Edgar Filing: AMREIT - Form DEF 14A

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 |X|
Filed by a Party other than the Registrant |_|

AMREIT
(Name of Registrant as Specified in Its Charter)

Not Applicable
(Name of Person(s) Filing Proxy Statement if Other Than Registrant)

Payment of Filing Fee (Check the appropriate box):
|X| 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 0-11(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.:

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(4) Date Filed:

AmREIT
8 Greenway Plaza, Suite 824
Houston, Texas 77046

Notice of Annual Meeting of Shareholders
To be Held June 13, 2003

To Our Shareholders:

You are invited to attend the annual meeting of shareholders of
AmREIT, to be held at 8 Greenway Plaza, Suite 824, Houston, Texas, on Friday,
June 13, 2003, at 10:00 a.m., Houston time. The purpose of the meeting is to
vote on the following proposals:

Proposal 1: To elect five trust managers to serve for a one
year term, and until their successors are elected
and qualified.

Proposal 2: To approve an amendment to the Amended and
Restated Declaration of Trust to permit holders
of AmREIT class B common shares to vote on all
matters acted on by shareholders of AmREIT.

Proposal 3: To ratify an amendment to the Agreement and Plan
of Merger dated June 5, 1998 pursuant to which
AmREIT acquired American Asset Advisers Realty
Corporation, its former adviser, to extend the
period of time during which H. Kerr Taylor may earn
the balance of the consideration owed to him under
that agreement.

Proposal 4: To ratify the selection of KPMG LLP as our
independent auditors for the fiscal year ending
December 31, 2003.

Proposal 5: To transact any other business that may properly
be brought before the annual meeting or any
adjournments thereof.

The board of trust managers has fixed the close of business on April
14, 2003 as the record date for determining shareholders entitled to notice of
and to vote at the annual meeting. A form of proxy card and a copy of our
annual report to shareholders for the fiscal year ended December 31, 2002 are
enclosed with this notice of annual meeting and proxy statement.

Your proxy vote is important. Accordingly, you are asked to complete,
date, sign and return the accompanying proxy whether or not you plan to attend
the annual meeting. If you plan to attend the annual meeting to vote in person
and your shares are in the name of a broker or bank, you must secure a proxy
from the broker or bank assigning voting rights to you for your shares.

BY ORDER OF THE BOARD OF TRUST MANAGERS

/s/ H. Kerr Taylor
-----------------------------------------------
H. Kerr Taylor
Chairman of the Board, Chief Executive
Officer, and President

April 29, 2003
Houston, Texas

PROXY STATEMENT
---------------

ANNUAL MEETING OF SHAREHOLDERS
Friday, June 13, 2003

AmREIT
8 Greenway Plaza, Suite 824
Houston, Texas

The Board of Trust Managers of AmREIT is soliciting proxies to be used
at the 2003 annual meeting of shareholders to be held at 8 Greenway Plaza,
Suite 824, Houston, Texas, on Friday, June 13, 2003, at 10:00 a.m., Houston
time. This proxy statement, accompanying proxy and annual report to
shareholders for the fiscal year ended December 31, 2002 are first being mailed
to shareholders on or about May 2, 2003. Although the annual report is being
mailed to shareholders with this proxy statement, it does not constitute part
of this proxy statement.

Who Can Vote

Only shareholders of record as of the close of business on April 14,
2003, are entitled to notice of and to vote at the annual meeting. As of April
14, 2003, we had 2,779,958.636 class A common shares outstanding. Each
shareholder of record of the class A common shares on the record date is
entitled to one vote on each matter properly brought before the annual meeting
for each share held.

How You Can Vote

Shareholders cannot vote at the annual meeting unless the shareholder
is present in person or represented by proxy. You are urged to complete, sign,
date and promptly return the proxy in the enclosed postage-paid envelope after
reviewing the information contained in this proxy statement and in the annual
report. Valid proxies will be voted at the annual meeting and at any
adjournments of the annual meeting as you direct in the proxy.

Revocation of Proxies

You may revoke your proxy at any time prior to the start of the annual
meeting in three ways:

(1) by delivering written notice to our Corporate Secretary, Charles C.
Braun, at AmREIT, 8 Greenway Plaza, Suite 824, Houston, Texas 77046;

(2) by submitting a duly executed proxy bearing a later date; or

(3) by attending the annual meeting and voting in person.

Voting by proxy will in no way limit your right to vote at the annual
meeting if you later decide to attend in person. If your shares are held in the
name of a bank, broker or other holder of record, you must obtain a proxy,
executed in your favor, to be able to vote at the annual meeting. If no
direction is given and the proxy is validly executed, the shares represented by
the proxy will be voted as recommended by our board of directors. The persons
authorized under the proxies will vote upon any other business that may
properly come before the annual meeting according to their best judgment to the
same extent as the person delivering the proxy would be entitled to vote. At
the time of mailing this proxy statement, we do not anticipate that any other
matters would be raised at the annual meeting.

Required Vote

The presence, in person or represented by proxy, of the holders of a
majority of our class A shares (1,392,759.276 shares) entitled to vote at the
annual meeting is necessary to constitute a quorum at the annual meeting.
However, if a quorum is not present at the annual meeting, a majority of the
shareholders, present in person or represented by proxy, have the power to
adjourn the annual meeting until a quorum is present or represented.

The affirmative vote of the holders of a majority of the class A
common shares present in person or represented by proxy is required to elect
trust managers.

The affirmative vote of the holders of a majority of the class A
common shares present in person or represented by proxy is required to approve
all other matters to be voted upon at our annual meeting.

Votes cast by proxy or in person will be counted by two persons
appointed by the Company to act as inspectors for the annual meeting. The
election inspectors will treat shares represented by proxies that reflect
abstentions as shares that are present and entitled to vote for the purpose of
determining the presence of a quorum and of determining the outcome of any
matter submitted to the shareholders for a vote; however, abstentions will not
be deemed outstanding and, therefore, will not be counted in the tabulation of
votes cast on proposals presented to shareholders.

The Texas Real Estate Investment Trust Act and the Company's Bylaws do
not specifically address the treatment of abstentions and broker non-votes. The
election inspectors will treat shares referred to as "broker non-votes" (i.e.,
shares held by brokers or nominees as to which instructions have not been
received from the beneficial owners and as to which the broker or nominee does
not have discretionary voting power on a particular matter) as shares that are
present and entitled to vote for the purpose of determining the presence of a
quorum. However, for the purpose of determining the outcome of any matter as to
which the broker or nominee has indicated on the proxy that it does not have
discretionary authority to vote, those shares will be treated as not present
and not entitled to vote with respect to that matter (even though those shares
are considered entitled to vote for quorum purposes and may be entitled to vote
on other matters). Brokers will not have discretion to vote on the amendment to
the Merger Agreement (as described under Proposal Two). As a result, any
failure by a shareholder to instruct his or her broker as to how to vote on the
proposed amendment will have the same effect as a "No" vote.

Cost of Proxy Solicitation

The cost of soliciting proxies will be borne by us. Proxies may be
solicited on our behalf by our directors, officers or employees in person, by
telephone, facsimile or by other electronic means.

In accordance with SEC regulations, we will also reimburse brokerage
firms and other custodians, nominees and fiduciaries for their expenses
incurred in sending proxies and proxy materials and soliciting proxies from the
beneficial owners of shares of our common stock.

GOVERNANCE OF THE COMPANY

Pursuant to our declaration of trust and our bylaws, our business,
property and affairs are managed under the direction of our board of trust
managers. Members of our board are kept informed of our business through
discussions with the chairman of the board and officers, by reviewing materials
provided to them and by participating in meetings of our board and its
committees. During our 2002 fiscal year, our board of trust managers held five
meetings. No trust managers attended less than 75% of the total number of board
of trust managers and committee meetings.

Committees of the Board of Trust Managers

Audit Compensation
Name Committee Committee
---- --------- ---------

H. Kerr Taylor*
Robert S. Cartwright, Jr. x
G. Steven Dawson x x
Bryan L. Goolsby x
Philip Taggart x x
-------

* Chairman of the Board

During our 2002 fiscal year, our board of trust managers had two
standing committees: an audit committee and a compensation committee. We do not
have a nominating and corporate governance committee.

The audit committee consists of three independent trust managers,
Robert S. Cartwright, Jr., Philip Taggart, and Steven Dawson. The functions of
the audit committee include recommending to our board the appointment of
independent auditors, approving the services provided by the independent
auditors, reviewing the range of audit and non-audit fees and considering the
adequacy of our internal accounting controls.

The compensation committee consists of three independent directors,
Steven Dawson, Bryan Goolsby and Philip Taggart. The functions of the
compensation committee include establishing the compensation of executive
officers and key employees and administering management incentive compensation
plans.

Compensation of Trust Managers

During our 2002 fiscal year, each non-employee trust managers received
a monthly fee of $1,000 for their services and a meeting fee of $1,000 per
meeting attended in person, a meeting fee of $500 per meeting attended by
telephone and a committee meeting fee of $500 per meeting attended in person or
by telephone. Additionally, each non-employee trust manager receives a grant of
2,000 restricted class A common shares in February of each year in which they
serve on the board. On February 15, 2003, each of Messrs. Cartwright, Dawson,
Goolsby and Taggart received a grant of 2,000 restricted class A common shares.
The stock vests 33% immediately at date of grant, 33% on the first anniversary
of date of grant and 34% on the second anniversary of date of grant.

SHARE OWNERSHIP OF MAJOR SHAREHOLDERS,
TRUST MANAGERS AND MANAGEMENT

The following table sets forth certain information regarding the
beneficial ownership of our common shares as of April 14, 2003 by (1) each
person known by us to own beneficially more than 5% of our outstanding class A
common shares, (2) all current trust managers, (3) each current named executive
officer, and (4) all current trust managers and current named executive
officers as a group. Unless otherwise indicated, the shares listed in the table
are owned directly by the individual, or by both the individual and the
individual's spouse. Except as otherwise noted, the individual had sole voting
and investment power as to shares shown or, the voting power is shared with the
individual's spouse.

Amount of Nature of Percent of Class A
Name Beneficial Ownership Common Shares
---- -------------------- --------------------

H. Kerr Taylor 580,096 21.43%
Robert S. Cartwright 8,166 *
G. Steven Dawson 6,000 *
Bryan L. Goolsby 6,000 *
Philip Taggart 6,800 *
Charles C. Braun 18,664 *
All trust managers and executive 625,726 23.12%
officers as a group
---------

* Less than 1%.

MANAGEMENT

Name Age Principal Occupation
---- --- --------------------

H. Kerr Taylor* 52 Chairman of the Board, Chief Executive Officer and President
Charles C. Braun* 31 Treasurer, Secretary and Chief Financial Officer
Jim O'Neill 40 Corporate Controller
Wade Greene 45 Senior Vice President
Jason Lax 30 Vice President
Todd McDonald 29 Vice President
Preston Cunningham 26 Acquisitions Manger
Kirby Dixon 45 Regional Sales Manager
Jeff Noblin 37 Regional Sales Manager
David M. Thailing 32 Vice President - Sales
Neize Ferreira 34 Marketing Manager

----------------------------
* Executive Officers

Business Experience

For a description of the business experience of Mr.Taylor,
see "Election of Trust Managers" above.

Charles C. Braun - Mr. Braun serves as our Executive Vice President,
Treasurer and Secretary. Mr. Braun oversees the financial accounting and
reporting and is responsible for AmREIT's capital formation, debt placement and
joint venture initiatives. Mr. Braun received a B.B.A degree in accounting and
finance from Hardin Simmons University and subsequently earned the CPA
designation and his Series 63, 7, 24, and 27 securities licenses. He has over
nine years of accounting and real estate experience, including five years with

Ernst & Young, LLP. At Ernst & Young, LLP, Mr. Braun served as a manager in the
real estate advisory services group and has provided extensive consulting and
audit services to a number of Real Estate Investment Trusts and private real
estate companies. These services included financial statement audits, portfolio
acquisition and disposition, real estate portfolio management, merger
integration and process improvement, financial analysis and due diligence. Mr.
Braun is a member of the National Association of Real Estate Investment Trusts,
Financial Planning Association, and the Texas Society of Certified Public
Accountants.

Jim O'Neill. Mr. O'Neill serves as Corporate Controller and oversees
the daily accounting activities of AmREIT and its affiliated partnerships, debt
placement and project financial reporting. Additionally, he is directly
involved in the SEC and financial reporting and supervises the accounting
department. Mr. O'Neill is a graduate of Texas A&M University, where he
received his B.B.A in accounting and subsequently earned the CPA designation.
Mr. O'Neill has 15 years of experience in financial accounting and reporting.
Prior to joining AmREIT, Mr. O'Neill served as controller at Continental Emsco
in Houston, Texas, Wedge Energy Group in Houston, Texas and Markborough
Development Company in Denver Colorado.

Wade Greene. Mr. Greene serves as Senior Vice President and oversees the
business development and growth of the company's third party brokerage. Mr.
Greene has 20 years of experience in the real estate investment banking/services
industry and has successfully developed and implemented investment strategies
and capital market transactions. He has managed over a billion dollars of real
estate investment, lease and development transactions. Mr. Greene received a
B.S. in Economics from the University of South Alabama and is a licensed Real
Estate Broker, a Certified Commercial Investment Member and holds a NASD Series
7 license.

Todd McDonald. Mr. McDonald serves as Vice President and oversees the
analysis, marketing, and sales process related to properties currently being
marketing by the Company. Mr. McDonald received his B.S. in Business Economics
from Wofford College. Mr. McDonald has real estate experience in which he
reviewed property level financial statements, produced project proformas, and
provided analysis on acquisition and disposition prospects.

Jason Lax. Mr. Lax serves as Vice President and oversees all development
and construction projects. Mr. Lax has nationwide experience in the commercial
construction industry obtained from previous employment with ExxonMobil
Corporation and Trammell Crow Company. During his career, he has managed over a
hundred projects valued over $150 million from grassroots development projects
to minor remodeling projects and has been involved in all phases of development
from conceptual site plan preparation to project turnover after completion of
construction. Mr. Lax received a B.S. in Mechanical Engineering from Texas Tech
University and has received his Engineer In Training certification from the
Texas Board of Professional Engineers. He is also a Texas licensed Real Estate
Salesperson.

Preston Cunningham, JD. Mr. Cunningham serves as our Acquisitions Manager
for existing retail properties and land suitable for infill development. Mr.
Cunningham received a B.B.A. degree in Financial Planning and Services from
Baylor University and Doctor of Jurisprudence from South Texas College of Law.
Mr. Cunningham has significant real estate experience with The Howard Smith
Company, Albritton Properties and Community Bank and Trust. Mr. Cunningham is a
member of the American Bar Association.

Kirby Dixon, Series 7, 24, 65 Securities Licenses-Insurance Group I and IV.
Mr. Dixon serves as Regional Sales Manager. Mr. Dixon's responsibilities include
building, developing and maintaining our relationship with Broker-Dealer
representatives with the purpose of raising capital to fund our investment
programs. Mr. Dixon attended The University of Houston and has twelve years of
experience in the financial services industry with Bank of America Securities
and Raymond James Financial Services serving as a branch manager and financial
representative to over three hundred individual and small business clients in
the Greater Houston area.

Jeff Noblin, MBA, Series 7, 63, 65 and 31. Mr. Noblin serves as Regional
Sales Manager. He is responsible for raising capital through the NASD
marketplace into our company-sponsored programs. Mr. Noblin received his B.B.A.
degree in Marketing, with a minor in Sociology, from Mississippi State
University. He received his MBA in Finance from Texas A&M University. Prior to
joining AmREIT, Mr. Noblin served in a managerial capacity at Dillards Company
and Environmental Designs and Construction, Inc. He also served as a Financial
Planner at Morgan Stanley Dean Witter.

David M. Thailing MBA, Series 63, 65. As the Vice President of Sales and
East Coast Regional Sales Manager, Mr. Thailing is responsible for raising
capital for AmREIT sponsored investment programs through the NASD marketplace.
Mr. Thailing received his B.B.A. degree in management from Southern Methodist
University and earned a Masters of Business from the Jones Graduate School at
Rice University. Prior to joining AmREIT, Mr. Thailing gained financial
consulting experience as an associate with Andersen's Corporate Finance and
Restructuring practice. He also has five years of experience as a financial
advisor and public speaker with PaineWebber.

Neize Ferreira. Mrs. Ferreira serves as Marketing Manager. She oversees and
coordinates the production of marketing materials and information throughout the
marketplace and is responsible for both internal and external communications
regionally and nationally for the company. Mrs. Ferreira attended the New
Orleans Baptist Theological Seminary and has over 15 years of marketing and
public relations experience. Having worked with Principal Financial Services and
Harris Research Inc. she brings her expertise in marketing strategy and research
to the table. She also has extensive practical hands-on experience as an owner
of a small business.

Compensation of Executive Officers

Annual Compensation Long-Term Compensation
Awards

Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary Cash Bonus Compensation Options Compensation
--------------------------- ---- ------ ---------- ------------ ------- ------------
H. Kerr Taylor 2002 $175,000 $122,500 $52,914(1) --- (4)
Chief Executive Officer and 2001 $175,000 $ 61,250 $28,878(1) --- ---
President 2000 $102,500 --- --- --- ---
Chad C. Braun 2002 $115,000 $49,750 $21,488(2) --- $99,996(3),(4)
Executive Vice President and 2001 $ 85,000 $17,500 $ 8,251(2) --- ---
Chief Financial Officer 2000 $ 82,500 $7,125 --- --- ---

---------

(1) Mr. Taylor was granted 8,333 and 3,122 common shares as part of his
bonus for 2002 and 2001, respectively. The restrictions on these
shares lapse equally over a four year period beginning on February 15,
2003 and equally over a three year period beginning February 15, 2002.

(2) Mr. Braun was granted 3,384 and 892 common shares as part of his bonus
for 2002 and 2001, respectively. The restrictions on these shares
lapse equally over a four year period beginning on February 15, 2003
and equally over a three year period beginning on February 15, 2002.

(3) Mr. Braun was granted 14,388 common shares as a bonus related to the
completion of the merger of three affiliated investment funds with the
Company, completed in 2002. The restrictions on these shares lapse
equally over a four year period beginning on February 15, 2003.

(4) Mr. Taylor and Mr. Braun were assigned 45% and 5%, respectively, in
the income and cash flow of the general partner of AAA CTL Notes,
Ltd., which is comprised of a portfolio of seventeen IHOP properties.
Mr. Taylor's interest is 100% vested immediately. Mr. Braun's interest
vests 100% on February 15, 2008. The value of the assigned interest
can not be determined or estimated at this time.

Employment Agreements

The Company does not have employment contracts with any of its key
executives or employees.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our trust managers and executive officers and persons who own more
than 10% of a registered class of our equity securities, to file reports of
holdings and transactions in our securities with the SEC. Executive officers,
trust managers and greater than 10% beneficial owners are required by
applicable regulations to furnish us with copies of all Section 16(a) forms
they file with the SEC.

Based solely upon a review of the reports furnished to us with respect
to our 2002 fiscal year, we believe that all SEC filing requirements applicable
to our trust managers and executive officers were satisfied.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On June 5, 1998, our shareholders voted to approve an agreement and
plan of merger (the "Merger Agreement") with American Asset Advisers Realty
Corporation (the "Former Adviser"), whereby Mr. Taylor, the sole shareholder of
the Former Adviser, agreed to exchange 100% of the outstanding common stock of
the Former Adviser for up to 900,000 of our common shares. As a result of the
merger, we became a fully integrated, self-administered real estate investment
trust. Effective June 5, 1998, we issued Mr. Taylor 213,260 shares of common
stock and he deferred the right to receive the remaining 686,740 common shares
until certain goals were achieved following the merger. The Merger Agreement
currently requires those goals to be met by June 2004. See "Proposal Two --
Amendment of the Merger Agreement." As a result of the merger of AAA Realty
Fund IX, AAA Net Realty Fund X and AAA Net Realty Fund XI into the Company,
completed on July 23, 2003, the Company issued to Mr. Taylor an additional
302,281 class A common shares on September 19, 2002. Since July 23, 2002, Mr.
Taylor has not earned any of the remaining 384,459 class A common shares
payable to him pursuant to the terms of the Merger Agreement.

PROPOSAL ONE
ELECTION OF TRUST MANAGERS

At the annual meeting, five trust managers will be elected by the
shareholders, each trust manager to serve until his successor has been duly
elected and qualified, or until the earliest of his death, resignation or
retirement.

The persons named in the enclosed proxy will vote your shares as you
specify on the enclosed proxy form. If you return your properly executed proxy
but fail to specify how you want your shares voted, the shares will be voted in
favor of the nominees listed below. Our board of trust managers has proposed
the following nominees for election as trust managers at the annual meeting.

Nominees

H. Kerr Taylor - Mr. Taylor has been our chairman of the board of
trust managers, chief executive officer and president since August 1993. Mr.
Taylor was president, director and sole shareholder of American Asset Advisers
Realty Corp. from 1989 to June 1998. Mr. Taylor has a bachelor's degree from
Trinity University, a Masters of Business Degree from Southern Methodist
University and a Doctor of Jurisprudence from South Texas College of Law. Mr.
Taylor has over twenty-five years experience and has participated in over 300
real estate transactions. Mr. Taylor has served on a board and governing bodies
of a bank, numerous private and public corporations and charitable
institutions. Mr. Taylor is a member of the National Board of Realtors, the
Texas Association of Realtors and the Texas Bar Association.

Robert S. Cartwright, Jr.- Mr.Cartwright has been a trust manager or a
director of our predecessor since 1993. Mr. Cartwright earned a bachelor's
degree magna cum laude in Applied Mathematics from Harvard College in 1971 and a
doctoral degree in Computer Science from Stanford University in 1977. Mr.
Cartwright is a Professor of Computer Science at Rice University and has been a
member of the Rice faculty since 1980 and twice served as department Chair. Mr.
Cartwright has compiled an extensive record of professional service. He is a
Fellow of the Association for Computing Machinery (ACM), a member of the ACM
Education Board and a member of the Sun Microsystems Developer Advisory Council.
He recently served as a member of the Board of Directors of the Computing
Research Association, an umbrella organization representing academic and
industrial computing researchers. Mr. Cartwright has also served as a charter
member of the editorial boards of two professional journals and has chaired
several major ACM conferences. From 1991-1996, he was a member of the ACM Turing
Award Committee, which selects the annual recipient of the most prestigious
international prize for computer science research.

G. Steven Dawson - Mr. Dawson has been a trust manager or a director
of our predecessor since 2000. Since 1990, Mr. Dawson has served as senior vice
president and chief financial officer of Camden Property Trust (NYSE:CPT), a
public real estate company, which specializes in the acquisition, development,
and management of over 159 apartment communities throughout the United States,
with major concentrations in Dallas, Houston, Las Vegas, Denver, Southern
California, and the Tampa/Orlando areas. Prior to 1990, Mr. Dawson served in
various related capacities with companies involved in commercial real estate
including land and office building development as well as the construction and
management of industrial facilities located on airports throughout the country.
Mr. Dawson currently serves on the boards of US Restaurant Properties, Inc.
(NYSE:USV) and His Grace Foundation.

Bryan L. Goolsby - Mr. Goolsby has been a trust manager or a director
of our predecessor since 2000. Mr. Goolsby has a bachelor's degree from Texas
Tech University and a Doctor of Jurisprudence from the University of Texas. Mr.
Goolsby is the Managing Partner of Locke Liddell & Sapp LLP, and has practiced
in the area of corporate and securities since 1977. Mr. Goolsby is a associate
member of the Board of Governors of the National Association of Real Estate
Investment Trusts and is a member of the National Multi-Family Housing
Association and the Pension Real Estate Association. Mr. Goolsby is currently a
member of the Associate Board of Directors of the Edwin L. Cox School of
Business, Southern Methodist University and is a member of the board of the
Junior Achievement of Dallas. Mr. Goolsby is also a director of
Web-Real-Estate, Inc.

Philip Taggart - Mr. Taggart has been a trust manager or a director of
our predecessor since 2000. Mr. Taggart has specialized in investor relations
activities since 1964 and is the president and chief executive officer of
Taggart Financial Group, Inc. He is the co-author of the book Taking Your
Company Public, and has provided communications services for 58 initial public
offerings, more than 200 other new issues, 210 mergers and acquisitions, 3,500
analyst meetings and annual and quarterly reports for over 25 years. Mr.
Taggart serves on the boards of International Expert Systems, Inc. and Salon
Group International and served on the board of the Foundation of Texas State
Technical College for 10 years. A distinguished alumnus of the University of
Tulsa, he also has been a university instructor in investor relations at the
University of Houston.

The board of trust managers unanimously recommends that you vote FOR
the election of trust managers as set forth in Proposal One. Proxies solicited
by the board of directors will be so voted unless you specify otherwise in your
proxy.

AUDIT COMMITTEE REPORT

The audit committee has reviewed and discussed the audited financial
statements with management and KPMG LLP, our independent auditors. The audit
committee has also discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61, written
communication from the independent auditors required by Independence Standards
Board Standard No. 1, and has discussed their independence with the independent
auditors. Based upon these reviews and discussions, the audit committee
recommended to the board of directors that the audited financial statements be
included in our Annual Report on Form 10-KSB for the fiscal year ended December
31, 2002 for filing with the SEC.

Based on the foregoing review and discussions and relying thereon, we
have recommended to the Company's Board of Trust Managers that the audited
financial statement for the year ended December 31, 2002 be included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2002 for
filing with the Securities and Exchange Commission.

The members of the audit committee are independent, as independence is
defined in Rule 4200(a)(15) of the National Association of Securities Dealers'
Listing Standards.

The audit committee also recommended the appointment, subject to
shareholder ratification, of KPMG LLP as our independent auditors for 2003 and
the board of trust managers concurred with such recommendation.

This section of the proxy statement is not deemed "filed" with the SEC
and is not incorporated by reference into our Annual Report on Form 10-KSB.

This audit committee report is given by the following members of the
audit committee:

Robert S. Cartwright, Jr.
Philip Taggart
G. Steven Dawson

PROPOSAL TWO
AMENDMENT OF DECLARATION OF TRUST

AmREIT's Amended and Restated Declaration of Trust (the "Declaration
of Trust") currently only permit holders of AmREIT's Class B common shares to
vote on matters specified in the Declaration of Trust, which consist primarily
of matters pertaining to material changes to the rights and preferences of the
class B common shares. Management has held numerous discussions with potential
financing sources and many of these financing sources expressed concern over
the voting control Mr. Taylor continues to have over AmREIT. At April 14,
2003, Mr. Taylor owned 21.43% of the class A common shares, which are currently
AmREIT's only voting securities. In order to alleviate these concerns and to,
thereby, make AmREIT a potentially more attractive financing vehicle, the
board of trust managers is recommending that the holders of class A shares
approve the following amendment to the Declaration of Trust:

The first sentence of Section 4D of the Declaration of Trust is
hereby deleted and replaced in its entirety with the following sentence:

Except as otherwise expressly provided in this Declaration
of Trust or as required by law, each holder of class B
common shares shall be entitled to vote on all matters to
be acted upon by the shareholders of the Trust.

The board of trust managers unanimously recommends that you vote
FOR this proposal. Proxies solicited by the trust managers will be so voted
unless you specify otherwise in your proxy.

PROPOSAL THREE
AMENDMENT OF MERGER AGREEMENT

The terms of the Merger Agreement, pursuant to which we acquired the
Former Adviser in July 1998, provided for the issuance to Mr. Taylor of 213,260
common shares upon the closing of the Merger and for the issuance of Mr. Taylor
of up to 686,740 additional common shares (the "Deferred Shares"), the receipt
of which he deferred under the terms of the Merger Agreement. The terms of the
Merger Agreement provide that the Deferred Shares are to be paid out to Mr.
Taylor, quarterly, in amounts equal to 9.8% of the increase in the total number
of our common shares outstanding at the end of each fiscal quarter over the
number of shares outstanding at the end of the prior fiscal quarter. The
current terms of the Merger Agreement provide that such payments shall be made
until the earlier of the payment in full of the Deferred Shares or the end of
the 24th consecutive quarter following the closing of the Merger. As a result,
the termination date for the payment of the Deferred Shares is currently June
4, 2004 (the "Termination Date").

In July 2002, we completed the merger of AAA Net Realty Fund IX, AAA
Net Realty Fund X and AAA Net Realty Fund XI (collectively, the "Funds") into
the Company. In consideration for the partnership interests of the partners in
each of these Funds, we issued an aggregate of 2,600,327 class B common shares.
As a result, at the end of the September 30, 2002 fiscal quarter, we had
5,263,005 common shares outstanding, including 302,281 Deferred Shares that
were issued to Mr. Taylor on September 9, 2002 pursuant to the terms of the
Merger Agreement. No other Deferred Shares have been issued since that date,
and as of the date of the Proxy Statement, there are still 384,459 Deferred
Shares remaining to be earned and issued.

It was the intention of the Company that the structure of the payment
of the Deferred Shares would incentivize Mr. Taylor to develop plans to acquire
additional assets and to do so, in part, directly or indirectly, through the
issuance of additional equity. The board of trust managers believes this
performance based payout structure continues to provide benefits to the
Company's shareholders, as evidenced by the successful completion of the recent
merger of the Funds into the Company. The board also believes that it is
important to provide Mr. Taylor and the rest of the Company's management team
sufficient time to implement their growth plans and not to penalize Mr. Taylor
through the loss of the remaining Deferred Shares for being prudent in
designing and implementing the Company's growth strategy. As a result, the
board of trust managers has unanimously approved (with Mr. Taylor abstaining)
amending the Merger Agreement to (1)extend the Termination Date for the issuance
of Deferred Shares from June 4, 2004 to June 6, 2006 and (2) change the quarter
end calculation for purposes of determining the number of Deferred Shares, if
any, to be issued to Mr. Taylor to include all outstanding equity securities of
AmREIT at the end of each fiscal quarter, including both common shares and
preferred shares (together, the "Amendment"). The board of trust managers
believes this additional time will provide Mr. Taylor with the continued
incentive to increase the size of the Company, but will allow management the
time to do so in a manner so as to optimize the returns the Company receives
from the equity issued to finance the growth plans.

While the terms of the Merger Agreement do not expressly require
shareholder approval of any amendments to the agreement, the board of trust
managers nevertheless has determined that it is in the best interest of the
shareholders to seek their ratification of the Amendment. The affirmative vote
of the holders of a majority of the class A common shares present in person or
by proxy is required to ratify the Amendment.

The board of trust managers (other than Mr. Taylor) unanimously
recommends that you vote FOR this proposal. Proxies solicited by the trust
managers will be so voted unless you specify otherwise in your proxy.

PROPOSAL FOUR
RATIFICATION OF INDEPENDENT AUDITORS

Based upon the recommendation of the audit committee, the shareholders
are urged to ratify the appointment by our audit committee of KPMG LLP as
independent auditors for the fiscal year ending December 31, 2003. KPMG has
served as our independent auditor since November 2002 and is familiar with our
affairs and financial procedures. Representatives of KPMG are not expected to
be present at the annual meeting.

Principal Accounting Firm Fees

Aggregate fees billed to the Company for the year ended December 31,
2002 by the Company's principal accounting firm, KPMG LLP were as follows:

Audit Fees $75,000
Financial Information Systems
Design and Implementation Fees -0-
All Other Fees $ -0-
======================
======================

Total Fees $75,000

The Audit Committee has determined that the provision of the services
included within "Financial Information Systems Design and Implementation Fees"
and "All Other Fees" to be compatible with maintaining the principal
accountant's independence.

The board of trust managers unanimously recommends that you vote FOR
this proposal. Proxies solicited by the board of trust managers will be so
voted unless you specify otherwise in your proxy.

SHAREHOLDER PROPOSALS

To be included in the proxy statement, any proposals of holders of
class A common shares of the Company intended to be presented at the annual
meeting of shareholders of the Company to be held in 2003 must be received by
the Company, addressed to Mr. Charles C. Braun, secretary of the Company, 8
Greenway Plaza, Suite 824, Houston, Texas, 77046, no later than February 15,
2004 and must otherwise comply with the requirements of Rule 14a-8 under the
Securities Exchange Act of 1934.

ANNUAL REPORT

We have provided without charge a copy of the annual report to
shareholders for fiscal year 2002 to each person being solicited by this proxy
statement. Upon the written request by any person being solicited by this proxy
statement, we will provide without charge a copy of the annual report on Form
10-KSB as filed with the SEC (excluding exhibits, for which a reasonable charge
shall be imposed). All requests should be directed to: H. Kerr Taylor, chairman
of the board, chief executive officer and president at AmREIT, 8 Greenway
Plaza, Suite 824, Houston, Texas 77046.