<PAGE> 1
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:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
Banyan Strategic Land Fund II
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C>
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(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 (set forth the amount on
which the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
</TABLE>
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
<PAGE> 2
PRELIMINARY COPY
[BSLFII LETTERHEAD]
SUBJECT TO COMPLETION ________, 1997
September __, 1997
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Banyan Strategic Land Fund II ("Banyan" or the "Company") to be held at the
Metropolitan Club, 233 South Wacker Drive, 67th Floor, Chicago, Illinois 60606,
on October 21, 1997, at 10:00 a.m., local time (the "Annual Meeting").
At the Annual Meeting, the holders of shares of Banyan's common stock of
record as of September 4, 1997 (the "Stockholders") will be asked to consider
and vote upon, among other things, proposals to elect six individuals (the
"Nominees") to Banyan's Board of Directors, to approve and adopt the Amended and
Restated Certificate of Incorporation of the Company (the "Restated
Certificate"), and Amended and Restated Bylaws of the Company (the "Restated
Bylaws").
Details of the Proposals and certain additional information regarding
Banyan are contained in the attached Proxy Statement, which you are encouraged
to read carefully. The Proposals arise from a financing transaction Banyan
completed earlier this year. On April 30, 1997, Banyan entered into an
exchange agreement (the "Exchange Agreement") with Equis Financial Group
Limited Partnership ("EFG"), a Massachusetts limited partnership, whereby
affiliates of EFG purchased 1,987,000 shares of Banyan common stock for cash
consideration of $2,980,500 and debt financing in the amount of approximately
$4.4 million. The Exchange Agreement requires Banyan to, among other things,
ask its stockholders to approve and adopt the Restated Certificate and the
Restated Bylaws.
Under the terms of the Exchange Agreement, following stockholder election
of the Nominees and stockholder approval of the Restated Certificate and the
Restated Bylaws, Banyan will declare and pay a distribution of $0.20 per share
to the Stockholders, which is expected to be treated as a non-taxable return of
capital. The Board of Directors believes that the Restated Certificate and the
Restated Bylaws will benefit the Stockholders in many ways.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE RESTATED CERTIFICATE
AND THE RESTATED BYLAWS AND BELIEVES THAT THEY ARE FAIR TO AND IN THE BEST
INTEREST OF THE COMPANY AND ITS STOCKHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT
ALL STOCKHOLDERS VOTE FOR APPROVAL AND ADOPTION OF THE RESTATED CERTIFICATE AND
RESTATED BYLAWS.
In addition to voting on the Restated Certificate and Restated Bylaws, you
are being asked to concur in the selection of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997. Whether or
not you plan to attend the Annual Meeting, please complete, sign and date the
accompanying proxy card and return it in the enclosed prepaid envelope. You may
revoke your proxy in the manner described in the accompanying Proxy Statement at
any time before it has been voted at the
<PAGE> 3
Letter to Stockholders
September ____,1997
Page 2
Annual Meeting. If you attend the Annual Meeting, you may vote in person, even
if you have previously returned your proxy card. Your prompt cooperation will
be greatly appreciated. This solicitation is authorized by and is made on
behalf of the Company's Board of Directors.
Sincerely,
BANYAN STRATEGIC LAND FUND II
Leonard G. Levine
President
<PAGE> 4
BANYAN STRATEGIC LAND FUND II
150 SOUTH WACKER DRIVE, SUITE 2900
CHICAGO, ILLINOIS 60606
312-683-3670
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Banyan Strategic Land Fund II:
Notice is hereby given that the annual meeting of stockholders (the
"Meeting" or the "Annual Meeting") of Banyan Strategic Land Fund II, a Delaware
corporation ("Banyan" or the "Company"), will be convened at The Metropolitan
Club, 233 South Wacker Drive, Chicago, Illinois, on October 21, 1997, at 10:00
a.m., local time (the "Meeting Date"). All stockholders of the Company are
entitled to attend the Meeting. The Annual Meeting will be held for the
following purposes:
(1) To elect six directors to hold office until the 1997, 1998 and 1999
annual meetings of Stockholders or otherwise as provided in the
Company's Bylaws;
(2) To concur in the selection of Ernst & Young LLP as the Company's
independent auditor for the fiscal year ending December 31, 1997;
(3) To consider and vote upon a proposal to approve and adopt the Amended
and Restated Certificate of Incorporation of the Company;
(4) To consider and vote upon a proposal to approve and adopt the Amended
and Restated Bylaws of the Company; and
(5) To transact any other business as may properly come before the Meeting,
or any adjournment or postponement thereof.
Only stockholders of record at the close of business on September 4,
1997 are entitled to receive notice of and to vote at the Meeting or any
adjournment or postponement thereof (the "Eligible Holders"). A list of
Eligible Holders will be available for inspection at the Company's offices for
at least 10 days prior to the Meeting.
A proxy statement and form of proxy are enclosed. Whether or not you
expect to attend the Annual Meeting, it is important that you fill in, sign,
date and mail in the proxy in the enclosed envelope so that your shares may be
voted for you.
By order of the Board of Directors:
Robert G. Higgins
Secretary
The Company's 1996 Annual Report on Form 10-K is enclosed with this notice.
<PAGE> 5
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS OF
BANYAN STRATEGIC LAND FUND II
________________, 1997
This proxy statement (the "Proxy Statement") is furnished to the holders of
shares of the common stock, par value of $0.01 of Banyan Strategic Land Fund II
(the "Common Stock" or the "Shares"), a Delaware corporation (the "Company" or
"Banyan"), in connection with the solicitation of proxies by the Company's board
of directors (the "Directors" or the "Board") for use at the annual meeting of
Stockholders. The Company's Bylaws (the "Bylaws") require the Directors to call
and hold an annual meeting of Stockholders not less than 30 days after delivery
of the Company's Annual Report and within six months after the end of each
fiscal year. The Directors have delayed the annual meeting beyond this
six-month period in order to present to the Stockholders at the annual meeting
proposals relating to the Exchange Agreement with Equis Financial Group Limited
Partnership, without the expense of holding a special meeting to consider these
proposals separately. The annual meeting of Stockholders (the "Annual Meeting")
will be convened on October 21, 1997, at approximately 10:00 a.m., local time,
and any adjournment or postponement thereof will be announced at such meeting.
Copies of this Proxy Statement, and the enclosed form of proxy were first sent
or given to Stockholders on or about _____________, 1997. Stockholders who wish
to attend the Annual Meeting should contact the Company at (312) 683-3670 so
that arrangements can be made.
The Company will bear all costs in connection with the solicitation of
proxies, including the cost of preparing, printing and mailing this Proxy
Statement. In addition to the use of the mails, proxies may be solicited by the
Directors, the Company's officers or by employees of EFG or Banyan Management
Corp., which provide administrative services to the Company. None of these
individuals will be additionally compensated, but they may be reimbursed for
out-of-pocket expenses in connection with the solicitation. For further
information regarding EFG and Banyan Management Corp., see "Matters to be
Considered by Stockholders - Proposals Number Three and Four" and "Certain
Relationships and Related Transactions. " Arrangements will also be made with
brokerage houses, banks and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of the Common
Stock held of record by those persons, and the Company may reimburse these
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses incurred in connection therewith. Further, the Company has retained
the services of Corporate Investor Communications, Inc. to assist in the
solicitation of proxies for the Annual Meeting at a fee payable by the Company
of $5,000, plus out-of-pocket expenses.
Shares represented by properly executed proxies in the accompanying form
received by the Board prior to the Annual Meeting will be voted at the Annual
Meeting. Shares not represented by properly executed proxies will not be voted.
If a Stockholder specifies a choice with respect to any matter to be acted upon,
the Shares represented by that proxy will be voted as specified. If the
Stockholder does not specify a choice, in an otherwise properly executed proxy,
with respect to any proposal referred to therein, the Shares represented by that
proxy will be voted with respect to that proposal in accordance with the
recommendations of the Board described herein. A Stockholder who signs and
returns a proxy in the accompanying form may revoke it by: (i) giving written
notice of revocation to the Company before the proxy is voted at the Annual
Meeting; (ii)
1
<PAGE> 6
executing and delivering a later-dated proxy before the proxy is voted at the
Annual Meeting; or (iii) attending the Annual Meeting and voting the Shares in
person.
The close of business on September 4, 1997 has been fixed as the date for
determining those Stockholders entitled to notice of and to vote at the Annual
Meeting (the "Record Date"; stockholders of record as of such date, the
"Stockholders"). On the Record Date, the Company had _________ Shares
outstanding, each of which entitles the holder thereof to one vote at the Annual
Meeting. Only Stockholders of record as of the Record Date will be entitled to
vote at the Annual Meeting. The presence of a majority of the outstanding
shares of Common Stock, represented in person or by proxy at the Annual Meeting,
will constitute a quorum. For the proposal to elect Directors, the six nominees
receiving the highest vote totals will be elected as directors of the Company.
Proposals Number Two will be decided by the affirmative vote of a majority of
the shares present in person or represented by proxy at the Annual Meeting and
entitled to vote, a quorum being present. Approval of Proposals Number Three
and Number Four requires the affirmative vote of a majority of the outstanding
shares of Common Stock. Abstentions and broker non-votes will not be included
in calculating the number of shares present in person or by proxy at the Annual
Meeting and, accordingly, will not affect the outcome of the election of
directors. On any other matters, an abstention or broker non-vote will have the
effect of a vote against the proposal.
The mailing address of the principal executive offices of the Company is
150 South Wacker Drive, Suite 2900, Chicago, Illinois 60606.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
owners of Common Stock as of the Record Date by: (i) each person who is known
by the Company to own more than five percent of the Common Stock (together with
such person's address); (ii) the directors and executive officers of the Company
named in the executive compensation table; and (iii) all current officers and
directors as a group. Share amounts and percentages shown for each person or
entity are adjusted to give effect to shares of the Common Stock that are not
outstanding but may be acquired by a person or entity upon exercise of all
options and warrants exercisable by such entity or person within sixty days of
the Record Date. However, those shares of Common Stock are not deemed to be
outstanding for the purpose of computing the percentage of outstanding shares
beneficially owned by any other person.
2
<PAGE> 7
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Shares Beneficially Owned Percent of
Name of Director or Officer Number of Shares Total Shares
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
AFG Hato Arrow Limited Partnership 1,987,000 (1) 16.7%
AFG Dove Arrow Limited Partnership
AIP/Larkfield Limited Partnership
c/o Equis Corporation
88 Broad Street
Boston, Massachusetts 02110
Leonard G. Levine, President 194,647 (2) 1.6%
James A. Coyne, Chief Operating Officer and Nominee 0 0%
Walter E. Auch, Sr., Director 66,000 (3) Less than 1%
Gerald L. Nudo, Director 55,000 (3) Less than 1%
Robert M. Ungerleider, Director 56,000 (3) Less than 1%
Gary D. Engle, Director 0 0%
Joseph W. Bartlett, Nominee 0 0%
All Directors, Nominees and Officers of the
Company as a group (seven persons) 371,647 3.0%
</TABLE>
(1) Certain affiliates of Equis Financial Group Limited Partnership ("EFG") have
filed reports with the Securities and Exchange Commission (the "SEC")
pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
amended, indicating ownership of five percent (5%) or more of the
outstanding Common Stock. As of August ___, 1997: (i) AFG Hato Arrow
Limited Partnership owns 635,437 shares, amounting to 5.3% of the Common
Stock; (ii) AFG Dove Arrow Limited Partnership owns 616,734 shares,
amounting to 5.2% of the Common Stock; and (iii) AIP/Larkfield Limited
Partnership owns 734,829 shares, amounting to 6.2% of the Common Stock.
Gary D. Engle, a director of the Company, has effective control over the
operation of each of these limited partnerships.
(2) Includes options granted under the 1994 Executive and Directors Stock
Option Plan to purchase 120,000 shares of Common Stock.
(3) Includes options granted under the 1994 Executive and Directors Stock
Option Plan to purchase 50,000 shares of Common Stock.
The Company is not aware of any other person who, alone or as part of a
group, beneficially owns more than five percent of the outstanding shares of
Common Stock as of the Record Date. The Company is not aware of any
arrangements, the operation of which may at a subsequent date result in a change
of control of the Company.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file initial
statements of beneficial ownership (Form 3), and statements of changes in
beneficial ownership (Forms 4 or 5), of Common Stock and other equity securities
of the Company with the Securities
3
<PAGE> 8
and Exchange Commission and the National Association of Securities Dealers,
Inc. (the "NASD"). The SEC requires officers, directors and greater than ten
percent stockholders to furnish the Company with copies of all these forms filed
with the SEC or the NASD.
To the Company's knowledge, based solely on its review of the copies of
these forms received by it, or written representations from certain reporting
persons that no additional forms were required for those persons, the Company
believes that all filing requirements applicable to its officers, directors, and
greater than ten percent beneficial owners were complied with during 1996.
MATTERS TO BE CONSIDERED BY STOCKHOLDERS
PROPOSAL NUMBER ONE: ELECTION OF DIRECTORS
Six individuals will be elected at the Annual Meeting to serve as Directors
of the Company. In Proposal Number Four, the Stockholders are being asked to
consider and vote upon a proposal to approve and adopt Amended and Restated
Bylaws of the Company. If the proposed Amended and Restated Bylaws are approved
at the Annual Meeting, the Board of Directors will be divided into three classes
of Directors. The first class will be elected for a term expiring at the 1997
Annual Meeting, the second class will be elected for a term expiring at the 1998
Annual Meeting and the third class will be elected for a term expiring at the
1999 Annual Meeting. At the 1997 Annual Meeting and thereafter, Directors will
be elected to a full term of three years to succeed those directors whose terms
are expiring. If Proposal Number Four is approved at the Annual Meeting, then
the Nominees for the class whose term will expire at the 1997 Annual Meeting
will be James A. Coyne and Gerald L. Nudo, the Nominees for the class whose term
will expire at the 1998 Annual Meeting will be Joseph W. Bartlett and Robert M.
Ungerleider, and the Nominees for the class whose term will expire at the 1999
Annual Meeting will be Walter E. Auch and Gary D. Engle. If Proposal Number
Four is not approved by the Stockholders at the Annual Meeting, then the
Nominees, if elected, will serve terms expiring at the 1997 Annual Meeting.
Unless instructions to the contrary are given, the persons named as proxy
voters in the accompanying proxy, or their substitutes, will vote for the
following nominees for Director with respect to all proxies received by the
Company. If any nominee should become unavailable for any reason, the votes
will be cast for a substitute nominee designated by the Board. The Directors
have no reason to believe that the nominees named will be unable to serve if
elected. The current Directors, all of whom are being nominated for re-election,
and the additional Nominees for Director are as follows:
4
<PAGE> 9
<TABLE>
<CAPTION>
Year During
Which
Individual First
Became a Other Principal Occupation(s)
Name Age Director During Past 5 Years
<S> <C> <C> <C> <C>
Walter E. Auch 75 1987 Prior to retiring, Mr. Auch was the Chairman and
Chief Executive Officer of the Chicago Board Options
Exchange. Prior to that time, Mr. Auch was Executive
Vice President, Director and a member of the
executive committee of Paine Webber. Mr. Auch is a
Director of Pimco Advisors L.P., Geotek
Communications, Inc., Smith Barney Concert Series
Funds, Smith Barney Trak Fund, The Crimson Partners
Funds and Nicholas Applegate Funds. He is also a
Trustee of Hillsdale College and the Arizona Heart
Institute. Mr. Auch is also a trustee of Banyan
Strategic Realty Trust and a Director of Legend
Properties, Inc. (f/k/a Banyan Mortgage Investment
Fund) and Banyan Management Corp.
Gerald L. Nudo 47 1987 Mr. Nudo has been a Vice President at Draper &
Kramer, Inc., a Chicago-based real estate management
and development company, since 1997. From 1990 to
1997, Mr. Nudo was a Senior Vice President of Mesirow
Realty Finance Inc., a subsidiary of Mesirow
Financial Corp. Mr. Nudo is also a certified public
accountant and a licensed real estate broker in
Illinois.
Robert M. Ungerleider 55 1987 Currently of counsel to the law firm of Lane Felcher
Kurlander & Fox, Mr. Ungerleider has founded,
developed and sold several startup ventures including
Verifone Finance, an equipment leasing service,
Smartpage, a paging service company, and Financial
Risk Underwriting Agency, Inc., an insurance firm
specializing in financial guarantee transactions.
Mr. Ungerleider is also a Director of Legend
Properties, Inc. (f/k/a Banyan Mortgage Investment
Fund).
</TABLE>
5
<PAGE> 10
<TABLE>
Year During
Which
Individual First
Became a Other Principal Occupation(s)
Name Age Director During Past 5 Years
<S> <C> <C> <C>
Gary D. Engle 48 1997 Mr. Engle is President and Chief Executive Officer of
EFG, which he joined in 1990 as Executive Vice
President. Mr. Engle purchased a controlling
interest in EFG in December, 1994. He is also
President of AFG Realty, Inc. From 1987 to 1990,
Mr. Engle was a principal and co-founder of Cobb
Partners Development, Inc., a real estate and
mortgage banking company, with principal offices in
Florida. From 1980 to 1987, Mr. Engle served in
various capacities with Arvida Disney Company, a
large scale community real estate development company
owned by the Walt Disney Company with real estate
development projects worldwide.
Joseph W. Bartlett 63 Nominee Mr. Bartlett became a partner in the law firm of
Morrison & Foerster LLP in March 1996. From July
1991 until March 1996 he was a partner in the law
firm of Mayer, Brown & Platt. Mr. Bartlett is also
a Director of Cyrk, Inc.
James A. Coyne 37 Nominee Mr. Coyne has been Chief Operating Officer of the
Company since 1997. Mr. Coyne is Senior Vice
President/Capital Markets of Equis Financial Group
and is also Vice President of AFG Realty Inc., an
affiliate of EFG. He is responsible for EFG's real
estate activities in both the United States and
Australia. Mr. Coyne joined EFG in 1989, remained
until May 1993, and rejoined EFG in November 1994
immediately prior to the change in control. From May
1993 through November 1994 he was with the Raymond
Company, a private investment firm, where he was
responsible for obtaining financing for corporate and
real estate acquisitions.
</TABLE>
The Board is required to meet at least four times per year either in person
or by telephonic conference. The Board met five times in 1996. The Directors
have not established any nominating, compensation or other committees performing
similar functions other than an audit committee which is comprised of all of the
Directors and which met once during 1996.
6
<PAGE> 11
RECOMMENDATION OF THE BOARD: The Board hereby recommends and nominates each
of the following Nominees for election as Directors of the Company by the
Stockholders at the Annual Meeting to serve until the annual meeting of
Stockholders indicated in parentheses, or as otherwise provided in the Bylaws:
Messrs. Coyne and Nudo (terms expiring at the 1997 Annual Meeting); Messrs.
Bartlett and Ungerleider (terms expiring at the 1998 Annual Meeting); and
Messrs. Auch and Engle (terms expiring at the 1999 Annual Meeting).
Vote Required. The six nominees receiving the highest vote totals will be
elected as Directors of the Company.
PROPOSAL NUMBER TWO: SELECTION OF INDEPENDENT AUDITOR
The Company's financial statements, including those for the fiscal year
ended December 31, 1996, are included in the Annual Report previously furnished
to all Stockholders. The year-end statements have been audited by the
independent firm of Ernst & Young LLP which has served as the Company's
independent auditor since the fiscal year-end December 31, 1989. The total fees
paid or accrued to Ernst & Young LLP in connection with the fiscal year ended
December 31, 1996 audit were approximately $60,000. The Board believes that
Ernst & Young LLP is knowledgeable about the Company's operations and accounting
practices and is well qualified to act in the capacity of independent auditor.
Therefore, the Board has selected Ernst & Young LLP as the Company's independent
auditor to examine its financial statements for the fiscal year ended December
31, 1997. Although the selection of an auditor does not require a Stockholder
vote, the Board believes it is desirable to obtain the concurrence of the
Stockholders to this selection. Due to the difficulty and expense involved in
retaining another independent firm on short notice, the Board does not
contemplate appointing another firm to act as the Company's independent auditor
for fiscal year ending December 31, 1997 if the Stockholders do not concur in
the appointment of Ernst & Young LLP. Instead, the Board will consider the vote
as advice in making its selection of an independent auditor for the following
year.
Representatives of Ernst & Young LLP are expected to be present at the
Meeting and will have the opportunity to make a statement if they so desire and
will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD: The Board considers Ernst & Young LLP to be
well-qualified and recommends that the Stockholders concur in the following
resolution which will be presented for a vote of the Stockholders at the Annual
Meeting:
RESOLVED, that the Stockholders concur in the appointment, by the Board, of
Ernst & Young LLP to serve as the Company's independent auditor for the fiscal
year ended December 31, 1997.
Vote Required. The affirmative vote of a majority of the votes cast by
Stockholders present in person or by proxy and eligible to vote at the Meeting,
a quorum being present, is required for the adoption of the foregoing
resolution.
7
<PAGE> 12
PROPOSALS NUMBER THREE AND FOUR: AMENDMENT AND RESTATEMENT OF CERTIFICATE
OF INCORPORATION AND BYLAWS OF THE COMPANY.
INTRODUCTION
In the opinion of the Board of Directors of the Company, the current
Certificate of Incorporation of the Company and Bylaws of the Company, which
include numerous provisions relating to corporate governance and business
activities of the Company intended to protect investors in the Company when the
Company was operating as a real estate investment trust ("REIT"), are not
appropriate now that the Company is no longer operating as a REIT. The proposed
Restated Certificate and Restated Bylaws are intended to protect the
Stockholders and to provide the Board of Directors with the flexibility to
enable the Board to manage the affairs of the Company efficiently, and are
intended to be consistent with the corporate charters of other non-REIT
corporations organized under the Delaware Corporation Law.
The Board of Directors of the Company is unanimously recommending to its
Stockholders that they approve and adopt: (i) an Amended and Restated
Certificate of Incorporation (the "Restated Certificate") of the Company; and
(ii) Amended and Restated Bylaws (the "Restated Bylaws") for the Company. The
complete texts of the proposed Restated Certificate of Incorporation and
proposed Restated Bylaws are attached as Appendix A and Appendix B,
respectively, to this Proxy Statement. The background for the proposal to
restate the Company's Certificate and Bylaws and a description of the principal
changes resulting from such restatements are set forth below.
BACKGROUND
The Board of Directors has determined that in order to maximize shareholder
value, the Company should pursue a new growth oriented business plan. The
Company was originally established in 1987 to invest primarily in short term
junior pre-development and construction mortgage loans, and was structured as a
REIT for tax purposes under applicable provisions of the Internal Revenue Code
of 1986.
In connection with its organization, the Company raised approximately $171
million, substantially all of which was invested in mortgage loans in accordance
with the Company's original business plan. The borrowers subsequently defaulted
on all of these loans and the Company foreclosed upon or threatened foreclosure
in respect to the underlying real estate assets. The Company adopted a plan to
preserve its assets and manage the properties it had acquired through
foreclosure and transactions in lieu of foreclosure until they could be disposed
of in an orderly manner. By 1995, most of the significant and readily salable
assets acquired through the foreclosure process had been sold and the Company
returned approximately $15.8 million in cash to its Stockholders pursuant to a
share repurchase program conducted through a one-time voluntary self-tender
offer. On March 20, 1996, the Company notified the Internal Revenue of its
intent to revoke its election to be taxed as a REIT in order to avoid the
adverse tax effects associated with the potential disposition or development of
its remaining real estate assets. The Company is now taxed as a corporation
under Subchapter C of the Internal Revenue Code.
The Company's new business plan provides for maximizing the value of the
Rancho Malibu property owned by the Company by completing the entitlement
process and developing the property. Further, the Company's plan contemplates
investments in other growth oriented opportunities that can be carried out on a
tax advantaged basis as a result of available net operating tax loss
carryforwards. Because of losses incurred during previous years, as of December
31, 1996, the Company has net operating loss carryforwards (including
8
<PAGE> 13
"built-in" losses) totaling approximately $93.5 million, which generally are
available to offset income generated from future business operations.
In April, 1997 affiliates of EFG acquired a significant equity position in
the Company. See "-- The Exchange" below and "Security Ownership of Certain
Beneficial Owners and Management." In addition to raising additional capital,
the Exchange will allow the Company to implement a business plan that benefits
from EFG's management, customer base, and access to capital markets.
EFG is an independent finance company founded in 1980. EFG is a party to
approximately $2 billion in leasing transactions and currently manages a leased
equipment portfolio with an acquisition cost of over $500 million. As a result
of EFG management's individual experience in real estate, in 1995 and 1996 EFG
successfully developed two properties, located in Sydney, Australia and
Washington, D.C., which are leased to a major university.
While EFG has historically provided equipment financing to its customers,
it has not fully exploited the opportunity to own and lease real property to
them. EFG expects that future real estate development and acquisition
opportunities presented to it would be presented to the Company. EFG's customer
base consists of over two hundred primarily investment grade multi-national
corporations.
With access to EFG's customer base, the Company expects to enjoy a steady
flow of investment opportunities. The Company's business plan related to future
investments contemplates acquiring assets that Equis's personnel have experience
in managing and that produce predictable revenue streams over a long period of
time. The Company will rely on EFG's experience in raising the capital to
finance such opportunities and expects that taxable income from such investments
will be offset by the Company's net operating loss carryforwards.
To implement the Company's business plan, the Board of Directors concluded
that it would be advisable for the Company to seek to raise additional capital
that would enable the Company to carry out the plan.
THE EXCHANGE
On April 30, 1997, the Company executed and delivered an Exchange Agreement
(as subsequently amended, the "Agreement") among the Company, Equis Exchange
L.L.C., a Massachusetts limited liability company ("Equis"), Equis Financial
Group Limited Partnership ("EFG") and certain partnerships affiliated with EFG.
Pursuant to the Agreement, the Company issued to Equis 1,987,000 shares of the
Common Stock at the price of $1.50 per share. In addition, Equis made a
three-year loan (the "Loan") to the Company in the amount of $4.4 million.
These transactions (collectively, the "Exchange") are expected to provide
capital to assist the Company in a new growth-oriented business plan, which
includes the development of the Company's Rancho Malibu property.
The Loan was disbursed into a segregated account, the proceeds of which are
not currently available to the Company. Earnings on the balance in the
segregated account will match the interest charged on the Loan, such that the
principal balance in the segregated account will remain undisturbed. If the
stockholders approve Proposals One, Three and Four, the balance in the
segregated account will be disbursed to the Company, the interest rate will
change to 10 percent per annum, the term will be fixed at three years and
mandatory principal reductions will be required, if and to the extent net
proceeds are received from the sale
9
<PAGE> 14
or refinancing of the Rancho Malibu property. If the stockholders approve the
Restated Certificate and Restated Bylaws, and elect the Nominees to the Board
on or before December 31, 1997, the Company has agreed to declare and pay a
$0.20 per share distribution to its stockholders of record as of the Record
Date. As a result of the Company's NOLs, this distribution is expected to be
treated as a non-taxable return of capital. If the stockholders do not approve
Proposals One, Three and Four by December 31, 1997, the Loan will be
accelerated and repaid by releasing the funds in the segregated account to
Equis, and the $0.20 per share distribution will not be paid.
Pursuant to the Agreement, the Administrative Services Agreement (the "BMC
Agreement") between the Company and Banyan Management Corp. ("BMC") was amended
to provide, among other things, for the immediate payment to BMC of the
termination fee required thereby in the amount of $251,823 and the transfer to
BMC's designee of the Company's ownership interest in BMC. The BMC Agreement
was amended rather than terminated in part to allow the Company to benefit from
the existing experienced management of the Company, who are employed by BMC or
whose salaries are included in the administrative costs for which the Company
reimburses BMC.
As required under the Agreement, the Company entered into an Administrative
Services Agreement with EFG (the "EFG Agreement") for certain administrative
and ministerial services, allowing the Company to obtain these services for a
lower cost than if they were obtained from BMC. Under the EFG Agreement, the
Company is required to reimburse EFG for EFG's actual costs in providing
services requested by the Company. The EFG Agreement may be terminated upon
thirty days' notice by EFG at any time or by the Company after June 30, 1998.
Upon termination of the EFG Agreement, the Company is required to pay EFG a
termination fee of $255,000, subject to increase on January 1 of each year to
reflect increases in the "consumer price index."
On April 30, 1997, Josephthal Lyon & Ross Incorporated ("Josephthal")
delivered a written opinion to the Board to the effect that, as of that date,
based upon the facts and circumstances as they existed at that time and subject
to certain limitations, the consideration paid by the Company pursuant to the
Agreement was fair, from a financial point of view, to the Company and its
stockholders. In rendering this opinion, Josephthal: (i) reviewed the
Agreement; (ii) reviewed certain historical financial, operating and other data
that were publicly available or provided by the Company concerning the Company,
including but not limited to: (a) a draft copy of Form 10-K for the period ended
December 31, 1996 of the Company; (b) Form 10-Q for the period ended September
30, 1996 of the Company; and (c) internally generated operating reports of the
Company; (iii) held discussions with members of the senior management of the
Company regarding the business and prospects of the Company; (iv) compared
certain financial and stock market information for the Company with similar
information for certain other companies that it deemed comparable to the
Company, including those which had been involved in a merger or acquisition
since January 1, 1996; and (v) performed such other studies and analyses and
considered such other factors as it deemed relevant, in whole or in part.
In connection with the Agreement, the Board of Directors appointed Mr. Gary
D. Engle, a principal of EFG, to fill a vacancy on the Company's Board of
Directors and named Mr. James A. Coyne, also a principal of EFG, as Chief
Operating Officer of the Company.
The principal differences between the current Certificate and Bylaws and
the proposed Restated Certificate and Restated Bylaws are summarized below. The
description is subject to the provisions of Delaware law and the full texts of
the proposed Restated Certificate and Restated Bylaws set forth as
10
<PAGE> 15
Appendix A and Appendix B, respectively. The Stockholders should carefully
review the entire text of the proposed Restated Certificate and Restated
Bylaws.
DIFFERENCES BETWEEN CURRENT AND PROPOSED CERTIFICATE OF INCORPORATION AND
BYLAWS
Change of Name. The Restated Certificate and Restated Bylaws reflect the
recommendation of the Board that the Company's name be changed from Banyan
Strategic Land Fund II to _________________________.
Perpetual Life. Under the Company's existing Certificate of Incorporation,
the duration of the Company's existence is limited to December 31, 2007. Under
the proposed Restated Certificate, the Company will, like most Delaware
corporations, have perpetual life.
Investment Advisor. At the time the Company was organized it entered into
an Advisory Agreement with VMS Realty Partners ("Advisor"). The principal
responsibility of the Advisor was to advise the Board of Directors of the
Company on the selection of investments to be made by the Company when it was
operating as a REIT. The current Bylaws contain numerous provisions intended to
separate the oversight responsibility of the Board from the advisory function of
the Advisor.
Because the Company is no longer a REIT and because it has long since
concluded the lending of funds invested in the Company by its original
investors, the Company no longer requires the services of an investment advisor,
and the Board believes it is in the best interests of the Company and its
Stockholders for the Company to be structured as a conventional business
corporation. Accordingly, the proposed Restated Bylaws do not contain
provisions relating to an investment advisor.
Authority of Directors. Section 10 of the current Bylaws prohibits or
restricts the Company's ability to enter into various transactions, including
transactions with affiliates, certain currency and securities transactions, real
estate investments, borrowings and the making of certain types of mortgage
loans. The proposed Restated Bylaws do not restrict the types of transactions
which the Company can enter into and do not restrict transactions between the
Company and affiliates. Although the Company proposes to eliminate these
restrictions from the Bylaws, the Board of Directors and the Company will
continue to be subject to disclosure and fiduciary duty requirements under
applicable state and federal laws.
Restrictions and Share Transfers. Section 7.8 of the current Bylaws sets
forth provisions intended to prevent any single stockholder or group of
affiliated Stockholders from acquiring more than 9.9% of the outstanding shares
of Common Stock of the Company. These provisions were included in order to
assure compliance by the Company with certain federal income tax regulations
applicable to real estate investment trusts ("REITS"). Article VII of the
proposed Restated Bylaws includes a similar provision intended to prohibit any
person from acquiring more than 4.9% of the outstanding shares of Common Stock
of the Company. This provision is designed to assist the Board in preserving
the benefits of the Company's existing net operating loss carryforwards ("NOLs")
(including "built-in" losses), which as of December 31, 1996 were approximately
$93.5 million. Under applicable federal income tax regulations, a corporation's
ability to use its NOLs will be substantially reduced if, during any three-year
period, there is a 50% change of ownership in the corporation, without reference
to persons holding less than 5% of the stock of the corporation. The proposed
provision will allow the Board to prevent a person from becoming a 5%
stockholder, as such a transaction would threaten the availability of the
Company's NOLs and the Company's ability to issue additional shares of Common
Stock without losing the benefit of the NOLs.
11
<PAGE> 16
If the Restated Bylaws are approved, the Company will conspicuously note
the restrictions on its newly-issued stock certificates. The Company also
would instruct its transfer agent not to recognize attempts to transfer the
Company's common stock in excess of the threshold established in the transfer
restrictions. The transfer agent also will have the right, before recognizing
a proposed transfer, to request an affidavit from a proposed transferee
regarding its ownership.
If an "Unauthorized Transfer" (one that would result in a transferee
acquiring more than 4.9% of the Company's outstanding shares of common stock)
purportedly occurs, then it would be considered void ab initio. However, the
transfer restrictions should not interfere with the settlement process. If a
seller has sold shares of common stock in a purported Unauthorized Transfer,
then the following steps would be taken:
1. Within thirty business days of learning of the purported
Unauthorized Transfer, the Company will deliver to the purported transferee (the
"Purported Transferee") of the shares (the "Prohibited Stock") a notice: (a)
stating that the Purported Transferee has purportedly received shares in a
transaction that constitutes an Unauthorized Transfer; and (b) demanding the
Purported Transferee to surrender or cause to be surrendered to an agent
designated by the Company (the "Agent") certificates representing the Prohibited
Stock and any dividends or distributions that the Purported Transferee has
received as a result of its ownership of the Prohibited Stock.
2. A Purported Transferee who has purportedly resold the Prohibited
Stock before receiving the notice will be required to transfer to the Agent the
proceeds of the sale, to the extent they exceed the amount that the Purported
Transferee paid for the Prohibited Stock in the unauthorized transfer, together
with any dividends or distributions that the Purported Transferee has received
on the Prohibited Stock. Unless the purported resale itself would violate the
transfer restrictions (in which case it would also be prohibited), the
transferee will be treated as the owner of the Prohibited Stock and as having
acquired such Prohibited Stock from the Purported Transferee acting in the
capacity as agent for the Company.
3. As soon as practicable after receiving the Prohibited Stock and
any dividends or distributions that the Purported Transferee received in respect
of the Prohibited Stock, the Agent will sell the Prohibited Stock and any
non-cash dividends or distributions in an arm's-length transaction (using best
efforts to consummate such sale on the Nasdaq). After applying the proceeds from
such sale toward reimbursing the Purported Transferee for the price paid for the
Prohibited Stock, the Agent will pay any remaining proceeds and any cash
dividends and distributions to organizations described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended, that the Company designates. In
no event shall the proceeds of any such sale by the Agent or the surrender of
dividends or distributions inure to the benefit of the Company or the Agent, but
such amounts may be used to reimburse expenses incurred by the Agent in
performing its duties prior to any reimbursement being made.
4. In addition to the remedies described above, any person who
knowingly engages in an Unauthorized Transfer or otherwise knowingly violates
the transfer restrictions will be liable to the Company for any costs and
damages incurred by the Company as a result of any such violation.
5. Upon demand by the Company, the shareholders will be required to
disclose in writing such information with respect to their direct and indirect
ownership of Common Stock as the Company deems necessary to ensure compliance
with the transfer restrictions.
12
<PAGE> 17
The transfer restrictions described above will remain in place until the
Board of Directors determines either that there are no longer available any NOLs
or that, notwithstanding the remaining availability of NOLs, maintenance of the
transfer restrictions is no longer in the best interests of the Company.
Calling of Stockholder Meetings. The Company's current Bylaws provide that
special meetings of the Stockholders may be called at the request of
Stockholders holding at least 10% of the outstanding shares of Common Stock. The
proposed Restated Bylaws provide that special meetings of the Stockholders may
be called at the request of Stockholders holding at least 30% of the outstanding
shares of Common Stock.
Staggered Board. The proposed Restated Bylaws provide that the Board of
Directors will be divided into three classes as nearly equal in number as
possible so that approximately one-third of the members of the Board of
Directors are elected each year, each to serve a three-year term. The current
Bylaws provide that the entire Board of Directors is elected each year at the
annual meeting of the Company. After careful consideration, the Board of
Directors of the Company believes that staggering the terms of members of the
Board of Directors will facilitate continuity and stability of leadership by
ensuring that experienced Directors familiar with the Company and its operations
are serving on the Board at all times. The proposed Restated Certificate and
Restated Bylaws therefore include provisions providing for a division of the
Board of Directors into three classes having staggered terms of three years each
as well as a provision which provides that a Director may be removed only by
vote of the Stockholders for cause. If the Stockholders approve Proposals
Number One, Two and Three, then each class of Directors will include an
individual who has served as a Director since 1987.
Under the proposed Restated Bylaws, the Board will consist of from four
to _____ directors, as fixed by the Stockholders at the Annual Meeting of
Stockholders. The number of Directors may be increased or decreased within
such limits by the Stockholders or the Board of Directors. Each class of the
Board will consist of approximately one-third of the total number of
Directors. Each Director will hold office until the annual meeting for the year
in which his term expires. If the number of Directors is changed, any increase
or decrease will be apportioned among the classes so as to maintain each class
as nearly equal in number as possible, provided that no decrease will affect the
term of any director then in office. The Bylaws of the Company currently
provide for a Board of Directors of between three and nine members, as fixed
from time to time by the Stockholders or the directors, with each Director to
hold office until the next annual meeting. Currently, the stockholders or the
Board can increase the number of Directors, provided that between successive
annual meetings, the Board may not increase the Board above (9) members.
The current Bylaws also provide that Directors may be removed with or
without cause by vote of holders of a majority of the outstanding shares of
Common Stock. The proposed Restated Bylaws provide that a Director may be
removed from office only for cause by vote of the holders of a majority of the
outstanding shares of Common Stock. The current Bylaws provide that any vacancy
in the Board of Directors may be filled for the unexpired balance of the term by
the Stockholders or by the Board of Directors then in office. Under the proposed
Restated Bylaws, vacancies on the Board occurring during the year may be filled
by vote of a majority of the remaining Directors. A Director elected in this
manner to fill a vacancy will hold office until the next annual meeting
following the election until a successor is duly qualified and elected.
If the proposed Restated Certificate and Bylaws are approved at the
Annual Meeting, the Board of Directors will be divided into three classes of
Directors. The first class will be elected for a term expiring at the 1997
Annual Meeting, the second class will be elected for a term expiring at the
1998 Annual Meeting and the third class will be elected for a term expiring at
the 1999 Annual Meeting. At the 1997 Annual
13
<PAGE> 18
Meeting and thereafter, Directors will be elected to a full term of three years
to succeed those Directors whose terms are expiring. See "Proposal Number One."
The Company currently has no agreements or plans with respect to increasing or
decreasing the size of the Board of Directors.
Staggering the terms of Directors and the provisions regarding removal of a
Director will serve to moderate the pace of any change of control of the Board
of Directors and will facilitate continuity and stability of leadership of the
Company, which the Board of Director believes is the best interests of the
Stockholders. Nevertheless, some Stockholders may find the proposed changes
disadvantageous because it will make it more difficult to change the Board.
Staggering the terms of Directors could increase the time required for an entity
seeking to take control of the Company to change or add Directors, could deter a
company contemplating a takeover or merger attempt from making an offer that
might, from a financial point of view, be favorable to some Stockholders and
could make it more difficult for Stockholders to change more than one-third of
the Directors at a stockholder meeting even when this might be deemed
desirable.
The Board of Directors is not aware of any planned attempt to take over the
Company or of any proposed accumulation of shares by an individual or group.
Because such events could occur in the future, the Board is recommending
classification of Directors at this time.
Amendment of Bylaws. Except in limited circumstances, the current Bylaws
may be amended only by vote of a majority of the holders of Common Stock of the
Company. Under the Restated Certificate and the Restated Bylaws, the Bylaws may
be amended by the Stockholders or by vote of the Board of Directors.
PROPOSAL NUMBER THREE: TO CONSIDER AND VOTE UPON A PROPOSAL TO APPROVE AND
ADOPT THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY.
RECOMMENDATION OF THE BOARD: The Board has unanimously approved the
Restated Certificate, and hereby recommends that the Stockholders vote for
approval and adoption of the Restated Certificate.
RESOLVED, that the stockholders approve of and adopt the Amended and
Restated Certificate of Incorporation of the Company.
Vote Required. Approval of the Restated Certificate requires the
affirmative vote of a majority of the outstanding shares of Common Stock.
PROPOSAL NUMBER FOUR: TO CONSIDER AND VOTE UPON A PROPOSAL TO APPROVE AND
ADOPT THE AMENDED AND RESTATED BYLAWS OF THE COMPANY.
RECOMMENDATION OF THE BOARD: The Board has unanimously approved the
Restated Bylaws, and hereby recommends that the Stockholders vote for approval
and adoption of the Restated Bylaws.
RESOLVED, that the stockholders approve of and adopt the Amended and
Restated Bylaws of the Company.
Vote Required. Approval of the Restated Bylaws requires the affirmative
vote of a majority of the outstanding shares of Common Stock.
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<PAGE> 19
EXECUTIVE OFFICERS
The following table sets forth information with respect to the Company's
executive officers. Each officer is elected annually by the Directors and
serves until his successor is elected and qualified or until his death,
resignation or removal by the Directors:
<TABLE>
<CAPTION>
Principal Occupations Officer & Year
Name Age During Past 5 Years First Elected
<S> <C> <C> <C>
Leonard G. Levine 50 Mr. Levine has been President and Chief President and Chief
Executive Officer of the Company since 1990. Executive Officer; 1990
He also serves as President of Banyan
Strategic Realty Trust and as President and
a Director of Banyan Management Corp.
James A. Coyne 37 Mr. Coyne has been Chief Operating Officer Chief Operating Officer,
of the Company since 1997. Mr. Coyne is 1997
Senior Vice President/Capital Markets of
Equis Financial Group and is also Vice
President of AFG Realty Inc., an affiliate
of EFG. He is responsible for EFG's real
estate activities in both the United States
and Australia. Mr. Coyne joined EFG in
1989, remained until May 1993, and rejoined
EFG in November 1994 immediately prior to
the change in control. From May 1993
through November 1994 he was with the
Raymond Company, a private investment firm,
where he was responsible for obtaining
financing for corporate and real estate
acquisitions.
Neil D. Hansen 50 Mr. Hansen has been First Vice President First Vice President;
of the Company since 1991. He also 1991
serves as First Vice President of each of
Banyan Strategic Realty Trust and Banyan
Management Corp.
</TABLE>
15
<PAGE> 20
<TABLE>
Principal Occupations Officer & Year
Name Age During Past 5 Years First Elected
<S> <C> <C> <C>
Robert G. Higgins 45 From 1990 to 1992, Mr. Higgins was a Vice President - General
contract partner at the law firm of Counsel, 1992; Secretary,
Chapman and Cutler. Mr. Higgins is 1995
admitted to the bar in the States of
Illinois, Minnesota and Texas. Mr. Higgins
also serves Vice President, General Counsel
and Secretary of Banyan Strategic Realty
Trust and Banyan Management Corp.
Joel L. Teglia 35 From 1991 to 1994, Mr. Teglia was the Vice President and Chief
Controller for Banyan Management Corp. Mr. Financial Officer, 1994
Teglia also serves as Vice President and
Chief Financial Officer of Banyan Strategic
Realty Trust and Banyan Management Corp.
</TABLE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
A. DIRECTOR COMPENSATION
The Directors are paid an annual fee of $15,000, payable quarterly, plus
$875 for each Board meeting, including meetings of the audit committee, attended
in person and $250 an hour for each Board meeting, including meetings of the
audit committee, attended via telephonic conference call. In addition, each
Director is reimbursed for out-of-pocket expenses incurred in attending meetings
of the Board.
B. EXECUTIVE COMPENSATION
Compensation paid to Mr. Levine, the President and Chief Executive Officer
of the Company, for the years ended December 31, 1996, 1995 and 1994 is as
follows:
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Other
Annual Restricted All Other
Compen- Stock Options LTIP Compen-
Year Salary Bonus(2) sation Award(s) SARs (#) Payouts sation
---- ------ ----- ------ -------- -------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leonard G. 1996 $108,141 217,135 n/a n/a n/a n/a n/a
Levine,
President
1995 $105,606 $ 27,612 n/a ($19,606) n/a n/a n/a
1994 $102,800 $ 78,425 n/a $19,606 n/a n/a n/a
</TABLE>
16
<PAGE> 21
(1) Total compensation for the next four highest paid executives of the
Company for 1996, 1995 and 1994 was less than $100,000 per individual.
(2) Pursuant to Mr. Levine's employment agreement at the time, the
incentive amounts which were earned in 1995, 1994 and 1993 were paid
or awarded to him by the Company in 1996, 1995 and 1994. Therefore,
this compensation is presented as paid in 1996, 1995 and 1994.
Mr. Levine serves as Chief Executive Officer of the Company pursuant to an
employment agreement entered into on January 1, 1990 (the "Original Agreement"),
which was amended and restated effective May 1, 1997 (the "Restated Agreement").
The Restated Agreement expires on June 30, 1997, but automatically extends for
additional one-month periods unless either Mr. Levine or the Company gives
notice of intent to terminate. Under the agreement, Mr. Levine is paid a salary
for calendar year 1997 equal to $111,926 per year, adjusted on January 1 of each
year based on increases in the "consumer price index."
Under the Original Agreement, Mr. Levine was eligible to receive
compensation under an incentive program included in the agreement. Under the
Original Agreement, beginning January 1, 1993, Mr. Levine earned incentive
compensation based and calculated on the following four components: (i) 1.00% of
the Company's collateralized claims which are converted into cash; (ii) 3.00% of
the Company's unsecured claims which are converted into cash; (iii) 0.1% of all
cash distributions of capital; and (iv) .14% of all distributions of income to
stockholders of the Company.
Pursuant to Mr. Levine's Original Agreement, incentive compensation earned
was paid 80% in cash on or before March 15th of the year following the period
for which the incentive was earned and 20% in phantom stock rights payable in
cash based on the value of the Common Stock (the "Phantom Stock").
The number of shares of Phantom Stock issued to Mr. Levine was equal to 20%
of the incentive compensation divided by the per share value of the Phantom
stock on December 31 of the calendar year for which the incentive compensation
was paid (the "Grant Date"). Mr. Levine also received, in cash, any
distributions in respect of the Phantom Stock at the same rate that
distributions were paid on the Common Stock generally. So long as the Common
Stock is publicly traded, the value of the Phantom Stock is equal to the average
closing price of the Common Stock for the five business days ended at the Grant
Date. Under the terms of the Original Agreement, if the Common Stock is not
publicly traded, the value of the Phantom Stock is calculated as the book value
per share multiplied by the average price to book value ratio for the last day
of each of the three most recent quarters for which the stock was publicly
traded. The price to book value ratio as of the last day of a quarter is the
average closing price of the Common Stock for the preceding five business days
divided by the book value per share on the last day of the quarter.
If the Common Stock is listed on a national securities exchange on the
Vesting Date, as defined below, and may be issued to Mr. Levine without
violating any securities laws or regulations or the laws of the exchange on
which they are listed, upon notice to Mr. Levine, the Company may elect to
convert each share of the Phantom Stock into one share of Common Stock on the
Vesting Date. If the Company does not elect to convert the Phantom Stock, on or
within 30 days of the Vesting Date the Company is to pay to Mr. Levine in cash,
the value of the Phantom Stock on the Vesting Date. On March 1, 1996 and April
1, 1997, Mr. Levine: (i) was paid $217,135 and $7,164 in cash, representing 80%
of the incentive compensation earned for the fiscal years ended December 31,
1995 and December 31, 1996; and (ii) received 43,083 shares and 1,910 shares,
respectively, of Phantom Stock representing 20% of his incentive compensation.
The value of
17
<PAGE> 22
the Phantom Stock on the Grant Date was $1.26 per share or $54,284 for shares
issued in 1996 and $.9375 per share or $1,790 for shares issues in 1997.
Prior to April 20, 1995, 20% of the incentive compensation earned by Mr.
Levine was payable in shares of the Common Stock (the "Award Shares"). On March
24, 1995 and January 28, 1994, Mr. Levine was paid $27,612 and $78,425,
representing 80% of his 1994 and 1993 incentive compensation, respectively. Mr.
Levine also received 6,136 Award Shares for 1994 which the Company valued at
$1.125 per share, or $6,903 and 17,428 Award Shares for 1993 which the Company
values at $1.26 per share or $19,606. These Award Shares represented 20% of the
incentive earned by Mr. Levine during the fiscal years ended December 31, 1994.
These Award Shares are being held by the Company for Mr. Levine's benefit,
pending satisfaction of the vesting requirements, until the earlier of (i)
December 31, 1997; (ii) the termination of Mr. Levine's employment by the
Company without just cause; or (iii) the permanent disability or death of Mr.
Levine (the "Vesting Date"). All Award Shares earned by Mr. Levine will be
forfeited by Mr. Levine if he is not employed by the Company on December 31,
1997, unless such failure is due to death or permanent disability or termination
without just cause. Mr. Levine is entitled to all distributions paid on Award
Shares held by the Company for his benefit.
Under the Restated Agreement, Mr. Levine will receive a termination fee of
$400,000 in the event that his employment is terminated either: (i) voluntarily
after August 1, 1997; or (ii) at any time by the Company. Under the Restated
Agreement, Mr. Levine has agreed that if his employment with the Company is
terminated, he will surrender and cancel all options to purchase the Common
Stock which he may hold, upon receipt of the $400,000 termination fee.
C. EXECUTIVE AND DIRECTORS STOCK OPTION PLAN
On June 30, 1994, the Stockholders approved and adopted the 1994 Executive
and Directors Stock Option Plan (the "Plan"). The Plan granted the Board of
Directors the authority to issue up to 1,000,000 shares of the Common Stock for
stock option awards. The Plan consists of an Executive Option Grant Program and
a Director Option Grant Program. Under the Director Option Grant Program, each
of Gerald L. Nudo, Robert M. Ungerleider, and Walter E. Auch, Sr., in
consideration of their length of service on the board, on the tenth business day
after adjournment of each annual meeting received an option to acquire 50,000
shares. The exercise price of the options initially granted to the Board of
Directors on July 15, 1994 under the Director Option Grant Program was $1.125.
No executive is eligible to receive options under the Director Option Grant
Program.
The Board administers the Executive Option Grant Program and has the
authority to determine, among other things, the individuals to be granted
Executive Options, the exercise price at which shares may be acquired, the
number of shares subject to each option and the exercise period of each option.
The Board is also authorized to construe and interpret the Executive Option
Grant Program and to prescribe additional terms and conditions of exercise in
option agreements and provide the form of option agreement to be utilized with
the Executive Option Grant Program. No Director is eligible to receive options
under the Executive Option Grant Program.
Options are not transferable except by will or by the laws of descent and
distribution, and are exercisable during an optionee's lifetime only by the
optionee or the appointed guardian or legal representative of the optionee. Upon
the: (a) death or permanent and total disability of an optionee; or (b)
retirement in accord with the Company's retirement practices, any unexercised
options will be exercisable at any time within
18
<PAGE> 23
one year in the case of (a) and ninety days in the case of (b) (but in no case
beyond the expiration date specified in the Option Agreement). If, while
unexercised options remain outstanding under the Plan, the fund ceases to be a
publicly-traded company, or if the Company merges with another entity or a
similar event occurs, all options outstanding under the Plan shall immediately
become exercisable at that time.
The Plan requires the optionee to pay, at the time of exercise, for all
Shares acquired on exercise in cash, Shares, or in the case of the Executive
Option Program, other forms of consideration acceptable to the Board.
If the Company declares a stock dividend, splits its stock, combines or
exchanges its shares, or engages in any other transactions which results in a
change in capital structure such as a merger, consolidation, dissolution,
liquidation or similar transaction, the Board may adjust or substitute, as the
case may be, the number of shares available for options under the Plan, the
number of shares covered by outstanding options, the exercise price per share of
outstanding options, any target price levels for vesting of the options and any
other characteristics of the options as the Board deems necessary to equitably
reflect the effects of those changes on the option holders.
On each of April 16, 1996, July 11, 1995 and January 18, 1994, the Board
granted to management options to purchase 90,000 shares under the Plan, at
prices of $1.25, $1.50 and $1.125 per share, respectively (the closing price on
the day of the grant of options).
Pursuant to the terms of the grants, options for all shares granted under
the Executive Option Grant Program are exercisable and vested in installments as
follows: (1) 33.3% of the a number of shares commencing on the first anniversary
of the date of grant; (ii) an additional 33.3% of the shares commencing on the
second anniversary of the date of the grant; and (iii) an additional 33.4% of
shares commencing on the third anniversary of the date of grant. Options for
all shares as granted under the Director Option Grant Program are exercisable in
installments as follows: (i) 50.0% of the number of shares commencing on the
first anniversary of the date of grant; and (ii) an additional 50.0% of the
number of shares commencing on the second anniversary of the date of grant. The
Board is granted discretion to determine the term of each option granted under
the Executive Option Grant Program, but in no event will the term exceed ten
years and one day from the date of grant.
In May 1997, all of the Company's executives who held unexercised options
issued under the Plan agreed to cancel and surrender these options in
consideration of the Company paying each holder $.20 in cash for each share of
Common Stock subject to such holder's options.
Stock Options granted or exercised by executive officers for the year ended
December 31, 1996, are as follows:
19
<PAGE> 24
OPTION/SAR GRANTS IN 1996 FISCAL YEAR
<TABLE>
<CAPTION>
Number of % of Total Potential Realized Value At
Securities Options/SARs Assumed Annual Rates of Stock
Underlying Granted to Price Appreciation for Option
Options/SARs Employees in Exercise or Expiration Term
Name Granted Fiscal Year Base Price Date
5% 10%
<S> <C> <C> <C> <C> <C> <C>
Leonard G. Options Options
Levine
60,000 67% $1.25 April 16, $47,167 $119,531
2006
SAR's SAR's
6,136 100% $1.25 n/a $ 4,341 $ 11,002
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR END OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-The-Money
Acquired Options/SARs at Options/SARs at
Name on Exercise Values Realized December 31 December 31
Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Leonard G. Levine Options
$0 $0 60,000/180,000 $-0-/$-0-
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Administrative costs, primarily salaries and general and administrative
expenses, are reimbursed by the Company to BMC, which is owned by the Company,
Banyan Strategic Realty Trust and Legend Properties, Inc. (f/k/a Banyan
Mortgage Investment Fund). Mr. Levine is the president of BMC but he receives
no additional compensation for these services. Messrs. Teglia, Hansen and
Higgins are employees of the Company but are actually included in the
administrative costs for which BMC is reimbursed by the Company. The
directors/trustees for all Banyan Funds serve as directors of BMC but receive no
additional compensation for these services. All costs incurred on behalf of BMC
for the Company are allocable to the Company based on the ratio of the actual
number of hours spent by BMC personnel on the Company's matters compared to the
total number of BMC personnel related to that particular entity. The Company's
allocable share of costs for the years ended December 31, 1996, 1995, and 1994,
aggregated $269,508, $557,899, and $593,964, respectively. As one of its
administrative services, BMC serves as the paying agent for general and
administrative costs of the Company. As part of providing this payment service,
BMC maintains a bank account on behalf of the Company. As of December 31, 1996,
the Company had a net receivable due from BMC of $2,180.
In connection with the Exchange, the Company amended its agreement with BMC
and on May 6, 1997, entered into an Administrative Services Agreement with an
affiliate of EFG. See "Matters to be Considered by Stockholders - Proposals
Number Three and Four -- The Exchange."
20
<PAGE> 25
STOCKHOLDER PROPOSALS
Stockholder proposals for the 1997 Annual Meeting of Stockholders must
be received by the Company at its executive office in Chicago, Illinois, on
or prior to ___________, 1998 for inclusion in the Company's proxy statement for
that meeting. Any Stockholder proposal must also meet the other
requirements for Stockholder proposals as set forth in the rules of the
Securities and Exchange Commission relating to Stockholder proposals.
OTHER MATTERS
As of the date of this Proxy Statement, no business other than that
discussed above is to be acted upon at the Meeting. If other matters not known
to the Board should, however, properly come before the Meeting, the persons
appointed by the signed proxy intend to vote it in accordance with their best
judgment.
BANYAN STRATEGIC LAND FUND II
By the Order of the Board of Directors,
Leonard G. Levine
President
Chicago, Illinois
__________________, 1997
21
<PAGE> 26
A COPY OF THE BANYAN STRATEGIC LAND FUND II 1996 ANNUAL REPORT ON FORM 10-K
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE SUPPLIED TO
STOCKHOLDERS WITHOUT CHARGE. REQUESTS FOR THE REPORT SHOULD BE DIRECTED TO:
Banyan Strategic Land Fund II
c/o Investor Relations Department
150 S. Wacker Drive, Suite 2900
Chicago, IL 60606 (312) 683-3670
YOUR VOTE IS IMPORTANT. THE PROMPT RETURN OF PROXIES WILL SAVE THE
COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES. PLEASE PROMPTLY
MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE.
22
<PAGE> 27
APPENDIX A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
------------------------
1. The name of the corporation is __________________ (the
"Corporation").
2. The address of the Corporation's registered office in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, zip code 19801. The name of its registered
agent at such address is The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted by the Corporation is to acquire, directly or indirectly, interests in
real estate and in general to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.
4. The Corporation is authorized to issue 50,000,000 shares of
common stock, each share having a par value of $.01.
5. The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal Bylaws of the Corporation, but the
stockholders may make additional Bylaws and may alter or repeal any Bylaw
whether adopted by them or otherwise.
6. The number of directors which will constitute the whole Board
of Directors of the Corporation shall be as specified in the Bylaws of the
Corporation. The election of directors need not be by written ballot unless the
Bylaws so provide.
7. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statue, and all rights conferred upon
stockholders herein are granted subject to this reservation.
8. A Director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except for liability: (i) for any breach of the
Director's duty of loyalty to the Corporation or its stockholders; (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction from which the Director derived
any improper personal benefit. If the General Corporation Law of the State of
Delaware is hereafter amended to authorize, with the approval of a corporation's
<PAGE> 28
stockholders, further reductions in the liability of the Corporation's
directors for breach of fiduciary duty, then a Director of the Corporation
shall not be liable for any such breach to the fullest extent permitted by the
General Corporation Law of the State of Delaware as so amended. Any repeal or
modification of the foregoing provisions of this Section 8 by the stockholders
of the Corporation shall not adversely affect any right or protection of a
Director of the Corporation existing at the time of such repeal or
modification.
9. To the fullest extent permitted by applicable law, this
Corporation is authorized to provide idemnification of (and advancement of
expenses to) directors, officers, employees and agents of the Corporation (and
any other persons to which Delaware law permits this Corporation to provide
indemnification) through Bylaw provisions, agreements with such agents or other
persons, vote of stockholders or disinterested directors or otherwise, in
excess of the indemnification and advancement otherwise permitted by Section
145 of the General Corporation Law of the State of Delaware, subject only to
limits created by applicable Delaware law (statutory or non-statutory), with
respect to actions for breach of duty to this Corporation, its stockholders,
and others. Any repeal or modification of any of the foregoing provisions of
this Section 9 shall not adversely affect any right or protection of a director,
officer, employee, agent or other person existing at the time of, or increase
the liability of any director of this Corporation with respect to any acts or
omissions of such director, officer, employee or agent occurring prior to such
repeal or modification.
2
<PAGE> 29
APPENDIX B
___________________________________
AMENDED AND RESTATED BYLAWS
ARTICLE I
OFFICES
The Corporation may have offices at such place or places, both within and
without the State of Delaware, as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Time and Place of Meetings. All meetings of the stockholders
for the election of directors shall be held at such time and place, either
within or without the State of Delaware, as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting or, in
the case of an adjourned meeting, as announced at the meeting at which the
adjournment is taken. Meetings of stockholders for any other purpose may be
held at such time and place, within or without the State of Delaware, as shall
be stated in the notice of the meeting or in a duly executed waiver of notice
thereof or, in the case of an adjourned meeting, as announced at the meeting at
which the adjournment is taken.
Section 2. Annual Meetings. Annual meetings of stockholders shall be
held at such date and time within six months following the end of each fiscal
year of the Corporation as shall be designated from time to time by the Board
of Directors and stated in the notice of the meeting, at which the stockholders
shall elect by a plurality vote a Board of Directors and transact such other
business as may properly be brought before the meeting.
Section 3. Notice of Annual Meetings. Written notice of the annual
meeting, stating the place, date, and hour of the meeting, shall be given to
each stockholder of record entitled to vote at such meeting not less than 10
nor more than 60 days before the date of the meeting. If mailed, such notice
shall be deemed to be given when deposited in the mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
Corporation.
Section 4. Special Meetings. Special meetings of the stockholders for
any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called at any time by order of the Board
of Directors and shall be called by the Chairman of the Board, the President,
or the Secretary at the request in writing of a majority of the Board of
Directors, a majority of the Independent Directors, or stockholders holding at
least 30% of the outstanding shares of Common Stock of the Corporation. Such
request shall state the purpose or purposes of the proposed special meeting.
Business transacted at any special meeting of stockholders shall be limited to
the purposes stated in the notice.
<PAGE> 30
Section 5. Notice of Special Meetings. Written notice of a special
meeting, stating the place, date, and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given to each stockholder of
record entitled to vote at such meeting not less than 10 nor more than 60 days
before the date of the meeting. If mailed, such notice shall be deemed to be
given when deposited in the mail, postage prepaid, directed to the stockholder
at his address as it appears on the records of the Corporation.
Section 6. Quorum. Except as otherwise provided by statute, these
Bylaws, or the Certificate of Incorporation, the holders of stock having a
majority of the voting power of the stock entitled to be voted thereat,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business at all meetings of the stockholders. If, however, such
quorum shall not be present or represented at any meeting of the stockholders,
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time without notice
(other than announcement at the meeting at which the adjournment is taken of
the time and place of the adjourned meeting) until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If any single adjournment is for more than
30 days, or if after the adjournment a new record date is fixed for the
adjourned meeting, notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 7. Organization. At each meeting of the stockholders, the
Chairman or Vice Chairman of the Board or the President, determined as provided
in Article V of these Bylaws, or if those officers shall be absent therefrom,
another officer of the Corporation chosen as chairman present in person or by
proxy and entitled to vote thereat, or if all the officers of the Corporation
shall be absent therefrom, a stockholder holding of record shares of stock of
the Corporation so chosen, shall act as chairman of the meeting and preside
thereat. The Secretary, or if he or she shall be absent from such meeting or
shall be required pursuant to the provisions of this Section 7 to act as
chairman of such meeting, the person (who shall be an Assistant Secretary, if
an Assistant Secretary shall be present thereat) whom the chairman of such
meeting shall appoint, shall act as secretary of such meeting and keep the
minutes thereof.
Section 8. Voting. Except as otherwise provided in the Certificate of
Incorporation, each stockholder shall, at each meeting of the stockholders, be
entitled to one vote in person or by proxy for each share of stock of the
Corporation held by him, her or it and registered in his, her or its name on
the books of the Corporation on the date fixed pursuant to the provisions of
Section 5 of Article VII of these Bylaws as the record date for the
determination of stockholders who shall be entitled to notice of and to vote at
such meeting. Shares of its own stock belonging to the Corporation or to
another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held directly or indirectly
by the Corporation, shall not be entitled to vote. Any vote by stock of the
Corporation may be given at any meeting of the stockholders by the stockholder
entitled thereto, in person or by his or her proxy appointed by an instrument
in writing subscribed by such stockholder or by his or her attorney thereunto
duly authorized and delivered to the Secretary of the Corporation or to the
secretary of the
2
<PAGE> 31
meeting; provided, however, that no proxy shall be voted or acted upon after
three years from its date, unless said proxy shall provide for a longer period.
Each proxy shall be revocable unless expressly provided therein to be
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A stockholder may revoke
any proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or another duly
executed proxy bearing a later date with the Secretary of the Corporation.
At all meetings of the stockholders, all matters, except where other
provision is made by law, the Certificate of Incorporation, or these Bylaws,
shall be decided by the vote of a majority of the votes cast by the
stockholders present in person or by proxy and entitled to vote thereat, a
quorum being present. In all matters other than the election of directors, the
affirmative vote of the majority of shares present in person or represented by
proxy at the meeting and entitled to vote on the subject matter shall be the
act of the stockholders. Where a separate vote by class or classes is
required, a majority of the outstanding shares of such class or classes,
present in person or represented by proxy, shall constitute a quorum entitled
to take action with respect to that vote on that matter and the affirmative
vote of the majority of shares of such class or classes present in person or
represented by proxy at the meeting shall be the act of such class. Unless
demanded by a stockholder of the Corporation present in person or by proxy at
any meeting of the stockholders and entitled to vote thereat, or so directed by
the chairman of the meeting, the vote thereat on any question other than the
election or removal of directors need not be by written ballot. Upon a demand
of any such stockholder for a vote by written ballot on any question or at the
direction of such chairman that a vote by written ballot be taken on any
question, such vote shall be taken by written ballot. On a vote by written
ballot, each ballot shall be signed by the stockholder voting, or by his or her
proxy, if there be such proxy, and shall state the number of shares voted.
Section 9. List of Stockholders. It shall be the duty of the Secretary
or other officer of the Corporation who shall have charge of its stock ledger,
either directly or through another officer of the Corporation designated by him
or her or through a transfer agent appointed by the Board of Directors, to
prepare and make, at least 10 days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 10 days before said
meeting, either at a place within the city where said meeting is to be held,
which place shall be specified in the notice of said meeting, or, if not so
specified, at the place where said meeting is to be held. The list shall also
be produced and kept at the time and place of said meeting during the whole
time thereof, and may be inspected by any stockholder of record who shall be
present thereat. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, such list or the books of
the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
Section 10. Inspectors of Election.
3
<PAGE> 32
(a) The Corporation shall, in advance of any meeting of stockholders,
appoint one or more inspectors to act at the meeting and make a written report
thereof. The Corporation may designate one or more persons as alternate
inspectors or replace an inspector who fails to act. If no inspector or
alternate is able to act at a meeting of stockholders, the person presiding at
the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before entering upon the discharge of his duties, shall take and
sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his ability.
(b) The inspectors shall (i) ascertain the number of shares outstanding
and the voting power of each, (ii) determine the shares represented at a
meeting and the validity of proxies and ballots, (iii) count all votes and
ballots, (iv) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors, and
(v) certify their determination of the number of shares represented at the
meeting, and their count of all votes and ballots. The inspectors may appoint
or retain other persons or entities to assist the inspectors in the performance
of the duties of the inspectors.
(c) The date and time of the operating and the closing of the polls for
each matter upon which the stockholders will vote at meeting shall be announced
at the meeting.
(d) In determining the validity and counting of proxies and ballots, the
inspectors shall be limited to an examination of the proxies, any envelopes
submitted with those proxies, ballots and the regular books and records of the
Corporation, except that the inspectors may consider other reliable information
for the limited purpose of reconciling proxies and ballots submitted by or on
behalf of banks, brokers, their nominees or similar persons which represent
more votes than the holder of a proxy is authorized by the record owner to cast
or more votes than the stockholder holds of record. If the inspectors consider
other reliable information for the limited purpose permitted herein, the
inspectors at the time they make their certification pursuant to subsection
(b)(v) of this section shall specify the precise information considered by them
including the person or persons from whom they obtained information, when the
information was obtained and the basis for the inspectors' belief that such
information is accurate and reliable.
Section 11. Actions Without a Meeting.
(a) Any action required to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at any annual
or special meeting of stockholders, may be taken without a meeting, without
prior notice, and without a vote if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereat were
present and voted. Notice of the taking of corporate action without a meeting
shall be delivered to the Corporation by delivery to its registered office, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of members are recorded.
Delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested.
4
<PAGE> 33
(b) Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporation action referred to therein unless, within sixty days of
the earliest dated consent delivered in the manner required by this Article II,
Section 11 to the Corporation, written consents signed by a sufficient number
of stockholders to take action are delivered to the Corporation by delivery to
its registered office, its principal place of business, or an officer or agent
of the Corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Delivery made to the Corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested.
(c) Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers. The business and affairs of the Corporation shall be
managed by its Board of Directors, which shall have and may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute, the Certificate of Incorporation, or these Bylaws directed or required
to be exercised or done by the stockholders.
Section 2. Number, Qualification, and Term of Office. The Board of
Directors elected immediately following the adoption of these Bylaws shall
consist of not less than four (4) nor more than ___ individuals, at least a
majority of whom shall at all times be Independent Directors, and shall be
divided into three Classes as nearly equal in number as possible, with the
initial terms of such Classes being one year, two years and three years
respectively. Except as provided in the immediately preceding sentence, the
term of office for each Director shall be three years. Thereafter, the number
of Directors which shall constitute the whole Board of Directors shall be
determined by resolution of the Board of Directors or by the stockholders at
any annual or special meeting or otherwise pursuant to action of the
stockholders. Directors need not be stockholders. The directors shall be
elected at the annual meeting of the stockholders, except as contemplated by
the second sentence of this Section and as provided in Sections 4 and 5 of this
Article III, and each director elected shall hold office until the next annual
meeting of the stockholders of the corporation and until his or her successor
is duly elected and qualified, or until his or her death or retirement or until
he or she resigns or is removed in the manner hereinafter provided. Such
election shall be by written ballot. For purposes of this Article III,
Section 2, "Independent Directors" shall mean directors who (i) are not
affiliated directly or indirectly (whether by ownership of, ownership interest
in, employment by, or service as an officer or director by such person or an
immediate family member) with Equis Financial Group Limited Partnership, or any
person or entity controlling, controlled by, or under common control with,
Equis Financial Group Limited Partnership, and (ii) perform no other ongoing or
substantial services for the Corporation except as directors.
5
<PAGE> 34
Section 3. Resignation. Any director may resign at any time by giving
written notice of his or her resignation to the Corporation. Any such
resignation shall take effect at the time specified therein, or if the time
when it shall become effective shall not be specified therein, then it shall
take effect immediately upon its receipt by the Secretary. Unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 4. Removal of Directors. Any director may be removed, either
with or without cause, at any time, by the affirmative vote of a majority in
voting interest of the stockholders of record of the Corporation entitled to
vote, given at an annual meeting or at a special meeting of the stockholders
called for that purpose. The vacancy in the Board of Directors caused by any
such removal shall be filled by the stockholders at such meeting or by the
directors as provided in Section 5 of this Article III. No reduction of the
authorized number of directors shall have the effect of removing any director
prior to the expiration of such director's term of office.
Section 5 Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office though less than a quorum, or by a
sole remaining director, or by a plurality of the votes cast at a meeting of
stockholders, and the directors so chosen shall hold office until the annual
meeting next after their election and until their successors are elected and
qualified, unless sooner displaced. If at any time, by reason of death or
resignation ro other cause, the corporation should have no directors in office,
then any officer or any stockholder or an executor, administrator, trustee or
guardian of a stockholder, or other fiduciary entrusted with like
responsibility for the person or estate of a stockholder, may call a special
meeting of stockholders in accordance with the provisions of the Certificate of
Incorporation or these Bylaws, or may apply to the Court of Chancery for a
decree summarily ordering an election as provided in Section 211 of the General
Corporation Law of Delaware. If, at the time of filling any vacancy or any
newly created directorship, the directors then in office constitute less than a
majority of the whole board (as constituted immediately prior to any such
increase), then the Court of Chancery may, upon application of any stockholder
or stockholders holding at least ten (10) percent of the total number of the
shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by the directors then
if office as aforesaid, which election shall be governed by the provisions of
Section 211 of the General Corporation Law of Delaware as far as applicable.
MEETINGS OF THE BOARD OF DIRECTORS
Section 6. Place of Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the State
of Delaware.
Section 7. Annual Meetings. The first meeting of each newly elected Board
of Directors shall be held immediately following the annual meeting of
stockholders, and no notice of such meeting shall be necessary to the newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present. If such meeting is not held immediately after the
6
<PAGE> 35
annual meeting of stockholders, the meeting may be held at such time and place
as shall be specified in a notice given as hereinafter provided for special
meetings of the Board of Directors, or as shall be specified in a written
waiver signed by all of the directors.
Section 8. Regular Meetings. Regular meetings of the Board of Directors
may be held without notice at such time and at such place as shall from time to
time be determined by the Board of Directors.
Section 9. Special Meetings; Notice. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or the
Secretary on 24 hours' notice to each director, either personally or by
telephone or by mail, telecopy, or other form of recorded communication;
special meetings shall be called by the Chairman of the Board, the President,
or the Secretary in like manner and on like notice on the written request of
two directors. Notice of any such meeting need not be given to any director,
however, if waived by him or her in writing or by mail, telecopy, or other form
of recorded communication, or if he or she shall be present at such meeting.
Section 10. Quorum and Manner of Acting. At all meetings of the Board of
Directors, a majority of the directors at the time in office (but not less than
one-third of the whole Board of Directors) shall constitute a quorum for the
transaction of business, and the act of a majority of the directors present at
any meeting at which a quorum is present shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute, these
Bylaws or by the Certificate of Incorporation. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 11. Remuneration. Unless otherwise expressly provided by
resolution adopted by the Board of Directors, the directors of the Corporation
shall be paid an annual fee of $15,000, payable quarterly, plus $875 for each
Board meeting, including meetings of the audit committee, attended in person
and $250 an hour for each Board meeting, including meetings of the audit
committee, attended via telephonic conference call. In addition, each Director
shall be reimbursed for out-of-pocket expenses incurred in attending meetings
of the Board. The Board of Directors may at any time and from time to time by
resolution provide that a different sum shall be paid to any director of the
Corporation, either as his or her annual remuneration as such director or
member of any committee of the Board of Directors or as remuneration for his or
her attendance at each meeting of the Board of Directors or any such committee.
The Board of Directors may also likewise provide that the Corporation shall
reimburse each director for any expenses paid by him on account of his or her
attendance at any meeting. Nothing in this Section 10 shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving remuneration thereof.
COMMITTEES OF DIRECTORS
7
<PAGE> 36
Section 12. Executive Committee: How Constituted and Powers. The Board
of Directors may in its discretion, by resolution passed by a majority of the
whole Board of Directors, designate an Executive Committee consisting of three
or more of the directors of the Corporation. Subject to the provisions of
Section 141 of the General Corporation Law of the State of Delaware, the
Certificate of Incorporation, and these Bylaws, the Executive Committee shall
have and may exercise, when the Board of Directors is not in session, all the
powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation, and shall have the power to authorize
the seal of the Corporation to be affixed to all papers which may require it;
but the Executive Committee shall not have the power to fill vacancies in the
Board of Directors, the Executive Committee or any other committee of directors
or to elect or approve offices of the Corporation. The Executive Committee
shall have the power and authority to authorize the issuance of common stock
and grant and authorize options and other rights with respect to such issuance.
The Board of Directors shall have the power at any time, by resolution passed
by a majority of the whole Board of Directors, to change the membership of the
Executive Committee, to fill all vacancies in it, or to dissolve it, either
with or without cause.
Section 13. Organization. The Chairman of the Executive Committee, to be
selected by the Board of Directors, shall act as chairman at all meetings of
the Executive Committee and the Secretary shall act as secretary thereof. In
case of the absence from any meeting of the Executive Committee of the Chairman
of the Executive Committee or the Secretary, the Executive Committee may
appoint a chairman or secretary, as the case may be, of the meeting.
Section 14. Meetings. Regular meetings of the Executive Committee, of
which no notice shall be necessary, may be held on such days and at such
places, within or without the State of Delaware, as shall be fixed by
resolution adopted by a majority of the Executive Committee and communicated in
writing to all its members. Special meetings of the Executive Committee shall
be held whenever called by the Chairman of the Executive Committee or a
majority of the members of the Executive Committee then in office. Notice of
each special meeting of the Executive Committee shall be given by mail,
telecopy, or other form of recorded communication or be delivered personally or
by telephone to each member of the Executive Committee not later than the day
before the day on which such meeting is to be held. Notice of any such meeting
need not be given to any member of the Executive Committee, however, if waived
by him or her in writing or by mail, telecopy, or other form of recorded
communication, or if he or she shall be present at such meeting; and any
meeting of the Executive Committee shall be a legal meeting without any notice
thereof having been given, if all members of the Executive Committee shall be
present thereat. Subject to the provisions of this Article III, the Executive
Committee, by resolution adopted by a majority of the whole Executive
Committee, shall fix its own rules of procedure.
Section 15. Quorum and Manner of Acting. A majority of the Executive
Committee shall constitute a quorum for the transaction of business, and the
act of a majority of those present at a meeting thereof at which a quorum is
present shall be the act of the Executive Committee.
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Section 16. Other Committees. The Board of Directors may, by resolution
or resolutions passed by a majority of the whole Board of Directors, designate
one or more other committees consisting of three or more directors of the
Corporation, which, to the extent provided in said resolution or resolutions,
shall have and manage, exercise, subject to the provisions of Section 141 of
the General Corporation Law of the State of Delaware, the Certificate of
Incorporation, and these Bylaws, the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and
shall have the power to authorize the seal of the Corporation to be affixed to
all papers which may require it; but no such committee shall have the power to
fill vacancies in the Board of Directors, the Executive Committee, or any other
committee or in their respective membership, to appoint or remove officers of
the Corporation, or to authorize the issuance of shares of the capital stock of
the Corporation, except that such a committee may, to the extent provided in
said resolutions, grant and authorize options and other rights with respect to
the common stock of the Corporation pursuant to and in accordance with any plan
approved by the Board of Directors. Such committee or committees shall have
such name or names as may be determined from time to time by resolution adopted
by the Board of Directors. A majority of all the members of any such committee
may determine its action and fix the time and place of its meetings and specify
what notice thereof, if any, shall be given, unless the Board of Directors
shall otherwise provide. The Board of Directors shall have power to change the
members of any such committee at any time to fill vacancies, and to discharge
any such committee, either with or without cause, at any time.
Section 17. Alternate Members of Committees. The Board of Directors may
designate one or more directors as alternate members of the Executive Committee
or any other committee, who may replace any absent or disqualified member at
any meeting of the committee, or if none be so appointed, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he, she or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
Section 18. Minutes of Committees. Each committee shall keep regular
minutes of its meetings and proceedings and report the same to the Board of
Directors at the next meeting thereof.
GENERAL
Section 19. Actions Without a Meeting. Unless otherwise restricted by
the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors or the committee.
Section 20. Presence at Meetings by Means of Communications Equipment.
Members of the Board of Directors, or of any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors or such
committee by means of conference
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telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting conducted pursuant to this Section 20 shall constitute presence in
person at such meeting.
ARTICLE IV
NOTICES
Section 1. Type of Notice. Whenever, under the provisions of any
applicable statute, the Certificate of Incorporation, or these Bylaws, notice
is required to be given to any director or stockholder, it shall not be
construed to mean personal notice, but such notice may be given in writing, in
person or by mail, addressed to such director or stockholder, at his or her
address as it appears on the records of the Corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited in the United States mail. Notice to directors may also be
given in any manner permitted by Article III hereof and shall be deemed to be
given at the time when first transmitted by the method of communication so
permitted.
Section 2. Waiver of Notice. Whenever any notice is required to be given
under the provisions of any applicable statute, the Certificate of
Incorporation, or these Bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto, and transmission of a
waiver of notice by a director or stockholder by mail, telecopy, or other form
of recorded communication may constitute such a waiver.
ARTICLE V
OFFICERS
Section 1. Elected and Appointed Officers. The elected officers of the
Corporation shall be a President, Chief Operating Officers, Chief Executive
Officer, one or more Vice Presidents, with or without such descriptive titles
as the Board of Directors shall deem appropriate, a Secretary, and a Treasurer,
a Vice Chairman of the Board (who shall be a director) and a Chairman of the
Board (who shall be a director) and a Controller. The Board of Directors or
the Executive Committee of the Board of Directors by resolution also may
appoint one or more Assistant Vice Presidents, Assistant Treasurers, Assistant
Secretaries, Assistant Controllers, and such other officers and agents as from
time to time may appear to be necessary or advisable in the conduct of the
affairs of the Corporation.
Section 2. Time of Election or Appointment. The Board of Directors at
its annual meeting shall elect or appoint, as the case may be, the officers to
fill the positions designated in order pursuant to Section 1 of this Article V.
Officers of the Corporation may also be elected or appointed, as the case may
be, at any other time.
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Section 3. Salaries of Elected or Appointed Officers. The salaries of
all elected or appointed officers of the Corporation shall be fixed by the
Board of Directors, unless this function is delegated to the President and/or
Chief Executive Officer with respect to officers other than President and Chief
Executive Officer.
Section 4. Term. Each officer of the Corporation shall hold his office
until his or her successor is duly elected or appointed and qualified or until
his or her earlier resignation or removal. Any officer may resign at any time
upon written notice to the Corporation. Any officer elected or appointed by
the Board of Directors or the Executive Committee may be removed at any time by
the affirmative vote of a majority of the whole Board of Directors. Any
vacancy occurring in any office of the Corporation by death, resignation,
removal, or otherwise may be filled by the Board of Directors or the
appropriate committee thereof.
Section 5. Duties of the Chairman of the Board. The Chairman of the
Board, if one be elected, shall preside when present at all meetings of the
Board of Directors and, with the approval of the President, may preside at
meetings of the stockholders. He or she shall advise and counsel the President
and other officers of the Corporation, and shall exercise such powers and
perform such duties as shall be assigned to or required of him or her from time
to time by the Board of Directors.
Section 6. Duties of the Vice Chairman of the Board. The Vice Chairman
of the Board, if one be elected, shall preside when present at all meetings of
the Board of Directors in the absence of the Chairman of the Board, and, with
the approval of the President, may preside at meetings of the stockholders. He
or she shall assist the Chairman of the Board in fulfillment of the Chairman's
functions, and shall advise and counsel the President and other officers of the
Corporation, and shall exercise such powers and perform such duties as shall be
assigned to or required of him or her from time to time by the Board of
Directors.
Section 7. Duties of the President. The President shall be the chief
executive officer of the Corporation and, subject to the provisions of these
Bylaws, shall have general supervision of the affairs of the Corporation and
shall have general and active control of all its business. He or she shall
preside, when present, at all meetings of stockholders, except when the
Chairman or Vice Chairman of the Board presides with the approval of the
President and as may otherwise be provided by statute, and, in the absence of
any other person designated thereto by these Bylaws, at all meetings of the
Board of Directors. He or she shall see that all orders and resolutions of the
Board of Directors and the stockholders a carried into effect. He or she shall
have general authority to execute bonds, deeds, and contracts in the name of
the Corporation and affix the corporate seal thereto; to sign stock
certificates; to cause the employment or appointment of such employees and
agents of the Corporation as the proper conduct of operations may require, and
to fix their compensation, subject to the provisions of these Bylaws; to remove
or suspend any employee or agent who shall have been employed or appointed
under his or her authority or under authority of an officer subordinate to him
or her; to suspend for cause, pending final action by the authority which shall
have elected or appointed him or her, any officer subordinate to the
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President; and , in general, to exercise all the powers and authority usually
appertaining to the chief executive officer of a corporation, except as
otherwise provided in these Bylaws.
Section 8. Duties of Vice Presidents. In the absence of the President or
in the event of his inability or refusal to act, the Vice President (or in the
event there may be more than one Vice President, the Vice Presidents in the
order designated, or in the absence of any designation, then in the order of
their election) shall perform the duties of the President and, when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall perform such other duties and have such
other powers as the Board of Directors or the President may from time to time
prescribe.
Section 9. Duties of Assistant Vice Presidents. In the absence of a Vice
President or in the event of his inability or refusal to act, the Assistant
Vice President (or in the event there shall be more than one, the Assistant
Vice Presidents in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their appointment) shall
perform the duties and exercise the powers of that Vice President, and shall
perform such other duties and have such powers as the Board of Directors, the
President, or the Vice President under whose supervision he or she is appointed
may from time to time prescribe.
Section 10. Duties of the Secretary. The Secretary shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record all the proceedings of the meetings of the Corporation and of the Board
of Directors in a book to be kept for that purpose and shall perform like
duties for the Executive Committee or other standing committees when required.
He or she shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of the Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or the
President, under whose supervision he or she shall be. He or she shall have
custody of the corporate seal of the Corporation, and he or she, or an
Assistant Secretary, shall have the authority to affix the same to any
instrument requiring it, and when so affixed, it may be attested by his or her
signature or by the signature of such Assistant Secretary. The Board of
Directors may give general authority to any other officer to affix the seal of
the Corporation and to attest the affixing by his signature. The Secretary
shall keep and account for all books, documents, papers, and records of the
Corporation, except those for which some other officer or agent is properly
accountable. He or she shall have authority to sign stock certificates and
shall generally perform all the duties usually appertaining to the office of
the secretary of a corporation.
Section 11. Duties of Assistant Secretaries. In the absence of the
Secretary or in the event of his or her inability or refusal to act, the
Assistant Secretary (or, if there shall be more than one, the Assistant
Secretaries in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their appointment) shall
perform the duties and exercise the powers as the Board of Directors, the
President, or the Secretary may from time to time prescribe.
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Section 12. Duties of the Treasurer. The Treasurer shall have the
custody of the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation
and shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the
Board of Directors. He or she shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings or when the Board of Directors so requires, an account of
all his or her transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, he or she shall give the
Corporation a bond (which shall be renewed every six years) in such sum and
with such surety or sureties as shall be satisfactory to the Board of Directors
for the faithful performance of the duties of his or her office and for the
restoration to the Corporation, in case of his or her death, resignation,
retirement, or removal from office, of all books, papers, vouchers, money, and
other property of whatever kind in his or her possession or under his control
belonging to the Corporation. The Treasurer shall be under the supervision of
the Vice President in charge of finance, if one is so designated, and he or she
shall perform such other duties as may be prescribed by the Board of Directors,
the President, or any such Vice President in charge of finance.
Section 13. Duties of Assistant Treasurers. The Assistant Treasurer or
Assistant Treasurers shall assist the Treasurer, and in the absence of the
Treasurer or in the event of his or her inability or refusal to act, the
Assistant Treasurer (or in the event there shall be more than one, the
Assistant Treasurers in the order designated by the Board of Directors, or in
the absence of any designation, then in the order of their appointment) shall
perform the duties and exercise the powers of the Treasurer and shall perform
such other duties and have such other powers as the Board of Directors, the
President, or the Treasurer may from time to time prescribe.
Section 14. Duties of the Controller. The Controller, if one is
appointed, shall have supervision of the accounting practices of the
Corporation and shall prescribe the duties and powers of any other accounting
personnel of the Corporation. He or she shall cause to be maintained an
adequate system of financial control through a program of budgets and
interpretive reports. He or she shall initiate and enforce measures and
procedures whereby the business of the Corporation shall be conducted with the
maximum efficiency and economy. If required, he or she shall prepare a monthly
report covering the operating results of the Corporation. The Controller shall
be under the supervision of the Vice President in charge of finance, if one is
so designated, and he or she shall perform such other duties as may be
prescribed by the Board of Directors, the President or any such Vice President
in charge of finance.
Section 15. Duties of Assistant Controller. The Assistant Controller or
Assistant Controllers shall assist the Controller, and in the absence of the
Controller or in the event of his or her inability or refusal to act, the
Assistant Controllers in the order designated by the Board of Directors, or in
the absence of any designation, then in the order of their appointment, shall
perform the duties and exercise the powers of the Controller and perform such
other duties and
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have such other powers as the Board of Directors, the President or the
Controller may from time to time prescribe.
ARTICLE VI
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings Other Than
Those By or In the Right of the Corporation. The Corporation shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officers, employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines, and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to be believe that his conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings By or In
the Right of the Corporation. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred,
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 3. Success on the Merits in Defense of Any Action, Suit or
Proceeding. To the extent that a director, officer, employee or agent of the
Corporation has been successful on the
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merits or otherwise in defense of any action, suit or proceeding referred to in
Sections 1 or 2 of this Article VI or in defense of any claim, issue or
matter therein, he shall be indemnified against expense (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
Section 4. Authorization of Indemnification. Any indemnification under
Sections 1 or 2 of this Article VI (unless ordered by a court) shall be made by
the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in Section 1 or 2 of this Article VI. Such determination shall be made
(a) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceedings, or (b) if
such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (c) by the stockholders.
Section 5. Expenses Payable in Advance. Expenses incurred by a director,
officer, employee or agent of the Corporation in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article VI.
Section 6. Nonexclusivity of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholder or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
Section 7. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation, as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of this
Article VI.
Section 8. Certain Definitions. For purposes of Article VI, references
to "other enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with respect to any
employee benefit plan; and reference to "serving at the request of the
corporation" shall include any service as a director, officer, employee or
agent of the Corporation which imposes duties on, or involves service by, such
director, officer, employee, or agent with respect to an employee benefit plan,
its participants, or beneficiaries; and
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a person who acted in good faith and in a manner he reasonably believed to be
in the interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" as referred to in Article VI.
Section 9. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant
to, this section shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
Section 10. Limitation on Indemnification. Notwithstanding anything
contained in this Article VI to the contrary, except for proceedings ordered by
a court, the Corporation shall not be obligated to indemnify any director,
officer or employee in connection with a proceeding (or part thereof) initiated
by such person unless such proceeding (or part thereof) was authorized or
consented to by the Board of Directors of the Corporation.
Section 11. Indemnification of Employees and Agents. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article VI to directors and officers of the Corporation if not so conferred
herein.
ARTICLE VII
DISCLOSURES BY STOCKHOLDERS
RESTRICTIONS ON TRANSFER OF STOCK
Section 1. Certain Transfers Prohibited.
(A) Prohibited Transfers. Until the earlier of: (i) the expiration in 2011
of the net operating loss carryforwards which the Corporation had as of
December 31, 1996; or (ii) such date as shall be fixed by the Board of
Directors of the Corporation following a determination by it either that there
are no longer available to any net operating loss carryforwards or that,
notwithstanding the remaining availability, of net operating loss
carryforwards, maintenance of the transfer restrictions shall no longer be in
the best interests of the Corporation, except as otherwise provided in this
Article VII, no shares of Common Stock shall be transferred or become subject
to any agreement to transfer, in any manner whatsoever, whether voluntarily or
involuntarily, by sale, contract, warrant, option, gift, operation of law or
otherwise (any of the foregoing, a "Transfer"), to any person who beneficially
owns directly or through attribution (as determined under Section 382 ("Code
Section 382") of the Internal Revenue Code of 1986, as amended from time to
time (the "Code")), 4.9 percent or more of the then issued and outstanding
shares of Common Stock or who, after giving effect to such Transfer, would
beneficially own directly or through attribution (as determined under Code
Section 382) 4.9 percent or more of the value of the then issued and
outstanding shares of Common Stock (a "4.9%- Holder").
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The Corporation shall make a prompt public disclosure following any action
by the Board of Directors fixing an expiration date for the restrictions on
Transfers. For purposes of this Article VII, "Common Stock" includes any
option, warrant, contractual agreement or other right to purchase or acquire
Common Stock or any securities convertible into exchangeable for Common Stock.
(B) Permitted Transfers. The following Transfers shall be permitted
notwithstanding the provisions of the foregoing subsection (A):
(i) any acquisition of shares of Common Stock pursuant to a tender
offer for all the then issued and outstanding shares of Common Stock;
(ii) any acquisition of shares of Common Stock pursuant to a merger
agreement or acquisition agreement approved by the holders of a majority
of the then issued and outstanding shares of Common Stock (and any entry
into such an agreement subject to such approval);
(iii) any Transfer of shares of Common Stock by a 4.9% Holder (a
"Transferor") to any other person (a "Transferee") if immediately prior
to the Transfer, the Transferee is treated as the beneficial owner of the
shares of Common Stock owned by the Transferor through attribution, as
determined under Code Section 382;
(iv) any other Transfer of shares of Common Stock if the Board of
Directors of the Corporation, with the advice of counsel, determines that
in the judgment of the Board of Directors such Transfer (i) is not likely
to materially and adversely affect the Corporation's ability to preserve
and utilize the net operating loss carryforwards to which it is then
entitled under the Code or (ii) is otherwise in the best interests of and
provides a substantial benefit to the Corporation and its shareholders.
The Corporation and the Board of Directors shall be fully protected in
determining not to exercise their authority under this clause (iv) to
authorize a Transfer in relying on the presumption that a Transfer is
likely to materially and adversely affect the Corporation's ability to
preserve and utilize the net operating loss carryforwards to which it is
the entitled under the Code if, together with any other Transfer by
persons who at such time are 4.9% Holders that would be permitted under
clauses (i) through (iii) of paragraph (b) and under any contractual
arrangements to which such 4.9% Holders are parties at such time, such
Transfers would result in the percentage of Common Stock of the Company
owned by one or more 4.9% Holders having increased by more than 45
percentage points over the lowest percentage of such Common Stock owned
by such persons at any time during the testing period (within the meaning
of Code Section 382).
Should the Board of Directors determine that a Transfer be permitted
under this clause (iv), such action shall not imply that the Board of
Directors will or will not permit subsequent Transfers under this clause
(iv). In permitting a Transfer under this clause (iv)
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the Board of Directors may attach such conditions, if any, that it deems
necessary or appropriate.
(C) Effect of Unauthorized Transfer. Any attempted or purported Transfer
of Common Stock in violation of this Article VII (an "Unauthorized Transfer")
shall be null and void. The Corporation shall not register, recognize or give
effect to any transfer that the Corporation believes to be an Unauthorized
Transfer in violation of this Article VII, and the intended transferee of any
Common stock pursuant to an Unauthorized Transfer shall acquire no rights in
such Common Stock. The Corporation's remedies in respect of any such
Unauthorized Transfer shall include, but not be limited to, those set forth
below, it they may be amended from time to time.
(D) Legend on Certificates. All certificates for shares of Common Stock
issued by the Corporation shall conspicuously bear a legend approved by the
Board of Directors which summarizes in an appropriate manner the provisions of
this Article VII, as it may be amended from time to time, and any related
matters deemed appropriate by the Board of Directors.
(E) Authority of Corporation and Board. The Corporation and the Board of
Directors shall be fully protected in relying in good faith upon the
information, opinions, reports or statements of the President, Chief Executive
Officer, the Chief Operating Officer, the chief financial officer or the chief
accounting officer of the Corporation or the Corporation's legal counsel,
independent auditors, transfer agent, investment bankers, and other employees
and agents, in making any determination pursuant to subsection (B) above. The
Board of Directors of the Corporation is authorized to take such action, to the
extent permitted by law and not inconsistent with this Article VII, as it may
deem necessary or advisable to enforce and carry out the purpose and provisions
of this Article VII.
Section 2. Unauthorized Transfers. If an Unauthorized Transfer
purportedly occurs, the provisions set forth below shall apply:
(A) Notice of Unauthorized Transfer. Within thirty business days of
learning that an Unauthorized Transfer has purportedly occurred, the
Corporation shall cause to be delivered to the purported transferee (the
"Purported Transferee") of the shares (the "Prohibited Stock") purportedly
transferred in violation of the terms of these Bylaws stating in substance that
the Purported Transferee has purportedly received shares in a transaction that
constitutes an Unauthorized Transfer and demanding the Purported Transferee to
surrender or cause to be surrendered to an agent designated by the Corporation
(the "Agent") certificates representing the Prohibited Stock and any dividends
or distributions that such Purported Transferee has received on the Prohibited
Stock.
If the Purported Transferee has purportedly resold the Prohibited Stock
before receiving said notice, the Purported Transferee will be required to
transfer to the Agent the proceeds of such sale, to the extent in excess of the
amount that the Purported Transferee paid for the Prohibited Stock in the
unauthorized transfer, together with any dividends or distributions that
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the Purported Transferee has received on the Prohibited Stock. Unless such
purported resale itself constitutes a Prohibited Transfer, in which case the
other provisions of this Article VII will apply, the transferee shall be
treated as the owner of the Prohibited Stock and as having acquired such
Prohibited Stock from the Purported Transferee acting in the capacity as agent
for the Corporation. If a surrender of Certificates or a transfer of proceeds
required by this subsection (A) is not made within thirty days following
delivery of the notice herein provided for the Corporation may institute legal
proceedings to compel such surrender or transfer.
(B) Sale of Prohibited Stock. As soon as practicable following receipt of
the Prohibited Stock and surrender of any dividends or distributions that the
Purported Transferee has received on the Prohibited Stock, as contemplated by
subsection (A) above, the agent will sell the Prohibited Stock and any non-cash
dividends or distributions in an arm's-length transaction (using best efforts
to consummate such sale on the Nasdaq National Market or such other national
exchange on which the Corporation's common stock is then traded or included for
quotation). After applying the proceeds from such sale toward reimbursement of
the Purported Transferee for the price that the Purported Transferee paid for
the Prohibited Stock in the Unauthorized Transfer (or the fair market value of
the Prohibited Stock at the time of the Unauthorized Transfer if such
Unauthorized Transfer was by way of gift, devise, or similar transfer), the
Agent will pay any remaining proceeds and any cash dividends and distributions
so surrendered to organizations described in Section 501(c)(3) of the Code that
are designated by the Corporation. In no event shall the proceeds of any such
sale by the Agent or the surrender of dividends or distributions inure to the
benefit of the Corporation or the Agent, but such amounts may be used to cover
expenses incurred by the Agent in performing its duties hereunder prior to any
reimbursement being made pursuant to this subsection (B).
(C) Liability for Damages and Costs. In addition to the remedy described
in subsections (A) and (B), any person who knowingly engages in an Unauthorized
Transfer shall be liable to the Corporation for any damages and costs incurred
by the Corporation as a result of any such violation.
(D) Disclosure of Shareholdings. Upon demand by the Corporation, the
shareholders of the Corporation shall disclose to the Corporation in writing
such information with respect to their direct and indirect ownership of Common
Stock as the Corporation deems necessary to ensure compliance with this Article
VII.
Section 3. Severability. If any provision included in this Article VII
is determined to be void, invalid, or unenforceable by virtue of any legal
decision, statute, rule or regulation, then, at the option of the Corporation,
the Purported Transferee shall be deemed to have acted on behalf of the
Corporation in acquiring the Prohibited Stock and to hold such Prohibited Stock
on behalf of the Corporation.
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ARTICLE VIII
CERTIFICATES REPRESENTING STOCK
Section 1. Right to Certificate. Every holder of stock in the
Corporation shall be entitled to have a certificate, signed by, or in the name
of the Corporation by, the President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by him or her in the Corporation. If the
Corporation shall be authorized to issue more than one class of stock or more
than one series of any class, the powers, designations, preferences, and
relative, participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations, or restrictions of
such preferences or rights shall be set forth in full or summarized on the face
or back of the certificate which the Corporation shall issue to represent such
class or series of stock; provided, that, except as otherwise provided in
Section 202 of the General Corporation Law of the State of Delaware, in lieu of
the foregoing requirements, there may be set forth on the face or back of the
certificate which the Corporation shall issue to represent such class or series
of stock a statement that the Corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences, and
relative, participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations, or restrictions of
such preferences or rights.
Section 2. Facsimile Signatures. Any of or all the signatures on the
certificate may be facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he or she were such officer, transfer agent, or registrar at
the date of issue.
Section 3. New Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation and alleged to have been
lost, stolen, destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to advertise the same in such
manner as it shall require or to give the Corporation a bond in such sum as it
may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen,
or destroyed or the issuance of such new certificate.
Section 4. Transfers. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation, or authority to
transfer, it shall be the duty of the Corporation, subject to any proper
restrictions on transfer, to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction upon its books.
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<PAGE> 49
Section 5. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be less than 10 nor more than 60 days before the date of
such meeting or any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board of Directors
may, but shall not be required to, fix a new record date for the adjourned
meeting.
Section 6. Registered Stockholders. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books a the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or
not provided by the laws of the State of Delaware.
ARTICLE IX
CORPORATE RECORDS
Section 1. Location. The books, accounts and records of the Corporation
may be kept at such place or places within or without the State of Delaware as
the Board of Directors may from time to time determine.
Section 2. Inspection. The books, accounts and records of the
Corporation shall be open to inspection by any member of the Board of Directors
at all times; and open to inspection by the stockholders at such times, and
subject to such regulations as the Board of Directors may prescribe, except as
otherwise provided by stature.
Section 3. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization, and the word
"Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed, affixed, reproduced, or otherwise.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, if any, subject to the provisions of the Certificate of
Incorporation, may be declared by the Board of Directors (but not any committee
thereof) at any regular meeting, pursuant to law. Dividends may be paid in
cash, in property, or in shares of the capital stock, subject to the provisions
of the Certificate of Incorporation.
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Section 2. Reserves. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors from time to time, in their absolute discretion,
thinks proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the Board of Directors shall think conducive to the
interest of the Corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.
Section 3. Annual Statement. The Board of Directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the Corporation.
Section 4. Depositories. The Board of Directors shall appoint bank,
trust companies, or other depositories in which shall be deposited from time to
time the money or securities of the Corporation.
Section 5. Checks, Drafts and Notes. All checks, drafts, or other orders
for the payment and all notes or other evidences of indebtedness issues in the
name of the Corporation shall be signed by such officer or officers or agent or
agents as shall from time to time be designated by resolution of the Board of
Directors or by an officer appointed by the Board of Directors.
Section 6. Interested Directors: Quorum. No contract or transaction
between the Corporation and one or more of its directors or officers, or
between the Corporation and any other corporation, partnership, association, or
other organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present at
or participates in the meeting of the Board or committee thereof which
authorizes the contract or transactions, or solely because his or their votes
are counted for such purpose, if: (1) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board or
committee in good faith authorizes the contract or transaction by the
affirmative votes of majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (2) the material facts as to
his relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (3) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified by the Board of
Directors, a committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting
of the Board of Directors or of a committee which authorizes the contract or
transaction.
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ARTICLE XI
AMENDMENTS
The bylaws of the Corporation may be adopted, amended or repealed by the
stockholders entitled to vote; provided, however, that the Board of Directors
may also alter or repeal these Bylaws or make new Bylaws. The fact that such
power has been so conferred upon the directors shall not divest the
stockholders of the power, nor limit their power, to adopt, amend or repeal
bylaws.
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BANYAN STRATEGIC LAND FUND II
150 SOUTH WACKER DRIVE
SUITE 2900
CHICAGO, ILLINOIS 60606
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Leonard G. Levine and Robert G. Higgins,
and each of them, as Proxies, with the power to appoint their substitutes, and
hereby authorizes them to represent and to vote, as designated below, all the
Shares of common stock, par value $.01 per share ("Common Stock") of Banyan
Strategic Land Fund II (the "Company") held of record by the undersigned on
September 1, 1997, at the Annual Meeting of Stockholders when convened on
October 8, 1997, or any adjournment thereof.
THIS PROXY, IF PROPERLY EXECUTED AND RECEIVED IN TIME FOR VOTING, WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 THROUGH 4, AND IN
ACCORDANCE WITH THE JUDGMENT OF THE PERSONS ACTING UNDER THE PROXIES ON OTHER
MATTERS PRESENTED FOR A VOTE.
CONTINUED ON THE REVERSE SIDE.
X
PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<S> <C> <C> <C> <C>
PROPOSAL to elect six Directors to hold office until
the Annual Meeting of Stockholders indicated in
parentheses, or otherwise as provided in the Company's
Bylaws (check one box).
NOMINEES: James A. Coyne and Gerald L. Nudo (1997),
1. Election of FOR AGAINST Joseph W. Bartlett and Robert M. Ungerleider (1998), and
Directors [ ] [ ] Walter E. Auch and Gary D. Engle (1999)
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------
PROPOSAL to concur in the appointment of Ernst & Young
2. Selection of FOR AGAINST ABSTAIN LLP as the Company's independent auditor for the fiscal
Independent Auditor [ ] [ ] [ ] year ending December 31, 1997 (check one box).
3. Adoption of
Amended and
Restated
Certificate of FOR AGAINST ABSTAIN PROPOSAL to approve and adopt the Company's Amended and
Incorporation [ ] [ ] [ ] Restated Certificate of Incorporation (check one box).
4. Adoption of
Amended and FOR AGAINST ABSTAIN PROPOSAL to approve and adopt the Company's Amended and
Restated Bylaws [ ] [ ] [ ] Restated Bylaws (check one box).
</TABLE>
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN
THIS CARD USING THE ENCLOSED ENVELOPE.
PLEASE CONTACT THE COMPANY'S PROXY
SOLICITOR, ____________, AT ____________
WITH ANY QUESTIONS REGARDING THE ABOVE.
SIGNATURE(S)__________________________________________ DATE____________________
NOTE: Sign exactly as name appears above. If joint tenant, both should sign.
If attorney, executor, administrator, trustee or guardian, give full title
as such. If a corporation, please sign corporate name by President or
authorized officer. If partnership, sign in full partnership name by
authorized person.
