SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
*------------------*
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
*-------------------*
INTERNATIONAL AMERICAN HOMES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
INTERNATIONAL AMERICAN HOMES, INC.
(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(i)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1).
4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration No.:
3) Filing Party:
4) Date Filed:
- ----------
(1). Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
August 4, 1995
To Our Stockholders:
It is my pleasure to invite you to attend the 1995 Annual Meeting of
Stockholders of International American Homes, Inc., to be held at 11:00
A.M. on Tuesday, September 12, 1995 at Bethesda Country Club, 7601 Bradley
Boulevard, Bethesda, Maryland.
At the meeting, in addition to considering and acting upon the election
of directors and the approval of Arthur Andersen LLP as auditors for the
Company's financial statements, stockholders will also be requested to
consider and vote upon proposals to approve certain amendments to the
Company's Non-Qualified Stock Option Plan, including an increase in the
number of shares reserved for issuance thereunder, and to adopt a Non-
Employee Directors Stock Option Plan for the Company. Additional
information concerning these matters is included in the attached Notice of
Annual Meeting of Stockholders and in the accompanying Proxy Statement.
The Board of Directors of the Company recommends that all stockholders vote
for each of its nominees for director and in favor of each proposal.
Your vote is important regardless of the number of shares you may own.
We strongly encourage all stockholders to participate by voting their
shares by proxy whether or not they plan to attend the meeting. Please
sign, date and mail the enclosed proxy as soon as possible. If you do
attend the meeting, you may still vote in person.
Sincerely,
Robert J. Suarez
Chairman of the Board and President
<PAGE>
_________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held
September 12, 1995
__________________________________________________
To our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of
International American Homes, Inc., a Delaware corporation (the "Company"),
will be held at 11:00 A.M. on Tuesday, September 12, 1995 at Bethesda Country
Club, 7601 Bradley Boulevard, Bethesda, Maryland, for the purpose of
considering and acting upon the following matters as set forth in the
accompanying Proxy Statement:
1. To elect three Directors to hold office as specified in the accompanying
Proxy Statement;
2. To consider and vote upon a proposal to amend the Company's Non-Qualified
Stock Option Plan (the "Non-Qualified Stock Option Plan") so as to increase the
number of shares of common stock of the Company subject to the Plan, clarify
the language describing the vesting schedule for options granted thereunder,
provide that outside directors will no longer be eligible to receive options
thereunder if a non-employee directors stock option plan is approved by the
Company's stockholders and becomes effective, entitle the Company to require
an option holder who exercises an option to remit in addition to the exercise
price an amount sufficient to satisfy applicable withholding tax requirements,
and extend the term of the plan to June 22, 2005;
3. To consider and vote upon a proposal to approve a Non-Employee Directors
Stock Option Plan for the Company;
4. To approve the appointment of Arthur Andersen LLP as auditors of the
financial statements of the Company and its consolidated subsidiaries for the
fiscal year ending March 31, 1996; and
5. To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
Only stockholders of record at the close of business on July 14, 1995 are
entitled to notice of and to vote at the meeting or any adjournment or
postponement thereof.
By Order of the Board of Directors,
Robert I. Antle
Executive Vice President and Secretary
August 4, 1995
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE MARK, SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED
POSTAGE-PAID, ADDRESSED ENVELOPE. YOU MAY NEVERTHELESS VOTE IN PERSON IF YOU
ATTEND THE MEETING.
<PAGE>
Page 1
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of International American Homes, Inc., a
Delaware corporation (the "Company"), for the Annual Meeting of Stockholders of
the Company to be held at 11:00 A.M. on Tuesday, September 12, 1995 at Bethesda
Country Club, 7601 Bradley Boulevard, Bethesda, Maryland, and at any
adjournment or postponement thereof (the "Meeting"). The approximate date on
which this Proxy Statement and proxy included herewith are first being sent to
stockholders is August 4, 1995. The mailing address of the Company's principal
executive offices is 6001 Montrose Road, Suite 910, Rockville, Maryland 20852.
Stockholders are requested to execute and return the enclosed proxy in the
accompanying envelope, which requires no postage if mailed in the United
States. Execution and return of the proxy in the accompanying form will not in
any way affect a stockholder's right to attend the Meeting and, if the proxy is
revoked, to vote in person. Proxies which are returned properly executed and
not revoked will be voted in accordance with the instructions therein or, if no
instruction is given, for the election of the Board of Directors' nominees for
director and the proposals described herein. A stockholder giving a proxy may
revoke it any time before it is exercised by filing with the Secretary of the
Company a written revocation or duly executed proxy bearing a later date.
Presence at the Meeting will not, in and of itself, revoke the proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
VOTING SECURITIES
Only stockholders of record at the close of business on July 14, 1995 (the
"Record Date") are entitled to notice of and to vote at the Meeting. The
outstanding voting securities of the Company on the Record Date consisted of
2,612,132 shares of common stock, par value $.01 per share ("Common Stock").
Each share of Common Stock entitles the holder thereof to one vote on all
matters to come before the Meeting, including the election of directors. All
references in this Proxy Statement to numbers of shares of Common Stock reflect
a one-for-ten reverse stock split (the "Stock Split") that was approved by the
Company's stockholders on September 13, 1994 and became effective at the close
of business on May 31, 1995.
<PAGE>
Page 2
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of
the Common Stock as of July 14, 1995 held by each person who is known by the
Company to be the beneficial owner of more than five percent (5%) of the issued
and outstanding shares of Common Stock. To the knowledge of management, no
other person owns beneficially more than five percent (5%) of the outstanding
shares of Common Stock:
Number of Shares Percent
Name and Address Beneficially Owned of Class
- ---------------- ------------------ --------
U.S. Industries, Inc. 233,210 8.93%
101 Wood Avenue South
Iselin, New Jersey 08830
Robert J. Suarez (1) 206,230 7.75%
9950 Princess Palm Avenue, Suite 112
Tampa, Florida 33619
Resolution Trust Corporation, as Receiver 198,515 7.60%
for United Federal Savings Bank and as
Receiver for Lincoln Savings & Loan
Association, F.A.
801 Seventeenth Street, N.W.
Washington, D.C. 20434
- --------------------
(1)Includes 50,000 shares of Common Stock which Mr. Suarez has the right to
acquire within sixty (60) days through the exercise of options. Such shares
are deemed to be outstanding for the purpose of computing the percentage of
class beneficially owned by Mr. Suarez, but not for the purpose of computing
the percentage of class beneficially owned by any other person.
<PAGE>
Page 3
The following table sets forth certain information regarding the ownership of
the Common Stock as of July 14, 1995 held by each director of the Company, and
each executive officer whose name appears in the Summary Compensation Table
below, and all directors and executive officers as a group. Except as noted,
the individuals named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them:
Number of Shares Percent
Name Beneficially Owned of Class
- ---- ------------------ --------
Robert J. Suarez (1) 206,230 7.75%
Kenneth W. Carlson 26,498 1.01%
Ronald I. Garshag (2) 84,111 3.21%
William D. Aiken 0 *
Dionel Cotanda 11,856 *
Peter A. Davis 92,067 3.52%
Robert E. Everett 0 *
Brian Gibney 0 *
Philip T. Mercer (3) 4,526 *
Jeffrey D. Prol 1,000 *
Robert I. Antle (4) 12,795 *
Michael P. Villa (5) 5,528 *
All current directors and executive 360,801 13.54%
officers as a group (12 persons) (6)
- -------------------
* Less than one percent (1%).
(1)Includes 50,000 shares of Common Stock which Mr. Suarez has the right to
acquire within sixty (60) days through the exercise of options. Such shares
are deemed to be outstanding for the purpose of computing the percentage of
class beneficially owned by Mr. Suarez, but not for the purpose of computing
the percentage of class beneficially owned by any other person.
(2)Includes 10,000 shares of Common Stock which Mr. Garshag has the right to
acquire within sixty (60) days through the exercise of options. Such shares
are deemed to be outstanding for the purpose of computing the percentage of
class beneficially owned by Mr. Garshag, but not for the purpose of
computing the percentage of class beneficially owned by any other person.
Mr. Garshag retired on May 12, 1995.
(3)Includes 4,526 shares of Common Stock owned by Thulman Eastern
Corporation, which is wholly owned by Mr. Mercer.
(4)Includes 750 shares of Common Stock which Mr. Antle has the right to
acquire within sixty (60) days through the exercise of options. Such shares
are deemed to be outstanding for the purpose of computing the percentage of
class beneficially owned by Mr. Antle, but not for the purpose of computing
the percentage of class beneficially owned by any other person.
(5)Includes 750 shares of Common Stock which Mr. Villa has the right to
acquire within sixty (60) days through the exercise of options. Such shares
are deemed to be outstanding for the purpose of computing the percentage of
class beneficially owned by Mr. Villa, but not for the purpose of computing
the percentage of class beneficially owned by any other person.
<PAGE>
Page 4
(6)Includes 51,800 shares of Common Stock which current officers and
directors (excluding Mr. Garshag) have the right to acquire within sixty
(60) days through the exercise of options. Such shares are deemed to be
outstanding for the purpose of computing the percentage of class
beneficially owned by the directors and executive officers as a group, but
not for the purpose of computing the percentage of class beneficially owned
by any other group.
ELECTION OF DIRECTORS
On April 16, 1990, the Company and certain of its wholly-owned subsidiaries
filed voluntary petitions (the "Bankruptcy Petitions") for relief under Chapter
11, Title 11 of the United States Code in the United States Bankruptcy Court
for the District of New Jersey (the "Bankruptcy Court"). Certain related
partnerships filed similar petitions in the Bankruptcy Court in 1990 and 1991.
Under the bankruptcy proceedings, substantially all claims against the Company
as of the date of the filing of the Bankruptcy Petitions were stayed while the
Company continued operations as a debtor-in-possession.
A Third Amended Joint Plan of Reorganization dated June 29, 1992 was filed
with the Bankruptcy Court. A Second Amended Disclosure Statement with respect
to the Third Amended Joint Plan of Reorganization and the exhibits thereto was
approved by the Bankruptcy Court on June 29, 1992. On August 12, 1992, the
Bankruptcy Court entered an order confirming the Third Amended Joint Plan of
Reorganization. The Plan became effective on August 27, 1992 (the "Effective
Date"). On October 29, 1992 the Bankruptcy Court approved certain technical
modifications to the Third Amended Joint Plan of Reorganization effective as of
August 12, 1992. A Fourth Amended Joint Plan of Reorganization dated November
17, 1992 containing those technical modifications was filed with the Bankruptcy
Court. (The Third Amended Joint Plan of Reorganization and the Fourth Amended
Joint Plan of Reorganization are collectively referred to as the "Plan" or the
"Plan of Reorganization".)
The Plan stipulates how the Board of Directors is to be formed during the six
year period beginning on the Effective Date. The Plan provides that during
that six year period, the Board of Directors shall consist of (i) the
Presidents of Suarez Housing Corporation and Porten Sullivan Corporation, the
principal subsidiaries of the Company; (ii) four directors to be appointed by
the Creditors Committees; and (iii) three directors to be elected by the
stockholders. Four directors were appointed by the Creditors Committees in
1992. Pursuant to the Plan, the terms of office of the three directors elected
by the stockholders at the 1994 Annual Meeting expire at the Meeting. The
directors who are to be elected by the stockholders at the Meeting will serve a
term of three years or until their respective successors are elected and
qualified at the following Annual Meeting. The Board of Directors has
nominated Peter A. Davis, Philip T. Mercer and Jeffrey D. Prol for reelection
as directors of the Company. All nominees have consented to serve if so
elected; but, if for any reason any of those persons should not be available or
able to serve at the time of the Meeting, the accompanying proxy will be voted
for the election of such other person or persons as the Board of Directors may
recommend.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ITS NOMINEES
FOR DIRECTORS, AND SIGNED PROXIES WHICH ARE RETURNED WILL BE SO VOTED UNLESS A
CONTRARY VOTE IS DESIGNATED ON THE PROXY CARD.
<PAGE>
Page 5
The following table sets forth, as to each nominee for director and for each
director continuing in office, such director's name, his age, the year in which
he was first elected a director of the Company, his principal occupation during
the past five years and certain other directorships, if any, held by him.
Name, Age, Principal Occupation, Served as
And Other Directorships Director Since
- -------------------------------- --------------
Nominees for the Board of Directors
- -----------------------------------
Peter A. Davis (age 58)....................................................1994
Mr. Davis has been a consultant to the Company since November 1992. Mr.
Davis was employed by the Company from January 1985 to November 1992 in
various capacities. From June 1989 until September 1992 he served as
Executive Vice President of the Company and from January 1985 to June 1989
he served as the Chief Financial Officer of the Company. From May 1988 to
September 1992 he was a director of the Company. Mr. Davis is a Certified
Public Accountant.
Philip T. Mercer (age 49)..................................................1994
Mr. Mercer has for a period of more than five years been the Chief
Executive Officer of Thulman Eastern Corporation, a company of which he is
the sole stockholder. Thulman Eastern Corporation is a multi-state
distributor of specialty products to the residential building industry and
is the largest distributor of engineered fireplaces in the United States.
Thulman Eastern Corporation is headquartered in Annapolis Junction,
Maryland with distributorships located from New Jersey to North Carolina.
Jeffrey D. Prol (age 32)...................................................1994
Mr. Prol is an attorney and has been associated with the law firm of
Ravin, Sarasohn, Cook, Baumgarten, Fisch & Baime, P.C. ("Ravin, Sarasohn")
of Roseland, New Jersey since 1989. Ravin, Sarasohn served as counsel to
the Company in connection with the Bankruptcy Petitions. Mr. Prol was one
of the principal attorneys involved in that matter.
DIRECTORS CONTINUING IN OFFICE
Robert J. Suarez (age 46) .................................................1992
Mr. Suarez was appointed Chairman and President of the Company in
September 1992. He co-founded Suarez Housing Corporation in 1974. Mr.
Suarez has for more than five years served as Chairman and President of
Suarez Housing Corporation.
Kenneth W. Carlson (age 61) ...............................................1995
Mr. Carlson became a member of the Board of Directors in May 1995 when he
was appointed President of Porten Sullivan Corporation upon the retirement
of Ronald I. Garshag. Mr. Carlson has served as President and Chairman of
Porten Sullivan Corporation since May 1995. Prior to 1995, and for a
period of more than five years, Mr. Carlson was the President and Chief
Executive Officer of Diversified Homes, a company in which he was the sole
stockholder. Diversified Homes was a diversified integrated homebuilding
company which operated in Maryland, Virginia and Florida.
William D. Aiken (age 38) .................................................1992
Mr. Aiken was appointed to the Board of Directors by the Official
Creditors Committee in the Reorganization Cases of International American
Homes, Inc., Inland Pacific
<PAGE>
Page 6
Communities, Inc., Porten Sullivan Corporation of Florida, Suarez
Housing Corporation, Beacon Hill Farm Associates II and Lakeview
Professional Park (the "IAH Creditors Committee"). Mr. Aiken is
also a director of Suarez Housing Corporation. Mr. Aiken is a Certified
Public Accountant engaged in private practice in Lake Worth, Florida since
1992. Prior to 1992, and for a period of more than five years, Mr. Aiken
was the Chief Financial Officer of Pope Associates, Tru-Line Industries
and ADP Lumber, which were primarily engaged in the businesses of retail
building materials and roof and floor truss manufacturing in Southeastern
Florida.
Dionel Cotanda (age 57) ...................................................1992
Mr. Cotanda was appointed to the Board of Directors by the IAH Creditors
Committee. Mr. Cotanda is also a director of Suarez Housing Corporation.
Mr. Cotanda has been President, Chief Executive Officer and director of
Robbins Engineering, Inc. since its organization in 1990. In addition,
Mr. Cotanda has for a period of more than five years been Vice President
and since 1993 been a director of Robbins Manufacturing Company. Robbins
Engineering, Inc. is a supplier of engineering services, metal plate
connectors and software to the metal plate connected wood truss industry.
Robbins Manufacturing Company is a supplier of metal plate connected wood
trusses, lumber and related building material products. Robbins
Engineering, Inc. and Robbins Manufacturing Company are both located in
Tampa, Florida.
Robert E. Everett (age 62) ................................................1992
Mr. Everett was appointed to the Board of Directors by the Official
Creditors Committee in the Reorganization Cases of Porten Sullivan
Corporation and J&S Development Associates (the "Porten Sullivan Creditors
Committee"). Mr. Everett is also a director of Porten Sullivan
Corporation. Mr. Everett has for a period of more than five years been
Executive Vice President of McCrea Equipment Company, Inc., a heating,
ventilating and air conditioning contractor in the Metropolitan
Washington, D.C. area.
Brian Gibney (age 43) ........,............................................1992
Mr. Gibney was appointed to the Board of Directors by the Porten Sullivan
Creditors Committee. Mr. Gibney is also a director of Porten Sullivan
Corporation. Mr. Gibney is a Certified Public Accountant, and has for a
period of more than five years been a shareholder in the public accounting
firm of M.D. Oppenheim & Company in Piscataway, New Jersey where he is
engaged in commercial auditing and accounting and litigation support
practice.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
In June 1994, the Board of Directors formed an Executive Committee effective
as of July 15, 1994. The Executive Committee has the authority to review and
approve all land acquisitions by the Company's subsidiaries and all guaranties
by the Company of loans to the Company's subsidiaries. Members of the
Executive Committee are Mr. Suarez, Mr. Carlson, Mr. Cotanda, Mr. Davis and Mr.
Everett.
On September 13, 1994, the Board of Directors formed an Audit Committee
effective as of that date. The Audit Committee reviews the Company's internal
controls, accounting policies, financial reporting and the scope and results of
the audit engagement. It meets with appropriate Company financial personnel
and independent auditors in connection with these reviews. The Committee also
recommends
<PAGE>
Page 7
to the Board the appointment of the independent auditors. Members of the
Audit Committee are Mr. Gibney, Mr. Aiken and Mr. Davis.
On September 13, 1994, the Board of Directors formed a Compensation Committee
effective as of that date. The Compensation Committee makes recommendations to
the Board of Directors regarding the amount of and form of compensation awarded
to the executive officers of the Company and to other employees of the Company
whose annual salaries exceed $75,000 per year. The Compensation Committee also
administers the Company's Non-Qualified Stock Option Plan. Members of the
Compensation Committee are Mr. Cotanda, Mr. Davis and Mr. Everett.
On September 13, 1994, the Board of Directors formed a Nominating Committee
effective as of that date. The Nominating Committee recommends to the Board of
Directors candidates for election as directors and will consider nominations by
stockholders submitted in writing to the Chairman of the Board of Directors.
Members of the Nominating Committee are Mr. Suarez, Mr. Carlson and Mr.
Cotanda.
On September 13, 1994, the Board of Directors formed a Conflicts of Interest
Committee effective as of that date. The Conflicts of Interest Committee
approves transactions involving any actual or potential conflict of interest
between the Company and any officer, director, employee or agent. Members of
the Conflicts of Interest Committee are Mr. Prol, Mr. Mercer and Mr. Gibney.
Five meetings of the Board of Directors were held during the fiscal year
ended March 31, 1995. All of the Directors attended more than 75% of the
meetings of the Board of Directors. No committee meetings were held during the
fiscal year ended March 31, 1995.
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no additional remuneration
for their services as directors. Non-employee directors -- those directors not
entitled to receive any salary from the Company or its subsidiaries -- receive
for each Board or committee meeting attended a fee of $1,000 and reasonable
travel and other out-of-pocket expenses incurred. See "Executive Compensation
- -- Compensation Committee Interlocks and Insider Participation" for information
regarding the consulting agreement between the Company and Mr. Peter A. Davis.
<PAGE>
Page 8
EXECUTIVE OFFICERS
Set forth below is certain information concerning the executive officers of
the Company who are not directors, including all positions and offices with the
Company held by each such person, the person's age, the period during which he
served as such, the person's principal occupation and employment during the
past five years and the name and principal business of any corporation or other
organization in which such occupation and employment was carried on. Such
information concerning all other executive officers of the Company (who also
are directors of the Company) is set forth in the table above relating to
directors of the Company. The term of office of each executive officer of the
Company expires in accordance with the Bylaws of the Company.
Robert I. Antle (age 40)
Robert I. Antle became Vice President and Secretary of the Company in
September 1992. In February 1995 he became Executive Vice President and
Secretary of the Company. He has for more than five years been employed
by Suarez Housing Corporation, and currently serves as Vice President,
Secretary and Chief Financial Officer of that company.
Michael P. Villa (age 41)
Michael P. Villa became Vice President, Treasurer and Chief Financial
Officer of the Company in September 1992. Since 1990 he has served as
Chief Financial Officer of Porten Sullivan Corporation and he currently
serves as Vice President, Treasurer and Secretary of that company. Prior
to joining Porten Sullivan Corporation, Mr. Villa served for three years
as Vice President and Chief Financial Officer of Miller and Smith Homes,
Inc., a residential real estate development company in the Metropolitan
Washington, D.C. area.
Pamela A. Perez (age 35)
Pamela A. Perez became Vice President and Assistant Secretary of the
Company in September 1992 and since then has served as Controller of the
Company. She has for more than five years been employed by Porten
Sullivan Corporation and currently serves as Controller of that company.
Effective as of May 12, 1995, Ronald I. Garshag retired from all positions he
held with the Company. From September 1992 until his retirement, Mr. Garshag
was Executive Vice President of the Company. He also served as President and
Chairman of Porten Sullivan Corporation from 1989 until his retirement.
There are no family relationships among the directors and executive officers
of the Company.
<PAGE>
Page 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of annual and long-term compensation
paid by the Company during the fiscal years ended March 31, 1995, 1994 and 1993
to the Chief Executive Officer of the Company and to the other executive
officers of the Company whose total compensation for the fiscal year ended
March 31, 1995 was in excess of $100,000.
<TABLE>
<CAPTION>
Summary Compensation
Table (1)
Long-Term
Annual Compensation
Compensation Awards
-------------------------------------- --------------
Number of
Securities
Underlying
Name and Salary Bonus Stock
Principal Position Year ($) ($) Options (4)
- ---------------------------- ------ ------------- ---------------- --------------
<S> <C> <C> <C> <C>
Robert J. Suarez, (2) 1995 $262,006 0 0
Chairman and President 1994 254,687 0
1993 250,000 50,000
Ronald I. Garshag, (2)(3) 1995 $189,139 0 0
Executive Vice 1994 176,090 10,000
President 1993 165,192 0
Robert I. Antle, (2) 1995 $140,300 $13,000 0
Executive Vice 1994 112,548 35,000 0
President and Secretary 1993 88,894 0 2,500
Michael P. Villa, (2) 1995 $102,923 0 0
Vice President, 1994 84,231 0
Treasurer and Chief 1993 68,077 2,500
Financial Officer
</TABLE>
- -------------------
(1)The columns designated for the reporting of other annual compensation,
restricted stock awards, long-term incentive plan payouts and all other
compensation have been deleted as no compensation of a type required to be
reported under such columns was paid to the named executive officers during
the period covered by the table.
(2)Upon the confirmation of the Plan of Reorganization on August 12, 1992,
Suarez Housing Corporation and Porten Sullivan Corporation entered into
employment agreements with Robert J. Suarez and Ronald I. Garshag,
respectively. See "Employment Agreements" below. Subsequently, in
September 1992, Mr. Suarez, Mr. Garshag, Mr. Antle and Mr. Villa were
appointed to their positions as Chairman and President, as Executive Vice
President, as Vice President and Secretary, and as Vice President, Treasurer
and Chief Financial Officer of the Company, respectively. Mr. Antle was
subsequently elevated to the rank of Executive Vice President. Accordingly,
the compensation appearing on the table above represents all compensation
received by the named executive officers from Suarez Housing Corporation, in
the case of Mr. Suarez and Mr. Antle, and Porten Sullivan Corporation, in
the case of Mr. Garshag and Mr. Villa, during the fiscal years ended March
31, 1995, 1994 and 1993. The named executive officers do not receive
compensation directly from the Company.
(3)Mr. Garshag retired effective May 12, 1995.
(4)The Company does not grant stock appreciation rights of any kind.
<PAGE>
Page 10
STOCK OPTIONS
No stock options were granted to any named executive officers
during the fiscal year ended March 31, 1995.
The following table sets forth certain information with respect
to the named executive officers concerning the exercise of stock
options during the fiscal year ended March 31, 1995 and the value
of unexercised stock options held as of March 31, 1995.
<TABLE>
<CAPTION>
Aggregated Option Exercises in the Last Fiscal Year and Year-End Option Values
Number of Securities Value of Securities
Shares Underlying Unexercised Underlying Unexercised
Acquired Options In-the-Money Options
on Value at Fiscal Year End at Fiscal Year End ($)(1)
Exercise Realized --------------------------- -----------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. 0 $ 0 25,000 25,000 $18,750 $18,750
Suarez
Ronald I. 0 0 1,000 9,000 650 5,850
Garshag
Robert I. 0 0 750 1,750 562 1,313
Antle
Michael P. 0 0 750 1,750 562 1,313
Villa
</TABLE>
- ---------------------
(1)The fair market value of the Common Stock at the Company's fiscal year end,
March 31, 1995, was $1.25 per share as reported by the National Quotation
Bureau. Such reported price reflects inter-dealer prices, without retail
mark-up, mark-down or commission and may not necessarily represent actual
transactions.
EMPLOYMENT AGREEMENTS
In accordance with the terms of the Plan, the Company entered into employment
agreements with Robert J. Suarez and with Ronald I. Garshag. The employment
agreements were approved by the Bankruptcy Court as part of the Plan.
ROBERT J. SUAREZ. Robert J. Suarez is currently employed by the Company as
Chairman and President. He is also employed by Suarez Housing Corporation as
Chairman and President pursuant to an employment agreement that became
effective as of the date of confirmation of the Plan, August 12, 1992. The
employment agreement originally was to expire on August 12, 1995 and was
extended by the Board in June 1995 for three additional years, subject to
certain modifications, so that it now expires on August 12, 1998. The
employment agreement provides for base compensation during the initial three
year term of $250,000 per annum to be adjusted annually in accordance with
changes in the Consumer Price Index ("CPI"). At August 12, 1993 the base
compensation was adjusted to $257,500 per annum, and at August 12, 1994 the
base compensation was adjusted to $264,710 per annum. Mr. Suarez' base
compensation will be increased to $290,000 on August 12, 1995 and thereafter
will be adjusted annually in accordance with changes in the CPI. The
employment agreement can be terminated at any time for cause, without any
further payment. If the employment agreement is terminated without cause, Mr.
Suarez shall be entitled to additional compensation as follows: (i) if
termination occurs after August 12,
<PAGE>
Page 11
1994 but before August 12, 1995, additional compensation shall be equal to
twelve months' pay; and (ii) if termination occurs after August 12, 1995,
additional compensation shall be equal to six months' pay. The employment
agreement, as extended, provides that in the event his employment
agreement is not renewed on substantially the same terms and conditions,
the Company will pay Mr. Suarez six months' base compensation in
return for his consulting services during such period. Mr. Suarez agreed, for
a number of months (such number of months to coincide with the number of months
of termination or non-renewal benefit) after any termination of his employment,
not to engage in any business enterprise involving the sale and/or construction
of residential housing in direct competition with the Company. Mr. Suarez also
agreed, for one year after any termination of his employment, not to induce any
employee of the Company to render any services, absent the Company's prior
written approval, to or for any person or entity in direct competition with the
Company's then existing construction activities.
RONALD I. GARSHAG. Ronald I. Garshag was employed by the Company as
Executive Vice President until his retirement on May 12, 1995. He was also
employed by Porten Sullivan Corporation as Chairman and President pursuant to
an employment agreement that became effective as of the date of confirmation of
the Plan, August 12, 1992. The employment agreement originally expired on
August 12, 1994 and was extended by a Letter Agreement dated May 3, 1994 for
one additional year so that it would expire on August 12, 1995. The employment
agreement provides for base compensation of $175,000 per annum to be adjusted
annually in accordance with changes in the CPI. At August 12, 1993 the base
compensation was adjusted to $180,250 per annum, and at August 12, 1994 the
base compensation was adjusted to $183,314. Mr. Garshag continues to receive
the compensation stipulated by the employment agreement from the date of his
retirement until its expiration on August 12, 1995 (approximately $46,000).
Prior to Mr. Garshag's retirement, the Company had elected not to renew Mr.
Garshag's employment agreement and therefore the Company is obligated by the
terms of that agreement to pay Mr. Garshag six months' base compensation
(approximately $92,000), in return for his consulting services during such
period. Mr. Garshag is subject to provisions in the agreement which state that
for six months after termination of his employment, he may not engage in any
business enterprise involving the sale and/or construction of residential
housing in direct competition with the Company. Mr. Garshag's employment
agreement further provides that for one year after termination of his
employment, he may not induce any employee of the Company to render any
services, absent the Company's prior written approval, to or for any person or
entity in direct competition with the Company's then existing construction
activities.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Although the Board of Directors of the Company appointed a Compensation
Committee on September 13, 1994 (the members of which are Mr. Cotanda, Mr.
Davis and Mr. Everett), the compensation received by the executive officers of
the Company during the fiscal year ended March 31, 1995 was determined prior to
the formation of the Compensation Committee and was instead approved by the
members of the entire Board of Directors. Two such members were Robert J.
Suarez, Chairman and President of the Company, and Ronald I. Garshag, who
served as Executive Vice President of the Company until his retirement on May
12, 1995. See "Summary Compensation Table" and "Employment Agreements" above
for a discussion of Mr. Suarez' and Mr. Garshag's compensation.
Effective January 1993, Mr. Suarez agreed to personally guarantee certain
bank loans for Suarez Housing Corporation. At March 31, 1995, the maximum
aggregate principal amount of loans that could be guaranteed was $19,250,000,
and the outstanding aggregate principal amount of those loans at March 31, 1995
guaranteed was $6,358,000. The Company has agreed to indemnify Mr. Suarez in
the event that this personal guarantee is called upon, and to the extent that
Mr. Suarez makes any payments on
<PAGE>
Page 12
account of the guarantees, he will succeed to the secured interests
of the party to whom the payment is made. The Board of Directors has
granted additional compensation to Mr. Suarez in consideration for his
personal guarantees. The additional compensation is equal to one
percent (1%) per annum of the maximum aggregate principal amount of loans that
could be guaranteed. Mr. Suarez has voluntarily limited such compensation to
$80,000 per year. During the fiscal year ended March 31, 1995, the Company
paid $80,000 to Mr. Suarez in consideration for his personal guarantees.
During the fiscal year ended March 31, 1995, Suarez Housing Corporation paid
$470,000 for twenty finished building lots that it purchased from a partnership
in which Mr. Suarez is a one-third partner and in which the brother of Mr.
Suarez is a one-third partner. Such purchase was in the normal course of
business and was at a price based on an independent appraisal.
Mr. Dionel Cotanda, a member of the Board of Directors, is President, Chief
Executive Officer and Director of Robbins Engineering, Inc. and Vice President
and Director of Robbins Manufacturing Company. During the year ended March 31,
1995, Robbins Engineering, Inc. and Robbins Manufacturing Company sold
engineering services, metal plate connected wood trusses, lumber and related
building material products in the amount of approximately $3,367,000 to Suarez
Housing Corporation. Robbins Manufacturing Company is a creditor of Suarez
Housing Corporation under the Chapter 11 filing and is subject to the terms of
settlement under the Plan of Reorganization. In addition, an employee of
Robbins Manufacturing Company is the Chairperson of the IAH Creditors
Committee. The IAH Creditors Committee's primary remaining function is to
oversee the terms of settlement under the Plan.
Mr. Robert E. Everett, a member of the Board of Directors, is Executive Vice
President of McCrea Equipment Company, Inc. During the year ended March 31,
1995, McCrea Equipment Company sold heating, ventilating and air conditioning
systems in the amount of approximately $441,000 to Porten Sullivan Corporation.
McCrea Equipment Company, Inc. is a creditor of Porten Sullivan Corporation
under the Chapter 11 filing and is subject to the terms of settlement under the
Plan of Reorganization. Mr. Everett is a member of the Porten Sullivan
Creditors Committee. The Porten Sullivan Creditors Committee's primary
remaining function is to oversee the terms of settlement under the Plan.
Mr. Philip T. Mercer, a member of the Board of Directors and a nominee for
director, is the sole stockholder and Chief Executive Officer of Thulman
Eastern Corporation. During the year ended March 31, 1995, Thulman Eastern
Corporation sold engineered fireplaces and related products and services in the
amount of approximately $175,000 to Porten Sullivan Corporation. Thulman
Eastern Corporation is a creditor of Porten Sullivan Corporation under the
Chapter 11 filing, and is subject to the terms of settlement under the Plan of
Reorganization.
Mr. Peter A. Davis, a member of the Board of Directors and a nominee for
director, has served as a consultant to the Company since November 1992. The
Company entered into a one year consulting agreement with Mr. Davis commencing
November 1, 1992. This agreement was subsequently renewed under similar terms
and conditions for two additional one year terms which expire on November 1,
1995. The agreement provides for Mr. Davis to assist the Company in a broad
range of areas. Mr. Davis receives compensation at the rate of $1,000 per day,
with a minimum of $25,000 per year. During the fiscal year ended March 31,
1995, the Company paid $29,000 to Mr. Davis for his consulting services.
<PAGE>
Page 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For information relating to transactions with the directors and executive
officers of the Company, see "Executive Compensation -- Compensation Committee
Interlocks and Insider Participation" above.
BOARD REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Board of Directors formed a Compensation Committee on September 13, 1994.
Prior to that date the entire Board of Directors administered the Company's
executive compensation program, including determination of salaries, bonuses
and stock option grants. All compensation received by the executive officers
of the Company during fiscal year 1995 was determined by the Board of Directors
prior to the formation of the Compensation Committee or was approved by the
Bankruptcy Court. The Company's executive compensation program 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 the payment of salaries and bonuses and the granting of stock options.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In accordance with the terms of the Plan, on August 12, 1992 Suarez Housing
Corporation entered into an employment agreement with Robert J. Suarez pursuant
to which he serves as Chairman and President of Suarez Housing Corporation.
See "Executive Compensation -- Employment Agreements" above. Having been
approved by the Bankruptcy Court, this employment agreement governs the terms
of Mr. Suarez' employment including his compensation and covers the period from
August 12, 1992 through August 12, 1995. Accordingly, the Board of Directors
has not been required to make any decision regarding the compensation of Mr.
Suarez, and therefore, the performance of the Company and the market value of
the Company's stock were not factors considered in setting the compensation of
Mr. Suarez during such period. The increase in the compensation of Mr. Suarez
from $250,000 in 1993 to $254,687 in 1994 and $262,006 in 1995 was pursuant to
the terms of his employment agreement. All of Mr. Suarez' compensation is
received from Suarez Housing Corporation. He does not receive any compensation
directly from the Company.
COMPENSATION OF OTHER EXECUTIVE OFFICERS
The Board of Directors has made several decisions regarding the compensation
of the Company's other executive officers. In those instances Mr. Suarez, the
Chairman and President, and Mr. Garshag, the former Executive Vice President,
made recommendations to the Board of Directors as to the amount of the proposed
remuneration of the Company's other executive officers. Factors considered by
the Chairman and President and the Executive Vice President with respect to
each component of
<PAGE>
Page 14
compensation were subjective, such as their perception of the Company's and
the individual's performance and any changes or planned changes in functional
responsibility. The market value of the Company's stock was not a factor
considered in setting executive officer compensation.
Members of the Board of Directors
Robert J. Suarez, Chairman Kenneth W. Carlson William D. Aiken
Dionel Cotanda Peter A. Davis Robert E. Everett
Brian Gibney Philip T. Mercer Jeffrey D. Prol
<PAGE>
Page 15
STOCK PERFORMANCE GRAPH
The following graph compares, on a cumulative basis, the yearly percentage
change during the five years ended March 31, 1995 in (i) the total stockholder
return on Common Stock of the Company with (ii) the total return on the
Standard & Poor's 500 Index and with (iii) the total return on the Standard &
Poor's Homebuilding Group Index. 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 March 31, 1990 for preparation of the graph.
- ---------------------------------------------------------------------------
TOTAL RETURN TO STOCKHOLDERS
GRAPH
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
March March March August 12, August March March March
1990 1991 1992 1992 12, 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
International American Homes, Inc. 100 27.33 13.67 38.67 100 41.35 158.64 104.37
S&P 500 Index 100 114.41 127.05 132.52 100 110.43 112.06 129.50
S&P Homebuilding Index 100 107.94 162.56 145.78 100 123.41 129.46 97.33
</TABLE>
The first period shown on the graph (left of the double vertical bar) is from
March 31, 1990 to August 12, 1992 and includes the shares of Common Stock that
were outstanding and traded prior to the date of confirmation of the Company's
Plan of Reorganization. Pursuant to the provisions of the Plan of
Reorganization, 2,043,296 shares of Common Stock were to be issued to
creditors. 1,931,033 of those shares were issued on June 10, 1994. The
remaining 112,263 shares will be distributed to creditors once certain
remaining disputed bankruptcy claims are resolved.
