SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GROVE PROPERTY TRUST
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:..........
2) Aggregate number of securities to which transaction applies:.............
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined.):.........................
4) Proposed maximum aggregate value of transaction:.........................
5) Total fee paid:..........................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No:
3) Filing Party:
4) Date Filed:
<PAGE>
GROVE PROPERTY TRUST
598 Asylum Avenue
Hartford, Connecticut 06105
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 1997
The Annual Meeting of Shareholders (the "Annual Meeting") of Grove Property
Trust ("Grove") will be held at 11:00 A.M., local time, on Wednesday, June 18,
1997 at the Hartford Club, 46 Prospect Street, Hartford, Connecticut for the
following purposes:
1. To elect three Trustees to a term expiring at the 2000 Annual
Meeting.
2. To ratify the appointment of Ernst & Young, LLP as Grove's
independent public accountants for the fiscal year ending
December 31, 1997.
3. To act on any other business which may properly come before
the Annual Meeting.
Only the holders of the Common Shares at the close of business on May 12, 1997
are entitled to vote at the Annual Meeting. Each Common Share is entitled to
one vote on all matters.
By Order of the Board of Trust Managers
Joseph R. LaBrosse
Secretary
Hartford, Connecticut
May 16, 1997
YOUR VOTE IS IMPORTANT
To ensure that your interests will be represented at the Annual Meeting, whether
or not you plan to attend the Annual Meeting, please complete, date, sign and
mail the enclosed proxy promptly in the enclosed postage paid envelope.
Shareholders who attend the Annual Meeting in person may revoke their proxies
and vote in person if they so desire.
<PAGE>
GROVE PROPERTY TRUST
598 Asylum Avenue
Hartford, Connecticut 06105
PROXY STATEMENT
Annual Meeting of Shareholders
June 18, 1997
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Trust Managers (the "Board") of Grove Property Trust, a Maryland real
estate investment trust ("Grove"), of proxies from the holders (the
"Shareholders) of Grove's issued and outstanding common shares of beneficial
interest, $0.01 par value per share (the "Common Shares"), to be exercised at
the Annual Meeting to be held on Wednesday, June 18, 1997 at The Hartford Club,
46 Prospect Street, Hartford, Connecticut 06103, at 11:00 a.m. local time, and
at any adjournment(s) or postponement(s) of such meeting (the "Annual Meeting"),
for the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders.
This Proxy Statement and enclosed Proxy Card are being mailed to the
Shareholders on or about May 16, 1997.
At the Annual Meeting, the Shareholders will be asked to consider and vote upon
the following proposals (the "Proposals").
1. To elect three Trustees to a term expiring at the 2000 Annual
Meeting.
2. To ratify the appointment of Ernst & Young, LLP as Grove's
independent public accountants for the fiscal year ending
December 31, 1997.
3. To act on any other business which may properly come before
the Annual Meeting.
Only the holders of the Common Shares at the close of business on May 12, 1997
(the "Record Date") are entitled to vote at the Annual Meeting. Each Common
Share is entitled to one vote on all matters. As of the Record Date, 3,953,435
Common Shares, par value $.01 per share, were outstanding.
A majority of all votes entitled to be cast at the Annual Meeting shall
constitute a quorum for the transaction of business at the Annual Meeting. A
plurality of all votes cast at the Annual Meeting is sufficient to elect
Trustees (Proposal 1). The affirmative vote of Shareholders owning a majority of
the shares voting is required to ratify the appointment of Ernst & Young, LLP as
Grove's independent public accountants (Proposal 2). Abstentions and broker
non-votes will not be counted as votes cast and will have no effect on the
result of the vote on such Proposals.
The Common Shares represented by all properly executed Proxy Cards will be voted
or withheld from voting at the Annual Meeting as indicated or, if no instruction
is given, in favor of each of the Proposals. As to any other business which may
properly come before the Annual Meeting, all properly executed Proxy Cards will
be voted by the persons named therein in accordance with their best judgment.
Grove does not know of any other business which may come before the Annual
Meeting.
Any person giving a proxy has the right to revoke it at any time before it is
exercised (a) by filing with the Secretary of Grove a duly signed revocation or
a Proxy Card bearing a later date or (b) by electing to vote in person at the
Annual Meeting. A notice of revocation need not be on any specific form.
The Bylaws of Grove provide that any shareholder who nominates anyone for
election to the Board or proposes any business to be considered at an annual
meeting must give written notice thereof to the Secretary of Grove at Grove's
principal executive office not less than sixty (60) days nor more than ninety
(90) days prior to the date on which the preceding year's annual meeting was
held. The shareholder must be a shareholder of record at the time of giving the
notice and be entitled to vote at the annual meeting. The notice must contain,
in the case of nominations to the Board, information about the nominee required
to be included in the proxy statement and the nominee's written consent, and in
the case of business proposed for the annual meeting, a brief description of the
business and the reason(s) therefore. In addition, certain information about the
shareholder giving the notice must be included.
Consolidation Transactions
On March 14, 1997, Grove completed the "Consolidation Transactions" described
below. As a result of the Consolidation Transactions, Grove changed its name
from Grove Real Estate Asset Trust and became a self-administered and
self-managed real estate investment trust ("REIT"), which management believes to
be one of the largest public owners of multi-family residential properties in
Southern New England. Grove is the sole general partner of Grove Operating, L.P.
(the "Operating Partnership"), a newly formed limited partnership. The Operating
Partnership was formed to act as the vehicle for the Consolidation Transactions
and is the entity through which Grove conducts substantially all of its business
and owns (either directly or indirectly through subsidiaries) all of its assets.
