<PAGE>
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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
WESTERN INVESTMENT REAL ESTATE TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(o)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
3450 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94118
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 8, 1997
Notice is hereby given that the annual meeting of the shareholders of
Western Investment Real Estate Trust will be held at the Bank of America Center,
Bankers Club of San Francisco, Pacific Room, 52nd Floor, 555 California Street,
San Francisco, California, at 10:00 a.m., on Thursday, May 8, 1997, for the
following purposes:
(1) To elect two trustees to Class III for three-year terms to expire at the
conclusion of the 2000 annual meeting.
(2) To approve the amendment of the Declaration of Trust to authorize
issuance of preferred shares and to establish the terms for issuance.
(3) To ratify the appointment of independent auditors for the Trust.
(4) To transact any other business that may properly come before the
meeting.
All shareholders of record at the close of business on March 14, 1997, are
entitled to vote at the meeting.
A majority of the outstanding shares must be represented at the meeting in
person or by proxy in order to transact business. TO ASSURE A PROPER
REPRESENTATION AT THE MEETING PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND
MAIL IT PROMPTLY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. Your proxy will not be
used if you are personally present at the meeting and you indicate a desire to
revoke such proxy or if a subsequently dated proxy of yours is delivered prior
to or at the meeting.
Dated: San Francisco, California
March 20, 1997
/S/ BARBARA J. DONHAM
Barbara J. Donham
SECRETARY
If your shares are held in the name of a brokerage firm, bank, nominee or other
institution, only it can vote your shares. Please PROMPTLY CONTACT the person
responsible for your account and GIVE INSTRUCTIONS for your shares to be voted.
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
3450 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94118
PROXY STATEMENT
THIS STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES
BY THE MANAGEMENT OF WESTERN INVESTMENT REAL ESTATE TRUST, hereinafter called
the Trust, for use at the annual meeting of shareholders to be held on Thursday,
May 8, 1997, at 10:00 a.m., at the Bank of America Center, Bankers Club of San
Francisco, Pacific Room, 52nd Floor, 555 California Street, San Francisco,
California, and at any and all adjournments thereof, for the purposes set forth
in the Notice of Annual Meeting of Shareholders. The cost of soliciting proxies
will be borne by the Trust. In addition to solicitation by mail, proxies may be
solicited personally or by telephone by trustees, officers or other employees of
the Trust. To assist in the solicitation process, the Trust has retained Beacon
Hill Partners, Inc. The fee for such services will be approximately $10,000.
Only shareholders of record of the Trust at the close of business on March
14, 1997, will be entitled to vote at the annual meeting. The approximate date
on which the proxy statement and form of proxy are first sent or given to
shareholders will be March 20, 1997.
You are requested to sign, date and return the accompanying proxy in the
enclosed envelope. Proxies duly executed and received by the Trust on or before
10:00 a.m. on May 8, 1997, will be voted in accordance with the instructions
thereon. Such proxies may be revoked by executing and delivering to the Trust a
written revocation or by executing and delivering a subsequently dated proxy
before or at the meeting or by voting by ballot at the meeting.
As of the record date, shares of the Trust's shares of beneficial
interest were issued and outstanding, each of which is entitled to one vote at
the annual meeting. There will be no cumulative voting for the election of
trustees.
ELECTION OF TRUSTEES
NOMINEES
Two members of the Board of Trustees (Class III) are to be elected at the
1997 annual meeting. Under the terms of the Declaration of Trust, the four
trustees who are not up for election this year will continue to serve until they
stand for election as provided in the Declaration of Trust. In 1998, one of such
trustees (Class I) will stand for election for a three-year term. In 1999, the
remaining trustees (Class II) will stand for election for a three-year term. All
proxies received by the Trust will be voted in accordance with the
specifications on the proxy. Unless the proxy specifies otherwise, proxies held
by the trustees will be voted in the manner described below under "Voting" for
the election of the two nominees listed under "Trustees and Executive Officers,"
to hold office until the expiration of their three-year term and until their
respective successors shall be elected and qualified. In the unanticipated event
that any of the current nominees declines to or cannot be a candidate at the
annual meeting, all proxies held by the trustees will be voted in favor of the
remaining nominee and for such substitute nominee (if any) as shall be
designated by the trustees.
1
<PAGE>
Each of the two nominees, if elected, will serve for a three-year term to
expire at the conclusion of the 2000 annual meeting of shareholders and until
their respective successors shall be elected and qualified.
VOTING
Each shareholder will be entitled to cast one vote for each share registered
in his or her name on the record date of March 14, 1997, for each of the trustee
positions to be filled. There will be no cumulative voting for the election of
trustees.
All shares represented by proxies solicited by the trustees will be voted in
equal shares for the two nominees named hereafter, unless a proxy specifies
otherwise. The two nominees receiving the greatest number of affirmative votes
shall be elected to the office of trustee. The withholding of a vote for a
nominee will have the practical effect of voting against that nominee.
TRUSTEES AND EXECUTIVE OFFICERS
Information regarding the two Class III trustees nominated for election as
trustees this year for a term of three years expiring at the conclusion of the
2000 annual meeting of shareholders is set forth below:
<TABLE>
<CAPTION>
TRUSTEE
NAME PRINCIPAL OCCUPATION SINCE
- ---------------------------------- ---------------------------------------------------------- ------------
<S> <C> <C>
Chester R. MacPhee, Jr. Mr. MacPhee, 63, is the retired Executive Vice President 1971
and Chief Financial Officer of the Trust. During the past
five years his principal occupation has been officer and
trustee of the Trust.
Reginald B. Oliver Mr. Oliver, 58, is a private investor. He was Executive 1984
Vice President of the Pershing Division of Donaldson,
Lufkin & Jenrette Securities Corporation, an investment
banking firm, and continues to be associated with the firm
as a consultant.
