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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
_________________
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] 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.
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<PAGE>
(Preliminary Copy)
PROPERTY CAPITAL TRUST
One Post Office Square
Boston, Massachusetts 02109
October , 1995
To the Shareholders of
Property Capital Trust:
You are cordially invited to the Annual Meeting of Shareholders
which will be held in the Captain's Room, 33rd Floor, 225 Franklin
Street, Boston, Massachusetts, on Friday, December 15, 1995, at 10:30
A.M.
At the meeting, you will be asked to elect seven Trustees; to
ratify the new business plan adopted earlier this year by the Trustees
and, in connection therewith, to approve certain amendments to the
Trust's Declaration of Trust which will facilitate the implementation of
such plan; to ratify the appointment of the Trust's independent auditors
and to transact such other business as may properly come before the
meeting.
Before proceeding with the formal business of the meeting, we
will discuss the new business plan, the reasons for its adoption and its
impact on the Trust and its shareholders. There will be time for
questions and for discussions with the Trustees and officers.
As the adoption of the new business plan is one of the most
important decisions to have been made in the Trust's history, 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>
(Preliminary Copy)
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 Captain's
Room, 33rd Floor, 225 Franklin Street, Boston, Massachusetts, on Friday,
December 15, 1995, at 10:30 A.M., for the following purposes:
1. to elect seven Trustees;
2. to ratify the new business plan adopted earlier this year by the
Trustees and, in connection therewith, to approve certain amendments
to the Trust's Declaration of Trust which will facilitate the
implementation of the new business plan;
3. to ratify the appointment of Ernst & Young LLP as the Trust's
independent auditors for the fiscal year ending July 31, 1996; and
4. 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 25, 1995 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 , 1995
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY PROMPTLY.
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>
(Preliminary Copy)
PROPERTY CAPITAL TRUST
One Post Office Square
Boston, Massachusetts 02109
PROXY STATEMENT
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished to the shareholders of
Property Capital Trust (the "Trust") in connection with the solicitation
of proxies by the Trustees of the Trust for use at the Annual Meeting of
Shareholders to be held in the Captain's Room, 33rd Floor, 225 Franklin
Street, Boston, Massachusetts, on Friday, December 15, 1995, at 10:30
A.M., or any adjournments or postponements thereof. The meeting has been
called for the purposes of:
(i) electing seven Trustees;
(ii) ratifying the new business plan adopted earlier this year
by the Trustees (the "New Business Plan") and approving
amendments to the Trust's Declaration of Trust (the
"Declaration of Trust") which (A)delete from the Declaration
of Trust a provision requiring the approval of holders of two-
thirds of the Trust's common shares (the "Common Shares") for a
sale of all or substantially all of the Trust's assets, and
substitute therefor a provision requiring approval of holders
of two-thirds of the Trust's Common Shares for a sale of assets
of the Trust in a single transaction, or a series of related
transactions, for aggregate consideration to the Trust of
$50,000,000 or more and (B)delete from the Declaration of
Trust a provision requiring the approval of holders of two-
thirds of the Trust's Common Shares for the termination of the
Trust, and substitute therefor a provision requiring approval
of holders of two-thirds of the Trust's Common Shares only if
the Trustees seek to terminate the Trust at a time when the
real estate assets of the Trust have a value of $10,000,000 or
more;
(iii) ratifying the appointment of Ernst & Young LLP as the
Trust's independent auditors for the fiscal year ending
July 31, 1996; 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, 1995, to
shareholders of record on October 25, 1995.
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Page 2
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 a proxy is not revoked,
the shares represented thereby will be voted at the meeting in accordance
with the instructions indicated in the proxy by the shareholder, or, if
no instructions are indicated, will be voted FOR the slate of Trustees
described herein, FOR the ratification of the New Business Plan and
approval of the amendments to the Declaration of Trust, 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 purposes of determining the presence of
a quorum and as unvoted for approving the election of Trustees, for
ratifying the New Business Plan and approving the amendments to the
Declaration of Trust and for ratifying 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 betabulated 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 meeting. 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: WalterF. Leinhardt, Secretary.
All expenses in connection with this solicitation will be borne
by the Trust. It is expected that solicitation will be made primarily by
mail, but employees of the Trust may also solicit proxies for no
additional compensation, and Georgeson& Company Inc. may also solicit
proxies on behalf of the Trust at an anticipated cost of $7,500 plus
reimbursement of reasonable out-of-pocket expenses. The Trust will also
request brokerage firms, nominees, custodians and fiduciaries to forward
proxy materials to the beneficial owners of shares held of record by such
persons
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Page 3
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 Common Shares at the close of
business on October 25, 1995, 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 25, 1995 was 9,053,881.
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 transaction of business.
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 25, 1995,
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 Compensation" 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 14,374 {2/} {3/}
Walter M. Cabot 15,916 {4/} {3/}
John A. Cervieri Jr. 169,589 {5/6/} 1.9%
Robin W. Devereux 8,000 {7/} {3/}
Graham O. Harrison 34,773 {8/} {3/}
Walter F. Leinhardt 6,384 {9/} {3/}
Edward H. Linde 10,968 {10/} {3/}
Robert M. Melzer 48,000 {11/} {3/}
Glenn P. Strehle 6,962 {12/} {3/}
Michael I. Sucoff 8,500 {13/} {3/}
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Page 4
All Trustees and 323,466 {14/} 3.6%
executive officers
as a group
(10 persons)
_______________
{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 which Mr. Bonn is a Trustee and 10,500
Common Shares issuable upon exercise of vested employee stock
options granted under the Property Capital Trust 1992 Employee Stock
Option Plan (the "1992 Employee Stock Option Plan"). Does not
include 34,500 Common Shares issuable upon exercise of employee
stock options granted under the 1992 Employee Stock Option Plan
which have not yet vested.
{3/} Less than 1%.
{4/} Includes 15,316 Common Shares issuable under the Property Capital
Trust Amended and Restated Deferred Stock Plan for Non-Employee
Trustees (the "Trustee Deferred Stock Plan"). Does not include
4,000 Common Shares issuable upon exercise of options granted under
the Property Capital Trust 1994 Stock Option Plan for Non-Employee
Trustees (the "Trustee Stock Option Plan") which have not yet
vested.
{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 through The Boxer Trust, the
profit-sharing trust for the Trust's former investment advisor, of
which Mr. Cervieri is a Trustee, 37,926 Common Shares issuable under
the Trustee Deferred Stock Plan and 3,963 Common Shares issuable
upon conversion of $86,000 in principal amount of the Trust's 10%
convertible debentures. Does not include 4,000 Common Shares
issuable upon exercise of options granted under the Trustee Stock
Option Plan which have not yet vested.
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Page 5
{7/} Represents 1,000 Common Shares held through an Individual
Retirement Account owned and controlled by Ms.Devereux and 7,000
Common Shares issuable upon exercise of vested employee stock
options granted under the 1992 Employee Stock Option Plan. Does not
include 25,500 Common Shares issuable upon exercise of employee
stock options granted under the 1992 Employee Stock Option Plan
which have not yet vested.
{8/} Includes 33,773 Common Shares issuable under the Trustee Deferred
Stock Plan. Does not include 4,000 Common Shares issuable upon
exercise of options granted under the Trustee Stock Option Plan
which have not yet vested.
{9/} Includes 400 Common Shares owned by Mr. Leinhardt's wife. Mr.
Leinhardt disclaims any beneficial interest in such shares. Also
includes 5,944 Common Shares issuable under the Trustee Deferred
Stock Plan. Does not include 4,000 Common Shares issuable upon
exercise of options granted under the Trustee Stock Option Plan
which have not yet vested.
{10/}Includes 10,468 Common Shares issuable under the Trustee Deferred
Stock Plan. Does not include 4,000 Common Shares issuable upon
exercise of options granted under the Trustee Stock Option Plan
which have not yet vested.
{11/}Includes 16,000 Common Shares held for the benefit of Mr. Melzer
through The Boxer Trust, the profit-sharing trust for the Trust's
former investment advisor, of which Mr. Melzer is a Trustee, and
21,000 Common Shares issuable upon exercise of vested employee stock
options granted under the 1992 Employee Stock Option Plan. Does not
include 79,000 Common Shares issuable upon exercise of employee
stock options granted under the 1992 Employee Stock Option Plan
which have not yet vested.
{12/}Includes 5,962 Common Shares issuable under the Trustee Deferred
Stock Plan. Does not include 4,000 Common Shares issuable upon
exercise of options granted under the Trustee Stock Option Plan
which have not yet vested. 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
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Page 6
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.
{13/}Includes 5,500 Common Shares issuable upon exercise of vested
employee stock options granted under the 1992 Employee Stock
Option Plan. Does not include 22,000 Common Shares issuable
upon exercise of employee stock options granted under the 1992
Employee Stock Option Plan which have not yet vested.
{14/}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.
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. 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 25, 1995, certain
information concerning the seven nominees:
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Page 7
PRINCIPAL OCCUPATION
NOMINEE AND POSITIONS FOR PAST 5 YEARS, TRUSTEE
HELD WITH TRUST AFFILIATIONS AND AGE SINCE
Walter M. Cabot Senior Advisor of Standish, Ayer & 1982
Trustee(1)(3) Wood, Inc., Boston, MA, investment
counselors, since 1991; Director of
Gasbeau Inc., Montreal, Canada,
General Reinsurance Company,
Greenwich, CT, and Rockefeller
Financial Services, New york, NY;
Trustee and Treasurer, Wellesley
College, Wellesley, MA; Chairman,
Board of Governors, New England
Medical Center, Boston, MA; prior to
1991, Director, 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 62).
John A. Cervieri Jr. Managing Trustee of the Trust since 1969
Managing Trustee(1) 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
<PAGE>
Page 8
investment advisor to the Trust) and
its affiliates, Narragansett, RI;
Chairman, PCA Institutional Advisors,
a former affiliate of the Advisor and
its affiliates, Boston, MA; 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, Boston,
MA (Age 64).
Graham O. Harrison Director, Beacon Properties 1980
Trustee(2) Corporation, Boston, MA, since May,
1994; Manager and Investment
Committee Chairman, Swarthmore
College, PA; prior to May, 1994, Vice
President and Chief Investment
Officer of the Howard Hughes Medical
Institute, Chevy Chase, MD.
(Age 72).
Walter F. Leinhardt Partner of Paul, Weiss, Rifkind, 1969
Trustee and Secretary(2) Wharton & Garrison, NewYork, NY, law
firm(4) (Age 63).
Edward H. Linde President of Boston Properties Inc., 1985
Trustee(1)(3) Boston, MA, builders and developers
(Age 54).
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Page 9
Robert M. Melzer President and Chief Executive Officer 1992
Trustee, President, of the Trust, since 1992; prior to
Chief Executive Officer 1992, President and Treasurer of the
and Chief Financial Trust; Director of PCA Institutional
Officer(1) Advisors, a former affiliate of the
Advisor, and its affiliates, Boston,
MA; Trustee and Secretary, Beth
Israel Hospital, Boston, MA (Age 54).
Glenn P. Strehle Vice President for Finance (since 1993
Trustee(2)(3) 1994), Treasurer (since 1975) and
Vice President for resource
development (from 1986 to 1994) of
the Massachusetts Institute of
Technology, Cambridge, MA; member of
MIT Executive and Investment
Committees; Chairman of the Trustees
of the MIT Retirement Plan; Director
of Liberty Financial Companies,
Boston , MA, SofTech, Inc., Waltham,
MA, and BayBanks, Inc. and BayBank
Boston, N.A., Boston, MA (Age 59).
_______________
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) Paul, Weiss, Rifkind, Wharton & Garrison performed legal services
for the Trust during fiscal 1995 and is performing legal services
for the Trust during the current fiscal year. See "Certain
Relationships and Related Transactions."
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Page 10
During fiscal 1995, there were eight meetings of the Board of
Trustees. The Trust has standing Audit, Executive and Compensation
Committees. The Audit Committee, which during fiscal 1995 was composed
of Messrs. Harrison, Leinhardt and Strehle, none of whom is or was
employed by the Trust ("Outside Trustees"), met three times during such
year. 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 1995 was composed
of Messrs. Cabot, Cervieri, Linde and Melzer) is responsible, among other
things, for addressing major issues which arise between scheduled
Trustees' meetings. During fiscal 1995, 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 1995 was
composed of three Outside Trustees, Messrs. Cabot, Linde and Strehle) met
three times during fiscal 1995. The Compensation Committee is
responsible for administering the 1992 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 1996 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 1995, each Trustee
attended at least 75% of the meetings of the Board and of each committee
on which such Trustee served.
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
$155,667 in fiscal 1995. The Trust also reimburses the Trustees for
their expenses incurred in attending meetings of the Trustees. For
fiscal 1995, reimbursed expenses totaled $2,460. Mr. Melzer receives no
compensation for serving as a Trustee.
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AMENDED AND RESTATED DEFERRED STOCK
PLAN FOR NON-EMPLOYEE TRUSTEES
Under the Trustee Deferred Stock Plan, each Trustee may elect,
on an annual basis, to have fees that would otherwise be payable in cash
to the Trustee credited to an account for the Trustee's benefit. To the
extent such fees are deferred by a Trustee, share units of the Trust's
Common Shares are allocated to 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 paid. Share units are also allocated
to reflect dividends that would have been paid on a number of Common
Shares equal to the number of share units in a Trustee's account.
Payments to a Trustee under the 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. For calendar 1995, all of the non-
employee Trustees elected to participate in the Trustee Deferred Stock
Plan with respect to all fees payable to them.
The Trustees have the right at any time to require the Trust to
fund a trust with Common Shares or other property that would be held in
trust to satisfy the Trust's obligations under the Trustee Deferred Stock
Plan. Once the trust is funded, the Trustees can direct that
distributions on stock held in trust be held in cash or invested in cash
equivalents. The Trustees expect that, in view of the New Business Plan
(provided it is ratified by shareholders), they will exercise their right
to fund this trust in the near future.
1994 STOCK OPTION PLAN
FOR NON-EMPLOYEE TRUSTEES
Under the Trustee Stock Option Plan, each Trustee who is not an
employee of the Trust or any of its affiliates is entitled to receive a
grant of non-qualified stock options for the purchase of 4,000 Common
Shares upon the election or reelection of such Trustee at an annual
meeting of shareholders (beginning with the Trust's 1994 Annual Meeting).
The exercise price of options under the Trustee Stock Option Plan is
equal to the fair market value of the underlying Common Shares on the
date of grant. 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 (as defined in the Trustee Stock Option Plan) occurring prior to
such annual meeting, in which case, such options immediately vest and
become exercisable.
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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 officers of the Trust during the fiscal
years ended July 31, 1995, 1994 and 1993 for services rendered in all
capacities to the Trust and its subsidiaries.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE(1)
-----------------------------
ANNUAL COMPENSATION LONG-TERM
--------------------------------------- COMPENSATION
-------------
COMMON
SHARES
UNDERLYING
FISCAL OTHER ANNUAL OPTIONS ALL OTHER
YEAR SALARY BONUSES COMPENSATION GRANTED COMPENSATION
NAME AND PRINCIPAL POSITION ENDED $ $ $ # $
------- ------- ------ ----- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Melzer 7/31/95 232,207 30,000 0 35,000(3) 8,588(7)
President, Chief Executive 7/31/94 216,000 25,000 0 25,000(5) 8,682(8)
Officer and Chief Financial 7/31/93 200,000 0 0 40,000(6) 4,718(9)
Officer
William A. Bonn 7/31/95 177,788 30,000 0 12,500(3) 8,598(7)
Senior Vice President, 7/31/94 175,000 15,000 0 12,500(5) 8,422(8)
Counsel and Assistant 7/31/93 150,000(2) 0 0 20,000(6) 2,748(9)
Secretary
John J. Monkouski 7/31/95 120,000 10,000 0 5,000(3) 4,493(7)
Vice President 7/31/94 118,000 10,000 0 5,000(5) 2,823(8)
7/31/93 115,000 0 0 10,000(6) 2,158(9)
Michael I. Sucoff 7/31/95 111,952 20,000 0 10,000(3)(4) 7,011(7)
Vice President 7/31/94 106,000 10,000 0 7,500(5) 4,618(8)
7/31/93 84,398(10) 0 0 10,000(6) 3,122(9)
Robin W. Devereux 7/31/95 92,058 25,000 0 10,000(3) 6,344(7)
Vice President 7/31/94 88,000 10,000 0 10,000(5) 5,011(8)
and Treasurer 7/31/93 80,000 --0 --0 12,500(6) 1,569(9)
</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) 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
<PAGE>
Page 13
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.
(3) Effective as of November 30, 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 ($6.125),
subject to a dollar-for-dollar reduction (but not below $1.00) to reflect
any distributions in excess of funds from operations. The options were
awarded pursuant to the 1992 Employee Stock Option Plan.
(4) Effective as of February 22, 1995, the Compensation Committee awarded to
Mr. Sucoff 5,000 options to acquire Common Shares of the Trust at the
closing price of the Common Shares on the American Stock Exchange on such
date ($6.375), subject to a dollar-for-dollar reduction (but not below
$1.00) to reflect any distributions in excess of funds from operations.
The options were awarded pursuant to the 1992 Employee Stock Option Plan.
(5) 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), subject
to a dollar-for-dollar reduction (but not below $1.00) to reflect any
distributions in excess of funds from operations. The options were awarded
pursuant to the 1992 Employee Stock Option Plan.
(6) 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), subject
to a dollar-for-dollar reduction (but not below $1.00) to reflect any
distributions in excess of funds from operations. The options were awarded
pursuant to the 1992 Employee Stock Option Plan.
(7) 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 ($8,286 for Mr.Melzer, $8,296 for Mr.Bonn,
$4,191 for Mr.Monkouski, $6,709 for Mr.Sucoff, and $6,042 for
Ms.Devereux), and (ii) premiums paid by the Trust for term life insurance
policies (in the aggregate face amount of $50,000 for each executive
officer) ($302 for each of Messrs.Melzer, Bonn, Monkouski, Sucoff and Ms.
Devereux).
(8) 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 ($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), and (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).
(9) These amounts represent (i) amounts contributed by the Trust on a matching
basis with contributions made by employees under the PCT 401(k) Plan
($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), and (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).
(10)During fiscal 1993, Mr. Sucoff's annual salary was $100,000. He
received only $84,398 as he commenced employment with the Trust in
September 1992.
<PAGE>
Page 14
STOCK OPTION GRANTS
The following table sets forth certain information concerning
stock option grants to the named executive officers during the last
fiscal year under the 1992 Employee Stock Option Plan. The Trust does
not grant stock appreciation rights ("SARs") of any kind.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR(1)
Grant Date
Common % of Total Value
Shares Options -----------
Underlying Granted to Exercise or Grant Date
Options Employees in Base Price Expiration Present Value
Name Granted (#) Fiscal Year ($/Sh)(1)(2)(3) Date ($)(4)
---- ----------- ------------ --------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Robert M. Melzer 35,000 42% 6.125 11/30/04 41,650
William A. Bonn 12,500 15% 6.125 11/30/04 14,875
John J. Monkouski 5,000 6% 6.125 11/30/04 5,950
Michael I. Sucoff 5,000 6% 6.125 11/30/04 5,950
5,000 6% 6.375 2/22/05 5,950
Robin W. Devereux 10,000 12% 6.125 11/30/04 11,900
</TABLE>
_______________
(1) Except as noted in footnote 2, all options were granted on November 30,
1994 and have an exercise price equal to the closing price of the Common
Shares on the American Stock Exchange on such date ($6.125), subject to
a dollar-for-dollar reduction (but not below $1.00) to reflect any
distributions in excess of funds from operations.
(2) Five thousand options were granted to Mr. Sucoff on February 22, 1995
and have an exercise price equal to the closing price of the Common
Shares on the American Stock Exchange on such date ($6.375), subject to
a dollar-for-dollar reduction (but not below $1.00) to reflect any
distributions in excess of funds from operations.
(3) One-fifth of the options granted will vest on each of the first, second,
third, fourth and fifth anniversaries of the date of grant, subject
(provided the New Business Plan is ratified by shareholders) to earlier
vesting if the optionee's employment terminates by reason of the
contraction of the Trust or if the option exercise price is reduced
below $2.00, and the options will be exercisable at any time between the
date of vesting and the tenth anniversary of the date of the grant.
(4) These values were calculated using a Black-Scholes option pricing model.
The actual value, if any, that an executive may realize will depend on
the excess, if any, of the stock price over the exercise price on the
date the options are exercised, and no assurance exists that the value
realized by an executive will be at or near the value estimated by the
Black-Scholes model. The following assumptions were used in the
calculations:
(a) assumed option term of 5 years;
(b) stock price volatility factor of 0.29;
(c) 7.8% annual discount rate for the options granted on November 30,
1994 and 7.1% annual discount rate for the options granted on
February 22, 1995;
(d) assumes a 6.31% dividend rate; and
(e) 0% discount to Black-Scholes ratio for each year an option remains
unvested.
<PAGE>
Page 15
OPTION EXERCISES/VALUE OF UNEXERCISED OPTIONS
The following table sets forth certain information concerning
unexercised options to purchase Common Shares of the Trust held at the
end of fiscal 1995 by the named executive officers. No named executive
officers have any SARs.
Aggregated Option/Exercises in Last Fiscal Year and
Fiscal Year End Option Values
---------------------------------------------------
<TABLE>
<CAPTION>
Number of Common Shares
Shares Underlying Unexercised Value of Unexercised
Acquired on Value Options at Fiscal in-the-money Options
Name Exercises (#) Realized Year-End(#) at July 31, 1995(1)($)
---- ------------- -------- ------------------------- ----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Melzer 0 $0 21,000 79,000 $76,125 $134,500
William A. Bonn 0 $0 10,500 34,500 $38,063 $ 67,250
John J. Monkouski 3,000 $10,120 0 15,000 $ 0 $ 50,625
Michael I. Sucoff 0 $0 5,500 22,000 $19,438 $ 35,250
Robin W. Devereux 0 $0 7,000 25,500 $24,500 $ 44,875
</TABLE>
_______________
(1)Based upon the closing sale price of the Common Shares on July 31, 1995
($8.00) on the American Stock Exchange minus the option exercise price ($3.75,
$6.125 and $6.375) of in-the-money stock options.
TERMINATION OF EMPLOYMENT,
CHANGE OF CONTROL AND INCENTIVE
COMPENSATION ARRANGEMENTS
TERMINATION AGREEMENTS
The Trust is a party to Termination Agreements (the
"Termination Agreements") with Messrs. Melzer and Bonn (the
"Executives"), which Termination Agreements expire on October 19, 2000
and July 31, 2000, respectively. 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 Executive'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. Beginning October 19, 1997, the
amount payable to Mr. Melzer following such termination will be reduced,
pursuant to his Termination Agreement, to 100% of his annual base salary
at the date of such change of control.
The Termination Agreements also provide for the Trust to make
certain payments to each Executive equal to a percentage (150% for
Mr. Melzer or 100% for Mr. Bonn) of
<PAGE>
Page 16
annual base salary on the date of termination or resignation if
such executive is terminated by the Trust other than for "cause"
or if the Executive resigns for "good reason." Beginning October
19, 1997, the amount payable to Mr. Melzer will be reduced, pursuant
to his Termination Agreement, to 100% of his annual base salary at
the date of such termination or resignation. The Termination Agreements
provide that termination for "cause" may occur if (i)the Executive engages
in fraud, misappropriation, embezzlement or any other conduct that either
results in his conviction 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 Executive has wilfully failed to perform material duties of his office
and such failure is not cured within 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
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 Termination Agreements
will have occurred if (i)after the effective 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 or consolidation, a sale of all
or substantially all of the assets of the Trust or a contested election
of Trustees, or any combination 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.
<PAGE>
Page 17
Neither executive is entitled to any payment under his
Termination Agreement if he voluntarily leaves the employ of the Trust
(other than for good reason or within six months after a change of
control) or if his employment terminates by reason of his death or
disability.
Termination of employment by reason of a termination of the
Trust, as contemplated by the New Business Plan, would trigger payments
under the Termination Agreements.
INCENTIVE COMPENSATION AGREEMENT
As of August 25, 1995, the Trust entered into an Incentive
Compensation Agreement (the "Incentive Compensation Agreement") with
Mr. Melzer to provide Mr. Melzer with incentive compensation to motivate
him to remain with the Trust throughout the implementation of the New
Business Plan. The Incentive Compensation Agreement is designed to
reward Mr. Melzer based upon the amount of proceeds the Trust is able to
realize upon the disposition of the Trust's portfolio in accordance with
the New Business Plan.
Under the Incentive Compensation Agreement, Mr. Melzer will
receive cash compensation equal to the amount he would realize if he had
purchased on May 24, 1995, 250,000 Common Shares of the Trust (the
"Phantom Shares") at $6.75 per share, the market price of a Common Share
on May 24, 1995 (the date the Trustees adopted the New Business Plan),
with the proceeds of a loan made to him by the Trust bearing interest at
the rate of 10% per annum, compounding monthly (the "Phantom Loan").
Each dividend or other distribution paid on each Common Share subsequent
to May 24, 1995 is deemed to have been simultaneously paid on the Phantom
Shares, with such dividends and other distributions being applied first
to repay the interest on and principal of the Phantom Loan, and then paid
in cash to Mr. Melzer. Upon termination of Mr. Melzer's employment with
the Trust, whether such termination results from Mr.Melzer's discharge
by the Trust or his election to leave the Trust, death or disability or
the termination of the Trust, the Trust will pay to Mr. Melzer an amount
in cash equal to the excess of the market value of the Phantom Shares
(which is equivalent to the then market value of a like amount of Common
Shares) over the amount, if any, then due on the Phantom Loan.
Mr. Melzer will not be entitled to receive any incentive compensation
pursuant to the Incentive Compensation Agreement if, prior to August 31,
1996, Mr. Melzer voluntarily terminates his employment with the Trust
other than within six months of a change of control (as defined in Mr.
Melzer's Termination Agreement) or other than for good reason (as defined
in Mr. Melzer's Termination Agreement).
<PAGE>
Page 18
Mr. Melzer also will not be entitled to any further payments if he voluntarily
terminates his employment with the Trust and fails to give the Trust the
requisite notice under his Termination Agreement or if the Trust terminates
Mr. Melzer's employment for cause (as defined in Mr. Melzer's Termination
Agreement). If the Trust merges or consolidates into or with another
entity and the Trust is not the survivor of such merger or consolidation,
then the surviving entity will be required to pay to Mr. Melzer an amount
equal to the excess of the value of 250,000 Common Shares of the Trust in
connection with such merger or consolidation over the amount then due on
the Phantom Loan. The Incentive Compensation Agreement provides that it
shall not become effective in the event that the Trust's shareholders do
not ratify the New Business Plan and approve the proposed amendments to
the Declaration of Trust.
BOARD OF TRUSTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995 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, Chief Executive Officer and Chief Financial
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.
JohnA. 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 Trust's former investment advisor which has entered into
an agreement with the Trust described below. See "Certain Relationships
and Related Transactions." Finally, Mr. Leinhardt is affiliated with an
entity which received payments from the Trust in fiscal 1995 which are
described below. See "Certain Relationships and Related Transactions."
Mr.Leinhardt participated in the Board's compensation discussions
concerning Mr. Melzer during fiscal 1995.
COMPENSATION COMMITTEE'S REPORT ON COMPENSATION
The Trust had a standing Compensation Committee during fiscal
1995 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, Chief Executive Officer and
Chief Financial Officer of the Trust, to ratification by the full
<PAGE>
Page 19
Board of Trustees. Mr. Melzer did not participate in discussions regarding
his own compensation.
During fiscal 1995, the compensation of an executive officer of
the Trust included 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, Chief
Executive Officer and Chief Financial Officer of the Trust, to
ratification by the full Board of Trustees (excluding Mr. Melzer).
Executive officers of the Trust also are eligible to
participate in the 1992 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 1995, 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 during fiscal 1995.
In order to motivate Trust's executive officers to remain with the Trust
during the New Business Plan, the terms of all outstanding options were
amended by the Compensation Committee (subject to ratification by
shareholders of the New Business Plan) to provide for automatic vesting
upon termination of an executive's employment with the Trust where such
termination results from the contraction of the Trust or when the
exercise price of such options falls below $2.00.
In establishing officers' salaries and bonuses for the 1995
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
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
<PAGE>
Page 20
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
1995, 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 Mr. Melzer's major
contributions during the year to: (i) the improvement in the Trust's
liquidity as exemplified by the reduction in its bank borrowings from
$5,000,000 at July 31, 1994 to $0 at July 31, 1995; (ii) the continuation
of the major redevelopment of Loehmann's Fashion Island with an
improvement in leasing from 63% at July 1992 to 90% at July 31, 1995;
(iii)the disposition of two properties, 6110 Executive Boulevard and the
Braes Hill apartments; (iv)the proposed settlement of the litigation
involving the Trust's investment in the Canyon View apartments; and
(v)the development of the New Business Plan. The Compensation Committee
awarded Mr. Melzer an additional 35,000 options pursuant to the
1992 Employee Stock Option Plan at an exercise price equal to the closing
price of the Common Shares on the date of grant (subject to a dollar-for-
dollar reduction (but not below $1.00) to reflect any distributions in
excess of funds from operations), which award the Compensation Committee
considered an appropriate long-term incentive for Mr. Melzer.
In connection with the Trustees' adoption of the New Business
Plan, the Compensation Committee, in order to retain personnel, adopted
various incentive compensation and severance pay arrangements. Based on
proposals of the Compensation Committee, the Trust entered into the
Incentive Compensation Agreement with Robert Melzer referred to above.
See "Termination of Employment, Change of Control and Incentive
Compensation Arrangements -- Incentive Compensation Agreement." In
addition, the Compensation Committee agreed to establish an annual
incentive compensation program for all members of the Trust's staff,
(excluding Mr. Melzer). This program calls for annual bonuses of up to
40% of base salary for officers (including executive officers other than
Mr. Melzer). In determining
<PAGE>
Page 21
the bonuses to be awarded in any year, the executive officers are to be
evaluated on the basis of how well they performed in achieving individual
goals and contributing to the Trust's overall efforts to accomplish the
New Business Plan, and how well the Trust performed overall in achieving
the objectives of the New Business Plan. The Compensation Committee also
proposed that the existing severance arrangement be revised to provide
that terminations as a result of the contraction of the Trust would
result in severance payments equal to six months' base salary. This
arrangement would apply to all employees, including executive officers
(other than Messrs. Melzer and Bonn, each of whom is a party to a
separate Termination Agreement (see "Termination of Employment,
Change of Control and Incentive Compensation Arrangements --
Termination Agreements")).
By the Fiscal 1995 Compensation Committee:
Walter M. Cabot
Edward H. Linde
Glenn P. Strehle
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, 1990 and ended on the last day of the Trust's
last completed fiscal year, July 31, 1995. The graph assumes an
investment of $100 on August 1, 1990, a reinvestment of dividends and
actual increase or decrease 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]
----------------------------------------------------------------------------
COMPARISON OF CUMULATIVE TOTAL RETURN FOR PERIOD FROM 7/31/90 THROUGH
7/31/95 AMONG PROPERTY CAPITAL TRUST, AMEX MARKET INDEX AND
NAREIT HYBRID REIT TOTAL RETURN INDEX
GRAPH
-----------------------------------------------------------------------------
DATE PCT AMEX MARKET INDEX HYBRID INDEX
7/31/90 100.00 100.00 100.00
7/31/91 62.83 104.15 106.42
7/31/92 57.97 109.97 118.05
<PAGE>
Page 22
7/31/93 72.88 123.59 154.18
7/31/94 81.58 123.78 169.60
7/31/95 115.36 147.98 188.42
Assumes $100 invested on Aug. 1, 1990. Assumes dividends reinvested through
fiscal year ending July 31, 1995.
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 August 1, 1992 through July 31,
1995. The Trust internalized its management on August 1, 1992.
[Performance Graph filed with Securities
and Exchange Commission under Form SE]
------------------------------------------------------------------------------
COMPARISON OF CUMULATIVE TOTAL RETURN FOR PERIOD FROM 7/31/92 THROUGH
7/31/95 AMONG PROPERTY CAPITAL TRUST, AMEX MARKET INDEX AND
NAREIT HYBRID REIT TOTAL RETURN INDEX
GRAPH
------------------------------------------------------------------------------
DATE PCT AMEX MARKET INDEX HYBRID INDEX
7/31/92 100.00 100.00 100.00
7/31/93 125.72 112.38 130.61
7/31/94 140.72 112.56 143.68
7/31/95 199.00 134.56 159.52
Assumes $100 invested on Aug. 1, 1992. Assumes dividends reinvested through
fiscal year ending July 31, 1995.
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 graphs do 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, 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 collectively
as the "Subject Partnerships") and an advisory agreement with respect to
a loan participation in which the Trust
<PAGE>
Page 23
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's 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 additional 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
$174,474 in fiscal 1995. 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 terminate 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 1995, the Trust incurred legal fees in the amount
of $205,467 (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. NEW BUSINESS PLAN
On May 24, 1995, the Trustees unanimously approved the New
Business Plan and directed that the plan be submitted to the Trust's
shareholders for ratification and that certain amendments to the Trust's
Declaration of Trust
<PAGE>
Page 24
designed to facilitate the implementation by the Trust of the New Business
Plan also be submitted to the Trust's shareholders for approval. The New
Business Plan provides for the orderly disposition of the Trust's assets,
on a property-by-property basis, over a period of time that is estimated
to be between three and five years. The resolution of the Board of Trustees
approving the New Business Plan and the text of the proposed amendments to
Sections 10.1(c) and 10.3 of the Declaration of Trust are set forth in Exhibit
A attached to this proxy statement.
BACKGROUND OF THE NEW BUSINESS PLAN
The Trust was formed in 1969 with the objective of investing
capital in land leasebacks and similar equity-equivalent transactions to
generate current income and capital appreciation for its shareholders.
The Trust's real estate portfolio is comprised primarily of equity
investments in office buildings, shopping centers, apartment complexes
and hotels located throughout the United States. These investments are
made either directly (including through wholly owned subsidiaries) or
through limited partnerships or a participation agreement in which the
Trust is general partner or lead lender and other institutional investors
are the limited partners or participating lenders. In recent years, the
Trust has taken over its tenants' or mortgagors' interests in a number of
properties, with the result that certain investments are in land
leasebacks and/or mortgage loans (which the Trust classifies as
"structured transactions"), while others represent title to improved
income-producing properties. At July 31, 1995, the Trust held 13 owned
properties, consisting of 5 held directly by the Trust (or its
subsidiaries) and 8 held through investment partnerships, and 14
structured transactions, consisting of 10 held directly by the Trust and
4 held through investment partnerships.
Since the termination by the Trustees in October 1989 of the
plan of liquidation approved by shareholders in December 1988, the
Trust's business plan has focused on maximizing shareholder values
through asset, portfolio and liability management and the selective
disposition of investments. This business plan was in large part a
response to the impact of the recent recession on the real estate
industry. During the time this plan was in effect, the Trust retained
much of its portfolio, disposing of three investments in fiscal 1990, no
investments in fiscal 1991, three investments in fiscal 1992, three
investments in fiscal 1993, four investments in fiscal 1994 and two
investments in fiscal 1995.
<PAGE>
Page 25
CONSIDERATION OF NEW BUSINESS PLAN
Following improvements in rental rates and occupancies
throughout the Trust's portfolio attributable to improving economic
conditions and considerable progress made by management in resolving
problems affecting the portfolio, the Trustees undertook a re-evaluation
of the Trust's business plan. The Trustees initiated such a review
because of their belief that the Trust's stock price has not been
reflective of the true value of the Trust's assets. As a result of this
re-evaluation, the Trustees concluded that the best means to maximize
shareholder values is to provide for an orderly disposition of the
Trust's investments over a reasonable period of time.
The Trustees considered and rejected other strategies, such as
a business combination with another real estate investment trust,
acquiring another real estate investment trust, selling the Trust's
investments in a bulk sale, continuing the business of the Trust as
usual, and continuing the business with a narrower focus and raising
capital to fund new investments. The Trustees rejected the possibility
of combining with or acquiring another real estate investment trust or
raising capital to fund new investments as being unlikely to be
consummated or inappropriate given their belief that the stock price is
not reflective of the value of the Trust's assets. In addition, the
Trustees believe that the interests of the shareholders would better be
served by distributing the net cash proceeds of the sale of the Trust's
assets to the shareholders, who would then be free to make their own
investment decisions as to such proceeds, rather than by offering by way
of a merger or acquisition of the Trust, in effect, an entirely new
investment alternative.
The Trustees also rejected the notion of continuing the Trust's
existing business or making new investments because they believed that
either alternative would more likely than not perpetuate the dichotomy
between the Trust's stock price and the value of its assets. There were
various reasons for this belief. First, the Trust's portfolio consists
of different property types -- office buildings, shopping centers,
apartments and hotels -- located throughout the United States. The
Trustees believe that in today's market, diversification is viewed as a
disadvantage. Newer real estate investment trusts focus on one property
type or on one geographic area (or both). Thus, the Trustees believe
that the diversity of the Trust's portfolio makes the portfolio
unattractive to other real estate investment trusts or to investors.
Second, the newer real estate investment trusts generally are integrated
businesses, with their own property management capabilities
<PAGE>
Page 26
and often development capabilities. The Trust traditionally has been a
passive investor and generally hires third parties to perform these functions.
Finally, the Trust is relatively small in size, as it has contracted
through sporadic sales and other dispositions of investments. This
deprives it of any meaningful following in the market. Further, the
costs of operating the Trust, which are difficult to reduce because of
the nature of the portfolio and the Trust's status as a public reporting
company, make questionable the economics of continuing the Trust's
business.
Nor did the Trustees believe that narrowing the strategic focus
of the Trust to one property type would be advantageous. Doing so would
require the disposition of a significant portion of the Trust's portfolio
(namely, all of the investments other than the product type selected
under the new strategy). The Trustees concluded that if a major portion
of the portfolio were to be sold, it would be preferable to distribute
the sales proceeds to shareholders, rather than to reinvest the funds in
what would essentially be a new business enterprise and which offers no
guaranty of success.
In deciding not to proceed with a bulk sale of the Trust's
portfolio, the Trustees concluded that the Trust's diversified portfolio
would trade at a discount to underlying values. On the other hand, the
Trustees believe that there is a market for the Trust's investments on a
property-by-property basis at prices that are reflective of value. If,
however, the opportunity presents itself to sell assets on a bulk-sale
basis at a price reflective of value, the Trustees will approve such
sale, subject to shareholder approval, if required.
IMPLEMENTATION OF THE NEW BUSINESS PLAN
In implementing the New Business Plan, the Trustees envision
two different approaches, one relating to the structured transactions and
the other to the owned properties.
With respect to the structured transactions, the Trust has
commenced discussions with many of its lessee/mortgagors regarding
repurchasing or repaying the Trust's investments. Since management is
intent on realizing full value for the structured transactions,
negotiations with these logical purchasers are likely to extend over a
period of time. Management believes that this period could last from
three to five years.
With respect to the disposition of owned properties, the Trust
will base its decisions with respect
<PAGE>
Page 27
to timing of sales on such factors as the physical condition of a property,
the occupancy and cash flow of a property and an assessment of expected changes
in the local real estate market. The Trust anticipates using brokers to handle
most sales of owned properties. It is expected that once a decision to sell an
owned property is made by the Trustees (subject, in the case of owned
properties held by Investment Partnerships, to obtaining the consent of
the limited partners of such partnerships), the process of broker
selection, marketing, contract negotiations and closing should normally
take between six and nine months.
At July 31, 1995, the Trust characterized for financial
reporting purposes five owned properties (one held directly by the Trust
and four held by investment partnerships) as "held for sale." These are
properties which have been approved for sale by the Trustees and, where
necessary, by the limited partners of an Investment Partnership, and
currently are being marketed. The Trust's investment in these properties
at July 31, 1995 was $38,702,000 (22% of the portfolio).
It is not expected that any properties will be sold to persons
deemed to be affiliates of the Trust. Each offer to purchase Trust
assets must be acted upon by the Board of Trustees, which Board is
comprised of seven Trustees, five of whom are unaffiliated with the Trust
or its former investment advisor.
It is difficult to predict the exact timing of, or the amount
of net proceeds from, the sale of the Trust's assets. No prices have
been established for the portfolio as a whole or for individual
properties. Accordingly, it is not possible to determine at this time
the aggregate net proceeds that may ultimately be available for
distribution to the Trust's shareholders. That amount will depend upon a
variety of factors, including the timing of and the net proceeds realized
from the sale of the Trust's assets, as well as the ultimate amount of
expenses and other obligations and liabilities that must be satisfied out
of the Trust's assets.
As of July 31, 1995, the Trust had $71,816,000 of indebtedness
outstanding, including $40,145,000 of mortgages on three owned
properties, $2,546,000 aggregate principal amount of 9-3/4% Convertible
Subordinated Debentures due May 15, 2008 and $29,125,000 aggregate
principal amount of 10% Convertible Subordinated Debentures due December
15, 2009.
Proceeds of dispositions will be used during the course of the
implementation of the New Business Plan to retire debt, repurchase
outstanding Common Shares and/or
<PAGE>
Page 28
make distributions to shareholders. Distributions to shareholders will be
made periodically at such times and upon such terms as determined by the
Trustees. Following the sale of all of the Trust's assets and satisfaction
by the Trust, through payment or establishment of reserves, of all of its
liabilities and obligations, including the expenses of such sales, the Trust
will distribute to its shareholders the balance of available proceeds. The
Trustees may from time to time fix a date in respect of any distribution for
the determination of the persons to be treated as shareholders of record
entitled to receive such distributions.
Before the final distributions of the Trust's remaining assets
to the shareholders, the Common Shares will continue to be transferable
and the Trust's shareholders will continue to have such rights as
applicable law confers upon shareholders. It is the intention of the
Trustees to maintain the listing of the Common Shares on the American
Stock Exchange until such time as the American Stock Exchange causes the
Common Shares to be delisted. Once all of the Trust's assets have been
sold and the net proceeds have been distributed to the Trust's
shareholders, the legal formalities of terminating the Trust will be
completed in accordance with the terms of the Declaration of Trust and
with Massachusetts law.
In the event of the failure of the shareholders to approve the
New Business Plan, the Trust intends to continue to transact business as
a real estate investment trust and to consider alternative courses of
action.
No shareholders of the Trust will have any rights of appraisal
or similar dissenters' rights with respect to the New Business Plan under
the Trust's Declaration of Trust or Massachusetts law.
TRUST BUSINESS AND PROPERTIES
The Trust is an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts pursuant to a Declaration
of Trust dated June 9, 1969, as amended and restated. Since 1969, the
Trust has qualified and has elected to be taxed as a real estate
investment trust.
As of July 31, 1995, the Trust's real estate portfolio
consisted of $175,040,000 (net of the accumulated depreciation and before
the allowance for possible investment losses) in real estate investments
and was diversified by type of property as follows: $69,178,000 or 40%
was invested in office buildings, $56,480,000 or 32% was invested in
shopping centers, $28,685,000 or 16% was
<PAGE>
Page 29
invested in apartments and $20,697,000 or 12% was invested in hotels. The
portfolio was also diversified by geographic region as follows: $83,487,000
or 48% was located in the Midwest, $58,016,000 or 33% was located in the
South, $18,687,000 or 11% was located in the East and $14,850,000 or 8% was
located in the West.
A list of the Trust's properties and certain information in
respect thereof are set forth on page ___ of the Trust's 1995 Annual
Report, a copy of which accompanies this proxy statement.
SHAREHOLDER ACTION AND AMENDMENTS
TO DECLARATION OF TRUST
The Trustees unanimously recommend that the Trust's
shareholders adopt the resolutions set forth on Exhibit A ratifying the
New Business Plan and, to facilitate the implementation of the New
Business Plan, approving the amendments to Sections 10.3 and 10.1(c) of
the Declaration of Trust described below.
In order for the Trustees to sell, exchange or otherwise
transfer, whether or not in the ordinary course of business, all or
substantially all of the Trust's property, Section 10.3 of the
Declaration of Trust currently requires, by reference to Section 10.4 of
the Declaration of Trust, the approval of (i)the holders of two-thirds
of the outstanding Common Shares voted in person or by proxy at a meeting
or (ii) a majority of the Trustees and the holders of two-thirds of the
outstanding Common Shares, by an instrument in writing without a meeting,
signed by such persons.
Under the New Business Plan, the Trustees expect to dispose of
the Trust's real estate assets on a property-by-property basis. Section
10.3 as currently in effect would require the Trustees to seek approval
of the holders of two-thirds of the outstanding Common Shares of the
Trust prior to the sale of assets of the Trust that constitute "all or
substantially" all of the Trust's assets. It is difficult to apply this
requirement to the implementation of the New Business Plan, which
contemplates not a bulk sale of all or substantially all of the Trust's
assets, but a series of sales on a property-by-property basis. It is not
clear when, if ever (other than upon the sale of the Trust's last
property), the required approval of shareholders should be sought under
the New Business Plan. Moreover, because shareholders are being asked to
ratify the New Business Plan, the requirements of Section 10.3 become
less meaningful. Within the context of the New Business Plan, the
Trustees do believe that the shareholders should not be deprived of their
approval rights if a major bulk sale
<PAGE>
Page 30
materializes. Accordingly, in lieu of the "all or substantially all" approval
right currently in existence, the Trustees propose that the shareholders have
the right to approve any disposition generating proceeds in excess of a
specified threshold. The Trustees have determined that such threshold should
be $50,000,000.
Section 10.3 as proposed to be amended would allow the
Trustees, without any notice to, or approval of, the Trust's
shareholders, to sell, exchange or transfer assets comprising part of the
Trust's property in a single transaction, or a series of related
transactions, for aggregate consideration to the Trust of less than
$50,000,000, whether or not such sale, exchange or other transfer is in
the ordinary course of business. Any such sale, exchange or other
transfer for which the aggregate consideration to be received by the
Trust equals or exceeds $50,000,000, would continue to require the
approval of holders of two-thirds of the outstanding Common Shares.
The second amendment to the Declaration of Trust involves the
eventual termination of the Trust. Section 10.1(c) of the Declaration of
Trust as currently in effect provides, by reference to Section 10.4 of
the Declaration of Trust, that in order to terminate the Trust (i)the
holders of two-thirds of the outstanding Common Shares must vote in
person or by proxy at a meeting in favor of such termination or (ii) a
majority of the Trustees and the holders of two-thirds of the outstanding
Common Shares must consent to such termination by an instrument in
writing without a meeting, signed by such persons.
It is the Trustees' intention ultimately to terminate the Trust
following the disposition of the Trust's assets pursuant to the New
Business Plan. If the shareholders ratify the New Business Plan, there
would be no reason to seek a further vote of the shareholders to the
formal legal termination of the Trust once all or virtually all of its
assets have been disposed of. Accordingly, the Trustees recommend
amending Section 10.1(c) to allow the Trustees, without shareholder
approval, to authorize commencing the legal formalities to terminate the
Trust once the real estate assets of the Trust have a value of less than
$10,000,000.
Section 10.1(c) as proposed to be amended would allow a
majority of the Trustees, without any action on the part of the Trust's
shareholders, to authorize commencing the legal formalities to terminate
the Trust, if and so long as the real estate assets of the Trust have a
value less than $10,000,000. If the real estate assets of the Trust have
a value greater than $10,000,000, the Trust could only
<PAGE>
Page 31
be terminated with the approval of holders of two-thirds of the outstanding
Common Shares.
Although not so intended, the overall effect of the actions
described above may be to render more difficult or to discourage a
merger, tender offer, proxy contest, the assumption of control of the
Trust by a holder of a large block of the Trust's capital stock or other
person, or the removal of incumbent management, even if such actions may
be beneficial to the Trust's shareholders generally.
The ratification of the New Business Plan and the adoption of
the proposed amendments to the Declaration of Trust require the
affirmative vote of holders of two-thirds of the outstanding Common
Shares. The Trustees recommend that the shareholders vote FOR the
ratification of the New Business Plan and the approval of the amendments.
III. RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS
At the Annual Meeting, shareholders will vote on the
ratification of the appointment of Ernst & Young LLP as the Trust's
independent auditors for fiscal 1996. 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, 1995 (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
<PAGE>
Page 32
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.
SUBMISSION OF PROPOSALS FOR 1996 ANNUAL MEETING
The 1996 Annual Meeting of Shareholders is scheduled to be held
on November 19, 1996. 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 [July 3, 1996].
By Order of the Trustees,
WALTER F. LEINHARDT,
Secretary
Boston, Massachusetts
October, 1995
<PAGE>
EXHIBIT A
Resolutions of the Shareholders of
Property Capital Trust Authorizing
New Business Plan
----------------------------------
WHEREAS, on May 24, 1995 the Trustees of Property Capital Trust
(the "Trust") adopted a business plan for the Trust that provides for the
orderly disposition of the Trust's assets, on a property-by-property
basis, over a period of time that is estimated to be between three and
five years (the "New Business Plan"); and
WHEREAS, Section 10.1 of the Trust's Declaration of Trust dated
as of June 9, 1969, as restated and amended to date (the "Declaration of
Trust"), provides that the Trust may be terminated upon a vote of holders
(the "Shareholders") of two-thirds of the outstanding common shares of
the Trust (the "Shares") or upon a vote of a majority of the Trustees of
the Trust and the written consent of Shareholders holding two-thirds of
the outstanding Shares; and
WHEREAS, Section 10.3 of the Declaration of Trust provides that
the Trustees may, when authorized by a vote of Shareholders holding two-
thirds of the outstanding Shares, sell, exchange or otherwise transfer,
whether or not in the ordinary course of business, all or substantially
all of the Trust's assets, but that the sale, exchange or other transfer
of any part of the Trust's assets that is less than all or substantially
all thereof shall not require any notice to or approval of the
Shareholders, whether or not such sale, exchange or other transfer is in
the ordinary course of business; and
WHEREAS, the language of Section 10.3 of the Declaration of
Trust does not contemplate or readily apply to the New Business Plan,
which provides not for a bulk sale of all or substantially all of the
Trust's assets but for the orderly disposition of the Trust's assets
through a series of individual property sales over a period estimated to
be three to five years; and
WHEREAS, the implementation of the New Business Plan will
result in the ultimate termination of the business of the Trust by reason
of the sale of its assets; and
WHEREAS, the Trustees have accordingly conditioned their
adoption of the New Business Plan on the adoption by the Shareholders of
the resolutions set forth below;
NOW, THEREFORE, be it
<PAGE>
RESOLVED, that the New Business Plan, as adopted by the
Trustees at their meeting held on May 24, 1995, be, and it
hereby is, ratified, confirmed and approved; and
RESOLVED, that the first sentence of Section 10.1(c) of
the Declaration of Trust be, and the same hereby is, amended to
read in full as follows (struck text to be deleted; underlined
text to be added pursuant to the proposed amendments):
The Trust may be terminated at any time in the
manner set forth in Section 10.4.
The Trust may be terminated at any time in the
manner set forth in Section 10.4{1} ; provided,
however, that notwithstanding the requirements of
Section 10.4, if and so long as the real estate
assets of the Trust have a value less than
$10,000,000, a majority of the Trustees then in
office shall be entitled, without any further action
on the part of the Trust's Shareholders, to terminate
the Trust; and
RESOLVED, that Section 10.3 of the Declaration of Trust
be, and the same hereby is, amended to read in full as follows
(struck text to be deleted; underlined text to be added
pursuant to the proposed amendments):
--------------------
{1/} 10.4 REQUIREMENTS FOR CERTAIN ACTIONS OF TRUSTEES AND SHAREHOLDERS.
Any amendment of this Declaration in accordance with paragraph (b) of
Section 10.1 or any action taken in accordance with paragraph (c) of
Section 10.1, Section 10.2 or the first sentence of Section 10.3 shall
not be given effect unless and until the following conditions have been
fulfilled: (i) the holders of two-thirds of the outstanding Shares have
voted in person or by proxy at a meeting in favor of such amendment or
action, as the case may be; or (ii) a majority of the Trustees then in
office and the holders of two-thirds of the outstanding Shares have
consented, by an instrument in writing, without a meeting, signed by such
persons to such amendment or action, as the case may be.
<PAGE>
10.3 SALE OF ALL OR SUBSTANTIALLY ALL OF THE
TRUST PROPERTY. The Trustees may, when authorized in
accordance with the requirements set forth in
Section 10.4 and upon such terms and conditions and
for such consideration as the Trustees may fix, sell,
exchange or otherwise transfer, whether or not in the
ordinary course of business, all or substantially all
of the Trust Property. The sale, exchange or other
transfer of any part of the Trust Property that is
less than all or substantially all of the Trust
Property shall not require any notice to, or approval
of, the Shareholders, whether or not such sale,
exchange or other transfer is in the ordinary course
of business or is of an integral part of the business
of the Trust.
10.3 SHAREHOLDER APPROVAL OF CERTAIN SALES OF
THE TRUST PROPERTY. The Trustees may not, unless
authorized in accordance with the requirements set
forth in Section 10.4, sell, exchange or otherwise
transfer, whether or not in the ordinary course of
business, assets comprising part of the Trust
Property in a single transaction, or a series of
related transactions, if the aggregate consideration
to be received by the Trust for such assets equals or
exceeds the sum of $50,000,000. The Trustees may
sell, exchange or transfer assets comprising part of
the Trust Property in a single transaction, or a
series of related transactions, for aggregate
consideration to the Trust of less than $50,000,000
without any notice to, or approval of, the
Shareholders, whether or not such sale, exchange or
other transfer is in the ordinary course of business.
Sales, exchanges or other transfers of assets
comprising part of the Trust Property made to
effectuate the provisions of the business plan
adopted by the Trustees at their meeting held on
May 24, 1995 shall not be deemed to have taken place
in a series of related transactions solely because
they are carried out in implementation of that
business plan.
<PAGE>
(Preliminary Copy)
[Front of Card]
PROPERTY CAPITAL TRUST
One Post Office Square
Boston, Massachusetts 02109
PROXY FOR THE
ANNUAL MEETING OF SHAREHOLDERS,
December 15, 1995 at 10:30 a.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 Captain's Room, 33rd Floor, 225 Franklin
Street, Boston, Massachusetts, on Wednesday, December 15, 1995, at 10:30 A.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 4.
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. Ratification of New Business Plan and approval of amendments to the
Trust's Declaration of Trust.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. The ratification of the appointment of Ernst & Young LLP to serve as the
independent auditors for the fiscal year ending July 31, 1996.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. 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, 1995. The undersigned hereby revokes any
proxies heretofore given to vote said shares.
___________________________ _________________________________
Shareholder sign here Co-owner sign here
