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AMERICAN MORTGAGE
ACCEPTANCE COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
on
June 8, 2005
April 30, 2005
To the Shareholders of American Mortgage Acceptance Company:
(1) | The election of five (5) trustees for a term of one year to expire at the 2006 annual meeting; |
(2) | The approval of an amendment and restatement of our Company’s Second Amended and Restated Declaration of Trust which reflects the following significant amendments: |
2a. | the transfer of provisions with respect to our investment policy from our declaration of trust to our bylaws; |
2b. | the transfer of provisions with respect to our debt policy from our declaration of trust to our bylaws; |
2c. | the transfer of provisions with respect to our operating procedures from our declaration of trust to our bylaws; and |
2d. | the reduction in the vote required to approve a conversion transaction or a roll-up from 80% to a majority vote. |
(3) | The adjournment or postponement of the annual meeting if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the annual meeting to approve the proposals; |
(4) | The transaction of such other business as may properly come before the meeting. |
![](https://capedge.com/proxy/DEF 14A/0001145443-05-001042/sboesky_sig.jpg)
President and Chief Executive Officer
IT IS MOST IMPORTANT THAT YOU SUBMIT YOUR PROXY EITHER BY MAIL OR ON THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD. IF YOU DECIDE TO DO SO BY MAIL, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED STAMPED, SELF-ADDRESSED PROXY CARD.
YOUR FAILURE TO PROMPTLY RETURN THE PROXY INCREASES THE OPERATING COSTS OF YOUR INVESTMENT.
YOU ARE CORDIALLY INVITED TO PERSONALLY ATTEND THE MEETING, BUT YOU SHOULD VOTE BY INTERNET OR MAIL WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
TABLE OF CONTENTS
Page | ||||||
---|---|---|---|---|---|---|
INTRODUCTION | 1 | |||||
QUESTIONS AND ANSWERS | 2 | |||||
PROPOSALS BEFORE THE MEETING | 7 | |||||
Proposal #1 — Election of Trustees | 7 | |||||
Proposal #2 — Amending and Restating our Declaration of Trust | 9 | |||||
MANAGEMENT | 17 | |||||
EXECUTIVE COMPENSATION | 22 | |||||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 25 | |||||
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 26 | |||||
ACCOUNTING AND AUDIT INFORMATION | 29 | |||||
EXPENSES OF SOLICITATION | 30 | |||||
VOTING PROCEDURES | 31 | |||||
SHAREHOLDER PROPOSALS | 32 | |||||
ANNUAL REPORT ON FORM 10-K | 32 | |||||
OTHER BUSINESS | 32 | |||||
Appendix A — Third Amended and Restated Declaration of Trust | ||||||
Appendix B — Amended and Restated Bylaws | ||||||
Appendix C — Charter of the Audit Committee of the Board of Trustees |
AMERICAN MORTGAGE ACCEPTANCE COMPANY
625 MADISON AVENUE
NEW YORK, NEW YORK 10022
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
INTRODUCTION
1
QUESTIONS AND ANSWERS
Q: | Why am I receiving these proxy materials? |
A: You are receiving these proxy materials because you are a shareholder in our Company. Our board of trustees is asking for the right to vote your shares as your proxy or agent at the annual meeting of our shareholders. Your shares will be voted as you instruct on your proxy card at the annual meeting. This proxy statement discusses the issues to be voted on. Each share you own is entitled to one vote on each matter being voted on at the annual meeting.
Q: | What am I being asked to vote on? |
A: You are being asked to consider and vote upon the following proposals:
(1) | The election of five (5) trustees for a term of one year to expire in 2006; |
(2) | The approval of an amendment and restatement of our Company’s Second Amended and Restated Declaration of Trust which reflects the following significant amendments: |
a. | the transfer of provisions with respect to our investment policy from our declaration of trust to our bylaws; |
b. | the transfer of provisions with respect to our debt policy from our declaration of trust to our bylaws; |
c. | the transfer of provisions with respect to our operating procedures from our declaration of trust to our bylaws; and |
d. | the reduction in the vote required to approve a conversion transaction or a roll-up from 80% to a majority vote. |
(3) | The adjournment or postponement of the annual meeting if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the annual meeting to approve the proposals. |
Q: | Who is being nominated for election as a trustee? |
A: The nominating committee of our board of trustees has nominated Stuart J. Boesky, Alan P. Hirmes, Scott M. Mannes, Stanley R. Perla and Richard M. Rosan for election as trustees at the annual meeting. Additional information about each of the nominees is included under the heading “Proposal #1: Election of Trustees.”
Q: | Why are we amending and restating the declaration of trust? |
A: When our Company was originally formed, it was our intention to operate as a closed-end, finite-life company to acquire government insured mortgage loans, utilizing only the proceeds from our initial capital raised and no indebtedness. When our Company was restructured to an infinite-life real estate investment trust (a “REIT”) in 1999, our shareholders voted to amend our declaration of trust in order to accommodate our new business plan. These amendments included, among other changes, expanding the types of investments we could make and utilizing a defined amount of indebtedness to acquire higher yielding mezzanine and bridge loans and other real estate related investments. However, at the time of the restructuring, there were certain restrictions with respect to our operating procedures that were left in our declaration of trust that we now believe, after five years of operations as a public company, may no longer be applicable to our Company and in any event should be left to the discretion of our board of trustees. For these reasons, we are asking you to approve an amendment and restatement of our declaration of trust which will give our trustees powers substantially similar to those granted to directors of most public companies and allow our board to amend, without the need to solicit shareholder consent, the provisions that will be moved into the bylaws as deemed necessary and appropriate to effectively manage our business.
