UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
__Preliminary Proxy Statement
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X Definitive Proxy Statement
__Definitive Additional Materials
__Soliciting Material Pursuant to ss. 240.14a-12
American Church Mortgage Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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previously. Identify the previous filing by registration statement number,
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AMERICAN CHURCH MORTGAGE COMPANY
10237 YELLOW CIRCLE DRIVE
MINNETONKA, MINNESOTA 55343
(952) 945-9455
May 22, 2009
Dear Shareholder:
You are invited to attend the 2009 Annual Meeting of Shareholders of
American Church Mortgage Company to be held at 10237 Yellow Circle Drive,
Minnetonka, Minnesota, 55343, on June 25, 2009 at 10:00 a.m., local time.
The attached Notice of Annual Meeting and proxy statement describes each
business proposal for your action. After the business of the meeting has been
concluded, shareholders will be given an opportunity to ask appropriate
questions.
The proposals and the vote the Board of Directors recommends are:
Recommended Vote
Proposal
1. Election of four (4) directors to hold office until the next annual
meeting of shareholders and until their successors have been duly FOR
elected and qualified.
2. Ratification of the appointment of Boulay, Heutmaker, Zibell & Co.,
P.L.L.P. as our independent registered public accounting firm for the FOR
year ending December 31, 2009.
A notice of Annual Meeting, a form of proxy and a proxy statement
containing information about the matters to be acted upon at the Annual Meeting
of Shareholders are enclosed. A copy of the Company's Annual Report on Form 10-K
is also enclosed, but should not be considered proxy solicitation material. Upon
written request, the Company will provide each shareholder being solicited by
this proxy statement with a free copy of any exhibits and schedules thereto. All
such requests should be directed to our office at: 10237 Yellow Circle Drive,
Minnetonka, Minnesota, 55343, Attn: Philip J. Myers, Corporate Secretary and
President.
Your vote is very important and we urge you to 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
/s/ Philip J. Myers
---------------------------
Philip J. Myers
President
AMERICAN CHURCH MORTGAGE COMPANY
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 2009
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 ACMC's office
at 10237 Yellow Circle Drive, Minnetonka, Minnesota, 55343, at 10:00 a.m., local
time, on June 25, 2009.
This meeting is being held for the following purposes:
1. To elect four (4) persons to serve as directors until the next annual
meeting of shareholders and until their successors are duly elected
and qualified.
2. To ratify the appointment of Boulay, Heutmaker, Zibell & Co., P.L.L.P.
as our independent registered public accounting firm for the year
ending December 31, 2009.
3. T o transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on May 18, 2009 will
be entitled to notice of or to vote at the meeting or any adjournment thereof.
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. If there are not sufficient votes for a quorum or to
approve or ratify any of the foregoing proposals at the time of the Annual
Meeting, the Annual Meeting may be adjourned in order to permit further
solicitation of proxies by the Company.
Each of you is invited to attend the Annual Meeting in person, if possible.
Whether or not you plan to attend in person, please mark, date and sign the
enclosed proxy, and mail it promptly. A return envelope is enclosed for your
convenience.
For ten days prior to the meeting, a complete list of shareholders entitled
to vote at the meeting will be available for examination by any shareholder, for
any purpose relating to the meeting, during normal business hours at the our
offices. This list will also be available at the Annual Meeting.
By Order of the Board of Directors,
/s/ Philip J. Myers
-----------------------------------
Philip J. Myers, President and Secretary
Minnetonka, Minnesota
May 22, 2009
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WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL
MEETING, PLEASE SIGN THE PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE.
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders to Be Held on June 25, 2009.
The proxy materials, including the proxy statement and
the 2008 Annual Report are available at the
"Investors Relations" tab on our website at:
www.church-loans.net.
