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:
[ X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
ASR Investments Corporation
(Name of Registrant as Specified In Its Charter)
Joseph C. Chan, Executive Vice President and Chief Operating Officer
(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:
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: __/
4) Proposed maximum aggregate value of transaction:
__/ 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
ASR INVESTMENTS CORPORATION
335 North Wilmot, Suite 250
Tucson, Arizona 85711
(520) 748-2111
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 17, 1995
The Annual Meeting of Stockholders of ASR Investments Corporation, a
Maryland corporation (the Company ), will be held on May 17, 1995 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 consider and vote on a proposed reverse split of the currently
outstanding shares of the Company's Common Stock on the basis of one share of
Common Stock, $.01 par value, for five shares of currently outstanding Common
Stock, $.01 par value.
3. To ratify the appointment of Deloitte & Touche LLP as the independent
auditors of the Company for the fiscal year ending December 31, 1995.
4. 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 24, 1995 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
March , 1995
<PAGE>
ASR INVESTMENTS CORPORATION
335 North Wilmot, Suite 250
Tucson, Arizona 85711
(520) 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
May 17, 1995 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 March 31, 1995
to all stockholders entitled to vote at the Meeting.
The information contained in the Compensation Committee Report on Executive
Compensation and Performance of the Common Stock elsewhere herein 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 24, 1995 (the
Record Date ) are entitled to notice of and to vote at the Meeting. On the
Record Date, there were issued and outstanding 15,749,296 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
in the election of directors and on each other matter to come before the
Meeting. Cumulative voting in the election of directors is not permitted.
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 1994 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 Agreements (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 50 Chairman of the Board, President,
Chief Executive Officer and Director
Frank S. Parise, Jr. 43 Vice Chairman, Executive Vice President,
Chief Administrative Officer, Secretary
and Director
Joseph C. Chan 43 Executive Vice President, Chief
Operating Officer, Treasurer and
Director
Dale A. Webber 34 Vice President
Mary C. Swanton 28 Controller
Earl M. Baldwin 51 Director
John J. Gisi 49 Director
Raymond L. Horn 65 Director
Frederick C. Moor 63 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 and its affiliates since their
organization; 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.
Mary C. Swanton has been Controller of the Company since May 1994. Ms.
Swanton was employed by Deloitte & Touche LLP, an international accounting firm,
from her graduation from college in May 1990 until she joined the Company in May
1994.
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
LLP) 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 (now Bank One 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.
Meetings and Committees
During the year ended December 31, 1994, the Board of Directors of the
Company held a total of eight 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, 1994 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
Agreements. As there were no changes to the Management Agreement or the Property
Management Agreements for 1995, the Compensation Committee did not meet
separately during the year ended December 31, 1994. 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. 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, $20,000 for the aggregate mortgage interests acquired in
1991 and $20,000 for the aggregate mortgage interests acquired in 1992. In 1994,
the Company paid the Manager management fees of approximately $544,000 and
administration fees of approximately $248,000. The payment of such fees was
unanimously approved by the Unaffiliated Directors.
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 was 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 and 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. In 1994, the Company paid Messrs. Grove, Parise and
Chan $66,667 each based on the $.10 per share of dividend declared and paid in
December 1994. Two-thirds of the options and SARs are currently exercisable 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.
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 assets by the Manager or
its affiliates.
The Company has entered into a property management agreement (collectively
the Property Management Agreements) with the Property Manager for each of the
apartments acquired by the Company. The Property Manager is an affiliate of the
Manager. Each Property Management Agreement, which has a current term through
December 31, 1995, 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 approximately 5,000 apartment
units. In 1994, the Company paid the Property Manager $184,000 which amounted to
1.5% of the total revenues of the apartments.
The Company owns certain mortgage interests with respect to structured
financing issued by American Southwest Financial Corporation ("ASFC"). An
affiliate of ASFC performs the customary administration services and receives
fees for such services of $12,500 per year ($20,000 prior to May 1994) for each
series of structured financing. The Company believes that the fees charged by
ASFC are comparable to those charged by other companies performing similar
services. Jon A. Grove, Chairman of the Board, President and Chief Executive
Officer of the Company, is Chairman of the Board of Directors of ASFC and its
affiliates and owns less than 5% of the voting stock of ASFC. The Company has
agreed to indemnify and hold harmless ASFC and certain affiliates from any
action or claim brought or asserted by any party by reason of any allegation
that ASFC or such affiliates is an affiliate or is otherwise accountable or
liable for the debts or obligations of the Company or its affiliates.
Security Ownership of Principal Stockholders and Management
As of March 15, 1995, there were outstanding 15,749,296 shares of Common
Stock. The following table sets forth the beneficial ownership of Common Stock
of the Company as of March 15, 1995 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 15, 1995 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 558,847 3.5%
Joseph C. Chan 627,754 3.9
Frank S. Parise, Jr. 422,211 2.7
Earl M. Baldwin 17,385 (2)
John J. Gisi 57,671 (2)
Raymond L. Horn 29,942 (2)
Frederick C. Moor 16,893 (2)
All directors and executive
officers as a group (8 persons) 1,750,856 10.4%
(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 15, 1995 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, 1994.
<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>
Jon A. Grove (1) 1994 $251,747 $66,667 (2)
Chairman, President 1993 284,520 666,667 (3)
and Chief Executive 1992 160,000 90,323
Officer
Frank S. Parise, Jr. (1) 1994 $251,747 $66,667 (2)
Vice Chairman, 1993 285,393 673,141 (3)
Executive Vice 1992 160,000
President, Secretary
and Chief Administrative
Officer
Joseph C. Chan (1) 1994 $251,747 $66,667 (2)
Director, Executive 1993 284,520 666,666 (3)
Vice President and 1992 160,000 90,323
Chief Operating
Officer
Dale A. Webber 1994 $108,447 40,000
Vice President 1993 108,150
1992 105,000 $30,000 3,620
</TABLE>
(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) Represents the dividend equivalent payments on the stock options and SARs
held by these individuals. (3) Includes the stock options and SARs granted on
December 16, 1993 in connection with the renewal of the Management
Agreement for 1994.
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 (1) Date 5% (2) 10% (2)
--------- ------------ ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Jon A. Grove None N/A N/A N/A N/A N/A
Frank S. Parise, Jr. None N/A N/A N/A N/A N/A
Joseph C. Chan None N/A N/A N/A N/A N/A
Dale A. Webber 40,000 57% $2.25 7/18/04 $56,600 $143,437
(1) All of the stock options have been granted at a price equal to the market
price on the grant date.
(2) This amount is the calculated future value of the stock options as of the
expiration date assuming stock price appreciation rates of 5% and 10% per
year as specified in Item 402(c)(2) of Regulation S-K.
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares at FY-End (#) at FY-End ($)
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable
------------ ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Jon A. Grove None N/A 561,009 $180,000
222,222 90,000
Frank S. Parise, Jr. None N/A 477,055 180,000
224,380 90,000
Joseph C. Chan None N/A 561,008 180,000
222,222 90,000
Dale A. Webber None N/A 19,653 None
26,667 None
</TABLE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors performs 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, are decided by the Unaffiliated Directors, consisting of Messrs.
Baldwin, Gisi, Horn and Moor. The principal executive officers make
recommendation to the Board concerning the compensation of other executive
officers of the Company. 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 abstain from participating in the deliberations of the
Board of Directors concerning the approval of the Management Agreement, the
Property Management Agreements, or any other matters relating to their
compensation. In addition, during 1994, 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, 1994, 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 employee, 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.
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 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
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, 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.
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 increases 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, 1994 and the
weighted average per share exercise price thereof.
<TABLE>
<CAPTION>
Vested Non-Vested
----------------------------------------- ---------------------
Avg. Avg.
Options Price DERs Options Price
------- ----- ---- ------- -----
<S> <C> <C> <C> <C> <C>
Directors:
Jon A. Grove 554,768 $2.00 6,241 222,222 $1.72
Joseph C. Chan 554,767 2.00 6,241 222,222 1.72
Frank S. Parise, Jr. 468,761 1.85 8,294 224,380 1.73
Earl M. Baldwin 12,158 4.19 4,148 1,079 1.81
John J. Gisi 55,165 3.10 3,123
Raymond L. Horn 12,158 4.16 4,148 1,079 1.63
Frederick C. Moor 12,065 4.27 3,542 1,033 2.13
Officers:
Dale A. Webber 18,620 2.45 1,033 26,667 2.25
</TABLE>
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 1994.
Report of Compensation Committee on Executive Compensation
The principal component of the Company's executive compensation during 1994
was the management fees paid to the Manager under the Management Agreement and
the benefits of the stock options and SARs granted to the executives in 1993.
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. The principal executive officers also
are the stockholders of the Property Manager which receives reimbursement from
the Company for the costs of providing the customary property management
services for the Company's apartment communities. (See Certain Relationships and
Related Transactions. ) The Compensation Committee does not consider such
reimbursement as compensation to these executive officers as the reimbursement
is based on cost at no profit or distribution to 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's taxable income
before net operating loss carryforward exceeded a specified level. This
performance-based compensation arrangement provided for the automatic
elimination of a major portion of the Company's operating expenses when the
Company's taxable income did not exceed 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 was 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, substantially all of the Company's taxable income, if any,
reported in 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, 1994, 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 )
and the S&P 500. The index compiled by NAREIT consist of 173 property REITs with
a total market capitalization of $38.8 billion as of December 31, 1994. Any
stockholder wishing to receive a copy of the index may contact the Company.
12/89 12/90 12/91 12/92 12/93 12/94
----- ----- ----- ----- ----- -----
Company 100 146 262 111 88 108
S&P 100 97 125 136 150 152
NAREIT Equity Index 100 96 115 132 149 150
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION
TO EFFECT A ONE-FOR-FIVE REVERSE STOCK SPLIT
Summary of Proposal
The stockholders are being requested to approve a proposal to amend Section
1 of Article VI of the Company's First Amended and Restated Articles of
Incorporation, as amended (the Articles ) to provide for a one-for-five reverse
stock split of the Company's Common Stock and to maintain the par value at $0.01
per share. The text of Section 1 of Article VI, as it is proposed to be amended,
is set forth in full in the Proposed Certificate of Amendment to the Amended and
Restated Articles of Incorporation included in this Proxy Statement as Exhibit
A.
Under the proposal, each outstanding share of Common Stock, $.01 par value
( Existing Stock ) would automatically become one-fifth of one share of new
Common Stock, $.01 par value ( New Stock ). The outstanding stock certificates
for Existing Stock will represent one-fifth as many shares of New Stock after
the reverse stock split is effected.
If the proposal is approved at the Meeting, the Company will notify all
stockholders of effectiveness of the reverse stock split and the procedures to
exchange stock certificates representing New Stock for stock certificates
representing Existing Stock. As a result of this exchange, stockholders will
receive certificates representing their shares of New Stock rounded down to the
nearest whole number, together with cash representing the fair value of any
fractional share of New Stock. The Company's transfer agent will be instructed
not to accept for transfer certificates representing Old Stock other than in
exchange for certificates representing New Stock.
No script or fractional share certificates for New Stock will be issued in
connection with the reverse stock split. The fair value paid in lieu of
fractional shares will be determined by calculating the average closing prices
on the American Stock Exchange during the 15 trading days prior to the filing of
the amendment to the Articles.
The proposal would NOT change the number of the Company's authorized Common
Stock. The proposal also would NOT affect a stockholder's proportionate interest
in the Company or proportionate voting rights (except for the effect of
receiving cash in lieu of any fractional shares of New Stock).
It should be noted that any increase in market value may be proportionately
less than the decrease in the number of shares. No rights of appraisal or
dissenters' rights exist with respect to the proposal.
The proposal may be abandoned by the Board of Directors at any time before
or after the Meeting and prior to the time at which the Certificate of Amendment
for the reverse stock split becomes effective if for any reason the Board of
Directors deems it advisable to abandon the Proposal.
Reasons for the Proposal
The Board of Directors believes that this proposal would make the Common
Stock eligible for investment by a greater number of institutional investors
which would increase the demand for the Company's Common Stock and improve the
price and liquidity of the Common Stock. The Board of Directors believes that
the proposal would enhance stockholders' value for the following reasons:
1. Institutional investors generally have policies that preclude them from
investing in common stocks whose prices are below a certain level, typically $10
per share. As institutional investors constitute a majority of the investors in
equity REITs, the Company believes that its Common Stock would be more
attractive to a greater number of institutional investors if it traded at a
higher price. The Company believes that a higher per share price would
significantly increase the liquidity and demand for the Common Stock which
should have a favorable effect on the price of the Common Stock.
2. Normal price volatility would have a significantly less effect on the
price of the Common Stock if the per share price were higher. Thus, a higher per
share price should result in less volatility from normal price changes.
3. Many stock brokerage firms set a minimum per share price level for
stocks that can be used for margin borrowing. The minimum price level generally
varies from $3 to $5 per share. A higher stock price would make the Company's
Common Stock eligible for margin borrowing and would give stockholders more
flexibility in investing in the Company's Common Stock.
4. Most property REITs have a common stock price in the range of $15 to $25
per share. The proposal would make the Company's Common Stock price comparable
with other property REITs.
5. Many stock brokerage firms set a minimum per share commission on the
purchase or sale of common stock. The proposal would reduce the transaction
costs on the trading of the Common Stock.
Federal Income Tax Implication
The following discussion of federal income tax implication is based on the
Internal Revenue Code of 1986, as amended, the applicable Treasury Regulations
promulgated thereunder, judicial authority and current administrative rulings
and practices in effect on the date of this Proxy Statement. This discussion is
for general information only and does not discuss consequences which may apply
to special classes of taxpayers or specific situations pertaining to individual
taxpayers. Stockholders are urged to consult their own tax advisors to determine
the particular consequences to them.
The exchange of shares of Existing Stock will not result in recognition of
gain or loss except to the extent of the cash received for fractional shares.
The holding period of the shares of New Stock will include the stockholder's
holding period for the shares of Existing Stock exchanged therefor. A
stockholder who receives cash for fractional shares will be treated as if the
stockholder has sold the fractional shares for cash. The stockholder should
recognize gain or loss measured by the difference between the amount of cash
received and the basis allocable to the fractional shares as if the fractional
shares had actually been issued.
Required Vote
The Board of Directors has unanimously approved this proposed amendment to
the Articles of Incorporation. The affirmative vote of a majority of the
outstanding shares of the Company's Common Stock is required for approval of the
amendment. The Board of Directors recommends a vote FOR the proposed amendment
to the Articles.
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP, independent
public accountants, to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 1995 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 LLP 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, 1995 must be received by the Company no later than January
1, 1996 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: March , 1995
EXHIBIT A
PROPOSED
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ASR INVESTMENTS CORPORATION
Upon this Certificate of Amendment to the Amended and Restated Articles of
Incorporation becoming effective pursuant to the Maryland General Corporation
Law (the Effective Time ), each outstanding share of Common Stock, par value
$.01 per share ( Existing Stock ), shall thereupon be reclassified and changed
into one-fifth of one share of Common Stock, par value $.01 per share ( New
Stock ). Upon such Effective Time, each holder of Existing Stock shall thereupon
automatically be and become the holder of one-fifth of one share of New Stock
for every share of Existing Stock then held by such holder. Upon such Effective
Time, each certificate formerly representing a stated number of shares of
Existing Stock shall thereupon be a certificate for and shall represent
one-fifth of the number of shares of New Stock as is stated in such certificate.
As soon as practicable after such Effective Time, stockholders as of the date of
the reclassification will be notified thereof and, upon their delivery of their
certificates for Existing Stock to the Company, will be sent stock certificates
representing their shares of New Stock, rounded down to the nearest whole
number, together with cash representing the fair value of such holder's
fractional shares of Existing Stock. No script or fractional share certificates
for Existing Stock will be issued in connection with this reverse stock split.
The fair value paid in lieu of fractional shares will be determined by
calculating the average of the closing price on the American Stock Exchange for
shares of Existing Stock, on the 15 trading days prior to the date the
Certificate of Amendment is filed.
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 March , 1995, 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 1995 Annual Meeting
of Stockholders of ASR INVESTMENTS CORPORATION, to be held on Wednesday, May 17,
1995 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 approval of the
amendment to the Restated and Amended Articles of Incorporation of ASR
Investments Corporation to effect a 1 for 5 reverse stock split; FOR the
ratification of the appointment of Deloitte & Touche LLP 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 thereof (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-fact hereunder.
(Continued and to be signed on reverse side.)
This Proxy is solicited on behalf of the Board of Directors.
Please mark
__________ __________ /X/ your vote
COMMON D.R.S. this way
1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as indicated) to vote for all nominees
listed to the right
/ / / /
(If you wish to withhold authority to vote for any individual 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 amend the Amended and Restated Articles of Incorporation to
effect a 1 for 5 reverse stock split.
FOR AGAINST ABSTAIN
/ / / / / /
3. Proposal to ratify the appointment of Deloitte & Touche LLP as the
independent auditors of the Company.
FOR AGAINST ABSTAIN
/ / / / / /
Dated:_______________________, 1995
___________________________________
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 stockholders must sign.)
