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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [_]
Filed by a party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, For Use of the
Commission Only
(as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Decade Companies Income Properties - A Limited Partnership
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(Name of Registrant as Specified in Its Charter)
Arnold K. Leas and Wellington Management Corporation
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[_] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
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(2) Aggregate number of securities to which transaction applies:
Not Applicable
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
Not Applicable
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(4) Proposed maximum aggregate value of transaction:
Not Applicable
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(5) Total fee paid:
Not Applicable
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[_] Fee paid previously with preliminary materials.
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[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
Not Applicable
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(2) Form, Schedule or Registration Statement No.:
Not Applicable
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(3) Filing Party:
Not Applicable
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(4) Date Filed:
Not Applicable
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-----------------, 1996
Dear Limited Partner:
I have enclosed a proxy statement describing my recommendation that Decade
Companies ("Decade") be removed as a general partner of the Decade Companies
Income Properties - A Limited Partnership (the "Partnership") and replaced with
Wellington Management Corporation ("WMC"). Also enclosed is a notification form
which I recommend each limited partner vote "FOR" the removal of Decade and
"FOR" the appointment of WMC as the new general partner of the Partnership.
The following is a summary of the recommendations:
1. I believe the tender offer by the Partnership to purchase your
Interests for $402 was not in the best interests of the limited partners.
2. I believe Decade has managed the Partnership's properties
ineffectively, which resulted in a decrease in the value of your Interests.
3. I recommend that you exercise your rights as owners of the Partnership
to remove Decade for their poor performance as managers of your investment.
4. I recommend that you elect WMC as the replacement general partner for
the following reasons:
(a) I believe WMC is currently managing apartment communities more
effectively than the Partnership's properties are being managed. I believe WMC
will reduce the Partnership's operating expenses and improve net operating
income.
(b) I believe WMC has a respectable track record of continuous cash
distributions to investors in its real estate investment programs. I believe
this evidences WMC's commitment to treat investors fairly.
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, 1996
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5. Upon replacement of Decade as general partner and appointment of WMC,
WMC intends to work to improve the net operating income generated by the
Partnership's properties and resume paying limited partners quarterly
distributions. WMC also intends to prepare each property for eventual sale.
6. I cannot promise immediate liquidity. WMC will need time to assess
the situation and position the properties for sale. However, I believe that
through the eventual liquidation of the Partnership's properties, limited
partners will receive greater than $402 per Interest.
Please carefully review the information provided in the enclosed proxy
statement before executing your notification.
Best personal regards,
/s/ Arnold K. Leas
Arnold K. Leas
Encs.
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DECADE COMPANIES INCOME PROPERTIES - A LIMITED PARTNERSHIP
250 PATRICK BOULEVARD, SUITE 140
BROOKFIELD, WISCONSIN 53045-5864
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PROXY STATEMENT OF ARNOLD K. LEAS AND WELLINGTON MANAGEMENT CORPORATION
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This Proxy Statement dated ______, 1996 ("Proxy Statement") and the
enclosed notification form (the "Notification") are furnished to holders of
limited partnership interests (the "Interests") of Decade Companies Income
Properties - A Limited Partnership, a Wisconsin limited partnership (the
"Partnership"), in connection with the solicitation of Notifications by Arnold
K. Leas, a holder of 49.64 Interests, and his affiliate, Wellington Management
Corporation, a Wisconsin corporation ("WMC"), for use to remove the current
general partner of the Partnership, Decade Companies, a Wisconsin general
partnership ("Decade"), and replace it with WMC.
