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 Section 240.14a-11(c) or Section 240.14a-12
RESOURCE MORTGAGE CAPITAL, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[RESOURCE MORTGAGE CAPITAL, INC. LOGO]
Resource Mortgage Capital, Inc.
- --------------------------------------------------------------------------------
Notice of Annual Meeting of Stockholders
and
Proxy Statement
- --------------------------------------------------------------------------------
Annual Meeting of Stockholders
April 23, 1996
<PAGE>
[RESOURCE MORTGAGE CAPITAL, INC. LOGO]
RESOURCE MORTGAGE CAPITAL, INC.
March 5, 1996
To Our Stockholders:
You are cordially invited to attend the 1996 Annual Meeting of
Stockholders of Resource Mortgage Capital, Inc. to be held at The Omni Richmond
Hotel, 100 S. 12th Street, Richmond, Virginia on Tuesday, April 23, 1996, at
2:00 p.m. Eastern time.
The business of the meeting is to elect the Directors and approve the
appointment of KPMG Peat Marwick LLP as auditors for the Company. Information
about the nominees for election is in the proxy statement on the following
pages.
While stockholders may exercise their right to vote their shares in
person, we recognize that many stockholders may not be able to attend the Annual
Meeting. Accordingly, we have enclosed a proxy which will enable you to vote
your shares on the issues to be considered at the Annual Meeting even if you are
unable to attend. All you need to do is mark the proxy to indicate your vote,
date and sign the proxy, and return it in the enclosed postage-paid envelope as
soon as conveniently possible. If you desire to vote in accordance with
management's recommendations, you need not mark your votes on the proxy but need
only sign, date and return the proxy in the enclosed postage-paid envelope in
order to record your vote.
Sincerely,
/s/ THOMAS H. POTTS
Thomas H. Potts
President
<PAGE>
[RESOURCE MORTGAGE CAPITAL, INC. LOGO]
RESOURCE MORTGAGE CAPITAL, INC.
4880 COX ROAD
GLEN ALLEN, VIRGINIA 23060
(804)967-5800
----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
The Annual Meeting of Resource Mortgage Capital, Inc. will be held at
The Omni Richmond Hotel, 100 S. 12th Street, Richmond, Virginia on Tuesday,
April 23, 1996, at 2:00 p.m. Eastern time, to consider and act upon the
following matters:
1. the election of five Directors, each for a one-year term;
2. approval of the appointment of KPMG Peat Marwick LLP, independent
certified public accountants, as auditors for the Company; and
3. such other business as may properly come before the Annual Meeting.
Only stockholders of record at the close of business on March 1, 1996, the
record date, will be entitled to vote at the Annual Meeting.
Management desires to have maximum representation at the Annual Meeting
and respectfully requests that you date, execute and promptly mail the enclosed
proxy in the accompanying postage-paid envelope. A proxy may be revoked by a
stockholder by notice in writing to the Secretary of the Company at any time
prior to its use, by presentation of a later-dated proxy, or by attending the
Annual Meeting and voting in person.
By order of the Board of Directors
/s/ LYNN K. GEURIN
Lynn K. Geurin
Secretary
Dated: March 5, 1996
<PAGE>
DIRECTIONS TO THE OMNI RICHMOND HOTEL
PHONE NUMBER: (804)344-7000
[PLACE MAP HERE]
Recommended Directions from I-95:
Exit off of I-95 on to I-195 (Exit #74A - Downtown Expressway).
Take the Canal Street exit. Proceed on Canal Street to 10th Street. Turn
right on 10th Street. Proceed on 10th Street to Cary Street. Turn Right on
Cary Street. Proceed on Cary Street to 12th Street. Turn right on 12th
Street. The Omni Richmond Hotel (100 S. 12th Street) is located on the
corner of 12th and Cary Streets. Enter the parking garage in the basement of
the hotel off 12th Street at the front entrance of the hotel.
