<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 5, 1998
REGISTRATION NO. 333-42213
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NEWMARK HOMES CORP.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
NEVADA 1521 76-0460831
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification Number)
TERRY C. WHITE
CHIEF FINANCIAL OFFICER AND TREASURER
1200 SOLDIERS FIELD DRIVE 1200 SOLDIERS FIELD DRIVE
SUGAR LAND, TEXAS 76459 SUGAR LAND, TEXAS 76459
TELEPHONE (281) 243-0100 TELEPHONE (281) 243-0100
FAX (281) 243-0771 FAX (281) 243-0771
(Address, Including Zip Code, (Name, Address, Including Zip Code,
and Telephone Number, Including Area Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices) of Agent for Service)
</TABLE>
---------------------
Copies to:
<TABLE>
<S> <C>
NORMAN R. MILLER, ESQ. THOMAS P. MASON, ESQ.
WOLIN, RIDLEY & MILLER LLP ANDREWS & KURTH L.L.P.
3100 BANK ONE CENTER 4200 CHASE TOWER
1717 MAIN STREET HOUSTON, TEXAS 77002
DALLAS, TEXAS 75201 TELEPHONE (713) 220-4368
TELEPHONE (214) 939-4906 FAX (713) 220-4285
FAX (214) 939-4949
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The registrant will pay the following estimated expenses in connection with
the issuance and distribution of Common Stock pursuant to this registration
statement, in addition to underwriting discounts:
<TABLE>
<S> <C>
SEC Filing Fee.............................................. $ 7,667
NASD Filing Fee............................................. 3,030
Nasdaq National Market Application Fee...................... 81,625
Accounting Fees and Expenses................................ 250,000
Legal Fees and Expenses..................................... 225,000
Printing and Engraving...................................... 250,000
Transfer Agent and Registrar Fees and Expenses.............. 15,000
Underwriter's Nonaccountable Expense Allowance.............. 150,000
Miscellaneous............................................... 17,678
----------
Total..................................................... $1,000,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Nevada Private Corporations Law ("NPCL") provides that a corporation
may indemnify any person who was or is a party or is threatened to be made a
party, by reason of the fact that such person was an officer of director of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, to (x) any action or suit by or in the right
of the corporation against expenses, including amounts paid in settlement and
attorneys' fees, actually and reasonably incurred, in connection with the
defense or settlement believed to be in, or not opposed to, the best interests
of the corporation, except that indemnification may not be made for any claim,
issue or matter as to which such person has been adjudged by a court of
competent jurisdiction to be liable to the corporation or for amounts paid in
settlement to the corporation and (y) any other action or suit or proceeding
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement, actually and reasonably incurred, if he or she acted in good
faith and in a manner which he or she reasonably believed to be in, or not
opposed to, reasonable cause to believe his or her conduct was unlawful. To the
extent that a director, officer, employee or agent has been "successful on the
merits or otherwise" the corporation must indemnify such person. The articles of
incorporation or bylaws may provide that the expenses of officers and directors
incurred in defending any such action must be paid as incurred and in advance of
the final disposition of such action. The NPCL also permits the Registrant to
purchase and maintain insurance on behalf of the Registrant's directors and
officers against any liability arising out of their status as such, whether or
not Registrant would have the power to indemnify him against such liability.
These provisions may be sufficiently broad to indemnify such persons for
liabilities arising under the Securities Act.
The Registrant's Restated Articles and Bylaws, as amended to date, provide
that the Registrant shall, to the fullest extent not prohibited by applicable
law, indemnify any director or officer of the Registrant in connection with
certain actions, suits or proceedings, against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred. The Registrant is also required to pay any expenses incurred by a
director or officer in defending such an action, in advance of the final
disposition of such action. The Registrant's Articles and Bylaws further provide
that, by resolution of the Board of Directors, such benefits may be extended to
employees, agents or other representatives of the Registrant.
II-1
<PAGE> 3
The Registrant has authority under the NPCL to indemnify its officers,
directors, employees and agents to the extent provided in such statute. Article
VIII of the Registrant's Bylaws, referenced as Exhibit 3.2 hereto, provide for
indemnification of the Registrant's officers, directors, employees and agents.
The NPCL provides that a corporation's articles of incorporation may
contain a provision which eliminates or limits the personal liability of a
director or officer to the corporation or its stockholders for damages for
breach of fiduciary duty as a director or officer, provided that such a
provision must not eliminate or limit the liability of a director or officer
for: (a) acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law; or (b) the payment of illegal distributions. The
Company's Articles include a provision eliminating the personal liability of
directors for breach of fiduciary duty except that such provision will not
eliminate or limit any liability which may not be so eliminated or limited under
applicable law.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Registrant
pursuant to the foregoing provisions, the Registrant has been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
None.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The information set forth on the "Index to Exhibits" of this Registration
Statement is incorporated herein by reference.
FINANCIAL STATEMENT SCHEDULES:
Schedule I -- Condensed Financial Information of Registrant; Parent Company
Only Balance Sheets; Parent Company Only Statements of
Operations; Parent Company Only Statements of Cash Flows.
Schedule II -- Valuation and Qualifying Accounts.
Schedule III -- Properties and Accumulated Depreciation.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To provide to the underwriters at the closing specified in the
underwriting agreement certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to
each purchaser.
(2) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy, as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the Common
Stock being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
(3) For the purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h)
II-2
<PAGE> 4
under the Securities Act of 1933 shall be deemed to be part of the
registration statement as of the time it was declared effective.
(4) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on March 5, 1998.
NEWMARK HOMES CORP.
By: /s/ TERRY C. WHITE
----------------------------------
Terry C. White
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed below by the following persons on
behalf of the registrant in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ LONNIE M. FEDRICK* President and Chief Executive March 5, 1998
- ----------------------------------------------------- Officer
Lonnie M. Fedrick
/s/ JAMES M. CARR* Executive Vice President and March 5, 1998
- ----------------------------------------------------- Director
James M. Carr
/s/ TERRY C. WHITE Chief Financial Officer and March 5, 1998
- ----------------------------------------------------- Treasurer
Terry C. White
/s/ LARRY D. HORNER* Director March 5, 1998
- -----------------------------------------------------
Larry D. Horner
/s/ BILL C. BRADLEY* Director March 5, 1998
- -----------------------------------------------------
Bill C. Bradley
/s/ MICHAEL K. MCCRAW* Director March 5, 1998
- -----------------------------------------------------
Michael K. McCraw
/s/ TERRY C. WHITE
- -----------------------------------------------------
*Attorney-in-fact
</TABLE>
II-4
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
1.1* -- Form of Underwriting Agreement
3.1* -- Form of Amended and Restated Articles of Incorporation
to be effective prior to the offering
3.2* -- Bylaws
4.1 -- Specimen of Registrant's Stock Certificate
5.1* -- Legal Opinion by Wolin, Ridley & Miller LLP regarding
the legality of securities being issued.
10.1(a)* -- Construction Loan Agreement dated August 6, 1997 for
$3,675,000 between Pacific United, L.P., as Borrower,
NHC Holdings, Corp., as Guarantor, and Bank of America
Texas, N.A., as Lender
10.1(b)* -- $3,675,000 Promissory Note Secured by Deed of Trust
dated August 6, 1997 payable to Bank of America, N.A.,
as Lender, by Pacific United, L.P.
