ILM SENIOR LIVING, INC.
Dear Shareholder:
May 15, 1998
You are cordially invited to attend the Annual Meeting of Shareholders to
be held on Thursday, June 18, 1998 at 9:00 a.m. at The Waldorf-Astoria Hotel,
301 Park Avenue, New York, New York 10022. The business to be conducted at the
meeting, which is set forth in the formal notice that follows, includes:
1. To elect three (3) directors to hold office until the 1999 Annual
Meeting;
2. To ratify the selection of Ernst & Young LLP as auditors of the Company
for the Fiscal Year ending August 31, 1998; and
3. To transact such other business as may properly come before the Annual
meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on May 15, 1998 will
be entitled to notice of and to vote at the Annual Meeting or any adjournment or
adjournments thereof.
At the Annual Meeting, management will review Fiscal 1997, report on recent
financial results and discuss expectations for the future. Directors and
management will be available to answer any questions from the floor.
The Company relies upon all shareholders to promptly execute and return
their proxies in order to avoid costly proxy solicitation. Therefore, in order
to save the Company the unnecessary expense of further proxy solicitation, I ask
that you promptly sign and return the enclosed proxy card in the envelope
provided. If you attend the Annual Meeting, as we hope you do, you may withdraw
your proxy at the Annual Meeting, and vote your shares in person from the floor.
Your vote is important to the Company.
Sincerely,
ILM SENIOR LIVING, INC.
Lawrence A. Cohen
President
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<PAGE>
May 15, 1998
LETTER TO SHAREHOLDERS,
NOTICE
and
PROXY STATEMENT
for the
ANNUAL MEETING
Of
SHAREHOLDERS
June 18, 1998
ILM SENIOR LIVING INC.
28 State Street
Suite 1100
Boston, MA 02109
2
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ILM SENIOR LIVING, INC.
May 15, 1998
Notice of Annual Meeting of Shareholders
To be Held on Thursday, June 18, 1998
The Annual Meeting of Shareholders of ILM Senior Living, Inc. will be held at
The Waldorf-Astoria Hotel, 301 Park Avenue, New York, New York 10022 on
Thursday, June 18, 1998, at 9:00 a.m. for the following purposes:
1. To elect three (3) directors to hold office until the 1999 Annual
Meeting;
2. To ratify the selection of Ernst & Young LLP as auditors of the Company
for the Fiscal Year ending August 31, 1998; and
3. To transact such other business as may properly come before the Annual
meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on May 15, 1998 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment or
adjournments thereof.
The holders of shares of Common Stock of record at the close of business on May
15, 1998 are entitled to vote at the meeting. If you are present at the meeting,
you may vote in Person even though you have previously delivered your proxy.
By Order of the Board of Directors
Jeffry Dwyer
Secretary
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR
PROXY AND VOTE IN PERSON.
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<PAGE>
ILM SENIOR LIVING, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 15, 1998
General
The enclosed Proxy is solicited by and on behalf of the Board of Directors
of ILM Senior Living, Inc. (the "Company") for the Annual Meeting of
Shareholders to be held at The Waldorf-Astoria, 301 Park Avenue, New York, New
York 10022 at 9:00 a.m. on Thursday, June 18, 1998 (the "Annual Meeting"). The
Proxy may be revoked at any time prior to voting thereof by notifying the
persons named therein of intention to revoke or by conduct inconsistent with
continued effectiveness of the Proxy, such as delivery of a later dated Proxy or
appearance at the Annual Meeting and voting in person the shares to which the
Proxy relates. Shares represented by executed Proxies will be voted, unless a
different specification is made therein, FOR election to the Board of Directors
of the persons identified therein as nominees for director, and FOR each
proposition identified therein.
This Proxy Statement and the enclosed Proxy were mailed on or about May 15,
1998 to shareholders of record at the close of business on May 15, 1998 (the
"Record Date"). The Company has mailed each shareholder of record as of the
Record Date an Annual Report that includes audited financial statements for the
fiscal year ended August 31, 1997.
