===========================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
_________________
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
_________________
PROPERTY CAPITAL TRUST
(Name of Registrant as Specified In Its Charter)
PROPERTY CAPITAL TRUST
(Name of Person(s) Filing Proxy Statement)
_________________
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
[ ] $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:
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: (1)
4) Proposed maximum aggregate value of transaction:
[ ] 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 No.:
3) Filing Party:
4) Date Filed:
- ----------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
==============================================================================
<PAGE>
PROPERTY CAPITAL TRUST
One Post Office Square
Boston, Massachusetts 02109
October 28, 1994
To The Shareholders of
Property Capital Trust:
You are cordially invited to the Annual Meeting of
Shareholders which will be held in the Board Room, 33rd
Floor, 225 Franklin Street, Boston, Massachusetts, on
Wednesday, November 30, 1994, at 2:00 P.M.
At the meeting, you will be asked to elect seven
Trustees, to approve the Amended and Restated Deferred Stock
Plan for Non-Employee Trustees, to approve the Property
Capital Trust 1994 Stock Option Plan for Non-Employee
Trustees, to approve certain amendments to the Property
Capital Trust 1992 Stock Option Plan, to ratify the
appointment of the Trust's independent auditors and to
transact such other business as may properly come before the
meeting.
After the formal business meeting, we will review
the past year (including the performance of the Trust's
portfolio) and report on the current outlook for the Trust.
There will be time for questions and for discussions with
the Trustees and officers.
We hope you will attend the meeting in person, but
we urge you in any event to complete the enclosed proxy and
promptly return it in the envelope provided. If you attend
the meeting, you may withdraw your proxy and vote in person.
Sincerely,
JOHN A. CERVIERI JR.
Managing Trustee
<PAGE>
PROPERTY CAPITAL TRUST
One Post Office Square
Boston, Massachusetts 02109
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To The Shareholders of Property Capital Trust:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of Property Capital Trust (the "Trust") will be
held in the Board Room, 33rd Floor, 225 Franklin Street,
Boston, Massachusetts, on Wednesday, November 30, 1994, at
2:00 P.M., for the following purposes:
1. to elect seven Trustees;
2. to approve the Amended and Restated Deferred Stock Plan
for Non-Employee Trustees;
3. to approve the Property Capital Trust 1994 Stock Option
Plan for Non-Employee Trustees;
4. to approve amendments to the Property Capital Trust
1992 Stock Option Plan to (i) increase the number of
shares available for award under the plan by 150,000,
(ii) to provide for immediate vesting of options upon
the occurrence of a Change of Control of the Trust and
(iii) to change the name of the plan to the "Property
Capital Trust 1992 Employee Stock Option Plan";
5. to ratify the appointment of Ernst & Young LLP, as the
Trust's independent auditors for the fiscal year ending
July 31, 1995; and
6. to transact such other business as may properly come
before the meeting or any adjournments or postponements
thereof.
Only shareholders of record at the close of
business on October 20, 1994 are entitled to notice of and
to vote at the Annual Meeting or any adjournments or
postponements thereof.
BY ORDER OF THE TRUSTEES,
WALTER F. LEINHARDT,
Secretary
Boston, Massachusetts
October 28, 1994
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY PROMPTLY.
<PAGE>
WHETHER OR NOT YOU NOW PLAN TO ATTEND THE MEETING, YOU ARE
URGED TO COMPLETE, DATE, SIGN AND MAIL THE ENCLOSED PROXY,
FOR WHICH A RETURN ENVELOPE IS PROVIDED. IF YOU DECIDE TO
ATTEND THE MEETING, YOU MAY, IF YOU WISH, REVOKE YOUR PROXY
AND VOTE YOUR SHARES IN PERSON.
<PAGE>
PROPERTY CAPITAL TRUST
One Post Office Square
Boston, Massachusetts 02109
PROXY STATEMENT
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished to the share-
holders of Property Capital Trust (the "Trust") in connec-
tion with the solicitation of proxies by the Trustees of the
Trust for use at the Annual Meeting of Shareholders to be
held in the Board Room, 33rd Floor, 225 Franklin Street,
Boston, Massachusetts, on Wednesday, November 30, 1994, at
2:00 P.M., or any adjournments or postponements thereof.
The meeting has been called for the purposes of (i) electing
seven Trustees; (ii) approving the Amended and Restated
Deferred Stock Plan for Non-Employee Trustees (the "Trustee
Deferred Stock Plan"); (iii) approving the Property Capital
Trust 1994 Stock Option Plan for Non-Employee Trustees (the
"Trustee Stock Option Plan"); (iv) approving certain
amendments (the "Amendments") to the Property Capital Trust
1992 Stock Option Plan (the "Employee Stock Option Plan");
(v) ratifying the appointment of Ernst & Young LLP as the
Trust's independent auditors for the fiscal year ending
July 31, 1995; and (vi) considering and acting upon such
other business as may properly come before the meeting.
This Proxy Statement and the accompanying Notice of Annual
Meeting of Shareholders and Proxy are being mailed on or
about October 28, 1994, to shareholders of record on
October 20, 1994.
A proxy delivered pursuant to this solicitation
may be revoked by a shareholder at any time prior to its
exercise by written notice to the Secretary of the Trust, by
submission of another proxy bearing a later date or by
voting at the meeting. Such notice or later proxy will not
affect a vote on any matter taken prior to the receipt
thereof by the Trust. The mere presence at the meeting of
the shareholder appointing the proxy will not revoke the
appointment. If not revoked, the shares represented thereby
will be voted at the meeting in accordance with the instruc-
tions indicated in the proxy by the shareholder, or, if no
instructions are indicated, will be voted FOR the slate of
Trustees described herein, FOR approval of the Trustee
Deferred Stock Plan, FOR approval of the Trustee Stock
Option Plan, FOR approval of the Amendments to the Employee
Stock Option Plan, FOR the ratification of the appointment
of Ernst & Young LLP and, as to any other matter that may be
brought before the meeting, in accordance with the judgment
of the person or persons voting the same.
Shares as to which a broker indicates it has no
discretion to vote and which are not voted and abstentions
will be considered not present at the Annual Meeting for
<PAGE>
Page 2
purposes of determining the presence of a quorum and as
unvoted for approving the election of Trustees, for
approving the Trustee Deferred Stock Plan, for approving the
Trustee Stock Option Plan, for approving the amendments to
the Employee Stock Option Plan and for approving the
appointment of Ernst & Young LLP as independent auditors.
The votes of shareholders present in person or represented
by proxy at the Annual Meeting will be tabulated by an
inspector of elections appointed by the Trust. The
inspector's duties include determining the number of shares
represented at the Annual Meeting, counting all votes and
ballots and determining the number of shares representing
any outcome of the balloting.
Management of the Trust is not aware of any
matters not set forth herein that may come before the meet-
ing. Any written notice revoking a proxy should be sent to
the Trust prior to the Annual Meeting at: Property Capital
Trust, One Post Office Square, 21st Floor, Boston,
Massachusetts 02109, Attention: Walter F. Leinhardt,
Secretary.
All expenses in connection with this solicitation
will be borne by the Trust. It is expected that solicita-
tion will be made primarily by mail, but employees of the
Trust may also solicit proxies for no additional compensa-
tion, and Corporate Investor Communications may also solicit
proxies on behalf of the Trust at an anticipated cost of
$4,000 plus reimbursement of reasonable out-of-pocket
expenses. The Trust will also request brokerage firms,
nominees, custodians and fiduciaries to forward proxy mate-
rials to the beneficial owners of shares held of record by
such persons for the purpose of obtaining authorization for
the execution of proxies. The Trust will reimburse such
persons and the Trust's transfer agent for their reasonable
out-of-pocket expenses in forwarding such materials.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Only holders of record of the Trust's common
shares, without par value ("Common Shares"), at the close of
business on October 20, 1994, are entitled to notice of and
to vote at the meeting or any adjournments or postponements
thereof. The total number of Common Shares outstanding as
of October 20, 1994 was 9,030,585. Each Common Share is
entitled to one vote on each matter which may come before
the meeting. The presence at the meeting in person or by
proxy of one-third of the Common Shares outstanding and
entitled to vote will constitute a quorum for the trans-
action of business.
<PAGE>
Page 3
To the best knowledge of the Trust, no person
beneficially owns (as such term is defined in the Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) more than 5% of the Common Shares.
The following table sets forth, as of October 20,
1994, information known to the Trust with respect to the
beneficial ownership of Common Shares by (i) each Trustee of
the Trust, (ii) each executive officer of the Trust named in
the Summary Compensation Table under "Executive Compensa-
tion" and (iii) all Trustees and executive officers of the
Trust as a group:
Amount and Nature
of Beneficial Percent of
Name and Address Ownership 1/ Class
- ---------------- ----------------- ----------
William A. Bonn 7,874 2/ 3/
Walter M. Cabot 600 4/ 3/
John A. Cervieri Jr. 127,700 5/ 6/ 1.4%
Robin W. Devereux 3,500 7/ 3/
Graham O. Harrison 1,000 8/ 3/
J. Atwood Ives 1,600 9/ 3/
Walter F. Leinhardt 440 10/ 3/
Norman B. Leventhal 7,000 11/ 3/
Edward H. Linde 500 12/ 3/
Robert M. Melzer 25,000 13/ 3/
John J. Monkouski 0 14/ 3/
Glenn P. Strehle 1,000 15/ 3/
Michael I. Sucoff 5,000 16/ 3/
All Trustees and
executive officers
as a group
(14 persons) 182,714 17/ 1.9%
_______________
1/ Nature of beneficial ownership is sole voting and
investment power except as indicated in subsequent
notes.
2/ Represents 3,874 Common Shares held on Mr. Bonn's
behalf through the PCT 401(k) Plan and Trust, the
defined contribution plan sponsored by the Trust, of
<PAGE>
Page 4
which Mr. Bonn is a Trustee and 4,000 Common Shares
issuable upon exercise of vested employee stock
options. Does not include 28,500 Common Shares
issuable upon exercise of employee stock options which
have not yet vested.
3/ Less than 1%.
4/ Does not include 11,022 Common Shares allocated,
subject to shareholder approval of the Trustee Deferred
Stock Plan, to Mr. Cabot pursuant to such plan, at
July 31, 1994.
5/ Includes 105,400 Common Shares owned by Mr. Cervieri's
wife or held by her as custodian and/or Trustee, or by
Mr. Cervieri's children. Mr. Cervieri disclaims any
beneficial interest in such shares.
6/ Includes 20,300 Common Shares held for the benefit of
Mr. Cervieri through a profit-sharing trust, of which
Mr. Cervieri is a Trustee. Does not include 32,341
Common Shares allocated, subject to shareholder
approval of the Trustee Deferred Stock Plan, to
Mr. Cervieri pursuant to such plan, at July 31, 1994.
7/ Represents 1,000 Common Shares held through an
Individual Retirement Account owned and controlled by
Ms. Devereux and 2,500 Common Shares issuable upon
exercise of vested employee stock options. Does not
include 20,000 Common Shares issuable upon exercise of
employee stock options which have not yet vested.
8/ Does not include 28,425 Common Shares allocated,
subject to shareholder approval of the Trustee Deferred
Stock Plan, to Mr. Harrison pursuant to such plan, at
July 31, 1994.
9/ Includes 600 Common Shares owned by Mr. Ives' wife as
Trustee. Mr. Ives disclaims any beneficial interest in
such shares. Does not include 28,608 Common Shares
allocated, subject to shareholder approval of the
Trustee Deferred Stock Plan, to Mr. Ives pursuant to
such plan at July 31, 1994.
10/ Includes 400 Common Shares owned by Mr. Leinhardt's
wife. Mr. Leinhardt disclaims any beneficial interest
in such shares. Does not include 2,347 Common Shares
allocated, subject to shareholder approval of the
Trustee Deferred Stock Plan, to Mr. Leinhardt pursuant
to such plan at July 31, 1994.
11/ Includes 2,000 Common Shares owned by Mr. Leventhal's
wife. Mr. Leventhal disclaims any beneficial interest
<PAGE>
Page 5
in such shares. Does not include 6,968 Common Shares
allocated, subject to shareholder approval of the
Trustee Deferred Stock Plan, to Mr. Leventhal pursuant
to such plan, at July 31, 1994.
12/ Does not include 6,291 Common Shares allocated, subject
to shareholder approval of the Trustee Deferred Stock
Plan, to Mr. Linde pursuant to such plan, at July 31,
1994.
13/ Includes 16,000 Common Shares held for the benefit of
Mr. Melzer through a profit-sharing trust, of which
Mr. Melzer is a Trustee and 8,000 Common Shares
issuable upon exercise of vested employee stock
options. Does not include 57,000 Common Shares
issuable upon exercise of employee stock options which
have not yet vested.
14/ Does not include 13,000 Common Shares issuable upon
exercise of employee stock options which have not yet
vested.
15/ Does not include 2,347 Common Shares allocated, subject
to shareholder approval of the Trustee Deferred Stock
Plan, to Mr. Strehle pursuant to such plan, at July 31,
1994. The Massachusetts Institute of Technology
("M.I.T.") owns 350,000 Common Shares with respect to
which Mr. Strehle has voting and investment power by
virtue of his position as Vice President for Finance of
M.I.T., subject to the policies and procedures of the
Investment Committee of M.I.T of which Committee Mr.
Strehle is an ex-officio member. In addition, the
M.I.T. Retirement Plan owns 240,047 Common Shares with
respect to which Mr. Strehle has voting and investment
power by virtue of his position as Chairman of the
Board of Trustees of the M.I.T. Retirement Plan. Mr.
Strehle disclaims beneficial ownership of the Common
Shares owned by M.I.T. and the M.I.T. Retirement Plan.
16/ Includes 2,000 Common Shares issuable upon exercise of
vested employee stock options. Does not include 15,500
Common Shares issuable upon exercise of employee stock
options which have not yet vested.
17/ Includes shares owned by members of the immediate
families of certain Trustees and officers, as to which
shares the relevant Trustee or officer disclaims
beneficial ownership.
<PAGE>
Page 6
I. ELECTION OF TRUSTEES
The persons named in the accompanying Proxy will
vote the proxies received by them, unless they are
instructed therein to refrain from voting, for the election
of the seven nominees named below as Trustees, each to serve
until the next Annual Meeting of Shareholders and until a
successor is duly elected and qualified or until the
Trustee's earlier resignation or removal. All of the
nominees are currently Trustees of the Trust and were
previously elected by the shareholders of the Trust. J.
Atwood Ives and Norman B. Leventhal, who currently serve as
members of the Board of Trustees, have decided not to stand
for reelection as Trustees. If any nominee does not remain
a candidate at the time of the meeting, a situation which
management does not now anticipate, proxies will be voted
for a substitute nominee, if any, designated by the
remaining Trustees.
The affirmative vote of a plurality of the votes
cast by holders of Common Shares at the meeting is required
for the election of Trustees.
The following table sets forth, as of October 20,
1994, certain information concerning the seven nominees:
Principal Occupation
Nominee and Positions for Past 5 Years, Trustee
Held With Trust Affiliations and Age Since
- --------------------- -------------------- -------
Walter M. Cabot Senior Advisor of 1982
Trustee(1)(3) Standish, Ayer & Wood,
Inc., Boston, MA,
investment counsellors,
since 1991; Director of
General Reinsurance
Company, Greenwich, CT;
Trustee and Treasurer,
Wellesley College,
Wellesley, MA;
Chairman, Board of
Governors, New England
Medical Center; prior
to 1991, Director,
<PAGE>
Page 7
Principal Occupation
Nominee and Positions for Past 5 Years, Trustee
Held With Trust Affiliations and Age Since
- --------------------- -------------------- -------
President & Chief
Executive Officer of
the Harvard Management
Company, Inc., Boston,
MA, the endowment
management subsidiary
of Harvard University,
and Deputy Treasurer of
Harvard University
(Age 61).
John A. Cervieri Jr. Managing Trustee of the 1969
Managing Trustee (1) Trust since 1992; prior
to 1992, Managing
Trustee and Chief
Executive Officer of
the Trust; Chairman and
President of Property
Capital Associates,
Inc., formerly known as
Property Capital
Advisors, Inc. (the
"Advisor") (the former
investment advisor to
the Trust) and its
affiliates; Director of
BayBanks, Inc., and
BayBank Boston, N.A.,
Boston, MA; Chairman
and Chief Executive
Officer of Americana
Hotels and Realty
Corporation, Boston,
MA; Trustee of New
England Medical Center
(Age 63).
<PAGE>
Page 8
Principal Occupation
Nominee and Positions for Past 5 Years, Trustee
Held With Trust Affiliations and Age Since
- --------------------- -------------------- -------
Graham O. Harrison Director, Beacon 1980
Trustee(2) Properties Corporation,
Boston, MA, since May,
1994; Manager and
Investment Committee
Chairman, Swarthmore
College; prior to May,
1994, Vice President
and Chief Investment
Officer of the Howard
Hughes Medical Insti-
tute, Chevy Chase, MD.
(Age 71).
Walter F. Leinhardt Partner of Paul, Weiss, 1969
Trustee and Rifkind, Wharton &
Secretary(2) Garrison, New York, NY,
law firm (Age 62).
Edward H. Linde President of Boston 1985
Trustee(1)(3) Properties Inc.,
Boston, MA, builders
and developers
(Age 53).
Robert M. Melzer President and Chief 1992
Trustee, President and Executive Officer of
Chief Executive Officer the Trust, since 1992;
prior to 1992, Presi-
dent and Treasurer of
the Trust; Director of
PCA Institutional
Advisors, a former
affiliate of the
Advisor, and its
affiliates; Vice Chair-
man, Board of Trustees,
of Beth Israel Hospital
(Age 53).
<PAGE>
Page 9
Principal Occupation
Nominee and Positions for Past 5 Years, Trustee
Held With Trust Affiliations and Age Since
- --------------------- -------------------- -------
Glenn P. Strehle Vice President for 1993
Trustee(2) Finance (since June
1994), Treasurer (since
1975) and Vice Presi-
dent for resource
development (from 1986
to June 1994) of the
Massachusetts Institute
of Technology,
Cambridge, MA; member
of MIT Executive and
Investment Committee;
Chairman of the
Trustees of the MIT
Retirement Plan;
Director of SofTech,
Inc. and BayBanks, Inc.
and BayBank Boston,
N.A. (Age 58).
_______________
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
Section 16(a) of the Securities Exchange Act of
1934 (the "Exchange Act") requires the Trust's Trustees,
executive officers and beneficial owners of more than 10% of
the Trust's Common Shares to file reports of ownership and
changes of ownership with the Securities and Exchange
Commission and the American Stock Exchange. The Trust
believes that during fiscal year 1994, all filing require-
ments applicable to its Trustees, executive officers and
beneficial owners of more than 10% of the Trust's Common
Shares have been complied with except that the Initial
Statement of Beneficial Ownership of Securities on Form 3
was filed late by Randolph L. Kazazian, a Vice President of
the Trust. Mr. Kazazian became a Vice President of the
Trust on November 23, 1993, and his Form 3, indicating no
beneficial ownership of any Common Shares of the Trust, was
filed late on February 22, 1994.
During fiscal 1994, there were six meetings of the
Board of Trustees. The Trust has standing Audit, Executive
and Compensation Committees. The Audit Committee, which
during fiscal 1994 was composed of Messrs. Harrison,
<PAGE>
Page 10
Leinhardt and Strehle and two Trustees who are not standing
for reelection, J. Atwood Ives and Norman B. Leventhal, none
of whom was affiliated with the Trust's former investment
advisor nor employed by the Trust ("Outside Trustees"), met
three times during fiscal 1994. The function of the Audit
Committee is to supervise all relations between the Trust
and its independent auditors, including participating in the
planning for the annual audit and receiving and reviewing
the results of that audit.
The Executive Committee (which during fiscal 1994
was composed of Messrs. Cabot, Cervieri, Ives and Linde) is
responsible, among other things, for addressing major issues
which arise between scheduled Trustees' meetings. During
fiscal 1994, the Executive Committee did not hold meetings,
but its members discussed by telephone from time to time
matters concerning the Trust's business.
The Compensation Committee (which during fiscal
1994 was composed of Messrs. Cabot, Ives and Linde) met
two times during fiscal 1994. During fiscal 1994 the
Compensation Committee was responsible for administering the
Employee Stock Option Plan and for making decisions
concerning the compensation of the Trust's executive
officers which, in the case of Mr. Melzer, are subject to
ratification by the full Board of Trustees.
During fiscal 1995 the Audit and Compensation
Committees will continue to be composed entirely of Outside
Trustees. The Trust does not have a standing Nominating
Committee. During fiscal 1994, each Trustee attended at
least 75% of the meetings of the Board and of each committee
on which such Trustee served except Mr. Cabot and Mr. Linde.
Compensation of Trustees
Each Trustee receives a base fee of $833 per month
and each member of the Executive Committee and each member
of the Audit Committee receives a fee of $417 per month.
Members of the Compensation Committee do not receive any
additional compensation. In addition, each Trustee receives
$1,000 for each meeting attended. Trustees' fees totaled
$170,000 in fiscal 1994. The Trust also reimburses the
Trustees for their expenses incurred in attending meetings
of the Trustees. For fiscal 1994, reimbursed expenses
totaled $4,906. Mr. Melzer receives no compensation for
serving as a Trustee.
Historically, the Trust has had a deferred
compensation plan for the non-employee Trustees pursuant to
which such Trustees could elect to defer payment of their
base fees and meeting fees until a future selected date.
<PAGE>
Page 11
Under the deferred compensation plan the deferred fees were
payable by the Trust on such future selected date in a lump
sum or over a period, as selected by the Trustee, in cash.
The plan provided that the Trustees could elect to direct
the investment of their deferred fees so that such fees
would earn income at a rate equivalent to either the return
on Common Shares or based upon negotiable three-month
Certificates of Deposit. All eight Trustees that received
compensation from the Trust in calendar 1994 committed to
invest their calendar 1994 deferred fees at a rate measured
by the return on Common Shares.
The Trustees have voted to amend and restate the
deferred compensation plan, subject to shareholder approval,
to provide, among other things, for the payment of Trustees'
deferred fees solely in Common Shares rather than in cash
and for the reinvestment in Common Shares of dividends
payable from time-to-time on the Common Shares to which each
Trustee is entitled. See "II. Approval of Amended and
Restated Deferred Stock Plan for Non-Employee Trustees."
EXECUTIVE COMPENSATION
Summary Compensation of Executive Officers
The following table sets forth the compensation
awarded to, earned by or paid to the Chief Executive Officer
and the four other most highly compensated executive offi-
cers during the fiscal years ended July 31, 1994, July 31,
1993 and July 31, 1992 for services rendered in all capa-
cities to the Trust and its subsidiaries.
<TABLE>
<CAPTION>
Summary Compensation Table(1)
-----------------------------
Long-term
Annual Compensation Compensation
-------------------------------------- ------------
Fiscal Other Annual Options All Other
Year Salary Bonuses Compensation Granted Compensation
Name and Principal Position Ended (2) $ $ $ # $
- ---------------------------- --------- ------ ------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Melzer . . . . . . 7/31/94 216,000 25,000 0 25,000(4) 8,682(6)
President, Chief Executive 7/31/93 200,000 0 0 40,000(5) 4,718(7)
Officer and Chief Financial 7/31/92 --- --- --- --- ---
Officer
William A. Bonn . . . . . . . 7/31/94 175,000 15,000 0 12,500(4) 8,422(6)
Senior Vice President, 7/31/93 150,000(3) 0 0 20,000(5) 2,748(7)
Counsel and Assistant 7/31/92 --- --- --- --- ---
Secretary
John J. Monkouski . . . . . . 7/31/94 118,000 10,000 0 5,000(4) 2,823(6)
Vice President 7/31/93 115,000 0 0 10,000(5) 2,158(7)
7/31/92 --- --- --- --- ---
</TABLE>
<PAGE>
Page 12
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Michael I. Sucoff 7/31/94 106,000 10,000 0 7,500(4) 4,618(6)
Vice President 7/31/93 84,398(8) 0 0 10,000(5) 3,122(7)
7/31/92 --- --- --- --- ---
Robin W. Devereux 7/31/94 88,000 10,000 0 10,000(4) 5,011(6)
Vice President 7/31/93 80,000 --0 --0 12,500(5) 1,569(7)
and Treasurer 7/31/92 --- --- --- --- ---
</TABLE>
_______________
(1)The columns designated by the Securities and Exchange Commission ("SEC")
for the reporting of certain long-term compensation, including awards of
restricted stock and long-term incentive plan payouts, have been eliminated
as no such awards or payouts were made during the period covered by the
table.
(2)The Trust internalized its management effective as of August 1, 1992.
Prior to August 1, 1992, none of the Trust's executive officers received
any compensation from the Trust for services rendered to the Trust and
its subsidiaries as the Trust, pursuant to an advisory contract, had
retained the Advisor to act as its advisor and provide such services.
Four of the above five executive officers were formerly employed by the
Advisor under its advisory contract with the Trust, which expired on July
31, 1992 and was not renewed. Accordingly, pursuant to applicable
rules promulgated by the SEC, no compensation information is required
to be disclosed about the executives' compensation in respect of the fiscal
year ended July 31, 1992.
(3)In connection with the internalization of the Trust's management, the
Trust agreed to permit Mr. Bonn to continue to perform certain services
to the Advisor and its affiliates for which the Advisor and its affiliates
paid the Trust based upon the number of hours worked by Mr. Bonn on such
matters. The Trust further agreed that Mr. Bonn could receive up to a
maximum of $25,000 of such amounts paid to the Trust by the Advisor and
its affiliates for the services rendered by Mr. Bonn during fiscal 1993 to
the Advisor and its affiliates with the balance being retained by the Trust.
During fiscal 1993, Mr. Bonn received $25,000 from the Advisor and its
affiliates for such services. Because such amount was not paid by the Trust
for services rendered by Mr. Bonn to the Trust and its subsidiaries or at
the request of the Trust and its subsidiaries, such amounts are not included
in the Summary Compensation Table above.
(4)Effective as of January 6, 1994, the Compensation Committee awarded options
to acquire Common Shares of the Trust to key employees of the Trust,
including all five named executive officers, at the closing price of the
Common Shares on the American Stock Exchange on such date ($6.375). The
options were awarded pursuant to the Employee Stock Option Plan.
(5)Effective as of January 8, 1993, the Compensation Committee awarded options
to acquire Common Shares of the Trust to key employees of the Trust,
including all five named executive officers, at the closing price of the
Common Shares on the American Stock Exchange on such date ($3.75). The
options were awarded pursuant to the Employee Stock Option Plan.
(6)These amounts represent (i) amounts contributed by the Trust on a matching
basis with contributions made by employees and on a profit-sharing basis
under the PCT 401(k) Plan and Trust ($8,450 for Mr. Melzer, $8,190 for
Mr. Bonn, $2,591 for Mr. Monkouski, $4,386 for Mr. Sucoff, and $4,779
for Ms. Devereux), (ii) premiums paid by the Trust for term life insurance
policies (in the aggregate face amount of $50,000 for each executive
officer) ($232 for each of Messrs. Melzer, Bonn, Monkouski, Sucoff and Ms.
Devereux).
(7)These amounts represent (i) amounts contributed by the Trust on a matching
basis with contributions made by employees under the PCT 401(k) Plan and
Trust ($4,497 for Mr. Melzer, $2,527 for Mr. Bonn, $1,937 for Mr. Monkouski,
$3,000 for Mr. Sucoff, and $1,348 for Ms. Devereux), (ii) premiums paid by
the Trust for term life insurance policies (in the aggregate face amount of
$50,000 for each executive officer) ($221 for each of Messrs. Melzer, Bonn,
and Monkouski, and Ms. Devereux and $122 for Mr. Sucoff).
(8)During fiscal 1993, Mr. Sucoff's annual salary was $100,000. He only
received $84,398 as he commenced employment with the Trust in September
1992.
<PAGE>
Page 13
Stock Option Grants
The following table sets forth certain information
concerning stock option grants to the named executive offi-
cers during the last fiscal year under the Employee Stock
Option Plan. The Trust does not grant stock appreciation
rights ("SARs") of any kind.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year(1)
% of Total Grant Date
Options/SARs Value
Granted to Exercise or Grant Date
Options Employees in Base Price Expiration Present Value
Name Granted (#) Fiscal Year ($/Sh)(1) Date ($)(3)
- ---- ----------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Robert M. Melzer 25,000(2) 36% $6.375 1/6/04 $37,250
William A. Bonn 12,500(2) 18% $6.375 1/6/04 $18,625
John J. Monkouski 5,000(2) 7% $6.375 1/6/04 $ 7,450
Michael I. Sucoff 7,500(2) 11% $6.375 1/6/04 $11,175
Robin W. Devereux 10,000(2) 15% $6.375 1/6/04 $14,900
</TABLE>
_______________
(1)All options were granted on January 6, 1994 and have an exercise price
equal to the closing price of the Common Shares on the American Stock
Exchange on January 6, 1994 ($6.375).
(2)One-fifth of the options granted will vest on each of the first, second,
third, fourth and fifth anniversaries of the date of grant and the options
will be exercisable at any time between the date of vesting and January 6,
2004.
(3)These values were calculated using a Black-Scholes option pricing model.
The actual value, if any, that an executive may realize will depend on
the excess, if any, of the stock price over the exercise price on the date
the options are exercised, and no assurance exists that the value realized
by an executive will be at or near the value estimated by the Black-Scholes
model. The following assumptions were used in the calculations:
(a) assumed option term of 5 years;
(b) stock price volatility factor of 0.34;
(c) 7.0% annual discount rate;
(d) assumes a 5.64% dividend rate; and
(e) 0% discount to Black-Scholes ratio for each year an option remains
unvested.
Option Exercises/Value of Unexercised Options
The following table sets forth certain information
concerning unexercised options to purchase Common Shares of
the Trust held at the end of fiscal 1994 by the named
executive officers. No named executive officers have any
SARs.
<PAGE>
Page 14
<TABLE>
<CAPTION>
Aggregated Option/Exercises in Last Fiscal Year and
Fiscal Year End Option Values
Number of Unexercised Value of Unexercised
Shares Options/SARs at Fiscal in-the-money Options
Acquired on Value Year-end (#) at July 31, 1994(1)($)
Name Exercises (#) Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------- ------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Melzer 0 $0 8,000 57,000 $17,000 $121,125
William A. Bonn 0 $0 4,000 28,500 $ 8,500 $ 60,563
John J. Monkouski 2,000 $5,150 0 13,000 $ 0 $ 27,625
Michael I. Sucoff 0 $0 2,000 15,500 $ 4,250 $ 32,938
Robin W. Devereux 0 $0 2,500 20,000 $ 5,313 $ 42,500
</TABLE>
_______________
(1) Based upon the closing sale price of the Common Shares on July 31, 1994
($5.875) on the American Stock Exchange minus the option exercise price
($3.75) of in-the-money stock options.
Termination of Employment and
Change of Control Arrangements
The Trust is a party to five-year Termination
Agreements (the "Termination Agreements") with Messrs.
Melzer and Bonn (the "Executives"). During the term of the
Termination Agreements, upon the occurrence of a "change of
control" of the Trust, the Executives would be entitled to a
payment from the Trust equal to 150% (in the case of
Mr. Melzer) or 100% (in the case of Mr. Bonn) of such Execu-
tive's annual base salary at the date of such change of
control if during the six months following such change of
control the Executive elects to terminate his employment.
The Termination Agreements also provide for the
Trust to make certain payments equal to a percentage (150%
for Mr. Melzer or 100% for Mr. Bonn) of annual base salary
on the date of termination to each Executive if such execu-
tive is terminated by the Trust other than for "cause" or if
the Executive resigns for "good reason." The Termination
Agreements provide that termination for "cause" may occur if
(i) the Executive engages in fraud, misappropriation, embez-
zlement or any other conduct that either results in his con-
viction for a felony under the laws of the United States or
any State or is designed to result, directly or indirectly,
in improper gain or personal enrichment of the Executive at
the expense of the Trust, or any of its affiliates, or
(ii) in the reasonable opinion of the Trustees, the Execu-
tive has willfully failed to perform material duties of his
office following a cure period. The Termination Agreements
provide that the Executive may resign for "good reason" if
(i) the Executive is removed from his current position with
the Trust (other than if he is terminated for cause or
receives an equivalent or more senior position with the
Trust), (ii) the Executive is assigned duties materially
<PAGE>
Page 15
inconsistent with his position, responsibilities, reporting
requirements and status or the Trust takes any action which
results in a material diminution of his position, authority,
duties, responsibilities, reporting requirements or status,
subject in each case to a cure right, (iii) the Executive's
annual base salary is reduced or (iv) the Trust relocates
its current headquarters outside the greater metropolitan
Boston area. The Termination Agreements also require that
each Executive provide the Trust with at least six months'
written notice prior to a voluntary cessation of employment
with the Trust that does not qualify for payment of a
termination fee.
A "change of control" as defined in the Termina-
tion Agreements will have occurred if, (i) after the effec-
tive date of the Termination Agreements, any person (as such
term is used in the Exchange Act) becomes a beneficial owner
directly or indirectly of securities representing 25% or
more of the combined voting power of the then outstanding
voting securities of the Trust or (ii) a merger, consoli-
dation, a sale of all or substantially all of the assets of
the Trust or contested election of Trustees, or any combina-
tion of the foregoing, occurs and within two years after the
occurrence of any of the foregoing, the individuals who are
Trustees (excluding any employee of the Trust) immediately
prior thereto shall cease to constitute a majority of the
Board of Trustees of the Trust or the Board of Trustees or
Directors of the Trust's successor.
No payments are due under a Termination Agreement
in respect of any termination occurring after the fifth
anniversary of the effective date thereof (October 19,
1992).
Board Of Trustee Interlocks and Insider Participation
During fiscal 1994 the Trust's Compensation
Committee was composed of three Outside Trustees, and made
compensation decisions regarding the executive officers of
the Trust subject, in the case of Robert M. Melzer,
President and Chief Executive Officer of the Trust, to
ratification by the full Board of Trustees. Although Mr.
Melzer is a member of the Board of Trustees, he does not
participate in the Board's discussions regarding his
compensation. John A. Cervieri Jr. is the former Managing
Trustee and Chief Executive Officer of the Trust.
Mr. Cervieri currently serves as the Managing Trustee of the
Trust and does participate in the Board's discussions
regarding Mr. Melzer's compensation. In addition,
Messrs. Melzer and Cervieri are principals of PCA
Institutional Advisors ("PCAIA"), an affiliate of the
Advisor which has entered into an agreement with the Trust
described below. See "Certain Relationships and Related
<PAGE>
Page 16
Transactions." Finally, Mr. Leinhardt is affiliated with an
entity which received payments from the Trust in fiscal 1994
which are described below. See "Certain Relationships and
Related Transactions." Mr. Leinhardt participated in the
Board's compensation discussions concerning Mr. Melzer
during fiscal 1994.
Compensation Committee's Report on Compensation
The Trust had a standing Compensation Committee
during fiscal 1994 and, accordingly, decisions regarding the
compensation of the executive officers were made by the
Compensation Committee subject, in the case of Robert M.
Melzer, President and Chief Executive Officer of the Trust,
to ratification by the full Board of Trustees. Mr. Melzer
did not participate in discussions regarding his own
compensation.
During fiscal 1994, the compensation of an
executive officer of the Trust includes cash compensation
consisting of base salary plus bonuses (if any), and
participation in certain benefit plans generally available
to employees of the Trust such as the Trust's 401(k) plan,
health insurance and stock options. The Compensation
Committee fixed the annual salary of, and awarded cash
bonuses to, the executive officers of the Trust subject, in
the case of Robert M. Melzer, President and Chief Executive
Officer of the Trust, to ratification by the full Board of
Trustees.
Executive officers of the Trust also are eligible
to participate in the Trust's Employee Stock Option Plan.
One of the purposes of the Plan is to link a significant
portion of executive officers' total pay to the Trust's
long-term share performance. The Plan provides key
employees, including the executives listed in the Summary
Compensation Table, with incentives that are contingent upon
long-term increases in the Trust's Common Share price.
During fiscal 1994, the Compensation Committee awarded stock
options to Mr. Melzer and all of the Trust's other executive
officers. The options granted by the Compensation Committee
to each executive officer vest over a five-year period
provided such executive remains employed by the Trust and,
accordingly, are also an incentive for executives to remain
at the Trust.
In establishing officers' salaries and bonuses for
the 1994 fiscal year, the Compensation Committee examined
both the base salaries and bonuses such persons were being
paid by the Trust and the compensation paid to officers by
public companies with market capitalizations similar to the
Trust, primarily other publicly-traded real estate
investment trusts. In addition, the Compensation Committee
<PAGE>
Page 17
generally seeks to link the compensation paid to the
executive officers of the Trust to the performance of the
Trust and, for certain executive officers, the performance
of Trust investments for which they have responsibility.
Specifically, the indicators of corporate performance which
the Committee relied upon in making such decisions were the
achievement of Trust and individual investment projections
and budgets, success in leasing owned properties,
consummation of targeted dispositions of Trust investments
as well as the consideration received by the Trust from the
purchasers in connection with such dispositions and the
individual efforts and accomplishments of each executive
officer in achieving such objectives.
With regard to Mr. Melzer's salary and bonus
during fiscal 1994, the Compensation Committee considered
all of the indicia of performance that it considered for the
other executive officers of the Trust. The Compensation
Committee took into consideration the salaries and bonuses
being paid to chief executive officers of public companies
with market capitalizations similar to the Trust, primarily
other publicly-traded real estate investment trusts and the
ability of Mr. Melzer to work effectively with the Trustees
and to direct the overall activities and performance of the
other officers and employees of the Trust. The Compensation
Committee also focused on the following significant
improvements in the Trust's affairs brought about under Mr.
Melzer's stewardship during the prior year: (i) the
improvement in the Trust's liquidity as exemplified by the
reduction in its bank borrowings from $22,300,000 at July
31, 1992 to $16,530,000 at July 31, 1993 and an agreement by
the bank that funds could be utilized to redevelop
Loehmann's Fashion Island; (ii) the continuation of a major
redevelopment of Loehmann's Fashion Island with an
improvement in leasing from 63% at July 1992 to 80% at
July 31, 1993; (iii) the sale of Lakeside Apartments for
$9,500,000 (resulting in a gain of $7,700,000) and the
placement of a new first mortgage on Eagle Apartments in the
amount of $6,000,000, all of which funds were utilized to
reduce the Trust's bank borrowings; (iv) the resolution of
the Chapter 11 reorganization proceedings filed by a
lessee/mortgagor of an investment partnership of which the
Trust is the general partner for 3,000 apartment units in
Houston, Texas which resulted the resumption of payments of
rent and interest to the investment partnership in November
1993; and (v) the restructuring of several structured
transactions, most notably the resolution of the involuntary
bankruptcy proceeding filed against the lessee of the Trust
at the City Center Holiday Inn in Chicago, Illinois. As
discussed above, the Compensation Committee awarded
Mr. Melzer an additional 25,000 options pursuant to the
Employee Stock Option Plan at the closing price of the
Common Shares on the date of grant, which award the
<PAGE>
Page 18
Compensation Committee considered an appropriate long-term
incentive for Mr. Melzer.
By the Fiscal 1994 Compensation Committee:
Walter M. Cabot
J. Atwood Ives
Edward H. Linde
Performance Graphs
The following line graph compares the yearly
percentage change in the cumulative total shareholder return
on the Trust's Common Shares against the cumulative total
return of the American Stock Exchange Market Index and the
National Association of Real Estate Investment Trust Total
Return Index for Hybrid REITS (the "Hybrid Index") for the
period of five years commencing August 1, 1989 and ended on
the last day of the Trust's last completed fiscal year,
July 31, 1994. The graph assumes an investment of $100 on
August 1, 1989, a reinvestment of dividends and actual
increase of the market value of the Trust's Common Shares
relative to an initial investment of $100. The Trustees
believe that the Hybrid Index is the most relevant index of
a peer group for the Trust because the Trust's portfolio
consists of wholly-owned properties, structured investments
and mortgages.
[Performance Graph filed with Securities
and Exchange Commission under Form SE]
The following line graph utilizes the same indices
as those utilized in the graph shown above, except that the
graph set forth below shows such information for the period
July 31, 1992 through July 31, 1994. The Trust internalized
its management on August 1, 1992.
[Performance Graph filed with Securities
and Exchange Commission under Form SE]
The Trust believes the information provided in the
above two performance graphs has only limited relevance to
an understanding of the Trust's compensation policies during
the indicated period as the Trust believes that the graph
does not reflect all matters appropriately considered by the
Trust in developing its compensation strategy.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the internalization of the
Trust's management, the Trust and PCAIA (of which Messrs.
Cervieri and Melzer, and two former officers of the Trust
<PAGE>
Page 19
and members of their families are principals), reached an
agreement pursuant to which the Trust, effective as of
August 1, 1992, assumed day-to-day responsibility for
rendering services under advisory agreements (the "Advisory
Agreements") between PCAIA and four investment partnerships
(Property Capital Midwest Associates, L.P., PCA Southwest
Associates Limited Partnership, PCA Canyon View Associates
Limited Partnership and PCA Crossroads Associates, Ltd.) in
which the Trust is a general partner (referred to collec-
tively as the "Subject Partnerships") and an advisory
agreement with respect to a loan participation in which the
Trust serves as the lead lender (referred to as the "Lisle
Participation"). The requisite approvals of the limited
partners in the Subject Partnerships and participants in the
Lisle Participation were obtained and the Trust assumed the
duties under the Advisory Agreements.
In return for the Trust is taking over from PCAIA
the management services for the Subject Partnerships and the
Lisle Participation, the Trust receives annually the first
$150,000 (which amount generally corresponded to the addi-
tional expenses incurred by the Trust in the performance of
such tasks) payable pursuant to the Advisory Agreements plus
50% of additional amounts payable pursuant to the Advisory
Agreements; the Trust's share of such additional amounts
aggregated $140,209 in fiscal 1994. PCAIA received the
remaining 50% of such payments in excess of $150,000.
Excluded from the foregoing arrangement is the termination
fee payable pursuant to the PCA Crossroads Associates, Ltd.
("Crossroads") advisory agreement, which fee will be payable
solely to PCAIA.
Commencing on August 1, 1997, the Trust may termi-
nate the foregoing sharing arrangement and thereby receive
100% of all payments under the Advisory Agreements (other
than the termination fee payable pursuant to the Crossroads
advisory agreement) by paying PCAIA an amount (the "Buy-Out
Amount") equal to three times the average of the annual
payments received by PCAIA under such sharing arrangement
during the two prior fiscal years, calculated, however,
without reference to payments attributable to properties
sold or otherwise disposed of during such fiscal years. The
Buy-Out Amount is payable by the Trust in three annual
installments, in arrears, with interest accruing on the
unpaid principal amount of such payment at the prime rate of
the Trust's primary bank lender. The Buy-Out Amount is
reduced in the event that properties are sold or otherwise
disposed of during the three years over which such amount is
payable.
During fiscal 1994 the Trust and Property Capital
Advisors, Inc. and its affiliates terminated their agreement
to share office space and each party paid the expenses
<PAGE>
Page 20
(including rent) associated with its occupancy of such space
based upon the percentage of space occupied by each party
and for the applicable periods of time.
During fiscal 1994, the Trust incurred legal fees
in the amount of $392,000 (exclusive of additional amounts,
if any, paid by the Trust's lessees and borrowers) with the
law firm of Paul, Weiss, Rifkind, Wharton & Garrison, of
which Walter F. Leinhardt, Secretary and Trustee of the
Trust, is a partner.
II. APPROVAL OF AMENDED AND RESTATED DEFERRED STOCK PLAN
FOR NON-EMPLOYEE TRUSTEES ("TRUSTEE DEFERRED
STOCK PLAN")
The Trust historically has had in effect a
deferred compensation plan for non-employee Trustees (the
"Deferred Compensation Plan") pursuant to which a Trustee
could elect, on an annual basis, to have the fees that would
otherwise be payable in cash to the Trustee credited to an
account for the Trustee's benefit. The fees would
thereupon, at the Trustee's election, earn income at a rate
equivalent to the return on Common Shares (i.e., "phantom
stock") or based upon negotiable three-month Certificates of
Deposit. The principal purpose of the Deferred Compensation
Plan is to promote the long-term growth and financial
success of the Trust by establishing a greater identity of
interest between the Trust's non-employee Trustees and its
shareholders. By agreeing to forego the payment of
Trustee's fees in cash, a Trustee that participates in the
Plan demonstrates a commitment to the long-term creation of
shareholder value.
During fiscal 1994, the Trustees determined that
the Deferred Compensation Plan should be modified in several
respects and should be submitted, as so modified, for
shareholder approval. The primary reason for modifying the
Deferred Compensation Plan was that, under its original
structure, the Trust would have been obligated to make
substantial cash payments to Trustees who elected to defer
their fees upon the termination of their services with the
Trust. In addition, under the existing Deferred
Compensation Plan, as the price of the Trust's Common Shares
rises, the cash required ultimately to pay benefits to the
Trustees increases correspondingly. In order to alleviate
the risk that the Trust could be required to make a
significant cash outlay to satisfy the Trust's obligations
under the Deferred Compensation Plan, the Trustees
determined that the Plan should be modified such that the
fees which a participating Trustee would otherwise be paid
in cash would instead be "invested" in "share units" and
ultimately paid to such Trustee in Common Shares.
<PAGE>
Page 21
Under the proposed Trustee Deferred Stock Plan, to
the extent fees are deferred by a Trustee, share units are
allocated to each such Trustee's account based upon the
closing price for the Common Shares on the American Stock
Exchange as of the date the fees would have been earned.
Share units also are allocated to reflect dividends that
would have been paid on such number of Common Shares
corresponding to the number of share units in a Trustee's
account. Payments to a Trustee under the proposed Trustee
Deferred Stock Plan (which may only be made upon death,
disability or ceasing to serve as a Trustee) are to be made
in the form of Common Shares based on the number of share
units allocated to such Trustee.
There are 250,000 Common Shares available under
the Trustee Deferred Stock Plan, which may be authorized and
unissued shares, treasury shares or shares purchased by, or
on behalf of, the Trust in open-market transactions. Under
certain circumstances, the number of Common Shares issuable
under the Trustee Deferred Stock Plan and the share units
allocable to the participating Trustees will be subject to
anti-dilution adjustments. The Trust has established a
separate trust to hold assets set aside to provide benefits
under the Trustee Deferred Stock Plan, but to date has not
funded any obligations to the Trustees under the Trustee
Deferred Stock Plan. The Trustee Deferred Stock Plan will
be effective only upon approval by the Trust's shareholders.
If the Trust's shareholders do not approve the Trustee
Deferred Stock Plan, the Trust intends to continue to offer
the original Deferred Compensation Plan.
For calendar 1994, all of the non-employee
Trustees have elected to participate in the Trustee Deferred
Stock Plan with respect to all fees payable to them.
See Exhibit A hereto for the full text of the
Trustee Deferred Stock Plan.
The affirmative vote of majority of the votes cast
by holders of Common Shares at the meeting is required for
approval of the Trustee Deferred Stock Plan. The Trustees
recommend that the Trust's shareholders vote FOR the Trustee
Deferred Stock Plan.
New Plan Benefits Table
The following table identifies the number of share
units that were allocated to Trustees of the Trust, subject
to approval of the shareholders of the Trust of the Trustee
Deferred Stock Plan. The table reflects only those share
units that have been allocated, subject to shareholder
<PAGE>
Page 22
approval, prior to the date hereof. All share units
represent fees which have already been earned by Trustees
which were deferred at the election of such Trustees plus
dividends payable on such share units. Pursuant to the
terms of the Trustee Deferred Stock Plan the Trustees who
elect to participate in the plan will exchange the cash
payments due such Trusteees for services rendered to the
Trust (an aggregate of $695,512 at July 31, 1994) for Common
Shares following termination of service as a Trustee. Each
such unit represents the right to receive one Common Share.
NEW PLAN BENEFITS
Property Capital Trust
Trustee Deferred Stock Plan
Number of
Common Shares
Dollar Value Underlying
Name and Position ($)(1) Share Units
- ----------------- ------------- --------------
Trustees as a Group $695,512 118,385
- -------------------------
(1) Based upon a fair market value of $5.875 per share, which was the
closing price for the Common Shares on the AMEX on July 31, 1994.
III. APPROVAL OF THE PROPERTY CAPITAL TRUST 1994
STOCK OPTION PLAN FOR NON-EMPLOYEE TRUSTEES
("TRUSTEE STOCK OPTION PLAN")
Upon reviewing current industry compensation
practices and to secure and retain the services of qualified
Trustees, in September 1994, it was recommended, and the
Board of Trustees voted to adopt, subject to shareholder
approval, the Trustee Stock Option Plan. The following is a
summary of the Trustee Stock Option Plan. See Exhibit B
hereto for the full text of the Plan.
The Trustee Stock Option Plan provides for the
grant of non-qualified stock options ("NQOs") to each
Trustee who is not an employee of the Trust or any of its
affiliates (8 persons at October 11, 1994) for the purchase
of 4,000 Common Shares upon the election or re-election of
such Trustee at an annual meeting of shareholders (beginning
with the Trust's 1994 Annual Meeting). The exercise price
of options will be equal to the Fair Market Value (as
defined in the Trustee Plan) of the underlying Common Shares
on the date of grant. The maximum number of Common Shares
<PAGE>
Page 23
that may be issued upon the exercise of options granted
under the Trustee Stock Option Plan is 100,000, subject to
adjustment (as provided in the Trustee Stock Option Plan).
The Trustee Stock Option Plan will be self administered to
the extent required by Rule 16b-3 under the Exchange Act
("Rule 16b-3"). Options become exercisable on the day
immediately preceding the next annual meeting of
shareholders to occur following the date of grant, except in
the event of death, disability or a Change of Control (each
as defined in the Trustee Stock Option Plan) occurring prior
to such annual meeting.
The Trustee Stock Option Plan has standard anti-
dilution provisions. The exercise price of options granted
under the Trustee Stock Option Plan will also be reduced
dollar-for-dollar (but in no event below $1.00) if in any
quarter the Trust makes a distribution on its Common Shares
which exceeds the sum of (i) "Income before Gains (Losses)
from Real Estate Investments and Extraordinary Item" and
(ii) "Depreciation", or the successor categories for such
items, as shown on the Trust's financial statements for such
quarter. Options expire fifteen years from the date of
grant or five years following death or Disability or
termination of the optionee's services for any reason other
than for "cause" (as defined in the Trustee Stock Option
Plan).
The Common Shares purchased upon the exercise of an
option granted under the Trustee Stock Option Plan are to be
paid for: (i) in cash, check or money order payable to the
order of the Trust or (ii) through the delivery of other
Common Shares having an aggregate fair market value equal to
the total exercise price of the option being exercised.
See "Federal Income Tax Consequences" for a
discussion of the tax consequences of NQOs.
The affirmative vote of a majority of the votes
cast by holders of Common Shares at the meeting is required
for approval of the Trustee Stock Option Plan. The Trustees
recommend that the Trust's shareholders vote FOR the Trustee
Stock Option Plan.
Federal Income Tax Consequences
The following summary generally describes the principal
federal (and not state and local) income tax consequences of
options granted under the Trustee Stock Option Plan. It is
general in nature and is not intended to cover all tax
consequences that may apply to a particular optionee or the
Trust. The provisions of the Code and the regulations
<PAGE>
Page 24
thereunder relating to these matters are complicated and
their impact in any one case may depend upon the particular
circumstances. Each holder of an option should consult his
or her own accountant, legal counsel or other financial
advisor regarding the tax consequences of participation in
the Trustee Stock Option Plan. This discussion is based on
the Code as currently in effect.
No income will generally be recognized by the optionee
at the time the option is granted.
Generally, on exercise of an NQO, the amount by which
the fair market value of the shares of the common stock
underlying the options on the date of exercise exceeds the
purchase price of such shares will be taxable to the
optionee as ordinary income, and will be deductible for tax
purposes by the issuer in the year in which the optionee
recognizes the ordinary income. The disposition of shares
acquired upon exercise of an NQO ordinarily will result in
long-term or short-term capital gain or loss (depending on
the applicable holding period) in an amount equal to the
difference between the amount realized on such disposition
and the sum of the purchase price and the amount of ordinary
income recognized in connection with the exercise of the
NQO.
Special rules may apply with respect to optionees who
are reporting persons under Section 16 of the Exchange Act.
If an option is exercised through the use of stock of
the issuer previously owned by the optionee, such exercise
generally will not be considered a taxable disposition of
the previously owned shares and thus no gain or loss will be
recognized with respect to such shares upon such exercise.
IV. APPROVAL OF AMENDMENTS TO THE PROPERTY
CAPITAL TRUST 1992 STOCK OPTION PLAN
("EMPLOYEE STOCK OPTION PLAN")
The Employee Stock Option Plan was adopted by the
Board of Trustees and approved by the shareholders in
November 1992. Subject to adjustment, an aggregate of
250,000 shares of Common Stock were reserved for issuance
under the Employee Stock Option Plan, of which options for
171,350 Common Shares have been granted. Thus, prior to the
approval of the proposed amendments to the Employee Stock
Option Plan described below, options to purchase 76,650
Common Shares may be issued under the Employee Stock Option
Plan.
<PAGE>
Page 25
The Board of Trustees has adopted, subject to
shareholder approval, amendments to the Employee Stock
Option Plan to: (i) increase by 150,000 shares to 400,000
shares the total number of Common Shares available for award
thereunder; (ii) provide for immediate vesting of stock
options upon the occurrence of a Change of Control (as
defined below) and (iii) change the name of the Employee
Stock Option Plan to the "Property Capital Trust 1992
Employee Stock Option Plan."
The Board of Trustees has proposed the amendment to
increase the number of Common Shares available for award
because only 76,650 Common Shares remain available for grant
under the Employee Stock Option Plan and additional shares
are needed in order to continue to enable the Trust to
provide stock-based incentives to employees in order to
retain the services of, and motivate, key employees.
The Board has proposed the amendment to provide for the
immediate vesting of outstanding options upon the occurrence
of a "Change of Control" in order to provide employees with
the certainty that all of their options may be exercised in
the event the Trust engages in an extraordinary transaction
of the type described below. The Employee Stock Option Plan
currently provides for vesting in such circumstances at the
discretion of the Board of Trustees. A "Change of Control"
is defined in the Employee Stock Option Plan to have
occurred if:
(i) after the effective date of the Employee
Stock Option Plan, any "person" (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (other
than the Trust or any employee benefit plan of the
Trust), becomes a beneficial owner directly or
indirectly of securities representing 25% or more of
the combined voting power of the then outstanding
voting securities of the Trust; or
(ii) a merger, consolidation, sale of all or
substantially all of the assets of the Trust or
contested election of Trustees or directors, or any
combination of the foregoing, occurs and within two
years of the occurrence of any of the foregoing, the
individuals who were Trustees of the Trust immediately
prior thereto (other than any person employed by the
Trust) shall cease to constitute a majority of the
Board of Trustees of the Trust or of the Board of
Trustees or Directors of its successor by a merger,
consolidation, sale of assets or similar event.
The Board has proposed the amendment to change the name
of the Employee Stock Option Plan to the "Property Capital
<PAGE>
Page 26
Trust 1992 Employee Stock Option Plan" to clarify that the
Employee Stock Option Plan is available only to employees of
the Trust and to differentiate it from the Trustee Stock
Option Plan.
The following is a summary of the Employee Stock Option
Plan. See Exhibit C hereto for the full text of the
Employee Stock Option Plan, as proposed to be amended.
The Employee Stock Option Plan is administered by the
Compensation Committee (the "Committee") of the Board of
Trustees, which consists of two or more members of the Board
of Trustees, appointed by the Trustees, each of whom is a
"disinterested person" within the meaning of Rule 16b-3.
The Committee has the authority, subject to the terms
of the Employee Stock Option Plan, to determine when and to
whom to make grants under the Employee Stock Option Plan,
the number of shares to be covered by the grants and the
terms, conditions, form and content of incentive options and
nonqualified options offered pursuant to the Employee Stock
Option Plan, to interpret the Employee Stock Option Plan and
to amend and rescind rules and regulations relating to the
Employee Stock Option Plan. Participation in the Employee
Stock Option Plan is limited to key employees of the Trust
and its subsidiaries who are selected from time to time by
the Committee. In determining the employees to whom options
are granted and the number of shares to be covered by each
such option, the Committee takes into consideration the
employee's present and potential contribution to the success
of the Trust and its subsidiaries and such other factors as
the Committee may deem proper and relevant. As of
October 20, 1994, the Trust and its subsidiaries had an
aggregate of 14 employees, 6 of whom are executive officers.
Any person who would own, directly or indirectly,
immediately after the granting of an option, more than 10%
of the total combined voting power of all classes of stock
of the Trust or its subsidiaries, except as permitted by the
Code, is not to be eligible to receive ISOs (as defined
below) under the Plan.
The Trustees may alter, amend, suspend or terminate the
Plan at any time; provided, however, that no such
alteration, amendment, suspension or termination may
adversely affect the rights of any person under any incen-
tive option or nonqualified option theretofore granted to
him or her without his or her consent.
Under the terms of the Employee Stock Option Plan,
Incentive Stock Options ("ISOs"), within the meaning of
Section 422 of the Code, may be granted to key employees of
the Trust (including Trustees who are also employees), or
its subsidiaries. Nonqualified Stock Options ("NQSOs") may
<PAGE>
Page 27
be granted to key employees (including Trustees who are also
employees) of the Trust or its subsidiaries. To the extent
required by Rule 16b-3, no Trustee may be eligible to
receive any ISOs or NQSOs unless the Committee consists
entirely of "disinterested persons" as defined in Rule 16b-
3.
All grants of ISOs and NQSOs must be evidenced by a
written agreement executed by the Trust and the optionee or
offeree, and which specifies the terms and conditions of the
grant, in accordance with the terms of the Employee Stock
Option Plan. Each ISO granted under the Employee Stock
Option Plan will be exercisable over a period of time
determined by the Committee, but not more than 10 years from
the date of grant. The exercise period for an NQSO may not
exceed 10 years.
The exercise price of an ISO may not be less than the
fair market value of the Common Shares on the date of grant
determined, generally, by reference to the last price of the
sales of the Trust's Common Shares on the exchange where the
Common Shares are listed. The Common Shares are listed on
the American Stock Exchange and on October 7, 1994, the last
reported sale price on such Exchange was $6.125 per share.
Each option is exercisable in full or in part by payment of
the option price in cash or, subject to the Committee's
consent, by Common Shares previously owned. Holders of
options do not have the rights of a shareholder of the Trust
with respect to the Common Shares subject to an option
granted under the Employee Stock Option Plan until a
certificate or certificates for the shares have been
delivered to such option holder.
In the event of a stock split, stock dividend,
reorganization, recapitalization or other change in capital
structure of the Trust, appropriate adjustments may be made
by the Committee in the number, kind or price of shares
subject to outstanding options.
Options may not be assigned or transferred by an
optionee except by will or the laws of descent and distribu-
tion. If an employee who has been granted options is
terminated or resigns his employment with the Trust or its
subsidiaries for any reason other than death, disability or
for cause, all options which are exercisable as of the date
of termination may be exercised for three months following
the date of such termination or resignation. Options which
are not exercisable as of the termination date are
immediately terminated. If the employee resigns or is
terminated for cause, all options held by the optionee
terminate immediately and become void. If the optionee dies
or becomes disabled, all options held, whether or not
otherwise exercisable at the time of death or disability,
<PAGE>
Page 28
may be exercised at any time within one year after the
optionee's death or disability by the optionee, or, in the
event of death, by the executor of the optionee's estate or
the person who acquired the option by bequest or
inheritance. In no case may options be exercised later than
the expiration date stated in the grant.
Nothing set forth in the Employee Stock Option Plan or
in any option shall confer upon any holder of an option the
right to continue in the employment of the Trust or any of
its subsidiaries or affect the right of the Trust or any of
its subsidiaries to terminate the option holder's employment
at any time, subject, however, to the provisions of any
agreement of employment between the Trust or any of its
subsidiaries and the option holder.
Under the applicable provisions of the Code, no tax
will be payable by the recipient of an option at the time of
grant. Upon exercise of an NQSO, the excess, if any, of the
fair market value of the Common Shares with respect to which
the option is exercised over the total option price of such
shares will be treated for Federal tax purposes as ordinary
income. Any gain or loss realized on the sale or exchange
of any shares actually received will be treated as a capital
gain or loss. The Trust will be entitled to deduct the
amount, if any, by which the fair market value on the date
of exercise of the shares with respect to which the option
was exercised exceeds the exercise price.
With respect to an ISO, generally, no taxable gain or
loss will be recognized when the option is exercised. The
spread between the fair market value and the exercise price
will be an item of tax preference for the employee for
purposes of the alternative minimum tax. If the Common
Shares acquired upon the exercise of an ISO are held for at
least one year, any gain or loss realized by the employee
upon their sale will be treated as long-term capital gain or
loss. The Trust will not be entitled to a deduction. If
the Common Shares are not held for the one-year period,
ordinary income will be recognized in an amount equal to the
difference between the amount realized on the sale and the
price paid for the Common Shares to the extent the exercise
price exceeded the grant price. Remaining gain, if any,
would be capital gain. The Trust will be entitled to a
deduction equal to the amount of any ordinary income so
recognized by the employee. If the Common Shares are not
held for the one-year period and the amount realized upon
sale is less than the grant price, such difference will be a
capital loss to the employee.
The affirmative vote of a majority of the votes cast by
holders of Common Shares at the meeting is required for
<PAGE>
Page 29
approval of the amendments to the Employee Stock Option
Plan. The Trustees recommend that the Trust's shareholders
vote FOR the approval of the amendments to the Employee
Stock Option Plan.
V. RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS
At the meeting, shareholders will vote on the
ratification of the appointment of Ernst & Young LLP as the
Trust's independent auditors for fiscal 1995. Ernst & Young
LLP (or its predecessor) has served as the Trust's
independent auditors since the Trust's inception in 1969.
Ernst & Young LLP has no financial interest in the Trust and
has not had any connection with the Trust in the capacity of
promoter, underwriter, trustee, director, officer or
employee.
If the shareholders do not approve the appointment
of Ernst & Young LLP, the Trustees will give consideration
to the appointment of another independent auditor at the
earliest practicable date. A representative of Ernst &
Young LLP will be present at the Annual Meeting to answer
any shareholder questions. The representative will be given
the opportunity to make a statement if he or she desires to
do so.
The Audit Committee of the Trust and the Trustees
recommend that the shareholders vote FOR the ratification of
the appointment of Ernst & Young LLP as independent
auditors.
ANNUAL REPORT; INCORPORATION BY REFERENCE
The Trust's Annual Report on Form 10-K for the
fiscal year ended July 31, 1994 (which contains the Trust's
audited consolidated financial statements) is being mailed
to shareholders together with this Proxy Statement and is
incorporated herein by reference. To the extent this Proxy
Statement has been or will be specifically incorporated by
reference into any filing by the Trust under the Securities
Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, the sections of the Proxy Statement
entitled "Compensation Committee's Report on Compensation"
and "Performance Graphs" shall not be deemed to be so
incorporated unless specifically otherwise provided for in
any such filing.
<PAGE>
Page 30
SUBMISSION OF PROPOSALS FOR 1995 ANNUAL MEETING
The 1995 Annual Meeting of Shareholders is
scheduled to be held on November 29, 1995. In order to be
considered for inclusion in the proxy material for that
meeting, shareholder proposals must be received at the
Trust's offices not later than June 27, 1995.
By Order of the Trustees,
WALTER F. LEINHARDT,
Secretary
Boston, Massachusetts
October 28, 1994
<PAGE>
Exhibit A
PROPERTY CAPITAL TRUST
AMENDED AND RESTATED DEFERRED STOCK PLAN
FOR NON-EMPLOYEE TRUSTEES
1. Purpose
Property Capital Trust, a Massachusetts business
trust (the "Trust"), hereby amends and restates its Deferred
Compensation Plan for Trustees (the "Deferred Compensation
Plan") by adopting the Property Capital Trust Deferred Stock
Plan for Non-Employee Trustees (the Deferred Compensation
Plan, as so amended and restated, referred to herein as the
"Plan"). The purpose of the Plan is to promote the long-
term growth and financial success of the Trust by attracting
and retaining non-employee Trustees of outstanding ability
and assisting the Trust in promoting a greater identity of
interest between the Trust's non-employee trustees and its
stockholders.
The Plan is intended to allow the non-employee
trustees participating in the Plan to be treated as
"disinterested persons" with respect to other stock plans of
the Trust, as defined in Rule 16b-3 ("Rule 16b-3"), adopted
under the Securities Exchange Act of 1934, as amended.
2. Plan Operation
2.1. Administration.
2.1.1 The Plan may be administered by a
committee (the "Committee") appointed by the Board of
Trustees of the Trust (the "Board"), which Committee shall
consist solely of two or more trustees. The members of the
Committee shall be appointed by, and may be changed at any
time and from time to time in the discretion of, the Board.
2.1.2 The Committee shall have the
authority (i) to exercise all of the powers granted to it
under the Plan, (ii) to construe, interpret and implement
the Plan and any Plan agreements executed pursuant to the
Plan, (iii) to prescribe, amend and rescind rules relating
to the Plan, (iv) to make any determination necessary or
advisable in administering the Plan, and (v) to correct any
defect, supply any omission and reconcile any inconsistency
in the Plan.
2.1.3 The determination of the
Committee on all matters relating to the Plan or any Plan
agreement shall be conclusive.
2.1.4 No member of the Committee shall
be liable for any action or determination made in good faith
with respect to the Plan or any award hereunder.
<PAGE>
Page 2
2.1.5 Notwithstanding anything to the
contrary contained herein: (i) unless and until the Board
shall appoint the members of the Committee, the Plan shall
be administered by the Board, and (ii) the Board may, in its
sole discretion, at any time and from time to time, resolve
to administer the Plan. In either of the foregoing events,
the term Committee as used herein shall be deemed to mean
the Board.
3. Eligibility.
Only trustees of the Trust who are not employees
of the Trust or any affiliate of the Trust ("Eligible
Trustees") shall participate in the Plan.
4. Common Shares Subject to the Plan.
4.1. Stock. Awards under the Plan shall be
in the form of common shares, no par value, of the Trust and
any other shares into which such common shares shall
thereafter be changed by reason of any merger,
reorganization, recapitalization, consolidation, split-up,
combination of shares or similar event as set forth in and
in accordance with this Section 4 (the "Shares"). If and to
the extent that the Committee determines that it would be
illegal, impracticable or inadvisable to issue Shares under
the Plan, or to the extent Shares are unavailable, the
Committee shall make any awards otherwise required under the
Plan in cash or such other property as it determines in its
reasonable discretion.
4.2. Shares Available for Awards. Subject to
Section 4.3 (relating to adjustments upon changes in
capitalization), as of any date, the total number of Shares
issuable under the Plan shall be 250,000. Shares that shall
be issuable pursuant to the awards granted under the Plan
shall be authorized and unissued Shares, treasury Shares or
Shares purchased by, or on behalf of, the Trust in open-
market transactions.
4.3. Adjustments. In the event of any
merger, reorganization, recapitalization, consolidation,
sale or other distribution of all or substantially all of
the assets of the Trust, any stock dividend, split, spin-
off, split-up, split-off, distribution of securities or
other property by the Trust, or other change in the Trust's
corporate structure affecting the Shares, the number of
Shares issuable under the Plan and the Share Units (as
defined in Section 5.2) then credited to Accounts (as
defined in Section 5.2) shall be appropriately adjusted as
determined by the Committee in its sole discretion.
<PAGE>
Page 3
5. Elective Deferrals
5.1. Election. Commencing on the effective
date of the Deferred Compensation Plan, each Eligible
Trustee may elect to defer all or part of (i) the annual
cash retainer payable to such Trustee for services as a
member of the Board and its committees (the "Retainer")
and/or (ii) fees payable to such Trustee for meetings of the
Board or committees of the Board ("Meeting Fees"). An
Eligible Trustee may make a deferral election by submitting
an election form (an "Election Form") to the Secretary or
any Assistant Secretary of the Trust, indicating: (i) the
percentage of the Retainer and the percentage of Meeting
Fees that are to be deferred; (ii) the date on which the
commencement of payments of deferred amounts (the
"Distribution Date") should begin, as contemplated by
Section 5.3.1; and (iii) whether distributions are to be
made in a lump sum, installments or a combination thereof.
A deferral election shall become effective with respect to
the Eligible Trustee's Retainer accruing on and after the
first day of the calendar year following the date on which
the Election Form is submitted to the Secretary or any
Assistant Secretary (the "Election Date"), and with respect
to the Eligible Trustee's Meeting Fees accruing on and after
the first day of the calendar year following the Election
Date. An election by an Eligible Trustee to defer all or
part of the Retainer and/or Meeting Fees shall continue in
effect until revoked by notice in writing to the Secretary
or any Assistant Secretary of the Trust or unless no longer
permitted by law or regulation (including under Rule 16b-3).
In addition, the receipt of a new Election Form shall
automatically revoke all previously filed Election Forms,
provided, however, that no revocation shall be effective to
make any change with respect to amounts deferred pursuant to
previously filed Election Forms. An Eligible Trustee may
designate, in the Election Form, one or more beneficiaries
to receive any distributions under the Plan upon the death
of the Eligible Trustee, and such designation may be changed
at any time by submitting a new designation to the Secretary
or any Assistant Secretary of the Trust, which shall become
effective immediately upon receipt by the Secretary or such
Assistant Secretary.
5.2. Share Unit Deferral. The Eligible
Trustee's deferred Retainer and Meeting Fees (the "Deferred
Amount") shall be credited to an account (an "Account") in
units which are equivalent in value to Shares ("Share
Units"). The Deferred Amount allocated to the Account shall
be credited to the Account as of the first business day of
the month following the month during which the Eligible
Trustee otherwise would have become entitled to payment of
the Retainer or Meeting Fees, as the case may be, and the
number of Share Units credited to such Account shall be an
<PAGE>
Page 4
amount equal to the result obtained by dividing (i) the
Deferred Amount allocated to the Account by (ii) the Fair
Market Value of a Share on the last business day of the
month in which the Eligible Trustee otherwise would have
become entitled to payment of such Retainer or Meeting Fees,
as the case may be. If Share Units exist in an Eligible
Trustee's Account on a dividend record date for the Trust's
Shares, the Account shall be credited, on the dividend
payment date, with an additional number of Share Units equal
to (i) the product of (A) the cash dividend paid on one
Share and (B) the number of Share Units in the Account on
the dividend record date, (ii) divided by the Fair Market
Value of a Share on the dividend payment date.
5.3. Distributions.
5.3.1 Distribution Date. Each Eligible
Trustee shall designate on the Election Form one of the
following dates as a Distribution Date with respect to the
Deferred Amount credited to the Eligible Trustee's Account
thereafter: (i) the first day of the calendar month
following the date of the Eligible Trustee's death; (ii) the
first day of the calendar month following the date of
termination of service or retirement of an Eligible Trustee
as a member of the Board of Trustees of the Trust; (iii) the
first day of a calendar month following an Eligible
Trustee's Disability (as defined in Section 7); or (iv) the
earliest to occur of (i), (ii) or (iii).
5.3.2 Distribution Method. Distributions
shall be made from the Eligible Trustee's Account in the
form of whole Shares and cash representing any fractional
interest in a Share in a lump sum or in annual installments
not to exceed ten, as elected by the Eligible Trustee. If
an Eligible Trustee receives a distribution from his Account
on an installment basis, amounts remaining in such Account
before payment shall continue to be subject to the last
sentence of Section 5.2.
6. Fair Market Value
"Fair Market Value" shall mean, with respect to
each Share for any day:
6.1. if the Shares are listed for trading on
the American Stock Exchange, the closing price, regular way,
of the Shares as reported on the American Stock Exchange, or
if no such reported sale of the Shares shall have occurred
on such date, on the next preceding date on which there was
such a reported sale, or
6.2. if the Shares are not so listed, but
are listed on another national securities exchange or
<PAGE>
Page 5
authorized for quotation on the National Association of
Securities Dealers Inc.'s NASDAQ National Market System
("NASDAQ/NMS"), the closing price, regular way, of the
Shares on such exchange or NASDAQ/NMS, as the case may be,
on which the largest number of Shares have been traded in
the aggregate on the preceding twenty trading days, or, if
no such reported sale of the Shares shall have occurred on
such date on such exchange or NASDAQ/NMS, as the case may
be, on the next preceding date on which there was such a
reported sale on such exchange or NASDAQ/NMS, as the case
may be, or
6.3. if the Shares are not listed for
trading on a national securities exchange or authorized for
quotation on NASDAQ/NMS, the average of the closing bid and
asked prices as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or,
if no such prices shall have been so reported for such date,
on the next preceding date for which such prices were so
reported.
