<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
CAPITAL PACIFIC HOLDINGS, 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:
- --------------------------------------------------------------------------------
/ / 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:
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
CAPITAL PACIFIC HOLDINGS, INC.
4100 MACARTHUR BOULEVARD
SUITE 200
NEWPORT BEACH, CALIFORNIA 92660
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 25, 1996
The Annual Meeting of Stockholders (the "Meeting") of Capital Pacific
Holdings, Inc. (the "Company") will be held at the Four Seasons Hotel, 690
Newport Center Drive, Newport Beach, California, on July 25, 1996, at 9:00 a.m.
(Pacific Daylight Savings Time) for the following purposes:
1. To elect directors whose terms expire at the Meeting; and
2. 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 28, 1996, 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]
ANTHONY M. LAUGHLIN
Secretary
June 28, 1996
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
CAPITAL PACIFIC HOLDINGS, INC.
4100 MACARTHUR BOULEVARD
SUITE 200
NEWPORT BEACH, CALIFORNIA 92660
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 25, 1996
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Capital Pacific Holdings, Inc. (the
"Company") for use at the Annual Meeting of Stockholders (the "Meeting") to be
held on July 25, 1996, 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". 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 28, 1996, 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 28, 1996. Copies of the Company's 1996 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 48 1992 Mr. Makarechian has been Chairman of the Board of the
Company since August, 1992 and Chief Executive Officer of
the Company from March, 1993 until his resignation as
Chief Executive Officer effective May 1, 1996. 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 in 1994. 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, of each of which he was also
Chairman and founder.
Dale Dowers 40 1992 Effective May 1, 1996, Mr. Dowers assumed his current
position as President and Chief Executive Officer. Mr.
Dowers was President and Chief Operating Officer of the
Company from March, 1993 until May 1, 1996. Prior thereto,
he was Executive Vice President and Chief Operating
Officer of the Company from August, 1992 until March,
1993. 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 37 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 real estate holding company.
Allan L. Acree 53 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 55 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 five meetings during
the fiscal year ended February 29, 1996.
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 29, 1996.
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 29, 1996.
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 36 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.
James H. Cederquist 65 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.
Marquis L. Cummings 57 Mr. Cummings was Vice President -- Finance and
Vice President, Finance 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. Mr. Cummings assumed his
current position in March, 1996.
Craig A. Foster 42 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 duties of President of the Company's
design center to his responsibilities. In 1994
Mr. Foster added the duties of President of the
Company's mortgage brokerage operation (Capital
Communities Mortgage, Inc.) to his
responsibilities.
Tim Hamilton 41 Mr. Hamilton joined the Company as Vice
Vice President -- Sales and President -- Sales and Marketing in May, 1994.
Marketing Since 1989 Mr. Hamilton had been a consultant to
the real estate industry. Prior to establishing
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.
Robert J. Trapp 52 From 1980 until he assumed his current position in
Vice President -- Division 1994, Mr. Trapp was responsible for all of the
Manager Company's activities relating to governmental
regulations, civil engineering, offsite
construction, utility coordination, California
Department of Real Estate processing and
homeowners' associations.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME AND
POSITION INFORMATION ABOUT
WITH COMPANY AGE EXECUTIVE OFFICERS
- ----------------------------------- --- --------------------------------------------------
<S> <C> <C>
Robin V. Koenemann 38 From 1992 until he assumed his current position in
Vice President -- Division 1994, Mr. Koenemann served as Vice President of
Manager 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.
Scott N. Coler 36 Mr. Coler served as Vice President since joining
Vice President -- Division the Company in August, 1992. He assumed his
Manager current position in 1994. 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.
Donald J. Sajor 37 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.
</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 29, 1996, February 28, 1995 and 1994 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 ($) ($) ($)(D)
- ---------------------------------------------------- ------ ------- ------- ------------
<S> <C> <C> <C> <C>
Hadi Makarechian -- Chairman 1996 135,420(a) 124,200(b) 252
1995 225,000 220,120(c) 252
1994 225,000 -- 252
Dale Dowers -- President and 1996 250,000 124,200(b) 252
Chief Executive Officer 1995 225,000 220,120(c) 252
1994 225,000 -- 252
Tim Hamilton -- Vice President -- 1996 130,000 64,242 252
Sales and Marketing 1995 125,590 1,000 252
1994 -- -- 252
Donald J. Sajor -- General Counsel 1996 110,000 40,600 252
1995 78,141(e) -- 189
1994 -- -- --
Robert J. Trapp -- Vice President -- 1996 121,625 19,000 252
Division Manager 1995 121,625 16,000 252
1994 118,078 12,000 252
</TABLE>
- ---------------
(a) From July, 1995 until December, 1995, Mr. Makarechian voluntarily elected
to temporarily reduce his compensation to $1.00 per annum. This election
reduced his salary from $250,000 to $135,420 for FY 1996.
(b) Bonuses of $124,200 were earned in FY 1996 but are to be paid in one or
more subsequent years.
(c) Bonuses of $220,120 were earned in FY 1996 but were calculated based on FY
1995 results.
(d) Represents premiums paid by the Company for term life insurance for the
benefit of the insured.
(e) Represents amounts paid for the period June, 1994 through February, 1995.
STOCK OPTIONS
Effective February 28, 1995, the Company, as approved by the stockholders
of the Company in July, 1995, adopted the 1995 Stock Incentive Plan (the "1995
Plan"). 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 the 1995 Plan is 1,500,000. No awards have
been made under the 1995 Plan.
EMPLOYMENT AGREEMENTS
None of the executive officers is currently working under an employment
contract.
COMPENSATION COMMITTEE DETERMINATION 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 Chairman and its Chief
Executive 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
6
<PAGE> 9
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 has examined the compensation of the executives of
comparatively placed homebuilders to determine whether or not the compensation
of the Company's Chairman and its Chief Executive is within the range of their
peers. In undertaking such examination, the Committee has 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.
PERFORMANCE BASED COMPENSATION
Last year, the Committee recommended for FY 1995 (ending February 28, 1995)
an annual performance bonus to each of Messrs. Makarechian and Dowers of four
percent (4%) of the pre-tax income of the Company for such fiscal year. The
Board of Directors accepted the recommendations of the Compensation Committee
but modified the manner and circumstances in which the bonus was earned and paid
out. Earning and payment of the bonus was made contingent on the profitability
of the Company in FY 1996 and payment was made only in quarters in which the net
pre-tax income of the Company exceeded 150 percent (150%) of the portion of the
bonus otherwise payable. Applying these principles, the FY 1995 bonus has been
fully earned and paid.
In light of the Committee's general policy and philosophy as stated above,
and the financial performance of the Company, the Compensation Committee
determined in its meetings held in March, 1995 and May, 1996 to continue for FY
1996 the annual cash bonus for the Chairman and the CEO in the amount of four
percent (4%) of annual pre-tax income of the Company. These figures result in
cash bonuses in the range of that provided by the Survey Companies.
The time of payment of the FY 1996 bonus shall be determined by management.
Section 162(m) of the Internal Revenue Code of 1986 limits deductions for
certain executive compensation in excess of $1 million. The Code permits
deduction of compensation in excess of $1 million only if it is
performance-based, the criteria for award are specified in detail, and
stockholder approval is obtained prior to payment. The policy of the Company is
to maintain the tax deductibility of all compensation paid to its executives.
The annual cash bonus has been structured to meet the requirements for
deductibility. While the Compensation Committee does not anticipate any payments
exceeding $1 million under the compensation structure it has approved, any such
payments will be contingent upon shareholder approval.
BASE SALARY
The base salary of the Chairman and CEO was $250,000 for Fiscal Year 1996.
The Committee has determined to recommend a nominal increase of ten thousand
dollars ($10,000) in the base salary of each of the Chairman and CEO, primarily
to take into account inflation.
/s/ William A. Funk
--------------------------------------
William A. Funk
/s/ Karlheinz Kaiser
--------------------------------------
Karlheinz Kaiser
Dated: May 31, 1996
7
<PAGE> 10
PERFORMANCE GRAPH
The following graph shows a five year comparison of cumulative total
returns for Capital Pacific Holdings 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>
CAPITAL INDUSTRY
MEASUREMENT PERIOD PACIFIC INDEX (DOW BROAD MARKET
(FISCAL YEAR COVERED) HOLDINGS, INC. JONES) (AMEX)
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 180.00 167.47 112.33
1993 166.67 182.37 107.13
1994 200.00 219.06 124.79
1995 140.00 158.90 114.48
1996 200.00 211.04 138.61
</TABLE>
- ---------------
(1) The above graph compares the performance of Capital Pacific Holdings, 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, 1991 in each of Capital Pacific Holdings, Inc., the
American Stock Exchange Market Value Index and the Dow Jones Home
Construction Industry Group.
8
<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of June 18, 1996, 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(7) 6.8%
4100 MacArthur Boulevard, Suite 200,
Newport Beach, CA 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 (14 persons).......................... 11,288,791(6)(7) 75.3%
</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.
(6) Includes the right to acquire beneficial ownership of 50,000 shares as
specified in Rule 13d-3(d)(1) of the Exchange Act of 1934.
(7) Includes 50,000 shares for which there is more than one beneficial owner.
9
<PAGE> 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH
OFFICERS, DIRECTORS AND AFFILIATES
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 29, 1996, 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.
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 28, 1997. The notice should be directed to Capital
Pacific Holdings, 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 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 29, 1996 (except for exhibits thereto) is delivered to shareholders
together with this Proxy Statement. Additional copies may be obtained, free of
charge, upon written request by any stockholder delivered to Capital Pacific
Holdings, 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.
10
<PAGE> 13
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
The Board of Directors knows of no matters other than the election of
directors 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]
ANTHONY M. LAUGHLIN
Secretary
Dated: June 28, 1996
11
<PAGE> 14
CAPITAL PACIFIC HOLDINGS, INC.
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON JULY 25, 1996.
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 Capital Pacific Holdings, Inc. which the undersigned may be
entitled to vote at the Annual Meeting of Stockholders to be held on July 25,
1996, and at all adjournments thereof, as follows:
1. ELECTION OF DIRECTORS
Hadi Makarechian, Dale Dowers, Allan L. Acree, Karlheinz M. Kaiser, William
A. Funk
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<S> <C>
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY for all nominees listed
(except as marked to the contrary below). above.
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(Instructions: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
<PAGE> 15
2. In accordance with their best judgment upon such other matters as may
properly come before the Meeting.
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Signature of Stockholder
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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: ________________________, 1996
BE SURE TO DATE THIS PROXY