This Proxy Statement and the enclosed Notification are being first
sent or given to the limited partners of the Partnership (the "Limited
Partners") beginning on or about _______, 1996. Limited Partners are requested
to complete and sign the Notification and return it to Arnold K. Leas c/o
Wellington Management Corporation, 18650 West Corporate Drive, Brookfield,
Wisconsin 53045. Mr. Leas will accumulate returned signed Notifications and
immediately after Limited Partners owning more than 50% of the currently
outstanding Interests have returned to Mr. Leas signed Notifications in favor of
the removal of Decade and appointment of WMC, Mr. Leas will deliver all such
Notifications (together with certain required legal opinions) to Decade and the
Partnership effectuating the removal of Decade as the general partner of the
Partnership and the appointment of WMC as the new general partner. Accordingly,
a Limited Partner's signed Notification will become effective, if ever, when so
delivered to the Partnership. Notifications should be returned to Mr. Leas by
____________________, 1996.
The principal executive offices of the Partnership are located at 250
Patrick Boulevard, Suite 140, Brookfield, Wisconsin 53045-5864. The address and
telephone number of Arnold K. Leas and WMC are: Wellington Management
Corporation, 18650 West Corporate Drive, Brookfield, Wisconsin 53045 (414) 792-
8900.
THE PROPOSALS
In accordance with section 8.4 of the Amended and Restated Agreement
of Limited Partnership dated September 30, 1996 (the "Partnership Agreement"),
Arnold K. Leas and WMC believe it will be in the Limited Partners' best
interests to take the following actions:
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1. Remove Decade Companies as the general partner of the
Partnership.
2. Appoint Wellington Management Corporation as the new general
partner of the Partnership concurrently with the removal of
Decade Companies.
This Proxy Statement and the enclosed Notification are being furnished
to Limited Partners to seek their support in the adoption of both of the above
proposals. Adoption of Proposal 2 above is conditioned on adoption of Proposal
1.
ARNOLD K. LEAS AND WMC URGE ALL LIMITED PARTNERS TO CHECK THE BOX
MARKED "FOR" EACH PROPOSAL, DATE, SIGN AND RETURN THE ENCLOSED NOTIFICATION IN
THE ENCLOSED POSTAGE PREPAID ENVELOPE. IF YOU SIGN AND RETURN YOUR NOTIFICATION
BUT DO NOT MARK THE PROPOSALS, YOU WILL BE DETERMINED TO HAVE GIVEN THE
DIRECTION TO VOTE ALL OF THE INTERESTS OWNED BY YOU "FOR" BOTH OF THE PROPOSALS
SET FORTH ABOVE.
Each Limited Partner has the power to revoke his or her signed
Notification at any time prior to the date when Mr. Leas has collected signed
Notifications "FOR" the proposals from Limited Partners owning in excess of 50%
of the Interests. To revoke a prior returned Notification, the Limited Partner
must give notice to Mr. Leas in writing.
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IMPORTANT
PLEASE SIGN, DATE AND MAIL THE NOTIFICATION TO MR. LEAS C/O WELLINGTON
MANAGEMENT CORPORATION, 18650 WEST CORPORATE DRIVE, BROOKFIELD, WISCONSIN 53045
TODAY.
YOUR EXECUTION OF THE NOTIFICATION IS IMPORTANT NO MATTER HOW
MANY OR HOW FEW INTERESTS YOU OWN.
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BACKGROUND OF THE PROPOSALS
On October 24, 1996, the Partnership delivered to each of the Limited
Partners an Offer to Purchase Interests of Decade Companies Income Properties -
A Limited Partnership for cash consideration of $402 per Interest (the "Tender
Offer"). Pursuant to the Tender Offer, which is discussed in the Partnership's
Rule 13e-3 transaction statement on Schedule 13E-3 and Schedule 13E-4 Issuer
Tender Offer Statement, which the Partnership has filed with the Securities and
Exchange Commission ("SEC"), the Partnership has offered to purchase Interests
held by Limited Partners for a purchase price of $402 per Interest to be paid in
cash. Mr. Leas and WMC believe that the Tender Offer is not in the best
interests of the Limited Partners. Because of this and the reasons specified in
the section below entitled "Reasons for the Recommendations," Mr. Leas and WMC
believe that it is in the Limited Partners' best interests to reject the Tender
Offer and to remove Decade as the general partner of the Partnership and replace
it with WMC.
RECOMMENDATIONS
Mr. Leas and WMC recommend that the Limited Partners sign and return
the enclosed Notification to Mr. Leas to remove Decade as the general partner of
the Partnership and, concurrently therewith, appoint WMC as the new general
partner.
REASONS FOR THE RECOMMENDATIONS
Mr. Leas and WMC have recommended that the Limited Partners remove
Decade as the general partner and replace it with WMC for the following reasons:
. Decade has caused the Partnership to offer to purchase the Limited
Partners' Interests at a purchase price which Mr. Leas and WMC
believe is inadequate. The $402 purchase price offered for the
Interests is substantially less than the $576 net asset value per
Interest determined by the appraisers selected and hired by Decade
to conduct an appraisal of the Partnership. Although the Tender
Offer indicates that the $576 net asset value does not consider all
of the costs of liquidating the Partnership, completing all of the
filings required by the SEC, or the costs of the Partnership's own
Tender Offer, Mr. Leas does not believe that an approximately 30.21%
reduction from the net asset value per Interest is reasonable. In
addition, as of September 30, 1996, the Partnership has accumulated
approximately $4.2 million of unrestricted cash. If the Partnership
were to distribute this cash to the Limited Partners, each Limited
Partner would receive approximately $240 per $1,000 invested. After
this distribution, the Limited Partners would still own all of their
Interests. Instead of making this distribution, Decade has offered
to purchase the Interests and cause the Partnership to pay for the
Interests out of the Partnership's cash which could otherwise be
available for distribution to the Limited Partners.
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. Mr. Leas and WMC believe an investment in the Partnership has
failed to provide an adequate return to the Limited Partners and
Decade should be held accountable. While Decade has served as
general partner, there has been a substantial decline in the
value of an Interest. The valuation included with the Tender
Offer documents indicates that an Interest originally purchased
for $1,000 now has a net asset value of $576. The Tender Offer
documents also indicate that Limited Partners have received cash
distributions of between $554 and $704 per Interest, depending on
the date the Interest was purchased and have had certain tax
losses allocated to them with respect to the Interests. However,
Mr. Leas and WMC believe that an investment in the Partnership
has failed to provide an adequate return after taking into
account these distributions and loss allocations. Although one
of the Partnership's primary stated objectives is the
preservation of Limited Partners' capital, the current appraisal
reflects that the net asset value of each $1,000 Interest has
declined by over 42%. During that same ten-year period, other
apartment communities significantly increased in value, creating
gains for their owners rather than the loss in value experienced
by the Partnership's investors.
The value of commercial properties is directly related to net
operating income ("NOI"). Mr. Leas and WMC believe that Decade
has not done an effective job of maximizing the Partnership's
NOI. According to the Partnership's financial statements, the
Partnership's operating expenses during its last three years have
been approximately 65% of revenues where Mr. Leas and WMC believe
industry norms are between 35% and 45%. Operating expenses for
properties managed by WMC affiliates have averaged approximately
39%.
. Decade has charged substantial fees over the life of the
Partnership. The financial statements as of September 30, 1996
reflect a liability of $3,533,836 payable to affiliates which
represents accrued fees and interest due to Decade and its
affiliates. At the same time such fees were being charged, the
Partnership reduced its distributions to the Limited Partners
and, most recently, suspended distributions pending completion of
the Tender Offer.
. WMC has a proven track record, demonstrating its ability to
successfully and profitably manage real estate limited
partnerships. Accordingly, Mr. Leas and WMC believe the
Partnership and its Limited Partners would be better served
having WMC as the general partner.
Since 1990, WMC has raised approximately $35 million in 19
investment programs. The investment programs are all structured
to produce income for distribution to investors and to preserve
the investors' capital contributions. Through September 30,
1996, WMC-sponsored programs have distributed $11,393,734 to
their investors. The programs distribute cash to investors in
quarterly installments, producing cash-on-cash annual returns of
8% to 12%.
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Among the investment programs WMC has sponsored, six are real
estate investment programs. Of these programs, one is a
corporation, two are limited partnerships, two are limited
liability companies and one is a real estate investment trust. As
such, WMC is experienced regarding the administrative and tax
reporting functions a general partner is required to perform in a
real estate limited partnership. In keeping with the programs'
objectives, WMC has distributed a total of $3,866,046 to
investors in the six WMC-sponsored real estate programs.
Investors in these programs have received annual returns of 8% or
greater every year since 1990.
During April 1996, the interests in Wellington Properties Trust,
WMC's affiliated real estate investment trust, began publicly
trading on The Nasdaq Stock Market under the ticker symbol
"WLPT." The trust exclusively owns apartment communities, with
two properties located in Madison, Wisconsin (the location of the
Partnership's "Meadows" property). As the manager of a publicly-
traded real estate investment trust, Mr. Leas and WMC believe WMC
is qualified to administer and manage a public partnership such
as the Partnership.
. As the new general partner of the Partnership, WMC would hire WMC
Realty, Inc. ("Realty") as the manager of the Partnership's
property and would pay Realty a management fee of 5% of the
Partnership's gross receipts rather than the approximately 8%
which the Partnership's financial statements reflect has been
charged to the Partnership over the past three years.
DESCRIPTION OF WELLINGTON MANAGEMENT CORPORATION
WMC, which was formed on July 8, 1988, is a diversified financial
services firm, principally engaged in the organization, distribution and
management of investment programs and in providing financial planning and other
financial investment services and products. WMC presently manages approximately
$42 million of investment real estate and $26 million of aerial lift equipment
and has offices located in Brookfield and Madison, Wisconsin, and Oak Brook,
Illinois.
WMC has grown from two employees at its inception to its present staff
of 125 managerial, sales and administrative personnel. One of its affiliates,
Wellington Investment Services Corporation, is the fourth largest broker/dealer
in the Milwaukee area.
WMC's key staff members in the real estate area are Arnold K. Leas,
Gregory S. Leas, Robert F. Rice, Grant T. Nakama, Joe Griese and Dale Pinkalla.
Arnold K. Leas (age 62) has been the President and a director of WMC
since 1988. Mr. Leas is a 1958 graduate of Spencerian College with a B.B.A.
degree. Since 1969, Mr. Leas has been involved in various aspects of the real
estate industry, including acting as Sales Director of Wauwatosa Realty and
President of Wellington Realty Company. In addition, Mr. Leas holds the real
estate designation of graduate of the Realtor Institute (GRI). Mr. Leas has been
involved, directly and indirectly,
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in real estate acquisitions and sales totalling in excess of $150 million. From
1984 to 1988, Mr. Leas was Executive Vice President of one of Decade's
affiliates which was involved primarily in the syndication of entities,
including the Partnership, owning multi-family apartment complexes.
Gregory S. Leas (age 35) has served as WMC's Vice President since 1990
and actively participates in the management of the operational WMC-sponsored
partnerships. Mr. Leas graduated from Marquette High School in 1979 and from
the University of Wisconsin-Madison in 1983. Mr. Leas received his J.D. degree
in 1990 from Brooklyn Law School. From 1986 to 1990, Mr. Leas was employed in
the litigation department of the New York City law firm of Fried, Frank, Harris,
Shriver & Jacobson.
Robert F. Rice (age 45), attorney, joined WMC in 1993 as its Vice
President and General Counsel. He provides legal and other advice to WMC, its
affiliates and the operational WMC partnerships. Mr. Rice is also responsible
for all real estate activities of WMC. Mr. Rice received a B.S. degree from the
University of Wisconsin-Milwaukee in 1973 and a J.D. degree from Marquette
University Law School in 1976. Mr. Rice is a member of the Wisconsin Bar
Association and has a broad range of experience in both the private practice of
law and as in-house counsel. From 1984 until 1989, he served as a member of the
Board of Directors, officer and in-house counsel for various affiliates of a
Milwaukee-based financial institution. The affiliates included a real estate
development company, a real estate syndication firm and a property management
company. In 1989, Mr. Rice formed Resource Alternatives, Inc., which provided
legal and consulting services to the real estate industry and served as an RTC
contractor.
Grant T. Nakama (age 52) is the Chief Financial Officer for WMC, its
affiliates and the 12 operational WMC-sponsored partnerships. Mr. Nakama is a
1970 graduate of California State University of Los Angeles and received his CPA
designation in 1981. Mr. Nakama has had a broad range of financial experience
in private and public accounting. From 1986 to 1991, he was employed as
Controller of Nassco, Inc., a New Berlin, Wisconsin, supplier of equipment.
Joe Griese (age 40) joined WMC in 1996 as its Vice President of
Acquisitions. Mr. Griese is responsible for identifying, originating,
analyzing, negotiating and closing real estate equity investments. He is a
senior real estate development and investment manager with 19 years of
experience with companies which owned, developed and managed over 25,000
residential units and 3 million square feet of commercial real estate with an
aggregate value in excess of $3 billion. From 1984 to 1985, he worked for
Citibank in Chicago where his responsibilities included restructuring and
completing numerous development projects and investments throughout the nation.
From 1980 to 1984, he worked for Balcor/American Express in acquisitions,
project management and asset management. Mr. Griese holds an MBA from DePaul
University and a B.S. Agricultural Engineering-Construction Administration from
the University of Wisconsin-Madison.
Dale Pinkalla (age 39) joined WMC as Director of Real Estate in 1993.
Mr. Pinkalla actively participates in all aspects of property management with
respect to investment real estate owned by WMC affiliates and partnerships. He
received a B.A. in finance from the University of Wisconsin-Madison in 1980.
Mr. Pinkalla has a broad base of experience in real estate and business. In
1981 and
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1982, he worked as a broker/salesperson for Louis Gral Investment Real Estate.
From 1983 to 1989, he worked as a Mortgage Banking Officer/Vice President for
Wells Fargo Bank, Realty Finance. In 1989, Mr. Pinkalla joined Blueport
Development Corporation and was a partner/project manager of a $25 million
neighborhood shopping center. Upon completion of that project in 1992, he
rejoined Wells Fargo Bank as an account officer for the Real Estate Group.
PROCEDURE TO REMOVE DECADE AND APPOINT WMC
The procedure for removing the general partner of the Partnership is
set forth in section 8.4 of the Partnership Agreement. Section 8.4 provides that
"a majority in Interest of the Limited Partners may remove a General Partner by
notification to the effect that such General Partner is removed." Section 8.4
also provides that "concurrently with serving such notification . . . a majority
in Interest of the Limited Partners may designate a new General Partner (if
after such removal there is no general partner)."
According to the Partnership's Tender Offer documents, as of October
1, 1996, the Partnership had 17,466.31 Interests outstanding held by 1,936
Limited Partners. Accordingly, as of such date, Notifications in favor of the
removal of Decade and appointment of WMC must be signed by Limited Partners who
collectively own at least 8,733.16 Interests. However, if the Partnership
purchases any Interests pursuant to its Tender Offer, the number of Interests
which must vote in favor of these proposals will be reduced by 50% of the
Interests so purchased.
The power of the Limited Partners to remove Decade by notification is
conditioned under section 8.4 of the Partnership Agreement upon meeting the
following two prerequisites:
1. There must be either (a) a declaratory judgment in a court action
on behalf of the Limited Partners or (b) an opinion of counsel for the Limited
Partners; to the effect that the exercise of the removal right will not result
in the loss of the Limited Partners' limited liability; and
2. Either (a) an Internal Revenue Service Private Letter Ruling or
(b) an opinion of counsel for the Limited Partners; to the effect that the
exercise of their removal right will not cause the Partnership to lose its tax
status as a partnership for federal income tax purposes.
Mr. Leas and WMC intend to seek legal opinions on behalf of the
Limited Partners to satisfy these requirements. Mr. Leas and WMC have
preliminarily discussed these opinions with counsel and believe that, with some
basic analysis and review, counsel will be able to provide the necessary legal
opinions. A Limited Partner who returns a signed Notification "FOR" the
proposals is also authorizing Mr. Leas and an officer of WMC to obtain and
accept on behalf of the Limited Partners the legal opinions required by 1 and 2
above.
Based on the above-discussed provisions of the Partnership Agreement,
Mr. Leas and WMC believe that Decade will be removed as the general partner of
the Partnership and replaced with WMC upon the delivery to the Partnership of
(a) Notifications "FOR" the proposals signed by Limited Partners owning greater
than 50% of the outstanding Interests and (b) the above-reference legal
opinions.
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RAMIFICATIONS OF THE REMOVAL OF
DECADE AND APPOINTMENT OF WMC
Upon the removal of any general partner, section 8.5.A of the
Partnership Agreement provides that the remaining general partner (which
presumably would include WMC as the new general partner) is required to accept
an assignment of the removed general partner's interest in profits and losses.
Under the Partnership Agreement, this assignment is automatic with no further
documentation required.
Section 8.5.B of the Partnership Agreement requires that the removed
general partner be paid the appraised value of the general partner's interest in
"distributions of Sale Proceeds." This payment is to be made by a promissory
note bearing interest at 2% above the prime rate and payable in not less than
five years in equal annual installments. "Sale Proceeds" are defined in section
3.50 of the Partnership Agreement to mean "all cash funds resulting from a sale
or refinancing of Partnership Property, plus established Reserves, less: (a)
expenses incurred in the transaction; (b) debts and obligations related to the
transaction; and (c) other payments for Partnership expenses (not including fees
deferred by the General Partner and Affiliates), costs of improvements or
additions to Properties and amounts as may be required to purchase underlying
land or joint venture interests or Reserves established by the General Partner."
The general partner's interest in Sale Proceeds is determined by
section 6.1 of the Partnership Agreement. This section provides, in part, that
net Sale Proceeds are to be distributed first to Limited Partners until their
capital investments are reduced to zero; second to Limited Partners in an amount
necessary to provide them with their Priority Return (as defined in the
Partnership Agreement) after taking into account prior distributions of net Sale
Proceeds in excess of the Limited Partners' original capital contributions; and
third to the general partner in an amount equal to the greater of (a) the excess
of its initial capital contribution over the sum of all prior distributions of
net Sale Proceeds to the general partner or (b) 1% of the net Sale Proceeds. The
appraised value is to be determined by an appraisal conducted by an appraiser
selected by mutual agreement of the general partner and the Partnership;
provided, however, that if the parties cannot agree upon an appraiser within 30
days, American Appraisal Company must be used. Based on the valuations discussed
in the Tender Offer documents, Mr. Leas and WMC believe the general partner's
interest in distributions of Sale Proceeds would likely be a nominal amount.
The removal of Decade may necessitate payments of accrued fees and
interest to Decade. The Partnership's balance sheet dated September 30, 1996,
reflects a liability of $3,533,836 payable to affiliates which represents
accrued fees and interest due to Decade. The Partnership may be requested to pay
Decade this amount at or shortly after Decade's removal. The September 30, 1996
balance sheet also reflects cash of $4,197,207. Accordingly, Mr. Leas and WMC
believe the Partnership could make this payment without materially adversely
affecting the Partnership.
There may be other ramifications that result from the removal of the
general partner that are not described in the Partnership Agreement and have not
otherwise been made generally known to the Limited Partners. Mr. Leas has
requested in writing that Decade provide information regarding any instrument,
agreement, undertaking, relationship or other circumstances that will be
breached, accelerated or otherwise cause the Partnership or its rights
thereunder to be adversely affected upon the removal of the general partner and
the appointment of WMC as the new general partner.
PROPOSED PROPERTY MANAGEMENT AGREEMENT
If Decade is removed as the general partner of the Partnership and WMC
is appointed as the new general partner, WMC will cause the Partnership to
terminate its existing Management
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Consulting Agreement and Property Management Agreement. According to section
7.2.A.(vii) of the Partnership Agreement, such agreements must be terminable by
the Partnership without penalty upon 60 days' written notice. Accordingly, Mr.
Leas and WMC believe that these existing agreements to which the Partnership is
a party may be terminated by the Partnership with not less than 60 days' prior
written notice. After such termination, WMC will cause the Partnership to enter
into a property management agreement with WMC Realty, Inc., WMC's wholly owned
subsidiary. Pursuant to this property management agreement, Realty will be
responsible for managing the Partnership's properties. For its services as the
manager of the Partnership's properties, the agreement will provide that the
Partnership will pay Realty 5% of the Partnership's gross receipts. In addition,
the property management agreement will require the Partnership to reimburse
Realty for all out-of-pocket costs incurred by Realty in the performance of its
services under the agreement and will contain other standard terms and
conditions.
SOLICITATION OF NOTIFICATIONS
Notifications will be solicited by mail, telephone, telefax and in
person. Solicitation will be conducted by Arnold K. Leas and by employees of WMC
who will not be paid any additional compensation for their solicitation
services.
FEES AND EXPENSES OF THE SOLICITATION
Fees and expenses of the solicitation will be borne by WMC. Because
Mr. Leas and WMC believe that the removal of Decade as the general partner of
the Partnership and the appointment of WMC as the new general partner is in the
Limited Partners' best interests, Mr. Leas and WMC hereby request that Limited
Partners share in the fees and expenses of this solicitation and the
consummation of the proposals. Any Limited Partner who is willing to make a
contribution towards the fees and expenses of the solicitation and the
consummation of the proposals is requested to mail their contribution to Arnold
K. Leas, c/o Wellington Management Corporation, 1865 West Corporate Drive,
Brookfield, Wisconsin 53045. Mr. Leas and WMC suggest that each Limited Partner
contribute $10 per Interest owned but Limited Partners may contribute any amount
they desire. Mr. Leas and WMC will accumulate all amounts contributed by Limited
Partners in a separate bank account and will only utilize such funds to pay the
fees and expenses associated with the solicitation and the actions necessary to
cause the removal of Decade as the general partner of the Partnership and the
appointment of WMC as the new general partner. These fees and expenses will
include administrative expenses and attorneys' fees related to the solicitation
and consummation of the proposals. If Mr. Leas and WMC are successful in
consummating the transactions contemplated by the proposals, WMC intends to
cause the Partnership to reimburse WMC and the other contributing Limited
Partners for all amounts which they contributed to the fees and expenses
associated with the solicitation and the actions necessary to cause the removal
of Decade as the general partner of the Partnership and the appointment of WMC
as the new general partner. At present, Mr. Leas and WMC believe that the total
fees and expenses in this matter will be approximately $60,000. Any amounts
contributed by Limited Partners which are not fully utilized for such fees and
expenses will be returned to the contributing Limited Partners pro rata based on
the amount of each such contributing Limited Partner's contribution.
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VOTING INFORMATION
According to the Partnership's Tender Offer documents, there are
17,466.31 Interests outstanding. According to the Partnership Agreement, each
Interest is entitled to one vote for the proposals set forth in this Proxy
Statement. Mr. Leas and WMC will rely on the Partnership's records for purposes
of determining the Limited Partners and number of Interests owned by each
Limited Partner.
Decade will be removed and WMC will be appointed as the new general
partner of the Partnership if (a) Limited Partners owning greater than 50% of
the outstanding Interests sign the enclosed Notification voting "FOR" the
proposals; (b) Arnold K. Leas and/or an officer of WMC receives the required
legal opinions on behalf of the Limited Partners; and (c) such Notifications and
the legal opinions are delivered to the Partnership. Accordingly, any Limited
Partner who does not sign and return the Notification voting "FOR" the proposals
set forth in this Proxy Statement will, in effect, have voted against the
proposals.
CERTAIN INFORMATION ABOUT ARNOLD K. LEAS
Arnold K. Leas, who owns 49.64 Interests in the Partnership, is also
an officer, director and approximately 40% shareholder of WMC and is an officer
and director of Realty, WMC's wholly-owned subsidiary. Accordingly, Mr. Leas may
benefit, other than simply as a Limited Partner of the Partnership, if Decade is
removed and replaced with WMC. In addition, if this solicitation is successful,
WMC and its subsidiary, Realty, may receive compensation from the Partnership
for property management and other services thereafter rendered to the
Partnership.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT OF THE PARTNERSHIP
According to the Partnership's Form 10-K for the year ended December
31, 1995, no person owns of record or is known by the Partnership to own
beneficially more than 5% of the outstanding Interests. According to such Form
10-K, Decade and its partners as a group owned 193.04 Interests as of December
31, 1995, representing 1.105% of the Interests outstanding. In addition, the
Form 10-K indicates that as of December 31, 1995, relatives and affiliates of
Decade owned an additional 35.69 Interests.
OTHER INFORMATION
The information concerning the Tender Offer has been taken from, or
based upon, publicly available documents filed by the Partnership with the SEC.
Neither Mr. Leas nor WMC takes any responsibility for the accuracy or
completeness of such information or for any failure by the Partnership to
disclose events that may have occurred and may affect the significance or
accuracy of any such information.
ARNOLD K. LEAS
Brookfield, Wisconsin
Dated: __________, 1996
10
<PAGE>
NOTIFICATION
THIS NOTIFICATION IS BEING SOLICITED BY ARNOLD K. LEAS, A LIMITED
PARTNER OF DECADE COMPANIES INCOME PROPERTIES - A LIMITED PARTNERSHIP
(THE "PARTNERSHIP"), AND BY MR. LEAS' AFFILIATE, WELLINGTON MANAGEMENT
CORPORATION ("WMC").
The undersigned, who is a limited partner of the Partnership
owning limited partnership interests (the "Interests"), hereby votes all
of the undersigned's Interests as set forth below and, if the undersigned
votes "FOR" the proposals below, the undersigned also appoints Arnold K.
Leas and Robert F. Rice, an officer of WMC, or either of them, with full
power of substitution and resubstitution, as the undersigned's agent and
power of attorney, to (a) elect to accept and to receive such legal
opinions as may be necessary to validate the removal power exercised in
this Notification; (b) deliver this Notification and the legal opinions
to the Partnership and Decade Companies; and (c) take all other necessary
or appropriate actions on behalf of the undersigned to effectuate such
proposals under the Partnership Agreement of the Partnership:
PROPOSALS
[CHECK THE APPROPRIATE LINES TO INDICATE YOUR VOTE]
<TABLE>
<CAPTION>
<S> <C>
______ FOR The removal of Decade
______ AGAINST Companies as the general
______ ABSTAIN partner of the Partnership.
______ FOR The appointment of Wellington
______ AGAINST Management Corporation as the
______ ABSTAIN new general partner of the
Partnership.
</TABLE>
THIS NOTIFICATION WILL BE VOTED AS INDICATED ABOVE. IF THIS
NOTIFICATION IS SIGNED AND RETURNED BUT THE VOTE FOR THE PROPOSALS IS NOT
INDICATED, THE UNDERSIGNED WILL BE DEEMED TO HAVE GIVEN THE DIRECTION TO
VOTE ALL OF THE INTERESTS OWNED BY THE UNDERSIGNED "FOR" BOTH PROPOSALS
AND TO DELIVER THIS NOTIFICATION TO EFFECT BOTH PROPOSALS.
[Name of Owner and Number of Interests Owned*]
__________________________________ __________________________________
Signature Date
PLEASE COMPLETE ALL FOUR BLANKS ABOVE
*Based on most recently available information.
