<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ]Confidential, for Use of the Commission Only
[X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CAPITAL PACIFIC HOLDINGS, INC.
--------------------------------------------------------------------------------
(Name of Registrant As Specified in Charter)
STEVEN O. SPELMAN, JR.
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] Fee not required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
<PAGE> 2
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE> 3
CAPITAL PACIFIC HOLDINGS, INC.
4100 MACARTHUR BOULEVARD
SUITE 200
NEWPORT BEACH, CALIFORNIA 92660
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 13, 2000
The Annual Meeting of Stockholders (the "Meeting") of Capital Pacific
Holdings, Inc. (the "Company") will be held at the Sutton Place Hotel, 4500
MacArthur Boulevard, Newport Beach, California on July 13, 2000 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 9, 2000, 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/ STEVEN O. SPELMAN, JR.
STEVEN O. SPELMAN, JR.
Corporate Secretary
June 13, 2000
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> 4
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 13, 2000
------------------------
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 13, 2000, 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 9, 2000, 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 13,769,111 shares of the Company's common stock, $.10 par value per
share (the "Common Stock"), with each share being entitled to one vote.
The Company intends to mail this Proxy Statement and the accompanying form
of proxy to stockholders on or about June 13, 2000. Copies of the Company's 2000
Annual Report will be 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. Four
of the nominees are currently directors of the Company. 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
nominees and, in his best judgment, for such other person as he may select in
place of such nominee.
<PAGE> 5
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............ 52 1992 Mr. Makarechian has been Chairman of the Board of
the Company since August, 1992 and served as Chief
Executive Officer of the Company from March, 1993
until May, 1996 and since January 1998. Mr.
Makarechian has also served as President of the
Company since January 1999. 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.
Karlheinz M. Kaiser......... 41 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.
Allan L. Acree.............. 57 1992 Mr. Acree holds the position of Senior Mortgage
Officer with Manulife Financial in Washington, D.C.
Manulife Financial Corporation is the holding
company for the Manufacturers Life Insurance Company
and its Subsidiaries. Prior to joining Manulife in
July, 1999, Mr. Acree was a principal in A.L. Acree
& Associates, a real estate consulting firm based in
Rockville, Maryland.
William A. Funk............. 59 1994 Effective March 1, 1999, Mr. Funk assumed the
position of Senior Vice President, Commercial
Development at the Company. Prior to that, Mr. Funk
was Senior Vice President with Holmes & Narver, an
international engineering, design and construction
company based in Orange, California. Until June
1997, Mr. Funk was a principal and the Vice
President and Manager of The Austin Company, an
international design and construction firm based in
Cleveland, Ohio.
Paul P. Makarechian......... 26 -- Mr. Makarechian has been Senior Vice President,
Commercial Division of the Company since April,
1999. He joined the Company in January 1997. Prior
to joining the Company, Mr. Makarechian was an
analyst at the New York investment banking firm of
McFarland, Dewey & Company. Mr. Makarechian has an
extensive background in finance and is a graduate of
the University of California with a degree in
Business/Economics with a concentration in finance
and accounting. Mr. Makarechian is the son of Hadi
Makarechian, the Chairman of the Board and Chief
Executive Officer of the Company.
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS; DIRECTORS' COMPENSATION
Each member of the Board of Directors of the Company who is not also an
officer of the Company is compensated at a rate of $10,000 per year, plus $1,500
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 29, 2000.
The Board of Directors has a standing Executive Committee whose current
members are Hadi Makarechian and William A. Funk. Messrs. Makarechian and Funk
are not compensated for serving on the Executive Committee.
The Board of Directors has a standing Audit Committee whose current members
are Allan L. Acree and Karlheinz M. Kaiser. Messrs. Acree and Kaiser each
receive $5,000 per year for participating on the Audit
2
<PAGE> 6
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 three meetings during
the fiscal year ended February 29, 2000.
The Board of Directors has a standing Compensation Committee whose current
members are Allan L. Acree and Karlheinz M. Kaiser. Messrs. Acree and Kaiser
each receive $2,000 for each meeting attended. The primary function of the
Compensation Committee is to advise the Board of Directors with respect to all
matters relating to executive compensation. The Compensation Committee held one
meeting for the fiscal year ended February 29, 2000.
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.
EXECUTIVE OFFICERS
In addition to Messrs. H. Makarechian, Funk and P. Makarechian, the
Company's executive officers are as follows:
<TABLE>
<CAPTION>
NAME AND POSITION WITH COMPANY AGE INFORMATION ABOUT EXECUTIVE OFFICERS
------------------------------ --- ------------------------------------
<S> <C> <C>
Stephen P. Couig..................... 34 Mr. Couig joined the Company in January 1997 and
Senior Vice President, assumed his current position in May 1999. Prior to
Residential Division joining the Company he served as Executive Vice
President in charge of acquisitions for Troon Golf, a
Scottsdale, AZ based golf course owner and operator.
After receiving his MBA from Dartmouth College in 1993
he was, until 1996, an Associate at Morgan Stanley in
the Equity Capital Markets department focusing on
business development opportunities.
Steven O. Spelman, Jr................ 39 Mr. Spelman joined the Company in November 1997 as
Senior Vice President, Vice President, Finance and assumed the Chief
Chief Financial Officer and Financial Officer position in January 1998. He was
Corporate Secretary named Corporate Secretary in September 1998 and
promoted to Senior Vice President in April 1999. Prior
to joining the Company, Mr. Spelman served with Arthur
Andersen LLP for thirteen years, most recently as a
Senior Audit Manager, after receiving his MBA from the
University of Southern California in 1984.
Marquis L. Cummings.................. 61 Prior to assuming his current position in January
Vice President 1998, Mr. Cummings served as Vice President, Finance,
and Treasurer Chief Financial Officer and Secretary from January
1997 until January 1998. In addition, effective March
1999, Mr. Cummings assumed the position of President,
Southern California Coastal Division. Previously, Mr.
Cummings served in several executive positions for the
Company and its predecessors since 1987.
</TABLE>
All executive officers serve at the pleasure of the Board of Directors.
3
<PAGE> 7
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the cash compensation paid during the fiscal
years ended February 29, 2000, February 28, 1999 and February 28, 1998 to each
of the five most highly compensated executive officers of the Company in all
capacities in which they served, and such other individuals as are required to
be disclosed.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
FISCAL -------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(c)
--------------------------- ------ -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Hadi Makarechian................. 2000 $301,875 $598,000(a) -- $ 160
Chairman and Chief 1999 284,896 312,560(b) -- 180
Executive Officer 1998 270,625 -- -- 204
Stephen P. Couig................. 2000 212,500 105,000 24,000 910
Senior Vice President, 1999 175,000 67,500 15,000 180
Residential Division 1998 155,208 42,500 -- 204
Steven O. Spelman, Jr............ 2000 178,750 115,000 24,000 1,931
Senior Vice President, 1999 157,500 57,500 15,000 180
Chief Financial Officer 1998 46,875(d) 1,250(d) -- 68(d)
and Corporate Secretary
Paul P. Makarechian.............. 2000 143,333 105,000 24,000 1,077
Senior Vice President 1999 75,000 57,500 15,000 180
1998 39,551 17,500 -- 204
William A. Funk(e)............... 2000 200,000 20,000 8,000 1,327
Senior Vice President 1999 -- -- -- --
1998 -- -- -- --
</TABLE>
---------------
(a) Bonus was earned in FY 2000 but was paid in FY 2001.
(b) Bonus was earned in FY 1999 but was paid in FY 2000.
(c) Represents premiums paid by the Company for term life insurance for the
benefit of the insured and employer matching contributions to the Company's
401(k) Plan which began in October, 1999.
(d) Represents amounts paid for the period November 1997 through February 1998.
(e) Mr. Funk began employment with the Company on March 1, 1999.
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 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. In February 1999, the Board of
Directors approved a grant of 256,000 stock options under the Plan. The grants
were effective on February 8, 1999. The stock underlying all of the option
grants is the Company's Non-Voting Common Stock, par value $.10 per share. As of
June 9, 2000, there is no Non-Voting Common Stock outstanding. Since there is no
market for the Non-Voting Common Stock, the value of such Non-Voting Common
Stock for purposes of calculating the value of the options (solely for purposes
of this Proxy Statement) is assumed to be the market price of the Company's
publicly traded voting common stock.
4
<PAGE> 8
OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS(1) VALUE AT ASSUMED
--------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(3)
OPTIONS GRANTED EMPLOYEES BASE PRICE EXPIRATION --------------------
NAME (#) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- --------------- -------------- ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Hadi Makarechian........... (2) -- -- -- -- --
Stephen P. Couig........... 24,000 9.6 1.875 9/30/09 28,300 71,718
Steven O. Spelman, Jr...... 24,000 9.6 1.875 9/30/09 28,300 71,718
Paul P. Makarechian........ 24,000 9.6 1.875 9/30/09 28,300 71,718
William A. Funk............ 8,000 3.2 1.875 9/30/09 9,433 23,906
</TABLE>
---------------
(1) The nonqualified stock options granted by the Board are scheduled to vest at
a rate of 33 1/3% per year over the first three years and to lapse after ten
years unless sooner exercised or forfeited. All stock options will vest
immediately in the event of either (i) a merger in which the Company does
not survive or (ii) a sale of all or substantially all of the Company's
assets. All stock options were granted at the closing market price of the
Company's voting shares on the date of grant.
(2) Under the existing 1995 Stock Incentive Plan, Hadi Makarechian is not
eligible to receive stock options.
(3) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the SEC, and therefore are not intended to forecast
possible future appreciation of the Company's stock price. In all cases the
appreciation is calculated from the award date to the end of the option
term.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR END(#)(1) AT FISCAL YEAR END($)(3)
SHARES ACQUIRED --------------------------- ---------------------------
NAME ON EXERCISE(#) VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Hadi Makarechian........... -- -- (2) -- -- --
Stephen P. Couig........... -- -- 5,000 34,000 625 25,250
Steven O. Spelman, Jr...... -- -- 5,000 34,000 625 25,250
Paul P. Makarechian........ -- -- 5,000 34,000 625 25,250
William A. Funk............ -- -- -- 8,000 -- 8,000
</TABLE>
---------------
(1) The nonqualified stock options granted by the Board are scheduled to vest at
a rate of 33 1/3% per year over the first three years and to lapse after ten
years unless sooner exercised or forfeited. All stock options will vest
immediately in the event of either (i) a merger in which the Company does
not survive or (ii) a sale of all or substantially all of the Company's
assets. All stock options were granted at the closing market price of the
Company's voting shares on the date of grant.
(2) Under the existing 1995 Stock Incentive Plan, Hadi Makarechian is not
eligible to receive stock options.
(3) Calculated per share by subtracting the exercise price from the market price
of the Company's voting shares on February 29, 2000.
EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
None of the executive officers is currently working under an employment
contract.
5
<PAGE> 9
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 Chief Executive
Officer and any other executive officer which may in the future be specifically
designated by the Board of Directors. The Compensation Committee also 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 has examined the compensation of the executives of
comparatively placed homebuilders to determine whether or not the compensation
of the Company's Chief Executive Officer is within the range of his peers. In
undertaking such examination, the Committee has sought publicly available
information regarding homebuilders which 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
The Committee has reviewed the Company's performance in Fiscal 2000 under
the direction of the Chief Executive Officer both in homebuilding and commercial
and real estate development activities. Based upon the Committee's review of the
compensation of chief executives of similarly placed homebuilders, and
particularly in light of (i) the Company's non-homebuilding activities, (ii) the
Company's increased performance, (iii) the fact that the Company's Chief
Executive Officer has assumed some of the responsibility of the Company's former
Chief Operating Officer, and (iv) the fact that the Company's Chief Executive
Officer, unlike the chief executive officers of the majority of the peer group,
receives no material non-cash compensation, it was the Committee's judgment that
the existing bonus compensation structure would not be sufficient to provide
total compensation commensurate with the Company's Chief Executive Officer's
responsibilities. In light of contractual restrictions on increasing the basis
of the Chief Executive Officer's performance based compensation required by the
Company's investor, Farallon Capital Management, LLC ("Farallon"), at the time
of the Fiscal 1998 equity and restructuring transaction, however, it was
determined to retain his performance based compensation of four percent (4%) of
the pre-tax income of the Company for fiscal year 2000.
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 annualized base salary of the Chief Executive Officer was $301,875 for
Fiscal Year 2000. For the reasons stated above with respect to Performance Based
Compensation, it was the Committee's judgment that the base salary of the Chief
Executive Officer should be substantially increased. Unless and until the
existing contractual restrictions on the base compensation payable to the Chief
Executive Officer required by Farallon are modified or eliminated, however, the
Committee has determined to recommend an increase of $15,094 to $316,969 for
Fiscal Year 2001, the maximum increase permitted under such contractual
restrictions.
<TABLE>
<S> <C>
/s/ KARLHEINZ M. KAISER /s/ ALLAN L. ACREE
-------------------------------------------- --------------------------------------------
Karlheinz M. Kaiser Allan L. Acree
</TABLE>
Dated: February 29, 2000
6
<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
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
CAPITAL PACIFIC
HOLDINGS, INC. PEER GROUP INDEX AMEX MARKET INDEX
--------------- ---------------- -----------------
<S> <C> <C> <C>
1995 100.00 100.00 100.00
1996 142.86 131.37 121.08
1997 100.00 140.75 129.00
1998 138.10 230.28 153.73
1999 114.29 185.64 150.30
2000 95.24 124.37 209.34
</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 March 1, 1995 in each of Capital Pacific Holdings, Inc., the
American Stock Exchange Market Value Index and the Dow Jones Home
Construction Industry Group.
7
<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of June 9, 2000, 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. ............................................... 4,113,657 29.9%
4100 MacArthur Boulevard, Suite 200,
Newport Beach, California 92660
CPH3, L.L.C. ............................................... 4,640,694 33.7%
4100 MacArthur Boulevard, Suite 200
Newport Beach, California, 92660
Hadi Makarechian............................................ 7,079,614(2) 51.4%
4100 MacArthur Boulevard, Suite 200,
Newport Beach, California 92660
California Housing Finance, L.P. ........................... 2,809,851(3) 20.4%
One Maritime Plaza, Suite 1325
San Francisco, California 94111
Dale Dowers................................................. 1,674,737(4) 12.2%
4270 South Decatur, Suite A-7,
Las Vegas, Nevada 89103
All Directors and Officers of the Corporation as a Group (14
persons).................................................. 8,754,451 63.6%
</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 warrants, options or rights to subscribe have been exercised by
anyone else.
(2) Includes 2,438,920 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. and 4,640,694 shares of Common Stock held
by CPH3, L.L.C. in which Mr. Makarechian may be deemed to have a beneficial
interest due to his ownership in CPH3, L.L.C. Mr. Makarechian and Mr. Dowers
as a group could be deemed beneficial owners of 8,754,351 shares of stock in
the Corporation.
(3) The number of shares beneficially owned by California Housing Finance, L.P.
is subject to adjustment based on contractual arrangements between the
Company and California Housing Finance, L.P.
(4) Includes 1,674,737 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 8,754,351 shares of stock in the
Corporation. Mr. Dowers is the former President and Chief Operating Officer
of the Corporation.
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 stockholders, 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.
8
<PAGE> 12
Paul Makarechian is Senior Vice President of the Commercial Division for
the Company and is the son of Hadi Makarechian, the Company's Chairman and CEO.
During fiscal 2000, the Company paid approximately $193,000 to a company
which is 40% owned by Cyrus Makarechian, son of Hadi Makarechian, for services
rendered in connection with website design and maintenance and the development
of virtual reality home tour models.
During fiscal 2000, Everett Pfeiff, Regional President for the Arizona,
Nevada and Colorado divisions of the Company, purchased an improved lot from the
Company for $65,000.
In April, 2000, Mr. Couig, an officer of the Company, purchased a home from
one of the Company's joint ventures for $1,387,000.
During fiscal 2000, a Company controlled by Paul Makarechian, provided
certain exclusive services for one of the Company's joint ventures. The service
fees paid by the Company to this enterprise for the fiscal year were less than
$60,000.
INDEPENDENT AUDITORS
Arthur Andersen LLP served as the Company's independent auditors for the
fiscal year ended February 29, 2000, 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, 2001. The notice should be directed to Capital
Pacific Holdings, Inc., 4100 MacArthur Boulevard, Suite 200, Newport Beach,
California 92660, Attention: Corporate Secretary.
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's Annual Report for the fiscal year ended February 29, 2000 is
being delivered to shareholders together with this Proxy Statement. Copies of
the annual report on Form 10-K for the fiscal year ended February 29, 2000 as
filed with the Securities and Exchange Commission (except for the Exhibits
thereto) 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: Steven O.
Spelman, Jr., Senior Vice President, Chief Financial Officer and Corporate
Secretary. 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.
9
<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
/s/ STEVEN O. SPELMAN, JR.
STEVEN O. SPELMAN, JR.
Corporate Secretary
Dated: June 13, 2000
10
<PAGE> 14
PROXY
CAPITAL PACIFIC HOLDINGS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 13, 2000.
The undersigned hereby appoints Marquis L. Cummings and Steven O.
Spelman, Jr., 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 13, 2000, and at all adjournments thereof, as follows:
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
SEE REVERSE
SIDE
<PAGE> 15
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
FOR WITHHOLD
1. Election of Directors all nominees listed AUTHORITY
(except as marked to for all
the contrary below) nominees listed
[ ] [ ]
NOMINEES: Hadi Makarechain, Allan L. Acree, Karlheinz M. Kaiser,
William A. Funk, Paul P. Makarechian
(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. In accordance with their best judgment upon such others matters as may
properly come before the Meeting.
SIGNATURE(S) ___________________________________ DATED ___________________, 2000
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. BE SURE TO
DATE THIS PROXY