<PAGE>
RESOURCE MORTGAGE CAPITAL, INC.
4880 COX ROAD
GLEN ALLEN, VIRGINIA 23060
(804)967-5800
----------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 1996
To Our Stockholders:
This proxy statement is furnished with the solicitation by the Board of
Directors of Resource Mortgage Capital, Inc. (the "Company") of proxies to be
used at the Annual Meeting of Stockholders of the Company to be held at The Omni
Richmond Hotel, 100 S. 12th Street, Richmond, Virginia on Tuesday, April 23,
1996, at 2:00 p.m. Eastern time. The Annual Meeting is being held for the
purposes set forth in the accompanying notice of Annual Meeting of Stockholders.
This proxy statement, the accompanying proxy card and the notice of Annual
Meeting are being provided to stockholders beginning on or about March 5, 1996.
GENERAL INFORMATION
SOLICITATION
The enclosed proxy is solicited by the Board of Directors of the Company.
The costs of this solicitation will be borne by the Company. Proxy solicitations
will be made by mail, and also may be made by personal interview, telephone and
telegram by Directors and officers of the Company. Brokerage houses and nominees
will be requested to forward the proxy soliciting material to the beneficial
owners and to obtain authorization for the execution of proxies. The Company
will, upon request, reimburse such parties for their reasonable expenses in
forwarding proxy materials to their beneficial owners. Additionally, the Company
has engaged the firm of MacKenzie Partners, Inc., New York, New York, to conduct
proxy solicitations on its behalf at a cost estimated to be $5,000, plus
reasonable out-of-pocket expenses.
VOTING RIGHTS
Holders of shares of the Company's common stock at the close of business
on March 1, 1996, the record date, are entitled to notice of, and to vote at,
the Annual Meeting. On that date, 20,297,926 shares of common stock were
outstanding. Each share of common stock outstanding on the record date is
entitled to one vote on each matter presented at the Annual Meeting. The
presence, in person or by proxy, of stockholders entitled to cast a majority of
all the votes entitled to be cast constitutes a quorum for the transaction of
business at the Annual Meeting.
VOTING OF PROXIES
Shares of common stock represented by all properly executed proxies
received in time for the Annual Meeting will be voted in accordance with the
choices specified in the proxy. Unless contrary instructions are indicated on
the proxy, the shares will be voted FOR the election of the nominees named in
this proxy statement as Directors and FOR the appointment of KPMG Peat Marwick
LLP as the Company's auditors.
The management and the Board of Directors of the Company know of no
matters to be brought before the Annual Meeting other than as set forth herein;
no stockholder proposals were received by the Company on or before November 1,
1995, the deadline for inclusion of such proposals in this proxy statement.
<PAGE>
REVOCABILITY OF PROXY
The giving of the enclosed proxy does not preclude the right to vote in
person should the stockholder giving the proxy so desire. A proxy may be revoked
at any time prior to its exercise by delivering a written statement to the
Secretary of the Company that the proxy is revoked, by presenting to the Company
a later-dated proxy executed by the person executing the prior proxy, or by
attending the Annual Meeting and voting in person.
ANNUAL REPORT
The 1995 Annual Report including financial statements for the year ended
December 31, 1995, which is being mailed to stockholders together with this
Proxy Statement, contains financial and other information about the activities
of 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
Five Directors of the Company are to be elected at the 1996 Annual Meeting
to serve until the next annual meeting and until their successors are elected
and duly qualified. Mr. J. Sidney Davenport, Mr. Richard C. Leone, Mr. Thomas H.
