<PAGE>
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:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(c)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
OCWEN ASSET INVESTMENT CORP.
------------------------------------------------
(Name of Registrant as Specified in Its charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(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 in 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:
[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3)Filing Party:
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(4) Date Filed:
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<PAGE>
[OAIC LETTERHEAD APPEARS HERE]
April 14, 1998
Dear Shareholder:
On behalf of the Board of Directors I cordially invite you to attend the
Annual Meeting of Shareholders of Ocwen Asset Investment Corp., which will be
held at the first floor offices of the Company located at 1675 Palm Beach
Lakes Boulevard, West Palm Beach, Florida 33401, on Thursday, May 14, 1998, at
9:00 a.m. Eastern Time. The matters to be considered by shareholders at the
Annual Meeting are described in detail in the accompanying materials.
IT IS VERY IMPORTANT THAT YOU BE REPRESENTED AT THE ANNUAL MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU OWN OR WHETHER YOU ARE ABLE TO ATTEND
THE ANNUAL MEETING IN PERSON. Let me urge you to mark, sign and date your
proxy card today and to return it in the envelope provided, even if you plan
to attend the Annual Meeting. This will not prevent you from voting in person,
but will ensure that your vote is counted if you are unable to attend.
Your continued support of, and interest in, Ocwen Asset Investment Corp. are
sincerely appreciated.
Sincerely,
William C. Erbey
Chairman and Chief Executive Officer
<PAGE>
OCWEN ASSET INVESTMENT CORP.
1675 PALM BEACH LAKES BOULEVARD
WEST PALM BEACH, FLORIDA 33401
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 14, 1998
----------------
The 1998 annual meeting of shareholders (the "Annual Meeting") of Ocwen
Asset Investment Corp. (the "Company") will be held at the first floor offices
of the Company located at 1675 Palm Beach Lakes Boulevard, West Palm Beach,
Florida 33401, on Thursday, May 14, 1998, at 9:00 a.m., Eastern Time, for the
following purposes:
1. To elect five directors to serve on the Board of Directors for a one-
year term and until their successors have been duly elected and qualified;
2. To ratify the appointment of Price Waterhouse LLP as independent
auditors for the fiscal year ended December 31, 1998;
3. To consider and vote upon a proposal to amend Article VIII of the
Company's Articles of Incorporation (the "Articles") to provide, in effect,
that nothing contained therein will prohibit the settlement of any
transaction entered into through the facilities of any national securities
exchange registered under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or on the national market system of a national
securities association registered under the Exchange Act; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only shareholders of the Company of record as of the close of business on
March 15, 1998 will be entitled to notice of and to vote at the Annual Meeting
and any adjournments thereof.
Further information regarding the Annual Meeting, the nominees for election
as directors to the Board of Directors, the accountants, and the proposed
amendment to the Articles is contained in the enclosed Proxy Statement.
By Order Of The Board Of Directors
John R. Erbey,
Secretary
West Palm Beach, Florida
April 14, 1998
IMPORTANT
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. IF YOU ATTEND
THE ANNUAL MEETING, YOU MAY VOTE IN PERSON EVEN IF YOU ALREADY HAVE RETURNED A
PROXY.
<PAGE>
OCWEN ASSET INVESTMENT CORP.
----------------
PROXY STATEMENT
----------------
GENERAL INFORMATION
This Proxy Statement and the accompanying Form of Proxy and Notice of Annual
Meeting are provided in connection with the solicitation of proxies by the
Board of Directors of Ocwen Asset Investment Corp., a Virginia corporation
(the "Company"), for use at the annual meeting of shareholders to be held at
the first floor offices of the Company located at 1675 Palm Beach Lakes
Boulevard, West Palm Beach, Florida 33401, on Thursday, May 14, 1998, at 9:00
a.m., Eastern Time (the "Annual Meeting") and any adjournments thereof. The
mailing address of the principal executive offices of the Company is 1675 Palm
Beach Lakes Boulevard, West Palm Beach, Florida 33401. This Proxy Statement
and the Proxy Form and Notice of Annual Meeting, all enclosed herewith, are
first being mailed to the shareholders of the Company on or about April 14,
1998.
WHO IS ENTITLED TO VOTE?
Each outstanding share of the Company's Common Stock entitles its holder to
one vote. Only shareholders of record at the close of business on March 15,
1998 (the "Shareholders"), will be entitled to notice of, and to vote at, the
Annual Meeting or any adjournments thereof.
HOW DO I VOTE?
If you complete and properly sign the accompanying Proxy Card, it will be
voted as you specify. If you are the shareholder of record and do not specify,
it will be voted for the election of the nominees named in this proxy
statement as directors, for the ratification of the appointment of Price
Waterhouse LLP as independent auditors for the fiscal year ended December 31,
1998, and for the proposed amendment to the Company's Articles of
Incorporation (the "Articles").
You may revoke the proxy either by delivering written notice of such
revocation to the Secretary of the Company before the Annual Meeting, by
submitting a properly executed proxy bearing a later date or by attending the
Annual Meeting and voting in person.
Please note that if you hold your Shares in "street name" (that is, through
a broker or intermediary) you may vote and revoke a previous vote only by
following the procedures established by the record holder or its agent.
WHAT VOTE IS NEEDED TO APPROVE EACH ITEM?
With regard to the election of directors, Shareholders may vote in favor of
the nominees or withhold their votes as to the nominees. If a quorum is
present, then the nominees receiving a plurality of the votes cast at the
Annual Meeting will be elected directors. With regard to the proposals to
amend the Articles and to ratify the appointment of the auditors, Shareholders
may vote in favor of such proposals, against such proposals or abstain from
voting. Approval of the amendment to the Articles requires the affirmative
vote of a majority of the shares entitled to vote on the proposal.
Ratification of the appointment of the auditors requires the affirmation vote
of a majority of the shares cast on such matter.
WHAT IS THE EFFECT OF AN ABSTENTION?
You may not abstain from electing a nominee as a director, but must vote for
the election or withhold authority. Abstentions will not be counted "for" or
"against" the proposal to amend the Articles or the ratification of the
auditors, but will be counted for the purpose of determining the existence of
a quorum.
1
<PAGE>
WHAT IF I HOLD MY SHARES IN "STREET NAME" AND DO NOT SPECIFY HOW MY SHARES
SHOULD BE VOTED?
Brokers holding shares for beneficial owners must vote those shares
according to the specific instructions they receive from the owners. However,
brokers or nominees holding shares for a beneficial owner may not have
discretionary voting power and may not have received voting instructions from
the beneficial owner of the shares. In such cases, absent specific voting
instructions from the beneficial owner, the broker may not vote on these
proposals. This results in what is known as a "broker non-vote." A "broker
non-vote" has the effect of a negative vote when a majority of the shares
outstanding and entitled to vote is required for approval of a proposal, and
"broker non-votes" will not be counted as votes cast but will be counted for
the purpose of determining the existence of a quorum. As a result, broker non-
votes will have no effect on the proposal to ratify the appointment of the
auditors but will, in effect, count as negative votes with respect to the
proposal to amend the Articles. Because the election of directors is a routine
matter for which specific instructions from beneficial owners will not be
required, no "broker non-votes" will arise in the context of the proposal
relating to the election of directors. Votes "withheld" from a director-
nominee also have the effect of a negative vote since a plurality of the
shares cast at the Annual Meeting is required for the election of each
director.
WHAT CONSTITUTES A QUORUM?
A majority of the votes entitled to be cast, represented in person or by
proxy, will constitute a quorum for the transaction of business. At the close
of business on March 15, 1998, the Company had outstanding 18,965,000 shares
of Common Stock.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR
---
DIRECTOR, FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF THE COMPANY'S AUDITORS
---
AND FOR THE PROPOSAL TO AMEND THE ARTICLES.
---
ELECTION OF DIRECTORS
WHO ARE THE NOMINEES FOR DIRECTORS?
The Articles provide for a Board of Directors of not less than one nor more
than nine members, unless otherwise determined by the affirmative vote of at
least 80% of the Board of Directors. Directors are elected by the shareholders
of the Company at each annual meeting. The Board of Directors has set at five
the number of directors constituting the current Board of Directors to be
elected at the Annual Meeting.
The Company has no Nominating Committee of its Board of Directors, but
instead, the entire Board of Directors acts in such capacity. The Board of
Directors has nominated the present directors, William C. Erbey, Christine A.
Reich, Timothy J. Riddiough and Peter M. Small, and a new nominee, , to
serve as directors for a one-year term expiring at the Company's annual
meeting in 1999. Current director Robert F. Pugliese has requested that he not
be nominated for re-election as a director for personal reasons.
If any nominee becomes unavailable or unwilling to serve the Company as a
director for any reason, the persons named as proxies in the Form of Proxy are
expected to consult with management of the Company in voting the shares
represented by them. The Board of Directors has no reason to doubt the
availability of any nominee, and each has indicated his willingness to serve
as a director of the Company if elected by the Shareholders at the Annual
Meeting.
2
<PAGE>
NOMINEES FOR ELECTION AS DIRECTOR
- -------------------------------------------------------------------------------
WILLIAM C. ERBEY, age 48, has served since May 1997 as Chairman, Chief
Executive Officer and Treasurer of the Company. Mr. Erbey has also served as
President and Chief Executive Officer of Ocwen Financial Corporation ("OFC")
since January 1988, and became Chairman of the Board of OFC in September 1996.
Mr. Erbey has served as Chairman of the Board of Ocwen Federal Bank FSB, a
subsidiary of OFC (the "Bank"), since February 1988, and as President and
Chief Executive Officer of the Bank since June 1990 and serves as a director
and/or officer of many subsidiaries of the Company and OFC. From 1983 to 1995,
Mr. Erbey served as a Managing General Partner of The Oxford Financial Group
("Oxford"), a private investment company, in charge of merchant banking. From
1975 to 1983, he served at General Electric Credit Corporation ("GECC") in
various capacities, most recently as President and Chief Operating Officer of
General Electric Mortgage Insurance Corporation, a subsidiary of General
Electric Company engaged in the mortgage insurance business. Mr. Erbey also
served as program general manager of GECC's Commercial Financial Services
Department and its subsidiary, Acquisition Funding Corporation.
COMMITTEES: Executive.
- -------------------------------------------------------------------------------
CHRISTINE A. REICH, age 36, has served since January 1997 as a director and
President of the Company. Ms. Reich has also served as a Managing Director of
OFC since June 1994 and serves as an officer and/or director of many
subsidiaries of the Company and OFC. Ms. Reich served as Chief Financial
Officer of the Company from January until June 1997, as Chief Financial
Officer of OFC from January 1990 to May 1997, as Senior Vice President of OFC
from January 1993 until June 1994 and as Vice President of OFC from January
1990 until January 1993. Ms. Reich has served as a director of the Bank since
1993, a Managing Director of the Bank since June 1994 and Chief Financial
Officer of the Bank from May 1990 to May 1997. Ms. Reich served as Senior Vice
President of the Bank from May 1993 to June 1994 and Vice President of the
Bank from January 1990 to May 1993. From 1987 to 1990, Ms. Reich served as an
officer of another subsidiary of OFC. Prior to 1987, Ms. Reich was employed by
KPMG Peat Marwick LLP, most recently in the position of Manager.
COMMITTEES: Executive.
- -------------------------------------------------------------------------------
TIMOTHY J. RIDDIOUGH, age 40, holds the Edward H. and Joyce Linde Career
Development Chair in Real Estate Finance at the Massachusetts Institute of
Technology Center for Real Estate, where he has taught since 1994. From 1991
to 1994, Mr. Riddiough was an Assistant Professor in the Department of Finance
at the University of Cincinnati. He has a background in the mortgage insurance
business, having worked at Foremost Guaranty Corporation and Verex Assurance
Corporation from 1984 to 1988. Mr. Riddiough's specialties include commercial
mortgage and CMBS pricing as well as mortgage disposition/workout strategy.
Mr. Riddiough is widely published, with other areas of interest that include
capitalization of REITs, option pricing and real estate valuation. He serves
on the editorial boards for the two influential academic journals in the real
estate/urban economics area and the advisory board of the Real Estate Research
Institute. Mr. Riddiough has recently consulted with several large pension
fund advisors/consultants on CMBS pricing and investment strategy.
COMMITTEES: Audit, Compensation.
- -------------------------------------------------------------------------------
PETER M. SMALL, age 55, served as President and Chief Executive Officer of
Spaulding and Slye Company, a commercial real estate company, for fifteen
years and served as Chairman of its Board of directors from 1992 to 1996.
While he was president of Spaulding and Slye Company, Mr. Small directed the
development of over 100 commercial projects and later repositioned the company
from a development company to a service company providing consulting, asset
management and real estate services to major corporations and financial
3
<PAGE>
institutions. Currently, Mr. Small manages a property portfolio, advises and
invests in young companies and consults and speaks about planning and managing
real estate organizations in changing environments. He serves as a director of
Bariston Partners, LLC, Benchmark Assisted Living, LLC, Spaulding and Slye
Properties Company and the United Way of Massachusetts Bay. Mr. Small also
serves as a Trustee of Bowdoin College.
COMMITTEES: Audit, Compensation.
- -------------------------------------------------------------------------------
[NEW DIRECTOR], age , is not currently a director. [Insert bio].
[NEW DIRECTOR WILL SERVE ON THE AUDIT AND COMPENSATION COMMITTEES.]
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR
DIRECTOR.
CURRENT DIRECTOR (TERM EXPIRING 1998)
ROBERT F. PUGLIESE, age 65, has been special counsel at the law firm of
Eckert Seamans Cherin & Mellott, LLC since 1993. Previously he served as
Executive Vice President, Legal and Corporate Affairs, for Westinghouse
Electric Corporation where he was responsible for legal and environmental
affairs, government and public relations, employee communications and
corporate insurance. In addition, Mr. Pugliese served as a director of several
Westinghouse subsidiaries, including Westinghouse Credit Corporation. From
1970-1976, he served as General Tax Counsel for Westinghouse Electric
Corporation. Mr. Pugliese has an extensive background in business and legal
matters involving the manufacturing, energy, services and broadcast sectors,
as well as the environment and international areas. Mr. Pugliese is a director
of International Technology Corporation. He has lectured on business ethics at
the University of Pittsburgh, Loyola University in Baltimore and at the
University of Scranton, where he served as chairman of the Board of Trustees.
RATIFICATION OF INDEPENDENT AUDITORS
Price Waterhouse LLP has served as independent auditors for the Company and
its subsidiaries for the year ended December 31, 1997. The Audit Committee of
the Board of Directors has appointed Price Waterhouse LLP, independent public
accountants, to audit the consolidated financial statements of the Company for
the fiscal year ending December 31, 1998 and recommends that the stockholders
vote in favor of ratification of such appointment. In the event of a negative
vote on such ratification, the Board of Directors will reconsider its
selection.
A representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting, will have the opportunity to make a statement if he desires to
do so, and is expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF PRICE
WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
4
<PAGE>
AMENDMENT TO ARTICLE VIII OF THE COMPANY'S ARTICLES
The Board of Directors has approved and recommends to the Shareholders that
they adopt amendments to Article VIII of the Articles. Article VIII of the
Articles currently contains provisions (the "Share Transfer Restrictions")
that restrict the transfer of shares of the Company's capital stock if,
following such transfer, any person would own at any time, directly or
indirectly, in the aggregate more than 9.9% of the outstanding shares of
capital stock of the Company (including any shares deemed to be constructively
owned by such persons under applicable provisions of the Internal Revenue
Code). The Share Transfer Restrictions, which are similar to provisions found
in the charter documents of many REITs, are designed to help the Company
monitor compliance with certain REIT tax law requirements, which provide that
not more than 50% of the Company's outstanding capital stock can be owned,
directly or indirectly, by five or fewer persons.
The Board of Directors has approved and recommends to the Shareholders that
they approve and adopt an amendment to the Charter that would add a new
Paragraph 8 to Article VIII. B. of the Articles of Incorporation. The proposed
amendment provides in its entirety as follows:
(a) Article VIII. B. of the Articles of Incorporation is hereby amended
by adding the following Paragraph 8, providing in its entirety as follows:
8. Securities Exchange Transactions. Nothing in this Article VIII or
these Articles of Incorporation shall prohibit the settlement of any
transaction entered into through the facilities of any national
securities exchange registered under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or of the national market system
of a national securities association registered under the Exchange Act.
The immediately preceding sentence shall not limit the authority of the
Board of Directors to take any and all actions it deems necessary or
advisable to protect the Corporation and the interests of its
shareholders in preserving the Corporation's status as a REIT, so long
as such actions do not prohibit the settlement of any transactions
entered into through the facilities of any national securities exchange
registered under the Exchange Act or of the national market system of a
national securities association registered under the Exchange Act.
(b) The phrase "Subject to Section B.8." is hereby added to the beginning
of the first sentence in Paragraph C of Article VIII of the Articles of
Incorporation before the phrase "Nothing contained in this Article VIII ".
The proposed Paragraph 8 clarifies that nothing in the Articles would
prohibit the settlement of any transaction entered into through the facilities
of any national securities exchange registered under the Exchange Act or of
the national market system of a national securities association registered
under the Exchange Act, while maintaining the authority of the Board of
Directors of the Company to take all action necessary to maintain the
Company's status as a REIT for federal income tax purposes.
Through [March 31], 1998, the Company's Common Stock was traded on the
Nasdaq Stock Market. Since such date, the Company's Common Stock has been
traded on the New York Stock Exchange ("NYSE"). The Board of Directors
believes it is important to assure the investment community and the NYSE that
the Share Transfer Restrictions in the Articles, which are designed to protect
the Company's status as a REIT, do not prohibit the settlement of any
transactions through the facilities of such Exchange. Furthermore, the Company
has been advised that the NYSE currently requires a REIT having share transfer
restrictions to clarify that such restrictions will not prohibit settlement of
any transactions entered into through the NYSE. Adoption of the proposed
amendment to the Articles would place the Company in compliance with the
listing requirements of the NYSE regarding REIT share transfer restrictions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO
---
THE ARTICLES.
5
<PAGE>
OWNERSHIP OF THE COMPANY'S COMMON STOCK
WHO ARE THE LARGEST OWNERS OF THE COMMON STOCK?
The following table sets forth information, as of March 15, 1998, regarding
each person known to the Company to be the beneficial owner of more than five
percent of its Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------------------------ -------------------- ----------
<S> <C> <C>
Ocwen Financial Corporation .................. 1,787,700(1) 9.43%(2)
1675 Palm Beach Lakes Blvd.
West Palm Beach, FL 33401
The Capital Group Companies, Inc.............. 1,264,500(3) 6.67%(3)
333 South Hope Street
Los Angeles, CA 90071
J.P. Morgan & Co. Incorporated................ 1,017,300(4) 5.30%(3)
60 Wall Street
New York, NY 10260
</TABLE>
- --------
(1) Based on information contained in Schedule 13D filed with the Securities
and Exchange Commission (the "SEC") filed by OFC, Ocwen Capital
Corporation (the "Manager"), Investors Mortgage Insurance Holding Company
("IMIHC") and William C. Erbey on March 4, 1998. Includes: (a) 113,300
shares held directly by William C. Erbey and 134,400 shares held by a
partnership (the "Erbey Partnership") pursuant to which William C. Erbey
and his wife share voting and investment power; and (b) 1,540,000 shares
owned directly by IMIHC and as to which OFC and William C. Erbey share
voting and investment power. Mr. Erbey has disclaimed beneficial ownership
of the 1,540,000 shares owned of record by IMIHC and the 134,400 shares
owned of record by the Erbey Partnership.
(2) Based on shares of Common Stock outstanding on March 15, 1998.
(3) Based on information contained in Schedule 13D filed with the SEC as of
December 31, 1998, by The Capital Group Companies, Inc. ("Capital Group"),
the parent of a group of investment management companies, and Capital
Guardian Trust Company ("Capital Group Trust"), one of those investment
management companies. Includes: 1,227,500 shares owned by Capital Group
Trust and 37,000 shares owned by direct or indirect subsidiaries of
Capital Group ("Capital Subsidiaries"). All such shares are owned by
accounts under the discretionary investment management of Capital Group
Trust or the Subsidiaries. Capital Group has no investment or voting power
over any of such securities.
(4) Based on information contained in Schedule 13G filed with the SEC as of
December 31, 1997, by J.P. Morgan & Co. Incorporated, a parent holding
company of subsidiaries, including Morgan Guaranty Trust Company of New
York, J.P. Morgan Investment Management, Inc. and J.P. Morgan Florida
Federal Savings Bank. Includes: 887,250 shares as to which sole voting
power is claimed, 977,700 shares as to which sole disposal power is
claimed and 39,600 shares as to which shared voting and disposal power is
claimed.
6
<PAGE>
HOW MUCH STOCK DO THE COMPANY'S DIRECTORS AND OFFICERS OWN?
The following table sets forth the beneficial ownership of the Company's
Common Stock, as of March 15, 1998, by (i) each director and director nominee
of the Company, (ii) each executive officer of the Company and (iii) all
directors and executive officers as a group. Unless otherwise indicated, such
shares of Common Stock are owned directly and the indicated person has sole
voting and investment power.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME BENEFICIAL OWNERSHIP CLASS(1)
- ---- -------------------- ----------
<S> <C> <C>
William C. Erbey.............................. 1,787,700(2) 9.43%
Robert F. Pugliese............................ 3,000 *
Christine A. Reich............................ 13,500(3) *
Timothy J. Riddiough.......................... 0 *
Peter M. Small................................ 30,000 *
John R. Barnes................................ 0 *
Joseph A. Dlutowski........................... 0 *
John R. Erbey................................. 2,000 *
Jordan C. Paul................................ 5,000 *
Mark S. Zeidman............................... 0 *
[ ]...................................... [ ] [ ]
All directors and officers as a group (10 per-
sons)........................................ 1,840,800 9.71%
</TABLE>
- --------
*Represents less than 1% of the outstanding Common Stock.
(1) Based on shares of Common Stock outstanding on March 15, 1998.
(2) Includes: (a) 113,300 shares held directly by William C. Erbey and 134,400
shares held by the Erbey Partnership pursuant to which William C. Erbey
and his wife share voting and investment power; and (b) 1,540,000 shares
owned directly by IMIHC and as to which William C. Erbey shares voting and
investment power. Mr. Erbey has disclaimed beneficial ownership of the
1,540,000 shares owned of record by IMIHC and the 134,400 shares owned of
record by the Erbey Partnership.
(3) These shares are held by CPR Family Limited Partnership pursuant to which
Christine A. Reich and her husband share voting and investment power. Ms.
Reich has disclaimed beneficial ownership of such shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities laws, the Company's directors and executive
officers, and any persons beneficially owning more than ten percent of a
registered class of the Company's equity securities, are required to report
their ownership of the Common Stock and any changes in that ownership to the
SEC. These persons are also required to furnish the Company with copies of
these reports. Specific due dates for these reports have been established, and
the Company is required to report in the Proxy Statement any failure to timely
file such reports by those due dates during the 1997 fiscal year.
Based solely upon its review of the reports furnished to the Company or
written representations from the Company's directors and executive officers
that such reports were not required from those persons, the Company believes
that all of these filing requirements were satisfied by the Company's
directors and executive officers during 1997, except that Mark S. Zeidman
filed a late Form 3 to report his beneficial ownership of zero shares of stock
in the Company at the time he became an officer of the Company.
7
<PAGE>
MANAGEMENT OF THE COMPANY
WHO ARE THE OFFICERS OF THE COMPANY?
The executive officers of the Company, their ages and their positions are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD
- ---- --- ----------------
<S> <C> <C>
John R. Barnes............ 55 Senior Vice President
Joseph A. Dlutowski....... 33 Senior Vice President
John R. Erbey*............ 56 Managing Director and Secretary
William C. Erbey*......... 48 Chief Executive Officer
Jordan C. Paul............ 36 Senior Vice President
Christine A. Reich........ 36 President
Mark S. Zeidman........... 46 Senior Vice President and Chief Financial Officer
</TABLE>
- --------
* John R. Erbey and William C. Erbey are brothers.
The executive officers serve at the discretion of the Board of Directors.
Biographical information for the last five years about Mr. William C. Erbey
and Ms. Christine Reich is provided above. Biographical information for the
last five years about Mr. John R. Erbey and Messrs. Barnes, Dlutowski, Paul
and Zeidman is set forth below.
Mr. Barnes has served since May 1997 as Senior Vice President of the
Company. Mr. Barnes has also served as Senior Vice President of OFC and the
Bank since May 1994 and served as Vice President of the same from October 1989
to May 1994 and serves as an officer and/or director of many subsidiaries of
the Company and OFC. Mr. Barnes was a Tax Partner in the firm of Deloitte
Haskins & Sells from 1986 to 1989 and in the firm of Arthur Young & Co. from
1979 to 1986. Mr. Barnes was the Partner in Charge of the Cleveland Office Tax
Department of Arthur Young & Co. from 1979 to 1984.
Mr. Dlutowski has served since May 1997 as Senior Vice President of the
Company. Mr. Dlutowski has also served as Senior Vice President of OFC and the
Bank since March 1997 and serves as an officer and/or director of many
subsidiaries of the Company and OFC. Mr. Dlutowski joined the Bank in October
1992 and served as a Vice President from May 1993 until March 1997. From 1989
to 1991, Mr. Dlutowski was associated with the law firm of Baker and
Hostetler.
Mr. John R. Erbey has served as a Managing Director and Secretary of OAIC
since May 1997. Mr. Erbey has also served as a Managing Director of OFC since
January 1993 and as Secretary of OFC since June 1989. Mr. Erbey serves as an
officer and/or director of many subsidiaries of the Company and OFC. He served
as Senior Vice President of OFC from June 1989 until January 1993. Mr. Erbey
has served as a director of the Bank since 1990, as a Managing Director of the
Bank since May 1993 and as Secretary of the Bank since July 1989. Previously,
he served as Senior Vice President of the Bank from June 1989 until May 1993.
From 1971 to 1989, Mr. Erbey was a member of the Law Department of
Westinghouse Electric Corporation and held various management positions,
including Associate General Counsel and Assistant Secretary from 1984 to 1989.
Previously, he held the positions of Assistant General Counsel of the
Industries and International Group and Assistant General Counsel of the Power
Systems Group of Westinghouse.
Mr. Paul has served as a Senior Vice President of the Company since May
1997. Mr. Paul has also served as Senior Vice President of the Bank since
March 1996 and Vice President of the same from February 1994 to March 1996.
Mr. Paul serves as an officer of a number of subsidiaries of the Company and
OFC. Mr. Paul joined the Bank in September 1993 establishing its commercial
loan acquisition and asset management divisions. From 1990 to 1993 Mr. Paul
was an attorney in the real estate department of the Philadelphia law firm of
Wolf, Block, Schorr and Solis-Cohen. From 1983 to 1987 Mr. Paul served in a
variety of positions with The Travelers Insurance Company in their Real Estate
Investment Department.
8
<PAGE>
Mr. Zeidman has served as Senior Vice President and Chief Financial Officer
of the Company and OFC since June 1997. He has also served as Senior Vice
President and Chief Financial Officer of OFC and the Bank since May 1997, and
he serves as an officer of many subsidiaries of the Company and OFC. From 1986
until May 1997, Mr. Zeidman was employed by Nomura Securities International,
Inc., most recently as Managing Director. Prior to 1986, Mr. Zeidman held
positions with Shearson Lehman Brothers and Coopers & Lybrand. Mr. Zeidman is
a Certified Public Accountant.
HOW OFTEN DID THE BOARD MEET IN 1997?
The Board of Directors held five meetings during 1997. All directors
attended at least 75% of the board meetings.
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?
The Company presently has an Audit Committee, Compensation Committee and an
Executive Committee of its Board of Directors. The Company has no standing
Nominating Committee of the Board of Directors, with the entire Board of
Directors acting in such capacity. The Company may, from time to time, form
other committees as circumstances warrant. Such committees have authority and
responsibility as delegated by the Board of Directors.
Audit Committee. The Board of Directors has established an Audit Committee
which currently consists of the two Independent Directors, Messrs. Riddiough and
Small. The Audit Committee makes recommendations concerning the engagement of
independent public accountants, reviews with the independent public accountants
the plans and results of the audit engagement, approves professional services
provided by the independent public accountants, reviews the independence of the
independent public accountants, considers the range of audit and non-audit fees
and reviews the adequacy of the Company's internal accounting controls. The
Audit Committee did not meet in 1997.
Compensation Committee. On March 13, 1998, the Board of Directors
established a Compensation Committee, consisting of two Independent Directors,
Messrs. Riddiough and Small. The Compensation Committee will establish and
administer compensation policies, determine awards of restricted stock and
grants of stock options under the Company's stock plans, monitor compensation
payable to the Manager under the Management Agreement and approve all other
compensation related matters of the Company as it determines necessary and
appropriate.
Executive Committee. The Board of Directors has established an Executive
Committee that currently consists of two Directors, Mr. W. C. Erbey and Ms.
Reich. The Executive Committee meets to consider matters delegated to it by
the Board of Directors and to make recommendations to the Board of Directors
regarding such matters. The Executive Committee acted by unanimous consent in
lieu of a meeting ten times during 1997.
COMPENSATION OF DIRECTORS
The Company pays the Independent Directors an annual fee of $20,000, plus an
additional fee of $1,000 for each additional meeting of the Board of Directors
attended in person after the first four meetings. In addition, an annual fee
of $2,000 is paid to the chair of any committee of the Board. The Company
currently pays no cash compensation to its directors who are not Independent
Directors. The Company reimburses all directors for their out-of-pocket
expenses in connection with their service on the Board of Directors.
IS THE COMPANY REQUIRED TO HAVE INDEPENDENT DIRECTORS?
Yes. The Articles require that a majority of the Company's directors must be
"Independent Directors," which means that, in the last two years, such
directors have not (i) owned an interest in the Manager or its affiliates,
(ii) been employed by the Manager or its affiliates, (iii) been an officer or
director of the Manager or
9
<PAGE>
its affiliates, (iv) performed services for the Manager or its affiliates, or
(v) had any material business or professional relationship with the Manager or
any of its affiliates. There are presently five directors, including three
Independent Directors. Mr. , if elected, will be an Independent Director.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Manager, subject to the supervision of the Board of Directors of the
Company, manages the Company pursuant to a management agreement. The
management agreement provides for an annual base management fee of 1% per
annum, calculated and paid quarterly based upon the Average Invested Assets of
the Company for such quarter. "Average Invested Assets" means the average of
the aggregate book value of the assets of the Company, including the assets of
all of its direct and indirect subsidiaries, before reserves for depreciation,
bad debts or other similar noncash items. Average Invested Assets is computed
by taking the daily average of such values during such period. After May 19,
1998, the Board of Directors is authorized to adjust the base management fee
if necessary to align the fee more closely with the actual costs of management
services.
The Manager also is entitled to receive incentive compensation for each
fiscal quarter in an amount equal to the product of (A) 25% of the dollar
amount by which (1)(a) Funds from Operations (before the incentive fee) of the
Company per share of Common Stock (based on the weighted average number of
shares outstanding) plus (b) gains (or minus losses) per share of Common Stock
(based on the weighted average number of shares outstanding) from debt
restructuring and sales of property, exceed (2) an amount equal to (a) the
weighted average of the price per share at the initial offering and the prices
per share at any secondary offerings by the Company multiplied by (b) the ten-
year treasury rate plus five percent per annum multiplied by (B) the weighted
average number of shares of Common Stock outstanding during such period.
"Funds from Operations" as defined by the National Association of Real Estate
Investment Trusts ("NAREIT") means net income (computed in accordance with
GAAP) excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation and amortization on real estate assets, and after
adjustments for unconsolidated partnerships and joint ventures. Funds from
Operations does not represent cash generated from operating activities in
accordance with GAAP and should not be considered as an alternative to net
income as an indication of the Company's performance or to cash flows as a
measure of liquidity or ability to make distributions.
The ability of the Company to generate Funds from Operations in excess of
the Ten-Year U.S. Treasury Rate, and thus, of the Manager to earn the
incentive compensation described in the preceding paragraph, is dependent upon
the level and volatility of interest rates, the Company's ability to react to
changes in interest rates and to utilize successfully the operating strategies
described herein, and other factors, many of which are not within the
Company's control.
Because the Manager's employees will perform certain due diligence tasks
that purchasers of real estate (including managers of REITs) typically hire
outside consultants to perform, the Manager will be reimbursed for (or charge
the Company directly for) the Manager's out-of-pocket costs in performing such
due diligence on assets purchased or considered for purchase by the Company.
Moreover, the Manager will track the time its employees spend in performing
such due diligence tasks and will be entitled to reimbursement for the
allocated portion of the salary and benefits of such employees.
For the year ended 1997, the Company paid the Manager $1,787,981 in base
management fees and no incentive compensation. In addition, for the year ended
1997, the Manager was reimbursed $648,088 for out-of-pocket costs and salary
allocations for due diligence tasks.
In addition to being Chairman of the Board of Directors and Chief Executive
Office of the Company, William C. Erbey is Chairman of the Board, Chief
Executive Officer and President of the Manager and of the Manager's parent,
OFC. William C. Erbey owns or has voting power over approximately 31.6% of the
outstanding common stock, including options exercisable within 60 days, of
OFC. Christine A. Reich is President and a member of the Board of Directors of
the Company, a Managing Director of the Manager and employed by
10
<PAGE>
OFC. Similarly, each of the Company's executive officers also serves as an
executive officer of the Manager and is employed by OFC.
In 1997, the Company entered into a number of transactions with OFC and the
Bank. Notably, the Bank services all of the Company's mortgage loans pursuant
to servicing agreements (one for commercial loans and one for residential
loans), the forms of which were approved by the Independent Directors.
Moreover, the Bank is the special servicer for the loans underlying most of
the mortgage-backed securities owned by the Company, and the Independent
Directors have approved those transactions in their quarterly meetings. After
closing its initial public offering, the Company purchased several mortgage-
backed securities from the Bank and OFC, as was disclosed in the prospectus
for the initial public offering. In addition, in May 1997, the Company entered
into a participation agreement in which the Company purchased a 13.83%
participation interest in four commercial subperforming and nonperforming
loans for a purchase price of approximately $8.54 million. Additionally, the
Bank and the Company were co-bidders on four pools of residential mortgages
(with an aggregate principal amount of $ of which the Company purchased
$ ) and one pool of commercial mortgages (with an aggregate principal amount
of $ of which the Company purchased $ ).
In December 1997, the Company repurchased 160,000 shares of Common Stock
held by IMIHC. On the same day, IMIHC acquired 160,000 units of limited
partnership interest in Ocwen Partnership, L.P. These transactions reduce
IMIHC's voting power with respect to the Company, but left in place IMIHC's
economic investment in the Company. This new structure will provide the
Company with more flexibility with respect to the management of future
acquisitions.
In February 1998, the Company repurchased 175,000 shares of Common Stock
held by IMIHC. On the same day, IMIHC acquired 175,000 units of limited
partnership interest in Ocwen Partnership, L.P. Also on the same day, Mr.
William C. Erbey, Ms. Christine A. Reich and Mr. Jordan C. Paul, respectively,
acquired 113,300, 2,500 and 2,500 shares, respectively, of the Common Stock
directly from the Company at the same price at which the Company repurchased
the 175,000 shares from IMIHC. The remaining 56,700 shares of the 175,000
shares redeemed by the Company were acquired by an affiliate of OFC.
EXECUTIVE COMPENSATION
The Company has not paid, and does not intend to pay, any annual
compensation to the Company's executive officers for their services as
executive officers. Moreover, the Company has not granted, and does not intend
to grant, any options to purchase shares of stock to the executive officers or
directors. Notwithstanding that the Company has no employees and does not pay
its executive officers any compensation, the Board of Directors has formed a
Compensation Committee, comprised of the Independent Directors, to handle any
upcoming compensation matters. Beginning on May 19, 1998, the Board of
Directors has the discretion to change the base management fee payable to the
Manager, if necessary, to align the fee more closely to the actual costs of
providing management services to the Company, and the Compensation Committee
will consider this matter at that time.
11
<PAGE>
PERFORMANCE GRAPH
The following graph compares the change in the Company's shareholder
cumulative total return on the Common Stock for the period May 14, 1997, which
was the first day the Company's Common Stock traded on the Nasdaq Stock Market,
through December 31, 1997, with the changes in the Standard & Poor's 500 Stock
Index (the "S&P 500"), the Nasdaq National Market ("Nasdaq"), and the SNL
Hybrid REIT Index (the "SNL Hybrid REIT"), for the same period, assuming a base
share price of $100 for the Common Stock and each index for comparative
purposes. Total return equals appreciation in stock price plus dividends paid,
and assumes that all dividends are reinvested. The information herein has been
obtained from sources believed to be reliable, but neither its accuracy nor its
completeness is guaranteed. The performance graph is not necessarily indicative
of future investment performance.
[GRAFT APPEARS HERE]
<TABLE>
<CAPTION>
PERIOD ENDING
--------------------------------------------------------------------------
INDEX 5/14/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
- ----- ------- ------- ------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ocwen Asset Investment
Corp................... 100.00 99.327 110.96 135.60 128.72 126.65 110.59 101.21 116.23
S&P 500................. 100.00 101.57 106.12 114.57 108.15 114.07 110.27 115.37 117.36
NASDAQ.................. 100.00 105.07 108.28 119.71 119.53 126.60 120.02 120.61 118.73
SNL Hybrid REIT......... 100.00 99.98 105.17 108.70 109.04 113.45 115.50 119.00 120.35
</TABLE>
12
<PAGE>
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
The Board of Directors will provide for the presentation of proposals by
shareholders at the 1999 annual meeting of shareholders, provided that such
proposals are submitted by eligible shareholders who have complied with the
relevant regulations of the SEC regarding shareholder proposals. Shareholder
proposals intended to be submitted for presentation at the 1999 annual meeting
of shareholders of the Company must be in writing and must be delivered to the
Secretary of the Company at its executive offices by personal delivery or
United States mail on or before January 16, 1999, for inclusion in the
Company's proxy statement and the form of proxy relating to the 1999 annual
meeting. A shareholder's notice to the Secretary shall set forth as to each
matter the shareholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting
(including the specific proposal to be presented) and the reasons for
conducting such business at the annual meeting, (ii) the name and record
address of the shareholder proposing such business, (iii) the class and number
of shares of the Company that are beneficially owned by the shareholder, and
(iv) any material interest of the shareholder in such business.
OTHER MATTERS
The Board of Directors knows of no other business to be brought before the
Annual Meeting. If any other matters properly comes before the Annual Meeting,
the proxies will be voted on such matters in accordance with the judgment of
the persons named as proxies therein, or their substitutes, present and acting
at the meeting.
The Board of Directors of the Company is soliciting proxies hereby primarily
by the use of the mails. The Company will bear the entire cost of preparing
and mailing this Proxy Statement and the accompanying material, and the cost
of any supplementary solicitations which may be made by mail, telephone,
telegraph or personally by officers and employees of the Company. The Company
will, upon request, reimburse brokerage firms and others for their reasonable
expenses in forwarding proxy materials to beneficial owners of the Company's
Common Stock.
The Company will furnish to each beneficial owner of Common Stock entitled
to vote at the Annual Meeting, upon written request to Investor Relations,
1675 Palm Beach Lakes Boulevard, West Palm Beach, Florida 33401, telephone
(561) 682-8400, a copy of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, including the financial statements and
financial statement schedules filed by the Company with the SEC.
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement, and, if given or made,
such information or representation should not be relied upon as having been
authorized. This Proxy Statement does not constitute the solicitation of a
proxy, in any jurisdiction, from any person to whom it is unlawful to make
such proxy solicitation in such jurisdiction. The delivery of this Proxy
Statement shall not, under any circumstances, imply that there has not been
any change in the information set forth herein since the date of the Proxy
Statement.
13
<PAGE>
- --------------------------------------------------------------------------------
REVOCABLE PROXY
OCWEN ASSET INVESTMENT CORP
1675 PALM BEACH LAKES BOULEVARD
WEST PALM BEACH, FLORIDA 33401
ANNUAL MEETING OF SHAREHOLDERS
MAY 14, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF OCWEN ASSET
INVESTMENT CORP. FOR USE ONLY AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
ON MAY 14, 1998, AND ANY ADJOURNMENTS THEREOF.
The undersigned hereby appoints John R. Erbey, William C. Erbey, Christine
A. Reich or any one of them, with full power of substitution in each, proxies
(and if the undersigned is a proxy, substitute proxies) to vote all Common
Stock of the undersigned in Ocwen Asset Investment Corp. (the "Company") at
the Annual Meeting of Shareholders to be held at the first floor offices of
the Company located at 1675 Palm Beach Lakes Boulevard, West Palm Beach,
Florida 33401, on Thursday, May 14, 1998 at 9:00 a.m., Eastern Time, and at
any adjournments thereof, as specified below:
[Please sign and date on reverse side of this proxy.]
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
[X] PLEASE MARK YOUR |
VOTES AS IN THIS |
EXAMPLE. ________
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF EACH NOMINEE FOR DIRECTOR, FOR RATIFICATION OF THE
APPOINTMENT OF THE COMPANY'S INDEPENDENT AUDITORS, AND FOR THE PROPOSED
AMENDMENT TO THE COMPANY'S ARTICLES.
FOR WITHHOLD AUTHORITY TO VOTE
1. Election of NOMINEES FOR ALL NOMINEES LISTED
Directors LISTED
(Term expiring BELOW
1999) [_] [_]
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name on the list below)
William C. Erbey, Christine A. Reich, Timothy J. Riddiough, Peter M. Small,
[new director]
2. Proposal to ratify the appointment of FOR AGAINST ABSTAIN
Price Waterhouse LLP, as Independent [_] [_] [_]
Auditors for the fiscal year ended
December 31, 1998
3. Proposal to amend Article VIII of the
Company's Articles of Incorporation to [_] [_] [_]
provide, in effect, that nothing contained
therein will prohibit the settlement of any
transaction entered into through the facilities
of any National Securities Exchange registered
under the Securities Exchange Act of 1934
(the "Exchange Act") or on the National Market
System of a National Securities Association
registered under the Exchange Act
4. In their discretion, the proxies (and if the undersigned is a proxy, any
substitute proxies) are authorized to vote upon such other business as may
properly come before the meeting.
Please sign name exactly as it appears on the left. When shares are held by
joint tenants, both should sign. When signing as attorney, as executor, admin-
istrator, trustee or guardian, please give full title as such. If a corpora-
tion, please sign in full corporate name by President or other authorized offi-
cer. If a partnership, please sign in partnership name by authorized person.
Signature: ____________________________ Date: _______, 1998 Title: ____________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
