<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 sec. 240.14a-11(c) or sec. 240.14a-12
American Realty Trust, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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> 2
AMERICAN REALTY TRUST, INC.
10670 NORTH CENTRAL EXPRESSWAY, SUITE 300
DALLAS, TEXAS 75231
TELEPHONE: (214) 692-4700
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
To the Stockholders of American Realty Trust, Inc.:
PLEASE TAKE NOTICE that the Annual Meeting of Stockholders of American
Realty Trust, Inc. (the "Company") will be held at 2:00 p.m., Dallas time, on
Monday, April 7, 1997, at 10670 N. Central Expressway, Suite 600, Dallas, Texas
75231, to consider and vote upon the following matters:
(1) the election of two Class II Directors of the Company for a
three-year term expiring in 1999; and
(2) the transaction of such other business as may properly come before
the Annual Meeting or any adjournments thereof.
Only Stockholders of record at the close of business on Friday, February
21, 1997, will be entitled to vote at the Annual Meeting. Stockholders are
cordially invited to attend the Annual Meeting in person.
Regardless of whether you plan to be present at the Annual Meeting, please
promptly date, mark, sign and mail the enclosed proxy to American Stock Transfer
and Trust Company in the envelope provided. Any Stockholder who executes and
delivers the proxy may revoke the authority granted thereunder at any time prior
to its use by giving written notice of such revocation to American Stock
Transfer and Trust Company, 40 Wall Street, 46th Floor, New York, New York
10005, or by executing and delivering a proxy bearing a later date. A
STOCKHOLDER MAY ALSO REVOKE A PROXY BY ATTENDING AND VOTING AT THE ANNUAL
MEETING. Your vote is important, regardless of the number of shares of the
Company's common stock ("Shares") you own.
Dated: February 24, 1997
BY ORDER OF THE BOARD OF DIRECTORS
OF AMERICAN REALTY TRUST, INC.
/s/ ROBERT A. WALDMAN
Robert A. Waldman
Secretary
<PAGE> 3
IMPORTANT
YOU CAN HELP THE COMPANY AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO ATTEND THE ANNUAL MEETING, PLEASE MARK, DATE, SIGN AND
RETURN THE ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE
ANNUAL MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
FAILURE TO VOTE MAY SUBJECT THE COMPANY TO FURTHER EXPENSE
If your Shares are held in the name of a brokerage firm, nominee or other
institution, only it can vote your Shares. Please contact promptly the person
responsible for your account and give instructions for your Shares to be voted.
<PAGE> 4
AMERICAN REALTY TRUST, INC.
10670 NORTH CENTRAL EXPRESSWAY, SUITE 300
DALLAS, TEXAS 75231
TELEPHONE: (214) 692-4700
---------------------
PROXY STATEMENT
---------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 7, 1997
---------------------
GENERAL STOCKHOLDER INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of American Realty Trust, Inc. (the "Company") of proxies
to be used at the Annual Meeting of Stockholders (the "Annual Meeting") for a
vote upon (1) the election of two Class II Directors for a three-year term
expiring in 1999, and (2) the transaction of such other business as may properly
come before the meeting or any adjournments thereof. The Annual Meeting will be
held at 2:00 p.m., Dallas time, on Monday, April 7, 1997 at 10670 North Central
Expressway, Suite 600, Dallas, Texas 75231. The Company's financial statements
for the year ended December 31, 1995 were audited by BDO Seidman.
Representatives of BDO Seidman are expected to be present at the Annual Meeting
to respond to appropriate questions, and such representatives will have an
opportunity to make a statement if they desire to do so. This Proxy Statement
and the accompanying proxy are first being mailed to Stockholders on or about
February 24, 1997. The Annual Report to Stockholders for the year ended December
31, 1995, has been mailed to all Stockholders under separate cover.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1995 AND OF THE EXHIBITS THERETO, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, MAY BE OBTAINED FREE OF CHARGE BY WRITING TO:
INVESTOR RELATIONS
AMERICAN REALTY TRUST, INC.
10670 NORTH CENTRAL EXPRESSWAY, SUITE 300
DALLAS, TEXAS 75231
STOCKHOLDERS ENTITLED TO VOTE
Only holders of record of issued and outstanding shares of the Company's
common stock (the "Shares") at the close of business on Friday, February 21,
1997, (the "Record Date"), are entitled to vote at the Annual Meeting and at any
adjournments thereof. At the close of business on February 21, 1997 there were
12,914,376 Shares outstanding. Each holder is entitled to one vote for each
Share held on the Record Date.
VOTING OF PROXIES
When the enclosed proxy is properly executed and returned, the Shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions noted thereon. As to the election of the two nominees as Class II
Directors (Proposal One), Stockholders may choose to vote for both of the
nominees, withhold authority for voting for both of the nominees or withhold
authority for voting for any individual nominee. In the absence of other
instructions, the Shares represented by a properly executed and submitted proxy
will be voted in favor of the nominees for election to the Board of Directors.
The Board of Directors does not know of any other business to be brought before
the Annual Meeting. If, however, any other matters properly come before the
Annual Meeting, it is the intention of the persons named in the enclosed proxy
to vote such proxy in accordance with their judgment on such matters.
<PAGE> 5
VOTE REQUIRED FOR APPROVAL
Pursuant to Section 3.2 of the By-laws of the Company, election of any
Director requires the affirmative vote of a plurality of the votes cast at a
meeting of Stockholders at which a quorum is present and voting. Abstentions and
broker non-votes, if any, will not be included in vote totals, and, as such,
will have no effect on any proposal. Section 2.5 provides that a majority of the
outstanding Shares entitled to vote, represented in person or by proxy, shall
constitute a quorum at any such meeting.
As of February 21, 1997 management and affiliates held 8,953,576 Shares
representing approximately 69.3% of the Shares outstanding. Management intends
to vote such Shares for the election of the two nominees for Class II Directors
in accordance with the recommendation of the Board of Directors.
REVOCATION OF PROXIES
A proxy is enclosed herewith. Any Stockholder who executes and delivers the
proxy may revoke the authority granted thereunder at any time prior to its use
by giving written notice of such revocation to American Stock Transfer and Trust
Company, 40 Wall Street, 46th Floor, New York, New York 10005, or by executing
and delivering a proxy bearing a later date. A STOCKHOLDER MAY ALSO REVOKE A
PROXY BY ATTENDING AND VOTING AT THE ANNUAL MEETING.
FUTURE PROPOSALS OF STOCKHOLDERS
Any proposal intended to be presented by a Stockholder at the 1997 Annual
Meeting of Stockholders of the Company must be received at the principal office
of the Company not later than May 31, 1997, in order to be considered for
inclusion in the Company's proxy statement and form of proxy for that meeting.
PROPOSAL ONE:
ELECTION OF CLASS II DIRECTORS
The Articles of Incorporation of the Company provide for three classes of
Directors to serve for staggered three-year terms. The term of two of the
Company's five Directors -- the Class II Directors -- expires at the 1996 Annual
Meeting.
NOMINEES
Roy E. Bode and Al Gonzalez have been nominated to serve as Class II
Directors of the Company for a new term expiring in 1999. Messrs. Bode and
Gonzalez are currently Class II Directors of the Company. Messrs. Bode and
Gonzalez have been nominated by the Board of Directors to serve for a three-year
term or until their successors shall have been duly elected and qualified.
Messrs. Bode and Gonzalez have consented to being named in this Proxy Statement
as nominees and have agreed to serve as Class II Directors if elected. When a
proxy is properly executed and returned, the Shares represented thereby will be
voted in favor of the election of the nominees, unless authority to vote for any
such nominee is specifically withheld. If any nominee is unable to serve or will
not serve (an event which is not anticipated), then the person acting pursuant
to the authority granted under the proxy will cast votes for such other person
as he or she may select in place of such nominee.
The nominees for Class II Directors are listed below, together with their
ages, terms of service, principal occupations, business experience and
directorships with other companies during the last five years or more. The
designation "Affiliated", when used below with respect to a Director or nominee,
means that the individual is an officer, director or employee of the Company's
advisor, Basic Capital Management, Inc. ("BCM" or the "Advisor"), or an officer
of the Company. The designation "Independent", when used below with respect to a
Director or nominee, means that the individual is neither an officer of the
Company nor a director, officer or employee of BCM, although the Company may
have certain business or professional relationships with such Director, as
discussed below under "Certain Business Relationships and Related Transactions".
2
<PAGE> 6
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATIONS,
BUSINESS EXPERIENCE AND DIRECTORSHIPS AGE
------------------------------------- ---
<S> <C>
ROY E. BODE: Director (Class II) (Independent) (since 1996). 49
Vice President of Public Affairs (since May 1992) of
University of Texas Southwestern Medical Center; Editor
(June 1988 to December 1991) of Dallas Times Herald; and
Director (since 1991) of the DFW Metroplex Chapter of St.
Jude's Children's Research Hospital.
AL GONZALEZ: Director (Class II) (Independent) (since 1989). 59
President (since March 1991) of AGE Refining, Inc., a
petroleum refining and marketing firm; President (January
1988 to March 1991) of Moody-Day Inc., which sells and
leases construction equipment and supplies; owner and
President of Gulf-Tex Construction Company; owner and lessor
of two restaurant sites in Dallas, Texas; Director (since
April 1990) of Avacelle, Inc. ("Avacelle"); Director (1988
to 1992) of Medical Resource Companies of America; and
member (1987 to 1989) of the Dallas City Council. On March
18, 1992, Avacelle filed a voluntary petition under Chapter
11 of the United States Bankruptcy Code and an Order
confirming its Plan of Reorganization was entered October
18, 1993 by the United States Bankruptcy Court, Northern
Division of Oklahoma.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED
ABOVE.
The Class I and Class III Directors, whose terms do not expire this year,
are listed below, together with their ages, classes, terms of service, all
positions and offices with the Company or BCM, other principal occupations,
business experience and directorships with other companies during the last five
years or more. The designation "Affiliated", when used below with respect to the
Directors, means that the Director is an officer, director or employee of BCM or
an officer of the Company. The designation "Independent", when used below with
respect to a Director, means that the Director is neither an officer of the
Company nor a director, officer or employee of BCM, although the Company may
have certain business or professional relationships with such Director, as
discussed below under "Certain Business Relationships and Related Transactions".
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATIONS,
BUSINESS EXPERIENCE AND DIRECTORSHIPS AGE
------------------------------------- ---
<S> <C>
KARL L. BLAHA: Director (Class III) (Affiliated) (since 49
1996). President (since October 1993) and Executive Vice
President and Director of Commercial Management (April 1992
to October 1993).
Executive Vice President and Director of Commercial
Management (April 1992 to August 1995) of BCM,
Transcontinental Realty Investors, Inc. ("TCI"), Continental
Mortgage and Equity Trust ("CMET"), Income Opportunity
Realty Investors, Inc. ("IORI"), and Syntek Asset
Management, Inc. ("SAMI"), the managing general partner of
Syntek Asset Management, L.P. ("SAMLP"), which is the
general partner of National Realty, L.P. ("NRLP") and
National Operating, L.P. ("NOLP") and a corporation owned by
BCM; Executive Vice President (since October 1992) of Carmel
Realty, Inc. ("Carmel Realty"), a company affiliated with
BCM which provides real estate brokerage services and
commercial property management services; Executive Vice
President and Director of Commercial Management (April 1992
to February 1994) of National Income Realty Trust ("NIRT")
and Vinland Property Trust ("VPT"); Partner -- Director of
National Real Estate Operations of First Winthrop
Corporation (August 1988 to March 1992); Corporate Vice
President of Southmark Corporation ("Southmark") (April 1984
to August 1988); and President of Southmark Commercial
Management (March 1986 to August 1988).
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATIONS,
BUSINESS EXPERIENCE AND DIRECTORSHIPS AGE
------------------------------------- ---
<S> <C>
OSCAR W. CASHWELL: Director (Class I) (Affiliated) (since 69
1992).
President (February 1994 to August 1995) of CMET, IORI and
TCI; Executive Vice President (August 1995 to January 1997)
and President and Director of Property and Asset Management
(January 1994 to August 1995) and Assistant to the
President, Real Estate Operations (July 1989 to December
1993) of BCM; President (February 1994 to August 1995) and
Director (March 1994 to August 1995) of SAMI; and Assistant
to the President, Real Estate Operations (March 1982 to June
1989) of Southmark.
DALE A. CRENWELGE: Director (Class III) (Independent) (since 38
1994).
President (since 1989) of Longhorn Consultants Commercial
Real Estate Group, Inc. and Crenwelge Commercial
Consultants, Inc., real estate marketing and management
firms; and Assistant to the President (1985 to 1989) of
Thompson Properties, a commercial real estate development,
brokerage, management and investment company.
</TABLE>
BOARD MEETINGS AND COMMITTEES
The Company's Board of Directors held five meetings during 1995. For such
year, no incumbent Director attended fewer than 75% of (i) the total number of
meetings held by the Board during the period for which he had been a Director
and (ii) the total number of meetings held by all committees of the Board on
which he served during the periods that he served.
The Board of Directors has an Audit Committee, the function of which is to
review the Company's operating and accounting procedures. The current members of
the Audit Committee are Dale A. Crenwelge, Al Gonzalez and Roy E. Bode. The
Audit Committee met twice during 1995.
The Board of Directors has a Stock Option Committee to administer its 1987
Stock Option Plan. The function of the Stock Option Committee is, among other
things, to determine which persons will be granted options, the number of Shares
to be covered by the options and the exercise period of the options within the
terms of the 1987 Stock Option Plan. The only current member of the Stock Option
Committee is Al Gonzalez. The Stock Option Committee did not meet in 1995.
The Company's Board of Directors does not have nominating or compensation
committees.
EXECUTIVE OFFICERS
The following persons currently serve as executive officers of the Company:
Karl L. Blaha, President; Bruce A. Endendyk, Executive Vice President; Randall
M. Paulson, Executive Vice President; and Thomas A. Holland, Executive Vice
President and Chief Financial Officer. Their positions with the Company are not
subject to a vote of Stockholders. The age, terms of service, all positions and
offices with the Company or BCM, other principal occupations, business
experience and directorships with other companies during the last five years or
more of Messrs. Endendyk, Holland and Paulson is set forth below.
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATIONS,
BUSINESS EXPERIENCE AND DIRECTORSHIPS AGE
------------------------------------- ---
<S> <C>
BRUCE A. ENDENDYK: Executive Vice President (since January 48
1995).
President (since January 1995) of Carmel Realty; Executive
Vice President (since January 1995) of BCM, SAMI, CMET, IORI
and TCI; Management Consultant (November 1990 to December
1994); Executive Vice President (January 1989 to November
1990) of Southmark; President and Chief Executive Officer
(March 1988 to January 1989) of Southmark Equities
Corporation; and Vice President / Resident Manager (December
1975 to March 1988) of Coldwell Banker Commercial Real
Estate Services in Houston, Texas.
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATIONS,
BUSINESS EXPERIENCE AND DIRECTORSHIPS AGE
------------------------------------- ---
<S> <C>
THOMAS A. HOLLAND: Executive Vice President and Chief 54
Financial Officer (since August 1995); Senior Vice President
and Chief Accounting Officer (July 1990 to August 1995).
Executive Vice President and Chief Financial Officer (since
August 1995) and Senior Vice President and Chief Accounting
Officer (July 1990 to August 1995) of TCI, CMET, IORI, BCM
and SAMI; Secretary (since February 1997) of TCI, CMET and
IORI; Senior Vice President and Chief Accounting Officer
(July 1990 to February 1994) of NIRT and VPT; Vice President
and Controller of Southmark (December 1986 to June 1990);
Vice President -- Finance of Diamond Shamrock Chemical
Company (January 1986 to December 1986); Assistant
Controller of Maxus Energy Corporation (formerly Diamond
Shamrock Corporation) (May 1976 to January 1986); Trustee of
Arlington Realty Investors (August 1989 to June 1990); and
Certified Public Accountant (since 1970).
RANDALL M. PAULSON: Executive Vice President (since January 50
1995).
President (since August 1995) and Executive Vice President
(January 1995 to August 1995) of SAMI, CMET, IORI and TCI
and (October 1994 to August 1995) of BCM; Director (since
August 1995) of SAMI; Vice President (1993 to 1994) of GSSW,
LP, a joint venture of Great Southern Life and Southwestern
Life; Vice President (1990 to 1993) of Property Company of
America Realty, Inc.; President (1990) of Paulson Realty
Group; President (1983 to 1989) of Johnstown Management
Company; and Vice President (1979 to 1982) of Lexton-Ancira.
</TABLE>
OFFICERS
Although not executive officers of the Company, the following persons
currently serve as officers of the Company: Mark W. Branigan, Senior Vice
President-Residential Asset Management; Lynn W. Humphries, Senior Vice
President-Commercial Asset Management; Robert A. Waldman, Senior Vice President,
General Counsel and Secretary; and Drew D. Potera, Vice President and Treasurer.
Their positions with the Company are not subject to a vote of Stockholders.
Their ages, terms of service, all positions and offices with the Company or BCM,
other principal occupations, business experience and directorships with other
companies during the last five years or more are set forth below.
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATIONS,
BUSINESS EXPERIENCE AND DIRECTORSHIPS AGE
------------------------------------- ---
<S> <C>
MARK W. BRANIGAN: Senior Vice President-Residential Asset 42
Management (since December 1996) and Vice President
(February 1994 to December 1996).
Senior Vice President -- Residential Asset Management (since
December 1996) and Vice President (January 1994 to December
1996) of SAMI, CMET, IORI and TCI; Executive Vice President
of BCM (since May 1995); Executive Vice President (1984 to
1991) of Byron Investments, Inc.; Manager (May 1981 to 1983)
of Treasury Services of Southmark; and Director (1977 to
April 1981) of Investor Relations for Syntek Corp.
LYNN W. HUMPHRIES: Senior Vice President-Commercial Asset 46
Management (since May 1996).
Senior Vice President -- Commercial Asset Management (since
May 1996) of BCM, CMET, TCI, IORI and SAMI; Vice President
(January 1994 to May 1996) of the Amend Group; Vice
President (1980 to 1993) of Equitable Real Estate Investment
Management, Inc.; and Senior Vice President (1975 to 1980)
of Sanders Campbell & Company.
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATIONS,
BUSINESS EXPERIENCE AND DIRECTORSHIPS AGE
------------------------------------- ---
<S> <C>
ROBERT A. WALDMAN: Senior Vice President and General Counsel 44
(since January 1995), Secretary (since December 1989) and
Vice President (January 1993 to January 1995).
Senior Vice President and General Counsel (since January
1995), Vice President (since December 1990) and Secretary
(December 1993 to February 1997) of CMET, IORI and TCI;
Senior Vice President and General Counsel (since November
1994), Vice President and Corporate Counsel (November 1989
to November 1994) and Secretary (since November 1989) of
BCM; Vice President (December 1990 to February 1994) and
Secretary (December 1993 to February 1994) of NIRT and VPT;
and Director (February 1987 to October 1989), General
Counsel and Secretary (1985 to October 1989) of Red Eagle
Resources Corporation (oil and gas).
DREW D. POTERA: Vice President (since December 1996), 37
Treasurer (since August 1991) and Assistant Treasurer
(December 1990 to August 1991).
Vice President (since December 1996) and Treasurer (since
December 1990) of IORI, CMET and TCI; Vice President,
Treasurer and Securities Manager (since July 1990) of BCM;
Vice President and Treasurer (since February 1992) of SAMI;
Treasurer (December 1990 to February 1994) of NIRT and VPT;
and Financial Consultant with Merrill Lynch, Pierce, Fenner
& Smith, Incorporated (June 1985 to June 1990).
</TABLE>
In addition to the foregoing officers, the Company has several vice
presidents and assistant secretaries who are not listed herein.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934.
Under the securities laws of the United States, the Company's Directors,
executive officers, and any persons holding more than ten percent of the
Company's Shares of Common Stock are required to report their ownership of the
Company's Shares and any changes in that ownership to the Securities and
Exchange Commission (the "Commission") and the New York Stock Exchange. Specific
due dates for these reports have been established and the Company is required to
report any failure to file by these dates during 1995. All of these filing
requirements were satisfied by the Company's Directors and executive officers
and ten percent holders. In making these statements, the Company has relied on
the written representations of its incumbent Directors and executive officers
and its ten percent holders and copies of the reports that they have filed with
the Commission.
THE ADVISOR
Although the Company's Board of Directors is directly responsible for
managing the affairs of the Company and for setting the policies which guide it,
the day-to-day operations of the Company are performed by BCM, a contractual
advisor under the supervision of the Company's Board of Directors. The duties of
the advisor include, among other things, investigating, evaluating and
recommending real estate and mortgage loan investment opportunities as well as
financing and refinancing sources for the Company. The advisor also serves as a
consultant in connection with the Company's business plan and investment policy
decisions made by the Company's Board of Directors.
BCM has served as advisor to the Company since February 1989 pursuant to a
written advisory agreement (the "Advisory Agreement"). BCM is a company owned by
a trust for the benefit of the children of Gene E. Phillips, who served as the
Chairman of the Board and a Director of the Company until November 16, 1992. Mr.
Gene E. Phillips served as a director of BCM until December 22, 1989 and as
Chief Executive Officer of BCM until September 1, 1992. Ryan T. Phillips, the
son of Gene E. Phillips and a Director of the Company until June 1996, is also a
director of BCM and a trustee of the trust which owns BCM. Mr. Cashwell, a
Director of the Company, served as Executive Vice President of BCM until January
1997.
6
<PAGE> 10
Mr. Gene E. Phillips serves as a representative of the trust which owns BCM
and, in such capacity, has substantial contact with the management of BCM and
input with respect to BCM's performance of advisory services to the Company. As
of February 21, 1997, BCM owned 5,114,660 shares of the Company's Common Stock,
39.6% of the Shares then outstanding.
The Advisory Agreement provides for the advisor to receive monthly base
compensation at the rate of 0.125% (1.5% on an annualized basis) of the average
of the aggregate book value of the Company's assets invested in equity interests
in and loans secured by real estate before non-cash reserves (the "Average
Invested Assets").
On October 23, 1991, based on the recommendation of BCM, the Company's
Board of Directors approved a reduction in the advisor's base fee by 50%
effective October 1, 1991. This reduction remains in effect until the Company's
earnings for the four preceding quarters equals or exceeds $2.00 per share.
In addition to base compensation, BCM or an affiliate of BCM receives the
following forms of compensation to be paid to BCM or an affiliate of BCM:
(a) an acquisition fee for locating, leasing or purchasing real estate
for the Company in an amount equal to the lesser of (i) the amount of
compensation customarily charged in similar arm's-length transactions or
(ii) up to 6% of the costs of acquisition, inclusive of commissions, if
any, paid to nonaffiliated brokers;
(b) a disposition fee for the sale of each equity investment in real
estate in an amount equal to the lesser of (i) the amount of compensation
customarily charged in similar arm's-length transactions or (ii) 3% of the
sales price of each property, exclusive of fees, if any, paid to
non-affiliated brokers;
(c) a loan arrangement fee in an amount equal to 1% of the principal
amount of any loan made to the Company arranged by BCM;
(d) an incentive fee equal to 10% of net income for the year in excess
of a 10% return on stockholders' equity, and 10% of the excess of net
capital gains over net capital losses, if any, realized from sales of
assets made under contracts entered into after April 15, 1989; and
(e) a mortgage placement fee, on mortgage loans originated or
purchased, equal to 50%, measured on a cumulative basis, of the total
amount of mortgage origination or placement fees on mortgage loans made by
the Company for the fiscal year.
The Advisory Agreement further provides that BCM shall bear the cost of
certain expenses of its employees, excluding fees paid to the Company's
Directors; rent and other office expenses of both BCM and the Company (unless
the Company maintains office space separate from that of BCM); costs not
directly identifiable to the Company's assets, liabilities, operations, business
or financial affairs; and miscellaneous administrative expenses relating to the
performance by BCM of its duties under the Advisory Agreement.
If and to the extent that the Company shall request BCM, or any director,
officer, partner or employee of BCM, to render services to the Company other
than those required to be rendered by BCM under the Advisory Agreement, such
additional services, if performed, will be compensated separately on terms
agreed upon between such party and the Company from time to time. The Company
has requested that BCM perform loan administration functions, and the Company
and BCM have entered into a separate agreement, as described below.
The Advisory Agreement automatically renews from year to year unless
terminated in accordance with its terms. The Company's management believes that
the terms of the Advisory Agreement are at least as fair as could be obtained
from unaffiliated third parties.
Pursuant to the Advisory Agreement, BCM serves as the loan
administration/servicing agent for the Company, under an agreement dated as of
October 4, 1989, and terminable by either party upon thirty days' notice, under
which BCM services most of the Company's mortgage notes and receives as
compensation a monthly fee of 0.125% of the month-end outstanding principal
balances of the mortgage loans serviced.
7
<PAGE> 11
Situations may develop in which the interests of the Company are in
conflict with those of one or more Directors or officers of the Company in their
individual capacities or of BCM, or of their respective affiliates. In addition
to services performed for the Company, as described above, BCM actively provides
similar services as agent for, and advisor to, other real estate enterprises,
including persons and entities involved in real estate development and
financing, including CMET, TCI and IORI. BCM also performs certain
administrative services for NRLP on behalf of NRLP's general partner, SAMLP. The
Advisory Agreement provides that BCM may also serve as advisor to other
entities. As advisor, BCM is a fiduciary of the Company's public investors. In
determining to which entity a particular investment opportunity will be
allocated, BCM will consider the respective investment objectives of each entity
and the appropriateness of a particular investment in light of each such
entity's existing mortgage note and real estate portfolio and which entity has
had uninvested funds for the longest period of time. To the extent any
particular investment opportunity is appropriate to more than one such entity,
such investment opportunity will be allocated to the entity that has had
uninvested funds for the longest period of time or if appropriate, the
investment may be shared among various entities. See "Certain Business
Relationships and Related Party Transactions -- Certain Business Relationships"
below.
The directors and principal officers of BCM are set forth below:
Mickey N. Phillips: Director
Ryan T. Phillips: Director
Randall M. Paulson: President
Mark W. Branigan: Executive Vice President -- Residential Asset
Management
Bruce A. Endendyk: Executive Vice President
Thomas A. Holland: Executive Vice President and Chief Financial Officer
Cooper B. Stuart: Executive Vice President
Clifford C. Towns, Jr.: Executive Vice President -- Finance
Dan S. Allred: Senior Vice President -- Land Development
Lynn W. Humphries: Senior Vice President -- Commercial Asset Management
Robert A. Waldman: Senior Vice President, General Counsel and Secretary
Drew D. Potera: Vice President, Treasurer and Securities Manager
Mickey N. Phillips is the brother of Gene E. Phillips and Ryan T. Phillips
is the son of Gene E. Phillips. Gene E. Phillips serves as a representative of
the trust established for the benefit of his children which owns BCM and, in
such capacity, has substantial contact with the management of BCM and input with
respect to its performance of advisory services to the Company. As of February
21, 1997, BCM owned 5,114,660 Shares of the Company's Common Stock, 39.6% of the
Company's then outstanding Shares.
PROPERTY MANAGEMENT
Since February 1, 1990, affiliates of BCM have provided property management
services to the Company. Currently, Carmel Realty Services, Ltd. ("Carmel,
Ltd.") provides property management services for a fee of 5% or less of the
monthly gross revenue of the properties under management. Carmel, Ltd.
subcontracts with other entities for the provision of the property-level
management services to the Company at various rates. The general partner of
Carmel, Ltd. is BCM. The limited partners of Carmel, Ltd. are (i) Syntek West,
Inc. ("SWI"), of which Gene E. Phillips is the sole stockholder (ii) Gene E.
Phillips and (iii) a trust for the benefit of the children of Gene E. Phillips.
Carmel, Ltd. subcontracts the property-level management of the Company's
shopping center to Carmel Realty, which is owned by SWI. Carmel Realty is
entitled to receive property and construction management fees and leasing
commissions in accordance with the terms of its property-level management
agreement with Carmel, Ltd.
8
<PAGE> 12
EXECUTIVE COMPENSATION
The Company has no employees, payroll or employee benefit plans and pays no
compensation to executive officers of the Company. The Directors and executive
officers of the Company who are also officers or employees of the Company's
Advisor are compensated by the Advisor. Such affiliated Directors and executive
officers of the Company perform a variety of services for the Advisor and the
amount of their compensation is determined solely by the Advisor. BCM does not
allocate the cash compensation of its officers among the various entities for
which it serves as advisor.
The only direct remuneration paid by the Company is to those Directors who
are not officers or employees of BCM or its affiliated companies. The Company
compensates such Independent Directors at a rate of $5,000 per year, plus $500
per meeting attended and $300 per Audit Committee meeting attended. During 1995,
$25,350 was paid to Independent Directors in total Directors' fees for all
meetings, as follows: Al Gonzalez, $7,300; Dale A. Crenwelge, $7,500; Ryan T.
Phillips, $5,750; and G. Wayne Watts, $4,800.
In July 1987, the Company's Board of Directors, including all of the
Independent Directors, approved the Company's 1987 Stock Option Plan (the
"Plan"). The Plan was approved by the Stockholders at the Company's Annual
Meeting on June 8, 1988. The Plan was intended principally as an incentive for
and as a means of encouraging ownership of the Company's Common Stock, by
eligible persons, including certain Directors and officers of the Company.
Options may be granted either as incentive stock options (which qualify for
certain favorable tax treatment), or as non-qualified stock options. Incentive
stock options cannot be granted to, among others, persons who are not employees
of the Company, or to persons who fail to satisfy certain criteria concerning
ownership of less than 10% of the Company's Shares. The Plan is administered by
the Stock Option Committee, which currently consists of one Independent Director
of the Company. The exercise price per share of an option will not be less than
100% of the fair market value per share on the date of grant thereof. The
Company receives no consideration for the grant of an option. As of February 21,
1997, there were no stock options outstanding under the Plan.
9
<PAGE> 13
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's shares of Common Stock with the Dow Jones Equity Market Index ("DJ
Equity Index") and the Dow Jones Real Estate Investment Index ("DJ Real Estate
Index"). The comparison assumes that $100 was invested on December 31, 1990 in
shares of the Company's Common Stock and in each of the indices and further
assumes the reinvestment of all dividends. Past performance is not necessarily
an indicator of future performance.
COMPARISON OF FIVE YEAR
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
MEASUREMENT PERIOD THE DJ EQUITY DJ REAL ESTATE
(FISCAL YEAR COVERED) COMPANY INDEX INDEX
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1990 100 100 100
- --------------------------------------------------------------------------------------------------
1991 95 132 112
- --------------------------------------------------------------------------------------------------
1992 114 145 101
- --------------------------------------------------------------------------------------------------
1993 220 158 118
- --------------------------------------------------------------------------------------------------
1994 236 159 112
- --------------------------------------------------------------------------------------------------
1995 268 221 139
- --------------------------------------------------------------------------------------------------
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Management. The following table sets forth the
ownership of the Company's Common Stock, both beneficially and of record, both
individually and in the aggregate, for the Directors and executive officers of
the Company, as of the close of business on February 21, 1997.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP CLASS(1)
------------------- ----------------- ----------
<S> <C> <C>
All Directors and Executive Officers as
a group (8 persons)................... 8,855,244(2)(3)(4)(5) 68.6%
</TABLE>
- ---------------
(1) Based on 12,914,376 Shares outstanding on February 21, 1997.
(2) Includes 818,008 Shares owned by CMET over which the executive officers of
the Company may be deemed to be beneficial owners by virtue of their
positions as executive officers of CMET. Also includes 195,732 Shares owned
by NOLP over which the executive officers of the Company may be deemed to be
beneficial owners by virtue of their positions as executive officers of
SAMI, the managing general partner of SAMLP, the general partner of NOLP.
The executive officers of the Company disclaim beneficial ownership of such
Shares.
10
<PAGE> 14
(3) Includes 5,114,660 Shares owned by BCM over which the executive officers of
the Company may be deemed to be beneficial owners by virtue of their
positions as executive officers of BCM. The executive officers of the
Company disclaim beneficial ownership of such Shares.
(4) Includes 2,432 Shares owned directly over which Thomas A. Holland and his
wife jointly hold voting and dispositive power, and an additional 332 Shares
held by Mr. Holland in an individual retirement account.
(5) Includes 960,000 Shares owned by Rosedale Equities, Inc., a wholly-owned
subsidiary of the Company. Also includes 500,000 shares owned by ND
Investments, Inc., a wholly-owned subsidiary of the Company, and 1,264,000
shares owned by Garden Capital Merchandise Mart, Inc., a wholly-owned
subsidiary of the Company. Such Shares are pledged as additional collateral
for loans to the Company.
Security Ownership of Certain Beneficial Owners. The following table sets
forth the ownership of the Company's Common Stock both beneficially and of
record, both individually and in the aggregate, for those persons or entities
known by the Company to be the owner of more than 5% of the shares of the
Company's Common Stock as of the close of business on February 21, 1997.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP CLASS(1)
------------------- ----------------- ----------
<S> <C> <C>
Basic Capital Management, Inc. ......... 5,114,660 39.6%
10670 N. Central Expressway
Suite 300
Dallas, Texas 75231
Davister Corp./Nanook Partners, L.P. ... 1,669,436 12.9%
10670 N. Central Expressway
Suite 501
Dallas, Texas 75231
Rosedale Equities, Inc. ................ 960,000 7.4%
10670 N. Central Expressway
Suite 300
Dallas, Texas 75231
Continental Mortgage and Equity Trust... 818,088 6.1%
10670 N. Central Expressway
Suite 300
Dallas, Texas 75231
Ryan T. Phillips........................ 5,212,992(2)(3) 40.7%
10670 N. Central Expressway
Suite 300
Dallas, Texas 75231
Garden Capital Merchandise Mart, Inc.... 1,264,000 9.8%
10670 N. Central Expressway
Suite 300
Dallas, Texas 75231
</TABLE>
- ---------------
(1) Based on 12,914,376 Shares of Common Stock outstanding on February 21, 1997.
(2) Includes 5,114,660 Shares owned by BCM over which Ryan T. Phillips may be
deemed to be the beneficial owner by virtue of his position as a director of
BCM. Mr. Phillips disclaims beneficial ownership of such Shares.
(3) Includes 98,332 Shares owned by the Gene E. Phillips Children's Trust. Ryan
T. Phillips is a beneficiary of such trust.
11
<PAGE> 15
CERTAIN BUSINESS RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies with Respect to Certain Activities. The By-laws of the Company, as
amended, provide, in accordance with Georgia law, that no contract or
transaction between the Company and one or more of its Directors or officers, or
between the Company and any other corporation, partnership, association or other
organization in which one or more of its Directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
that reason, or solely because the Director or officer is present at or
participates in the meeting of the Company's Board of Directors or committee
thereof which authorizes the contract or transaction, or solely because his or
her votes are counted for such purpose, if one or more of the following three
conditions are met: (i) the material facts as to his or her interest and as to
the contract or transaction are disclosed or are known to the Company's Board of
Directors or the committee, and the Board or committee in good faith authorizes
the contract or transaction by the affirmative vote of a majority of the
disinterested Directors, even though the disinterested Directors constitute less
than a quorum; (ii) the material facts as to his or her interest and as to the
contract or transaction are disclosed or are known to the Stockholders entitled
to vote thereon, and the contract or transaction is specifically approved or
ratified in good faith by vote of such Stockholders; or (iii) the contract or
transaction is fair to the Company as of the time it is authorized, approved or
ratified by the Company's Board of Directors, a committee thereof, or the
Stockholders.
The Company's policy is to have such contracts or transactions approved or
ratified by a majority of the disinterested Directors of the Company with full
knowledge of the character of such transactions, as being fair and reasonable to
the Stockholders at the time of such approval or ratification under the
circumstances then prevailing. Such Directors also consider the fairness of such
transactions to the Company. Management believes that, to date, such
transactions have represented the best investment alternatives available at the
time and were at least as advantageous to the Company as other investments that
could have been obtained.
The Company expects to enter into future transactions with entities the
officers, trustees, directors or stockholders of which are also officers,
Directors or Stockholders of the Company if such transactions would be
beneficial to the operations of the Company and consistent with the Company's
then-current investment objectives and policies, subject to approval by a
majority of disinterested Directors as discussed above.
The Company does not prohibit its officers, Directors, Stockholders or
related parties from engaging in business activities of the types conducted by
the Company.
CERTAIN BUSINESS RELATIONSHIPS
As mentioned above, BCM is a corporation of which Messrs. Paulson, Endendyk
and Holland serve as executive officers. BCM is beneficially owned by a trust
for the benefit of the children of Gene E. Phillips, the trustees of which are
Mickey N. Phillips and Ryan T. Phillips. Mickey N. Phillips and Ryan T.
Phillips, brother and son, respectively, of Gene E. Phillips, are also directors
of BCM.
CMET, IORI and TCI have the same relationship with BCM as does the Company.
In addition, BCM has been engaged to perform certain administrative functions
for NRLP and NOLP. Gene E. Phillips is a general partner of SAMLP, NRLP's and
NOLP's general partner, and was until May 1996 an officer and director of
SAMLP's managing general partner, SAMI. BCM is the sole stockholder of SAMI. The
Company is a limited partner and a 96% owner of SAMLP.
In February 1995, Davister Corp., a general partner of Nanook Partners,
L.P., which owns in excess of 14% of the outstanding shares of the Company's
Common Stock, funded two loans each in the amount of $100,000 to Al Gonzalez, a
Director of the Company. Both notes were unsecured, accrued interest at a rate
of 12% per annum and matured 120 days from the date of their respective
originations. Both notes were paid in full December 4, 1995.
In October 1995, Nevada Sea Investments, Inc., an affiliate of BCM,
advanced $100,000 to Mr. Gonzalez and agreed to fund Mr. Gonzalez' obligation
under a $400,000 promissory note relating to his purchase of the common stock of
AGE Refining, Inc. ("AGE"). In consideration of this funding, Nevada Sea
12
<PAGE> 16
Investments, Inc. received ownership of 49% of the common stock of AGE and Mr.
Gonzalez retained 51% of the common stock of AGE. Mr. Gonzalez is President of
AGE.
In March 1994, an entity affiliated with Ryan Phillips, a Director of the
Company until June 1996, advanced BCM $893,000 on an unsecured demand note. The
note bears interest at 10% per annum with interest only payable monthly. During
1995, BCM made several principal reduction payments. The principal balance of
the loan was $361,000 at December 31, 1995.
In February 1996, BCM advanced an entity affiliated with Ryan Phillips
$986,000 on an unsecured demand note. The note bears interest at 10% per annum
with interest only payable monthly.
In April 1996, the Company guaranteed the payment of three notes which were
payable by MHK Investment Corp. ("MHK"). MHK is owned by Bradford A. Phillips
who is the son of Gene E. Phillips and a beneficiary of the trust which owns
BCM. As of February 18, 1997, two of the notes, in the amounts of $25,000 and
$45,000, had been paid in full and one note in the amount of $83,500 remained
outstanding.
Since February 1, 1990, the Company has contracted with affiliates of BCM
for property management services. Currently, Carmel, Ltd. provides such property
management services. The general partner of Carmel, Ltd. is BCM. The limited
partners of Carmel, Ltd. are (i) SWI, a company of which Gene E. Phillips is the
sole stockholder, (ii) Mr. Phillips and (iii) a trust for the benefit of the
children of Mr. Phillips. Carmel, Ltd. subcontracts the property-level
management of the Company's shopping center to Carmel Realty, Inc., which is
owned by SWI.
Affiliates of BCM provide brokerage services to the Company and receive
brokerage commissions in accordance with the Advisory Agreement.
The Company owns an equity interest in each of CMET, IORI, TCI, NRLP and
SAMLP. In addition, CMET and NRLP own a beneficial interest in the Company and
SAMLP owns a beneficial interest in TCI.
RELATED PARTY TRANSACTIONS
In January 1992, the Company entered into a partnership agreement with an
entity affiliated with Donald C. Carter, a private investor, to acquire 287
developed residential lots adjacent to the Company's other residential lots in
Fort Worth, Texas. The Company paid $717,000 in cash for its 50% general
partnership interest. The partnership agreement designates the Company as
managing general partner. The partnership agreement also provides that each of
the partners is guaranteed a 10% return on their respective investments. At
December 31, 1995, 155 lots remained to be sold. Through December 31, 1995, Mr.
Carter had received $226,000 in return of capital distributions and $120,000 in
profit distribution from the partnership.
In June 1992, the Company obtained a $3.3 million loan from Mr. Carter. The
note was collateralized by an assignment of the Company's interest in a
partnership which owns residential lots in Fort Worth, Texas and the Company's
interest in undeveloped land in downtown Atlanta, Georgia. The loan also
provided for Mr. Carter's participation in the proceeds from either the sale or
refinancing of the Atlanta land. Mr. Carter also had the right to put his
participation to the Company in exchange for a payment of $623,000. On December
2, 1993, Mr. Carter exercised his put which required full payment by the Company
by January 2, 1996. The put was paid in full in May 1995 and the note was paid
off at its May 11, 1995 maturity.
In 1995, the Company paid BCM and its affiliates $1.2 million in advisory
and mortgage servicing fees, $905,000 in real estate brokerage commissions,
$95,000 in loan arrangement fees and $1.2 million in property and construction
management fees and leasing commissions, net of property management fees paid to
subcontractors, other than Carmel Realty. In addition, as provided in the
Advisory Agreement, BCM received cost reimbursements from the Company of
$516,000 in 1995.
13
<PAGE> 17
SELECTION OF AUDITORS FOR 1996
The Company's auditors for the 1995 fiscal year were BDO Seidman. A
representative of BDO Seidman will attend the annual meeting. The Board of
Directors has selected BDO Seidman as the auditors for the Company for the 1996
fiscal year.
OTHER MATTERS
Management knows of no other matters that may properly be, or that are
likely to be, brought before the meeting. However, if any other matters are
properly brought before the meeting, the persons named in the enclosed proxy or
their substitutes will vote in accordance with their best judgment on such
matters.
FINANCIAL STATEMENTS
The audited consolidated balance sheets of the Company, in comparative form
as of December 31, 1995 and 1994, and the audited consolidated statements of
operations and consolidated statements of cash flows for the years ended
December 31, 1995, 1994 and 1993 are contained in the 1995 Annual Report to
Stockholders. However, such report and the financial statements contained
therein are not to be considered part of this solicitation.
SOLICITATION OF PROXIES
This Proxy Statement is furnished to Stockholders to solicit proxies on
behalf of the Directors of the Company. The cost of soliciting proxies will be
borne by the Company. Directors and officers of the Company may, without
additional compensation, solicit by mail, in person or by telecommunication. In
addition, the Company has retained Shareholder Communications Corporation
("SCC") to assist in the solicitation of proxies. An agreement with SCC provides
that it will distribute materials relating to the solicitation of proxies,
contact Stockholders to confirm receipt of materials and answer questions
relating thereto. SCC is to be paid a base fee of $2,000 plus out-of-pocket
expenses and is to be indemnified against certain liability incurred as a result
of the provision of such services.
By Order of the Board of Directors
/s/ KARL L. BLAHA
KARL L. BLAHA
President
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
THE NOMINEES ON THE ENCLOSED PROXY. REGARDLESS OF HOW YOU WISH TO VOTE YOUR
SHARES, YOUR BOARD OF DIRECTORS URGES YOU TO PROMPTLY SIGN, DATE AND MAIL THE
ENCLOSED PROXY.
14
<PAGE> 18
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 7, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
AMERICAN REALTY TRUST, INC.
The undersigned hereby appoints THOMAS A. HOLLAND and ROBERT A. WALDMAN, and
each of them, Proxies, with full power of substitution in each of them, in the
name, place and stead of the undersigned, to be at the Annual Meeting of
Stockholders of AMERICAN REALTY TRUST, INC., to be held on Monday, April 7,
1997, at 2:00 p.m. (Dallas time), or at any adjournments thereof, according to
the number of votes that the undersigned would be entitled to vote if
personally present, upon the following matters:
THE BOARD OF DIRECTORS OF AMERICAN REALTY TRUST, INC. RECOMMENDS A VOTE FOR THE
NOMINEES.
YOUR PROXY IS IMPORTANT. PLEASE INDICATE YOUR SUPPORT FOR THE BOARD OF
DIRECTORS BY MARKING THE BOXES FOR ELECTION OF THE CLASS II DIRECTORS. PLEASE
SIGN, DATE AND MAIL THIS CARD TODAY IN THE ENCLOSED ENVELOPE. IF NOT OTHERWISE
MARKED ABOVE, YOUR PROXY WILL BE VOTED FOR THE ELECTION OF THE CLASS II
NOMINEES. THIS PROXY REVOKES ALL PREVIOUS PROXIES.
(continued and to be signed and dated on the other side)
-------------
SEE REVERSE
SIDE
-------------
<PAGE> 19
[X] PLEASE MARK YOUR
VOTE AS IN THIS
EXAMPLE.
1. ELECTION OF FOR WITHHOLD NOMINEES: Roy E. Bode
CLASS II AUTHORITY Al Gonzalez
DIRECTORS: [ ] [ ]
For all nominees listed except as marked to the contrary below:
- ---------------------------------------------------------------
Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space below. when a proxy card is properly executed
and returned, the Shares represented thereby will be voted in favor of the
election for each of the nominees, unless authority to vote for any such nominee
is specifically withheld. There will be no cumulative voting for the election of
Class II Directors. If any nominee is unable to serve or will not serve (an
event which is not anticipated), then the person acting pursuant to the
authority granted under the proxy will cast votes for the remaining nominees
and, unless the Board of Directors takes action to reduce the number of Class II
Directors, for such other person(s) as he or she may select in place of such
nominees.
2. OTHER BUSINESS: FOR AGAINST ABSTAIN
I AUTHORIZE the aforementioned [ ] [ ] [ ]
proxies in their discretion to vote
upon such other business as may
properly come before the Annual
Meeting and any adjournments thereof.
SIGNATURE DATE , 1997
----------------------------------------- --------------------
SIGNATURE (IF JOINTLY HELD) TITLE
----------------------- -------------------------
Please sign exactly as name appears herein. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. When signing for
corporation, please sign full corporate name by an authorized officer. When
signing for a partnership, please sign partnership name by an authorized person.
If shares are held in more than one capacity, this proxy shall be deemed valid
for all shares held in all capacities.
