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CAPITAL ALLIANCE INCOME TRUST LTD.,
A REAL ESTATE INVESTMENT TRUST
Notice of Annual Meeting,
Proxy Statement and Proxy Card
For
2000 Annual Meeting of Shareholders
July 6, 2000
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Capital Alliance Income Trust Ltd.,
A Real Estate Investment Trust
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50 California Street, Suite 2020o San Franciscoo California 94111
415/288-9575o Fax: 415/288-9590
June 1, 2000
Dear Fellow Shareholders:
RE: Annual Meeting of Shareholders - Request for Proxies
You are cordially invited to attend the 2000 Annual Meeting of Shareholders of
Capital Alliance Income Trust Ltd. (the "Trust") which is scheduled for 2:00
p.m., July 6, 2000 and is to be held in the Trust's offices at 50 California
Street, Suite 2020, San Francisco, California, 94111. Enclosed is a Notice to
Shareholders of Annual Meeting, a Proxy Statement describing the business to be
transacted, and a form of proxy for your use in voting at the meeting, and the
Trust's Annual Report.
At the Annual Meeting you will be asked (i) to elect two Class I Directors of
the Trust; (ii) to ratify the selection of Novogradac & Company LLP as the
independent auditors for the Trust for the year 2000, and (iii) to act on such
other business as may properly come before the meeting or any adjournment
thereof.
YOUR VOTE IS IMPORTANT
It is important that you complete, date, sign and promptly return your proxy in
the enclosed envelope, whether or not you plan to attend the meeting. If you
attend the meeting and wish to withdraw your proxy, you may vote in person and
your proxy will be withdrawn.
Your prompt response would be most appreciated.
Very truly yours,
/s/ Thomas B. Swartz
Thomas B. Swartz
Chairman and Chief Executive Officer
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Capital Alliance Income Trust Ltd.,
A Real Estate Investment Trust
A Delaware Corporation
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Notice to Shareholders of
Annual Meeting To Be Held On July 6, 2000
Please Take Notice that the 2000 Annual Meeting of Shareholders ("Annual
Meeting") of Capital Alliance Income Trust Ltd., A Real Estate Investment Trust,
a Delaware corporation (the "Trust"), will be held on July 6, 2000 at 2:00 p.m.,
local time, at 50 California Street, Suite 2020, San Francisco, California
94111, to consider and vote on the following matters:
1. Election of two Class I Directors of the Trust to serve until the third
annual meeting of the Trust's shareholders following his election and until
the election and qualification of his respective successors;
2. Approval of the recommendation of the Board of Directors that Novogradac &
Company LLP be appointed as independent auditors of the Trust for the year
ending December 31, 2000; and
3. Such other business as may properly come before the Annual Meeting or any
postponements or adjournments thereof.
The Trust's Annual Report to Shareholders for the year ended December 31, 1999
accompanies this notice.
Only shareholders of record at the close of business on April 30, 2000, the
record date of the Annual Meeting, will be entitled to notice of, and to vote
at, the Annual Meeting or any postponements or adjournments thereof. A majority
of the outstanding shares of the Trust entitled to vote must be represented at
the Annual Meeting in order to constitute a quorum. Whether or not you plan to
be present, please complete, date, sign and return the enclosed proxy card.
You may revoke your proxy at any time before it is voted by filing with the
Trust a written revocation or a duly executed proxy bearing a later date. If you
are present at the Annual Meeting and vote in person, your proxy will not be
used.
We look forward to seeing you at the Annual Meeting.
By Order Of The Trust,
Linda St. John, Secretary
San Francisco, California
June 1, 2000
Whether or not you plan to attend the meeting, please sign and return the
enclosed proxy as promptly as possible in the enclosed postage-paid envelope.
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TABLE OF CONTENTS
INFORMATION CONCERNING SOLICITATION AND VOTING..............................1
General ..........................................................1
Voting Rights and Outstanding Shares.................................1
Revocability of Proxies..............................................2
GENERAL TRUST INFORMATION...................................................2
Management ..........................................................2
Board Committees.....................................................3
Board and Committee Meetings.........................................3
Executive Officers...................................................3
Stock Holdings of Principal Stockholders, Directors
and Management.......................................................4
Compensation of Directors............................................5
Executive Compensation...............................................5
Certain Relationships and Related Transactions.......................5
PROPOSAL ONE
ELECTION OF DIRECTORS................................................8
General ..........................................................8
Nominees for Election as Class I Directors for Term
Expiring in 2002.....................................................8
Directors Continuing In Office.......................................9
PROPOSAL TWO
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANT...........9
STOCKHOLDER PROPOSALS AND NOMINATIONS.......................................9
MISCELLANEOUS..............................................................10
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934................10
OTHER BUSINESS.............................................................11
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Capital Alliance Income Trust Ltd.,
A Real Estate Investment Trust
A Delaware Corporation
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PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy card (the "Proxy") is being solicited from the
stockholders of Capital Alliance Income Trust Ltd., A Real Estate Investment
Trust, a Delaware corporation (the "Trust"), on behalf of the Trust's Board of
Directors (the "Board") for use at the Annual Meeting of the Trust's
shareholders to be held at the Trust's offices, 50 California Street, Suite
2020, San Francisco, California 94111 at 2:00 p.m., local time, on July 6, 2000,
and at any postponements or adjournments thereof (the "Annual Meeting") for the
purposes set forth herein. The Trust's principal executive offices are located
at 50 California Street, Suite 2020, San Francisco, California 94111.
The Trust's 2000 Annual Report, including the Trust's 2000 Annual
Report on Form 10-K and audited financial statements for calendar year 1999 are
being forwarded to each shareholder of record as of April 30, 2000, together
with this Proxy Statement.
The Trust is mailing this Proxy Statement, the accompanying Notice To
Shareholders of Annual Meeting and the Proxy on or about June 1, 2000, to all
shareholders entitled to notice of, and to vote at, the Annual Meeting.
The cost of this solicitation of proxies will be borne by the Trust.
Solicitations will be made by mail. In addition, the officers and regularly
engaged employees of the Manager of the Trust may, in a limited number of
instances, solicit proxies personally or by telephone. The Trust will reimburse
banks, brokerage firms, other custodians, nominees and fiduciaries for
reasonable expenses incurred in sending proxy materials to beneficial owners of
stock.
Voting Rights and Outstanding Shares
Only shareholders of record at the close of business on April 30, 2000
(the "Record Date"), are entitled to notice of, and to vote at, the Annual
Meeting. At the close of business on the Record Date, there were issued and
outstanding and entitled to vote 1,484,740 shares of the Trust's common stock,
par value $.01 per share ("Common Stock") and 631,757 shares of the Trust's
Series "A" Preferred Stock, par value $.01 per share ("Series A Preferred
Stock") (individually, "Share", and collectively, the "Shares").
The presence at the Annual Meeting in person or by proxy of
shareholders entitled to cast a majority of all the votes entitled to be cast at
the Annual Meeting is necessary to constitute a quorum for the transaction of
business. Each outstanding Share is entitled to one vote on each matter to be
voted upon at the Annual Meeting.
If there are insufficient Shares present to constitute a quorum or
insufficient affirmative votes to approve any matter presented for approval, the
Annual Meeting may be postponed or adjourned one or more
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times to permit for solicitation of proxies. For each matter presented for
approval, each stockholder is entitled to one vote for each Share held.
Directors are elected by plurality vote. A majority of the votes cast at a
meeting of stockholders duly called and at which a quorum is present will be
sufficient to approve any other matter which may properly come before the
meeting, unless more than a majority of votes cast is required by statute or by
the bylaws of the Trust.
Shares represented by properly executed and returned Proxies, unless
revoked, will be voted at the Annual Meeting in accordance with the instructions
thereon. If a properly executed and returned Proxy contains no instructions, it
will be voted: (i) for the election to the Board of the person specified on the
Proxy; (ii) for ratification of the selection of Novogradac & Company LLP as the
independent auditors for the Trust for 2000, and (iii) in the discretion of the
proxy holders as to any other matter that properly may come before the Annual
Meeting. The Trust's directors do not know of any matter that will be presented
for consideration at the Annual Meeting other than the proposals described in
this Proxy Statement.
Revocability of Proxies
Any shareholder giving a Proxy pursuant to this solicitation has the
power to revoke that Proxy at any time before the Shares to which it relates are
voted either (i) by filing with the Trust, at its principal executive offices,
written notice of revocation or a duly executed Proxy bearing a later date, or
(ii) by attending the Annual Meeting, withdrawing the Proxy, and voting in
person.
GENERAL TRUST INFORMATION
Management
The Board, which currently consists of the five individuals listed
below, directs the management of the Trust's business and affairs. Directors
Blomberg and Brooks are Independent Directors (i.e., are not officers, full-time
employees or members of the immediate family of officers or full-time
employees).
The Trust's current directors (the "Directors") and executive officers
and their respective positions are as follows:
Name Position
---- --------
Directors:
Thomas B. Swartz...........Class I Director, Chairman of the Board
...........................and Chief Executive Officer
Harvey Blomberg............Class I Director
Stanley C. Brooks..........Class II Director
Dennis R. Konczal..........Class II Director, President and Chief
...........................Operating Officer
Richard J. Wrensen.........Class III Director, Senior Vice-President
...........................and Chief Financial Officer
Name Position
---- --------
Officers:
Thomas B Swartz.............Chairman of the Board and Chief Executive
............................Officer
Dennis R. Konczal...........President and Chief Operating Officer
Richard J. Wrensen..........Senior Vice-President and Chief Financial
............................Officer
Linda St. John..............Operations Officer and Secretary
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Board Committees
As is discussed below, the Board has two standing committees: an Audit
Committee and an Executive Committee.
Executive Committee. The Executive Committee is empowered to exercise
any of the Board's powers over the Trust's business affairs (including the
declaration of dividends) except those powers specifically reserved to the full
Board or to the shareholders. The Executive Committee consists of Messrs.
Blomberg, Konczal and Swartz.
Audit Committee. The Audit Committee makes recommendations concerning
the annual appointment of the Trust's public accountants and reviews the
arrangements for and the scope of the audit conducted by those accountants. This
committee (i) reviews the Trust's accounting functions and operations, (ii)
considers the adequacy and effectiveness of the system of accounting controls,
including any proposed corrective actions, (iii) reviews and monitors the
Trust's policies regarding business ethics and conflicts of interest, (iv)
discusses with management and the independent accountants the Trust's draft
annual financial statements and key accounting and reporting matters, (v)
reviews the Trust's insurance program and makes recommendations to the Board
concerning that program, and (vi) reviews the activities and recommendation of
the Trust's audit staff. The Trust's independent accountants have unrestricted
access to the Audit Committee. The Audit Committee consists of Messrs. Blomberg,
Brooks and Konczal.
Board and Committee Meetings
During 1999, the Board held four meetings and acted by unanimous
written consent three times; the Executive Committee held no meetings and the
Audit Committee held one meeting. Each Director attended all of the 1999 Board
meetings.
Executive Officers
The business experience of each of the Trust's executive officers is
set forth below.
Thomas B. Swartz, age 68, has served as Chairman and Chief Executive
Officer of the Trust since its formation in 1995 and of the Trust's predecessors
since their formation in 1991 and 1994. As a Class I Director, his term expires
in 2000. He also has served as Chairman and Chief Executive Officer of Sierra
Capital Funding, LLC (and its predecessors), an affiliated mortgage banking firm
since 1994. Mr. Swartz has also served as Chairman and Chief Executive Officer
of Capital Alliance Advisors, Inc., the Trust's Manager, since its formation in
1989 and of Sierra Capital Companies which he founded in 1980 and which
sponsored and advised six publicly-held equity real estate investment trusts. In
1989-1990 he served as President of the National Association of Real Estate
Investment Trusts and as a Member of its Board of Governors from 1983 to 1993.
Prior to founding Sierra Capital Companies, Inc. Swartz was a partner in the San
Francisco law firm of Bronson, Bronson & McKinnon from 1960 to 1980. He
graduated from Yale University in 1954, and from Boalt School of Law of the
University of California in 1959 and was an officer in the U.S. Navy from 1954
to 1956.
Dennis R. Konczal, age 49, has served as President and Chief Operating
Officer of the Trust since its formation in 1995 and of the Trust's predecessors
since their formation in 1991 and 1994. As a Class II Director his term expires
in 2001. Mr. Konczal has also served as President and Chief Operating Officer of
Capital Alliance Advisors, Inc., the Trust's Manager, since 1989, of the Sierra
Capital Companies since 1984 and of Sierra Capital Funding, LLC, an affiliated
mortgage banking firm since 1994. Prior to joining Sierra Capital Companies, Mr.
Konczal was President and Chief Operating Officer of Granada Management
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Corporation and related companies, an agribusiness concern, from 1981 to 1984.
He is a Licensed Principal of the NASD and graduated in 1972 with a B.S. degree
in Agricultural Economics from Michigan State University.
Richard J. Wrensen, age 44, became the Senior Vice-President and Chief
Financial Officer of the Trust and of its Manager, Capital Alliance Advisors,
Inc., in December 1997. He became a Class III Director of the Trust in February,
2000. He serves in a similar capacity with Sierra Capital Companies and its
affiliates. Prior to joining the Manager and the Trust, Mr. Wrensen was Senior
Vice-President of Finance and Chief Financial Officer with SNK Realty Group, a
Japanese merchant builder, during 1997 and from 1987 to 1997 was
Vice-President-Finance of Mattison and Shidler, a national real estate
investment firm. From 1979 through 1987, Mr. Wrensen held financial positions
with several real estate management and development firms. After an accountancy
position with Coopers & Lybrand from 1978 to 1979, Mr. Wrensen became a
Certified Public Accountant in 1979. He graduated in 1985 from Hass School of
Business Administration of the University of California, Berkeley with a Masters
of Business Administration and received his B.S. Accounting degree from the
University of Florida in 1978.
Linda St. John, age 44, has served as Operations Officer and Secretary
of the Trust since 1995 and as the Secretary and Operations Officer of Capital
Alliance Advisors, Inc., the Trust's Manager, since 1995. She has also been the
Secretary of Sierra Capital Companies and its affiliates since 1995. Prior to
joining the Trust and its Manager in 1995, Ms. St. John was Operations Manager
for Gruen, Gruen & Associates from 1994 to 1995 and was MIS Manager for Hannum
Associates from 1991 through 1993. She received her A.A. degree in Business
Administration from Rochester Business Institute in 1984.
Stock Holdings of Principal Stockholders, Directors and Management
The following table sets forth certain information regarding beneficial
ownership of the Trust's Common and Preferred Shares as of June 1, 2000 by (1)
each person that beneficially owns more than five percent of the Trust's Common
Shares, (2) each Director, (3) the Trust's executive officers, and (4) all
Directors and executive officers as a group. Unless otherwise indicated in the
footnotes to the table, the beneficial owners name have, to the knowledge of the
Trust, sole voting and investment power with respect to the shares beneficially
owned, subject to community property laws where applicable.
<TABLE>
<CAPTION>
Number of Shares Percentage of Shares
Beneficially Owned Beneficially Owned
------------------ ------------------
Name of Beneficial Owner Common Preferred Common Preferred
------------------------ ------ --------- ------ ---------
<S> <C> <C> <C> <C>
Thomas B. Swartz (1)(2)(5).............................3,086* 4,004 0* 0*
Dennis R. Konczal (1)(2)(3)(5).........................9,000* 0 0* 0
Stanley C. Brooks (3)(5)...................................0 0 0 0
Harvey Blomberg (1)(3)(5)..................................0 0 0 0
Richard J. Wrensen(2)(5)..............................14,800* 0 0* 0*
Linda St. John(5)..........................................0 0 0 0
All directors and executive officers as a
group (6 persons)(6).............................38,886 16,004 2.62 2.5
Thomas Morford.............................................0 49,000 0 7.7%
<FN>
(*) Less than 1%
(1) Also is a member of the Executive Committee.
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(2) Capital Alliance Advisors, Inc., the Trust's Manager, owns 10,976 shares
of Preferred Stock and as of June 1, 2000 owned 12,000 Common Shares of
the Trust. Messrs. Swartz, Konczal and Wrensen are officers and directors
of the Manager and collectively own the outstanding shares of the Manager.
(3) Also is a member of the Audit Committee.
(4) Mr. Wrensen's wife owns 6,900 shares of Common Stock in which Mr. Wrensen
claims no beneficial interest.
(5) Messrs. Swartz, Konczal, Brooks, Blomberg, Wrensen and Ms. St. John hold
options under the Trust's 1998 Incentive Stock Option Plan to acquire
33,750, 33,750, 7,500, 7,500, 15,000, and 7,500 shares, respectively, of
Common Stock underlying the options.
(6) Includes shares held by Capital Alliance Advisors, Inc.
</FN>
</TABLE>
Compensation of Directors
Each Independent Director receives an annual retainer of $5,000, a $500
fee for each Board and Committee meeting attended in person and $300 for each
Board or committee meeting held telephonically together with reimbursement of
expenses incurred in attending those meetings. During 1999 Messrs. Brooks and
Blomberg each received $5,000 as a Director's fee and they each received $1,700
in committee and meeting fees. Directors who are affiliates of the Manager do
not receive board or committee meeting fees but do receive the reimbursement of
expenses incurred in attending those meetings.
Executive Compensation
The Trust has no employees. All officers of the Trust are employees of
Capital Alliance Advisors, Inc., the Trust's Manager, and receive no
compensation directly from the Trust.
Certain Relationships and Related Transactions
Arrangements and Transactions with Capital Alliance Advisors, Inc. ("CAAI").
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CAAI is the Manager of the Trust and provides (a) management and
advisory services to the Trust in accordance with the Management Agreement and
(b) mortgage origination and loan servicing services to the Trust in accordance
with the Mortgage Origination and Servicing Agreement. As previously described,
the Trust will utilize the mortgage banking experience, management expertise and
resources of CAAI in conducting its Mortgage Investment and its Mortgage Conduit
Businesses. In addition, a majority of the Directors and the officers of the
Trust also serve as Directors and/or officers of CAAI. The amount paid by the
Trust to CAAI under such agreements for the year ended December 31, 1999 was
$444,031.
CAAI owns all of the voting common stock and a 1 % economic interest in
Capital Alliance Funding Corporation ("CAFC"), the Trust's Mortgage Conduit
Subsidiary. The Trust owns all of the non-voting preferred stock representing
99% of the economic interest in CAFC. CAAI has the power to elect all of the
directors of CAFC and the ability to control the outcome of all matters for
which the consent of the holders of the common stock of such subsidiary is
required. CAAI and/or the officers and directors of CAFC who may be officers and
directors of the Trust, are separately compensated for their management services
to the subsidiary and provide origination, financing and administrative services
to the subsidiary through separate agreements and an intercompany allocation of
the cost of such services. The amount paid to CAAI by CAFC under such agreements
for the year ended December 31, 1999 was $55,103 for mortgage origination
services. The Trustees, the Manager and their affiliates have fiduciary duties
and obligations which will require them to resolve any conflicts of interest by
exercising the utmost good faith and integrity. Additionally, the Bylaws provide
that the Manager must upon request by the Directors disclose any investments
which are within the purview of the Trust's investment policies.
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CAAI through its affiliation with Sierra Capital Companies and its
affiliates, also has interests that may conflict with those of the Trust in
fulfilling duties. In addition, Messrs. Swartz, Konczal and Wrensen, officers
and directors of CAAI are also officers and directors of the Trust. The officers
and directors of CAAI are also involved in other businesses which may generate
profits or other compensation. The Trust will not share in such compensation.
It is the intention of the Trust and CAAI that any agreements and
transactions, taken as a whole, between the Trust, on the one hand, and CAAI or
its affiliates, on the other hand, are fair to both parties. However, there can
be no assurance that each of such agreements or transactions will be on terms at
least as favorable to the Trust as could have been obtained from unaffiliated
third parties.
Investment in Related Mortgage Banking Firms.
---------------------------------------------
The Trust, as a result of strategic investments totaling $200,000 by
its predecessors holds 20,000 Class "B" Preferred Shares of Sierra Capital
Acceptance, a division of Sierra Capital Funding, LLC, a Delaware limited
liability company ("SCF/LLC"). SCF/LLC in 1997 merged with Sierra Capital
Acceptance, a Delaware business trust ("SCA"), in which the predecessors
originally invested. SCA is a wholesale mortgage banking firm specializing in
A-, B/C credit-rated non-conforming residential mortgages. The SCF/LLC-SCA
investment held by the Trust has a 15% distribution preference and a liquidation
preference. SCA by contract provides mortgage loan services to the Manager for
the benefit of the Trust. Messrs. Swartz and Konczal are principals, directors
and officers of the SCA division of SCF/LLC as well as of the Trust and its
Manager. SCSI Corporation, which is controlled by Messrs. Swartz and Konczal, is
the Managing Member of SCF/LLC and has invested $113,000 in the common shares of
SCA.
The Trust formerly held an investment totaling $225,000 of subordinated
debt in Equity 1-2-3, a separate division of Sierra Capital Funding, LLC. The
Trust's investment has a liquidation preference. SCSI Corporation, which is
controlled by Messrs. Swartz and Konczal, also made a $75,000 investment in the
common shares of Equity 1-2-3. The investments of the Trust and SCSI in Equity
1-2-3 have been written off.
Sale and Purchase of Loans.
---------------------------
To provide a source of mortgage loans for the Trust' Mortgage
Investment Business, CAFC, the Mortgage Conduit Subsidiary, offers to the Trust
for purchase all non-conforming mortgage loans and Home Equity Loans meeting the
Trust's investment criteria and policies. Commitments to acquire loans will
obligate the Trust to purchase such loans from the Mortgage Conduit Subsidiary
upon the closing and funding of the loans, pursuant to the terms and conditions
specified in the commitment. The Trust accounts for the purchase of loans from
CAFC on a fair market value basis. When the Trust computes the equity and
earnings or loss of the Mortgage Conduit Subsidiary, it will eliminate any
intercompany profit.
Warehouse Financing Facilities.
-------------------------------
The Trust provides secured warehouse financing facilities to its
strategic partners and loan correspondents as well as to CAFC, its non-qualified
subsidiary. At December 31, 1999 it had $428,250 outstanding to SCA and
$2,140,360 outstanding to CAFC. At December 31, 1999 the Trust had $620,707
outstanding to Equity 1-2-3, which amount is fully secured and is being
liquidated .
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Total Return Performance Graph.
-------------------------------
On October 1, 1998, trading in shares of the Trust's Common Stock began
on the American Stock Exchange. The following graph and table compare the
cumulative total shareholder returns on the Common Stock for the period from
October 1, 1998 through March 31, 1998, with the cumulative total stockholder
return for the same period under the Standard & Poor's 500 Stock Index and the
NAREIT Mortgage Total Return Index maintained by the National Association of
Real Estate Investment Trusts, Inc. Total return values for the Common Stock for
those two indexes represent cumulative total returns assuming (i) the investment
of $100 in the Trust's Common Stock and in the securities covered by those
indexes on October 1, 1998 and (ii) the reinvestment of dividends. Trust
dividends paid in January 1999 for the fourth quarter of 1998 are not included
in the calculations. The stockholder returns on the Trust's Common Stock shown
in the following graph and table are not necessarily indicative of future
performance.
[CHART OMITTED HERE]
<TABLE>
<CAPTION>
Period Ending
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Index 10/01/98 12/31/98 03/31/99 06/30/99 09/30/99 12/31/99 3/31/00
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Trust Common Shares 100.00 72.56 65.31 52.03 55.15 38.41 48.67
S&P 500 Stock Index 100.00 125.03 131.26 140.51 131.74 151.34 154.47
NAREIT Mortgage Total
Return Index 100.00 81.96 72.99 88.58 60.32 52.12 52.34
</TABLE>
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PROPOSAL ONE
ELECTION OF DIRECTORS
General
The Bylaws of the Trust provide for a variable Board of Directors with
a range between three and seven members. The Board of Directors currently
consists of five members. The Directors are divided into three classes. Each
class of Directors consists of two Directors (except Class III which consists of
one Director), with each class serving for a staggered three-year term. The
Class I Directors are Messrs. Swartz and Blomberg (whose terms expire in 2000
and who are nominated for reelection at this Annual Meeting for a three-year
term); the Class II Directors are Messrs. Brooks and Konczal, (who were
reelected in 1998 for a three-year term), and the Class III Director is Mr.
Wrensen (who was appointed in 2000 to replace Douglas A. Thompson, who resigned,
to serve the balance of Mr. Thompson's term which expires in 2002. Mr. Thompson
resigned to pursue a new commercial venture and not because of any disagreement
with the Trust or with any matter relating to the Trust's operations, policies
or practices). Each director is elected to serve until the next annual meeting
of shareholders at which his Class stands for reelection, and until their
successors are elected and qualified. Each of the nominees for Class I, if
elected, will serve for a term expiring at the 2003 annual meeting of
stockholders and until their successors are elected and qualified. The Board
currently has two Independent Directors, Messrs. Brooks and Blomberg. The Board
has nominated the individuals named below to serve as Class I members of the
Board. Mr. Swartz does not qualify as an Unaffiliated Director.
The Trust's Bylaws provide a procedure for shareholder nomination of
persons for election to the Board of Directors. Please see "Stockholder
Proposals and Nominations".
The nominees listed below currently are Class I Directors whose present
terms expire at the Annual Meeting. The nominees have agreed to serve if
elected, and management has no reason to believe that the nominee will be
unavailable to serve. Unless otherwise instructed, the proxy holders will vote
Proxies received by them in favor of the election of the nominee named below.
However, if the nominee becomes unavailable for election for any reason, the
Shares represented by those Proxies will be voted for any substitute nominee
designated by the Directors. Assuming that a quorum is present, a plurality of
all the votes cast at the Annual Meeting will be sufficient to elect a nominee
as a Director. For purposes of the election of directors, abstentions will not
be counted as votes cast and will have no effect on the result of the vote,
although they will be counted in determining the presence of a quorum.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED BELOW, AND,
IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY, PROXIES SOLICITED IN CONNECTION
WITH THIS PROXY STATEMENT WILL BE SO VOTED.
The following presents information concerning the person nominated for
election as the Class I Directors of the Corporation and for those directors
whose terms will continue after the meeting:
Nominees for Election as Class I Directors for Term Expiring in 2002
Thomas B. Swartz. Biographical information for Mr. Swartz is set forth
in the section of this Proxy Statement entitled "General Trust Information:
Executive Officers."
Harvey Blomberg, age 60; Class I Director since 1996; current term
expires 2000; Founder and principal, MRHB Real Estate (real estate management
company) (1988 to date); Regional Director, Connecticut Small Business
Development Center (1996 to date); Partner and Chief Financial Officer, Bay
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Purveyors, Inc. (1976 to 1995); General Manager, Deerfield Communications (1987
to 1990); Consultant to numerous companies (financial restructuring, refinancing
and marketing) (1989 to date). Renessler Polytechnic Institute, M.S. Management,
1995; Hofstra University, M.B.A. 1985; B.S. Engineering, 1966.
Directors Continuing In Office
Stanley C. Brooks, age 50; Class II Director since 1996; current term
expires 1998; President and Chairman, Brookstreet Securities Corporation (1990
to date); Executive Vice-President, Toluca Pacific Securities Corporation (1987
to 1989); Senior Vice-President First Affiliated Securities (1983 to 1986);
Senior Vice-President, Private Ledger Financial Services (1976 to 1983); Member,
National Futures Association (1991 to date); Member, Securities Industry
Association (1995 to date); Member, Regional Investment Bankers Association
(1990 to date); Licensed Principal, NASD (1970 to date); California State
Polytechnic Institute, B.S. Business Administration 1970. Mr. Brooks was elected
to the Board of Directors pursuant to the Underwriting Agreement between the
Trust and Brookstreet Securities Corporation as the Managing Broker-Dealer of
the Trust's public offering of its Common Stock.
Dennis R. Konczal. Biographical information for Mr. Konczal is set
forth in the section of this Proxy Statement entitled "General Trust
Information: Executive Officers."
Richard J. Wrensen. Biographical information for Mr. Wrensen is set
forth in the section of this Proxy Statement entitled "General Trust
Information: Executive Officers."
PROPOSAL TWO
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANT
Novogradac & Company LLP has provided independent public accounting
services to the Trust since its inception in 1996 and to its predecessors since
1992. The Board has recommended to the shareholders that they ratify the
selection of Novogradac & Company LLP to examine the Trust's financial
statements for the year ending December 31, 2000. If the shareholders do not
ratify the selection of Novogradac & Company LLP as the Trust's independent
public accountant, or if circumstances arise that make the continuation of
Novogradac & Company LLP as the Trust's independent public accountant impossible
or inappropriate for the year ending December 31, 2000, that selection will be
reconsidered by the Audit Committee and the Board. A representative of
Novogradac & Company LLP is expected to be present at the Annual Meeting to
respond to appropriate questions and to make a statement if he or she so
desires.
Assuming that a quorum is present, the affirmative vote of a majority
of all the votes cast at the Annual Meeting is necessary for approval of the
ratification of the selection of Novogradac & Company LLP as the Trust's
independent auditors for the fiscal year ending December 31, 2000. For purposes
of the vote on this proposal, abstentions will not be counted as votes cast and
will have no effect on the result of the vote, although they will be counted in
determining the presence of a quorum.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" FOR PROPOSALS TWO
AND THREE AND, IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY,
PROXIES SOLICITED IN CONNECTION WITH THIS PROXY STATEMENT WILL BE
SO VOTED.
STOCKHOLDER PROPOSALS AND NOMINATIONS
The Bylaws of the Trust provide a procedure for shareholder proposals
and shareholder nominations of persons for election to the Board of Directors.
That Procedure provides that any Shareholder intending
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to present a proposal or nomination for election of one or more Directors at the
Annual Meeting must deliver a written notice to the Trust's Secretary at the
Trust's principal executive offices not less than fifty (50) days in advance of
such meeting or the close of business of the tenth (10th) day following the date
on which public disclosure of the date of the meeting is first made to
Shareholders, whichever is later.
Any such notice of a stockholder proposal from a Shareholder to the
Trust's Secretary must set forth as to each matter such Shareholder proposes to
bring before the meeting (i) a reasonably detailed description of the business
desired to be brought before the meeting and the reasons for conducting such
business at the meeting, (ii) the name and the business and residence address of
the Shareholder proposing such business, (iii) the class and number of Shares of
stock of the Corporation which are owned by such Shareholder, (iv) any material
interest of such Shareholder in such business; and (v) any other information
that is required to be provided by such Shareholder pursuant to the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder. If
the shareholder's notice to the Trust's Secretary proposes to nominate one or
more individuals for election or reelection as Director, that notice must set
forth (a) the name and address of the Shareholder who intends to make the
nomination and of the Person or Persons to be nominated; (b) a representation
that the Shareholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the Person or Persons specified in the notice; (c) a
description of all arrangements or understandings between the Shareholder and
each nominee and any other Person or Persons (naming such Person or Persons)
pursuant to which the nomination or nominations are to be made by the
Shareholder; (d) such other information regarding each nominee proposed by such
Shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities Exchange Act of 1934, as amended,
had the nominee been nominated, or intended to be nominated, by the Board of
Directors; and (d) the consent of each nominee to serve as a Director if so
elected.
If the shareholder's notice to the Secretary proposes to bring other
business before the meeting, that notice must include a brief description of (i)
that business, (ii) the reasons for conducting that business at the meeting, and
(iii) any material interest in that business held by that shareholder (and by
the beneficial owner, if any, on whose behalf the proposal is made). If a
shareholder proposal or nomination is not made in accordance with the procedure
set forth above, the Chairman of the Annual Meeting shall (i) determine and
declare at the Annual Meeting that the proposed business or nomination was not
properly brought before the Annual Meeting in accordance with the procedures set
forth in the Bylaws and (ii) direct that the business not be transacted or that
the defective nomination be disregarded.
MISCELLANEOUS
The proxy statement and the accompanying Proxy are being solicited by
the order of the Directors, and all costs related to this solicitation will be
borne by the Trust. Proxies may be solicited by mail, telephone, or telegram or
in person. The Manager of the Trust will request banks, brokerage houses, and
other institutions, nominees, or fiduciaries that hold Shares in their names to
forward the solicitation materials to the beneficial owners thereof, and the
Trust will reimburse those persons for their reasonable expenses in so
forwarding these materials. Directors and officers and regular employees of the
Trust's Manager may, without additional compensation, solicit Proxies by
telephone or telegram or in person.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934
Section 16(a)of the Securities Act of 1934 requires the Trust's
Directors and executive officers, and persons who own more than ten percent of a
registered class of the Trust's securities to file with the Commission initial
reports of ownership and reports of changes in ownership of the Common Stock and
other equity securities of the Trust. Officers, Directors and greater than ten
percent stockholders (of which there
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are none) are required by the Commission's regulations to furnish the Trust with
copies of all Section 16(a) forms they file.
To the best of the Trust's knowledge, during the fiscal year which
ended December 31, 1999, all Section 16(a) filing requirements applicable to its
Officers and Directors were satisfied by such persons.
OTHER BUSINESS
At this date, management knows of no other matters proposed to be
brought before the Annual Meeting. If any other business should properly come
before the Annual Meeting for shareholder action, the named proxies will vote
the Shares represented by the Proxies in accordance with their best judgment.
By Order of the Directors,
Linda St. John, Secretary
San Francisco, California
June 1, 2000
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Capital Alliance Income Trust Ltd.,
A Real Estate Investment Trust
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50 California Street, Suite 2020o San Francisco, California 94111
Tel: 415/288-9575o Fax: 415/288-9590
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
CAPITAL ALLIANCE INCOME TRUST LTD.
PROXY FOR ANNUAL MEETING
JULY 6, 2000
The undersigned, as record owner of the securities of Capital Alliance Income
Trust Ltd., A Real Estate Investment Trust, a Delaware corporation
("Corporation"), described below, hereby revokes any previous proxies and
appoints Thomas B. Swartz and Dennis R. Konczal, with power of substitution and
revocation and for and in the name of the undersigned, to vote and otherwise
represent all of the shares of the undersigned at the meeting and any
adjournment thereof, with the same effect as if the undersigned were present and
voting the shares. The shares represented by this proxy shall be voted in the
following manner:
1. For the election of the following persons as Directors of the Corporation
to serve until the third annual meeting of shareholders following his
election and until his respective successor shall be elected and qualify:
[ ] FOR Harvey Blomberg
[ ] FOR Thomas B. Swartz
(Instructions to shareholder: If authority to vote for director is being
withheld, strike-out the above clause (1) in its entirety and write "Authority
Withheld" in the margin. If authority to vote for any one director is being
withheld, strike-out the name of the director as to which authority is
withheld.)
2. [ ] FOR [ ] AGAINST [ ] ABSTAIN - approval of recommendation
of the Board of Directors that Novogradac & Company LLP be appointed
independent auditors of the Corporation for the year ended December 31,
2000; and
3. Other business that may properly come before the Annual Meeting or any
postponements or adjournments thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS YOU HAVE INDICATED ABOVE.
IF NO INDICATION HAS BEEN MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED FOR ITEMS 1 AND2 LISTED ABOVE AND, UNLESS ITEM 3 IS LINED OUT, AS THE
PROXY DEEMS ADVISABLE, ON ANY OTHER PROPER BUSINESS IN PROPOSAL 3 THAT MAY COME
BEFORE THE MEETING.
Dated: 2000.
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(SIGN EXACTLY AS NAME APPEARS ON YOUR ACCOUNT STATEMENT.)
Shareholder of Record: No. of Class "A" Preferred Shares:
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No. of Common Shares:
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