MONMOUTH REAL ESTATE INVESTMENT CORPORATION
A Real Estate Investment Trust
125 Wyckoff Road
Post Office Box 335
Eatontown, New Jersey 07724
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of Shareholders of
Monmouth Real Estate Investment Corporation (the Company) will be held on
Thursday, April 25, 1996, at 4:00 p.m. at the offices of the Company on the
second floor of the Midlantic Bank Building, 125 Wyckoff Road, Eatontown,
New Jersey, for the following purposes:
1. To elect ten Directors, the names of whom are set forth in the
accompanying proxy statement, to serve for the ensuing year; and
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors for the Company for the fiscal year ending September 30,
1996; and
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The record books containing the records of the last meeting of
shareholders,and the records of all meetings of the Directors since the last
Annual Meeting of Shareholders, will be presented at the meeting for the
inspection of the shareholders. Only shareholders of record at the close
of business on March 14, 1996 will be entitled to vote at the meeting and at
any adjournments thereof.
IF YOU ARE UNABLE TO BE PRESENT PERSONALLY, PLEASE SIGN AND DATE THE
ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
s/ Eugene W. Landy
EUGENE W. LANDY
President and Director
March 20, 1996
YOUR VOTE IS IMPORTANT
Please indicate your voting instructions on the enclosed proxy card, date and
sign the card, and return it in the envelope provided. If you sign, date and
return the proxy card but give no voting instructions, your shares will be
voted "FOR" Proposals 1 and 2 listed above.
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
125 Wyckoff Road
Post Office Box 335
Eatontown, New Jersey 07724
PROXY STATEMENT
Annual Meeting of Shareholders
April 25, 1996
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Monmouth Real Estate Investment Corporation (the
Company) of proxies to be voted at the Annual Meeting of Shareholders of the
Company to be held on April 25, 1996, and at any adjournments thereof (Annual
Meeting), for the purposes listed in the preceding Notice of Annual Meeting
of Shareholders. This Proxy Statement and the accompanying proxy card are
being distributed on or about March 20, 1996 to shareholders of record
March 14, 1996.
A copy of the Annual Report, including financial statements, was mailed
to all shareholders of record on or about February 20, 1996.
Any shareholder giving the accompanying proxy has the power to revoke it
at any time before it is exercised at the Annual Meeting by filing with the
Secretary of the Company an instrument revoking it, by delivering a duly
executed proxy card bearing a later date, or by appearing at the meeting and
voting in person. Shares represented by properly executed proxies will be
voted as specified thereon by the shareholder. Unless the shareholder
specifies otherwise, such proxies will be voted FOR the proposals set forth
in the Notice of Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement and
form of proxy, and the cost of soliciting proxies related to the meeting,
will be borne by the Company. It is contemplated that the original solicita-
tion of proxies by mail will be supplemented by telephone, telegraph and
personal solicitation by officers, directors and other regular or part-time
employees of the Company and no additional compensation will be paid to such
individuals, except for brokers' and nominees' out-of-pocket expenses.
VOTING RIGHTS
Only holders of the Company's $.01 par value common stock (Common Stock)
of record as of the close of business on March 14, 1996, are entitled to vote
at the Annual Meeting of Shareholders. As of the record date, there were
issued and outstanding 3,534,459 shares of Common Stock, each share being
entitled to one vote on any matter which may properly come before the
meeting. Said voting right is non-cumulative. The holders of a majority of
the outstanding shares of Common Stock shall constitute a quorum. A majority
of the votes cast by holders of the Common Stock is required for approval of
Proposals 1 and 2.
