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Check the appropriate box:
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American Church Mortgage Company
(Name of Registrant as Specified in its Charter)
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(1) Amount Previously Paid:
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<PAGE>
Proxy Materials
AMERICAN CHURCH MORTGAGE COMPANY
10237 YELLOW CIRCLE DRIVE
MINNETONKA MINNESOTA 55343
August 11, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of American Church Mortgage Company to be held at 10237 Yellow
Circle Drive, Minnetonka, Minnesota on September 15, 2000 at 10:00 a.m., local
time.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. During the meeting there will
be a report on the operations of the Company. After the business of the meeting
has been concluded, shareholders will be given an opportunity to ask appropriate
questions.
The items requiring shareholder approval are the election of Directors,
approval of an amendment to the Amended and Restated Bylaws of the Company to
reduce the quorum for Shareholders' meetings, and ratification of the
appointment of our independent auditors for the year 2000. We recommend that you
vote for each of these proposals, which are set forth in more detail in the
accompanying Proxy Statement. Because the proposed Bylaw amendment requires
approval from holders of an absolute majority of our Shares, it is extremely
important that all Shareholders vote.
Whether or not you can attend the Annual Meeting, please complete,
sign, date and mail the enclosed proxy card promptly. This action will not limit
your right to revoke your proxy in the manner described in the accompanying
Proxy Statement or to vote in person if you wish to attend the Annual Meeting
and vote personally.
Sincerely,
AMERICAN CHURCH MORTGAGE COMPANY
David G. Reinhart
President
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 15, 2000
AT 10:00 A.M.
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
American Church Mortgage Company, a Minnesota corporation, will be held at the
Company's office at 10237 Yellow Circle Drive, Minnetonka, Minnesota, at 10:00
a.m., local time, on September 15, 2000.
This meeting is being held for the following purposes:
1. To elect five (5) persons to serve as directors
until the next annual election and until their successors are duly
elected and qualified.
2. To approve an amendment to the Amended and
Restated Bylaws of the Company (the
"Bylaws") to reduce the quorum required for Shareholders'
meetings.
3. To ratify the appointment of Boulay, Heutmaker,
Zibell & Co., P.L.L.P. as independent
auditors for the year ending December 31, 2000.
4. To transact such other business as may properly
come before the meeting.
Only shareholders of record at the close of business on August 4, 2000
will be entitled to notice of or to vote at the meeting. Whether or not you plan
to be present at the meeting, please sign and return the accompanying form of
proxy in the enclosed postage prepaid envelope at your earliest convenience.
AMERICAN CHURCH MORTGAGE COMPANY
V. James Davis
Secretary
Minneapolis, Minnesota
August 11, 2000
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
1999 ANNUAL REPORT
<PAGE>
Dear Shareholder:
When we started American Church Mortgage Company in 1994, we had only a
dream, ideas and two hundred thousand dollars which bought the Company's first
20,000 shares. But our dream and our ideas were based upon almost a half-century
of combined experience in providing financing to churches--and attractive
opportunities for investors. While there were no guarantees then--and there
aren't any now--we've been most gratified to see our dream become reality.
As your Company continues to grow and mature, we've seen that our
fundamental lending policies and procedures established back in 1993 have indeed
produced the results we hoped for--and expected. Since our beginnings we've made
approximately thirty-eight first mortgage loans, five second mortgage loans, and
purchased for our portfolio over $2,000,000 in first mortgage bonds. We now have
approximately $13,376,000 invested in churches and related organizations. While
we've managed the Company's assets with great care, we've still been able to
obtain for our shareholders what we believe to be excellent returns on their
investment. Those Shareholders participating in our Dividend Reinvestment Plan
have reaped even greater benefit through the immediate reinvestment of their
quarterly dividends.
While dividends, yields and returns on investment are important--as
they should be--our greatest accomplishment has been to successfully implement
our concept of risk reduction through diversification (making many loans) and by
following carefully-devised fundamentals in making these loans. We are delighted
to inform you that 100% of our loans are performing in accordance with their
terms. We know that this is of utmost importance to you, as an investor. It was
important to us when we developed and implemented our guidelines.
While we are proud of our Company's performance, we are not yet
satisfied with other aspects of our business. We want to grow at a faster pace.
Recognizing that growth is less important than a fundamentally healthy business,
we have experienced that the great demand for loans in our marketplace well
exceeds our ability to fund them at this time. We believe further that size and
growth of our Company's business are allies and friends of our Shareholders.
Although we have managed to assemble a fine portfolio of loans and bonds, the
larger our portfolio, the more diversified any risk to our Shareholders. While
we cannot eliminate risk through diversification and growth, we intend to
earnestly take whatever reasonable steps we can to grow our Company--and our
business.
All of us at American Church Mortgage Company, and our Advisor, wish to
thank you again for your confidence and loyalty. This is truly your company--and
your interests as Shareholders are our first priority.
David G. Reinhart, President
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
10237 YELLOW CIRCLE DRIVE
MINNETONKA MINNESOTA 55343
---------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 15, 2000
This Proxy Statement and the accompanying proxy card are being mailed,
beginning on or about August 11, 2000, to owners of common shares of American
Church Mortgage Company in connection with the solicitation of proxies by the
Board of Directors for our 2000 Annual Meeting of Shareholders. This proxy
procedure is necessary to permit all American Church Mortgage Company
shareholders, many of whom are unable to attend the Annual Meeting, to vote. The
Board of Directors encourages you to read this document thoroughly and to take
this opportunity to vote on the matters to be decided at the Annual Meeting.
TABLE OF CONTENTS
GENERAL INFORMATION...........................................................1
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ELECTION OF DIRECTORS.........................................................4
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HOW DOES THE BOARD OPERATE....................................................7
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......................7
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HOW ARE EXECUTIVES AND DIRECTORS COMPENSATED..................................7
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS..........................8
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................10
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AMENDMENT TO BYLAWS...........................................................11
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APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS...............................11
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SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING OF SHAREHOLDERS.............11
--
OTHER MATTERS.................................................................12
--
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<PAGE>
GENERAL INFORMATION
The questions and answers set forth below provide general information
regarding this proxy statement and our annual meeting of shareholders.
WHEN IS OUR ANNUAL REPORT TO SHAREHOLDERS AND THIS PROXY STATEMENT FIRST BEING
SENT TO SHAREHOLDERS?
Our annual report to shareholders and this proxy statement is being
sent to shareholders beginning on or about August 11, 2000.
WHAT AM I VOTING ON?
1. The election of five Board members, each for a
one-year term or until their successors are
elected.
2. To approve an amendment to our Bylaws reducing
the number of represented shares
needed to constitute a quorum at a Shareholders' meeting.
3. To ratify the appointment of Boulay, Heutmaker,
Zibell & Co., P.L.L.P. as the
independent auditor.
WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING AND HOW MANY VOTES DO THEY HAVE?
Common shareholders of record at the close of business on August 4,
2000 may vote at the Annual Meeting. Each share has one vote. There were
1,413,464 common shares outstanding on June 30, 2000.
HOW DO I VOTE?
You must be present, or represented by proxy, at the Annual Meeting in
order to vote your shares. Since many of our shareholders are unable to attend
the Annual Meeting in person, we send proxy cards to all of our shareholders to
enable them to vote.
WHAT IS A PROXY?
A proxy is a person you appoint to vote on your behalf. We are
soliciting your appointment of proxies so that your common shares may be voted
at the Annual Meeting without your attendance. If you complete and return the
enclosed proxy card, your shares will be voted by proxy.
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<PAGE>
BY COMPLETING AND RETURNING THIS PROXY CARD, WHOM AM I DESIGNATING AS MY PROXY?
You will be designating David G. Reinhart and Philip J. Myers as your
proxies. They may act on your behalf together or individually and will have the
authority to appoint a substitute to act as proxy.
HOW WILL MY PROXY VOTE MY SHARES?
Your proxy will vote according to the instructions on your proxy card.
If you complete and return your proxy card but do not indicate your vote on
business matters, your proxy will vote "FOR" the election of David G. Reinhart,
John M. Clarey, Kirbyjon H. Caldwell, Robert O. Naegele, Jr., and Dennis Doyle
as Directors, "FOR" the Bylaw amendment, and "FOR" the ratification of the
appointment of our independent auditors. If you do not complete and return your
proxy or vote in person, your failure to vote will be considered a vote
"AGAINST" the amendment to the Bylaws because the Bylaw amendment requires
approval by holders of an absolute majority of our outstanding Shares. We do not
intend to bring any other matters for a vote at the Annual Meeting, and we do
not know of anyone else who intends to do so. However, your proxies are
authorized to vote on your behalf, using their best judgment, on any other
business that properly comes before the Annual Meeting.
HOW DO I VOTE USING MY PROXY CARD?
Other than attending the Annual Meeting and voting in person, you must
vote by mail. To vote by mail, simply mark, sign and date the enclosed proxy
card and return it in the postage-paid envelope provided. If you hold your
shares through a broker, bank or other nominee, you will receive separate
instructions from the nominee describing how to vote your shares.
HOW DO I REVOKE MY PROXY?
You may revoke your proxy at any time before your shares are voted at
the Annual Meeting by:
- Notifying our Corporate Secretary, V. James Davis, in writing at
10237 Yellow Circle Drive, Minnetonka, Minnesota 55343, that you are revoking
your proxy;
- Executing a later-dated proxy card; or
- Attending and voting by ballot at the Annual Meeting.
IS MY VOTE CONFIDENTIAL?
Yes, only certain of our employees will have access to your card.
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<PAGE>
WHO WILL COUNT THE VOTES?
An officer of American Church Mortgage Company will act as the
inspector of election and will count the votes.
WHAT CONSTITUTES A QUORUM?
As of June 30, 2000, 1,413,464 of our common shares were issued and
outstanding. A majority of the outstanding shares, present or represented by
proxy, constitutes a quorum. If you sign and return your proxy card, you will be
considered part of the quorum, even if you withhold your vote. If a quorum is
not present at the Annual Meeting, the shareholders present in person or by
proxy may adjourn the meeting to a date not more than 120 days after September
12, 2000 until a quorum is present.
HOW WILL MY VOTE BE COUNTED?
With respect to the election of Directors, votes may be cast in favor
of or withheld from one or all nominees. Votes that are withheld will not be
included in the vote.
With respect to approval of the Bylaw amendment and appointment of our
independent auditors, votes may be cast for or against the proposals or the
proxy may be instructed to abstain. Since approval of the proposed amendment to
our Bylaws requires an affirmative vote from holders of an absolute majority of
shares eligible to vote, abstaining or not returning your proxy is considered a
"No" vote.
WHAT PERCENTAGE OF OUR COMMON SHARES DO THE DIRECTORS AND EXECUTIVE
OFFICERS OWN?
Our Board and executive officers beneficially owned 4.9% of our common
shares as of June 30, 2000. (See the discussion under the heading "Security
Ownership of Certain Beneficial Owners and Management" for more details.)
WHO IS SOLICITING MY PROXY, HOW IS IT BEING SOLICITED AND WHO PAYS THE COST?
American Church Mortgage Company is soliciting your proxy. The
solicitation process is being conducted primarily by mail. However, proxies may
also be solicited in person, by telephone or facsimile.
Gemisys Corporation, our transfer agent, will be assisting us for a fee
of approximately $1,000, plus out-of-pocket expenses. American Church Mortgage
Company pays the cost of soliciting proxies. We will also reimburse stockbrokers
and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy and solicitation material to the
owners of our common shares.
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<PAGE>
WHO IS OUR LARGEST PRINCIPAL SHAREHOLDER?
We have no shareholders who beneficially owned more than 5% of our stock as of
June 30, 2000.
WHEN ARE SHAREHOLDER PROPOSALS FOR THE YEAR 2001 MEETING DUE?
Shareholder proposals to be presented at the 2001 Annual Meeting must
be submitted in writing by January 1, 2001 to David G. Reinhart, President, at
10237 Yellow Circle Drive, Minnetonka, Minnesota 55343. You should submit any
proposal by a method that permits you to prove the date of delivery to us. (See
the discussion under the heading "Shareholder Proposals for the 2001 Annual
Meeting of Shareholders" for information regarding certain procedures with
respect to shareholder proposals and nominations of Directors.)
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to the Bylaws of the Company, the Board has fixed at five (5)
the number of Directors to be elected at the Annual Meeting. This is a reduction
from the six (6) Directors that served during the past year. On June 5, 2000 V.
James Davis resigned from the Board. Unless otherwise indicated thereon, the
proxy holders will vote for the election of the nominees listed below to serve
until the next annual meeting of shareholders and until their successors are
elected and qualified. All nominees are members of the present Board. If any
nominee shall be unavailable for election to the Board, the holders of proxies
will vote for a substitute. Management has no reason to believe that any of the
nominees will be unable to serve if elected to office.
The five (5) nominees who receive the highest number of votes will be
elected Directors of the Company. The Board recommends a vote FOR the election
of each of the nominees listed below.
Nominees
The following table sets forth certain information regarding the
nominees.
<TABLE>
<CAPTION>
Name Age Biographical Summary Director Since
<S> <C> <C>
David G. Reinhart 47 President, Treasurer and Director. Mr. Reinhart has been a 1996
Director since our inception, and has served as our President
and Treasurer since January 19, 1999. He served as our Vice
President and Secretary since our inception until January 19,
1999. He is employed by Miller & Schroeder Financial, Inc. as
Senior Vice President. Miller & Schroeder Financial, Inc. is
a wholly-owned subsidiary of Miller & Schroeder Capital
Corporation, which owns our Advisor. Mr. Reinhart has served
as legal counsel to banks, trust companies and broker-dealers
in the area of church financings and otherwise since
approximately March 1984. He was employed in the St. Paul
firm of Reinhart Law Offices, P.A. from November 1985 to
February 1987, and from July 1983 to November 1985 he was
employed as an Associate Attorney with the law firm of Robins,
Kaplan, Miller & Ciresi, Minneapolis, Minnesota. Mr. Reinhart
received his Juris Doctor degree, cum laude, in May 1979, from
Hamline University School of Law, St. Paul, Minnesota and
received his Bachelor of Science degree in May 1976, from
Northern Michigan University, Marquette, Michigan. Mr.
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<PAGE>
Reinhart has practiced law in the areas of corporate finance
and general business law since 1979 and has developed
expertise in the area of church financing. He is employed
from time to time as Adjunct Professor of Law, Hamline
University School of Law.
John M. Clarey 58 Mr. Clarey has served as a Director since September 1994. 1994
Since January 1992, he has been employed as First Vice
President of Miller & Schroeder Financial, Inc., a
Minneapolis, Minnesota based investment banking firm, and
NASD-member broker-dealer. Miller & Schroeder Financial, Inc.
is a wholly-owned subsidiary of Miller & Schroeder Capital
Corporation, which owns our Advisor. From February 1991
through December 1991, Mr. Clarey was a general partner of
Clarepoint Partners, LP, a private venture capital firm, of
which he was one of the founders. From July 1989 to February
1991, he was a Senior Vice President of Miller, Johnson &
Kuehn, Incorporated, a Minneapolis-based investment banking
firm specializing in municipal and corporate finance. From
September 1965 to November 1970, he was employed as Executive
Vice President of Keenan & Clarey, Inc., a Minneapolis
broker-dealer specializing in structuring and development of
corporate debt issues and financings for churches and other
non-profit corporations. During his career in the securities
and finance industry, Mr. Clarey has been active as a senior
officer and director of local, regional, and national trade
and professional associations and has served as a volunteer
officer and director of various charitable organizations. He
graduated from Marquette University, Milwaukee, Wisconsin
(1963) with a B.A. in economics.
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<PAGE>
Kirbyjon H. Caldwell 47 Mr. Caldwell has served as an Independent Director since 1994
September 1994. He currently is Senior Pastor of Windsor
Village United Methodist Church and St. Johns United
Methodist Church in Houston, Texas, in which capacities he has
served since January 1982 and September 1992, respectively.
Membership in both churches is approximately 7,500 combined
and their ministries reach a broad segment of the Houston
region. Mr. Caldwell received his B.A. degree in Economics
from Carlton College (1975), an M.B.A. in Finance from the
University of Pennsylvanias Wharton School (1977), and his
Masters in Theology from Southern Methodist University School
of Theology (1981). He is a member of the Boards of Directors
of Texas Commerce Bank (Houston), Hermann Hospital (Houston),
Greater Houston Partnership, The United Way of The Texas Gulf
Coast, and the American Cancer Society. he is also the
founder and member of several foundations and other community
development organizations.
Robert O. Naegele, Jr. 60 Mr. Naegele, Jr. has served as an Independent Director of the 1994
company since September 1994. Mr. Naegeles professional
background includes advertising, real estate development, and
consumer products, with a special interest in entrepreneurial
ventures and small developing companies. Most recently, he
led a group of investors to apply for, and receive an NHL
Expansion Franchise, the Minnesota Wild, to begin play in the
Xcel Energy Center, in St. Paul in October 2000. Mr. Naegele
and his wife, Ellis, lived in Minneapolis through 1993 and now
reside in Naples, Florida.
Dennis J. Doyle 48 Mr. Doyle has served as an Independent Director since 1994
September 1994. He is the majority shareholder and co-founder
of Welsh Companies, Inc., Minneapolis, Minnesota
full-service real estate company involved in property
management, brokerage, investment sales, construction and
residential and commercial development. Welsh Companies was
co-founded by Mr. Doyle in 1980, and has five regional offices
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<PAGE>
and 220 employees. Mr. Doyle is the recipient of numerous
civic awards relating to his business skills. He also is a
member of the Board of Directors of HEART (a non-profit
organization), The Childrens Theater (Minneapolis) and Grow
Biz International, a publicly-owned company. He is also a
member of the Board of Advisors of the Minnesota Real Estate
Journal, and a member of the International Commercial Realty
Services (ICRS) and National Association of Office and
Industrial Parks (NAIOP).
</TABLE>
HOW DOES THE BOARD OPERATE?
During 1999, the Board of Directors had four meetings. All Directors
attended more than 75% of the meetings.
The Board has no audit committee, compensation committee or executive
committee. However, the Independent Directors, Dennis J. Doyle, Kirbyjon H.
Caldwell and Robert O. Naegele, Jr. ("Independent Directors") meet annually as a
committee of Independent Directors to review and approve the Advisory Agreement
between our Company and the Advisor.
HOW ARE EXECUTIVES AND DIRECTORS COMPENSATED?
We currently pay each Independent Director a fee of $500 for each board
meeting attended ($200 for telephonic meetings), limited to $2,500 per year. In
addition, we reimburse Directors for travel expenses incurred in connection with
their duties as our Directors. We also have adopted a Stock Option Plan for
Directors and the Advisor, under which each Director and the Advisor's president
are granted annually options to purchase 3,000 Shares each of our common stock
at a price equal to the fair market value at the date of the grant. Our two
officers who are also officers or directors of our Advisor receive no
compensation from us.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors, Executive Officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership of Common Stock and other equity securities of the Company with the
Securities and Exchange Commission. Executive Officers and Directors are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. To the Company's knowledge, all insiders of the Company
filed in a timely manner all such reports.
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Advisor
Subject to the supervision of the Board of Directors, our business is
managed by Church Loan Advisors, Inc. (the "Advisor"), which provides investment
advisory and administrative services. In May 2000, all of the stock of the
Advisor was sold to Miller & Schroeder Capital Corporation. Messrs. Reinhart and
Clarey are both shareholders of Miller & Schroeder Capital Corporation and
employees of Miller & Schroeder Financial Services, Inc., a wholly-owned
subsidiary of Miller & Schroeder Capital Corporation. In May 2000, Miller &
Schroeder Capital Corporation also acquired American Investors Group, Inc.
("American") from the former principals of our Advisor. American receives fees
and other compensation from us as described below.
Our Advisor, Church Loan Advisors, Inc., is a Minnesota corporation and
a wholly-owned subsidiary of Miller & Schroeder Capital Corporation (the
"Advisor"). The Advisor was organized on May 27, 1994 to engage in the business
of rendering lending and advisory services solely to us, and to administer our
business affairs and operations.
The following table sets forth the names and positions of the officers
and directors of the Advisor:
Name Position
Philip J. Myers President, Treasurer and Director
Scott J. Marquis Vice President, Secretary
V. James Davis Director
David G. Reinhart Director
The Advisory Agreement
We have entered into a contract with the Advisor (the "Advisory
Agreement") under which the Advisor will furnish advice and recommendations
concerning our affairs, provides administrative services to us, and managers our
day-to-day affairs. In performing its services under the Advisory Agreement, the
Advisor may use facilities, personnel and support services of its Affiliates.
Expenses such as legal and accounting fees, stock transfer agent, registrar and
paying agent fees, and dividend reinvestment agent fees are our direct expenses
and are not provided for by the Advisor as part of its services.
The Advisory Agreement is renewable annually by us for one-year
periods, subject to a determination, including a majority of the Independent
Directors, that the Advisor's performance has been satisfactory and that the
compensation paid by us to the Advisor has been reasonable. We may terminate the
Advisory Agreement with or without cause on 60 days' written notice. Upon
termination of the Advisory Agreement by either party, the Advisor may require
us to change our name to a name that does not contain the word "American,"
"America" or the name of the Advisor or any approximation or abbreviation
thereof, and that is sufficiently dissimilar to the word "America" or "American"
or the name of the Advisor as to be unlikely to cause confusion or
identification with either the Advisor or any person or entity using the word
"American" or "America" in its name, however, we may continue to use the word
"church" in our name. Our directors shall determine that any successor Advisor
possess sufficient qualifications to perform the advisory function for us and
justify the compensation provided for in its contract with us.
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<PAGE>
Pursuant to the Advisory Agreement, the Advisor is required to pay all
of the expenses it incurs in providing us services including, but not limited
to, personnel expenses, rental and other office expenses of directors, officers
and employees of the Advisor (except out-of-pocket expenses of such persons who
are our directors or officers), and all of its overhead and miscellaneous
administrative expenses relating to performance of its functions under the
Advisory Agreement. We are required to pay all other expenses, including the
costs and expenses of reporting to various governmental agencies and our
Shareholders and of conducting our operations as a mortgage lender, fees and
expenses of appraisers, directors, auditors, outside legal counsel and transfer
agents, and costs directly relating to closing of loan transactions.
In the event that our Total Operating Expenses exceed in any calendar
year the greater of (a) 2% of our Average Invested Assets or (b) 25% of our net
income, the Advisor is obligated to reimburse us, to the extent of its fees for
such calendar year, for the amount by which the aggregate annual operating
expenses paid or incurred by us exceed the limitation. The Independent Directors
may, upon a finding of unusual and non-recurring factors which they deem
sufficient, determine that a higher level of expenses is justified in any given
year.
Our bylaws provide that the Independent Directors are to determine, at
least annually, the reasonableness of the compensation which we pay to the
Advisor. Factors to be considered in reviewing the Advisory Fee include the size
of the fees of the Advisor in relation to the size, composition and our
profitability, the rates charged by other investment advisors performing
comparable services, the success of the Advisor in generating opportunities that
meet our investment objectives, the amount of additional revenues realized by
the Advisor for other services performed, the quality and extent of service and
advice furnished by the Advisor, the quality of our investments in relation to
investments generated by the Advisor for its own account, if any, and the
performance of our investments.
Pursuant to the Advisory Agreement, we pay the Advisor an annual base
management fee of 1.25% of average invested assets and expenses, as defined in
the agreement and remit to the Advisor one-half of any origination fee collected
from a borrower in connection with mortgage loans made or renewed by us. For the
years ended December 31, 1998 and 1999, we paid the Advisor $101,944 and
$230,978, respectively.
American Investors Group, Inc.
Pursuant to the Underwriting Agreement in connection with our second
public offering which commenced September 26, 1997 and concluded January 22,
1999, we paid American, the Managing Underwriter, selling commissions of
$332,185. We also paid American $63,983 for expenses. In addition, we agreed to
indemnify American against certain civil liabilities, including liabilities
under the Securities Act of 1933. The public offering price of the Shares was
determined by negotiations between us and American based on the price paid
($10.00 per share) by our initial shareholder and shareholders who purchased
shares in our initial public offering, which was completed November 8, 1996.
American is an affiliate of the Advisor.
Pursuant to the Underwriting Agreement in connection with our third
public offering which commenced September 23, 1999, American has been paid
selling commissions of $124,024 as of June 30, 2000. We have also paid
approximately $35,175 of non-accountable expenses of American. In addition, we
agreed to indemnify them as underwriters against certain civil liabilities,
including
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<PAGE>
liabilities under the Securities Act of 1933. The public offering price of the
Shares was determined by negotiations between us and the underwriter based on
the price paid ($10.00 per share) by the initial shareholder and shareholders
who purchased shares in our prior two public offerings.
In the course of our business, we have purchased and expect to continue
to purchase, church bonds being underwritten and sold by American. Although we
do not pay any commissions on these purchases, American would benefit from such
purchases as a result of commissions paid to it by the issuers of such bonds.
American also would benefit from mark-ups on bonds bought from it and mark-downs
on bonds sold through it by us on the secondary market. Any church bonds we
purchase in an initial offering will be purchased for investment purposes only
at the public offering price. Church bonds purchased in the secondary market, if
any, will be purchased at the best price available, subject to customary
mark-ups (or in the case of sales--mark-downs), on terms no less favorable than
those applied to other customers of American, and would not exceed industry
standards or in any event (in the case of mark-ups and mark-downs on secondary
bond sales and purchases) exceed five percent of the principal amount of bonds
purchased or sold. It is our policy not to invest in excess of 30% of our
Average Invested Assets in Church Bonds.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 30, 2000, the number of
shares beneficially owned by each Director and by all executive officers and
Directors as a group, and the beneficial owner of 5% or more of our outstanding
stock. Unless otherwise noted, each of the following persons has sole voting and
investment power with respect to the Shares set forth opposite their respective
names.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Percent
<S> <C> <C>
Name of Beneficial Owner(1) Owned(2) of Class
Robert O. Naegele, Jr. 19,113 1.4%
David G. Reinhart 12,000 .85%
Kirbyjon H. Caldwell 12,000 .85%
Dennis J. Doyle 12,000 .85%
John M. Clarey 12,000 .85%
All Executive Officers and Directors as a Group (seven 69,798(3) 4.9%
individuals)
------------------
</TABLE>
(1) The address for the Directors is 10237 Yellow Circle Drive, Minnetonka,
Minnesota 55343.
(2) Includes 12,000 Shares (84,000 shares in the aggregate) which each of
our Directors and Officers and the President of the Advisor have a
presently exercisable option to purchase pursuant to the Stock Option
Plan for Directors and the Advisor.
(3) Includes 2,385 shares owned by V. James Davis and 300 shares owned by
Scott J. Marquis, both of whom are officers of the Company and the
advisor respectively.
-10-
<PAGE>
PROPOSAL 2
AMENDMENT TO BYLAWS
The Board has recommended unanimously an amendment to the Company's
Amended and Restated Bylaws decreasing the number of shares necessary to
constitute a quorum. Section 2.3 of the Bylaws currently requires holders of a
majority of the shares outstanding and entitled to vote to be present either in
person or by proxy at a Shareholders' meeting in order to transact business. We
have had a difficult time getting a quorum for meetings and are recommending
that the quorum requirement be reduced to one-third. The Board believes that the
inability of the shareholders to conduct business due to a lack of quorum could
unnecessarily increase the cost of conducting annual and special Shareholders'
meetings and could delay or prevent approval of matters that must be presented
to our Shareholders for approval. Also, the inability to obtain a quorum could
make it more difficult to elect new directors.
The precise amendment would revise the first sentence of Section 2.3 of
the Bylaws to read as follows:
"The holders of one-third (1/3) of the Shares outstanding and entitled
to vote, represented either in person or by proxy, shall constitute a
quorum for the transaction of business."
The Bylaws require that the Amendment be approved by a majority of all
of our outstanding shares. This means that if you do not return your proxy, your
vote will be counted as a "No" vote. Therefore, it is important that you vote.
The Board unanimously recommends a vote FOR ratification of this
amendment to the Bylaws.
PROPOSAL 3
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board recommends that the Shareholders ratify the Board's appointment
of Boulay, Heutmaker, Zibell & Co., P.L.L.P. as independent auditors of the
Company for the year ending December 31, 2000. Boulay, Heutmaker, Zibell & Co.,
P.L.L.P. has served as the Company's independent auditors since 1996.
SHAREHOLDER PROPOSALS FOR THE 2001
ANNUAL MEETING OF SHAREHOLDERS
Any shareholder who wishes to present a proposal for action at the next
Annual Meeting of Shareholders and who wishes to have it set forth in the Proxy
Statement and identified in the form of proxy prepared by the Company must
notify the Company so that such notice is received by the Secretary by January
1, 2001. Any such proposal must be in the form required under the rules and
regulations promulgated by the Securities and Exchange Commission. In addition,
any shareholder who intends to propose any matter that is not identified in the
notice of such meeting must comply with the Company's Bylaws which require at
least twenty (20) days' written notice prior to the meeting stating with
reasonable particularity the substance of the proposal.
-11-
<PAGE>
OTHER MATTERS
The Board knows of no other matters that are intended to be brought
before the Annual Meeting. If other matters, of which the Board is not aware,
are presented for action, it is the intention of the proxies named in the
enclosed form of proxy to vote on such matters in their sole discretion.
By Order of the Board of Directors,
[GRAPHIC OMITTED]
V. James Davis
Secretary
August 11, 2000
-12-
<PAGE>
CORPORATE INFORMATION
DIRECTORS
David G. Reinhart, President of the Company and
Senior Vice President of Miller & Schroeder Financial,
Inc.
John M. Clarey, First Vice President of Miller &
Schroeder Financial, Inc.
Kirbyjon H. Caldwell, Senior Pastor of Windsor Village
United Methodist Church and St. John's United
Methodist Church, Houston, Texas
Robert O. Naegele, Jr., Governor and Chairman of
Minnesota Wild
Dennis J. Doyle, President of Welsh Company, Inc.,
Minneapolis
OFFICERS AND MANAGEMENT OF
ADVISOR
Philip J. Myers, President, Treasurer and Director
Scott J. Marquis, Vice President, Secretary
V. James Davis, Director
David G. Reinhart, Director
TRANSFER AGENT
Gemisys Corporation
P.O. Box 3857
Englewood, Colorado 80155-3857
LEGAL COUNSEL
Maun & Simon, PLC
2000 Midwest Plaza West
801 Nicollet Mall
Minneapolis, Minnesota 55402
INDEPENDENT ACCOUNTANT
Boulay, Heutmaker, Zibell & Co., P.L.L.P.
5151 Edina Industrial Boulevard
Edina, Minnesota 55439
COMMON STOCK INFORMATION
Our Common Stock is not traded on any established market. From time to time, we
have repurchased shares of common stock offered to us for sale. At June 30, 2000
we had 753 record holders of our common stock and an undetermined number of
additional beneficial owners.
DIVIDENDS
We have paid quarterly dividends since we became a public company in 1996. The
following table lists our quarterly dividends for the periods indicated.
Dividend
2000 Per Share
---- ---------
March 31............................ .225
June 30............................. .2125
1999
December 31......................... .215625
September 30........................ .228125
June 30............................. .21875
March 31............................ .1875
1998
December 31......................... .225
September 30........................ .2125
June 30............................. .23125
March 31............................ .23125
2000 ANNUAL MEETING
Our Annual Meeting of Shareholders will be held at 10:00 a.m. on September 15,
2000 at our office, 10237 Yellow Circle Drive, Minnetonka, Minnesota 55343.
SHAREHOLDER CONTACT
Inquiries concerning our Company or matters of shareholder interest may be
directed to:
American Church Mortgage Company
10237 Yellow Circle Drive
Minnetonka, Minnesota 55343
(952) 945-9455 (x 124)
Attention: Scott J. Marquis
<PAGE>
AMERICAN CHURCH MORTGAGE COMPANY
...............................THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
PROXY
....................................The undersigned hereby appoint David G.
Reinhart and Philip J. Myers as Proxies, each with the power to appoint his
substitute, and hereby authorize them to represent and to vote, as designated
hereon, all the shares of Common Stock of American Church Mortgage Company held
of record by the undersigned on August 4, 2000, at the Annual Meeting of
Shareholders to be held on September 15, 2000, or any adjournment thereof.
PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE [X]
....................................1. ELECTION OF DIRECTORS
01 David G. Reinhart
02 John M. Clarey
03 Kirbyjon H. Caldwell
04 Robert O. Naegele, Jr.
05 Dennis J. Doyle
................. [ ] VOTE FOR all nominees listed
................. [ ] VOTE WITHHELD for all nominees (to withhold authority to
vote for a
............... nominee, write number(s) in the box provided)
---------------------------------------------------------------------
....................................2. PROPOSAL TO APPROVE THE AMENDMENT OF
SECTION 2.3 OF THE AMENDED AND RESTATED BYLAWS TO DECREASE THE QUORUM REQUREMENT
FOR SHAREHOLDERS' MEETINGS
[ ] FOR[ ] AGAINST[ ] ABSTAIN
....................................3. PROPOSAL TO RATIFY THE APPOINTMENT OF
BOULAY, HEUTMAKER, ZIBELL & CO. PLLP as the independent auditors of the
Corporation for the year ending December 31, 2000.
[ ] FOR[ ] AGAINST[ ] ABSTAIN
(CONTINUED AND TO BE SIGNED ON THE REVERSE.)
<PAGE>
(CONTINUED FROM THE OTHER SIDE)
....................................4. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
meeting.
....................................This Proxy when properly executed will be
voted in the manner directed herein by the undersigned shareholder. If no
direction is made, this Proxy will be voted for Proposals 1, 2 and 3.
....................................Please sign exactly as name appears below.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full titles
as such. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign by authorized person.
Date: ___________________, 2000
................... -------------------------------------------
................... SIGNATURE
................... -------------------------------------------
................... SIGNATURE (IF HELD JOINTLY)
PLEASE MARK, SIGN, DATE, AND RETURN THIS
PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
<PAGE>
