Executive Officer
Tampa, Florida
June 12, 1997
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE SIGN, DATE AND RETURN THE ENCLOSED
PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU
MAY, IF YOU WISH, REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
[IMC (SM) LOGO]
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement and enclosed form of proxy are being furnished in
connection with the solicitation of proxies on behalf of the board of directors
(the "Board" or the "Board of Directors") of IMC Mortgage Company, a Florida
corporation (the "Company" or "IMC"), for use at the annual meeting of
stockholders to be held on July 9, 1997 at 10:30 a.m. at the Sheraton Grand
Hotel, 4860 West Kennedy Boulevard, Tampa, Florida and any adjournment thereof
(the "Annual Meeting"), for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. Any proxy given pursuant to such solicitation
and received in time for the Annual Meeting will be voted as specified in such
proxy. If no instructions are given, proxies will be voted FOR all proposals
listed in the Notice of Annual Meeting of Stockholders and in the discretion of
the proxies named on the proxy card with respect to any other matter properly
brought before the Annual Meeting.
Only stockholders of record at the close of business on May 30, 1997 are
entitled to notice of and to vote at the Annual Meeting. At the close of
business on May 30, 1997, there were 27,646,097 shares of the Company's common
stock, par value $0.01 per share (the "Common Stock"), outstanding. Each share
of Common Stock entitles the record holder thereof to one vote on all matters
properly brought before the Annual Meeting. The holders of a majority of the
voting power of the issued and outstanding Common Stock entitled to vote,
present in person or represented by proxy, shall constitute a quorum at the
Annual Meeting. A person giving the enclosed proxy has the power to revoke it
any time before it is exercised by (i) attending the Annual Meeting and voting
in person, (ii) duly executing and delivering a proxy bearing a later date, or
(iii) sending a written notice of revocation to the Company's Secretary.
The cost of solicitation will be borne by the Company. Arrangements have
been made with brokerage houses and other custodians, nominees and fiduciaries
for the forwarding of solicitation material to the beneficial owners of Common
Stock.
Abstentions may be specified on all proposals being submitted. Abstentions
and broker non-votes will be treated as shares that are present and entitled to
vote for purposes of determining the presence of a quorum, but as unvoted for
purposes of determining the approval of any matter submitted to the shareholders
for a vote.
The annual report to shareholders, including consolidated financial
statements, is being sent contemporaneously with this Proxy Statement. Such
annual report does not form any part of the proxy solicitation materials.
PROPOSAL 1
ELECTION OF DIRECTOR
The Company's Articles of Incorporation provide that the Company's Board of
Directors consists of such number of persons as shall be fixed by the Board of
Directors from time to time by resolution and is divided into three classes,
with each class to be as nearly equal in number of directors as possible. See
"Information Concerning Directors and Nominees" below. The Company's Bylaws
provide that the Board of Directors shall consist of no fewer than one nor more
than ten persons. Currently there are five directors. The term of office of the
directors in each of the three classes expires at the annual meeting of
stockholders in 1997 through 1999, respectively. Mr. Legler serves until his
term ends at the Annual Meeting. Messrs. Wykle and Goryeb serve until the 1998
annual meeting of stockholders. Messrs. Nicholas and Middleton serve until the
1999 annual meeting of stockholders. At each annual meeting, the successors to
the class of directors whose term expires at that time are to be elected to hold
office for a term of three years, and until their respective successors are
elected and qualified, so that the term of one class of directors expires at
each such annual meeting. In the case of any vacancy on the Board of Directors,
including a vacancy created by an increase in the number of
<PAGE> 4
directors, the vacancy shall be filled by the Board of Directors, with the
director so elected to serve until the next annual meeting of stockholders. Any
newly-created directorships or decreases in directorships are to be assigned by
the Board of Directors so as to make all classes as nearly equal in number as
possible.
At the Annual Meeting, one director will be elected whose term will expire
at the 2000 annual meeting of stockholders. Mr. Legler, whose term of office
expires at the Annual Meeting, has been nominated for re-election at the Annual
Meeting. The shares represented by the enclosed proxy will be voted in favor of
Mr. Legler, unless a vote is withheld from the nominee. If the nominee becomes
unavailable for any reason, or if a vacancy should occur before election (which
events are not anticipated), the shares represented by the enclosed proxy may be
voted for such other person as may be determined by the holders of such proxy.
Votes that are withheld will be excluded entirely from the vote and will have no
effect. Directors are elected by a plurality of the votes cast at the Annual
Meeting either in person or by proxy.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NOMINEE.
INFORMATION CONCERNING DIRECTORS AND NOMINEE
Background information with respect to the nominee for election and the
four directors whose terms of office will continue after the Annual Meeting
appears below. See "Security Ownership of Management" for information regarding
such persons' holdings of Common Stock.
Nominee to Serve For Three Year Term Expiring at the 2000 Annual Meeting
MITCHELL W. LEGLER. Mr. Legler, 55, has served as a director of IMC since
April 1996. Mr. Legler is the sole stockholder of Mitchell W. Legler, P.A. and
has been general counsel to IMC since August 1995. Mr. Legler is currently a
director of Stein Mart, Inc., a Nasdaq listed company. From January 1991 to
August 1995, Mr. Legler was a partner of Foley & Lardner, prior to which he was
a partner of Commander, Legler, Werver, Daws, Sakler & Howell, P.A., attorneys
at law in Jacksonville, Florida.
Directors Continuing in Office Until the 1998 Annual Meeting
JOSEPH P. GORYEB. Mr. Goryeb, 66, has served as a director of IMC since
April 1996. Mr. Goryeb is the Chairman and Chief Executive Officer of Champion
Mortgage Co., Inc., a leading non-conforming residential mortgage institution
that was founded by Mr. Goryeb in 1981. His 40 years of experience in the
consumer lending industry include previous positions with Beneficial Finance
Company and Suburban Finance Company.
ALLEN D. WYKLE. Mr. Wykle, 50, has served as a director of IMC since April
1996. Mr. Wykle has been the Chairman of the Board and Chief Executive Officer
of Approved Financial Corp. (formerly American Industrial Loan Association), a
non-conforming mortgage lending institution, since 1984. Mr. Wykle was owner,
President, and Chief Executive Officer of Best Homes of Tidewater, Inc., a
residential construction and remodeling company in Virginia, from 1972 to 1986.
Directors Continuing in Office Until the 1999 Annual Meeting
GEORGE NICHOLAS. Mr. Nicholas, 54, has served as a director and as Chief
Executive Officer and Chairman of the Board of IMC since the formation of the
Company in December 1995 and as Assistant Secretary of IMC since April 1996.
Since his founding of Industry Mortgage Company, L.P., a Delaware limited
partnership (the "Partnership"), in August 1993, Mr. Nicholas has served as
Chief Executive Officer of the Partnership and Chairman of the Board and sole
stockholder of its general partner. The Company acquired the Partnership in June
1996. Mr. Nicholas' experience in the lending business spans 32 years. He has
previously held positions at General Electric Credit Corp., Household Finance
Corp., and American Financial Corporation of Tampa ("AFC"), a company of which
he was the owner and Chief Executive Officer from its formation in February 1986
until it was acquired by Equibank in 1988. From February 1988 until May 1992,
Mr. Nicholas was President of AFC, which was a wholesale lending institution
specializing in
2
<PAGE> 5
the purchase of non-conforming mortgage loans. From June 1992 until July 1993,
Mr. Nicholas was an independent mortgage industry consultant.
THOMAS G. MIDDLETON. Mr. Middleton, 50, has served as a director and as
President and Chief Operating Officer of IMC since April 1996. Mr. Middleton has
served as Chief Operating Officer of the Partnership since August 1993 and as
President of the Partnership since July 1995. Mr. Middleton has 26 years of
experience in the lending business. From April 1992 until August 1993, Mr.
Middleton was Senior Vice-President of Shawmut National Corporation and from
February 1991 until April 1992, Mr. Middleton was Managing Director of STG
Financial Inc. Mr. Middleton served as Executive Vice-President and Chief Credit
Officer of Equimark Corp. from June 1987 until February 1991.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held five meetings in 1996. During
such year, each Director attended more than 75% of the meetings held by the
Board of Directors and the committees on which he served. The Board also acts
from time to time by unanimous written consent in lieu of meetings.
The Company has an Audit Committee, a Compensation Committee, an Option
Committee, and an Executive Committee.
Audit Committee. The Audit Committee consists of Messrs. Goryeb, Legler,
and Wykle. The Audit Committee makes recommendations concerning the engagement
of independent public accountants, reviews with the independent public
accountants the plans and results of the audit engagement, approves professional
services provided by the independent public accountants, reviews the
independence of the independent public accountants, considers the range of audit
and nonaudit fees, and reviews the adequacy of the Company's internal accounting
controls. The Audit Committee held its first meeting in February, 1997.
Compensation Committee. The Compensation Committee consists of Messrs.
Nicholas, Middleton, and Legler. The Compensation Committee determines the
compensation of the Company's executive officers. The Compensation Committee did
not meet in 1996. Stuart Marvin's Employment Agreement was approved by the Board
of Directors as a whole.
Option Committee. The Option Committee consists of Messrs. Goryeb and
Wykle and has authority to administer the Company's stock option plans and to
grant options thereunder. The Option Committee met two times in 1996.
Executive Committee. The Executive Committee consists of Messrs. Nicholas,
Middleton, and any one other member of the Board of Directors. The Executive
Committee did not meet during 1996, but took a number of actions by written
consent.
The Company does not have a nominating committee. The functions customarily
performed by a nominating committee are performed by the Board of Directors as a
whole. Any stockholder who wishes to make a nomination at an annual or special
meeting for the election of directors must do so in compliance with the
applicable procedures set forth in the Company's Bylaws. The Company will
furnish Bylaw provisions upon written request to Laurie Williams, Secretary, at
the Company's principal executive offices, 3450 Buschwood Park Drive, Suite 250,
Tampa, FL 33618, before July 4, 1997, or if the written request is sent after
July 4, 1997, to the Company's principal executive offices at 5901 E. Fowler
Avenue, Tampa, FL 33617-2362.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive stock options
pursuant to the Directors' Stock Option Plan (the "Directors' Plan"). Each of
Messrs. Goryeb, Legler, and Wykle has received ten year options to purchase
12,932 shares of Common Stock pursuant to the Directors' Plan at $2.35 per
share. The Company pays non-employee directors $6000 per year plus $2500 for
each meeting attended. All directors receive reimbursement of reasonable
out-of-pocket expenses incurred in connection with meetings of the Board of
Directors. No director who is an employee of the Company receives separate
compensation for services rendered as a director.
3
<PAGE> 6
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Messrs.
Nicholas, Middleton, and Legler. Messrs. Nicholas and Middleton are Executive
Officers of the Company. Mr. Legler is the sole stockholder in Mitchell W.
Legler, P.A., which is retained by the Company as its general counsel. No
interlocking relationship exists between the Company's Board of Directors or
officers responsible for compensation decisions and the board of directors or
compensation committee of any other company, nor has any such interlocking
relationship existed in the past. Messrs. Nicholas, Middleton, and Legler serve
on the Compensation Committee and Messrs. Nicholas and Middleton are executive
officers of the Company.
EXECUTIVE OFFICERS
The executive officers of the Company as of the date of this Proxy
Statement are identified below, together with information regarding the business
experience of such officers. Information regarding the business experience of
Messrs. Nicholas and Middleton is set forth above under the heading "Information
Concerning Directors and Nominee." Each executive officer is elected by the
Board of Directors of the Company and serves at the pleasure of the Board.
<TABLE>
<CAPTION>
NAME POSITION
- - ---- --------
<S> <C>
George Nicholas............................... Chief Executive Officer, Chairman of the Board, and
Assistant Secretary
Thomas G. Middleton........................... President and Chief Operating Officer
Stuart D. Marvin.............................. Chief Financial Officer
<CAPTION>
NAME (AGE) BUSINESS EXPERIENCE
- - ---------- -------------------
<S> <C>
George Nicholas (54).......................... See "Information Concerning Directors and Nominee"
Thomas G. Middleton (50)...................... See "Information Concerning Directors and Nominee"
Stuart D. Marvin (37)......................... Mr. Marvin joined the Company as its Chief Financial
Officer on August 1, 1996. Mr. Marvin is a certified
public accountant and was most recently a partner in
the Jacksonville, Ft. Lauderdale, and Miami, Florida
offices of Coopers & Lybrand L.L.P. Mr. Marvin has
more than fifteen years of public accounting
experience.
</TABLE>
4
<PAGE> 7
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth compensation
earned, whether paid or deferred, by the Company's Chief Executive Officer and
other executive officers whose compensation exceeded $100,000 during the year
ended December 31, 1996 for all services rendered in all capacities as employees
of the Company during the years ended December 31, 1994, 1995, and 1996.
Information is provided for each fiscal period during which such persons were
employed by the Company.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
---------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS(2)
- - --------------------------- ---- -------- ---------- --------------- ------------
<S> <C> <C> <C> <C> <C>
George Nicholas, Chairman.............. 1994 $208,954 $ -- $ -- --
of the Board, Chief 1995 233,492 100,000 4,927 565,732
Executive Officer 1996 475,000 1,425,000 6,500 --
Thomas G. Middleton,................... 1994 $215,279 $ 20,000 $ -- --
President, Chief Operating 1995 208,144 25,000 6,500 282,866
Officer 1996 380,000 1,140,000 9,500 --
Stuart D. Marvin, Chief Financial
Officer(3)........................... 1996 $111,677 $ 93,750 $ -- 120,000
</TABLE>
- - ---------------
(1) Represents matching contributions by IMC under the IMC Savings Plan, a
defined contribution plan under Section 410(k) of the Internal Revenue Code,
as amended.
(2) Represents number of shares of Common Stock underlying options, adjusted for
the two-for-one split of common stock payable on February 13, 1997.
(3) Represents compensation since commencement of employment on August 1, 1996,
and includes reimbursement of $17,927 for relocation costs to Tampa,
Florida.
Option Grants. The following table contains information concerning the
stock option grants made to Stuart D. Marvin, who received stock options during
the year ended December 31, 1996 as part of the terms of his employment.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------
MARKET PRICE OF
PERCENT OF TOTAL UNDERLYING
NUMBER OF OPTIONS SECURITIES ON THE
SECURITIES GRANTED TO DATE OF GRANT IF
UNDERLYING EMPLOYEES PER SHARE HIGHER THAN
OPTIONS IN FISCAL EXERCISE EXERCISE
NAME GRANTED YEAR PRICE(1) PRICE(2) EXPIRATION DATE
- - ---- ---------- ---------------- --------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Stuart D. Marvin............. 120,000(3) 35.3% $8.00 $12.00 August 1, 2006
</TABLE>
- - ---------------
(1) The exercise price may be paid in cash, in shares of Common Stock valued at
fair market value on the date of exercise, or pursuant to a cashless
exercise procedure involving a same-day sale of the purchased shares. The
Company may also allow the optionee to pay the aggregate exercise price plus
any tax liability incurred in connection with the exercise with a promissory
note.
(2) The price of Common Shares was $12.00 per share on August 1, 1996, but Mr.
Marvin received 120,000 options for restricted and unregistered shares of
common stock, the fair market value as estimated by a Committee of the Board
of Directors to be $8.00 per share, as part of the negotiated terms of his
employment.
(3) The option vests over five years, at the rate of 1/60 of the total number of
shares subject to the option granted at the end of each consecutive calendar
month beginning August 1996, so that the option shall be fully vested on
July 31, 2001.
The following table shows the hypothetical value of the options granted at
the end of the option term (ten years) if the stock price were to appreciate
annually by 5% and 10%, respectively. The base price is $12, the
5
<PAGE> 8
price of a share of IMC stock on the date the options were granted. There can be
no assurance provided to any executive officer or any other holder of the
Company's securities that the actual stock price appreciation over the ten year
option term will be at the assumed five percent or ten percent levels or at any
other defined level. Unless the market price of the Common Stock appreciates
over the option term, no value will be realized from the option grants to the
executive officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE OF
NUMBER OF ASSUMED ANNUAL RATES OF STOCK PRICE
SECURITIES APPRECIATION FOR OPTION TERM
UNDERLYING -------------------------------------
NAME OPTIONS GRANTED 0% 5% 10%
- - ---- --------------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Stuart D. Marvin............................... 120,000 $480,000 $1,385,608 $2,774,989
------- -------- ---------- ----------
</TABLE>
Aggregated Option Exercises and Year-End Option Values. The following
table sets forth information concerning the value of unexercised options held by
each of the executive officers at December 31, 1996. No options or stock
appreciation rights were exercised during 1996 and no stock appreciation rights
were outstanding at the end of that year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR END AT FISCAL YEAR END(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
George Nicholas............................. 452,586 113,146 $6,517,238 $1,629,302
Thomas G. Middleton......................... 226,292 56,574 3,258,605 814,666
Stuart D. Marvin............................ 10,000 110,000 87,500 962,500
</TABLE>
- - ---------------
(1) Based on the closing price of $16.75 per share, adjusted for the two-for-one
stock split, of the Common Stock on Nasdaq on December 31, 1996, the last
trading day of the Company's fiscal year.
EMPLOYMENT AGREEMENTS
The Company has employment agreements with George Nicholas, its Chairman
and Chief Executive Officer, Thomas G. Middleton, its President and Chief
Operating Officer, and Stuart D. Marvin, its Chief Financial Officer
("Employment Agreements").
Mr. Nicholas' Employment Agreement commenced on January 1, 1996 and
terminates on December 31, 2001 (subject to automatic five year extensions,
unless either the Company or Mr. Nicholas gives a notice of termination six
months prior to the extension). The Employment Agreement provides for an annual
salary of $475,000, plus an increase each year equal to the greater of (i) the
change of the cost of living in Tampa, Florida, or (ii) an amount equal to ten
percent of the base salary for the prior year, but only if the Company has
achieved an increase in net income per share of ten percent or more in that
year. In addition, the Employment Agreement provides for payment of a bonus
equal to fifteen percent of the base salary for the relevant year for each one
percent by which the increase in net income per share exceeds ten percent, up to
a maximum of three hundred percent of his base salary. Mr. Nicholas is entitled
to deferred compensation upon (i) his termination by the Company without cause
(as defined in the Employment Agreement), (ii) the Company's failure to renew
his Employment Agreement on expiration, (iii) death or disability, (iv)
voluntary termination by Mr. Nicholas after a material breach by the Company,
and (v) voluntary termination after a change of control (as defined in the
Employment Agreement). If Mr. Nicholas is terminated for cause or voluntarily
terminates his employment (in the absence of a Company breach or a change of
control) he does not receive any deferred compensation. The amount, if any, of
deferred compensation payable to Mr. Nicholas will be equal to the greater of
(i) his base salary for the remainder of the then-current term of the Employment
Agreement, or (ii) an amount equal to one hundred fifty percent of the highest
annual compensation earned by him during the preceding three years. Mr.
Nicholas' Employment Agreement contains a restrictive covenant prohibiting him,
for a period of eighteen months following the termination of his employment for
any reason, from competing with the Company within the continental United States
or from soliciting any employees from the Company who are earning in excess of
$50,000 per year. This
6
<PAGE> 9
restrictive covenant is not applicable, however, if Mr. Nicholas is terminated
without cause or if the Company defaults in the payment of deferred compensation
or otherwise materially breaches the Employment Agreement. The Employment
Agreement also provides that the Company shall indemnify Mr. Nicholas for any
and all liabilities to which he may be subject as a result of his services to
the Company.
Mr. Middleton's Employment Agreement commenced on January 1, 1996 and
contains terms that are substantially the same as those of Mr. Nicholas'
Employment Agreement, with the exception that Mr. Middleton's annual salary is
$380,000, plus increases as provided herein.
Mr. Marvin's Employment Agreement commenced on August 1, 1996 and extends
until December 31, 1999. The Employment Agreement provides for an annual salary
of $225,000 commencing August 1, 1996, plus an increase each calendar year equal
to the greater of (i) the change in the cost of living in Tampa, Florida, or
(ii) an amount equal to ten percent of the base salary for the prior year, but
only if the Company has achieved an increase in net income per share of ten
percent or more in that year. In addition, the Employment Agreement provides for
a payment of a bonus equal to five percent of the base salary of the relevant
year for each one percent by which the increase in net income per share exceeds
ten percent up to a maximum of one hundred percent of his base salary.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation for inclusion in this proxy
statement:
Compensation Philosophy. Base salaries for executive officers shown
on the summary compensation table set forth above under "Executive
Compensation" were established by employment agreement prior to the
Company's initial public offering in June of 1996 and continue through
2000, except in the case of Stuart Marvin, the Company's Chief Financial
Officer, whose employment agreement was executed in August of 1996 and
extends until December 31, 1999. Mr. Marvin's employment agreement was
approved by the Board of Directors as a whole. The employment agreements
are described in more detail above and the Compensation Committee believes
that those agreements established base salaries which are conservative
compared with the Company's industry peers. The employment agreements call
for bonuses which can be as much as three times base salary as to the
Company's Chief Executive Officer and its President and up to one hundred
percent of base salary of the Company's Chief Financial Officer.
As the bonuses for the Company's executive officers are a direct
function of increases in earnings per share, the Compensation Committee
believes that the compensation plan and employment agreements for the
Company's executive officers are in line with the Company's dual goals of
rewarding performance and establishing compensation arrangements which
align the interests of officers with those of the Company's shareholders.
Long-Term Incentive Compensation. The Company has an Employee Stock
Option Plan, the purpose of which is to provide long-term incentive to the
Company's key employees. The Compensation Committee believes that options
are a principal vehicle for motivating management to work toward long-term
growth and shareholder value. Consistent with the Company's philosophy of
providing incentives to key employees, options have been awarded to a
relatively broad base of employees. Options have been awarded based upon
position with the company, ability to contribute to the Company's
profitability, and prior tenure with the Company. For additional
information as to options held by executive officers, see the table under
"Executive Compensation" above.
The employee stock options similarly reflect the Company's philosophy
that officers' and employees' incentive compensation should reflect the
same long-term interests as those of the Company's shareholders. To
encourage continued service with the Company, the options vest over a
five-year period of employment with the Company. Additional increases in
the value of the Common Stock, which benefit all shareholders, will thus
serve as a primary incentive to officers and key employees.
7
<PAGE> 10
CEO Compensation. George Nicholas, Chairman and Chief Executive
Officer, received his option grant from the Company's predecessor, Industry
Mortgage Company, L.P., a Delaware limited partnership (the "Partnership")
and that grant was approved by all partners of the Partnership. Mr.
Nicholas is a member of the Compensation Committee.
IMC MORTGAGE COMPANY
COMPENSATION COMMITTEE:
Mitchell W. Legler, Secretary
George Nicholas
Thomas G. Middleton
STOCK PERFORMANCE GRAPH
The following graph depicts the cumulative total return on the Company's
common stock compared to the cumulative total return for The Nasdaq Combined
Composite Index ("Nasdaq Composite") and a peer group selected by the Company on
an industry and line-of-business basis, the Nasdaq Combined Financial Index
("Nasdaq Financial"). The graph assumes an investment of $100 on June 25, 1996,
when the Company's stock was first traded in a public market.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) IMC Nasdaq Composite Nasdaq Financial
<S> <C> <C> <C>
June 25, 1996 100.00 100.00 100.00
June 28, 1996 109.76 101.06 100.30
September 30, 1996 156.10 104.63 110.53
December 31, 1996 163.41 110.1 123.17
</TABLE>
8
<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of May 31, 1997, concerning
the Common Stock of the Company beneficially owned (i) by each director and
nominee for election as director of the Company, (ii) by the Company's executive
officers, (iii) by all executive officers and directors as a group, and (iv) by
each stockholder known by the Company to be the beneficial owner of more than
five percent of the outstanding Common Stock. Unless otherwise indicated in the
footnotes to the table, the beneficial owners named have, to the knowledge of
the Company, sole voting and dispositive power with respect to shares
beneficially owned, subject to community property laws where applicable.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
-----------------------
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES PERCENT(1)
- - ------------------------------------ --------- ----------
<S> <C> <C>
ContiTrade Services Corporation(2).......................... 2,160,000 7.25%
277 Park Avenue
New York, NY 10172
Branchview, Inc.(3)......................................... 1,661,856 6.01
989 McBride Avenue
West Patterson, NJ 07424
George Nicholas(4).......................................... 1,453,496 5.19
3450 Buschwood Park Drive
Tampa, FL 33618
Joseph P. Goryeb(5)(6)...................................... 1,183,460 4.28
Waterview Corporate Centre
20 Waterview Boulevard
Parsippany, NJ 07054-1267
Stuart D. Marvin(7)......................................... 24,000 *
3450 Buschwood Park Drive
Tampa, FL 33618
Mitchell W. Legler(5)(8).................................... 94,342 *
Independent Drive, Suite 3104
Jacksonville, FL 32202
Allen D. Wykle(5)(9)........................................ 21,456 *
3420 Holland Road
Virginia Beach, VA 23452
All directors and executive officers as a group (6
persons).................................................. 3,217,521 11.36
</TABLE>
- - ---------------
* Represents less than one percent (1%)
(1) Based on an aggregate of (i) the number of shares of the Company's Common
Stock outstanding as of May 31, 1997 and (ii) options vested as of July 31,
1997.
(2) Consists of 2,160,000 shares of Common Stock issuable upon the exercise of
the Conti Warrant, which is currently exercisable for a de minimis amount.
(3) Excludes 110,000 registered shares purchased by shareholders of Branchview,
Inc. in the Company's initial public offering.
(4) Includes 362,586 shares of Common Stock issuable upon the exercise of
options under the Incentive Plan.
(5) Includes 10,346 shares of Common Stock issuable upon the exercise of options
under the Directors' Plan.
(6) Includes 1,145,338 shares of Common Stock owned by JRJ Associates, Inc. Mr.
Goryeb has voting and investment control of the Common Stock owned by JRJ
Associates, Inc.
(7) Includes 6,000 shares of Common Stock issuable upon the exercise of options
under the Incentive Plan.
(8) Includes 63,566 shares of Common Stock issuable upon exercise of options
under the Incentive Plan, 27,776 shares held by Mr. Legler jointly with his
spouse, and 3,000 shares held in his IRA.
9
<PAGE> 12
(9) Excludes 1,199,768 shares of Common Stock and 5,250 shares of Common Stock
issuable upon the exercise of options under the Incentive Plan owned by
Approved Financial Corp. ("Approved"). Mr. Wykle, who owns 32% of the voting
stock of Approved, has voting, but not investment, control of the Common
Stock owned by Approved. Mr. Wykle disclaims beneficial ownership of the
shares of Common Stock owned by Approved and issuable upon the exercise of
such options.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AGREEMENTS WITH CONTIFINANCIAL
Warehouse Facility. The Company and ContiFinancial are party to the
Amended and Restated Loan and Security Agreement, dated as of September 1, 1995
(together with its predecessor agreement, the "Warehouse Facility"). Pursuant to
the Warehouse Facility, the Company has a $125.0 million line of credit that is
secured by its mortgage loans and expires on August 31, 1997. Amounts
outstanding under the Warehouse Facility bear interest at a rate of LIBOR plus
1.5% per year. During 1996, the Company made interest payments under the
Warehouse Facility of approximately $6.0 million.
Standby Agreement. Amounts borrowed under the Standby Agreement bear
interest at a rate of LIBOR plus 1.7% per annum. The Standby Agreement expires
on January 12, 2000. At December 31, 1996, the Company had borrowed $15.0
million under the Standby Agreement. During 1996 the Company made interest
payments to ContiFinancial under the Standby Agreement of $1.4 million.
Conti Warrant. Effective December 31, 1995, the Company granted
ContiFinancial an option (the "Conti Option") to purchase a portion of its
equity. Prior to the Company's initial public offering in June 1996, the Conti
Option was converted into the Conti Warrant. The Conti Warrant grants
ContiFinancial certain registration rights. The Conti Warrant is exercisable for
2.16 million shares (after giving effect to ContiFinancial's sale in June 1996
of ten percent of its interest in the Conti Warrant and in April 1997 of 540,000
shares) of Common Stock for a de minimis amount, subject to adjustment if the
Company issues Common Stock below fair market value and certain anti-dilution
adjustments.
ADDITIONAL SECURITIZATION TRANSACTION EXPENSE
Through June 1996, the Company had an I/O and residual certificate sharing
arrangement with ContiFinancial in connection with the Company's
securitizations. Under the arrangement, ContiFinancial received a percentage of
the residual interest in the related REMIC trust in exchange for cash.
ContiFinancial received fifty percent of the residual interests in the Company's
1996-1 securitization and twenty-five percent of the residual interests in the
Company's 1996-2 securitization in exchange for $8.7 million.
IMC ASSOCIATES
IMC Associates, Inc. ("IMC Associates") was formed to lease a skybox suite
in the Ice Palace stadium for games of the Tampa Bay Lightning, a National
Hockey League franchise, for the benefit of all IMC employees and employees'
family members. The Company purchases tickets for the hockey games from IMC
Associates for an aggregate amount equal to the $75,000 annual lease cost of the
skybox. IMC Associates is owned by George Nicholas, the Chairman of the Board
and Chief Executive Officer of the Company.
GENERAL COUNSEL
The Company has an arrangement with Mitchell W. Legler, P.A., its general
counsel, to pay that firm $17,500 per month for Mr. Legler's services as general
counsel. The Company paid $230,000 in legal fees in 1996 to Mitchell W. Legler,
P.A. In addition, Mitchell W. Legler, P.A. is entitled to a contingent cash fee
for acting in the primary role in identifying potential acquisition candidates
and in analyzing, negotiating, and closing acquisitions of other non-conforming
lenders and strategic alliances with other non-conforming lenders. The
contingent fees are based on a percentage of the expected increase in IMC's
earnings per share resulting from an acquisition or strategic alliance based on
the first year following the closing of the acquisition
10
<PAGE> 13
and based on the first three years following the closing of a strategic
alliance. No fees were paid to Mitchell W. Legler, P.A. for these services in
1996.
TAX DISTRIBUTIONS
Under the terms of the partnership agreement governing the Partnership, the
Company was obligated to make quarterly cash distributions to the partners equal
to forty-five percent of profits (as defined in the partnership agreement) to
enable the partners to pay taxes in respect of their partnership interests ("Tax
Distributions"). Tax Distributions to partners in 1996 related to partnership
income prior to June 24, 1996, the effective date of the exchange of the
partnership interests for Common Stock of the Company, and included $790,281 to
George Nicholas, $898,703 to Mortgage America, $898,703 to JRJ Associates, Inc.,
$898,703 to Branchview, $898,703 to Approved, and $898,703 to Cityscape Corp.
TRANSACTIONS WITH INDUSTRY PARTNERS
Industry Partners' Incentive Plan. At the time the Partnership became a
subsidiary of the Company, the Industry Partners were given an opportunity to
double the monthly dollar amount of mortgage loans which they committed to sell
to the Company. To encourage those companies which were original partners in
Industry Mortgage Company, L.P. (the "Industry Partners") to continue to sell
more mortgage loans than required under their commitments, the Company created
an incentive option plan for Industry Partners (the "Industry Partners'
Incentive Plan"). Under that plan, options exercisable for five years after the
grant to acquire a total of 20,000 shares of Common Stock at $9.00 per share
were awarded to Industry Partners for the quarter ending September 30, 1996. The
20,000 options were allocated pro rata among those Industry Partners that
doubled their commitments to the extent the Industry Partners exceeded that
doubled commitment for the quarter. The plan was amended and for each quarter
beginning December 31, 1996, Industry Partners that doubled their commitments
will be eligible to receive on a pro rata basis fully paid shares of Common
Stock equal to $150,000 divided by the market price of the Common Stock at the
end of each quarter. The fully paid shares of Common Stock will be issued pro
rata among those Industry Partners that doubled their commitments to the extent
the Industry Partner exceeded its doubled commitment for the quarter. The
Industry Partners' Incentive Plan continues through the quarter ending June 30,
2000.
Lakeview. The Company entered into the Lakeview Facility in January 1996
with Lakeview, an affiliate of Branchview, Inc., one of the Industry Partners.
The Company repaid all outstanding amounts under the Lakeview Facility with a
portion of the proceeds of the Company's initial public offering in June 1996.
The Company has re-borrowed approximately $5 million at ten percent per annum
under the Lakeview Facility, effective January 1997. In 1996, IMC, through its
wholly owned subsidiary, IMC Credit Card, Inc., entered into the Credit Card
Joint Venture with Lakeview Credit. The Credit Card Joint Venture is owned fifty
percent by IMC Credit Card, Inc., and fifty percent by Lakeview Credit.
JRJ Associates. JRJ Associates Inc. sold loans in the aggregate amount of
$24.9 million to the Company during 1996 and has agreed to sell $24 million in
loans to the Company in 1997. Mr. Goryeb, a member of the Board of Directors of
IMC, is Chairman and Chief Executive Officer of Champion Mortgage Co. Inc., an
affiliate of JRJ Associates Inc.
Cityscape Corp. Cityscape Corp. contributed $420,000 to the Company in
lieu of additional loan sales in satisfaction of its aggregate loan sale
commitments for 1996 and will contribute $360,000 in satisfaction of its
commitments for 1997.
Mortgage America. Effective January 1, 1997, IMC acquired all of the
assets of Mortgage America, one of the Industry Partners. IMC purchased $45.3
million of residential mortgage loans from Mortgage America during 1996. The
purchase price for all of the assets of Mortgage America was an initial payment
of 1,790,000 shares of Common Stock and assumption of a stock option plan which
could result in issuance of an additional 334,596 shares of Common Stock and a
contingent payment of up to 2,770,000 additional shares of Common Stock at the
end of three years based on the growth and profitability of Mortgage America
during that period.
11
<PAGE> 14
Equity Mortgage. Effective January 1, 1997, IMC acquired all of the assets
of Equity Mortgage, one of the Industry Partners. IMC purchased $12.5 million of
residential mortgage loans from Equity Mortgage during 1996. The purchase price
for Equity Mortgage was a cash payment of $150,000 in excess of its net assets.
In connection with the acquisition, the Company entered into a four year
employment agreement with the former owner of Equity Mortgage, Mr. Mark
Greenberg, pursuant to which the Company is obligated to pay Mr. Greenberg one
and a half percent of the principal amount of non-conforming loans originated by
the Equity Mortgage Division of the Company during such four years, up to a
maximum amount that does not exceed the net income of the division.
Investors Mortgage. Investors Mortgage sold loans in the aggregate amount
of $12.1 million to IMC during 1996. Investors Mortgage has agreed to sell $12.0
million in loans to the Company in 1997.
Approved Financial Corp. Approved, formerly American Industrial Loan
Association, sold loans in the aggregate amount of $100.1 million to IMC during
1996 and has agreed to sell $24 million in loans to IMC in 1997. Mr. Wykle, a
member of the Board of Directors of IMC, is Chairman and Chief Executive Officer
of Approved, and a controlling shareholder. In January 1996, IMC and Approved
entered into a warehouse financing facility pursuant to which IMC committed to
lend Approved $8.0 million secured by mortgage loans. Borrowings under the
facility bear interest at a rate of LIBOR plus one and three-quarters percent
(1.75%), and Approved paid IMC $137,189 in interest payments during 1996.
PROPOSAL NO. 2
RATIFICATION OF THE IMC MORTGAGE COMPANY
1997 INCENTIVE PLAN
Purpose. The Board of Directors has adopted the IMC Mortgage Company 1997
Incentive Plan (the "Incentive Plan"). The purpose of the Incentive Plan is to
promote the interests of the Company and its stockholders by attracting and
retaining highly competent employees at all levels. The Board believes that the
Company benefits from increased participation and ownership of the Company by
employees at all levels and that an option plan available to non-executive
employees would appropriately incent the Company's employees. The Incentive Plan
provides that options to purchase a maximum of 250,000 shares of Common Stock
may be granted thereunder. Such options will expire ten years after the date of
grant.
Administration/Eligible Participants. The Incentive Plan will be
administered by the 1997 Incentive Plan Committee (the "Committee"). The
Committee will consist of the Chief Executive Officer, the Chief Operating
Officer, and the Chief Financial Officer of the Company, each of whom is an
executive officer and therefore not eligible to receive options under the
Incentive Plan. Employees of the Company or any of its wholly-owned subsidiaries
other than Executive Officers (See "Executive Officers" above) and employees who
held a material equity interest in any business acquired by the Company are
eligible to receive options under the Incentive Plan. The Committee will make
awards to those employees who, in its determination, are in a position to make a
significant contribution to the management, growth, or profitability of the
Company or any of its subsidiaries or who have demonstrated superior service to
the Company.
The Committee will have the sole power and authority, among other things,
to: (i) designate persons to be participants in the Incentive Plan
("Participants"); (ii) determine the type, amount, duration, and other terms and
conditions of grants awarded to Participants; (iii) interpret and administer the
Incentive Plan; and (iv) waive any condition or other restriction with respect
to any option granted pursuant to the Incentive Plan.
Terms and Conditions of the Options Granted Under the Incentive
Plan. Incentive stock options may be granted under the Incentive Plan, subject
to such terms, including exercise price, conditions and timing of exercise, as
may be determined by the Committee. All of the options shall be granted,
however, with an exercise of price of not less than one hundred percent of the
fair market value of the Common Stock as of the date of each grant. The
Committee is authorized to grant appreciation rights to Participants in lieu of
options.
If the employment relationship of any Participant is terminated for any
reason other than death or disability, all unvested options held by such
Participant shall be automatically canceled. It is anticipated that
12
<PAGE> 15
all awards made under the Incentive Plan will be non-qualified options, though
the Incentive Plan does allow the Committee discretion to award qualified
options.
Adjustments. In the event that the Committee determines any corporate
transaction or event affects the interest in the Company subject to options
granted pursuant to the Incentive Plan, then the Committee may take such steps
to adjust the benefits due under the Incentive Plan in such a manner as to
prevent dilution or enlargement of benefits or potential benefits intended to be
made available under the Incentive Plan.
Transferability. Each award under the Incentive Plan shall be exercisable
only by the Participant in the Incentive Plan (or the Participant's legal
representative) and is not subject to transfer except with the permission of the
Committee to family members without consideration.
Federal Income Tax Consequences of the Incentive Plan. The discussion of
Federal tax consequences set forth below is necessarily general in nature and
does not purport to be complete.
There are generally no Federal tax consequences either to the Participant
or the Company upon the grant of a qualified stock option. On exercise of an
option designated as an incentive stock option as defined in Internal Revenue
Code Section 422 (an "Incentive Option"), the Participant will not recognize any
income, and the Company will not be entitled to a deduction for tax purposes,
although such exercise may give rise to liability for the Participant under the
alternative minimum tax provisions of the Internal Revenue Code. If, however,
the Participant disposes of shares acquired upon the exercise of an Incentive
Option within two years of the date of grant or one year of the date of
exercise, the Participant will recognize compensation income, and the Company
will be entitled to a deduction for tax purposes in the same amount, equal to
the excess of the fair market value of the shares of Common Stock on the date of
exercise over the option exercise price (or the gain on sale, if less); the
remainder of the gain to the Participant will be treated as capital gain.
Otherwise, the Company will not be entitled to any deduction for tax purposes
upon disposition of such shares, and the entire gain for the Participant will be
treated as a capital gain.
