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 / /
Check the appropriate box:
/X/ Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
Maxus Realty Trust, Inc.
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement, if other than the 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)(4) 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.:
(3) Filing Party:
(4) Date Filed:
Maxus Realty Trust, Inc.
104 Armour Road
North Kansas City, Missouri 64116
March __, 2005
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to
be held at 10:00 A.M. on May 10, 2005, in the 24th Floor Conference Room at 2345
Grand Boulevard, Suite 2400, Kansas City, Missouri. Information regarding
business to be conducted at the meeting is set forth in the accompanying Notice
of Annual Meeting and Proxy Statement.
The Board of Trustees of Maxus Realty Trust, Inc. (the "Trust") is asking
you to consider and vote on the proposals contained in the enclosed Proxy
Statement. In addition to the election of trustees, the Board is recommending:
o an amendment to the Trust's Articles of Incorporation to authorize the
issuance of up to 5,000,000 shares of preferred stock
o an amendment to the Trust's bylaws to not require that the Trust's
Chairman of the Board be the Trust's Chief Executive Officer, but to
allow the Trust's President to be the Trust's Chief Executive Officer,
if so designated by the Trust's Board of Trustees.
The accompanying Proxy Statement, which you are urged to read carefully,
provides detailed information concerning the election of trustees.
We cannot stress enough the importance of the vote of every shareholder,
regardless of the number of shares owned. Therefore, even if you are planning to
attend the meeting, we urge you to complete and return the enclosed proxy to
ensure that your shares will be represented. A postage-paid envelope is enclosed
for your convenience. Should you later decide to attend the meeting, you may
revoke your proxy at any time and vote your shares personally at the meeting.
We look forward to seeing many shareholders at the meeting.
Sincerely,
David L. Johnson
Chairman of the Board,
President and
Chief Executive Officer
MAXUS REALTY TRUST, INC.
104 ARMOUR ROAD
NORTH KANSAS CITY, MISSOURI 64116
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 10, 2005
To the Shareholders of
Maxus Realty Trust, Inc.:
You are hereby notified that the Annual Meeting of Shareholders of Maxus
Realty Trust, Inc. (the "Trust") will be held at 10:00 A.M. on May 10, 2005, in
the 24th Floor Conference Room at 2345 Grand Boulevard, Suite 2400, Kansas City,
Missouri, for the following purposes:
1. To elect seven trustees to hold office until the next Annual Meeting
of Shareholders and until their successors are elected and qualify.
2. To consider and vote on a proposal to amend Article Three of the
Trust's Articles of Incorporation to authorize the issuance of up to
5,000,000 shares of preferred stock.
3. To consider and vote on a proposal to amend Section 4.5 and Section
4.6 of the Trust's bylaws to allow the Trust's Board of Trustees to
designate either the Trust's Chairman of the Board or the Trust's
President as the Trust's Chief Executive Officer.
4. To consider and vote on a proposal to adjourn the Annual Meeting of
Shareholders to allow for additional solicitation of shareholder
proxies or votes in the event that the number of proxies or votes
sufficient to obtain a quorum or to approve Proposal 1, 2 or 3 have
not been received by the date of the Annual Meeting of Shareholders.
5. To consider and act on such other business as may properly come before
the meeting or any adjournment thereof.
The Trust's Board of Trustees has fixed the close of business on March 21,
2005, as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF TRUSTEES
Christine A. Robinson, Secretary
March __, 2005
North Kansas City, Missouri
MAXUS REALTY TRUST, INC.
104 ARMOUR ROAD
NORTH KANSAS CITY, MISSOURI 64116
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 10, 2005
The Board of Trustees of Maxus Realty Trust, Inc. (the "Trust") is
soliciting the enclosed proxy for its use at the Annual Meeting of Shareholders
to be held at 10:00 A.M. on May 10, 2005, in the 24th Floor Conference Room at
2345 Grand Boulevard, Suite 2400, Kansas City, Missouri, or any adjournment
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Shareholders. The Board is first mailing this Proxy Statement and the
enclosed form of proxy on or about March __, 2005.
Introduction
In addition to asking you to vote on nominees to the Board of Trustees, the
Board of Trustees is proposing an amendment to the Trust's Articles of
Incorporation to authorize the issuance of up to 5,000,000 shares of preferred
stock. The Board of Trustees is also proposing an amendment to the Trust's
Bylaws that will allow the Board of Trustees to designate either the Chairman of
the Board or the President as the Chief Executive Officer of the Trust. These
proposals are described in the accompanying Notice of Annual Meeting under
Proposals 2 and 3.
If Proposal 2 is adopted, the Board of Trustees will have the authority to
issue preferred stock from time to time in one or more series, the terms, rights
and features of which are determined by the Trust's Board of Trustees upon
issuance, a structure commonly referred to as "blank check" preferred stock. The
Board would be expressly authorized, at its discretion, to adopt resolutions to
issue shares, to fix the number of shares and to change the number of shares
constituting any series and to provide for or change the powers, designations,
preferences and relative, participating, optional or other rights, if any,
qualifications, limitations or restrictions thereof, if any, including dividend
rights (including whether the dividends are cumulative), dividend rates, terms
of redemption (including sinking fund provisions), redemption prices, conversion
rights and liquidation preferences of the shares constituting any class or
series of the preferred stock, in each case without any further action or vote
by the shareholders.
The amendment will provide the Trust with increased financial flexibility
in meeting future capital requirements by providing another type of security in
addition to its common stock because it will allow preferred stock to be
available for issuance from time to time and with such features as determined by
the Board for any proper corporate purpose. Such purposes could include, without
limitation, issuance for cash as a means of obtaining capital for use by the
Trust, or issuance as part or all of the consideration required to be paid by
the Trust for acquisitions of apartment complexes or other real estate assets.
The authorization of the blank check preferred stock could have
anti-takeover effects and have other negative effects on the Trust's common
stockholders, which are described in detail under Proposal 2. While the
amendment may have anti-takeover ramifications, the Board believes that the
financial flexibility offered by the amendment outweighs any disadvantages.
If Proposal 3 is adopted, the Board of Trustees will have the flexibility
to appoint a Chairman of the Board that is not the Trust's Chief Executive
Officer and is not necessarily a part of the Trust's management. Currently, the
Trust's Bylaws require that the Chairman of the Board be the Chief Executive
Officer of the Trust.
Record Date
The Board of Trustees has fixed the close of business on March 21, 2005, as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the Annual Meeting. On March __, 2005, there were issued and
outstanding and entitled to vote [1,294,304] shares of the Trust's common stock,
par value $1.00 per share. The presence in person or by proxy of the holders of
record of a majority of the shares of Trust common stock entitled to vote at the
Annual Meeting will constitute a quorum for the transaction of business at the
meeting.
Proxies
If you sign and return the enclosed proxy card, the proxies named therein
will vote the shares which the proxy represents in accordance with the
specifications thereon. If you do not indicate the manner in which you want your
shares voted on the proxy card, the proxies will vote them for (i) the nominees
for Trustees named herein and (ii) the proposed amendments to the Trust's
Articles of Incorporation and Bylaws. If you are a participant in the Trust's
First Amended Optional Stock Dividend Plan (formerly the Dividend Reinvestment
Plan), the proxy card represents the number of full shares in your optional
stock dividend plan account, as well as shares registered in your name.
You may revoke your proxy at any time before it is voted by (i) delivering
to the Secretary of the Trust written notice of revocation bearing a later date
than the proxy, (ii) submitting a later dated proxy, or (iii) revoking the proxy
and voting in person at the Annual Meeting. Attendance at the Annual Meeting
will not in and of itself constitute a revocation of a proxy. Any written notice
revoking a proxy should be sent to Christine A. Robinson, Secretary, Maxus
Realty Trust, Inc., 104 Armour, North Kansas City, Missouri 64116.
