<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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-2.
</TABLE>
AMRESCO, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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 0-12.
(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:
------------------------------------------------------------------------
<PAGE> 2
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 18, 1998
------------------
TO THE STOCKHOLDERS OF AMRESCO, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of AMRESCO, INC. (the "Company") will be held on the 17th
floor of the North Tower of the Plaza of the Americas, 700 North Pearl Street,
Dallas, Texas, on Monday, May 18, 1998, at 10:00 a.m., Central Time, for
considering and acting upon:
1. The election of three (3) directors for a three-year term;
2. The appointment of Deloitte & Touche LLP as the Company's
independent public accountants for the year 1998; and
3. To transact such other business as may properly come before
the Annual Meeting.
Only stockholders of record at the close of business on March 23, 1998
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment(s) thereof. For a period of at least ten (10) days prior to the
Annual Meeting, a complete list of stockholders entitled to vote at the Annual
Meeting will be open to examination by any stockholder during ordinary business
hours at the offices of the Company, 700 North Pearl Street, Suite 2400,
Dallas, Texas 75201.
Information concerning the matters to be acted upon at the Annual
Meeting is set forth in the accompanying Proxy Statement.
A proxy card is enclosed in the envelope in which these materials were
mailed to you. Please fill in, date and sign the proxy card and return it
promptly in the enclosed postage-paid return envelope. If you attend the Annual
Meeting, you may, if you wish, withdraw your proxy and vote in person.
A copy of the Annual Report to Stockholders for the fiscal year ended
December 31, 1997 is enclosed.
By Order of the Board of Directors
/s/ L. KEITH BLACKWELL
L. Keith Blackwell
Senior Vice President, General Counsel
and Secretary
Dallas, Texas
April 17, 1998
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY SO THAT YOUR VOTE MAY BE RECORDED
AT THE ANNUAL MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE> 3
AMRESCO, INC.
PROXY STATEMENT
-----------
INTRODUCTION
This Proxy Statement is furnished to stockholders of AMRESCO, INC., a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Company's Board of Directors for use at the Annual Meeting of
Stockholders to be held at 10:00 a.m., Central Time, on May 18, 1998, on the
17th floor of the North Tower of the Plaza of the Americas, 700 North Pearl
Street, Dallas, Texas (the "Annual Meeting"), and at any adjournment(s)
thereof. The Annual Meeting is being held for the purpose of considering and
acting upon:
(1) The election of three (3) directors for a three-year term;
(2) The appointment of Deloitte & Touche LLP as the Company's
independent public accountants for the year 1997; and
(3) To transact such other business as may properly come before
the Annual Meeting.
The date of this Proxy Statement is April 17, 1998. This Proxy
Statement is first being mailed to the Company's stockholders on or about such
date.
The Company's principal offices are located at 700 North Pearl Street,
Suite 2400, Dallas, Texas 75201. Its telephone number is (214) 953-7700.
VOTING AT THE MEETING
Only holders of record of the Company's common stock, par value $.05
per share (the "Common Stock"), outstanding at the close of business on March
23, 1998 (the "Record Date") are entitled to notice of and to vote at the
Annual Meeting and at any adjournment(s) thereof. As of the close of business
on the Record Date, 42,763,934 shares of Common Stock were outstanding and
entitled to vote at the Annual Meeting. Unless otherwise indicated, all
references herein to percentages of outstanding shares of Common Stock are
based on such number of shares outstanding. Each share of Common Stock is
entitled to one (1) vote.
The presence, in person or by proxy, of holders of a majority of the
outstanding shares of Common Stock entitled to vote is necessary to constitute
a quorum at the Annual Meeting. Abstentions and broker non-votes will be
counted in determining whether a quorum is present.
The three (3) nominees for director listed herein shall be elected by
a plurality of the votes of the shares of Common Stock present, in person or
represented by proxy, at the Annual Meeting. Votes may be cast in favor or
withheld with respect to such proposal. The affirmative vote of a majority of
the shares of Common Stock represented in person or by proxy and entitled to
vote at the Annual Meeting will be required to approve the appointment of
Deloitte & Touche LLP as the Company's independent public accountants for the
year 1998 and any other proposals that properly come before the Annual Meeting.
Abstentions and broker non-votes will have no effect (other than for quorum
purposes) on the election of the nominees for director. Abstentions on any
other proposal will have the same effect as a vote against such proposal;
however, a broker non-vote with respect to any such proposal will have no
effect. An automated system administered by the Company's transfer agent will
tabulate the votes cast.
All shares of Common Stock represented by properly executed and
unrevoked proxies will be voted at the Annual Meeting in accordance with the
direction on the proxies. If no direction is indicated, the shares will be
voted "for" (i) the election of the three (3) persons named under "Election of
Directors" as the Class II directors of the Company; (ii) the appointment of
Deloitte & Touche LLP as the Company's independent public accountants for the
year 1998; and (iii) at the discretion of the proxy holders with regard to any
other matter that may properly come before the Annual Meeting. The Company does
not know of any matters, other than those described in the Notice of Annual
Meeting of Stockholders, which will come before the Annual Meeting.
Page 1
<PAGE> 4
A stockholder of the Company who executes and returns a proxy has the
power to revoke it at any time before it is voted. A stockholder who wishes to
revoke a proxy can do so by (i) executing a later dated proxy relating to the
same shares and by delivering it to the Secretary of the Company prior to the
vote at the Annual Meeting, (ii) giving written notice of the revocation to the
Secretary of the Company prior to the vote at the Annual Meeting or (iii)
appearing in person at the Annual Meeting and voting in person the shares to
which the proxy relates. All written notices of revocation and other
communications relating to the revocation of proxies should be addressed as
follows: AMRESCO, INC., 700 North Pearl Street, Suite 2400, Dallas, Texas
75201, Attention: Secretary.
PROXY SOLICITATION EXPENSES
The Company will bear the cost of soliciting its proxies, including
the expenses of distributing its proxy materials. In addition to the use of the
mail, proxies may be solicited by personal interview, telephone or telegram by
directors, officers, employees and agents of the Company who will receive no
additional compensation for doing so. The Company will reimburse brokers,
custodians, nominees and fiduciaries for reasonable out-of-pocket expenses
incurred by them in forwarding proxy materials to the beneficial owners of the
Common Stock held by them as stockholders of record.
PROPOSAL I--ELECTION OF DIRECTORS
INFORMATION CONCERNING DIRECTORS
At the Annual Meeting, stockholders will be asked to elect three (3)
Class II directors to serve as members of the Company's Board of Directors for
terms of three (3) years or until their successors are duly elected and
qualified. The Board of Directors recommends that the three (3) nominees named
as Class II Directors below (Messrs. Cotton and Wahlen and Ms. Jorgensen) be
elected to serve as Class II directors. Each of the Class II nominees will
serve as a director for a three (3) year term ending at the annual meeting of
stockholders for 2001, or until his successor has been duly elected and
qualified. The persons named in the proxy intend to vote the proxies for the
election of the Class II nominees named below. If any nominee refuses or
becomes unable to serve as a director (which is not anticipated), the persons
named as proxies reserve full discretion to vote for such other person as may
be nominated.
The following table sets forth certain information, as of March 31,
1998, concerning each nominee for election as a Class II director and each
other director. All positions and offices with the Company and principal
positions with the Company's subsidiaries held by each such person are also
indicated. There are no family relationships between any of the directors, nor
between any of them and any executive officers of the Company. For information
concerning the directors' ownership of Common Stock, see "OWNERSHIP OF
SECURITIES."
The Class I and Class III directors are not being elected at this
time. Their terms will expire at the annual meeting of stockholders held in the
year indicated below.
Page 2
<PAGE> 5
<TABLE>
<CAPTION>
YEAR
POSITIONS WITH THE COMPANY AND PRINCIPAL DIRECTOR TERM BOARD
NAME (AGE) OCCUPATION DURING THE PAST FIVE (5) YEARS SINCE EXPIRES COMM.
---------- ----------------------------------------- ----- ------- -----
CLASS II DIRECTORS
<S> <C> <C> <C> <C>
James P. Cotton, Jr. Mr. Cotton serves as a director of the Company. 1993 1998 (1) (2)
(59) Mr. Cotton previously served as Chairman of the
Board of BEI Holdings, Ltd. (1986 to December
1993). Mr. Cotton also serves as Chairman of
the Board and Chief Executive Officer of USBA
Holdings, Ltd., a provider of products and
services to financial institutions (since
1990).
Edwin A. Wahlen, Jr. Mr. Wahlen serves as a director of the Company. 1996 1998 (1) (3)
(49) Mr. Wahlen also holds the following positions:
Founder and Managing Director of Cravey, Green
& Wahlen Incorporated, a private risk capital
investment firm (since 1985), its investment
management affiliate, CGW Southeast Management
Company (since 1991) and its affiliates, CGW
Southeast I, Inc. (the general partner of CGW
Southeast Partners I, L.P.) and CGW Southeast
II, Inc. (the general partner of CGW Southeast
Partners II, L.P.) (since 1991); and Director
of Cameron Ashley Building Products, Inc., a
national distributor of home building products
(since 1996).
Amy J. Jorgensen Ms. Jorgensen serves as a director of the 1995 1998 (2) (4)
(44) Company. Ms. Jorgensen also serves as Managing
Director of Greenbriar Associates LLC, which
provides advice and executes transactions
relating to real estate assets and companies
(since 1995); Ms. Jorgensen previously served
as President of the Jorgensen Company, a
consultant for real estate strategy and finance
(April 1992 to September 1995).
</TABLE>
Page 3
<PAGE> 6
<TABLE>
<CAPTION>
YEAR
POSITIONS WITH THE COMPANY AND PRINCIPAL DIRECTOR TERM BOARD
NAME (AGE) OCCUPATION DURING THE PAST FIVE (5) YEARS SINCE EXPIRES COMM.
---------- ----------------------------------------- ----- ------- -----
CLASS I DIRECTORS
<S> <C> <C> <C> <C>
Robert L. Adair III Mr. Adair serves as a director, President and 1993 2000
(54) Chief Operating Officer (since December 1993)
of the Company. Mr. Adair previously served as
Executive Vice President and director of BEI
Holdings, Ltd. (1989 to December 1993).
Sidney E. Harris Mr. Harris serves as a director of the Company. 1998 2000
(48) Mr. Harris is Dean, College of Business
Administration, at Georgia State University
(since July 1997). Mr. Harris previously served
as Dean of the Drucker Center (September 1991
to June 1996) and Professor of Management (July
1987 to June 1997) at the Drucker Center. Mr.
Harris also holds the following positions:
Director of The ServiceMaster Company (since
December 1994); Director of Transamerica
Investors, Inc., a subsidiary of Transamerica
Corporation (since August 1995); Member of the
Board of Governors of the Peter F. Drucker
Foundation for Nonprofit Management (since May
1991); and Member of the Board of Trustees of
Menlo College in Atherton, California (since
July 1994).
Bruce W. Schnitzer Mr. Schnitzer serves as a director of the 1993 2000 (2) (4)
(53) Company. Mr. Schnitzer previously served as
Vice Chairman of the Board of BEI Holdings,
Ltd. (1986 to December 1993). Mr. Schnitzer
also serves as Chairman of Wand Partners Inc.,
an investment advisory company (since 1987);
Director of Penncorp Financial Group, Inc.
(since 1990); Director of Chartwell Re
Corporation (since 1992); Director of Nestor,
Inc. (since 1994); and Chairman of New London
Capital PLC (since 1993).
</TABLE>
Page 4
<PAGE> 7
<TABLE>
<CAPTION>
YEAR
POSITIONS WITH THE COMPANY AND PRINCIPAL DIRECTOR TERM BOARD
NAME (AGE) OCCUPATION DURING THE PAST FIVE (5) YEARS SINCE EXPIRES COMM.
---------- ----------------------------------------- ----- ------- -----
CLASS III DIRECTORS
<S> <C> <C> <C> <C>
Richard L. Cravey Mr. Cravey serves as a director of the Company. 1993 1999 (1) (3)
(53) Mr. Cravey previously served in the following
positions: Chairman of the Board and Chief
Executive Officer of the Company (December 1993
to May 1994) and Chairman of the Board of
AMRESCO Holdings, Inc. (1992 to December 1993).
Mr. Cravey also holds the following positions:
Founder and Managing Director of Cravey, Green
& Wahlen Incorporated, a private risk capital
investment firm (since 1985), its investment
management affiliate, CGW Southeast Management
Company (since 1991) and its affiliates, CGW
Southeast I, Inc. (the general partner of CGW
Southeast Partners I, L.P.) and CGW Southeast
II, Inc. (the general partner of CGW Southeast
Partners II, L.P.) (since 1991); and Director
of Cameron Ashley Building Products, Inc., a
national distributor of home building products
(since 1994).
Gerald E. Eickhoff Mr. Eickhoff serves as a director of the 1993 1999 (1) (3)
(51) Company. Mr. Eickhoff also is a private
investor (since December 1993). He previously
served as President, Chief Executive Officer
and director of BEI Holdings, Ltd. (1986 to
December 1993).
Robert H. Lutz, Jr. Mr. Lutz serves as Chairman of the Board and 1994 1999 (1)
(48) Chief Executive Officer of the Company (since
May 1994). Mr. Lutz previously served as
President of Allegiance Realty, a real estate
management company (November 1991 to May 1994).
Mr. Lutz is also a director of Bristol Hotel
Company (since 1995).
</TABLE>
- -----------------
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
(4) Member of the Stock Option and Bonus Committee
Page 5
<PAGE> 8
BOARD OF DIRECTORS AND STANDING COMMITTEES
The business of the Company is managed under the direction of the
Board of Directors. The Board of Directors meets on a regularly scheduled basis
during its fiscal year to review significant developments affecting the Company
and to act upon matters requiring Board approval. It holds special meetings
when an important matter requires Board action between scheduled meetings. The
Board of Directors held five (5) meetings during 1997. All directors attended
at least 75% of the total number of meetings of the Board and committees on
which they served.
The Board of Directors has an Executive Committee, an Audit Committee,
a Compensation Committee and a Stock Option and Bonus Committee. Members of
these committees generally are elected annually at the regular meeting of the
Board of Directors immediately following the Annual Meeting.
The Executive Committee consists of Messrs. Cotton, Cravey (Chairman),
Eickhoff, Lutz and Wahlen. Subject to certain limitations specified by the
Company's Bylaws and the Delaware General Corporation Law, the Executive
Committee is authorized to exercise the powers of the Board of Directors when
the Board is not in session. The Executive Committee held four (4) meetings
during 1997.
The Audit Committee consists of Ms. Jorgensen and Messrs. Cotton and
Schnitzer (Chairman). The Audit Committee held two (2) meetings during 1997.
The functions of the Audit Committee include recommending to the Board of
Directors which firm of independent public accountants should be engaged by the
Company to perform the annual audit, consulting with the Company's independent
public accountants with regard to the audit plan, reviewing the presentation of
the Company's financial statements, reviewing and considering the observations
of the independent public accountants concerning internal control and
accounting matters during their annual audit, approving certain other types of
professional services rendered by the independent public accountants and
considering the possible effects of such services on the independence of such
public accountants.
The Compensation Committee consists of Messrs. Cravey, Eickhoff and
Wahlen. This committee held two (2) meetings during 1997. The functions of the
Compensation Committee include making recommendations to the Board regarding
compensation for executive officers of the Company and its subsidiaries.
The Stock Option and Bonus Committee consists of Ms. Jorgensen
(Chairperson) and Mr. Schnitzer. This committee held one (1) meeting during
1997. The function of the Stock Option and Bonus Committee is to determine,
subject to the restrictions set forth in the stock option and award plans, the
individuals to whom awards and options will be granted and the terms of such
awards and options.
The Company does not have a nominating or other standing committee.
The functions customarily attributable to a nominating committee are performed
by the Board of Directors as a whole.
Page 6
<PAGE> 9
OWNERSHIP OF SECURITIES
The following table sets forth certain information as of March 31,
1998 regarding the Common Stock owned by: (i) each person who is known by
management to be the beneficial owner of more than 5% of the Common Stock as of
such date; (ii) the Company's directors; (iii) the Company's Chief Executive
Officer and each of the Company's four (4) other most highly compensated
executive officers for fiscal 1997; and (iv) all directors and executive
officers of the Company as a group. Except as otherwise indicated, all shares
shown in the table below are held with sole voting and investment power.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------------------------------------------------------ ---------- ----------
<S> <C> <C>
Dresdner RCM Global Investors LLC (1)
Four Embarcadero Center
San Francisco, California 94111 . . . . . . . . . . . . . . . 3,174,500 7.4
Robert L. Adair III . . . . . . . . . . . . . . . . . . . . . . . 371,538 (2) *
James P. Cotton, Jr. . . . . . . . . . . . . . . . . . . . . . . 386,636 (3) *
Richard L. Cravey . . . . . . . . . . . . . . . . . . . . . . . . 782,084 (4) 1.8
Gerald E. Eickhoff . . . . . . . . . . . . . . . . . . . . . . . 21,000 (5) *
Sidney E. Harris . . . . . . . . . . . . . . . . . . . . . . . . 3,000 (6) *
Amy J. Jorgensen . . . . . . . . . . . . . . . . . . . . . . . . 13,000 (7) *
Robert H. Lutz, Jr. . . . . . . . . . . . . . . . . . . . . . . . 369,205 (8) *
Bruce W. Schnitzer . . . . . . . . . . . . . . . . . . . . . . . 129,000 (9) *
Edwin A. Wahlen, Jr. . . . . . . . . . . . . . . . . . . . . . . 746,584(10) 1.7
Barry L. Edwards . . . . . . . . . . . . . . . . . . . . . . . . 284,546(11) *
Harold E. Holliday, Jr. . . . . . . . . . . . . . . . . . . . . . 74,898(12) *
Randolph E. Brown . . . . . . . . . . . . . . . . . . . . . . . . 87,139(13) *
Scott J. Reading . . . . . . . . . . . . . . . . . . . . . . . . 113,722(14) *
Douglas R. Urquhart . . . . . . . . . . . . . . . . . . . . . . . 361,143(15) *
All executive officers and directors as a group
(a total of 15 persons) . . . . . . . . . . . . . . . . . . . . 3,832,020(16) 8.7
- -----------------
</TABLE>
* Less than 1%
(1) Information included herein with respect to Dresdner RCM Global Investors
LLC is based solely on information obtained from a securities ownership
report prepared and filed with the Securities and Exchange Commission by
such stockholder.
(2) Includes options which were exercisable within sixty (60) days to
purchase 55,000 shares and 48,809 restricted shares with respect to which
he has voting rights.
(3) Includes options which were exercisable within sixty (60) days to
purchase 6,000 shares and 126,803 shares held in Mr. Cotton's IRA.
(4) Includes options which were exercisable within sixty (60) days to
purchase 6,000 shares, 3,000 restricted shares with respect to which he
has voting rights and an aggregate of 705,756 shares owned by CGW
Southeast I, Inc. and CGW Southeast II, Inc. as to which Mr. Cravey
serves as an officer. Mr. Cravey disclaims ownership of 470,503 of the
shares owned by such corporations.
Page 7
<PAGE> 10
(5) Includes options which were exercisable within sixty (60) days to
purchase 6,000 shares, 3,000 restricted shares with respect to which he
has voting rights and excludes 16,000 shares held by a charitable
foundation of which Mr. Eickhoff is an officer.
(6) Includes options which were exercisable within sixty (60) days to
purchase 3,000 shares.
(7) Includes options which were exercisable within sixty (60) days to
purchase 6,000 shares and 3,000 restricted shares with respect to which
he has voting rights.
(8) Includes options which were exercisable within sixty (60) days to
purchase 310,284 shares and 73,662 restricted shares with respect to
which he has voting rights.
(9) Includes options which were exercisable within sixty (60) days to
purchase 116,000 shares and 3,000 restricted shares with respect to which
he has voting rights.
(10) Includes options which were exercisable within sixty (60) days to
purchase 6,000 shares, 3,000 restricted shares with respect to which he
has voting rights and an aggregate of 705,756 shares owned by CGW
Southeast I, Inc., and CGW Southeast II, Inc. as to which Mr. Wahlen
serves as an officer. Mr Wahlen disclaims ownership of 470,503 of the
shares owned by such corporations.
(11) Includes options which were exercisable within sixty (60) days to
purchase 179,396 shares and 38,554 restricted shares with respect to
which he has voting rights.
(12) Includes options which were exercisable within sixty (60) days to
purchase 50,000 shares and 17,055 restricted shares with respect to which
he has voting rights.
(13) Includes options which were exercisable within sixty (60) days to
purchase 23,432 shares and 10,000 restricted shares with respect to which
he has voting rights.
(14) Includes options which were exercisable within sixty (60) days to
purchase 61,015 shares and 35,374 restricted shares with respect to which
he has voting rights.
(15) Includes options which were exercisable within sixty (60) days to
purchase 204,493 shares, 10,000 restricted shares with respect to which
he has voting rights and 1,050 shares held in Mr. Urquhart's IRA.
(16) Includes options which were exercisable within sixty (60) days to
purchase 1,107,715 shares and 259,454 restricted shares with respect to
which they have voting rights.
Page 8
<PAGE> 11
MANAGEMENT AND REMUNERATION
EXECUTIVE OFFICERS
Set forth below are the names and ages of all executive officers of
the Company as of March 31, 1998. All positions and offices with the Company
and principal positions with the Company's subsidiaries held by each such
person are also indicated. There are no family relationships between any such
officers or between any such officers and any directors. Officers generally are
elected annually for one (1) year terms or until their successors are elected
and qualified. All executive officers are United States citizens.
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY AND PRINCIPAL
NAME (AGE) OCCUPATION DURING THE PAST FIVE (5) YEARS
---------- -----------------------------------------
<S> <C>
Robert H. Lutz, Jr.* Chairman of the Board and Chief Executive Officer of the Company.
(48)
Robert L. Adair III* President and Chief Operating Officer of the Company.
(54)
Barry L. Edwards Mr. Edwards serves as Executive Vice President and Chief Financial Officer
(50) of the Company (since November 1994). Mr. Edwards previously served as Vice
President and Treasurer of Liberty Corporation, an insurance holding
company (1979 to November 1994).
L. Keith Blackwell Mr. Blackwell serves as Senior Vice President (since February 1998),
(57) General Counsel and Secretary (since January 1994) of the Company and
previously served as Vice President of the Company (February 1996 to
February 1998) and General Counsel and Secretary of AMRESCO Holdings, Inc.
(December 1993). Mr. Blackwell was previously an investor and consultant
(May 1992 to December 1993).
Harold E. Holliday, Jr. Mr. Holliday serves as President - Commercial Mortgage Banking of the
(50) Company (since February 1996). He previously served as Chairman of the
Board and Chief Executive Officer of Holliday Fenoglio, Inc. (since August
1994). Mr. Holliday previously served as President of Holliday, Fenoglio,
Dockerty & Gibson, Inc., a mortgage banking company (for more than three
(3) years prior to August 1994).
Randolph E. Brown Mr. Brown serves as President - Commercial Finance Group of the Company
(37) (since February 1998) and previously served as a Senior Vice President or a
Vice President of the Company (April 1995 to February 1998) and as the
Director or Business Development Coordinator - Portfolio Acquisitions
(March 1993 to April 1995). Prior to joining the Company, Mr. Brown served
as Senior Vice President (Department Manager) of NationsBank (January 1991
to March 1993).
Scott J. Reading Mr. Reading serves as President of AMRESCO Residential Credit Corporation
(54) (since August 1995). Mr. Reading previously served as Managing Director of
Household Financial Services, Inc., a division of Household International,
Inc., a diversified financial services company (June 1991 to August 1995).
Douglas R. Urquhart Mr. Urquhart serves as President - Asset Management (since February 1998)
(52) and previously served as Senior Vice President - Asset Management (January
1994 to February 1998), President of BEI Real Estate Services, Inc. and BEI
Management, Inc. (December 1992 to January 1994); and President of BEI
Asset Managers, Inc. (January 1989 to January 1994).
</TABLE>
Page 9
<PAGE> 12
- -----------------
* Messrs. Lutz and Adair are directors of the Company. For additional
information concerning those individuals, see "ELECTION OF DIRECTORS -
Information Concerning Directors."
EXECUTIVE COMPENSATION SUMMARY
The following table provides certain summary information concerning
compensation paid by the Company and its subsidiaries during each of the last
three (3) fiscal years of the Company to or on behalf of Mr. Lutz, the
Company's Chief Executive Officer, and each of the four (4) other most highly
compensated executive officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------
SECURITIES
ANNUAL COMPENSATION RESTRICTED UNDERLYING
NAME AND PRINCIPAL ------------------- STOCK OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS AWARD(S)(1) (#) COMPENSATION
------------------------- ---- --------- ----------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Lutz, Jr. 1997 $650,016 $1,200,000 $441,722 180,000 $ 84,693 (2)
Chairman of the Board 1996 650,016 1,000,000 -- -- 110,173 (2)
and Chief Executive 1995 650,016 700,000 403,849 119,105 81,730 (2)
Officer
Robert L. Adair III 1997 415,992 600,000 282,722 120,000 56,045 (3)
President and Chief 1996 412,000 837,376 (4) -- -- 68,668 (3)
Operating Officer 1995 387,505 450,000 238,041 68,940 54,769 (3)
Barry L. Edwards 1997 284,448 550,000 182,055 100,000 39,336 (5)
Executive Vice 1996 265,233 500,000 -- -- 43,921 (5)
President and Chief 1995 255,642 300,000 161,471 99,245 26,750 (5)
Financial Officer
Scott J. Reading 1997 296,250 750,000 (7) 34,285 66,101 (7) 41,969 (8)
President - AMRESCO 1996 257,372 647,589 (7) 285,226 28,701 (7) 27,925 (8)
Residential Credit
Corp. (6) 1995 94,714 50,000 56,875 50,000 --
Harold E. Holliday, Jr. 1997 293,748 315,000 140,218 125,000 37,275 (10)
President - Commercial 1996 271,870 299,531 -- -- 24,631 (10)
Mortgage Banking (9) 1995 250,000 -- -- -- 19,309 (10)
</TABLE>
- -----------------
(1) Amounts shown in the table represent the fair market value of the
restricted stock on the date of grant. At December 31, 1997, Messrs.
Lutz, Adair, Edwards, Reading and Holliday had 50,662, 30,809, 20,554,
35,374 and 5,644 shares of restricted stock, respectively, and, based
upon the then stock price of $30.25 per share, such shares of restricted
stock had a value of $1,532,526, $931,972, $621,759, $1,070,064 and
$170,731, respectively. For all restricted stock granted as of the date
of this Proxy Statement, twenty percent (20%) of such shares vest,
provided such individuals are then employed by the Company, on the first,
second, third, fourth and fifth anniversary of the date of grant. In the
event that dividends are paid on the Common Stock, such dividends would
be payable on such shares of restricted stock.
(2) For 1997, consists of $4,412 paid by the Company in connection with the
employees purchase of shares of Common Stock under the AMRESCO, INC.
Employee Stock Purchase Plan (the "Stock Purchase Plan") and $80,281
contributed by the Company to the employees 401(k) and retirement savings
programs under the AMRESCO, INC. Retirement Savings and Profit Sharing
Plan and Trust (the "Retirement Savings Plan"). For 1996, consists of
$4,507 under the Stock Purchase Plan and $105,666 under the Retirement
Savings Plan. For 1995, consists of $3,154 under the Stock Purchase Plan
and $78,576 under the Retirement Savings Plan.
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<PAGE> 13
(3) For 1997, consists of $4,013 under the Stock Purchase Plan and $52,032
under the Retirement Savings Plan. For 1996, consists of $2,181 under the
Stock Purchase Plan and $66,487 under the Retirement Savings Plan. For
1995, consists of $1,412 under the Stock Purchase Plan and $53,357 under
the Retirement Savings Plan.
(4) Includes a $287,376 one-time payment received by Mr. Adair pursuant to
the Retention Bonus Plan adopted in connection with the merger of AMRESCO
Holdings, Inc. and the Company which was effective December 31, 1993, to
secure the continued performance of certain executives through December
31, 1996.
(5) For 1997, consists of $3,183 under the Stock Purchase Plan and $36,153
under the Retirement Savings Plan. For 1996, consists of $1,077 under the
Stock Purchase Plan and $42,844 under the Retirement Savings Plan. For
1995, consists of $697 under the Stock Purchase Plan and $26,053 under
the Retirement Savings Plan.
(6) Mr. Reading became President of AMRESCO Residential Credit Corporation in
August 1995.
(7) Mr. Reading received a cash bonus, restricted stock and stock options
under the ARCC Incentive Compensation Program for 1997 and 1996. The ARCC
Incentive Bonus Program, which is available to key executives and staff
of AMRESCO Residential Credit Corporation, creates a bonus pool equal to
twenty percent (20%) of the pre-tax profit of AMRESCO Residential Credit
Corporation after certain allocations and charges.
(8) For 1997, consists of $4,412 under the Stock Purchase Plan and $37,557
under the Retirement Savings Plan. For 1996, consists of $2,271 under the
Stock Purchase Plan and $25,654 under the Retirement Savings Plan.
(9) Mr. Holliday became President of Commercial Mortgage Banking in February
1996.
(10) Consists of amounts contributed or paid under the Retirement Savings Plan
for the years 1997, 1996 and 1995, respectively.
OPTION GRANTS DURING 1997 FISCAL YEAR
The following table provides information related to options granted to
the named executive officers during fiscal 1997.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (1)
--------------------------------------------------------------------------------------- ---------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS/SARS EMPLOYEES IN PRICE
NAME GRANTED (#) (2) FISCAL YEAR ($/SH) (3) EXPIRATION DATE 5% ($) 10% ($)
- --------------------- ---------------- ------------ ----------- --------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert H. Lutz, Jr. 180,000 (4) 7.3 $19.875 February 25, 2007 $2,249,82 $5,701,680
Robert L. Adair III 120,000 (4) 4.9 $19.875 February 25, 2007 1,499,880 3,801,520
Barry L. Edwards . 100,000 (4) 4.1 $19.875 February 25, 2007 1,249,900 3,167,600
Scott J. Reading . 66,101 (4) 2.7 $19.875 February 25, 2007 826,196 2,093,815
Harold E. Holliday, Jr 125,000 (4) 5.1 $19.875 February 25, 2007 1,562,375 3,959,500
</TABLE>
- ------------------
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately
prior to the expiration of their term, assuming the specified compounded
rates of appreciation on the Company's Common Stock over the term of the
options. These numbers do not take into account provisions of certain
options providing for termination of the option following termination of
employment, nontransferability or vesting over periods of up to four
years.
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<PAGE> 14
(2) Reflects options to acquire shares of Common Stock. The Company did not
grant stock appreciation rights.
(3) The option exercise price may be paid in shares of Common Stock owned by
the executive officer, in cash, or in any other form of valid
consideration or a combination of any of the foregoing, as determined by
the Stock Option and Bonus Committee in its discretion.
(4) Options become exercisable with respect to 20% of the shares covered
thereby on each of February 25, 1997, 1998, 1999, 2000 and 2001. In the
event of a Change of Control of the Company, however, any unexercisable
portion of the options will become immediately exercisable. The exercise
price was equal to the fair market value of the Common Stock on the date
of grant.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table shows for the Company's Chief Executive Officer and
the other executive officers named in the Summary Compensation Table, the
number of shares acquired upon the exercise of options during 1997, the amount
realized upon such exercise, the number of shares covered by both exercisable
and non-exercisable stock options as of December 31, 1997 and the values for
"in-the-money" options, based on the positive spread between the exercise price
of any such existing stock options and the year-end price of the Common Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS AT DECEMBER 31, MONEY OPTIONS AT DECEMBER 31,
ACQUIRED ON 1997 1997 (2)
EXERCISE OF VALUE ---------------------------- -----------------------------
NAME OPTIONS REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------ ------------ ------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Lutz, Jr. 75,000 $1,750,781 200,976 148,129 $5,376,108 $3,962,450
Robert L. Adair III 27,576 581,589 24,000 123,576 249,000 1,577,589
Barry L. Edwards 5,000 26,562 154,547 139,698 3,009,411 2,052,940
Scott J. Reading -- -- 69,661 46,440 977,733 651,815
Harold E. Holliday, Jr. -- -- 25,000 100,000 259,375 1,037,500
</TABLE>
- -------------------
(1) Represents the difference between the aggregate exercise price and the
aggregate value, based upon the stock price on the date of exercise.
(2) Aggregate market value (based on December 31, 1997 stock price of $30.25
per share) of the shares covered by the options, less aggregate exercise
price.
EMPLOYMENT AGREEMENT WITH CHIEF EXECUTIVE OFFICER
The Board of Directors appointed Mr. Lutz as the Chief Executive Officer
of the Company, effective May 31, 1994, pursuant to a three (3) year employment
agreement. At its meeting held on May 28, 1997, the Board of Directors extended
Mr. Lutz's employment agreement for an additional 3 year period. The agreement
provides that Mr. Lutz will receive an annual salary of at least $650,000 and
be eligible to participate in the Company's bonus plans in effect from time to
time. If the Company terminates Mr. Lutz's employment without cause, or if he
terminates his employment because of a breach by the Company, he will be
entitled to continue to receive his base salary for the remainder of the term
of the agreement. Mr. Lutz has the right to terminate his employment for any
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<PAGE> 15
reason upon thirty (30) days notice to the Company. The Company may terminate
Mr. Lutz' employment for "cause" with no further obligations. "Cause" is
defined in the employment agreement as (i) gross neglect of duties thereunder,
(ii) willful misconduct or purposeful actions which directly result in material
injury to the Company or (iii) indictment for a felony. Mr. Lutz will be
subject to certain restrictions on his ability to compete with or solicit
clients from the Company for one (1) year from the date of termination of his
employment by the Company for cause or if he terminates his employment for any
reason other than a breach by the Company. No stock options or other stock
awards were awarded to Mr. Lutz in connection with the extension of his
employment agreement.
CHANGE OF CONTROL ARRANGEMENTS
On May 29, 1996, the Company entered into agreements with Robert H. Lutz, Jr.,
Robert L. Adair III, Barry L. Edwards and certain other officers of the Company
(each such agreement being sometimes referred to herein as a "Severance
Compensation Agreement"), which agreements provide for compensation arrangements
relating to the occurrence of a change of control of the Company. The term of
each Severance Compensation Agreement expires April 30, 2001, subject to
automatic extension from year to year unless (i) there has been no change of
control and (ii) no fewer than thirty (30) days prior to April 30, 2001 or the
appropriate April 30 thereafter, the Company has given a notice that it does not
wish to extend the Severance Compensation Agreement. The Severance Compensation
Agreement requires the Company to pay to the officer, if his employment is
terminated within a two (2) year period following a change of control (other
than by reason of disability, retirement, voluntary resignation or by the
Company for cause), a sum equal to three (3) times the officer's annual
compensation for the calendar year immediately preceding the calendar year in
which the termination of employment occurs, or such officer's total compensation
for the three (3) calendar years ended immediately preceding the calendar year
in which the termination occurs, whichever is greater. The Severance
Compensation Agreement also provides that (i) all stock options then held by the
officer will immediately become exercisable and the officer will become 100%
vested in all shares of restricted stock held by or for benefit of the officer
notwithstanding any provision to the contrary in any stock option agreement or
restricted stock agreement, (ii) the officer's right to exercise any previously
unexercised options under any stock option agreement will not terminate until
the latest date on which the option granted under such agreement would expire
under the terms of such agreement but for the officer's termination of
employment and (iii) the Company will continue to provide the officer with
medical/dental and related benefits and long-term disability benefits equal to
the benefits in effect for the officer at the time of the change of control, at
the same cost to the officer as the cost, if any, charged to the officer for
those benefits prior to the termination of employment. The Company is required
to provide such medical/dental and related benefits for the period from the
officer's termination of employment until the earlier of three (3) years from
the date of termination of employment or the date the officer obtains employment
which provides him with comparable medical/dental and related benefits and/or
long term disability benefits.
On March 20, 1997, the Company entered into letter agreements with Harold
E. Holliday, Jr. and Scott J. Reading in which it agreed that in the event it
becomes imminent that there will be a change of control of the Company, such
persons would be granted a three (3) year employment agreement providing for a
base salary equal to such person's then base salary, employee benefits
comparable to those being provided to other senior management, a yearly bonus
determined in accordance with the formula and guidelines then applicable to
such person and participation in then existing stock option and restricted
stock plans then being provided for other senior management. Further, such
letter agreement provides that in the event such person's employment is
terminated after a change of control of the Company, such person will receive a
lump sum payment equal to the sum of the base salary payable through the
remaining term of the agreement and the aggregate amount of yearly cash bonuses
payable through the remaining term of the agreement, assuming the yearly cash
bonus would be equal to the most recent yearly cash bonus paid to such person.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executive officers generally
are made by the Compensation Committee of the Board of Directors. During 1997,
John J. McDonough, Richard L. Cravey, Gerald E. Eickhoff and Edwin A. Wahlen,
Jr. served on the Compensation Committee. Mr. McDonough resigned his position
on March 4, 1998. No member of the Compensation Committee was employed by the
Company during 1997. All decisions by the Compensation Committee relating to
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<PAGE> 16
the compensation of the Company's executive officers are reviewed by the full
Board of Directors, except for decisions about awards under the Company's stock
option and award plans which are made solely by the Stock Option and Bonus
Committee.
The following addresses the Company's executive officer compensation
policies for 1997.
General. The Company's compensation program is designed to enable the
Company to attract, motivate and retain high quality senior management by
providing a competitive total compensation opportunity based on performance. To
this end, the Company provides for competitive base salaries, annual variable
performance incentives payable in cash for the achievement of financial
performance goals and long-term stock-based incentives which strengthen the
mutuality of interests between senior management and the Company's
stockholders.
The Company's stock option and award and incentive compensation plans are
intended to qualify as "performance based" compensation under Section 162(m) of
the Code, which compensation is not subject to the $1,000,000 cap.
Nevertheless, not all compensation that will be received by executive officers
of the Company will qualify as "performance based" compensation. For example,
base salary is never performance based. As a result, it is possible that the
value of salary, such restricted stock awards and other non-qualifying
compensation, could cause an executive officer's compensation to exceed the
$1,000,000 cap on deductibility in any particular year.
Salaries. Mr. Lutz's salary through May 2000 is provided for in an
employment agreement that was negotiated on an arms-length basis between the
Company and him prior to his employment. The Company utilized the services of a
nationally-recognized executive recruiting firm to assist in the identification
and engagement of Mr. Lutz. The compensation package provided for in Mr. Lutz's
employment agreement reflects the advice of such recruiting firm with respect to
the compensation package required to secure the services of an individual with
the background and experience of Mr. Lutz, as well as the compensation paid to
top executives of other public companies. The executive recruiting firm that
assisted in the hiring of Mr. Lutz did not identify in its report the public
companies used in its analysis. The material terms of Mr. Lutz's employment
agreement is described above under the caption "Employment Agreement with Chief
Executive Officer."
Salaries of other executive officers of the Company were determined based
upon the level of responsibility, time with the Company, contribution and
performance of the particular executive officer. Evaluation of these factors
was subjective, and no fixed or relative weights were assigned to the factors
considered.
Bonus Compensation. Through the use of annual bonuses, the Company seeks
to effectively tie executive compensation to Company performance. The
Compensation Committee determined during 1997 that bonuses would be paid to
Messrs. Robert H. Lutz, Jr., Robert L. Adair, III and Barry L. Edwards, based
on various factors, including: (i) the market price of the Common Stock at year
end; (ii) the attainment of the Company's annual earnings goals for 1997; and
(iii) the discretion of the Compensation Committee, provided that any such
bonus could not exceed four percent (4%) of the Company's pre-tax net income.
The Compensation Committee based the discretionary element of such bonuses on
the financial performance of the Company and the level of responsibility,
contribution and performance of the particular executive officer. The amounts
of the bonuses actually paid to Messrs. Lutz, Adair and Edwards are reflected
in the Summary Compensation Table.
The compensation payable to Scott J. Reading and other officers and
employees of ARCC was supplemented by the ARCC Incentive Compensation Program.
The ARCC Incentive Compensation Program, which is available to key executives
and staff of AMRESCO Residential Credit Corporation, creates a bonus pool equal
to twenty percent (20%) of the pre-tax profit of AMRESCO Residential Credit
Corporation after certain allocations and charges.
For the remainder of the Company's executive officers, annual bonuses
were determined during 1997 in accordance with the Company's 1994 Incentive
Program, which was adopted in May 1994. Pursuant to this program, all exempt
employees, including executive officers, were eligible to participate in a
bonus pool which was funded only if the Company met certain earnings targets.
Each participant's individual bonus depended on the Company's evaluation of the
individual's performance. All of the executive officers listed in the Summary
Compensation Table received a bonus pursuant to this program with respect to
services rendered during 1997.
Page 14
<PAGE> 17
Option and Restricted Stock Grants. The Company uses grants of stock
options and restricted stock to its key employees and executive officers to
closely align the interests of such employees and officers with the interests
of its stockholders. The Company's stock option and award plans are
administered by the Stock Option and Bonus Committee, which determines the
persons eligible, the number of shares subject to each grant, the exercise
price of options thereof and the other terms and conditions of the option or
restricted stock.
Options granted under the stock option and award plans generally have an
exercise price equal to 100% of the market price of the Common Stock on the
date that the option is granted, and the term of any option granted cannot
exceed ten (10) years. Option grants typically vest over a four (4) year
period, subject to continued employment. Beginning in 1997, it was determined
that eligible persons would be considered for option grants and restricted
stock awards every third year and that, subject to the discretion of the Stock
Option and Bonus Committee, such option and restricted stock grants would
generally be sufficient to provide appropriate incentives to the recipient for
a three (3) year period. Restricted stock which has been granted vests over a
period of five (5) years, provided the grantee is an employee on the date of
vesting. Generally only key employees (including executive officers) of the
Company and its subsidiaries are eligible to receive grants of option or
restricted stock under the stock option award plans.
THE COMPENSATION COMMITTEE
Richard L. Cravey
Gerald E. Eickhoff
Edwin A. Wahlen, Jr.
DIRECTOR COMPENSATION
During 1997, each of the directors who was not an employee of the Company
was granted NQSO's covering 15,000 shares of Common Stock under the AMRESCO,
INC. 1997 Stock Option and Award Plan (the "1997 Stock Plan"). Under the 1997
Stock Plan, each non-employee director will receive an automatic grant of
NQSO's to purchase 15,000 shares of Common Stock every three (3) years.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, the Compensation Committee consisted of Richard L.
Cravey, Gerald E. Eickhoff, John J. McDonough and Edwin A. Wahlen, Jr. Mr.
McDonough resigned his position on March 4, 1998. Mr. Cravey served as Chairman
of the Board and Chief Executive Officer of the Company from December 1993 to
May 1994. Mr. Eickhoff served as President and Chief Executive Officer of BEI
Holdings, Ltd., a predecessor to the Company.
The Company loaned $259,312 to Mr. Eickhoff on October 31, 1990 in
connection with the termination of the BEI Wealth-Op Plan, a deferred
compensation arrangement formerly maintained by the Company for the benefit of
Mr. Eickhoff and another officer. In connection with the termination of such
arrangement, the life insurance policies maintained by the Company in order to
fund its obligations under such plan were surrendered, and the cash value
thereof ($259,312) was paid to the Company. Such cash amounts were then loaned
by the Company to Mr. Eickhoff for a five (5) year term at an interest rate of
8.5% per annum. Prior to maturity, the loan was renewed and extended on a
year-to-year basis. During 1991, an additional $25,000 was loaned to Mr.
Eickhoff on the same terms.
The Company assists Mr. Eickhoff in obtaining and maintaining a split
dollar life insurance policy. This policy provides aggregate death benefits of
approximately $11,700,000 to Mr. Eickhoff's beneficiaries.
The Company has agreed to pay the entire premium for Mr. Eickhoff's
policy through the premium due for December 2007, regardless of his employment
status with the Company. The premiums during 1997 for Mr. Eickhoff's policy
were $164,128. A portion of each such premium payment is treated as taxable
income to Mr. Eickhoff and the remainder is treated as a loan. The outstanding
balance of the loan as of March 31, 1998 (after deduction of the cash surrender
value) was approximately $308,000. In addition, any payment of the death
benefits described above would be applied to the repayment of such loan.
Page 15
<PAGE> 18
FIVE-YEAR STOCKHOLDER RETURN COMPARISON
Set forth below is a line graph comparing, for the five (5)-year period
ending December 31, 1997, the yearly percentage change in the cumulative total
stockholder return on the Common Stock with that of (i) all U.S. companies
quoted on NASDAQ and (ii) financial companies quoted on NASDAQ. The stock price
performance shown on the graph below is not necessarily indicative of future
price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG AMRESCO, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ FINANCIAL INDEX
<TABLE>
<CAPTION>
12/92 12/93 12/94 12/95 12/96 12/97
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
AMRESCO, INC. $100 $186 $178 $341 $716 $810
NASDAQ STOCK MARKET (U.S.) $100 $115 $112 $159 $195 $240
NASDAQ FINANCIAL $100 $116 $117 $170 $218 $334
</TABLE>
$100 INVESTED ON 12/31/92 IN STOCK OR INDEX
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
Page 16
<PAGE> 19
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company loaned $213,941 to Mr. Cotton on October 31, 1990 in
connection with the termination of the BEI Wealth-Op Plan, a deferred
compensation arrangement formerly maintained by the Company for the benefit of
Mr. Cotton and another officer. In connection with the termination of such
agreement, the life insurance policies maintained by the Company in order to
fund its obligations under such plan were surrendered, and the cash value
thereof ($213,941) was paid to the Company. Such cash amounts were then loaned
by the Company to Mr. Cotton for a five (5) year term at an interest rate of
8.54%. Prior to maturity, the loan was renewed and extended on a year-to-year
basis.
The Company assists Mr. Cotton in obtaining and maintaining a split
dollar life insurance policy. This policy provides aggregate death benefits of
approximately $12,700,000 to Mr. Cotton's beneficiaries. The Company has agreed
to pay the entire premium for Mr. Cotton's policy through the premium due for
October 2006, regardless of his employment status with the Company. The
premiums during 1997 for Mr. Cotton's policy were $294,884. A portion of each
such premium payment is treated as taxable income to Mr. Cotton and the
remainder is treated as a loan. The outstanding balance of the loan as of March
31, 1998 (after deduction of the cash surrender value) was approximately
$256,000. In addition, any payment of the death benefits described above would
be applied to the repayment of such loan.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission (the
"SEC"). Such persons 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 the copies of such forms received by it
with respect to fiscal 1997, or written representations from certain reporting
persons, the Company believes that all filing requirements applicable to its
directors, officers and persons owning more than 10% of the Company's equity
securities have been complied with, except that Gerald E. Eickhoff, Bruce W.
Schnitzer, Barry L. Edwards, Harold E. Holliday, Jr. and Scott J. Reading,
directors or executive officers of the Company, each filed one late report
covering separate transactions.
PROPOSAL II--APPOINTMENT OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors
has approved the appointment of Deloitte & Touche LLP, as independent auditors
for the year ending December 31, 1998. Deloitte & Touche LLP has served as the
Company's independent auditors since March 15, 1994. Approval of the
appointment by the stockholders will require the affirmative vote of a majority
of shares present in person or by proxy at the Annual Meeting.
A representative of Deloitte & Touche LLP is expected to be present at
the Annual Meeting. Such representative will be given the opportunity to make a
statement if he or she so desires, and will be available to respond to
appropriate questions.
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OTHER BUSINESS
Management does not presently know of any matters which may be
presented for action at the Annual Meeting other than those set forth herein.
However, if any other matters properly come before the Annual Meeting, it is
the intention of the persons named in the proxies solicited by management to
exercise their discretionary authority to vote the shares represented by all
effective proxies on such matters in accordance with their best judgment.
If you do not expect to be personally present at the Annual Meeting,
please fill in, date and sign the enclosed proxy card and return it promptly in
the enclosed return envelope which requires no additional postage if mailed in
the United States.
DATE FOR RECEIPT OF STOCKHOLDERS PROPOSAL
Any proposal which a stockholder may wish to have included in the
Company's Proxy Statement for the Annual Meeting of Stockholders to be held in
1999, in accordance with Rule 14a-8 of the proxy rules of the Securities and
Exchange Commission, must be received by the Company by December 18, 1998.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING,
FINANCIAL STATEMENTS AND SCHEDULES, BUT NOT INCLUDING EXHIBITS, WILL BE
FURNISHED AT NO CHARGE TO EACH PERSON TO WHOM A PROXY STATEMENT IS DELIVERED
UPON RECEIPT OF A WRITTEN OR ORAL REQUEST OF SUCH PERSON ADDRESSED TO AMRESCO,
INC., ATTN: TOM ANDRUS, VICE PRESIDENT, 700 NORTH PEARL STREET, SUITE 2400,
DALLAS, TEXAS 75201 (TELEPHONE: (214) 953-7700).
By Order of the Board of Directors
/s/ L. KEITH BLACKWELL
L. Keith Blackwell
Senior Vice President, General Counsel
and Secretary
April 17, 1998
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<PAGE> 21
- -------------------------------------------------------------------------------
AMRESCO, INC.
700 NORTH PEARL STREET, SUITE 2400
DALLAS, TEXAS 75201
P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert H. Lutz, Jr., Robert L. Adair III,
and L. Keith Blackwell as Proxies, each with the power to appoint his or her
substitute, and hereby authorizes them to represent and to vote, as designated
below, all the shares of common stock of AMRESCO, INC. held of record by the
undersigned on March 23, 1998 at the annual meeting of stockholders to be held
on May 18, 1998 or any adjournment thereof.
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 PROPOSALS 1 AND 2.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF
THE PROPOSALS. PLEASE REVIEW CAREFULLY THE PROXY STATEMENT DELIVERED WITH THE
PROXY.
(Continued and to be dated and signed on the reverse side.)
AMRESCO, INC.
P. O. BOX 11221
NEW YORK, N.Y. 10203-0221
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HARDING & HEAL, INC. PROOF #1 3/31/98 1310 CUST. THE BANK OF NEW YORK FILE NAME 64319 AMRESCO PROXY
ATTN: JAMES DIMINO
- ---------------------------------------------------------------------------------------------------------------------------------
[ ]
1. Election of Directors FOR all nominees [X] WITHHOLD AUTHORITY to vote [X] *EXCEPTIONS [X]
listed below for all nominees listed below
Nominees: James P. Cotton, Jr., Edwin a. Whalen, Jr. and Amy J. Jorgensen as directors for a term of three years and
until their successors are elected and qualified. (INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
MARK THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions
---------------------------------------------------------------------------------------------------------------
2. Proposal to ratify the appointment of Deloitte & The Proxies are authorized to vote, in their discretion, upon
Touche LLP as the independent auditors of the such other business as may properly come before the meeting.
of the Company to audit the accounts of the Company
for the fiscal year ended December 31, 1998.
FOR [X] AGAINST [X] ABSTAIN [X]
Change of Address and [X]
or Comments Mark Here
Please sign exactly as name appears below. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
If a corporation, please sign in full corporation
name by the President or other authorized officer. If
a partnership, please sign in partnership name by an
authorized person.
Dated: ________________________________________, 1998
----------------------------------------------------
Signature
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Signature, if held jointly
VOTE MUST BE INDICATED (X) IN BLACK OR BLUE INK. [ ]
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
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