-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F8I3yz6+3B4oxxyrgYIprk3YkoJZy4z+rvJ/WPbo1qoXyO/iJwPV2tRMTj96y43l NzjiyEADFcKX5+dM+DUUYg== 0000950144-02-008799.txt : 20020814 0000950144-02-008799.hdr.sgml : 20020814 20020814154724 ACCESSION NUMBER: 0000950144-02-008799 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORIOLE HOMES CORP CENTRAL INDEX KEY: 0000074928 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 591228702 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06963 FILM NUMBER: 02736183 BUSINESS ADDRESS: STREET 1: 1690 S CONGRESS AVE STE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 4072742000 FORMER COMPANY: FORMER CONFORMED NAME: ORIOLE LAND & DEVELOPMENT CORP DATE OF NAME CHANGE: 19720615 10-Q 1 g77890e10vq.txt ORIOLE HOMES 6/30/2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended: June 30, 2002 Commission File No. 1-6963 ORIOLE HOMES CORP. ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Florida 59-1228702 - ------------------------------------------------------------ --------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1690 S. Congress Ave., Suite 200 Delray Beach, Fl. 33445 - -------------------------------------------------------------- ---------------------------------------------------------- (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 274-2000 - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the close of the period covered by this report. Class Outstanding at August 9, 2002 - ------------------------------------------------------------ ---------------------------------------------------------- Common Stock, Class A, par value $.10 1,863,149 Common Stock, Class B, par value $.10 2,772,375
ORIOLE HOMES CORP. FORM 10-Q TABLE OF CONTENTS Page ---- Part I. Item 1. Financial Statements.......................................... 2 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................ 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk.... 13 Part II Item 2. Changes in Securities and Use of Proceeds.................... 14 Item 6. Exhibits, Financial Statement Schedules and Reports on Form 8-K........................................ 14 Signatures............................................................... 15 -1- PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS
June 30, December 31, 2002 2001 (Unaudited) (Audited) ----------- ------------- Cash and cash equivalents Unrestricted $ 9,551,263 $ 2,226,739 Restricted 2,583,405 5,849,729 ----------- ----------- 12,134,668 8,076,468 Inventories Land 17,267,227 31,765,628 Homes completed or under construction 14,987,195 26,047,903 Model homes 1,012,889 1,300,459 ----------- ----------- 33,267,311 59,113,990 Property and equipment, at cost Land 81,837 80,885 Buildings 457,216 457,216 Furniture, fixtures and equipment 1,882,042 2,223,601 ----------- ----------- 2,421,095 2,761,702 Less accumulated depreciation 1,816,991 1,952,717 ----------- ----------- 604,104 808,985 ----------- ----------- Land held for investment, at cost -- 1,857,300 Investment in unconsolidated joint venture 5,739,000 5,000,000 Other Prepaid expenses 761,832 1,732,764 Unamortized financing costs 187,266 752,970 Other assets 1,735,956 2,522,057 ----------- ----------- 2,685,054 5,007,791 ----------- ----------- Total assets $54,430,137 $79,864,534 =========== ===========
The accompanying notes are an integral part of these statements. -2- ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, December 31, 2002 2001 (Unaudited) (Audited) ----------- ----------- Liabilities Mortgage notes payable $ 8,224,161 $24,257,026 Accounts payable and accrued liabilities 6,727,502 10,054,699 Customer deposits 6,316,033 9,763,166 ----------- ----------- Total liabilities 21,267,696 44,074,891 ----------- ----------- Shareholders' equity Class A common stock, $.10 par value Authorized - 10,000,000 shares Issued and outstanding - 1,863,149 in 2002 and 2001 186,315 186,315 Class B common stock, $.10 par value Authorized - 10,000,000 shares Issued and outstanding - 2,772,375 in 2002 and 2,762,375 in 2001 277,238 276,238 Additional paid-in capital 19,281,327 19,267,327 Retained earnings 13,417,561 16,059,763 ----------- ----------- Total shareholders' equity 33,162,441 35,789,643 ----------- ----------- Total liabilities and shareholders' equity $54,430,137 $79,864,534 =========== ===========
The accompanying notes are an integral part of these statements. -3- ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ending Three Months Ending June 30, June 30, --------------------------------- --------------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Revenues Sales of homes $ 66,351,801 $ 52,041,751 $ 33,416,544 $ 22,128,047 Sales of land 11,400 -- -- -- Gain on sales of property and equipment, net 3,614 95,568 2,514 (6,650) Gain on sales of land held for investment and other assets, net -- -- -- -- Interest, rentals and other income 753,528 1,102,919 289,943 552,046 ------------ ------------ ------------ ------------ 67,120,343 53,240,238 33,709,001 22,673,443 ------------ ------------ ------------ ------------ Costs and expenses Cost of homes 61,275,692 47,469,544 31,490,952 20,228,596 Cost of land sold 10,467 -- -- -- Costs relating to other operating revenues -- 4,502 -- (1,401) Selling, general and administrative expenses 8,215,386 8,041,144 4,104,721 3,618,518 Interest costs incurred 588,929 3,427,429 208,151 1,640,419 Interest capitalized (deduct) (588,929) (3,427,429) (208,151) (1,640,419) ------------ ------------ ------------ ------------ 69,501,545 55,515,190 35,595,673 23,845,713 ------------ ------------ ------------ ------------ Operating loss (2,381,202) (2,274,952) (1,886,672) (1,172,270) Loss from unconsolidated joint venture (261,000) -- (261,000) -- ------------ ------------ ------------ ------------ Net loss $ (2,642,202) $ (2,274,952) $ (2,147,672) $ (1,172,270) ============ ============ ============ ============ Basic and Diluted loss per Class A and B common share available for common stockholders $ (.57) $ (.49) $ (.46) $ (.25) ============ ============ ============ ============ Weighted average number of common shares outstanding - Basic and Diluted 4,629,723 4,625,524 4,633,876 4,625,524 ============ ============ ============ ============
The accompanying notes are an integral part of these statements. -4- ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ending June 30, --------------------------------- 2002 2001 ------------ ------------ Cash flows from operating activities Net loss $ (2,642,202) $ (2,274,952) Adjustments to reconcile net loss to net cash provided by (used in) operating activities Depreciation 100,560 230,461 Amortization 1,353,461 135,955 Gain on sales of property, equipment and land held for investment, net (3,614) (112,144) Loss from unconsolidated joint venture 261,000 -- (Increase) decrease in operating assets Inventories 26,342,896 (1,242,831) Land held for investment 1,857,301 -- Other assets 558,643 (672,340) Increase (decrease) in operating liabilities Accounts payable and accrued liabilities (3,327,197) (545,544) Customer deposits (3,447,133) 5,899,628 ------------ ------------ Total adjustments 23,695,917 3,693,185 ------------ ------------ Net cash provided by operating activities 21,053,715 1,418,233 ------------ ------------ Cash flows from investing activities Capital expenditures -- (104,278) Investment in unconsolidated joint venture (1,000,000) -- Sales of property and equipment and land held for investment 22,350 229,135 ------------ ------------ Net cash (used in) provided by investing activities (977,650) 124,857 ------------ ------------ Cash flows from financing activities Proceeds from bank borrowings 17,818,469 9,110,005 Principal payments of bank borrowings (33,851,334) (14,208,546) Repayment of line of credit -- (10,000) Repurchase of senior notes -- (1,171,000) Exercise of stock options 15,000 -- ------------ ------------ Net cash (used in) financing activities (16,017,865) (6,279,541) ------------ ------------ Net increase (decrease) in cash and cash equivalents 4,058,200 (4,736,451) Cash and cash equivalents at beginning of period 8,076,468 21,707,756 ------------ ------------ Cash and cash equivalents at end of period $ 12,134,668 $ 16,971,305 ============ ============ Supplemental disclosures of cash flow information Cash paid during the year for: Interest (net of amount capitalized) $ 932,481 $ 15,169 Income taxes $ -- $ --
