<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:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Bresler & Reiner, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Bresler & Reiner, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:/1/
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4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------------
/1/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
[_] 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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
BRESLER & REINER, INC.
401 M STREET, S. W.
WATERSIDE MALL
WASHINGTON, D.C. 20024
___________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
___________________________
Approximate Date of Mailing:
April 22, 1997
TO THE STOCKHOLDERS:
The annual meeting of stockholders of Bresler & Reiner, Inc. (the
"Company") will be held at the offices of the Company, the Waterside Mall, 401 M
Street, S.W., Washington, D.C. on Tuesday, June 10, 1997, at 10:00 a.m. for the
following purposes:
1. To elect a Board of seven directors to serve until the next
annual meeting of stockholders and until the election and
qualification of their respective successors; and
2. To consider and transact such other business as may properly
come before the meeting.
This Proxy Statement is furnished by the Board of Directors (the
"Board") of the Company for solicitation of proxies to be used at the annual
meeting, and at any adjournment thereof. If the enclosed proxy card is signed,
dated and returned, all shares represented thereby will be voted as directed
therein. Any proxy may be revoked by the person giving it at any time before it
is exercised, by written notice to the Secretary of the Company. Abstentions
and broker non-votes will not be included in determining the number of votes
cast concerning any matter.
The stock transfer books will not be closed. Stockholders of record
on April 15, 1997, are entitled to notice of and to vote at the annual meeting.
On that date, there were 2,792,653 shares of common stock outstanding. Each
share is entitled to one vote on each of the matters presented at the meeting,
and voting is not cumulative.
Principal Stockholders
The following table lists certain information with respect to those
persons known to management to be the beneficial owners of more than five
percent of the common stock, as well as the number of shares beneficially owned
by all officers and
<PAGE>
directors as a group and by certain executive officers. This information has
been furnished by such persons.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned
as of
December 31, 1996/1/
----------------- -
Shares Percent
------ -------
<S> <C> <C> <C>
Charles S. Bresler 401 M Street, S.W. 1,022,070 36.6%
Washington, DC 20024
Burton J. and 401 M Street, S.W. 848,778 30.39%
Anita O. Reiner Washington, DC 20024
The Burton and 401 M. Street, S.W. 166,667/3/ 5.97%
Anita Reiner Washington, DC 20024 -
Charitable
Remainder Trust
Fleur Bresler 401 M Street, S.W. 143,977 5.16%
Washington, DC 20024
Certain Executive
Officers:/2/
All directors and 1,909,173 68.36%
officers as a
group
</TABLE>
- -------------------------------------
/1/ See also Notes /2/ through /5/ under "Election of Directors" below.
- - -
/2/ For information concerning Messrs. Reiner, Horowitz and Oshinsky,
-
see "Election of Directors."
/3/ In addition, the trustees of the Trust in their individual
-
capacity have the sole power to vote and invest certain shares aggregating
22,978 shares. The Trust disclaims beneficial ownership of such shares.
Charles S. Bresler votes the shares shown in the above table as
manager of a limited liability company (the "LLC"). Under the LLC's Operating
Agreement, if Mr. Bresler should resign as manager, die, or otherwise become
unable to serve as manager, then his son, Sidney Bresler, becomes manager and
may vote the shares.
If Charles Bresler ceases to be a member of the LLC, a majority of the
interests held by other members may elect to dissolve the LLC. Fleur Bresler,
spouse of Charles Bresler, holds a majority of the other interests in the LLC.
-2-
<PAGE>
Election of Directors
Seven directors are to be elected to hold office until the next annual
meeting of stockholders and until the election and qualification of their
respective successors. Management has nominated for election as directors the
persons whose names appear in the table below, all of whom are presently
directors of the Company. Unless otherwise instructed by stockholders, the
persons named in the enclosed form of proxy will vote all valid proxies received
for the election of such nominees. Management believes that all nominees will
be able to serve as directors, but if this should not be the case, the proxies
will be voted for a substitute nominee or nominees to be designated by
management.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Name, Age, Present Position Year Common Stock Beneficially
With Company and Principal First Owned as of December 31,
Occupation During Elected 1996/1/
Last Five Years Director -------------------------
---------------------------- -------- Shares Percent
------ -------
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles S. Bresler, 69, 1970 1,022,070/2/ 36.6%
Chief Executive Officer
and Chairman of the
Board of Directors
- -------------------------------------------------------------------------------
Ralph S. Childs, Jr., 69, 1994 0 0%
Director; retired since
November, 1994; prior
to that date Chairman
of the Board of Home
Federal Savings Bank
- -------------------------------------------------------------------------------
Stanley S. DeRisio, 67, 1974 0 0%
Director; Retired; Prior
to July 1996, President
of Hilb, Rogal and
Hamilton Company of
Washington, DC, a general
insurance company, since
March, 1991
- -------------------------------------------------------------------------------
Edwin Horowitz, 65 1971 36,575/3/ 1.3%
Secretary and Director
- -------------------------------------------------------------------------------
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Common Stock Beneficially
Name, Age, Present Position Year Owned as of December 31,
With Company and Principal First 1996/1/
Occupation During Elected --------------------------
Last Five Years Director Shares Percent
- -------------------------------- -------- ------ -------
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
George W. Huguely, III, 64, 1974 500 .02%
Director; Chairman of the
Board of, Galliher &
Huguely Associates, Inc.,
a building supply dealer
and a general partner
of The Huguely Companies,
a real estate investment
and management firm
- -------------------------------------------------------------------------------
William L. Oshinsky, 54 1994 1,250 .04%
Treasurer since April,
1994 and Director; prior
to that date, Assistant
Treasurer of the Company
and an officer of various
subsidiaries of the
Company
- --------------------------------------------------------------------------------
Burton J. Reiner, 68 1970 848,778/4/ 30.39%
President and Director
================================================================================
</TABLE>
/1/ This information has been furnished by each director.
-
/2/ Mr. Bresler has the sole power to vote and to invest these shares as
-
manager of a limited liability company which holds the shares. In addition
he may be deemed to share indirectly the power to vote and to invest
143,977 shares which are owned by his spouse; however, he disclaims
beneficial ownership of such shares.
/3/ Includes 11,575 shares held in trusts for his children of which Mr.
-
Horowitz and his spouse are the trustees. In addition, Mr. Horowitz may be
deemed to share indirectly the power to vote and to invest 500 shares which
are owned by each of his two children; however, he disclaims beneficial
ownership of such shares.
/4/ The power to vote and invest 846,015 of these shares is shared with
-
his spouse.
____________________________
The Board held four meetings during the fiscal year. No nominee
attended fewer than 75% of the aggregate of total meetings
-4-
<PAGE>
of the Board and the total number of meetings held by all committees of the
Board on which he served.
The Board does not have a nominating committee. Messrs. DeRisio,
Huguely and Childs are members of the Audit Committee of the Board. The Audit
Committee held one meeting during 1996. The Audit Committee was established to
review the Company's accounting and financial reporting systems and internal
financial controls. In addition, the Committee recommends to the Board the
engagement of independent auditors and reviews the scope of their audit, their
fees, the results of their engagement, and the extent of their non-audit
services to the Company, if any.
Executive Compensation
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1996, 1995 and 1994 for those persons who were, during 1996
(i) the Chief Executive Officer; and (ii) the other three most highly
compensated executive officers of the Company whose annual compensation in 1996
exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
===============================================================================
Annual
Name and Compensation
------------- All Other
Principal Position Year Salary($) Bonus($) Compensation/1/
------------------ ---- ------ ----- ------------
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles S. Bresler 1996 $213,000 $ -0- $ 460
Chief Executive Officer 1995 236,000 -0- 598
and 1994 236,000 -0- 667
Chairman of the Board of
Directors
- -------------------------------------------------------------------------------
Burton J. Reiner 1996 213,000 -0- 460
President and Director 1995 236,000 -0- 598
1994 236,000 -0- 667
- -------------------------------------------------------------------------------
Edwin Horowitz 1996 128,500 -0- 5,927
Secretary and Director 1995 142,500 -0- 5,789
1994 142,500 -0- 5,499
- --------------------------------------------------------------------------------
William L. Oshinsky 1996 100,000 5,000 708
Treasurer and Director 1995 92,500 -0- 609
1994 83,000 -0- 551
==============================================================================
</TABLE>
/1/ Amounts shown for "All Other Compensation" consist of premiums paid by the
-
Company for life insurance.
-5-
<PAGE>
- ---------------
Each director of the Company, other than Messrs. Bresler, Reiner,
Horowitz and Oshinsky, was paid an annual fee of $3,500 and a fee of $500 per
meeting attended during 1996.
In addition, the Company contributed to its retirement plan on behalf
of each executive officer of the Company named in the Summary Compensation Table
above for 1995 and 1994, and on behalf of Mr. Oshinsky for 1996. Under the
plan, benefits are determined for all employees on an actuarial basis related to
the individual employee's compensation, age, and length of service, including
service with predecessors of the Company. All compensation, up to a maximum of
$150,000, including salaries, fees and bonuses, but excluding discretionary
bonuses, are included as remuneration (or "covered compensation") under the
Company's retirement plan. The plan provides for contributions by the Company
designed to produce, commencing at retirement at age 65, an annual pension
calculated by multiplying the participant's number of years of service to a
maximum of 35 of such years, by the sum of 1.12% of a participant's average
annual covered compensation paid for the highest consecutive five years prior to
retirement, up to $62,700 (or less, depending upon participant's age), plus
1.77% of the participant's average annual covered compensation paid for such
period in excess of this dollar amount, but not in excess of a total of
$120,000. The approximate annual retirement benefits payable to participating
employees in specified remuneration and years-of-service classifications is
shown in the table below. The benefit amounts listed in the following table are
not subject to any deduction for social security benefits or other offset
amounts.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Average Annual
Covered Compensation
For Highest Years of Service
Consecutive Five Years
- ------------------------ -----------------------------------------------------------------------------------------------
10 15 20 25 30 35
-- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$110,000 $15,492 $23,238 $30,984 $38,730 $ 46,476 $ 54,222
$130,000 19,032 28,548 38,064 47,580 57,096 66,612
$150,000 22,572 33,858 45,144 56,430 67,716 79,002
$170,000 26,112 39,168 52,224 65,280 78,336 91,392
$190,000 29,652 44,478 59,304 74,130 88,956 103,782
$210,000 33,192 49,788 66,384 82,980 99,576 116,172
$219,224 34,825 52,237 69,649 87,062 104,474 120,000
</TABLE>
At December 31, 1996, Mr. Oshinsky had 29 years of credited service
under the plan. Messrs. Bresler, Reiner and Horowitz were covered by the plan
until December 31, 1995, and had, respectively, 34, 34 and 31 years of credited
service under the plan.
-6-
<PAGE>
Report on Executive Compensation/1/
Messrs. DeRisio and Childs, since March, 1995, served as members of
the Compensation Committee of the Board during 1996. The Compensation Committee
held no meetings during 1996. The Committee may make recommendations to the
Board on compensation actions, involving executive officers of the Company.
Since the Committee has not been active, and compensation decisions have been
made by the Board of Directors, the Board of Directors has furnished the
following report on executive compensation.
The Board has determined the compensation levels of executive
officers, including the compensation of Mr. Bresler as Chief Executive Officer,
by reviewing each executive officer's short-term and long-term performance with
the Company, the level of profitability of the Company, the profitability of
companies comparable to the Company, and the levels of compensation of executive
officers in such other companies. The executive officers of the Company are
compensated through base salaries and annual bonuses.
As a result of general economic conditions and in view of the
Company's earnings, the Board determined to decrease the compensation of the
executive officers, other than Mr. Oshinsky. Except for Mr. Oshinsky, salaries
of executive officers have not been increased since 1991.
This report on executive compensation has been submitted by the
members of the Board of Directors during 1996.
Charles S. Bresler Ralph S. Childs, Jr.
Stanley S. DeRisio Edwin Horowitz
George W. Huguely, III William L. Oshinsky
Burton J. Reiner
Performance Graph/1/
The graph below compares the cumulative total shareholder return on
the common stock of the Company with the cumulative total return on the S & P
500 Stock Index and the S & P Homebuilding Index for the same period, assuming
the investment of $100 in the Company's common stock, the S & P 500 Index and
the S & P Homebuilding Index on December 31, 1990, and the reinvestment of
dividends.
- ------------------
/1/ Pursuant to the Proxy Rules, this section of the Proxy Statement is not
deemed "filed" with the Securities and Exchange Commission and is not
incorporated by reference into the Company's Report on Form 10-K.
-7-
<PAGE>
FIVE YEAR STOCK PERFORMANCE GRAPH: 1991 TO 1996
Comparison of Five Year Cumulative Total Return Among
Bresler & Reiner, the Homebuilding S&P and the S&P 500
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Bresler & Reiner $100.00 $100.00 $100.00 $ 80.77 $ 80.77 $ 96.15
Homebuilding S&P $100.00 $126.07 $162.94 $ 93.82 $133.92 $120.11
S&P 500 $100.00 $104.46 $111.83 $110.11 $147.67 $177.60
</TABLE>
Assumes $100.00 invested on December 31, 1991 in Bresler & Reiner Common
Stock, the Homebuilding S&P and the S&P 500. Total Return assumes
reinvestment of dividends.
Certain Transactions and Compensation Committee Interlocks and Insider
Participation
All the members of the Board of Directors participated in
deliberations of the Board concerning executive officer compensation.
Messrs. Bresler, Reiner, Horowitz and Oshinsky held the
positions with the Company which are listed under "Election of
Directors" above.
Trilon Project
--------------
Prior to 1975, the Company through its subsidiaries acted as
general contractor in the construction for Trilon Plaza Company
("Trilon") of a high rise office building, a portion of an enclosed mall
shopping center, and three nearby apartment buildings and 20 townhouses
("Trilon Project") in the Southwest Washington, D.C. Urban Renewal Area.
A corporation wholly owned by Messrs. Bresler and Reiner is the
general partner of Trilon and Messrs. Bresler and Reiner are
-8-
<PAGE>
also limited partners. Their interests and the interests of affiliated persons,
who are among the limited partners of Trilon, are shown in the following table.
<TABLE>
<CAPTION>
% Interest in
Relation to % Interest Trilon Office
Name Company In Trilon /1/ /2/ Building Only
---- ----------- --------- - - -------------
<S> <C> <C> <C>
Charles S. Bresler Officer, director and
principal stockholder 41.07% 5.25%
Burton J. Reiner Officer, director and
principal stockholder 41.07% 2.25%
T-P Partners, Inc. Owned by Messrs. Bresler and
Reiner 2.00% ----
Edwin Horowitz Officer and director ---- 2.00%
William L. Oshinsky Officer and director ---- .50%
Anita O. Reiner Principal stockholder and ---- 2.25%
spouse of Burton J. Reiner
Children of Burton J. and Principal stockholder ---- 5.50%
Anita O. Reiner/3/
-
---- Other relatives of Mr. Reiner ---- 4.75%
(3 individuals)
---- Relatives of Mr. Bresler ---- 2.00%
(2 individuals)
- -------------------------------------------------------------------------------
</TABLE>
/1/ Subject to an aggregate 61.125% interest held by others,
-
including those shown in the last column above, in the Trilon Office building
only.
/2/ Includes interests held through a limited partnership.
-
/3/ Four individuals, who are also trustees of The Burton and Anita
-
Reiner Charitable Remainder Annuity Trust, a principal shareholder.
The Company's subsidiary acts as managing and leasing agent for the
Trilon Project, and earns management fees of from 3% to 5% of the rents
collected under agreements expiring December, 1997 and December, 2000, and
leasing fees of 5% of rents collected under the G.S.A. Lease described below.
In 1996, the Company earned $568,610 in management fees and $483,426 in leasing
fees from Trilon.
In the normal course of its management of the Trilon Project, the
Company's subsidiary pays expenses for Trilon's
-9-
<PAGE>
account and is reimbursed by Trilon. The highest amount Trilon owed the Company
since January 1, 1996 was $442,000 at September 30, 1996. As of February 28,
1997, there was no amount due the Company by Trilon.
Waterside Complex
-----------------
The Company has constructed, principally for its own account, an
enclosed mall shopping center contiguous to Trilon's shopping mall and a high
rise office building in the Southwest Washington, D.C. Urban Renewal Area (see
"Trilon Project" above). Adjacent to the Company's shopping mall is another high
rise office building, owned by Town Center East Investors ("TCELP"), a limited
partnership in which the Company is a general partner, with a 46% interest.
Certain affiliates of the Company also own interests in TCELP, all as limited
partners, as shown in the following table:
<TABLE>
<CAPTION>
% Interest
Name Relation to Company in Town Center
---- ------------------- ---------------
<S> <C> <C>
Charles S. Bresler Officer, director and principal 1.35%
stockholder
Burton J. Reiner Officer, director and principal .45%
stockholder
Edwin Horowitz Officer and director 1.35%
William L. Oshinsky Officer and director 1.35%
Anita O. Reiner Principal stockholder and spouse .45%
of Burton J. Reiner
Other relatives of Mr. Reiner (3 2.70%
individuals)
Relatives of Mr. Bresler
(3 individuals) 2.70%
</TABLE>
The two portions of the shopping mall and the two office buildings are
operated as one integrated complex, known as Waterside. Each office building
has access to the mall, and an underground parking garage serves the entire
project.
The Company acts as managing and leasing agent for TCELP'S office
building and earns management fees of 3% of rents collected under an agreement
expiring December, 1997, and leasing fees of 5% of rents collected. In 1996,
the Company earned $109,157 in management fees and $187,336 in leasing fees from
TCELP. The Company as general partner of TCELP has paid expenses for TCELP'S
account for which it is to be reimbursed by TCELP. The highest amount of such
expenses which TCELP owed the Company since
-10-
<PAGE>
January 1, 1996 was $245,278 at March 31, 1996. At February 28, 1997, there was
no amount due the Company by TCELP.
The two high rise office buildings and parts of the lower level and
the first floor and the entire second and third floor of Trilon's portion of the
shopping center and the lower floor of a smaller structure are leased to the
United States General Services Administration ("G.S.A. Lease"). Under a 1973
agreement among the Company, Trilon and TCELP, TCELP is entitled to receive that
portion of the total annual rent from the G.S.A. Lease, now approximately $19.5
million, as shall be reasonably necessary to provide TCELP a net cash flow of
$100,000 per year after payment of land rent, interest and mortgage
amortization, all expenses of operation and maintenance and all real estate
taxes. No payments have been made under this agreement.
Under a Cross Indemnity Agreement entered into in September, 1974, the
Company, TCELP and Trilon each agreed to indemnify the others against a loss of
their share of such rents because of a default by one of the others under the
mortgage on the property or under the G.S.A. Lease. Pursuant to the requirement
of the lender, the Company, TCELP and Trilon pledged their interests in the
G.S.A. Lease to the lender as security for the mortgages. The Company, TCELP
Trilon and S.E.W. Investors (see "S.E.W. Investors" below) are jointly and
severally liable to the tenant under the G.S.A. Lease.
S.E.W. Investors
----------------
In October 1980, the Company assigned its leasehold interest in
105,000 square feet ("Southeast Section") of its part of the Waterside Mall to
S.E.W. Investors, a limited partnership organized by the Company to acquire the
Southeast Section. The Company took back a note from the limited partnership in
the principal amount of $9,300,000 accruing interest at 12% per annum and due on
October 10, 1995. On October 10, 1995, the term of the note was extended to
October 9, 2000 and the interest rate was reduced to 10%. The Company is the
sole general partner, with a 1% interest. Of the limited partnership interests,
62% is held by a non-affiliated person and the remaining 37% was acquired by the
following directors and officers of the Company: 18% each by Mr. Bresler and
Mr. Reiner; and 1% by Mr. Horowitz.
The Company acts as leasing and managing agent for the Southeast
Section for a fee of 3% of rents collected under an agreement expiring in
December, 1997, and leasing fees of 5% of rents collected on the G.S.A. Lease.
The Company earned management fees of $65,170 and leasing fees of $77,741 in
1996 from S.E.W. Investors. The Company as agent pay expenses for S.E.W.
Investors' account for which it is to be reimbursed. The highest amount owed
-11-
<PAGE>
the Company since January 1, 1996, was $353,855 at March 31, 1996. At February
28, 1997, the amount owed was $167,007.
Third Street Southwest Investors
--------------------------------
In 1979, the Company sold apartment buildings adjacent to the
Waterside Complex to Third Street Southwest Investors, a limited partnership
organized by the Company and took back a note from the limited partnership in
the principal amount of $4,350,000, accruing interest at 9.5% per annum and due
on July 31, 1994. On August 1, 1994, the term of the note was extended to July
31, 1999. The Company is its sole general partner, with a 1% interest. Of the
limited partnership interests, 90% are held by unaffiliated persons, and the
remaining 9% were acquired by the following directors and officers of the
Company: Mr. Bresler, 7%; and 1% each by Messrs. Reiner and Horowitz. Each
limited partner in Third Street Southwest Investors contributed approximately
$10,000 per 1% interest.
A subsidiary of the Company acts as managing agent for the apartments
for a management fee of 5% of rents collected under an agreement expiring in
September, 1999. During 1996, the Company earned management fees of $98,073
from Third Street Southwest Investors under this agreement. The Company as
agent pays expenses for Third Street Southwest Investors' account for which it
is to be reimbursed. The highest amount owed the Company since January 1, 1996
was $1,140,027 at February 28, 1997.
Holiday Inn
-----------
The Company owns and operates a 151-room Holiday Inn motel in Camp
Springs, Maryland. Record title to the real estate on which the motel is
situated is held by Messrs. Bresler and Reiner, who have agreed to act, without
compensation, as nominee title holders for the Company. This arrangement has
been approved by the other directors of the Company.
Builders Leasing Company
------------------------
In December 1983, the Company and others organized Builders Leasing
Company, a general partnership, to engage in equipment leasing. The Company has
a 20% interest and acts as the managing general partner. The partners have
contributed $3,150,000 to the capital of the partnership in proportion to their
percentage interests, the Company's share of which was $630,000. Each partner
is personally liable on certain partnership debt in proportion to his
partnership interest. The Company's portion of this debt was $27,000 at
December 31, 1996. Messrs. Bresler, Reiner and Horowitz, directors and officers
of the Company hold interests of 20%, 5% and 2%, respectively, all as general
partners.
-12-
<PAGE>
-------------------------
All the above transactions, other than the equipment leasing
partnership, the relationships with Town Center Apartments and the Southeast
Section, are continuations of projects commenced or agreements entered into by
the predecessors of the Company. Management considers its contracts and other
business relationships with each of these affiliates to be as favorable to the
Company as those obtainable with outsiders.
-------------------------
From January through July, 1996, the Company incurred insurance
premiums of $303,500 to Hilb, Rogal and Hamilton Company of the District of
Columbia. Mr. DeRisio, a director of the Company and a member of the
Compensation Committee of the Board, was president of this company until July
31, 1996.
In the opinion of management, the terms of these transactions were at
least as favorable as could have been obtained from others.
Financial Statements
For certain information concerning the Company and its subsidiaries
see the financial statements and report of Arthur Andersen LLP, independent
certified public accountants, included in the Annual Report accompanying this
proxy statement. Such report is not incorporated in this proxy statement and is
not deemed to be a part of the proxy soliciting material. Representatives of
Arthur Andersen LLP are not expected to be present at the meeting.
Cost of Solicitation
The cost of solicitation of proxies from stockholders will be borne by
the Company. In addition to the use of mails, proxies may be solicited by
telephone by officers, directors and a small number of employees of the Company
who will not be specially compensated for such services. The Company may
reimburse persons holding such stock of record only, such as brokerage houses,
for their expenses in forwarding soliciting material to the beneficial owner of
such stock.
Other Matters
The Board of Directors is not aware of any matters not set forth
herein which may come before the meeting. If, however, any such matter properly
comes before the meeting, the persons named in the proxies will vote the shares
represented thereby in accordance with their judgment.
-13-
<PAGE>
Deadline for Filing Shareholder Proposals for 1998 Annual Meeting.
The date by which proposals of shareholders intended to be presented
at the 1998 Annual Meeting must be received by the Company for inclusion in the
Company's 1998 Proxy Statement and Proxy relating to that meeting is December
23, 1997.
By Order of the Board of
Directors
Edwin Horowitz, Secretary
-14-
