SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
ENGLE HOMES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ENGLE HOMES, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
(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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No.:
(3) Filing Parties:
(4) Date Filed:
<PAGE>
ENGLE
---------------------------
HOMES
---------------------------
123 N.W. 13TH STREET, BOCA RATON, FLORIDA 33432
------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 20, 1998
------------------------------------
To the Shareholders
of Engle Homes, Inc.:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Shareholders (the
"Annual Meeting") of Engle Homes, Inc., a Florida corporation (the "Company"),
will be held at 11:00 a.m., local time, on Monday, April 20, 1998, at the
Company's offices located at 123 N.W. 13th Street, Suite 300, Boca Raton,
Florida for the following purposes:
(1) To elect seven members to the Company's Board of Directors to hold
office until the Company's 1999 Annual Meeting of Shareholders or
until their successors are duly elected and qualified;
(2) To consider and vote on a proposal to amend the Company's 1991
Stock Option Plan (The "1991 Plan") to (i) increase the number of
shares of the Company's common stock reserved for issuance under
the 1991 Plan from 850,000 to 1,000,000 and (ii) conform certain
administrative provisions of the 1991 Plan to the requirements of
Section 162 (m) of the Internal Revenue Code of 1986, as amended;
(3) To consider and vote on a proposal to approve the adoption of the
Company's Amended and Restated 1997 Performance Bonus Plan (the
"1997 Plan"); and
(4) To transact such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 4, 1998
as the record date for determining those shareholders entitled to notice of, and
to vote at, the Annual Meeting and any adjournments or postponements thereof.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors
/s/ ALEC ENGELSTEIN
-------------------------------
ALEC ENGELSTEIN
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Boca Raton, Florida
February 27, 1998
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. ALL SHAREHOLDERS ARE RESPECTFULLY URGED TO EXECUTE AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE A
PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE
THEIR SHARES IN PERSON.
<PAGE>
1998 ANNUAL MEETING OF SHAREHOLDERS
OF
ENGLE HOMES, INC.
------------------------------------
PROXY STATEMENT
------------------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Engle Homes, Inc., a Florida corporation (the
"Company"), of proxies from the holders of the Company's Common Stock, par value
$.01 per share (the "Common Stock"), for use at the 1998 Annual Meeting of
Shareholders of the Company to be held on Monday, April 20, 1998, or at any
adjournment(s) or postponement(s) thereof (the "Annual Meeting"), pursuant to
the foregoing Notice of Annual Meeting of Shareholders.
The approximate date that this Proxy Statement and the enclosed form of
proxy are first being sent to shareholders is March 16, 1998. Shareholders
should review the information provided herein in conjunction with the Company's
1997 Annual Report to Shareholders which accompanies this Proxy Statement. The
Company's principal executive offices are located at 123 N.W. 13th Street, Suite
300, Boca Raton, Florida 33432, and its telephone number is (561) 391-4012.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to their principals and
to request authority for the execution of proxies.
The Company may reimburse such persons for their expenses in doing so.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and vote
upon the following matters:
(1) The election of seven members to the Company's Board of Directors
to serve until the Company's 1999 Annual Meeting of Shareholders
or until their successors are duly elected and qualified;
(2) A proposal to amend the Company's 1991 Stock Option Plan (The
"1991 Plan") to (i) increase the number of shares of the Company's
common stock reserved for issuance under the 1991 Plan from
850,000 to 1,000,000 and (ii) conform certain administrative
provisions of the 1991 Plan to the requirements of Section 162 (m)
of the Internal Revenue Code of 1986, as amended;
(3) A proposal to approve the adoption of the Company's Amended and
Restated 1997 Performance Bonus Plan (the "1997 Plan"); and
(4) Such other business as may properly come before the Annual Meeting
including any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted for the election of the seven nominees for director named below
and for approval of the amendments to the 1991 Plan and approval of the 1997
Plan. In the event a shareholder specifies a different choice by means of the
enclosed proxy, his shares will be voted in accordance with the specification so
made.
<PAGE>
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on March 4, 1998 as
the record date (the "Record Date") for determining shareholders of the Company
entitled to notice and to vote at the Annual Meeting. As of the date of this
Proxy Statement there were 10,082,362 shares of Common Stock issued and
outstanding, all of which are entitled to be voted at the Annual Meeting. Each
share of Common Stock is entitled to one vote on each matter submitted to
shareholders for approval at the Annual Meeting. Shareholders do not have the
right to cumulate their votes for directors.
The attendance, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Directors will be elected by a plurality of
the votes cast by the shares of Common Stock represented in person or by proxy
at the Annual Meeting. The affirmative votes of the holders of a majority of
shares of Common Stock represented in person or by proxy at the Annual Meeting
will be required for approval of (i) the amendment of the Company's 1991 Plan
and (ii) the adoption of the 1997 Plan. Any other matter that may be submitted
to a vote of the shareholders will be approved if the number of shares of Common
Stock voted in favor of the matter exceeds the number of shares voted in
opposition of the matter unless such other matter is one for which a greater
vote is required by law or by the Company's Articles of Incorporation or Bylaws.
If less than a majority of outstanding shares entitled to vote are represented
at the Annual Meeting, a majority of the shares so represented may adjourn the
Annual Meeting to another date, time or place, and notice need not be given of
the new date, time or place if the new date, time or place is announced at the
meeting before an adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more inspectors
of election for the meeting. Such inspector(s) shall determine the number of
shares of Common Stock represented at the Annual Meeting, the existence of a
quorum and the validity and effect of proxies, and shall receive, count and
tabulate ballots and votes and determine the results thereof.
Abstentions are considered as shares present and entitled to vote for
purposes of determining the presence of a quorum and will be counted as votes
cast for purposes of determining the outcome of any matter submitted to the
shareholders for a vote, but are not counted as votes "for" or "against" any
matter. The inspectors of election will treat shares referred to as "broker or
nominee non-votes" (shares held by brokers or nominees as to which instructions
have not been received from the beneficial owners or persons entitled to vote
and the broker or nominee does not have discretionary voting power on a
particular matter) as shares that are present and entitled to vote for purposes
of determining the presence of a quorum. For purposes of determining the outcome
of any matter as to which the proxies reflect broker or nominee non-votes,
shares represented by such proxies will be treated as not present and not
entitled to vote on that subject matter and therefore will not be considered by
the inspectors of election when counting votes cast on the matter (even though
those shares are considered entitled to vote for quorum purposes and may be
entitled to vote on other matters). Accordingly, broker or nominee non-votes
will not have the same effect as a vote against the election of any director or
against the proposals to approve the amendments to the 1991 Plan or to approve
the 1997 Plan. Abstentions will not have the same effect as a vote against the
election of any director but will have the same effect as a vote against the
proposals to approve the amendments to the 1991 Plan or to approve the 1997
Plan.
2
<PAGE>
SECURITY OWNERSHIP
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock by (i) each of the "Named Executive
Officers" (as defined below in "Executive Compensation --Summary Compensation
Table"), (ii) each other director of the Company, (iii) all directors and
executive officers of the Company as a group and (iv) each person known by the
Company to be a beneficial owner of more than 5% of the Common Stock.
PERCENT OF
AMOUNT AND NATURE OUTSTANDING
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) SHARES
- ------------------------ -------------------------- -------
Alec Engelstein .................... 3,187,780(2) 32.1%
Harry Engelstein ................... 749,219(3) 7.7%
John A. Kraynick ................... 44,000(4) *
Lawrence R. Shawe .................. 42,000(5) *
David Shapiro ...................... 318,367(6) *
Paul M. Leikert .................... 8,300(7) *
Henry H. Fishkind, Pd.D ............ 1,400 *
Ronald J. Korn ..................... 6,499(8) *
Alan Shulman ....................... 0 *
All directors and executive officers
as a group (9 persons) ........... 4,357,565(9) 42.9%
FMR Corp
82 Devonshire Street
Boston, Massachusetts 02109 ....... 1,257,400(10) 13.0%
Heartland Advisors, Inc. ...........
790 North Milwaukee Street
Milwaukee, Wisconsin 53202 ....... 1,089,350(11) 11.3%
- ------------------
* Less than 1%
(1) Unless otherwise indicated, amounts are as of February 9, 1998 and each
person has sole voting and investment power with respect to such shares.
(2) Includes 232,468 shares held of record by Sheila Engelstein, Alec
Engelstein's wife, and 264,000 shares issuable upon exercise of outstanding
options.
(3) Includes 107,000 shares issuable upon exercise of outstanding options.
(4) Includes 42,000 shares issuable upon exercise of outstanding options.
(5) Includes 42,000 shares issuable upon exercise of outstanding options.
(6) Includes 16,000 shares issuable upon exercise of outstanding options and
300,950 shares held in irrevocable trusts for the benefit of Alec
Engelstein's and Harry Engelstein's children and grandchildren. David
Shapiro or his wife, is a trustee of such trusts with shared voting and
dispositive power.
(7) Includes 6,000 shares issuable upon exercise of outstanding options.
(8) Includes 357 shares subject to issuance upon conversion of the Company's 7%
Convertible Subordinated Notes.
(9) Includes an aggregate of 477,000 shares issuable upon exercise of
outstanding options, 357 shares issuable upon conversion of the Company's
7% Convertible Subordinated Notes and 300,950 shares held in irrevocable
trusts for the benefit of Alec Engelstein's and Harry Engelstein's children
and grandchildren. David Shapiro or his wife, is a trustee of such trusts
with shared voting and dispositive power.
(10) The indicated amount is as of January 31, 1998 and includes 1,257,400
shares of Common Stock beneficially owned by FMR Corp. ("FMR Corp.") FMR
has sole dispositive power over 1,257,400 such shares. This disclosure of
FMR's beneficial ownership is based solely upon information set forth in
FMR's Schedule 13G dated February 10, 1998.
(11) The indicated amount is as of December 31, 1997 and includes 1,089,350
shares of Common Stock beneficially owned by Heartland Advisors, Inc.
("Heartland Advisors"). Heartland Advisors has sole dispositive power over
1,089,350 such shares and sole voting power over 1,024,850 such shares.
This disclosure of Heartland Advisors' beneficial ownership is based solely
upon information set forth in Heartland Advisors' Schedule 13G dated
January 27, 1998.
3
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10 percent of
the Company's outstanding Common Stock, to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports of changes in
ownership of Common Stock. Such persons are required by SEC regulations to
furnish the Company with copies of all such reports they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10 percent beneficial owners have been
complied with.
4
<PAGE>
ELECTION OF DIRECTORS; NOMINEES
The Company's Articles of Incorporation provide that the number of directors
constituting the Company's Board of Directors shall not be less than three nor
more than nine, as determined in the matter provided by the Company's Bylaws.
The Company's Bylaws provide that the number of directors shall be fixed from
time to time by resolution of the Board of Directors. The Board of Directors has
fixed at seven the number of directors that will constitute the Board for the
ensuing year. Each director elected at the Annual Meeting will serve for a term
expiring at the Company's 1999 Annual Meeting of Shareholders or when his
successor has been duly elected and qualified.
Each of the current members of the Board of Directors has been nominated by
the Company to be re-elected as a director at the Annual Meeting. The Board of
Directors has no reason to believe that any nominee will refuse or be unable to
accept election; however, in the event that one or more nominees are unable to
accept election or if any other unforeseen contingencies should arise, each
proxy that does not direct otherwise will be voted for the remaining nominees,
if any, and for such other persons as may be designated by the Board of
Directors.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
- ---- --- ---------------------
<S> <C> <C>
Alec Engelstein........................ 68 Chairman of the Board, President and Chief Executive
Officer
Harry Engelstein....................... 63 Executive Vice President, Chief Construction Officer and
Director
John A. Kraynick....................... 43 Senior Vice President and Director
Lawrence R. Shawe...................... 42 Vice President-Sales and Marketing
David Shapiro.......................... 42 Vice President-Finance, Chief Financial Officer and Director
Paul M. Leikert........................ 41 Vice President-Chief Accounting Officer
Henry H. Fishkind, Ph.D................ 48 Director
Ronald J. Korn......................... 57 Director
Alan L. Shulman ....................... 65 Director
</TABLE>
ALEC ENGELSTEIN, a co-founder and Chairman of the Board of the Company, has
served as its President and Chief Executive Officer since its organization in
August 1982. Alec Engelstein has over 35 years of experience in the homebuilding
industry and has been actively engaged as a homebuilder in southeast Florida
since 1969.
HARRY ENGELSTEIN, a co-founder and director of the Company and Alec
Engelstein's brother, has served as Executive Vice President and Chief
Construction Officer since the Company's inception in August 1982. Harry
Engelstein has over 30 years of experience in home construction.
JOHN A. KRAYNICK has served as a Vice President of the Company since August
1986 and was appointed Senior Vice President in July 1991. Mr. Kraynick is
responsible for administrative matters and coordinating the Company's compliance
with Federal, state and local regulatory requirements. Mr. Kraynick has over 19
years of experience in the homebuilding industry.
LAWRENCE R. SHAWE has served as the Company's Vice President-Sales and
Marketing since April 1986. Mr. Shawe joined the Company in April 1984 and since
such time has been responsible for the Company's sales and marketing efforts.
Mr. Shawe has over 17 years of experience in the homebuilding industry.
5
<PAGE>
DAVID SHAPIRO joined the Company in June 1991, has served as the Company's
Chief Financial Officer since July 1991, was appointed Vice President-Finance in
October 1991 and was appointed as a director on December 17, 1997. David Shapiro
is Alec Engelstein's son-in-law.
PAUL M. LEIKERT has served as the Vice President-Chief of Accounting since
March 1994 and in January of 1995, was appointed Vice President-Chief Accounting
Officer. Mr. Leikert is a certified public accountant and has over 13 years of
experience in the homebuilding industry.
HENRY H. FISHKIND, PH.D., has served as a director of the Company since
October 1991 and is a member of the Compensation and Audit Committees of the
Board of Directors. Dr. Fishkind has served as President of Fishkind &
Associates, Inc., an economic and financing consulting firm based in Orlando,
Florida, since 1988. From January 1984 until December 1987, Dr. Fishkind served
as president of M.G. Lewis Econometrics, Inc., the research subsidiary of an
investment banking firm based in Winter Park, Florida. Dr. Fishkind also serves
as editor of Econocast, a quarterly economic forecast, since 1984, and as a
director of Summit Properties.
RONALD J. KORN, chairman of the Compensation and Audit Committees of the
Board of Directors, has served as a director of the Company since October 1991.
Since July 1991, Mr. Korn has served as President of Ronald Korn Consulting, a
business consulting firm, and as Chairman of the Board of Carole Korn Interiors,
Inc., an interior design firm. From August 1985 until June 1991, Mr. Korn served
as the managing partner of the Miami office of KPMG Peat Marwick, a nationally
recognized firm of independent public accountants. Mr. Korn serves as a director
of Magicworks Entertainment, Inc., which produces, manages, promotes and
merchandises live entertainment. Mr. Korn served as a director of Vacation Break
USA, Inc. ("Vacation Break") from December 1995 to December 1997 when Vacation
Break merged with Fairfield Communities, Inc.
ALAN L. SHULMAN was appointed as a director of the Company on December 17,
1997. Mr. Shulman is currently a private investor. Mr. Shulman served on the
board of directors of Island National Bank in Palm Beach, Florida from its
inception in 1989 until April 1, 1997 and currently serves on the board of
directors of CV Reit, Inc., a New York Stock Exchange listed Company.
There are no arrangements or understandings with respect to the selection of
officers or directors.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the Company's fiscal year ended October 31, 1997, the Company's Board
of Directors held four meetings and took certain actions by written consent.
During the 1997 fiscal year, no director attended fewer than 75% of the
aggregate of (i) the number of meetings of the Board of Directors held during
the period he served on the Board, and (ii) the number of meetings of committees
of the Board of Directors held during the period he served on such committees.
The only committees of the Board of Directors are the Audit Committee and
the Compensation Committee. The Board does not have a nominating or similar
committee.
Messrs. Fishkind and Korn are the current members of the Audit Committee,
which held two meetings during the 1997 fiscal year. The duties and
responsibilities of the Audit Committee include (a) recommending to the Board of
Directors the appointment of the Company's auditors and any termination of
engagement, (b) reviewing the plan and scope of audits, (c) reviewing the
Company's significant accounting policies and internal controls, (d) having
general responsibility for all related auditing matters, and (e) reporting its
recommendations and findings to the full Board of Directors.
Messrs. Fishkind and Korn are the current members of the Compensation
Committee, which held one meeting during the 1997 fiscal year. The Compensation
Committee reviews and approves the compensation of the Company's executive
officers and administers the Company's stock option plan and performance bonus
plan.
DIRECTOR COMPENSATION
The Company pays each director who is not an employee an annual retainer of
$16,000 and a $500 fee for each meeting of the Board of Directors attended. The
Company reimburses all directors for expenses incurred in connection with their
activities as directors.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the fiscal years ended October 31, 1997,
1996 and 1995, respectively, the aggregate compensation paid to the Company's
Chief Executive Officer and the four other most highly compensated officers of
the Company (the Chief Executive Officer and such other executive officers are
sometimes referred to herein as the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
NAME AND COMPENSATION
PRINCIPAL POSITION ANNUAL COMPENSATION(1) ------------
------------------ ---------------------- NUMBER
FISCAL OF OPTIONS ALL OTHER
YEAR SALARY BONUS GRANTED COMPENSATION (2)
------ -------- -------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Alec Engelstein
Chairman of the Board, 1997 $338,417 $193,750 - $ 4,700
President and Chief 1996 $279,583 $175,000 - $ 4,600
Executive Officer 1995 $266,667 $162,500 40,000 $ 1,500
Harry Engelstein 1997 $223,200 $105,000 - $ 2,775
Executive Vice President 1996 $213,500 $90,000 - $ 2,675
and Chief Construction Officer 1995 $208,333 $86,250 20,000 $ 1,500
John A. Kraynick 1997 $195,227 $105,000 - $ 6,381
Senior Vice President 1996 $174,978 $90,000 - $ 6,281
1995 $166,667 $67,500 20,000 $ 1,500
Lawrence R. Shawe 1997 $161,667 $60,000 - $ 5,936
Vice President-Sales & 1996 $199,800 $30,000 - $ 5,836
Marketing 1995 $183,067 $22,500 20,000 $ 1,500
Paul M. Leikert 1997 $147,950 $41,250 - $ 6,400
Vice President-Chief 1996 $137,250 $30,000 - $ 6,300
Accounting Officer 1995 $132,500 $22,500 10,000 $ 1,500
<FN>
- ---------------------------
(1) The column for "Other Annual Compensation" has been omitted because there
is no compensation required to be reported in such column. The aggregate
amount of perquisites and other personal benefits provided to each Named
Executive Officer is less than 10% of the total of annual salary and bonus
of such officer.
(2) Represents contributions made by the Company to the Company's 401(k) plan.
</FN>
</TABLE>
7
<PAGE>
AGGREGATED FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning unexercised
stock options held by the Named Executive Officers at the end of the 1997 fiscal
year. No stock options were exercised by any of the Named Executive Officers
during the 1997 fiscal year.
NUMBER OF UNEXERCISED
OPTIONS AT VALUE OF UNEXERCISED IN-THE-MONEY
1997 FISCAL YEAR END OPTIONS AT 1997 FISCAL YEAR END
EXERCISABLE (E) EXERCISABLE (E)
NAME UNEXERCISABLE(U) UNEXERCISABLE (U)
- ---- ----------------------- ---------------------------------
Alec Engelstein 256,000 (E) $936,000 (E)
24,000 (U) $144,000 (U)
Harry Engelstein 103,000 (E) $380,500 (E)
12,000 (U) $ 72,000 (U)
John A. Kraynick 38,000 (E) $153,000 (E)
12,000 (U) $ 72,000 (U)
Lawrence R. Shawe 38,000 (E) $153,000 (E)
12,000 (U) $ 72,000 (U)
Paul Leikert 4,000 (E) $ 24,000 (E)
6,000 (U) $ 36,000 (U)
LONG-TERM INCENTIVE AND PENSION PLANS
The Company does not have any long-term incentive or pension plans.
8
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The three primary components of the Company's executive compensation are
salary, bonus and stock options. These components are designed to facilitate
fulfillment of the compensation objectives of the Company's Board of Directors
and Compensation Committee, which objectives include (i) attracting and
retaining competent management, (ii) rewarding management for short and long
term accomplishments, (iii) aligning the interests of management with those of
the Company's shareholders, and (iv) relating management compensation to the
achievement of Company goals and the Company's performance.
Fiscal 1997 salary and bonus for the Company's executive officers were
determined and approved by the Compensation Committee of the Company's Board of
Directors in December 1996. No Stock Options were granted to any executive
officers during fiscal 1997.
The Compensation Committee's determination of fiscal 1997 salary and bonus
for the Company's executive officers other than Alec Engelstein was made after
reviewing and considering a number of factors, including each officer's level of
job responsibility, each officer's level of performance (with respect to
specific areas of responsibility and on an overall basis), achievement of
Company goals, Company performance during the 1996 fiscal year, compensation
levels at competitive companies, the Company's historical compensation levels,
and the Chief Executive Officer's recommendations regarding fiscal 1997
compensation. Although Company performance was one of the factors considered,
the Compensation Committee's decisions were based upon an overall review of the
relevant factors, and there was no specific relationship or formula by which
compensation was tied to Company performance. The Compensation Committee's
decisions were generally in accordance with the Chief Executive Officer's
recommendations.
The principal factor considered by the Compensation Committee in
determining the fiscal 1997 salary and bonus for Alec Engelstein, the Chairman
of the Board, President and Chief Executive Officer of the Company was the
analysis of the compensation of chief executive officers of public companies
within the homebuilding industry and public companies similar in size to the
Company (and it was the view of the Committee that Alec Engelstein's combined
fiscal 1997 salary and bonus was modest in comparison). The Compensation
Committee also considered the Company's fiscal 1996 earnings and other
performance measures in determining Alec Engelstein's salary and bonus, but
there was no specific relationship or formula by which Mr. Engelstein's
compensation was tied to Company performance.
Henry H. Fishkind, Pd.D.
Ronald J. Korn
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
the Company's Common Stock from October 31, 1992 through October 31, 1997, based
on the market price of Common Stock and assuming reinvestment of dividends, with
(i) the Nasdaq Stock Market index prepared by the Center for Research in
Security Prices ("CRSP"), and (ii) CRSP's index for General Building
Contractors-Residential Buildings (SIC Industry Group No. 152).
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Comparison of Cumulative Total Return
10/92 10/93 10/94 10/95 10/96 10/97
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
/bullet/ Engle Homes, Inc. 100 125.50 92.70 96.57 78.73 171.52
/square/ CRSP Index for Nasdaq Stock Market (US Companies) 100 128.80 129.60 174.50 205.90 271.00
/triangle/ CRSP Index for General Building Contractors-Residential Buildings 100 183.90 116.00 123.70 130.20 156.30
</TABLE>
Notes:
A. The lines represent annual index levels derived from compounded
daily returns that include all dividends.
B. If the annual interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
C. The index level for all series was set to 100 on 10/31/92.
10
<PAGE>
CERTAIN TRANSACTIONS
In March 1990, the Company sold twelve units in its Alhambra Court
condominium project in Orlando, Florida to Spearhead Investment Corporation,
("Spearhead"), a Florida Corporation now owned by David Shapiro, the Company's
Vice President-Finance and Chief Financial Officer. Spearhead's $420,000
commercial first mortgage was guaranteed by the Company at the time of sale.
During fiscal 1997, Spearhead sold all of its assets.
In October 1991, in connection with the Company's initial public offering,
the Company entered into a Registration Rights Agreement with the Company's
principle shareholders, Alec Engelstein, Sheila Engelstein and Harry Engelstein
(collectively, the "Engelsteins"). Under such agreement, if the Company proposes
to register any of its securities (other than in connection employee benefit
plans or under certain reclassifications, mergers, consolidations or
acquisitions), the Company will be required to include in the filing, and to use
its best efforts to register, the number of shares of Common Stock as to which
such shareholders request registration. Such registration rights are subject to
certain conditions and limitations, including the right of the Company to
reduce, pro rata the amount of Common Stock of such shareholder included in an
underwritten public offering if the managing underwriter determines that the
aggregate requested participation will adversely affect the offering or the
offering price. The Company had agreed that, upon the request of Alec Engelstein
(or his legal representative) at any time through January 1998, the Company will
register all or any portion of the Common Stock owned by the Engelsteins.
During fiscal 1997, Alec Engelstein, who owns $4,450,000 million principle
amount of the Company's 11 3/4% Senior Notes due 2000 received aggregate
interest payments of $522,875 on such notes.
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<PAGE>
PROPOSAL TO APPROVE AMENDMENTS TO
THE COMPANY'S 1991 STOCK OPTION PLAN
GENERAL
In January 1998, the Compensation Committee of the Company's Board of
Directors adopted, subject to approval by the Company's shareholders, the
following amendments to the Company's 1991 Stock Option Plan (the "1991 Plan"),
and amended and restated the 1991 Plan to reflect such amendments: (i) an
increase in the number of shares of the Company's Common Stock reserved for
issuance under the 1991 Plan from 850,000 to 1,000,000 and (ii) amendments to
conform certain administrative provisions to the requirements of Section 162 (m)
of the Internal Revenue Code of 1986, as amended. Certain material features of
the 1991 Plan are discussed below, however, such description is subject to, and
is qualified in its entirety by, the full text of the 1991 Plan, attached hereto
as Exhibit A. The bold face portions of the 1991 Plan reflect the proposed
amendments to be voted on at the Annual Meeting.
The purpose of the 1991 Plan is to provide an additional incentive to
attract and retain qualified competent persons who provide management services
and upon whose efforts and judgment the success of the Company is largely
dependent, through the encouragement of stock ownership in the Company by such
persons. In furtherance of this purpose, the 1991 Plan authorizes, among other
things, (a) the granting of incentive or nonqualified stock options to purchase
Common Stock to persons selected by the administrators of the 1991 Plan from the
class of all regular employees of the Company, including directors and officers
who are regular employees, which class presently consists of approximately 544
persons, (b) the provision of loans for the purpose of financing the exercise of
options and the amount of taxes payable in connection therewith, and (c) the use
of already owned Common Stock as payment of the exercise price for options
granted under the 1991 Plan. Consultants and advisors to the Company are also
eligible to receive options under the 1991 Plan, whether or not they are
employees of the Company.
Prior to the amendments described above, options had been granted for
606,500 of the 850,000 shares then available for issuance pursuant to options
granted under the 1991 Plan. Accordingly, the purpose of the amendment to
increase the number of shares available for issuance under the 1991 Plan is to
provide additional shares for which options can be granted and thereby allow the
Company to continue to grant additional options under the 1991 Plan in
furtherance of the 1991 Plan purposes described above.
Shareholder approval of the 1991 Plan is required (i) for purposes of
compliance with certain exclusions from the limitations of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), which are further
described below, (ii) in order for the 1991 Plan to be eligible under the "plan
lender" exemption from the margin requirements of Regulation G promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (iii)
by the rules of the Nasdaq National Market.
The 1991 Plan is to be administered by a committee designated by the
Board of Directors consisting of not less than two directors (the "Committee"),
each member of which must be a "non-employee director" as defined under Rule
16b-3 under the Exchange Act and an "outside director" for purposes of Section
162(m) of the Code. However, except as otherwise required to comply with Rule
16b-3 of the Exchange Act, or Section 162(m) of the Code, the Board may exercise
any power or authority granted to the Committee. The Compensation Committee of
the Board has been appointed as the Committee for the 1991 Plan. Among other
things, to qualify as a "non-employee director" or an "outside director," a
director must not be an employee of the Company and must not receive
compensation from the Company in any capacity other than as a director (other
than certain limited amounts within specified limitations).
Subject to the terms of the 1991 Plan, the Committee in its sole
discretion determines the persons to be awarded options, the number of shares
subject thereto and the exercise price and other terms thereof. In addition, the
Committee has full power and authority to construe and interpret the 1991 Plan,
and the acts of the Committee are final, conclusive and binding upon all
interested parties, including the Company,
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<PAGE>
its shareholders, its officers and employees, recipients of grants under the
1991 Plan, and all persons or entities claiming by or through such persons.
An aggregate of 1,000,000 shares of Common Stock (subject to adjustment
as described below) are reserved for issuance upon exercise of options granted
under the 1991 Plan. The shares acquired upon exercise of options granted under
the 1991 Plan will be authorized and issued shares of Common Stock. The
Company's shareholders will not have any preemptive rights to purchase or
subscribe for any Common Stock by reason of the reservation and issuance of
Common Stock under the 1991 Plan. If any option granted under the 1991 Plan
should expire or terminate for any reason other than having been exercised in
full, the unpurchased shares subject to that option will again be available for
purposes of the 1991 Plan.
OPTIONS GRANTED UNDER THE 1991 PLAN
In January 1992, the Compensation Committee granted nonqualified stock
options for an aggregate of 455,500 shares of Common Stock to 44 employees (24
of which employees are no longer employed by the Company and their aggregate
19,000 options have terminated in accordance with the 1991 Plan). All of such
options were granted with an exercise price of $11.50 per share and became
cumulatively exercisable at the rate of 20% on January 21 of each year,
beginning with January 21, 1993. In February 1995, the Compensation Committee
granted additional nonqualified options to 13 persons for an aggregate of
175,0000 shares of Common Stock (one of which employees is no longer employed by
the Company and his aggregate 10,000 options have terminated in accordance with
the 1991 Plan). The exercise price for such options is $9.00 per share, however,
such options are not exercisable until and unless the market price for the
Common Stock is $10.50 per share or more. Such options became cumulatively
exercisable at the rate of 20% on January 21 of each year, beginning on January
21, 1996. In addition, in January 1996, the Compensation Committee granted
additional nonqualified options to one person for 5,000 shares of Common Stock
on the same terms as the options granted in February 1995. All outstanding
options have a term of 10 years following the date of grant. The closing market
price for the Company's Common Stock on February 24, 1998 was $16.75.
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<PAGE>
The table below indicates, as of February 25, 1998, (i) the number of
options held by the persons and groups indicated, and (ii) the value of such
options as of such date:
<TABLE>
<CAPTION>
VALUE OF OPTIONS AT FEBRUARY
25, 1998(1)
NUMBER OF EXERCISABLE(E)
OPTION GRANTEES OPTIONS UNEXERCISABLE(U)
------------------------------------- ---------------------- ------------------------------
<S> <C> <C>
Alec Engelstein 280,000 $1,446,000 (E)
Chairman of the Board, $124,000 (U)
President and Chief Executive
Officer
Harry Engelstein 115,000 $591,750 (E)
Executive Vice President and $62,000 (U)
Chief Construction Officer
John A. Kraynick 50,000 $250,500 (E)
Senior Vice President $62,000 (U)
Lawrence R. Shawe 50,000 $250,500 (E)
Vice President - Sales and $62,000 (U)
Marketing
Paul M. Leikert 10,000 $46,500 (E)
Vice President - Chief $31,000 (U)
Accounting Officer
All current executive officers 525,000 $2,684,250 (E)
as a group (6 persons) $372,000 (U)
All current directors who are 0 $0 (E)
not executive officers as a $0 (U)
group (3 persons)
All employees as a group, other 81,500 $413,375 (E)
than executive officers $139,500 (U)
(538 persons)
<FN>
- -------
(1) For purposes of this table, the value of each option equals the amount,
if any, by which the closing market price of a share of Common Stock on
February 25, 1998 ($16.75) exceeds the option's exercise price. The
value is determined without regard to whether the option is currently
exercisable or not.
</FN>
</TABLE>
The Company's management believes that options granted under the 1991
Plan have been and will be awarded primarily to those persons who possess a
capacity to contribute significantly to the successful performance of the
Company. Because persons to whom grants of options are to be made are to be
determined from time to time by the Committee in its discretion, it is
impossible at this time to indicate the precise number, name or positions of
persons who will hereafter receive options or the number of shares for which
options will be granted.
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<PAGE>
CERTAIN TERMS AND CONDITIONS
All grants of options under the 1991 Plan must be evidenced by a
written agreement between the Company and the grantee. Such agreement shall
contain such terms and conditions as the Committee shall prescribe, consistent
with the 1991 Plan, including, without limitation, the exercise price, term and
any restrictions on the exercisability of the options granted.
Under the 1991 Plan, the option price per share of Common Stock may be
any price determined by the Committee; provided, however, that in no event shall
the option price of any incentive stock option be less than the fair market
value per share of Common Stock on the date of grant. For purposes of the 1991
Plan, and for so long as the Company's Common Stock is listed on the Nasdaq
National Market, the term "fair market value" means the closing price of the
Common Stock as reported on the Nasdaq National Market on the business day
immediately preceding the date of grant, unless the Committee shall determine
otherwise in a fair and uniform manner. The closing price per share of Common
Stock on February 25, 1998 as reported on the Nasdaq National Market was $16.75.
The exercise price of an option may be paid in cash, by certified or official
bank check, by money order, by delivery of already owned shares of Common Stock
having a fair market value equal to the exercise price, or by a combination of
the foregoing. The 1991 Plan also authorizes the Company to make loans to
optionees to enable them to exercise their options. If the exercise price is
paid with the optionee's promissory note, the note must (i) provide for recourse
to the optionee, (ii) bear interest at a rate no less than the prime rate of
interest of the Company's principal lender, and (iii) be secured by the shares
of Common Stock purchased. Cash payments will be used by the Company for general
corporate purposes. Payments made in Common Stock must be made by delivery of
stock certificates in negotiable form.
The use of already owned shares of Common Stock applies to payment for
the exercise of an option in a single transaction and to the "pyramiding" of
already owned shares in successive, simultaneous option exercises. In general,
pyramiding permits an option holder to start with as little as one share of
Common Stock and exercise an entire option to the extent then exercisable (no
matter what the number of shares subject thereto). By utilizing already owned
shares of Common Stock, no cash (except for fractional share adjustments) is
needed to exercise an option. Consequently, the optionee would receive Common
Stock equal in value to the spread between the fair market value of the shares
subject to the option and the exercise price of the option.
No option granted under the 1991 Plan is assignable or transferable,
other than by will or by the laws of descent and distribution. During the
lifetime of an optionee, an option is exercisable only by the optionee. The
expiration date of an option will be determined by the Committee at the time of
the grant, but in no event will an option be exercisable after the expiration of
10 years from the date of grant. An option may be exercised at any time or from
time to time or only after a period of time or in installments, as the Committee
determines. The Committee may in its sole discretion accelerate the date on
which any option may be exercised. Each outstanding option will automatically
become exercisable in the event of certain transactions, including certain
changes in control of the Company, certain mergers and reorganizations, and
certain dispositions of substantially all the Company's assets.
The unexercised portion of any option granted under the 1991 Plan shall
automatically be terminated (a) on the date on which the optionee's employment
is terminated (or three months after the date of termination in the case of
incentive stock options) for any reason other than (i) cause (as defined in the
1991 Plan), (ii) mental or physical disability, or (iii) death; (b) immediately
upon the termination of the optionee's employment for cause; (c) one year after
the date on which the optionee's employment is terminated by reason of mental or
physical disability; or (d) twelve months after the date on which the optionee's
employment is terminated by reason of the optionee's death, or three months
after the date of the optionee's death if death occurs during the one year
period following the termination of the optionee's employment by reason of
mental or physical disability.
To prevent dilution of the rights of a holder of an option, the 1991
Plan provides for appropriate adjustment of the number of shares for which
options may be granted, the number of shares subject to outstanding options and
the exercise price of outstanding options, in the event of any increase or
decrease
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<PAGE>
in the number of issued and outstanding shares of the Company's capital
stock resulting from a stock dividend, recapitalization or other capital
adjustment of the Company. The Committee has discretion to make appropriate
antidilution adjustments to outstanding options in the event of a merger,
consolidation or other reorganization of the Company or a sale or other
disposition of substantially all the Company's assets.
The Company believes that the 1991 Plan satisfies the requirements of
Section 162(m) of the Code. Section 162(m) of the Code can limit the
deductibility of compensation expense over $1.0 million with respect to
compensation of certain top executives in certain circumstances.
The 1991 Plan will expire on October 7, 2001, and any option
outstanding on such date will remain outstanding until it expires or is
exercised. The Committee may amend the 1991 Plan or any option at any time,
provided that such amendment may not adversely affect the rights of an optionee
under an outstanding option without the optionee's consent. In addition, no such
amendment may, without approval of the Company's shareholders (a) materially
increase the benefits accruing to participants under the 1991 Plan, (b)
materially increase the number of shares of Common Stock reserved for issuance
under the 1991 Plan, or (c) materially modify the requirements for eligibility
to receive options under the 1991 Plan.
FEDERAL INCOME TAX CONSEQUENCES
The 1991 Plan is not qualified under the provisions of Section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), nor is it subject
to any of the provisions of the Employee Retirement Income Security Act of 1974,
as amended.
NONQUALIFIED STOCK OPTIONS. An optionee granted a nonqualified stock
option under the 1991 Plan will generally recognize, at the date of exercise of
such option, ordinary income equal to the difference between the exercise price
and the fair market value of the shares of Common Stock subject to the
nonqualified stock option. This taxable ordinary income will be subject to
Federal income tax withholding, and the Company will be entitled to a deduction
for Federal income tax purposes equal to the amount of ordinary income
recognized by the optionee, provided that such amount constitutes an ordinary
and necessary business expense to the Company and is reasonable and either the
employee includes that amount in his income or the Company timely satisfies its
reporting requirements with respect to that amount.
If an optionee exercises a nonqualified stock option by delivering
shares of the Company's Common Stock, the optionee will not recognize gain or
loss with respect to the exchange of such shares, even if their then fair market
value is different from the optionee's tax basis. The optionee, however, will be
taxed as described above with respect to the exercise of the nonqualified stock
option as if he had paid the exercise price in cash, and the Company likewise
generally will be entitled to an equivalent tax deduction. Provided a separate
identifiable stock certificate is issued therefor, the optionee's tax basis in
that number of shares received on such exercise which is equal to the number of
shares surrendered on such exercise will be equal to his tax basis in the shares
surrendered, and his holding period for such number of shares received will
include his holding period for the shares surrendered. The optionee's tax basis
and holding period for the additional shares received on exercise of a
nonqualified stock option paid for, in whole or in part, with shares will be the
same as if the optionee had exercised the nonqualified stock option solely for
cash.
INCENTIVE STOCK OPTIONS. The 1991 Plan provides for the grant of stock
options that qualify as "incentive stock options" as defined in Section 422 of
the Code. Under the Code, an optionee generally is not subject to ordinary
income tax upon the grant or exercise of an incentive stock option. However, an
employee who exercises an incentive stock option by delivering shares of common
stock previously acquired pursuant to the exercise of an incentive stock option
is treated as making a "Disqualifying Disposition" (as defined below) of such
shares if the employee delivers such shares before the expiration of the holding
period applicable to such shares. The applicable holding period is the longer of
two years from the date of grant or one year from the date of exercise. The
effect of this provision is to prevent "pyramiding" the exercise of an incentive
stock option (i.e., the exercise of the incentive stock option for
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<PAGE>
one share and the use of that share to make successive exercises of the
incentive stock option until it is completely exercised) without the imposition
of current income tax.
If, subsequent to the exercise of an incentive stock option (whether
paid for in cash or in shares), the optionee holds the shares received upon
exercise for a period that exceeds (a) two years from the date such incentive
stock option was granted or, if later, (b) one year from the date of exercise
(the "Required Holding Period"), the difference (if any) between the amount
realized from the sale of such shares and their tax basis to the holder will be
taxed as long-term capital gain or loss.
In general, if, after exercising an incentive stock option, an employee
disposes of the shares so acquired before the end of the Required Holding Period
(a "Disqualifying Disposition"), such optionee would be deemed in receipt of
ordinary income in the year of the Disqualifying Disposition in an amount equal
to the excess of the fair market value of the shares at the date the incentive
stock option was exercised over the exercise price. If the Disqualifying
Disposition is a sale or exchange that would permit a loss to be recognized
under the Code (were a loss in fact to be sustained), and the sales proceeds are
less than the fair market value of the shares on the date of exercise, the
optionee's ordinary income would be limited to the gain (if any) from the sale.
If the amount realized upon disposition exceeds the fair market value of the
shares on the date of exercise, the excess would be treated as short-term or
long-term capital gain, depending on whether the holding period for such shares
exceeded one year.
The amount by which the fair market value of the shares of Common Stock
acquired pursuant to the exercise of an incentive stock option exceeds the
exercise price of such shares under such option generally will be treated as an
item of adjustment included in the optionee's alternative minimum taxable income
for purposes of the alternative minimum tax for the year in which the option is
exercised. If, however, there is a Disqualifying Disposition of the shares in
the year in which the option is exercised, there will be no item of adjustment
for purposes of the alternative minimum tax as a result of the exercise of the
option with respect to those shares. If there is a Disqualifying Disposition in
a year after the year of exercise, the income on the Disqualifying Disposition
will not be considered income for purposes of the alternative minimum tax in
that subsequent year. The optionee's tax basis for shares acquired pursuant to
the exercise of an incentive stock option will be increased for purposes of
determining his alternative minimum tax by the amount of the item of adjustment
recognized with respect to such shares in the year the option was exercised.
Only employees of the Company or its subsidiaries qualify for the tax
treatment applicable to incentive stock options. Thus, optionees who are
non-employee advisors or consultants to the Company will be taxed solely under
the rules applicable to nonqualified stock options.
An income tax deduction is not allowed to the Company with respect to
the grant or exercise of an incentive stock option or the disposition, after the
Required Holding Period, of shares acquired upon exercise. In the event of a
Disqualifying Disposition, a Federal income tax deduction will be allowed to the
Company in an amount equal to the ordinary income to be recognized by the
optionee, provided that such amount constitutes an ordinary and necessary
business expense to the Company and is reasonable, and either the employee
includes that amount in his income or the Company timely satisfies its reporting
requirements with respect to that amount.
SECURITIES ACT REGISTRATION
The Company intends to register the additional shares of Common Stock
available for issuance under the 1991 Plan pursuant to a Registration Statement
on Form S-8 filed with the SEC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THIS
PROPOSAL TO AMEND THE COMPANY'S 1991 STOCK OPTION PLAN.
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<PAGE>
PROPOSAL TO APPROVE THE COMPANY'S
1997 PERFORMANCE BONUS PLAN
(AS AMENDED AND RESTATED)
GENERAL
In January 1998, the Company's Board of Directors adopted, subject to
approval by the Company's shareholders, an Amended and Restated 1997 Performance
Bonus Plan (the "1997 Plan") and recommended that it be submitted to the
Company's shareholders for their approval at the Annual Meeting. The terms of
the 1997 Plan provide for grants of performance or annual incentive awards that
may be settled in cash, stock or other property (collectively, "Awards"). The
purpose of the 1997 Plan is to provide performance based bonus incentives to
certain executives and employees of the Company who qualify and are selected as
participants thereunder. Certain material features of the 1997 Plan are
discussed below, however, such description is subject to, and is qualified in
its entirety by, the full text of the 1997 Plan, attached hereto as Exhibit B.
Shareholder approval of the 1997 Plan is required (i) for purposes of
compliance with certain exclusions from the limitations of Section 162(m) of the
Code, which are further described below, (ii) in order for the 1997 Plan to be
eligible under the "plan lender" exemption from the margin requirements of
Regulation G promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and (iii) by the rules of the Nasdaq National Market. The
Company believes that the 1997 Plan satisfies the requirements of Section 162(m)
of the Code. Section 162(m) of the Code can limit the deductibility of
compensation expense over $1.0 million with respect to compensation of certain
top executives in certain circumstances.
SHARES AVAILABLE FOR AWARDS; ANNUAL PER-PERSON LIMITATIONS
Under the 1997 Plan, the total number of shares of Common Stock that
may be subject to the granting of Awards under the 1997 Plan shall not exceed
250,000 shares, plus the number of shares that are surrendered in payment of any
Awards or any tax withholding requirements.
In addition, the 1997 Plan imposes individual limitations on the amount
of certain Awards in part to comply with Code Section 162(m). Under these
limitations, during any fiscal year no participant who is a "covered employees"
(as defined below) may receive an Award having a value in excess of $400,000.
ELIGIBILITY
The persons eligible to be selected for receipt of Awards under the
1997 Plan are the officers, directors, employees and independent contractors of
the Company and its subsidiaries. Presently, approximately 544 persons are
eligible to participate in the 1997 Plan.
ADMINISTRATION
The 1997 Plan is to be administered by a committee designated by the
Board of Directors consisting of not less than two directors (the "Committee"),
each member of which must be a "non-employee director" as defined under Rule
16b-3 under the Exchange Act and an "outside director" for purposes of Section
162(m) of the Code. However, except as otherwise required to comply with Rule
16b-3 of the Exchange Act, or Section 162(m) of the Code, the Board may exercise
any power or authority granted to the Committee. The Compensation Committee of
the Board has been appointed as the Committee for the 1997 Plan. Among other
things, to qualify as a "non-employee director" or an "outside director," a
director must not be an employee of the Company and must not receive
compensation from the Company in any capacity other than as a director (other
than certain limited amounts within specified limitations). Subject to the terms
of the 1997 Plan, the Committee or the Board is authorized to select
18
<PAGE>
eligible persons to receive Awards, determine the type and number of Awards to
be granted and the number of shares of Common Stock and/or the amount of cash or
other property to which Awards will relate, specify times at which Awards will
be exercisable or settleable (including performance conditions that may be
required as a condition thereof), set other terms and conditions of Awards,
prescribe forms of Award agreements, interpret and specify rules and regulations
relating to the 1997 Plan, and make all other determinations that may be
necessary or advisable for the administration of the 1997 Plan.
