SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X ] Preliminary Proxy Statement [ ] Confidential, for use of
[ ] Definitive Proxy Statement Commissiononly (as
[ ] Definitive Additional Materials permitted by
[ ] Soliciting Material Pursuant to Rule 14a-6(a)(2))
Rule 14a-11(c) or Rule 14-12
Property Resources Equity Trust
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(Name of Registrant as Specified In its Charter)
Property Resources Equity Trust
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction
applies:
Series A & B Common Stock
2) Aggregate number of securities to which transaction applies:
1,091,067
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined).
The proposed amount of the distribution to the Holders upon
dissolution of the Registrant is $2,452,600.
4) Proposed maximum aggregate value of transaction:
$2,452,600
5) Total fee paid:
$491.00
[ ] Fee paid previously with preliminary material.
[ ] 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:
PROPERTY RESOURCES EQUITY TRUST
777 MARINERS ISLAND BOULEVARD
SAN MATEO, CA 94404
(650) 312-3000
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held January 26, 1999
Dear Shareholder:
Notice is hereby given that a Special Meeting of Shareholders of Property
Resources Equity Trust (the "Company") will be held on January 26, 1999, at 3
p.m., Pacific Standard Time, at the Company's principal executive offices
located at 2000 Alameda de las Pulgas, San Mateo, California for the
following purposes:
1. To approve the dissolution, termination and liquidation of
the Company as described in the proposed Plan of
Dissolution and Liquidation ("Dissolution Plan"), a copy of
which is attached as Exhibit A to the accompanying Proxy
Statement.
2. To transact such other business as may properly come before
the meeting or any adjournments thereof.
Pursuant to the Company's Bylaws, the Board of Directors has fixed the close
of business on December 17, 1998, as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting. Only
shareholders of record at that time will be entitled to vote at the Special
Meeting or any adjournment thereof.
You are cordially invited to attend the Special Meeting in person. Even if
you plan to attend the Special Meeting, please complete, date, sign, and
return the enclosed proxy promptly in the enclosed self-addressed, stamped
envelope. If you attend and wish to withdraw your proxy, you may vote
personally.
Dated: December 18, 1998 By Order of the Board of Directors
Richard S. Barone
Secretary
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PLEASE RETURN YOUR PROXY CARD PROMPTLY
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SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING IN PERSON.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE INDICATE YOUR VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL
EXPENSE TO THE COMPANY OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY PROMPTLY.
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PROPERTY RESOURCES EQUITY TRUST
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PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS JANUARY 26, 1999
SOLICITATION, REVOCATION AND VOTING OF PROXIES
This proxy statement and the enclosed proxy are furnished in connection with
the Special Meeting of shareholders (the "Meeting") of Property Resources
Equity Trust (the "Company"). At the Meeting, the shareholders will be asked
to consider and vote upon: (1) a dissolution proposal described in the
proposed Dissolution Plan; and (2) such other business as may be brought
before the Meeting. The Directors at present know of no other formal
business to be brought before the Meeting.
Shareholders of record at the close of business on December 17, 1998, are
entitled to notice of and to vote at the Meeting. On that date, there were
1,090,052 shares of Common Stock, Series A outstanding, and 1,000 shares of
Common Stock, Series B outstanding (collectively the "Common Stock"). The
shares of Common Stock vote together as one class with each share being
entitled to one vote. A majority of the shares entitled to vote will
constitute a quorum.
HOWEVER, THE DISSOLUTION OF THE COMPANY REQUIRES APPROVAL BY THE HOLDERS OF
A MAJORITY OF THE OUTSTANDING SHARES. Accordingly, the holders of at least
545,527 shares of Common Stock must vote in favor of the Dissolution Plan in
order to approve it. The Meeting may be adjourned for the purpose of
soliciting additional proxies, or for any other purpose, and, at any
subsequent reconvening of the Meeting, all proxies will be voted in the same
manner as such proxies would have been voted at the original Meeting (except
for any proxies which have theretofore effectively been revoked or
withdrawn), notwithstanding that they may have been effectively voted on the
same or any other matter at a previous meeting.
The enclosed proxy is being solicited by the Company's Board of Directors
(the "Directors"). You may revoke your proxy at any time before it is
exercised by delivering a written notice to the Company expressly revoking
your proxy, by signing and forwarding to the Company a later-dated proxy, or
by attending the Meeting and casting your vote in person.
The cost of soliciting proxies will be borne by the Company. The Company may
request brokerage houses and other institutions to forward the solicitation
material to persons for whom they hold shares of Common Stock and to obtain
authorization for the execution of proxies. The Company will reimburse
brokerage houses and other institutions for their reasonable expenses in
forwarding the Company's proxy material. In addition to solicitations by
mail, some Directors and officers of the Company, and employees of Property
Resources, Inc., the Company's advisor (the "Advisor"), without extra
remuneration, may conduct additional solicitations by telephone, facsimile,
and personal interviews. No fees will be paid to any officers or employees
of the Company or employees of the Advisor who solicit proxies in connection
with the Meeting.
This proxy statement and the enclosed proxy are scheduled to be mailed to
shareholders commencing on or about December 18, 1998.
The proxyholders will vote all proxies received. It is the present intention
that, absent contrary instructions, the enclosed proxy will be voted: For
the dissolution, termination and liquidation of the Company; and, in the
discretion of the proxyholders, upon such other matters not now known or
determined which may properly come before the Meeting.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
SEC. Such reports, proxy statements and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the regional offices of the SEC located at 75 Park Place, New York, New
York 10007 and 500 West Madison Street, Chicago, Illinois 60661. Copies of
such material can be obtained from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, certain of the documents filed by the Company with the Commission
are available through the Commission's Electronic Data Gathering and
Retrieval System ("EDGAR") at www.sec.gov.
The Company furnishes shareholders with annual reports containing
consolidated financial statements audited by independent certified public
accountants and with quarterly reports containing unaudited, condensed
financial statements for each of the first three quarters of each fiscal
year. The Company's 1997 annual report was sent to shareholders on April 22,
1998.
No person is authorized to give any information or to make any
representations other than the information or representations contained
herein and, if given or made, such information or representations should not
be relied upon as having been authorized. This Proxy Statement does not
constitute the solicitation of a proxy in any jurisdiction where, or to any
person to whom, it is unlawful to make such a solicitation. The delivery of
this Proxy Statement shall not, under any circumstances, create any
implication that there has been no change in the affairs of the Company since
the date hereof, or the dates as of which certain information is set forth
herein.
INFORMATION INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997, Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 1998, Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1998, Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 1998, and Report on Form 8-K dated November 5, 1998, are hereby
incorporated by reference into this Proxy Statement. All documents filed by
the Company with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this Proxy Statement and prior to the
completion of the vote at the Meeting shall be deemed to be incorporated by
reference into this Proxy Statement and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Proxy Statement to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Proxy Statement.
THIS PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF ANY SUCH DOCUMENTS, OTHER
THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE THEREIN, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY
SHAREHOLDER, TO WHOM THIS PROXY STATEMENT IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST TO PROPERTY RESOURCES EQUITY TRUST, 777 MARINERS ISLAND BOULEVARD,
SAN MATEO, CA, 94404, TELEPHONE: (650) 312-5789. IN ORDER TO ASSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BEFORE JANUARY 16, 1999.
THE SPECIAL MEETING OF SHAREHOLDERS
PRINCIPAL HOLDERS
As of December 17, 1998, none of the Company's Directors and executive
officers owned any shares of the Common Stock, Series A beneficially or of
record, nor to the Company's knowledge, did any person own more than 5% of
the outstanding Common Stock, Series A. All of the Series B shares are held
by the Advisor.
PROPOSAL 1:
APPROVAL OF THE DISSOLUTION, TERMINATION AND LIQUIDATION
OF THE COMPANY
INTRODUCTION
The Company was formed in 1985 as a California corporation and subsequently
qualified for tax purposes as a real estate investment trust ("REIT").
Approximately $10,900,000 was raised through the issuance of 1,090,052 shares
of Series A Common Stock and 1,000 shares of Series B Common Stock. The
Company adopted a "finite life" or "self-liquidating" investment policy which
required that upon the sale of its investment properties, the Company
distribute to shareholders the net proceeds and liquidate and terminate as an
operating Company.
The Company purchased the Graham Court Business Park (Livermore, California)
and the Agora Office Building (Phoenix, Arizona) in 1986. In 1987, the
Company purchased the Good Guys Plaza Shopping Center (Santa Rosa,
California). The Company commenced distributions from operations in 1986.
These distributions have continued quarterly and total $4.92 per share
through September, 1998.
In 1996, the Company sold the Agora Office Building. The terms of the sale
included a $750,000 note "carryback" which was fully repaid in 1998. Net
sale proceeds of $0.74 per share were distributed to shareholders in June,
1998. In 1997, the Company sold the Graham Court Business Park. Net sale
proceeds of $1.92 per share were distributed to shareholders in June 1997.
In October 1998, the Company sold its remaining property, the Good Guys Plaza
Shopping Center in Santa Rosa, California. The gross sale price was
approximately $5,108,000. Net proceeds of approximately $2,024,000 or $1.86
per share are currently held by the Company in the form of cash or cash
equivalents pending dissolution and liquidation of the Company.
Because of the pending proposal to dissolve and liquidate, the Company does
not intend to make the next regular quarterly distribution at the end of
December, 1998. Upon the approval of the Dissolution Plan by the holders of
a majority of the outstanding shares, the Company will make an initial
liquidating distribution of $2.10 per share. The balance of the Company's
net assets will be distributed during 1999 after the Company's remaining
liabilities and the expenses associated with the Dissolution Plan have been
paid and after provision has been made for the continued indemnification of
the Directors, officers, Advisor and agents of the Company.
SHAREHOLDER ACTION PROPOSED
The Directors have unanimously adopted the Plan of Dissolution, Termination
and Liquidation (the "Dissolution Plan") for the purpose of dissolving and
liquidating the Company. In connection with the Special Meeting, the
Directors are soliciting the accompanying proxy from the shareholders of the
Company to approve a proposal to adopt the Dissolution Plan, pursuant to
which the Company, without further action by the shareholders (except as such
action may be required by law or as the Directors may deem appropriate),
would dissolve after payment of, or provision for the payment of, any legally
enforceable obligations of the Company. Any remaining assets would be
distributed to shareholders. THE APPROVAL OF THE HOLDERS OF A MAJORITY OF
THE OUTSTANDING COMMON SHARES IS REQUIRED TO ADOPT THE DISSOLUTION PLAN.
The following summary of the Dissolution Plan is qualified in its entirety by
reference to the Dissolution Plan. The text of the Dissolution Plan is
contained in EXHIBIT A attached hereto.
DESCRIPTION OF THE DISSOLUTION PLAN
The Dissolution Plan contemplates that upon its adoption by the Company's
shareholders, payment of, or provision for payment of, any legally
enforceable obligations of the Company will be made out of the Company's
assets. Thereafter, remaining assets will be distributed to the shareholders
as promptly as possible. The Dissolution Plan also authorizes the Directors
to abandon the dissolution of the Company at any time if the Directors deem
such action to be in the best interests of the shareholders.
The Dissolution Plan provides for the dissolution and liquidation of the
Company pursuant to the California Corporations Code. The effective date of
the Dissolution Plan will be the date of its approval by the required number
of shareholders. If the Dissolution Plan is approved by the shareholders,
the stock transfer books of the Company will be closed as of the close of
business on a date fixed by the Directors for the distribution. Thereafter,
no assignments or transfers of the Common Stock (except for those occurring
by will, intestate succession or operation of law) will be recorded.
OPERATIONS. Upon the Dissolution Plan becoming effective, the Company will
cease business operations. The Company's corporate existence will continue
thereafter, but solely for the purpose of providing for the satisfaction of
its obligations, adjusting and winding up its business and affairs, and
distributing its remaining assets under the Dissolution Plan. No further
approvals by the shareholders will be obtained. A liquidating distribution
from these remaining assets will be conditioned upon setting aside a
sufficient amount of money for the purpose of meeting any residual Company
obligations or liabilities which the Company has not otherwise met.
SHARE CERTIFICATES. At the time of any distribution of assets to the
shareholders, those shareholders who have share certificates will be required to
surrender them before they will receive any cash or other assets to which they
are entitled under the Dissolution Plan. This will not be necessary for those
shareholders who have elected to have their shares held for them by the
Company's transfer agent.
If a shareholder fails to surrender any certificate he has in his possession,
his share of any distribution will be retained until his certificate is
surrendered or until he furnishes an indemnity bond in the event of loss or
destruction of the certificate. No interest will be paid or accrued on the
cash or other assets payable upon surrender of share certificates. The
shareholders of the Company will be notified as promptly as possible of the
effective date of the Dissolution Plan and will be advised as to the
procedure for surrender of their certificates in exchange for any remaining
cash or other assets to which they are entitled.
PAYMENT OF LEGALLY ENFORCEABLE CLAIMS. The Company will satisfy, or provide
for the satisfaction of, all legally enforceable claims and obligations of
the Company in an orderly manner. This will include claims arising from the
residual liabilities discussed below.
CONTINUED INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company will also
reserve sufficient assets (or obtain such insurance) as shall be necessary to
provide for the continued indemnification of the Directors, officers, Advisor
and agents of the Company to the full extent provided by the by-laws, any
existing indemnification agreements between the Company and any of such
persons, and applicable law.
DISTRIBUTIONS TO SHAREHOLDERS. The Company currently holds approximately
$2.25 per share in cash and cash equivalents. The Company intends to make an
initial liquidating distribution of $2.10 per share promptly after the
approval of the Dissolution Plan by the shareholders.
However, it is difficult to determine at this time with any precision the
aggregate net proceeds that may ultimately be available for distribution to
the Company's shareholders upon liquidation or the timing of any final
distribution. That amount and the timing of such distributions will depend
upon a variety of factors, including the ultimate amounts of
liquidation-related expenses and other obligations and liabilities that must
be satisfied out of the Company's assets.
After satisfaction of all of the Company's legally enforceable obligations,
the remaining assets will be distributed to the shareholders of the Company
in accordance with their respective shareholdings. In the event that the
Company were to make distributions to its shareholders without payment or
adequate provision for payment of the Company's liabilities, the shareholders
may be held personally liable up to the amount of the distributions each
shareholder received. Of course, no shareholder is liable for any debts of
the Company beyond any amounts the individual shareholder received as a
distribution.
MAJORITY OF COMPANY SHAREHOLDERS BIND MINORITY. If the requisite number of
shareholders of the Company approve the Dissolution Plan, the Company will be
dissolved, terminated and liquidated, even though individual shareholders may
have voted against the Dissolution.
TERMINATION OF REIT STATUS. The Directors will have the authority to
terminate the Company's status as a real estate investment trust under
Sections 856-860 of the Internal Revenue Code of 1986, as amended, if they
determine that such action would be in the best interests of the
Shareholders.
FEDERAL INCOME TAX CONSEQUENCES
TAXATION OF THE COMPANY. The Company has elected to qualify as a REIT under
Sections 856-860 (the "REIT Provisions") of the Internal Revenue Code of
1986, as amended (the "Code"). Under the REIT Provisions, an entity that
qualifies as a REIT is generally not subject to federal income tax with
respect to income which it distributes to its shareholders. If the
Dissolution Plan is adopted by the shareholders, it is presently contemplated
that the Company will be liquidated in a manner that will allow the Company
to continue to meet the requirements of the REIT Provisions until the
distribution of all of its assets to the shareholders (including the possible
transfer of assets to a liquidating trust), although the Plan gives the
Directors the authority to cause the Company to discontinue its status as a
REIT at any time if they find it in the best interests of the Shareholders to
do so.
In order to maintain its status as a REIT, the Company must continue to
satisfy various technical requirements imposed by the Code, including
requirements that it derive its gross income from qualified sources, that it
hold qualifying assets, and that it make certain distributions to its
shareholders. So long as the Company qualifies for taxation as a REIT, it
generally will not be subject to federal corporate income taxes on net income
that is currently distributed to the shareholders because a REIT generally is
entitled to a dividends-paid deduction. The Code also provides that
distributions pursuant to a plan of liquidation that are made within 24
months after adoption of the plan of liquidation will, to the extent of
earnings and profits of the REIT for the taxable year, be treated as
dividends for purposes of the dividends-paid deduction. If necessary to
minimize federal income taxation of the Company and as described below, the
Directors may utilize a liquidating trust to complete the liquidation and
dissolution of the Company. However, the Company expects to complete the
Dissolution Plan and make distributions within 12 months of the adoption of
the Dissolution Plan.
TAXATION OF SHAREHOLDERS. The amount of any cash and the fair market value
of any property (including a pro rata share of the fair market value of any
assets that might be contributed to a liquidating trust) distributed to a
shareholder pursuant to the Dissolution Plan will in general be applied first
to reduce the shareholder's tax basis in such shareholder's shares.
Liquidating distributions in excess of the shareholder's tax basis will be
taxed as a capital gain if the shares are held by the shareholder as a
capital asset. If the sum of all liquidating distributions with respect to
shares held as a capital asset is less than the shareholder's tax basis
therein, the difference will constitute a capital loss. A shareholder's gain
or loss on liquidating distributions will be calculated separately with
respect to shares with different bases or holding periods.
POSSIBLE USE OF LIQUIDATING TRUST. As noted above, a dividends-paid
deduction for the Company with respect to liquidating distributions is
available for distributions within 24 months after the adoption of a plan of
liquidation. If it appears that the Company will not able to complete the
liquidation of all of its assets within the required period, the Directors
will, if they determine it to be in the best interests of the Company and the
shareholders, contribute the remaining assets of the Company to a liquidating
trust and distribute to shareholders beneficial interests in such liquidating
trust. The duration of the liquidating trust would depend upon whether the
Company is able to eliminate all of its contingent liabilities. Nevertheless,
the Company intends to complete the dissolution and make distributions,
within 12 months of the adoption of the Dissolution Plan by the shareholders.
Upon the distribution of beneficial interests in a liquidating trust, the
shareholders would be required to recognize gain to the extent the fair
market value of such interests exceeded their remaining basis in the Shares.
This could cause a shareholder to incur a tax liability upon the receipt of
the beneficial interests in the liquidating trust even though the shareholder
would have received no cash with which to pay such liability. The Directors
expect that any liquidating trust established with respect to the assets of
the Company would qualify as a grantor trust under the Code. Shareholders
holding beneficial interests in a grantor trust would be deemed to own a pro
rata portion of the assets of such trust and would be required to report on
their own federal income tax returns their pro rata portion of any income,
gain, deduction or loss realized by the trust.
THE ABOVE DISCUSSION DOES NOT ATTEMPT TO DISCUSS ALL TAX MATTERS
THAT MAY AFFECT THE COMPANY OR THE SHAREHOLDERS IN THE COURSE OF
THE LIQUIDATION, OR TO CONSIDER VARIOUS FACTS OR LIMITATIONS
APPLICABLE TO ANY PARTICULAR SHAREHOLDER. SHAREHOLDERS ARE URGED
TO CONSULT THEIR OWN TAX ADVISERS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE LIQUIDATION.
SHAREHOLDER APPROVAL REQUIRED FOR DISSOLUTION
UNDER THE CALIFORNIA CORPORATIONS CODE THE AFFIRMATIVE VOTE OF THE HOLDERS OF
A MAJORITY OF THE COMMON SHARES IS REQUIRED FOR APPROVAL OF THE DISSOLUTION
PLAN. If approved by the shareholders, it is anticipated that the
dissolution would be completed over a period of one year. The Dissolution
Plan may be abandoned or amended, either before or after shareholder approval
has been obtained, if in the opinion of the Directors, circumstances arise
that make such action advisable.
NONAPPROVAL OF THE DISSOLUTION PLAN
In the event the shareholders fail to approve the Dissolution Plan, the
Company currently intends to continue to maintain its status as a qualified
real estate investment trust and to consider an alternative course of
action. The Company's remaining assets, which consist of approximately $2.25
per share in cash and cash equivalents, would be held consistent with the
Company's status as a qualified REIT and would not be invested in real
property until an alternative course of action were approved by the
shareholders.
AMENDMENT OF THE DISSOLUTION PLAN
The Directors may amend or modify the Dissolution Plan if they determine such
action to be in the best interests of the Company or its shareholders,
without the necessity of further shareholder approval unless the Directors
determine that such amendment or modification would materially and adversely
affect shareholders' interests.
DISSENTERS' RIGHTS
No shareholders of the Company will have any rights of appraisal or similar
dissenters' rights with respect to the Dissolution Plan under the Company's
Bylaws or the General Corporation Law of the State of California, the
jurisdiction in which the Company is organized. Therefore, if the
Dissolution Plan is approved by the required vote, all shareholders must
accept their pro rata share of the net distributable proceeds.
RECOMMENDATION OF THE DIRECTORS
The Directors have unanimously approved the Dissolution Plan. The Directors
have determined that the Dissolution Plan is fair to and in the best
interests of, the shareholders and the Company and have unanimously resolved
to recommend that the shareholders approve the Dissolution Plan.
Additionally, the Company's Advisor, Property Resources, Inc., intends to
vote its 1,000 shares of Series B Common Stock in favor of the Dissolution
Plan.
OTHER MATTERS
The Directors know of no other matters to be brought before the Meeting. If
any other matters properly come before the Meeting, the proxyholders will
vote the proxies in accordance with their best judgment. In the event that
sufficient votes in favor of the proposals set forth in the Notice of Special
Meeting of Shareholders are not received by the date of the Meeting, the
proxyholders may propose one or more adjournments of the Meeting for a period
or periods of not more than 45 days in the aggregate to permit further
solicitation of proxies, even though a quorum is present. Any such
adjournment will require the affirmative vote of a majority of the votes cast
on the question in person or by proxy at the session of the meeting to be
adjourned. The proxyholders will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of the adoption of the
Dissolution Plan. The costs of any such additional solicitation and of any
adjourned session will be borne by the Company.
By Order of the Board of Directors
Richard S. Barone
Secretary
STOCKHOLDERS ARE REQUESTED TO FILL IN, DATE AND SIGN THE PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, GIVE YOUR FULL TITLE AS SUCH. WHERE STOCK IS HELD
JOINTLY, BOTH SIGNATURES ARE REQUESTED.
EXHIBIT A
PLAN OF DISSOLUTION AND LIQUIDATION
This Plan of Dissolution and Liquidation (this "Plan") is for the
purpose of effecting the dissolution and complete liquidation of Property
Resources Equity Trust (the "Company").
1. APPROVAL OF THIS PLAN. In accordance with Section 1900(a) of the
California Corporations Code, this Plan shall be submitted to the
shareholders of the Company for approval at the Special Meeting of
Shareholders to be held for that purpose. This Plan shall become effective
upon the approval of the holders of a majority of the outstanding shares (the
"Effective Date")
2. CESSATION OF BUSINESS. Following approval of this Plan, the
Company shall not engage in any further business activities, except for the
purpose of completing work in process, disposing of its assets, providing for
satisfaction of its obligations, adjusting and winding up its business and
affairs, and distributing the proceeds from the disposition of its assets in
accordance with this Plan. The Board of Directors (the "Directors") then in
office shall continue in office solely for that purpose.
3. CONTINUING EMPLOYEES. For the purpose of effecting the
liquidation of the Company's assets, the Company shall retain, subject to the
pleasure of the Directors, such employees as the Directors deem desirable to
supervise the liquidation.
4. EXPENSES OF LIQUIDATION. The Directors may provide, from the
assets of the Company, reasonable funds for payment of the expenses of the
dissolution and liquidation of the Company, including filing fees and other
expenses relating to the holding of the Special Meeting of Shareholders to
consider this Plan and other documentation required in connection with this
Plan, continuation of employees engaged in the liquidation process,
accounting and attorneys' fees and expenses, and other reasonable fees and
expenses incurred in connection with the liquidation process.
5. PAYMENT OF LEGALLY ENFORCEABLE CLAIMS. The Company shall
satisfy, or provide for the satisfaction of, all legally enforceable claims
and obligations of the Company in an orderly manner.
6. PROVISION FOR CONTINUED INDEMNIFICATION OF DIRECTORS AND
OFFICERS. The Company shall reserve sufficient assets (or obtain such
insurance) as shall be necessary to provide for continued indemnification of
the Directors, officers and agents of the Company to the full extent provided
by the articles of incorporation and bylaws of the Company, any existing
indemnification agreements between the Company and any of such persons, and
applicable law.
7. DISTRIBUTION TO SHAREHOLDERS. After satisfaction of all of the
Company's legally enforceable obligations, remaining assets will be
distributed to the shareholders of the Company in accordance with their
respective shareholdings.
8. TERMINATION OF REIT STATUS. In the course of liquidation, the
Board of Directors, acting in its discretion, shall have the authority to
terminate the Company's election to be taxed as a real estate investment
trust under Sections 856-860 of the Internal Revenue Code of 1986, as
amended, if it determines that such action would be in the best interests of
the shareholders.
9. LIQUIDATING TRUST. If the Company is unable to satisfy its
legally enforceable obligations within 12 months of the Effective Date, the
Board of Directors may cause the Company to create a liquidating trust (the
"Liquidating Trust") and to distribute beneficial interests in the
Liquidating Trust to the shareholders as part of the liquidation process.
The Liquidating Trust shall be constituted pursuant to a liquidating trust
agreement in such form as the Board of Directors may approve, it being
intended that the transfer and assignment to the Liquidating Trust pursuant
hereto and the distribution to shareholders of the beneficial interests
therein shall constitute a part of the final liquidating distribution by the
Company to the shareholders of their pro rata interests in the remaining
amount of cash and other property held by or for the account of the Company.
From and after the date of the Company's transfer of cash and property to the
Liquidating Trust, the Company shall have no interest of any character in and
to any such cash and property and all of such cash and property shall
thereafter be held by the Liquidating Trust solely for the benefit of and
ultimate distribution of the shareholders, subject to any unsatisfied debts,
liabilities and expenses.
10. AUTHORIZATION. The Board of Directors of the Company, or the
trustees of the Liquidating Trust, and such officers of the Company as the
Board of Directors may direct, are hereby authorized to interpret the
provisions of this Plan and are hereby authorized and directed to take such
further actions, to execute such agreements, conveyances, assignments,
transfers, certificates and other documents, as may in their judgment be
necessary or desirable in order to wind up expeditiously the affairs of the
Company and complete the liquidation thereof, including, without limitation,
(i) the execution of any contracts, deeds, assignments or other instruments
necessary or appropriate to sell or otherwise dispose of, any and all
property of the Company, whether real or personal, tangible or intangible,
(ii) the appointment of other persons to carry out any aspect of this Plan,
(iii) the temporary investment of funds in such medium as the Board of
Directors may deem appropriate, and (iv) the modification of this Plan as may
be necessary to implement this Plan. The death, resignation or other
disability of any director or officer of the Company shall not impair the
authority of the surviving or remaining Directors or officers of the Company
(or any persons appointed as substitutes therefor) to exercise any of the
powers provided for in this Plan. Upon such death, resignation or other
disability, the surviving or remaining Directors shall have the authority to
fill the vacancy or vacancies so created, but the failure to fill such
vacancy or vacancies shall not impair the authority of the surviving or
remaining Directors or officers to exercise any of the powers provided for in
this Plan.
11. TERMINATION OF THIS PLAN. The Board of Directors may, by vote of
the majority of the Directors then in office, terminate this Plan and revoke
the dissolution of the Company, whether or not a vote of the shareholders has
previously occurred.
Property Resources Equity Trust
777 Mariners Island Boulevard
San Mateo, CA 94404
(650) 312-3000
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ______________________, and
_________________________ as proxies, each with the power to appoint his
substitute, and hereby authorizes each of them, having authority hereby to
act alone, to represent and to vote, as designated below, all the shares of
Common Stock (Series A and Series B) of Property Resources Equity Trust (the
"Company") held of record by the undersigned at the Special Meeting of
Shareholders to be held on January 26, 1999, at 3:00 p.m. at
______________________________ or any postponement or adjournment thereof, on
the following proposals. The Directors recommend a vote for all proposals.
1. Proposal to approve the dissolution, termination and liquidation
of the Company as described in the proposed Plan of Dissolution and
Liquidation, a copy of which is attached as EXHIBIT A to the accompanying
Proxy Statement.
For / / Against / / Abstain / /
2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting and any postponements
or adjournments thereof.
For / / Against / / Abstain / /
PLEASE SIGN WHERE INDICATED ON THE REVERSE SIDE OF THIS PROXY.
THIS PROXY IS SOLICITED BY THE DIRECTORS AND MAY BE REVOKED PRIOR TO
EXERCISE. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IN THE ABSENCE OF DIRECTION, THIS
PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
DATED: ___________________________ Signature of Shareholder
Signature (if held jointly)
INSTRUCTIONS (IMPORTANT) Please sign
exactly as name appears hereon.
Executors, Administrators, Directors,
Guardians and Attorneys should give full
title. If shares are registered in more
than one name, ALL registered owners
should sign.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE
