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
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 Material Pursuant to 240.14a-11(c) or 240.14a-12
VININGS INVESTMENT PROPERTIES TRUST
(Name of Registrant as Specified in Its Charter)
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:
(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.
VININGS INVESTMENT PROPERTIES TRUST
3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
(770) 984-9500
June 10, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Vinings Investment Properties Trust (the "Trust") to be held on Tuesday, June
29, 1999, at 10:00 a.m., local time, at Cobb Galleria Centre, Two Galleria
Parkway, Atlanta, GA 30339 (the "Annual Meeting").
The Annual Meeting has been called for the purpose of considering and
voting upon the election of seven Trustees, each to serve for a one-year term
and until the election and qualification of his or her successor, the adoption
of certain amendments to the Trust's Second Amended and Restated Declaration of
Trust, as amended (the "Declaration of Trust"), and such other business as may
properly come before the meeting or any adjournments or postponements thereof.
The Board of Trustees has fixed the close of business on June 4, 1999 as
the record date for determining shareholders entitled to notice of and vote at
the Annual Meeting and any adjournments or postponements thereof.
The Board of Trustees of the Trust recommends that you vote "FOR" the
election of the seven nominees of the Board of Trustees as Trustees of the Trust
and "FOR" each of the amendments to the Declaration of Trust.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY CARD.
Very truly yours,
PETER D. ANZO
President and Chief Executive Officer
VININGS INVESTMENT PROPERTIES TRUST
3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
(770) 984-9500
---------------
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
To be Held on Tuesday, June 29, 1999
--------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Vinings
Investment Properties Trust (the "Trust") will be held on Tuesday, June 29,
1999, at 10:00 a.m., local time, at Cobb Galleria Centre, Two Galleria Parkway,
Atlanta, Georgia 30339 (the "Annual Meeting"), for the purpose of considering
and voting upon:
1. The election of seven Trustees, each to serve for a one-year
term and until the election and qualification of his or her successor;
2. The approval of a proposal to amend the Trust's Second Amended
and Restated Declaration of Trust, as amended (the "Declaration of
Trust"), to decrease the total number of authorized shares of
beneficial interest from unlimited to 25,000,000 and to classify all
such shares as common shares of beneficial interest or, if Proposal 3
is also approved, to decrease the total number of authorized shares of
beneficial interest from unlimited to 32,050,000 and to classify
25,000,000 of such shares as common shares of beneficial interest;
3. The approval of a proposal to amend the Declaration of Trust
to authorize a new class of 7,050,000 preferred shares of beneficial
interest which, upon the affirmative vote of two-thirds of the Board
of Trustees, may be issued in such amounts, in one or more series, and
with such designations, preferences, limitations and relative rights
for each series as the Board of Trustees shall determine;
4. The approval of a proposal to amend the Declaration of Trust
to (a) provide the Trust with a perpetual existence, (b) remove all
references and provisions relating to the Trust's being
externally-advised and the Trust's prior operations as a mortgage real
estate investment trust, (c) eliminate those provisions that prohibit
the Trust from investing in certain investments in which a Trustee or
officer of the Trust has an interest and (d) eliminate those
provisions that require the Trust to disclose certain
publicly-available financial information to shareholders on a
quarterly basis; and
5. Such other business as may properly come before the meeting or
any adjournments or postponements thereof.
Under the provisions of the Declaration of Trust, the Board of Trustees has
fixed the close of business on June 4, 1999 as the record date for the
determination of shareholders entitled to notice of and vote at the Annual
Meeting and any adjournments or postponements thereof. Only holders of record of
shares of beneficial interest, without par value, of the Trust at the close of
business on that date will be entitled to notice of and vote at the Annual
Meeting and any adjournments or postponements thereof.
In the event there are not sufficient votes with respect to the foregoing
proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned
to permit further solicitation of proxies.
By Order of the Board of Trustees,
STEPHANIE A. REED
Secretary
June 10, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU
HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
VININGS INVESTMENT PROPERTIES TRUST
3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
(770) 984-9500
-----------------------------
PROXY STATEMENT
-----------------------------
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Tuesday, June 29, 1999
This Proxy Statement and the enclosed Proxy Card are being furnished in
connection with the solicitation of proxies by the Board of Trustees of Vinings
Investment Properties Trust (the "Trust") for use at the Annual Meeting of
Shareholders of the Trust to be held on Tuesday, June 29, 1999, at 10:00 a.m.,
local time, at Cobb Galleria Centre, Two Galleria Parkway, Atlanta, Georgia
30339, and any adjournments or postponements thereof (the "Annual Meeting").
At the Annual Meeting, the shareholders of the Trust will be asked to
consider and vote upon the following matters:
1. The election of seven Trustees, each to serve for a one-year
term and until the election and qualification of his or her successor;
2. The approval of a proposal to amend the Trust's Second Amended
and Restated Declaration of Trust, as amended (the "Declaration of
Trust"), to decrease the total number of authorized shares of
beneficial interest from unlimited to 25,000,000 and to classify all
such shares as common shares of beneficial interest or, if Proposal 3
is also approved, to decrease the total number of authorized shares of
beneficial interest from unlimited to 32,050,000 and to classify
25,000,000 of such shares as common shares of beneficial interest;
3. The approval of a proposal to amend the Declaration of Trust
to authorize a new class of 7,050,000 preferred shares of beneficial
interest which, upon the affirmative vote of two-thirds of the Board
of Trustees, may be issued in such amounts, in one or more series, and
with such designations, preferences, limitations and relative rights
for each series as the Board of Trustees shall determine;
4. The approval of a proposal to amend the Declaration of Trust
to (a) provide the Trust with a perpetual existence, (b) remove all
references and provisions relating to the Trust's being
externally-advised and the Trust's prior operations as a mortgage real
estate investment trust, (c) eliminate those provisions that prohibit
the Trust from investing in certain investments in which a Trustee or
officer of the Trust has an interest and (d) eliminate those
provisions that require the Trust to disclose certain
publicly-available financial information to shareholders on a
quarterly basis; and
5. Such other business as may properly come before the meeting or
any adjournments or postponements thereof.
The Notice of Annual Meeting, Proxy Statement and Proxy Card are first
being mailed to shareholders of the Trust on or about June 10, 1999 in
connection with the solicitation of proxies for the Annual Meeting. The Board of
Trustees has fixed the close of business on June 4, 1999 as the record date for
the determination of shareholders entitled to notice of and vote at the Annual
Meeting (the "Record Date"). Only holders of record of shares of beneficial
interest, without par value, of the Trust (the "Shares") at the close of
business on the Record Date will be entitled to notice of and vote at the Annual
Meeting. As of May 18, 1999, there were 1,100,504 Shares outstanding and
entitled to vote at the Annual Meeting and 700 shareholders of record. Each
Share outstanding as of the close of business on the Record Date entitles the
holder thereof to one vote on each matter properly submitted at the Annual
Meeting. As of May 18, 1999, Trustees and officers of the Trust, all of whom
have indicated that they will vote all of their Shares of the Trust in favor of
each of the proposals, and their affiliates were owners of [__________] Shares,
representing approximately [________]% of the outstanding Shares of the Trust.
Voting
- ------
The representation in person or by proxy of at least a majority of the
outstanding Shares entitled to vote is necessary to provide a quorum at the
Annual Meeting. Each Share outstanding on the Record Date is entitled to one
vote. A quorum being present, the affirmative vote of a majority of the votes
cast at the Annual Meeting is required to elect Trustees, and the affirmative
vote of the majority of the outstanding Shares entitled to vote at the Annual
Meeting is required to approve each of Proposal 2, Proposal 3 and Proposal 4.
Shares that reflect abstentions or "broker non-votes" (i.e., shares represented
at the meeting held by brokers or nominees as to which instructions have not
been received from the beneficial owners or persons entitled to vote such shares
and the broker or nominee does not have discretionary voting power to vote such
shares) will be counted for purposes of determining whether a quorum is present
for the transaction of business at the meeting. With respect to the election of
Trustees, votes may be cast in favor of or withheld from each nominee; votes
that are withheld will be excluded entirely from the vote and will have no
effect. With respect to each of Proposal 2, Proposal 3 and Proposal 4,
abstentions and broker non-votes will have the same effect as votes against the
approval of such proposal.
The Annual Report of the Trust, including financial statements for the
fiscal year ended December 31, 1998 ("fiscal 1998"), is being mailed to
shareholders of the Trust concurrently with this Proxy Statement. The Annual
Report, however, is not a part of the proxy solicitation material.
Proxies; Revocation of Proxies
- ------------------------------
Shareholders of the Trust are requested to complete, date, sign and return
the accompanying Proxy Card in the enclosed envelope. Shares represented by
properly executed proxies received by the Trust and not revoked will be voted at
the Annual Meeting in accordance with the instructions contained therein. If
instructions are not given therein, properly executed proxies will be voted
"FOR" the election of the seven nominees for Trustees set forth in Proposal 1
and "FOR" each of Proposal 2, Proposal 3 and Proposal 4. It is not anticipated
that any matters other than those set forth in this Proxy Statement will be
presented at the Annual Meeting. If other matters are presented, proxies will be
voted in accordance with the discretion of the proxy holders.
Any properly completed proxy may be revoked at any time before it is voted
on any matter (without, however, affecting any vote taken prior to such
revocation) by giving written notice of such revocation to the Secretary of the
Trust, or by signing and duly delivering a proxy bearing a later date, or by
attending the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not, by itself, revoke a proxy.
Expenses of Solicitation
- ------------------------
All expenses of this solicitation will be borne by the Trust. Brokerage
firms, nominees, fiduciaries and other custodians have been requested to forward
proxy solicitation materials to the beneficial owners of Shares held of record
by such persons, and the Trust will reimburse such brokerage firms, nominees,
fiduciaries and other custodians for reasonable out-of-pocket expenses incurred
by them in connection therewith. In addition to solicitation of proxies by mail,
Trustees, officers and employees of the Trust, without receiving additional
compensation therefor, may solicit proxies from shareholders of the Trust by
telephone, telefax, letter, in person or by other means.
PROPOSAL 1
ELECTION OF TRUSTEES
The Board of Trustees of the Trust currently consists of seven members,
each of whom serves for a one-year term and until the election and qualification
of his or her successor.
At the Annual Meeting, seven Trustees will be elected to serve until the
2000 annual meeting of shareholders and until the election and qualification of
his or her successor. The Board of Trustees has nominated Peter D. Anzo,
Stephanie A. Reed, Phill D. Greenblatt, Henry Hirsch, Martin H. Petersen, James
D. Ross and Gilbert H. Watts, Jr., each of whom currently serves as a Trustee,
for election as Trustees. Certain information with respect to the persons
nominated by the Board of Trustees for election as Trustees is shown below under
"Information Regarding Trustees." Unless otherwise specified in the proxy, it is
the intention of the proxy holders to vote the Shares represented by each
properly executed proxy for the election as Trustees of each of the nominees.
Each of the nominees has agreed to stand for election and to serve if elected as
a Trustee. If any of the persons nominated by the Board of Trustees fails to
stand for election or is unable to accept election, however, proxies not marked
to the contrary will be voted in favor of the election of such other person as
the Board of Trustees may recommend.
Vote Required For Approval
- --------------------------
A quorum being present, the affirmative vote of a majority of the votes
cast at the Annual Meeting is necessary to elect a nominee as a Trustee of the
Trust.
The Board of Trustees of the Trust recommends that the Trust's
shareholders vote "FOR" the election of each of the seven
nominees as Trustees of the Trust.
INFORMATION REGARDING TRUSTEES
Meetings of Board of Trustees and Committees
- --------------------------------------------
During fiscal 1998, the Board of Trustees of the Trust held ten meetings.
Each Trustee who was a Trustee during fiscal 1998 attended at least 75% of the
aggregate of the total number of meetings of the Board of Trustees and meetings
held by all committees of the Board of Trustees on which such Trustee served.
The Board of Trustees has established an Audit Committee and a Compensation
Committee. Stephanie A. Reed, Gilbert H. Watts, Jr. and Martin H. Petersen were
members of the Audit Committee during fiscal 1998. The Audit Committee reviews
the financial statements of the Trust and the scope of the annual audit,
monitors the Trust's internal financial and accounting controls and recommends
to the Board of Trustees the appointment of independent certified public
accountants. The Audit Committee did not meet during fiscal 1998. James D. Ross,
Gilbert H. Watts, Jr. and Phill D. Greenblatt were members of the Compensation
Committee during fiscal 1998. The Compensation Committee reviews the Trust's
executive compensation policies and recommends the compensation levels of
executive officers of the Trust to the Board of Trustees. See "Report of the
Compensation Committee of the Board of Trustees on Executive Compensation." The
Compensation Committee met one time during fiscal 1998. The Board of Trustees
does not have a nominating committee.
Compensation of Trustees
- ------------------------
Trustees who are officers of the Trust do not receive compensation for
their services as Trustees. Trustees who are not officers of the Trust (each a
"Non-Employee Trustee") receive compensation for their services as the Board of
Trustees may from time to time determine. During fiscal 1998, the Non-Employee
Trustees did not receive an annual retainer but did receive $250 for each
regular and special meeting of the Board of Trustees attended.
In addition, the Non-Employee Trustees are eligible to participate in the
Trust's 1997 Stock Option and Incentive Plan (the "1997 Incentive Plan").
Pursuant to the 1997 Incentive Plan, in fiscal 1998, the Board of Trustees
granted to the Non-Employee Trustees stock options to purchase an aggregate of
27,000 Shares, subject to certain conditions (including, without limitation,
conditions relating to vesting). Martin H. Petersen, James D. Ross and Thomas B.
Bender (Mr. Bender served as a Trustee from January 1, 1998 through May 4, 1998,
the date of the 1998 annual meeting of shareholders) each received an option to
purchase 3,000 Shares. Phill D. Greenblatt, Henry Hirsch and Gilbert H. Watts,
Jr. each received an option to purchase 6,000 Shares. Each of these options was
granted at a per Share exercise price of $4.00 and becomes fully exercisable on
June 9, 1999, the first anniversary of the grant date.
Information Regarding Trustees
- ------------------------------
Set forth below is certain information regarding the current seven Trustees
of the Trust who are elected by the Trust's shareholders at each annual meeting
of the Trust.
------------------------------- ------------
Trustee
Name Since
------------------------------- ------------
Peter D. Anzo 1996
Stephanie A. Reed 1996
Phill D. Greenblatt 1996
Henry Hirsch 1996
Martin H. Petersen 1996
James D. Ross 1998
Gilbert H. Watts, Jr. 1996
------------------------------- ------------
PETER D. ANZO, age 45, has been Chief Executive Officer, President and
Chairman of the Board of Trustees since 1996. He is also Chief Executive Officer
and a director of The Vinings Group, Inc. and affiliates, a position he has held
since 1987. From 1990 through 1997 Mr. Anzo was Chief Executive Officer and a
director of A&P Investors, Inc. Mr. Anzo has been a delegate since 1995, on the
Legislative Committee since 1991 and is currently Chairman of the Political
Action Committee of the National Apartment Association. He has been past
Co-Chairman of the Government Affairs Committee since 1995, Co-Chairman of the
Affordable Housing Task Force and a director from 1992 until 1998 of the Atlanta
Apartment Association. He was a director of the Georgia Apartment Association
from 1993 to 1998. From 1983 until 1986, Mr. Anzo served as Vice President of
Acquisitions of First Investment Companies, where he was involved in the
management and acquisition of commercial apartment properties throughout the
United States. Mr. Anzo was Vice President, Dispositions of Balcor/American
Express from 1981 until 1983, where he was involved in the sale of apartment
communities and commercial properties in the United States. Prior to 1981, Mr.
Anzo was involved in the management, leasing, purchase and construction of real
property with The Beaumont Company and Linkletter Properties.
STEPHANIE A. REED, age 40, has been Vice President, Secretary, Treasurer
and a Trustee since 1996. Since 1991, Ms. Reed has been Vice President and a
director of The Vinings Group, Inc. and affiliates. She was also Vice President
of A&P Investors, Inc. from 1991 through 1997. From 1987 to 1991, Ms. Reed was
Vice President -- Development of The Sterling Group, Inc., a multifamily
development company located in Atlanta, Georgia where she was responsible for
all phases of development for multifamily projects. Prior to 1987, she served as
Vice President -- Finance of The Sterling Group, Inc., in the syndication and
management of multifamily projects. Prior to joining The Sterling Group, Inc.,
she was a certified public accountant for independent public accounting firms in
Atlanta, Georgia and Orlando, Florida.
PHILL D. GREENBLATT, age 53, has been a Trustee since 1996. Since 1975, Mr.
Greenblatt has been President of p.d.g. Real Estate Co., Inc., a real estate
brokerage and investment firm in multifamily, retail and industrial properties
in Colorado, Arizona and Florida. From 1971 through 1974, Mr. Greenblatt was a
commercial sales associate with Heller-Mark Realty. He also served as an
investment banking officer for the First National Bank of Denver from 1968 to
1971.
HENRY HIRSCH, age 62, has been a Trustee since 1996. Mr. Hirsch is Chairman
of the Board of Engineered Concepts, Inc., ECI Management Corporation and ECI
Realty, and is President of ECI Properties, positions which he has held for over
ten years. Mr. Hirsch has been involved in the real estate business since 1968,
specializing in multifamily apartment development. He and his related entities
currently own and/or manage over 3,500 apartment units, as well as office
buildings. The construction arm of his related entities has completed over
$250,000,000 of new construction and rehabilitation. Mr. Hirsch is a Certified
Apartment Property Supervisor with the National Apartment Association. He has
served on the Hotpoint Builders Advisory Council and National Association of
Home Builders, and has served as a director and past President of the Atlanta
Apartment Association. He has served as a Regional Vice President of the
National Apartment Association.
MARTIN H. PETERSEN, age 49, has been a Trustee since 1996. Mr. Petersen is
currently President and a director of The Hallmark Companies, Inc. and
affiliates, which are active in the ownership and management of multifamily
communities. He is also the President and a director of A&P Investors, Inc., a
position he has held since 1990. From 1987 through 1997 he was President and a
director of The Vinings Group, Inc. and affiliates. Since 1975 he has been a
licensed real estate broker in the State of Georgia, as well as a member of the
Institute of Real Estate Management. From 1984 through 1987 Mr. Petersen was
Vice President of Southeast United States Plaza Equities Management and Plaza
Pacific Equities, Inc., where he supervised the acquisition, disposition and
management of 5,700 apartment units located throughout the southeastern United
States. Mr. Petersen served as a Branch Manager of GK Properties of Atlanta,
Georgia, from 1979 to 1984, where he was responsible for overseeing the
operations of its southeastern United States offices, which included the
acquisition and management of 5,500 garden style apartment units. Prior to
joining GK Properties, from 1975 through 1979, he served as Vice President of
Stonehenge Properties and Stonehenge Realty Corp., where he oversaw the
management of the commercial office division and performed various other
functions, including the initiation of numerous feasibility, marketing and other
consulting studies for real estate investment trusts, financial institutions,
savings and loans and other owners of distressed and foreclosed properties. From
1971 to 1974, Mr. Petersen was a credit analyst for Dun & Bradstreet in its
Business Trades Division.
JAMES D. ROSS, age 49, has been a Trustee since 1998. Mr. Ross is currently
associated with Financial & Investment Management Group, a registered investment
advisor. From 1995 to early 1998, Mr. Ross was Executive Vice President of Aegon
U.S.A. Investment Management, an international insurance and investment concern.
At Aegon, Mr. Ross was responsible for interest rate risk management including
all commercial and residential mortgage backed securities holdings. From 1991 to
1995, he served as Chief Executive Officer of Southeastern Financial Services, a
registered investment advisor and an affiliated company of Kentucky Home Mutual.
Mr. Ross also served on the Board of Directors of Kentucky Home Mutual. From
1985 to 1991, Mr. Ross served as Treasurer and Chief Investment Officer for
Shenandoah Life Insurance Company. From 1975 to 1985, Mr. Ross was employed by
Maccabees Mutual Life Insurance Company where he served as an investment officer
and portfolio manager. Mr. Ross is a member of the State Bars of Kentucky and
Michigan.
GILBERT H. WATTS, JR., age 50, has been a Trustee since 1996. Mr. Watts is
Managing Partner of Watts Agent, L.P., a position he has held since 1971. Watts
Agent, L.P. manages various real estate investments including residential,
commercial and industrial properties. Mr. Watts is the Chairman of Radio Center
Dalton, Inc., a position he has held since 1985. Mr. Watts also is a Director of
The Community Group, Inc., a five bank holding company, and a Director of
various family businesses.
INFORMATION REGARDING EXECUTIVE OFFICERS
Listed below are the names of the executive officers of the Trust. The
names and ages of all executive officers of the Trust and principal occupation
and business experience during at least the last five years is discussed above
in "Information Regarding Trustees."
------------------- ----------------------------------------
Name Position
------------------- ----------------------------------------
Peter D. Anzo President, Chief Executive Officer
and Chairman of the Board of Trustees
Stephanie A. Reed Vice President, Secretary and Treasurer
The business experience of Mr. Anzo and Ms. Reed has been summarized above
under "Information Regarding Trustees."
EXECUTIVE COMPENSATION
The following sections of this Proxy Statement set forth and discuss the
compensation paid or awarded during the last three years to the Trust's Chief
Executive Officer and the four most highly compensated executive officers who
earned in excess of $100,000 during fiscal 1998.
Summary Compensation Table
- -------------------------
The following table shows for the fiscal years ended December 31, 1996,
1997 and 1998 the annual compensation paid by the Trust to the Chief Executive
Officer and the four most highly compensated executive officers who earned in
excess of $100,000 during fiscal year 1998.
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (11) (i)
Securities
Other Annual Restricted Underlying LTIP All Other
Salary Bonus Compensation Stock Warrants/ Payouts Compensation
Award(s) Options
Year ($) ($) ($) ($) (#) ($) ($)
--------------------------------------------------------------------------------------------
Peter D. Anzo (1) 1998 -- 40,000(2) -- -- 35,000(3) -- --
President, Chief 1997 -- -- -- -- 5,000(3) -- --
Executive Officer 1996 -- -- -- -- -- -- --
and Chairman of
the Board
<FN>
(1) Mr. Anzo became President, Chief Executive Officer and Chairman of the
Board of Trustees on February 29, 1996.
Mr. Anzo did not receive salary compensation from the Trust for services
rendered in his capacity as President, Chief Executive Officer and Chairman
of the Board of Trustees of the Trust during fiscal 1998 or during the
fiscal years ended December 31, 1997 and 1996. See "Report of the
Compensation Committee of the Board of Trustees on Executive Compensation
-Compensation Policies for Executive Officers" below.
(2) Represents a bonus in the form of 10,000 Shares which had a market value as
of July 1, 1998, the date of the grant, of $40,000.
(3) Represents stock options granted pursuant to the Trust's 1997 Stock Option
and Incentive Plan.
</FN>
Option Grants in Last Fiscal Year
- ---------------------------------
The following table sets forth each grant of stock options during fiscal
1998 to the Chief Executive Officer and each other executive officer named in
the Summary Compensation Table. No stock appreciation rights ("SARs") have been
granted.
Potential
Realizable Value
at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term (3)
-------------------- -----------------
(a) (b) (c) (d) (e) (f) (g)
Number of
Securities % of Total
Underlying Options/SARs
Options Granted to Exercise or
Granted Employees in Base Price Expiration
(#)(1) Fiscal Year(2) ($/Sh) Date 5%($) 10%($)
------ -------------- ------ ---- ----- ------
Peter D. Anzo 35,000 82% $4.00 6/10/08 $88,045 $223,124
<FN>
(1) All options were granted pursuant to the Trust's 1997 Stock Option and
Incentive Plan.
(2) Percentages are based on a total of 42,500 Shares underlying all options
granted to Officers of the Trust in fiscal 1998.
(3) Represents the value of the options granted at the end of the option terms
if the price of the Trust's Shares were to appreciate annually by 5% and
10% respectively. There is no assurance that the stock price will
appreciate at the rates shown in the table. If the stock price appreciates,
the value of Shares held by all shareholders will increase.
(4) Such options vest and become fully exercisable on the first anniversary of
the date of the grant or June 9, 1999.
</FN>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Values
- --------------------------------------------------------------------------
The following table sets forth the Shares acquired and the value
realized upon exercise of stock options during fiscal 1998 by the Chief
Executive Officer and each other executive officer named in the Summary
Compensation Table and certain formation concerning the number and value of
unexercised stock options. There are currently no outstanding SARs.
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/
Shares Acquired Value Options/Warrants at FY-End(#) Warrants at FY-End (#)(1)
Name on Exercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------------- -------- ------------ ------------- ----------- -------------
Peter D. Anzo -- -- 5,000 35,000 -- --
<FN>
(1) Equal to the market value of Shares covered by in-the-money options on
December 31, 1998, less the aggregate option exercise price. Options are
in-the-money if the market value of the Shares covered thereby is greater
than the exercise price of the options.
</FN>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
OF TRUSTEES ON EXECUTIVE COMPENSATION
The members of the Compensation Committee of the Board of Trustees of the
Trust, whose names are set forth below, have prepared the following report on
the Trust's executive compensation policies and philosophy for fiscal 1998.
General
- -------
The Compensation Committee consists of Mr. Ross, Mr. Watts and Mr.
Greenblatt, each of whom is a Non-Employee Trustee. The Compensation Committee
is generally responsible for developing the Trust's executive and management
compensation policies, including awards of equity-based compensation.
Compensation Policy Review
- --------------------------
During fiscal 1998, the Compensation Committee, together with the Board of
Trustees, did not complete its review of the compensation policies with respect
to executive compensation as the officers were not paid by the Trust in fiscal
1998. While it is still anticipated that the officers will become employees
during fiscal 1999, it has not been determined when the officers will be paid by
the Trust but the Compensation Committee will complete its review and establish
the compensation of the executives of the Trust prior to such time.
Compensation of Executive Officers
- ----------------------------------
Base Salary and Cash Bonuses
============================
Officers of the Trust historically have not received compensation for their
services provided to the Trust. Until February 29, 1996, the date upon which an
affiliate of the Trust acquired approximately 73.3% of the outstanding Shares of
the Trust pursuant to a tender offer (the "Tender Offer"), the Trust was an
externally-advised real estate investment trust (a "REIT"), and accordingly, the
Trust had no employees and no compensation committee. Upon the consummation of
the Tender Offer, the relationship with the Trust's advisor was terminated and
the Trust became self-administered and established a compensation committee. As
a result, the Trustees currently anticipate that officers of the Trust may serve
as employees and may be compensated as such for services rendered to the Trust.
During Fiscal 1998, the officers of the Trust did not receive cash
compensation from the Trust for their services as officers, but did receive
bonuses in the form of Shares and options to purchase Shares. See "Equity and
Equity-Based Incentives" below. While a majority of their time was spent
handling Trust affairs, the officers were also officers of The Vinings Group,
Inc. ("The Vinings Group"), a privately held real estate company, from which
they received compensation and benefits. The Trust did not reimburse The Vinings
Group for any of the officers' salaries or benefits provided to them by The
Vinings Group. Should any officers of the Trust become employees and be directly
compensated by the Trust for such services, the Compensation Committee will
recommend to the Board of Trustees the annual salary, any salary adjustments and
any other benefits for executive officers of the Trust, all of which will be
targeted according to the salaries of executives holding similar offices and
having similar responsibilities within the Trust's industry segment. The
Compensation Committee may also consider factors such as industry experience and
executive retention.
Equity and Equity-Based Incentives
==================================
Equity and equity-based incentive awards are designed to attract and retain
executives who can make significant contributions to the Trust's success, reward
executives for such significant contributions and give executives a longer-term
incentive to increase shareholder value. The size and frequency of equity and
equity-based incentive awards are recommended to the Board of Trustees by the
Compensation Committee, taking into account individual performance and
responsibilities, but without any specific performance measures. The
Compensation Committee may also recommend stock options for executive retention
purposes, taking into account, among other things, general industry practice. To
ensure that high levels of performance occur over the long-term, stock options
granted to executives typically vest over a period of time. All outstanding
options have been granted with an exercise price equal to or in excess of 100%
of the fair market value of the Trust's Shares on the grant date.
The 1997 Incentive Plan is the principal vehicle by which the Trust intends
to achieve the executive compensation policy objective of providing long-term
incentives to executive officers that will more closely align the interests of
such executives with those of the Trust's shareholders. Pursuant to the 1997
Incentive Plan, the Compensation Committee may recommend a variety of long-term
incentive awards based on the Shares of the Trust, including stock options (both
incentive options and non-qualified options), SARs, restricted stock,
unrestricted stock, performance shares and dividend equivalent rights.
In fiscal 1998, Peter D. Anzo and Stephanie A. Reed were each granted an
option to purchase 35,000 Shares and 7,500 Shares, respectively, at a per Share
exercise price of $4.00. Each of these options vests and becomes fully
exercisable one year from the grant date on June 9, 1999. Additionally, Peter D.
Anzo and Stephanie A. Reed were each awarded a bonus in the form of 10,000
Shares and 2,500 Shares, respectively, during fiscal 1998. The Board of Trustees
granted these awards to Mr. Anzo and Ms. Reed as compensation for services
rendered to the Trust as officers as they did not receive cash compensation from
the Trust for their services as officers. Any value received by an executive
officer from a stock option and any increases in the value of stock received as
a bonus depends entirely on increases in the price of the Trust's Shares.
Compensation of the Chief Executive Officer
- -------------------------------------------
Mr. Peter D. Anzo
=================
Mr. Anzo currently does not receive cash compensation for services he
provides to the Trust as its Chief Executive Officer. See "Compensation Policies
for Executive Officers" above. In order to encourage outstanding performance and
as an incentive to increase Trust performance and Share value, in fiscal 1998,
the Board of Trustees awarded Mr. Anzo an option to purchase 35,000 Shares, at a
per Share exercise price of $4.00, which option vests and becomes fully
exercisable on the first anniversary of the grant date, or on June 9, 1999.
Additionally, Mr. Anzo was awarded a bonus in the form of 10,000 Shares during
fiscal 1998.
Federal Tax Regulations Applicable to Executive Compensation
- ------------------------------------------------------------
As a result of Section 162(m) of the Internal Revenue Code (the "Code"),
the Trust's deduction of executive compensation may be limited to the extent
that a "covered employee" (i.e., the chief executive officer or one of the four
highest compensated officers who is employed on the last day of the Trust's
taxable year) receives compensation in excess of $1,000,000 in such taxable year
of the Trust (other than performance-based compensation that otherwise meets the
requirements of Section 162(m) of the Code). The Trust intends to take
appropriate action to comply with such regulations, if applicable, in the
future.
James D. Ross, Chairman Gilbert H. Watts, Jr. Phill D. Greenblatt
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- -----------------------------------------------------------
Mr. Anzo, the President, Chief Executive Officer and Chairman of the Board
of Trustees of the Trust, and Ms. Reed, Vice President, Secretary and Treasurer
of the Trust, will make general recommendations to and review with the
Compensation Committee the salary increases and bonus compensation of executives
and management other than themselves.
On February 4, 1999, Mr. Watts purchased the Trust's line of credit and the
Trust paid interest to Mr. Watts monthly at the rate of 8.50% from such date
through April 27, 1999, at which time the Trust obtained a new line of credit
which expires April 27, 2000. The entire proceeds from the new line of credit
were used to repay the outstanding indebtedness to Mr. Watts. For a detailed
discussion, see "Certain Relationships and Related Transactions" below.
SHAREHOLDER RETURN PERFORMANCE GRAPH
- ------------------------------------
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Trust's Shares with the
cumulative total return of companies on the Standard & Poor's (S&P) 500 Stock
Index, the National Association of Real Estate Investment Trusts' ("NAREIT")
Equity REIT Total Return Index (the "Equity REIT Index") and the NAREIT Mortgage
REIT Total Return Index. The returns are based on the market price of the Shares
and assume the reinvestment of dividends. The calculation of total cumulative
return assumes a $100 investment in the Shares on December 31, 1993. The
comparisons in this table are historical and are not intended to forecast or be
indicative of possible future performance of the Trust's Shares.
Subsequent to the consummation of the Tender Offer in February 1996 and
consistent with its growth and expansion strategy, management of the Trust has
caused the Trust to expand into the multifamily property markets, a line of
business which is covered by the Equity REIT Index. As a result of the change in
the line of business of the Trust, the Trustees believe that, for periods
subsequent to the Tender Offer, it is no longer appropriate to compare the
performance of the Trust's Shares to companies on the Mortgage REIT Index.
Accordingly, the performance of the Trust's Shares has been compared to both the
Mortgage REIT Index and the Equity REIT Index assuming a $100 investment on
December 31, 1993.
[GRAPH]
- ------------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------
Vinings Investment Properties Trust 100 134 142 236 236 242
NAREIT Equity Index 100 103 119 161 193 160
NAREIT Mortgage Index 100 76 124 187 194 137
S&P 500 Index 100 101 139 171 228 294
PROPOSALS TO AMEND
THE DECLARATION OF TRUST
The Board of Directors has approved and recommends that shareholders of the
Trust approve the amendments to the Declaration of Trust described in Proposal
2, Proposal 3 and Proposal 4. If any of Proposal 2, Proposal 3 or Proposal 4 is
approved by the shareholders of the Trust, the Trustees will take such action as
may be deemed necessary or desirable to effect such action, including the
execution and filing of a Third Amended and Restated Declaration of Trust which
will reflect the amendments contained in each of the approved proposals. The
following description of the terms of the proposed amendments does not purport
to be complete and is qualified in its entirety by reference to the full text of
the proposed Third Amended and Restated Declaration of Trust, which is attached
hereto as Exhibit A to this Proxy Statement. The current Declaration of Trust is
attached hereto as Exhibit B to this Proxy Statement. The Board of Trustees
urges shareholders to read carefully the following description and discussion of
the amendments and Exhibits A and B before voting on the proposals.
PROPOSAL 2
PROPOSAL TO DECREASE AUTHORIZED SHARES OF BENEFICIAL INTEREST AND
CLASSIFY SHARES AS COMMON SHARES OF BENEFICIAL INTEREST
Proposal 2 is a proposal to amend the Declaration of Trust to decrease the
total number of authorized shares of beneficial interest ("Shares") from
unlimited to 25,000,000 and to classify all such Shares as common shares of
beneficial interest ("Common Shares") or, if Proposal 3 is also approved, to
decrease the total number of authorized Shares from unlimited to 32,050,000 and
to classify 25,000,000 of such Shares as Common Shares, with the remaining
7,050,000 Shares being classified as preferred shares of beneficial interest
("Preferred Shares").
The Declaration of Trust currently authorizes the Board of Trustees to
issue an unlimited number of Shares without requiring the Board of Trustees to
seek shareholder approval for any specific issuance. If Proposal 2 is approved
by the shareholders of the Trust, the Board of Trustees would be required to
obtain shareholder approval for any issuance of Shares in excess of 25,000,000
and all such Shares would be classified as Common Shares. If, in addition to
approving Proposal 2, the shareholders of the Trust also approve Proposal 3, the
Board of Trustees would be required to obtain shareholder approval for any
issuance of Shares in excess of 32,050,000 and 25,000,000 of such Shares would
be classified as Common Shares and 7,050,000 Shares would be classified as
Preferred Shares. As of May 18, 1999, there were 1,100,504 Shares issued and
outstanding. In addition, as of May 18, 1999, 134,305 Shares were reserved for
issuance under the Trust's 1997 Stock Option and Incentive Plan.
The Board of Trustees believes that it is in the best interests of the
shareholders and the Trust to give shareholders the right to control issuances
of Shares by the Board of Trustees in excess of a certain number of Shares by
requiring that the shareholders approve any such issuances, rather than allowing
the Board of Trustees to unilaterally issue an unlimited number of Shares. The
Board of Trustees believes that following the approval of Proposal 2 by the
shareholders of the Trust (whether or not Proposal 3 is also approved by the
shareholders of the Trust), there will be sufficient authorized but unissued
Common Shares to provide the Trust with the flexibility it might need to issue
Common Shares in connection with possible future financings, stock dividends or
distributions, acquisitions or other proper purposes which may be identified by
the Board of Trustees in the future. The Board of Trustees currently has no
negotiations, understandings, agreements or arrangements concerning the issuance
of Common Shares.
VOTE REQUIRED FOR APPROVAL
- --------------------------
A quorum being present, the affirmative vote of the holders of a majority
of the outstanding Shares entitled to vote thereon is required to approve
Proposal 2.
The Board of Trustees recommends a vote FOR
Proposal 2.
PROPOSAL 3
AUTHORIZE A NEW CLASS OF PREFERRED SHARES OF BENEFICIAL INTEREST
Proposal 3 is a proposal to amend the Declaration of Trust to authorize a
new class of 7,050,000 Preferred Shares which, upon the affirmative vote of
two-thirds of the Board of Trustees, may be issued in such amounts, in one or
more series, and with such designations, preferences, limitations and relative
rights for each series as the Board of Trustees shall determine.
The purpose of this amendment is to provide the Board of Trustees added
flexibility by having Preferred Shares available for issuance in connection with
possible future transactions, such as financings, strategic alliances, corporate
mergers, acquisitions and other uses not presently determinable and as may be
deemed to be feasible and in the best interests of the Trust. The Preferred
Shares will have such designations, preferences, conversion rights, cumulative,
relative, participating, optional or other rights, including voting rights,
qualifications, limitations or restrictions thereof as are determined by the
Board of Trustees in its sole discretion, without further authorization by the
Trust's shareholders. By not specifying the rights of the additional Preferred
Shares in the Declaration of Trust and by authorizing the Board of Trustees to
determine such rights by resolution, the Board of Trustees will retain maximum
flexibility for the purposes described above.
It is not possible to determine the actual effect of the Preferred Shares
on the rights of the shareholders of the Trust until the Board of Trustees
determines the rights of the holders of a series of the Preferred Shares.
However, such effects might include: (i) restrictions on the payment of
dividends to holders of Shares or Common Shares, as the case may be; (ii)
dilution of voting power to the extent that the holders of Preferred Shares are
given voting rights; (iii) dilution of the equity interests and voting power if
the Preferred Shares are convertible into Shares or Common Shares, as the case
may be; and (iv) restrictions upon any distribution of assets to the holders of
Shares or Common Shares, as the case may be, upon liquidation or dissolution and
until the satisfaction of any liquidation preference granted to the holders of
Preferred Shares.
The Board of Trustees will make the determination to issue shares of
Preferred Shares based upon its judgment as to the best interests of the
shareholders and the Trust. Although the Board of Trustees has no present
intention of doing so, it could issue shares of Preferred Shares (within the
limits imposed by applicable law) that could, depending on the terms of such
series, make more difficult or discourage an attempt to obtain control of the
Trust by means of a merger, tender offer, proxy contest or other means. When in
the judgment of the Board of Trustees such action would be in the best interests
of the shareholders and the Trust, the issuance of Preferred Shares could be
used to create voting or other impediments or to discourage persons seeking to
gain control of the Trust, for example, by the sale of Preferred Shares to
purchasers favorable to the Board of Trustees. In addition, the Board of
Trustees could authorize holders of a series of Preferred Shares to vote either
separately as a class or with the holders of Shares or Common Shares, as the
case may be, on any merger, sale or exchange of assets by the Trust or any other
extraordinary corporate transaction. The existence of the additional authorized
Preferred Shares could have the effect of discouraging unsolicited takeover
attempts. The issuance of new Preferred Shares could also be used to dilute the
capital stock ownership of a person or entity seeking to obtain control of the
Trust should the Board of Trustees consider the action of such entity or person
not to be in the best interests of the shareholders and the Trust. The Board of
Trustees currently has no negotiations, understandings, agreements or
arrangements concerning the issuance of Preferred Shares.
Vote Required For Approval
- --------------------------
A quorum being present, the affirmative vote of the holders of a majority
of the outstanding Shares entitled to vote thereon is required to approve
Proposal 3.
The Board of Trustees recommends a vote FOR
Proposal 3.
PROPOSAL 4
Proposal 4 is a proposal to amend the Declaration of Trust to (a) provide
the Trust with a perpetual existence, (b) remove all references and provisions
relating to the Trust's being externally-advised and the Trust's prior
operations as a mortgage real estate investment trust, (c) eliminate those
provisions that prohibit the Trust from investing in certain investments in
which a Trustee or officer of the Trust has an interest and (d) eliminate those
provisions that require the Trust to disclose certain publicly-available
financial information to shareholders on a quarterly basis.
Perpetual Existence
- -------------------
The Trustees have adopted a resolution approving, and recommending to the
Trust's shareholders for their approval, an amendment to the Declaration of
Trust to provide the Trust with a perpetual life, unless the Trust is earlier
terminated by the affirmative vote of the holders of at least a majority of the
outstanding Shares.
Prior the February 1996, the Trust (then known as Mellon Participating
Mortgage Trust, Commercial Properties Series 85/10) was a REIT, the purpose of
which was to invest in participating, shared appreciation, convertible and
fixed-rate mortgages secured by office, industrial and retail facilities located
throughout the United States (a "Mortgage REIT") and its original intent was to
terminate within approximately ten years, but in no event later than twenty
years. The Trustees were in the process of the orderly liquidation of assets and
the distribution of proceeds when the Trust entered into an agreement on
December 21, 1995 with an affiliate of the current management of the Trust to
commence a cash tender offer to acquire a minimum of a majority and a maximum of
85% of the outstanding Shares of the Trust (the "Tender Offer"). The purpose of
the Tender Offer was for the purchaser to acquire control of the Trust and
refocus its investments from mortgages to equity investments. Upon consummation
of the Tender Offer, management of the Trust caused the Trust to cease being a
Mortgage REIT and, consistent with the Trust's growth and expansion strategy,
the Trust has begun to rebuild its assets by expanding into the multifamily
markets. Therefore the original intent to terminate after approximately ten
years but in no event later than twenty years is no longer appropriate and is a
hindrance in furthering the Trust's growth and expansion strategy.
Removal of References to External Advisor and Mortgage REIT
- -----------------------------------------------------------
The Trustees have adopted a resolution approving, and recommending to the
Trust's shareholders for their approval, an
amendment to the Declaration of Trust that removes all references and provisions
relating to (i) the Trust being externally-advised and (ii) the Trust's prior
operation as a Mortgage REIT in the Declaration of Trust.
As described above, since the consummation of the Tender Offer, the Trust
has not been operated as a Mortgage REIT, but rather has expanded into the
multifamily property markets. Accordingly, references and provisions in the
Declaration of Trust relating to the Trust's prior operations as a Mortgage REIT
are inappropriate and should, therefore, be removed.
Furthermore, prior to the Tender Offer, the Trust was an externally-advised
REIT for which it paid advisory fees to an unrelated third party (the
"Advisor"). Upon the consummation of the Tender Offer, however, the relationship
with the Advisor was terminated and the Trust became self-administered.
Accordingly, references and provisions in the Declaration of Trust relating to
an external advisor are inappropriate and should, therefore, be removed.
Interested Transactions
- -----------------------
The Trustees have adopted a resolution approving, and recommending to the
Trust's shareholders for their approval, an amendment to the Declaration of
Trust that eliminates the prohibition on the Trust's ability to invest, directly
or indirectly in an investment in (a) real property, (b) any indebtedness or
obligation that is secured or collateralized by an interest in real property or
(c) an entity, in which any Trustee is an investor, creditor or owner.
Since the consummation of the Tender Offer, management's growth and
expansion strategy has been to rebuild the Trust's assets by acquiring
multifamily properties that meet certain investment criteria. Execution of this
strategy may include the potential acquisition of certain properties within the
existing multifamily property portfolios of entities affiliated with management
of the Trust as well as the acquisition of properties from unaffiliated third
parties. In addition, it has been management's intent to eventually become a
self-managed REIT, through the purchase, merger or other acquisition of the
privately held management company affiliated with the officers of the Trust.
The existing Declaration of Trust adequately protects the shareholders of
the Trust by requiring that any transaction with an affiliate of the Trust
receive the approval of a majority of Trustees that do not have any interest in
such transaction only after a determination has been made that (a) the
transaction is fair and reasonable to the Trust and its shareholders and (b) the
terms of such transaction are at least as favorable as the terms of any
comparable transactions made on an arm's-length basis. The Board of Trustees
believes that the Declaration of Trust currently provides the shareholders of
the Trust with adequate protection and that it is in the best interests of the
Trust and its shareholders to provide the Trust with the ability to invest,
directly or indirectly, in an investment in which a Trustee or officer (or an
affiliated person) has an interest so that the Trust may more effectively pursue
its growth and expansion strategy.
Elimination of Reporting Requirements
- -------------------------------------
The Trustees have adopted a resolution approving, and recommending to the
Trust's shareholders for their approval, an amendment to the Declaration of
Trust to remove certain reporting requirements, which require the Trust to
disclose to each shareholder, on a quarterly basis, the costs of raising capital
and, as applicable, the source of all dividends and distributions.
The Trust is required to report through its filings with the Securities and
Exchange Commission all material transactions that have occurred, including the
costs of raising capital and the source of all dividends and distributions of
shareholders. This information is made public and is readily available from a
number of sources including, at any time, by request from the Trust. In
addition, Internal Revenue Code requirements dictate that all dividend and
distribution information be reported timely to shareholders. The Trustees
believe that the requirements in the Declaration of Trust could be interpreted
to mean that additional and costly reporting could be required, in addition to
the regulatory requirements that already exist, and that the removal of these
requirements is in the best interests of the Trust and its shareholders because
such action will lessen the administrative burdens and additional costs that
such reporting requirements could place on the Trust.
Vote Required For Approval
- --------------------------
A quorum being present, the affirmative vote of the holders of a majority
of the outstanding Shares entitled to vote thereon is required to approve
Proposal 4.
The Board of Trustees recommends a vote FOR
Proposal 4.
PRINCIPAL AND MANAGEMENT SHAREHOLDERS
The following table sets forth, to the best knowledge and belief of the
Trust, certain information regarding the beneficial ownership of the Trust's
Shares as of May 18, 1999 by (i) each person known by the Trust to be the
beneficial owner of more than 5% of the outstanding Shares, (ii) each of the
Trustees, (iii) each of the executive officers of the Trust and (iv) all of the
Trust's executive officers and Trustees as a group.
Shares
Trustees, Executive Officers Beneficially Percent of
and 5% Shareholders Owned (1) Class (2)
------------------- --------- ---------
Financial & Investment Management Group, Ltd.................. 310,758(3) 28.24%
Paul H. Sutherland, CFP, President
417 St. Joseph Street
P.O. Box 40
Suttons Bay, MI 49682
Clifford K. Watts............................................. 90,000(4) 8.18%
6565 Red Hill Road
Boulder, CO 80302
Peter D. Anzo................................................. 138,312(5) 12.13%
Stephanie A. Reed............................................. 25,018(6) 2.25%
Phill D. Greenblatt........................................... 32,505(7) 2.93%
Henry Hirsch.................................................. 68,512(8) 6.17%
Martin H. Petersen............................................ 96,785(9) 8.73%
James D. Ross................................................. 4,000(10) *
Gilbert H. Watts, Jr.......................................... 11,855(11) 1.06%
----------
All Trustees and officers as a group (7 persons) 376,987(12) 31.69%
<FN>
------------------
* Less than 1%
(1) Beneficial share ownership is determined pursuant to Rule 13d-3 under
the Securities Exchange Act of 1934, as amended. Accordingly, a
beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares the power to vote such
security or the power to dispose of such security. The amounts set
forth above as beneficially owned include Shares owned, if any, by
spouses and relatives living in the same home as to which beneficial
ownership may be disclaimed.
(2) Percentages are calculated on the basis of 1,100,504 Shares
outstanding as of May 18, 1999, together with applicable options to
purchase Shares of each shareholder.
(3) Based on an Amended Schedule 13D filed with the Securities and
Exchange Commission on or about April 20, 1999, Financial & Investment
Management Group, Ltd. ("FIMG") and Paul H. Sutherland, CFP,
President, have shared dispositive and voting power with respect to
all such Shares.
(4) Based on a Schedule 13D filed with the Securities and Exchange
Commission on March 2, 1998.
(5) Includes 40,000 Shares that Mr. Anzo may acquire upon the exercise of
options within 60 days of May 18, 1999. Amounts reported herein do not
include 24,785 Shares beneficially owned by ANTS, Inc., ("ANTS"),
which Mr. Anzo may be deemed to beneficially own by virtue of his
being a director, officer and minority shareholder of ANTS. Mr. Anzo
expressly disclaims beneficial ownership of all such Shares and the
filing of this report shall not be deemed an admission that Mr. Anzo
is the beneficial owner of such Shares.
(6) Includes 12,500 Shares that Ms. Reed may acquire upon the exercise of
options within 60 days of May 18, 1999.
(7) Includes 8,500 Shares that Mr. Greenblatt may acquire upon the
exercise of options within 60 days of May 18, 1999.
(8) Includes 8,500 Shares that Mr. Hirsch may acquire upon the exercise of
options within 60 days of May 18, 1999.
(9) Includes 8,000 Shares that Mr. Petersen may acquire upon the exercise
of options within 60 days of May 18, 1999. Amounts reported herein do
not include 24,785 Shares beneficially owned by A&P Investors, Inc.,
("A&P"), which Mr. Petersen maybe deemed to beneficially own by virtue
of his being a director, officer and minority shareholder of A&P. Mr.
Petersen expressly disclaims beneficial ownership of all such Shares
and the filing of this report shall not be deemed an admission that
Mr. Petersen is the beneficial owner of such Shares.
(10) Includes 3,000 Shares that Mr. Ross may acquire upon the exercise of
options within 60 days of May 18, 1999.
(11) Includes 8,500 Shares that Mr. Watts may acquire upon the exercise of
options within 60 days of May 18, 1999. Mr. Watts may be deemed to
beneficially own 3,355 Shares by virtue of his position as Managing
Partner of Watts Agent, L.P. ("Watts LP"). Mr. Watts and Watts LP have
shared dispositive and voting power with respect to all such Shares.
(12) Includes 89,000 Shares that may be acquired by such persons upon the
exercise of options within 60 days of May 18, 1999.
</FN>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Trust entered into management agreements with Vinings Properties, Inc.,
an affiliate of Mr. Anzo and Ms. Reed, to provide property management services
for The Thicket Apartments ("Thicket") and Windrush Apartments ("Windrush") for
a fee equal to a percentage of gross revenues plus a fee for data processing. A
total of $215,392 in management and data processing fees was incurred by the
Trust during 1998. On January 1, 1999, the Trust entered into new management
agreements with VIP Management, LLC, also an affiliate of Mr. Anzo and Ms. Reed,
to provide management services for Thicket, Windrush and Peachtree Business
Center ("Peachtree") on substantially the same terms as the previous agreements.
In addition, as a commitment to the rebuilding of the Trust, prior to 1998
The Vinings Group, Inc., an affiliate of Mr. Anzo and Ms. Reed and the parent
corporation of Vinings Properties, Inc., (collectively, "The Vinings Group"),
provided numerous services at no cost to the Trust relating to administration,
acquisition, and capital and asset advisory services. Certain direct costs paid
on the Trust's behalf were reimbursed to The Vinings Group and beginning January
1, 1998, The Vinings Group charged the Trust for certain overhead charges.
However, while the Trust has been in its initial growth stages, The Vinings
Group has been committed to providing as many services as possible to promote
the Trust's growth. A total of $45,000 was paid for 1998 to The Vinings Group
for shareholder services provided for the sole benefit of the Trust by one of
The Vinings Group's employees. In addition, a total of $105,000 was incurred for
the year ended December 31, 1998 to The Vinings Group for the reimbursement of
overhead expenses, which includes salaries and benefits for other employees
hired by The Vinings Group for the benefit of the Trust.
On June 28, 1998 the Trust renewed its line of credit in the amount of
$2,000,000 for six months, which expired on December 28, 1998. The Trust did not
renew the line of credit at that time and the bank informally extended the due
date to February 4, 1999 with interest continuing to be paid monthly until the
Trust secured alternative financing. On February 4, 1999 Mr. Watts, an
independent Trustee of the Trust, purchased the line of credit from the bank and
the Trust paid interest to Mr. Watts monthly at the annual rate of 8.50% from
such date through April 27, 1999. At that time, the Trust obtained a new line of
credit, the entire proceeds of which were used to repay the outstanding
indebtedness to Mr. Watts.
The Trust believes that all of the above relationships and transactions are
fair and reasonable and are on terms at least as favorable to the Trust as those
which might have been obtained with unrelated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Trust's officers, Trustees and beneficial owners of more than 10% of
the Trust's Shares are required under Section 16(a) of the Exchange Act to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Copies of those reports must also be furnished to the Trust. Based
solely on a review of the copies of reports and amendments thereto furnished to
the Trust and written representations that no other reports were required, the
Trust believes that during its 1998 fiscal year, no person who was a Trustee,
officer or greater than 10% beneficial owner of the Trust's Shares failed to
file on a timely basis any report required by Section 16(a), except in the case
of a certain report of Stephanie A. Reed and certain amendments to reports of
Peter D. Anzo, Stephanie A. Reed, Martin H. Petersen, Gilbert H. Watts, Jr.,
Phill D. Greenblatt, Henry Hirsch and Thomas B. Bender.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Shareholder proposals intended to be presented at the 2000 annual meeting
of shareholders of the Trust must be received by the Trust on or before February
10, 2000 in order to be considered for inclusion in the Trust's proxy statement
for such meeting. Such a proposal must also comply with the requirements as to
form and substance established by the SEC in order to be included in the proxy
statement and should be directed to: Secretary, Vinings Investment Properties
Trust, 3111 Paces Mill Road, Suite A-200, Atlanta, GA 30339.
INDEPENDENT AUDITORS
The Board of Trustees has selected the firm of Arthur Andersen LLP,
independent public accountants, as the auditors of the financial statements of
the Trust and its subsidiaries for its current fiscal year ending December 31,
1999. A member of Arthur Andersen LLP will be present at the Annual Meeting and
will be given the opportunity to make a statement and to answer any questions
any shareholder may have with respect to the financial statements of the Trust
for fiscal 1998.
The following disclosure appeared in the Trust's Current Report on Form 8-K
filed with the SEC on January 8, 1997:
On January 8, 1997, Vinings Investment Properties Trust (the "Registrant")
dismissed Ernst & Young LLP as independent public accountants for the
Registrant. For the fiscal year ended December 31, 1994 ("Fiscal 1994"), Kenneth
Leventhal & Company (succeeded by merger with Ernst & Young LLP) had examined
and reported upon the Registrant's financial statements and had served as the
Registrant's independent public accountants. For the fiscal year ended December
31, 1995 ("Fiscal 1995"), Ernst & Young LLP had examined and reported upon the
Registrant's financial statements and had served as the Registrant's independent
public accountants. For the fiscal year ended December 31, 1996 ("Fiscal 1996")
and through the dismissal of Ernst & Young LLP on January 8, 1997, Ernst & Young
LLP served as the Registrant's independent public accountants but did not
examine and/or report upon the Registrant's financial statements.
On January 9, 1997, the Registrant engaged Arthur Andersen LLP as the
independent public accountants to examine and report upon the Registrant's
financial statements for Fiscal 1996. The change in independent public
accountants followed a decision by management and approval by the Audit
Committee and the Board of Trustees, that it was in the best interest of the
Registrant to review the relationship between the Registrant and its independent
public accounting firm with respect to services provided and fees charged. The
Audit committee solicited and received proposals from, and interviewed Ernst &
Young LLP, Deloitte & Touche LLP and Arthur Andersen LLP concerning audit and
certain tax services to be provided for Fiscal 1996 prior to making the decision
to dismiss Ernst & Young LLP and to engage Arthur Andersen LLP. During the
Registrant's two most recent fiscal years and any subsequent interim period
prior to engaging Arthur Andersen LLP, neither the Registrant nor anyone on its
behalf consulted Arthur Andersen LLP regarding any matter described in Item
304(a)(2)(i) or (ii) of Regulation S-K.
In connection with the audits of Fiscal 1994 and Fiscal 1995 and through
the dismissal of Ernst & Young LLP on January 8, 1997, there were no
disagreements with Ernst & Young LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to their satisfaction would have caused them to
make reference to the subject matter of the disagreement in connection with
their report. During the Registrant's two most recent fiscal years and through
the dismissal of Ernst & Young LLP on January 8, 1997, none of the kind of
events listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation
S-K occurred.
Neither the audit reports of Kenneth Leventhal & Company on the
consolidated financial statements of the Registrant for Fiscal 1994 nor the
audit reports of Ernst & Young LLP on the consolidated financial statements of
the Registrant for Fiscal 1995 contained any adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles.
The Registrant has provided Ernst & Young LLP with a copy of the
disclosures it is making in this Current Report on Form 8-K prior to the filing
of this report with the Securities and Exchange Commission. The Registrant has
requested and received a letter from Ernst & Young LLP addressed to the
Securities and Exchange Commission stating that it agrees with the statements
made by the Registrant herein in response to Item 304(a) of Regulation S-K and
such letter is included in this filing as an exhibit.
OTHER MATTERS
The Board of Trustees does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are duly presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
VININGS INVESTMENT PROPERTIES TRUST
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
to be held on June 29, 1999
The undersigned hereby constitutes and appoints Peter D. Anzo and Stephanie A.
Reed, and each of them, as Proxies of the undersigned, with full power to
appoint his or her substitute, and authorizes each of them to represent and vote
all Shares of Beneficial Interest of Vinings Investment Properties Trust (the
"Trust") held of record as of the close of business on June 4, 1999, at the
Annual Meeting of Shareholders (the "Annual Meeting") of the Trust to be held at
Cobb Galleria Centre, Two Galleria Parkway, Atlanta, Georgia 30339, at 10:00
a.m. Eastern Time, on June 29, 1999, and at any adjournments or postponements
thereof.
When properly executed, this proxy will be voted in the manner directed herein
by the undersigned shareholder(s). If no direction is given, this proxy will be
voted "FOR" the election of the seven nominees for Trustees set forth in
Proposal 1 and "FOR" each of Proposal 2, Proposal 3 and Proposal 4. In their
discretion, the Proxies are each authorized to vote upon such other business as
may properly come before the Annual Meeting and any adjournments or
postponements thereof. A shareholder wishing to vote in accordance with the
Board of Trustees' recommendations need only sign and date this proxy and return
it in the enclosed envelope.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Annual Meeting of Shareholders, the Proxy Statement and the Trust's
Annual Report to Shareholders and hereby revoke(s) any proxy or proxies
heretofore given. This proxy may be revoked at any time before it is exercised.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
VININGS INVESTMENT PROPERTIES TRUST
Please vote and sign on the other side and return promptly
in the enclosed envelope.
Do not forget to date your proxy.
Please sign name exactly as shown. Where there is more than one holder, each
should sign. When signing as an attorney, administrator, guardian or trustee,
please add your title as such. If executed by a corporation or partnership, the
proxy should be signed by a duly authorized person, stating his or her title or
authority.
- ------- Please mark vote
X as in this example
- --------
PROPOSAL 1. Proposal to elect seven Trustees, each to serve for a one-year
term until the election and qualification of his or her successor.
NOMINEES: Peter D. Anzo, Stephanie A. Reed, Phill D. Greenblatt, Henry
Hirsch, Martin H. Petersen, James D. Ross and Gilbert H. Watts, Jr.
-------- -------- --------
FOR AGAINST FOR ALL
EXCEPT
-------- -------- --------
If you do not wish your shares voted FOR a particular nominee, mark the FOR ALL
EXCEPT box and strike a line through that nominee's name. Your shares will be
voted for the remaining nominee(s).
PROPOSAL 2. To approve a proposal to amend the Trust's Declaration of Trust
to decrease the total number of authorized shares of beneficial interest from
unlimited to 25,000,000 and to classify all such shares as common shares of
beneficial interest or, if Proposal 3 is also approved, to decrease the total
number of authorized shares of beneficial interest from unlimited to 32,050,000
and to classify 25,000,000 of such shares as common shares of beneficial
interest, as described in the Proxy Statement.
-------- -------- --------
FOR AGAINST FOR ALL
EXCEPT
-------- -------- --------
PROPOSAL 3. To approve a proposal to amend the Trust's Declaration of Trust
to authorize a new class of 7,050,000 preferred shares of beneficial interest
which, upon the affirmative vote of two-thirds of the Board of Trustees, may be
issued in such amounts, in one or more series, and with such designations,
preferences, limitations and relative rights for each series as the Board of
Trustees shall determine, as described in the Proxy Statement.
-------- -------- --------
FOR AGAINST FOR ALL
EXCEPT
-------- -------- --------
PROPOSAL 4. To approve a proposal to amend the Trust's Declaration of Trust
to (a) provide the Trust with a perpetual existence, (b) remove all references
and provisions relating to the Trust's being externally-advised and the Trust's
prior operations as a mortgage real estate investment trust, (c) eliminate those
provisions that prohibit the Trust from investing in certain investments in
which a Trustee or officer of the Trust has an interest and (d) eliminate those
provisions that require the Trust to disclose certain publicly-available
financial information to shareholders on a quarterly basis, as described in the
Proxy Statement.
-------- -------- --------
FOR AGAINST FOR ALL
EXCEPT
-------- -------- --------
PROPOSAL 5. In their discretion, the Proxies are each authorized to
vote upon such other business as may properly come before the Annual Meeting and
any adjournments or postponements thereof.
-------- -------- --------
FOR AGAINST FOR ALL
EXCEPT
-------- -------- --------
Please be sure to sign and date this proxy
- -
Date: _________________________________
Signature(s): _________________________________
CHANGE OF _________________________________
ADDRESS _________________________________