VININGS INVESTMENT PROPERTIES TRUST/GA, DEF 14A, 1997-05-28

VININGS INVESTMENT PROPERTIES TRUST/GA
DEF 14A, 1997-05-28
REAL ESTATE INVESTMENT TRUSTS

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SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commmission Only
(as permitted by Rule a4a-6Ie)(2)
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 14a-11(c) or 14a-12

VININGS INVESTMENT PROPERTIES TRUST
-----------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, of other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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

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

(3) Per unit price or other underlying value of transaction computer pursuant
Exchange Act Rule 0-11.

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

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

(1) Amount previously paid:

(2) Form, Schedule or Registration Statement no.:

(3) Filing party:

(4) Date filed:
<PAGE>

VININGS INVESTMENT PROPERTIES TRUST

3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
(770) 984-9500

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of
Vinings Investment Properties Trust (the "Trust") to be held on Tuesday, July 1,
1997, at 10:00 a.m., local time, at Cobb Galleria Centre, Two Galleria Parkway,
Atlanta, GA 30339 (the "Annual Meeting").

The Annual Meeting has been called for the purpose of electing seven
Trustees, each to serve for a one-year term, the adoption of the Vinings
Investment Properties Trust 1997 Stock Option and Incentive Plan, and
considering and voting upon such other business as may properly come before the
meeting or any adjournments or postponements thereof.

The Board of Trustees has fixed the close of business on May 20, 1997 as
the record date for determining shareholders entitled to notice of and vote at
the Annual Meeting and any adjournments or postponements thereof.

The Board of Trustees of the Trust recommends that you vote "FOR" the
election of the seven nominees of the Board of Trustees as Trustees of the Trust
and the adoption of the Vinings Investment Properties Trust 1997 Stock Option
and Incentive Plan.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY CARD.

Very truly yours,

PETER D. ANZO
President and Chief Executive Officer

<PAGE>

VININGS INVESTMENT PROPERTIES TRUST

3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
(770) 984-9500
--------------------

NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS

To be Held on Tuesday, July 1, 1997
--------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Vinings
Investment Properties Trust (the "Trust") will be held on Tuesday, July 1, 1997,
at 10:00 a.m., local time, at Cobb Galleria Centre, Two Galleria Parkway,
Atlanta, Georgia 30339 (the "Annual Meeting"), for the purpose of considering
and voting upon:

1. The election of seven Trustees, each to serve for a one-year term and
until the election and qualification of his or her successor;

2. The adoption of the Vinings Investment Properties Trust 1997 Stock
Option and Incentive Plan; and

3. Such other business as may properly come before the meeting and any
adjournments or postponements thereof.

Under the provisions of the Trust's Declaration of Trust, the Board of
Trustees has fixed the close of business on May 20, 1997 as the record date for
the determination of shareholders entitled to notice of and vote at the Annual
Meeting and any adjournments or postponements thereof. Only holders of record of
shares of beneficial interest at the close of business on that date will be
entitled to notice of and vote at the Annual Meeting and any adjournments or
postponements thereof.

In the event there are not sufficient votes with respect to the foregoing
proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned
to permit further solicitation of proxies.

By Order of the Board of Trustees,

STEPHANIE A. REED
Secretary

June 2, 1997

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU
HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.

<PAGE>

VININGS INVESTMENT PROPERTIES TRUST

3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
(770) 984-9500
-----------------------------

PROXY STATEMENT
-----------------------------

ANNUAL MEETING OF SHAREHOLDERS

To Be Held on Tuesday, July 1, 1997

This Proxy Statement and the enclosed Proxy Card are being furnished in
connection with the solicitation of proxies by the Board of Trustees of Vinings
Investment Properties Trust (the "Trust") for use at the Annual Meeting of
Shareholders of the Trust to be held on Tuesday, July 1, 1997, at 10:00 a.m.,
local time, at Cobb Galleria Centre, Two Galleria Parkway, Atlanta, Georgia
30339, and any adjournments or postponements thereof (the "Annual Meeting").

At the Annual Meeting, the shareholders of the Trust will be asked to
consider and vote upon the following matters:

1. The election of seven Trustees, each to serve for a one-year term and
until the election and qualification of his or her successor;

2. The adoption of the Vinings Investment Properties Trust 1997 Stock
Option and Incentive Plan; and

3. Such other business as may properly come before the meeting and any
adjournments or postponements thereof.

The Notice of Annual Meeting, Proxy Statement and Proxy Card are first
being mailed to shareholders of the Trust on or about June 2, 1997 in connection
with the solicitation of proxies for the Annual Meeting. The Board of Trustees
has fixed the close of business on May 20, 1997 as the record date for the
determination of shareholders entitled to notice of and vote at the Annual
Meeting (the "Record Date"). Only holders of record of shares of beneficial
interest, without par value (the "Shares"), of the Trust at the close of
business on the Record Date will be entitled to notice of and vote at the Annual
Meeting. As of the Record Date, there were 1,080,516 Shares outstanding and
entitled to vote at the Annual Meeting and 800 shareholders of record. Each
Share outstanding as of the close of business on the Record Date entitles the
holder thereof to one vote on each matter properly submitted at the Annual
Meeting. As of the Record Date, Trustees and officers of the Trust, all of whom
have indicated that they will vote all of their Shares of the Trust in favor of
the election of the seven Trustees nominated by the Board of Trustees and for
the adoption of the Vinings Investment Properties Trust 1997 Stock Option and
Incentive Plan, and their affiliates were owners of 493,746 Shares, representing
approximately 45.7% of the outstanding Shares of the Trust.

<PAGE>

Introduction
- ------------

On December 21, 1995, the Trust entered into an Agreement Regarding Tender
Offer with an unaffiliated third party, which subsequently assigned its rights
under the agreement to Vinings Investment Properties, Inc. (the "Purchaser"), a
newly formed corporation. On January 31, 1996, the Purchaser commenced a tender
offer (the "Tender Offer") for a minimum of a majority and a maximum of 85% of
the issued and outstanding Shares of the Trust at a purchase price of $0.47 per
Share ($3.76 adjusted for the 1-for-8 share split (the "Share Split") that was
effected on July 1, 1996). The Tender Offer expired in accordance with its terms
at midnight on February 28, 1996, and the Purchaser subsequently accepted an
aggregate of 6,337,279 Shares (792,159 Shares as adjusted for the Share Split)
validly tendered and not withdrawn pursuant to the Tender Offer, representing
approximately 73.3% of the outstanding Shares, for a total acquisition price of
$2,978,521. The purpose of the Tender Offer was for the Purchaser to acquire
control of the Trust, to rebuild the Trust's assets by expanding into the
multifamily property markets and to cause the Trust to be operated as a
self-administered real estate investment trust (a "REIT").

Effective February 29, 1996, James L. Mooney, John McMahan, Mercer Jackson,
Arthur C. Karlin, Patrick E. McCarthy and Victor MacFarlane resigned from the
Trust's Board of Trustees and Peter D. Anzo, Martin H. Petersen, Stephanie A.
Reed, Gilbert H. Watts, Jr. and Phill D. Greenblatt were appointed to the
Trust's Board of Trustees, pursuant to an arrangement between the Purchaser and
the Trust in connection with the Tender Offer. The management of the Trust also
resigned effective February 29, 1996, and Peter D. Anzo became the President and
Chief Executive Officer, and Stephanie A. Reed became the Vice President,
Secretary and Treasurer, of the Trust. In addition, on April 18, 1996, the Board
of Trustees named Henry Hirsch to the Board of Trustees and on February 10,
1997, the Board of Trustees named Thomas B. Bender to the Board of Trustees.

Voting
- ------

The representation in person or by proxy of at least a majority of the
outstanding Shares entitled to vote is necessary to provide a quorum at the
Annual Meeting. Each Share outstanding on the Record Date is entitled to one
vote. A quorum being present, the affirmative vote of a majority of the votes
cast at the Annual Meeting is required to elect Trustees and to adopt the
Vinings Investment Properties Trust 1997 Stock Option and Incentive Plan set
forth in Proposal 2. Shares that reflect abstentions or "broker non-votes"
(i.e., Shares represented at the meeting held by brokers or nominees as to which
instructions have not been received from the beneficial owners or persons
entitled to vote such Shares and the broker or nominee does not have
discretionary voting power to vote such Shares) will be counted for purposes of
determining whether a quorum is present for the transaction of business at the
meeting. With respect to the election of Trustees, votes may be cast in favor of
or withheld from each nominee; votes that are withheld will be excluded entirely
from the vote and will have no effect. Broker non-votes and abstentions will
have no effect on the outcome of Proposal 2.

The Annual Report of the Trust, including financial statements for the
fiscal year ended December 31, 1996 ("fiscal 1996"), is being mailed to
shareholders of the Trust concurrently with this Proxy Statement. The Annual
Report, however, is not a part of the proxy solicitation material.

Proxies; Revocation of Proxies
- ------------------------------

Shareholders of the Trust are requested to complete, date, sign and return
the accompanying Proxy Card in the enclosed envelope. Shares represented by
properly executed proxies received by the Trust and not revoked will be voted at
the Annual Meeting in accordance with the instructions contained therein. If
instructions are not given therein, properly executed proxies will be voted
"FOR" the election of the seven nominees for Trustees set forth in Proposal 1 of
this Proxy Statement and "FOR" the adoption of the Vinings Investment Properties
Trust 1997 Stock Option and Incentive Plan set forth in Proposal 2 of this Proxy
Statement. It is not anticipated that any matters other than those set forth in
this Proxy Statement will be presented at the Annual Meeting. If other matters
are presented, proxies will be voted in accordance with the discretion of the
proxy holders.
<PAGE>
Any properly completed proxy may be revoked at any time before it is voted
on any matter (without, however, affecting any vote taken prior to such
revocation) by giving written notice of such revocation to the Secretary of the
Trust, or by signing and duly delivering a proxy bearing a later date, or by
attending the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not, by itself, revoke a proxy.