Voting
Shareholders are entitled to one vote per share on all matters, except for
the election of Trustees, as to which cumulative voting applies. Under
cumulative voting, each shareholder is entitled to cast that number of votes
equal to the number of shares held by the shareholder multiplied by the number
of Trustees to be elected, and all of such votes may be cast for a single
Trustee or may be distributed among the nominees as the shareholder wishes. If
you want to cumulate your votes, you should mark the accompanying proxy card to
clearly indicate how you want to exercise the right to cumulate votes and
specify how you want votes allocated among the
2
nominees for Trustees. For example, you may write "cumulate" on the proxy card
and write next to the name of the nominee or nominees for whom you desire to
cast votes the number of votes to be cast for such nominee or nominees.
Alternatively, without exercising your right to vote cumulatively, you may
instruct the proxy holders not to vote for one or more of the nominees by
marking on the proxy card "For All Except" and filling in the circle next to
each nominee you wish to withhold your vote. By not marking the proxy card with
respect to the election of Trustees to indicate how you want votes allocated
among the nominees, you will be granting authority to the persons named in the
proxy card to cumulate votes if they choose to do so and to allocate votes among
the nominees in such a manner as they determine is necessary in order to elect
all or as many of the nominees as possible.
Trustees must be elected by a plurality vote. To be elected, a nominee must
be one of the seven candidates who receives the most votes out of all votes cast
at the Annual Meeting. The affirmative vote of a majority of the issued and
outstanding shares of the Trust is required to adopt each of the matters
described in Proposal 2 and Proposal 3. The affirmative vote of the holders of a
majority of the shares which are present in person or represented by proxy at
the Annual Meeting is required to act on any other matters properly brought
before the Meeting.
Abstentions and broker non-votes are counted for purposes of determining
the presence or absence of a quorum for the transaction of business. If you
indicate "abstain" or "withheld" on a matter, your shares will be deemed present
for that matter. In tabulating votes cast on the proposals to amend the Articles
of Incorporation and Bylaws (Proposal 2 and Proposal 3), abstentions and broker
non-votes will have the same effect as a negative vote. In tabulating votes cast
on the election of Trustees, broker non-votes are not counted for purposes of
determining the Trustees who have been elected. Shares withheld will have no
impact on the election of Trustees except to the extent that (i) the failure to
vote for an individual nominee results in another nominee receiving a larger
proportion of the vote and (ii) withholding authority to vote for all nominees
has the effect of abstaining from voting for any nominee. In tabulating votes on
other matters, abstentions will have the effect of a negative vote and broker
non-votes will not be counted for purposes of determining whether a proposal has
been approved.
Discretionary Authority
By executing a proxy, you will be giving the proxies discretionary
authority to vote your shares on any other business that may properly come
before the meeting and any adjournment thereof as to which the Trust did not
have notice a reasonable time prior to the date of mailing this proxy statement.
The Board of Trustees is not aware of any such other business and does not
itself intend to present any such other business. However, if such other
business does come before the meeting, shares represented by proxies will be
voted by the persons named in the proxy in accordance with their best judgment.
A proxy also confers discretionary authority on the persons named therein to
approve minutes of the last Annual Meeting of Shareholders, to vote on matters
incident to the conduct of the meeting and to vote on the election of any person
as a Trustee if a nominee herein named should decline or become unable to serve
as a Trustee for any reason.
3
Costs of Solicitation
The Trust will pay all costs of preparing and soliciting proxies for the
Annual Meeting. In addition to solicitation by mail, officers and Trustees of
the Trust may solicit proxies from shareholders personally, or by telephone. The
Trust will also reimburse brokerage firms, banks and other nominees for their
reasonable costs incurred in forwarding proxy materials for shares held of
record by them to the beneficial owners of such shares.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Proxy Statement constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. When used in this Proxy Statement, the words "estimate," "project,"
"anticipate," "expect," "intend," "believe" and similar expressions are intended
to identify forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance and achievements of the Trust, or industry results,
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among other things, the following factors, as well as those factors discussed
elsewhere in the Trust's filings with the Commission: competition, inflation,
the ability to retain tenants, general economic, business, market and social
conditions, trends in the real estate investment market, projected leasing and
sales, future prospects for the Trust and other factors referred to in this
Proxy Statement.
PROPOSAL 1
ELECTION OF TRUSTEES
The Board of Trustees proposes the election of the seven nominees listed
below to serve as Trustees of the Trust until the next Annual Meeting of
Shareholders and until their successors have been elected and qualify, or until
their earlier death, resignation or removal. If any vacancy in the list of
nominees shall occur for any reason, the Board of Trustees will select a
substitute nominee to be voted upon at the Annual Meeting.
The following is a brief summary of the business experience during the past
five years of each of the nominees for election as Trustees of the Trust,
including, where applicable, information regarding other directorships held by
each nominee:
Mr. David L. Johnson, age 48, has served as a Trustee, Chairman of the
Board, President and Chief Executive Officer of the Trust since May 11, 2004. He
also served as Trustee from November 27, 1999 until May 13, 2003. He also served
as Chief Executive Officer from November 27, 1999 until January 25, 2002. Mr.
Johnson is also Chairman of Maxus Properties, Inc. ("Maxus"), a Missouri
corporation located at 104 Armour Road, North Kansas City, Missouri 64116 that
specializes in commercial property management for affiliated owners. Maxus
employs more than 200 people to manage 43 commercial properties, including more
than 6,500 apartment units and approximately 400,000 square feet of retail and
office space. He has
4
served as Chairman of Maxus since its inception in 1988. Mr. Johnson is also on
the Board of Directors of Maxus Capital Corp.
Mr. Danley K. Sheldon, age 46, has served as a Trustee since January 25,
2002. He was formerly the Trust's President and Chief Executive Officer from
January, 2002 until May, 2004. Mr. Sheldon also was formerly the chief executive
officer of the Trust, from May, 2002 until September, 2003. Prior to joining
Maxus, Mr. Sheldon held various positions with Ferrellgas Partners, L.P., a New
York Stock Exchange listed company, including at various times the positions of
CFO, President and Chief Executive Officer. Mr. Sheldon currently serves as a
member of the board of directors of Blue Cross Blue Shield of Kansas City (where
he chairs its audit committee) and the board of directors of The Greater Kansas
City Community Foundations (where he chairs its finance committee and is
Treasurer). Mr. Sheldon is also on the Board of Directors of Maxus Capital
Corp., the managing general partner of Maxus Real Property Investors-Four, L.P.,
a Missouri limited partnership that is a public reporting company. Since 2003,
Mr. Sheldon has been involved in developing, financing and operating various
site-based entertainment concepts.
Mr. Monte McDowell, age 47, has served as a Trustee since November 9, 1999.
He is President, Chief Executive Officer and principal shareholder of McDowell
Holdings, Inc., a Missouri corporation, and a diversified holding company with
interests in the outdoor sports industry and wholesale pharmaceutical
distribution. Previously, Mr. McDowell was President, Chief Executive Officer
and principal shareholder of Home Medical Specialty Equipment, Inc., a Missouri
corporation doing business as MED4HOME, involving capital equipment medical
sales.
Mr. Christopher J. Garlich, age 47, has served as a Trustee since November
27, 1999. He is the Executive Vice President and member of Bancorp Services,
LLC, a Missouri limited liability company, specializing in the development,
administration and distribution of life insurance products to the corporate and
high net worth market place. Mr. Garlich, through a wholly-owned trust, is also
the majority shareholder of Maxus.
Mr. W. Robert Kohorst, age 52, has served as a Trustee since May 15, 2002.