The Company has one class of securities, a voting common stock (the "Common
Stock"). The holders of a majority of the shares outstanding and entitled to
vote that are present at the Annual Meeting in person or represented by proxies
will constitute a quorum. The affirmative vote of a majority of the shares
represented at the Annual Meeting is required to elect a nominee to the Board of
Directors and to approve each other proposition identified in the Proxy
Statement. In the event that none of the nominees for Director are elected at
the Annual Meeting, the existing members of the Board of Directors will continue
to serve until their successors qualify as Directors. At the close of business
on the Record Date, the Company had 7,520,100 shares outstanding and entitled to
vote. Each share has one vote on all matters, including those to be acted upon
at the Annual Meeting.
The mailing address of the Company is c/o Investor Services Department,
P.O. Box 7090, Troy, MI 48007. Notices of revocation of Proxy should be sent to
that address. Questions concerning the Annual Meeting can be answered by calling
the Company's Investor Services Department, toll free, at 888-257-3550.
The Company will provide shareholders, without charge, a copy of the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended August 31, 1997, including the financial
statements and schedules thereto, on written request to Jeffry Dwyer, Secretary
of the Company, at the Company's mailing address: Investor Services Department,
P.O. Box 7090, Troy, MI 48007.
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<PAGE>
Ownership of Equity Securities
"Beneficial ownership" as used herein has been determined in accordance
with the rules and regulations of the Securities and Exchange Commission and is
not to be construed as an admission that any of such shares are in fact
beneficially owned by any person. As of the Record Date, there are no
shareholders known to the Company who own beneficially 5% or more of the
outstanding shares of the Company's Common Stock.
As of May 15, 1998, the following is the beneficial ownership of the
Directors and nominees for Director individually and for Directors and executive
officers of the Company as a group in the Company's Common Stock.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial
Name and Address Title Ownership Percent of Class
- ----------------------------------- ------------------------------------ ---------------------------- ----------------
<S> <C> <C> <C>
J. William Sharman, Jr. Director and Nominee for Director None N/A
Carl J. Schramm Director and Nominee for Director None N/A
Lawrence A. Cohen President and Chief Executive None N/A
Officer and Director
Jeffry R. Dwyer Secretary, Director and Nominee None N/A
for Director
Julien G. Redele Director None N/A
Directors and Executive Officers
of Company as a group None N/A
</TABLE>
Compliance With Exchange Act Filing Requirements
The Securities Exchange Act of 1934 requires the officers and Directors
of the Company, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file certain reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC").
Officers, Directors and ten percent beneficial holders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
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Based solely on its review of the copies of such forms received by it, the
Company believes that during the year ended August 31, 1997 all filing
requirements applicable to its officers, Directors and ten percent beneficial
holders were complied with.
Terms of Solicitation
D.F. King & Co., Inc. has been retained by the Company to assist in
soliciting proxies. It is anticipated that fees and expenses paid to D.F. King &
Co., Inc. in connection with this process will be approximately $5,000. The cost
of solicitation will be borne by the Company.
ELECTION OF DIRECTORS
(Proposal 1)
At the Annual Meeting three Directors are to be elected to the Board of
Directors, each to hold office until the next Annual Meeting of Shareholders and
until his successor is duly elected and qualified, except in the event of death,
resignation or removal. Unless otherwise specified, proxies solicited hereby
will be voted for the election; discretionary authority may be exercised to vote
for a substitute. No circumstances are presently known that would render any
nominee named herein unavailable. All of the nominees are existing members of
the Board of Directors.
Information Concerning Nominees
The nominees, their ages, the year of election of each to the Board of the
Company, their principal occupations during the past five years or more, and
Directorships of each in public companies in addition to the Company, are as
follows:
J. William Sharman, Jr. (age 58) is a Director of the Company and has held
such position since he was elected as of June 9, 1989. Following the date of the
Annual Meeting, Mr. Sharman will become Chairman of the Board, President and
Chief Executive Officer of the Company. Mr. Sharman is also a Director of ILM II
Senior Living, Inc., and the President and a Director of each of ILM I Lease
Corporation and ILM II Lease Corporation. Mr. Sharman is the Chairman of the
Board and President of Lancaster Hotels and Resorts, Inc., a hotel management
company, and Bayou Equities, Inc., a real estate development company. Mr.