10.1(c)* -- Deed of Trust, Security Agreement, Financing Statement,
and Assignment of Rental between Pacific United, L.P.,
Grantor to David S. Owens, Trustee, and Bank of America
Texas N.A., Beneficiary dated August 4, 1997
10.1(d)* -- Indemnity Agreement dated August 6, 1997 between Pacific
United, L.P., in favor of Bank of America Texas, N.A.
10.1(e)* -- Payment Guaranty dated August 6, 1997, by NHC Holdings
Corp., as Guarantor, in favor of Bank of America Texas,
N.A., as Lender
10.2* -- $10,000,000 Promissory Note dated April 23, 1997,
between BankTexas, as Lender, and Newmark Home
Corporation, as Borrower
10.3(a)* -- Master Revolving Line of Credit Loan Agreement dated
October 1, 1996 between Newmark Homes, L.P. and Compass
Bank
10.3(b)* -- First Amendment and Modification to Loan Agreement
between Newmark Homes, L.P. and Compass Bank dated March
1, 1997
10.3(c)* -- Second Amendment and Modification to Loan Agreement
between Newmark Homes, L.P. and Compass Bank dated June
1, 1997.
10.3(d)* -- Compass Bank Revolving Line of Credit Promissory Note
dated June 1, 1997
10.4(a)* -- $15,000,000 Loan Agreement between Newmark Homes and
Bank of America Texas, N.A.
10.4(b)* -- Promissory Note dated November 29, 1996 between Newmark
Homes and Bank of America Texas, N.A. for $15,000,000
10.4(c)* -- Deed of Trust, Security Agreement and Assignment of
Rents and Leases dated November 29, 1996, by Newmark
Homes, L.P., as Grantor, to Chris A. Peirson, Trustee,
for the benefit of Bank of America Texas, N.A.
10.5(a)* -- April 30, 1996 Amended & Restated Construction Loan
Agreement for $20,000,000 between Newmark Home
Corporation and Bank One, Texas, N.A. (the "Bank One
Loan Agreement")
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
10.5(b)* -- Modification Agreement to Amended & Restated
Construction Loan Agreement between Newmark Home
Corporation and Bank One, Texas dated April 30, 1996
10.5(c)* -- Fourth Amendment to Bank One Loan Agreement
10.5(d)* -- Third Amendment to Bank One Loan Agreement
10.5(e)* -- Second Amendment to Bank One Loan Agreement
10.5(f)* -- First Amendment to Bank One Loan Agreement
10.6(a)* -- Form of Tax Allocation Agreement ("Tax Agreement")
between Pacific USA and various affiliates and
subsidiaries, of Pacific USA, including the Registrant,
dated April 28, 1992
10.6(b)* -- Form of Amendment to Tax Agreement.
10.7* -- March 13, 1996 Lot Acquisition Loan Agreement between
The Adler Companies, Inc. and Bank United of Texas
10.8(a)* -- March 13, 1996 Construction Line of Credit Loan
Agreement between The Adler Companies, Inc. and Bank
United of Texas FSB
10.8(b)* -- Amendment to Construction Line of Credit Loan Agreement,
dated December 30, 1996
10.8(c)* -- Amendment to Construction Line of Credit Loan Agreement,
dated January 15, 1997
10.8(d)* -- Mortgage Modification and Spreading Agreement and Notice
of Future Advance, dated January 15, 1997
10.8(e)* -- January 15, 1997 Promissory Note between The Adler
Companies, Inc. and Bank United
10.9* -- April 23, 1997 Construction Loan Agreement between
BankTexas N.A. and Newmark Homes, L.P.
10.10* -- Lot Acquisition Loan Agreement between The Adler
Companies, Inc. and Bank United of Texas FSB dated
January 15, 1997
10.11(a)* -- Master Loan Agreement between Newmark Homes, L.P. and
Guaranty Federal Bank dated August 1997
10.11(b)* -- Revolving Promissory Note for $10,000,000 dated August
1997 between Guaranty Federal Bank and Newmark
10.11(c)* -- Master Form of Deed of Trust with Security Agreement and
Assignment of Rents and Leases between Guaranty Federal
Bank, FSB and Newmark Homes, L.P. re: $10,000,000 Loan
Agreement
10.12(a)* -- $15,000,000 Revolving Line of Credit Loan Agreement
between First American Bank and Newmark Homes, L.P.
dated December 17, 1996
10.12(b)* -- Master Revolving Line of Credit/Promissory Note dated
December 17, 1996 for $15,000,000 between Newmark Homes,
L.P. and First American Bank Texas and Deed of Trust
10.12(c)* -- February 4, 1997 Amendment to $15,000,000 Revolving Line
of Credit Loan Agreement dated December 17, 1996 between
First American Bank and Newmark Homes, L.P.
10.12(d)* -- April 30, 1997 Amendment to $15,000,000 Revolving Line
of Credit Loan Agreement dated December 17, 1996 between
First American Bank and Newmark Homes, L.P.
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
10.12(e)* -- Master Deed of Trust and Security Agreement for the
benefit of First American Bank Texas dated December 17,
1996
10.13* -- December 1995 Construction Loan Agreement for $5,000,000
revolving line of credit and $2,473,000 loan between The
Adler Companies, Inc. and Barnett Bank of South Florida,
N.A.
10.14 -- 1998 Tandem Stock Option/Stock Appreciation Rights Plan,
with form of incentive plan agreement
10.15(a)* -- January 10, 1997 Amended and Restated Construction Loan
Agreement for $20,000,000 between Newmark Homes, L.P.
and Mellon Bank
10.15(b)* -- Modification Agreement dated October 1, 1996 between
Newmark Homes Corp., NHC Homes, Inc., Newmark Homes,
L.P. and Mellon Bank
10.15(c)* -- Modification Agreement dated January 10, 1997 between
Newmark Homes, L.P. and Mellon Bank
10.16(a)* -- Loan Agreement between Bank United f/k/a United Savings
Association of Texas and Newmark Home Corp. dated June
28, 1990 with twelve amendments increasing loan amount
to $30,000,000
10.16(b)* -- $30,000,000 Promissory Note between Newmark Home Corp.
and Bank United of Texas dated July 1, 1997
10.16(c)* -- Supplemental Deed of Trust and Security Agreement
between Newmark Homes Corp., as Grantor and Henson as
Trustee, for the benefit of Bank United of Texas
10.17* -- Employment Agreement between Newmark Home Corp. and
Terry White dated January 1, 1998
10.18* -- Employment Agreement between Newmark Home Corp. and Eric
Rome dated January 1, 1998
10.19* -- Employment Agreement between Newmark Home Corp. and
Steve Treece effective dated January 1, 1998
10.20* -- Employment Agreement between Newmark Home Corp. and Ray
Hurlbut effective November 1, 1996
10.21* -- Employment Agreement between Newmark Home Corp. and Mike
Beckett effective dated January 1, 1998
10.22* -- Employment Agreement between Pacific United Development
Corp. and Coleman Bradley effective November 1, 1996
10.23* -- Employment Agreement between Newmark Home Corp. and
Steve J. Von Hofe effective November 1, 1996.
