<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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
LEGEND PROPERTIES
- --------------------------------------------------------------------------------
(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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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:
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[ ] 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
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[LEGEND LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------
To the Shareholders of Legend Properties, Inc.:
Notice is hereby given that the annual meeting of shareholders (the
"Meeting" or the "Annual Meeting") of Legend Properties, Inc., a Delaware
corporation (the "Company"), will be convened at the office of the Company, U.S.
Bank Centre, 1420 Fifth Avenue, 42nd Floor, Seattle, Washington on June 30,
1997, at 10:00 a.m. pacific time (the "Meeting Date"). All shareholders of the
Company (the "Shareholders") are entitled to attend the Meeting. The Annual
Meeting of Shareholders will be held for the following purposes:
(1) To elect five Directors to hold office until the next Annual Meeting of
Shareholders or otherwise as provided in the Company's Amended and
Restated Certificate of Incorporation (the "Certificate");
(2) To concur in the selection of KPMG Peat Marwick LLP as the Company's
principal independent accountants for the fiscal year ending December
31, 1997;
(3) To amend Article Fourth of the Company's Amended and Restated
Certificate of Incorporation to reduce the number of authorized shares
of capital stock to 15,000,000 shares, of which 5,000,000 shares shall
be preferred stock, $0.01 par value, and 10,000,000 shares shall be
common stock, $0.01 par value.
(4) To transact any other business as may properly come before the Meeting,
or any adjournment thereof.
Only Shareholders of record at the close of business on May 29, 1997 are
entitled to receive notice of and to vote at the Meeting or any adjournment
thereof (the "Eligible Holders"). A complete list of Eligible Holders will be
available for inspection at the Company's offices for at least ten 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 PROMPTLY FILL IN, SIGN,
DATE AND MAIL THE PROXY IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES MAY BE
VOTED FOR YOU.
By order of the Board of Directors:
/s/ RAYMOND J. WHITTY
Raymond J. Whitty
Secretary
The Company's 1996 Annual Report on Form 10-K is enclosed with this notice.
<PAGE> 3
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS OF
LEGEND PROPERTIES, INC.
JUNE 30, 1997
This proxy statement is furnished to the holders of shares ("the
Shareholders") of Common Stock, $0.01 par value (the "Common Stock" or the
"Shares"), of Legend Properties, Inc., a Delaware corporation (the "Company"),
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
Shareholders. The Company's annual meeting of Shareholders for the fiscal year
ended December 31, 1996 will be convened on June 30, 1997, at approximately
10:00 a.m. pacific time, and any adjournment thereof (the "Annual Meeting" or
the "Meeting"). Copies of this Proxy Statement, the attached notice, and the
enclosed form of proxy were first sent or given to Shareholders on or about June
3, 1997. Shareholders who wish to attend the Annual Meeting should contact the
Company at 206-464-0123 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 employees. None of these individuals will
be compensated for proxy solicitation services, but they may be reimbursed for
out-of-pocket expenses in connection with the solicitation. Arrangements will
also be made with brokerage houses, banks and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial
owners of the Shares 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.
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 Shareholder 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
Shareholders 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 and in accordance with the
judgment of the persons acting under proxies on other matters presented for a
vote. A Shareholder 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) executing and delivering a
later-dated proxy; or (iii) attending the Annual Meeting and voting the Shares
in person.
The close of business on May 29, 1997 has been fixed as the date for
determining those Shareholders entitled to notice of and to vote at the Annual
Meeting (the "Record Date"). On the Record Date, the Company had 6,290,874
Shares outstanding, each of which entitles the holder thereof to one vote at the
Annual Meeting. Only Shareholders 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. Accordingly, abstentions and broker
non-votes will not affect the outcome of the election of directors. The
affirmative vote of a majority of the shares present or represented at the
meeting and entitled to vote will be required to approve proposal number two. An
abstention will have the same effect as a negative vote but, because Shares held
by brokers will not be considered entitled to vote on matters as to which the
brokers withhold authority, a broker non-vote will have no effect on the vote.
The affirmative vote of a majority of the Company's outstanding Shares is
required to approve proposal number three. Accordingly, abstentions and broker
non-votes will have the same effect as a negative vote.
The mailing address of the principal executive offices of the Company is
1420 Fifth Avenue, Suite 4200, Seattle, Washington 98101.
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<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following entity is the only entity or individual known to the Company
to be the beneficial owner of more than five percent (5%) of the outstanding
shares as of May 9, 1997:
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
- ----------------------------------- ------------------------------------- --------- ----------
<S> <C> <C> <C>
Common Stock, $0.01 par value...... RGI Holdings, Inc., 1420 Fifth 4,990,447 79%
Avenue, Suite 4200, Seattle,
Washington 98101(1)
</TABLE>
- -------------------------
(1) Mr. Uptain, the Company's President and a Director, and Mr. Storetvedt, a
nominee for Director, own 361,744 and 19,036 shares, respectively, of the
outstanding common stock of Aker RGI ASA which is the parent company of RGI
Holdings, Inc.
The following table sets forth the number of Shares owned by all Directors
and Officers owning Shares, and all Directors and Officers as a group as of
May 9, 1997.
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP PERCENT OF INTEREST
- ----------------------------------------------------------- -------------------- -------------------
<S> <C> <C>
Walter E. Auch, Sr. ....................................... 640 shares Less than 1%
Robert M. Ungerleider...................................... 1,560 shares Less than 1%
All Directors and Officers of the Company, as a group
(seven persons).......................................... 2,200 shares Less than 1%
</TABLE>
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 and Exchange Commission (the "SEC") and the
National Association of Securities Dealers, Inc. (the "NASD"). The SEC requires
officers, directors and greater than ten percent shareholders 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 representation 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.
