WEST COAST REALTY INVESTOR, INC.
5933 West Century Boulevard
Ninth Floor
Los Angeles, California 90045
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MONDAY JUNE 23, 1997
To the Shareholders of West Coast Realty Investors, Inc.:
Notice is hereby given that the annual meeting of stockholders of West
Coast realty Investor, Inc. (the "Company") will be held at the Company's
offices at 5933 West Century Boulevard, Ninth Floor, Los Angeles, California
90045 on June 23, 1997 at 11:30 A.M., local time (the "Annual Meeting") for the
following purposes:
1. To elect five (5) directors to serve until the Annual Meeting of
Stockholders in 1998;
2. To ratify the Company's selection of BDO Seidman LLP as the
Company's independent auditors for the fiscal year ending
December 31, 1997; and
3. To ratify the Company's Advisory Agreement with its Advisor, West
Coast Realty Advisors, Inc. for the period of July 1, 1997 to June
30, 1998.
4. To transact such other business as may properly come before the
Annual Meeting or any postponements or adjournments thereof.
The board of Directors has fixed the close of business on April, 1997 as
the record date for determining the stockholders entitled to receive notice of
and to vote at the Annual Meeting.
You are cordially invited to the attend the Annual Meeting. Whether or not
you plan to attend the annual Meeting, you are urged to promptly date and sign
the enclosed proxy and mail it to the Company in the enclosed envelope, which
requires no postage if mailed in the United states. Return of your proxy does
not deprive you of your right to attend the Annual Meeting and to vote your
shares in person.
By Order of the Board of Directors
PHILIP N. GAINSBOROUGH
Chairman of the Board of Directors
May 21, 1997
Los Angeles, California
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PROXY
WEST COAST REALTY INVESTORS, INC.
1997 ANNUAL MEETING OF STOCKHOLDERS
JUNE 23, 1997
The undersigned stockholder of West Coast Realty Investors, Inc. (the "Company")
hereby nominates, constitutes and appoints Philip N. Gainsborough and, W. Thomas
Maudlin, Jr., and each of them, the agent, and proxy of the undersigned, each
with full power of substitution, to vote all shares of Common Stock of the
company which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held at the Company's offices at 5933 West
Century Boulevard, Ninth floor, Los Angeles, California 90045 on Monday, June
23, 1997 at 11:30 A.M. local time, and at any and all postponements or
adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present thereat, as follows:
1. ELECTION OF DIRECTORS. Electing Philip N. Gainsborough, W. Thomas
Maudlin, Jr., James W. Coulter, George Young and Steve Bridges to serve on the
Board of Directors of the Company until the 1998 Annual Meeting of Stockholders
and until their respective successors are elected and have qualified.
AUTHORITY GIVEN _______ AUTHORITY WITHHELD ________
(INSTRUCTIONS: To grant authority to vote for all of the nominees named above,
check the "Authority Given" box; to withhold authority for any individual
nominee, check the "Authority Given" box and cross out the name of the
individual above; to withhold authority for all nominees, check the "Authority
Withheld" box. Failure to check either box will be deemed a grant of authority
to vote for all of the nominees named above.)
2. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS. Ratifying the
selection of BDO Seidman, LLP to serve as the Company's independent auditors for
the fiscal year ending December 31, 1997.
FOR ______ AGAINST ______ ABSTAIN ______
3. RATIFICATION OF ADVISORY AGREEMENT. Ratifying the Advisory Agreement
between the Company and West Coast Realty Advisors, Inc. for the period July 1,
1997 to June 30, 1998.
FOR _______ AGAINST _______ ABSTAIN _______
4. OTHER BUSINESS. To transact such other business as may properly come
before the annual Meeting or any postponements or adjournments thereof.
(Please Sign and Date on Other Side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" ON PROPOSALS NO.2 AND
NO.3. THIS PROXY CONTAINS AUTHORITY TO AND SHALL BE VOTED IN ACCORDANCE WITH
THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS UNLESS A CONTRARY INSTRUCTION IS
INDICATED, IN WHICH CASE, THE PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH
INSTRUCTIONS. ON ALL MATTERS, IF ANY, PRESENTED AT THE ANNUAL MEETING, THIS
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
DIRECTORS PLEASE SIGN AND DATE BELOW.
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Date:
I do do not expect to attend the meeting.
(Signature of Stockholder)
(Signature of Stockholder)
(Please date this proxy and sign your name as it
appears on the stock certificates or the Company's
stock ownership records. Executors,
administrators, trustees, etc. should give their
full titles. All joint owners should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, AND MAY BE REVOKED
PRIOR TO ITS EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY AN INSTRUMENT
REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE OR BY
APPEARING AND VOTING IN PERSON AT THE MEETING.
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WEST COAST REALTY INVESTORS, INC.
5933 W. CENTURY BOULEVARD
NINTH FLOOR
LOS ANGELES, CALIFORNIA 90045
PROXY STATEMENT
The 1997 Annual Meeting of Stockholders (the "Annual Meeting") of West
Coast Realty Investors, Inc. (the "Company") will be held at the Company's
offices at 5933 West Century Boulevard, Ninth Floor, Los Angeles, California
90045 on Monday, June 23, 1997, 11:30 A.M. Pacific Daylight time, for the
following purposes:
1. To elect five directors to serve until the Annual Meeting of
Stockholders in 1997 (the "Director Proposal");
2. To ratify the Company's selection of BDO Seidman, LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997 (the
"Auditor Proposal"); and
3. To consider and vote on the ratification of the Advisory Agreement
between the Company and West Coast Realty Advisors, Inc., an affiliate
of the Company (the "Advisor Proposal") (the "Director Proposal," the
"Auditor Proposal" and the Adviser Proposal" are hereinafter
collectively referred to as the "Annual Meeting Proposals"); and
4. To transact such other business as may properly come before the Annual
Meeting or any postponements or adjournments thereof.
COMMON STOCK PROXY SOLICITATION
GENERAL
This Proxy Statement (the "Proxy Statement") is furnished to stockholders
of the Company's common stock, $0.01 par value per share (the "Common Stock") in
connection with the solicitation of proxies by and on behalf of the Board of
Directors of the Company (the "Board") for use at the Annual Meeting, and at any
postponements or adjournments thereof. The approximate date on which this Proxy
Statement and accompanying form of proxy (the "Proxy") are first being mailed to
stockholders is May 29, 1997.
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A holder of Common Stock wishing to vote for the Annual Meeting
Proposals should complete and sign the enclosed Proxy and mail or deliver such
Proxy to the Secretary of the Company at the address set forth above. Holders
may also vote their shares of Common Stock in person at the Annual Meeting.
Holders of Common Stock whose purchase is registered after the Annual Meeting
Record Date and who wish to vote on the Annual Meeting Proposals must arrange
with their seller to receive a proxy from the holder of record on the Annual
Meeting Record Date of such Common Stock.
Proxies, in the form attached, are being solicited by the Board for use at
the Annual Meeting. The persons named as proxies were selected by the Board and
are directors and/or officers of the Company. Proxies may be revoked by a
stockholder prior to their exercise by filing with the Secretary of the Company
a written instrument revoking the same or a duly executed proxy bearing a later
date. In addition, a stockholder who attends the Annual Meeting may vote his
shares personally and thereby revoke his Proxy at that time. All shares of
Common Stock represented by valid Proxies received pursuant to this
solicitation, and not subsequently revoked, will be voted as provided on the
Proxy.
The expense of preparing, printing and mailing this Proxy Statement and the
Proxies solicited hereby will be borne by the Company. In addition to the use
of the mails, Proxies may be solicited by officers, directors and regular
employees of the Company, without extra remuneration, in person, by telephone,
telegraph or otherwise.
The holders of the Company's Common Stock are not entitled to any appraisal
rights in connection with the matters submitted for their approval.
For the interests of certain directors and executive officers, and their
associates (as such term is defined in Rule 14a-1(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) in the Company, see "Security
Ownership of Certain Beneficial Owners and Management" and "Certain
Relationships and Related Transactions." The non-independent directors and
executive officers, and their affiliates, have an interest in the matters to be
acted upon at the Annual Meeting, other than the Auditor Proposal.
STOCKHOLDER PROPOSALS
The next annual meeting of stockholders will be held in June 1998. It is
presently contemplated that the 1998 Annual Meeting of Stockholders will be held
on June 10, 1998. Stockholders who wish to have proposals considered for
inclusion in the Company's proxy statement relating to the 1998 Annual Meeting
should submit them to the Company at its principal executive offices not later
than February 10, 1998.
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VOTE REQUIRED FOR APPROVAL
A majority of the votes cast at the Annual Meeting, if a quorum is present,
will be sufficient to approve the Auditor Proposal and the Advisor Proposal. A
plurality of all of the votes cast at the Annual Meeting, if a quorum is
present, will be sufficient to elect a director.
The presence, in person or by proxy, of a majority of all of the
outstanding shares of the Company's Common Stock is necessary to constitute a
quorum to transact business at the Annual Meeting. Those shares of Common Stock
present, in person or by proxy, including shares of Common Stock as to which
authority to vote on any Annual Meeting Proposal is withheld and shares of
Common Stock abstaining as to any Annual Meeting Proposal, will be considered
present at the Annual Meeting for purposes of establishing a quorum.
With respect to each of the Annual Meeting Proposals, shares of Common
Stock as to which authority to vote has been withheld (to the extent withheld)
will be considered negative votes. With respect to the Auditor Proposal and the
Advisory Proposal, pursuant to Delaware law, abstentions will be considered
present and entitled to vote and thus will have the effect of a vote against
such proposals. With respect to the election of directors, pursuant to Delaware
Law, abstentions will have no legal effect since a plurality of all of the votes
cast will be sufficient to elect a director.
PERSONS ENTITLED TO VOTE AT THE ANNUAL MEETING
The Board has fixed the close of business on April 30, 1997 as the Annual
Meeting Record Date for the determination of stockholders entitled to receive
notice of and to vote at the Annual Meeting. Only holders of record of the
Company's Common Stock at the close of business on the Annual Meeting Record
Date will be entitled to notice of, and to vote at, the Annual Meeting. At the
close of business on the Annual Meeting Record Date, the Company had outstanding
shares of Common Stock.
Each share of Common Stock is entitled to one vote on all matters which may
come before the Annual Meeting. Pursuant to Delaware law and the Company's
bylaws, each share of Common Stock may be voted for as many individuals as there
are directors to be elected and for whose election the share is entitled to be
voted. The Company's stockholders are not entitled to cumulate votes with
respect to the election of directors.
At the close of business on the Annual Meeting Record Date there were 831
record holders of Common Stock.
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CERTAIN ARRANGEMENTS REGARDING VOTING AT THE ANNUAL MEETING
The Company has been informed by the holders of approximately 1.6% of the
Company's Common Stock entitled to vote at the Annual Meeting that such holders
intend to vote in favor of the Auditor Proposal and Advisory Proposal and to
vote "for" the election of each of the five director nominees at the Annual
Meeting. See "Proposal No. 1 -- Election of Directors." West Coast Realty
Advisors, Inc., the Advisor to the Company owns 22,556 shares of the Company's
Common Stock and is entitled to 22,556 votes or approximately 1.2% of the
1,815,579 votes that may be cast at the Annual Meeting. Michael G. Clark owns
approximately 143 shares of common stock or less than one percent of the
1,815,579 votes that may be cast at the Annual Meeting.
See "Security Ownership of Certain Beneficial Owners and Management" for a
table of the beneficial ownership of the Company's Common Stock by (i)
beneficial owners of more than 5% of the Company's Common Stock which are known
to the Company, (ii) each director of the Company, (iii) each executive officer
of the Company, and (iv) all executive officers and directors of the Company as
a group.
ACTION TO BE TAKEN UNDER PROXY
All Proxies in the accompanying form that are properly executed and
returned will be voted at the Annual Meeting and any postponements or
adjournments thereof in accordance with the specifications thereon or, if no
specifications are made, will be voted:
(i) for the election of the five nominees described herein;
(ii) for ratification of the Company's selection of BDO Seidman, LLP as the
Company's independent auditors for the fiscal year ending December 31,
1997; and
(iii) for ratification of the Advisory Agreement between the Company and
West Coast Realty Advisors, Inc.
The Board of Directors knows of no matters, other than those stated above,
to be presented and considered at the Annual Meeting. If, however, any other
matters properly come before the Annual Meeting or any postponements or
adjournments thereof, it is the intention of the persons named in the enclosed
Proxy to vote such Proxy in accordance with their judgment on such matters. The
persons named in the enclosed Proxy may also, if a quorum is not present, vote
such Proxy to adjourn the Annual Meeting. Promptly after the Annual Meeting,
the Company will announce the results of the voting on the Annual Meeting
Proposals by means of a letter to the Shareholders.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
It is intended that the persons named in the Proxy will, unless otherwise
instructed, vote for the election of the five nominees listed directly below to
serve as directors until the next Annual Meeting of Stockholders following their
election and until their respective successors are elected and have qualified.
If any nominee, for any reason presently unknown, cannot be a candidate for
election, the shares of Common Stock represented by valid Proxies will be voted
in favor of the remaining nominees and may be voted for the election of a
substitute nominee recommended by the Board of Directors. If the Board does not
recommend a substitute nominee, then at such time as the Board selects a
qualified individual to serve as a director of the Company in place of such
candidate, such individual shall be duly elected by the Board of Directors to
serve as a director until the 1998 Annual Meeting of Stockholders. See "Common
Stock Proxy Solicitation -- Certain Arrangements Regarding Voting at the Annual
Meeting" above for a description of certain arrangements regarding voting at the
Annual Meeting.
NOMINEES TO BE CONSIDERED BY
HOLDERS OF COMMON STOCK TERM AS DIRECTOR
Philip N. Gainsborough(1) Until 1998 Annual Meeting
W. Thomas Maudlin, Jr.(1) Until 1998 Annual Meeting
James W. Coulter(2) Until 1998 Annual Meeting
George Young(1) Until 1998 Annual Meeting
Steve Bridges(1) Until 1998 Annual Meeting
All nominees have consented to being named in the Proxy Statement and to
serve if elected. Stockholders of the Company will have an opportunity on their
proxy cards to vote in favor of one or more director nominees while withholding
their authority to vote for one or more director nominees.
(1) Has been a director since 1989.
(2) Has been a director since 1992.
INFORMATION CONCERNING CURRENT DIRECTORS AND DIRECTOR NOMINEES
Please see "Management" for information concerning the Company's current
directors (all of whom are nominees for re-election) and the attendance of
certain Board members at various Board meetings. The information under
"Management" with respect to the principal occupation or employment of each
nominee and the name and principal business of the corporation or other
organization in which such occupation or employment is, or has been, carried on,
and other affiliations and business experiences during the past five years, has
been furnished to the Company by the respective nominees. Neither the Company
nor any of the director nominees are party to any litigation, nor is any
litigation threatened involving the Company or any of the director nominees.
<PAGE>
VOTE REQUIRED
A plurality of all of the votes cast at the Annual Meeting, if a quorum is
present, will be sufficient to elect a director. See "Common Stock Proxy
Solicitation -- Vote Required For Approval" above.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Stockholders of the Company are being asked to consider a proposal to
ratify the Company's selection of BDO Seidman, LLP as the Company's independent
auditors for the fiscal year ending December 31, 1997. BDO Seidman, LLP served
as the Company's auditors for the fiscal years ended December 31, 1989 through
1996.
Representatives of BDO Seidman, LLP are not expected to attend the Annual
Meeting.
There have been no changes in or disagreements with accountants on
accounting and financial disclosure during the Company's fiscal year ended
December 31, 1996.
VOTE REQUIRED
A majority of the votes cast at the Annual Meeting, if a quorum is
present, will be sufficient to ratify the selection of BDO Seidman, LLP as the
Company's independent auditors for the fiscal year ending December 31, 1996.
See "Common Stock Proxy Solicitation -- Vote Required For Approval" above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 2
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF ADVISORY AGREEMENT
The Stockholders of the Company are being asked to consider a proposal to
ratify and approve the Advisory Agreement between the Company and West Coast
Realty Advisors, Inc. (the "Advisor") for the year July 1, 1997 to June 30,
1998. The Advisor has served as the Advisor to the Company since the Company's
inception in 1989.
ADVISORY AGREEMENT
The Advisory Agreement was renewed until June 30, 1997, by a majority vote
of the Company's Stockholders in June, 1996. The Advisory Agreement is not
assignable without the consent of the parties, except for assignments by the
Advisor to a corporation or other person which controls, is controlled by or is
under common control with the Advisor, or by either the Advisor or the Company
to a successor of the business of either of the parties. The Advisory Agreement
may be terminated by the Advisor on 120 days' written notice, or by the
Directors, the Independent Directors or the Stockholders on 60 days' written
notice. If for any reason the Advisory Agreement is terminated, the Directors,
subject to Stockholders ratification, will appoint a new Advisor and the Company
has agreed to change its name to one which does not include "Associated Plan-
ners", "West Coast Realty" or any similar words.
Under the terms of the Advisory Agreement, the Advisor undertakes to use
its best efforts to present an investment program consistent with the investment
policies and objectives of the Company and to obtain investments suitable to
such investment program. In performance of this undertaking, but at all times
subject to the continuing and exclusive authority of the Directors over the
management of the Company, the Advisor will: (i) obtain or furnish and supervise
the performance of such ministerial functions in connection with the
administration of the day-to-day operations of the Company as may be agreed upon
by the Advisor and the Directors; (ii) serve as the Company's investment and
financial advisor and provide research, economic and statistical data with
respect to the making, holding, administration and disposition of the Company's
investments; (iii) investigate, select and oversee outside property managers and
other independent third parties (e.g., consultants, developers, brokers,
appraisers, etc.); (iv) subject to Board approval, make investments consistent
with the policies and provisions of the Company; (v) advise in connection with
negotiations by the Company with investment banking firms, securities brokers or
dealers and other institutions or investors for public or private sales of
securities of the Company, or obtain loans for the Company; and (vi) provide, at
the Company's expense, office space, office furnishings, personnel and other
overhead items necessary and incidental to the Company's business and
operations.
The Advisor will provide real estate brokerage services in the
acquisition, refinancing or sale of properties by the Company. The Advisor may
utilize the services of its affiliates acting for the Company or independent
brokers acting for sellers of properties to the Company. The Advisor will
receive Acquisition Fees and Acquisition Expenses for these property acquisition
services. The Advisor will also receive a real estate commission for services
rendered in connection with the refinancing or sale of properties.
<PAGE>
The Advisory Agreement provides for an Advisory Fee for regular advisory
services rendered by the Advisor, and a Subordinated Incentive Fee in any fiscal
year that a Property of the Company is sold, financed or refinanced.
Pursuant to the Advisory Agreement, the Advisor is to pay certain
employment expenses of its senior executives (Chairman, President, Executive and
Senior Vice Presidents and directors), office expenses and other miscellaneous
administrative expenses not relating to the Advisor's performance of its
functions under the Advisory Agreement. The Company will be required to pay its
allocable share of all other expenses at their cost to the Advisor. Within 60
days after the end of each calendar year, the Advisor will refund to the Company
the amount, if any, by which the Operating Expenses of the Company during such
calendar year exceeded the greater of (a) 2% of the Average Invested Assets
(which is generally defined to mean the book value of the Company's real estate
interests less non-cash items) or (b) 25% of Net Income (which is generally
defined as the net profits of the Company) (excluding the gain from the sale of
the Properties for which the Advisor received a Subordinated Incentive Fee).
Neither the Advisor nor any of its officers and directors nor their
Affiliates will have any obligation to give to the Company a prior right to
acquire or invest in any investment opportunities which may be available to
them. The Advisor will not make investments for its own account of the
character suitable for investment by the Company while the Company has
sufficient funds available to make the investment. The Advisor and its officers
and directors intend, to the extent consistent with the provisions of statutes,
regulations and case law governing their activities, to provide the Company with
access to review investment opportunities generated by them, which are
consistent with the Company's investment policies.
The foregoing is only a summary of the Advisory Agreement which is
incorporated herein by this reference. Copies of the Advisory Agreement have
not been provided to stockholders. The Company will, however, provide, without
charge, upon written or oral request, by first class mail within one business
day of such request by a stockholder receiving this Proxy Statement, a copy of
the Advisory Agreement. Requests should be made to Neal E. Nakagiri, Secretary,
West Coast Realty Investors, Inc., 5933 West Century Boulevard, Ninth Floor, Los
Angeles, California 90045, Telephone: (310) 337-9700.
THE ADVISOR
The Advisor was organized in 1983 and is an affiliate of the Company. In
order to obtain the services of persons having substantial real estate and
financial experience, there are no restrictions on the business activities of
Advisor or any of its officers, directors or employees, and the Advisor and such
persons are free (with certain exceptions) to engage in other business
activities related to real estate investments.
The Advisor will advise the Company and oversee its investments and
operations, subject to the direction of the Company's Directors. The Advisor's
office is located at 5933 W. Century Boulevard, Ninth Floor, Los Angeles,
California 90045 and its telephone number is (310) 337-9700.
<PAGE>
The principal executive officers, directors and key employees of the
Advisor are as follows:
Philip N. Gainsborough............... Director and Chairman of the Board
W. Thomas Maudlin, Jr................ Director and President
Neal E. Nakagiri..................... Secretary
Michael G. Clark..................... Director and Treasurer
For a description of the occupations and affiliations of Messrs.
Gainsborough, Maudlin, Nakagiri, and Clark, see the "Management" section
contained elsewhere in this Proxy Statement.
ADVISOR COMPENSATION
The Advisor or its affiliates are entitled to receive the following types
of compensation.
Acquisition Fees and Acquisition Expenses. The Advisor and/or an
Affiliate will receive Acquisition Fees (which are defined generally to mean the
fees and commissions paid by any person to any person in connection with the
investigation, selection or purchase of real estate by the Company) and
Acquisition Expenses (which are defined generally to mean those expenses
incurred in the acquisition of properties by the Company, such as legal fees,
travel fees, title insurance, etc.) in an amount which shall not exceed a
maximum of six percent (6%) of the purchase price of the property being
acquired. The total amount of Acquisition Fees and Acquisition Expenses which
may be paid by one person to another person shall not exceed six percent (6%) of
the purchase price of the properties, no matter how paid. Acquisition Fees paid
to the Advisor will be reduced by all real estate brokerage fees paid by either
the seller or the Company to any person in connection with the transaction. In
no event will the amount of Acquisition Fees and Acquisition Expenses paid
exceed the lesser of the percentages set forth above or the competitive
compensation which would be paid to a real estate professional rendering similar
services.
If the Company sells a Property and the proceeds from such sale are
reinvested in the acquisition of another Property, no Acquisition Fees or
Acquisition Expenses will be paid to the Advisor or an Affiliate upon the
acquisition by the Company of the new property.
Disposition Services. The Company will pay a real estate commission to
the Advisor and/or an affiliate for selling the Company's properties. The
maximum real estate commission to be paid will be equal to the lesser of 3
percent of the gross sales price of a property or the normal and competitive
rate charged by unaffiliated parties rendering similar services.
<PAGE>
If, on the disposition of a property, a real estate commission is paid to
an unaffiliated third party in addition to the Advisor and/or an affiliate, the
maximum total real estate commission paid to the Advisor shall equal the lesser
of one-half of the brokerage commission paid, or 3 percent of the gross sales
price of the property. However, the total real estate commission paid by the
Company shall not exceed the lesser of the reasonable and competitive commission
for such property or an amount equal to six (6) percent of the gross sales price
of the property.
Advisory Fee. Commencing July 1, 1997, the Advisor began receiving
quarterly, an annualized fee equal to one percent of the amount of Invested
Assets. (Invested Assets are defined generally as the book value of the real
estate owned by the Company). The Advisory Fee is not paid unless Shareholders
have received a noncumulative, non-compounded Dividend for such quarter equal to
a seven percent (7%) per annum return on Shareholders Adjusted Price Per Share
(which is defined generally as the price paid for the Shares less the Dividends
paid or deemed paid from the sale, financing or refinancing of properties) prior
to adjustment as a result of the Dividend paid. Furthermore, the Advisor may
elect to waive collection of all or a portion of the fee, and has done do in the
past. For the six months ended December 31, 1996, the Advisor waived collection
of $44,061 out of a possible $74,361 in fees (or 59%). For the three months
ended March 31, 1997, the Advisor waived collection of $26,043 of fees out of a
possible $41,043 (or 63%).
Prior to July 1, 1996, the Advisory Fee payable to the Advisor was an
annualized fee, paid quarterly, equal to two percent (2%) of the first
$5,000,000 of Invested Assets, one and one-half percent (1-1/2%) of the next
$5,000,000 of Invested Assets, and one percent (1%) of the remaining amount of
Invested Assets, subordinated to a quarterly payment to Shareholders of a
noncumulative, noncompounded Dividend for said quarter equal to eight percent
(8%) per annum on Shareholder's Adjusted Price Per Share, prior to adjustment as
a result of the Dividend paid. In January 1996, the Directors, including the
unanimous vote of the Independent Directors, amended the Advisory Fee to be paid
as described in the immediately preceding paragraph. The Directors believe the
change in the amount of Advisor's fee is fair to the Company since it reduces
the Advisory Fee on the first $10,000,000 of the Company's Invested Assets, even
though the required amount of noncumulative noncompounded quarterly Dividend
payment to Shareholders, which must be attained before the payment of any
Advisory Fee, has been reduced from eight percent (8%) to seven percent (7%).
Financing Services. The Advisor will receive compensation for services
rendered in securing additional or replacement financing on the Company's
properties and in obtaining unsecured financing. The compensation paid to the
Advisor and/or an affiliate will be determined by the Independent Directors
based on terms and at rates which are reasonable, fair and competitive with like
activities and services from unaffiliated parties.
<PAGE>
Subordinated Incentive Fee. The Advisor will receive a Subordinated
Incentive Fee on the sale, financing or refinancing of the Company's properties.
The amount of the Subordinated Incentive Fee to be paid will be determined after
the sale, financing or refinancing of a specific property has been made and will
equal a maximum of fifteen percent (15%) of the amount of Cash From Sales and
Refinancing (which is generally defined as the net cash remaining from the sale
of a property after payment of the expenses related to such sale and any debt
applicable to the property) remaining after the Company has received proceeds
from the sale or refinancing of such specific property in an amount equal to
either Offering Proceeds (which is defined generally as the amount of funds used
from the sale of Shares to purchase the property) or Reinvestment Proceeds
(which is generally defined as the amount of net cash received from the sale of
a Property which is reinvested in another Property) (such proceeds are deemed to
be a Distribution of Cash Available From Sales or Refinancing to Shareholders)
and Shareholders have received an amount which, when added to all prior
Distributions paid to Shareholders equals one hundred percent (100%) of their
Adjusted Price Per Share plus a cumulative non-compounded return on their
Adjusted Price Per Share equal to eight percent (8%) per annum.
1996 Advisor Compensation. During 1996, the Company paid the Advisor
$78,177 for Acquisition Fees. Of this amount, $16,883 in Acquisition Fees was
paid to an affiliate of the Advisor, Descolin, Inc. which is owned by the
Company's President and Director, W. Thomas Maudlin, Jr. The Company paid the
Advisor $30,300 in Advisory Fees during 1996. See "Certain Relationships and
Related Transactions."
VOTE REQUIRED
A majority of the votes cast at the Annual Meeting, if a quorum is
present, will be sufficient to ratify the approval of the Advisory Agreement for
the period July 1, 1997 to June 30, 1998. See "Common Stock Proxy Solicitation
- -- Vote Required for Approval" above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 3.
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any other matter that may properly
come before the Annual Meeting. If any other matter not mentioned in this Proxy
Statement is brought before the Annual Meeting, the persons named in the
enclosed form of Proxy will have discretionary authority to vote all Proxies
with respect thereto in accordance with their judgment and applicable law.
STOCKHOLDERS ARE URGED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE
APPRECIATED.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors (all of whom are nominees for re-election) and officers of the Company
as of April 30, 1997:
NAME AGE POSITIONS AND OFFICES HELD
Philip N. Gainsborough... 58 Director and Chairman of the Board
W. Thomas Maudlin, Jr.... 60 Director and President
Neal E. Nakagiri......... 43 Secretary
Michael G. Clark......... 41 Vice President, Chief Financial
Officer and Treasurer
James W. Coulter......... 59 Director (1)
George Young............. 60 Director (1)
Steve Bridges............ 45 Director (1)
(1) Independent Director
<PAGE>
PHILIP N. GAINSBOROUGH has been Chairman of the Board and a Director of
the Company since 1989 and, has since 1983, been Chairman of the Board of
Directors, President and Director of Associated Financial Group, Inc. He has
been active in the securities and financial services business since 1961. He
has been, and he currently serves as, Chairman of the Board of Directors,
President and Director of Associated Securities Corp. since its organization in
1982. Mr. Gainsborough is also currently the Chairman of the Board of Directors
and Director of West Coast Realty Advisors, Inc., and West Coast Realty
Management, Inc. Mr. Gainsborough is also Chairman of the Board of Directors of
Associated Planners Partnership Services, Inc. and Associated Planners Insurance
Services, Inc. Mr. Gainsborough is a graduate of the University of Southern
California.
W. THOMAS MAUDLIN, JR. has been President and a Director of the Company
since 1989 and, has since 1989, been President and since 1986 a Director of West
Coast Realty Advisors, Inc., and a Director of West Coast Realty Management,
Inc. He has been active in the real estate area for the past 34 years, serving
as co-developer of high rise office buildings and shopping centers. Mr. Maudlin
has structured transactions for syndicators in apartment housing, including sale
leasebacks, all-inclusive trust deeds, buying and restructuring transactions to
suit a particular buyer, and as a buyer acting as a principal. From 1980 to
present, Mr. Maudlin has been involved in the development of real property in
numerous parts of Southern California. Mr. Maudlin is a graduate of the
University of Southern California.
NEAL E. NAKAGIRI serves as Executive Vice President, General Counsel,
Chief Operating Officer and Secretary of Associated Financial Group, Inc. He is
Vice President for two subsidiaries, Associated Securities Corp. and Associated
Planners Investment Advisory, Inc. He joined the "Associated" group of
companies in March 1985. He was Vice President of Compliance with Morgan,
Olmstead, Kennedy & Gardner from 1984 to 1985. He was First Vice President and
Director of Compliance with Jefferies & Co., Inc. from 1981 to 1984. He was
Vice President and Director of Compliance at W & D Securities, Inc. from 1980 to
1983. He was Investigator with the National Association of Securities Dealers,
Inc. from 1976 to 1980. He has a B.A. degree in Economics from UCLA (1976) and
a J.D. from Loyola Law School of Los Angeles (1991). He is a member of the
California Bar and the Compliance and Legal Division of the Securities Industry
Association.
<PAGE>
MICHAEL G. CLARK has since 1989, been Vice President, Chief Financial
Officer and Treasurer of the Company, and has served as Vice President and
Treasurer of Associated Financial Group, Inc. since January 1988, and served as
Controller of Associated Financial Group, Inc. from March 1986 to December 1987.
Mr. Clark is currently Treasurer of Associated Planners Investment Advisory,
Inc., Treasurer of Associated Planners Insurance Services, Inc., Treasurer of
Associated Planners Partnership Services, Inc., Treasurer of West Coast Realty
Advisors, Inc., and Treasurer of Associated Securities Corp. Prior to joining
Associated Financial Group, Inc., Mr. Clark served as Controller for Quest
Resources, a Los Angeles based syndicator and operator of alternative energy
projects from October 1984 to March 1986 and as Assistant Controller for Valley
Cable Television from March 1982 through September 1984. In addition, Mr. Clark
served as an auditor for Arthur Young & Co. in Los Angeles from July 1978 to
March 1982. Mr. Clark is a graduate of the University of California, Santa
Barbara and has a Masters of Science degree from the California State University
at Northridge.
GEORGE YOUNG. Since 1972 has been president of his own company, now named
Internet Link Corporation. The firm specializes in integrating Internet and
Intranet communications into the productive life of enterprises. They host and
develop sites on the World Wide Web; integrate e-mail and interactive data
retrieval applications; and provide content management and consulting services,
Internet Link Corporation is affiliated with Netscape Communications, Pacific
Bell Internet Services and InterNex Information Services. Mr. Young is a
graduate of the University of Southern California.
STEVE BRIDGES has served as Executive Vice President of Pacific Building
Industries, a general building contractor from January 1995 to present. From
July 1986 to January 1995, Mr. Bridges served as Executive Vice President of
Pathfinder Mortgage, a mortgage brokerage firm, and was responsible for loan
production and financing of construction loans. From July 1984 to July 1986,
Mr. Bridges was the President of The Muller Company, a real estate development
company, and was responsible for the management of the Company, developing,
financing and joint venture relationships, the development of 800,000 square
feet of industrial and commercial real estate and partnership management. Mr.
Bridges is a graduate of the University of Southern California.
JAMES W. COULTER has since 1988 been a principal in Coulter & Company, a
firm which provides brokerage services and invests in real property with an
emphasis in retail, industrial and office properties. From 1981 to 1988, Mr.
Coulter was a Vice President of the investment division of Bishop-Hawk, Inc., a
firm which specialized in investments in retail and office buildings and land
sales of real property. Prior to 1981, Mr. Coulter was involved in real estate
investments, property management and development, and served as an officer of
real estate investment trusts. Mr. Coulter is a graduate of and has a Masters
of Business Administration degree from the University of Southern California.
Gainsborough, Maudlin, Clark, Coulter, Young, and Bridges have served in
their positions with the Company since inception. Nakagiri was named Secretary
of the Company in June 1996, replacing Mr. William T. Haas, who retired from the
Company.
<PAGE>
BOARD OF DIRECTORS
The Directors are charged with the ultimate responsibility for the affairs
of the Company, and particularly with monitoring the relationship between the
Company and the Advisor. The Independent Directors will make an annual
determination that the Advisor's compensation is reasonable and that total fees
and expenses of the Company are reasonable, and a quarterly determination that
the Company's borrowings are appropriate.
The Directors are accountable to the Company as fiduciaries and
consequently must exercise good faith and integrity in handling Company affairs.
However, Directors will have no different or greater level of fiduciary duty and
responsibility than do directors of any other Delaware business corporation. In
addition, an Independent Director will not be subject to any greater liability
than a Director who is not independent, notwithstanding the additional
responsibilities of Independent Directors. Directors and officers of the
Company are also entitled to certain indemnity rights under the Company's
Organization Documents.
The Directors will each spend such time on the affairs of the Company as
their duties may require, and will meet quarterly or more frequently, as
required. Financial statements and various other financial reports of the
Company will be provided to the Directors quarterly to aid them in the discharge
of their duties. It is contemplated that the Directors will not devote a
substantial portion of their time to the discharge of their duties as Directors.
BOARD MEETINGS
During the fiscal year ended December 31, 1996 there were four meetings of
the Board of Directors. Each of the Company's directors attended, or were
present for a telephonic conference call, for all of the Board meetings, with
the exception of Gainsborough who was not present for two of the meetings.
MANAGEMENT ARRANGEMENTS
The following is a description of certain Bylaw provisions affecting
management of the Company.
The Company's bylaws (Article IV, Section 4.2) provide that the number of
directors shall never be less than three, nor more than 5. In addition,
pursuant to the Company's bylaws (Article IV, Section 4.15), a majority of the
Board of Directors must be independent directors.
The Company's bylaws (Article V, Section 5.1) also provide that the
officers of the Company shall include a Chairman of the Board, a President, a
Secretary and a Chief Financial Officer and may include such other officers with
such powers and duties as the Board shall appoint as they shall deem necessary
or desirable (Articles V, Section 5.3). The bylaws (Article V, Sections 5.6
through 5.2) further set forth the powers and duties of the officers of the
Company.
<PAGE>
Any officer of the Company may be removed from office by the Board of
Directors with or without cause (Article V, Section 5.4). Pursuant to the
bylaws (Article IV, Section 4.17), the Company's stockholders may remove any
director without cause by the affirmative vote of a majority of all of the votes
entitled to be vote.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities ("10% Stockholders"), to
file with the Securities and Exchange Commission (the "Commission") initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and 10%
Stockholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, (based solely upon a review of the copies of
such Section 16(a) reports furnished to the Company and written representations
that no other reports were required) for the Company's fiscal year ended
December 31, 1996, all Section 16(a) filing requirements applicable to the
Company's officers, directors and 10% Stockholders were complied with.
EXECUTIVE COMPENSATION
The Company does not pay compensation to the directors and officers of the
Company who are affiliated with West Coast Realty Advisors, Inc., the Advisor to
the Company. Such persons are Messrs. Gainsborough, Maudlin, Nakagiri and
Clark.1 In addition, William T. Haas, who served as the Company's Secretary
from July 1 to August 1, 1996 (prior to retirement) also did not receive any
compensation. The Company pays each Independent Director, $500 for each meeting
of the Board of Directors attended in person, and $100 for each telephonic Board
Meeting. All directors and officers receive reimbursement of any out-of-pocket
disbursements incurred in connection with attending any meeting and for carrying
on the business of the Company. The aggregate remuneration paid to the
Independent Directors for the year ended December 31, 1996 was $6,600 (exclusive
of reimbursements for expenses).
1 Such persons will be remunerated indirectly by reason of their affiliation
with the Advisor and its affiliated companies. See "Certain Relationships and
Related Transactions" contained elsewhere in this Proxy Statement.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of the Annual Meeting Record
Date regarding beneficial ownership of shares of Common Stock held by (i) each
person known by the Company to be the beneficial owner of more than five percent
(5%) of the Company's outstanding shares of Common Stock, (ii) each director of
the Company, (iii) each executive officer of the Company, and (iv) all directors
and executive officers as a group.
Shares of Percent of
Common Stock Class (1)
Beneficially
Name and Business Address of Beneficial Owner Owned (1)
Philip N. Gainsborough (2)(3)............ 22,556 1.2%
W. Thomas Maudlin, Jr. (2)(3)............ 22,556 1.2%
Neal E. Nakagiri (2)(3)................. 22,556 1.2%
Michael G. Clark (2)(3)(4).............. 22,699 1.3%
All Directors and Executive Officer as a Group 22,699 1.3%
(1) Share amount and percentage figures are rounded to the nearest whole
number. Percentage figures are based upon 1,815,579 shares of Common Stock
outstanding as of the Annual Meeting Record Date. All shares of Common
Stock not outstanding but which may be acquired by a particular stockholder
within 60 days of the Annual Meeting Record Date are deemed to be
outstanding for the purposes of calculating beneficial ownership and
computing the percentage of the class beneficially owned by such
stockholder, but not by any other stockholder. Except as otherwise noted,
each stockholder has sole voting and sole dispositive power with respect to
such stockholder's shares of Common Stock.
(2) The business address for each of these individuals is 5933 W. Century
Boulevard, Ninth Floor, Los Angeles, California 90045.
(3) The 22,556 shares of Common Stock beneficially owned by Messrs.
Gainsborough, Maudlin, Nakagiri and Clark includes the 22,556 shares of
Common Stock owned by West Coast Realty Advisors, Inc., the Advisor to the
Company. Messrs. Gainsborough, Maudlin, Nakagiri, and Clark disclaim any
ownership of the shares owned by West Coast Realty Advisors, Inc., except
to the extent of their equity ownership of Associated Financial Group, Inc.
which owns 100% of West Coast Realty Advisors, Inc. Associated Financial
Group, Inc.'s and West Coast Realty Advisors, Inc.'s business address is
5933 W. Century Boulevard, Ninth Floor, Los Angeles, California 90045.
(4) Mr. Clark directly owns 143 shares of Common Stock.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has had certain transactions arising out of its relationship
with West Coast Realty Advisors, Inc. (the "Advisor") and affiliates of the
Advisor. None of the agreements and arrangements, including those relating to
compensation, between the Company and the Advisor and its affiliates are the
result of arm's-length negotiations. However, the Independent Directors
annually review the reasonableness of the compensation being paid to the
Advisor.
The Advisor is an affiliate of Associated Financial Group, Inc. ("AFG").
It is anticipated that, in the future, the Advisor may serve as general partner,
advisor or sponsor of other public and private programs and engage in business
activities which will be competitive with the Company. Accordingly, conflicts
may arise between operating and managing the real estate investments of the
Company, and any such future real estate programs. In addition, AFG and its
affiliates may in the future engage in additional business activities which may
be competitive with the Company.
TRANSACTIONS WITH THE ADVISOR OR AN AFFILIATE
Transactions with the Advisor and its affiliates and the Directors are
governed by the Bylaws. The Bylaws require that the Independent Directors must
approve or ratify all transactions with the Advisor or its affiliates, or any
transaction with any Director, officer, employee or agent of the Company, except
with respect to certain transactions which, by their terms, are governed by the
Bylaws. Transactions with affiliates may be considered not to be made at arms-
length.
SELLING AGENT
Associated Securities Corp., a wholly owned subsidiary of AFG, is the
Selling Agent for the Company in its public offering of the Company's Common
Stock. As an affiliate of AFG and the Advisor, the Selling Agent may experience
conflicts in performing its obligations to exercise due diligence with respect
to the statements made in this Prospectus. The Selling Agent believes, however,
that it has exercised the degree of diligence required of it in connection with
the sale of the Company's Common Stock. In 1996 the Company paid the Selling
Agent $163,735 as selling commissions.
<PAGE>
PROPERTY MANAGER
West Coast Realty Management Inc., an affiliate of AFG and the Advisor
acts as the property manager to the properties owned by the Company pursuant to
a Property Management Agreement with the Company. During 1996, the Company paid
West Coast Realty Management, Inc. $84,749. West Coast Realty Management, Inc.
is owned 75% by AFG and 25% by W. Thomas Maudlin, Jr., the Company's President
and a Director.
ADVISOR
For a description of the relationship between the Advisor and the Company,
see "Proposal No. 3. -- Ratification of Advisory Agreement" contained elsewhere
in this Proxy Statement.
REIMBURSEMENTS
Affiliates of the Company in connection with the sale of shares of the
Company's Common Stock to the public received reimbursement for Offering and
Organizational Expenses (which are defined generally to mean the costs expended
in organizing the Company for the registration and sale of the shares of Common
Stock and distributing the shares of Common Stock to the public) in the amount
of $82,864 in 1996.
ANNUAL REPORT
Incorporated herein by this reference is the Company's Form 10-K Annual
Report for the year ended December 31, 1996, a copy of which has been previously
mailed to you.
BY ORDER OF THE BOARD OF DIRECTORS:
Philip N. Gainsborough
Chairman of the Board
COMPANY AN INSTRUMENT REVOKING THIS PROXY OR A
DULY EXECUTED PROXY BEARING A LATER DATE OR BY
APPEARING AND VOTING IN PERSON AT THE MEETING.