PROPOSAL 1
ELECTION OF DIRECTORS
It is proposed to elect a Board of ten Directors. The proxy will be
voted for the election of the ten nominees named below, all of whom are
members of the present Board, to serve for a one-year term for which they
have been nominated, unless authority is withheld by the shareholder. The
nominees have agreed to serve, if elected, for the new term. If for any
reason any of the said ten nominees shall become unavailable for election,
the proxy will be voted for any substitute nominee who may be selected by
the Board of Directors prior to or at the meeting, or, if no substitute
is selected by the Board of Directors, for a motion to reduce the membership
of the Board to the number of the following nominees who are available. In
the event the membership of the Board is reduced, it is anticipated that it
would be restored to the original number at the next annual meeting. In the
event a vacancy occurs on the Board of Directors after the Annual Meeting,
the by-laws provide that any such vacancy shall be filled for the unexpired
term by a majority vote of the remaining Directors. The Company has no
knowledge that any of the ten nominees shall become unavailable for election.
The proxies solicited cannot be voted for a greater number of persons
than the nominees named.
Some of the nominees for Director are also Officers and/or Directors
of other companies, including Monmouth Capital Corporation and United Mobile
Homes, Inc., both publicly-owned companies. In addition, the Officers and
Directors of the Company may engage in real estate transactions for their
own account, which transactions may also be suitable for Monmouth Real
Estate Investment Corporation. In most respects, the activities of the
Company, United Mobile Homes, Inc. and Monmouth Capital Corporation are
not in conflict, but rather complement each other. However, the activities of
the Officers and Directors on behalf of the other companies, or for their own
account, may on occasion conflict with those of the Company and deprive the
Company of favorable opportunities. It is the opinion of the Officers and
Directors of the Company that there have been no conflicting transactions
since the beginning of the last fiscal year.
Committees of the Board of Directors and Meeting Attendance
The Board of Directors met four times during the last fiscal year.
No Directors attended fewer than 75% of the meetings, except Ara Hovnanian
who attended 50% of the meetings.
The Company has a standing Audit Committee and Compensation Committee
of the Board of Directors.
The Audit Committee consists of Charles P. Kaempffer and W. Dunham Morey,
both of whom are outside Directors. This Committee met once during the last
fiscal year. The Audit Committee recommends to the Directors the independent
public accountants to be engaged by the Company and reviews with management
the Company's internal accounting procedures and controls.
The Compensation Committee consists of W. Dunham Morey and Daniel
Cronheim. This Committee, which makes recommendations to the Directors
concerning compensation, met once during the last fiscal year.
NOMINEES FOR DIRECTOR
Present Position with the Company;
Business Experience During Past Director
Nominee; Age Five Years; Other Directorships Since
____________________________________________________________________________
Ernest V. Bencivenga Treasurer (1968 to present) and Director. 1968
(78) Financial Consultant (1976 to present);
Treasurer and Director (1961 to present)
and Secretary (1967 to present) of Monmouth
Capital Corporation; Director (1969 to
present) and Secretary/Treasurer (1984 to
present) of United Mobile Homes, Inc.
Anna T. Chew Controller (1991 to present) and Director. 1993
(37) Certified Public Accountant; Controller
(1991 to present) and Director (1994 to
present) of Monmouth Capital Corporation;
Vice President (1995 to present), Controller
(1991 to 1995) and Director (1994 to present)
of United Mobile Homes, Inc.; Senior Manager
(1987 to 1991) of KPMG Peat Marwick.
Daniel D. Cronheim Director. Attorney at Law, Daniel D. 1989
(41) Cronheim, Esq. (1982 to present); Executive
Vice President (1989 to present) and General
Counsel (1983 to present) of David Cronheim
Company.
Boniface DeBlasio Director. Chairman of the Board (1968 to 1968
(75) present) and Director (1961 to present) of
Monmouth Capital Corporation.
Ara K. Hovnanian Director. President (1988 to present) and 1989
(38) Director (1981 to present) of Hovnanian
Enterprises, Inc., a publicly-owned company
specializing in the construction of housing.
Charles P. Kaempffer Director. Investor; Director (1970 to 1974
(58) present) of Monmouth Capital Corporation;
Director (1969 to present) of United Mobile
Homes, Inc.; Director (1989 to present) of
Colonial Bank.
