-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LKVkVVd9+DWDHkZ2RKjGkWGtqcaK6sNWs8Q+7GB7O/tlLt2uOC4zANEFKe/jQPIn 3YWRzKR8qnMKuYQcTyY01g== 0000350071-98-000009.txt : 19980324 0000350071-98-000009.hdr.sgml : 19980324 ACCESSION NUMBER: 0000350071-98-000009 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980420 FILED AS OF DATE: 19980323 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERRY LAND & INVESTMENT CO INC CENTRAL INDEX KEY: 0000350071 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 580961876 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-11081 FILM NUMBER: 98570750 BUSINESS ADDRESS: STREET 1: 624 ELLIS ST CITY: AUGUSTA STATE: GA ZIP: 30901 BUSINESS PHONE: 7067226756 MAIL ADDRESS: STREET 1: PO BOX 1417 CITY: AUGUSTA STATE: GA ZIP: 30903 DEF 14A 1 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant Filed by a Party other than the Registrant Check the appropriate box: Preliminary Proxy Statement Confidential, For Use of the Commission Only (as Permitted by Rule 14a-6(e) (2)) Definitive Proxy Statement Definitive Additional Materials Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12 Merry Land & Investment Company, Inc. - ------------------------------------------------------------------------------ (Name of Registrant as Specified in Its Charter) - ------------------------------------------------------------------------------ (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): No fee required. Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------- Fee paid previously with preliminary materials. Check box if any part of the fee is offset as provided by Exchange Act Rule 0-ll(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------------- NOTICE OF ANNUAL MEETING OF SHAREHOLDERS APRIL 20, 1998 TO THE SHAREHOLDERS OF MERRY LAND & INVESTMENT COMPANY, INC. The Annual Meeting of Shareholders of Merry Land & Investment Company, Inc. will be held at the RADISSON RIVERFRONT CENTER, TWO TENTH STREET, AUGUSTA, GEORGIA, ON MONDAY, APRIL 20, 1998, AT 10:00 A.M. for the following purposes: 1. TO ELECT SEVEN DIRECTORS TO HOLD OFFICE UNTIL THE NEXT ANNUAL MEETING OF SHAREHOLDERS OR UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED. 2. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT. The close of business on March 2, 1998 has been set by the directors as the record date for determination of the shareholders of the Company who are entitled to notice of and to vote at the meeting. A copy of the 1997 Annual Report is enclosed. ALL SHAREHOLDERS, ESPECIALLY THOSE WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, ARE REQUESTED TO DATE, VOTE AND SIGN THE ENCLOSED PROXY CARD, INDICATING ANY VOTING INSTRUCTIONS, AND TO RETURN IT IN THE ACCOMPANYING ENVELOPE. By order of the Board of Directors, W. HALE BARRETT Secretary March 23, 1998 PLEASE VOTE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY MERRY LAND & INVESTMENT COMPANY, INC. --------------- PROXY STATEMENT --------------- GENERAL This proxy statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors to be used at the Annual Meeting of Shareholders of Merry Land & Investment Company, Inc. to be held Monday, April 20, 1998 at the Radisson Riverfront Center, Two Tenth Street, Augusta, Georgia at 10:00 A.M. The Company's principal executive offices are located at 624 Ellis Street, Augusta, Georgia 30901 and its telephone number is 706/722-6756. This Proxy Statement and the enclosed proxy are being first mailed to the Company's Shareholders on or about March 23, 1998. VOTING When proxies are properly executed and returned, the shares of common stock they represent will be voted or abstained at the meeting in accordance with any directions noted. If no directions are noted, they will be voted to elect the directors nominated by the Board. The Company's management knows of no other matters to be presented or considered at the meeting; however, the proxies named shall have discretionary authority to vote on any other matter which may properly be presented at the meeting. In addition, the proxies named shall have the authority to vote for any person for election as a director in lieu of any person nominated if the nominee is unable to serve. It is not contemplated that any nominee will be unable to serve. The following rules govern voting at the Annual Meeting: A majority of the shares of common stock entitled to vote will constitute a quorum. Shares of common stock are counted for quorum purposes if they are represented for any purpose at the meeting other than solely to object to holding the meeting or transacting business at the meeting. Shares of preferred stock are not entitled to vote. For the election of directors a quorum must be present, either in person or by proxy, and a PLURALITY of the shares voting must vote in the affirmative. Abstentions and broker non-votes are neither counted for purposes of determining the number of affirmative votes required for the election of directors nor voted for or against matters presented for shareholder consideration. Consequently, so long as a quorum is present, abstentions and broker non-votes have no effect on the outcome of any vote. REVOCATION OF PROXIES Execution of the enclosed proxy will not affect the shareholder's right to attend the meeting and vote in person. A shareholder may revoke a proxy at any time before it is voted. SOLICITATION The accompanying proxy is solicited by the Company. The expense of solicitation, which is not expected to exceed the normal expense of a proxy solicitation for a meeting at which directors are elected, will be borne by the Company. DIRECTORS All directors of the Company are elected annually for terms of one year and hold office until their successors are elected and qualify. Unless instructed to the contrary, the accompanying proxy will be voted to elect as directors the persons named in the table below. The Company's Bylaws provide for a Board of Directors consisting of not less than three nor more than fifteen members. The number of directors is fixed at seven for the current year. The proxies may not be voted for more than seven directors. The table below shows the names and ages of all directors, their position with the Company, the period they have served as directors, the committees on which they serve, the amount and percentage of common stock beneficially owned and their business experience during the past five years. All of the following directors are nominated for re-election.
NAME, BUSINESS AGE POSITION DIRECTOR COMMON EXPERIENCE AND WITH COMPANY SINCE STOCK BENEFICIALLY OWNED(1) COMMITTEES AMOUNT PERCENTAGE(2) W. HALE BARRETT 69 Secretary and 1969 34,356 (3)(4) 0.09% Director Member of law firm of Hull, Towill, Norman & Barrett, P.C., counsel to the Company. Executive Committee. W. TENNENT HOUSTON 47 President, Chief 1986 451,414 (5)(6) 1.1% Executive Officer and Director President of the Company since 1985. Employee of the Company since 1981. Executive Committee. ROBERT P. KIRBY 61 Director 1997 15,000 (4) 0.04% Chief Executive Officer, Castleberry/Snow's Brands, Inc., Augusta, Georgia. Director of Gibson Greetings, Inc. and Community Coffee Company, Inc. Audit and Compensation Committee. BOONE A. KNOX 62 Chairman of the Board 1996 2,829,619 (7) 7.1% Chairman of the Board of the Company since 1996. Chairman of the Board of Regions Bank, Central Georgia. Director of Cousins Properties Incorporated. Executive Committee. HUGH CALVIN LONG II 46 Director 1994 24,596 (4)(8) 0.06% Capital Area President, First Union National Bank. Previously Regional Executive Vice President of First Union National Bank of Georgia. Audit and Compensation Committee. PAUL S. SIMON 66 Director 1997 16,000 (4) 0.04% Retired President, Morris Communications Corporation, Augusta, Georgia. Audit and Compensation Committee. MICHAEL N. THOMPSON 49 Executive Vice 1996 285,037 (9)(10) 0.7% President, Chief Operating Officer and Director Executive Vice President of the Company since January, 1997 and Vice President of the Company since August, 1992. Employee of the Company since February, 1992. President of Thompson & Wright, Inc., asset managers, from November, 1990 to January, 1992. Previously Executive Vice President, Great Southern Federal Savings Bank. Executive Committee.
(1) The shares shown were owned directly by the named person as of March 2, 1998 unless otherwise indicated. (2) Assumes 40,046,847 shares outstanding, including 39,496,847 shares outstanding as of March 2, 1998, and 550,000 shares issuable upon exercise of presently exercisable stock options held by Messrs. Houston and Thompson and the Company's other executive officers. (3) Includes 100 shares owned by Mr. Barrett's wife. (4) Messrs. Barrett, Long, Kirby and Simon each purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. They each purchased 10,000 shares of Company common stock on 1/17/97 at the market price of $21.50 by borrowing $215,000; and 5,000 shares of Company common stock purchased on 1/26/98 at the market price of $22.59 by borrowing $112,969. The maximum outstanding principal balance of Messrs. Barrett, Long, Kirby and Simon's loans totaled $215,000 in 1997 and totaled $318,609 on 3/2/98 for each director. (5) Includes 19,235 shares held in Mr. Houston's account in the Company's Employee Stock Ownership Plan ("ESOP"). Includes 74,695 shares in the ESOP which have not been allocated to the account of any Company employee and for which Mr. Houston holds voting power as sole trustee of the ESOP. Includes 135,000 shares issuable upon exercise of presently exercisable stock options. (6) Mr. Houston has purchased Company common stock at the market price with full recourse, interest free loans under the Company's stock loan program ("Stock Loan Program"). Mr. Houston purchased 25,000 shares on 9/14/92 at the market price of $10.75 per share by borrowing $268,750; 15,000 shares on 1/11/93 at the market price of $15.50 per share by borrowing $232,500; 25,000 shares on 9/1/93 at the market price of $18.75 per share by borrowing $468,750; 25,000 shares on 3/14/94 at the market price of $20.88 per share by borrowing $521,875; 35,000 shares on 6/15/95 at the market price of $19.00 per share by borrowing $665,000; and 50,000 shares on 1/26/98 at the market price of $22.59 per share by borrowing $1,129,688. The maximum outstanding principal balance of loans to Mr. Houston under the Stock Loan Program totaled $1,774,190 in 1997, $1,898,138 in 1996 and $1,986,075 in 1995 and totaled $2,783,463 on March 2, 1998. The Company has also extended Mr. Houston interest free, full recourse loans to exercise incentive stock options. The maximum outstanding principal balance of these loans totaled $24,589 in 1997, $38,471 in 1996 and $51,603 in 1995 and totaled $13,809 on March 2, 1998. (7) See "Voting Securities and Principal Holders". (8) Includes 6,096 shares owned by Mr. Long's wife and children. Mr. Long disclaims beneficial ownership of the shares owned by his wife and children. (9) Includes 7,163 shares owned by Mr. Thompson's wife and children. Includes 104,000 shares issuable upon exercise of presently exercisable stock options. Includes 4,441 shares held in Mr. Thompson's account in the Company's ESOP. (10) Mr. Thompson has purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. Mr. Thompson purchased 15,000 shares on 9/14/92 at the market price of $10.75 per share by borrowing $161,250; 15,000 shares on 1/11/93 at the market price of $15.50 per share by borrowing $232,500; 15,000 shares on 9/1/93 at the market price of $18.75 per share by borrowing $281,250; 20,000 shares on 3/14/94 at the market price of $20.88 per share by borrowing $417,500; 30,000 shares on 6/15/95 at the market price of $19.00 per share by borrowing $570,000; and 50,000 shares on 1/26/98 at the market price of $22.59 per share by borrowing $1,129,688. The maximum outstanding principal balance of loans to Mr. Thompson under the Stock Loan Program totaled $1,379,617 in 1997, $1,473,818 in 1996 and $1,540,650 in 1995 and totaled $2,417,790 on March 2, 1998. The Company has also extended Mr. Thompson interest free, full recourse loans to exercise incentive stock options. The maximum outstanding principal balance of these loans totaled $16,920 in 1997, $20,886 in 1996 and $24,638 in 1995 and totaled $13,066 on March 2, 1998. EXECUTIVE OFFICERS All executive officers of the Company are elected annually for terms of one year and hold office until their successors are elected and qualify. The table below shows the names and ages of all executive officers who are not directors, their position with the Company, the period they have served as executive officers, the amount and percentage of common stock beneficially owned and their business experience during the past five years.
NAME AND BUSINESS AGE POSITION COMMON EXPERIENCE WITH COMPANY STOCK BENEFICIALLY OWNED(1) AMOUNT PERCENTAGE(2) JOHN W. GIBSON 46 Senior Vice President 114,300 (3)(4) 0.3% Elected Senior Vice President upon joining the Company in January, 1997. Previously member of law firm of Hull, Towill, Norman & Barrett, P.C., counsel to the Company. JOSEPH P. BAILEY III 39 Vice President 175,627 (5)(6) 0.4% Vice President of the Company since August, 1992. Employee of the Company since 1989. RONALD J. BENTON 40 Vice President 190,547 (7)(8) 0.5% Vice President of the Company since January, 1995. Controller of the Company since January, 1986. Employee of the Company since 1984. J. RUSS DAVIS, JR. 38 Vice President 85,000 (9)(10) 0.2% Vice President of the Company since joining in May, 1997. Previously President and Chief Operating Officer of Trammell Crow Residential Services, Midwest, Chicago. DORRIE E. GREEN 39 Vice President and 139,104 (11)(12) 0.3% Chief Financial Officer Named Chief Financial Officer in January, 1998. Vice President of the Company since January, 1995. Employee of the Company since 1994. Chief Financial Officer of JG Financial Management Services from September, 1992 to October, 1994. Vice President of Heritage Property Company from August, 1991 to September, 1992. Previously Chief Financial Officer of North and West Florida Divisions of Trammell Crow Residential Company. RALPH J. SIMONS, JR. 33 Vice President 158,846 (13)(14) 0.4% Vice President of the Company since January, 1995. Employee of the Company since 1990.
(1) The shares shown were owned directly by the named person as of March 2, 1998 unless otherwise indicated. (2) Assumes 40,046,847 shares outstanding, including 39,496,847 shares outstanding as of March 2, 1998, and 550,000 shares issuable upon exercise of presently exercisable stock options held by Messrs. Houston and Thompson and the executive officers Messrs. Gibson, Bailey, Benton, Simons, Green and Davis. (3) Includes 1,100 shares owned by Mr. Gibson's wife and children. Includes 28,000 shares issuable upon exercise of presently exercisable stock options. (4) Mr. Gibson has purchased Company common stock at the market price with full recourse, interest free loans under the Company's Stock Loan Program. Mr. Gibson purchased 50,000 shares on 1/17/97 at the market price of $21.50 per share by borrowing $1,075,000; and 35,000 shares on 1/26/98 at the market price of $22.59 per share by borrowing $790,781. The maximum outstanding principal balance of these loans totaled $1,075,000 in 1997 and totaled 1,817,616 on 3/2/98. (5) Includes 3,510 shares owned by Mr. Bailey's wife and daughter. Includes 83,500 shares issuable upon exercise of presently exercisable stock options. Includes 4,617 shares held in Mr. Bailey's account in the Company's ESOP. (6) Mr. Bailey has purchased Company common stock at the market price with full recourse, interest free loans under the Company's Stock Loan Program. Mr. Bailey purchased 10,000 shares on 9/14/92 at the market price of $10.75 per share by borrowing $107,500; 10,000 shares on 1/11/93 at the market price of $15.50 per share by borrowing $155,000; 10,000 shares on 3/14/94 at the market price of $20.88 per share by borrowing $208,750; 24,000 shares on 6/15/95 at the market price of $19.00 per share by borrowing $456,000; and 25,000 shares on 1/26/98 at the market price of $22.59 per share by borrowing $564,844. The maximum outstanding principal balance of loans to Mr. Bailey under the Stock Loan Program totaled $776,214 in 1997 and totaled $1,289,040 on 3/2/98. The Company has also extended Mr. Bailey interest free, full recourse loans to exercise incentive stock options. The maximum outstanding principal balance of these loans totaled $12,259 in 1997 and totaled $8,406 on 3/2/98. (7) Includes 1,171 shares owned by Mr. Benton's wife. Includes 75,500 shares issuable upon exercise of presently exercisable stock options. Includes 9,787 shares held in Mr. Benton's account in the Company's ESOP. (8) Mr. Benton has purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. Mr. Benton purchased 10,000 shares on 9/14/92 at the market price of $10.75 per share by borrowing $107,500; 10,000 shares on 1/11/93 at the market price of $15.50 per share by borrowing $155,000; 10,000 shares on 3/14/94 at the market price of $20.88 per share by borrowing $208,750; 24,000 shares on 6/15/95 at the market price of $19.00 per share by borrowing $456,000; and 25,000 shares on 1/26/98 at the market price of $22.59 per share by borrowing $564,844. The maximum outstanding principal balance of loans to Mr. Benton under the Stock Loan Program totaled $776,215 in 1997 and totaled $1,289,040 on 3/2/98. The Company has also extended Mr. Benton interest free, full recourse loans to exercise incentive stock options. The maximum outstanding principal balance of these loans totaled $30,169 in 1997 and totaled $15,213 on 3/2/98. (9) Includes 10,000 shares issuable upon exercise of presently exercisable stock options. (10) Mr. Davis purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. Mr. Davis purchased 50,000 shares at the market price of $21.13 per share on 5/12/97 by borrowing $1,056,250; and 25,000 shares at the market price of $22.59 per share on 1/26/98 by borrowing $564,844. The maximum outstanding principal balance of the loans to Mr. Davis under the Stock Loan Program totaled $1,056,250 in 1997 and totaled $1,585,994 on 3/2/98. (11) Includes 54,000 shares issuable upon exercise of presently exercisable stock options. Includes 78 shares owned by Mr. Green's children and 1,026 shares held in Mr. Green's account in the Company's ESOP. (12) Mr. Green has purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. Mr. Green purchased 10,000 shares at the market price of $17.50 per share on 12/15/94 by borrowing $175,000, 24,000 shares on 6/15/95 at the market price of $19.00 per share by borrowing $456,000; 20,000 shares on 3/14/96 at the market price of $22.63 by borrowing $452,500; and 30,000 shares on 1/26/98 at the market price of $22.59 per share by borrowing $677,813. The maximum outstanding principal balance of the loans to Mr. Green under the Stock Loan Program totaled $1,001,345 in 1997, $1,031,093 in 1996, and $626,310 in 1995 and totaled $1,627,139 on 3/2/98. (13) Includes 60,000 shares issuable upon exercise of presently exercisable stock options. Includes 3,486 shares held in Mr. Simons' account in the Company's ESOP. (14) Mr. Simons has purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. Mr. Simons purchased 10,000 shares on 9/14/92 at the market price of $10.75 per share by borrowing $107,500; 10,000 shares on 1/11/93 at the market price of $15.50 per share by borrowing $155,000; 20,000 shares on 3/14/94 at the market price of $20.88 per share by borrowing $417,500; 24,000 shares on 6/15/95 at the market price of $19.00 per share by borrowing $456,000; and 25,000 shares on 1/26/98 at the market price of $22.59 per share by borrowing $564,844. The maximum outstanding principal balance of loans to Mr. Simons under the Stock Loan Program totaled $955,314 in 1997 and totaled $1,458,506 on 3/2/98. The Company has also extended Mr. Simons interest free, full recourse loans to exercise incentive stock options. The maximum outstanding principal balance of these loans totaled $16,920 in 1997 and totaled $13,066 on 3/2/98. THE BOARD AND ITS COMMITTEES The Board met five times in 1997. The Board maintains an Executive Committee and an Audit and Compensation Committee but no nominating committee. The Executive Committee is empowered to conduct the business of the Company between Board meetings and met eleven times in 1997. The Audit and Compensation Committee supervises the Company's independent public accounting firm and determines the compensation for the Executive Officers of the Company. They met once in 1997. All directors attended all of the meetings of the Board and the committees on which they served in 1997. Directors, with the exception of Messrs. Houston and Thompson, receive fees of $2,500 per quarter plus $1,000 for each Board or Committee meeting attended. Messrs. Houston and Thompson, who are Company employees, receive no compensation for their service on the Board or its committees. All Directors are eligible to participate in the Stock Loan Program. REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION COMPENSATION POLICIES The Company's Audit and Compensation Committee acts on Chairman, President and Chief Executive Officer as well as Director compensation matters. The Board of Directors acts on compensation matters for the other executive officers, the administration of incentive and nonstatutory stock options, and the extension of interest free loans to employees for the purchase of Company common stock. The Board's goal in setting executive compensation is to link pay to Company performance by making stock based compensation a significant component of executive pay. The major components of executive compensation are base salary, cash bonuses, stock options and stock loans. In determining all forms of compensation the Board evaluates competitors' levels of base salary, cash bonuses, stock options and stock loans, the level of compensation necessary to attract and retain executive talent and the executive officer's contribution toward the achievement of the Company's goals of increasing shareholder value as measured by several indicators, including stock price performance, growth in funds from operations and growth in dividends per share. The Board does not establish specific performance criteria but instead subjectively considers the Company's performance and each executive officer's contribution toward the achievement of Company goals. The Board sets base salaries for executive officers at levels it considers to be less than typical for real estate investment trusts of similar size as outlined in the annual compensation survey prepared by the National Association of Real Estate Investment Trusts and other industry publications. The Board also grants discretionary cash bonuses based on individual performance and contribution to the Company's performance. The Board's objective in administering the stock option and stock loan plans is to link a substantial portion of executive compensation to increases in the price of the Company's common stock, thereby aligning the interests of its executive officers with those of its shareholders. Grants of stock options under the stock option plans and the purchase of common stock financed by stock loans are made at the market price on the date of grant or loan. Benefit from these programs can only be derived through increases in the stock price and through receipt of cash dividends. Presently three-fifths of the dividends received on shares purchased under the Stock Loan Program must be applied against the principal balance of the loan. The Omnibus Budget Reconciliation Act of 1993 provides that compensation in excess of $1,000,000 per year paid to the chief executive officer of a company as well as the other named executive officers listed in the Company's proxy statement will not be deductible unless the compensation is "performance-based" and the related compensation plans are approved by shareholders. The Company does not anticipate its executive compensation will come within the reach of this legislation. COMPENSATION OF THE CEO Although the Audit and Compensation Committee has not established any policy that would maintain the overall executive compensation level within any particular range of industry norms, the intent of the Board is that cash compensation, including salary and bonuses, should be less than typical for real estate investment trusts of similar size. The NAREIT survey and other industry surveys were considered by the Audit and Compensation Committee during their deliberations in determining Mr. Houston's compensation. The Committee believes the stock option and stock loan programs are key elements in motivating employees to achieve the Company's financial and operational objectives. Under these programs a substantial portion of compensation is tied to increases in the price of the Company's common stock and to the payment of cash dividends. In 1997, Mr. Houston's annual base salary was $220,000, up from $120,000 in 1996. The increase in salary reflects the added responsibility assumed by Mr. Houston since being named Chief Executive Officer in December, 1996. In determining Mr. Houston's bonus of $125,000 the Audit and Compensation Committee considered numerous factors, including the 14.5% total return to the Company's shareholders consisting of a 6.4% increase in the price of the Company's common stock, and 8.1% in cash dividends paid during 1997 assuming the reinvestment of dividends under the Company's Dividend Reinvestment Plan. The committee also considered the 4.0% increase in gross funds from operations, the 5.8% increase in core funds from operations, the 5.4% increase in common dividends, the 28% growth in the Company's investment in apartments, the 4.2% growth in same store net operating income, and Mr. Houston's contribution in the achievement of these results. Boone A. Knox W. Tennent Houston Michael N. Thompson W. Hale Barrett Hugh Calvin Long II Robert P. Kirby Paul S. Simon EXECUTIVE COMPENSATION The following table sets forth the compensation paid or accrued for services by the Company's chief executive officer and the other four most highly compensated executive officers whose total salary and bonus exceeded $100,000 in 1997:
LONG-TERM COMPENSATION ------------ AWARDS ------------ ANNUAL COMPENSATION SECURITIES ------------------- UNDERLYING OPTIONS/SARS ALL OTHER NAME AND PRINCIPAL YEAR SALARY BONUS (#) COMPENSATION POSITION BOONE A. KNOX 1997 - 150,000 - 114,417 (1) Chairman of the Board 1996 - - - - 1995 - - - - W. TENNENT HOUSTON 1997 220,000 125,000 50,000 117,148 (2)(3) President and Chief 1996 120,000 50,000 100,000 124,335 (2)(3) Executive Officer 1995 120,000 60,000 - 131,514 (2)(3) MICHAEL N. THOMPSON 1997 180,000 125,000 50,000 94,492 (4)(5) Executive Vice 1996 100,000 50,000 75,000 96,715 (4)(5) President and Chief 1995 100,000 60,000 - 97,962 (4)(5) Operating Officer JOHN W. GIBSON 1997 160,000 100,000 70,000 43,601 (6) Senior Vice President 1996 - - - - 1995 - - - - DORRIE E. GREEN 1997 100,000 70,000 20,000 67,371 (7)(8) Vice President and 1996 60,000 30,000 50,000 60,597 (7)(8) Chief Financial Officer 1995 55,000 36,000 - 25,512 (8)
(1) Mr. Knox purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. See "Voting Securities and Principal Holders". The imputed interest accrued on Mr. Knox's loans totaled $87,284 in 1997. The Company paid Mr. Knox $23,000 in Director fees and $4,133 in medical insurance premiums. (2) The Company contributed $15,000 in 1997, $18,000 in 1996 and $18,000 in 1995 to the ESOP account of Mr. Houston. (3) Mr. Houston purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. See "Directors". The imputed interest accrued on Mr. Houston's loans totaled $101,005 in 1997, $104,861 in 1996, and $110,419 in 1995. The Company has also extended Mr. Houston interest free, full recourse loans to exercise incentive stock options. The imputed interest accrued on these loans totaled $1,142 in 1997, $1,474 in 1996 and $3,095 in 1995. (4) The Company contributed $15,000 in 1997, $15,000 in 1996 and $15,000 in 1995 to the ESOP account of Mr. Thompson. (5) Mr. Thompson purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. See "Directors". The imputed interest accrued on Mr. Thompson's loans totaled $78,590 in 1997, $80,713 in 1996 and $81,427 in 1995. The Company has also extended Mr. Thompson interest free, full recourse loans to exercise incentive stock options. The imputed interest accrued on these loans totaled $901 in 1997, $1,002 in 1996 and $1,535 in 1995. (6) Mr. Gibson purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. See "Executive Officers". The imputed interest accrued on Mr. Gibson's loans totaled $43,601 in 1997. (7) The Company contributed $10,000 in 1997 and $9,000 in 1996 to the ESOP account of Mr. Green. (8) Mr. Green purchased Company common stock at the market price with full recourse, interest free loans under the Stock Loan Program. See "Executive Officers". The imputed interest accrued on Mr. Green's loans totaled $57,371 in 1997, $51,597 in 1996 and $25,512 in 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR POTENTIAL REALIZABLE INDIVIDUAL GRANTS VALUE AT ASSUMED ANNUAL ------------------------------------------------ RATES OF STOCK PRICE APPRECIATION FOR OPTION TERM NUMBER OF PERCENT OF SECURITIES TOTAL UNDERLYING OPTIONS/SARS EXERCISE OPTIONS/SARS GRANTED TO OR BASE GRANTED EMPLOYEES IN PRICE EXPIRATION 5% 10% NAME (#) FISCAL YEAR ($/SH) DATE ($) ($) Boone A. Knox - - - - - - W. Tennent Houston 50,000 (1) 8.7% $20.50 (2) 4/28/07 $644,617 $1,633,586 Michael N. Thompson 50,000 (1) 8.7% $20.50 (2) 4/28/07 $644,617 $1,633,586 John W. Gibson 20,000 (1) 3.5% $20.50 (2) 4/28/07 $257,847 $ 653,434 Dorrie E. Green 20,000 (1) 3.5% $20.50 (2) 4/28/07 $257,847 $ 653,434
(1) All options are for Company common stock and are exercisable six months after the date of grant with respect to 20% of the number of shares underlying the options and an additional 20% annually after the date of grant. The exercise price may be paid by the option holder by delivering shares already owned or those received upon exercise of options. The option holder may also exercise stock appreciation rights by surrendering the right to exercise an option in exchange for a payment in cash or common stock equal to the excess of the fair market value over the exercise price of the shares subject to the option, subject to the approval of the Plan Administrators. (2) Fair market value on date of grant.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES Shares Number of Securities Underlying Value of Unexercised In-the-Money Acquired Unexercised Options/SARs at Options/SARs at FY End ($) on Value FY End (#) Exercise Realized NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE Boone A. Knox - - - - - - W. Tennent Houston - - 105,000 107,000 $344,625 $242,125 Michael N. Thompson - - 79,000 90,000 $313,500 $204,375 John W. Gibson - - 14,000 56,000 $ 20,750 $ 83,000 Dorrie E. Green - - 40,000 50,000 $129,500 $189,500
STOCK PRICE PERFORMANCE GRAPH The graph below compares the five year cumulative total return to the shareholders of Merry Land & Investment Company, Inc. to the S&P 500 Index and the NAREIT Equity-REIT Index and assumes the reinvestment of all dividends at the market price on the day the dividend was paid beginning December 31, 1992 and ending December 31, 1997.
DATE MERRY LAND S&P 500 EQUITY REITS 12/31/92 $100 $100 $100 3/31/93 $118 $104 $122 6/30/93 $115 $105 $118 9/30/93 $148 $108 $129 12/31/93 $140 $110 $120 3/31/94 $149 $106 $124 6/30/94 $146 $106 $126 9/30/94 $143 $111 $123 12/31/94 $162 $111 $123 3/31/95 $147 $122 $123 6/30/95 $157 $134 $130 9/30/95 $165 $145 $137 12/31/95 $187 $153 $142 3/31/96 $175 $162 $146 6/30/96 $172 $169 $152 9/30/96 $178 $174 $162 12/31/96 $183 $188 $192 3/31/97 $177 $194 $194 6/30/97 $191 $227 $203 9/30/97 $198 $244 $227 12/31/97 $209 $251 $231
Assumes $100 Invested on December 31, 1992 in Merry Land & Investment Company, Inc., S&P 500 and NAREIT Equity-REIT Index VOTING SECURITIES AND PRINCIPAL HOLDERS The close of business on March 2, 1998 has been set as the record date for determination of shareholders entitled to notice of and to vote at the meeting. On March 2, 1998, the total number of outstanding shares of the Company's common stock (the only voting securities of the Company) was 39,496,847 each of which is entitled to one vote. The table below sets forth certain information concerning the only persons known to the Company to beneficially own more than 5% of the outstanding common stock, and the beneficial ownership of common stock of the directors and executive officers as a group:
AMOUNT AND NATURE OF BENEFICIAL NAME AND ADDRESS OF OWNERSHIP AS OF PERCENT OF BENEFICIAL OWNER MARCH 2, 1998 CLASS (1) Boone A. Knox 2,829,619 (2) 7.1% 149 Main Street Thomson, GA 30824 All Directors and 4,519,446 (3) 11.3% Executive Officers as a group J.P. Morgan & Co 3,939,474 (4) 10.0% Incorporated 60 Wall Street New York, NY 10260
(1) Assumes 40,046,847 shares outstanding, including 39,496,847 shares outstanding as of March 2, 1998, and 550,000 shares issuable upon exercise of presently exercisable stock options held by the Company's executive officers. (2) Boone A. Knox is chairman of the Company. Includes 100,000 shares of Company common stock purchased on 1/17/97 at the market price of $21.50 by borrowing $2,150,000 and 50,000 shares of Company common stock purchased on 1/26/98 at the market price of $22.59 per share by borrowing $1,129,688; both with a full recourse, interest free loan payable upon demand under the Company's Stock Loan Plan. The maximum outstanding principal balance of loans to Mr. Knox under the Stock Loan Plan totaled $2,150,000 in 1997 and totaled $3,186,088 on 3/2/98. Includes 2,215,000 shares owned by Knox, Ltd., a limited partnership, 3133 Washington Road, Thomson, Georgia 30824, of which Boone A. Knox is managing general partner. Includes 210,905 shares owned by the Knox Foundation, a charitable trust, of which Boone A. Knox is trustee. Includes 5,998 shares are held by BT Investments, of which Boone A. Knox is general partner. Includes 5,876 shares held in his wife's name. Includes 234,773 shares held in the Estate of Peter S. Knox III, of which Boone A. Knox is a Co-Executor. Includes 800 shares held by his niece and nephew. Mr. Knox disclaims beneficial ownership of the shares owned by his wife, the Knox Foundation, his niece and nephew and the Estate of Peter S. Knox III. Mr. Knox disclaims beneficial ownership of shares held by Knox Ltd. and BT Investments except to the extent of his pecuniary interest therein. The remaining 6,267 shares are owned by Mr. Knox individually. (3) See "Directors" and "Executive Officers". (4) This information is based solely upon a Schedule 13G/A filed under the Securities Exchange Act of 1934 on December 31, 1997 by J.P. Morgan & Co. Incorporated, reporting the sole power to vote 3,888,694 shares and the sole power to dispose 3,939,494 shares. Of the 3,939,494 total shares beneficially owned, 3,739,494 are shares where there is a right to acquire. J.P. Morgan & Co. Incorporated reports that "virtually all of our accounts involve outside persons who have the right to receive or direct the receipt of dividends from, or the proceeds from the sale of, securities in such accounts with respect to the class of securities which are the subject of this report. However, no such person's rights relate to more than five percent of the class..." TRANSACTIONS WITH MANAGEMENT AND OTHERS W. Hale Barrett, a director and Secretary of the Company, is also the senior member of Hull, Towill, Norman & Barrett, P.C., counsel to the Company. The Company paid Mr. Barrett's firm $614,876 in fees in 1997. The Board believes that the terms of its arrangement with Hull, Towill, Norman & Barrett, P.C., are no less favorable to the Company than could have been realized in an arm's length transaction with unaffiliated persons. ACCOUNTANTS The Company has selected Arthur Andersen LLP as the Company's independent public accounting firm for 1998. A representative of the accounting firm will be present at the annual meeting and will be available to respond to appropriate questions. The representative will also have the opportunity to make a statement if desired. SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING Any shareholder may present a proposal for consideration at future meetings of the shareholders. The procedures which a shareholder must follow to submit a proposal are fully set forth in Rule 14a-8 of the General Rules and Regulations adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. Among other requirements of the rule is a requirement that proposals for consideration at the next annual meeting of the Company's shareholders must be received at the Company's principal office not later than November 11, 1998. OTHER MATTERS The Board knows of no other matters to be brought before the meeting. If, however, any other matter properly comes before the meeting, it is the intention of the persons named in the accompanying form of proxy to vote the proxy in accordance with their discretion and judgment in such matters. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS SOLICITED, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR 1997. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO W. HALE BARRETT, SECRETARY, MERRY LAND & INVESTMENT COMPANY, INC., P.O. BOX 1417, AUGUSTA, GEORGIA 30903. March 23, 1998 MERRY LAND & INVESTMENT COMPANY, INC MERRY LAND & INVESTMENT COMPANY, INC. P.O. Box 1417 Augusta, Georgia 30903 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby constitutes and appoints Boone A. Knox and W. Tennent Houston, or either of them present at the annual meeting to be held on April 20, 1998 at 10:00 a.m. at the Radisson Riverfront Center, Two Tenth Street, Augusta, Georgia, and at any or all adjournments, with power of substitution, as the undersigned's true and lawful attorney and proxy to represent the undersigned at that meeting and to vote in the undersigned's name, that number of shares which the undersigned is entitled to vote. The undersigned's attorney and proxy is hereby instructed to vote as follows: - ----------------------------------------------------------------------------
i. ELECTION OF DIRECTORS FOR all nominees listed WITHHOLD AUTHORITY to below (except as marked to vote for all below the contrary below) W. Hale Barrett W. Tennent Houston Boone A. Knox Hugh Calvin Long II Robert P. Kirby Paul S. Simon Michael N. Thompson INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY LISTED INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME ON THE LIST ABOVE. - -------------------------------------------------------------------------------------------------------------------------------- ii. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. This proxy when properly executed will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL DIRECTORS. Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, give full title as such. If a corporation, sign in full corporate name by president or other authorized officer. If a partnership, sign in partnership name by authorized person.
PLEASE INDICATE ANY CHANGE IN ADDRESS Dated: , 1998 Signature of Shareholder Signature if held jointly Please specify choices, sign, date and return in the enclosed postage paid envelope.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. -----END PRIVACY-ENHANCED MESSAGE-----