IRT PROPERTY CO, DEF 14A, 2000-03-27

IRT PROPERTY CO
DEF 14A, 2000-03-27
REAL ESTATE INVESTMENT TRUSTS

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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:

<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>

IRT PROPERTY 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)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials:

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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(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> 2

IRT PROPERTY COMPANY

200 GALLERIA PARKWAY, SUITE 1400
ATLANTA, GEORGIA 30339

NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 16, 2000

To our Shareholders:

Our 2000 Annual Meeting of Shareholders will be held at the Cobb Galleria
Centre, Two Galleria Parkway, Room 106, Atlanta, Georgia, on Tuesday, May 16,
2000, at 10:00 A.M. Eastern Time, for the following purposes:

1. To elect five directors to serve until the 2001 Annual Meeting of
Shareholders and until their successors have been duly elected and
qualified;

2. To approve the IRT Property Company 2000 Employee Stock Purchase
Plan; and

3. To transact such other business as may properly come before the
Annual Meeting of Shareholders and any adjournments thereof (the
"Meeting").

Only shareholders of record at the close of business on March 17, 2000, are
entitled to notice of, and to vote at, the Meeting. A complete list of
shareholders entitled to vote at the Meeting will be available at the Meeting.

Our Proxy Statement is enclosed along with our Annual Report to
Shareholders for the fiscal year ended December 31, 1999.

By Order of the Board of Directors

/s/ W. Benjamin Jones III

W. BENJAMIN JONES III
Executive Vice President and Secretary

Atlanta, Georgia
March 31, 2000

YOU ARE URGED TO COMPLETE, SIGN, DATE, AND RETURN YOUR PROXY PROMPTLY IN THE
ENVELOPE PROVIDED SO THAT YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH YOUR
WISHES. RETURNING YOUR PROXY DOES NOT DEPRIVE YOU OF YOUR RIGHT TO ATTEND THE
MEETING AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3

IRT PROPERTY COMPANY

200 GALLERIA PARKWAY, SUITE 1400
ATLANTA, GEORGIA 30339

---------------------

PROXY STATEMENT FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000

---------------------

GENERAL

The enclosed proxy is solicited by the Board of Directors of IRT Property
Company (the "Company") for use at the Company's 2000 Annual Meeting of
Shareholders to be held at 10:00 A.M. Eastern Time at the Cobb Galleria Centre,
Two Galleria Parkway, Room 106, Atlanta, Georgia, on Tuesday, May 16, 2000,
which, together with any adjournments or postponements thereof, is referred to
herein as the "Meeting." The enclosed proxy is revocable at any time before its
exercise at the Meeting by (i) providing written notice to the Executive Vice
President and Secretary of the Company, (ii) properly submitting to the Company
a duly executed proxy bearing a later date, or (iii) attending the Meeting and
voting in person. All written notices of revocation or other communications with
respect to proxies should be addressed as follows: IRT Property Company, 200
Galleria Parkway, Suite 1400, Atlanta, Georgia 30339, Attention: W. Benjamin
Jones III, Executive Vice President and Secretary.

The 2000 Annual Meeting will be held for the following purposes: (i) to
elect five directors to serve until the 2001 Annual Meeting of Shareholders,
(ii) to approve the IRT Property Company 2000 Employee Stock Purchase Plan, and
(iii) to transact such other business as may properly come before the Meeting.

The Board of Directors is not aware of any other business to be presented
to a vote of the shareholders at the Meeting. As permitted by Rule 14a-4(c) of
the Securities and Exchange Commission (the "SEC"), the persons named as proxies
on the enclosed proxy card will have discretionary authority to vote in their
judgment on any proposals presented by shareholders for consideration at the
Meeting that were submitted to the Company after March 6, 2000. Such proxies
also will have discretionary authority to vote in their judgment upon the
election of any person as a director if a director nominee is unable to serve
for good cause and will not serve, and on matters incident to the conduct of the
Meeting.

As of March 17, 2000 (the "Record Date"), 32,030,480 shares of the
Company's common stock, par value $1.00 per share ("Common Stock"), were issued
and outstanding. Each outstanding share of Common Stock is entitled to one vote.
Only shareholders of record at the close of business on the Record Date are
entitled to vote at the Meeting. As of the Record Date, there were no shares of
the Company's preferred stock, par value $1.00 per share ("Preferred Stock"),
issued and outstanding.
<PAGE> 4

The 1999 Annual Report to Shareholders ("Annual Report"), including
financial statements for the fiscal year ended December 31, 1999, accompanies
this Proxy Statement. These materials are first being mailed to the Company's
shareholders on or about March 31, 2000.

Holders of Common Stock are entitled to one vote on each matter considered
and voted upon at the Meeting for each share of Common Stock held of record at
the close of business on the Record Date. Shares of Common Stock represented by
a properly executed proxy, if such proxy is received in time and not revoked,
will be voted at the Meeting in accordance with the instructions indicated in
such proxy. IF NO INSTRUCTIONS ARE INDICATED, SUCH SHARES OF COMMON STOCK WILL
BE VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR NAMED IN THE PROXY
STATEMENT, "FOR" THE APPROVAL OF THE IRT PROPERTY COMPANY 2000 EMPLOYEE STOCK
PURCHASE PLAN, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER
BUSINESS PROPERLY BROUGHT BEFORE THE MEETING.

The approval of each proposal set forth in this Proxy Statement requires
that a quorum be present at the Meeting. The presence, in person or by properly
executed proxy, of the holders of a majority of the outstanding shares of Common
Stock entitled to vote at the Meeting is necessary to constitute a quorum. Each
shareholder is entitled to one vote on each proposal per share of Common Stock
held as of the Record Date.

Proposal One, relating to the election of the nominees for directors,
requires approval by a "plurality" of the votes cast by the shares of Common
Stock entitled to vote in the election. This means that Proposal One will be
approved only if the holders of a majority of the shares of Common Stock
entitled to vote and voting at the Meeting vote in favor of Proposal One. With
respect to Proposal One, abstentions and "broker non-votes" will be counted as
shares of Common Stock present for purposes of determining the presence of a
quorum. However, neither abstentions nor "broker non-votes" will be counted as
votes cast for purposes of determining whether a particular proposal has
received sufficient votes for approval. A "broker non-vote" occurs when a
nominee does not have discretionary voting power with respect to that proposal
and has not received instructions from the beneficial owner.

Proposal Two, and any other proposal that is properly brought before the
Meeting, requires approval by the holders of a majority of the shares of Common
Stock entitled to vote at the Meeting. With respect to such proposals,
abstentions will be counted, but "broker non-votes" will not be counted, as
shares of Common Stock present for purposes of determining the presence of a
quorum. Both abstentions and "broker non-votes" will be counted as votes cast
against such proposals for purposes of determining whether such proposal has
received sufficient votes for approval.

In the event that a quorum is not represented in person or by proxy at the
Meeting, a majority of shares represented at that time may adjourn the Meeting
to allow the solicitation of additional proxies or other measures to obtain a
quorum.

2
<PAGE> 5

PROPOSAL ONE -- ELECTION OF DIRECTORS

The members of the Company's Board of Directors are elected annually by the
shareholders for a one-year term. Five incumbent directors have been nominated
and have agreed to serve as directors if elected.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES
FOR ELECTION AS DIRECTORS.

CERTAIN INFORMATION CONCERNING NOMINEES AND NAMED EXECUTIVE OFFICERS

The following table sets forth the name and age of each nominee for
election to the Board of Directors of the Company and information as of March
17, 2000 regarding the beneficial ownership of the Company's Common Stock by
each director of the Company, by the Named Executive Officers (as hereinafter
defined), and by all directors and executive officers as a group. The amounts
shown are based upon information furnished by the individuals named.

<TABLE>
<CAPTION>
COMPANY SHARES
OWNED PERCENTAGE OF
BENEFICIALLY AND OUTSTANDING
NAME CURRENT POSITION NATURE OF BENEFICIAL SHARES OWNED
(DIRECTOR SINCE) AGE WITH COMPANY OWNERSHIP(1) BENEFICIALLY(1)
- ---------------- --- -------------------------------- -------------------- ----------------
<S> <C> <C> <C> <C>
Thomas H. McAuley(2)............ 54 Chairman, President and Chief
(1987) Executive Officer 296,237(5)(6) (9)
Patrick L. Flinn(2)(4).......... 57 Director 4,750 (9)
(1987)
Homer B. Gibbs, Jr.(3)(4)....... 67 Director 34,466(5)(8) (9)
(1976)
Samuel W. Kendrick(2)(3)(4)..... 60 Director 10,440(5) (9)
(1993)
Bruce A. Morrice(2)(3)(4)....... 66 Director 20,559(5)(8) (9)
(1986)
OTHER NAMED EXECUTIVE OFFICERS
W. Benjamin Jones III........... 49 Executive Vice President 150,797(5)(6) (9)
Robert E. Mitzel................ 51 Executive Vice President 145,323(5)(6)(8) (9)
Daniel F. Lovett................ 53 Senior Vice President 66,201(5)(7)(8) (9)
James G. Levy................... 41 Senior Vice President 61,963(5)(7)(8) (9)
Kip R. Marshall................. 50 Senior Vice President 46,488(5)(7) (9)
E. Thornton Anderson............ 37 Senior Vice President 39,935(5)(7) (9)
All Directors, Nominees and
Executive Officers as a Group
11 Persons)................... 877,159 2.69%(10)
</TABLE>

- ---------------

(1) Information relating to beneficial ownership of Company Common Stock is
based upon information furnished by each person using "beneficial
ownership" concepts set forth in the rules of the Securities and Exchange
Commission. Under those rules, a person is deemed to be a "beneficial
owner" of a security if that person has or shares "voting power," which
includes the power to vote or direct the voting of such security, or
"investment power," which includes the power to dispose of or to direct the
disposition of such security. The person is also deemed to be a beneficial
owner of any security of which

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<PAGE> 6

that person has a right to acquire beneficial ownership within 60 days.
Under those rules, more than one person may be deemed to be a beneficial
owner of the same securities, and a person may be deemed to be a beneficial
owner of securities as to which he or she may disclaim any beneficial
interest. Accordingly, the directors are named as beneficial owners of
shares as to which they may disclaim any beneficial interest.
(2) Member of the Executive Committee
(3) Member of the Audit Committee
(4) Member of the Compensation Committee. The Compensation Committee also acts
as the Stock Options Committee
(5) The number of shares reflected as being owned includes 174,629 shares for
Mr. McAuley; 3,750 shares for Mr. Flinn; 12,500 shares each for Messrs.
Gibbs and Morrice; 8,750 shares for Mr. Kendrick; 83,583 shares for Mr.
Jones; 85,165 shares for Mr. Mitzel; 55,645 shares for Mr. Lovett; 52,728
shares for Mr. Levy; 36,332 shares for Mr. Marshall; and 31,879 shares for
Mr. Anderson, which each has the right to acquire pursuant to the Company's
Stock Option Plan.
(6) Includes 47,904 shares received by Mr. McAuley and 23,952 shares received
by each of Messrs. Jones and Mitzel of restricted stock, pursuant to the
Company's 1998 Long-Term Incentive Plan, with a fair market value on the
date of distribution in 1998 of $10.437 per share.
(7) Includes 8,333 shares received by Mr. Levy and 5,556 shares received each
by Mr. Lovett, Mr. Marshall and Mr. Anderson of restricted stock, pursuant
to the Company's 1998 Long-Term Incentive Plan, with a fair market value on
the date of distribution in 2000 of $8.188 per share.
(8) The number of shares reflected as being beneficially owned by Mr. Morrice
includes 2,966 shares owned by a marital trust and 1,000 shares owned by a
profit sharing plan, over neither of which he has voting or investment
power; with regards to Mr. Lovett includes 5,000 shares owned by a trust
over which he has voting or investment power; and with regards to Messrs.
Gibbs, Mitzel and Levy includes 2,500, 392 and 400 shares, respectively,
owned by their wives. Messrs. Morrice, Gibbs, Mitzel, Lovett and Levy are
deemed to be beneficial owners of such shares under the regulations of the
SEC, but they disclaim such beneficial ownership.
(9) Less than 1%.
(10) Includes 519,961 shares which the Company's executive officers have the
right to acquire and 37,500 shares which the Company's non-management
directors have the right to acquire pursuant to the Company's Stock Option
Plans. Also, includes 3,292 shares owned by spouses of the directors and
executive officers, 7,966 shares owned by trusts, and 1,000 shares owned by
a profit sharing plan. The directors and executive officers are deemed to
be the beneficial owners of such shares under the regulations of the SEC,
but they disclaim beneficial ownership in such shares held by their
spouses, trusts and profit sharing plans.

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<PAGE> 7

SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS

The following table sets forth information as of the date indicated with
respect to the only persons who are known by the Company to be beneficial owners
of more than 5% of the outstanding shares of the Company's Common Stock:

<TABLE>
<CAPTION>
AMOUNTS AND NATURE
OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER DATE OWNERSHIP CLASS
- ------------------------------------ ------- ------------------ ----------
<S> <C> <C> <C>
Perkins, Wolf, McDonnell & Company....................... 2/11/00 1,672,498(1) 5.1%
53 W. Jackson Blvd.
Suite 722
Chicago, IL 60604
</TABLE>

- ---------------

(1) This information is contained in a Schedule 13G dated February 11, 2000
filed by Perkins, Wolf, McDonnell & Company with the Securities and Exchange
Commission. Such Schedule 13G states that the reporting person has shared
voting and dispositive power with regards to the 1,672,498 shares.

The beneficial ownership of directors and executive officers is set forth
under "CERTAIN INFORMATION CONCERNING NOMINEES AND NAMED EXECUTIVE OFFICERS"
above.

COMMITTEES OF THE BOARD OF DIRECTORS, MEETINGS AND COMPENSATION OF DIRECTORS

The Board of Directors has an Executive Committee, an Audit Committee, and
a Compensation Committee (which also serves as a Stock Option Committee).

Executive Committee. The Executive Committee may exercise all the powers
of the Board of Directors between meetings of the Board, except as limited by
law. The Executive Committee may also serve as a Nominating Committee which
nominates persons to serve as directors of the Company. The full Board of
Directors, however, currently acts as the Nominating Committee and, as such, has
nominated the five persons named in the foregoing table. No recommendations were
submitted by shareholders with respect to the nomination of directors, and the
Nominating Committee has no policy with respect to whether or not it would
consider such recommendations by shareholders. The Executive Committee held one
meeting during 1999.

Audit Committee. The Audit Committee, which is composed of outside
directors, approves any transactions involving related parties, recommends to
the Board of Directors the engagement of the independent auditors of the
Company, and reviews with the independent auditors the scope and results of the

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<PAGE> 8

Company's audits, the Company's internal accounting controls and the
professional services furnished by the independent auditors to the Company. The
Audit Committee met once in 1999.

Compensation Committee. The Compensation Committee, composed of outside
directors, determines the salary and other compensation to be paid to the
executive officers of the Company. It also acts as the Stock Option Committee
and is responsible for the administration of the Company's Stock Option Plans.
The Compensation Committee met once in 1999.

Board of Directors. During the Company's fiscal year ended December 31,
1999, the Company's Board of Directors held seven meetings, and each member of
the Company's Board of Directors attended at least 75% of the aggregate number
of meetings on the Board of Directors and committees thereof on which he served.

The Company pays directors who are not also employees of the Company a
retainer fee of $1,000 per month; $1,000 plus expenses for each Board meeting
attended; and $500 plus expenses for each Executive Committee, Audit Committee
or Compensation Committee meeting attended. Directors' fees in 1999 aggregated
$74,500. In addition, each non-employee director receives nonqualified stock
options to purchase 1,250 shares of the Company's Common Stock upon his or her
election and each annual re-election to the Board.

The Company adopted the IRT Property Company Deferred Compensation Plan for
Outside Directors at the end of 1995. This plan allows non-employee directors to
defer their director fees to the earlier of the date selected by the director or
the date the director ceases to be a board member. Any such fees deferred will
accrue interest monthly at an annual rate based on 13-week Treasury Bills.
During 1999, $7,000 of director fees were deferred in accordance with this plan.

There are no family relationships among any of the directors and/or
executive officers of the Company.

PRINCIPAL OCCUPATIONS OF NOMINEES FOR ELECTION DURING THE PAST FIVE YEARS

The principal occupations during the past five years of the nominees for
election as directors of the Company are as follows:

Mr. McAuley has been President of the Company since October 1, 1995, and
was named Chief Executive Officer of the Company on January 1, 1997, and
Chairman in June 1998. He was regional partner of Faison Associates, Inc.
("Faison"), a real estate development and management company headquartered in
Charlotte, North Carolina, from May 1993 through September 1995. From June 1988
to May 1993, he served as Chairman and Chief Executive Officer and part owner of
Ewing Southeast Realty, Inc. ("Ewing"), an Atlanta, Georgia real estate company.
Ewing was acquired by Faison Associates, Inc. ("Faison") on May 1, 1993, when
Mr. McAuley became a Faison partner.

Mr. Flinn is currently occupied as a private investor and serves as a
director of Theragenics, Inc. (NYSE: TGX). He retired from BankSouth Corporation
after serving as Chairman and Chief Executive Officer from August 1991 to
January 1996.

Mr. Gibbs is currently occupied as a private investor. He retired as Vice
Chairman of Mid-South Financial Corporation, a Nashville, Tennessee mortgage
banking firm, on January 1, 1994, a position he held from 1986.

Mr. Kendrick retired from Ruddick Investment Company ("RIC") after serving
as President from November 1994 to April 1998. RIC, an affiliate of Harris
Teeter, Inc. ("Harris Teeter"), a grocery store
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<PAGE> 9

owner/operator, is involved in real estate development and venture capital
investment. Mr. Kendrick served as Executive Vice President of Harris Teeter, a
supermarket chain with principal executive offices in Charlotte, North Carolina,
from July 1992 to October 1994. Harris Teeter is a tenant in some of the
shopping centers owned and managed by the Company.

Mr. Morrice has been Managing Director of Morrice Financial Corp., a
Dallas, Texas real estate finance and investment firm since 1987.

EXECUTIVE OFFICERS

In addition to Thomas H. McAuley, President and Chief Executive Officer,
the executive officers of the Company are as follows:

W. Benjamin Jones III has been employed by the Company since 1977, and has
been Executive Vice President since May 1994 and Secretary since May 1998.

Robert E. Mitzel has been with the Company since 1987, and has served as
Executive Vice President since May 1994.

Daniel F. Lovett joined the Company in October 1994 as Vice President and
Director of Construction and became Senior Vice President in February 1998. From
1979 to September 1994, he was with Southeast Shopping Centers Corp., a South
Florida neighborhood and community shopping center developer, last serving as
Vice President and Director of Development.

James G. Levy has been Senior Vice President and Chief Accounting Officer
of the Company since December 1998. He served as Vice President and Treasurer
from June 1994 to December 1998. From May 1993 to May 1994, he was with Faison,
serving as Regional Comptroller.

Kip R. Marshall joined the Company in March 1998 as Senior Vice President.
From 1996 to 1997, he was employed as an Asset Manager for Bullock, Terrell &
Mannelly, a full service commercial real estate firm based in Atlanta, Georgia,
and from 1991 to 1995, he served as Vice President of Travelers Realty
Investment Company.

E. Thornton Anderson has been the Company's Senior Vice President, Director
of Leasing, since September 1999. From 1997 to 1999, he served as Vice President
of the Company, and, from 1995 to 1997, he served as Assistant Vice President of
the Company. He joined the Company in 1993 from the Sofran Group, an
Atlanta-based development company, where he served as a leasing representative
for five years.

The executive officers are elected by and serve at the pleasure of the
Board of Directors.

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<PAGE> 10

EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Overview and Philosophy

The Compensation Committee, composed entirely of outside directors,
determines the salary and other compensation to be paid to the executive
officers of the Company. The Compensation Committee typically reviews the salary
of each executive officer once each year at its November meeting. At that
meeting, the Compensation Committee, acting as a Stock Option Committee, also
usually determines the individuals to whom incentive stock options are to be
awarded and the number of shares for which options are to be granted.

The Company's executive compensation program has three primary objectives:

- Reward executives for long-term management focus and the enhancement of
shareholder value.

- Attract and retain key executives critical to the long-term success of
the Company.

- Support the achievement of desired Company performance.

In determining the compensation to be paid to the executive officers of the
Company, the Compensation Committee considers compensation paid to other
executives performing similar jobs within the industry. Some of the companies
considered by the Compensation Committee to be of comparable size and complexity
are included in the NAREIT All REIT Index included in the Comparative Stock
Performance section of this Proxy Statement. In these comparisons, the
Compensation Committee strives to fix the compensation of the Company's
executive officers in the middle of the class of comparable companies. The
Committee also considers the performance of the Company and the merits of the
individual under consideration. Committee members use their discretion to set
executive compensation where, in their judgment, external, internal or an
individual's circumstances warrant it.

Executive Officer Compensation Program

The Company's executive officer compensation program is comprised of base
salary, year-end additional cash compensation, long-term incentive compensation
in the form of stock options and restricted stock awards, and various benefits,
including medical and life insurance generally available to all employees of the
Company.

Base Salary

The Chief Executive Officer recommends to the Compensation Committee the
base salary levels for the Company's other executive officers based on his
evaluation of individual experience and performance, on his review of employee
evaluation reports prepared by certain of the executive officers and in his
subjective discretion on the overall operating performance of the Company. Base
salary levels are then set in the discretion of the Compensation Committee after
consideration of such recommendations. The Compensation Committee members also
may consider salary levels of executive officers of other comparable companies.

401(k) Plan and Year-End Additional Cash Compensation Program

The Company maintained a pension plan during 1980 to 1990, which was
terminated June 30, 1990. Upon termination of the pension plan, the Board of
Directors determined that it would be appropriate to substitute in lieu thereof
a program of year-end cash payments to the executive officers of the Company and
certain other corporate employees of the Company selected in the discretion of
the Chief Executive Officer

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<PAGE> 11

and the President. Under this program (the "Year-End Additional Cash
Compensation Program"), participants received a year-end cash payment from the
Company, the amount of which was based upon each participant's length of service
with the Company. Each participant who has been employed by the Company for more
than five years received a year-end cash payment equal to 12% of his or her
salary. Each participant with less than five years received year-end cash
payments in graduated amounts designed to produce a cumulative 12% payment after
completion of five years of service. The Company paid or accrued approximately
$170,000 and $200,000 under this program in 1996 and 1995, respectively. The
Company has not accrued any amounts under this program since 1996.

In August 1996, the Company terminated the Year-End Additional Cash
Compensation Program and adopted a 401(k) Plan. All employees who have completed
one year of service and are at least 18 years of age are eligible to participate
in the 401(k) Plan, and the Company matches 100% of employee contributions, up
to 6% of each individual participant's compensation. Employees vest in the
Company match based on length of service, with full vesting at 5 years of
service. The Company contributed approximately $56,000 to the 401(k) Plan for
the period from August 1 through December 31, 1996, approximately $131,000,
$145,000 and $159,000 during 1997, 1998 and 1999, respectively.

Compensation to Chief Executive Officer

Mr. McAuley has been Chief Executive Officer since January 1, 1997, and has
served as President since October 1, 1995 and Chairman since June 18, 1998.

Mr. McAuley's base salary for 1999 was $318,798, as compared to $307,154
and $302,608 for 1998 and 1997, respectively. Mr. McAuley received $100,000 in
performance bonuses during 1999, as compared to $132,938 in 1998. Mr. McAuley
also was awarded, during fiscal years 1999, 1998 and 1997, incentive stock
options to purchase 9,500, 8,300 and 8,750 shares of Company Common Stock,
respectively.

The Compensation Committee considered Mr. McAuley's role as Chairman, Chief
Executive Officer and President during 1999, and as President and Chief
Executive Officer during 1997 and the salaries and benefits of other chief
executive officers for similar companies within the industry in determining his
cash compensation. The stock option awards to Mr. McAuley were based, among
other things, on competitive practice within the industry, the Committee's
perception of his past and expected contributions to the Company's long-term
performance, and the $100,000 incentive stock option ("ISO") limitation as
described below.

Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally limits to $1 million the deduction that can be claimed by any
publicly-held corporation for compensation paid to any "covered employee" in any
taxable year beginning after December 31, 1993. The term "covered employee" for
this purpose is defined generally as the Chief Executive Officer and the four
other highest paid employees of the Company. Performance-based compensation is
outside the scope of the $1 million limitation and, hence, generally can be
deducted by a publicly-held corporation without regard to amount, provided that,
among other requirements, such compensation is approved by the shareholders. The
Compensation Committee has

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<PAGE> 12

not and does not anticipate the need to develop a formal policy on this matter
since the compensation of the Company's executive officers has been less than
the limitations contemplated by Section 162(m).

COMPENSATION COMMITTEE

Bruce A. Morrice, Chairman
Homer B. Gibbs, Jr.
Samuel W. Kendrick
Patrick L. Flinn

SUMMARY COMPENSATION TABLE

The following table shows the compensation for the past three years of the
Chief Executive Officer and each of the four other most highly-compensated
executive officers whose total annual salary and bonus exceeded $100,000 in
fiscal 1999 (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION(1) --------------------------
--------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2) AWARD(S) OPTIONS(#) COMPENSATION(8)
- --------------------------- ---- -------- -------- ---------------- ---------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas H. McAuley........ 1999 $318,798 $100,000(4) $3,500 $ -- 9,500 $10,000
Chairman, President 1998 307,154 132,938(5) -- 500,000(6)(7) 8,300 10,000
and Chief Executive 1997 302,808 -- -- -- 8,750 9,500
Officer(3)
W. Benjamin Jones III.... 1999 154,223 15,000(4) -- -- 9,500 9,282
Executive Vice President 1998 150,209 22,552(5) -- 250,000(6)(7) 8,300 9,012
1997 145,788 -- -- -- 7,500 8,747
Robert E. Mitzel......... 1999 154,443 15,000(4) -- -- 9,500 9,282
Executive Vice President 1998 150,209 22,552(5) -- 250,000(6)(7) 8,300 9,349
1997 145,788 -- -- -- 7,500 8,747
E. Thornton Anderson..... 1999 144,803 7,000(4) -- -- 4,000 8,207
Senior Vice President 1998 92,579 2,693(5) 2,220 -- 4,000 5,555
1997 84,899 -- 2,220 -- 2,000 4,229
Daniel F. Lovett......... 1999 114,556 20,000(4) 3,110 9,500 6,620
Senior Vice President 1998 109,848 16,653(5) -- -- 8,300 7,220
1997 91,568 -- -- -- 6,000 5,394
</TABLE>

- ---------------

(1) Excludes perquisites and other personal benefits, the aggregate amount of
which did not, in the case of any Named Executive Officer, exceed $50,000 or
10% of such Named Executive Officer's annual salary and bonus in any year.
(2) Year-End Additional Cash Compensation in lieu of pension under a benefit
plan that was terminated upon the Company's adoption of its 401(k) Plan. The
only executive officer remaining under this plan is Mr. McAuley who will
receive his final benefit in 2000.
(3) Chief Executive Officer since January 1, 1997 and Chairman since June 18,
1998.
(4) For the fiscal year ended December 31, 1999, Mr. McAuley received a $100,000
bonus, Mssrs. Jones and Mitzel received a $15,000 bonus, Mr. Lovett received
a $20,000 bonus, and Mr. Anderson received a

10
<PAGE> 13

$7,000 bonus pursuant to the 1998 Long-Term Incentive Plan based upon the
attainment of certain performance goals. See "Employment Contracts."
(5) Mr. McAuley received a $75,000 performance bonus approved in February 1998
by the Board of Directors and a $57,938 bonus under the 1998 Long-Term
Incentive Plan based upon the attainment of certain performance goals.
Messrs. Jones, Mitzel, Anderson and Lovett received bonuses of $22,552,
$22,552, $2,693 and $16,653, respectively, under the 1998 Long-Term
Incentive Plan. See "Employment Agreements."
(6) Represents the value of 47,904 shares received by Mr. McAuley and 23,952
shares received by each of Mssrs. Jones and Mitzel, pursuant to the 1998
Long-Term Incentive Plan, with a fair market value on June 18, 1998, the
date of distribution, of $10.437 per share. The fair market value of these
shares based on the Company's common stock price at December 31, 1999 was
$748,500. Each individual receives quarterly dividend payments for all
shares under this Plan.
(7) Each of the restricted stock awards provides that the shares of restricted
stock shall vest 10% on January 31st of each year commencing in 1999 and
ending in 2008. In 1999, the Company recognized compensation expense of
$50,000, $25,000 and $25,000 for Mssrs. McAuley, Jones and Mitzel,
respectively. The restricted stock is subject to the Executive remaining an
employee of the Company or a subsidiary, except in the case of death,
disability or a change in control. The Company also loaned each Executive
the respective amounts shown pursuant to secured promissory notes bearing
interest at 7% per annum, with interest payable quarterly. The principal is
payable at the maturity of the notes on July 1, 2008. The proceeds of the
notes were used to buy a number of shares equal to the shares granted under
the restricted stock awards. The secured promissory notes are accompanied by
a pledge agreement on all Restricted Shares to secure the employee's
obligations to the notes. The Company can release collateral in the
Company's judgment at any time after July 10, 2003, provided the fair market
value of the remaining collateral is not less than 200% of the then
outstanding principal balance of the related note, and provided further all
interest payments are current.
(8) Represents the Company's matching contribution under the 401(k) Plan.

STOCK OPTION PLANS

Long-term incentives are presently provided through the Company's 1989
Stock Option Plan (the "1989 Plan") and its 1998 Long-Term Incentive Plan (the
"1998 Plan," and collectively with the 1989 Plan, the "Plans"). These Plans are
intended to promote the long-term success of the Company by providing financial
incentives to the directors, officers, and employees of the Company who are in
positions to make significant contributions toward the success of the Company.

Options granted under the 1989 Plan may be either incentive stock options
(options that meet certain requirements of the Internal Revenue Code, thereby
receiving special tax treatment) or nonqualified stock options (options that do
not meet the special requirements for incentive stock options). ISOs may be
granted only to persons who are employees of the Company, including members of
the Board of Directors who are also employees of the Company. Nonqualified stock
options ("NSOs") may also be granted to officers and employees of the Company.

The Plans are administered by the Compensation Committee. Subject to the
approval of the Board of Directors, the Compensation Committee has the authority
to determine the individuals to whom stock options are awarded, the number of
shares for which options are granted (the aggregate fair market value of stock
with respect to which ISOs are exercisable for the first time by any individual
during any calendar year shall not,

11
<PAGE> 14

however, exceed $100,000, and no person shall be eligible to receive an ISO for
shares in excess of such limitation), and the determination of whether an option
shall be an ISO or a NSO.

Options granted under the Plans are exercisable no later than 10 years from
the date of grant with the exercise price being equal to 100% of the market
value on the date of grant. The 1989 Plan replaced the Key Employee Stock Option
Plan adopted in 1983, as amended by the Board of Directors on February 9, 1987
(the "1983 Plan").

In determining the grants of stock options to officers and employees of the
Company, including the executive officers other than the Chief Executive
Officer, the Compensation Committee reviewed with the Chief Executive Officer,
the recommended individual awards, based on the respective performance,
responsibilities, and contributions of each of the individuals under
consideration, and the operating performance of the Company. The Compensation
Committee also considered the expected performance requirements and
contributions, as well as the position level, of each of these individuals. The
Chief Executive Officer and the Compensation Committee did not give
consideration to current holdings of the Common Stock or options to purchase the
Common Stock of the Company when making their decision regarding option awards.

The following table sets forth (i) all individual grants of stock options
made by the Company during fiscal 1999 to each of the Named Executive Officers
(all of which are ISOs granted under the 1989 Plan and exercisable immediately
upon grant), (ii) the ratio that the number of options granted to each
individual bears to the total number of options granted to all employees of the
Company, (iii) the exercise price and expiration date of these options, and (iv)
estimated potential realizable values assuming the stock price appreciates over
a ten-year term at rates of 5% and 10% compounded annually.

OPTION GRANTS IN FISCAL 1999

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES BASE PRICE EXPIRATION -----------------------
NAME GRANTED(#) IN 1999 ($/SH) DATE 5% 10%
- ---- ----------- ---------- ----------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Thomas H. McAuley............... 9,500 6.07% $9.688 1/1/09 $57,878 $146,674
W. Benjamin Jones III........... 9,500 6.07 9.688 1/1/09 57,878 146,674
Robert E. Mitzel................ 9,500 6.07 9.688 1/1/09 57,878 146,674
Daniel F. Lovett................ 9,500 6.07 9.688 1/1/09 57,878 146,674
E. Thornton Anderson............ 4,000 2.56 9.688 1/1/09 24,370 61,758
</TABLE>

12
<PAGE> 15

The following table sets forth (i) the number of shares received and the
aggregate dollar value realized in connection with each exercise of outstanding
stock options during 1999 by each of the Named Executive Officers, (ii) the
total number and value of all outstanding, unexercised options (all of which are
exercisable) held by the Named Executive Officers as of the end of 1999, and
(iii) the aggregate dollar value of all such unexercised options that are
in-the-money; that is, when the fair market value of the Common Stock that is
subject to the option exceeds the exercise price of the option.

AGGREGATED OPTION EXERCISES IN 1999
AND YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SHARES NUMBER OF IN-THE-MONEY
ACQUIRED ON UNEXERCISED OPTIONS OPTIONS
NAME EXERCISE VALUE REALIZED AT 12/31/99 AT 12/31/99(1)
- ---- ---------------- -------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Thomas H. McAuley............. -- $ -- 89,050(2) $--
W. Benjamin Jones III......... -- -- 56,218(3) --
Robert E. Mitzel.............. -- -- 57,800(3) --
Daniel F. Lovett.............. -- -- 34,800(3) --
E. Thornton Anderson.......... -- -- 12,000(3) --
</TABLE>

- ---------------

(1) Value based on market value of Company's Common Stock at date of exercise of
the end of 1999 minus the exercise price.
(2) Includes NSOs totaling 7,500 shares, consisting of 1,250 shares each granted
during 1990 through 1995 as a non-employee director, an NSO for 50,000
shares granted upon employment as President in 1995, an ISO for 5,000 shares
granted in 1996, an ISO for 8,750 shares granted in 1997, an ISO for 8,300
shares granted in 1998 and an ISO for 9,500 shares granted in 1999.
(3) All unexercised options represent ISOs granted under the 1989 Stock Option
Plan.

13
<PAGE> 16

COMPARATIVE STOCK PERFORMANCE

The line graph below compares the cumulative total shareholder return on
Common Stock of the Company for the last five fiscal years with the cumulative
total return on the NAREIT All REIT Total Return Index and the Russell 2000
Index over the same period. The Company is using the Russell 2000 Index because
it believes that the companies comprising the Russell 2000 Index have comparable
market capitalization to the Company. This comparison assumes that the value of
the investment in the Company Common Stock and each index was $100 on December
31, 1994 and that all dividends were reinvested.

<TABLE>
<CAPTION>
IRT PROPERTY COMPANY RUSSELL 2000 NAREIT ALL REIT INDEX
-------------------- ------------ ---------------------
<S> <C> <C> <C>
12/31/94 100 100 100
12/31/95 98.73 128.45 118.3
12/31/96 134.74 149.64 160.61
12/31/97 149.23 183.1 190.9
12/31/98 137.56 178.44 154.97
12/31/99 119.28 216.37 144.93
</TABLE>

EMPLOYMENT AND SEVERANCE AGREEMENTS

On October 1, 1995, the Company entered into an employment agreement with
Mr. McAuley as President and Chief Operating Officer of the Company, which
provided, among other things, for a minimum annual base salary of $250,000, a
commencement bonus of $100,000, and the opportunity to participate in such
incentive bonus plans, as may be determined by the Board. Mr. McAuley also was
granted an NSO to purchase 50,000 shares of Company Common Stock under the 1989
Plan.

The Company entered into an Amended and Restated Employment Agreement with
Mr. McAuley as of November 11, 1997. This Employment Agreement provides for an
initial annual salary of $306,000 with annual reviews and permits participation
in all other incentive, benefit, welfare and retirement plans offered by the
Company, and the use and maintenance costs of a Company automobile (or a
comparable automobile

14
<PAGE> 17

allowance). It is automatically renewable each year unless sooner terminated.
Following a "Change In Control" as defined therein, Mr. McAuley may, for good
reason, terminate his employment and receive the sum of 2.99 times the sum of
his annual base salary and his most recent bonus. Following a Change In Control
and termination of employment, the Company will continue to provide benefits to
Mr. McAuley for two years, consistent with the benefits he received prior to
such termination.

As of November 11, 1997, the Company also entered into Change In Control
Employment Agreements with Messrs. W. Benjamin Jones III and Robert E. Mitzel,
which are generally similar to the Change In Control provisions contained in the
President's Employment Agreement. The provisions of their agreements provide for
payments of the sum of one year's salary and bonus in the event of a Change In
Control and termination of employment, and benefits are payable for a period of
one year. During the fourth quarter of 1999 and the first quarter of 2000, the
Company entered into Change In Control Employment Agreements with each of
Messrs. Daniel F. Lovett and E. Thornton Anderson, respectively, upon terms and
conditions substantially similar to those contained in the Agreements with
Messrs. Jones and Mitzel.

On January 13, 1999, the Company entered into an agreement with Mary M.
Thomas following her resignation from the Company and the Board of Directors and
the expiration of her Change in Control Employment Agreements. This Severance
Agreement provided for, among other things, a $202,000 separation/transition
incentive, up to $20,000 in matching 401(k) contributions and other cash
payments, and vesting of 10% of her restricted stock award, as well as certain
other benefits, including payment of medical and dental insurance for one year.

PROPOSAL TWO -- APPROVAL OF THE IRT PROPERTY COMPANY 2000 EMPLOYEE STOCK
PURCHASE PLAN

On February 4, 2000, the Board of Directors adopted, subject to shareholder
approval at the Meeting, the IRT Property Company 2000 Employee Stock Purchase
Plan (the "Plan"). A summary of the Plan is set forth below. The summary is
qualified in its entirety by reference to the full text of the Plan, which is
attached to this Proxy Statement as Appendix A.

GENERAL

The purpose of the Plan is to enhance the proprietary interest, through
ownership of the Company's Common Stock, among those employees of the Company
and its subsidiaries designated by the Company as eligible to participate in the
Plan.

ADMINISTRATION

The Plan will be administered by the Compensation Committee of the Board of
Directors (the "Committee"). Subject to the express provisions of the Plan, the
Committee has authority to interpret and construe the provisions of the Plan, to
adopt rules and regulations for administering the Plan, and to make all other
determinations necessary or advisable for administering the Plan. The Committee
will select from time to time an administrator (the "Administrator") to operate
and perform the day-to-day administration of the Plan and maintain records of
the Plan.

STOCK SUBJECT TO THE PLAN

A maximum of 300,000 shares of Common Stock will be made available for
purchase by participants under the Plan, subject to appropriate adjustment for
stock dividends, stock split or combination of shares,
15
<PAGE> 18

recapitalization or other changes in the Company's capitalization. The shares
issuable under the Plan may be issued out of authorized but unissued shares or
may be shares issued and later acquired by the Company. All cash received or
held by the Company under the Plan may be used by the Company for any corporate
purpose.

ELIGIBILITY; GRANT AND EXERCISE OF OPTIONS

All employees of the Company or its participating subsidiaries who are
regularly scheduled to work at least 20 hours each week and at least five months
each calendar year are eligible to participate in the Plan. As of March 17,
2000, there were approximately 59 persons eligible to participate in the Plan.

An eligible employee may elect to become a participant in the Plan by
filing with the Administrator a request form which authorizes a regular payroll
deduction from the employee's paycheck. A participant's request form authorizing
a payroll deduction will remain effective from offering period to offering
period until amended or canceled. Offering periods are the three-month periods
beginning January 1, April 1, July 1 and October 1 of each year during which
options to purchase Common Stock are outstanding under the Plan; provided that
the first offering period began on January 3, 2000 and will end on June 30,
2000. A participant's payroll deduction must be in any whole percentage from one
to ten percent of such participant's base compensation payable each pay period,
and at any other time an element of base compensation is payable. A participant
may not make cash contributions or payments to the Plan.

A book account will be established for each participant, to which the
participant's payroll deductions will be credited, until these amounts are
either withdrawn, distributed or used to purchase Common Stock, as described
below. No interest will be credited on these cash amounts. Whole shares of
Common Stock will be held in the participant's account until distributed as
described below.

On the first day of each offering period each eligible employee is granted
an option to purchase on the last day of the offering period (the "Purchase
Date") at the price described below (the "Purchase Price") the number of full
shares of Common Stock which the cash credited to the participant's account at
that time will purchase at the Purchase Price. An employee may not be granted an
option for an offering period if, immediately after the grant, he or she would
own five percent or more of the total combined voting power or value of all
classes of stock of the Company or any of its subsidiaries. A participant cannot
receive options that, in combination with options under other plans qualified
under Section 423 of the Code, would result during any calendar year in the
purchase of shares having an aggregate fair market value of more than $25,000.
The maximum number of shares of Common Stock that may be purchased by any
participant in the Plan during any one offering period is 1,000 shares.

Unless the cash credited to a participant's account is withdrawn or
distributed, his or her option to purchase shares of Common Stock will be deemed
to have been exercised automatically on the Purchase Date. The cash balance, if
any, remaining in the participant's account at the end of an offering period
will be refunded to the participant, without interest. The Purchase Price will
initially be equal to the lesser of the fair market value of the Common Stock on
(i) the first trading day of the offering period, or (ii) the last trading day
of the offering period. Under the Plan, the Board of Directors or the
Compensation Committee may, at any time prior to a given offering period, change
the Purchase Price for that offering period; provided, that in no event shall
the Purchase Price result in a discount below market value in excess of 15%. The
Board currently has no intention of offering a discount.

Options granted under the Plan are not transferable by the participant
other than by will or by the laws of descent and distribution and are
exercisable only by the participant during his or her lifetime, or, after his or
her lifetime, only by his or her beneficiary, descendent or other permitted
transferees.
16
<PAGE> 19

NO EMPLOYMENT RIGHTS

Neither the establishment of the Plan, nor the grant of any options
thereunder, nor the exercise thereof will be deemed to give to any employee the
right to be retained in the employ of the Company or any of its subsidiaries or
to interfere with the right of the Company or any such subsidiary to discharge
any employee or otherwise modify the employment relationship at any time.

TERMINATION OF EMPLOYMENT

If a participant terminates employment, the cash balance in the
participant's account will be returned to the participant (or his or her
beneficiary in the case of the participant's death) in cash, without interest,
as soon as practicable, and certificates for the shares of Common Stock, or
other appropriate evidence of ownership, credited to the participant's account
will be distributed as soon as practicable.

AMENDMENT AND TERMINATION OF THE PLAN

The Committee may amend the Plan, in whole or in part, at any time;
provided, however, that no amendment may (a) affect any right or obligation with
respect to any grant previously made, unless required by law, or (b) unless
previously approved by the shareholders of the Company, where such approval is
necessary to satisfy the Code, the rules of any stock exchange on which the
Common Stock is listed, or the requirements necessary to meet any exemption from
the application of federal securities laws, (i) materially affect the
eligibility requirements, (ii) increase the number of shares of Common Stock
eligible for purchase under the Plan, or (iii) materially increase the benefits
to participants. The Plan may be terminated by the Committee at any time, in
which event the administrator will terminate all contributions to the Plan. Cash
balances then credited to participants' accounts will be distributed as soon as
practicable, without interest.

FEDERAL INCOME TAX CONSEQUENCES TO THE COMPANY AND TO PARTICIPANTS

The Plan is designed to qualify as an Employee Stock Purchase Plan under
Section 423 of the Code. A general summary of the federal income tax
consequences regarding the Plan is stated below.

Neither the grant nor the exercise of options under the Plan will have a
tax impact on the participant or the Company. If a participant disposes of the
Common Stock acquired upon the exercise of his options after at least two years
from the date of grant and one year from the date of exercise, then the
participant must treat as ordinary income the amount by which the lesser of (i)
the fair market value of the Common Stock at the time of disposition, or (ii)
the fair market value of the Common Stock at the date of grant, exceeds the
Purchase Price. Any gain in addition to this amount will be treated as a capital
gain. If a participant holds Common Stock at the time of his or her death, the
holding period requirements are automatically deemed to have been satisfied and
he or she will realize ordinary income in the amount by which the lesser of (i)
the fair market value of the Common Stock at the time of death, or (ii) the fair
market value of the Common Stock at the date of grant exceeds the Purchase
Price. The Company will not be allowed a deduction if the holding period
requirements are satisfied. If a participant disposes of Common Stock before
expiration of two years from the date of grant and one year from the date of
exercise, then the participant must treat as ordinary income the excess of the
fair market value of the Common Stock on the date of exercise of the option over
the Purchase Price. Any additional gain will be treated as long-term or
short-term capital gain or loss, as the case may be. The Company will be allowed
a deduction equal to the amount of ordinary income recognized by the
participant.

17
<PAGE> 20

The above discussion is intended to summarize the applicable provisions of
the Code which are in effect as of January 1, 2000. The tax consequences of
participating in the Plan may vary with respect to individual situations.
Accordingly, participants should consult with their tax advisors in regard to
the tax consequences of participating in the Plan as to both federal and state
income tax considerations.

BENEFITS TO NAMED EXECUTIVE OFFICERS AND OTHERS

Participation in the Plan is voluntary. Consequently, it is not presently
possible to determine either the benefits or amounts that will be received by
any person or group pursuant to the Plan, or that would have been received if
the Plan had been in effect during the last fiscal year.

This proposal requires approval by a majority of all the votes entitled to
be cast by the shareholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL TWO.

ADDITIONAL INFORMATION

The closing price of the Common Stock, as reported by the New York Stock
Exchange on March 17, 2000 was $7.94.

INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP has been appointed by the Board of Directors as the
independent public accountants for the Company for fiscal year 2000. It has
served as the independent public accountants for the Company since 1979.

Representatives of the firm of Arthur Andersen LLP will be present at the
Meeting with the opportunity to make a statement if they desire to do so and
will be available to answer questions concerning the financial affairs of the
Company.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
the Company's Common Stock, to file with the SEC initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Directors, executive officers, and greater than 10% shareholders
are required by SEC regulation to furnish the Company the copies of all 16(a)
reports they file. To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representations that
no other reports were required, during the fiscal year ended December 31, 1999,
all Section 16(a) filing requirements applicable to directors, executive
officers, and greater than 10% beneficial owners were complied with by such
persons.

EXPENSES OF SOLICITATION

The cost of soliciting proxies will be borne by the Company. In addition to
solicitations by mail, officers, directors, and regular employees of the Company
may solicit proxies personally or by telephone, telegraph or other means without
additional compensation. The Company will reimburse brokers, fiduciaries, and
custodians for their costs in forwarding proxy materials to beneficial owners of
Common Stock held in their names.

18
<PAGE> 21

SHAREHOLDERS' PROPOSALS

Proposals of shareholders intended to be presented at the 2001 annual
meeting of shareholders must be received at the Company's principal executive
offices on or before December 2, 2000 [date will be 120 days prior to the date
of this Proxy] to be eligible for inclusion in the Company's proxy statement and
proxy relating to that meeting.

OTHER MATTERS

The management of the Company does not know of any matters to be presented
at the Meeting other than those mentioned in this Proxy Statement. If any other
matters properly come before the Meeting, the persons designated as proxies will
vote on such matters in accordance with their best judgment.

The management of the Company urges you to attend the Meeting and to vote
your shares in person. Whether or not you plan to attend, please sign and
promptly return your proxy. Your proxy may be revoked at any time before it is
voted. Such proxy, if executed and returned, gives discretionary authority with
respect to any other matters that may come before the Meeting.

ANNUAL REPORT ON FORM 10-K

Upon the written request of any person whose proxy is solicited by this
Proxy Statement, the Company will furnish to such person without charge (other
than for exhibits) a copy of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999, including financial statements and
schedules thereto, as filed with the Securities and Exchange Commission.
Requests may be made to IRT Property Company, 200 Galleria Parkway, Suite 1400,
Atlanta, Georgia 30339, Attention: W. Benjamin Jones III Executive Vice
President and Secretary.

IRT PROPERTY COMPANY

/S/ W. BENJAMIN JONES III

By: W. BENJAMIN JONES III
Executive Vice President
and Secretary

19
<PAGE> 22

APPENDIX A

IRT PROPERTY COMPANY
2000 EMPLOYEE STOCK PURCHASE PLAN

TABLE OF CONTENTS

<TABLE>
<C> <S> <C>
Article I -- Background............................................. A-1
1.1 Establishment of the Plan................................... A-1
1.2 Applicability of the Plan................................... A-1
1.3 Purpose..................................................... A-1
Article II -- Definitions........................................... A-1
2.1 Administrator............................................... A-1
2.2 Board....................................................... A-1
2.3 Code........................................................ A-1
2.4 Committee................................................... A-1
2.5 Common Stock................................................ A-1
2.6 Compensation................................................ A-1
2.7 Contribution Account........................................ A-2
2.8 Corporation................................................. A-2
2.9 Direct Registration System.................................. A-2
2.10 Effective Date.............................................. A-2
2.11 Eligible Employee........................................... A-2
2.12 Employee.................................................... A-2
2.13 Employer.................................................... A-2
2.14 Fair Market Value........................................... A-2
2.15 Offering Date............................................... A-2
2.16 Offering Period............................................. A-2
2.17 Option...................................................... A-2
2.18 Participant................................................. A-2
2.19 Plan........................................................ A-2
2.20 Purchase Date............................................... A-2
2.21 Purchase Price.............................................. A-2
2.22 Request Form................................................ A-2
2.23 Stock Account............................................... A-3
2.24 Subsidiary.................................................. A-3
2.25 Trading Date................................................ A-3
Article III -- Eligibility and Participation........................ A-3
3.1 Eligibility................................................. A-3
3.2 Initial Participation....................................... A-3
3.3 Leave of Absence............................................ A-3
Article IV -- Stock Available....................................... A-4
4.1 In General.................................................. A-4
4.2 Adjustment in Event of Changes in Capitalization............ A-4
4.3 Dissolution, Liquidation, or Merger......................... A-4
</TABLE>

i
<PAGE> 23

<TABLE>
<C> <S> <C>
Article V -- Option Provisions............................................................................... A-4
5.1 Purchase Price.................................................................................... A-4
5.2 Calendar Year $25,000 Limit....................................................................... A-5
5.3 Offering Period Limit............................................................................. A-5
Article VI -- Purchasing Common Stock........................................................................ A-5
6.1 Participant's Contribution Account................................................................ A-5
6.2 Payroll Deductions; Dividends..................................................................... A-5
6.3 Discontinuance.................................................................................... A-6
6.4 Leave of Absence; Transfer to Ineligible Status................................................... A-6
6.5 Automatic Exercise................................................................................ A-6
6.6 Listing, Registration, and Qualification of Shares................................................ A-6
Article VII -- Withdrawals; Distributions.................................................................... A-7
7.1 Discontinuance of Deductions; Leave of Absence; Transfer to Ineligible Status..................... A-7
7.2 In-Service Withdrawals............................................................................ A-7
7.3 Termination of Employment for Reasons Other Than Death............................................ A-7
7.4 Death............................................................................................. A-7
7.5 Registration...................................................................................... A-7
Article VIII -- Amendment and Termination.................................................................... A-8
8.1 Amendment......................................................................................... A-8
8.2 Termination....................................................................................... A-8
Article IX -- Miscellaneous.................................................................................. A-8
9.1 Shareholder Approval.............................................................................. A-8
9.2 Employment Rights................................................................................. A-9
9.3 Tax Withholding................................................................................... A-9
9.4 Rights Not Transferable........................................................................... A-9
9.5 No Repurchase of Stock by Corporation............................................................. A-9
9.6 Governing Law..................................................................................... A-9
9.7 Shareholder Approval; Registration................................................................ A-9
</TABLE>

ii
<PAGE> 24

IRT PROPERTY COMPANY

2000 EMPLOYEE STOCK PURCHASE PLAN

ARTICLE I

BACKGROUND

1.1 ESTABLISHMENT OF THE PLAN. IRT Property Company (the "Corporation")
hereby establishes a stock purchase plan to be known as the "IRT Property
Company 2000 Employee Stock Purchase Plan" (the "Plan"), as set forth in this
document. The Plan is intended to be a qualified employee stock purchase plan
within the meaning of Section 423 of the Internal Revenue Code of 1986, as
amended, and the regulations and rulings thereunder.

1.2 APPLICABILITY OF THE PLAN. The provisions of this Plan are applicable
only to certain individuals who, on or after February 4, 2000, are employees of
the Corporation and its subsidiaries participating in the Plan. The Committee
shall indicate from time to time which of its subsidiaries, if any, are
participating in the Plan.

1.3 PURPOSE. The purpose of the Plan is to enhance the proprietary
interest among the employees of the Corporation and its participating
subsidiaries through ownership of Common Stock of the Corporation.

ARTICLE II

DEFINITIONS

Whenever capitalized in this document, the following terms shall have the
respective meanings set forth below.

2.1 ADMINISTRATOR. Administrator shall mean the person or persons (who may
be officers or employees of the Corporation) selected by the Committee to
operate the Plan, perform day-to-day administration of the Plan, and maintain
records of the Plan.

2.2 BOARD. Board shall mean the Board of Directors of the Corporation.

2.3 CODE. Code shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations thereunder.

2.4 COMMITTEE. Committee shall mean a committee which consists of members
of the Board and which has been designated by the Board to have the general
responsibility for the administration of the Plan. Unless otherwise designated
by the Board, the Compensation Committee of the Board of Directors of the
Corporation shall serve as the Committee administering the Plan. Subject to the
express provisions of the Plan, the Committee shall have plenary authority in
its sole and absolute discretion to interpret and construe any and all
provisions of the Plan, to adopt rules and regulations for administering the
Plan, and to make all other determinations necessary or advisable for
administering the Plan. The Committee's determinations on the foregoing matters
shall be conclusive and binding upon all persons.

2.5 COMMON STOCK. Common Stock shall mean the common stock, par value
$1.00, of the Corporation.

2.6 COMPENSATION. Compensation shall mean, for any Participant, for any
Offering Period, the Participant's gross wages for the respective period,
subject to appropriate adjustments that would exclude items such as non-cash
compensation and reimbursement of moving, travel, trade or business expenses.
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2.7 CONTRIBUTION ACCOUNT. Contribution Account shall mean the bookkeeping
account established by the Administrator on behalf of each Participant, which
shall be credited with the amounts deducted from the Participant's Compensation
pursuant to Article VI. The Administrator shall establish a separate
Contribution Account for each Participant for each Offering Period.

2.8 CORPORATION. Corporation shall mean IRT Property Company, a Georgia
corporation.

2.9 DIRECT REGISTRATION SYSTEM. Direct Registration System shall mean a
direct registration system approved by the Securities and Exchange Commission
and by the New York Stock Exchange, Inc. or any securities exchange on which the
Common Stock is then listed, whereby shares of Common Stock may be registered in
the holder's name in book-entry form on the books of the Corporation.

2.10 EFFECTIVE DATE. Effective Date shall mean the effective date of the
Plan, which shall be the effective date of the Corporation's registration
statement on Form S-8 filed under the Securities Act of 1933, as amended,
covering the shares to be issued under the Plan.

2.11 ELIGIBLE EMPLOYEE. An Employee eligible to participate in the Plan
pursuant to Section 3.1.

2.12 EMPLOYEE. Employee shall mean an individual employed by an Employer
who meets the employment relationship described in Treasury Regulation Sections
1.423-2(b) and Section 1.421-7(h).

2.13 EMPLOYER. Employer shall mean the Corporation and any Subsidiary
designated by the Committee as an employer participating in the Plan.

2.14 FAIR MARKET VALUE. Fair Market Value of a share of Common Stock, as
of any designated date, shall mean the closing sales price of the Common Stock
on the New York Stock Exchange on such date or on the last previous date on
which such stock was traded.

2.15 OFFERING DATE. Offering Date shall mean the first Trading Date of
each Offering Period.

2.16 OFFERING PERIOD. Offering Period shall mean the quarterly periods
beginning January 1, April 1, July 1 and October 1, respectively, of each year
during which offers to purchase Common Stock are outstanding under the Plan;
provided, however, that the initial Offering Period shall be the period
beginning on the Effective Date and ending on June 30, 2000. No payroll
deductions shall be taken until the Effective Date.

2.17 OPTION. Option shall mean the option to purchase Common Stock granted
under the Plan on each Offering Date.

2.18 PARTICIPANT. Participant shall mean any Eligible Employee who has
elected to participate in the Plan under Section 3.2.

2.19 PLAN. Plan shall mean the IRT Property Company 2000 Employee Stock
Purchase Plan, as amended and in effect from time to time.

2.20 PURCHASE DATE. Purchase Date shall mean the last Trading Date of each
Offering Period.

2.21 PURCHASE PRICE. Purchase Price shall mean the purchase price of
Common Stock determined under Section 5.1.

2.22 REQUEST FORM. Request Form shall mean an Employee's authorization
either in writing on a form approved by the Administrator or through electronic
communication approved by the Administrator which specifies the Employee's
payroll deduction in accordance with Section 6.2, and satisfies such other terms
and provisions as may be required by the Administrator.

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2.23 STOCK ACCOUNT. Stock Account shall mean the account established by
the Administrator on behalf of each Participant, which shall be credited with
shares of Common Stock purchased pursuant to the Plan and dividends thereon
until distributed in accordance with the terms of the Plan.

2.24 SUBSIDIARY. Subsidiary shall mean any present or future corporation
which is a "subsidiary corporation" of the Corporation as defined in Code
Section 424(f).

2.25 TRADING DATE. Trading Date shall mean a date on which shares of
Common Stock are traded on a national securities exchange (such as the New York
Stock Exchange), the Nasdaq National Market or in the over-the-counter market.

Except when otherwise indicated by the context, the definition of any term
herein in the singular may also include the plural.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.1 ELIGIBILITY. Each Employee who is an Employee regularly scheduled to
work at least 20 hours each week and at least five months each calendar year
shall be eligible to participate in the Plan as of the later of:

(a) the Offering Date immediately following the Employee's last date
of hire by an Employer; or

(b) the Effective Date.

On each Offering Date, Options will automatically be granted to all
Employees then eligible to participate in the Plan; provided, however, that no
Employee shall be granted an Option for an Offering Period if, immediately after
the grant, the Employee would own stock, and/or hold outstanding options to
purchase stock, possessing five percent or more of the total combined voting
power or value of all classes of stock of the Corporation or any Subsidiary. For
purposes of this Section, the attribution rules of Code Section 424(d) shall
apply in determining stock ownership of any Employee. If an Employee is granted
an Option for an Offering Period and such Employee does not participate in the
Plan for such Offering Period, such Option will be deemed never to have been
granted for purposes of applying the $25,000 annual limitation described in
Section 5.2.

3.2 INITIAL PARTICIPATION. An Eligible Employee having been granted an
Option under Section 3.1 may submit a Request Form to the Administrator to
participate in the Plan for an Offering Period. The Request Form shall authorize
a regular payroll deduction from the Employee's Compensation for the Offering
Period, subject to the limits and procedures described in Article VI. A
Participant's Request Form authorizing a regular payroll deduction shall remain
effective from Offering Period to Offering Period until amended or canceled
under Section 6.3.

3.3 LEAVE OF ABSENCE. For purposes of Section 3.1, an individual on a
leave of absence from an Employer shall be deemed to be an Employee for the
first 90 days of such leave. For purposes of this Plan, such individual's
employment with the Employer shall be deemed to terminate at the close of
business on the 90th day of the leave, unless the individual has returned to
regular employment with an Employer before the close of business on such 90th
day. Termination of any individual's leave of absence by an Employer, other than
on account of a return to employment with an Employer, shall be deemed to
terminate an individual's employment with the Employer for all purposes of the
Plan.

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ARTICLE IV

STOCK AVAILABLE

4.1 IN GENERAL. Subject to the adjustments in Sections 4.2 and 4.3, an
aggregate of 300,000 shares of Common Stock shall be available for purchase by
Participants pursuant to the provisions of the Plan. These shares may be
authorized and unissued shares or may be shares issued and subsequently acquired
by the Corporation. If an Option under the Plan expires or terminates for any
reason without having been exercised in whole or part, the shares subject to
such Option that are not purchased shall again be available for subsequent
Option grants under the Plan. If the total number of shares of Common Stock for
which Options are exercised on any Purchase Date exceeds the maximum number of
shares then available under the Plan, the Committee shall make a pro rata
allocation of the shares available in as nearly a uniform manner as shall be
practicable and as it shall determine to be equitable; and the balance of the
cash credited to Participants' Contribution Accounts shall be distributed to the
Participants as soon as practicable.

4.2 ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION. In the event of a
stock dividend, stock split or combination of shares, recapitalization or other
change in the Corporation's capitalization, or other distribution with respect
to holders of the Corporation's Common Stock other than normal cash dividends,
an automatic adjustment shall be made in the number and kind of shares as to
which outstanding Options or portions thereof then unexercised shall be
exercisable and in the available shares set forth in Section 4.1, so that the
proportionate interest of the Participants shall be maintained as before the
occurrence of such event. This adjustment in outstanding Options shall be made
without change in the total price applicable to the unexercised portion of such
Options and with a corresponding adjustment in the Purchase Price per share;
provided, however, that in no event shall any adjustment be made that would
cause any Option to fail to qualify as an option pursuant to an employee stock
purchase plan within the meaning of Section 423 of the Code.

4.3 DISSOLUTION, LIQUIDATION, OR MERGER. Upon the dissolution or
liquidation of the Corporation, or upon a reorganization, merger, or
consolidation of the Corporation with one or more corporations in which the
Corporation is not the surviving corporation, or upon a sale of substantially
all of the property or stock of the Corporation to another corporation, the
holder of each Option then outstanding under the Plan shall be entitled to
receive at the next Purchase Date upon the exercise of such Option for each
share as to which such Option shall be exercised, as nearly as reasonably may be
determined, the cash, securities, or property which a holder of one share of the
Common Stock was entitled to receive upon and at the time of such transaction.
The Committee shall take such steps in connection with these transactions as the
Committee deems necessary or appropriate to assure that the provisions of this
Section shall thereafter be applicable, as nearly as reasonably may be
determined, in relation to the cash, securities, or property which the holder of
the Option may thereafter be entitled to receive. In lieu of the foregoing, the
Committee may terminate the Plan in accordance with Section 8.2.

ARTICLE V

OPTION PROVISIONS

5.1 PURCHASE PRICE. The Purchase Price of a share of Common Stock
purchased for a Participant pursuant to each exercise of an Option shall be the
lesser of:

(a) the Fair Market Value of a share of Common Stock on the Offering
Date; or

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(b) the Fair Market Value of a share of Common Stock on the Purchase
Date.

The Board of Directors and/or the Compensation Committee may, at any time
prior to the commencement of a given Offering Period, establish a Purchase Price
for such Offering Period that results in a discount in the Purchase Price;
provided, however, that in no event shall such discount exceed fifteen percent
(15%).

5.2 CALENDAR YEAR $25,000 LIMIT. Notwithstanding anything else contained
herein, no Employee may be granted an Option for any Offering Period which
permits such Employee's rights to purchase Common Stock under this Plan and any
other qualified employee stock purchase plan (within the meaning of Code Section
423) of the Corporation and its Subsidiaries to accrue at a rate which exceeds
$25,000 of Fair Market Value of such Common Stock for each calendar year in
which an Option is outstanding at any time. For purposes of this Section, Fair
Market Value shall be determined as of the Offering Date.

5.3 OFFERING PERIOD LIMIT. Notwithstanding anything else contained herein,
the maximum number of shares of Common Stock that an Eligible Employee may
purchase in any Offering Period is 1,000 shares.

ARTICLE VI

PURCHASING COMMON STOCK

6.1 PARTICIPANT'S CONTRIBUTION ACCOUNT. The Administrator shall establish
a book account in the name of each Participant for each Offering Period. As
discussed in Section 6.2 below, a Participant's payroll deductions shall be
credited to the Participant's Contribution Account, without interest, until such
cash is withdrawn, distributed, or used to purchase Common Stock as described
below.

During such time, if any, as the Corporation participates in a Direct
Registration System, shares of Common Stock acquired upon exercise of an Option
shall be directly registered in the name of the Participant. If the Corporation
does not participate in a Direct Registration System, then until distribution is
requested by a Participant pursuant to Article VII, stock certificates
evidencing the Participant's shares of Common Stock acquired upon exercise of an
Option shall be held by the Corporation as the nominee for the Participant.
These shares shall be credited to the Participant's Stock Account. Certificates
shall be held by the Corporation as nominee for Participants solely as a matter
of convenience. A Participant shall have all ownership rights as to the shares
credited to his or her Stock Account, and the Corporation shall have no
ownership or other rights of any kind with respect to any such certificates or
the shares represented thereby.

All cash received or held by the Corporation under the Plan may be used by
the Corporation for any corporate purpose. The Corporation shall not be
obligated to segregate any assets held under the Plan.

6.2 PAYROLL DEDUCTIONS; DIVIDENDS.

(a) Payroll Deductions. By submitting a Request Form at any time
before an Offering Period in accordance with rules adopted by the
Committee, an Eligible Employee may authorize a payroll deduction to
purchase Common Stock under the Plan for the Offering Period. The payroll
deduction shall be effective on the first pay period during the Offering
Period commencing after receipt of the Request Form by the Administrator.
The payroll deduction shall be in any whole percentage up to a maximum of
ten percent (10%) of such Employee's Compensation payable each pay period,
and at any other time an element of Compensation is payable. A
Participant's payroll deduction shall not be less than one percent (1%) of
such Employee's Compensation payable each payroll period.

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(b) Dividends. Cash dividends paid on Common Stock which is credited
to a Participant's Stock Account as of the dividend payment date shall be
credited to the Participant's Stock Account and paid to the Participant as
soon as practicable.

6.3 DISCONTINUANCE. A Participant may discontinue his or her payroll
deductions for an Offering Period by filing a new Request Form with the
Administrator. This discontinuance shall be effective on the first pay period
commencing at least 30 days after receipt of the Request Form by the
Administrator. A Participant who discontinues his or her payroll deductions for
an Offering Period may not resume participation in the Plan until the following
Offering Period.

Any amount held in the Participant's Contribution Account for an Offering
Period after the effective date of the discontinuance of his or her payroll
deductions will either be refunded or used to purchase Common Stock in
accordance with Section 7.1.

6.4 LEAVE OF ABSENCE; TRANSFER TO INELIGIBLE STATUS. If a Participant
either begins a leave of absence, is transferred to employment with a Subsidiary
not participating in the Plan, or remains employed with an Employer but is no
longer eligible to participate in the Plan, the Participant shall cease to be
eligible for payroll deductions to his or her Contribution Account pursuant to
Section 6.2. The cash standing to the credit of the Participant's Contribution
Account shall become subject to the provisions of Section 7.1.

If the Participant returns from the leave of absence before being deemed to
have ceased employment with the Employer under Section 3.3, or again becomes
eligible to participate in the Plan, the Request Form, if any, in effect
immediately before the leave of absence or disqualifying change in employment
status shall be deemed void and the Participant must again complete a new
Request Form to resume participation in the Plan.

6.5 AUTOMATIC EXERCISE. Unless the cash credited to a Participant's
Contribution Account is withdrawn or distributed as provided in Article VII, his
or her Option shall be deemed to have been exercised automatically on each
Purchase Date, for the purchase of the number of full shares of Common Stock
which the cash credited to his or her Contribution Account at that time will
purchase at the Purchase Price. If there is a cash balance remaining in the
Participant's Contribution Account at the end of an Offering Period representing
the exercise price for a fractional share of Common Stock, such balance may be
retained, without interest, in the Participant's Contribution Account for the
next Offering Period, unless the Participant requests that it be refunded. Any
other cash balance remaining in the Participant's Contribution Account at the
end of an Offering Period shall be refunded to the Participant, without
interest. The amount of cash that may be used to purchase shares of Common Stock
may not exceed the Compensation restrictions set forth in Section 6.2.

Except as provided in the preceding paragraph, if the cash credited to a
Participant's Contribution Account on the Purchase Date exceeds the applicable
Compensation restrictions of Section 6.2 or exceeds the amount necessary to
purchase the maximum number of shares of Common Stock available during the
Offering Period, such excess cash shall be refunded to the Participant. Except
as provided in the preceding paragraph, the excess cash may not be used to
purchase shares of Common Stock nor retained in the Participant's Contribution
Account for a future Offering Period.

Each Participant shall receive a statement on an annual basis indicating
the number of shares credited to his or her Stock Account, if any, under the
Plan.

6.6 LISTING, REGISTRATION, AND QUALIFICATION OF SHARES. The granting of
Options for, and the sale and delivery of, Common Stock under the Plan shall be
subject to the effecting by the Corporation of any listing, registration, or
qualification of the shares subject to that Option upon any securities exchange
or under any
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federal or state law, or the obtaining of the consent or approval of any
governmental regulatory body deemed necessary or desirable for the issuance or
purchase of the shares covered.

ARTICLE VII

WITHDRAWALS; DISTRIBUTIONS

7.1 DISCONTINUANCE OF DEDUCTIONS; LEAVE OF ABSENCE; TRANSFER TO INELIGIBLE
STATUS. In the event of a Participant's complete discontinuance of payroll
deductions under Section 6.3 or a Participant's leave of absence or transfer to
an ineligible status under Section 6.4, the cash balance then standing to the
credit of the Participant's Contribution Account shall be:

(a) returned to the Participant, in cash, without interest, as soon as
practicable, upon the Participant's written request received by the
Administrator at least 30 days before the next Purchase Date; or

(b) held under the Plan and used to purchase Common Stock for the
Participant under the automatic exercise provisions of Section 6.5.

7.2 IN-SERVICE WITHDRAWALS. During such time, if any, as the Corporation
participates in a Direct Registration System, shares of Common Stock acquired
upon exercise of an Option shall be directly registered in the name of the
Participant and the Participant may withdraw certificates in accordance with the
applicable terms and conditions of such Direct Registration System. If the
Corporation does not participate in a Direct Registration System, (i) a
Participant may, while an Employee of the Corporation or any Subsidiary,
withdraw certificates for some or all of the shares of Common Stock credited to
his or her Stock Account at any time, upon 30 days' written notice to the
Administrator, and (ii) each Participant shall be permitted only one withdrawal
under this Section during each Offering Period. If a Participant requests a
distribution of only a portion of the shares of Common Stock credited to his or
her Stock Account, the Administrator will distribute the oldest securities held
in the Participant's Stock Account first, using a first in-first out
methodology. The Administrator may at any time distribute certificates for some
or all of the shares of Common Stock credited to a Participant's Stock Account,
whether or not the Participant so requests.

7.3 TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH. If a
Participant terminates employment with the Corporation and the Subsidiaries for
reasons other than death, the cash balance in the Participant's Contribution
Account shall be returned to the Participant in cash, without interest, as soon
as practicable. Certificates for the shares of Common Stock credited to his or
her Stock Account shall be distributed to the Participant as soon as
practicable, unless the Corporation then participates in a Direct Registration
System, in which case, the Participant shall be entitled to evidence of
ownership of such shares in such form as the terms and conditions of such Direct
Registration System permit.

7.4 DEATH. In the event a Participant dies, the cash balance in his or her
Contribution Account shall be distributed to the Participant's estate, in cash,
without interest, as soon as practicable. Certificates for the shares of Common
Stock credited to the Participant's Stock Account shall be distributed to the
estate as soon as practicable, unless the Corporation then participates in a
Direct Registration System, in which case, the estate shall be entitled to
evidence of ownership of such shares in such form as the terms and conditions of
such Direct Registration System permit.

7.5 REGISTRATION. Whether represented in certificate form or by direct
registration pursuant to a Direct Registration System, shares of Common Stock
acquired upon exercise of an Option shall be directly registered

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in the name of the Participant or, if the Participant so indicates on the
Request Form, (a) in the Participant's name jointly with a member of the
Participant's family, with the right of survivorship, (b) in the name of a
custodian for the Participant (in the event the Participant is under a legal
disability or cannot otherwise have stock issued in the Participant's name), or
(c) in a manner giving effect to the status of such shares as community
property. No other names may be included in the Common Stock registration. The
Corporation shall pay all issue or transfer taxes with respect to the issuance
or transfer of shares of such Common Stock, as well as all fees and expenses
necessarily incurred by the Corporation in connection with such issuance or
transfer.

ARTICLE VIII

AMENDMENT AND TERMINATION

8.1 AMENDMENT. The Committee shall have the right to amend or modify the
Plan, in full or in part, at any time and from time to time; provided, however,
that no amendment or modification shall:

(a) affect any right or obligation with respect to any grant
previously made, unless required by law, or

(b) unless previously approved by the stockholders of the Corporation,
where such approval is necessary to satisfy federal securities laws, the
Code, or rules of any stock exchange on which the Corporation's Common
Stock is listed:

(1) in any manner materially affect the eligibility requirements
set forth in Sections 3.1 and 3.3, or change the definition of Employer
as set forth in Section 2.13;

(2) increase the number of shares of Common Stock subject to any
options issued to Participants (except as provided in Sections 4.2 and
4.3); or

(3) materially increase the benefits to Participants under the
Plan.

8.2 TERMINATION. The Committee may terminate the Plan at any time in its
sole and absolute discretion. The Plan shall be terminated by the Committee if
at any time the number of shares of Common Stock authorized for purposes of the
Plan is not sufficient to meet all purchase requirements, except as specified in
Section 4.1.

Upon termination of the Plan, the Administrator shall give notice thereof
to Participants and shall terminate all payroll deductions. Cash balances then
credited to Participants' Contribution Accounts shall be distributed as soon as
practicable, without interest.

ARTICLE IX

MISCELLANEOUS

9.1 SHAREHOLDER APPROVAL. The Plan shall be approved and ratified by the
stockholders of the Corporation, not later than 12 months after adoption of the
Plan by the Board of Directors of the Corporation, pursuant to Treasury
Regulation Section 1.423-2(c). If for any reason such approval is not given by
such date, the Plan shall be null and void, and all payroll deductions to the
Plan shall cease. The cash balances and Common Stock credited to Participants'
accounts shall be promptly distributed to them; and any Common

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Stock certificates issued and delivered to Participants prior to such date shall
remain the property of the Participants.

9.2 EMPLOYMENT RIGHTS. Neither the establishment of the Plan, nor the
grant of any Options thereunder, nor the exercise thereof shall be deemed to
give to any Employee the right to be retained in the employ of the Corporation
or any Subsidiary or to interfere with the right of the Corporation or any
Subsidiary to discharge any Employee or otherwise modify the employment
relationship at any time.

9.3 TAX WITHHOLDING. The Administrator will make appropriate provisions
for withholding of federal, state, and local income taxes, and any other taxes,
from a Participant's Compensation to the extent the Administrator deems such
withholding to be legally required.

9.4 RIGHTS NOT TRANSFERABLE. Rights and Options granted under this Plan
are not transferable by the Participant other than by will or by the laws of
descent and distribution and are exercisable only by the Participant during his
or her lifetime, or, after the Participant's lifetime, only by his or her
beneficiary, descendent or other permitted transferee.

9.5 NO REPURCHASE OF STOCK BY CORPORATION. The Corporation is under no
obligation to repurchase from any Participant any shares of Common Stock
acquired under the Plan.

9.6 GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Georgia except to the extent such laws
are preempted by the laws of the United States.

9.7 SHAREHOLDER APPROVAL; REGISTRATION. The Plan was adopted by the Board
of Directors of the Corporation on February 4, 2000 to be effective as of the
Effective Date, provided that no payroll deductions may begin until a
registration statement on Form S-8 filed under the Securities Act of 1933, as
amended, covering the shares to be issued under the Plan, has become effective.
The Plan is subject to approval by the stockholders of the Corporation within 12
months of approval by the Board of Directors.

* * * * * * * * * * * * * *

The foregoing is hereby acknowledged as being the IRT Property Company 2000
Employee Stock Purchase Plan as adopted by the Board of Directors of the
Corporation on February 4, 2000.

IRT Property Company

By:
------------------------------------
Name: Thomas H. McAuley
Title: President and Chief Executive
Officer

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PROXY FORM IRT PROPERTY COMPANY PROXY FORM

THIS PROXY IS SOLICITED BY THE COMPANY'S BOARD OF DIRECTORS AND
MAY BE REVOKED PRIOR TO ITS EXERCISE
PROXY FOR 2000 ANNUAL MEETING OF SHAREHOLDERS

Proxy For Annual Meeting of Shareholders Solicited By the Board of Directors

The undersigned hereby appoints Thomas H. McAuley and W. Benjamin Jones III,
and either of them, as Proxies, each with the full power of substitution to
represent the undersigned and to vote all the shares of IRT Property Company
(the "Company") which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held at Cobb Galleria Centre, Two Galleria
Parkway, Room 106, Atlanta, Georgia 30339 on Tuesday, May 16, 2000 at 10:00 A.M.
local time, and any adjournments thereof (the "Meeting") (1) as hereinafter
specified upon the proposals listed on the reverse side and more particularly
described in the Company's proxy statement, receipt of which is hereby
acknowledged, and (2) in their discretion upon such other matters as may
properly come before the Meeting.

1. ELECTION OF DIRECTORS

<TABLE>
<S> <C> <C> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees
(except as marked to the contrary) listed below
</TABLE>

Nominees: (1)T.H. McAuley, (2)P.L. Flinn, (3)H.B. Gibbs, Jr., (4)S.W. Kendrick,
(5)B.A. Morrice

To withhold authority to vote for any individual nominee, mark "For" and write
the nominee's number on the line below.

- --------------------------------------------------------------------------------

Please date and sign this proxy on the reverse side and mail without delay in
the enclosed envelope

2. APPROVAL OF THE IRT PROPERTY COMPANY 2000 EMPLOYEE STOCK PURCHASE PLAN

[ ] FOR [ ] AGAINST [ ] ABSTAIN

This proxy when properly executed will be voted in the manner directed
herein by the shareholder whose signature appears below. If no direction is
made, the proxy will be voted FOR Items 1 and 2, and in the discretion of the
Proxies on any other matters. When signing as attorney-in-fact, executor,
administrator, trustee, guardian or officer of a corporation, please give full
title as such. On joint accounts, each owner should sign.

[ ] Please mark this box if you plan to attend the Annual Dated: , 2000
Meeting

---------------------------------------
Signature

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Signature (Joint Owners)
</TABLE>