<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
J.M. PETERS COMPANY, INC.
(Name of Registrant as Specified in Its Charter)
GREG PETERSEN
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions 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 statement no.:
- - - --------------------------------------------------------------------------------
(3) Filing party:
- - - --------------------------------------------------------------------------------
(4) Date filed:
- - - --------------------------------------------------------------------------------
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1Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
J.M. PETERS COMPANY, INC.
3501 JAMBOREE ROAD
SUITE 200
NEWPORT BEACH, CALIFORNIA 92658
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 12, 1994
The Annual Meeting of Stockholders (the "Meeting") of J.M. Peters Company,
Inc. (the "Company") will be held at the Four Seasons Hotel, 690 Newport Center
Drive, Newport Beach, California, on July 12, 1994, at 9:00 a.m. (Newport Beach
Time) for the following purposes:
1. To elect directors whose terms expire at the Meeting; and
2. To authorize an Amendment of the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock
of the Company from 15,000,000 to 30,000,000.
3. To consider such other matters as may properly come before the
Meeting or any adjournment thereof.
Only holders of record of the Company's Common Stock at the close of
business on June 7, 1994, will be entitled to notice of and to vote at the
Meeting or any adjournment thereof. The Company's stock transfer books will
remain open.
A Proxy Statement and Proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date and return the Proxy promptly. All
stockholders are cordially invited to attend the Meeting.
By Order of the Board of Directors
[sig]
GREG R. PETERSEN
Secretary
June 20, 1994
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED STATES.
<PAGE> 3
J.M. PETERS COMPANY, INC.
3501 JAMBOREE ROAD
SUITE 200
NEWPORT BEACH, CALIFORNIA 92658
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 12, 1994
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of J.M. Peters Company, Inc. (the "Company")
for use at the Annual Meeting of Stockholders (the "Meeting") to be held on July
12, 1994, and at any adjournment thereof, for the purposes set forth herein. All
properly completed proxies will be voted in the manner specified therein, and if
no choice as to Proxy Item No. 1 (Election of Directors) is specified, proxies
will be voted for the election to the Board of Directors of the nominees listed
below under "ELECTION OF DIRECTORS", and if no choice as to Proxy Item No. 2
(Amendment to Increase Authorized Shares of Common Stock) is specified, Proxies
will be voted to approve the Amendment. Any proxy given pursuant to this
solicitation may be revoked prior to the Meeting by delivering an instrument
revoking it or by delivering a duly executed proxy bearing a later date to the
Secretary of the Company. A stockholder may elect to attend the Meeting and vote
in person notwithstanding the fact that such stockholder has a proxy
outstanding.
The Board of Directors has established June 7, 1994, as the record date for
determining the stockholders entitled to notice of and to vote at the Meeting.
At the close of business on the record date, there were outstanding and entitled
to vote 14,995,000 shares of the Company's common stock, $.10 par value per
share (the "Common Stock"), with each share being entitled to one vote.
This Proxy Statement and the accompanying form of proxy were first mailed
to stockholders on or about June 20, 1994. Copies of the Company's 1994 Annual
Report were mailed to the Company's stockholders along with this Proxy
Statement.
ELECTION OF DIRECTORS (PROXY ITEM NO. 1)
The Company's Board of Directors is comprised of five directors, each of
whom are to serve until the next meeting at which directors are elected. At the
Meeting, five persons will be elected to serve as directors.
Each of the nominees listed below is currently a director and has been
nominated by the Board to serve as a director of the Company until the next
annual meeting of the stockholders of the Company following his election. When
properly executed and returned, the enclosed proxy will be voted in favor of the
election of each of the nominees, unless authority to vote for a nominee is
withheld. In the event that a nominee is unable to serve (an event which is not
anticipated) or does not receive sufficient votes to be elected, then the person
acting pursuant to the authority granted under the proxy will cast votes for the
remaining nominee and, in his best judgment, for such other person as he may
select in place of such nominee.