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AMERICAN CHURCH MORTGAGE COMPANY
10237 YELLOW CIRCLE DRIVE
MINNETONKA, MINNESOTA 55343
(952) 945-9455
---------------
PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
JUNE 25, 2009
This proxy statement and the accompanying proxy card are being mailed,
beginning on May 22, 2009, to owners of common shares of American Church
Mortgage Company in connection with the solicitation of proxies by the Board of
Directors for our 2009 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 3
PROPOSAL 1: ELECTION OF DIRECTORS 6
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HOW DOES THE BOARD OPERATE? 8
HOW ARE EXECUTIVES AND DIRECTORS COMPENSATED? 8
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERENANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT 9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 13
EXECUTIVE COMPENSATION AND EQUITY COMPENSATION PLANS 14
DIRECTOR COMPENSATION 14
PRINCIPAL ACCOUNTANT FEES AND SERVICES 15
PROPOSAL 2: APPROVAL OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 16
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SHAREHOLDER PROPOSALS FOR THE 2010 ANNUAL MEETING OF
SHAREHOLDERS 16
OTHER MATTERS 16
EXHIBITS
ANNUAL REPORT ON FORM 10-K
PROXY
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GENERAL INFORMATION
The questions and answers set forth below provide general information
regarding this proxy statement and our Annual Meeting of Shareholders.
When are our annual report to shareholders and this proxy statement first being
sent to shareholders?
This proxy statement is being sent to shareholders beginning on May 22,
2009. The Company's 2008 Annual Report to Shareholders on Form 10-K accompanies
this proxy statement.
What am I voting on?
1. The election of four (4) Board members, each for a one-year term or
until their successors are elected and qualified.
2. The ratification of the appointment of Boulay, Heutmaker, Zibell &
Co., P.L.L.P. as our independent registered public accounting firm for
the year ending December 31, 2009.
The Board of Directors recommends that you vote "FOR" each proposal.
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 May 18, 2009 may
vote at the Annual Meeting. Each share has one vote. There were 2,472,081 common
shares outstanding on April 30, 2009 and the Company believes such number shall
also be outstanding on May 18, 2009.
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. However, if you would like to attend in person and need
directions to the Company's offices where the Annual Meeting will be held,
please contact our Corporate Secretary and President, Philip J. Myers at (952)
945-9455.
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 as you direct without your attendance. If you complete and return
the enclosed proxy card, your shares will be voted by your proxy as you instruct
on your returned proxy card.
By completing and returning the proxy card, whom am I designating as my proxy?
You will be designating Philip J. Myers and Scott J. Marquis 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.
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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 the
proposals, your proxy will vote: "FOR" the election of Philip J. Myers, Kirbyjon
H. Caldwell, Dennis J. Doyle and Michael G. Holmquist as Directors and "FOR" the
ratification of the appointment of our independent registered public accounting
firm. 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:
o Notifying our Corporate Secretary, Philip J. Myers, in writing at
10237 Yellow Circle Drive, Minnetonka, Minnesota 55343, that you are
revoking your proxy;
o Executing a later-dated proxy card; or
o Attending and voting by ballot at the Annual Meeting.
Is my vote confidential?
Yes, only certain of our officers will have access to your card.
Who will count the votes?
An officer of American Church Mortgage Company will act as the inspector of
election and will count the votes.
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What constitutes a quorum?
As of April 30, 2009, 2,472,081 of our common shares were issued and
outstanding and the Company believes such number shall also be outstanding on
May 18, 2009. The holders of one-third (1/3) of the shares outstanding and
entitled to vote, represented either in person or by proxy, constitute a quorum
for the transaction of business. 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 June
25, 2009, 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 and appointment of our independent registered
public accounting firm, votes may be cast for or against the proposal or the
proxy may be instructed to abstain. Abstentions will be treated as "No" votes.
What percentage of the Company's common shares do the directors and executive
officers own?
Our Board of Directors and executive officers beneficially owned 1.1% of
our common shares as of April 30, 2009. (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. Computershare Trust Company,
Inc., our transfer agent, will be assisting us for a fee, plus out-of-pocket
expenses. In 2008, we paid Computershare approximately $3,100, which included
out-of-pocket expenses, for assisting us with our proxy solicitation. 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.
Can I vote on-line over the Internet?
We currently do not offer to shareholders on-line voting over the Internet.
The Company has determined the cost to provide internet on-line voting to be
prohibitive at this time. However, you may view and download the proxy
materials, including the proxy statement and the Company's Annual Report on Form
10-K from our website. The website to view and download this information is
www.church-loans.net under the "Investor Relations" tab. References to our
website are not intended to and do not incorporate information found on the
website into this proxy statement.
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Do we have any significant shareholders?
We have no shareholders who beneficially owned more than 5.0% of our stock
as of April 30, 2009.
When are shareholder proposals for the year 2010 shareholder meeting due?
Shareholder proposals to be presented at the 2010 Annual Meeting must be
submitted in writing by December 31, 2009 to Philip J. Myers, 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 2010 Annual
Meeting of Shareholders" and "Election of Directors" for information regarding
certain procedures with respect to shareholder proposals and nominations of
Directors.)
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PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to our Bylaws, the Board has fixed at four (4) the number of
directors to be elected at the Annual Meeting. 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 is 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 four (4) nominees who receive the highest number of votes will be
elected as directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF THE BOARD NOMINEES LISTED BELOW.
Nominees
The following table sets forth certain information regarding the
nominees.
Name Age Biographical Summary Director
Since
Philip J. Myers 53 Mr. Myers has been our Chairman, President, Treasurer and 2001
Secretary since April 2001. He has also served as President,
Treasurer, shareholder and a director of our Advisor, Church
Loan Advisors, Inc. since 1994, President, Secretary, and a
director of American Investors Group, Inc., an underwriter of
our securities offerings, since 1996, and of its parent
company, Apostle Holdings Corp. since 2000. Mr. Myers has been
an officer of American Investors Group, Inc. and has engaged
directly in church mortgage lending since 1989. He earned his
bachelor of arts degree in political science in 1977 from the
State University of New York at Binghamton and his juris doctor
degree from the State University of New York at Buffalo School
of Law in 1980. From 1980 to 1982, Mr. Myers served as an
attorney in the Division of Market Regulation of the U.S.
Securities and Exchange Commission in Washington, D.C. and,
from 1982 to 1984, as an attorney with the Division of
Enforcement of the Securities and Exchange Commission in San
Francisco. From August 1984 to January 1986, he was employed as
an attorney with the San Francisco law firm of Wilson, Ryan and
Compilongo where he specialized in corporate finance,
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securities and broker-dealer matters. From January 1986 to
January 1989, Mr. Myers was Senior Vice President and General
Counsel of Financial Planners Equity Corporation, a 400 broker
securities dealer formerly located in Marin County, California.
He became affiliated with American Investors Group, Inc. in
1989. He is an inactive member of the New York, California and
Minnesota State Bar Associations. Mr. Myers holds General
Securities Representative and General Securities Principal
licenses with the National Association of Securities Dealers,
Inc.
Kirbyjon H. Caldwell 55 Mr. Caldwell has served as an independent director of the 1994
Company since 1994. He has been Senior Pastor of Windsor
Village United Methodist Church in Houston, Texas since January
1982. The membership of Windsor Village is approximately
14,400. Mr. Caldwell received his B.A. degree in Economics from
Carlton College (1975), an M.B.A. in Finance from the
University of Pennsylvania's 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 Continental Airlines, National Children's Defense Fund,
Baylor College of Medicine, Greater Houston Partnership,
Advisory Board of Amergy Bank of Texas, Reliant Energy,
Bridgeway Capital Management and the American Cancer Society.
He is also the founder and member of several foundations and
other community development organizations.
Dennis J. Doyle 56 Mr. Doyle has served as an independent director of the Company 1994
since 1994. He is a shareholder and co-founder of Welsh
Companies, Inc., Minneapolis, Minnesota, a full-service real
estate company involved in property management, brokerage,
investment sales, construction and commercial development.
Welsh Companies was co-founded by Mr. Doyle in 1978, and has
over 300 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 on a number of philanthropic
business boards.
Michael G. Holmquist 59 Mr. Holmquist has served as an independent director of the 2003
Company since 2003. Mr. Holmquist is a Certified Public
Accountant practicing from his office in Deephaven, Minnesota.
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Prior to entering the accounting field in 1977, he worked for
two years as a public school teacher and served four years in
the U.S. Coast Guard. He is a graduate of St. Olaf College.
Mr. Holmquist was an original incorporator of American
Investors Group and an employee of the firm from 1986-1989.
How does the Board operate?
During 2008, the Board of Directors had four meetings. The attendance
policy of the Board encourages and expects all board members to attend all Board
meetings. Last year, Mr. Myers and Mr. Holmquist attended 100% of the meetings
held. Mr. Caldwell attended three meetings and Mr. Doyle attended two meetings.
The Company encourages attendance at the Annual Shareholder Meeting, but
has no policy regarding attendance in light of the fact that very few
shareholders attend the Annual Meeting in person. One director attended the 2008
Annual Shareholder Meeting. Our directors are invited, and frequently one or
more of our directors are in attendance at the Annual Meeting.
The Board has no separately-designated standing audit committee,
compensation committee, nominating or executive committee. The Company's entire
Board performs the functions of an audit committee, but the Board has not
designated an "audit committee financial expert." The Company believes that
several of its independent directors qualify for such a designation, but does
not believe the designation of a specific individual is necessary at this time
since the Company is managed by its advisor, Church Loan Advisors, Inc. (the
"Advisor").
The Company's Directors take a critical role in guiding the Company's
strategic direction. Since 1994, we have had very little turnover on the Board.
As such, the Company does not have a separate nominating committee. When Board
candidates are considered, they are evaluated based upon their ability to
qualify as independent directors under Section 3.3 of the Company's Bylaws and
other various criteria, such as their broad-based business and professional
skills and experiences, experience serving as management or on the board of
directors of companies such as the Company, concern for the long-term interests
of the shareholders, financial literacy and personal integrity in judgment. In
addition, director candidates must have time available to devote to Board
activities. Accordingly, the Board seeks to attract and retain highly qualified
directors who have sufficient time to attend to their duties and
responsibilities to the Company. See "Qualifications of Candidates for Election
to the Board" and "Process for Identifying and Evaluating Candidates for
Election to the Board" below for further discussion of how the Board operates in
connection with nominations.
How are Executives and Directors compensated?
Since inception, the Company has not had employees and the Company has only
one executive officer, Philip J. Myers, who serves in several capacities and is
not compensated for such position. The Company's business is managed by the
Advisor. The actions and decisions of the Company and the Advisor are governed
by the Company's independent directors and pursuant to the Company's Bylaws and
the Advisory Agreement. Both of these documents substantially comply with the
NASAA REIT Guidelines, which include substantive limitations
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on, among other things, conflicts of interest and related party transactions. As
such, the Company has not adopted a Code of Ethics.
In addition, because the Company has no employees, and because Mr. Myers is
not compensated by the Company, there is no Company compensation committee.
However, we currently pay each independent director $500 for each board meeting
attended ($400 for telephonic meetings), limited to $2,500 per year. We also
reimburse directors for travel expenses incurred in connection with their duties
as our directors. Please see "Director Compensation" on page 15. As a
non-independent director, Philip J. Myers receives no compensation or
reimbursements in connection with his service on our Board of Directors.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND
CORPORATE GOVERENANCE; COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT
Qualifications of Candidates for Election to the Board
The Company's Directors take a critical role in guiding the Company's
strategic direction. Since 1994, we have had very little turnover on the Board.
See "Election of Directors." As such, the Company does not have a separate
nominating committee. When Board candidates are considered, they are evaluated
based upon their ability to qualify as independent directors under Section 3.3
of the Company's Bylaws and other various criteria, such as their broad-based
business and professional skills and experiences, experience serving as
management or on the board of directors of companies such as the Company,
concern for the long-term interests of the shareholders, financial literacy and
personal integrity in judgment. In addition, director candidates must have time
available to devote to Board activities. Accordingly, the Board seeks to attract
and retain highly qualified directors who have sufficient time to attend to
their duties and responsibilities to the Company. Recent developments in
corporate governance and financial reporting have resulted in an increased
demand for such highly-qualified and productive public company directors. The
Company's Bylaws are available at the "Investors Relations" tab on our website,
www.church-loans.net, and on American Investors Group Inc.'s website,
www.churchbondsusa.com, under the heading "Library." References to these
websites are not intended to and do not incorporate information found on such
websites into this proxy statement.
Process for Identifying and Evaluating Candidates for Election to the Board
The Company's Board of Directors has no separate nominating committee,
however, management of the Company reviews the qualifications and backgrounds of
the Directors, as well as the overall composition of the Board, and recommends
to the full Board of Directors the persons to be nominated for election at each
annual meeting of shareholders of the Company. In the case of incumbent
directors, the Board reviews such directors' overall service to the Company,
including the number of meetings attended, level of participation, quality of
performance, and whether the director continues to meet the applicable
independence standards. In the case of any new director candidates, the
questions of independence and financial expertise are important to determine
what roles can be performed by the candidate, and the Board determines whether
the candidate meets the applicable independence standards and the level of the
candidate's financial expertise. Any new candidates would be interviewed by the
management of the Company and, if appropriate, then by all members of the Board.
The full Board will approve the final nominations.
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The Chairman of the Board, acting on behalf of the full Board, will extend the
formal invitation to become a nominee of the Board of Directors.
Shareholder Nominations of Director Candidates
Shareholders may nominate Director candidates for consideration by
management of the Company by writing to Philip J. Myers and providing to Mr.
Myers the candidate's name, biographical data and qualifications, including
five-year employment history with employer names and a description of the
employer's business; whether such individual can read and understand fundamental
financial statements; other board memberships (if any); and such other
information as reasonably available and sufficient to evaluate the minimum
qualifications stated above under the section of this proxy statement entitled
"Qualifications of Candidates for Election to the Board." The submission must be
accompanied by a written consent of the individual to stand for election if
nominated by the Board of Directors and to serve if elected by the shareholders.
Written notice must be given at least 120 days before the date of the next
annual meeting of shareholders. If a shareholder nominee is eligible, and if the
nomination is proper, management then will deliberate and make its
recommendation to the Board of Directors. For the 2009 Annual Meeting of
Shareholders, the Board of Directors did not receive nominations for director
candidates from eligible shareholders or groups of shareholders. Additionally,
there were no changes to the procedures by which shareholders may recommend
nominees to the Board since the Company's 2008 Annual Meeting of Shareholders.
Communications with the Board
Shareholders can communicate directly with the Board by writing to Mr.
Philip J. Myers or by calling Mr. Myers at (952) 945-9455 (x126) or via e-mail
at phil@amerinvest.com. All communications will be reviewed by management and
then forwarded to the appropriate director or directors or to the full Board, as
appropriate.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers and persons who own more than 10% of our outstanding
common stock to file with the Securities and Exchange Commission reports of
changes in their ownership of common stock. Officers, directors and greater than
10% stockholders are also required to furnish us with copies of all forms they
file under this regulation. To our knowledge during the year ended December 31,
2008, all Section 16(a) filing requirements applicable to our officers,
directors and greater than 10% stockholders were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
General
The Company's and the Advisor's activities are governed, in part, by the
Company's Bylaws and the Advisory Agreement. Both of these documents
substantially comply with the NASAA REIT Guidelines, which include substantive
limitations on, among other things,
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conflicts of interest and related party transactions. Other than with respect to
the purchase and sale of church bonds for our portfolio in the ordinary course
of business, as described below, all future transactions between us and our
officers, directors and affiliates must be approved, in advance, by a majority
of our independent directors.
Our Advisor
Subject to the supervision of the Board of Directors, our business is
managed by Church Loan Advisors, Inc. (our "Advisor"), which provides investment
advisory and administrative services. Church Loan Advisors, Inc. is a Minnesota
corporation and has acted as our Advisor since inception in 1994. Our Advisor
renders lending and advisory services solely to us, and administers 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
Our Advisory Agreement
We have entered into a contract with our Advisor (the "Advisory Agreement")
under which our Advisor furnishes advice and recommendations concerning our
affairs, provides administrative services to us, and manages our day-to-day
affairs. In performing its services under the Advisory Agreement, our Advisor
may use facilities, personnel and support services of its affiliates. Expenses,
such as legal and accounting fees, director fees, stock transfer agent and
registrar and paying agent fees, are our direct expenses and are not provided
for by our Advisor as part of its services.
The Advisory Agreement is renewable annually by us for one-year periods,
subject to a determination, by a majority of our independent directors, that our
Advisor's performance has been satisfactory and that the compensation paid by us
to our Advisor has been reasonable. The Advisory Agreement was reviewed and
renewed for a one-year period on April 24, 2008. We may terminate the Advisory
Agreement without cause or penalty 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. However, we
may continue to use the word "church" in our name. Our directors must determine
that any successor Advisor possesses sufficient qualifications to perform the
Advisory function for us and justify the compensation provided for in its
contract with us.
Pursuant to the Advisory Agreement, our 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 officers 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
-12-
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 the 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 (before interest expense), 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. Our 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 our independent directors are to determine, at
least annually, the reasonableness of the compensation which we pay to our
Advisor. Factors to be considered in reviewing the Advisory fee include the size
of the fees of the Advisor in relation to the size and composition of our
assets, our profitability, the rates charged by other investment advisors
performing comparable services, the success of our Advisor in generating
opportunities that meet our investment objectives, the amount of additional
revenues realized by our Advisor for other services performed, the quality and
extent of service and advice furnished by our Advisor, the quality of our
investments in relation to investments generated by our Advisor for its own
account, if any, and the performance of our investments.
Pursuant to the Advisory Agreement, we pay our Advisor an annual base
management fee of 1.25% of average invested assets on the first $35 million of
such assets, 1.00% on assets from $35 million to $50 million, and .75% on assets
in excess of $50 million. Although entitled to do so, the Advisor does not
assess its management fee on the church bond portion of our portfolio, but
rather only on the church loan portion of our portfolio. For purposes of the
Advisory Agreement, the Company's Invested Assets means outstanding church
loans, and does not include church bonds or cash equivalent temporary
investments. As defined in the Advisory Agreement, we 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, 2008 and
2007, we paid our Advisor $452,000 and $487,000, respectively.
American Investors Group, Inc.
In the course of our business, we have purchased and may continue to
purchase church bonds being underwritten and sold by American Investors Group,
Inc., an affiliate of our Advisor. Mr. Myers owns 20% of and has been President,
Treasurer and a director of American Investors Group, Inc. since 1996. Although
we have not and would not pay any commissions, American Investors Group, Inc.
benefits from such purchases as a result of commissions paid to it by the issuer
of the bonds. It also may benefit from mark-ups on bonds we buy from it and
mark-downs on bonds we sell through it on the secondary market. We purchase
church bonds for investment purposes only, and only at the public offering
price. Church bonds we purchase in the secondary market, if any, are 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 Investors Group, Inc. Our principals and our Advisor may
receive a benefit in connection with such transactions due to their affiliation
with the underwriter.
-13-
Director Independence
The Company's Board of Directors has determined that each of Dennis J.
Doyle, Kirbyjon H. Caldwell and Michael G. Holmquist are "independent," as that
term is defined in NASAA REIT Guidelines and in Rule 4200(a)(15) of the NASDAQ
Marketplace Rules. Accordingly, the Board is composed of a majority of
independent directors. There are no transactions with the directors which were
evaluated in connection with the Board's determination of the independence or
which have not already been disclosed elsewhere in this proxy statement.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth as of April 30, 2009, the number of shares
beneficially owned by each director and by all executive officers and directors
as a group, and any beneficial owners of 5% or more of our outstanding stock,
based on 2,472,081 shares of common stock outstanding at that date. 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.
============================================================ ======================= =====================
Number of
Shares of Common Stock Percent
Beneficially of
Name and address of Beneficial Owner (1) Owned Class
- ------------------------------------------------------------ ----------------------- ---------------------
Philip J. Myers 26,514 (2) 1.0%
- ------------------------------------------------------------ ----------------------- ---------------------
Kirbyjon H. Caldwell -- --
- ------------------------------------------------------------ ----------------------- ---------------------
Dennis J. Doyle -- --
- ------------------------------------------------------------ ----------------------- ---------------------
Michael H. Holmquist -- --
- ------------------------------------------------------------ ----------------------- ---------------------
All Executive Officers and Directors as a Group
(five individuals) (3) 27,814 1.1%
============================================================ ======================= =====================
(1) The address for the Directors is 10237 Yellow Circle Drive,
Minnetonka, Minnesota 55343.
(2) Number does not include 7,563 shares owned by an affiliate of our
Advisor, which affiliate is 20% indirectly owned by Mr. Myers. Mr.
Myers disclaims beneficial ownership of these shares (representing 20%
of the shares owned by the affiliate), and does not have voting or
investment power over the shares.
(3) Includes 1,300 shares owned by Scott J. Marquis. Mr. Marquis is an
officer of our Advisor.
-14-
EXECUTIVE COMPENSATION AND EQUITY COMPENSATION PLANS
The Company pays no compensation to its officers and has no other
employees. The Company has no equity compensation plans. Because no compensation
or equity awards have been awarded to, earned by or paid to any executive
officer of the Company, the Company has not included any tables or charts
describing executive compensation. However, compensation paid to our directors
is described below.
DIRECTOR COMPENSATION
Fees
Earned
or Paid Non-Equity Non-Qualified All Other
in Stock Option Incentive Plan Incentive Plan Compensation Total
Name Cash(1) Awards Awards Compensation Compensation
- --- ------ ----- ------ -------------- -------------- ------------ ------
Kirbyjon H. $1,400 n/a n/a n/a n/a n/a $1,400
Caldwell
Dennis J. Doyle $1,200 n/a n/a n/a n/a n/a $1,200
Michael G. $1,600 n/a n/a n/a n/a $12,736 (2) $14,336
Holmquist
Philip J. n/a n/a n/a n/a n/a n/a --
Myers
Robert O. $200 n/a n/a n/a n/a n/a $200
Naegele,Jr. (3)
(1) All Directors, except Philip J. Myers, are paid $500 per board meeting
attended ($400 for telephonic meetings), limited to $2,500 per year,
and reimbursed for travel expenses incurred in connection with their
duties as directors.
(2) Mr. Holmquist was paid an additional $12,736 during 2008 for auditing
and testing the Company's internal controls to determine if the
Company has established and is maintaining an adequate system of
controls as defined by Section 404 of the Sarbanes-Oxley Act of 2002.
(3) Mr. Robert O. Naegele, Jr. resigned as a director on May 19, 2008.
-15-
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table presents fees billed to the Company by Boulay,
Heutmaker, Zibell & Co., P.L.L.P., the Company's independent registered public
accounting firm, for professional services rendered for the years ended December
31, 2008 and 2007.
..................................................................... .................................................
Years Ended December 31,
..................................................................... .................................................
..................................................................... ....................... .........................
2008 2007
..................................................................... ....................... .........................
..................................................................... ....................... .........................
Audit Fees (1) $ 85,805 $ 53,390
..................................................................... ....................... .........................
..................................................................... ....................... .........................
Audit-Related Fees (2) 930 -
..................................................................... ....................... .........................
..................................................................... ....................... .........................
Tax Fees (3) 3,685 3,815
..................................................................... ....................... .........................
..................................................................... ....................... .........................
All Other Fees (4) - 350
..................................................................... ....................... .........................
..................................................................... ....................... .........................
Total $ 90,420 $ 57,555
..................................................................... ....................... .........................
(1) Audit Fees consist of fees billed for professional services rendered
for the audit of the Company's annual financial statements and review
of the interim financial statements included in quarterly reports and
services that are normally provided by the Company's independent
registered public accounting firm in connection with statutory and
regulatory filings or engagements.
(2) Audit-Related Fees consist of fees billed for assurance and related
services that are reasonably related to the performance of the audit
or review of the Company's financial statements and are not reported
under "Audit Fees."
(3) Tax Fees consist of fees billed for professional services rendered for
tax compliance, tax advice and tax planning. (4) All Other Fees
consist of fees for products and services other than the services
reported above. In fiscal year 2007, the Company paid $350 for
assistance with a miscellaneous accounting matter.
Audit Committee Report
The Board has no separately-designated standing audit committee, and the
entire Board performs the functions of an audit committee. In this capacity, the
Board has reviewed and discussed the audited financial statements with
management and has discussed with management and the Company's external
auditors, Boulay, Heutmaker, Zibell & Co., P.L.L.P. ("BHZ"), the Company's
consolidated financial statements for the fiscal year ended December 31, 2008
and the Company's internal control over financial reporting. We also discussed
with BHZ the matters required to be discussed by Statement on Auditing Standards
No. 61, as amended (Communication with Audit Committees). BHZ provided to us the
written disclosures and the letter required by applicable requirements of the
Public Company Accounting Oversight Board regarding BHZ's communications with
the Board concerning independence, and we discussed BHZ's independence with
them. In determining BHZ's independence, we considered whether their provision
of non-audit
-16-
services to the Company was compatible with maintaining independence. We
received regular updates on BHZ's fees and the scope of audit and non-audit
services they provided. All such services were provided consistent with
applicable rules and our pre-approval policies and procedures.
Based on our discussions with management and our external auditors,
our review of the representations of management, we recommended that the
Company's audited consolidated financial statements for the fiscal year
ended December 31, 2008 be included in the Company's Annual Report on Form
10-K. We also approved, subject to shareholder ratification, the selection
of BHZ as the Company's independent auditors for the fiscal year ending
December 31, 2009.
Members of the Board:
Philip J. Myers
Kirbyjon H. Caldwell
Dennis J. Doyle
Michael G. Holmquist
-17-
PROPOSAL 2
APPROVAL OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Board recommends that the shareholders ratify the Board's appointment
of Boulay, Heutmaker, Zibell & Co., P.L.L.P. as the Company's independent
registered public accounting firm for the year ending December 31, 2009. Boulay,
Heutmaker, Zibell & Co., P.L.L.P. has served as our independent registered
public accounting firm since 1996.
No representative of Boulay, Heutmaker, Zibell & Co., P.L.L.P. is expected
to be present at the Annual Meeting.
SHAREHOLDER PROPOSALS FOR THE
2010 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 us, pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, so
that such notice is received by our Secretary by December 31, 2009. Any 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 our Bylaws, which require at least twenty (20) days' written
notice prior to the meeting stating with reasonable particularity the substance
of the proposal.
OTHER MATTERS
As of the date of this proxy statement, 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,
/s/ Philip J. Myers
---------------------------------
Philip J. Myers
President and Secretary
May 22, 2008
-18-
CORPORATE INFORMATION
DIRECTORS
Philip J. Myers, Chairman, President, Treasurer and Secretary
Kirbyjon H. Caldwell, Senior Pastor of Windsor Village United Methodist Church,
Houston, Texas
Dennis J. Doyle, Majority Owner and Co-Founder of Welsh Company, Inc.,
Minneapolis
Michael G. Holmquist, Certified Public Accountant
OFFICERS OF OUR ADVISOR
Philip J. Myers, President, Treasurer and Director
Scott J. Marquis, Vice President, Secretary
TRANSFER AGENT
Computershare Trust Company, Inc.
350 Indiana Street
Suite 800
Golden, CO 80401
303-262-0600
LEGAL COUNSEL
Winthrop & Weinstine, P.A.
Suite 3500
225 South Sixth Street
Minneapolis, MN 55402
INDEPENDENT ACCOUNTANT
Boulay, Heutmaker, Zibell & Co. P.L.L.P.
7500 Flying Cloud Drive, Suite 800
Minneapolis, MN 55344
COMMON STOCK INFORMATION
Our common stock is not regularly traded on any established market, however, it
was traded on the over-the-counter market pink sheets under the symbol "ACMC.PK"
from September 4, 2007 through December 31, 2008.
From time to time, we have repurchased shares of common stock offered to us for
sale. During fiscal year 2008, we repurchased 21,514 shares at $5.25 per share
from American Investors Group, Inc.
At April 30, 2009 we had 1,035 record holders of our common stock and an
undetermined number of additional beneficial owners.
2009 ANNUAL MEETING
Our Annual Meeting of Shareholders will be held at 10:00 a.m., local time, on
June 25, 2009 at our office, 10237 Yellow Circle Drive, Minnetonka, Minnesota
55343.
SHAREHOLDER CONTACT
Inquiries concerning ACMC 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
AMERICAN CHURCH MORTGAGE COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders to Be Held on June 25, 2009.
The proxy materials, including the proxy statement and the
2008 Annual Report are available at the
"Investors Relations" tab on our website at: www.church-loans.net.
PROXY
The undersigned hereby appoints Philip J. Myers and Scott J. Marquis as
Proxies, each with the power to appoint his substitute, and hereby authorizes
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
May 18, 2009, at the Annual Meeting of Shareholders to be held on June 25, 2009,
or any adjournment thereof.
PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE [X]
1. ELECTION OF DIRECTORS
01 Philip J. Myers
02 Kirbyjon H. Caldwell
03 Dennis J. Doyle
04 Michael G. Holmquist
__ 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 RATIFY THE APPOINTMENT OF BOULAY, HEUTMAKER, ZIBELL & CO.
PLLP as the Company's independent registered public accounting firm
for the year ending December 31, 2009.
__ FOR __ AGAINST __ ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
(CONTINUED FROM THE OTHER SIDE)
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 and 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both must sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full titles as such. If a corporation or other
entity, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign by authorized person.
Date: , 2009
-------------------------
-------------------------------------
SIGNATURE
-------------------------------------
TITLE (IF APPLICABLE)
-------------------------------------
SIGNATURE (IF HELD JOINTLY)
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
4464120v3