<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
U.S. HOME CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
U.S. HOME CORPORATION
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11:
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
/ / 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
U.S. HOME CORPORATION
1800 WEST LOOP SOUTH
P. O. BOX 2863
HOUSTON, TEXAS 77252-2863
[U.S. HOME LOGO]
NOTICE OF 1994 ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
March 3, 1994
Dear Stockholders:
On behalf of the officers and directors of the Company, you are cordially
invited to attend the U.S. Home Corporation Annual Meeting of Stockholders to be
held at 10:00 a.m., local time, on April 6, 1994 at the Omni Hotel, Four
Riverway, Houston, Texas.
At the meeting, Stockholders will be asked to consider and act upon the
election of directors and ratification of auditors. Stockholders are also being
requested to consider and approve the Non-Employee Directors' Stock Option Plan,
the Employee Stock Payment Plan and an amendment to the Second Restated
Certificate of Incorporation to eliminate a prohibition against issuance of
non-voting equity securities. These matters are described in the formal Notice
of Meeting and in the accompanying Proxy Statement.
The Board of Directors of the Company unanimously recommends that all
Stockholders vote in favor of each Proposal. Your vote is important regardless
of the number of shares you may own. We strongly encourage all Stockholders to
participate by voting their shares by Proxy whether or not they plan to attend
the meeting. Please sign, date and mail the enclosed Proxy as soon as possible.
If you do attend the meeting, you may still vote in person.
Sincerely,
Robert J. Strudler
Chairman and Chief
Executive Officer
<PAGE> 3
[U.S. HOME LOGO]
------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 6, 1994
------------------------------------
The Annual Meeting of the Stockholders of U.S. Home Corporation (the
"Company") will be held on Wednesday, April 6, 1994, at 10:00 a.m., local time,
at the Omni Hotel, Four Riverway, Houston, Texas for the purpose of considering
and acting upon the following proposals as set forth in the accompanying Proxy
Statement:
1. Election of Class I Directors.
2. Approval of the Company's Non-Employee Directors' Stock Option Plan.
3. Approval of the Company's Employee Stock Payment Plan.
4. Approval of an amendment to the Company's Second Restated Certificate
of Incorporation to eliminate a prohibition against issuance of
non-voting equity securities.
5. Ratification of the appointment of Arthur Andersen & Co. as auditors
of the Company for the fiscal year ending December 31, 1994.
6. Transaction of such other business as may properly come before the
meeting or any adjournment thereof.
Only Stockholders of record at the close of business on February 10, 1994
are entitled to notice of and to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors
RICHARD G. SLAUGHTER
Secretary
March 3, 1994
<PAGE> 4
U.S. HOME CORPORATION
1800 WEST LOOP SOUTH
P. O. BOX 2863
HOUSTON, TEXAS 77252
------------------------------------
PROXY STATEMENT
------------------------------------
Accompanying this Proxy Statement is a Notice of Annual Meeting of
Stockholders of U.S. Home Corporation (the "Company") and a form of Proxy (the
"Proxy") for such meeting solicited by the Board of Directors of the Company
(the "Board"). The Board has fixed the close of business on February 10, 1994 as
the record date (the "Record Date") for the determination of stockholders
("Stockholders") who are entitled to notice of and to vote at the meeting or any
adjournment(s) thereof (the "Meeting"). The holders of a majority of the
aggregate outstanding shares of (i) common stock, $.01 par value per share, of
the Company (the "Common Stock") and (ii) convertible redeemable preferred
stock, $.10 par value per share, of the Company (the "Convertible Preferred
Stock") (hereinafter, the Common Stock and the Convertible Preferred Stock shall
be referred to collectively as the "Stock") present in person or represented by
Proxy and entitled to vote shall constitute a quorum at the Meeting.
As of the Record Date, there were outstanding 9,627,955 shares of Common
Stock and 1,716,110 shares of Convertible Preferred Stock, or an aggregate of
11,344,065 shares of Stock, the holders of which are entitled to one vote per
share.
A Proxy that is properly submitted to the Company may be revoked at any
time, before it is exercised, by written notice to the Secretary of the Company.
Any Stockholder attending the Meeting may vote in person and by doing so revokes
any Proxy previously submitted by him or her. Pursuant to Proposal 1, unless
authority to vote for all nominees for Class I Director or any individual
nominee is withheld, all the shares of Stock represented by the Proxy will be
voted for the election as Class I Director of the nominees set forth in this
Proxy Statement. Where a Stockholder has specified a choice on his or her Proxy
with respect to other proposals or matters, that direction will be followed. If
no direction is given, all of the shares of Stock represented by the Proxy will
be voted in favor of such proposal or matter. However, shares of Stock
represented by Proxies marked as abstentions on any matter will not be voted on
that matter, although they will be counted for quorum purposes; shares held by
brokers in "street name" and not voted by them will not be counted in tabulating
votes.
The cost of soliciting Proxies will be paid by the Company, which will
reimburse brokerage firms, custodians, nominees and fiduciaries for their
expenses in forwarding proxy materials to the beneficial owners of Stock.
Officers and regular employees of the Company may solicit Proxies personally and
by telephone. In addition, the Company has retained D.F. King & Co., Inc., to
aid in the solicitation from brokers, bank nominees and institutional holders
for a fee of $6,500 plus out-of-pocket expenses.
The Annual Report of the Company for the year ended December 31, 1993,
containing audited financial statements for such year, is enclosed with this
Proxy Statement.
This Proxy Statement and the enclosed Proxy are being sent to Stockholders
on or about March 3, 1994.
IN ORDER THAT YOUR SHARES OF STOCK MAY BE REPRESENTED AT THIS MEETING, YOU
ARE REQUESTED TO:
PLEASE SIGN, DATE AND MAIL THE PROXY PROMPTLY.
<PAGE> 5
ELECTION OF CLASS I DIRECTORS
(PROPOSAL 1)
The Company's Second Restated Certificate of Incorporation (the
"Certificate of Incorporation"), which became effective on June 21, 1993, when
it emerged from Chapter 11 of the United States Bankruptcy Code, provides that
six individuals (the "New Directors") selected by the Official Committee of
Unsecured Creditors in the Company's Chapter 11 bankruptcy case would be added
to the Board, three directors would resign from the Board (such persons resigned
on June 10, 1993), and five directors who were members of the Board during the
pendency of the Company's Chapter 11 case would remain on the Board ("Continuing
Directors"), resulting in a Board consisting of 11 directors. The Certificate of
Incorporation also provides that the directors will be divided, with respect to
the time for which they hold office, into three classes: Class I, Class II and
Class III. Class I consists of the three members named below who, if elected at
the Meeting, will serve until the annual meeting of Stockholders in 1996 and
until their successors are elected and qualified. Class II consists of the four
members named below who will serve until the annual meeting of Stockholders in
1995 and until their successors are elected and qualified. Class III consists of
the four members named below who will serve until the annual meeting of
Stockholders in 1996 and until their successors are elected and qualified.
Until the annual meeting of Stockholders to elect directors to be held in
1996, nominations for election to the Board due to expiring terms of Continuing
Directors and New Directors will be made by a majority of the remaining
Continuing Directors or New Directors, respectively. Effective with the annual
meeting of Stockholders to be held in 1996, classification of directors will
terminate and all directors will serve for one-year terms, and nominations for
election of all directors will be made by the affirmative vote of a majority of
the entire Board. Subject to the Certificate of Incorporation and the Company's
Amended and Restated By-Laws (the "By-Laws"), the Nominating Committee of the
Board will consider candidates for director recommended by Stockholders, if such
recommendations are submitted in writing to the Secretary of the Company giving
the background and qualifications of the candidates.
At the Meeting the following persons constituting Class I of the Board
("Class I Directors") have been nominated for reelection to serve until the
annual meeting of Stockholders in 1996, and until their successors are elected
and qualified:
George A. Poole, Jr.
Herve Ripault
James W. Sight
Unless authority to vote on the election of all nominees for Class I
Director or any individual nominee is specifically withheld by appropriate
designation on the Proxy, it is the intention of the persons named in the
accompanying Proxy to vote such Proxy for the election as Class I Directors of
the persons named above.
All nominees have consented to serve, if so elected. The Company does not
anticipate that any of the nominees for Class I Director will be unable to
serve, but if such a situation should arise, it is the intention of the persons
named in the accompanying Proxy to vote for the election of such other person or
persons as the respective New Directors or Continuing Directors, as noted above,
may nominate. The election of directors requires the affirmative vote of the
holders of a plurality of the shares of Stock voting at the Meeting.
2
<PAGE> 6
NOMINEES FOR DIRECTOR
CLASS I -- TERM EXPIRING AT 1996 ANNUAL MEETING
<TABLE>
<CAPTION>
SERVED AS BOARD
NAME, AGE, PRINCIPAL OCCUPATION, DIRECTOR COMMITTEE
OTHER DIRECTORSHIPS(1) SINCE MEMBERSHIP
- - -------------------------------------------------------------- --------- -----------------------
<S> <C> <C>
George A. Poole, Jr. (62 yrs.) Private investor for more than Audit and
the last five years(2)...................................... 1993 Nominating
Herve Ripault (53 yrs.) Associate of Optigestiom S.A., a Finance and
French fund management company since November 1991(3)....... 1982 Nominating
Compensation and
James W. Sight (38 yrs.) Private investor for more than the Stock Option,
last five years(4).......................................... 1993 Conflict of Interest
and Nominating
</TABLE>
INFORMATION ON OTHER DIRECTORS
CLASS II -- TERM EXPIRING AT 1995 ANNUAL MEETING
<TABLE>
<CAPTION>
SERVED AS BOARD
NAME, AGE, PRINCIPAL OCCUPATION, DIRECTOR COMMITTEE
OTHER DIRECTORSHIPS(1) SINCE MEMBERSHIP
- - -------------------------------------------------------------- --------- -----------------------
<S> <C> <C>
Glen Adams (55 yrs.) Chairman, President and Chief Executive Conflict of Interest
Officer of Southmark Corporation since August 1990(5)....... 1993 and Nominating
Steven L. Gerard (48 yrs.) Chairman and Chief Executive Finance and
Officer of Triangle Wire & Cable Inc. since September Compensation and
1992(6)..................................................... 1993 Stock Option
Audit,
Kenneth J. Hanau, Jr. (67 yrs.) Chairman of K & H Corrugated Compensation and
Case Corporation(7)......................................... 1976 Stock Option and
Executive
Charles A. McKee (75 yrs.) Former Chairman and Chief Executive Audit and
Officer of Electrolux Corporation(8)........................ 1978 Compensation and
Stock Option
</TABLE>
CLASS III -- TERM EXPIRING AT 1996 ANNUAL MEETING
<TABLE>
<CAPTION>
SERVED AS BOARD
NAME, AGE, PRINCIPAL OCCUPATION, DIRECTOR COMMITTEE
OTHER DIRECTORSHIPS(1) SINCE MEMBERSHIP
- - -------------------------------------------------------------- --------- -----------------------
<S> <C> <C>
Isaac Heimbinder (50 yrs.) President and Chief Operating Conflict of Interest,
Officer of the Company(9).................................. 1984 Executive and Finance
Malcolm T. Hopkins (65 yrs.) Private investor and a director of Audit and
several companies for more than the last five years(10).... 1993 Executive
Jack L. McDonald (60 yrs.) Private investor and consultant for Conflict of Interest
more than the last five years(11)........................... 1993 and Finance
Robert J. Strudler (51 yrs.) Chairman and Chief Executive
Officer of the Company(12).................................. 1984 Executive
</TABLE>
- - ---------------
(1) Unless otherwise indicated, directors have held the position with the
Company or have been engaged in the principal occupation indicated for at
least five years.
3
<PAGE> 7
(2) Mr. Poole has been a private investor for more than the past five years.
Mr. Poole serves as a director of Spreckels, Inc. and Darling
International, Inc.
(3) Mr. Ripault has been an Associate of Optigestiom S.A., a French fund
management company since November 1991. Mr. Ripault retired in October 1991
as Chairman of the Board of Delahaye -- Ripault, S.A., Agent de Change, a
member of the Paris Stock Exchange, Paris, France. Mr. Ripault had been
associated with such firm from June 1985 until his retirement. Mr. Ripault
was associated with Societe des Maisons Phenix, a homebuilding company in
France, from 1979 to 1985, during which time he was Executive Vice
President -- Finance.
(4) Mr. Sight has been a private investor for more than the past five years. He
has also served as Vice President and director of Sight Leasing Co. Inc., a
car leasing company, from 1978 until its dissolution in December 1992.
Since December 1992, Mr. Sight has been Co-Chairman and a director of Metro
Airlines, Inc., a former regional feeder airline which is in the process of
liquidation.
(5) Mr. Adams has been Chairman, President and Chief Executive Officer of
Southmark Corporation since August 1990. Southmark, a real estate and
financial services company, is engaged in the liquidation of its assets
pursuant to a Chapter 11 plan of reorganization which became effective in
August 1990. Prior to joining Southmark, Mr. Adams served as Chairman,
President and Chief Executive Officer of The Great Western Sugar Company, a
sugar manufacturer, from 1986 to 1989 during its bankruptcy case. He
previously served from 1983 to 1986 as Vice President and General Counsel
of Hunt International Resources Corp., a holding company for Great Western
and other entities. Mr. Adams serves as a director of Southmark San Juan,
Inc., Thousand Trails, Inc. and Zale Corporation.
(6) Mr. Gerard has been Chairman and Chief Executive Officer of Triangle Wire &
Cable Inc., a manufacturer of insulated wire and cable, since September
1992. Mr. Gerard was previously Chief Executive Officer and Director of
Mountleigh Group, PLC, a London-based company engaged in property
management and retailing, from April 1992 to July 1992. Mr. Gerard was
hired in connection with the restructuring of Mountleigh. In connection
with the restructuring, Mountleigh was placed in U.K. receivership on May
23, 1992. From July 1990 until April 1992, Mr. Gerard was a Senior Managing
Director of Citibank, N.A. responsible for credit, portfolio and risk
management for Citibank's corporate and investment banking activities in
the United States, Japan, Europe and Australia; from August 1987 to July
1990, he was Division Executive for the National Corporate Finance Division
of Citibank and prior thereto, he was the Senior Corporate Workout Officer
of the Institutional Recovery Management Division of Citibank. Mr. Gerard
is also a director of Banner Aerospace, Inc. and KEMET Corporation.
(7) Mr. Hanau is Chairman of K&H Corrugated Case Corporation, manufacturer of
corrugated packaging materials, Walden, New York, and has been associated
with such company for more than five years. Mr. Hanau is also a director of
Cosco Industries and Tinque, Brown, Inc.
(8) Mr. McKee retired as Chairman and Chief Executive Officer of Electrolux
Corporation, manufacturer of vacuum cleaners and floor care products,
Stamford, Connecticut on June 30, 1983 and as Executive Vice President and
Director of Sara Lee Corporation (formerly Consolidated Foods Corporation)
on October 31, 1983 after having served in such capacities for more than
five years. Mr. McKee is a director of Magneyic Analysis Corp.
(9) Mr. Heimbinder has served as President and Chief Operating Officer of the
Company since May 12, 1986; prior thereto he had been Senior Vice President
and Chief Financial Officer of the Company since December 14, 1979 and
Secretary from August 23, 1984 until June 26, 1986, and from October 13,
1976 until January 26, 1984.
4
<PAGE> 8
(10) Mr. Hopkins has been a private investor and a director of several companies
for more than the past five years. He served as Vice Chairman and Chief
Financial Officer of the former St. Regis Corporation, a paper and forest
products company with interests in oil and gas and insurance, from 1980 to
1984. Mr. Hopkins is a director of The Columbia Gas System, Inc., MAPCO,
Inc., KinderCare Learning Centers, Inc., The Metropolitan Series Fund, Inc.
and MetLife Portfolios, Inc.; he is also a trustee of The Biltmore Funds.
(11) Mr. McDonald has been a private investor and consultant for more than the
past five years. He served as President and Chief Operating Officer of
Centex Corporation, which is a homebuilding, general construction and
cement-making company from 1978 to 1984, and as a director of that company
from 1974 until 1985. He is also a director of Amre, Inc., Bally's Grand
Inc. and Triangle Pacific, Inc.
(12) Mr. Strudler has served as Chairman and Chief Executive Officer of the
Company since May 12, 1986; prior thereto he had been President and Chief
Operating Officer of the Company since August 23, 1984, Senior Vice
President, Asset Management, and Secretary of the Company from January 26,
1984 to August 23, 1984 and Senior Vice President of the Company since
December 15, 1978. Mr. Strudler also served as a director of the Company
from January 27, 1983 until March 22, 1984.
5
<PAGE> 9
COMMITTEES OF THE BOARD OF DIRECTORS
The committees of the Board include the following:
The Audit Committee reviews and approves the scope of the annual audit
undertaken by the Company's independent public accountants and meets with them
on a regular basis to review the progress and results of their work as well as
any recommendations they may make. The Audit Committee also reviews the fees of
the independent public accountants, and reviews and approves the annual
financial statements of the Company prior to issuance of such statements. In
addition, the Audit Committee reviews and approves any significant non-audit
services undertaken by the Company's independent public accountants. In
connection with the internal accounting controls of the Company, the Audit
Committee reviews internal audit procedures and reporting systems, as well as
reports of the Audit Department of the Company and the management action taken
in response to such reports.
The Compensation and Stock Option Committee (the "Compensation Committee")
reviews the salaries and all compensation plans for corporate officers,
presidents of operations and division chairmen and presidents, and makes
specific recommendations to the Board for such salaries and plans. The
Compensation Committee also has the authority to administer the Company's 1993
Employees' Stock Option Plan, including the grant of options and approval of
loans to finance the purchase of shares, and, if approved by the Stockholders at
the Meeting, the Employee Stock Payment Plan, including the determination of the
amount, allocation and vesting of shares (See Proposal 3).
The Conflict of Interest Committee makes determinations concerning
potential conflicts of interest involving the Company and its subsidiaries and
any directors, corporate officers, beneficial owners of more than 10% of the
Company's outstanding shares of Stock, presidents of operations, division
chairmen and presidents and members of conflict of interest committees reporting
to presidents of operations.
The Executive Committee is empowered to exercise all powers of the full
Board to the extent permitted by, and subject to the limitations imposed by, the
Delaware General Corporation Law and the Certificate of Incorporation and
By-Laws. The Executive Committee exercises the powers of the full Board in the
management of the business and affairs of the Company during the intervals
between regular and special meetings of the Board.
The Finance Committee reviews and approves capital funding (debt or equity)
plans for the Company and major land policies in coordination with established
corporate strategic objectives, and reviews and recommends corporate strategic
objectives for the Company.
The Nominating Committee advises on compensation of directors and makes,
subject to the Certificate of Incorporation and By-Laws, recommendations to the
Board for the election of directors, the succession in the office of chief
executive officer and the election of corporate officers. The Nominating
Committee will also administer the Non-Employee Directors' Stock Option Plan.
See Proposal 2. Subject to the Certificate of Incorporation and By-Laws, the
Nominating Committee will consider candidates for director recommended by
Stockholders, if such recommendations are submitted in writing to the Secretary
of the Company giving the background and qualifications of the candidates.
Members of the committees of the Board are as follows: Audit
Committee -- Messrs. Hanau, Hopkins (Chair), McKee and Poole; Compensation and
Stock Option Committee -- Messrs. Gerard, Hanau, McKee (Chair) and Sight;
Conflict of Interest Committee -- Messrs. Adams, Heimbinder, McDonald (Chair)
and Sight; Executive Committee -- Messrs. Hanau (Chair), Heimbinder, Hopkins and
Strudler; Finance Committee -- Messrs. Gerard (Chair), Heimbinder, McDonald and
Ripault; Nominating Committee -- Messrs. Adams (Chair), Poole, Ripault and
Sight.
During 1993, there were a total of 8 meetings of the Board, 2 meetings of
the Audit Committee, 3 meetings of the Compensation Committee, 3 meetings of the
Finance Committee, 1 meeting of the Nominating Committee and 1 meeting of the
Executive Committee. No meetings of the Conflict of Interest Committee were held
during 1993. The Company's normal practice is that committee meetings are held
the day preceding the regular meetings of the Board. All of the directors, for
the time they were directors during
6
<PAGE> 10
1993, attended at least 75 percent of the Board meetings and meetings of
committees of which they were members that were held during 1993.
EXECUTIVE COMPENSATION
The following table sets forth a summary of annual and long-term
compensation (for 1993, 1992 and 1991) awarded to, earned by, or paid to the
Chief Executive Officer of the Company and each of the four most highly
compensated executive officers of the Company (other than the Chief Executive
Officer) whose total annual salary and bonus for the year ended December 31,
1993, was in excess of $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION -----------------------------------
AWARDS PAYOUTS
-------------------------------------------------------- ------
(G)
(E) (F) SECURITIES (H) (I)
(A) (C) (D) OTHER ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND (B) SALARY BONUS COMPENSATION STOCK OPTIONS/SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($)(1) ($)(2) ($) AWARDS ($) (#)(3) ($) ($)(4)(5)(6)
- - --------------------------- ---- -------- -------- ------------- ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert J. Strudler; 1993 $368,225 $568,225 $-- $-- 45,000 $-- $845,048(7)
Chairman and Chief 1992 368,225 135,135 -- -- -- -- 4,943
Executive Officer 1991 357,500 -- -- -- -- -- N/A
Isaac Heimbinder; 1993 $360,000 $560,000 $-- $-- 45,000 $-- $845,048(8)
President and Chief 1992 339,900 135,135 -- -- -- -- 4,943
Operating Officer 1991 330,000 -- -- -- -- -- N/A
Chester P. Sadowski; 1993 $145,000 $ 75,000 $-- $-- 10,000 $-- $213,900(9)
Vice President -- 1992 139,050 60,000 -- -- -- -- 3,312
Controller and Chief 1991 135,000 25,000 -- -- -- -- N/A
Accounting Officer
Richard G. Slaughter; 1993 $145,000 $ 75,000 $-- $-- 10,000 $-- $214,028(10)
Vice President -- 1992 139,050 60,000 -- -- -- -- 3,440
Planning and Secretary 1991 135,000 25,000 -- -- -- -- N/A
Craig M. Johnson; 1993 $135,000 $ 75,000 $-- $-- 10,000 $-- $318,545(11)
Vice President -- 1992 122,777 62,500 -- -- -- -- 2,863
Community Development 1991 115,000 30,000 -- -- -- -- N/A
</TABLE>
- - ---------------
(1) Amounts shown include the dollar value of base salary (cash and non-cash)
earned by the executive officers named above.
(2) Amounts shown include the dollar value of bonuses (cash and non-cash)
earned by the executive officers named above. Pursuant to the 1993
Corporate Officers' Incentive Compensation Program, the Board, on the
recommendation of the Compensation Committee, approved, on December 10,
1993, payment of incentive compensation to Messrs. Sadowski, Slaughter, and
Johnson for services rendered in 1993. Payment of contractual incentive
compensation to Messrs. Strudler and Heimbinder was made pursuant to the
terms and conditions of their respective Employment and Consulting
Agreements (described below). In addition, the Board, on the recommendation
of the Compensation Committee, approved on December 10, 1993 payment of
supplemental incentive compensation of $200,000 to each of Messrs. Strudler
and Heimbinder for their extraordinary performances during 1993 and their
contribution to the Company's results during 1993 in several significant
areas. See "Report of Compensation and Stock Option Committee on Executive
Compensation." The amounts of such contractual and supplemental incentive
bonuses are included in Column (d) above. See "Executive
Compensation -- Employment Contracts and Termination of Employment and
Change of Control Arrangements -- Employment Agreements of Robert J.
Strudler and Isaac Heimbinder."
(3) As of June 21, 1993, in accordance with the Company's plan of
reorganization and pursuant to the Company's 1993 Employees' Stock Option
Plan and in satisfaction of the interests of the holders of options under
the Company's 1981 Employees' Stock Option Plan and 1989 Employees' Stock
Option Plan, options were granted to acquire shares of Common Stock to
certain officers of the Company. On
7
<PAGE> 11
December 9, 1993, pursuant to the Company's 1993 Employees' Stock Option
Plan, additional options were granted to acquire shares of Common Stock to
certain officers and other employees of the Company. See "Executive
Compensation -- Stock Options."
(4) Information for years ended prior to December 15, 1992 has been omitted in
accordance with the Securities and Exchange Commission's transition rules
for the Summary Compensation Table.
(5) On June 21, 1993, in accordance with the Company's plan of reorganization
and pursuant to the Company's Amortizing Incentive Plan, the Company issued
140,000 shares of Common Stock to certain corporate officers and other
employees, including 40,000 shares to Mr. Strudler; 40,000 shares to Mr.
Heimbinder; 10,000 shares to Mr. Sadowski; 10,000 shares to Mr. Slaughter
and 15,000 shares to Mr. Johnson. The market value of the Common Stock at
the time of issuance was $21.00 per share.
(6) The Company has a qualified profit sharing plan for the benefit of its
employees. The amounts shown above for 1992 include the contributions made
by the Company during the year ended December 31, 1992, as well as the
premium for a universal life insurance policy (with a cash surrender
value). Mr. Strudler and Mr. Heimbinder are also entitled to retirement
benefits under their respective Employment and Consulting Agreements on the
terms and conditions specified therein. See "Executive
Compensation -- Employment Contracts and Termination of Employment and
Change of Control Arrangements -- Employment Agreements of Robert J.
Strudler and Isaac Heimbinder."
(7) Amount shown is comprised of the following: (i) market value of the Common
Stock issued pursuant to the Company's Amortizing Incentive Plan
($840,000); (ii) contributions to the Company's profit sharing Plan
($3,538) and (iii) premium for universal life insurance policy with a cash
surrender value ($1,510).
(8) Amount shown is comprised of the following: (i) market value of the Common
Stock issued pursuant to the Company's Amortizing Incentive Plan
($840,000);(ii) contributions to the Company's profit sharing plan ($3,538)
and (iii) premium for universal life insurance policy with a cash surrender
value ($1,510).
(9) Amount shown is comprised of the following: (i) market value of the Common
Stock issued pursuant to the Company's Amortizing Incentive Plan
($210,000); (ii) contributions to the Company's profit sharing plan
($2,172); (iii) 401(k) contributions by the Company ($500) and (iv) premium
for universal life insurance policy with a cash surrender value ($1,228).
(10) Amount shown is comprised of the following: (i) market value of the Common
Stock issued pursuant to the Company's Amortizing Incentive Plan
($210,000); (ii) contributions to the Company's profit sharing plan
($2,172); (iii) 401(k) contributions by the Company ($500) and (iv) premium
for universal life insurance policy with a cash surrender value ($1,356).
(11) Amount shown is comprised of the following: (i) market value of the Common
Stock issued pursuant to the Company's Amortizing Incentive Plan
($315,000); (ii) contributions to the Company's profit sharing plan
($2,020); (iii) 401(k) contributions by the Company ($500) and (iv) premium
for universal life insurance policy with a cash surrender value ($1,025).
8
<PAGE> 12
STOCK OPTIONS
The following table contains information concerning grants of options to
acquire shares of Stock made during the year ended December 31, 1993 to the
Chief Executive Officer of the Company and each of the four most highly
compensated executive officers of the Company (other than the Chief Executive
Officer) whose total annual salary and bonus for the year ended December 31,
1993, was in excess of $100,000:
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------- POTENTIAL REALIZABLE
(C) VALUE AT ASSUMED
(B) ---------- ANNUAL RATES OF STOCK
------------ % OF TOTAL PRICE APPRECIATION
NUMBER OF OPTIONS/ (D) FOR OPTION TERM
SECURITIES SARS -------- ---------------------
UNDERLYING GRANTED TO EXERCISE (E)
(A) OPTIONS/ EMPLOYEES OR BASE ---------- (F) (G)
- - ----------------------------- SARS GRANTED IN FISCAL PRICE EXPIRATION -------- ---------
NAME (#) (1) YEAR ($/SH) DATE 5% ($) 10% ($)
- - ----------------------------- ------------ ---------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Strudler........... 35,000(2) 13.16% $23.29 6/21/03 $481,000 $1,201,000
10,000(3) 3.76% 26.50 12/9/03 167,000 422,000
Isaac Heimbinder............. 35,000(2) 13.16% $23.29 6/21/03 $481,000 $1,201,000
10,000(3) 3.76% 26.50 12/9/03 167,000 422,000
Chester P. Sadowski.......... 8,000(2) 3.01% $23.29 6/21/03 $110,000 $ 274,000
2,000(3) 0.75% 26.50 12/9/03 33,000 84,000
Richard G. Slaughter......... 8,000(2) 3.01% $23.29 6/21/03 $110,000 $ 274,000
2,000(3) 0.75% 26.50 12/9/03 33,000 84,000
Craig M. Johnson............. 8,000(2) 3.01% $23.29 6/21/03 $110,000 $ 274,000
2,000(3) 0.75% 26.50 12/9/03 33,000 84,000
</TABLE>
- - ---------------
(1) The Board and Stockholders adopted the Company's 1993 Employees' Stock
Option Plan, which became effective on the June 21, 1993, in connection with
the Company's plan of reorganization. The purpose of the Company's 1993
Employees' Stock Option Plan is to provide an incentive to key employees,
including officers and managerial or supervisory employees who are salaried
employees of the Company and its subsidiaries or divisions, to remain in the
employ of the Company and its subsidiaries and divisions and to have a
proprietary interest in the Company. 500,000 shares of Common Stock have
been reserved for issuance in accordance with the provisions of the
Company's 1993 Employees' Stock Option Plan.
Options granted under the Company's 1993 Employees' Stock Option Plan are
intended to be designated as (i) "Incentive Stock Options" as defined in
Section 422 of the Internal Revenue Code of 1986, as amended, (the "Tax
Code"), (ii) nonqualified stock options or (iii) any combination of
Incentive Stock Options and nonqualified stock options. In the event that a
portion of an option cannot be exercised as an Incentive Stock Option by
reason of the limitations contained in Section 422 of the Tax Code, such
portion will be treated as a nonqualified stock option.
For Incentive Stock Options and/or nonqualified stock options granted on, or
effective during the period commencing on, June 21, 1993 and ending on
August 20, 1993, the exercise price of such options was the greater of the
(i) closing price of the Common Stock on the New York Stock Exchange
("NYSE") on June 21, 1993 or later date of grant, whichever is applicable,
and (ii) average closing price of the Common Stock on the NYSE for the 10
consecutive trading days ending on August 20, 1993. In the event that an
Incentive Stock Option and/or a nonqualified stock option is granted after
August 20, 1993, the exercise price of such option will be the closing price
of the Common Stock on the NYSE on the date that such option is granted.
The options become exercisable for 1/3rd of the shares purchasable
thereunder on the first anniversary of the date of grant, 2/3rds of the
shares purchasable thereunder on the second anniversary date and all of the
9
<PAGE> 13
shares purchasable thereunder on the third anniversary date. No option
granted under the Company's 1993 Employees' Stock Option Plan may be
exercised more than 10 years from the date such option is granted.
(2) As of June 21, 1993, pursuant to the Company's 1993 Employees' Stock Option
Plan and in satisfaction of the interests of the holders of options under
the Company's 1981 Employees' Stock Option Plan and 1989 Employees' Stock
Option Plan, options to acquire 200,000 shares of Common Stock were granted
to certain employees of the Company, including certain officers.
(3) As of December 9, 1993, pursuant to the Company's 1993 Employees' Stock
Option Plan, options to acquire 66,000 shares of Common Stock were granted
to certain employees of the Company, including certain officers.
The following table sets forth, with respect to those persons named in the
Summary Compensation Table, information concerning the exercise of stock options
during the fiscal year ended December 31, 1993, and the fiscal year-end value of
unexercised options.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
(D) (E)
------------------------- -------------------------
(C) NUMBER OF SECURITIES VALUE OF UNEXERCISED
(B) -------- UNDERLYING UNEXERCISED IN-THE-MONEY
--------------- VALUE OPTIONS/SARS OPTIONS/SARS
(A) SHARES ACQUIRED REALIZED AT FY-END (#) AT FY-END ($)
NAME ON EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ------------------------------- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert J. Strudler............. -- -- 0/45,000 $0/$107,975
Isaac Heimbinder............... -- -- 0/45,000 $0/$107,975
Chester P. Sadowski............ -- -- 0/10,000 $ 0/$24,680
Richard G. Slaughter........... -- -- 0/10,000 $ 0/$24,680
Craig M. Johnson............... -- -- 0/10,000 $ 0/$24,680
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
EMPLOYMENT AGREEMENTS OF ROBERT J. STRUDLER AND ISAAC HEIMBINDER
Mr. Strudler entered into an Employment and Consulting Agreement with the
Company on May 12, 1986 (as amended, the "Chairman's Employment Agreement") and
Mr. Heimbinder entered into a similar Employment and Consulting Agreement with
the Company on May 12, 1986 (as amended, the "President's Employment Agreement,"
and together with the Chairman's Employment Agreement, the "Employment
Agreements"). The Employment Agreements provide for their continued employment
with the Company as Chairman and Chief Executive Officer and President and Chief
Operating Officer, respectively, until the later of (i) May 11, 1996 or (ii)
such date when the Employment Agreements are not renewed for successive one-year
terms (the "Employment Term"). Under the Employment Agreements, during 1993,
Messrs. Strudler and Heimbinder were paid annual base salaries of $368,225 and
$360,000, respectively. Messrs. Strudler and Heimbinder are also to be paid
incentive compensation for each fiscal year that the Company is profitable based
upon certain formulas set forth in the Employment Agreements and subject to
annual review by the Board. In addition, Messrs. Strudler and Heimbinder agreed
to serve as consultants to the Company for a period of five years after the
Employment Term ceases, with consulting fees payable at 1993 rates of $134,000
and $128,700 per year, respectively, subject to cost of living adjustments, and
will receive retirement benefits upon attainment of age 58 equal to 50 percent
of their highest monthly base salaries during the Employment Term. In accordance
with past practice, these retirement benefits have been substantially provided
for by annuities held in trust for their benefit.
Messrs. Strudler and Heimbinder may be terminated for cause, as defined in
the Employment Agreements. If either Mr. Strudler or Mr. Heimbinder is
terminated without cause during the Employment
10
<PAGE> 14
Term, he will be entitled to receive (i) the balance of the base salary which
would have been paid during the remainder of the Employment Term (but not less
than three years), (ii) a bonus for each year remaining (but not less than three
years) during the Employment Term based upon average historical incentive
compensation, (iii) the actuarial present value of retirement benefits payable
under the Employment Agreement (less amounts previously contributed to fund
retirement annuities) and (iv) an amount equal to any consulting fee payable
under the Employment Agreements.
If a "Control Change" (as defined below) is followed within two years by a
"Material Change" (as defined below), each of Mr. Strudler and Mr. Heimbinder
may terminate his employment and receive the payments referred to in clauses
(i), (ii) and (iv) of the preceding paragraph. A "Material Change" occurs if (x)
Mr. Strudler's or Mr. Heimbinder's employment is terminated without cause, (y)
Mr. Strudler's or Mr. Heimbinder's functions, duties, responsibilities or base
salaries are adversely changed or (z) Mr. Strudler or Mr. Heimbinder is assigned
to a place of employment which is more than 10 miles from his present place of
employment and which is not the corporate headquarters of the Company. In
addition, if a Control Change occurs, each of Mr. Strudler and Mr. Heimbinder
may terminate his employment. In such event, he will serve as a consultant to
the Company and be compensated at the 1993 rate of $134,000 (for Mr. Strudler)
or $128,700 (for Mr. Heimbinder) per annum (subject to cost of living
increases), for five years thereafter and will be entitled to have the payment
of the retirement benefits due under the Employment Agreements commence on the
earlier of (i) May 11, 1996 or (ii) when Mr. Strudler or Mr. Heimbinder attains
the age of 58, respectively.
A Control Change occurs under the following circumstances: (i) a report on
Schedule 13D is filed pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), indicating that any person has become a beneficial
owner of 15% or more of the combined voting power of the outstanding securities
of the Company, (ii) the purchase by any person of securities pursuant to a
tender offer or exchange offer to acquire any Common Stock of the Company (or
securities convertible into such Common Stock), if after the consummation of the
offer the person would be the beneficial owner of 15% or more of the combined
voting power of the then outstanding securities of the Company, (iii) a
consolidation or merger of the Company in which the Company is not the surviving
corporation, or pursuant to which shares of Common Stock would be converted into
cash, securities or other property (other than a merger of the Company in which
holders of Common Stock prior to the merger have the same proportionate
ownership of Common Stock of the surviving corporation immediately after the
merger as immediately before), (iv) any sale, lease, exchange or other transfer
of all or substantially all of the assets of the Company, or (v) a change of a
majority of the members of the Board within a 12-month period, unless the
election or nomination for election by the Stockholders of each new director
during such 12-month period was approved by a vote of two-thirds of the
directors then still in office who were on the Board at the beginning of such
12-month period.
Failure to elect Mr. Heimbinder to the office of Chief Executive Officer in
the event of a vacancy in that office for any reason will be deemed a
termination without cause, entitling Mr. Heimbinder to resign within 180 days of
such vacancy, in which event he will be entitled to the severance pay and other
termination payments he would have received pursuant to the President's
Employment Agreement in the event he had been terminated without cause
thereunder.
In addition, prior to April 21, 1994, Mr. Strudler and Mr. Heimbinder may
be removed from the offices of Chairman and President, respectively, only for
"cause" by the affirmative vote of the entire Board and the duties, functions
and responsibilities of such officers as in effect prior to June 21, 1993 may
not be altered.
KEY EMPLOYEES' SEPARATION PAY PLAN
The Board adopted the Company's Key Employees' Separation Pay Plan (the
"Separation Plan"), which became effective on June 21, 1993. The executive
officers of the Company (other than Messrs. Heimbinder and Strudler), the
Presidents of Operations, and Division Chairmen and Division Presidents of the
Company are participants in the Separation Plan. Under the terms of the
Separation Plan, a participant whose employment with the Company is terminated,
other than for Cause (as defined below), or whose employment is Constructively
Terminated (as defined below) on or after June 21, 1993 through and including
June 21,
11
<PAGE> 15
1994 will be entitled to receive (i) an amount equal to the greater of (a) 12
months of such participant's base salary or (b) one month of such participant's
base salary for each year during which such participant was employed by the
Company or its subsidiaries or divisions; provided, however, that any Division
Chairman or Division President will only be entitled to receive an amount equal
to six months of such participant's base salary, and (ii) insurance and medical
benefits up to one year after date of termination of employment.
The benefits under the Separation Plan are to be paid to a participant in a
single lump sum in cash as soon as practicable (but in no event later than 30
days) after the participant's termination of employment. In no event will the
benefits payable under the Separation Plan and any other termination benefits,
excluding any payments under the Company's profit sharing plan, to which a
participant may be entitled under any other plan, program or arrangement
maintained by the Company, exceed the maximum amount payable under the
Separation Plan.
Under the Separation Plan, "Constructively Terminated" means a (i) a
reduction in an amount equal to or greater than 15% of a participant's base
salary, (ii) material reduction in a participant's job function, duties or
responsibilities or (iii) required relocation of a participant of more than 50
miles from such participant's current job location; provided, however, that the
employment with the Company or its subsidiaries or divisions of a President of
Operations who is a participant will not be deemed to be Constructively
Terminated in the event he or she is required to be a Division Chairman or
Division President with the Company or its subsidiaries or division and has job
functions, duties or responsibilities of a Division Chairman or Division
President and/or is required to relocate in connection with such change in
position; provided further, that the employment with the Company or its
subsidiaries or divisions of a Division Chairman or Division President who is a
participant will not be deemed to be Constructively Terminated in the event he
or she is required to be a Division Chairman or Division President of a division
other than the division he or she is currently employed by and has job
functions, duties or responsibilities of a Division Chairman or Division
President and/or is required to relocate in connection with such change in
position; provided further, that the employment of a participant will not be
deemed Constructively Terminated unless such participant actually terminates his
or her employment with the Company within 60 days after the occurrence of an
event specified in clauses (i), (ii) or (iii) above.
Under the Separation Plan, "Cause" means (i) a participant's continuing
willful failure to perform his or her duties (other than as a result of total or
partial incapacity due to physical or mental illness), (ii) gross negligence or
malfeasance by a participant in the performance of his or her duties, (iii) an
act or acts on the part of a participant constituting a felony under the laws of
the United States, or any state thereof, which results or was intended to result
directly or indirectly in gain or personal enrichment by such participant at the
expense of the Company or its subsidiaries or divisions or (iv) breach of any of
the provisions of the Separation Plan pertaining to confidentiality and
competitive activities.
DIRECTOR COMPENSATION
Directors, other than those who are officers of the Company, receive the
following compensation: membership on the Board -- $24,000 per annum; each
committee membership -- $1,600 per annum; each committee chairmanship -- $1,600
per annum; attendance at each Board and committee meeting -- a per diem fee of
$1,000. Directors who are officers of the Company receive no compensation for
their services as directors. On August 19, 1993, the Board approved, subject to
approval by the Stockholders at the Meeting, the Non-Employee Directors' Stock
Option Plan. See "Non-Employee Directors' Stock Option Plan."
12
<PAGE> 16
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee administers the Company's executive compensation
program and makes specific recommendations to the Board for salaries, incentive
bonuses and stock option plans. The Committee, which was reorganized on August
19, 1993 following the Company's emergence from Chapter 11, is composed of four
independent, non-employee directors. See "Committees of the Board of Directors."
The Company's executive compensation program (which excludes the Chairman
and President of the Company, whose respective Employment Agreements provide for
the terms of their compensation) is intended to attract, retain and motivate
highly qualified executives for the Company and to create an incentive to
increase Stockholder value. This policy is implemented through payment of
salaries and bonuses and the granting of stock options, as well as medical
benefits and profit sharing plan contributions which are available to employees
of the Company.
Salaries. The Compensation Committee is responsible for recommending for
each fiscal year the base salary levels for the executive officers of the
Company. In developing salary recommendations for the year ending December 31,
1994, the Compensation Committee reviewed the salaries for similar positions in
similarly-sized companies which engage in the Company's businesses. The
Committee confirmed that the base salaries for the executive officers were
consistent with its objective of setting base salaries within reasonable ranges
for similar positions in competitive companies. In recommending base salary
levels, the Compensation Committee also considers each executive officer's
experience level and potential for significant contributions to the Company's
profitability and the Company's goal of retaining and motivating highly
qualified executive officers in a highly competitive and mobile industry.
Bonuses. An annual incentive bonus plan for the executive officers (other
than Messrs. Strudler and Heimbinder) has been structured to provide financial
incentives which are related to the Company's profitability and are utilized to
recognize the executive's individual contributions to the Company. The annual
bonus plan is also intended to reward executive officers for exceptional
performance. Under the 1994 incentive plan, an incentive compensation pool in an
amount equal to the lesser of $600,000 or 2% of the Company's pre-tax income for
the fiscal year ending December 31, 1994 has been established to be distributed
to the executive officers based upon evaluation of the following factors:
(1) A review of the profit and loss of the Company as compared to the
projected profit and loss for the fiscal year as set forth in the Company's
business plan.
(2) A review of the cash flow of the Company as compared to the
projected cash flow for the fiscal year as set forth in the Company's
business plan.
(3) The overall performance of the Company in comparison to
competitive industry performance, taking into consideration an analysis of
rates of growth, return on equity and return on sales.
(4) The incentive bonus payments by competitors in relation to the
proposed bonus payments to the Company's executive officers.
(5) All other actions and activities by the executive officers in the
fulfillment of their tasks as an officer to maximize Stockholder value.
The amount of the payments allocated to each executive officer from the
incentive pool is determined by the Board (upon the recommendation of the
Compensation Committee) in its sole discretion; provided that the maximum
incentive compensation payable to any officer for fiscal year 1994 will not
exceed 75% of the base salary of such officer. An executive officer will only be
entitled to receive incentive compensation from the incentive pool if the
officer is employed by the Company during the entire fiscal year. Subject to
approval of the Employee Stock Payment Plan by Stockholders at the Meeting, up
to 25% of the incentive bonuses payable to executive officers may be payable in
shares of Common Stock. See "Employee Stock Payment Plan."
13
<PAGE> 17
Stock Options. Long-term incentives are provided through grants of stock
options to key employees, including officers and managerial or supervisory
employees who are salaried employees of the Company and its subsidiaries or
divisions, to remain in the employ of the Company and its subsidiaries and
divisions. The amount of the awards reflect the officer's position and ability
to influence the Company's overall performance. Options are intended to provide
officers with an increased incentive to make contributions to the long-term
performance and growth of the Company, to join the interests of officers with
the interests of Stockholders and to attract and retain qualified employees.
Compliance with Internal Revenue Code Section 162(m). With respect to
Section 162(m) of the Tax Code, the Compensation Committee does not expect
"applicable employee remuneration" for any "covered employee" (as such terms are
defined in the Tax Code) of the Company to exceed $1,000,000 for the year ending
December 31, 1994. To the extent that total compensation to a covered employee
exceeds $1,000,000 in any taxable year, the Compensation Committee expects that
the excess amount over $1,000,000 will be deductible in accordance with the
provisions of the Tax Code.
CEO and COO Compensation. The compensation for Mr. Strudler, the Chairman
and Chief Executive Officer of the Company, and Mr. Heimbinder, the President
and Chief Operating Officer of the Company, is based on their Employment
Agreements, which have been in effect since 1986, as amended from time to time.
Mr. Strudler's base salary for 1994 is $400,000 and Mr. Heimbinder's base salary
for 1994 is $390,000. Such base salaries were determined by the Board (based on
a recommendation of the Compensation Committee), after reviewing the base salary
increases for Messrs. Strudler and Heimbinder over the past several years, the
comparable salaries of chief executive officers and chief operating officers of
other homebuilding companies and the Company's performance during 1993.
Pursuant to the Employment Agreements, Messrs. Strudler and Heimbinder are
entitled to receive incentive compensation, not to exceed 100% of their
respective base salaries, equal to the sum of the following: (i) one-half ( 1/2)
of one percent (1%) of the first $10,000,000 of the Company's pre-tax income for
such year, plus (ii) three-fourths ( 3/4) of one percent (1%) of the next
$10,000,000 of the Company's pre-tax income for such year, plus (iii) one
percent (1%) of the Company's pre-tax income for such year in excess of
$20,000,000. In 1993, the incentive bonus paid to Mr. Strudler was approximately
$368,000 and the incentive bonus paid to Mr. Heimbinder was approximately
$360,000. In addition, in 1993, Mr. Strudler and Mr. Heimbinder each received a
supplementary bonus in the amount of $200,000. In awarding such bonus and
compensation, the Board (based on the recommendation of the Compensation
Committee) reviewed Mr. Strudler's and Mr. Heimbinder's extraordinary
performances during 1993 and their contribution to the Company's results during
1993, including the Company's successful emergence from Chapter 11, the
refinancing of debt on a long-term basis on favorable terms, the retention of a
strong and experienced management group and the Company's return to sustained
profitability exceeding the 1993 business plan. These and other actions
re-established the Company as a financially stable, strongly capitalized,
profitable and viable national homebuilder.
Compensation and Stock Option
Committee
Charles A. McKee, Chairman
Steven L. Gerard
Kenneth J. Hanau, Jr.
James W. Sight
14
<PAGE> 18
STOCK PERFORMANCE GRAPH
The following graph compares on a cumulative basis, the yearly percentage
change during the five years ended December 31, 1993 in (i) the total
Stockholder return on the common stock of the Company with (ii) the total return
on the Standard & Poor Composite Stock Price Index and with (iii) the total
stockholder return on the common stock of a peer group consisting of 11
companies engaged in homebuilding activities. Such yearly percentage change has
been measured by dividing (i) the sum of (a) the amount of dividends for the
measurement periods, assuming dividend reinvestment, and (b) the price per share
at the end of the measurement period less the price per share at the beginning
of the measurement period, by (ii) the price per share at the beginning of the
measurement period. The price of each unit has been set at $100 on December 31,
1988 for preparation of the graph.
<TABLE>
<CAPTION>
Measurement
Period
(Fiscal Year U.S. Home
Covered) Corporation S&P 500 Peer Group
----------- ------- ----------
Dollars
------------------------------------------
<S> <C> <C> <C>
1988 100 100 100
1989 70.59 131.69 114.07
1990 19.11 127.60 81.37
1991 14.68 166.47 163.09
1992 35.29 179.15 192.04
6/21/93 93.52 186.05 194.89
6/22/93 100 100 100
12/31/93 127.38 109.09 128.02
</TABLE>
The first period shown on the graph (left of the double vertical bar) is
from December 31, 1988 to June 21, 1993 and includes the Company's shares of
common stock, $0.10 par value, that were outstanding and traded prior to the
effective date of the Company's plan of reorganization. Pursuant to the
provisions of the Company's plan of reorganization, all shares of such common
stock were cancelled on June 21, 1993 and .077480 shares of Common Stock and
.042036 shares of Class B Warrants were issued for each old share of common
stock.
The second period shown on the graph (right of the double vertical bar) is
from June 22, 1993 to December 31, 1993 and includes the Company's current
shares of Common Stock. Such graph does not include the value of the Class B
Warrants which increased 84.5% during this period.
The peer group index is composed of the following homebuilding companies:
Centex Corporation, Continental Homes Holding Corp., Hovnanian Enterprises,
Inc., Kaufman & Broad Home Corporation, Lennar Corporation, MDC Holdings, Inc.,
Pulte Corporation, Ryland Group, Inc., Standard Pacific Corp., UDC Homes, Inc.
and Del Webb Corp.
15
<PAGE> 19
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during the year ended December
31, 1993 were (i) from January 1, 1993 to June 29, 1993 -- Messrs. Hanau, McKee,
Smith (until June 10, 1993, when Mr. Smith resigned from the Board) and Ripault,
(ii) from June 29, 1993 to December 31, 1993 -- Messrs. Gerard, Hanau, McKee and
Sight. No such person was an officer or employee of the Company during the year
ended December 31, 1993 or was formerly an officer of the Company.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the Company's
outstanding shares of Common Stock and Convertible Preferred Stock beneficially
owned as of February 1, 1994, by (i) each director of the Company, (ii) all
directors and executive officers of the Company as a group and (iii) each person
who owns more than five percent of the Common Stock or the Convertible Preferred
Stock. All information with respect to beneficial ownership has been furnished
to the Company by the parties below.
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED
COMMON STOCK STOCK
----------------------------- -----------------------
NUMBER OF PERCENT NUMBER OF PERCENT
BENEFICIAL OWNERS SHARES(1)(2)(3) OF CLASS SHARES OF CLASS
- - -------------------------------------------- --------------- -------- --------- --------
<S> <C> <C> <C> <C>
Glen Adams.................................. -- -- -- --
Steven L. Gerard............................ -- -- -- --
Kenneth J. Hanau, Jr........................ 290 * -- --
Isaac Heimbinder............................ 58,609(4) * 733(4) *
Malcolm T. Hopkins.......................... -- -- -- --
Jack L. McDonald............................ -- -- -- --
Charles A. McKee............................ 2,035(5) * -- --
George A. Poole, Jr......................... -- -- -- --
Herve Ripault............................... 570 * 295 *
James W. Sight.............................. -- -- -- --
Robert J. Strudler.......................... 50,359 * 2,877 *
Craig M. Johnson............................ 15,500 * -- --
Chester P. Sadowski......................... 10,065 * -- --
Richard G. Slaughter........................ 10,083 * -- --
All directors and executive officers of the
Company as a group........................ 166,552 1.73% 5,715 *
Fidelity Management & Research Corp.
82 Devonshire Street
Boston, MA 02109(6)....................... 484,906 5.04% -- --
Friess Associates, Inc.
P.O. Box 4166
Greenville, Delaware 19807(7)............. 500,000 5.19% -- --
Loomis, Sayles & Company, L.P.
One Financial Center, 34th Floor
Boston, MA 02111(8)....................... 1,821,330 18.92% -- --
MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019(9)............... 505,100 5.25% 200,000 11.65%
State of Connecticut "Fund F"
55 Elm Street
Hartford, Connecticut(8).................. 558,801 5.80% -- --
</TABLE>
- - ---------------
* Less than 1%.
16
<PAGE> 20
(1) No person will have the right to acquire beneficial ownership of shares of
Common Stock purchasable under options granted pursuant to the Company's
1993 Employees' Stock Option Plan until June 21, 1994. None of these
options are included in the table set forth above.
(2) On August 19, 1993, the Board adopted the Company's Non-Employee Directors'
Stock Option Plan (the "Directors' Plan"). Pursuant to the Directors' Plan,
no person will have the right to acquire beneficial ownership of shares of
Common Stock pursuant to such Directors' Plan unless the Directors' Plan is
approved by the Stockholders within 12 months after its adoption by the
Board. None of these options are included in the table set forth above.
Under the Directors' Plan, Messrs. Hanau, McKee and Ripault each received
options to acquire 7,500 shares of Common Stock, and Messrs. Adams, Gerard,
Hopkins, McDonald, Poole and Sight each received options to acquire 5,000
shares of Common Stock.
(3) Includes Class B Warrants, exercisable at $20 per share, to acquire the
following number of shares of Common Stock: Mr. Hanau -- 102; Mr.
Heimbinder -- 6,108; Mr. McKee -- 710; Mr. Ripault -- 21; Mr.
Strudler -- 1,893; Mr. Sadowski -- 23; Mr. Slaughter -- 29 and all
directors and executive officers of the Company as a group -- 10,219.
(4) Excludes 4,004 shares of Common Stock, 4,192 shares of Convertible Preferred
Stock and Class B Warrants exercisable at $20 per share, to purchase 8
shares of Common Stock held in trust for Mr. Heimbinder's children. Mr.
Heimbinder disclaims beneficial ownership of such shares and Warrants. On
August 9, 1993, Mr. Heimbinder transferred 25 shares of Common Stock as a
gift to a nephew. A Form 4 reporting this transaction was filed on January
10, 1994.
(5) Excludes 775 shares of Common Stock and Class B Warrants exercisable at $20
per share, to purchase 420 shares of Common Stock owned by Mr. McKee's
wife. Mr. McKee disclaims beneficial ownership of such shares.
(6) Fidelity Management & Research Corp. may be deemed to be the beneficial
owner of such shares held by third party accounts under reporting
requirements of the Exchange Act; however, Fidelity Management & Research
Corp. expressly disclaims beneficial ownership of such shares.
(7) Friess Associates, Inc. may be deemed to be the beneficial owner of such
shares held by third party accounts under reporting requirements of the
Exchange Act; however, Friess Associates, Inc. expressly disclaims
beneficial ownership of such shares.
(8) Loomis, Sayles and Company, L.P. may be deemed to be the beneficial owner of
such shares held by third party accounts (including the shares of Common
Stock held by State of Connecticut "Fund F") under reporting requirements
of the Exchange Act; however, Loomis, Sayles and Company, L.P. expressly
disclaims beneficial ownership of such shares.
(9) MacKay-Shields Financial Corporation may be deemed to be the beneficial
owner of such shares held by third party accounts under reporting
requirements of the Exchange Act; however, MacKay-Shields Financial
Corporation expressly disclaims beneficial ownership of such shares.
17
<PAGE> 21
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(PROPOSAL 2)
On August 19, 1993, the Board adopted the Directors' Plan for the purpose
of attracting and retaining qualified persons for service as members of the
Board. There are reserved for issuance 100,000 shares of Common Stock in
accordance with the provisions of the Directors' Plan. The Directors' Plan will
be administered by the Nominating Committee.
The full text of the Directors' Plan is set forth as Exhibit A to this
Proxy Statement. The principal features of the Directors' Plan are summarized
below.
Under the Directors' Plan, options are granted only to non-employee members
of the Board. No individual who is, at the time of grant, an employee of the
Company will be eligible to receive options. No options granted under the
Directors' Plan are entitled to special tax treatment under Section 422 of the
Tax Code.
No option may be exercised more than 10 years after the date such option is
granted. Furthermore, in the event of the resignation of an optionee as a
director of the Company or the removal of an optionee as a director of the
Company, the optionee shall have the right, not later than the earlier of (i)
three months after such resignation or removal or (ii) the termination date of
the option, to exercise the option. If an optionee shall retire because of age,
die or become disabled while a director of the Company, the personal
representative of the optionee or the person to whom such options have been
transferred by will or by laws of descent and distribution, or the disabled
optionee, shall have the right, not later than the earlier of (i) three years of
such optionee's retirement, death or disability, or the number of months such
Director has served as a non-employee Director, whichever is less, or (ii) the
termination date of the option, to exercise such option.
A director who receives an option grant under the Directors' Plan will not
have to recognize any income at the time the option is granted. At the time the
option is exercised, the director will recognize taxable income in an amount
equal to the excess of the fair market value of the shares on the date of
exercise over the exercise price. The Company will be entitled to a deduction at
the time and in the same amount as the director recognizes income. The
directors' tax basis in the shares they receive will be equal to the fair market
value of the shares on the date of exercise, and their holding period for
securities purposes will begin on the day following the exercise date.
The grant of options to non-employee directors is nondiscretionary under
the Directors' Plan. Each non-employee director of the Company at the time of
adoption of the Directors' Plan was granted options to acquire 5,000 shares of
Common Stock at $23.29 per share (an "Initial Stock Option Grant"). Each person
who becomes a non-employee director of the Company after the adoption of the
Directors' Plan shall be granted options to acquire 5,000 shares of Common Stock
at the time such person first becomes a non-employee director of the Company (a
"New Director Stock Option Grant"). On the date of each annual meeting or
special meeting in lieu of annual meeting of the Stockholders, each person who
continues to serve as a non-employee director of the Company immediately after
such meeting shall be granted options to acquire 1,000 shares of Common Stock
(an "Annual Stock Option Grant"); provided, that he or she has served as a
non-employee director for at least six months prior to such meeting.
In addition to the Initial Stock Option Grant, each person who (i) was a
non-employee director of the Company at the time of adoption of the Directors'
Plan and (ii) served as a non-employee director of the Company prior to June 21,
1993 was granted options to acquire 2,500 shares of Common Stock at $23.29 per
share, the aggregate of such grant and the grant of options to acquire 5,000
shares of Common Stock shall be deemed an Initial Stock Option Grant for such
director.
The exercise price of the Initial Stock Option Grant is the greater of the
(i) closing price of the Common Stock on the NYSE on June 21, 1993 and (ii)
average closing price of the Common Stock on the NYSE for the 10 consecutive
trading days ended August 20, 1993. Notwithstanding the foregoing, the exercise
price of such option cannot be less than 95% of the average closing price of the
Common Stock on the NYSE for the 20 consecutive trading days immediately prior
to August 19, 1993. Under this formula, the exercise price of the options
granted under the Initial Stock Option Grant was $23.29 per share.
18
<PAGE> 22
The exercise price of any New Director Stock Option Grant and the Annual
Stock Option Grant shall be the average closing price of the Common Stock on the
NYSE for the 10 consecutive trading days immediately prior to the date of any
such stock option grant. Notwithstanding the foregoing, the exercise price of
any such option will in no event be less than 95% of the average closing price
of the Common Stock on the NYSE for the 20 consecutive trading days immediately
prior to the date of any such stock option grant.
The Directors' Plan became effective on August 19, 1993 (the date of its
adoption by the Board), and options were deemed granted at the close of business
that day to all non-employee directors of the Company serving on the Board at
that time. No option granted under the Directors' Plan may be exercised unless
and until such Plan has been approved by the Stockholders prior to August 19,
1994. If the Directors' Plan is not so approved by the Stockholders, all options
granted thereunder shall be null and void.
The administrator of the Directors' Plan may at any time terminate, amend
or modify the Directors' Plan in any respect it deems suitable; provided,
however, that no such action may (i) increase the total amount of Stock on which
options may be granted under the Plan, (ii) change the manner of determining the
option price, (iii) change the class of individuals eligible to receive options,
(iv) change the number of options which may be granted to each director, or (v)
change the times when such options are granted; provided, further, that no
amendment, modification or termination of the Directors' Plan may in any manner
affect any option theretofore granted under the Directors' Plan without the
consent of the then holder.
The Common Stock issuable upon the exercise of the options granted under
the Directors' Plan will registered pursuant to a Registration Statement on Form
S-8 under the Securities Act of 1933, as amended ("Securities Act").
Under the Directors' Plan, Messrs. Hanau, McKee and Ripault were each
granted options to acquire 7,500 shares of Common Stock, at $23.29 per share and
Messrs. Adams, Gerard, Hopkins, McDonald, Poole and Sight were each granted
options to acquire 5,000 shares of Common Stock at $23.29 per share.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE DIRECTORS'
PLAN, AND IT IS INTENDED THAT PROXIES NOT MARKED TO THE CONTRARY WILL BE SO
VOTED.
The affirmative vote of the holders of a majority of the shares of Stock
present in person or represented by proxy and entitled to vote at the Meeting is
required for approval of Proposal 2.
EMPLOYEE STOCK PAYMENT PLAN
(PROPOSAL 3)
On December 10, 1993, the Board adopted the Company's Employee Stock
Payment Plan (the "Employee Plan") for the purpose of increasing the ownership
stake of key employees of the Company and its subsidiaries and divisions by
paying a percentage of such employees' annual incentive compensation in shares
of Common Stock. There are 250,000 shares of Common Stock reserved for issuance
under the Employee Plan.
The full text of the Employee Plan is set forth as Exhibit B to this Proxy
Statement. The principal features of the Employee Plan are summarized below.
The Employee Plan has a term of five years, commencing on January 1, 1994
and Common Stock may be allocated thereunder until December 31, 1998.
All employees of the Company and its subsidiaries and divisions, including,
but not limited to, corporate officers, presidents of operations and division
presidents, are eligible to receive shares of Common Stock under the Employee
Plan.
Under the Employee Plan, up to 25% of an employee's annual incentive
compensation earned (i.e., compensation other than base salary) may be payable
in shares of Common Stock. Of such shares, up to 50% may vest not later than two
years after the end of the incentive compensation year applicable to the award
of Common Stock, and issuance of any such Common Stock will be conditioned on
the employee remaining in the employ of the Company, except in the case of
retirement after age 65 or death. An employee eligible to
19
<PAGE> 23
receive Common Stock under the Employee Plan will have no rights as a
Stockholder with respect to such Common Stock until such employee has become the
holder of record of such Common Stock upon vesting.
Shares of Common Stock to be issued or allocated under the Employee Plan
will be valued based on (i) with respect to the Company's incentive compensation
programs or incentive agreements which are based on the financial results of the
Company's fiscal year, the average of the closing prices of the Common Stock on
the NYSE for the 10 trading days immediately following release by the Company of
its results for the fiscal year with respect to incentive programs or agreements
which are based on such fiscal year or (ii) with respect to any other incentive
compensation programs of the Company, the average of the closing prices of the
Common Stock on the NYSE (A) for the last 10 trading days of the month following
the end of any other incentive program year or (B) for the 10 trading days
immediately following release by the Company of its results for the most recent
fiscal year, whichever is the later.
Under the present provisions of the Tax Code, the Federal income tax
consequences of the Employee Plan should be as follows:
To the extent that an employee receives Common Stock that is not subject to
vesting, the employee will recognize compensation income equal to the fair
market value of the Common Stock at that time, provided that, if the employee is
restricted from selling the shares for six months from the date of grant because
he is subject to Section 16(b) of the Securities Exchange Act of 1934, as
amended (a "Section 16(b) Employee"), such employee will recognize compensation
income equal to the fair market value of the Common Stock at the end of such
six-month period unless the employee elects otherwise. Within 30 days after the
date the Common Stock is considered issued to a Section 16(b) Employee, such
employee may make an election under Section 83(b) of the Tax Code (a "Section
83(b) Election") to recognize compensation income at the time of the issuance in
an amount equal to the fair market value of the shares at such time, in which
case such employee will not recognize any additional compensation income when
the Section 16(b) restrictions lapse.
To the extent that a portion of an employee's annual incentive compensation
that is payable in shares of Common Stock is contingent on his remaining in the
employ of the Company, as described above, and such employee does not become the
holder of record of such shares until they vest, the employee will recognize
compensation income at the time that the shares are issued to him. If the
employee is a Section 16(b) Employee at such time and the issuance of such
shares at a profit could subject him to suit under Section 16(b), such employee
will recognize compensation income at the time such restrictions lapse, unless
such employee makes a Section 83(b) Election as described above.
An employee's holding period for the Common Stock begins when such employee
recognizes taxable income under these rules, and the employee's basis in the
Common Stock for tax purposes will be the amount of compensation income so
recognized. The Company is entitled to deduct amounts equal to the amounts of
income recognized by an employee at the time it is recognized, provided that the
Company appropriately withholds from the employee for income tax purposes. The
Employee Plan is not subject to Section 401(a) of the Tax Code.
Common Stock issuable under the Employee Plan will be registered pursuant
to a Registration Statement on Form S-8 under the Securities Act of 1933, as
amended (the "Securities Act"). However, such Common Stock cannot be transferred
until vested in accordance with the terms of the Employee Plan other than by
will or the laws of descent and distribution. Thereafter, the transfer of Common
Stock by employees of the Company who are, or who may be deemed to be,
"affiliates" of the Company will be subject to certain restrictions under the
Securities Act.
The Employee Plan will be administered by the Compensation Committee,
comprised of at least three members, all of whom are to be "disinterested
persons" for purposes of Rule 16b-3 of the Exchange Act.
The administrator of the Employee Plan may at any time terminate, amend or
modify the Employee Plan in any respect it deems suitable; provided, however,
that, solely with respect to persons subject to Section 16 of the Exchange Act,
no action of the administrator, without the approval of the Stockholders, may
(i) materially increase the benefits accruing to employees eligible to receive
Common Stock under the Plan, (ii) materially increase the total amount of Common
Stock which may be awarded under the Employee Plan
20
<PAGE> 24
or (iii) materially modify the requirements for participation in the Employee
Plan; provided, further, that no amendment, modification or termination of the
Employee Plan may in any manner affect (A) any Common Stock (whether vested or
not) theretofore awarded under the Employee Plan without the consent of the
employee to whom Common Stock has been awarded or (B) modify the award of Common
Stock to the employee by the administrator.
Common Stock may not be issued or allocated under the Employee Plan to
employees of the Company subject to Rule 16b-3 of the Exchange Act unless and
until the Employee Plan shall have been approved by the Stockholders at the
Meeting. When so approved, the Employee Plan shall be deemed to have been in
effect as of January 1, 1994 and shall terminate at the close of business on
December 31, 1998.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE EMPLOYEE
STOCK PAYMENT PLAN, AND IT IS INTENDED THAT PROXIES NOT MARKED TO THE CONTRARY
WILL BE SO VOTED.
The affirmative vote of the holders of a majority of the shares of Stock
present in person or represented by proxy and entitled to vote at the Meeting is
required for approval of Proposal 3.
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO ELIMINATE A PROHIBITION AGAINST ISSUANCE
OF NON-VOTING EQUITY SECURITIES
(PROPOSAL 4)
The second paragraph of Article FOURTH of the Certificate of Incorporation
provides as follows:
"The Company will not issue any non-voting equity securities;
provided, however, that this provision, included in this Second Restated
Certificate of Incorporation in compliance with Section 1123(a)(6) of title
11 of the United States Code, as amended (the "Bankruptcy Code"), will have
no force and effect beyond that required by section 1123(a)(6) of the
Bankruptcy Code and will be effective only for so long as section
1123(a)(6) of the Bankruptcy Code is in effect and applicable to the
Company."
Pursuant to the order of the United States Bankruptcy Court for the
Southern District of New York (the "Bankruptcy Court") confirming the Company's
plan of reorganization, the Company was directed to amend and restate its
certificate of incorporation to prohibit the issuance of non-voting equity
securities to the extent required by section 1123(a)(6) of the Bankruptcy Code.
After the effective date of the Company's plan of reorganization, the Company
may further amend the Certificate of Incorporation in accordance with the
Certificate of Incorporation and the Delaware General Corporation Law.
The proposed amendment would delete the second paragraph of Article FOURTH
of the Certificate of Incorporation, thereby removing the technical prohibition
against issuing non-voting securities which was, but no longer is, required by
the Bankruptcy Court and the Bankruptcy Code to be a restriction on the Company.
The effect of the amendment would be to restore to the Company the flexibility
to issue non-voting equity securities. The Company presently has no intention to
issue any non-voting equity securities.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF AN AMENDMENT TO
THE CERTIFICATE OF INCORPORATION TO ELIMINATE A PROHIBITION AGAINST ISSUANCE OF
NON-VOTING EQUITY SECURITIES, AND IT IS INTENDED THAT PROXIES NOT MARKED TO THE
CONTRARY WILL BE SO VOTED.
The affirmative vote of the holders of a majority of the issued and
outstanding shares of Stock of the Company is required for approval of Proposal
4.
NEW PLAN BENEFITS
The following table sets forth the amounts to which certain participants in
the Directors' Plan would have been entitled if such Plan had been in effect for
the year ended December 31, 1993. Dollar values for options set forth in the
table are based upon the difference between the closing price of the Common
Stock on the NYSE on the last day of trading in 1993 ($26.63 per share of Common
Stock) and the exercise price ($23.29
21
<PAGE> 25
per share of Common Stock) of the shares purchasable under the options granted
in connection with the Initial Stock Option Grant. The benefits or amounts to be
received by or allocated to executive employees under the Employee Plan or which
would have been received by or allocated to executive employees under the
Employee Plan for the Company's last completed fiscal year if the Employee Plan
had been in effect are not determinable because the amount of incentive
compensation and the number of shares of Common Stock payable to such employees
will be based on 1994 operating results as well as subject to the discretion of
the Board. Therefore, the number of units and dollar value data has been
omitted.
<TABLE>
<CAPTION>
DIRECTORS' PLAN EMPLOYEE PLAN
---------------------- ----------------------
DOLLAR NUMBER DOLLAR NUMBER
VALUE OF UNITS VALUE OF UNITS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Robert J. Strudler................................ (1) (2)
Isaac Heimbinder.................................. (1) (2)
Chester P. Sadowski............................... (1) (2)
Richard G. Slaughter.............................. (1) (2)
Craig M. Johnson.................................. (1) (2)
All Executive Officers as a Group................. (1) (2)
Non-Executive Directors........................... $175,350 52,500 (2)
Non-Executive Employees........................... (1) (2)
</TABLE>
- - ---------------
(1) Executive officers do not participate in the Directors' Plan.
(2) Not yet determinable until 1994 operating results are determined.
RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN & CO. AS AUDITORS
(PROPOSAL 5)
The Board, upon recommendation of the Audit Committee of the Board, has
appointed, subject to ratification by Stockholders, the firm of Arthur Andersen
& Co., independent public accountants, to examine the financial statements of
the Company for 1994. Arthur Andersen & Co. has been employed by the Company as
its independent auditors for more than 25 years. Stockholders are asked to
ratify the action of the Board in making such appointment.
Representatives of Arthur Andersen & Co. will attend the Meeting and may
make a statement if they so desire. They also will be available to respond to
appropriate questions.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION, AND IT IS
INTENDED THAT PROXIES NOT MARKED TO THE CONTRARY WILL BE SO VOTED.
The affirmative vote of the holders of a majority of the shares of Stock
cast thereon is required for the ratification of the appointment of auditors.
OTHER BUSINESS
Management of the Company knows of no business to be brought before the
Meeting other than the election of Class I Directors, the adoption of the
Directors' Plan, adoption of the Employee Plan, adoption of an amendment to the
Certificate of Incorporation to eliminate a prohibition against issuance of
non-voting equity securities and ratification of the appointment of auditors as
set forth in the Notice of Annual Meeting. If any other proposals come before
the Meeting, it is intended that the shares of Stock represented by Proxies
shall be voted in accordance with the judgment of the person or persons
exercising the authority conferred by the Proxies.
22
<PAGE> 26
STOCKHOLDER PROPOSALS
Proposals by Stockholders intended to be presented at the 1995 Annual
Meeting of Stockholders must be received by the Company on or before November 3,
1994 in order to be included in the Proxy Statement and Proxy for that meeting.
The mailing address of the Company for submission of any such proposal is given
on the first page of this Proxy Statement.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
ARE REQUESTED TO SIGN, DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE,
WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING IN PERSON.
By Order of the Board of Directors
RICHARD G. SLAUGHTER
Secretary
Houston, Texas
March 3, 1994
23
<PAGE> 27
EXHIBIT A
U.S. HOME CORPORATION
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. PURPOSES.
The purposes of the U.S. Home Corporation Non-Employee Directors' Stock
Option Plan (the "Plan") are to attract and retain qualified and competent
persons for service as members of the board of directors (the "Board") of U.S.
Home Corporation (the "Company") by providing a means whereby such persons
acquire an equity interest in the Company and to secure for the Company and its
stockholders the benefit of the incentives inherent in such equity ownership by
persons whose advice and counsel are important to the Company's future growth
and continued success.
2. ADMINISTRATION.
(a) The Board shall (i) administer the Plan, (ii) establish, subject to the
provisions of the Plan, such rules and regulations as it may deem appropriate
for the proper administration of the Plan and (iii) make such determinations
under, and such interpretations of, and take such steps in connection with, the
Plan or the options issued thereunder as it may deem necessary or advisable.
(b) The Board may from time to time appoint a Committee (the "Committee"),
which shall initially be the Nominating Committee of the Board, which shall be
comprised of at least three members of the Board and may delegate to the
Committee full power and authority to take any and all action required or
permitted to be taken by the Board under the Plan, whether or not the power and
the authority of the Committee is hereinafter fully set forth. The Board or the
Committee, as applicable, shall hereinafter be referred to as the
"Administrator."
3. STOCK.
The stock (the "Stock") to be made the subject of an option under the Plan
shall be the shares of common stock of the Company, $.01 par value per share,
whether authorized and unissued or treasury stock. The total amount of Stock for
which options may be granted under the Plan shall not exceed, in the aggregate,
100,000 shares, subject to adjustment in accordance with the provisions of
Section 12 hereof. Any shares of Stock which were the subject of unexercised
portions of any terminated or expired options may again be subject to the grant
of options under the Plan during the remaining term of the Plan.
4. AWARD OF OPTIONS.
(a) Options shall be granted only to non-employee directors of the Board.
No individual who is, at the time of grant, an employee of the Company shall be
eligible to receive options under the Plan.
(b) All options granted under the Plan shall be non-qualified options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended (the "IRC").
(c) Any and all options granted under this Plan shall be granted not later
than 10 years from August 19, 1993, the date the Plan was adopted by the Board.
(d) All options granted under the Plan shall be evidenced by a written
agreement substantially in the form of Exhibit A annexed hereto (each an "Option
Agreement").
5. NUMBER OF SHARES TO BE GRANTED.
(a) Each person who is a non-employee director of the Company at the time
of adoption of the Plan by the Board shall be granted an option for 5,000 shares
of Stock (an "Initial Stock Option Grant") at the time of such adoption. Each
person who becomes a non-employee director of the Company after the adoption of
the Plan by the Board shall be granted an option for 5,000 shares of Stock at
the time such person first becomes a non-employee director of the Company (a
"New Director Stock Option Grant"). On the date of
A-1
<PAGE> 28
each annual meeting or special meeting in lieu of annual meeting of the
stockholders of the Company, each person who continues to serve as a
non-employee director of the Company immediately after such meeting shall be
granted an option for 1,000 additional shares of Stock (an "Annual Stock Option
Grant"); provided, that he or she has served as a non-employee director for at
least six months prior to such meeting. The options shall be deemed
automatically granted at the times, in the amounts and at the option prices set
forth herein without any further action on the part of the Administrator, and
the proper officers of the Company are authorized, empowered and directed to
execute and deliver an Option Agreement to reflect each such grant at the times,
in the amounts and at the option prices determined in accordance with the Plan.
(b) Each person who (i) is a non-employee director of the Company at the
time of adoption of the Plan and (ii) has served as a non-employee director of
the Company prior to June 21, 1993 shall be granted an option for 2,500 shares
of Stock, in addition to the option granted pursuant to paragraph (a) of this
Section 5, the aggregate of which shall be deemed an Initial Stock Option Grant
for such directors.
6. PRICE.
(a) In the case of an Initial Stock Option Grant, the exercise price of
such Option shall be the greater of the (i) closing price of the Stock on the
New York Stock Exchange (the "NYSE") on June 21, 1993 and (ii) average closing
price of the Stock on the NYSE for the 10 consecutive trading days ending August
20, 1993. Notwithstanding the foregoing, the exercise price of such Option will
in no event be less than 95% of the average closing price of the Stock on the
NYSE for the 20 consecutive trading days immediately prior to August 19, 1993.
(b) In the case of a New Director Stock Option Grant, the exercise price of
such Option shall be the average closing price of the Stock on the NYSE for the
10 consecutive trading days prior to the date of the New Director Stock Option
Grant. Notwithstanding the foregoing, the exercise price of such Option will in
no event be less than 95% of the average closing price of the Stock on the NYSE
for the 20 consecutive trading days immediately prior to the date of the New
Director Stock Option Grant.
(c) In the case of an Annual Stock Option Grant, the exercise price of such
Option shall be the average closing price of the Stock on the NYSE for the 10
consecutive trading days prior to the date of the Annual Stock Option Grant.
Notwithstanding the foregoing, the exercise price of such Option will in no
event be less than 95% of the average closing price of the Stock on the NYSE for
the 20 consecutive trading days immediately prior to the date of the Annual
Stock Option Grant.
(d) The closing price of the Stock, as of any particular day, shall be as
reported in The Wall Street Journal; provided, however, that if the Stock is not
listed on the NYSE on the dates the option price is to be determined, the option
price shall be not less than the fair market value of the shares of Stock
covered by the option at the time that the option is granted, as determined by
the Administrator based on such empirical evidence as it deems to be necessary
under the circumstances.
7. TERM.
Subject to Sections 9, 10 and 21 hereof, an option may be exercised by the
holder thereof (a "Holder") in whole at any time or in part from time to time
commencing with the date of grant of any option under the Plan, but no option
may be exercised in any amount later than 10 years from the date such option was
granted.
8. TRANSFERABILITY.
No option may be transferable by a Holder other than by will or the laws of
descent and distribution. During the lifetime of a Holder, the option may be
exercisable only by such Holder. A Holder who acquires Stock hereunder may only
transfer such Stock in compliance with applicable federal and state securities
laws.
9. TERMINATION OF DIRECTORSHIP.
If, on or after the date an option is granted under the Plan, a Holder (i)
resigns as a director of the Company or (ii) is removed as a director of the
Company by the stockholders of the Company, with or
A-2
<PAGE> 29
without cause, the Holder shall have the right, not later than the earlier of
(A) three months after such resignation or removal or (B) the termination date
of the option as set forth in the Option Agreement, to exercise such option, to
the extent the right to exercise such option shall have accrued at the date of
such resignation or removal, except to the extent that such option theretofore
shall have been exercised.
10. RETIREMENT, DEATH OR DISABILITY.
If a Holder retires at the age of 65 or above, dies, or becomes disabled
(within the meaning of Section 22(e)(3) of the IRC) while a director of the
Company, the Holder, the personal representative of the Holder or the person or
persons to whom the option shall have been transferred by will or by the laws of
descent and distribution, or the disabled Holder, shall have the right, not
later than the earlier of (i) three years from the date of the Holder's
retirement, death or disability or (ii) the termination date of the option as
set forth in the Option Agreement, to exercise such option to the extent the
right to exercise such option shall have accrued at the date of such retirement,
death or disability, except to the extent such option theretofore shall have
been exercised.
11. PAYMENT FOR STOCK.
(a) The purchase price of Stock issued upon exercise of options granted
hereunder shall be paid in full on the date of purchase. Payment shall be made
either in cash or such other consideration as the Administrator deems
appropriate, including, without limitation, Stock already owned by the Holder or
Stock to be acquired by the Holder upon exercise of the option having a total
fair market value, as determined by the Administrator, equal to the purchase
price, or a combination of cash and Stock having a total fair market value, as
so determined, equal to the purchase price.
(b) Stock shall not be issued upon the exercise of options unless and until
the aggregate amount of federal, state or local taxes of any kind required by
law to be withheld, if any, with respect to the exercise of such options have
been paid or satisfied or provision for their payment and satisfaction has been
made upon such terms as the Administrator may prescribe, including, without
limitation, payment of any such taxes by exchanging shares of Stock previously
owned by the Holder or acquired upon the exercise of an option.
12. STOCK ADJUSTMENTS.
(a) The total amount of Stock for which options shall be granted under the
Plan and option terms (both as to the number of shares of Stock and the price of
the option) shall be appropriately adjusted for any increase or decrease in the
number of outstanding shares of Stock resulting from payment of a stock dividend
on the Stock, a subdivision or combination of the Stock, or a reclassification
of the Stock, and (in accordance with the provisions contained in the following
paragraph) in the event of a consolidation or a merger in which the Company will
be the surviving corporation.
(b) After any merger of one or more corporations into the Company in which
the Company shall be the surviving corporation, or after any consolidation of
the Company and one or more other corporations, each Holder shall, at no
additional cost, be entitled, upon any exercise of his option, to receive, in
lieu of the number of shares of Stock as to which such option shall then be so
exercised, the number and class of shares of stock or other securities to which
such Holder would have been entitled pursuant to the terms of the applicable
agreement of merger or consolidation if at the time of such merger or
consolidation such Holder had been a Holder of record of a number of shares of
Stock equal to the number of shares for which such option may then be so
exercised. Comparable rights shall accrue to each Holder in the event of
successive mergers or consolidations of the character described above.
(c) In the event of any sale of all or substantially of the assets of the
Company, or any merger of the Company into another corporation, or any
dissolution or liquidation of the Company or, in the discretion of the Board,
any consolidation or other reorganization in which it is impossible or
impracticable to continue in effect any options, all options granted under the
Plan and not previously exercised shall terminate unless exercised at least one
business day before the scheduled closing of such event; provided, that any such
exercise or termination shall be conditioned on the closing of such transaction;
and provided further, that the Board may,
A-3
<PAGE> 30
in its discretion, require instead that all options granted under the Plan and
not previously exercised shall be assumed by such other corporation on the basis
provided in the preceding paragraph to the extent possible or practical.
(d) The adjustments described in this Section 12 and the manner of
application of the foregoing provisions shall be determined by the Board in its
sole discretion. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to an option.
13. RIGHTS AS A STOCKHOLDER.
A Holder or a transferee of an option shall have no rights as a stockholder
with respect to any share of Stock covered by such Holder's option until such
Holder has become the holder of record of such share of Stock, and, except for
stock dividends as provided in Section 12 hereof, no adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights in respect of such share for which
the record date is prior to the date on which he or she shall become the holder
of record thereof.
14. AMENDMENT AND TERMINATION.
The Board may at any time terminate, amend or modify the Plan in any
respect it deems suitable; provided, however, that no such action of the Board,
without the approval of the stockholders of the Company, may (i) increase the
total amount of Stock on which options may be granted under the Plan, (ii)
change the manner of determining the option price, (iii) change the class of
individuals eligible to receive options, (iv) change the number of options which
may be granted to each director, or (v) change the times when such options are
granted; provided, further, that no amendment, modification or termination of
the Plan may in any manner affect any option theretofore granted under the Plan
without the consent of the then Holder. Notwithstanding the foregoing, the Plan
may not be amended more than once in any six-month period except to comply with
changes in the IRC, the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or any rules or regulations promulgated under either the IRC
or ERISA.
15. INVESTMENT PURPOSE.
At the time of exercise of any option, the Company may, if it shall deem it
necessary or desirable for any reason, require the Holder to (i) in the absence
of an effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), represent in writing to the Company that it is
such Holder's then intention to acquire the Stock for investment and not with a
view to the distribution thereof or (ii) postpone the date of exercise until
such time as the Company has available for delivery to the Holder a prospectus
meeting the requirements of all applicable securities laws.
16. RIGHT TO REMOVE DIRECTOR.
Nothing contained herein or in any Option Agreement shall restrict the
right of the stockholders of the Company to remove any Holder as director at any
time, with or without cause, or shall constitute or be evidence of any agreement
or understanding, express or implied, that the Company shall retain a director
for any period of time, or at any particular rate of compensation.
17. FINALITY OF DETERMINATIONS.
Each determination, interpretation, or other action made or taken pursuant
to the provisions of the Plan by the Administrator shall be final and be binding
and conclusive for all purposes.
18. INDEMNIFICATION OF DIRECTORS.
Each director of the Company, solely in his or her capacity as a director,
shall be indemnified by the Company against all costs and expenses reasonably
incurred by such director in connection with any action, suit or proceeding to
which he or she or any of the other directors may be a party by reason of any
action taken
A-4
<PAGE> 31
or failure to act under or in connection with the Plan, or any option granted
thereunder, and against all amounts paid in settlement thereof (provided such
settlement shall be approved by independent legal counsel) or paid in
satisfaction of a judgment in any such action, suit or proceeding, to the extent
permitted by Delaware law. Upon the institution of any such action, suit or
proceeding, a director of the Company shall notify the Company in writing,
giving the Company an opportunity, at its own expense, to handle and defend the
same before such director undertakes to handle it on his or her own behalf.
19. FEDERAL INCOME TAX CONSEQUENCES.
Under the present provisions of the IRC, the federal income tax
consequences of participating in the Plan may be summarized as follows: This
summary is of general application only and its application to any individual
will depend on that individual's circumstances. The summary does not address the
effect of state and local income tax laws. The Plan is not subject to the
provisions of Section 401(a) of the IRC or ERISA.
The recipient of an option shall not recognize income upon the grant of the
option, but, upon exercise, generally shall recognize ordinary income in an
amount equal to the difference between the fair market value of the Stock
acquired on the exercise date and the option price. The Company shall be
entitled to a tax deduction at the same time and in the same amount as the
income recognized, provided that it appropriately withholds to the extent
required by applicable law.
If an option is exercised within six months of the date of grant and the
Holder is restricted from selling the Stock acquired upon exercise because of
the restrictions of Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), unless the Holder elects under Section 83(b) of
the IRC to be taxed immediately, he or she shall recognize ordinary income (and
the Company shall be entitled to a deduction) at the end of the restricted
period imposed by Section 16(b) in an amount equal to the difference between the
fair market value of the Stock at that time and the option price.
If the Holder pays the option price entirely in cash for tax purposes, his
or her basis in the shares of Stock received shall be equal to their fair market
value on the exercise date (or the date on which the Section 16(b) period
expires, if applicable), and the holding period for tax purposes shall begin on
the day following the exercise date.
20. GOVERNING LAW.
The Plan shall be governed by the laws of the State of Delaware.
21. EFFECTIVE DATE.
The Plan shall become effective upon the date of its adoption by the Board
and options shall be deemed granted at the close of business that day to all
non-employee directors of the Company serving on the Board at that time, but no
option may be exercised under the Plan unless and until the Plan shall have been
approved by the stockholders of the Company within 12 months after its adoption
by the Board. If the Plan is not so approved by the stockholders, all options
granted hereunder shall be null and void.
22. OVERRIDE.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Administrator fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Administrator.
23. ADDITIONAL INFORMATION.
Additional information regarding the Plan and the Administrator may be
obtained by contacting Ms. Kelly Somoza, Vice President, U.S. Home Corporation,
1800 West Loop South, Houston, Texas 77027, telephone number (713) 877-2391. The
Company shall make available without charge to all Holders, upon
A-5
<PAGE> 32
written or oral request to Ms. Somoza at the address and/or telephone number set
forth above, the following documents, each of which is incorporated by reference
into the Section 10(a) prospectus relating to the Plan:
(1) The Company's prospectus dated June 14, 1993, filed with the Securities
and Exchange Commission (the "Commission") on June 16, 1993 pursuant to
Rule 424(b) promulgated under the Securities Act (the "Prospectus"),
relating to the Company's Amendment No. 2 to Form S-1 Registration
Statement under the Securities Act filed with the Commission on June 11,
1993 (Registration No. 33-60638).
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1993.
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1993.
(4) The Company's Current Report on Form 8-K, dated April 1, 1993.
(5) The Company's Current Report on Form 8-K, dated April 5, 1993.
(6) The Company's Current Report on Form 8-K, dated June 9, 1993.
(7) The Company's Current Report on Form 8-K, dated June 28, 1993.
(8) The description of the Stock contained in the Prospectus, under the
headings "Capital Stock and Class B Warrants -- Common Stock" on page 89
and "Capital Stock and Class B Warrants -- Certificate of Incorporation"
on pages 89-90. For additional information about the Stock, see the
Prospectus, under the headings "Management -- Board of Directors" on
pages 41-42 and "Management -- Director Nomination Procedures" on page
42, which are incorporated by reference into the Section 10(a)
prospectus relating to the Plan.
(9) Information on how the members of the Board are elected, their term of
office, and the manner in which they may be removed from office is
provided in Article SIXTH of the Second Restated Certificate of the
Company, a copy of which is annexed hereto as Exhibit B.
Information concerning the Company will be periodically updated by the
filing of reports by the Company pursuant to the Exchange Act. Such reports were
incorporated by reference to the Section 10(a) prospectus relating to the Plan
and will also be available to Holders upon written or oral request to the
Company's offices as indicated above.
* * * *
Approved by the Board of Directors
on August 19, 1993
A-6
<PAGE> 33
EXHIBIT A
U.S. HOME CORPORATION
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
STOCK OPTION AGREEMENT
OPTION AGREEMENT, dated as of , 199 between U.S. HOME
CORPORATION, a Delaware corporation (the "Company"), and
(the "Holder").
1. PURPOSE.
The purpose of this Stock Option Agreement (this "Agreement") is to set
forth the terms and conditions of the stock option granted to the Holder under
the Non-Employee Directors' Stock Option Plan (the "Plan"). The terms and
conditions (including defined terms) of the Plan are expressly incorporated
herein and made a part of hereof with the same force and effect as if fully set
forth herein. The acceptance by the Holder of the Option (as hereinafter
defined) granted hereby shall constitute acceptance of and agreement with all of
the terms and conditions contained in this Agreement and the Plan.
2. GRANT OF OPTION.
The Company hereby grants to the Holder an option (the "Option") to
purchase all or any part of an aggregate of [5,000] [7,500] [1,000] shares of
the Company's common stock, $.01 par value per share (the "Stock"), at a price
of $ * per share (the "Exercise Price"), subject to adjustment as
herein provided. Such Option is not intended to qualify as an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "IRC").
3. TERM.
Subject to Sections 4, 5 and 13 hereof, the Option shall be exercisable in
whole or in part at any time on or after the date hereof; provided, however,
that the Option shall expire on the date 10 years from the date hereof. Any
exercise shall be accompanied by a written notice to the Company in
substantially the form attached hereto as Schedule 1.
4. TERMINATION OF DIRECTORSHIP.
If, on or after the date the Option is granted, the Holder (i) resigns as a
director of the Company or (ii) is removed as a director of the Company by the
stockholders of the Company, with or without cause, the Holder shall have the
right, not later than the earlier of (A) three months after such resignation or
removal or (B) the termination date of the Option set forth herein, to exercise
the Option, to the extent the right to exercise the Option shall have accrued at
the date of such resignation or removal, except to the extent that the Option
theretofore shall have been exercised.
5. RETIREMENT, DEATH OR DISABILITY.
If the Holder retires at the age of 65 or above, dies, or becomes disabled
(within the meaning of Section 22(e)(3) of the IRC) while a director of the
Company, the Holder, the personal representative of the Holder or the person or
persons to whom the Option shall have been transferred by will or by the laws of
descent and distribution, or the disabled Holder, will have the right, not later
than the earlier of (i) three years from the date of the Holder's retirement,
death or disability or (ii) the termination date of the Option set forth herein,
to exercise the Option to the extent the right to exercise the Option shall have
accrued at the date of such retirement, death or disability, except to the
extent the Option theretofore shall have been exercised.
- - ---------------
* To be determined pursuant to Section 6 of the Stock Option Plan.
A-7
<PAGE> 34
6. TRANSFERABILITY.
The Option shall not be transferable by the Holder other than by will or
the laws of descent and distribution. During the lifetime of the Holder, the
Option shall be exercisable only by such Holder. If the Holder acquires Stock
hereunder, the Holder shall only transfer such Stock in compliance with
applicable federal and state securities laws.
7. PAYMENT OF EXERCISE PRICE.
Payment for shares of Stock issued upon exercise of the Option shall be
paid in full on the date of purchase. Payment shall be made either in cash or in
such other consideration as the Administrator (as defined in the Plan) deems
appropriate. Notwithstanding the foregoing, shares of Stock shall not be issued
upon exercise of the Option unless and until the aggregate amount of Federal,
state and local taxes of any kind required to be withheld, if any, with respect
to such exercise have been paid or satisfied or provision for their payment and
satisfaction has been made upon such terms as the Administrator may prescribe.
8. ADJUSTMENT TO OPTION.
The number of shares of Stock subject to the Option and the Exercise Price
shall be adjusted, as necessary, in accordance with the provisions of Section 12
of the Plan.
9. NO RIGHTS AS STOCKHOLDER.
The Holder shall have no rights as a stockholder with respect to any Stock
covered by the Option until such person has become the holder of record of such
Stock, and, except for stock dividends as provided in Section 12 of the Plan, no
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights in respect
of such Stock for which the record date is prior to the date on which he or she
shall become the holder of record thereof.
10. RIGHT TO REMOVE DIRECTOR.
Nothing contained herein or in any Option Agreement shall restrict the
right of the stockholders of the Company to remove any Holder as director at any
time, with or without cause, or shall constitute or be evidence of any agreement
or understanding, express or implied, that the Company shall retain a director
for any period of time, or at any particular rate of compensation.
11. REPRESENTATIONS.
(a) At the time of any exercise of the Option, the Company may, if it shall
deem it necessary or desirable for any reason, require the Holder to (i) in the
absence of an effective registration statement under the Securities Act of 1933,
as amended, represent in writing to the Company that it is his then intention to
acquire the Stock for investment and not with a view to the distribution thereof
or (ii) postpone the date of exercise until such time as the Company has
available for delivery to the Holder a prospectus meeting the requirements of
all applicable federal or state securities laws.
(b) Holder hereby represents to the Company that, upon the grant of the
Option, Holder will not beneficially own in excess of 4.9 percent of the value
of the equity securities (as defined in Rule 3a11-1 under the Securities
Exchange Act of 1934, as amended) of the Company; provided that for purposes of
this Section 11(b), all outstanding options to acquire equity securities
(including the Option and the Company's Class B Warrants) of the Company are
deemed to be exercised.**
12. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Delaware.
- - ---------------
** Section 11(b) will not be required after June 22, 1995.
A-8
<PAGE> 35
13. STOCKHOLDER APPROVAL.
Any Option granted under the Agreement shall not be exercisable unless or
until the Plan shall have been approved by the stockholders of the Company in
accordance with the provisions of Section 21 of the Plan.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
U.S. HOME CORPORATION
By:
Name:
Title:
Holder
------------------------------------
Signature
Name:
Address:
A-9
<PAGE> 36
SCHEDULE 1
U.S. Home Corporation
1800 West Loop South
Houston, Texas 77252
Attention: Secretary
Re: Notice of Exercise of Stock Option
Dear Sir:
I am the holder of the below-described option to acquire shares of common
stock, $.01 par value per share (the "Common Stock"), of U.S. Home Corporation
(the "Company") granted under the U.S. Home Corporation Non-Employee Directors'
Stock Option Plan:
<TABLE>
<CAPTION>
NUMBER OF SHARES
SUBJECT TO EXERCISE PRICE
DATE OF OPTION OPTION PER SHARE
- - -------------- ---------------- --------------
<S> <C> <C>
</TABLE>
I hereby exercise my option to purchase shares of Common Stock and
tender the purchase price therefor, reserving my right to purchase any remaining
shares of Common Stock subject to the option in accordance with its terms.
In making this purchase, I hereby represent to you as follows:
1. In the absence of an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), I am purchasing
these shares of Common Stock for my own account for investment and without
any present intention of disposing of the shares by public offering or
otherwise.
2. I will not dispose of the shares of Common Stock unless a
registration statement under the Securities Act and applicable state
securities and "blue sky" laws covering the shares of Common Stock is in
effect or, in the opinion of counsel to the Company, an exemption from such
registration is available.
Dated: ,
Very truly yours,
------------------------------------
Signature
Name:
Address:
------------------------------------
A-10
<PAGE> 37
EXHIBIT B
SIXTH: The following provisions will apply to the composition of the Board
of Directors and the election, qualification and removal of directors:
1. Number of Directors. Until the Annual Meeting to be held during 1996,
the number of directors constituting the entire Board of Directors will be 11.
Thereafter, commencing with the Annual Meeting to be held in 1996, the number of
directors constituting the entire Board of Directors will be determined by a
resolution adopted by a majority of the entire Board of Directors, but such
number will not be less than 7 or more than 15. The minimum and maximum number
of directors of the Corporation may be increased or decreased only by amending
this Restated Certificate of Incorporation in accordance with Article ELEVENTH
hereof; provided, that the number of directors will not be reduced at any time
so as to shorten the term of any director at the time in office. Notwithstanding
the foregoing, the provisions of this Article SIXTH, Section 1 shall be subject
to the provisions of Section C, paragraph 3(c) of Article FOURTH hereof.
2. Classes of Directors and Term of Office. Subject to Section C, paragraph
3(c) of Article FOURTH hereof, until the Annual Meeting to be held during 1996,
the directors will be divided, with respect to the time for which they hold
office, into three classes: Class I, Class II and Class III. Class I will
initially consist of Messrs. George A. Poole, Jr., Herve Ripault and James W.
Sight, who will each hold office for a term expiring at the Annual Meeting to be
held during 1994; Class II will initially consist of Messrs. Glen Adams, Steven
L. Gerard, Kenneth J. Hanau, Jr. and Charles A. McKee, who will each hold office
for a term expiring at the Annual Meeting to be held during 1995; and Class III
will initially consist of Messrs. Malcolm T. Hopkins, Jack L. McDonald, Robert
J. Strudler and Isaac Heimbinder, who will each hold office for a term expiring
at the Annual Meeting to be held during 1996. Any person (i) elected to the
Board of Directors at the Annual Meetings to be held during 1994 or 1995 or (ii)
selected to fill any vacancy in the Board of Directors in a Class elected at the
Annual Meetings held during 1994 or 1995 will hold office for a term expiring at
the Annual Meeting held during 1996, provided, however, that any director
elected pursuant to Section C, paragraph 3(c) of Article FOURTH hereof will hold
office in accordance with the terms of such provision. Each director (a) elected
to the Board of Directors at any Annual Meeting, commencing with the Annual
Meeting to be held in 1996 or (b) selected to fill any vacancy in the Board of
Directors after the Annual Meeting to be held during 1996 will hold office for a
term expiring at the next Annual Meeting. Each director will hold office until
such director's successor has been duly elected and qualified.
3. Removal. Notwithstanding any other provisions of this Restated
Certificate of Incorporation or the By-Laws (and notwithstanding the fact that
some lesser percentage may be specified by law), until the Annual Meeting to be
held in 1996, a director may be removed from office only for cause by the vote
of the holders of at least 75 percent of the shares of Capital Stock issued and
outstanding and entitled to vote thereon. For purposes of this paragraph 3 of
this Article SIXTH, "cause" means, with respect to any director, (i) a
director's continuing, willful failure to perform the duties required of his or
her position (other than as a result of total or partial incapacity due to
physical or mental illness), (ii) gross negligence or malfeasance by a director
in the performance of his or her duties or (iii) the conviction or plea of nolo
contendere to a crime by a director that constitutes a felony under the laws of
the United States, or any state thereof, which results or was intended to result
directly or indirectly in gain or personal enrichment by such director at the
expense of the Corporation.
4. Vacancies. Until the Annual Meeting to be held during 1996, any vacancy
in the Board of Directors resulting from any cause, including, without
limitation, the death, resignation or removal of Kenneth J. Hanau, Jr., Charles
A. McKee, Herve Ripault, Robert J. Strudler or Isaac Heimbinder or any of their
successors (collectively, the "Continuing Directors") may be filled only by a
vote of a majority of the Continuing Directors remaining in office or, if there
are no remaining Continuing Directors, by the holders of shares of Capital Stock
having at least a majority of the votes which could be cast by the holders of
all of the issued and outstanding shares of voting Capital Stock. Until the
Annual Meeting to be held during 1996, any vacancy in the Board of Directors
resulting from any cause, including, without limitation, the death, resignation
or removal of Glen Adams, Steven L. Gerard, Malcolm T. Hopkins, Jack L.
McDonald, George A. Poole, Jr. or James W. Sight or any of their successors
(collectively, the "New Directors") may be filled
A-11
<PAGE> 38
only by a vote of a majority of the New Directors remaining in office or, if
there are no remaining New Directors, by the holders of shares of Capital Stock
having at least a majority of the votes which could be cast by the holders of
all of the issued and outstanding shares of voting Capital Stock. If the Board
of Directors is still divided into classes at the time of the filling of such
vacancy, any director so elected will serve until the next election of the class
for which such director has been chosen and until his successor is elected and
qualified. Any individual elected or nominated (in accordance with paragraph 5
of this Article SIXTH) by the New Directors must meet the same criteria with
respect to eligibility for election as a director set forth in Section 6.1 of
the USH Plan as his or her predecessor. Subject to Section C, paragraph 3(c) of
Article FOURTH hereof, subsequent to the Annual Meeting to be held during 1996,
any vacancy in the Board of Directors resulting from any cause, including,
without limitation, death, resignation or removal of a director, may be filled
only by a vote of a majority of the remaining directors, or, if there are no
remaining directors then in office, by the holders of shares of Capital Stock
having at least a majority of the votes which could be cast by the holders of
all of the issued and outstanding shares of voting Capital Stock. Any director
so elected will serve until the next election of directors and until his
successor is elected and qualified.
5. Nomination of Directors. Until the Annual Meeting to elect directors to
be held in 1996, nominations for election to the Board of Directors due to
expiring terms of Continuing Directors and New Directors will be made by a
majority of the remaining Continuing Directors or New Directors, respectively.
Subject to the provisions of Section C, paragraph 3(c) of Article FOURTH hereof,
after the Annual Meeting to be held in 1996, nominations for election to the
Board of Directors due to expiring terms of directors will be made by the
affirmative vote of a majority of the entire Board of Directors.
A-12
<PAGE> 39
EXHIBIT B
U.S. HOME CORPORATION
EMPLOYEE STOCK PAYMENT PLAN
1. PURPOSE.
The purpose of the U.S. Home Corporation Employee Stock Payment Plan (the
"Plan") is to increase the ownership stake of key employees of U.S. Home
Corporation and its subsidiaries or divisions (the "Company") by paying a
percentage of such employees' annual incentive compensation in shares of Stock
(as defined herein) in lieu of cash.
2. ADMINISTRATION.
(a) The board of directors of the Company (the "Board") will (i) administer
the Plan, (ii) establish, subject to the provisions of the Plan, such rules and
regulations as it may deem appropriate for the proper administration of the Plan
and (iii) make such determinations under, and such interpretations of, and take
such steps in connection with, the Plan or the Stock issued thereunder as it may
deem necessary or advisable.
(b) The Board may from time to time appoint a Committee (the "Committee"),
which shall initially be the Compensation and Stock Option Committee of the
Board, which will be comprised of at least three members, all of whom are
disinterested persons (as defined herein), and may delegate to the Committee
full power and authority to take any and all action required or permitted to be
taken by the Board under the Plan, whether or not the power and the authority of
the Committee is hereinafter fully set forth. The members of the Committee may
be appointed from time to time by the Board and serve at the pleasure of the
Board. The Board, if each member is a disinterested director, or the Committee,
as applicable, will hereinafter be referred to as the "Administrator."
(c) For the purposes of this Section 2, a "disinterested person" is a
person who, on a given date, is disinterested within the meaning of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
3. STOCK.
The stock (the "Stock") which is the subject of the Plan will be the shares
of common stock of the Company, $.01 par value per share, whether authorized and
unissued or treasury stock. The total number of shares of Stock which may be
issued under the Plan will not exceed, in the aggregate, 250,000, subject to
adjustment in accordance with the provisions of Section 7 hereof.
4. AWARD OF STOCK.
(a) All employees of the Company, including, but not limited to, corporate
officers, presidents of operations and division presidents (each an "Employee"
and collectively, "Employees"), are eligible to receive Stock in accordance with
the terms hereof.
(b) Up to 25%, which amount may be subject to change from time to time by
the Administrator, of the annual incentive compensation (i.e., all amounts other
than Base Salary (as defined herein)) payable to an Employee pursuant to any
incentive compensation plans or the incentive compensation provisions of any
employment or compensation agreement may be payable in shares of Stock under the
Plan.
(c) (i) Up to 50%, which amount may be subject to change from time to time
by the Administrator, of the annual amount of Stock awarded to an Employee
pursuant to Section 4(b) hereof may, at the sole discretion of the
Administrator, vest not later than two years after the end of the incentive
compensation year applicable to such award of Stock and, unless otherwise
specified by the Administrator, shall not vest and will expire in the event the
Employee is not employed by the Company on or prior to the date on which the
Stock vests with the Employee due to (A) voluntary termination by the Employee
or (B) termination by the
B-1
<PAGE> 40
Company for Cause (as defined herein). Notwithstanding the foregoing, Stock
awarded to an Employee which remains subject to a vesting period hereunder will
immediately vest upon the retirement of such Employee after attaining the age of
65.
(ii) For purposes of the Plan, a voluntary termination by an Employee will
not be deemed to occur in the event such Employee is Constructively Terminated
(as defined herein).
(iii) In the event an Employee dies while in the employ of the Company, all
Stock awarded to such Employee which remains subject to a vesting period
hereunder will immediately vest and be delivered to such Employee's estate as
soon as practicable after such Employee's death.
(iv) For purposes of the Plan:
(A) "Cause" shall mean (1) an Employee's continuing willful failure to
perform his duties with respect to the Company (other than as a result of
total or partial incapacity due to physical or mental illness), (2) gross
negligence or malfeasance by an Employee in the performance of his duties
with respect to the Company, (3) an act or acts on an Employee's part
constituting a felony under the laws of the United States or any state
thereof which results or was intended to result directly or indirectly in
gain or personal enrichment by such Employee at the expense of the Company
or (4) any other circumstances set forth in an employment agreement between
the Company and such Employee which would constitute grounds for the
Company to terminate the employment of such Employee for cause (as defined
in the applicable employment agreement).
(B) "Constructively Terminated" shall mean (1) a reduction in an
amount equal to or greater than 15 percent of an Employee's Base Salary (as
defined herein), (2) a material reduction in an Employee's job function,
duties or responsibilities or (3) a required relocation of an Employee of
more than 50 miles from such Employee's current job location; provided,
however, that the employment with the Company or its divisions or
subsidiaries of a President of Operations will not be deemed to be
Constructively Terminated in the event he or she is required to be a
Division Chairman or Division President with the Company or its divisions
or subsidiaries and has job functions, duties or responsibilities of a
Division Chairman or Division President and/or is required to relocate in
connection with such change in position; provided, further, that the
employment with the Company or its divisions or subsidiaries of a Division
Chairman or Division President will not be deemed to be Constructively
Terminated in the event he or she is required to be a Division Chairman or
Division President of a division other than the division he or she is
currently employed by and has job functions, duties or responsibilities of
a Division Chairman or Division President and/or is required to relocate in
connection with such change in position; provided, further, that the
employment of an Employee will not be deemed Constructively Terminated
unless such Employee actually terminates his or her employment with the
Company within 60 days after the occurrence of an event specified in clause
(1), (2) or (3) above.
(C) "Base Salary" shall mean an amount equal to an Employee's maximum
annual base salary in effect at any time after the effective date of the
Plan, excluding any incentive compensation or bonus payable or paid to an
Employee.
(d) (i) All Stock awarded to Employees hereunder but not subject to vesting
pursuant to Section 4(c) hereof shall be delivered to such Employees within 30
days after the determination of the price of the Stock pursuant to Section 5
hereof.
(ii) Subject to Section 4(c) hereof, all Stock awarded to Employees
hereunder which is subject to a vesting period hereunder shall be delivered to
such Employees within 31 days after the expiration of such vesting period.
(e) In the event the Company is subject to an extraordinary corporate
transaction, including, without limitation, a merger, consolidation or tender
offer, the Administrator shall have the right, in its sole discretion, to
accelerate the vesting period of any or all Stock subject to vesting hereunder.
B-2
<PAGE> 41
5. PRICE AND VALUATION.
(a) The Stock will be issued to Employees in consideration of services
rendered to the Company by such Employees as reflected in any incentive
compensation plans or the incentive compensation provisions of any employment or
compensation agreement.
(b) For purposes of determining the number of shares of Stock to be issued
to an Employee hereunder in lieu of cash compensation, the Administrator shall
divide the amount of cash that would otherwise be distributed to such Employee
by:
(i) with respect to the incentive compensation plans of the Company or
incentive agreements which are based on the financial results of the
Company's fiscal year, the average closing price of the Stock on the New
York Stock Exchange (the "NYSE") for the 10 consecutive trading days
immediately following the date on which the Company releases such financial
results for such fiscal year; or
(ii) with respect to any other incentive compensation plans of the
Company or incentive agreements, the average closing price of the Stock on
the NYSE for the later to occur of the (A) last 10 trading days of the
month immediately following the conclusion of the specified period for such
incentive compensation program and (B) 10 consecutive trading days
immediately following the date on which the Company releases its financial
results for its most recent fiscal year.
(c) The closing price of the Stock, as of any particular day, will be as
reported in The Wall Street Journal; provided, however, that if the Stock is not
listed on the NYSE on any applicable day, the closing price for such day will be
not less than the fair market value of the Stock on such day, as determined by
the Administrator based on such empirical evidence as it deems to be necessary
under the circumstances.
6. TERM AND EFFECTIVE DATE.
The Plan will become effective upon (i) approval by the Board, and (ii)
solely with respect to Employees subject to Section 16 of the Exchange Act,
approval by the affirmative vote of a majority of the shares of voting capital
stock of the Company present or represented and entitled to vote at the 1994
annual meeting of the Company's stockholders. When so approved, the Plan shall
be deemed to have been in effect as of January 1, 1994 and shall terminate on
December 31, 1998.
7. STOCK ADJUSTMENTS.
(a) The total amount of Stock reserved and issuable under the Plan and
Stock awarded but not yet vested will be appropriately adjusted for any increase
or decrease in the number of outstanding shares of Stock resulting from payment
of a stock dividend on the Stock, a subdivision or combination of the Stock, a
reclassification of the Stock, or a consolidation or a merger in which the
Company will be the surviving corporation.
(b) After any merger of one or more corporations into the Company in which
the Company will not be the surviving corporation, or after any consolidation of
the Company and one or more other corporations, each Employee who is entitled to
Stock hereunder will be entitled to receive, in lieu of the number of shares of
Stock as to which such Employee was previously entitled, the number and class of
shares of stock or other securities or other consideration to which such
Employee would have been entitled pursuant to the terms of the applicable
agreement of merger or consolidation if at the time of such merger or
consolidation such Employee had been a holder of record of a number of shares of
Stock equal to the number of shares for which such Employee was then entitled to
receive subject to vesting. Comparable rights will accrue to each Employee in
the event of successive mergers or consolidations of the character described
above.
(c) The adjustments described in this Section 7 and the manner of
application of the foregoing provisions will be determined by the Administrator
in its sole discretion. Any such adjustment may provide for the elimination of
fractional shares.
B-3
<PAGE> 42
8. TRANSFERABILITY.
An Employee who acquires Stock hereunder will only transfer such Stock in
compliance with applicable federal and state securities laws. Employees who are
affiliates of the Company may generally dispose of their shares in accordance
with Rule 144 promulgated under the Securities Act of 1933, as amended.
Employees may not transfer or assign any interest in any Stock awarded hereunder
until such Stock is vested with such Employee other than by will or the laws of
descent and distribution.
9. RIGHTS AS A STOCKHOLDER.
Any Employee entitled to receive Stock hereunder will have no rights as a
stockholder with respect to any share of Stock until such Employee has become
the holder of record of such share of Stock upon vesting, and, except for stock
dividends as provided in Section 7 hereof, no adjustment will be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights in respect of such Stock for which
the record date is prior to the date on which such Employee will become the
holder of record thereof.
10. INVESTMENT PURPOSE.
At the time of issuance of any Stock, the Company may, if it will deem it
necessary or desirable for any reason, require an Employee to represent in
writing to the Company that (a) it is such Employee's then intention to acquire
the Stock for investment purposes and not with a view to the distribution
thereof and/or (b) upon acquisition of the Stock, the Employee will not
beneficially own in excess of 4.9 percent of the value of the equity securities
(as defined in Rule 3a11-1 under the Exchange Act) of the Company; provided that
for purposes of this Section 10(b), all outstanding options and convertible
securities to acquire Stock shall be deemed to be exercised or converted;
provided, further, that this Section 10(b) shall be inoperative after June 21,
1995.
11. RIGHT TO TERMINATE EMPLOYMENT.
Nothing contained herein will restrict the right of the Company to
terminate the employment of any Employee at any time.
12. FINALITY OF DETERMINATIONS.
Each determination, interpretation, or other action made or taken pursuant
to the provisions of the Plan by the Administrator will be final and be binding
and conclusive for all purposes.
13. SUBSIDIARY AND PARENT CORPORATIONS.
Unless the context requires otherwise, references under the Plan to the
Company will be deemed to include any subsidiary corporations and parent
corporations of the Company, as those terms are defined in Section 425 of the
Internal Revenue Code, as amended.
14. GOVERNING LAW.
The Plan will be governed by the laws of the State of Delaware.
15. AMENDMENT AND TERMINATION.
The Administrator may at any time terminate, amend or modify the Plan in
any respect it deems suitable; provided, however, that, solely with respect to
persons subject to Section 16 of the Exchange Act, no such action of the
Administrator, without the approval of the stockholders of the Company, may (i)
materially increase the benefits accruing to employees eligible to receive Stock
under the Plan, (ii) materially increase the total amount of Stock which may be
awarded under the Plan or (iii) materially modify the requirements for
participation in the Plan; provided, further, that no amendment, modification or
termination of the Plan may in any manner affect (A) any Stock (whether vested
or not) theretofore awarded under the Plan without
B-4
<PAGE> 43
the consent of the Employee to whom Stock has been awarded or (B) modify the
award of Stock to the Employee designated by the Administrator.
16. OVERRIDE.
(a) With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Administrator fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Administrator.
(b) All transactions pursuant to terms of the Plan, including, without
limitation, awards and vesting of Stock, shall only be effective at such time as
counsel to the Company shall have determined that such transaction will not
violate federal or state securities or other laws. The Administrator may, in its
sole discretion, defer the effectiveness of such transaction to pursue whatever
actions may be required to ensure compliance with such federal or state
securities or other laws.
B-5
<PAGE> 44
- - --------------------------------------------------------------------------------
FRONT U.S. HOME CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Strudler and Isaac
Heimbinder, and each of them, with full power of substitution, as
proxies of the undersigned to vote all of the shares of Capital Stock
of U.S. Home Corporation the undersigned is entitled to vote, with all
powers the undersigned would possess if personally present, at the
Annual Meeting of Stockholders of U.S. Home Corporation, a Delaware
corporation, to be held at the Omni Hotel, Four Riverway, Houston,
Texas, at 10:00 a.m., local time, on Wednesday, April 6, 1994, and at
any adjournment thereof on the matters described on the reverse hereof
and, in their discretion, on such other matters as may properly come
before the meeting.
UNLESS AUTHORITY TO DO SO IS WITHHELD BY APPROPRIATE DESIGNATION,
THIS PROXY SHALL BE DEEMED TO HAVE GRANTED AUTHORITY TO VOTE FOR THE
ELECTION OF ALL CLASS I DIRECTORS AS SET FORTH IN THE PROXY STATEMENT,
AND WILL BE SO VOTED. IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSALS 2, 3, 4 AND 5.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF RETURNED IN THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED
STATES.
Date:
----------------------------
Signature
----------------------------
Signature
Please sign exactly as name
appears on this Proxy. If
shares are registered in
more than one name, all such
persons should sign this
Proxy. A corporation should
sign in its full corporate
name by a duly authorized
officer, stating his title.
Trustees, guardians,
executors and administrators
should sign in their
official capacity giving
their full title as such. If
a partnership, please sign
in partnership name by
authorized person.
- - --------------------------------------------------------------------------------
<PAGE> 45
- - --------------------------------------------------------------------------------
BACK
1. ELECTION OF CLASS I DIRECTORS
/ / FOR / / WITHHELD Nominees: George A. Poole,
Jr.; Herve Ripault; James W. Sight
For, except vote witheld from the following nominee(s):
--------------------------------------------------------------------
2. Approval of Non-Employee Directors' Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. Approval of the Employee Stock Payment Plan.
/ / FOR / / AGAINST / / ABSTAIN
4. Amendment to the Second Restated Certificate of Incorporation to
eliminate a prohibition against issuance of non-voting equity
securities.
/ / FOR / / AGAINST / / ABSTAIN
5. Ratification of Arthur Andersen & Co. as auditors.
/ / FOR / / AGAINST / / ABSTAIN
- - --------------------------------------------------------------------------------