10.24* -- Employment Agreement between Newmark Home Corp. and
Brian K. Shields effective November 1, 1996.
10.25* -- Employment Agreement between Newmark Home Corp. and Mike
M. Moody effective November 1, 1996.
10.26* -- Employment Agreement between Newmark Home Corp. and
James Carr dated January 1, 1998.
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
10.27* -- Stock Purchase Agreement dated January 15, 1998 among
James Carr, Westbrooke Communities, Inc., Westbrooke at
West Lake, Inc., Westbrooke at Winston Trails, Inc.,
Westbrooke at Pembroke Pines, Inc., Westbrooke at Oak
Ridge, Inc., Harold L. Eisenacher, Leonard R. Chernys,
Diana Ibarria, The Westbrooke Partnership, Pacific USA
Holdings Corp., Newmark Homes Corp., and Westbrooke
Acquisition Corp.
10.27(b)* -- Form of Addendum to Stock Purchase Agreement, effective
January 15, 1998.
10.28* -- Employment Agreement between Newmark Home Corp. and
Lonnie M. Fedrick dated January 1, 1998.
21.1* -- List of Subsidiaries
23.1* -- Consent of KPMG Peat Marwick LLP
23.2* -- Consent of Ernst & Young LLP
23.3* -- Consent of Wolin, Ridley & Miller LLP (included in
Exhibit 5.1)
24.1* -- Power of Attorney (See page II-4)
27.1* -- Financial Data Schedule
99.1* -- Consent of Jon P. Newton
99.2* -- Consent of William A. Hasler
</TABLE>
- ---------------
* Filed Previously
+ To be filed by amendment.
<PAGE> 1
EXHIBIT 4.1
COMMON STOCK COMMON STOCK
PAR VALUE $.01 PAR VALUE $.01
NUMBER [NEWMARK HOMES CORP. LOGO] SHARES
C
NEWMARK HOMES CORP.
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
THIS CERTIFICATE IS TRANSFERABLE IN SEE REVERSE FOR CERTAIN DEFINITIONS
NEW YORK, N.Y. CUSIP 651578 10 6
- -------------------------------------------------------------------------------
THIS CERTIFIES THAT
SPECIMEN
is the record holder of
- -------------------------------------------------------------------------------
FULLY PAID AND NONASSESSABLE SHARES OF THE $.01, PAR VALUE COMMON STOCK OF
------------------ ------------------
- --------------------------- NEWMARK HOMES CORP. ---------------------------
------------------ ------------------
transferable on the books of this corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate is not valid unless duly countersigned by the
Transfer Agent and Registrar.
IN WITNESS WHEREOF, the corporation has caused the certificate to be signed
in facsimile by its duly authorized officers and the facsimile corporate seal to
be duly affixed hereto.
Dated:
/s/ LONNIE M. FEDRICK COUNTERSIGNED AND REGISTERED:
PRESIDENT FIRST CHICAGO TRUST COMPANY
OF NEW YORK
TRANSFER AGENT AND REGISTRAR,
[SEAL]
/s/ TERRY C. WHITE By: /s/ [ILLEGIBLE]
SECRETARY AUTHORIZED SIGNATURE
<PAGE> 2
NEWMARK HOMES CORP
The securities evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended, or any state securities act, and
may not be sold, transferred, or otherwise disposed of absent such registration
unless, in the opinion of counsel to the Company, such registration is not
required.
The Company is authorized to issue shares of more than one class. Pursuant
to Nevada Revised Statutes Section 78.195, the Company will furnish to any
shareholder upon request (addressed to the attention of the Secretary of the
Company) and without charge a full statement of the designations, preferences,
limitations and relative rights of the shares of each class authorized to be
issued by the Company and of variations in the relative rights and preferences
between the shares of each series of the Preferred Shares of the Company insofar
as any such series has been fixed and determined, and a statement of the
authority of the Board of Directors of the Company to fix and determine the
relative rights and preferences of subsequent series of the Preferred Stock.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- _____________ Custodian ___________
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act __________________
in common (State)
UNIF TRF MIN ACT -- __________Custodian (unif age_____)
(Cust)
____________under Uniform Transfers
(Minor)
to Minors Act _____________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, __________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
_______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
_______________________________________________________________________________
_______________________________________________________________________________
________________________________________________________________________ Shares
of the Common Stock represented by the within Certificate and do hereby
irrevocably constitute and appoint ___________________________________________
Attorney to transfer the said stock on the books of the within-named
Corporation, with full power of substitution in the premises.
Dated:_____________________________
X_______________________________________
X_______________________________________
THE SIGNATURE(S) TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
NOTICE: UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed:
By________________________________________
THE SIGNATURE(S) MUST BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
<PAGE> 1
EXHIBIT 10.14
NEWMARK HOMES CORP.
1998 TANDEM
STOCK OPTION/STOCK APPRECIATION RIGHTS PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1.
GENERAL PROVISIONS RELATING TO PLAN GOVERNANCE, COVERAGE AND BENEFITS . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 Stock Subject to Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.
INCENTIVE AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Grant of Incentive Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Terms of an Incentive Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Exercise of Incentive Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.
PROVISIONS RELATING TO PLAN PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Plan Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Transferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Rights as a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Change in Stock and Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Termination of Employment, Retirement, Death or Disability . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Change-of-Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Buyout Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Reservation of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4 Rule 16b-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.5 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6 No Guarantee of Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.8 Gender, Tenure and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
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<PAGE> 3
NEWMARK HOMES CORP.
1998 TANDEM
STOCK OPTION/STOCK APPRECIATION RIGHTS PLAN
SECTION 1.
GENERAL PROVISIONS RELATING TO
PLAN GOVERNANCE, COVERAGE AND BENEFITS
1.1 Purpose
The purpose of the Newmark Homes Corp. 1998 Tandem Stock Option/Stock
Appreciation Rights Plan (the "Plan") is to foster and promote the long-term
financial success of Newmark Homes Corp. (the "Company") and materially
increase stockholder value by: (a) strengthening the Company's ability to
attract, develop, maintain and direct an outstanding management team, (b)
encouraging the long-term commitment of selected key employees (hereinafter
collectively referred to as "key personnel") and directors, (c) motivating
superior performance of key personnel and directors by means of long-term
performance related incentives, (d) encouraging and providing key personnel and
directors with a formal program for obtaining an ownership interest in the
Company, (e) attracting and retaining outstanding key personnel and directors
by providing incentive compensation opportunities competitive with other major
companies and (f) enabling participation by key personnel and directors in the
long-term growth and financial success of the Company. The Plan is not
intended to be a plan that is subject to Parts 1 through 4 of Subtitle B of
Title I of the Employee Retirement Income Security Act of 1974, as amended, and
shall be administered accordingly.
1.2 Definitions
The following terms shall have the meanings set forth below:
(a) Board. The Board of Directors of the Company.
(b) Change-of-Control. Any of the events described in
Section 3.6.
(c) Code. The Internal Revenue Code of 1986, as amended.
(d) Committee. The Committee shall mean the Compensation
Committee of the Board which shall be (i) constituted
so as to permit the Plan to comply with Rule 16b-3
and (ii) constituted solely of "outside directors,"
within the
<PAGE> 4
meaning of section 162(m) of the Code and applicable
interpretive authority thereunder.
