===========================================================================
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] No Fee Required.
[ ] 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
101 Federal Street
Boston, Massachusetts 02110
November 14, 1996
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 Tuesday, December 17, 1996, at 10:00 A.M.
At the meeting, you will be asked to elect six Trustees; to ratify
the appointment of the Trust's independent auditors; and to transact such
other business as may properly come before the meeting.
The formal Notice of Annual Meeting of Shareholders and Proxy
Statement appear on the following pages. 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
101 Federal Street
Boston, Massachusetts 02110
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 Tuesday,
December 17, 1996, at 10:00 A.M., for the following purposes:
1. to elect six Trustees;
2. to ratify the appointment of Ernst & Young LLP as the Trust's
independent auditors for the fiscal year ending July 31, 1997; and
3. 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 31, 1996 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
November 14, 1996
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>
Page 1
PROPERTY CAPITAL TRUST
101 Federal Street
Boston, Massachusetts 02110
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 Board Room, 33rd Floor, 225 Franklin
Street, Boston, Massachusetts, on Tuesday, December 17, 1996, at 10:00
A.M., or any adjournments or postponements thereof. The meeting has been
called for the purposes of:
(i) electing six Trustees;
(ii) ratifying the appointment of Ernst & Young LLP as the Trust's
independent auditors for the fiscal year ending July 31, 1997; and
(iii) 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 November 14, 1996,
to shareholders of record on October 31, 1996.
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 who has
delivered a proxy will not revoke the proxy. 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 appointment of Ernst &
Young LLP as independent auditors 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
<PAGE>
Page 2
Meeting for purposes of determining the presence of a quorum and as
unvoted for approving the election of Trustees 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 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 meeting. Any written notice revoking a
proxy should be sent to the Trust prior to the Annual Meeting at:
Property Capital Trust, 101 Federal Street, Boston, Massachusetts 02110,
Attention: Walter F. 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. 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 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 31, 1996 (the "Record Date"), 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 the Record
Date was 9,375,313. 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.
The following table sets forth, as of the Record Date, certain
information regarding each person (including any "group" as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) known (based solely upon filings with the
Securities and Exchange Commission (the "Commission") prior to such date
pursuant to Sections 13(d) or 13(g) of the Exchange Act) to own
beneficially (as such term is defined in Rule 13d-3 under the Exchange
Act) more than 5% of the outstanding Common Shares. In accordance with
the rules promulgated by the Commission, such ownership includes shares
currently owned as well as shares of which the named person has the right
to acquire beneficial ownership within 60 days, including, but not
limited to, shares which the named person
<PAGE>
Page 2
has the right to acquire through the exercise of any option, warrant or
right, or through the conversion of a security. Accordingly, more
than one person may be deemed to be a beneficial owner of the same
securities.
Percent of
NAME AND ADDRESS NUMBER OF SHARES OWNED OUTSTANDING SHARES
Warren E. Buffett 725,900 7.8%
1440 Kiewit Plaza
Omaha, Nebraska 68131
The following table sets forth, as of the Record Date, 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" (other than John Monkouski, whose employment with the Trust
terminated during fiscal 1996) 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 18,374{2/} {3/}
Walter M. Cabot 28,877{4/} {3/}
John A. Cervieri Jr. 190,867{5/6/} 2.0%
Robin W. Devereux 11,600{7/} {3/}
Graham O. Harrison 55,233{8/} {3/}
Walter F. Leinhardt 17,103{9/} {3/}
Robert M. Melzer 74,000{10/} {3/}
Glenn P. Strehle 17,858{11/} {3/}
Michael I. Sucoff 10,000{12/} {3/}
All Trustees and 423,912{13/} 4.5%
executive officers
as a group
(9 persons)
_______________
{1/}Nature of beneficial ownership is sole voting and investment power
except as indicated in subsequent notes.
{2/}Includes 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 7,500 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 17,500 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 19,090 Common Shares issuable under the Property Capital
Trust Amended and Restated Deferred Stock Plan for Non-Employee
Trustees (the "Trustee Deferred Stock Plan") and 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"). Does not include 4,000 Common Shares issuable
upon exercise of options which were granted under 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, 59,167 Common Shares issuable under
the Trustee Deferred Stock Plan and 4,000 Common Shares issuable upon
exercise of options granted under the Trustee Stock Option Plan. Does
not include 4,000 Common Shares issuable upon exercise of options which
were granted under the Trustee Stock Option Plan which have not yet
vested.
{7/}Includes 1,000 Common Shares held through an Individual Retirement
Account owned and controlled by Ms. Devereux and 6,000 Common Shares
issuable upon exercise of vested employee stock options granted under
the 1992 Employee Stock Option Plan. Does not include 14,000 Common
Shares issuable upon exercise of employee stock options which were
granted under the 1992 Employee Stock Option Plan which have not yet
vested.
{8/}Includes 43,428 Common Shares issuable under the Trustee Deferred
Stock Plan and 4,000 Common Shares issuable upon exercise of options
granted under the Trustee Stock Option Plan. Does not include 4,000
Common Shares issuable upon exercise of options which were granted
under the Trustee Stock Option Plan which have not yet vested.
<PAGE>
Page 5
{9/}Includes 400 Common Shares owned by Mr. Leinhardt's wife. Mr.
Leinhardt disclaims any beneficial interest in such shares. Also
includes 12,663 Common Shares issuable under the Trustee Deferred Stock
Plan and 4,000 Common Shares issuable upon exercise of options granted
under the Trustee Stock Option Plan. Does not include 4,000 Common
Shares issuable upon exercise of options which were granted under the
Trustee Stock Option Plan which have not yet vested.
{10/}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 17,000
Common Shares issuable upon exercise of vested employee stock options
granted under the 1992 Employee Stock Option Plan. Does not include
43,000 Common Shares issuable upon exercise of employee stock options
which were granted under the 1992 Employee Stock Option Plan which have
not yet vested.
{11/}Includes 12,858 Common Shares issuable under the Trustee Deferred
Stock Plan and 4,000 Common Shares issuable upon exercise of options
granted under the Trustee Stock Option Plan. Does not include 4,000
Common Shares issuable upon exercise of options which were granted
under the Trustee Stock Option Plan and 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 and
Treasurer 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.
{12/ }Does not include 12,500 Common Shares issuable upon exercise of
employee stock options granted under the 1992 Employee Stock Option
Plan which have not yet vested.
{13/ }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 six 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 the Record Date, certain
information concerning the six nominees:
<TABLE>
<CAPTION>
Principal Occupation
Nominee and Positions for Past 5 Years, Trustee
HELD WITH TRUST AFFILIATIONS AND AGE SINCE
<S> <C> <C>
Walter M. Cabot Senior Advisor of Standish, Ayer & 1982
Trustee(1)(3) Wood, Inc., Boston, MA, investment
counselors, since 1991; Director of
General Reinsurance Company,
Greenwich, CT, and Rockefeller
Financial Services, New York, NY;
Trustee and Treasurer, Wellesley
College, Wellesley, MA; Member, Board
of Governors, New England Medical
Center, Boston, MA (Age 63).
<PAGE>
Page 7
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 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
BankBoston, Boston, MA; Chairman and
Chief Executive Officer of Americana
Hotels and Realty Corporation,
Boston, MA; Trustee of New England
Medical Center, Boston, MA (Age 65).
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 73).
Walter F. Leinhardt Partner of Paul, Weiss, Rifkind, 1969
Trustee and Secretary(2) Wharton & Garrison, New York, NY, law
firm(4) (Age 64).
<PAGE>
Page 8
Robert M. Melzer President, Chief Executive Officer 1992
Trustee, President, Chief Executive and Chief Financial Officer of the
Officer and Chief Financial Trust since 1992; prior to 1992,
Officer(1) President and Treasurer of the Trust;
Director of PCA Institutional
Advisors, a former affiliate of the
Advisor, and its affiliates, Boston,
MA; Trustee, Beth Israel Deaconess
Medical Center, Boston, MA (Age 55).
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 Mutual Insurance Companies
and Liberty Financial Companies,
Boston, MA, SofTech, Inc., Waltham,
MA, and BankBoston, Boston, MA
(Age 60).
</TABLE>
_______________
(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 1996 and is performing legal services
for the Trust during the current fiscal year. See "Certain
Relationships and Related Transactions."
<PAGE>
Page 9
During fiscal 1996, there were eight meetings of the Board of
Trustees. The Trust has standing Audit, Executive and Compensation
Committees. The Audit Committee, which during fiscal 1996 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 1996 was composed
of Messrs. Cabot, Cervieri, Melzer and Edward H. Linde) is responsible,
among other things, for addressing major issues which arise between
scheduled Trustees' meetings. During fiscal 1996, 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 1996 was
composed of three Outside Trustees, Messrs. Cabot, Linde and Strehle) met
two times during fiscal 1996. 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 1997 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 1996, 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. In addition, each Trustee receives
$1,000 for each meeting attended. Trustees' fees totaled $135,000 in
fiscal 1996. The Trust also reimburses the Trustees for their expenses
incurred in attending meetings of the Trustees. For fiscal 1996,
reimbursed expenses totaled $2,216. Mr. Melzer receives no compensation
for serving as a Trustee.
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
<PAGE>
Page 10
credited to an account for the Trustee's benefit. Until
January 1, 1997, (i) 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 (the "AMEX") as of the date the fees would have
been paid, and (ii) share units are 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 1996, all of the non-employee Trustees elected to
participate in the Trustee Deferred Stock Plan with respect to all fees
payable to them.
During fiscal 1996, the Trustees exercised their right 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. Effective January 1, 1997, the Trustees can
direct that fees may be deemed invested in cash equivalents or
alternative investments instead of Common Shares and that distributions
on stock held in the trust be held in cash or invested in cash
equivalents or alternative investments.
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. 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.
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
<PAGE>
Page 11
executive officers of the Trust during the fiscal years ended July 31,
1996, 1995 and 1994 for services rendered in all capacities to the Trust
and its subsidiaries.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
Long-term
ANNUAL COMPENSATION COMPENSATION
---------------------- ----------------
Fiscal Common
Year Shares
NAME AND PRINCIPAL POSITION ENDED Underlying
Other Annual Options All Other
Salary Bonuses Compensation Granted Compensation
$ $ $ # $
-------- -------- --------- ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Melzer 7/31/96 241,505 0 0 0 9,701(5)
President, Chief Executive 7/31/95 232,207 30,000 0 35,000(2) 8,588(6)
Officer and Chief Financial 7/31/94 216,000 25,000 0 25,000(4) 8,682(7)
Officer
William A. Bonn 7/31/96 204,769 76,000 0 0 9,684(5)
Senior Vice President, 7/31/95 177,788 30,000 0 12,500(2) 8,598(6)
General 7/31/94 175,000 15,000 0 12,500(4) 8,422(7)
Counsel and Assistant
Secretary
Michael I. Sucoff 7/31/96 129,850 48,000 0 0 8,234(5)
Vice President 7/31/95 111,952 20,000 0 10,000(2)(3) 7,011(6)
7/31/94 106,000 10,000 0 7,500(4) 4,618(7)
Robin W. Devereux 7/31/96 119,827 43,000 0 0 7,592(5)
Vice President 7/31/95 92,058 25,000 0 10,000(2) 6,344(6)
and Treasurer 7/31/94 88,000 10,000 0 10,000(4) 5,011(7)
John J. Monkouski 7/31/96 90,479(8) 0 0 0 5,102(5)
Former Vice President 7/31/95 120,000 10,000 0 5,000(2) 4,493(6)
7/31/94 118,000 10,000 0 5,000(4) 2,823(7)
</TABLE>
_______________
(1) The column designated by the Securities and Exchange Commission ("SEC") for
the reporting of payouts of certain long-term compensation has been
eliminated as no such payouts were made during the period covered by the
table.
(2) 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 AMEX 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.
(3) 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 AMEX 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.
<PAGE>
Page 12
(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 AMEX 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) 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 ($9,413 for Mr. Melzer, $9,396 for Mr. Bonn,
$5,051 for Mr. Monkouski, $7,946 for Mr. Sucoff, and $7,304 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) ($288 for each of Messrs. Melzer, Bonn, Sucoff and Ms. Devereux
and $51 for Mr. Monkouski).
(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 ($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) ($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 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, and Monkouski, Sucoff, and
Ms. Devereux).
(8) During fiscal 1996, Mr. Monkouski's annual salary was $120,000. He
terminated his employment in October 1995 and received $90,479 in fiscal
1996, representing his salary through his date of termination and severance
payments.
INCENTIVE COMPENSATION AGREEMENT
The following sets forth certain information concerning the incentive
compensation arrangement with Robert M. Melzer.
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
Estimated Future Payouts under Non-Stock
PRICE-BASED PLANS
----------------------------------------------------
NAME Number of Shares, Units Performance or Other THRESHOLD TARGET MAXIMUM
OR OTHER RIGHTS Period UNTIL MATURATION OR
PAYOUT
<S> <C> <C> <C> <C> <C>
Robert M. Melzer 250,000 See (1) N/A
</TABLE>
(1) As of August 25, 1995, the Trust entered into an Incentive Compensation
Agreement (the "Incentive Compensation Agreement") with Mr. Melzer. Under
the Incentive Compensation Agreement, Mr. Melzer will receive cash
compensation equal to the amount he would have realized if he had purchased
on May 24, 1995 (the date of the adoption by the Trustees of the 1995
Business Plan (as defined below)), 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, 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 deemed dividends and other distributions
being applied first to pay the interest on and principal of the Phantom
Loan. Once the Phantom Loan has been discharged, Mr. Melzer is to be paid
in cash an amount equal to all such deemed dividends and other
distributions. Upon termination of Mr. Melzer's employment with the Trust,
whether such termination results from Mr. Melzer's discharge by the Trust,
his election to leave the Trust, death, 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
any such payment 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. As of July 31, 1996, the
outstanding principal of the Phantom Loan, together with unpaid interest
thereon, was $1,053,687, and the market value of the Phantom Shares was
$1,968,750.
<PAGE>
Page 13
STOCK OPTION GRANTS
During fiscal 1996 there were no stock option grants to the
executive officers. The Trust does not grant stock appreciation rights
("SARs") of any kind.
OPTION EXERCISES/VALUE OF UNEXERCISED OPTIONS
The following table sets forth certain information concerning
unexercised options to purchase Common Shares of the Trust held at the
end of fiscal 1996 by the named executive officers. No named executive
officers have any SARs.
Aggregated Option/Exercises in Last Fiscal Year and
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Common Shares
Underlying Unexercised Value of Unexercised
Shares Options at Fiscal in-the-money Options
Acquired on Value YEAR-END (#) AT JULY 31, 1996(1)($)
NAME EXERCISES (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Robert M. Melzer 0 $0 17,000 43,000 $27,250 $ 71,500
William A. Bonn 0 $0 7,500 17,500 $11,875 $ 28,750
John J. Monkouski 0 $0 0 0 $ 0 $ 0
Michael I. Sucoff 0 $0 0 12,500 $ 0 $ 19,750
Robin W. Devereux 0 $0 6,000 14,000 $ 9,500 $ 23,000
</TABLE>
_______________
(1) Based upon the closing sale price of the Common Shares on July 31, 1996
($7.875) on the AMEX minus the option exercise price ($6.125 and $6.375) of
in-the-money stock options. The strike prices on the options were reduced
by $2.65 per share on August 23, 1996 pursuant to the terms of the stock
option agreements, and the value of unexercised in-the-money options
increased accordingly.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
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
<PAGE>
Page 14
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 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.
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
<PAGE>
Page 15
or within six months after a change of control) or if his
employment terminates by reason of his death or disability.
BOARD OF TRUSTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996 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.
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 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 1996 which are
described below. See "Certain Relationships and Related Transactions."
Mr. Leinhardt participated in the Board's compensation discussions
concerning Mr. Melzer during fiscal 1996.
COMPENSATION COMMITTEE'S REPORT ON COMPENSATION
The Trust had a standing Compensation Committee during fiscal
1996 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 Board
of Trustees. Mr. Melzer did not participate in discussions regarding his
own compensation.
During fiscal 1996, 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 and
health insurance. The Compensation Committee fixed the annual salary of,
and awarded cash bonuses to, the executive officers of the Trust subject,
in the case of the salary 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. During fiscal 1996,
the Compensation Committee did not award stock options to any of the
executive officers. In order to motivate the
<PAGE>
Page 16
Trust's executive officers to remain with the Trust during the
implementation of the new business plan for the Trust (the
"1995 Business Plan"), the terms of all outstanding options were
amended by the Compensation Committee to provide for automatic
vesting upon (a) termination of an executive's employment with the Trust
where such termination results from the contraction of the Trust or (b)
when the exercise price of such options falls below $2.00. Subsequent
to the end of fiscal 1996, the Compensation Committee amended the terms
of the outstanding options to substitute in lieu of the vesting trigger
referred to in clause (b) above, the declaration of a dividend by
the Trustees which when distributed would reduce, in the opinion of the
Compensation Committee, the exercise price of such options to no more
than $2.00.
In establishing officers' salaries and bonuses for the 1996
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 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. The Compensation Committee also took account
of the fact that under the 1995 Business Plan the Trust would go out of
business, and based its salary and bonus determinations on the need to
encourage the executive officers to remain with the Trust as its business
is wound down.
With regard to Mr. Melzer, the Compensation Committee made the
determination during fiscal 1995 that if the Trust's Business Plan was to
be successfully implemented, it was essential that the Trust retain Mr.
Melzer's services until all of the Trust's assets have been disposed of.
The Compensation Committee also determined that because the
implementation of the Trust's Business Plan will result in the
termination of the Trust, a meaningful incentive should be offered to Mr.
Melzer to help secure his continuing services. It was for this reason
that the Compensation Committee recommended, and the Trustees (Mr. Melzer
not voting) approved, the Incentive Compensation Agreement for Mr.
Melzer. This incentive compensation rewards Mr. Melzer in direct
proportion to the amount distributed to the Trust's shareholders in
implementation of the Business Plan.
With Mr. Melzer's incentive compensation in place, the
Compensation Committee has deemed it appropriate to limit Mr. Melzer's
salary increase and bonus.
<PAGE>
Page 17
As a result, for fiscal 1996 Mr. Melzer was awarded a salary increase
designed merely to keep pace with the rate of inflation and he was not
awarded a bonus.
By the Fiscal 1996 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 AMEX 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, 1991 and ended on the last day of the Trust's last
completed fiscal year, July 31, 1996. The graph assumes an investment of
$100 on August 1, 1991, 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]
AMEX Market NAREIT
DATE PCT INDEX HYBRID INDEX
7/31/91 100.00 100.00 100.00
7/31/92 91.83 105.59 106.51
7/31/93 115.27 118.66 111.77
7/31/94 128.78 118.85 107.85
7/31/95 182.35 142.08 121.83
7/31/96 254.34 146.49 172.68
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,
1996. The graph is included in order to
<PAGE>
Page 18
demonstrate the performance of the Trust following a transition on August
1, 1992 from being advised by an outside advisor to being managed by its
own officers and employees.
[Performance Graph filed with Securities
and Exchange Commission under Form SE]
AMEX Market NAREIT
DATE PCT INDEX HYBRID INDEX
7/31/92 100.00 100.00 100.00
7/31/93 125.53 112.38 130.61
7/31/94 140.24 112.56 130.68
7/31/95 198.56 134.56 143.62
7/31/96 276.96 138.74 184.00
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 or was a general partner (referred to
collectively as the "Subject Partnerships") and an advisory agreement
with respect to a loan participation in which the Trust served as the
lead lender (referred to as the "Lisle Participation").
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
<PAGE>
Page 19
Advisory Agreements; the Trust's share of such additional amounts
aggregated $235,041 in fiscal 1996. PCAIA received the remaining
50% of such payments in excess of $150,000. Excluded from the
foregoing arrangement is the termination fee pursuant to the
PCA Crossroads Associates, Ltd. ("Crossroads") advisory agreement.
In October 1995, Crossroads sold its investment and a termination fee of
$1,214,636 was paid by Crossroads to PCAIA. The net gain on sale to
Crossroads after payment of the fee was $14,000,000. The Trust was
a 25% general partner in Crossroads.
Commencing on August 1, 1997, the Trust may terminate the
foregoing sharing arrangement and thereby receive 100% of all payments
under the Advisory Agreements 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
(subject to certain reductions), calculated, however, without reference
to payments attributable to properties sold or otherwise disposed of
during such fiscal years. The Trust does not expect that it will
terminate the foregoing arrangements by paying the Buy-Out Amount.
During fiscal 1996, the Trust paid legal fees in the amount of
$327,523 (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.
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 1997. 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.
<PAGE>
Page 20
ANNUAL REPORT; INCORPORATION BY REFERENCE
The 1996 Form 10-K (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.
SUBMISSION OF PROPOSALS FOR 1997 ANNUAL MEETING
The 1997 Annual Meeting of Shareholders is scheduled to be held
on November 21, 1997. 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 August 19, 1997.
By Order of the Trustees,
WALTER F. LEINHARDT,
Secretary
Boston, Massachusetts
November 14, 1996