<PAGE> 4
The following table sets forth the name, age, and background information
concerning the nominees. Information regarding the nominee's ownership of Common
Stock appears under the heading "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT" below.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE INFORMATION ABOUT NOMINEES
---- --- -------- --------------------------
<S> <C> <C> <C>
Hadi Makarechian 46 1992 Mr. Makarechian has been Chairman of the Board of the
Company since August, 1992 and Chief Executive Officer of
the Company since March, 1993. Mr. Makarechian is the
founder and chairman of Capital Pacific Homes Inc., a real
estate development firm located in Newport Beach,
California. For more than ten years prior to forming
Capital Pacific Homes, Inc., in 1990, Mr. Makarechian
conducted his real estate development business through
various corporate entities bearing the name "Shamron
Corporation," organized in various jurisdictions, of each
of which he was also Chairman and founder.
Dale Dowers 38 1992 Mr. Dowers has been Executive Vice President and Chief
Operating Officer of the Company from August, 1992 until
March, 1993 when he assumed his current position of
President and Chief Operating Officer. From December 1990
to August 1992 he was the President of Capital Pacific
Homes, Inc. From July 1989 to December 1990, he was the
President for Southern California of Costain Homes, Inc.,
a developer of single family housing located in Newport
Beach, California. During the period of March 1988 to June
1989, Mr. Dowers was the President, Irvine Division, of
Barratt American, Inc., a homebuilder in Irvine,
California. From January 1987 to March 1988, Mr. Dowers
served in various positions with the Company.
James M. Peters, Jr. 59 1975 Mr. Peters is currently retired. From 1975 until August of
1992, Mr. Peters was Chairman of the Board, President and
Chief Executive Officer of the Company. From August of
1992 until his resignation as an officer of the Company in
February 1993, he was President and Chief Executive
Officer of the Company.
Karlheinz M. Kaiser 35 1993 Mr. Kaiser is a management consultant with Friedli &
Partner, a management consulting firm in Switzerland. From
January through August of 1992, he was Vice President of
Corporate Finance with Dai-Ichi Kangyo Bank in Zurich.
From July 1984 through December of 1991, Mr. Kaiser was
Vice President of Omni Holding AG, a Zurich-based
international holding company.
Allan L. Acree 51 1992 Mr. Acree is a principal in A.L. Acree & Associates, a real
estate consulting firm based in Rockville, Maryland. Prior
to forming A.L. Acree & Associates in 1989, Mr. Acree was
Vice President and Regional Manager of Goldome Realty
Credit Corporation for a period of more than five years.
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS; DIRECTORS' COMPENSATION
Each member of the Board of Directors of the company who is not also an
officer of the Company is compensated at a rate of $4,000 per year, plus $1,000
for each meeting of the Board which he attends, and is reimbursed for the
expenses of attending meetings. The Board of Directors held five meetings during
the fiscal year ended February 28, 1994.
2
<PAGE> 5
The Board of Directors has a standing Executive Committee whose current
members are Hadi Makarechian and Dale Dowers. Messrs. Makarechian and Dowers are
not compensated for serving on the Executive Committee.
The Board of Directors has a standing Audit Committee whose current members
are Allan L. Acree and Karl Kaiser. Messrs. Acree and Kaiser each receive $2,000
per year for participating on the Audit Committee. The Audit Committee has the
responsibility of reviewing the Company's financial statements, evaluating
internal accounting controls, reviewing reports of regulatory authorities and
determining that all audits and examinations required by law are performed. The
Audit Committee did not hold any meetings during the fiscal year ended February
28, 1994.
The Board of Directors has a standing Compensation Committee whose current
members are Allan L. Acree and Karl Kaiser. Messrs. Acree and Kaiser each
receive $500 for each meeting attended. The primary function of the Compensation
Committee is to advise the Board of Directors with respect to all matters
relating to executive compensation. The Compensation Committee held one meeting
for the fiscal year ended February 28, 1994.
The Board of Directors does not have a standing nominating committee or
other standing committees performing similar functions.