The second period shown on the graph (right of the double vertical bar) is
from August 12, 1992 to March 31, 1995 and includes 2,724,395 shares of Common
Stock. This number of shares includes the 112,263 shares which remain to be
distributed to creditors.
<PAGE>
Page 16
PROPOSAL ONE
APPROVAL OF AMENDMENTS TO
THE AMENDED AND RESTATED INTERNATIONAL HOMES, INC.
NON-QUALIFIED STOCK OPTION PLAN
The Board of Directors recommends that stockholders consider and approve a
proposal to amend the Company's Amended and Restated Non-Qualified Stock Option
Plan (the "Employee Stock Option Plan"), which was originally adopted by the
Board on June 19, 1987 and approved by the stockholders of the Company on
October 13, 1987, and amended and restated as to matters not subject to
shareholder vote by approval of the Board on June 30, 1994. These proposed
amendments to the Employee Stock Option Plan were approved by the Board on June
22, 1995. The Employee Stock Option Plan currently provides for the grant of
"non-qualified" options to purchase shares of Common Stock to select key
employees and outside directors of the Company and its subsidiaries.
The proposed amendments (collectively, the "Proposed Amendment") effect the
following changes to the Employee Stock Option Plan: (i) increase the number
of shares of Common Stock reserved for issuance thereunder from 60,000
(determined after taking into account the Stock Split) to 150,000; (ii) clarify
the language describing the vesting schedule for options granted under the
Employee Stock Option Plan; (iii) provide that outside directors will no longer
be eligible to receive options under this plan if a stock option plan for
non-employee directors is approved by the stockholders and becomes effective;
(iv) entitle the Company to require as a condition to delivery of shares of
Common Stock upon exercise of an option that the option holder remit an amount
sufficient to satisfy all federal, state and local withholding tax requirements
relating thereto; and (v) extend the term of the plan to June 22, 2005.
SUMMARY OF THE EMPLOYEE STOCK OPTION PLAN AND PROPOSED AMENDMENT
The following is a summary of the terms of the Employee Stock Option Plan and
the Proposed Amendment. The full text of the Amended and Restated Non-
Qualified Stock Option Plan (as amended by the Proposed Amendment) is attached
as Annex A to this Proxy Statement. This summary is qualified by reference to
the Amended and Restated Non-Qualified Stock Option Plan, which stockholders
are urged to read in its entirety.
The purpose of the Employee Stock Option Plan is to promote the growth and
prosperity of the Company by providing the means to attract and retain the best
available personnel for key positions and to provide its key employees with a
proprietary interest in and an incentive to contribute to the Company.
The Employee Stock Option Plan is administered by the Compensation Committee
(the "Committee"), consisting of at least two directors. The administration of
the Employee Stock Option Plan is intended to conform with the requirements,
and the composition of the Committee is intended to satisfy, the provisions of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Committee, consisting of Mr. Cotanda, Mr. Davis and Mr. Everett,
currently serves this function. The Committee has full authority to select
among the eligible individuals to whom options may be granted, the number of
shares subject to each option and the terms of such options, and to interpret
the Employee Stock Option Plan.
The Committee may grant options to such executives and managers
(approximately ten (10) persons at July 14, 1995) as it may designate from time
to time. The Proposed Amendment provides that outside directors (seven (7)
persons at July 14, 1995) will no longer be eligible to receive options under
the Employee Stock Option Plan if a stock option plan for non-employee
directors of the Company is approved by the stockholders of the Company and
becomes effective.
<PAGE>
Page 17
The Proposed Amendment seeks to increase the number of shares of Common Stock
reserved for issuance under the Employee Stock Option Plan from 60,000 to
150,000. 21,000 of the shares of Common Stock reserved for issuance under the
Employee Stock Option Plan are currently subject to options granted under the
Plan. The Board has determined that the number of shares reserved should be
increased to 150,000 to offer the Committee the flexibility to grant an
appropriate number of options in future years to enable the Company to retain
the services of, and motivate, key employees and to attract new personnel as
needed.
Options granted under the Employee Stock Option Plan are evidenced by stock
option agreements which state the number of shares subject to the option, any
limitations with respect to the number of shares covered by the option and any
limitations with respect to the number of shares which may be purchased during
various periods under the option. The exercise price for each option is
determined by the Committee at the time the option is granted, but in no event
may the exercise price be less than the Fair Market Value (as defined in the
Employee Stock Option Plan) of the Common Stock on the date of grant. Shares
of Common Stock subject to any option which expires, is cancelled or is
otherwise terminated become available for new grant under the Employee Stock
Option Plan.
The current language in the Employee Stock Option Plan which describes the
vesting schedule of options granted thereunder is ambiguous and requires
clarification to permit the Company and option holders to understand their
respective rights under the Employee Stock Option Plan and to enable the
Committee to better administer this Plan. The Proposed Amendment clarifies
this provision to provide that, unless the option agreement specifies
otherwise, (i) no option granted under the Employee Stock Option Plan may be
exercised prior to the first anniversary of the date of grant, (ii) each option
becomes cumulatively exercisable with respect to an additional 20% of the
shares subject thereto on each of the first, second, third and fourth
anniversaries of the date of grant, and (iii) each option becomes fully
exercisable on the fifth anniversary of the date of grant and remains fully
exercisable through the day prior to the tenth anniversary of the date of
grant, after which such option terminates and ceases to be exercisable. This
amendment does not effect a substantive change in the vesting schedule provided
in the Employee Stock Option Plan and reflects the Company's intent that
varying vesting schedules may be set forth in individual option agreements.
If an option holder ceases to be employed by the Company, such option holder
has 90 days in which to exercise his vested options. In the event of an option
holder's death, retirement or "disability" (as defined in the Employee Stock
Option Plan), such option holder's options may be exercised in full within one
year from the date of death, retirement or disability, unless the option
expires sooner according to its own terms. Options are not transferable except
by will, by the laws of descent or distribution or pursuant to a qualified
domestic relations order.
An option holder may exercise an option by giving written notice thereof to
the Company, whereupon the option holder must pay the full exercise price in
cash (including a certified, bank cashier's or teller's check). The Proposed
Amendment provides that the Company shall be entitled to require as a condition
to delivery of shares that the option holder pay such amount as is sufficient
to pay all federal, state and local withholding tax requirements relating
thereto, which amount may be paid in shares of Common Stock in the discretion
of the Committee. To the extent that the Company is subject to withholding tax
liabilities in connection with the issuance of shares of Common Stock under the
Employee Stock Option Plan, this provision will entitle the Company to require
the option holder to provide funds sufficient to comply with such withholding
tax requirements.
<PAGE>
Page 18
The Proposed Amendment extends the term of the Employee Stock Option Plan to
June 22, 2005 from its original termination date of June 19, 1997, so that this
plan will be coterminous with the proposed Non-Employee Directors Stock Option
Plan (see "Proposal Two" below). After June 22, 2005, no further options may
be granted, although options previously granted will remain outstanding in
accordance with their terms. The Board of Directors may at any time suspend or
terminate the Plan; PROVIDED that no such action may, without the consent of
any option holder, materially and adversely affect such option holder's rights
under the applicable option agreement.
Options are subject to adjustment to protect against dilution in certain
events, including stock splits or stock dividends. In the event of a
dissolution, liquidation or sale of a substantial portion of the assets of the
Company, or of a merger or consolidation in which stockholders are to receive
cash, securities or other consideration, the Committee may in its full
discretion terminate all outstanding options on seven (7) days' notice or make
such other adjustment as it deems appropriate.
OPTION AWARDS
At July 14, 1995, the following options had been granted under the Employee
Stock Option Plan:
<TABLE>
<CAPTION>
Number of Securities
Underlying Options Exercise Expiration
Name and Position Granted Price Date
----------------- -------------------- --------------- -------------------
<S> <C> <C> <C>
Ronald I. Garshag (1) 10,000 $0.60 5/12/96
Executive Vice President
Michael P. Villa 2,500 $0.50 2/9/98
Vice President, Treasurer
and Chief Financial Officer
Robert I. Antle 2,500 $0.50 2/9/98
Executive Vice President
and Secretary
All current executive officers 6,000 $0.50 2/9/98
as a group
(3 persons)(2)
All other employees as a group 5,000 $0.50 2/9/98
(3 persons)(2)
</TABLE>
*---------------------
(1)Mr. Garshag retired on May 12, 1995, which caused his options under the
Employee Stock Option Plan, originally to expire on February 9, 1998, to be
scheduled to expire on May 12, 1996.
(2)Excludes Mr. Garshag.
<PAGE>
Page 19
See "Federal Income Tax Consequences of the Employee Stock Option Plan and
the Directors Stock Option Plan" below for a discussion of the federal tax
consequences of the Employee Stock Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL ONE, AND SIGNED PROXIES
WHICH ARE RETURNED WILL BE SO VOTED UNLESS A CONTRARY VOTE IS DESIGNATED ON THE
PROXY CARD.
PROPOSAL TWO
APPROVAL OF THE INTERNATIONAL AMERICAN
HOMES, INC. 1995 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
The Board of Directors recommends that the stockholders consider and approve
a Non-Employee Directors Stock Option Plan (the "Directors Stock Option Plan")
for the Company, which was approved by the Board of Directors on June 22, 1995.
SUMMARY OF THE DIRECTORS STOCK OPTION PLAN
The following is a summary of the Directors Stock Option Plan, the full text
of which is attached as Annex B to this Proxy Statement. This summary is
qualified by reference to the Directors Stock Option Plan, which stockholders
are urged to read in its entirety.
The purpose of the Directors Stock Option Plan is to provide an incentive to
non-employee directors of the Company to join and remain in the service of the
Company, maintain and enhance the long-term performance and profitability of
the Company and acquire or increase their financial interests in the success of
the Company.
Each member of the Board of Directors of the Company who is not also an
employee of the Company or of any of its subsidiaries or affiliates, and who
has either been elected twice as a member of the Board or served at least one
full year of a multi-year term (each, a "Participant"), will be granted options
automatically under the Directors Stock Option Plan. As of July 14, 1995, four
individuals were eligible to receive options under the Directors Stock Option
Plan, subject to stockholder approval of the Plan. The Board's three nominees
for directors will become Participants under the Directors Stock Option Plan if
they are reelected at the Meeting.
The Directors Stock Option Plan is designed to be a so-called "formula plan"
for purposes of complying with certain requirements of Rule 16b-3 under the
Exchange Act. Under the Directors Stock Option Plan, options to purchase up to
70,000 shares of Common Stock may be granted. Shares of Common Stock that are
subject to options that expire or are terminated without exercise are available
for future grant. On the date the Plan was adopted by the Board (the "Effective
Date"), each Participant as of such date (four persons) was automatically
granted an option to purchase 5,000 shares of Common Stock, subject to
stockholder approval of the Plan. Any person who becomes a Participant after
the Effective Date will automatically be granted an option to purchase 5,000
shares of Common Stock on the date he becomes a Participant.
Each option grant to a Participant is exercisable as follows: (i) on or
after the first anniversary of the grant, the option is exercisable to purchase
up to an aggregate of 1,666 shares; (ii) on or after the second anniversary of
the grant, the option is exercisable to purchase up to an aggregate of 3,333
shares; and (iii) on or after the third anniversary of the grant, the option is
exercisable to purchase up to an aggregate
<PAGE>
Page 20
of 5,000 shares; PROVIDED, HOWEVER, that no option granted will become
exercisable unless and until the Directors Stock Option Plan is approved
by the Company's stockholders. Each option expires on the fifth anniversary
of the date on which such option is granted. If a Participant ceases to
serve as a director of the Company, the Participant's vested options
are exercisable for seven (7) months thereafter unless such options otherwise
expire in accordance with their own terms. In the event of the death of a
Participant during his period of service as a director or within
seven (7) months following the date on which he ceased to serve as a director,
the Participant's vested options remain exercisable by his executor or heir
for a period of seven (7) months after the Participant's death.
Options are not transferable except by will or by the laws of descent
or distribution.
The exercise price of options granted under the Directors Stock Option Plan
equals the Fair Market Value (as defined in the Directors Stock Option Plan) of
the underlying shares of Common Stock on the date of grant. An option holder
may exercise an option by giving written notice thereof to the Company. Upon
delivery of such notice, the option holder must pay the full exercise price,
plus applicable federal, state or local withholding taxes, by check payable to
the Company or, only with the consent of the Board, by tender of other freely
transferable shares of Common Stock or a combination of the foregoing.