The accompanying notes are an integral part of these statements. -5- ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated balance sheet as of June 30, 2002 and the related statements of operations and cash flows for the three months and six months ended June 30, 2002 and 2001 of Oriole Homes Corp. (together with its consolidated subsidiaries, the "Company") have been prepared by the Company without audit. In the opinion of management of the Company, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the unaudited interim periods have been reflected herein. Significant intercompany accounts and transactions, if any, have been eliminated in consolidation. Certain prior year balances have been reclassified to conform to the current year presentation. Certain footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2001 annual report on Form 10-K. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 2. The results of operations for the three months and six months ended June 30, 2002 are not necessarily indicative of the results for the entire year. The Company allocates certain costs to units delivered based upon estimates of the number of units projected to be delivered and the associated timing of the deliveries. When it becomes apparent that the number of deliveries in a project will vary significantly from the estimates, the Company will revise these cost allocations, which will affect results of operations. 3. Backlog of contracts for sales of homes:
June 30, 2002 December 31, 2001 ---------------------------- ---------------------------- Units Amounts Units Amounts ------- ----------------- ------- ----------------- Single-Family 138 $ 31,048,897 267 $ 63,310,070 Multi-Family 67 11,591,054 124 19,889,158 ---- ---------- ---- ---------- Total 205 $ 42,639,951 391 $ 83,199,228 ===== ============ ==== ============
-6- ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Mortgage Notes On August 8, 2000, in connection with the Vizcaya Project, a wholly owned subsidiary of the Company borrowed an aggregate principal amount of $26,787,200, of which $9,580,430 was for future construction costs (the "Vizcaya Loan"). The Vizcaya Loan is secured by real property and other assets acquired in connection with the acquisition of the Vizcaya Project. The Company has agreed to guarantee up to an aggregate of $2.0 million of the Vizcaya Loan. Certain individual guarantors, not related to the Company, have also agreed to jointly and severally guarantee the Vizcaya Loan. The Vizcaya Loan bears interest at the prime rate of the bank, which was 4.75% and 6.75% as of June 30, 2002 and 2001, respectively. Accrued interest on the loan is payable monthly and partial payments of principal are made upon the delivery of homes. The Vizcaya Loan is collateralized by certain land and land improvements. On July 16, 2001, the Company entered into agreements that provided for borrowing an aggregate principal amount of $49,878,136, of which $15,451,742 was for future construction costs (the "Mortgage Notes"). Four separate mortgage notes encumbering different parcels of real property (land and related improvements) collateralize the loans. Interest is at the specified prime rate of the bank plus 0.50%, which was 5.25% at June 30, 2002. Interest is payable monthly and partial payments of principal are to be made upon the delivery of homes. The principal must be paid in full at various maturities ranging from January 16, 2003 to July 16, 2003. On July 22, 2002, the Company repaid the remaining balance of the four mortgage notes. On July 16, 2001, the Company also effected an optional redemption of all of its outstanding 12 1/2% Senior Notes due 2003. The total redemption price, including accrued interest of $2,112,688, was $35,915,688. Of this amount, $33,313,737 was provided by the financing arrangement for $49,878,136 described above and $2,601,951 from available cash. Prior to this transaction, Senior Notes had been purchased in the open market at varying prices. On August 23, 2001, the Company entered into an agreement that provided for borrowing an aggregate principal amount of $1,265,000 for the purchase of land (the "Land Loan"). A mortgage note encumbering a parcel of real property secures the Land Loan. Interest is at the specified prime rate of the bank plus 0.50%, or 5.25% as of June 30, 2002. Interest is payable monthly, and the principal must be paid in full at maturity on August 23, 2002. 5. Income taxes At June 30, 2002, the Company has no deferred tax benefit related to its net operating loss as the Company's ability to realize these benefits is not "more likely than not" as defined by SFAS Statement No. 109 "Accounting for Income Taxes". 6. Land held for investment In 2002, the Company has elected to build-out two parcels of land, previously classified as land held for investment at December 31, 2001, in Bonita Springs in Lee County, Florida, with 48 homes. The Company had previously sold 100 homes in this development. -7- ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7. Segment information The Company has one reportable segment: home building. The home building segment develops and sells residential properties and planned communities. In 2000, the rental operations segment's operations were discontinued, and revenues and expenses associated with rental operations ceased. Its remaining assets were sold in the first quarter of 2001. There was no material revenue from the remaining units in the rental segment in 2001. 8. Investment in unconsolidated joint venture On September 14, 2001, the Company contributed capital of $5,000,000 to a special purpose limited liability company formed to operate a joint venture between the Company and Centerline Homes at the Equestrian Club, Inc. to construct and sell homes in Palm Beach County. On February 27, 2002, an additional $1,000,000 was contributed by the Company. Under the terms of the joint venture, the Company is entitled to a preferential distribution equal to the greater of (a) the first $7,841,000 of Available Cash (as defined in the operating agreement) or (b) a return of all of its capital contributions plus an internal rate of return equal to 25% on its contributions to the venture. Under the terms of the joint venture, the Company may, but is not obligated to, make further capital contributions, make any loan to the joint venture or guarantee any of the joint venture's obligations. The Company's interest in the joint venture is accounted for using the equity method of accounting. The Company reported no distribution from its interest in the joint venture and reported a loss of $261,000 to reflect start-up expenses associated with advertising and general and administrative expenses as required by generally accepted accounting principles. 9. Related party transaction In December 2000, the Company sold and leased back nine model homes used by the Vizcaya Project from an entity controlled by certain officers/shareholders of the Company (the "Related Party"). The selling prices of the model homes approximated fair market value. The Related Party paid $1,365,010 in cash and issued an unsecured promissory note in the amount of $588,800. Interest on the note of 8.0% per annum was payable monthly beginning December 30, 2000 and the principal was to be paid in full no later than maturity on December 30, 2003. The promissory note was repaid in full at March 31, 2002. 10. Subsequent Events On July 22, 2002, the Company repaid the remaining balance of the Mortgage Notes issued July 16, 2001 described at Note 4 above. -8- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The results of operations for interim periods during the year are not necessarily indicative of results of operations for the fiscal year. The Company allocates certain costs to units delivered based upon estimates of the number of annual units projected to be delivered and the associated timing of the deliveries. In past years, the Company has experienced inventory valuation adjustments reducing net income when expected deliveries fell short of expectations. These included adjustments of $13.9 million in 1995, $21.6 million in 1997 and $4.9 million in 1999. LIQUIDITY AND CAPITAL RESOURCES The Company's cash requirements vary from period to period depending upon changes in inventory, land acquisition and development requirements, construction in progress and, to a lesser extent, the Company's current net income or loss. The Company obtains funds for its cash requirements from operations, proceeds from the sale of investment property and from borrowings. Currently, borrowings are concentrated with two lenders. In connection with land acquisitions and development, the Company may borrow money secured by land and improvements. During the first six months of 2002, the Company used a portion of cash generated by operations to pay down a net amount of $16.0 million of mortgage notes. On February 27, 2002, the Company contributed an additional $1.0 million to a special purpose limited liability company formed to operate a joint venture between the Company and Centerline Homes at the Equestrian Club, Inc. to construct and sell homes in Palm Beach County. At June 30, 2002, the Company had approximately $12.1 million in cash and cash equivalents, an increase of $4.1 million from December 31, 2001. In 2002, the Company has also elected to build-out two parcels of land, previously classified as land held for investment at December 31, 2001, in Bonita Springs in Lee County, Florida, with 48 homes. The Company had previously sold 100 homes in this development. The Company has no material commitments or material off-balance sheet obligations that would affect future liquidity. Management anticipates that funds from operations, available cash and cash available under existing credit facilities are sufficient for reasonably anticipated current and near-term capital requirements through June 30, 2003. As funds from operations result primarily from the delivery of homes, which cycle time is eight to twelve months, a decrease in customers' demand for homes would not have an immediate impact on cash availability. The effect of a decrease in demand, if any, would be felt in the following year. If the Company does not have sufficient capital resources to acquire capital assets and land, develop land improvements, and meet other needs of its business, projects may be delayed and additional financing may be required, resulting in possible adverse effects on the Company's results of operations. No assurance can be given as to the terms, availability or cost of any future financing the Company may need. If the Company is at any time unable to service its debt, financing may not be available or available on terms acceptable to the Company. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THREE MONTHS ENDED JUNE 30, 2001 The Company's revenues from home sales increased $11.3 million (51.0%) to $33.4 million during the second quarter of 2002 as compared to the comparable quarter of 2001 primarily as a result of an increase in the average selling price of single-family homes. Oriole delivered 159 homes in the 2002 second quarter compared to 118 in the same period in 2001. The average selling price of homes delivered increased from $187,500 per home to $210,200 as a result of the higher selling prices of multi-family homes, particularly in the Terraces at Celebration project. The number of contracts signed at 52 and the aggregate -9- dollar value of those contracts at $9.8 million decreased substantially in the 2002 second quarter from 196 and $43.7 million, respectively, from the same period in 2001 as a result of the reduced inventory of land available for development. Non-homebuilding revenues remained substantially unchanged in the quarter ended June 30, 2002 as compared to the same period in 2001. Interest, rentals and other income decreased $0.3 million during the second quarter of 2002 as compared to the same period in 2001 due to reduced earnings on interest-bearing investments and a reduction in other revenues associated with operations. Cost of home sales increased to $31.5 million (55.7%) from $20.2 million in 2001 primarily due to an increase in the number of homes delivered. As a percentage of home sales, cost of sales increased to 94.2% as compared to 91.4% in the same period in 2001 as a result of a differing product mix of units delivered and increase of $1,008,865 in the potential bonus due to the builder of the Vizcaya project. Selling, general and administrative expenses increased $0.5 million in dollar value but decreased as a percentage of revenues to 12.1% from 16.0% as compared to the same period in 2001. In particular, reductions in operations expenses were offset by expenses associated with the evaluation of the Company's strategic alternatives (legal, investment banking, etc.) and severance payments attributable to the close out of several communities. The Company reflected a loss of $261,000 on its investment in the unconsolidated joint venture at the Equestrian Club, Inc. to properly reflect start-up expenses associated with advertising and general and administrative expenses as required by generally accepted accounting principles. The Company incurred a net loss for the quarter ended June 30, 2002 of $2,148,000 or a $0.46 loss per share compared to a net loss of $1,172,000 or a $0.25 loss per share during the same period in 2001. Earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, is recognized within the real estate industry as a meaningful financial measure. Interest expense included in the cost of sales, depreciation and amortization are non-cash items added back to the Company's net loss of $2,148,000 and therefore included in EBITDA of approximately $1.1 million. This represented an increase of almost $1.1 million in the second quarter of 2002 as compared to the same period in 2001. The Company has continued to respond to the close-out of several of its projects by reductions in staff and related overhead expenses. The Company reduced staff by 21% in the second quarter of 2002 and will continue to adjust to meet current market conditions and activity levels. The Company has earned a preferred return, as defined, based upon its cash investment in the Vizcaya Project. Under the terms of a Builder's Agreement, Centerline Homes at Delray, Inc. was entitled to receive a bonus up to this cumulative preferred return earned by the Company. Thereafter, excess net income, as defined, is shared equally. Based upon the cumulative Vizcaya results of operations to June 30, 2002, the potential bonus to match the cumulative preferred return received by the Company due to the builder was increased from $786,340 to $1,520,205. In addition, the Company accrued a bonus of $275,000 for the builder's share of excess net income. Because the Company's cash investment has been reduced to zero in June, 2002, and because the builder is entitled, out of available profits as defined, to earn a bonus up to the total cumulative preferred return received by the Company, with an additional bonus of 50% of subsequent profits earned, future net income accruing to the Company from this project is expected to be significantly lower. SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO SIX MONTHS ENDED JUNE 30, 2001 The Company's revenues from home sales increased $14.3 million (27.5%) to $66.4 million during the first six months of 2002 as compared to the same period in 2001 primarily as a result of an increase in the average selling price of single-family and multi-family homes. Oriole delivered 318 homes in the first six months of 2002 compared to 285 in the same period in 2001. The average -10- selling price of homes delivered increased from $182,603 per home to $208,653 as a result of the higher volume of homes closed that were part of the Country Glen and Terraces at Celebration projects. The number of contracts signed at 132 and the aggregate dollar value of those contracts at $25.8 million decreased substantially in the first six months of 2002 from 448 and $97.3 million, respectively, from the same period in 2001 as a result of the reduced inventory of land available for development. Non-homebuilding revenues decreased to $15,014 during the six month period ended June 30, 2002 from $95,568 in the same period ended June 30, 2001 due to the sale of the last remaining rental properties in the first quarter of 2001. Interest, rentals and other income decreased by $0.3 million during 2002 as compared to the same period in 2001 due to to reduced earnings on interest-bearing investments and reduction in other revenues associated with operations. Cost of home sales increased to $61.3 million (29.1%) from $47.5 million in 2001 primarily due to an increase in the number of homes delivered. As a percentage of home sales, cost of sales increased slightly to 92.4% as compared to 91.2% in the same period in 2001 as a result of a differing product mix of units delivered and increase of $1,035,205 in the potential bonus due to the builder of the Vizcaya project. Selling, general and administrative expenses increased $0.2 million in dollar value but decreased as a percentage of revenues to 12.2% from 15.1% as compared to the same period in 2001. In particular, reductions in operations expenses were offset by expenses associated with the evaluation of the Company's strategic alternatives (legal, investment banking, etc.) and severance payments attributable to the close out of several communities. The Company reflected a loss of $261,000 on its investment in the unconsolidated joint venture at the Equestrian Club, Inc. to properly reflect start-up expenses associated with advertising and general and administrative expenses as required by generally accepted accounting principles. The Company incurred a net loss for the first six months ended June 30, 2002 of $2,642,000 or a $0.57 loss per share compared to a net loss of $2,275,000 or a $0.49 loss per share during the same period in 2001. Earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, is recognized within the real estate industry as a meaningful financial measure. Interest expense included in the cost of sales, depreciation and amortization are non-cash items added back to the Company's net loss of $2,642,000 and therefore included in EBITDA of approximately $3.7 million. This represented an increase of $2.5 million in the first six months of 2002 as compared to the same period in 2001. The Company has continued to respond to the close-out of several of its projects by reductions in staff and related overhead expenses. The Company reduced staff by 38% in the first six months of 2002 and will continue to adjust to meet current market conditions and activity levels. The Company has earned a preferred return, as defined, based upon its cash investment in the Vizcaya Project. Under the terms of a Builder's Agreement, Centerline Homes at Delray, Inc. was entitled to receive a bonus up to this cumulative preferred return earned by the Company. Thereafter, excess net income, as defined, is shared equally. Based upon the cumulative Vizcaya results of operations to June 30, 2002, the potential bonus to match the cumulative preferred return received by the Company due to the builder was increased from $760,340 to $1,520,205. In addition, the Company accrued a bonus of $275,000 for the builder's share of excess net income. Because the Company's cash investment has been reduced to zero in June, 2002, and because the builder is entitled, out of available profits as defined, to earn a bonus up to the total cumulative preferred return received by the Company, with an additional bonus of 50% of subsequent profits earned, future net income accruing to the Company from this project is expected to be significantly lower. GENERAL Based upon the reduced backlog of homes to be delivered and the reduced number of customer deposits as compared to last year, home-building revenues for fiscal 2002 will most likely be lower than fiscal 2001. The Company believes that its project in Stonecrest can provide a stable source of revenue for the -11- next several years. The Spring Park Terraces project in Celebration and the Sandpiper Isles and Sandpiper Greens projects in Pelican Landing are in development and construction stages in 2002, with sales revenues being recognized through 2003. The build-out of many of our current projects is anticipated by year-end 2002, and the Company is evaluating future land purchases, as well as developing future strategies for positioning itself within the competitive building and development market in Florida. The Company is also in the process of considering strategic alternatives to its current operating strategies in an effort to maximize shareholder value. FORWARD-LOOKING STATEMENTS Some of the statements in this document are "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. By their nature, forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those that the statements anticipate. PARTICULAR FACTORS THAT COULD AFFECT US The following factors in particular could significantly affect our operations and financial results. The residential homebuilding industry is cyclical and is highly sensitive to changes in general economic conditions, such as consumer confidence and income, availability of financing, interest rate levels and demand for housing. The resale market for used homes, including foreclosed homes, also affects new home sales. The residential homebuilding industry has, from time-to-time, experienced fluctuating lumber prices and supply, as well as shortages of other materials and labor, including insulation, drywall, concrete, carpenters, electricians and plumbers. Delays in construction of homes due to these shortages or due to weather conditions could adversely affect our operations. Inflation can increase the cost of building materials and labor and other construction related costs. Conversely, deflation can reduce the value of our land inventory and make it more difficult to include the full cost of previously purchased land in home sale prices. Customers may be unwilling or unable to purchase our homes at times when mortgage-financing costs are considered high. In general, housing demand is adversely affected by increases in interest rates and by decreases in the availability of mortgage financing. Also, our homebuilding activity is dependent upon the cost and availability of mortgage financing for buyers of homes currently owned by potential customers who need to sell before buying from us. Although about 45% of our current sales are for cash, there is no guarantee that future sales will be made on such terms in comparable amounts. If mortgage interest rates increase and the ability or willingness of prospective buyers to finance home purchases is adversely affected, our operating results may suffer. A number of other factors can cause our operating results to vary. We have historically experienced, and expect to continue to experience, variability in operating results on a quarterly basis. Factors that may contribute to this variability include, but are not limited to: o The timing of home deliveries and land sales; o The timing of receipt of regulatory approvals for the construction of homes; o Changes in the regulatory environment particularly with respect to zoning and land use; o The condition of the real estate market and general economic conditions, which can be adversely affected by national and international events, such as the tragic events of September 11, 2001; o The cyclical nature of the homebuilding and financial services industries; o Changes in federal income tax laws; o An increase in the supply of homes available for sale; o Pricing policies of our competitors; o The timing of the opening of new residential communities; and o The cost and availability of materials and labor. -12- Our historical financial performance is not necessarily a meaningful indicator of future results. We expect our financial results to continue to vary from quarter to quarter. We have incurred significant losses in the past several years and can provide no assurances that we will be able to implement strategies that will result in profitability. We have engaged affiliates of Centerline Homes, Inc. to develop and manage two of our real estate investments, the Vizcaya Project and the Equestrian Club. As our other investment properties are closed and delivered, our profitability may increasingly depend on the ability of Centerline Homes to manage these two investments in a financially successful manner. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in our market risk from December 31, 2001. For information regarding our market risk, refer to our Form 10-K for the fiscal year ended December 31, 2001. -13- PART II - OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS On May 10, 2002, the Company granted options to purchase, at an exercise price of $2.75 per share, 1,065 shares of the Company's Class B common stock to each of the Company's non-employee directors, George Richards, Paul Lehrer and Maurice Levenson. The options vest and become non-forfeitable one year from the date the options were granted. One-half of each option is exercisable on the date that the options vest. The balance of each of the options is exercisable two years from the date the options were granted. The grant of the options was exempt from registration under Section 4(2) of the Securities Act of 1933 because each of the non-employee directors is a sophisticated investor who has knowledge of all material information about the Company. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits EXHIBIT NUMBER ------- 10.62 Stock Option Agreement with George Richards dated May 10, 2002 10.63 Stock Option Agreement with Paul Lehrer dated May 10, 2002 10.64 Stock Option Agreement with Maurice Levenson dated May 10, 2002 10.65 Amendment to 1994 Stock Option Plan for Non-Employee Directors 10.66 Amendment to Stock Option Agreements of Paul Lehrer dated May 10, 2002 10.67 Amendment to Stock Option Agreements of George Richards dated May 10, 2002 10.68 Amendment to Stock Option Agreement of Maurice Levenson dated May 10, 2002 (b) Reports on Form 8-K There were no reports on Form 8-K filed for the three months ended June 30, 2002. -14- SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ORIOLE HOMES CORP. DATE AUGUST 14, 2002 /s/ R.D. LEVY ------------------ ---------------------------------------------- R.D. Levy, Chairman of the Board, Chief Executive Officer, Director (Principal Executive Officer) DATE AUGUST 14, 2002 /s/ J. PIVINSKI ------------------ ---------------------------------------------- J. Pivinski, Vice President - Finance, Treasurer, Chief Financial Officer (Principal Financial and Accounting Officer) -15- EX-10.62 3 g77890exv10w62.txt STOCK OPTION AGREEMENT-RICHARDS EXHIBIT 10.62 STOCK OPTION AGREEMENT FOR NONEMPLOYEE DIRECTORS AGREEMENT dated this 10th day of May, 2002, between Oriole Homes Corp., a Florida corporation (hereinafter called the "Company"), and George R. Richards (hereinafter called the "Eligible Director"). W I T N E S S E T H: WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to which each Eligible Director is entitled to receive a grant to purchase 1,200 Shares per year, up to a maximum of 6,000 Shares: WHEREAS, the Company's Board of Directors approved (on May 12, 1999) the adjustment of the maximum Shares pursuant to Article 7 of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") each Eligible Director is now entitled to a maximum of 12,000 Shares: WHEREAS, the Executive Committee of the Board of Directors of the Company (the "Committee") has this day granted to each Eligible Director an option to purchase 1,065 shares of Class B Common Stock, par value $.10 per share, (the "Shares") of the Company, and at the option price, all as hereinafter stated, such option to be exercisable not more than ten (10) years after the date hereof; and WHEREAS, the Eligible Director is willing to accept said option and to be bound by the terms and conditions thereof; and WHEREAS, the execution and delivery of this Agreement has been duly authorized by the Board of Directors of the Company; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein contained and other good and valuable considerations, the receipt whereof is hereby acknowledged, the parties hereto, including to be legally bound hereby, agree as follows: GRANT OF OPTION: ADJUSTMENT OF SHARES COVERED BY OPTION 1.1 The Company hereby grants to the Eligible Director an option to purchase from the Company, upon the terms and conditions hereinafter set forth, 1,065 shares of Class B Common Stock, par value $.10 per share (the "Shares"), for a cash consideration of $2.75 per share. 1.2 The number of Shares above stated, and the purchase price thereof, may be subject to adjustment from time to time as provided herein. VESTING 2.1 This option shall vest and become nonforfeitable on the first anniversary of the date of this Stock Option Agreement if the Eligible Director continues to serve as a Director after such date. PAYMENTS FOR SHARES 3.1 The option price of the shares to be purchased pursuant to each exercise of the within option shall be paid to the Company by the Eligible Director in full in cash or by bank certified, cashier's or personal check at the time of exercise of the option. EXERCISE OF OPTION 4.1 The within option may be exercised according to the following schedule: 4.1.1 Fifty (50%) percent of the option becomes exercisable on the date of the first anniversary of the date of this Stock Option Agreement. 4.1.2 The remaining fifty (50%) percent of the option becomes exercisable on the second anniversary of the date of this Stock Option Agreement. TERM OF OPTION 5.1 The options granted shall expire ten years from the date hereof, but are subject to earlier termination as follows: 5.1.1 In the event of the termination of the optionee's service as a Director, other than by reason of retirement, total and permanent disability, or death, the options granted herein that have not been exercised shall automatically expire on the effective date of termination. 5.1.2 In the event of termination of the optionee by reason of retirement or total and permanent disability, all vested options shall become exercisable to the full extent of the number of Shares remaining then outstanding, regardless of whether such options were previously exercisable and each such option shall expire four years after the date of such termination or on the stated grant expiration date whichever is earlier. 5.1.3 In the event of the death of the optionee while he is still a Director, vested options as per Section 2.1 hereof shall become exercisable, to the full extent of Shares remaining covered by such options, regardless of whether such options were previously exercisable and each such option shall expire four years after the date of death of such optionee or on the stated grant expiration, whichever is earlier. RESTRICTIONS ON EXERCISE OF OPTION AND SALE OF STOCK BY ELIGIBLE DIRECTOR 6.1 The within option shall not be exercisable if: (a) The exercise thereof will involve a violation of any applicable federal or state securities law; or (b) The exercise thereof will require registration under the Securities Act of 1933, as amended, of the shares of stock or other securities of the Company to be purchased by the Eligible Director pursuant to such exercise. 6.2 The Company hereby agrees to make such reasonable efforts to comply with any applicable state securities law as the Committee of the Company shall determine are reasonably necessary but such efforts shall not subject the Company to unreasonable expense or hardship. 6.3 At the time of any exercise of the within option, the Eligible Director shall represent to and agree with the Company in writing that he is acquiring the shares in respect of which the option is being exercised for the purpose of investment and not with a view of distribution. 2 6.4 The Eligible Director agrees that he will not sell or otherwise dispose of any shares of stock or other securities of the Company purchased by him pursuant to the exercise of all or any portion of the within option at any time unless there is an effective Registration Statement in respect of such shares or other securities under the provisions of the Securities Act of 1933, as amended, or counsel for the Company is reasonably satisfied that an exemption from such registration provisions is available to the Company and the Eligible Director. MISCELLANEOUS 7.1 This Agreement shall be binding upon and inure to the benefit of the Company and its successors and the Eligible Director and his executors, administrators or personal representatives provided that the within option shall be non-transferable by the Eligible Director otherwise than by will or by the laws of descent and distribution, and during the lifetime of the Eligible Director the option shall be exercisable only by him. 7.2 In the event there are any changes in the capitalization of the Company through merger, consolidation, recapitalization, stock dividend or other change in the corporate or capital structure of the Company, appropriate adjustments, as may seem equitable to the Committee shall be made in the number of shares and the exercise price per share of the options to prevent dilution of the rights granted hereunder. 7.3 This Agreement shall be deemed to be made under and shall be construed in accordance with the laws of the State of Florida. 7.4 This Agreement shall become effective as of the date hereof and, unless sooner terminated, shall remain in effect for a period of ten (10) years from the date hereof. This Agreement may be terminated at any time by mutual consent of the parties hereto, but no modification or amendment of this Agreement shall become effective until such modification or amendment shall have been approved by the Committee. IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to be executed by its President or Vice President and the Eligible Director has executed this Agreement, the day and year first above written. ORIOLE HOMES CORP. --------------------------- Richard D. Levy Chief Executive Officer --------------------------- George R. Richards, Director 3 EX-10.63 4 g77890exv10w63.txt STOCK OPTION AGREEMENT-LEHRER EXHIBIT 10.63 STOCK OPTION AGREEMENT FOR NONEMPLOYEE DIRECTORS AGREEMENT dated this 10th day of May, 2002, between Oriole Homes Corp., a Florida corporation (hereinafter called the "Company"), and Paul R. Lehrer (hereinafter called the "Eligible Director"). W I T N E S S E T H: WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to which each Eligible Director is entitled to receive a grant to purchase 1,200 Shares per year, up to a maximum of 6,000 Shares: WHEREAS, the Company's Board of Directors approved (on May 12, 1999) the adjustment of the maximum Shares pursuant to Article 7 of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") each Eligible Director is now entitled to a maximum of 12,000 Shares: WHEREAS, the Executive Committee of the Board of Directors of the Company (the "Committee") has this day granted to each Eligible Director an option to purchase 1,065 shares of Class B Common Stock, par value $.10 per share, (the "Shares") of the Company, and at the option price, all as hereinafter stated, such option to be exercisable not more than ten (10) years after the date hereof; and WHEREAS, the Eligible Director is willing to accept said option and to be bound by the terms and conditions thereof; and WHEREAS, the execution and delivery of this Agreement has been duly authorized by the Board of Directors of the Company; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein contained and other good and valuable considerations, the receipt whereof is hereby acknowledged, the parties hereto, including to be legally bound hereby, agree as follows: GRANT OF OPTION: ADJUSTMENT OF SHARES COVERED BY OPTION 1.1 The Company hereby grants to the Eligible Director an option to purchase from the Company, upon the terms and conditions hereinafter set forth, 1,065 shares of Class B Common Stock, par value $.10 per share (the "Shares"), for a cash consideration of $2.75 per share. 1.2 The number of Shares above stated, and the purchase price thereof, may be subject to adjustment from time to time as provided herein. VESTING 2.1 This option shall vest and become nonforfeitable on the first anniversary of the date of this Stock Option Agreement if the Eligible Director continues to serve as a Director after such date. PAYMENTS FOR SHARES 3.1 The option price of the shares to be purchased pursuant to each exercise of the within option shall be paid to the Company by the Eligible Director in full in cash or by bank certified, cashier's or personal check at the time of exercise of the option. EXERCISE OF OPTION 4.1 The within option may be exercised according to the following schedule: 4.1.1 Fifty (50%) percent of the option becomes exercisable on the date of the first anniversary of the date of this Stock Option Agreement. 4.1.2 The remaining fifty (50%) percent of the option becomes exercisable on the second anniversary of the date of this Stock Option Agreement. TERM OF OPTION 5.1 The options granted shall expire ten years from the date hereof, but are subject to earlier termination as follows: 5.1.1 In the event of the termination of the optionee's service as a Director, other than by reason of retirement, total and permanent disability, or death, the options granted herein that have not been exercised shall automatically expire on the effective date of termination. 5.1.2 In the event of termination of the optionee by reason of retirement or total and permanent disability, all vested options shall become exercisable to the full extent of the number of Shares remaining then outstanding, regardless of whether such options were previously exercisable and each such option shall expire four years after the date of such termination or on the stated grant expiration date whichever is earlier. 5.1.3 In the event of the death of the optionee while he is still a Director, vested options as per Section 2.1 hereof shall become exercisable, to the full extent of Shares remaining covered by such options, regardless of whether such options were previously exercisable and each such option shall expire four years after the date of death of such optionee or on the stated grant expiration, whichever is earlier. RESTRICTIONS ON EXERCISE OF OPTION AND SALE OF STOCK BY ELIGIBLE DIRECTOR 6.1 The within option shall not be exercisable if: (a) The exercise thereof will involve a violation of any applicable federal or state securities law; or (b) The exercise thereof will require registration under the Securities Act of 1933, as amended, of the shares of stock or other securities of the Company to be purchased by the Eligible Director pursuant to such exercise. 6.2 The Company hereby agrees to make such reasonable efforts to comply with any applicable state securities law as the Committee of the Company shall determine are reasonably necessary but such efforts shall not subject the Company to unreasonable expense or hardship. 6.3 At the time of any exercise of the within option, the Eligible Director shall represent to and agree with the Company in writing that he is acquiring the shares in respect of which the option is being exercised for the purpose of investment and not with a view of distribution. 2 6.4 The Eligible Director agrees that he will not sell or otherwise dispose of any shares of stock or other securities of the Company purchased by him pursuant to the exercise of all or any portion of the within option at any time unless there is an effective Registration Statement in respect of such shares or other securities under the provisions of the Securities Act of 1933, as amended, or counsel for the Company is reasonably satisfied that an exemption from such registration provisions is available to the Company and the Eligible Director. MISCELLANEOUS 7.1 This Agreement shall be binding upon and inure to the benefit of the Company and its successors and the Eligible Director and his executors, administrators or personal representatives provided that the within option shall be non-transferable by the Eligible Director otherwise than by will or by the laws of descent and distribution, and during the lifetime of the Eligible Director the option shall be exercisable only by him. 7.2 In the event there are any changes in the capitalization of the Company through merger, consolidation, recapitalization, stock dividend or other change in the corporate or capital structure of the Company, appropriate adjustments, as may seem equitable to the Committee shall be made in the number of shares and the exercise price per share of the options to prevent dilution of the rights granted hereunder. 7.3 This Agreement shall be deemed to be made under and shall be construed in accordance with the laws of the State of Florida. 7.4 This Agreement shall become effective as of the date hereof and, unless sooner terminated, shall remain in effect for a period of ten (10) years from the date hereof. This Agreement may be terminated at any time by mutual consent of the parties hereto, but no modification or amendment of this Agreement shall become effective until such modification or amendment shall have been approved by the Committee. IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to be executed by its President or Vice President and the Eligible Director has executed this Agreement, the day and year first above written. ORIOLE HOMES CORP. --------------------------- Richard D. Levy Chief Executive Officer --------------------------- Paul R. Lehrer, Director 3 EX-10.64 5 g77890exv10w64.txt STOCK OPTION AGREEMENT-LEVENSON EXHIBIT 10.64 STOCK OPTION AGREEMENT FOR NONEMPLOYEE DIRECTORS AGREEMENT dated this 10th day of May, 2002, between Oriole Homes Corp., a Florida corporation (hereinafter called the "Company"), and Maurice E. Levenson (hereinafter called the "Eligible Director"). W I T N E S S E T H: WHEREAS, the Company's shareholders approved (on May 9, 1994) the adoption of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") pursuant to which each Eligible Director is entitled to receive a grant to purchase 1,200 Shares per year, up to a maximum of 6,000 Shares: WHEREAS, the Company's Board of Directors approved (on May 12, 1999) the adjustment of the maximum Shares pursuant to Article 7 of the 1994 Stock Option Plan for Nonemployee Directors (the "Plan") each Eligible Director is now entitled to a maximum of 12,000 Shares: WHEREAS, the Executive Committee of the Board of Directors of the Company (the "Committee") has this day granted to each Eligible Director an option to purchase 1,065 shares of Class B Common Stock, par value $.10 per share, (the "Shares") of the Company, and at the option price, all as hereinafter stated, such option to be exercisable not more than ten (10) years after the date hereof; and WHEREAS, the Eligible Director is willing to accept said option and to be bound by the terms and conditions thereof; and WHEREAS, the execution and delivery of this Agreement has been duly authorized by the Board of Directors of the Company; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein contained and other good and valuable considerations, the receipt whereof is hereby acknowledged, the parties hereto, including to be legally bound hereby, agree as follows: GRANT OF OPTION: ADJUSTMENT OF SHARES COVERED BY OPTION 1.1 The Company hereby grants to the Eligible Director an option to purchase from the Company, upon the terms and conditions hereinafter set forth, 1,065 shares of Class B Common Stock, par value $.10 per share (the "Shares"), for a cash consideration of $2.75 per share. 1.2 The number of Shares above stated, and the purchase price thereof, may be subject to adjustment from time to time as provided herein. VESTING 2.1 This option shall vest and become nonforfeitable on the first anniversary of the date of this Stock Option Agreement if the Eligible Director continues to serve as a Director after such date. PAYMENTS FOR SHARES 3.1 The option price of the shares to be purchased pursuant to each exercise of the within option shall be paid to the Company by the Eligible Director in full in cash or by bank certified, cashier's or personal check at the time of exercise of the option. EXERCISE OF OPTION 4.1 The within option may be exercised according to the following schedule: 4.1.1 Fifty (50%) percent of the option becomes exercisable on the date of the first anniversary of the date of this Stock Option Agreement. 4.1.2 The remaining fifty (50%) percent of the option becomes exercisable on the second anniversary of the date of this Stock Option Agreement. TERM OF OPTION 5.1 The options granted shall expire ten years from the date hereof, but are subject to earlier termination as follows: 5.1.1 In the event of the termination of the optionee's service as a Director, other than by reason of retirement, total and permanent disability, or death, the options granted herein that have not been exercised shall automatically expire on the effective date of termination. 5.1.2 In the event of termination of the optionee by reason of retirement or total and permanent disability, all vested options shall become exercisable to the full extent of the number of Shares remaining then outstanding, regardless of whether such options were previously exercisable and each such option shall expire four years after the date of such termination or on the stated grant expiration date whichever is earlier. 5.1.3 In the event of the death of the optionee while he is still a Director, vested options as per Section 2.1 hereof shall become exercisable, to the full extent of Shares remaining covered by such options, regardless of whether such options were previously exercisable and each such option shall expire four years after the date of death of such optionee or on the stated grant expiration, whichever is earlier. RESTRICTIONS ON EXERCISE OF OPTION AND SALE OF STOCK BY ELIGIBLE DIRECTOR 6.1 The within option shall not be exercisable if: (a) The exercise thereof will involve a violation of any applicable federal or state securities law; or (b) The exercise thereof will require registration under the Securities Act of 1933, as amended, of the shares of stock or other securities of the Company to be purchased by the Eligible Director pursuant to such exercise. 6.2 The Company hereby agrees to make such reasonable efforts to comply with any applicable state securities law as the Committee of the Company shall determine are reasonably necessary but such efforts shall not subject the Company to unreasonable expense or hardship. 6.3 At the time of any exercise of the within option, the Eligible Director shall represent to and agree with the Company in writing that he is acquiring the shares in respect of which the option is being exercised for the purpose of investment and not with a view of distribution. 2 6.4 The Eligible Director agrees that he will not sell or otherwise dispose of any shares of stock or other securities of the Company purchased by him pursuant to the exercise of all or any portion of the within option at any time unless there is an effective Registration Statement in respect of such shares or other securities under the provisions of the Securities Act of 1933, as amended, or counsel for the Company is reasonably satisfied that an exemption from such registration provisions is available to the Company and the Eligible Director. MISCELLANEOUS 7.1 This Agreement shall be binding upon and inure to the benefit of the Company and its successors and the Eligible Director and his executors, administrators or personal representatives provided that the within option shall be non-transferable by the Eligible Director otherwise than by will or by the laws of descent and distribution, and during the lifetime of the Eligible Director the option shall be exercisable only by him. 7.2 In the event there are any changes in the capitalization of the Company through merger, consolidation, recapitalization, stock dividend or other change in the corporate or capital structure of the Company, appropriate adjustments, as may seem equitable to the Committee shall be made in the number of shares and the exercise price per share of the options to prevent dilution of the rights granted hereunder. 7.3 This Agreement shall be deemed to be made under and shall be construed in accordance with the laws of the State of Florida. 7.4 This Agreement shall become effective as of the date hereof and, unless sooner terminated, shall remain in effect for a period of ten (10) years from the date hereof. This Agreement may be terminated at any time by mutual consent of the parties hereto, but no modification or amendment of this Agreement shall become effective until such modification or amendment shall have been approved by the Committee. IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to be executed by its President or Vice President and the Eligible Director has executed this Agreement, the day and year first above written. ORIOLE HOMES CORP. --------------------------- Richard D. Levy Chief Executive Officer --------------------------- Maurice E. Levenson, Director 3 EX-10.65 6 g77890exv10w65.txt AMEND TO 1994 STOCK OPTION PLAN EXHIBIT 10.65 ORIOLE HOMES CORP. AMENDMENT TO 1994 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS 1. AMENDMENT 1.1 This Amendment to 1994 Stock Option Plan for Non-employee Directors (the "Plan") of Oriole Homes Corp. (the "Company") is intended to revise the provisions of the Plan with respect to grant size and date, vesting and exercisability of an option granted pursuant to the Plan. 1.2 Capitalized terms used in this Amendment will have the meanings ascribed to them in the Plan. 2. OPTION GRANT SIZE AND GRANT DATES Section 6.2 of the Plan is hereby amended in its entirety to read as follows: "An option to purchase up to 1,200 Shares (as adjusted pursuant to Article 7) shall be granted to each Eligible Director (i) immediately following the Annual Meeting (as described in the Company's By-Laws) at which such Eligible Director is first elected or the first Annual Meeting after such Eligible Director is first appointed by the Board of Directors to serve as a director and immediately following each Annual Meeting thereafter, provided that the Eligible Director is reelected to serve as a director at such Annual Meeting; or in the event no Annual Meeting is held, (ii) immediately following each period of twelve consecutive months during which the Eligible Director has served as a Director, or such shorter period as the Board of Directors may determine in its discretion (the "Grants")." 3. OPTION EXERCISE PRICE Section 6.3 of the Plan is hereby amended in its entirety to read as follows: "The option exercise price per share shall be the Closing Price of the Common Stock on the American Stock Exchange, or such other domestic exchange, automated quotation system or other over-the-counter market (including the OTC Bulletin Board or The Pink Sheets, Inc.) on which the Common Stock is then traded, on the business day immediately preceding the date of grant (the "Grant Date") of such option, or if the Common Stock is delisted from all domestic stock exchanges and is no longer traded in an over-the-counter market, the fair market value per share of the Common Stock as determined by the Company's Board of Directors in its sole discretion." 