(e) Common Stock. The common stock of Newmark Homes Corp.
(f) Company. Newmark Homes Corp.
(g) Disability. A Grantee will be deemed to have a
"disability" if, for physical or mental reasons, the Grantee is unable
to perform the essential functions of the Grantee's duties as an
employee or director of the Company or any Subsidiary for 120
consecutive days, or 180 days during any twelve (12) month period, as
determined under the provisions of this definition. The disability of
an Employee will be determined in accordance with such Employee's
written employment agreement with the Company or any Subsidiary, if
any, and with respect to any other Grantee, the disability of such
Grantee will be determined by a medical doctor selected by the
Committee. A Grantee must submit to a reasonable number of
examinations by the medical doctor making the determination of
disability under this definition, and a Grantee hereby authorizes the
disclosure and release to the Company of such determination and all
supporting medical records. If a Grantee is not legally competent, a
Grantee's legal guardian or duly authorized attorney-in-fact will act
in the Grantee's stead, under this definition, for the purposes of
submitting the Grantee to the examinations, and providing the
authorization of disclosure, required under this definition.
(h) Employee. Any common-law employee of the Company or
Subsidiary, who, in the opinion of the Committee is one of a select
group of officers, former officers or other management personnel of
the Company or Subsidiary who is in a position to contribute
materially to the continued growth and development and to the
continued financial success of the Company or any Subsidiary.
(i) Exchange Act. The Securities Exchange Act of 1934,
as amended.
(j) Fair Market Value. As of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national market system,
including without limitation the Nasdaq National Market or the
Nasdaq SmallCap Market of the Nasdaq Stock Market, its Fair
Market Value shall be the closing sales price for such stock
(or the closing bid, if no sales were reported) as quoted on
such exchange or system for the last market trading day prior
-2-
<PAGE> 5
to the time of determination, as reported in the Wall Street
Journal or such other source as the Committee deems reliable;
or
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean between the
high bid and low asked prices for the Common Stock on the last
market trading day prior to the day of determination; or
(iii) In the absence of an established market for
the Common Stock, the Fair Market Value shall be determined in
good faith by the Committee.
(k) For Cause means: (i) the commission of fraud, theft,
embezzlement, or a malfeasance involving moral turpitude or the
conviction of, or plea of nolo contendere to, any felony; (ii) gross
negligence, nonfeasance, dishonesty, willful misconduct or substantial
failure to perform employment duties in a manner consistent with
normal standards of job performance after prior evaluation and warning
related to such standards of job performance; or (iii) the
appropriation (or attempted appropriation) of a material business
opportunity of the Company, Parent or any Subsidiary.
(l) Grantee. Any individual who, in the opinion of the
Committee, performs significant services for the benefit of the
Company and who is granted an Incentive Award under the Plan.
(m) Incentive Award. A tandem Option/Stock Appreciation
Right.
(n) Incentive Plan Agreement. The written agreement
entered into between the Company and the Grantee pursuant to which an
Incentive Award shall be made under the Plan.
(o) Option. A stock option granted by the Committee to a
Grantee under the Plan which is a non- statutory stock option and not
intended to qualify as an Incentive Stock Option under Section 422 of
the Code.
(p) Parent. Any corporation (whether now or hereafter
existing) which constitutes a "parent" of the Company, as defined in
Section 424(e) of the Code.
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<PAGE> 6
(q) Performance Period. A six (6) year period of time
over which performance is measured for the purpose of determining a
Grantee's right to the vesting and the final benefits of any Incentive
Award.
(r) Plan. The Newmark Homes Corp. Tandem Stock
Option/Stock Appreciation Rights Plan.
(s) Retirement. The voluntary termination of employment
from the Company, Parent, or Subsidiary constituting retirement as
determined by the Committee.
(t) Rule 16b-3. Securities and Exchange Commission Rule
16b-3 promulgated under the Exchange Act, as such may be amended from
time to time.
(u) Spread. In the case of a Stock Appreciation Right,
an amount equal to the excess, if any, of the Fair Market Value of a
share of Common Stock on the date such right is exercised over the
Exercise Price (as defined herein in Section 2.3(a)) of the Stock
Appreciation Right.
(v) Stock Appreciation Right. A tandem right with an
Option to receive eighty percent (80%) of the Spread on a share of
Common Stock.
(w) Subsidiary. Any corporation (whether now or
hereafter existing) which constitutes a "subsidiary" of the Company,
as defined in Section 424(f) of the Code.
1.3 Administration
(a) Committee Powers. The Plan shall be administered by
the Committee which shall have full power and authority to maintain
the credibility of the Plan through its duration. All designations,
determinations, interpretations and other decisions with respect to
the Plan or any Incentive Award shall be within the sole discretion of
the Committee and shall be final, conclusive and binding upon all
persons, including the Company, Parent, or any Subsidiary.
(b) No Liability. No member of the Committee shall be
liable for any action or determination made in good faith by the
Committee with respect to this Plan or any Incentive Award under this
Plan, and to the fullest extent permitted by the Company's Bylaws, the
Company shall indemnify each member of the Committee.
-4-
<PAGE> 7
(c) Powers of the Committee. Subject to the provisions
of the Plan and the specific duties delegated by the Board to the
Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange or national
market system upon which the Common Stock is then listed, the
Committee shall have the authority, in its discretion: (i) to
determine the Fair Market Value of the Common Stock, in accordance
with Section 1.2(j) of the Plan; (ii) to select the Grantees to whom
Incentive Awards may from time to time be granted hereunder; (iii) to
determine whether and to what extent Incentive Awards are granted
hereunder; (iv) to approve the forms of the Incentive Plan Agreement
for use under the Plan; and (v) to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any Incentive Award
granted hereunder.
1.4 Stock Subject to Plan
Subject to adjustment as provided in Section 3.4(a) hereof, the
aggregate number of shares of Common Stock that may be issued under the Plan is
896,000. Shares of Common Stock shall be deemed to have been issued under the
Plan only to the extent actually issued and delivered pursuant to an exercise
of an Option. To the extent that an Incentive Award is only to be paid in cash
or is paid in cash, any shares of Common Stock subject to such Incentive Award
shall again be available for the grant of an Incentive Award. The shares
subject to the Plan shall consist of authorized but unissued shares of Common
Stock and such number of shares shall be and is hereby reserved for sale for
such purpose. Any of such shares which may remain unsold and which are not
subject to outstanding Incentive Awards at the termination of the Plan shall
cease to be reserved for the purpose of the Plan, but until termination of the
Plan or the termination of the last of the Incentive Awards granted under the
Plan, whichever last occurs, the Company shall at all times reserve a
sufficient number of shares to meet the requirements of the Plan. Should any
Incentive Award expire or be canceled prior to its exercise in full, the shares
theretofore subject to such Incentive Award may again be made subject to an
Incentive Award under the Plan.
SECTION 2.
INCENTIVE AWARDS
2.1 Eligibility
The persons eligible to participate in the Plan as recipients of an
Incentive Award shall include Employees, members of the Board of the Company
and members of the Board of Directors of any Subsidiary at the time the
Incentive Award is granted by the Committee.
-5-
<PAGE> 8
2.2 Grant of Incentive Award
Incentive Awards may be granted to eligible persons under this Plan by
the Committee. Each Incentive Award grant shall consist of an Option and a
Stock Appreciation Right. The date of the grant of the Incentive Award shall,
for all purposes, be the date on which the Committee makes the determination
granting such Incentive Award, or such other date as is determined by the
Committee. Notice of the grant shall be given to the Grantee within a
reasonable time after the date of such grant.
2.3 Terms of an Incentive Award
(a) Exercise Price. The exercise price (the "Exercise
Price") per share of Common Stock of any Option/Stock Appreciation
Right granted under the Plan shall not be less than the Fair Market
Value of the Common Stock on the date of grant.
(b) Term. The term of each Incentive Award granted shall
be ten years from the date of grant.
(c) Vesting. All Incentive Awards shall become
exercisable by a Grantee ("Vest") in accordance with the following
schedule:
<TABLE>
<CAPTION>
Number of
Date Incentive Awards Exercisable
---- ----------------------------
<S> <C>
4th anniversary date from the date of grant 50%
5th anniversary date from the date of grant 30%
6th anniversary date from the date of grant 20%
</TABLE>
2.4 Exercise of Incentive Award
(a) Right of Grantee. The Grantee may elect to exercise
an Option or a Stock Appreciation Right under his or her Incentive
Award, but in no event may such Grantee have the right to exercise
both the Option and the Stock Appreciation Right, in whole or in part.
If the Grantee elects to exercise the Stock Appreciation Right in lieu
of the Option, the Grantee shall receive in cash from the Company the
amount equal to (i) the number of shares of Common Stock for which the
Grantee elects to exercise his or her Incentive Award, times (ii) 80%
of the Spread on one share of Common Stock relating to the Stock
Appreciation Right.
-6-
<PAGE> 9
(b) Method of Exercise. To purchase shares under any
Option granted under the Plan or to exercise a Stock Appreciation
Right granted under the Plan, a Grantee must give notice in writing to
the Committee of his or her intention to purchase/exercise and specify
the number of shares as to which he or she intends to exercise under
an Option or a Stock Appreciation Right. The Grantee shall indicate
in his or her notice whether he or she elects to exercise the Option
or the Stock Appreciation Right under his or her Incentive Award. All
exercises shall be approved by the Committee. For an Option exercise,
the notice shall be accompanied by cash or cashier's check, bank
draft, postal or express money order payable to the order of the
Company. Notice may also be delivered by fax or telecopy provided
that the purchase price of such shares is delivered to the Company via
wire transfer on the same day the fax is received by the Company. The
notice shall specify the address to which the certificates for such
shares are to be mailed. A Grantee shall be deemed to be a
stockholder with respect to shares covered by an Option on the date
the Company receives such written notice and such Option payment. As
promptly as practicable after receipt of such written notification and
payment, the Company shall deliver to the Optionee certificates for
the number of shares with respect to which such Option has been so
exercised, issued in the Grantee's name or such other name as Grantee
directs; provided, however, that such delivery shall be deemed
effected for all purposes when a stock transfer agent of the Company
shall have deposited such certificates in the United States mail,
addressed to the Grantee.
SECTION 3.
PROVISIONS RELATING TO PLAN PARTICIPATION
3.1 Plan Conditions
(a) Incentive Plan Agreement. Each Grantee to whom an
Incentive Award is granted under the Plan shall be required to enter
into an Incentive Plan Agreement with the Company, which shall contain
certain specific terms, as determined by the Committee, with respect
to the Incentive Award and shall include provisions that the Grantee
(i) shall not disclose any trade secrets or secret data or any other
confidential information of the Company acquired during employment by
the Company, Parent or a Subsidiary, or after the termination of
employment or Retirement and (ii) shall abide by all the terms and
conditions of the Plan and such other terms and conditions as may be
imposed by the Committee. An Incentive Plan Agreement may include a
non-competition agreement with respect to the Grantee and/or such
other terms and conditions, not inconsistent with the Plan, as shall
be determined from time to time by the Committee. If a Grantee is
subject to a written
-7-
<PAGE> 10
agreement with the Company or any Subsidiary which contains a
provision similar to clause (i) above or a non- competition provision,
the Incentive Plan Agreement will not contain a provision similar to
that found in clause (i) and/or will not contain a non-competition
provision.
(b) No Right to Employment. Nothing in the Plan or any
instrument executed pursuant to the Plan shall create any employment
rights (including without limitation, rights to continued employment)
in any Grantee or affect the right of the Company to terminate the
employment of any Grantee at any time for any reason whether before or
after the exercise date of any Option or Stock Appreciation Right
during a Performance Period.
3.2 Transferability
(a) Non-Transferable Awards. No Incentive Award and no
right under the Plan shall be (i) assignable, saleable, or otherwise
transferable by a Grantee except by will or by the laws of descent and
distribution, or (ii) subject to any encumbrance, pledge or charge of
any nature. No transfer by will or by the laws of descent and
distribution shall be effective to bind the Company unless the
Committee shall have been furnished with a copy of the deceased
Grantee's will or such other evidence as the Committee may deem
necessary to establish the validity of the transfer. Any attempted
transfer in violation of this Section 3.2 shall be void and
ineffective for all purposes.
(b) Ability to Exercise Incentive Awards. Only the
Grantee or his or her guardian (if the Grantee becomes Disabled), or
in the event of his or her death, his or her legal representative or
beneficiary may exercise Incentive Awards, receive cash payments and
deliveries of shares, or otherwise exercise rights under the Plan.
3.3 Rights as a Stockholder
No Stockholder Rights. A Grantee of an Incentive Award shall have no
rights as a stockholder with respect to any shares of Common Stock until the
proper and complete exercise of an Incentive Award. However, an Incentive
Award will be made to Grantees as the result of dividend payments or other
distributions with respect to Common Stock, under the following circumstances.
If, and only if, the cumulative dividends or other distributions for any
calendar year exceed five percent of the Fair Market Value of Common Stock,
determined as of January 1 of each year, a Grantee shall be awarded on December
31 of such year an additional Incentive Award, the amount of which shall be
calculated by dividing (i) the cumulative dividends or other distributions for
any calendar year which the Grantee would have received, had Options
outstanding received the
-8-
<PAGE> 11
same distributions as Common Stock by (ii) the Fair Market Value of a share of
Common Stock as of December 31 of such year (rounded down to the nearest whole
share). The Exercise Price per share of Common Stock subject to any additional
Incentive Award shall be determined in accordance with Section 2.3(a) hereof.
Any additional Incentive Award shall vest under Section 2.3(c) hereof as if
part of the original Incentive Award held by Grantee.
3.4 Change in Stock and Adjustments
(a) Changes in Capitalization. In the event the
outstanding shares of the Common Stock, as constituted from time to
time, shall be changed as a result of a change in capitalization of
the Company or a combination, merger, or reorganization of the Company
into or with any other corporation or any other transaction with
similar effects, there then shall be substituted (at no additional
cost to any Grantee) for each share of Common Stock theretofore
subject, or which may become subject, to issuance or transfer under
the Plan, the number and kind of shares of common stock or other
securities or other property into which each outstanding share of
Common Stock shall be changed or for which each such share shall be
exchanged and the Committee may make any other equitable adjustment
which it deems to be warranted at no additional cost to any Grantee
but subject to any required stockholder approval.
3.5 Termination of Employment, Retirement, Death or Disability
(a) Termination of Employment. If an Employee's
employment is terminated by the Company or Subsidiary For Cause or if
a Board member is removed from the Board For Cause, any Incentive
Award granted pursuant to the Plan which is outstanding at the time of
such termination or cessation For Cause and all rights thereunder
shall wholly and completely terminate, and no further payout shall
occur. If a Grantee's employment terminates or if he or she ceases to
serve on the Board for any reason other than For Cause, Retirement,
death, or Disability, the determination of the termination of any
Incentive Award to a Grantee prior to the grant designated expiration
date is at the sole discretion of the Committee.
(b) Death, Disability or Retirement. Upon death,
Disability, or Retirement:
(i) all outstanding grants of Incentive
Awards shall immediately and fully vest
notwithstanding the original vesting schedule; and
-9-
<PAGE> 12
(ii) any unvested Incentive Award
(including those vested pursuant to clause (i) above
shall expire upon the earlier of (A) the expiration
date set forth in the Incentive Plan Agreement with
respect to such Incentive Awards or (B) the first
anniversary of such death, Disability or Retirement.
(c) Continuation. Subject to the express provision of
the Plan and the terms of any applicable Incentive Plan Agreement, the
Committee, in its discretion, may provide for the continuation of any
Incentive Award for such period and upon such terms and conditions as
are determined by the Committee in the event a Grantee ceases to be an
Employee or a Board member.
3.6 Change-of-Control
(a) Change-of-Control. In the event of Change-of-Control:
All Options/Stock Appreciation Rights then
outstanding shall become immediately and fully exercisable,
notwithstanding any provision therein for the exercise in
installments.
For purposes of this Section 3.6, the following
events shall be deemed to constitute a "Change- of-Control":
(i) if any person (including a group as
defined in Section 13(d)(3) of the Exchange Act),
excluding Pacific USA Holdings Corp., Pacific Realty
Group, Inc., or any affiliate of such entities,
becomes, directly or indirectly, the beneficial owner
of 50% or more of the combined voting power of the
Company's then outstanding voting securities;
(ii) as a result of or in connection with
any tender offer, exchange offer, merger, or other
business combination, sale of assets or contested
election, or any combination of the foregoing, the
persons who were members of the Board of the Company
just prior to such event cease to constitute a
majority of the Board of the Company or its
successor;
(iii) the stockholders of the Company
approve a merger or consolidation of the Company with
another corporation and as a result of such merger or
consolidation less than 70% of the outstanding voting
securities for the surviving or resulting corporation
shall then be owned in the
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<PAGE> 13
aggregate by the former stockholders of the Company,
other than (A) any party to such merger or
consolidations, or (B) any affiliates to any such
party;
(iv) a tender offer or exchange offer is
made by an entity other than Pacific USA Holdings
Corp. or its subsidiaries, and consummated for the
ownership of securities of the Company representing
50% or more of the combined voting power of the
Company's then outstanding voting securities; or
(v) the stockholders of the Company
approve a plan of liquidation or an agreement for the
sale or transfer of substantially all of the
Company's assets to another corporation that is not a
wholly owned corporation of the Company.
(b) Right of Cash-Out. If approved by the Board prior to
a Change-of-Control, the Board shall have the right, during the sixty
(60) day period immediately following the date of the
Change-of-Control, to require all, but not less than all, Grantees to
redeliver to the Company all Incentive Awards previously granted to
Grantees in exchange for an amount equal to the Spread on the
Incentive Awards. Such right shall be exercised by written notice to
all Grantees.
SECTION 4.
MISCELLANEOUS
4.1 Effective Date
This Plan was adopted by the Board and the stockholders of the
Company. The Plan became effective and shall be deemed to have been adopted on
the effective date of the initial public offering of the Company. Unless
sooner terminated by the Board, the Plan shall terminate ten years after the
effective date.
4.2 Buyout Provisions
The Committee may at any time offer to buy out for a payment in cash
or shares of Common Stock, an Incentive Award previously granted, based on such
terms and conditions as the Committee shall establish and communicate to the
Grantee at the time that such offer is made.
-11-
<PAGE> 14
4.3 Reservation of Shares
The Company, during the term of the Plan, shall at all times reserve
and keep available such number of shares of Common Stock as shall be sufficient
to satisfy the requirements of this Plan. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any shares of Common Stock hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained.
4.4 Rule 16b-3
Incentive Awards granted to individuals subject to Section 16 of the
Exchange Act must comply with the applicable provisions of Rule 16b-3 and shall
contain such additional conditions or restrictions as may be required thereunder
to qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
4.5 Withholding Taxes
Whenever shares of Common Stock or cash are to be paid or delivered
pursuant to the Plan, the Company can withhold an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery of
any cash or any certificate or certificates for such shares.
4.6 No Guarantee of Tax Consequences
Neither the Company nor the Committee makes any commitment or
guarantee that any federal, state or local tax treatment will apply or be
available to any person participating or eligible to participate herein.
4.7 Severability
In the event that any provision of this Plan shall be held illegal,
invalid or unenforceable for any reason, such provision shall be fully
severable, but shall not affect the remaining provisions of the Plan, and the
Plan shall be construed and enforced as if the illegal, invalid, or
unenforceable provision had never been included herein.
-12-
<PAGE> 15
4.8 Gender, Tenure and Headings
Whenever the context requires such, words of the masculine gender used
herein shall include the feminine and neuter, and words used in the singular
shall include the plural. Section headings as used herein are inserted solely
for convenience and reference and constitute no part of the Plan.
4.9 Governing Law
The Plan shall be construed in accordance with the laws of the State
of Texas, except as superseded by federal law, and in accordance with
applicable provisions of the Code and regulations or other authority issued
thereunder by the appropriate governmental authority.
-13-
<PAGE> 16
EXHIBIT 10.14
INCENTIVE PLAN AGREEMENT
This Incentive Plan Agreement ("Agreement") is between Newmark Homes
Corp., a Nevada corporation (the "Company"), and _______________ (the
"Grantee").
W I T N E S S E T H:
The Company has heretofore adopted the Newmark Homes Corp. 1998 Tandem
Stock Option/Stock Appreciation Rights Plan to foster and promote the long-term
financial success of the Company and materially increase stockholder value by:
(a) strengthening the Company's ability to attract, develop, maintain and
direct an outstanding management team, (b) encouraging the long-term commitment
of selected key employees (hereinafter collectively referred to as "key
personnel") and directors, (c) motivating superior performance of key personnel
and directors by means of long-term performance related incentives, (d)
encouraging and providing key personnel and directors with a formal program for
obtaining an ownership interest in the Company, (e) attracting and retaining
outstanding key personnel and directors by providing incentive compensation
opportunities competitive with other major companies and (f) enabling
participation by key personnel and directors in the long-term growth and
financial success of the Company.
NOW THEREFORE, for and in consideration of these premises it is agreed
as follows:
1. Incentive Award. Subject to the terms and conditions
contained herein, the Company, effective as of ___ ________________________
(the "Grant Date"), hereby irrevocably grants to Grantee the right and option
("Option") to purchase from the Company _______________ shares ("Award
Shares") of the Company's common stock, $0.01 par value ("Common Stock"), at a
price of $_______________ per share ("Exercise Price"), which is not less than
the Fair Market Value (as defined below) of a share of Common Stock on the
Grant Date. In lieu of exercising the Option, the Grantee may exercise a
"Stock Appreciation Right," which is the right to receive in cash from the
Company an amount equal to (i) all or a portion of the number of outstanding
Award Shares for which Grantee elects to exercise a Stock Appreciation Right,
times (ii) 80% of the Spread (as defined below) on one share of Common Stock
relating to the exercise of such Stock Appreciation Right. Collectively, the
Option and Stock Appreciation Right granted hereunder shall be referred to as
an "Incentive Award." The exercise of either an Option or a Stock Appreciation
Right under this Agreement with respect to a number of shares of Common Stock
shall reduce the number of Award Shares granted under this Agreement.
For the purpose of this Agreement, "Fair Market Value" shall mean as of any
date, the value of common stock determined as follows:
<PAGE> 17
(a) If the Common Stock is listed on any established
stock exchange or a national market system, including without
limitation the Nasdaq National Market or the Nasdaq SmallCap Market of
the Nasdaq Stock Market, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in the
Wall Street Journal or such other source as the Committee deems
reliable; or
(b) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to
the day of determination; or
(c) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith
by the Committee.
For the purpose of this Agreement, "Spread" shall mean an amount equal to the
excess, if any, of the Fair Market Value of a share of Common Stock on the date
such right is exercised over the Exercise Price.
2. Incentive Award Period. The Incentive Award herein granted
may be exercised by Grantee in whole or in part at any time during a ten (10)
year period (the "Incentive Award Period") beginning on the Grant Date, subject
to the limitation that said Incentive Award shall not be exercisable for more
than a percentage of the aggregate number of Award Shares offered by this
Incentive Award determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Anniversary Date
of the Percentage of
Grant Date Award Shares
-------------------- ------------
<S> <C>
4th 50%
5th 30%
6th 20%
</TABLE>
Notwithstanding anything in this Agreement to the contrary, upon the occurrence
of a Change-of-Control (as defined in Section 6) all Incentive Awards then
outstanding shall be come immediately and fully exercisable.
3. Method for Exercise. To purchase shares of Common Stock under
the Option or to exercise the Stock Appreciation Right, the Grantee must give
notice in writing to the Committee (as defined in the Plan) of his or her
intention to purchase/exercise and specify the number of Award
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<PAGE> 18
Shares as to which he or she intends to exercise under an Option or a Stock
Appreciation Right. The Grantee shall indicate in his or her notice whether he
or she elects to exercise the Option or the Stock Appreciation Right under the
Incentive Award. All exercises shall be approved by the Committee. For an
Option exercise, the notice shall be accompanied by cash or cashier's check,
bank draft, postal or express money order payable to the order of the Company.
Notice may also be delivered by fax or telecopy provided that the purchase
price of such shares is delivered to the Company via wire transfer on the same
day the fax is received by the Company. The notice shall specify the address
to which the certificates for such shares are to be mailed. A Grantee shall be
deemed to be a stockholder with respect to shares covered by an Option on the
date the Company receives such written notice and such Option payment. As
promptly as practicable after receipt of such written notification and payment,
the Company shall deliver to the Optionee certificates for the number of shares
with respect to which such Option has been so exercised, issued in the
Grantee's name or such other name as Grantee directs; provided, however, that
such delivery shall be deemed effected for all purposes when a stock transfer
agent of the Company shall have deposited such certificates in the United
States mail, addressed to the Grantee.
4. Termination of Employment. If Grantee's employment with the
Company or any Subsidiary (as defined in the Plan) is terminated during the
Incentive Award Period for any reason other than For Cause (as defined below),
death, Disability (as defined in the Plan) or Retirement (as defined in the
Plan) or if the Grantee ceases to serve on the Board of Directors of the
Company or any Subsidiary (collectively "Board") during the Incentive Award
Period for any reason other than For Cause, death, Disability or Retirement,
the ability of the Grantee to exercise any Incentive Award, whether such
Incentive Award is exercisable or not on such date of termination of employment
or cessation from the Board, shall be determined by the Committee in its sole
discretion. If a Grantee's employment is terminated by the Company or any
Subsidiary For Cause or if Grantee is removed from the Board For Cause (if he
or she is not otherwise an employee of the Company or any Subsidiary), the
Incentive Award granted hereunder, whether exercisable or not, is wholly and
completely terminated. For purposes of this Section, "For Cause" means (i) the
commission of fraud, theft, embezzlement, or a malfeasance involving moral
turpitude or the conviction of, or plea of nolo contendere to, any felony; (ii)
gross negligence, nonfeasance, dishonesty, willful misconduct or substantial
failure to perform employment duties in a manner consistent with normal
standards of job performance after prior evaluation and warning related to such
standards of job performance; or (iii) the appropriation (or attempted
appropriation) of a material business opportunity of the Company or any
Subsidiary.
5. Death, Disability or Retirement. If Grantee's employment with
the Company or any Subsidiary is terminated by his death, Disability or
Retirement or if the Grantee ceases to serve on the Board because of his death,
Disability or Retirement, all Incentive Awards shall be thereafter exercisable
by Grantee, his executor or administrator, or the person or persons to whom his
rights under this Agreement shall pass by will or by the laws of descent and
distribution, as the case may be, for a period of one year from the date of
Grantee's death, Disability or Retirement, unless this
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<PAGE> 19
Agreement should earlier terminate in accordance with its other terms. In no
event may any Incentive Award be exercised after the end of the Incentive Award
Period.
6. Change-of-Control. If approved by the Board of Directors of
the Company prior to a Change-of-Control, such Board shall have the right,
during the sixty (60) day period immediately following the date of the
Change-of- Control, to require the Grantee to redeliver to the Company all, but
not less than all Incentive Awards previously granted to the Grantee in
exchange for an amount equal to the Spread on the outstanding Awards Shares
subject to the Incentive Award granted herein. Such right shall be exercised
by written notice to the Grantee.
For purposes of this Agreement, the following events shall be deemed
to constitute a "Change-of-Control":
(a) if any person (including a group as defined
in Section 13(d)(3) of the Exchange Act), excluding Pacific
USA Holdings Corp., Pacific Realty Group, Inc., or any
affiliate of such entities, becomes, directly or indirectly,
the beneficial owner of 50% or more of the combined voting
power of the Company's then outstanding voting securities;
(b) as a result of or in connection with any
tender offer, exchange offer, merger, or other business
combination, sale of assets or contested election, or any
combination of the foregoing, the persons who were members of
the Board of the Company just prior to such event cease to
constitute a majority of the Board of the Company or its
successor;
(c) the stockholders of the Company approve a
merger or consolidation of the Company with another
corporation and as a result of such merger or consolidation
less than 70% of the outstanding voting securities for the
surviving or resulting corporation shall then be owned in the
aggregate by the former stockholders of the Company, other
than (A) any party to such merger or consolidations, or (B)
any affiliates to any such party;
(d) a tender offer or exchange offer is made by
an entity other than Pacific USA Holdings Corp. or its
subsidiaries, and consummated for the ownership of securities
of the Company representing 50% or more of the combined voting
power of the Company's then outstanding voting securities; or
(e) the stockholders of the Company approve a
plan of liquidation or an agreement for the sale or transfer
of substantially all of the Company's assets to another
corporation that is not a wholly owned corporation of the
Company.