In the event of any change in the shares of outstanding Common Stock of the
Company by reason of any merger, reorganization, recapitalization,
consolidation, sale or other distribution of substantially all of the assets of
the Company, any stock dividend, split, spin-off, split-off, distribution of
cash, securities or other property by the Company, or other change in the
Company's corporate structure affecting the Common Stock, the Board will make
an appropriate and proportionate adjustment or substitution to prevent dilution
or enlargement of the benefits or potential benefits intended under the Plan.
In the event of a merger or consolidation or sale of all or substantially all
of the assets of the Company in which shares of Common Stock are exchanged for
other consideration or in the event of a liquidation of the Company, all or any
outstanding options will become exercisable in full immediately prior to the
event.
Any issues that arise regarding the administration of the Directors Stock
Option Plan will be resolved by the Board. The Board may suspend or terminate
the Plan at any time. Subject to any approval of the stockholders of the
Company which may be required by law (including Rule 16b-3 of the Exchange
Act), the Board may amend the Directors Stock Option Plan at any time; PROVIDED
that the provisions with respect to eligibility for participation or the
amount, timing or duration of options granted may not be amended more
frequently than once in any six-month period except to comply with changes in
the Code, the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder; and PROVIDED, FURTHER, that the number of shares of
Common Stock subject to the Directors Stock Option Plan may not be increased
without stockholder approval.
Unless terminated earlier, the Directors Stock Option Plan will terminate on
the tenth anniversary of the Effective Date, and no additional options may be
granted thereafter.
<PAGE>
Page 21
PLAN BENEFITS
Upon the adoption of the Directors Stock Option Plan by the Board, options to
purchase an aggregate of 20,000 shares of Common Stock were granted thereunder
to the following current directors, subject to stockholder approval of the
Plan:
<TABLE>
<CAPTION>
Number of Securities
Underlying Options Exercise Expiration
Name and Position Granted Price Date
----------------- -------------------- --------- ----------
<S> <C> <C> <C>
William D. Aiken 5,000 $1.8125 6/22/00
Director
Dionel Cotanda 5,000 $1.8125 6/22/00
Director
Robert E. Everett 5,000 $1.8125 6/22/00
Director
Brian Gibney 5,000 $1.8125 6/22/00
Director
All current directors who are 20,000 $1.8125 6/22/00
not executive officers as a
group
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL TWO, AND SIGNED PROXIES
WHICH ARE RETURNED WILL BE SO VOTED UNLESS A CONTRARY VOTE IS DESIGNATED ON THE
PROXY CARD.
FEDERAL INCOME TAX CONSEQUENCES OF THE EMPLOYEE
STOCK OPTION PLAN AND THE DIRECTORS STOCK OPTION PLAN
The following summary generally describes the principal federal (but not
state or local) income tax consequences of options granted under the Employee
Stock Option Plan and the Directors Stock Option Plan (collectively, the "Stock
Option Plans"). It is general in nature and is not intended to cover all tax
consequences that may apply to a particular optionee or the Company. The
provisions of the Code and the regulations thereunder relating to these matters
are complicated and their impact in any one case may depend upon the particular
circumstances. This discussion is based on the Code as currently in effect.
The Stock Option Plans are not intended to be qualified under Section 401(a)
of the Code. Generally no income will be recognized at the time the option is
granted. However, on exercise of a non-qualified stock option, the amount by
which the fair market value of the shares of the Common Stock on the date of
exercise exceeds the purchase price of such shares will be taxable to the
participant as ordinary income and will be deductible for tax purposes by the
Company or its affiliates in the year in which the
<PAGE>
Page 22
participant recognizes income. Special rules may apply in the case of option
holders who are reporting persons under Section 16(b) of the Exchange Act.
The disposition of shares acquired upon exercise of a non-qualified stock
option generally will result in long-term or short-term capital gain or loss
(depending on the applicable holding period) in an amount equal to the
difference between the amount realized on such disposition and the sum of the
purchase price and the amount of ordinary income recognized in connection with
the exercise of the non-qualified stock option. If an option granted under the
Directors Stock Option Plan is exercised through the use of Common Stock
previously owned by an option holder, such exercise generally will not be
considered a taxable disposition of the previously owned shares and, thus, no
gain or loss will be recognized with respect to such previously owned shares
upon such exercise. The amount of any built-in gain on the previously owned
shares generally will not be recognized until the new shares acquired on the
option exercise are disposed of in a sale or other taxable transaction.
PROPOSAL THREE
APPOINTMENT OF INDEPENDENT AUDITORS
At the Meeting, the Board of Directors of the Company will recommend
stockholder approval of Arthur Andersen LLP as auditors of the financial
statements of the Company and its consolidated subsidiaries for the fiscal year
ending March 31, 1996. Although not required to do so, the Board of Directors
is submitting the appointment of Arthur Andersen LLP for approval at the
Meeting. Arthur Andersen LLP has audited the Company's financial statements
since 1989. Representatives of Arthur Andersen LLP are expected to be present
at the Meeting to respond to stockholders' questions and to make a statement if
they so desire.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL THREE, AND SIGNED
PROXIES WHICH ARE RETURNED WILL BE SO VOTED UNLESS A CONTRARY VOTE IS
DESIGNATED ON THE PROXY CARD.
STOCKHOLDER PROPOSALS
From time to time, stockholders present proposals which may be proper
subjects for inclusion in the Proxy Statement and for consideration at the
Annual Meeting of Stockholders. Proposals of stockholders of the Company
intended to be presented at the Annual Meeting of Stockholders of the Company
in 1996 must be received by the Secretary of the Company at 6001 Montrose Road,
Suite 910, Rockville, Maryland 20852 not later than April 6, 1996 and must
otherwise comply with the rules of the Securities and Exchange Commission to be
eligible for inclusion in the Proxy Statement and proxy for the Annual Meeting
in 1996. If the date of such meeting is changed by more than thirty (30) days
from its currently contemplated date, proposals must be received a reasonable
time before solicitation of proxies for such meeting is made.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of the
Company's Common Stock (the "Reporting Persons"), to file reports of ownership
and changes in ownership of such securities with the Securities and Exchange
<PAGE>
Page 23
Commission. Officers, directors and greater than ten percent beneficial owners
are required by applicable regulations to furnish the Company with copies of
all Section 16(a) forms they file. The Company is not aware of any beneficial
owner of more than ten percent of its Common Stock.
Based solely upon review of the copies of the forms furnished to the Company,
or written representations from certain Reporting Persons, the Company believes
that during the fiscal year ended March 31, 1995 all filings required to be
made by Reporting Persons were made on a timely basis.
OTHER MATTERS
VOTING PROCEDURES
The votes of stockholders present in person or represented by proxy at the
Meeting will be tabulated by an inspector of election appointed by the Company.
The inspector's duties include determining the number of shares represented at
the Meeting, counting all votes and ballots and certifying the determination of
the number of shares represented and the outcome of the balloting.
The presence, in person or by proxy, of stockholders entitled to cast at
least a majority of the votes which all stockholders are entitled to cast,
shall constitute a quorum. Assuming a quorum is present, directors will be
elected by the holders of a plurality of the shares of Common Stock present in
person or by proxy and entitled to vote at the Meeting. The affirmative vote
of the holders of a majority of the issued and outstanding Common Stock is
required for the approval of Proposal One. The affirmative vote of the holders
of a majority of the shares of Common Stock present in person or represented by
proxy at the Meeting is required for the approval of Proposals Two and Three.
Abstentions will have no effect on the outcome of the vote for the election
of directors, but will have the practical effect of voting against the
proposals. Votes withheld by brokers in the absence of instructions from
street name holders will not affect the election of directors or the approval
of Proposals Two and Three since the shares held by such street name holders
are not considered present for voting purposes, but will have the practical
effect of voting against Proposal One.
OTHER PROPOSALS
As of the date of this Proxy Statement, the Company does not know of any
other business to come before the Meeting other than as set forth in the Notice
of Annual Meeting of Stockholders. However, if any other business should
properly come before the Meeting, proxies will be voted with respect thereto in
accordance with the discretion of the proxy holders.
COST OF SOLICITATION
The cost of preparing, assembling and mailing this proxy soliciting material
and Notice of Annual Meeting of Stockholders will be paid by the Company. The
Company will retain Georgeson & Company Inc., a professional soliciting
organization, to assist in soliciting proxies for a fixed fee of $1,000 plus an
additional fee based on the number of telephone calls made plus reimbursement
of reasonable out-of-pocket expenses. Solicitation by mail, telephone,
facsimile or personal solicitation may also be done by directors, executive
officers or regular employees of the Company and its subsidiaries, for which
they
<PAGE>
Page 24
will receive no additional compensation. Brokerage houses and other
nominees, fiduciaries and custodians nominally holding shares of the Company's
stock as of the record date will be requested to forward proxy soliciting
material to the beneficial owners of such shares, and will be reimbursed by the
Company for their reasonable expenses.
THE COMPANY'S ANNUAL REPORT ON FORM 10-K
The Company's most recent annual report on Form 10-K, as amended, including
the financial statements and schedules thereto, which the Company has filed
with the Securities and Exchange Commission, is being mailed to all
stockholders of record together with the Proxy Statement.
Additional copies of the Form 10-K will be provided without charge upon the
written request of any stockholder. Such requests may be sent to Michael P.
Villa, Vice President, Treasurer and Chief Financial Officer, International
American Homes, Inc., 6001 Montrose Road, Suite 910, Rockville, Maryland 20852.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Exchange Act, the sections of the Proxy
Statement entitled "Board Report on Executive Compensation" and "Stock
Performance Graph" shall not be deemed to be so incorporated, unless
specifically otherwise provided in any such filing.
August 4, 1995
By Order of the Board of Directors
/s/ Michael P. Villa
---------------------------
Michael P. Villa
Vice President, Treasurer and Chief Financial Officer
STOCKHOLDERS WHO DESIRE TO HAVE THEIR STOCK VOTED AT THE MEETING ARE
REQUESTED TO MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. STOCKHOLDERS MAY REVOKE
THEIR PROXIES AT ANY TIME PRIOR TO THE MEETING AND STOCKHOLDERS WHO ARE
PRESENT AT THE MEETING MAY REVOKE THEIR PROXIES AND VOTE, IF THEY SO DESIRE,
IN PERSON.
<PAGE>
Page A-1
ANNEX A
AMENDED AND RESTATED
INTERNATIONAL AMERICAN HOMES, INC.
NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of the International American Homes, Inc. Non-Qualified
Stock Option Plan (hereinafter called the "Plan") is to promote the growth and
prosperity of International American Homes, Inc., through grants of options to
purchase shares of its common stock, to attract and retain the best available
personnel for key positions of substantial responsibility and to provide its
key employees with a proprietary interest in International American Homes, Inc.
and an additional incentive to contribute to the success of International
American Homes, Inc. and any parent or subsidiary corporation, including any
subsidiary corporation hereafter acquired or organized.
2. DEFINITIONS
For purposes of the Plan the following terms shall have the meanings
set forth below:
(a) "Board" shall mean the Board of Directors of International
American Homes, Inc.
(b) "Common Stock" shall mean the common stock of International
American Homes, Inc., having a par value of $.01 per share.
(c) "Company" shall mean International American Homes, Inc. and any
parent or subsidiary corporation of International American Homes, Inc., as
defined in Sections 424(e) and (f) of the Internal Revenue Code of 1986, as
amended. (All Section references hereafter shall be to the Internal Revenue
Code.)
(d) "Fair Market Value" shall mean, with respect to the date an
Option is granted or exercised, the closing price of the Common Stock on the
principal established domestic securities exchange, if any, on which the Common
Stock is listed, or if not listed, as determined by the Committee.
(e) "Option" shall mean a stock option which is granted pursuant to
this Plan.
(f) "Optionee" shall mean an eligible employee of the Company who
has been granted one or more Options.
<PAGE>
Page A-2
3. ADMINISTRATION
(a) The Plan shall be administered by the Compensation Committee (the
"Committee") appointed by the Board, which shall consist of at least two (2)
directors, provided, that if the Company is subject to Rule 16b-3 of the
Securities Exchange Act of 1934, as amended from time to time or any successor
rule thereto (the "Act") each director appointed to the Committee shall be a
"disinterested person" within the meaning of the Act. For purposes of the Act,
a "disinterested person" generally means a director who is not during the one
year prior to service as an administrator of the Plan, or during such service,
granted Options hereunder or under any other plan of the Company or any of its
affiliates, within the meaning of Rule 16b-3 of the Act.
(b) The Committee shall have sole authority, in its absolute
discretion, to determine which of the eligible employees of the Company shall
be granted Options hereunder, the time or times at which such Options shall be
granted, the terms of such Options and the number of shares to be optioned.
Subject to the provisions in the preceding sentence, the Committee shall in
addition have the sole authority to construe and interpret the Plan and to do
everything necessary or appropriate to administer the Plan, and all decisions,
determinations and interpretations of the Committee shall be binding and
conclusive on all Optionees and on their legal representatives and
beneficiaries.
(c) All actions of the Committee shall be taken by a majority vote of
its members. The Committee may appoint a secretary to keep minutes of its
meetings and shall make such rules and regulations for their conduct as it
shall deem advisable.
(d) All expenses of administering the Plan shall be borne by the
Company.
(e) Notwithstanding anything to the contrary contained herein, the
Board may, in its sole discretion, resolve to administer the Plan. In such
event, the term "Committee" shall be deemed to mean the Board. If the Board
administers the Plan, each member of the Board must be a "disinterested person"
as described above to comply with Rule 16b-3 of the Act.
4. SHARES OF STOCK SUBJECT TO THE PLAN
There will be reserved for use upon the exercise of Options to be
granted under this Plan (subject to the provisions of Section 8 of this Plan),
an aggregate of 150,000 shares of Common Stock (determined after taking into
account the 1-for-10 reverse stock split of the Common Stock in 1995), which
shares may be in whole or in part, as the Board shall from time to time
determine, authorized but unissued shares of Common Stock or issued shares of
Common Stock which shall have been reacquired by the Company. Any shares
subject to an Option under the Plan which Option for any reason expires or is
terminated unexercised as to such shares, may again become subject to an Option
under the Plan.
5. ELIGIBILITY
The Committee may grant Options to such key executives, managers and
outside directors of the Company as it may from time to time designate;
PROVIDED, HOWEVER, that outside directors shall no longer be eligible to
receive Options under this Plan if the stockholders of the Company shall have
approved a stock option plan for non-employee directors of the Company and
such plan becomes effective.
<PAGE>
Page A-3
6. OPTION PRICE
The purchase price under each Option issued shall be determined by the
Committee for each specific Option at the time the Option is granted, but in no
event shall such purchase price be less than 100% of the Fair Market Value of
the Common Stock on the date of grant.
7. TERMS AND CONDITIONS OF STOCK OPTION AGREEMENTS
Options granted pursuant to the Plan shall be evidenced by agreements
(hereinafter called "Non-Qualified Stock Option Agreements") in such form as
the Committee shall, from time to time, approve. References herein to the Non-
Qualified Stock Option Agreements shall include, to the extent applicable, any
agreements amending the Non-Qualified Stock Option Agreements. Each Non-
Qualified Stock Option Agreement shall comply with and be subject to the
following terms and conditions:
(a) NUMBER OF SHARES. Each Non-Qualified Stock Option Agreement
shall state the total number of shares which are subject to the Option granted
and any limitation with respect to the number of shares covered by the Option
granted and any limitation with respect to the number of shares covered by the
Option which may be purchased during various periods of time within the term of
the Option.
(b) OPTION EXERCISE. Unless the applicable plan agreement otherwise
specifies: (1) no Option shall be exercisable prior to the first anniversary
of the date of grant, (2) each Option granted under the Plan shall become
cumulatively exercisable with respect to an additional 20% of the shares of
Common Stock subject thereto, rounded down to the next lower full share, on
each of the first, second, third and fourth anniversary of the date of grant,
(3) each Option shall become 100% exercisable on the fifth anniversary of the
date of grant, and (4) each Option shall remain 100% exercisable through the
day prior to the tenth anniversary of the date of grant, after which such
Option shall terminate and cease to be exercisable.
(c) DATE OF EXERCISE. Each Non-Qualified Stock Option Agreement
shall state that the Option granted therein may not be exercised in whole or in
part for any period or periods of time specified in such Agreement or otherwise
as specified by the Committee. Except as so specified, any Option may be
exercised in whole at any time or in part from time to time during its term.
An Option shall be exercised when written notice has been given to the Chief
Financial Officer of the Company at its principal executive office by the
person entitled to exercise the Option and full payment for the shares with
respect to which the Option is exercised has been received by the Company.
(d) TERM OF OPTIONS. Each Option shall expire not more than ten (10)
years from the date the Option is granted. All rights to purchase pursuant to
an Option shall terminate on its expiration date.
(e) MEDIUM OF PAYMENT. Upon exercise of an Option, the Option Price
shall be payable to the Company in cash (including a certified, bank cashier's
or teller's check). The Optionee shall be responsible for selling the shares
he purchased under this Plan. Certificates for the shares purchased shall be
issued by the Company as soon as practicable, following the receipt of payment.
<PAGE>
Page A-4
(f) TERMINATION OF EMPLOYMENT. In the event that an Optionee's
employment with the Company shall terminate, all Options held by such Optionee
shall terminate immediately, except as hereinafter provided. The Optionee will
cease to be employed by the Company on the first to occur of (i) the last date
for which he is paid; (ii) the date on which he ceases to perform services; or
(iii) the effective date of the termination of his employment set forth in any
notice to the Optionee of such termination.
(i) Notwithstanding the above, the Optionee shall have the right to
exercise all Options held by him on the date of termination within 90
days after said termination.
(ii) In the event of any Optionee's death or retirement, his or her
Option, regardless of whether the Option was yet subject to exercise on
the date of the Optionee's death or retirement, may be exercised in full
with respect to the total number of shares subject to the Option in
accordance with the provisions of the Plan at any time within one (l)
year from the date of the Optionee's death or retirement, whichever is
applicable, but in no event later than the date that the Option expires
in accordance with its terms. In the event of an Optionee's death the
Option may be exercised by a legatee or legatees of that Option under
the Optionee's last will, or by his or her executors, personal
representatives or distributees.
(iii) The Option of any Optionee who is disabled while in the
employment of the Company may be exercised in full with respect to the
total number of shares subject to the Option, regardless of whether the
Option was yet subject to exercise on the date of the disability, within
one (l) year of the date of such disability but in no event later than
the date that the Option expires in accordance with its terms. The
terms "disabled" and "disability" shall mean that an Optionee is no
longer able to continue in the service of the Company in the same
capacity because of a mental or physical disability and shall mean total
and permanent disability. The Company, upon competent medical evidence,
shall be the sole judge of whether a Participant is so disabled. Should
the Company refuse to judge a Participant to be disabled, the
Participant shall have the right to demand that the Company request the
Medical Society of the County in which the Optionee is employed, to
designate one of its member physicians to examine such Optionee, and his
report in writing shall be binding upon all parties.
(g) ASSIGNMENT. Any Option granted under the Plan may not be
transferred, assigned, pledged or hypothecated by any Optionee in any way other
than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order in accordance with Rule 16b-3 of the Act and
except as provided in subparagraph (f)(1), above, is exercisable solely by such
Optionee during his or her lifetime.
(h) SALE OR REORGANIZATION. In the event of a proposed dissolution,
liquidation or sale of a substantial portion of the assets of the Company, or
of a merger or consolidation in which holders of Common Stock are to receive
cash, securities or other property, the Committee shall, in its unlimited
discretion, have the power prior to such event (i) to terminate all outstanding
Options upon at least seven days' prior notice to each Optionee and, if the
Committee deems it appropriate, to cause the Company to pay to each Optionee an
amount in cash with respect to each share to which a terminated Option pertains
equal to the difference between the option price and the value, as determined
by the Committee in its sole discretion, of the consideration to be received by
the holders of Common Stock in connection with such transaction, or (ii) to
provide for the exchange of Options outstanding under the Plan for options to
acquire securities or other property to be delivered in connection with the
transaction and in connection therewith to make
<PAGE>
Page A-5
an equitable adjustment, as determined by the Committee in its sole discretion,
in the option price and number of shares or amount of property subject to the
Option and, if deemed appropriate, provide for a cash payment to Optionees
in partial consideration for such exchange.
(i) SUBSTITUTE OPTIONS. Options may be granted under this Plan from
time to time in substitution for non-qualified stock options held by employees
of other corporations who are about to become employees of the company as the
result of a merger or consolidation of the employing corporation with the
Company or the acquisition by the Company of the assets of the employing
corporation or the acquisition by the Company of stock of the employing
corporation as a result of which it becomes a subsidiary of the Company. The
terms and conditions of substitute Options so granted may vary from the terms
and conditions set forth in this Plan to such extent as the Committee at the
time of grant may deem appropriate in order to conform, in whole or in part, to
the provisions of the non-qualified stock options in substitution for which
they are granted.
(j) RIGHTS OF A STOCKHOLDER. An Optionee shall have no rights as a
stockholder with respect to shares subject to an Option until that date of the
issuance of the shares to the Optionee. No adjustment will be made for
dividends or other distributions or rights for which the record date is prior
to the date of such issuance.
(k) ADDITIONAL PROVISIONS. The Non-Qualified Stock Option Agreements
authorized under this Section may contain such other provisions as the Board
(or any Committee to which it may have delegated such authority) shall deem
advisable.
8. CHANGES IN CAPITAL STRUCTURE
(a) RIGHT TO CHANGE CAPITAL STRUCTURE. The existence of outstanding
Options shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or any
merger or consolidation of the Company or any issue of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Common Stock or
the rights thereof or the dissolution or liquidation of the Company or any sale
or transfer of all or any part of its assets or business or any other corporate
act or proceeding, whether of a similar character or otherwise.
(b) REQUIRED ADJUSTMENTS. In the event that shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares, the
number of shares then under Option to any Optionee, and the number of shares
reserved for use under the Plan but not yet subject to Option, shall be
adjusted accordingly and appropriate adjustments shall also be made in the
purchase price per share for each Option to reflect such subdivision or
combination. Only full shares will be issued under this Plan, and any
fractional share which might otherwise be issued upon exercise of an Option
shall be forfeited.
9. AMENDMENT OR TERMINATION OF THE PLAN.
(a) AMENDMENT.
The Board, upon recommendation of any Committee to which it may
have delegated such authority or upon its own initiative, may amend the Plan
from time to time in such respects
<PAGE>
Page A-6
as the Board may deem advisable, except that without the approval of the holders
of shares of Common Stock of the Company entitled to cast at least a majority of
the votes which all voting shareholders are entitled to cast in the election of
directors no such amendment shall (i) materially modify the requirements as to
eligibility for participation in this Plan, (ii) increase the number of shares
of Common Stock which may be issued under this Plan except as provided in
paragraph 8(b) hereof, (iii) reduce the lowest price at which shares may be
issued hereunder upon exercise of Options, (iv) extend the duration of this
Plan or (v) materially increase the benefits accruing to participants under the
Plan. The Committee shall have the power to authorize any changes in the Non-
Qualified Stock Option Agreement between the Company and any Optionee, provided
such Optionee consents to the modification.
(b) TERMINATION.
The Board, in its sole discretion, may at any time suspend or
terminate this Plan. No such suspension or termination of the Plan shall
affect Options already granted and such Options shall remain in full force and
effect as if the Plan had not been suspended or terminated.
10. LISTING AND REGISTRATION OF SHARES
(a) REGISTRATION. Each Option shall be subject to the requirement
that if at any time the Committee shall determine, in its sole discretion, that
the listing, registration, or qualification of the shares covered thereby upon
any securities exchange or under any state of federal law or the consent or
approval of any governmental regulatory body, is required or desirable as a
condition of, or in connection with, the granting of an Option or the issuance
of purchase of shares thereunder, no such Option may be exercised in whole or
in part unless and until such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee. Further, the inability of the Company to obtain
from any regulatory body having jurisdiction the authority deemed by the
Company's legal counsel to be necessary to the lawful issuance and sale of any
shares of its stock hereunder shall relieve the Company of any liability in
respect of the non-issuance or sale of such stock as to which such requisite
authority shall not have been obtained.
(b) RESTRICTIVE LEGEND. Unless the shares covered by the Options are
registered with the Securities and Exchange Commission, each stock certificate
issued pursuant to the exercise of an Option shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF
1933 OR UNDER THE SECURITIES LAWS OF ANY STATE IN RELIANCE UPON
EXEMPTIONS UNDER THOSE ACTS. THE SALE OR OTHER DISPOSITION OF THE
SHARES REPRESENTED BY THIS CERTIFICATE IS PROHIBITED UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH SALE OR
DISPOSITION CAN BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933 AND OTHER APPLICABLE STATUTES. BY ACQUIRING THE SHARES
REPRESENTED HEREBY, THE HOLDER REPRESENTS THAT HE HAS ACQUIRED SUCH
SHARES FOR INVESTMENT PURPOSES ONLY AND THAT HE WILL NOT SELL OR
OTHERWISE DISPOSE OF THE SHARES WITHOUT REGISTRATION OR OTHER COMPLIANCE
<PAGE>
Page A-7
WITH THE AFORESAID ACTS AND RULES AND REGULATIONS ISSUED THEREUNDER."
Upon such time as the shares are registered with the Securities and Exchange
Commission, such restrictions shall become unrestricted.
11. CONTINUATION OF EMPLOYMENT
Neither this Plan nor any Option granted hereunder shall confer upon
any employee any right to continue in the employ of the Company or limit in any
respect the right of the Company to terminated his or her employment at any
time.
12. FORFEITURE FOR DISHONESTY
Notwithstanding anything to the contrary in this Plan, if the
Committee may find, by a majority vote, after full consideration of the facts
presented on behalf of both the Company and the Optionee, that the Optionee has
been engaged in fraud, embezzlement, theft, commission of a felony or proven
dishonesty in the course of his employment by the Company which damaged the
Company or that the Optionee has disclosed trade secrets of the Company, the
Optionee shall forfeit all unexercised Options and all exercised Options under
which the Company has not yet delivered the certificates. The decision of the
Committee as to the cause of an Optionee's discharge and the damage done to the
Company shall be final. No decision of the Committee, however, shall affect
the finality of the discharge of such Optionee by the Company in any manner.
13. NO PROHIBITION ON CORPORATE ACTION
No provision of this Plan or any Non-Qualified Stock Option Agreement
shall be construed to prevent the Company from taking any corporate action
deemed by the Company to be appropriate or in its best interest, whether or not
such action could have an adverse effect on the Plan or any Options granted
hereunder, and no Optionee or Optionee's estate, personal representative or
beneficiary shall have any claim against the Company as a result of the taking
of such action.
14. USE OF PROCEEDS
The proceeds received by the Company from the exercise of an Option
pursuant to the Plan shall be added to the Company's working capital and used
for general corporate purposes.
15. INDEMNIFICATION
With respect to the administration of the Plan, the Company shall
indemnify each present and future member of the Board or any Committee to which
it may have delegated its authority against, and each member of such Committee
and the Board shall be entitled without further act on his part to indemnity
from the Company for all expenses (including the amount of judgments
<PAGE>
Page A-8
and the amount of approved settlements made with a view of the curtailment of
costs of litigation, other than amounts paid to the Company itself) reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his being or having been a
member of such Committee and the Board, whether or not he continues to be such
member of such Committee and the Board at the time of incurring such expenses;
provided, however, that such indemnity shall not include any expenses incurred
by any such member of such Committee and the Board (i) in respect of matters as
to which he shall be finally adjudged in any such action, suit or proceeding to
have been guilty of gross negligence or willful misconduct in the performance
of his duty as such member of such Committee and the Board; or (ii) in respect
of any matter in which any settlement is effected for an amount in excess of
the amount approved by the Company on the advice of its legal counsel; and
provided further that no right of indemnification under the provisions set
forth herein shall be available to or enforceable by any such member of any
Committee and the Board unless within 60 days after institution of any such
action, suit or proceeding, he shall have offered the Company in writing the
opportunity to handle and defend same at its own expense. The foregoing right
of indemnification shall inure to the benefit of the heirs, executors or
administrators of each such member of any Committee and the Board and shall be
in addition to all other rights to which such member of any Committee and the
Board may be entitled as a matter of law, contract or otherwise.
16. WITHHOLDING
The Company's obligation to deliver shares of Common Stock in respect
of any Option granted under the Plan shall be subject to all applicable
federal, state and local tax withholding requirements. Whenever under the Plan
shares of stock are to be delivered upon exercise of an Option, the Company
shall be entitled to require as a condition of delivery that the Optionee remit
or, in appropriate cases, agree to remit when due, an amount sufficient to
satisfy all federal, state and local withholding tax requirements relating
thereto. Federal, state and local withholding tax due upon the exercise of any
Option, in the Committee's sole discretion, may be paid in shares of Common
Stock (including the withholding of shares subject to an Option) upon such
terms and conditions as the Committee may determine.
17. EFFECTIVE DATE AND TERM OF PLAN - SHAREHOLDER APPROVAL
The Plan shall become effective as of June 19, 1987. The term during
which Options may be granted under the Plan shall expire at the close of
business on June 22, 2005, provided, however, that the Plan and all outstanding
Options shall remain in effect until the then outstanding Options have expired
or until such Options are cancelled. However, all Options granted hereunder
shall be null and void unless this Plan is approved by a vote of the holders of
a majority of the outstanding shares of the Company's Common Stock at a meeting
of shareholders of the Company held within twelve (12) months after the
effective date. If the shareholders do not approve the Plan, the Plan shall
not be effective and any and all actions taken prior to such disapproval shall
be null and void or shall, if necessary, be deemed to have been fully
rescinded.
<PAGE>
Page B-1
ANNEX B
INTERNATIONAL AMERICAN HOMES, INC.
1995 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
SECTION 1. PURPOSE. International American Homes, Inc., a Delaware
corporation (the "Company"), hereby adopts the International American Homes,
Inc. 1995 Non-Employee Directors Stock Option Plan (the "Plan"). The purpose
of the Plan is to provide an incentive to the Participants (as defined herein)
(i) to join and remain in the service of the Company, (ii) to maintain and
enhance the long-term performance and profitability of the Company and (iii) to
acquire or increase financial interests in the success of the Company.
SECTION 2. ELIGIBILITY. Each member of the Board of Directors of the
Company (the "Board") who is not a full-time employee of the Company or of any
of its subsidiaries or Affiliates (as defined herein) and who has either
(i) been twice elected as a member of the Board or (ii) served at least one
full year (I.E., a period of 365 consecutive calendar days) of a multi-year
term as a member of the Board (each, a "Participant"; and, collectively,
"Participants") will be granted options pursuant to the provisions of the Plan.
For purposes of this Plan, an Affiliate shall mean any entity controlled by the
Company.
SECTION 3. ADMINISTRATION.
3.1 THE BOARD. The Plan shall be administered by the Board.
3.2 BOARD AUTHORITY. The Board shall have the authority to:
(i) exercise all of the powers granted to it under the Plan, (ii) construe,
interpret and implement the Plan, (iii) prescribe, amend and rescind rules and
regulations relating to the Plan, (iv) make all determinations necessary or
advisable in administering the Plan, and (v) correct any defect, supply any
omission and reconcile any inconsistency in the Plan.
3.3 BINDING DETERMINATIONS. The determination of the Board on all
matters within its authority relating to the Plan shall be conclusive.
3.4 NO LIABILITY. No member of the Board shall be liable for any
action or determination made in good faith with respect to the Plan or any
award hereunder.
SECTION 4. STOCK SUBJECT TO PLAN.
4.1 STOCK. Options granted under the Plan shall be for shares of common
stock, par value $.01 per share, of the Company and any other shares into which
such stock shall thereafter be changed by reason of merger, reorganization,
recapitalization, consolidation, split-up, combination of shares, or similar
event as set forth in and in accordance with this Section 4 (the "Stock").
4.2 SHARES AVAILABLE FOR AWARDS. Subject to Section 4.3 (relating to
adjustments upon changes in capitalization), as of any date the total number of
shares of Stock with respect to which awards may be granted under the Plan
shall be 70,000 shares. In accordance with (and without limitation of) the
preceding sentence, shares of Stock covered by options granted under the Plan
that expire or terminate for any reason whatsoever shall again become available
for
<PAGE>
Page B-2
awards under the Plan. Shares of Stock that shall be issued pursuant to
the options granted under the Plan shall be authorized and unissued or treasury
shares of Stock.
4.3 ADJUSTMENTS UPON CERTAIN CHANGES. In the event of any merger,
reorganization, recapitalization, consolidation, sale or other distribution of
substantially all of the assets of the Company, any stock dividend, split,
spin-off, split-up, split-off, distribution of cash, securities or other
property by the Company, or other change in the Company's corporate structure
affecting the Stock, then the Board shall substitute or adjust (i) the
aggregate number of shares of Stock reserved for issuance under the Plan, (ii)
the number of shares of Stock subject to outstanding options and (iii) the
amount to be paid by Participants with respect to any outstanding awards, as it
determines to be equitable in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be awarded under the Plan.
SECTION 5. GRANT OF OPTIONS UNDER THE PLAN. Options shall be granted
hereunder automatically as provided in Section 6. No person shall have any
discretion to select which Participants shall be granted options, to determine
when such options shall be granted or the duration of the period within which
such options may be exercised, to determine the number of shares of Stock to be
covered by options granted to Participants, or to determine the price at which
options shall be exercised.
SECTION 6. GRANT OF OPTIONS.
6.1 INITIAL AWARDS. Each Participant as of the Effective Date (as
defined herein) shall automatically be granted, as of such date, an option to
purchase 5,000 shares of Stock.
6.2 FUTURE AWARDS. Any person who becomes a Participant subsequent to
the Effective Date shall be automatically granted, as of the date such person
becomes a Participant, an option to purchase 5,000 shares of Stock.
6.3 VESTING. No option shall be exercisable prior to the first
anniversary of the grant of such option. Each option shall be exercisable on
and after the first anniversary of its grant as follows:
<TABLE>
<CAPTION>
No. of Cumulative
Shares as No. of Shares as to Which
to Which Option Becomes Option is
Date Exercisable Exercisable
- ---- ----------- -----------
<S> <C> <C>
On or after the first anniversary of grant, 1,666 1,666
but prior to the second anniversary of grant
On or after the second anniversary of grant, 1,667 3,333
but prior to the third anniversary of grant
On or after the third anniversary of grant 1,667 5,000
</TABLE>
6.4 TRANSFERABILITY. An option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner, whether by operation
of law or otherwise, other than by will or by the laws of descent or
distribution. During the lifetime of a Participant, an option may be exercised
only by such Participant.
<PAGE>
Page B-3
6.5 STOCKHOLDER RIGHTS. No Participant shall have any rights of a
stockholder with respect to any shares of Stock subject to an option prior to
the issuance to him of certificates for such shares of Stock upon the exercise
of such option.
6.6 EXPIRATION OF OPTIONS. Options shall terminate upon the expiration
of five years from the date upon which such options were granted (subject to
prior termination as hereinafter provided).
SECTION 7. EXERCISE PRICE AND CONSIDERATION.
7.1 EXERCISE PRICE. The per share exercise price for shares of Stock
subject to an option granted pursuant to Section 6.1 or Section 6.2 hereof
shall be 100% of the Fair Market Value (as defined herein) per share on the
date of grant of such option; PROVIDED, HOWEVER, that if the date of grant is a
legal holiday on which shares of Stock are not traded, then the exercise price
shall be 100% of the Fair Market Value per share on the immediately following
business day. For purposes of this Plan, "Fair Market Value" shall mean, as of
any date, the value of shares of Stock determined as follows: if the Stock is
listed on any established stock exchange or a national market system, including
without limitation the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair Market
Value of a share of Stock shall be the closing sales price for the Stock (or
the closing bid, if no sales were reported), as quoted on such system or
exchange (or the exchange with the greatest volume of trading in Stock) as
reported in THE WALL STREET JOURNAL or such other source as is deemed reliable;
or, if on any day on which the market value is being determined the Common
Stock is not quoted in the NASDAQ System, the average of the highest bid and
lowest asked prices as reported by the National Quotation Bureau, Incorporated,
or any similar successor organization.
7.2 EXERCISE. Options granted under this Plan shall be exercised by the
Participant (or such other person exercising the option pursuant to Section 7.7
hereof) as to all or part of the shares covered thereby, by the giving of
written notice of exercise to the Company, specifying the number of shares to
be purchased, accompanied by payment of the full purchase price for the shares
being purchased. Payment of such purchase price shall be made (a) by check
payable to the Company, or (b) with the consent of the Board, by delivery of
freely transferable shares of Stock having a Fair Market Value (determined as
of the date such option is exercised) equal to all or part of the purchase
price and, if applicable, of a check payable to the Company for any remaining
portion of the purchase price. Such notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal corporate
headquarters or such other office as the Board from time to time may direct and
shall be in such form, containing such further provisions consistent with the
provisions of this Plan, as the Board from time to time may prescribe. The
Company shall effect the transfer of the shares of Stock so purchased to the
Participant (or such other person exercising the option pursuant to Section 7.7
hereof) as soon as practicable, and within a reasonable time thereafter such
transfer shall be evidenced on the books of the Company. An option may not be
exercised for a fraction of a share.
7.3 WITHHOLDING TAXES. The Company's obligation to deliver shares of
Stock in respect of any option granted under the Plan shall be subject to all
applicable federal, state and local tax withholding requirements. Whenever
under the Plan shares of Stock are to be delivered upon exercise of an Option,
the Company shall be entitled to require as a condition of delivery that the
Participant remit an amount sufficient to satisfy all federal, state and local
withholding tax requirements relating thereto.
<PAGE>
Page B-4
7.4 RULE 16B-3. Options granted to Participants must comply with the
applicable provisions of Rule 16b-3 of the General Rules and Regulations
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or any successor thereto 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 set forth in Rule 16b-3
with respect to Plan transactions. If any provision of this Plan is found not
to be in compliance with Rule 16b-3 and cannot be amended or modified by the
Board so to comply, the provision shall be deemed null and void.
7.5 TERMINATION OF STATUS AS A DIRECTOR. If a Participant ceases to
serve as a Director, he may, but only within seven (7) months after the date he
ceases to be a Director of the Company, exercise his option or options to the
extent that he was entitled to exercise it at the date of such termination.
Notwithstanding the foregoing, in no event may the option be exercised after
its term has expired. To the extent that he was not entitled to exercise an
option at the date of such termination, or if he does not exercise such option
(which he was entitled to exercise) within the time specified herein, the
option shall terminate.
7.6 DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section
7.5 above, in the event a Participant is unable to continue his service as a
Director as a result of his total and permanent disability (as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended), he may (or
if his disability is such that he is incapable of doing so, his legally
appointed committee or guardian may), but only within seven (7) months from the
date he ceases to serve as a Director, exercise his option to the extent he was
entitled to exercise it at the date of such termination. Notwithstanding the
foregoing, in no event may the option be exercised after its term has expired.
To the extent that he was not entitled to exercise the option at the date of
termination, or if such option is not exercised (to the extent that the
Participant was entitled to exercise it) within the time specified herein, such
option shall terminate.
7.7 DEATH OF OPTIONEE. Notwithstanding the provisions of Section 7.5
above, in the event of the death of a Participant, his Option may be exercised,
at any time within seven (7) months following the date of his death during his
period of service as a Director or within seven (7) months following the date
on which he ceased to serve as a Director, by the duly appointed executor or
administrator of the Participant's estate or by a person who acquired the right
to exercise the option by bequest or inheritance, but only to the extent that
the right to exercise had accrued prior to and continued to exist at the date
of his death. Notwithstanding the foregoing, in no event may the option be
exercised after its term has expired.
SECTION 8. MERGER, CONSOLIDATION, ASSET SALE, LIQUIDATION, ETC. In the
event of a merger or consolidation or sale of all or substantially all of the
assets of the Company in which outstanding shares of Stock are exchanged for
securities, cash or other property of any other corporation or business entity
or in the event of a liquidation of the Company, all or any outstanding options
shall become exercisable in full immediately prior to such event.
SECTION 9. PLAN AMENDMENTS AND TERMINATION. The Board may suspend or
terminate the Plan at any time and may amend it at any time and from time to
time, in whole or in part, PROVIDED, that the provisions of the Plan with
respect to eligibility for participation or the timing or amount of grants of
options or the duration thereof shall not be amended more than once every six
months (other than to comport with changes in the Internal Revenue Code of
1986, as amended, or the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder), and PROVIDED, FURTHER, that without the
approval of the stockholders of the Company
<PAGE>
Page B-5
an amendment shall not increase the numbers of shares subject to the Plan
(except as provided in Section 4.3) and that any amendment for which
stockholder approval is required by law or in order to obtain or
maintain continued qualification of the Plan under Rule 16b-3 under the
Exchange Act shall not be effective until such approval has been obtained.
Unless terminated earlier, the Plan will terminate on the tenth
anniversary of the Effective Date (as defined herein) and no additional
options may be granted under the Plan after such tenth anniversary.
SECTION 10. MISCELLANEOUS.
10.1 LISTING, REGISTRATION AND LEGAL COMPLIANCE. If the Board shall at
any time determine that any Consent (as hereinafter defined) is necessary or
desirable as a condition of, or in connection with, the granting of any option
under the Plan, the issuance or purchase of shares or the taking of any other
action hereunder (each such action being hereinafter referred to as a "Plan
Action"), then such Plan Action shall not be taken, in whole or in part, unless
and until such Consent shall have been effected or obtained to the full
satisfaction of the Board. Without limiting the generality of the foregoing,
in the event that (i) the Board shall be entitled under the Plan to make any
payment in cash, Stock or both, and (ii) the Board shall determine that a
Consent is necessary or desirable as a condition of, or in connection with,
payment in any one or more of such forms, then the Board shall be entitled to
determine not to make any payment whatsoever until such Consent shall have been
obtained in the manner aforesaid. The term "Consent" as used herein with
respect to any Plan Action means (i) any listing, registration or qualification
in respect thereof upon any securities exchange or under any foreign, federal,
state or local law, rule or regulation, (ii) any and all consents, clearances
and approvals in respect of a Plan Action by any governmental or other
regulatory bodies, or (iii) any and all written agreements and representations
by the recipient of an award with respect to the disposition of Stock or with
respect to any other matter, that the Board shall deem necessary or desirable
to comply with the terms of any such listing, registration or qualification or
to obtain an exemption from the requirement that any such listing,
qualification or registration be made. Without limiting the generality of the
foregoing, the Company may require any person to whom an option is granted, as
a condition of exercising such option, to give written assurances in substance
and form satisfactory to the Company to the effect that such person is
acquiring the Stock subject to the option for his or her own account for
investment and not with any present intention of selling or otherwise
distributing the same, and to such other effects as the Company deems necessary
or appropriate in order to comply with federal and applicable state securities
laws, or with covenants or representations made by the Company in connection
with any public offering of the Stock.
10.2 RIGHT OF DISCHARGE RESERVED. Nothing in the Plan shall confer upon
any Participant the right to continue in the service of the Company or any
Affiliate or affect any right that the Company or such Affiliate or any
Participant may have to terminate the service of such Participant.
10.3 OTHER PAYMENTS OR AWARDS. Nothing contained in the Plan shall be
deemed in any way to limit or restrict the Company, any subsidiary or the Board
from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect. Any
awards and payments made under this Plan shall constitute a special incentive
payment to the Participant and shall not be taken into account in computing the
amount of salary or compensation of the Participant for the purposes of
determining any pension, retirement, death or other benefits under (i) any
pension, retirement, profit sharing, bonus, life insurance or other benefit
plan of the Company or any subsidiary or (ii) any agreement between
<PAGE>
Page B-6
the Company or any subsidiary, on the one hand, and the Participant, on the
other hand, except as such plan or agreement may otherwise expressly provide.
10.4 OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such form as the Board from time to time shall approve.
SECTION 11. EXCULPATION OF COMPANY, ETC. So long as the Company acts
in good faith on the basis of its knowledge of the facts, the "Exculpated
Persons" (as defined herein) shall incur no liability to any person because of
any failure to pay to the proper persons any of the amounts payable hereunder.
For purposes of this Plan, the term "Exculpated Persons" shall mean the
Company, the Affiliates and any person that is, directly or indirectly,
controlling, controlled by or under common control with, any of the foregoing
persons, their respective directors, officers, partners, employees, agents and
counsel. The Exculpated Persons shall be under no obligation to investigate
the facts or to inquire as to the persons who are entitled to receive any
amounts payable hereunder. Should any of the Exculpated Persons undertake any
such investigation or inquiry, the Exculpated Persons shall not be liable for
any failure to carry out such investigation or inquiry diligently or
thoroughly. No Exculpated Person shall incur any liability whatsoever on
account of any matter connected with or related to the Plan or the
administration of the Plan, and the Company shall indemnify and hold harmless
all Exculpated Persons from all loss and expense (including reasonable
attorneys' fees) arising from the assertion or judicial determination of any
such liability. Each Participant accepting options pursuant to the Plan shall
be deemed to agree and acknowledge that (a) each such award shall be subject to
all of the terms and provisions of the Plan and (b) all financial information
concerning the Company and any of the subsidiaries, including auditor's
reports, are confidential and are not (by virtue of the Plan or otherwise) made
available to its employees generally or Participants in particular except, in
the case of Participants, to the extent they may be available to shareholders
under applicable state law.
SECTION 12. GOVERNING LAW. The Plan shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to agreements
made and to be performed entirely within such state.
SECTION 13. NOTICES. All notices and other communications hereunder
shall be given in writing, shall be personally delivered against receipt or
sent by registered or certified mail, return receipt requested, shall be deemed
given on the date of delivery or of mailing, and if mailed, shall be addressed
(a) to the Company, at its principal corporate headquarters, and (b) to a
Participant, at the Participant's principal residential address last furnished
to the Company. Notices sent to the Company shall be sent to International
American Homes, Inc., 6001 Montrose Road, Suite 910, Rockville, Maryland 20852,
Attn: Chief Financial Officer. Either party may, by notice, change the
address to which notice to such party is to be given.
SECTION 14. SECTION HEADINGS. The Section headings contained herein
are for the purposes of convenience only and are not intended to define or
limit the contents of said Sections.
SECTION 15. EFFECTIVE DATE. The Plan shall become effective on the
date (the "Effective Date") it is adopted by the Board, subject to approval by
the Company's stockholders, but no option granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
stockholders. If such stockholder approval is not obtained within twelve
months after the date of the Board's adoption of the Plan, all options granted
under the Plan shall terminate, and no further options shall be granted under
the Plan. Amendments to the
<PAGE>
Page B-7
Plan not requiring stockholder approval shall become effective when adopted
by the Board of Directors; amendments requiring stockholder approval
(as provided in Section 9) shall become effective when adopted by the
Board, but no option granted after the date of such amendment shall become
exercisable (to the extent that such amendment to the Plan was required
to enable the Company to grant such option to a particular optionee) unless
and until such amendment shall have been approved by the Company's
stockholders. If such stockholder approval is not obtained with twelve months
of the Board's adoption of such amendment, any options granted on or after the
date of such amendment shall terminate to the extent that such amendment to the
Plan was required to enable the Company to grant such option to a particular
optionee.
<PAGE>
INTERNATIONAL AMERICAN HOMES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS SEPTEMBER 12, 1995
Whether or not you expect to attend the meeting, you are urged to execute and
return this proxy, which may be revoked at any time prior to its use.
The undersigned hereby appoints Robert J. Suarez and Michael P. Villa
individually as Proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote, as designated below,
all of the shares of Common Stock of International American Homes, Inc. (the
"Company") held of record by the undersigned on July 14, 1995, at the annual
meeting of stockholders to be held on September 12, 1995 or at any adjournment
or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDERS. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTORS AND FOR PROPOSALS 1, 2
AND 3.
(Continued, and to be dated and signed on the reverse side.)
<PAGE>
- -------
- -------
1. ELECTION OF DIRECTORS NOMINATED AND LISTED BELOW
FOR ALL nominees listed below [ ] WITHHOLD AUTHORITY [ ] *Exception [ ]
to vote
for all nominees
listed below
PETER A. DAVIS, PHILIP T. MERCER, JEFFREY D. PROL
* (Instruction: To withhold authority to vote for any individual nominee,
mark the Exception Box and write that nominee's name in the space provided
below.)
- ------------------------------------------------------------------------------
2. PROPOSAL ONE - Approval of amendments to the Amended and Restated
International American Homes, Inc. Non-Qualified Stock Option Plan as
described in the accompanying Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TWO - Approval of the International American Homes, Inc. 1995 Non-
Employee Directors Stock Option Plan as described in the accompanying Proxy
Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. PROPOSAL THREE - Appointment of Arthur Andersen LLP as the Company's
independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment or
postponement thereof.
Address
Change
and/or
Comments [ ]
PROXY DEPARTMENT
NEW YORK, N.Y. 10203-0310
NOTE: Signatures should agree with the name
specified herein. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. For joint
accounts or co-fiduciaries, all joint owners
or co-fiduciaries should sign.
Dated , 1995
Signature
Signature, if held jointly
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK.
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
