SCHEDULE 14A
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
HMG/COURTLAND PROPERTIES, 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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
....................................................................
[ X] 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>
HMG/COURTLAND PROPERTIES, INC.
2701 South Bayshore Drive
Coconut Grove, Florida 33133
______________________________
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 4, 1995
______________________________
July 10, 1995
TO THE SHAREHOLDERS:
The annual meeting of shareholders of HMG/Courtland Properties, Inc.
("Company") will be held at 10:30 A.M., on August 4, 1995 at the Grove Isle Club
and Resort, 4 Grove Isle Drive, Coconut Grove, Florida for the following
purposes:
1. To elect a Board of Directors;
2. To act upon the renewal of the Advisory Agreement between the Company
and Courtland Group, Inc.; and
3. To transact such other business as may properly come before the meeting.
The record date for determining shareholders entitled to notice of and
to vote at the annual meeting is June 23, 1995.
Enclosed is a copy of the Company's Annual Report for the fiscal year
ended December 31, 1994.
It is important, whether or not you plan to attend the meeting in
person, that you fill in, sign and date the accompanying proxy and return it
promptly in the postage prepaid envelope which is enclosed for your convenience.
The signing and mailing of the proxy will not affect your right to vote your
shares in person if you attend the meeting and desire to do so.
By Order of the Board of Directors
Lawrence I. Rothstein
Secretary
<PAGE>
PROXY STATEMENT
of
HMG/COURTLAND PROPERTIES, INC.
The accompanying proxy is solicited by the Board of Directors for use at
the annual meeting of shareholders and is being mailed with this Proxy Statement
to all shareholders on July 10, 1995. If a proxy card is properly signed and is
not revoked by the shareholder, the shares of common stock of the Company
("Shares") represented thereby will be voted at the meeting in accordance with
the instructions, if any, of the shareholder. If no instructions are given, they
will be voted for the election of Directors nominated by the Board of Directors
and for approval of the renewal of the Advisory Agreement between the Company
and Courtland Group, Inc. ("Advisor"). Any shareholder may revoke his proxy at
any time before it is voted by giving written notice of revocation to the
Secretary of the Company.
Holders of Shares of record at the close of business on June 23, 1995
are entitled to notice of and to vote at the meeting. On that date, there were
1,166,835 Shares outstanding. Each Share is entitled to one vote on all business
of the meeting. The holders of a majority of the outstanding Shares, present in
person or represented by proxy, will constitute a quorum at the meeting.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions are
counted in tabulations of the votes cast on proposals presented to stockholders,
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved. As of May 31, 1995, Transco Realty Trust
("Transco"), 2701 South Bayshore Drive, Coconut Grove, Florida 33133, was the
beneficial owner of 477,300 Shares, or 41% of the outstanding Shares. As of May
31, 1995, Maurice A. Halperin and Barry S. Halperin, 441 South Federal Highway,
Deerfield Beach, Florida 33441, were the beneficial owners of 177,100 Shares, or
15% of the outstanding Shares. As of May 31, 1995, Tweedy, Browne Company L.P.,
a registered investment advisor, TBK Partners L.P. and Vanderbilt Partners,
L.P., each with a business address of 52 Vanderbilt Avenue, New York, N.Y.
10017, may be deemed to be the beneficial owners of 71,400 Shares, or 6% of the
outstanding Shares. Beneficial ownership is based on sole voting and investment
power.
The Company has been advised by its officers and directors and their
affiliated shareholders, Transco and the Advisor, that they intend to vote for
the election of each of the nominees and for the approval of the renewal of the
Advisory Agreement. Such shareholders own in the aggregate 571,530 shares, or
49% of the outstanding Shares. As a result, each of the nominees is expected to
be elected as a director and the proposed renewal of the Advisory Agreement is
expected to be approved. As noted below, certain directors of the Company are
affiliated with principal shareholders of the Company and are principal
shareholders, directors and officers of the Advisor. See "Election of Directors"
below for information concerning holders who may be deemed to own beneficially
more than 5% of the outstanding shares.