NOMINEES FOR DIRECTOR (continued)
Present Position with the Company;
Business Experience During Past Director
Nominee; Age Five Years; Other Directorship Since
_________________________________________________________________________
Eugene W. Landy President (1968 to present) and Director. 1968
(62) Attorney at Law, Landy & Landy; President
and Director (1961 to present) of Monmouth
Capital Corporation; Chairman of the Board
(1995 to present), President(1969 to 1995)
and Director (1969 to present) of United
Mobile Homes, Inc.
Samuel A. Landy Director. Attorney at Law, Landy & Landy 1989
(35) (1987 to present); President (1995 to
present), Vice President (1991 to 1995)
and Director (1992 to present) of United
Mobile Homes, Inc.; Director (1994 to
present) of Monmouth Capital Corporation.
W. Dunham Morey Director. Certified Public Accountant, 1968
(75) W. Dunham Morey, CPA; Director (1961 to
present) of Monmouth Capital Corporation.
Robert G. Sampson Director. Investor; Director (1963 to 1968
(70) present) of Monmouth Capital Corporation;
Director (1969 to present) of United Mobile
Homes, Inc.; Director (1972 to 1993) of
United Jersey Bank; General Partner (1983
to present) of Sampco, Ltd., an
investment group.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
PROPOSAL 2
APPROVAL OF INDEPENDENT AUDITORS
It is proposed to approve the appointment of KPMG Peat Marwick LLP as
Independent Auditors for the Company for the purpose of making the annual
audit of the books of account of the Company for the year ending September
30, 1996, and shareholder approval of said appointment is requested. KPMG
Peat Marwick LLP served as Independent Auditors of the Company since 1994.
There are no affiliations between the Company and KPMG Peat Marwick LLP, its
partners, associates or employees, other than its employment as Independent
Auditors for the Company. KPMG Peat Marwick LLP informed the Company that it
has no direct or indirect financial interest in the Company. The Company does
expect a representative of KPMG Peat Marwick LLP to be present at the Annual
Meeting either to make a statement or to respond to appropriate questions.
The approval of the appointment of the Independent Auditors must be by
the affirmative vote of a majority of the votes cast at the Annual Meeting.
In the event KPMG Peat Marwick LLP does not receive an affirmative vote of
the majority of the votes cast by the holders of shares entitled to vote,
then another firm will be appointed as Independent Auditors and the
shareholders will be asked to ratify the appointment at the next annual
meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
PRINCIPAL SHAREHOLDERS
On March 1, 1996, no person owned of record, or was known by the
Company to own beneficially, more than five percent (5%) of the shares of the
Company, except the following:
Name and Address Shares Owned Percent
Title of Class of Beneficial Owner Beneficially of Class
Common Stock Eugene W. Landy 364,413 10.31%
20 Tuxedo Road
Rumson, NJ 07760
INFORMATION RESPECTING DIRECTORS AND OFFICERS
As of March 1, 1996, the Directors and Officers, individually and as
a group, beneficially owned Common Stock as follows:
Name of Shares Owned
Beneficial Owner Beneficially (1) Percent of Class
Ernest V. Bencivenga 7,315 0.21%
Anna T. Chew 4,188 (2) 0.12%
Daniel D. Cronheim 14,630 0.41%
Boniface DeBlasio 10,788 0.30%
Ara K. Hovnanian 341 0.01%
Charles P. Kaempffer 35,675 (3) 1.01%
Eugene W. Landy 364,413 (4) 10.31%
Samuel A. Landy 102,557 (5) 2.90%
W. Dunham Morey 42,387 (6) 1.20%
Robert G. Sampson 67,774 (7) 1.92%
Directors and Officers
as a Group 650,068 18.39%
(1) Beneficial ownership, as defined herein, includes Common Stock as to
which a person has or shares voting and/or investment power.
(2) Held jointly with Ms. Chew's husband; includes 778 shares held in
Ms. Chew's 401(k) Plan.
