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:
_x_ Preliminary proxy statement
___ Definitive proxy statement
___ Definitive additional materials
___ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Metric Income Trust Series, Inc.
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(Name of Registrant as Specified in Its Charter)
Herman H. Howerton, Esq.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
___ No fee required.
_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:
common stock
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(2) Aggregate number of securities to which transaction applies:
6,321,641
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:*
$0.60, based on an estimate of per share value
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(4) Proposed maximum aggregate value of transaction:
$3,792,984.60
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(5) Total Fee Paid:
$758.61
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___ 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 sta tement 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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METRIC INCOME TRUST SERIES, INC.
NOTICE TO SHAREHOLDERS OF ANNUAL MEETING
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of Metric
Income Trust Series, Inc. ("MITS" or the "Fund") will be held on Wednesday, June
17, 1998 at 10:00 a.m., local time, at the Park Hyatt Hotel, 333 Battery Street,
San Francisco, California 94111, to consider and vote on the following matters:
1. Approval of the Fund's Plan of Liquidation and Dissolution;
2. Approval of the Amendment to the Fund's Bylaws to eliminate
the requirement that the Fund deliver audited annual financial
statements and unaudited quarterly financial statements to its
Shareholders.
3. Election of Directors for the ensuing year; and
4. Such other business as may properly come before the meeting.
In addition, management will report on the business and financial
condition of MITS.
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Only Shareholders of record at the close of business on April 23, 1998
will be entitled to vote at the meeting, and those Shareholders are cordially
invited to attend the meeting in person. Whether or not you plan to be present,
please complete, date, and sign the enclosed proxy card and return it in the
postage paid envelope provided.
Your proxy may be required in order for there to be a quorum (a
majority of MITS' outstanding shares as of April 23, 1998) for the transaction
of business at the meeting. You may revoke your proxy at any time before it is
voted by filing with MITS a written revocation or a duly executed proxy bearing
a later date. If you are present at the meeting and elect to vote in person,
your proxy will not be used.
On another matter, the Fund hereby advises Shareholders that, due to
the reduction in the lease and interest income resulting from sale of the Fund's
assets, the Fund's expenses for 1998 are projected to exceed the limitations set
forth in the original offering Prospectus, dated June 30, 1989 (the
"Prospectus"), and in the Amended and Restated Bylaws of the Corporation, dated
August 3, 1989 (the "Bylaws"). The terms of both the Prospectus and Bylaws
require that, if in any year the total operating expenses of the Fund exceed the
greater of (a) 2 percent of the average invested assets for that year or (b) 25
percent of the net income for that year, the Independent Directors must conclude
that the level of expenses is justified if the Advisor is to be fully
reimbursed. The Bylaws also require that a written disclosure be made to
Shareholders that these limitations have been exceeded and as to the factors
considered by the Independence Directors in reaching their conclusion.
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At the February 26, 1998 meeting of the Board of Directors, the
Independent Directors unanimously agreed that the projected level of expenses
for 1998 was justified. This finding was based upon the fact that the Fund's
expenses have not declined proportionately with the reduction in the Fund's
assets and income. The Independent Directors authorized the Advisor to be fully
reimbursed for the 1998 expenses provided no category of expense incurred in
1998 is more than 10 percent in excess of the projections reviewed by such
Directors.
BY ORDER OF THE BOARD OF
DIRECTORS OF METRIC INCOME
TRUST SERIES, INC.
By:
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Herman H. Howerton,
Secretary
Dated: April 30, 1998
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PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
THE ENCLOSED PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS OF METRIC
INCOME TRUST SERIES, INC. ("MITS" or the "Fund") with its principal executive
offices located at One California Street, San Francisco, California 94111, for
use at the Annual Meeting of MITS' Shareholders to be held on June 17, 1998, and
at any continuation or adjournment thereof (the "Annual Meeting") for the
purposes set forth herein.
Solicitation
MITS will first mail this Proxy Statement and accompanying proxy on or
about [April 30, 1998] to all Shareholders entitled to vote at the Annual
Meeting. It is contemplated that proxies will be solicited principally through
the mail, but Directors and officers of MITS or regular employees of the Advisor
to MITS, SSR Realty Advisors, Inc. (the "Advisory Company", "Advisor" or "SSR")
or its affiliates, may, without additional compensation, solicit Proxies,
personally or by telephone, telegraph, or letter. MITS may request banks,
brokerage houses, and other institutions, nominees, or fiduciaries holding MITS
Shares in their name to forward the solicitation materials to the beneficial
owners thereof. MITS will bear the entire cost of proxy solicitation, including
reimbursement of the reasonable expenses incurred by brokerage firms and others
representing beneficial owners of shares in so forwarding those materials.
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Voting Rights and Outstanding Shares
Only holders of the Fund's common stock (the "Shareholders") who are
holders of record at the close of business on April 23, 1998 (the "Record Date")
will be entitled to receive notice of and to vote at the Annual Meeting. At the
close of business on the Record Date there were outstanding and entitled to vote
6,321,641 shares of MITS common stock (collectively, the "Shares"). Each
outstanding Share is entitled to one vote for each matter to be voted upon at
the Annual Meeting, except that in the election of Directors, each Shareholder
has cumulative voting rights and, if any Shareholder has given notice at the
meeting prior to voting of the Shareholder's intention to cumulate the
Shareholder's votes, is entitled to as many votes as equal the number of Shares
held multiplied by the number of Directors to be elected (five), which votes may
be cast for a single candidate or distributed among two or more candidates as
the Shareholder thinks fit. See "Nomination and Election of Directors". Voting
on the approval of the Plan of Liquidation and Dissolution, and on any other
matters which may be submitted at this meeting, will be on a noncumulative
basis.
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Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power
to revoke it at any time before it is voted by filing with MITS, at its
principal executive offices, written notice of revocation or a duly executed
proxy bearing a later date, or by attending the Annual Meeting and voting in
person.
GENERAL INFORMATION
Security Ownership of Certain Beneficial Owners and Management
As of April 23, 1998, the percentage of the outstanding Shares of
common stock of MITS beneficially owned by any Shareholder was less than five
percent. As of such date, the only Director, nominee for Director or officer of
MITS who beneficially owned any Shares of MITS was William F. Garlock, a
Director, who owned 3,127.7642 Shares (which amount is less than one percent of
the outstanding Shares of MITS). An affiliate of the Advisory Company owns
21,506 Shares of MITS, which amount is less than one percent of the outstanding
Shares of MITS. The members of the Board of Directors of the Advisory Company
are: Thomas P. Lydon, Jr., Gerard P. Maus and Ralph F. Verni. The last two named
individuals are also officers of State Street Research & Management Company
("State Street Research"), a subsidiary of Metropolitan Life Insurance Company
("Metropolitan Life").
