SEC Info - American Homestar Corp - ‘DEFA14A’ on 9/4/96

SEC Info℠

Home

Help

Please Sign In

American Homestar Corp – ‘DEFA14A’ on 9/4/96

As of: Wednesday, 9/4/96 · Accession #: 950129-96-2083 · File #: 33-78630

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 9/04/96  American Homestar Corp            DEFA14A                1:114K                                   Bowne - Houston/FA

Additional Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEFA14A     American Homestar Corporation - Dated 10/11/96        33    173K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) American Homestar Corporation 1994 Amended and Restated Stock Compensation Plan Election of Directors Employment Contracts and Termination of Employment and Change-in-Control Arrangements Incentive Stock Options Restricted Stock Shareholders Agreement Stock Appreciation Rights
1	1st Page - Filing Submission
7	Election of Directors
8	Shareholders Agreement
15	Employment Contracts and Termination of Employment and Change-in-Control Arrangements
20	American Homestar Corporation 1994 Amended and Restated Stock Compensation Plan
25	Incentive Stock Options
26	Restricted Stock
27	Stock Appreciation Rights

DEFA14A 1st Page of 33 TOC ↑Top Previous Next ↓Bottom Just 1st

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

AMERICAN HOMESTAR CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:

--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

--------------------------------------------------------------------------------
(5) Total fee paid:

--------------------------------------------------------------------------------

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

--------------------------------------------------------------------------------
(3) Filing Party:

--------------------------------------------------------------------------------
(4) Date Filed:

--------------------------------------------------------------------------------

DEFA14A 2nd Page of 33 TOC 1st Previous Next ↓Bottom Just 2nd

AMERICAN HOMESTAR CORPORATION
2450 SOUTH SHORE BOULEVARD, SUITE 300
LEAGUE CITY, TEXAS 77573

September 6, 1996

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of
American Homestar Corporation (the "Company") to be held at South Shore Harbor
Hotel, 2500 South Shore Boulevard, League City, Texas 77573 on Friday, October
11, 1996, at 10:00 a.m. local time. The attached Notice of Annual Meeting and
Proxy Statement fully describe the formal business to be transacted at the
Meeting, which includes the election of eight directors of the Company, an
amendment to the Company's 1994 Stock Compensation Plan (the "Stock Compensation
Plan") and ratification of the selection of independent certified public
accountants. We have also enclosed a copy of the Company's Annual Report for the
fiscal year ended May 31, 1996.

The Company's Board of Directors believes that a favorable vote for each
person nominated to serve as a director of the Company, for the amendment to the
Stock Compensation Plan and for ratification of the selection of KPMG Peat
Marwick LLP as independent certified public accountants are in the best
interests of the Company and its shareholders and unanimously recommends a vote
"FOR" each nominee, "FOR" the amendment and "FOR" such ratification.
Accordingly, we urge you to review the accompanying material carefully and to
return the enclosed Proxy promptly.

Please sign, date and return the enclosed Proxy without delay. If you
attend the Meeting, you may vote in person even if you have previously mailed a
Proxy.

Sincerely,

/s/ FINIS F. TEETER

Finis F. Teeter
Chairman of the Board

DEFA14A 3rd Page of 33 TOC 1st Previous Next ↓Bottom Just 3rd

AMERICAN HOMESTAR CORPORATION
2450 SOUTH SHORE BOULEVARD, SUITE 300
LEAGUE CITY, TEXAS 77573

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 11, 1996

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of American Homestar Corporation, a Texas corporation (the
"Company"), will be held at South Shore Harbor Hotel, 2500 South Shore
Boulevard, League City, Texas 77573, on Friday, October 11, 1996, 10:00 a.m.
local time. A Proxy and a Proxy Statement for the Meeting are enclosed.

The Meeting is for the following purposes:

(1) To elect eight members of the Board of Directors for terms
expiring in 1997.

(2) To amend the Company's 1994 Stock Compensation Plan.

(3) To consider and ratify the selection of the Company's independent
certified public accountants.

(4) To transact any other business that may properly come before the
Meeting or any adjournments thereof.

The close of business on August 26, 1996 has been fixed as the record date
for determining shareholders entitled to notice of and to vote at the Meeting or
any adjournments thereof. For a period of at least ten days prior to the
Meeting, a complete list of shareholders entitled to vote at the Meeting will be
open to the examination of any shareholder during ordinary business hours at the
offices of the Company at 2450 South Shore Boulevard, Suite 300, League City,
Texas 77573.

Information concerning the matters to be acted upon at the Meeting is set
forth in the accompanying Proxy Statement.

SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING IN PERSON ARE
URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

By Order of the Board of Directors

/s/ CRAIG A. REYNOLDS

Craig A. Reynolds
Secretary
Houston, Texas
September 6, 1996

DEFA14A 4th Page of 33 TOC 1st Previous Next ↓Bottom Just 4th

AMERICAN HOMESTAR CORPORATION
2450 SOUTH SHORE BOULEVARD, SUITE 300
LEAGUE CITY, TEXAS 77573

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 11, 1996

This Proxy Statement is being first mailed on or about September 6, 1996,
to shareholders of American Homestar Corporation, a Texas corporation (the
"Company"), by the Board of Directors to solicit proxies (the "Proxies") for use
at the Annual Meeting of Shareholders (the "Meeting") to be held at South Shore
Harbor Hotel, 2500 South Shore Boulevard, League City, Texas 77573, on Friday,
October 11, 1996, at 10:00 a.m., local time, or at such other time and place to
which the Meeting may be adjourned.

The purpose of the Meeting is to consider and act upon (i) the election of
eight directors for terms expiring in 1997; (ii) an amendment to the Company's
1994 Stock Compensation Plan (the "Stock Compensation Plan"); (iii) the
ratification of the selection of KPMG Peat Marwick LLP as the Company's
independent certified public accountants; and (iv) such other matters as may
properly come before the Meeting or any adjournments thereof.

All shares represented by valid Proxies, unless the shareholder otherwise
specifies, will be voted (i) FOR the election of the eight persons named under
"Election of Directors" as nominees for election as directors of the Company for
terms expiring in 1997; (ii) FOR the amendment to the Stock Compensation Plan;
(iii) for the ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent certified public accountants; and (iv) at the discretion
of the Proxy holders with regard to any other matter that may properly come
before the Meeting or any adjournment thereof.

Where a shareholder has appropriately specified how a Proxy is to be voted,
it will be voted accordingly. Any shareholder executing a Proxy retains the
right to revoke it at any time prior to exercise at the Meeting. A Proxy may be
revoked by delivery of written notice to the Secretary of the Company, by
execution and delivery of a later Proxy or by voting in person at the Meeting.

RECORD DATE AND VOTING SECURITIES

The record date for determining the shareholders entitled to vote at the
Meeting was the close of business on August 26, 1996 (the "Record Date"), at
which time the Company had issued and outstanding approximately 8,620,545 shares
of Common Stock, par value $.05 per share (the "Common Stock"). The shares of
Common Stock constitute the only outstanding voting securities of the Company
entitled to be voted at the Meeting.

QUORUM AND VOTING

The presence at the Meeting, in person or by Proxy, of the holders of a
majority of the issued and outstanding shares of Common Stock is necessary to
constitute a quorum. Each share of Common Stock represented at the Meeting in
person or by proxy will be counted toward a quorum. In deciding all questions
and other matters, a holder of Common Stock on the Record Date will be entitled
to cast one vote for each share of Common Stock registered in such holder's
name.

Approval of Proposal No. 1 to elect the eight nominees to serve as members
of the Board of Directors for terms expiring at the Company's Annual Meeting of
Shareholders in 1997 requires the affirmative vote of a plurality of the shares
of Common Stock present or represented at the Meeting and entitled to vote
thereon. Votes may be cast in favor or withheld with respect to such proposal.
Votes that are withheld will be counted

DEFA14A 5th Page of 33 TOC 1st Previous Next ↓Bottom Just 5th

toward a quorum, but will be excluded entirely from the tabulation for such
proposal and, therefore, will not affect the outcome of the vote on such
proposal.

In order to comply with certain rules promulgated under the Internal
Revenue Code and of the Nasdaq National Market, approval of Proposal No. 2 to
amend the Stock Compensation Plan requires the affirmative vote of a majority of
the shares of Common Stock present or represented at the Meeting and entitled to
vote thereon. Abstentions on the proposal may be specified and will have the
same effect as a vote against such proposal.

Approval of Proposal No. 3 to ratify the selection of KPMG Peat Marwick LLP
as the Company's independent certified public accountants requires the
affirmative vote of a majority of the shares present or represented at the
Meeting and entitled to vote thereon. Abstentions on such proposal may be
specified and will have the same effect as a vote against such proposal.

The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares held by brokers or nominees as to which they have no discretionary
power to vote on a particular matter and have received no instructions from the
beneficial owners or persons entitled to vote thereon), if any, as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum. However, for purposes of determining the outcome of any matter requiring
discretionary voting, broker non-votes will be treated as not present and not
entitled to vote with respect to that matter (even though those shares are
considered entitled to vote for quorum purposes and may be entitled to vote on
other matters). Brokers or nominees have discretionary power to vote on
Proposals No. 1 and 3, but have no discretionary power to vote with respect to
Proposal No. 2. Accordingly, broker non-votes will not be counted with respect
to Proposal No. 2.

PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP

The following table sets forth information as of August 26, 1996, regarding
the beneficial ownership of Common Stock of the Company by (i) each person as a
group known by the Company to beneficially own 5% or more of the outstanding
shares of Common Stock, (ii) each director and nominee for director of the
Company, (iii) the Company's Named Executive Officers (as herein defined) and
(iv) the directors and executive officers of the Company as a group. The persons
named in the table have sole voting and investment power with respect to all
shares of capital stock owned by them, unless otherwise noted.

[Enlarge/Download Table]

NAME OF BENEFICIAL AMOUNT AND NATURE OF
OWNER OR GROUP BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------ -------------------- ----------------

Finis F. Teeter(1)(2)(3)............................ 1,511,103 17.5%
Laurence A. Dawson, Jr.(1)(3)(4).................... 1,329,337 15.4%
Craig A. Reynolds(5)................................ 79,188 *
Charles N. Carney, Jr.(5)........................... 153,144 1.8%
Jackie H. Holland(6)................................ 28,538 *
James J. Fallon(7).................................. 70,525 *
William O. Hunt(8).................................. 18,125 *
Jack L. McDonald(9)................................. 10,625 *
FMR Corp.(10)....................................... 480,375 5.6%
Directors and executive officers as a group (8
persons).......................................... 3,200,585 36.9%

---------------

* Less than 1%.

(1) The address of Finis F. Teeter is 2450 South Shore Boulevard, Suite 300,
League City, Texas 77573. The address of Laurence A. Dawson, Jr. is 2221
East Lamar Boulevard, Suite 790, Arlington, Texas 76006.

(2) Mr. Teeter's shares include 878,782 shares that are owned by Teeter
Investments, Ltd., a limited partnership in which Mr. Teeter is the
managing general partner, and 144,164 shares that are owned by

DEFA14A 6th Page of 33 TOC 1st Previous Next ↓Bottom Just 6th

the Teeter 1992 Trust, of which Mr. Teeter is trustee. Includes 5,000
shares that are purchasable, within 60 days, pursuant to an exercisable
option.

(3) These shareholders, along with the Teeter 1992 Trust, Charlotte A. Teeter,
Dwayne M. Teeter, Laurie A. Lowry, Stacy M. Dawson and Cami Dawson Boyd,
have entered into the Shareholders Agreement (as herein defined), pursuant
to which they have agreed to vote their shares to elect six designees of
the Teeter Group and the Dawson Group as directors. Therefore, with respect
to such matter, these shareholders collectively control the vote of
2,939,934 or 34.1% of the Common Stock.

(4) Mr. Dawson's shares include 762,500 shares that are owned by Dawson
Adventures, Ltd. ("DAL"), a limited partnership in which Mr. Dawson is the
managing general partner. Mr. Dawson has the sole power to dispose of all
of such shares but, pursuant to the terms of the DAL partnership agreement,
Mr. Dawson currently has the power to vote only 162,094 of such shares. In
addition, the beneficial ownership figure for Mr. Dawson includes 327,863
shares that are owned jointly with Mrs. Dawson. Mrs. Dawson is deemed to
beneficially own 162,094 shares that are owned by DAL by virtue of the fact
that she has the right to vote such shares pursuant to the partnership
agreement; however, she does not currently have the power to dispose of
such shares. Includes 5,000 shares that are purchasable, within 60 days,
pursuant to an exercisable option.