Expenses of Solicitation
- ------------------------

All expenses of this solicitation will be borne by the Trust. Brokerage
firms, nominees, fiduciaries and other custodians have been requested to forward
proxy solicitation materials to the beneficial owners of Shares held of record
by such persons, and the Trust will reimburse such brokerage firms, nominees,
fiduciaries and other custodians for reasonable out-of-pocket expenses incurred
by them in connection therewith. In addition to solicitation of proxies by mail,
Trustees, officers and employees of the Trust, without receiving additional
compensation therefor, may solicit proxies from shareholders of the Trust by
telephone, telefax, letter, in person or by other means.

PROPOSAL 1

ELECTION OF TRUSTEES

Nominees
- --------

The Board of Trustees of the Trust consists of seven members, each of whom
serves for a one-year term and until the election and qualification of his or
her successor.

At the Annual Meeting, seven Trustees will be elected to serve until the
1998 annual meeting of shareholders and until the election and qualification of
his or her successor. The Board of Trustees has nominated Peter D. Anzo, Martin
H. Petersen, Stephanie A. Reed, Gilbert H. Watts, Jr., Phill D. Greenblatt,
Henry Hirsch and Thomas B. Bender, all of whom currently serve as Trustees, for
re-election as Trustees. Certain information with respect to the persons
nominated by the Board of Trustees for election as Trustees is shown below under
"Information Regarding Trustees." Unless otherwise specified in the proxy, it is
the intention of the proxy holders to vote the Shares represented by each
properly executed proxy for the election as Trustees of each of the nominees.
Each of the nominees has agreed to stand for re-election and to serve if
re-elected as a Trustee. If any of the persons nominated by the Board of
Trustees fails to stand for re-election or is unable to accept re-election,
however, proxies not marked to the contrary will be voted in favor of the
election of such other person as the Board of Trustees may recommend.

Vote Required For Approval
- --------------------------

A quorum being present, the affirmative vote of a majority of the votes
cast is necessary to elect a nominee as a Trustee of the Trust.

The Board of Trustees of the Trust recommends that the Trust's shareholders
vote "FOR" the election of the seven nominees of the Board of Trustees as
Trustees of the Trust.

INFORMATION REGARDING TRUSTEES

General
- -------

The Board of Trustees of the Trust consists of seven members who are
elected by the Trust's shareholders at each annual meeting of the Trust. Set
forth below is certain information regarding the Trustees.

Information Regarding Trustees
- ------------------------------

PETER D. ANZO, age 43, has been Chief Executive Officer, President and
Chairman of the Board of Trustees since 1996. Since 1990, Mr. Anzo has been
Chief Executive Officer and a director of A&P Investors, Inc. He is also Chief
Executive Officer and a director of The Vinings Group, Inc., a position he has
held since 1987. Mr. Anzo has been on the Legislative Committee since 1995, a
delegate since 1991, and is currently Vice Chairman of the Political Action
Committee of the National Apartment Association. He has been a Co-Chairman of
the Government Affairs Committee since 1995, Co-Chairman of the Affordable
Housing Task Force and a director since 1992 of the Atlanta Apartment
Association. He has been a director of the Georgia Apartment Association since
1993. From 1983 until 1986, Mr. Anzo served as Vice President of Acquisitions of
First Investment Companies, where he was involved in the management and
acquisition of commercial apartment properties throughout the United States. Mr.
Anzo was the Vice President, Dispositions of Balcor/American Express from 1981
until 1983, where he was involved in the sale of apartment and commercial
properties in the United States. During 1976 through 1981, Mr. Anzo was employed
by The Beaumont Company, Los Angeles, California and Linkletter Properties,
where he was involved in the management, leasing, purchase and construction of
real property.

MARTIN H. PETERSEN, age 47, has been a Trustee since 1996. Since 1990, Mr.
Petersen has been President and a director of A&P Investors, Inc. He is also
President and a director of The Vinings Group, Inc., a position he has held
since 1987. Since 1975 Mr. Petersen has been a member of the Institute of Real
Estate Management. From 1984 through 1987, Mr. Petersen was Vice President of
Southeast United States Plaza Equities Management and Plaza Pacific Equities,
Inc., where he supervised the management of 5,770 apartment units located
throughout the Southeastern United States, including 3,000 garden style
apartment units in Atlanta, Georgia, and managed the acquisition, performance
and disposition of properties. Mr. Petersen served as a Branch Manager of GK
Properties of Atlanta, Georgia, from 1979 to 1984, where he was responsible for
overseeing the operations of its Southeastern United States offices, which
included the acquisition and management of 5,500 garden style apartment units in
Atlanta, Georgia. Prior to joining GK Properties, from 1975 through 1979, he
served as Vice President of Stonehenge Properties and Stonehenge Realty Corp.,
where he oversaw the management of the commercial office division and performed
various other functions, including the initiation of numerous feasibility,
marketing and other consulting studies for REITs, financial institutions,
savings & loans and other owners of distressed and foreclosed properties. From
1971 to 1974, Mr. Petersen was a credit analyst for Dun & Bradstreet in its
Business Trades Division.

STEPHANIE A. REED, age 39, has been Vice President, Secretary, Treasurer
and a Trustee since 1996. Since 1991, Ms. Reed has been Vice President and a
director of A&P Investors, Inc. She is also Vice President and a director of The
Vinings Group, Inc., a position she has held since 1991. From 1987 to 1991, Ms.
Reed was Vice President - Development of The Sterling Group, Inc., a multifamily
development company located in Atlanta, Georgia, where she was responsible for
all phases of development for multifamily projects. Prior to 1987, she served as
Vice President - Finance of The Sterling Group, Inc., in the syndication and
management of multifamily projects. Prior to joining The Sterling Group, Inc.,
Ms. Reed served as a tax supervisor at Jones and Kolb, CPAs from 1983 through
1984, where her responsibilities included the training and supervision of audit
and year-end work for real estate limited partnerships. From 1981 to 1983, Ms.
Reed performed tax planning and preparation work for trusts, estates,
partnerships and corporations for Osburn Henning and Company, CPAs.

GILBERT H. WATTS, JR., age 47, has been a Trustee since 1996. Mr. Watts is
Managing Partner of Watts Agent, L.P., a position he has held since 1971. Watts
Agent, L.P. manages various real estate investments including residential,
commercial and industrial properties. Mr. Watts is also President of Radio
Center Dalton, Inc., a position he has held since 1985. Mr. Watts serves as a
director of The Community Group, Inc., a six bank holding company, and various
family businesses.

PHILL D. GREENBLATT, age 51, has been a Trustee since 1996. Since 1975, Mr.
Greenblatt has been President of p.d.g. Real Estate Co., Inc., a real estate
brokerage and investment firm in multifamily, retail and industrial properties
in Colorado, Arizona and Florida. Mr. Greenblatt also is a member of the Board
of Directors of Western States Mortgage Co. From 1971 through 1974, Mr.
Greenblatt was a commercial sales associate with Heller-Mark Realty. He also
served as an investment banking officer for the First National Bank of Denver
from 1968 to 1971.

HENRY HIRSCH, age 60, has been a Trustee since 1996. Mr. Hirsch is Chairman
of the Board of Engineered Concepts, Inc., ECI Management Corporation and ECI
Realty, and is President of ECI Properties, positions which he has held for over
ten years. Mr. Hirsch has been involved in the real estate business since 1968,
specializing in multifamily apartment development. He and his related entities
currently own and/or manage over 3,500 apartment units, as well as office
<PAGE>
buildings and a shopping center. The construction arm of his related entities
has completed over $250,000,000 of new construction and rehabilitation. Mr.
Hirsch is a Certified Apartment Property Supervisor with the National Apartment
Association. He has served as a director and past President of the Atlanta
Apartment Association. He has served as a Regional Vice President of the
National Apartment Association and currently is the Chairman of the Builders,
Owners, and Developers Forum of the National Apartment Association.

THOMAS B. BENDER, age 63, has been a Trustee since February 1997. Since
1991, Mr. Bender has been a partner of Financial & Investment Management Group,
Ltd., an investment counseling firm. From 1978 to 1991, Mr. Bender served as a
Vice President of Kidder Peabody & Co. Mr. Bender has a total of thirty-one
years experience in the investment securities business serving as an officer and
principal of several major investment banking firms. He is a member of the
Association for Investment Management and Research and The Financial Analysis
Society of Detroit and serves as a director of The Munder Funds, a mutual fund
group, and a director of The International Affairs Forum.

Meetings of Board of Trustees and Committees
- --------------------------------------------

During fiscal 1996, the Board of Trustees of the Trust held five meetings.
The Board of Trustees has established an Audit Committee and a Compensation
Committee. The members of the Audit Committee are Stephanie A. Reed, Martin H.
Petersen and Gilbert H. Watts, Jr. The Audit Committee reviews the financial
statements of the Trust and the scope of the annual audit, monitors the Trust's
internal financial and accounting controls and recommends to the Board of
Trustees the appointment of independent certified public accountants. The Audit
Committee held one meeting during fiscal 1996. The members of the Compensation
Committee are Thomas B. Bender, Gilbert H. Watts, Jr. and Phill D. Greenblatt.
Stephanie A. Reed was a member of the Compensation Committee until April 24,
1997. The Compensation Committee will undertake to develop and review the
Trust's executive compensation policies and recommend the compensation levels of
executive officers of the Trust to the Board of Trustees. See "Report of the
Compensation Committee of the Board of Trustees on Executive Compensation." The
Compensation Committee did not meet in fiscal 1996. The Board of Trustees does
not have a Nominating Committee.

INFORMATION REGARDING EXECUTIVE OFFICERS

Listed below are the names of the executive officers of the Trust. The
names and ages of all executive officers of the Trust and principal occupation
and business experience during at least the last five years is discussed under
"Information Regarding Trustees."

