SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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 Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
LASER MORTGAGE MANAGEMENT, 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
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:_____
(2) Aggregate number of securities to which transaction applies:________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):__________
(4) Proposed maximum aggregate value of transaction:____________________
(5) Total fee paid:_____________________________________________________
[ ] Fee previously paid 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:_________________________________________________________
<PAGE>
LASER MORTGAGE MANAGEMENT, INC.
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 24, 1999
-----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
LASER Mortgage Management, Inc. (the "Company") will be held at Ricker
Auditorium, 180 Maiden Lane, New York, New York 10038, on June 24, 1999 at 8:30
a.m. for the following purposes:
1. To elect one Class II Director to serve for a three-year term and
until such director's successor is duly elected and qualified;
2. To ratify the selection of Deloitte & Touche LLP as independent
auditors of the Company for the fiscal year ending December 31,
1999; and
3. To transact such other business as may properly come before the
meeting, or any adjournment thereof.
Stockholders of record at the close of business on April 12, 1999
shall be entitled to notice of, and to vote at, the meeting.
By order of the Board of Directors,
Robert J. Gartner
Secretary
Dated: Rochelle Park, New Jersey
April 26, 1999
IMPORTANT: PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED
PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED TO ASSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING.
<PAGE>
LASER MORTGAGE MANAGEMENT, INC.
151 WEST PASSAIC STREET
ROCHELLE PARK, NEW JERSEY 07662
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 24, 1999
---------------
The accompanying proxy is solicited by the Board of Directors of LASER
Mortgage Management, Inc., a Maryland corporation (the "Company"), for use at
the Annual Meeting of Stockholders to be held on June 24, 1999, at 8:30 a.m., at
Ricker Auditorium, 180 Maiden Lane, New York, New York 10038, or any adjournment
thereof, at which stockholders of record at the close of business on April 12,
1999, shall be entitled to vote. The Annual Meeting is being held for the
purposes set forth in the accompanying Notice of Annual Meeting to Stockholders.
The cost of solicitation of proxies will be borne by the Company. The Company
may use the services of its directors, officers, employees and others to solicit
proxies, personally or by telephone; arrangements also may be made with
brokerage houses and other custodians, nominees, fiduciaries and stockholders of
record to forward solicitation material to the beneficial owners of stock held
of record by such persons. The Company may reimburse such solicitors for
reasonable out-of-pocket expenses incurred by them in soliciting, but no
compensation will be paid for their services. Any proxy granted as a result of
this solicitation may be revoked at any time before its exercise.
THE ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR ENDED DECEMBER 31,
1998 ACCOMPANIES THIS PROXY STATEMENT. THE DATE OF THIS PROXY STATEMENT IS THE
APPROXIMATE DATE ON WHICH THIS PROXY STATEMENT AND FORM OF PROXY WERE FIRST SENT
OR GIVEN TO STOCKHOLDERS. THE COMPANY WILL FURNISH WITHOUT CHARGE (OTHER THAN A
REASONABLE CHARGE FOR ANY EXHIBIT REQUESTED) TO ANY STOCKHOLDER OF THE COMPANY
WHO SO REQUESTS IN WRITING, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K,
INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, FOR THE YEAR ENDED
DECEMBER 31, 1998 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"SEC"). ANY SUCH REQUEST SHOULD BE DIRECTED TO LASER MORTGAGE MANAGEMENT, INC.,
151 WEST PASSAIC STREET, ROCHELLE PARK, NEW JERSEY 07662, ATTENTION: SECRETARY.
THE COMPANY'S FILINGS WITH THE SEC, INCLUDING THIS PROXY STATEMENT AND THE
COMPANY'S ANNUAL REPORT ON FORM 10-K, ARE ALSO AVAILABLE ON THE SEC'S WEB SITE
(HTTP://WWW.SEC.GOV).
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the proxy card will vote FOR the election of the
nominee proposed by the Board of Directors, FOR ratification of the appointment
of Deloitte & Touche LLP as the Company's independent accountants for the fiscal
year ending December 31, 1999 and as recommended by the Board of Directors with
regard to all other matters or, if no such recommendation is given, in their own
discretion. Each stockholder may revoke a previously granted proxy at any time
before it is exercised by filing with the Secretary of the Company a revoking
instrument or a duly executed proxy bearing a later date. The powers of the
proxy holders will be suspended if the person executing the proxy attends the
Annual Meeting in person and so requests. Attendance at the Annual Meeting will
not, in itself, constitute revocation of a previously granted proxy.
Pursuant to the Bylaws, the Board of Directors has fixed the time and date
for the determination of stockholders entitled to vote at the meeting,
notwithstanding any transfer of any stock on the books of the Company
thereafter. The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the shares of common stock outstanding on April 12,
1999 will constitute a quorum. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum. If a quorum is
present, (1) a plurality of the votes cast at the Meeting is required for
election as a director, and (2) the affirmative vote of the majority of the
shares present, in person or by proxy, at the Annual Meeting and entitled to
vote is required for all other matters. On April 12, 1999, the Company had
outstanding and entitled to vote with respect to all matters to be acted upon at
the meeting 17,818,283 shares of common stock. Each holder of common stock is
entitled to one vote for each share of stock held by such holder. Abstentions
are counted in the calculation of the votes cast with respect to any of the
matters submitted to a vote of stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved. If the
proxy is signed and returned without specifying choices, the shares will be
voted in favor of the election of the nominee proposed by the Board of Directors
and in favor of the appointment of Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ended December 31, 1999.
It is expected that the following business will be considered at the
meeting and action taken thereon:
ITEM 1: ELECTION OF DIRECTORS
The Company's Amended and Restated Articles of Incorporation and Bylaws
provide for a classified Board of Directors comprised of Classes I, II and III.
The Class II Director is scheduled to be elected at the Annual Meeting to serve
for a three-year term and until such director's successor is duly elected and
qualified. The nominee for Class II Director is set forth below.
Unless authorization is withheld, the persons named as proxies will vote
FOR the nominee for director listed below unless otherwise specified by the
stockholder. If the nominee is unable or declines to serve as a director at the
time of the Annual Meeting, the proxies will be voted for any nominee who shall
be designated by the present Board of Directors to fill the vacancy. If
additional persons are nominated for election as director, the proxy holders
intend to vote all proxies received by them for the nominee listed below and
against any other nominees. As of the date of this Proxy Statement, the Board of
Directors is not aware that the nominee is unable or will decline to serve as
director. The nominee listed below already is serving as director of the
Company.
The election to the Board of Directors of the nominee identified in this
Proxy Statement will require a plurality of the votes cast, in person or by
proxy, at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE NOMINEE IDENTIFIED BELOW. BOARD OF DIRECTORS
<TABLE>
<CAPTION>
NAME AGE POSITION WITH DIRECTOR
COMPANY SINCE
NOMINEE AS CLASS II DIRECTOR - TERM EXPIRING AFTER 2002
<S> <C> <C> <C>
Frederick N. Khedouri................................... 48 President and 1997
Director
CONTINUING CLASS I DIRECTOR - TERM EXPIRING AFTER 2001
Stuart H. Coleman....................................... 44 Director 1998
CONTINUING CLASS III DIRECTORS - TERM EXPIRING AFTER 2000
Jonathan Ilany.......................................... 45 Director 1998
Michael L. Smirlock, Ph.D............................... 41 Director 1997
</TABLE>
Certain biographical information regarding the nominee and each continuing
director is set forth below.
FREDERICK N. KHEDOURI is a Senior Managing Director of Bear, Stearns & Co.
Inc. and head of the firm's Financial Institutions Group, which provides
investment banking services to the banking, thrift, insurance, investment
management and specialty finance industries. Before joining Bear, Stearns & Co.
Inc. at the end of 1986, Mr. Khedouri was Associate Director of the White House
Office of Management and Budget from 1981 to 1985 and Deputy Chief of Staff for
Vice President George Bush in 1985 and 1986. After joining Bear, Stearns & Co.
Inc., he was appointed by President Ronald Reagan to the Board of Directors of
the Securities Investor Protection Corporation in 1987. Bear, Stearns & Co. Inc.
served as a managing underwriter of the Company's initial public offering of
common stock.
STUART H. COLEMAN has been a partner in the law firm of Stroock & Stroock &
Lavan LLP in New York, New York for more than five years. Such firm and Mr.
Coleman have performed legal services for the Company. The aggregate amount of
fees paid by the Company to Stroock & Stroock & Lavan LLP was less than 5% of
the law firm's gross revenues for the last fiscal year.
JONATHAN ILANY is the Chief Executive Officer and a director of
Angiosonics, Inc., a private medical device company with operations in the
United States and Israel. Before joining Angiosonics, Inc. in 1996, Mr. Ilany
was, since 1987, a Senior Managing Director of Bear, Stearns & Co. Inc., and
served on the Board of Directors of The Bear Stearns Companies Inc. until 1995.
Mr. Ilany holds a B.A. and an M.B.A. from the University of San Francisco.
MICHAEL L. SMIRLOCK, PH.D. was Chairman of the Board, Chief Executive
Officer and President of the Company until his termination in July 1998. For a
discussion of the events leading to Mr. Smirlock's termination, see "Cease-and-
Desist Order Against Director and Termination of Chief Executive Officer." Mr.
Smirlock is the principal stockholder and the Chief Executive Officer, President
and a Director of LASER Advisers Inc. (the "Former Manager"), a Delaware
corporation and registered investment adviser that managed the day-to-to
operations of the Company from its inception to February 28, 1998. Before
forming the Former Manager, Mr. Smirlock was a principal of Appaloosa Management
L.P., where he managed investment vehicles and accounts investing primarily in
mortgage-backed securities since 1994. From 1990 until he resigned in 1993, Mr.
Smirlock was Domestic Fixed Income Chief Investment Officer for Goldman Sachs
Asset Management ("GSAM"), a division of Goldman, Sachs & Co., and a partner of
Goldman, Sachs & Co. From 1988 to 1990, Mr. Smirlock served as the head of the
Asset Acquisition Group at Franklin Savings Association. Mr. Smirlock was an
Associate Professor of Finance at the Wharton School of Business of the
University of Pennsylvania from 1982 to 1990.
INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board of Directors has two standing committees: the Compensation
Committee and the Audit Committee. Messrs. Khedouri and Ilany currently serve on
the Compensation Committee and the Audit Committee. The Compensation Committee
is responsible for recommending to the Board of Directors the Company's
executive compensation policies for the Company's executive officers and for
administering the Company's Stock Incentive Plan. The Audit Committee is
responsible for recommending independent auditors, reviewing the audit plan, the
adequacy of internal controls, the audit report and the management letter, and
performing such other duties as the Board of Directors may from time to time
prescribe.
During the year ended 1998, there were 16 meetings of the Board of
Directors, one meeting of the Audit Committee and no meetings of the
Compensation Committee. The responsibilities of the Compensation Committee were
handled by the entire Board of Directors, a majority of whom at all times were
not affiliated, directly or indirectly, with the Former Manager.
The Company is not aware of any family relationship between any director,
executive officer or person nominated to become a director or executive officer.
COMPENSATION OF DIRECTORS
The Company pays each non-employee director compensation of $10,000 per
annum and a fee of $500 for each meeting of the Board of Directors that he
attends. However, the directors may be granted awards from time to time pursuant
to the Company's 1997 Stock Incentive Plan. The Company reimburses each director
for ordinary and necessary expenses related to such director's attendance at
Board of Directors and committee meetings. During 1998, no options were granted
to any directors under the 1997 Stock Incentive Plan.
MANAGEMENT OF THE COMPANY
The executive officers of the Company and their positions are as follows:
NAME Age Position with the Company
Frederick N. Khedouri............... 48 President and Director
Robert J. Gartner................... 36 Vice President, Treasurer
and Secretary
Biographical information regarding Mr. Khedouri is provided above.
ROBERT J. GARTNER has been Vice President and Secretary of the Company
since its inception and Treasurer since March 1999. Mr. Gartner was formerly a
Vice President and Secretary of the Former Manager from September 1997 through
February 1999. From January 1997 until he joined the Former Manager, Mr. Gartner
was employed by Appaloosa Management L.P., where he assisted Mr. Smirlock in the
management of investments, primarily in mortgage-backed securities. Before
joining Appaloosa, Mr. Gartner held various positions at Donaldson, Lufkin &
Jenrette Securities Corporation from 1987, including Vice President and trader
in the mortgage-backed securities department.
CEASE-AND-DESIST ORDER AGAINST DIRECTOR AND TERMINATION OF CHIEF EXECUTIVE
OFFICER
On November 29, 1993, Michael L. Smirlock, the former Chairman of the
Board, Chief Executive Officer and President of the Company and former Chief
Executive Officer of the Former Manager, consented to the entry of a
cease-and-desist order (the "Order") issued pursuant to Sections 203(f), 203(k)
and 206(2) (the anti-fraud provisions) of the Investment Advisers Act of 1940,
as amended (the "Advisers Act"), against him by the SEC in connection with
certain securities transactions executed between December 1992 and February 1993
while Mr. Smirlock was Chief Investment Officer for GSAM. The SEC found that Mr.
Smirlock caused and aided and abetted violations of the Advisers Act by (i)
causing to be executed a series of purchase transactions in mortgage-backed
securities for which he failed to promptly prepare order tickets allocating the
securities to specific client accounts and (ii) causing to be executed two
mortgage-backed securities transactions between client accounts without
obtaining independent evaluations of the prices at which he instructed the
transactions to be executed in order to ensure that the best price and execution
were obtained for the clients. The SEC found that Mr. Smirlock caused and aided
and abetted violations of these recordkeeping provisions by failing to write
tickets allocating trades on the days the trades were executed. The SEC (i)
ordered Mr. Smirlock to cease and desist from committing or causing any
violation of the provisions of the Advisers Act set forth in the Order, (ii)
suspended him from association with any broker, dealer, investment adviser,
investment company or municipal securities dealer for a three-month period and
(iii) required him to pay a penalty of $50,000. Contemporaneously with the entry
of the Order, Mr. Smirlock submitted an Offer of Settlement to the SEC, which
the SEC accepted, in which he consented to the SEC's entry of the Order, without
admitting or denying the findings set forth therein. GSAM had become aware of
serious violations of its internal compliance policies and reported these
violations to the SEC. In March 1993, following its report to the SEC, GSAM
suspended Mr. Smirlock's trading activities. Mr. Smirlock resigned from GSAM and
Goldman, Sachs & Co. effective November 30, 1993.
In late June 1998, the Company's Board of Directors was advised by the
Former Manager of certain pricing and other irregularities in connection with
Shetland Fund Ltd., one of the private investment funds (the "Affiliated Funds")
advised and managed by the Former Manager. The reported irregularities included
the failure to obtain dealer quotes for securities, the failure to obtain more
than a single quote in certain instances, mispricing bids, misplaced records,
missing records and improperly identified securities in the portfolio. In July
1998, the Company's Board of Directors was informed by the Former Manager that
the irregularities detected in the Affiliated Fund did not affect the portfolio
of securities held by the Company and that certain procedural deficiencies
existed at the Former Manager which allowed for the irregularities. In July
1998, Mr. Smirlock resigned from his position as Chief Executive Officer of the
Former Manager. Also in July 1998, the Company's Board of Directors terminated
Mr. Smirlock's employment as Chief Executive Officer and President and removed
Mr. Smirlock as Chairman of the Board of the Company. Mr. Smirlock remains a
director of the Company, although the Board of Directors has asked for his
resignation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's common stock as of March
31, 1999, by (i) each director and nominee for director, (ii) any person known
to the Company to be the beneficial owner of five percent or more of the common
stock and (iii) all directors and executive officers as a group. Unless
otherwise indicated in the footnotes to the table, the beneficial owners named
have, to the knowledge of the Company, sole voting and investment power with
respect to the shares beneficially owned, subject to community property laws
where applicable.
Shares
Beneficially Owned
Name and Address of Beneficial Number
Owner (1) of Shares Percent
Frederick N. Khedouri (2)..................... 32,500 *
Robert J. Gartner (3)......................... 66,000 *
Stuart H. Coleman............................. 0 *
Jonathan Ilany................................ 0 *
Michael L. Smirlock, Ph.D..................... 133,000 *
Highfields Capital Management L.P.(4)......... 3,275,900 18.4%
Franklin Mutual Advisers Inc. (5)............. 2,523,433 14.2%
Legg Mason, Inc. (6).......................... 1,938,330 10.9%
Wellington Management Company, LLP(7)......... 1,692,600 9.5%
All directors and executive
officers as a group (5 persons)............... 231,500 1.3%
- ---------------
* Less than one percent
(1) Mr. Khedouri's address is c/o Bear, Stearns & Co. Inc., 245 Park Avenue,
New York, New York 10167. Mr. Gartner's address is c/o LASER Mortgage
Management, Inc., 151 West Passaic Street, Rochelle Park, New Jersey 07662.
Mr. Coleman's address is c/o Stroock & Stroock & Lavan LLP, 180 Maiden
Lane, New York, New York 10038. Mr. Ilany's address is c/o Angiosonics,
Inc., 2200 Gateway Centre Blvd., Suite 207, Morrisville, North Carolina
27560. Mr. Smirlock's address is 285 Summit Avenue, Summit, New Jersey
07901. The address of Highfields Capital Management L.P. is 200 Clarendon
Street, 51st Floor, Boston, Massachusetts 02117. The address of Franklin
Mutual Advisers Inc. is 51 John F. Kennedy Parkway, Short Hills, New Jersey
07078. The address of Legg Mason, Inc. is 100 Light Street, Baltimore,
Maryland 21202. The address of Wellington Management Company, LLP is 75
State Street, Boston, Massachusetts 02109.
(2) Includes 2,500 options which are currently exercisable.
(3) Includes 36,000 options which are currently exercisable.
(4) Based on Schedule 13G filed on February 16, 1999.
(5) Based on Schedule 13G/A filed on January 29, 1999. Includes all of the
shares of common stock owned beneficially by certain mutual funds advised
by Franklin Mutual Advisers Inc.
(6) Based on Schedule 13G filed on February 12, 1999. Includes all of the
shares of common stock owned beneficially by certain mutual funds advised
by Legg Mason, Inc.
(7) Based on Schedule 13G filed on February 9, 1999. Includes all of the shares
of common stock owned beneficially by clients advised by Wellington
Management Company, LLP.
EXECUTIVE COMPENSATION
The Company has not paid any annual compensation to the Company's executive
officers for their services as executive officers in 1998. Therefore, no summary
compensation table has been presented. The executive officers may be granted
awards from time to time pursuant to the Company's 1997 Stock Incentive Plan. No
awards were granted to executive officers during 1998.
The Company entered into an employment agreement with Mr. Gartner as of
March 1, 1999 which expires as of June 30, 1999 and is automatically renewed on
a month-to-month basis unless terminated by either party upon at least 15 days'
prior notice. Mr. Gartner receives a monthly salary of $50,000 and is entitled
to receive a $90,000 severance payment in the event that the agreement is not
renewed by the Company or he is terminated other than for cause. The employment
agreement terminates upon the permanent disability of Mr. Gartner or for cause.
GRANTS OF AWARDS
DEFERRED STOCK AWARDS IN 1998
The following table shows the value of shares of deferred stock granted to
the executive officers which vested in 1998. No deferred stock awards were
granted in 1998.
NAME Value of Deferred
Stock (1)
Michael L. Smirlock (2) $837,500
Thomas G. Jonovich (3) 0
Peter T. Zimmermann (4) $183,281
Robert J. Gartner $61,094
- ---------------
(1) The deferral period under these awards expires, and the stock is issued, at
the rate of 6.25% per quarter commencing on January 2, 1998. The number of
shares of non-vested deferred stock held and the value of those shares as
of December 31, 1998, are as follows: Mr. Smirlock's deferred stock awards
terminated as of July 30, 1998 without any further vesting; Mr. Zimmermann
held 45,000 shares of deferred stock valued at $244,800; and Mr. Gartner
held 15,000 shares of deferred stock valued at $81,600. No dividends or
dividend equivalents are paid on deferred stock until the deferral period
expires.
(2) Mr. Smirlock was terminated as Chief Executive Officer in July 1998.
(3) Mr. Jonovich resigned as Chief Financial Officer and Treasurer in February
1999.
(4) Mr. Zimmermann resigned as Vice President and Chief Operating Officer in
January 1999.
STOCK OPTION/SAR GRANTS IN 1998
No stock options or stock appreciation rights were granted in 1998.
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND DECEMBER 31, 1998
OPTION/SAR VALUES
The following table sets forth information regarding the total number of
stock options held by the executive officers of the Company as of December 31,
1998, the aggregate number of unexercised options and stock appreciation rights
that were exercisable and unexercisable at December 31, 1998 and the values of
"in-the-money" stock options and stock appreciation rights on December 31, 1998
which represent the positive difference between the market price of the
Company's common stock and the exercise price of such options and stock
appreciation rights. No stock appreciation rights were held in 1998 and there
were no stock option exercises by the named executive officers during 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING
NUMBER OF SHARES UNEXERCISED VALUE OF THE UNEXERCISED IN-THE-
ACQUIRED ON VALUE OPTIONS/SARS AT 12/31/98 MONEY OPTIONS/SARS 12/31/98($)(1)
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------- --------- ----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Michael L. Smirlock (2).... 0 0 0 0 0 0
Thomas G. Jonovich (3)..... 0 0 14,000 14,000 0 0
Peter T. Zimmermann (4).... 0 0 27,500 82,500 0 0
Robert J. Gartner.......... 0 0 18,000 54,000 0 0
- ---------------
(1) At December 31, 1998, none of the stock options granted by the Company were
"in-the-money."
(2) Mr. Smirlock was terminated as Chief Executive Officer in July 1998.
(3) Mr. Jonovich resigned as Chief Financial Officer and Treasurer in February
1999.
(4) Mr. Zimmermann resigned as Vice President and Chief Operating Officer in
January 1999.
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers and directors, and persons who own
more than 10% of the Company's common stock to file reports of ownership and
changes in ownership with the SEC and the New York Stock Exchange. Officers,
directors and greater than ten-percent stockholders are required by SEC
regulations to furnish the Company with copies of all such reports they file.
Based solely on a review of the copies of such reports furnished to the
Company, or written representations that no Form 5 was required, the Company
believes that all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten-percent beneficial owners were complied with
through December 31, 1998, except that Frederick N. Khedouri failed to file
timely a Form 4 for May 1998 and September 1998 and that Jonathan Ilany failed
to file timely a Form 3 for July 30, 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No interlocking relationship exists between members of the Company's Board
of Directors or the Compensation Committee or officers responsible for
compensation decisions and the board of directors or compensation committee of
any other company, nor has such interlocking relationship existed in the past.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company was subject to various conflicts of interest involving the
Former Manager. Pursuant to the terms of a Management Agreement (the "Management
Agreement") with the Company, the Former Manager was responsible for the
day-to-day operations of the Company and performed (or caused to be performed)
such services and activities relating to the assets and operations of the
Company as was appropriate, subject to the supervision of the Company's Board of
Directors. The executive officers of the Company in 1998, other than Mr.
Khedouri, were officers and employees and directors of the Former Manager.
Michael L. Smirlock, a director and Former Chief Executive Officer and President
of the Company, is the majority stockholder and a director of the Former
Manager. The Company's principal executive offices in 1998 were located in Short
Hills, New Jersey and were provided by the Former Manager in accordance with the
terms of the Management Agreement.
For performing services under the Management Agreement, the Former Manager
received an annual base management fee and a quarterly incentive fee. For the
year ended December 31, 1998, management fees amounted to $2.4 million and
incentive fees were $2.1 million.
The Company and the Former Manager terminated the Management Agreement
effective as of February 28, 1999. In connection therewith, the Company agreed
to pay to the Former Manager: (a) $416,505, which represented the base
management fee payable under the Management Agreement for the fourth quarter of
1998; (b) $708,495, which the Company and the Former Manager agreed to as the
quarterly incentive fee for the fourth quarter of 1998; and (c) $500,000 for
services performed under the Management Agreement for the period January 1, 1999
through February 28, 1999 and for certain transition services with respect to
internalizing the advisory function.
The Management Agreement did not limit or restrict the right of the Former
Manager or any of its officers, directors, employees or affiliates from engaging
in any business or rendering services of any kind to any other person, except
that, during the term of the Management Agreement, the Former Manager could not
manage another publicly-traded mortgage REIT or any additional private
investment fund that invests primarily in mortgage assets and follow investment
strategies and policies similar to those employed by the Company, without the
prior approval of the Independent Directors. The Former Manager and its officers
and employees advised and managed the Affiliated Funds, which invested in
mortgage-backed securities and have invested in the Company's securities.
The incentive fee payable to the Former Manager was based upon the net
income received by the Company. This may have created an incentive for the
Former Manager to recommend investments with greater income potential, which
generally are riskier or more speculative than would be the case if such fees
did not include a "performance" component. Such incentives may have resulted in
increased risk to the value of the Company's investment portfolio.
The Former Manager, its affiliates and the funds managed by Appaloosa
Management L.P. purchased an aggregate of 1,014,000 shares of common stock of
the Company in a private placement. The Former Manager and its directors,
officers and employees received stock options pursuant to the Company's Stock
Incentive Plan.
An Affiliated Fund entered into a total rate of return swap with a
broker-dealer which provided that the Affiliated Fund would bear the economic
benefit and risk of directly holding the 666,666 shares of the Company's common
stock purchased by such broker-dealer in a private placement. The Company has
been advised that the total return swap was terminated in December 1998.
Frederick N. Khedouri, a Senior Managing Director of Bear, Stearns & Co.
Inc., is the President and a director of the Company and has purchased 10,000
shares of common stock at the initial public offering price in a private
placement and additional 20,000 shares in the public market. Bear, Stearns & Co.
Inc. provides financial advisory services to the Company.
Stuart H. Coleman, a partner in the law firm of Stroock & Stroock & Lavan
LLP, is a director of the Company. Such firm and Mr. Coleman perform legal
services for the Company.
<PAGE>
PERFORMANCE GRAPH
The following graph presents a comparison of cumulative total returns for
the Company's common stock since inception with the S&P 500 index and the
Bloomberg L.P. BBREIT Mortgage Index ("MREIT"), a capitalization-weighted index
of infinite life mortgage REITs having a market capitalization of $15 million or
greater.
[GRAPHIC OMITTED]
DATE LMM MREIT S&P 500 Date LMM MREIT S&P 500
04/16/1999 7.26 11.921 21.126 07/24/1998 10.61 13.82 18.081
04/02/1999 7.605 11.939 20.714 07/10/1998 11.09 14.363 18.452
03/19/1999 7.086 11.024 20.796 06/26/1998 10.34 12.728 17.948
03/05/1999 7.346 11.472 20.406 06/12/1998 14.74 12.227 17.399
02/19/1999 6.741 11.618 19.811 05/29/1998 15.46 12.876 17.259
02/05/1999 6.828 12.183 19.802 05/15/1998 15.53 13.301 17.532
01/22/1999 6.828 12.44 19.565 05/01/1998 15.79 13.413 17.708
01/08/1999 7.778 12.245 20.357 04/17/1998 16.71 13.689 17.727
12/25/1998 7.001 10.62 19.565 04/03/1998 17.11 13.688 17.718
12/11/1998 6.351 10.958 18.608 03/20/1998 17.06 13.856 17.342
11/27/1998 6.423 11.22 19.007 03/06/1998 16.67 13.472 16.647
11/13/1998 5.558 10.596 17.936 02/20/1998 16.99 13.266 16.296
10/30/1998 6.857 9.513 17.49 02/06/1998 16.41 13.647 15.941
10/16/1998 4.619 8.868 16.809 01/23/1998 15.13 13.511 15.065
10/02/1998 8.082 11.415 15.947 01/09/1998 14.68 13.163 14.592
09/18/1998 8.009 11.334 16.215 12/26/1997 14.87 13.149 14.717
09/04/1998 8.283 9.969 15.47 12/12/1997 14.24 13.821 14.979
08/21/1998 9.651 11.201 17.162 11/28/1997 15 15 15
08/07/1998 9.515 13.28 17.279
ITEM 2: RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected the accounting firm of
Deloitte & Touche LLP as independent auditors of the Company for the year ending
December 31, 1999. Deloitte & Touche LLP has served as the Company's independent
auditors since the Company's inception. A representative of Deloitte & Touche
LLP is expected to be present at the meeting with the opportunity to make a
statement if such representative so desires and to respond to appropriate
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S AUDITORS.
ITEM 3: OTHER MATTERS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting is
that hereinabove set forth. If any other matter or matters are properly brought
before the meeting, or any adjournment thereof, it is the intention of the
persons named in the accompanying form of proxy to vote the proxy on such
matters in accordance with their judgment.
STOCKHOLDER PROPOSALS: 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at the Company's 2000
Annual Meeting of Stockholders must be received by the Company on or prior to
December 28, 1999, to be eligible for inclusion in the Company's Proxy Statement
and form of proxy to be used in connection with the 2000 Annual Meeting.
By order of the Board of Directors,
Robert J. Gartner
Secretary
Rochelle Park, New Jersey
April 26, 1999
<PAGE>
LASER MORTGAGE MANAGEMENT, INC.
Annual Meeting of Stockholders to be held June 24, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned, revoking any proxy heretofore given, hereby appoints Robert
R J. Gartner proxy of the undersigned with full power of substitution, with
O respect to all of the shares of stock of LASER MORTGAGE MANAGEMENT, INC.
X ("LASER") which the undersigned is entitled to vote at LASER'S Annual
Y Meeting of Stockholders to be held on Thursday, June 24, 1999, and at any
adjournment thereof.
(Continued, and to be marked, dated and signed, on the reverse side)
SEE REVERSE
SIDE
<PAGE>
DETACH HERE
Please mark
/X/ vote as in this
example
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE NOMINEE LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2.
1. ELECTION OF DIRECTOR: To FOR AGAINST ABSTAIN
elect the one (1) nominee for /__/ /__/ /__/
Class II Director listed below
for a term of three years. 2. Proposed to ratify and approve
the appointment of Deloitte &
Nominee: Frederick N. Khedouri Touche LLP as independent auditors
/__/ FOR /__/ WITHHELD of LASER for the fiscal year ending
NOMINEE FROM December 31, 1999.
NOMINEE
3. In their discretion, upon any other
matters which may properly come
before the meeting or any
adjournment thereof.
MARK HERE
FOR ADDRESS /__/
CHANGE AND
NOTE AT LEFT
Receipt of the Notice of Annual
Meeting and of the Proxy Statement and
Annual Report to Stockholders of LASER
is hereby acknowledged PLEASE DATE,
SIGN AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
Your signature should appear the same
as your name appears hereon. If
signing as attorney, executor,
administrator, trustee or guardian,
please indicate the capacity in which
signing. When signing as joint
tenants, all parties to the joint
tenancy must sign. When the proxy is
given by a corporation, it should be
signed by an authorized officer.
Signature ________________ Date _____ Signature ________________ Date_______