(5) Includes 3,750 shares that are purchasable, within 60 days, pursuant to an
exercisable option.

(6) Of these shares, 3,806 are subject to a stock restriction agreement with
the Company. Includes 1,500 shares that are purchasable pursuant to an
immediately exercisable stock option and 3,000 shares that are purchasable,
within 60 days, pursuant to an exercisable option.

(7) Of these shares, 18,163 are subject to a stock restriction agreement with
the Company. Includes 1,500 shares that are purchasable pursuant to an
immediately exercisable stock option and 3,000 shares that are purchasable,
within 60 days, pursuant to an exercisable option.

(8) Includes 10,625 shares that are purchasable pursuant to an immediately
exercisable stock option.

(9) All such shares are purchasable pursuant to an immediately exercisable
stock option.

(10) Pursuant to Schedule 13G, FMR Corp. was the beneficial owner of 480,375
shares, of which it has the sole power to vote or direct the vote of 34,125
shares at December 31, 1995. Such shares have been adjusted to reflect the
Company's 5 for 4 stock split on January 18, 1996.

DEFA14A 7th Page of 33 TOC 1st Previous Next ↓Bottom Just 7th

PROPOSAL NO. 1

ELECTION OF DIRECTORS

There are eight directors to be elected for terms expiring at the Company's
Annual Meeting of Shareholders in 1997 or until their successors have been
elected and qualified. It is intended that the names of the persons indicated in
the following table will be placed in nomination and that the persons named in
the Proxy will vote for their election. Each of the nominees has indicated his
willingness to serve as a member of the Board of Directors, if elected; however,
if any nominee becomes unavailable for election to the Board of Directors for
any reason not presently known or contemplated, the Proxy holders will have
discretionary authority to vote the Proxy for a substitute. Proxies cannot be
voted for more than eight nominees.

The nominees are as follows:

[Download Table]

NAME AGE POSITION
---- --- --------

Finis F. Teeter(1)............ 52 Chairman of the Board and Co-Chief Executive
Officer
Laurence A. Dawson, Jr.(1).... 52 President, Co-Chief Executive Officer and
Director
Craig A. Reynolds............. 47 Executive Vice President, Chief Financial
Officer, Secretary and Director
Jackie H. Holland............. 49 Vice President, Treasurer and Director
Charles N. Carney, Jr......... 41 Vice President and Director
James J. Fallon............... 56 Vice President and Director
William O. Hunt(2)(3)......... 62 Director
Jack L. McDonald(2)(3)........ 63 Director

---------------

(1) Member of the Executive Committee

(2) Member of the Compensation Committee

(3) Member of the Audit Committee

Finis F. Teeter is a founder of the Company and has served as its Chairman
of the Board and Chief Executive Officer from 1971 until August 1993. Since
August 1993, Mr. Teeter has served as its Chairman of the Board and Co-Chief
Executive Officer. Prior to forming the Company, Mr. Teeter served in various
sales and sales management capacities with Teeter Mobile Homes from 1962 to 1969
and with Mobile Home Industries from 1969 to late 1970.

Laurence A. Dawson, Jr. has served as President, Co-Chief Executive Officer
and as a Director of the Company since August 1993. Mr. Dawson served as Chief
Executive Officer and Chairman of the Board of Oak Creek Homes, Inc. ("Oak
Creek") from its founding in 1983 until August 31, 1993. Mr. Dawson served as
Executive Vice President-Chief Operating Officer and in other executive
positions with Kaufman & Broad Home Systems, Inc. from 1972 to 1983. Mr. Dawson
is a director of the Manufactured Housing Institute and the Texas Manufactured
Housing Association. Mr. Dawson holds a Master of Business Administration degree
from Harvard University.

Craig A. Reynolds has served as Executive Vice President, Chief Financial
Officer and Secretary of the Company since joining the Company in 1982, and has
been a Director of the Company since 1985. Mr. Reynolds is a Certified Public
Accountant and holds a Master of Business Administration degree from Florida
Institute of Technology.

Jackie H. Holland has served as Vice President, Treasurer and as a Director
of the Company since August 1993. Mr. Holland has served as Vice President and
Chief Financial Officer of Oak Creek since 1989. Before joining Oak Creek, Mr.
Holland held various financial and general management positions with Palm

DEFA14A 8th Page of 33 TOC 1st Previous Next ↓Bottom Just 8th

Harbor Homes, Inc. from 1978 to 1989 and Redman Homes, Inc. from 1970 to 1978.
Mr. Holland holds a Bachelor of Science in Accounting degree from the University
of North Alabama.

Charles N. Carney, Jr. has served as Vice President of the Company since
June 1993 and as President of Nationwide Housing Systems, Inc., a subsidiary of
the Company (the retail division), since 1987. He has served as a Director of
the Company since August 1993. Mr. Carney has served in various sales, sales
management and senior sales management capacities with the Company since joining
its predecessor in 1977. Mr. Carney holds a Bachelor of Business Administration
degree from Eastern Kentucky University.

James J. Fallon has served as Vice President and as a Director of the
Company since August 1993 and as President of Oak Creek since December 1993.
Prior to that time, Mr. Fallon served in various general management capacities
with Oak Creek, Kaufman & Broad Home Systems, Inc., and Fleetwood Homes, Inc.
Mr. Fallon holds a Bachelor of Science in Electrical Engineering from Purdue
University.

William O. Hunt has served as a Director of the Company since July 1994.
Mr. Hunt has also served as Chairman of the Board, Chief Executive Officer and
President of Intellicall, Inc., a diversified telecommunications company
providing products and services to pay telephone networks on a worldwide basis,
since December 1992. From July 1989 through July 1992 (when it was sold to The
Allen Group, Inc. ("Allen")), Mr. Hunt was Chairman of the Board, Chief
Executive Officer and President of Alliance Telecommunications Corporation
("Alliance"), a privately-held corporation engaged in the manufacture and
service of wireless communications systems worldwide. From August 1990 to August
1993, Mr. Hunt served as Chairman of the Board of Hogan Systems, Inc. ("Hogan"),
a leading supplier of application software for the financial and banking
industry. Since August 1993, Mr. Hunt has served as Vice Chairman of Hogan. He
is also a director of Dr. Pepper Bottling Company of Texas and Allen, a firm
active in the automotive and mobile communications industry.

Jack L. McDonald has served as a Director of the Company since September
1994. From 1978 until his retirement in 1985, Mr. McDonald served as President
and Chief Operating Officer of Centex Corporation, a corporation involved in the
home-building, cement, oil and gas and general construction industries. Since
his retirement, he has been self-employed as a business consultant. Mr. McDonald
is also a director of Triangle Pacific Corp., Bally's Nevada, Inc., U.S. Homes
Corp. and AMRE, Inc.

SHAREHOLDERS AGREEMENT

Messrs. Dawson and Teeter and certain respective family members and
affiliates (the "Teeter Group" and the "Dawson Group," respectively, and the
"Groups," collectively), are parties to a shareholders agreement (the
"Shareholders Agreement"). The Shareholders Agreement generally restricts the
transferability of the Common Stock owned by the parties thereto and provides
for the joint management and control of the Company by Messrs. Teeter and
Dawson. The Shareholders Agreement provides that (i) the Teeter Group and Dawson
Group shall vote their shares to elect at least six designees of such Groups as
directors of the Company (with such designation right being forfeited by a Group
if it fails to have voting control of at least 750,000 shares of Common Stock
(subject to adjustment for stock splits, stock dividends, recapitalizations,
reorganizations and similar changes)) and (ii) the members of the Executive
Committee of the Board of Directors shall be designated by the directors
designated by the Groups. The Shareholders Agreement will automatically
terminate on July 12, 1997.

DEFA14A 9th Page of 33 TOC 1st Previous Next ↓Bottom Just 9th

BOARD OF DIRECTORS AND COMMITTEES

The business of the Company is managed under the direction of the Board of
Directors. The Board of Directors meets on a regularly scheduled basis to review
significant developments affecting the Company and to act on matters requiring
approval of the Board of Directors. It also holds special meetings when an
important matter requires action by the Board of Directors between scheduled
meetings. The Board of Directors met four times and acted by unanimous written
consent twice during fiscal 1996. During fiscal 1996, each member of the Board
of Directors participated in at least 75% of all Board of Directors and
applicable committee meetings held during the period for which he was a
director.

The Board of Directors has established audit, executive and compensation
committees to devote attention to specific subjects and to assist it in the
discharge of its responsibilities. The functions of those committees, their
current members and the number of meetings held during fiscal 1996 are described
below.

Audit Committee. The Audit Committee recommends to the Board of Directors
the appointment of the firm selected to be independent certified public
accountants for the Company and monitors the performance of such firm; reviews
and approves the scope of the annual audit and quarterly reviews and evaluates
with the independent certified public accountants the Company's annual audit and
annual consolidated financial statements; reviews with management the status of
internal accounting controls; evaluates problem areas having a potential
financial impact on the Company that may be brought to its attention by
management, the independent certified public accountants or the Board of
Directors; and evaluates all public financial reporting documents of the
Company. Messrs. Hunt and McDonald currently are members of the Audit Committee.
The Audit Committee met twice during fiscal 1996.

Compensation Committee. The Compensation Committee approves the
compensation of executive officers of the Company, establishes and monitors the
compensation policies of the Company, and administers the Stock Compensation
Plan. The Compensation Committee has the power to determine from time to time
the individuals to whom options will be granted, the number of shares to be
covered by each option and the times at which options will be granted. Messrs.
Hunt and McDonald currently are members of the Compensation Committee. The
Compensation Committee met four times and acted by unanimous written consent
four times during fiscal 1996.

Executive Committee. The Executive Committee is empowered to act in lieu of
the Board of Directors on any matter except where action of the Board of
Directors as a whole is expressly required by law or by the Articles of
Incorporation or Bylaws of the Company. Messrs. Teeter and Dawson currently are
members of the Executive Committee. The Executive Committee met eight times
during fiscal 1996.

The Company does not have a nominating committee. The functions customarily
attributable to a nominating committee are performed by the Board of Directors
as a whole.

PROPOSAL NO. 2

AMENDMENT TO THE STOCK COMPENSATION PLAN

The Board of Directors has unanimously approved an amendment to the Stock
Compensation Plan, subject to the approval of the shareholders, pursuant to
which the total number of shares of the Company's Common Stock subject thereto
will increase from 750,000 shares to 1,200,000 shares.

The Stock Compensation Plan provides for the grant of "incentive stock
options," as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), nonqualified stock options, restricted stock awards and
stock appreciation rights (collectively referred to as "Awards"). All of the
Company's employees, Independent Directors (as herein defined) and advisors are
eligible to receive nonqualified stock options, restricted stock awards and
stock appreciation rights under the Stock Compensation Plan, but only employees
of the Company are eligible to receive incentive stock options. As of August 26,
1996, approximately 1,300 persons were eligible for participation in the Stock
Compensation Plan. The Board of Directors has unanimously approved an amendment
to the Stock Compensation Plan, subject to the approval of the shareholders,
which increases the total number of shares of Common Stock subject thereto

DEFA14A 10th Page of 33 TOC 1st Previous Next ↓Bottom Just 10th

from 750,000 shares to 1,200,000 shares. As of August 26, 1996, options to
purchase 749,000 shares of Common Stock had been granted under the Stock
Compensation Plan, of which options to purchase 10,500 shares of Common Stock
had been exercised, options to purchase 674,625 shares of Common Stock remained
outstanding and had not yet been exercised and options to purchase 64,875 shares
of Common Stock remained available for grant. No grants of restricted stock or
stock appreciation rights have been made.

The Stock Compensation Plan must be administered by a committee of the
Board of Directors (the "Committee"), consisting of two or more non-employee
directors within the meaning of Rule 16b-3. The Plan is currently administered
by the Compensation Committee. The Committee has, subject to the terms of the
Stock Compensation Plan, the sole authority to grant Awards under the Stock
Compensation Plan (other than to Independent Directors), to construe and
interpret the Stock Compensation Plan and to make all other determinations and
take any and all actions necessary or advisable for the administration of the
Stock Compensation Plan.

Options are exercisable during the period specified in each option
agreement and are exercisable in installments pursuant to a vesting schedule to
be designated by the Committee. Restricted stock awards will give the recipient
the right to receive a specified number of shares of Common Stock contingent
upon remaining a Company employee for a specified period, as determined by the
Committee. Notwithstanding the provisions of any option agreement or restricted
stock agreement, options will become immediately exercisable and all
restrictions will immediately lapse with respect to any award of restricted
stock in the event of a change or threatened change in control of the Company
and in the event of certain mergers and reorganizations of the Company. No
options will remain exercisable later than ten years after the date of grant. In
addition, options may be subject to early termination within a designated period
following the optionee's cessation of service with the Company.

The aggregate fair market value of Common Stock with respect to which
incentive stock options are exercisable for the first time by any individual
during any calendar year may not exceed $100,000. The exercise price for
incentive stock options granted under the Stock Compensation Plan may be no less
than the fair market value of the Common Stock on the date of grant (or 110% of
the fair market value on the date of grant in the case of incentive stock
options granted to employees owning more than 10% of the Common Stock). The
exercise price for nonqualified options granted under the Stock Compensation
Plan will be in the discretion of the Committee.

The exercise price for any option may be paid (i) in cash, (ii) by
certified or cashier's check, (iii) if permitted by the Committee, in shares of
Common Stock valued at the then fair market value thereof, (iv) if permitted by
the Committee, by cash or certified or cashier's check for the par value of the
shares plus a promissory note for the balance of the purchase price, which note
will contain such terms and provisions as the Committee may approve, including
without limitation the right to repay the note partially or wholly with Common
Stock, (v) by delivery of a copy of irrevocable instructions from the
participant to a broker or dealer, reasonably acceptable to the Company, to sell
certain of the shares purchased upon exercise of the option or to pledge them as
collateral for a loan and promptly deliver to the Company the amount of sale or
loan proceeds necessary to pay such purchase price or (vi) in any other form of
valid consideration, as permitted by the Committee in its discretion. The
closing price of the Common Stock on August 26, 1996, as reported on the NASDAQ
National Market, was $22.25.

The Stock Compensation Plan provides for automatic grants of nonqualified
options to purchase 5,000 shares of Common Stock to Independent Directors upon
each such person's initial election to the Board of Directors. Each such option
(i) entitles the director to purchase shares of Common Stock at an exercise
price equal to the fair market value of the Common Stock on the date of grant,
(ii) is immediately exercisable and (iii) has a term of ten years. In addition,
each Independent Director will receive a nonqualified option to purchase 10,000
shares of Common Stock in the year following such person's initial term as an
Independent Director, if reelected, and every fourth year reelected thereafter.
Each of such options (i) entitles the director to purchase shares of Common
Stock at an exercise price equal to the fair market value of the Common Stock on
the date of grant, (ii) vests 25% annually, with the initial 25% becoming
exercisable on the date of grant of

DEFA14A 11th Page of 33 TOC 1st Previous Next ↓Bottom Just 11th

the option and an additional 25% exercisable on each of the first three
anniversaries of the grant date and (iii) has a term of ten years.

Summary of Certain Federal Income Tax Consequences Relating to Incentive
Stock Options. No taxable income is realized by a participant and no tax
deduction is available to the Company upon either the grant or exercise of an
incentive stock option. If a participant holds the shares acquired upon the
exercise of an incentive stock option for more than one year after the issuance
of the shares upon exercise of the incentive stock option and more than two
years after the date of the grant of the incentive stock option (the "holding
period"), the difference between the exercise price and the amount realized upon
the sale of the shares will be treated as a long-term capital gain or loss and
no deduction will be available to the Company. If the shares are transferred
before the expiration of the holding period, the participant will realize
ordinary income and the Company will be entitled to a deduction on the portion
of the gain, if any, equal to the difference between the incentive stock option
exercise price and the fair market value of the shares on the date of exercise
or, if less, the difference between the amount realized on the disposition and
the adjusted basis of the stock; provided however, that the deduction will not
be allowed if such amount exceeds the annual one million dollar limitation on
the deduction that an employer may claim for compensation of certain executives
pursuant to Section 162(m) of the Code (the "Deduction Limitation") and does not
satisfy an exception to the Deduction Limitation. Any further gain or loss from
an arm's-length sale or exchange will be taxable as a long-term or short-term
capital gain or loss depending upon the holding period before disposition.
Certain special rules apply if an incentive stock option is exercised by
tendering stock.

The difference between the incentive stock option exercise price and the
fair market value, at the time of exercise, of the Common Stock acquired upon
the exercise of an incentive stock option may give rise to alternative minimum
taxable income subject to an alternative minimum tax. Special rules also may
apply in certain cases where there are subsequent sales of shares in
disqualifying dispositions and to determine the basis of the stock for purposes
of computing alternative minimum taxable income on subsequent sale of the
shares.

Summary of Certain Federal Income Tax Consequences Relating to Nonqualified
Stock Options. No taxable income generally is realized by the participant upon
the grant of a nonqualified stock option, and no deduction generally is then
available to the Company. Upon exercise of a nonqualified stock option, the
excess of the fair market value of the shares on the date of exercise over the
exercise price will be taxable to the participant as ordinary income. Such
amount will also be deductible by the Company unless such amount exceeds the
Deduction Limitation and does not satisfy an exception to the Deduction
Limitation. The tax basis of shares acquired by the participant will be the fair
market value on the date of exercise. When a participant disposes of shares
acquired upon exercise of a nonqualified stock option, any amount realized in
excess of the fair market value of the shares on the date of exercise generally
will be treated as a capital gain and will be long-term or short-term, depending
on the holding period of the shares. The holding period commences upon exercise
of the nonqualified stock option. If the amount received is less than such fair
market value, the loss will be treated as a long-term or short-term capital
loss, depending on the holding period of the shares. The exercise of a
nonqualified stock option will not trigger the alternative minimum tax
consequences applicable to incentive stock options.

Summary of Certain Federal Income Tax Consequences Relating to Stock
Appreciation Rights. No taxable income will be realized by a participant upon
the grant of a stock appreciation right and no deduction will be available to
the Company. Upon the exercise of the stock appreciation right, the participant
will realize taxable income equal to the cash or the fair market value (on the
date of exercise) of the shares, or both, received, and the Company will be
entitled to a deduction unless such amount exceeds the Deduction Limitation and
does not satisfy an exception to the Deduction Limitation. The tax basis of any
shares received will be the fair market value on the date of exercise and, if
shares received are held for more than one year, the participant will realize
long-term capital gain or loss upon disposition.

Summary of Certain Federal Income Tax Consequences Relating to Restricted
Stock. Unless a participant otherwise elects to be taxed upon receipt of shares
of restricted stock under the Stock Compensation Plan, he must include in his
taxable income the difference between the fair market value of the shares and
the amount paid, if any, for the shares, as of the first date the participant's
interest in the shares is

DEFA14A 12th Page of 33 TOC 1st Previous Next ↓Bottom Just 12th

no longer subject to a substantial risk of forfeiture or such shares are
transferable. A participant's rights in restricted stock awarded under the Plan
are subject to a substantial risk of forfeiture if the rights to full enjoyment
of the shares are conditioned, directly or indirectly, upon the future
performance of substantial services by the participant. Where shares of
restricted stock received under the Stock Compensation Plan are subject to a
substantial risk of forfeiture, the participant can elect to report the
difference between the fair market value of the shares on the date of receipt
and the amount paid, if any, for the stock as ordinary income in the year of
receipt. To be effective, the election must be filed with the Internal Revenue
Service within 30 days after the date the shares are transferred to the
participant. The Company is entitled to a Federal income tax deduction equal in
amount to the amount includable as compensation in the gross income of the
participant unless such amount exceeds the Deduction Limitation and does not
satisfy an exception to the Deduction Limitation. The amount of taxable gain
arising from a participant's sale of shares of restricted stock acquired
pursuant to the Stock Compensation Plan is equal to the excess of the amount
realized on such sale over the sum of the amount paid, if any, for the stock and
the compensation element included by the participant in taxable income. For
stock held for more than one year, the participant will realize long-term
capital gain or loss upon disposition.

VOTE REQUIRED

The amendment to the Stock Compensation Plan requires the affirmative vote
of a majority of the shares of Common Stock present or represented at the
Meeting and entitled to vote thereon. If approved by the shareholders, such
amendment will be effective as of October 14, 1996. Unless otherwise instructed,
it is the intent of the persons named in the Proxy to vote all Proxies "FOR" the
adoption of this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
AMENDMENT TO THE STOCK COMPENSATION PLAN.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Company is engaged in a competitive and specialized industry and
believes that it must be able to attract and retain experienced, qualified
executives and key employees. The Company's executive compensation program for
fiscal 1997 was established by the Compensation Committee, comprised of the
Independent Directors.

Executive Compensation Policy

The Company's compensation policy is designed to support the overall
objective of enhancing value for the Company's shareholders by:

- Attracting, developing, rewarding and retaining highly qualified and
productive individuals.

- Directly relating compensation to both Company and individual
performance.

- Ensuring compensation levels that are externally competitive and
internally equitable.

- Encouraging executive stock ownership to enhance a mutuality of interest
with other shareholders.

The following is a description of the specific elements of the Company's
executive compensation and how each relates to the objectives and policy
outlined above. See also "Employment Contracts and Termination of Employment and
Change-in-Control Arrangements."

Base Salary. The Compensation Committee reviewed each executive officer's
salary. In determining appropriate salary levels, the Compensation Committee
considered individual performance, internal equity, as well as pay practices of
other companies relating to executives of similar responsibility.

Short-term Incentives. In fiscal 1996, the Co-Chief Executive Officers
qualified for annual bonuses based on the performance and profitability of the
entire Company. In fiscal 1996, all other executive officers were

DEFA14A 13th Page of 33 TOC 1st Previous Next ↓Bottom Just 13th

eligible for quarterly incentive and/or annual bonuses based on performance and
profitability of the operating division or unit over which that executive
exercised the most direct operating control.

Long-Term Incentives. The Company's long-term incentive compensation
philosophy is that long-term incentives should be related to improvement in
long-term shareholder value, thereby creating a mutuality of interest with
shareholders. In furtherance of this objective, the Company awards to its
executive officers stock options under the Stock Compensation Plan. Stock
options encourage and reward effective management, which results in long-term
corporate financial success, as measured by stock price appreciation. Stock
options generally are exercisable at the fair market value at the date of grant
and in five installments beginning one year after the date of grant. The Company
also has the ability under the Stock Compensation Plan to award other
stock-based compensation incentives, such as restricted stock and stock
appreciation rights, although it has not done so to date.

Rationale for Co-Chief Executive Officer Compensation. Prior to August
1993, Messrs. Teeter and Dawson had founded and were the principal shareholder,
Chairman, President and Chief Executive Officer of their respective companies.
In connection with the August 1993 combination of those companies and since that
time, Messrs. Teeter and Dawson have served as Co-Chief Executive Officers of
the Company. Their compensation packages have been designed to encourage
short-term and long-term performance in line with the interests of the Company's
shareholders. In addition, each has a significant stock ownership position in
the Company, as described elsewhere herein, and therefore, each has a
substantial incentive to enhance shareholders' interests and value.

For fiscal 1996, Messrs. Teeter and Dawson each had an annual base salary
of $180,000 and annual incentives as described above. For fiscal 1997, and
pursuant to separate employment agreements each has with the Company, their
respective base salary amounts remain unchanged, and incentive compensation is
on an annual basis; however, the Compensation Committee is currently reviewing
such employment agreements in order to extend the terms thereof and to evaluate
the compensation payable thereunder, which compensation may differ from the
compensation paid to Messrs. Teeter and Dawson for fiscal 1996.

This report is submitted by the members of the Compensation Committee as of
the end of the 1996 fiscal year.

William O. Hunt
Jack L. McDonald

The Report of the Compensation Committee on Executive Compensation shall
not be deemed incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the Securities Exchange
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.

DEFA14A 14th Page of 33 TOC 1st Previous Next ↓Bottom Just 14th

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth certain information regarding compensation
to the Company's Co-Chief Executive Officers and the four most highly
compensated executive officers for services rendered in all capacities during
the Company's last three fiscal years (collectively referred to herein as the
"Named Executive Officers").

