SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 10, 1997
AMERICAN ASSET ADVISERS TRUST, INC.
(Exact name of registrant as specified in its charter)
MARYLAND
(State or other jurisdiction of incorporation)
0-28378 76-0410050
(Commission File Number) (IRS Employer Identification No.)
Eight Greenway Plaza, Suite 824, Houston, Texas 77046
(Address of principal executive offices)
(800) 888-4400
(Registrant's Telephone Number, including Area Code)
Item 5: Other Events
Compass Bank Credit Line. Effective October 16, 1997, the Company
increased its credit line from Compass Bank of Houston, Texas (the
"Compass Bank Credit Line"). The credit agreement for this credit line
matures February 28, 1999. The agreement provides for unsecured
borrowings up to $15,000,000, on a revolving basis, depending on certain
covenants such as the value of unencumbered assets. The credit agreement
bears interest at 2% over the London Interbank Offered Rate ("LIBOR").
Proposed Amendments to Charter and Bylaws. The Company's Board of
Directors (the "Board") has called a special shareholders meeting for
November 3, 1997 to vote on certain amendments to the Company's Charter
and Bylaws. The record date for notice of the meeting is September 23,
1997. Notice of the meeting and proxy materials were mailed to
shareholders on or about October 10, 1997. The following amendments to
the Company's Charter and Bylaws are to be voted on at the special
meeting.
1. An amendment to the Company's Charter to increase the number of
shares the Company is authorized to issue from 25,000,000 shares of
common stock, par value $.01 per share, to 110,000,000 shares, par value
$.01 per share, 10,000,000 of which are preferred shares which may be
issued from time to time in such classes and series as the Board may
determine.
2. An amendment to the Company's Charter to allow the Company to
indemnify its directors, officers, employees and agents to the fullest
extent permitted under the corporation laws of the state of Maryland (the
"MGCL"), subject to the restrictions in the Company's Bylaws regarding
indemnification of non-Independent Directors. This proposal includes an
amendment to the Company's Bylaws to clarify the Company's ability to
indemnify its Independent Directors to the fullest extent permitted under
the MGCL.
3. An amendment to the Company's Charter to limit the liability of
the Company's directors and officers to non-monetary damages. If
approved, this amendment would permit the Company to limit the scope of
personal liability of directors and officers to the shareholders for
monetary damages except (i) to the extent that it is proved that the
director or officer actually received an improper benefit or profit or,
(ii) if a judgment or other final adjudication is entered in a proceeding
based on a finding that the director or officers action, or failure to
act, was the result of active and deliberate dishonesty and was material
to the cause of action, adjudicated in the proceeding, or (iii) if a
proceeding is brought by or in the right of the Company, indemnity may
not be made if a director is judged to be liable to the Company.
4. An amendment to the Company's Charter to:
(a) Require the Board use its reasonable best efforts to cause
the Company and its shareholders to qualify for taxation as a REIT;
(b) Allow the Board to authorize any agreement, contract,
arrangement or transaction with any person, corporation, or other entity
or organization where one or more of its directors, officers or
controlling persons may be a party to such agreement (i.e., such
agreements with Affiliates, so long as the procedures otherwise set forth
in the Company's Charter and/or Bylaws are followed;
(c) Allow the Board to issue from time to time shares of its
stock of any class, whether now or in the future authorized, or
securities convertible into shares of such stock, for such consideration
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as the Board may deem advisable, subject to such restrictions or
limitations, if any, as may be set forth in the Company's Charter or
Bylaws or in the general laws of the state of Maryland;
(d) Provide that determinations by the Board made in good faith
in a manner consistent with the Company's Charter and in the absence of
actual receipt of an improper benefit and money, property or services or
active or deliberate dishonesty established by a court, shall be final
and conclusive and shall be binding upon the Company and its
shareholders; and
(e) Provide that the enumeration and definition of particular
powers of the Board excluded from the Charter shall in no way be limited
or restricted by reference to or inference from the terms of any other
clause or provision of the Charter or construed or deemed by inference
or otherwise in any manner to exclude or limit the powers conferred upon
the Board under the general laws of the state of Maryland.
5. An amendment to the Company's Charter to clarify that the vote
of the shareholders is required to approve mergers and/or reorganizations
of the Company, the sale of all or substantially all of the Company's
assets and/or the dissolution and liquidation of the Company shall be a
simple majority.
6. An amendment to the Company's Bylaws to expressly provide that
the Directors shall not receive any stated salary for the services but
that the Board may, by resolution, receive payment for services at a
fixed sum per year, per meeting and/or for specified event or service to
the Board.
7. An amendment to the Company's Bylaws to expressly provide the
following restrictions on certain transactions involving the purchase of
properties from and the sale of leased properties to the Adviser, a
Director, or an Affiliate of such person as currently set forth under the
guidelines of the North American Association of Securities Administrators
("NASAA").
(a) The Company shall not purchase property from the
Adviser, a Director, or any Affiliate of such person, unless a majority
of Directors (including a majority of Independent Directors) not otherwise
interested in such transaction approve the transaction as being fair and
reasonable to the Company and at a price to the Company no greater than the
cost of the asset to such Advisor, Director or any Affiliate thereof, or if
the price to the Company is in excess of such cost, that substantial
justification for such excess exists and such excess is reasonable. In no
event shall the cost of such asset to the Company exceed its current
appraised value. The foregoing restrictions notwithstanding, the Company
may acquire a property from an Adviser or its Affiliate where such person
is acting only to facilitate the Company's purchase of the property and such
person does not receive a profit from the transaction except for the receipt
of fees not otherwise prohibited under these Bylaws;
(b) The Advisor, Director or any Affiliate thereof shall not acquire
assets from the Company unless approved by a majority of Directors
(including a majority of Independent Directors), not otherwise interested in
such transaction, as being fair and reasonable to the Company; and
(c) The Company may lease assets to the Advisor, a Director or any
Affiliate thereof only if approved by a majority of Directors (including a
majority of Independent Directors), not otherwise interested in such
transaction, as being fair and reasonable to the Company."
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8. An amendment to the Company's Bylaws to delete the prohibition
against the Company investing in securities of, or interests in persons
or other entities engaged in real estate activities, except as otherwise
permitted in connection with joint venture investments with another
entity.
9. An amendment to the Company's Bylaws to remove restrictions on
the amount of secured and unsecured borrowings by the Company except for
the restrictions currently set forth in the Company's Bylaws whereby the
total borrowings of the Company, both secured and unsecured, may not
exceed 300% of the Company's Net Assets, as defined, on a consolidated
basis. If approved, the Company will be able to increase its secured and
unsecured borrowings, subject to the foregoing limits, and borrowings on
individual properties, subject only to the finding by the Board that such
borrowing is in the best interests of the Company.
10. An amendment to the Company's Bylaws to expressly provide that
the Directors are not required to devote their full time to the affairs
of the Company and that any Director, Officer, employee or agent of the
Company, in his or her personal capacity or in a capacity as an
Affiliate, employee or agent of any other person or otherwise, may have
business interests and engage in business activities similar to or in
addition to those of or relating to the Company.
11. An amendment to the Company's Bylaws to:
(a ) Delete from the Company's Bylaws to specify that
the Company may not issue equity securities which are redeemable at the
election of the holder of such securities, but may be redeemable at the
election of the Company;
(b) Delete the restriction from the Company's Bylaws whereby the
Company is prohibited from acquiring securities in any company holding
an investment or engaging in activities in which the Company is
prohibited to invest or engage in; and
(c) Delete the provision from the Company's Bylaws whereby the
Company is prohibited from investing in the securities of other issuers
for the purposes of exerting control.
Only shareholders as of the record date will be eligible to vote at
the Special Meeting on the foregoing measures. Accordingly, persons
purchasing their shares after September 23, 1997, will have no right to
vote at the Special Meeting on these proposals, but they will be subject
to such proposals as are approved at the Special Meeting.
Item 7: Financial Statements and Exhibits
(a) Financial Statements
None.
(b) Pro Forma Financial Information
None.
(c) Exhibits
None.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereto duly authorized.
Dated: October 20, 1997 AMERICAN ASSET ADVISERS TRUST, INC.
By: /s/ L. Larry Mangum
L. Larry Mangum, Principal Accounting Officer
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