4. VESTING; EXERCISABILITY Section 6.4 of the Plan is hereby amended in its entirety to read as follows: "An option shall vest and become nonforfeitable on the first anniversary of the Grant Date of such option, provided that the optionee has continued to serve as a Director until the Vesting Date. An option shall thereafter become exercisable, subject to Section 6.7, according to the following schedule: PORTION OF OPTION GRANT THAT DAY ON WHICH PORTION BECOMES EXERCISABLE BECOMES EXERCISABLE ---------------------------- -------------------- 50% First Anniversary of the Grant Date Additional 50% Second anniversary of the Grant Date" IN WITNESS WHEREOF, this Amendment to 1994 Stock Option Plan for Non-employee Directors has been executed on behalf of the Company effective as of May 10, 2002. ORIOLE HOMES CORP. -------------------------------- R.D. Levy, Chairman of the Board and Chief Executive Officer -2- EX-10.66 7 g77890exv10w66.txt AMEND TO STOCK OPTION AGREEMENT-LEHRER EXHIBIT 10.66 ORIOLE HOMES CORP. AMENDMENT TO STOCK OPTION AGREEMENTS This Amendment to Stock Option Agreements for Nonemployee Directors dated as of May 10, 2002 is between Oriole Homes Corp. (the "Company") and Paul R. Lehrer (the "Optionee"). RECITALS A. The Company and the Optionee are parties to the following Stock Option Agreements for Nonemployee Directors (each, an "Option Agreement"): a. Option Agreement with respect to an option to purchase 1,200 shares of the Company's Class B common stock, par value $.10 per share (the "Class B Common Stock") dated May 10, 2000; and b. Option Agreement with respect to an option to purchase 1,200 shares of Class B Common Stock dated May 10, 2001. B. The Company and the Optionee have agreed to amend certain provisions of each Option Agreement. NOW THEREFORE, in consideration of the premises and covenants and agreements herein contained, the parties agree as follows: 1. Section 2.1 of each Option Agreement is amended in its entirety to read as follows: "2.1 This option shall vest and become nonforfeitable on the first anniversary of the date of this Stock Option Agreement if the Eligible Director continues to serve as a Director after such date." 2. Section 4.1 of each Option Agreement is amended in its entirety to read as follows: "4.1 The within option may be exercised according to the following schedule: 4.1.1 Fifty percent (50%) of the option becomes exercisable on the first anniversary of the date of this Stock Option Agreement. 4.1.2 The remaining fifty percent (50%) of the option becomes exercisable on the second anniversary of the date of this Stock Option Agreement." 3. Except as provided in this Amendment, all of the terms of each Option Agreement remain in full force and effect. 4. This Amendment shall be deemed to be made under and shall be construed in accordance with the laws of the State of Florida. 5. This Amendment may be signed and executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one agreement. 6. This Amendment is binding on the Company's successors and assigns. The Company agrees to require any person who purchases substantially all of its assets, or is a successor in interest to the Company, to assume its obligations under this Amendment. IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its authorized officer and the Optionee has executed this Amendment as of the date first above written. ORIOLE HOMES CORP. By: ---------------------------------------- R.D. Levy, Chairman of the Board and Chief Executive Officer OPTIONEE: -------------------------------------------- Paul R. Lehrer -2- EX-10.67 8 g77890exv10w67.txt AMEND TO STOCK OPTION AGREEMENT-RICHARDS EXHIBIT 10.67 ORIOLE HOMES CORP. AMENDMENT TO STOCK OPTION AGREEMENTS This Amendment to Stock Option Agreements for Nonemployee Directors dated as of May 10, 2002 is between Oriole Homes Corp. (the "Company") and George R. Richards (the "Optionee"). RECITALS A. The Company and the Optionee are parties to the following Stock Option Agreements for Nonemployee Directors (each, an "Option Agreement"): a. Option Agreement with respect to an option to purchase 1,200 shares of the Company's Class B common stock, par value $.10 per share (the "Class B Common Stock") dated May 10, 2000; and b. Option Agreement with respect to an option to purchase 1,200 shares of Class B Common Stock dated May 10, 2001. B. The Company and the Optionee have agreed to amend certain provisions of each Option Agreement. NOW THEREFORE, in consideration of the premises and covenants and agreements herein contained, the parties agree as follows: 1. Section 2.1 of each Option Agreement is amended in its entirety to read as follows: "2.1 This option shall vest and become nonforfeitable on the first anniversary of the date of this Stock Option Agreement if the Eligible Director continues to serve as a Director after such date." 2. Section 4.1 of each Option Agreement is amended in its entirety to read as follows: "4.1 The within option may be exercised according to the following schedule: 4.1.1 Fifty percent (50%) of the option becomes exercisable on the first anniversary of the date of this Stock Option Agreement. 4.1.2 The remaining fifty percent (50%) of the option becomes exercisable on the second anniversary of the date of this Stock Option Agreement." 3. Except as provided in this Amendment, all of the terms of each Option Agreement remain in full force and effect. 4. This Amendment shall be deemed to be made under and shall be construed in accordance with the laws of the State of Florida. 5. This Amendment may be signed and executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one agreement. 6. This Amendment is binding on the Company's successors and assigns. The Company agrees to require any person who purchases substantially all of its assets, or is a successor in interest to the Company, to assume its obligations under this Amendment. IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its authorized officer and the Optionee has executed this Amendment as of the date first above written. ORIOLE HOMES CORP. By: ---------------------------------------- R.D. Levy, Chairman of the Board and Chief Executive Officer OPTIONEE: -------------------------------------------- George R. Richards -2- EX-10.68 9 g77890exv10w68.txt AMEND TO STOCK OPTION AGREEMENT-LEVENSON EXHIBIT 10.68 ORIOLE HOMES CORP. AMENDMENT TO STOCK OPTION AGREEMENT This Amendment to Stock Option Agreement for Nonemployee Directors dated as of May 10, 2002 is between Oriole Homes Corp. (the "Company") and Maurice E. Levenson (the "Optionee"). RECITALS A. The Company and the Optionee are parties to a Stock Option Agreement for Nonemployee Directors dated August 8, 2001 with respect to an option to purchase 1,200 shares of the Company's Class B common stock, par value $.10 per share (the "Class B Common Stock"). B. The Company and the Optionee have agreed to amend certain provisions of the Option Agreement. NOW THEREFORE, in consideration of the premises and covenants and agreements herein contained, the parties agree as follows: 1. Section 2.1 of the Option Agreement is amended in its entirety to read as follows: "2.1 This option shall vest and become nonforfeitable on the first anniversary of the date of this Stock Option Agreement if the Eligible Director continues to serve as a Director after such date." 2. Section 4.1 of the Option Agreement is amended in its entirety to read as follows: "4.1 The within option may be exercised according to the following schedule: 4.1.1 Fifty percent (50%) of the option becomes exercisable on the first anniversary of the date of this Stock Option Agreement. 4.1.2 The remaining fifty percent (50%) of the option becomes exercisable on the second anniversary of the date of this Stock Option Agreement." 3. Except as provided in this Amendment, all of the terms of the Option Agreement remain in full force and effect. 4. This Amendment shall be deemed to be made under and shall be construed in accordance with the laws of the State of Florida. 5. This Amendment may be signed and executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one agreement. 6. This Amendment is binding on the Company's successors and assigns. The Company agrees to require any person who purchases substantially all of its assets, or is a successor in interest to the Company, to assume its obligations under this Amendment. IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its authorized officer and the Optionee has executed this Amendment as of the date first above written. ORIOLE HOMES CORP. By: ---------------------------------------- R.D. Levy, Chairman of the Board and Chief Executive Officer OPTIONEE: -------------------------------------------- Maurice E. Levenson -2- -----END PRIVACY-ENHANCED MESSAGE-----