<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
New Mexico and Arizona Land Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[LOGO]
3033 NORTH 44TH STREET, SUITE 270
PHOENIX, ARIZONA 85018
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 1997
MAILING DATE: ON OR ABOUT APRIL 7, 1997
To our Shareholders:
We cordially invite you to the 1997 Annual Meeting of the Shareholders of
New Mexico and Arizona Land Company (the "Company"), to be held at The Embassy
Suites Phoenix-Biltmore, 2630 East Camelback Road, Phoenix, Arizona 85016 on
Friday, May 16, 1997 at 9:30 a.m., Arizona time, pursuant to the Company's
Bylaws, for the following purposes:
1. The election of Class A Directors;
2. Approval of the adoption of Article Eighth to the Company's Articles
of Incorporation;
3. Ratification of KPMG Peat Marwick LLP as independent auditor for the
Company for fiscal year 1997; and
4. The transaction of such other business as may properly come before
the meeting.
Shareholders of record at the close of business on March 21, 1997 will be
entitled to receive notice of, and to vote at, the meeting and any adjournment
thereof. Additional copies of the proxy material may be obtained from the
Company's Corporate Secretary.
By order of the Board of Directors,
ELIZABETH M. BEDEWI,
Senior Vice President, Treasurer,
and Corporate Secretary
Phoenix, Arizona
April 7, 1997
MANY SHAREHOLDERS OWN LESS THAN 100 SHARES. ALL VOTES ARE IMPORTANT. PLEASE
SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. YOU MAY REVOKE YOUR
PROXY AT ANY TIME BEFORE THE SHARES ARE VOTED AT THE MEETING.
<PAGE> 3
NEW MEXICO AND ARIZONA LAND COMPANY
3033 NORTH 44TH STREET, SUITE 270
PHOENIX, ARIZONA 85018
PROXY STATEMENT
MAILING DATE: ON OR ABOUT APRIL 7, 1997
VOTING AND OTHER MATTERS
GENERAL. The enclosed proxy is solicited by the Board of Directors of New
Mexico and Arizona Land Company, an Arizona corporation (the "Company" or "NZ"),
for use at the 1997 Annual Meeting of Shareholders to be held on May 16, 1997
(the "1997 Annual Meeting"). If the accompanying proxy is signed and returned,
the shares represented thereby will be voted in accordance with any directions
on the proxy. If a proxy does not specify how the shares represented thereby are
to be voted in connection with the matters listed thereon, it is intended that
it will be voted for the matters listed on the accompanying proxy. A shareholder
may revoke the proxy at any time prior to the voting thereof by giving due
notice of such revocation to the Company, by executing and duly delivering a
subsequent proxy, or by attending the 1997 Annual Meeting. This Proxy Statement,
the accompanying proxy, and the Annual Report will be mailed to the shareholders
on or about April 7, 1997.
As of the date of this Proxy Statement, the Company knows of no matters to
be brought before the 1997 Annual Meeting other than those referred to in the
accompanying notice of the 1997 Annual Meeting. If other matters are properly
presented, however, the Proxy Committee members, Mr. Renneckar and Ms. Bedewi,
will have discretion to vote thereon according to their best judgment.
RECORD DATE. The Board of Directors has fixed the close of business on March
21, 1997 as the record date for the determination of shareholders entitled to
notice of the 1997 Annual Meeting, and to vote at it and any adjournment
thereof.
PROXY SOLICITATION. The Company will bear the cost of proxy solicitation for
the 1997 Annual Meeting. In addition to solicitation by mail, certain directors,
officers, and regular employees of the Company may, without compensation other
than their regular salaries and fees, solicit proxies personally, by telephone,
or electronically. The Company will reimburse brokerage firms and others for
expenses in forwarding solicitation material to beneficial owners.
VOTING. Except with respect to the election of directors, each share is
entitled to one vote upon each matter presented for action. The presence in
person or by proxy of a majority of the outstanding shares entitled to vote is
required to constitute a quorum at the 1997 Annual Meeting. The affirmative vote
of a majority of the shares then represented at the meeting and entitled to vote
will constitute the act of the shareholders. Abstentions are counted as "shares
present" for purposes of determining the presence of a quorum, and have the
effect of a vote "against" any matter as to which they are specified. Broker
non-votes with respect to any matter are not considered "shares present" and
will not affect the outcome of the vote on such matter. With respect to the
election of directors, shareholders have cumulative voting rights in the
election of directors: each shareholder is entitled to vote the number of shares
owned for as many persons as there may be directors to be elected; or the
shareholder may cumulate the shares and give one nominee all of the
shareholder's votes, multiplied by the number of directors to be elected; or the
shareholder may distribute votes among as many nominees as he or she thinks fit
to serve. The enclosed proxy does not seek discretionary authority to cumulate
votes in the election of directors.
2
<PAGE> 4
VOTING SECURITIES, PRINCIPAL HOLDERS, AND INSIDER OWNERSHIP
On February 6, 1997, there were 3,012,886 shares of common stock
outstanding, no par value ("Common Stock"); the Company has issued no other
category of stock. The following table sets forth beneficial ownership of Common
Stock of the Company as of February 6, 1997.
<TABLE>
<CAPTION>
Percent of
Number of Common
Shares Stock
Beneficially Beneficially
Owned (1) Owned
--------- -----
Beneficial Owner
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Elizabeth M. Bedewi .......................... 9,437 *
Senior Vice President, Treasurer, and
Corporate Secretary
John C. Lucking .............................. 4,270 *
Director
William A. Pope .............................. 13,223(2) *
President and CEO
Arnold L. Putterman .......................... 32,400(3) 1.1%
Director
Stephen E. Renneckar ......................... 2,576 *
Chairman of the Board
Ronald E. Strasburger ........................ 2,213 *
Director
Joe D. Sphar ................................. 11,984 *
Vice President - Minerals and
Assistant Corporate Secretary
Robert Wertheim .............................. 4,529(4) *
Director
Richard A. Wessman ........................... 2,871 *
Director
Directors and Officers as a group (9 persons) 83,503 2.77%
5% SHAREHOLDERS
Sun NZ L.L.C (5).............................. 1,507,871(6) 50.05%
Dimensional Fund Advisors Inc. ............... 161,175(7) 5.35%
</TABLE>
- ----------
* Less than 1% of outstanding shares of Common Stock
(1) The numbers of shares shown and corresponding percentages shown include
shares subject to restrictions under the Company's Restricted Stock
Plan and shares owned of record by the listed person's minor children
and spouse and by other related individuals and entities over whose
shares such person has custody, voting control, or power of
disposition. There are no shares of Common Stock which any of the
persons or entities listed above have a right to acquire within 60 days
of February 6, 1997.
(2) This amount includes 1,100 shares that Mr. Pope holds as custodian for
his children and 10,273 shares that Mr. Pope holds indirectly through
Sterling Pacific Assets, Inc., which he controls. In addition, Mr.
Pope, as the appointed nominee of Sun NZ L.L.C., may be deemed to have
shared voting and dispositive power with respect to the 1,507,871
shares owned by Sun NZ L.L.C.("Sun NZ"). Mr. Pope disclaims beneficial
ownership of the Sun NZ shares. Mr. Pope's address is c/o SunChase
Holdings, Inc., 2525 East Camelback Road, Suite 888, Phoenix, Arizona
85016.
(3) Mr. Putterman may be deemed to own beneficially an additional 36,376
shares of Common Stock held by relatives of Mr. Putterman as well as
5,075 shares owned by Somers Manor Nursing Home of which Mr. Putterman
is an officer. Mr. Putterman disclaims beneficial ownership of such
shares.
(4) This amount includes 1,210 shares that Mr. Wertheim holds indirectly
through Charter SW Commercial, Inc., which he controls.
(5) Sun NZ owns 1,507,871 of the outstanding Common Stock of the Company.
Pursuant to a Loan Agreement, dated July 28, 1994, between Sun NZ and
Bank One, Arizona, NA ("Bank One"), and in connection with Bank One's
loan of $4.9 million to Sun NZ, Sun NZ pledged to Bank One 1,187,106
shares of the Company owned by Sun NZ.
(6) Sun NZ, an Arizona limited liability company, has shared voting and
dispositive power over 1,507,871 shares of the Company's
3
<PAGE> 5
Common Stock. Sun NZ is managed by Sun NMA, Inc., an Arizona
corporation, and William A. Pope serves as President of Sun NMA, Inc.
By virtue of their status as managing member of Sun NZ and president of
the managing member, Sun NMA, Inc. and Mr. Pope, respectively, share
with Sun NZ voting and dispositive power of the 1,507,871 shares of
Common Stock owned by Sun NZ. The information contained in this
footnote was obtained from a Schedule 13D dated April 24, 1994, filed
by Sun NZ with the Securities and Exchange Commission. The address of
Sun NZ L.L.C. is 2525 E. Camelback Road, Suite 888, Phoenix, Arizona
85016.
(7) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor under Section 203 of the Investment Advisors Act of 1940, is
deemed to have beneficial ownership of 161,175 shares of Common Stock
of the Company as of December 31, 1996, all of which shares are held in
portfolios of DFA Investment Dimensions Group, Inc. (the "Fund"), a
registered open-ended investment company, or in series of the DFA
Investment Trust Company (the "Trust"), a Delaware business trust, or
the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, with respect to all of
which Dimensional serves as investment manager.
Dimensional has sole dispositive power over all 161,175 shares. In
addition, Dimensional has sole voting power over 103,418 shares and
shares voting power with the Fund and the Trust with respect to 57,757
shares. Persons who are officers of Dimensional also serve as officers
of the Fund and the Trust, each an open-end management investment
company registered under the Investment Company Act of 1940. In their
capacities as officers of the Fund and the Trust, these persons vote
30,042 additional shares which are owned by the Fund and 27,715 shares
which are owned by the Trust. Dimensional disclaims beneficial
ownership of all such shares. The information contained in this
footnote was obtained from a Schedule 13G dated February 13, 1997,
filed by Dimensional Fund Advisors with the Securities Exchange
Commission. The address of Dimensional is 1299 Ocean Avenue, 11th
Floor, Santa Monica, California 90401.
AGENDA ITEM NO. 1
ELECTION OF DIRECTORS
NOMINEES FOR TERMS AS CLASS A DIRECTORS
TERMS TO EXPIRE AT THE 1997 ANNUAL MEETING
The following individuals have been nominated as Class A Directors to serve
until the 1999 Annual Meeting of Shareholders or until their successors are duly
elected and qualified. Unless shareholders withhold authority, their proxies
will be voted for the election of these nominees. If any nominee is unable to
serve at the time of the meeting (which is not anticipated), the proxies will be
voted for a substitute nominee designated by the Board of Directors. THE BOARD
RECOMMENDS A VOTE FOR THIS AGENDA ITEM ELECTING THE NOMINEES TO SERVE AS CLASS A
DIRECTORS OF THE COMPANY.
<TABLE>
<CAPTION>
Shares
Director owned
Name Since at 2/6/97
---- ----- ---------
<S> <C> <C> <C>
William A. Pope, 41 Since June 1994, Mr. Pope has served as 1995 13,223
President and Chief Executive Officer of the
Company. In addition, since 1993, Mr. Pope has
served as President and Chief Executive Officer
of SunChase Holdings, Inc. and its affiliated
companies. Prior to 1993, Mr. Pope served as
Executive Vice President and Chief Operating
Officer of SunChase Holdings, Inc. and its
affiliated companies. SunChase Holdings, Inc. is
engaged in the business of acquiring,
developing, managing, and marketing residential
and commercial properties in the United States
and wood products, fiber optic cable, and
computer software in the United States and
abroad.
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
Shares
Director owned
Name Since at 2/6/97
---- ----- ---------
<S> <C> <C> <C>
John C. Lucking, 53 Since 1995, Mr. Lucking has been self- 1993 4,270
employed as an Economist for Econ-Line, which
provides economic consulting services. From
1984 to 1994, Mr. Lucking served as an
Economist for Bank One, Arizona. Mr. Lucking
also serves as a Trustee of the Tax Free Trust of
Arizona (Mutual Fund of Arizona Municipal
Bonds).
Ronald E. Strasburger, 58 Since 1993, Mr. Strasburger has been employed 1994 2,213
as Acquisition Manager by Sterling Pacific
Management Services, Inc., which is in the
business of portfolio purchases and sales. From
1991 to 1993, he was self-employed as a
consultant for the review, negotiation, and
disposition of complex portfolios for various
institutions after being employed by the
Resolution Trust Corporation from 1990 to
1991.
CONTINUING IN OFFICE AS CLASS B DIRECTORS
TERMS TO EXPIRE AT THE 1998 ANNUAL MEETING
Arnold L. Putterman, 58 Mr. Putterman is an attorney in private practice 1988 32,400
in New York City. In addition, since 1970, Mr.
Putterman has been a partner of SNF
Management Services. SNF Management
Services is involved in the development and
management of health facilities and commercial
real estate.
Stephen E. Renneckar, 52 Since October 1992, Mr. Renneckar served as 1994 2,576
Vice President and General Counsel of
SunChase Holdings, Inc., which is engaged in
the business of acquiring, developing,
managing, and marketing residential and
commercial properties in the United States and
wood products, fiber optic cable, and computer
software in the United States and abroad. Prior
to joining SunChase Holdings, Inc., Mr.
Renneckar was a partner with the law firm of
O'Connor Cavanagh in Tucson, Arizona.
Robert Wertheim, 64 Since 1976, Mr. Wertheim has served as 1981 4,529
Chairman, President, and Chief Executive
Officer of The Charter Companies, Albuquerque,
including Charter Bank for Savings FSB, Charter
SW Commercial, Inc., and Charter Insurance
Services, Inc.
</TABLE>
5
<PAGE> 7
<TABLE>
<CAPTION>
Shares
Director owned
Name Since at 2/6/97
---- ----- ---------
<S> <C> <C> <C>
Richard A. Wessman, 54 Since January 1993, Mr. Wessman has been 1994 2,871
President of Sterling Pacific Assets, Inc., a
property and financial management company. From
October 1978 to April 1992, he was a partner in
the accounting firm of Ernst & Young. Mr.
Wessman served as CFO of CSY Investments from
May 1992 until December 1992.
</TABLE>
MEETINGS OF THE BOARD AND ITS COMMITTEES
The Company's Board of Directors met five times in 1996, and all members
attended 75% or more of those meetings and the meetings of the committees to
which they are assigned. There are three standing committees: Audit; Executive;
and Compensation and Nominating.
Audit. This committee met twice in 1996, and is composed of Arnold L.
Putterman, Robert Wertheim, and Richard A. Wessman (Chairman). The committee
reviews with the Company's independent public accountants the annual audit plan,
the scope and results of the audit, and internal control procedures.
Compensation and Nominating. This committee met two times in 1996, and is
composed of John C. Lucking (Chairman), Stephen E. Renneckar, and Ronald E.
Strasburger. The committee administers the Company's salary, bonus, and
restricted stock plans. It also recommends nominees to fill vacancies on the
Board of Directors. Recommendations for nominees to the Board of Directors may
be sent to the Chairman of the Compensation and Nominating Committee, in care of
the Company's Corporate Secretary.
Executive. This committee did not meet in 1996. It is composed of John C.
Lucking, Stephen E. Renneckar (Chairman), and Richard A. Wessman. It is
empowered to act in the absence of, but as limited by, the Board of Directors.
DIRECTORS FEES AND EXPENSES
BOARD MEMBERS ARE REIMBURSED FOR EXPENSES INCURRED WHILE ATTENDING MEETINGS
AND ARE PAID THE FOLLOWING COMPENSATION EACH YEAR.
Director fees:
<TABLE>
<S> <C>
Annual retainer: $6,000
Board meetings: $700 for each meeting attended
Committee meetings: $500 for each meeting attended, payable only to nonemployee directors
Telephone meetings: $300 for each meeting attended, payable only to nonemployee directors
</TABLE>
Director bonus:
On November 22, 1996, the Company issued to each director as bonus
compensation (a) 750 shares of the Company's Common Stock, valued at $12.50 per
share, the closing price of the Company's Common Stock on the American Stock
Exchange on November 22, 1996, and (b) $3,750.00. In addition to this
director bonus, Mr. Renneckar received a bonus of $100,000 for his service as
Chairman of the Board of Directors.
There are no other arrangements or agreements between the Company and any
Board member.
6
<PAGE> 8
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation awarded to or paid by the Company and its subsidiaries to
the Chief Executive Officer and the two other most highly compensated executive
officers of the Company for services rendered during the fiscal years ended
December 31, 1996, 1995, and 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
----------------------------------
ANNUAL COMPENSATION
----------------------------------- SECURITIES PAYOUTS
OTHER RESTRICTED UNDERLYING -------
FISCAL ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND POSITION(1) YEAR SALARY BONUS COMPENSATION AWARDS(2) SARs PAYOUTS COMPENSATION
- -------------------- ---- ------ ----- ------------ --------- ---- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William A. Pope 1996 $ 20,000 $120,000 0 0 0 0 $ 21,925(3)
President & Chief 1995 20,000 80,000 0 0 0 0 18,025
Executive Officer 1994(4) 0 0 0 0 0 0 0
Elizabeth M. Bedewi(5) 1996 $ 90,000 $ 45,000 0 0 0 0 $ 3,916(7)
Senior Vice President, 1995 90,000 20,000 0 0 0 0 3,982
Treasurer, and Corporate
Secretary
Joe D. Sphar(6) 1996 $ 80,000 $ 40,000 0 0 0 0 $ 3,630(7)
Vice President - Minerals
Assistant Corporate
Secretary
</TABLE>
- ----------
(1) There are no other executive officers of the Company whose total annual
salary and bonus for the 1996 fiscal year exceeded $100,000. As of
February 18, 1997, R. Randy Stolworthy, age 40, has been serving as
Executive Vice President and Chief Operating Officer of the Company,
however, since Mr. Stolworthy did not serve as an executive officer in
1996, he is not listed in the "Summary Compensation Table" or under
"Voting Securities, Principal Holders, and Insider Ownership." Prior to
joining the Company, from 1991 to 1997, Mr. Stolworthy founded and
operated RR Stolworthy, Inc., a privately held real estate investment
and development company based in Phoenix.
(2) There were no grants of restricted stock during the 1996, 1995, or 1994
fiscal years. Neither Mr. Pope nor Mr. Sphar hold any shares of
restricted stock. At the Company's fiscal year end, December 31, 1996,
Ms. Bedewi held 733 shares of restricted stock, at a value of $8,521 on
December 31, 1996. Holders of restricted stock are entitled to receive
all dividends paid by the Company.
(3) Mr. Pope received $8,800 as fees for serving on the Board of Directors
in fiscal year 1996. In addition, on November 22, 1996, Mr. Pope
received, as bonus compensation for his service on the Board of
Directors, $3,750 in cash and 750 shares of Common Stock, valued at
$12.50 per share, the closing price of the Common Stock on the American
Stock Exchange on November 22, 1996. See "Directors Fees and Expenses."
Mr. Pope is not a participant in the Company's 401(k) Plan.
(4) Mr. Pope was appointed President and Chief Executive Officer on June
27, 1994. He elected not to take any compensation for his services to
the Company for fiscal year 1994. See Mr. Pope's biographical
information under the heading "Election of Directors, Nominees for
Terms as Class A Directors" for further information regarding Mr. Pope.
(5) Ms. Bedewi's annual compensation did not exceed $100,000 during fiscal
year 1994. Ms. Bedewi, age 59, has served as the Senior Vice President
and Treasurer of the Company since 1989 and has served as Corporate
Secretary since 1996.
(6) Mr. Sphar's annual compensation did not exceed $100,000 during the 1995
and 1994 fiscal years. Since April 1973, Mr. Sphar, age 56, has served
as the Vice President - Minerals and Assistant Corporate Secretary of
the Company.
(7) Represents 1996 401 (k) Plan contributions.
NEW MEXICO AND ARIZONA LAND COMPANY DEFINED BENEFIT PLAN. All employees who have
completed a twelve (12) month period
7
<PAGE> 9
in which the employee has performed 1,000 Hours of Service (as defined in the
New Mexico and Arizona Land Company Restated Defined Benefit Plan (the "Plan"))
are eligible to participate in the Plan. Non-employee directors of the Company
may not participate. Normal retirement age is 65, but eligible employees may
elect to retire at age 60 with a reduced pension. The Plan was restated on
December 6, 1994 (the "Restated Plan") pursuant to Federal law. A participant's
gross annual pension under the Restated Plan is equal to the sum of (1) 1.5% of
such participant's average annualized total compensation paid during the highest
paid 60 consecutive months multiplied by years of service (up to a maximum of 25
years), plus (2) .65% of such average annualized compensation in excess of the
applicable Social Security benefit multiplied by years of service (up to a
maximum of 25 years). However, in no event will the benefit under the Restated
Plan be less than the "protected accrued benefit" under the Prior Plan (defined
below). For employees hired before July 23, 1982, the "protected accrued
benefit" is 50% of the average annualized total compensation paid during the
highest-paid 60 consecutive months, less 60% of the applicable Social Security
benefit (the "Prior Plan"). Employees hired before July 23, 1982 will receive
the greater of the benefit calculated under the Restated Plan and the Prior
Plan. The following table illustrates the annual protected benefit under the
Prior Plan:
PROTECTED ACCRUED BENEFIT, EMPLOYED BEFORE 7/23/82
<TABLE>
<CAPTION>
AVG. ANNUAL
ANNUAL PENSION
SALARY -------
------
<S> <C>
$ 25,000 .......... $ 6,294
50,000 .......... 16,108
75,000 .......... 27,802
100,000 .......... 40,302
125,000 .......... 52,802
150,000 .......... 65,302
175,000 .......... 77,802
185,000 .......... 82,802
</TABLE>
The following table illustrates annual pension allowances under the Restated
Plan:
EMPLOYED AFTER 7/23/82, RESTATED FORMULA
<TABLE>
<CAPTION>
YEARS OF SERVICE
PENSION --------------------------------------------
EARNINGS 10 15 20 30
- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 25,000 ......... $ 3,750 $ 5,625 $ 7,500 $ 11,250
50,000 ......... 8,041 11,362 15,000 22,500
75,000 ......... 13,416 19,424 25,129 36,497
100,000 ......... 18,791 27,487 35,879 52,622
125,000 ......... 24,166 35,549 46,629 57,747
150,000 ......... 29,541 43,612 57,379 84,872
</TABLE>
Mr. Pope is not eligible to participate in the Plan. Ms. Bedewi's estimated
credited years of service is 23 years. Ms. Bedewi's 1996 compensation covered by
the Prior Plan and the Restated Plan is $90,000 and $135,000, respectively. The
compensation covered by the Prior Plan is fixed at Ms. Bedewi's 1989 total
annual compensation, which was $78,000. The compensation covered by the Restated
Plan is Ms. Bedewi's total annual compensation as reported in the "Summary
Compensation Table."
Mr. Sphar's estimated credited years of service is 25 years. Mr.
Sphar's 1996 compensation covered by the Prior Plan and the Restated Plan is
$80,000 and $120,000, respectively. The compensation covered by the Prior Plan
is fixed at Mr. Sphar's 1989 total annual compensation, which was $71,300. The
compensation covered by the Restated Plan is Mr. Sphar's total annual
compensation as reported in the "Summary Compensation Table."
Payments to the retirement plan trust fund are voluntary on the part of the
Company, and may be discontinued at any time. In that event, however, the trust
assets must be used to provide pensions in the manner set forth in the Plan. The
Plan is self-funded, and Company
8
<PAGE> 10
contributions are no longer necessary.
The Plan was "frozen" on December 31, 1996. No gain or loss was
recognized by the Company. As a result of the "freeze," the benefit accruals
cease until such time as the Company decides to either terminate the Plan or
unfreeze the benefits.
COMPENSATION AND NOMINATING COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation and Nominating Committee is composed of John C.
Lucking, Stephen E. Renneckar, and Ronald E. Strasburger. The members of the
Compensation and Nominating Committee are not employees of the Company.
The Compensation and Nominating Committee reviews and determines the amount
of compensation paid to its executive officers. The Compensation Committee
advised the Board of Directors that the compensation levels for the Company's
executive officers during fiscal 1996 did not bear a specific relationship to
the Company's performance. Rather, executive compensation was set at levels
designed to retain the Company's executive officers and the Compensation and
Nominating Committee's assessment of the performance of the officer and the
Company, respectively, is subjective and not subject to specific criteria.
Dated: March 14, 1997
New Mexico and Arizona Land Company
Compensation and Nominating Committee:
John C. Lucking (Chairman)
Stephen E. Renneckar
Ronald E. Strasburger
9
<PAGE> 11
STOCK PRICE PERFORMANCE GRAPH
The following compares the total return on the Company's Common Stock for
the period December 31, 1991 through December 31, 1996 with the cumulative total
return on the AMEX Composite Index, and an industry index composed of SIC Code
651: Real Estate Operators and Lessors. The comparison assumes that $100 was
invested on December 31, 1991 in the Company's Common Stock and in each of the
comparison indices, and assumes reinvestment of dividends.
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
New Mexico & Arizona Land 100 143.75 150.00 131.25 200.00 213.15
Co.
- ---------------------------------------------------------------------------------------------------------
Industry Index 100 106.45 128.12 121.08 138.93 201.78
- ---------------------------------------------------------------------------------------------------------
Amex Composite Index 100 101.37 120.44 106.39 137.13 144.70
- ---------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 12
AGENDA ITEM NO. 2
APPROVAL OF THE ADOPTION OF
ARTICLE EIGHTH TO
THE COMPANY'S ARTICLES OF INCORPORATION
DESCRIPTION OF PROPOSED AMENDMENT
Section 10-202B.2 of the Arizona Corporate Code (the "Code"), which
became effective on July 20, 1996, permits an Arizona corporation to include a
provision in its articles of incorporation permitting or requiring the
corporation to indemnify a director or officer against liability to any person
for any action taken, or any failure to take any action, as a director or
officer, except liability for any of the following:
(i) the amount of a financial benefit received by a director or
officer to which the director or officer is not entitled;
(ii) an intentional infliction of harm on the Company or its
shareholders;
(iii) an approval of a specified unlawful distribution by the
Company to its shareholders (in the case of a director only);
and
(iv) an intentional violation of criminal law.
On March 14, 1996, the Board of Directors adopted, subject to
shareholder approval at the 1997 Annual Meeting, a proposed amendment to the
Company's Articles of Incorporation that is consistent with Section 10-202B.2 of
the Code. The proposed amendment, a copy of which is attached as Exhibit A to
this Proxy Statement would require the Company to indemnify a director or
officer against liability to any person for any action taken, or any failure to
take any action, as a director or officer, except liability for any of the four
matters described in the preceding paragraph.
PURPOSE AND EFFECT OF THE AMENDMENT
The four matters for which a corporation may not indemnify a director
or officer are identical to the four matters for which a director's liability
cannot be eliminated pursuant to Code Section 10-202B.1, which was the basis for
the amendment to Article Seventh of the Article of Incorporation adopted at the
1996 Annual Meeting of Shareholders (the "1996 Annual Meeting"). Like Section
10-202B.1, Section 10-202B.2 is based on the Model Business Corporation Act and
is designed generally to allow an Arizona corporation to indemnify its directors
and officers for unintentional errors or the directors' or officers' exercise of
judgment, but not for matters involving intentional wrongdoing or bad faith.
Unlike Section 10-202B.1, which allows a corporation to eliminate the monetary
liability of its directors in suits brought by the corporation or its
shareholders, Section 10-202B.2 allows a corporation to indemnify directors and
officers against liability to any person (including the corporation and its
shareholders).
Under the Code, a majority of the Company's disinterested directors,
independent legal counsel, or the Company's shareholders must determine whether
a director or officer has met the requisite standard of conduct to be eligible
for indemnification. The adoption of the proposed amendment would change the
standard of conduct that a director or officer must meet in order to be eligible
for indemnification by the Company. Under the proposed amendment, a director or
officer would be indemnified unless the conduct involved the four exceptions
described above.
Currently, the Company's Articles of Incorporation are silent as to
indemnification of a director or officer of the Company. At the 1996 Annual
Meeting, the shareholders approved the deletion of Article Fourth of the
Company's Articles of Incorporation because (i) the standard of conduct that an
indemnified party was required to meet was no longer consistent with Arizona law
and (ii) the indemnification provision provided that the Board of Directors must
determine whether a director or officer had met the required standard of
conduct, while the Code provided a corporation with greater flexibility in
making such determination. The Board of Directors believes that adoption of the
proposed amendment would provide directors and officers with greater certainty
about those matters for which they will be indemnified. In addition, the Company
believes that adoption of the proposed amendment will enable the Company
11
<PAGE> 13
to continue to attract and retain qualified directors and officers. The Board of
Directors believes that concerns over possible personal liability can hamper the
decision-making process of directors and officers to the detriment of the
Company. The Board of Directors believes that the level of scrutiny, diligence,
and care exercised by directors and officers of the Company will not be lessened
by adoption of the proposed amendment.
Generally, the Company has not experienced difficulty in recruiting and
retaining qualified directors and officers, and the proposed amendment is not
being proposed in response to any resignation or threat of resignation of any
director or officer, nor is it being proposed in response to any refusal by any
director or officer to continue to serve or, in the case of any director, to
stand for re-election. The Company is not aware of any pending or threatened
claim which would be covered by the proposed amendment.
VOTE REQUIRED AND BOARD RECOMMENDATION
Approval of the proposed amendment requires an affirmative vote of a
majority of the Company's outstanding shares of Common Stock. The Company's
directors acknowledge that they have a direct personal interest in having the
proposed amendment adopted. The Board believes that it is in the best interest
of the Company and its shareholders for the Company's shareholders to so amend
the Company's Articles of Incorporation.
THE BOARD OF DIRECTORS THEREFORE RECOMMENDS A VOTE FOR THIS AGENDA ITEM TO ADOPT
ARTICLE EIGHTH TO THE COMPANY'S ARTICLES OF INCORPORATION.
12
<PAGE> 14
AGENDA ITEM NO. 3
RATIFICATION OF AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP to audit the
accounts of the Company for fiscal year 1997 and requests that this selection be
ratified by the shareholders. KPMG Peat Marwick LLP representatives audited the
accounts of the Company for fiscal year 1996 and will be present at the 1997
Annual Meeting to make a statement if they so desire and to respond to
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITOR FOR THE COMPANY FOR
FISCAL YEAR 1997.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's directors, officers, and persons owning more than 10% of
a registered class of the Company's registered equity securities to file reports
of ownership and changes of ownership with the Securities and Exchange
Commission. Based on its review of copies of such forms it received, the Company
believes that during 1996 all applicable filing requirements were complied with.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
A proposal submitted by a shareholder and intended for inclusion in the
proxy statement for the 1998 Annual Meeting of Shareholders must be received by
the Corporate Secretary of the Company by January 15, 1998.
<PAGE> 15
EXHIBIT A
AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
NEW MEXICO AND ARIZONA LAND COMPANY
1. Article Eighth is added, reading as follows:
"EIGHTH: The Corporation shall indemnify any and all of its existing
and former directors and officers to the fullest extent permitted by Section
10-202B.2 of the Arizona Business Corporation Act. If the Arizona Business
Corporation Act is amended to authorize corporate action further permitting
indemnification of directors or officers, the Corporation shall indemnify its
existing and former directors and officers to the fullest extent permitted by
the Arizona Business Corporation Act, as amended.
Any repeal or modification of this Article Eighth shall not adversely
affect any right or protection of existing or former directors or officers
existing hereunder with respect to any act or omission occurring prior to or at
the time of such repeal or modification."
<PAGE> 16
NEW MEXICO AND ARIZONA LAND COMPANY
1997 PROXY
Solicited on behalf of the Board of Directors of New Mexico and Arizona Land
Company. Directors recommend a vote "FOR" Agenda Items 1 through 3. The
undersigned shareholder of New Mexico and Arizona Land Company hereby appoints
Stephen E. Renneckar and Elizabeth M. Bedewi, or either of them, as proxies of
the undersigned, each with power of substitution, at the 1997 Annual Meeting of
Shareholders of the Company to be held in Phoenix, Arizona on Friday, May 16,
1997 at 9:30 a.m. and any adjournments thereof, to vote all common shares of the
Company held or owned by the undersigned, as follows:
1. ELECTION OF CLASS A DIRECTORS: William A. Pope, John C. Lucking, Ronald E.
Strasburger
____FOR all nominees (except as marked below)
____WITHHOLD AUTHORITY to vote for nominees
To withhold authority to vote for individual nominees, write those nominees'
names immediately below:
2. APPROVAL OF THE ADOPTION OF ARTICLE EIGHTH TO THE COMPANY'S ARTICLES OF
INCORPORATION:
____ FOR ____ AGAINST ____ ABSTAIN
3. RATIFICATION OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITOR FOR THE COMPANY
FOR FISCAL YEAR 1997:
____ FOR ____ AGAINST ____ ABSTAIN
In their discretion, the Proxies are authorized to vote upon other business as
may properly come before the meeting.
The proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted "FOR" Agenda Items 1 through 3. The right to revoke this proxy at any time
before it is voted is reserved.
Date:____________________________________________________
Signature:_______________________________________________
Signature:_______________________________________________
(Sign as shown. If held jointly, all
holders should sign. If held in a
certain capacity, so state.)