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Board Meetings and Committees
The Board of Directors held five meetings during 1997. No Director
attended less than 75 percent of the aggregate of meetings of Directors held
during 1997. MITS has no standing Nominating, Audit or Compensation Committees.
Compensation
Directors and officers of MITS who are employed by the Advisory Company
or its affiliates received no compensation from MITS during 1997. Because all of
the officers of MITS are employed by the Advisory Company, none of the officers
received any compensation from MITS. The aggregate remuneration paid for
services during 1997 to all Independent Directors (as defined below) as a group
was $37,795, including reimbursement of expenses incurred in attending meetings
and conducting the business of MITS. No Director received from MITS aggregate
remuneration for services during 1997 in excess of $60,000, including
reimbursement for expenses incurred in attending meetings and conducting the
business of MITS. Those Directors who are neither officers of MITS nor of the
Advisory Company nor its affiliates (the "Independent Directors") received an
annual fee of $9,000 plus $500 for each meeting of the Board attended in person
and $100 for each meeting attended by telephone conference call. The Board has
adopted a resolution approving the reduction in the annual fee to $5,000 per
year, effective July 1, 1998. All Directors are entitled to reimbursement of
expenses incurred in attending meetings and carrying on the business of MITS.
For 1997, only Mr. Moeckel (see "Proposal One - Nomination and Election of
Directors - General" below) received reimbursement of expenses of $4,995.
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The Advisory Company is compensated for its services as Advisor
pursuant to an Advisory Agreement originally between the Fund and Metric Realty.
On March 27, 1997, the Advisory Agreement was assigned by Metric Realty to, and
the obligations thereunder were assumed by, SSR Realty Advisors, Inc., an
affiliate of Metric Realty. This Assignment and Assumption was unanimously
approved by the Independent Directors on March 27, 1997.
The Advisory Agreement provides for, among other things, a regular
quarterly advisory fee, certain transactional fees and reimbursement of certain
expenses. Pursuant to Section 4.9 of MITS' Bylaws, the Independent Directors are
required at least annually to reach a determination that the Advisor's
compensation is reasonable in relation to the nature and quality of services
performed. Such determination must be based on the following criteria and
reflected in the minutes of the meeting of the Directors: (i) the size of the
advisory fee in relationship to the size, composition and profitability of the
invested assets; (ii) the investment opportunities generated by the Advisor;
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(iii) advisory fees paid to other advisors by other real estate investment
trusts; (iv) additional revenues realized by the Advisor and its affiliates
through their relationship with MITS, including loan administration,
underwriting or broker commissions, servicing, engineering, inspection and other
fees, whether paid by MITS or by others with whom MITS does business; (v) the
quality and extent of services and advice furnished by the Advisor; (vi) the
quality of the portfolio of MITS in relationship to the investments generated by
the Advisor for its own account; and (vii) all other factors the Independent
Directors may deem relevant. On February 26, 1998, following due consideration
of each of the foregoing criteria, the Independent Directors unanimously
approved the extension of the Advisory Agreement through the period ending
December 31, 1998.
The quarterly advisory fees paid to the Advisor under the Advisory
Agreement through March 31, 1998, were calculated at a rate of 0.75 percent per
annum of the appraised value of the properties. Such fees were payable in full
only if MITS made annualized dividend payments equaling at least 8.5 percent of
the Shareholders' adjusted capital contribution, i.e., the original invested
capital paid by all Shareholders for the shares reduced by the total dividends
from the sale or disposition of any property or the sale or principal repayment
of securities. To the extent that dividends paid for a calendar quarter were
less than 8.5 percent on an annualized basis, the advisory fee payable to the
Advisor for that quarter was to be proportionately reduced. See "Certain
Relationships and Related Transactions" below for information regarding fees and
expense reimbursements paid to Metric Realty as the Advisory Company in 1997. In
connection with the extension of the Advisory Agreement to cover the period
April 1, 1998 to December 31, 1998, in view of MITS' property sales and the
uncertainty regarding the amount of dividends that will be paid for the
remainder of 1998 and the need for services by the Advisory Company to wind down
the affairs of MITS (see "Approval of Plan of Liquidation and Dissolution"
below), the advisory fees to be paid to the Adviser were modified to flat fees
of $25,000 per quarter, not related to dividends paid.
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Stock Price Performance Graph
The graph presented below compares the cumulative total return on MITS
common stock to the cumulative return of the Standard & Poor's 500 Index and an
index of finite-life real estate investment trusts ("REITs") prepared at MITS'
request by the National Association of Real Estate Investment Trusts ("NAREIT")
for the period December 31, 1992 through December 31, 1997. The NAREIT
finite-life REIT index (the "REIT Index") consists of tax-qualified finite-life
REITs which are traded on the New York Stock Exchange, American Stock Exchange
or the NASDAQ National Market System. Companies included in the REIT Index as of
December 31, 1997 are identified on Exhibit A attached hereto. Also identified
on Exhibit A are companies included in the REIT Index as of December 31, 1996,
but not included as of December 31, 1997 because of one or more of the following
reasons: (i) the company has been liquidated or consolidated into another REIT;
(ii) the stock of the company has ceased trading on the New York Stock Exchange,
American Stock Exchange or the NASDAQ National Market System; or (iii) the
company has lost its status as a real estate investment trust.
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The return on investment in MITS' common stock depicted below is based
on an estimate of the Share value, as no public market for the Shares exists. To
compute Share value as of December 31, 1992 referenced in the graph, MITS used a
formula having as its components the net book value of MITS' properties, the
market value of mortgage-backed securities and the book value of its other
assets and liabilities. For the years ended December 31, 1993 and thereafter,
MITS used the same formula, except that the value of MITS' properties as at the
end of 1993, 1994, 1995 and 1996 was determined based on independent third party
appraisals (other than one property purchased in December, 1994 as to which the
amount invested in the property was used as its value for 1994) and the value of
MITS' properties at the end of 1997 was determined based on the Adviser's
estimate of net sales proceeds. For each of the years covered, the net asset
value so determined was divided by the number of Shares then outstanding to
determine value per share. The graph below shows the value of $100 invested on
December 31, 1992 as of the year ends depicted, assuming dividend reinvestment
on each date paid, based on such estimated Share prices as of the quarter end
immediately preceding such dividend payment.