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<PAGE> 5
MATTERS TO BE CONSIDERED BY SHAREHOLDERS
1. ELECTION OF DIRECTORS
Five individuals will be elected at the Annual Meeting to serve as
Directors of the Company until the next annual meeting of Shareholders or
otherwise as provided in the Certificate. 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 Directors 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 nominees for Director are as follows:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS SINCE
- ------------------------- --- ----------------------------------------------------- --------
<S> <C> <C> <C>
Walter E. Auch, Sr. ..... 75 Mr. Auch was the chairman and chief executive officer 1988
of the Chicago Board Options Exchange from 1979 to
1986. Prior to that time, he was executive vice
president, director and a member of the executive
committee of Paine Webber. Mr. Auch is a director of
Pimco L.P., Geotek Industries, Smith Barney Concert
Series Funds, Smith Barney Trak Fund, Nicholas
Applegate Funds and Fort Dearborn Fund, and a trustee
of Hillsdale College and the Arizona Heart Institute.
Mr. Auch has been a director of the Company since
1988. Mr. Auch is a trustee of Banyan Strategic
Realty Company and a director of Banyan Strategic
Land Fund II and BMC.
Robert M. Ungerleider.... 55 Mr. Ungerleider is presently the President of Pilot 1988
Books, a book publisher located in Greenport, New
York, and practices law with and is of counsel to the
firm of Felcher, Fox & Litner P.C., in New York, New
York. He has founded, developed and sold a number of
start-up ventures including Verifone Finance, an
equipment leasing business, SmartPage, a paging
service company and Financial Risk Underwriting
Agency, Inc., an insurance agency specializing in
financial guarantee transactions. Prior to these
endeavors, Mr. Ungerleider practiced real estate and
corporate law. Mr. Ungerleider received his B.A.
Degree from Colgate University and his Law Degree
from Columbia University Law School. Mr. Ungerleider
has been a director of the Company since 1988. Mr.
Ungerleider is also a director of Banyan Strategic
Land Fund II.
Fred E. Welker, III...... 49 Mr. Welker has been the President of Realty Financial 1996
Advisors, Inc., a real estate investment banking
firm, since January 1993. From 1982 to 1992, Mr.
Welker was the Executive Vice President for the
Southeast Regional Office of Sonnenblick-Goldman
Company, a real estate investment banking firm. From
1981 to 1982, Mr. Welker was Vice President-Joint
Ventures for American Savings & Loan Association, and
from 1976 to 1981 he was a commercial loan officer
with First Federal of Broward (merged with Glendale
Federal). Mr. Welker received his Bachelor Degree
from the University of Georgia.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS SINCE
- ------------------------- --- ----------------------------------------------------- --------
<S> <C> <C> <C>
Kenneth L. Uptain........ 43 Mr. Uptain has been the President and Director of the 1996
Company since December 31, 1996. Prior to that from
August 1994 until December 1996, Mr. Uptain served as
President and Director of RGI US Holdings, inc.
(which was merged with and into the Company) and
since August 1994 has served as President and
Director of RGI/US, RGI Holdings and RGI Real Estate.
Since 1988, Mr. Uptain has served as President and a
Director of Resource Group, Inc., a real estate
development company affiliated with RGI Inc.
Jan Petter Storetvedt.... 42 Mr. Storetvedt has not previously served in any
capacity with the Company. Mr. Storetvedt has been
the Senior Vice President, Investment Real Estate in
Aker RGI ASA since March 1997. In addition, since
December 1991 he has been President, Chief Executive
Officer and a Director in Avantor ASA, a Norwegian
publicly traded, real estate company, 15% of which is
owned Aker RGI ASA. Since March 1997, he has served
as chairman of the board of Avantor ASA. Mr.
Storetvedt has also been a director of RGI Holdings
Inc. since June 1995.
</TABLE>
The Board is required to meet at least four times per year, either in
person or by telephonic conference. The Board met 25 times in 1996, including
two times as the Audit Committee. The Directors did not establish any
nominating, compensation or other committees or other groups performing similar
functions during 1996, other than the Audit Committee which was comprised of
Messrs. Auch and Ungerleider. Mr. Welker joined the committee in January 1997.
RECOMMENDATION OF THE BOARD: The Board hereby recommends and nominates
Messrs. Auch, Welker, Ungerleider, Uptain and Storetvedt for election as
Directors of the Company by the Shareholders at the Annual Meeting to serve
until the next annual meeting of Shareholders or as otherwise provided in the
Certificate.
The five individuals receiving the highest vote totals will be elected as
directors.
2. SELECTION OF INDEPENDENT AUDITOR
Effective December 31, 1996, the Registrant has engaged the independent
accounting firm of KPMG Peat Marwick LLP (KPMG) to serve as the Registrant's
principal independent accountant, to audit the Registrant's consolidated
financial statements. KPMG was the principal independent accountant for RGI/US,
and audited RGI/US' consolidated financial statements as of and for the years
ended December 31, 1993, 1994 and 1995. The independent accounting firm of Ernst
and Young LLP (E&Y) served as the principal independent accountant to audit
Banyan's financial statements since December 21, 1995. At no time during E&Y's
engagement as Banyan's principal accountant were there any disagreements between
Banyan and E&Y on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
The Board believes that KPMG is knowledgeable about the Company's
operations and accounting practices and is well qualified to act in the capacity
of principal independent accountants. Therefore, the Board has selected KPMG to
continue as the Company's principal independent accountants to examine its
consolidated financial statements for the fiscal year ended December 31, 1997.
Although the selection of independent accountants does not require approval of
the shareholders, the Board believes it is desirable to obtain the concurrence
of the Shareholders 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
accountants for fiscal year ended December 31, 1997 if the Shareholders do
4
<PAGE> 7
not concur in the appointment of KPMG. Instead, the Board will consider the vote
as advice in making their selection of independent accountants for the following
year.
Representatives of KPMG are expected to be present at the Annual 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: That the Shareholders concur in the following
resolution which will be presented for a vote of the Shareholders at the Annual
Meeting:
RESOLVED, that the Shareholders concur in the appointment by the Board of
KPMG Peat Marwick LLP to continue to serve as the Company's principal
independent accountants for the fiscal year ended December 31, 1997.
The affirmative vote of a majority of the votes cast by Shareholders
present in person or by proxy and eligible to vote at the Annual Meeting, a
quorum being present, is required to adopt the foregoing resolution.
3. AMENDMENT TO COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO
REDUCE THE NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK FROM 105.0 MILLION TO
15.0 MILLION
The Company currently is authorized to issue 105.0 million shares of
capital stock of which 5.0 million shares must be shares of preferred stock
having a par value of $0.01 per share and 100.0 million shares must be shares of
common stock of one class having a par value of $0.01 per share. As of May 9,
1997, the Company had 6,290,874 shares of common stock issued and outstanding.
No shares of preferred stock were issued. Following the Company's merger with
RGI U.S. Holdings and the "reverse-split" effected in connection therewith, the
Company's board of directors concluded, on the advice of the Company's
management that the Company's future business plans and financing needs do not
require the Company to maintain the flexibility afforded by having over 90.0
million shares of common stock available for issuance. In reaching this
decision, the Board considered the costs associated with maintaining these
unissued shares and the potential negative impact on the market for the
Company's common stock caused by such a large "overhang." Therefore, the Board
concluded that it is desirable to reduce the number of authorized shares of
common stock from 100.0 million to 10.0 million.
RECOMMENDATION OF THE BOARD: That the Shareholders concur in the following
resolution which will be presented for a vote of the Shareholders at the Annual
Meeting:
RESOLVED, that the first sentence of Article IV of the Company's Amended
and Restated Certificate of Incorporation be deleted in its entirety and be
replaced by the following:
The total number of shares of capital stock which the Corporation shall
have authority to issue is 15.0 million shares, of which 5,000,000 shares shall
be preferred stock, $0.01 par value, and 10,000,000 shares shall be common
stock, $0.01 par value.
The affirmative vote of a majority of the Company's shares of common stock
are required to adopt the proposal.
EXECUTIVE OFFICERS
The following table sets forth information with respect to the Company's
executive officers. Each officer serves until his successor is elected and
qualified by the Directors or until his death, resignation or removal by
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<PAGE> 8
the Directors. For Mr. Uptain's biography see "Matters to be Considered by
Shareholders -- Election of Directors" above.
<TABLE>
<CAPTION>
OTHER PRINCIPAL OCCUPATIONS DURING PAST OFFICE AND YEAR
NAME AGE FIVE YEARS FIRST ELECTED
- ----------------------- --- ---------------------------------------- -------------------------
<S> <C> <C> <C>
Raymond J. Whitty...... 52 Mr. Whitty has been Chief Financial Chief Financial Officer,
Officer and Treasurer of the Company Treasurer, Secretary;
since January 1997. He has been 1997
Secretary of the Company since February
1997. From May 1996 to December 1996,
Mr. Whitty was a financial consultant to
RGI. From October 1995 to May 1996 he
was an independent financial consultant.
From August 1988 until September 1995,
Mr. Whitty was the Chief Financial
Officer of Westin Hotel Company.
Chris J. Pollak........ 30 Mr. Pollak has been Corporate Controller Vice President; 1997
of the Company since January 1997. Mr.
Pollak has been Vice President of the
Company since February 1997. From
October 1996 to January 1997, Mr. Pollak
was the Corporate Controller for
Northwest Lodging, Inc. and American
Motels Acquisition Company L.P.
(collectively "Northwest"). Northwest
owns and operates hotels and motels in
the western United States. Mr. Pollak
was employed by KPMG Peat Marwick LLP
("KPMG") from September 1990 to
September 1996. He was a manager in
KPMG's Real Estate Practice from July
1995 to September 1996. Mr. Pollak
received a B.A. Degree in Business
Administration with concentrations in
Accounting and Finance from Washington
State University. He is a Certified
Public Accountant and a member of the
Washington State Society of CPAs.
</TABLE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
A. DIRECTOR COMPENSATION
The Directors are each 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
Since December 31, 1996, Ken Uptain has served as President of the Company,
but did not receive any compensation during the last three fiscal years from the
Company or from RGI U.S. Holdings, Inc. Prior to completion of the Company's
merger with RGI U.S. Holdings, Inc. on December 31, 1996, Leonard G. Levine
served as the Company's President. Mr. Levine served as Chief Executive Officer
of the Company pursuant to an employment agreement entered into on January 1,
1990 through December 31, 1996. As amended, the agreement expires December 31,
1998. Under the amended agreement, Mr. Levine was paid a base salary during 1996
of $108,141. Mr. Levine was also eligible to receive compensation under an
incentive
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<PAGE> 9
program included in his contract. Mr. Levine earned incentive compensation based
upon specified percentages of the Company's collateralized claims which were
converted into cash, the amount of the Company's unsecured claims which were
converted into cash, cash distributions of capital to stockholders and
distributions of income to stockholders of the Company.
Pursuant to Mr. Levine's amended employment agreement, all incentive
amounts earned had been paid 80% in cash and 20% in shares of the Company's
common stock (the "Award Shares") on or before March 15 of the year following
the period for which the incentive was earned. The preceding table set forth the
incentive compensation earned by Mr. Levine during the last three fiscal years.
Mr. Levine received 3,196 Award Shares (issue price equal to $13.43 per share)
and 2,017 Award Shares (issue price equal to $28.75 per share) in respect to
incentive compensation earned by Mr. Levine for the fiscal years ended December
31, 1994 and 1993 respectively. In addition, Mr. Levine received 742 Award
Shares (issue price equal to $10.78 per share) for the fiscal year ended
December 31, 1995. The Award Shares issued to Mr. Levine had been held in trust
by the Company, pending satisfaction of the vesting requirements contained in
the employment agreement. Mr. Levine satisfied the vesting requirement of his
amended employment agreement upon his resignation and termination of employment
with the Company without cause following a change in control of the Company,
pursuant to the terms of the Merger.
Pursuant to the Merger, Mr. Levine resigned and his employment was
terminated without cause following a change of control of the Company (as
defined in the Merger agreement). However, the Company remains obligated to pay
Mr. Levine his base salary as defined in the amended employment agreement
through its expiration date of December 31, 1998, which will result in a payment
to Mr. Levine of approximately $110,000 in base salary for the fiscal year ended
December 31, 1997. In addition, under the employment agreement, as a result of
the change of control, on December 31, 1996 Mr. Levine received a payment of
$1,218,285 representing incentive compensation equal to that which he would have
earned if all of the Company's assets had been converted into cash and all
proceeds were distributed as of the date of his employment termination.
The number of Award Shares issued to Mr. Levine and the share prices as
described above have been adjusted by multiplying the issue price and dividing
the number of shares issued by twenty-five thus giving effect to the Company's
reverse stock-split as approved by its stockholders.
The following sets forth the compensation, in excess of $100,000, paid to
the Company's executive officers and key employees for the years ended December
31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
OTHER --------------------- PAYOUTS
ANNUAL COMPENSATION ANNUAL RESTRICTED ------- ALL OTHER
----------------------------- COMPEN- STOCK OPTIONS/ LTIP COMPEN-
YEAR SALARY(1) BONUS(1) SATION AWARDS SARS(#) PAYOUTS SATION
---- --------- -------- ------- ---------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leonard G. Levine,.... 1996 $ 108,141 $ 32,044 N/A $ 8,011 N/A N/A N/A
President 1995 105,606 171,805 N/A $ 42,951 N/A N/A N/A
1994 102,400 231,166 N/A $ 53,002 N/A N/A N/A
Donald Proctor(2)..... 1996 $ 200,000 $ 1,500 N/A N/A N/A N/A N/A
1995 N/A N/A N/A N/A N/A N/A N/A
1994 N/A N/A N/A N/A N/A N/A N/A
Ronald
D'Haeseleer(3)...... 1996 $ 140,000 $ 1,000 N/A N/A N/A N/A N/A
1995 N/A N/A N/A N/A N/A N/A N/A
1994 N/A N/A N/A N/A N/A N/A N/A
Douglas Widell(4)..... 1996 $ 140,000 $ 11,500 N/A N/A N/A N/A N/A
1995 N/A N/A N/A N/A N/A N/A N/A
1994 N/A N/A N/A N/A N/A N/A N/A
</TABLE>
- -------------------------
(1) No other executive officer or key employee, earned more than $100,000 in
salary and bonus.
(2) Mr. Proctor serves as an executive officer of Grand Harbor Property
Holdings, Inc. ("GHPH"), a subsidiary of the Company. In this capacity, Mr.
Proctor exercises policy making functions for GHPH. Although Mr. Proctor has
been employed by this entity or its predecessor since July 1991, prior to
1996 the Company owned only a minority interest in GHPH.
7
<PAGE> 10
(3) Mr. D'Haeseleer serves as an executive officer of GHPH. In this capacity,
Mr. D'Haeseleer exercises policy making functions for GHPH. Although Mr.
D'Haeseleer has been employed by this entity or its predecessor since July
1991, prior to 1996, the Company owned only a minority interest in GHPH.
(4) Mr. Widell serves as an executive officer of Oak Harbor Property Holdings,
Inc. ("OHPH"), a subsidiary of the Company. Although Mr. Widell has been
employed by this entity since August 1994, prior to 1996 the Company owned
only a minority interest in OHPH.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board has formed a Compensation Committee comprised of the three
outside directors: Messrs. Auch, Ungerleider and Welker (the "Committee"). The
Committee will be responsible for setting and administering executive officer
salaries and the annual bonus and long-term incentive plans that the Company may
adopt to incentivize management of the Company. The Committee does not believe
that the compensation policies applicable to the Company's executives prior to
the merger are relevant for evaluating compensation on a going-forward basis.
The Committee is in the process of formulating the types of compensation
policies that will be put in place for the Company's officers and key employees
including those of the Company's subsidiaries. Presently, Messrs. Uptain and
Whitty are paid salaries equal to $200,000 and $150,000, respectively. The
Company does not presently have any incentive or bonus plans in place for its
executive officers.
The Compensation Committee:
Walter E. Auch, Sr.
Robert Ungerleider
Fred L. Welker
8
<PAGE> 11
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total return of
Legend Properties, Inc., the Russell 2000, and a "peer group" comprised of the
following companies: American Gulf Communities Corporation, Castle & Cooke,
Inc., HMG Courtland Properties, Inc., Interstate General Company, L.P., Oriole
Homes Corp. and Bluegreen Corporation (f/k/a Patten Corporation).
[GRAPH]
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) The Company Peer Group Russell 2000
<S> <C> <C> <C>
Dec-91 100 100 100
Dec-92 123.21 121.49 116.52
Dec-93 223.21 170.94 136.64
Dec-94 100 155.31 132.17
Dec-95 71.43 142.71 167.16
Dec-96 55.36 159.84 191.84
</TABLE>
The above graph is based upon common stock and index prices calculated as
of December 31 for each of the last five years. The Company's December 31, 1996
closing price per share of common stock was $7.75 (adjusted for the 25:1 reverse
stock split which occurred on December 31, 1996). As of May 9, 1997, the
Company's common shares closed at $4.00 per share. The stock price performance
depicted in the graph above represents the past performance of Banyan Mortgage
Investment Fund (Banyan). Legend Properties, Inc., formerly known as Banyan, is
the surviving corporation from the December 31, 1996 merger with RGI U.S.
Holdings, Inc. (RGI/US). For financial reporting purposes, RGI/US was the
acquiror of Banyan, which changed its name to Legend Properties, Inc. upon the
effectiveness of the merger. The past performance of Banyan is not necessarily
indicative of the future performance of Legend Properties, Inc.
SHAREHOLDER PROPOSALS
Shareholder proposals for the 1997 Annual Meeting of Shareholders must be
received by the Company at its executive office in Seattle, Washington, on or
prior to February 5, 1998 for inclusion in the Company's proxy statement for
that meeting. Any Shareholder proposal must meet the requirements set forth in
the rules of the Securities and Exchange Commission relating to Shareholder
proposals.
9
<PAGE> 12
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 no 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.
Legend Properties, Inc.
By the order of the Board of Directors
/s/ KENNETH L. UPTAIN
Kenneth L. Uptain
President
Seattle, Washington
May 29, 1997
10
<PAGE> 13
ANNEX A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
LEGEND PROPERTIES, INC. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
FIRST: That on May 30, 1997, the Board of Directors of the Corporation duly
adopted the following resolution setting forth a proposed amendment to the
Corporation's Certificate of Incorporation declaring the amendment to be
advisable. The resolution setting forth the proposed amendments is as follows:
RESOLVED, that the first sentence of Article IV, Section A be, and hereby
is, deleted in its entirety and the following be substituted in its entirety:
"The total number of shares of capital stock which the Corporation shall
have authority to issue is fifteen million (15,000,000) shares, of which
5,000,000 shares shall be preferred stock, $0.1 par value, and 10,000,000 shares
shall be common stock, $.01 par value.
11
<PAGE> 14
- --------------------------------------------------------------------------------
PROXY
DETACH HERE
LEGEND PROPERTIES, INC.
1420 FIFTH AVENUE
SUITE 4200
SEATTLE, WASHINGTON 98101
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Kenneth L. Uptain and Raymond J. Whitty,
and each of them, as Proxies, with the power to appoint their substitutes, and
hereby authorizes them to represent and to vote, as designated on the reverse
side, all the Shares of Common Stock, $0.01 par value, of Legend Properties,
Inc. held of record by the undersigned on May 29, 1997, at the Annual Meeting
of Shareholders when convened on June 30, 1997, or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2, AND 3.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
Copies of press releases are available by fax to all shareholders immediately
upon their release, free of charge, by faxing Investor Relations at (206)
464-0800, or by calling the Company at (206) 464-0123. OR, TO BE ADDED TO OUR
DISTRIBUTION LIST TO RECEIVE FUTURE INFORMATION WHEN IT IS RELEASED, SIMPLY
FILL OUT THE ENCLOSED CARD AND RETURN WITH YOUR COMPLETED PROXY CARD IN THE
ENCLOSED SELF-ADDRESSED ENVELOPE. Copies of Quarterly Reports on Form 10-Q or
Annual Reports on Form 10-K filed with the Securities and Exchange Commission
are available by contacting the Company. Please write to Investor Relations,
Legend Properties, Inc., U.S. Bank Centre, 1420 Fifth Avenue, 42nd Floor,
Seattle, WA 98101.
/ / I would like to receive future information on the Company.
Name:
-------------------------------------------------------------
Mailing Address:
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
Fax number:
-------------------------------------------------------------
- --------------------------------------------------------------------------------
DETACH HERE
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE.
1. Election of Directors
PROPOSAL to elect five Directors to hold office until the next Annual
Meeting of Shareholders, or otherwise so provided in the Company's Amended
and Restated Certificate of Incorporation (mark one box):
NOMINEES: Walter E. Auch, Sr., Robert M. Ungerleider, Fred E. Welker,
Kenneth L. Uptain, Jan Petter Storetvedt
FOR WITHHELD
/ / / /
/ /
--------------------------------------
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW / /
FOR AGAINST ABSTAIN
2. PROPOSAL to concur in the selection of / / / / / /
KPMG Peat Marwick LLP as the Company's
principal independent accountants for
the fiscal year ending December 31, 1997
(mark one box):
FOR AGAINST ABSTAIN
/ / / / / /
3. PROPOSAL to amend Article Fourth of the
Company's Amended and Restated Certificate
of incorporation to reduce the number of
authorized shares of capital stock to
15,000,000 shares, of which 5,000,000
shares shall be preferred stock, $0.01
par value, and 10,000,000 shares shall be
common stock, $0.01 par value (mark one box):
4. In their discretion, the Proxies are authorized to transact any other
business as may properly come before the Meeting or any adjournment thereof.
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN THIS CARD USING THE ENCLOSED
ENVELOPE.
NOTE: Sign exactly as name appears at left, if joint tenants, 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.
Signature: Date: Signature: Date:
------------------ ------ -------------- ------
<PAGE> 15
LEGEND PROPERTIES, INC.
FIRST QUARTER REPORT 1997
TO: LEGEND SHAREHOLDERS AND OTHER
INTERESTED PARTIES
I am very pleased to present Legend Properties' first quarterly report
to shareholders. We hope it will help shareholders and others understand our
new company -- its performance, objectives, strategies and properties.
On December 31, 1996, RGI US Holdings, Inc. merged with Banyan Mortgage
Investment Fund, a publicly traded company. The surviving entity was renamed
Legend Properties, Inc., and is traded on the NASDAQ-small cap market under the
symbol LPRO.
The merger was a long and difficult process, but we believe it created
a company with significant untapped equity values which, over time, will be
recognized in the share price. The former Banyan assets (located in Virginia,
Maryland and California) are excellent real estate development properties that,
because of a lack of resources, were not developed. The former RGI US Holdings
properties (located in Florida and Washington state) have completed the startup
stage of development and are now positioned to begin realizing their potential.
Legend Properties is a real estate development company with extensive
residential and commercial/industrial properties. The company owns more than
5,800 acres, with entitlements or approvals for more than 10,000 homes and in
excess of six million square feet of commercial and industrial space.
Based in Seattle, Washington, Legend has a lean but very experienced
staff of professionals with a commitment to the growth of the company.
Supplementing the corporate staff are experienced on-site management teams at
each development location. All of us are focused on moving forward to build
revenue and reduce operating expenses, thus generating cash flow and profits. I
am very proud of our group and look forward to showing our shareholders what we
can accomplish.
Legend does have some financing challenges ahead. For example, the
company needs to complete the construction financing of the Southbridge and
Chapman's Landing developments in suburban Washington, DC, as well as refinance
a significant portion of its current debt. We're optimistic about meeting those
challenges.
When reviewing the quarterly results which are detailed later in this
report, the reader should keep in mind that development is just getting started
at Southbridge and Chapman's Landing, and the Laguna Seca Ranch is held for
sale. All three properties are former Banyan assets. At March 31, 1997, these
properties represented approximately 35 percent of total assets but accounted
for none of the first quarter revenues and approximately 95 percent of the
quarterly net loss.
The market for lots at Southbridge and Chapman's Landing is very
strong. The company currently has contracts and letters of intent to sell more
than 750 lots to builders over the next three to five years, with deliveries
starting in the second quarter of 1997. Also, the company anticipates closing
sales on contracts for 24 acres of commercial property for $4.8 million in 1997.
In Vero Beach, Florida, the market was not as strong. Grand Harbor and
Oak Harbor completed the sale of 12 homes and 16 homes, respectively, in the
quarter. Although the sales in both communities were below management's
expectations, they significantly outperformed most similar communities in the
area.
The company has elected to sell the laguna Seca Ranch and the suburban
Seattle shopping center, to allow the company to focus on developing its core
assets.
Even though this first year of operation holds many challenges, we are
very optimistic about the future. We believe our core assets, experienced
management team and the strength of our majority shareholder will enable the
company to deliver above-average, long-term returns to all Legend shareholders.
The company maintains a three- to five-year perspective on operations, and
seeks investors who share this same long-term perspective.
[KEN UPTAIN PHOTO]
[SIGNATURE]
Ken Uptain, President
May 14, 1997
<PAGE> 16
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
Mar. 31, 1997 Dec. 31, 1996
- ---------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Real estate inventory $101,593,828 $103,762,798
Assets held for sale 25,451,424 25,436,375
Cash and cash equivalents 1,152,597 1,529,898
Restricted cash and investments 20,498,951 22,491,305
Accounts and notes receivable 1,771,431 1,893,838
Receivables from related parties 1,765,114 1,987,481
Property and equipment, net 21,778,851 19,860,865
Intangible assets, net 2,278,899 2,325,406
Other assets, net 4,929,052 4,822,163
- --------------------------------------------------------------------
Total assets $181,220,147 $184,110,129
====================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Notes payable to banks and others $ 84,353,269 $ 86,700,617
Payables to related parties 50,899,336 47,609,097
Accounts payable 5,081,969 5,655,401
Other notes and liabilities 11,527,822 12,662,828
Minority interests 505,289 492,910
Stockholders' equity:
Common stock, $.01 par value 62,776 62,776
Additional paid-in capital 43,772,331 43,793,708
Accumulated deficit (14,971,329) (12,855,892)
Treasury stock (11,316) (11,316)
Total stockholders's equity 28,852,462 30,989,276
- --------------------------------------------------------------------
Total liabilities &
stockholders' equity $181,220,147 $184,110,129
====================================================================
</TABLE>
CORPORATE MATTERS
The Lawsuits. In April 1997, Legend reached an agreement in principle
to resolve various lawsuits filed against the company, which sought, among
other things, to reverse the merger of RGI/US and Banyan. The settlement is
still subject to final court approval, which the company expects to receive in
June. As part of the agreement, RGI Holdings, Inc., which owns 79% of the
outstanding shares of Legend, has agreed to, among other things, defer interest
due on approximately $30.6 million in loans, forebear on any defaults existing
on the loans until December 31, 1997, reduce the interest rate on the loans
(approximately $1 million in savings in 1997) and provide Legend with an $8.5
million line of credit. The agreement also enables Legend to retain proceeds
from the proposed sale of the Lynnwood Center in suburban Seattle. Management
believes that this is good news for the company's shareholders, as the
settlement removes uncertainty surrounding the company's ability to refinance
its debt obligations and pursue its business plan, as well as significantly
improving cash flow during the balance of the year.
Results of operations for the quarter ended March 31, 1997. As
expected, the company recorded a net loss for the quarter ended March 31, 1997,
of $2.1 million (34 cents per share) on revenues of $14 million. 1997 will be
the first full year of operations for the company now known as Legend
Properties. Accounting rules require that results of operations presented for
periods occurring before the effective date of the merger (December 31, 1996),
be those of RGI/US only and are not to include the results of Banyan's
operations. Because of this, management believes that the results of operations
for 1996 presented herein are not indicative of the results of Legend
Properties after the merger, which include the results of operations of both
the RGI/US assets and the former Banyan assets as well as the cost of
establishing a corporate office in Seattle.
Similarly, the results of operations for the three months ended March
31, 1997, are not necessarily indicative of the results expected for the full
fiscal year. Due to the merger and the related lawsuits, Legend has incurred
and will continue to incur, at least through the end of the second quarter, a
significant amount of legal and transition costs associated with the merger.
During the quarter ended March 31, 1997, revenues of $14 million
primarily consisted of the operations of Grand Harbor, Oak Harbor and the
Lynnwood Center. Grand Harbor and Oak Harbor derive revenue from the
construction and sale of residential units; the operation of harbor and club
facilities; and the operation of the Royal Palm Convalescent Center, a skilled
nursing care facility owned by Oak Harbor. The Lynnwood Center derives revenue
from the short- and long-term rental of retail shopping space. Due to delays
incurred during the merger proceedings and by the lawsuits, Legend was unable
to start development and construction activities at the Southbridge and
Chapman's Landing properties
<PAGE> 17
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------------
for the three months ended Mar. 31, 1997 Mar. 31, 1996
- -----------------------------------------------------------------------------------
<S> <C> <C>
Revenues:
Real estate sales(1) $10,330,638 $ 6,361,048
Club operations 2,073,849 1,872,342
Patient service 673,924 633,716
Rent 631,026 618,803
Other 275,984 124,906
- -----------------------------------------------------------------------------------
Total revenues 13,985,421 9,610,815
- -----------------------------------------------------------------------------------
Costs and expenses:
Real estate(1) 7,723,662 4,731,122
Club operations 1,588,414 1,232,191
Patient service direct costs 356,235 325,781
Rental operations 99,413 91,721
Other 24,085 20,436
Selling, general and administrative(2) 3,820,163 1,836,096
Depreciation and amortization 418,798 392,308
---------------------------
Total costs and expenses 14,030,770 8,629,655
- -----------------------------------------------------------------------------------
Operating income (loss) (45,349) 981,160
- -----------------------------------------------------------------------------------
Other income (expense):
Interest income 473,840 119,392
Interest income, related party 36,068 36,569
Interest expense (1,639,517) (1,203,784)
Interest expense, related party(3) (1,118,268) (125,093)
Other, net 190,168 117,345
- -----------------------------------------------------------------------------------
Net other expense (2,057,709) (1,055,571)
- -----------------------------------------------------------------------------------
Loss before minority interests (2,103,058) (74,411)
Minority interests in losses (earnings)
of consolidated subsidiaries (12,379) 33,676
---------------------------
Net loss $(2,115,437) $ (40,735)
- -----------------------------------------------------------------------------------
Net loss per share $ (.34) $ (.01)
- -----------------------------------------------------------------------------------
Weighted average number of common
shares outstanding(4) 6,276,744 4,386,986
- -----------------------------------------------------------------------------------
</TABLE>
(1) Increase primarily due to sales of residences at Oak Harbor which began in
October 1996.
(2) Increase primarily due to additional corporate costs, the merger and
related lawsuits.
(3) Increase due to interest on indebtedness assumed at December 31, 1996 as
part of the merger.
(4) Increase due to additional shares issued on December 31, 1996 to effect
the merger.
- --------------------------------------------------------------------------------
as early as originally anticipated, and the company was unable to close on any
lot sales at these developments during the first quarter of 1997.
Expenses for the quarter ended March 31, 1997, include one-time
transition costs of $400,000 associated with the merger as well as legal costs
of $350,000 associated with the lawsuits. Management expects that costs
associated with the lawsuits will significantly decrease once the settlement is
approved, and would not expect to incur significant transition costs after the
second quarter of 1997.
Interest costs incurred for the three months ended March 31, 1997, were
$2.8 million, and management expects these costs to decrease once the Lynnwood
Center is sold and the settlement of the lawsuits is finalized. At March 31,
1997, the Lynnwood Center was encumbered by a $14.4 million mortgage note, and
is currently being offered for sale. Legend expects to sell it by December 31,
1997. The interest rate reductions resulting from the settlement of the
lawsuits should also reduce interest expense by approximately $250,000 per
quarter.
Management believes that Legend's shares are significantly undervalued
by the current market. The company intends to be aggressive in communicating
its strategies and performance to the financial marketplace in an effort to
achieve and sustain a fair market value for Legend shares. Additionally, in
April 1997, the company's board of directors authorized Legend to acquire up to
$300,000 of the company's common stock on the open market from time to time
over the next 12 months. On or about May 1, 1997, the company purchased 20,000
shares of Legend common stock for approximately $5.50 per share.
Legend's Majority Shareholder. Aker RGI is a $3 billion multi-national
investment company publicly traded on the Oslo (Norway) Exchange. In addition
to being Legend's majority shareholder (through holding companies), Aker RGI is
involved in cement and cement-related building materials, oil and gas
technology, seafood, shipbuilding, automated storage systems, sporting goods
and office supplies.
Mission Statement. Legend's mission is to generate an above average
return on shareholder investment by acquiring and developing US real estate
identified as being undervalued or of strategic value to Legend.
As noted previously, the first year of operations holds many challenges
for Legend, however management is very optimistic about the long-term potential
of the properties.
<PAGE> 18
DIRECTORS
WALTER E. AUCH, SR. -- Retired Chairman and Chief Executive Officer, Chicago
Board Options Exchange, Audit Committee Member
OLAV REVHAUG -- Director of Aker RGI
ROBERT M. UNGERLEIDER -- President, Pilot Books, Audit Committee Member
KENNETH L. UPTAIN -- President and Chief Executive Officer, Legend Properties,
Inc.
FRED E. WELKER, III -- President, Realty Financial Advisors, Inc., Audit
Committee Member
EXECUTIVE OFFICERS
KENNETH L. UPTAIN -- Director, President and Chief Executive Officer
RAYMOND J. WHITTY -- Chief Financial Officer, Treasurer and Secretary
CHRISTIAN J. POLLAK -- Vice President and Corporate Controller
CORPORATE INFORMATION
PRINCIPAL CORPORATE OFFICE -- Legend Properties, Inc.; U.S. Bank Centre, 1420
Fifth Avenue, 42nd Floor; Seattle, WA 98101; (206) 464-0123; (206) 464-0800 fax
STOCK EXCHANGE LISTING -- NASDAQ -- Small Cap Market; Symbol -- LPRO
STOCK TRANSFER AGENT -- Boston Equiserve; Boston, MA
CORPORATE COUNSEL -- Shefsky & Froelich, Chicago, IL
CERTIFIED PUBLIC ACCOUNTANTS -- KPMG Peat Marwick LLP
INVESTOR RELATIONS COUNSEL -- The Rockey Company, Seattle, WA
REGIONAL OFFICES
GRAND HARBOR -- 2121 Grand Harbor Boulevard; Vero Beach, FL 32967
OAK HARBOR -- 4755 South Harbor Drive; Vero Beach, FL 32967
LEGEND DEVELOPMENT COMPANY -- 13601 Office Place, Suite 201; Woodbridge, VA
22192
LEGEND DEVELOPMENT COMPANY -- 4-D Industrial Park Drive; Waldorf, MD 20602
Certain statements in this quarterly report that are not historical fact
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Without limiting the foregoing, words
such as "anticipates," "expects," "intends," "plans" and similar expressions
are intended to identify forward-looking statements. These statements are
subject to a number of risks and uncertainties. For a discussion of the factors
affecting the company's business plan, see the company's 1996 Annual Report on
Form 10-K -- management's discussion and analysis -- "factors affecting
Legend's business plan." Actual results could differ materially from those
projected in the forward-looking statements. The company undertakes no
obligation to update these forward-looking statements to reflect future
events or circumstances.
Copies of the Annual Report on Form 10-K or Quarterly Reports on Form 10-Q
filed with the Securities and Exchange Commission are available by contacting
the company. For more information please call Investor Relations at (206)
464-0123 or write to Legend Properties, Inc., U.S. Bank Centre, 1420 Fifth
Avenue, 42nd Floor, Seattle, WA 98101.
[LEGEND PROPERTIES, INC. LETTERHEAD]
<PAGE> 19
[LEGEND LOGO]
May 29, 1997
To the Holders of Shares of Common Stock of Legend Properties, Inc.
(formerly Banyan Mortgage Investment Fund):
On December 27th, 1996, at an Annual Meeting of Stockholders, the
stockholders of Banyan Mortgage Investment Fund (the "Company") authorized and
approved a merger of RGI U.S. Holdings, Inc. with and into Banyan, and
amendments to the Company's Certificate of Incorporation providing for a
one-for-twenty-five reverse stock split of shares of the Company's Common Stock
and for a change of the Company's name to "Legend Properties, Inc." As a result
of these actions, each outstanding twenty-five-shares of Common Stock of Banyan
Mortgage Investment Fund, par value of $.01 per share ("Old Common Shares"), has
been converted into and will be replaced by one share of Common Stock of Legend
Properties, Inc. par value of $.01 per share ("New Common Shares"). No
fractional New Common Shares were issued. Stockholders who would otherwise
receive fractional New Common Shares received payment of cash in lieu thereof (a
"Fractional Share Payment").
During January 1997, I sent a letter to all shareholders outlining the
procedures to follow to exchange Old Common Shares for New Common Shares. Some
of you still haven't done this yet. If you have already exchanged your shares,
please disregard this letter. If you haven't yet exchanged your shares, please
read on.
The company has entered into an agreement with the First National Bank of
Boston (the "Exchange Agent") whereby the Exchange Agent will exchange
certificates representing Old Common Shares ("Old Certificates") for
certificates representing New Common Shares ("New Certificates"). Only New
Common Shares are tradable. In order for you to have your New Common Shares in
tradable form, you must surrender your Old Certificates in exchange for New
Certificates. In addition, dividends, if any, which may be declared by the
Company will be withheld with respect to those Old Certificates which have not
been properly presented for exchange. Therefore, it is in your interest to
exchange your Old Certificates for New Certificates as promptly as possible.
Please complete the Letter of Transmittal previously sent and return it to
the Exchange Agent together with your Old Certificates by overnight courier or
registered mail with return receipt requested.
BY OVERNIGHT COURIER: BY REGISTERED MAIL:
The First National Bank of Boston The First National Bank of Boston
c/o Boston Equiserve c/o Boston Equiserve
150 Royall Street P.O. Box 1889
Mail Stop 45-02-53 Mail Stop 45-02-53
Canton, Massachusetts 02021 Boston, Massachusetts 02105
DO NOT ENCLOSE YOUR STOCK CERTIFICATES WITH YOUR PROXY VOTE, OR YOUR PROXY
VOTE WITH YOUR STOCK CERTIFICATES. THEY MUST EACH BE RETURNED SEPARATELY. The
New Certificates will be issued by the Exchange Agent upon presentation of the
Old Certificates for exchange as soon as practicable after receipt thereof by
the Exchange Agent.
If you have any questions or desire additional copies of the Letter of
Transmittal or other documents previously sent, you may call The First National
Bank of Boston at (800) 730-6001.
Legend Properties, Inc.
/s/ KENNETH L. UPTAIN
By: Kenneth L. Uptain
President and Chief Executive Officer
U.S. Bank Center, 1420 Fifth Avenue, 42nd Floor, Seattle, WA 98101-2333
Tel: (206) 464-0123, Fax (206) 464-0800
