SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party Other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
International American Homes, Inc.
------------------------------------------------------
(Name of Registrant as Specified in its Charter)
------------------------------------------------------------------------
(Names of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of Securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on filing fee is
calculated and state how it was determined):
N/A
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
N/A
2) Form, Schedule or Registration Statement No.: N/A
<PAGE>
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held
September 17, 1998
----------------------------------------
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 10:00 A.M. on Thursday, September 17, 1998 at the Radisson Hotel,
10221 Princess Palm Avenue, Tampa, Florida, for the purpose of considering and
acting upon the following matters as set forth in the accompanying Proxy
Statement:
1. To elect seven Directors to hold office as specified in the
accompanying Proxy Statement
2. To consider and vote upon a proposal to amend the Restated
Certificate of Incorporation of the Company to effect a 1-for 3
reverse stock split of the Company's issued and outstanding common
stock, par value $.01 per share (the "Common Stock")
3. 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, 1999; and
4. 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 21, 1998
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, Secretary and Chief Financial Officer
August 10, 1998
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>
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 10:00 A.M. on Thursday, September 17,
1998 at the Radisson Hotel, 10221 Princess Palm Avenue, Tampa, Florida, 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 10, 1998. The mailing address of the Company's principal
executive offices is 9950 Princess Palm Avenue, Suite 112, Tampa, Florida,
33619.
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
instructions are 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.
<PAGE>
VOTING PROCEDURES
Only stockholders of record at the close of business on July 21, 1998
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting.
On the Record Date there were 2,780,895 shares of common stock, par value $.01
per share ("Common Stock") outstanding. Each outstanding share of Common Stock
is entitled to one vote at the Annual Meeting on all matters properly presented
at the meeting.
The presence in person or by proxy of holders of at least a majority of
the outstanding shares of Common Stock is necessary to constitute a quorum at
the Annual Meeting. Directors will be elected by a plurality of the votes cast;
the affirmative vote of the holders of a majority of the outstanding Common
Stock will be required for approval of the proposal to amend the Restated
Certificate of Incorporation of the Company to effect a one-for-three reverse
stock split of the Company's outstanding Common Stock; and the affirmative vote
of the holders of a majority of the total votes cast at the Annual Meeting on
the proposal 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, 1999 is required to approve such proposal.
Abstentions will be counted for purposes of determining the presence of
a quorum at the Annual Meeting but will not be counted as votes cast.
Abstentions will have no effect on the voting of the proposals at the Annual
Meeting, other than the proposal to amend the Company's Restated Certificate of
Incorporation (in which case abstentions will be equivalent to "No" votes).
Under rules applicable to broker/dealers, the proposals to elect directors and
ratify the appointment of independent auditors for fiscal 1999 are considered
"discretionary" items upon which broker/dealers may vote in their discretion on
behalf of their clients if such clients have not furnished voting instructions
within ten days of the meeting and thus (except as forth above) there will be no
"broker non-votes" at the Annual Meeting.
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.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Voting Securities
The outstanding voting securities of the Company on the Record Date
consisted of 2,780,895 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.
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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 21, 1998 held by (i) each director of
the Company, and each executive officer whose name appears in the Summary
Compensation Table, and all directors, nominees for director, and executive
officers as a group and (ii) 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. 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 (3) 851,439 30.51%
Robert I. Antle 19,545 *
William D. Aiken (1) 5,000 *
Dionel Cotanda (1) 21,748 *
Peter A. Davis (1) (6) 174,915 6.28%
Robert E. Everett (1) 5,000 *
James G. Farr (2) 3,333 *
Brian Gibney (1) 5,000 *
Jeffrey D. Prol (1) 6,000 *
Ronald I. Heller (5) 201,572 7.25%
All current directors,
executive officers, and 5% 1,293,552 45.80%
shareholders as a group (10 persons) (4)
* Less than one percent (1%).
(1) Includes 5,000 shares of Common Stock which each director, to whom this
note applies, 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
each of those directors, but not for the purpose of computing the
percentage of class beneficially owned by any other person.
(2) Includes 3,333 shares of Common Stock which Mr. Farr 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. Farr, but not for the
purpose of computing the percentage of class beneficially owned by any
other person.
(3) Includes 10,000 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.
(4) Includes 43,333 shares of Common Stock which current officers and
directors 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.
(5) Mr Ronald I. Heller filed a schedule 13D on December 9, 1996 disclosing
ownership of 197,683 shares. Mr Heller is not affiliated with the
company or its subsidiaries in any capacity. At March 31, 1998, Mr.
Heller reported ownership of 201,572 shares.
(6) Does not include 135,450 shares held by Ina J. Davis in respect of which
Mr. Davis disclaims any beneficial interest.
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PROPOSAL ONE
ELECTION OF DIRECTORS
Pursuant to the certificate of Incorporation, the number of Directors
shall not be less than 7 nor more than 15 as may be determined from time to time
by affirmative vote of the majority of the Board of Directors. On June 18, 1998
the Board of Directors voted unanimously to reduce the number of Directors from
nine to seven. Directors shall be divided into three classes, designated class
I, class II and class III. Class I directors shall be elected for a one-year
term, class II directors shall be elected for a two-year term and class III
directors for a three-year term. At each subsequent annual meeting of
stockholders, successors to the class of directors whose term expires at that
annual meeting shall be elected for a term of three years.
The Board of Directors recommends that the accompanying forms of proxy
be voted for the nominees for the Board of Directors as set forth below. The
nominees have each consented to serve for the respective term, based upon the
class in which they are included , until their respective successors are duly
elected and qualify. Proxies received will be voted in the manner directed in
the proxies or, if no direction is made, for the election of such nominees. If
any nominee declines or is unable to serve, proxies will be voted for a
substitute nominee as recommended by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ITS
NOMINEES FOR DIRECTOR, AND SIGNED PROXIES WHICH ARE RETURNED WILL BE SO VOTED
UNLESS A CONTRARY VOTE IS DESIGNATED ON THE PROXY CARD.
Nominees for the Board of Directors
The following table sets forth, information regarding the nominees for
the Board of Directors by class including, 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.
Served as Director Since
CLASS III (TERMS EXPIRING IN 2001)
Robert J. Suarez (age 49) ..................................................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.
Robert I. Antle (age 43) ...................................................1996
Mr. Antle became a member of the Board of Directors in December 1996
when he was appointed Acting President of Porten Sullivan Corporation.
Mr. Antle is also a Director of Porten Sullivan Corporation. Mr. Antle
has served as Acting President and Chairman of Porten Sullivan
Corporation since December 1996. For a period of more than five years,
Mr. Antle has been employed by Suarez Housing Corporation as Vice
President, Chief Financial Officer and Secretary. He currently serves
as Executive Vice President, Treasurer, Secretary and Chief Financial
Officer of the Company.
Peter A. Davis (age 61).....................................................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 Chief Financial Officer of the Company. From May 1988
to September 1992
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he was a Director of the Company. Mr. Davis was re-elected in 1994. Mr.
Davis is a Certified Public Accountant.
CLASS II (TERMS EXPIRING IN 2000)
Dionel Cotanda (age 60) ....................................................1992
Mr. Cotanda was appointed to the Board of Directors by the Official
Creditors Committee in the Reorganization Cases of International
American Homes, Inc., Inland Pacific Communities, Inc., Porten Sullivan
Corporation of Florida, Suarez Housing Corporation, Beacon Hill Farm
Associates II and Lakeview Professional Park (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.
James G. Farr (age 49) .....................................................1996
Mr. Farr is an attorney and has for a period of more than five years
been the President and Chief Executive Officer of Paramount Title
Corporation, a company of which he is the sole stockholder. Paramount
Title Corporation conducts a transactional real estate practice and
title insurance business in Tampa, Florida.
CLASS I (TERMS EXPIRING IN 1999)
William D. Aiken (age 41) ..................................................1992
Mr. Aiken was appointed to the Board of Directors by the IAH Creditors
Committee. Mr. Aiken is also a Director of Suarez Housing Corporation.
Mr. Aiken is a Certified Public Accountant who has been 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.
