<PAGE>
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:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
HGM/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):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 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:
----------------------------------------------------------------------
[ ] 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>
Preliminary Copy
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 5, 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
Island 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>
Preliminary Copy
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 5, 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 ("FIEBER"). 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 19, 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
Island Club Resort, 4 Grove Isle Drive, Coconut Grove, Florica 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.)
