<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)
ANTHONY M. LAUGHLIN
(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:
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
/X/ 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:
$125
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
Preliminary Proxy Statement
- --------------------------------------------------------------------------------
(3) Filing party:
Registrant
- --------------------------------------------------------------------------------
(4) Date filed:
June 16, 1995
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
J.M. PETERS COMPANY, INC.
4100 MACARTHUR BOULEVARD
SUITE 200
NEWPORT BEACH, CALIFORNIA 92660
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 26, 1995
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 26, 1995, 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 approve the 1995 Stock Incentive Plan and the issuance of
1,500,000 shares of Common Stock authorized under the Plan.
3. To approve an amendment to the Company's Articles of Incorporation
to change the name of the Company.
4. 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 12, 1995, 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
/s/ Anthony M. Laughlin
----------------------------------
ANTHONY M. LAUGHLIN
Secretary
June 29, 1995
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.
4100 MACARTHUR BOULEVARD
SUITE 200
NEWPORT BEACH, CALIFORNIA 92660
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 26, 1995
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
26, 1995, and at any adjournment thereof, for the purposes set forth herein. All
properly completed proxies will be voted in the manner specified therein, 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 (Approval
of 1995 Stock Incentive Plan) is specified, Proxies will be voted to approve the
Plan and if no choice as to Proxy Item No. 3 (Approval of Name Change) is
specified, Proxies will be voted to approve the Name Change. 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 12, 1995, 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 29, 1995. Copies of the Company's 1995 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 47 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 was the
founder and chairman of Capital Pacific Homes Inc., a real
estate development firm located in Newport Beach,
California, until it was merged into the Company last
year. 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 39 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.
Karlheinz M. Kaiser 36 1993 Mr. Kaiser is a principal with Christinger Partner AG, a
printing company in Switzerland. From August of 1992
through December 1994 Mr. Kaiser was 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 52 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.
William A. Funk 54 1994 Mr. Funk is a principal and the Vice President and Manager
of The Austin Company, an international design and
construction firm based in Cleveland, Ohio. Except for the
period described below, Mr. Funk has served in various
positions with The Austin Company for over 25 years. From
May 1984 to June 1985, Mr. Funk was a Vice President and
Manager of the Carlson Group, a design and construction
firm in Boston, Massachusetts.
</TABLE>
2
<PAGE> 5
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 four meetings during
the fiscal year ended February 28, 1995.
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 William A. Funk and Karlheinz M. Kaiser. Messrs. Funk 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 held one meeting during the fiscal
year ended February 28, 1995.
The Board of Directors has a standing Compensation Committee whose current
members are William A. Funk and Karlheinz M. Kaiser. Messrs. Funk 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 two
meetings for the fiscal year ended February 28, 1995.
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>
Anthony M. Laughlin 35 From 1994 until he assumed his current position in
Vice President, Chief Financial June 1995, Mr. Laughlin served as an accountant
Officer and Secretary and headed the Company's internal audit
function. From 1991 until joining the Company in
1994 Mr. Laughlin was a principal in Anthony M.
Laughlin, C.P.A., an accounting/consulting
company.
Robert J. Trapp 51 From 1980 until he assumed his current position in
Vice President -- Division 1994, Mr. Trapp was responsible for all of the
Manager South Orange County Company's activities relating to governmental
regulations, civil engineering, offsite
construction, utility coordination, California
Department of Real Estate processing and
homeowners' associations.
Robin V. Koenemann 37 From 1992 until he assumed his current position in
Vice President -- Division 1994, Mr. Koenemann served as Vice President of
Manager Los Angeles/San Fernando Construction. From December, 1988 until joining
the Company in October, 1992, 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 56 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. In
April, 1995 Mr. Cummings returned to California
as Vice President.
Scott N. Coler 35 Mr. Coler served as Vice President since joining
Vice President -- Division the Company in August, 1992. He assumed his
Manager North Orange current position in 1994. From May, 1991 to
County/Riverside 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 41 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. In 1994 Mr.
Foster added the management of the Company's
mortgage brokerage operation to his
responsibilities.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME AND
POSITION INFORMATION ABOUT
WITH COMPANY AGE EXECUTIVE OFFICERS
- ----------------------------------- --- --------------------------------------------------
<S> <C> <C>
Tim Hamilton 40 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.
Terry Hanna 39 Mr. Hanna joined the Company in July 1994 as the
Vice President President of J.M. Peters' newly formed Los
Angeles Division. Prior to joining the Company,
Mr. Hanna was the managing director of
development and operations for Kaufman and Broad
Home Corp., in which capacity he served as the
liaison between the Company's division
presidents and its Chief Executive Officer.
Prior to that, Mr. Hanna was the President of
The Flatiron Company, a builder of custom homes
in Los Angeles County.
Donald J. Sajor 36 Mr. Sajor joined the Company as General Counsel in
General Counsel June 1994. Mr. Sajor served as Corporate Counsel
with Catellus Development Corporation from March
1993 to June 1994. From April 1987 to March
1993, Mr. Sajor specialized in transactional
real estate and environmental law as an
associate with Pettis, Tester, Kruse & Krinsky.
Mr. Sajor was an associate with Gibson, Dunn &
Crutcher from September 1984 to April 1987.
James H. Cederquist 64 In June 1995 Mr. Cederquist assumed the position
Treasurer of Treasurer for the Company. Mr. Cederquist
will also continue to serve as Treasurer, Chief
Financial Officer and Director of Durable Homes,
positions he has held since January 1989. Prior
to joining Durable Homes, Mr. Cederquist had
over 20 years of experience holding positions as
President, Chief Financial Officer and Chief
Operating Officer at various times with four
industrial companies. Mr. Cederquist is a
Certified Public Accountant.
Gregory R. Petersen 40 From 1990 until leaving the Company in June 1995,
Former Vice President Mr. Petersen served as the Company's Vice
Chief Financial Officer, President, Secretary, Treasurer and Chief
Treasurer and Secretary Financial Officer.
</TABLE>
All executive officers serve at the pleasure of the Board of Directors.
5
<PAGE> 8
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, 1995, 1994 and 1993 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 1995 225,000 (e) --
and Chief Executive Officer 1994 225,000 -- --
1993 117,692(c) -- --
Dale Dowers -- President and 1995 225,000 (e) --
Chief Operating Officer 1994 225,000 -- --
1993 117,692(c) -- --
Craig Foster -- Vice President 1995 92,083 51,676 --
1994 90,000 19,710 --
1993 90,000 -- --
Robert J. Trapp -- Vice President -- 1995 121,625 16,000 --
Division Manager 1994 118,078 12,000 --
South Orange County 1993 112,456 -- 3,000
Tim Hamilton -- Vice President -- 1995 125,590 1,000 --
Sales and Marketing 1994 -- -- --
1993 -- -- --
</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.