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METRIC INCOME TRUST SERIES, INC.
Comparison of Cumulative Return from December 31, 1992 to
December 31, 1997
[graphic material]
- ------------ ---------- ---------- ---------- ---------- ---------- ----------
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- ------------ ---------- ---------- ---------- ---------- ---------- ----------
MITS $ 100.00 $ 103.62 $ 108.78 $ 124.89 $ 134.39 $ 143.53
- ------------ ---------- ---------- ---------- ---------- ---------- ----------
S&P 500 $ 100.00 $ 109.99 $ 111.43 $ 153.13 $ 188.29 $ 251.13
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Finite-Life $ 100.00 $ 121.06 $ 122.15 $ 153.87 $ 206.06 $ 321.77
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Officers
Set forth below is information regarding MITS' sole executive officer
(other than Thomas P. Lydon, Jr. and William A. Finelli whose biographical
information is set forth under the Section entitled "Nominees").
Herman H. Howerton. Vice President, General Counsel and Secretary. Age
54. Since August, 1988, Mr. Howerton has been a Vice President and General
Counsel of the Advisory Company and was Senior Vice President, Corporate Counsel
from March to August 1988. In April, 1997, he also became Managing Director of
the Advisory Company. He has been a Vice President and General Counsel and
Secretary of MITS since its formation. Mr. Howerton received a Bachelor of Arts
Degree from California State University at Fresno in 1965 and a Juris Doctor
Degree from Harvard Law School in 1968. He is a member of the State Bar of
California and a licensed California real estate broker.
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Certain Relationships and Related Transactions
MITS is a party to the Advisory Agreement with the Advisory Company.
Thomas P. Lydon, Jr., the Chairman, President and Chief Executive Officer of
MITS, is President and Chief Executive Officer and a Director of the Advisory
Company. William A. Finelli, a Director and Vice President, Chief Financial
Officer of MITS, is Vice President, Chief Financial Officer, Treasurer and
Managing Director of the Advisory Company.
The term of the Advisory Agreement has been extended by the action of
the Independent Directors to December 31, 1998. Services provided to MITS by the
Advisory Company include investment advice, real estate disposition assistance,
financial services and asset management services.
MITS' Advisory Agreement with the Advisory Company provides, among
other things, for payment of regular quarterly advisory compensation, together
with reimbursement of certain expenses. (See "General Information -
Compensation" above for information regarding this advisory compensation.) Under
the Advisory Agreement, the Advisory Company and its affiliates are entitled to
reimbursement for all costs incurred in providing services to MITS. These
reimbursable costs fall into two categories: direct costs and allocated common
overhead costs. Such reimbursable costs include, but are not limited to, the
cost of rent, goods or material furnished or incurred by the Advisory Company in
connection with services rendered to or for the benefit of MITS based upon the
compensation of the individuals involved and an appropriate share of overhead.
Such reimbursable costs also include costs of legal, accounting, and other
contracted services, and related general and administrative costs. As amended,
the Advisory Agreement also provides for payment to the Advisory Company of a
flat fee of $25,000 per quarter. (See "- Compensation", above).
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During 1997, Metric Realty and SSR Realty Advisors, Inc. (see "General
Information Compensation" above for information regarding assignment of the
Advisory Agreement by Metric Realty to SSR) together earned aggregate advisory
fees of $163,917 and received or had the right to receive as of December 31,
1997, $200,004 in reimbursement of expenses. Neither Metric Realty nor SSR
earned any acquisition or other fees from MITS in 1997. Additionally, MITS has
entered into an agreement with State Street Research pursuant to which State
Street Research manages MITS' mortgage-backed securities portfolio. State Street
Research is a subsidiary of Metropolitan Life and an affiliate of the Advisor.
During 1997, State Street Research earned $25,328 in fees.
The above described arrangements were not made pursuant to arm's length
negotiations. In the opinion of the Independent Directors of MITS, however, the
terms are as beneficial to MITS as terms which could be obtained from an
independent third party or parties for similar services and the compensation of
the Advisory Company and State Street Research is reasonable in relation to the
nature and quality of services performed by the Advisory Company and State
Street Research, respectively.
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Independent Auditors
Ernst & Young, independent auditors, provided auditing services to MITS
in 1997. A representative of Ernst & Young will be present at the Annual Meeting
to respond to appropriate questions. Such representative will also have the
opportunity to make a statement at the meeting if he or she desires to do so.
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Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange Act")
requires the officers and directors of a public company and persons who
beneficially own more than ten percent of a registered class of its equity
securities to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC") on Forms 3, 4 and 5 and to submit
copies of these Forms to the company. Under Section 16 of the Exchange Act, MITS
is required to identify in this Proxy Statement the name of each person who
failed to file a required Form on a timely basis and to set forth the number of
late Forms, the number of transactions that were not reported on a timely basis
and any known failure to file a required Form.
Based solely on its review of the copies of any Forms 3, 4 and 5
received by it, and written representations from certain reporting persons that
no Forms 5 were required for those persons, MITS believes that during the most
recent fiscal year, all filing requirements under Section 16(a) of the Exchange
Act applicable to those persons who were, at any time during the last fiscal
year of MITS, officers, directors or greater than ten percent Shareholders of
MITS were complied with.
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PROPOSAL NUMBER ONE
APPROVAL OF PLAN OF LIQUIDATION AND DISSOLUTION
The Board of Directors of the Fund (the "Board") unanimously approved
the Plan of Liquidation and Dissolution of the Fund (the "Plan") at a meeting
held on December 10, 1997, and directed that the Plan be submitted for adoption
by the Shareholders of the Fund at the Annual Meeting. Shareholders will be
asked at the Annual Meeting, among other things, to adopt the Plan and authorize
the Board of Directors to take all action necessary or appropriate to implement
the Plan. A copy of the Plan is included with this Proxy Statement as Exhibit A.
Reference is made to Exhibit A for a more complete description of the terms and
conditions of the Plan.
Factual Background
The Fund was formed in 1989 and is qualified as a real estate
investment trust (a "REIT") under the Internal Revenue Code of 1986, as amended
(the "Code"). The Fund was formed to invest in commercial real property and in
mortgage-backed securities. In its initial public offering, the Fund raised an
aggregate amount of $60 million, the net proceeds of which were to be invested
approximately 80% in equity interests in retail, commercial or industrial real
properties and approximately 20% in mortgage-backed securities. Pursuant to the
Fund's offering prospectus, the Fund's assets were expected to be sold, and the
net proceeds were expected to be distributed to the holders of the Fund's Common
Stock, at the expiration of a seven to twelve year period.