Jeffrey D. Prol (age 35)....................................................1994
Mr. Prol is an attorney and for a period of more than five years has
been associated with and became member of the law firm of Ravin,
Sarasohn, Cook, Baumgarten, Fisch & Baime. ("Ravin, Sarasohn") of
Roseland, New Jersey. Ravin, Sarasohn served as counsel to the Company
in connection with the Chapter 11 bankruptcy filings. Mr. Prol was one
of the principal attorneys involved in that matter.
The Board of Directors and its Committees
The Board of Directors has an Executive Committee which has the
authority to review and approve all land acquisitions by the Company's
subsidiaries and all guarantees by the Company of loans to the Company's
subsidiaries. Members of the Executive Committee are Mr. Suarez, Mr. Antle, Mr.
Cotanda, Mr. Davis, and Mr. Everett.
The Board of Directors has an Audit Committee which 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
5
<PAGE>
recommends to the Board the appointment of the independent auditors. Members of
the Audit Committee are Mr. Gibney, Mr. Aiken, and Mr. Davis.
The Board of Directors has a Compensation Committee which 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.
The Board of Directors has a Nominating Committee which 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. Antle, and
Mr. Cotanda.
The Board of Directors has a Conflicts of Interest Committee which
approves transactions involving any actual or potential conflicts of interest
between the Company and any officer, director, employee, or agent. Members of
the Conflicts of Interest Committee are Mr. Prol and Mr. Gibney.
Four meetings of the Board of Directors were held during the fiscal
year ended March 31, 1998. All of the Directors attended at least 75% of those
meetings. Two meetings of the Audit Committee and one meeting of the
Compensation Committee were held during the fiscal year ended March 31, 1998.
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
$1,500 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.
6
<PAGE>
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, 1998,
1997, and 1996 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, 1998 was in excess of $100,000.
Summary Compensation Table (1)
Annual Compensation
-----------------------------
Name and Salary Bonus
Principal Position Year ($) ($)
------------------------------ -------- ------------ ------------
Robert J. Suarez, (2) 1998 $303,456 $100,000
Chairman and President 1997 295,888 50,000
1996 281,115 0
Robert I. Antle, (2) 1998 $167,526 $66,000
Executive Vice President, 1997 162,276 33,000
Treasurer, Chief Financial 1996 142,286 15,000
Officer and Secretary
Kenneth W. Carlson, (3) 1998 $0 $0
Vice President 1997 113,654 25,000
1996 138,462 0
Michael P. Villa, (3) 1998 $0 $0
Vice President, Treasurer 1997 88,457 7,500
and Chief Financial Officer 1996 100,000 12,000
(1) The columns designated for the reporting of other annual compensation,
restricted stock awards, long-term incentive plan payouts, and long-term
compensation awards have been omitted because 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. The Company does not grant
stock appreciation rights of any kind.
(2) Upon the confirmation of the Plan of Reorganization on August 12, 1992,
Suarez Housing Corporation entered into an employment agreement with Robert
J. Suarez. See "Employment Agreements" below. Subsequently, in September
1992, Mr. Suarez and Mr. Antle were appointed to their positions as Chairman
and President, and as Vice President and Secretary, of the Company,
respectively. Mr. Antle was subsequently elevated to the position of
Executive Vice President, Treasurer and Chief Financial Officer.
Accordingly, the compensation appearing on the table above represents all
compensation received by the named executive officers from Suarez Housing
Corporation during the fiscal years ended March 31, 1998, 1997, and 1996.
The named executive officers do not receive compensation directly from the
Company.
(3) No longer employed by the Company.
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Stock Options
During the fiscal year ended March 31, 1998 a stock option was granted
to Robert I. Antle for 50,000 shares at an exercise price of $1.50 per share,
which was the fair market value on the date the option was granted.
The following table sets forth certain information with respect to the
named executive officers concerning the exercise of stock options during the
fiscal year ended March 31, 1998 and the value of unexercised stock options held
as of March 31, 1998.