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Q: | What are the four (4) separate proposals to the declaration of trust that I am being asked to vote on? |
A: You are being asked to approve amending and restating our declaration of trust by voting on the following four proposals:
a. | The transfer of provisions with respect to our investment policy from our declaration of trust to our bylaws. The first declaration of trust proposal, “Proposal #2a — The transfer of provisions with respect to our investment policy from our declaration of trust to our bylaws,” is asking you to approve amending our declaration of trust to move Article VII — Investment Policy of our declaration of trust to our bylaws (with the exception of the provisions in Article VII that relate to our debt policy, which we are asking you to vote on separately in Proposal #2b). This amendment would permit our board of trustees to have discretion over any change to the Company’s investment policy. We feel that transferring our investment policy to our bylaws will afford our Company needed flexibility in our continued operations and expanding business and also enable us to operate in a more efficient and economical manner by allowing our board of trustees to react quickly to changes in the competitive and regulatory conditions in which we operate. |
b. | The transfer of provisions with respect to our debt policy from our declaration of trust to our bylaws. The second declaration of trust proposal, “Proposal #2b — The transfer of provisions with respect to our debt policy from our declaration of trust to our bylaws,” is asking you to approve amending our declaration of trust to move our debt policy, which restricts the amount of indebtedness that we are permitted to incur, into our bylaws. Our declaration of trust currently limits our ability to incur indebtedness to (i) 100% of our total market value with respect to total indebtedness and (ii) 50% of our total market value with respect to indebtedness other than working capital indebtedness, trade payables and subordinated advisor fees. We are asking you to approve moving this restriction on indebtedness into our bylaws which will grant our board of trustees the discretion to determine, from time to time, our appropriate level of indebtedness. Although we have no immediate plans to increase the amount of our indebtedness beyond that currently permitted by our declaration of trust, moving the debt policy into our bylaws will provide us with greater flexibility and allow us to react quickly to changes in our industry. |
c. | The transfer of provisions with respect to our operating procedures from our declaration of trust to our bylaws. The third declaration of trust proposal, “Proposal #2c — The transfer of provisions with respect to our operating procedures from our declaration of trust to our bylaws,” is asking you to approve amending the declaration of trust to transfer certain provisions related to our operating procedures from the declaration of trust to our bylaws. These include, for example, provisions regarding meetings of shareholders, including quorum and voting mechanics; authority of our trustees, including resignation and removal procedures; appointments of our officers; the setting of record dates and voting procedures. It also includes references to the North American Securities Administrators Association (“NASAA”) guidelines, which are no longer applicable to our Company. In light of our continuing growth and the manner in which our Company has changed since our declaration of trust was created, such an amendment would allow our board of trustees to exercise greater discretion and control over the operation of our Company and provide needed flexibility. Approving this proposal will give our board of trustees powers substantially similar to those granted to boards of most public companies and also allow our board to amend, without the need to solicit shareholders consent, these operating procedures as deemed necessary and appropriate to effectively manage our business. |
d. | Reduction in the vote required to approve a conversion transaction or a roll-up from eighty percent (80%) to a majority vote. The fourth declaration of trust proposal, “Proposal #2d — Reduction in the vote required to approve a conversion transaction or a roll-up from eighty (80%) to a majority vote,” is asking you to approve amending the declaration of trust to change the shareholder voting requirements |
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for approval of certain exchange offers, mergers, consolidations, conversions, roll-ups or other similar transactions (collectively, “Conversion or Roll-Up Transactions”) from eighty percent (80%) to a majority of the outstanding shares of our Company held by our shareholders. We believe the eighty percent (80%) approval requirement has the potential to unduly limit our ability to obtain approval of a Conversion or Roll-Up Transaction which may be in the best interest of the majority of our shareholders. If approved, this amendment would continue to permit our shareholders to exercise discretion over such transactions. However, undertaking a Conversion or Roll-Up Transaction will be less costly and our Company will have the ability to obtain such approval in a timely manner. |
Q: | What is the effect of Proposals #2a, #2b and #2c which transfer provisions to the bylaws? |
A: Three proposals, Proposal #2a, #2b and #2c, seek shareholder approval to transfer provisions which are currently set forth in our declaration of trust into our bylaws. The principal effect of this change will be to give our board of trustees the ability to amend, without the need to solicit shareholder consent, the transferred provisions as deemed necessary and appropriate to effectively manage our business. As a result, shareholders will no longer have a vote on whether or not certain investment policies and operating procedures can be changed, including various restrictions which currently limit the discretion of management and the board of trustees.
Q: | Has management discussed revising or eliminating the provisions relating to Proposals #2a, #2b and #2c after they are moved to the bylaws? |
A: While management has discussed with the board from time to time the elimination or revision of certain of these restrictions, neither management nor the board of trustees has a present intention to do so (other than the NASAA guidelines) , although, as noted above, the proposals would permit our board of trustees to take actions on its own that would previously have required shareholder approval if the board felt such changes were in the best interest of our shareholders and us.
Q: | What vote is required to approve the proposals? |
A: The affirmative vote of the holders of a majority of the issued and outstanding common shares entitled to vote at the annual meeting at which a quorum is present is required to approve each of the amendments to our declaration of trust, other than Proposal #2d, which requires approval of 80% of our common shares outstanding.
The affirmative vote of a plurality of the votes actually cast by shareholders, in person or by proxy, and entitled to vote at the annual meeting at which a quorum is present is required for the election of each of the trustee nominees. The affirmative vote of the holders of a majority of the common shares voting either in person or by proxy at the annual meeting is required to approve, if necessary, the extension of the solicitation period and the adjournment of the annual meeting.
Abstentions and broker non-votes will have no effect on the vote for Proposals #1 and #3 because the vote required is a plurality and majority, respectively, of the votes actually cast (assuming the presence of a quorum). Abstentions and broker non-votes will be counted as votes against Proposals #2a, #2b, #2c and #2d.
Q: | Who is entitled to vote? |
A: Shareholders of record as of the close of business on April 1, 2005 are entitled to vote at the annual meeting.
Q: | Does holding my stock in a brokerage account affect my entitlement to vote? |
A: While your broker may vote your shares with respect to Proposals #1 and #3 even if you do not instruct your broker how to vote, your broker may only vote your shares with respect to Proposals #2a, #2b, #2c and #2d if you provide instructions to your broker on how to vote. You should contact your broker and ask what directions your broker will need from you. If your shares are held in the name of a broker, and you intend to attend the annual meeting and vote your shares in person, you must obtain a legal proxy, executed in your favor, from your broker to be able to vote at the annual meeting.
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Q: | What if there are not enough votes to establish a quorum? |
A: If there are not enough votes to establish a quorum or to meet the voting requirement at the annual meeting, we may propose an adjournment or postponement of the annual meeting for the purpose of soliciting additional proxies. Therefore, please note that, by delivering a proxy to vote at the annual meeting, you are also granting a proxy that can be voted in favor of any adjournments or postponements of the annual meeting.
Q: | What do I need to do now? |
A: After reading this proxy statement, complete, sign and mail the enclosed proxy card in the enclosed return envelope as soon as possible. In the alternative, you may also submit a proxy on the Internet by following the instructions on the enclosed proxy card. To submit a proxy on the Internet, log on to the Internet and go to http://www.eproxyvote.com/amc, enter your authentication number which can be found in the grey shaded box on the proxy card and follow the directions outlined on the secure website. Even if you plan to attend the annual meeting in person, we urge you to return your proxy card to assure the representation of your shares at the annual meeting.
Q: | Can I change my vote after I have mailed my signed proxy card? |
A: Yes. You can change your vote at any time before your proxy is voted at the annual meeting. You may do this in one of three ways. First, you can send us a written notice stating that you revoke your proxy. Second, you can complete and submit a new proxy card, dated a later date than the first proxy card. Third, you can attend the annual meeting and vote in person. Your attendance at the annual meeting will not, however, by itself revoke your proxy. If you hold your shares in “street name” and have instructed your broker to vote your shares, you must follow directions received from your broker to change those instructions.
Q: | Do I have dissenters’ rights? |
A: No dissenters’ rights apply to any matter to be acted upon at this annual meeting.
Q: | How does the board of trustees recommend that I vote? |
A: Our board of trustees unanimously recommends that you vote:
“FOR” The approval of an amendment and restatement of our Company’s Second Amended and Restated Declaration of Trust which reflects the following significant amendments: |
a. | the transfer of provisions with respect to our investment policy from our declaration of trust to our bylaws; |
b. | the transfer of provisions with respect to our debt policy from our declaration of trust to our bylaws; |
c. | the transfer of provisions with respect to our operating procedures from our declaration of trust to our bylaws; and |
d. | the reduction in the vote required to approve a conversion transaction or a roll-up from 80% to a majority vote. |
“FOR” The adjournment or postponement of the annual meeting if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the annual meeting to approve the proposals. |
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Q: | Who can help answer my questions? |
A: If you would like additional copies of this proxy statement, or if you would like to ask any additional questions, you should contact:
The Altman Group
1200 Wall Street West
Lyndhurst, NJ 07071
Attn: Fred Bonnell
(201) 806-7319
or
American Mortgage Acceptance Company
625 Madison Avenue
New York, New York 10022
Attn: Brenda Abuaf
(212) 317-5700
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PROPOSALS BEFORE THE MEETING
Proposal #1: | Election of Trustees |
Name of Trustee/ Nominee for Election | Age | Principal Occupation | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Stuart J. Boesky | 48 | Mr. Boesky is Chairman, President and Chief Executive Officer of our Company and is a Director and the President of Related AMI Associates, Inc. (our “Advisor”). Mr. Boesky is also the Chief Executive Officer and a Managing Trustee of CharterMac (AMEX:CHC), Chairman of CharterMac Mortgage Capital Corporation (“CharterMac Mortgage Capital”) and Managing Director of Related Capital Company LLC (“RCC”), two of CharterMac’s subsidiaries. Mr. Boesky is responsible for our strategic planning and new business development. He oversees all of CharterMac’s and our Company’s debt products, including CharterMac’s portfolio investing and mortgage banking operations, capital markets, strategic planning and new product development. Mr. Boesky practiced real estate and tax law with the law firm of Shipley & Rothstein from 1984–1986, when he joined RCC. From 1983–1984, he practiced law with the Boston office of Kaye, Fialkow, Richman and Rothstein. Previously, Mr. Boesky was a consultant at the accounting firm of Laventhol & Horwath. Mr. Boesky graduated with high honors from Michigan State University with a Bachelor of Arts degree and from Wayne State School of Law with a Juris Doctor degree. He then received a Master of Laws degree in Taxation from Boston University School of Law. Mr. Boesky is a regular speaker at industry conferences and on television. Mr. Boesky is also a member of the board of directors of the National Association of Affordable Housing Lenders and the Investment Program Association. | ||||||||
Alan P. Hirmes | 50 | Mr. Hirmes is a managing trustee and Chief Financial Officer of our Company and is a Director and the Chief Financial Officer and a Senior Vice President of our Advisor. Mr. Hirmes is also a Managing Trustee, the Chief Operating Officer and Chief Financial Officer of CharterMac, the President of RCC and a Board member of CharterMac Mortgage Capital. Mr. Hirmes is responsible for managing the overall administration of CharterMac, RCC and the Company, as well as any new initiatives or special projects. In addition, Mr. Hirmes oversees RCC’s finance and accounting, human resources, information technology and investor services departments and the joint venture development program. Mr. Hirmes has been a Certified Public Accountant in New York since 1978. Mr. Hirmes currently serves as Chairman Emeritus of the Affordable Housing Tax Credit Coalition, a national organization dealing with issues relating to the Tax Credit Program. He is also a member of the Advisory Board of the Low Income Housing Tax Credit Monthly Report and of the National Housing Conference, and he serves on the Executive |
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Name of Trustee/ Nominee for Election | Age | Principal Occupation | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Board of the National Multi Housing Council. Prior to joining RCC in October 1983, Mr. Hirmes was employed by Weiner & Co., certified public accountants, where he specialized in real estate and partnership taxation. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts degree. | ||||||||||
Scott M. Mannes | 45 | Mr. Mannes is an independent trustee of our Company. Mr. Mannes is a Managing Director of the Norseman Group, LLC, which is a credit focused mezzanine lender to single tenant property owners. Prior to Norseman, Mr. Mannes was a principal of Drawbridge Capital, LLC, a company providing consulting services to specialty and consumer finance companies. Prior to Drawbridge, Mr. Mannes was a key participant in the development and evolution of the investment banking and merchant banking operations during his nine-year tenure at ContiFinancial Corporation, most notably as Co-President of ContiFinancial Services Corporation. Prior to joining ContiFinancial in 1990, Mr. Mannes spent seven years with Financial Guaranty Insurance Company, developing the first financial guaranties applied to sub-prime mortgage loan securitizations. Mr. Mannes is a graduate of State University of New York at Albany and received a Master of Public Administration degree from the Rockefeller School of Public Affairs and Policy at SUNY Albany. Mr. Mannes is a member of the audit committee, the chairman of the nominating and governance committee and a member of the compensation committee. | ||||||||
Stanley R. Perla | 61 | Mr. Perla is an independent trustee of our Company. Mr. Perla, a licensed Certified Public Accountant, was with the firm of Ernst & Young LLP for 35 years, the last 25 of which he was a partner. His area of expertise for the past 40 years was real estate, and he was also responsible for the auditing of public and private companies. Mr. Perla served as Ernst & Young’s National Director of Real Estate Accounting, as well as on Ernst & Young’s National Accounting and Auditing Committee. He is an active member of the National Association of Real Estate Investment Trusts and the National Association of Real Estate Companies. Mr. Perla also served on the real estate committees of the New York State Society of Certified Public Accountants and the American Institute of Certified Public Accountants. In addition, Mr. Perla has been a frequent speaker on real estate accounting issues at numerous real estate conferences. He is currently on the Board of Trustees and Chairman of the Audit Committee of Lexington Corporate Properties Trust (NYSE:LXP) and is a Vice President and the Director of Internal Audit of Vornado Realty Trust. Mr. Perla is the chairman of the audit committee and is a member of the nominating and governance committee. | ||||||||
Richard M. Rosan | 63 | Mr. Rosan is an independent trustee of our Company and is the President of the Urban Land Institute (“ULI”), a post he has held since 1992. ULI, a globally focused organization with an international membership of over 20,000 real estate professionals, is considered the preeminent “think tank” in land use development. In addition to the duties of leading ULI, Mr. Rosan is also the President of the ULI Foundation, the philanthropic arm of ULI. Mr. Rosan is an architect and Fellow of the American Institute of Architects. Prior to his service at ULI, Mr. Rosan spent 22 years in New York City in several capacities, including 12 years with the City of New York, ending as its Economic Development Director, six years as President of the Real Estate Board of New York, and five years in the private development business working as Project Director on several large New York City development projects. Mr. Rosan holds a B.A. from Williams College and a Masters of Architecture from The School of Architecture at the University of Pennsylvania. He completed Post Graduate work in Urban Planning at the University of Cambridge, England. Mr. Rosan is a member of the audit committee and the chairman of the compensation committee. |
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Proposal #2: | Amending and Restating our Declaration of Trust |
• | transfer provisions with respect to our investment policy to our bylaws; |
• | transfer provisions with respect to our debt policy to our bylaws; |
• | transfer provisions with respect to our operating procedures to our bylaws; and |
• | lower the shareholder approval percentage (from 80% to a majority) for approval of certain exchange offers, mergers, consolidations, conversions, roll-ups or other similar transactions. |
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• | Debt Limitation. Our declaration of trust currently restricts our ability to incur indebtedness in excess of a set limitation. The present debt limitation is set at (i) 100% of our total market value with respect to total indebtedness and (ii) 50% of our total market value with respect to indebtedness other than working capital indebtedness, trade payables and subordinated advisor fees. We have no present intention to revise this limitation as it has provided us with significant flexibility to implement our business plan as currently formulated. |
• | Specified Investments. Our declaration of trust currently provides that 40% of our new investments be of the type we originally invested in prior to our restructuring in 1999. We expect to continue to maintain approximately 40% of our investments in government insured or guaranteed investments, primarily through the acquisition of Government National Mortgage Association (“GNMA” or “Ginnie Mae”) and Federal National Mortgage Association (“FNMA” or “Fannie Mae”) mortgage-backed securities and pass-through certificates. |
• | NASAA Guideline Limitations. Our declaration of trust currently provides that our Advisor’s compensation is determined in accordance with the NASAA guidelines. Furthermore, unless approved by our independent trustees, our total operating expenses may not exceed the greater of (i) 2% of our average invested assets and (ii) 25% of our net income. We have never exceeded the foregoing limitations. |
• | we could lose our interests in assets given as collateral for secured borrowings or leverage if the required repayments are not made when due; |
• | our cash flow from operations may not be sufficient to retire these obligations as they mature, making it necessary for us to either refinance these obligations prior to maturity or to raise additional debt and/or equity or dispose of some of our assets to retire the obligations which could have an adverse effect on the amount of cash available for distribution to our shareholders; and |
• | there can be no assurance as to the availability, or the terms and conditions, of any financing needed by us to refinance borrowings. |
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this change would be a reduction in the voting requirement for us to seek approval for a Conversion or Rollup Transaction which would have a direct impact on the ability of a minority shareholder to block such a transaction. As a result, even though our shareholders would exercise discretion over such transactions, it will not longer be as difficult for us to obtain the vote to pursue a Conversion or Roll-up Transaction.
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Comparison of Provisions of Our Existing Declaration of Trust to the Proposed Amended and Restated Declaration of Trust
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are complete. You should read the form of Third Amended and Restated Declaration of Trust which is attached to this proxy as Appendix A for a complete description of the proposed changes.
Topic | Existing Declaration of Trust | Amended Declaration of Trust | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Annual Meetings of Shareholders | • Annual meeting of shareholders for the election of trustees and for other business not less than 30 days after delivery of the annual report, but not later than June 30 of each year. | • Unchanged, however mechanics moved to the bylaws. | ||||||||
Other Meetings of the Shareholders | • Meetings of shareholders for any purpose held at such time and place as shall be stated in the notice of the meeting. | • Unchanged, however mechanics moved to the bylaws. | ||||||||
Shareholder Voting | • Each shareholder entitled to vote in accordance with the declaration of trust shall be entitled to one vote for each share (i) at a meeting, in person, by written proxy or by a signed writing or consent or (ii) without a meeting, by a signed writing or consent. | • Unchanged, however mechanics moved to the bylaws. | ||||||||
• All elections for trustees decided by plurality vote provided that at least a majority of the outstanding shares cast a vote in such election. | • No change. | |||||||||
• All other questions decided by a majority of votes cast at a meeting at which a quorum is present or a majority of outstanding shares cast, without a meeting. | • No change. | |||||||||
• None of the Advisor, the trustees nor their affiliates may vote any shares held by them on matters submitted to the shareholders regarding (a) the removal of the Advisor, the trustees or their affiliates; or (b) any transaction between the Company and the Advisor, the trustees or their affiliates. | • No change. | |||||||||
Inspection of Elections | • Procedures for the inspection of elections and duties of the inspector. | • Moved to bylaws. | ||||||||
Access to Records | • Procedures for the inspection of records of the Company. | • Unchanged, however mechanics moved to the bylaws. | ||||||||
List of Shareholders | • Procedures for maintaining a list of shareholders and for making such list available to shareholders. | • Moved to bylaws. | ||||||||
Quorum of Shareholders | • The presence, in person or by proxy, of shareholders holding a majority of the outstanding shares of the Company entitled to vote, shall constitute a quorum. | • Moved to bylaws. | ||||||||
• Procedures for adjourning meetings in the event a quorum is not present and conducting business in such adjourned meeting. | • Moved to bylaws. |
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Topic | Existing Declaration of Trust | Amended Declaration of Trust | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Special Meetings of the Shareholders | • Procedures for calling for a special meeting of the shareholders. | • Moved to bylaws. | ||||||||
Notice of Shareholder Meetings | • Provisions regarding the procedures for providing notice to shareholders of an annual or special meeting of the shareholders. | • Moved to bylaws. | ||||||||
Business Transacted at Shareholder Meetings | • No business other than that stated in the notice shall be transacted at any meeting without the unanimous consent of all the shareholders entitled to vote thereat. | • Moved to bylaws. | ||||||||
Number of Trustees | • The number of trustees shall be not less than three nor more than nine and a majority of trustees shall at all times be independent trustees. | • No change. | ||||||||
Nomination, Election and Term of Trustees | • Trustees shall be elected at the annual meeting of the shareholders | • No change. | ||||||||
• Each trustee shall serve a term of one year. | • No change. | |||||||||
�� | • Provisions regarding the qualification of trustees and the board of trustees. | • Moved to bylaws. | ||||||||
• Provisions regarding the nomination of trustees by the board of trustees and shareholders. | • Moved to bylaws. | |||||||||
Authority and Responsibility of Trustees | • Provisions regarding general responsibility and authority of the trustees. | • No change. | ||||||||
• Provisions regarding specific and special authority of the board of trustees. | • Moved to bylaws. | |||||||||
• Provisions regarding limitations and suitability of available business opportunities to the trustees. | • Moved to bylaws. | |||||||||
Resignation and Removal of Trustees | • Provisions regarding the resignation of trustees. | • Moved to bylaws. | ||||||||
• Trustees may be removed for cause, by action of the majority of the board of trustees. | • Moved to bylaws. | |||||||||
• Trustees may be removed, with or without cause, by a vote of the holders of a majority of outstanding shares entitled to vote. | • No change. |
14
Topic | Existing Declaration of Trust | Amended Declaration of Trust | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Vacancies | • Newly created trusteeships or vacancies occurring in the board of trustees for any reason except the removal of trustees by shareholders filled by vote of a majority of the trustees, although less than a quorum exists. | • Unchanged, however mechanics relating to trustees filling vacancies moved to the bylaws. | ||||||||
• Vacancies as a result of the removal of trustees by shareholders shall be filled by shareholders. | • No change. | |||||||||
• Provisions regarding the vesting of the right, title and interest of the trustees in and to the assets of the Company in successor and additional trustees. | • Moved to bylaws. | |||||||||
Action by the Trustees | • Provisions regarding the ability of the trustees to take action at a meeting. | • Moved to bylaws. | ||||||||
• Provisions regarding the ability of the trustees to take action without a meeting. | • Moved to bylaws. | |||||||||
Compensation of Trustees | • Provisions regarding the compensation of the Trustees. | • Moved to bylaws. | ||||||||
Meetings of Trustees/Action without Meeting | • Trustees may participate in meetings by means of conference telephone or similar communications equipment and may take action by written consent. | • Moved to bylaws. | ||||||||
Appointment of Executive Committee | • Provisions regarding the board of trustees’ ability to appoint an Executive Committee and delegate certain duties thereto. | • Moved to bylaws. | ||||||||
Officers | • Provisions regarding the election, appointment and duties of the officers of the Company. | • Moved to bylaws. | ||||||||
Advisor | • Provisions with respect to appointment of an Advisor of the Company. | • No change. | ||||||||
• All provisions with respect to Advisor compensation and contract renewal. | • Moved to bylaws. | |||||||||
Exculpation and Indemnification | • All provisions with respect to the exculpation and indemnification of the trustees and officers. | • No change. | ||||||||
Investment Policy | • All provisions with respect to the types of investments entered into by the Company and limitations on such investments. | • Moved to bylaws. | ||||||||
Debt Limitation | • The Company is authorized to incur indebtedness up to (i) 100% of its total market value, with respect to total indebtedness and (ii) 50% of its total market value, with respect to indebtedness other than working capital indebtedness, trade payables and subordinated advisor fees. | • Moved to bylaws. |
15
Topic | Existing Declaration of Trust | Amended Declaration of Trust | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares | • Certificates evidencing shares; share ledger; procedure for transferring shares. | • Moved to bylaws. | ||||||||||||
• All other share provisions. | • No change. | |||||||||||||
Miscellaneous | • Description and use of the Company seal. | • Moved to bylaws. | ||||||||||||
• The fiscal year of the Company shall be determined by resolution of the Board of Trustees. | • Moved to bylaws. | |||||||||||||
• All checks, drafts or other orders for the payment of money, etc. shall be signed by such officer(s), or agent(s) of the Company, and in such manner, as determined by resolution of the board of trustees. | • Moved to bylaws. | |||||||||||||
• Provisions with respect to delivery of notices and waivers of notice. | • Moved to bylaws. | |||||||||||||
• The declaration of trust shall be binding upon all successors and assigns of the trustees and the shareholders. | • No change. | |||||||||||||
• Inspection of books and records of the Company shall be permitted to the extent permitted by applicable law, unless broader rights are granted under the bylaws. | • No change. | |||||||||||||
• Provision regarding severability and applicable law. | • No change. | |||||||||||||
Duration, Amendment and Termination | • All provisions regarding the duration, amendment or termination of the Company. | • No change — Except as noted below. | ||||||||||||
• Amendment to provisions regarding the approval of certain conversion transactions requires the vote of 80% of the holders of the outstanding shares. | • Amendment to provisions regarding the approval of certain conversion transactions requires the vote of a majority of the holders of the outstanding shares. | |||||||||||||
Excess Shares | • All provisions regarding Excess Shares (as defined in the declaration of trust). | • No change. | ||||||||||||
Conversion Transactions | • The approval of the holders of 80% of the shares and the unanimous approval of the independent trustees shall be required for certain exchange offers, mergers, consolidations or similar transactions. | • The approval of the holders of a majority of the shares and the unanimous approval of the independent trustees shall be required for certain exchange offers, mergers, consolidations or similar transactions. |
16
Topic | Existing Declaration of Trust | Amended Declaration of Trust | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Roll-Up Transactions | • All provisions relating to Roll-Ups (as defined in the declaration of trust). | • No change — Except as noted below. | ||||||||
• The Company shall not participate in any Roll-Up that results in the Shareholders having rights to receive reports that are less than those provided in the declaration of trust. | • No change except to add reference to the Bylaws. | |||||||||
• The Company shall not participate in any Roll-Up that results in the investors of the Roll-Up entity having rights of access to records of the Roll-Up entity that are less than those provided in the declaration of trust. | • No change except to add reference to the Bylaws. |
Meetings and Attendance
17
Trustees and Executive Officers
Name | Age | Office Held | Year First Became Officer/Trustee | Term Expires | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Stuart J. Boesky | 48 | Chairman of the Board, Chief Executive Officer and President | 1991 | 2005 | ||||||||||||||
Alan P. Hirmes | 50 | Managing Trustee and Chief Financial Officer | 1991 | 2005 | ||||||||||||||
Scott M. Mannes | 45 | Managing Trustee (Independent) | 2001 | 2005 | ||||||||||||||
Stanley R. Perla | 61 | Managing Trustee (Independent) | 2004 | 2005 | ||||||||||||||
Richard M. Rosan | 63 | Managing Trustee (Independent) | 2004 | 2005 | ||||||||||||||
John A. Garth | 47 | Chief Operating Officer and Senior Vice President | 2004 | — | ||||||||||||||
Denise L. Kiley1 | 45 | Senior Vice President | 1999 | — | ||||||||||||||
Marc D. Schnitzer | 44 | Senior Vice President | 1999 | — |
1 | On March 23, 2005, we announced Ms. Kiley’s intention to retire in 2005 |
18
Other Officers of Our Company
Committees of the Board of Trustees
19
• | a majority of trustees must at all times be independent trustees; |
• | a trustee must be an individual at least 21 years of age who is not under legal disability; |
• | a trustee must have at least three years of relevant experience demonstrating the knowledge and experience required to successfully acquire and manage mortgage investments; and |
• | at least one independent trustee must have at least three years of relevant real estate experience. |
20
such notice shall set forth: (a) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the shareholder is a holder of record of our shares entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (d) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC, had the nominee been nominated, or intended to be nominated by the board of trustees; and (e) the consent of each nominee to serve as a Trustee of the Trust, if so elected. The presiding officer of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.
Communication with Trustees
Other Corporate Governance Initiatives
Our Advisor
Related AMI Associates, Inc.
Name | Age | Offices Held | Year First Became Officer/Director | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Stuart J. Boesky | 48 | Director/President/Senior Vice President | 1991 | |||||||||||
Alan P. Hirmes | 50 | Director/Chief Financial Officer/Senior Vice President | 1991 | |||||||||||
Denise L. Kiley | 45 | Vice President | 1999 | |||||||||||
Marc D. Schnitzer | 44 | Vice President | 2000 |
21
Section 16(a) Beneficial Ownership Reporting Compliance
EXECUTIVE COMPENSATION
Trustees and Management
Share Option Plan
22
compensation committee is authorized to issue options for the year ended December 31, 2004. On March 23, 2005, we granted 65,052 options for common shares to Mr. Garth pursuant to our Share Option Plan. The options have an effective date of January 3, 2005. All share options will vest over a three year period, with one third vesting on the first anniversary of the effective date.
Report of the Compensation Committee
Scott M. Mannes
23
Stock Performance Graph
![](https://capedge.com/proxy/DEF 14A/0001145443-05-001042/d16950line.jpg)
Cumulative Total Return
12/99 | 12/00 | 12/01 | 12/02 | 12/03 | 12/04 | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
AMAC | $ | 100.00 | $ | 89.44 | $ | 163.94 | $ | 158.76 | $ | 183.66 | $ | 193.80 | ||||||||||||||
S & P 500 | 100.00 | 90.89 | 80.09 | 62.39 | 80.29 | 89.02 | ||||||||||||||||||||
NAREIT MORTGAGE | 100.00 | 115.96 | 205.64 | 269.55 | 424.24 | 502.44 |
24
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Name | Title | Amount and Nature of Beneficial Ownership | Percent of Class | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Stuart J. Boesky | Chairman, President and Chief Executive Officer of our Company and Director and President of our Advisor | 115,971 Common Shares1 | 1.39 | % | ||||||||||
Alan P. Hirmes | Trustee and Chief Financial Officer of our Company, Director and Senior Vice President of our Advisor | 106,471 Common Shares1 | 1.28 | % | ||||||||||
Stanley R. Perla | Trustee of our Company | 1,311 Common Shares | * | |||||||||||
Richard M. Rosan | Trustee of our Company | 656 Common Shares | * | |||||||||||
Scott M. Mannes | Trustee of our Company | 656 Common Shares | * | |||||||||||
Denise L. Kiley2 | Senior Vice President of our Company, Vice President of our Advisor | 94,471 Common Shares1 | 1.13 | % | ||||||||||
Marc D. Schnitzer | Senior Vice President of our Company and Vice President of our Advisor | 94,471 Common Shares1 | 1.13 | % | ||||||||||
John A. Garth | Chief Operating Officer and Senior Vice President of our Company | 2,500 Common Shares | * | |||||||||||
All Executive Officers and trustees and directors of our Company and our Advisor as a group (8 persons) | 140,433 Common Shares1 | 1.68 | % |
1 | 92,858 of these common shares are owned by RelCap Holdings, LLC, of which Messrs. Hirmes, Boesky and Schnitzer and Ms. Kiley are equity owners. |
2 | On March 23, 2005, we announced Ms. Kiley’s intention to retire in 2005. |
* | Less than 1% of the common shares outstanding. |
25
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Advisory Agreement
Fees/Compensation/Points* | Amount | |||||
---|---|---|---|---|---|---|
Asset Management Fee | Equal to .625% on existing Original Mortgage Investments; .355% on new Original Mortgage Investments; .355% on investment grade Additional Mortgage Investments; .750% on non-investment grade Additional Mortgage Investments; and 1.000% on unrated Additional Mortgage Investments.** |
26
Fees/Compensation/Points* | Amount | |||||
---|---|---|---|---|---|---|
Annual Incentive Fee | Subject to (1) a minimum annual Distributions being made to Shareholders from cash available for distribution of $1.45 per common share and (2) the Company achieving at least annual Adjusted Funds From Operations per share of $1.60 (net of the Annual Incentive Fee), the Advisor shall be entitled to receive incentive compensation for each fiscal year in an amount equal to the product of: (A) 25% of the dollar amount by which (1) Adjusted Funds From Operations of the Company (before the Annual Incentive Fee) per common share (based on the weighted average number of common shares outstanding exceed (2) an amount equal to the greater of: (a) (i) the weighted average of (x) $20 (the price per common share of the initial public offering) and (y) the prices per common share of any secondary offerings by the Company multiplied by (ii) the Ten-Year U.S. Treasury Rate plus 2% per annum; and (b) $1.45 multiplied by (B) the weighted average number of common shares outstanding during such year. | |||||
Origination Points | Our Advisor receives, with respect to each mortgage investment originated by us, a portion of the origination points paid by borrowers equal to up to 1% of the principal amount and we receive the portion of the origination points paid by borrowers in excess of 1% of the principal amount of such mortgage investment. | |||||
Operating Expense Reimbursement | For direct expenses incurred by our Advisor. | |||||
Incentive Share Options | Our Advisor may receive options to acquire additional common shares pursuant to our Share Option Plan only if our distributions in any year exceed $1.45 per common share and the compensation committee of our board of trustees determines to grant such options. |
* | Our Advisor is also permitted to earn miscellaneous compensation, which may include, without limitation, construction fees, escrow interest, property management fees, leasing commissions and insurance brokerage fees. The payment of any such compensation is generally limited to the competitive rate for the services being performed. |
** | “Original Mortgage Investments” means investments authorized under our original investment policy, which include originated Mortgages, acquired Mortgages and additional loans (and within such terms are also included REMICS, CMOs, GNMA, FHA and FHLMC Pass-Through Certificates). “Additional Mortgage Investments” shall mean uninsured mortgage loans, construction loans, bridge loans, mezzanine loans, mortgage derivatives, and commercial mortgage-backed securities (“CMBS”) subordinated interests (including subordinated interests in CMBS). |
27
Advisor and all persons controlled by our Advisor and its officers and directors may take advantage of an opportunity for their own account or present or recommend it to others, they are obligated to present such investment opportunity to us if (i) such opportunity is of a character which could be taken by us, (ii) such opportunity is compatible with our investment objectives and policies and (iii) we have the financial resources to take advantage of such opportunity.
Affiliated Transactions
28
ACCOUNTING AND AUDIT INFORMATION
Audit Committee Report
• | The audit committee assists the board in fulfilling its oversight responsibilities with respect to the integrity of the Company’s financial statements; |
• | The audit committee met periodically with the independent auditors, with and without management present, to discuss the results of their examinations of the financial statements and internal controls; |
• | The audit committee has reviewed and discussed with our management our fiscal 2004 audited financial statements; |
• | The audit committee also reviewed management’s report on its assessment of the effectiveness of internal control over financial reporting as of December 31, 2004; |
• | The audit committee has discussed with Deloitte & Touche LLP (our independent auditors) the matters required to be discussed by Statements on Auditing Standards No. 61 as amended by Statements on Auditing Standards No. 90; and |
• | The audit committee has received the written disclosures and letter from the independent auditors required by Independence Standards Board Standard No. 1 (which related to the auditors’ independence from our Company and its related entities) and has discussed with the auditors their independence from us. |
Scott M. Mannes
Richard M. Rosan
29
Independent Auditors
2004 | 2003 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Audit Fees (a) | $ | 248,922 | $ | 196,500 | ||||||
Audit-Related Fees (b) | — | — | ||||||||
Tax Fees (c) | 49,500 | 42,000 | ||||||||
All Other Fees (d) | — | — | ||||||||
Total | $ | 298,422 | $ | 238,500 |
(a) | Fees for audit services billed in 2004 and 2003 consisted of the audit of the Company’s annual financial statements, reviews of the Company’s quarterly financial statements, comfort letters, consents and other services related to SEC matters. 2004 includes an allocation from CharterMac for the review of internal controls pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. |
(b) | No audit-related services were rendered by Deloitte & Touche in 2004 or 2003. |
(c) | Fees for tax services billed in 2004 and 2003 consisted of tax compliance services. Tax compliance services are services rendered based upon facts already in existence or transactions that have already occurred to document, compute, and obtain government approval for amounts to be included in tax filings and consisted of Federal, state and local income tax return assistance and REIT compliance testing. |
(d) | No other services were rendered by Deloitte & Touche during 2004 or 2003. |
Policy on Pre-Approval of Independent Auditor Services
EXPENSES OF SOLICITATION
30
owners of common shares held of record by these persons or firms with their nominees, and in connection therewith, these firms will be reimbursed for their reasonable out-of-pocket expenses in forwarding these materials.
VOTING PROCEDURES
General
Voting
Record Date
Quorum; Adjournments
31
Vote Required
SHAREHOLDER PROPOSALS
ANNUAL REPORT ON FORM 10-K
OTHER BUSINESS
![](https://capedge.com/proxy/DEF 14A/0001145443-05-001042/sboesky_sig.jpg)
Chairman, President and Chief Executive Officer
April 30, 2005
32
Appendix A
NOTE:
SECONDTHIRD
AMENDED AND RESTATED DECLARATION OF TRUST
OF
AMERICAN MORTGAGEINVESTORS TRUSTACCEPTANCE COMPANY
A-1
DECLARATION
ARTICLE I
THE TRUST
ARTICLE II
A-2
DEFINITIONS
A-3
Investments, before reserves for depreciation or bad debts or other similar non-cash reserves computed by taking the average of such values at the end of each month during such period.
A-4
A-5
A-6
secured or unsecured, convertible, subordinated or otherwise, or any certificates of interest, shares or participations, or warrants, options or rights to subscribe to, purchase or acquire any of the foregoing.
A-7
ARTICLE III
MEETING OF SHAREHOLDERS
A-8
A-9
ARTICLE IV
TRUSTEES
A-10
A-11
possess and exercise all the rights, powers and privileges appertaining to the ownership of the Trust assets.
A-12
A-13
A-14
conveyance of any Trust property held in his name, shall account to the remaining Trustee or Trustees as they require for all property which he holds as Trustee and shall thereupon be discharged as Trustee. Upon the incapacity or death of any Trustee, his legal representative shall perform the acts set forth in the preceding sentence and the discharge mentioned therein shall run to such legal representative and to the incapacitated Trustee, or the estate of the deceased Trustee, as the case may be. Notwithstanding anything to the contrary contained in this Article IV, Section 4.5, the filling of vacancies or newly created trusteeships on the Board of Trustees shall be subject to compliance with the requirements of Section 4.1 of this Article IV.
ARTICLE V
OFFICERS
A-15
Vice-Presidents and such Assistant Secretaries and Assistant Treasurers as it may deem proper. None of the officers of the Trust need be Trustees. The officers shall be elected at the first meeting of the Board of Trustees after each annual meeting. More than one office may be held by the same person.
ARTICLE VI
A-16
ADVISOR
A-17
A-18
INVESTMENT POLICY
A-19
its Shareholders. Such determination by the Independent Trustees and the basis therefor shall be recorded in the minutes of the meeting of Trustees.
A-20
investments such as: (a) securities issued, insured or guaranteed by the United States government or government agencies, (b) savings accounts, (c) certificates of deposit, (d) bank money market accounts, (e) bankers’ acceptances or commercial paper rated A-1 or better by Moody’s Investors Service, Inc., (f) money market funds (including money market funds sponsored by the Sponsor or its Affiliates) having assets in excess of $50 million, (g) other short-term highly liquid investments with banks having a net worth of at least $50 million, (h) investments which yield “qualified temporary investment income” within the meaning of Section 856(c)(6)(D) of the Code, and (i) any combination of the foregoing investments.
A-21
A-22
ARTICLE VII
THE SHARES AND SHAREHOLDERS
A-23
A-24
MISCELLANEOUS
A-25
ARTICLE VIII
DURATION, AMENDMENT
AND TERMINATION PROCEDURE
A-26
ARTICLE IX
EXCULPATION AND
INDEMNIFICATION AND OTHER MATTERS
A-27
ARTICLE X
EXCESS SHARES
A-28
A-29
ARTICLE XI
CONVERSION TRANSACTIONS
ARTICLE XII
ROLL
A-30
MISCELLANEOUS
Arthur P. Fisch
J. Michael Fried
A-31
Appendix B
NOTE:
AMERICAN MORTGAGE ACCEPTANCE COMPANY
AMENDED AND RESTATED BYLAWS
ARTICLE I
DEFINITIONS
B-1
B-2
B-3
B-4
MEETING OF SHAREHOLDERS
B-5
B-6
TRUSTEES
B-7
either signed the Declaration of Trust or agreed in writing to be bound by it. No bond shall be required to secure the performance of a Trustee unless the Trustees so provide or as required by law.
B-8
B-9
B-10
B-11
in as Trustees, as determined by resolution of the Board of Trustees. Additionally, Independent Trustees shall be reimbursed for travel expenses and other out-of-pocket disbursements incurred in connection with attending any meetings. Non-Independent Trustees shall not receive any compensation from the Trust. Nothing herein contained shall be construed to preclude any non-Independent Trustee from serving the Trust in any other capacity as an officer, agent or otherwise, and receiving compensation therefor. Independent Trustees shall not perform any services for the Trust except as Trustees.
OFFICERS
B-12
INVESTMENT POLICY
B-13
B-14
B-15
ARTICLE VI
ADVISOR
B-16
B-17
SHARES AND SHAREHOLDERS
B-18
AMENDMENT OF BYLAWS
MISCELLANEOUS
B-19
Appendix C
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF TRUSTEES
I. | PURPOSE |
• | overseeing the integrity of the Company’s financial statements, |
• | overseeing the Company’s compliance with legal and regulatory requirements, |
• | overseeing the independent auditor’s qualifications and independence, |
• | overseeing the performance of the company’s independent auditor, and |
• | overseeing the Company’s system of disclosure controls and system of internal controls regarding finance, accounting, legal compliance, and ethics that management and the Board have established. |
II. | COMPOSITION AND MEETINGS |
C-1
III. | RESPONSIBILITIES AND DUTIES |
Documents/Reports/Accounting Information Review
1. | Review this Charter periodically, at least annually, and recommend to the Board of Trustees any necessary amendments as conditions dictate. |
2. | Review and discuss with management the Company’s annual financial statements, quarterly financial statements, and all internal controls reports (or summaries thereof). Review other relevant reports or financial information submitted by the Company to any governmental body, or the public, including management certifications as required by the Sarbanes-Oxley Act of 2002 (Sections 302, 404 and 906) and relevant reports rendered by the independent auditors (or summaries thereof). |
3. | Recommend to the Board whether the financial statements should be included in the Annual Report on Form 10-K. Review with financial management and the independent auditors the 10-Q prior to its filing (or prior to the release of earnings). |
4. | Review earnings press releases with management, including review of “pro-forma” or “adjusted” non-GAAP information. |
5. | Discuss with management financial information and earnings guidance provided to analysts and rating agencies. Such discussions may be on general terms (i.e., discussion of the types of information to be disclosed and the type of presentation to be made). |
Independent Auditors
6. | Appoint (subject to shareholder ratification, if applicable), compensate, and oversee the work performed by the independent auditor for the purpose of preparing or issuing an audit report or related work. Review the performance of the independent auditors and remove the independent auditors if circumstances warrant. The independent auditors shall report directly to the audit committee and the audit committee shall oversee the resolution of disagreements between management and the independent auditors in the event that they arise. The committee will review the experience and qualifications of senior members of the independent audit team annually and ensure that all partner rotation requirements, as promulgated by applicable rules and regulations, are executed. The committee will also consider whether the auditor’s performance of permissible nonaudit services is compatible with the auditor’s independence. |
7. | Review with the independent auditor any problems or difficulties and management’s response; review the independent auditor’s attestation and report on management’s internal control report; and hold timely discussions with the independent auditors regarding the following: |
• | all critical accounting policies and practices; |
• | all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; |
• | other material written communications between the independent auditor and management including, but not limited to, the management letter and schedule of unadjusted differences; and |
• | an analysis of the auditor’s judgment as to the quality of the Company’s accounting principles, setting forth significant reporting issues and judgments made in connection with the preparation of the financial statements. |
C-2
8. | At least annually, obtain and review a report by the independent auditor describing: |
• | the firm’s internal quality control procedures; |
• | any material issues raised by the most recent internal quality-control review, peer review, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and |
• | (to assess the auditor’s independence) all relationships between the independent auditor and the Company. |
9. | Review and preapprove both audit and nonaudit services to be provided by the independent auditor (other than with respect tode minimis exceptions permitted by the Sarbanes-Oxley Act of 2002). This duty may be delegated to one or more designated members of the audit committee with any such preapproval reported to the audit committee at its next regularly scheduled meeting. Approval of nonaudit services shall be disclosed to investors in periodic reports required by Section 13(a) of the Securities Exchange Act of 1934. |
10. | Set clear hiring policies, compliant with governing laws or regulations, for employees or former employees of the independent auditor. |
Financial Reporting Processes and Accounting Policies
11. | In consultation with the independent auditors, review the integrity of the organization’s financial reporting processes (both internal and external), and the internal control structure (including disclosure controls). |
12. | Review with management major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles, and major issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material control deficiencies. |
13. | Review analyses prepared by management (and the independent auditor as noted in item 7 above) setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements. |
14. | Review with management the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company. |
15. | Establish and maintain procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting, or auditing matters. |
16. | Establish and maintain procedures for the confidential, anonymous submission by Company employees regarding questionable accounting or auditing matters. |
Legal Compliance and Risk Management
17. | Review, with the organization’s counsel, any legal matter that could have a significant impact on the organization’s financial statements. |
18. | Discuss policies with respect to risk assessment and risk management. Such discussions should include the Company’s major financial and accounting risk exposures and the steps management has undertaken to control them. |
Other Responsibilities
19. | Review with the independent auditors and management the extent to which changes or improvements in financial or accounting practices, as approved by the Audit Committee, have been implemented. (This review should be conducted at an appropriate time subsequent to implementation of changes or improvements, as decided by the Committee.) |
C-3
20. | Prepare the report that the SEC requires be included in the Company’s annual proxy statement. |
21. | Annually, perform a self-assessment relative to the Audit Committee’s purpose, duties and responsibilities outlined herein. |
22. | Perform any other activities consistent with this Charter, the Company’s by-laws and governing law, as the Committee or the Board deems necessary or appropriate. |
23. | Oversee compliance with the Company’s Code of Conduct and oversee and review such code and recommend changes as necessary. |
C-4
Dear Shareholder:
Please take note of the important information enclosed with this proxy. There are a number of issues related to the operation of American Mortgage Acceptance Company (“AMAC”) that require your immediate attention.
Your vote counts, and you are strongly encouraged to exercise your right to vote your shares.
You can vote your shares by Internet. Follow the instructions on the reverse side of the proxy card if you wish to do so.
If you choose to vote by mail, please mark the boxes on the proxy card to indicate how your shares will be voted. Then sign the card, detach it, and return your proxy in the enclosed postage-paid envelope.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
American Mortgage Acceptance Company
DETACH HERE
ZAMA42
AMERICAN MORTGAGE ACCEPTANCE COMPANY
625 Madison Avenue
New York, New York 10022
SOLICITED BY THE BOARD OF TRUSTEES
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Stuart J. Boesky and Alan P. Hirmes, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side, all common shares of American Mortgage Acceptance Company (“AMAC”) held of record by the undersigned on April 1, 2005, at the Annual Meeting of Shareholders to be held on June 8, 2005, and any adjournments thereof.
THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS INSTRUCTED. IF THIS PROXY IS EXECUTED BUT NO INSTRUCTION IS GIVEN, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST “FOR” THE PROPOSALS AS DESCRIBED IN THE PROXY STATEMENT AND IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
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SEE REVERSE | CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SEE REVERSE |
AMERICAN MORTGAGE
ACCEPTANCE COMPANY
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
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Your vote is important. Please vote immediately.
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| Log on to the Internet and go to http://www.eproxyvote.com/amc |
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If you vote over the Internet, please do not mail your card.
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
ZAMA41
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| votes as in |
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| this example. |
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1. | Election of Trustees. |
| 2. | The approval of an amendment and restatement of our Company’s Second Amended and Restated Declaration of Trust which reflects the following significant amendments: | ||||||||||||||||
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| FOR |
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| 2a. | The transfer of provisions with respect to our investment policy from our declaration of trust to our bylaws: |
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| MARK HERE |
| 2b. | The transfer of provisions with respect to our debt policy from our declaration of trust to our bylaws: |
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| FOR ADDRESS |
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| ALL |
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| NOMINEES |
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| NOTE BELOW |
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| 2c. | The transfer of provisions with respect to our operating procedures from our declaration of trust to our bylaws: |
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| 2d. | The reduction in the vote required to approve a conversion transaction or a roll-up from 80% to a majority vote: |
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| For all nominees except as noted above |
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| 3. | Approval of any postponements or adjournments of the annual meeting if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the annual meeting to approve proposals 1 & 2: |
| FOR |
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| 4. | In their discretion, the proxies are authorized to vote upon any other business that may properly come before the meeting. | ||||||
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| Please sign exactly as name appears hereon. Joint owners should each sign. Executors, administrators, trustees, and guardians or other fiduciaries should give full title as such. If signing for a corporation, please sign in full corporate name by a duly authorized officer. | |||||||
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Signature: |
| Date: |
| Signature: |
| Date: |
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