Sharman served for ten years as Chairman of the Board and President of the
Lancaster Group, Inc., a real estate development firm based in Houston, Texas.
Mr. Sharman is also a Director of Small Luxury Hotels Ltd. of the United
Kingdom, an international hotel marketing and reservations firm. He has a
Bachelor of Science degree in Civil Engineering from the University of Notre
Dame.
Jeffry R. Dwyer (age 51) is a Director of the Company and has held such
position since he was elected as of June 9, 1989. Mr. Dwyer is also a Director
of ILM II Senior Living, Inc., ILM I Lease Corporation, ILM II Lease Corporation
and ING U.S. - Residential Real Estate Investment Company, Inc. Mr. Dwyer has
been a shareholder of the law firm of Greenberg Traurig Hoffman Lipoff Rosen &
Quentel since 1997, and from 1993 to 1997 was a partner with the law firm of
Akin, Gump, Straus, Hauer & Feld, L.L.P., in the District of Columbia, which he
joined in 1993. Immediately prior to joining Akin, Gump, Straus, Hauer & Feld,
L.L.P, Mr.
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<PAGE>
Dwyer was a partner with the law firm of Morrison & Foerster in the District of
Columbia from 1989 to 1993. Prior to joining Morrison & Foerster, Mr. Dwyer was
a partner with the law firm of Lane & Edson. Mr. Dwyer has written several books
on real estate financing and taught Real Estate Planning as an Adjunct Professor
at the Georgetown University Law Center.
Carl J. Schramm (age 51) was appointed to fill a newly created seat on the
Company's Board of Directors as of December 5, 1996. Mr. Schramm is President of
Greenspring Advisors, Inc., a consulting and investment advisory firm serving
clients in the managed care, health insurance and health information industries.
From 1993 to 1995, Mr. Schramm served as Executive Vice President of Fortis,
Inc., a diversified insurance and financial services company. From 1987 through
1992, Mr. Schramm was President of the Health Insurance Association of America,
ILM II Senior Living, Inc., HCIA, Inc., LifeRate Systems, Inc., the Rochdale
Insurance Group, Physicians Health Corporation and Madison Information
Technologies. Mr. Schramm holds a Ph.D. in Economics from the University of
Wisconsin and received his J.D. from Georgetown University.
Board Meetings During Fiscal 1997
During fiscal 1997, the Board of Directors held 16 meetings. No Director
attended less than 75% of the meetings of the Board.
Legal Proceedings
None of the Directors or officers of the Company are involved in legal
proceedings which are material to an evaluation of his or her ability or
integrity as a Director or officer other than that described below.
On July 29, 1996, ILM I Lease Corporation ("Lease I") and ILM Holding, Inc.
("ILM Holding"), a subsidiary of the Company (collectively for this discussion,
with Lease II and ILM Holding, the "Companies") terminated the property
management agreement ("Agreement") with Angeles Housing Concepts, Inc. ("AHC")
covering the eight senior housing facilities (the "Senior Housing Facilities")
then leased by the Companies. Such Agreement was terminated for cause pursuant
to Sections 1.05(a)(i), (iii) and (iv) of the Agreement. Simultaneously with the
termination of the Agreement, the Companies, together with certain affiliated
entities, filed suit against AHC in the United States District Court for the
Eastern District of Virginia for breach of contract, breach of fiduciary duty
and fraud (the "Virginia litigation"). In November 1996, AHC filed with the
Virginia District Court an Answer in response to the litigation initiated by the
Companies and a Counterclaim against ILM Holding. The Counterclaim alleges that
the Agreement was wrongfully terminated for cause and requested damages which
include the payment of the termination fee in the amount of $1,250,000, payment
of management fees pursuant to the Agreement from August 1, 1996 through October
15, 1996, which is the earliest date that the Agreement could have been
terminated without cause, and recovery of attorney's fees and expenses. The
aggregate amount of damages against all parties as requested in AHC's
Counterclaim exceeds $2,000,000. The Company has guaranteed the payment of the
termination fee at issue in these proceedings to the extent that any termination
fee is deemed payable by the court and in the event that Lease I fails to
perform pursuant to its obligations under the
7
<PAGE>
Agreement. On June 13, 1997 and July 8, 1997, the court issued orders purporting
to enter judgment against the Company and ILM II Senior Living Inc. ("ILM2") in
the amount of $1,000,000 (the "Orders"). On July 10, 1997, the Company, ILM2,
Lease I and ILM II Lease Corporation ("Lease II") filed a notice of appeal to
the United States Court of Appeals for the Fourth Circuit from the Orders.
On February 4, 1997, AHC filed a complaint in the Superior Court of the
State of California against Capital Senior Living, Inc., an affiliate of Capital
Senior Management 2, Inc. ("Capital"), the Company's property manager, Lawrence
A. Cohen, a director and the former President and Chief Executive Officer of the
Company, and others alleging that the defendants intentionally interfered with
AHC's Agreement (the "California litigation"). The complaint sought damages of
at least $2,000,000. On March 4, 1997, the defendants moved the case to Federal
District Court in the Central District of California. At a Board meeting on
February 26, 1997, the Company's Board of Directors concluded that since all of
Mr. Cohen's actions relating to the California litigation were taken either on
behalf of the Company under the direction of the Board or as a PaineWebber
employee, the Company or its affiliates should indemnify Mr. Cohen with respect
to any expenses arising from the California litigation, subject to any insurance
recoveries for those expenses. The Company's Board also concluded that, subject
to certain conditions, the Company or its affiliates should advance up to
$20,000 to pay reasonable legal fees and expenses incurred by Capital in the
California litigation. Subsequently, the boards of directors of Lease I and
Lease II voted to increase the maximum amount of the advance to Capital to
$100,000. By the end of November 1997, Capital had incurred $100,000 of legal
expenses in the California litigation. On February 2, 1998, the amount to be
advanced to Capital was increased to include 75% of the California litigation
legal fees and costs incurred by Capital for December 1997 and January 1998,
plus 75% of cash legal fees and costs incurred by Capital thereafter, not to
exceed $500,000. The Company intends to vigorously defend its interests in the
Virginia Litigation.
On May 8, 1998, Andrew A. Feldman and Jeri Feldman, as Trustees for the
Andrew A. & Jeri Feldman Revocable Trust Dated 9/18/90, commenced a purported
class action on behalf of that trust and all other shareholders of the Company
and ILM 2 in the Supreme Court of the State of New York, County of New York
against the Company, ILM 2 and the directors of both corporations. Andrew A.
Feldman and Jeri Feldman, as Trustees for the Andrew A. & Jeri Feldman Revocable
Trust Dated 9/18/90, on behalf of themselves and others similarly situated, v.
Lawrence A. Cohen, Jeffry R. Dwyer, J. William Sharman, Jr., Carl J. Schramm,
Julien G. Redele, ILM Senior Living, Inc. and ILM II Senior Living, Inc. (N.Y.
Sup. Ct. N.Y. County). The class action complaint alleges that the directors
engaged in wasteful and oppressive conduct and breached fiduciary duties in
preventing the sale or liquidation of the assets of the Company and ILM 2,
diverting certain of the funds' assets and changing the nature of the Company
and ILM 2. The complaint seeks damages in an unspecified amount, punitive
damages, the judicial dissolution of the Company and ILM 1, an order requiring
the directors to take all steps to maximize shareholder value, including either
an auction or liquidation, and rescinding certain agreements, and attorneys'
fees. The Company, ILM 2 and the directors have not yet been required to respond
to the complaint in this action. The Company and ILM 2 believe that the action
is without merit and intend vigorously to contest this action.
Related Transactions
Through June 18, 1997, and subject to the supervision of the Company's
Board of Directors, assistance with the management of the business of the
Company was provided by PaineWebber.
For its services in finding and recommending investments, PaineWebber
received a mortgage placement fee equal to 2% of the capital contributions of
the Company. Mortgage placement fees totaling $1,036,248 were earned by
PaineWebber during the Company's investment acquisition period. In connection
with construction loans, a construction loan administration fee of 1% of each
construction loan was paid by AHC to PaineWebber for administering such loan. In
connection with acquisition loans, a due diligence fee of 1% of the principal
amount of each such loan was paid by AHC to PaineWebber for conducting due
diligence activities. Loan administration and due diligence fees totaling
$425,141 were paid to PaineWebber during the Company's investment acquisition
period from 1989 to 1992.
Under the former advisory agreement, PaineWebber was entitled to receive 1%
of disposition proceeds, as defined, until the Company's shareholders received
dividends of net cash equal to their adjusted capital investments, as defined,
plus a 12% non-compounded annual
8
<PAGE>
return on their adjusted capital investments, as defined, and all disposition
proceeds thereafter until PaineWebber received an aggregate of 5% of disposition
proceeds; and thereafter, 5% of disposition proceeds.
Under the former advisory agreement, PaineWebber had specific management
responsibilities: to perform day-to-day operations of the Company and to act as
the investment advisor and consultant for the Company in connection with general
policy and investment decisions. PaineWebber received an annual base fee and an
incentive fee of 0.25% and 0.25%, respectively, of the capital contributions of
the Company, as defined, as compensation for such services. Incentive fees are
subordinated to Company shareholders' receipt of distributions of net cash
sufficient to provide a return equal to 10% per annum. PaineWebber earned base
management fees totaling $70,000, $88,000 and $89,000 for the years ended August
31, 1997, 1996, and 1995, respectively. Payment of incentive management fees was
suspended effective April 15, 1993 in connection with a reduction in the
Company's quarterly dividend payments.
PaineWebber was reimbursed for direct expenses relating to the offering of
shares of Company common stock, the administration of the Company and the
acquisition and operations of the Company's real estate investments.
PaineWebber performed certain accounting, tax preparation, securities law
compliance and investor communications and relations services for the Company.
Total costs incurred by PaineWebber in providing these services were allocated
among several entities, including the Company. Included in general and
administrative expenses on the consolidated statements of income included in the
Annual Report accompanying this Proxy Statement for the years ended August
31,1997, 1996 and 1995 is $155,000, $142,000 and $166,000, respectively,
representing reimbursements to PaineWebber for providing such services to the
Company.
Mitchell Hutchins Institutional Investors, Inc. ("Mitchell Hutchins")
provided cash management services with respect to the Company's cash assets.
Mitchell Hutchins is a subsidiary of Mitchell Hutchins Asset Management Inc., an
independently operated subsidiary of PaineWebber. Mitchell Hutchins earned
$9,000, $6,000 and $4,000 (included in general and administrative expenses) for
managing the Company's cash assets during fiscal 1997, 1996 and 1995,
respectively. Fees charged by Mitchell Hutchins were based on a percentage of
invested cash reserves which varies based on the total amount of invested cash
which Mitchell Hutchins manages on behalf of PaineWebber.
The advisory relationship with PaineWebber ceased on July 18, 1997;
therefore the payment of advisor fees ceased as of that date. Other services,
such as accounting, compliance, investor communications and relations, and cash
management services ceased on August 31, 1997; therefore, the Company was not
obligated to pay service fees past August 31, 1997 to PaineWebber or Mitchell
Hutchins.
Lease I has retained Capital to be the property manager of the Senior
Housing Facilities and the Company has guaranteed the payment of all fees due to
Capital under the terms of the management agreement, which commenced on July 29,
1996. In November, 1996, Lawrence A. Cohen, President, Executive Officer and
Director of the Company and a Director of Lease I, was also named Vice Chairman
and Chief Financial Officer of Capital Senior Living Corporation, an affiliate
of Capital. On September 18, 1997, Lease I entered into an agreement with
Capital Senior Development, Inc., an affiliate of Capital, to manage the
development process for the potential expansions of several of the Senior
Housing Facilities, Capital Senior Development, Inc. will receive a fee equal to
7% of the total development costs of these expansions if they are pursued. The
Company will reimburse Lease I for all costs related to these potential
expansions, including fees to Capital Senior Development, Inc. During the
quarter ended November 30, 1997, Capital Senior Development, Inc. earned fees of
$96,810 for managing pre-construction development activities for potential
expansions of the Senior Housing Facilities.
9
<PAGE>
Jeffry R. Dwyer is an employee of Greenberg Traurig Hoffman Lipoff Rosen &
Quentel, P.A., which acts as Counsel to the Company and its affiliates.
Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., received fees from the
Company of $46,000 for the year ended August 31, 1997.
Each Director of the Company, other than Messrs. Schramm and Redele, is
also a Director of Lease 1, the Company that leases and operates the senior
housing facilities owned by the Company through a subsidiary.
Board Committees
The Company has no standing committees of its Board of Directors.
Compensation of Directors and Executive Officers
The Company's Directors each receive an annual fee of $12,000 plus $500 for
attending each board of directors meeting and reimbursement for expenses
incurred in attending meetings, and as a result of other work performed for the
Company. Other than the Chairman of the Board, who after the date of the Annual
Meeting will receive an annual fee of $27,000, plus $500 for attending each
Board of Directors meeting, as well as reimbursement for expenses incurred in
attending meetings and other compensation as a result of other work performed
for the Company, officers of the Company are not compensated. Despite the
$15,000 increase in compensation to Mr. Sharman as Chairman of the Board, by
reducing the Company's Board of Directors from five members to three members the
Company will save $9,000 in annual compensation and $1,000 in attendance fees
per meeting, plus reduce its expense reimbursements for meeting attendance.
Lawrence A. Cohen, President and Chief Executive Officer of the Company through
the date of the Annual Meeting, is an employee of Capital Senior Living
Corporation, an affiliate of Capital, and his employment with Capital Senior
Living Corporation states that without Capital Senior Living Corporation's prior
consent he can spend only a limited amount of time on non-Capital Senior Living
Corporation activities. Capital Senior Living Corporation had consented to Mr.
Cohen serving as President and Chief Executive Officer of the Company and ILM
II. Jeffry R. Dwyer is an employee of Greenberg Traurig Hoffman Lipoff Rosen &
Quentel, P.A., which acts as Counsel to the Company. The former officers of the
Company, who were also officers of PaineWebber, received compensation from
PaineWebber which indirectly related to services to the Company, because the
Company was required to pay certain fees to PaineWebber as described in "Related
Transactions," above. When PaineWebber resigned as advisor to the Company, the
former officers resigned effective the same date. Therefore, no services have
been provided by such persons subsequent to June 18, 1997. Following the date of
the Annual Meeting, J. William Sharman, Jr. will become the President, Chief
Executive Officer and Chairman of the Board of the Company.
Comparative Stock Performance Graph
The following performance graph compares the cumulative total shareholder
return on the Company's ("ILM") stock for the five-year period ended August 31,
1997 with the cumulative total returns on the National Association of Real
Estate Investment Trusts Total Return Index for Mortgage REITs ("NAREIT") and
the Standard and Poor's 500 Stock Index ("S&P 500") over the same period. The
comparison assumes that the value of the investments in common stock of ILM,
NAREIT and S&P 500 were $100 at September 1, 1992 and that all dividends were
reinvested. Historical comparisons are not necessarily indicative of future
performance, as ILM stock has had limited public trading to date. Furthermore,
because of certain defaults and the
10
<PAGE>
Company's outstanding mortgage loan investments during fiscal 1993, all
secondary market trading of the Company's stock was suspended from February 1993
through July 1994. For this reason, calculation of the cumulative return for
fiscal 1993 is not meaningful, although it is reflected in the Comparative Stock
Performance Graph.
11
<PAGE>
COMPARATIVE 5-YEAR CUMULATIVE
TOTAL RETURN
AMONG ILM SENIOR LIVING, INC.,
S&P 500 AND NAREIT INDEX
[LINE CHART]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1997
- ---------------------------------------------------------------------------------------------------------------------
ILM 100.00 105.65 54.98 93.43 122.77 154.59
- ---------------------------------------------------------------------------------------------------------------------
NAREIT 100.00 113.14 110.49 131.19 181.73 252.62
- ---------------------------------------------------------------------------------------------------------------------
S&P 500 100.00 115.23 121.54 147.61 175.26 246.50
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
RATIFICATION OF AUDITORS
(Proposal 2)
The Board of Directors has designated Ernst & Young LLP as the Company's
independent auditors for fiscal 1998. This firm has audited the Company's
financial statements since the Company's inception. A representative of Ernst &
Young LLP is expected to be available during the meeting to respond to
appropriate questions.
Ernst & Young LLP's principal function is to audit the consolidated
financial statements of the Company and in connection with that audit to review
certain related filings with the Securities and Exchange Commission.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF RATIFICATION OF THE
DESIGNATION OF ERNST & YOUNG LLP AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR
ENDING AUGUST 31 1998.
OTHER BUSINESS
While management of the Company does not know of any matters which may be
brought before the Meeting other than as set forth in the Notice of Meeting, the
Proxy confers discretionary authority with respect to the transaction of any
other business. It is expected that the proxies will be voted in support of
management on any question that may properly be submitted to the meeting.
MATTERS TO BE PRESENTED AT THE
1998 ANNUAL MEETING OF SHAREHOLDERS
Any qualified shareholder wishing to make a proposal to be acted upon at
the Annual Meeting of Shareholders in 1999 must submit such proposal, to be
considered by the Company for inclusion in the proxy statement, to the Company
at its principal office, 28 State Street, Suite 1100, Boston, MA 02109, by no
later than January 16, 1999.
OTHER MATTERS
As of the date of this statement, the management of the Company knows of no
matters other than those stated above likely to be brought before the Annual
Meeting. However, if any matters not now known come before the Annual Meeting,
the persons named in the enclosed proxy are expected to vote the shares
represented by such proxy on such matters in accordance with their best
judgment.
13
<PAGE>
THE COMPANY DEPENDS UPON ALL SHAREHOLDERS PROMPTLY SIGNING AND RETURNING THE
ENCLOSED PROXY TO AVOID COSTLY SOLICITATION. YOU CAN SAVE THE COMPANY
CONSIDERABLE EXPENSE BY SIGNING AND RETURNING YOUR PROXY AT ONCE.
By Order of the Board of Directors
Jeffry Dwyer
Secretary
14
<PAGE>
PLEASE VOTE - YOUR VOTE IS IMPORTANT
ILM SENIOR LIVING, INC. Many shareholders may think their votes are not
Needs important. On the contrary, they are vital. If a
Your Proxy Vote quorum is not present in person or by proxy at
Before the Annual Meeting, the Company will have to
June 16, 1998 continue to solicit votes until a quorum is
obtained. Your vote, then, could be critical in
allowing the Company to conduct the business at
hand, so please return your proxy card as soon as
possible. All Shareholders will benefit from your
cooperation. Thank you.
ILM Senior Living, Inc.
28 State Street
Suite 1100
Boston, MA 02109
15
<PAGE>
This Proxy is Solicited on Behalf of the Board of Directors of
ILM SENIOR LIVING, INC.
28 State Street, Suite 1100
Boston, MA 02109
The undersigned hereby appoints Jeffry Dwyer and J. William Sharman, Jr., or
either of them, with full power of substitution in each, Proxies, to vote all
shares of Common Stock of ILM SENIOR LIVING, INC. held of record by the
undersigned on May 15, 1998 at the Annual Meeting of Shareholders (the
"Meeting") to be held on June 18, 1998 at 9:00 a.m., or any continuation or
adjournment thereof.
1. ELECTION OF DIRECTORS
|_| FOR all nominees listed |_| WITHHOLD AUTHORITY
below (except as marked to the to vote for all nominees
contrary below) listed below
(Instruction: To withhold authority to vote for any individual nominee,
strike such nominee's name from the list below.)
CARL SCHRAMM JEFFRY R. DWYER J. WILLIAM SHARMAN, JR.
2. RATIFICATION OF AUDITORS. For ratification of the designation of Ernst &
Young LLP as the Company's auditors for the fiscal year ending August 31, 1998.
|_| FOR |_| AGAINST |_| ABSTAIN
3. In their discretion the Proxies are authorized to vote upon such other
business and matters incidental to the conduct of the Meeting, as may properly
come before the Meeting.
|_| FOR |_| AGAINST |_| ABSTAIN
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
Dated:___________________________________________________
PROXY NUMBER When shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
SHARES trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by the
President or other authorized officer. If a partnership
please sign in partnership name by authorized person.
Please sign exactly as name appears to the left
_________________________________________________________
Signature
_________________________________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE, or send to ILM Senior Living, Inc., Investor Services Department,
P.O. Box 7090, Troy, MI 48007