Each current director who was a director at the time of such meetings
attended at least 75% of the total of the Board meetings and meetings of the
committees of the Board of which he is a member.
3
<PAGE> 6
EXECUTIVE OFFICERS
In addition to Messrs. Makarechian and Dowers, the Company's executive
officers are as follows:
<TABLE>
<CAPTION>
NAME AND
POSITION INFORMATION ABOUT
WITH COMPANY AGE EXECUTIVE OFFICERS
------------ --- ------------------
<S> <C> <C>
Gregory R. Petersen 39 From 1989 until he assumed his current position in
Vice President and Chief 1990, Mr. Peterson served as Vice
Financial Officer President -- Controller. From 1986 until 1989,
Mr. Petersen served as Corporate Controller for
the Company.
Robert J. Trapp 50 Mr. Trapp, since 1980, has been responsible for
Vice President of Forward all of the Company's activities relating to
planning govenmental regulations, civil engineering,
offsite construction, utility coordination,
California Department of Real Estate processing
and homeowners' associations.
Robin V. Koenemann 36 Mr. Koenemann has served as Vice President of
Vice President of Construction Construction since joining the Company in
October, 1992. From December, 1988 until joining
the Company Mr. Koenemann was Project Manager
for Barratt American, a homebuilder in Irvine,
California. Prior to this Mr. Koenemann served
as Executive Vice President and Division Manager
for Richmond Homes, a homebuilder in Colorado
Springs, Colorado.
Marquis L. Cummings 55 Mr. Cummings was Vice President -- Finance and
Vice President Administration for the San Diego division of the
Company from August 1987 until February 1991. He
then served as Vice President of the Company
until October 1993 when he assumed the position
of Vice President -- Sales and Marketing. In May
1994 Mr. Cummings assumed the position of
Director of Subsidiary Operations -- Nevada.
Scott N. Coler 34 Mr. Coler has served as Vice President since
Vice President joining the Company in August, 1992. From May,
1991 to August, 1992 he served as Project
Manager for Capital Pacific Homes, Inc., a
homebuilder based in Newport Beach, California.
Prior to joining Capital Pacific Mr. Coler was a
Project Manager for Costain Homes, Inc., a
homebuilder in Newport Beach, California for
four years.
Craig A. Foster 40 Since joining the Company in 1985, Mr. Foster has
Vice President been responsible for arranging home buyer
mortgage financing. In 1987 Mr. Foster assumed
the additional responsibility for managing the
Company's escrow operation. In 1992 Mr. Foster
added the management of the Company's design
center to his responsibilities.
Tim Hamilton 39 Since 1989 Mr. Hamilton has been a consultant to
Vice President -- Sales and the real estate industry. Prior to establishing
Marketing his consulting firm Mr. Hamilton spent more than
13 years as Vice President of Sales and
Marketing for Barratt American, a homebuilder in
Irvine, California. In May 1994 Mr. Hamilton
joined the Company as Vice President -- Sales
and Marketing.
</TABLE>
All executive officers serve at the pleasure of the Board of Directors.
4
<PAGE> 7
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the cash compensation paid during the fiscal
years ended February 28, 1994, 1993 and 1992 to each of the five most highly
compensated officers of the Company in all capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------- ALL OTHER
FISCAL SALARY BONUS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)(A) ($)(A) ($)(B)
--------------------------- ------ ------- ------- ------------
<S> <C> <C> <C> <C>
Hadi Makarechian -- Chairman 1994 $225,000 -- --
and Chief Executive Officer 1993 117,692(c) -- --
1992 -- -- --
Dale Dowers -- President and 1994 225,000 -- --
Chief Operating Officer 1993 117,692(c) -- --
1992 -- -- --
Robert J. Trapp -- Vice President of 1994 118,078 $12,000 --
Forward Planning 1993 112,456 -- $3,000
1992 112,456 -- 6,000
Gregory R. Petersen -- Vice President 1994 115,500 10,000 --
and Chief Financial Officer 1993 110,056 -- --
1992 110,414 -- 6,000
Robin V. Koenemann -- Vice President 1994 99,250 11,000 --
of Construction 1993 34,949(d) -- --
1992 -- -- --
</TABLE>
- - - ---------------
(a) Amounts shown include cash compensation earned and received by executive
officers.
