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 __, 2003
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to
be held at 10:00 A.M. on May 13, 2003, 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 a
change to the Trust's Bylaws. This proposed amendment is found in Proposal 1 on
the attached Notice of Annual Meeting, and is referred to this letter and in the
Proxy Statement as the "Bylaw Amendment." The Board of Trustees believes that
the restriction on investments described below may prevent the Trust from taking
advantage of investment opportunities that may exist. Accordingly, the Board of
Trustees is recommending the Bylaw Amendment to shareholders.
The Bylaw Amendment eliminates the restriction from making investments in
the form of joint ventures, partnerships, or other entities if the Trust or an
affiliate of the Trust or both taken together have less than a controlling
interest in the entity. If the Bylaw Amendment is approved, the Trust will have
the opportunity to grow by making investments in entities in which it may not
own a controlling interest. Although no specific investments are under
consideration at this time, management and the Board of Trustees may seek to
grow the Trust by making investments in income-producing real properties,
including multi-family housing and investments in other entities, primarily
other REITs and real estate general or limited partnerships that own income
producing real properties, in some cases in which the Trust may not have a
controlling interest.
One risk of the Bylaw Amendment is it allows the Trust to make passive
investments in other entities. Although the Trust does not currently have any
intention to make passive investments, the Trust in the future could make
passive investments without the approval of shareholders.
As you can see, the Bylaw Amendment involves potential significant benefits
and risks to the Company's shareholders. The accompanying Proxy Statement, which
you are urged to read carefully, provides detailed information concerning the
Bylaw Amendment and 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,
Danley K. Sheldon
President and
Chief Executive Officer
-----------------------------------------
Special Note Regarding Forward-Looking Statements
Certain statements herein and in the accompanying Proxy Statement
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. When used herein and in the 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 key
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 the accompanying Proxy Statement
including, without limitation, under the heading "RISK FACTORS."
MAXUS REALTY TRUST, INC.
104 ARMOUR ROAD
NORTH KANSAS CITY, MISSOURI 64116
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 13, 2003
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 13, 2003, in
the 24th Floor Conference Room at 2345 Grand Boulevard, Suite 2400, Kansas City,
Missouri, for the following purposes:
1. To consider and vote upon a proposal to amend Section 6.2(j) of
Article VI of the Trust's Bylaws eliminating the restriction on
the Trust from making investments in the form of joint ventures,
partnerships, or other entities if the Trust or an affiliate of
the Trust or both taken together do not have a controlling
interest in the entity.
2. To elect six trustees to hold office until the next Annual
Meeting of Shareholders and until their successors are elected
and qualify.
3. To vote upon 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 have not
been received by the date of the Annual Meeting of Shareholders.
4. To consider and act upon 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 20,
2002, 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 ___, 2003
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 13, 2003
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 13, 2003, 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 [31], 2003.
INTRODUCTION
The Board of Trustees is asking you to vote on nominees to the Board of
Trustees.
RECORD DATE
The Board of Trustees has fixed the close of business on March 20, 2003 as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the Annual Meeting. On March 20, 2003, there were issued and
outstanding and entitled to vote 1,229,867 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 it 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 (a) the Bylaw Amendment and
(b) the nominees for Trustees named herein. 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 (i) by delivering
to the Secretary of the Trust written notice of revocation bearing a later date
than the proxy, (ii) by submitting a later dated proxy, or (iii) by 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 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 writing the name(s) of such nominee or nominees
in the space provided after the entry "For All Nominees Except" on the proxy
card. 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 six 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 the Bylaw Amendment
described in Proposal 1. 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 proposal to amend the Bylaws,
abstentions and broker non-votes will have the same effect as a negative vote.
In tabulating votes on other matters (other than the election of Trustees),
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.
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.
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
2
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.
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 key 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 including, without limitation, under
the heading "Risks Relating to the Bylaw Amendment."
3
PROPOSAL 1
PROPOSAL TO APPROVE AN AMENDMENT TO
SECTION 6.2(j) OF THE TRUST'S BYLAWS, TO ALLOW
THE TRUST TO MAKE INVESTMENTS IN ENTITIES
EVEN IF THE TRUST OR AN AFFILIATE OF THE
TRUST DOES NOT HAVE A CONTROLLING
INTEREST IN THE ENTITY
PROPOSAL 1
Presently, Section 6.2(j) of the Trust's Bylaws prohibits the Trust from
making investments in the form of joint ventures, partnerships, or other
entities if the Trust or an affiliate of the Trust or both taken together do not
have a controlling interest in the entity. The Board of Trustees recommends to
the shareholders that the Trust amend this provision to allow the Trust to make
these types of investments. Accordingly, the Board of Trustees has adopted and
recommended to the shareholders for their approval and adoption the following
resolution:
RESOLVED, that Section 6.2 of the Trust's Bylaws be amended by
deleting the text of paragraph (j), thereby eliminating the
restriction on making investments in the form of joint ventures,
partnerships, or other entities if the Trust or an affiliate of the
Trust do not have a controlling interest in the entity; as so amended,
paragraph (j) will provide as follows:
"(j) [Intentionally omitted];..."
EFFECT OF PROPOSAL 1
The effect of the resolution is to eliminate the restriction prohibiting
the Trust from making investments in the form of joint ventures, partnerships,
or other entities if the Trust or an affiliate of the Trust or both taken
together have less than a controlling interest in the entity.
REASONS FOR RECOMMENDING THE BYLAW AMENDMENT
The Trustees believe that the Bylaw Amendment is in the best interests of
the shareholders of the Trust because it allows the Trust to grow by making
investments in entities in which it may not own a controlling interest. Although
no specific investments are under consideration at this time, management and the
Board of Trustees may seek to grow the Trust by making investments in
income-producing real properties, including multi-family housing and investments
in other entities, primarily other REITs and real estate general or limited
partnerships that own income producing real properties, in some cases in which
the Trust may not have a controlling interest. The Trust is considering
acquiring general partner interests in real estate limited partnerships in which
the Trust would be responsible for the management of the limited partnerships,
but may not have a controlling equity or limited partner interest of the limited
partnerships. The Trust is also attempting to sell The Atrium, the multi-tenant
office building the Trust owns in Minneapolis, Minnesota. If the Trust is not
able to find a buyer on terms it deems acceptable, the Trust may consider a
joint venture partner for the Atrium.
4
However, there can be no assurance that the Trust will find a buyer or a joint
venture partner on terms acceptable in the near future.
RISKS RELATING TO THE BYLAW AMENDMENT
Although the Board of Trustees recommends approval of the Bylaw Amendment,
the Trust's shareholders should carefully consider the following risk in
determining whether to approve the Bylaw Amendment. One risk of the Bylaw
Amendment is it allows the Trust to make passive investments in other entities.
If the Trust makes a passive investment, the Trust may not have the right to
manage or control the entity in which the Trust invests. Although the Trust does
not currently have any intention to make passive investments, the Trust in the
future could make passive investments without the approval of shareholders.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE ABOVE DESCRIBED AMENDMENT
TO THE TRUST'S BYLAWS.
PROPOSAL 2
ELECTION OF TRUSTEES
The Board of Trustees proposes the election of the six 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. The Board reduced the number of
Trustees from seven to six effective as of May 13, 2003, the date of the Annual
Meeting. 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. Danley K. Sheldon, age 44, has served as President and a Trustee since
January 25, 2002. He was appointed Chief Executive Officer on May 14, 2002. Mr.
Sheldon is also Chief Executive Officer 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 350 people to manage 62 commercial properties, including
more than 10,000 apartment units and 450,000 square feet of retail and office
space. David L. Johnson, a current Trustee who has not been nominated for
reelection and Chairman of the Board of the Trust is the Chairman and majority
shareholder of Maxus. Mr. Sheldon currently serves as a member of the board of
directors of Entertainment Properties Trust, a New York Stock Exchange listed
real estate investment trust and Blue Cross Blue Shield of Kansas City. 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. Mr. Sheldon has previously held
various positions with Ferrellgas Partners, L.P., most recently as President and
Chief Executive Officer.
5
Mr. Monte McDowell, age 45, has served as a Trustee since November 9, 1999.
He is President, Chief Executive Officer and principal shareholder of McDowell
Pharmaceuticals, L.L.C., a Missouri limited liability company involved in
several areas of the pharmaceutical industry. 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 45, 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. Steven Rosenberg, age 49, has served as a Trustee since September 19,
2000. He is Acting Manager and sole proprietor of Aspen Mortgage, Inc. and Aspen
Pacific, Inc. which manages a portfolio of 36 entities that are actively
invested in a variety of real estate and non real estate investments. These
entities, along with other investors, have invested through debt, equity, and
combinations thereof in over 250 transactions totaling over $350,000,000. Mr.
Rosenberg acts as both manager and co-investor in these transactions.
Mr. W. Robert Kohorst, age 50, 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. Kohorst currently serves as a
director of Professional Business Bank, a bank headquartered in Pasadena,
California whose stock is listed on the OTC Bulletin Board.
Mr. Jose L. Evans, age 39, is a nominee for Trustee. He is President and
sole owner of Assured Quality Title Company, which is a real estate title
insurance agency and escrow company.
Neither Mr. David L. Johnson nor Mr. Robert B. Thomson have been nominated
to be reelected Trustees. Mr. Daniel W. Pishny resigned as a Trustee and
President effective as of January 18, 2002. Mr. Sheldon was appointed to replace
Mr. Pishny as a Trustee and President on January 25, 2002.
Each of Mr. Garlich, Mr. McDowell, Mr. Rosenberg and Mr. Kohorst are
Independent Trustees as defined in the Trust's Bylaws. If elected, Mr. Evans
would also be an Independent Trustee.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE ABOVE NOMINEES FOR
TRUSTEES OF THE TRUST.
COMMITTEES OF THE BOARD
From January 1, 2002 to December 31, 2002, the Board of Trustees met seven
(7) times. All of the incumbent Trustees attended all of the meetings of the
Board of Trustees and meetings held by those committees of the Board on which
they served, except Mr. Garlich and Mr. Rosenberg each were absent from one (1)
board meeting.
6
Among the standing committees of the Board of Trustees are the Executive
Committee and the Audit Committee. The Trust does not have standing nominating
or compensation committees.
The Executive Committee is comprised of David L. Johnson, Monte McDowell
and Robert B. Thomson. 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. The Executive Committee did not meet
during 2002.
The Audit Committee is comprised of Christopher J. Garlich, Monte McDowell,
Steven Rosenberg and W. Robert Kohorst. Mr. Kohorst was appointed to the Audit
Committee on May 14, 2002. The functions of the Audit Committee are to select
the accounting firm to serve as the independent auditor of the Trust, to monitor
and review with the independent auditor the Trust's financial reporting and
accounting procedures and policies, to supervise the adequacy of the Trust's
financial, accounting and operating controls and to review the scope of any
audits conducted by the independent auditor. The Audit Committee met two (2)
times during 2002.
AUDIT COMMITTEE CHARTER
During 2001, the Board of Trustees of the Trust adopted a new, written
Audit Committee Charter, a copy of which Charter was attached as an appendix to
the Trust's proxy statement for the 2001 annual meeting of shareholders. The
Board of Trustees has determined that each current Audit Committee member is
"independent" as that term is defined in Rule 4200(a)(15) of the National
Association of Securities Dealers' listing standards.
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.
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed with management the audited
financial statements for the year ended December 31, 2002; 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, 2002 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,
namely Christopher J. Garlich, Monte McDowell, Steven Rosenberg and W. Robert
Kohorst.
7
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 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 year
ended December 31, 2001 and December 31, 2002 and the reviews of the financial
statements included in the Trust's reports on Form 8-K and Form 10-QSB during
the years 2001 and 2002 were $45,000 and $49,500, respectively.
AUDIT-RELATED FEES
The aggregate fees billed to the Trust for assurance and related services
by KPMG LLP 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 year ended December 31, 2001 were $20,000. 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 year ended December 31, 2002.
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, 2001 and December 31, 2002 were $14,000 and $26,000, respectively.
These fees were for services rendered in connection with preparation of tax
returns and advice on tax compliance.
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, 2001 and December 31, 2002.
TRUSTEE'S 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) $250 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.
8
There are no family relationships between any of the Trustees or executive
officers.
EXECUTIVE OFFICERS
POSITIONS OR OFFICES
NAME AGE WITH THE TRUST
Danley K. Sheldon(1)..... 44 President, Chief Executive Officer
and Trustee
John W. Alvey............ 44 Vice President and Chief Financial
and Accounting Officer
Mr. John Alvey has served as Vice President, Chief Financial and Accounting
Officer and Trustee 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 and President of KelCor. 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)For biographical information on this Executive Officer, see "ELECTION OF
TRUSTEES."
EXECUTIVE COMPENSATION
No person serving as executive officer as of the end of or during 2002 or
2001 received salary and bonuses exceeding $100,000. None of the Trust's
executive officers are compensated by the Trust for their services.
RELATED TRANSACTIONS
The Trust has entered into an agreement with Maxus to manage the Trust's
properties. David L. Johnson is Chairman and majority shareholder of Maxus.
Danley K. Sheldon and John W. Alvey are executive officers of Maxus. Management
fees of $170,000 and $327,000 payable to Maxus have been incurred for the years
ended December 31, 2001 and December 31, 2002, 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
$317,000 and $663,000 of such payroll costs for the years ended December 31,
2001 and December 31, 2002, respectively, that have been or will be reimbursed
to Maxus by the Trust.
Robert B. Thomson, an Independent Trustee as defined in the Trust's Bylaws,
performs legal services for the Trust. The Trust paid Mr. Thomson fees totaling
$67,500 and $19,304 for legal services rendered by Mr. Thomson in the years
ended December 31, 2001 and December 31, 2002, respectively.
9
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 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.
Independent Trustees:
Robert Thomson
Monte McDowell
Christopher J. Garlich
Steven Rosenberg
W. Robert Kohorst
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 NASDAQ Stock Market Composite Total Return Index
("NASDAQ") and the National Association of Real Estate Investment Trusts
("NAREIT") Total Return Index.
[Graph Omitted]
10
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
MAXUS REALTY TRUST, NASDAQ NATIONAL MARKET SYSTEM COMPOSITE
RETURN AND NAREIT COMPOSITE RETURN
Assumes $100 invested on December 31, 1997 in Maxus Realty Trust, Inc.
Common Stock, NASDAQ/NMS Composite Index and NAREIT Composite Index
December 31,
-------------------------------------------
1998 1999 2000 2001 2002
---- ---- ---- ---- ----
NASDAQ 139.63 259.13 157.32 124.20 85.04
NAREIT 81.18 75.92 95.58 110.39 116.15
MRTI 63.74 52.75 66.06 122.74 111.28
PROPOSAL 3
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 3 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, 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 Proposals 1 and/or 2. Consequently, it is not
likely to be in the interest of shareholders who intend to vote against
Proposals 1 and/or 2 to vote in person to adjourn the Annual Meeting of
Shareholders or to vote for Proposal 3 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 [February 14], 2002,
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 Trustees, nominees and officers as a group:
Name of Number of Shares Percent
Beneficial Owner Beneficially Owned (1) of Class (2)
- ---------------- ---------------------- ------------
David L. Johnson 100,832 (3) 8.2
John W. Alvey 55,881 (4)(5) 4.5
Christopher J. Garlich 67,082 5.5
Monte McDowell 15,000 (6) 1.2
Steven Rosenberg 1,800 (7) *
Danley K. Sheldon 20,000 (8) 1.6
11
W. Robert Kohorst 18,748 (9) 1.5
Robert B. Thomson 41,645 (10) 3.4
Jose L. Evans 24,360 2.0
Trustees and Executive 323,888 (11) 16.5
Officers as a Group
(1) 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.
(2) 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.
(3) Includes: (i) 82,782 shares held by Mr. Johnson and his wife as joint
tenants with right of survivorship and (ii) 300 shares held by his minor
son and daughter. 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 is the principal equity interest holder, to secure loans
made by Sunset, (ii) 37,881 shares pledged as collateral to Bond Purchase,
L.L.C. ("Bond Purchase"), a limited liability company in which Mr. Johnson
is the majority equity interest holder, to secure a loan to NKC Associates,
L.L.C. (as described in (5) below) and (ii) 41,645 shares pledged as
collateral to Mr. Johnson and his wife to secure a loan to FQE, L.L.C., a
Missouri limited liability company ("FQE") in which Mr. Robert B. Thomson
(see note 10 below).
(4) 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 each of Mr. Alvey hold 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.
(5) 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) These shares are held by a revocable trust for the benefit of Mr.
McDowell's son.
(7) Held by his wife.
(8) These shares have been pledged as collateral to Sunset to secure loans made
by Sunset to Mr. Sheldon.
(9) Includes (i) 16,048 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
12
individual retirement account and (iii) 2,000 shares held in Mr. Kohorst's
wife's individual retirement account.
(10) These shares are held by FQE. FQE obtained the funds used to purchase these
shares from proceeds of a loan made to FQE by David L. Johnson. The loan is
evidenced by a promissory note, due on demand, bearing interest at a rate
of eight percent per annum, and secured by the shares. Mr. Thomson is the
sole member of FQE, L.L.C. Does not include shares described in note (4)
held by NKC Associates, L.L.C., in which Mr. Thomson has a 10% interest.
(11) Includes the 37,881 shares held by NKC Associates, L.L.C. Does not include
the shares beneficially held by Mr. Johnson, who has not been nominated to
be reelected as a Trustee and has resigned as Chairman of the Board.
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 2002, all
filing requirements applicable to its officers, Trustees, and greater than
ten-percent beneficial owners were complied with, except that Danley K. Sheldon
did not file his initial Form 3 within ten (10) days after being appointed an
executive officer on January 25, 2002 as required under Section 16(a) of the
Exchange Act.
INDEPENDENT AUDITORS
The Audit Committee selected KPMG LLP to serve as the Trust's independent
auditor for the fiscal year ending December 31, 2003. KPMG LLP also served as
the Trust's independent auditor for the fiscal year ended December 31, 2002.
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.
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.
13
SHAREHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING OF SHAREHOLDERS
Shareholders who wish to present proposals for action at the Annual Meeting
of Shareholders to be held in 2004 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 __, 2003, 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 __, 2004.
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: Marsha Arr, 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.
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 __ to __.
(ii) "Consolidated Financial Statements" with the independent auditors
report therein, at pages F-1 to F-__.
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.
14
BY ORDER OF THE BOARD OF TRUSTEES
Christine A. Robinson
Secretary
March __, 2003
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 2002 will be sent to stockholders
upon request without charge. Requests should be made to Maxus Realty Trust,
Inc., Attention: Marsha Arr, 104 Armour Road, North Kansas City, Missouri 64116.
15
APPENDIX A
PRELIMINARY COPY
[FORM OF PROXY]
PROXY
MAXUS REALTY TRUST, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned does hereby appoint Danley K. Sheldon 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 13, 2003,
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 2), 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)
A-1
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
MAXUS REALTY TRUST, INC.
May 13, 2002
THE BOARD OF TRUSTEES RECOMMENDS
A VOTE FOR THE FOLLOWING:
Please mark your votes as
indicated in this example /X/
(See the Reverse for Additional Instructions on Proposition 2)
1. Proposal to amend Section 6.2(j) of the Trust's Bylaws to eliminate the
restriction prohibiting the Trust from making investments in entities if
the Trust or an affiliate of the Trust or both taken together do not have a
controlling interest in the entity.
FOR / / AGAINST / / ABSTAIN / /
2. Election of Trustees.
FOR all Nominees (except as marked to the contrary) / /
WITHHOLD AUTHORITY to vote for all nominees / /
(Instruction: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name below.)
Nominees: Danley K. Sheldon, Christopher J. Garlich, Monte McDowell, W.
Robert Kohorst, Steven Rosenberg, Jose L. Evans (Cumulative voting applies-See
Proxy Statement)
3. Adjournment of the meeting to allow for additional solicitation of proxies
if necessary to establish a quorum or to obtain additional votes in favor
of the foregoing proposal 1.
FOR / / AGAINST / / ABSTAIN / /
4. In their discretion, the proxies are authorized to vote upon such other
business as may 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.
A-2
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.
Signature____________ Signature if held jointly _____________ Date ________ 2003
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
A-3
APPENDIX B
1. Page [10] of the printed proxy statement contains a performance graph.
The information in the graph is set forth in the table immediately
following the graph.
B-1