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
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to 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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ X ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
ASR INVESTMENTS CORPORATION
335 NORTH WILMOT, SUITE 250
TUCSON, ARIZONA 85711
(520) 748-2111
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 1996
----------------------------------------
The Annual Meeting of Stockholders of ASR Investments Corporation, a Maryland
corporation (the "Company"), will be held on May 15, 1996 at 9:00 a.m., at the
Viscount Suite Hotel, 4855 E. Broadway Blvd., 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 LLP as the independent
auditors of the Company for the fiscal year ending December 31, 1996.
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 29, 1996 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,
/s/ Frank S. Parise, Jr.
---------------------------
Frank S. Parise, Jr.
Secretary
Tucson, Arizona
March 29, 1996
<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 15, 1996 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 E. Broadway Blvd., Tucson, Arizona.
These proxy solicitation materials were mailed on or about April 15, 1996 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 29, 1996 (the
"Record Date") are entitled to notice of and to vote at the Meeting. On the
Record Date, there were issued and outstanding 3,154,495 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.
Votes cast by proxy or in person at the Meeting will be tabulated by the
election inspectors appointed for the Meeting and will determine whether a
quorum is present. The election inspectors will treat abstentions as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum but as unvoted for purposes of determining the approval of any matter
submitted to the stockholders for a vote. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present and entitled
to vote with respect to that matter.
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.
1
<PAGE>
ANNUAL REPORT
The 1995 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.
The Company will provide upon written request, without charge to each
stockholder of record as of the Record Date, a copy of the Company's annual
report on Form 10-K for the year ended December 31, 1995 as filed with the SEC.
Any exhibits listed in the Form 10-K report also will be furnished upon request
at the actual expense incurred by the Company in furnishing such exhibit. Any
such requests should be directed to the Company at 335 North Wilmot, Suite 250,
Tucson, Arizona 85711.
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.
2
<PAGE>
Information Concerning Directors and Executive Officers of the Company
The following table sets forth certain information regarding the Company's
directors and executive officers.
<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH THE COMPANY
---- --- ----------------------------
<S> <C> <C>
Jon A. Grove 51 Chairman of the Board, President, Chief Executive Officer and Director
Frank S. Parise, Jr. 44 Vice Chairman, Executive Vice President, Chief Administrative Officer,
Secretary and Director
Joseph C. Chan 44 Executive Vice President, Chief Operating Officer, Treasurer and Director
Dale A. Webber 35 Vice President
Roger A. Karber 41 Vice President, Property Development
Mary C. Clements 29 Controller
Earl M. Baldwin 52 Director
John J. Gisi 50 Director
Raymond L. Horn 66 Director
Frederick C. Moor 64 Director
</TABLE>
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 Holdings, Inc. 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.
Roger A. Karber has been Vice President, Property Development of the Company
since January 1995. From 1989 to 1994, Mr. Karber was president of Festival
Markets, Inc., a company that developed specialty retail centers. From 1979 to
1989, Mr. Karber was employed by The Estes Co., where he was instrumental in
establishing its apartment operations which included developing over 1,500
apartment units.
Mary C. Clements has been Controller of the Company since May 1994. Ms.
Clements was employed by Deloitte & Touche LLP, an international accounting
firm, from her graduation 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
3
<PAGE>
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, 1995, the Board of Directors of the
Company held a total of six 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 1995 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
1996, the Compensation Committee did not meet separately during 1995. 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
4
<PAGE>
(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 1995, the
Company paid the Manager management fees of approximately $374,000 and
administration fees of approximately $216,000. The payment of such fees was
unanimously approved by the Unaffiliated Directors.
In connection with the renewal of the Management Agreement beginning with
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 309,800 shares of the Company's Common Stock
and stock appreciation rights ("SARs") covering 90.200 shares of the Company's
Common Stock. The exercise price is $8.60 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 1995, the Company paid Messrs. Grove, Parise and
Chan $266,667 each based on the total dividends of $2.00 per share paid in 1995.
All of the options and SARs are currently exercisable. 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, 1996, 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 1995, the Company paid the Property Manager $417,000 which amounted to
3% of the total revenues of the apartments.
5
<PAGE>
The Company owns certain mortgage interests with respect to structured
financing issued by American Southwest Holdings, Inc. ("ASH"). An affiliate of
ASH performs the customary administration services and receives fees for such
services of $12,500 per year for each series of structured financing. The
Company believes that the fees charged by ASH 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 ASH and its affiliates and owns 12.5% of the voting stock
of ASH. The Company has agreed to indemnify and hold harmless ASH and certain
affiliates from any action or claim brought or asserted by any party by reason
of any allegation that ASH or such affiliates is an affiliate or is otherwise
accountable or liable for the debts or obligations of the Company or its
affiliates.
In 1995, Messrs. Grove, Chan, Gisi and Webber exercised options to purchase a
total of 50,496 shares of the Company's Common Stock by executing full recourse
promissory notes totaling $653,000 to the Company. The notes are secured by the
shares of Common Stock issued and bear interest, payable monthly, at the prime
rate plus 1%. The notes are due on December 31, 1996 and can be repaid by
delivering to the Company shares of Common Stock owned by the individuals based
on the then market price of the Common Stock.
Security Ownership of Principal Stockholders and Management
As of March 15, 1996, there were outstanding 3,154,495 shares of Common
Stock. The following table sets forth the beneficial ownership of Common Stock
of the Company as of March 15, 1996 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, 1996 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 146,191 4.5%
Joseph C. Chan 157,472 4.8
Frank S. Parise, Jr. 119,295 3.7
Earl M. Baldwin 3,477 (2)
John J. Gisi 11,658 (2)
Raymond L. Horn 5,988 (2)
Frederick C. Moor 3,378 (2)
All directors and executive officers
as a group (10 persons) 466,622 13.3%
- ----------
(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, 1996 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.
6
<PAGE>
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, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------------
Awards Payouts
-------------------------- ---------
Annual Compensation
Name and Principal -------------------------- 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) 1995 $180,431 -- --
Chairman, President 1994 251,747 -- --
and Chief Executive 1993 284,520 666,667(2) --
Officer
Frank S. Parise, Jr. (1) 1995 $180,431 -- --
Vice Chairman, 1994 251,747 -- --
Executive Vice 1993 285,393 673,141(2) --
President, Secretary
and Chief
Administrative
Officer
Joseph C. Chan (1) 1995 $180,431 -- --
Director, Executive 1994 251,747 -- --
Vice President and 1993 284,520 666,666(2) --
Chief Operating
Officer
Dale A. Webber 1995 $108,447 -- --
Vice President 1994 108,447 -- 40,000
1993 108,150 -- --
Roger A. Karber 1995 $100,000 $15,000
Vice President
<FN>
- ----------
(1) Messrs. Grove, Parise and Chan are not salaried employees of the Company and
do not receive any cash or cash equivalent compensation directly from the
Company. They receive their compensation from the Manager, the partners of
which are corporations owned by these individuals. See "Certain
Relationships and Related Transactions." The amounts listed under Other
Compensation represent the total cash payments received or receivable from
the Manager by these individuals and the corporations owned by them.
(2) Includes the stock options and SARs granted on December 16, 1993 in
connection with the renewal of the Management Agreement for 1994.
</FN>
</TABLE>
7
<PAGE>
The following tables set forth certain stock option information concerning
the officers included in the above table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
% Of Total
Options/ Options/SARs
SARs Granted To Exercise Potential
Granted Employees In Or Base Expiration Realizable
(#) Fiscal Year Price Date Value
--- ----------- ----- ---- -----
Jon A. Grove None N/A N/A N/A N/A
Frank S. Parise, Jr. None N/A N/A N/A N/A
Joseph C. Chan None N/A N/A N/A N/A
Dale A. Webber None N/A N/A N/A N/A
Roger A. Karber None N/A N/A N/A N/A
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares at FY-End (#) at FY-End ($)
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable
---- ----------- -------- ------------- -------------
Jon A. Grove 18,065 $79,033 138,581 $970,000
-- --
Frank S. Parise, Jr. -- -- 140,287 986,500
-- --
Joseph C. Chan 18,065 79,033 138,581 970,000
-- --
Dale A. Webber 5,334 36,003 1,306 4,521
2,624 12,331
Roger A. Karber None N/A N/A N/A
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 1995, 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.
8
<PAGE>
Compensation of Directors
During the fiscal year ended December 31, 1995, 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 140,000 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.
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
9
<PAGE>
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.
As of December 31, 1995, options to purchase 47,944 shares of Common Stock
were outstanding and options to purchase 5,901 shares were available for grant
under the Plans.
Report of Compensation Committee on Executive Compensation
The principal component of the Company's executive compensation during 1995
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 compensation arrangements of other entities similar to
the Company, the experience of the Manager, 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 beginning with
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 309,800 shares of the Company's Common Stock and stock
appreciation rights ("SARs") covering 90,200 shares of the Company's Common
Stock. The exercise price for the stock options and SARs was $8.60 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
10
<PAGE>
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 and SARs 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, 1995, 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.
11
<PAGE>
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 178 property REITs with
a total market capitalization of $49.9 billion as of December 31, 1995. Any
stockholder wishing to receive a copy of the index may contact the Company.
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
Company 100.00 179.90 75.89 60.24 73.95 123.77
S&P 100.00 130.55 140.59 154.80 156.63 212.25
NAREIT 100.00 136.70 155.49 186.06 191.95 221.26
Equity Index
12
<PAGE>
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, 1996 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, 1996 must be received by the Company no later than January 1, 1997 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 29, 1996
13
<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 March 29, 1996, 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 15,
1996 at 9:00 a.m., at the Viscount Suite Hote, 4855 East Broadway Blvd., Tucson,
Arizona and at any adjournment or adjournment 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 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 (of 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.)
- --------------------------------------------------------------------------------
Please mark
[X] your vote as
indicated in
this example
This proxy is solicited on behalf of the Board of Directors
-------------------- --------------------
COMMON D.R.S.
1. ELECTION OF DIRECTORS:
(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
[ ] FOR all nominees listed to the right (except as indicated)
[ ] WITHHELD AUTHORITY to vote for all nominees listed to the right.
2. Proposal to ratify the appointment of Deloitte & Touche LLP as the
independent auditors of the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Dated: ,1996
----------------------------------
- ---------------------------------------------
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.
- --------------------------------------------------------------------------------
ASR INVESTMENTS CORPORATION
Your Vote is Important to the Company
Please sign and return your Proxy by
tearing off the Top Portion of the sheet
and returning it in the Enclosed Postage-Paid Envelope.