(b) Car allowance that was discontinued in August 1992.
(c) Represents amounts paid for the period August 1992 through February 1993.
(d) Represents amounts paid from October 1992 to February 28, 1993.
STOCK OPTIONS
The Company has adopted a stock option plan (the "Stock Option Plan") with
respect to the Company's common stock. The maximum number of shares currently
subject to option under the Stock Option Plan is 5,000 shares. Under the Stock
Option Plan, directors and key employees of the Company and key employees of the
Company's parent and any of its subsidiaries are eligible to receive options to
purchase Common Stock. The Board of Directors (or a committee thereof)
administers the Stock Option Plan and designates the recipients of options, the
dates of grants, the number of shares subject to options, the option price, the
terms of payment upon exercise of the options and the time period during which
the options may be exercised. The options may be either "Incentive Stock
Options" (which qualify for certain favorable tax treatment under the Internal
Revenue Code) or "Non-Incentive Stock Options" (which are non-qualified
options). The option price for Incentive Stock Options may not be less than the
fair market value, and for Non-Incentive Stock Options not less than 85% of the
fair market value, of the shares of Common Stock at the time the option is
granted. No Incentive Stock Option may exceed a term of ten years.
The Stock Option Plan also allows the Board of Directors to grant stock
appreciation rights ("SARs") in conjunction with options, which will allow the
grantee to receive in cash or Common Stock the difference between the option
exercise price and the fair market value of the Common Stock at the time of
exercise. The exercise of SARs will result in a reduction in the number of
shares of Common Stock covered by the option.
5
<PAGE> 8
Currently, all options previously granted have either been exercised or
have expired.
The Company did not grant any options under the Stock Option Plan during
fiscal year 1994.
EMPLOYMENT AGREEMENTS
None of the executive officers are currently working with a contract.
6
<PAGE> 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENET
The following table sets forth as of June 6, 1994, the number of shares of
Common Stock beneficially owned by each person known to the Company to own more
than five percent (5%) of the outstanding shares of Common Stock, by each
director of the Company or nominee who owned shares of Common Stock on that
date, and by all directors and officers of the Company as a group.
<TABLE>
<CAPTION>
COMMON STOCK PERCENT OF
NAME AND ADDRESS BENEFICIALLY OWNED(1) CLASS(1)
---------------- --------------------- ----------
<S> <C> <C>
Capital Pacific Homes, Inc. ....................... 12,000,000 80.0%
3501 Jamboree Road, Suite 200,
Newport Beach, CA 92660
Hadi Makarechian................................... 9,946,800(2) 66.3%
3501 Jamboree Road, Suite 200,
Newport Beach, California 92660
Dale Dowers........................................ 2,053,200(3) 13.7%
3501 Jamboree Road, Suite 200,
Newport Beach, California 92660
Roger Nix(4)....................................... 1,015,000 6.8%
3501 Jamboree Road, Suite 200,
Newport Beach, CA 92660
Robert J. Trapp.................................... 10,000 0.1%
3501 Jamboree Road, Suite 200,
Newport Beach, California 92660
Marquis L. Cummings................................ 100 --
3501 Jamboree Road, Suite 200,
Newport Beach, California 92660
James M. Peters.................................... 100 --
3501 Jamboree Road, Suite 200,
Newport Beach, California 92660
All Directors and Officers of the Corporation
as a Group (11 persons).......................... 12,010,200 80.1%
</TABLE>
- - - ---------------
(1) Unless otherwise indicated, the Company believes the beneficial owner has
sole voting and investment power over such shares. The percentage of shares
of Common Stock is calculated assuming that the beneficial owner has
exercised any options or other rights to subscribe held by such beneficial
owner that are currently exercisable or exercisable within 60 days, and that
no other options or rights to subscribe have been exercised by anyone else.
(2) Includes 9,946,800 shares of Common Stock held by CPH, in which Mr.
Makarechian may be deemed to have a beneficial ownership interest due to his
ownership interest in CPH. Mr. Makarechian and Mr. Dowers as a group could
be deemed beneficial owners of 12,000,000 shares of stock in the
Corporation.
(3) Includes 2,053,200 shares of Common Stock held by CPH, in which Mr. Dowers
may be deemed to have a beneficial ownership interest due to his ownership
interest in CPH. Mr. Dowers and Mr. Makarechian as a group could be deemed
beneficial owners of 12,000,000 shares of stock in the Corporation.
(4) Mr. Nix is the former sole stockholder of Durable Homes, Inc. Mr. Nix has a
consulting agreement with the Company pursuant to which he receives $18,167
per month through August 1994.
7
<PAGE> 10
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Company's Board of
Directors establishes the Company's general compensation policies, compensation
plans and specific compensation levels for the Company's Chief Executive Officer
and other executive officers. In light of the continuance of the Company's
restructuring during the past fiscal year, the Committee continued the policy
established in the preceding year by the Company's Board of Directors of setting
executive officer compensation at levels lower than what the officers might have
earned at homebuilders operating in or around the same geographic region as the
Company but high enough to retain their services. In implementing this policy,
the Committee did not set executive officer compensation by reference to any
predetermined compensation benchmark of other homebuilders. Rather, the
Committee balanced the needs of maintaining compensation at levels low enough to
facilitate the Company's restructuring with retaining personnel possessing those
qualifications necessary to implement the Company's operating goals. As a
consequence thereof, compensation of the Chief Executive and Chief Operating
Officers was set at a level equal to the compensation earned by each during the
immediately preceding fiscal year while the compensation for all other executive
officers was increased approximately five percent to offset cost of living
increases.
The Committee may, at some future date, consider implementing a plan
relating executive officer compensation to the Company's performance. These
plans may provide for equity compensation to the Company's officers. The
Committee has yet to implement any such plans, although the executive officers,
other than the Chief Executive and Chief Operating Officers, were granted a one
time fully discretionary holiday cash bonus in December of 1993. Thus,
compensation of the executive officers, including the Chief Executive Officer,
was not related to the performance of the Company during the past year and was
provided to the officers entirely in cash.
KARLHEINZ M. KAISER
ALLAN L. ACREE
8
<PAGE> 11
PERFORMANCE GRAPH
The following graph shows a five year comparison of cumulative total
returns for J.M. Peters Company, Inc., American Stock Exchange Market Value
Index and Dow Jones Home Construction Industry Group.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<TABLE>
<CAPTION>
INDUSTRY
MEASUREMENT PERIOD PETERS INDEX BROAD MARKET
(FISCAL YEAR COVERED) (J.M.) CO. (DOW JONES) (AMEX)
<S> <C> <C> <C>
1989 100 100 100
1990 94.52 104.78 112.29
1991 20.55 107.64 114.35
1992 36.99 179.00 128.45
1993 34.25 191.45 122.50
1994 41.10 224.09 142.70
</TABLE>
- - - ---------------
(1) The above graph compares the performance of J.M. Peters Company, Inc., with
that of the American Stock Exchange Market Value Index and the Dow Jones
Home Construction Industry Group.
(2) The comparison of total return on investment (change in year end stock price
plus reinvested dividends) for each of the periods assumes that $100 was
invested on February 28, 1989 in each of J.M. Peters Company, Inc., the
American Stock Exchange Market Value Index and the Dow Jones Home
Construction Industry Group.
9
<PAGE> 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH
OFFICERS, DIRECTORS AND AFFILIATES
During fiscal year 1994, the Company reimbursed Capital Pacific Homes, Inc.
("CPH") for expenses aggregating $150,000 in connection with the Durable Homes,
Inc. acquisition ("Durable Acquisition").
The Company has fully repaid the principal amount of its indebtedness to
CPH. Interest of approximately $67,000 was paid on this loan during the fiscal
year ended February 28, 1994.
During fiscal year 1993, the Company acquired an unimproved lot in Pomona,
California from CPH. The acquisition cost of the lot was $1,550,000 and a note
was carried back by CPH in the amount of $1,050,000. The note was subsequently
assigned by CPH to Mr. Makarechian, Chairman of the Board of the Company. All
principal and accrued interest were paid by the Company in full at February 28,
1993. Interest of $21,000 was paid on the note during the fiscal year ended
February 28, 1993. During fiscal year 1994, the lot was sold for $1,710,000 in
cash.
Mr. Petersen purchased a home from the Company in fiscal year 1994 for
$425,000 (the market price at that time).
A key employee of the Company purchased a home from the Company for
$368,000 in fiscal year 1993. The Company carried back a note in the amount of
$36,800 secured by a second deed of trust. The note, which the Company believes
was on market terms, is due and payable in November 1997.
Dean Cederquist, son of the CFO and Treasurer of Durable Homes, Inc.
("Durable"), is a limited partner of Portraits Venture, L.P. Mr. Cederquist's
acquisition of a limited partnership interest was negotiated on an arms'-length
basis.
Prior to the Durable Acquisition, Durable contracted for advertising
services with an advertising agency in which the sole shareholder of Durable had
a minority interest. Advertising costs incurred for services rendered by the
advertising agency for the years ended December 31, 1991, 1992 and 1993 were
$235,000, $477,000 and $427,000, respectively.
During 1993, prior to the Durable Acquisition, Durable distributed non-cash
assets, aggregating $788,000, to Roger Nix, its sole shareholder. The non-cash
assets distributed included advances and investments unrelated to the
residential home building business, certain related party notes receivable and
automobile equipment. The distribution was reflected as a reduction of
shareholder's equity.
The Company's policy is that all transactions between the Company and its
officers, directors and principal stockholder, and their respective affiliates,
must be on terms no less favorable to the Company than terms with unaffiliated
parties for similar transactions. All such transactions that are not in the
ordinary course of the Company's business must be approved by a majority of
independent directors who do not have a financial interest in the transaction.
INDEPENDENT AUDITORS
Arthur Andersen & Company served as the Company's independent auditors for
the fiscal year ended February 28, 1994, and it is anticipated that Arthur
Andersen & Company will be approved to serve as such for the current fiscal
year.
Representatives of Arthur Andersen & Company will be present at the Meeting
to respond to appropriate questions and will have the opportunity to make a
statement if they desire to do so.
AMENDMENT TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
(PROXY ITEM NO. 2)
The Board of Directors has adopted a resolution setting forth a proposed
amendment (the "Amendment") of the Certificate of Incorporation of the Company,
declaring its advisability and directing that it be considered at the Meeting.
The Amendment would increase the number of authorized shares of common
10
<PAGE> 13
voting stock of $.10 par value of the Company (the "Common Stock") from
15,000,000 shares of Common Stock to 30,000,000 shares of Common Stock. Holders
of Common Stock are not, and if the Amendment is adopted will not, be entitled
to any preemptive or other subscription rights. If the Amendment is approved by
the Company's stockholders, the Company will file with the Delaware Secretary of
State a Certificate of Amendment in the form attached hereto as Exhibit A. When
properly executed and returned, the enclosed proxy will be voted to approve or
disapprove the Amendment or to abstain from voting with respect to the
Amendment, as specified on the proxy.
Of the 15,000,000 shares of Common Stock presently authorized, 14,995,000
are issued and outstanding. On May 13, 1994, in connection with the issuance of
approximately $100,000,000 of senior notes of the Company, the Company entered
into a Warrant Agreement (the "Warrant Agreement") with United States Trust
Company of New York, as Warrant Agent (the "Warrant Agent"), and issued certain
warrants (the "Warrants") to acquire Common Stock of the Company. The aggregate
number of shares of Common Stock issuable upon exercise of the Warrants is equal
to approximately 5% of the outstanding shares of Common Stock, on a fully
diluted basis. The Company does not presently have a sufficient number of
authorized and unissued shares of Common Stock to issue upon exercise of the
Warrants. Consequently, the exercise of the Warrants is subject, among other
things, to the Amendment becoming effective. If the Amendment is not effective
on or before November 14, 1995, it will constitute a breach of the Warrant
Agreement.
Capital Pacific Homes, Inc. ("CPH"), which owns more than 80% of the issued
and outstanding shares of Common Stock of the Company, has issued an irrevocable
proxy to the Warrant Agent to vote all such shares in favor of the Amendment.
The Warrant Agent's vote of such proxy will result in a majority stockholder
vote in favor of the Amendment.
If the Amendment is approved and filed with the Delaware Secretary of State
and an additional listing application is approved by the American Stock Exchange
with respect to shares issuable upon exercise of the Warrants, the Company will
issue Common Stock upon exercise of the Warrants and payment of the exercise
price in accordance with the terms thereof. No further authorization for such
issuance by a vote of stockholders will be required prior to such issuance. The
issuance of Common Stock upon exercise of the Warrants will dilute the ownership
interest of existing stockholders of the Company.
The Amendment will increase the number of authorized shares of Common Stock
by an amount substantially more than is necessary to enable the Company to issue
Common Stock upon the exercise in full of the Warrants. The Amendment will allow
the Company to engage in transactions and establish compensation arrangements in
which the Board of Directors may authorize the issuance of additional shares of
Common Stock without any further vote of stockholders, unless such a vote is
otherwise required. An example of a previous transaction involving the issuance
of additional Common Stock is the Company's acquisition of Durable Homes, Inc.,
which was completed October 15, 1993. Any such issuance will further dilute the
ownership interest of existing stockholders of the Company, without regard for
any consideration which may be received by the Company in connection with such
issuance. The Board of Directors has not to date authorized any future issuance
of Common Stock other than in connection with the Warrants upon the Amendment
becoming effective.
To be adopted, the Amendment must be approved by an affirmative vote of a
majority of the outstanding shares of Common Stock present in person or
represented by proxy and entitled to vote on the matter. Shares with respect to
which the holders have abstained from voting on the matter will be counted for
purposes of determining the number of shares entitled to vote on the Amendment.
"Broker non-votes" will not be counted in determining the number of shares
entitled to vote on the proposal. UNLESS MARKED TO DISAPPROVE OR ABSTAIN FROM
VOTING WITH RESPECT TO THE AMENDMENT, PROXIES RECEIVED WILL BE VOTED TO APPROVE
THE AMENDMENT.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE TO
APPROVE THE AMENDMENT.
11
<PAGE> 14
MISCELLANEOUS
STOCKHOLDER PROPOSALS
Any stockholder who wishes to present a proposal for action at the next
annual meeting of stockholders of the Company, and who wishes to have such
proposal included in the proxy statement and form of proxy prepared by the
management of the Company for that meeting, must notify the Company in writing
not later than February 27, 1995. The notice should be directed to J.M. Peters
Company, Inc., 3501 Jamboree Road, Suite 200, Newport Beach, California 92658,
Attention: President.
SOLICITATION OF PROXIES
Proxies may be solicited on behalf of the Company by its officers and
employees, who will receive no additional compensation for such services,
through the mail, in person, and by telephone and by other telecommunication
methods. The cost of such solicitation will be borne by the Company. Brokers,
custodians, and other fiduciaries will be required to forward the Company's
proxy solicitation materials to the beneficial owners of Common Stock held in
their names, and the Company will reimburse such fiduciaries for the out-
of-pocket expenses incurred by them in connection with such activities.
The Company files an annual report on Form 10-K with the Securities and
Exchange Commission. A copy of the annual report for the fiscal year ended
February 28, 1994 (except for exhibits thereto) may be obtained, free of charge,
upon written request by any stockholder delivered to J.M. Peters Company, Inc.,
3501 Jamboree Road, Suite 200, Newport Beach, California 92658, Attention: Greg
R. Petersen, Vice President and Chief Financial Officer. Copies of all exhibits
to the annual report on Form 10-K are available upon a similar request, subject
to payment of a $.15 per page charge to reimburse the Company for its expenses
in supplying any exhibit.
