SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-1(c) or Rule 14a-12
Homplex Mortgage Investments Corporation
-----------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i((1) or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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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: _/
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4) Proposed maximum aggregate value of transaction:
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_/ Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE>
HOMEPLEX MORTGAGE
INVESTMENTS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
November 29, 1994
The Annual Meeting of Stockholders of Homeplex Mortgage Investments
Corporation, a Maryland corporation (the "Company"), will be held at 8:00
a.m., on Tuesday, November 29, 1994, at The Wigwam Resort Hotel, Litchfield
Park, Arizona, for the following purposes:
1. To elect directors to serve until the next annual meeting of
stockholders and until their successors are elected and qualified.
2. To ratify the appointment of Kenneth Leventhal & Company as the
independent auditors of the Company for the fiscal year ending
December 31, 1994.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on October 21,
1994 are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
To assure your representation at the meeting, however, you are urged to
mark, sign, date and return the enclosed proxy as promptly as possible in
the postage-prepaid envelope enclosed for that purpose. Any stockholder
attending the meeting may vote in person even if he or she previously has
returned a proxy.
Sincerely,
Jay R. Hoffman
Secretary
Phoenix, Arizona
October 28, 1994
<PAGE>
HOMEPLEX MORTGAGE
INVESTMENTS CORPORATION
PROXY STATEMENT
General
The enclosed proxy is solicited on behalf of Homeplex Mortgage
Investments Corporation, a Maryland corporation (the "Company"), by the
Company's board of directors (the "Board of Directors") for use at the
Annual Meeting of Stockholders to be held at 8:00 a.m. on Tuesday, November
29, 1994 (the "Meeting"), or at any adjournment thereof, for the purposes
set forth in this proxy statement and in the accompanying Notice of Annual
Meeting of Stockholders. The Meeting will be held at The Wigwam Resort
Hotel, Litchfield Park, Arizona.
These proxy solicitation materials were mailed on or about October 28,
1994, to all stockholders entitled to vote at the Meeting.
The Company's principal executive office is located at 5333 North
Seventh Street, Suite 219, Phoenix, Arizona 85014.
The information contained in the "Compensation Committee Report on
Executive Compensation" below and "Performance of the Common Stock" below
shall not be deemed "filed" with the Securities and Exchange Commission or
subject to Regulations 14A or 14C or to the liabilities of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Voting Securities and Voting Rights
Stockholders of record at the close of business on October 21, 1994
(the "Record Date") are entitled to notice of and to vote at the Meeting.
On the Record Date, there were issued and outstanding 9,716,517 shares of
the Company's Common Stock, $.01 par value (the "Common Stock").
The presence, in person or by proxy, of the holders of a majority of
the total number of shares of Common Stock outstanding constitutes a quorum
for the transaction of business at the Meeting. Each stockholder voting at
the Meeting, either in person or by proxy, may cast one vote per share of
Common Stock held on all matters to be voted on at the Meeting.
The affirmative vote of a majority of the outstanding shares of Common
Stock of the Company present in person or represented by proxy at the
Meeting and entitled to vote on the election of directors is required for
the election of directors. Votes cast by proxy or in person at the Meeting
will be tabulated by the election inspectors appointed for the Meeting and
will determine whether a quorum is present. The election inspectors will
treat abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum but as unvoted for purposes
of determining the approval of any matter submitted to the stockholders for
a vote. If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with
respect to that matter.
Revocability of Proxies
Any person giving a proxy may revoke the proxy at any time before its
use by delivering to the Company written notice of revocation or a duly
executed proxy bearing a later date or by attending the Meeting and voting
in person.
Voting Solicitation
The cost of this solicitation will be borne by the Company. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for expenses incurred in forwarding
solicitation materials to such beneficial owners. Proxies also may be
solicited by certain of the Company's directors and officers, personally or
by telephone or telegram, without additional compensation.
Annual Report
The 1993 Annual Report to Stockholders, which was mailed to
stockholders with or preceding 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.
Security Ownership of Principal Stockholders and Management
As of the Record Date, there were outstanding 9,716,517 shares of
Common Stock of the Company. The table below sets forth the beneficial
ownership of Common Stock of the Company as of the Record Date by each
director and nominee for director, by each executive officer and by all
directors and executive officers of the Company as a group, and each person
known to the Company to be a beneficial owner of more than five percent of
Common Stock which information as to beneficial ownership is based upon
statements furnished to the Company by such persons and, with respect to Ira
Sochet, his Schedule 13D dated September 14, 1994 as filed with the
Securities and Exchange Commission.
Name and Address of Number of Shares Percent of
Beneficial Owner Beneficially Owned (1) Common Stock (2)
------------------- ---------------------- ---------------
Alan D. Hamberlin* 269,967(3) 2.71%
Jay R. Hoffman* 75,813(4) **
Mark A. McKinley* 45,662(5) **
Mike Marusich* 33,601(5) **
Gregory K. Norris* 11,199(5) **
All directors and
executive officers as
a group(five persons) 436,242(6) 4.31%
5% Stockholder:
Ira Sochet 513,400 5.28%
5701 Sunset Drive,
Suite 315
South Miami, Florida
33143
* Each director and executive officer of the Company may be reached
through the Company at 5333 North Seventh Street, Suite 219, Phoenix,
Arizona 85014.
** Less than 1% of the outstanding shares of Common Stock.
(1) Includes, where applicable, shares of Common Stock owned of record by
such person's minor children and spouse and by other related
individuals and entities over whose shares of Common Stock such person
has custody, voting control or the power of disposition.
(2) The percentages shown include the shares of Common Stock actually owned
as of October 21, 1994 and the shares of Common Stock which the person
or group had the right to acquire within 60 days of such date. In
calculating the percentage of ownership, all shares of Common Stock
which the identified person or group had the right to acquire within 60
days of October 21, 1994 upon the exercise of options are deemed to be
outstanding for the purpose of computing the percentage of the shares
of Common Stock owned by such person or group, but are not deemed to be
outstanding for the purpose of computing the percentage of the shares
of Common Stock owned by any other person.
(3) Includes 37,900 shares of Common Stock indirectly beneficially owned by
Mr. Hamberlin through a partnership and 232,067 shares of Common Stock
which Mr. Hamberlin had the right to acquire within 60 days of October
21, 1994 by the exercise of stock options (including dividend
equivalent rights).
(4) Includes 15,000 shares of Common Stock owned by Mr. Hoffman and 60,813
shares of Common Stock which Mr. Hoffman had the right to acquire
within 60 days of October 21, 1994 by the exercise of stock options
(including dividend equivalent rights).
(5) All of such shares of Common Stock are shares which Mr. McKinley, Mr.
Marusich, and Mr. Norris had the right to acquire within 60 days of
October 21, 1994 by the exercise of stock options (including dividend
equivalent rights).
(6) Includes 383,342 shares of Common Stock which such persons had the
right to acquire within 60 days of October 21, 1994 by the exercise of
stock options (including dividend equivalent rights).
Other than options and dividend equivalent rights granted under the
Company's stock option plan, there are no outstanding warrants, options or
rights to purchase any shares of Common Stock of the Company, and no
outstanding securities convertible into Common Stock of the Company.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission ("SEC") and the New York Stock Exchange. Officers, directors and
greater than 10% stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on the Company's review of the copies of such forms
received by it during the fiscal year ended December 31, 1993, and written
representations that no other reports were required, the Company believes
that each person who, at any time during such fiscal year, was a director,
officer or beneficial owner of more than 10% of the Company's Common Stock
complied with all Section 16(a) filing requirements during such fiscal year
or prior fiscal years.
ELECTION OF DIRECTORS
Nominees
A board of four directors is to be elected at the Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by
them for Alan D. Hamberlin, Mike Marusich, Mark A. McKinley and Gregory K.
Norris, all of whom currently are directors of the Company. In the event
that any nominee of the Company is unable or declines to serve as a director
at the time of the Meeting, the proxies will be voted for any nominee
designated by the current Board of Directors to fill the vacancy. It is not
expected that any nominee will be unable or will decline to serve as a
director. The term of office of each person elected as a director will
continue until the next annual meeting of stockholders and until a successor
has been elected and qualified. Biographical information respecting the
nominees for directors is set forth below under the heading "Information
Concerning Directors and Executive Officers of the Company."
The Company's bylaws provide that the Board of Directors shall consist
of not fewer than three nor more than 15 members. The bylaws further
provide that, for so long as the Company maintains its election to be
treated as a real estate investment trust ("REIT"), the majority of the
members of the Board of Directors and of any committee of the Board of
Directors will at all times be Unaffiliated Directors, except in the case of
a vacancy. Unaffiliated Directors are directors who are not themselves, or
affiliated with persons, responsible for directing or performing the day to
day business affairs of the Company. As of the date of this Proxy
Statement, the Unaffiliated Directors are Messrs. Marusich, McKinley and
Norris. Vacancies occurring on the Board of Directors among the
Unaffiliated Directors will be filled by nominees selected by the
Unaffiliated Directors who are approved by the vote of a majority of the
directors, including a majority of the Unaffiliated Directors.
All directors are elected at each annual meeting of the Company's
stockholders for a term of one year, and hold office until their successors
are elected and qualified. All officers serve at the discretion of the
Board of Directors.
Information Concerning Directors and Executive Officers of the Company
The directors and executive officers of the Company are as follows:
Name Age Position(s) Held
- ---- --- ----------------
Alan D. Hamberlin 45 Chairman of the Board of Directors,
President and Chief Executive Officer
Jay R. Hoffman 40 Vice President, Secretary, Treasurer and
Chief Financial and Accounting Officer
Mike Marusich 68 Director
Mark A. McKinley 47 Director
Gregory K. Norris 43 Director
Alan D. Hamberlin has been a director and the President and Chief
Executive Officer of the Company since its organization and Chairman of the
Board of Directors of the Company since January 1990. Mr. Hamberlin also
served as the President and Chief Executive Officer of the managing general
partner of the Company's former manager. Mr. Hamberlin has been President
of Courtland Homes, Inc. since July 1983. Mr. Hamberlin has served as a
director of American Southwest Financial Corporation and American Southwest
Finance Co., Inc. since their organization in September 1982 and served as a
Vice President of such companies from September 1982 to February 1987, as
Treasurer of such companies from September 1982 to February 1985 and from
February 1986 until February 1987 and as Principal Financial and Accounting
Officer from September 1982 to April 1984 and from October 1984 until
February 1987. Mr. Hamberlin also has served as a director of American
Southwest Affiliated Companies since its organization in March 1985 and of
American Southwest Holdings, Inc. since August 1994.
Jay R. Hoffman has been a Vice President and the Secretary, Treasurer
and Chief Financial and Accounting Officer of the Company since July 1988.
Mr. Hoffman, a certified public accountant, engaged in the practice of
public accounting with Kenneth Leventhal & Company from March 1987 through
June 1988 and with Arthur Andersen & Co. from June 1976 through March 1987.
Mike Marusich has been a director of the Company since June 1990. Mr.
Marusich has been a business consultant since 1980. Mr. Marusich, a
certified public accountant for 34 years, engaged in the practice of public
accounting with Ernst & Whinney (now Ernst & Young) for 15 years and was a
partner-in-charge of that firm's Phoenix, Arizona office from 1976 until his
retirement in 1980.
Mark A. McKinley has been a director of the Company since May 1988. Mr.
McKinley has been the President and a director of Cypress Financial
Corporation, a full service California mortgage banking corporation, since
its organization in April 1983, and a managing director of Rancho Margarita
Mortgage Corp. since March 1990. Mr. McKinley served as the Senior Vice
President of The Colwell Company, a California based corporation which
offers full service national mortgage banking services, from 1968 to May
1983. Mr. McKinley was directly responsible for the administration of
secondary marketing, hedging operations and loan sales and purchases at The
Colwell Company. Mr. McKinley has been involved at the local, state and
national levels of the Mortgage Bankers Association.
Gregory K. Norris has been a director of the Company since June 1990.
Mr. Norris has been the President of Norris & Benedict Associates, P.C.,
certified public accountants, or its predecessor firms since November 1979.
On November 1, 1992, the Company entered into an employment agreement
with Alan D. Hamberlin which superseded the previous employment agreement
that was to expire on April 30, 1993. The term of the employment agreement
is for the period from November 1, 1992 through April 30, 1996. The
employment agreement provides for the employment of Mr. Hamberlin as the
President and Chief Executive Officer of the Company and for Mr. Hamberlin
to perform such duties and services as are customary for such a position.
The employment agreement provides for Mr. Hamberlin to receive an annual
base salary of $250,000 and an annual performance bonus in an amount equal
to $1,500 for each $.01 per share of taxable income (computed in accordance
with the Internal Revenue Code of 1986, as amended (the "Code")) distributed
to the Company's stockholders with respect to each calendar year beginning
with 1992. A corporation owned by Mr. Hamberlin also is entitled to the
payment of $15,000 annually as reimbursement for expenses incurred by such
company in providing support to Mr. Hamberlin in connection with the
performance of his duties.
The employment agreement provides for Mr. Hamberlin to receive his fixed
and bonus compensation to the date of the termination of his employment by
reason of his death, disability or resignation and for Mr. Hamberlin to
receive his fixed compensation to the date of the termination of his
employment by reason of the termination of his employment for cause as
defined in the agreement. The employment agreement also provides for Mr.
Hamberlin to receive his fixed compensation in a lump sum and bonus payments
that would have been payable through the term of the agreement as if his
employment had not been terminated in the event that Mr. Hamberlin or the
Company terminates Mr. Hamberlin's employment following any "change in
control" of the Company as defined in the agreement. Section 280G of the
Code may limit the deductibility of such payments for federal income tax
purposes. A change in control would include a merger or consolidation of
the Company, a sale of all or substantially all of the assets of the
Company, changes in the identity of a majority of the members of the Board
of Directors of the Company or acquisitions of more than 9.8% of the
Company's Common Stock subject to certain limitations. The employment
agreement also restricts the Company from entering into a separate
management agreement or arrangement without Mr. Hamberlin's consent.
On August 1, 1991, the Company entered into a three-year employment
agreement with Jay R Hoffman, the Vice President, Secretary, Treasurer and
Chief Financial and Accounting Officer of the Company. The employment
agreement provided that Mr. Hoffman receive an annual base salary of
$175,000 and, if determined in the sole discretion of the President of the
Company, a bonus. The agreement provided that the Company could terminate
Mr. Hoffman's employment only for cause and that Mr. Hoffman could terminate
his employment without cause upon 90 days' written notice to the Company.
The employment agreement expired on July 31, 1994 and no new agreement has
been entered into between the Company and Mr. Hoffman.
Meetings and Committees of the Board of Directors
The Company's bylaws authorize the Board of Directors to appoint among
its members an executive committee, an audit committee and other committees
composed of three or more directors. A majority of the members of any
committee so appointed must be Unaffiliated Directors. Messrs. Marusich,
McKinley and Norris are members of the Company's Audit Committee. The Audit
Committee reviews the annual financial statements, the significant
accounting issues and the scope of the audit with the Company's independent
auditors and is available to discuss with the auditors any other audit
related matters which may arise during the year. The Board of Directors has
not appointed any other committees.
The Board of Directors of the Company held a total of three meetings
during the fiscal year ended December 31, 1993, which were attended by all
of the directors. The Company's Audit Committee met separately at one
formal meeting during the fiscal year ended December 31, 1993.
Transactions with Management and Others
The Company is a party to a subcontract agreement (the "Subcontract
Agreement") with American Southwest Financial Services, Inc. ("ASFS"), an
affiliate of American Southwest Financial Corporation and American Southwest
Finance Co., Inc. (together "American Southwest"), pursuant to which ASFS
has agreed to perform certain services for the company in connection with
the issuance and administration of mortgage securities issued by the Company
or by any affiliate of ASFS with respect to which the Company acquires
mortgage interests. Based on reports received by the Company from ASFS,
ASFS received administration fees and expenses of $201,000 for the year
ended December 31, 1993 for services performed by ASFS in connection with
mortgage securities with respect to which the Company owns mortgage
interests.
The Company is not affiliated with American Southwest or ASFS, except as
described in the following two paragraphs. Except for the Subcontract
Agreement with ASFS, the Company has no agreements with ASFS or American
Southwest.
Alan D. Hamberlin directly or indirectly owns a total of 11.6% of the
voting stock of American Southwest Financial Corporation and American
Southwest Finance Co., Inc. and indirectly owns 11.6% of the voting stock of
ASFS and Westam Mortgage Financial Corporation.
Alan D. Hamberlin also is a director of American Southwest Financial
Corporation, American Southwest Finance Co., Inc. and American Southwest
Affiliated Companies. American Southwest Affiliated Companies owns all of
the outstanding Common Stock of ASFS and Westam Mortgage Financial
Corporation.
<TABLE>
Executive Compensation
The following table sets forth compensation received by the Company's
Chief Executive Officer and its other executive officer for the Company's
last three fiscal years ending December 31, 1993.
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Other
Annual Restricted
Name and Principal Compen- Stock Stock All Other
Position Salary Bonus sation(F1) Awards Options Compensation
--------- ------ ----- --------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan D. Hamberlin 1993 $250,000 $ 4,100 -- -- 5,439 $ --
Chairman,President 1992 250,000 47,500 -- -- 25,280 243,861(1)
and Chief Executive 1991 250,000 225,000 -- 37,907
Officer
Jay R. Hoffman, Vice
President, Secretary,
Treasurer and Chief 1993 175,000 -- -- -- 1,425 --
Accounting and 1992 175,000 -- -- -- 4,091 12,975(1)
Financial Officer 1991 158,000 12,500 -- 10,665
_________________
(F1) During 1992 the Company purchased 64,818 shares of Common Stock from
Mr. Hamberlin and 9,793 shares of Common Stock from Mr. Hoffman
pursuant to the purchase provisions of the Company's stock option plan.
The net value realized (purchase price of stock on date of purchase by
Company less fair market value on such date) equaled $243,861 for Mr.
Hamberlin and $12,975 for Mr. Hoffman. Such shares had originally been
purchased in 1991 and 1990 by Mr. Hamberlin and in 1991 by Mr. Hoffman
through the exercise of stock options. At the time Mr. Hamberlin
exercised his options to acquire the 64,818 shares of Common Stock,
such shares of Common Stock had a fair market value in excess of the
exercise price paid of $291,422. At the time Mr. Hoffman exercised his
options to acquire the 9,793 shares of Common stock, such shares of
Common Stock had a fair market value in excess of the exercise price
paid of $57,716. Such amounts were previously disclosed in the
Company's Form 10-Ks for the years ended December 31, 1991 and December
31, 1990, as applicable. A portion of these amounts, for Federal
income tax purposes, were reported as compensation to Mr. Hamberlin and
Mr. Hoffman in the years the stock options were exercised.
<FN>
</FN>
</TABLE>
Officers and key personnel of the Company are eligible to receive stock
options under the Company's stock option plan. See "Employee Benefit
Plans."
Director Compensation
The Company pays an annual director's fee to each Unaffiliated Director
equal to $20,000, a fee of $1,000 for each regular meeting of the Board of
Directors attended by each Unaffiliated Director and reimbursement of costs
and expenses for attending such meetings. In addition, the Company's
directors are eligible to participate in the Company's stock option plan.
See "Employee Benefit Plans."
During 1993, the Unaffiliated Directors also accrued dividend equivalent
rights, in the amounts of 1,070 with respect to Mr. McKinley, 262 with
respect to Mr. Norris, and 788 with respect to Mr. Marusich. The dividend
equivalent rights accrued to Messrs. Hamberlin and Hoffman during 1993 are
included in the table on options granted to the Company's executive officers
below. In addition, the Company's directors are eligible to participate in
the Company's stock option plan described below.
Employee Benefit Plan
Stock Option Plan
In May 1988, the Company's Board of Directors adopted a stock option
plan (the "Plan") which was amended on July 18, 1990 to limit the redemption
price available to optionholders as described below. Under the terms of the
Plan, both qualified incentive stock options ("ISOs"), which are intended to
meet the requirements of Section 422A of the Code, and non-qualified stock
options may be granted. ISOs may be granted to the officers and key
personnel of the Company. Nonqualified stock options may be granted to the
Company's directors and key personnel. The purpose of the Plan is to
provide a means of performance-based compensation in order to attract and
retain qualified personnel and to provide an incentive to others whose job
performance affects the Company.
Under the Plan, options to purchase shares of the Company's Common Stock
may be granted to the Company's directors, officers and key personnel. The
maximum number of shares of the Company's Common Stock which may be covered
by options granted under the Plan is limited to 5% of the number of shares
outstanding. An option granted under the Plan may be exercised in full or
in part at any time or from time to time during the term of the option, or
provide for its exercise in stated installments at stated times during the
term of the option. The exercise price for any option granted under the
Plan may not be less than 100% of the fair market value of the shares of
Common Stock at the time the option is granted. The optionholder may pay
the exercise price in cash, bank cashier's check, or by delivery of
previously acquired shares of Common Stock of the Company. No option may be
granted under the Plan to any person who, assuming exercise of all options
held by such persons, would own directly or indirectly more than 9.8% of the
total outstanding shares of Common Stock of the Company.
An optionholder also will receive at no additional cost "dividend
equivalent rights" to the extent that dividends are declared on the
outstanding shares of Common Stock of the Company on the record dates during
the period between the date an option is granted and the date such option is
exercised. The number of dividend equivalent rights which an optionholder
receives on any dividend declaration date is determined by application of a
formula whereby the number of shares subject to the option is multiplied by
the dividend per share and divided by the fair market value per share (as
determined in accordance with the Plan) to arrive at the total number of
dividend equivalent rights to which the optionholder is entitled.
The dividend equivalent rights earned will be distributed to the
optionholder (or his successor in interest) in the form of shares of the
Company's Common Stock when the option is exercised. Dividend equivalent
rights will be computed both with respect to the number of shares under the
option and with respect to the number of dividend equivalent rights
previously earned by the optionholder (or his successor in interest) and not
issued during the period prior to the dividend record date. Shares of the
Company's Common Stock issued pursuant to the exchange of dividend
equivalent rights will not qualify for the favored tax treatment afforded
shares issued upon exercise of an ISO, notwithstanding the character of the
underlying option with respect to which the dividend equivalent rights were
earned. The number of shares issuable upon exchange of dividend equivalent
rights is not subject to the limit of the number of shares which are
issuable upon exercise of options granted under the Plan.
Under the Plan, an exercising optionholder has the right to require the
Company to purchase some or all of the optionholder's shares of the
Company's Common Stock. That redemption right is exercisable by the
optionholder only with respect to shares (including the related dividend
equivalent rights) that he has acquired by exercise of an option under the
Plan. Furthermore, the optionholder can only exercise his redemption rights
within six months from the last to expire of (i) the two year period
commencing with the grant date of an option, (ii) the one year period
commencing with the exercise date of an option, or (iii) any restriction
period on the optionholder's transfer of the shares of Common Stock he
acquires through exercise of his option. The price for any shares
repurchased as a result of an optionholder's exercise of his redemption
right is the lesser of the book value of those shares at the time of
redemption or the fair market value of the shares on the date the options
were exercised.
The Plan is administered by the Board of Directors which will determine
whether such options will be granted, whether such options will be ISOs or
non-qualified stock options, which directors, officers or key personnel will
be granted options, and the number of options to be granted, subject to the
aggregate maximum amount of shares issuable under the Plan set forth above.
Each option granted must terminate no more than 10 years from the date it is
granted. Under current law, ISOs cannot be granted to directors who are not
also employees of the Company, or to directors or employees of entities
unrelated to the Company.
The Board of Directors may amend the Plan at any time, except that
approval of the Company's stockholders is required for any amendment that
increases the aggregate number of shares of Common Stock that may be issued
pursuant to the Plan, increases the maximum number of shares of Common Stock
that may be issued to any person, changes the class of persons eligible to
receive such options, modifies the period within which the option may be
granted, modifies the period within which the options may be exercised or
the terms upon which options may be exercised, or increases the material
benefits accruing to the participants under the Plan. Unless previously
terminated by the Board of Directors, the Plan will terminate in May 1998.
The following table provides information on options granted to the
Company's executive officers during 1993.
Percentage Grant
of Total Exer- Date
Stock cise Market
Options Granted to Price Price
Granted Employees (per Expiration of
Name (#)(1) in 1993 share) Date(3) Stock Valuation(4)
---- ------- ---------- ------ ---------- ----- ------------
Alan D.
Hamberlin 5,439 59.67% (2) (2) $1.25 $6,800
Jay R.
Hoffman 1,425 15.63 (2) (2) 1.25 1,780
(1) All of such options are currently exercisable.
(2) Represent dividend equivalent rights earned in 1993. Such rights
expire at the same time as the options on which they were earned which
expire at various dates between July 26, 1999 and February 6, 2002.
(3) Options are subject to earlier expiration upon an optionee's
termination for cause or three months after any other termination of
employment.
(4) This column represents the Black-Scholes option valuation method
calculation of the options' present value. The Black-Scholes
computation is based upon certain assumptions, including hypothetical
stock price volatility and market interest rate calculations. In
addition, the Black-Scholes valuation method does not reflect the
effects upon option valuation of the options' nontransferability and
conditional exercisability.
The following table provides information on options exercised in 1993 by
the Company's executive officers and the value of such officer's unexercised
options at December 31, 1993.
Value of
Unexercised
Number of In-The-Money
Unexercised Options Options at
At December 31, December 31,
1993 1993($)(1)
------------------- ------------
Shares
Acquired
on Value At Exercis Unexercis Exercis Unexer-
Name Exercise(#) Exercise($) able able able cisable
---- ----------- ----------- ------ --------- ------- -------
Alan D. $ -- 232,067 -- $ -- $ --
Hamberlin --
Jay R.
Hoffman -- $ -- 60,813 -- $ -- $ --
(1) Calculated based on the closing price at December 31, 1993 of $1.25
multiplied by the number of applicable shares in the money (including
dividend equivalent rights), less the total exercise price per share.
SEP-IRA
On June 27, 1991, the Company established a simplified employee pension-
individual retirement account pursuant to Section 408(k) of the Code (the
"SEP-IRA"). Annual contributions may be made by the Company under the SEP-
IRA to employees. Such contributions will be excluded from each employee's
gross income and will not exceed the lesser of 15% of such employee's
compensation or $30,000. The Company did not make any contributions to the
SEP-IRA during 1993.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The Board of Directors is responsible for reviewing and determining the
Company's compensation policies and the compensation paid to executive
officers, including approving the employment agreement with the Company's
President. There is no compensation committee that reviews and makes
recommendations to the Board of Directors on cash compensation, stock option
awards and other compensation for the Company's executive officers.
The principal component of the compensation for the Company's President
is established pursuant to a three-year employment agreement with Mr.
Hamberlin. The term of the employment agreement with respect to Mr.
Hamberlin is for the period from November 1, 1992 through April 30, 1996 and
provides for Mr. Hamberlin to receive an annual base salary of $250,000 and
an annual performance bonus in an amount equal to $1,500 for each $.01 per
share of taxable income (computed in accordance with the Code) distributed
to the Company's stockholders with respect to each calendar year beginning
with 1993. With respect to the calendar year ending December 31, 1993, Mr.
Hamberlin received an annual performance bonus in an amount equal to $4,100
based upon the foregoing computation. A corporation owned by Mr. Hamberlin
also is entitled to the payment of $15,000 annually as reimbursement for
expenses incurred by such company in providing support to Mr. Hamberlin in
connection with the performance of his duties.
The employment agreement with respect to Mr. Hoffman is for the period
from August 1, 1991 through July 31, 1994 and provided for Mr. Hoffman to
receive an annual base salary of $175,000 and a bonus in the sole discretion
of the President of the Company. Mr. Hoffman did not receive a bonus during
fiscal year 1993.
In approving the employment agreement for Mr. Hamberlin, the Board of
Directors took into account, among other things, (1) the historical
financial results of the Company, (2) the performance of the Company's
Common Stock, (3) compensation paid to executive officers or to a management
company in prior years, and (4) compensation of executive officers employed
by companies in industries similar to the Company.
The Company also compensates its executive officers through the stock
option plans approved by the stockholders. The Board of Directors believes
that stock option grants provide an incentive that aligns the executive
officers' interests with those of the stockholders by giving them an equity
stake in the business. The Company's stock options are of significant value
to the executive officer receiving such options only to the extent that (i)
the price of the Company's stock increases above the option grant price
which is the fair market value on the date of the grant and/or (ii) dividend
distributions on the Company's Common Stock results in the accrual of
dividend equivalent rights with respect to the stock options. Thus, the
Board of Directors believes that the Company's stock option plan motivates
its executive officers to manage the Company in a manner that will provide
the best overall return to the Company's stockholders.
During fiscal year 1993, the compensation earned by executive officers
pursuant to their respective employment agreements was related to corporate
performance to the extent of cash bonuses which, with respect to Mr.
Hamberlin, was directly related to the amount of taxable income distributed
to the Company's stockholders. In addition, compensation in the form of
stock options held by the Company's executive officers was related to
corporate performance because the value of such stock options depends upon
the value of the Company's Common Stock in the market and the amount of
dividend distributions on the Common Stock (which results in the accrual of
dividend equivalent rights with respect to the stock options). These two
methods of compensation reflects the directors' belief that a portion of the
annual compensation of each executive officer should correlate to the
performance of the Company.
Alan D. Hamberlin Mike Marusich Mark A. McKinley Gregory K. Norris
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The entire Board of Directors of the Company performed the function of
determining the Company's compensation policies applicable to its executive
officers. Alan D. Hamberlin, the Chairman of the Board of Directors, also
was the President and Chief Executive Officer of the Company during the
fiscal year. Although Mr. Hamberlin served on the Company's Board of
Directors, he did not participate in the Board of Directors' decisions
regarding the approval of his employment agreement or grants of stock
options to him.
PERFORMANCE GRAPH
The following chart compares the cumulative total stockholder return on
the Company's Common Stock during the five years ended December 31, 1993,
with a cumulative total return on the Standard & Poor's 500 Stock Index and
an industry index (the "Index") prepared by the National Association of Real
Estate Investment Trusts ("NAREIT"). The Index consists of Mortgage Real
Estate Investment Trusts and includes 31 companies with a total market
capitalization of $3.3 billion as compiled by NAREIT. The comparison
assumes $100 was invested on December 31, 1988 in the Company's Common Stock
and in each of the foregoing indices and assumes reinvestment of dividends.
HOMEPLEX MORGAGE INVESTMENTS CORPORATION
1993 PROXY STOCK PERFORMANCE GRAPH
12-31-88 12-31-89 12-31-90 12-31-91 12-31-92 12-31-93
-------- -------- -------- -------- -------- --------
Homeplex
Mortgage
Investments
Corporation 100 43.4 69.4 157.5 60.0 31.6
Mortgage
REIT Index 100 84.1 68.7 90.5 92.2 105.7
S & P 500 100 131.5 127.3 166.2 179.0 196.8
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Kenneth Leventhal & Company,
independent public accountants, to audit the consolidated financial
statements of the Company for the fiscal year ending December 31, 1994 and
recommends that stockholders vote in favor of the ratification of such
appointment. In the event of a negative vote on such ratification, the
Board of Directors will reconsider its selection. The Board of Directors
anticipates that representatives of Kenneth Leventhal & Company will be
present at the Meeting, will have the opportunity to make a statement if
they desire, and will be available to respond to appropriate questions.
DEADLINE FOR RECEIPT OF STOCKHOLDERS PROPOSALS
Stockholder proposals that are intended to be presented by such
stockholders at the annual meeting of the Company for the fiscal year ending
December 31, 1994 must be received by the Company no later than February 1,
1995 in order to be included in the proxy statement and form of proxy
relating to such meeting.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Meeting.
If any other matters properly come before the Meeting, it is the intention
of the persons named in the enclosed proxy card to vote the shares they
represent as the Board of Directors may recommend.
Dated: October 28, 1994
<PAGE>
HOMEPLEX MORTGAGE INVESTMENTS CORPORATION
1994 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of HOMEPLEX MORTGAGE INVESTMENTS
CORPORATION, a Maryland corporation, hereby acknowledges receipt of the Notice
of Annual Meeting of Stockholders and Proxy Statement, each dated October 28,
1994, and hereby appoints Alan D. Hamberlin and Jay R. Hoffman, and each of the,
proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
1994 Annual Meeting of Stockholders of HOMEPLEX MORTGAGE INVESTMENTS
CORPORATION, to be held on Tuesday, November 29, 1994, at 8:00 a.m., at the
Wigwam Resort Hotel, Litchfield Park, Arizona, and at any adjournment thereof,
and to vote all shares of Common Stock that the undersigned would be entitled to
vote if then and there personally present, on the matters set forth on the
reverse side.
This proxy will be voted as directed or, if no contrary direction is
indicated, will be voted FOR the election of Directors; FOR the ratification of
the appointment of Kenneth Leventhal & Company as independent auditors of the
Company; and as the Proxies deem advisable on such other matters as may come
before the meeting.
A majority of such attorneys or substitutes as shall be present and
shall act at said meeting or any adjournment or adjournments thereof (or if only
one shall be present and act, then that one) shall have and may exercise all of
the powers of said attorneys-in-fact hereunder.
This Proxy is solicited on behalf of the Board of Directors.
<PAGE>
[ ] Please mark your votes as this
----------
COMMON
[ ] I plan to attend meeting
1. ELECTION OF DIRECTORS: WITHHOLD AUTHORITY to vote
FOR all nominees listed below for all nominees listed below
(except as indicated)
[ ] [ ]
(If you wish to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below):
Alan D. Hamberlin Mike Marusich Mark A. McKinley Gregory K. Norris
2. Proposal to ratify the appointment of Kenneth Leventhal & Company as the
independent auditors of the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
And upon such other matters that may properly come before the meeting or any
adjournment thereof.
-----------------------------
DATE
-----------------------------
SIGNATURE
-----------------------------
SIGNATURE
(This Proxy should be dated, signed by the stockholders(s) exactly as his or her
name appears hereon, and returned promptly in the enclosed envelope. Persons
signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as a community property, both stockholders should sign.)
