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 ☒
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
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☐ Definitive
Additional Materials
☐ Soliciting
Material Pursuant to § 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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of Filing Fee (Check the appropriate box):
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computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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of each class of securities to which transaction applies:
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number of securities to which transaction applies:
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3)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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__________________________________________________
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maximum aggregate value of transaction:
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Check box if any part of the fee is
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AMERICAN CHURCH MORTGAGE COMPANY
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 2020
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 10400 Yellow Circle Drive, Suite 120, Minnetonka, Minnesota, 55343, at 10:00 a.m., local time, on
June 25, 2020.
We are monitoring developments regarding
the coronavirus or COVID-19 and preparing in the event any changes for our annual meeting are necessary or appropriate. If we decide
to make any change, such as to the date or location or to hold the meeting solely by remote communication, we will announce the
change in advance and post details, including instructions on how shareholders can participate, on our website www.church-loans.net
and file them with the SEC. We also recommend that you visit the website to confirm the status of the annual meeting before planning
to attend in person.
This meeting is being held for the following
purposes:
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To elect two (2) persons to serve as Directors until the next annual meeting of shareholders and until their successors are
duly elected and qualified.
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2.
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Ratification of the Appointment of Wipfli, LLP as our independent public accounting firm for the year ending December 31, 2020.
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To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
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Only shareholders of record
at the close of business on May 4, 2020 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 return
a completed proxy promptly.
By Order of the Board of Directors,
/s/ Philip J. Myers
Philip J. Myers, President and Secretary
Minnetonka, Minnesota
May 14, 2020
WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING,
PLEASE
SIGN THE PROXY AND RETURN IT PROMPTLY.
Important Notice Regarding the Availability
of Proxy Materials
for the Annual Meeting of Shareholders to
Be Held on June 25, 2020.
The proxy materials, including the
proxy statement and the 2019 Annual Report are available at the “Investors Relations” tab on our website at: www.church-loans.net.
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Your vote matters – here’s how
to vote!
You may vote online or by phone instead of mailing
the proxy card.
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Votes submitted electronically must be
received by June 25, 2020 at 1:00 A.M.,
Central Time
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Online
Go to www.envisionreports.com/ACMC or
scan the QR code — login details are
located in the shaded bar below.
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Phone
Call toll free 1-800-652-VOTE (8683) within
the USA, US territories and Canada
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Save paper, time and money!
Sign up for electronic delivery at
www.envisionreports.com/ACMC
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AMERICAN CHURCH MORTGAGE COMPANY
10400 YELLOW CIRCLE DRIVE, STE. 102
MINNETONKA, MINNESOTA 55343
(952) 945-9455
–––––––––––––––
PROXY STATEMENT
––––––––––––––––
ANNUAL MEETING OF SHAREHOLDERS
JUNE 25, 2020
This proxy statement
and the accompanying proxy card are being mailed, beginning on May 14, 2020, to owners of common shares of American Church Mortgage
Company in connection with the solicitation of proxies by the Board of Directors for our 2020 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
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3
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PROPOSAL 1: ELECTION OF DIRECTORS
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7
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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND
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CORPORATE GOVERNANCE
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9
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
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INDEPENDENCE
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13
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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AND RELATED STOCKHOLDER MATTERS
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17
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EXECUTIVE COMPENSATION AND EQUITY COMPENSATION PLANS
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18
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DIRECTOR COMPENSATION
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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19
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PROPOSAL 2: APPROVAL OF APPOINTMENT OF INDEPENDENT REGISTERED
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PUBLIC ACCOUNTING FIRM
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SHAREHOLDER PROPOSALS FOR THE 2021 ANNUAL MEETING OF
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SHAREHOLDERS
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22
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OTHER MATTERS
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22
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EXHIBITS
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ANNUAL REPORT ON FORM 10-K
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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 or about May 14, 2020. The Company’s 2019 Annual
Report to Shareholders on Form 10-K accompanies this proxy statement.
What am I voting on?
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1.
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The election of two (2) Board members, each for a one-year term or until their successors are elected
and qualified. The remaining board seat will remain vacant.
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2.
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The ratification of the appointment of Wipfli, LLP as our independent registered public accounting
firm for the year ending December 31, 2020.
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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 4, 2020 may vote at the Annual Meeting. Each share has one vote. There were 1,677,798 common
shares outstanding on May 4, 2020. 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
our offices. This list will also be available at the Annual Meeting.
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 Treasurer
and Chief Financial Officer, Scott J. Marquis at (952) 252-0909.
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.
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 and Michael G. Holmquist as Directors and “FOR”
the ratification of the appointment of Wipfli, LLP as 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 may vote by mail, online or by phone. To vote by mail, simply mark, sign and date the
enclosed proxy card and return it in the postage-paid envelope provided. To vote online or by phone, see the instructions above.
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. Please note that broker shares will not be voted on Proposal 1 – Election of Directors – without
your direction.
How do I revoke my proxy?
You may revoke your proxy
at any time before your shares are voted at the Annual Meeting by:
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Notifying our Secretary, Philip J. Myers, in writing at 10400 Yellow Circle Drive, Ste. 102, Minnetonka,
Minnesota 55343, that you are revoking your proxy;
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Executing a later-dated proxy card;
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Voting again online or by phone before the applicable deadline; or
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Attending and voting by ballot at the Annual Meeting.
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Is my vote confidential?
Yes, only certain of our
officers will have access to your vote.
Who will count the votes?
An officer of American
Church Mortgage Company will act as the inspector of election and will count the votes.
What constitutes a quorum?
As of May 4, 2020, 1,677,798
of our common shares were issued and outstanding. 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 or vote online or by phone, 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, 2020, 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 5.08% of our common shares as of May 4, 2020. (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 by mail and by the internet. 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 reimbursement of out-of-pocket expenses. In 2019, we paid Computershare approximately $5,600, 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 do now offer to shareholders
on-line voting over the Internet. 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.
Do we have any significant shareholders?
We have no shareholders
who beneficially owned more than 5.0% of our stock as of May 4, 2020.
When are shareholder proposals for the year 2021 shareholder
meeting due?
Shareholder proposals to
be presented at the 2021 Annual Meeting must be submitted in writing by December 26, 2020 to Philip J. Myers, President & Secretary,
at 10400 Yellow Circle Drive, Ste. 102, 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 2021 Annual Meeting
of Shareholders” and “Election of Directors” for information regarding certain procedures with respect to shareholder
proposals and nominations of Directors.)
PROPOSAL 1
ELECTION OF DIRECTORS
The Board has fixed at
two (2) the number of Directors to be elected at the Annual Meeting. The remaining board seat will remain vacant while the Company
seeks a suitable additional independent board member. 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 two (2) 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
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Age
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Biographical Summary
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Director Since
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Philip J. Myers
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64
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Mr. Myers has been our Chairman, President and Secretary since April 2001. He has also served as President, Treasurer, majority shareholder and a director of our Advisor, Church Loan Advisors, Inc. since 1994, President, Secretary, and a director of American Investors Group, Inc., a registered broker-dealer, since 1996, and of its parent company, Apostle Holdings Corp. since 2000. Mr. Myers has been an officer and owner 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, 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 Financial Industry Regulation Authority (FINRA). Mr. Myers’ 30+ years of experience in church lending combined with the practice of law in the securities, corporate and regulatory arenas and his experience as a CEO afford him a comprehensive and broad-based insight into managing the direction, opportunities and challenges of the Company.
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2001
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Michael G. Holmquist
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70
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Mr. Holmquist has served as an independent director of the Company since 2003. Mr. Holmquist is a Certified Public Accountant practicing from his office in Deephaven, Minnesota. 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. Mr. Holmquist’s experience as a CPA and tax professional qualifies him to lead our Sarbanes-Oxley accounting compliance efforts as well as regularly evaluate our internal control and reporting procedures.
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2003
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Prior Board members Messrs. Doyle and Caldwell decided not to stand
for re-election to the Board for personal
reasons. Neither director had any disagreement with the Company, the Board or management on any matter of accounting, disclosure
or otherwise.
The Company intends to commence a process to identify a potential
additional Independent Director to fill the
vacant board seat. No assurance can be provided that an additional, acceptable independent director will be identified and added
to the Board of Directors in any particular timeframe.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
CONTROL PERSONS AND CORPORATE GOVERNANCE
Information regarding our current Directors is set forth above under
the section titled “Nominees.”
How does the Board operate?
During 2019, 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, each Board member attended 100% of the meetings held, except Mr.
Doyle who did not attend any meetings. The Company encourages director 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. Our Directors
are invited to, and frequently one or more of our Directors are in attendance at, the Annual Meeting. Mr. Myers attended the 2019
Annual Shareholder 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 Mr. Holmquist qualifies 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”).
How are Executives and Directors compensated?
Since inception, the Company
has not had any employees, and until the November 2009 appointment of Scott J. Marquis as Chief Financial Officer and Treasurer,
the Company had only one executive officer, Philip J. Myers, who serves in several capacities (See Director Nominee table above).
Executive Officers
The following table sets
forth certain information regarding the Company’s executive officers.
Name
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Age
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Position
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Biographical Summary
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Philip J. Myers
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64
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Chairman, President and Secretary
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(See Director Nominee table above.)
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Scott J. Marquis
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62
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Chief Financial Officer and Treasurer
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Mr. Marquis, is our Chief Financial Officer and Treasurer. He was appointed to this position in November 2009 by our Board of Directors. He is also currently employed full-time as Chief Financial and Operating Officer of American Investors Group, Inc., a registered broker-dealer, where he has been employed since February 1987. Prior to his employment with American Investors Group, Inc., Mr. Marquis was employed for approximately seven years with the Minneapolis-based broker dealer, Piper Jaffray Companies in various capacities within its operations department. Mr. Marquis attended the University of Minnesota in Minneapolis, Minnesota and served in the United States Coast Guard Reserve (Retired). Mr. Marquis is a licensed financial principal and registered representative of American Investors Group, Inc., holds his Series 7, 63 and 27 licenses from FINRA. Mr. Marquis’ knowledge of and experience in operating a public REIT allow him to provide valuable insights to the Board in its oversight of the Company’s operations as a REIT.
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Neither of the Company’s
officers receive any compensation for their services. 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 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 neither Mr. Myers nor Mr. Marquis is 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;
no reimbursements were paid in 2019. Please see “Director Compensation” on page 18. As a non-independent director,
Philip J. Myers receives no compensation or reimbursements in connection with his service on our Board of Directors.
Qualifications
of Candidates for Election to the Board
The
Company’s Directors take a critical role in guiding the Company’s strategic direction and considering the composition
of the Board. Since 1994, we have had very little turnover on the Board (one independent member resigned in 2003 and a new, independent
member was added in July 2003; one other member resigned in May 2008. Two board member have elected not run again in 2020). 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 various other criteria,
such as their broad-based business and professional skills and experiences, experience serving as management or on the Board of
Directors of companies similar to the Company, concern for the long-term interests of the shareholders, financial literacy and
personal integrity in judgment. To date, the Company has not taken specific diversity considerations (other than those specified)
into account when nominating or considering Board candidates and has no policy in this regard. 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 “Process
for Identifying and Evaluating Candidates for Election to the Board” below for further discussion of how the Board operates
in connection with nominations. The Company’s Bylaws are available on its website, 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.
Board Leadership Structure and Role in Risk
Oversight
Mr. Myers has served as
Chairman of the Company’s Board of Directors and President since April 2001. The Board of Directors believes it is important
to select its Chairman and the Company’s President in the manner it considers to be in the best interests of the Company
and its Shareholders at any given point in time. The Board of Directors believes that the most effective leadership structure for
the Company is for Mr. Myers to serve as both the Company’s Chairman and President because a single position reduces the
need to hire and compensate additional personnel. Moreover, the Board of Directors recognizes that, given Mr. Myers’ familiarity
with the Company’s day-to-day operations and his long-standing experience with the Company, it is valuable to have him lead
Board discussions. The Company does not have a lead independent director. Rather, the independent Directors as a group fulfill
the role of reviewing all proposed transactions that involve potential conflicts of interest and proposing matters for consideration
or action by management. The Board of Directors and management view this level of independent director involvement as adequate
given the nature of the Company and its business. In particular, due to the limited size of the Company’s operations and
headcount and the well-defined nature of its business and operating results, the Company has not required more formal and extensive
interaction, and the Board of Directors has not considered it necessary to date.
With respect to the Board
of Directors’ role in the risk oversight of the Company, the Board of Directors has set forth which transactions may require
the prior approval of the Board of Directors (or an independent portion thereof) and which transactions may proceed with management
authorization and without any such Board of Directors’ prior approval. In short, 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. The Company
has no policy with respect to hedging transactions.
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. 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 2020 Annual Meeting of Shareholders,
the Board of Directors did not receive any nominations for director candidates from eligible
shareholders or groups of shareholders within the required timeline. Additionally, there were no changes to the procedures
by which shareholders may recommend nominees to the Board since the Company’s 2010 Annual Meeting of Shareholders.
Communications
with the Board
Shareholders
can communicate directly with the Board by writing to Mr. Philip J. Myers at the Company’s principal address, 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% shareholders 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, 2019, our Officers, Directors and greater than 10% shareholders complied with
all Section 16(a) filing requirements.
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, 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 above, 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
our inception in 1994. Our Advisor provides 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 ending on January 16, 2021. We may terminate the Advisory
Agreement without cause on 60 days’ written notice. Upon termination of the Advisory Agreement by either party, the Advisor
may require us to change our name to a name that does not contain the word “American,” “America” or the
name of the Advisor or any approximation or abbreviation thereof. 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 services to us 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 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 fees 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 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. For purposes of the Advisory
Agreement, the Company’s Invested Assets means outstanding church loans and church bonds and does not include cash or 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, 2019 and 2018, we paid
our Advisor approximately $323,000 and $322,000, 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 American Investors Group, Inc. and has been President, Treasurer and a director of this securities
brokerage firm since 1996. Although we have not and will not pay any commissions on purchases of church bonds from American Investors
Group, Inc., 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.
In September 2017, we filed
a registration statement with the Securities and Exchange Commission to offer $10,000,000 worth of Series E secured investor certificates.
The offering was declared effective by the SEC on November 6, 2017. The certificates are being offered in multiples of $1,000 with
interest rates ranging from 4.00% to 6.50%, subject to changing market rates, and maturities from 5 to 15 years. The certificates
are collateralized by certain mortgage
loans
receivable and church bonds of approximately the same value. At May 4, 2020, we have sold 3,714 Series E Secured Investor Certificates
totaling $3,714,000.
Director Independence
The Company’s Board
of Directors has determined that Michael G. Holmquist is “independent,” as that term is defined in NASAA REIT Guidelines
and in Rule 4200(a)(15) of the NASDAQ Marketplace Rules. 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 May 4, 2020, the number of shares beneficially owned by each Director and by all executive officers as a group,
and any beneficial owners of 5% or more of our outstanding stock, based on 1,677,798 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.
Name and address of Beneficial Owner (1)
|
|
Number of
Shares of Common Stock
Beneficially
Owned
|
|
Percent
of
Class
|
Philip J. Myers
|
|
|
83,687
|
(2)
|
|
|
4.98
|
%
|
Scott J. Marquis
|
|
|
1,300
|
|
|
|
0.08
|
%
|
Kirbyjon H. Caldwell
|
|
|
—
|
|
|
|
—
|
|
Dennis J. Doyle
|
|
|
—
|
|
|
|
—
|
|
Michael H. Holmquist
|
|
|
319
|
|
|
|
0.02
|
%
|
All Executive Officers and Directors as a Group
(five individuals)
|
|
|
85,306
|
|
|
|
5.08
|
%
|
|
(1)
|
The address for each of the officers and Directors is 10400 Yellow
Circle Drive, Ste. 102, Minnetonka, Minnesota 55343. Messrs. Caldwell and Doyle decided not to stand for reelection to the Board
in 2020
|
|
(2)
|
This number includes 25,014 shares owned directly by Mr. Myers and
58,673 shares owned by Apostle Holdings Corp., an affiliate of our Advisor, which is 100% owned by Mr. Myers.
|
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 for the year ended December 31, 2019 is described
below.
DIRECTOR COMPENSATION
|
Name
|
|
|
Fees Earned or Paid in Cash(1)
|
|
|
Stock Awards
|
|
Option Awards
|
|
Non-Equity Incentive Plan Compensation
|
|
Nonqualified Deferred Compensation Earnings
|
|
All Other Compensation
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kirbyjon H. Caldwell
|
|
$
|
1,600
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
$
|
1,600
|
|
Dennis J. Doyle
|
|
$
|
600
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
$
|
600
|
|
Michael G. Holmquist
|
|
$
|
1,600
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
$
|
1,600
|
|
Philip J.
Myers
|
|
|
n/a
|
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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; no reimbursements were paid in 2016. Messrs. Caldwell and Doyle have decided not to stand for reelection
to the Board in 2020.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Wipfli, LLP has
served as the Company’s independent registered public accounting firm since June 30, 2019.
Baker Tilly Virchow
Krause, LLP served as the Company’s independent registered public accounting firm for the fiscal years ended December 31,
2018 and 2017. The Company decided on April 29, 2019 to not re-engage Baker Tilly Virchow Krause, LLP as the Company’s independent
registered public accounting firm. Baker Tilly Virchow Krause, LLP’s reports on the Company’s financial statements
for the years ended December 31, 2018 and December 31, 2017 did not contain an adverse opinion or disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or accounting principles. During the Company’s years ended
December 31, 2018 and 2017 there were:
|
(i)
|
no disagreements with Baker Tilly Virchow Krause, LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Baker Tilly Virchow Krause, LLP, would have caused Baker Tilly Virchow Krause, LLP to make reference to the subject matter of the disagreement in its report on the Company’s consolidated financial statements, and
|
|
(ii)
|
no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K (“Regulation S-K”) of the U.S. Securities and Exchange Commission (the “SEC”).
|
The following table
presents fees billed to the Company by the Company’s former independent registered public accounting firm, for professional
services rendered for the years ended December 31, 2019 and 2018.
In addition, the Company
engaged Wipfli, LLP as its new and current independent registered public accounting firm and was billed for services for the year
ended December 31, 2019 as shown.
|
|
Years Ended December 31,
|
|
|
2019
|
|
2018
|
Audit Fees (1)
|
|
$
|
37,145
|
|
|
$
|
78,750
|
|
Tax Fees (2)
|
|
|
5,160
|
|
|
|
5,010
|
|
All Other Fees & Out of Pocket Expenses (3)
|
|
|
12,671
|
|
|
|
—
|
|
Total
|
|
$
|
102,940
|
|
|
$
|
83,760
|
|
|
(1)
|
Audit Fees consist of fees billed for professional services rendered for the audit of the Company’s
annual financial statements and services that are normally provided by the Company’s independent registered public accounting
firm in connection with statutory and regulatory filings or engagements. All 2019 audit fees were paid to Wipfli, LLP.
|
|
(2)
|
Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advice
and tax planning.
|
|
(3)
|
All Other Fees consist of fees for products and services other than the services reported above.
The Company paid $11,546 in fees related our public offering of secured investor certificates for the year ended December 31, 2019.
|
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, Wipfli, LLP (“Wipfli”), the Company’s consolidated financial statements for the fiscal year ended December
31, 2019 and the Company’s internal control over financial reporting. We also discussed with Wipfli the matters required
to be discussed by Auditing Standard No. 16, as adopted by the Public Company Accounting Oversight Board. Wipfli provided to us
the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding
Wipfli’s communications with the Board concerning independence, and we discussed Wipfli’s independence with them. In
determining Wipfli’s independence, we considered whether their provision of non-audit services to the Company was compatible
with maintaining independence. We received regular updates on Wipfli’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, 2019 be included in the Company’s Annual
Report on Form 10-K. We also approved, subject to shareholder ratification, the selection of Wipfli, LLP as the Company’s
independent auditors for the fiscal year ending December 31, 2020.
Members of the Board:
Philip J. Myers
Michael G. Holmquist
The Audit Committee
Report is not deemed “filed” with the SEC and is not incorporated by reference into the Company’s Annual Report
on Form 10-K.
PROPOSAL 2
APPROVAL OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Board of Directors
has selected the accounting firm of Wipfli, LLP (“Wipfli”) to audit the Company’s financial statements for, and
otherwise act as the independent auditors with respect to, the year ending December 31, 2020, subject to the ratification of the
holders of the Company’s common stock. The report
of Wipfli on the financial statements for the fiscal year ending December 31, 2019 contained no adverse opinion or disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope or accounting principle. In connection with its audit
for the most recent fiscal year and through May 14, 2020, there have been no disagreements with Wipfli on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to
the satisfaction of Wipfli would have caused them to make reference thereto in their report on the financial statements for such
years. Wipfli has acted as our independent auditors since June 30, 2019.
To the Company’s
knowledge, neither Wipfli nor any of its partners has any direct financial interest or any material indirect financial interest
in the Company or has had any connection since the inception of the Company in the capacity of promoter, underwriter, voting trustee,
director, officer or employee. During the two most recent fiscal years and through May 14, 2020, the Company has not consulted
with Wipfli regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was
provided to the Company nor oral advice was provided that Wipfli concluded was an important factor considered by the Company in
reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement,
as the term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K, or a
reportable event as that term is described in Item 304(a)(1)(v) of Regulation S-K. No representative of Wipfli is expected to be
present at the Annual Meeting.
If the shareholders do
not ratify the selection of Wipfli, the Board of Directors may still affirm its selection of Wipfli as the Company’s independent
auditors. All proxies received in response to this solicitation will be voted in favor of the ratification of the appointment of
as the Company’s independent auditors, unless other instructions are indicated thereon.
The
Board recommends that the shareholders ratify the Board’s appointment of WIPFLI as the Company’s independent registered
public accounting firm for the year ending December 31, 2020.
SHAREHOLDER PROPOSALS FOR THE
2021 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 President by December 26, 2020. 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 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 14, 2020
CORPORATE INFORMATION
EXECUTIVE OFFICERS AND DIRECTORS
Philip J. Myers, Chairman, President and Secretary
Scott J. Marquis, Chief Financial Officer and Treasurer
Michael G. Holmquist, Director
OFFICERS OF OUR ADVISOR
Philip J. Myers, President, Secretary
and Director
Scott J. Marquis, Vice President, Treasurer
TRANSFER AGENT
Computershare Trust Company, N.A.
PO Box 43070
Providence, RI 02940-3070
800-962-4284
LEGAL COUNSEL
Winthrop & Weinstine, P.A.
Suite 3500
225 South Sixth Street,
Minneapolis, MN 55402
INDEPENDENT ACCOUNTANT
Wiplfi, LLP
8665 Hudson Blvd North, Suite 200
St. Paul, MN 55042
COMMON STOCK INFORMATION
Our common stock is not regularly
traded on any established market, however, it was sporadically traded on the over-the-counter market pink sheets under the symbol
“ACMC.PK” during 2019.
At May 4, 2020, we had 458 record
holders of our common stock and an undetermined number of additional beneficial owners.
2020 ANNUAL MEETING & SHAREHOLDER CONTACT
Our Annual Meeting of Shareholders will be
held at 10:00 a.m., local time, on June 25, 2020 at our offices.
We are monitoring developments regarding
the coronavirus or COVID-19 and preparing in the event any changes for our annual meeting are necessary or appropriate. If we decide
to make any change, such as to the date or location or to hold the meeting solely by remote communication, we will announce the
change in advance and post details, including instructions on how shareholders can participate, on our website www.church-loans.net
and file them with the SEC. We also recommend that you visit the website to confirm the status of the annual meeting before planning
to attend in person.
Inquiries concerning ACMC or matters of shareholder interest may
be directed to:
American Church Mortgage Company
10237 Yellow Circle Drive
Minnetonka, Minnesota 55343
Attention: Scott J. Marquis
(952) 252-0909
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, 2020.
The proxy materials, including the proxy
statement and the 2019 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 4, 2020, at the Annual Meeting of Shareholders to be held on June 25, 2020, or any adjournment
thereof.
PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE
[X]
01 Philip J. Myers
02 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 WIPFLI, LLP as the Company’s independent registered public accounting firm for
the year ending December 31, 2020.
|
[_] 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:_________, 2020
________________________________
SIGNATURE
________________________________
TITLE (IF APPLICABLE)
________________________________
SIGNATURE (IF HELD JOINTLY)
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY
CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
19152550v2
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