Name Position
---- --------

Peter D. Anzo President, Chief Executive Officer
and Chairman of the Board of Trustees

Stephanie A. Reed Vice President, Secretary and Treasurer

EXECUTIVE COMPENSATION

Compensation of Trustees and Officers
- -------------------------------------

Trustees who are officers of the Trust receive no compensation for their
services as Trustees. Trustees who are not officers of the Trust receive
compensation for their services as the Board of Trustees may from time to time
determine. Since the consummation of the Tender Offer, Trustees who were not
officers of the Trust did not receive an annual retainer but did receive $250
for each regular meeting of the Board of Trustees attended.

Officers of the Trust historically have not received any compensation for
their services provided to the Trust. Until February 29, 1996, the date upon
which the Purchaser acquired approximately 73.3% of the outstanding Shares of
the Trust pursuant to the Tender Offer, the Trust was an externally-advised
REIT, and accordingly, the Trust had no employees and no compensation committee.
Upon the consummation of the Tender Offer, the relationship with the Trust's
advisor was terminated and the Trust became self-administered and established a
compensation committee. As a result, the Trustees currently anticipate that
officers of the Trust may serve as employees and may be compensated as such for
services rendered to the Trust.
<PAGE>
During fiscal 1996, the officers of the Trust did not receive compensation
from the Trust for their services as officers. While a majority of their time
was spent handling Trust affairs, the officers were also officers of The Vinings
Group, Inc. ("The Vinings Group"), a privately held real estate company, from
which they received compensation and benefits. The Trust did not reimburse The
Vinings Group for any of the officers' salaries or benefits provided to them by
The Vinings Group. In the future, the annual salary, any salary adjustments and
any other benefits for executive officers will be determined by the Compensation
Committee in its discretion and will be targeted according to the salaries of
executives holding similar offices and having similar responsibilities within
the Trust's industry segment. The Compensation Committee may also consider
factors such as industry experience and executive retention.

Report of the Compensation Committee of the Board of Trustees on Executive
Compensation
- ------------

The members of the Compensation Committee of the Board of Trustees of the
Trust, whose names are set forth below, have prepared the following report on
the Trust's executive compensation policies and philosophy for fiscal 1996.

General
- -------

The Compensation Committee was formed in October 1996 and consists of Mr.
Bender, Mr. Watts and Mr. Greenblatt, each of whom is a non-employee Trustee.
Ms. Reed was a member of the Compensation Committee until April 24, 1997. The
Compensation Committee is generally responsible for developing the Trust's
executive and management compensation policies, including awards of equity-based
compensation.

Compensation Policy Review
- --------------------------

The Compensation Committee, together with the Board of Trustees, is
currently reviewing its policies with respect to executive compensation. In
connection with this review, the Compensation Committee will establish its
compensation philosophy as to (a) base salaries for executive officers, (b) an
appropriate methodology for determining the amount of annual cash bonuses, if
any, paid to executive officers, and (c) an appropriate methodology for
structuring long-term incentive awards. The Compensation Committee is
undertaking this review with the goal of ensuring that (i) the base salaries of
executive officers are comparable and competitive when measured against those
paid by other companies within the Trust's industry segment, (ii) annual cash
bonuses awarded to executive officers are based on appropriate individual and
Trust performance targets established at the beginning of each fiscal year and
(iii) long-term incentive awards to executive officers more closely align the
interests of the executive officers with those of the Trust's shareholders. The
Compensation Committee currently intends to complete its review of the Trust's
executive compensation policies in fiscal 1997.

Federal Tax Regulations Applicable to Executive Compensation
- ------------------------------------------------------------

As a result of Section 162(m) of the Internal Revenue Code (the "Code"),
the Trust's deduction of executive compensation may be limited to the extent
that a "covered employee" (i.e., the chief executive officer or one of the four
highest compensated officers who is employed on the last day of the Trust's
taxable year) receives compensation in excess of $1,000,000 in such taxable year
of the Trust (other than performance-based compensation that otherwise meets the
requirements of Section 162(m) of the Code). The Trust intends to take
appropriate action to comply with such regulations, if applicable, in the
future.

Thomas B. Bender, Chairman Gilbert H. Watts, Jr.

Phill D. Greenblatt Stephanie A. Reed
(member until April 24, 1997)

<PAGE>
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------

Mr. Anzo, the President, Chief Executive Officer and Chairman of the Board
of Trustees of the Trust, and Ms. Reed, Vice President, Secretary and Treasurer
of the Trust, will make general recommendations to and review with the
Compensation Committee the salary increases and bonus compensation of executives
and management other than themselves.

Shareholder Return Performance Graph
- ------------------------------------

Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Trust's Shares with the
cumulative total return of companies on the Standard & Poor's (S&P) 500 Stock
Index, the National Association of Real Estate Investment Trusts ("NAREIT")
Mortgage Index and the NAREIT Total Return Equity Index. The returns are based
on the market price of the Shares and assume the reinvestment of dividends. The
calculation of total cumulative return assumes a $100 investment in the Shares
on January 1, 1991. The comparisons in this table are historical and are not
intended to forecast or be indicative of possible future performance of the
Trust's Shares.

Subsequent to the consummation of the Tender Offer in February 1996 and
consistent with its growth and expansion strategy, management of the Trust has
caused the Trust to expand into the multifamily property markets, a line of
business which is covered by the NAREIT Total Return Equity Index. As a result
of the change in the line of business of the Trust, the Trustees believe that,
for periods subsequent to the Tender Offer, it is no longer appropriate to
compare the performance of the Trust's Shares to companies on the NAREIT
Mortgage Index. Accordingly, the performance of the Trust's Shares has been
compared to both the NAREIT Mortgage Index and the NAREIT Total Return Equity
Index assuming a $100 investment on January 1, 1991, despite the fact that the
Trust has only been on the NAREIT Total Return Equity Index for a portion of
fiscal 1996.
<TABLE>

Comparison of Five Year Cumulative Total Return
Among S&P 500 Index, NAREIT Mortgage Index, NAREIT
Total Return Equity Index and
Vinings Investment Properties Trust
-----------------------------------

1996 Adjusted to Reflect Share Split
<CAPTION>

1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Vinings Investment Properties Trust 100 132 162 217 230 383

S&P 500 100 141 155 157 215 265

NAREIT Mortgage Index 100 134 154 117 190 287

NAREIT Total Return Equity Index 100 155 186 192 221 299
</TABLE>

<PAGE>

PROPOSAL 2 - APPROVAL OF THE 1997 STOCK OPTION AND INCENTIVE PLAN

Proposal
- --------

The Board of Trustees has adopted the 1997 Plan for Trustees, officers,
employees and other key persons of the Trust and its subsidiaries, subject to
the approval of the 1997 Plan by the shareholders.

The 1997 Plan is administered by the Compensation Committee of the Board of
Trustees (the "Committee"). The Committee, at its discretion, may grant a
variety of stock incentive awards based on the Shares of the Trust. Awards under
the 1997 Plan include stock options (both incentive options and non-qualified
options), stock appreciation rights, restricted stock, performance shares,
unrestricted stock and dividend equivalent rights. These awards are described in
greater detail below.

If approved by the shareholders, the maximum number of Shares reserved and
available for issuance under the 1997 Plan shall be such aggregate number of
Shares as does not exceed the sum of (i) ten percent (10%) of outstanding
Shares; plus (ii) as of the last business day of each calendar quarter ending
after June 30, 1997, an additional positive number equal to ten percent (10%) of
the sum of units of partnership interests in Vinings Investment Properties, L.P.
that are subject to redemption rights ("Units") and Shares issued by the Trust
during that calendar quarter, reduced by any Shares issued by the Trust during
that calendar quarter upon the redemption of Units; provided, however, that the
maximum number of Shares for which Incentive Stock Options may be granted under
the 1997 Plan shall not exceed 108,000 Shares, reduced by the aggregate number
of Shares subject to outstanding Awards granted under the 1997 Plan.

To satisfy the performance-based compensation exception to the $1 million
cap on the Trust's tax deduction imposed by Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), the 1997 Plan also provides that
stock options or stock appreciation rights with respect to no more than 50,000
Shares may be granted to any one individual in any twelve (12) month period. The
Shares issued by the Trust under the 1997 Plan may be authorized but unissued
Shares, or Shares reacquired by the Trust. To the extent that awards under the
1997 Plan do not vest or otherwise revert to the Trust, the Shares represented
by such awards may be the subject of subsequent awards.

Recommendation
- --------------

The Board of Trustees believes that stock options and other stock-based
incentive awards can play an important role in the success of the Trust by
encouraging and enabling the Trustees, officers and other employees of the Trust
and its subsidiaries upon whose judgment, initiative and efforts the Trust
largely depends for the successful conduct of its business to acquire a
proprietary interest in the Trust. The Board of Trustees anticipates that
providing such persons with a direct stake in the Trust will assure a closer
identification of the interests of participants in the 1997 Plan with those of
the Trust, thereby stimulating their efforts on the Trust's behalf and
strengthening their desire to remain with the Trust.

The Board of Trustees believes that the proposed 1997 Plan will help the
Trust to achieve its goals by keeping the Trust's incentive compensation program
dynamic and competitive with those of other companies. Accordingly, the Board of
Trustees believes that the 1997 Plan is in the best interests of the Trust and
its shareholders and recommends that the shareholders approve the 1997 Plan.

THE BOARD OF TRUSTEES RECOMMENDS THAT THE 1997 PLAN BE APPROVED, AND
THEREFORE RECOMMENDS A VOTE "FOR" THIS PROPOSAL.

Summary of the 1997 Plan
- ------------------------

The following description of certain features of the 1997 Plan is intended
to be a summary only. The summary is qualified in its entirety by the full text
of the 1997 Plan which is attached hereto as Exhibit A.
<PAGE>
PLAN ADMINISTRATION; ELIGIBILITY. The 1997 Plan is administered by the
Committee. All members of the Committee must be "non-employee directors" as that
term is defined under the rules promulgated by the Securities and Exchange
Commission (the "SEC") and "outside directors" as that term is defined in
Section 162 of the Code and the regulations promulgated thereunder. The
Committee has full power to select, from among the employees eligible for
awards, the individuals to whom awards will be granted, to make any combination
of awards to participants, and to determine the specific terms and conditions of
each award, subject to the provisions of the 1997 Plan.

The Committee may permit Shares, and other amounts payable pursuant to an
award, to be deferred. In such instances, the Committee may permit interest,
dividend or deemed dividends to be credited to the amount of deferrals.

Persons eligible to participate in the 1997 Plan will be those employees
and other key persons, such as consultants, of the Trust and its subsidiaries
who are responsible for or contribute to the management, growth or profitability
of the Trust and its subsidiaries, as selected from time to time by the
Committee. Trustees of the Trust who are not employed by the Trust or its
subsidiaries or any affiliated company thereof ("Independent Trustees") will
also be eligible for certain awards under the 1997 Plan.

STOCK OPTIONS. The 1997 Plan permits the granting of (i) options to
purchase Shares intended to qualify as incentive stock options ("Incentive
Options") under Section 422 of the Code and (ii) options that do not so qualify
("Non-Qualified Options"). The option exercise price of each option will be
determined by the Committee but may not be less than 100% of the fair market
value of the Shares on the date of grant in the case of incentive stock options,
and may not be less than 85% of the fair market value of the Shares on the date
of grant in the case of Non-Qualified Options. However, employees participating
in the 1997 Plan may elect, with the consent of the Committee, to receive
discounted Non-Qualified Options in lieu of cash bonuses. In the case of such
grants, the option exercise price must be at least 50% of the fair market value
of the Shares on the date of grant.

The term of each option will be fixed by the Committee and may not exceed
ten years from date of grant in the case of an Incentive Option. The Committee
will determine at what time or times each option may be exercised and, subject
to the provisions of the 1997 Plan, the period of time, if any, after
retirement, death, disability or termination of employment during which options
may be exercised. Options may be made exercisable in installments, and the
exercisability of options may be accelerated by the Committee.

Upon exercise of options, the option exercise price must be paid in full
either in cash or by certified or bank check or other instrument acceptable to
the Committee or, if the Committee so permits, by delivery of Shares already
owned by the optionee. The exercise price may also be delivered to the Trust by
a broker pursuant to irrevocable instructions to the broker from the optionee.

At the discretion of the Committee, stock options granted under the 1997
Plan may include a "re-load" feature pursuant to which an optionee exercising an
option by the delivery of Shares would automatically be granted an additional
stock option (with an exercise price equal to the fair market value of the
Shares on the date the additional stock option is granted) to purchase that
number of Shares equal to the number delivered to exercise the original stock
option. The purpose of this feature is to enable participants to maintain any
equity interest in the Trust without dilution.

To qualify as Incentive Options, options must meet additional Federal tax
requirements, including limits on the value of shares subject to Incentive
Options which first become exercisable in any one calendar year, and a shorter
term and higher minimum exercise price in the case of certain large
shareholders.

STOCK OPTIONS GRANTED TO INDEPENDENT TRUSTEES. The 1997 Plan provides for
the automatic grant of Non-Qualified Options to an Independent Trustee. Each
Independent Trustee who is serving as a Trustee of the Trust on the fifth
business day after each annual meeting of shareholders, beginning with the 1997
Annual Meeting, will automatically be granted on such day a Non-Qualified Option
to acquire 1,000 Shares. The exercise price of each such Non-Qualified Option is
the fair market value of the Shares on the date of grant. Such Non-Qualified
Option shall be exercisable in full as of the first anniversary of the date of
grant. The Committee, in its discretion, may grant additional Non-Qualified
Options to Independent Trustees.

STOCK APPRECIATION RIGHT. The Committee may award a stock appreciation
right ("SAR") either as a freestanding award or in tandem with a stock option.
Upon exercise of the SAR, the holder will be entitled to receive an amount equal
to the excess of the fair market value on the date of exercise of one share of
Shares over the exercise price per share specified in the related stock option
(or, in the case of freestanding SAR, the price per share specified in such
right, which price may not be less than 100% of the fair market value of the
Shares on the date of grant) times the number of Shares with respect to which
the SAR is exercised. This amount may be paid in cash, Shares, or a combination
thereof, as determined by the Committee. If the SAR is granted in tandem with a
stock option, exercise of the SAR cancels the related option to the extent of
such exercise.

RESTRICTED STOCK. The Committee may also award Shares to officers, other
employees and key persons subject to such conditions and restrictions as the
Committee may determine ("Restricted Stock"). These conditions and restrictions
may include the achievement of certain performance goals and/or continued
employment with the Trust through a specified restricted period. The purchase
price of shares of Restricted Stock will be determined by the Committee. If the
performance goals and other restrictions are not attained, the employees will
forfeit their awards of Restricted Stock.

UNRESTRICTED STOCK. The Committee may also grant shares (at no cost or for
a purchase price determined by the Committee) which are free from any
restrictions under the 1997 Plan ("Unrestricted Stock"). Unrestricted Stock may
be issued to employees and key persons in recognition of past services or other
valid consideration, and may be issued in lieu of cash bonuses to be paid to
such employees and key persons.

Subject to the consent of the Committee, an employee or key person of the
Trust may make an advance irrevocable election to receive a portion of his
compensation in Unrestricted Stock (valued at fair market value on the date the
cash compensation would otherwise be paid).

An Independent Trustee may, pursuant to an advance irrevocable written
election, receive all or a portion of such fees in Unrestricted Stock, valued at
fair market value on the date the Trustees' fees would otherwise be paid. In
certain instances, an Independent Trustee may also elect to defer a portion of
his trustees' fees payable in the form of Unrestricted Stock, in accordance with
such rules and procedures as may from time to time be established by the Trust.
During the period of deferral, the deferred unrestricted stock would receive
dividend equivalent rights.

PERFORMANCE SHARE AWARDS. The Committee may also grant performance share
awards to employees or other key persons entitling the recipient to receive
Shares upon the achievement of individual or Trust performance goals and such
other conditions as the Committee shall determine ("Performance Share Award").

DIVIDEND EQUIVALENT RIGHTS. The Committee may grant dividend equivalent
rights, which entitle the recipient to receive credits for dividends that would
be paid if the recipient had held specified Shares. Dividend equivalent rights
may be granted as a component of another award or as a freestanding award.
Dividend equivalents credited under the 1997 Plan may be paid currently or be
deemed to be reinvested in additional Shares, which may thereafter accrue
additional dividend equivalents at fair market value at the time of deemed
reinvestment or on the terms then governing the reinvestment of dividends under
the Trust's dividend reinvestment plan, if any. Dividend equivalent rights may
be settled in cash, shares, or a combination thereof, in a single installment or
installments, as specified in the award. Awards payable in cash on a deferred
basis may provide for crediting and payment of interest equivalents.

ADJUSTMENTS FOR STOCK DIVIDENDS, MERGERS, ETC. The Committee will make
appropriate adjustments in outstanding awards to reflect stock dividends, stock
splits and similar events. In the event of a merger, liquidation, sale of the
Trust or similar event, the Committee, in its discretion, may provide for
substitution or adjustments of outstanding options and SARs, or may terminate
all unexercised options and SARs with or without payment of cash consideration.

AMENDMENTS AND TERMINATION. The Board of Trustees may at any time amend or
discontinue the 1997 Plan and the Committee may at any time amend or cancel
outstanding awards for the purpose of satisfying changes in the law or for any
other lawful purpose. However, no such action may be taken which adversely
affects any rights under outstanding awards without the holder's consent.
Further, amendments to the 1997 Plan shall be subject to approval by the Trust's
shareholders if and to the extent required by the Code to preserve the qualified
status of Incentive Options.

CHANGE OF CONTROL PROVISIONS. The 1997 Plan provides that in the event of a
"Change of Control" (as defined in the 1997 Plan) of the Trust, all stock
options and stock appreciation rights shall automatically become fully
exercisable. In addition, at any time prior to or after a Change of Control, the
Committee may accelerate awards and waive conditions and restrictions on any
awards to the extent it may determine appropriate.

<PAGE>
Effective Date of 1997 Plan
- ---------------------------

The 1997 Plan will become effective upon the affirmative vote of a majority
of the votes cast at the Annual Meeting. For purposes of the vote on the 1997
Plan, abstentions and broker non-votes will have no effect on the results of the
vote. Both abstentions and broker non-votes will, however, count towards the
presence of a quorum. Awards of Incentive Stock Options may be granted under the
1997 Plan until May 22, 2007.

New Plan Benefits
- -----------------

Approximately five officers and key persons and four Independent Trustees
are currently eligible to participate in the 1997 Plan. The table below shows
the aggregate number of Non-Qualified Options that will be granted to
Independent Trustees in 1997, assuming approval of the 1997 Plan. Each
Non-Qualified Option granted to an Independent Trustee shall be granted on the
fifth business day following the 1997 Annual Meeting and shall have an option
exercise price equal to the fair market value of the Shares on the date of
grant. The number of Shares that may be granted to executive officers and
non-executive officers is undeterminable at this time, as such grants are
subject to the discretion of the Committee.

1997 STOCK OPTION AND INCENTIVE PLAN

Number of Shares
Underlying Stock Option
-----------------------
Name and Position
- -----------------------------------------

Independent Trustee Group (4 persons) 4,000

Tax Aspects Under the U.S. Internal Revenue Code
- ------------------------------------------------

The following is a summary of the principal Federal income tax consequences
of option grants under the 1997 Plan. It does not describe all Federal tax
consequences under the 1997 Plan, nor does it describe state or local tax
consequences.