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<PAGE> 20
7. Transferability. The Incentive Award shall not be
transferable by Grantee otherwise than by Grantee's will or by the laws of
descent and distribution. During the lifetime of Grantee, the Incentive Award
shall be exercisable only by him. Any heir or legatee of Grantee shall take
rights herein granted subject to the terms and conditions hereof. No such
transfer of this Agreement to heirs or legatees of Grantee shall be effective
to bind the Company unless the Company shall have been furnished with written
notice thereof and a copy of such evidence as the Committee may deem necessary
to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.
8. No Rights as Stockholder. The Grantee shall have no rights as
a stockholder with respect to any shares of Common Stock until the proper and
complete exercise of the Incentive Award. However, an additional Incentive
Award will be made to Grantees as the result of dividend payments or other
distributions with respect to Common Stock, under the following circumstances.
If, and only if, the cumulative dividends or other distributions for any
calendar year exceed five percent of the Fair Market Value of Common Stock,
determined as of January 1 of each year, the Grantee shall be awarded on
December 31 of such year additional Award Shares subject to the Incentive
Award, the amount of which shall be calculated by dividing (i) the cumulative
dividends or other distributions for any calendar year which the Grantee would
have received, had the Award Shares outstanding received the same distributions
as Common Stock by (ii) the Fair Market Value of a share of Common Stock as of
December 31 of such year (rounded down to the nearest whole share). The
Exercise Price per share of Common Stock for any additional Award Shares shall
be determined in accordance with Section 2.3(a) of the Plan. Any additional
Award Shares shall vest under Section 2 hereof as if part of the original
Incentive Award held by Grantee.
9. Changes in Capital Structure. In the event the outstanding
shares of the Common Stock, as constituted from time to time, shall be changed
as a result of a change in capitalization of the Company or a combination,
merger, or reorganization of the Company into or with any other corporation or
any other transaction with similar effects, there then shall be substituted (at
no additional cost to any Grantee) for each share of Common Stock heretofore
subject to an Award Share, or which may become subject, to issuance or transfer
under this Agreement, the number and kind of shares of common stock or other
securities or other property into which each outstanding share of Common Stock
shall be changed or for which each such share shall be exchanged and the
Committee may make any other equitable adjustment which it deems to be
warranted at no additional cost to any Grantee but subject to any required
stockholder approval.
10. Compliance With Securities Laws. Upon the acquisition of any
shares pursuant to the exercise of the Option herein granted, Grantee (or any
person acting under Section 7) will enter into such written representations,
warranties and agreements as the Company may reasonably request in order to
comply with applicable securities laws or with this Agreement.
-5-
<PAGE> 21
11. Compliance With Laws. Notwithstanding any of the other
provisions hereof, Grantee agrees that he will not exercise the Option(s)
granted hereby, and that the Company will not be obligated to issue any shares
pursuant to this Agreement, if the exercise of the Option(s) or the issuance of
such shares of Common Stock would constitute a violation by the Grantee or by
the Company of any provision of any law or regulation of any governmental
authority.
12. Withholding of Tax. To the extent that the exercise of the
Incentive Award or the disposition of shares of Common Stock acquired by
exercise of the Option results in compensation income to the Grantee for
federal or state income tax purposes, the Grantee shall pay to the Company at
the time of such exercise or disposition (or such other time as the law permits
if the Grantee is subject to Section 16(b) of the Securities Exchange Act of
1934, as amended) such amount of money as the Company may require to meet its
obligation under applicable tax laws or regulations; and, if the Grantee fails
to do so, the Company is authorized to withhold from any cash remuneration then
or thereafter payable to the Grantee, any tax required to be withheld by reason
of such resulting compensation income or Company may otherwise refuse to issue
or transfer any shares otherwise required to be issued or transferred pursuant
to the terms hereof.
13. Resolution of Disputes. As a condition of the granting of the
Incentive Award hereby, the Grantee and his heirs and successors agree that any
dispute or disagreement which may arise hereunder shall be determined by the
Committee in its sole discretion and judgment, and that any such determination
and any interpretation by the Committee of the terms of this Agreement shall be
final and shall be binding and conclusive, for all purposes, upon the Company,
Grantee, his heirs and personal representatives.
14. Legends on Certificate. The certificates representing the
shares of Common Stock purchased by exercise of an Option will be stamped or
otherwise imprinted with legends in such form as the Company or its counsel may
require with respect to any applicable restrictions on sale or transfer and the
stock transfer records of the Company will reflect stop-transfer instructions
with respect to such shares.
15. Notices. Every notice hereunder shall be in writing and shall
be given by registered or certified mail or by fax or telecopy. All notices of
the exercise of any Incentive Award hereunder shall be directed to Newmark
Homes Corp., 1200 Soldiers Field Drive, Sugarland, Texas 77479, Attention:
Secretary. Any notice given by the Company to Grantee directed to him or her
at his or her address on file with the Company shall be effective to bind him
and any other person who shall acquire rights hereunder. The Company shall be
under no obligation whatsoever to advise Grantee of the existence, maturity or
termination of any of Grantee's rights hereunder and Grantee shall be deemed to
have familiarized himself with all matters contained herein and in the Plan
which may affect any of Grantee's rights or privileges hereunder.
-6-
<PAGE> 22
16. Construction and Interpretation. Whenever the term "Grantee"
is used herein under circumstances applicable to any other person or persons to
whom this award, in accordance with the provisions of Section 7 hereof, may be
transferred, the word "Grantee" shall be deemed to include such person or
persons. References to the masculine gender herein also include the feminine
gender for all purposes.
17. Agreement Subject to Plan. This Agreement is subject to the
Plan. The terms and provisions of the Plan (including any subsequent
amendments thereto) are hereby incorporated herein by reference thereto. In
the event of a conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and provisions of the Plan
will govern and prevail. All definitions of words and terms contained in the
Plan shall be applicable to this Agreement.
18. Employment Relationship. Employees shall be considered to be
in the employment of the Company or any Subsidiary as long as they remain
employees of the Company or any Subsidiary. Any questions as to whether and
when there has been a termination of such employment and the cause of such
termination, shall be determined by the Committee, and its determination shall
be final. Nothing contained herein shall be construed as conferring upon the
Grantee the right to continue in the employ of the Company, nor shall anything
contained herein be construed or interpreted to limit the "employment at will"
relationship between the Grantee and the Company.
19. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons lawfully
claiming under Grantee.
IN WITNESS WHEREOF, this Agreement has been executed as of the
_________________ day of _________________________________, 199_____.
NEWMARK HOMES CORP.
By:
--------------------------------
Grantee
----------------------------------
Name:
------------------------------
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