<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ASSET INVESTORS CORPORATION
- --------------------------------------------------------------------------------
(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), 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>
[LOGO]
March 29, 1996
To Our Shareowners:
You cordially are invited to the 1996 Annual Meeting of Shareowners (the
"Meeting") of Asset Investors Corporation (the "Company") to be held at 3600
South Yosemite Street, Lower Level Conference Room A, Denver, Colorado on
Tuesday, May 28, 1996, at 8:00 a.m., local time.
The formal notice of the Meeting and a proxy statement describing the
matters to be acted upon at the Meeting are in the following pages.
Enclosed is a proxy that enables you to vote your shares on the matters to
be considered at the Meeting even if you are unable to attend the Meeting.
Please mark the proxy to indicate your vote, date and sign the proxy and return
it in the enclosed postage-paid envelope as soon as possible for receipt prior
to the Meeting. Shareowners also are entitled to vote on any other matters that
properly come before the Meeting.
WHETHER YOU OWN FEW OR MANY SHARES OF STOCK, PLEASE BE SURE YOU ARE
REPRESENTED AT THE MEETING BY ATTENDING IN PERSON OR BY RETURNING YOUR PROXY AS
SOON AS POSSIBLE.
Sincerely,
/s/ Larry A. Mizel
Larry A. Mizel
CHAIRMAN OF THE BOARD
<PAGE>
[LOGO]
ASSET INVESTORS CORPORATION
3600 SOUTH YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(303) 793-2703
--------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
--------------------------------------------------
To Our Shareowners:
The 1996 Annual Meeting of Shareowners (the "Meeting") of Asset Investors
Corporation (the "Company") will be held at 3600 South Yosemite Street, Lower
Level Conference Room A, Denver, Colorado, on Tuesday, May 28, 1996, at 8:00
a.m., local time, to consider and act upon:
1. the election of Messrs. Richard L. Robinson and Tim Schultz, two Class I
directors, to terms expiring in 1999;
2. an amendment to the Company's 1986 Stock Option Plan, as amended and
restated November 15, 1990 (the "Plan") to eliminate dividend equivalent
rights; and, in connection therewith, to permit the grant of shares of
the Company's Common Stock; and
3. such other business as properly may come before the Meeting and any
adjournments or postponements thereof.
Only shareowners of record at the close of business on March 6, 1996, the
record date, will be entitled to vote at the Meeting.
The Board of Directors of the Company desires to have maximum representation
at the Meeting and requests that you mark, date, sign and timely return the
enclosed proxy in the postage-paid envelope provided.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Daniel S. Japha
Daniel S. Japha
SECRETARY
March 29, 1996
<PAGE>
[LOGO]
ASSET INVESTORS CORPORATION
3600 SOUTH YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(303) 793-2703
-----------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREOWNERS
MAY 28, 1996
-----------------------------------------
To Our Shareowners:
This proxy statement (the "Proxy Statement") is furnished in connection with
the solicitation by the Board of Directors of Asset Investors Corporation (the
"Company") of proxies to be used at the 1996 Annual Meeting of Shareowners of
the Company (the "Meeting") to be held at 3600 South Yosemite Street, Lower
Level Conference Room A, Denver, Colorado, on Tuesday, May 28, 1996, at 8:00
a.m., local time, and at any adjournments or postponements thereof. The Meeting
is being held for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareowners. This Proxy Statement, the accompanying proxy card and
the Notice of Annual Meeting (the "Proxy Materials") are first being provided to
shareowners beginning on or about March 29, 1996.
GENERAL INFORMATION
SOLICITATION
The enclosed proxy is being solicited by the Board of Directors of the
Company. In addition to solicitations by mail, solicitations may be made by
personal interview, telephone and telegram by directors and officers of the
Company. No compensation will be paid to the directors and officers of the
Company for the solicitation of proxies. The Company will employ Kissell-Blake
Inc., a paid proxy solicitor to assist the Company in the solicitation of
proxies at a cost of approximately $8,000. The costs of solicitation of proxies
will be paid solely by the Company. The Company will reimburse banks, brokers
and others holding shares in their names or the names of nominees or otherwise
for reasonable out-of-pocket expenses incurred in sending proxies and proxy
materials to the beneficial owners of such shares.
VOTING RIGHTS AND VOTES REQUIRED
Holders of shares of Asset Investors Corporation common stock, par value
$.01 per share (the "Common Stock"), at the close of business on March 6, 1996
(the "Record Date") are entitled to notice of, and to vote at, the Meeting. On
the Record Date, 24,355,862 shares of Common Stock were outstanding. The
presence, in person or by proxy, of holders of a majority of the shares of
Common Stock entitled to vote at the Meeting constitutes a quorum for the
transaction of business at the Meeting.
Each share of Common Stock outstanding on the Record Date is entitled to one
vote on all matters presented at the Meeting. The affirmative vote of a majority
of the votes cast at the Meeting by shareowners present or represented and
entitled to vote on the proposal is required for the election of directors and
the proposal (the "Option Plan Amendment Proposal") to amend the Company's 1986
Stock Option Plan, as amended and restated November 15, 1990, as further amended
(the "Plan") to eliminate dividend equivalent rights ("DERs") and to permit the
grant of shares of Common Stock to participants in the Plan who consent to the
elimination of DERs.
<PAGE>
Abstentions will be treated as shares present and entitled to vote for
purposes of determining the presence of a quorum but will not be considered as
votes cast in determining whether a matter has been approved by the shareowners.
If a broker or other record holder or nominee indicates on a proxy that it does
not have authority as to certain shares to vote on a particular matter, those
shares will not be considered as present and entitled to vote with respect to
that matter.
VOTING OF PROXIES
Shares of Common Stock represented by all properly completed and signed
proxies received in time for the Meeting will be voted as specified in the
proxy. Unless contrary instructions are indicated on the proxy, the shares of
Common Stock represented by such proxy will be voted "FOR" the election of
Messrs. Robinson and Schultz as directors of the Company and "FOR" the Option
Plan Amendment Proposal. Management and the Board of Directors of the Company
know of no other matters to be brought before the Meeting other than as
described herein. If any other matters are presented properly to the shareowners
for action at the Meeting and any adjournments or postponements thereof, the
proxy holders named in the enclosed proxy intend to vote in their discretion on
all matters on which the shares of Common Stock represented by such proxy are
entitled to vote.
REVOCABILITY OF PROXY
The giving of the enclosed proxy does not preclude the right to vote in
person should the shareowner giving the proxy so desire. A proxy may be revoked
at any time prior to its exercise by notice in writing sent to the Secretary of
the Company that the proxy is revoked, by presenting to the Company a
later-dated proxy or by attending the Meeting and voting in person.
ANNUAL REPORT
The Company's 1995 Summary Annual Report to Shareowners including the
Company's 1995 Annual Report on Form 10-K (the "Annual Report") contains
financial and other information about the activities of the Company, including
consolidated financial statements for the year ended December 31, 1995. An
Annual Report is being mailed with this Proxy Statement to all holders of record
on March 6, 1996. Neither the Company's 1995 Form 10-K nor the 1995 Summary
Annual Report to Shareowners is incorporated into this Proxy Statement or is to
be considered part of the Proxy Materials.
Upon written request addressed to the Secretary of the Company at the
address listed above, the Company will provide a copy of the Summary Annual
Report and 1995 Form 10-K to anyone whose proxy is being solicited in connection
with this Proxy Statement.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The By-laws of the Company provide for three classes of directors with
staggered terms of office. Directors elected to each class serve for terms of
three years and until the election and qualification of their successors or
until their earlier resignation, death, disqualification or removal from office.
The Company's Board of Directors consists of five members, including two Class I
directors whose terms expire in 1996, one Class II director whose term expires
in 1997 and two Class III directors whose terms expire in 1998. The By-laws of
the Company require that a majority of the Board of Directors of the Company and
each committee thereof be comprised of Independent Directors of the Company.
An Independent Director is defined in the Company's By-laws as a person "who
is not affiliated, directly or indirectly, with the person or entity responsible
for directing or performing the day-to-day business affairs of the corporation
(the advisor), including a person or entity to which the advisor subcontracts
substantially all of such functions, whether by ownership of, ownership interest
in, employment by, any material business or professional relationship with, or
by serving as an officer or director of, the advisor or an affiliated business
entity of the advisor." The Independent Directors of the Company are Messrs.
Kline, Robinson and Schultz.
2
<PAGE>
Vacancies on the Board of Directors may be filled by a majority of the
remaining members; provided, however, that the Independent Directors must
nominate the replacements for vacancies among the Independent Directors. Each
director appointed to fill a vacancy serves until the next annual meeting of
shareowners at which time the shareowners shall elect a director to serve the
remaining term of the class into which such director is elected.
At the Meeting, two Class I directors will be elected to a term expiring in
1999. Unless otherwise specified, the enclosed proxy will be voted "FOR" the
election of Messrs. Robinson and Schultz, the Board of Directors' slate of
nominees as Class I directors of the Company. Neither Management nor the Board
of Directors of the Company is aware of any reason why any nominee would be
unable to serve as a director. Discretionary authority may be exercised by the
proxy holders named in the enclosed proxy to vote for a substitute nominee
proposed by the Board of Directors if any nominee becomes unavailable for
election.
The Board of Directors held 11 meetings in 1995. During 1995, no director
attended fewer than 75% of the aggregate number of meetings of the Board of
Directors and any committee thereof on which he served.
The Audit Committee of the Board of Directors (the "Audit Committee") held
five meetings during 1995. Messrs. Kline (Chairman), Robinson and Schultz are
the current members of this committee. Among other things, the Audit Committee
reviews and approves the scope of the annual audit undertaken by the Company's
independent auditors and meets with them as necessary to review the progress and
results of their work as well as their recommendations. The Audit Committee also
reviews internal audit procedures and reporting systems of the Company.
The Nominating Committee of the Board of Directors (the "Nominating
Committee"), which held no meetings during 1995, is made up of the Independent
Directors. The Nominating Committee was formed to review the qualifications of
candidates and recommend candidates to the Board of Directors for selection as
nominees for election as directors. There is no established procedure for
submission of nominations by shareowners.
The Company does not have a Compensation Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF MESSRS.
ROBINSON AND SCHULTZ TO THE BOARD OF DIRECTORS OF THE COMPANY.
Certain information with respect to the nominees for election as Class I
directors, the continuing directors and the executive officers of the Company,
as of March 6, 1996, appears below and was furnished in part by each such
person.
Each executive officer of the Company serves for a term of one year and
until his or her successor has been elected and qualified or until his or her
earlier resignation or removal by the Board of Directors. There are no family
relationships among any of the directors and executive officers of the Company.
3
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD WITH THE COMPANY
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Larry A. Mizel....................................... 53 Chairman of the Board of Directors (Class II)
Spencer I. Browne.................................... 46 President, Chief Executive Officer and Director
(Class III)
Leslie B. Fox........................................ 37 Executive Vice President and Chief Operating Officer
Paris G. Reece III................................... 41 Executive Vice President and Chief Financial Officer
Daniel S. Japha...................................... 44 Senior Vice President, Secretary and General Counsel
Kevin J. Nystrom..................................... 36 Vice President and Chief Accounting Officer
Elliot H. Kline...................................... 55 Director(1) (Class III) and Chairman of the Audit
Committee and Member of the Nominating Committee
Richard L. Robinson.................................. 66 Director(1) (Class I) and Member of the Audit and
Nominating Committees
Tim Schultz.......................................... 48 Director(1) (Class I) and Member of the Audit and
Nominating Committees
</TABLE>
- ---------
1 Independent Directors
LARRY A. MIZEL has served as Chairman of the Board of Directors of the
Company since its organization and served as Chairman of the Board of Directors
of Financial Asset Management Corporation (the "Manager"), an indirect wholly
owned subsidiary of M.D.C. Holdings, Inc. ("Holdings"), from the date of the
Manager's organization through January 1992 and from September 1994 through the
present. Mr. Mizel also has served as Chairman of the Board of Directors of
Holdings since January 1972 and Chief Executive Officer of Holdings since
February 1988 and as Chairman of the Board of Directors of Commercial Assets,
Inc. ("Commercial Assets") since its organization in 1993. The Company owns
approximately 27% of the common stock of Commercial Assets.
SPENCER I. BROWNE has served as President and Chief Executive Officer of the
Company since August 1988 and as a Director of the Company since September 1988.
Mr. Browne also has served as President, Chief Executive Officer and a Director
of Commercial Assets since its organization in 1993. He also has served as
President and a Director of the Manager since October 1988. Mr. Browne has
served as President and a Director of Holdings since May 1990, Chief Operating
Officer from 1989 until September 1994 and Co-Chief Operating Officer since
September 1994.
LESLIE B. FOX has served as Executive Vice President and Chief Operating
Officer of the Company and of Commercial Assets since February 1995 and served
as a Vice President of the Company from November 1993 until February 1995. From
November 1993 until February 1995, she was Executive Vice President, Chief
Investment Officer and Assistant Secretary of Commercial Assets. From 1991 to
1993, Ms. Fox was Senior Vice President of NHP Capital Corp. in Washington,
D.C., a subsidiary of NHP, Inc. From 1987 to 1991, Ms. Fox was Vice President of
Finance/MIS at NHP Property Management Inc., also a subsidiary of NHP, Inc.
PARIS G. REECE III has served as Executive Vice President and Chief
Financial Officer of the Company and of Commercial Assets since February 1995.
Mr. Reece serves as Senior Vice President, Chief Financial Officer, Secretary
and Treasurer of Holdings. He was elected as a Vice President of Holdings in
August 1988, as Secretary in February 1990, as Chief Financial Officer in June
1990, as
4
<PAGE>
Treasurer in September 1993 and as Senior Vice President in September 1994. From
November 1977 until August 1988, Mr. Reece was employed by Occidental Petroleum
Corporation, a New York Stock Exchange-listed company headquartered in Los
Angeles, California, where he served in various capacities in the Corporate Tax
Department, most recently as the Director of Tax Planning.
DANIEL S. JAPHA has served as Senior Vice President, Secretary and General
Counsel of the Company and Commercial Assets since February 1995 and as
Assistant Secretary of the Company and Commercial Assets from August 1994 until
February 1995. He has served as General Counsel-Corporate and Assistant
Secretary of Holdings since April 1994 and served in similar capacities for the
Company and Commercial Assets from April 1994 until February 1995. Prior to
joining Holdings, Mr. Japha was Corporate Finance Counsel and Assistant
Secretary of Manville Corporation and Riverwood International Corporation from
May 1991 through March 1994. Prior to joining Manville Corporation, Mr. Japha
was engaged in private law practice in Denver, Colorado.
KEVIN J. NYSTROM has served as Vice President and Chief Accounting Officer
of the Company since January 1993 and has been employed by the Manager since
September 1992. Mr. Nystrom also has served in similar capacities for Commercial
Assets since its organization. Prior to joining the Manager, Mr. Nystrom held a
series of positions, most recently as a Senior Manager with Deloitte & Touche
LLP from January 1985 to August 1992.
ELLIOT H. KLINE has served as a Director of the Company since September
1988, as a member of the Audit Committee since December 1988, Chairman of the
Audit Committee since November 1990 and as a member of the Nominating Committee
since April 1989. Dr. Kline has served as Executive-in-Residence at Arizona
State University-West since August 1993. Dr. Kline served as President of In The
Interim Management Consulting, a firm specializing in consulting to
universities, from 1989 to 1993. Dr. Kline served as the Dean of the College of
Business Administration at the University of Denver from 1987 to 1989; as the
Dean and a Professor of the School of Business and Public Administration at the
University of the Pacific from 1977 to 1987; and as the Director and an
Associate Professor of the Institute of Public Affairs and Administration at
Drake University from 1970 to 1977. Dr. Kline has published articles in the
areas of organization and management, has served as consultant to numerous
private and public organizations and is active in many professional
organizations.
RICHARD L. ROBINSON has served as a Director of the Company and as a member
of the Nominating Committee since January 1990 and a member of the Audit
Committee since August 1993. Mr. Robinson has served as Chairman of the Board of
Directors and Chief Executive Officer of Robinson Dairy, Inc., a Denver-based
institutional dairy products manufacturer and distributor, since 1975 and prior
thereto served in various executive positions with that company for 20 years.
Mr. Robinson also serves as a director of First Bank System, Minneapolis,
Minnesota. He is active in numerous civic and charitable organizations, is past
chairman of the Greater Denver Chamber of Commerce and a past president of the
State Board of Agriculture, the governing body for the Colorado State University
System.
TIM SCHULTZ has been a Director of the Company since July 1994 and is a
member of the Audit and Nominating Committees. He is President-Elect of the
Boettcher Foundation, a Colorado not-for-profit, charitable corporation, and
from August 1994 until November 1995, he was Chairman and President of Colorado
Open Lands, a Colorado not-for-profit corporation. From 1990 until August 1994,
he was employed by the law firm of Arnold & Porter as a
Consultant-Corporate/Government Relations with responsibilities ranging from
serving as chairman of a large land trust to representing clients' needs in
connection with state and local government issues. From May 1987 to July 1990,
Mr. Schultz served as Executive Director of the State of Colorado Department of
Local Affairs and from November 1983 to May 1987, as Commissioner of Agriculture
for the State of Colorado Department of Agriculture, both cabinet level
positions. From 1987 to 1991, he served as Chairman of the Colorado Economic
Development Commission.
5
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Company's executive officers and directors are required under the
Securities Exchange Act of 1934 to file reports of ownership and changes in
ownership of securities of the Company with the Securities and Exchange
Commission (the "SEC") and the New York Stock Exchange, Inc. Copies of those
reports also must be furnished to the Company. Based solely upon a review of the
copies of reports furnished to the Company and written representations that no
other reports were required, the Company believes that during the year ended
December 31, 1995, all required reports were filed on a timely basis.
COMPENSATION
SUMMARY COMPENSATION TABLE
The Company does not pay a salary, bonus or any other compensation to its
executive officers, other than stock options and dividend equivalent rights
("DERs") related to stock options granted to officers and others from time to
time under the Plan. The Company does not have any long-term incentive programs.
The Manager provides (at its expense) all personnel necessary to conduct the
regular business of the Company. The Manager receives various fees for advisory
and other services performed under the management agreement between the Company
and the Manager. All salaries, bonuses and other compensation (except stock
options and DERs) received by the executive officers of the Company are paid by
Holdings. Holdings is engaged in a number of business activities of which
management of the Company is only one. Neither Holdings nor the Manager has
allocated any portion of the compensation paid by them to the Company's
executive officers specifically for their services to the Company. A description
of the management agreement between the Company and the Manager and the fees
paid by the Company thereunder is included below under the caption "Management
Agreement."
The number of shares to be acquired under all outstanding options granted
prior to the Company's December 1994 rights offering (the "Rights Offering") and
the exercise prices thereof shown on the following tables and in the description
of Compensation Paid to Directors have been adjusted to account for the issuance
of 10,053,794 shares of Common Stock upon completion of the Rights Offering.
Pursuant to the Plan, and in accordance with advice of the Company's financial
advisor, the Board of Directors adjusted all outstanding options granted prior
to the Rights Offering by multiplying the number of shares subject to such
options by 1.7 and dividing the exercise prices of all such options by the same
number. This number represents the number of shares outstanding after the Rights
Offering divided by the number of shares outstanding before the Rights Offering.
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation paid to
the Company's Chief Executive Officer:
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION(1)
-------------------------
AWARDS OF
NAME AND PRINCIPAL POSITIONS YEAR OPTIONS (SHARES)
- ----------------------------------------------------------- --------- -------------------------
<S> <C> <C>
Spencer I. Browne, President and
Chief Executive Officer................................... 1995 70,000
1994 99,977
1993 23,454
</TABLE>
- ---------
1 All options granted under the Plan have an exercise price equal to 100% of
the market price of the Common Stock on the date of grant, are exercisable
for a five-year term and, unless the Option Plan Amendment is adopted,
automatically accrue DERs related to dividends declared on the outstanding
shares of Common Stock between the date the option is granted and the date
the option is exercised. Options granted prior to 1994 are exercisable fully
upon the date of grant. Options granted in 1995 are exercisable as to 50% on
the date of grant and as to 25% on each of the
6
<PAGE>
succeeding anniversaries of the date of grant. Amounts do not reflect
49,241, 28,861 and 8,538 shares of Common Stock related to DERs which
accrued during 1995, 1994 and 1993, respectively, and 64,362 shares of
Commercial Assets common stock accrued during 1993 for the benefit of Mr.
Browne with respect to all stock options held by him, all of which DERs have
been distributed as of March 6, 1996. Assuming the Option Plan Amendment
Proposal is approved, no DERs will accrue to holders of the Company's
options, including Mr. Browne, after May 28, 1996. See "AMENDMENT PROPOSAL"
below.
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
------------------------------------------------------ VALUE AT ASSUMED
PERCENT OF ANNUAL RATES AT
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED(1) 1995(2) ($/SH) DATE 5% 10%
- ---------------------------------------- ----------- --------------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Spencer I. Browne....................... 70,000 49.1 $ 2.38 5/16/00 $ 45,932 $ 101,497
</TABLE>
There were no SARs granted by the Company during the year ended December 31,
1995.
- ---------
1 See footnote 1 to the "Summary Compensation Table" above.
2 The Company has no employees. The percentage reflected relates to all
options granted to employees of the Manager who are officers of the Company
or to employees of the Manager whose time is devoted substantially to the
Company. See "Summary Compensation Table" above and "The Management
Agreement" below.
AGGREGATE OPTION EXERCISES DURING 1995 AND FISCAL YEAR-END OPTION VALUE TABLE
During the year ended December 31, 1995, the Company's Chief Executive
Officer did not exercise any of his stock options. The following table reflects
the number of shares of Common Stock covered by exercisable and non-exercisable
stock options held by the Company's Chief Executive Officer as of December 31,
1995:
AGGREGATE OPTION EXERCISES DURING 1995 AND
FISCAL YEAR-END OPTION VALUES TABLE
<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
NAME DECEMBER 31, 1995 DECEMBER 31, 1995
- --------------------------------------------- --------------------------- -----------------------
<S> <C> <C>
Spencer I. Browne............................
Exercisable................................ 265,885 $ 131,191
Unexercisable.............................. 59,994 $ 54,646
</TABLE>
The closing price of the Company's Common Stock on December 29, 1995 was
$2.875.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OF THE COMPANY'S
FILINGS WITH THE SEC UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE
ACT OF 1934, THE FOLLOWING BOARD REPORT ON EXECUTIVE COMPENSATION SHALL NOT BE
INCORPORATED INTO ANY FUTURE FILINGS WITH THE SEC AND SHALL NOT BE DEEMED FILED
WITH THE SEC.
7
<PAGE>
BOARD REPORT ON EXECUTIVE COMPENSATION
The Board of Directors of the Company has not established a Compensation
Committee. The Board is responsible for determining grants of stock options
under the Plan. The Board believes that stock options link management and
shareowner interests and motivate executives to make long-term business and
operating decisions that will serve to increase the long-term total return to
shareowners.
The Board awarded stock options to the Company's Chairman and President on
May 16, 1995. These options were awarded in connection with, among other things,
the successful completion of the Rights Offering and the related addition of
approximately $17 million to the Company's capital base and the completion of
the restructuring of the Company's balance sheet. Specifically, when granting
these options, the Board considered the following specific accomplishments of
management: (i) the significant increase in the Company's stock price during
1995; (ii) the acquisition of approximately $128.6 million par value at
acquisition of high-yield non-agency bonds backed by home mortgage loans in 1994
and the first quarter of 1995; (iii) the sale of substantially all of the
Company's remaining CMO ownership interests and repayment of the related
indebtedness; (iv) elimination of substantially all of the Excess Inclusion
income generated by the Company's CMO ownership interests; (v) increasing the
Company's net income and distributions to shareowners during 1995; and (vi)
through its ownership of approximately 27% of Commercial Assets, Inc.,
participating in the market for commercial real estate securitizations.
Except with respect to compensation paid under the Plan, the Board has no
role in setting the compensation policies of or the levels of compensation paid
to the Company's executive officers whether in the form of salaries, bonuses or
other annual compensation. Pursuant to the Management Agreement, such
compensation is paid by the Manager or Holdings. See "Summary Compensation
Table" above and the "Management Agreement" below.
THE BOARD OF DIRECTORS
Larry A. Mizel, Chairman
Spencer I. Browne
Elliot H. Kline
Richard L. Robinson
Tim Schultz
COMPENSATION PAID TO DIRECTORS
During 1995, each Independent Director of the Company received a fee of
$2,500 a month plus $300 for each meeting of the Board of Directors or committee
thereof attended. In addition, Independent Directors are reimbursed for expenses
related to their attendance at Board of Directors and committee meetings.
During 1995, the Chairman of the Board was granted five-year, non-qualified
stock options under the Plan to purchase 70,000 shares of Common Stock for
$2.375 per share. These options were vested as to 50% of the shares covered
thereby on the date of grant and will vest cumulatively as to an additional 25%
on the anniversary dates of the grants. Options granted to Mr. Browne, a
Director of the Company, are shown above in the Summary Compensation Table.
The Independent Directors of the Company also are eligible to receive grants
of stock options under the Plan. During the year ended December 31, 1995,
Messrs. Kline, Robinson and Schultz each was granted non-qualified stock options
to purchase up to 7,500 shares of Common Stock for $2.375 per share. See Note 1
to the Summary Compensation Table above for the other material terms of these
stock options.
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, the Company's Board of Directors had no Compensation Committee,
and the full Board of Directors was responsible for all compensation decisions
under the Plan. Messrs. Browne and Mizel, the Chief Executive Officer and
Chairman of the Board of Directors of the Company, respectively, also served as
executive officers and directors of Holdings during 1995.
Because Messrs. Browne and Mizel each serve as an executive officer and
director of the Company and Mr. Mizel serves in such capacities for Holdings,
and because Mr. Browne owns a 20% interest in Financial Asset Management LLC
("FAMC"), and Holdings indirectly receives management fees from the Company
through FAMC (an indirect subsidiary of Holdings) under the Management Agreement
between the Company and FAMC, Messrs. Browne and Mizel may be deemed to have an
interest in the Management Agreement, even though the Management Agreement has
been approved by the Independent Directors. For a description of the Management
Agreement between the Company and FAMC and the fees paid by the Company
thereunder, see "Management Agreement" below.
From time to time, the Company engages PageWorks + Tri Design ("PageWorks"),
a marketing and communications firm owned by Mr. Mizel's brother-in-law, for
graphic design, artwork and other services related to the Company's shareowner
reports. During 1995, the Company paid PageWorks approximately $83,000.
PERFORMANCE GRAPHS
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OF THE COMPANY'S
FILINGS WITH THE SEC UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE
ACT OF 1934, THIS SECTION ENTITLED "PERFORMANCE GRAPHS" SHALL NOT BE
INCORPORATED INTO ANY FUTURE FILINGS WITH THE SEC AND SHALL NOT BE DEEMED FILED
WITH THE SEC.
The first performance graph below compares the yearly change in the
cumulative total return of the Common Stock over the five-year period ended
December 31, 1995 with (i) the cumulative total return of the Standard & Poor's
500 Stock Index; and (ii) a peer group consisting of all Mortgage REITs as
defined by the National Association of Real Estate Investment Trusts.
During 1993, the Company initiated a plan to redeploy its assets that was
substantially completed by December 31, 1995. A second performance graph has
been provided that reflects the implementation of that plan. The second graph
compares the cumulative total return of the Common Stock over the two years
ended December 31, 1995, to the cumulative total return over the same period of
the Standard and Poor's 500 Stock Index and the same peer group as in the first
performance graph.
The performance graphs were prepared based on the following assumptions: (a)
an initial investment of $100 invested in (i) the Common Stock; (ii) the common
stocks of the companies in the Standard & Poor's 500 Index; and (iii) the common
stocks of the companies in the peer group; and (b) all dividends received were
reinvested in the Common Stock in the month in which they were received. On
October 12, 1993, the Company distributed to its shareowners one share of
Commercial Assets common stock for every two shares of Common Stock held. For
purposes of the performance graph, the shares of Commercial Assets common stock
were treated as being sold on the date of the distribution and the proceeds from
the sale invested in the Company's Common Stock.
9
<PAGE>
THE STOCK PRICE PERFORMANCE SHOWN ON THE PERFORMANCE GRAPHS ARE NOT
NECESSARILY INDICATIVE OF FUTURE PRICE PERFORMANCE.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ASSET INVESTORS
CORPORATION
<S> <C> <C> <C>
Performance Since 1990
AIC S&P 500 Mortgage REITs
12/31/90 $100 $100 $100
12/31/91 207 131 132
12/31/92 117 141 134
12/31/93 79 155 154
12/31/94 90 157 117
12/31/95 160 215 190
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ASSET INVESTORS
CORPORATION
<S> <C> <C> <C>
Performance Since 1993
AIC S&P 500 Peer Group
12/31/93 $100 $100 $100
12/31/94 114 101 76
12/31/95 202 139 123
</TABLE>
10
<PAGE>
THE MANAGEMENT AGREEMENT
The Company has entered into a series of management agreements (the
"Management Agreement") with the Manager. The Manager advises the Company on its
business and oversees its day-to-day operations, subject to the supervision of
the Board of Directors of the Company. The Manager also is obligated to present
to the Company asset acquisition opportunities consistent with the policies and
objectives of the Company and to furnish the Board of Directors of the Company
with information concerning the acquisition, holding and disposition of assets.
The terms appearing in quotes below, not defined in this Proxy Statement, are
defined in the Management Agreement and shall have the meanings ascribed to them
in the Management Agreement.
The Management Agreement has a one-year term and is approved by the
Independent Directors. It may be terminated by either party with or without
cause at any time upon 60 days' written notice. In addition, the Company has the
right to terminate the Management Agreement upon the occurrence of certain
specified events including, among other things, a breach by the Manager of any
material provision which breach remains uncured for 30 days or the bankruptcy of
the Manager. The Management Agreement also may be terminated at any time by a
majority vote of either the Independent Directors or holders of the Common Stock
of the Company. The Manager would be entitled to certain termination payments
if, among other things, the Company is acquired and the acquisition results in
the termination of the Management Agreement.
The Manager receives various fees for the advisory and other services
performed in connection with the Management Agreement. The Manager provides all
personnel and certain overhead items (at its expense) necessary to conduct the
regular business of the Company.
The Company has agreed to indemnify the Manager and its affiliates with
respect to all expenses, losses, damages, liabilities, demands, charges or
claims of any nature in respect of acts or omissions of the Manager made in good
faith and in accordance with the standards set forth in the Management
Agreement.
Under the Management Agreement, the Manager may receive a base fee, an
incentive fee and an administrative fee. The annual base fee (the "Base Fee") is
payable quarterly in an amount equal to 3/8 of 1% of the "average invested
assets" of the Company and its subsidiaries for such year. In 1994 and 1995, the
annual incentive fee (the "Incentive Fee") was based on the Company's
distributions to shareowners. The Manager is entitled to the Incentive Fee only
after the Company's shareowners first have received cash distributions exceeding
the Company's "average net worth" times the "Ten-Year U.S. Treasury Rate" plus
1%. The Incentive Fee equals 20% of such excess.
The Manager received Incentive Fees of $517,000 and $137,000, respectively,
for the years ended December 31, 1995 and 1994.
The Manager also performs certain bond administration and other related
services for the Company pursuant to the Management Agreement and other
administration agreements and receives a fee for such services (the
"Administrative Fee") in relation to the complexity of the transaction and the
services required. In 1995, the Base Fee and the Administrative Fee were
$214,000 and $914,000, respectively.
Commencing January 1, 1996, the Incentive Fee will be computed based on the
Company's net income determined in accordance with generally accepted accounting
principles. The Manager will be entitled to an Incentive Fee equal to 20% of the
amount by which the Company's net income exceeds the Company's "average net
worth" times the "Ten-Year U.S. Treasury Rate" plus 1%.
On April 1, 1996, the Manager, with the consent of the Company's Independent
Directors, assigned the Management Agreement to FAMC an entity that is owned 80%
indirectly by Holdings and 20% by Spencer I. Browne. FAMC assumed the Manager's
obligations under the Management Agreement.
11
<PAGE>
OWNERSHIP OF COMMON STOCK
The table below sets forth, as of March 6, 1996, the number of shares of
Common Stock beneficially owned by each director and each executive officer of
the Company named in the Summary Compensation Table, individually, and the
number of shares beneficially owned by all of the Company's directors and
executive officers as a group, which information was furnished in part by each
such person.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER1 OWNERSHIP2 CLASS4
- -------------------------------------------------------------- ------------------ -------------
<S> <C> <C>
Larry A. Mizel................................................ 535,490 2.2%
Spencer I. Browne............................................. 490,599 2.0%
Elliot H. Kline............................................... 150,290 *
Richard L. Robinson........................................... 157,208 *
Tim Schultz................................................... 36,611 *
All directors and executive officers as a group3 (nine
persons)..................................................... 1,380,506 5.7%
</TABLE>
- ---------
* Denotes ownership of less than 1% of the outstanding shares of Common Stock.
1 Includes, where applicable, shares of Common Stock owned by such person's
minor children and spouse and by other related individuals and entities.
Unless otherwise indicated, such person has sole voting and investment power
as to the shares listed.
2 Includes the following shares of Common Stock which such persons had the
right to acquire within 60 days after March 6, 1996 through the exercise of
stock options granted under the Plan: Larry A. Mizel -- 263,534 shares;
Spencer I. Browne -- 265,885 shares; Elliot H. Kline -- 104,108 shares;
Richard L. Robinson -- 104,108 shares; Tim Schultz -- 22,976 shares; and all
directors and executive officers as a group -- 764,457 shares.
3 Does not include 303,166 shares of Common Stock owned beneficially by
Holdings.
4 All shares of Common Stock which a person had the right to acquire within 60
days after March 6, 1996 were deemed to be outstanding for the purpose of
computing the "Percent of Class" owned by such person but were not deemed to
be outstanding for the purpose of computing the "Percent of Class" owned by
any other person. At March 6, 1996, 24,355,862 shares of Common Stock were
outstanding.
As of March 6, 1996, no person or group was known to the Company to be a
beneficial owner of more than 5% of its Common Stock.
As of March 6, 1996, Holdings was the beneficial owner of 303,166 shares of
Common Stock (approximately 1.2%) of the Company. Mr. Mizel is the Chairman of
the Board of Directors and Chief Executive Officer and Mr. Browne is President
and Co-Chief Operating Officer of Holdings. Messrs. Mizel and Browne are the
beneficial owners of approximately 18.0% and 3.6%, respectively, of the
outstanding shares of common stock of Holdings.
PROPOSAL NO. 2
OPTION PLAN AMENDMENT PROPOSAL
Subject to shareowner approval, the Company's Board of Directors has
approved amendments to the Plan (a) to eliminate DERs and in connection with the
elimination of DERs, (b) to permit stock grants. A description of the Plan is
presented below in connection with shareowner consideration of the Option Plan
Amendment Proposal.
DESCRIPTION OF THE PLAN
GENERAL. The Plan, as currently restated, was adopted by the Board of
Directors of the Company in 1990 and approved by the Company's shareowners in
1991. Certain amendments to the Plan were
12
<PAGE>
adopted by the Board of Directors in May 1992 and approved by the Company's
shareowners in June 1992. The amendments extended the term of the Plan from ten
years after the date of its initial adoption by the Company's shareowners until
such time as the Plan is terminated by the Board of Directors.
The purpose of the Plan is to encourage stock ownership by directors,
officers and key personnel and to provide a means of performance-based
compensation in order to attract and retain qualified personnel. The Plan
provides for the issuance of incentive and non-qualified stock options, stock
appreciation rights and limited stock appreciation rights. No stock appreciation
or limited stock appreciation rights have been granted under the Plan and, in
recent years, no incentive stock options have been granted under the Plan.
PRICE AND EXERCISE PERIOD OF OPTIONS. The exercise price for options
granted under the Plan may not be less than 100% of the Fair Market Value (as
defined in the Plan) of the shares of Common Stock on the date of grant. The
option holder may pay the exercise price in cash or by delivery of previously
acquired shares of Common Stock. No option may be granted under the Plan to any
person who, assuming exercise of all options held by such person, would own or
be deemed to own more than 9.8% of the total outstanding shares of Common Stock.
Each option granted must terminate no more than ten years from the date it is
granted and may terminate earlier as specified at the time of grant.
DIVIDEND EQUIVALENT RIGHTS. Options granted under the Plan automatically
accrue DERs based on (i) the number of shares underlying the unexercised portion
of the option; (ii) dividends declared on the outstanding shares of Common Stock
of the Company between the option grant date and the option exercise date; and
(iii) the market price of the Common Stock on the dividend record date. The
Committee has authority to determine whether DERs will be paid in cash or shares
of Common Stock and when DERs may be distributed (i.e., prior to or only in
connection with the exercise of the related option). Historically, DERs have
been paid in shares of Common Stock. If the Option Plan Amendment Proposal is
approved, DERs will no longer be granted under the Plan.
SHARES COVERED BY THE PLAN. The Plan currently provides that the number of
shares of Common Stock as to which grants of options, stock appreciation rights
and limited stock appreciation rights made to directors, officers and employees
of the Company under the Plan may not exceed 1,502,639. The aggregate number of
shares of Common Stock as to which options, stock appreciation rights and
limited stock appreciation rights may be granted during each calendar year
commencing in 1992 may not exceed the annual allocation for such year determined
by multiplying .0075 by the number of shares of Common Stock outstanding as of
midnight Denver time on December 31 of the previous year (the "Annual
Allocation"). The maximum number of shares of Common Stock which may be subject
to options, stock appreciation rights and limited stock appreciation rights
granted to directors as a group under the Plan during each calendar year
commencing in 1992 shall not exceed the Annual Allocation less 5,000 shares, as
adjusted for unallocated shares available from previous years. At March 6, 1996,
1,502,639 shares of Common Stock were available for grants of options, stock
appreciation rights and limited stock appreciation rights under the Plan.
As of March 6, 1996, five directors and six officers who were not also
directors were eligible to receive options under the Plan. As of March 6, 1996,
options to purchase an aggregate of 1,493,079 shares of Common Stock, net, had
been granted under the Plan since its adoption in 1986, of which options to
purchase 162,500 shares have been exercised and options to purchase 362,954
shares expired. At March 6, 1996, 331,302 DERs had been accrued since November
1990 (when the Plan was amended to provide for DERs), all of which have been
distributed.
STOCK OPTIONS GRANTED AND EXERCISED UNDER THE PLAN DURING THE LAST THREE
YEARS. The following table sets forth information as of March 6, 1996 with
respect to non-qualified stock options
13
<PAGE>
granted during 1995, 1994 and 1993 to (i) current executive officers as a group;
(ii) current directors who are not executive officers, as a group; and (iii)
current officers who are not executive officers, as a group.
<TABLE>
<CAPTION>
DER SHARES
SHARES SUBJECT SHARES SUBJECT SHARES SUBJECT AVERAGE ACCRUED ON
TO OPTIONS TO OPTIONS TO OPTIONS EXERCISE ALL
GRANTED DURING GRANTED DURING GRANTED DURING PRICE OF OUTSTANDING
GROUP DESCRIPTION 1995 1994 1993 OPTIONS OPTIONS
- ----------------------------------- --------------- --------------- --------------- --------- -------------
<S> <C> <C> <C> <C> <C>
Current Executive Officers as a
Group (6 Persons)................. 140,000 207,645 46,908 $ 1.906 224,477
Current Directors who are not
Executive Officers, as a Group (3
Persons).......................... 22,500 93,995 81,086 $ 2.119 72,176
Current Officers who are not
Executive Officers, as a Group (4
Persons).......................... 2,500 18,372 5,982 $ 1.828 13,762
</TABLE>
During 1995, 1994 and 1993, there were no options exercised.
PLAN ADMINISTRATION. The Plan provides that it shall be administered by the
Committee. Historically the full Board of Directors has served as the Committee
because the Company has no Compensation Committee. The Committee has the
authority, subject to the provisions of the Plan, to determine the persons to
whom, and the time or times at which options will be granted, the number of
shares to be covered by each option, the exercise price and all other matters
necessary or advisable for administration of the Plan. The Committee also has
the authority to grant, at the time an option is granted or at any time prior to
the exercise of the option, stock appreciation rights and/or limited stock
appreciation rights with respect to some or all of the shares of Common Stock
covered by the option. Limited stock appreciation rights, to the extent then
exercisable, generally may be exercised in the event of a tender or exchange
offer for the Company, a merger or consolidation of the Company or certain
changes in control of the Board of Directors.
AMENDMENT OF THE PLAN. The Board of Directors may amend the Plan at any
time, except that approval by the shareowners of the Company is required for any
amendment which increases the aggregate number of shares of Common Stock which
may be issued, increases the maximum number of shares which may be issued to any
person, changes the class of persons eligible to receive options, modifies the
period within or the terms upon which options, stock appreciation rights and
limited stock appreciation rights may be granted or exercised or increases the
material benefits accruing to participants under the Plan.
FEDERAL INCOME TAX CONSEQUENCES. Under current federal income tax rules, a
grantee of a non-qualified stock option or stock appreciation right will not
recognize taxable income and the Company will not receive a deduction upon the
grant of such option or right. Upon a grantee's exercise of a non-qualified
stock option, (i) the grantee will recognize ordinary income in an amount equal
to the difference between the fair market value of the shares on the exercise
date and the exercise price of the shares; and (ii) the Company will be entitled
to a tax deduction in an amount equal to the income recognized by the grantee.
Following exercise, the shares will be taxed in the same manner as shares held
by any other shareowner (i.e., the grantee will not realize gain or loss unless
and until the shares are sold, at which time the amount of gain or loss realized
will equal the difference between the sale price and the basis of the shares).
Upon the grantee's receipt of cash or the transfer of shares of Common Stock
upon exercise of a stock appreciation right or in satisfaction of a DER, the
grantee will recognize ordinary income in an amount equal to the sum of the cash
and the fair market value of the shares received. Generally, the Company will be
entitled to a deduction equal to the income recognized by the grantee upon the
exercise of a stock appreciation right or distribution of the Common Stock
related to DERs, subject to certain requirements being met.
If a non-qualified stock option or stock appreciation right is exercised by
a grantee who is subject to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 (the "Exchange Act") (i.e.,
14
<PAGE>
one who is an officer or director of the Company; a "Section 16 officer or
director"), the Company and the grantee generally will not incur any tax
consequences at the time of exercise unless the option is held for less than six
months before it is exercised. To the extent a non-qualified stock option is
exercised by a Section 16 officer or director less than six months after it is
granted, he may elect within 30 days after exercise to recognize ordinary income
immediately, and the Company then would be entitled to a corresponding income
tax deduction as described above. If such an election is not made, the grantee
will recognize ordinary income and the Company will be entitled to a
corresponding deduction when the restrictions of Section 16(b) of the Exchange
Act lapse, generally six months after the date of grant of the non-qualified
stock option or stock appreciation right.
PROPOSED PLAN AMENDMENTS
ELIMINATION OF DERS
The Plan grants DERs to all holders of stock options issued under the Plan.
DERs represent the right to receive, either in shares of stock or cash, at the
Company's election, the value of dividends declared on the Company's Common
Stock for each share of stock underlying an outstanding option. The Company pays
the DERs in the form of additional shares of the Company's Common Stock. The
number of shares of Common Stock is determined by multiplying the per share
dividend by the number of shares that are the subject of the outstanding options
and dividing by the closing stock price on the record date of the dividend.
DERs represent compensation expense to the Company in the period that the
dividend is declared. As the number of options granted has increased and as the
Company's dividends have increased with the Company's operating success, the
expense associated with the DERs has increased.
As part of the Company's continuing efforts to reduce general and
administrative expenses, the Company's Board of Directors approved an amendment
to the Plan (the "DER Elimination Amendment") to eliminate the option holder's
right to receive DERs, subject to shareowner approval. The DER Elimination
Amendment also requires the consent of each holder of stock options. At December
31, 1995, options to acquire a total of 967,625 shares of Common Stock are held
by 11 persons including the Company's directors and executive officers.
As consideration for current holders of options consenting to the
relinquishment of DERs, the Company will issue to each option holder shares of
Common Stock based on the computed value of DERs that would accrue to options in
the future (the "Exchange Ratio"). The Exchange Ratio was determined based on
the number of options outstanding, the remaining term of the option, the average
closing market price of the Common Stock for the 30 trading days prior to March
11, 1996, the date the Board of Directors adopted the resolution approving the
Option Plan Amendment and the dividends currently estimated to be paid on the
Company's Common Stock in the future. Based on this calculation, the Company
will grant to the holders of the Company's options, subject to shareowner
approval of the DER Elimination Amendment, a total of 244,394 shares of Common
Stock (the "Exchange Shares"). The Company has obtained an opinion from Hanifen,
Imhoff Inc., the Company's independent financial adviser, that the Exchange
Ratio is fair from a financial point of view.
As a result of elimination of DERs from the Plan, the Company will incur a
one-time expense of approximately $750,000 related to the issuance of the
Exchange Shares. However, elimination of the DERs from the Plan is expected to
reduce general and administrative expenses by approximately $220,000, $280,000
and $281,000 in 1996, 1997 and 1998, respectively. Additional expense reductions
would be realized in future years.
GRANTS OF COMMON STOCK
In connection with the elimination of DERs described above, subject to
shareowner approval, the Company will issue the Exchange Shares to the holders
of the Company's stock options who consent to the elimination of their rights to
receive DERs in the future.
Currently, the Plan does not permit the issuance of shares of Common Stock.
Subject to shareowner approval, the Company's Board of Directors has approved an
amendment to the Plan to permit
15
<PAGE>
the Company to issue the Exchange Shares pursuant to the Plan in order to
deliver the Exchange Shares to the holders of the Company's stock options who
consent to the elimination of their DERs. The Exchange Shares will be fully
vested and not restricted, subject to applicable federal and state securities
laws. Because the Exchange Shares will be issued pursuant to the Plan as
amended, the issuance and transfer of the Exchange Shares will be registered
pursuant to the Company's current effective Registration Statement on Form S-8.
The Company's Board of Directors believes that the Option Plan Amendment
Proposal is in the best interests of the Company and its shareowners. In making
its decision, the Board of Directors carefully considered a number of factors,
including, among other things: (i) the written opinion of Hanifen, Imhoff Inc.,
financial advisor to the Company; (ii) the Company's future prospects; and (iii)
the reduction of future expense by reason of the elimination of DERs.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OPTION PLAN AMENDMENT
PROPOSAL AND RECOMMENDS THAT SHAREOWNERS VOTE "FOR" APPROVAL OF THE OPTION PLAN
AMENDMENT PROPOSAL.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Compensation Committee Interlocks and Insider Participation" under the
section entitled "Compensation" above.
COMPANY'S RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors of the Company appointed the firm of Ernst & Young
LLP to audit the financial statements of the Company for the year ended December
31, 1995. A representative of Ernst & Young LLP is expected to be present at the
Meeting and available to respond to appropriate questions. Ernst & Young LLP has
indicated that it will not make a statement, although an opportunity for a
statement will be provided. Shareowners are not being requested to ratify this
appointment.
OTHER MATTERS
Management and the Board of Directors of the Company know of no matters to
be brought before the Meeting other than as set forth herein. However, if any
such other matters properly are presented to the shareowners for action at the
Meeting and any adjournments or postponements thereof, it is the intention of
the proxy holders named in the enclosed proxy to vote in their discretion on all
matters on which the shares represented by such proxy are entitled to vote.
SHAREOWNER PROPOSALS
Any proposal which a shareowner may desire to present at the 1997 Annual
Meeting of Shareowners must be received in writing by the Secretary of the
Company not later than November 19, 1996.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Larry A. Mizel
Larry A. Mizel
CHAIRMAN OF THE BOARD
March 29, 1996
16
<PAGE>
ASSET INVESTORS CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
PROXY FOR THE ANNUAL MEETING OF SHAREOWNERS--MAY 28, 1996
PROXY
The undersigned hereby appoints Larry A. Mizel, Spencer I. Browne and Daniel S.
Japha, or any of them, as proxies or proxy for the undersigned, each with full
power of substitution and resubstitution, to attend the 1996 Annual Meeting of
Shareowners and any adjournments or postponements thereof and to vote as
designated on the reverse side hereof, all the shares of Common Stock of Asset
Investors Corporation held of record by the undersigned on March 6, 1996. In
their discretion, the proxies are hereby authorized to vote upon such other
business as may properly come before the Meeting and any adjournments or
postponements thereof.
1. Election of Directors, Nominees for two Class I Directors:
Richard L. Robinson and Tim Schultz
2. Amendments to Stock Option Plan to eliminate Dividend Equivalent Rights
("DERs") and to permit the grant of Common Stock pursuant to the Plan.
Please specify your choice by clearly marking the appropriate boxes. Unless
otherwise specified, this proxy will be voted "FOR" all nominees in the election
of directors and "FOR" the amendments to the Stock Option Plan.
SEE REVERSE SIDE
/X/
Please mark your
votes as in this
example.
FOR / /
WITHHELD / /
FOR / /
AGAINST / /
ABSTAIN / /
1. Election of Directors
(see reverse)
2. Amendments to Stock Option Plan to eliminate DERs and to grant Common Stock
The Board of Directors recommends a vote "FOR" the election of Messrs. Robinson
and Schultz.
For, except vote withheld from the following nominee:
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" the amendments to the Plan.
SIGNATURE(S)
------------------------------------------------------------------
DATE
--------------------------------------------------------------------------
SIGNATURE(S)
------------------------------------------------------------------
DATE
--------------------------------------------------------------------------
Please sign exactly as your name appears on this proxy. Joint owners should each
sign personally. If signing as attorney, executor, administrator, trustee or
guardian, please give your full title. Corporate proxies should be signed by an
authorized officer.
