INVESTORS REAL ESTATE TRUST 12 South Main
Minot, ND 58701 (701) 837-IRET (4738)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given to the Shareholders of Investors Real Estate Trust
that the 27th Annual Meeting of Shareholders will be held in the Executive Room,
International Inn, in Minot, North Dakota, at 7:00 P.M. on Tuesday, August 19,
1997, for the following purposes:
1. To elect ten trustees of the Trust.
2. To ratify or reject the selection of Brady, Martz & Associates, P.C. as
Independent Certified Public Accountants for the Trust; and
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
The date fixed by the Board of Trustees as the record
date for the determination of Shareholders entitled to notice of, and to vote
at, the Annual Meeting is the close of business on May 31, 1997.
You are cordially invited to attend the Annual Meeting in person.
Shareholders who do not expect to be present personally at the meeting are
urged to fill in, date, sign, and return the accompanying proxy in the enclosed
envelope. It is important that your shares be represented and voted at the
meeting. The Board of Trustees sincerely hopes that all Shareholders are able to
attend the Annual Meeting.
By order of the Board of Directors this 30th day of
July, 1997.
Timothy P. Mihalick Secretary
<PAGE>
YOUR VOTE IS IMPORTANT!
Please indicate your voting instructions on the enclosed proxy. Date, sign,
and return it in the stamped envelope provided. To avoid additional expense of
further solicitation, we ask your cooperation in mailing your proxy promptly.
<PAGE>
PROXY STATEMENT
INVESTORS REAL ESTATE TRUST
12 South Main
Minot, ND 58701
SOLICITATION
The enclosed proxy is solicited by the Board of Trustees of Investors Real
Estate Trust in connection with the Annual Meeting of Shareholders to be held on
August 19, 1997, and it may be revoked by you at any time prior to its use. The
shares represented by the proxies received will be voted at the meeting by the
representative of the Board of Trustees. This proxy statement is expected to be
mailed on July 30, 1997 to Shareholders of record as of May 31, 1997.
As of May 31, 1997, there were issued and outstanding
14,997,591 shares of Beneficial Interest of Investors Real Estate Trust and each
such outstanding share of Beneficial Interest is entitled to one vote. To the
Trust's knowledge, no person is the beneficial owner of 5% or more of the
outstanding shares of Beneficial Interest of the Trust.
Only stockholders of record on the books of the Trust
at the close of business on May 31, 1997, will be entitled to vote at the
meeting.
All expenses in connection with the solicitation of
this proxy will be paid by the Trust.
Any proxy given pursuant to this solicitation and received by the Annual
Meeting will be voted as specified in such proxy. If no instructions are given,
proxies will be voted FOR the election of the nominees listed below, FOR the
ratification of the appointment of Brady, Martz & Associates P.C. as independent
certified public accounts for the Trust's fiscal year ending April 30, 1998,
and, in the direction of the proxies, on any other matter properly brought
before the meeting or any adjournment thereof. You may revoke the proxy by
giving written notice thereof to the secretary of the meeting, by executing a
later proxy or by attending the meeting and voting your shares in person.
<PAGE>
NOMINEES FOR ELECTION AS TRUSTEES
It is intended that the proxies received will be voted for the election of
the nominees named below, all of whom are presently members of the Board of
Trustees of Investors Real Estate Trust. Although the Board does not contemplate
that any of the nominees will be unable to serve, in the event any nominee is
unable or declines to serve as a trustee at the time of the Annual Meeting, the
proxy will be voted for any nominee who shall be designated by the present Board
of Trustees to fill such vacancy. The term of office for which trustees are
elected is until the next Annual Meeting of Shareholders and until their
successors are elected or appointed. The tabulation below shows information
concerning each nominee for Trustee and the Trust's advisor.
<TABLE>
<CAPTION>
NOMINEE AND POSITION PRINCIPAL OCCUPATION TRUSTEE SHARES BENEFICIALLY
WITH TRUST DURING PAST 5 YEARS SINCE OWNED AS OF 5/31/97
<S> <C> <C> <C>
C. Morris Anderson; Director of Dakota Boys Ranch
age 68 (25 yrs.); President of North
Trustee Hill Bowl, Inc.; Director of
International Inn, Inc. and
Norwest Bank - Minot, N.A.,
and a Partner in Magic City
Realty, Ltd. 1970 8,929 (1)
Ralph A. Christensen; Retired rancher; former Director
age 68 of First Bank - Minot, N.A.;
Trustee and Chairman Chairman of IRET 1970 42,238 (2)
John D. Decker;
age 80
Trustee Investor 1970 47,416 (3)
Mike F. Dolan;
age 86
Trustee and Vice-
Chairman Investor; Vice-Chairman of
IRET 1978 228,921 (4)
J. Norman Ellison, Jr; Businessman; Managing Partner
age 74 of Ellison Realty Co.; Former
Trustee Director of First Bank -
Minot, N.A. 1970 18,340 (5)
Daniel L. Feist; Realtor; Broker; Real Estate
age 65 Developer; Builder; General
Trustee Contractor; President-Owner
Feist Construction & Realty;
Investor; Businessman; former
Director of First Bank System
- Minot, N.A.; Director N.D.
Holdings, Inc. - Minot 1985 442,872 (6)
Patrick G. Jones;
age 49
Trustee Investor 1986 79,624 (7)
Jeff L. Miller; Investor; Businessman; President
age 53 of M&S Concessions, Inc. and
Trustee and Vice- former president of Coca-Cola
Chairman Bottling Co. of Minot; former
Director of First Bank -
Minot 1985 137,406 (8)
Roger R. Odell; Realtor; President of IRET;
age 71 Partner in Odell-Wentz &
Trustee and President Associates (Advisor of IRET);
Director of Investors Management
& Marketing, Inc. and Inland
National Securities, Inc.;
Partner in Magic City
Realty, Ltd. 1970 140,565 (9)
Thomas A. Wentz, Jr.; Attorney, Pringle & Herigstad,
age 31 P.C.; Sole General Partner of
Trustee WENCO, Ltd. 1996 166,832 (10)
</TABLE>
<PAGE>
(1) 5,729 shares are owned by Mr. Anderson and his wife as Joint Tenants.
3,200 shares are owned by Mr. Anderson's wife; he disclaims
beneficial ownership of these shares.
(2) Includes shares held in Mr. Christensen's IRA, and also his wife's IRA,
which is comprised of 603 shares. The balance is owned by Mr. Christensen
and his wife as Joint Tenants. Mr. Christensen's children own 16,679
shares as to which Mr. Christensen does not have beneficial ownership
or any dispositive powers.
(3) Owned by Mr. Decker and his wife as Tenants in Common. Mr. Decker's
children own 9,177 shares as to which Mr. Decker does not have beneficial
ownership or dispositive powers.
(4) Mr. Dolan's children own 41,354 shares, as to which Mr. Dolan disclaims
beneficial ownership or dispositive powers.
(5) Includes 4,689 shares held by Mr. Ellison's wife. Mr. Ellison disclaims
beneficial ownership of such shares.
(6) Includes 116,820 shares held in Mrs. Feist's name and in her IRA, of which
Mr. Feist disclaims beneficial ownership. Also includes shares held in Mr.
Feist's IRA's. Mr. Feist's children own 88,878 shares as to which Mr.
Feist does not have beneficial ownership or dispositive powers.
(7) Includes 39,723 shares held by Mrs. Jones and in her IRA. Mr. Jones
disclaims beneficial ownership of such shares. Also includes shares
held in Mr. Jones' IRA. Mr. Jones' children own 11,601 shares as to
which Mr. Jones disclaims beneficial ownership.
(8) 45,409 of such shares are owned by Mr. Miller's wife. Mr. Miller disclaims
beneficial ownership of such shares. Also includes shares held in Mr.
Miller's IRA.
(9) Includes 9,848 shares owned by Magic City Realty and 20,757 shares owned
by Investors Management & Marketing, Inc. Also includes shares held in
Mr. Odell's IRA, and 67,897 shares owned by Mr. Odell's wife, as to which
shares Mr. Odell disclaims beneficial ownership. Mr. Odell's children own
72,081 shares as to which Mr. Odell does not have beneficial ownership or
dispositive powers.
(10) Includes 164,877 shares owned by Wenco, Ltd., of which Mr. Wentz, Jr. is
Sole General Partner.
As of May 31, 1997, all of the above trustees as a group owned or held
voting control of 1,313,143 shares of Beneficial Interest of IRET, representing
8.76% of the 14,997,591 shares then outstanding.
During the fiscal year ending April 30, 1997, there were twelve regular
meetings of the Board of Trustees. All of the trustees attended 75% or more of
the meetings held during said fiscal year.
There are no separate audit, nominating or compensation committees of the
Board of Trustees, which duties are performed by the Board as a whole.
The last shareholder meeting at which trustees were elected was held on
August 21, 1996, at which meeting shareholders owning 62.8% of the shares of
IRET entitled to vote were present in person, or by proxy. The ten nominees
received 100% of the total shares voted at such meeting.
<PAGE>
COMPENSATION AND TRANSACTIONS WITH TRUSTEES AND ADVISOR
The following tabulation shows the cash compensation paid by IRET to its
trustees and officers during its fiscal year ending April 30, 1997. The Trust
has no retirement, bonus, or deferred compensation plan and no other
compensation will accrue, directly or indirectly, to any of the trustees except
as noted below.
<TABLE>
<CAPTION>
CASH COMPENSATION
CAPACITY IN FOR YEAR ENDING
NAME WHICH SERVED APRIL 30, 1997
<S> <C> <C>
C. Morris Anderson Trustee $ 8,204.00
Ralph A. Christensen Trustee & Chairman 10,199.50
John D. Decker Trustee 8,304.00
Mike F. Dolan Trustee & Vice-Chairman 9,352.75
J. Norman Ellison, Jr. Trustee 8,404.00
Daniel L. Feist Trustee 8,304.00
Jeff L. Miller Trustee & Vice-Chairman 9,152.75
Patrick G. Jones Trustee 8,304.00
Thomas A. Wentz, Jr. Trustee (2)
Roger R. Odell Trustee & President (1)
Thomas A. Wentz, Sr. Vice-President (1)&(2)
Timothy P. Mihalick Secretary (1)
(1) Mr. Odell and Mr. Wentz, Sr. are members of Odell-Wentz & Associates,
L.L.C., the Advisor to the Trust. Mr. Mihalick is Vice-President and
Principal Operating Officer of the Advisor. Under the Advisory Contract
between IRET and Odell-Wentz & Associates, L.L.C., IRET pays an Advisor's
fee based on the net assets of the Trust and, in addition, a percentage
fee for investigating and negotiating the acquisition of new investments.
For the year ending April 30, 1997, Odell-Wentz & Associates, L.L.C.,
received compensation and reimbursement of disbursements under said
Agreement of $667,366.70. The terms of said Advisory Agreement are
explained below. Investors Management & Marketing, Inc., a firm in which
Mr. Odell is a minority shareholder also furnishes real estate
management services to the Trust and receives as compensation four
percent (4%) of rents received from such real estate. For the fiscal
year ending April 30, 1997, Investors Management & Marketing, Inc.
received $408,903.64 as real estate management commissions. In addition,
Inland National Securities, Inc., a corporation in which Mr. Odell and
members of his family are shareholders, acts as a broker-dealer for the
sale of Trust securities. During the fiscal year ending April 30, 1997,
the Trust paid Inland National Securities, Inc. $291,143.37 as security
sales fees.
(2) Mr. Wentz, Sr. and Mr. Wentz, Jr. are members of the law firm of Pringle
& Herigstad, P.C., counsel for the Trust. During the fiscal year ending
April 30, 1997, the Trust paid Pringle & Herigstad, P.C. the sum of
$36,045.27 for legal services rendered and disbursements made on behalf
the Trust.
<PAGE>
ADVISORY AGREEMENT
Roger R. Odell has served as advisor to IRET since its formation in 1970.
As of January 1, 1986, a revised Advisory Agreement was entered into between
IRET and Odell-Wentz & Associates, a partnership of Roger R. Odell and Thomas A.
Wentz, Sr.. Mr. Odell serves as president and Mr. Wentz, Sr. serves as vice-
president of IRET. Mr. Wentz, Sr. has also served as attorney for IRET since its
formation as a member of the law firm of Pringle & Herigstad, P.C.
Under the Advisory Agreement, the advisor has the following duties and
responsibilities:
Advisor, at its expense, shall provide suitable office facilities for
IRET in Minot, North Dakota, and shall provide sufficient staff and
other equipment to conduct the day-to-day operations of IRET. Advisor
shall furnish a computer and all other office equipment necessary to
conduct the operations of IRET and shall pay for all routine supplies,
postage, and other costs of operating said office. IRET shall be billed
by the Advisor for stationery and other forms and documents printed
especially for IRET, the printing of the annual report and quarterly
reports and other communications to Shareholders and also for the
postage for mailing reports, checks and other documents to Shareholders.
The Advisor, under the direction of trustees, shall be responsible to
conduct all operations of IRET including:
Collection of rent, contract and mortgage payments and
depositing the same in IRET bank accounts;
Payment of bills;
Disbursements of dividends;
Preparing monthly reports to the trustees;
Preparing quarterly and annual reports to Shareholders;
Preparing notices of Shareholders' meetings and proxies and proxy
statements; and
Advising the trustees as to investment decisions including
acquisition and disposition of real estate and other permissible
investments.
For providing the above services, the Advisor is compensated as follows:
BASIC COMPENSATION. Advisor shall receive monthly as its basic compensation
for the above described services a percentage of the "net invested assets" of
IRET held on the last day of the month for which the payment is made as follows:
1/12th of .9% of net invested assets up to
$10,000,000; and
1/12th of .8% of net invested assets over
$10,000,000 but not less than $20,000,000; and
1/12th of .7% of net invested assets in excess of
$20,000,000.
<PAGE>
For the purpose of this agreement, "net invested assets" shall be determined as
follows:
Add: +total assets at cost
+depreciation reserve
+unearned contract receivable discount
+deferred gain account
Subtract: -cash
-marketable securities, less margin accounts
-total liabilities
ADDITIONAL COMPENSATION. For its services in investigating and negotiating
the acquisition of real estate equities, mortgages or contracts for deed by
IRET, the Advisor shall receive a fee of 1/2 of 1 percent of the first
$2,500,000 of value of any such asset which is recommended to and acquired by
IRET, except on new construction projects for which the fee is 1/2 of 1 percent
of the total cost.
LIMITATION. Notwithstanding the foregoing, the total compensation received
by the Advisor set forth above during any one fiscal year of IRET when added to
trustees' fees and other administrative costs of IRET shall not exceed the
lesser of the following: 2 percent of net invested assets (as set forth above)
or 25 percent of the net taxable income of IRET for such fiscal year.
Said Advisory Agreement is for a term of one year to continue for
successive terms on the same conditions until terminated by written notice of
either party and is also subject to a 60 day termination by either party and by
the Shareholders holding a majority interest in IRET.
SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Brady, Martz & Associates, P.C., Minot, North Dakota, has served as the
independent certified public accountant for IRET since its formation in 1970.
This firm has examined and reported on IRET's financial statements for all of
its fiscal years including the fiscal year ending April 30, 1997.
The Board of Trustees of IRET has selected Brady, Martz & Associates, P.C.,
as the independent certified public accountant for IRET for its fiscal year
ending April 30, 1998, subject to ratification or rejection by the Shareholders.
IRET is advised that neither Brady Martz & Associates nor any of its
professional members has any direct or indirect material financial interest in
IRET.
It is expected that a representative of Brady, Martz & Associates will be
present at the Annual meeting.
The Board of Trustees recommends that the Shareholders vote FOR the
ratification of the selection of Brady, Martz & Associates as the independent
certified public accountant for IRET.
<PAGE>
SHAREHOLDERS PROPOSALS FOR 1998 ANNUAL MEETING
A proposal submitted by a Shareholder for action at IRET's 1998 Annual
Meeting must be received by IRET at its offices at 12 South Main, Minot,
North Dakota 58701, not later than May 31, 1998, in order to be included in
IRET's proxy statement for the 1998 Annual Meeting. It is suggested that
proposals be submitted by certified mail, return receipt requested.
OTHER MATTERS
The trustees do not know of any other business which will be presented
for consideration at the meeting. If any other business properly comes before
the meeting or any adjournment thereof, the proxy holders will vote in regard
thereto according to their discretion insofar as proxies are not limited to the
contrary.
Timothy P. Mihalick
Secretary
<PAGE>
FIVE-YEAR PERFORMANCE COMPARISON
The table below provides an indicator of the cumulative total shareholder
returns for the Trust as compared to the S&P 500 Stock Index and a Peer Group
(1). The comparison assumes the investment of $100 in the stock of IRET and in
each of the indices, and the reinvestment of all dividends.
</TABLE>
<TABLE>
<CAPTION>
March 1, March 1, March 1, March 1, March 1, March 1,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
IRET 100 110.34 123.42 142.89 158.50 177.03
S&P 100 110.59 119.73 128.48 172.84 217.92
Peer 100 133 144 141 171 199
</TABLE>
(1) The Peer Group consists of the real estate investment trusts included by
the National Association of Real Estate Investment Trusts in its "Equity REIT
Index." IRET is classified by NAREIT as an equity real estate investment trust
(more than 75% of assets invested in real estate equities), but is not included
in said statistical index.