[Enlarge/Download Table]

LONG-TERM COMPENSATION
--------------------------------------
PAYOUTS
AWARDS ----------
------------------------- SECURITIES
ANNUAL COMPENSATION OTHER RESTRICTED UNDERLYING
---------------------------- ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION AWARDS SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) (#)(3) ($) ($)
------------------------- ------ ------- ------- ------------ ---------- ---------- ------- ------------

Finis F. Teeter 1996 180,000 232,477 -- -- 25,000 -- 35,796(1)
Chairman of the Board 1995 180,000 170,390 -- -- -- -- 17,599(1)
and Co-Chief Executive 1994 180,000 101,236 -- -- -- -- 5,091(1)
Officer

Laurence A. Dawson, Jr. 1996 180,000 232,477 -- -- 25,000 -- 30,073(2)
President and Co-Chief 1995 180,000 170,390 -- -- -- -- 35,500(2)
Executive Officer 1994 135,000(7) 84,151(7) -- -- -- -- 20,894(2)

Craig A. Reynolds 1996 125,000 103,323 -- -- 18,750 -- 4,268(3)
Executive 1995 96,000 125,122 -- -- -- -- 3,588(3)
Vice-President, 1994 96,000 68,790 -- -- -- -- 2,085(3)
Chief Financial Officer
and Secretary

Charles N. Carney, Jr. 1996 100,000 235,172 -- -- 18,750 -- 3,278(4)
Vice President of the 1995 96,000 239,041 -- -- -- -- 1,500(4)
Company and President of 1994 96,000 129,521 -- -- -- -- 710(4)
Nationwide Housing
Systems, Inc.

James J. Fallon 1996 60,000 408,019 -- -- 15,000 -- 2,137(5)
Vice President of the 1995 60,000 260,244 -- -- 3,750 -- 1,500(5)
Company and President of 1994 45,000(7) 117,052(7) -- -- -- -- --
Oak Creek Homes, Inc.

Jackie H. Holland 1996 79,200 115,608 -- -- 15,000 -- 6,461(6)
Vice President and 1995 79,200 86,777 -- -- 3,750 -- 6,300(6)
Treasurer 1994 59,400(7) 18,700(7) -- -- -- -- --

---------------

(1) Consists of $9,000 of car allowance in fiscal 1996 and 1995, $883, $1,500
and $895 of Company contributions to the Company's Saving Plan in fiscal
1994, 1995 and 1996, respectively, $4,208, $7,099 and $7,886 for payments of
term life and disability insurance in fiscal 1994, 1995 and 1996,
respectively, and $18,015 for equivalent compensation as provided for in Mr.
Teeter's employment agreement in fiscal 1996.

(2) Consists of $9,000 car allowance in fiscal 1996 and 1995, $1,500 and $2,310
of Company contributions to the Company's Savings Plan in fiscal 1995 and
1996, respectively, and payments of $20,894, $25,000 and $18,763 for
premiums for split-dollar life insurance policy and health insurance in
fiscal 1994, 1995 and 1996, respectively.

(3) Consists of $960, $960 and $1,090 of Company contributions to the Company's
Savings Plan in fiscal 1994, 1995 and 1996, respectively, and $1,125, $2,628
and $3,178 for payments of term-life and disability insurance in fiscal
1994, 1995 and 1996, respectively.

(4) Consists of $710, $1,500 and $2,294 of Company contributions to the
Company's Savings Plan in fiscal 1994, 1995 and 1996, respectively, and $984
for payment of a term-life insurance in fiscal 1996.

(5) Consists of $1,500 and $2,137 of Company contributions to the Company's
Savings Plan in fiscal 1995 and 1996, respectively.

(6) Consists of car allowance of $4,800 in fiscal 1995 and fiscal 1996, $1,500
and $1,661 of Company contributions to the Company's Savings Plan in fiscal
1995 and 1996, respectively.

(7) Does not include salary and bonus paid by Oak Creek prior to the Combination

(8) Option granted pursuant to the Company's Stock Compensation Plan. Options
have been adjusted for 5 for 4 stock split on January 18, 1996.

DEFA14A 15th Page of 33 TOC 1st Previous Next ↓Bottom Just 15th

OPTION/STOCK APPRECIATION RIGHT GRANTS DURING FISCAL 1996

[Enlarge/Download Table]

PERCENTAGE
OF TOTAL POTENTIAL REALIZED
NUMBER OF OPTIONS/ VALUES AT ANNUAL
SECURITIES SARS EXERCISE RATES OF STOCK PRICE
UNDERLYING GRANTED TO OR BASE APPRECIATION FOR
OPTIONS/ EMPLOYEES PRICE OPTION TERM
SARS IN FISCAL PER EXPIRATION --------------------
NAME GRANTED YEAR SHARE DATE 5% 10%
---- ---------- ---------- -------- ------------- ------- --------

Finis F. Teeter............ 25,000 5.52% $ 9.57 June 9, 2001 $81,368 $184,596
Laurence A. Dawson, Jr..... 25,000 5.52% 9.57 June 9, 2001 81,368 184,596
Craig A. Reynolds.......... 18,750 4.14% 8.70 June 9, 2001 55,478 125,861
Charles N. Carney, Jr...... 18,750 4.14% 8.70 June 9, 2001 55,478 125,861
Jackie Holland............. 15,000 3.31% 8.70 June 9, 2001 44,382 100,689
James J. Fallon............ 15,000 3.31% 8.70 June 9, 2001 44,382 100,689

AGGREGATED OPTION/STOCK APPRECIATION RIGHT EXERCISES DURING FISCAL 1996 AND
FISCAL YEAR END OPTION/ STOCK APPRECIATION RIGHT VALUES

[Enlarge/Download Table]

NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
SHARES OPTIONS/SARS AT VALUE OF UNEXERCISED
ACQUIRED VALUE MAY 31, 1996 IN-THE-MONEY OPTIONS/
ON EXERCISE REALIZED EXERCISABLE/ SARS AT MAY 31, 1996(1)
NAME (#) ($) UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ---------- -------- --------------- -------------------------

Finis F. Teeter............ -- -- --/25,000 $ --/$317,000
Laurence A. Dawson, Jr..... -- -- --/25,000 --/ 317,000
Craig A. Reynolds.......... -- -- --/18,750 --/ 254,063
Charles N. Carney, Jr...... -- -- --/18,750 --/ 254,063
James J. Fallon............ -- -- 750/18,000 11,888/ 250,800
Jackie H. Holland.......... -- -- 750/18,000 11,888/ 250,800

---------------

(1) Value is calculated based on the difference between the option exercise
price and $22.25 (the last price of the Common Stock on May 31, 1996)
multiplied by the number of shares of Common Stock underlying the option.

COMPENSATION OF DIRECTORS

Directors of the Company who are employees or affiliates of the Company do
not receive compensation for their services as directors, although they are
reimbursed for travel and lodging expenses in connection with their attendance
at board meetings. The Company pays an annual fee in the amount of $10,000 and
meeting fees of $1,000 per meeting to its directors who are not employees or
affiliates of the Company ("Independent Directors"). In addition, each
Independent Director will receive a nonqualified stock option to purchase 5,000
shares of Common Stock upon each person's initial election to the Board of
Directors, which such options are immediately exercisable. Following his initial
term as an Independent Director, if reelected, and every fourth year reelected
thereafter, each Independent Director will receive a nonqualified option to
purchase 10,000 shares of Common Stock. Each of such options would vest 25%
annually, with the initial 25% becoming exercisable on the date of grant of the
option and an additional 25% becoming exercisable on each of the first three
anniversaries of the grant date.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

The Company has entered into employment agreements, effective as of June 1,
1994, with Messrs. Teeter and Dawson (the "Employment Agreements"). Under the
Employment Agreements, Messrs. Teeter and Dawson will each (a) receive a base
salary of $15,000 per month; (b) be entitled to receive bonuses equal to 2.25%
of the Company's after-tax consolidated net income (paid annually); and (c)
receive a car allowance of

DEFA14A 16th Page of 33 TOC 1st Previous Next ↓Bottom Just 16th

$750 per month, plus reimbursement for all automobile expenses. Each Employment
Agreement further provides that (a) the Company will maintain the existing
Salary Continuation Agreement with such executive, which provides that, if such
executive dies prior to the expiration of the term of his Employment Agreement
or if he dies after he has become partially or permanently disabled during the
term of his Employment Agreement, the Company will pay to such executive's
beneficiary an amount equal to 75% of his then current annual salary, which
amount shall be payable in 60 equal monthly installments; and (b) the Company
will maintain the existing Disability Compensation Agreement with such
executive, which provides such executive with disability benefits equaling 100%
of his salary for the first ninety days or such other applicable waiting period
under the policies underlying such agreement and 75% thereafter until the
disability terminates or such executive dies. The Company partially insures its
obligations under such Disability Compensation Agreements. Mr. Dawson's
Employment Agreement provides that the Company will fund a split-dollar
whole-life insurance policy, in the aggregate amount of $2.25 million, of which
Mr. Dawson's life insurance trust is the beneficiary. The Company maintains a
$1.5 million key-man life insurance policy on Mr. Dawson, with the Company as
the beneficiary. Mr. Teeter's Employment Agreement provides that the Company
will fund certain term-life insurance policies, aggregating $1 million in death
benefits, with Mr. Teeter's spouse as owner and beneficiary, and provide to Mr.
Teeter other benefits comparable to those provided to Mr. Dawson (or equivalent
compensation).

Each Employment Agreement continues until May 31, 1997, unless sooner
terminated by the Company for "just cause" (as defined therein) or for other
than "just cause" or by reason of the death or disability (as defined therein)
of such executive. If either Employment Agreement is terminated by the Company
for "just cause" or as a result of the executive's death or disability, such
executive will be entitled to receive an amount equal to the compensation earned
and accrued by him as of the date of such termination. In the event either
Employment Agreement is terminated by the Company for any other reason
(including the expiration of the term), such executive will be entitled to
continue to receive his base salary, bonuses and benefits for the longer of one
year thereafter or the remainder of the term of such Employment Agreement. Each
Employment Agreement further provides that upon termination of any such
Employment Agreement, for any reason, such executive will be subject to a
one-year noncompetition agreement; provided, however, that in the event such
termination is for any reason other than "just cause," such executive may
terminate the noncompetition provision upon written notice to the Company, in
which event all of the above post-termination compensation shall thereafter
terminate.

DEFA14A 17th Page of 33 TOC 1st Previous Next ↓Bottom Just 17th

STOCK PERFORMANCE CHART

The line graph below compares the cumulative total shareholder return on
the Company's Common Stock from July 12, 1994, the date of its initial public
offering, through May 31, 1996, with the NASDAQ Stock Market-U.S. ("the NASDAQ
Index") and a Peer Group Index. The companies included in the Peer Group Index
include Cavalier Homes, Inc., Champion Enterprises, Inc., Clayton Homes, Inc.,
Fleetwood Enterprises, Inc., Oakwood Homes Corporation, Redman Industries, Inc.,
Schult Homes Corporation, Skyline Corporation and Southern Energy Homes, Inc.
The graph assumes that $100 was invested at the beginning of the period and that
any dividends during the period were reinvested. The Company's Initial Public
Offering price of $6.40 was used as the beginning price of the Company's Common
Stock.

[Download Table]

Measurement Period Peer Group American
(Fiscal Year Covered) Index Homestar. NASDAQ

7/11/94 100.00 100.00 100.00
5/31/95 102.79 139.06 122.32
5/31/96 167.32 347.66 175.92

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 1996, the members of the Compensation Committee were
primarily responsible for determining executive compensation, although certain
matters were presented to the full Board of Directors for final approval. Finis
F. Teeter, Laurence A. Dawson, Jr., Craig A. Reynolds, Jackie H. Holland,
Charles N. Carney, Jr. and James J. Fallon, each of whom is an executive officer
of the Company, participated in deliberations concerning executive officer
compensation.

Two subsidiaries of the Company (American Homestar of Burleson, Inc. and
American Homestar of Lancaster, Inc.) entered into lease agreements covering two
manufacturing facilities (the "Burleson Facility" and the "Lancaster Facility"),
in 1993. Under the Burleson Facility lease, Byway Partners Ltd. ("Byways"), a
limited partnership of which Mr. Dawson was a limited partner and a family
member was the general partner, received lease payments totaling $6,250 in June
1995. Under the Lancaster Facility Lease, MOAMCO Properties, Inc. ("MOAMCO"), a
corporation owned by Mr. Teeter, received lease payments totaling $6,250 in June
1995. Additionally, MOAMCO, during the last fiscal year, leased to the Company
three retail sales centers and the Company's former executive offices in
Webster, Texas. Between June 1, 1995 and August 31, 1996, the Company and its
subsidiaries paid $163,500 to MOAMCO under such leases. The Company believes
that all of such lease agreements are on terms not less favorable than those
generally available to

DEFA14A 18th Page of 33 TOC 1st Previous Next ↓Bottom Just 18th

unaffiliated parties for comparable properties. Under the terms of the leases
covering the Burleson and Lancaster Facilities, the Company exercised its option
to purchase each such facility in June 1995. The purchase prices for the
Burleson Facility and the Lancaster Facility were $1.5 million and $1.45
million, respectively, based on independent appraisals and were ratified by the
Independent Directors. Byways purchased the Burleson Facility in 1992 for
$1,100,000. MOAMCO purchased the Lancaster Facility in 1992 for $1,010,000.

It is the policy of the Company that any future transactions with
affiliated individuals or entities will be on terms no less favorable to the
Company than are reasonably available from unrelated third parties, and any such
affiliated transactions will require the approval of a majority of the
Independent Directors.

SECTION 16 REQUIREMENTS

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission (the "SEC"). Directors, officers and greater than 10% beneficial
owners are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file. Based solely on representations from certain
reporting persons, the Company believes that, during the year ended May 31,
1996, each of the officers, directors and greater than 10% shareholders complied
with all such applicable filing requirements.

PROPOSAL NO. 3

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors has selected KPMG Peat Marwick LLP as independent
certified public accountants to audit the consolidated financial statements of
the Company and its subsidiaries for the fiscal year ending May 31, 1997 and
proposes that the Company's shareholders ratify this selection. KPMG Peat
Marwick LLP has served the Company in this capacity since 1983. Representatives
of KPMG Peat Marwick LLP are expected to be present at the Meeting, will have
the opportunity to make a statement, if they desire to do so, and will be
available to respond to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSAL
TO RATIFY THE SELECTION OF KPMG PEAT MARWICK LLP.

SHAREHOLDER PROPOSALS

Shareholders may submit proposals on matters appropriate for shareholder
action at subsequent annual meetings of the Company consistent with Rule 14a-8
promulgated under the Exchange Act. For such proposals to be considered for
inclusion in the Proxy Statement and Proxy relating to the Company's 1997 Annual
Meeting of Shareholders, such proposals must be received by the Company not
later than May 23, 1997. Such proposals should be directed to American Homestar
Corporation, 2450 South Shore Boulevard, Suite 300, League City, Texas 77573,
Attention: Secretary.

OTHER BUSINESS

The Board of Directors knows of no matter other than those described herein
that will be presented for consideration at the Meeting. However, should any
other matters properly come before the Meeting or any adjournment thereof, it is
the intention of the persons named in the accompanying Proxy to vote on such
matters in accordance with their best judgment in the interest of the Company.

DEFA14A 19th Page of 33 TOC 1st Previous Next ↓Bottom Just 19th

MISCELLANEOUS

All costs incurred in the solicitation of Proxies will be borne by the
Company. In addition to solicitation by mail, officers and employees of the
Company may solicit Proxies by telephone, telegraph or personally, without
additional compensation. The Company may also make arrangements with brokerage
houses and other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of shares of Common Stock held
of record by such persons, and the Company may reimburse such brokerage houses
and other custodians, nominees and fiduciaries for their out-of-pocket expenses
incurred in connection therewith.

Accompanying this Proxy Statement is a copy of the Company's Annual Report
for the fiscal year ended May 31, 1996 (the "Annual Report"). The Annual Report
is not to be deemed a part of this Proxy Statement.

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, BUT NOT INCLUDING EXHIBITS,
WILL BE FURNISHED AT NO CHARGE TO EACH PERSON TO WHOM A PROXY STATEMENT IS
DELIVERED UPON THE WRITTEN REQUEST OF SUCH PERSON ADDRESSED TO AMERICAN HOMESTAR
CORPORATION, ATTN: CRAIG A. REYNOLDS, SECRETARY, 2450 SOUTH SHORE BOULEVARD,
SUITE 300, LEAGUE CITY, TEXAS 77573.

By Order of the Board of Directors

/s/ CRAIG A. REYNOLDS

Craig A. Reynolds
Secretary
Houston, Texas
September 6, 1996

DEFA14A 20th Page of 33 TOC 1st Previous Next ↓Bottom Just 20th

EXHIBIT A

AMERICAN HOMESTAR CORPORATION

1994 AMENDED AND RESTATED STOCK COMPENSATION PLAN

ARTICLE I

THE PLAN

1.1 NAME AND AMENDMENT TO PLAN. This plan will be known as the "American
Homestar Corporation 1994 Amended and Restated Stock Compensation Plan." The
Plan amends and restates the American Homestar Stock Compensation Plan, as
previously amended, which first became effective on May 20, 1993. Capitalized
terms used herein are defined in Article X hereof.

1.2 PURPOSE. The Plan is intended to secure for the Company and its
shareholders the benefits arising from ownership of Common Stock of the Company.
The Plan is designed to help the Company and its Subsidiaries attract and retain
superior personnel for positions of substantial responsibility and to provide
Employees, Non-Employee Directors and Advisors with an additional incentive to
contribute to the success of the Company. The Company intends that Incentive
Stock Options granted pursuant to Article IV will qualify as "incentive stock
options" within the meaning of Section 422 of the Code. Any Option granted
pursuant to Article V will be clearly and specifically designated as not being
an incentive stock option, as defined in Section 422 of the Code.

1.3 EFFECTIVE DATE. The Plan will become effective upon the Effective
Date.

1.4 ELIGIBILITY TO PARTICIPATE. Any Employee, Non-Employee Director or
Advisor will be eligible to participate in the Plan; provided that Incentive
Stock Options may be granted only to persons who are Employees. The Committee
may grant Awards in accordance with such determinations as the Committee from
time to time in its sole discretion may make; provided that Non-Employee
Directors may receive Awards only pursuant to Section 5.5.

1.5 MAXIMUM NUMBER OF SHARES OF COMMON STOCK SUBJECT TO AWARDS. The shares
of Common Stock subject to Awards pursuant to the Plan may be either authorized
and unissued shares or shares issued and thereafter acquired by the Company.
Subject to adjustment pursuant to the provisions of Section 8.2, and subject to
any additional restrictions elsewhere in the Plan, the maximum aggregate number
of shares of Common Stock that may be issued from time to time pursuant to the
Plan shall be 1,200,000. If shares of Restricted Stock are reacquired by the
Company pursuant to the provisions of Section 6.1 of the Plan or if Options
expire or terminate for any reason without having been exercised in full (other
than termination in connection with the exercise of a Stock Appreciation Right),
the reacquired shares and/or the shares not purchased or distributed will again
be available for issuance under the Plan.

1.6 CONDITIONS PRECEDENT. The Company will not issue or deliver any
certificate for Plan Shares pursuant to the Plan prior to fulfillment of all of
the following conditions:

(a) The admission of the Plan Shares to listing on all stock exchanges
on which the Common Stock is then listed, unless the Committee determines
in its sole discretion that such listing is neither necessary nor
advisable;

(b) The completion of any registration or other qualification of the
sale of the Plan Shares under any federal or state law or under the rulings
or regulations of the Securities and Exchange Commission or any other
governmental regulatory body that the Committee in its sole discretion
deems necessary or advisable; and

(c) The obtaining of any approval or other clearance from any federal
or state governmental agency that the Committee in its sole discretion
determines to be necessary or advisable.

1.7 RESERVATION OF SHARES OF COMMON STOCK. During the term of the Plan,
the Company will at all times reserve and keep available such number of shares
of Common Stock as may be necessary to satisfy the requirements of the Plan as
to the number of Plan Shares. In addition, the Company will from time to time,
as

A-1

DEFA14A 21st Page of 33 TOC 1st Previous Next ↓Bottom Just 21st

is necessary to accomplish the purposes of the Plan, use its best efforts to
obtain from any regulatory agency having jurisdiction any requisite authority
necessary to issue Plan Shares hereunder. The inability of the Company to obtain
from any regulatory agency having jurisdiction the authority deemed by the
Company's counsel to be necessary for the lawful issuance of any Plan Shares
will relieve the Company of any liability in respect of the nonissuance of Plan
Shares as to which the requisite authority has not been obtained.

1.8 TAX WITHHOLDING.

(a) Condition Precedent. The issuances of Plan Shares pursuant to
Awards under the Plan are subject to the condition that if at any time the
Committee determines, in its discretion, that the satisfaction of
withholding tax or other withholding liabilities under any federal, state
or local law is necessary or desirable as a condition of, or in connection
with such issuances, then the issuances will not be effective unless the
withholding has been effected or obtained in a manner acceptable to the
Committee.

(b) Manner of Satisfying Withholding Obligation. When a Participant is
required to pay to the Company an amount required to be withheld under
applicable income tax laws in connection with an Award, such payment may be
made (i) in cash, (ii) by check, (iii) if permitted by the Committee, by
delivery to the Company of shares of Common Stock already owned by the
Participant having a Fair Market Value on the date the amount of tax to be
withheld is to be determined (the "Tax Date") equal to the amount required
to be withheld, (iv) with respect to Options, through the withholding by
the Company ("Company Withholding") of a portion of the Plan Shares
acquired upon the exercise of the Options (provided that, with respect to
any Option held by a Reporting Participant, at least six months has elapsed
between the grant of such Option and the exercise involving tax
withholding) having a Fair Market Value on the Tax Date equal to the amount
required to be withheld or (v) in any other form of valid consideration, as
permitted by the Committee in its discretion; provided that a Reporting
Participant shall not be permitted to elect to satisfy his withholding
obligation through Company withholding; provided further, however, that the
Committee, in its discretion, may require that a Reporting Participant's
withholding obligation be satisfied through Company Withholding.

(c) Notice of Disposition of Stock Acquired Pursuant to Incentive
Stock Options. The Company may require as a condition to the issuance of
Plan Shares covered by any Incentive Stock Option that the party exercising
such Option give a written representation to the Company, which is
satisfactory in form and substance to its counsel and upon which the
Company may reasonably rely, that he will report to the Company any
disposition of such shares prior to the expiration of the holding periods
specified by Section 422(a)(1) of the Code. If and to the extent that the
realization of income in such a disposition imposes upon the Company
federal, state or local withholding tax requirements, or any such
withholding is required to secure for the Company an otherwise available
tax deduction, the Company will have the right to require that the
recipient remit to the Company an amount sufficient to satisfy those
requirements; and the Company may require as a condition to the issuance of
Plan Shares covered by an Incentive Stock Option that the party exercising
such Option give a satisfactory written representation promising to make
such a remittance.

1.9 ACCELERATION IN CERTAIN EVENTS. The Committee may accelerate the
exercisability of any Option (other than a Nondiscretionary Option) or Stock
Appreciation Right or waive any restrictions with respect to shares of
Restricted Stock in whole or in part at any time. Notwithstanding the provisions
of any Option Agreement, Stock Appreciation Rights Agreement or Restricted Stock
Agreement, the following provisions will apply:

(a) Mergers and Reorganizations. If the Company or its shareholders
enter into an agreement to dispose of all or substantially all of the
assets of the Company by means of a sale, merger or other reorganization,
liquidation or otherwise in a transaction in which the Company is not the
surviving corporation, any Option or Stock Appreciation Right will become
immediately exercisable with respect to the full number of shares subject
to that Option or Stock Appreciation Right and all restrictions will lapse
with respect to all shares subject to any award of Restricted Stock during
the period commencing as of the date of the agreement to dispose of all or
substantially all of the assets of the Company and ending

A-2

DEFA14A 22nd Page of 33 TOC 1st Previous Next ↓Bottom Just 22nd

when the disposition of assets contemplated by that agreement is
consummated or the Award is otherwise terminated in accordance with its
provisions or the provisions of the Plan, whichever occurs first; provided
that no Option or Stock Appreciation Right will be immediately exercisable
and no restrictions will lapse with respect to an award of Restricted Stock
under this Section on account of any agreement of merger or other
reorganization when the shareholders of the Company immediately before the
consummation of the transaction will own at least fifty percent of the
total combined voting power of all classes of stock entitled to vote of the
surviving entity immediately after the consummation of the transaction. An
Option or Stock Appreciation Right will not become immediately exercisable
and no restrictions will lapse with respect to an award of Restricted Stock
if the transaction contemplated in the agreement is a merger or
reorganization in which the Company will survive.