(e) Each of Messrs. Makarechian and Dowers can contingently earn bonuses
calculated on the net pre-tax income of the Company in FY 1995 totalling
$220,120 each, vesting in equal parts on a quarterly basis over the course
of FY 1996 in the event that quarterly FY 1996 net pre-tax income exceeds
$165,090 (150% of the total bonus amount contingently payable), with
unearned portions of such bonuses carried forward and contingently paid in
subsequent quarters. In the event any portion of such bonus is not payable
as of the determination of the FY 1996 year-end results, it shall be
considered not earned and shall expire. The maximum bonus payable in
respect of FY 1995 is $220,120 for each of Messrs. Makarechian and Dowers,
and the minimum bonus payable is zero.
STOCK OPTIONS
In April 1987, the Company adopted its 1987 Stock Option Plan (the "1987
Plan"), covering options to purchase a maximum of 1,350,000 shares of its common
stock. On October 5, 1993, the 1987 Plan was amended to provide that the maximum
number of shares that may be issued under the 1987 Plan be reduced to 5,000
shares. The Company did not make any awards under the 1987 Plan during fiscal
year 1995. All options previously granted under the 1987 Plan have either been
exercised or have expired. Effective February 28, 1995, the Board of the
Company, subject to the approval of the stockholders of the Company, approved
the 1995 Stock Incentive Plan (the "1995 Plan"), which supersedes the 1987 Plan
in its entirety. The 1995 Plan permits a committee designated by the Board of
the Company to make awards to present and former key employees and directors of
the Company and its subsidiaries. Subject to various restrictions, awards could
be in the form of stock options, restricted or unrestricted stock, stock
appreciation rights or a combination of the above. The maximum number of shares
or share equivalents that may be awarded under
6
<PAGE> 9
the 1995 Plan is 1,500,000. No awards have been made under the 1995 Plan. For
further information regarding the 1995 Plan, see Item 2 below, Approval of Stock
Incentive Plan.
EMPLOYMENT AGREEMENTS
None of the executive officers are currently working with a contract.
BOARD OF DIRECTORS DETERMINATION ON EXECUTIVE COMPENSATION
The Board of Directors of the Company (the "Board") received the following
report of the Compensation Committee of the Board and approved it subject to the
modifications set forth below:
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 Chief Operating Officer and reviews the design,
administration and effectiveness of compensation programs for other key
executives. The general policy and philosophy of the Compensation Committee
is to provide total compensation opportunities that are competitive with
the opportunities offered to executives in similar positions at competing
companies and that compensation with a strong link to the financial
performance of the Company enables the Company to attract and retain the
key personnel necessary to fuel continued growth and profitability.
The Committee undertook to examine the compensation of the executives
of comparatively placed homebuilders to determine whether or not the
compensation of the Company's Chief Executive and Chief Operating officer
is within the range of their peers. In undertaking such examination, the
Committee sought publicly available information regarding homebuilders (the
"Survey Companies") which, like the Company, had recently issued high-yield
debt. It is the judgment of the Committee that such homebuilders are at a
similar stage in their growth and development to that of the Company and
therefore compete for the same executive personnel.
In the recent past, the Company has provided compensation for its CEO
and COO which is significantly below the compensation earned by persons in
similar positions at the Survey Companies. Despite the Company's recent
return to profitability, no material bonuses have been paid.
In light of the Committee's general policy and philosophy as stated
above, and the recent financial performance of the Company, the
Compensation Committee has decided in its meetings held in January and
early March, 1995 to institute an annual cash bonus for the CEO and COO.
The cash bonus shall be a percentage of the annual pre-tax income of the
Company. For FY 1995, the percentage in the case of Mr. Makarechian is four
percent (4%), and in the case of Mr. Dowers is four percent (4%). These
figures will result in cash bonuses in the range of that provided by the
Survey Companies.
The base salary of the CEO and COO has not changed since present
management purchased control of the Company in August, 1992. During this
period, the Company has returned to profitability for the first time since
1990. The Committee has determined not to increase the annual base salary
of the CEO and COO for Fiscal Year 1995 in light of the institution of the
annual cash bonus, but has determined to increase base salary by ten
percent (10%) to $250,000 for Fiscal Year 1996, primarily to take into
account past inflation. The four percent (4%) bonus on pre-tax income shall
remain in place for 1996. The Committee will continue to review base salary
and annual cash bonus levels for the CEO and COO.
The Committee has worked with the CEO and COO of the Company in
developing a long-term Stock Option Plan to be implemented by the CEO and
COO to award stock options, stock appreciation rights, restricted stock
grants or other performance-related compensation to other key employees of
the Company. The Committee believes that the implementation of this Plan
will assist the Company in retaining key personnel and providing proper
incentives to achieve the Company's performance goals.
In August, 1995 Mr. Acree's term on the Committee expired and Mr. Funk
was appointed.
7
<PAGE> 10
The Board of Directors believes that long-term earnings growth is the key
goal of the Company and that therefore FY 1995 bonuses should be contingent upon
the earnings performance of the Company in FY 1996. Therefore the Board modified
the Compensation Committee Report as follows:
1. That payment to the CEO and COO of the FY 1995 bonuses described in
the Compensation Committee Report be considered not yet earned and shall be
contingently payable in equal portions after the determination of the
financial results of the Company for each fiscal quarter in FY 1996;
2. That in the event the Company's accountants determine that the net
pre-tax income of the Company in any quarter does not exceed 150% of the
portion of the bonus otherwise payable (calculated without regard to the
payment of such bonus amounts), payment and earning of such portion shall
be considered in the next succeeding quarter, and, if necessary, in any
further quarters in FY 1996 and be payable with the portion payable after
the end of such succeeding quarter(s);
3. That in the event any portion of the bonus is carried forward and
the net pre-tax income of the next succeeding quarter is sufficient to
allow the earning and payment of the carried-forward portion but not the
portion otherwise then payable, then only the carried-forward portion shall
be paid and the next portion shall be carried forward;
4. That no quarterly portion of the bonus shall be earned and payable
in part;
5. That any portion not payable under the terms hereof after the FY
1996 year-end results have been determined shall be considered not earned
and shall expire and be of no further force or effect;
6. That the application of the foregoing principles will be monitored
by the Compensation Committee which will make its recommendation to the
Board with respect to their application to the bonuses payable in respect
of FY 1996.
The Board of Directors
Hadi Makarechian
Dale Dowers
William A. Funk
Karlheinz M. Kaiser
(Allan L. Acree: absent)
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 IN-
MEASUREMENT PERIOD PETERS (J.M.) DEX (DOW BROAD MARKET
(FISCAL YEAR COVERED) CO. JONES) (AMEX)
<S> <C> <C> <C>
1990 $100.00 $100.00 $100.00
1991 21.74 107.48 101.83
1992 39.13 180.13 114.38
1993 36.23 195.33 109.09
1994 43.48 228.79 127.08
1995 30.43 178.22 116.57
</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, 1990 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
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of June 12, 1995, 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, by each of the officers that are among the five most highly compensated
officers of the Company, 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>
CPH2, L.L.C. ...................................... 4,638,657 30.9%
4100 MacArthur Boulevard, Suite 200,
Newport Beach, CA 92660
Hadi Makarechian................................... 9,315,968(2) 62.1%
4100 MacArthur Boulevard, Suite 200,
Newport Beach, California 92660
Dale Dowers........................................ 1,922,723(3) 12.8%
4100 MacArthur Boulevard, Suite 200,
Newport Beach, California 92660
Roger Nix(4)....................................... 1,015,000 6.8%
4100 MacArthur Boulevard, Suite 200,
Newport Beach, CA 92660
Robert J. Trapp.................................... 10,000 0.1%
4100 MacArthur Boulevard, Suite 200,
Newport Beach, California 92660
David Inman(5)..................................... 761,309 5.1%
6655 West Sahara, Suite E-10
Las Vegas, Nevada 89102
All Directors and Officers of the Corporation
as a Group (13 persons).......................... 11,248,791 75.0%
</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 2,715,934 shares of Common Stock held by CPH2, L.L.C., in which Mr.
Makarechian may be deemed to have a beneficial ownership interest due to his
ownership interest in CPH2, L.L.C. Mr. Makarechian and Mr. Dowers as a group
could be deemed beneficial owners of 11,238,691 shares of stock in the
Corporation.
(3) Includes 1,922,723 shares of Common Stock held by CPH2, L.L.C., in which Mr.
Dowers may be deemed to have a beneficial ownership interest due to his
ownership interest in CPH2, L.L.C. Mr. Dowers and Mr. Makarechian as a group
could be deemed beneficial owners of 11,238,691 shares of stock in the
Corporation.
(4) Mr. Nix is the former sole stockholder of Durable Homes, Inc.
(5) Mr. Inman is a former Director of the Corporation.
10
<PAGE> 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH
OFFICERS, DIRECTORS AND AFFILIATES
During fiscal year 1995, the Company reimbursed CHH II, Inc., a corporation
controlled by the chairman of the board of the Company, for $43,000 in expenses
incurred in connection with the acquisition by the Company of an aircraft.
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 LLP served as the Company's independent auditors for the
fiscal year ended February 28, 1995, and it is anticipated that Arthur Andersen
LLP will be approved to serve as such for the current fiscal year.
Representatives of Arthur Andersen LLP 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.
PROPOSAL TO ADOPT AND APPROVE STOCK INCENTIVE PLAN
(PROXY ITEM NO. 2)
In April 1987 the Company adopted a Stock Option Plan (the "1987 Plan")
enabling the Company to grant options to purchase up to 1,350,000 shares of its
common stock. On October 5, 1993, the 1987 Plan was amended to reduce the
maximum number of options grantable under the 1987 Plan to 5,000. The Board of
Directors believes that the Company should have the additional flexibility in
providing for stock-based employee compensation and has therefore approved a new
Stock Incentive Plan (the "1995 Plan") relating to up to 1,500,000 shares of
Common Stock of the Company ("Shares"). The 1995 Plan permits the granting of
employee stock options to key employees (including officers) and to directors,
and includes additional features (such as restricted and unrestricted shares and
stock appreciation rights), described in more detail below, that enhance the
flexibility of the Company in hiring, retaining and motivating key employees and
directors.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS ADOPT
AND APPROVE THE 1995 PLAN. THE 1995 PLAN IS DESCRIBED BELOW, BUT REFERENCE
SHOULD BE MADE TO THE TEXT OF THE 1995 PLAN WHICH IS SET FORTH IN APPENDIX A,
FOR COMPLETE INFORMATION.
DESCRIPTION OF THE 1995 PLAN
Pursuant to the 1995 Plan, the Company may from time to time through
February 28, 2005 grant to key employees of the Company and its affiliates
(including officers, whether or not directors) and to directors, Shares, options
to purchase Shares, and stock appreciation rights.
SHARES
Shares under the 1995 Plan may be unrestricted shares or may be restricted
shares which are subject to cancellation upon such terms and conditions as may
be determined by the Company.
OPTIONS
Options under the 1995 Plan may be either incentive stock options which
receive special tax treatment (see "Federal Income Tax Consequences" below) or
non-qualified options which do not receive such special tax treatment. Incentive
stock options will expire not more than ten years from the date of grant.
Although the
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1995 Plan does not limit the maximum term of non-qualified options, it is
expected that non-qualified options will generally expire not more than ten
years from the date of grant.
The purchase price per Share to be specified in each Option granted under
the 1995 Plan may not be less than the fair market value of a share of Common
Stock of the Company on the date the option is granted. The 1995 Plan permits
the adjustment of outstanding Options to accommodate for dilutions, mergers,
acquisitions and other events, and to specify a lower purchase price, through
amendment of outstanding options or through cancellation of outstanding options
and the grant of replacement options.
The 1995 Plan permits the Company to provide that payment of the purchase
price upon exercise of options may be made in cash, shares owned by the
optionee, any other lawful form of consideration or a combination thereof, in
each case acceptable to the Committee (defined under "Administration" below).
Any shares received by the Company in payment of the purchase price will be
valued at their fair market value on the date of exercise.
Stock appreciation rights may be granted in tandem with options, or
restricted or unrestricted Shares, or may be free-standing. The terms of stock
appreciation rights may be amended from time to time by the Committee. Payment
to participants upon the exercise of stock appreciation rights will generally be
made in cash or in shares (such shares to be valued at their fair market value
on the date of exercise of the stock appreciation rights). Tandem stock
appreciation rights may be granted at the time a grant is made under the 1995
Plan or added to outstanding grants, provided that in the case of stock
appreciation rights granted in tandem with incentive stock options, such grant
may only be made at the time of the grant of the incentive stock option.
