<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
<TABLE>
<S> <C>
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 Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.11(c) or Section
240.14a-12
BANYAN STRATEGIC REALTY TRUST
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<CAPTION>
/X/ No fee required.
<S> <C> <C>
/ / 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:
Shares of Beneficial Interest
Shares of Beneficial Interest
----------------------------------------------------------
2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
----------------------------------------------------------
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.
/ / 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:
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</TABLE>
<PAGE>
BANYAN STRATEGIC REALTY TRUST
[LOGO]
November 11, 2000
Dear Shareholder:
You are cordially invited to attend Banyan Strategic Realty Trust's annual
meeting of Shareholders.
We will hold the meeting on December 14, 2000 at 10:00 a.m. at 150 South Wacker
Drive, Conference Center, Suite 1060, Chicago, Illinois 60606. The enclosed
packet includes the Notice of Annual Meeting, Proxy Statement and Proxy. The
Proxy Statement describes the business that we will conduct at the meeting and
provides information about the Trust.
Your vote is important. Whether you plan to attend the meeting or not, please
complete, date, sign and return the enclosed proxy card promptly. If you attend
the meeting and prefer to vote in person, you may do so.
We look forward to seeing you at the meeting.
Sincerely,
/s/ L.G. Schafran
L.G. Schafran
Interim President and Chief Executive Officer
<PAGE>
BANYAN STRATEGIC REALTY TRUST
150 S. Wacker Drive
Suite 2900
Chicago, Illinois 60606
(312) 683-3671
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
<TABLE>
<S> <C> <C> <C>
Date: December 14, 2000
Time: 10:00 a.m. CST
Place: 150 South Wacker Drive
Conference Center
Suite 1060
Chicago, Illinois 60606
</TABLE>
Dear Shareholders:
At our annual meeting, we will ask you to:
- elect four trustees;
- ratify the selection of Ernst & Young LLP as our independent accountant
for 2000; and
- transact any other business that may properly be presented at the annual
meeting.
If you were a shareholder of record at the close of business on
November 10, 2000, you may vote in person at the annual meeting or submit the
enclosed proxy card.
By order of the Board of Trustees,
/s/ Robert G. Higgins
Robert G. Higgins
Vice President, General Counsel and
Secretary
November 11, 2000
<PAGE>
INFORMATION ABOUT THE ANNUAL MEETING
INFORMATION ABOUT ATTENDING THE ANNUAL MEETING
Our annual meeting will be held on December 14, 2000 at 10:00 a.m. at 150
South Wacker Drive, Conference Center, Suite 1060, Chicago, Illinois 60606. If
you would like to attend, please contact us at (312) 683-3671 to make
arrangements.
INFORMATION ABOUT THIS PROXY STATEMENT
We sent you this proxy statement and the enclosed proxy card because our
board of trustees is soliciting your proxy to vote your shares at the meeting.
If you own shares of beneficial interest in Banyan in more than one account,
such as individually and also jointly with your spouse, you may receive more
than one set of these materials. Please make sure to vote all of your shares.
This proxy statement summarizes information we are required to provide to you
under the rules of the Securities and Exchange Commission which are designed to
assist you in voting your shares. On November 13, 2000, we began mailing the
proxy materials to all shareholders of record at the close of business on
November 10, 2000.
INFORMATION ABOUT VOTING
You may vote your shares at the annual meeting only if you are a shareholder
of record at the close of business on November 10, 2000. Each share is entitled
to one vote. As of November 10, 2000, there were 14,245,649 shares outstanding.
You may grant us proxy to vote on the proposals presented at the annual
meeting in one of three ways:
- BY PROXY CARD: You can vote your shares by signing, dating and returning
the enclosed proxy card. If you do this, the individuals named on the card
will vote your shares in the manner you indicate. You may specify on your
proxy card how you would like your shares voted. If you do not indicate
instructions on the card, your shares will be voted FOR the election of
the individuals nominated for trustee and FOR the selection of Ernst &
Young LLP as our principal independent public accountant for 2000;
- BY TELEPHONE: You can vote your shares by granting us your proxy by
telephone. To do so, please call the toll free number 1-877-PRX-VOTE
(1-877-779-8683) and follow the recorded instructions; or
- ELECTRONICALLY: You can vote your shares by granting us your proxy over
the Internet. To do so, go to the Website www.eproxyvote.com/bsrts and
follow the instructions provided on our Website.
Additionally, you may come to the annual meeting and cast your vote in
person. If you grant us a proxy, you may nevertheless revoke your proxy at any
time before it is exercised by: (1) sending written notice to our secretary,
Robert G. Higgins; (2) providing us with a later-dated proxy, electronically, by
telephone or by mail; or (3) attending the annual meeting in person and voting
your shares. Merely attending the annual meeting, without further action, will
not revoke your proxy. Your proxy designation by telephone or Internet
authorizes the named proxies to vote your shares in the same manner as if you
marked, signed, dated and returned the proxy card. If you choose to vote your
shares by telephone or Internet, there is no need for you to mail back your
proxy card.
INFORMATION REGARDING TABULATION OF THE VOTE
Representatives of Equiserve will tabulate votes and act as inspectors of
election at the meeting.
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QUORUM REQUIREMENT
Shareholders owning a majority of our shares must be present in person or by
proxy in order for action to be taken at the meeting. For these purposes,
"abstentions" and "broker non-votes" will be counted as present for determining
whether a majority is present. A broker non-vote occurs when shares registered
in the name of a broker are not voted because the broker does not have the
authority to do so.
INFORMATION ABOUT VOTES NECESSARY FOR ACTION TO BE TAKEN
The four individuals receiving the greatest number of votes will be elected
to serve as trustees; provided that a majority of these individuals must be
independent. A person is considered to be "independent" if he or she is not an
officer or employee of ours or does not have a relationship which, in our
board's opinion, would interfere with the exercise of independent judgment in
carrying out the responsibilities of a trustee. Ratification of Ernst & Young
LLP as our independent accountant requires a "yes" vote from a majority of the
votes actually cast on the matter.
COSTS OF PROXIES
We will pay all the costs of soliciting proxies and holding the annual
meeting. We have retained ChaseMellon Shareholder Services, L.L.C. to assist in
the solicitation of proxies. We anticipate that the fee for these services will
not exceed $6,500 plus reasonable out-of-pocket costs and expenses authorized by
us.
OTHER MATTERS
We are not aware of any other matter which will be presented at the annual
meeting. Generally, no business, aside from the items discussed in this proxy
statement, may be transacted at the meeting. However, if any other matter
properly comes before the annual meeting as determined by the chairman of the
meeting, your proxies are authorized to act on the proposal at their discretion.
AVAILABLE INFORMATION
We file reports, proxy materials and other information with the Securities
and Exchange Commission ("SEC"). These reports, proxy materials and other
information can be inspected and copied at the Public Reference Section
maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; The Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and at Seven World Trade Center, Suite 1300,
New York, New York 10048. Copies can be obtained by mail from the SEC at
prescribed rates from the Public Reference Section of the SEC at its principal
office in Washington, D.C. The SEC also maintains a site on the World Wide Web
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
Shares of beneficial interest are included for quotation on Nasdaq.
PROPOSAL NUMBER ONE: ELECT FOUR TRUSTEES
BACKGROUND
We have decided to reduce the size of our board from five trustees to four.
Our board has accepted the recommendation of our nominating committee and
nominated Walter E. Auch, Sr., Daniel Levinson, Stephen M. Peck and L.G.
Schafran to serve as trustees for the upcoming year or until their respective
successors are elected and begin to serve. Further, the board has concluded that
Messrs. Auch, Levinson and Peck have been nominated to serve as independent
trustees.
We know of no reason why any nominee will be unable to serve as a trustee.
If any nominee is unable to serve, your proxy may vote for another nominee
proposed by the board, or the board may reduce the number of trustees to be
elected. If any trustee resigns, dies or is otherwise unable to serve
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out his term, or if the board increases the number of trustees, the board may
fill the vacancy until the next annual meeting. You do not have the right to
cumulate your votes in electing trustees.
The nominees for election to the board are:
WALTER E. AUCH, SR. Mr. Auch, age 79, has served as an independent trustee
since 1986. Mr. Auch served as the chairman and chief executive officer of the
Chicago Board of Options Exchange from 1979 to 1986. Prior to that time,
Mr. Auch was executive vice president, director and a member of the executive
committee of PaineWebber. Mr. Auch is a director of Pimco Advisors L.P., Smith
Barney Concert Series Funds, Smith Barney Trak Fund, The Brinson Partners Funds,
the Nicholas Applegate Funds, Semele Group, Inc., and Legend Properties, Inc.
and a trustee of Hillsdale College and the Arizona Heart Institute.
DANIEL LEVINSON. Mr. Levinson, age 43, has served as an independent trustee
since 1999 and currently serves as chief financial officer for Oracle Investment
Management, Inc. Prior to working for Oracle, Mr. Levinson joined Morgens
Waterfall, Vintadis and Company, Inc. in 1993 as its chief financial officer and
specialized in the management and workout of real estate and other investments
in its investment funds. Before working at Morgens, Mr. Levinson was a vice
president at Sentinel Real Estate Corporation, an institutional real estate
investment manager. Prior to joining Sentinel in 1988, Mr. Levinson was at KPMG
Peat Marwick for over six years. Mr. Levinson received a Bachelor of Science
degree from Lehigh University. Mr. Levinson is a certified public accountant and
a member of the American Institute of Certified Public Accountants.
STEPHEN M. PECK. Mr. Peck, age 65, has served as an independent trustee
since 1999 and currently maintains an investment office at Glider, Gagnon,
Howe & Co. LLC. Mr. Peck is a director of Harnischfeger, Inc., Fresenius Medical
Care and OFFIT Investment Funds. He is also a member of the Advisory Board of
the Torrey Funds and Brown Simpson Asset Management. Mr. Peck serves as a member
of the Board of Trustees of New York University, The Jewish Theological Seminary
and the Mount Sinai School of Medicine and is Chairman of the Board of Trustees
of the Mount Sinai-NYU Health System.
L.G. SCHAFRAN. Mr. Schafran, age 62, has served as a trustee since 1999 and
as our interim president and chief executive officer since August 14, 2000. He
is currently chairman of our board and has been a Managing General Partner at
L.G. Schafran & Associates since 1984. Mr. Schafran is a director of Tarragon
Realty Investors, Inc. (f/k/a National Income Realty Trust), PubliCARD, Inc.
(f/k/a Publicker Industries, Inc.), COMSAT Corporation and chairman of the board
of Delta-Omega Technologies, Inc. Mr. Schafran served as a director of Capsure
Holdings Inc. from 1986 to 1997, OXIGENE, Inc. from 1993 to 1996,
Glasstech, Inc. from 1995 to 1997, Dart Group Corporation from 1993 to 1997 and
Kasper A.S.L., Ltd. from 1997 to 2000.
RECOMMENDATION OF THE BOARD: The board recommends that you vote "FOR" the
election of all four nominees.
PROPOSAL NUMBER TWO: RATIFY APPOINTMENT OF ERNST & YOUNG LLP
Our board, on the recommendation of the existing audit committee, has
engaged Ernst & Young LLP to serve as our independent accountant for the fiscal
year ending December 31, 2000. We traditionally ask our shareholders to ratify
the selection of an independent accountant, even though your approval is not
required. Further, even if you do not approve the selection of Ernst & Young
LLP, we will not replace them as the independent accountant for this fiscal year
due to the added expense and delay that would result from replacing them and
selecting a new accountant. Instead, our board will consider the negative vote
as a direction to consider a different accountant next year.
Ernst & Young LLP has been our independent accountant since 1989, and no
relationship exists other than the usual relationship between independent public
accountant and client. Representatives of Ernst & Young LLP are expected to be
available at the annual meeting to respond to questions.
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RECOMMENDATION OF THE BOARD: The board recommends that you vote "FOR" the
appointment of Ernst & Young LLP as our independent accountant for the fiscal
year ending December 31, 2000.
COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS
INDEPENDENT TRUSTEE COMPENSATION
Each independent trustee is paid an annual fee of $20,000, payable
quarterly, plus $1,000 for each board or committee meeting attended in person
and $500 an hour for each board or committee meeting held by telephonic
conference call. We also reimburse each independent trustee for out-of-pocket
expenses incurred in attending board meetings. Each person serving as an
independent trustee is awarded an option to purchase 2,000 of our common shares
ten days after each annual meeting. All options granted to the independent
trustees vest and become exercisable in the following installments: (1) fifty
percent (50%) on the first anniversary of the grant; and (2) fifty percent (50%)
on the second anniversary of the grant.
Our board is required to meet at least four times per year, either in person
or by telephonic conference. During calendar year 1999, the board met eight
times. Each trustee attended all of the meetings in 1999. Our board also had
three committees, a nominating committee, an audit committee and a compensation
committee. Messrs. Auch, Norman Gold and Marvin Sotoloff comprised the members
of each committee through December 13, 1999. Subsequent to December 13, 1999,
Messrs. Auch, Peck, Schafran and Levinson, comprised the members of each
committee. Mr. Schafran resigned from these committees when he became our
interim president and CEO. During calendar year 1999, the audit committee met
twice, the compensation committee did not meet and the nominating committee met
once.
In February 2000, our board formed a financial advisory committee to
evaluate and explore strategic alternatives designed to maximize shareholder
value. The financial advisory committee was originally comprised of
Messrs. Auch, Peck, Levinson and Schafran and has met 24 times in 2000.
Mr. Schafran resigned from this committee when he became our interim president
and CEO.
EXECUTIVE OFFICERS
The board of trustees annually elects our executive officers and, subject to
each officer's employment agreement, may remove these officers at any time.
Listed below is information about our executive officers, except that
information regarding Larry Schafran, our interim president and chief executive
officer can be found under the description of the nominees for trustee under
Proposal Number One.
ROBERT G. HIGGINS. Mr. Higgins, age 48, has served as our vice president
and general counsel since 1992 and as secretary since 1995. Mr. Higgins received
a B.A. degree in government from the University of Notre Dame and a law degree
from Loyola University of Chicago. Mr. Higgins concentrates his practice in the
areas of real estate development, finance, acquisition, land use, sales, lending
and general corporate business practice. Mr. Higgins previously served as vice
president, general counsel and secretary of Legend Properties, Inc. (f/k/a
Banyan Mortgage Investment Fund), Banyan Short Term Income Trust and Semele
Group, Inc. (f/k/a Banyan Strategic Land Fund II) (collectively, the "Banyan
Funds")and is currently serving in the same position for BSRT Management Corp.
Mr. Higgins is admitted to the bar in the States of Illinois, Minnesota and
Texas and also practices law as a sole practitioner.
JOEL L. TEGLIA. Mr. Teglia, age 38, has served as our vice president and
chief financial officer since 1994. Prior to his appointment, Mr. Teglia
provided various services to us in his capacity as controller for BSRT
Management Corp. (f/k/a Banyan Management Corp.), a position that he held from
1991 to 1994. He received a B.A. degree in accounting from the University of
Notre Dame. Mr. Teglia
4
<PAGE>
previously served as vice president and chief financial officer of the Banyan
Funds and is currently serving in the same positions for BSRT Management Corp.
Mr. Teglia is a certified public accountant.
LEONARD G. LEVINE. Mr. Levine, age 53, has been our president and chief
executive officer since 1990 and a trustee since 1998. On August 14, 2000, we
suspended Mr. Levine from his duties as president and chief executive officer.
See, "Legal Proceedings." Mr. Levine also served as a trustee of ours from
September, 1986 until February 1990. Mr. Levine received a bachelors of
science/bachelors of arts degree in accounting from Roosevelt University and a
masters degree in taxation from DePaul University. Mr. Levine previously served
as president of each of the Banyan Funds and BSRT Management Corp. Mr. Levine is
a certified public accountant and a licensed real estate broker.
EXECUTIVE COMPENSATION
This table shows compensation paid to our chief executive officer and our
next three most highly compensated executive officers during the last three
years ended December 31, 1999.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ----------------------- --------
SECURITIES
RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME YEAR SALARY(2) BONUS COMPENSATION AWARD(S) SARS(#) PAYOUTS COMPENSATION
----------------------------- -------- --------- -------- ------------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leonard G. Levine,
President and Chief
Executive Officer
(1)(3)..................... 1999 $212,317 $101,471
1998 $206,100 $146,382
1997 $195,540 $2,319,292
Jay E. Schmidt
Vice
President-Investments...... 1999 $183,053 $ 40,000
1998 $170,307 $ 41,908
1997 $165,281 $ 35,000
Neil D. Hansen
First Vice President....... 1999 $220,732 $ 50,000
1998 $205,860 $ 48,990
1997 $192,546 $ 20,000
Joel L. Teglia
Vice President and Chief
Financial Officer.......... 1999 $143,208 $ 30,000
1998 $126,825 $ 30,755
1997 $ 95,160 $ 10,000
</TABLE>
------------------------------
(1) As of the fiscal year ended December 31, 1999, Mr. Levine owned 512,504
shares of beneficial interest which he is restricted from transferring
except in compliance with the registration requirements of federal and state
securities law. The value of these shares as of December 31, 1999, without
any discount for the transfer restrictions was $3,075,024.
(2) Includes the lesser of 3% of base compensation or $4,800 which was
contributed by us to each employee's 401(k) plan. For 1999, due to timing of
our bi-weekly pay periods, salary paid includes 1999 salary plus 1/26th of
1998's salary.
(3) On August 14, 2000, we exercised our rights under our employment agreement
with Mr. Levine, by suspending him and placing him on leave from his
position as president. To replace Mr. Levine, our board of trustees has
appointed Larry Schafran, to the position of interim president and chief
executive officer. Mr. Schafran was also elected to the position of chairman
of the board of trustees on October 13, 2000.
EMPLOYMENT AGREEMENTS.
MR. LEVINE. We entered into an employment agreement with Mr. Levine on
March 11, 1998, although the agreement became effective retroactively as of
October 1, 1997. This term of the agreement expires on December 31, 2001. On
December 14, 1999 we amended Mr. Levine's employment agreement to provide for
certain rights upon liquidation of the Trust and the immediate
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vesting of all outstanding options. Under the agreement, we agreed to pay
Mr. Levine a base salary equal to $200,000 per year through December 31, 1999
increasing to $210,000 per year during the last two years of the agreement. The
agreement also grants Mr. Levine the ability to earn annual incentive
compensation equal to 62.5% of the base salary each year, provided that we
achieve certain predetermined levels of "funds from operations" increased by .03
for each one percentage point that our actual per share "funds from operations"
exceed the target and decreased (but not below zero) by .04 for each one
percentage point our actual per share "funds from operations" is below the
target amount.
Mr. Levine was also granted options to purchase 350,000 shares at an
exercise price equal to $5.50 per share. The number of shares underlying the
options and the exercise price of each option is subject to adjustment from time
to time if we: (1) issue or sell additional common shares in exchange for
consideration at a price less than the prevailing market price of our shares;
(2) issue or sell warrants with exercise prices less than the prevailing market
price; (3) declare a dividend or otherwise make a distribution to our
shareholders in the form of additional common shares; (4) subdivide our
outstanding common shares into a larger number of common shares; or (5) combine
our outstanding common shares into a smaller number of common shares.
Mr. Levine exercised all of the options on January 12, 2000. The agreement also
requires us to provide Mr. Levine with both life and disability insurance
benefits during the term of the agreement, as well as all non-wage benefits we
provide to our other salaried employees.
Mr. Levine's agreement contains provisions that requires us to make certain
payments to him upon the occurrence of a "Triggering Event" which is defined as:
- the date that a Plan of Liquidation of the Trust becomes effective;
- the date on which we sell all or substantially all of our assets;
- the date we merge or enter into a business combination with another entity
if, among other things, we are not the surviving entity; or
- the members of the existing board fail to constitute a majority of the
board.
The agreement also gives us the right to terminate Mr. Levine under certain
circumstances.
On August 14, 2000, we suspended Mr. Levine pursuant to our employment
agreement with him and have filed an arbitration action and a lawsuit alleging
that Mr. Levine breached his duty of loyalty to us and that he had committed
intentional acts that caused material damage to our business or properties.
Pending a final ruling by an arbitrator or a court, we will comply with the
employment agreement including the compensation provisions. To replace
Mr. Levine, our board of trustees appointed Larry Schafran, to the position of
interim president and chief executive officer.
MESSRS. HANSEN, SCHMIDT AND TEGLIA. We also had employment agreements with
each of Messrs. Hansen, Schmidt and Teglia. Pursuant to these agreements, we
were obligated to pay Messrs. Hansen, Schmidt and Teglia annual base salaries
equal to $213,040, $176,680 and $138,240 respectively. Each executive is
eligible for all non-wage benefits we offer to our salaried employees and is
reimbursed for reasonable business expenses. Additionally, pursuant to each
agreement, we are required to indemnify and hold harmless each executive from
liabilities each may incur as a result of performing duties under his employment
agreement. On October 1, 2000 we entered into agreements with Messrs. Schmidt
and Hansen terminating their employment and settling all claims for severance
pay. On November 1, 2000 we entered into a new employment agreement with
Mr. Teglia (see, "Board of Trustees Report on Executive Compensation")
STOCK OPTION GRANTS
We did not grant any options to purchase shares of beneficial interest
during the year ended December 31, 1999 to any of our executive officers. On
December 23, 1999 we granted options to purchase shares of beneficial interest
to each of our independent trustees in accordance with our Executive and
Director Omnibus Stock Option Plan. The table below sets forth the aggregated
option exercises and year-end option value for 1999.
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AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END (#) FY-END ($)
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
---- ------------------ -------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Leonard G. Levine............ -- -- 350,000/0 $175,000/$0
Larry G. Schafran............ -- --
Jay E. Schmidt............... -- -- 39,335/0 $ 16,403/$0
Neil D. Hansen............... -- -- 39,335/0 $ 16,403/$0
Joel L. Teglia............... -- -- 32,335/0 $ 15,153/$0
</TABLE>
All of the options granted vested on December 14, 1999 because there
occurred a "change in control" as that term was defined in our Executive and
Director Omnibus Stock Option Plan. The "change in control" occurred because on
that date, the members of our board as of the effective date of the Plan failed
to constitute a majority of the members of our board. In addition, in
December 1999, we offered all of our current employees and advisors who hold
options the opportunity to exercise all of the vested but unexercised options
with the proceeds of a loan from us. Each loan is non-recourse and bears
interest at an annual rate of 6.5%. Each person is required to pledge all shares
purchased with the proceeds of the loan to secure the payment of principal and
interest on the loan. We loaned approximately $3.2 million to these persons. All
loans will mature in five years; provided that any person who terminates his or
her employment or whom we terminate is required to repay the loan and all
accrued interest by surrendering the shares securing the loan or by tendering
sufficient funds to pay all amounts owing within one month of terminating
employment. Pursuant to our recently enacted Severance and Retention Program for
non-contract employees, we have extended the term of any note made by a
terminated employee or will extend the term of any note made by any other
employee we choose to terminate, to the date upon which the last of these notes
comes due.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and trustees, and persons who own more than ten percent of our shares of
beneficial interest, to file reports of ownership and changes in ownership with
the SEC and the Nasdaq, and to furnish us with copies of the form. Based solely
on our review these forms or written representations from the reporting person,
we believe that each trustee, officer and beneficial owner of more than ten
percent of our outstanding common shares complied with these filing requirements
during the fiscal year ended December 31, 1999.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of November 10, 2000 regarding
the number and percentage of our outstanding common shares beneficially owned
by: (1) each trustee and each nominee for trustee; (2) each executive officer;
and (3) all trustees and executive officers as a group. The table also sets
forth information as of November 10, 2000 with respect to any person known to us
to be the beneficial owner of more than five percent of our outstanding common
shares. Information with respect to Morgens Waterfall Income Partners, L.P.,
Kensington Investment Group, Inc., Magten Asset Management Corp. and FMR Corp.
listed in the table below, including the notes, is based solely on copies of
statements filed under Section 13(d) or 13(g) of the Exchange Act, and we have
not independently confirmed this information. Share amounts and percentages
shown for each person or entity are adjusted to give effect to common shares
that are not outstanding but may be acquired by a person or entity upon exercise
of all options exercisable by such entity or person within sixty days of the
date of the date hereof. However, those common shares are not deemed to be
outstanding for the
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<PAGE>
purpose of computing the percentage of outstanding common shares beneficially
owned by any other person.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------------------------ -------------------- ----------------
<S> <C> <C>
Morgens Waterfall Income Partners, L.P.(1)................. 3,391,074 22.1%
Restart Partners, L.P.
Restart Partners II, L.P.
Restart Partners III, L.P.
Restart Partners IV, L.P.
Restart Partners V, L.P.
Endowment Restart, L.L.C.
10 East 50th Street
New York, NY 10022
Kensington Investment Group, Inc.(2)....................... 2,267,556 16.0%
Mellon Bank, N.A. as Trustee for the General
Motors Employees Domestic Group Pension
Trust
350 East 21st Street
New York, NY 10010
Magten Asset Management Corp.(3)........................... 753,600 5.3%
Four Orinda Way
Suite 220D
Orinda, CA 94563
FMR Corp.(4)............................................... 736,000 5.1%
Fidelity Management & Research Company
Fidelity Low-Priced Stock Fund
Fidelity Management Trust Company
Edward C. Johnson 3d
Abigail P. Johnson
82 Devonshire St., Boston, MA 02109
Daniel Levinson (6)........................................ 1,000 *
Leonard G. Levine,......................................... 862,504 6.1%
President(5)
Neil D. Hansen,............................................ 60,889 *
First Vice President(5)(6)
Stephen M. Peck (6)........................................ 1,000 *
L.G. Schafran.............................................. 1,000 *
Interim President and CEO(6)
Robert G. Higgins (5)(6)................................... 39,886 *
Vice President, Secretary and General Counsel
Jay E. Schmidt,............................................ 45,572 *
Vice President(5)(6)
Joel L. Teglia,............................................ 36,870 *
Chief Financial Officer(5)(6)
Walter E. Auch, Sr.(6)..................................... 5,000 *
All Trustees and Named Executive Officers of the Trust, as
a group (nine persons)................................... 1,053,721 7.4%
</TABLE>
------------------------
* less than 1%
(1) Includes the conversion of 61,572 shares of convertible preferred stock,
which can be converted into 1,195,573 of our common shares at a price of
$5.15 per share. Certain affiliates of Morgens
8
<PAGE>
Waterfall Income Partners, L.P. have filed reports with the SEC pursuant to
Section 13(d) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") indicating combined ownership of five percent (5%) or more
of the outstanding common shares. As of December 31, 1999, (i) Morgens
Waterfall Income Partners, L.P. owns 83,315 common shares; (ii) Restart
Partners, L.P. owns 418,768 common shares; (iii) Restart Partners II, L.P.
owns 692,830 common shares; (iv) Restart Partners III, L.P. owns 482,350
common shares; (v) Restart Partners IV, L.P. owns 304,758 common shares;
(vi) Restart Partners V, L.P. owns 100,855 common shares; (vii) Endowment
Restart, L.L.C. owns 109,625 common shares. Although John C. Waterfall and
Edwin H. Morgens do not directly own any common shares, each of them may be
deemed an indirect beneficial owner of 2,192,501 common shares by virtue of
their effective control over the operation of each of the affiliated
entities listed above. Furthermore, Morgens Waterfall Capital, L.L.C. may be
deemed an owner of 83,315 common shares by virtue of its position as general
partner of Morgens Waterfall Income Partners, L.P.
(2) According to filings made with the SEC, Kensington Investment Group, Inc.
("Kensington") is an investment advisor registered under the Investment
Advisors Act of 1940. Kensington has filed reports with the SEC pursuant to
Section 13(d) of the Exchange Act, indicating ownership of five percent (5%)
or more of the outstanding common shares. As of the date of their most
recent filing, Kensington has sole dispositive power over 2,267,556 common
shares, and sole voting power over 2,267,556 common shares.
(3) According to filings made with the SEC, Magten Asset Management Corp.
("Magten") is an investment advisor registered under the Investment Advisors
Act of 1940. Magten has filed reports with the SEC pursuant to
Section 13(d) of the Exchange Act, indicating ownership of five percent (5%)
or more of the outstanding common shares. As of the date of their most
recent filing, Magten has shared dispositive power over 753,600 common
shares, and shared voting power over 315,200 common shares.
(4) FMR Corp., Edward C. Johnson 3d and Abigail P. Johnson (who together with
other members of the Johnson family may be deemed to form a controlling
group with respect to FMR Corp.) have filed reports with the SEC pursuant to
Section 13(d) of the Exchange Act, indicating combined ownership of five
percent (5%) or more of the outstanding common shares. As of the date of
their most recent filing, Fidelity Management & Research Company, an
investment advisor registered under the Investment Advisors Act of 1940, and
Fidelity Low-Price Stock Fund, an investment company which Fidelity
Management & Research Company serves as investment advisor, owned
736,000 common shares or 7.8% of the outstanding common shares. Edward C.
Johnson 3d and FMR Corp. each has sole dispositive power over these
736,000 common shares, but neither has sole voting power over these common
shares. As of the date of their latest filing, Fidelity Management Trust
Company, a wholly-owned subsidiary of FMR Corp., owned 71,000 common shares
or .53% of the outstanding common shares as a result of serving as
investment manager of institutional accounts. Edward C. Johnson 3d and FMR
Corp. each has voting and dispositive power over these 71,000 common shares.
(5) Includes shares purchased on January 12, 2000 pursuant to the aforementioned
employee stock loan program as follows: Mr. Levine, 350,000 shares;
Mr. Schmidt, 36,000 shares; Mr. Hansen, 36,000 shares; Mr. Higgins, 30,335
shares; and Mr. Teglia, 29,000 shares.
(6) Includes options to purchase 3,335 shares for each of Messrs. Hansen,
Schmidt and Teglia, 5,000 shares for Mr. Auch and 1,000 shares for each of
Messrs. Levinson, Peck and Schafran.
LEGAL PROCEEDINGS
As discussed above, we have suspended Mr. Levine from his duties as
president and chief executive officer. We have filed a claim to be decided by an
arbitrator in which we allege that Mr. Levine has committed intentional acts
that have caused material damage to our business and property. We have also
filed suit in the Circuit Court of Cook County, Illinois, alleging that
Mr. Levine breached his duty of loyalty to us. We brought those actions after a
committee of our board of trustees uanimously concluded that Mr. Levine had
breached his duties while attempting to negotiate a
9
<PAGE>
purchase of our assets. If we are successful in either the arbitration claim or
in our lawsuit, a termination "for cause" of Mr. Levine's employment agreement
will be sustained and we believe that we will be able to recoup monies paid to
him during his suspension.
BOARD OF TRUSTEES REPORT ON EXECUTIVE COMPENSATION
GENERAL
Our board of trustees has formed a separate committee to evaluate and make
recommendations regarding executive compensation. This committee is comprised of
Messrs. Auch, Peck and Levinson. Messrs. Peck and Levinson became members of the
committee following election to the board last December. As a result, the
compensation policies prior to January 1, 2000 were evaluated by our prior
committee which was comprised of Mr. Auch, Norman Gold and Marvin Sotoloff.
In setting compensation for our executive officers, the committee considers
a number of factors such as the amounts paid to executives who are employed in
similar positions in companies primarily in the real estate industry with asset
size and other characteristics comparable to ours and our overall business plan.
We do not, however, rely on a specific list of entities to make this comparison.
1999 COMPENSATION
During 1999, we compensated Messrs. Hansen, Schmidt and Teglia in accordance
with their respective employment agreements which were executed in 1998. Each of
these agreements sets forth a specific base salary paid to each individual and
allows for discretionary bonuses. During 1999, Mr. Levine was responsible for
recommending both the amount of bonus and for establishing the performance
criteria for earning a bonus to be paid to Messrs. Hansen, Schmidt and Teglia.
During the year ended December 31, 1999, we paid bonuses to Messrs. Hansen,
Schmidt and Teglia totaling $50,000, $40,000 and $30,000, respectively. The
bonuses were tied, in part, to our financial performance and in part to the
individual achieving specific individual goals established for the year in
discussions between the individual and Mr. Levine and reviewed by us. For the
fiscal year ended December 31, 1999, we used the same performance criteria for
determining bonus amounts that was used in Mr. Levine's contract.
Mr. Levine was eligible to earn an annual incentive bonus equal to a
percentage of his base salary. The amount of the bonus is based on our "funds
from operations" reaching certain levels. For the fiscal year ended
December 31, 1999, Mr. Levine's target "funds from operations" for the year
ended December 31, 1999 was $0.85 per share. The actual amount of funds from
operations for this period was $0.81 per share, and Mr. Levine received a bonus
equal to $101,471 or 81% of the target. At the time that we signed the agreement
with Mr. Levine, we granted him options to purchase 350,000 common shares, all
of which Mr. Levine exercised in January 2000, at an exercise price of $5.50 per
share.
We have also granted options on our yearly basis to our other employees and
officers based typically on recommendations made by Mr. Levine. The vesting of
these options is typically not subject to the Trust's financial performance, but
instead is tied to the individual remaining employed by the Trust for a certain
period of time. We did not grant any options to our other employees and officers
during 1999.
RECENT DEVELOPMENTS
On August 14, 2000, we suspended Mr. Levine and filed an arbitration action
alleging that he committed intentional acts that caused material damage to our
business or properties. We have also filed suit in the Circuit Court of Cook
County, Illinois, alleging that Mr. Levine breached his duty of loyalty to us.
Pending a final ruling by an arbitrator or the court, we are required to
continue paying
10
<PAGE>
Mr. Levine his base salary. In the interim, our board of trustees appointed
Mr. Schafran to the position of interim president and chief executive officer.
We have determined that it is in the best interests of our shareholders for
us to pursue strategic alternatives designed to enhance shareholder value and to
obtain increased liquidity. As part of this determination, we: (1) elected not
to renew the employment contracts of Messrs. Schmidt and Hansen and entered into
separation agreements with each of them, (2) terminated Mr. Teglia's former
employment agreement and entered into a new one with him, and (3) entered into
employment agreements with Messrs. Higgins and Schafran.
On August 14, 2000, following the suspension of Mr. Levine, we engaged
Mr. Schafran to become our interim president and chief executive officer. The
term of Mr. Schafran's agreement extends until February 13, 2002, unless sooner
terminated for "cause," by death or disability, voluntarily by Mr. Schafran,
upon a "change in control" of the Trust, or upon Mr. Levine's reinstatement as
our president and chief executive officer. A "change in control" occurs if our
current board members fail to constitute a majority of our board (not including
those individuals nominated by our board) or when our shareholders adopt a plan
of liquidation which our board does not approve.
Mr. Schafran's base salary is comparable to that of Mr. Levine's. We
structured Mr. Schafran's bonus amounts in such a fashion so that he will be
rewarded if he adds value to the process of pursuing strategic alternatives. We
believe the two most obvious ways he can add value is by either assisting us in
liquidating our assets in an expeditious manner (thereby enhancing our
liquidity) or using his business experience to help us achieve a value to our
shareholders that we may not have been able to achieve otherwise. Under the
agreement we will pay Mr. Schafran an annual base salary of $200,000 and an
incentive bonus based on the present value of aggregate distributions we make to
shareholders during the term of the agreement. We will pay the incentive bonus
once our shareholders receive distributions whose aggregate present value is at
least $6.25 per share discounted to October 26, 2000 at 12%. The amount of
incentive bonus starts at $300,000 and increases as the present value of
distributions to our shareholders increases. Additionally, in lieu of the
incentive bonus, Mr. Schafran may receive an early completion bonus equal to
$300,000 if our shareholders receive distributions greater than $6.00 per share
on or before December 31, 2000. The early completion bonus is reduced to
$225,000 if our shareholders receive distributions greater than $6.00 per share
after December 31, 2000 but on or before March 31, 2000.
If we terminate Mr. Schafran's employment because Mr. Levine is reinstated
to his former position, we are obligated to pay Mr. Schafran his entire
incentive bonus, based on the present value of the aggregate distributions made
to our shareholders, as though his employment had not been terminated.
Additionally, if we terminate Mr. Schafran's employment due to his death,
disability or a "change in control," we are obligated to pay Mr. Schafran a
portion of the incentive compensation equal to the amount of incentive
compensation he would have earned had we not terminated his employment,
multiplied by a fraction, the numerator of which is the number of days he had
served as our interim president and chief executive officer and the denominator
of which is 548. Finally, if we terminate the agreement upon our final
dissolution and liquidation, we are obligated to pay Mr. Schafran the amount of
base salary he would have earned through February 13, 2002 and any earned but
unpaid incentive bonus based on the present value of the amount distributed to
our shareholders under the plan of liquidation.
Mr. Schmidt was principally involved in acquisition activity, which we no
longer plan to pursue. Mr. Hansen, whose duties included due diligence
activities in connection with acquisitions, is no longer able to fully perform
his job duties due to health reasons. As a result, we believe that we no longer
require the services of either Messrs. Hansen or Schmidt. Additionally, there
were certain ambiguities under each of Messrs. Schmidt and Hansen's former
contracts with respect to the amount of severance pay we would owe each of them
if we decided not to renew their respective contracts, and it was in our best
interests to mutually resolve the issue by negotiating separation agreements.
During 2000, we
11
<PAGE>
notified each of Messrs. Schmidt and Hansen of our intention not to renew their
employment agreements. On October 1, 2000, we entered into separation agreements
with each of them, pursuant to which they each resigned their positions with us
and released any claims they may have against us, in return for a severance
payment of $280,804 to Mr. Schmidt and $342,679 to Mr. Hansen.
We also determined that during this transitional time period, we have a
strong need for stability amongst our remaining executive officers. As such, our
compensation committee negotiated employment agreements with each of
Messrs. Higgins and Teglia. Mr. Higgins has served as our vice president and
general counsel since 1992 and our secretary since 1995. However, since 1997, he
has not been our employee. Instead, we have purchased legal services from
Mr. Higgins on a discounted basis from his normal charges and provided him with
office space and equipment. If the process of pursuing strategic alternatives
extends beyond December 31, 2000, we believe that Mr. Higgins' salary and bonus
under his employment agreement will be less than what we would have had to pay
to purchase his legal services in accordance with our prior arrangement.
Under the recently negotiated agreement, Mr. Higgins will, following the
annual meeting, become our first vice president, general counsel and chief
operating officer until October 31, 2002. Mr. Higgins' employment agreement may
be terminated prior to its expiration as follows: (1) by us for "cause"; (2) by
us upon 60 days prior written notice; (3) by our complete dissolution and
liquidation; (4) by Mr. Higgins' death or disability; or (5) voluntarily by
Mr. Higgins. Under the agreement, Mr. Higgins becomes our full-time employee,
however, he is allowed to perform legal services for clients. Mr. Higgins'
initial base salary is $260,000 with automatic 5% increases on January 1, 2001
and 2002. Unless we terminate Mr. Higgins' employment for "cause" or
Mr. Higgins terminates it voluntarily, upon expiration of the term of the
agreement, we will pay Mr. Higgins a severance payment of one year's salary and
a bonus equal to 50% of the aggregate amount of base salary Mr. Higgins earned
from November 1, 2000 to the end of the agreement. "Cause" is defined in the
agreement as: (1) conduct amounting to fraud or wilful misconduct, (2) any
material act of dishonesty, (3) the conviction of Mr. Higgins of a felony crime,
and (4) a material breach of the agreement by Mr. Higgins which remains uncured
for a period of five business days following notice of such breach.
Additionally, Mr. Higgins may terminate the agreement if: (A) the members of our
board as of the date of the agreement fail to constitute a majority of the
board; (B) our shareholders adopt a plan of liquidation without our board's
approval or recommendation; (C) we sell all of our real estate properties or
business; (D) we combine with another entity and our shareholders immediately
prior to the combination fail to retain a majority of the voting securities of
the surviving entity; (E) any person or entity becomes the beneficial owner of a
majority of our voting shares; (F) we relocate our executive offices to a
location in excess of 100 miles outside of the Chicago Loop area; (G) we breach
the agreement in a material respect which we fail to cure within five business
days of notice of such breach; and (H) a material diminution of Higgins' duties,
responsibilities or authority occurs.
Our compensation committee also decided that it was in our best interests to
enter into a new employment agreement with Mr. Teglia. We believe that
Mr. Teglia is essential to our success in pursuing strategic alternatives and it
was important to increase his salary to be commensurate with the increase in the
amount of time and effort he will be required to expend to assist us in this
process. Additionally, there were certain ambiguities under Mr. Teglia's former
contract with respect to the amount of severance pay we would owe him if we
decided not to renew that contract, and it was in our best interests to mutually
resolve the issue by negotiating a severance payment for the former contract and
entering into a new contract. As such, in September 2000, we notified
Mr. Teglia that we were not going to renew his original employment agreement and
instead, our compensation committee authorized Mr. Schafran to negotiate a new
employment agreement with him. Under the new agreement, Mr. Teglia will become
our executive vice president and chief financial officer following the annual
meeting until October 31, 2002. Mr. Teglia's agreement may be terminated for the
same reasons enumerated in Mr. Higgins' agreement. Upon execution of the
agreement, we paid to Mr. Teglia a severance payment of $204,765 in settlement
of our obligations to him under his prior employment
12
<PAGE>
agreement. Under the new agreement, Mr. Teglia's initial annual base salary is
$180,120, which is increased to $200,000 on January 1, 2001 and $210,000 on
January 1, 2002. Additionally, unless we terminate Mr. Teglia's employment for
"cause" or Mr. Teglia terminates it voluntarily, upon expiration of the term of
the agreement, we will pay Mr. Teglia a bonus equal to 50% of the aggregate
amount of base salary Mr. Teglia earned during the term of the agreement. The
definition of "cause" in Mr. Teglia's agreement is identical to the definition
set forth in Mr. Higgins' agreement.
Walter E. Auch, Sr.
Stephen M. Peck
Daniel Levinson
PERFORMANCE GRAPH
The graph below compares the cumulative total return on our common shares
for the last five fiscal years, with the cumulative total return on the
Standard & Poor's 500 Index and with the National Association of Real Estate
Investment Trusts, Inc. ("NAREIT"), Equity REIT Total Return Index for all
equity REITs over the same period (assuming the investment of $100 in our common
shares, the S&P 500 Total Return Index and the NAREIT Equity REIT Total Return
Index on December 31, 1993, and the reinvestment of all dividends). For the year
ended December 31, 1994, we utilized the NAREIT Equity Index for comparison to
industry or peer performance. Beginning with the fiscal year ended December 31,
1995, we switched to NAREIT's Equity REIT Total Return Index, which excludes
REITs operating healthcare facilities for comparison to industry or peer
performance since we believe this index provides a more meaningful comparison.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C> <C>
Banyan Strategic Reality Trust 100 109.55 102.28 124.27 183.35 211.36 246.38
S&P 500 Index 100 101.31 139.23 171.19 228.32 293.57 356.3
NAREIT Equity Index 100 103.17 118.92 160.86 193.45 159.59 152.22
</TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, THE S&P 500 TOTAL RETURN INDEX
AND THE NAREIT EQUITY REIT TOTAL RETURN INDEX
<TABLE>
<CAPTION>
YEAR-END DATA 1994 1995 1996 1997 1998 1999
------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BSRT............................................... 109.55 120.28 124.27 183.35 211.36 246.38
S&P 500 Index...................................... 101.31 139.23 171.19 228.32 293.57 355.30
NAREIT Equity Index (without Health Care).......... 103.17 118.92 160.86 193.45 159.59 152.22
</TABLE>
13
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended December 31, 1999, we paid no salary to, but
purchased legal services from, Robert G. Higgins, our vice president, secretary
and general counsel. We paid Mr. Higgins, in the aggregate, $330,645 for these
services. We also provide Mr. Higgins with office space and equipment.
Mr. Higgins does not pay any rent for the use of office space and equipment.
Instead, Mr. Higgins bills us at a discounted rate. Mr. Higgins also reimburses
us for the cost of two full-time and certain part-time employees. For the fiscal
year ended December 31, 1999, Mr. Higgins reimbursed us for a total of $172,074.
During the fiscal year ended December 31, 1999, we paid Adam Levine, the son of
Mr. Levine, $85,173 for services rendered to us as an employee. We also provided
Adam Levine with benefits customarily provided to our other employees. On
October 31, 2000, we terminated the employment of Adam Levine as part of our
Retention and Severance Program and paid him a severance payment in accordance
with that program equal to $90,762.
On January 12, 2000, our employees exercised their vested options to
purchase 575,337 of our common shares with the proceeds of loans from us. See
"Compensation of Trustees and Executive Officers" above for details of the loan
program. The table below shows the original amounts outstanding and the loan
balances on October 31, 2000 due from our executive officers and Adam Levine.
<TABLE>
<CAPTION>
ORIGINAL BALANCE AT
NAME AMOUNT OCTOBER 31, 2000
---- ---------- ----------------
<S> <C> <C>
Leonard G. Levine......................................... $1,925,000 $1,875,429
Jay E. Schmidt............................................ $ 213,500 $ 209,033
Neil D. Hansen............................................ $ 213,500 $ 209,033
Joel L. Teglia............................................ $ 170,875 $ 167,232
Robert G. Higgins......................................... $ 173,735 $ 169,720
Adam Levine............................................... $ 95,493 $ 93,167
</TABLE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We incorporate by reference herein the following documents filed pursuant to
the Exchange Act under the Exchange Act File No. 0-15465: (1) our annual report
on Form 10-K for the fiscal year ended December 31, 1999; and (2) quarterly
reports on Form 10-Q for the quarters ending March 30, 2000 and June 30, 2000.
All reports and other documents we file pursuant to Section 13(a)(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Proxy Statement also
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing these reports and documents. Any statement incorporated
or deemed to be incorporated herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement to the extent that any 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 this statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Proxy Statement. We will not update
this Proxy Statement for events occurring subsequent to the date of this Proxy
Statement.
We hereby undertake to provide without charge to each person to whom a copy
of this Proxy Statement has been delivered, upon written or oral request of the
person, a copy of any or all of the foregoing documents incorporated herein by
reference (other than exhibits to documents, unless these exhibits are
specifically incorporated by reference into the document). Requests for these
documents should be made to the Investor Relations Department at our principal
executive offices located at 150 South Wacker Drive, Suite 2900, Chicago,
Illinois 60606; telephone number (312) 683-3671.
14
<PAGE>
SHAREHOLDER PROPOSALS
We have not received any shareholder proposals for inclusion in this year's
proxy statement. If a shareholder wishes to present a proposal to be included in
the proxy statement for the next annual meeting, the proposal must be submitted
in writing and received by our secretary at our offices no later than July 11,
2001 addressed as follows: Robert G. Higgins or Corporate Secretary, Banyan
Strategic Realty Trust, 150 South Wacker Drive, Suite 2900, Chicago, Illinois
60606.
------------------------------------------------
------------------------------------------------
YOUR VOTE IS IMPORTANT. THE PROMPT RETURN OF
PROXIES WILL SAVE US THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES. PLEASE
PROMPTLY MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE.
------------------------------------------------
------------------------------------------------
15
<PAGE>
BANYAN STRATEGIC REALTY TRUST
150 SOUTH WACKER DRIVE
SUITE 2900
CHICAGO, ILLINOIS 60606
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Robert G. Higgins and L.G. Schafran,
and each of them, as Proxies, with the power to appoint their substitutes, and
hereby authorizes them to represent and to vote, as designated on the reverse
side, all the Common Shares of Beneficial Interest of Banyan Strategic Realty
Trust held of record by the undersigned on November 10, 2000, at the Annual
Meeting of Shareholders when convened on December 14, 2000, or any adjournment
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS SET FORTH HEREIN. IN THE EVENT
THAT ANY OTHER MATTER MAY PROPERLY COME BEFORE THE ANNUAL MEETING, OR ANY
ADJOURNMENT THEREOF, THE PROXIES ARE AUTHORIZED, IN THEIR DISCRETION, TO VOTE ON
THE MATTER.
CONTINUED ON THE REVERSE SIDE.
<PAGE>
PROXY CARD
<TABLE>
<S><C>
/X/
Please
mark your
votes as in
this
example
1. Elect the following four individuals to serve as trustees, including
three independent trustees, until the next annual meeting of
Shareholders or otherwise as provided in our Declaration. FOR AGAINST
For, except vote withheld from the following nominees:
Walter E. Auch, Sr. / / / /
Stephen M. Peck / / / /
Daniel M. Levinson / / / /
L. G. Schafran / / / /
2. Ratify the appointment of Ernst & Young LLP as our FOR AGAINST
independent public accountant for the fiscal year ending / / / /
December 31, 2000.
SIGNATURE(S) ____________________________________ DATE _______________________
____________________________________ DATE _______________________
NOTE: Sign exactly as name appears at left. If joint tenant, both should
sign. If attorney, executor, administrator, trustee or guardian, give
full title as such. If a corporation, please sign corporate name by
president or authorized officer. If partnership or limited liability
company, sign in full entity name by authorized person.
</TABLE>