(b) Change in Control. In the event of a change in control or
threatened change in control of the Company, all Options and Stock
Appreciation Rights granted prior to the change in control or threatened
change in control will become immediately exercisable, and all restrictions
will lapse with respect to awards of Restricted Stock granted prior to the
change in control or threatened change in control. The term "change in
control" for purposes of this Section refers to the acquisition of 15% or
more of the voting securities of the Company by any person or by persons
acting as a group within the meaning of Section 13(d)(3) of the Exchange
Act (other than an acquisition by (i) a person or group meeting the
requirements of clauses (i) and (ii) of Rule 13d-1(b)(1) promulgated under
the Exchange Act or (ii) any employee pension benefit plan (within the
meaning of Section 3(2) of ERISA) of the Company or of its Subsidiaries,
including a trust established pursuant to such plan); provided that no
change in control or threatened change in control will be deemed to have
occurred (i) if prior to the acquisition of, or offer to acquire, 15% or
more of the voting securities of the Company, the full Board has adopted by
not less than two-thirds vote a resolution specifically approving such
acquisition or offer or (ii) from (A) a transfer of the Company's voting
securities by a person who is the beneficial owner, directly or indirectly,
of 15% or more of the voting securities of the Company (a "15 Percent
Owner") to (i) a member of such 15 Percent Owner's immediate family (within
the meaning of Rule 16a-1(e) of the Exchange Act) either during such 15
Percent Owner's lifetime or by will or the laws of descent and
distribution; (ii) any trust as to which such 15 Percent Owner or a member
(or members) of his immediate family (within the meaning of Rule 16a-1(e)
of the Exchange Act) is the beneficiary; (iii) any trust as to which such
15 Percent Owner is the settlor with sole power to revoke; (iv) any entity
over which such 15 Percent Owner has the power, directly or indirectly, to
direct or cause the direction of the management and policies of the entity,
whether through the ownership of voting securities, by contract or
otherwise; or (v) any charitable trust, foundation or corporation under
Section 501(c)(3) of the Code that is funded by such 15 Percent Owner; or
(B) the acquisition of voting securities of the Corporation by either (i)
such 15 Percent Owner or (ii) a person, trust or other entity described in
the foregoing clauses (A)(i)-(v) of this subsection. The term "person" for
purposes of this Section refers to an individual or a corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. Whether a change in control is threatened will
be determined solely by the Board of Directors.

1.10 COMPLIANCE WITH SECURITIES LAWS. Plan Shares will not be issued with
respect to any Award unless the issuance and delivery of the Plan Shares (and
the exercise of an Option, if applicable) complies with all relevant provisions
of federal and state law, including without limitation the Securities Act, the
rules and regulations promulgated thereunder and the requirements of any stock
exchange upon which the Plan Shares may then be listed, and will be further
subject to the approval of counsel for the Company with respect to such
compliance. The Committee may also require a Participant to furnish evidence
satisfactory to the Company, including without limitation a written and signed
representation letter and consent to be bound by any transfer restrictions
imposed by law, legend, condition or otherwise, that the Plan Shares are being
acquired only for investment and without any present intention to sell or
distribute the shares in violation of any federal or state law, rule or
regulation. Further, each Participant will consent to the imposition of a legend
on the certificate representing the Plan Shares issued pursuant to an Award
restricting their transferability as required by law or by this Section.

A-3

DEFA14A 23rd Page of 33 TOC 1st Previous Next ↓Bottom Just 23rd

1.11 EMPLOYMENT OF PARTICIPANT. Nothing in the Plan or in any Award
granted hereunder will confer upon any Participant any right to continued
employment by the Company or any of its Subsidiaries or limit in any way the
right of the Company or any Subsidiary at any time to terminate or alter the
terms of that employment.

1.12 INFORMATION TO PARTICIPANTS. The Company will furnish to each
Participant copies of annual reports, proxy statements and all other reports
sent to the Company's shareholders. Upon written request, the Company will
furnish to each Participant a copy of its most recent Annual Report on Form 10-K
and each quarterly report to shareholders issued since the end of the Company's
most recent fiscal year.

ARTICLE II

ADMINISTRATION

2.1 COMMITTEE. Subject to Section 2.2, the Plan will be administered by a
Committee of not fewer than two members of the Board. No member of the Committee
will be eligible to receive Awards under the Plan except as expressly provided
in Section 5.5, and each such member will be a Non-Employee Director. Subject to
the provisions of the Plan, the Committee will have the sole discretion and
authority to determine from time to time the Employees and Advisors to whom
Awards will be granted and the number of Plan Shares subject to each Award, to
interpret the Plan, to prescribe, amend and rescind any rules and regulations
necessary or appropriate for the administration of the Plan, to determine and
interpret the details and provisions of each Option Agreement, Stock
Appreciation Rights Agreement, and Restricted Stock Agreement, to modify or
amend any Option Agreement, Stock Appreciation Rights Agreement or Restricted
Stock Agreement or waive any conditions or restrictions applicable to any
Options or Stock Appreciation Rights (or the exercise thereof) or to any shares
of Restricted Stock, and to make all other determinations necessary or advisable
for the administration of the Plan.

2.2 GRANTS PRIOR TO INITIAL PUBLIC OFFERING. Notwithstanding the
provisions of Section 2.1, prior to the date of the Company's initial public
offering of Common Stock, the Plan will be administered by the full Board, and
the Board shall have all of the powers of the Committee hereunder.

2.3 APPOINTMENT OF COMMITTEE. The Committee will be appointed by the Board
and will consist solely of Non-Employee Directors; provided that the Board may
remove any Committee member, with or without cause.

2.4 MAJORITY RULE; UNANIMOUS WRITTEN CONSENT. A majority of the members of
the Committee will constitute a quorum, and any action taken by a majority
present at a meeting at which a quorum is present or any action taken without a
meeting evidenced by a writing executed by all members of the Committee will
constitute the action of the Committee. Meetings of the Committee may take place
by telephone conference call.

2.5 COMPANY ASSISTANCE. The Company will supply full and timely
information to the Committee on all matters relating to Employees, their
employment, death, Retirement, Disability or other termination of employment,
and such other pertinent facts as the Committee may require. The Company will
furnish the Committee with such clerical and other assistance as is necessary to
the performance of its duties.

ARTICLE III

OPTIONS

3.1 METHOD OF EXERCISE. Each Option will be exercisable in accordance with
the terms of the Option Agreement pursuant to which the Option was granted. No
Option may be exercised for a fraction of a Plan Share.

3.2 PAYMENT OF PURCHASE PRICE. The purchase price of any Plan Shares
purchased will be paid at the time of exercise of the Option either (i) in cash,
(ii) by certified or cashier's check, (iii) if permitted by the Committee, in
shares of Common Stock valued at the then Fair Market Value thereof, (iv) if
permitted by

A-4

DEFA14A 24th Page of 33 TOC 1st Previous Next ↓Bottom Just 24th

the Committee, by cash or certified or cashier's check for the par value of the
Plan Shares plus a promissory note for the balance of the purchase price, which
note will contain such terms and provisions as the Committee may approve,
including without limitation the right to repay the note partially or wholly
with Common Stock, (v) by delivery of a copy of irrevocable instructions from
the Participant to a broker or dealer, reasonably acceptable to the Company, to
sell certain of the Plan Shares purchased upon exercise of the Option or to
pledge them as collateral for a loan and promptly deliver to the Company the
amount of sale or loan proceeds necessary to pay such purchase price or (vi) in
any other form of valid consideration, as permitted by the Committee in its
discretion. If any portion of the purchase price or a note given at the time of
exercise is paid in shares of Common Stock, those shares will be valued at the
then Fair Market Value.

3.3 WRITTEN NOTICE REQUIRED. Any Option will be deemed to be exercised for
purposes of the Plan when written notice of exercise has been received by the
Company at its principal office from the person entitled to exercise the Option
and payment for the Plan Shares with respect to which the Option is exercised
has been received by the Company in accordance with Section 3.2.

3.4 RIGHTS OF PARTICIPANTS UPON TERMINATION OF EMPLOYMENT OR SERVICE. In
the event a Participant who is an Employee shall cease to be an Employee or in
the event a Participant who is a Director or Advisor shall cease to serve as a
Director or Advisor for any reason other than death, Retirement, Disability or
for Cause, (i) the Committee shall have the ability to accelerate the vesting of
the Participant's Option (other than a Nondiscretionary Option), in its sole
discretion, and (ii) such Participant's Option shall be exercisable (to the
extent exercisable on the date of termination of employment or service as a
Director or Advisor, or, if the vesting of such Option has been accelerated, to
the extent exercisable following such acceleration) at any time within three
months after the date of termination of employment or service as a Director or
Advisor, unless by its terms the Option expires earlier or unless, with respect
to a Nonqualified Stock Option (other than a Nondiscretionary Option), the
Committee agrees, in its sole discretion, to further extend the term of such
Nonqualified Stock Option; provided that the term of any such Nonqualified Stock
Option shall not be extended beyond its initial term. In addition, a
Participant's Option may be exercised as follows in the event such Participant
ceases to serve as an Employee, Director or Advisor due to death, Disability,
Retirement or for Cause:

(a) Death. Except as otherwise limited by the Committee at the time of
the grant of an Option, if a Participant dies while serving as an Employee,
Director or Advisor, or within three months after ceasing to be an
Employee, Director or Advisor, his Option shall become fully exercisable on
the date of his death and shall expire 12 months thereafter, unless by its
terms it expires sooner or unless, with respect to a Nonqualified Stock
Option (other than a Nondiscretionary Option), the Committee agrees, in its
sole discretion, to further extend the term of such Nonqualified Stock
Option; provided that the term of any such Nonqualified Stock Option shall
not be extended beyond its initial term. During such period, the Option may
be fully exercised, to the extent that it remains unexercised on the date
of death, by the Participant's personal representative or by the
distributees to whom the Participant's rights under the Option shall pass
by will or by the laws of descent and distribution.

(b) Retirement. If a Participant ceases to serve as an Employee,
Director or Advisor, as a result of Retirement, (i) the Committee shall
have the ability to accelerate the vesting of the Participant's Option, in
its sole discretion, and (ii) such Participant's Option shall be
exercisable (to the extent exercisable on the effective date of such
Retirement or, if the vesting of such Option has been accelerated, to the
extent exercisable following such acceleration) at any time within three
months after the effective date of such Retirement, unless by its terms the
Option expires earlier or unless, with respect to a Nonqualified Stock
Option (other than a Nondiscretionary Option), the Committee agrees, in its
sole discretion, to further extend the term of such Nonqualified Stock
Option; provided that the term of any such Nonqualified Stock Option shall
not be extended beyond its initial term.

(c) Disability. If a Participant ceases to serve as an Employee,
Director or Advisor, as a result of Disability, the Participant's Option
shall become fully exercisable and shall expire 12 months thereafter,
unless by its terms it expires sooner or, unless, with respect to a
Nonqualified Stock Option (other than a Nondiscretionary Option), the
Committee agrees, in its sole discretion, to extend the term of such

A-5

DEFA14A 25th Page of 33 TOC 1st Previous Next ↓Bottom Just 25th

Nonqualified Stock Option; provided that the term of any Option shall not
be extended beyond its initial term.

(d) Cause. If a Participant ceases to be employed by the Company or a
Subsidiary, or ceases to serve as a Director or Advisor, because the
Participant is terminated for Cause, the Participant's Option shall
automatically expire. If any facts that would constitute Cause for
termination or removal of a Participant are discovered after the
Participant's relationship with the Company has ended, any Options then
held by the Participant may be immediately terminated by the Committee.
Notwithstanding the foregoing, if a Participant is an Employee employed
pursuant to a written employment agreement, or is an Advisor retained
pursuant to a written agreement, the Participant's relationship with the
Company will be deemed terminated for "cause" for purposes of the Plan only
if the Participant is considered under the circumstances to have been
terminated for cause for purposes of such written agreement.

3.5 TRANSFERABILITY OF OPTIONS. Except as may be agreed upon by the
Committee in accordance with the following paragraph, Options shall not be
transferable other than by will or the laws of descent and distribution or, with
respect to Nonqualified Stock Options, pursuant to the terms of a qualified
domestic relations order as defined by the Code or Title I of ERISA, or the
rules thereunder, and may be exercised during the lifetime of a Participant only
by that Participant or by his legally authorized representative. The designation
by a Participant of a beneficiary shall not constitute a transfer of the Option.

The Committee may, in its discretion, provide in an Option Agreement that
Nonqualified Stock Options, other than Nondiscretionary Options, granted
hereunder may be transferred by the Participant to members of his immediate
family, trusts for the benefit of such immediate family members and partnerships
in which such immediate family members are the only partners, provided that
there cannot be any consideration for the transfer.

ARTICLE IV

INCENTIVE STOCK OPTIONS

4.1 OPTION TERMS AND CONDITIONS. The terms and conditions of Options
granted under this Article may differ from one another as the Committee may, in
its discretion, determine, as long as all Options granted under this Article
satisfy the requirements of this Article.

