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:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-1(c) or Rule 14a-12
ASR Investments Corporation
-----------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i((1) or
14a-6(j)(2).
[ ] $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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: _/
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4) Proposed maximum aggregate value of transaction:
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_/ Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE>
ASR INVESTMENTS CORPORATION
335 North Wilmot, Suite 250
Tucson, Arizona 85711
(602) 748-2111
________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 15, 1994
________________________________________
The Annual Meeting of Stockholders of ASR Investments Corporation, a
Maryland corporation (the "Company"), will be held on June 15, 1994 at 9:00
a.m., at the Viscount Suite Hotel, 4855 East Broadway, Tucson, Arizona for
the following purposes:
1. To elect directors to serve until the next annual meeting of
stockholders and until their successors are elected and qualified.
2. To ratify the appointment of Deloitte & Touche as the independent
auditors of the Company for the fiscal year ending December 31, 1994.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 30, 1994
are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
To assure your representation at the meeting, however, you are urged to
mark, sign, date and return the enclosed proxy card as promptly as possible
in the postage-prepaid envelope enclosed for that purpose. Any stockholder
attending the meeting may vote in person even if he or she previously has
returned a proxy.
Sincerely,
Frank S. Parise, Jr.
Secretary
Tucson, Arizona
May 2, 1994
<PAGE>
ASR INVESTMENTS CORPORATION
335 North Wilmot, Suite 250
Tucson, Arizona 85711
(602) 748-2111
_____________________________
PROXY STATEMENT
_____________________________
General
The enclosed proxy is solicited on behalf of ASR Investments Corporation,
a Maryland corporation (the "Company"), by the Company's board of directors
(the "Board of Directors") for use at the Annual Meeting of Stockholders to
be held June 15, 1994 at 9:00 a.m. (the "Meeting"), or at any adjournment
thereof, for the purposes set forth in this proxy statement and in the
accompanying Notice of Annual Meeting of Stockholders. The Meeting will be
held at the Viscount Suite Hotel, 4855 East Broadway, Tucson, Arizona.
These proxy solicitation materials were mailed on or about May 2, 1994 to
all stockholders entitled to vote at the Meeting.
The information contained in the "Compensation Committee Report on
Executive Compensation" below and "Performance of the Common Stock" below
shall not be deemed "filed" with the Securities and Exchange Commission or
subject to Regulation 14A or 14C or to the liabilities of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Record Date
Stockholders of record at the close of business on March 30, 1994 (the
"Record Date") are entitled to notice of and to vote at the Meeting. On the
Record Date, there were issued and outstanding 15,499,993 shares of the
Company's Common Stock, $.01 par value (the "Common Stock").
Revocability of Proxies
Any person giving a proxy may revoke the proxy at any time before its use
by delivering to the Company written notice of revocation or a duly executed
proxy bearing a later date or by attending the Meeting and voting in person.
Voting Solicitation
The presence, in person or by proxy, of the holders of a majority of the
total number of shares of Common Stock outstanding constitutes a quorum for
the transaction of business at the Meeting. Each stockholder voting at the
Meeting, either in person or by proxy, may cast one vote per share of Common
Stock held for each nominee for director. Cumulative voting in the election
of directors is not permitted. On all other matters, one vote may be cast
for each share of Common Stock held.
The cost of this solicitation will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for expenses incurred in forwarding solicitation
material to such beneficial owners. Proxies also may be solicited by
certain of the Company's directors and officers, personally or by telephone
or telegram, without additional compensation.
Annual Report
The 1993 Annual Report to Stockholders, which was mailed to stockholders
with this Proxy Statement, contains financial and other information about
the Company but is not incorporated into this Proxy Statement and is not to
be considered a part of these proxy soliciting materials.
ELECTION OF DIRECTORS
Nominees
A board of seven directors is to be elected at the Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by
them for Jon A. Grove, Frank S. Parise, Jr., Joseph C. Chan, Earl M.
Baldwin, John J. Gisi, Raymond L. Horn and Frederick C. Moor, all of whom
currently are directors of the Company. In the event that any nominee of
the Company is unable or declines to serve as a director at the time of the
Meeting, the proxies will be voted for any nominee designated by the current
Board of Directors to fill the vacancy. It is not expected that any nominee
will be unable or will decline to serve as a director. The term of office
of each person elected as a director will continue until the next annual
meeting of stockholders and until a successor has been elected and
qualified. Biographical information regarding the nominees for directors is
set forth below under the heading "Information Concerning Directors and
Executive Officers of the Company."
The Company's Bylaws provide that the Board of Directors shall consist of
not fewer than three nor more than 15 members. The Bylaws further provide
that, for so long as the Company maintains its election to be treated as a
real estate investment trust ("REIT"), the majority of the members of the
Board of Directors and of any committee of the Board of Directors will at
all times be Unaffiliated Directors, except in the case of a vacancy.
Unaffiliated Directors are directors who are not affiliates of the Manager
or the Property Manager (as defined herein). As of the date of this Proxy
Statement, the Unaffiliated Directors are Messrs. Baldwin, Gisi, Horn and
Moor. Vacancies occurring on the Board of Directors among the Unaffiliated
Directors will be filled by nominees selected by the Unaffiliated Directors
who are approved by the vote of a majority of the directors, including a
majority of the Unaffiliated Directors. All transactions involving the
Company in which the Manager or the Property Manager has an interest must be
approved by a majority of the Unaffiliated Directors. In addition, the
annual renewal of the Management Agreement and the Property Management
Agreement (as described below) requires the affirmative vote of a majority
of the Unaffiliated Directors and a majority of the Unaffiliated Directors
may terminate the Management Agreement and the Property Management Agreement
at any time upon 60 days' notice in accordance with the terms of the
Agreements.
Information Concerning Directors and Executive Officers of the Company
The following table sets forth certain information regarding the
Company's directors and executive officers.
Name Age Position(s) With The Company
---- --- ----------------------------
Jon A. Grove 49 Chairman of the Board, President, Chief
Executive Officer and Director
Frank S. Parise, Jr. 42 Vice Chairman, Executive Vice President,
Chief Administrative Officer, Secretary
and Director
Joseph C. Chan 42 Executive Vice President, Chief Operating
Officer, Treasurer and Director
Dale A. Webber 33 Vice President
Earl M. Baldwin 50 Director
John J. Gisi 48 Director
Raymond L. Horn 64 Director
Frederick C. Moor 62 Director
Jon A. Grove has been Chairman of the Board of Directors, President,
Chief Executive Officer and a director of the Company since its organization
in June 1987. Mr. Grove also has served as the President of one of the
general partners of the Manager since its organization and has been a
Director and principal stockholder of Pima Realty Advisors, Inc. (the
"Property Manager") since its organization in November 1993. From 1974 to
1989, Mr. Grove was employed with The Estes Co. (now called GWS), a company
which founded the Company and which develops, constructs and sells
residential, multi-family, commercial and industrial real estate, most
recently as executive vice president and chief operating officer. Mr. Grove
also has been Chairman of the Board and a Director of American Southwest
Financial Corporation since its organization in September 1982, American
Southwest Finance Co., Inc. since its organization in September 1982,
American Southwest Financial Services, Inc. since its organization in 1984,
and Westam Mortgage Financial Corporation since its organization in May
1986; these companies are Arizona-based corporations involved in the
issuance and administration of mortgage-collateralized bonds.
Frank S. Parise, Jr. has been Vice Chairman of the Board of Directors,
Executive Vice President and Chief Administrative Officer of the Company
since December 1988 and the Secretary and a director of the Company since
its organization. Mr. Parise also has served as the President of one of the
general partners of the Manager since its organization and has been the
President, a director and principal stockholder of the Property Manager
since its organization in November 1993. From 1985 to 1989, Mr. Parise was
employed by The Estes Co., most recently as President of its Financial
Services Division and Multifamily Development Division. From 1982 to 1985,
Mr. Parise was the President of E. Allen Development Corporation, a company
that acquired and managed apartments.
Joseph C. Chan has been a director of the Company since February 1989,
Executive Vice President and Chief Operating Officer since December 1988 and
Treasurer since April 1994. Mr. Chan served as the Vice President and
Treasurer of the Company from its organization until December 1988. Mr. Chan
also has served as the President of one of the general partners of the
Manager since its organization and a director and principal stockholder of
the Property Manager since its organization in November 1993. From 1986 to
1987, Mr. Chan served as an officer of The Estes Co.
Dale A. Webber has been a Vice President of the Company since September
1987.
Earl M. Baldwin has been a director of the Company since its
organization. Since 1985, Mr. Baldwin has been president of Baldwin
Financial Corp., a risk management consulting service company for mortgage
lenders specializing in hedging and secondary market strategy. From 1973 to
1985, Mr. Baldwin was employed by Security Pacific Mortgage Corporation
("SPMC"), a mortgage banking company, serving most recently as its executive
vice president.
John J. Gisi has been a director for the Company since February 1989.
Mr. Gisi has served as the President and Chief Executive Officer of National
Bancorp of Arizona, Inc., a wholly owned subsidiary of Zions Bancorporation,
and as the Chairman of the Board, President and Chief Executive Officer of
National Bank of Arizona since September 1984. Mr. Gisi also serves as a
Director of several subsidiaries of Zions Bancorporation.
Raymond L. Horn has been a director of the Company since its
organization. Mr. Horn serves as tax advisor to several Phoenix-based real
estate companies. Mr. Horn, a certified public accountant and lawyer,
presently is in private practice after retiring from Deloitte Haskins &
Sells (now Deloitte & Touche) as the partner-in-charge of that firm's
Arizona tax practice. Mr. Horn is a member of numerous professional and
business associations including the American Institute of Certified Public
Accountants and the American Bar Association.
Frederick C. Moor has been a director of the Company since February 1989.
Mr. Moor presently is retired after 33 years of employment with The Valley
National Bank of Arizona, most recently as Vice President and Banking
Services Manager for the Eastern Division.
All directors are elected at each annual meeting of the Company's
stockholders and hold office until their successors are elected and
qualified. All officers serve at the discretion of the Board of Directors.
The Company currently has five salaried employees.
Directors and executive officers of the Company who are not salaried
employees of the Company are required to devote only so much of their time
to the Company's affairs as is necessary or required for the effective
conduct and operation of the Company's business. Because the Management
Agreement between the Company and the Manager provides that the Manager will
assume principal responsibility for managing the day-to-day affairs of the
Company, the non-salaried officers of the Company, in their capacities as
such, are not expected to devote substantial portions of their time to the
affairs of the Company. However, in their capacities as officers or
employees of general partners of the Manager, they will devote such portion
of their time to the affairs of the Manager as is required for the
performance of the duties of the Manager under the Management Agreement.
Vacancies occurring on the Board of Directors among the Unaffiliated
Directors will be filled by the vote of a majority of the directors,
including a majority of the Unaffiliated Directors, on nominees selected by
the Unaffiliated Directors. All transactions between the Company and the
Manager or the Property Manager must be approved by a majority of the
Unaffiliated Directors.
Meetings and Committees
During the year ended December 31, 1993, the Board of Directors of the
Company held a total of 11 meetings. No director attended fewer than 75% of
the meetings of the Board of Directors.
The Company's Bylaws authorize the Board of Directors to appoint among
its members an executive committee, an audit committee and other committees.
A majority of the members of any committee so appointed must be Unaffiliated
Directors. The Board of Directors has appointed an Audit Committee and a
Compensation Committee. Messrs. Gisi and Horn serve as the members of the
Company's Audit Committee and Compensation Committee. The Audit Committee
reviews the annual financial statements, any significant accounting issues
and the scope of the audit with the Company's independent auditors and is
available to discuss with the auditors any other accounting and audit
related matters which may arise during the year. The Audit Committee met
separately at one formal meeting during the year ended December 31, 1993
which was attended by all of the members of the Committee. The Compensation
Committee reviews all transactions with the Manager and the Property Manager
and their affiliates, including the renewal of the Management Agreement and
the Property Management Agreement. The Compensation Committee met separately
at two meetings during the year ended December 31, 1993 which were attended
by all of the members of the Committee. The Board of Directors has not
appointed any other committees.
Certain Relationships and Related Transactions
The Company's Bylaws provide that the Board of Directors has the full
power to conduct, manage and direct the business and affairs of the
Company. The Company is a party to a management agreement (the
"Management Agreement") with Pima Mortgage Limited Partnership (the
"Manager") to manage the day-to-day operations of the Company, subject
to the supervision of the Company's Board of Directors. Jon A. Grove,
Frank S. Parise, Jr. and Joseph C. Chan have been directors or officers
of general partners of the Manager since its organization. For further
information respecting these individuals, see "Information Concerning
Directors and Executive Officers of the Company."
The duties of the Manager under the Management Agreement include
formulating operating strategies; arranging for the acquisition of assets
for the Company; monitoring the performance of the Company's assets; and
providing certain administrative and overall managerial services necessary
for the operation of the Company. For performing these services, the
Manager receives an annual base management fee in an amount equal to 3/8 of
1% per annum of the Average Invested Assets of the Company (as defined in
the Management Agreement), which is paid monthly with adjustments made
quarterly. Prior to 1994, the Manager was also entitled to receive an
incentive fee in an amount equal to 25% of the amount by which the Company's
Return on Equity (as defined in the Management Agreement) exceeded the sum
of the Ten Year U.S. Treasury Rate (as defined in the Management Agreement)
plus 1% which was paid quarterly over the term of the Management Agreement.
The Manager also performs certain analysis and other services in connection
with the administration of mortgage securities with respect to which the
Company acquires mortgage interests. For such services, the Company
reimburses the Manager for the fees paid under the Subcontract Agreement
described below and pays the Manager an annual administration fee of $10,000
for each series of mortgage interests acquired prior to 1991, $10,000 for
the aggregate mortgage interests acquired in 1991 and $10,000 for the
aggregate mortgage interests acquired in 1992.
In connection with the renewal of the Management Agreement for 1994, the
Manager and the Company agreed to eliminate the incentive management fee
provision. On December 16, 1993, the Company granted to Messrs. Grove,
Parise and Chan options to purchase 1,549,00 shares of the Company's Common
Stock and stock appreciation rights ("SARs") covering 451,000 shares of the
Company's Common Stock. The exercise price is $1.72 per share, which is
110% of the market price of the Common Stock on the grant date. If dividends
are declared during the period the stock options or SARs are outstanding,
the holder of the options of the SARs can elect to receive currently or upon
exercise cash in an amount equal to the product of the per share dividend
amount times the number of options or SARs outstanding. One-third of the
options and SARs are currently exercisable; one-third will become
exercisable on December 16, 1994; and the remainder will become exercisable
on December 16, 1995. The options will expire on December 16, 1998, if not
terminated earlier pursuant to the terms of the agreements.
In the event that the Management Agreement is terminated by the Company
or is not renewed by the Company on terms at least as favorable to the
Manager as the current Management Agreement other than as a result of a
termination by the Company for cause (as specified in the Management
Agreement), the Manager will be entitled to receive from the Company the
management fee that would have been payable by the Company to the Manager
pursuant to such Management Agreement based on the investments made by the
Company prior to the date of such termination (or failure to renew) for the
12 full fiscal quarters beginning on the date of such termination (or
failure to renew) as more fully described in the Management Agreement.
In 1993, the Company paid the Manager base management fees of
approximately $605,000 and administration fees of approximately $260,000.
The payment of such fees was unanimously approved by the Unaffiliated
Directors. There were no incentive management fees paid for 1993.
The Manager has granted the Company a right of first refusal, for as long
as the Manager or an affiliate of the Manager acts as the Company's manager
pursuant to the Management Agreement or any extension thereof, to purchase
any assets held by the Manager or its affiliates prior to any sale,
conveyance or other transfer, voluntarily or involuntarily, of such mortgage
assets by the Manager or its affiliates.
The Manager and American Southwest Financial Services, Inc. ("ASFS") are
parties to a Subcontract Agreement pursuant to which ASFS performs certain
services for the Manager in connection with the structuring, issuance and
administration of structured financings issued by the Company or any issuers
affiliated with ASFS with respect to which the Company acquires mortgage
interests or owns the underlying mortgage instruments. ASFS is a privately
held Arizona corporation which is indirectly beneficially owned by the
Class A shareholders of American Southwest Financial Corporation and
American Southwest Finance Co., Inc. The Class A shareholders of American
Southwest Financial Corporation and American Southwest Finance Co., Inc.
consist primarily of various individuals who have been long-term directors
as well as various numerous finance entities each of which was organized and
controlled by one or more separate concerns engaged in the homebuilding
business and none of which owns more than 10% of the shares of stock of
either of such corporations.
ASFS received administration fees of approximately $380,000 for 1993.
The Company has agreed to indemnify and hold harmless American Southwest
Financial Corporation, American Southwest Finance Co., Inc., ASFS and their
officers and directors from any action or claim brought or asserted by any
party by reason of any allegation that American Southwest Financial
Corporation, American Southwest Finance Co., Inc. or ASFS is an affiliate or
is otherwise accountable or liable for the debts or obligations of the
Company or its affiliates.
Jon A. Grove, Chairman of the Board, President and Chief Executive
Officer of the Company, is Chairman of the Board of Directors of American
Southwest Financial Corporation, American Southwest Finance Co., Inc.,
Westam Mortgage Financial Corporation and ASFS and owns less than 5% of the
voting stock of American Southwest Financial Corporation and American
Southwest Finance Co., Inc. and indirectly owns less than 5% of the voting
stock of ASFS.
The Company has entered into a property management agreement
(collectively the "Property Management Agreements") with the Property
Manager for each of the seventeen apartments acquired by the Company in
Janauary 1994. The Property Manager is an affiliate of the Manager. Each
Property Management Agreement, which has a current term through December 31,
1994, was approved by the Unaffiliated Directors. Under the agreement, the
Property Manager provides the customary property management services at its
cost without profit or distribution to its owners, subject to the limitation
of the prevailing management fee rates for similar properties in the market.
The Property Manager currently manages more than 6,000 apartment units,
including 2,461 units owned by the Company.
Security Ownership of Principal Stockholders and Management
As of March 30, 1994, there were outstanding 15,499,993 shares of Common
Stock. The following table sets forth the beneficial ownership of Common
Stock of the Company as of March 30, 1994 by each person known by the
Company to own more than 5% of the outstanding shares of Common Stock of
the Company, by each director of the Company, and by all directors and
executive officers of the Company as a group, which information as to
beneficial ownership is based upon statements furnished to the Company
by such persons. The number of shares also includes (1) any shares of
Common Stock owned of record by such person's minor children and spouse
and by other related individuals and entities over whose shares of
Common Stock such person has custody, voting control or the power of
disposition and (2) shares of Common Stock that such persons had the
right to acquire within 60 days of March 30, 1994 by the exercise of
stock options, (excluding the SARs) (see "Stock Option Plans"). Each
director and executive officer of the Company may be reached through the
Company at 335 North Wilmot, Suite 250, Tucson, Arizona 85711.
Number of Percent of
Shares Total (1)
--------- ----------
Jon A. Grove 382,502 2.4%
Joseph C. Chan 391,409 2.5
Frank S. Parise, Jr. 250,100 1.6
Earl M. Baldwin 16,306 (2)
John J. Gisi 54,671 (2)
Raymond L. Horn 28,863 (2)
Frederick C. Moor 15,861 (2)
All directors and executive
officers as a group (8 persons) 1,160,242 7.1%
(1) In calculating the percentage of ownership, the number of shares of
Common Stock that the identified person or group had the right to
acquire within 60 days of March 30, 1994 upon the exercise of stock
options is deemed to be outstanding for the purpose of computing the
percentage of the shares of Common Stock owned by such person, but such
shares are not deemed to be outstanding for the purpose of computing
the percentage of the shares of Common Stock owned by any other person.
(2) Less than 1% of the outstanding shares of Common Stock.
Executive Compensation
The following table sets forth the cash compensation paid to the
Company's executive officers whose total cash and cash equivalent
remuneration exceed $100,000 for the year ended December 31, 1993.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
----------------------
Awards
------
Name and Principal Annual Compensation Restricted Options/ LTIP All Other
Position Year Salary Bonus Other Stock SARs Payout Compensation
- -------------------------- ---- ------ ----- ----- ----- ----------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jon A. Grove (1) 1993 $284,520 666,667 (2)
Chairman, President 1992 160,000 90,323 (3)
and Chief Executive 1991 342,670 20,000
Officer
Frank S. Parise, Jr. (1) 1993 $285,393 673,141 (2)
Vice Chairman, 1992 160,000 --
Executive Vice 1991 332,215 20,000
President, Secretary
and Chief Administrative
Officer
Joseph C. Chan (1) 1993 $284,520 666,666 (2)
Director, Executive 1992 160,000 90,323 (3)
Vice President and 1991 342,670 20,000
Chief Operating
Officer
Dale A. Webber 1993 $108,150 -- --
Vice President 1992 105,000 30,000 3,620
1991 87,120 30,000 10,000
_________________________
(1) Messrs. Grove, Parise and Chan are not salaried employees of the Company and do not receive any cash or
cash equivalent compensation directly from the Company. They receive their compensation from the
Manager, the partners of which are corporations owned by these individuals. See "Certain Relationships
and Related Transactions." The amounts listed under Other Compensation represent the total cash payments
received or receivable from the Manager by these individuals and the corporations owned by them.
(2) Includes the stock options and phantom stock options granted on December 16, 1993 in connection with the
renewal of the Management Agreement for 1994.
(3) Includes 68,619 options granted in connection with the cancellation of an equal number of options granted
in 1989 and 1990 and DERs earned thereon.
</TABLE>
<PAGE>
The following tables set forth certain stock option information concerning
the officers included in the above table.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
% Of Total Potential Realizable Value
Options/ Options/SARs At Assumed Annual Rates Of
SARs Granted To Exercise Stock Price Appreciation
Granted Employees In Or Base Expiration For Option Term
(#) Fiscal Year Price (2) Date 5% (3) 10% (3)
------- ------------ --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Jon A. Grove (1) 666,667(1) 33% $1.72 12/16/98 $287,793 $635,948
Frank S. Parise, Jr. 666,667(1) 33% $1.72 12/16/98 $287,793 $635,948
6,474 1% $2.19 3/1/03 $8,917 $22,596
Joseph C. Chan (1) 666,667(1) 33% $1.72 12/16/98 $287,793 $635,947
Dale A. Webber None N/A N/A N/A N/A N/A
______________________________
(1) These options were granted in connection with the elimination of the incentive management fee
provision in the management agreement for 1994.
(2) All of the stock options and SARs have been granted at a price equal to or greater than the
market price on the grant date.
(3) This amount is the calculated future value of the stock options as of December 16, 1998 assuming
stock price appreciation rates of 5% and 10% per year as specified in Item 402(c)(2) of
Regulation S-K. As of April 20, 1994 the price of the Company's Common Stock was below the
exercise price; therefore, there was no realizable value as of such date.
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares at FY-End (#) at FY-End ($)
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable
---- ----------- -------- ------------- -------------
Jon A. Grove None N/A 328,553 None
454,678 None
Frank S. Parise, Jr. None N/A 252,675 None
448,760 None
Joseph C. Chan None N/A 328,552 None
454,678 None
Dale A. Webber None N/A 18,236 None
1,207 None
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors performed the
functions of making recommendations to the Board concerning the Company's
compensation policies applicable to its executive officers. Messrs. Grove,
Parise and Chan serve as both directors and the principal executive officers
of the Company. All compensation matters relating to the Company's
principal executive officers, however, were decided by the Unaffiliated
Directors, consisting of Messrs. Baldwin, Gisi, Horn and Moor. None of the
Unaffiliated Directors are, or have ever been, officers or employees of the
Company or any of its subsidiaries. Messrs. Grove, Parise and Chan
abstained from participating in the deliberations of the Board of Directors
concerning the approval of the Management Agreement, the Property Management
Agreements, the grant of stock options or any other matters relating to
their compensation for 1993. In addition, during 1993, none of the
executive officers, including Messrs. Grove, Parise and Chan, served on the
board of directors or the compensation committee of the entities that
employed any of the Unaffiliated Directors.
Compensation of Directors
During the fiscal year ended December 31, 1993, the Company paid an
annual director's fee to each Unaffiliated Director equal to $24,000, a fee
of $500 for each meeting of the Board of Directors attended by each
Unaffiliated Director and reimbursement of costs and expenses of all
directors for attending such meetings. Additionally, each member of the
Audit Committee and the Compensation Committee received a fee of $300 for
each meeting attended by the member. Affiliated Directors do not receive
any fees for serving on the Board of Directors.
Stock Option Plans
The Company has a nonstatutory stock option plan (the "Nonstatutory Stock
Option Plan") and an incentive stock option plan (the "Incentive Stock
Option Plan") (together the "Stock Option Plans"). The purpose of the Stock
Option Plans is to provide a means of performance-based compensation in
order to attract and retain qualified personnel and to provide incentive to
others whose job performance affects the Company. The Incentive Stock
Option Plan provides for incentive stock options which are intended to meet
the requirements of section 422A of the Internal Revenue Code, (the "Code")
("ISOs") and which may be granted to the officers and key personnel of the
Company. The Nonstatutory Stock Option Plan provides for non-qualified
stock options which may be granted to the Company's directors and key
personnel of the Manager.
The Stock Option Plans are administered by the Board of Directors,
which determines whether such options will be granted, whether such
options will be ISOs or non-qualified options, which directors, officers
and key personnel will be granted options and the number of options to
be granted, subject to the maximum amount of shares issuable under the
Stock Option Plans set forth below. In making such determinations, the
Board of Directors takes into account the duties and responsibilities of
the participants, their present and potential contribution to the
success of the Company and such other factors as the Board deems
relevant in connection with accomplishing the purpose of the Plan.
Under current law, ISOs cannot be granted to directors who are not also
employees, or to directors or employees of entities unrelated to the
Company.
Under the Stock Option Plans, options to purchase a maximum of 700,000
shares of the Company's Common Stock may be granted to the Company's
directors, officers and key personnel as well as to the directors, officers
and key personnel of the Manager. The exercise price for any option granted
may not be less than 100% of the fair market value of shares of Common Stock
at the time the option is granted. The optionholder may pay the exercise
price in cash or by delivery of previously acquired shares of Common Stock
of the Company. Generally, one-third of the options granted at any one time
are immediately exercisable, one-third are exercisable one year after the
date of grant and the remaining one-third become exercisable two years after
the date of grant. The options expire 10 years after the date of grant. No
option may be granted under the Stock Option Plans 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 of the
Company.
Prior to December 31, 1992, an optionholder received at no additional
cost dividend equivalent rights ("DERs") to the extent that dividends were
declared on the outstanding shares of Common Stock of the Company on record
dates during the period between the date an option was granted and the date
such option was exercised. DERs were converted to additional shares of the
Company's Common Stock by a formula whereby the number of shares subject to
the options was multiplied by the dividend per share and divided by the fair
market value per share (as determined in accordance with the Stock Option
Plans) to arrive at the total number of DERs to which an optionholder was
entitled. DERs were computed both with respect to the number of shares
under the option and with respect to the number of DERs previously earned by
the optionholder and not issued during the period prior to the dividend
record date. DERs earned were distributed in the form of shares of the
Company's Common Stock when the option is exercised.
In December 1992, to eliminate future operating expenses, the Company
amended the Stock Option Plans to eliminate the accrual of DERs from future
dividends. All optionholders agreed to apply the amendment to options
previously granted by eliminating DERs from such date forward on all
outstanding options.
Under each of the Stock Option Plans, an exercising optionholder has the
right to require the Company to purchase some or all of the optionholder's
shares of the Company's Common Stock. That redemption right is exercisable
by the optionholder only with respect to shares (including the related DERs)
that he has acquired by exercise of an option granted under the Stock Option
Plans which are restricted from transfer by federal securities law as a
result of grants or exercise of options or DERs under the Stock Option Plans
and such right must be exercised during the six months immediately following
the expiration of any such restriction.
The Stock Option Plans also allow the Company, at the time of the
exercise of options (including the related DERs), to elect to issue shares
of the Company's Common Stock or an amount of cash equal to the market value
of those shares (as determined in accordance with the terms of the Stock
Option Plans) or a combination of shares and cash (in the case of
qualified options, however, the cash alternative is limited only to shares
earned as a result of DERs).
No option granted under the Stock Option Plans is exercisable for a
period in excess of the term of the option as provided in the Stock Option
Plans, subject to earlier termination in the event of termination of
employment, retirement or death of the optionholder. An option may be
exercised in full or in part at any time or from time to time during the
term of the option, or provide for its exercise in stated installments at
stated times during the option term.
The Board of Directors may amend the Stock Option Plans at any time,
except that approval by the Company's stockholders is required for any
amendment that increases the aggregate number of shares that may be issued
pursuant to the Stock Option Plans, changes the class of persons eligible to
receive such options, modifies the period within which the options may be
exercised or the terms upon which options may be exercised, or increase the
material benefits accruing to the participants under the Stock Option Plans.
Unless previously terminated by the Board of Directors, the Stock Option
Plans will terminate in August 1997.
The following table sets forth for each director and executive officer of
the Company the number of options granted under the Stock Option Plans and
the stock options and SARs granted to Messrs. Grove, Parise and Chan in
connection with the change in the Management Agreement (see "Certain
Relationships and Related Transactions") that were exercisable as of
December 31, 1993 and the weighted average per share exercise price thereof.
Vested Non-Vested
------------------------ -----------------
Avg. Avg.
Options Price DERs Options Price
------- ----- ----- ------- -----
Directors:
Jon A. Grove 328,553 $2.16 6,241 454,678 $1.74
Joseph C. Chan 328,552 $2.16 6,241 454,678 $1.74
Frank S. Parise, Jr. 252,675 $1.87 8,294 448,760 $1.73
Earl M. Baldwin 11,079 $4.43 4,148 1,079 $1.81
Raymond L. Horn 11,079 $4.41 4,148 1,079 $1.63
John J. Gisi 51,548 $3.13 3,123 3,617 $2.63
Frederick C. Moor 11,033 $4.47 3,542 1,032 $2.13
Officers:
Dale A. Webber 11,667 $5.04 5,363 1,207 $2.63
The average per share exercise price does not include the effect of DERs
which have no cost to the optionholders. There are no DERs for the non-
vested options.
There were no exercises of stock options in 1993.
Report of Compensation Committee on Executive Compensation
The principal component of the Company's executive compensation during
1993 was the management fees paid to the Manager under the Management
Agreement. See "Certain Relationships and Related Transactions." The
Company's principal executive officers, Jon A. Grove, (Chairman of the
Board, President and Chief Executive Officer), Frank S. Parise, Jr., (Vice
Chairman of the Board, Executive Vice President and Chief Administrative
Officer), and Joseph C. Chan, (Director, Executive Vice President and Chief
Operating Officer), are not salaried employees of the Company, but are
employees of the Manager and corporations owned by them are partners in the
Manager. Accordingly, this report addresses the compensation arrangement
under the Management Agreement and the stock options granted to these
executives.
Except for stock option grants, the management fee payable under the
Management Agreement constituted the entire compensation received by these
executive officers. The Company does not provide these executives with any
fringe benefits, such as medical insurance benefits, retirement benefits,
employer-contributory benefit plans or any other employee benefit plans. In
addition, the Manager pays all costs of employing these executives,
including payroll taxes.
The Management Agreement has been in effect since the Company began
operations in August 1987. The Management Agreement is renewable annually
and must be approved by a majority of the Unaffiliated Directors. In
deciding to renew the Management Agreement, the Unaffiliated Directors
consider various factors, including the management compensation arrangements
of other entities similar to the Company, the experience of the principal
executive officers, the performance of the Manager, and the complexity of
the assets and operations of the Company.
Prior to 1994, a major element of the total management fees was the
incentive management fee which was earned only if the Company achieved a
return on the stockholders' equity in excess of a specified level. Thus,
the compensation of the principal executive officers depended directly on
the performance of the Company. This performance-based compensation
arrangement also provided for the automatic elimination of a major portion
of the Company's operating expenses when the Company's income did not exceed
the specified level (and the stockholders did not receive dividends in
excess of the specified level).
In connection with the renewal of the Management Agreement for 1994, the
Company and the Manager agreed to eliminate the incentive management fee
provision. As a substitute, the Company granted to Messrs. Grove, Parise and
Chan options to purchase 1,549,000 shares of the Company's Common Stock and
stock appreciation rights ("SARs") covering 451,000 shares of the Company's
Common Stock. The exercise price for the stock options and the phantom stock
options is $1.72 per share, which is 110% of the market price of the Common
Stock on the grant date. The Company adopted a new operating strategy in
1993 to transform the Company from a mortgage derivative REIT to a real
estate equity REIT. As a real estate equity REIT, the Company's objective is
to increase the cash flow and values of its real estate properties. Any
appreciation in the value of a property is not reported in taxable income
until the property is sold in a taxable transaction. In addition, as a
result of the net operating loss carryforward, the Company is not required
under the tax law to distribute as dividends to stockholders substantially
all of its taxable income, if any, reported in future years until the net
operating loss carryforward is fully utilized. Thus, any taxable income in
those future years is not required to be paid as dividends to the
stockholders. Accordingly, the Committee believes that the amount of taxable
income is no longer an appropriate criterion for relating the compensation
to management to the benefits obtained by the stockholders. The Committee
believes that the market price of its Common Stock provides the most
comprehensive criterion for determining the long term incentive compensation
for management and the stock options closely associate the interests of
management with those of the stockholders. In determining the number of the
options granted, the Committee considered various factors, including the
benefit of eliminating the incentive management fees, the stock-based
incentive compensation amount of other companies and the opportunities for
increases in the market price of the Company's Common Stock.
John J. Gisi Raymond L. Horn
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission ("SEC") and the American Stock Exchange. Officers, directors
and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) reports they file.
Based solely on the Company's review of such reports received by it
during the fiscal year ended December 31, 1993, and written representations
that no other reports were required, the Company believes that each person
who, at any time during such fiscal year, was a director, officer or
beneficial owner of more than 10% of the Company's Common Stock complied
with all Section 16(a) filing requirements during such year or prior fiscal
years.
Cumulative Total Returns Comparison
The following graph shows a five-year comparison of the cumulative total
returns (assuming reinvestment of dividends) for the Company, an industry
index compiled by the National Association of Real Estate Investment Trusts
("NAREIT"), the S&P 500, and the Peer Group consisting of Asset Investors
Corporation, Homeplex Mortgage Investments Corporation, RYMAC Mortgage
Investments Corporation and TIS Mortgage Investments Company. The index
compiled by NAREIT consists of approximately 30 mortgage-related REITs with
a total market capitalization of $2.7 billion. Any stockholder wishing to
receive a copy of the index may contact the Company.
PERFORMANCE GRAPH
----------------
TOTAL
NAREIT PEER
MORTGAGES S&P 500 ASR GROUP
--------- ------- --- -----
12/31/88 100.00 100.00 100.00 100.00
12/31/89 84.10 131.49 52.80 87.55
12/31/90 88.85 127.32 76.94 104.02
12/31/91 90.50 166.21 138.42 191.35
12/31/92 92.24 178.95 58.39 100.44
12/31/93 105.66 196.84 46.35 62.03
MARKET CAP
12/31/93
(in thousands) 28,094 59,918
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed Deloitte & Touche, independent
public accountants, to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 1994 and recommends that
stockholders vote in favor of the ratification of such appointment. In the
event of a negative vote on such ratification, the Board of Directors will
reconsider its selection. The Board of Directors anticipates that
representatives of Deloitte & Touche will be present at the Meeting, will
have the opportunity to make a statement if they desire, and will be
available to respond to appropriate questions.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Stockholder proposals that are intended to be presented by such
stockholders at the next annual meeting of the Company for the fiscal year
ending December 31, 1994 must be received by the Company no later than
January 1, 1995 in order to be included in the proxy statement and form of
proxy relating to such meeting.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Meeting. If
any other matters properly come before the Meeting, it is the intention of
the persons named in the enclosed proxy card to vote the shares they
represent as the Board of Directors may recommend.
Dated: May 2, 1994
<PAGE>
ASR INVESTMENTS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
The undersigned of ASR INVESTMENTS CORPORATION, a Maryland corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders
and Proxy Statement, each dated May 2, 1994, and hereby appoints Jon A.
Grove, Frank S. Parise, Jr., and Joseph C. Chan, and each of them, proxies
and attorneys-in-fact, with full power to each of substitution, on behalf
and in the name of the undersigned, to represent the undersigned at the
1994 Annual Meeting of Stockholders of ASR INVESTMENTS CORPORATION, to be
held on Wednesday, June 15, 1994 at 9:00 a.m., at the Viscount Suite Hotel,
4855 East Broadway, Tucson, Arizona and at any adjournment or adjournments
thereof, and to vote all shares of Common Stock that the undersigned would
be entitled to vote if then and there personally present, on the matters set
forth on the reverse side.
THE PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS; FOR THE RATIFICATION
OF THE APPOINTMENT OF DELOITTE & TOUCHE AS INDEPENDENT AUDITORS OF THE
COMPANY; AND AS THE PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.
A majority of such attorneys or substitutes as shall be present and
shall act at the meeting or any adjournment or adjournments therefor (or if
only one shall be present and act, then that one) shall have and may
exercise all of the powers of the attorneys-in-face hereunder.
(Continued and to be signed on reverse side.)
- ----------------------------------------------------------------------------
<PAGE>
This Proxy is solicited on behalf of Please mark
the Board of Directors. [ X ] your votes
this way
____________ _________________
COMMON D.R.S.
1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD (If you wish to with-
listed to the right AUTHORITY hold authority to vote
(except as indicated) to vote for all nominees for any individual
listed to the right nominee, strike a line
through the nominee's
[ ] [ ] name in the list
below):
Jon A. Grove;
Frank S. Parise, Jr.;
Joseph C. Chan;
Earl M. Baldwin;
John J. Gisi;
Raymond L. Horn and
Frederick C. Moor
2. Proposal to ratify the appointment of
Deloitte & Touche as the independent
auditors of the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Dated:__________________________, 1994
______________________________________
Signature
______________________________________
Signature
(This proxy should be dated, signed by
the stockholder(s) exactly as his or
her name appears hereon, and returned
promptly in the enclosed envelope.
Persons signing in a fiduciary
capacity should so indicate. If
shares are held by joint tenant or as
a community property, both stock-
holders must sign.)
