SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
ARIZONA LAND INCOME CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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ARIZONA LAND INCOME CORPORATION
NOTICE AND PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 16, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of ARIZONA LAND INCOME CORPORATION (the "Company") will be held at
2999 North 44th Street (6th Floor Conference Room), Phoenix, Arizona, at 2:00
p.m., Mountain Standard Time, on May 16, 2000. The Annual Meeting will be for
purposes of:
1. Electing three directors to the Board of Directors for one year terms;
and
2. Transacting such other business as may properly come before the Annual
Meeting.
The Record Date for Shareholders entitled to notice of and to vote at the
Meeting is the close of business on April 3, 2000.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE SIGN AND
DATE THE ENCLOSED PROXY AND MAIL IT IN THE ACCOMPANYING ENVELOPE. IF YOU ATTEND
THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
On Behalf of the Board of Directors
/s/ Thomas R. Hislop
Thomas R. Hislop
Chairman of the Board, Vice President,
Chief Financial Officer and Treasurer
April 17, 2000.
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ARIZONA LAND INCOME CORPORATION
2999 North 44th Street
Suite 100
Phoenix, Arizona 85018
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PROXY STATEMENT
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SOLICITATION OF PROXIES
This Proxy Statement is furnished to the shareholders of ARIZONA LAND
INCOME CORPORATION (the "Company") in connection with the solicitation of
proxies to be voted at the Annual Meeting of Shareholders to be held on May 16,
2000 (the "Annual Meeting"). The enclosed proxy is solicited by the Board of
Directors of the Company. The proxy materials were mailed on or about April 17,
2000 to holders of record of the Company's Class A Common Stock and Class B
Common Stock at the close of business on April 3, 2000 ("Shareholders").
A person giving the enclosed proxy has the power to revoke it at any time
before it is exercised by either: (i) attending the Annual Meeting and voting in
person; (ii) duly executing and delivering a proxy bearing a later date; or
(iii) sending written notice of revocation prior to the Annual Meeting to the
Secretary of the Company at 2999 North 44th Street, Suite 100, Phoenix, Arizona
85018.
The Company will bear the cost of soliciting proxies, including the charges
and expenses of brokerage firms and others for forwarding solicitation materials
to Shareholders. In addition to the use of the mails, proxies may be solicited
by personal interview, telephone or telegraph.
If the enclosed proxy is properly executed and returned to the Company in
time to be voted at the Annual Meeting, it will be voted as specified in the
proxy, unless it is properly revoked prior thereto. If no specification is made
in the proxy, the shares will be voted for the election of the nominees for
directors named below and, with respect to any other matters which may come
before the Annual Meeting, at the discretion of the proxy holders.
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VOTING SECURITIES OUTSTANDING
Only holders of record of the Company's Class A and Class B Common Stock at
the close of business on April 3, 2000, will be entitled to vote at the Annual
Meeting. At that date, there were 2,201,880 shares of Class A Common Stock
outstanding and 100 shares of Class B Common Stock outstanding, each of which is
entitled to one vote. As of April 3, 2000, all of the shares of Class B Common
Stock were owned by YSP Holdings, Inc., the Company's sponsor in its initial
public offering of Class A Common Stock. A majority of the aggregate of the
outstanding Class A and Class B Common Stock entitled to vote and represented in
person or by proxy at the Annual Meeting will constitute a quorum for the
conduct of business. If a quorum is present, the affirmative vote of the holders
of a majority of the shares present, whether in person or by proxy, and entitled
to vote is required for approval of the matters to be voted on at the Annual
Meeting.
ELECTION OF DIRECTORS
PROPOSED ELECTION
At the Annual Meeting, three directors are to be elected to serve for a
term of one year or until their successors are duly elected and qualified. The
Company's Bylaws provide that a majority of the Board of Directors must not be
affiliated, directly or indirectly, with ALI Advisor, Inc., the Company's
advisor (the "Advisor"), and must not perform any other services for the
Company, except as a director of the Company ("Unaffiliated Directors").
Burton P. Freireich and Robert Blackwell currently serve as the Company's
Unaffiliated Directors. The present terms of Messrs. Freireich and Blackwell
expire at the Annual Meeting. Messrs. Freireich and Blackwell have been
unanimously nominated for re-election as directors. Mr. Thomas R. Hislop, the
Company's Chairman of the Board, has also been unanimously nominated for
re-election as a director. Mr. Hislop's term also expires at the Annual Meeting.
If elected, the nominees will serve until the 2001 Annual Meeting of
Shareholders or until their successors are elected and qualified.
The shares represented by the enclosed proxy will be voted for the election
as directors of the three nominees named above, unless a vote is withheld from
any or all of the individual nominees. If any nominee becomes unavailable for
any reason or if a vacancy should occur before the election (which events are
not anticipated), the shares represented by the enclosed proxy may be voted for
such other persons as may be determined by the holders of such proxy. The three
nominees receiving the highest number of votes cast at the Annual Meeting will
be elected.
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INFORMATION CONCERNING DIRECTORS AND NOMINEES
Information respecting the names, ages, terms, positions with the Company
and business experience of the nominees is set forth below.
THOMAS R. HISLOP, age 51, has served as Chairman of the Board of the
Company since September 22, 1988, and as Vice President, Chief Financial Officer
and Treasurer of the Company since its inception. Mr. Hislop is Executive Vice
President, Chief Executive Officer and a Director of Peacock, Hislop, Staley &
Given, Inc., where he has been employed since its inception in 1989. Prior to
that date, Mr. Hislop was a director of Young, Smith & Peacock, Inc., where he
was employed from 1967 to 1989.
BURTON P. FREIREICH, age 75, has served as an Unaffiliated Director of the
Company since September 9, 1991. Mr. Freireich is currently retired. Prior to
retirement, Mr. Freireich was an owner of News-Suns Newspaper from 1960 to 1984.
Mr. Freireich is a graduate from the University of Illinois and has resided in
Arizona since 1950.
ROBERT BLACKWELL, age 77, has served as an Unaffiliated Director of the
Company since May 12, 1992. Mr. Blackwell has extensive experience in managing
assets for various trusts, and is currently managing various trust portfolios.
He has been involved with real estate in Arizona for more than twenty-five
years. Mr. Blackwell is a native of Kansas. He is a graduate from the University
of Kansas and has resided in Arizona since 1957.
MEETINGS OF THE BOARD OF DIRECTORS
During 1999, the Board of Directors met on three occasions. All members of
the Board attended more than 75 % of the meetings which occurred during their
term as directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company maintains an Audit Committee of the Board of Directors,
comprised of the Company's Unaffiliated Directors, Messrs. Freireich and
Blackwell. The Audit Committee reviews the financial statements of the Company
and considers such other matters in relation to the internal and external audit
of the financial affairs of the Company as necessary or appropriate in order to
facilitate accurate financial reporting. The Audit Committee met on March 7,
2000 in connection with the independent audit conducted by Arthur Andersen LLP,
the Company's independent public accountants, of the Company's operations
through December 31, 1999. See "Relationship With Independent Public
Accountants" herein.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
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Based solely upon a review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that the Company's officers, directors and greater than 10% beneficial
owners have complied with all Section 16(a) filing requirements applicable to
such persons or entities during the 1999 fiscal year.
COMPENSATION OF OFFICERS AND DIRECTORS
The Company has no salaried employees. In return for their services as
Unaffiliated Directors of the Company, Messrs. Freireich and Blackwell receive
an annual fee of $10,000, a meeting fee of $400 for each meeting the Board of
Directors attended, and a fee of $100 for each meeting of the Board conducted by
telephone. Mr. Hislop does not receive compensation for his services as a
director of the Company. The Company reimburses all directors for expenses
incurred in connection with their duties as directors of the Company.
EXECUTIVE COMPENSATION
The table below sets forth information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1999, 1998 and 1997, of those persons who were, at December
31, 1999 (i) the chief executive officer and (ii) the other four most highly
compensated executive officers of the Company:
SUMMARY COMPENSATION TABLE
Name and All Other
Principal Position Year Compensation(1)
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Thomas R. Hislop 1999 $ 9,498
Chairman of the Board, Vice President, 1998 10,264
Chief Financial Officer and Treasurer 1997 10,320
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(1) The Company has no salaried employees. See "Compensation of Officers and
Directors." However, under an Advisory Agreement with the Advisor the Company
pays the Advisor a servicing fee for servicing the Company's first mortgage
loans. See "Certain Transactions and Relationships." Mr. Hislop is Treasurer and
a director of the Advisor and functions as its Chief Executive Officer. Although
Mr. Hislop received no salary from the Advisor in 1999, 1998 or 1997, 25% of the
1999, 1998 and 1997 servicing fees, $37,993, $40,699 and $41,269, respectively,
have been attributed to Mr. Hislop for disclosure purposes. In addition, the
Company issued loan 22 to a third party to fund the purchase of land in
Surprise, Arizona. The initial proceeds of $562,000 were used in partial
settlement of the purchase price, and a $14,000 mortgage broker fee was paid to
an officer of the Company.
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SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth, as of April 3 2000, information concerning
the Class A Common Stock beneficially owned by each director and nominee of the
Company, by all executive officers, directors and director nominees as a group,
and by each shareholder who beneficially owns more than 5 % of the Company's
Class A Common Stock:
Name and Address Amount and Nature of Percent of Class A
of Beneficial Owner Beneficial Ownership Common Stock
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Thomas R. Hislop(1)(2) 3,400 *
Burton P. Freireich(1) 125,000 5.7%
Robert Blackwell(1)(3) 4,000 *
Barry W. Peacock(1)(4) 31,500 1.4%
Larry P. Staley(1)(5) 17,668 *
David W. Miller(6) 1,500 *
Cardinal Capital Management, L.L.C.(7) 408,050 18.5%
One Fawcett Place
Greenwich, CT 06830
Lourde John Constable, d/b/a Constable 268,650 12.2%
Asset Management(8)
Constable Partners, L.P.
5 Radnor Corp. Center
100 Matsonford Road, Suite 520
Radnor, PA 19087
Constable Partners, L.P.(9) 171,000 7.8%
Phillip and Linda Barkdoll(10) 189,296 8.6%
12003 S. Montezuma Court
Phoenix, Arizona 85004
All officers, directors and director 183,068 8.3%
nominees as a group (6 persons)
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* Less than one percent
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(1) The address for Messrs. Hislop, Freireich, Blackwell, Peacock and Staley is
2999 North 44th Street, Suite 100, Phoenix, Arizona 85018.
(2) 1,500 Shares for Mr. Hislop are held in retirement accounts. 400 Shares
reported for Mr. Hislop are held in custodian accounts for his minor
children Kevin Hislop and Stephanie Hislop. 500 of Mr. Hislop's Shares are
held in his personal account. 1,000 Shares reported for Mr. Hislop are held
in the Carol Cain trust of which Mr. Hislop is trustee.
(3) 2900 of the shares reported for Mr. Blackwell are held in the Robert and
Beverly Blackwell Family Trust. 1100 of Mr. Blackwell's shares are held in
the Robert Blackwell Individual Retirement Account.
(4) Mr. Peacock's shares are held in the Peacock, Hislop, Staley & Given, Inc.
Profit Sharing Plan and Trust #1 for the benefit of Mr. Peacock.
(5) 2400 of Mr. Staley's shares are held in the Peacock, Hislop, Staley &
Given, Inc. Profit Sharing Plan and Trust #4 for the benefit of Mr. Staley.
15,168 of Mr. Staley's shares are held as the community property of Larry
P. and Theresa Staley. Mrs. Theresa K. Staley holds 100 shares as her
personal property.
(6) 500 of shares reported for Mr. Miller are held in a custodial account for
his minor child, Lindsey Miller.
(7) Furnished in reliance upon information set forth in a Schedule 13G dated
February 12, 1999 and filed by Lourde John Constable with the Securities
and Exchange Commission.
(8) Furnished in reliance upon information set forth in a Schedule 13G dated
February 16, 1999 and filed by Lourde John Constable with the Securities
and Exchange Commission. Includes 97,650 shares which Lourde John Constable
has sole power to vote or direct to vote and 171,000 shares which Mr.
Constable has shared power to vote.
(9) Same address as Lourde John Constable. Furnished in reliance upon
information set forth in a Schedule 13G dated February 16, 1999 and filed
by Lourde John Constable with the Securities and Exchange Commission.
Includes 171,000 shares which Constable Partners, L.P. has shared voting
power.
(10) Includes 175,000 shares held by the Barkdoll Family Trust, for which Mr.
and Mrs. Barkdoll are the trustees and sole beneficiaries. Also includes
14,296 shares held in Mrs. Barkdoll's personal IRA account.
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CERTAIN TRANSACTIONS AND RELATIONSHIPS
Mr. Hislop is Treasurer and a director of the Advisor. Barry Peacock, the
Company's President, is President and a director of the Advisor. Larry Staley,
the Company's Vice President, is Secretary and a director of the Advisor. Under
the Company's Advisory Agreement with the Advisor, the Company pays the Advisor
a servicing fee for servicing the Company's First Mortgage loans. Messrs.
Hislop, Peacock and Staley collectively own all of the issued and outstanding
stock of the Advisor. The servicing fee is payable quarterly and equals 1/16 of
1% of (i) the aggregate outstanding loan balance of the First Mortgage loans in
the Company's mortgage loan portfolio, and (ii) the recorded value of property
acquired by the Company through foreclosure, as of the first day of each fiscal
quarter. During 1999, the Company paid the Advisor a servicing fee of $37,993.
In addition, the Company issued loan 22 to a third party to fund the purchase of
land in Surprise, Arizona. The initial proceeds of $562,000 were used in partial
settlement of the purchase price, and a $14,000 mortgage broker fee was paid to
an officer of the Company.
The Company also agreed to pay the Advisor a management fee for aiding the
Company in developing investment policies and analyzing and recommending
investments to the Company. The management fee will be paid for each quarter at
the end of which the shareholders' cumulative return on capital investment as of
the end of such quarter exceeds 12.7%, and will equal 30% of the Company's
available cash in excess of that necessary to provide shareholders with a
cumulative return on capital investment in excess of 12.7%. To date, the Company
has not accrued or paid a management fee to the Advisor.
The Company also agreed to reimburse the Advisor quarterly for other
expenses incurred in servicing the Company's first mortgage loans, such as
legal, accounting and transfer agent fees and copying and mailing costs incurred
in preparing and mailing periodic reports to shareholders. To date, the Company
has not reimbursed the Advisor for any such expenses.
The Advisory Agreement expired by its own terms June 13, 1991; however, the
Company and the Advisor have agreed to continue to operate as if the terms and
conditions of the Advisory Agreement are still in effect.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm utilized by the Company during 1999
was Arthur Andersen LLP (the "Auditors"). The Auditors have also been retained
as the principal accounting firm to be utilized by the Company during the
current fiscal year. The Board of Directors anticipates that representatives of
the Auditors will be present at the Annual Meeting, will have the opportunity to
make a statement if they desire, and will be available to respond to appropriate
questions.
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PROPOSALS BY SHAREHOLDERS
Any Shareholder proposal which is intended to be presented at the next
annual meeting of shareholders must be received at the Company's principal
executive office by no later than December 31, 2000, if such proposal is to be
considered for inclusion in the Company's proxy statement and form of proxy
relating to such meeting.
OTHER BUSINESS
As of the date of this statement, the management of the Company has no
knowledge of any business which will be presented for consideration at the
Annual Meeting other than that described above. As to other business, if any,
that may properly come before the Annual Meeting, or any adjournments thereof,
it is intended that the proxies hereby solicited will be voted with respect to
such business in accordance with the judgment of the proxy holders.
THE COMPANY INTENDS TO MAIL A COPY OF CERTAIN PORTIONS OF ITS ANNUAL REPORT
ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 TO EACH SHAREHOLDER
WHOSE PROXY IS SOLICITED HEREBY. UPON THE WRITTEN REQUEST OF ANY SUCH
SHAREHOLDER, THE COMPANY WILL PROVIDE THE COMPANY'S COMPLETE ANNUAL REPORT ON
FORM 10-KSB TO SUCH SHAREHOLDER AT NO CHARGE. SHAREHOLDERS SHOULD DIRECT THEIR
REQUESTS FOR SUCH ANNUAL REPORT TO: ARIZONA LAND INCOME CORPORATION, 2999 NORTH
44TH STREET, SUITE 100, PHOENIX, ARIZONA 85018, ATTENTION: MR. DAVID W. MILLER,
SECRETARY.
By Order of the Board of Directors
/s/ Thomas R. Hislop
Thomas R. Hislop,
Chairman of the Board
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ARIZONA LAND INCOME CORPORATION PLEASE
MARK VOTE IN OVAL IN THE FOLLOWING MANNER, USING DARK INK ONLY: [X]
1. Election of Directors - For Withhold For All
NOMINEES: 01 Thomas R. Hislop All All (Except Nominee(s)
02 Burton F. Freireich written below)
03 Robert Blackwell [ ] [ ] [ ] ___________
2. Vote upon such other business, in For Against Abstain
accordance with their discretion, as [ ] [ ] [ ]
may properly come before the Meeting.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED IN FAVOR OF EACH DIRECTOR NOMINATED. IF
ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD
OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
Dated , 2000.
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Signature(s)
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Please sign exactly as name appears. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If a corporation,
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized partner. If a joint
tenancy, all joint tenants must sign.
