SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 ss.240.14a-11(c) or ss.240.14a-12
Charter Municipal Mortgage Acceptance Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
--------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
--------------------------------------------------------------------
4. Proposed maximum aggregate value 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 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:
--------------------------------------------------------------------
<PAGE>
CHARTER MUNICIPAL MORTGAGE
ACCEPTANCE COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
on
June 14, 2000
-------------
April 30, 2000
To the Shareholders of Charter Municipal Mortgage Acceptance Company:
NOTICE IS HEREBY GIVEN THAT the 2000 Annual Meeting of Charter Municipal
Mortgage Acceptance Company ("CharterMac") will be held Wednesday, June 14, 2000
at 1:30 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 2003.
(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.
This year, for the first time, you can vote your CharterMac shares of
beneficial interest by Internet or phone. Follow the instructions on the
enclosed proxy card if you wish to do so. Or, if you prefer to vote by regular
mail, please sign, date and return the enclosed proxy card in the enclosed
return envelope as soon as possible.
The Board of Trustees has fixed the close of business on April 17, 2000 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/ Stuart J. Boesky
Stuart J. Boesky
President and Chief Executive Officer
IT IS MOST IMPORTANT THAT YOU VOTE YOUR SHARES EITHER BY INTERNET, PHONE OR
MAIL. IF YOU DECIDE TO DO SO BY MAIL, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED STAMPED, SELF-ADDRESSED PROXY CARD.
YOUR FAILURE TO PROMPTLY VOTE YOUR SHARES INCREASES THE OPERATING COSTS OF YOUR
INVESTMENT.
YOU ARE CORDIALLY INVITED TO PERSONALLY ATTEND THE MEETING, BUT YOU SHOULD VOTE
BY PHONE, ON THE INTERNET OR BY MAIL WHETHER OR NOT YOU ATTEND THE MEETING.
2
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
625 MADISON AVENUE
NEW YORK, NEW YORK, 10022
---------------
PROXY STATEMENT
---------------
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
Wednesday, June 14, 2000 at 1:30 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 1, 2000. 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 17, 2000 (the "Record
Date") will be entitled to vote at the Meeting or any adjournments thereof.
This year, for the first time, Shareholders are able to vote their Shares
by telephone or on the Internet. If you wish to vote your Shares by telephone or
the Internet, follow the instructions on the attached proxy card.
Shares represented by properly executed proxy cards, Internet votes or
telephone votes received by CharterMac at or prior to the Meeting will be voted
according to the instructions indicated on the proxy card. If no 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 the
Shareholder cast in person at the Meeting.
The Board of Trustees recommends a vote "FOR" each of the Trustees.
As of April 17, 2000 approximately 20,582,628 Shares of CharterMac were
outstanding, with each Share entitled to one vote on all matters that may come
before the Meeting.
MANAGEMENT
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 1999, the Board of Trustees held eleven meetings and the audit committee
held a total of three meetings. The average attendance in the aggregate of the
total number of Board and committee meetings was 92.7%. On March 15, 2000, the
Board of Trustees passed a resolution that authorized the addition of two
Trustees, an independent Trustee and an affiliated Trustee, to the CharterMac
Board of Trustees, bringing the total
3
<PAGE>
number of Trustees to seven. On December 16, 1999 J. Michael Fried resigned his
position as Chairman of the Board of Trustees and Chief Executive Officer of
CharterMac. Stephen M. Ross replaced Mr. Fried as Chairman of the Board and
Stuart J. Boesky replaced Mr. Fried as Chief Executive Officer.
The Trustees and Executive Officers of CharterMac are as follows:
<TABLE>
<CAPTION>
Year First Became
Name Age Office Held Officer/Trustee Term Expires
- ---- --- ----------- --------------- ------------
<S> <C> <C> <C> <C>
Stephen M. Ross 59 Managing Trustee,
Chairman of the Board 1999 2000
Peter T. Allen 54 Managing Trustee 1997 2001
Arthur P. Fisch 58 Managing Trustee 1997 2001
Stuart J. Boesky 43 Managing Trustee, President,
and Chief Executive Officer 1997 2000
Alan P. Hirmes 45 Managing Trustee,
Executive Vice President,
Secretary 1997 2002
Michael J. Brenner 54 Managing Trustee 2000 2001
Thomas W. White 63 Managing Trustee 2000 2002
John B. Roche (1) 42 Chief Financial Officer and
Chief Accounting Officer 1998 --
</TABLE>
- --------
(1) Mr. Roche has resigned, effective May 15, 2000. Mr. Hirmes has been
appointed interim Chief Financial Officer and interim Chief Accounting
Officer. CharterMac is in the process of hiring a new Chief Financial
Officer and a new Chief Accounting Officer.
Biographical information with respect to Messrs. Ross and Boesky is set forth
under "PROPOSAL BEFORE THE MEETING ", below.
PETER T. ALLEN is a Managing Trustee of CharterMac and 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
on the Board of Trustees of American Mortgage Acceptance Company ("AMAC"), two
companies that are also advised by affiliates of Related Capital Company
("Related"), the real estate finance affiliate of The Related Companies, L.P.
("TRCLP")
ARTHUR P. FISCH is a Managing Trustee of CharterMac and 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
4
<PAGE>
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 AMAC.
ALAN P. HIRMES is a Managing Trustee, the Executive Vice President and the
Secretary of CharterMac and is a Senior Vice President and a Member of the sole
general partner of the Manager. Mr. Hirmes is also the sole shareholder of one
of the general partners of Related and is a Senior Managing Director of Related,
where he is responsible for overseeing the finance and accounting departments,
asset and portfolio management, and the joint venture development program. 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 graduated from Hofstra University with
a Bachelor of Arts degree. Mr. Hirmes also serves on the Board of Directors of
Aegis.
MICHAEL J. BRENNER is a Managing Trustee of CharterMac, and is the Executive
Vice President and Chief Financial Officer of TRCLP. Prior to joining TRCLP in
1996, Mr. Brenner was a partner with Coopers & Lybrand, having served as
managing partner of its Industry Programs and Client Satisfaction initiatives
from 1993-1996, managing partner of the Detroit group of offices from 1986-1993
and Chairman of its National Real Estate Industry Group from 1984-1986. Mr.
Brenner graduated summa cum laude from the University of Detroit with a
Bachelors degree in Business Administration and from the University of Michigan
with a Masters of Business Administration, with distinction. Mr. Brenner also
serves on the Board of Directors of Aegis.
THOMAS W. WHITE is a Managing Trustee of CharterMac. Mr. White retired as a
Senior Vice President of Fannie Mae in the multifamily activities department,
where he was responsible for the development and implementation of policies and
procedures for all Fannie Mae multifamily programs, including the delegated
underwriting and servicing program, prior approval program and negotiated swap
and negotiated cash purchases product lines. He was also responsible for asset
management of multifamily loans in portfolio or Mortgage-Backed Securities. Mr.
White joined Fannie Mae in November 1987 as director of multifamily product
management. He was elected Vice President for multifamily asset acquisition in
November 1998 and assumed his position of Senior Vice President in November
1990. Prior to joining Fannie Mae, he served as an investment banker with Bear
Stearns, Inc. He also was the executive vice president of the National Council
of State Housing Agencies; chief underwriter for the Michigan State Housing
Development Authority; and served as a state legislator in the state of
Michigan.
JOHN B. ROCHE is the Chief Financial Officer and the Chief Accounting Officer of
CharterMac, is a Senior Vice President and Chief Financial Officer of the
general partner of the Manager and is also a Senior Vice President of Related.
Prior to joining Related, he was the Vice President and Chief Financial Officer
of Emmes Asset Management Company, a real estate and financial services firm.
From 1991 through 1996, he was the Vice President of Finance of the Robert
Martin Company, a developer, owner and operator in Westchester County, New York.
He spent six years in Public Accounting with the firms of Peat Marwick &
Mitchell and later, Kenneth Leventhal & Co. He has been a Certified Public
Accountant in New York since 1986. Mr. Roche holds a Masters in Business
Administration from the Columbia Business School and a Bachelor of Arts in
Accounting from Queens College.
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 had three meetings
during CharterMac's fiscal year ended December 31, 1999.
The Compensation Committee's duties include the determination of
compensation, if any, of CharterMac's executive officers and of the Manager and
the administration of CharterMac's Incentive
5
<PAGE>
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, 1999. The Compensation Committee must have at least two members,
each of which must be Independent Trustees.
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.
Related Charter LLC
Year First Became
Name Age Offices Held Officer/Member
- ---- --- ------------ --------------
Stuart J. Boesky 43 Member, President and
Chief Executive Officer 1997
Alan P. Hirmes 45 Member, Senior Vice President 1997
Stephen M. Ross 59 Member 1997
John B. Roche (1) 42 Senior Vice President and Chief
Financial Officer 1998
James D. Spound 39 Senior Vice President 1998
Bruce H. Brown 46 Senior Vice President 1997
Mark J. Schlacter 49 Vice President 1997
Max E. Schlopy 63 Vice President 1998
Denise L. Kiley 40 Vice President 1997
Marc D. Schnitzer 39 Vice President 1997
John Sorel 39 Vice President 1999
Richard A. Palermo 39 Vice President, Treasurer, Controller
and Chief Accounting Officer 1997
Teresa Wicelinski 34 Secretary 1998
- -----------
(1) Mr. Roche has resigned, effective May 15, 2000. Mr. Hirmes has been
appointed interim Chief Financial Officer.
Biographical information with respect to Messrs. Hirmes and Roche is set forth
above and with respect to Messrs. Ross and Boesky is set forth under "PROPOSAL
BEFORE THE MEETING", below.
JAMES D. SPOUND 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
6
<PAGE>
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.
BRUCE H. BROWN is a Senior Vice President of the sole general partner of the
Manager and is a Senior Vice President of Related, where he is 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 is a Vice President of the sole general partner of the
Manager. Mr. Schlacter is a Vice President of Related and has been with Related
since June 1989. Mr. Schlacter is primarily responsible for the origination and
acquisition of taxable mortgage products. 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 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. He presently practices law and offers consulting services to the
real estate industry from his offices in Park City, Utah. Mr. Schlopy 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 is a Vice President of the sole general partner of the Manager
and is also a Managing Director for Related and is the Director of Related's
underwriting and asset management group. Ms. Kiley is 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. 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 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
7
<PAGE>
York. Mr. Schnitzer received a Bachelor of Science degree, summa cum laude, in
Business Administration from the School of Management at Boston University.
JOHN SOREL is a Vice President of the sole general partner of the Manager and is
a Vice President of Related. Mr. Sorel is responsible for overseeing
construction risk management for CharterMac. Prior to joining Related in
November, 1999, Mr. Sorel was a Vice President for BankBoston in their real
estate department from 1993-1999, where he originated and managed over $150
million of corporate and construction loan facilities for the low income housing
tax credit industry. From 1991-1993, Mr. Sorel worked as an Assistant Vice
President for Recoll Management. Mr. Sorel holds a Bachelor of Arts degree in
Economics from Syracuse University.
RICHARD A. PALERMO is a Vice President, the Treasurer, Chief Accounting Officer
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 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.
TERESA WICELINSKI is the Secretary of the sole general partner of the Manager.
Ms. Wicelinski joined Related in June 1992, and prior to that date was employed
by Friedman, Alprin & Green, certified public accountants. Ms. Wicelinski
graduated from Pace University with a Bachelor of Arts Degree in Accounting.
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 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 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
8
<PAGE>
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
willful 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.
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
$315,510 per annum (subject to further
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 per Share set
forth in CharterMac's Solicitation
Statement dated as of June
9
<PAGE>
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 is also 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 will
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.
Security Ownership of Certain Beneficial Owners and Management
As of April 17, 2000, 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 17, 2000, the members of the sole general partner of the
Manager own, in the aggregate, 100% of the voting stock of the sole general
partner of the Manager.
As of April 17, 2000, Trustees and senior officers of CharterMac and
members and senior officers of the sole general partner of the Manager own
directly or beneficially Shares of CharterMac as follows:
10
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Name Title Beneficial Ownership Percent of Class
- ---- ----- -------------------- ----------------
<S> <C> <C> <C>
Stephen M. Ross Chairman of the Board of 208,262 Shares(1) 1.01%
CharterMac and Member of
Related Charter
Alan P. Hirmes Trustee, Executive VP and 23,447 Shares(1) *
Secretary, of CharterMac
and Member and Senior VP
of Related Charter
Stuart J. Boesky Trustee, President and 33,795 Shares(1)(2) *
CEO of CharterMac and Member,
President and CEO of Related
Charter
Peter T. Allen Trustee of CharterMac 1,776 Shares *
Arthur P. Fisch Trustee of CharterMac 1,776 Shares *
Thomas W. White Trustee of CharterMac 0 Shares --
Michael J. Brenner Trustee of CharterMac 0 Shares --
John B. Roche (3) CFO & CAO of CharterMac and
SVP & CFO of Related Charter 1,000 Shares *
Bruce H. Brown Senior VP of Related Charter 0 Shares --
James D. Spound Senior VP of Related Charter 0 Shares --
All Senior Officers and Trustees of CharterMac
and Related Charter as a group (10 persons) 270,056 Shares(1)(2) 1.31%
</TABLE>
*Less than 1% of the outstanding Shares.
(1) 11 of these Shares are owned by the Manager, of which a majority is owned
by Messrs. Ross, Hirmes, and Boesky.
(2) 15,784 Shares are owned by BF Security Partners, of which Mr. Boesky is a
50% equity owner.
(3) Mr. Roche has resigned, effective May 15, 2000.
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, 1999, CharterMac's officers, trustees and greater than ten
percent beneficial owners complied with all applicable Section 16(a) filing
requirements.
PROPOSAL BEFORE THE MEETING
Election of Trustees
11
<PAGE>
The Board of Trustees is divided into three classes, currently consisting
of two classes of two trustees each and one class of three trustees. At the
Meeting, two Trustees are to be elected for three year terms expiring in 2003.
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.
The following table sets forth information with respect to each nominee
nominated to serve as a Trustee for a term to expire in 2003.
Name of Trustee/
Nominee for Election Age Principal Occupation
- -------------------- --- --------------------
Stephen M. Ross 59 Mr. Ross is Chairman of the Board of
Trustees of CharterMac and is a Member of
the sole general partner of the Manager. Mr.
Ross is the founder, Chairman, CEO and
Managing General Partner of TRCLP. Mr. Ross
began his career working for the accounting
firm of Coopers & Lybrand in Detroit as a
tax attorney. Later, he moved to New York,
where he worked for two large Wall Street
investment banking firms in their real
estate and corporate finance departments
before founding Related in 1972. Mr. Ross
graduated from the University of Michigan
School of Business Administration with a
Bachelor of Science degree and from Wayne
State School of Law with a Juris Doctor
degree. He then received a Master of Law
degree in Taxation from New York University
School of Law. Mr. Ross recently endowed the
Stephen M. Ross Professor of Real Estate at
the University of Michigan.
Stuart J. Boesky 43 Mr. Boesky is a Managing Trustee and the
President and Chief Operating Officer 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 is a
member of the audit committee. Mr. Boesky
also serves on the Board of Directors of
Aegis and the Board of Trustees of AMAC.
12
<PAGE>
EXECUTIVE COMPENSATION
Trustees and Management
CharterMac has three executive officers and seven Trustees (three of whom
are Independent Trustees). CharterMac does not pay or accrue any fees, salaries
or other forms of compensation to its officers other than options which may be
received under the Share Option Plan. Independent trustees receive compensation
for serving as Independent Trustees. Commencing in the calendar year 2000, Mr.
White will receive compensation at the rate of $30,000 per year, payable $20,000
in cash (or, at Mr. White'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.
Messrs. Allen and Fisch will receive compensation at the rate of $17,500 per
year payable $7,500 in cash (or, at Messrs. Allen's or Fisch'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. Prior to 2000, Messrs. Allen and Fisch
received $15,000 per year in aggregate compensation, in addition to an expense
reimbursement for attending meetings of the Board of Trustees.
The Manager, at its expense, provides all personnel necessary to conduct
CharterMac's regular business. The Manager receives various fees for advisory
and other services performed under the Management Agreement, as further
described in the "MANAGEMENT - Certain Relationships and Related Transactions"
section of this Proxy Statement. An affiliate of the Manager pays all salaries,
bonuses and other compensation (other than options which may be received under
the Share Option Plan) to the officers of CharterMac and the general partner of
the Manager. 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.
Share Option Plan
CharterMac has adopted an Incentive Share Option Plan (the "Plan"), the
purpose of which is (i) to attract and retain qualified persons as trustees and
officers and (ii) to incentivize and more closely align the financial interests
of the Manager and its employees and officers with the interests of the
Shareholders by providing the Manager with substantial financial interest in
CharterMac's success. The Compensation Committee, which is comprised of Messrs.
Allen and Fisch, administers the Plan. Pursuant to the Plan, if CharterMac's
distributions per Share in the immediately preceding calendar year exceed
$0.9517 per Share, the Compensation Committee has the authority to issue options
to purchase, in the aggregate, that number of Shares which is equal to three
percent of the Shares outstanding as of December 31 of the immediately preceding
calendar year (or in the initial year, as of October 1, 1997), provided that the
Compensation Committee may only issue, in the aggregate, options to purchase a
maximum number of Shares over the life of the Plan equal to 2,058,638 Shares (
i.e. 10% of the Shares outstanding on October 1, 1997.)
Subject to the limitations described in the preceding paragraph, if the
Compensation Committee does not grant the maximum number of options in any year,
then the excess of the number of authorized options over the number of options
granted in such year will be added to the number of authorized options in the
next succeeding year and will be available for grant by the Compensation
Committee in such succeeding year.
All options granted by the Compensation Committee will have an exercise
price equal to or greater than the fair market value of the Shares on the date
of the grant. The maximum option term is ten years from the date of grant. All
Share options granted pursuant to the Incentive Share Option Plan may vest
immediately upon issuance or in accordance with the determination of the
Compensation Committee. No
13
<PAGE>
options were granted for the years ended December 31, 1997 or December 31, 1998.
In 1999, CharterMac distributed $0.995 per Share; therefore, the Compensation
Committee is authorized to issue options for the year ended December 31, 1999,
although no options have been issued as of the date of this proxy.
Report of the Compensation Committee
The Compensation Committee is comprised of two Independent Trustees
(Messrs. Allen and Fisch). The role of the Compensation Committee is to
administer the policies governing the Plan. Because CharterMac does not pay
salaries and bonuses to the officers of CharterMac or the general partner of the
Manager, the Compensation Committee does not determine executives' salary
levels. Subject to the restrictions contained in the Plan, option compensation
is intended to be set at a level competitive with the amounts paid to the
management of similarly sized companies in similar industries. The Committee
also evaluates the performance of management when determining the number of
options to be issued.
CharterMac's grants of stock options are structured to link the
compensation of the officers of CharterMac, the officers of the general partner
of the Manager and the officers and employees of affiliates of the Manager with
CharterMac's performance. Through the establishment of the Plan, CharterMac has
aligned the financial interests of its executives (and the executives of the
Manager) with the results of CharterMac's performance, which is intended to
enhance Shareholder value. The Compensation Committee may only grant options if
certain performance levels are met and is limited in the number of options which
may be granted each year (See "Share Option Plan" above). The amount of options
which may be granted will be set at levels that the Compensation Committee
believes to be consistent with others in CharterMac's industry, with such
compensation contingent upon CharterMac's level of annual and long-term
performance.
Section 162 (m) was added to the Internal Revenue Code as part of the
Omnibus Budget Reconciliation Act of 1993. Section 162 (m) limits the deduction
for compensation paid to the Chief Executive Officer and the other executive
officers to the extent that compensation of a particular executive exceeds
$1,000,000 (less the amount of any "excess parachute payments" as defined in
Section 280G of the Code) in any one year. However, under Section 162(m), the
deduction limit does not apply to certain "performance-based" compensation
established by an independent compensation committee which conforms to certain
restrictive conditions stated under the Code and related regulations. It is
CharterMac's goal to have compensation paid to its five most highly compensated
officers qualify as performance based compensation deductible for federal income
tax purposes under Section 162 (m). Given the fact that CharterMac is externally
managed and the only compensation that currently may be paid to its executives
are options pursuant to the Plan, it is unlikely that Section 162 (m) will
present any concerns.
COMPENSATION COMMITTEE
Peter T. Allen
Arthur P. Fisch
Stock Performance Graph
The following stock performance graph compares CharterMac's performance to
the S&P 500 and the Russell 2000 stock index. CharterMac is currently one of the
companies included in the Russell 2000 stock index, an index that measures the
performance of small market capitalization companies. The graph assumes a $100
investment on October 16, 1997. All stock price performance figures includes the
reinvestment of dividends.
14
<PAGE>
Cumulative Total Return
10/16/97 12/97 12/98 12/99
-------- ----- ----- -----
CHARTERMAC $100 $102 $104 $110
S&P 500 100 103 132 160
RUSSELL 2000 100 102 95 94
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP have been and are 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,
telephone and Internet, proxies may be solicited by trustees, officers and
regular employees of CharterMac and the Manager by personal interview or
telephone.
VOTING PROCEDURES
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 2001 Annual Meeting of Shareholders must be received by CharterMac at its
principal executive office not later than January 6, 2001 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, 1999 WHICH IS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO. Requests should be addressed to Shannon Lizee at Charter
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,
15
<PAGE>
it is intended that the proxies will be voted by the persons named therein in
accordance with their judgment on such matters.
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, or vote by telephone or on the
Internet. 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/ Stuart J. Boesky
April 30, 2000 Stuart J. Boesky
President and Chief Executive Officer
16
<PAGE>
[CharterMac Logo]
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 exercise your right to vote
your shares.
This year, for the first time, you can vote your Shares by Internet or phone.
Follow the instructions on the reverse side of proxy card if you wish to do so.
If you chose to vote by mail, 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
- --------------------------------------------------------------------------------
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 Alan P. Hirmes and Michael J. Brenner, 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 17, 2000 at the Annual Meeting of Shareholders to be
held on June 14, 2000 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
17
<PAGE>
Vote By Telephone Vote By Internet
- ----------------- ----------------
Its fast, convenient and immediate! It's fast, convenient and your vote is
Call Toll-Free on a Touch-Tone Phone immediately confirmed and posted.
1-877-PRX-VOTE (1-888-779-8683)
- --------------------------------------------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement/and Proxy Card
2. Call the toll-free number 1-877-PRX-VOTE (1-877-779-8683)
3. Enter your 14-digit Voter Control Number located on your Proxy Card above
your name.
4. Follow the recorded Instructions.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card
2. Go to the Website
http://www.eproxyvote.com/chc
3. Enter your 14-digit Voter Control Number located on your Proxy Card above
your name.
4. Follow the Instructions provided.
- --------------------------------------------------------------------------------
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to www.eproxyvote.com/chc anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
- --------------------------------------------------------------------------------
DETACH HERE
|X| Please mark votes as in this example.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS
1. Election of Trustees.
Nominees: Stephen M. Ross, Stuart J. Boesky
2. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting.
FOR WITHHELD
|_| |_|
|_| _______________________________________
For both nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT RIGHT |_|
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: ______________
18