<CAPTION>
SHARES BENEFICIALLY
OWNED DIRECTLY OR
INDIRECTLY AS OF TERM TO
NAME JANUARY 1, 1997((1)) EXPIRE
- ---------------------------------- ------------------------------- --------------
<S> <C> <C>
Chester R. MacPhee, Jr. 248,698(1.45%)((2)) 1997
(Class III)
Reginald B. Oliver 82,550(0.48%)((3)) 1997
(Class III)
</TABLE>
Information regarding the trustees who are not standing for election this
year and a non-trustee executive officer is set forth below:
<TABLE>
<CAPTION>
TRUSTEE
NAME PRINCIPAL OCCUPATION SINCE
- ---------------------------------- ---------------------------------------------------------- ------------
<S> <C> <C>
Dennis D. Ryan Mr. Ryan, 41, is the Executive Vice President and Chief 1994
Financial Officer of the Trust. Prior to joining the Trust
in 1993, Mr. Ryan was a financial and real estate
consultant to a variety of clients. Prior to 1992, he was
a Vice President and Chief Financial Officer of Reininga
Corporation, a shopping center development, leasing and
property management firm.
<CAPTION>
SHARES BENEFICIALLY
OWNED DIRECTLY OR
INDIRECTLY AS OF TERM TO
NAME JANUARY 1, 1997((1)) EXPIRE
- ---------------------------------- ------------------------------- --------------
<S> <C> <C>
Dennis D. Ryan 14,809(0.09%)((4)) 1998
(Class I)
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
TRUSTEE
NAME PRINCIPAL OCCUPATION SINCE
- ---------------------------------- ---------------------------------------------------------- ------------
<S> <C> <C>
O.A. Talmage Mr. Talmage, 73, is the Chairman of the Board of Trustees 1962
and Chief Executive Officer of the Trust. During the past Founder
five years his principal occupation has been officer and
trustee of the Trust.
James L. Stell Mr. Stell, 73, is the retired Vice Chairman of the Board 1985
of Lucky Stores, Inc. During the past five years his
principal occupation has been trustee of the Trust.
William A. Talmage Mr. Talmage, 49, is the President and Chief Operating 1986
Officer of the Trust. During the past five years his
principal occupation has been trustee and officer of the
Trust. He is the son of O.A. Talmage, trustee, Chairman of
the Board and Chief Executive Officer of the Trust.
Douglas S. Button Mr. Button, 45, is the Vice President, Asset Management of N/A
the Trust. Prior to joining the Trust in 1992, Mr. Button
was the Executive Vice President of Connolly Development,
Inc., a shopping center development, leasing and property
management firm. Mr. Button was employed through 1989 by
Peter P. Bollinger Investment Company, also a shopping
center development, leasing and property managment firm,
in the capacity of Vice President, Operations.
All executive officers and trustees (7 persons)............................................... --
<CAPTION>
SHARES BENEFICIALLY
OWNED DIRECTLY OR
INDIRECTLY AS OF TERM TO
NAME JANUARY 1, 1997((1)) EXPIRE
- ---------------------------------- ------------------------------- --------------
<S> <C> <C>
O.A. Talmage 191,566(1.12%)((5)) 1999
(Class II)
James L. Stell 19,000(0.11%)((6)) 1999
(Class II)
William A. Talmage 41,754(0.24%)((7)) 1999
(Class II)
Douglas S. Button 10,566(0.06%)((8)) N/A
All executive officers and trustee 608,943(3.55%)((9)) --
</TABLE>
- ----------
((1))
The number and percentage of shares shown in this table reflect beneficial
ownership in accordance with Rule 13d-3 of the Securities Exchange Act of
1934, including shares that are not owned but as to which options are
outstanding and may be exercised within 60 days of the date of this proxy
statement. Shares owned in certain cases reflect the lapse of stock options
that were included in the prior-year proxy.
((2))
Includes beneficial ownership of 5,000 shares that may be acquired within 60
days pursuant to stock options awarded under the Trust's Nonqualified Stock
Option Plan.
((3))
Includes 3,000 shares held by Mr. Oliver's wife as custodian for their
children and 30,550 shares held by Mr. Oliver as Trustee and Custodian for a
minor child under his custodial care. Mr. Oliver disclaims any ownership of
such shares.
((4))
Includes beneficial ownership of 13,000 shares that may be acquired within
60 days pursuant to stock options awarded under the Trust's Nonqualified
Stock Option Plan.
((5))
Includes beneficial ownership of 59,400 shares that may be acquired within
60 days pursuant to stock options awarded under the Trust's Nonqualified
Stock Option Plan.
((6))
Includes 4,000 shares held by Mr. Stell as Trustee for family trust. Mr.
Stell disclaims any ownership of such shares.
((7))
Includes beneficial ownership of 17,000 shares that may be acquired within
60 days pursuant to stock options awarded under the Trust's Nonqualified
Stock Option Plan.
((8))
Includes beneficial ownership of 7,000 shares that may be acquired within 60
days pursuant to stock options awarded under the Trust's Nonqualified Stock
Option Plan.
((9))
In addition to the 608,943 shares indicated above, a Trustee Emeritus
beneficially owned 96,533 shares as of 3/1/97, which would increase the
total held by all executive officers, trustees and Trustees Emeritus to
705,476, or 4.12% of total shares outstanding.
3
<PAGE>
BOARD AND COMMITTEE MEETINGS
During 1996, the Board of Trustees held five meetings and the Executive
Committee of the Board of Trustees held 13 meetings. The Executive Committee
presently comprises O.A. Talmage, William A. Talmage, Chester R. MacPhee, Jr.,
and Dennis D. Ryan. The Committee maintains such powers and exercises such
duties of the Board of Trustees in the management of the business of the Trust
as are delegated to it from time to time by the Board of Trustees.
The Trust has no standing nominating committee. It does have an Audit
Committee that meets with the Trust's auditors at least annually to review
accounting and auditing procedures, to report to the Board of Trustees any
recommended changes in auditing procedures and to recommend to the Board of
Trustees at the close of each fiscal year the independent auditing firm to be
selected for the ensuing fiscal year. The Audit Committee presently comprises
James L. Stell, Reginald B. Oliver and Chester R. MacPhee, Jr. The committee
held two meetings in 1996.
The Compensation Committee is responsible for administering and approving
compensation for trustees and officers and certain other employees. The
Compensation Committee held three meetings in 1996. The Committee presently
comprises Reginald B. Oliver, James L. Stell and Chester R. MacPhee, Jr.
Each of the trustees attended at least 75% of the total number of board
meetings and meetings of committees on which they served in 1996.
4
<PAGE>
OWNERSHIP OF SHARES
The Trust currently has one outstanding class of voting securities,
comprising shares of beneficial interest without par value.
The following table sets forth beneficial ownership of the Trust's shares
with respect to each person known by the Trust to own more than 5% of
outstanding shares as of December 31, 1996:
<TABLE>
<CAPTION>
NAME AND BUSINESS AMOUNT & NATURE OF
ADDRESS OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP PERCENT OF SHARES
- ----------------------------------------------------------------------- --------------------- ------------------
<S> <C> <C>
Smith Barney Inc. and Smith Barney Holdings, Inc.
1345 Avenue of the Americas
New York, NY 10105
and their parent company
Travelers Group Inc.
388 Greenwich Street
New York, NY 10013
The Capital Group Companies, Inc. and
Capital Research and Management Co.
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
- ---------
((1))
Capital Research and Management Company, a registered investment adviser,
and an operating subsidiary of The Capital Group Companies, Inc., exercised
as of December 31, 1996, investment discretion with respect to
shares, respectively, or a combined total of % of outstanding shares of
the Trust. Such shares are beneficially owned by various institutional
investors. Said subsidiary has no power to direct the vote of the above
shares.
Additionally, CEDE, a stock depository for brokers and other nominees, as of
the record date, holds approximately 14,808,211 shares, or 87% of the Trust's
outstanding shares, in its capacity as a stock depository.
COMPENSATION OF TRUSTEES
During 1996, Reginald B. Oliver, James L. Stell, and Chester R. MacPhee,
Jr., each received an annual independent trustee fee of $14,000 and $500 for
each Board meeting or Board committee meeting attended, other than Executive
Committee meetings. Mr. MacPhee was paid $500 per quarter for serving on the
Executive Committee. Management trustees and officers receive no compensation
from the Trust other than that shown in the Compensation Table set forth
hereafter for serving as trustees or attending meetings.
The independent trustees (other than members of the Compensation Committee)
may be awarded stock options pursuant to the Trust's Nonqualified Stock Option
Plan. No options were granted to any of the independent trustees during 1996.
5
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows for the fiscal years ending December 31, 1996,
1995 and 1994, certain compensation paid by the Trust to its Chief Executive
Officer and the other most highly compensated executive officers whose
compensation exceeded $100,000 at December 31, 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
-------------------------------------------------- COMPENSATION
OTHER ANNUAL AWARDS ALL OTHER
COMPENSATION ------------ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) OPTIONS ($)((1))
- -------------------------------------- ---- ----------- ----------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
O.A. Talmage 1996 $275,000 $ -- -- -- ((2))
CEO & Chairman 1995 275,000 $30,000 -- 51,000 -- ((2))
of the Board 1994 275,000 -- -- ((2))
William A. Talmage 1996 $185,750((3)) $ $909((4)) 5,000 $ ((5))((6))
President & Chief 1995 148,000((3)) 15,000 909((4)) 5,000 $8,850((5))
Operating Officer 1994 135,000((3)) -- 794((4)) 15,000 8,100((5))
Dennis D. Ryan 1996 $172,500((3)) $ $325((4)) 5,000 $ ((5))((6))
Executive Vice President & 1995 132,500((3)) 15,000 285((4)) 5,000 7,950((5))
Chief Financial Officer 1994 115,833((3)) -- 293((4)) 15,000 5,975((5))
Douglas S. Button 1996 $109,442((3)) $ $451((4)) 5,000 $ ((5))
Vice President, 1995 -- ((7)) -- ((7)) -- -- --
Asset Management 1994 -- ((7)) -- ((7)) -- -- --
</TABLE>
- ---------
((1))
None of the named individuals received perquisites that exceeded the lesser
of 10% of annual compensation or $50,000.
((2))
Eligible for Trustee Emeritus Program and Death and Disability Program
described hereinafter.
((3))
Includes amounts earned but deferred under the Trust's 401(k) Plan at the
election of the executive.
((4))
Cost of life insurance paid by the Trust for the benefit of the named
executives.
((5))
Comprises the Trust's employer matching contribution and discretionary
contribution under 401(k) Plan.
((6))
The Trust has entered into agreements with William A. Talmage and Dennis D.
Ryan that provide that under certain circumstances the officer will receive
a lump sum severance benefit equal to twelve months salary and benefits.
((7))
Douglas S. Button became an executive officer in 1996.
COMPENSATION PURSUANT TO PLANS
The Trust has a Trustee Emeritus Program, a Death and Disability Program and
a Nonqualified Stock Option Plan, each of which were approved and adopted by the
shareholders. The Trust also has a Tax Qualified Retirement Plan pursuant to
Section 401(k) of the Internal Revenue Code, which was adopted during 1990. In
addition, in 1996, the Trust established a bonus pool of $100,000 to be
available to certain key executives and managers provided the Trust achieved a
target level of funds from operations for the year 1996. During 1996, the Trust
had no other bonus, profit-sharing, stock purchase, deferred compensation or
other remuneration or incentive plan in effect or in effect since the date of
its organization.
6
<PAGE>
TRUSTEE EMERITUS PROGRAM AND DEATH AND DISABILITY PROGRAM
Three persons, Bernard Etcheverry, O.A. Talmage and Chester R. MacPhee, Jr.
are eligible to participate in the Trust's Trustee Emeritus, and Death and
Disability programs. Bernard Etcheverry, a founder, elected to become a Trustee
Emeritus effective January 1, 1993. These programs were adopted by the Trust and
approved by the shareholders in 1986.
A participant under the Trustee Emeritus program is eligible to become a
trustee emeritus on reaching age 65 and ceasing to be a trustee and officer of
the Trust. A trustee emeritus is required to be available to provide advice and
counsel to the Trust regarding Trust properties and investments. Participants
under the Trust's Death and Disability Program and their spouses are eligible
for certain benefits in the case of death or disability.
The amount payable to a participant under either program is $60,000 per
annum subject to increase at the discretion of the Board of Trustees. Under the
Death and Disability Program, payments continue until the number of payments
received under both programs equals the number of months the participant served
as a trustee or officer or, if sooner, until the death of the last to survive of
the participant and his eligible spouse.
If the Trust is terminated or an eligible trustee or an eligible trustee
emeritus is removed other than for good cause shown or not reelected as a
trustee, the trustee will be entitled to receive as a lump sum severance payment
an amount equal to the actuarially determined present value of the payments he
would have received under the programs. If an eligible trustee or trustee
emeritus is removed as a result of a change of control in the Trust the
severance payments made under the programs may be subject to provisions of the
Internal Revenue Code, which impose an excise tax payable by the recipient on
certain excess payments and make such payments not deductible by the Trust.
Where such Internal Revenue Code sections are applicable, the portion of the
severance payment which is an excess payment subject to excise tax will be
increased by dividing the excess payment by 25%. Messrs. Talmage, Etcheverry and
MacPhee, Jr. would have been entitled to $532,000, $1,242,000 and $1,595,600,
respectively, had they qualified for increased lump sum severance payments in
connection with a change of control under the programs as of December 31, 1996.
The three persons eligible for benefits under the programs, as a group, would
have been entitled to receive a total of $3,369,600, had they all qualified for
increased lump sum severance payments under the programs as of December 31,
1996. Compensation under the Trustee Emeritus Program is expensed as earned by
the trustee emeritus. The Death and Disability Program is unfunded; however,
Death and Disability Program costs are accrued. Each of the participants has
satisfied the time in service requirements for the programs.
NONQUALIFIED STOCK OPTION PLAN
Under the Nonqualified Stock Option Plan (the "Plan") for trustees, officers
and employees of the Trust, the Compensation Committee of the Board of Trustees
determines the persons to whom options are granted, the time at which options
are granted to each person, and the terms and conditions of exercise of options.
A maximum of three hundred thousand (300,000) shares of beneficial interest may
be issued under the Plan. The exercise price per share is the fair market value
at the date
7
<PAGE>
of the grant. Each option vests and becomes exercisable as to 20% of the shares
covered by each grant at the end of each year for five years. No option is
exercisable after six years from the date of the grant. Options to purchase
shares that have been granted and have not lapsed are as follows:
<TABLE>
<CAPTION>
TOTAL NO.
OF UNEXPIRED
OPTIONS PRICE PER
GRANT DATE GRANTED SHARE
- ---------- ------------- ---------
<S> <C> <C>
11/18/91 34,000 $ 11.44
11/23/92 15,400 12.63
11/11/93 62,000 13.81
6/28/94 25,000 13.88
11/11/94 76,600 12.31
11/13/95 30,000 11.00
11/12/96 29,000 13.31
</TABLE>
In each instance, the option price was 100% of the fair market value at the
date of the grant.
STOCK OPTION GRANTS AND EXERCISES
Stock options were granted to the executive officers during 1996 as shown on
the following table:
STOCK OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
TOTAL ANNUAL RATES OF
OPTIONS SHARE
GRANTED TO PRICE APPRECIATION
EMPLOYEES EXERCISE FOR OPTION TERM
OPTIONS IN FISCAL OR BASE EXPIRATION --------------------
NAME GRANTED((1)) YEAR PRICE DATE 5% 10%
- ------------------------------------------- ----------- ----------- ---------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
O.A. Talmage -- -- -- -- -- --
William A. Talmage 5,000 17.2% $ 13.31 11/12/2002 $ 22,600 $ 51,200
Dennis D. Ryan 5,000 17.2% 13.31 11/12/2002 22,600 $ 51,200
Douglas S. Button 5,000 17.2% 13.31 11/12/2002 22,600 $ 51,200
</TABLE>
- ---------
((1))
Options are exercisable as to 20% of the shares covered by the grant at the
end of each year for five years. No option is exercisable after six years
from the date of grant. No SARs have been granted.
The number and value of unexercised options at year-end 1996 are shown on
the following table:
FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1996 AT DECEMBER 31, 1996((1))
-------------------------------- --------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------------------------------- -------------------------------- --------------------------
<S> <C> <C>
O.A. Talmage 59,400/48,600 $ 265,304/$192,036
William A. Talmage 17,000/18,000 $ 199,260/$154,790
Dennis D. Ryan 13,000/22,000 $ 84,860/$154,790
Douglas S. Button 7,000/13,000 $ 86,120/$93,555
</TABLE>
- ---------
((1))
The fair market value of shares at December 31, 1996 was $13.00.
8
<PAGE>
TAX QUALIFIED RETIREMENT PLAN PURSUANT TO IRS CODE SECTION 401(K)
The Trust adopted a Tax Qualified Retirement Plan pursuant to Section 401(k)
(the "401(k) Plan") in 1990. Under the 401(k) Plan, the Trust makes
contributions as follows: (a) the total amount of compensation deferred by all
eligible employees through salary-deferral contributions to the 401(k) Plan; (b)
a discretionary matching contribution equal to a percentage of the amount of
employee salary-deferral contributions, which percentage will be determined each
year by the Trust; and (c) a discretionary contribution determined each year by
the Trust. All salaried employees are eligible to become 401(k) Plan
participants on completion of six months of employment and the attainment of age
21; however, under the 401(k) Plan the Trust will not make discretionary
matching contributions or discretionary profit-sharing contributions on behalf
of O.A. Talmage, inasmuch as he is eligible to participate in the Trustee
Emeritus Program and Death and Disability Program. Compensation deferrals and
discretionary matching contributions are fully vested and any discretionary
contributions become vested as follows: 20% at 2 years of service; 40% at 3
years of service; 60% at 4 years of service; 80% at 5 years of service and 100%
at 6 years of service. For the year 1996, the Trust made approximately $ of
discretionary contributions for all eligible employees. Inasmuch as the 401(k)
Plan is a defined contribution plan, rather than a defined benefit plan, it is
not possible to definitively estimate annual benefits upon retirement.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Trustees ("Committee"), is
responsible for administering and approving salaries for management trustees,
officers and department heads, as well as any employee earning a base salary of
$60,000 or above. In addition, the Committee reviews the general compensation
strategy and approves the percentage-range increases for all staff members. The
review process includes performance evaluation as well as consideration for
promotion and succession. During 1996, the Committee comprised the undersigned,
all of whom are non-employee trustees.
COMPENSATION PHILOSOPHY AND OBJECTIVES
It is the philosophy of the Committee and the Trust that in order to meet
the Trust's goal to increase long-term shareholder value, the Trust must develop
and maintain a compensation program that attracts, motivates and retains
qualified executives.
The compensation program includes a base salary, bonus, 401(k) plan and
stock option plan. The Committee reviews the entire program annually. The
Committee consults several sources of information and data related to salary
trends in similar companies and other real estate investment trusts. The
Committee also evaluates the Trust's operating performance, financial position
and the results compared with the industry and real estate in general. The
primary measure of performance reviewed by the Committee is the level of funds
from operations generated and available for distribution to shareholders.
BASE SALARY AND BONUS
Executive salaries are determined through an evaluation of the
responsibilities of the position held and the experience of the individual, and
by reference to salary levels paid in comparable companies for comparable
positions. The Committee monitors on an annual basis certain operating
9
<PAGE>
ratios of other real estate investment trusts, including total administrative
expenses as a percentage of assets. Substantial increases were granted to two
executive officers in 1996, bringing their compensation in line with industry
levels.
In 1996, the Committee approved a bonus pool of $100,000 to be available to
certain key executives and managers provided the Trust achieved a target level
of funds from operations for the year 1996. The target level of funds from
operations to be achieved in 1996 was met and the bonus pool was distributed to
employees, including Mr. O.A. Talmage, the Trust's Chief Executive
Officer. Mr. Talmage received a bonus payment of $ in addition to his base
salary of $275,000. Mr. Talmage's base salary was not increased in 1996.
SEVERANCE AGREEMENTS
The committee believes that it is in the best interest of the Trust and its
shareholders to assure management stability and continuity. The committee also
believes that it is critical that key executives be focused on the business of
the Trust and that their energies be directed towards evaluating business issues
and opportunities without concern for their short-term job security. To achieve
the desired continuity and focus, the Trust entered into severance agreements
with William A. Talmage and Dennis D. Ryan on September 3, 1996.
STOCK OPTIONS
The Committee believes that the best interest of shareholders and executives
will be closely aligned by providing executives, as well as other key officers
and employees who have substantial responsibility for the management of the
Trust and its assets, an opportunity to increase their ownership in the Trust.
Stock option award levels are based on the recipient's responsibilities, ability
to influence shareholder value and total compensation. Stock options provide a
long-term incentive for the creation of shareholder value because a stock option
provides a benefit only from appreciation in the price of the Trust's shares of
beneficial interest over the term of the option.
During 1996, thirteen employees received stock option grants. The Committee
did not grant stock options to Mr. Talmage, the CEO, during 1996.
Submitted by the Compensation
Committee
Reginald B. Oliver, CHAIRMAN
Chester R. MacPhee, Jr.
James L. Stell
10
<PAGE>
COMPANY PERFORMANCE
PERFORMANCE MEASUREMENT COMPARISON
TOTAL RETURN
WESTERN INVESTMENT REAL ESTATE TRUST
NAREIT EQUITY INDEX AND S&P 500 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WIRET NAREIT EQUITY INDEX (2) S&P 500 INDEX
<S> <C> <C> <C>
1991 $100.00 $100.00 $100.00
1992 $118.67 $114.59 $107.67
1993 $133.34 $137.11 $118.43
1994 $145.08 $141.46 $119.97
1995 $133.34 $163.06 $164.68
1996 $176.43 $220.56 $202.74
</TABLE>
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((1))
The total return on investment assumes dividends reinvested on dividend
payment dates for each of the periods for the Trust, the NAREIT Equity Index
(peer group) and the S&P 500 Index.
((2))
The NAREIT Equity Index includes 166 tax-qualified REITS (all of which are
listed on either the New York Stock Exchange, American Stock Exchange or the
NASDAQ National Market System). The 166 REITS have a total market
capitalization of $78.3 billion. The NAREIT Equity Index is maintained by
the National Association of Real Estate Investment Trusts, Washington, D.C.
11
<PAGE>
PROPOSAL TO AMEND THE TRUST'S DECLARATION OF TRUST TO AUTHORIZE TWO MILLION
PREFERRED SHARES, WITHOUT PAR VALUE, AND ESTABLISH THE TERMS THEREOF
GENERAL
The Board of Trustees of the Trust has unanimously approved, and recommends
that the shareholders approve, an amendment to the Trust's Declaration of Trust
(the "Declaration of Trust") that would authorize Two Million preferred shares
of beneficial interest, without par value (the "Preferred Shares"), and
establish the terms thereof. The Board of Trustees believes it would be
beneficial to the Trust's shareholders for the Trust to have the ability, like
many other public real estate investment trusts ("REITs"), to issue non-voting
preferred shares as a source of capital to help finance the growth of the Trust.
The Board of Trustees has adopted a policy that no preferred shares will be
issued if the principal purpose of such issuance would be to discourage an
unsolicited takeover of the Trust. The full text of Article 4.1 of the
Declaration of Trust reflecting this amendment is attached as Exhibit A.The
following description of the proposed amendment is qualified in its entirety by
reference to Exhibit A.
DESCRIPTION OF PREFERRED SHARES
The Declaration of Trust currently authorizes the issuance of an unlimited
number of no par shares of beneficial interest of the same class and with equal
rights (the "Shares of Beneficial Interest"). The proposed amendment would
permit the Trust to authorize the issuance of up to Two Million Preferred
Shares, from time to time in one or more series, with the terms and conditions
as set forth in this amendment and as determined by the Board of Trustees. The
terms of the Preferred Shares would generally be as described below.
VARIATIONS IN SERIES; PRIORITY. All series of Preferred Shares would rank
equally with, and would be identical in all respects to, all other series of
Preferred Shares, except that the Board of Trustees may fix with respect to each
series without further action by the shareholders, prior to the issuance
thereof, the following: (a) the designation of the series which may be by
distinguishing number, letter or title, (b) the authorized number of shares of
the series, which number the Board of Trustees may (except where otherwise
provided in the creation of the series) increase or decrease from time to time
before or after the issuance thereof (but not below the number of shares thereof
then outstanding), (c) the dividend rate or rates of the series, including the
means by which such rates may be established, (d) whether or not dividends would
be cumulative and, if so, the date or dates from which dividends would
accumulate, (e) with respect to all Preferred Shares, the dates on which and the
period or periods for which dividends, if declared, would be payable, including
the means by which such dates and periods may be established, (f) redemption
rights and prices, if any, (g) the terms and amounts of the sinking fund, if
any, (h) the amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Trust, (i) whether or not the shares of the series would be convertible
into Shares of Beneficial Interest and, if so, the conversion rate or rates or
price or prices, any adjustments thereof and all other terms and conditions upon
which such conversion may be made, (j) restrictions on the issuance of shares of
the same or any other series, and (k) the specific conditions upon which a
holder of the Preferred Shares would be entitled to vote. All series of
Preferred Shares would rank, as to dividend and liquidation rights, on a parity
with each other series of Preferred Shares and senior to the Shares of
Beneficial Interest.
12
<PAGE>
DIVIDEND RIGHTS The holders of each series of Preferred Shares would be
entitled to receive, if declared, dividends in cash at the rate determined for
such series and no more, payable on the dates fixed for such series, before any
dividends may be paid or any distribution made on the Shares of Beneficial
Interest or other shares of the Trust ranking junior to the Preferred Shares.
With respect to each series of cumulative Preferred Shares, such dividends would
be cumulative from the dates fixed for the series. With respect to each series
of noncumulative Preferred Shares, dividends would not be cumulative (I.E., if
the Board of Trustees were to fail to declare a dividend payable on a dividend
payment date on any noncumulative Preferred Shares, the holders of such series
of noncumulative Preferred Shares would have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date and the
Trust would have no obligation to pay any dividend for such period, whether or
not dividends on such series of noncumulative Preferred Shares were declared
payable on any future dividend period).
RESTRICTIONS ON SHARES OF BENEFICIAL INTEREST. If and so long as there is
any arrearage in the payment of dividends on or in meeting any sinking fund
requirement of any outstanding Preferred Shares, no dividend or other
distribution could be made in respect of Shares of Beneficial Interest of the
Trust or any other shares ranking junior to the Preferred Shares (except a
dividend or distribution payable in Shares of Beneficial Interest or other
shares ranking junior to the Preferred Shares).
LIQUIDATION OR DISSOLUTION. In the event of the voluntary or involuntary
liquidation or dissolution of the Trust, to the extent assets remain after
payment to creditors in full and before any distribution to holders of Shares of
Beneficial Interest or other shares ranking junior to the Preferred Shares, the
holders of each series of Preferred Shares would be entitled to receive the
applicable liquidation price fixed for their respective series, plus an amount
equal to accrued and unpaid dividends to the date of payment (which in the case
of noncumulative Preferred Shares shall not include any accumulation in respect
of unpaid dividends for prior dividend periods), ratably in proportion to their
full preferential amounts. The merger or consolidation of the Trust or the sale,
lease or conveyance of all or substantially all its assets would not be deemed
to be a liquidation or dissolution for this purpose.
VOTING RIGHTS. The holders of Preferred Shares would have no voting rights
except as required by law and as follows: (a) the holders of Preferred Shares
may have certain rights to vote if the Trust were in default in the payment of
the dividends on Preferred Shares; or (b) the consent of the holders of at least
two thirds of a class of Preferred Shares would be neccessary to (1) amend the
Declaration of Trust, whether in connection with a merger or consolidation or
otherwise, in a manner adversely and materially affecting the preference or the
voting or other rights of the holders of such class of Preferred Shares or (2)
authorize any shares, or any security convertible into shares, in either case
ranking prior to such class of Preferred Shares. In all cases in which the
holders of Preferred Shares would have the right to vote, each such holder would
be entitled to one vote for each Preferred Share held by such holder.
REDEMPTION, SINKING FUND AND PURCHASE PROVISIONS. A series of Preferred
Shares may be subject to redemption at the option of the Board of Trustees of
the Trust or be subject to sinking fund or mandatory redemption, to the extent
provided in the terms of such series. Preferred Shares which
13
<PAGE>
have been redeemed or purchased by the Trust resume the status of authorized but
unissued Preferred Shares without serial designation and may be reissued by the
Trust from time to time as Preferred Shares of any series, except as may be
limited by the terms of a series.
Holders of Preferred Shares would have no preemptive rights to subscribe to
or for any additional shares or other securities of the Trust. Preferred Shares
may be issued by the Trust, as and when the Board deems it desirable, without
further shareholder action.
REASONS FOR AND EFFECTS OF PROPOSED AMENDMENTS
The principal reasons for authorizing the issuance of Preferred Shares are
as follows:
(i)
In the current environment, the Trust believes that it is important to
enhance its ability to grow its asset base and capitalization.
Authorizing the issuance of Preferred Shares would give the Trust greater
flexibility in future financings by providing an additional source of
capital.
(ii)
The financial cost to the Trust of Preferred Shares is expected to be
less than the cost of common equity.
(iii)
The proposed Preferred Shares would have no maturity date. As a
consequence, unlike debt securities, the Trust would not be required to
repay or refinance the Preferred Shares.
(iv)
Increasingly, REITs are using preferred shares in their capital
structures. Approximately 25 other public REITs have issued preferred
shares. To the extent that other REITs have the flexibility to issue
preferred shares and the Trust does not, the Trust is at a competitive
disadvantage in growing its portfolio and realizing the related benefits.
The availability of Preferred Shares might be considered as having the
effect of discouraging a merger, sale of the Trust's assets or similar
transaction, or attempt by others to acquire control of the Trust because the
issuance of Preferred Shares could be used to dilute the share ownership of a
person or entity seeking to obtain control of the Trust. In this respect,
certain companies have issued, as a dividend to the holders of their common
shares, preferred shares having terms designed to discourage third parties from
acquiring control of such companies. Additionally, issuance of the Preferred
Shares could result in there being a class of securities outstanding that would
have conversion features and preference over the Shares of Beneficial Interest
with respect to dividends and to distributions in liquidation and could also
result in the dilution of net income per share and book value of the Shares of
Beneficial Interest. Moreover, an issuance or private placement of Preferred
Shares to or with persons supporting current management of the Trust could be
used to prevent a merger, consolidation or other transaction or attempt by
others to acquire control of the Trust, because the terms of the Preferred
Shares could require that the holders thereof approve all such transactions by a
greater than majority vote when such transactions would adversely affect the
preferences or voting or other rights of the holders of such class of Preferred
Shares. As a result, a vote by the holders of such shares could block such a
merger, consolidation or similar transaction which the holders of a majority of
the outstanding Shares of Beneficial Interest of the Trust believed desirable.
ALTHOUGH THE PREFERRED SHARES COULD BE AVAILABLE FOR ANY OF THE FOREGOING
PURPOSES, THE BOARD OF TRUSTEES HAS ADOPTED A POLICY THAT NO PREFERRED SHARES
WILL BE ISSUED IF THE PRINCIPAL PURPOSE OF SUCH ISSUANCE WOULD BE TO DISCOURAGE
AN UNSOLICITED TAKEOVER OF THE TRUST.
14
<PAGE>
The Trust has no plans at this time to issue any Preferred Shares, but the
Trust will evaluate the merits of issuing Preferred Shares as opportunities
arise and circumstances change. The Board believes it advisable, for the
foregoing reasons, that the Declaration of Trust be amended to authorize the
issuance of Preferred Shares and to establish certain of the terms and
preferences for such Preferred Shares.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of two-thirds of the outstanding Shares
of Beneficial Interest of the Trust is required to adopt the proposed amendment
to the Declaration of Trust.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE PROPOSAL
TO APPROVE THE AMENDMENT TO THE DECLARATION OF TRUST.
APPOINTMENT OF AUDITORS
KPMG Peat Marwick LLP, Certified Public Accountants, were the auditors for
the Trust for the year ended 1996. The Board of Trustees has appointed KPMG Peat
Marwick LLP as auditors for the year ending December 31, 1997, and recommends to
the shareholders that such appointment be ratified. Representatives of KPMG Peat
Marwick LLP are expected to attend the annual meeting with the opportunity to
make a statement if desired and are also expected to be available to respond to
appropriate questions from the shareholders at the annual meeting.
OTHER BUSINESS
The management of the Trust knows of no matters to be brought before the
meeting other than those set forth in the Notice of Annual Meeting of
Shareholders. If, however, any other matters of which management is not now
aware are presented for action, it is the intention of the proxy holders named
in the enclosed proxy to vote in accordance with their discretion on such
matters. The giving of the proxy does not preclude the right to vote in person
should the shareholder giving it so desire, as the proxy may be revoked at any
time prior to its having been exercised.
15
<PAGE>
SHAREHOLDER PROPOSALS
Any shareholder proposal to be submitted for inclusion in proxy-soliciting
material for the 1998 annual shareholder's meeting must be received by the
Secretary of the Trust no later than December 1, 1997.
Dated: San Francisco, California
March 20, 1997
/S/ BARBARA J. DONHAM
Barbara J. Donham
SECRETARY
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A COPY OF THE TRUST'S 1996 ANNUAL REPORT ON FORM 10-K FILED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION, INCLUDING FINANCIAL STATEMENTS,
SCHEDULES AND EXHIBITS, WILL BE PROVIDED WITHOUT CHARGE TO EACH SHAREHOLDER WHO
SENDS A WRITTEN REQUEST TO INVESTOR RELATIONS, WESTERN INVESTMENT REAL ESTATE
TRUST, AT 3450 CALIFORNIA STREET, SAN FRANCISCO, CALIFORNIA 94118.
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16
<PAGE>
EXHIBIT A
SECTION 4.1 Capitalization
a. GENERAL. The shares of the Trust shall be comprised of two classes,
designated respectively "Common Shares" and "Preferred Shares." The Common
Shares and Preferred Shares shall be without par value. The total number of
Common Shares shall not be limited. The total number of Preferred Shares shall
be 2,000,000 shares. The Preferred Shares may be issued from time to time in one
or more series. All Preferred Shares shall be of equal rank and shall be
identical, except in respect of the matters that may be fixed by the board of
trustees, as hereinafter provided, and each share of a series shall be identical
with all other shares of such series, except as to the dates on which and the
periods for which dividends may be payable. The board of trustees is authorized
to cause such Preferred Shares to be issued in one or more series and, with
respect to each such series, to determine and fix prior to the issuance thereof
(and thereafter, to the extent provided in the clause above) the following: (i)
the designation of the series, which may be by distinguishing number, letter or
title, (ii) the authorized number of shares of the series, which number the
board of trustees may (except where otherwise provided in the creation of the
series) increase or decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then outstanding), (iii) the
dividend rate or rates of the series, including the means by which such rates
may be established, (iv) whether or not dividends would be cumulative and, if
so, the date or dates from which dividends would accumulate, (v) with respect to
all Preferred Shares, the dates on which and the period or periods for which
dividends, if declared, would be payable, including the means by which such
dates and periods may be established, (vi) redemption rights and prices, if any,
(vii) the terms and amounts of the sinking fund, if any, (viii) the amounts
payable on shares of the series in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Trust, (ix) whether
or not the shares of the series shall be convertible into Common Shares and, if
so, the conversion rate or rates or price or prices, any adjustments thereof and
all other terms and conditions upon which such conversion may be made, (x)
restrictions on the issuance of shares of the same or any other series, and (xi)
the specific conditions upon which a holder of the Preferred Shares shall be
entitled to vote. All series of Preferred Shares shall rank, as to dividend and
liquidation rights, on a parity with each other series of Preferred Shares and
senior to the Common Shares.
b. DIVIDEND RIGHTS. The holders of each series of Preferred Shares shall
be entitled to receive, out of funds legally available therefore, when and if
declared by the board of trustees, dividends in cash at the rate or rates
determined for such series and no more, payable on the dates fixed for such
series, before any dividends may be paid or any distribution made on the Common
Shares or other shares of the Trust ranking junior to the Preferred Shares. With
respect to each series of cumulative Preferred Shares, such dividends shall be
cumulative from the dates fixed for the series. Such dividends shall accrue, in
the case of Preferred Shares of each particular series, from and after the date
or dates fixed with respect to such series; provided, however, that if the board
of trustees fails to declare a dividend payable on a dividend payment date on
any noncumulative Preferred Shares, the holders of such noncumulative Preferred
Shares shall have no right to receive a dividend in respect of the dividend
period ending on such dividend payment date, and the Trust shall have no
obligation to pay the dividend accrued for such period, whether or not dividends
on such noncumulative Preferred Shares are declared payable on any future
dividend payment date.
<PAGE>
c. RESTRICTIONS ON DIVIDENDS TO COMMON SHARES. If and so long as there is
any arrearage in the payment of dividends on or in meeting any sinking fund
requirement of any outstanding Preferred Shares, no dividend or other
distribution shall be made in respect of Common Shares or any other shares
ranking junior to the Preferred Shares (except a dividend or distribution
payable in Common Shares or other shares ranking junior to the Preferred
Shares).
d. LIQUIDATION OR DISSOLUTION. In the event of the voluntary or
involuntary liquidation, dissolution or winding up of the Trust, to the extent
assets remain after payment to creditors in full and before any distribution to
holders of Common Shares or other shares ranking junior to the Preferred Shares,
the holders of each series of Preferred Shares shall be entitled to receive the
applicable liquidation price fixed for their respective series, plus an amount
equal to accrued and unpaid dividends to the date of payment (which in the case
of noncumulative Preferred Shares shall not include any accumulation in respect
of unpaid dividends for prior dividend periods), ratably in proportion to their
full preferential amounts. The merger or consolidation of the Trust or the sale,
lease or conveyance of all or substantially all its assets shall not be deemed
to be a liquidation, dissolution or winding up for this purpose.
e. VOTING RIGHTS. The holders of Preferred Shares shall have no voting
rights except as required by law or as provided in this section: (i) the holders
of Preferred Shares may have certain rights to vote if the Trust is in default
in the payment of the dividends on Preferred Shares; or (ii) the consent of the
holders of at least two thirds of a class of Preferred Shares will be necessary
to (1) amend the Declaration of Trust, whether in connection with a merger or
consolidation or otherwise, in a manner adversely and materially affecting the
preference or the voting or other rights of the holders of such class of
Preferred Shares, or (2) authorize any shares, or any security convertible into
shares, in either case ranking prior to such class of Preferred Shares. In all
cases in which the holders of Preferred Shares have the right to vote, each such
holder shall be entitled to one vote for each Preferred Share held by such
holder.
f. REDEMPTION, SINKING FUND AND PURCHASE PROVISIONS. A series of Preferred
Shares may be subject to redemption at the option of the board of trustees or be
subject to sinking fund or mandatory redemption, to the extent provided in the
terms of such series. Preferred Shares which have been redeemed or purchased by
the Trust shall resume the status of authorized but unissued Preferred Shares
without serial designation and may be reissued by the Trust from time to time as
Preferred Shares of any series, except as may be limited by the terms of a
series. At least 20 days prior to the date fixed for any redemption of Preferred
Shares (the "Redemption Date"), written notice shall be mailed, first class
postage prepaid, to each holder of record (at the close of business on the
business day next preceding the day on which notice is given) of the Preferred
Shares to be redeemed, at the address last shown on the records of the Trust for
such holder or given by the holder to the Trust for the purpose of notice or if
no such address appears or is given at the place where the principal executive
office of the Trust is located, notifying such holder of the redemption to be
effected, specifying the number of shares to be redeemed from such holder, the
Redemption Date, the redemption price as determined by the board of trustees,
the place at which payment may be obtained and calling upon such holder to
surrender to the Trust, in the manner and at the place designated, the
certificate or certificates representing the shares to be redeemed (the
"Redemption Notice"). On or after the Redemption Date, each holder of Preferred
Shares to be redeemed shall surrender to the Trust the certificate or
certificates representing such shares, in the manner and at the place designated
in the Redemption Notice, and thereupon the redemption price of such shares
shall be payable to the order of the person
<PAGE>
whose name appears on such certificate or certificates as the owner thereof and
each surrendered certificate shall be cancelled. In the event less than all the
shares represented by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares. From and after the Redemption
Date, unless there shall have been a default in payment of the redemption price,
all rights of the holders of such shares as holders of Preferred Shares (except
the right to receive the redemption price without interest upon surrender of
their certificate or certificates) shall cease with respect to such shares, and
such shares shall not thereafter be transferred on the books of the Trust or be
deemed to be outstanding for any purpose whatsoever. All shares of Preferred
Shares not redeemed shall remain outstanding and entitled to all the rights and
preferences provided herein.
<PAGE>
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WESTERN INVESTMENT REAL ESTATE TRUST
ANNUAL MEETING OF SHAREHOLDERS
MAY 8, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints O.A. Talmage, Chester R. MacPhee, Jr.,
Reginald B. Oliver, James L. Stell, William A. Talmage and Dennis D. Ryan as
Proxies, each with the power to appoint his substitute, and hereby authorizes
each of them to represent and to vote, as designated below, all the shares of
beneficial interest of Western Investment Real Estate Trust held of record by
the undersigned on March 14, 1997 at the annual meeting of shareholders to be
held on May 8, 1997 or any adjournment thereof.
Should the undersigned be present and choose to vote at the meeting or at any
adjournment or postponements thereof, and after notification to the Secretary of
the Trust at the meeting of the shareholder's decision to terminate this proxy,
then the power of the attorneys or proxies shall be deemed terminated and of no
further force and effect. This proxy may also be revoked by filing a written
notice of revocation with the Secretary of the Trust or by duly executing a
proxy bearing a later date.
IMPORTANT: PLEASE DATE AND SIGN ON REVERSE SIDE.
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* FOLD AND DETACH HERE *
<PAGE>
This proxy will be voted as directed, but if no instructions are specified, this
proxy will be voted FOR each of the propositions stated.
Please mark
your votes as /X/
indicated in
this example
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSITIONS.
FOR VOTE
WITHHELD
1. The election as trustees all nominees / / / /
listed below
(except as marked to the contrary).
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
CHESTER R. MACFEE, JR. AND REGINALD B. OLIVER
FOR AGAINST ABSTAIN
2. Approval of the amendment of the Declaration / / / / / /
of Trust to authorize issuance of preferred
shares and to establish the terms for issuance.
FOR AGAINST ABSTAIN
3. Ratification of the appointment of KPMG Peat / / / / / /
Marwick LLP as auditors for the fiscal year
ending December 31, 1997.
4. In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before the meeting or any adjournment or
postponement thereof.
If any other business is presented at the meeting, this proxy will be voted by
those named in this proxy in their best judgement. At the present time, the
Board of Trustees knows of no other business to be presented at the meeting.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
The undersigned acknowledges receipt from the Trust, prior to the execution of
this proxy, of notice of the Meeting, a Proxy Statement dated March 20, 1997 and
an Annual Report to shareholders.
I plan to attend the meeting. / /
Signature(s) __________________________________ Dated____________, 1997
Please sign exactly as your name(s) appear(s) to the left. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
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* FOLD AND DETACH HERE *