BONUS AND PERFORMANCE AWARDS
The right of a participant to receive a grant or settlement of an
Award, and the timing thereof, may be subject to such performance conditions
(including subjective individual goals) as may be specified by the Committee or
the Board. However, performance Awards granted to persons whom the Committee
expects will, for the year in which a deduction arises, be "covered employees"
(as defined below) will, if and to the extent intended by the Committee, be
subject to provisions that should qualify such performance Awards as
"performance-based compensation" not subject to the limitation on tax
deductibility by the Company under Code Section 162(m). For purposes of Section
162(m), the term "covered employee" means the Company's chief executive officer
and each other person whose compensation is required to be disclosed in the
Company's filings with the Securities and Exchange Commission (the "SEC") by
reason of that person being among the four highest compensated officers of the
Company as of the end of a taxable year. If and to the extent required under
Section 162(m) of the Code, any power or authority relating to a performance
Award or annual incentive Award intended to qualify under Section 162(m) of the
Code is to be exercised by the Committee and not the Board.
Subject to the requirements of the 1997 Plan, the Committee or the
Board will determine performance Award terms, including the required levels of
performance with respect to specified business criteria, the corresponding
amounts payable upon achievement of such levels of performance, termination and
forfeiture provisions and the form of settlement. In granting performance
Awards, the Committee or the Board may establish unfunded award "pools," the
amounts of which will be based upon the achievement of a performance goal or
goals based on one or more of certain business criteria described in the 1997
Plan (including, for example, total stockholder return, net income, pretax
earnings, EBITDA, earnings per share, and return on investment). Not later than
90 days after the beginning of a performance period for covered employees, the
Committee or the Board will determine the performance goals for covered
employees who will potentially receive performance Awards for that performance
period, either out of the pool or otherwise.
After the end of each performance period, the Committee or the Board
will determine (i) the amount of any pools and the maximum amount of potential
performance Awards payable to each participant in the pools and (ii) the amount
of any other potential performance Awards payable to participants in the 1997
Plan. Unless subject to a written commitment for an Award, the Committee or the
Board may, in its discretion, determine that the amount payable as a performance
Award will be reduced (or increased, in the case of participants that are not
covered employees) from the amount of any potential Award.
OTHER TERMS OF AWARDS
Awards may be settled in the form of cash, shares of Common Stock,
other Awards or other property, in the discretion of the Committee or the Board.
The Committee or the Board is authorized to place cash, shares of Common Stock
or other property in trusts or make other arrangements to provide for payment of
the Company's obligations under the 1997 Plan. The Committee or the Board may
condition any payment relating to an Award on the withholding of taxes and may
provide that a portion of any shares of Common Stock or other property to be
distributed will be withheld (or previously acquired shares of Common Stock or
other property be surrendered by the participant) to satisfy withholding and
other tax obligations. Awards granted under the 1997 Plan generally may not be
pledged or otherwise encumbered and are not transferable except by will or by
the laws of descent and distribution, or to a designated
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<PAGE>
beneficiary upon the participant's death, except that the Committee or the Board
may, in its discretion, permit transfers for estate planning or other purposes
subject to any applicable restrictions under Rule 16b-3.
Awards under the 1997 Plan are generally granted without a requirement
that the participant pay consideration in the form of cash or property for the
grant, except to the extent required by law. The Committee or the Board may,
however, grant Awards in exchange for other Awards under the 1997 Plan, awards
under other Company plans, or other rights to payment from the Company, and may
grant Awards in addition to and in tandem with such other Awards, rights or
other awards.
AWARDS TO BE GRANTED UNDER THE 1997 PLAN
Prior to being amended and restated, the terms of the 1997 Plan
provided for grants of Awards only to non-executive employees of the Company.
Pursuant thereto, a total of 5,226 shares of Common Stock have been granted as
Awards to certain non-executive employees. The Company's management believes
that Awards granted under the 1997 Plan have been and will be awarded primarily
to those persons who possess a capacity to contribute significantly to the
successful performance of the Company. Because persons to whom grants of Awards
are to be made are to be determined from time to time by the Committee in its
discretion, it is impossible at this time to indicate the precise number, name
or positions of persons who will hereafter receive Awards or the number of
shares for which Awards will be granted.
AMENDMENT AND TERMINATION
The Board of Directors may amend, alter, suspend, discontinue or
terminate the 1997 Plan or the Committee's authority to grant Awards without
further stockholder approval, except stockholder approval may be obtained for
certain amendments or alterations if such approval is required by law or
regulation (including Section 162(m) of the Code) or under the rules of any
stock exchange or quotation system on which shares of Common Stock are then
listed or quoted. Thus, stockholder approval may not necessarily be required for
every amendment to the 1997 Plan which might increase the cost of the 1997 Plan
or alter the eligibility of persons to receive Awards. Stockholder approval will
not be deemed to be required under laws or regulations that condition favorable
treatment of participants on such approval, although the Board may, in its
discretion, seek stockholder approval in any circumstance in which it deems such
approval advisable. Unless earlier terminated by the Board, the 1997 Plan will
terminate on January 1, 2008.
SECURITIES ACT REGISTRATION
The Company intends to register the shares of Common Stock available
for Awards under the 1997 Plan pursuant to a Registration Statement on Form S-8
filed with the SEC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL
TO APPROVE AND RATIFY THE 1997 PERFORMANCE BONUS PLAN.
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RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of BDO Seidman, LLP independent public accountants, served as the
Company's independent public accountants for the fiscal year ended October 31,
1997. The Board of Directors, on the recommendation of the Company's Audit
Committee, has selected BDO Seidman, LLP as the Company's independent public
accountants for the current fiscal year ending October 31, 1998. One or more of
the representatives of BDO Seidman are expected to be present at the Annual
Meeting, will have the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions from
shareholders.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the Annual
Meeting, the persons named in the accompanying proxy will vote proxies as in
their discretion they may deem appropriate, unless they are directed by a proxy
to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a shareholder intending to present a proposal to be included in the
Company's proxy statement for the Company's 1999 Annual Meeting of Shareholders
must deliver a proposal in writing to the Company's principal executive offices
no later than November 16, 1998.
By Order of The Board of Directors
/s/ ALEC ENGLESTEIN
---------------------------
ALEC ENGELSTEIN
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Boca Raton, Florida
February 27, 1998
21
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EXHIBIT A
---------------------------
ENGLE HOMES, INC.
THIRD AMENDED AND RESTATED
1991 STOCK OPTION PLAN
---------------------------
PURPOSE. The purpose of this Plan is to advance the interests of ENGLE
HOMES, INC., a Florida corporation (the "Company"), and its Subsidiaries by
providing an additional incentive to attract and retain qualified and competent
persons who provide management services and upon whose efforts and judgment the
success of the Company and its Subsidiaries is largely dependent, through the
encouragement of stock ownership in the Company by such persons.
1. DEFINITIONS. As used herein, the following terms shall have the
meaning indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Committee" shall mean the committee appointed by the Board
pursuant to Section 12(a) hereof.
(c) "Director" shall mean a member of the Board.
(d) "Fair Market Value" of a Share on any date of reference shall be
the Closing Price of the Common Stock, par value $0.01 per share, of the Company
(the "Common Stock"), on the business day immediately preceding such date,
unless the Committee or the Board in its sole discretion shall determine
otherwise in a fair and uniform manner. For this purpose, the Closing Price of
the Common Stock on any business day shall be (i) if the Common Stock is listed
or admitted for trading on any United States national securities exchange, or if
actual transactions are otherwise reported on a consolidated transaction
reporting system, the last reported sale price of Common Stock on such exchange
or reporting system, as reported in any newspaper of general circulation, (ii)
if the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in common use, the mean between
the closing high bid and low asked quotations for such day of Common Stock on
such system, or (iii) if neither clause (i) or (ii) is applicable, the mean
between the high bid and low asked quotations for the Common Stock as reported
by the National Quotation Bureau, Incorporated if at least two securities
dealers have inserted both bid and asked quotations for Common Stock on at least
five of the ten preceding days.
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(e) "Incentive Stock Option" shall mean an incentive stock option as
defined in Section 422 of the Internal Revenue Code.
(f) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(g) "Non-Statutory Stock Option" shall mean an Option which is not an
Incentive Stock Option.
(h) "Officer" shall mean the Company's president, principal financial
officer, principal accounting officer (or, if there is no such accounting
officer, the controller), any vice-president of the Company in charge of a
principal business unit, division or function (such as sales, administration or
finance), any other officer who performs a policy-making function, or any other
person who performs similar policy-making functions for the Company. Officers of
Subsidiaries shall be deemed Officers of the Company if they perform such
policy-making functions for the Company. As used in this paragraph, the phase
"policy-making function" does not include policy-making functions that are not
significant. If pursuant to Item 401(b) of Regulation S-K (17 C.F.R. ss.
229.401(b)) the Company identifies a person as an "executive officer," the
person so identified shall be deemed an "Officer" even though such person may
not otherwise be an "Officer" pursuant to the foregoing provisions of this
paragraph.
(i) "Option" (when capitalized) shall mean any option granted under
this Plan.
(j) "Optionee" shall mean a person to whom a stock option is granted
under this Plan or any person who succeeds to the rights of such person under
this Plan by reason of the death of such person. An optionee may be an
individual, partnership, corporation or any other type of entity.
(k) "OUTSIDE DIRECTOR" SHALL MEAN A MEMBER OF THE BOARD WHO QUALIFIES
AS AN "OUTSIDE DIRECTOR" UNDER SECTION 162(M) OF THE INTERNAL REVENUE CODE AND
THE REGULATIONS THEREUNDER AND AS A "NON-EMPLOYEE DIRECTOR" UNDER RULE 16B-3
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT.
(l) "Plan" shall mean this Stock Option Plan for the Company.
(m) "Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(n) "Share(s)" shall mean a share or shares of the Common Stock.
(o) "Subsidiary" shall mean any corporation (other than the Company)
in any unbroken chain of corporations beginning with the Company if, at the time
of the granting of
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the Option, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50 percent or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
2. SHARES AND OPTIONS. The Company may grant to Optionees from time to
time Options to purchase an aggregate of up to ONE MILLION (1,000,000) Shares
from Shares held in the Company's treasury or from authorized and unissued
Shares. If any Option granted under the Plan shall terminate, expire, or be
cancelled or surrendered as to any Shares, new Options may thereafter be granted
covering such Shares. An Option granted hereunder shall be either an Incentive
Stock Option or a Non-Statutory Stock Option as determined by the Committee or
the Board at the time of grant of such Option and shall clearly state whether it
is an Incentive Stock Option or Non-Statutory Stock Option. All Incentive Stock
Options shall be granted within 10 years from the effective date of this Plan.
3. DOLLAR LIMITATION. Options otherwise qualifying as Incentive Stock
Options hereunder will not be treated as Incentive Stock Options to the extent
that the aggregate fair market value (determined at the time the Option is
granted) of the Shares, with respect to which Options meeting the requirements
of Internal Revenue Code Section 422(b) are exercisable for the first time by
any individual during any calendar year (under all plans of the Company and its
parent and subsidiary corporations), exceeds $100,000.00.
4. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option agreement that may
contain any term deemed necessary or desirable by the Committee or the Board,
provided such terms are not inconsistent with this Plan or any applicable law.
Optionees shall be those persons selected by the Committee or the Board from the
class of all regular employees of the Company or its Subsidiaries, including
Directors and Officers who are regular employees, and any consultant or advisor
to the Company whether or not an employee. Any person who files with the
Committee, in a form satisfactory to the Committee or the Board, a written
waiver of eligibility to receive any Option under this Plan shall not be
eligible to receive any Option under this Plan for the duration of such waiver.