(3) Includes (a) 13,405 shares owned by Mr. Kaempffer's wife; (b) 1,080
shares in joint name with Mrs. Kaempffer; and (c) 1,718 shares held in
the Charles P. Kaempffer Defined Benefit Pension Plan of which
Mr. Kaempffer is Trustee with power to vote.
(4) Includes (a) 73,348 shares owned by Mr. Landy's wife; (b) 151,701 shares
held in the Landy & Landy Profit Sharing Plan of which Mr. Landy is a
Trustee with power to vote; and (c) 120,266 shares held in the Landy &
Landy Pension Plan of which Mr. Landy is a Trustee with power to vote.
Excludes 28,658 shares held by Mr. Landy's adult children in which he
disclaims any beneficial interest.
(5) Includes (a) 2,532 shares owned by Mr. Landy's wife; (b) 18,780 shares
held in custodial accounts for Mr. Landy's minor children under the NJ
Uniform Transfers to Minors Act in which he disclaims any beneficial
interest but has power to vote; and (c) 5,031 shares held in Mr. Landy's
401(k) Plan.
(6) Includes 8,818 shares owned by Mr. Morey's wife.
(7) Includes (a) 40,020 shares held in the Estate of Helen Haskell Sampson;
and (b) 6,000 shares held by Sampco Ltd. in which Mr. Sampson has a
beneficial interest.
EXECUTIVE COMPENSATION
Summary Compensation Table.
The following Summary Compensation Table shows compensation paid by
the Company to its Chief Executive Officer for services rendered during the
fiscal years ended September 30, 1995, 1994 and 1993. Because no other
executive officers received total annual salary and bonus exceeding $100,000,
only the compensation paid to the Chief Executive Officer is to be disclosed
under the Securities and Exchange Commission disclosure requirements.
Annual Compensation
Name and Principal Position Year Salary Bonus Other
Eugene W. Landy 1995 None None $162,445(1)
Chief Executive Officer 1994 None None $142,130
1993 None None $116,055
(1) Represents Director's fees of $2,800 paid to Mr. Landy, management fees
of $97,000, legal fees of $3,645 paid to the firm of Landy & Landy, and
$59,000 accrual for pension and other benefits in accordance with
Mr. Landy's employment agreement.
Compensation of Directors
The Directors receive a fee of $800 for each Board meeting attended.
Prior to January, 1995, this fee was $400. Directors appointed to house
committees receive $150 for each meeting attended. Those specific committees
are Compensation Committee and Audit Committee.
Employment Agreement
On December 9, 1994, the Company and Eugene W. Landy entered into an
Employment Agreement under which Mr. Landy receives an annual base
compensation (management fee) of $100,000 plus bonuses and customary fringe
benefits, including health insurance and five weeks' vacation. In lieu of
annual increases in base compensation, there will be additional bonuses voted
by the Board of Directors. The Employment Agreement is terminable by either
party at any time subject to certain notice requirements.
On severance of employment for any reason, Mr. Landy will receive
severance of $300,000 payable $100,000 on severance and $100,000 on the first
and second anniversaries of severance.
In the event of disability, Mr. Landy's compensation shall continue
for a period of three years, payable monthly.
On retirement, Mr. Landy shall receive a pension of $40,000 a year for
ten years, payable in monthly installments.
In the event of death, Mr. Landy's designated beneficiary shall
receive $300,000, $150,000 thirty days after death and the balance one year
after death.
The Employment Agreement terminates December 31, 1999. Thereafter,
the term of the Employment Agreement shall be automatically renewed and
extended for successive one-year periods.
Other Information
Except for specific agreements, the Company has no retirement plan in
effect for Officers, Directors or employees and, at present, has no
intention of instituting such a plan.
Cronheim Management Company received the sum of $10,540 for manage-
ment fees, and David Cronheim Company received $11,877 in commissions.
These totals are based on amounts paid or accrued during the fiscal year.
Management believes that the aforesaid fees are no more than what the Company
would pay for comparable services elsewhere.