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Sales of the Fund's Assets to Date
In accordance with the Fund's original investment objectives, the
Fund's Board of Directors commenced the liquidation of the Fund's assets in
June, 1996. The Fund completed the liquidation of its mortgage-backed security
portfolio during the third quarter of 1997.
In June, 1996 when the Fund commenced the liquidation of its assets, the
Fund owned a total of 21 properties. Sixteen of those properties were Stop N Go
convenience stores, and the other five were retail properties. The Fund has
completed the sale of all of its retail properties. The Fund has completed the
sale of all but one of its convenience store properties. The final remaining
convenience store property is currently being marketed. The net proceeds of all
sales made through December 31, 1997, less cash reserves, have been distributed
to the Shareholders. The most recent of such distributions was made January 12,
1998 which consisted of a substantial portion of the net proceeds of the sales
which closed October 10, December 23 and December 30, 1997. Based on actual and
estimated gross sales prices of the properties, the Fund has sold more than 95%
of its assets.
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Shareholder Approval of Dissolution
Under California law, the Fund may wind up and dissolve by vote of
Shareholders representing 50% or more of the voting power of the Fund. The Fund
was formed as a finite-life entity, and as mentioned above, the Fund's offering
prospectus indicated that the Fund expected to sell all of its assets at the
expiration of a seven to twelve year period and distribute the net proceeds
thereof to the Shareholders. Therefore, although the Fund has the authority to
sell its assets without obtaining a Shareholder vote, the approval of
Shareholders holding a majority of the outstanding Shares is required to wind up
and dissolve the Fund. Therefore, the Fund is seeking Shareholder approval of
the Plan, which will effect the dissolution.
Summary of the Plan
General. The Plan provides for the dissolution and complete liquidation
of the Fund, by providing for (a) the sale or other disposition of all of the
remaining assets of the Fund, (b) distribution to its Shareholders of the net
cash proceeds or other assets (after payment of liabilities and expenses) to be
realized from the sales or other dispositions of its assets in complete
cancellation of each Shareholder's stock, and (c) the dissolution of the Fund in
accordance with the California General Corporation Law.
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California law provides that creditors may recover amounts distributed
to a dissolving corporation's shareholders to the extent of the amount
distributed to the shareholders in connection with the dissolution. Therefore,
the Fund's Board of Directors has recommended that the Fund retain a portion of
the proceeds from the sale of its assets and remain in existence following the
sale of all of the Fund's properties to protect its Shareholders, officers and
directors from third party claims which may arise after the final sale. The
Board currently expects that the Fund will remain in existence for a period of
approximately two years following the adoption of the Plan by the Shareholders,
although such period may be extended at the discretion of the Board if it
determines that it is appropriate for the protection of the Fund's Shareholders,
directors or officers.
Sale of Assets and Property. The Plan provides that the Board shall
continue the process of selling or otherwise disposing of all of the assets of
the Fund. After the closing of any sale the Fund will pay, or will make adequate
provision for payment of, all known liabilities of the Fund (including expenses
of the sale) which are attributable to such assets and which are not assumed by
the buyer thereof. The Fund will set aside from the cash or other proceeds such
additional amount as the directors determine to be reasonably necessary for
payment of other known, unknown, and contingent liabilities or expenses of the
Fund.
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If, as the Plan authorizes, any property is disposed of under the Plan
in exchange for one or more promissory notes or other non-cash proceeds, the
Board of Directors may direct the officers of the Fund to sell all or a portion
of such non-cash proceeds in exchange for cash. Alternatively, the Board may, in
its sole discretion, direct the distribution in kind of all or a portion of such
non-cash proceeds to the Shareholders.
Distributions to Shareholders. The cash proceeds or other assets
realized from the sale or other disposition of real properties and other assets
of the Fund, and any interest or other return thereon, shall be distributed to
the Shareholders of the Fund at such times and in such amounts as shall be
determined by the Board of Directors, in its sole discretion. If any funds or
other assets deposited with the Fund's transfer agent for distribution to
Shareholders are not distributed because one or more Shareholders cannot be
located, such undistributed funds or other assets shall be deposited with the
California State Controller in accordance with the provisions of Section 2007 of
the California General Corporation Law. Such undistributed funds or other assets
shall be held and distributed in accordance with the California Unclaimed
Property Act.
Pending any liquidating distributions, the cash proceeds of sales shall
be invested by the Board of Directors of the Fund in such manner as the Board of
Directors deems appropriate, in its sole discretion. The Board will seek to
invest such proceeds in such manner that the Fund will not be deemed an
investment company under the Investment Company Act of 1940.
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Dissolution. If the Plan is adopted by the Shareholders of the Fund,
the Fund will, at such time as the Board determines, (a) provide notice of
commencement of winding up proceedings to all its known creditors as required by
Section 1903 of the California General Corporation Law, (b) cause any
documentation required by federal or state tax authorities to be obtained,
prepared, executed and filed, (c) file a certificate of election to wind up and
dissolve pursuant to Section 1901 of the California General Corporation Law, (d)
provide notice of commencement of winding up proceedings to Shareholders, other
than those who have voted in favor of the dissolution, by mail at such
Shareholder's address as it appears on the records of the Fund, and (e) withdraw
its ability to do business as a foreign corporation in any states in which it
presently has such authority. When the Fund has been completely wound up, the
Board of Directors of the Fund will file with the California Secretary of State
a Certificate of Dissolution in accordance with the provisions of the California
General Corporation Law.
Amendments to the Plan. Notwithstanding adoption of the Plan by the
Shareholders at the Annual Meeting, the Board of Directors of the Fund may
modify or amend the Plan without further action by the Shareholders, in
accordance with the provisions of California law. Prior to the filing of
Certificate of Dissolution, the Board of Directors may abandon the Plan only
with the further approval of the Shareholders, unless and to the extent that
then current California law permits the Board to abandon the Plan without the
further approval of the Shareholders.
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Indemnification and Insurance. The Board will have the power and
authority under the Plan to purchase and/or continue and maintain insurance as
it deems necessary to cover the Fund's indemnification obligations, including
insurance which will remain in effect subsequent to the dissolution of the Fund.
Authority and Expenses. The Board of Directors and, if authorized by
the Board, the officers, will have authority under the Plan to do or authorize
any and all acts and things as provided for in the Plan and any and all such
further acts and things as they may consider desirable to carry out the purposes
of this Plan. The Fund will pay all expenses incurred in connection with the
Plan and the sale of assets and liquidating distributions, including, but not
limited to, all legal, accounting, printing, appraisal and other fees and
expenses of persons rendering services to the Fund, including its Advisor, SSR
Realty Advisors, Inc.
Risks Attendant to the Adoption of the Plan. Shareholders should consider the
following risks in evaluating whether to approve the Plan:
Potential Liability of Shareholders. The Board expects to adequately
provide for all of the Fund's liabilities prior to distributing any of the
proceeds of sales of properties to the Shareholders. If, however, the Board does
not adequately provide for liabilities, and the Fund's liabilities exceed its
assets after a liquidating distribution is made, then the Shareholders receiving
such distribution could be liable to return to the Fund the amount of such
shortfall, but not exceeding the total amount distributed in all of such
liquidating distributions.
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Timing of Distributions. There can be no assurance that the final sale
of the remaining property will be completed in the near future, and therefore
that any remaining liquidating distributions will be made in the near future, or
ever.
Certain Federal Income Tax Matters
Tax Consequences to the Fund. For federal income tax purposes, the Fund
is taxed as a REIT. In order for the Fund to continue to qualify as a REIT, it
must satisfy a number of asset, income and distribution tests. First, the Fund
must satisfy the asset tests: (i) at least 75% of the value of the Fund's assets
at the close of each quarter of the Fund's taxable year must be represented by
real estate assets, cash, cash items (including receivables arising in the
ordinary course of the Fund's operations), and government securities; (ii) the
Fund may not have more than 25% of its total assets represented by
non-government securities, and in connection with investments in such
securities, not more than 5% of the value of the Fund's total assets may be
invested in such securities of any one issuer; and (iii) the Fund may not hold
more than 10% of the outstanding voting securities of any one issuer. Second,
the Fund must also satisfy a two-part source of income test: (i) at least 75% of
the Fund's gross income must be derived from rents from real property, interest
on obligations secured by mortgages on real property, and other sources directly
related to its real estate activities; and (ii) at least 95% of the Fund's gross
income must be derived from the sources described in part one above and from
dividends, interest and gains from sales or dispositions of stock or securities.
Third, the Fund must distribute 95% of its REIT taxable income (determined
without regard to the dividends paid deduction and by excluding any net capital
gain) to its Shareholders each taxable year.
21
<PAGE>
The Fund anticipates that it will remain qualified under the foregoing
tests throughout the period of the liquidation although current projections for
1998 show that the Fund will pass the 75% income test, the Fund's estimates
indicate that the margin will only be one or two] percentage points. In general,
given the changes in the nature of the Fund's assets and in the Fund's sources
of income which may result from sales of assets in the liquidation, and the need
to retain assets to meet liabilities, there can be no assurance that the
qualification tests will be met. If the Fund ceases to qualify as a REIT for any
taxable year, it would be taxable as a corporation for federal and state income
tax purposes and would be liable for federal and state income taxes with respect
to its gains from sales of assets and its income from operations for that year
and for subsequent taxable years, although its net operating loss carryforwards
would be available to offset most of such income. Net operating loss
carryforwards, however, are allowed to offset only a maximum of 90% of a
corporation's alternative minimum taxable income. In addition, certain states,
such as California, impose restrictions on a corporation's use of net operating
loss carryforwards. Thus, if the Fund fails to maintain its qualification as a
REIT and has taxable income for a taxable year, some federal and state tax will
be owed in spite of the Fund's prior year losses.
22
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For purposes of calculating a REIT's taxable income for a given year,
Section 857(b) of the Code allows the REIT a deduction for dividends paid to its
Shareholders during that taxable year, and, therefore, a REIT generally is not
subject to federal income tax to the extent it distributes its taxable income to
its Shareholders as a dividend. Furthermore, Section 562(b) of the Code provides
that distributions pursuant to a plan of complete liquidation occurring within a
24-month period following the adoption of a plan of liquidation will, to the
extent of the distributing corporation's earnings and profits for the year of
the distribution, be treated as dividends for purposes of computing the
corporation's dividends paid deduction. Adoption of the Plan by the Shareholders
will constitute adoption of a plan of liquidation for this purpose. In addition
Section 562(e) of the Code provides that, for this purpose, a REIT's earnings
and profits for a taxable year include gain realized on the sale or exchange of
real property during that year. It is anticipated that the Fund will distribute
sufficient amounts to the Shareholders each year so that it will remain
qualified as a REIT under the rules described above and that the Fund will have
no REIT taxable income as a result of the liquidation. Nevertheless, it is
possible that the Fund will not complete its liquidation within the requisite
24-month period and/or that the Fund will fail to qualify as a REIT under the
asset, income and distribution tests described above, in which case some federal
and state tax may be owed.
23
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The Fund is also subject to a 100% excise tax on any gain from a
"prohibited transaction". The term "prohibited transaction" means the sale or
other disposition of Fund property that is held for sale to customers in the
ordinary course of the Fund's business. While the Fund does not believe that any
of its property is held for sale to customers in the ordinary course of
business, but rather is held for investment and the production of rental income,
this determination is inherently factual in nature and thus, cannot be predicted
with certainty. The Code does provide a "safe harbor" which, if all its
conditions are met, would protect a REIT's property sales from being considered
prohibited transactions, but the Fund may not be able to satisfy these
conditions because certain expenses directly incurred by the Fund may be too
high.
Consequences to Shareholders. The Fund believes that liquidating
distributions to Shareholders pursuant to the Plan will be treated as
distributions in complete liquidation of the Fund; that is, they will not be
treated as dividends, but rather as if the Shareholder had sold his or her
Shares. In such case, a Shareholder will recognize gain or loss with respect to
each Share held by the Shareholder, measured by the difference between (i) the
Shareholder's basis in that Share and (ii) the total amount of cash and fair
market value of other property, if any, received by the Shareholder with respect
to such Share pursuant to the Plan. If a Shareholder holds more than one block
of Shares (groups of Shares acquired at different times or at different costs),
each liquidating distribution will be allocated ratably among the various blocks
of Shares and gain or loss will be computed separately with respect to each
block of Shares.
24
<PAGE>
Gain or loss recognized by a Shareholder will be capital gain or loss
provided the Shares are held by the Shareholders as capital assets. Capital gain
or loss will be long-term if the Shares are held for one year or more. Long-term
capital gain rates of 20% are available for sales or exchanges of capital assets
held for more than 18 months. Long-term capital gain rates for capital assets
held 18 months or less are 28%. Any long-term capital gains from the sale or
exchange of depreciable real property that would be subject to ordinary income
taxation (i.e., 'depreciation recapture') if it were treated as personal
property will be subject to a maximum tax rate of 25% instead of the 20% maximum
rate. A REIT may designate a capital gains dividend as a 20% rate gain dividend,
an unrecaptured Section 1240 25% rate gain distribution or a 28% rate gain
distribution. Corporate Shareholders may only deduct capital losses recognized
in a taxable year to the extent of capital gains recognized during such year,
while individual Shareholders may deduct capital losses to the extent of their
capital gains, plus $3,000. Any unused capital loss may be carried forward
indefinitely until the taxpayer recognizes sufficient capital gains to absorb
them. Capital losses may not be carried back.
25
<PAGE>
The Plan will likely result in more than one liquidating distribution
to the Shareholders. If so, each liquidating distribution will be first applied
against the adjusted tax basis of each of a Shareholder's Shares and gain will
be recognized with respect to a Share only after an amount equal to the adjusted
tax basis of such Share has been fully recovered. Any losses with respect to a
Share may be recognized by a Shareholder only after the Fund has made its final
liquidating distribution on or after the last substantial liquidating
distribution is determinable with reasonable certainty. As a consequence of the
foregoing, Shareholders incurring losses under the Plan will likely be prevented
from recognizing such losses until the receipt of the final liquidating
distribution.
Taxation of Non-U.S. Shareholders. Because the liquidating
distributions pursuant to the Plan will be treated as paid in exchange for a
Shareholder's Shares and not as dividends, no withholding on liquidating
distributions will generally be required because of the Foreign Investment in
Real Property Tax Act, commonly known as "FIRPTA," unless a Shareholder who is
not a U.S. citizen or resident owns, or has owned within the prior five years,
5% or more of the Fund's outstanding common stock.
26
<PAGE>
If the Fund does not qualify as a REIT, depending on the circumstances
existing at the time of the distributions, withholding on liquidating
distributions may be required. In the event the Fund does not qualify as a REIT,
the liquidating distributions may be treated as a disposition of a U.S. Real
Property Interest by the Non-U.S. Shareholders. In such case, the Fund would be
required to withhold a tax equal to 10% of the amount realized by the Non-U.S.
Shareholders. Non-U.S. Shareholders should consult a tax advisor with respect to
the consequences of the Fund's failure to qualify as a REIT.
Under recent Treasury Regulations, after December 31, 1999 a Non-U.S.
Shareholder who wishes to claim the benefit of an applicable treaty rate would
be required to satisfy certain certification requirements, and certain Non-U.S.
Shareholders and persons holding Shares through such entities, may be subject to
restrictions on their ability to claim benefits under U.S. tax treaties and
should consult a tax advisor. The discussion set forth in "Taxation of Non-U.S.
Shareholders" does not take the new withholding regulations into account.
Non-U.S. Shareholders are strongly urged to consult their own tax advisors with
respect to the new withholding regulations.
State and Local Income Tax. Shareholders may also be subject to state
or local taxes with respect to distributions received by them pursuant to the
Plan and should consult their tax advisors regarding such taxes.
27
<PAGE>
Backup Withholding. Liquidating distributions will not be subject to
back-up withholding.
Required Vote for Approval of the Plan
Approval of the Plan requires the affirmative vote of holders of a
majority of the outstanding Shares. Abstentions and broker non-votes (i.e.,
votes not cast by a broker or other record holder in "street" or nominee name
because such record holder does not have discretionary authority to vote on the
matter) will be counted towards the presence of a quorum at the meeting.
Abstentions and broker non-votes will have the same effect as votes against the
approval of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ADOPTION OF THE
PLAN OF DISSOLUTION AND LIQUIDATION, AND, IN THE ABSENCE OF
INSTRUCTIONS TO THE CONTRARY, PROXIES SOLICITED IN CONNECTION WITH THIS
PROXY STATEMENT WILL BE SO VOTED.
28
<PAGE>
PROPOSAL TWO
APPROVAL OF AMENDMENT TO FUND'S BYLAWS TO
ELIMINATE CERTAIN FINANCIAL REPORTING REQUIREMENTS
Section 9.6 of the Fund's Bylaws (the "Bylaws") currently provides that
the Fund shall provide not later than 120 days after the close of the fiscal
year an Annual Report to the Shareholders. The Annual Report is required to
include, among other things, an audited balance sheet and statements of income
and expense. In addition, Section 9.7 of the Bylaws provides that the Fund shall
provide unaudited financials to its Shareholders within 60 days following the
close of the first three calendar quarters.
The Fund currently owns only one property which is a convenience store.
The Fund believes that the store asset represents less than 5% of the Fund's
original asset base. In light of the Fund's limited assets, the Board of
Directors believes that the cost associated with the preparation and mailing of
annual audited financial statements and unaudited quarterly reports is too high
when considered in light of the fact that the Fund owns only one property. The
Board of Directors believes that the best interest of the Shareholders will be
served by deleting these requirements in the Bylaws.
29
<PAGE>
Under the reporting requirements of the Securities Exchange Act of 1934
(the "Exchange Act"), the Fund is currently required to deliver audited
financial statements to its Shareholders in the form of an annual report. The
Fund has requested that the Securities and Exchange Commission (the "SEC") issue
an exemptive order pursuant to Section 12(h) of the Exchange Act which, if
issued, would excuse the Fund from compliance with the reporting requirements
under the Exchange Act. If the SEC is unwilling to issue such exemptive relief,
however, the Fund will continue to comply with the reporting requirements under
the Exchange Act until such time as it is no longer subject thereto.
If this proposal to delete the reporting requirements from the Bylaws
is adopted and if the SEC grants the exemptive order referenced above, the Fund
will continue to provide to its Shareholders unaudited financial statements on
an annual basis updating them on the Fund's financial position. In addition, the
Fund will file current reports on Form 8-K to disclose material events relating
to its liquidation when and if such events occurred. Thus, the Shareholders will
be kept apprised of the final stages of the Fund's liquidation process, while
the Fund would be relieved from the significant expense associated with full
compliance with the Exchange Act and the Bylaw provisions.
30
<PAGE>
The detriment associated with the adoption of the amendment to the
Bylaws would be that the Shareholders would no longer be entitled to receive
certain financial information relevant to their investment in the Fund.
31
<PAGE>
Required Vote for Approval of the Amendment
The amendment to the Bylaws requires the affirmative vote of a majority
of the outstanding Shares. Abstentions and broker non-votes will have the same
effect as votes against the Amendment to the Bylaws.
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" THIS PROPOSAL AND, IN THE
ABSENCE OF INSTRUCTIONS TO THE CONTRARY, PROXIES SOLICITED IN
CONNECTION WITH THIS PROXY STATEMENT WILL BE SO VOTED.
PROPOSAL THREE
NOMINATION AND ELECTION OF DIRECTORS
General
At the Annual Meeting, Directors are to be elected who will hold office
until the next annual meeting of Shareholders and until the election of their
respective successors, or until their earlier death, resignation, or removal.
All of the incumbent Directors have been nominated for reelection. Each
such nominee has agreed to serve if elected, and management has no reason to
believe that any nominee will be unavailable to serve. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
election of the five nominees named below. The proxies cannot be voted for a
32
<PAGE>
greater number of persons than the number of nominees named. If any nominee
becomes unavailable for election for any reason, the Shares represented by the
proxies will be voted for any substitute nominee designated by the Directors. If
additional persons are nominated by persons other than the Board, discretionary
authority is hereby solicited for the proxy holders in their discretion to vote
all proxies received by them according to the cumulative voting rules to assure
the election of as many of the five nominees listed below, or substitute
nominees designated by the Directors, as possible. See "Voting Rights and
Outstanding Shares" set forth above. The five nominees receiving the highest
number of affirmative votes of the Shares entitled to be voted at the Annual
Meeting will be elected Directors of MITS. The inspector of elections at the
Annual Meeting will tabulate the votes with respect to nominees by recording the
total number of votes for each nominee and the number of votes withheld with
respect to each of the Board's nominees. Votes withheld shall have no legal
effect, except that the shares represented thereby will be counted as present
for the purpose of determining whether a quorum is present at the meeting. With
respect to any other matters that may properly come before the Annual Meeting,
the inspector of elections will record the number of votes in favor of such
matter, the number of votes opposed and the number of abstentions.
Of the five Directors nominated, three are Independent Directors and
two are officers of the Advisory Company and/or its Affiliates. The Bylaws of
MITS require that a majority of the Directors be Independent Directors and that
successor Independent Directors be nominated by the remaining Independent
Directors.
33
<PAGE>
Nominees
The following indicates each nominee's age and his principal experience
during the past five or more years:
Thomas P. Lydon, Jr. Chairman, President and Chief Executive Officer,
age 49. Mr. Lydon has been President and Chief Executive Officer of the Advisory
Company since February 1995 and became Chairman of MITS in March 1997. Prior to
joining the Advisory Company, Mr. Lydon was from April 1992, an Executive Vice
President of MBL Life Assurance Corporation ("MBL") (formerly Mutual Benefit
Life Insurance Company) chosen by the New Jersey Department of Insurance to
oversee, rebuild and organize the real estate investment division of MBL. Mr.
Lydon's experience before joining MBL included serving as Executive Vice
President and principal of Manhattan Capital Realty Corporation, an investment
banking firm, from 1990 to 1992, and as Senior Vice President of Unicorp
American Corporation, a real estate and banking firm, from 1985 to 1990. Mr.
Lydon graduated from Syracuse University with a Bachelor's Degree in Business
Administration in 1970.
34
<PAGE>
William A. Finelli. Director, Vice President, Chief Financial Officer
and Treasurer, age 40. Mr. Finelli has been Managing Director, and a Vice
President, Chief Financial Officer and Treasurer of the Advisory Company since
August 1995 and became a Director of MITS in March 1997 and its Vice President,
Chief Financial Officer and Treasurer in April 1997. He is responsible for
overseeing the day-to-day activity of the accounting, finance, technology and
valuation areas of the Advisory Company. Before he joined the Advisory Company,
Mr. Finelli served from November 1983 as a financial executive of MBL. His last
position with MBL was Vice President - Real Estate Accounting. Prior to his
years at MBL, Mr. Finelli was with Ernst & Young, a public accounting firm. Mr.
Finelli graduated from Rutgers University with a Bachelor's Degree in Accounting
in 1979 and is a certified public accountant.
William F. Garlock. Independent Director, age 48. Mr. Garlock is
President and a director of Garlock & Company, a real estate merchant bank he
formed in 1987. He resigned in June 1993 as President and a member of the Board
of Directors of Lincoln N.C. Realty Fund Incorporated, a publicly-held real
estate investment trust, positions he held for more than five years. Prior to
1987, Mr. Garlock spent five years with Blackman, Garlock, Flynn & Co., a real
estate merchant banking firm he started in San Francisco. From 1977 through
1981, he served as Senior Vice President in charge of Finance for Daon
Corporation, a real estate developer based in Canada. Mr. Garlock currently
serves as a member of the Board of Directors of Brennan Garlock, Inc., a private
banking firm. He received a Bachelor of Arts Degree from the University of
California at Santa Barbara and a Master's Degree in Business Administration
from Stanford University.
35
<PAGE>
William G. Moeckel, Jr. Independent Director, age 51. Mr. Moeckel is
President of Moeckel & Co. and a partner of Thayer Hotel Investors II, L.P., a
private investment partnership investing in U.S. hotel assets. He was
instrumental in the formation in 1996 of this partnership and serves as its
Chief Acquisitions Officer. Mr. Moeckel has over 20 years of diversified real
estate development experience. From 1989 through January of 1993, he was
managing partner of Moeckel, Murphy & Co. From 1986 to May of 1989, he was
President of Cumberland Peale, Ltd. From 1984 through 1986, he was Senior Vice
President and Director of Hotel Development of The Landmarks Group, a commercial
real estate development company based in Atlanta. From 1978 to 1984, he was a
partner in the Atlanta office of Laventhol and Horwath, Certified Public
Accountants. Mr. Moeckel has also previously served as Senior Vice President and
Chief Development Officer of Embassy Suites, Inc. Mr. Moeckel holds a real
estate broker's license in Georgia and is a member of the Atlanta Board of
Realtors. He graduated from Cornell University with a Bachelor of Science Degree
in 1972.
Robert M. Rouse. Independent Director, age 51. Mr. Rouse is the
President of Woodmont Real Estate Services, a real estate management and
consulting firm located in Belmont, California, which merged with Rouse Real
Estate Associates, a real estate management and consulting firm. Since January
36
<PAGE>
1994 he has also been a Director of a private real estate investment trust for
institutional investors which has invested in apartment properties and for which
the Advisory Company is the Advisor. Mr. Rouse was president of Rouse Real
Estate Associates from 1986-1990. In 1985, Mr. Rouse was President of Brichard
Management Corp., a San Francisco-based real estate investment company, where he
had responsibility for property acquisition and management throughout California
and Arizona. From 1973 to 1985, he was employed by the Fox Group, where he
served in a number of capacities, including Senior Vice President, National
Sales and Executive Vice President and Chief Operating Officer of Fox &
Carskadon Management Corporation. Mr. Rouse graduated from Golden Gate
University in 1969 with a Bachelor of Science Degree in Accounting and
Management and in 1977 with a Master's Degree in Business
Administration-Finance. Mr. Rouse has been designated a Certified Property
Manager by the Institute of Real Estate Management.
THE DIRECTORS RECOMMEND A VOTE "FOR" THE ELECTION OF DIRECTORS AS SET
FORTH IN PROPOSAL THREE, AND IN THE ABSENCE OF INSTRUCTIONS TO THE
CONTRARY, PROXIES SOLICITED IN CONNECTION WITH THIS PROXY STATEMENT
WILL BE SO VOTED.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
37
<PAGE>
Any Shareholder intending to present a proposal at the next Annual
Meeting of Shareholders (which may be held in 1999) and desiring management to
consider that proposal for inclusion in the proxy statement relating to that
meeting must submit the proposal by certified mail, return receipt requested, to
the MITS' executive offices, to the attention of MITS' Secretary, no later than
January 5, 1999.
OTHER BUSINESS
At this date, the Board of Directors knows of no other matters proposed
to be brought before the meeting. If any other business should properly come
before the meeting for Shareholder action, the persons named in the enclosed
proxy will vote the Shares represented by the proxies in accordance with their
best judgment.
A copy of MITS' 1997 Annual Report and Form 10-K as filed with the
Securities and Exchange Commission is enclosed herewith. If you desire
additional copies of the 1997 Annual Report, please write to: Investor Services,
Metric Income Trust Series, Inc., One California Street, Suite 1400, San
Francisco, California 94111.
BY ORDER OF THE BOARD OF DIRECTORS OF METRIC INCOME TRUST SERIES, INC.
38
<PAGE>
Dated: [April 20, 1998]
San Francisco, California
39
<PAGE>
EXHIBIT A
Companies in 1997 Finite-life REIT Index Companies in 1996 Finite-life
- ---------------------------------------- REIT Index,
but not in 1997 Index
---------------------
Allied Capital Commercial Corporation American Industrial Properties REIT
Angeles Mortgage Investment Trust Angeles Participating Mortgage Trust
Arizona Land Income Corporation Commercial Net Lease Realty, Inc.
Banyan Strategic Realty Trust Co. National Income Realty Trust
EQK Realty Investors I Nooney Realty Trust, Inc.
Income Opportunity Realty Investors Public Storage Properties XI, Inc.
Meridian Point Equity Trust '83 Public Storage Properties XIV, Inc.
Meridian Point Realty Trust VIII Co. Public Storage Properties XV, Inc.
Public Storage Properties XX, Inc. Public Storage Properties XVI, Inc.
Public Storage Properties XVII, Inc.
Public Storage Properties XVIII, Inc.
Public Storage Properties XIX, Inc.
Transcontinental Realty Investors, Inc.
40
<PAGE>
METRIC INCOME TRUST SERIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder of Metric Income Trust Series, Inc., a California
corporation (the "Fund"), hereby appoints Thomas P. Lydon, Jr. and Herman H.
Howerton, and each of them, as proxies for the undersigned, with full power of
substitution in each of them, to attend the Annual Meeting of Stockholders of
the Fund to be held on June 17, 1998 at 10:00 a.m. at Park Hyatt Hotel, 333
Battery Street, San Francisco, CA, and at any adjournment(s) or postponement(s)
thereof, to cast on behalf of the undersigned all votes that the undersigned is
entitled to cast at such meeting and otherwise to represent the undersigned at
the meeting, with the same effect as if the undersigned were present. The
undersigned hereby revokes any proxy previously given with respect to such
shares. TO VOTE IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATIONS, JUST SIGN
BELOW; NO BOXES NEED TO BE CHECKED.
1. Approval of the Fund's Plan of Liquidation and Dissolution
___ For ___ Against ___ Abstain
2. Approval of the Amendment to the Fund's Bylaws deleting Sections 9.6
and 9.7 thereof
___ For ___ Against ___ Abstain
3. To elect directors (with authority to cumulate votes), the nominees are:
(A) Thomas P. Lydon, Jr. (C) William F. Garlock (E) Robert M.
Rouse
(B) William A. Finelli (D) William G. Moeckel, Jr.
To vote for all nominees, mark an "X" in the "For All" box on the middle
portion of form. To withhold authority for any individual nominee, mark
an "X" in the box marked "For All Except" and mark another "X" in the
appropriate nominee's box. To withhold authority on all nominees, mark
an "X" in the "Withhold All" box.
----------------------------- Only use to withhold authority to vote
VOTE ON DIRECTORS on individual nominees
----------------------------- A B C D E
1 ___ ___ ___ ___ ___
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT 2 In their discretion, the proxy is
authorized to vote upon such other
___ OR ___ OR ___ business as may properly come before
the meeting.
4. In their discretion, the proxy is authorized to vote upon such other
business as may properly come before the meeting.
1
<PAGE>
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and the accompanying Proxy Statement.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH
THE SPECIFICATIONS MADE. IF THIS PROXY IS EXECUTED BUT NO SPECIFICATION IS MADE,
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE NOMINEES AND FOR THE
FOREGOING PROPOSALS AND OTHERWISE IN THE DISCRETION OF THE PROXIES AT THE
MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF.
This Proxy must be signed and dated below.
If you do not sign and return this form, Metric Income Trust Series, Inc. may
incur the additional expense of a second mailing in order to have a sufficient
number of shares represented at the meeting.
SPECIAL INSTRUCTIONS
Please sign exactly as name appears
hereon and date. If the shares are
held as joint tenants, both holders
should sign. When signing as an
attorney, executor, administrator,
trustee, guardian or as an officer
signing for a corporation, please
give full title under signature. If
a corporation, please sign in full
corporate name by president or other
authorized officer.
Dated ____________________, 19_____
------------------------------------
Signature
------------------------------------
Signature, if held jointly
Votes must be indicated by filling in X in Black or Blue ink.
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope
2