Aggregated Option Exercises in Fiscal Year 1998 and Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Securities
Shares Value Underlying Unexercised Underlying Unexercised
Acquired on Realized Options In-the-Money Options
Exercise (#) ($) at Fiscal Year End at Fiscal Year End ($) (1)
--------------- --------------- --------------- ---------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------- ----------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. -- -- 10,000 90,000 15,313 $137,812
Suarez
Robert I. 2,500 $1,328 0 50,000 -- $ 76,563
Antle
</TABLE>
(1) The fair market value of the Common Stock at the Company's fiscal year end,
March 31, 1998, was $ 1 17/32 per share based upon the last trade price as
reported by Bloomberg Financial Services.
Employment Agreement
In accordance with the terms of the Plan, the Company entered into an
employment agreement with Robert J. Suarez. The employment agreement was
approved by the Bankruptcy Court as part of the Plan and became effective as of
the date of confirmation of the Plan, August 12, 1992. Mr. Suarez is currently
employed by the Company as Chairman and President. He is also employed by Suarez
Housing Corporation as Chairman and President. The employment agreement
originally was to expire on August 12, 1995 and was extended by the Board in
June 1995 and June 1998 for three additional years, subject to certain
modifications, so that it now expires on August 12, 2001. The employment
agreement provided 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"). Mr. Suarez' base compensation was increased to
$290,000 on August 12, 1995 and to $325,000 on August 12, 1998 and will be
adjusted thereafter 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 equal to six months' pay.
The employment agreement, as extended, provides that in the event Mr. Suarez'
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.
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Compensation Committee Interlocks and Insider Participation
Mr. Dionel Cotanda, a member of the Compensation Committee 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, 1998, 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 $ 3,711,000 to Suarez Housing Corporation.
Mr. Robert E. Everett, a member of the Compensation Committee of the
Board of Directors, is Executive Vice President of McCrea Equipment Company,
Inc. During the year ended March 31, 1998, McCrea Equipment Company sold
heating, ventilating and air conditioning systems in the amount of approximately
$459,000 to Porten Sullivan Corporation.
Mr. Peter A. Davis, a member of the Compensation Committee of the Board
of Directors, 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 five additional one-year terms which expire on November 1,
1998. 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 compensation of $42,000 per year. During the fiscal year ended
March 31, 1998, the Company paid $60,000 to Mr. Davis for his consulting
services.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective January 1994, Mr. Suarez agreed to personally guarantee
certain bank loans for Suarez Housing Corporation. At March 31, 1998, the
maximum aggregate principal amount of loans eligible for the guarantee was
$13,700,000, and the outstanding principal amount of the loans guaranteed at
March 31, 1998 was $3,766,000. 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 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, 1998, the Company paid $80,000 to
Mr. Suarez in consideration for his personal guarantees.
During the fiscal year ended March 31, 1997, Suarez Housing Corporation
paid $764,000 for twenty-eight 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. James G. Farr, a Director, is the sole stockholder and President
and Chief Executive Officer of Paramount Title Corporation. During the year
ended March 31, 1998, Paramount Title Corporation provided settlement and title
insurance services for substantially all the homes sold by Suarez Housing
Corporation.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General
The Compensation Committee administers the Company's executive
compensation program and makes specific recommendations to the Board of
Directors regarding the amount 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. The Compensation Committee is
composed of three non-employee directors. See "The Board and its Committees."
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The Company's executive compensation program is intended to enable the
Company 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". This
employment agreement, which was approved by the Bankruptcy Court, governed the
terms of Mr. Suarez' employment including his compensation and covered the
period from August 12, 1992 through August 12, 1995. On June 22, 1995, the
Compensation Committee recommended and the Board of Directors approved a
three-year renewal of Mr. Suarez' employment agreement with an annual salary of
$290,000 subject to annual CPI adjustments. On June 18, 1998, the Compensation
Committee recommended and the Board of Directors approved a three year renewal
of Mr. Suarez employment agreement with an annual salary of $325,000 subject to
annual CPI adjustments. Factors that were considered in making this
recommendation included the performance of the Company and its principal
subsidiary and the compensation received by Chief Executive Officers of
comparable companies. The market value of the Company's stock was not a factor
considered in determining the Chief Executive Officer's compensation. All of Mr.