TAX WITHHOLDING
Under present law, tax withholding is required with respect to the amount
of compensation realized for federal income tax purposes by participants with
respect to grants under the 1995 Plan. Under the 1995 Plan, the Company may
permit the participant to elect to have the Company withhold all or a portion of
the unrestricted Shares which the participant holds or which the participant may
acquire pursuant to grants under the 1995 Plan, or to deliver to the Company
other shares, to satisfy actual or estimated federal, state or local income tax
withholding obligations of the participant.
AGREEMENT WITH PARTICIPANTS
The terms of individual grants under the 1995 Plan will be set forth in
stock incentive agreements to be entered into with each participant at or before
each such grant.
Grants under the 1995 Plan may be cancelled under certain circumstances
although the participant has provided value such as by rendering services to the
Company or its affiliates, or the Company has received other benefits in
connection with such grants. Accordingly, the 1995 Plan permits the Company to
provide for payment to a participant whose grants under the 1995 Plan are
cancelled or terminated of such amount as the Company may determine to be fair
and equitable to the participant or in the interest of the Company. Such a
payment could be based upon the value and benefits received by the Company, the
value to the participant of the cancelled or terminated grants, or other
factors, may include an amount representing interest thereon, and may reflect
the nature or basis of the grant or the reason for its cancellation or
termination.
PARTICIPANTS' RIGHTS
Grants under the 1995 Plan (other than unrestricted Shares) will not be
transferable other than by will or the laws of descent and distribution.
Certificates for Shares will not be delivered to participants until all
applicable legal or regulatory requirements have been fully complied with, full
payment of any purchase or exercise price, and full vesting of any restricted
stock.
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VESTING
The time periods for vesting of restricted Shares and the exercise periods
applicable to options and stock appreciation rights shall be as specified in the
applicable stock incentive agreement.
NUMBER OF SHARES SUBJECT TO PLAN
The aggregate number of shares which may be acquired pursuant to the 1995
Plan may not exceed 1,500,000 determined in accordance with the 1995 Plan.
Restricted Shares are considered to be "acquired" under the 1995 Plan when they
vest. The Company may determine to limit the number of Shares that may be
acquired pursuant to the 1995 Plan to less than the 1,500,000 unrestricted
Shares authorized under the 1995 Plan.
ADMINISTRATION
The 1995 Plan provides that it shall be administered by a committee of
disinterested directors (the "Committee") or senior officers of the Company. The
Executive Committee of the Board of Directors, consisting at the present time of
the Chairman of the Board and President, have been delegated authority with
respect to option and restricted stock grants under the 1995 Plan to employees
other than directors and certain senior officers (including the members of the
Executive Committee).
Pursuant to the 1995 Plan, each member of the Committee, the Chairman of
the Board and President of the Company, and, to the extent provided by the Board
of Directors or the Committee, any other person to whom duties or powers shall
be delegated in connection with the 1995 Plan, shall incur no liability with
respect to any action taken or omitted to be taken in connection with the 1995
Plan and shall be fully protected in relying in good faith upon the advice of
counsel, to the fullest extent permitted under applicable law.
The Board of Directors may amend the 1995 Plan without shareholder
approval, except as specified in the 1995 Plan.
Grants under the 1995 Plan may be subject to such terms and conditions not
inconsistent with the 1995 Plan as the Company may specify in making or amending
grants, and such terms and conditions may differ from the terms and conditions
described herein.
The Company has not made any grants or determined the nature, amount or
recipients of any grants under the 1995 Plan.
FEDERAL INCOME TAX CONSEQUENCES
Consequences to Participants
Restricted and Unrestricted Shares. Except as described below, for federal
income tax purposes, (i) a participant generally does not incur any tax
liability upon receipt of restricted Shares, (ii) any dividends received on the
restricted Shares will be taxable as compensation and (iii) a participant
generally will realize compensation upon receipt of unrestricted Shares in an
amount equal to the fair market value of such unrestricted Shares at the time of
receipt. However, the participant may, for federal income tax purposes, elect to
realize compensation upon receipt of restricted Shares in an amount equal to the
then fair market value of an equal number of unrestricted Shares. If the
participant realizes compensation, for federal income tax purposes, upon receipt
of restricted Shares, dividends received on the restricted Shares would be taxed
as dividends and not as compensation, any future gain or loss on disposition of
the Shares would be capital gain or loss, and, in the event the restricted
Shares were cancelled, the participant would not be entitled to any loss on the
cancellation for federal income tax purposes.
Incentive stock options. Incentive stock options under the 1995 Plan are
intended to meet the requirements of Section 422 of the Internal Revenue Code.
No income results to the holder of an incentive stock option under the grant of
the option or issuance of shares. The amount realized on the sale or taxable
exchange of such shares in excess of the option price will be considered a
capital gain, except that, if a disposition occurs within one year after
exercise of the option or two years after the grant of the option, the
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<PAGE> 16
optionee will realize compensation, for federal income tax purposes, on the
amount by which the lesser of (i) the fair market value on the date of exercise
or (ii) the amount realized on the sale of the shares, exceeds the option price.
For the purpose of determining alternative minimum taxable income, an incentive
stock option is treated as a non-qualified option.
Non-qualified options. In connection with the exercise of a non-qualified
option, an optionee will generally realize compensation, for federal income tax
purposes, on the difference between the option price and the fair market value
of the Shares acquired.
Payment of option price in shares. If an option is exercised and payment is
made by means of previously held shares, or shares and cash, there is no gain or
loss recognized to the optionee on the previously held shares. In the case of a
non-qualified option, the optionee's basis and holding period of the previously
held shares will be carried over to an equivalent number of Shares received
under the option. Any additional Shares received under the option will have a
basis equal to the compensation realized by the optionee for federal income tax
purposes plus the amount of any additional cash paid.
Exercising a non-qualified option with Shares which were originally
acquired on the exercise of an incentive stock option will not constitute a
"disqualifying disposition" of such previously held shares. If, however, the new
Shares are not held for the balance of the required holding period, there will
be a disqualifying disposition for federal income tax purposes, resulting in
recognition of compensation to the optionee in an amount equal to the excess of
the fair market value over the option price at the time such incentive shares
were originally acquired (but not in excess of the optionee's gain). However,
exercising an incentive stock option with Shares acquired on the exercise of an
incentive stock option will constitute a disqualifying disposition of such
previously held Shares if the one- and two-year holding periods described above
have not been met before such exercise.
Stock Appreciation Rights and Other Cash Payments. Upon receiving payment
upon exercise of stock appreciation rights (including limited stock appreciation
rights, and whether in cash or unrestricted Shares), or upon receipt of cash
payments (pursuant to cancellation or termination of grants under the 1995 Plan,
or otherwise), the participant will generally realize compensation, for federal
income tax purposes, in the amount of such payment.
Tax withholding. Upon delivery to the Company of previously-held shares to
satisfy withholding or other tax obligations of a participant, the difference
between the fair market value of, and the participant's basis for, such Shares
would be a capital gain or loss to the participant for federal income tax
purposes.
CONSEQUENCES TO THE COMPANY AND ITS AFFILIATES
To the extent individual optionees qualify for capital gains tax treatment,
neither the Company nor its affiliates will generally be entitled to a deduction
for federal income tax purposes. In other cases, the Company or its affiliates
will generally receive a federal income tax deduction at the same time as and in
the same amount as the amount which is taxable to the employee as compensation,
except as provided below.
Under Section 162(m) of the Internal Revenue Code, in general, compensation
in excess of $1 million for any taxable year to a public company's chief
executive officer and the four other highest-paid executive officers named in
the summary compensation table in the company's proxy statement (the "Named
Officers") is not deductible by the company or its affiliates for federal income
tax purposes unless it is related to the performance of the company, is paid
pursuant to a plan approved by the shareholders of the company and meets certain
other requirements ("deductible compensation"). In general, it is anticipated
that rights under options and stock appreciation rights granted pursuant to the
1995 Plan will be deductible compensation, and, that, accordingly, the Company
or its subsidiaries will be entitled to a federal income tax deduction as
discussed above; however, the Company or its subsidiaries may not be entitled to
such a deduction with respect to rights under options or stock appreciation
rights granted, pursuant to a delegation of authority to senior officers of the
Company, to an employee who subsequently is promoted to a position as a Named
Officer.
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To be adopted, the 1995 Plan 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 1995 Plan.
"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 1995 PLAN.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE TO
APPROVE THE 1995 PLAN.
APPROVAL OF NAME CHANGE
(PROXY ITEM NO. 3)
The Company was organized in 1975 as a California corporation. For most of
its first 20 years of existence, its operations were largely confined to
Southern California. While California remains an important focus of the
Company's business, the Company now operates in four states under a variety of
names, mostly through subsidiaries. The Board of Directors believes that as the
Company moves toward a national identity and reputation, the name under which
the Company acts as a holding company should be more generic and should not be
tied to the Company's exclusively California origins. Approval of Proxy Item No.
3 will allow the Company to amend its Articles of Incorporation to change the
name of the Company to Capital Pacific Holdings, Inc. The Company currently
plans to do business as a holding company under the initials "CPH" and to
continue to do business as a homebuilder in California, and to some extent,
other locations, as J.M. Peters Company, Inc. The Company's present expectation
is that its subsidiaries, for instance Durable Homes, Inc. in Nevada and Clark
Wilson Homes, Inc. in Texas, will continue to do business under their respective
names.
If this item is approved, the name change will be effective August 1, 1995
and the Company will apply to change its trading symbol on the American Stock
Exchange to CPH. Shareholders with certificated shares may continue to hold
their existing certificates or receive new certificates reflecting the name
change upon tendering of old certificates to the Company's transfer agent.
To be adopted, the Name Change 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 Name
Change. "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 NAME CHANGE.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE TO
APPROVE THE NAME CHANGE.
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, 1996. The notice should be directed to J.M. Peters
Company, Inc., 4100 MacArthur Boulevard, Suite 200, Newport Beach, California
92660, 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
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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, 1995 (except for exhibits thereto) may be obtained, free of charge,
upon written request by any stockholder delivered to J.M. Peters Company, Inc.,
4100 MacArthur Boulevard, Suite 200, Newport Beach, California 92660, Attention:
Anthony M. Laughlin, 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, the Plan and the Name Change 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
/s/ Anthony M. Laughlin
----------------------------------
ANTHONY M. LAUGHLIN
Secretary
Dated: June 29, 1995
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APPENDIX A
THE 1995 J.M. PETERS COMPANY, INC. STOCK INCENTIVE PLAN
The purpose of the Plan is to advance the interests of J.M. Peters Company,
Inc. (the "Company") and its shareholders by affording officers and other key
employees, former officers and other key employees, and directors of the Company
and its Subsidiaries an opportunity to increase their proprietary interest in
the Company by the grant of Awards to such employees and directors under the
terms set forth herein. The Company seeks to motivate present employees and
directors as well as attract highly competent individuals whose judgment,
initiative, leadership and continued effort contribute to the success of the
Company and its Subsidiaries. The Company believes that this Plan can give an
incentive to such individuals to increase the Company's revenues and profits.
ARTICLE I
DEFINITIONS
1.01 Approval Date. Approval Date shall mean the date of approval of this
Plan by the Company's shareholders.
1.02 Award. Award shall mean an incentive award granted under the Plan,
whether in the form of Options, Stock Appreciation Rights, Restricted Stock or
any other form of consideration (which may provide for settlement in shares of
Stock, cash and/or a combination thereof) determined by the Committee to be
consistent with the purposes of the Plan, including but not limited to
restricted units, phantom stock, performance awards, performance units,
performance shares, stock appreciation shares, limited stock appreciation
rights, stock acquisition rights, valuation protection rights, reload options or
any other type of award or combination or derivative of various types of awards.
1.03 Board or Board of Directors. Board or Board of Directors shall mean
the Board of Directors of the Company.
1.04 Code. Code shall mean the Internal Revenue Code of 1986, as amended,
unless otherwise specifically provided herein.
1.05 Committee. Committee shall mean a Committee of the Board consisting
of members of the Board of Directors who are Disinterested Persons.
1.06 Company. Company shall mean J.M. Peters Company, Inc., a Delaware
corporation, and any successor thereof.
1.07 Disinterested Person. Disinterested Person shall have the meaning set
forth in Rule 16b-3(c)(2)(i) promulgated under the Exchange Act.
1.08 Exchange Act. Exchange Act shall mean the Securities Exchange Act of
1934, as amended.
1.09 Fair Market Value. Fair Market Value of the Stock shall mean the last
sale price at which Stock is traded on any given date or, if no Stock is traded
on such date, the most recent prior date on which Stock was traded, as reflected
in the American Stock Exchange Composite Transactions Index.
1.10 Incentive Stock Option. Incentive Stock Option shall have the meaning
given to it by Section 422 of the Code.
1.11 Non-qualified Stock Option. Non-qualified Stock Option shall mean any
Option granted by the Company pursuant to this Plan which is not an Incentive
Stock Option.
1.12 Option. Option shall mean an option granted by the Company to
purchase Stock pursuant to the provisions of this Plan and the Agreement
executed pursuant hereto.
1.13 1987 Plan. 1987 Plan shall mean the 1987 Stock Option Plan adopted
by the Company in April, 1987.
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1.14 Option Price. Option Price shall mean the price per share of Stock
purchasable under an Option. The Option Price shall be determined by the
Committee at the time of grant but, in the case of an Incentive Stock Option,
shall not be less than the Fair Market Value on the date of grant.
1.15 Participant. Participant shall mean an employee or director of the
Company or one of its Subsidiaries (including former employees and directors)
who has received an Award granted by the Committee hereunder.
1.16 Plan. Plan shall mean the 1995 J.M. Peters Company, Inc. Stock
Incentive Plan.
1.17 Restricted Stock Awards. A Restricted Stock Award shall mean a grant
made by the Committee entitling the Participant to acquire, at no cost or for a
purchase price determined by the Committee at the time of grant, shares of Stock
subject to such restrictions and conditions as the Committee may determine at
the time of grant ("Restricted Stock").
1.18 Securities Act. Securities Act shall mean the Securities Act of 1933,
as amended from time to time.
1.19 Stock. Stock shall mean common stock, par value $0.10 per share,
issued by the Company.
1.20 Stock Appreciation Right. A Stock Appreciation Right shall mean a
grant entitling the Participant to receive an amount in cash or shares of Stock
or a combination thereof having a value equal to (or if the Committee shall so
determine at the time of a grant, less than) the excess of the Fair Market Value
of a share of Stock on the date of exercise over the Fair Market Value of a
share of Stock on the date of grant (or over the Option Price, if the Stock
Appreciation Right was granted in tandem with an Option) multiplied by the
number of shares with respect to which the Stock Appreciation Right shall have
been exercised, with the Committee having sole discretion to determine the form
of payment. A Stock Appreciation Right is further defined in Article VI hereof.
1.21 Stock Incentive Agreement or Agreement. Stock Incentive Agreement or
Agreement shall mean the agreement as described in Section 3.04 of the Plan
between the Company and the Participant under which such Participant receives an
Award pursuant to this Plan.
1.22 Subsidiary. Subsidiary shall mean any corporation of which more than
fifty percent of the outstanding shares of voting stock are beneficially owned
directly or indirectly by the Company.
ARTICLE II
PARTICIPATION
2.01 Participation. A grant under this Plan may be made by the Committee
to:
(A) Any officer or other key employee of the Company or a Subsidiary;
or
(B) Any former officer or other key employee of the Company or
Subsidiary whose employment ceased during the twelve months immediately
preceding the date of such grant; or
(C) Any present or former director of the Company.
ARTICLE III
SHARES OF STOCK SUBJECT TO THE PLAN
3.01 Limitations.
(A) Subject to adjustments pursuant to the provisions of Section 3.03
hereof, the number of shares of Stock or Stock equivalents which may be
granted hereunder to Participants under all forms of Awards shall not
exceed 1,500,000 shares. No grants will be made under the 1987 Plan after
the Approval Date.
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(B) For purposes of this Section 3.01, the shares of Stock that shall
be counted toward such limitation shall include all Stock:
(1) Issued or issuable pursuant to Options that have been or may be
exercised;
(2) Subject to Stock Appreciation Rights that have been or may be
exercised (other than Stock Appreciation Rights granted in tandem with
outstanding Options); and,
(3) Issued as, or subject to issuance as, Restricted Stock.
(C) Shares of Stock subject to grants under this Plan shall be
authorized and unissued shares of Stock or treasury stock.
3.02 Availability of Shares Once Issued Under the Plan. Once grants of
Awards have lapsed, terminated or have been forfeited, the Committee shall have
the sole discretion to issue a new grant to any Participant, covering the number
of shares to which such lapsed, terminated or forfeited grant related, provided
that the Participant has received no monetary benefits of ownership therefrom,
such as dividends.
3.03 Adjustments to Grants Once Issued. In the event that the Company is
party to any merger, consolidation, other reorganization, change in control,
sale or exchange of substantially all of the Company's assets, recapitalization,
reclassification, combination of shares, stock split-up, or stock dividend, the
Committee shall make such corresponding adjustments to the Plan and any
outstanding Award if any, as deemed appropriate in its sole discretion. Without
limiting the generality of the foregoing, the Committee may adjust the number
and kind of shares which may be granted under the Plan, the maximum number and
kind of shares which may be granted to any one eligible Participant, and the
number, the Option Price, and the kind of shares or property subject to each
outstanding grant. In connection with the cancellation or termination of any
Restricted Stock Option, Stock Appreciation Right or other right of any
Participant under the Plan (whether pursuant to the terms of the Plan or any
Award or Agreement), the Company may provide for payment to such Participant of
such amount as the Company may determine to be fair and equitable to the
Participant or in the interest of the Company.
3.04 Grants and Agreement. Each grant of an Award under this Plan shall be
evidenced by a written Stock Incentive Agreement dated as of the date of the
grant and executed by the Company and the Participant. This Agreement shall set
forth the terms and conditions of such Award, as may be determined by the
Committee consistent with this Plan, and if such Agreement relates to the grant
of an Option, shall indicate whether the Option that it evidences, if
applicable, is intended to be an Incentive Stock Option or a Non-qualified Stock
Option.
ARTICLE IV
OPTIONS
4.01 Option Exercise. Subject to Federal and State statutes then
applicable, the terms and procedures by which an Option may be exercised shall
be set forth in the Participant's Agreement or in procedures established by the
Committee. The Committee may permit payment of the Option Price to be made
through the tender of cash or securities, the withholding of Stock or cash to be
received through Awards, or any other arrangement satisfactory to the Committee.
4.02 Non-qualified Stock Options. The Committee may grant Non-qualified
Stock Options under this Plan. Such Non-qualified Stock Options must comply with
all requirements of this Plan except for those contained in Article V, Article
VI, and Article VII hereof.
4.03 Vesting of Options. The Stock Incentive Agreement shall specify the
date or dates on which the Participant may begin to exercise all or a portion of
his Option. Subsequent to such date or dates, the option shall be deemed
"vested." Notwithstanding the terms of any Stock Incentive Agreement, the
Committee at any time may accelerate such date or dates and otherwise waive or
amend any conditions of the grant.
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A Participant's subsequent transfer or disposition of any Stock secured
through the grant shall be subject to any Federal and State laws then
applicable, specifically including securities laws.
ARTICLE V
INCENTIVE STOCK OPTIONS
5.01 General. All Incentive Stock Options shall comply with all of the
restrictions and limitations set forth in Section 422 of the Code. To the extent
that any Option does not qualify as an Incentive Stock Option, it shall
constitute a Non-qualified Stock Option.
ARTICLE VI
STOCK APPRECIATION RIGHTS
6.01 Grant and Exercise of Stock Appreciation Rights. Stock Appreciation
Rights may be granted to Participants by the Committee in tandem with, or
independently of, any Option granted pursuant to Article IV or Article V of this
Plan. In the case of a Stock Appreciation Right granted in tandem with a
Non-qualified Stock Option, such Stock Appreciation Right may be granted either
at or after the time of the grant of such Non-qualified Stock Option. In the
case of a Stock Appreciation Right granted in tandem with an Incentive Stock
Option, such Stock Appreciation Right may be granted only at the time of the
grant of such Incentive Stock Option.
A Stock Appreciation Right, or applicable portion thereof granted in tandem
with an Option, shall terminate and no longer be exercisable upon the
termination or exercise of the related Option. However, if a Stock Appreciation
Right is granted with respect to less than the full number of shares covered by
a related Option, such Stock Appreciation Right shall terminate only if and to
the extent that the number of shares covered by the exercise or termination of
the related Option exceeds the number of shares not covered by such Stock
Appreciation Right.
6.02 Terms and Conditions of Stock Appreciation Rights. Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Committee and embodied in the Agreements and in procedures
established by the Committee. The Committee at any time may accelerate the
exercisability of any Stock Appreciation Right and otherwise waive or amend any
conditions of the grant of a Stock Appreciation Right.
ARTICLE VII
RESTRICTED STOCK AWARDS
7.01 Agreement. If the purchase of Restricted Stock is required by the
Agreement, a Participant who is granted a Restricted Stock Award shall not have
any rights with respect to such grant unless the Participant shall have accepted
the grant within 60 days (or such shorter time as the Committee may specify)
following the date of the grant by making payment to the Company by certified or
bank check or other instrument acceptable to the Committee in an amount equal to
the specified purchase price, if any, of the shares covered by the grant and by
executing and delivering to the Company an Agreement in such form as the
Committee shall determine.
7.02 Rights as a Shareholder. After the Restricted Stock has been recorded
in the stock ledger of the Company and:
(A) Upon complying with Section 7.01 above, if the purchase of
Restricted Stock is required by the Agreement; or
(B) Immediately, if no purchase of Restricted Stock is required by the
Agreement,
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a Participant shall have all the rights of a shareholder with respect to such
Restricted Stock including voting and dividend rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section and Section 7.03, and subject to such other conditions
(including but not limited to condition on voting and dividend rights) as are
contained in the Agreement. Unless the Committee shall otherwise determine,
certificates evidencing shares of Restricted Stock shall remain in the
possession of the Company until such shares are vested as provided in Section
7.04 below and the Agreement.
7.03 Restrictions. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, or otherwise encumbered or disposed of except as
specifically provided herein. Restrictions on shares of Restricted Stock shall
be set forth in a Stock Incentive Agreement and may include such vesting
restrictions as the Committee shall determine, including but not limited to
growth of the share price. In the event of a Participant's termination of
employment with the Company and its Subsidiaries for any reason (including
death) or removal, resignation or other termination of his status as a director
of the Company prior to the date shares of Restricted Stock awarded to such
Participant become vested, the Company shall have the right, at the discretion
of the Committee, to repurchase such shares at their purchasing price, or to
require, forfeiture of such shares to the Company if acquired at no cost, from
such Participant or Participant's legal representative.
7.04 Vesting of Restricted Stock. The Committee at the time of grant shall
specify the date or dates (which may depend upon or be related to the attainment
of performance goals and other conditions) on which the restrictions imposed
upon the Restricted Stock and the Company's right of repurchase or forfeiture
shall lapse. Subsequent to such date or dates, the shares on which all
restrictions have lapsed shall no longer be Restricted Stock and shall be deemed
"vested." The Committee at any time may accelerate such date or dates and
otherwise waive or amend any conditions of the grant. A Participant may transfer
or dispose of any Restricted Stock that has vested, subject to any Federal and
State laws then applicable, specifically including securities laws.
ARTICLE VIII
STOCK CERTIFICATES
8.01 Stock Certificates. The Company shall not be required to issue or
deliver any certificate for shares of Stock under this Plan or of any portion
thereof prior to fulfillment of all of the following conditions:
(A) The admission of such shares to listing on all stock exchanges on
which the Stock is then listed, if any;
(B) The completion of any registration or other qualification of such
shares under any Federal or State law, under the rulings or regulations of
the Securities and Exchange Commission, or under any other governmental
regulatory agency which the Committee shall in its sole discretion
determine to be necessary or advisable;
(C) The obtaining of any approval or other clearance from any Federal
or State governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable; and,
(D) The lapse of such reasonable period of time following the exercise
of the grant as the Committee from time to time may establish for reasons
of administrative convenience.
(E) Payment of any purchase or exercise price required by any
applicable Agreement.
If these conditions are not satisfied, the employee may lose his
rights to such Stock as determined by the Committee.
ARTICLE IX
DIVIDENDS
9.01 Dividends. At the time of each grant of an Award the Committee may,
in its sole discretion, determine whether the grant shall provide a dividend or
a dividend equivalent and the terms and conditions
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under which any such dividend or dividend equivalent is to be provided,
including but not limited to permitting or requiring immediate payment, deferral
or investment of dividends or dividend equivalents.
ARTICLE X
PLAN ADMINISTRATION
10.01 Plan Administration. The Plan and all Agreements shall be
administered, and all grants under this Plan shall be awarded, by the Committee.
The Committee shall have full authority and absolute sole discretion:
(A) To determine, consistent with the provisions of this Plan, which
of the employees shall be granted Awards; the form and terms of such
Awards; the timing of such grants; the number of shares subject to each
Award and the Option Price of Stock covered by each Option (if applicable);
and the period over which the Awards shall become and remain exercisable
(if applicable);
(B) To construe and interpret the Plan and the Agreements;
(C) To determine the terms and provisions of each respective Stock
Incentive Agreement, which need not be identical;
(D) To make all other determinations and take all other actions deemed
necessary or advisable for the proper administration of the Plan;
(E) To adopt, alter, and repeal such rules, guidelines, and acts and
proceedings as it shall deem advisable;
(F) To interpret the terms and provisions of the Plan and any grant
(including related Agreements);
(G) To make all determinations it deems advisable for the
administration of the Plan;
(H) To decide all disputes arising in connection with the Plan; and
(I) To otherwise supervise the administration of the Plan.
