<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
APEX MORTGAGE CAPITAL, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / 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 pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 20, 2000
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Holders of Shares of Common Stock of Apex Mortgage Capital, Inc.:
The 2000 Annual Meeting of Shareholders of Apex Mortgage Capital, Inc. will
be held on June 20, 2000 at The Wilshire Grand Hotel, located at 930 Wilshire
Boulevard, Los Angeles, California 90017 at 9:00 a.m. Pacific Time, for the
following purposes:
- To elect two directors to hold office for a term of three years, or until
their successors are elected and qualified.
- To ratify the appointment of Deloitte & Touche LLP, independent public
accountants, as auditors for the current year; and
- To take action on other business that may properly come before the
meeting.
To assure your representation at the meeting, please mark, sign and date
your proxy card and return it in the envelope provided after reading the
accompanying proxy statement.
By Order of the Board of Directors
/s/ Michael E. Cahill
MICHAEL E. CAHILL
SECRETARY
Los Angeles, California
April 28, 2000
YOUR VOTE IS IMPORTANT.
PLEASE PROMPTLY DATE, SIGN AND RETURN
YOUR PROXY IN THE ENCLOSED ENVELOPE.
<PAGE>
April 28, 2000
PROXY STATEMENT
------------------------
GENERAL INFORMATION
This proxy statement and accompanying proxy card are being mailed to
shareholders beginning on or about May 12, 2000 in connection with the
solicitation of proxy cards by the Board of Directors of Apex Mortgage
Capital, Inc. (hereinafter referred to as the "Company") for use at the 2000
Annual Meeting of Shareholders. The principal office of the Company is located
at 865 South Figueroa Street, Los Angeles, California 90017.
Holders of record of Company common stock at the close of business on
April 28, 2000 are entitled to notice of and to vote at the meeting. At the
close of business on April 19, 2000 there were 5,753,000 shares of common stock
outstanding, each of which entitles its holder to one vote. Cumulative voting is
not allowed.
THE BOARD OF DIRECTORS SOLICITS AND RECOMMENDS YOUR EXECUTION OF THE
ENCLOSED PROXY CARD. You may revoke your proxy card at any time prior to it
being used at the meeting by submission of a later proxy, giving notice in
writing to the Secretary of the Company or voting in person.
Shares for which a properly signed proxy card is received will be
represented at the Annual Meeting and will be voted as instructed on the proxy
card. Shareholders are urged to specify their choices by marking an "X" in the
appropriate box on the proxy card. If no choices are specified, the shares
represented will be voted as recommended by your Board of Directors.
The presence at the Annual Meeting, in person or by proxy, of a majority of
the shares of the Company's common stock issued and outstanding as of April 28,
2000, will constitute a quorum. A quorum is necessary for the transaction of
business at the Annual Meeting. The Company will treat abstentions as shares
that are present and entitled to vote for purposes of determining the presence
of a quorum, but as not voting for purposes of any matter submitted to the
stockholders for a vote. If a broker indicates on the enclosed proxy or its
substitute that it does not have discretionary authority as to certain shares to
vote on a particular matter ("broker non-votes"), those shares will be treated
as abstentions with respect to that matter. Shares represented by improperly
marked proxy cards will be treated as abstentions.
Once a quorum is present, a majority of the votes cast at the Annual Meeting
is sufficient to take or authorize action upon any matter which may properly
come before the meeting and a plurality of all the votes cast at the meeting is
sufficient to elect a director.
Votes cast at the Annual Meeting will be tabulated by the persons appointed
by the Company to act as inspectors of election for the Annual Meeting.
The enclosed proxy is solicited by the Board of Directors of the Company.
The cost of the solicitation will be borne by the Company. Proxy solicitations
will be made by mail, and may also be made by personal interview, telephone,
facsimile transmission and telegram on behalf of the Company by directors and
officers of the Company. Banks, brokerage houses, nominees and other fiduciaries
will be requested to forward the proxy soliciting materials to the beneficial
owners and obtain authorization for the execution of proxies. The Company may
reimburse brokers, banks and other fiduciaries for postage and reasonable
expenses incurred by them in the forwarding of proxy material to beneficial
owners of stock. The Company does not expect to engage an outside firm to
solicit proxies.
1
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors is divided into three classes. Except during the
first term of office following the Company's commencement of operations, each
class will serve a three-year term. The present term for the Class II directors
expires at the Annual Meeting, and the present terms for the Class III and
Class I directors expire at the annual meetings of stockholders to be held in
2001 and 2002, respectively. Each director holds such office until his or her
successor is duly elected or qualified.
Two Class II directors are to be elected at the Annual Meeting to hold
office until the Annual Meeting of Stockholders in 2003 and until their
respective successors are duly elected and qualified. The Board of Directors has
nominated Peter G. Allen and Philip A. Barach to continue to serve as Class II
directors (the "Nominees"). Each of the Nominees is currently serving as a
director of the Company. The Board of Directors anticipates that each Nominee
will serve, if elected, as a director. However, if any person nominated by the
Board of Directors is unable to serve, the proxy confers upon the holders
thereof discretionary authority to vote for the election of such other person or
persons as the Board of Directors may recommend.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES. PROXIES RECEIVED WILL BE VOTED FOR EACH OF THE NOMINEES UNLESS
STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY.
PROPOSAL 2: APPOINTMENT OF AUDITORS
Deloitte & Touche LLP, independent public accountants, have been appointed
as auditors by the Board of Directors of the Company to examine the books and
accounts of the Company for the year ending December 31, 2000. A representative
of Deloitte & Touche LLP is expected to attend the Annual Meeting. This
representative will have the opportunity to make a statement and is expected to
be available to respond to appropriate questions raised at the meeting. At the
annual meeting, shareholders will be asked to vote for or against ratification
of the Board of Directors appointment of Deloitte & Touche LLP.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS ITEM. PROXIES RECEIVED
WILL BE VOTED FOR THIS ITEM UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY.
OTHER BUSINESS
Management does not intend to present and does not know that others will
present any other items of business at the Annual Meeting. However, if any other
matters properly come before the meeting, the appointed Proxies will vote in
their discretion.
DIRECTORS AND EXECUTIVE OFFICERS
CLASS I DIRECTORS
JOHN C. ARGUE, 68, has been an unaffiliated director of the Company and a
member of its Audit Committee since December 1997. Mr. Argue is Chairman of the
Rose Hills Foundation (since 1996) and the Amateur Athletic Foundation (since
1995). Since 1990 Mr. Argue has been Of Counsel to the law firm of Argue Pearson
Harbison & Myers. Mr. Argue is also a Director of Avery Dennison Corporation,
Nationwide Health Properties Inc., the TCW Galileo Family of Funds and TCW
Convertible Securities Fund, Inc.
CARL C. GREGORY, III, 55, has been an unaffiliated director of the Company
and a member of its Audit Committee since December 1997. Since January 1998,
Mr. Gregory has been Chairman and Chief Executive Officer of West Capital
Financial Services Corp. From January 1996 through 1997, he was Managing Partner
of American Western Partners and from 1991 through 1995 he was Chairman, Chief
2
<PAGE>
Executive Officer and a Director of MIP Properties, Inc. Mr. Gregory has also
been a Director of Pacific Gulf Properties, Inc. since 1997. Mr. Gregory
received a B.A. degree in Accounting from Southern Methodist University and an
M.B.A. degree in Finance from the University of Southern California.
JEFFREY E. GUNDLACH, 40, is Chief Investment Officer, Vice Chairman and has
been an affiliated director of the Company since October 1997. Mr. Gundlach is a
Group Managing Director of TCW Investment Management Company (the "Manager"),
and of certain affiliates of the Manager. Mr. Gundlach has been with The TCW
Group, Inc. and its subsidiaries and affiliates ("TCW") since 1985. Previously,
Mr. Gundlach was employed by Transamerica Corporation's Property/Casualty
Insurance division, where he was a Senior Loss Reserve Analyst responsible for
investment discount and funding strategies. Mr. Gundlach is also a member of
TCW's mortgage backed securities group. Mr. Gundlach is a graduate of Dartmouth
College, holding B.A. degrees in Mathematics and Philosophy (summa cum laude).
He also attended Yale University as a Ph.D. candidate in Mathematics.
CLASS II DIRECTORS
PETER G. ALLEN, 40, has been an unaffiliated director of the Company and a
member of its Audit Committee since December 1997. He is also Chairman of its
Compensation Committee. Mr. Allen is Chairman of ForMyCause.com, Inc.
Previously, Mr. Allen was an investment banker for Credit Suisse First Boston as
a Managing Director and co-head of their West Coast office from October, 1998
through December, 1999. Previously, he worked at Morgan Stanley & Co.
Incorporated for 15 years through January, 1997, where he was the Managing
Director responsible for the firm's investment banking operations in the
southwestern United States. During his tenure at Morgan Stanley, Mr. Allen
advised a number of companies in a wide variety of strategic and financial
transactions. Mr. Allen was also the Managing Partner at Chartwell Partners from
January 1997 through July 1997. Mr. Allen received his B.A. degree in Economics,
summa cum laude, from Yale University in 1980 and his M.B.A. degree from
Stanford University in 1984.
PHILIP A. BARACH, 47, is President, Chief Executive Officer and has been an
affiliated director of the Company since October 1997. Mr. Barach is also a
Group Managing Director and Chief Investment Officer of Investment Grade Fixed
Income of the Manager and certain of its affiliates. Mr. Barach is a member of
TCW's mortgage backed securities group. Mr. Barach joined TCW in 1987 after
being employed by Sun Life Insurance Company, where he was Senior Vice President
and Chief of Investments. Previously, Mr. Barach served as head of Fixed Income
Investments for the State of California Retirement System. Mr. Barach attended
the Hebrew University of Jerusalem, where he received a B.A. degree in
International Relations and an M.B.A. degree in Finance.
CLASS III DIRECTORS
THE HON. JOHN A. GAVIN, 69, has been an unaffiliated director of the Company
and a member of its Audit Committee since December 1997. Mr. Gavin is founder
and, since 1968, chairman of Gamma Holdings, an international capital and
consulting firm. He is a partner and Managing Director of Hicks, Muse, Tate &
Furst (Latin America). Mr. Gavin is a member of the board of directors of
International Wire Group and Krause's Furniture, Inc. Mr. Gavin is also a
trustee of the Hotchkis & Wiley Funds (a Merrill Lynch company). From 1981 to
1986, Mr. Gavin was the United States Ambassador to Mexico. Mr. Gavin graduated
from Stanford University with a degree in Economic History of Latin America.
MARC I. STERN, 56, is Chairman and has been an affiliated director of the
Company since September 1997. Mr. Stern is Chairman of the Board of Directors of
the Manager and TCW Asset Management Company, and a Director of The TCW
Group, Inc. and Trust Company of the West. Mr. Stern is also President of The
TCW Group, Inc. and Chairman of the TCW Galileo Family of Funds. Mr. Stern
joined TCW in 1990. Previously, Mr. Stern was President of SunAmerica, Inc.,
Managing Director and Chief Administrative Officer of the Henley Group, Inc. and
Senior Vice President of Allied-Signal, Inc. and
3
<PAGE>
related entities. Mr. Stern is also Director of Qualcomm, Inc. and the Los
Angeles Music Center Opera, and a member of the Board of Trustees of The Salk
Institute and Dickinson College. Mr. Stern received a B.A. degree from Dickinson
College, an M.A. degree from the Columbia University School of Public Law and
Government, and a J.D. degree from the Columbia University School of Law.
BIOGRAPHICAL INFORMATION REGARDING EACH EXECUTIVE OFFICER WHO IS NOT A DIRECTOR
IS SET FORTH BELOW:
DANIEL K. OSBORNE, 35, has been Executive Vice President, Chief Operating
Officer and Chief Financial Officer of the Company since September 1997.
Mr. Osborne is also a Managing Director of the Manager and certain of its
affiliates. Mr. Osborne joined TCW in 1994 as part of its mortgage backed
securities group, managing fixed income mutual funds. Prior to joining TCW, from
1992 to 1994, Mr. Osborne was a Vice President of ASR Investments Corporation
("ASR"), a publicly held REIT investing in Mortgage Assets. At ASR, Mr. Osborne
was responsible for asset/liability management and the supervision and
preparation of public reporting. Prior to his employment with ASR, Mr. Osborne
was a Certified Public Accountant with Deloitte & Touche LLP specializing in
REITs, mortgage securities and publicly held companies. He holds a B.S. degree
in Accounting from Arizona State University.
DAVID S. DEVITO, 37, has been Controller of the Company since March, 1999.
Mr. DeVito is also a Managing Director and Chief Financial Officer of the
Manager and certain of its affiliates. Prior to joining TCW in 1993, Mr. DeVito
was a Senior Manager with Deloitte & Touche LLP, specializing in serving the
investment management and securities broker/dealer industries. He received his
B.A. in Business Economics from the University of California at Los Angeles and
is a Certified Public Accountant in the state of California. He is also a member
of the American Institute of Certified Public Accountants and the California
Society of Certified Public Accountants.
JOSEPH J. GALLIGAN, 41, has been Senior Vice President of the Company since
September 1997. Mr. Galligan is a Managing Director of the Manager and certain
of its affiliates. Prior to joining TCW in 1991, Mr. Galligan was a Vice
President at Smith Barney in the Mortgage-Backed Specialist Group. Prior to
that, he spent five years at First Boston as Vice President in the same area. In
addition, Mr. Galligan spent over three years at Scudder Stevens & Clark as a
Portfolio Manager/Trader. He holds a B.S. degree in Economics with a
concentration in Finance from the Wharton School of Business at the University
of Pennsylvania. Mr. Galligan is a Chartered Financial Analyst.
MICHAEL E. CAHILL, 49, has been Secretary of the Company since
September 1997. Mr. Cahill is a Managing Director and General Counsel of the
Manager and certain of its affiliates. Prior to joining TCW in 1991, Mr. Cahill
was Senior Vice President and General Counsel of Act III Communications.
Previously, he was in private law practice with O'Melveny & Myers and, prior to
that, with Shenas, Robbins, Shenas & Shaw in San Diego. He is a member of the
State Bar of California and of the Province of Ontario and is admitted to
various courts, including the U.S. Supreme Court. Mr. Cahill holds B.A. degrees
in Mathematics and Philosophy from Bishops University, Quebec, an LL.M. degree
from Harvard University and an LL.B. degree from Osgoode Hall Law School, York
University, Toronto.
PHILIP K. HOLL, 50 has been Assistant Secretary of the Company since
December 1997. Mr. Holl joined TCW in 1994 and is Senior Vice President and
Associate General Counsel of the Manager and certain of its affiliates. Prior to
joining TCW, Mr. Holl was General Counsel and Secretary to The Reserve Group of
Mutual Funds (New York). Mr. Holl received a B.A. in Economics from Rutgers
College, a J.D. from the Rutgers University School of Law (Camden) and a LL.M.
from the New York University School of Law.
4
<PAGE>
THE BOARD OF DIRECTORS AND ITS COMMITTEES
BOARD OF DIRECTORS
The Company is managed by a Board of Directors composed of seven members, a
majority of whom are independent of the Company's management. The Board of
Directors met five times in 1999. All directors attended 75% or more of the
meetings held in 1999 by the Board of Directors.
AUDIT COMMITTEE
The Board of Directors' Audit Committee consists of Messrs. Allen, Argue,
Gavin and Gregory. Mr. Gavin serves as the Audit Committee's Chairman. The Audit
Committee makes recommendations concerning the appointment of independent public
accountants. The committee also reviews the Company's financial statements and
meets with management, financial personnel and the independent public
accountants to consider the adequacy of the internal controls of the Company.
The Audit Committee met once in 1999.
COMPENSATION COMMITTEE
The Board of Directors' Compensation Committee is comprised entirely of
directors independent of the Company's management and consists of
Messrs. Allen, Argue, Gavin and Gregory. Mr. Allen serves as the Compensation
Committee's Chairman. The Compensation Committee's primary duty is to administer
the Company's Stock Option Plan. No interlocking relationship exists between the
Company's Board of Directors or officers responsible for compensation decisions
and the board of directors or compensation committee of any other company, nor
has any such interlocking relationship existed in the past. The Compensation
Committee did not meet in 1999.
NOMINATING COMMITTEE
The Board of Directors does not have a standing nominating committee.
COMPENSATION OF DIRECTORS
The Company pays an annual director's fee to each unaffiliated director of
$10,000, a fee of $1,250 for each meeting of the Board of Directors attended by
each unaffiliated director and reimbursement of costs and expenses of all
directors for attending such meetings. The Company does not separately
compensate affiliated directors.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and holders of more than 10% of the Company's
Common Stock, to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Such officers, directors and 10%
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on its review of such forms
that it received, or written representations from reporting persons that no
Form 5's were required for such persons, the Company believes that, during
fiscal 1999, all Section 16(a) filing requirements were satisfied on a timely
basis.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table discloses compensation received by the Company's Chief
Executive Officer and the four remaining most highly paid executive officers for
each of the three fiscal years ended December 31 since the Company's inception.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------- ----------------------------------
AWARDS PAYOUTS
----------------------- --------
NUMBER OF
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION(2) AWARDS($) OPTIONS(#) PAYOUTS COMPENSATION
- --------------------------- -------- --------- -------- --------------- ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Philip A. Barach......... 1997 -- -- -- -- 40,000 -- --
President & Chief 1998 -- -- -- -- 26,000 -- --
Executive Officer 1999 -- -- $40,560 -- -- -- --
Jeffrey E. Gundlach...... 1997 -- -- -- -- 40,000 -- --
Chief Investment 1998 -- -- -- -- 26,000 -- --
Officer 1999 -- -- 40,560 -- -- --
Daniel K. Osborne........ 1997 -- -- -- -- 35,000 -- --
Executive Vice 1998 -- -- -- -- 26,000 -- --
President, Chief 1999 -- -- 40,560 -- -- -- --
Operating Officer and
Chief
Financial Officer
Joseph J. Galligan....... 1997 -- -- -- -- 25,000 -- --
Senior Vice 1998 -- -- -- -- 16,000 -- --
President 1999 -- -- 24,960 -- -- -- --
Michael E. Cahill........ 1997 -- -- -- -- 15,000 -- --
Secretary 1998 -- -- -- -- 7,000 -- --
1999 -- -- 10,920 -- -- -- --
</TABLE>
- ------------------------
(1) The officers of the Company are separately compensated by the Manager for
certain of their duties performed on behalf of the Company.
(2) The options granted during 1998 included dividend equivalent rights ("DERs")
which enable the option recipient to receive an amount equal to any
dividends declared and paid by the Company on each underlying share. DERs of
$1.56 per share were received during 1999 and are included in this table as
"Other Annual Compensation".
STOCK OPTIONS GRANTED
No stock options were granted to executive officers of the Company during
the year ended December 31, 1999.
OPTIONS EXERCISED AND YEAR END HOLDINGS
The following table represents the total number of stock options exercised
by executive officers of the Company during the year ended December 31, 1999,
and the value of unexercised options held by executive officers of the Company
as of December 31, 1999.
6
<PAGE>
AGGREGATED OPTION EXERCISES IN 1999 AND
DECEMBER 31, 1999 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY
AT DECEMBER 31, OPTIONS AT
1999(3) DECEMBER 31, 1999($)
SHARES -------------------- ---------------------
ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- -------------- ----------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
Philip A. Barach......... None Exercised 0 39,666/26,334 0/0 (1)
Jeffrey E. Gundlach...... None Exercised 0 39,666/26,334 0/0 (1)
Daniel K. Osborne........ None Exercised 0 36,333/24,667 0/0 (1)
Joseph J. Galligan....... None Exercised 0 24,666/16,334 0/0 (1)
Michael E. Cahill........ None Exercised 0 13,500/8,500 0/0 (1)
</TABLE>
- ------------------------
(1) The Company's common stock as of December 31, 1999 traded at a value less
than the options' exercise price; the reported options are therefore not
in-the-money options.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company has been informed that as of the dates indicated the following
persons were beneficial owners of more than five percent of the Company's common
stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT OF VOTING
CLASS OF STOCK BENEFICIAL OWNER BENEFICIALLY OWNED/AS OF SECURITIES OUTSTANDING(1)
- -------------- ------------------------ ------------------------ -------------------------
<S> <C> <C> <C>
Common................. The TCW Group, Inc. 294,667 / Dec. 31, 1999 5.12%
865 South Figueroa
Street Los Angeles, CA
90017(2)
</TABLE>
- ------------------------
(1) Based on 5,753,000 shares of common stock issued and outstanding as of
April 19, 1999.
(2) This information was obtained from a Schedule 13G filing made by The TCW
Group, Inc. and Robert Day (the "Reporting Persons") on April 30, 1999
regarding the Reporting Persons' ownership of the Company's common stock as
of December 31, 1998. No change was reported in the ownership of the
Company's common stock as of December 31, 1999. The TCW Group, Inc. reported
sole voting and dispositive power of no shares of the Company's common
stock, and shared voting and dispositive power of 294,667 shares of the
Company's common stock owned by TCW Capital Investment Corporation, a
subsidiary of The TCW Group, Inc. Robert Day reported sole voting and
dispositive power of 66,667 shares of the Company's common stock, and shared
voting and dispositive power of the 294,667 shares reported by The TCW
Group, Inc. Robert Day's ownership position, including the double-counted
shares, was reported as 6.3% of the voting securities outstanding.
7
<PAGE>
The following table shows shares of stock beneficially owned as of
April 19, 1999 by all Directors, Executive Officers and all Directors and
Officers as a group.
<TABLE>
<CAPTION>
PERCENT OF VOTING
NAME OF NUMBER OF SHARES SECURITIES
CLASS OF STOCK BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING(1)
- -------------- ------------------------------------- ------------------ -------------------
<S> <C> <C> <C>
Common............... Peter G. Allen 32,666(2) 0.57%
Common............... John C. Argue 24,516(2) 0.43%
Common............... Philip A. Barach 110,466(2) 1.92%
Common............... Michael E. Cahill 13,500(4) 0.23%
Common............... Joseph J. Galligan 29,666(5) 0.52%
Common............... John A. Gavin 22,666(2) 0.39%
Common............... Carl C. Gregory, III 30,166(2) 0.52%
Common............... Jeffrey E. Gundlach 69,666(3) 1.21%
Common............... Daniel K. Osborne 66,333(6) 1.15%
Common............... Marc I. Stern 50,166(7) 0.87%
Common............... All Directors and Officers as a Group 454,310(8) 7.90%
</TABLE>
- ------------------------
(1) Based on 5,753,000 shares of common stock issued and outstanding as of
April 19, 1999 plus any shares issuable upon the Beneficial Owner's (or
Owners') exercise of vested options.
(2) Includes 22,666 shares issuable upon the exercise of vested options.
(3) Includes 39,666 shares issuable upon the exercise of vested options.
(4) Includes 13,500 shares issuable upon the exercise of vested options.
(5) Includes 24,666 shares issuable upon the exercise of vested options.
(6) Includes 36,333 shares issuable upon the exercise of vested options.
(7) Includes 26,000 shares issuable upon the exercise of vested options.
(8) Includes 274,995 shares issuable upon the exercise of vested options.
REPORT FROM THE COMPENSATION COMMITTEE
Because the Company does not pay direct compensation to its officers, the
Compensation Committee's primary duty is to administer the Company's Stock
Option Plan. The Compensation Committee did not meet during 1999 to award any
stock-based compensation to officers and directors. The Compensation Committee
believes the previously granted options and dividend equivalent rights were
sufficient incentives for the officers and directors to achieve the business
objectives of the Company during 1999.
The Compensation Committee
Peter G. Allen (Chairman)
John C. Argue
John A. Gavin
Carl C. Gregory, III
8
<PAGE>
TOTAL RETURN COMPARISON
The following graph presents a total return comparison of the Company's
common stock since the commencement of the Company's operations on December 4,
1997 through December 31, 1999, to the S&P Composite 500 Stock Index and the
Bloomberg Mortgage REIT Index. The total return reflects stock appreciation and
the value of dividends for the Company's common stock and for each of the
comparative indices. The information herein has been obtained from sources
believed to be reliable, but neither its accuracy nor its completeness is
guaranteed. The graph assumes that the value of the investment in the Company's
common stock and each index was $100 on December 4, 1997, the commencement of
the Company's operations, and that all dividends were reinvested in the security
or index, as applicable. The total return performance shown on the graph is not
indicative of future total return performance.
TOTAL RETURN COMPARISON SINCE COMMENCEMENT
OF OPERATIONS (DECEMBER 4, 1997)
THROUGH DECEMBER 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
APEX MORTGAGE S&P COMPOSITE BLOOMBERG MORTGAGE
CAPITAL, INC. 500 STOCK INDEX REIT INDEX
<S> <C> <C> <C>
12/4/97 $100 $100 $100
12/31/97 $93.60 $99.83 $88.98
12/31/98 $71.09 $128.37 $72.80
12/31/99 $86.84 $155.38 $76.70
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In addition to being Chairman and a director of the Company, Mr. Stern is
Chairman and a director of the Manager. Mr. Barach, in addition to being
President, Chief Executive Officer and a director of the Company is also a Group
Managing Director of the Manager. Mr. Gundlach, the Vice Chairman and Chief
Investment Officer of the Company, is also a Group Managing Director of the
Manager. Mr. Osborne, in addition to being Executive Vice President, Chief
Operating Officer and Chief Financial Officer of the Company, is a Managing
Director of the Manager. Mr. Galligan, Senior Vice President of the Company, is
also a Managing Director of the Manager. Mr. Cahill, Secretary of the Company,
is also General Counsel, Secretary and a Managing Director of the Manager.
The Manager will receive annual base management compensation based on the
Average Net Invested Capital of the Company, payable monthly in arrears, equal
to 3/4 of 1% of Average Net Invested Capital. "Average Net Invested Capital"
means the month end sum of (i) the Company's total shareholders' equity
9
<PAGE>
computed in accordance with generally accepted accounting principles, plus
(ii) any unsecured debt approved for inclusion by the Unaffiliated Directors at
issuance, plus or minus (iii) an adjustment to exclude the impact of any
unrealized gains, losses or other items that do not affect realized net income.
For the year ended December 31, 1999, the Manager received a base management fee
of $629,000 from the Company.
The Manager shall also be entitled to receive as incentive compensation for
each fiscal quarter, an amount equal to 30% of the Net Income of the Company,
before incentive compensation, in excess of the amount that would produce an
annualized Return on Equity equal to the Ten-Year U.S. Treasury Rate plus 1%.
The incentive compensation calculation and payment will be made quarterly in
arrears. The term "Return on Equity" is calculated for any quarter by dividing
the Company's Net Income for the quarter by its Average Net Worth for the
quarter. For purposes of calculating the incentive compensation payable, the
definition "Return on Equity" is not related to the actual distributions
received by stockholders or to an individual investor's actual return on
investment. For such calculations, the "Net Income" of the Company means the
taxable income of the Company (including net capital gains, if any) before the
Manager's incentive compensation, net operating loss deductions arising from
losses in prior periods and deductions permitted by the Internal Revenue Code of
1986, as amended, in calculating taxable income for a REIT plus the effects of
adjustments, if any, necessary to record hedging and interest transactions in
accordance with generally accepted accounting principles. A deduction for all of
the Company's interest expenses for borrowed funds is taken into account in
calculating Net Income. "Average Net Worth" for any period means the arithmetic
average of the sum of the gross proceeds from the offerings of its equity
securities by the Company, before deducting any underwriting discounts and
commissions and other expenses and costs relating to the offerings, plus the
Company's retained earnings (without taking into account any losses incurred in
prior periods) computed by taking the average of such values at the end of each
month during such period, minus the cumulative amounts paid by the Company to
repurchase its shares. For the Year Ended December 31, 1999 the Manager received
$1,714,000 as incentive compensation.
ANNUAL REPORT
This proxy statement is accompanied by the mailing of the Annual Report to
Shareholders for the fiscal year ended December 31, 1999, which contains
financial and other information about the activities of the Company.
THE COMPANY WILL FURNISH TO A SHAREHOLDER, WITHOUT CHARGE, A COPY OF ITS
MOST RECENT ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION (FORM 10-K)
UPON RECEIPT OF A WRITTEN REQUEST TO INVESTOR RELATIONS, APEX MORTGAGE
CAPITAL, INC., 865 SOUTH FIGUEROA STREET, LOS ANGELES, CALIFORNIA 90017.
PROPOSALS OF SECURITY HOLDERS
Notice is hereby given that any shareholder proposal intended to be
presented at the Annual Meeting of Shareholders in 2001 must be received at the
Company's principal office on or before December 31, 2000.
By Order of the Board of Directors
/s/ Michael E. Cahill
Los Angeles, California
April 28, 2000
10
<PAGE>
APEX MORTGAGE CAPITAL, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
IN CONJUNCTION WITH THE 2000 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints PHILIP A. BARACH and MARC I. STERN
proxies with power to act without the other and with full power of substitution,
and hereby authorizes them to represent and vote the shares of Common Stock of
Apex Mortgage Capital, Inc. held of record by the undersigned on April 28, 2000,
as directed on the reverse side and, in their discretion, on all other matters
which may properly come before the 2000 Annual Meeting of Shareholders to be
held on June 20, 2000, and at any adjournment or postponement thereof, as if the
undersigned were present and voting at the meeting.
Whether or not you expect to attend the meeting, you are urged to execute
and return this proxy, which may be revoked at any time prior to its use.
PROPOSAL NO. 1: THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES. PROXIES RECEIVED WILL BE VOTED FOR EACH OF THE NOMINEES
UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY. ANY RECEIVED PROXY THAT DOES
NOT WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION OF ANY NOMINEE SHALL BE DEEMED
TO GRANT SUCH AUTHORITY.
PROPOSAL NO. 2: THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS ITEM.
PROXIES RECEIVED WILL BE VOTED FOR THIS ITEM UNLESS STOCKHOLDERS SPECIFY
OTHERWISE IN THE PROXY.
IN ADDITION, PROXIES RECEIVED WILL BE VOTED IN THE PROXIES' DISCRETION ON ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE 2000 ANNUAL MEETING.
Unless contrary instructions are given on the reverse, this Proxy shall be voted
according to the recommendations of the Board of Directors.
(continued and to be dated and signed on the reverse side)
APEX MORTGAGE CAPITAL, INC.
P.O. BOX 11444
NEW YORK, N.Y. 10203-0444
<PAGE>
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
AUTHORITY GIVEN / / AUTHORITY WITHHELD / / ABSTAIN / /
AUTHORITY GIVEN, EXCEPT AUTHORITY TO VOTE IS WITHHELD
FROM THE FOLLOWING NOMINEE(S):
-----------------------------------------------------------------------
Authority to elect the following two (2) named Nominees to the Board of
Directors to hold office until the Annual Meeting of Stockholders in 2003 and
until their respective successors are duly elected and qualified.
NOMINEES: Peter G. Allen Philip A. Barach
(The Board of Directors recommends a vote FOR each of the Nominees.)
PROPOSAL NO. 2:
APPOINTMENT OF INDEPENDENT ACCOUNTANTS FOR / / AGAINST / / ABSTAIN / /
(The Board of Directors recommends a vote FOR.)
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and of the Proxy Statement.
I/WE PLAN TO
ATTEND THE MEETING / /
Change of Address and/or
Comments Mark Here / /
Please print name(s) exactly as it/
they appear of record in connection
with those shares over which you
have voting authority. Joint owners
should each sign personally. Where
applicable, indicate your official
position or representation
capacity.
Dated:_______________________, 2000
----------------------------------
Signature(s)
----------------------------------
Print Names(s)
(PLEASE SIGN, DATE AND RETURN THIS PROXY VOTES MUST BE INDICATED (X) IN
IN THE ENCLOSED POSTAGE PREPAID ENVELOPE) BLACK OR BLUE INK. /X/