(b) In granting Options, the Committee or the Board shall take into
consideration the contribution the person has made to the success of the Company
or its Subsidiaries and such other factors as the Committee or the Board shall
determine. The Committee or the Board shall also have the authority to consult
with and receive recommendations from officers and other personnel of the
Company and its Subsidiaries with regard to these matters. The Committee or the
Board may from time to time in granting Options under the Plan prescribe such
other terms and conditions concerning such Options as it deems appropriate,
including, without limitation, (i) prescribing the date or dates on which the
Option becomes exercisable, (ii) providing that the Option rights accrue or
become exercisable in installments over a period of years, or upon the
attainment of stated goals or both, or (iii) relating
A-3
<PAGE>
an Option to the continued employment of the Optionee for a specified period of
time, provided that such terms and conditions are not more favorable to an
Optionee than those expressly permitted herein.
(c) The Options granted to employees under this Plan shall be in
addition to regular salaries, pension, life insurance or other benefits related
to their employment with the Company or its Subsidiaries. Neither the Plan nor
any Option granted under the Plan shall confer upon any person any right to
employment or continuance of employment by the Company or its Subsidiaries.
(d) Notwithstanding any other provision of the Plan, and in addition
to any other requirements of the Plan, Options may not be granted to a Director
or Officer unless the grant of such Options is authorized by, and all of the
terms of such Options are determined by, a Committee that is appointed in
accordance with Section 13 of this Plan and all of whose members are OUTSIDE
DIRECTORS.
(e) Notwithstanding any other provision of this Plan, and in addition
to any other requirements of this Plan, the aggregate number of Shares subject
to Options granted to any person may not at any time exceed 50% of the total
number of Shares available for issuance pursuant to Options granted under the
Plan.
5. OPTION PRICE. The option price per Share of any Option shall be any
price determined by the Committee or the Board; provided, however, that in no
event shall the option price per Share of any Incentive Stock Option be less
than the Fair Market Value of the Shares underlying such Option on the date such
Option is granted.
6. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i) the
Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii) arrangements
that are satisfactory to the Committee or the Board in its sole discretion have
been made for the Optionee's payment to the Company of the amount that is
necessary for the Company or Subsidiary employing the Optionee to withhold in
accordance with applicable Federal or state tax withholding requirements. Unless
further limited by the Committee or the Board in any Option, the option price of
any Shares purchased shall be paid in cash, by certified or official bank check,
by money order, with Shares or by a combination of the above; provided further,
however, that the Committee or the Board in its sole discretion may accept a
personal check in full or partial payment of any Shares. If the exercise price
is paid in
A-4
<PAGE>
whole or in part with Shares, the value of the Shares surrendered shall be their
Fair Market Value on the date the Option is exercised. The Company in its sole
discretion may, on an individual basis or pursuant to a general program
established in connection with this Plan, lend money to an Optionee, guarantee a
loan to an Optionee, or otherwise assist an Optionee to obtain the cash
necessary to exercise all or a portion of an Option granted hereunder or to pay
any tax liability of the Optionee attributable to such exercise. If the exercise
price is paid in whole or part with Optionee's promissory note, such note shall
(i) provide for full recourse to the maker, (ii) be collateralized by the pledge
of the Shares that the Optionee purchases upon exercise of such Option, (iii)
bear interest at the prime rate of the Company's principal lender, and (iv)
contain such other terms as the Board in its sole discretion shall reasonably
require. No Optionee shall be deemed to be a holder of any Shares subject to an
Option unless and until a stock certificate or certificates for such Shares are
issued to such person(s) under the terms of the Plan. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as expressly provided
in Section 10 hereof.
7. EXERCISABILITY OF OPTIONS. Any Option shall become exercisable in
such amounts, at such intervals and upon such terms as the Committee or the
Board shall provide in such Option, except as otherwise provided in this Section
8.
(a) The expiration date of an Option shall be determined by the
Committee or the Board at the time of grant, but in no event shall an Option be
exercisable after the expiration of 10 years from the date of grant of the
Option.
(b) Unless otherwise provided in any Option, each outstanding Option
shall become immediately fully exercisable:
(i) if there occurs any transaction (which shall include a series
of transactions occurring within 60 days or occurring pursuant to a plan), that
has the result that stockholders of the Company immediately before such
transaction cease to own at least 51 percent of the voting stock of the Company
or of any entity that results from the participation of the Company in a
reorganization, consolidation, merger, liquidation or any other form of
corporate transaction;
(ii) if the shareholders of the Company shall approve a plan of
merger, consolidation, reorganization, liquidation or dissolution in which the
Company does not survive (unless the approved merger, consolidation,
reorganization, liquidation or dissolution is subsequently abandoned); or
(iii) if the shareholders of the Company shall approve a plan for
the sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Company (unless such plan is subsequently abandoned).
(c) The Committee or the Board may in its sole discretion accelerate
the date on which any Option may be exercised and may accelerate the vesting of
any Shares subject to any Option or previously acquired by the exercise of any
Option.
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<PAGE>
8. TERMINATION OF OPTION PERIOD.
(a) The unexercised portion of any Option shall automatically and
without notice terminate and become null and void at the time of the earliest to
occur of the following:
(i) unless otherwise provided in the applicable option agreement,
three months after the date on which the Optionee's employment (or other service
relationship to the Company if not an employee) is terminated or, in the case of
a Non-Statutory Stock Option, and unless the Committee or the Board shall
otherwise determine in writing in its sole discretion, the date on which the
Optionee's employment (or other service relationship to the Company if not an
employee) is terminated, in either case for any reason other than by reason of
(A) Cause, which, solely for purposes of this Plan, shall mean the termination
of the Optionee's employment (or other service relationship to the Company if
not an employee) by reason of the Optionee's willful misconduct or gross
negligence, (B) a mental or physical disability as determined by a medical
doctor satisfactory to the Committee or the Board, or (C) death;
(ii) immediately upon the termination of the Optionee's
employment (or other service relationship to the Company if not an employee) for
Cause;
(iii) one year after the date on which the Optionee's employment
(or other service relationship to the Company if not an employee) is terminated
by reason of a mental or physical disability (within the meaning of Internal
Revenue Code Section 22(e)) as determined by a medical doctor satisfactory to
the Committee or the Board;
(iv) (A) twelve months after the date of termination of the
Optionee's employment (or other service relationship to the Company if not an
employee) by reason of death of the employee, or (B) three months after the date
on which the Optionee shall die if such death shall occur during the one year
period specified in Subsection 9(a)(iii) hereof.
(b) The Committee or the Board in its sole discretion may by giving
written notice ("cancellation notice") cancel, effective upon the date of the
consummation of any corporate transaction described in Subsections 8(b)(ii) or
(iii) hereof, any Option that remains unexercised on such date. Such
cancellation notice shall be given a reasonable period of time prior to the
proposed date of such cancellation and may be given either before or after
approval of such corporate transaction.
9. ADJUSTMENT OF SHARES.
(a) If at any time while the Plan is in effect or unexercised Options
are outstanding, there shall be any increase or decrease in the number of issued
and outstanding Shares through the declaration of a stock dividend or through
any recapitalization resulting in a stock split-up, combination or exchange of
Shares, then and in such event:
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<PAGE>
(i) appropriate adjustment shall be made in the maximum number of
Shares available for grant under the Plan, so that the same percentage of the
Company's issued and outstanding Shares shall continue to be subject to being so
optioned; and
(ii) appropriate adjustment shall be made in the number of Shares
and the exercise price per Share thereof then subject to any outstanding Option,
so that the same percentage of the Company's issued and outstanding Shares shall
remain subject to purchase at the same aggregate exercise price.
(b) Subject to the specific terms of any Option, the Committee or the
Board may change the terms of Options outstanding under this Plan, with respect
to the option price or the number of Shares subject to the Options, or both,
when, in the Committee's or the Board's sole discretion, such adjustments become
appropriate by reason of a corporate transaction described in Subsections
8(b)(ii) or (iii) hereof.
(c) Except as otherwise expressly provided herein, the issuance by
the Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection with
direct sale or upon the exercise of rights or warrants to subscribe therefor, or
upon conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to the number of or exercise price of Shares
then subject to outstanding Options granted under the Plan.
(d) Without limiting the generality of the foregoing, the existence
of outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
10. TRANSFERABILITY OF OPTIONS. Each Option shall provide that such
Option shall not be transferable by the Optionee otherwise than by will or the
laws of descent and distribution, and each Option shall be exercisable during
the Optionee's lifetime only by the Optionee.
11. ISSUANCE OF SHARES. As a condition of any sale or issuance of Shares
upon exercise of any Option, the Committee or the Board may require such
agreements or undertakings, if any, as the Committee or the Board may deem
necessary or advisable to assure compliance with any such law or regulation
including, but not limited to, the following:
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<PAGE>
(i) a representation and warranty by the Optionee to the Company,
at the time any Option is exercised, that he is acquiring the Shares to be
issued to him for investment and not with a view to, or for sale in connection
with, the distribution of any such Shares; and
(ii) a representation, warranty and/or agreement to be bound by
any legends that are, in the opinion of the Committee or the Board, necessary or
appropriate to comply with the provisions of any securities law deemed by the
Committee or the Board to be applicable to the issuance of the Shares and are
endorsed upon the Share certificates.
12. ADMINISTRATION OF THE PLAN.
(a) THE PLAN SHALL BE ADMINISTERED BY THE BOARD OR BY A COMMITTEE
APPOINTED BY THE BOARD (THE "COMMITTEE") WHICH SHALL BE COMPOSED OF TWO OR MORE
DIRECTORS ALL OF WHOM SHALL BE OUTSIDE DIRECTORS. THE MEMBERSHIP OF THE
COMMITTEE SHALL BE CONSTITUTED SO AS TO COMPLY AT ALL TIMES WITH THE APPLICABLE
REQUIREMENTS OF RULE 16B-3 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT AND
SECTION 162(M) OF THE INTERNAL REVENUE CODE. THE COMMITTEE SHALL SERVE AT THE
PLEASURE OF THE BOARD AND SHALL HAVE THE POWERS DESIGNATED HEREIN AND SUCH OTHER
POWERS AS THE BOARD MAY FROM TIME TO TIME CONFER UPON IT.
(b) The Committee or the Board, from time to time, may adopt rules
and regulations for carrying out the purposes of the Plan. The determinations by
the Committee or the Board, and the interpretation and construction of any
provision of the Plan or any Option by the Committee or the Board shall be final
and conclusive.
(c) Any and all decisions or determinations of the Committee shall
be made either (i) by a majority vote of the members of the Committee at a
meeting or (ii) without a meeting by the unanimous written approval of the
members of the Committee.
13. OPTIONS FOR 10% SHAREHOLDERS. Notwithstanding any other provisions
of the Plan to the contrary, an Incentive Stock Option shall not be granted to
any person owning directly or indirectly (through attribution under Section
424(d) of the Internal Revenue Code) at the date of grant, stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company (or of its parent or subsidiary [as defined in Section 424 of the
Internal Revenue Code] at the date of grant) unless the option price of such
Option is at least 110% of the Fair Market Value of the Shares subject to such
Option on the date the Option is granted, and such Option by its terms is not
exercisable after the expiration of five years from the date such Option is
granted.
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14. INTERPRETATION.
(a) The Plan shall be administered and interpreted so that all
Incentive Stock Options granted under the Plan will qualify as Incentive Stock
Options under section 422 of the Internal Revenue Code. If any provision of the
Plan should be held invalid for the granting of Incentive Stock Options or
illegal for any reason, such determination shall not affect the remaining
provisions hereof, but instead the Plan shall be construed and enforced as if
such provision had never been included in the Plan.
(b) This Plan shall be governed by the laws of the State of Florida.
(c) Headings contained in this Agreement are for convenience only
and shall in no manner be construed as part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.
15. AMENDMENT AND DISCONTINUATION OF THE PLAN. The Committee may from
time to time amend the Plan or any Option; provided, however, that, except to
the extent provided in Section 10, no such amendment may, without approval by
the shareholders of the Company, (a) materially increase the benefits accruing
to participants under the Plan, (b) materially increase the number of securities
which may be issued under the Plan, or (c) materially modify the requirements as
to eligibility for participation in the Plan; and provided further, that, except
to the extent provided in Section 9, no amendment or suspension of the Plan or
any Option issued hereunder shall substantially impair any Option previously
granted to any Optionee without the consent of such Optionee.
16. EFFECTIVE DATE AND TERMINATION DATE. The effective date of the Plan
is the date on which the Board adopts this Plan, and the Plan shall terminate on
the 10th anniversary of the effective date.
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<PAGE>
EXHIBIT B
---------------------------
ENGLE HOMES, INC.
1997 PERFORMANCE BONUS PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1998)
-------------------------------------
1. PURPOSE. The purpose of this Plan is to advance the interests of
ENGLE HOMES, INC., a Florida corporation (the "Company"), and its Subsidiaries
by providing performance based bonus incentives to certain executives and
employees of the Company who qualify and are selected as Participants hereunder.
2. DEFINITIONS. As used herein, the following terms shall have the
meaning indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Bonus Award" shall mean an award granted pursuant to Article 4
hereof.
(c) "Bonus Formula" means the specific objective goal or goals and/or
applicable formula(s) for determining the amount of a Bonus Award and the form
of payment thereof (cash and/or Shares, etc.) that are from time to time
determined and set in writing by the Committee for the applicable Performance
Period(s).
(d) "Committee" shall mean the committee appointed by the Board
pursuant to Section 3.1 hereof.
(e) "Covered Employee" shall mean an Eligible Person who is a Covered
Employee as specified in subsection 4.3.9 hereof.
(f) "Eligible Person" means each Executive Officer of the Company (as
defined under the Exchange Act) and other officers, Directors and employees of
the Company or of any Subsidiary, and independent contractors with the Company
or any Subsidiary.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "Fair Market Value" of a Share on any date of reference shall be
the average Closing Price of the Common Stock, par value $0.01 per share, of the
Company (the
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"Common Stock"), on the last ten (10) trading days of the Performance Period,
unless the Committee or the Board in its sole discretion shall determine
otherwise in a fair and uniform manner. For this purpose, the Closing Price of
the Common Stock on any business day shall be (i) if the Common Stock is listed
or admitted for trading on any United States national securities exchange, or if
actual transactions are otherwise reported on a consolidated transaction
reporting system (including NASDAQ), the last reported sale price of Common
Stock on such exchange or reporting system, as reported in any newspaper of
general circulation, (ii) if actual sale prices are not so reported, and the
Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in common use, the mean between
the closing high bid and low asked quotations for such day of Common Stock on
such system, or (iii) if neither clause (i) or (ii) is applicable, the mean
between the high bid and low asked quotations for the Common Stock as reported
by the National Quotation Bureau, Incorporated if at least two securities
dealers have inserted both bid and asked quotations for Common Stock on at least
five of the ten preceding days.
(i) "Outside Director" shall mean a member of the Board who qualifies
as an "outside director" under Section 162(m) of the Internal Revenue Code and
the regulations thereunder and as a "Non-Employee Director" under Rule 16b-3
promulgated under the Securities Exchange Act.
(j) "Participant" means an Eligible Person of the Company or any
Subsidiary who is selected at one or more times or from time to time to
participate in the Plan by the Committee or the Board.
(k) "Performance Award" shall mean an award granted pursuant to
Article 4 hereof.
(l) "Performance Goals" shall mean the goals established by the
Committee or the Board pursuant to subsection 4.3.2.
(m) "Performance Period" means the following: (1) with respect to a
Bonus Award, the Quarter or Quarters with respect to which the Bonus Formulas
are set by the Committee or the Board; and (2) with respect to a Performance
Award, the Year or Years with respect to which the Performance Goals are set by
the Committee or the Board.
(n) "Plan" means this 1997 Performance Bonus Plan, as amended from
time to time.
(o) "Quarter" means any one or more fiscal quarters of the Company
included within the applicable Performance Period.
(p) "Share(s)" shall mean a share or shares of the Company's Common
Stock.
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(q) "Section 162(m)" shall mean Section 162(m) of the Internal
Revenue Code of 1986, as amended.
(r) "Subsidiary" shall mean any corporation (other than the Company)
in any unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50 percent or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
(s) "Year" means any one or more fiscal years of the Company included
within the applicable Performance Period.
3. ADMINISTRATION OF THE PLAN.
3.1 THE COMMITTEE. The Plan shall be administered by the Board or by
a committee appointed by the Board (the "Committee") which shall be composed of
two or more Directors all of whom shall be Outside Directors; provided, however,
that only the Committee may determine Performance Awards for Participants who
may be considered Covered Employees. The membership of the Committee shall be
constituted so as to comply at all times with the applicable requirements of
Rule 16b-3 promulgated under the Securities Exchange Act and Section 162(m) of
the Internal Revenue Code. The Committee shall serve at the pleasure of the
Board and shall have the powers designated herein and such other powers as the
Board may from time to time confer upon it.
3.2 POWERS OF THE COMMITTEE. The Committee shall have the sole
authority to establish and administer the Bonus Formulas, the Performance Goals
and this Plan, as well as the responsibility of selecting the Eligible Persons
who are eligible to participate in and receive Bonus Awards and/or Performance
Awards under the Plan. The Committee shall have the authority to construe and
interpret the Plan (except as otherwise provided herein) and any agreement or
other document relating to any Bonus Award and/or Performance Award under the
Plan, may adopt rules and regulations governing the administration of the Plan,
and shall exercise all other duties and powers conferred on it by the Plan or
the Board, or which are incidental or ancillary thereto.
3.3 REQUISITE ACTION. A majority (but not fewer than two) of the
members of the Committee shall constitute a quorum. The vote of a majority of
those present at a meeting at which a quorum is present or the unanimous written
consent of the Committee shall constitute action by the Committee.
4. AWARD PROVISIONS.
4.1 AWARDS. A "Bonus Award" is an award to a Participant who is not a
Covered Employee entitling the recipient Participant to acquire cash or Shares
or other consideration, or a combination thereof, as determined by the Committee
in its sole discretion, as provided in the Bonus Formula(s) pursuant to
subsection 4.2.2. A "Performance Award" is an
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award to a Participant who is a Covered Employee entitling the recipient
Participant to acquire cash or Shares or other consideration, or a combination
thereof, as determined by the Committee in its sole discretion, upon the
attainment of specified Performance Goals pursuant to subsection 4.3.2. Any
Shares issued pursuant to a Bonus Award or Performance Award shall be
conclusively deemed to be fully paid and nonassessable within the meaning of
Section 607.0621 of the Florida Statutes. The Committee in its sole discretion
shall also determine whether and to whom Bonus Awards and/or Performance Awards
shall be awarded, the applicable Bonus Formula(s) and Performance Goals under
each such Award, the periods during which performance is to be measured, and all
other limitations and conditions applicable to the Bonus Awards and Performance
Awards. The Committee may adjust the Bonus Formula(s), the Performance Goals, as
well as the periods and other terms applicable to any Bonus Award and/or
Performance Award to take into account changes in law and accounting and tax
rules, and to make such adjustments as the Committee deems necessary or
appropriate to reflect the inclusion or exclusion of the impact of extraordinary
or unusual items, events or circumstances in order to avoid windfalls or
hardships or for other reasonable purposes.
4.2 PROVISIONS APPLICABLE TO PARTICIPANTS WHO ARE NOT COVERED EMPLOYEES.
4.2.1 BONUS AWARDS. Each selected Participant who is not a Covered
Employee may receive a Bonus Award if and only if the requirements for a Bonus
Award under the applicable Bonus Formula(s), established by the Committee, are
attained. The applicable Performance Period and Bonus Formula(s) shall be
determined by the Committee consistent with the terms of the Plan.
Notwithstanding the fact that the Bonus Formula(s) have been attained, the
Company may pay a Bonus Award of less (or more) than the amount determined by
the Bonus Formula(s) or may make no Bonus Award at all, unless the Committee
expressly provides otherwise by written contract or other written commitment.
Settlement of such Bonus Awards shall be in cash, Stock, other Awards or other
property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in connection
with such Bonus Awards. The Committee shall specify the circumstances in which
such Bonus Awards shall be paid or forfeited in the event of termination of
employment by the Participant prior to the end of a Performance Period or
settlement of Bonus Awards.
4.2.2 SELECTION OF BONUS FORMULAS. At the time the Bonus Formula(s)
are selected, the Committee shall provide, in terms of an objective formula or
standard for each Participant who is not a Covered Employee, and for any person
who may become a Participant (except for those Participants who may be Covered
Employees) after the Bonus Formula(s) are set, the method of computing the
specific amount that will represent the maximum amount of a Bonus Award or
portion thereof payable to such Participant if the requirements for a Bonus
Award under the Bonus Formula(s) are attained, subject to the provisions of
Articles 4 and 5 or as otherwise provided in or pursuant to this Plan.
4.2.3 SELECTION OF PARTICIPANTS. For each Performance Period, the
Committee shall determine, at the time the Bonus Formula(s) are set, those
Eligible Persons who
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are not Covered Employees who shall be eligible to receive Bonus Awards for such
Performance Periods and the Bonus Formula(s) applicable to each such
Participant.
4.2.4 EFFECT OF INTERIM COMMENCEMENT OF SERVICE. If a Participant,
who is not a Covered Employee, commences employment after the adoption of the
Plan and the establishment of Bonus Formula(s) for a Performance Period, the
Committee may grant a Bonus Award that is proportionately adjusted based on the
period of actual service during the Performance Period, the amount of any Bonus
Award paid to such Participant shall not exceed that proportionate amount unless
otherwise determined by the Committee.
4.3 PROVISIONS APPLICABLE TO PARTICIPANTS WHO MAY BE COVERED EMPLOYEES
4.3.1 PERFORMANCE AWARDS. If and to the extent that the Committee
determines that a Performance Award is to be granted to a Participant who is
designated by the Committee as likely to be a Covered Employee pursuant to
subsection 4.3.9, the grant, exercise and/or settlement of such Performance
Award shall be contingent upon achievement of preestablished Performance Goals
and other terms, set forth in this subsection 4.3, so as to qualify as
"performance-based compensation" for purposes of Section 162(m).
4.3.2 PERFORMANCE GOALS GENERALLY. The Performance Goals for such
Performance Awards shall consist of one or more business criteria and a targeted
level or levels of performance with respect to each of such criteria, as
specified by the Committee consistent with this Subsection 4.3. Performance
Goals shall be objective and shall otherwise meet the requirements of Section
162(m) and regulations thereunder including the requirement that the level or
levels of performance targeted by the Committee result in the achievement of
Performance Goals being "substantially uncertain." The Committee may determine
that such Performance Awards shall be granted, exercised and/or settled upon
achievement of any one Performance Goal or that two or more of the Performance
Goals must be achieved as a condition to grant, exercise and/or settlement of
such Performance Awards. Performance Goals may differ for Performance Awards
granted to any one Participant or to different Participants who may be Covered
Employees.
4.3.3 BUSINESS CRITERIA. One or more of the following business
criteria for the Company, on a consolidated basis, and/or specified subsidiaries
or business units of the Company (except with respect to the total shareholder
return and earnings per share criteria), shall be used exclusively by the
Committee in establishing Performance Goals for such Performance Awards: (1)
total shareholder return; (2) such total shareholder return as compared to total
return (on a comparable basis) of a publicly available index such as, but not
limited to, the Standard & Poor's 500 Stock Index; (3) net income; (4) pretax
earnings; (5) earnings before interest expense, taxes, depreciation and
amortization; (6) pretax operating earnings after interest expense and before
bonuses, service fees, and extraordinary or special items; (7) operating margin;
(8) earnings per share; (9) return on equity; (10) return on capital; (11)
return on
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investment; (12) return on assets; (13) operating earnings; (14) working capital
or inventory; and (15) ratio of debt to shareholders' equity.
4.3.4 PERFORMANCE PERIOD; TIMING FOR ESTABLISHING PERFORMANCE GOALS.
Achievement of Performance Goals in respect of such Performance Awards shall be
measured over a Performance Period of up to ten years, as specified by the
Committee. Performance Goals shall be established not later than 90 days after
the beginning of any Performance Period applicable to such Performance Awards,
or at such other date as may be required or permitted for "performance-based
compensation" under Section 162(m).
4.3.5 PERFORMANCE AWARD POOL. The Committee may establish a
Performance Award pool, which shall be an unfunded pool, for purposes of
measuring Company performance in connection with Performance Awards. The amount
of such Performance Award pool shall be based upon the achievement of a
Performance Goal(s) based on one or more of the business criteria set forth in
subsection 4.3.3 hereof during the given Performance Period, as specified by the
Committee in accordance with Section 4.3.4 hereof. The Committee may specify the
amount of the Performance Award pool as a percentage of any of such business
criteria, a percentage thereof in excess of a threshold amount, or as another
amount which need not bear a strictly mathematical relationship to such business
criteria.
4.3.6 SETTLEMENT OF PERFORMANCE AWARDS; OTHER TERMS. Settlement of
such Performance Awards shall be in cash, Stock, other Awards or other property,
in the discretion of the Committee. The Committee may, in its discretion, reduce
the amount of a settlement otherwise to be made in connection with such
Performance Awards. The Committee shall specify the circumstances in which such
Performance Awards shall be paid or forfeited in the event of termination of
employment by the Participant prior to the end of a Performance Period or
settlement of Performance Awards.
4.3.7 MAXIMUM INDIVIDUAL PERFORMANCE AWARD. Notwithstanding any
other provision hereof, no Participant who is a Covered Employee shall receive a
Performance Award under the Plan for any fiscal year having a value in excess of
$400,000.
4.3.8 EFFECT OF MID-YEAR COMMENCEMENT OF SERVICE. If services as a
Covered Employee commence after the adoption of the Plan and the Performance
Goals are established for a Performance Period, the Committee may grant a
Performance Award that is proportionately adjusted based on the period of actual
service during the Year; the amount of any Performance Award paid to such person
shall not exceed that proportionate amount.
4.3.9 COVERED EMPLOYEES, PERFORMANCE AWARDS AND SECTION 162(M). It
is the intent of the Company that Performance Awards granted to Eligible Persons
who are designated by the Committee as likely to be Covered Employees within the
meaning of Section 162(m) and regulations thereunder shall, if so designated by
the Committee, constitute "qualified performance-based compensation" within the
meaning of Code Section 162(m) and regulations thereunder. Accordingly, the
terms of this subsection 4.3, including the definitions of Covered
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Employee and other terms used therein, shall be interpreted in a manner
consistent with Section 162(m) and regulations thereunder. The foregoing
notwithstanding, because the Committee cannot determine with certainty whether a
given Participant will be a Covered Employee with respect to a fiscal year that
has not yet been completed, the term Covered Employee as used herein shall mean
only a person designated by the Committee, at the time of grant of Performance
Awards, as likely to be a Covered Employee with respect to that fiscal year. If
any provision of the Plan or any agreement relating to such Performance Awards
does not comply or is inconsistent with the requirements of Section 162(m) or
regulations thereunder, such provision shall be construed or deemed amended to
the extent necessary to conform to such requirements
4.4 TERMINATION OF EMPLOYMENT DURING YEAR. Unless otherwise
determined by the Committee or required by applicable law, no Bonus Award or
Performance Award shall be payable to a Participant unless such Participant is
employed by the Company or applicable Subsidiary of the Company on the last day
of the Performance Period for which the Bonus Award or Performance Award is
otherwise payable.
4.5 COMMITTEE CERTIFICATION. No Participant shall receive any Bonus
Award or Performance Award under the Plan unless the Committee has certified, by
resolution or other appropriate action in writing, that the amount thereof has
been accurately determined in accordance with the terms, conditions and limits
of the Plan and that the Bonus Formula(s), the Performance Goals and any other
material terms previously established by the Committee or set forth in the Plan
were in fact satisfied.
4.6 TIME OF PAYMENT. Any Bonus Awards and Performance Awards granted
by the Committee under the Plan shall be paid as soon as practicable following
the Committee's determinations under this Article 4 and the certification of the
Committee's findings under Section 4.5.
5. GENERAL PROVISIONS.
5.1 NO RIGHT TO AWARD OR CONTINUED EMPLOYMENT. Neither the
establishment of the Plan nor the provision for or payment of any amounts
hereunder nor any action of the Company (including, for purposes of this Section
5.1, any predecessor or subsidiary), the Board of Directors of the Company or
the Committee in respect of the Plan, shall be held or construed to confer upon
any person any legal right to receive, or any interest in, a Bonus Award,
Performance Award, any other benefit under the Plan, or any legal right to be
continued in the employ of the Company. The Company expressly reserves any and
all rights to discharge an employee in its sole discretion, without liability of
any person, entity or governing body under the Plan or otherwise, except to the
extent otherwise provided in any written employment agreement between the
Company and such employee. Notwithstanding any other provision hereof, and
notwithstanding the fact that the requirements for a Bonus Award under the
applicable Bonus Formula(s) have been attained, and notwithstanding the fact
that the Performance Goals have been attained pursuant to a Performance Award,
the Company shall
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have no obligation to pay any Bonus Award or Performance Award hereunder, unless
the Committee otherwise expressly provides by written contract or other written
commitment.
5.2 DISCRETION OF COMPANY, BOARD OF DIRECTORS AND COMMITTEE. Any
decision made or action taken by the Company or by the Board of Directors of the
Company or by the Committee arising out of or in connection with the creation,
amendment, construction, administration, interpretation and effect of the Plan
shall be within the absolute discretion of such entity and shall be conclusive
and binding upon all persons, subject to applicable requirements for shareholder
approval of modifications under Section 162(m).
5.3 ABSENCE OF LIABILITY. A member of the Board of Directors of the
Company or a member of the Committee or any officer of the Company shall not be
liable for any act or inaction hereunder, whether of commission or omission.
5.4 NON-TRANSFERABILITY OF BENEFITS AND INTERESTS. Except as
expressly provided by the Committee, no Bonus Award and/or Performance Award
payable under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any
such attempted action shall be void and no such benefit shall be in any manner
liable for or subject to debts, contracts, liabilities, engagements or torts of
any Participant or former Participant.
5.5 NON-EXCLUSIVITY. The Plan does not limit the authority of the
Company, the Board or the Committee, or any subsidiary of the Company, to grant
Awards or authorize any other compensation under any other plan or authority. In
addition, employees not selected to participate in the Plan may participate in
other plans of the Company.
6. SHARES SUBJECT TO THE PLAN.
6.1 GENERAL. Subject to the adjustment provisions of Section 6.4
hereof, the number of Shares subject to the Plan for which Bonus Awards and
Performance Awards may be granted under the Plan shall not exceed 250,000
Shares, plus the number of Shares that are surrendered in payment of any Awards
or any tax withholding requirements.
6.2 SHARES TO BE USED. The Shares which may be issued pursuant to a
Bonus Award and/or Performance Award under the Plan may be authorized but
unissued Shares or Shares that may be acquired, subsequently or in anticipation
of a Bonus Award and/or Performance Award, in the open market to satisfy the
requirements of the Plan.
6.3 ADDITIONAL SHARES. Any undistributed portion of terminated,
exchanged or forfeited Bonus Awards and/or Performance Awards shall be available
for further such Awards under the Plan.
6.4 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of a
reorganization, recapitalization, stock split, stock dividend, exchange or
stock, combination of
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stock, merger, consolidation or any other change in corporate structure of the
Company affecting the Shares, or in the event of a sale by the Company of all or
a significant part of its assets, or any distribution to its shareholders other
than a normal cash dividend, the Committee may in its sole and absolute
discretion make appropriate adjustment in the number, kind, price and value of
Shares authorized under Section 6.1 or to be issued pursuant to Bonus Formulas
and adjustments to outstanding Bonus Awards and/or Performance Awards as it
determines appropriate so as to prevent dilution or enlargement of such Awards
or rights thereunder.
6.5 RIGHTS OF SHAREHOLDERS. A Participant receiving a Bonus Award or
Performance Award will have rights of a shareholder only as to Shares actually
issued to and received by such Participant pursuant to such Award, as evidenced
by a stock certificate for such Shares.
7. INTERPRETATION.
(a) This Plan shall be governed by the laws of the State of Florida.
(b) Headings contained in this Agreement are for convenience only and
shall in no manner be construed as part of this Plan.
(c) Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.
8. EFFECTIVE DATE AND TERMINATION DATE. The effective date of the Plan
is the date on which the Board adopts this Plan, and the Plan shall terminate on
the 10th anniversary of the effective date.
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PROXY FOR 1998 ANNUAL MEETING OF SHAREHOLDERS
of
ENGLE HOMES, INC.
123 NW 13th Street, Suite 300
Boca Raton, Florida 33432
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
COMMON STOCK
The undersigned holder of Common Stock of Engle Homes, Inc., a Florida
Corporation, hereby appoints Alec Engelstein and David Shapiro, and each of
them, as proxies for the undersigned, each with full power of substitution, to
act for the undersigned and to vote, as designated below, all shares of stock of
the Company and that the undersigned is entitled to vote at the 1998 Annual
Meeting of Shareholders of the Company, to be held on Monday, April 20, 1998 at
11:00 a.m. local time at the Company's offices located at 123 N.W. 13th Street,
Suite 300, Boca Raton, Florida, and at any adjournment(s) or postponements(s)
thereof.
The Board of Directors unanimously recommends a vote FOR the election
of all the director nominees listed in proposal (1) and FOR approval of proposal
(2) and FOR approval of Proposal (3) below.
(1) Election of Alec Engelstein, Harry Engelstein, John A. Kraynick, David
Shapiro, Henry Fishkind, Ph.D., Ronald Korn and Alan L. Shulman as directors of
the Company.
[ ] VOTE FOR all nominees listed above, except vote withheld from the following
nominees(s) (if any).
- --------------------------------------------------------------------------------
[ ] VOTE WITHHELD from all nominees.
(2) Approval of amendments to the Company's 1991 Stock Option Plan (the "Plan")
to (i) increase the number of shares of the Company's common stock reserved for
issuance under the Plan from 850,000 to 1,000,000, and (ii) conform certain
administrative provisions of the 1991 Plan to the requirements of Section 162
(m) of the Internal Revenue Code of 1986, as amended.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Approval of the adoption of the Company's Amended and Restated 1997
Performance Bonus Plan (the "1997 Plan").
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) The Proxies are authorized to vote in their discretion upon such other
business as may properly come before the Annual Meeting and any adjournments or
postponements thereof.
(SEE REVERSE SIDE)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF ALL DIRECTOR NOMINEES LISTED IN PROPOSAL (1) AND
"FOR" APPROVAL OF PROPOSAL (2) AND "FOR" APPROVAL OF PROPOSAL (3) ABOVE.
The undersigned hereby acknowledges receipt of (i) the Notice of Annual
Meeting and related Proxy Statement, and (ii) the Company's 1997 Annual Report
to Shareholders.
Dated:____________________,1998
_______________________________
(Signature)
________________________________
(Signature if held jointly)
IMPORTANT: Please sign exactly as your name appears hereon and mail it promptly
even though you plan to attend the meeting. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign fill corporate name by president or other authorized officer. If a
partnership name, by authorized person.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