Report of Board of Directors on Executive Compensation
Overview and Philosophy
The Company has a Compensation Committee consisting of two independent
outside Directors. This Committee is responsible for making recommendations
to the Board of Directors concerning three major factors in setting
compensation.
The first consideration is the overall performance of the Company. The
Board believes that the financial interests of the executive officers should
be aligned with the success of the Company and the financial interests of its
shareholders. Increases in funds from operations, the enhancement of the
Company's equity portfolio, and the success of the Dividend Reinvestment and
Stock Purchase Plan all contribute to increases in stock prices, thereby
maximizing shareholders' return.
The second consideration is the individual achievements made by each
officer. The Company is a small real estate investment trust (REIT). The
Board of Directors is aware of the contributions made by each officer and
makes an evaluation of individual performance based on their own familiarity
with the officer.
The final criteria in setting compensation is comparable wages in the
industry. In this regard, the REIT industry maintains excellent statistics.
Evaluation
The Company continues to increase funds from operations. The Committee
reviewed the progress made by Eugene W. Landy, Chief Executive Officer, in
shifting the Company's focus from mortgage loans to equity properties. The
Committee also noted that Mr. Landy's current compensation was less than the
average salary received by Chief Executive Officers of other REITs. His base
compensation under this contract is $100,000 per year. The Committee has
recommended that Mr. Landy receive a bonus of $10,000.
COMPARATIVE STOCK PERFORMANCE
The following line graph compares the total return of the Company's
common stock for the last five fiscal years to the NAREIT All REIT Total
Return Index, published by the National Association of Real Estate Investment
Trusts (NAREIT), and the S&P 500 Index for the same period. The total return
reflects stock price appreciation and dividend reinvestment for all three
comparative indices. The information herein has been obtained from sources
believed to be reliable, but neither its accuracy nor its completeness is
guaranteed.
Monmouth Real Estate
Investment Corporation NAREIT S&P 500
1990 100 100 100
1991 108 134 131
1992 137 151 146
1993 175 197 165
1994 171 189 171
1995 164 211 221
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain Directors and Officers of the Company are also Directors and
Officers of United Mobile Homes, Inc. (United). The Company made loans to
United, all of which were repaid in fiscal 1994. Interest income from United
was $116,187 and $934,664 for the fiscal years ended September 30, 1994 and
1993, respectively.
The Board of Directors of the Company has granted Eugene W. Landy,
President, a loan of $100,000 at an interest rate of 10% due May 21, 1996.
Principal and accrued interest is payable at maturity.
There is no family relationship between any of the Directors or
Executive Officers of the Company, except that Samuel A. Landy, Director,
is the son of Eugene W. Landy, President and Director of the Company. Daniel
D. Cronheim, Director, is the son of Robert Cronheim, President of David
Cronheim Company, the Real Estate Advisor to the Company.
Eugene W. Landy and Samuel A. Landy are partners in the law firm of
Landy & Landy, which firm, or its predecessor firms, have been retained by
the Company as legal counsel since the formation of the Company, and which
firm the Company proposes to retain as legal counsel for the current fiscal
year. The New Jersey Supreme Court has ruled that the relationship of
directors also serving as outside counsel is not per se improper, but the
attorney should fully discuss the issue of conflict with the other directors
and disclose it as part of the proxy statement so that shareholders can
consider the conflict issue when voting for or against the attorney/director
nominee.
GENERAL
The Board of Directors knows of no other matters other than those
stated in the Proxy Statement which are to be presented for action at the
Annual Meeting. If any other matters should properly come before the Annual
Meeting, it is intended that proxies in the accompanying form will be voted
on any such matter in accordance with the judgment of the persons voting such
proxies. Discretionary authority to vote on such matters is conferred by
such proxies upon the persons voting them.