On the exercise of a nonqualified stock option, the amount by which the
fair market value of the Common Stock on the date of exercise exceeds the option
exercise price will generally be taxable to the Participant as compensation
income, and will generally be deductible for tax purposes by the Company. The
disposition of shares of Common Stock acquired upon exercise of a non-qualified
stock option will generally result in a capital gain or loss for the
Participant, but will have no tax consequences for the Company.
The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or by proxy at the Annual Meeting and entitled to vote
thereon is required for the approval of the Incentive Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE APPROVAL OF THE ADOPTION OF THE INCENTIVE PLAN.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
On the recommendation of its Audit Committee, the Board of Directors has
selected Coopers & Lybrand L.L.P. (the "Accountant"), independent accountants,
to audit the financial statements of the Company for the 1997 fiscal year. Such
nomination is being presented to the stockholders for ratification at the Annual
Meeting. The affirmative vote of the holders of a majority of shares present in
person or represented by proxy and entitled to vote at the Annual Meeting is
required to ratify the Board's appointment of Coopers & Lybrand for the fiscal
year ending December 31, 1997. If the stockholders reject the nomination, the
Board of Directors may reconsider its selection. If the stockholders ratify the
appointment, the Board of Directors, in its sole discretion, may still direct
the appointment of new independent accountants at any time during the year if
the Board of Directors believe that such a change would be in the best interests
of the Company.
The Accountant has audited and certified the Company's financial statements
from the time of inception. The Company has been advised that a representative
of the Accountant will be present at the Annual
13
<PAGE> 16
Meeting, will have the opportunity to make a statement, and is expected to be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS.
PROPOSALS BY STOCKHOLDERS
Any stockholder proposal which is intended to be presented at the Company's
1998 Annual Meeting of Stockholders must be received at the Company's principal
executive offices, which as of July 4, 1997 will be located at 5901 E. Fowler
Avenue, Tampa, FL 33617-2362, Attention: Laurie Williams, Secretary, by no later
than March 1, 1998, if such proposal is to be considered for inclusion in the
Company's proxy statement and form of proxy relating to such meeting.
Stockholders of the Company who intend to bring business before the meeting must
also comply with the applicable procedures set forth in the Company's Bylaws.
The Company will furnish copies of such Bylaw provisions upon written request to
Laurie Williams at the aforementioned address.
AVAILABILITY OF FORM 10-K
THE COMPANY WILL PROVIDE TO ANY STOCKHOLDER, WITHOUT CHARGE, UPON WRITTEN
REQUEST OF SUCH STOCKHOLDER, A COPY OF THE ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. SUCH REQUESTS SHOULD BE ADDRESSED TO IMC MORTGAGE COMPANY, 3450
BUSCHWOOD PARK DRIVE, SUITE 250, TAMPA, FL 33618, ATTENTION: LAURIE WILLIAMS,
SECRETARY, OR, IF THE REQUEST IS MAILED AFTER JULY 4, 1997, TO IMC MORTGAGE
COMPANY, 5901 E. FOWLER AVENUE, TAMPA, FL 33617-2362, ATTENTION: LAURIE
WILLIAMS, SECRETARY.
SECTION 16(A) REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons owning more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership of such equity securities with the Securities
and Exchange Commission. To the Company's knowledge, based solely on the
information furnished to the Company and written representations by such
persons, all filing requirements under Section 16(a) during 1996 were complied
with, except that one transaction was inadvertently reported late by Mr.
Mitchell Legler, a director of the Company, and Mr. Joseph Goryeb, a director of
the Company, has not yet reported his purchase of stock at the time of the
Company's initial public offering.
OTHER BUSINESS
The Annual Meeting is being held for the purposes set forth in the Notice
which accompanies this Proxy Statement. The Board is not presently aware of
business to be transacted at the Annual Meeting other than as set forth in the
Notice.
By Order of the Board of Directors,
/s/ George Nicholas
George Nicholas
Chairman of the Board and Chief
Executive Officer
Tampa, Florida
June 12, 1997
14
<PAGE> 17
APPENDIX A
IMC MORTGAGE COMPANY
1997 INCENTIVE PLAN
ARTICLE I
PURPOSE
1.1 The purpose of the IMC Mortgage Company 1997 Incentive Plan ("Plan") is
to promote the interests of IMC Mortgage Company (the "Company") and its
stockholders by attracting and retaining highly competent employees at all
levels, in the belief that the Company benefits from increased participation and
ownership of the Company by employees at all levels and that an option plan
available to non-executive employees would appropriately incent the Company's
employees.
ARTICLE II
DEFINITIONS
2.1 Affiliate means (i) any corporation that is defined as a subsidiary
corporation in Section 424(f) of the Code, or (ii) any corporation that is
defined as a parent corporation in Section 424(e) of the Code.
2.2 Award means any award made under the Plan.
2.3 Award Agreement means a written agreement or other document
specifically setting forth the terms and conditions of an Award.
2.4 Code means the Internal Revenue Code of 1986, as amended from time to
time. Any reference to a particular section of the Code shall include any
subsequently enacted successor provision thereto.
2.5 Committee means a committee designated by the Board of Directors of the
Company to administer the Plan, which committee (i) shall be composed of the
Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer of
the Company, and (ii) shall be constituted and operated so as to permit grants
of Awards to Key Employees who are Insiders to qualify as exempt transactions
under Rule 16b-3 in the event that and so long as the Company shall have a class
of securities registered under Section 12 of the Exchange Act.
2.6 Exchange Act means the Securities Exchange Act of 1934, as amended.
2.7 Fair Market Value means, with respect to any property (including,
without limitation, any Shares or other securities), the fair market value of
such property determined by such methods as shall be established from time to
time by the Committee.
2.8 Incentive Stock Option means an Option designated as an incentive stock
option as defined in Code Section 422.
2.9 Insider means a Key Employee Participant who is subject to Sections
16(a) and (b) of the Exchange Act.
2.10 Key Employee means any officer or other employee of the Company or of
any Affiliate who is in a position to make a significant contribution to the
management, growth, or profitability of the business of the Company or any
Affiliate, as determined by the Committee, other than the Chief Executive
Officer, Chief Operating Officer, and Chief Financial Officer of the Company,
and other than employees of the Company or its Affiliates who held a material
equity interest in any business acquired by the Company.
2.11 Non-Qualified Stock Option means an Option that is not an Incentive
Stock Option as defined in Code Section 422.
2.12 Option means any option to purchase Shares granted pursuant to the
Plan.
2.13 Participant shall mean any Key Employee (referred to as a Key Employee
Participant) receiving an Award.
15
<PAGE> 18
2.14 Plan means the IMC Mortgage Company 1997 Incentive Plan as set forth
herein, and as the same may be amended from time to time.
2.15 Rule 16b-3 means Rule 16b-3 as promulgated by the Securities and
Exchange Commission under Section 16(b) of the Exchange Act, as such rule may be
amended from time to time, and any successor rule.
2.16 Shares mean the shares of common stock of the Company and such other
securities or property as may become subject to Awards pursuant to an adjustment
made under Section 4.3 of the Plan.
2.17 Stock Appreciation Rights mean Awards granted in accordance with
Article V.
2.18 Ten Percent Shareholder means a person owning common stock of the
Company or an Affiliate possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company as defined in
Section 422 of the Code.
ARTICLE III
ADMINISTRATION
3.1 Committee. The Plan shall be administered by the Committee. Subject to
the terms of the Plan and applicable law, the Committee shall have full power
and sole authority to: (i) designate persons to be Participants; (ii) determine
the type, amount, duration, and other terms and conditions of Awards to be
granted to each Participant (including whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards, or other property and whether, to what extent, and
under what circumstances cash, Shares, other securities, other Awards, other
property, and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of the
Committee); (iii) interpret and administer the Plan and any instrument or
agreement relating to, or any Award made under, the Plan; (iv) waive any
conditions or other restrictions with respect to any Award (including, without
limitation, conditions regarding the exercise of a Option), amend, alter,
suspend, discontinue, or terminate any Award, prospectively or retroactively,
but no such action shall impair the rights of any Participant without his or her
consent except as provided in Section 4.3, and correct any defect, supply any
omission, or reconcile any inconsistency in any Award or Award Agreement in the
manner and to the extent it shall deem desirable to carry the Plan into effect;
(v) establish, amend, suspend, or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the
Plan; and (vi) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all determinations,
interpretations, and other decisions under or with respect to the Plan or any
Award shall be within the sole discretion of the Committee, may be made at any
time, and shall be final, conclusive, and binding upon all persons. Anything in
the Plan to the contrary notwithstanding, no term of this Plan relating to
Incentive Stock Options shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be so exercised, so as to
disqualify any outstanding Incentive Stock Option under Section 422 of the Code,
without the consent of the affected Participant.
3.2 Indemnification. No member or former member of the Committee shall be
liable for any action or inaction or determination made in good faith with
respect to the Plan or any Award. To the maximum extent permitted by applicable
law and by the Company's Articles of Incorporation and Bylaws, each such person
shall be indemnified and held harmless by the Company against any cost or
expense and liability (including any sum paid in settlement of a claim with the
approval of the Company), arising out of any act or omission to act in
connection with the Plan. Costs and expenses to be indemnified hereunder shall
include reasonable attorney's fees and expenses as incurred, provided that the
person being indemnified agrees to repay in full amounts advanced hereunder in
the event of a final determination by a court that such person is not entitled
to indemnification hereunder.
16
<PAGE> 19
ARTICLE IV
SHARES
4.1 Number of Shares Available. Subject to Section 4.3, the maximum number
of Shares which may be issued under the Plan and as to which Awards may be
granted is 250,000 Shares.
4.2 Shares Subject to Terminated Awards. The (i) Shares covered by any
unexercised portions of terminated Options, and (ii) Shares subject to any
Awards which are otherwise surrendered by the Participant and as to which Shares
no Participant has received any payment or other benefit of ownership with
respect thereto, may again be subject to new Awards. In the event the exercise
price of an Option is paid in whole or in part through the delivery of Shares or
the surrender of an unexercised Option, the gross number of Shares issuable in
connection with the exercise of the Option shall not again be available for the
grant of Awards under the Plan.
4.3 Adjustments. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of securities of the Company, or other similar corporate
transaction or event affects the Shares such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee may, in such manner as it may deem equitable, adjust any or
all of (i) the number and type of Shares subject to the Plan and which
thereafter may be made the subject of Awards, including Incentive Stock Options
and Stock Appreciation Rights, (ii) the number and type of Shares subject to
outstanding Awards, and (iii) the grant, purchase, or exercise price with
respect to any Award, or, if deemed appropriate, make provisions for a cash
payment to the holder of an outstanding Award. In addition, in the event the
Company or any Affiliate shall assume outstanding awards or the right or
obligation to make future awards in connection with the acquisition of another
business or another corporation or business entity, the Committee may make such
adjustments, not inconsistent with the terms of the Plan, in the terms of Awards
granted to Participants as it shall deem appropriate in order to achieve
reasonable comparability or other equitable relationship between the assumed
awards and the Awards granted to Participants. The Committee also may make such
other adjustments as it deems necessary to take into consideration any other
event (including accounting changes) if the Committee determines that such
adjustment is appropriate to avoid distortion in the operation of the Plan. In
each case, however, no adjustment with respect to Awards of Incentive Stock
Options shall be authorized hereunder to the extent that such authority would
cause the Plan to violate Section 422(b)(1) of the Code, and in each case,
Awards shall only be subject to such adjustments as shall be necessary to
maintain the proportionate interest of the Participant and preserve, without
exceeding, the value of the Awards.
ARTICLE V
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
5.1 Grant of Option. The Committee is hereby authorized to grant Options
to Key Employees with such terms and conditions, in either case not inconsistent
with the provisions of the Plan, as the Committee shall determine.
(a) Exercise Price. The exercise price per Share purchasable under an
Option shall be determined at the time of grant and shall be not less than
100% of the Fair Market Value of the Share on the date of grant of such
Option; provided, however, if an Incentive Stock Option is granted to a Ten
Percent Shareholder, the exercise price per share shall be no less than
110% of the Fair Market Value of a Share on the date of grant.
(b) Exercisability and Method of Exercise. An Option Award may
contain such vesting and waiting periods, and shall become exercisable in
such manner and within such period or periods and in such installments or
otherwise, as shall be determined at the time of grant. The Committee shall
also
17
<PAGE> 20
determine the method by which, and the form (including, without limitation,
cash, Shares, other securities, other Awards, or other property, or any
combination thereof, having a Fair Market Value on the exercise date equal
to the relevant exercise price), in which payment of the Option exercise
price may be made (including payment in accordance with a cashless exercise
program under which, if so instructed by the Participant, Shares may be
issued directly to the Participant's broker or dealer upon receipt of the
purchase price in cash from the broker or dealer).
(c) Incentive Stock Options. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions of
Code Section 422 and any regulations promulgated thereunder.
(d) Incentive Stock Option Limitations. To the extent that the
aggregate Fair Market Value (determined as of the time of grant) of the
Shares with respect to which Incentive Stock Options are exercisable for
the first time by the Participant during any calendar year under the Plan
and/or any other stock option plan of the Company or any Affiliate exceeds
$100,000, such Options shall be treated as Options which are not Incentive
Stock Options. Should any of the foregoing provisions not be necessary in
order for the Options to qualify as Incentive Stock Options, or should any
additional provisions be required, the Board of Directors may amend the
Plan accordingly, without the necessity of obtaining the approval of the
shareholders of the Company, except as otherwise required by law.
5.2 Stock Appreciation Rights. The Committee is hereby authorized to grant
Stock Appreciation Rights to Key Employee Participants in such amounts and
having such grant price, term, methods of exercise, methods of settlement
(including whether Stock Appreciation Rights will be settled in cash, Shares,
other securities, other Awards, or other property, or any combination thereof),
and any other terms and conditions as it shall determine, including, without
limitation, restrictions on the time of exercise of Stock Appreciation Rights to
specified periods as may be necessary to satisfy the requirements of Rule 16b-3.
5.3 Compliance with Code Section 162(m). Notwithstanding any other
provision of the Plan, the maximum number of Shares with respect to which
Options and Stock Appreciation Rights, in the aggregate, may be awarded to any
individual Key Employee Participant during any twelve-month period is 25,000
Shares. For purposes of this limitation, Shares subject to Options and Stock
Appreciation Rights which are canceled shall be counted against the maximum
number of Shares with respect to which Options and Stock Appreciation Rights may
be awarded to any individual Key Employee Participant under the Plan, and if the
Exercise Price of Options or the base amount of Stock Appreciation Rights is
changed (other than pursuant to an adjustment under Section 4.3 hereof), the
transaction shall be treated as a cancellation of the Option or Stock
Appreciation Right and a grant of a new Option or Stock Appreciation Right, as
the case may be. The Committee at any time may in its sole discretion limit the
number of Options and/or Stock Appreciation Rights that can be exercised in any
taxable year of the Company, to the extent necessary to prevent the application
of Section 162(m) of the Code (or any similar or successor provision), provided
that the Committee may not postpone the earliest date on which Options or Stock
Appreciation Rights can be exercised beyond the last day of the stated term of
such Options or Stock Appreciation Rights.
ARTICLE VI
OTHER SHARE-BASED AWARDS
6.1 Grant of Other Awards. Other Awards, valued in whole or in part by
reference to, or otherwise based on, Shares, including but not limited to
restricted stock, may be granted either alone or in addition to or in
conjunction with other Awards for such consideration, if any, and in such
amounts and having such terms and conditions as the Committee may determine.
18
<PAGE> 21
ARTICLE VII
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
7.1 Award Agreement. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award. If there is any conflict between the provisions of
an Award Agreement and the terms of the Plan, the terms of the Plan shall
control.
7.2 Awards May Be Granted Separately or Together; No Limitations on Other
Awards. Awards may be granted either alone or in addition to, in tandem with,
or in substitution for any other Award or any award granted under any other plan
of the Company or any Affiliate, and the terms and conditions of an Award need
not be the same with respect to each Participant.
7.3 Acceleration. The Committee is authorized to accelerate the
exercisability of any Option or the vesting of any Award in its discretion,
including, without limitation, upon a change of control of the Company (as
determined by the Committee), the sale by the Company of all or substantially
all its assets to an unrelated party, or the liquidation and dissolution of the
Company.
7.4 Limitations on Transfer of Awards. Except as determined otherwise by
the Committee, the rights and interest of a Participant under the Plan may not
be assigned, alienated, sold, or transferred other than by will or the laws of
descent and distribution; provided, however, that a Participant may at the
discretion of the Committee be entitled to designate a beneficiary or
beneficiaries to exercise his or her rights, to receive any property
distributable, with respect to any Award upon the death of the Participant, and
to transfer an Award other than an Incentive Stock Option without consideration
to such Participant's children, grandchildren and/or spouse (or to one or more
trusts for the benefit of any such family members or to one or more partnerships
in which any such family members are the only partners). Except as determined
otherwise by the Committee or except to the extent that a transfer of an Award
has been permitted hereunder by the Committee, during the lifetime of a
Participant, only the Participant personally, or if permissible under applicable
law, such individual's guardian or legal representative, may exercise rights
under the Plan. No Award, and no right under any such Award, may be pledged,
alienated, attached, or otherwise encumbered, and any purported pledge,
alienation, attachment, or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate.
7.5 Taxes. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company in connection with such Participant's
Award, and the Company may defer payment or issuance of the cash or Shares upon
the grant, exercise or vesting of an Award unless indemnified to its
satisfaction against any liability for any such tax. The Committee may prescribe
in each Award Agreement one or more methods by which the Participant will be
permitted or required to satisfy his or her tax withholding obligation, which
methods may include, without limitation, the payment of cash by the Participant
to the Company and the withholding from the Award, at the appropriate time, of a
number of Shares sufficient, based upon the Fair Market Value of such Shares, to
satisfy such tax withholding requirements.
7.6 Rights and Status of Recipients. No Employee, Participant or other
person shall have any right to be granted an Award. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any Affiliate.
7.7 Awards Not Includable For Benefit Purposes. Income recognized by a
Participant pursuant to the Plan shall not be included in the determination of
benefits under any employee pension benefit plan (as such term is defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended)
or group insurance or other benefit plans applicable to the Participant which
are maintained by the Company or any Affiliate, except as may be provided under
the terms of such plans or determined by resolution of the Board of Directors of
the Company.
19
<PAGE> 22
7.8 Share Certificates; Representation By Participants; Registration
Requirements. All certificates for Shares delivered pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the Securities Exchange Commission and
any applicable federal or state securities laws, and legends may be put on any
such certificates to make appropriate reference to such restrictions. The
Committee may require each Participant to represent to the Company in writing
that such Participant is acquiring Shares without a view to the distribution
thereof. Each Award shall be subject to the requirement that, if at any time (i)
the registration or qualification of Shares relating to such Award on any
securities exchange or under any state or federal securities laws, or (ii) the
approval of any securities exchange or regulatory body is necessary or desirable
as a precondition thereto, the Award or the issuance of Shares in connection
therewith may not be consummated unless such listing, registration,
qualification or approval shall have been effected.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 Amendment. The Board of Directors of the Company may amend, alter,
suspend, discontinue, or terminate the Plan at any time; provided, however, that
(i) no amendment, alteration, suspension, discontinuation or termination of the
Plan shall in any manner (except as otherwise provided in this Article VIII)
adversely affect any Award, without the consent of the Participant, and (ii) no
amendment shall be made without shareholder approval if such approval would be
required to comply with Rule 16b-3. It is intended that the Plan be administered
in compliance with Rule 16b-3 and Section 162(m) of the Code so long as the
Company shall have a class of equity securities registered under Section 12 of
the Exchange Act. If any provision of the Plan would be in violation of Rule
16b-3 or Section 162(m) of the Code if applied as written, such provision shall
not have effect as written and shall be given effect so as to comply therewith.
The Board of Directors of the Company is authorized to amend the Plan and to
make any modifications to Award Agreements to comply with Rule 16b-3 and Section
162(m) of the Code, and to make any other amendments or modifications deemed
necessary or appropriate to better accomplish the purposes of the Plan in light
of any amendments made to Rule 16b-3 and Section 162(m) of the Code. Without
limiting the foregoing, the Board of Directors of the Company may amend the
qualifications of the Committee if amendments to Rule 16b-3 would permit it to
do so and may otherwise amend the Plan or any Award Agreement to take advantage
of any simplifications or liberalizing provisions added by amendment to Rule
16b-3.
8.2 Termination. The Plan shall terminate at the close of business on the
tenth anniversary of the effective date, provided, however, the Board of
Directors of the Company shall have the right and the power to terminate the
Plan at any time prior thereto. No Award shall be granted under the Plan after
such termination, but such termination shall not have any other effect, and any
Award outstanding at the time of such termination may be exercised after
termination at any time prior to the expiration date of such Award to the same
extent such Award would have been exercisable had the Plan not terminated.
ARTICLE IX
GENERAL PROVISIONS
9.1 Effective Date of the Plan. The Plan shall be effective as of the date
of its adoption by the Board of Directors of the Company, subject to approval of
the Plan by the Company's shareholders within one year thereafter by a majority
of the votes cast at a duly held meeting of the shareholders of the Company at
which a quorum representing a majority of all outstanding stock is present,
either in person or by proxy, and in a manner that satisfies the requirements of
Rule 16b-3. In the event that the Plan is not so approved within such one year
period, all Awards granted under the Plan shall be null and void.
9.2 Unfunded Status of Plan. The Plan shall be unfunded and shall not
create (or be construed to create) a trust or a separate fund or funds. The Plan
shall not establish any fiduciary relationship between the
20
<PAGE> 23
Company and any Participant or other person. To the extent any person holds any
right by virtue of a grant under the Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company.
9.3 Miscellaneous. The Plan and all determinations made and actions taken
pursuant to the Plan shall be governed by the laws of the State of Florida and
applicable federal laws. Section headings are used in the Plan for convenience
only, do not constitute a part of the Plan, and shall not be deemed in any way
to be relevant to the interpretation of the Plan or any provision thereof.
Whenever possible, each provision in the Plan and every Award shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Plan or any Award shall be held to be prohibited by
or invalid under applicable law, then (i) such provision shall be deemed amended
to accomplish the objectives of the provision as originally written to the
fullest extent permitted by law, and (ii) all other provisions of the Plan and
every other Award shall remain in full force and effect.
ADOPTED BY RESOLUTION OF THE BOARD OF DIRECTORS.
21
<PAGE> 24
APPENDIX B
IMC MORTGAGE COMPANY
3450 BUSCHWOOD PARK DRIVE, SUITE 250
TAMPA, FLORIDA 33607
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JULY 9, 1997
The undersigned hereby appoints George Nicholas and Thomas G. Middleton, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them or their substitutes to represent and to vote, as
designated below, all the shares of stock of IMC Mortgage Company held of record
by the undersigned on May 30, 1997, at the annual meeting of shareholders to be
held on July 9, 1997 or any adjournment thereof.
<TABLE>
<S> <C> <C> <C> <C>
1. ELECTION OF DIRECTOR.
[ ] FOR Mitchell W. Legler [ ] WITHHOLD AUTHORITY to vote for Mr. Legler
</TABLE>
2. PROPOSAL TO APPROVE THE ADOPTION OF THE IMC MORTGAGE COMPANY 1997
INCENTIVE PLAN BY THE BOARD OF DIRECTORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS
INDEPENDENT ACCOUNTANTS FOR THE COMPANY FOR THE 1997 FISCAL YEAR.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY MUST BE DATED AND SIGNED ON THE REVERSE SIDE
(continued and to be signed on reverse side)
(continued from other side)
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN, THEY WILL BE VOTED FOR THE ELECTION OF MR. LEGLER AS
DIRECTOR AND FOR PROPOSALS IN ITEMS 2, 3 AND 4.
Please sign exactly as name
appears below. When shares are
held by joint tenants, both
should sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by president or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
Dated: , 1997
--------------------
--------------------------------
Signature
--------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