Suarez' compensation is received from Suarez Housing Corporation. He does not
receive any compensation directly from the Company. During the fiscal year ended
March 31, 1997 a stock option was granted to Robert J. Suarez in the amount of
100,000 shares. The exercise price of $1.3125 was the fair market value on the
date the option was granted.
Compensation of Other Executive Officers
The Compensation Committee made recommendations regarding the
compensation of the Company's other executive officers. In those instances Mr.
Suarez, the Chairman and President, who was recognized to be most familiar with
the individual employees, made recommendations to the Committee as to the amount
of the proposed remuneration. Factors considered with respect to each component
of compensation were subjective, such as perceptions of the Company's and the
individual's performance and any changes or planned changes in functional
responsibility. Also considered were the prevailing levels of compensation
within the markets where the Company operates. The market value of the Company's
stock was not a factor considered in setting executive officer compensation.
Members of the Compensation Committee:
Dionel Cotanda
Peter A. Davis
Robert E. Everett
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STOCK PERFORMANCE GRAPH
The following graph compares, on a cumulative basis, the yearly
percentage change during the five years ended March 31, 1998 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,
1993 for preparation of the graph.
[GRAPHIC OMITTED]
INDEXED RETURNS
BASE YEARS ENDING
PERIOD
COMPANY / INDEX MAR93 MAR94 MAR95 MAR96 MAR97 MAR98
- --------------------------------------------------------------------------------
INTL AMERICAN HOMES INC 100 383.06 252.02 277.22 239.31 308.67
HOMEBUILDING-500 100 104.90 78.87 99.32 95.76 194.47
S&P 500 INDEX 100 101.47 117.24 154.76 185.39 274.37
11
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PROPOSAL TWO
PROPOSED REVERSE STOCK SPLIT AND COMMON STOCK AMENDMENT
General
The Board of Directors of the Company has approved a proposal
authorizing, subject to stockholder approval, an amendment to the Company's
Restated Certificate of Incorporation to effect a reverse stock split of the
Company's outstanding Common Stock, pursuant to which each three shares of
outstanding Common Stock will automatically be combined and changed into one
share of Common Stock (the "Reverse Stock Split").
Purposes of the Reverse Stock Split
The Company believes that the Reverse Stock Split could increase the
acceptance of the Common Stock by the financial community and the investing
public.
The Company's Common Stock is traded over-the counter. On July 21,
1998, the bid price for the Common Stock as reported by the National Quotation
Bureau was ____ per share. The Company's Common Stock is considered to be a
"penny stock" and as such is more difficult to trade and will not qualify for
margin accounts at most brokerage firms. The Reverse Stock Split would decrease
the number of shares outstanding and presumably increase the per share market
price of the Common Stock. However, the share price of the Common Stock may also
be based on Company performance and other factors, some of which may be
unrelated to the number of shares outstanding. Accordingly, there can be no
assurance that the price of the Common Stock after the Reverse Split would
actually increase in an amount proportionate to the decrease in the number of
outstanding shares.
Although the Company believes that the Reverse Stock Split will have no
detrimental effect on the total value of the Company's Common Stock, there can
be no assurance that the total value of the Company's Common Stock after the
Reverse Stock Split will be the same as before. However, to the extent that a
stockholder's holding is reduced by reason of the Reverse Stock split to less
than 100 shares of Common Stock, the brokerage fees for the sale of his or her
shares will in all likelihood be higher than the brokerage fees applicable to
the sale of round lots of shares.
Certain Other Effects of the Reverse Stock Split
On July 21, 1998, there were 2,780,895 shares of Common Stock
outstanding. Consummation of the Reverse Stock Split would decrease the number
of outstanding shares of Common Stock to 926,948 shares. The par value of the
Common Stock will remain $.01 per share following consummation of the Reverse
Stock Split.
Subject to the provisions for elimination of fractional shares as
described below, consummation of the Reverse Stock Split will not result in a
change in the relative equity position or voting power of the holders of Common
Stock.
Common Stock Amendment
There will be 926,948 shares of Common Stock outstanding following
consummation of the Reverse Stock Split and 9,073,052 authorized shares will be
available for future issuance from time to time.