THE COMPANY'S MANAGEMENT HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN, AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
The Board of Directors knows of no matters other than the election of
directors and the Amendment to be brought before the Meeting. However, if any
other matter should be presented for consideration, it is the intention of the
persons named as proxies in the enclosed form of Proxy to vote the Proxy in
accordance with their judgment.
By Order of the Board of Directors
[Sig]
GREG R. PETERSEN
Secretary
Dated: June 20, 1994
12
<PAGE> 15
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
J.M. PETERS COMPANY, INC.
(A DELAWARE CORPORATION)
THE UNDERSIGNED, Hadi Makarechian, and Gregory R. Petersen, do hereby
certify that:
1. They are the Chairman of the Board/Chief Executive Officer and
Secretary, respectively, of J.M. Peters Company, Inc., a Delaware
corporation (the "Corporation");
2. Article 4th of the Corporation's Restated Certificate of
Incorporation is hereby amended in its entirety to read as follows:
"The aggregate number of shares which the corporation shall have
authority to issue is Thirty Million (30,000,000), all of which shall be
shares of common voting stock of $.10 par value (the "Common Stock"). A
holder of record of one or more shares of the Common Stock shall have
one (1) vote on any matter submitted to a stockholder vote for each
share of the Common Stock held. Holders of the Common Stock are entitled
to the entire voting power, all dividends declared, and all assets of
the corporation upon liquidation. Holders of the Common Stock shall not
be entitled to any preemptive or other subscription rights."
3. This Certificate of Amendment of Certificate of Incorporation was
duly adopted by the board of directors of the Corporation and approved by
the holders of a majority of the outstanding shares of stock of each class
entitled to vote thereon in accordance with the requirements of Section 242
of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned have signed this certificate this
day of , 1994, and hereby affirm and acknowledge under penalty of
perjury that the filing of this Certificate of Amendment of Certificate of
Incorporation is the act and deed of the Corporation.
------------------------------------
Hadi Makarechian
Chairman of the Board and
Chief Executive Officer
ATTEST:
- - - -------------------------------------
Gregory R. Petersen
Secretary
<PAGE> 16
J.M. PETERS COMPANY, INC.
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON JULY 12, 1994.
The undersigned hereby appoints Kent G. Snyder and Greg R. Petersen, or
either of them with individual power of substitution, proxies to vote all shares
of Common Stock of J.M. Peters Company, Inc. which the undersigned may be
entitled to vote at the Annual Meeting of Stockholders to be held on July 12,
1994, and at all adjournments thereof, as follows:
1. ELECTION OF DIRECTORS
Hadi Makarechian, Dale Dowers, James M. Peters, Jr., Allan L. Acree,
Karlheinz M. Kaiser
<TABLE>
<S> <C>
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY for all
(except as marked to the contrary below). nominees listed above.
</TABLE>
(Instructions: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
IF NO PREFERENCE IS INDICATED, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES.
2. Amendment of the Company's Certificate of Incorporation to increase the
number of authorized shares of Common Stock of the Company from 15,000,000
to 30,000,000.
/ / APPROVE the Amendment.
/ / DISAPPROVE the Amendment.
/ / ABSTAIN from voting with respect to the Amendment.
IF NO PREFERENCE IS INDICATED, THIS PROXY WILL BE VOTED
"TO APPROVE" THE AMENDMENT
(over)
3. In accordance with their best judgment upon such other matters as may
properly come before the Meeting.
----------------------------------
Signature of Stockholder
----------------------------------
Signature of Stockholder
IMPORTANT: Please sign this Proxy
exactly as your name or names appear
hereon. If shares are held by more
than one owner, each must sign.
Executors, administrators, trustees,
guardians, and others signing in a
representative capacity should give
their full titles.
DATED: , 1994
-------------------------
BE SURE TO DATE THIS PROXY
