def14a
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
BROOKFIELD
HOMES CORPORATION
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11 |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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Total fee paid: |
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Fee paid previously with preliminary materials. |
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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. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
BROOKFIELD HOMES CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On
May 3, 2006
Fellow Stockholders of Brookfield Homes Corporation:
You are invited to attend the 2006 Annual Meeting of Stockholders of Brookfield Homes
Corporation. The Annual Meeting will be held at the Hilton Hotel, 3050 Bristol Street, Costa Mesa,
California, on May 3, 2006 at 11:00 a.m., Pacific Time, for the following purposes:
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to elect nine directors; |
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to ratify the appointment of Deloitte & Touche LLP as our independent auditors for
2006; and |
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to conduct other business properly brought before the meeting. |
Only stockholders of record at the close of business on March 6, 2006, are entitled to notice
of and to vote at the Annual Meeting or any adjournment thereof.
While we would like to have each of you attend the meeting and vote your shares in person, we
realize this may not be possible. Whether or not you plan to attend the meeting, your vote is very
important. A form of proxy on which to indicate your vote and an envelope, postage prepaid, in
which to return your proxy are enclosed. WE URGE YOU TO COMPLETE, SIGN AND RETURN THE ENCLOSED
FORM OF PROXY SO THAT YOUR SHARES WILL BE REPRESENTED. If you later decide to attend the Annual
Meeting, you may revoke your proxy at that time and vote your shares in person.
If you desire any additional information concerning the Annual Meeting or the matters to be
acted upon at the meeting, we would be glad to hear from you. Please contact the undersigned
officer at 858-481-2965.
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Yours very truly, |
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Shane D. Pearson |
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Secretary to the Board of Directors |
Fairfax, Virginia
March 15, 2006
TABLE OF CONTENTS
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NOTICE OF MEETING |
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BROOKFIELD HOMES CORPORATION
8500 Executive Park Avenue, Suite 300
Fairfax, Virginia 22031
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 3, 2006
GENERAL
Time, Place and Purposes of Meeting
The 2006 Annual Meeting of Stockholders of Brookfield Homes Corporation will be held on May 3, 2006
at 11:00 a.m., Pacific Time, at the Hilton Hotel, 3050 Bristol Street, Costa Mesa, California (in this
proxy statement, unless the context requires otherwise, references to we, our, us, and
Company refer to Brookfield Homes Corporation). The purposes of the Annual Meeting are set forth
in the Notice of Annual Meeting of Stockholders to which this proxy statement is attached.
Solicitation of Proxies
This proxy
statement is furnished in connection with the solicitation of proxies by our board of
directors. We expect that this proxy statement and the accompanying form of proxy will first be
mailed on or about March 15, 2006 to each stockholder of record on March 6, 2006. We will bear the
entire cost of this solicitation. The solicitation of proxies will be made primarily by use of the
mail. In addition, our directors, officers and regular employees may make solicitations by
telephone, telegraph, e-mail or personal interview, and may request banks, brokers, fiduciaries and
other persons holding stock in their names, or in the names of their nominees, to forward proxies
and proxy materials to their principals and obtain authorization for the execution and return of
such proxies. We will reimburse such banks, brokers and fiduciaries for their reasonable
out-of-pocket expenses in connection therewith.
Revocation and Voting of Proxies
A proxy for use at the Annual Meeting is enclosed. Any proxy given may be revoked by you at any
time before it is exercised by filing with us a notice in writing revoking it or by duly executing
a proxy bearing a later date. Proxies also may be revoked in person at the Annual Meeting if you
desire to vote your shares in person. Subject to such revocation and except as otherwise stated
herein or in the form of proxy, all proxies duly executed and received prior to, or at the time of,
the Annual Meeting will be voted in accordance with the specifications of the proxies. If no
specification is made, proxies will be voted for the nominees for election of directors set forth
elsewhere herein (see PROPOSAL ONE ELECTION OF DIRECTORS) and for the ratification of the
appointment of Deloitte & Touche LLP as our independent auditors for 2006 (see PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS) and, at the discretion of the proxy holders,
on all other matters properly brought before the Annual Meeting or any adjournment thereof.
Outstanding Shares and Voting Rights
March 6, 2006 has been set as the record date for the purpose of determining stockholders entitled
to notice of, and to vote at, the Annual Meeting. There were 27,331,206 shares of our common stock,
$0.01 par value per share, issued and outstanding on February 15, 2006. On any matter submitted to
a stockholder vote, each holder of our common stock will be entitled to one vote, in person or by
proxy, for each share of common stock registered in his, her or its name on the books of our
Company as of the record date. A list of such stockholders will be available for examination by any
stockholder at our Costa Mesa office, 3090 Bristol Street, Suite 200, Costa Mesa, California, for
at least ten days before the Annual Meeting.
Quorum Requirement
Our By-laws provide that at any meeting of stockholders, there must be present, either in person or
by proxy, in order to constitute a quorum, stockholders owning a majority of our issued and
outstanding capital stock entitled to vote at said meeting.
1
Vote Required
If a broker holds your shares, this proxy statement and a proxy card have been sent to the broker.
You may have received this proxy statement directly from your broker, together with instructions as
to how to direct the broker how to vote your shares. If you do not give your broker instructions or
discretionary authority to vote your shares on the Proposals and your broker returns the proxy card
indicating such lack of authority, your shares will be broker non-votes with respect to the
Proposals for which the broker does not have authority to vote. Broker non-votes will be counted
as present for purposes of determining a quorum, but will not be counted as shares entitled to
vote. If you abstain from voting on the Proposals, your shares will be counted as present at the
meeting, for purposes of determining a quorum, and entitled to vote. As a result, abstentions will
have no effect on the election of directors but will have the effect of a vote against the other
proposal being considered at the meeting.
In the election for directors, the nine persons receiving the highest number of for votes will be
elected.
The ratification of the appointment of Deloitte & Touche LLP as our independent auditors for 2006
requires approval by a majority of shares of common stock entitled to vote on the Proposal and
present in person or represented by proxy at the Annual Meeting.
If any other proposals are properly presented to the stockholders at the meeting, the number of
votes required for approval will depend upon the nature of the proposal. Generally, under Delaware
law the number of votes required to approve a proposal is a majority of the shares of common stock
entitled to vote and present in person or by proxy represented at the Annual Meeting. The enclosed
proxy card gives discretionary authority to the proxy holders to vote on any matter not included in
this proxy statement that is properly presented to the stockholders at the meeting.
Stockholders Sharing Same Address
In some cases, only one copy of this proxy statement and our 2005 Annual Report is being delivered
to multiple stockholders sharing an address, unless we have received contrary instructions from one
or more of the stockholders. Upon written or oral request, we will promptly deliver a separate
copy of this proxy statement and our 2005 Annual Report to a stockholder at a shared address to
which a single copy was delivered. You can notify us that you wish to receive a separate copy of
our proxy statements and annual reports in the future, or alternatively, that you wish to receive a
single copy of the materials instead of multiple copies. Contact information for these purposes is:
Brookfield Homes Corporation, Attention: Investor Relations, 12865 Pointe Del Mar, Suite 200, Del
Mar, CA, 92014, telephone number: 858-481-2567, or email: lnorthwood@brookfieldhomes.com.
PROPOSAL ONE ELECTION OF DIRECTORS
Our board of directors has nominated the nine persons set forth below for election as our
directors at the Annual Meeting, a majority of whom are independent. All of the nominees are
currently serving as our directors.
Unless otherwise specified in the accompanying proxy, the shares voted pursuant thereto will
be voted for each of the persons named below as nominees for election as directors. All directors
are elected to serve until the next annual meeting of stockholders and their successors have been
elected and qualified. If any nominee is unable to serve, the proxies will be voted by the proxy
holders in their discretion for another person. The board of directors has no reason to believe
that any nominee will not be able to serve as a director for his or her prescribed term.
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Director |
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Name |
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Age |
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Since |
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Principal Occupation and Business Experience |
Ian G. Cockwell
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58 |
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2002 |
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Ian Cockwell was appointed President and Chief
Executive Officer in October 2002. From 1994 to
2002, Mr. Cockwell served in various senior
executive positions with Brookfield Residential
Group, a division of Brookfield Properties. From
1998 until 2002, Mr. Cockwell was Chairman and
Chief Executive Officer responsible for
Brookfield Properties master-planned communities
business. |
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Director |
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Since |
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Principal Occupation and Business Experience |
Joan H. Fallon
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57 |
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2005 |
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Joan Fallon became a director in December 2005.
Ms. Fallon is a principal of JH Fallon and
Associates, a real estate consulting firm that
she established in 2003. From 1995 to 2003, she
served as Portfolio Manager/Managing Director of
the TIAA Real Estate Account, a separate account
of TIAA-CREF. From 1980 to 1995, Ms. Fallon held
various positions within the real estate division
of TIAA-CREF and prior to that, within the
pension and insurance divisions of TIAA-CREF.
Ms. Fallon was recommended as a nominee to serve
on the Companys board of directors by a
non-management director. |
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Robert A. Ferchat
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71 |
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2002 |
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Robert Ferchat became a director in December 2002.
Mr. Ferchat was Chairman and Chief Executive
Officer of BCE Mobile Communications, Inc. from
1994 until 1999.
Mr. Ferchat served as a director of Brookfield
Properties from 1997 until 2002. |
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J. Bruce Flatt
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40 |
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2002 |
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Bruce Flatt was appointed Chairman of our board
of directors in October 2002. Since February
2002, Mr. Flatt has served as Managing Partner
and Chief Executive Officer of Brookfield Asset
Management Inc., prior to which he served as the
President and Chief Executive Officer of
Brookfield Properties beginning in April 2000.
Between August 1995 and April 2000, Mr. Flatt
served as President and Chief Operating Officer
of Brookfield Properties. |
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Bruce T. Lehman
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53 |
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2002 |
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Bruce Lehman became a director in December 2002.
Mr. Lehman is a principal in Armada LLC, an
investor and principal in residential real
estate. Prior to this, Mr. Lehman was an
independent consultant, providing strategic
advice to clients in the homebuilding industry
from 2000 to 2002.
Mr. Lehman was President-Merchant Housing
Division, of Catellus Residential Group, a
wholly-owned subsidiary of Catellus Development
Corp. from 1996 until 2000. Mr. Lehman also held
this position with Catellus Residential Groups
predecessor company Akins Real Estate Group, from
1989 until 2000. |
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Alan Norris
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2003 |
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Alan Norris became a director in February 2003.
Mr. Norris is President and Chief Executive
Officer of Carma Group, a developer of
master-planned communities wholly-owned by
Brookfield Properties. Mr. Norris joined Carma
in 1983 and assumed increasingly senior positions
over the next 11 years when he was promoted to
his current position. |
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Timothy R. Price
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62 |
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2004 |
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Timothy Price became a director in August 2004.
Mr. Price has served as Chairman of Brookfield
Funds since 1996. |
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Director |
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Principal Occupation and Business Experience |
David M. Sherman
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48 |
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2003 |
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David Sherman became a director in February 2003.
Mr. Sherman is a Co-Managing Member of
Metropolitan Real Estate Equity Management, LLC,
a real estate fund-of-funds manager, a position
he has held since the firms inception in 2002.
Since 2000, Mr. Sherman has also served as an
adjunct professor of real estate at Columbia
University Graduate School of Business
Administration. Mr. Sherman was the Managing
Director, and head of REIT Equity Research at
Salomon Smith Barney, Inc. from 1995 until 2000.
Prior to this, Mr. Sherman held various positions
in real estate investment banking and finance. |
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Robert L. Stelzl
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60 |
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2002 |
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Robert Stelzl became a director in December 2002.
Mr. Stelzl is President of Rivas Capital, a
private real estate investor and fund manager.
Mr. Stelzl recently retired from Colony Capital
LLC, a global real estate private equity investor
where he was a Principal since 1995. Mr. Stelzl
is currently a director of Brookfield Properties. |
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR EACH OF THE DIRECTOR NOMINEES.
4
BENEFICIAL OWNERSHIP OF COMMON STOCK
Security Ownership of Principal Stockholders and Management
The following table shows the beneficial ownership of shares of our outstanding common stock
as of February 15, 2006 by:
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each person known by us to be the beneficial owner of more than 5% of our common stock; |
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each of our directors and director nominees; |
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each of our executive officers named in the Summary Compensation Table Executive Officers on page 8 under
EXECUTIVE COMPENSATION; and |
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all of our directors and executive officers as a group. |
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange
Commission, and generally includes voting or investment power with respect to securities (refer to
footnote 1 to the table for additional information about how beneficial ownership is calculated).
Unless stated otherwise, the shares are owned directly and the named beneficial owners possess sole
voting and investment power with respect to the shares set forth in the table.
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Amount and Nature of |
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Common Stock Beneficially Owned |
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Number of Shares |
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Percentage |
Name of Beneficial Owner |
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Beneficially Owned (1) (2) |
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of Class (3) |
Brookfield Asset Management Inc. (4)
Suite 300, BCE Place
181 Bay Street, Toronto, Ontario M5J 2T3 |
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14,140,893 |
(5) |
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51.74 |
Ian G. Cockwell (6) |
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14,723,041 |
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53.78 |
Joan H. Fallon |
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Robert A. Ferchat |
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3,000 |
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J. Bruce Flatt (6) |
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14,176,925 |
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51.87 |
Paul G. Kerrigan |
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240,618 |
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Bruce T. Lehman |
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* |
Alan Norris |
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3,000 |
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* |
Shane D. Pearson |
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16,000 |
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Timothy R. Price |
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19,752 |
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William B. Seith |
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11,000 |
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David M. Sherman |
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Robert L. Stelzl |
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* |
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All directors and officers as a group (12 persons) |
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15,052,443 |
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54.89 |
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Less than 1%. |
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Under the rules of the Securities and Exchange Commission governing the determination of
beneficial ownership of securities, a person is deemed to be a beneficial owner of a
security if that person has or shares voting power, which includes the power to vote or to
direct the voting of the security, or investment power, which includes the power to dispose
of or to direct the disposition of the security. A person is also deemed to be a beneficial
owner of any securities of which that person has a right to acquire beneficial ownership
within 60 days. Under these rules, more than one person may be deemed a beneficial owner of
the same securities, and a person may be deemed to be a beneficial owner of securities as to
which the person has no economic interest. |
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Beneficial ownership includes shares held indirectly through Partners Limited, which is
described in note 4 below. Beneficial ownership also includes shares that the executive
officers and directors could acquire by exercising stock options on, or within 60 days after,
February 15, 2006 as follows: Mr. Cockwell 47,000;
Mr. Kerrigan 28,000; Mr. Pearson 8,000 and Mr. Seith 11,000. Refer to the section of
this proxy statement entitled Executive Compensation for details of issued stock options. |
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The percentages are calculated based on the 27,331,206 shares of our common stock that are
outstanding as of February 15, 2006. For each person, separately, his or her percentage was
calculated by including his or her options as set forth in footnote (2) in both the numerator
and the denominator, and for the group, the percentage was calculated by including the
aggregate number of options set forth in footnote (2) in both the numerator and the
denominator. |
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Brookfield Asset Management Inc. (Brookfield) is an asset management company listed on the
New York and Toronto stock exchanges. J. Bruce Flatt, the Chairman of our board of directors,
is also a director and Managing Partner and Chief Executive Officer of Brookfield. We are
advised by Brookfield that its major shareholder is Partners Limited (Partners). Partners
and its shareholders collectively own, directly or indirectly, exercise control or direction
over, or have options and warrants to acquire approximately 45 million Class A Limited Voting
shares representing approximately 17% of the outstanding Class A Limited Voting shares of
Brookfield on a fully diluted basis and 85,120 Class B Limited Voting shares, representing
100% of the Class B Limited Voting shares of Brookfield. These shareholdings include shares
held through BNN Investments Ltd., a public company listed on the Toronto Stock Exchange which
indirectly owns 17.4 million Class A Limited Voting shares of Brookfield. Partners, together
with 13 of its shareholders, collectively owns approximately 85% of the common shares of BNN
Investments Ltd. Messrs. Cockwell and Flatt, who are directors and officers of our
company, are also shareholders of Partners and may be deemed to share beneficial ownership of
our common stock with Brookfield. Partners is owned by 45 investors with no single shareholder
holding more than a 15% effective equity interest. To the extent any of such investors is
deemed to be a beneficial owner of shares of our common stock held by Brookfield, such person
disclaims beneficial ownership of those shares of our common stock. |
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Based solely upon information contained in the Schedule 13G/A of Brookfield filed with the
Securities and Exchange Commission (the SEC) with respect to common stock owned as of
February 14, 2006. |
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Includes 14,140,893 shares beneficially owned by Brookfield. Messrs. Cockwell and Flatt
disclaim beneficial ownership of the shares of common stock held by Brookfield. |
6
PERFORMANCE GRAPH
The following graph illustrates the cumulative total stockholder return on Brookfield Homes common
stock for the last three fiscal years assuming a hypothetical investment of $100 and a reinvestment
of all dividends paid on such investment, compared to Standard & Poors 500 Stock Index and the
Standard & Poors Homebuilding 500 Index.
COMPARISON OF CUMULATIVE TOTAL RETURN
PERIOD ENDING DECEMBER 31, 2005
LEGEND AND INDEXED RETURNS
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Base Period |
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December |
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December |
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Legend |
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31, 2002* |
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31, 2003 |
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31, 2004 |
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31, 2005 |
Brookfield
Homes Corporation |
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100 |
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272.55 |
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493.56 |
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728.90 |
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S & P 500
Homebuilding Index |
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100 |
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197.81 |
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264.35 |
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334.63 |
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S & P 500 Index |
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100 |
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128.68 |
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142.66 |
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149.69 |
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* |
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Brookfield Homes common stock began trading on the NYSE on January 7, 2003. |
7
EXECUTIVE COMPENSATION
The following table provides the annual and long-term compensation of our Chief Executive
Officer and other executive officers:
Summary Compensation Table Executive Officers
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Long-Term Compensation |
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Annual Compensation |
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Awards |
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Payouts |
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|
|
Other |
|
Restricted |
|
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual |
|
Stock |
|
Underlying |
|
LTIP |
|
All Other |
Name & Principal Position |
|
Year |
|
Salary |
|
Bonus |
|
Compensation |
|
Award(s) |
|
Options/SARs |
|
Payouts |
|
Compensation |
Ian G. Cockwell |
|
|
2005 |
|
|
$ |
287,000 |
|
|
$ |
160,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
60,000 |
|
|
|
|
|
|
|
|
|
President & Chief |
|
|
2004 |
|
|
$ |
283,000 |
|
|
$ |
160,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
75,000 |
|
|
|
|
|
|
|
|
|
Executive Officer |
|
|
2003 |
|
|
$ |
260,000 |
|
|
$ |
90,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
40,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul G. Kerrigan |
|
|
2005 |
|
|
$ |
203,000 |
|
|
$ |
100,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
40,000 |
|
|
|
|
|
|
|
|
|
Executive Vice President, |
|
|
2004 |
|
|
$ |
188,000 |
|
|
$ |
100,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
|
|
Chief Financial Officer & Treasurer |
|
|
2003 |
|
|
$ |
173,000 |
|
|
$ |
70,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William B. Seith |
|
|
2005 |
|
|
$ |
185,000 |
|
|
$ |
509,000 |
|
|
|
|
|
|
|
|
|
|
|
5,000 |
|
|
|
|
|
|
|
|
|
Executive Vice President, |
|
|
2004 |
|
|
$ |
185,000 |
|
|
$ |
215,000 |
|
|
|
|
|
|
|
|
|
|
|
5,000 |
|
|
|
|
|
|
|
|
|
Risk Management |
|
|
2003 |
|
|
$ |
185,000 |
|
|
$ |
35,000 |
|
|
|
|
|
|
|
|
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shane D. Pearson |
|
|
2005 |
|
|
$ |
115,000 |
|
|
$ |
42,000 |
|
|
|
|
|
|
|
|
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
Vice President & |
|
|
2004 |
|
|
$ |
108,000 |
|
|
$ |
42,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secretary |
|
|
2003 |
|
|
$ |
92,000 |
|
|
$ |
38,000 |
|
|
|
|
|
|
|
|
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Messrs. Cockwell and Kerrigan elected on February 1, 2006, February 15, 2005 and
February 18, 2004, to receive all of the bonus for the respective year in deferred share
units, increasing their deferred share units by 6,154, 8,828 and 5,818 units and 3,846, 5,517
and 4,525 units, respectively. |
The following table shows the options to purchase shares of our common stock granted to our Chief
Executive Officer and other executive officers of Brookfield Homes during 2005:
Option/SAR Grants in Last Fiscal Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Realizable Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at Assumed Annual Rates of |
|
|
|
|
|
|
% of Total |
|
|
|
|
|
|
|
|
|
Stock Price Appreciation |
|
|
|
|
|
|
Options/SARs |
|
|
|
|
|
|
|
|
|
for Option Term (3) |
Executives |
|
Number of Securities |
|
Granted to |
|
Exercise |
|
|
|
|
|
5% |
|
10% |
Receiving |
|
Underlying Options/ |
|
Employees |
|
or |
|
Expiration |
|
(Stock Price |
|
(Stock Price |
Grants |
|
SARs Granted (1) |
|
in Fiscal Year (2) |
|
Base Price |
|
Date |
|
$59.05) |
|
$94.02) |
Ian G. Cockwell |
|
|
75,000 |
|
|
|
60.5 |
|
|
$ |
36.25 |
|
|
|
02/15/15 |
|
|
$ |
1,710,000 |
|
|
$ |
4,332,750 |
|
Paul G. Kerrigan |
|
|
30,000 |
|
|
|
24.2 |
|
|
$ |
36.25 |
|
|
|
02/15/15 |
|
|
$ |
684,000 |
|
|
$ |
1,733,100 |
|
Shane D. Pearson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William B. Seith |
|
|
5,000 |
|
|
|
4.0 |
|
|
$ |
36.25 |
|
|
|
02/15/15 |
|
|
$ |
114,000 |
|
|
$ |
288,850 |
|
|
|
|
(1) |
|
The stock options were granted under our stock option plan on February 15, 2005. The
above options do not include 115,000 options granted February 1, 2006 at an exercise price of
$52.00 per share as follows: Ian Cockwell 60,000; Paul Kerrigan 40,000; Shane
Pearson 10,000; and William Seith 5,000. The options vest as to 20% at the end of each
year commencing February 15, 2005 and February 1, 2006 respectively, and are each exercisable
over a 10-year period. |
|
(2) |
|
Based upon a total of 124,000 shares subject to options granted under our stock option plan
in 2005. |
|
(3) |
|
These dollar amounts are not intended to forecast the future common stock price. Executives
will not benefit unless the common stock price increases above the stock option exercise
price. Any gain to the executives resulting from common stock price appreciation would benefit
all holders of common stock. |
8
The following table sets forth information about option / SAR exercises in the fiscal year ended
December 31, 2005 and options / SARs held as of the end of that year by our Chief Executive Officer
and other executive officers of Brookfield Homes.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities |
|
|
Value of Unexercised |
|
|
|
|
|
|
|
|
|
|
|
Underlying Unexercised |
|
|
In-The-Money |
|
|
|
|
|
|
|
|
|
|
|
Options / SAR at |
|
|
Options / SAR at |
|
|
|
Shares Acquired |
|
|
Value |
|
|
Fiscal Year-End |
|
|
Fiscal Year-End |
|
Name |
|
on Exercise(1) |
|
|
Realized |
|
|
Exercisable/ Unexercisable |
|
|
Exercisable / Unexercisable |
|
Ian G. Cockwell |
|
|
128,637 |
|
|
$ |
5,063,913 |
|
|
|
81,319/301,638 |
|
|
$3,795,155 / $11,349,470 |
|
Paul G. Kerrigan |
|
|
59,412 |
|
|
$ |
2,331,985 |
|
|
|
40,207/156,412 |
|
|
$1,854,587 / $6,119,017 |
|
Shane D. Pearson |
|
|
8,000 |
|
|
$ |
349,440 |
|
|
|
2,000/20,000 |
|
|
$55,580 / $798,200 |
|
William B. Seith |
|
|
6,000 |
|
|
$ |
232,860 |
|
|
|
4,000/25,000 |
|
|
$151,560 / $865,600 |
|
|
|
|
(1) |
|
Other than Mr. Seith, all shares acquired on exercise of options were owned
as of the date of this proxy statement. |
The following table sets forth the deferred share units granted to our Chief Executive Officer,
other named executive officers and directors of Brookfield Homes during 2005:
Long-Term Incentive Plans Awards In Last Fiscal Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Performance or |
|
|
Number of Shares, |
|
|
|
Shares, Units or |
|
|
Other Period Until |
|
|
Units or Other Rights |
|
Name |
|
Other Rights (1) |
|
|
Maturation or Payout |
|
|
at Fiscal Year-End |
|
Ian G. Cockwell |
|
|
11,340 |
(2) |
|
|
(1) |
|
|
|
375,404 |
|
Joan H. Fallon |
|
|
|
|
|
|
|
|
|
|
|
|
Robert A. Ferchat |
|
|
1,412 |
(3) |
|
|
(1) |
|
|
|
4,974 |
|
Paul G. Kerrigan |
|
|
6,617 |
(2) |
|
|
(1) |
|
|
|
164,342 |
|
Bruce T. Lehman |
|
|
721 |
(3) |
|
|
(1) |
|
|
|
4,555 |
|
Shane D. Pearson |
|
|
|
|
|
|
|
|
|
|
|
|
William B. Seith |
|
|
|
|
|
|
|
|
|
|
|
|
David M. Sherman |
|
|
1,422 |
(3) |
|
|
(1) |
|
|
|
6,437 |
|
Robert L. Stelzl |
|
|
720 |
(3) |
|
|
(1) |
|
|
|
4,460 |
|
|
|
|
(1) |
|
Deferred share units granted under our deferred share unit plan. The units vest as to
20% over a five year period. The units are only redeemable upon retirement, resignation or
death. The cash value of the units when redeemed will be equivalent to the closing price on
the NYSE of an equivalent number of shares of our common stock. There will be no shares of
common stock issued, authorized, reserved, purchased or sold at any time in connection with
units allocated. Under no circumstances will units be considered shares of common stock, or
entitle any participant to the exercise of voting rights or to the exercise of any other
rights arising from the ownership of shares of common stock. |
|
(2) |
|
Messrs. Cockwell and Kerrigan each elected on February 15, 2005 to receive all of their bonus
in deferred share units. Additional units representing dividends paid on the Companys common
stock on the same basis as if the dividends were reinvested accrued as follows: Mr. Cockwell
2,512 and Mr. Kerrigan 1,100. |
|
(3) |
|
Deferred share units granted to independent directors in 2005 consisted of 50% of the 2005
annual retainer required to be received in deferred units by each director plus an additional
amount up to 100% of the annual retainer elected to be received in deferred share units by
each director. Additional units representing dividends paid on the Companys common stock on
the same basis as if the dividends were reinvested accrued to each director. |
9
Senior
Operating Management Long-Term Participation Plan and Summary Compensation Significant
Employees
Certain senior operating employees, none of whom are executive officers of the Company, participate
in the Senior Operating Management Long-Term Participation Plan. See Compensation Committee Report
on Executive Compensation Senior Operating Management Long-Term Participation Plan. The plan
provides for participation in the net income of the business unit by each regional management team.
For 2005, 30 participants in the plan were allocated a total of $69.8 million, of which $27.9
million, or 40% vested upon approval of the 2005 year end financial statements. The remaining 60%
vests over the following three years, annually, at the rate of 50.0%, 33.3% and 16.7%,
respectively. Total unvested amounts as at December 31, 2005 vest in accordance with the plan as
follows: 2006 $43.4 million; 2007 $29.8 million; 2008 $18.5 million; and 2009 $7.0
million.
The following table provides the annual and long-term compensation of each of the significant
employees, none of whom are named executive
officers of the Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Compensation |
|
|
|
|
|
|
|
|
Annual Compensation |
|
Awards |
|
Payouts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
Restricted |
|
Securities |
|
Long-Term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual |
|
Stock |
|
Underlying |
|
Participation |
|
All Other |
Name & Principal Position |
|
Year |
|
Salary |
|
Bonus |
|
Compensation |
|
Award(s) |
|
Options/SARs |
|
Plan (1) |
|
Compensation |
Stephen P. Doyle |
|
|
2005 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,518,890 |
|
|
|
|
|
President, Brookfield |
|
|
2004 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,148,880 |
|
|
|
|
|
San Diego Holdings LLC |
|
|
2003 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,535,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Hubbell |
|
|
2005 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,095,459 |
|
|
|
|
|
President, Brookfield |
|
|
2004 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,196,639 |
|
|
|
|
|
Washington LLC |
|
|
2003 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,071,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adrian Foley |
|
|
2005 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,130,509 |
|
|
|
|
|
President, Brookfield |
|
|
2004 |
|
|
$ |
184,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,017,600 |
|
|
|
|
|
Southland Holdings LLC |
|
|
2003 |
|
|
$ |
145,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,597,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Ryan |
|
|
2005 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,789,745 |
|
|
|
|
|
President, Brookfield |
|
|
2004 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,785,200 |
|
|
|
|
|
Bay Area Holdings LLC |
|
|
2003 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,025,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard T. Whitney |
|
|
2005 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,140,256 |
|
|
|
|
|
President, Brookfield |
|
|
2004 |
|
|
$ |
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
920,760 |
|
|
|
|
|
California
Land Holdings LLC |
|
|
2003 |
|
|
$ |
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,026,000 |
|
|
|
|
|
|
|
|
(1) |
|
Vested amounts paid pursuant to the terms of the Senior
Operating Management Long-Term
Participation Plan described above. Amounts that individuals receive under the Plan with
respect to a particular year vest 40% upon approval of the year end financial statements, with
the remaining 60% vesting over three years, annually thereafter, at the rate of 50.0%, 33.3%,
and 16.7%, respectively. |
Compensation of Directors
During the 2005 fiscal year, directors who were not related to the Company received an annual
retainer of $50,000 paid 50% in cash and 50% in deferred share units of the Company. The
requirement to accept 50% of the annual retainer in deferred share units is designed to more
closely align the interests of directors with the interests of stockholders. Directors had the
option to elect to receive 100% of their annual retainer in deferred share units. The Chairman of
the Audit Committee earned an annual cash payment of $10,000, and the chairmen of the other board
committees earned an annual cash payment of $5,000, reflecting their additional responsibilities.
Directors were reimbursed for travel and other out-of-pocket expenses they incurred in attending
board and committee meetings.
The following table provides the annual compensation of our directors for 2005:
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Annual Retainer |
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Deferred |
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Committee |
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Other |
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Total |
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Name |
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Cash |
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Share Units |
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Total |
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Chair Fees |
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|
Compensation |
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|
Compensation |
|
Joan H. Fallon |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Robert A. Ferchat |
|
|
|
|
|
$ |
50,000 |
|
|
$ |
50,000 |
|
|
$ |
10,000 |
|
|
|
|
|
|
$ |
60,000 |
|
Bruce T. Lehman |
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
50,000 |
|
|
$ |
5,000 |
|
|
|
|
|
|
$ |
55,000 |
|
David M. Sherman |
|
|
|
|
|
$ |
50,000 |
|
|
$ |
50,000 |
|
|
$ |
2,500 |
|
|
|
|
|
|
$ |
52,500 |
|
Robert L. Stelzl |
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
50,000 |
|
|
|
|
|
|
|
|
|
|
$ |
50,000 |
|
10
Employment Contracts, Termination of Employment and Change-in-Control
We do not have any employment contracts, change of control arrangements or other compensatory plans
or arrangements with any of our executive officers.
Certain Relationships and Related Party Transactions
We were a wholly-owned subsidiary of Brookfield Properties Corporation (Brookfield Properties)
until January 6, 2003, when we were spun-off as a separate publicly traded company pursuant to a
reorganization of Brookfield Properties homebuilding business (which we refer to as the
Spin-off). Brookfield Properties no longer holds any of our shares, nor is Brookfield Properties
able to exercise control over us. However, we and Brookfield Properties are affiliates, as
Brookfield Asset Management Inc. (Brookfield) directly and indirectly owns approximately 50% of
each corporation.
In connection with the Spin-off, we and our wholly-owned subsidiary, Brookfield Homes Holdings
Inc., entered into a license agreement with Brookfield Properties (US) Inc., a subsidiary of
Brookfield Properties, under which we, Brookfield Homes Holdings Inc. and our subsidiaries pay to
Brookfield Properties (US) Inc. an annual fee in the total amount of $50,000 for the right to use
the names Brookfield and Brookfield Homes. We expect that the license agreement will permit us
to use the Brookfield name in connection with our homebuilding business for an indefinite period
of time, subject to customary termination provisions including upon a change of control of our
company.
We have entered into an agreement with a subsidiary of Brookfield, whereby we can deposit cash on a
demand basis to earn LIBOR plus fifty basis points. At
December 31, 2005, we had no funds on
deposit with this Brookfield subsidiary.
We sublease our administrative offices in Toronto, Ontario from Brookfield, which leases the space
from Brookfield Properties. We are required to pay approximately $100,000 per year in rent under
our Toronto sublease, which expires in 2008.
Our Chairman and three of our directors serve as executive officers and directors of our
affiliates, outlined as follows:
|
|
J. Bruce Flatt is Managing Partner and Chief Executive Officer and a director of Brookfield,
a publicly traded company which owns approximately 52% of our outstanding shares, and is a
director of several of Brookfields affiliates; |
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|
Alan Norris is an executive officer of Brookfield Properties, which is an affiliate of Brookfield; |
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Timothy R. Price is Chairman of Brookfield Funds, which is an affiliate of Brookfield; and |
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Robert L. Stelzl is an independent director of Brookfield Properties. |
Stephen Doyle, Robert Hubbell and John Ryan, Presidents of Brookfield San Diego Holdings LLC,
Brookfield Washington LLC and Brookfield Bay Area Holdings LLC, respectively, each own a 10%
interest in the LLC of which they are President. Richard Whitney, President of Brookfield
California Land Holdings LLC owns a 5% interest in this LLC.
The following individuals are beneficiaries of rabbi trusts owning interests in the respective LLC:
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|
Adrian Foley, President of Brookfield Southland Holdings LLC, is the sole
beneficiary of a rabbi trust that currently owns 5% of Brookfield Southland
Holdings LLC. Brookfield Homes Holdings Inc. is the trustee of the rabbi
trust. We own the remaining 95% of Brookfield Southland Holdings LLC; and |
|
|
Jeffrey J. Prostor, President of BH/JP Hawaii Holdings LLC, is the sole
beneficiary of a rabbi trust that currently owns 50% of BH/JP Hawaii
Holdings LLC. Brookfield Homes Holdings Inc. is the trustee of the rabbi
trust. We own the remaining 50% of BH/JP Hawaii Holdings LLC. |
11
INFORMATION REGARDING THE BOARD OF DIRECTORS
Corporate Governance Standards
The board of directors has adopted a Statement of Corporate Governance Practices which contains a
number of corporate governance standards designed to comply with the New York Stock Exchanges
final Corporate Governance Rules (the NYSE Rules) and the rules and regulations of the Securities
and Exchange Commission (the SEC Rules). The significant corporate governance standards adopted
by the board of directors are discussed below. The Statement of Corporate Governance Practices is
posted on our website under the Investor Relations and Corporate Governance links and is available
in print to any stockholder who so requests. Our website is www.brookfieldhomes.com.
Controlled Company
Brookfield Asset Management Inc. exercises voting power over approximately 52% of our outstanding
common shares. As such, we are a Controlled Company under NYSE Rules. At present, we have not
elected to take advantage of any of the controlled company corporate governance exemptions
available to us under the NYSE Rules.
Director Independence
The board has adopted a set of Independence Standards consistent with the NYSE Rules, to assist
it in determining whether a member of the board is independent under the NYSE Rules. In order to
be determined to be independent in accordance with these Independence Standards, a director must
have no material relationship with the Company (either directly or as a partner, shareholder or
officer of an organization that has a relationship with the Company), other than as a director of
the Company. The Independence Standards specify the criteria by which the independence of our
directors will be determined, including guidelines for directors and their immediate families with
respect to past employment or affiliation with the Company, its management or its independent
auditor. To assist it in determining director independence, a director is not independent if:
|
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the director is or has been within the last three years, an employee
of the Company, or an immediate family member is, or has been within
the last three years, an executive officer of the Company; |
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|
the director has received, or has an immediate family member who has
received, during any twelve-month period within the last three years,
more than $100,000 in direct compensation from the Company, other than
director and committee fees and pension or other forms of deferred
compensation for prior service (provided such compensation is not
contingent in any way on continued service); |
|
|
(a) the director or an immediate family member is a current partner of a firm that is the
Companys internal or external auditor; (b) the director is a current employee of such a firm;
(c) the director has an immediate family member who is a current employee of such a firm and
who participates in the firms audit, assurance or tax compliance (but not tax planning)
practice; or (d) the director or an immediate family member was within the last three years
(but is no longer) a partner or employee of such a firm and personally worked on the Companys
audit within that time; |
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the director or an immediate family member is, or has been within the
last three years, employed as an executive officer of another company
where any of the Companys present executive officers at the same time
serves or served on that companys compensation committee; or |
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|
the director is a current employee, or an immediate family member is a
current executive officer, of a company that has made payments to, or
received payments from, the Company for property or services in an
amount which, in any of the last three fiscal years, exceeds the
greater of $1 million, or 2% of such other companys consolidated
gross revenues. |
Based on the Independence Standards, the board has determined that Joan H. Fallon, Robert A.
Ferchat, Bruce
T. Lehman, David M. Sherman and Robert L. Stelzl are independent, for purposes of serving as
independent members of the board of directors, the Management Resources and Compensation Committee
and the Governance and Nominating Committee.
Audit Committee Independence, Financial Literacy and Audit Committee Financial Expert
In addition to being independent based on the Independence Standards, the NYSE Rules and related
SEC Rules require that each member of an audit committee satisfy additional independence and
financial literacy requirements, and at least one of these members must satisfy the additional
requirement of having accounting or related financial management expertise. This additional
requirement can be satisfied by the board determining that at least one Audit
12
Committee member is an audit committee financial expert within the meaning of the SEC Rules.
Accordingly, the Audit Committee Charter contains a set of standards that relate to audit committee
independence, financial literacy and audit committee accounting and financial management expertise.
See Committees of the Board Audit Committee for further information about the independence of
the Audit Committee.
Regular Meetings of Non-Management and Independent Directors
Consistent with our present practice and in accordance with the NYSE Rules, at the time of each
regularly scheduled board meeting, the non-management directors as well as the independent
directors ordinarily will each meet separately for a period of time. Annually, the board of
directors appoints an independent director who presides over both non-management and independent
director sessions and is referred to as the Presiding Director. Presently, the Audit Committee
Chairman serves as the Presiding Director. The non-management and the independent directors may
also meet at such other times as determined by the Presiding Director or at the request of any
non-management or independent director.
Communicating with the Board
Stockholders may send communications to the board of directors by writing to the Companys
Corporate Secretary, 12865 Pointe Del Mar, Suite 200, Del Mar, CA, 92014. Communications will be
reviewed and investigated and referred to the board of directors for appropriate action. Interested
parties with a good faith concern about the Companys conduct and who wish to contact the Presiding
Director directly may do so by writing to: Presiding Director, Brookfield Homes Corporation, 12865
Pointe Del Mar, Suite 200, Del Mar, CA, 92014. The status of all outstanding concerns addressed to
the Presiding Director will be reported to the directors as appropriate, on at least a quarterly
basis.
Code of Ethics
We have adopted a code of ethics that applies to our employees, officers and directors, including
our principal executive officer and principal financial and accounting officer. The code of ethics
is available on our website at www.brookfieldhomes.com and is available in print to any shareholder
who requests it. Any amendments to, or waivers from, our code of ethics, as they relate to any
executive officer or director, including our principal executive officer and principal financial
and accounting officer must be approved by the board of directors or a committee thereof and be
promptly disclosed to shareholders. We plan to disclose such waivers and amendments on our website,
as well as to comply with other applicable requirements.
Complaint Procedures Regarding Accounting, Internal Control, Auditing and Financial Matters
In accordance with SEC Rules, the Audit Committee has established the following procedures for (i)
the receipt, retention, and treatment of complaints regarding accounting, internal accounting
controls, or auditing matters and (ii) the confidential, anonymous submission by employees
concerning questionable accounting or auditing matters.
Interested parties may report complaints regarding accounting, internal accounting controls, or
auditing matters involving Brookfield Homes by writing to the Chairman of the Audit Committee,
Brookfield Homes Corporation, 12865 Pointe Del Mar, Suite 200, Del Mar, CA, 92014. Complaints will
be reviewed and investigated as appropriate. Employees who wish to submit concerns regarding
questionable accounting or auditing matters and who wish to do so confidentially and anonymously,
may follow the procedures described above, omitting any return address or other identifying
feature.
Procedures Regarding Director Candidates Recommended by Stockholders
The Governance and Nominating Committee will consider a candidate recommended for the board of
directors by stockholders owning at least 10% of the outstanding shares of the Company if such
recommending stockholder or stockholders follow the procedures set forth below. In order to
recommend a nominee for a director position, a stockholder must be a stockholder of record at the
time it gives its notice of recommendation and must be entitled to vote for the election of
directors at the meeting at which such nominee will be considered. Stockholder recommendations must
be made pursuant to written notice delivered to or mailed and received at the principal executive
offices of the Company (i) in the case of a nomination for election at an annual meeting, not less
than 120 days nor more than 150 days prior to the first anniversary of the date of the Companys
notice of annual meeting for the preceding years annual meeting; and (ii) in the case of a special
meeting at which directors are to be elected, not later than the close of business on the tenth day
following the earlier of the day on which notice of the date of the meeting was mailed or public
disclosure of the date was made. In the event that the date of the annual meeting is changed by
more than 30 days from the anniversary date of the preceding years annual meeting, the stockholder
13
notice described above will be deemed timely if it is received not later than the close of business
on the tenth day following the earlier of the date on which notice of the date of the meeting was
mailed or public disclosure was made of the date.
The stockholder notice must set forth the following:
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As to the person the stockholder proposes to
nominate for election as a director, all
information relating to such person that is
required to be disclosed or is otherwise
required pursuant to Regulation 14(a) under the
Securities Exchange Act of 1934, as amended
(the Exchange Act), which must include the
written consent of the nominee to serve as a
director if elected; |
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|
As to the nominating stockholder, such
stockholders name and address as they appear
on the Companys books, the class and number of
shares of the Companys common stock which are
beneficially owned by such stockholder and
which are owned of record by such stockholder;
and |
|
|
As to any other beneficial owner of the stock
on whose behalf the nomination is made, the
name and address of such person and the class
and number of shares of the Companys common
stock they beneficially own. |
In addition to complying with the foregoing procedures, any stockholder nominating a director must
also comply with all applicable requirements of the Exchange Act and the rules and regulations
thereunder.
The Governance and Nominating Committee is directed to determine the appropriate characteristics,
skills and experience for each director position and for the board as a whole. Directors should
possess the highest personal, professional and ethical standards, integrity and values, and be
committed to representing the long-term interests of the stockholders. If a director candidate is
recommended by a stockholder, the Governance and Nominating Committee expects that it would
evaluate such candidate in the same manner it evaluates director candidates identified by the
Committee.
Meetings of the Board
The board of directors meets at least once in each quarter, with additional meetings held when
appropriate. The board also annually reviews and approves our business plan and long-term strategy.
In addition, directors are expected to attend the annual meeting of stockholders. During the 2005
fiscal year, the board met five times, including four regularly scheduled quarterly meetings and
one special meeting, and acted once by written consent. Each director attended 100 percent of the
board and committee meetings for which they were a member during the 2005 fiscal year with the
exception of two directors who were unable to attend one board meeting out of five board meetings
for which they were members. In accordance with our policy, each director who was a director at
the time, attended the annual meeting of stockholders held in May 2005. Four regular meetings are
scheduled for 2006. Meeting frequency and agenda items may change depending on the opportunities or
risks that we are facing.
At the time of each regularly scheduled board meeting, the non-management directors as well as the
independent directors ordinarily will each meet separately for a period of time. The Presiding
Director will preside over both non-management and independent director sessions.
Committees of the Board
The board of directors believes that committees assist in the effective functioning of the board
and that the composition of board committees should ensure that the views of independent directors
are effectively represented. The board has three committees: the Governance and Nominating
Committee, the Audit Committee and the Management Resources and Compensation Committee. Each
committee operates pursuant to a written charter. Each charter is posted on our website under the
Corporate Governance link and is available in print to any stockholder who so requests. Special
committees may be formed from time to time as required to review particular matters or
transactions. While the board retains overall responsibility for corporate governance matters, the
Governance and Nominating Committee, the Audit Committee and the Management Resources and
Compensation Committee each have specific responsibilities for certain aspects of corporate
governance as described below.
Governance and Nominating Committee
The Governance and Nominating Committee is appointed by the board of directors to assist the board
in carrying out its responsibilities by reviewing corporate governance and board nominee issues and
making recommendations to the board as appropriate. In particular, the Committee is responsible for
identifying individuals qualified to become board members consistent with criteria approved by the
board, recommending to the board proposed
14
nominees for election to the board at the next annual meeting of stockholders, developing and
recommending to the board corporate governance principles, and overseeing the evaluation of the
board and management. The Committees Charter is available on our website at
www.brookfieldhomes.com. The Governance and Nominating Committee is comprised of three directors:
David M. Sherman (Chairman), Robert A. Ferchat and Bruce T. Lehman. Each member of the Governance
and Nominating Committee has been determined by the board to be independent within the meaning of
the NYSE Rules. The Governance and Nominating Committee met twice during the 2005 fiscal year.
Audit Committee
We have a separately designated Audit Committee established in accordance with the Exchange Act.
The Audit Committee is appointed by the board of directors to assist it in monitoring: (1) the
integrity of our financial statements, including audits thereof; (2) our accounting and financial
reporting processes and system of internal controls and procedures for financial reporting and
accounting compliance; (3) the independent auditors qualifications and independence; (4) the
performance of our internal audit function and independent auditors; (5) our compliance with legal
and regulatory requirements; (6) our relationship with the independent auditors; and (7) our
principal financial risks and the processes employed to manage such risks. The Audit Committee of
the board is currently comprised of three directors: Robert A. Ferchat (Chairman), Joan H. Fallon
and Robert L. Stelzl. Each member of the Audit Committee has been determined by the board to be
independent and financially literate within the meaning of the NYSE Rules and SEC Rules. The
board has determined that the Audit Committee Chairman, Mr. Ferchat, is an audit committee
financial expert within the meaning of such rules. The Audit Committee met four times during the
2005 fiscal year.
Management Resources and Compensation Committee
The Management Resources and Compensation Committee is appointed by the board of directors to
assist the board in carrying out its responsibilities by reviewing management resources and
compensation issues and making recommendations to the board as appropriate. In particular, the
Committee has direct responsibility to review and approve corporate goals and objectives relevant
to CEO compensation; evaluate the CEOs performance in light of those goals and objectives; either
as a committee or together with the other independent directors, determine and approve the CEOs
compensation level based on this evaluation; and make recommendations to the board with respect to
non-CEO compensation, incentive-compensation plans and equity-based plans. The Management
Resources and Compensation Committee is comprised of the following three directors: Bruce T. Lehman
(Chairman), David M. Sherman and Robert L. Stelzl. Each member of the Management Resources and
Compensation Committee has been determined by the board to be independent within the meaning of the
NYSE Rules. The Management Resources and Compensation Committee met twice during the 2005 fiscal
year.
15
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Management Resources and Compensation Committee operates pursuant to a written Management
Resources and Compensation Committee Charter, which was approved and adopted by the board of
directors. Pursuant to the Charter, the Committee presents the following report with respect to
executive compensation, which relates to the compensation arrangements for the Companys executive
officers (the Senior Corporate Executives). Additional disclosure is provided in this report
regarding the compensation arrangements for the senior operating employees of our business units,
none of whom are executive officers of the Company (the Senior Operating Management).
Executive compensation is determined based on the relative roles and responsibilities of the Senior
Corporate Executive as compared to other executives in the Company and the performance of the
executive management collectively in meeting the Companys goal of enhancing shareholder value. A
specific objective of the Company is to attract and retain highly qualified and motivated
individuals and to encourage a strong team approach. Accordingly, compensation levels are
monitored to ensure they meet the Companys objectives and are competitive within the homebuilding
industry.
The compensation arrangements of the Company for its Senior Corporate Executives are focused on
rewarding performance and are comprised of three components: base salary, short-term incentives and
long-term ownership participation. The compensation arrangements of the Company for its Senior
Operating Management teams are focused on rewarding performance in their business unit and comprise
base salary and participation in the net income of their business unit.
The Company emphasizes improving long-term shareholder value, represented by the growth in the
value of the Companys common stock, as the principal measure of success of the Company.
Accordingly, the Companys compensation policies are designed to provide an overall competitive
compensation package with a high proportion weighted to future value creation and long-term
ownership participation. This is achieved for the Senior Corporate Executives by maintaining base
salaries and cash bonus awards below the median level of total cash compensation in return for
enhanced opportunities to participate in the growth in value of the Companys common stock, and for
Senior Operating Management teams, by providing the opportunity to
participate in the long-term
value creation through a participation in the net income of their business unit. For Senior
Corporate Executives, this results in stock options and deferred share units being allocated at a
level at the median for similar companies. Senior Operating Management teams participation in the
net income of their business unit align them with shareholders in participating in the return from
the assets they manage at a level higher than the upper quartile level for similar companies. These
plans are more fully described below under Long-Term Share Ownership and Senior Operating
Management Long-Term Participation Plan.
Base Salaries
Base salaries for the Companys Senior Corporate Executives and Senior Operating Management teams
are reviewed annually to ensure that they reflect the relative contribution of each individual. The
Company believes that base salaries for the Senior Corporate Executives and Senior Operating
Management teams should be set below the median level for comparable companies within the
homebuilding industry, in return for the opportunity for these individuals to participate at a
higher level in the long-term share ownership plans and management participation plans. In order to
foster a team-based approach, which the Company believes is fundamental to meeting its long-term
objectives, the difference between the base salaries of the CEO and the other senior executives is
significantly less than in other companies.
Short-Term Incentives
The Companys short-term incentive plan for Senior Corporate Executives is comprised of a cash
bonus award. Cash bonus awards are determined based primarily on the Senior Corporate Executives
performance in meeting the Companys overall business plan objectives. Similar to the Companys
philosophy towards base salaries, the difference between the cash bonus awards for the CEO and CFO
is relatively small. The performance of the Company is measured by the achievement of financial and
other objectives. In order to further align management objectives with those of the shareholder,
the CEO and CFO may elect to receive all or a portion of their annual bonus awards in deferred
share units of the Company, as described below under Long-Term Share Ownership. For 2005, the
Committee considered the Companys performance, the Senior Corporate Executives achievement in
meeting the Companys business plan goals which were set by the Compensation Committee at the
beginning of the 2005 fiscal year, and the factors considered above, in awarding 2005 cash bonuses.
16
Long-Term Share Ownership
Long-term share ownership plans for Senior Corporate Executives are intended to reward them based
on increases in the value of the Companys common stock. The purpose of these arrangements is to
achieve a commonality of interest between shareholders and management and to motivate them to
improve the Companys long-term financial success, measured in terms of enhanced shareholder wealth
over the long term.
The Companys long-term share ownership plans for Senior Corporate Executives consist of two
components as follows:
a) |
|
A stock option plan under which the Company may grant options to purchase shares of the
Companys common stock at the market price on the day the options are granted. A maximum of
two million shares (7.3% of the issued and outstanding shares of the Company at February 15,
2006) are authorized for issuance under the plan of which 900,375 remain available for future
issuance as of February 15, 2006. Upon exercise of a vested option and upon payment to the
Company of the exercise price, participants will receive one share of the Companys common
stock. The committee may permit participants to, rather than exercising an in-the-money option
(in-the-money means the market value of shares under the option exceeds the exercise price
of the options prior to related income taxes), receive an amount either in cash or in shares
equal to the difference between the market price of the shares underlying the options and the
exercise price of the option. For 2005, the number of options granted to Senior Corporate
Executives totaled 115,000 including shares granted as a special allocation reflecting the
performance of the Company in 2005 and the achievement of the Senior Corporate Executives in
meeting 2005 business plan goals. |
b) |
|
A deferred share unit plan under which the CEO and CFO may, at their option, receive up to
all of their annual bonus awards in the form of deferred share units. The annual bonus awards
are converted to units based on the closing price of the Companys shares on the New York
Stock Exchange on the date of the award. The portion of the annual bonus award elected to be
received in units by the executive may, at the discretion of the board, be increased by a
factor of up to two times for purposes of calculating the number of units to be allocated
under the plan. An executive who holds units will receive additional units as dividends are
paid on shares of the Companys common stock, on the same basis as if the dividends were
reinvested. Participants are only allowed to redeem vested units upon cessation of employment
through retirement, termination or death. The cash value of the units when redeemed will be
equivalent to the closing price on the NYSE of an equivalent number of shares of the Companys
common stock. There will be no shares of the Companys common stock issued in connection with
units allocated. Under no circumstances will units be considered shares of common stock, or
entitle any participant to the exercise of voting rights. For 2005, the CEO and CFO each
elected to receive all of their annual bonus in the form of deferred share units, representing
6,154 units and 3,846 units, respectively. |
Senior
Operating Management Long-Term Participation Plan
Certain Senior Operating Management Employees, none of whom are executive officers of the Company,
participate in the Senior Operating Management Long-Term Participation Plan. In 1996, when
operations in California were set-up, this Plan was established to attract and retain
entrepreneurial management teams to profitably manage and grow our business operations through a
decentralized local management structure. The Plan provides total compensation that is exceptional
when business unit returns are exceptional, drives performance and helps retain entrepreneurial
operating management teams. For 2005, there were 30 participants in the Plan.
The Plan provides for participation in a business units net income by the business unit management
team on the following basis 10% of net income after a base return on assets is exceeded and
corporate overhead is covered (the base return), increasing to 15% of net income once the base
return plus 5% is exceeded. No incentive is paid until the base return is exceeded. Returns are
measured on a net income basis upon approval of the year end financial statements. The base return
was established at a level that is intended to encourage a conservative investment approach, rather
than providing an incentive for management to pursue high-risk investments in order to exceed a
high base return before they participate.
In order to encourage senior management retention and a longer term focus on value creation,
amounts that individuals receive under the Plan vest over a four year period at a rate of 40% upon
the approval of the year end financial statements, with the remaining 60% vesting over three years,
annually thereafter, at the rate of 50.0%, 33.3% and 16.7%, respectively. Our senior operating
management retention rate provides stability and we believe has brought a longer term value
creation focus to our operations.
17
2005 Compensation for Chief Executive Officer
Ian G. Cockwells compensation for the Companys 2005 fiscal year consisted of an annual base
salary, bonus and participation in the stock option plan and reinvestment of his bonus in the
deferred share unit plan. This compensation was set on the basis of the Companys executive
compensation policy and the factors described above.
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MANAGEMENT RESOURCES & COMPENSATION COMMITTEE |
|
|
Bruce T. Lehman, Chairman |
|
|
David M. Sherman |
|
|
Robert L. Stelzl |
Compensation Committee Interlocks and Insider Participation
There are no relationships requiring disclosure under this section.
18
AUDIT COMMITTEE REPORT
The Audit Committee operates pursuant to a written Audit Committee Charter. A copy of the
Audit Committee Charter has been posted on our website under the Corporate Governance link. Please
refer to the section of this proxy statement entitled Information Regarding the Board of Directors
Committees of the Board Audit Committee for a description of the Audit Committees primary
duties and responsibilities.
The Audit Committee has reviewed and discussed with management the Companys audited consolidated
financial statements for the fiscal year ended December 31, 2005. Further, the Audit Committee has
discussed with the Companys independent auditor, the matters required to be discussed by Auditing
Standards Board Statement on Auditing Standards No. 61, as amended. Finally, the Audit Committee
has received and reviewed the written disclosures and the letter from the independent auditor
required by the Independence Standards Board Independence Standard No. 1, as amended, and has
discussed the auditors independence with the auditor. After consideration, the Audit Committee
has determined that the services related to the fees earned by the independent auditor under the
heading All Other Fees below are compatible with the auditors independence.
Based on its review and discussion as described above, the Audit Committee has recommended to the
board of directors that the audited financial statements for fiscal year 2005 be included in the
Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2005. Further, the
Audit Committee approved the engagement of Deloitte & Touche LLP as the Companys independent
auditor for the fiscal year ending December 31, 2006.
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AUDIT COMMITTEE |
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Robert A. Ferchat, Chairman |
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Joan H. Fallon |
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Robert L. Stelzl |
PROPOSAL TWO RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Deloitte & Touche LLP audited our financial statements for the fiscal years ended December 31,
2005 and 2004 and the Audit Committee has appointed Deloitte & Touche as our independent auditors
for the fiscal year ending December 31, 2006. In the event that ratification of this appointment of
auditors is not approved by a majority of the shares of common stock voting on this Proposal, the
Audit Committee will review its future appointment of independent auditors.
Representatives of Deloitte & Touche attend all meetings of the Audit Committee. The Audit
Committee reviews all services performed by Deloitte & Touche, as well as the fees charged by
Deloitte & Touche for such services. Additional information concerning the Audit Committee and its
activities with Deloitte & Touche can be found in this proxy statement under the headings
Information Regarding the Board of Directors Committees of the Board Audit Committee on
page 15 and Audit Committee Report on page 19.
A representative of Deloitte & Touche plans to be present at the Annual Meeting and will have an
opportunity to make a statement and to respond to appropriate questions from stockholders.
Fees Paid to Deloitte & Touche LLP
The following table shows the fees that we paid or accrued for the audit and other services
provided by Deloitte & Touche during fiscal years 2005 and 2004:
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2005 |
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2004 |
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Audit Fees |
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$ |
491,000 |
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$ |
416,000 |
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Audit-Related Fees |
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249,000 |
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Tax Fees |
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All Other
Fees |
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29,000 |
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59,000 |
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Total |
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$ |
520,000 |
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$ |
724,000 |
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Audit Fees include the fees for the audit of our consolidated financial statements (including
quarterly reviews), the audit of our internal controls in connection with section 404 of the
Sarbanes-Oxley Act of 2002, and the audits of our 401K plan and certain subsidiaries.
19
Audit Related Fees include fees billed for assistance in preparing for Section 404 of the
Sarbanes-Oxley Act of 2002 and for consultation on accounting matters.
All Other Fees consisted of fees related to services provided in connection with property taxes on
our housing and land assets.
Pre-Approval Policies
Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility
for appointing, setting compensation and overseeing the work of the independent auditor. In
recognition of this responsibility, the Audit Committee has established a policy to pre-approve
audit and permissible non-audit services provided by the independent auditor.
In connection with the engagement of the independent auditor for the 2006 fiscal year, the Audit
Committee pre-approved specifically described services that are within the four categories of
services listed below, including the pre-approval of fee limits for the specifically described
services within each category. The Audit Committees pre-approval process of specific services and
fees includes a review of specific services to be performed, a review of fees incurred for such
services in the past, a review of expected fees to be incurred in fiscal year 2006 and a comparison
of fees incurred by other homebuilders for similar services. The term
of any pre-approval is 12 months from the date of the pre-approval, unless the Audit Committee specifically provides for a
different period. Fees for any of the above services that will exceed the pre-approval fee limits
must be separately approved by the Audit Committee. During the year, circumstances may arise when
it may become necessary to engage the independent auditor for additional services not contemplated
in the original pre-approval. In those instances, the Audit Committee requires separate
pre-approval before engaging the independent auditor.
1. |
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Audit Services include audit work performed in the preparation of financial statements
(including quarterly reviews), as well as work that generally only the independent auditor can
reasonably be expected to provide, including comfort letters, statutory audits, and attest
services. |
2. |
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Audit Related Services are for assurance and related services that are traditionally
performed by the independent auditor, including due diligence related to mergers and
acquisitions, employee benefit plan audits, special procedures required to meet certain
regulatory requirements and consultation regarding financial accounting and/or reporting
standards. |
3. |
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Tax Services include all services performed by the independent auditors tax personnel except
those services specifically related to the audit of the financial statements, and include fees
in the areas of tax compliance, tax planning, and tax advice. |
4. |
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All Other Services are those associated with permitted services not included in the other
categories. |
The Audit Committee may delegate pre-approval authority to one or more of its members. The member
or members to whom such authority is delegated shall report any pre-approval decisions to the Audit
Committee at its next scheduled meeting. The Audit Committee may not otherwise delegate its
responsibilities to pre-approve services performed by the independent auditor to management. No
services were approved by the Audit Committee pursuant to the de minimis exception to the
pre-approval requirements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF APPOINTMENT OF DELOITTE &
TOUCHE LLP AS BROOKFIELD HOMES INDEPENDENT AUDITORS FOR 2006.
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OTHER MATTERS
Management and the board of directors do not know of any matters other than those described in
this proxy statement which will be presented for action at the meeting. If any other matters
properly come before the meeting, or any adjournments, the person or persons voting the proxies
will vote them in accordance with their best judgment.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors, certain of our officers, and persons
who own more than 10 percent of a registered class of our equity securities to file reports of
ownership and changes in ownership with the SEC. Officers, directors and greater than 10 percent
stockholders are required by SEC regulations to furnish us with copies of all forms they file
pursuant to Section 16(a). Based solely on our review of the copies of such forms received by us,
we believe that all filing requirements applicable to our officers, directors and greater than 10
percent beneficial owners were complied with during the year ended December 31, 2005.
STOCKHOLDERS PROPOSALS FOR 2007 ANNUAL MEETING
No stockholder proposals were made for the 2006 Annual Meeting. Any stockholder who intends to
present a proposal for action at our 2007 Annual Meeting of Stockholders, and to have us include
such proposal in the proxy soliciting materials must deliver a copy of the proposal to us not later
than November 15, 2006. Such proposal must comply with all applicable rules of the Securities and
Exchange Commission. Submitting a stockholder proposal does not guarantee that we will include it
in our proxy statement. The Governance and Nominating Committee reviews all stockholder proposals
and makes recommendations to the board of directors for action on such proposals.
For any proposal that is not submitted for inclusion in the proxy statement for our 2007 Annual
Meeting, but is instead sought to be presented directly at our 2007 Annual Meeting, SEC rules
permit proxy holders to vote proxies in their discretion if the Company: (1) receives notice of the
proposal before the close of business on January 29, 2007, and advises stockholders in the proxy
statement for the 2007 Annual Meeting about the nature of the matter and how the proxy holders
intend to vote on such matter; or (2) does not receive notice of the proposal prior to the close of
business on January 29, 2007. Notices of intention to present proposals at the 2007 Annual Meeting
should be addressed to Shane D. Pearson, Vice President and Secretary, Brookfield Homes
Corporation, 12865 Pointe Del Mar, Suite 200, Del Mar, CA, 92014.
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By Order of the Board of Directors, |
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Shane D. Pearson |
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Vice President and Secretary |
Fairfax, Virginia
March 15, 2006
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BROOKFIELD HOMES CORPORATION 2006 PROXY
ANNUAL MEETING OF STOCKHOLDERS MAY 3, 2006
COMMON STOCK
Brookfield Homes Corporation
8500 Executive Park Avenue, Suite 300, Fairfax, VA, 22031
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby nominates, constitutes and appoints J. Bruce Flatt and Ian G. Cockwell,
and each of them, attorneys, agents and proxies of the undersigned, with full power of
substitution, to represent and to vote as designated on the reverse side of this card on each of
the following matters, all shares of Common Stock of Brookfield Homes Corporation (the Company),
held of record by the undersigned at the close of business on March 6, 2006, at the Annual Meeting
of Stockholders to be held on May 3, 2006, or any adjournments thereof.
PLEASE SIGN AND DATE ON REVERSE SIDE.
Please mark your votes as in this example. ý
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FOR all nominees
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WITHHOLD
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listed at right (except
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AUTHORITY to
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as marked to the
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vote for all nominees
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contrary below)
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listed at right
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Nominees:
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Ian G. Cockwell |
1. Election of Directors
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¨
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¨
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Joan H. Fallon |
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Robert A. Ferchat |
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J. Bruce Flatt |
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Bruce T. Lehman |
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Alan Norris |
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Timothy R. Price |
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David M. Sherman |
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Robert L. Stelzl |
(INSTRUCTIONS: To withhold authority to vote for any individual nominee write that nominees name
on the line below.)
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2.
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Ratification of |
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Appointment of
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FOR
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AGAINST
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ABSTAIN
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Independent Auditors
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¨
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¨ |
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3. In their discretion, the proxies are authorized to vote in accordance with their judgment
on other business properly brought before the Annual Meeting or any adjournment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES AND FOR THE RATIFICATION OF THE
APPOINTMENT OF INDEPENDENT AUDITORS. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE NOMINEES AND FOR THE RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS.
The undersigned hereby ratifies and confirms all that said attorneys and proxies, or any of
them, or their substitutes, shall lawfully do or cause to be done by virtue hereof, and hereby
revokes any and all proxies heretofore given by the undersigned to vote at said meeting. The
undersigned acknowledges receipt of the notice of said Annual Meeting and the proxy statement
accompanying said notice.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.
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(Signature)
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(Signature)
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Date:
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Note: Please sign exactly as names appear herein. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee, or guardian, please give
full titles as such. If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by an authorized person.