Manner of Effecting the Reverse Stock Split and the Common Stock Amendment;
Exchange of Certificates and Elimination of Fractional Share Interests
The Reverse Stock Split and the Common Stock Amendment will be effected
by the filing with the Secretary of State of Delaware of a Certificate of
Amendment in substantially the form attached as Exhibit A to this Proxy
Statement. The Reverse Stock Split and the Common Stock Amendment will become
effective on the date of filing, unless the Company specifies otherwise (the
"Effective Date"). Assuming stockholder approval of the proposal is obtained,
the Company plans
12
<PAGE>
to file the Certificate of Amendment at a time to be determined by the officers
of the Company, but in any event not later than June 30, 1999.
On the Effective Date, each 3 shares of "old" Common Stock will
automatically be combined and changed into one share of "new" Common Stock. No
additional action on the part of the Company or any stockholder will be required
in order to effect the Reverse Stock Split. Stockholders will be requested to
exchange their certificates representing shares of Common Stock held prior to
the Reverse Stock Split for new certificates representing shares of Common Stock
issued as a result of the Reverse Stock Split. Stockholders will be furnished
the necessary materials and instructions to effect such exchange promptly
following the Effective Date by the Company's transfer agent. Certificates
representing shares of "old" Common Stock subsequently presented for transfer
will not be transferred on the books and records of the Company until the
certificates representing the shares of "old " Common Stock have been exchanged
for certificates representing shares of "new" Common Stock. Stockholders should
not submit any certificates until requested to do so. In the event any
certificate representing shares of "old" Common Stock is not presented for
exchange upon request by the Company, any dividends that may be declared after
the Effective Date with respect to the Common Stock represented by such
certificate will be withheld by the Company until such certificate has been
properly presented for exchange, at which time all such withheld dividends which
have not yet been paid to the public official pursuant to relevant abandoned
property laws will be paid to the holder thereof or his designee, without
interest.
No fractional shares of "new" Common Stock will be issued to any
stockholder. Accordingly, stockholders of record who would otherwise be entitled
to receive fractional shares of "new" Common Stock, will, upon surrender of
their certificates representing "old" shares of Common Stock, receive a cash
payment in lieu thereof equal to the value of such fractional share determined
by reference to the average closing bid prices of the Common Stock for a period
of ten trading days immediately preceding the Effective Date, as reported by the
National Quotation Bureau. Holders of less than one "new" share of Common Stock
as a result of the Reverse Stock Split will, on the Effective Date, no longer be
stockholders of the Company.
Federal Income Tax Consequences of the Reverse Stock Split
The following description of federal income tax consequences is based
on the Internal Revenue Code of 1986, as amended, and applicable Treasury
regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this Proxy
Statement. This discussion should not be considered tax or investment advice,
and the tax consequences of the Reverse Stock Split may not be the same for all
stockholders. In particular, this discussion does not address the tax treatment
of special classes of stockholders, such as banks, insurance companies,
tax-exempt entities, and foreign persons. Stockholders desiring to know their
individual federal, state, local and foreign tax consequences should consult
their own tax advisors.
The combination and change of each 3 shares of "old" Common Stock into
one share of "new" Common Stock will be a tax-free transaction, and the holding
period and tax basis of the "old" Common Stock will be transferred to the "new"
Common Stock received in exchange therefor.
Generally, cash received in lieu of fractional shares will be treated
as received in exchange for the fractional shares (although in unusual
circumstances such cash might possibly be deemed a dividend), and stockholders
will recognize gain or loss based upon the difference between the amount of cash
received and the basis in the surrendered fractional shares.
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.
13
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PROPOSAL THREE
APPOINTMENT OF INDEPENDENT AUDITORS
At the Meeting, the Board of Directors of the Company will recommend
stockholder approval of 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, 1999. 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
1999 must be received by the Secretary of the Company at 9950 Princess Palm Ave,
Suite 112, Tampa, Florida 33619 not later than April 15, 1999 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 1999.
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 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 other than Mr. Robert J.
Suarez.
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, 1998 all filings required
to be made by Reporting Persons were made on a timely basis.
OTHER MATTERS
Other Proposals
As of the date of this Proxy Statement, the Company does not know of
any other business that will 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.
