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SCHEDULE 14A
(RULE 14A)
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:
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
LNH REIT, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
LNH REIT, INC.
(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 Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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 (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:
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LNH REIT, INC.
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 31, 1995
To the holders of Shares:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of LNH REIT,
Inc. (the "Company") will be held at the Company's offices, 300 One Jackson
Place, 188 East Capitol Street, Jackson, Mississippi, on Wednesday, May 31,
1995, at 9:00 a.m., Jackson time, for the following purposes:
1. To elect four directors.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The directors have fixed the close of business on April 17, 1995 as the
record date for the determination of shareholders entitled to receive notice of
and to vote at the Annual Meeting.
The directors sincerely desire your presence at the meeting. However, so
that we may be sure your vote will be included, please sign and return the
enclosed proxy promptly. A self-addressed, postage-paid return envelope is
enclosed for your convenience.
The prompt return of your proxy will avoid delay and save the expense
involved in further communication. The proxy may be revoked by you at any time
prior to its exercise, and the giving of your proxy will not affect your right
to vote in person if you wish to attend the meeting.
By Order of the Board of Directors
N. KEITH MCKEY
Senior Vice-President, Chief Financial
Officer and Assistant Secretary
DATED: April 27, 1995
SHAREHOLDERS ARE URGED TO VOTE BY SIGNING, DATING AND RETURNING THE ENCLOSED
PROXY IN THE ENCLOSED ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
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April 27, 1995
LNH REIT, INC.
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 31, 1995
The following information is furnished in connection with the Annual
Meeting of Shareholders of LNH REIT, Inc. (the "Company") to be held at the
Company's offices, 300 One Jackson Place, 188 East Capitol Street, Jackson,
Mississippi, on Wednesday, May 31, 1995, at 9:00 a.m., Jackson time. A copy of
the Company's Annual Report to Shareholders for the fiscal year ended December
31, 1994 accompanies this Proxy Statement. Additional copies of the Annual
Report, Notice, Proxy Statement and form of proxy may be obtained from the
Company's Secretary, P.O. Box 22728, Jackson, Mississippi 39225-2728. This Proxy
Statement will first be sent to shareholders on or about April 27, 1995.
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy for the Annual Meeting of Shareholders is being
solicited by the directors of the Company. Any person giving a proxy may revoke
it any time prior to the exercise thereof by filing with the Secretary of the
Company a written revocation or duly executed proxy bearing a later date. The
proxy may also be revoked by a shareholder attending the meeting, withdrawing
the proxy and voting in person.
The cost of soliciting the proxies on the enclosed form will be paid by the
Company. In addition to the use of the mails, proxies may be solicited by the
directors and their agents (who will receive no additional compensation
therefor) by means of personal interview, telephone or facsimile, and it is
anticipated that banks, brokerage houses and other institutions, nominees or
fiduciaries will be requested to forward the soliciting material to their
principals and to obtain authorization for the execution of proxies. The Company
may, upon request, reimburse banks, brokerage houses and other institutions,
nominees and fiduciaries for their expenses in forwarding proxy material to
their principals.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The record date for determining Shares of Common Stock of the Company
("Shares") entitled to vote at the Annual Meeting has been fixed at the close of
business on April 17, 1995. On such date there were 2,200,000 Shares
outstanding, entitled to one vote each.
The presence, in person or by properly executed proxy, of the holders of
Shares entitled to cast a majority of the votes entitled to be cast by the
holders of all outstanding Shares is necessary to constitute a quorum. Shares
represented by a properly signed, dated and returned proxy will be treated as
present at the meeting for purposes of determining a quorum. Proxies relating to
"street name" Shares that are voted by brokers will be
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counted as Shares present for purposes of determining the presence of a quorum,
but will not be treated as Shares having voted at the Meeting as to any proposal
as to which the broker does not vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the best of the Company's knowledge, no person or group (as those terms
are used in Section 13(d)(3) of the Securities Exchange Act of 1934) owned
beneficially, as of April 3, 1995, more than 5% of the outstanding Shares except
for the persons named in the following table.
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------------ ----------------- --------
EastGroup Properties...................................... 515,200(1) 23.42%
300 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Cardinal Portfolios Company and others.................... 139,600(2) 6.35%
500 Crescent Court
Suite 250
Dallas, Texas 75201
Dimensional Fund Advisors Inc. ........................... 139,100(3) 6.32%
1299 Ocean Avenue, Suite 650
Santa Monica, California 90401
Spiritas, Inc............................................. 110,800(1) 5.04%
5219 Second Avenue
Dallas, Texas 75210
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(1) Based on a Schedule 13D filed with the Securities and Exchange Commission.
(2) Based upon an amended Schedule 13D filed with the Securities and Exchange
Commission by Cardinal Portfolios Company ("Cardinal") and certain
individuals and entities that have business and personal relationships with
the principals of Cardinal.
(3) As disclosed in a filing with the Securities and Exchange Commission on
Schedule 13G by Dimensional Fund Advisors Inc., as registered investment
advisor, dated February 11, 1992, Dimensional Fund Advisors Inc. is deemed
to have beneficial ownership of 139,100 Shares, all of which Shares are held
in portfolios of DFA Investment Dimensions Group, Inc., a registered open
end investment company, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional serves as investment manager. Dimensional disclaims
beneficial ownership of all such Shares.
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the Shares beneficially owned to the best of
the Company's knowledge, as of January 18, 1995, by each director, nominee for
election as a director and by the directors and officers of the Company as a
group. Unless otherwise stated, each person has sole voting and investment power
with respect to the Shares set forth in the table.
NUMBER OF SHARES PERCENTAGE
BENEFICIALLY OF SHARES
NAME OWNED OUTSTANDING
------ ---------------- -----------
H.C. Bailey, Jr. ...................................... -0- --%
James H. Daughdrill, III............................... 500 .02
Robert Ted Enloe, III.................................. -0- --
George F. Farish....................................... -0- --
Leander W. Jennings.................................... 1,000 .05
Goodhue W. Smith, III.................................. 13,000(1) .59
Leland R. Speed........................................ -0- --
All officers and directors as a group.................. 14,500 .66
<FN>
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(1) Includes 11,500 Shares owned by a pension trust of which Mr. Smith is a
trustee and beneficiary.
1. ELECTION OF DIRECTORS
NOMINEES
The four positions on the Board of Directors are to be filled by the vote
of the shareholders at the Annual Meeting. Each person so elected shall serve
until the Company's next Annual Meeting and until his successor is elected and
qualified. Three of the Company's directors -- James H. Daughdrill, III, Leander
W. Jennings and Goodhue W. Smith, III -- have elected not to stand for
re-election. As a result, the Board has decided to reduce the number of Board
members from seven to four.
The directors recommend a vote FOR the four nominees listed below. Except
where authority to do so has been withheld, it is the intention of the persons
named in the accompanying form of proxy to vote at the Annual Meeting FOR these
nominees. The affirmative vote of a plurality of the Shares present at the
meeting is necessary for the election of a director.
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Although the directors do not contemplate that any of the nominees listed
below will be unable to serve, if such a situation arises prior to the meeting,
the enclosed proxy will be voted in accordance with the best judgment of the
person or persons voting the proxy.
NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS(1)
----------------------- --- ---------------------------------
H.C. Bailey, Jr. ............ 55 President of H.C. Bailey Company (real estate
Director since 1992 development and investment); President of Bailey
Mortgage Company (mortgage banking) and Chairman of
the Board and Chief Executive Officer and President of
Security Savings & Loan Association(2) until 1992.
Robert Ted Enloe, III........ 56 President of Liberte Investors; President of the
Director since 1981 Company until 1992; Director and President of Lomas
Financial Corporation from 1975 to 1992.
George R. Farish............. 42 President of Houston Savings Association since 1985.
Director since 1992
Leland R. Speed.............. 62 Chief Executive Officer of EastGroup Properties, The
Director since 1991 and Parkway Company, EB, Inc. and the Company; served as
President since 1992 Chief Executive Officer of Eastover Corporation,
Congress Street Properties, Inc., and Rockwood
National Corporation until 1994.
<FN>
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(1) Unless otherwise stated, each nominee has held the positions indicated for
at least the past five years.
(2) Security Savings & Loan Association was placed in receivership by the
Resolution Trust Corporation in 1992.
OTHER DIRECTORSHIPS AND TRUSTEESHIPS
Nominees to the Board of Directors serve on the Boards of Directors or the
Boards of Trustees of the following publicly-held companies:
NOMINEE COMPANY
--------- ---------
H.C. Bailey, Jr.............................. EastGroup Properties
EB, Inc.
The Parkway Company
Robert Ted Enloe, III........................ Compaq Computer Corporation
Leggett & Platt, Inc.
Liberte Investors
Sixx Holdings, Inc.
Epikon Corporation
George R. Farish............................. The Parkway Company
Leland R. Speed.............................. EastGroup Properties
EB, Inc.
Farm Fish, Inc.
First Mississippi Corporation
The Parkway Company
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COMMITTEES AND MEETING DATA
The Audit Committee of the Board of Directors consists of Messrs. Jennings,
Farish and Enloe. The Audit Committee met one time during the Company's 1994
fiscal year. The functions performed by this committee consist principally of
conferring with and reviewing the reports of the Company's independent
accountants and bringing to the entire Board of Directors for review those items
relating to audits or to accounting practices which the Audit Committee believes
merit such review.
The Company does not have a standing nominating committee or any committee
performing a similar function.
The Board of Directors held five meetings during the Company's 1994 fiscal
year. Each director attended at least 75% of the aggregate of the total number
of meetings of the Board of Directors and the total number of meetings held by
all committees of the Board on which he served.
EXECUTIVE OFFICERS
The following is a list of the Company's executive officers.
NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS(1)
----------------------- --- ---------------------------------
James H. Daughdrill, III.................. 39 Chief operating officer of The Walker
Chairman of the Board since 1991 Companies (privately held diversified
investment company) since 1991; Vice
President of Goldman, Sachs & Co.
(investment banking firm) until 1991.
Leland R. Speed........................... 62 See Table under "Nominees."
Director since 1991 and President since
1992
David H. Hoster II........................ 49 President of EastGroup Properties since
Executive Vice President since 1992 1993 and Executive Vice President of
EastGroup Properties until 1993; Executive
Vice President of the Company since 1992;
Executive Vice President of Congress
Street Properties, Inc., Eastover
Corporation, EB, Inc., The Parkway Company
and Rockwood National Corporation until
1994.
Steven G. Rogers.......................... 40 President of The Parkway Company since
Senior Vice President since 1992 1993 and Senior Vice President of The
Parkway Company until 1993; Senior Vice
President of the Company since 1992;
Senior Vice President of Congress Street
Properties, Inc., Eastover Corporation,
EastGroup Properties and Rockwood National
Corporation until 1994 and EB, Inc. from
1993 to 1995.
N. Keith McKey............................ 44 Executive Vice President of EastGroup
Senior Vice President and Chief Properties since 1993 and Chief Financial
Financial Officer since 1992 Officer since 1992; Senior Vice President
of the Company since 1992; Senior Vice
President of Congress Street Properties,
Inc., Eastover Corporation, EB, Inc., The
Parkway Company and Rockwood National
Corporation until 1994.
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NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS(1)
----------------------- --- ---------------------------------
O.B. Walton III........................... 41 Vice President and Chief Financial Officer
Secretary since 1992 of the Walker Companies (privately held
diversified investment company) since
1992; Senior Vice President and Secretary
of the Expense-Sharing Participants
(described below) from 1989 to 1992.
<FN>
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There are no family relationships between any of the directors or executive
officers of the Company.
Incentive Compensation Plan. The officers of the Company receive no salary
for the services they render to the Company. See "Management Agreement." The
Board of Directors has adopted, however, an Incentive Compensation Plan
effective October 1, 1993 (the "Plan") pursuant to which Incentive Compensation
Units with respect to 80,000 shares ("ICUs") have been granted to certain
executive officers of the Company. An ICU is the right to receive the following
payments: (i) per Share regular dividends paid to shareholders of the Company;
and (ii) the amount by which cumulative per Share special dividends (a dividend
that is not a regular dividend, as determined by the "Committee" described
below) exceeds the fair market value of a Share on the date the ICU is granted
($9.00 with respect to all outstanding ICUs).
The Plan also provides for payments to holders of ICUs in the event of a
major corporate transaction. In the event (i) a person makes a tender offer or
other offer for all of the Company's outstanding Shares, (ii) the Board of
Directors recommends that the Company's shareholders accept such offer, and
(iii) as a result of such offer that person becomes the beneficial owner (as
defined under Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
of 80% or more of the Company's outstanding Shares, the Company shall pay the
grantee of an ICU the amount by which (iv) the per Share amount paid to
shareholders pursuant to the offer plus the per Share special dividends paid to
the Company's shareholders after the date of grant is greater than (v) the fair
market value of a Share on the date of grant of the ICU. If the Company enters
into a merger with another person pursuant to which the Company is not the
surviving corporation, the Company shall pay the grantee of an ICU the amount by
which (i) the fair market value of the per Share consideration paid to
shareholders pursuant to the merger plus cumulative per Share special dividends
paid to the Company's shareholders after the date of the grant of the ICU exceed
(ii) the fair market value of a Share on the date of grant of the ICU. The fair
market value of the consideration paid in the merger, if such consideration is
not cash, shall be determined by the Committee.
The Plan is administered by a committee (the "Committee") of not less than
three directors. None of such directors shall be or shall have been for one year
eligible for selection as a grantee under the Plan. ICUs will terminate (i) when
the grantee ceases to be an officer of the Company or (ii) in the event
EastGroup Properties disposes of all of its Shares in a transaction in which the
other shareholders of the Company do not have an opportunity to sell their
Shares.
During the year ended December 31, 1994, the Company made payments of
$9,660, $8,280, $8,280 and $8,280 to Messrs. Speed, Hoster, McKey and Rogers,
respectively, pursuant to ICUs.
DIRECTORS' FEES
Under the Company's standard compensation arrangements with directors,
directors are paid a quarterly stipend of $1,250, plus $500 and reimbursement of
actual expenses for attendance at each meeting of the
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Board or of a committee established by the Board. Only one fee is paid in the
event that more than one meeting is held on a single day.
MANAGEMENT AGREEMENT
The Company has no salaried employees; its officers are elected by the
Board of Directors solely to facilitate the execution of commitments and other
obligations on behalf of the Company. Except for payments under the ICUs
described above, none of the officers of the Company receives any remuneration
from the Company in his capacity as an officer of the Company. The Manager
(described below) provides all executive and administrative personnel, office
space, and general services required by the Company.
Management services to the Company are rendered by the Manager under a
Management Agreement. Until April 3, 1995, the Manager, pursuant to the
Management Agreement, was LNH REIT Managers, a Mississippi general partnership
in which Walker Managers, L.P. ("Walker") and EGP Managers, Inc. ("EGP
Managers"), a wholly-owned subsidiary of EastGroup, were equal partners. In
connection with EastGroup's purchase of Shares from affiliates of Walker, EGP
Managers purchased Walker's one-half interest in LNH REIT Managers, and EGP
Managers replaced LNH REIT Managers as Manager under the Management Agreement.
As compensation for its activities, the Manager is entitled to receive a basic
annual fee (the "Basic Fee"), payable in monthly installments, equal to the sum
of 1.25% of the first $100,000,000 or portion thereof of the Company's Invested
Assets (as defined in the Management Agreement), 1.125% of the second
$100,000,000 or portion thereof, 1.00% of the third $100,000,000 or portion
thereof, .875% of the fourth $100,000,000 or portion thereof and .75% of the
portion (if any) of Invested Assets exceeding $400,000,000.
The Manager may also receive incentive compensation equal to the excess, if
any, of (i) the Average Annual Incentive Fee (as defined below) for the period
from May 26, 1981 (the date on which the Company received the net proceeds of
the public offering of its Common Stock), to the end of any fiscal year,
multiplied by the number of 12-month fiscal years and fractions thereof in such
period, over (ii) the aggregate amount of incentive fee, if any, earned by the
Manager in prior years. The "Average Annual Incentive Fee" at the end of any
fiscal year will be equal to the sum of:
(i) 10% of the amount by which the Average Annual Net Profit (as
defined in the Management Agreement) from May 26, 1981, to such time
exceeds 12% of the Average Net Worth (as defined in the Management
Agreement) for such period; and
(ii) 5% of the amount by which the Average Annual Net Profit from May
26, 1981, to such time exceeds 17% of the Average Net Worth for such
period; and
(iii) 5% of the amount by which the Average Annual Net Profit from May
26, 1981, to such time exceeds 22% of the Average Net Worth for such
period.
During the year ended December 31, 1994, the Company paid Management Fees
of $338,000. The Manager did not receive incentive compensation in the fiscal
year ended December 31, 1994, and is not expected to receive incentive
compensation in the current fiscal year. Effective July 1, 1994, the Manager
agreed to amend the Management Agreement to provide that the Management Fee paid
by the Company will not exceed $29,167 per month.
ADMINISTRATION AGREEMENT
Description of Agreement. Effective April 22, 1992, LNH REIT Managers
entered into an administration agreement (the "Administration Agreement") with
Congress Street Properties, Inc. ("Congress
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Street"). In connection with the termination of the Expense-Sharing Agreement
described below, EastGroup Properties ("EastGroup") assumed Congress Street's
duties under the Administration Agreement. The Administration Agreement was
terminated effective March 31, 1995, but the Company and EGP Managers have
agreed to continue the guidelines set forth below which are intended to prevent
conflicts of interest or deal with them on an equitable basis. Under the
Administration Agreement, Congress Street (and later EastGroup) administered the
day-to-day business of the Company in return for a $125,000 annual fee, payable
by the Manager. Congress Street and certain other affiliated companies described
below participated in an expense-sharing agreement (the participants in the
expense-sharing agreement and certain other affiliated companies are
collectively referred to as the "Expense-Sharing Participants") whereby
administrative offices for the participating companies were maintained in
Congress Street's office in Jackson, Mississippi and officers of Congress Street
also served as officers of the other participating companies, subject to the
authority of the Board of each participant to elect or appoint and remove its
officers in accordance with its certificate of incorporation, declaration of
trust or other charter documents and applicable law.
Because conflicts of interest may arise from the management of the
companies' assets by common officers, the EGP Managers and the Company have
agreed to the following guidelines to prevent such conflicts of interest or to
deal with them on an equitable basis (these guidelines are contained in the
Administration Agreement).
(1) In the event that its officers submit and recommend to the Board of any
company the proposed acquisition of any property or security, the officers of
that company shall cause the same opportunity to be presented to the Boards of
each of the other companies. If two or more of the companies determine to
participate in the transaction, the provisions of subparagraph (3) will govern.
Notwithstanding the foregoing provisions an investing company need not present
an investment opportunity to another company if it proposes to purchase
securities issued by it or if, in the good faith judgment of the common officers
of the investing company and the other company, the investment opportunity
involves the acquisition of (i) an investment which, in the good faith judgment
of the common officers, is one in which the company would not invest because it
does not come within that company's Investment Strategy (as defined below), (ii)
property in which the investing company has an existing ownership or other type
of interest and the latter company has none, or (iii) securities of an issuer in
which the investing company has an existing investment and the latter Company
has none. Whenever any company authorizes the sale, transfer or modification of
its interest in a property or of its holdings of securities of an issuer, it
shall so inform the Board of each company which also has an interest in that
property or which owns securities of that issuer; unless impractical to do so,
that information shall be given to the Board of the latter company at the next
scheduled meeting of the Board of the latter company. If the Board of the latter
company authorizes similar action, the provisions of subparagraph (3) will
govern.
(2) No company will sell any property or security, or purchase any property
or security from, any other company unless that sale or purchase is approved and
determined to be fair to each company in the transaction by a majority of the
trustees or directors of that company who are not affiliated as officers,
trustees, directors or controlling persons of any other company in the
transaction.
(3) Whenever two or more of the companies shall concurrently undertake to
acquire or dispose of interests in the same property or in the same class of
securities under circumstances in which it appears likely that the price or
other consideration to be paid or received will not be equal for all property or
securities to be acquired or disposed of in a single transaction, the property
or securities will be acquired or disposed of in such a manner that, as nearly
as feasible, each company will participate in each transaction in proportion to
the total amount of such property or securities which its Board has determined
to acquire or dispose of until each
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company has acquired or disposed of the total amount of that property or class
of security which its Board had determined to acquire or dispose of. In the
event that the Boards have not determined in advance the total amount to be
acquired or disposed of or the participating companies desire in the aggregate
to acquire more than is available, the participation of each company in each
transaction will be proportionate to its total assets as shown on its balance
sheet as at the close of its quarterly fiscal period ended on or prior to the
date of that transaction, or if that balance sheet is not available, as at the
close of the latest quarterly fiscal period for which a balance sheet is
available. The provisions of this subparagraph may be modified with respect to a
particular transaction by the Board of each company if it appears that such
modification is required in the interests of fairness, but any such modification
must be approved by majorities of the trustees or directors of each company
participating in the transaction, including a majority of the trustees or
directors of each participating company who are not officers, trustees,
directors or controlling persons of any other company participating in the
transaction.
(4) Each company shall from time to time provide each of the other
companies with a statement approved by that company's Board of Directors or
Trustees setting forth that company's present strategy with respect to
acquisition of additional property or other investments, describing the type of
assets which that company desires to purchase, that company's financial and
other objectives with respect to investments, the types of assets in which that
company does not wish to invest, and any other factors deemed appropriate by the
company's Board of Directors or Trustees (the "Investment Strategy"). A company
may change its Investment Strategy by giving notice to the other companies, and
such change shall take effect 30 days after the date of the notice.
Background of Participants. The participants other than the Company and
the dates they began participating in the expense-sharing arrangement are as
follows: EastGroup, since 1983; Congress Street, a former Delaware corporation
engaged in the real estate business which merged with a wholly-owned subsidiary
of The Parkway Company ("Parkway"), a Texas corporation engaged in the real
estate business, on November 29, 1994, since 1984; Parkway, since 1983; Eastover
Corporation ("Eastover"), a former Louisiana real estate investment trust which
merged with a wholly-owned subsidiary of EastGroup on December 22, 1994, since
1979; EB, a Mississippi corporation, since 1993.
Termination of Arrangements. In connection with the business combinations
involving the Expense-Sharing Participants (i.e., Congress Street merged with a
wholly-owned subsidiary of Parkway on November 29, 1994, EB is combining with
Parkway and Eastover combined with EastGroup on December 22, 1994), the above
described expense-sharing arrangements terminated on December 31, 1994. Since
that date, EastGroup and Parkway each have their own respective officers and
employees, who do not serve as officers or employees of the other company,
except for Leland R. Speed, who continues to serve as the Chief Executive
Officer of both companies, and a small number of clerical and support staff
employees. The officers of EastGroup continue to serve as officers of the
Company; in addition, the President of Parkway -- Steven G. Rogers -- continues
to serve as an officer of the Company. David H. Hoster II and N. Keith McKey,
who formerly served as officers of all the Expense-Sharing Participants, now
serve as officers of EastGroup and the Company and not Parkway.
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INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has not yet appointed auditors for the fiscal year
ending December 31, 1995. Ernst & Young, LLP has been the Company's independent
auditors for several years. A representative of Ernst & Young, LLP is expected
to be present at the Annual Meeting and will have an opportunity to make a
statement, if he so desires, and will be available to respond to appropriate
questions.
OTHER MATTERS
The directors know of no business to be brought before the Annual Meeting
other than as set forth above. If, however, any other business should properly
come before the meeting, it is the intention of the persons named in the
enclosed form of proxy to vote such proxies in accordance with their best
judgment on such matters.
SHAREHOLDER PROPOSALS FOR THE 1996
ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals must be received by the Company at its office at 300
One Jackson Place, 188 East Capitol Street, Jackson, Mississippi 39201 no later
than December 27, 1995, in order to be considered for inclusion in the Company's
proxy materials for the 1996 Annual Meeting of Shareholders.
By Order of the Board of Directors
N. KEITH MCKEY
Senior Vice-President, Chief Financial
Officer and Assistant Secretary
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LNH REIT, INC. THIS PROXY IS SOLICITED ON BEHALF
300 One Jackson Place OF THE BOARD OF DIRECTORS
188 East Capitol Street
P Jackson, Mississippi 39201
The undersigned hereby appoints LELAND R. SPEED and H. C. BAILEY,
R JR., and each or either of them, Proxies for the undersigned, with
full power of substitution, to vote all shares of Common Stock, of
LNH REIT, Inc. (the "Company") which the undersigned would be entitled
O to vote at the Annual Meeting of Shareholders to be held at the
Company's offices, 300 One Jackson Place, 188 East Capitol Street,
Jackson, Mississippi, on Wednesday, May 31, 1995, at 9:00 a.m.,
X Jackson time, and directs that the Shares represented by this Proxy
shall be voted as indicated below:
Y
Election of Directors: (change of address)
H. C. Bailey; Ted Enloe; George R. Farish; and Leland R. Speed. ______________________________________________
______________________________________________
______________________________________________
______________________________________________
(If you have written in the above space, please
mark the corresponding box on the reverse side
of this card.)
NOTE: YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU
NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE
PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
---------------
| SEE REVERSE |
| SIDE |
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14
X PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
1. Election of FOR WITHHELD 2. In their discretion, the Proxies are authorized to
Trustees / / / / vote upon such other business as may properly
(see reverse) come before the meeting or any adjournments
thereof.
For, except vote withheld from the following nominee(s):
THE SHARES REPRESENTED BY THIS PROXY
- -------------------------------------------------------- WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER. THE BOARD OF TRUSTEES
FAVORS A VOTE FOR THE PROPOSALS ABOVE.
IF NO DIRECTION IS MADE, THE PROXY WILL BE
VOTED FOR PROPOSAL 1.
Change / / Please date and sign name exactly as it
of / / appears hereon and return this Proxy promptly
Address / / in the enclosed envelope, which requires no
postage if mailed in the United States.
/ /
Attend / /
Meeting / /
SIGNATURE(S) _________________________________________________________ DATE __________________
SIGNATURE(S) _________________________________________________________ DATE __________________
NOTE: Joint owners should each sign. Executors, administrators, trustees,
guardians and corporate officers should give title.