<PAGE>
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 Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
RESOURCE AMERICA, 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 Rule 14a-6(i)(1) and 0-11.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined:
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
RESOURCE AMERICA, INC.
1521 Locust Street Philadelphia, PA 19102
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 18, 2000
To the Stockholders of RESOURCE AMERICA, INC.:
Notice is hereby given that the annual meeting of stockholders of
RESOURCE AMERICA, INC., a Delaware corporation (the "Company"), will be held at
The Racquet Club, 215 S. 16th Street, Philadelphia, Pennsylvania, on Tuesday,
April 18, 2000, at 9:00 a.m. (the "Meeting"), for the following purposes:
1. To elect two directors to serve three-year terms expiring at
the annual meeting of stockholders in 2003.
2. To transact such other business as may properly be brought
before the Meeting and any adjournment thereof.
Only stockholders of record on the books of the Company at the close of
business on February 25, 2000, will be entitled to notice of and to vote at the
Meeting or any adjournment thereof. A list of stockholders entitled to vote at
the Meeting will be available for inspection at the offices of the Company, at
1521 Locust Street, Philadelphia, Pennsylvania 19102. The stock transfer books
will not be closed.
STOCKHOLDERS CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS TO ASSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY.
THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND YOU MAY REVOKE YOUR
PROXY AT ANY TIME PRIOR TO ITS USE.
By order of the Board of Directors,
Michael S. Yecies, Secretary
March 15, 2000
<PAGE>
RESOURCE AMERICA, INC.
1521 Locust Street Philadelphia, PA 19102
---------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
---------------------------------------------------------
GENERAL
Introduction
The annual meeting of stockholders of Resource America, Inc. (the
"Company") will be held on Tuesday, April 18, 2000, at 9:00 a.m. (the "Meeting")
at The Racquet Club, 215 S. 16th Street, Philadelphia, Pennsylvania, 19102 for
the purposes set forth in the accompanying notice. Only stockholders of record
at the close of business on February 25, 2000, will be entitled to notice of and
to vote at the Meeting.
This statement is furnished in connection with the solicitation by the
Board of Directors of the Company of proxies from holders of its Common Stock to
be used at the Meeting, and at any and all adjournments thereof. Proxies in the
accompanying form, properly executed and duly returned to the Company, and not
revoked, will be voted at the Meeting and any and all adjournments thereof.
This proxy statement and the accompanying form of proxy are being sent
on or about March 15, 2000, to stockholders of record as of February 25, 2000.
Revocation of Proxy
If a proxy in the accompanying form is executed and returned, it may
nevertheless be revoked at any time prior to its exercise by giving written
notice of revocation to the Secretary of the Company at its Philadelphia address
stated herein by submitting a later dated proxy or by attending the Meeting and
voting in person.
Expenses and Manner of Solicitation
The cost of soliciting proxies for the Meeting, including the cost of
preparing, assembling and mailing this Proxy Statement and the accompanying form
of proxy, is not expected to exceed $20,000 and will be borne by the Company.
Proxies may be solicited by directors, officers, and regular employees of the
Company either personally, by letter, or by telephone. Such directors, officers,
and employees will not be specifically compensated for soliciting such proxies.
The Company expects to reimburse banks, brokers, and other persons for their
reasonable out-of-pocket expenses in handling proxy materials for beneficial
owners of the Company's Common Stock.
VOTING AT THE MEETING
Only stockholders of record at the close of business on February 25,
2000, will be entitled to vote at the Meeting. As of December 17, 1999, the
Company had 23,324,415 shares of Common Stock outstanding. At the Meeting, the
holders of Common Stock will be entitled to one vote per share on each matter of
business properly brought before the Meeting.
The presence in person or by proxy of holders of the Company's
outstanding Common Stock representing not less than a majority of the
outstanding shares of Common Stock will constitute a quorum. The affirmative
vote of a plurality of the shares represented at the Meeting, in person or by
proxy, will be necessary for the election of directors. Approval of all other
business properly brought before the Meeting will require a favorable vote of a
majority of the shares represented at the Meeting, in person or by proxy.
1
<PAGE>
Abstentions may be specified on the election of each of the nominated
directors and on any other properly presented business and will be considered
present for purposes of determining the presence of a quorum. Abstentions,
including broker non-votes, with respect to shares present at the Meeting, in
person or by proxy, will have no effect on any such matter. Any proxy not
specifying to the contrary will be voted FOR the election of the specified
directors.
Brokers that are member firms of the New York Stock Exchange and who
hold shares in street name for customers generally have the discretion to vote
those shares with respect to certain matters, including the election of
directors, if they have not received instructions from the beneficial owners. A
failure by brokers to vote shares held by them in nominee name will mean that
such shares will not be counted for the purposes of establishing a quorum and
will not be voted.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
Common Stock owned, as of December 17, 1999, by (a) each person who, to the
knowledge of the Company, is the beneficial owner of 5% or more of the
outstanding shares of Common Stock, (b) each of the Company's present directors,
(c) each of the Company's executive officers, and (d) all of the Company's
present executive officers and directors as a group. This information is
reported in accordance with the beneficial ownership rules of the Securities and
Exchange Commission under which a person is deemed to be the beneficial owner of
a security if that person has or shares voting power or investment power with
respect to such security or has the right to acquire such ownership within 60
days. Shares of Common Stock issuable pursuant to options or warrants are deemed
to be outstanding for purposes of computing the percentage of the person or
group holding such options or warrants but are not deemed to be outstanding for
purposes of computing the percentage of any other person.
<TABLE>
<CAPTION>
Common Stock
------------------------------------------------
Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
- - ---------------- -------------------- ----------
Directors(1)
<S> <C> <C>
Carlos C. Campbell................................................ 480 *
Daniel G. Cohen................................................... 137,400 (2)(3)(4)(5)(6) *
Edward E. Cohen................................................... 1,309,059 (2)(3)(4)(5)(7)(8) 5.54%
Andrew M. Lubin................................................... 840 *
P. Sherrill Neff.................................................. 0 *
Scott F. Schaeffer................................................ 194,199 (2)(3)(4)(5) *
Alan D. Schreiber................................................. 16,110 *
John S. White..................................................... 1,000 *
Executive Officers(1)
Steven J. Kessler................................................. 20,855 (3)(4)(5) *
Freddie M. Kotek.................................................. 114,080 (2)(4)(5) *
Nancy J. McGurk................................................... 77,078 (2)(4)(5) *
Michael L. Staines................................................ 150,250 (2)(4)(5) *
All present executive officers and directors as
a group (12 persons)........................................... 1,975,101 (2)(3)(4)(5)(7)(8) 8.27%
Other owners of 5% or
More of Outstanding Shares
Wellington Management Company, LLP(9)............................. 1,916,400 8.22%
Thomson Horstmann & Bryant, Inc.(10).............................. 1,836,400 7.87%
</TABLE>
3
<PAGE>
* Less than 1%
(1) The address for each director and executive officer is 1521 Locust Street,
Fourth Floor, Philadelphia, Pennsylvania 19102.
(2) Includes shares issuable on exercise of options granted under the Company's
1989 Key Employee Stock Option Plan in the following amounts: Mr. D. Cohen
- 8,454 shares; Mr. E. Cohen - 229,212 shares; Mr. Kotek - 29,495 shares;
Ms. McGurk - 33,708 shares; Mr. Schaeffer - 16,854 shares; and Mr. Staines
- 84,270 shares.
(3) Includes shares issuable on exercise of options granted under the Company's
1997 Key Employee Stock Option Plan in the following amounts: Mr. D. Cohen
- 54,154 shares; Mr. E. Cohen - 56,250 shares; Mr. Kessler - 18,750; and
Mr. Schaeffer - 22,500 shares.
(4) Includes shares allocated under the Company's 1989 Employee Stock Ownership
Plan in the following amounts: Mr. D. Cohen - 223 shares; Mr. E. Cohen -
60,490 shares; Mr. Kessler - 28 shares; Mr. Kotek - 15,732 shares; Ms.
McGurk - 10,141 shares; Mr. Schaeffer - 21,363 shares; and Mr. Staines -
41,080 shares, as to which each has voting power.
(5) Includes shares allocated under the Company's Investment Savings Plan (the
"401(k) Plan") in the following amounts: Mr. D. Cohen - 3,065 shares; Mr.
E. Cohen - 11,366 shares; Mr. Kessler - 2,077 shares; Mr. Kotek - 7,370
shares; Ms. McGurk - 15,375 shares; Mr. Schaeffer - 3,485 shares; and Mr.
Staines - 1,692 shares, as to which each has voting power.
(6) Includes 46,250 shares held in a trust of which Mr. D. Cohen is a
co-trustee and co-beneficiary.
(7) Includes 249,516 shares held by a private charitable foundation, of which
Mr. E. Cohen serves as a co-trustee. Mr. E. Cohen disclaims beneficial
ownership of these shares.
(8) Includes 92,500 shares held in trusts for the benefit of Mr. E. Cohen's
spouse and/or children. Mr. E. Cohen disclaims beneficial ownership of
these shares.
(9) This information is based on Form 13f filed with the United States
Securities and Exchange Commission as of September 30, 1999. Includes
shares held by entities managed by the named entity. The address for
Wellington Management Company, LLP is 75 State Street, Boston,
Massachusetts 02109.
(10) This information is based on Schedule 13G filed with the United States
Securities and Exchange Commission on January 12, 2000. Includes 863,200
shares as to which sole voting power is claimed, 22,100 shares as to which
shared voting power is claimed and 1,281,400 shares as to which sole
dispositive power is claimed. The address for Thomson Horstmann & Bryant,
Inc. is Park 80 West, Plaza Two, Saddle Brook, New Jersey 07663.
PROPOSAL 1. ELECTION OF DIRECTORS
Directors
The Board of Directors is divided into three classes with directors in
each class serving three-year terms. The terms of directors in the Class of 2000
expire at the annual meeting of stockholders to which this proxy statement
relates. The Nominating Committee of the Board of Directors has nominated Daniel
G. Cohen and John S. White for re-election as directors in the Class of 2003.
The persons named in the enclosed proxy intend, in the absence of a
contrary direction, to vote for Messrs. D. Cohen and White as directors of the
Company in the Class of 2003, for three-year terms expiring at the 2003 annual
meeting of stockholders, or until their successors are elected or appointed.
Should either nominee become unable or refuse to accept nomination or election
as a director in the Class of 2003, it is intended that the persons named as
proxies will vote for the election of such other person as the Nominating
Committee of the Board of Directors may recommend. The Board of Directors knows
of no reason why either of the nominees might be unable or refuse to accept
nomination or election.
4
<PAGE>
Information is set forth below regarding the principal occupation of
each nominee and each of the other directors of the Company. There are no family
relationships among the nominees and directors of the Company except that Daniel
G. Cohen, President, Chief Operating Officer and a director of the Company, is a
son of Edward E. Cohen, Chairman of the Board of Directors and Chief Executive
Officer of the Company.
<TABLE>
<CAPTION>
Names of Directors, Principal Year in Which Service Term to Expire
Occupation and Other Information As Director Began At Annual Meeting
- - -------------------------------- ----------------- -----------------
<S> <C> <C>
Nominees whose terms will expire in 2003 are:
Daniel G. Cohen, 30, President and Chief Operating Officer of the
Company since 1998. Prior thereto, Executive Vice President of the
Company since 1997. Senior Vice President of the Company from 1995 to
1997. Chairman of the Executive Committee and director of TRM
Corporation (a provider of self-service photocopying and ATM machines)
since 1998. Prior to joining the Company in November 1995, Mr. Cohen
was principally engaged in graduate studies. Mr. Cohen is a son of
Edward E. Cohen. 1997 2003
John S. White, 59, Chief Executive Officer and President of DCC
Securities Corporation (a securities brokerage firm) since 1989. 1993 2003
Persons other than current nominees who serve for the terms indicated:
Carlos C. Campbell, 62, President of C.C.Campbell and Company (a
management consulting firm) since 1985. Director of PICO Holdings, Inc.
(an insurance and investment holding company) since 1998. 1990 2002
Edward E. Cohen, 61, Chairman of the Board of the Company since 1990 and
Chief Executive Officer of the Company since 1988. Director and
Chairman of the Executive Committee of JeffBanks, Inc. (a bank holding
company) from 1981 until its acquisition in 1999. Chairman of the Board
of Directors of TRM Corporation since 1998. Chairman of the Board of
Brandywine Construction & Management, Inc. (a property management
company) since 1994. Mr. Cohen is the father of Daniel G. Cohen. 1988 2002
Andrew M. Lubin, 53, President, Delaware Financial Group, Inc. (a
private investment firm) since 1990. 1994 2001
P. Sherrill Neff, 48, President, Chief Financial Officer and a director
of Neose Technologies, Inc. (a biotechnology firm) since 1994. Senior
Vice President of U.S. Healthcare, Inc. (a national managed health care
company) from 1993 to 1994. Director of JeffBanks, Inc. from 1994 until
its acquisition in 1999. 1998 2001
Scott F. Schaeffer, 37, Vice Chairman of the Board of the Company since
1998. Prior thereto, Executive Vice President of the Company since
1997. From 1995 to 1997, Senior Vice President of the Company.
President of Resource Properties, Inc. ("Resource Properties") (a wholly
owned subsidiary of the Company) since 1992. 1997 2002
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Names of Directors, Principal Year in Which Service Term to Expire
Occupation and Other Information As Director Began At Annual Meeting
- - -------------------------------- ----------------- -----------------
<S> <C> <C>
Alan D. Schreiber, M.D., 57, Professor of Medicine since 1973 and
Assistant Dean for Research and Research Training since 1990 at the
University of Pennsylvania School of Medicine. Chairman, Scientific
Advisory Board, Inkine Pharmaceutical Co., Inc. since 1997. Founder and
Chief Scientific Officer of CorBec Pharmaceuticals, Inc. from 1993 to
1997. 1994 2001
</TABLE>
Non-Director Executive Officers
Steven J. Kessler, 56, has been Senior Vice President and Chief
Financial Officer of the Company since August 1997. Prior thereto, Mr. Kessler
was Vice President-Finance and Acquisitions at Kravco Company (a national
shopping center developer and operator) from March 1994 until joining the
Company. From 1983 through March 1994, Mr. Kessler was Chief Financial Officer
and Chief Operating Officer at Strouse Greenberg & Co., Inc., a regional full
service real estate company, and Vice President-Finance and Chief Accounting
Officer at its successor, The Rubin Organization. Prior thereto, he was a
partner at the international accounting and consulting firm of Touche Ross & Co.
(now Deloitte & Touche LLP).
Freddie M. Kotek, 44, Senior Vice President of the Company since 1995.
President of Resource Leasing, Inc. (a wholly owned subsidiary of the Company)
since 1995. Executive Vice President of Resource Properties since 1993.
Nancy J. McGurk, 44, Vice President of the Company since 1992.
Treasurer and Chief Accounting Officer of the Company since 1989. Vice
President-Finance of Resource Energy, Inc. ("Resource Energy") (a wholly owned
subsidiary of the Company) since 1995.
Michael L. Staines, 50, Senior Vice President of the Company since
1989. Director of the Company from 1989 to 2000 and Secretary of the Company
from 1989 to 1998. President, Secretary and a director of Resource Energy since
1993. Senior Vice President, Secretary and a director of Atlas America, Inc.
("Atlas America") (a wholly owned subsidiary of the Company) since 1998.
Director of Viking Resources Corporation ("Viking") (a wholly owned subsidiary
of the Company) since 1999.
The Board of Directors appoints officers each year and from time to
time as necessary.
Director Compensation
Each non-employee director of the Company was paid a retainer of $1,000
per month during fiscal 1999. Each non-employee director who is a chairman of a
committee of the Board of Directors was paid an additional retainer of $500 per
month. Each non-employee director who is a member of a committee of the Board of
Directors, but not its chairman, was paid $500 per meeting attended in person
and $250 per meeting attended telephonically. A total of $89,800 was paid to
five non-employee directors during fiscal 1999.
In addition, two non-employee directors of the Company serve as
directors of subsidiaries of the Company. During fiscal 1999, Mr. Campbell was
paid $6,000 for his service as a director of Fidelity Leasing; and Mr. White was
paid $6,000 for his service as a director of Resource Energy.
6
<PAGE>
Each non-employee director of the Company is also eligible to
participate in the Non-Employee Director Deferred Stock and Deferred
Compensation Plan (the "Non-Employee Director Plan"), approved by the Company's
stockholders on May 13, 1997. Under the Non-Employee Director Plan, non-employee
directors ("Eligible Directors") are awarded Units representing the right to
receive one share of Company common stock for each Unit awarded. As adjusted for
stock splits, 3,000 Units were awarded to each Eligible Director upon becoming
an Eligible Director, and an additional 3,000 Units are awarded to each Eligible
Director on each anniversary of the date on which such person was first awarded
Units under the Non-Employee Director Plan. Units do not vest until the fifth
anniversary of their grant, except that Units will vest sooner upon a change in
control of the Company or death or disability of an Eligible Director, provided
the Eligible Director completed at least six months of service. Upon termination
of service by an Eligible Director, the Company will issue shares of Company
common stock equal to the number of vested Units held by the Eligible Director,
but all unvested Units are forfeited. The Non-Employee Director Plan provides
for the issuance of a maximum of 75,000 Units and terminates on April 30, 2002.
42,000 Units have been awarded to Eligible Directors as of the date of this
proxy statement.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors, and persons who own more than ten percent 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 and to
furnish the Company with copies of all such reports.
Based solely on its review of the reports received by it, or written
representations from certain reporting persons that no filings were required for
those persons, the Company believes that, during fiscal year 1999, its officers,
directors and greater than ten percent shareholders complied with all applicable
filing requirements, except that one report was inadvertently filed late, due to
an administrative error, for each of Messrs. D. Cohen, E. Cohen, Kessler, Kotek,
Schaeffer, Staines and Ms. McGurk.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors, consisting of
Messrs. Campbell, Neff and White, makes determinations regarding the
compensation of the Company's executive officers. None of such persons is an
employee, or former employee, of the Company. No executive officer of the
Company is a director or executive officer of any entity of which any member of
the Compensation Committee is a director or executive officer, except that Mr.
E. Cohen was Chairman of the Executive Committee and a director of JeffBanks,
Inc. and Mr. Neff was a director of JeffBanks, Inc.
Information Concerning the Board of Directors and Certain Committees
The Board of Directors held a total of six meetings during fiscal 1999.
No director attended less than 75% of all the meetings of the Board and those
committees on which he served in fiscal 1999.
Standing committees of the Board of Directors are the Audit Committee,
Compensation Committee, Executive Committee, Investment Committee, and
Nominating Committee.
The Audit Committee reviews the scope and effectiveness of audits by
the independent accountants and the Company's internal auditor, selects and
recommends to the Board of Directors the engagement of independent accountants,
and reviews the adequacy of the Company's internal controls. The Committee held
three meetings during fiscal 1999. Members of the Committee are Messrs. Lubin
and Neff.
The Compensation Committee establishes and monitors compensation levels
for officers of the Company, and administers the Company's 1997 and 1999 Key
Employee Stock Option Plans. The Committee held five meetings during fiscal
1999. Members of the Committee are Messrs. Campbell, Neff, and White.
7
<PAGE>
The Executive Committee acts on any and all matters on behalf of, and
with the full authority of, the Board of Directors between meetings of the Board
of Directors. The Committee did not hold any meetings during fiscal 1999.
Members of the Committee are Messrs. D. Cohen, E. Cohen, Schaeffer, and one
non-employee director. The non-employee director position is for a three month
term and is rotated among such directors.
The Investment Committee reviews all current management investment
practices and evaluates and monitors all existing and proposed Company
investments. The Committee held six meetings during fiscal 1999. Members of the
Committee are Messrs. White, Campbell and Lubin.
The Nominating Committee recommends persons for nomination as directors
of the Company. The Committee held one meeting during fiscal 1999. The Committee
will consider nominees recommended by security holders for the 2001 annual
meeting if submitted in writing to the Secretary of the Company prior to
November 17, 2000. Members of the Committee are Messrs. E. Cohen and Schreiber.
Executive Officer Compensation
Summary Compensation of Named Executives
The following tables set forth certain information concerning the
compensation paid or accrued during each of the last three fiscal years by the
Company and its subsidiaries to the Company's Chief Executive Officer and each
of the Company's four other most highly compensated executive officers whose
aggregate salary and bonus (including amounts of salary and bonus foregone to
receive non-cash compensation) exceeded $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Awards Payouts
------------------------ -----------------------
Restricted Securities
Stock Underlying LTIP All
Name and Principal Position Year Salary Bonus(1) Other Awards(2) Options(3) Payouts(4) Other(5)
- - --------------------------- ---- ------ -------- ----- --------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edward E. Cohen 1999 $ 578,654 $ 600,000 0 $ 1,659 425,000 0 $ 564,543
Chairman & Chief 1998 475,865 500,000 0 0 0 0 212,327
Executive Officer 1997 325,000 250,000 0 0 0 0 250,095
Daniel G. Cohen 1999 410,769 250,000 0 1,659 316,615 0 8,543
President & Chief 1998 327,211 150,000 0 0 0 0 8,543
Operating Officer 1997 225,625 60,000 0 0 0 0 11,083
Scott F. Schaeffer 1999 410,769 250,000 0 1,651 190,000 0 8,543
Vice Chairman 1998 327,211 150,000 0 0 0 0 8,543
1997 178,750 60,000 0 0 0 0 10,066
Steven J. Kessler 1999 285,769 150,000 0 208 100,000 0 8,543
Senior Vice President & 1998 229,423 0 0 0 0 0 0
Chief Financial Officer
Freddie M. Kotek 1999 185,769 100,000 0 1,651 10,000 0 8,543
Senior Vice President 1998 150,000 40,000 0 0 0 0 8,543
1997 148,750 40,000 0 0 0 0 9,199
</TABLE>
(1) Bonuses were paid in January 1999 based upon performance in fiscal 1998.
(2) Reflects shares awarded under the Company's 1989 Employee Stock Ownership
Plan, valued at the closing price of the Company's Common Stock at
September 30, 1999. For purposes of this table, all shares are assumed to
be fully vested. Mr. E. Cohen was 100% vested as of September 30, 1997. Mr.
Schaeffer was 100% vested as of September 30, 1999. Shares awarded to
Messrs. Kotek, D. Cohen and Kessler were vested 80%, 40% and 0%
respectively, as of such date and will vest an additional 20% on each
future September 30 until fully vested on September 30, 2000, 2002 and
2004, respectively. At September 30, 1999, the number of restricted shares
awarded and the value of such awarded restricted shares (in the aggregate,
and valued at the closing market price of the Company's Common Stock on the
dates of the respective grants) are: Mr. E. Cohen - 60,490 shares
($120,992); Mr. D. Cohen - 223 shares ($1,659); Mr. Schaeffer - 21,363
shares ($62,316); Mr. Kessler - 28 shares ($208); and Mr. Kotek, 15,732
shares ($53,465). Cash dividends, as and when authorized by the Company's
Board of Directors, have been and will continue to be paid to the Plan on
the restricted shares.
8
<PAGE>
(3) Of the options included in this table, 216,615, 225,000, 75,000, and 90,000
options for Messrs. D. Cohen, E. Cohen, Kessler, and Schaeffer,
respectively, were cancelled and replaced with an identical number of new
options in October 1998. See "Ten Year Option/SAR Repricings."
(4) Except for the 1989 Employee Stock Ownership Plan, the stock option plans
and the 401(k) Plan, reported elsewhere in this table, the Company does not
have long-term incentive plans or pension or profit-sharing plans.
(5) All such amounts are matching payments made by the Company under the 401(k)
Plan except that the amounts set forth for Mr. E. Cohen in 1999, 1998 and
1997 include $556,000, $204,000 and $240,000, respectively, of accrued
obligations under a Supplemental Employment Retirement Plan established by
the Company in connection with the employment agreement between Mr. E.
Cohen and the Company. See "Employment Agreements."
Option Grants and Exercises in Last Fiscal Year and Year-End Option Values
The following table provides additional information about the stock
options shown in the "Securities Underlying Options" column of the preceding
Summary Compensation Table, which were granted in fiscal 1999 to the named
executive officers. The Company has not granted any stock appreciation rights to
the named executive officers in fiscal 1999.
<TABLE>
<CAPTION>
Option Grants in Fiscal Year 1999
Percent of
Number of Total Options Potential Realizable Value
Securities Granted to Exercise at Stock Price
Underlying Employees in Price Expiration Appreciation for
Name Options Granted Fiscal 1999 ($/Share) Date Option Term
- - ---- --------------- ----------- --------- ---------- -------------------------
@5% @10%
----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Edward E. Cohen 225,000 29.84% $ 8.08 10/20/03 $ 1,143,047 $2,896,707
200,000 27.45% 15.50 05/20/09 1,949,573 4,940,602
Daniel G. Cohen 126,615 16.79% 8.08 10/20/03 643,231 1,630,073
90,000 11.93% 8.08 10/20/03 457,219 1,158,683
100,000 13.73% 15.50 05/20/09 974,787 2,470,301
Scott Schaeffer 90,000 11.93% 8.08 10/20/03 457,219 1,158,683
100,000 13.73% 15.50 05/20/09 974,787 2,470,301
Steven J. Kessler 75,000 9.95% 8.08 10/20/03 381,016 965,569
25,000 3.43% 15.50 05/20/09 243,697 617,575
Freddie M. Kotek 10,000 1.37% 15.50 05/20/09 97,479 247,030
</TABLE>
(1) All options listed in this table that expire on October 20, 2003 were
granted under the Company's 1997 Key Employee Stock Option Plan. These
options vest 25% per year commencing on October 20, 1999. For certain
information relating to a repricing of these options on October 20, 1998,
see "Ten Year Option/SAR Repricings." All options listed in this table that
expire on May 20, 2009 were granted under the Company's 1999 Key Employee
Stock Option Plan. These options vest 25% per year commencing on May 20,
2000. The exercise price of all options granted under both stock option
plans reflects the fair market value of the Company's common stock on the
date of the grants.
9
<PAGE>
The following table sets forth the aggregated option exercises during
fiscal 1999 and the number of unexercised options, and the value thereof on
September 30, 1999, held by the executive officers listed in the above Summary
Compensation Table. No stock appreciation rights were exercised or held by the
named executive officers in fiscal 1999.
Aggregated Option Exercises In Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Value of Unexercised
Securities Underlying in-the-Money Options
Unexercised at
Options at FY-End FY-End Exercisable/
Shares Acquired Exercisable/ Unexercisable (2)
Name On Exercise Value Realized(1) Unexercisable --------------------
- - ---- ----------- ----------------- -------------
<S> <C> <C> <C> <C>
Edward E. Cohen 57,306 $ 374,131 157,583/496,629 $698,991/317,725
Daniel G. Cohen 8,400 54,253 27/325,042 127/39,680
Scott F. Schaeffer 33,708 291,429 0/206,854 0/79,360
Steven J. Kessler 0 0 0/100,000 0/0
Freddie M. Kotek 58,990 449,191 0/39,495 0/138,883
</TABLE>
(1) Value is calculated by subtracting the total exercise price from the fair
market value of the securities underlying the options at the date of
exercise.
(2) Value is calculated by subtracting the total exercise price from the fair
market value of the securities underlying the options at September 30,
1999.
Ten-Year Option/SAR Repricings
<TABLE>
<CAPTION>
Number of
Securities Exercise Length of
Underlying Market Price of Price at Original Option Term
Options Stock at Time Time of New Remaining
Repricing Repriced of Repricing or Repricing or Exercise at Date of
Repricing or Name Date or Amended Amendment Amendment Price Repricing or Amendment
- - ----------------- ---- ---------- --------- --------- ----- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Edward E. Cohen 10/20/98 225,000 $8.08 $ 22.67 $ 8.08(1) 114.5 months
04/20/93 17,500 7.75 26.35 8.53 80 months
Daniel G. Cohen 10/20/98 126,615 8.08 15.58 8.08(1) 110 months
10/20/98 90,000 8.08 22.67 8.08(1) 114.5 months
Scott F. Schaeffer 10/20/98 90,000 8.08 22.67 8.08(1) 114.5 months
Steven J. Kessler 10/20/98 75,000 8.08 13.17 8.08(1) 106 months
Michael L. Staines 04/20/93 10,000 7.75 21.30 7.75 83 months
Francis J. Bagnell(2) 04/20/93 75,000 7.75 26.35 7.75 80 months
</TABLE>
10
<PAGE>
- - --------------
(1) The exercise price for all options repriced on October 20, 1998 is the
arithmetic mean of the closing bid and ask prices for the stock on that
day, which was calculated in accordance with the definition of fair market
value in the Company's 1997 Key Employee Stock Option Plan. These options
vest 25% per year commencing on October 20, 1999 and expire on October 20,
2003.
(2) Mr. Bagnell, a former President and Chief Operating Officer of the Company,
passed away in July 1995.
Compensation Committee Report on Repricing of Options
The Compensation Committee of the Board of Directors (the "Committee")
is responsible for setting and administering compensation programs for the
Company's executives, including but not limited to administering the Company's
Key Employee Stock Option Plans.
An express purpose of the Company's 1997 Key Employee Stock Option Plan
(the "1997 Plan") is to advance the interests of the Company and its
stockholders by providing a means for employees to benefit from the purchase of
shares under options so that the Company may retain and attract personnel upon
whose judgment, initiative and efforts the successful conduct of the Company and
its business largely depends.
When the Committee met on October 20, 1998, the exercise prices of
options granted under the 1997 Plan were deeply under water, which the Committee
believes was due largely to market conditions rather than the Company's
operating results. In order to keep the incentive and motivational quality of
the options granted under the 1997 Plan, as well as the retention value options
provide employees, the Committee unanimously determined that it was in the best
interest of the Company to replace and reprice the options previously granted
under the 1997 Plan. Accordingly, on October 20, 1998, all options granted under
the 1997 Plan, prior to the repricing, were cancelled and replaced with an
identical number of options. The exercise price for all of the repriced options
is the fair market value of the shares on October 20, 1998. The repriced options
expire on October 20, 2003 and vest 25% per year commencing on October 20, 1999.
Consequently, no employee of the Company retained any vesting already achieved
as a result of his or her previous option grant under the 1997 Plan. A total of
744,115 options were repriced under the 1997 Plan, including 606,615 options
held by executive officers. For additional information regarding repriced
options held by executive officers, see "Summary Compensation Table," footnote 2
and "Ten Year Option/SAR Repricings" above.
This report has been provided by the Compensation Committee of the
Board of Directors of Resource America, Inc.
Carlos C. Campbell, Chairman
P. Sherrill Neff
John S. White
Employment Agreements
The Company has entered into an employment agreement with Edward E.
Cohen, effective as of January 1, 1997, pursuant to which Mr. Cohen serves as
the Chairman of the Board of Directors and Chief Executive Officer of the
Company. The agreement requires Mr. Cohen to devote as much of his business time
to the Company as is necessary to the fulfillment of his duties, although it
permits him to have outside business interests. Under the agreement, Mr. Cohen
will receive base compensation of $350,000 per year, which may be increased by
the Compensation Committee of the Board based upon its evaluation of Mr. Cohen's
performance. Mr. Cohen is eligible to receive incentive bonuses and stock option
grants in amounts to be determined by the Board and to participate in all
employee benefit plans in effect during his period of employment. As required by
the agreement, the Company has established a Supplemental Employment Retirement
Plan ("SERP") for Mr. Cohen's benefit which will pay to Mr. Cohen, upon
retirement after he has reached Retirement Age (defined by the agreement as age
62), a monthly retirement benefit equal to 75% of his Average Compensation
(defined as the average of the salary plus bonus received by Mr. Cohen in the
three most highly compensated years during the previous nine years of
employment), less any amounts payable under any other retirement plan of the
Company in which Mr. Cohen participates. For certain information regarding Mr.
Cohen's compensation during each of the last three fiscal years, see "Executive
Officer Compensation."
11
<PAGE>
The agreement has a term of five years and, until notice to the
contrary, the term is automatically extended so that, on any day on which the
agreement is in effect, it shall have a then-current five year term. The
agreement may be sooner terminated in the event of Mr. Cohen's disability
extending for more than 240 days, death or retirement. Mr. Cohen also has the
right to terminate the agreement upon a change in control or potential change in
control of the Company, and for cause. Otherwise, Mr. Cohen may terminate the
agreement upon 180 days' notice.
The agreement provides the following termination benefits: (i) upon
termination due to death, Mr. Cohen's estate will receive an amount equal to (a)
five times Average Compensation (payable over 36 months), plus (b) to the extent
Mr. Cohen has not received 120 months of SERP benefits, the balance thereof;
(ii) upon termination due to disability, Mr. Cohen will receive a monthly
benefit equal to one-twelfth of the product of (a) Average Compensation and (b)
75%, which will terminate upon the commencement of retirement benefits; (iii)
upon termination by Mr. Cohen for cause, or upon a change in control or
potential change in control, an amount equal to five times Average Compensation
plus continuation of life, health, accident and disability insurance benefits
for a period of 36 months or until Mr. Cohen reaches age 70; and (iv) upon
termination by Mr. Cohen without cause, an amount equal to 25% of the amount
referred to in item (i), above. In the event that any amounts payable to Mr.
Cohen pursuant to items (i) through (iv), above ("Total Benefits"), become
subject to any excise tax imposed under Section 4999 of the Internal Revenue
Code of 1986 (the "Code"), the Company is required to pay Mr. Cohen an
additional sum such that the net amounts retained by Mr. Cohen, after payment of
excise, income and withholding taxes, shall equal Total Benefits.
In October 1999, the Company entered into an employment agreement with
Scott F. Schaeffer, pursuant to which Mr. Schaeffer serves as the Vice Chairman
of the Company. The agreement requires Mr. Schaeffer to devote as much of his
business time to the Company as is necessary to the fulfillment of his duties,
although it permits him to have outside business interests. Under the agreement,
Mr. Schaeffer will receive base compensation of $425,000 per year, which may be
increased by the Compensation Committee of the Board based upon its evaluation
of Mr. Schaeffer's performance. Mr. Schaeffer is eligible to receive incentive
bonuses and stock option grants in amounts to be determined by the Board and to
participate in all employee benefit plans in effect during his period of
employment. For certain information regarding Mr. Schaeffer's compensation
during each of the last three fiscal years, see "Executive Officer
Compensation."
The agreement has a term of three years and, until notice to the
contrary, the term is automatically extended so that, on any day on which the
agreement is in effect, it shall have a then-current three year term. The
agreement may be sooner terminated in the event of Mr. Schaeffer's disability
extending for more than 240 days or death. Mr. Schaeffer also has the right to
terminate the agreement upon a change in control or potential change in control
of the Company, and for cause. Otherwise, Mr. Schaeffer may terminate the
agreement upon 180 days' notice.
The agreement provides the following termination benefits: (i) upon
termination due to death, Mr. Schaeffer's estate will receive an amount equal to
three times Average Compensation (payable over 36 months); (ii) upon termination
due to disability, Mr. Schaeffer will receive a monthly benefit equal to
one-twelfth of the product of (a) Average Compensation and (b) 75%; and (iii)
upon termination by Mr. Schaeffer for cause, or upon a change in control or
potential change in control, an amount equal to three times Average Compensation
plus continuation of life, health, accident and disability insurance benefits
for a period of 36 months. In the event that any amounts payable to Mr.
Schaeffer pursuant to items (i) through (iii), above ("Total Benefits"), become
subject to any excise tax imposed under Section 4999 of the Internal Revenue
Code of 1986 (the "Code"), the Company is required to pay Mr. Schaeffer an
additional sum such that the net amounts retained by Mr. Schaeffer, after
payment of excise, income and withholding taxes, shall equal Total Benefits.
12
<PAGE>
The terms of the Company's employment agreement with Daniel G. Cohen as
of October 1999 are substantially similar to the terms of the Company's
employment agreement with Mr. Schaeffer described above, except that Mr. D.
Cohen serves as President and Chief Operating Officer of the Company. For
certain information regarding Mr. D. Cohen's compensation during each of the
last three fiscal years, see "Executive Officer Compensation."
The terms of the Company's employment agreement with Steven J. Kessler
as of October 1999 are similar to the terms of the Company's employment
agreements with Messrs. Schaeffer and D. Cohen described above, except that Mr.
Kessler serves as Senior Vice President and Chief Financial Officer of the
Company and is not expressly permitted to have outside business interests. Mr.
Kessler's base compensation is $300,000 per year, and Mr. Kessler does not have
a right to terminate the agreement upon a potential change of control of the
Company. For certain information regarding Mr. Kessler's compensation during
each of the last two fiscal years, see "Executive Officer Compensation."
Certain Relationships and Related Party Transactions
In the ordinary course of its business operations, the Company has
ongoing relationships with several related entities, primarily a property
management firm, a bank and Resource Asset Investment Trust ("Resource Asset").
As opportunities have arisen, the Company has purchased commercial mortgage
loans from lenders, or involving borrowers which are affiliated with officers of
the Company. In two instances (excluding sales to Resource Asset) the Company
has sold senior or junior lien interests in commercial loans to purchasers
affiliated with officers of the Company. At September 30, 1999, loans held with
respect to related borrowers or acquired from related lenders constitute 25.8%
($65.0 million), by book value, of the Company's commercial loan portfolio,
while the participation interests sold to related purchasers constituted 0.5%
($1.9 million) of all participation interests with respect to the Company's
commercial loan portfolio. Transactions with affiliates must be approved by the
Company's Board of Directors including a majority of the non-employee directors.
In addition, acquisitions of commercial mortgage loans must be approved by the
Investment Committee of the Board of Directors (which consists of three
non-employee directors). A more detailed description of these relationships and
transactions is set forth below.
Relationship with Brandywine Construction & Management, Inc. ("BCMI").
The properties underlying 26 of the Company's commercial mortgage loans and
investments in real estate ventures are managed by BCMI, a firm in which the
Chairman of the Company is the Chairman of the Board of Directors and a minority
stockholder (approximately 8%). The President of BCMI (or an entity affiliated
with him) has also acted as the general partner, president or trustee of eight
of the borrowers. These loans collectively represent only 2.5% of the Company's
total carried cost for all commercial mortgage loans the Company holds. In
addition, BCMI owns an 11% limited partnership interest in another borrower.
Relationship with Jefferson Bank. Until its acquisition by Hudson
United Bancorp, the Company maintained a normal banking and borrowing
relationship with Jefferson Bank, a subsidiary of JeffBanks, Inc. The Chairman
of the Company and his spouse were officers, directors and principal
stockholders of JeffBanks, Inc., and his spouse was Chairman and Chief Executive
Officer of Jefferson Bank and JeffBanks, Inc. The President of the Company was a
director of Jefferson Bank. Jefferson Bank was also a tenant at one property
which secures a loan held by the Company, and Jefferson Bank subleases a portion
of its space at such property to Resource Asset. The Chairman's spouse serves as
an officer, director and member of the executive committee of Hudson United
Bancorp. The Company anticipates that it will maintain a normal banking and
borrowing relationship with Hudson United Bancorp in the future.
Relationship with Resource Asset. The Company sponsored the formation
of Resource Asset. The Company currently holds approximately 14% of Resource
Asset's outstanding common shares. The spouse of the Chairman of the Company is
Chairman and Chief Executive Officer of Resource Asset. The Company has the
right to nominate one person for election to the Board of Trustees until such
time as its ownership of Resource Asset's outstanding common shares is less than
5%. A Senior Vice President of the Company, who is also a son of the Chairman of
the Company and the brother of its President, currently serves as the Company's
nominee and an officer of Resource Asset.
13
<PAGE>
The Company has engaged in the following transactions with Resource
Asset during the fiscal year ended September 30, 1999:
o In June 1999, the Company acquired a first mortgage loan at
face value from Resource Asset for $2.5 million. The loan is
secured by property in which the Company has held a
subordinate interest since 1991.
o In December 1998, the Company sold a senior lien interest in a
loan at a purchase price of $4.0 million and recognized a gain
of $2.0 million.
o In December 1998, the Company purchased a junior lien interest
in a loan held by Resource Asset in the amount of $4.0
million. The junior lien interest was repaid in June 1999 for
$4.1 million and the Company realized a gain of $135,000.
o The Company and Resource Asset jointly acquired a loan at a
purchase price of $77.0 million of which $10.0 million was
contributed by Resource Asset.
o A senior lien interest sold by the Company to Resource Asset
in fiscal 1998 was repaid in August 1999.
Relationships with Certain Borrowers. The Company has from time to time
purchased loans in which affiliates of the Company are affiliates of the
borrowers.
In September 1998, the Company acquired a loan in the original
principal amount of $91.0 million. In connection with the acquisition of the
loan, the Company acquired the right to transfer the equity interest in the
borrower. Currently, a subsidiary of the Company is the general partner of the
borrower. The Chairman, Vice Chairman, and President of the Company and the
President of BCMI hold a 99% interest in the limited partnership of the general
partner of the borrower. The borrower has entered into an agreement to sell up
to 80% of its limited partnership interests to an unrelated third party. All net
proceeds of such sales will be paid to the Company.
In March 1998, under a plan of bankruptcy, the Company acquired a loan
in the original principal amount of $80.0 million. An order of the bankruptcy
court in effect when the Company acquired the loan required that legal title to
the property underlying the loan be transferred on or before June 30, 1998. In
order to comply with that order and to maintain control of the property, Evening
Star Associates took title to the property on or about June 19, 1998. A
subsidiary of the Company serves as general partner to Evening Star Associates
and holds a 1% interest; the Chairman, Vice Chairman and President of the
Company purchased for $200,000 a 94% limited partnership interest.
The Company holds a loan secured by a property owned by a partnership
in which the Company's Vice Chairman and Chairman, together with the Chairman's
spouse, are among the limited partners. The Company leases its headquarters
space at such property. The lease provides for rents of $114,800 per year
through May 2000.
In December 1996, the Company acquired a loan with a face amount of
$52.7 million from an unaffiliated third party at a cost of $19.3 million. The
property securing such loan was owned by two partnerships: the Building
Partnership, which owned the office building, and the Garage Partnership, which
owned the parking garage. Pursuant to a loan restructuring agreement entered
into in 1993, an affiliate of the holder of the loan was required to hold, as
additional security for the loan, general partnership interests in both the
Building Partnership and the Garage Partnership. The partnership interests in
the Building Partnership and Garage Partnership were assigned to limited
partnerships affiliated with the Company and certain of its officers. In June
1999, the loan was repaid pursuant to the terms of an existing loan
restructuring agreement. The Company received $29.6 million in cash, plus a 50%
interest in the Building and Garage Partnerships. The interest of the Company's
officers was terminated.
Relationships with Certain Lienholders. The Company holds a first
mortgage lien on a hotel property on which a junior mortgage has been held by
another corporation. In January 1999, the junior holder foreclosed on this
property and became the Corporate Owner. An officer of the Company, a son of the
Company's Chairman, is President of the Corporate Owner, and the Chairman of the
Company is Chairman and a minority shareholder of the Corporate Owner. The
Company's interest was not affected by this foreclosure.
14
<PAGE>
In December 1997, the Company purchased from third parties, for an
aggregate of $1.5 million, two loans in the aggregate original principal amount
of $2.0 million and with an aggregate outstanding balance at the time of
purchase of $1.9 million. The loans are secured by an apartment building. The
Company sold a senior lien interest in one of the loans for $1.0 million to a
previously existing limited partnership in which the Chairman and Vice Chairman
of the Company beneficially own a 14.4% interest, reducing the Company's net
investment to $518,000 and leaving the Company with a retained interest in
outstanding loan receivables of $1.0 million (at a book value of $803,000). The
Company recognized a gain of $322,900 on the sale of this loan.
In fiscal 1999, the Company sold, at book value, an $875,000 senior
lien interest in industrial development revenue bonds it had acquired in a prior
year to a limited partnership in which the Chairman and Vice Chairman of the
Company beneficially owned a 22.0% limited partnership interest.
In June 1996, for an investment of $2.4 million, the Company acquired
from third parties a loan in the original principal amount of $3.3 million (and
with a then outstanding balance of $3.3 million). The Company sold, at book
value, a junior lien interest in the loan for $875,000, to a previously existing
limited partnership in which the Chairman and Vice Chairman of the Company
beneficially own a 21.3% limited partnership interest. The junior lien interest
was paid off in May 1999. Accordingly, the Chairman and Vice Chairman of the
Company have no remaining interest in this asset.
Performance Graph
The following graph compares the cumulative total stockholder return on
the Company's Common Stock with the cumulative total return of two other stock
market indices: the Nasdaq United States Composite (National Market System only)
and the Nasdaq Financial.
<TABLE>
<CAPTION>
Comparison of five year cumulative total return *
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Nasdaq U.S. composite 100.00 138.07 163.85 224.97 228.77 371.69
Nasdaq Financial 100.00 126.56 156.70 247.03 227.77 247.37
Resource America, Inc. 100.00 160.18 283.66 1,165.56 688.85 514.93
</TABLE>
* Total return for each of the last five fiscal years ending September 30.
Assumes $100 was invested on October 1, 1994 in the Company's Common
Stock or in the indicated index and that cash dividends were reinvested
as received.
15
<PAGE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors (the "Committee")
is responsible for setting and administering compensation programs for the
Company's executives, including the following:
o setting policies with respect to compensation for executives;
o setting pay levels for all named executive officers;
o administering the Company's Key Employee Stock Option plans
and making appropriate awards of options; and
o monitoring and determining such other compensation matters as
may be assigned to the Committee by the Board of Directors.
The Committee is comprised of three non-employee directors; Messrs.
Campbell, Neff and White.
The Company's compensation philosophy and objectives are driven by the
desire to:
o compensate and reward executives for their contribution to the
historical success of the Company; and
o provide suitable compensation packages to attract, motivate
and retain talented executives in a very competitive
environment.
The executive compensation program is designed to reward performance
that is directly relevant to the Company's short-term and long-term success and
goals and as such is structured in three components: base salary, annual
bonuses, and long term incentives.
Base Salary
Base salaries for executive officers are determined in part by pay
practices in unaffiliated companies and the Committee's assessment of individual
performance relative to responsibilities and objectives for each executive. Base
salaries are not intended to compensate individuals for extraordinary
performance or for above average Company performance.
Bonus Plan
Executives are eligible to receive annual bonuses, which are generally
based on the overall Company performance during the preceding year and the
individual's specific contribution to that performance. The Company does not
have a defined bonus pool; however, during the past three years the Company's
practice has been to limit the pool to no more than ten percent (10%) of the
reported net income of the Company for the preceding year. Allocation of the
amount available for annual bonus payments is at the discretion of the
Committee. No formula performance measures were utilized in establishing the
amount of the bonus awards; however, the Committee considers individual
contribution to the overall performance of the Company and performance relative
to expectations.
Long Term Incentives
General. Long term incentives are designed to focus executives on the
long term goals and performance of the Company and to provide a reward directly
tied to stockholder return: the performance of the Company's Common Stock. The
particular plans are intended to encourage the participants to strive to achieve
the long term success of the Company and to remain with the Company in order to
fully benefit from the plans.
16
<PAGE>
Stock Options. Stock options are issued periodically to key employees
at an exercise price of no less than the then current market price of the
Company's Common Stock, have a life up to ten (10) years and uniformally vest to
the executive at twenty-five percent (25%) of the amount awarded on each
anniversary of their issuance. Allocation of available options is again at the
discretion of the Committee and is determined by potential contribution to, or
impact upon, the overall performance of the Company by the executive.
Employee Stock Ownership Plan. In 1989 the Company established the
Resource America, Inc. Employee Stock Ownership Plan for the benefit of all
qualified employees. All employees, including executive officers, are allocated
shares from an available pool in proportion to their relative compensation.
While the allocations from this plan are determined solely by a predetermined
and required formula in accordance with ERISA, the intent was, and remains, to
reward all employees, including executives, based on the long term success of
the Company as measured by the stockholder return.
Savings Plan. The 401(k) Plan offers eligible employees the opportunity
to make long-term investments on a regular basis through salary contributions,
which are supplemented by matching Company contributions in the form of cash or
Company Common Stock. During fiscal year 1999, the Company matched employee
contributions 50% in cash or 100% in Company Common Stock. While participation
in this plan is at the discretion of the qualified employee, the intent again
was, and remains, to reward all employees, including executives, based on the
long term success of the Company as measured by the return to stockholders.
Chief Executive Officer Compensation
In evaluating the performance and setting the total compensation
package for Edward E. Cohen the Committee meets without that individual present.
In determining compensation for fiscal year 1999 the Committee took particular
note of the continued growth in the Company's revenues ($81.1 million in fiscal
1998 compared to $32.9 million in fiscal 1997), net income ($27.6 million in
fiscal 1998 compared to $11.0 million in fiscal 1997) and stockholder equity
($236.5 million in fiscal 1998 compared to $64.8 million in fiscal 1997). The
effectiveness of the leadership provided by Mr. Cohen has allowed the Company to
change its focus from its historic energy activities to niche finance
opportunities, specifically in real estate finance, equipment leasing and energy
finance, where the Company can take advantage of its specialized skills to
generate attractive returns, which ultimately are measured in the appreciation
of the Company's Common Stock. Mr. Cohen is employed pursuant to the agreement
described in "Employment Agreements" contained elsewhere in the proxy statement
of which this report is a part. Applying the considerations noted above, the
Committee awarded Mr. Cohen a bonus of $600,000 and increased his salary by
approximately $100,000.
This report has been provided by the Compensation Committee of the
Board of Directors of Resource America, Inc.
Carlos C. Campbell, Chairman
P. Sherrill Neff
John S. White
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors does not
intend to present and has not been informed that any other person intends to
present any other matters for action at the Meeting. However, if other matters
do properly come before the Meeting, it is the intention of the persons named as
proxies to vote upon them in accordance with their best judgment.
Except as hereinabove stated, all shares represented by valid proxies
received will be voted in accordance with the provisions of the proxy.
17
<PAGE>
Upon the recommendation of the Audit Committee, approved by the Board
of Directors, Grant Thornton LLP served as the Company's independent auditors
during fiscal year 1999. The Company does not anticipate that a representative
of Grant Thornton LLP will be present at the Meeting. The Board of Directors
anticipates that Grant Thornton LLP will be re-appointed as the Company's
independent auditors for fiscal year 2000 during a regular meeting of the Board
of Directors.
ANNUAL REPORT AND REPORT ON FORM 10-K
The Company's 1999 Annual Report to Stockholders including the
financial statements and management's discussion and analysis of financial
condition and results of operations for the year ended September 30, 1999, is
being sent to stockholders of record as of March 15, 2000 with this proxy
statement. Stockholders of record as of February 25, 2000, and beneficial owners
of the Company's Common Stock on that date, may obtain from the Company, without
charge, a copy of the Company's most recent Annual Report on Form 10-K filed
with the Securities and Exchange Commission, exclusive of the exhibits thereto,
by a request therefor in writing. Such requests should be directed to the
Company, at its Philadelphia address stated herein, and to the attention of the
Secretary. Beneficial owners shall include in their written requests a good
faith representation that they were beneficial owners of the Company's Common
Stock on February 25, 2000.
STOCKHOLDER PROPOSALS
Under rules promulgated by the Securities and Exchange Commission,
holders of Common Stock who desire to submit proposals for inclusion in the
proxy statement of the Company to be utilized in connection with the 2000 annual
meeting of stockholders, subject to compliance with the eligibility standards
specified in such rules, must submit such proposals to the Secretary of the
Company no later than November 17, 2000.
By order of the Board of Directors,
Michael S. Yecies, Secretary
March 15, 2000
18
<PAGE>
RESOURCE AMERICA, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF RESOURCE AMERICA, INC.
The undersigned hereby constitutes and appoints Edward E. Cohen and
Scott F. Schaeffer, or either of them, as and for his proxies, each with the
power to appoint such proxy's substitute, and hereby authorizes them, or either
of them, to vote all of the shares of Common Stock of Resource America, Inc.
held of record by the undersigned on February 25, 2000, at the Annual Meeting of
Stockholders of Resource America, Inc. to be held Tuesday, April 18, 2000 and at
any and all adjournments thereof as follows:
<PAGE>
I plan to attend
the meeting
+-+
+-+
1. ELECTION OF DIRECTORS.
The nominees for election are Daniel G. Cohen and John S. White.
<TABLE>
<S> <C> <C>
FOR all nominees listed above (except Withhold Authority to vote for To withhold authority
as marked to the contrary at the right) all nominees listed above to vote for any individual
nominee, write that nominee's
name in the space provided
below.
+-+ +-+
+-+ +-+ -----------------------------
</TABLE>
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY PROPERLY BE BROUGHT BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
+-+ +-+ +-+
+-+ FOR +-+ AGAINST +-+ ABSTAIN
This proxy, when properly executed, will be voted in the manner
described herein by the undersigned. If no direction is made, this proxy will be
voted FOR all nominees listed. Please sign exactly as your name appears on this
proxy card. When shares are held by joint tenants, both should sign. When
signing as an attorney, executor, administrator, trustee, or guardian, please
give full title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated: , 2000
------------------
- - --------------------------------
Signature of stockholder
- - --------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