14
<PAGE>
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 may 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 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 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 Robert I.
Antle, Executive Vice President, Secretary and Chief Financial Officer,
International American Homes, Inc., 9950 Princess Palm Ave, Suite 112, Tampa,
Florida 33619.
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 "Compensation Committee Report on Executive
Compensation" and "Stock Performance Graph" shall not be deemed to be so
incorporated, unless specifically provided in any such filing.
August 10, 1998
By Order of the Board of Directors
Robert I. Antle
Executive Vice President, Secretary 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.
15
<PAGE>
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
INTERNATIONAL AMERICAN HOMES, INC.
--------------------------------
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
--------------------------------
INTERNATIONAL AMERICAN HOMES, INC., a Delaware corporation, does hereby
certify as follows:
FIRST: The first paragraph of Paragraph 5 of the Corporation's Restated
Certificate of Incorporation is hereby amended to read in its entirety as
set forth below:
"The total number of shares of capital stock which the Corporation shall
have authority to issue is fourteen million (14,000,000), of which ten
million (10,000,000) shall be shares of common stock with a par value of
$.01 per share (the "Common Stock"), and four million (4,000,000) shall be
shares of preferred stock with a par value of $.01 per share (the "Preferred
Stock"). Each share of Common Stock issued and outstanding or issued and
held in the treasury of the Corporation as of the close of business on the
date (the "Effective Date") on which the amendment to the Restated
Certificate of Incorporation of the Corporation adding this sentence shall
become effective, is hereby automatically and without further action
reclassified, converted, and changed into one-third (1/3rd) of a share of
Common Stock, par value $.01 per share, provided that no fractional shares
shall be issued pursuant to such reclassification, conversion and change.
The Corporation shall pay to each stockholder who would otherwise be
entitled to a fractional share as a result of such reclassification,
conversion and change, the cash value of such fractional share based on the
average closing bid prices of the Common Stock for a period of ten trading
days immediately preceding the Effective Date, as reported by the National
Quotation Bureau. Each certificate for Common Stock outstanding or held in
treasury on the Effective Date shall thereupon and thereafter evidence the
number of shares of Common Stock, and/or the right to receive cash into
which such shares shall have been reclassified, converted and changed, and
may be surrendered to the Corporation for cancellation in exchange for new
certificates representing such number of shares and/ or such cash".
SECOND: The foregoing amendments were duly adopted in accordance with
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be duly
executed in its corporate name this ___ day of ________, 1998.
INTERNATIONAL AMERICAN HOMES, INC.
By:_______________________________
Title:
ATTEST:
By:_______________________________
Title:
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INTERNATIONAL AMERICAN HOMES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS SEPTEMBER 17, 1998
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 Robert I. Antle
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 21, 1998, at the annual
meeting of stockholders to be held on September 17, 1998 or at any adjournment
or postponement thereof.
(Continued, and to be dated and signed on the reverse side.)
<PAGE>
1. PROPOSAL ONE - ELECTION OF DIRECTORS NOMINATED AND LISTED BELOW
FOR ALL nominees listed below [ ] WITHHOLD AUTHORITY to vote [ ] Exception [ ]
for all nominees listed below
Class I (terms expiring in 1999) nominees:
William D. Aiken and Jeffrey D. Prol;
Class II (terms expiring in 2000) nominees:
Dionel Cotanda and James G. Farr; and
Class III (terms expiring in 2001) nominees: Robert I. Antle, Peter A. Davis
and Robert J. Suarez.
* (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 TWO - Approval of amendment to the Restated Certificate of
Incorporation of the Company to effect a 1-for-3 reverse stock split of the
Company's issued and outstanding common stock, par value $.01 per share
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL THREE - Appointment of Arthur Andersen LLP as the Company's
independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. 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 TABULATION
<TABLE>
<CAPTION>
<S> <C>
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.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDERS. IF NO DIRECTION IS MADE, THE PROXY
WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
Dated_______________________________________, 1998
--------------------------------------------------
Signature
--------------------------------------------------
Signature, if held jointly
SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE Votes MUST be indicated (x) in Black or Blue ink.
</TABLE>
