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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:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
VININGS INVESTMENT PROPERTIES TRUST
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
/ / 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: $125
2) Form, schedule or registration statement no.: Schedule 14A -
Preliminary
3) Filing party: Vinings Investment Properties Trust
4) Date filed: May 23, 1996
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VININGS INVESTMENT PROPERTIES TRUST
3111 PACES MILL ROAD
SUITE A-200
ATLANTA, GA 30339
(770) 984-9500
June 3, 1996
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
25, 1996, 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 electing six
Trustees, each to serve for a one-year term, the adoption of certain amendments
to the Trust's Declaration of Trust, and considering and voting upon 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 May 8, 1996 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 six nominees of the Board of Trustees as Trustees of the Trust
and the amendments to the Trust's 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
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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 JUNE 25, 1996
----------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Vinings
Investment Properties Trust (the "Trust") will be held on Tuesday, June 25,
1996, at 10:00 a.m., local time, at Cobb Galleria Centre, Two Galleria Parkway,
Atlanta, GA 30339 (the "Annual Meeting"), for the
purpose of considering and voting upon:
1. The election of six 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 Declaration of Trust
to authorize the Board of Trustees to combine outstanding shares of
beneficial interest of the Trust by way of reverse share split;
3. The approval of a proposal to amend the Trust's Declaration of Trust
to eliminate certain restrictions on the Trust's investment practices
and activities and to provide that to achieve the general policy
objective of the Trust, the Trustees intend to invest the assets of
the Trust in multifamily apartment properties and other real estate
properties which offer the potential to achieve such objective; and
4. Such other business as may properly come before the meeting and any
adjournments or postponements thereof.
Under the provisions of the Trust's Declaration of Trust, the Board of
Trustees has fixed the close of business on May 8, 1996 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 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 3, 1996
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.
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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 25, 1996
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 (formerly Mellon Participating Mortgage Trust
Commercial Properties Series 85/10) (the "Trust") for use at the Annual Meeting
of Shareholders of the Trust to be held on Tuesday, June 25, 1996, at 10:00
a.m., local time, at Cobb Galleria Centre, Two Galleria Parkway, Atlanta, GA
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 six 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 Declaration of Trust
to authorize the Board of Trustees to combine outstanding shares of
beneficial interest of the Trust by way of reverse share split (the
"Reverse Split Amendment");
3. The approval of a proposal to amend the Trust's Declaration of Trust
to eliminate certain restrictions on the Trust's investment practices
and activities and to provide that to achieve the general policy
objective of the Trust, the Trustees intend to invest the assets of
the Trust in multifamily apartment properties and other real estate
properties which offer the potential to achieve such objective (the
"Investment Policies Amendment" and, together with the Reverse Split
Amendment, the "Charter Amendments"); and
4. Such other business as may properly come before the meeting and 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 3, 1996 in
connection with the solicitation of proxies for the Annual Meeting. The Board of
Trustees has fixed the close of business on May 8, 1996 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 the Record Date, there were 8,645,000 Shares outstanding and
entitled to vote at the Annual Meeting and 823 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 the Record Date, 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
the
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election of the six Trustees nominated by the Board of Trustees and for the
approval of the Charter Amendments, and their affiliates were owners of
6,337,279 Shares, representing approximately 73.3% of the outstanding Shares of
the Trust.
INTRODUCTION
Background
----------
On December 21, 1995, the Trust entered into an Agreement Regarding Tender
Offer with an unaffiliated third party, which subsequently assigned its rights
under the agreement to Vinings Investment Properties, Inc. (the "Purchaser"), a
newly formed corporation. On January 31, 1996, the Purchaser commenced a
tender offer for a minimum of a majority and a maximum of 85% of the issued and
outstanding Shares of the Trust at a purchase price of $0.47 per Share (the
"Tender Offer"). The Tender Offer expired in accordance with its terms at
midnight on February 28, 1996, and the Purchaser subsequently accepted an
aggregate of 6,337,279 Shares validly tendered and not withdrawn pursuant to the
Tender Offer, representing approximately 73.3% of the outstanding Shares, for a
total acquisition price of $2,978,521. The purpose of the Tender Offer was for
the Purchaser to acquire control of the Trust and to cause the Trust to be
operated as a self-administered real estate investment trust (a "REIT") and
expand into the multifamily property markets.
Effective February 29, 1996, James L. Mooney, John McMahan, Mercer Jackson,
Arthur C. Karlin, Patrick E. McCarthy and Victor MacFarlane resigned from the
Trust's Board of Trustees and Peter D. Anzo, Martin H. Petersen, Stephanie A.
Reed, Gilbert H. Watts, Jr. and Phill D. Greenblatt were appointed to the
Trust's Board of Trustees, pursuant to an arrangement between the Purchaser and
the Trust in connection with the Tender Offer. The management of the Trust also
resigned effective February 29, 1996, and Peter D. Anzo became the President and
Chief Executive Officer, and Stephanie A. Reed became the Vice President and
Treasurer, of the Trust. In addition, on April 18, 1996, the Board of Trustees
named Henry Hirsch to the Board of Trustees.
Growth and Expansion Strategy
-----------------------------
Pursuant to management's growth and expansion strategy, the Trust intends
to expand into the multifamily property markets through the acquisition of
properties which the Trust believes will provide attractive sources of income to
the Trust. The Trust currently anticipates that these properties will include
certain properties within management's affiliates' existing multifamily property
portfolios that meet certain criteria, as well as properties acquired from
unaffiliated third parties. It is the Trust's present intention to form a
partnership through which the business and operations of the Trust will be
conducted (the "Operating Partnership"). Acquired properties will be contributed
to the Operating Partnership in exchange for cash or units representing
partnership interests. The chart below sets forth the organizational structure
of the Trust following the implementation of the Operating Partnership structure
described above.
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[GRAPHIC] [See Appendix for description]
The Trust believes that conducting its business and operations through the
Operating Partnership will have certain strategic advantages over the Trust's
current structure, which allows only direct investment in the Trust's real
estate portfolio through the purchase of Shares of the Trust. In particular, the
Operating Partnership structure will provide the Trust with greater flexibility
in facilitating future acquisitions by permitting the issuance of partnership
units on a tax-advantaged basis to owners of real estate properties who
contribute such properties to the Operating Partnership. Holders of partnership
units will have the right, under certain circumstances, to convert such units
into Shares of the Trust, resulting in long-term liquidity for such holders. The
overall effect of this structure, the Trust believes, will be an enhanced
ability of the Trust to access the real estate and capital markets. While the
Trust believes that the Operating Partnership structure is in the overall best
interests of the shareholders of the Trust, there are certain perceived
disadvantages to such a structure. These disadvantages include the increased
complexity of the structure and the potential for conflicts of interest inherent
in the decision by the Trust as to whether or not to dispose of particular
properties held by the Operating Partnership.
VOTING
The representation in person or by proxy of at least a majority of the
outstanding Shares 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 the amendments to the Declaration of Trust set forth in Proposal 2 - The
Reverse Split Amendment and Proposal 3 - The Investment Policies Amendment.
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
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be excluded entirely from the vote and will have no effect. For purposes of the
vote on Proposal 2 and Proposal 3, abstentions will have the same effect as
votes against the approval of such proposals.
The Annual Report of the Trust, including financial statements for the
fiscal year ended December 31, 1995 ("fiscal 1995"), 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 SIX NOMINEES FOR TRUSTEES SET FORTH IN PROPOSAL 1 OF
THIS PROXY STATEMENT, "FOR" THE REVERSE SPLIT AMENDMENT SET FORTH IN PROPOSAL 2
OF THIS PROXY STATEMENT AND "FOR" THE INVESTMENT POLICIES AMENDMENT SET FORTH IN
PROPOSAL 3 OF THIS PROXY STATEMENT. 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
NOMINEES
The Board of Trustees of the Trust consists of six 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, six Trustees will be elected to serve until the 1997
annual meeting of shareholders and until the election and qualification of his
or her successor. The Board of Trustees has nominated Peter D. Anzo, Martin H.
Petersen, Stephanie A. Reed, Gilbert H. Watts, Jr., Phill D. Greenblatt and
Henry Hirsch, all of whom currently serve as Trustees, for re-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 re-election and to serve if re-elected as a Trustee.
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If any of the persons nominated by the Board of Trustees fails to stand for
re-election or is unable to accept re-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 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 THE SIX NOMINEES OF THE BOARD OF TRUSTEES AS TRUSTEES
OF THE TRUST.
INFORMATION REGARDING TRUSTEES
GENERAL
The Board of Trustees of the Trust consists of six members who are elected
by the Trust's shareholders at each annual meeting of the Trust. Set forth below
is certain information regarding the Trustees.
TRUSTEE
NAME AGE SINCE
- - ---- --- -----
Peter D. Anzo..................... 42 1996
Martin H. Petersen................ 46 1996
Stephanie A. Reed................. 38 1996
Gilbert H. Watts, Jr. ............ 46 1996
Phill D. Greenblatt............... 50 1996
Henry Hirsch...................... 59 1996
PETER D. ANZO. Since 1990 Mr. Anzo has been Chief Executive Officer and a
Director of A&P Investors, Inc. He also is Chief Executive Officer and a
Director of The Vinings Group, Inc., a position he has held since 1987. Mr. Anzo
has been on the Legislative Committee since 1995, and has been a delegate since
1991, of the National Apartment Association. He has been a Co-chairman of the
Government Affairs Committee of the Atlanta Apartment Association since 1995 and
he has been a Director of the Atlanta Apartment Association and the Georgia
Apartment Association since 1993. He is also a Co-chairman of the Affordable
Housing Task Force of the Atlanta Apartment Association, a position he has held
since 1992. 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 the Vice President, Dispositions of Balcor/American
Express from 1981 until 1983, where he was involved in the sale of apartment and
commercial properties in the United States. During 1976 through 1981, Mr. Anzo
was employed by The Beaumont Company, Los Angeles, California and Linkletter
Properties where he was involved in the management, leasing, purchase and
construction of real property.
MARTIN H. PETERSEN. Since 1990 Mr. Petersen has been President and a
Director of A&P Investors, Inc. He is also President and a Director of The
Vinings Group, Inc., a position he has held since 1987. Since 1975 Mr. Petersen
has been 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 management
of 4,770 apartment units located throughout the Southeastern United States,
including 3,000 garden style apartment units in Atlanta, Georgia, and managed
the acquisition and disposition of properties. 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,
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including the 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 performed various functions as
relating to the management of office space, including the initiation of numerous
feasibility, marketing and other consulting studies for REITs, financial
institutions, savings & 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.
STEPHANIE A. REED. Since 1991 Ms. Reed has been Vice President and a
Director of A&P Investors, Inc. She is also Vice President - Finance and a
Director of The Vinings Group, Inc., a position she has held since 1991. 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 multi-family projects ranging
from $11-$30 million each. Prior to 1987, she served as Vice President - Finance
of The Sterling Group, Inc., in the syndication and management of multi-family
projects. Prior to joining The Sterling Group, Inc., Ms. Reed served as a tax
supervisor at Jones and Kolb, CPA from 1983 through 1984, where her
responsibilities included the training and supervision of audit and year-end
work for real estate limited partnerships. From 1981 to 1983, Ms. Reed performed
tax planning and preparation work for trusts, estates, partnerships and
corporations for Osburn Henning and Company, CPA.
GILBERT H. WATTS, JR. 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 also is President of Radio Center Dalton, Inc., a position he has held
since 1985. Mr. Watts also is a Director of The Community Group, Inc., a six
bank holding company, and various family businesses.
PHILL D. GREENBLATT. 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.
Mr. Greenblatt also is a member of the Board of Directors of Western States
Mortgage Co. 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. 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 and a shopping center.
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 and currently is the Chairman of the Builders,
Owners, and Developers Committees of the National Apartment Association.
MEETINGS OF BOARD OF TRUSTEES AND COMMITTEES
During fiscal 1995, the Board of Trustees of the Trust held seven meetings.
The Board of Trustees has established an Audit Committee. The members of the
Audit Committee are Martin H. Petersen, Stephanie A. Reed and Gilbert H. Watts,
Jr. 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. During fiscal 1995, the Audit
Committee consisted of four Trustees, none of whom currently serve as Trustees.
The Audit Committee held one meeting during fiscal 1995. The Board of Trustees
currently expects to establish a Compensation Committee during the current
fiscal year ending December 31, 1996 ("fiscal 1996"). See "Executive
Compensation" below. The Board of Trustees does not have a nominating committee.
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INFORMATION REGARDING EXECUTIVE OFFICERS
The names and ages of all executive officers of the Trust and principal
occupation and business experience during at least the last five years for each
are set forth below.
Name Age Position
- - ---- --- --------
Peter D. Anzo 42 President, Chief Executive Officer
and Chairman of the Board
Stephanie A. Reed 38 Vice President and Treasurer
The business experience of Mr. Anzo and Ms. Reed has been summarized above
under "Information Regarding Trustees."
EXECUTIVE COMPENSATION
COMPENSATION OF TRUSTEES AND OFFICERS
Trustees who are officers of the Trust receive no compensation for their
services as Trustees. Trustees who are not officers of the Trust receive such
compensation for their services as the Board of Trustees may from time to time
determine. During fiscal 1995, Trustees who were not officers of the Trust
received an annual retainer of $10,000 and $500 for each regular ($300 for each
telephonic) meeting of the Board of Trustees and committee meeting attended.
James L. Mooney, the former Chairman of the Board of Trustees, received an
additional $10,000 for his responsibilities as the Trust's Chairman during
fiscal 1995. Since the completion of the Tender Offer and for the remainder of
fiscal 1996, Trustees have not and will not receive an annual retainer but
will receive $250 for each regular meeting of the Board of Trustees and
committee meeting attended.
Officers of the Trust historically have not received any compensation for
their services provided to the Trust. Until February 29, 1996, the date upon
which the Purchaser acquired approximately 73.3% of the outstanding Shares of
the Trust pursuant to the Tender Offer, the Trust was an externally advised
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, General Electric Capital Investment Advisors, Inc. ("GECIA"),
the successor to MacFarlane Partners, L.P. (the "Advisor"), was terminated and
the Trust became self-administered. 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 1996.
During fiscal 1996, the Board of Trustees expects to establish a compensation
committee that will be responsible for developing and reviewing the Trust's
executive compensation policies.
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 of beneficial
interest with the cumulative total return of companies on the Standard & Poor's
(S&P) 500 Stock Index and the NAREIT Mortgage Index (peer group). The returns
are based on the market price of the Shares and assume the reinvestment of
dividends. The NAREIT Mortgage Index includes 31 tax-qualified REITs, all of
which are listed on either the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market. The 31 REITs have a total market
capitalization of $2.5 billion. The NAREIT Mortgage Index is maintained by the
National Association of Real Estate Trusts, Washington, D.C. The calculation of
total cumulative return assumes a $100 investment in the Shares on
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January 1, 1990. 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.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG S&P 500 INDEX, NAREIT MORTGAGE INDEX AND
VININGS INVESTMENT PROPERTIES TRUST
[Performance graph]
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
Vinings Investment Properties Trust 100 84 131 161 187 202
S&P 500 100 131 141 155 157 215
NAREIT Mortgage Index 100 132 134 154 117 190
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PROPOSAL 2 - THE REVERSE SPLIT AMENDMENT
GENERAL
The discussion set forth below does not purport to be complete and is
subject to and qualified in its entirety by reference to Massachusetts law and
to the Trust's Second Amended and Restated Declaration of Trust, as amended (the
"Declaration of Trust"), and the full text of the Reverse Split Amendment which
is set forth in EXHIBIT A to this Proxy Statement. In addition, the full text of
Section 7.1 of Article VII of the Declaration of Trust, which will be amended if
the Reverse Split Amendment is approved by the shareholders at the Annual
Meeting, is set forth in EXHIBIT B to this Proxy Statement. If this Proposal 2
is approved by the shareholders of the Trust and becomes effective, the Trustees
will take such actions as may be deemed necessary or desirable to effect such
action, including the execution and filing of an amendment to the Declaration of
Trust substantially in the form set forth in EXHIBIT A to this Proxy Statement
(the "Amendment").
PURPOSE OF THE PROPOSED REVERSE SPLIT
The Reverse Split Amendment authorizes the Board of Trustees to combine
outstanding Shares of beneficial interest of the Trust by way of reverse share
split, provide for the payment of cash in lieu of any fractional interest in a
combined Share, and establish mechanics to implement any such combination.
In the event that the shareholders approve the Reverse Split Amendment, the
Trustees intend to effect a 1-for-8 reverse share split (the "Reverse Split") as
promptly as practicable following the Annual Meeting. The purpose of the reverse
share split is to increase the price range at which the Shares trade above that
which has generally prevailed for Shares of the Trust since the consummation of
the Tender Offer. A higher trading price is necessary to maintain the listing of
the Shares on the Nasdaq SmallCap Market, upon which the Shares currently are
listed. In addition, the Trustees believe that the liquidity and marketability
of the Shares will be enhanced if the price at which the Shares trade is raised
to a range more acceptable to major REIT investors. A higher trading price may
also result in lower average brokerage costs for a trade involving the same
aggregate dollar amount, thereby reducing transaction costs to shareholders.
While the Trustees believe that the Reverse Split will result in a higher
trading range for the Shares, there can be no assurance that such a higher
trading range will in fact develop.
Accordingly, the Trustees have proposed amending Section 7.1 of Article VII
of the Declaration of Trust to provide that, in addition to the issuance of
Shares by way of share dividend or share split, the Trustees may combine
outstanding Shares by way of reverse share split and provide for the payment of
cash in lieu of any fractional interest in a combined Share and that the
mechanics authorized by the Trustees to implement any such combination shall be
binding upon all shareholders, holders of convertible debt, optionees and others
with any interest in Shares.
EFFECT OF THE REVERSE SPLIT
Assuming approval of the Reverse Split by the requisite vote of the
shareholders, the Amendment to the Declaration of Trust will thereafter be filed
with the Secretary of The Commonwealth of Massachusetts and the Boston City
Clerk as promptly as practicable and the Reverse Split will become effective on
the date of such filing (the "Reverse Split Effective Date"). Without any
further action on the part of the Trust or the shareholders, after the Reverse
Split Effective Date, the certificates representing Shares outstanding
immediately prior to the Reverse Split (the "Old Shares") will be deemed to
represent one-eighth of the number of Shares after the Reverse Split (the "New
Shares"); provided, however, that no fractional Shares will be issued as a
result of the Reverse Split and, in lieu thereof, cash will be paid for any
resulting fractional shares. After the Reverse Split becomes effective,
shareholders will be asked to surrender certificates representing Old Shares in
accordance with the procedures set forth in a letter of transmittal to be sent
to shareholders by the Trust. Upon a holder's surrender of his Old Shares, a
certificate representing the New Shares will be issued and forwarded to such
holder. However, each
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certificate representing Old Shares will continue to be valid and represent New
Shares equal to one-eighth of the number of Old Shares.
The Reverse Split will have no effect on the total number of shares that
the Trust has the authority to issue, which, pursuant to the Declaration of
Trust, is unlimited. In addition, the Shares are without par value and,
therefore, the Reverse Split will not affect the par value of the Shares. The
voting and other rights that presently characterize the Shares will not be
altered by the Reverse Split.
The Shares are currently registered under Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, as a result, the
Trust is subject to periodic and other requirements of the Exchange Act. The
Reverse Split will not affect the registration of the Shares under the Exchange
Act.
DISSENTER'S RIGHTS
The Declaration of Trust contains no provisions entitling any shareholder
of the Trust who dissents from any action taken pursuant to authorization of a
majority or any other vote of shareholders to receive an appraisal and payment
of the fair value for such dissenting shareholder's Shares. Nor is there any
statute in Massachusetts applicable to business trusts that provides for
appraisal rights comparable to the statutory appraisal rights that the
Massachusetts Business Corporation Law provides to stockholders of Massachusetts
business corporations who dissent from certain stockholder-approved corporate
actions, including the merger, sale of substantially all corporate property and
any charter amendment that adversely affects the rights of the dissenting
stockholder. Until 1991, it was widely believed that there were no common law
dissenters' appraisal rights in Massachusetts. In 1991, however, the Supreme
Judicial Court of Massachusetts held that common law appraisal rights similar to
those described in the Massachusetts Business Corporation Law were available to
dissenting minority stockholders of a Massachusetts trust company (as to which
the statutory rights of the Massachusetts Business Corporation Law do not apply)
in a case in which an 85% controlling stockholder approved a 1-for-2,500 reverse
stock split that converted all minority share interests into an amount of cash
that the trial court determined was not fair and reasonable. The Supreme
Judicial Court acknowledged that, insofar as the stockholders of the trust
company were concerned, "it was, of course, not clear at the time of the reverse
stock split that such a [common law appraisal] right existed." The Court also
distinguished its decision in a 1975 case in which it had held that there was no
common law appraisal right for dissenting stockholders of a not-for-profit golf
club corporation that had sold all of its property and in which decision the
Court had stated that it is "very dubious whether such a right ever existed in
the absence of statute even with respect to business corporations."
Accordingly, it is not clear under what conditions or with respect to what
possible transactions, if any, common law appraisal rights in Massachusetts
might apply to a business trust such as the Trust. However, counsel to the Trust
has advised the Trustees that the Trust's shareholders will not be entitled to
dissenters' rights of appraisal in connection with the Reverse Split.
EXCHANGE OF STOCK CERTIFICATES
As soon as practicable after the Reverse Split Effective Date, the
Trust will send a letter of transmittal to each holder of record of Old
Shares outstanding on the Reverse Split Effective Date. The letter of
transmittal will contain instructions for the surrender of certificate(s)
representing such Old Shares to Chemical Mellon Shareholder Services, L.L.C.,
the Trust's transfer and exchange agent (the "Exchange Agent"). Upon proper
completion and execution of the letter of transmittal and return thereof to the
Exchange Agent, together with the certificate(s) representing Old Shares, a
shareholder will be entitled to receive a certificate representing the number of
New Shares into which his Old Shares have been reclassified and changed as a
result of the Reverse Split, along with any cash owed to such shareholder for
any resulting fractional shares.
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Shareholders should not submit any certificates until requested to do so.
No new certificates will be issued to a shareholder until he has surrendered his
outstanding certificate(s) together with the properly completed and executed
letter of transmittal to the Exchange Agent.
FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE SPLIT
The Trust has not sought and will not seek an opinion of counsel or a
ruling from the Internal Revenue Service regarding the federal income tax
consequences of the Reverse Split. The Trust, however, believes that because the
Reverse Split is not part of a plan to periodically increase a shareholder's
proportionate interest in the assets or earnings and profits of the Trust, the
Reverse Split will have the following federal income tax effects:
1. A shareholder will not recognize any gain or loss on the exchange. In
the aggregate, the shareholder's basis in the New Shares will equal
his basis in the Old Shares.
2. A shareholder's holding period for the New Shares will be the same as
the holding period of the Old Shares exchanged therefor.
3. The Reverse Split will constitute a reorganization within the meaning
of Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as
amended, and the Trust will not recognize any gain or loss as a result
of the Reverse Split.
VOTE REQUIRED FOR APPROVAL
Section 9.3 of the Declaration of Trust provides that the Declaration of
Trust may be amended by the vote of the holders of a majority of the outstanding
Shares entitled to vote thereon.
THE BOARD OF TRUSTEES OF THE TRUST HAS APPROVED THE REVERSE SPLIT AMENDMENT
AND RECOMMENDS THAT THE TRUST'S SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
REVERSE SPLIT AMENDMENT.
PROPOSAL 3 - THE INVESTMENT POLICIES AMENDMENT
GENERAL
The discussion set forth below does not purport to be complete and is
subject to and qualified in its entirety by reference to Massachusetts law and
to the Declaration of Trust and the full text of the Investment Policies
Amendment which is set forth in EXHIBIT A to this Proxy Statement. In addition,
the full text of Article VI of the Declaration of Trust, which will be deleted
in its entirety if the Investment Policies Amendment is approved by the
shareholders at the Annual Meeting, and the full text of Section 2.1 of Article
II of the Declaration of Trust, which will be amended if the Investment Policies
Amendment is approved by the shareholders at the Annual Meeting, is set forth in
EXHIBIT B to this Proxy Statement. If this Proposal 3 is approved by the
shareholders of the Trust and becomes effective, the Trustees will take such
actions as may be deemed necessary or desirable to effect such action, including
the execution and filing of an amendment to the Declaration of Trust
substantially in the form set forth in EXHIBIT A to this Proxy Statement.
AMENDMENT OF INVESTMENT POLICIES AND RESTRICTIONS
Article II of the Declaration of Trust provides, among other things, that
the general policy of the Trust is to invest principally in investments which
will conserve and protect the Trust's invested capital, produce cash
distributions and offer the potential for capital appreciation to be realized
upon the sale, refinancing or other disposition of such investments. Article II
further provides that, to achieve such objective, the Trustees intend
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to invest the assets of the Trust in mortgage loans and land
purchase-leasebacks, including those with equity enhancements, and other real
estate investments which offer the potential to achieve such objective. In
addition, Article VI of the Declaration of Trust prohibits the Trust from
engaging in certain investment practices and activities. The limitations on
investments and other activities set forth in Article VI include, among other
things, limitations on the Trust's ability to (i) invest in junior mortgage
loans, (ii) invest in commodities and securities, (iii) issue securities
redeemable at the holder's option, (iv) grant options or warrants having an
exercise price less than the fair market value of the Shares on the date of
grant, or options or warrants having a term greater than five years, (v) invest
more than 10% of total assets of the Trust in unimproved real property or
mortgage loans on unimproved real property, (vi) borrow on a secured or an
unsecured basis amounts in the aggregate exceeding 100% of the net assets of the
Trust, and (vii) issue debt securities of the Trust.
Although the Trustees believe that the Trust's growth and expansion
strategy is consistent with the general policy objective of the Trust as set
forth in Article II of the Declaration of Trust, the Trustees believe that the
Declaration of Trust should contain a specific reference to the Trust's intent
to invest in multifamily apartment properties and other real estate properties
which offer the potential to achieve such objective. In addition, the Trustees
believe that the limitations on the Trust's investment practices and activities
set forth in Article VI are no longer practical and are uncommon in the
organizational documents of REITs today. For example, the prohibition in Article
VI against issuing securities of the Trust that are redeemable at the option of
the holders thereof denies the Trust flexibility in raising capital or in
implementing possible acquisitions, the terms of which might be enhanced through
a redemption feature. Similarly, the limitation in Article VI on the granting of
options or warrants having an exercise price less than the fair market value of
the Shares on the date of grant, or which are exercisable for periods exceeding
five years, may unnecessarily restrict the Trust's ability to engage in certain
transactions, including acquisitions and employment arrangements with key
personnel that may be favorable to and in the best interests of the
shareholders. The Trustees believe that determinations as to the appropriateness
of restrictions and limitations on investment practices and activities otherwise
consistent with the Trust's general policy objective should be made on a
case-by-case basis by the Trustees in light of the circumstances then existing.
Accordingly, the Trustees have proposed (i) amending Section 2.1 of Article
II of the Declaration of Trust to provide that to achieve the general policy
objective of the Trust, the Trustees intend to invest the assets of the Trust in
mortgage loans and land purchase-leasebacks, including those with equity
enhancements, multifamily apartment properties and other real estate properties
and investments which offer the potential to achieve such objective and (ii)
eliminating Article VI of the Declaration of Trust.
RISKS OF ELIMINATING INVESTMENT RESTRICTIONS
If the Investment Policies Amendment is approved by the shareholders, the
investment and financing policies of the Trust and its policies with respect to
all other transactions, including acquisitions, financing, growth, debt,
capitalization and distributions, will no longer be subject to any of the
restrictions and limitations set forth in Article VI of the Declaration of
Trust. Such policies may be amended or revised at any time and from time to
time at the discretion of the Trustees without a vote of the shareholders of
the Trust and without regard to such restrictions and limitations. Accordingly,
shareholders will have no control over changes in these policies, including
changes that could adversely affect the Trust's financial condition, results of
operations or the market price of the Shares. In particular, if the Investment
Policies Amendment is approved by the shareholders, there will be no limitation
on the amount of indebtedness that the Trust may incur. Therefore, the Trust
could become highly leveraged, resulting in an increase in debt service that
could adversely affect the Trust's funds from operations and, consequently, the
amount available for distribution to shareholders.
VOTE REQUIRED FOR APPROVAL
Section 9.3 of the Declaration of Trust provides that the Declaration of
Trust may be amended by the vote of the holders of a majority of the outstanding
Shares entitled to vote thereon.
THE BOARD OF TRUSTEES OF THE TRUST HAS APPROVED THE INVESTMENT POLICIES
AMENDMENT AND RECOMMENDS THAT THE TRUST'S SHAREHOLDERS VOTE FOR THE APPROVAL OF
THE INVESTMENT POLICIES AMENDMENT.
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
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 of beneficial interest as of May 20, 1996 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.
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Shares
Trustees, Executive Officers Beneficially Percent of
and 5% Shareholders Owned(1) Class(2)
- - ---------------------------- ------------ ----------
Vinings Investment Properties, Inc.............. 6,337,279(3) 73.3%
3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
Financial & Investment Management Group, Ltd. .. 594,800(4) 6.9%
Paul H. Sutherland, CFP, President
417 St. Joseph Street
P.O. Box 40
Suttons Bay, MI 49682
Peter D. Anzo................................... - (5) -
Martin H. Petersen.............................. - (6) -
Stephanie A. Reed............................... - (7) -
Gilbert H. Watts, Jr. .......................... - (8) -
Phill D. Greenblatt............................. - (9) -
Henry Hirsch.................................... - (10) -
All trustees and executive officers
as a group (6 persons)........................ - -
<FN>
- - --------------------------
* Less than 1%.
(1) Beneficial share ownership is determined pursuant to Rule 13d-3 under the
Exchange Act. 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 8,645,000 Shares of beneficial
interest outstanding as of May 20, 1996.
(3) Based on a Schedule 13D filed with the Commission on March 11, 1996,
Vinings Investment Properties, Inc. ("VIP") has sole dispositive and voting
power with respect to all such Shares.
(4) Based on a Schedule 13D filed with the Commission on November 22, 1995,
Financial & Investment Management Group, Ltd. and Paul H. Sutherland, CFP,
President, have shared dispositive power with respect to all such Shares
and Paul H. Sutherland beneficially owns less than 10,000 Shares.
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(5) Does not include Shares beneficially owned by VIP, of which Mr. Anzo is
President, Chief Executive Officer, a Director and a shareholder. Mr. Anzo
disclaims beneficial ownership of all such Shares. Individually, no
stockholder, director or officer of VIP is deemed to have or share voting
or dispositive power with respect to the Shares beneficially owned by VIP.
(6) Does not include Shares beneficially owned by VIP, of which Mr. Petersen is
Vice President, a Director and a shareholder. Mr. Petersen disclaims
beneficial ownership of all such Shares.
(7) Does not include Shares beneficially owned by VIP, of which Ms. Reed is
Treasurer, Director and a shareholder. Ms. Reed disclaims beneficial
ownership of all such Shares.
(8) Does not include Shares beneficially owned by VIP, of which Mr. Watts is a
Director and Watts Agent, L.P., of which Mr. Watts is Managing Partner, is
a stockholder. Mr. Watts disclaims beneficial ownership of all such Shares.
(9) Does not include Shares beneficially owned by VIP, of which Mr. Greenblatt
is a Director and a shareholder. Mr. Greenblatt disclaims beneficial
ownership of all such Shares.
(10) Does not include Shares beneficially owned by VIP, of which Mr. Hirsch is a
shareholder. Mr. Hirsch disclaims beneficial ownership of all such Shares.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Victor MacFarlane, a Trustee of the Trust during all of fiscal 1995, was
Managing Partner and Chief Executive Officer of MacFarlane Partners, L.P. (the
predecessor in a merger to GECIA), the former advisor to the Trust. During
fiscal 1995, the Trust paid the advisor a total of $253,152 for its services as
advisor to the Trust. In addition, subsequent to December 31, 1995 but prior to
the consummation of the Tender Offer, the Trust paid the advisor a total of
$333,461 in connection with services rendered.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The Trust's officers and Trustees and beneficial owners of more than 10% of
the Trust's Shares of beneficial interest are required under Section 16(a) of
the Exchange Act to file reports of ownership and changes in ownership with the
SEC. Copies of those reports must also be furnished to the Trust. Based solely
on a review of the copies of reports furnished to the Trust and written
representations that no other reports were required, the Trust believes that
during its 1995 fiscal year, no person who was a Trustee, officer or greater
than 10% beneficial owner of the Trust's Shares of beneficial interest failed to
file on a timely basis any report required by Section 16(a).
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MARKET VALUE
On May 21, 1996, the closing sale price of a Share of the Trust on The
Nasdaq SmallCap Market was $0.63.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1997 annual meeting
of shareholders of the Trust must be received by the Trust on or before
February 4, 1997 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 not made a decision as to the independent
certified public accountants to be selected as the auditors of the financial
statements of the Trust and its subsidiaries for its current year ending
December 31, 1996. The firm of Ernst & Young LLP served as the auditors of the
Trust for fiscal 1995. A member of such firm is expected to 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 the fiscal year ended December 31, 1995.
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.
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Exhibit A
---------
VININGS INVESTMENT PROPERTIES TRUST
AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED
DECLARATION OF TRUST
AMENDMENT NO. 2 (the "Amendment") to the Second Amended and Restated
Declaration of Trust of VININGS INVESTMENT PROPERTIES TRUST (the "Trust") dated
February 6, 1985, as amended (the "Declaration of Trust"), made at Atlanta,
Georgia this __ day of ________, 1996 by the Board of Trustees hereunder.
WHEREAS, Section 9.3 of the Declaration of Trust provides that the
Declaration of Trust may be amended by the vote or written consent of a majority
of the Trustees and of the holders of a majority of the outstanding shares of
beneficial interest of the Trust entitled to vote thereon;
WHEREAS, the Board of Trustees desires to amend the Declaration of Trust to
(i) authorize the Board of Trustees to combine outstanding shares of beneficial
interest of the Trust by way of reverse share split, (ii) provide that to
achieve the general policy objective of the Trust, the Trustees intend to invest
the assets of the Trust in multifamily apartment properties and other real
estate properties which offer the potential to achieve such objective, and (iii)
eliminate certain restrictions on the Trust's investment practices and
activities (collectively, the "Amendments");
WHEREAS, in accordance with Section 9.3 of the Declaration of Trust, the
Trustees have approved the Amendments pursuant to a unanimous written consent
dated May 22, 1996; and
WHEREAS, in accordance with Section 9.3 of the Declaration of Trust, the
Amendments have been approved at a meeting of stockholders held on ____________,
1996, by the holders of a majority of the outstanding shares of beneficial
interest of the Trust entitled to vote thereon;
NOW, THEREFORE, the undersigned, being all the Trustees of the Trust, do
hereby state:
1. Section 2.1 of the Declaration of Trust is hereby amended in its entirety
to read as follows (new language appearing in italics):
"2.1 GENERAL STATEMENT OF POLICY. It is the general policy of the
Trust that the Trustees invest the Trust Estate principally in investments
which will conserve and protect the Trust's invested capital, produce cash
distributions, and offer the potential for capital appreciation to be
realized upon the sale, refinancing or other disposition of such
investments. To achieve this objective, the Trustees intend to invest the
assets of the Trust in Mortgage Loans and Land Purchase-Leasebacks,
including those with equity enhancements, multifamily apartment properties
and other real estate properties and investments which offer the potential
to achieve such objective. The consideration paid for
A-1
20
Real Property acquired by the Trust shall ordinarily be based on the fair
market value of the property as determined by a majority of the Trustees.
In cases where a majority of the Unaffiliated Trustees so determine, such
fair market value shall be as determined by a qualified independent real
estate appraiser selected by the Trustees, including a majority of the
Unaffiliated Trustees. The Trustees, including a majority of the
Unaffiliated Trustees, shall at least annually review the investment
policies of the Trust to determine that the policies being followed by the
Trust are in the best interests of the Shareholders, and each such
determination and the basis therefor shall be set forth in the minutes of
meetings of the Trustees."
2. Article VI of the Declaration of Trust is hereby deleted in its entirety
and replaced with the following:
"ARTICLE VI - Intentionally Omitted"
3. Section 7.1 of the Declaration of Trust is hereby amended in its entirety
to read as follows (new language appearing in italics):
"7.1 SHARES. The beneficial interest in the Trust shall be divided
into transferable units of a single class, all of which are designated as
Shares, each without par value, and each Share shall (except as provided in
Section 7.12) be identical in all respects with every other Share. The
total number of Shares the Trust shall have authority to issue shall be
unlimited. The Shares may be issued for such consideration as the Trustees
shall determine, including upon the conversion of convertible debt, or by
way of share dividend or share split in the discretion of the Trustees. In
addition to the issuance of Shares by way of share dividend or share split,
the Trustees may combine outstanding Shares by way of reverse share split
and provide for the payment of cash in lieu of any fractional interest in a
combined Share; and the mechanics authorized by the Trustees to implement
any such combination shall be binding upon all Shareholders, holders of
convertible debt, optionees and others with any interest in Shares.
Outstanding Shares shall be transferable and assignable in like manner as
are shares of stock of a Massachusetts business corporation. Shares
reacquired by the Trust shall no longer be deemed outstanding and shall
have no voting or other rights unless and until reissued. Shares reacquired
by the Trust may be cancelled by action of the Trustees. All Shares shall
be fully paid and nonassessable by or on behalf of the Trust upon receipt
of full consideration for which they have been issued or without additional
consideration if issued by way of share dividend, share split or
combination by way of reverse share split or upon the conversion of
convertible debt. The Shares shall not entitle the holder to preference,
preemptive, conversion, or exchange rights of any kind, except as the
Trustees may specifically determine with respect to any Shares at the time
of issuance of such Shares and except as specifically provided by law."
4. This Amendment may executed in separate counterparts, each of which so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
A-2
21
5. Pursuant to Section 10.2 of the Declaration of Trust, a copy of this
Amendment shall be filed with the Secretary of The Commonwealth of Massachusetts
and with the Boston City Clerk.
A-3
22
EXECUTED as of the __ day of _________, 1996.
TRUSTEES
------------------------------
Peter D. Anzo
------------------------------
Martin H. Petersen
------------------------------
Stephanie A. Reed
------------------------------
Gilbert H. Watts, Jr.
------------------------------
Phill D. Greenblatt
------------------------------
Henry Hirsch
23
Exhibit B
---------
A. Full Text of Section 2.1 of Article II of the Declaration of Trust
------------------------------------------------------------------
ARTICLE II - INVESTMENT POLICY
2.1 GENERAL STATEMENT OF POLICY. It is the general policy of the Trust that
the Trustees invest the Trust Estate principally in investments which will
conserve and protect the Trust's invested capital, produce cash distributions,
and offer the potential for capital appreciation to be realized upon the sale,
refinancing or other disposition of such investments. To achieve this objective
the Trustees intend to invest the assets of the Trust in Mortgage Loans and Land
Purchase-Leasebacks, including those with equity enhancements, and other real
estate investments which offer the potential to achieve such objective. The
consideration paid for Real Property acquired by the Trust shall ordinarily be
based on the fair market value of the property as determined by a majority of
the Trustees. In cases where a majority of the Unaffiliated Trustees so
determine, such fair market value shall be as determined by a qualified
independent real estate appraiser selected by the Trustees, including a majority
of the Unaffiliated Trustees. The Trustees, including a majority of the
Unaffiliated Trustees, shall at least annually review the investment policies of
the Trust to determine that the policies being followed by the Trust are in the
best interests of the Shareholders, and each such determination and the basis
therefor shall be set forth in the minutes of meetings of the Trustees.
B. Full Text of Article VI of the Declaration of Trust
---------------------------------------------------
ARTICLE VI - PROHIBITED ACTIVITIES
6.1 PROHIBITED INVESTMENTS AND ACTIVITIES. The Trust shall not engage in
any of the following investment practices or activities:
6.1.1 Invest in any Junior Mortgage Loan unless (a) the capital
invested in such mortgage loan is adequately secured on the basis of the
equity of the borrower in the property underlying such investment and the
ability of the borrower to repay the mortgage loan, (b) the total amount of
a Junior Mortgage Loan which, taken together with all other Indebtedness
secured by the underlying Real Property, does not exceed 100% of the value
of the security therefor, (c) the total amount of a Junior Mortgage Loan
which, taken together with all other Indebtedness secured by the underlying
Real Property and senior or pari passu to that held by the Trust, does not
exceed 90% of the value of the security therefor, (d) the senior mortgage
is held by a person other than the Adviser or one of its Affiliates, and
(e) total Junior Mortgage Loans will not exceed 25% of the Trust's assets.
B-5
24
6.1.2 Invest in commodities, or in commodity future contracts or
effect short sales of commodities or Securities. Such limitation is not
intended to apply to investments in interest rate futures or short sales,
when used solely for hedging purposes.
6.1.3 Invest more than 1% of its Total Assets in contracts for the
sale of Real Property, unless such contracts are recordable in the chain of
title.
6.1.4 Issue Securities redeemable at the option of the holders
thereof.
6.1.5 Grant options or warrants to purchase Shares at an exercise
price, or for consideration which consists of services or is otherwise than
for cash, that in the judgment of the Trustees (including a majority of the
Unaffiliated Trustees in the case of the grant of any option or warrant to
the Adviser or to any officer, director or employee of the Adviser or of
the Trust) is less than the fair market value of such Shares on the date of
grant, or which may be exercisable for a period in excess of 5 years from
the date of grant, or which are for a number of Shares that (when added to
the number of other Shares exercisable pursuant to all then outstanding
options and warrants) is in excess of 9.8% of the number of Shares on the
date of grant. Warrants, options or Share purchase rights that are issued
ratably to the holders of all Shares or another class of Securities, or as
part of a financing arrangement are not prohibited by, or to be included
within the limitations of, the preceding sentence of this Section 6.1.5.
6.1.6 Engage in underwriting or the agency distribution of Securities
issued by others.
6.1.7 Invest more than 10% of Total Assets in Unimproved Real
Property, or Mortgage Loans on Unimproved Real Property.
6.1.8 Engage in trading, as compared with investment, activities.
6.1.9 Allow the aggregate borrowings of the Trust, secured and
unsecured, to exceed 100% of the Net Assets of the Trust, in the absence of
a determination by the Trustees (including a majority of the Unaffiliated
Trustees) that a higher level of borrowing is appropriate and in the
interest of the Trust; provided, however, that no higher level of borrowing
shall be made which if unsecured exceeds the limit provided in Section
6.1.10 or if secured exceeds 300% of the net asset value of the property
securing such borrowing as determined by the lender. Any borrowing in
excess of such 100% level shall be disclosed to the Shareholders in the
next quarterly report of the Trust.
6.1.10 Make any unsecured borrowing if such borrowing will result in
an asset coverage of less than 300% unless at the time of borrowing at
least 80% of the Trust's Total Assets consist of First Mortgage Loans.
"Asset coverage" for the purpose of this Section 6.1.10 means the ratio
which the Trust's Total Assets, less all liabilities other than
Indebtedness for unsecured borrowings, bears to the aggregate amount of all
unsecured borrowings of the Trust.
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6.1.11 Acquire Securities in any company holding investments or
engaging in activities prohibited by this Section 6.1.
6.1.12 Pay fees and costs associated with (i) the organization of the
Trust, (ii) the sale of its Shares pursuant to its initial public offering
of Shares and (iii) the acquisition (including brokerage expenses) of
investments with the proceeds of such initial public offering, if the
aggregate amount for all such fees and costs covered by (i), (ii) and (iii)
exceed 20% of the gross selling price of such Shares in such initial public
offering; or pay fees of the type described in Section IV, Subdivisions F,
G, H and I of the North American Securities Administrators Association's
Statement of Policy regarding Real Estate Programs effective July 1, 1984
in amounts exceeding the limitations set forth in such Subdivisions.
6.1.13 Issue debt securities unless the historical debt service
coverage (in the most recently completed fiscal year) as adjusted for known
changes is sufficient to properly service that higher level of debt.
6.2 OBLIGOR'S DEFAULT. Notwithstanding any provision in any Article of
this Declaration, when an obligor to the Trust is in default under the terms of
any obligation to the Trust, the Trustees shall have the power to pursue any
remedies permitted by law which in their sole judgment are in the interest of
the Trust and the Trustees shall have the power to enter into any necessary
investment, commitment or obligation of the Trust resulting from the pursuit of
such remedies that are necessary or desirable to dispose of property acquired in
the pursuit of such remedies.
6.3 PERCENTAGE DETERMINATIONS. Whenever standards contained in this Article
VI are expressed in terms of a percentage, whether of value, Total Assets, cost
or otherwise, such percentage shall be determined at the time of the issuance of
a commitment by the Trust for a transaction covered by such standard hereunder.
C. Full Text of Section 7.1 of Article VII of the Declaration of Trust
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7.1 SHARES. The beneficial interest in the Trust shall be divided into
transferable units of a single class, all of which are designated as Shares,
each without par value, and each Share shall (except as provided in Section
7.12) be identical in all respects with every other Share. The total number of
Shares the Trust shall have authority to issue shall be unlimited. The Shares
may be issued for such consideration as the Trustees shall determine, including
upon the conversion of convertible debt, or by way of share dividend or share
split in the discretion of the Trustees. Outstanding Shares shall be
transferable and assignable in like manner as are shares of stock of a
Massachusetts business corporation. Shares reacquired by the Trust shall no
longer be deemed outstanding and shall have no voting or other rights unless and
until reissued. Shares reacquired by the Trust may be cancelled by action of the
Trustees. All Shares shall be fully paid and nonassessable by or on behalf of
the Trust upon receipt of full consideration for which they have been issued or
without additional consideration if issued by way of share dividend, share
split, or upon the conversion of convertible debt. The Shares shall not entitle
the holder to preference,
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26
preemptive, conversion, or exchange rights of any kind, except as the Trustees
may specifically determine with respect to any Shares at the time of issuance of
such Shares and except as specifically provided by law.
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27
VININGS INVESTMENT PROPERTIES TRUST
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 25, 1996
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 May 8, 1996, at the
Annual Meeting of Shareholders (the "Annual Meeting") of the Trust to be held at
Cobb Galleria Centre, Two Galleria Parkway, Atlanta, GA 30339, at 10:00 a.m.
Eastern Time, on Tuesday, June 25, 1996, 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 SIX NOMINEES FOR TRUSTEES SET FORTH IN PROPOSAL
1 AND "FOR" THE AMENDMENTS TO THE TRUST'S DECLARATION OF TRUST SET FORTH IN
PROPOSAL 2 AND PROPOSAL 3. 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.
28
/X/ PLEASE MARK
VOTE AS IN THIS EXAMPLE
PROPOSAL 1. Proposal to elect six Trustees, each to serve for a
one-year term and until the election and qualification of his or her successor.
NOMINEES: Peter D. Anzo, Martin H. Petersen, Stephanie A. Reed,
Gilbert H. Watts, Jr., Phill D. Greenblatt and Henry Hirsch
FOR / / WITHHOLD / / 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. Proposal to amend the Trust's Declaration of Trust to
authorize the Board of Trustees to combine outstanding shares of the Trust by
way of reverse share split, as described in the Proxy Statement.
FOR / / AGAINST / / ABSTAIN / /
PROPOSAL 3. Proposal to amend the Trust's Declaration of Trust to
eliminate certain investment restrictions on the Trust's investment practices
and activities and to provide that to achieve the general policy objective of
the Trust, the Trustees intend to invest the assets of the Trust in multifamily
apartment properties and other real estate properties which offer the potential
to achieve such objective, as described in the Proxy Statement.
FOR / / AGAINST / / ABSTAIN / /
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.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY
DATE:
--------------------------
SIGNATURE(S):
--------------------------
--------------------------
CHANGE OF
--------------------------
ADDRESS?
--------------------------
--------------------------
29
APPENDIX
Description of Graphic Appearing on Page 3
[Organizational structure diagram showing proposed Operating Partnership
structure: Vinings Investment Properties Trust having a 1% general partner
interest and a 98% limited partner interest in the Operating Partnership and a
wholly owned corporate subsidiary of the Trust having a 1% limited partner
interest in the Operating Partnership.]