7. Definition of Disability
"Disability" shall mean, with respect to any
Eligible Trustee, any condition which causes any Eligible
Trustee to be unable to substantially perform his services
as a Trustee of the Trust for a period of three consecutive
months or for an aggregate of five months within any 12
month period.
8. Issuance of Certificates
8.1. Restrictions on Transferability. All
Shares delivered under the Plan shall be subject to such
stop-transfer orders and other restrictions as the Trust may
deem advisable or legally necessary under any laws,
statutes, rules, regulations and other legal requirements,
including, without limitation, those of any stock exchange
upon which the Shares are then listed and any applicable
federal, state or foreign securities law.
8.2. Compliance with Laws. Anything to the
contrary herein notwithstanding, the Trust shall not be
required to issue any Shares under the Plan if, in the
opinion of legal counsel to the Trust, the issuance and
delivery of such Shares would constitute a violation by the
Eligible Trustee or the Trust of any applicable law or
regulation of any governmental authority, including, without
limitation, federal and state securities laws, or the
regulation of any stock exchange on which the Trust's
securities may then be listed. If and to the extent that
the Committee determines that it would be illegal,
impracticable or inadvisable to issue Shares under the Plan,
<PAGE>
Page 6
or to the extent Shares are unavailable, the Committee shall
make any distributions otherwise required under the Plan in
cash or such other property as may be reasonably acceptable
to the distributee.
9. Withholding Taxes
The Trust shall require as a condition of delivery
of any Shares to an Eligible Trustee that such Trustee remit
an amount sufficient to satisfy all foreign, federal, state,
local and other governmental withholding tax requirements
relating thereto (if any) and any or all indebtedness or
other obligation of the Eligible Trustees to the Trust.
10. Plan Amendments and Termination
The Board of Trustees of the Trust may suspend or
terminate the Plan at any time and may amend it at any time
and from time to time, in whole or in part, provided that no
amendment or termination may adversely affect any rights of
any Trustee that has accrued prior to the date of such
amendment or termination, and provided, further, that any
amendment for which shareholder approval is required by law
or in order to maintain continued qualification of the Plan
under Rule 16b-3 shall not be effective until such approval
has been obtained. Upon termination of the Plan, the Board
shall distribute to each participant in the Plan the entire
amount of such participant's Account in the form of whole
Shares and cash representing any fractional interest in a
Share in a lump sum.
11. Listing, Registration and Legal Compliance
If the Committee shall at any time determine that
any Consent (as hereinafter defined) is necessary or
desirable as a condition of, or in connection with, the
granting of any award under the Plan, the issuance of Shares
or other rights hereunder or the taking of any other action
hereunder (each such action being hereinafter referred to as
a "Plan Action"), then such Plan Action shall not be taken,
in whole or in part, unless and until such Consent shall
have been effected or obtained. The term "Consent" as used
herein with respect to any Plan Action means (i) the
listing, registration or qualification of any Shares issued
under the Plan on any securities exchange or under any
foreign, federal, state or local law, rule or regulation,
(ii) any and all consents, clearances and approvals in
respect of a Plan Action by any governmental or other
regulatory bodies or (iii) any and all written agreements
and representations by an Eligible Trustee with respect to
the disposition of Shares or with respect to any other
matter which the Committee shall deem necessary or desirable
in order to comply with the terms of any such listing,
<PAGE>
Page 7
registration or qualification or to obtain an exemption from
the requirement that any such listing, qualification or
registration be made.
12. Right of Discharge Reserved
Nothing in the Plan shall confer upon any Eligible
Trustee the right to continue in the service of the Trust or
affect any right that the Trust may have to terminate the
service of such Eligible Trustee.
13. Other Payments or Awards
Nothing contained in the Plan shall be deemed in
any way to limit or restrict the Trust, any affiliate or the
Board from making any award or payment to any person under
any other plan, arrangement or understanding, whether now
existing or hereafter in effect. Any awards and payments
made under this Plan shall constitute a special incentive
payment to the Eligible Trustee and shall not be taken into
account in computing the amount of compensation of the
Eligible Trustee for the purposes of determining any
pension, retirement, profit sharing, bonus, life insurance
or other benefit plan of the Trust or any affiliate or
(ii) any agreement between the Trust or any affiliate, on
the one hand, and the Eligible Trustee, on the other hand,
except as such plan or agreement may otherwise expressly
provide.
14. Rights Not Subject to Alienation, Etc.
An Eligible Trustee's rights to benefit payments
under the Plan are not subject in any manner to
anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment by the
creditors of the Eligible Trustee or his beneficiary.
15. Rights as a Shareholder
An Eligible Trustee shall not, by reason of any
rights under the Plan, have any rights as a shareholder of
the Trust with respect to the Shares until such Shares have
been delivered to such Eligible Trustee.
16. Unfunded Plan
The Plan shall be unfunded and shall not create
(or be construed to create) a trust or a separate fund or
funds. The Plan shall not establish any fiduciary
relationship between the Trust and any Eligible Trustee or
other person and shall constitute a mere promise by the
Trust to make benefit payments in the future. The Trust
may, in its sole discretion, establish a separate trust to
<PAGE>
Page 8
hold assets set aside to provide benefits under the Plan,
provided that no Eligible Trustee shall have any interest in
the assets of any such trust and the assets of such trust
shall be available to pay claims of the Trust's general
creditors on such terms and conditions as such trust may
provide. To the extent any person holds any rights by
virtue of a pending grant or deferral under the Plan, such
rights shall be no greater than the rights of an unsecured
general creditor of the Trust.
17. Governing Law
The Plan is deemed adopted, made and delivered in
Massachusetts and shall be governed by the laws of the
Commonwealth of Massachusetts applicable to agreements made
and to be performed entirely within such commonwealth.
18. Severability
If any part of the Plan is declared by any court
or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not invalidate any portion
of the Plan not declared to be unlawful or invalid. Any
Section or part of a Section so declared to be unlawful or
invalid shall, if possible, be construed in a manner which
will give effect to the terms of such Section or part of a
Section to the fullest extent possible while remaining
lawful and valid.
19. Notices
All notices and other communications hereunder
shall be given in writing and shall be personally delivered
against receipt or sent by registered or certified mail,
return receipt requested or by reputable overnight delivery
service. Any notice shall be deemed given on the date of
delivery or of mailing, and if mailed, shall be addressed
(a) to the Trust, at its principal headquarters, and (b) to
an Eligible Trustee, at the Eligible Trustee's principal
residential address last furnished to the Trust. Notices
sent to the Trust shall be sent to Property Capital Trust,
One Post Office Square, 21st Floor, Boston, Massachusetts
02109, Attention: William A. Bonn, Senior Vice President
and Counsel. Either party may, by notice, change the
address to which notice to such party is to be given.
20. Section Headings
The Section headings contained herein are for the
purposes of convenience only and are not intended to define
or limit the contents of said Sections.
<PAGE>
Page 9
21. Effective Date
This amendment and restatement of the Plan shall
become effective as of April 15, 1994 upon approval by the
Trust's shareholders (the "Effective Date").
22. Exculpation
It is understood that the obligations incurred by
the Trust under or with respect to this Plan do not
constitute personal obligations of the Trustees, officers,
employees or shareholders of the Trust, or of any such
Trustees, officers, employees or shareholders, and shall not
create or involve any claim against, or personal liability
on the part of, them or any of them. The Eligible Trustees
agree not to seek recourse against any such Trustees,
officers, employees or shareholders, or any of them or any
their personal assets for satisfaction of any liability
under or with respect to the Plan.
<PAGE>
Exhibit B
PROPERTY CAPITAL TRUST 1994
STOCK OPTION PLAN FOR NON-EMPLOYEE TRUSTEES
Property Capital Trust, a Massachusetts business
trust (the "Trust"), hereby formulates and adopts the
following Stock Option Plan (the "Plan") for Eligible
Trustees of the Trust (as defined below).
1. Purpose. The purpose of the Plan is to
secure for the Trust the benefits of the additional
incentive inherent in the ownership of common shares, no par
value, of the Trust ("Common Shares") by Eligible Trustees
of the Trust and to help the Trust secure and retain the
services of such Eligible Trustees.
2. Administration. The Plan is intended to
allow the Eligible Trustees receiving grants pursuant to it
to be, with respect to other stock plans of the Trust,
"disinterested persons" as defined in Rule 16b-3
("Rule 16b-3"), adopted under the Securities Exchange Act of
1934 (the "Exchange Act"), and, accordingly, is intended to
be self-governing to the extent required by Rule 16b-3. To
this end, the Plan requires no discretionary action by any
administrative body with regard to any transaction under the
Plan. To the extent, if any, that questions of
administration arise, these shall be resolved by the Board
of Trustees of the Trust (the "Board of Trustees"). The
Board of Trustees may, in its discretion, delegate to the
President of the Trust all authority and responsibility to
act pursuant to this Plan. All references to the "Plan
Administrators" in this Plan shall refer to either the Board
of Trustees or the President, depending upon whether the
Board of Trustees has delegated its authority pursuant to
this Section 2.
Subject to the express provisions of the Plan, the
Plan Administrators shall have plenary authority to
interpret the Plan, to prescribe, amend and rescind the
rules and regulations relating to it and to make all other
determinations deemed necessary and advisable for the
administration of the Plan. The determination of the Plan
Administrators shall be conclusive.
3. Common Shares Subject to Options. Subject to
the adjustment provisions of Paragraph 14 below, a maximum
of 100,000 Common Shares may be made subject to options
granted under the Plan. If, and to the extent that, options
granted under the Plan shall terminate, expire or be
canceled for any reason without having been exercised, new
options may be granted in respect of the shares covered by
such terminated, expired or canceled options. The granting
<PAGE>
Page 2
and terms of such new options shall comply in all respects
with the provisions of the Plan.
Common Shares sold upon the exercise of any option
granted under the Plan may be authorized and unissued Common
Shares, issued Common Shares held in the Trust's treasury or
both.
There shall be reserved at all times for sale
under the Plan a number of authorized and unissued Common
Shares, Common Shares held in the Trust's treasury, or both,
equal to the maximum number of shares which may be purchased
pursuant to options granted or that may be granted under the
Plan.
4. Grant of Options.
(1) Awards. If a person is elected or
re-elected as an Eligible Trustee at an annual meeting of
shareholders of the Trust, such person will automatically
receive on the date of such election or re-election an
option to purchase 4,000 Common Shares.
(2) Type of Options. All options granted
under the Plan shall be "nonqualified" stock options subject
to the provisions of section 83 of the Internal Revenue Code
of 1986, as amended (the "Code").
5. Individuals Eligible. Only trustees of the
Trust who are not employees of the Trust or any subsidiary
of the Trust ("Eligible Trustees") shall participate in the
Plan.
A trustee receiving an option pursuant to the Plan
is hereinafter referred to as an "Optionee."
6. Price. The option price of each Common Share
purchasable under any option granted pursuant to the Plan
shall be the Fair Market Value (as defined below) thereof at
the time the option is granted.
For purposes of the Plan, "Fair Market Value" of a
Common Share shall mean the average of the last prices of
the sales of Common Shares on all securities exchanges on
which the Common Shares may at the time be listed, or, if
there have been no sales on any such exchange on such day,
the average of the highest bid and lowest asked prices on
all such exchanges, or, if for any day on which the market
value is being determined the Common Shares are not so
listed, the average of the representative bid and asked
prices quoted in the Nasdaq System, or, if for any day on
which the market value is being determined the Common Shares
are not quoted in the Nasdaq System, the average of the
<PAGE>
Page 3
highest bid and lowest asked prices in the domestic over-
the-counter market as reported by the National Quotation
Bureau, Incorporated, or any similar successor organization.
7. Vesting of Options. Each option granted to
an Optionee hereunder shall become vested and exercisable on
the day immediately preceding the annual meeting of
shareholders next succeeding the date of grant of such
option.
Upon the death or "permanent and total disability"
within the meaning of section 22(e)(3) of the Code
("Disability") of an Eligible Trustee, each option held by
such Optionee which has not theretofore vested and become
exercisable shall immediately vest and become exercisable,
and upon the occurrence of a Change of Control, each option
which has not theretofore vested and become exercisable
shall immediately vest and become exercisable. For purposes
of this paragraph a "Change of Control" shall be deemed to
have occurred if:
(i) after the effective date of this Plan,
any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act (other than the Trust or
any employee benefit plan of the Trust)), becomes a
beneficial owner directly or indirectly of securities
representing 25% or more of the combined voting power
of the then outstanding voting securities of the Trust;
or
(ii) a merger, consolidation, sale of all or
substantially all of the assets of the Trust or
contested election of Trustees or directors, or any
combination of the foregoing occurs and within two
years of the occurrence of any of the foregoing, the
individuals who were Trustees of the Trust immediately
prior thereto (other than any person employed by the
Trust) shall cease to constitute a majority of the
Board of Trustees of the Trust or of the Board of
Trustees or Directors of its successor by a merger,
consolidation, sale of assets or similar event.
All outstanding options, to the extent not vested in
accordance with the foregoing, shall be forfeited on the
date of termination of a Trustee's service as a Trustee of
the Trust.
8. Duration of Options. Notwithstanding any
provision of the Plan to the contrary, the unexercised
portion of any option granted under the Plan shall
automatically and without notice terminate and become null
and void at the time of the earliest to occur of the
following:
<PAGE>
Page 4
a. The expiration of 15 years from the date
on which such option was granted;
b. The expiration of five years from the
date the Optionee's service with the Trust (including
advisory services) terminates other than by reason of a
termination for cause, including termination by reason of
death or Disability; provided, however, that if the
Optionee's service has terminated by reason of Disability
and the Trustee shall die during the five-year period
following termination, the expiration of five years from the
date of the Optionee's death; and
c. The date the Optionee's service with the
Trust shall terminate by reason of "cause" (as hereafter
defined). Termination by reason of "cause" shall mean
termination by reason of participation and conduct during
the performance of services consisting of fraud, felony,
willful misconduct or commission of any act which causes or
may reasonably be expected to cause substantial damage to
the Trust or any of its affiliates.
9. Exercise of Options. An option granted under
the Plan shall be deemed exercised when the person entitled
to exercise the option (i) delivers written notice to the
Trust at its principal business office, directed to the
attention of its Chief Financial Officer, of the decision to
exercise and (ii) concurrently tenders to the Trust full
payment for the shares to be purchased pursuant to such
exercise. Payment for shares with respect to which an
option is exercised may be made in cash, check or money
order or by Common Shares owned by the Optionee for at least
six months prior to exercise.
10. Nontransferability of Options. No option or
any right evidenced thereby shall be transferable in any
manner other than by will or the laws of descent and
distribution, and, during the lifetime of an Optionee, only
the Optionee (or the Optionee's court-appointed legal
representative) may exercise an option.
11. Rights of Optionee. Neither the Optionee nor
the Optionee's executor or administrator shall have any of
the rights of a shareholder of the Trust with respect to the
shares subject to an option until certificates for such
shares shall actually have been issued upon the due exercise
of such option. No adjustment shall be made for any regular
cash dividend for which the record date is prior to the date
of such due exercise and full payment for such shares has
been made therefor.
12. Right to Terminate Service. Nothing in the
Plan or in any option shall confer upon any Optionee the
<PAGE>
Page 5
right to continue in the services of the Trust or affect the
right of the shareholders of the Trust to terminate the
Optionee's service at any time, subject, however, to the
provisions of any agreement between the Trust and the
Optionee.
13. Nonalienation of Benefits. No right or
benefit under the Plan shall be subject to anticipation,
alienation, sale, assignment, hypothecation, pledge,
exchange, transfer, encumbrance or charge, and any attempt
to anticipate, alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be
void. To the extent permitted by applicable law, no right
or benefit hereunder shall in any manner be liable for or
subject to the debts, contracts, liabilities or torts of the
person entitled to such benefits.
14. Adjustment Upon Changes in Capitalization,
etc. In the event of any stock split, stock dividend, stock
change, reclassification, recapitalization or combination of
shares which changes the character or amount of the Common
Shares, prior to exercise of any portion of an option
theretofore granted under the Plan, such option, to the
extent that it shall not have been exercised, shall entitle
the Optionee (or the Optionee's executor or administrator)
upon its exercise to receive in substitution therefor such
number and kind of shares as the Optionee would have been
entitled to receive if the Optionee had actually owned the
stock subject to such option at the time of the occurrence
of such change; provided, however, that if the change is of
such a nature that the Optionee, upon exercise of the
option, would receive property other than shares of stock,
the Board of Trustees shall make an appropriate adjustment
in the option to provide that the Optionee (or the
Optionee's executor or administrator) shall acquire upon
exercise only shares of stock of such number and kind as the
Board of Trustees, in its sole judgment, shall deem
equitable.
In the event that any transaction (other than a
change specified in the preceding paragraph) described in
section 424(a) of the Code affects the Common Shares subject
to any unexercised option, the Board of Trustees of the
surviving or acquiring corporation shall make such similar
adjustment as is permissible and appropriate.
If any such change or transaction shall occur, the
number and kind of shares for which options may thereafter
be granted under the Plan shall be adjusted to give effect
thereto.
In the event the Trust makes a distribution on the
Common Shares in respect of any given fiscal quarter which
<PAGE>
Page 6
exceeds the sum of (i) "Income before Gains (Losses) from
Real Estate Investments and Extraordinary Item" and (ii)
"Depreciation", or the successor categories for such items,
as shown on the Trust's financial statements for such
quarter, the exercise price of outstanding options shall
thereupon be reduced (dollar-for-dollar) by the amount of
any such excess distribution (calculated on a per share
basis); provided, however, that in no event shall the
exercise price be reduced as a result of the adjustments
provided for in this Section 14 to less than $1.00 per
share.
15. Form of Agreements with Optionees. Each
option granted pursuant to the Plan shall be in writing and
shall have such form, terms and provisions, not inconsistent
with the provisions of the Plan, as the Plan Administrators
shall provide for such option.
16. Purchase for Investment. Whether or not the
options and shares covered by the Plan have been registered
under the Securities Act of 1933, as amended, each person
exercising an option under the Plan may be required by the
Trust to give a representation in writing that such person
is acquiring such shares for investment and not with a view
to, or for sale in connection with, the distribution of any
part thereof. The Trust will endorse any necessary legend
referring to the foregoing restriction upon the certificate
or certificates representing any shares issued or
transferred to the Optionee upon the exercise of any option
granted under the Plan.
17. Termination and Amendment of Plan and
Options. Unless the Plan shall theretofore have been
terminated as hereinafter provided, options may be granted
under the Plan, as provided in Paragraph 4 hereof, prior to
the tenth anniversary of the Effective Date (as defined
below) on which date the Plan will expire, except as to
options then outstanding under the Plan. Such options shall
remain in effect until they have been exercised, have
expired or have been canceled.
The Plan may be terminated or amended at any time
by the Board of Trustees; provided, however, that (i) any
such amendment shall comply with all applicable laws and
applicable stock exchange listing requirements, (ii) the
provisions of the Plan with respect to eligibility for
participation or the timing or amount of grants of awards
and the option price shall not be amended more than once
every six months (other than to comport with changes in the
Code or the Employee Retirement Income Security Act of 1974,
as amended, or the regulations thereunder), and (iii) any
amendment for which stockholder approval is required by law
or in order to maintain continued qualification of the Plan
<PAGE>
Page 7
under Rule 16b-3 shall not be effective until such approval
has been obtained.
No termination, modification or amendment of the
Plan, without the consent of the Optionee, may adversely
affect the rights of such person with respect to such
option.
18. Effective Date of Plan. The Plan shall
become effective upon its adoption by the Board of Trustees
(the "Effective Date"), subject, however, to its approval by
the Trust's shareholders within 12 months after the date of
such adoption.
19. Government and Other Regulations. The
obligation of the Trust with respect to options granted
under the Plan shall be subject to all applicable laws,
rules and regulations and such approvals by any governmental
agency as may be required, including, without limitation,
the effectiveness of any registration statement required
under the Securities Act of 1933, as amended, and the rules
and regulations of any securities exchange on which the
Common Shares may be listed.
20. Withholding. The Trust's obligation to
deliver Common Shares in respect of any option granted under
the Plan shall be subject to all applicable federal, state
and local tax withholding requirements. Federal, state and
local withholding tax due upon the exercise of any option,
may be paid in Common Shares (including the withholding of
shares subject to an option).
21. Separability. If any part of the Plan is
declared by any court or governmental authority to be
unlawful or invalid, such unlawfulness or invalidity shall
not invalidate any portion of the Plan not declared to be
unlawful or invalid. Any Paragraph or part of a Paragraph
so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of
such Paragraph or part of a Paragraph to the fullest extent
possible while remaining lawful and valid.
22. Non-Exclusivity of the Plan. Neither the
adoption of the Plan by the Board of Trustees nor the
submission of the Plan to the shareholders of the Trust for
approval shall be construed as creating any limitation on
the power of the Board of Trustees to adopt such other
incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options and the
awarding of stock and cash otherwise than under the Plan,
and such arrangements may be either generally applicable or
applicable only in specific cases.
<PAGE>
Page 8
23. Governing Law. The Plan shall be governed
by, and construed in accordance with, the laws of the
Commonwealth of Massachusetts.
24. Exculpation. It is understood that the
obligations incurred by the Trust under or with respect to
this Plan do not constitute personal obligations of the
Trustees, officers, employees or shareholders of the Trust,
or of any such Trustees, officers, employees or
shareholders, and shall not create or involve any claim
against, or personal liability on the part of, them or any
of them. The Optionees agree to look solely to the assets
of the Trust for satisfaction of any liability of the Trust
under or with respect to the Plan and not to seek recourse
against any such Trustees, officers, employees or
shareholders, or any of them or any their personal assets
for such satisfaction.
<PAGE>
Exhibit C
(Bracketed text to be deleted; underlined text to be added
pursuant to the proposed Amendments)
PROPERTY CAPITAL TRUST
1992 EMPLOYEE STOCK OPTION PLAN
Property Capital Trust, a Massachusetts business
trust (the "Trust"), hereby formulates and adopts the
following 1992 Employee Stock Option Plan (the "Plan") for
--------
key employees of the Trust and its Subsidiaries (as defined
in Paragraph 5).
1. Purpose. The purpose of the Plan is to
secure for the Trust the benefits of the additional
incentive inherent in the ownership of common shares, no par
value, of the Trust ("Common Shares") by selected key
employees of the Trust and its Subsidiaries who, in the
judgment of the Committee (as defined in Paragraph 2), are
important to the success and the growth of the business of
the Trust and its Subsidiaries (as defined in Paragraph 5)
and to help the Trust and its Subsidiaries secure and retain
the services of such employees.
2. Administration. The Plan shall be
administered in a manner consistent with the requirements
for exemptive relief under Rule 16b-3 or its successor
provision under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Plan shall be
administered by a committee (the "Committee") consisting
solely of two or more members of the Board of Trustees of
the Trust (the "Board of Trustees"), each of whom shall be a
"disinterested person", within the meaning of Rule 16b-3
under the Exchange Act. The Committee shall select one of
its members as Chairman and shall make such rules and
regulations as it shall deem appropriate concerning the
holding of its meetings and transaction of its business. A
majority of the whole Committee shall constitute a quorum,
and the act of a majority of the members of the Committee
present at a meeting at which a quorum is present shall be
the act of the Committee. Any member of the Committee may
be removed at any time either with or without cause by
resolution adopted by the Board of Trustees, and any vacancy
on the Committee may at any time be filled by resolution
adopted by the Board of Trustees.
Subject to the express provisions of the Plan, the
Committee shall have plenary authority to interpret the
Plan, to prescribe, amend and rescind the rules and
regulations relating to it and to make all other
determinations deemed necessary and advisable for the
administration of the Plan. The determinations of the
Committee shall be conclusive.
<PAGE>
Page 2
3. Common Shares Subject to Options. Subject to
the adjustment provisions of Paragraph 13 below, a maximum
of 400,000 shares of Common Shares may be made subject to
-------
options granted under the Plan. If, and to the extent that,
options granted under the Plan shall terminate, expire or be
canceled for any reason without having been exercised, new
options may be granted in respect of the shares covered by
such terminated, expired or canceled options. The granting
and terms of such new options shall comply in all respects
with the provisions of the Plan.
Shares sold upon the exercise of any option
granted under the Plan may be shares of authorized and
unissued Common Shares, shares of issued Common Shares held
in the Trust's treasury, or both.
There shall be reserved at all times for sale
under the Plan a number of shares, of either authorized and
unissued shares of Common Shares, shares of Common Shares
held in the Trust's treasury, or both, equal to the maximum
number of shares which may be purchased pursuant to options
granted or that may be granted under the Plan.
4. Grant of Options. The Committee shall have
the authority and responsibility, within the limitations of
the Plan, to determine the employees to whom options are to
be granted, whether the options granted shall be "incentive
stock options" ("Incentive Options"), within the meaning of
section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), or options which are not Incentive
Options ("Nonqualified Options"), the number of shares that
may be purchased under each option and the option price.
Subject to paragraph 6, the option price may be a specified
price, a price subject to adjustment at or prior to exercise
upon the occurrence of specified events or a floating price.
The Committee's determinations under the Plan (including,
without limitation, determinations of the persons to receive
options, and the form, term, provisions, amount and timing
of the grant of such options) need not be uniform and may be
made selectively among persons who are eligible to receive
options under the Plan, whether or not such persons are
similarly situated. In determining the employees to whom
options shall be granted and the number of shares to be
covered by each such option, the Committee shall take into
consideration the employee's present and potential
contribution to the success of the Trust and its
Subsidiaries and such other factors as the Committee may
deem proper and relevant.
<PAGE>
Page 3
5. Individuals Eligible. Options may be granted
to any key employee of the Trust or any of its Subsidiaries.
For purposes of the Plan, a "Subsidiary" of the
Trust shall mean any "subsidiary corporation", as such term
is defined in section 424(f) of the Code. An entity shall
be deemed a Subsidiary of the Trust only for such periods as
the requisite ownership relationship is maintained.
No person who would own, directly or indirectly,
immediately after the granting of an option to such person,
more than 10% of the total combined voting power of all
classes of stock of the Trust or any of its Subsidiaries,
except as permitted by section 422(c)(5) of the Code, shall
be eligible to receive an Incentive Option under the Plan.
An employee receiving an option pursuant to the
Plan is hereinafter referred to as an "Optionee".
6. Price. The option price of each share of
Common Shares purchasable under any Incentive Option granted
pursuant to the Plan shall not be less than the Fair Market
Value (as defined below) thereof at the time the option is
granted. The Committee is hereby given the authority to
determine the price at which any Nonqualified Option may be
granted.
For the purposes of the Plan, the term "Fair
Market Value" of the Shares shall mean (i) if the Shares are
listed on any securities exchange or quoted in the NASDAQ
System or the over-the-counter market on the day for which
the Market Value is being determined, the average of the
last prices of the sales of the Shares on all securities
exchanges on which the Shares may at the time be listed, or,
if there have been no sales on any such exchange on such
day, the average of the highest bid and a lowest asked
prices on all such exchanges, or, if for any day on which
the Market Value is being determined the Shares are not so
listed, the average of the representative bid and asked
prices quoted in the NASDAQ System, or, if for any day on
which the Market Value is being determined the Shares are
not quoted in the NASDAQ System, the average of the highest
bid and lowest asked prices in the domestic over-the-counter
market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization; or (ii)
if at any time the Shares are not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-
counter market on the day for which the Market Value is
being determined, the fair market value of the Shares
determined by the Committee in its sole discretion.
<PAGE>
Page 4
7. Duration of Options. Except as otherwise
provided by the Committee, in its sole discretion, each
option granted hereunder shall become exercisable, in whole
or in part, over a period of time and in such percentages to
be determined by the Committee, but not longer than ten
years; provided, however, that if an Optionee's employment
with the Trust or any Subsidiary shall terminate by reason
of death or "permanent and total disability", within the
meaning of section 422(e)(3) of the Code ("Disability"),
each outstanding option granted to such Optionee shall
become exercisable in full in respect of the aggregate
number of shares covered thereby; provided further, upon the
--------------------------
occurrence of a Change of Control, each option which has not
- ------------------------------------------------------------
theretofore vested and become exercisable shall immediately
- -----------------------------------------------------------
vest and become exercisable. For purposes of this paragraph
- ------------------------------------------------------------
a "Change of Control" shall be deemed to have occurred if:
- ----------------------------------------------------------
(i) after the effective date of this Plan,
-------------------------------------------
any "person" (as such term is used in Sections 13(d)
----------------------------------------------------
and 14(d) of the Exchange Act (other than the Trust or
------------------------------------------------------
any employee benefit plan of the Trust)), becomes a
---------------------------------------------------
beneficial owner directly or indirectly of securities
-----------------------------------------------------
representing 25% or more of the combined voting power
-----------------------------------------------------
of the then outstanding voting securities of the Trust;
-------------------------------------------------------
or
--
(ii) a merger, consolidation, sale of all or
-------------------------------------------------------
substantially all of the assets of the Trust or
-----------------------------------------------
contested election of Trustees or directors, or any
---------------------------------------------------
combination of the foregoing occurs and within two
--------------------------------------------------
years of the occurrence of any of the foregoing, the
----------------------------------------------------
individuals who were Trustees of the Trust immediately
------------------------------------------------------
prior thereto (other than any person employed by the
----------------------------------------------------
Trust) shall cease to constitute a majority of the
--------------------------------------------------
Board of Trustees of the Trust or of the Board of
-------------------------------------------------
Trustees or Directors of its successor by a merger,
---------------------------------------------------
consolidation, sale of assets or similar event.
----------------------------------------------
Notwithstanding any provision of the Plan to the
contrary, the unexercised portion of any option granted
under the Plan shall automatically and without notice
terminate and become null and void at the time of the
earliest to occur of the following:
(a) The expiration of 10 years from the date
on which such option was granted;
(b) The expiration of one year from the date
the Optionee's employment with the Trust or any of its
<PAGE>
Page 5
Subsidiaries shall terminate by reason of Disability;
provided, however, that if the Optionee shall die
during such one-year period, the provisions of
subparagraph (c) below shall apply;
(c) The expiration of one year from the date
of the Optionee's death, if such death occurs either
during employment with the Trust or any of its
Subsidiaries or during the one-year period described in
subparagraph (b) above;
(d) The date the Optionee's employment
with the Trust or any of its Subsidiaries shall
terminate by reason of "cause" (as hereafter defined).
Termination by reason of "cause" shall mean termination
by reason of participation in conduct during employment
consisting of fraud, commission of a felony, willful
misconduct or commission of any act which causes or may
reasonably be expected to cause substantial damage to
the Trust or any of its Subsidiaries;
(e) The expiration of three months from the
date the Optionee's last employment with the Trust or
any of its Subsidiaries shall terminate other than by
reason of death, Disability or termination for cause;
and
(f) In whole or in part, at such earlier
time or upon the occurrence of such earlier event as
the Committee in its discretion may provide upon the
granting of such option.
The Committee may determine whether any given
leave of absence constitutes a termination of employment.
The options granted under the Plan shall not be affected by
any change of employment so long as the Optionee continues
to be an employee of the Trust or any of its Subsidiaries.
8. Exercise of Options. An option granted under
this Plan shall be deemed exercised when the person entitled
to exercise the option (a) delivers written notice to the
Trust at its principal business office, directed to the
attention of its Secretary, of the decision to exercise, (b)
concurrently tenders to the Trust full payment for the
shares to be purchased pursuant to such exercise, and (c)
complies with such other reasonable requirements as the
Committee establishes pursuant to Paragraph 2 of the Plan.
Payment for shares with respect to which an option is
exercised may be made in cash, check or money order and,
<PAGE>
Page 6
subject to the Committee's consent, by Common Shares
previously owned.
9. Nontransferability of Options. No option or
any right evidenced thereby shall be transferable in any
manner other than by will or the laws of descent and
distribution, and, during the lifetime of an Optionee, only
the Optionee (or the Optionee's court-appointed legal
representative) may exercise an option. In the Committee's
discretion, an option may be transferred pursuant to a
"qualified domestic relations order", as defined in section
414(p) of the Code.
10. Rights of Optionee. Neither the Optionee nor
the Optionee's executor or administrator shall have any of
the rights of a shareholder of the Trust with respect to the
shares subject to an option until certificates for such
shares shall actually have been issued upon the due exercise
of such option. No adjustment shall be made for any regular
cash dividend for which the record date is prior to the date
of such due exercise and full payment for such shares has
been made therefor.
11. Right to Terminate Employment. Nothing in
the Plan or in any option shall confer upon any Optionee the
right to continue in the employment of the Trust or any of
its Subsidiaries or affect the right of the Trust or any of
its Subsidiaries to terminate the Optionee's employment at
any time, subject, however, to the provisions of any
agreement of employment between the Trust or any of its
Subsidiaries and the Optionee.
12. Nonalienation of Benefits. No right or
benefit under the Plan shall be subject to anticipation,
alienation, sale, assignment, hypothecation, pledge,
exchange, transfer, encumbrance or charge, and any attempt
to anticipate, alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be
void. To the extent permitted by applicable law, no right
or benefit hereunder shall in any manner be liable for or
subject to the debts, contracts, liabilities or torts of the
person entitled to such benefits.
13. Adjustment Upon Changes in Capitalization,
etc. In the event of any stock split, stock dividend, stock
change, reclassification, recapitalization or combination of
shares which changes the character or amount of Common
Shares prior to exercise of any portion of an option
theretofore granted under the Plan, such option, to the
extent that it shall not have been exercised, shall entitle
<PAGE>
Page 7
the Optionee (or the Optionee's executor or administrator)
upon its exercise to receive in substitution therefor such
number and kind of shares as the Optionee would have been
entitled to receive if the Optionee had actually owned the
stock subject to such option at the time of the occurrence
of such change; provided, however, that if the change is of
such a nature that the Optionee, upon exercise of the
option, would receive property other than shares of stock,
the Committee shall make an appropriate adjustment in the
option to provide that the Optionee (or the Optionee's
executor or administrator) shall acquire upon exercise only
shares of stock of such number and kind as the Committee, in
its sole judgment, shall deem equitable; and, provided
further, that any such adjustment shall be made so as to
conform to the requirements of section 424(a) of the Code.
In the event that any transaction (other than a
change specified in the preceding paragraph) described in
section 424(a) of the Code affects the Common Shares subject
to any unexercised option, the Board of Trustees or
Directors of the surviving or acquiring entity shall make
such similar adjustment as is permissible and appropriate.
If any such change or transaction shall occur, the number
and kind of shares for which options may thereafter be
granted under the Plan shall be adjusted to give effect
thereto.
[14. Reorganization. In the event that the Trust
is merged or consolidated with another entity, or in the
event that all or substantially all of the assets of the
Trust are acquired by another entity, or in the event of a
reorganization or liquidation of the Trust (each such event
being hereinafter referred to as a "Reorganization Event")
or in the event that the Board of Trustees shall propose
that the Trust enter into a Reorganization Event, the
Committee may, in its discretion, (i) by written notice to
each Optionee, provide that his options will be terminated
unless exercised within 30 days (or such longer period as
the Committee shall determine in its sole discretion) after
the date of such notice (without acceleration of the
exercisability of such options); and (ii) advance the date
or dates upon which any or all outstanding options shall
become exercisable. Whenever deemed appropriate by the
Committee, any action referred to in this Paragraph 14 above
may be made conditional upon the consummation of the
applicable Reorganization Event.]
14. Purchase for Investment. Whether or not the
options and shares covered by the Plan have been registered
under the Securities Act of 1933, as amended, each person
<PAGE>
Page 8
exercising an option under the Plan may be required by the
Trust to give a representation in writing that such person
is acquiring such shares for investment and not with a view
to, or for sale in connection with, the distribution of any
part thereof. The Trust will endorse any necessary legend
referring to the foregoing restriction upon the certificate
or certificates representing any shares issued or
transferred to the Optionee upon the exercise of any option
granted under the Plan.
15. Form of Agreements with Optionees. Each
option granted pursuant to the Plan shall be in writing and
shall have such form, terms and provisions, not inconsistent
with the provisions of the Plan, as the Committee shall
provide for such option. The effective date of the granting
of an option shall be the date determined by the Committee,
in its sole discretion. Each Optionee shall be notified
promptly of such grant, and a written agreement shall be
promptly executed and delivered by the Trust and the
Optionee.
16. Termination and Amendment of Plan and
Options. Unless the Plan shall theretofore have been
terminated as hereinafter provided, options may be granted
under the Plan at any time, and from time to time, prior to
the tenth anniversary of the Effective Date (as defined
below), on which date the Plan will expire, except as to
options then outstanding under the Plan. Such options shall
remain in effect until they have been exercised, have
expired or have been canceled.
The Plan may be terminated or amended at any time
by the Board of Trustees; provided, however, that any such
amendment shall comply with all applicable laws (including
Code section 422), applicable stock exchange listing
requirements, and applicable requirements for exemption (to
the extent necessary) under Rule 16b-3 under the Exchange
Act.
No termination, modification or amendment of the
Plan, without the consent of the Optionee, may adversely
affect the rights of such person with respect to such
option. With the consent of the Optionee and subject to the
terms and conditions of the Plan, the Committee may amend
outstanding option agreements with any Optionee.
17. Effective Date of Plan. The Plan shall
become effective upon its adoption by the Board of Trustees
(the "Effective Date"), subject, however, to its approval by
<PAGE>
Page 9
the Trust's shareholders within 12 months before or after
the date of such adoption.
18. Government and Other Regulations. The
obligation of the Trust with respect to options granted
under the Plan shall be subject to all applicable laws,
rules and regulations and such approvals by any governmental
agency as may be required, including, without limitation,
the effectiveness of any registration statement required
under the Securities Act of 1933, as amended, and the rules
and regulations of any securities exchange on which the
Common Shares may be listed.
19. Withholding. The Trust's obligation to
deliver Common Shares in respect of any option granted under
the Plan shall be subject to all applicable federal, state
and local tax withholding requirements. Federal, state and
local withholding tax due upon the exercise of any option
(or upon any disqualifying disposition of Common Shares
subject to an Incentive Option), in the Committee's sole
discretion, may be paid in Common Shares (including the
withholding of shares subject to an option) upon such terms
and conditions as the Committee may determine.
20. Separability. If any of the terms or
provisions of the Plan conflict with the requirements of
Rule 16b-3 under the Exchange Act and/or section 422 of the
Code, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with the
requirements of Rule 16b-3 and/or section 422 of the Code.
With respect to Incentive Options, if the Plan does not
contain any provision required to be included herein under
section 422 of the Code, such provision shall be deemed to
be incorporated herein with the same force and effect as if
such provision had been set out at length herein; provided,
further, that to the extent any option which is intended to
qualify as an Incentive Option cannot so qualify, such
option, to that extent, shall be deemed to be a Nonqualified
Option for all purposes of the Plan.
21. Non-Exclusivity of the Plan. Neither the
adoption of the Plan by the Board of Trustees nor the
submission of the Plan to the shareholders of the Trust for
approval shall be construed as creating any limitation on
the power of the Board of Trustees to adopt such other
incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options and the
awarding of stock and cash otherwise than under the Plan,
and such arrangements may be either generally applicable or
applicable only in specific cases.
<PAGE>
Page 10
22. Exclusion from Pension and Profit-Sharing
Computation. By acceptance of an option, each Optionee
shall be deemed to have agreed that such grant is special
incentive compensation that will not be taken into account,
in any manner, as salary, compensation or bonus in
determining the amount of any payment under any pension,
retirement or other employee benefit plan of the Trust or
any of its Subsidiaries. In addition, such option will not
affect the amount of any life insurance coverage, if any,
provided by the Trust on the life of the Optionee which is
payable to such beneficiary under any life insurance plan
covering employees of the Trust or any of its Subsidiaries.
23. Governing Law. The Plan shall be governed
by, and construed in accordance with, the laws of the
Commonwealth of Massachusetts.
24. Exculpation. It is understood that the
obligations incurred by the Trust under or with respect to
this Plan do not constitute personal obligations of the
Trustees, officers, employees or shareholders of the Trust,
or of any such Trustees, officers, employees or
shareholders, and shall not create or involve any claim
against, or personal liability on the part of, them or any
of them. The Optionees agree to look solely to the assets
of the Trust for satisfaction of any liability of the Trust
under or with respect to the Plan and not to seek recourse
against any such Trustees, officers, employees or
shareholders, or any of them or any their personal assets
for such satisfaction.
<PAGE>
[Front of Card]
PROPERTY CAPITAL TRUST
One Post Office Square
Boston, Massachusetts 02109
PROXY FOR THE
ANNUAL MEETING OF SHAREHOLDERS,
November 30, 1994 at 2 p.m.
This Proxy is solicited on behalf of the Trustees
THE UNDERSIGNED hereby appoint(s) JOHN A. CERVIERI JR.
and WALTER F. LEINHARDT, and each of them, attorneys and
proxies with full power of substitution in each of them, in
the name, place and stead of the undersigned, to vote as Proxy
at the Annual Meeting of Shareholders of Property Capital
Trust (the "Trust"), to be held in the Board Room, 33rd Floor,
225 Franklin Street, Boston, Massachusetts, on Wednesday,
November 30, 1994, at 2:00 P.M., or at any adjournments or
postponements thereof, according to the number of votes that
the undersigned would be entitled to cast if personally
present.
If only one of said attorneys and proxies or substitutes
shall be present at such meeting or at any adjournments or
postponements thereof, then that one shall have all the powers
granted to such attorneys and proxies.
Properly executed proxies will be voted as marked, and if
not marked will be voted in favor of the election of the
nominees listed in the accompanying Proxy Statement and "For"
the propositions referred to in items 2 through 5.
PLEASE VOTE AND SIGN ON THE OTHER SIDE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on the
books of the Trust. Joint owners should each sign personally.
Trustees and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a
majority must sign. If a corporation, this signature should
be that of an authorized officer who should state his or
title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_______________________________ _______________________________
_______________________________ _______________________________
<PAGE>
[Back of Card]
1. The election of seven Trustees: Walter M. Cabot, John A.
Cervieri Jr., Graham O. Harrison, Walter F. Leinhardt,
Edward H. Linde, Robert M. Melzer and Glenn P. Strehle.
FOR [ ] WITHHOLD AUTHORITY TO VOTE FOR [ ] FOR ALL EXCEPT [ ]
If you do not wish your shares voted "FOR" a particular
nominee, mark the "FOR ALL EXCEPT" box and strike a line
through that nominee's name. Your shares will be voted for
the remaining nominee(s).
2. Approval of the Amended and Restated Deferred Stock Plan
for Non-Employee Trustees.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approval of the Property Capital Trust 1994 Stock Option
Plan for Non-Employee Trustees
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Approval of Amendments to the Property Capital Trust 1994
Stock Option Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. The ratification of the appointment of Ernst & Young LLP
to serve as the independent auditors for the fiscal year
ending July 31, 1995.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. In their discretion upon any and all other matters which
may properly come before the meeting or any adjournments
or postponements thereof.
Mark box at right if comments or [ ]
address change have been noted on the
reverse side of this card.
Please be sure to sign and date this Proxy. DATE ______________________
The undersigned acknowledge(s) receipt of the Notice of
Meeting and Proxy Statement relating to this meeting, and of
the Annual Report of the Trust for its fiscal year ended July
31, 1994. The undersigned hereby revokes any proxies
heretofore given to vote said shares.
- --------------------- ------------------
Shareholder sign here Co-owner sign here