Potts, Mr. Paul S. Reid and Mr. Donald B. Vaden have been nominated by the Board
of Directors for election to the Board at the Annual Meeting. Unless
authorization is withheld, the persons named as proxies will vote FOR the
election of the nominees of the Board of Directors named above. Each nominee has
agreed to serve if elected. In the event any nominee shall unexpectedly be
unable to serve, the proxies will be voted for such other person as the Board of
Directors may designate. Selected biographical information regarding each
nominee is set forth below:
J. SIDNEY DAVENPORT, 54, has been a Director of the Company since its
organization in December 1987. Mr. Davenport served as Executive Vice President
of the Company from December 1987 until June 1992. He has been a Vice President
of The Ryland Group, Inc., a publicly-owned corporation engaged in residential
housing construction and mortgage-related financial services, since March 1981.
In April 1992, Mr. Davenport was elected Executive Vice President of Ryland
Mortgage Company having served in various senior positions since March 1981. Mr.
Davenport served as a Director of Mentor Income Fund, Inc., a publicly traded
closed-end mutual fund, from June 1992 to August 1993.
RICHARD C. LEONE, 55, has been a Director of the Company since January
1988. He currently is the President of The Twentieth Century Fund, a tax-exempt
research foundation engaged in economic, political and social policy studies.
Mr. Leone is also a Director of eight Dreyfus mutual funds.
THOMAS H. POTTS, 46, has been President and a Director of the Company since
its organization in December 1987. Prior to that, Mr. Potts served in various
positions on behalf of The Ryland Group, Inc. Mr. Potts served as Treasurer of
The Ryland Group, Inc. from May 1987 until April 1992, Executive Vice President
of Ryland Acceptance Corporation ("Ryland Acceptance") from November 1987 until
April 1992, and Executive Vice President, and previously Senior Vice President
of Ryland Mortgage Company from April 1991 until April 1992. Mr. Potts also
served as President and Director of Mentor Income Fund, Inc. from its inception
in December 1988 until June 1992.
PAUL S. REID, 47, has been a Director of the Company since January 1988. He
is the President and Chief Executive Officer of American Home Funding, Inc., a
wholly owned mortgage-banking subsidiary of Rochester Community Savings Bank, an
FDIC insured institution. Mr. Reid currently serves as President of the Mortgage
Bankers Association of America.
DONALD B. VADEN, 61, has been a Director of the Company since January 1988.
He is the retired Past Chairman of Residential Home Funding Corporation where he
served from December 1992 until February 1995. From May 1991 until December
1992, Mr. Vaden served as the Executive Vice President of Mortgage Credit
Corporation, a mortgage banking company. Mr. Vaden served in various senior
positions, including President, for Johnson Mortgage Company prior to its
purchase by Newport News Savings Bank in October 1990.
<PAGE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee, which consists of Mr.
Davenport, Mr. Reid and Mr. Vaden as of January 1, 1996. The Audit Committee
reviews and approves the scope of the annual audit undertaken by the Company's
independent certified public accountants and meets with them on a regular basis
to review the progress and results of their work as well as any recommendations
they may make. The Audit Committee met three times in 1995. The Board of
Directors also has a Compensation Committee consisting of Mr. Davenport, Mr.
Leone, Mr. Reid and Mr. Vaden. The Compensation Committee met one time in 1995.
The Company has no other standing committees of the Board of Directors.
The Board of Directors held four regular and three special meetings in
1995. During this period, each of the Directors attended at least 75% of these
meetings of the Board of Directors and the committees on which he served.
The Directors who are not employed by the Company (the "Outside Directors")
receive an annual fee of $25,000 per year, plus $500 for each meeting of the
Board of Directors, or a committee thereof, they attend. In addition, Outside
Directors are reimbursed for expenses related to their attendance at Board of
Directors and committee meetings.
In 1995, the Company adopted the 1995 Directors Stock Incentive Plan
pursuant to which Directors of the Company as of May 1, 1995 who are not
employees of the Company or its affiliates each received an initial grant of
7,000 Stock Appreciation Rights ("SARs"). Under the Plan, new Directors would
receive an initial grant of 5,000 SARs. Subsequent to the initial grants,
eligible Directors will be granted 1,000 SARs annually. The exercise price of
the SARs is equal to the market value of the Company's Common Stock on the date
of grant; the SARs may be settled only in cash.
OWNERSHIP OF COMMON STOCK
The table below sets forth, as of January 15, 1996, the number of shares of
common stock beneficially owned by each Director of the Company and the
President and each of the other three executive officers named in the Summary
Compensation Table under "Management of the Company" and the number of shares
beneficially owned by all of the Company's Directors and officers as a group. To
the Company's knowledge, no person beneficially owns more than 5% of the
outstanding shares of common stock. Unless otherwise indicated, all persons
named as beneficial owners of common stock have sole voting power and sole
investment power with respect to the shares beneficially owned.
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK
----------------- -------------------- ------------
<S> <C> <C>
J. Sidney Davenport 43,289 *
Richard C. Leone 1,600 (1) *
Thomas H. Potts 688,084 (2) 3.4%
Paul S. Reid 1,481 *
Donald B. Vaden 12,118 (3) *
W. Lance Anderson 3,163 *
Lynn K. Geurin 10,461 *
Scott F. Hartman 7,000 *
All Directors and executive officers as a group 767,196 3.8%
</TABLE>
- ---------------
*Less than 1% of the outstanding shares of common stock.
(1) Includes 300 shares of common stock owned of record by such person's
children.
(2) Includes 10,436 shares of common stock owned of record by such person's
minor children and spouse.
(3) Includes 1,165 shares of common stock of record by such person's spouse.
<PAGE>
MANAGEMENT OF THE COMPANY
The executive officers of the Company and their positions are as follows:
Name Age Position(s) Held
Thomas H. Potts 46 Director and President
W. Lance Anderson 36 Executive Vice President
Lynn K. Geurin 39 Executive Vice President,
Chief Financial Officer, Secretary
Scott F. Hartman 36 Executive Vice President
William Robertson 51 Executive Vice President
The executive officers serve at the discretion of the Company's Board of
Directors. Biographical information regarding Mr. Potts is provided above.
Information regarding the other executive officers of the Company is set forth
below:
W. LANCE ANDERSON has served as Executive Vice President, Single-Family
Operations, of the Company since March 1994. From October 1989 until March 1994,
he served as Vice President of the Company. From January 1989 until June 1992,
Mr. Anderson served as Vice President of Ryland Acceptance.
LYNN K. GEURIN has served as Executive Vice President and Chief Financial
Officer of the Company since April 1992 and Secretary since February 1995. From
December 1987 until April 1992, Ms. Geurin served as Secretary and Treasurer of
the Company. From September 1987 until June 1992, she served as Controller of
Ryland Acceptance and its subsidiaries. Ms. Geurin served as Secretary and
Treasurer of Mentor Income Fund, Inc., from December 1988 until June 1992.
SCOTT F. HARTMAN has served as Executive Vice President, Portfolio
Management, since February 1995. From April 1992 until February 1995, Mr.
Hartman served as a consultant to the Company and assisted in the development of
the Company's portfolio management system. From June 1988 until September 1991,
he served as Vice President of Risk Management for Homeplex Mortgage Investments
Corporation.
WILLIAM ROBERTSON has served as Executive Vice President, Manufactured
Housing Operations, since November 1995. From 1993 until joining the Company in
1995, Mr. Robertson served as Senior Vice President for Household Financial
Services. From 1992 until 1993, Mr. Robertson served as Vice President of ITT
Consumer Financial Corporation. From 1989 until 1992, he served as Vice
President of Residential Mortgage Operations for Chemical Bank.
In July 1995, the Securities and Exchange Commission approved the
settlement of its investigation with respect to a 1992 purchase of the Company's
common stock by the Company's President, Thomas H. Potts. In connection with
such settlement, the SEC filed a complaint in the United States District Court
for the District of Maryland, and Mr. Potts agreed to (i) entry of an injunction
permanently enjoining him from violating Section 10(b) of the Act, (ii) pay a
civil penalty, and (iii) disgorge the implied profit on the purchase plus
interest. The Company concurs with Mr. Potts' decision to settle this matter and
has full confidence in Mr. Potts. Mr. Potts has been a consistent purchaser of
the Company's stock throughout his tenure with the Company, has never sold
shares of the Company's stock and made the April 1992 purchases as a long-term
investor. The Company does not expect this settlement to have any impact on the
Company or the fulfillment of Mr. Potts' responsibilities as President.
EXECUTIVE COMPENSATION
The Summary Compensation Table on the following page includes individual
compensation information on the President and the three other most highly
compensated executive officers ("Named Officers") during 1995, 1994 and 1993.
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION (1) AWARDS ALL OTHER
NAME AND ------------------------------- ---------------- COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) SARS (#) (2) ($) (3)
- ----------------------------- ---------- -------------- ------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Thomas H. Potts 1995 $ 270,003 $ 182,700 50,000 $ 33,894
President and Director 1994 244,170 82,215 17,080 28,526
1993 231,250 109,200 13,235 34,731
W. Lance Anderson 1995 126,667 81,218 14,510 14,847
Executive Vice 1994 113,456 54,396 5,125 18,548
President
1993 92,083 69,465 2,910 12,279
Lynn K. Geurin 1995 126,667 85,118 14,510 20,521
Executive Vice President 1994 114,167 72,000 5,125 11,718
1993 104,167 75,653 4,250 18,264
Scott F. Hartman (4) 1995 108,144 65,067 4,110 -
Executive Vice President
</TABLE>
(1) Does not include perquisites and other personal benefits, securities or
property where the aggregate amount of such compensation to an executive officer
is the lesser of either $50,000 or 10% of annual salary and bonus.
(2) Stock Appreciation Rights ("SARs")
(3) Amounts for 1995 consist of matching and profit sharing contributions to the
Company's Executive Deferred Compensation Plan.
(4) Mr. Hartman's compensation reflects salary from his date of hire, which was
February 20, 1995.
SAR GRANTS IN LAST FISCAL YEAR
The following table provides information related to SARs granted to the
Named Officers during fiscal 1995.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Appreciation for SAR
Individual Grants Term (1)
----------------------------------------------------------------- --------------------------
Percentage of
Total SARs
Number of Granted to Exercise
SARs Employees in Price Expiration
Name Granted (2) Fiscal 1995 ($ per share) Date 5% ($) 10% ($)
- -------------------- ------------- ---------------- -------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Potts 50,000 40.8% $16.125 2/2002 $ 333,948 $ 775,229
W. Lance Anderson 14,510 11.8% 16.125 2/2002 96,912 224,972
Lynn K. Geurin 14,510 11.8% 16.125 2/2002 96,912 224,972
Scott F. Hartman 4,110 3.4% 16.125 2/2002 27,451 63,724
</TABLE>
(1) Excludes any value relative to the Dividend Equivalent Rights ("DERs")
associated with the SARs, except for DERs accrued as of December 31, 1995.
However, the SARs will continue to accrue DERs over the period until exercise or
expiration. As of December 31, 1995, there were 46.70 DERs per 1,000 SARs.
(2) The Stock Appreciation Rights which were granted under the Company's Stock
Incentive Plan, become exercisable in annual 20% increments from the date of
grant.
<PAGE>
AGGREGATED SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END SAR VALUE TABLE
The table below presents the total number of SARs held by the Named
Officers at December 31, 1995, distinguishing between SARs that are exercisable
as of December 31, 1995, and those that had not become exercisable on that date,
and including the aggregate amount by which the market value of the SARs
(including related DERs) exceeds the exercise price.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-money
SARs Exercised in 1995 SARs at 12-31-95 SARs at 12-31-95 (1)
-------------------------- ------------------------------- --------------------------------
Number Value
of SARs Realized Exercisable Unexercisable Exercisable Unexercisable
----------- ------------ ------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Potts - - 41,710 93,605 $ 86,503 $ 260,467
W. Lance Anderson - - 11,589 29,756 125,753 184,605
Lynn K. Geurin - - 22,725 31,160 263,366 174,110
Scott F. Hartman - - - 4,110 - 16,670
</TABLE>
(1) Based on the closing price ($20) on the New York Stock Exchange of the
Company's common stock on that date.
EMPLOYMENT AGREEMENT
Mr. Potts entered into an Employment Agreement with the Company,
effective as of September 30, 1994 (the "Employment Agreement"). The Employment
Agreement has a term of seven years.
Pursuant to his Employment Agreement, Mr. Potts agreed to devote his
full business time and efforts to the business of the Company. Mr. Potts
currently receives a base salary of $280,000 per annum; such base salary is
subject to normal periodic review at least annually by the Compensation
Committee based on the salary policies of the Company and Mr. Potts'
contributions to the Company. Mr. Potts is also entitled to receive incentive
compensation as approved by the Compensation Committee.
The Employment Agreement will terminate in the event of Mr. Potts'
death or total disability, may be terminated by the Company with "cause" (as
defined therein) or for any reason other than cause, and may be terminated by
the resignation of Mr. Potts. If the Employment Agreement is terminated by the
Company for any reason other than cause, total disability or death, then the
Company shall pay to Mr. Potts his salary and benefits through the expiration
date. The Employment Agreement contains certain covenants, among other things,
by Mr. Potts requiring him to maintain the confidentiality of information
relating to the Company and restricting his ability to compete with the Company.
The Company has no other employment agreements with its executive
officers.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company's Board of Directors, which
is comprised exclusively of outside directors, administers the Company's
executive compensation program. All issues pertaining to executive compensation
are reviewed and approved by the Compensation Committee.
The Compensation Committee believes that executive compensation should
reward long-term value created for shareholders and reflect the business
strategies and long-range plans of the Company. The guiding principles in
regards to compensation are (i) to attract and retain key high caliber
executives; (ii) to provide levels of compensation competitive with those
offered by the Company's competitors; (iii) to motivate executives to enhance
long-term stockholder value by linking stock performance (on a total return
basis) with long-term incentive compensation; and (iv) to design a long-term
compensation program that leads to management retention.
Executive officer compensation is based on three principal components:
base salary, annual bonus, and SARs granted under the Company's Stock Incentive
Plan. The base salaries of executive officers, including Mr. Potts, are
determined annually by the Compensation Committee. Base salary is intended to be
set at a level competitive with the amounts paid to the management of companies
with similar business structure, size and marketplace orientation, with
additional emphasis on professional experience.
During 1995, the Compensation Committee reviewed the executive
compensation of six public mortgage-related companies. Based on this
information, the Compensation Committee concluded that the base salary and
annual bonus compensation for the executive officers of the Company were at a
reasonable level, although at the low end relative to the executive compensation
levels of the other companies reviewed. This information was one of the factors
considered in establishing the 1995 compensation levels for executive officers.
In accordance with the Company's philosophy that the compensation
package of the executive officers be directly and materially linked to operating
performance and the total return of the Company's stock, the bonus component of
annual compensation is directly tied to the achievement of pre-established
target earnings goals established by the Compensation Committee. In addition,
the payment of a portion of the annual bonus for each executive officer, except
Mr. Potts, depends upon the attainment of planned objectives established at the
beginning of the year specifically for that executive. Whether or not an
executive officer earns a bonus in any year is determined based upon the
achievement of these earnings goals and specific objectives. Partial bonuses may
be awarded for partial completion of planned objectives and the achievement of
earnings above a minimum level but lower than the target. For executive
officers, the percentage of base salary payable as bonus ranges from 50% to 75%.
Mr. Potts' maximum potential bonus, which is based solely on earnings per share
targets pre-established by the Compensation Committee, is 75% of base salary, as
his compensation is heavily weighted toward attainment of long-term value
through the Stock Incentive Plan awards. Each year the President establishes
bonus programs for all executive officers (other than himself) in the first
quarter. The Compensation Committee reviews and approves the plans at their
annual Compensation Committee meeting. In 1995, partial bonuses were paid in
respect of achievement of earnings goals above the minimum level but below the
target and for full or partial attainment of planned objectives.
The Company also uses SARs and related DERs to align the long-range
interest of its executive officers with the interests of shareholders. The
amount of SARs that are granted to executive officers is determined by the
Compensation Committee taking into consideration the officer's position with the
Company, overall individual performance, and an estimate of the long-term value
of the SARs in light of the officer's current base salary. The Committee applies
its collective judgment to determine the grants appropriate under the Stock
Incentive Plan, with emphasis placed on the anticipated long-term value of the
award considering current base salary. As noted above, a larger percentage of
Mr. Potts' overall compensation package is comprised of grants of SARs and
related DERs reflecting the Compensation Committee's view that compensation for
the President should depend heavily on the long-term total return performance of
the stock.
The Company has not adopted a policy with respect to qualifying
compensation paid to its executive officers for deductibility under Section
162(m) of the Internal Revenue Code since no executive officer currently
receives, or has previously received taxable compensation in excess of $1
million per year.
Donald B. Vaden, Chairman
J. Sidney Davenport
Richard C. Leone
Paul S. Reid
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 1995 were J. Sidney
Davenport, Richard C. Leone, Paul S. Reid, and Donald B. Vaden. Mr. Reid serves
as an executive officer of American Home Funding, Inc. ("AHF"). During 1995, the
Company acquired mortgage loans from AHF for an aggregate purchase price of
approximately $1.0 million. The mortgage loans were purchased through the
Company's mortgage operations at prices available at the time of purchase to all
correspondent customers. The Company may continue to purchase mortgage loans
from AHF.
Mr. Davenport serves as an officer of The Ryland Group, Inc. ("Ryland").
The mortgage loans owned by the Company are serviced by various servicers who
oversee payment for the mortgage loans and act to protect the rights of the
Company as the purchaser of the mortgage loans. From January 1 until May 1,
1995, the Company contracted with Ryland to perform various servicing and master
servicing functions for certain of such mortgage loans that are owned by the
Company. For this period of 1995, the Company paid Ryland approximately $55,000
for its services as master servicer and servicer. As of May 1, 1995, Ryland sold
its institutional financial services division to Norwest Bank Minnesota, N.A.,
and, therefore, Ryland no longer services or master-services mortgage loans for
the Company.
The Company also purchased mortgage loans from Ryland for an aggregate
purchase price of approximately $131.2 million in 1995. The mortgage loans were
purchased at prices available at the time of purchase to all correspondent
customers. The Company may continue to purchase mortgage loans from Ryland.
TOTAL RETURN COMPARISON
The following graph demonstrates a five year comparison of cumulative total
returns for Resource Mortgage Capital, Inc. ("RMR"), the Standard & Poor's 500
("S&P 500"), and the Value Line, Inc. Financial Services Industry Index (the
"Peer Group").
COMPARATIVE FIVE-YEAR TOTAL RETURNS *
RMR, S&P 500, PEER GROUP
(PERFORMANCE RESULTS THROUGH 12/31/95)
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
------------- -------------- -------------- ------------- -------------- --------------
1990 1991 1992 1993 1994 1995
----------------- ------------- -------------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
RMR $ 100.00 $ 236.45 $ 525.08 $ 824.64 $ 349.72 $ 719.74
----------------- ------------- -------------- -------------- ------------- -------------- --------------
S&P 500 $ 100.00 $ 130.55 $ 140.72 $ 154.91 $ 157.39 $ 216.42
----------------- ------------- -------------- -------------- ------------- -------------- --------------
Peer Group $ 100.00 $ 162.14 $ 184.26 $ 211.43 $ 205.53 $ 337.28
----------------- ------------- -------------- -------------- ------------- -------------- --------------
</TABLE>
Assumes $100 invested at the close of trading on the last trading day preceding
the first day of the fifth preceding fiscal year in RMR common stock, S&P 500,
and Peer Group.
* Cumulative total return assumes reinvestment of dividends. The source of this
information is Value Line, Inc. The factual material is obtained from sources
believed to be reliable, but Value Line, Inc. is not responsible for any errors
or omissions contained herein.
<PAGE>
APPOINTMENT OF AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP ("Peat
Marwick"), independent certified public accountants, to examine the financial
statements of the Company for the year ending December 31, 1996. Stockholders
will be asked to approve this appointment at the Annual Meeting. Peat Marwick
has been the Company's independent accountants since the Company was formed in
December 1987. A representative of Peat Marwick is expected to be present at the
Annual Meeting and will be provided with an opportunity to make a statement and
to respond to appropriate questions from stockholders.
VOTES REQUIRED TO ADOPT RESOLUTIONS
The election of Directors requires a plurality of votes cast at the
meeting. The ratification of the appointment of Peat Marwick as the independent
certified public accountants requires the affirmative vote of a majority of the
votes cast at the meeting.
The following principles of Virginia law apply to the voting of shares of
common stock at the meeting. The presence in person or by proxy of stockholders
entitled to vote a majority of the outstanding shares of common stock will
constitute a quorum. Shares represented by proxy or in person at the meeting,
including shares represented by proxies that reflect abstentions, will be
counted as present in the determination of a quorum. An abstention as to any
particular matter, however, does not constitute a vote "for" or "against" such
matter. "Broker non-votes" (i.e., where a broker or nominee submits a proxy
specifically indicating the lack of discretionary authority to vote on a matter)
will be treated in the same manner as abstentions.
OTHER MATTERS
The management and the Board of Directors of the Company know of no other
matters to come before the Annual Meeting other than those stated in the notice
of the meeting. However, if any other matters are properly presented to the
stockholders for action, it is the intention of the proxy holders named in the
enclosed proxy to vote in their discretion on all matters on which the shares
represented by such proxy are entitled to vote.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder may desire to present to the 1997 Annual
Meeting of Stockholders must be received in writing by the Secretary of the
Company prior to November 1, 1996.
By the order of the Board of Directors
/s/ THOMAS H. POTTS
Thomas H. Potts
President
March 5, 1996
<PAGE>
PROXY RESOURCE MORTGAGE CAPITAL, INC.
4880 COX ROAD
GLEN ALLEN, VIRGINIA 23060
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints each of Thomas H. Potts and Lynn K.
Geurin as proxies, each with the power to appoint his substitute, and hereby
authorizes each of them to represent and to vote, as designated below, all the
shares of common stock of Resource Mortgage Capital, Inc. held of record by the
undersigned on March 1, 1996, at the Annual Meeting of Shareholders to be held
on April 23, 1996, or any adjournment thereof.
The Board of Directors recommends a vote FOR Proposals 1 and 2.
1. ELECTION OF DIRECTORS
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY
(except as marked to To vote for all nominees listed
the contrary below)
J. Sidney Davenport, Richard C. Leone, Thomas H. Potts, Paul S. Reid,
Donald B. Vaden (INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. PROPOSAL TO APPROVE THE APPOINTMENT OF KPMG PEAT MARWICK LLP as the
independent public accountants of the Corporation.
|_| FOR |_| AGAINST |_|ABSTAIN
Please sign reverse side and return promptly.
<PAGE>
In their discretion, the proxies are authorized to vote upon other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR EACH OF THE NOMINEES LISTED UNDER PROPOSAL 1 AND FOR
PROPOSAL 2.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, guardian or agent, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Date: _________________________________, 1996
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Signature
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Signature, if held jointly
Please mark, sign, date and return the proxy
card using the enclosed envelope.