He is President, founding shareholder and majority owner of Everest Properties,
LLC ("Everest"), which specializes in real estate and related investments, which
operates through subsidiaries and affiliates.
Mr. Jose L. Evans, age 41, has served as a Trustee since May 13, 2003. He
is President and sole owner of Assured Quality Title Trust, a real estate title
insurance agency and escrow company.
Mr. Kevan D. Acord, age 46, has served as a Trustee since May 11, 2004. He
is an attorney and certified public accountant in private practice in Lenexa,
Kansas. He is the sole shareholder of Kevan D. Acord, P.A., a Lenexa, Kansas,
based law firm specializing in the areas of federal and state income taxation,
corporation law, and merger and acquisitions law. Mr. Acord is also the Managing
Partner of Acord Cox & Trust, a full-service Lenexa, Kansas based certified
public accounting firm. Prior to forming his own law and accounting firm in
1992, Mr. Acord was a Senior Tax Manager with the international accounting firm
of Deloitte & Touche.
5
In connection with two limited partnerships (Pineridge Associates, L.P. and
Quivira Place Associates, L.P.) in which Mr. Johnson was the majority interest
holder in the general partners and was involved in the management, the limited
partners of the partnerships filed suit against Mr. Johnson individually and the
general partners alleging, in part, that the defendants breached their duties
and obligations to the limited partners. Judgment was entered against Mr.
Johnson and the general partners that resulted in the general partners being
removed as the management of the partnerships in 2003. While on appeal, in which
Mr. Johnson and the general partners were vigorously contesting the judgment of
the case, the parties reached a global settlement of this case and other
litigation between related parties. As part of the global settlement, the
parties to this case agreed to cooperate to vacate the judgment, including all
findings against Mr. Johnson. On November 29, 2004, the Court vacated the
judgment.
Each of Messrs. McDowell, Kohorst, Evans, Sheldon and Acord are Independent
Trustees as defined in the Trust's Bylaws. The Board has determined that each of
the trustees currently slated for re-election is independent within the meaning
of the National Association of Securities Dealers ("NASD") listing standards,
Rule 4200(a)(15), with the exception of (i) Mr. Sheldon, the former President
and Chief Executive Officer of the Trust, (ii) Mr. Garlich, a majority
shareholder of Maxus and (iii) Mr. Johnson, the Chairman of Maxus.
The Board of Trustees Recommends a Vote For The Above Nominees For Trustees
of The Trust.
Communicating with the Board of Trustees
Shareholders may communicate with the Board of Trustees, its committees or
any member of the Board of Trustees by sending a letter in care of the Trust's
Corporate Secretary at 104 Armour Boulevard, North Kansas City, Missouri 64116.
The Board of Trustees' policy is to have all shareholder communications compiled
by the Corporate Secretary and forwarded directly to the Board, the committee or
the trustee as indicated in the letter. All letters will be forwarded to the
appropriate party. The Board of Trustees reserves the right to revise this
policy in the event that this process is abused, becomes unworkable or otherwise
does not efficiently serve the purpose of the policy.
Meetings and Committees of the Board
Among the standing committees of the Board of Trustees are the Executive
Committee, the Audit Committee and the Nominating Committee. The Trust does not
have a standing compensation committee.
The Executive Committee
The Executive Committee is comprised of David L. Johnson, W. Robert
Kohorst, and Monte McDowell. The Executive Committee is empowered to exercise,
between regular meetings of the Board of Trustees, all of the authority of the
Board of Trustees in the management of the Trust.
6
The Audit Committee
The Audit Committee represents the Board of Trustees in overseeing the
Trust's accounting and financial reporting processes and financial statement
audits. The Audit Committee also reviews the implementation of the Trust's code
of conduct. In this regard, the Audit Committee assists the Board of Trustees by
reviewing the financial information disclosure, the internal controls
established by management and the internal and external audit process. The Audit
Committee currently consists of Messrs. Kohorst (Chairman), Acord and Evans. The
Audit Committee has been established in accordance with Securities and Exchange
Commission rules and regulations, and all the members of the Audit Committee are
independent as independence for audit committee members is defined under Rule
4200(a)(15) of the NASD listing standards. The Board of Trustees has determined
that Mr. W. Robert Kohorst, the Audit Committee Chairman, qualifies as an "audit
committee financial expert" within the meaning of Securities and Exchange
Commission rules and regulations. In February 2004, the Board amended the Audit
Committee charter to include additional requirements related to the
Sarbanes-Oxley Act of 2002 and NASD listing standards. The Audit Committee
Charter as amended and adopted on February 11, 2004, was included as Appendix A
to the Trust's proxy statement for 2004 filed with the Securities and Exchange
Commission on March 15, 2004.
The information in or referred to in the foregoing paragraph shall not be
deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of 1933
or under the Securities Exchange Act of 1934, except to the extent that the
Trust specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
The Nominating Committee
The Board of Trustees established a nominating committee and adopted a
charter for the committee at its annual meeting on May 11, 2004, after the
Annual Meeting of the Shareholders. The Nominating Committee Charter is attached
as Appendix A to this Proxy Statement. The Nominating Committee consists of
Messrs. Accord, Evans and McDowell, each of whom is independent within the
meaning of NASD's listing standards. The Nominating Committee's purpose is to
identify and recommend individuals to the Board for nomination as members of the
Board. The Nominating Committee held its first meeting on January 11, 2005.
Trustee Nomination Process
Effective January 11, 2005, the Nominating Committee adopted certain
policies and procedures applicable to the nominating committee process. The
policies and procedures provide that the Nominating Committee should consider
the following criteria in selecting nominees:
o financial, regulatory and business experience;
o familiarity with and participation in the local community;
o integrity, honesty and reputation;
o dedication to the Trust and its shareholders; independence; and
7
o any other factors the Nominating Committee deems relevant, including
diversity, size of the Board of Trustees and regulatory disclosure
obligations.
The policies and procedures adopted by the Nominating Committee include the
process for identifying and evaluating nominees. For purposes of identifying
nominees for the Board of Trustees, the Nominating Committee should rely on
their personal contacts and other members of the Board of Trustees. The
Nominating Committee will also consider trustee candidates recommended by
shareholders as described below.
In evaluating potential nominees, the Nominating Committee is to determine
whether the nominee is eligible and qualified for service on the Board of
Trustees by evaluating the candidate under the selection criteria set forth
above. In addition, the Nominating Committee is to conduct a check of the
individual's background and interview the candidate. The Nominating Committee
may in its sole discretion require candidates (including a shareholder
recommended candidate) to complete a form of questionnaire similar to
questionnaires completed by trustee nominees prior to filing the Trust's proxy
statement.
The trustee nominees named in this proxy statement were recommended to the
Board by the Nominating Committee.
Procedures Regarding Trustee Candidates Recommended By Shareholders
Under the policies and procedures adopted by the Nominating Committee, the
Nominating Committee will also consider shareholder recommendations of qualified
nominees when such recommendations are submitted in accordance with the
procedures below. In order to have a nominee considered by the Nominating
Committee for election at the 2006 annual meeting, a shareholder must submit its
recommendation in writing to the attention of the Trust's Corporate Secretary at
104 Armour Boulevard, North Kansas City 64116 not later than November [__],
2005. Any such recommendation must include:
o the name of the person recommended as a trustee candidate;
o all information relating to such person that is required to be
disclosed in solicitations of proxies for election of trustees
pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended;
o the written consent of the person being recommended as a trustee
candidate to being named in the proxy statement as a nominee and to
serving as a trustee if elected;
o with regard to the shareholder making the recommendation, the
shareholder's name and address as they appear on the Trust's records;
provided, however, that if the shareholder is not a registered holder
of the Trust's common stock, the shareholder must submit his or her
name and address along with a current written statement from the
record holder of the shares that reflects such shareholder's
beneficial ownership of the Trust's common stock and the record
holder's name and address as they appear on the Trust's records; and
8
o a statement disclosing whether such shareholder is acting with or on
behalf of any other person, entity or group and, if applicable, the
identity of such person, entity or group.
Once the Nominating Committee receives the recommendation, the Nominating
Committee will deliver to the candidate a questionnaire that requests additional
information about the candidate's independence, qualifications and other matters
that will assist the Nominating Committee in evaluating the candidate, as well
as certain information that must be disclosed about the candidate in our proxy
statement or other regulatory filings, if nominated. Candidates must complete
and return the questionnaire within the time frame provided to be considered for
nomination by the Nominating Committee.
Attendance at Meetings
From January 1, 2004 to December 31, 2004, the Board of Trustees met twelve
(12) times. All of the incumbent Trustees attended seventy-five percent or more
of all of the meetings of the Board of Trustees and meetings held by those
committees of the Board on which they served, except Monte McDowell. The
Executive Committee did not meet during 2004.
Each year the Annual Meeting of Shareholders is held on the same day as the
Annual Meeting of the Board of Trustees. Although there is no policy requiring
Board members to attend the Annual Meeting of the Shareholders, all Board
members usually attend both the Annual Meeting of Shareholders and the Annual
Meeting of the Board of Trustees. All Board members attended the 2004 Annual
Meeting of Shareholders either in person or by telephone.
Audit Committee Report
The Audit Committee has reviewed and discussed with management the audited
financial statements for the year ended December 31, 2004; has discussed with
the independent auditors the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU ss. 380), as modified or
supplemented; has received the written disclosures and letter from the
independent auditors required by Independence Standards Board Standard No. 1, as
may be modified or supplemented; and has discussed with the independent auditors
the auditors' independence. Based on such review and discussions, the Audit
Committee has recommended to the Board of Trustees that the audited financial
statements for the year ended December 31, 2004, be included in the Trust's
Annual Report on Form 10-KSB for filing with the Securities and Exchange
Commission.
This report was made over the name of each member of the Audit Committee on
March __, 2005, namely Jose L. Evans, Kevan D. Acord and W. Robert Kohorst.
The information in the foregoing two paragraphs shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to
9
the extent that the Trust specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
Audit Fees
The aggregate fees billed the Trust by KPMG LLP for professional services
rendered for the audit of the Trust's annual financial statements for the years
ended December 31, 2003 and December 31, 2004, and the review of the financial
statements included in the Trust's reports on Form 8-K and Form 10-QSB during
the years 2003 and 2004 were $50,500 and $70,350, respectively.
Audit-Related Fees
KPMG LLP did not bill any fees to the Trust for assurance and related
services that are reasonably related to the performance of the audit or review
of the Trust's financial statements and that are not reported under the
preceding caption for the years ended December 31, 2003 and December 31, 2004.
Tax Fees
The aggregate fees billed to the Trust for professional services rendered
by KPMG LLP for tax compliance, tax advice and tax planning for the years ended
December 31, 2003 and December 31, 2004, were $37,000 and $23,535, respectively.
These fees relate to services performed with regard to federal and state tax
compliance, fixed asset depreciation analysis, information reporting
consultation, distribution characterization analysis and general miscellaneous
tax consulting.
All Other Fees
KPMG LLP did not bill any fees to the Trust for any services other than
those described under the preceding three captions during the years ended
December 31, 2003 and December 31, 2004.
Audit Committee's Pre-Approval Policies
The Audit Committee's policy is to pre-approve all audit services and all
permitted non-audit services (including the fees and terms thereof) to be
provided by the Trust's independent auditor; provided, however, pre-approval
requirements for non-audit services are not required if all such services (1) do
not aggregate to more than five percent of total revenues paid by the Trust to
its accountant in the fiscal year when services are provided; (2) were not
recognized as non-audit services at the time of the engagement; and (3) are
promptly brought to the attention of the Audit Committee and approved prior to
the completion of the audit by the Audit Committee.
All of KPMG's fees in 2003 and 2004 described above were approved in
advance by the Audit Committee.
10
Trustees' Compensation
Pursuant to the Trust's Bylaws, the Trust's officers who serve as Trustees
do not receive compensation for their services as Trustees.
The Trust pays Independent Trustees the following fees: (a) $900 annual
fee, (b) $450 for each meeting attended in person and (c) $225 for each meeting
attended by telephone conference at which a vote was taken. In addition, the
Trust reimburses the Independent Trustees for their travel expenses and other
out-of-pocket expenses incurred in connection with attending meetings and
carrying on the Trust's business.
There are no family relationships between any of the Trustees or executive
officers.
Executive Officers
POSITIONS OR OFFICES
NAME AGE WITH THE TRUST
David L. Johnson(1)......... 48 Chairman of the Board, President,
Chief Executive Officer and Trustee
John W. Alvey............... 46 Vice President and Chief Financial
and Accounting Officer
Mr. John W. Alvey has served as Vice President and Chief Financial and
Accounting Officer since November 1999. He served as a Trustee from September
19, 2000 until May 15, 2002. He is also Executive Vice President and Chief
Financial Officer of Maxus. He has served in these capacities since 1988. Mr.
Alvey is also on the Board of Directors of Maxus Capital Corp., the managing
general partner of Maxus Real Property Investors-Four, L.P., a Missouri limited
partnership that is a public reporting company.
(1) Mr. Johnson became Chairman of the Board, President and Chief Executive
Officer on May 11, 2004. Prior to such date, Mr. Danley K. Sheldon served in
such capacities. For biographical information on Messrs. Johnson and Sheldon,
see "ELECTION OF TRUSTEES."
Executive Compensation
No person serving as executive officer as of the end of or during 2004 or
2003 received salary and bonuses exceeding $100,000. None of the Trust's
executive officers are compensated by the Trust for their services, except
Danley K. Sheldon received a $15,000 bonus for his assistance in the sale of the
ACI Building.
Related Transactions
The Trust has entered into an agreement with Maxus to manage the Trust's
properties. David L. Johnson, Chairman, President, Chief Executive Officer and a
Trustee of the Trust, is the Chairman of Maxus. Christopher J. Garlich, a
current Trustee, through a wholly-owned trust,
11
is the majority shareholder of Maxus, and Mr. Johnson and his wife own
approximately [__]% of the outstanding stock of Maxus. John W. Alvey is also an
executive officer of Maxus. Management fees of $301,000 and $_________ payable
to Maxus have been incurred for the years ended December 31, 2003 and December
31, 2004, respectively. The management fees the Trust pays Maxus for the
management of the properties held by the Trust ranges from [3.6% to 5%] of the
monthly gross receipts from the operation of each of the properties held by the
Trust. In addition, certain Maxus employees are located at the Trust's
properties and perform leasing, maintenance, office management and other related
services for these properties. The Trust recognized $709,000 and $_________ of
such payroll costs for the years ended December 31, 2003 and December 31, 2004,
respectively, that have been or will be reimbursed to Maxus by the Trust.
On April 30, 2004, the Trust, through one of the Trust's subsidiaries,
acquired The Terrace Apartments pursuant to a merger transaction with Terrace
Acquisition, L.P. ("Terrace LP") David L. Johnson, the Trust's Chairman, Chief
Executive Officer and President and beneficial owner of more than 10% of the
Trust's issued and outstanding common stock, is the principal owner and
President of DLJ Enterprises, Inc. ("DLJ"), the general partner of Terrace LP,
and is the primary equity owner of a limited partner of a partnership that owned
approximately 18% of Terrace LP. In connection with the merger, DLJ received
3,621 operating units of Maxus Operating Limited Partnership ("MOLP"), the
Trust's operating limited partnership. DLJ also received a brokerage commission
of $72,000 in connection with the closing of the merger transaction between
Terrace Acquisition, L.P. and MOLP in the form of 6,000 operating units of MOLP.
The operating units are convertible into shares of the Trust's common stock
(currently on a one unit for one share basis) or cash, at the Trust's election.
On September 1, 2004, DLJ also received a brokerage commission of $70,500
in connection with the closing of the purchase of the Arbor Gate and Waverly
apartment complexes by subsidiaries of the Trust.
Report of the Independent Trustees
The Trust does not have a compensation committee responsible for
establishing an executive compensation policy and plan for the Trust. In the
place of such a compensation committee, the Independent Trustees are responsible
for establishing the executive compensation policies. The Independent Trustees
review and approve all compensation plans, benefit programs and perquisites for
executives.
The Independent Trustees have determined not to pay the executive officers
a salary, except for the bonus described above to Danley K. Sheldon, or enter
into employment agreements with the executive officers because the executive
officers (i) are already significant shareholders of the Trust and (ii) are
affiliates of the management company hired by the Trust to manage the properties
held by the Trust.
The Independent Trustees review this compensation policy on an annual
basis.
12
This report was made over the name of each of the Independent Trustees:
Monte McDowell, Kevan D. Acord, W. Robert Kohorst and Jose L. Evans.
Performance Graph
The following performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Trust
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
The following performance graph shows a five-year comparison of cumulative
total returns (change in stock price plus reinvested dividends) for Maxus Realty
Trust, Inc. ("MRTI"), the Total Return Index for The NASDAQ Stock Market (U.S.)
("NASDAQ") and the National Association of Real Estate Investment Trusts
("NAREIT") Total Return Index.
[GRAPHIC OMITTED]
Comparison Of Five-Year Cumulative Total Return Among
Maxus Realty Trust, the Total Return Index for The Nasdaq Stock Market (U.S.)
and NAREIT Composite Return Index
Assumes $100 invested on December 31, 1999 in Maxus Realty Trust, Inc.
Common Stock, NASDAQ Stock Market (U.S.) and NAREIT Composite Index
December 31,
2000 2001 2002 2003 2004
---- ---- ---- ----- ----
NASDAQ 60.31 47.84 33.07 49.45 53.81
NAREIT 125.89 145.41 152.99 211.84 276.26
MRTI 125.24 232.70 210.97 243.32 349.32
13
PROPOSAL 2
PROPOSAL TO CREATE A CLASS OF PREFERRED
STOCK IN THE AMOUNT OF 5,000,000 SHARES
The proposed amendment to Article Three of the Articles of Incorporation
attached as Appendix B to this proxy statement will create 5,000,000 authorized
shares of preferred stock commonly referred to as "blank check" preferred stock.
The following summary does not purport to be complete and is qualified in its
entirety by reference to the proposed amendment to Article Three of the Articles
of Incorporation as set forth in Appendix B.
The term "blank check" refers to preferred stock, the creation and issuance
of which is authorized in advance by the shareholders and the terms, rights and
features of which are determined by the Trust's Board of Trustees upon issuance.
The authorization of such preferred stock would permit the Board of Trustees to
authorize and issue preferred stock from time to time in one or more series.
Subject to the provisions of the Trust's amendment to the Articles of
Incorporation and the limitations prescribed by law, the Board would be
expressly authorized, at its discretion, to adopt resolutions to issue shares,
to fix the number of shares and to change the number of shares constituting any
series and to provide for or change the powers, designations, preferences and
relative, participating, optional or other rights, if any, qualifications,
limitations or restrictions thereof, if any, including (i) dividend rights
(including whether the dividends are cumulative), (ii) dividend rates, (iii)
terms of redemption (including sinking fund provisions), (iv) redemption prices,
(v) conversion rights and prices and (vi) liquidation preferences of the shares
constituting any class or series of the preferred stock, in each case without
any further action or vote by the shareholders. The Board would be required to
make any determination to issue shares of preferred stock based on its judgment
as to the best interests of the Trust and its shareholders. The Board is seeking
shareholder approval of an amendment to the Articles of Incorporation which
would give the Board flexibility, without further shareholder action, to issue
preferred stock on such terms and conditions as the board of directors deems to
be in the best interests of the Trust and its shareholders. The Trust has no
immediate definitive plans to issue any shares of preferred stock. Therefore,
the terms, rights and features of a preferred stock subject to this proposal
cannot be stated or predicted with certainty.
It is not possible to state the effects of the proposed amendment upon the
rights of holders of common stock until the Board determines the respective
rights of the holders of one or more series of preferred stock. However, the
issuance of shares of preferred stock pursuant to the Board's authority
described above may adversely affect the rights of the holders of common stock.
Specifically, the effects of such issuances of preferred stock could include (i)
reduction of the amount of cash otherwise available for payment of dividends on
common stock, if any, (ii) restrictions on dividends on common stock, (iii)
dilution of the voting power of common stock, and (iv) restrictions on the
rights of holders of common stock to share in the Trust's assets on liquidation
until satisfaction of any liquidation preference granted to the holders of such
subsequently designated class or series of preferred stock. For example,
preferred stock issued by
14
the Trust may have priority over the common stock as to dividend rights,
liquidation preferences or both, may have full or limited voting rights, and may
be convertible into shares of common stock. Accordingly, the issuance of shares
of preferred stock could decrease the amount of earnings and assets allocable to
or available for distribution to holders of common stock and adversely affect
the rights and powers, including voting rights of the common stock, and may
discourage bids for the common stock or may otherwise adversely affect the
market price of the common stock.
The amendment will provide the Trust with increased financial flexibility
in meeting future capital requirements by providing another type of security in
addition to its common stock, as it will allow preferred stock to be available
for issuance from time to time and with such features as determined by the Board
for any proper corporate purpose. Such purposes could include, without
limitation, issuance for cash as a means of obtaining private capital for use by
the Trust, or issuance as part or all of the consideration required to be paid
by the Trust for acquisitions of other businesses or assets. Because the Board
will determine the rights, powers, designations, preferences and qualifications
of any preferred stock the Trust may issue, without additional shareholder
approval, the Board can negotiate terms on an expedited basis. Management
believes that this will also help reduce costs because the Trust will not have
to seek shareholder approval to issue the preferred shares unless the Trust is
required to obtain shareholder approval for the transaction under NASDAQ rules.
Any issuance of preferred stock with voting rights could, under certain
circumstances, have the effect of delaying or preventing a change in control of
the Trust by increasing the number of outstanding shares entitled to vote and by
increasing the number of votes required to approve a change in control of the
Trust. Shares of voting or convertible preferred stock could be issued, or
rights to purchase such shares could be issued, to render more difficult or
discourage an attempt to obtain control of the Trust by means of a tender offer,
proxy contest, merger or otherwise. The ability of the Board of Trustees to
issue such additional shares of preferred stock, with the rights and preferences
it deems advisable, could discourage an attempt by a party to acquire control of
the Trust by tender offer or other means. Such issuances could therefore deprive
shareholders of benefits that could result from such an attempt, such as the
realization of a premium over the market price that such an attempt could cause.
Moreover, the issuance of such additional shares of preferred stock to persons
friendly to the Board could make it more difficult to remove incumbent officers
and trustees from office even if such change were to be favorable to
shareholders generally.
The Trust has existing provisions in its articles and bylaws that may deter
a takeover. These provisions include: REIT protective provisions that limit
beneficial ownership by anyone other than Mr. Johnson to 7.6% of the Trust's
outstanding shares of common stock and provisions giving the board of directors
sole power to set the number of directors. Further, the Trust's current articles
of incorporation authorizes 5,000,000 shares of common stock, which are
approximately 3,700,000 more shares than the number of shares currently
outstanding. The Trust could issue, within the limits imposed by applicable law,
shares of authorized and available common stock as a means to dilute public
ownership of the Trust and thereby discourage a potential adverse acquirer from
seeking control of the Trust.
15
While the amendment may have anti-takeover ramifications, the Board has not
recommended the amendment for the purpose of adopting an anti-takeover measure
and does not anticipate using it for such purpose, but instead believes that the
financial flexibility offered by the amendment outweighs any disadvantages or
anti-takeover ramifications. To the extent that the amendment may have
anti-takeover effects, the amendment may encourage persons seeking to acquire
the Trust to negotiate directly with the Board enabling the Board to consider
the proposed transaction in a manner that best serves the shareholders'
interests. The Board recommended the amendment by approval of each of the
members of the Board attending the board meeting.
The Board of Trustees Recommends a Vote for the above described Amendment
to the Trust's Articles of Incorporation.
PROPOSAL 3
PROPOSAL TO ALLOW THE TRUST'S PRESIDENT TO BE DESIGNATED
AS THE TRUST'S CHIEF EXECUTIVE OFFICER
The proposed amendments to Section 4.5 and Section 4.6 of the Trust's
Bylaws attached as Appendix C to this proxy statement will allow the Board of
Trustees to designate either the Chairman of the Board or the President as the
Chief Executive Officer of the Trust. The following summary does not purport to
be complete and is qualified in its entirety by reference to the proposed
amendments to Section 4.5 and Section 4.6 of the Bylaws as set forth in Appendix
C.
Currently, Section 4.5 of the Trust's Bylaws require that the Chairman of
the Board be the Chief Executive Officer of the Trust. The Board of Trustees
would like the flexibility to appoint a Chairman of the Board that would not be
the Trust's Chief Executive Officer and would not have to be part of the Trust's
management. The Board believes that such amendments are in the best interests of
the Trust because it will allow the Trust to appoint a Chairman of the Board who
is not part of the Trust's management to potentially have additional oversight
of the Trust's management.
The Board of Trustees Recommends a Vote for the above described Amendments
to the Trust's Bylaws.
PROPOSAL 4
PROPOSAL TO APPROVE ANY ADJOURNMENT
OF THE ANNUAL MEETING
A vote (i) in person by a shareholder for adjournment of the Annual Meeting
of Shareholders or (ii) for Proposal 4 on the proxy card authorizing the named
proxies on the proxy card to vote the shares covered by such proxy to adjourn
the Annual Meeting of Shareholders,
16
would allow for additional solicitation of shareholder proxies or votes in order
to obtain a quorum or in order to obtain more proxies or votes in favor of
Proposal 1, Proposal 2 and/or Proposal 3. Consequently, it is not likely to be
in the interest of shareholders who intend to vote against Proposal 1, Proposal
2 and/or Proposal 3 to vote in person to adjourn the Annual Meeting of
Shareholders or to vote for Proposal 4 on the proxy card.
The Board of Trustees Recommends a Vote For Any Proposal to Adjourn The
Annual Meeting to Allow For Additional Solicitation of Shareholder Proxies or
Votes.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of March __, 2005, regarding
the number of shares of the Trust beneficially owned by each of the Trustees,
nominees for Trustee and executive officers of the Trust, by any other person,
if any, known to own 5% or more of the Trust's outstanding shares and by all
current Trustees, nominees for Trustees and executive officers as a group:
Name of Number of Shares Percent
Beneficial Owner(1) Beneficially Owned (2) of Class (3)
---------------- ---------------------- ------------
David L. Johnson 160,632 (4) 12.4
John W. Alvey 55,881 (5) 4.3
Christopher J. Garlich 77,882 (6) 6.0
Monte McDowell 19,884 (7) 1.6
Danley K. Sheldon 20,000 (8) 1.6
W. Robert Kohorst 35,748 (9) 2.8
Kevan D. Acord 2,130 (10) *
Jose L. Evans 27,852 2.1
Mercury Real Estate Advisors LLC 97,998 (11) 7.6
100 Field Point Road
Greenwich, CT 06830
Mercury Special Situations Fund LP 80,656 (11) 6.2
100 Field Point Road
Greenwich, CT 06830
Malcolm F. MacLean IV 97,998 (11) 7.6
100 Field Point Road
Greenwich, CT 06830
David R. Jarvis 97,998 (11) 7.6
100 Field Point Road
Greenwich, CT 06830
17
Trustees and Executive 312,975 25.2
Officers as a Group
(1) Each of the named beneficial owners other than Mercury Real Estate Advisors
LLC may be reached at the Trust's executive offices: c/o Maxus Realty
Trust, 104 Armour Boulevard, North Kansas City, Missouri 64116.
(2) Under the rules of the Securities and Exchange Commission, persons who have
power to vote or dispose of securities, either alone or jointly with
others, are deemed to be the beneficial owners of such securities. Except
as described in the footnotes below, the Trustee has both sole voting power
and sole investment power with respect to the shares set forth in the
table.
(3) An asterisk indicates that the number of shares beneficially owned do not
exceed one percent of the number of shares of common stock issued and
outstanding.
(4) Includes: (i) 150,561 shares held by Mr. Johnson and his wife as joint
tenants with right of survivorship, (ii) 150 shares held in an individual
retirement account for Mr. Johnson's benefit, (iii) 300 shares held by his
minor son and daughter and (iv) 9,621 units of Maxus Operating Limited
Partnership ("MOLP"), the Trust's operating limited partnership, which are
currently convertible into 9,621 shares of the Trust's common stock. Does
not include (i) 49,946 shares pledged as collateral to Sunset Plaza Realty
Partners, L.P. ("Sunset"), a limited partnership in which Mr. Johnson and
his wife indirectly are the principal equity interest holders, to secure
loans made by Sunset and (ii) 37,881 shares pledged as collateral to Bond
Purchase, L.L.C. ("Bond Purchase"), a limited liability company in which
Mr. Johnson and his wife are the majority equity interest holders, to
secure a loan to NKC Associates, L.L.C. (as described in note (5) below).
(5) Includes shared voting and dispositive power of the 37,881 shares held by
NKC Associates, L.L.C., a Missouri limited liability company ("NKC"), in
which Mr. Alvey holds a 22.5% equity interest. NKC acquired these shares
with funds from a demand loan made by Bond Purchase, L.L.C., a Missouri
limited liability company and affiliate of David L. Johnson. The demand
loan is secured by the 37,881 shares of the Trust acquired by NKC, with
interest accruing on the unpaid balance at a rate of eight percent per
annum. Substantially all of the shares purchased by Mr. Alvey other than
the shares acquired by NKC Associates, L.L.C. were purchased with funds
loaned to Mr. Alvey by David L. Johnson and his wife and his affiliates.
These loans are unsecured.
(6) Includes 51,382 shares held by a trust in which Mr. Garlich is the [grantor
and trustee] and 26,500 shares held by Mr. Garlich's wife.
(7) Includes: (i) 11,000 shares held by a revocable trust for the benefit of
Mr. McDowell's minor son, (ii) 4,875 shares held by McDowell Investments,
L.P., a Missouri limited
18
partnership in which Mr. McDowell is the 100% equity holder ("McDowell
Investments") and (iii) 4,009 shares held by his minor son in a custodial
account in which Mr. McDowell is the custodian.
(8) These shares have been pledged as collateral to Sunset to secure loans made
by Sunset to Mr. Sheldon.
(9) Includes (i) 33,048 shares held by Everest Management, LLC, of which Mr.
Kohorst is a 50% beneficial owner through his pension plan, (ii) 700 shares
held in Mr. Kohorst's individual retirement account and (iii) 2,000 shares
held in Mr. Kohorst's wife's individual retirement account.
(10) Held by Mr. Acord's wife.
(11) Pursuant to Amendment No. 1 to the Schedule 13D jointly filed by Mercury
Real Estate Advisors LLC, Mercury Special Situations Fund LP, Malcolm F.
MacLean IV and David R. Jarvis on December 22, 2004. Each of these
reporting persons reported beneficial ownership of all or a certain portion
of the 97,998 shares acquired by the reporting persons.
OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Trust's officers and
Trustees, and persons who own more than ten percent of the Trust's common stock,
to file reports of ownership and changes in ownership with the SEC. Officers,
Trustees and greater than ten percent shareholders are required by SEC
regulation to furnish the Trust with copies of all Section 16(a) forms they
file.
Based primarily on its review of the copies of such reports received by it,
or written representations from certain reporting persons that no Form 5s were
required for those persons, the Trust believes that, during fiscal 2004, all
filing requirements applicable to its officers, Trustees, and greater than
ten-percent beneficial owners were complied with, except that David L. Johnson
did not timely file a Form 4 to report his receipt of MOLP units that are
currently convertible into 9,621 shares of the Trust's common stock in
connection with the consummation of a transaction on April 1, 2004.
Independent Auditors
The Audit Committee selected KPMG LLP to serve as the Trust's independent
auditor for the fiscal year ending December 31, 2005. KPMG LLP also served as
the Trust's independent auditor for the fiscal year ended December 31, 2004.
Representatives of KPMG LLP will be present at the Annual Meeting, will have an
opportunity to make a statement if they desire to do so, and will be available
to answer questions for the shareholders.
19
Other Business
Other than those items set forth herein, the Board of Trustees knows of no
other business to be presented for consideration at the Annual Meeting. Should
any other matters properly come before the Annual Meeting or any adjournment
thereof, it is the intention of the persons named in the proxies to vote such
proxies in accordance with their best judgment on such matters.
Shareholder Proposals for the 2006 Annual Meeting of Shareholders
Shareholders who wish to present proposals for action at the Annual Meeting
of Shareholders to be held in 2005 should submit their proposals to the Trust at
the address of the Trust set forth on the first page of this Proxy Statement.
Proposals must be received by the Trust no later than November __, 2005, for
consideration for inclusion in the next year's Proxy Statement and proxy. In
addition, proxies solicited by management may confer discretionary authority to
vote on matters which are not included in the proxy statement but which are
raised at the Annual Meeting by shareholders, unless the Trust receives written
notice at such address of such matters on or before February __, 2006.
Householding
Only one copy of the Trust's Annual Report and the Proxy Statement is being
delivered to multiple security holders sharing an address unless the Trust has
received contrary instructions from one or more of the shareholders. This
procedure is referred to as "householding." In addition, the Trust has been
notified that certain intermediaries, i.e., brokers or banks, will household
proxy materials. The Trust will promptly deliver upon written or oral request a
separate copy of the Annual Report and/or the Proxy Statement to a shareholder
at a shared address to which a single copy of the document was delivered if a
separate copy of the Annual Report and/or Proxy Statement is desired. A
shareholder should notify the Trust (i) if a shareholder wishes to receive a
separate Annual Report and/or Proxy Statement in the future or (ii) if a
shareholder is receiving multiple copies of the Annual Report and/or the Proxy
Statement, but wishes to receive a single copy of the Annual Report and/or the
Proxy Statement in the future. Requests should be made to Maxus Realty Trust,
Inc., Attention: Diana Graves-Six, 104 Armour Road, North Kansas City, Missouri
64116, (816) 303-4500. A shareholder can contact his broker or bank to make a
similar request, provided the broker or bank has determined to household proxy
materials.
20
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
A copy of the Trust's Annual Report to Shareholders is being furnished with
this Proxy Statement. The following portions of the Annual Report are
incorporated herein by reference:
(i) "Management's Discussion and Analysis," at pages [3 to 10].
(ii)"Consolidated Financial Statements" with the independent auditors
report therein, at pages [F-1 to F-13]. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Proxy Statement to the extent that a statement
contained herein or in any other subsequently filed document that is
incorporated by reference herein modifies or supersedes such earlier statement.
Any such statements modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Proxy Statement.
BY ORDER OF THE BOARD OF TRUSTEES
Christine A. Robinson
Secretary
March __, 2005
North Kansas City, Missouri
Requests for Annual Report
A copy of the Trust's Annual Report on Form 10-KSB as filed with the
Securities and Exchange Commission for fiscal 2004 will be sent to shareholders
upon request without charge. Requests should be made to Maxus Realty Trust,
Inc., Attention: Diana Graves-Six, 104 Armour Road, North Kansas City, Missouri
64116.
21
APPENDIX A
NOMINATING COMMITTEE CHARTER
22
MAXUS REALTY TRUST, INC.
NOMINATING COMMITTEE CHARTER
I. PURPOSE
The purpose of the Nominating Committee (the "Committee") of the Board of
Trustees (the "Board") of Maxus Realty Trust, Inc. (the "Trust") is to identify
and recommend individuals to the Board for nomination as members of the Board.
II. COMPOSITION
The Committee will consist solely of three or more members of the Board, each of
whom the Board has determined is "independent" under the corporate governance
listing standards of the NASDAQ Stock Market and under the Trust's bylaws.
The members of the Committee will be appointed and removed by the Board. Unless
a committee chairperson is elected by the full Board, the members of the
Committee may designate a committee chair by majority vote of the full Committee
membership. A majority of the members of the Committee will constitute a quorum.
III. MEETINGS
The Committee will meet at least once annually, or more frequently as
circumstances dictate. Minutes of each meeting will be compiled by the Trust's
Secretary or other designee of the Committee.
IV. RESPONSIBILITIES AND DUTIES
The following are the duties and responsibilities of the Committee:
1. The Committee will have the responsibility to develop and recommend
criteria for the selection of new trustees to the Board, including without
limitation diversity, age, skills, experience, time availability (including the
number of other boards he or she sits on in the context of the needs of the
Board and the Trust) and such other criteria as the Committee may determine to
be relevant at the time. The Committee will have the power to apply such
criteria in connection with the identification of individuals to be Board
members, as well as to apply the standards for independence imposed by the
Trust's listing agreement with NASDAQ and all applicable federal laws and the
underlying purpose and intent thereof in connection with such identification
process.
2. The Committee will establish policies and procedures from time to time
regarding the trustee nominating process, including consideration of trustee
candidates recommended by shareholders of the Trust, qualification criteria to
be considered and the process for identifying and evaluating candidates.
23
3. When vacancies occur or otherwise at the direction of the Board, the
Committee will actively seek individuals whom the Committee determines meet such
criteria and standards for recommendation to the Board.
4. The Committee will have the sole authority to retain and terminate any
search firm to be used to identify trustee candidates and will have sole
authority to approve the search firm's fees and other retention terms, at the
Trust's expense.
5. The Committee will recommend to the Board, on an annual basis, nominees
for election as trustees for the next annual meeting of shareholders.
6. The Committee may form and delegate authority to subcommittees or
members of the Committee when appropriate.
7. The Committee will annually review its own performance and policies and
procedures.
8. The Committee will assist management in preparing disclosures to the
Trust's annual proxy statement to shareholders and other reports with respect to
the Committee's policies and procedures and the trustee nomination process as
may be required by the rules of the Securities and Exchange Commission and
NASDAQ.
V. RESOURCES AND AUTHORITY
The Committee will have the resources and authority appropriate to discharge its
duties and responsibilities, including the authority to select, retain,
terminate and approve the fees and other retention terms of special counsel and
other experts or consultants as it deems appropriate, without seeking approval
of the Board or management. With respect to consultants or search firms used to
identify trustee candidates, this authority will be vested solely in the
Committee.
24
APPENDIX B
PROPOSED AMENDMENT TO ARTICLE THREE
TO
ARTICLES OF INCORPORATION
RESOLVED, that the Trust's Articles of Incorporation be amended by
replacing ARTICLE THREE, in its entirety, with the following:
"ARTICLE THREE
The aggregate number of shares which the corporation shall have
authority to issue is (i) Five Million shares (5,000,000) of Common Stock
all of which shall have a par value of one Dollar ($1.00) per share,
amounting in the aggregate to Five Million Dollars ($5,000,000.00) and (ii)
Five Million shares (5,000,000) of Preferred Stock, all of which shall
have a par value of one Cent ($0.01) per share, amounting in the aggregate
to Fifty Thousand Dollars ($50,000.00). The Preferred Stock, or any class
or any series thereof, shall have such powers, designations, preferences
and relative, participating, optional or other rights, if any, or the
qualifications, limitations or restrictions thereof, if any, as shall be
provided for in the resolution or resolutions adopted by the Board of
Trustees and may be made dependent upon facts ascertainable outside such
resolution or resolutions providing for the issue of such stock adopted by
the Board of Trustees, provided that the matter in which such facts shall
operate upon the voting powers, designations, preferences, rights and
qualifications, limitations or restrictions of such class or series of
stock is clearly and expressly set forth in the resolution or resolutions
providing for the issue of such stock adopted by the Board of Trustees."
25
APPENDIX C
PROPOSED AMENDMENTS TO
SECTION 4.5 AND Section 4.6
TO the
BYLAWS
RESOLVED, that the Trust's Bylaws be amended by replacing Section 4.5, in
its entirety, with the following:
"4.5 Chairman of the Board. The chairman of the board shall be the
Chief Executive Officer of the Trust, unless the president is so designated
by the Board of Trustees, and shall have general supervision, direction and
control of the business of the Trust. He shall have general powers and
duties of management, shall see that all orders and resolutions of the
Board of Trustees are carried into effect, shall execute bonds, mortgages
and other contracts requiring a seal under the seal of the Trust, except
where permitted by law to be otherwise signed and executed and except where
the signing and execution thereof shall be expressly delegated by the Board
of Trustees to some other officer or agent of the Trust, shall preside at
all meetings of the Shareholders and Trustees at which he is present and
shall perform such other duties as the Board of Trustees may prescribe."
RESOLVED, that the Trust's Bylaws be amended by replacing Section 4.6, in
its entirety, with the following:
"4.6 President. In the absence or disability of the chairman of the
board, the president shall perform the duties and exercise the powers of
the chairman of the board. In addition, the president shall have such other
powers and duties as the Board of Trustees may prescribe, including without
limitation serving as the Chief Executive Officer of the Trust, if so
designated by the Board of Trustees."
26
APPENDIX D
PRELIMINARY COPY
[FORM OF PROXY]
27
PROXY
MAXUS REALTY TRUST, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned does hereby appoint David L.. Johnson and Christine A.
Robinson and each of them, the true and lawful attorneys-in-fact and proxies of
the undersigned (acting by a majority hereunder), each with full power of
substitution, to vote all common shares of the undersigned in Maxus Realty
Trust, Inc. at the Annual Meeting of Shareholders to be held on May 10, 2005,
commencing at 10:00 A.M. in the 24th Floor Conference Room at 2345 Grand
Boulevard, Suite 2400, Kansas City, Missouri, and at any adjournment thereof,
upon all matters described in the Proxy Statement furnished herewith, subject to
any directions indicated on the reverse side of this proxy. This proxy revokes
all prior proxies given by the undersigned.
With respect to the election of Trustees (Proposal 1), where no vote is
specified or where a vote for all nominees is marked, the cumulative votes
represented by a proxy will be cast, unless contrary instructions are given, at
the discretion of the proxies named herein in order to elect as many nominees as
believed possible under the then prevailing circumstances. Unless contrary
instructions are given, if the undersigned withholds the undersigned's vote for
a nominee, all of the undersigned's cumulative votes will be distributed among
the remaining nominees at the discretion of the proxies.
(Please sign and date on the reverse side)
28
ANNUAL MEETING OF SHAREHOLDERS OF
MAXUS REALTY TRUST, INC.
May 10, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE |X|
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------- --------------------------------------------------------------------
1. Election of Trustees. 2. Amend the Trust's articles of FOR AGAINST ABSTAIN
incorporation to authorize
preferred stock. |_| |_| |_|
- --------------------------------------------------------------- ------------------------------------------- ------------------------
- --------------------------------------------------------------- ------------------------------------------- ------------------------
|_| For all nominees Nominees
- ------------------------------------- ------------------------- ------------------------------------------- ------------------------
O Danley K. Sheldon 3. Amend the Trust's bylaws to allow FOR AGAINST ABSTAIN
the Trust's President to be
designated Chief Executive Officer. |_| |_| |_|
- ------------------------------------- ------------------------- ------------------------------------------- ------------------------
|_| WITHHOLD AUTHORITY O Christopher J. Garlich
FOR ALL NOMINEES -------------------------- ------------------------------------------- -----------------------
O Monte McDowell
- ------------------------------------- -------------------------- ------------------------------------------- -----------------------
O W. Robert Kohorst
- ------------------------------------- -------------------------- ------------------------------------------- -----------------------
O Jose L. Evans 4. Adjournment of the meeting to allow FOR AGAINST ABSTAIN
or additional solicitation of proxies
if necessary to establish a quorum. |_| |_| |_|
- ------------------------------------- -------------------------- ------------------------------------------- -----------------------
|_| FOR ALL EXCEPT O Kevan D. Acord
- ------------------------------------- -------------------------- ------------------------------------------- -----------------------
(See instructions below) O David L. Johnson
- ------------------------------------- -------------------------- ------------------------------------------- -----------------------
- ------------------------------------- -------------------------- ------------------------------------------- -----------------------
(Cumulative voting applies-
See Proxy Statement)
- ------------------------------------- -------------------------- -------------------------------------------------------------------
5. In their discretion, the proxies are authorized to vote
upon such other as may be properly come before the meeting.
- ------------------------------------- -------------------------- -------------------------------------------------------------------
- ------------------------------------- -------------------------- -------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION
IS MADE, THIS PROXY WILL BE VOTED FOR EACH PROPOSAL AND THE
NOMINEES
- ------------------------------------- -------------------------- -------------------------------------------------------------------
INSTRUCTION: To withhold authority to vote for any individual
- ------------ nominee(s), mark "FOR ALL EXCEPT" and fill in the
circle next to each nominee you wish to withhold,
as shown here: o
- ---------------------------------------------------------------- -------------------------------------------------------------------
IT IS IMPORTANT THAT YOU VOTE, SIGN AND RETURN THE
ENCLOSED PROXY AS SOON AS POSSIBLE. BY DOING SO, YOU MAY SAVE THE
TRUST THE EXPENSE OF ADDITIONAL SOLICITATION.
- ---------------------------------------------------------------- -------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
- ---------------------------------------------------------------- -------------------------------------------------------------------
To change the address on your account, please check the |_|
box at the right and indicate your new address in the
address space above. Please note that changes to the
registered name(s) on the account may not be submitted
via this method.
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------- --------------------------- ---- -------------- -------------- ------------------------------- ----- --------------
Signature of Date Signature of Date:
Shareholder Shareholder
- ---------------- --------------------------- ---- -------------- -------------- ------------------------------- ----- --------------
Note: Please sign exactly as your name or names appear on this proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
29
APPENDIX E
1. Page [__] of the printed proxy statement contains a performance graph.
The information in the graph is set forth in the table immediately following the
graph.
30