<PAGE>2
ELECTION OF DIRECTORS
The entire Board of Directors will be elected at the annual meeting of
shareholders to serve until the next annual meeting of shareholders and until
the election and qualification of their successors. In the event any nominee
should not continue to be available for election, proxies may be voted for the
election of a substitute nominee or the Board of Directors may elect to reduce
the number of Directors. The Board of Directors has no reason to anticipate that
any nominee will not be available for election. All of the nominees, have been
elected previously by the shareholders.
An affirmative vote by the holders of a majority of the Shares present
in person or by proxy at the Annual Meeting of Shareholders is required for the
election of each Director.
Set forth below is certain information about each nominee for Director
and the Shares held by all Directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares Held as of May 31, 1995(1)
---------------------------------
Principal Occupation or Additional Shares in
Name, Age, Year Employment During the Shares Owned which the Nominee
First Became a Past Five Years Other by the Nominee has, or Participates
Director and Office than with the Company or Members of in, the Voting or Total Shares and
with the Company and Other Information His Family Investment Power(2) Percent of Class
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maurice Wiener Chairman of the Board 30,100(4) 531,830(3) 561,930(3),(4)
52-1974 and Chief Executive 44%
Chairman of Officer of the Advisor;
the Board of Executive Trustee,
Directors and Transco Realty Trust;
Chief Execu- Director, TGIF Texas,
tive Officer Inc.; Trustee, PRA Real
Estate Securities Fund
Lee Gray President, Treasurer and 53,000(4) 531,830(3) 584,830(3),(4)
64-1974 Director of the Advisor; 46%
President, Trustee and Treasurer,
Treasurer Transco Realty Trust;
and Director President and Director,
Chartcraft, Inc.;
Director, LCS Industries,
Inc.
<PAGE>3
<CAPTION>
Principal Occupation or Additional Shares in
Name, Age, Year Employment During the Shares Owned which the Nominee
First Became a Past Five Years Other by the Nominee has, or Participates
Director and Office than with the Company or Members of in, the Voting or Total Shares and
with the Company and Other Information His Family Investment Power(2) Percent of Class
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Walter G. Arader President, Arader, 11,600(4) 0 11,600(4)
74-1977 Herzig and Associates, *
Director Inc. (financial and mana-
gement consultants);
Director, The Pep Boys -
Manny, Moe & Jack;
Director, Unitel Video,
Inc.; Former Secretary of
Commerce, Commonwealth of
Pennsylvania
John B. Bailey Real estate consultant; 7,100(4) 0 7,100(4)
67-1971 Retired CEO, Landauer *
Director Associates, Inc. (real
estate consultants)
(1977-1988)
Harvey Comita President and Director of 5,000(4) 0 5,000(4)
64-1992 Pan-Optics, Inc. (1971-
Director 1991); Director of
Mediq,, Incorporated
(1981-1991); Trustee,
Transco Realty Trust
Gustav S. Eyssell Real estate consultant; 6,400(4) 54,530 60,930(4)
92-1971 Director of the Advisor 5%
Director
Norman A. Fieber Principal in Fieber 5,700(4) 0 5,700(4)
64-1985 Group; Principal, HMG- *
Director Fieber Associates;
Partner in Stonegate
Development Corp.;
Mallards Landing
Development
All 10 Directors and 143,900(4) 531,830 675,730(4)
Executive Officers as 53%
a Group
______________________
<FN>
* Less than one percent
(1) Unless otherwise indicated, beneficial ownership is based on sole voting
and investment power with respect to the Shares.
<PAGE>4
(2) Shares listed in this column represent Shares held by entities with which
the Directors or officers are associated. The Directors, officers and
members of their families have no ownership rights in the Shares listed in
this column. See note 3 below.
(3) This number includes the number of Shares held by Transco (477,300 Shares),
and the Advisor (54,530 shares). Of those Shares owned by Transco, 24,350
have been pledged to a brokerage firm pursuant to a margin agreement.
Several of the Directors of the Company are directors, trustees, officers or
shareholders of certain of those firms.
Mr. Wiener is the executive trustee and Mr. Gray is a trustee and treasurer
of Transco and they each hold 24% of its stock. They are also directors and
officers of the Advisor which owns 21% of Transco's stock. Mr. Wiener is
Chairman of the Board and a 36% shareholder and Mr. Gray and Mr. Eyssell are
directors and 36% and 14% shareholders, respectively, of the Advisor.