(J) To delegate its obligations and duties hereunder (except for to
make or otherwise administer any Award to any director or any officer
subject to the reporting requirements of Section 16 of the Exchange Act) to
the Executive Committee of the Board of Directors of the Company.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01 Applicable Law. To the extent that state law shall not have been
preempted by any laws of the United States, the Plan shall be governed by the
laws of the State of Delaware.
11.02 Expenses. The cost of benefit payments from this Plan and the
expenses of administering the Plan shall be borne by the Company.
11.03 Gender and Number. Unless the context clearly requires otherwise,
the masculine pronoun whenever used shall include the feminine and neuter
pronoun, the singular shall include the plural, and vice versa.
11.04 Headings Not Part of the Plan. Headings of Articles and Sections are
inserted for convenience and reference; they constitute no part of this Plan.
11.05 Indemnification. No member of the Board of Directors or the
Committee or any officer to whom any powers of the Board or the Committee
hereunder may be delegated shall be liable for any action or determination taken
or made in good faith with respect to this Plan nor shall any member of the
Board of Directors or the Committee or any such officer be liable for any
Agreement issued pursuant to this Plan or any
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grants under this Plan. Each member of the Board of Directors and the Committee
and each such officer shall be indemnified in such administration of the Plan,
unless his action constitutes serious and willful misconduct.
11.06 Limitation of Rights. Neither the adoption and maintenance of the
Plan or Agreement nor anything contained herein, with respect to any
Participant, shall be deemed to:
(A) Limit the right of the Company or any Subsidiary to discharge or
discipline any such person, or otherwise terminate or modify the terms of
his employment; or,
(B) Create any contract or other right or interest under the Plan, or
in any funds hereunder, other than as specifically provided in the Plan and
the Agreement.
11.07 No Distribution Until Compliance with Legal Requirements. The
Committee may require each Participant acquiring shares pursuant to a grant to
represent to and agree with the Company in writing that such Participant is
acquiring the shares without a view to distribution thereof.
No shares of Stock shall be issued pursuant to a grant until all applicable
securities laws and other legal stock exchange requirements have been satisfied.
The Committee may require the placing of such stop-orders and restrictive
legends on certificates for Stock and grants as it deems appropriate.
11.08 Timing of Grants. All Awards granted under this Plan shall be
granted on or prior to February 28, 2005.
11.09 Non-Assignability. A Participant's interest under this Plan or any
Agreement or to any Award shall not be subject at any time, or in any manner, to
alienation, sale, transfer, assignment, pledge, attachment, garnishment or
encumbrance of any kind and any attempt to deliver, sell, transfer, assign,
pledge, attach, garnish or otherwise encumber such interest shall be void and
any interest so encumbered will terminate.
11.10 Nontransferability. An Award shall not be transferable by the
Participant other than by will or the laws of descent and distribution. During
the lifetime of the Participant, such Award shall be exercisable or perfected
only by the Participant in accordance with the terms of this Plan and the
Agreement.
11.11 Other Compensation Plans. The adoption of the Plan shall not affect
any other existing or future incentive or compensation plans for directors,
officers or employees of the Company or its Subsidiaries other than the 1987
Plan. The adoption of this Plan shall not preclude the Company or its
Subsidiaries from:
(A) Establishing any other forms of incentive or other compensation
for directors, officers or employees of the Company or its Subsidiaries;
or,
(B) Assuming any forms of incentives or other compensation of any
person or entity in connection with the acquisition of the business or
assets, in whole or in part, of any person or entity.
11.12 Plan Binding on Successors. This Plan shall be binding upon the
successors and assigns of the Company.
11.13 Tax Withholding. Each Participant shall, no later than the date as
of which the value of a grant or of any Stock or other amount received
thereunder first becomes includable in the gross income of the Participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, State, or local
taxes of any kind required by law to be withheld with respect to such income.
The Committee may permit payment of such taxes to be made through the tender of
cash or securities, the withholding of Stock or cash to be received through
Awards or any other arrangement satisfactory to the Committee. The Company and
its Subsidiaries shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the Participant.
11.14 Non-Contravention of Securities Laws. Notwithstanding anything to
the contrary expressed in this Plan, any provisions hereof that vary from or
conflict with any applicable Federal or State securities laws (including any
regulations promulgated thereunder) shall be deemed to be modified to conform to
and comply with such laws.
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11.15 Unenforceability of a Particular Provision. The unenforceability of
any particular provision of this document shall not affect the other provisions
and the document shall be construed in all respects as if such unenforceable
provision were omitted.
ARTICLE XII
PERMANENCY OF THE PLAN AND PLAN TERMINATION
12.01 Effective Date. This Plan became effective as of February 28, 1995
upon a resolution by the Board of Directors for its adoption, subject to the
approval of the Company's shareholders within one year thereafter.
12.02 Termination, Amendment, and Modification of the Plan. The Board of
Directors may at any time terminate or suspend, and may at any time and from
time to time and in any respect amend or modify, the Plan; provided, however,
that no such action of the Board of Directors without approval of the
shareholders of the Company may increase the total number of shares of Stock
subject to the Plan except as contemplated in Section 3.03 hereof.
IN WITNESS WHEREOF, the Plan is hereby adopted effective February 28, 1995
and executed this 28th day of February, 1995.
<TABLE>
<S> <C>
Attest: J.M. PETERS COMPANY, INC.
/s/ By: /s/
- -------------------------- --------------------------
</TABLE>
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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 26, 1995.
The undersigned hereby appoints Donald J. Sajor and Anthony M. Laughlin, 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 26,
1995, and at all adjournments thereof, as follows:
1. ELECTION OF DIRECTORS
Hadi Makarechian, Dale Dowers, Allan L. Acree, Karlheinz M. Kaiser, William
A. Funk
<TABLE>
<S> <C>
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY for all nominees listed
(except as marked to the contrary below). 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. To approve the 1995 Stock Incentive Plan and the issuance of 1,500,000
shares of common stock authorized under the plan.
/ / APPROVE the Plan.
/ / DISAPPROVE the Plan.
/ / ABSTAIN from voting with respect to the Plan.
IF NO PREFERENCE IS INDICATED, THIS PROXY WILL BE VOTED "TO APPROVE" THE PLAN
(over)
3. To approve an Amendment of the Company's Articles of Incorporation to change
the name of the Company.
/ / APPROVE the Name Change.
/ / DISAPPROVE the Name Change.
/ / ABSTAIN from voting with respect to the Name Change.
IF NO PREFERENCE IS INDICATED, THIS PROXY WILL BE VOTED "TO APPROVE" THE NAME
CHANGE
4. 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: _______________________, 1995
BE SURE TO DATE THIS PROXY
