<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. _____)
[ ] Filed by the Registrant
[x] Filed by a Party other than the Registrant
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
</TABLE>
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or section 240.14a-12
IDM PARTICIPATING INCOME COMPANY - II
(Name Of Registrant As Specified In Its Charter)
IDM PIC II INVESTORS COMMITTEE, RICHARD MEEHAN,
WESLEY GROOM, JACK STELLATO AND NEWPIC GP CORPORATION
(Name Of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check appropriate box):
[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 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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
CONSENT AND PROXY STATEMENT OF IDM PIC II INVESTORS COMMITTEE,
RICHARD MEEHAN, WESLEY GROOM, JACK STELLATO
AND NEWPIC GP CORPORATION
----------------
SOLICITATION OF CONSENTS AND PROXIES OF LIMITED PARTNERS OF
IDM PARTICIPATING INCOME COMPANY - II
TO EXPEL AND REMOVE THE CURRENT GENERAL PARTNER AND REPLACE
THE CURRENT GENERAL PARTNER WITH NEWPIC GP CORPORATION
----------------
THE CONSENT AND PROXY SOLICITATIONS ARE BEING MADE BY THE IDM PIC II
INVESTORS COMMITTEE, ITS MEMBERS AND NEWPIC GP CORPORATION, AND NOT BY THE
PARTNERSHIP OR THE CURRENT GENERAL PARTNER. CONSENTS AND PROXIES SHOULD BE
ADDRESSED AND DELIVERED TO IDM PIC II INVESTORS COMMITTEE, NOT TO THE
PARTNERSHIP.
This Consent and Proxy Statement, together with the enclosed form of
consent/proxy (Appendix A), are first being mailed or distributed to limited
partners of the Partnership on or about August 10, 2000. The consents and
proxies are solicited upon the terms and conditions of this Consent and Proxy
Statement and the accompanying form of consent/proxy.
----------------
To The Limited Partners of
IDM Participating Income Company - II:
This Consent and Proxy Statement is being furnished to the limited
partners of IDM Participating Income Company - II, a California limited
partnership (the "Partnership"), by the IDM Pic II Investors Committee, an
unincorporated association and the members thereof (Richard Meehan, Wesley
Groom, and Jack Stellato), and NewPic GP Corporation, a California corporation
("NewPic"). IDM Pic II Investors Committee and the members thereof are
hereinafter referred to collectively as the "Committee". The Committee and
NewPic are soliciting consents to expel and remove the Partnership's current
general partner, IDM Participating Income General Partners' Co.- II (the
"Current General Partner"), and to elect and admit the Committee's nominee,
NewPic (the "Committee's Nominee") as general partner to replace the Current
General Partner. The proposal for expulsion and removal of the Current General
Partner and its replacement by NewPic are referred to as the "Committee's
Proposals". The Committee and NewPic also furnish this Consent and Proxy
Statement to solicit proxies for a meeting of limited partners which may occur
if the Current General Partner or the requisite number of limited partners call
such a meeting to discuss or vote upon the Committee's
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Proposals after this Consent and Proxy Statement is mailed to limited partners,
and at any adjournment(s) or postponement(s) thereof (the "Special Meeting").
THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") HAS
NOT PASSED UPON THE ACCURACY AND ADEQUACY OF THE INFORMATION CONTAINED IN THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
HOW TO VOTE
REASONS TO VOTE. The Committee believes it is advisable to expel and
remove the Partnership's Current General Partner and replace it with the
Committee's Nominee, to try to revitalize the Partnership and steer it toward a
more successful future. The Committee is dissatisfied with the Partnership's
financial performance and the absence of recent distributions to limited
partners. See "BACKGROUND OF AND REASONS FOR THE SOLICITATION" below.
CONSENT SOLICITATION. The Committee is hereby soliciting the consent of
the Partnership's limited partners to expel and remove the Current General
Partner and to replace it with the Committee's Nominee, all without a meeting of
limited partners (the "Consent Solicitation"). If, after reading this Consent
and Proxy Statement, you want to join the Committee in its goal to try to
revitalize the Partnership and maximize limited partner value:
MARK THE ENCLOSED FORM OF CONSENT/PROXY TO INDICATE YOUR CONSENT TO
EXPEL AND REMOVE THE CURRENT GENERAL PARTNER AND YOUR CONSENT TO ELECT
AND ADMIT THE COMMITTEE'S NOMINEE TO REPLACE THE CURRENT GENERAL
PARTNER. SIGN, DATE, AND RETURN THE ENCLOSED FORM OF CONSENT/PROXY IN
THE ENCLOSED ENVELOPE (NO POSTAGE NECESSARY) AS SOON AS POSSIBLE.
For further information concerning the Consent Solicitation, see "CONSENT
SOLICITATION" and "CONSENT AND PROXY PROCEDURES" below.
PROXY SOLICITATION. The Committee also is hereby soliciting proxies (the
"Proxy Solicitation") for use at any meeting of partners which may be held to
discuss or vote upon the Committee's Proposals. The Committee believes the Proxy
Solicitation is advisable at this time in order to avoid the requirement of a
separate proxy solicitation if the Current General Partner or the requisite
number of limited partners calls a meeting to discuss or vote upon such matters.
See "PROXY SOLICITATION--Need for Simultaneous Proxy Solicitation" below. If you
want to join the Committee in its goal to try to revitalize the Partnership and
maximize limited partner value:
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MARK THE ENCLOSED FORM OF CONSENT/PROXY TO INDICATE YOUR VOTE FOR EACH
OF THE COMMITTEE'S PROPOSALS. SIGN, DATE, AND RETURN ENCLOSED FORM OF
CONSENT/PROXY IN THE ENCLOSED ENVELOPE (NO POSTAGE NECESSARY) AS SOON AS
POSSIBLE.
For more information on the Proxy Solicitation, see "PROXY SOLICITATION" and
"CONSENT AND PROXY PROCEDURES" below.
YOUR VOTE, BY THE FORM OF CONSENT/PROXY, IS IMPORTANT TO US NO MATTER
HOW MANY UNITS YOU OWN. If you have any questions or require any assistance with
this solicitation, please contact the Committee at: IDM Pic II Investors
Committee, P.O. Box 32272, Long Beach, California 90831-2272, Attn: Richard
Meehan; tel. (562) 590-1390.
BACKGROUND OF AND REASONS FOR THE SOLICITATION
BACKGROUND OF SOLICITATION
The information contained in this section is based on documents and
reports publicly filed by the Partnership with the Commission, including the
Partnership's Form 10-K. Although the Committee and NewPic have no information
that any statements contained in this section are untrue, they have not
independently investigated the accuracy of the statements, take no
responsibility for the accuracy, inaccuracy, completeness, or incompleteness of
any of the information contained in this section or for the failure by the
Partnership to disclose events that may have occurred and may affect the
significance or accuracy of any such information.
PARTNERSHIP HISTORY, STRUCTURE, AND STATUS. The Partnership was formed
in 1986 pursuant to an Agreement of Limited Partnership dated August 21, 1986
(the "Partnership Agreement") as a California limited partnership, to make
participating loans to affiliates of the Current General Partner and to other
parties. The Partnership has no directors or officers. The Current General
Partner is IDM Participating Income General Partners Co. II, a California
limited partnership. The Current General Partner has no officer or directors.
The general partner of the Current General Partner is IDM Participating Income
Corporation, a California corporation, which is a wholly owned subsidiary of IDM
Corporation, a California corporation. The executive officers and directors of
IDM Participating Income Corporation are: Morris S. Cohen (age 62), Director;
and William J. Carden (age 55), Director. The Committee also is informed and
believes that IDM Participating Income Corporation is currently controlled by
William J. Carden and Dawson Davenport, and was formerly controlled by William
J. Carden, Dawson Davenport, and Steven Speier. The Partnership has no
subsidiaries.
There is no ownership of Units by management and no person owns more
than 10% of the outstanding Units of the Partnership. There are no pending legal
proceedings to which the Partnership is a party or to which it or any of its
property is the subject. Except as otherwise described in this Consent and Proxy
Statement, neither the Committee nor NewPic knows of any
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arrangement, the operation of which may at a subsequent date result in a change
of control of the Partnership, or of any change of control that has occurred
since the Partnership's last fiscal year.
FORMATION OF THE COMMITTEE. Richard Meehan, Wesley Groom, and Jack
Stellato were dissatisfied with the financial performance of the Partnership and
did not believe the policies of the Current General Partner were directed
towards maximizing limited partner value (see "-- Reasons for Solicitation"
directly below). They decided to form the Committee, and with NewPic (which they
formed), to solicit the written consent of the Partnership's limited partners to
expel and remove the Current General Partner and to replace it with the
Committee's Nominee. See "THE COMMITTEE'S NOMINEE" below. As part of the
Committee's strategy to ensure the will of the limited partners can be effected
without unnecessary cost or delay even if a Special Meeting is called to discuss
or vote upon the Committee's Proposals, it has also decided to conduct the Proxy
Solicitation. See "PROXY SOLICITATION--Need for Simultaneous Proxy Solicitation"
below.
REASONS FOR SOLICITATION
The Committee seeks to expel and remove the Current General Partner
because it is dissatisfied with the Partnership's financial performance and the
absence of recent distributions to limited partners.
The Committee expects that a replacement general partner unaffiliated
with the Current General Partner but which is affiliated with some of the
limited partners will more vigorously look out for the interests of the limited
partners, and would have no reason not to aggressively investigate and then
pursue any meritorious claim for any previous wrongful acts or omissions related
to management of the Partnership that may be discovered during such
investigation. The Committee believes that removing the Current General Partner
and electing and admitting the Committee's Nominee as the general partner will
provide the limited partners with better potential to maximize the potential
cash returns to the limited partners in the future.
THE COMMITTEE
Richard Meehan, Wesley Groom, and Jack Stellato are sole members of the
IDM Pic II Investors Committee. The Committee is an unincorporated association
formed in 1998 by these three persons with a goal to protect and serve the
interests of the limited partners in the Partnership. It has met with limited
partners to share information, raise funds, hire legal counsel, and conduct an
investigation into the affairs of the Partnership, its Current General Partner,
and related activities of their principals and affiliates. Except as set forth
in this Consent and Proxy Statement, no member of the Committee holds or has
held any position or office with the Partnership or has any other interest in
respect of the Consent Solicitation.
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The Committee intends to solicit consents and proxies directly from
certain limited partners after the distribution of this Consent and Proxy
Statement. Except as set forth herein, the Committee will earn no profits,
commissions, or other fees from the Partnership or otherwise, if the limited
partners approve the Committee's proposals to (i) expel and remove the Current
General Partner and (ii) elect and admit the Committee's Nominee to replace the
Current General Partner. NewPic's officers and directors have not received and
do not intend to receive any salary, before or after the proposed expulsion and
removal of the Current General Partner, although they may be reimbursed for
out-of-pocket expenses. If NewPic is elected and admitted to replace the Current
General Partner, then NewPic will be entitled to the profits, losses, and
distributions which are provided for the general partner under the Partnership
Agreement (see Interest of NewPic as Replacement Successor General Partner in
Partnership).
The members of the Committee and their fellow NewPic Director William
Yetter (see table in "THE COMMITTEE'S NOMINEE" below) own an aggregate of
4,348.86 Units, or about 2.17% of the outstanding Units, as of the Consent
Record Date; each has caused to be executed on his behalf consents for the
Committee's proposals. NewPic owns no outstanding Units. The Partnership has no
other class of voting securities.
The following persons have contributed more than $500 to the Committee
to be used to further its goals and therefore may be considered "Participants"
in this solicitation: Virginia M. Carr ($727.00), Vincent Desciose, Jr.
($1,202.00), Wesley Groom ($2,633.00), Judith A. Hindes ($1,143.00), Durwood &
Mildred Knight ($500.00), Nancy Livacich Lamonk ($513.00), William J. McManus
($1,241.00), Richard and Patricia Meehan ($856.00), Richard D. Newcomer
($594.00), Russell and Noreen Patterson ($513.00), Donald and Marjorie Ring
($2,353.00), Betty J. Tanner ($1,044.00), Leonard and Martha Webster ($642.00),
Verne and Katherine Wuertz ($857.00). All such persons are limited partners of
the Partnership.
Additional information on each member of the Committee is set forth in
the table in "THE COMMITTEE'S NOMINEE" located in the next section.
THE COMMITTEE'S NOMINEE
The Committee's Nominee to replace the Current General Partner is NewPic
GP Corporation, a California corporation. NewPic was formed on October 27, 1999.
The members of the Committee hold a controlling interest in NewPic. At the
present time, NewPic does not actively engage in any business; it was formed for
the sole purpose of becoming the general partner of the Partnership. The initial
paid in capital of NewPic consisted of $1,000. The shareholders of NewPic are
Richard Meehan, Wesley Groom, Jack Stellato and William Yetter. Each shareholder
owns a 25% interest in NewPic, and each is also a director of NewPic. All are
limited partners of the Partnership. NewPic's involvement in this solicitation
relates to it being the proposed replacement general partner for the Current
General Partner.
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Except as set forth herein, the principals of NewPic will not receive
any compensation for services rendered to NewPic or the Partnership. At this
time, NewPic has been provided with free use of office space and facilities by
the World Trade Center, Long Beach, at Suite 198, One World Trade Center, Long
Beach, California 90831. NewPic's mailing address is P.O. Box 32272, Long Beach,
CA 90831-2272. Its telephone number is (562) 590-1390. This same address and
telephone number are shared by the Committee. The following table sets forth
certain information on NewPic's principals.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
LIMITED
PARTNERSHIP
NEWPIC UNITS
NAME BACKGROUND INFORMATION POSITION OWNED
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richard Meehan Age 65. For the last five years he has practiced President 1,000
21350 Hawthorne as a dentist specializing in endontics. Owns 5 Director
Blvd. #156, apartment buildings (76 units) and 1 commercial
Torrance, CA building (2 tenants). Investor in numerous IDM
90503 partnerships. Member of IDM Bankruptcy
Unsecured Creditors Committee. Active in
IDM/Meadowood Village investors group that
obtained favorable settlement for investors.
---------------------------------------------------------------------------------------------------------------
Wesley Groom Age 65. Retired since 1996. Prior to 1996 he Secretary 3,077.86
17 Palmera, was an insurance claims adjuster - 28 years with Director
Rancho Santa Allstate Insurance & 5 years with independent
Margarita, CA adjusting firm.
92688
---------------------------------------------------------------------------------------------------------------
Jack Stellato Age 72. For the last five years he has been a Treasurer 152.27
101 Quincy retired real estate investor. From 1954-1970 he Director
Avenue, Long was involved in buying, selling and managing
Beach, CA, 90803 real estate (single family homes, large apartment
buildings, office buildings). Purchased
numerous IDM investments from 1970-1991.
Former director of IDM Corp. 1980-1989.
---------------------------------------------------------------------------------------------------------------
William Yetter Age 73. During the last five years he has been Director 118.73
retired. Aerospace Research Engineer 1951-
1984. Investor in numerous real estate limited
partnerships. Licensed representative for IDM
Securities 1984-1993.
---------------------------------------------------------------------------------------------------------------
</TABLE>
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The Committee's Nominee has agreed to serve as a general partner of the
Partnership, if the limited partners elect and admit it through the Consent
Solicitation or the Proxy Solicitation. The Committee's Nominee, after being
elected and admitted as the general partner of the Partnership, will remain
general partner until terminated in accordance with applicable California law
and the Partnership Agreement.
INTEREST OF NEWPIC AS THE REPLACEMENT GENERAL PARTNER
Under Section 7.4 of the Partnership Agreement, cash from
interest income of the Partnership, to the extent deemed available by the
general partner for distribution, is to be distributed to the partners until
they have received a cumulative return of 12% per annum on their adjusted
capital interest and thereafter 15% to the general partner and 85% to the
partners. Under Section 7.5 of the Partnership Agreement, other distributions,
including participating profits, if any, are to be allocated first to the
partners until there is a cumulative return of 12% per annum on the partners'
adjusted capital interest, next among the partners in accordance with their
adjusted capital interest until they have received an amount which reduces the
aggregate capital interest of the partners to zero (return of 100% of their
capital contributions) and thereafter 85% to the partners and 15% to the general
partner. Under Section 6 of the Partnership Agreement, the Partnership is not
required to reimburse the general partner for any expenses incurred in
connection with the performance of services regarding the organization of the
Partnership and the offering of units or for the cost of goods, materials and
services furnished to the Partnership by the general partner or an affiliate.
Under Section 5.4 of the Partnership Agreement, the general partner or an
affiliate is entitled to receive a mortgage loan fee, property management fee,
real estate commission, reimbursement of expenses or other fees from borrowers
from the Partnership.
Accordingly, NewPic as the replacement general partner will: (i)
not be entitled to reimbursement of expenses for goods, materials or services
furnished to the Partnership; (ii) have the right to receive a mortgage loan
fee, property management fee, real estate commission, reimbursement of expenses
or other fees from borrowers to the Partnership; and (iii) be entitled to
receive the distributions and allocations that would otherwise be paid to a
general partner under the aforesaid provisions of the Partnership Agreement.
NewPic does not intend to collect any mortgage loan fees, property management
fee or real estate commission or other fees from any future borrowers to the
Partnership. Because members of the Committee own 75% of NewPic, the ability to
receive a reimbursement of expenses from borrowers and the distributions to
which a general partner is entitled, is an indirect benefit that they may obtain
through NewPic from the Partnership in the future. At this time, the Committee
is not able to estimate the value of these benefits. Given the current financial
condition of the Partnership, the Committee believes that it is unlikely that
distributions to the partners will exceed the level where distributions to the
general partner under Section 7.4 and 7.5 of the Partnership Agreement will
occur. Nothing herein, however, prohibits the Partnership from incurring
expenses for accounting and other costs to comply with the terms and provisions
of the Partnership Agreement.
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CONSENT SOLICITATION
Pursuant to Section 15637(i) of the California Corporations Code, any
partnership action that may be taken at a meeting of limited partners may be
taken without a meeting by written consent. For the reasons stated in
"BACKGROUND OF AND REASONS FOR THE SOLICITATION" and to effect a change in the
management of the Partnership at the earliest practicable time, the limited
partners are being asked to approve by written consent the following actions
(the "Proposals"), pursuant to the Partnership Agreement: (i) Expulsion and
Removal of the Current General Partner; and (ii) Election and Admission of
NewPic GP Corporation as General Partner. For information about the Committee's
Nominee, see "THE COMMITTEE'S NOMINEE" below. For information about the
proposals, see "COMMITTEE'S PROPOSALS" below. The Committee believes the
Committee's Proposals are in the interest of all limited partners, and it
strongly encourages all limited partners to approve the Proposals.
If the Committee receives any executed consent/proxy for which a limited
partner has (i) given no direction or (ii) given a direction for only one of the
proposals, then the Committee it will deem that consent to be a consent to each
proposal for which a contrary direction has not been given and will complete the
consent/proxy accordingly. Your execution of the consent/proxy shall give the
Committee the authority to act in accordance with the foregoing.
PROXY SOLICITATION
NEED FOR SIMULTANEOUS PROXY SOLICITATION
The Committee is conducting the Proxy Solicitation at the same time as
the Consent Solicitation, because it is uncertain whether the Current General
Partner or a requisite amount of limited partners will request a meeting to
discuss or vote on the Committee's Proposals and it wishes to avoid any delays
or additional costs which may be incurred in soliciting proxies for such
meeting. If a meeting is called, any action pursuant to the consents will be
delayed pending the outcome of the meeting. No Special Meeting has been called
and it is uncertain if one will be called. If the Special Meeting is not called,
action will be taken as authorized by the consents which are received.
PROXY REQUIREMENTS
Section 12.4A of the Partnership Agreement requires a verbatim statement
of any proposed resolution provided to limited partners. Section 12.4B thereof
provides that a limited partner shall be entitled to vote his partnership
percentage (of Units) at a meeting, in person or by written proxy. Section 12.4B
thereof further provides that (i) proxies may be solicited only in accordance
with the provisions of Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder, and (ii) applicable California law shall
govern the validity and use of proxies given by limited partners.
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COMMITTEE'S PROPOSALS
PROPOSAL 1 - EXPULSION AND REMOVAL OF CURRENT GENERAL PARTNER. For the
reasons set forth above under "BACKGROUND OF AND REASONS FOR THE SOLICITATION,"
the Committee proposes:
RESOLVED, that IDM PARTICIPATING GENERAL PARTNERS' CO. - II
shall be and hereby is expelled and removed as the general
partner of IDM Participating Income Company - II, effective
immediately.
PROPOSAL 2 - ELECTION AND ADMISSION OF NEWPIC GP CORPORATION AS GENERAL
PARTNER. For the reasons set forth above under "BACKGROUND OF AND REASONS FOR
THE SOLICITATION," the Committee proposes:
RESOLVED, that NewPic GP Corporation shall be and hereby is
elected and admitted as general partner of IDM Participating
Income Company - II, effective immediately, to replace IDM
Participating General Partners' Co. - II as general partner.
For information about the Committee's Nominee for general partner, see "THE
COMMITTEE'S NOMINEE."
THE COMMITTEE RECOMMENDS THAT YOU VOTE TO EXPEL AND REMOVE THE CURRENT
GENERAL PARTNER AND ELECT AND ADMIT THE COMMITTEE'S NOMINEE AS THE GENERAL
PARTNER. THE COMMITTEE MEMBERS HAVE VOTED ALL OF THEIR UNITS FOR THE COMMITTEE'S
PROPOSALS. UNITS REPRESENTED BY PROXIES GRANTED TO THE COMMITTEE MEMBERS WILL BE
VOTED FOR THE COMMITTEE'S PROPOSALS, UNLESS THE LIMITED PARTNER SIGNING THAT
CONSENT/PROXY SPECIFICALLY WITHHOLDS AUTHORITY TO VOTE IN THE MANNER DESCRIBED
ON THE ENCLOSED FORM OF CONSENT/PROXY.
CONSENT AND PROXY PROCEDURES
No matter how many units you own, we urge you to help to expel and
remove the Current General Partner and to elect and admit the Committee's
Nominee, by following these instructions for both the Consent Solicitation and
the Proxy Solicitation.
CONSENT SOLICITATION
Please complete, sign, date, and return the enclosed form of
consent/proxy in the enclosed envelope (no postage necessary) to the Committee
as soon as possible.
You may consent to, withhold consent from, or abstain from voting on the
Committee's proposal to expel and remove the Current General Partner, by marking
the appropriate box on the enclosed form of consent/proxy. If no marking at all
is made or a marking is made for only one
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of the proposals for which the Committee is seeking your consent, then you will
be deemed to have CONSENTED TO each proposal for which a contrary indication has
not been marked. THE COMMITTEE RECOMMENDS THAT YOU CONSENT TO THE REMOVAL OF THE
CURRENT GENERAL PARTNER.
You may consent to the admission of Committee's Nominee as general
partner, withhold consent to the Committee's Nominee, or abstain from voting
thereon, by marking the appropriate box on the enclosed form of consent/proxy.
If no marking at all is made or a marking is made with respect to only one of
the proposals for which the Committee is seeking your consent, you will be
deemed to have CONSENTED TO each proposal for which a contrary indication has
not been marked. THE COMMITTEE RECOMMENDS THAT YOU CONSENT TO THE ELECTION AND
ADMISSION OF COMMITTEE'S NOMINEE AS GENERAL PARTNER OF THE PARTNERSHIP.
PROXY SOLICITATION
PLEASE COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED FORM OF
CONSENT/PROXY IN THE ENCLOSED ENVELOPE (NO POSTAGE NECESSARY) TO THE COMMITTEE
AS SOON AS POSSIBLE. You may vote for, against, or refrain from voting on the
Committee's proposal to expel and remove the Current General Partner, by marking
the appropriate box on the enclosed form of consent/proxy. If no marking at all
is made or a marking is made for only one of the proposals for which the
Committee is seeking your vote, then you will be deemed to have voted FOR each
proposal for which a contrary indication has not been marked. THE COMMITTEE
RECOMMENDS THAT YOU VOTE FOR THE EXPULSION AND REMOVAL OF THE CURRENT GENERAL
PARTNER.
You may vote for, against, or refrain from voting on the Committee's
proposal to elect and admit the Committee's Nominee as general partner, withhold
approval for election and admission of the Committee's Nominee, or abstain from
voting thereon, by marking the appropriate box on the enclosed form of
consent/proxy. If no marking at all is made or a marking is made with respect to
only one of the proposals for which the Committee is seeking your consent, you
will be deemed to have voted FOR each proposal for which a contrary indication
has not been marked. THE COMMITTEE RECOMMENDS THAT YOU ELECT AND ADMIT THE
COMMITTEE'S NOMINEE AS GENERAL PARTNER OF THE PARTNERSHIP.
Neither the Committee nor NewPic is aware of any matters than might be
presented at a Special Meeting, other than the matters set forth herein. Should
any other matters properly requiring a vote of limited partners arise, the
consent/proxy in the accompanying form will confer upon the person(s) entitled
to vote discretionary authority to vote the Units in accordance with his best
judgment in the interest of the Partnership and its limited partners.
RECORD DATES
CONSENT SOLICITATION. No record date has been fixed in advance for the
Consent Solicitation. Where no record date is fixed for a meeting or vote,
California Corporations Code ss. 15637(k)(2) provides that the record date for
determining partners entitled to give consent to
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partnership action in writing without a meeting shall be the day on which the
first written consent is given. To set a record date for the Consent
Solicitation, on August 10, 2000, Richard Meehan, a member of the Committee
holding 1000 limited partnership units, delivered an executed consent to the
Committee. Accordingly, limited partners of record as of the close of business
on August 10, 2000 (the "Consent Record Date") are entitled, and urged by the
Committee, to express their consent to the proposed actions by marking, dating,
and signing the enclosed form of consent/proxy and returning it to the
Committee, AS SOON AS POSSIBLE.
PROXY SOLICITATION. The Committee also is soliciting your proxy for use
at the Special Meeting if one is called to discuss or vote upon the Committee's
Proposals. If the Current General Partner or the requisite number of limited
partners calls a Special Meeting, they have a right to fix, in advance, a record
date (the "Proxy Record Date") for determining the limited partners entitled to
receive notice of, and to vote at, that Special Meeting. In the event they do
not fix a record date in advance, then under California Corporations Code
Section 15637(k)(2) the record date for determining partners entitled to notice
of or to vote at a meeting of partners shall be at the close of business on the
business day next preceding the day on which notice is given. No Special Meeting
has been called as of this date. In the event the Special Meeting is called
limited partners will receive a notice from the person(s) calling the meeting
with the date, place and time of the Special Meeting and a record date if one
has been fixed in advance. You can grant to the Committee your consent/proxy for
use at the Special Meeting by marking, signing, and dating the enclosed form of
consent/proxy and returning it to the Committee. If you are a limited partner of
record on the Proxy Record Date and have not subsequently revoked your proxy,
then your Units will be voted as directed by you on the form of consent/proxy
(or, if no direction is indicated thereon, for the Committee's proposals).
CHANGE IN LIMITED PARTNER STATUS. You will be able to express your
consent to the Committee's proposals, if you are a limited partner of record on
the Consent Record Date but not on the Proxy Record Date, even if you sell your
Units and cease to be a limited partner after the Consent Record Date.
Similarly, if you are a limited partner of record on the Proxy Record Date, but
were not on the Consent Record Date, you will have voting rights for a Special
Meeting, even if you sell your Units and cease to be a limited partner after the
Proxy Record Date. Even if you are not sure as to your eligibility to execute a
consent and/or to vote at the Special Meeting, we urge you to complete and
return the enclosed form of consent/proxy so that your Units will be voted if
eligible.
VOTES REQUIRED
MAJORITY VOTE. Under Section 12.2 of the Partnership Agreement, a
"Majority Vote" of the limited partners (not assignees of Units) is required to
expel or remove a General Partner or to admit a new General Partner after such
expulsion or removal. The term "Majority Vote" as used therein and herein means
the vote of limited partners who own more than fifty percent (50%) of the total
outstanding Units. The Partnership's Annual Report on Form 10-K for the year
ended December 31, 1999 (the "Form 10-K") discloses that as of December 31, 1999
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200,000 Units are outstanding (held by 1,645 holders of record). Each Unit
outstanding on the Consent Record Date is entitled to one vote on the
Committee's proposals set forth in this Consent and Proxy Statement in respect
of the Consent Solicitation. Approval of the Committee's consent proposals
therefore will require the delivery of written consents in favor thereof by
holders of more than 100,000 Units. Abstentions will have the effect of
withholding consent from those proposals.
CONSENT SOLICITATION. Unless delayed by the calling of a meeting of
partners to discuss or vote upon the Committee's Proposals, Section 15637(i) of
the California Corporations Code provides that actions approved by written
consent will be effective 15 days after duly executed consents in favor thereof
are received from the holders representing a Majority Vote on the Consent Record
Date. See "CONSENT SOLICITATION--Consent Required" below.
Under Section 15637(i) of the California Corporations Code, the Current
General Partner (or limited partners holding more than 10 percent of the Units)
may request the Special Meeting to discuss or vote upon the Committee's
proposals after the date of this Consent and Proxy Statement and before any
consent action becomes effective. In the event such meeting is requested, no
action upon the consents will be taken until the meeting is held. The Committee
intends to use the proxies solicited hereby to vote at such meeting. For voting
requirements at the Special Meeting see "Votes Required-Proxy solicitation",
below.
PROXY SOLICITATION. The presence at the Special Meeting, in person or by
proxy, of the holders of a majority of the outstanding Units entitled to vote
will constitute a quorum at a meeting of partners. Abstentions and broker
non-votes (i.e., Units held by a broker or nominee represented at the Special
Meeting, but for which that broker or nominee is not empowered to vote on a
particular proposal) are counted as present to determine if a quorum is present.
According to information provided in the Partnership's Form 10-K, there were
200,000 Units outstanding on December 31, 1999 unless there is a change in the
number of Units after December 31, 1999, it is anticipated that 200,000 Units
will be outstanding on the Proxy Record Date.
Subject to the existence of a quorum, a Majority Vote, in person or by
proxy, at the Special Meeting will be required to approve (i) the removal of the
Current General Partner and (ii) the admission of the Committee's Nominee as the
Partnership's general partner. Each Unit outstanding on the Proxy Record Date is
entitled to one vote on the Committee's proposals set forth in this Consent and
Proxy Statement in respect of the Proxy Solicitation. Abstentions will have the
effect of votes in opposition to those proposals. Broker non-votes will be
treated as unvoted for determining approval of those proposals; they will not be
counted as votes for or against those proposals, but will have the effect of
votes in opposition to them.
For further information about the Committee's proposals at the Special
Meeting, if one is called, see "PROXY SOLICITATION" below.
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REVOCATION
CONSENT SOLICITATION. A consent executed and delivered by a limited
partner may subsequently be revoked by written notice thereof delivered to (i)
the Partnership, at 7700 Irvine Center Drive, Suite 408, Irvine, CA 92618, or
any other address provided by the Partnership, or (ii) the Committee, at P.O.
Box 32272. Long Beach, CA 90831. To be effective, that notice of revocation must
be delivered before the time that consents to the Committee's proposals executed
by the holders representing a Majority Vote have been received by the Committee.
The Committee requests that, if a consent revocation is delivered to the
Partnership, a copy of that revocation also be delivered to the Committee. A
later dated form of proxy will not revoke an earlier dated form of consent.
PROXY SOLICITATION. The proxy contained in the enclosed form of proxy of
the Committee may be revoked at any time before it is exercised by voting in
person at the Special Meeting, by filing with the Partnership a written notice
of revocation before the voting of such proxy, or by submitting a later-dated
proxy at any time before the vote is taken at the Special Meeting. You may also
revoke any proxy you have previously given to the Current General Partner by
signing and dating the enclosed form of proxy and returning it as indicated
herein. The Committee requests that, if a revocation of the enclosed form of
proxy is delivered to the Partnership, a copy of that revocation also be
delivered to the Committee. A later dated form of consent will not revoke an
earlier dated form of proxy. Unless revoked earlier, the proxy shall terminate
automatically one year from its date.
SOLICITATION; EXPENSES
The accompanying consent and proxy in the forms enclosed herewith are
being solicited by and for the Committee. The solicitation of consents and
proxies will be made principally by mail, and also may be made by the members of
the Committee personally or by telephone, without compensation. No specially
engaged employees or persons will be employed to solicit consents or proxies.
Brokers, nominees, and fiduciaries will be reimbursed by the Committee
for their out-of-pocket and clerical expenses in transmitting proxies and
related materials to beneficial owners. The entire cost of soliciting consents
and proxies in connection herewith, including fees for attorneys, copying and
mailing, estimated by the Committee to be approximately $ 15,700 (excluding the
costs of potential litigation), will be borne by the Committee and NewPic in
amounts determined by them.
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RELATED MATTERS
EXPECTATIONS AFTER REMOVAL AND REPLACEMENT
FINANCIAL INFORMATION TO LIMITED PARTNERS. Section 11.5 of the
Partnership Agreement provides: "Within 90 days after the Limited Partners have
voted to remove a General Partner, the General Partner shall have prepared, at
Partnership expense, a financial statement (balance sheet, statement of income
or loss, Partners' equity and changes in financial position) prepared in
accordance with generally accepted accounting principles and accompanied by a
report thereon containing an opinion of an independent certified accounting firm
of recognized standing and shall cause such statement to be mailed to the
Limited Partners as soon as possible after receipt thereof." Given those
requirements in Section 11.5, the Committee anticipates that financial
information will be supplied to limited partners when and as prescribed in
Section 11.5.
EXPULSION AND REMOVAL OF CURRENT GENERAL PARTNER. If the limited
partners approve the Committee's proposals, by consent or by proxy, and the
Current General Partner is expelled and removed thereby, then Section 13.2 of
the Partnership Agreement requires written notice of the removal or expulsion of
the general partner to be served upon it by certified or registered mail, return
receipt requested, or by personal service. That notice must set forth the
effective date of the removal or expulsion. If the Current General Partner is
expelled and removed, it would not retain and rights, powers, or authority
accruing to the general partner of the Partnership.
PAYMENTS TO THE CURRENT GENERAL PARTNER. Section 13.3 of the Partnership
Agreement requires as a condition to the effectiveness of its removal, the
Partnership must make certain payments for the Current General Partner's
interest in the Partnership in the manner and for an amount determined as
provided therein. The removed general partner or its affiliates are entitled to
receive in cash, reimbursement of expenses, and repayment of any loans the
removed general partner or its affiliates made to the Partnership, which are
then due and payable. The Partnership is also required to pay the removed
general partner cash for the fair market value of that general partner's
interest in Distributions, Net Income, or Net Losses, Tax Credits, and Other
Items of the Partnership (as those terms are defined in the Partnership
Agreement), as of the date of the expulsion or removal. Instead of making that
cash payment, the Partnership may at its option give the removed general partner
its promissory note, with interest at 1% above the then current prime rate set
by the Federal Reserve Bank of San Francisco (not exceeding the maximum legal
rate). That note will be due and payable on a date five years from the effective
date of the removal, and it shall call for monthly payments required to amortize
the note over its term. If the Partnership and removed general partner cannot
agree on the fair market value of the removed general partner's interests, then,
at the request of the then General Partner, the matter shall be arbitrated under
the then current rules of the American Arbitration Association, with the
Partnership and the removed General Partners each bearing half the expenses
thereof.
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Based on Section 13.3 terms of payment, the Committee believes the
amount of the Partnership's payment to the Current General Partner, upon its
expulsion and removal, should be about $17,000. No formal analysis by
accountants or other financial advisors has been prepared to estimate this
payment. No assurance can be given with respect to the amount of payment that
may be required. If no agreement is reached regarding the payment amount, the
Partnership and the Current General Partner may be required to litigate or
arbitrate such dispute.
ADMISSION OF COMMITTEE'S NOMINEE. If the Committee receives the required
consents, it promptly will complete the necessary requirements for NewPic to
become the general partner, as provided in the Partnership Agreement and
applicable California law. NewPic will agree to be bound by the provisions of
the Partnership Agreement. An amendment to the Certificate of Limited
Partnership will be filed with the California Secretary of State, to reflect the
admission of NewPic as general partner of the Partnership and the removal of the
Current General Partners.
NO APPRAISAL RIGHTS
There are no appraisal or other similar rights available to limited
partners under the Limited Partnership Agreement or applicable California law in
connection with the solicitations of consent and proxies for the Committee's
proposals set forth herein.
ADDITIONAL INSTRUCTIONS
YOUR VOTE IS IMPORTANT. PLEASE INDICATE YOUR SUPPORT FOR EACH OF THE
COMMITTEE'S PROPOSALS BY MARKING, SIGNING, AND DATING THE ENCLOSED FORM OF
CONSENT/PROXY AND RETURNING IT IN THE DESIGNATED ENCLOSED ENVELOPE (NO POSTAGE
NECESSARY) AS SOON AS POSSIBLE.
If any of your Units are held in the name of a brokerage firm, bank,
bank nominee, or other institution, then only it may vote those Units and only
upon receipt of your specific instructions. Accordingly, please contact the
person responsible for your account as soon as possible and instruct that person
to indicate a vote FOR each of the Committee's proposals and promptly to mark,
sign, date, and return the enclosed form of consent/proxy to the Committee.
Deliveries of the consent/proxy properly completed and duly executed,
should be made to the Committee at the address set forth below. Questions and
requests for assistance about procedures for consenting or other matters
relating to this solicitation may be directed to the Committee at the address
and telephone number listed below. Additional copies of this Consent and Proxy
Statement and forms of consent/proxy may be obtained from the Committee as set
forth below.
No person is authorized to give any information or to make any
representation not contained in this Consent and Proxy Statement regarding the
solicitation of consent and proxies made hereby, and, if given or made, any such
information or representation should not be relied
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upon as having been authorized by the Committee or NewPic or any other person.
The delivery of this Consent and Proxy Statement shall not, under any
circumstances, create any implication that there has been no change in the
information set forth herein or in the affairs of NewPic or the Partnership
since the date hereof.
THE IDM PIC II INVESTORS COMMITTEE,
RICHARD MEEHAN, WESLEY GROOM, JACK STELLATO
& NEWPIC GP CORPORATION
P.O. BOX 32272. LONG BEACH, CA 90831
ATTN: RICHARD MEEHAN; TEL. (562) 590-1390
August 10, 2000.
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Appendix A
(Form of Consent/Proxy)
IDM Participating Income Company - II,
a California Limited Partnership
CONSENT/PROXY OF LIMITED PARTNER
THIS COMBINED CONSENT AND PROXY (THE "CONSENT/PROXY") IS SOLICITED BY
THE IDM PIC II INVESTORS COMMITTEE, RICHARD MEEHAN, WESLEY GROOM, JACK STELLATO
AND NEWPIC GP CORPORATION.
Unless otherwise indicated below, the undersigned, a limited partner of
record of IDM Participating Income Company - II, a California limited
partnership (the "Partnership"), with respect to all limited partnership (the
"Units") of the Partnership held by the undersigned, hereby consents pursuant to
Section 15367(i) of the California Corporations Code to the taking of each of
the following actions without a meeting, without prior notice, and without a
vote and hereby appoints the three members of the IDM Pic II Investors
Committee, Richard Meehan, Wesley Groom, and Jack Stellato, and any of them, as
proxies of the undersigned, with full power of substitution, to vote the Units,
as specified herein, at a Special Meeting of limited partners which may be
called to discuss or vote upon the removal or expulsion of the Current General
Partner or the replacement thereof or other matters relating thereto and any
adjournment(s) or postponement(s) of that Special Meeting.
THE COMMITTEE RECOMMENDS THAT YOU CONSENT TO EACH OF THE FOLLOWING
PROPOSALS. EACH PROPOSAL REQUIRES THE APPROVAL BY A MAJORITY VOTE. [THIS FORM OF
CONSENT IS CONTINUED ON THE REVERSE SIDE.] PLEASE MARK, SIGN, AND DATE THIS FORM
OF CONSENT/PROXY BEFORE RETURNING THIS FORM OF CONSENT/PROXY IN THE ENCLOSED
ENVELOPE.
Proposal 1. Expulsion and Removal of the Current General Partner.
RESOLVED, that IDM PARTICIPATING GENERAL PARTNERS' CO. - II shall be and
hereby is expelled and removed as the general partner of IDM
Participating Income Company - II, effective immediately.
[ ] CONSENTS TO [ ] CONSENT AND [ ] ABSTAIN
AND VOTES FOR VOTE WITHHELD
Proposal 2. Election and Admission of NewPic GP Corporation as General Partner.
RESOLVED, that NewPic GP Corporation shall be and hereby is elected and
admitted as general partner of IDM Participating Income Company - II,
effectively immediately, to replace IDM Participating General Partners'
Co. - II as general partner.
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[ ] CONSENTS TO [ ] CONSENT AND [ ] ABSTAIN
AND VOTES FOR VOTE WITHHELD
Instruction: To consent and vote or withhold your consent and vote or abstain to
the expulsion and removal of the current General Partner and the election and
admission of the above-named person as general partner, then check the
appropriate boxes above. If you wish to consent to and vote for the expulsion
and removal of the current General Partner and the election and admission of
NewPic GP Corporation as General Partner of the Partnership, check the "Consents
To and Votes For" boxes above. IF YOU DO NOT MARK A BOX ABOVE FOR ANY PROPOSAL,
THEN YOU WILL BE DEEMED TO HAVE CONSENTED TO AND VOTED FOR THAT PROPOSAL.
You may revoke this consent or proxy at any time. Unless revoked
earlier, the proxy granted hereunder shall terminate automatically on one year
from its date.
If any matters other than as set forth above properly requiring a vote
of limited partners at a meeting arise, this consent/proxy confers upon the
person(s) entitled to vote discretionary authority to vote the Units in
accordance with his best judgment in the interest of the Partnership and its
limited partners.
The invalidity, illegality, or unenforceability of any particular
provision of this Consent/Proxy shall be construed in all respects as if such
invalid, illegal, or unenforceable provision were omitted without affecting the
validity, legality, or enforceability of the remaining provisions thereof.
Please sign exactly as name appears on unit certificates or on label affixed
hereto. When Units are registered in more than one name, all those persons
should sign. When signing as attorney, executor, administrator, trustee,
guardian, corporate officer, partner, etc., sign in official capacity, giving
full title as such. If a corporation, please sign in the full corporate name by
president or other authorized officer. If a partnership, please sign in the
partnership name by authorized person.
Dated: , 2000.
-------------------------
(Important: - please fill in)
------------------------------------- -----------------------------------
(Signature) (Signature, if held jointly)
------------------------------------- -----------------------------------
(Print Name) (Print Name, if held jointly)
-------------------------------------
(Title or authority, if applicable)
-------------------------------------
Telephone Number
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FOR YOUR CONSENT/PROXY TO BE VALID, YOU MUST DATE IT. PLEASE SIGN, DATE, AND
MAIL YOUR CONSENT/PROXY PROMPTLY IN THE POSTAGE-PAID ENVELOPE ENCLOSED. FAILURE
TO EXECUTE A CONSENT WILL HAVE THE SAME EFFECT AS WITHHOLDING A CONSENT. You may
direct questions and requests for assistance about procedures for consenting or
other matters relating to this consent/proxy solicitation to the Committee at
the address and telephone number listed below. You may obtain additional copies
of the Consent and Proxy Statement and this consent/proxy from the Committee, as
set forth below.
THE IDM PIC II INVESTORS COMMITTEE
RICHARD MEEHAN, WESLEY GROOM, JACK STELLATO, & NEWPIC GP CORPORATION
P.O. BOX 32272. LONG BEACH, CA 90831
ATTN: RICHARD MEEHAN; TEL. (562) 590-1390
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