Incentive Options
- -----------------

Under the Code, an employee will not realize taxable income by reason of
the grant or the exercise of an Incentive Option. If an employee exercises an
Incentive Option and does not dispose of the Shares until the later of (a) two
years from the date the option was granted or (b) one year from the date the
Shares were transferred to the employee, the entire gain, if any, realized upon
disposition of such Shares will be taxable to the employee as long-term capital
gain, and the Trust will not be entitled to any deduction. If an employee
disposes of the Shares within such one-year or two-year period in a manner so as
to violate the holding period requirements (a "disqualifying disposition"), the
employee generally will realize ordinary income in the year of disposition, and,
provided the Trust complies with applicable withholding requirements, the Trust
will receive a corresponding deduction, in an amount equal to the excess of (1)
the lesser of (x) the amount, if any, realized on the disposition and (y) the
fair market value of the Shares on the date the option was exercised over (2)
the option price. Any additional gain realized on the disposition of the Shares
acquired upon exercise of the option will be long-term or short-term capital
gain and any loss will be long-term or short-term capital loss depending upon
the holding period for such Shares. The employee will be considered to have
disposed of his Shares if he sells, exchanges, makes a gift of or transfers
legal title to the Shares (except by pledge or by transfer on death). If the
disposition of Shares is by gift and violates the holding period requirements,
the amount of the employee's ordinary income (and the Trust's deduction) is
equal to the fair market value of the Shares on the date of exercise less the
option price. If the disposition is by sale or exchange, the employee's tax
basis will equal the amount paid for the Shares plus any ordinary income
realized as a result of the disqualifying distribution. The exercise of an
Incentive Option may subject the employee to the alternative minimum tax.
<PAGE>
Special rules apply if an employee surrenders Shares in payment of the
exercise price of his Incentive Option.

An Incentive Option that is exercised by an employee more than three months
after an employee's employment terminates will be treated as a Non-Qualified
Option for Federal income tax purposes. In the case of an employee who is
disabled, the three-month period is extended to one year and in the case of an
employee who dies, the three-month employment rule does not apply.

Non-Qualified Options
- ---------------------

There are no Federal income tax consequences to either the optionee, or the
Trust on the grant of a Non-Qualified Option. On the exercise of a Non-Qualified
Option, the optionee (except as described below) has taxable ordinary income
equal to the excess of the fair market value of the Shares received on the
exercise date over the option price of the shares. The optionee's tax basis for
the shares acquired upon exercise of a Non-Qualified Option is increased by the
amount of such taxable income. The Trust will be entitled to a Federal income
tax deduction in an amount equal to such excess, provided the Trust complies
with applicable withholding rules. Upon the sale of the Shares acquired by
exercise of a Non-Qualified Option, the optionee will realize long-term or
short-term capital gain or loss depending upon his or her holding period for
such Shares.

Special rules apply if an optionee surrenders Shares in payment of the
exercise price of a Non-Qualified Option.

Parachute Payments
- ------------------

The exercise of any portion of any option that is accelerated due to the
occurrence of a change of control may cause a portion of the payments with
respect to such accelerated options to be treated as "parachute payments" as
defined in the Code. Any such parachute payments may be non-deductible to the
Trust, in whole or in part, and may subject the recipient to a non-deductible
20% federal excise tax on all or portion of such payment (in addition to other
taxes ordinarily payable).

Limitation on Trust's Deductions
- --------------------------------

As a result of Section 162(m) of the Code, the Trust's Federal tax
deduction for certain awards under the Plan may be limited to the extent that
the Chief Executive Officer or other executive officer whose compensation is
required to be reported in the summary compensation table receives compensation
(other than performance-based compensation) in excess of $1 million a year.
<PAGE>
PRINCIPAL AND MANAGEMENT STOCKHOLDERS

The following table sets forth, to the best knowledge and belief of the
Trust, certain information regarding the beneficial ownership of the Trust's
Shares as of May 20, 1997 by (i) each person known by the Trust to be the
beneficial owner of more than 5% of the outstanding Shares, (ii) each of the
Trustees, (iii) each of the executive officers of the Trust and (iv) all of the

Shares
Trustees, Executive Officers Beneficially Percent of
and 5% Shareholders Owned (1) Class (2)
- ---------------------------- --------- ---------

Financial & Investment Management Group, Ltd...... 252,789(3) 23.39%
Paul H. Sutherland, CFP, President
417 St. Joseph Street
P.O. Box 40
Suttons Bay, MI 49682

Watts Agent, L.P.................................. 93,355(4) 8.64%
1006 Trammel Street
Dalton, GA 30720

Peter D. Anzo..................................... 87,312 8.08%
Martin H. Petersen................................ 81,285 7.52%
Stephanie A. Reed................................. 9,818 *
Gilbert H. Watts, Jr.............................. 93,355(5) 8.64%
Phill D. Greenblatt............................... 24,005 2.22%
Henry Hirsch...................................... 60,012 5.55%
Thomas B. Bender.................................. 88,389(6) 8.18%
------- ------
All Trustees and officers as a group (7 persons).. 444,176 41.11%
======= =====
- --------------------------
* Less than 1%.

(1) Beneficial share ownership is determined pursuant to Rule 13d-3 under
the Exchange Act. Accordingly, a beneficial owner of a security includes any
person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares the power to vote such
security or the power to dispose of such security. The amounts set forth above
as beneficially owned include Shares owned, if any, by spouses and relatives
living in the same home as to which beneficial ownership may be disclaimed.

(2) Percentages are calculated on the basis of 1,080,516 Shares outstanding
as of May 20, 1997.

(3) Based on Amendment No. 3 to Schedule 13D filed with the SEC on November
22, 1996, Financial & Investment Management Group, Ltd. ("FIMG") and Paul H.
Sutherland, CFP, President, have shared dispositive and voting power with
respect to all such Shares.

(4) Based on a Schedule 13D filed with the SEC on August 2, 1996, Watts
Agent, L.P. and Gilbert H. Watts, Jr. have shared dispositive and voting power
with respect to all such Shares.

(5) Mr. Watts may be deemed to beneficially own 93,355 Shares by virtue of
his position as Managing Partner of Watts Agent, L.P. Mr. Watts and Watts Agent,
L.P. have shared dispositive and voting power with respect to all such Shares.

(6) Mr. Bender beneficially owns 1,000 Shares and has shared dispositive
and voting power with respect to an additional 87,389 Shares with FIMG and Paul
H. Sutherland.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain executive officers and Trustees of the Trust are officers,
directors and/or stockholders of The Vinings Group and its wholly-owned
subsidiaries (individually, a "Subsidiary"). The Vinings Group has provided
services to the Trust relating to administration, acquisition, and capital and
asset advisory services at little or no cost to the Trust. In addition, the
officers of the Trust have been compensated by The Vinings Group for their
services as officers of The Vinings Group, although a substantial amount of
their time was spent handling Trust affairs. The Trust did not reimburse The
Vinings Group for any of the officers' salaries. The Trust does not anticipate
that these services will continue to be provided free of charge, and certain
costs paid on the Trust's behalf have been reimbursed to The Vinings Group.
<PAGE>
In connection with the Trust's acquisition of The Thicket Apartments, a
254-unit apartment complex located in Atlanta, Georgia, MFI Realty, Inc., a
Subsidiary, was paid a broker's commission in the amount of $150,000 by the
seller of the property. Also in connection with The Thicket, the Trust entered
into a management agreement with Vinings Properties, Inc., a Subsidiary, for
property management services equal to five percent of gross revenues plus a fee
for data processing.

In connection with the Trust's proposed acquisition of Windrush Apartments,
a 202-unit apartment community located in Atlanta, Georgia, MFI Realty, Inc.,
will be paid a financial advisor's fee in the amount of $75,500 from the seller
upon the closing of the acquisition.

The Trust believes that all of the above transactions are fair and
reasonable and are on terms at least as favorable to the Trust as those which
might have been obtained with unrelated third parties.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Trust's officers and Trustees and beneficial owners of more than 10% of
the Trust's Shares are required under Section 16(a) of the Exchange Act to file
reports of ownership and changes in ownership with the SEC. Copies of those
reports must also be furnished to the Trust. Based solely on a review of the
copies of reports furnished to the Trust and written representations that no
other reports were required, the Trust believes that during its 1996 fiscal
year, no person who was a Trustee, officer or greater than 10% beneficial owner
of the Trust's Shares failed to file on a timely basis any report required by
Section 16(a).

MARKET VALUE

On May 20, 1997, the closing sale price of a Share of the Trust on The
Nasdaq SmallCap Market was $4.50.

SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING

Shareholder proposals intended to be presented at the 1998 annual meeting
of shareholders of the Trust must be received by the Trust on or before March 3,
1998 in order to be considered for inclusion in the Trust's proxy statement for
such meeting. Such a proposal must also comply with the requirements as to form
and substance established by the SEC in order to be included in the proxy
statement and should be directed to: Secretary, Vinings Investment Properties
Trust, 3111 Paces Mill Road, Suite A-200, Atlanta, GA 30339.

INDEPENDENT AUDITORS AND PUBLIC ACCOUNTANTS

The Board of Trustees has selected the firm of Arthur Andersen LLP,
independent public accountants, as the auditors of the financial statements of
the Trust and its subsidiaries for its current fiscal year ending December 31,
1997. The firm of Ernst & Young LLP served as the independent public accountants
of the Trust for fiscal 1996 and through January 8, 1997, at which time their
engagement was terminated, but did not examine and/or report upon the Trust's
financial statements for the fiscal year ended December 31, 1996. On January 9,
1997, the Trust engaged Arthur Andersen LLP as its independent accountants to
examine and report upon the Trust's financial statements for the fiscal year
ending December 31, 1996. A member of Arthur Andersen LLP will be present at the
Annual Meeting and will be given the opportunity to make a statement and to
answer any questions any shareholder may have with respect to the financial
statements of the Trust for fiscal 1996.

The following disclosure appeared in the Trust's Current Report on Form 8-K
filed with the SEC on January 8, 1997:

On January 8, 1997, Vinings Investment Properties Trust (the "Registrant")
dismissed Ernst & Young LLP as independent public accountants for the
Registrant. For the fiscal year ended December 31, 1994 ("Fiscal 1994"), Kenneth
Leventhal & Company (succeeded by merger with Ernst & Young LLP) had examined
and reported upon the Registrant's financial statements and had served as the
Registrant's independent public accountants. For the fiscal year ended December
31, 1995 ("Fiscal 1995"), Ernst & Young LLP had examined and reported upon the
Registrant's financial statements and had served as the Registrant's independent
public accountants. For the fiscal year ended December 31, 1996 ("Fiscal 1996")
and through the dismissal of Ernst & Young LLP on January 8, 1997, Ernst & Young
LLP served as the Registrant's independent public accountants but did not
examine and/or report upon the Registrant's financial statements.
<PAGE>
On January 9, 1997, the Registrant engaged Arthur Andersen LLP as the
independent public accountants to examine and report upon the Registrant's
financial statements for Fiscal 1996. The change in independent public
accountants followed a decision by management and approval by the Audit
Committee and the Board of Trustees, that it was in the best interest of the
Registrant to review the relationship between the Registrant and its independent
public accounting firm with respect to services provided and fees charged. The
Audit committee solicited and received proposals from, and interviewed Ernst &
Young LLP, Deloitte & Touche LLP and Arthur Andersen LLP concerning audit and
certain tax services to be provided for Fiscal 1996 prior to making the decision
to dismiss Ernst & Young LLP and to engage Arthur Andersen LLP. During the
Registrant's two most recent fiscal years and any subsequent interim period
prior to engaging Arthur Andersen LLP, neither the Registrant nor anyone on its
behalf consulted Arthur Andersen LLP regarding any matter described in Item
304(a)(2)(i) or (ii) of Regulation S-K.

In connection with the audits of Fiscal 1994 and Fiscal 1995 and through
the dismissal of Ernst & Young LLP on January 8, 1997, there were no
disagreements with Ernst & Young LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to their satisfaction would have caused them to
make reference to the subject matter of the disagreement in connection with
their report. During the Registrant's two most recent fiscal years and through
the dismissal of Ernst & Young LLP on January 8, 1997, none of the kind of
events listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation
S-K occurred.

Neither the audit reports of Kenneth Leventhal & Company on the
consolidated financial statements of the Registrant for Fiscal 1994 nor the
audit reports of Ernst & Young LLP on the consolidated financial statements of
the Registrant for Fiscal 1995 contained any adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles.

The Registrant has provided Ernst & Young LLP with a copy of the
disclosures it is making in this Current Report on Form 8-K prior to the filing
of this report with the Securities and Exchange Commission. The Registrant has
requested and received a letter from Ernst & Young LLP addressed to the
Securities and Exchange Commission stating that it agrees with the statements
made by the Registrant herein in response to Item 304(a) of Regulation S-K and
such letter is included in this filing as an exhibit.

OTHER MATTERS

The Board of Trustees does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are duly presented, proxies will be voted in
accordance with the best judgment of the proxy holders.

Exhibit A

VININGS INVESTMENT PROPERTIES TRUST
1997 STOCK OPTION AND INCENTIVE PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
- ---------------------------------------------------

The name of the plan is the Vinings Investment Properties Trust 1997 Stock
Option and Incentive Plan (the "Plan"). The purpose of the Plan is to encourage
and enable the officers, employees, Independent Directors and other key persons
(including consultants) of Vinings Investment Properties Trust (the "Company")
and its Subsidiaries upon whose judgment, initiative and efforts the Company
largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company.

The following terms shall be defined as set forth below:

"Act" means the Securities Exchange Act of 1934, as amended.

"Administrator" is defined in Section 2(a).

"Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Unrestricted Stock
Awards, Performance Share Awards and Dividend Equivalent Rights.

"Board" means the Board of Trustees of the Company.

"Change of Control" is defined in Section 15.

"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

"Committee" means the Compensation Committee of the Board as referred to in
Section 2.

"Dividend Equivalent Right" means Awards granted pursuant to Section 10.

"Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 17.

"Fair Market Value" of the Stock on any given date means the fair market
value of the Stock determined in good faith by the Administrator; provided,
however, that (i) if the Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), the
Fair Market Value on any given date shall not be less than the average of the
highest bid and lowest asked prices of the Stock reported for such date or, if
no bid and asked prices were reported for such date, for the last day preceding
such date for which such prices were reported, or (ii) if the Stock is admitted
to trading on a national securities exchange or the NASDAQ National Market
System, the Fair Market Value on any date shall not be less than the closing
price reported for the Stock on such exchange or system for such date or, if no
sales were reported for such date, for the last date preceding the date for such
a sale was reported.

"Incentive Stock Option" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.

"Independent Director" means a member of the Board who is not also an
employee of the Company or any Subsidiary, or any affiliated company thereof.

"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.

"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.

"Performance Share Award" means Awards granted pursuant to Section 9.

"Restricted Stock Award" means Awards granted pursuant to Section 7.

"Stock" means the shares of beneficial interest, no par value, of the
Company, subject to adjustments pursuant to Section 3.

"Stock Appreciation Right" means any Award granted pursuant to Section 6.

"Subsidiary" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities beginning with the
Company if each of the corporations or entities (other than the last corporation
or entity in the unbroken chain) owns stock or other interests possessing 50% or
more of the economic interest or the total combined voting power of all classes
of stock or other interests in one of the other corporations or entities in the
chain.

"Unrestricted Stock Award" means any Award granted pursuant to Section 8.

SECTION 2.ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS
- --------------------------------------------------------------------------------

(a) Committee. The Plan shall be administered by either the Board or the
Committee (in either case, the "Administrator"). Each member of the Committee
shall be an "outside director" within the meaning of Section 162(m) of the Code
and the regulations promulgated thereunder and a "non-employee director" within
the meaning of Rule 16b- 3(b)(3)(i) promulgated under the Act, or any successor
definition under said rule.

(b) Powers of Administrator. The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:

(i) to select the individuals to whom Awards may from time to time be
granted;

(ii) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Unrestricted Stock Awards, Performance
Share Awards and Dividend Equivalent Rights, or any combination of the
foregoing, granted to any one or more participants;

(iii) to determine the number of shares of Stock to be covered by any
Award;

(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the
Plan, of any Award, which terms and conditions may differ among individual
Awards and participants, and to approve the form of written instruments
evidencing the Awards;

(v) to accelerate at any time the exercisability or vesting of all or
any portion of any Award;

(vi) subject to the provisions of Section 5(a)(iii), to extend at any
time the period in which Stock Options may be exercised;

(vii) to determine at any time whether, to what extent, and under what
circumstances distribution or the receipt of Stock and other amounts
payable with respect to an Award shall be deferred either automatically or
at the election of the participant and whether and to what extent the
Company shall pay or credit amounts constituting interest (at rates
determined by the Administrator) or dividends or deemed dividends on such
deferrals; and

(viii) at any time to adopt, alter and repeal such rules, guidelines
and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in connection
with the Plan; and to otherwise supervise the administration of the Plan.

All decisions and interpretations of the Administrator shall be binding on
all persons, including the Company and Plan participants.

SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
- ---------------------------------------------------------------

(a) STOCK ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be such aggregate number of shares
of Stock as does not exceed the sum of (i) ten percent (10%) of outstanding
shares; plus (ii) as of the last business day of each calendar quarter ending
after June 30, 1997, an additional positive number equal to ten percent (10%) of
the sum of units of partnership interests in Vinings Investment Properties, L.P.
that are subject to redemption rights ("Units") and shares of Stock issued by
the Company during that calendar quarter, reduced by any shares of Stock issued
by the Company during that calendar quarter upon the redemption of Units;
provided, however, that the maximum number of shares of Stock for which
Incentive Stock Options may be granted under the Plan shall not exceed 108,000
shares, reduced by the aggregate number of shares subject to outstanding Awards
granted under the Plan.

For purposes of this limitation, the shares of Stock underlying any Awards
which are forfeited, cancelled, reacquired by the Company, satisfied without the
issuance of Stock or otherwise terminated (other than by exercise) shall be
added back to the shares of Stock available for issuance under the Plan. Subject
to such overall limitation, shares of Stock may be issued up to such maximum
number pursuant to any type or types of Award; provided, however, that Stock
Options or Stock Appreciation Rights with respect to no more than 50,000 shares
of Stock may be granted to any one individual participant during any twelve (12)
month period. The shares available for issuance under the Plan may be authorized
but unissued shares of Stock or shares of Stock reacquired by the Company and
held in its treasury.

(b) CHANGES IN STOCK. If, as a result of any reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar change in the Company's capital stock, the outstanding
shares of Stock are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company, or additional
shares or new or different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of Stock or other
securities, the Administrator shall make an appropriate or proportionate
adjustment in (i) the maximum number of shares reserved for issuance under the
Plan, (ii) the number of Stock Options or Stock Appreciation Rights that can be
granted to any one individual participant, (iii) the number and kind of shares
or other securities subject to any then outstanding Awards under the Plan, and
(iv) the price for each share subject to any then outstanding Stock Options and
Stock Appreciation Rights under the Plan, without changing the aggregate
exercise price (i.e., the exercise price multiplied by the number of Stock
Options and Stock Appreciation Rights) as to which such Stock Options and Stock
Appreciation Rights remain exercisable. The adjustment by the Administrator
shall be final, binding and conclusive. No fractional shares of Stock shall be
issued under the Plan resulting from any such adjustment, but the Administrator
in its discretion may make a cash payment in lieu of fractional shares.

The Administrator may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Administrator that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of the participant, if it would constitute a modification, extension
or renewal of the Option within the meaning of Section 424(h) of the Code.

(c) MERGERS. Upon consummation of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which outstanding shares of
Stock are exchanged for securities, cash or other property of an unrelated
corporation or business entity or in the event of a liquidation of the Company
(in each case, a "Transaction"), the Board, or the board of directors of any
corporation assuming the obligations of the Company, may, in its discretion,
take any one or more of the following actions, as to outstanding Awards: (i)
provide that such Awards shall be assumed or equivalent awards shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice to the participants, provide that all
unexercised or unvested Awards will terminate immediately prior to the
consummation of the Transaction, and/or (iii) make or provide for a payment, in
cash or in kind, to the participants equal to the value (as determined by the
Administrator) of the consideration payable per share of Stock pursuant to the
business combination (the "Merger Price") in the case of Restricted Stock or
deferred Unrestricted Stock and in the case of Stock Options and Stock
Appreciation Rights, payment, in cash or in kind equal to the difference between
(A) the Merger Price times the number of shares of Stock subject to such
outstanding Stock Options and Stock Appreciation Rights (to the extent then
exercisable at prices not in excess of the Merger Price) and (B) the aggregate
exercise price of all such outstanding Stock Options and Stock Appreciation
Rights, in exchange for the termination of such Awards. In the event Awards will
terminate upon the consummation of the Transaction, all vested Awards, other
than Stock Options and Stock Appreciation Rights, shall be fully settled in cash
or in kind, and each participant shall be permitted, within a specified period
determined by the Administrator, to exercise all outstanding Stock Options and
Stock Appreciation Rights, including those that are not then exercisable,
subject to the consummation of the Transaction.
<PAGE>
(d) SUBSTITUTE AWARDS. The Administrator may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who become employees of the Company or a Subsidiary as the result of
a merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Administrator may direct that the
substitute awards be granted on such terms and conditions as the Administrator
considers appropriate in the circumstances.

SECTION 4. ELIGIBILITY
- ----------------------

Participants in the Plan will be such full or part-time officers and other
employees, Independent Directors and key persons (including consultants) of the
Company and its Subsidiaries who are responsible for or contribute to the
management, growth or profitability of the Company and its Subsidiaries as are
selected from time to time by the Administrator in its sole discretion.

SECTION 5. STOCK OPTIONS
- ------------------------

Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.

Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a "subsidiary corporation"
within the meaning of Section 424(f) of the Code. To the extent that any Option
does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.

No Incentive Stock Option shall be granted under the Plan after May 22,
2007.

(a) STOCK OPTIONS GRANTED TO EMPLOYEES AND KEY PERSONS. The Administrator
in its discretion may grant Stock Options to eligible employees and key persons
of the Company or any Subsidiary. Stock Options granted pursuant to this Section
5(a) shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Administrator shall deem desirable:

(i) EXERCISE PRICE. The exercise price per share for the Stock covered
by a Stock Option granted pursuant to this Section 5(a) shall be determined
by the Administrator at the time of grant but shall not be less than 100%
of the Fair Market Value on the date of grant in the case of Incentive
Stock Options, or 85% of the Fair Market Value on the date of grant, in the
case of Non-Qualified Stock Options. If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation and an Incentive Stock
Option is granted to such employee, the option price of such Incentive
Stock Option shall be not less than 110% of the Fair Market Value on the
grant date.

(ii) OPTION TERM. The term of each Stock Option shall be fixed by the
Administrator, but no Incentive Stock Option shall be exercisable more than
ten years after the date the option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of stock of
the Company or any parent or subsidiary corporation and an Incentive Stock
Option is granted to such employee, the term of such option shall be no
more than five years from the date of grant.

(iii) EXERCISABILITY; Rights of a Stockholder. Stock Options shall
become exercisable at such time or times, whether or not in installments,
as shall be determined by the Administrator at or after the grant date;
provided, however, that Stock Options granted in lieu of compensation shall
be exercisable in full as of the grant date. The Administrator may at any
time accelerate the exercisability of all or any portion of any Stock
Option. An optionee shall have the rights of a stockholder only as to
shares acquired upon the exercise of a Stock Option and not as to
unexercised Stock Options.

(iv) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company, specifying the
number of shares to be purchased. Payment of the purchase price may be made
by one or more of the following methods:

(A) In cash, by certified or bank check or other instrument
acceptable to the Administrator;

(B) In the form of shares of Stock that are not then subject to
restrictions under any Company plan and that have been beneficially
owned by the optionee for at least six months, if permitted by the
Administrator in its discretion. Such surrendered shares shall be
valued at Fair Market Value on the exercise date;

(C) By the optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable
to the Company for the purchase price; provided that in the event the
optionee chooses to pay the purchase price as so provided, the
optionee and the broker shall comply with such procedures and enter
into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment
procedure; or

(D) By the optionee delivering to the Company a promissory note
if the Board has authorized the loan of funds to the optionee for the
purpose of enabling or assisting the optionee to effect the exercise
of his Stock Option; provided that at least so much of the exercise
price as represents the par value of the Stock shall be paid other
than with a promissory note.

Payment instruments will be received subject to collection. The
delivery of certificates representing the shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt
from the optionee (or a purchaser acting in his stead in accordance with
the provisions of the Stock Option) by the Company of the full purchase
price for such shares and the fulfillment of any other requirements
contained in the Stock Option or applicable provisions of laws.

(v) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the
shares of Stock with respect to which Incentive Stock Options granted under
this Plan and any other plan of the Company or its parent and subsidiary
corporations become exercisable for the first time by an optionee during
any calendar year shall not exceed $100,000. To the extent that any Stock
Option exceeds this limit, it shall constitute a Non-Qualified Stock
Option.

(b) RELOAD OPTIONS. At the discretion of the Administrator, Options granted
under the Plan may include a "reload" feature pursuant to which an optionee
exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(iv)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with such other terms as
the Administrator may provide) to purchase that number of shares of Stock equal
to the number delivered to exercise the original Option.

(i) AUTOMATIC GRANT OF OPTIONS.

(A) Each Independent Director who is serving as Director of the
Company on the fifth business day after each annual meeting of
shareholders, beginning with the 1997 annual meeting, shall
automatically be granted on such day a Non-Qualified Stock Option to
acquire 1,000 shares of Stock.

(B) The exercise price per share for the Stock covered by a Stock
Option granted under this Section 5(c) shall be equal to the Fair
Market Value of the Stock on the date the Stock Option is granted.

(C) The Administrator, in its discretion, may grant additional
Non-Qualified Stock Options to Independent Directors. Any such grant
may vary among individual Independent Directors.

(ii) EXERCISE; TERMINATION.

(A) Except as provided in Section 15, an Option granted under
Section 5(c) shall be exercisable in full as of the first anniversary
of the grant date. An Option issued under this Section 5(c) shall not
be exercisable after the expiration of ten years from the date of
grant.

(B) Options granted under this Section 5(c) may be exercised only
by written notice to the Company specifying the number of shares to be
purchased. Payment of the full purchase price of the shares to be
purchased may be made by one or more of the methods specified in
Section 5(a)(iv). An optionee shall have the rights of a stockholder
only as to shares acquired upon the exercise of a Stock Option and not
as to unexercised Stock Options.

(d) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee. Notwithstanding the foregoing, the Administrator
may permit the optionee to transfer, without consideration for the transfer, his
Non-Qualified Stock Options to members of his immediate family, to trusts for
the benefit of such family members, or to partnerships in which such family
members are the only partners, provided that the transferee agrees in writing
with the Company to be bound by all of the terms and conditions of this Plan and
the applicable Option.

SECTION 6. STOCK APPRECIATION RIGHTS
- ------------------------------------

(a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is an
Award entitling the recipient to receive an amount in cash or shares of Stock or
a combination thereof having a value equal to the excess of the Fair Market
Value of the Stock on the date of exercise over the exercise price per Stock
Appreciation Right, which price shall not be less than 100% of the Fair Market
Value of the Stock on the date of grant (or more than the option exercise price
per share, if the Stock Appreciation Right was granted in tandem with a Stock
Option) multiplied by the number of shares of Stock with respect to which the
Stock Appreciation Right shall have been exercised, with the Administrator
having the right to determine the form of payment.

(b) GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights may be granted by the Administrator in tandem with, or independently of,
any Stock Option granted pursuant to Section 5 of the Plan. In the case of a
Stock Appreciation Right granted in tandem with a Non-Qualified Stock Option,
such Stock Appreciation Right may be granted either at or after the time of the
grant of such Option. In the case of a Stock Appreciation Right granted in
tandem with an Incentive Stock Option, such Stock Appreciation Right may be
granted only at the time of the grant of the Option.

A Stock Appreciation Right or applicable portion thereof granted in tandem
with a Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Option.

(c) TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Administrator, subject to the following:

(i) Stock Appreciation Rights granted in tandem with Options shall be
exercisable at such time or times and to the extent that the related Stock
Options shall be exercisable.

(ii) Upon exercise of a Stock Appreciation Right, the applicable
portion of any related Option shall be surrendered.

(iii) All Stock Appreciation Rights shall be exercisable during the
participant's lifetime only by the participant or the participant's legal
representative.

SECTION 7. RESTRICTED STOCK AWARDS
- ----------------------------------

(a) NATURE OF RESTRICTED STOCK AWARDS. A Restricted Stock Award is an Award
entitling the recipient to acquire, at par value or such other purchase price
determined by the Administrator, shares of Stock subject to such restrictions
and conditions as the Administrator may determine at the time of grant
("Restricted Stock"). Conditions may be based on continuing employment (or other
business relationship) and/or achievement of pre-established performance goals
and objectives.

(b) RIGHTS AS A STOCKHOLDER. Upon execution of a written instrument setting
forth the Restricted Stock Award and payment of any applicable purchase price, a
participant shall have the rights of a stockholder with respect to the voting of
the Restricted Stock, subject to such conditions contained in the written
instrument evidencing the Restricted Stock Award. Unless the Administrator shall
otherwise determine, certificates evidencing the Restricted Stock shall remain
in the possession of the Company until such Restricted Stock is vested as
provided in Section 7(d) below.

(c) RESTRICTIONS. Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the written instrument evidencing the Restricted Stock Award. If a
participant's employment (or other business relationship) with the Company and
its Subsidiaries terminates for any reason, the Company shall have the right to
repurchase Restricted Stock that has not vested at its purchase price, from the
participant or the participant's legal representative.

(d) VESTING OF RESTRICTED STOCK. The Administrator at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." Except as may otherwise be
provided by the Administrator at any time, a participant's rights in any shares
of Restricted Stock that have not vested shall automatically terminate upon the
participant's termination of employment (or other business relationship) with
the Company and its Subsidiaries and such shares shall be repurchased by the
Company.

(e) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The written instrument
evidencing the Restricted Stock Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the Restricted
Stock.

SECTION 8. UNRESTRICTED STOCK AWARDS
- ------------------------------------

(a) GRANT OR SALE OF UNRESTRICTED STOCK. The Administrator may, in its sole
discretion, grant (or sell at a purchase price determined by the Administrator)
an Unrestricted Stock Award to any participant pursuant to which such
participant may receive shares of Stock free of any restrictions ("Unrestricted
Stock") under the Plan. Unrestricted Stock Awards may be granted or sold as
described in the preceding sentence in respect of past services or other valid
consideration, or in lieu of cash compensation due to such participant.

(b) ELECTIONS TO RECEIVE UNRESTRICTED STOCK IN LIEU OF COMPENSATION. With
the consent of the Administrator, a participant may, pursuant to an advance
written election delivered to the Company no later than the date specified by
the Administrator, receive a portion of the cash compensation otherwise due to
such participant in the form of shares of Unrestricted Stock either currently or
on a deferred basis.

(c) RESTRICTIONS ON TRANSFERS. The right to receive shares of Unrestricted
Stock on a deferred basis may not be sold, assigned, transferred, pledged or
otherwise encumbered, other than by will or the laws of descent and
distribution.

SECTION 9. PERFORMANCE SHARE AWARDS
- -----------------------------------

(a) NATURE OF PERFORMANCE SHARE AWARDS. A Performance Share Award is an
Award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Administrator may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. The Administrator in its sole discretion shall determine whether and to
whom Performance Share Awards shall be made, the performance goals, the periods
during which performance is to be measured, and all other limitations and
conditions.

(b) RIGHTS AS A SHAREHOLDER. A participant receiving a Performance Share
Award shall have the rights of a shareholder only as to shares actually received
by the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a stock certificate evidencing the acquisition of shares of
Stock under a Performance Share Award only upon satisfaction of all conditions
specified in the written instrument evidencing the Performance Share Award (or
in a performance plan adopted by the Administrator).

(c) TERMINATION. Except as may otherwise be provided by the Administrator
at any time prior to termination of employment (or other business relationship),
a participant's rights in all Performance Share Awards shall automatically
terminate upon the participant's termination of employment (or business
relationship) with the Company and its Subsidiaries for any reason.

(d) ACCELERATION, WAIVER, ETC. At any time prior to the participant's
termination of employment (or other business relationship) by the Company and
its Subsidiaries, the Administrator may in its sole discretion accelerate, waive
or, subject to Section 13, amend any or all of the goals, restrictions or
conditions applicable to a Performance Share Award.
<PAGE>
SECTION 10. DIVIDEND EQUIVALENT RIGHTS
- --------------------------------------

(a) DIVIDEND EQUIVALENT RIGHTS. A Dividend Equivalent Right is an Award
entitling the recipient to receive credits based on cash dividends that would be
paid on the shares of Stock specified in the Dividend Equivalent Right (or other
award to which it relates) if such shares were held by the recipient. A Dividend
Equivalent Right may be granted hereunder to any participant as a component of
another Award or as a freestanding award. The terms and conditions of Dividend
Equivalent Rights shall be specified in the grant. Dividend equivalents credited
to the holder of a Dividend Equivalent Right may be paid currently or may be
deemed to be reinvested in additional shares of Stock, which may thereafter
accrue additional equivalents. Any such reinvestment shall be at Fair Market
Value on the date of reinvestment or such other price as may then apply under a
dividend reinvestment plan sponsored by the Company, if any. Dividend Equivalent
Rights may be settled in cash or shares of Stock or a combination thereof, in a
single installment or installments. A Dividend Equivalent Right granted as a
component of another Award may provide that such Dividend Equivalent Right shall
be settled upon exercise, settlement, or payment of, or lapse of restrictions
on, such other award, and that such Dividend Equivalent Right shall expire or be
forfeited or annulled under the same conditions as such other award. A Dividend
Equivalent Right granted as a component of another Award may also contain terms
and conditions different from such other award.

(b) INTEREST EQUIVALENTS. Any Award under this Plan that is settled in
whole or in part in cash on a deferred basis may provide in the grant for
interest equivalents to be credited with respect to such cash payment. Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.

SECTION 11. TAX WITHHOLDING
- ---------------------------

(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the date
as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
income. The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the participant.

(b) PAYMENT IN STOCK. Subject to approval by the Administrator, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.

SECTION 12. TRANSFER, LEAVE OF ABSENCE, ETC.
- --------------------------------------------

For purposes of the Plan, the following events shall not be deemed a
termination of employment:

(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or

(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.

SECTION 13. AMENDMENTS AND TERMINATION
- --------------------------------------

The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder's consent. The Administrator may provide substitute Awards at the
same or reduced exercise or purchase price or with no exercise or purchase price
in a manner not inconsistent with the terms of the Plan, but such price, if any,
must satisfy the requirements which would apply to the substitute or amended
Award if it were then initially granted under this Plan, but no such action
shall adversely affect rights under any outstanding Award without the holder's
consent. If and to the extent determined by the Administrator to be required by
the Code to ensure that Incentive Stock Options granted under the Plan are
qualified under Section 422 of the Code or to ensure that compensation earned
under Stock Options and Stock Appreciation Rights qualifies as performance-based
compensation under Section 162(m) of the Code, Plan amendments shall be subject
to approval by the Company stockholders entitled to vote at a meeting of
stockholders.

SECTION 14. STATUS OF PLAN
- --------------------------

With respect to the portion of any Award that has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Administrator may authorize the creation of trusts or other arrangements to meet
the Company's obligations to deliver Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the foregoing sentence.

SECTION 15. CHANGE OF CONTROL PROVISIONS
- ----------------------------------------

Upon the occurrence of a Change of Control as defined in this Section 15:

(a) Except as otherwise provided in the applicable Award agreement, each
outstanding Stock Option and Stock Appreciation Right shall automatically become
fully exercisable.

(b) Each outstanding Restricted Stock Award and Performance Share Award
shall be subject to such terms, if any, with respect to a Change of Control as
have been provided by the Administrator in connection with such Award.

(i) any "person," as such term is used in Sections 13(d) and 14(d) of
the Act (other than the Company, any of its Subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Company or any of its Subsidiaries), together
with all "affiliates" and "associates" (as such terms are defined in Rule
12b-2 under the Act) of such person, shall become the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities having
the right to vote in an election of the Company's Board of Directors
("Voting Securities") (in such case other than as a result of an
acquisition of securities directly from the Company); or

(ii) persons who, as of the Effective Date, constitute the Company's
Board of Directors (the "Incumbent Directors") cease for any reason,
including, without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority
of the Board, provided that any person becoming a director of the Company
subsequent to the Effective Date whose election was approved by a vote of
at least a majority of the Incumbent Directors or whose nomination for
election was approved by the Nominating Committee comprised of Incumbent
Directors shall, for purposes of this Plan, be considered an Incumbent
Director; or

(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the
stockholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate 50% or more of
the voting shares of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company or (C) any
plan or proposal for the liquidation or dissolution of the Company.
<PAGE>
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (i) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Voting Securities outstanding, increases the proportionate number of
shares of Voting Securities beneficially owned by any person to 25% or more of
the combined voting power of all then outstanding Voting Securities; provided,
however, that if any person referred to in this sentence shall thereafter become
the beneficial owner of any additional shares of Voting Securities (other than
pursuant to a stock split, stock dividend, or similar transaction or as a result
of an acquisition of securities directly from the Company), then a "Change of
Control" shall be deemed to have occurred for purposes of the foregoing clause
(i).

SECTION 16. GENERAL PROVISIONS
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(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Administrator
may require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.

No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Administrator may require the placing of
such stop-orders and restrictive legends on certificates for Stock and Awards as
it deems appropriate.

(b) DELIVERY OF STOCK CERTIFICATES. Stock certificates to participants
under this Plan shall be deemed delivered for all purposes when the Company or a
stock transfer agent of the Company shall have mailed such certificates in the
United States mail, addressed to the participant, at the participant's last
known address on file with the Company.

(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.

SECTION 17. EFFECTIVE DATE OF PLAN
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This Plan shall become effective upon approval by the holders of a majority
of the votes cast at a meeting of stockholders at which a quorum is present.
Subject to such approval by the stockholders and to the requirement that no
Stock may be issued hereunder prior to such approval, Stock Options and other
Awards may be granted hereunder on and after adoption of this Plan by the Board.

SECTION 18. GOVERNING LAW
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This Plan shall be governed by Massachusetts law except to the extent such
law is preempted by federal law.

DATE APPROVED BY BOARD OF DIRECTORS: May 22, 1997

DATE APPROVED BY STOCKHOLDERS: