SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
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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 240.14a-11(c) or 240.14a-12
Charter Municipal Mortgage Acceptance Company
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Name of Registrant as Specified in its Charter
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Payment of Filing Fee (Check Appropriate Box):
[X] No fee required
[ ] Fee computed on table below per exchange Act Rules 14a-6 (i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
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[ ] 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.
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<PAGE>
CHARTER MUNICIPAL MORTGAGE
ACCEPTANCE COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
on
June 18, 1998
-------------
May 6, 1998
To the Shareholders of Charter Municipal Mortgage Acceptance Company:
NOTICE IS HEREBY GIVEN THAT the 1998 Annual Meeting of Charter Municipal
Mortgage Acceptance Company will be held Thursday, June 18, 1998 at 2:00 P.M.
(local time), at the American Stock Exchange, 86 Trinity Place, New York, New
York for the following purposes:
(1) The election of two (2) Trustees for a term of three years to expire
in 2001.
(2) The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Trustees recommends a vote "FOR" each of the listed nominees.
The accompanying proxy statement contains additional information and should be
carefully reviewed by Shareholders.
The Board of Trustees has fixed the close of business on April 1, 1998 as
the record date for the determination of Shareholders entitled to notice of and
to vote at the meeting and any adjournment thereof.
By Order of the Board of Trustees
/s/ J. Michael Fried.
J. Michael Fried
Chairman of the Board
IT IS MOST IMPORTANT THAT YOU COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
STAMPED, SELF-ADDRESSED PROXY CARD.
YOUR FAILURE TO PROMPTLY RETURN THE PROXY INCREASES THE OPERATING COSTS OF YOUR
INVESTMENT.
YOU ARE CORDIALLY INVITED TO PERSONALLY ATTEND THE MEETING, BUT YOU SHOULD
RETURN THE PROXY CARD WHETHER OR NOT YOU ATTEND THE MEETING.
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
625 MADISON AVENUE
NEW YORK, NEW YORK, 10022
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
INTRODUCTION
The accompanying form of proxy is solicited on behalf of the Board of
Trustees of Charter Municipal Mortgage Acceptance Company ("CharterMac") for use
at the Annual Meeting of Shareholders of CharterMac (the "Meeting") to be held
Thursday, June 18, 1998 at 2:00 P.M. (local time), at the American Stock
Exchange, 86 Trinity Place, New York, New York and at any adjournments thereof.
CharterMac has first mailed these proxy materials to holders (the
"Shareholders") of shares of beneficial interest of CharterMac (the "Shares"),
on or about May 6, 1998. CharterMac's executive offices are located at 625
Madison Avenue, New York, New York 10022 (telephone: (212) 588-1765).
Shareholders of record at the close of business on April 1, 1998 (the "Record
Date") will be entitled to vote at the Meeting or any adjournments thereof.
Shares represented by properly executed proxy cards received by CharterMac
at or prior to the Meeting will be voted according to the instructions indicated
on the proxy card. Unless contrary instructions are given, the persons named on
the proxy card intend to vote the Shares so represented FOR the election of each
of the two nominees for re-election as Trustees. Each proxy granted is revocable
and may be revoked at any time prior to its exercise by giving written notice to
CharterMac of its revocation by submission of a duly executed proxy bearing a
later date or by the vote of Shareholder cast in person at the Meeting.
The Board of Trustees recommends a vote "FOR" each of the listed nominees.
As of April 1, 1998 approximately 20,587,476 Shares of CharterMac were
outstanding, with each Share entitled to one vote on all matters that may come
before the Meeting.
ELECTION OF TRUSTEES
At the Meeting, two Trustees are to be elected for three-year terms
expiring in 2001. All of the nominees are currently Trustees of CharterMac.
Trustees are elected by a majority of the votes cast (assuming the presence of a
quorum consisting of a majority of the Shareholders whether present in person or
by proxy).
Unless Shareholders otherwise specify, the Shares represented by the
proxies will be voted "FOR" the indicated nominees for election as Trustees. If
for any reason any of the nominees become unavailable for election, the proxies
solicited will be voted for such nominees as are selected by the Board. The
Board has no reason to believe that any of the nominees will be unable or
unwilling to continue to serve as a Trustee if elected. However, in the event
that any nominee should be unable or for good cause unwilling to serve, the
Shares represented by proxies received will be voted for another nominee
selected by the Board. The Board of Trustees recommends a vote FOR each of the
listed nominees.
<PAGE>
The following table sets forth information with respect to each nominee
nominated to serve as a Trustee for a term to expire in 2001.
Name of Trustee/
Nominee for Election Age Principal Occupation
- -------------------- --- --------------------
Peter T. Allen 52 Mr. Allen is President of Peter Allen & Associates,
Inc., a real estate development and management
firm, in which capacity he has been responsible for
the leasing, refinancing and development of major
commercial properties. Mr. Allen has also been an
Adjunct Professor of the Graduate School of
Business at the University of Michigan since 1981.
Mr. Allen received a Bachelor of Arts Degree in
history/economics from DePauw University and a
Masters Degree in Business Administration with
Distinction from the University of Michigan. Mr.
Allen has been an Independent Trustee since 1997
and is a member of the Audit and Compensation
Committees. Mr. Allen also serves on the Board of
Directors of Aegis Realty, Inc. ("Aegis") and the
Board of Trustees of American Mortgage Investors
Trust ("AMIT"), which companies are also advised by
affiliates of Related Capital Company ("Related")
the real estate finance affiliate of The Related
Companies, L.P.
Arthur P. Fisch 56 Mr. Fisch is an attorney in private practice
specializing in real property and securities law
since October 1987, with Arthur P. Fisch, P.C. and
Fisch & Kaufman. From 1975-1987, Mr. Fisch was
employed by E.F. Hutton & Company, serving as First
Vice President in the Direct Investment Department
from 1981-1987 and associate general counsel from
1975-1980 in the legal department. As First Vice
President, he was responsible for the syndication
and acquisition of residential real estate. Mr.
Fisch received a B.B.A. from Bernard Baruch College
of the City University of New York and a Juris
Doctor degree from New York Law School. Mr. Fisch
is admitted to practice law in New York and
Pennsylvania. Mr. Fisch has been an Independent
Trustee since 1997 and is a member of the Audit and
Compensation Committees. Mr. Fisch also serves on
the Board of Directors of Aegis and the Board of
Trustees of AMIT.
Trustees and Officers
The Board of Trustees directs the management of the business and affairs
of CharterMac, but retains Related Charter LP (the "Manager"), to manage the
Company's day-to-day affairs. The Board of Trustees delegates to the Manager
responsibilities with respect to, among other things, overseeing the portfolio
of assets of CharterMac and the acquisition or disposition of investments.
During 1997, the Board of Trustees held four meetings.
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<PAGE>
The Trustees and Executive Officers of CharterMac are as follows:
<TABLE>
<CAPTION>
Year First Became
Name Age Office Held Officer/Trustee
- ---- --- ----------- -----------------
<S> <C> <C> <C>
J. Michael Fried 53 Managing Trustee and
Chairman of the Board 1997
Peter T. Allen 52 Managing Trustee 1997
Arthur P. Fisch 56 Managing Trustee 1997
Stuart J. Boesky 41 Managing Trustee, President, 1997
Chief Executive Officer and
Chief Operating Officer
Alan P. Hirmes 43 Managing Trustee,
Executive Vice President, Secretary,
Chief Financial Officer 1997
and Chief Accounting Officer
</TABLE>
Biographical information with respect to Messrs. Fisch and Allen is set forth
above.
J. MICHAEL FRIED, age 53, is a Managing Trustee and the Chairman of the Board of
CharterMac, is the Chief Executive Officer and a Member of the sole general
partner of the Manager and is the sole shareholder of one of the general
partners of Related.. In that capacity, he is generally responsible for all
syndication, finance, acquisition and investor reporting activities of Related
and its affiliates. Mr. Fried practiced corporate law in New York City with the
law firm of Proskauer Rose Goetz & Mendelsohn from 1974 until he joined Related
in 1979. Mr. Fried graduated from Brooklyn Law School with a Juris Doctor
degree, magna cum laude; from Long Island University Graduate School with a
Master of Science degree in Psychology; and from Michigan State University with
a Bachelor of Arts degree in History. Mr. Fried is also serves as Chairman of
the Board of Directors of Aegis and as Chairman of the Board of Trustees of
AMIT.
STUART J. BOESKY, age 41, is a Managing Trustee and the President of CharterMac
and is the President, the Chief Operating Officer and a Member of the sole
general partner of the Manager. Mr. Boesky practiced real estate and tax law in
New York City with the law firm of Shipley & Rothstein from 1984 until February
1986 when he joined Related. From 1983 to 1984, Mr. Boesky practiced law with
the Boston law firm of Kaye, Fialkow, Richmond & Rothstein (which subsequently
merged with Strook & Strook & Lavan) and from 1978 to 1980 was a consultant
specializing in real estate at the accounting firm of Laventhol & Horwath. Mr.
Boesky is the sole shareholder of one of the general partners of Related. Mr.
Boesky graduated from Michigan State University with a Bachelor of Arts degree
and from Wayne State School of Law with a Juris Doctor degree. He then received
a Master of Laws degree in Taxation from Boston University School of Law. Mr.
Boesky also serves on the Board of Directors of Aegis.
ALAN P. HIRMES, age 43, is a Managing Trustee, the Executive Vice President and
the Secretary of CharterMac and is a Senior Vice President, the Chief Financial
Officer and a Member of the sole general partner of the Manager. Mr. Hirmes has
been a Certified Public Accountant in New York since 1978. Prior to joining
Related in October 1983, Mr. Hirmes was employed by Weiner & Co., certified
public accountants. Mr. Hirmes is also the sole shareholder of one of the
general partners of Related. Mr. Hirmes graduated from Hofstra University with a
Bachelor of Arts degree. Mr. Hirmes also serves on the Board of Directors of
Aegis.
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<PAGE>
Committees of the Board of Trustees
The Board of Trustees has standing Audit and Compensation Committees. The
Audit Committee's duties include the review and oversight of all transactions
with affiliates of CharterMac, the periodic review of CharterMac's financial
statements and meetings with CharterMac's independent auditors. The Audit
Committee is comprised of Messrs. Allen, Fisch and Boesky and did not hold any
meetings during CharterMac's fiscal year ended December 31, 1997.
The Compensation Committee's duties include the determination of
compensation of CharterMac's executive officers and the administration of
CharterMac's Incentive Share Option Plan. The Compensation Committee is
comprised of Messrs. Allen and Fisch and did not hold any meetings during
CharterMac's fiscal year ended December 31, 1997. The Compensation Committee
must have at least two members, each of which must be Independent Trustees.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
CharterMac's officers and trustees, and persons who own more than ten percent of
a registered class of CharterMac's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "Commission"). These persons are required by regulation of the Commission
to furnish CharterMac with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, CharterMac believes that during the fiscal year
ended December 31, 1997, CharterMac's officers, trustees and greater than ten
percent beneficial owners complied with all applicable Section 16(a) filing
requirements.
The Manager
The directors and executive officers of Related Charter LLC ("Related
Charter"), the sole general partner of the Manager, are set forth below. These
officers of the sole general partner of the Manager may also provide services to
CharterMac on behalf of the Manager.
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<PAGE>
Related Charter LLC
<TABLE>
<CAPTION>
Year First Became
Name Age Offices Held Officer/Trustee
- ---- --- ------------ ---------------
<S> <C> <C> <C>
J. Michael Fried 53 Member and Chief Executive Officer 1997
Stuart J. Boesky 41 Member, President and
Chief Operating Officer 1997
Alan P. Hirmes 43 Member, Senior Vice President and
Chief Financial Officer 1997
Stephen M. Ross 57 Member 1997
James D. Spound 37 Senior Vice President 1998
Bruce H. Brown 44 Senior Vice President 1997
Mark J. Schlacter 47 Vice President 1997
Max E. Schlopy 61 Vice President 1998
Denise L. Kiley 38 Vice President 1997
Marc D. Schnitzer 36 Vice President 1997
Richard A. Palermo 37 Vice President, Treasurer, Controller
and Chief Accounting Officer 1997
Lynn A. McMahon 42 Secretary 1997
</TABLE>
Biographical information with respect to Messrs. Fried, Boesky and Hirmes is set
forth above.
STEPHEN M. ROSS, age 57, is a Member of the sole general partner of the Manager.
Mr. Ross is also President, Director and shareholder of The Related Realty
Group, Inc., the general partner of The Related Companies, L.P. He graduated
from the University of Michigan School of Business Administration with a
Bachelor of Science degree and from Wayne State University School of Law with a
Juris Doctor degree. Mr. Ross then received a Master of Laws degree in taxation
from New York University School of Law. He joined the accounting firm of Coopers
& Lybrand in Detroit as a tax specialist and later moved to New York, where he
worked for two large Wall Street investment banking firms in their real estate
and corporate finance departments. Mr. Ross formed the predecessor of The
Related Company, L.P. in 1972 to develop, manage, finance and acquire real
estate.
JAMES D. SPOUND, age 37, is a Senior Vice President of the sole general partner
of the Manager with primary responsibility for mortgage acquisitions. He joined
Related from First Union Capital Markets, in February 1998, where he was a Vice
President specializing in affordable housing finance. From 1992 to 1996, Mr.
Spound served as an investment banker in the Housing Finance Department at
Merrill Lynch & Co., where he was a Vice President at the time of his departure.
Since 1992, Mr. Spound has been responsible for the structuring and execution of
over $2.1 billion of Mortgage Revenue Bond transactions encompassing a wide
range of credit enhanced and non-credit enhanced structures. Previously, Mr.
Spound was also a Senior Consultant at Kenneth Leventhal & Company where he
focused on debt restructurings in the real estate industry. In addition, he
served for three years as a Project Manager at New York City's Economic
Development Corporation where he was responsible for underwriting and
administering incentive loans to support the City's economic development goals.
Mr. Spound received a Bachelor of Arts degree from Brown University and a
Masters of Science in Management from the Sloan School at MIT.
5
<PAGE>
BRUCE H. BROWN, age 44, is a Senior Vice President of the sole general partner
of the Manager and Related and is a director of Related's Portfolio Management
Group. He is responsible for overseeing the administration of the firm's public
registered debt and equity affiliates encompassing the monitoring of the
performance of each entity and each investment. He is also responsible for
Related's loan servicing activities with respect to the firm's $600 million
portfolio of tax exempt first mortgage bonds and FNMA/GNMA insured and
co-insured loan portfolio. Prior to joining Related in 1987, Mr. Brown was a
real estate lending officer at the United States Trust Company of New York and
previously held management positions in the hotel and resort industry with
Helmsley-Spear and Westin Hotels. Mr. Brown graduated from Colgate University
with a Bachelor of Arts degree.
MARK J. SCHLACTER, age 47, is a Vice President of the sole general partner of
the Manager. Mr. Schlacter is a Vice President of Mortgage Acquisitions of
Related, and has been with Related since June 1989. Prior to joining Related,
Mr. Schlacter garnered 16 years of direct real estate experience covering retail
and residential construction, single and multifamily mortgage origination and
servicing, commercial mortgage origination and servicing, property acquisition
and financing, and mortgage lending program underwriting and development. He was
a Vice President with Bankers Trust Company from 1986 to June 1989, and held
prior positions with Citibank, Anchor Savings Bank and the Pyramid Companies
covering the 1972-1986 period. Mr. Schlacter holds a Bachelor of Arts degree in
Political Science from Pennsylvania State University and periodically teaches
multifamily underwriting at the New York University School of Continuing
Education, Real Estate Institute.
MAX E. SCHLOPY, age 61, is a Vice President of the sole general partner of the
Manager. An attorney, Mr. Schlopy practiced corporate and commercial real estate
law in Buffalo, New York for many years, where he was a partner with the law
firm of Duke, Holzman, Yeager and Schlopy. He served as Vice President - General
Counsel for Marc Equity Corporation, a diversified real estate development
company with operations in several states, and later as a Vice President of the
general partner for the Summit Tax Exempt Bond Funds. More recently, Mr. Schlopy
was President of MK Industries, Inc., an Orlando, Florida-based company involved
in the research and development of high technology military and biomedical
products and processes. Mr. Scholpy was educated at Cornell and San Francisco
State Universities, and received his Juris Doctor degree, cum laude, from the
School of Law, State University of New York at Buffalo.
DENISE L. KILEY, age 38, is a Vice President of the sole general partner of the
Manager and is also an Managing Director and Chief Underwriter for Related,
responsible for overseeing the investment underwriting and approval of all
multifamily residential properties invested in Related sponsored corporate,
public and private equity and debt funds. Ms. Kiley is also responsible for the
strategic planning and implementation of the firm's mortgage financing programs.
Prior to joining Related in 1990, Ms. Kiley had experience acquiring, financing
and managing the assets of multifamily residential properties. From 1981 through
1985 she was an auditor with a national accounting firm. Ms. Kiley holds a
Bachelor of Science degree in Accounting from Boston College and is a Member of
the Affordable Housing Roundtable.
MARC D. SCHNITZER, age 36, is a Vice President of the sole general partner of
the Manager. Mr. Schnitzer is a Managing Director of Related and Director of
Related's Tax Credit Acquisitions Group. Mr. Schnitzer received a Master of
Business Administration degree from The Wharton School of The University of
Pennsylvania in December 1987, and joined Related in January, 1988. From 1983 to
1986, Mr. Schnitzer was a Financial Analyst in the Fixed Income Research
Department of The First Boston Corporation in New York. Mr. Schnitzer received a
Bachelor of Science degree, summa cum laude, in Business Administration from the
School of Management at Boston University.
RICHARD A. PALERMO, age 37, is a Vice President, the Treasurer and the
Controller of the sole general partner of the Manager. Mr. Palermo has been a
Certified Public Accountant in New York since 1985. Prior to joining Related in
September 1993, Mr. Palermo was employed by Sterling Grace Capital Management
from October 1990 to September 1993, Integrated Resources, Inc. from October
1988 to October 1990 and E.F. Hutton & Company, Inc. from June 1986 to October
1988. From October 1982 to
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<PAGE>
June 1986, Mr. Palermo was employed by Marks Shron & Company and Mann Judd
Landau, certified public accountants. Mr. Palermo graduated from Adelphi
University with a Bachelor of Business Administration degree.
LYNN A. McMAHON, age 42, is the Secretary of the sole general partner of the
Manager. She has served since 1983 as assistant to J. Michael Fried. From 1978
to 1983, she was employed at Sony Corporation of America in the Government
Relations Department.
Executive Compensation
CharterMac has two executive officers and five Trustees (two of whom are
Independent Trustees). CharterMac does not pay or accrue any fees, salaries or
other forms of compensation to its officers. Independent Trustees receive
compensation for serving as Independent Trustees at the rate of $15,000 per year
payable $5,000 in cash (or, at such Independent Trustee's option, Shares) and
Shares having an aggregate value of $10,000, based on the fair market value at
the date of issuance, in addition to an expense reimbursement for attending
meetings of the Board of Trustees. Certain members and officers of the sole
general partner of the Manager and certain officers of CharterMac receive
compensation from the Manager and its affiliates for services performed for
various affiliated entities, which may include services performed for
CharterMac. Such compensation may be based in part on the performance of
CharterMac; however, the Manager believes that any compensation attributable to
services performed for CharterMac is immaterial.
Security Ownership of Certain Beneficial Owners and Management
As of April 1, 1998, no person was known by CharterMac to be the
beneficial owner of more than five percent of the outstanding Shares of
CharterMac.
As of April 1, 1998, the members of the sole general partner of the
Manager own, in the aggregate, 100% of the membership interests of the sole
general partner of the Manager.
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<PAGE>
As of April 1, 1998, Trustees and officers of CharterMac and members and
officers of the sole general partner of the Manager own directly or beneficially
Shares of CharterMac as follows:
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name Title Beneficial Ownership of Class
- ---- ----- -------------------- --------
<S> <C> <C> <C>
Stephen M. Ross Member of Related Charter 208,262 Shares(1) 1%
Alan P. Hirmes Trustee, Executive VP, 21,447 Shares(1) *
Secretary, CFO, and Chief
Accounting Officer of Charter
and Member, Senior VP, and
CFO of Related Charter
J. Michael Fried Chairman of the Board and 109,611 Shares(1 2 3) *
Trustee of Charter Mac and
Member and CEO of
Related Charter
Stuart J. Boesky Trustee, President, CEO and 48,083 Shares(1 2) *
COO of CharterMac and
Member, President and
COO of Related Charter
Peter T. Allen Trustee of CharterMac 0 Shares --
Arthur P. Fisch Trustee of CharterMac 0 Shares --
Bruce H. Brown Senior VP of Related Charter 0 Shares --
James D. Spound Senior VP of Related Charter 0 Shares --
All Officers and Trustees of CharterMac
and Related Charter as a group (14 persons) 371,586 Shares(1 2 3) 1.80%
</TABLE>
*Less than 1% of the Shares issued by CharterMac.
(1) 11 of these shares are owned by the Manager, which is owned by Messrs.
Ross, Hirmes, Fried and Boesky
(2) 15,784 shares are owned by BF Security Partners, of which Messrs. Fried
and Boesky are each 50% equity owners.
(3) 3,824 shares are owned by Mr. Fried's minor children as to which he
disclaims beneficial ownership
Certain Relationships and Related Transactions
CharterMac has and will continue to have certain relationships with the
Manager and its affiliates. However, there have been no direct financial
transactions between CharterMac and its Trustees and officers or the members and
officers of the sole general partner of the Manager.
CharterMac and the Manager entered into a Management Agreement pursuant to
which the Manager is obligated to use its best efforts to seek out and present
to CharterMac, whether through its own efforts or those of third parties
retained by it, suitable and a sufficient number of investment opportunities
which are consistent with the investment policies and objectives of CharterMac
and consistent with such investment programs as the Board of Trustees may adopt
from time to time in conformity with CharterMac's Amended and Restated Trust
Agreement (the "Trust Agreement").
Although the Board of Trustees has continuing exclusive authority over the
management of CharterMac, the conduct of its affairs and the management and
disposition of the CharterMac's assets, the
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<PAGE>
Board of Trustees has initially delegated to the Manager, subject to the
supervision and review of the Board of Trustees and consistent with the
provisions of the Trust Agreement, the power and duty to: (i) manage the
day-to-day operations of CharterMac; (ii) acquire, retain or sell CharterMac's
assets; (iii) seek out, present and recommend investment opportunities
consistent with CharterMac's investment policies and objectives, and negotiate
on behalf of CharterMac with respect to potential investments or the
dispositions thereof; (iv) when appropriate, cause an affiliate to serve as the
mortgagee of record for mortgage investments of CharterMac and in that capacity
hold escrow on behalf of mortgagors in connection with the servicing of
mortgages; (v) obtain for CharterMac such services as may be required in
acquiring and disposing of investments, disbursing and collecting the funds of
CharterMac, paying the debts and fulfilling the obligations of CharterMac, and
handling, prosecuting and settling any claims of CharterMac, including
foreclosing and otherwise enforcing mortgages and other liens securing
investments; (vi) obtain for CharterMac such services as may be required for
property management, mortgage brokerage and servicing, and other activities
relating to the investment portfolio of CharterMac; (vii) evaluate, structure
and negotiate prepayments or sales of CharterMac's mortgage investments and
mortgage securities; (viii) monitor operations and expenses of CharterMac; and
(ix) from time to time, or as requested by the Board of Trustees, make reports
to CharterMac as to its performance of the foregoing services.
The original term of the Management Agreement will terminate on October 1,
2001, the fourth anniversary of its effective date. Thereafter, the Management
Agreement will be renewed annually by CharterMac, subject to an evaluation of
the performance of the Manager by the Board of Trustees. The Management
Agreement may be terminated (i) without Cause by the Manager or (ii) for Cause
by a majority of the Independent Trustees, each without penalty, and each upon
60 days' prior written notice to the non-terminating party.
The Management Agreement cannot be terminated by CharterMac prior to
October 1, 2001, other than for Cause. "Cause" is defined as gross negligence or
misconduct of the Manager. CharterMac cannot dissolve and liquidate prior to
such date except upon a recommendation of the Manager and the vote of a majority
in interest (a "Majority Vote") of the Shareholders. After October 1, 2001, the
vote of the holders of 66-2/3% of CharterMac's then outstanding Shares is
required to approve a dissolution and liquidation of CharterMac that is not
recommended by the Manager and the Majority Vote of Shareholders is required to
approve a liquidation of CharterMac recommended by the Manager. If for any
reason, whether prior to or after October 1, 2001, the Management Agreement is
terminated in accordance with its terms, CharterMac may dissolve and liquidate
upon the Majority Vote of Shareholders.
Pursuant to the terms of the Management Agreement, the Manager is entitled
to receive the fees and other compensation set forth below:
Fee/Compensation* Amount
----------------- ------
Bond Selection Fee 2.00% of the principal amount of
each First Mortgage Bond ("FMB") or
other tax exempt instrument
originated or acquired by CharterMac
or its subsidiaries.
Bond Placement Fee 2.00% of the principal amount of
each FMB or other tax exempt
instrument originated or acquired by
CharterMac or its subsidiaries
(payable by the borrower, and not
CharterMac).
Special Distribution Fee 0.375% per annum of the total
invested assets of CharterMac or its
subsidiaries.
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<PAGE>
Fee/Compensation* Amount
----------------- ------
Loan Servicing Fee 0.25% per annum based on the
outstanding principal amount of FMBs
owned by CharterMac and its
subsidiaries.
Operating Expense Reimbursement For direct expenses incurred by the
Manager in an amount not to exceed
$200,000 per annum (subject to
increase based on increases in
CharterMac's and its subsidiaries'
assets and to annual increases based
upon increases in the Consumer Price
Index).
Incentive Share Options The Manager may receive options to
acquire additional Shares pursuant
to CharterMac's Incentive Share
Option Plan only if CharterMac's
distributions in any year exceed
$0.9517 per share (i.e., the 1996
pro forma distributions set forth in
CharterMac's Solicitation Statement
dated as of June 15, 1997), and the
Compensation Committee of the Board
of Trustees determines to grant such
options.
Liquidation Fee 1.50% of the gross sales price of
the assets sold by CharterMac in
connection with a liquidation of
CharterMac assets supervised by the
Manager.
- ---------------
* The Manager will also be permitted to earn miscellaneous compensation which
may include, without limitation, construction fees, escrow interest, property
management fees, leasing commissions and insurance brokerage fees. The payment
of any such compensation is generally limited to the competitive rate for the
services being performed.
Affiliates of the Manager may provide certain financial guarantees to
facilitate leveraging by CharterMac, for which they could be paid market rate
fees. In addition, affiliates of the Manager may provide certain financial
guarantees to the owner (or partners of the owners) of the underlying properties
securing CharterMac's FMBs, for which they could be paid market rate fees.
The Manager may engage in other business activities related to real
estate, mortgage investments or other investments whether similar or dissimilar
to those made by CharterMac, or act as manager to any other person or entity
having investment policies whether similar or dissimilar to those of CharterMac.
Before the Manager, the officers and directors of the Manager and all persons
controlled by the Manager and its officers and directors may take advantage of
an opportunity for their own account or present or recommend it to others, they
are obligated to present such investment opportunity to CharterMac if (i) such
opportunity is of a character which could be taken by CharterMac, (ii) such
opportunity is compatible with CharterMac's investment objectives and policies
and (iii) CharterMac has the financial resources to take advantage of such
opportunity.
The Trust Agreement and Management Agreement provide that CharterMac shall
indemnify the Manager and its affiliates under certain circumstances.
The Manager is entitled to subcontract its obligations under the
Management Agreement to an affiliate. In accordance with the foregoing, the
Manager has assigned its rights and obligations to Related.
The Manager has been designated the "Tax Matters Partner" to manage
administrative tax proceedings conducted at CharterMac's level by the IRS with
respect to company matters. The Manager will also serve as the general partner
of CharterMac for tax purposes.
10
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has been and is presently the independent auditors
for CharterMac. Representatives of Deloitte & Touche LLP are expected to be
present at the Meeting and to be available to respond to appropriate questions
from Shareholders.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by CharterMac. Brokers and
nominees should forward soliciting materials to the beneficial owners of the
Shares held of record by such person, and CharterMac will reimburse them for
their reasonable forwarding expenses. In addition to the use of the mails,
proxies may be solicited by trustees, officers and regular employees of
CharterMac and the Manager by personal interview or telephone.
VOTING PROCEDURES
Boston Equiserve, LP (the "Inspector") has been appointed the inspector of
elections. The Inspector will count all votes cast, in person or by submission
of a properly executed proxy, received at or prior to the Meeting. Abstentions
and "broker non-votes" (nominees holding Shares for beneficial owners who have
not voted on a specific matter) will be treated as present for purposes of
determining whether a quorum is present at the Meeting. However, abstentions and
broker non-votes will have no effect on the vote because the vote required is a
plurality of the votes actually cast (assuming the presence of a quorum).
SHAREHOLDER PROPOSALS
Any proposal by a Shareholder of CharterMac intended to be presented at
the 1999 Annual Meeting of Shareholders must be received by CharterMac at its
principal executive office not later than January 6, 1999 for inclusion in
CharterMac's proxy statement and form of proxy relating to that meeting. Any
such proposal must also comply with other requirements of the proxy solicitation
rules of the Securities and Exchange Commission.
ANNUAL REPORT ON FORM 10-K
UPON WRITTEN REQUEST BY ANY SHAREHOLDER ENTITLED TO VOTE AT THE MEETING,
CHARTERMAC WILL FURNISH THAT PERSON WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 WHICH IS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO. Requests should be addressed to Shannon Lizee at CharterMac
Municipal Mortgage Acceptance Company, 625 Madison Avenue, New York, New York
10022-1801.
OTHER BUSINESS
The Board of Trustees does not know of any other matters to be brought
before the Meeting except those set forth in the notice thereof. If other
business is properly presented for consideration at the Meeting, it is intended
that the proxies will be voted by the persons named therein in accordance with
their judgment on such matters.
11
<PAGE>
It is important that your Shares be represented at the Meeting. If you are
unable to be present in person, please complete, date, sign and return the
enclosed stamped, self-addressed proxy-card. Your failure to do so will increase
the costs of operating CharterMac and decrease the return on your investment.
By Order of the Board of Trustees
/s/ J. Michael Fried
May 6, 1998 J. Michael Fried
Chairman of the Board
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<PAGE>
[CharterMac Logo]
Proxy
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
625 Madison Avenue
New York, New York 10022
SOLICITED BY THE BOARD OF TRUSTEES
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Stuart J. Boesky, J. Michael Fried and Alan P.
Hirmes, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated on the reverse side, all shares of
common stock of Charter Municipal Mortgage Acceptance Company ("CharterMac")
held of record by the undersigned on April 1, 1998 at the Annual Meeting of
Shareholders to be held on June 18, 1998 and any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED, IF NO
DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE
VOTED FOR SUCH PROPOSAL.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
[SEE REVERSE SIDE] [SEE REVERSE SIDE]
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
Dear Shareholder:
Please take note of the important information enclosed with this Proxy. There
are a number of issues related to the operation of CharterMac that require your
immediate attention.
Your vote counts, and you are strongly encouraged to exercised your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy in the enclosed
postage paid envelope.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Charter Municipal Mortgage Acceptance Company
- --------------------------------------------------------------------------------
DETACH HERE
[X] Please mark votes as in this example.
1. Election of Trustees. 2. In their discretion, the proxies are
Nominees: Arthur P. Fisch authorized to vote upon any other business
and Peter T. Allen that may properly come before the meeting.
FOR WITHELD
[ ] [ ]
[ ]______________________________
For both nominees except
as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT
LEFT [ ]
Please sign exactly as name appears
hereon. Joint owners should each sign.
Executors, administrators, trustees,
guardians or other fiduciaries should give
full title as such. If signing for a
corporation, please sign in full corporate
name by a duly authorized officer.
Signature:_________________ Date:____ Signature:______________________ Date:____