The Company will provide, without charge, to each person being
solicited by this Proxy Statement, on the written request of any such person,
a copy of the Annual Report of the Company on Form 10-K for the year ended
September 30, 1995 (as filed with the Securities and Exchange Commission),
including the financial statements and schedules thereto. All such requests
should be directed to Monmouth Real Estate Investment Corporation, Attention:
Secretary, 125 Wyckoff Road, Eatontown, NJ 07724.
COMPLIANCE WITH EXCHANGE ACT FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Officers and Directors, and persons who own more than
10% of the Company's Common Stock, to file reports of ownership and changes
in ownership with the Securities and Exchange Commission. Officers,
Directors and greater than 10% shareholders are required by Securities and
Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) forms they file. Based solely on review of the copies of such
forms furnished to the Company, the Company believes that, during the fiscal
year, all Section 16(a) filing requirements applicable to its Officers,
Directors and greater than 10% beneficial owners were met.
SHAREHOLDER PROPOSALS
In order for Shareholder Proposals for the 1997 Annual Meeting of
Shareholders to be eligible for inclusion in the Company's 1997 Proxy State-
ment, they must be received by the Company at its principal office at
125 Wyckoff Road, P. O. Box 335, Eatontown, New Jersey 07724 not later than
October 30, 1996.
By Order of the Board of Directors
s/Eugene W. Landy
EUGENE W. LANDY
President and Director
Dated: March 20, 1996
IMPORTANT: Shareholders can help the Directors avoid the necessity and
expense of sending follow-up letters to insure a quorum by promptly returning
the enclosed proxy. The proxy is revocable and will not affect your right
to vote in person in the event you attend the meeting. You are earnestly
requested to sign and return the enclosed proxy in order that the necessary
quorum may be present at the meeting. The enclosed addressed envelope
requires no postage and is for your convenience.
PROXY PROXY
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
A Real Estate Investment Trust
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
PLEASE FILL IN, DATE AND SIGN PROXY AND RETURN PROMPTLY
The undersigned hereby appoints EUGENE W. LANDY, CHARLES P. KAEMPFFER
and ERNEST V. BENCIVENGA, and each or any of them, proxies of the
undersigned, with full power of substitution, to vote in their discretion
(subject to any direction indicated hereon) at the Annual Meeting of
Shareholders to be held at the Company Office on the second floor of the
Midlantic Bank Building, 125 Wyckoff Road, Eatontown, New Jersey, on
Thursday, April 25, 1996, at 4:00 o'clock p.m., and at any adjournment
thereof, with all the powers which the undersigned would possess if personally
present, and to vote all shares of stock which the undersigned may be
entitled to vote at said meeting.
The Board of Directors recommends a vote FOR items (1) and (2), and
all shares represented by this Proxy will be so voted unless otherwise
indicated, in which case they will be voted as marked.
(1) Election of Directors - Nominees are: Ernest V. Bencivenga, Anna T.
Chew, Daniel D. Cronheim, Boniface DeBlasio, Ara K. Hovnanian,
Charles P. Kaempffer, Eugene W. Landy, Samuel A. Landy, W. Dunham
Morey and Robert G. Sampson.
(Instruction: To withhold authority to vote for any individual Nominee,
write that person's name on the line at the right)______________________
FOR all Nominees WITHHOLD AUTHORITY
except as Indicated to vote for listed Nominees
/ / / /
(2) Approval of the appointment of KPMG Peat Marwick LLP as Independent
Auditors for the Company for the fiscal year ending September 30, 1996.
FOR AGAINST ABSTAIN
/ / / / / /
(3) Such Other Business as may be brought before the meeting or any
adjournment thereof. The Board of Directors at present knows of no other
business to be presented by or on behalf of the Company or its Board of
Directors at the meeting.
Receipt of Notice of Meeting and Proxy Statement is hereby acknowledged.
Dated:_____________________________________, 1996
Signature_________________________________________________
Signature_________________________________________________
Important: Please date this Proxy; sign exactly as your name (s) appears
hereon. When signing as joint tenants, all parties to the joint tenancy
should sign. When signing the Proxy as attorney, executor, administrator,
trustee or guardian, please give full title as such.