For information concerning relationships of certain directors and officers
of the Company to the Advisor, see "Renewal of Advisory Agreement -
Management of the Advisor."
As a result of these relationships, the persons named above may be deemed to
share investment power and voting power of Shares held by each firm with
which they are associated in conjunction with a number of other persons,
including in several cases persons who are neither directors nor officers of
the Company.
(4) This number includes options granted under the 1990 Stock Option Plan, none
of which have been exercised. These options have been granted to Mr. Wiener,
30,000; Mr. Gray, 25,000; 5,000 each to Mr. Arader, Mr. Bailey, Mr. Eyssell,
Mr. Fieber and Mr. Comita; and a total of 25,000 to three officers who are
not directors. Reference is made to "Compensation of Directors and Executive
Officers and Other Transactions" for further information about the 1990
Stock Option Plan.
</FN>
</TABLE>
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held 3 meetings during 1994. During this period
all Directors of the Company attended at least 75% of the total number of
meetings of the Board and any Committee of which they were a member.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee and a Stock Option
Committee. The Company does not have a Compensation Committee or a Nominating
Committee.
Messrs. Fieber and Gray serve as members of the Audit Committee. The
primary responsibilities of the Audit Committee are to review the annual
financial statements of the Company and to examine and consider such other
matters in relation to the internal and external audit of the Company's accounts
and in relation to the financial affairs of the Company and its accounts as the
Committee may, in its discretion, determine to be desirable. The Audit Committee
met 3 times during 1994.
Messrs. Arader and Bailey serve as the current members of the Stock
Option Committee. There is currently a vacancy on the Committee, which will be
filled at the next Board of Directors meeting. The Committee is authorized to
grant options to officers and key employees of the Company. The Stock Option
Committee met once during 1994.
<PAGE>5
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
AND OTHER TRANSACTIONS
Executive officers received no cash compensation from the Company in
their capacity as executive officers. Executive officers are eligible to receive
stock options pursuant to the 1990 Stock Option Plan. During 1994, no options
were granted to executive officers.
Compensation of Directors. Each Director receives an annual fee of
$5,000, plus expenses and $500 for each meeting attended of the Board of
Directors.
Grant of Options. During 1994, the Stock Option Committee, under the
1990 Stock Option Plan, did not grant any options.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options as of
Options as of December 31, 1994 December 31, 1994
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------------------------------------------------------------------
<S> <C> <C>
Maurice Wiener 30,000/0 $75,000/0
Chief Executive Officer
</TABLE>
CERTAIN TRANSACTIONS. COURTLAND GROUP, INC. The day-to-day operations of
the Company are handled by the Advisor, as described below under "Renewal of
Advisory Agreement." As of May 31, 1995, the Company owed $33,000 to the
Advisor, compared to $112,000 as of December 31, 1994 and $52,244 as of December
31, 1993. Such sums bear interest at the prime rate plus 1% and are due on
demand. For further information about the Advisor's management and the
remuneration of the Advisor, see below "Renewal of Advisory Agreement."
Mr. Wiener is the executive trustee and Mr. Gray is a trustee and
treasurer of Transco and they each hold 24% of its stock. They are also
directors and officers of the Advisor which owns 21% of Transco's stock. Mr.
Wiener is Chairman of the Board and a 36% shareholder and Mr. Gray and Mr.
Eyssell are directors and 36% and 14% shareholders, respectively, of the
Advisor.
SOUTH BAYSHORE ASSOCIATES. South Bayshore Associates ("SBA") is a joint venture
in which Transco and the Company hold interests of 25% and 75%, respectively.
The major asset of SBA is a demand note from Transco, bearing interest at the
prime rate, with an outstanding balance of approximately $415,000 in principal
and interest as of May 31, 1995 compared to balances of $424,000 and $417,000 as
of December 31, 1994 and 1993, respectively. Beginning in the first quarter of
1992, Transco started paying a minimum of $5,000 per quarter on account of the
note.
The Company holds a demand note (which is eliminated in consolidation)
from SBA bearing interest at the prime rate plus 1% with an outstanding balance
as of May 31, 1995 of approximately $812,000, in principal and accrued interest,
and outstanding balances as of December 31, 1994 and 1993 of
<PAGE>6
approximately $807,000 and $786,000, respectively, in principal and accrued
interest. No payments were made in 1993 and 1994, and accrued and unpaid
interest was not capitalized.
COURTLAND INVESTMENTS, INC. Courtland Investments, Inc. ("CII") owns certain
parcels of undeveloped land in the northeastern United States and has
investments in companies whose primary purpose is to make equity investments in
growth oriented enterprises. The Company and Masscap Investment Company, Inc.
("MICI"), a wholly-owned subsidiary of Transco, hold 95% (non-voting) and 5%
(voting) interests in CII, respectively.
In September 1993, CII acquired from an unaffiliated third party a 60%
interest in four entities: Grove Isle Associates, Ltd. ("GIA"), Grove Isle Club
Inc. ("GICI"), Grove Isle Yacht Club Associates ("GIYCA" ) and Grove Isle Yacht
Club ("GIYC"). Prior to the acquisition GIA was owned 40% by the Company, GICI
was owned 40% by Courtland Group, Inc. and GIYCA and GIYC were each owned 40% by
CII. CII also acquired from Courtland Group, Inc. its 40% interest in GICI based
upon the purchase price paid to the third party. The third party was the
defendant in a previously reported lawsuit filed by the Company relating to the
acquired companies. This acquisition resolves all claims and counterclaims
between the Company and the defendant. The purchase price was $750,000 and
included a $250,000 promissory note payable to the individual which matures in
one year. In addition to the purchase price, CII, as general partner of GIA,
assumed approximately $3.5 million in third party debt owed by these entities
and the former general partner.
CII owns approximately 49% of the outstanding shares of T.G.I.F. Texas,
Inc. ("TGIF"), a company engaged in the business of net leased properties in the
southeastern and southwestern United States. This interest was purchased in 1986
for $1,426,000. Mr. Wiener is a director and officer of TGIF and owns, directly
and indirectly, approximately 18% of the outstanding common stock of TGIF. In
May 1992, CII purchased 345,000 non- voting preferred redeemable shares of TGIF
for $345,000. This purchase was paid by converting $280,000 of notes receivable
from TGIF plus $65,000 in cash. In 1993 and 1994, TGIF redeemed from CII and Mr.
Wiener 236,250 and 118,130 preferred shares, respectively, at $1.00 per share.
As of December 31, 1994, CII and Mr. Wiener owned 108,750 and 54,370 preferred
shares, respectively, which TGIF redeemed at $1.00 per share in June 1995.
As of December 31, 1993, CII had advances due from TGIF of $303,000.
These advances were due on demand and bore interest at the prime rate plus 1%.
During 1994, CII borrowed funds from TGIF eliminating the amount due from TGIF,
and resulting in CII owing $225,000 to TGIF, including accrued interest, as of
December 31, 1994.
JACK BAKER 5TH AVENUE, INC. In 1992, CII and certain directors and officers of
HMG, acquired a 27% interest in Jack Baker 5th Avenue, Inc. and its affiliates.
In 1993, that 27% interest was increased to 85% in which CII has a 59% interest
and certain directors and officers of HMG have a 41% interest. This company is a
manufacturers representative and the investment in, and loans to (including
accrued interest), Jack Baker 5th Avenue, Inc. were approximately $277,000 and
$245,000 as of December 31, 1994 and 1993, respectively.
HMG INVESTMENT CORP. The Company has advances and debentures receivable from HMG
Investment Corp., a wholly owned subsidiary of Transco, which amount to
approximately $236,000 and $318,000, bearing interest at 8% and the prime rate +
2%, respectively, and which are due on demand and in 1996, respectively. As of
January 2, 1990, the Company began recognizing interest income on these notes as
<PAGE>7
payments are received. In 1993, the Company received an interest payment of
$136,375. No payments were received in 1994 and accrued and unpaid interest is
not being capitalized.
HMG-FIEBER ASSOCIATES. HMG-Fieber Associates, a joint venture in which the
Company and N.A.F. Associates (a partnership controlled by Mr. Fieber, a
director of the Company) hold 65% and 35% interests, respectively, owns 24
retail stores. In June 1994, this venture sold its store located in New Bedford,
Massachusetts recognizing a total gain to the venture of approximately $294,000.
Also in 1995, this venture sold two stores recognizing a total gain to the
venture of approximately $683,000.
RENEWAL OF ADVISORY AGREEMENT
The Advisory Agreement. At the 1994 annual meeting of shareholders, the
Advisory Agreement was amended and renewed for a one year term expiring on
December 31, 1995. The members of the Board of Directors have unanimously agreed
to renew the Agreement for a term ending December 31, 1996. Under the terms of
the Agreement, its renewal must be approved by the holders of a majority of the
Shares. If the holders of a majority of the Shares approve the renewal of the
Agreement, the Agreement will be effective during the renewed term commencing on
January 1, 1996.
The following description of the Agreement contains a summary of its
material terms.
GENERAL PROVISIONS. The Agreement is not assignable without the consent
of the unaffiliated Directors of the Company and the Advisor. The Agreement
provides that officers, directors, employees and agents of the Advisor or of its
affiliates may serve as Directors, officers or agents of the Company.
DUTIES OF ADVISOR. The Advisor in performing its duties under the
Agreement is at all times subject to the supervision of the Directors of the
Company and has only such authority as the Directors delegate to it as their
agent. The Advisor counsels and presents to the Company investments consistent
with the objectives of the Company and performs such research and investigation
as the Directors may request in connection with the policy decisions as to the
type and nature of investments to be made by the Company. Such functions include
evaluation of the desirability of acquisition, retention and disposition of
specific Company assets. The Advisor also is responsible for the day-to-day
investment operations of the Company and conducts relations with mortgage loan
brokers, originators and servicers, and determines whether investments offered
to the Company meet the requirements of the Company. The Advisor provides
executive and administrative personnel, office space and services required in
rendering such services to the Company. To the extent required to perform its
duties under the Agreement, the Advisor may deposit into and disburse from bank
accounts opened in its own name any money on behalf of the Company under such
terms and conditions as the Company may approve.
ALLOCATION OF EXPENSES. Under the Agreement, the Advisor pays: all
salary and employment expenses of its own personnel and of the officers and
employees of the Company who are affiliates of the Advisor; all of the
administrative, rent and other office expenses (except those relating to a
separate office, if any, maintained by the Company) relating to its services as
Advisor; and travel (to the extent not paid by any party other than the Company
or the Advisor) and advertising expenses incurred in seeking investments for the
Company.
The Company is required to pay all expenses of the Company not assumed
by the Advisor, including, without limitation, the following: (a) the cost of
borrowed money; (b) taxes on income, real
<PAGE>8
property and all other taxes applicable to the Company; (c) legal, accounting,
underwriting, brokerage, transfer agent's, registrar's, indenture trustee's,
listing, registration and other fees, printing, engraving, and other expenses
and taxes incurred in connection with the issuance, distribution, transfer,
registration and stock exchange listing of the Company's securities; (d) fees
and expenses of advisors and independent contractors, consultants, managers and
other agents employed directly by the Company; (e) expenses connected with the
acquisition, disposition or ownership of mortgages or real property or other
investment assets, including, to the extent not paid by any party other than the
Company or the Advisor, but not limited to, costs of foreclosure, costs of
appraisal, legal fees and other expenses for professional services, maintenance,
repairs and improvement of property, and brokerage and sales commissions, and
expenses of maintaining and managing real property equity interests; (f) the
expenses of organizing or terminating the Company; (g) all insurance costs
(including the cost of Directors' liability insurance) incurred in connection
with the protection of the Company's property as required by the Directors; (h)
expenses connected with payment of dividends or interest or distributions in
cash or any other form made or caused to be made by the Directors to holders of
securities of the Company, including a dividend reinvestment plan, if any; (i)
all expenses connected with communications to holders of securities of the
Company and the other bookkeeping and clerical work necessary in maintaining
relations with holders of securities, including the cost of printing and mailing
checks, certificates for securities and proxy solicitation materials and reports
to holders of the Company's securities; (j) to the extent not paid by borrowers
from the Company, the expenses of administering, processing and servicing
mortgage, development, construction and other loans; (k) the cost of any
accounting, statistical, or bookkeeping equipment necessary for the maintenance
of the books and records of the Company; (l) general legal, accounting and
auditing fees and expenses; (m) salaries and other employment expenses of the
personnel employed by the Company who are not affiliates of the Advisor, fees
and expenses incurred by the Directors, officers and employees in attending
Directors' meetings, and fees and travel and other expenses incurred by the
Directors and officers and employees of the Company who are not affiliates of
the Advisor.
Expenses relating to the grant of options to all officers and employees
of the Company under a plan approved by the shareholders of the Company are
borne by the Company.
REMUNERATION OF THE ADVISOR. For services rendered under the Agreement
(as amended in 1992), the Advisor is currently entitled to receive as regular
compensation a monthly fee equal to the sum of (a) $72,917 (equivalent to
$875,000 per year) and (b) 20% of the amount of any unrefunded commitment fees
received by the Company with respect to mortgage loans and other commitments
which the Company was not required to fund and which expired within the next
preceding calendar month.
In 1992, 1993 and 1994, the Advisor's annual regular compensation
amounted to $950,000, $875,004 and $875,004 respectively.
The Agreement also provides that the Advisor shall receive incentive
compensation for each fiscal year of the Company equal to the sum of (a) 10% of
the realized capital gains (net of accumulated net realized capital losses) and
extraordinary non-recurring items of income of the Company for such year, and
(b) 10% of the amount, if any, by which Net Profits of the Company exceed 8% per
annum of the Average Net Worth of the Company. "Net Profits" is defined as the
gross earned income of the Company for such period (exclusive of gains and
losses from the disposition of assets), minus all expenses other than non-cash
charges for depreciation, depletion and amortization and the incentive
compensation payable to the Advisor, and minus all amounts expended for mortgage
amortization on long-term mortgage indebtedness, excluding extraordinary and
balloon payments. "Average Net Worth" is defined as the average of the amount in
the
<PAGE>9
shareholders' equity accounts on the books of the Company, plus the accumulated
non-cash reserves for depreciation, depletion and amortization shown on the
books of the Company, determined at the close of the last day of each month for
the computation period.
If and to the extent that the Company requests the Advisor, or any of
its directors, officers, or employees, to render services for the Company, other
than those required to be rendered by the Advisor under the Agreement, such
additional services are to be compensated separately on terms to be agreed upon
between such party and the Company from time to time, which terms must be fair
and reasonable and at least as favorable to the Company as similar arrangements
for comparable transactions of which the Company is aware with organizations
unaffiliated with the Advisor. Neither the Advisor nor its affiliates received
any fees of the types described above during the fiscal year ended December 31,
1993.
Set forth below is the aggregate compensation paid to the Advisor during
the fiscal year ended December 31, 1994:
Form of Compensation Amount
-------------------- ------
Regular compensation . . . . . . . . . . . . . . . . . . . . . $875,004
20% of Unrefunded Commitment Fees . . . . . . . . . . . . . . . . . $-0-
Incentive . . . . . . . . . . . . . . . . . . . . . . . . . . . $254,659
Total . . . . . . . . . . . . . . . . . . . . . . . . $1,129,664
BROKERAGE FEES PAID THE ADVISOR. Under the Agreement, the Advisor and
its affiliates are prohibited from receiving from the Company any brokerage or
similar fees for the placement of mortgages or other investments with the
Company. However, the Advisor and its affiliates can receive normal brokerage
commissions from borrowers in connection with transactions involving the
Company, provided that such commissions are fully disclosed to all Directors of
the Company and the Directors approve of the transaction and that such
commissions (which to the extent paid by the borrower and retained by the
Advisor or its affiliates may reduce the yield to the Company) are fair and
reasonable and in accord with the prevailing rates in the locality in which the
transaction is consummated for the type of transaction involved. The Advisor and
its affiliates may, subject to the same terms and conditions, receive normal
brokerage commissions from sellers, buyers, lessees and other parties with whom
the Company engages in transactions.
MANAGEMENT OF THE ADVISOR
Set forth below are the names, offices with the Advisor and principal
occupations of the current executive officers and directors of the Advisor.
<PAGE>10
NAMES AND OFFICES
WITH THE ADVISOR PRINCIPAL OCCUPATION
----------------- --------------------
Maurice Wiener See "Election of Directors."
Chairman of the Board of
Directors and Chief
Executive Officer
Lee Gray See "Election of Directors."
President, Treasurer
and Director
Lawrence I. Rothstein Senior Vice President and Secretary of
Senior Vice President and the Company; Vice President, Transco.
Secretary
Bernard Lerner Vice President of the Company.
Vice President
Carlos Camarotti Vice President and Assistant
Vice President and Secretary of the Company.
Assistant Secretary
THE DIRECTORS RECOMMEND THAT THE SHAREHOLDERS APPROVE THE RENEWAL OF THE
AGREEMENT. AN AFFIRMATIVE VOTE BY THE HOLDERS OF A MAJORITY OF THE SHARES
PRESENT IN PERSON OR BY PROXY AT THE ANNUAL MEETING OF SHAREHOLDERS IS REQUIRED
FOR APPROVAL OF THE RENEWAL OF THE AGREEMENT.
INDEPENDENT ACCOUNTANTS
HMG/Courtland Properties, Inc. (the "Company") and its independent
accountant, Deloitte & Touche LLP ("Deloitte & Touche"), have decided to end
their relationship by mutual consent effective June 20, 1995. Deloitte &
Touche's reports on the Company's financial statements for the past two years do
not contain any adverse opinions or disclaimer of opinions, and were not
qualified or modified as to uncertainty, audit scope, or accounting principles.
The decision to end the Company's relationship with Deloitte & Touche was
recommended by the Audit Committee of the Company's Board of Directors.
During the Company's two most recent fiscal years and subsequent interim
periods, there were no disagreements with Deloitte & Touche on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure.
Deloitte & Touche has furnished the Company with a letter addressed to
the Securities and Exchange Commission stating that Deloitte & Touche agrees
with the statements in the two preceding paragraphs.
The Company is presently interviewing several accounting firms and
expects to engage one in the next couple of months.
<PAGE>11
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. In addition
to the use of the mails, proxies may be solicited by Directors, officers and
employees of the Company personally, by telephone or by telegraph.
OTHER BUSINESS
The Board of Directors is not aware of any business other than those
items referred to above to be presented for action at the meeting. However,
should any other matters requiring a vote of the shareholders arise, the agents
named in the accompanying proxy will vote in accordance with their own best
judgment.
In order for proposals of shareholders to be considered for inclusion in
the proxy materials for presentation at the 1996 annual meeting of shareholders,
such proposals must be received by the Company no later than March 12, 1996.
____________________
A COPY OF THE ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER
31, 1994, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, MAY BE OBTAINED BY SHAREHOLDERS WITHOUT
CHARGE UPON WRITTEN REQUEST TO: SECRETARY, HMG/COURTLAND PROPERTIES, INC., 2701
SOUTH BAYSHORE DRIVE, COCONUT GROVE, FLORIDA 33133.
____________________
YOU CAN SAVE YOUR COMPANY ADDITIONAL EXPENSE BY SIGNING
AND RETURNING YOUR PROXY AS PROMPTLY AS POSSIBLE
<PAGE>
APPENDIX
HMG/COURTLAND PROPERTIES, INC.
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of HMG/COURTLAND PROPERTIES, INC.
("Company") hereby appoints MAURICE WIENER and LEE GRAY, or either of them with
power of substitution, as attorneys and proxies to vote as designated below all
shares of Common Stock which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of the Company to be held at Grove Isle Club and Resort,
4 Grove Isle Drive, Coconut Grove, Florida on Friday, August 4, 1995 at 10:30
a.m. and at any adjournment or adjournments thereof.
(Continued and to be signed on reverse side)
<PAGE>
[X] Please mark your
votes as in this
example.
FOR WITHHELD Nominees: M. Wiener, L. Gray
1. Election of Directors. [ ] [ ] W. Arader, J. Bailey
H. Comita, G. Eyssell
N. Fieber
For, except vote withheld from the following nominees(s):
2. Proposal to renew the Advisory FOR AGAINST ABSTAIN
Agreement between the Company [ ] [ ] [ ]
and Courtland Group, Inc.
3. In their discretion, upon such other matters as may properly come
before the meeting or any adjournment thereof, all in accordance
with the Company's Proxy Statement, receipt of which is hereby
acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE
WITH THE ABOVE INSTRUCTIONS. IN THE ABSENCE OF SUCH
SPECIFICATIONS THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.
SIGNATURES(S)_________________________________________________DATE___________
(Please sign exactly as your name appears hereon. Persons signing as
executors, administrators, trustees, guardians, etc., please so indicate
when signing.)