4.2 DURATION OF OPTIONS. Each Option granted under this Article will
expire on the date determined by the Committee, but in no event will any Option
granted under this Article expire earlier than one year or later than ten years
after the date on which the Option is granted. In addition, each Option will be
subject to early termination as provided elsewhere in the Plan.

4.3 PURCHASE PRICE. The purchase price for Plan Shares acquired pursuant
to the exercise, in whole or in part, of any Option granted under this Article
will not be less than the Fair Market Value of the Plan Shares at the time of
the grant of the Option.

4.4 MAXIMUM AMOUNT OF OPTIONS FIRST EXERCISABLE IN ANY CALENDAR YEAR. The
maximum aggregate Fair Market Value of Plan Shares (determined at the time the
Option is granted) with respect to which Options issued under this Article are
exercisable for the first time by any Employee during any calendar year under
all incentive stock option plans of the Company and its Subsidiaries and
affiliates may not exceed $100,000. Any Option granted under the Plan and first
exercisable in excess of the foregoing limitations will be considered granted
under Article V and will be clearly and specifically designated as not being an
Incentive Stock Option.

4.5 REQUIREMENTS AS TO CERTAIN OPTIONS. In the event of the grant of any
Option to an individual who, at the time the Option is granted, owns shares of
stock possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries or affiliates within
the meaning of Section 422 of the Code, the purchase price for the Plan Shares
subject to that Option must be at least 110% of the Fair Market Value of those
Plan Shares at the time the Option is granted, and the Option must not be
exercisable after the expiration of five years from the date of its grant.

A-6

DEFA14A 26th Page of 33 TOC 1st Previous Next ↓Bottom Just 26th

4.6 INDIVIDUAL OPTION AGREEMENTS. Each Employee receiving Options under
this Article will be required to enter into a written Option Agreement with the
Company. In such Option Agreement, the Employee will agree to be bound by the
terms and conditions of the Plan and such other matters as the Committee deems
appropriate.

ARTICLE V

NONQUALIFIED STOCK OPTIONS

5.1 OPTION TERMS AND CONDITIONS. Subject to Section 5.5, the terms and
conditions of Options granted under this Article may differ from one another as
the Committee may, in its discretion, determine, as long as all Options granted
under this Article satisfy the requirements of this Article.

5.2 DURATION OF OPTIONS. Subject to Section 5.5, each Option granted under
this Article and all rights thereunder will expire on the date determined by the
Committee, but in no event will any Option granted under this Article expire
later than ten years after the date on which the Option is granted. In addition,
each Option will be subject to early termination as provided elsewhere in the
Plan.

5.3 PURCHASE PRICE. The purchase price for Plan Shares acquired pursuant
to the exercise, in whole or in part, of any Option granted under this Article
shall be determined by the Committee in its discretion.

5.4 INDIVIDUAL OPTION AGREEMENTS. Each Employee receiving Options under
this Article will be required to enter into a written Option Agreement with the
Company. In such Option Agreement, the Employee will agree to be bound by the
terms and conditions of the Plan and such other matters as the Committee deem
appropriate.

5.5 OPTION GRANTS TO NONEMPLOYEE DIRECTORS. Immediately and automatically
upon initial election to the Board of Directors, each Nonemployee Director will
receive a Nonqualified Stock Option to purchase 5,000 shares of Common Stock,
which will be fully exercisable on the date of grant of such option. In
addition, each Nonemployee Director will receive a Nonqualified Stock Option to
purchase 10,000 shares of Common Stock in the year following his initial term as
director, if reelected, and every fourth year thereafter. Each of such options
would vest 25% annually, with the initial 25% becoming exercisable on the date
of grant of the option and an additional 25% becoming exercisable on each of the
first three anniversaries of the grant date. The purchase price for Plan Shares
acquired pursuant to the exercise, in whole or in part, of any Option received
by Nonemployee Directors will be the Fair Market Value of the Plan Shares on the
date of grant. Each such Option will expire on the day prior to the tenth
anniversary of the date of grant of such Option.

ARTICLE VI

RESTRICTED STOCK

6.1 TERMS AND CONDITIONS. Each Restricted Stock award confers upon the
recipient thereof the right to receive a specified number of shares of Common
Stock of the Company in accordance with the terms and conditions of each
Participant's individual written agreement as set forth in Section 6.2. The
general terms and conditions of the Restricted Stock awards shall be as follows:

(a) Any shares of Common Stock awarded hereunder to a Participant
shall be restricted for a period of time to be determined by the Committee
for each Participant at the time of the award, which period shall be not
less than one year or more than ten years. The restrictions shall prohibit
the sale, assignment, transfer, pledge or other encumbrance of such shares,
and will provide for possible reversion thereof to the Company in
accordance with subparagraph (b) during the period of restriction.

(b) All Restricted Stock awarded under this Plan to a Participant
shall be forfeited and returned to the Company in the event the Participant
ceases to be employed by the Company or one of its Subsidiaries prior to
the expiration of the period of restriction, unless the Participant's
termination of employment is due to his or her death, Disability or
Retirement.

A-7

DEFA14A 27th Page of 33 TOC 1st Previous Next ↓Bottom Just 27th

(c) In the event of a Participant's death or Disability, the
restrictions under subparagraph (a) will lapse with respect to all
Restricted Stock awarded to the Participant under this Plan prior to any
such event, and the shares of Common Stock involved shall cease to be
Restricted Stock within the meaning of this Plan and shall no longer be
subject to forfeiture to the Company pursuant to subparagraph (b).

(d) In the event of a Participant's Retirement, the restrictions under
subparagraph (a) shall continue to apply unless the Committee in its
discretion shall shorten the restriction period.

(e) Stock certificates issued with respect to awards of Restricted
Stock made under this Plan shall be registered in the name of the
Participant, but shall be delivered by him or her to the Company together
with a stock power endorsed in blank. Each such certificate shall bear the
following legend:

"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
FORFEITURE, RESTRICTIONS ON TRANSFER AND CERTAIN OTHER TERMS AND
CONDITIONS SET FORTH IN THE AMERICAN HOMESTAR CORPORATION 1994 STOCK
COMPENSATION PLAN AND THE AGREEMENT BETWEEN THE REGISTERED OWNER OF THE
SHARES REPRESENTED BY THIS CERTIFICATE AND AMERICAN HOMESTAR CORPORATION
ENTERED INTO PURSUANT TO SUCH PLAN."

(f) Upon the lapse of a restriction period as determined pursuant to
subparagraph (a), the Company will return the stock certificates
representing the shares with respect to which the restriction has lapsed to
the Participant or his or her legal representative, and pursuant to the
instruction of the Participant or his or her legal representative will
issue a certificate for such shares which does not bear the legend set
forth in subparagraph (e).

(g) Any other securities or assets (other than ordinary cash
dividends) which are received by a Participant with respect to Restricted
Stock awarded to him, which is still subject to restrictions provided for
in subparagraph (a), will be subject to the same restrictions and shall be
delivered by the Participant to the Company as provided in subparagraph
(e).

(h) From the time of grant of the Restricted Stock award, the
Participant shall be entitled to exercise all voting rights attributable to
the Restricted Stock, subject to forfeiture of such voting rights and the
stock as provided in subparagraph (b).

6.2 INDIVIDUAL AGREEMENTS. Each Participant receiving an award of
Restricted Stock under this Article will be required to enter into a written
Restricted Stock Agreement with the Company. In such Restricted Stock Agreement,
the Participant will agree to be bound by the terms and conditions of the Plan
and such other matters as the Committee deems appropriate.

ARTICLE VII

STOCK APPRECIATION RIGHTS

7.1 STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be granted
under the Plan subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the express terms of
the Plan, as the Committee shall determine.

7.2. TERMS AND CONDITIONS. The Committee may, but shall not be obligated
to, authorize, on such terms and conditions as it deems appropriate in each
case, the Company to issue to a Participant a Stock Appreciation Right, which
will entitle such Participant to receive an amount equal to (or if the Committee
shall so determine at the time of grant, less than) the excess of the Fair
Market Value of a share of Common Stock on the date of exercise over the Fair
Market Value of a share of Common Stock on the date of grant of the Stock
Appreciation Right (or such other price as is set by the Committee), multiplied
by the number of shares of Common Stock with respect to which the Stock
Appreciation Right shall have been exercised.

7.3 FORM OF GRANT. A Stock Appreciation Right may be granted in
combination with, in addition to or completely independent of an Option or any
other Award under the Plan.

A-8

DEFA14A 28th Page of 33 TOC 1st Previous Next ↓Bottom Just 28th

7.4 FORM OF PAYMENT. Payment upon exercise of a Stock Appreciation Right,
may be made (i) in cash, (ii) by certified or cashier's check, (iii) if
permitted by the Committee, in shares of Common Stock or (iv) in any other form
of valid consideration, as permitted by the Committee, in its discretion.
However, any Stock Appreciation Right exercised upon or subsequent to the
occurrence of a change in control (as defined in Section 1.9(b)) shall be paid
in cash.

7.5 EXERCISE OF STOCK APPRECIATION RIGHTS; EFFECTS ON STOCK OPTIONS AND
VICE-VERSA. Each Stock Appreciation Right will be exercisable in accordance with
the terms of the Stock Appreciation Rights Agreement pursuant to which the Stock
Appreciation Right is granted. Whenever a Stock Appreciation Right is granted in
relation to an Option and the exercise of one affects the right to exercise the
other, the number of Plan Shares available under the Option to which the Stock
Appreciation Right relates shall decrease by a number equal to the number of
Plan Shares for which the Stock Appreciation Right is exercised. Upon the
exercise of an Option, any related Stock Appreciation Right shall terminate as
to any number of Plan Shares subject to such Stock Appreciation Right that
exceeds the total number of Plan Shares for which the Option remains
unexercised.

7.6 TERMINATION OF EMPLOYMENT OR SERVICE. Whenever a Stock Appreciation
Right is granted in relation to a Nonqualified Stock Option and the exercise of
one affects the right to exercise the other, in the event of the termination of
the Participant's service with the Company, the Stock Appreciation Right may be
exercised only during the period, if any, within which the Option to which it
relates may be exercised. If a Stock Appreciation Right is granted independently
of an Option under the Plan, the Committee shall determine, in its sole
discretion, the Participant's rights with respect to the Participant's ability
to exercise the Stock Appreciation Right in the event of the termination of the
Participant's service with the Company.

7.7. TANDEM INCENTIVE STOCK OPTION -- STOCK APPRECIATION RIGHT. Whenever
an Incentive Stock Option and a Stock Appreciation Right are granted together
and the exercise of one affects the right to exercise the other, the following
requirements shall apply:

(a) the Stock Appreciation Right will expire no later than the
expiration of the underlying Incentive Stock Option;

(b) the Stock Appreciation Right may be for no more than the
difference between the exercise price of the underlying Incentive Stock
Option and the Fair Market Value of the Common Stock subject to the
underlying Incentive Stock Option at the time the Stock Appreciation Right
is exercised;

(c) the Stock Appreciation Right is transferable only when the
underlying Incentive Stock Option is transferable, and under the same
conditions;

(d) the Stock Appreciation Right may be exercised only when the
underlying Incentive Stock Option is eligible to be exercised; and

(e) the Stock Appreciation Right may be exercised only when the Fair
Market Value of the Common Stock subject to the underlying Incentive Stock
Option exceeds the exercise price of the Plan Shares subject to the
Incentive Stock Option.

7.8 INDIVIDUAL STOCK APPRECIATION RIGHTS AGREEMENT. Each Participant
receiving Stock Appreciation Rights pursuant to this Article shall be required
to enter into a written Stock Appreciation Rights Agreement with the Company. In
such Stock Appreciation Rights Agreement, the Participant shall agree to be
bound by the terms and conditions of the Plan, the Awards made pursuant hereto,
and such other matters as the Committee deems appropriate.

7.9 WRITTEN NOTICE REQUIRED. Any Stock Appreciation Right will be deemed
to be exercised for purposes of the Plan when written notice of exercise has
been received by the Company at its principal office from the person entitled to
exercise the Stock Appreciation Right.

A-9

DEFA14A 29th Page of 33 TOC 1st Previous Next ↓Bottom Just 29th

ARTICLE VIII

TERMINATION, AMENDMENT AND ADJUSTMENT

8.1 TERMINATION AND AMENDMENT. The Plan will terminate on May 2, 2004. No
Awards will be granted under the Plan after that date of termination. Subject to
the limitations contained in this Section, the Committee may at any time amend
or revise the terms of the Plan, including the form and substance of the Option
Agreements, Stock Appreciation Rights Agreements, and Restricted Stock
Agreements to be used in connection herewith; provided that, shareholder
approval shall be obtained whenever necessary to comply with the rules of the
exchange on which the Common Stock is traded or to comply with the Code. No
amendment, suspension or termination of the Plan may, without the consent of the
Participant who has received an Award hereunder, alter or impair any of that
Participant's rights or obligations under any Award granted under the Plan prior
to that amendment, suspension or termination.

8.2 ADJUSTMENT. If the outstanding Common Stock is increased, decreased,
changed into or exchanged for a different number or kind of shares or securities
through merger, consolidation, combination, exchange of shares, other
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split, an appropriate and proportionate adjustment will be made
in the maximum number and kind of Plan Shares as to which Awards may be granted
under the Plan. A corresponding adjustment will be made in the number or kind of
shares allocated to and purchasable under unexercised Options, Stock
Appreciation Rights or shares of Restricted Stock with respect to which
restrictions have not yet lapsed prior to any such change. Any such adjustment
in outstanding Options and Stock Appreciation Rights will be made without change
in the aggregate purchase price applicable to the unexercised portion of the
Award, but with a corresponding adjustment in the price for each share
purchasable under the Award. Any new or additional or different shares or
securities that are distributed to a Participant, in his capacity as the owner
of Restricted Stock acquired hereunder, shall be considered to be Restricted
Stock and shall be subject to all of the conditions and restrictions provided
herein applicable to Restricted Stock. The foregoing adjustments and the manner
of application of the foregoing provisions will be determined solely by the
Committee, and any such adjustment may provide for the elimination of fractional
share interests.

ARTICLE IX

MISCELLANEOUS

9.1 OTHER COMPENSATION PLANS. The adoption of the Plan will not affect any
other stock option or incentive or other compensation plans in effect for the
Company or any of its Subsidiaries, nor will the Plan preclude the Company or
any of its Subsidiaries from establishing any other forms of incentive or other
compensation for Employees.

9.2 PLAN BINDING ON SUCCESSORS. The Plan will be binding upon the
successors and assigns of the Company and any of its Subsidiaries that adopt the
Plan.

9.3 NUMBER AND GENDER. Whenever used herein, nouns in the singular will
include the plural where appropriate, and the masculine pronoun will include the
feminine gender.

9.4 HEADINGS. Headings of articles and sections hereof are inserted for
convenience of reference and constitute no part of the Plan.

ARTICLE X

DEFINITIONS

As used herein with initial capital letters, the following terms have the
meanings hereinafter set forth unless the context clearly indicates to the
contrary:

10.1 "Advisor" means any person performing advisory or consulting services
for the Company or any Subsidiary of the Company, with or without compensation,
to whom the Company chooses to grant Options in

A-10

DEFA14A 30th Page of 33 TOC 1st Previous Next ↓Bottom Just 30th

accordance with the Plan, provide that bona fide services must be rendered by
such person and such services shall not be rendered in connection with the offer
or sale of securities in a capital raising transaction.

10.2 "Award" means a grant of Options under Articles IV and V of the Plan,
an award of Restricted Stock under Article VI of the Plan, or an award of Stock
Appreciation Rights under Article VII of the Plan.

10.3 "Board" means the Board of Directors of the Company.

10.4 "Cause" will mean an act or acts involving a felony, fraud, willful
misconduct, the commission of any act that causes or reasonably may be expected
to cause substantial injury to the Company or other good cause. The term "other
good cause" as used in this Section will include, but will not be limited to,
habitual impertinence, a pattern of conduct that tends to hold the Company up to
ridicule in the community, conduct disloyal to the Company, conviction of any
crime of moral turpitude and substantial dependence, as judged by the Committee,
on alcohol or any controlled substance. "Controlled substance" means a drug,
immediate precursor or other substance listed in Schedules I-V or Penalty Groups
1-4 of the Texas Controlled Substances Act, as amended, or a drug, immediate
precursor or other substance listed in Schedules I-V of the Federal
Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended.

10.5 "Code" means the Internal Revenue Code of 1986, as amended.

10.6 "Committee" shall mean the Committee appointed in accordance with
Section 2.3.

10.7 "Common Stock" means the Common Stock, par value $.05 per share, of
the Company or, in the event that the outstanding shares of such Common Stock
are hereafter changed into or exchanged for shares of a different stock or
security of the Company or some other corporation, such other stock or security.

10.8 "Company" means American Homestar Corporation, a Texas corporation.

10.9 "Disability" of a Participant shall be deemed to occur whenever a
Participant is rendered unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuing period of not less than 12 months.

10.10 "Effective Date" means October 14, 1996.

10.11 "Employee" means an employee of the Company or of any of its
Subsidiaries that adopt the Plan, as defined under Section 3401(c) of the Code
and the regulations promulgated thereunder.

10.12 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

10.13 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

10.14 "Fair Market Value" means such value as will be determined by the
Committee on the basis of such factors as it deems appropriate; provided that if
the Common Stock is traded on a national securities exchange or transactions in
the Common Stock are quoted on the NASDAQ National Market System, such value
will be determined by the Committee on the basis of the last reported sale price
for the Common Stock on the date for which such determination is relevant, as
reported on the national securities exchange or the NASDAQ National Market
System, as the case may be. If the Common Stock is not listed and traded upon a
recognized securities exchange or on the NASDAQ National Market System, the
Committee will make a determination of Fair Market Value on the basis of the
closing bid and asked quotations for such stock on the date for which such
determination is relevant (as reported by a recognized stock quotation service)
or, in the event that there will be no bid or asked quotations on the date for
which such determination is relevant, then on the basis of the mean between the
closing bid and asked quotations on the date nearest preceding the date for
which such determination is relevant for which such bid and asked quotations
were available. In no event shall "Fair Market Value" be less than the par value
of the Common Stock.

10.15 "Incentive Stock Option" means an Option granted under Article IV.

10.16 "Nondiscretionary Option" means a Nonqualified Stock Option granted
to a Nonemployee Director under Section 5.5.

A-11

DEFA14A 31st Page of 33 TOC 1st Previous Next ↓Bottom Just 31st

10.17 "Nonemployee Director" means any director of the Company who is not
an officer or Employee.

10.18 "Nonqualified Stock Option" means an Option granted under Article V.

10.19 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option granted under the Plan.

10.20 "Option Agreement" means an agreement between the Company and a
Participant with respect to one or more Options.

10.21 "Participant" means an Employee, Nonemployee Director or Advisor to
whom an Award has been granted hereunder.

10.22 "Plan" means the American Homestar Corporation 1994 Stock
Compensation Plan, as amended from time to time.

10.23 "Plan Shares" means shares of Common Stock issuable pursuant to the
Plan.

10.24 "Reporting Participant" means a Participant who is subject to the
reporting requirements of Section 16 of the Exchange Act.

10.25 "Restricted Stock" means an award of Common Stock granted under
Article VI.

10.26 "Restricted Stock Agreement" means an agreement between the Company
and a Participant with respect to an award of Restricted Stock.

10.27 "Retirement" of a Participant shall be deemed to be retirement after
reaching (i) age 65 or (ii) age 55 and having completed 10 years of service with
the Company.

10.28 "Securities Act" means the Securities Act of 1933, as amended.

10.29 "Stock Appreciation Rights" means Awards issued pursuant to Article
VII.

10.30 "Stock Appreciation Rights Agreement" means an agreement between the
Company and a Participant with respect to Stock Appreciation Rights.

10.31 "Subsidiary" means a subsidiary corporation of the Company, as
defined in Section 424(f) of the Code.

A-12

DEFA14A 32nd Page of 33 TOC 1st Previous Next ↓Bottom Just 32nd
AMERICAN HOMESTAR CORPORATION
Proxy - Annual Meeting of Shareholders

P The undersigned hereby appoints Laurence A. Dawson, Jr. and Craig A.
Reynolds, each with power to act without the other and with full power of
substitution, as Proxies to represent and to vote, as designated on the
reverse side, all stock of American Homestar Corporation owned by the
R undersigned at the Annual Meeting of Shareholders to be held at South Shore
Harbour Hotel, 2500 South Shore Boulevard, League City, Texas 77573, on
Friday, October 11, 1996, at 10:00 a.m., local time, upon such business as
may properly come before the meeting or any adjournment thereof, including
O the matters set forth on the reverse side.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFIC DIRECTION IS
X GIVEN, THIS PROXY WILL BE VOTED (i) FOR THE ELECTION OF THE NOMINEES FOR
DIRECTOR, (ii) FOR THE AMENDMENT TO THE 1994 STOCK COMPENSATION PLAN, (iii)
FOR THE RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS THE
COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS AND (iv) IN THE
Y DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTER THAT MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.

(Continued on reverse side)

-------------------------------------------------------------------------------
- FOLD AND DETACH HERE -

DEFA14A Last Page of 33 TOC 1st Previous Next ↓Bottom Just 33rd
(CONTINUED FROM OTHER SIDE) Please mark
your votes as [X]
indicated in
this example

1. Election as Directors of the eight nominees listed below (except as
indicated to the contrary below):

FOR ALL WITHHOLD AUTHORITY
NOMINEES to vote on one or more
nominees as struck out to
the right.

[ ] [ ]

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK
THE WITHHOLD BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.

Finis F. Teeter, Laurence A. Dawson, Jr., Craig A. Reynolds, Jackie H. Holland,
Charles N. Carney, Jr., James J. Fallon, William O. Hunt and Jack L. McDonald

2. Amendment of the 1994 Stock Compensation Plan.

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

3. Ratification of the selection of KPMG Peat Marwick LLP as the Company's
independent certified public accountants.

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

4. In their discretion on any other matter that may properly come before the
meeting or any adjournments thereof.

Dated: , 1996
-------------------------------------------------------------------

--------------------------------------------------------------------------------
Signature

--------------------------------------------------------------------------------
(Signature if held jointly)

Please date, sign exactly as shown hereon and mail promptly this proxy in the
enclosed envelope. When there is more than one owner, each should sign. When
signing as an attorney, administrator, executor, guardian or trustee, please
add your title as such. If executed by a corporation, this proxy should be
signed by a duly authorized officer. If executed by a partnership, please sign
in the partnership name by an authorized person.

This proxy may be revoked prior to the exercise of the powers conferred by the
proxy.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -

DEFA14A	1st Page of 33	TOC	↑Top	Previous	Next	↓Bottom	Just 1st

DEFA14A	2nd Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 2nd

DEFA14A	3rd Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 3rd

DEFA14A	4th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 4th

DEFA14A	5th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 5th

DEFA14A	6th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 6th

DEFA14A	7th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 7th

DEFA14A	8th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 8th

DEFA14A	9th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 9th

DEFA14A	10th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 10th

DEFA14A	11th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 11th

DEFA14A	12th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 12th

DEFA14A	13th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 13th

DEFA14A	14th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 14th

DEFA14A	15th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 15th

DEFA14A	16th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 16th

DEFA14A	17th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 17th

DEFA14A	18th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 18th

DEFA14A	19th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 19th

DEFA14A	20th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 20th

DEFA14A	21st Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 21st

DEFA14A	22nd Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 22nd

DEFA14A	23rd Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 23rd

DEFA14A	24th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 24th

DEFA14A	25th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 25th

DEFA14A	26th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 26th

DEFA14A	27th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 27th

DEFA14A	28th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 28th

DEFA14A	29th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 29th

DEFA14A	30th Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 30th

DEFA14A	31st Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 31st

DEFA14A	32nd Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 32nd

DEFA14A	Last Page of 33	TOC	1st	Previous	Next	↓Bottom	Just 33rd

Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘DEFA14A’ Filing	Date	First	Last	Other Filings

	5/2/04	29
	6/9/01	15
	7/12/97	8
	5/31/97	16	18	10-K
	5/23/97	18
	10/14/96	12	30
	10/11/96	2	32	DEF 14A
	9/6/96	2	19
Filed on:	9/4/96			DEF 14A
	8/31/96	17		10-Q
	8/26/96	3	10
	5/31/96	2	19	SC 13G/A
	1/18/96	6	14
	12/31/95	6
	6/1/95	17
	7/12/94	17
	6/1/94	15
	8/31/93	7
	5/20/93	20
				List all Filings

↑Top

Filing Submission 0000950129-96-002083 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

American Homestar Corp – ‘DEFA14A’ on 9/4/96

As of: Wednesday, 9/4/96 · Accession #: 950129-96-2083 · File #: 33-78630

Additional Definitive Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Additional Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents