SCHEDULE 14A
(Rule 14a-101)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Section 240.14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
DEM, Inc.
(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] No fee required. 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:
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(1) and 0-11.
(1)Title of each class of securities to which transaction
applies:
(2)Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed
(4) Date Filed:
<PAGE>
DEM, INC.
The World Trade Center-Baltimore
28th Floor
401 East Pratt Street
Baltimore, Maryland 21202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
An annual meeting of stockholders of DEM, Inc. (the
"Company"), will be held at The Chapman Co., The World Trade
Center-Baltimore, 28th Floor, 401 East Pratt Street, Baltimore,
Maryland, on June 6, 1997, at 11:00 A.M. local time to act on the
following matters:
1. Election of directors to serve until
their successors are elected and qualify;
2. Ratification of the selection of Arthur
Andersen LLP as certified independent auditors for
the Company;
3. Such other business as may properly come
before the meeting.
Only stockholders of record at the close of business on May
5, 1997, are entitled to notice of and to vote at such meeting or
any adjournments thereof.
May 9, 1997 Earl U. Bravo, Sr.
Secretary
Please mark, sign and date the enclosed proxy and return it
promptly in the enclosed envelope. If you attend the meeting and
wish to vote in person, you may revoke your proxy.
<PAGE>
DEM, INC.
The World Trade Center-Baltimore
28th Floor
401 East Pratt Street
Baltimore, Maryland 21202
PROXY STATEMENT
Annual Meeting of Stockholders
June 6, 1997
The enclosed proxy is solicited by the Board of Directors of
DEM, Inc. (the "Company") for use at the annual meeting of
stockholders of the Company to be held at the offices of The
Chapman Co., The World Trade Center-Baltimore, 28th Floor, 401
East Pratt Street, Baltimore, Maryland, on June 6, 1997, at 11:00
A.M. local time. This Proxy Statement and form of Proxy were
first mailed to stockholders on May 9, 1997.
Proxies will be solicited by mail and may be solicited in
person or by telephone by directors, officers and employees of
the Company. Nominees will, upon request, be supplied with
additional proxy materials and will be reimbursed by the Company
for their reasonable expenses in sending these materials to their
principals. The cost of printing and mailing this notice and
proxy statement and proxy form and of soliciting proxies will be
borne by the Company.
Management knows of no business to be brought before the
meeting except as set forth in the notice of the meeting. If any
other matters should come before the meeting, the persons named
in the enclosed form of proxy intend to vote on such matters in
accordance with their best judgment.
A stockholder may revoke his proxy by notifying the Company
in writing prior to the meeting, by subsequently executing
another proxy or by attending the meeting and giving oral notice
of revocation to the Chairman of the meeting.
<PAGE>
Stockholders are urged to return their proxies promptly in
order to ensure action by a quorum and to avoid the expense of
additional solicitation.
The Company will furnish, without charge, a copy of the
annual report to any shareholder upon request. Any such request
should be directed to Lisa Fullagar, DEM, Inc., The World Trade
Center-Baltimore, 28th Floor, 401 East Pratt Street, Baltimore,
Maryland 21202, telephone (800) 752-1013.
NAME AND ADDRESS OF BENEFICIAL OWNER TOTAL SHARES %
Texaco - Harrison Capital, Inc. 101,225 13.0%
2000 Westchester Avenue
White Plains, NY 10650
Memphis Retirement System 212,236 27.3%
125 North Main Street, Room 368
Memphis, TN 38103-2017
Shelby County Retirement System 202,451 26.0%
160 North Mid-Atlantic Mall, Suite
950
Memphis, TN 38103
Potomac Electric Power Company 134,967 17.4%
1900 Pennsylvania Avenue, N.W.
Washington, DC 20068-0001
<PAGE>
1. ELECTION OF DIRECTORS
Five directors are to be elected at the meeting. The Board
of Directors has nominated the persons named below for election
as directors.
Nominees for Directors to serve until the 2000 Annual Meeting
(Class III)
Nathan A. Chapman, Jr. Ronald A. White
Nominees for Directors to serve until the 1999 Annual Meeting
(Class II)
Lottie L. Shackelford Robert L. Wallace
Nominees for Directors to serve until the 1998 Annual Meeting
(Class I)
James B. Lewis
Unless directed to the contrary, proxies will be voted for
the election of such nominees. Each nominee has consented to the
nomination and has agreed to serve if elected. If any of the
nominees should not be available for election, the persons named
as proxies may vote for other persons in their discretion. The
Board of Directors has no reason to believe that any of the
nominees will be unable or unwilling to serve if elected.
<PAGE>
The name and age, positions held with the Company and
principal occupation for the past five years of each nominee are
set forth below:
POSITION(S)
HELD WITH PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS REGISTRANT AGE DURING PAST 5 YEARS
Nominees for Directors to serve until the 2000 Annual Meeting
(Class III)
*Nathan A. Nominee 39 President, Chief Executive
Chapman, Jr. for Officer and Treasurer since
401 E. Pratt Director 1986 of The Chapman Co.,
St., 28th Flr and the Company's underwriter,
Baltimore, MD President and President and Chief
21202 Executive Officer of
Chapman Capital Management,
Inc., the Company's
advisor, since 1988.
President, Chairman of the
Board of Directors and
Director of The Chapman
Funds, Inc. (an open-end
investment company managed
by the Company's advisor).
Ronald A. White Nominee 47 President, Ronald A. White,
401 E. Pratt for P.C., a law firm, since
St., 28th Flr Director 1982. Director of The
Baltimore, MD Chapman Funds, Inc.
21202
Nominees for Directors to serve until the 1999 Annual Meeting
(Class II)
Lottie L. Nominee 56 Executive Vice President,
Shackelford for Global USA - since 1995,
401 E. Pratt Director City Director of the City
St., 28th Flr of Little Rock, Arkansas,
Baltimore, MD 1978 to 1995, the City
21202 Mayor of Little Rock,
Arkansas, 1987-1989; Vice
Chair, Democratic National
Committee, 1989, Co-Chair,
Democratic National
Committee, 1988. Director
of The Chapman Funds, Inc.
<PAGE>
Robert L. Nominee 40 President since 1993 of the
Wallace for BITH Group, Inc. Senior
401 E. Pratt Director Vice President of ECS
St., 28th Flr Technology Inc. from 1992
Baltimore, MD to 1993. Assistant Vice
21202 President Maryland National
Bank from 1990 to 1992.
Author "Black Wealth
Through Black
Entrepreneurship."
Nominees for Directors to serve until the 1998 Annual Meeting
(Class I)
James B. Lewis Nominee 49 City Administrator/Manager,
401 E. Pratt for City of Rio Rancho, New
St., 28th Flr Director Mexico since March 1996,
Baltimore, MD Chief Clerk - State
21202 Corporation Commission from
April 1995 to March 1996,
Chief of Staff, Office of
the Governor from Jan. 1991
to April 1995. New Mexico
State Treasurer, December
1985 to January 1991.
County Treasurer,
Bernadillo County 1982-
1985. Director of The
Chapman Funds, Inc.
* Directors deemed to be "interested persons" of the Company
for purposes of the Investment Company Act of 1940 are indicated
by an asterisk. In addition to the positions indicated with the
Company's advisor and underwriter, Mr. Chapman is a principal
stockholder of the Company's underwriter.
<PAGE>
OFFICERS
PRINCIPAL
NAME AND ADDRESS AGE OFFICE OCCUPATIONS
DURING PAST FIVE
YEARS
Earl U. Bravo, Sr. 49 Vice Chief Operating
401 E. Pratt St., 28th President and Officer of The
Floor Secretary Chapman Co. since
Baltimore, Maryland 1992. From 1990
21202 until 1992,
President of
Chapman Capital
Management, Inc.
M. Lynn Ballard 54 Treasurer Controller of
401 E. Pratt St., 28th The Chapman Co. and
Floor Treasurer of The
Baltimore, Maryland Chapman Funds,
21202 Inc. since 1988.
Bonnie Gillette 44 Assistant Secretary of The
401 E. Pratt St., 28th Secretary Chapman Co.,
Floor Chapman Capital
Baltimore, Maryland Management, Inc.
21202 and The Chapman
Funds, Inc. since
1988.
COMPENSATION TABLE
(1) (2) (3) (4) (5)
Pension or Total
Retirement Estimated Compensati
Aggregate Benefit Annual on from
Name of Person Compensati Accrued as Benefits Fund and
Position on From part of upon Fund
Fund Fund Retiremen Complex
Expenses t Paid to
Directors
Nathan A. Chapman,
Jr. -0- -0- -0- -0-
Director and
President
James B. Lewis
Director 3,000 -0- -0- 5,000
Lottie L.
Shackelford 2,000 -0- -0- 4,000
Director
Ronald A. White
Director 2,000 -0- -0- 2,000
Robert L. Wallace
Director $3,038 -0- -0- $3,038
<PAGE>
No officer of the Company receives any compensation from the
Company. The Board of Directors of the Company met three times
during the fiscal year ended December 31, 1996. Messrs. White
and Wallace and Ms. Shackelford each attended two meetings. The
Board of Directors has no committees.
Directors of the Company who are not officers receive from
the Company a fee of $1,000 for each Board of Directors meeting
attended and are reimbursed for all out-of-pocket expenses
relating to attendance at meetings.
No director or officer of the Company owns beneficially any
shares of the Company. All of the outstanding equity securities
of Chapman Capital Management, Inc., the Company's investment
advisor, are held by The Chapman Co., the Company's underwriter.
Mr. Chapman owns 92% of the outstanding equity securities of The
Chapman Co. on a fully diluted basis and has the right to cast
approximately 99% of the votes entitled to be cast by its
stockholders. The Chapman Co. repurchased 411 shares of The
Chapman Co. Preferred Stock-Series B from Mr. White for an
aggregate consideration of $144,000 in December 1996. Mr. White
no longer owns any securities of The Chapman Co. With the
exception of Mr. White, no director or nominee for election as a
director of the Company has entered into a transaction in the
stock of Chapman Capital Management, Inc. or The Chapman Co.
since at least January 1, 1996.
If a quorum is present, a plurality of the votes cast at the
meeting is required for election of a director. Abstentions and
broker non-votes will not constitute a vote "for" or "against"
any matter but will be counted toward a quorum.
The Board of Directors recommends a vote FOR election of
each of the nominees named above as a director of the
Corporation.
<PAGE>
2. SELECTION OF INDEPENDENT AUDITORS
Arthur Andersen LLP served as independent auditors of the
Company for its fiscal year ended December 31, 1996. Arthur
Andersen LLP have no direct or material indirect interest in the
Company, Chapman Capital Management, Inc. or The Chapman Co. At
a meeting held on January 31, 1997, a majority of the Company's
Directors who are not interested persons of the Company, with the
concurrence of a majority of the Board of Directors, selected
Arthur Andersen LLP as independent auditors of the Company for
the current fiscal year, subject to ratification by the
stockholders.
The Board of Directors of the Company has determined that
utilizing the services of Arthur Andersen LLP, who have
experience in auditing mutual funds, is in the best interests of
the Company.
Arthur Andersen LLP is not currently expected to have a
representative present at the meeting and, therefore, will not
make a statement or respond to questions at the meeting.
The affirmative vote of a majority of the shares voted at
the meeting, assuming a quorum is present, is required to ratify
the selection of auditors.
The Board of Directors recommends that the stockholders vote
"FOR" the ratification of the selection of Arthur Andersen LLP as
independent auditors of the Company.
ADDITIONAL INFORMATION
Chapman Capital Management, Inc., The World Trade Center-
Baltimore, 28th Floor, 401 East Pratt Street, Baltimore, MD 21202
acts as the investment advisor and administrator for the Company
pursuant to an advisory and administrative services agreement
(the "Advisory Agreement") dated November 30, 1995. Mr. Chapman
is Chairman of the Board and a director of the Advisor. The
Advisor is a wholly-owned subsidiary of The Chapman Co., the
Company's underwriter. Mr. Chapman owns approximately 92% of the
equity and has the right to cast approximately 99% of the votes
entitled to be cast by stockholders of The Chapman Co. The
Advisor recommends and implements portfolio transactions in
<PAGE>
accordance with the Company's investment objectives, policies and
limitations and subject to policies of the Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires that the Company's directors and executive
officers, and persons who own more than 10% of a registered class
of the Company's equity securities, file with the Securities and
Exchange Commission (the "Commission") initial reports of
ownership and reports of change in ownership of Common Stock of
the Company. The same persons are also required by Commission
regulation to furnish the Company with copies of all Section
16(a) forms that they file.
To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company, and written
representations that no other reports were required during the
fiscal year ended December 31, 1996, all Section 16(a) filing
requirements applicable to the Company's executive officers and
directors were complied with. With respect to greater than 10%
beneficial owners, the Company has not received copies of any
reports filed by such persons with the Commission and has
received no written representations from such persons.
<PAGE>
STOCKHOLDER PROPOSALS
All stockholder proposals intended to be presented at the
1998 Annual Meeting of Stockholders must be received by the
Company at the address set forth on the first page of this Proxy
Statement not later than January 9, 1998 for inclusion in the
Company's proxy statement and proxy relating to that meeting. It
is suggested that proposals be forwarded by certified mail,
return receipt requested.
May 9, 1997 /s/Earl U. Bravo, Sr.
Earl U. Bravo, Sr.
Secretary
<PAGE>
DEM, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Nathan A. Chapman, Jr. and Earl
U. Bravo, Sr., or either of them, the proxy or proxies of the
undersigned with full powers of substitution, to vote all shares
of Common Stock of DEM, Inc. held of record by the undersigned
at the close of business on May 5, 1997, at the Annual Meeting
of Stockholders of the Company to be held on Friday, June 6,
1997 at 11:00 a.m., local time and at any adjournment or
adjournments thereof, upon the matters set forth herein.
PLEASE MARK YOUR CHOICE IN BLUE OR BLACK INK, PLEASE SIGN, DATE
AND RETURN THIS PROXY PROMPTLY USING THE ACCOMPANYING ENVELOPE
Please If properly executed, the shares
mark represented by this proxy will be voted in
votes as the manner directed herein by the
in undersigned stockholder, or to the extent
this directions are not given, such shares will
example be voted FOR each of the nominees and each
other proposal.
The Board of Directors recommends a vote "FOR" the nominees
listed below and a vote "FOR" Proposal 2 and 3.
1. ELECTION OF DIRECTORS.
Nominees: Class III: Nathan A. Chapman, Jr.
and Ronald
A. White
Class II: Lottie L. Shackelford and
Robert
Wallace
Class I: James B. Lewis
FOR ALL NOMINEES LISTED WITHHOLD AUTHORITY FOR
(EXCEPT AS INDICATED) ALL NOMINEES LISTED
To withhold authority to vote for any nominee, write that
nominee's name in the space provided.
For Against Abstain
2 RATIFICATION OF APPOINTMENT
. OF ARTHUR ANDERSEN LLP AS
INDEPENDENT AUDITORS.
3 IN THEIR DISCRETION, THE
. PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY
ADJOURNMENT THEREOF.
MARK HERE FOR
ADDRESS
CHANGE AND NOTE
SUCH CHANGE
AT LEFT
Please sign. Persons acting in a fiduciary capacity should so
indicate. PLEASE NOTE any change of address and supply any
missing Zip Code number.
Signature: Date:
Signature: Date:
