<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
U. S. Home Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rules 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
U.S. HOME CORPORATION
1800 WEST LOOP SOUTH
P. O. BOX 2863
HOUSTON, TEXAS 77252-2863
[US HOME LOGO]
NOTICE OF 1995 ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
March 20, 1995
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 Wednesday, April 26, 1995, 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 Company's Corporate Officers and
Presidents of Operations Restricted Stock Plan, a long-term incentive and
performance-based program. 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 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,
/s/ ROBERT J. STRUDLER
_________________________________
Robert J. Strudler
Chairman and Chief
Executive Officer
<PAGE> 3
[US HOME LOGO]
------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 1995
------------------------------------
The Annual Meeting of the Stockholders of U.S. Home Corporation (the
"Company") will be held on Wednesday, April 26, 1995, 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 II Directors.
2. Approval of the Company's Corporate Officers and Presidents of
Operations Restricted Stock Plan.
3. Ratification of the appointment of Arthur Andersen LLP as auditors of
the Company for the fiscal year ending December 31, 1995.
4. 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 March 1, 1995 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 20, 1995
<PAGE> 4
U.S. HOME CORPORATION
1800 WEST LOOP SOUTH
P. O. BOX 2863
HOUSTON, TEXAS 77252-2863
------------------------------------
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 March 1, 1995 as the
record date (the "Record Date") for the determination of stockholders of the
Company ("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 11,073,848 shares of Common
Stock and 369,587 shares of Convertible Preferred Stock, or an aggregate of
11,443,435 shares of Stock, the holders of which are entitled to one vote per
share. On all proposals to be submitted to the Stockholders at the Meeting, the
holders of the Common Stock and Convertible Preferred Stock will vote together
as a single class.
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. With respect to Proposal 1, unless
authority to vote for all nominees for Class II Director or any individual
nominee is withheld, all the shares of Stock represented by the Proxy will be
voted for the election as Class II 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, 1994,
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 20, 1995.
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 II DIRECTORS
(PROPOSAL 1)
The Company's Second Restated Certificate of Incorporation (the
"Certificate of Incorporation"), which became effective on June 21, 1993 when
the Company 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 on the following page who 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, if elected at the Meeting, will
serve until the annual meeting of Stockholders in 1996 and until their
successors are elected and qualified. Class III consists of the four members
named on the following page 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, the terms of all directors will
expire, classification of directors will terminate and, commencing with such
meeting, all directors thereafter 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.
The following persons comprising all of the Class II directors ("Class II
Directors") have been nominated for reelection at the Meeting to serve until the
annual meeting of Stockholders in 1996, and until their successors are elected
and qualified:
Glen Adams
Steven L. Gerard
Kenneth J. Hanau, Jr.
Charles A. McKee
Unless authority to vote on the election of all nominees for Class II
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 II 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 II 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 BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE CLASS II DIRECTOR
NOMINEES NAMED HEREIN, AND IT IS INTENDED THAT PROXIES NOT MARKED TO THE
CONTRARY WILL BE SO VOTED.
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 II -- 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>
Glen Adams (56 yrs.) Chairman, President and Chief Executive Conflict of Interest
Officer of Southmark Corporation since August 1990(2)....... 1993 and Nominating
Steven L. Gerard (49 yrs.) Chairman and Chief Executive Compensation and
Officer of Triangle Wire & Cable Inc. since September Stock Option, and
1992(3)..................................................... 1993 Finance
Audit, Compensation
Kenneth J. Hanau, Jr. (68 yrs.) Chairman of K&H Corrugated and Stock Option,
Case Corporation (4)........................................ 1976 and Executive
Audit and
Charles A. McKee (76 yrs.) Former Chairman and Chief Executive Compensation and
Officer of Electrolux Corporation(5)........................ 1978 Stock Option
</TABLE>
INFORMATION ON OTHER DIRECTORS
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>
Audit and
George A. Poole, Jr. (63 yrs.) Private investor(6)............ 1993 Nominating
Herve Ripault (54 yrs.) Associate of Optigestiom S.A., a Finance and
French fund management company since November 1991(7)....... 1982 Nominating
Compensation and
Stock Option, Conflict
of Interest
James W. Sight (39 yrs.) Private investor(8).................. 1993 and Nominating
</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 (51 yrs.) President and Chief Operating Conflict of Interest,
Officer of the Company(9)................................... 1984 Executive and Finance
Malcolm T. Hopkins (66 yrs.) Private investor and a director Audit and
of several companies(10).................................... 1993 Executive
Jack L. McDonald (61 yrs.) Private investor and Conflict of Interest
consultant(11).............................................. 1993 and Finance
Robert J. Strudler (52 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. 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.
(3) 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 DeepTech Industries, Inc.
(4) Mr. Hanau is Chairman of K&H Corrugated Case Corporation, a manufacturer of
corrugated packaging materials, located in Walden, New York, and has been
associated with that company for more than five years. Mr. Hanau is also a
director of Cosco Industries and Tinque, Brown, Inc.
(5) Mr. McKee retired as Chairman and Chief Executive Officer of Electrolux
Corporation, a manufacturer of vacuum cleaners and floor care products,
located in 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 MAC Corp.
(6) Mr. Poole has been a private investor for more than the past five years.
Mr. Poole serves as a director of Spreckels Industries, Inc., Bucyrus-Erie
Company and Rock Island Foods, Inc.
(7) 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.
(8) 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. Mr. Sight is also a director of United Recycling Industries.
(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.
(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
4
<PAGE> 8
Centers, Inc., The Metropolitan Series Fund, Inc., MetLife Portfolios, Inc.
and EMCOR Group, 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, 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.,
Triangle Pacific, Inc. and American Homestar Corp.
(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.
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, the Employee Stock Payment Plan,
including the determination of the amount, allocation and vesting of shares,
and, if approved by the Stockholders at the Meeting, the Corporate Officers and
Presidents of Operations Restricted Stock Plan (See Proposal 2).
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, the Certificate of Incorporation and the
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 the 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 also administers the Non-Employee Directors' Stock Option Plan and the
Retirement Plan for Non-Employee
5
<PAGE> 9
Directors. See "Director Compensation." Subject to the Certificate of
Incorporation and the 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 1994, there were a total of 6 meetings of the Board, 2 meetings of
the Audit Committee, 4 meetings of the Compensation Committee, 4 meetings of the
Finance Committee and 3 meetings of the Nominating Committee. No meetings of the
Executive Committee or the Conflict of Interest Committee were held during 1994.
The Company's normal practice is that committee meetings are held the day
preceding the regular meetings of the Board. All of the directors attended at
least 75 percent of the Board meetings and meetings of committees of which they
were members that were held during 1994.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth a summary of annual and long-term
compensation (for 1994, 1993 and 1992) 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,
1994, was in excess of $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ------------------------- -------
(F) (G)
(E) RESTRICTED SECURITIES (H) (I)
(A) (C) (D) OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND (B) SALARY BONUS COMPENSATION AWARDS OPTIONS/SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($)(1) ($)(2) ($) ($)(3) (#)(4) ($) ($)(5)(6)(7)
- --------------------------- ---- -------- -------- ------------- ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert J. Strudler; 1994 $400,000 $440,000 $-- $ -- 20,000 $-- $ 5,010(8)
Chairman and Chief 1993 368,225 568,225 -- -- 45,000 -- 845,048
Executive Officer 1992 368,225 135,135 -- -- -- -- 4,943
Isaac Heimbinder; 1994 $390,000 $430,000 $-- $ -- 20,000 $-- $ 5,010(9)
President and Chief 1993 360,000 560,000 -- -- 45,000 -- 845,048
Operating Officer 1992 339,900 135,135 -- -- -- -- 4,943
Chester P. Sadowski; 1994 $152,000 $ 91,875 $-- $ 13,125 5,000 $-- $ 4,728(10)
Vice President -- 1993 145,000 75,000 -- -- 10,000 -- 213,900
Controller and Chief 1992 139,050 60,000 -- -- -- -- 3,312
Accounting Officer
Richard G. Slaughter; 1994 $152,000 $ 91,875 $-- $ 13,125 5,000 $-- $ 4,856(11)
Vice President -- 1993 145,000 75,000 -- -- 10,000 -- 214,028
Planning and Secretary 1992 139,050 60,000 -- -- -- -- 3,440
Craig M. Johnson; 1994 $145,000 $ 91,875 $-- $ 13,125 5,000 $-- $ 4,417(12)
Vice President -- 1993 135,000 75,000 -- -- 10,000 -- $318,545
Community Development 1992 122,777 62,500 -- -- -- -- 2,863
</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 1994
Corporate Officers' Incentive Compensation Program (the "1994 Program"),
the Board, on the recommendation of the Compensation Committee, approved,
on December 8, 1994, payment of incentive compensation to Messrs. Sadowski,
Slaughter, and Johnson for services rendered in 1994. Pursuant to the 1994
Program and the Company's Employee Stock Payment Plan (the "Employee Stock
Plan") (see footnote (3) to the table for a description), 25% of such
incentive compensation is payable in Common Stock, one-half ($13,125) of
which vests immediately and the remainder (reflected in column (f) above)
of which vests on December 31, 1996. 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). Messrs. Strudler and Heimbinder elected to
receive 25% of such incentive compensation for the year ended December 31,
1994 in shares of Common Stock under the Employee Stock Plan, all of which
vests immediately. In addition, the Board, on the recommendation of the
Compensation Committee, approved on December 8, 1994 payment of
supplemental incentive compensation of $40,000 to each of Messrs. Strudler
and Heimbinder for their contribution to the Company's results during 1994
in several significant areas. See "Report of Compensation and Stock Option
Committee on Executive Compensation." The amounts of such contractual and
supplemental incentive bonuses, including the dollar value of the Common
Stock, 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." Pursuant to the Employee Stock Plan, the
number of shares of Common Stock issued to each of the executives listed in
the table was calculated by dividing (x) the portion of their incentive
compensation payable in Common Stock by (y) $17.988, the
7
<PAGE> 11
average of the closing prices of the Common Stock on the New York Stock
Exchange ("NYSE") for the 10 trading days immediately following release by
the Company on February 8, 1995 of its financial results for the fiscal
year ended December 31, 1994.
(3) Amount shown reflects the dollar value of Common Stock to be issued to
Messrs. Sadowski, Slaughter and Johnson upon vesting on December 31, 1996
pursuant to the 1994 Program and the Employee Stock Plan. Pursuant to the
Employee Stock Plan, which was adopted by the Board on December 10, 1993
and by the Stockholders at the 1994 Annual Meeting of Stockholders, up to
25% of the annual incentive compensation payable to each employee of the
Company pursuant to the Company's incentive compensation programs may be
payable in Common Stock, up to 50% of which may vest not later than two
years from the end of the applicable incentive compensation year. As of
December 31, 1994, Messrs. Sadowski, Slaughter and Johnson had not received
any other awards of restricted stock from the Company. No dividends on the
shares of Common Stock subject to vesting will be paid prior to vesting.
The number of shares of Common Stock to be issued was determined pursuant
to the calculations described in the last sentence of footnote (2) to the
table.
(4) On December 8, 1994, pursuant to the Company's 1993 Employees' Stock Option
Plan, options were granted to acquire shares of Common Stock to certain
officers and other employees of the Company. See "Executive
Compensation -- Stock Options."
(5) On June 21, 1993, in accordance with the Company's Chapter 11 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 for 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) The amounts shown for 1993 are comprised of the following: (i) market value
of the Common Stock issued pursuant to the Company's Amortizing Incentive
Plan; (ii) contributions to the Company's profit sharing plan; and (iii)
premium for universal life insurance policy with a cash surrender value.
(8) Amount shown is comprised of the following: (i) contributions to the
Company's profit sharing plan ($3,000); (ii) 401(k) contributions by the
Company ($500); and (iii) premium for universal life insurance policy with
a cash surrender value ($1,510).
(9) Amount shown is comprised of the following: (i) contributions to the
Company's profit sharing plan ($3,000); (ii) 401(k) contributions by the
Company ($500); and (iii) premium for universal life insurance policy with
a cash surrender value ($1,510).
(10) Amount shown is comprised of the following: (i) contributions to the
Company's profit sharing plan ($3,000); (ii) 401(k) contributions by the
Company ($500); and (iii) premium for universal life insurance policy with
a cash surrender value ($1,228).
(11) Amount shown is comprised of the following: (i) contributions to the
Company's profit sharing plan ($3,000); (ii) 401(k) contributions by the
Company ($500); and (iii) premium for universal life insurance policy with
a cash surrender value ($1,356).
(12) Amount shown is comprised of the following: (i) contributions to the
Company's profit sharing plan ($2,892); (ii) 401(k) contributions by the
Company ($500); and (iii) 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, 1994 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,
1994, was in excess of $100,000:
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------- VALUE AT ASSUMED
(C) ANNUAL
(B) ---------- RATES OF STOCK PRICE
------------ % OF TOTAL APPRECIATION
NUMBER OF OPTIONS/ (D) FOR OPTION TERM
SECURITIES SARS -------- --------------------
UNDERLYING GRANTED TO EXERCISE (E)
(A) OPTIONS/ EMPLOYEES OR BASE ---------- (F) (G)
- ---------------------------- SARS GRANTED IN FISCAL PRICE EXPIRATION -------- --------
NAME (#) (1) YEAR ($/SH) DATE 5% ($) 10% ($)
- ---------------------------- ------------ ---------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Strudler.......... 20,000(2) 21.05% $ 15.125 12/8/04 $190,200 $482,100
Isaac Heimbinder............ 20,000(2) 21.05% $ 15.125 12/8/04 $190,200 $482,100
Chester P. Sadowski......... 5,000(2) 5.26% $ 15.125 12/8/04 $ 47,600 $120,500
Richard G. Slaughter........ 5,000(2) 5.26% $ 15.125 12/8/04 $ 47,600 $120,500
Craig M. Johnson............ 5,000(2) 5.26% $ 15.125 12/8/04 $ 47,600 $120,500
</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 Chapter 11 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.
Pursuant to the Company's 1993 Employee Stock Option Plan, the exercise
price for any Incentive Stock Option and/or a nonqualified stock option
granted after August 20, 1993 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
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 December 8, 1994, pursuant to the Company's 1993 Employees' Stock
Option Plan, options to acquire 95,000 shares of Common Stock were granted
to certain employees of the Company, including certain officers.
9
<PAGE> 13
The following table contains information concerning the exercise of stock
options during the fiscal year ended December 31, 1994, and the fiscal year-end
value of unexercised options by 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, 1994, was in excess of $100,000:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(D) (E)
------------------------- -------------------------
(C) NUMBER OF SECURITIES VALUE OF UNEXERCISED
(B) -------- UNDERLYING UNEXERCISED IN-THE-MONEY
--------------- VALUE OPTIONS/SARS OPTIONS/SARS
(A) SHARES ACQUIRED REALIZED AT FY-END (#) AT FY-END ($)
NAME ON EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------------- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert J. Strudler............. -- -- 15,000/50,000 $ 0/$20,000
Isaac Heimbinder............... -- -- 15,000/50,000 $ 0/$20,000
Chester P. Sadowski............ -- -- 3,333/11,667 $ 0/$ 5,000
Richard G. Slaughter........... -- -- 3,333/11,667 $ 0/$ 5,000
Craig M. Johnson............... -- -- 3,333/11,667 $ 0/$ 5,000
</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) June 21, 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 1994,
Messrs. Strudler and Heimbinder were paid annual base salaries of $400,000 and
$390,000, 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 1994 rates of $137,600
and $132,100 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. However,
Messrs. Strudler and Heimbinder agreed to limit such retirement benefit to the
amount based on their 1994 base compensation and the Board is presently
reviewing the appropriateness of such limitation. 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 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.
10
<PAGE> 14
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, each will serve as a consultant to
the Company and be compensated at the 1994 rate of $137,600 (for Mr. Strudler)
or $132,100 (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 when Mr.
Strudler or Mr. Heimbinder attains the age of 58, respectively, or, at their
respective elections, on or after the first day of any month following May 11,
1996.
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 (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.
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.
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
At the 1994 Annual Meeting, the Stockholders approved the Non-Employee
Directors' Stock Option Plan ("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 is administered by the
Nominating Committee.
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.
11
<PAGE> 15
No option may be exercised more than 10 years after the date such option is
granted. Furthermore, in the event of the resignation or 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.
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 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.
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.
Additionally, each of such individuals was granted an Annual Stock Option Grant,
at an exercise price of $22.71 per share, immediately following the 1994 Annual
Meeting of Stockholders.
RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
On October 13, 1994, the Board adopted the Retirement Plan for Non-Employee
Directors (the "Directors' Retirement Plan") for the purpose of attracting and
retaining qualified persons for service as members of the Board. The Directors'
Retirement Plan is administered by the Nominating Committee.
To be eligible for participation in the Directors' Retirement Plan, a
director must have served as a non-employee director of the Company for five
full calendar years (which need not be consecutive) since January 1, 1985
whether or not such director is a director upon retirement.
An eligible director's annual "Normal Retirement Benefit" under the
Directors' Retirement Plan equals 100% of such eligible director's "Base
Retainer" (defined as regular annual active service retainer for service as a
member of the Board in effect on the date of retirement, exclusive of any other
fees for serving on committees of the Board, attending meetings of the Board or
committees thereof or otherwise paid for services rendered to the Company)
payable in equal monthly installments and continuing for the number of full
months of service as a non-employee director from January 1, 1985 to the month
prior to retirement (whether or not after age 65), less a certain number of
months in the case of directors who received accrued retirement
12
<PAGE> 16
benefits in a lump sum payment upon termination as of December 31, 1988 of the
Non-Employee Directors' Retirement Plan in effect as of January 1, 1985.
An eligible director who elects to retire from the Board prior to age 65
may elect to receive an early retirement benefit commencing at age 55 in an
amount equal to his Normal Retirement Benefit minus 5% for each year prior to
age 65 that the director elects early retirement, but not more than a 50%
reduction in Normal Retirement Benefits.
An eligible director may elect to receive a lump sum payment, in lieu of
his Normal Retirement Benefit or early retirement benefits, payable at the time
when his benefit payments would otherwise commence, in an amount equal to the
present value of the benefit payments to be received.
Upon commencement of periodic benefit payments, such payments will be
adjusted on January 1 of each year for increases in the cost of living in the
preceding year, as measured by the Consumer Price Index -- U.S. City Average, as
published by the Bureau of Labor Statistics of the United States Department of
Labor.
Normal Retirement Benefit payments commence in the month following the
eligible director's retirement or 65th birthday, whichever is later. Early
retirement benefit payments commence in the month following the eligible
director's early retirement or 55th birthday, whichever is later.
13
<PAGE> 17
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 Compensation Committee 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, the granting of stock options and the payment of universal
life insurance premiums, as well as medical benefits, 401(k) contributions 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
Compensation 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 comparatively-sized companies by
reviewing a composite compensation survey for residential builders, as well as
public filings of various residential builders. Such survey and filings included
various companies which were in the Company's peer group. See "Stock Performance
Graph." 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 Program, 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.
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
14
<PAGE> 18
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.
Restricted Stock Plan. If approved by the Stockholders at the Meeting, the
Company will provide long-term incentives through grants of restricted stock to
key employees, including officers and presidents of operations. See "Corporate
Officers and Presidents of Operations Restricted Stock Plan."
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 ended
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 respective
Employment Agreements, which have been in effect since 1986, as amended from
time to time. Mr. Strudler's base salary for 1995 is $425,000 and Mr.
Heimbinder's base salary for 1995 is $415,000. 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
as set forth in the composite compensation survey for residential builders
employed by the Compensation Committee in determining the other executive
officers compensation and public filings of various residential builders (some
of which were included in the Company's peer group), and the Company's
performance during 1994. The compensation framework of the Employment Agreements
is consistent with the Compensation Committee's policy to provide incentives to
executive officers with rewards related to the Company's profitability and to
recognize executive officer's individual contributions to the Company.
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 1994, the incentive bonus paid to Mr. Strudler was $400,000 and
the incentive bonus paid to Mr. Heimbinder was $390,000 (25% of which, pursuant
to the irrevocable election of each of Messrs. Strudler and Heimbinder, is
payable in shares of Common Stock). In addition, the Board awarded Messrs.
Strudler and Heimbinder an additional $40,000 each as a supplemental bonus. 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 1994 and their contribution to the Company's
results during 1994, including the retention of a strong and experienced
management group and the Company's sustained profitability. These and other
actions strengthened 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
15
<PAGE> 19
STOCK PERFORMANCE GRAPH
The following graph compares on a cumulative basis, the yearly percentage
change during the five years ended December 31, 1994 in (i) the total
Stockholder return on the Common Stock with (ii) the total return on the
Standard & Poor Composite Stock Price Index and (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, 1989 for preparation
of the graph.
<TABLE>
<CAPTION>
Measurement Period U.S. Home
(Fiscal Year Covered) Corporation S&P 500 Peer Group
<S> <C> <C> <C>
1989 100 100 100
1990 27.08 93.44 70.88
1991 20.82 118.02 141.41
1992 50.00 123.29 162.55
6/21/93 125.03 126.26 166.62
6/22/93 100 100 100
12/31/93 126.81 104.60 123.13
1994 76.81 102.99 75.84
</TABLE>
The first period shown on the graph (left of the double vertical bar) is
from December 31, 1989 to June 21, 1993 and includes the Company's shares of
common stock, $0.10 par value per share, that were outstanding and traded prior
to the effective date of the Company's Chapter 11 plan of reorganization.
Pursuant to the provisions of the Company's Chapter 11 plan of reorganization,
all shares of such common stock were cancelled on June 21, 1993 and .077480
shares of Common Stock and Class B Warrants to purchase .042036 shares of Common
Stock 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, 1994 and includes the Company's current
shares of Common Stock. The graph does not include the value of the Class B
Warrants.
The peer group index is composed of the following homebuilding companies:
Centex Corporation, Continental Homes Holding Corp., Del Webb Corp., Hovnanian
Enterprises, Inc., Kaufman & Broad Home Corporation, Lennar Corporation, MDC
Holdings, Inc., Pulte Corporation, Ryland Group, Inc., Standard Pacific Corp.
and UDC Homes, Inc.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during the year ended December
31, 1994 were Messrs. Gerard, Hanau, McKee and Sight. No such person was an
officer or employee of the Company during the year ended December 31, 1994 or
was formerly an officer of the Company.
16
<PAGE> 20
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 March 1, 1995, 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)(4) OF CLASS SHARES OF CLASS
- --------------------------------------- ------------------ -------- --------- --------
<S> <C> <C> <C> <C>
Glen Adams............................. 6,000 * -- --
Steven L. Gerard....................... 6,000 * -- --
Kenneth J. Hanau, Jr................... 8,790 * -- --
Isaac Heimbinder....................... 68,921(5) * 733(5) *
Malcolm T. Hopkins..................... 8,000 * -- --
Jack L. McDonald....................... 6,000 * -- --
Charles A. McKee....................... 10,535(6) * -- --
George A. Poole, Jr.................... 8,000(7) * -- --
Herve Ripault.......................... 9,070 * 295 *
James W. Sight......................... 6,000 * -- --
Robert J. Strudler..................... 67,757 * -- --
Craig M. Johnson....................... 14,164 * -- --
Chester P. Sadowski.................... 11,230 * -- --
Richard G. Slaughter................... 10,064 * -- --
All directors and executive officers of
the Company as a group............... 262,775 * 1,637 *
FMR Corp.
82 Devonshire Street
Boston, MA 02109(8).................. 1,572,151 14.20% 45,000 12.18%
Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, California 94404(9)....... 763,345 6.89% 97,183 26.30%
Loomis, Sayles & Company, L.P.
One Financial Center, 34th Floor
Boston, MA 02111(10)................. 1,821,332 16.45% -- --
MacKay-Shields Financial Corporation
9 West 57th Street
New York, New York 10019(11)......... 631,700 5.70% 100,000 27.06%
The Travelers Inc.
65 East 55th Street
New York, New York 10022(12)......... 1,257,322 11.35% -- --
</TABLE>
- ---------------
* Less than 1%.
(1) Includes options which are fully exercisable pursuant to the Company's 1993
Employees' Stock Option Plan for the following number of shares of Common
Stock: Mr. Heimbinder -- 15,000; Mr. Strudler -- 15,000; Mr.
Johnson -- 3,334; Mr. Sadowski -- 3,334; Mr. Slaughter -- 3,334; and all
executive officers of the Company as a group -- 48,003.
(2) Includes shares of Common Stock issued in connection with the Employee
Stock Plan. See "Executive Compensation -- Summary Compensation Table." The
number of shares of Common Stock issued pursuant to the Employee Stock Plan
for 1994 incentive compensation are: Mr. Heimbinder -- 5,420; Mr.
Strudler -- 5,559; Mr. Johnson -- 730; Mr. Sadowski -- 730; Mr.
Slaughter -- 730; and all
17
<PAGE> 21
executive officers of the Company as a group -- 14,803. Messrs. Heimbinder
and Strudler elected to be included in the Plan for purposes of their 1994
incentive compensation. The chart does not include an equal number of
shares of Common Stock credited to Messrs. Johnson, Sadowski and Slaughter
that have not yet vested under the Employee Stock Plan.
(3) Includes fully exercisable options granted on August 19, 1993 and April 6,
1994 pursuant to the Directors' Plan to acquire the following number of
shares of Common Stock: Mr. Adams -- 6,000; Mr. Gerard -- 6,000; Mr.
Hanau -- 8,500; Mr. Hopkins -- 6,000; Mr. McDonald -- 6,000; Mr.
McKee -- 8,500; Mr. Poole -- 6,000; Mr. Ripault -- 8,500 and Mr.
Sight -- 6,000.
(4) Includes Class B Warrants, exercisable at $20 per share, to acquire the
following number of shares of Common Stock: Mr. Hanau -- 102; Mr.
McKee -- 710; Mr. Ripault -- 21; Mr. Strudler -- 1,893; Mr. Sadowski -- 23;
and all directors and executive officers of the Company as a
group -- 4,102.
(5) Excludes 8,004 shares of Common Stock, 4,192 shares of Convertible
Preferred Stock and Class B Warrants, exercisable at $20 per share, to
purchase 6,116 shares of Common Stock held in trust for Mr. Heimbinder's
children. Mr. Heimbinder disclaims beneficial ownership of such shares and
Warrants.
(6) 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.
(7) On July 26, 1994, Mr. Poole purchased 1,000 shares of Common Stock. A Form
4 reporting this transaction was filed on August 26, 1994.
(8) FMR Corp. beneficially owns, through its wholly-owned subsidiary, Fidelity
Management & Research Company ("Fidelity"), as an investment advisor to
certain funds ("Fidelity Funds"), 1,223,351 shares of Common Stock, which
amount includes 45,000 shares of Convertible Preferred Stock convertible
into 45,000 shares of Common Stock, and through its wholly-owned subsidiary
Fidelity Management Trust Company ("FMTC"), as trustee or managing agent to
certain accounts ("Accounts"), 348,800 shares of Common Stock. Of the
amounts held by FMR Corp., 534,245 shares of Common Stock (4.82% of the
total outstanding amount of the Common Stock) and 45,000 shares of
Convertible Preferred Stock (12.18% of the total outstanding amount of the
Convertible Preferred Stock) are also beneficially owned by Fidelity Low
Priced Stock Fund, a fund for which Fidelity serves as investment advisor.
Each of FMR Corp., through its control of Fidelity, and the Fidelity Funds
has sole dispositive power over 1,223,351 shares of Common Stock. Neither
FMR Corp. nor Edward C. Johnson 3d, as chairman and holder of 24.9% of
voting common stock of FMR Corp., has the sole power to vote or direct the
voting of such shares, which power rests with the boards of trustees of the
Fidelity Funds. Each of FMR Corp., through its control of FMTC, and the
Accounts has sole dispositive power over 348,800 shares of Common Stock and
sole power to vote or to direct the voting of such shares.
(9) Franklin Resources, Inc., its subsidiaries, and investment companies may be
deemed to be the beneficial owner of such shares held by third party
accounts under reporting requirements of the Exchange Act; however,
Franklin Resources, Inc. expressly disclaims beneficial ownership of such
shares. Franklin Resources, Inc. has sole voting power and shared
dispositive power over such shares.
(10) Loomis, Sayles and Company, L.P. may be deemed to be the beneficial owner
of such shares held by third party accounts under reporting requirements of
the Exchange Act; however, Loomis, Sayles and Company, L.P. expressly
disclaims beneficial ownership of such shares. Included in the number of
such shares are 558,801 shares of Common Stock (5.05% of the total
outstanding amount of the Common Stock) beneficially owned by State of
Connecticut "Fund F", 55 Elm Street, Hartford, Connecticut, a third party
account. Loomis, Sayles and Company, L.P. has sole voting power and shared
dispositive power over such shares.
(11) 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
18
<PAGE> 22
Financial Corporation expressly disclaims beneficial ownership of such
shares. In addition to the Common Stock and Convertible Preferred Stock
shown in the foregoing table, MacKay-Shields Financial Corporation holds
326,676 shares of Common Stock which may be acquired upon conversion by
MacKay-Shields Financial Corporation of its interest in the Company's
convertible subordinated debentures. MacKay-Shields Financial Corporation
shares voting power and dispositive power over the Common Stock and the
Convertible Preferred Stock.
(12) The Travelers Inc. ("Travelers"), and its wholly-owned subsidiary, Smith
Barney Holdings Inc. ("SBH"), may be deemed to be the beneficial owner of
such shares held by third party accounts (including 625,000 shares of
Common Stock held by Smith Barney Mutual Funds Management Inc. ("SBM"), a
wholly-owned subsidiary of SBH through SBM's management of Smith Barney
Fundamental Value Funds Inc., a mutual fund) under reporting requirements
of the Exchange Act; however, Travelers and SBH expressly disclaim
beneficial ownership of such shares. Each of Travelers, SBH and SBM share
voting and dispositive power over their respective holdings of Common
Stock.
CORPORATE OFFICERS AND PRESIDENTS OF OPERATIONS
RESTRICTED STOCK PLAN
(PROPOSAL 2)
On October 13, 1994, the Board adopted the Company's Corporate Officers and
Presidents of Operations Restricted Stock Plan (the "Restricted Stock Plan") for
the purpose of providing corporate officers and presidents of operations an
incentive to provide services to the Company over a long period of time and to
enhance the level of performance of the Company by awarding such employees
shares of Common Stock subject to certain vesting requirements. There are
250,000 shares of Common Stock reserved for issuance under the Restricted Stock
Plan.
The full text of the Restricted Stock Plan is set forth as Exhibit A to
this Proxy Statement. The principal features of the Restricted Stock Plan are
summarized below.
There are 13 eligible employees, including five presidents of operations
and eight corporate officers, who will receive shares of Common Stock under the
Restricted Stock Plan.
The Restricted Stock Plan will be effective upon approval by the
Stockholders and at such time each eligible employee will be awarded and issued
11,119 shares of Common Stock. Such number of shares of Common Stock was
determined by dividing $200,000 by $17.988, the average closing price of the
Common Stock on the NYSE for the 10 consecutive trading days immediately
following February 8, 1995, the date on which the Company released its financial
results for the fiscal year ended December 31, 1994. No fractional shares of
Common Stock will be issued under the Restricted Stock Plan.
Vesting
On the date each year, commencing in 2000, on which the Company releases
its financial results for the previous fiscal year (each, a "Vesting Date"),
subject to the forfeiture provisions and accelerated vesting provisions
contained in the Restricted Stock Plan, 20% of the shares of Common Stock
awarded to each employee shall vest with each employee. However, the shares of
Common Stock awarded to each Employee may vest on an accelerated basis if the
Company's average return on assets improves by the percentage amounts specified
in the Restricted Stock Plan. Pursuant to these acceleration provisions, all of
the shares of Common Stock may vest with each Employee as early as the Vesting
Date in 2000.
Forfeiture
In the event an employee is not employed by the Company on or prior to
December 31 of any year which is immediately prior to any Vesting Date, due to
voluntary termination of employment by the employee or termination for Cause (as
defined in the Restricted Stock Plan), all of the shares of Common Stock
remaining to be vested with such employee and all rights arising from such
shares of Common Stock shall be forfeited by such employee and returned to the
Company. If the employee's employment is terminated without Cause
19
<PAGE> 23
during the first five years of the Restricted Stock Plan, 20% of the shares of
Common Stock shall be vested upon termination. If there is a Change of Control
(as defined in the Restricted Stock Plan) and the employee is subsequently
terminated without Cause (including constructive termination due to changes in
position and location of employment) within 24 months, all shares shall become
fully vested. If the employee's employment termination is due to death,
disability or retirement with 20 years of service, the Board has the authority,
at its discretion, to vest as many shares of Common Stock as it deems
appropriate based upon the employee's performance.
Tax Treatment
Under the present provisions of the Tax Code, the Federal income tax
consequences of the Restricted Stock Plan should be as follows:
There is no Federal tax liability to an employee until the shares of Common
Stock are vested with the employee. Upon the later of vesting and lapse of
restrictions under Section 16(b) of the Exchange Act, the current market value
of vested shares is taxed to the employee as ordinary income (an employee could
elect to be taxed at the time of award based upon award value, however, such an
election is not anticipated). Dividends received during the restricted period
are taxed to the employee as ordinary income. Stock appreciation after the
restrictions lapse is taxed as capital gain upon the employee's sale of the
shares of Common Stock.
Other Provisions
The shares of Common Stock will not be released to the employee on vesting
unless and until the amount of Federal, state or local taxes required to be
withheld has been paid or satisfied. Tax withholding liabilities may be
satisfied by relinquishing shares vesting pursuant to the Restricted Stock Plan
valued at the market price on the date such shares are released to the employee.
Common Stock issuable under the Restricted Stock Plan will be registered
pursuant to a Registration Statement on Form S-8 under the Securities Act. The
Common Stock will be issued in the name of the employee but will be held in
escrow for the benefit of the employee pending vesting or forfeiture. The
employee will have voting rights prior to vesting and be entitled to receive any
declared dividends.
The Restricted Stock 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 Restricted Stock Plan may at any time terminate,
amend or modify the Restricted Stock 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 Restricted Stock Plan, (ii)
materially increase the total amount of Common Stock which may be awarded under
the Restricted Stock Plan or (iii) materially modify the requirements for
participation in the Restricted Stock Plan; provided, further, that no
amendment, modification or termination of the Restricted Stock Plan may in any
manner affect any Common Stock (whether vested or not) theretofore awarded under
the Restricted Stock Plan without the consent of the employee to whom Common
Stock has been awarded.
Common Stock may not be issued or allocated under the Restricted Stock Plan
to employees of the Company subject to Rule 16b-3 of the Exchange Act unless and
until the Restricted Stock Plan shall have been approved by the Stockholders at
the Meeting.
20
<PAGE> 24
The following table sets forth the benefits and amounts to be received or
allocated to executive officers, all executive officers as a group, all
non-employee directors as a group and all non-executive employees as a group
under the Restricted Stock Plan if such plan is approved by the Stockholders at
the Annual Meeting.
<TABLE>
<CAPTION>
RESTRICTED STOCK PLAN
--------------------------
DOLLAR NUMBER
VALUE OF UNITS(1)
---------- -----------
<S> <C> <C>
Robert J. Strudler
Chairman and Chief Executive Officer....................... $ 200,000 11,119
Isaac Heimbinder
President and Chief Operating Officer...................... $ 200,000 11,119
Chester P. Sadowski
Vice President -- Controller and Chief Accounting
Officer................................................. $ 200,000 11,119
Richard G. Slaughter
Vice President -- Planning and Secretary................... $ 200,000 11,119
Craig M. Johnson
Vice President -- Community Development.................... $ 200,000 11,119
All Executive Officers as a Group............................ $1,600,000 88,952
Non-Employee Directors....................................... (2) (2)
Non-Executive Employees...................................... $1,000,000 55,595
</TABLE>
- ---------------
(1) The number of shares of Common Stock of the Company to be awarded under the
Restricted Stock Plan was determined by dividing $200,000 by $17.988, the
average closing price of the Common Stock on the NYSE for the 10 consecutive
trading days immediately following February 8, 1995, the date on which the
Company released its financial results for the fiscal year ended December
31, 1994.
(2) Non-Employee Directors do not participate in the Restricted Stock Plan.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE RESTRICTED
STOCK 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.
RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS AUDITORS
(PROPOSAL 3)
The Board, upon recommendation of the Audit Committee, has appointed,
subject to ratification by Stockholders, the firm of Arthur Andersen LLP,
independent public accountants, to examine the financial statements of the
Company for 1995. Arthur Andersen LLP 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 LLP 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.
21
<PAGE> 25
OTHER BUSINESS
Management of the Company knows of no business to be brought before the
Meeting other than the election of Class II Directors, the adoption of the
Corporate Officers and Presidents of Operations Restricted Stock Plan 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.
STOCKHOLDER PROPOSALS
Proposals by Stockholders intended to be presented at the 1996 Annual
Meeting of Stockholders must be received by the Company on or before November
20, 1995 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.
On Behalf of the Board of Directors
RICHARD G. SLAUGHTER
Secretary
Houston, Texas
March 20, 1995
22
<PAGE> 26
EXHIBIT A
U.S. HOME CORPORATION
CORPORATE OFFICERS AND PRESIDENTS OF OPERATIONS
RESTRICTED STOCK PLAN
1. PURPOSE.
The purpose of the U.S. Home Corporation Corporate Officers and Presidents
of Operations Restricted Stock Plan (the "Plan") is to create incentives for the
corporate officers and presidents of operations of U.S. Home Corporation (the
"Company") to provide services to the Company over a long period of time and to
enhance the level of performance of the Company by awarding such employees
shares of Stock (as defined herein) subject to certain vesting requirements.
2. ADMINISTRATION.
(a) A committee (the "Committee"), which shall initially be the
Compensation and Stock Option Committee of the board of directors of the Company
(the "Board"), and which will be comprised of at least three members of the
Board, all of whom are "disinterested persons" (as defined below), 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. The members of the Committee
may be appointed from time to time by the Board and serve at the pleasure of the
Board. The Committee will hereinafter be referred to as the "Administrator."
(b) 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 which is the subject of the Plan will be the shares of common
stock of the Company, $.01 par value per share (the "Stock"), 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.
4. AWARD OF STOCK.
(a) All of the corporate officers and presidents of operations of the
Company listed on Schedule A attached hereto (each an "Employee" and
collectively, "Employees"), shall be eligible to receive Stock in accordance
with the terms hereof.
(b) In consideration of future services to be provided by each Employee to
the Company, each Employee shall be awarded, on a one-time basis, the number of
shares of Stock, subject to the restrictions contained herein, determined by
dividing $200,000 by 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 its financial results for the
fiscal year ending December 31, 1994; provided that no fractional shares of
Stock shall be issued under the Plan.
(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 appropriate
under the circumstances.
(d) The Administrator shall have the right pursuant to the terms hereof to
award Stock to any individual who becomes a corporate officer or president of
operations of the Company after the effective date of the Plan and prior to the
initial Vesting Date (as defined herein). The Administrator shall make such
award
A-1
<PAGE> 27
substantially in accordance with the terms of the Plan, including the vesting
requirements contained in Section 5 hereof, but shall be permitted to award a
smaller number of shares of Stock based on the date on which the individual
commences employment as a corporate officer or president of operations of the
Company.
5. VESTING.
(a) On each Vesting Date, unless all shares of Stock awarded to each
Employee shall have previously vested with each Employee and subject to the
forfeiture provisions contained herein, a percentage of the shares of Stock
awarded hereunder to each Employee shall vest with each Employee such that the
cumulative percentage of total shares of Stock vested with each Employee shall
be the greater of the applicable percentages set forth below:
(i) (A) 20% as of the Vesting Date in the year 2000;
(B) 40% as of the Vesting Date in the year 2001;
(C) 60% as of the Vesting Date in the year 2002;
(D) 80% as of the Vesting Date in the year 2003;
(E) 100% as of the Vesting Date in the year 2004;
(ii) If, on a Vesting Date, the Return on Assets Improvement (as defined
herein) is:
(A) greater than 1.05 and less than or equal to 1.10, then 40%;
(B) greater than 1.10 and less than or equal to 1.15, then 60%;
(C) greater than 1.15 and less than or equal to 1.20, then 80%;
(D) greater than 1.20, then 100%;
provided, however, that no Employee shall be required to forfeit any shares of
Stock previously vested hereunder.
For the purposes hereof:
"Return on Assets Improvement" means (x) the sum of the Return on Assets
for the two fiscal years of the Company immediately prior to the applicable
Vesting Date divided by two, and the result divided by (y) the Return on Assets
for the fiscal year ended December 31, 1994, rounded to the nearest hundredth.
"Return on Assets" means (x) the amount contained in the Company's "income
(loss) before income tax" line-item for the applicable fiscal year of the
Company as reported in the consolidated statements of operations set forth in
the audited financial statements for the Company for such fiscal year, divided
by (y) the Average Total Assets for such year.
"Average Total Assets" means an amount equal to (x) (1) total housing
assets at the beginning of the applicable fiscal year of the Company (as
reported in the consolidated balance sheet set forth in the audited financial
statements for the Company for the prior fiscal year), plus (2) total housing
assets at the end of such fiscal year (as reported in the consolidated balance
sheet set forth in the audited financial statements for the Company for such
fiscal year), divided by (y) two.
(b) In the event an Employee is not employed by the Company on or prior to
December 31 of any year which is immediately prior to any Vesting Date, due to
voluntary termination of employment by the Employee or termination for Cause (as
defined herein), all of the shares of Stock remaining to be vested with such
Employee hereunder and all rights arising from such shares of Stock shall be
forfeited by such Employee and returned to the Company.
(c) 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).
(d) In the event an Employee is terminated without Cause prior to January
1, 2000, 20% of the shares of Stock awarded hereunder shall immediately vest
with such Employee and the remaining shares of Stock to be vested hereunder and
all rights arising from such shares of Stock shall be forfeited by such Employee
and returned to the Company.
A-2
<PAGE> 28
(e) In the event there is a Change of Control (as defined herein) and
within 24 months thereof an Employee is terminated without Cause or
Constructively Terminated, all shares of Stock remaining to be vested with such
Employee hereunder shall immediately vest with such Employee and the Company
shall immediately cause the issuance to such Employee of appropriate stock
certificates representing such shares of Stock in such Employee's name in
accordance with Section 6 hereof.
(f) In the event an Employee dies, is Permanently Disabled (as defined
herein), or retires (after not less than 20 years of employment by the Company),
the Administrator shall have the authority, in its sole discretion, to vest such
Employee (or such Employee's estate, if applicable) in as many shares of Stock
as the Administrator shall deem appropriate, based upon such Employee's prior
job performance.
(g) For purposes of the Plan:
(i) "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.
(ii) "Cause" means (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).
(iii) "Change of Control" means any of the following: (1) the sale,
lease, conveyance or other disposition of all or substantially all of the
Company's assets as an entirety or substantially as an entirety to any
person (including any individual or entity) or group of persons (within the
meaning of Section 13(d)(3) of the Exchange Act in one or a series of
transactions; provided that a transaction where the holders of all classes
of common equity of the Company immediately prior to such transaction own,
directly or indirectly, 50% or more of the aggregate voting power of all
classes of common equity of such person or group immediately after such
transaction will not be a Change of Control, (2) the liquidation or
dissolution of the Company; provided that a liquidation or dissolution of
the Company which is part of a transaction or series of related
transactions that does not constitute a Change of Control under the
"provided" clause of clause (1) above will not constitute a Change of
Control hereunder or (3) any transaction or a series of related
transactions (as a result of a tender offer, merger, consolidation or
otherwise) that results in, or that is in connection with, any person,
including, a "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) acquiring "beneficial ownership" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of 50% or more of the
aggregate voting power of all classes of common equity of the Company or of
any person that possesses "beneficial ownership" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of 50% or more of the
aggregate voting power of all classes of common equity of the Company.
(iv) "Constructively Terminated" means (1) a reduction in an amount
equal to or greater than 15 percent of an Employee's Base Salary, (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 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.
A-3
<PAGE> 29
(v) "Permanently Disabled" means physical or mental incapacity of such
nature that an Employee is unable to engage in or perform the principal
duties of his customary employment or occupation on a continuing or
sustained basis. All determinations as to the date and extent of disability
of any Employee shall be made by the Administrator upon the basis of such
evidence as it deems necessary or desirable.
(vi) "Vesting Date" means the date each year, commencing in 2000, on
which the Company releases its financial results for the previous fiscal
year.
6. STOCK CERTIFICATES.
(a) Each Employee shall receive a stock certificate reflecting the number
of shares of Stock awarded hereunder. Such certificate shall be registered in
the name of such Employee and shall bear the following legend:
"The securities (the "Shares") represented by this stock certificate
are restricted by the terms of the U.S. Home Corporation Corporate
Officers and Presidents of Operations Restricted Stock Plan
("Restricted Stock Plan"), effective as of January 1, 1995, which
contains provisions affecting the rights and obligations of the holder
of the Shares and restrictions on the transfer of the Shares. Any
transfer of the Shares represented by this stock certificate in
violation of the Restricted Stock Plan is null and void."
(b) The Administrator may, in its sole discretion, require that the stock
certificates evidencing the shares of Stock be held in custody by the Company
until the restrictions thereon shall have lapsed, and that, as a condition of
receiving the shares of Stock, the Employee shall have delivered a stock power,
endorsed in blank, relating to the shares of Stock. If and to the extent any
shares of Stock vest with an Employee in accordance with terms hereof, stock
certificates for the appropriate number of unrestricted shares of Stock shall be
delivered promptly to the Employee. Shares of Common Stock will not be released
to an Employee unless and until the amount of federal, state or local taxes
required to be withheld has been paid or satisfied. Tax withholding liabilities
may be satisfied by the Employee relinquishing shares of Common Stock vested
pursuant to the Plan, valued at the market price of the Common Stock on the date
such shares of Common Stock are released to the Employee.
7. TERM AND EFFECTIVE DATE.
The Plan will become effective upon (i) approval by the Board and (ii)
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 1995
annual meeting of the Company's stockholders. Subject to Section 15 hereof, the
Plan shall terminate upon issuance and vesting of the Stock issuable pursuant to
the Plan.
8. TRANSFERABILITY.
Employees shall not be permitted to sell, transfer, pledge, assign or
otherwise encumber shares of Stock awarded hereunder prior to the vesting of
such shares of Stock. Upon vesting of such shares of Stock, an Employee will
only transfer such shares of 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.
9. RIGHTS AS A STOCKHOLDER.
Except as provided in Section 8 hereof or this Section 9, Employees shall
have, with respect to any shares of Stock remaining to be vested hereunder, all
of the rights of stockholders of the Company, including the right to vote such
shares of Stock and to receive any cash dividends. Stock dividends, if any,
issued with respect to such shares of Stock shall be subject to the same
restrictions and other terms and conditions hereunder that apply to such shares
of Stock.
A-4
<PAGE> 30
10. INVESTMENT PURPOSE.
At the time of issuance of any shares of Stock, the Administrator 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 424 of the
Internal Revenue Code of 1986, 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 any Stock (whether vested or
not) theretofore awarded under the Plan without the consent of the Employee to
whom Stock has been awarded.
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.
A-5
<PAGE> 31
SCHEDULE A
<TABLE>
<CAPTION>
CORPORATE OFFICERS PRESIDENTS OF OPERATIONS
------------------------------------ ------------------------------------
<S> <C>
Robert J. Strudler Sam B. Crimaldi
Isaac Heimbinder James R. Petty
Gary L. Frueh Christopher B. Rediger
Craig M. Johnson Michael T. Richardson
Thomas A. Napoli Philip J. Walsh III
Chester P. Sadowski
Richard G. Slaughter
Kelly F. Somoza
</TABLE>
A-6
<PAGE> 32
P R O X Y
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 26,
1995, 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 II 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 AND 3.
Please sign, date and return this Proxy promptly. No postage is required
if returned in the enclosed envelope and mailed in the United States.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
-----------
SEE REVERSE
SIDE
-----------
- --------------------------------------------------------------------------------
<PAGE> 33
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
<TABLE>
<S> <C>
1. ELECTION OF CLASS II DIRECTORS
FOR AGAINST ABSTAIN
Nominiees: Glen Adams; Steven L. Gerard; 2. Approval of the Corporate Officers / / / / / /
Kenneth J. Hanau, Jr; and Presidents of Operations
Charles A. McKee Restricted Stock Plan.
FOR WITHHELD 3. Ratification of Arthur Andersen / / / / / /
/ / / / LLP as auditors.
Please sign exactly as name appears on this Proxy. If shares are
For, except vote withheld from the registered in more than one name, all such persons should sign
following nominee(s): 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.
MARK HERE
FOR ADDRESS / / Signature:_____________________________ Date:__________________
CHANGE AND
NOTE BELOW Signature:_____________________________ Date:__________________
</TABLE>