This structure is commonly referred to as an umbrella partnership REIT or
UPREIT. The Operating Partnership is governed by the Operating Partnership
Agreement.
Grove owns, directly or indirectly, 100% of the interests in the four properties
previously owned by Grove Real Estate Asset Trust and in each of eight
properties acquired from certain limited partnerships through the Consolidation
Transactions. Further, Grove controls twelve additional properties as general
partner or through ownership of 100% of the general partner of the limited
partnerships that own such properties, also as a result of the Consolidation
Transactions. All such properties are collectively referred to as the
"Properties", all such limited partnerships are collectively referred to as the
"Property Partnerships", and all the properties owned by such Property
Partnerships are collectively referred to as the "Partnership Properties". Grove
provides property management services to the Properties and other real property
controlled by certain companies and individuals, including the Executive
Officers of Grove, which are affiliated with Grove (the "Grove Companies") using
the certain acquired assets and liabilities of Grove Property Services, L.P.
("GPS").
An exchange offer was made ("the Exchange Offer") by the Operating Partnership
for the tender of any or all of the limited partnership interests of each
Property Partnership (the "Property Partnership Units") in exchange for Common
Units. A total of 1,091,521 of the Operating Partnership limited partnership
units (the "Common Units") were issued pursuant to the Exchange Offer.
Grove contributed to the Operating Partnership: (a) the properties previously
owned by Grove Real Estate Asset Trust and related assets in exchange for a
partnership interest in the Operating Partnership represented by 620,102 Common
Units; and (b) the gross proceeds of the New Equity Investment received by
Grove, in exchange for a number of Common Units equal to the number of Common
Shares issued by Grove in the New Equity Investment.
The Grove Companies, pursuant to a contribution agreement among Grove, certain
individuals, including affiliates of Grove and the Executive Officers, and the
Operating Partnership (the "Contribution Agreement"), then contributed to Grove
and/or the Operating Partnership certain assets and liabilities of GPS arising
from or used in connection with property management related services, and their
general and limited partnership interests in each Property Partnership (or the
assets thereof), in exchange for an aggregate of 909,115 Common Units issued by
the Operating Partnership and the payment of $177,669 by Grove to the Grove
Companies.
A private placement of equity securities (the "New Equity Investment") took
place, pursuant to which Grove sold to a group of investors Common Shares
totaling, in the aggregate, 3,333,333 Common Shares, in exchange for total gross
proceeds to Grove of $30.0 million. The proceeds were contributed to the
Operating Partnership in exchange for 3,333,333 Common Units. Grove currently
holds approximately 65% of the Common Units.
The Operating Partnership issued a total of 6,067,875 Common Units in the
Consolidation Transactions.
Persons receiving Common Units in the Exchange Offer are restricted from
transferring such Common Units for a period of one year from the completion of
the Consolidation Transactions. Persons receiving Common Units pursuant to the
Contribution Agreement (including the Grove Companies and the Executive
Officers) are restricted from transferring such Common Units for a period of two
years from the completion of the Consolidation Transactions. Following the
period of the applicable restriction on transferability, limited partners of the
Operating Partnership have the right to require the Operating Partnership to
redeem part or all of their Common Units for cash (based on the fair market
value of the Common Shares at the time of such redemption) or, at Grove's
option, it may exchange Common Shares for Common Units on a one-for-one basis,
subject to certain antidilution adjustments and exceptions. Grove has granted
certain entities and individuals receiving Common Units in connection with the
Consolidation Transactions certain registration rights with respect to the
Common Shares which such holders of Common Units may receive upon the exchange
of their Common Units. Pursuant to a registration rights agreement with holders
of Common Units, Grove has agreed to file and generally keep continuously
effective, beginning one year after the completion of the Consolidation
Transactions, a registration statement covering the issuance of Common Shares
upon exchange of Common Units and the resale of such Common Shares.
In conjunction with the above transactions, Grove and certain Property
Partnerships have entered into two new credit facilities (together, the "Credit
Facility") consisting of (a) a three-year secured revolving acquisition and
working capital facility of approximately $25.0 million and (b) an approximately
$15.1 million ten-year term mortgage loan. The Operating Partnership used the
net proceeds of the New Equity Investment and borrowings under the Credit
Facility to refinance the outstanding mortgage indebtedness of certain of the
Property Partnerships and to acquire certain minority interests in certain of
the Property Partnerships.
Grove declared a 5% stock dividend to shareholders of record March 10, 1997,
payable March 28, 1997 and declared a 1.125 to 1.0 stock split with respect to
all Common Shares outstanding on March 10, 1997, effective March 14, 1997
(together, the "Stock Split"). As a result of the Stock Split, Grove issued, on
a pro rata basis, a total of 95,102 Common Shares to the holders of the issued
and outstanding 525,000 Common Shares. Grove did not issue fractional shares in
connection with the Stock Split, but rather paid cash in lieu of fractional
shares.
In connection with the Consolidation Transactions, Grove changed its
distribution policy. The Board concluded that enhancement of Shareholder value
could better be achieved through growth in Grove's asset value, which management
believes will be reflected in the market price of the Common Shares, rather than
by maintaining or increasing the distribution yield on the Common Shares.
Therefore, the Board has voted to reduce the annual cash distributions to
Shareholders, from $.92 per Common Share to $.74 per Common Shares ($.63 per
Common Share after giving effect to the Stock Split). Grove intends to continue
to comply with the REIT requirements under the Internal Revenue Code of 1986, as
amended, (the "Code") that 95% of Grove's REIT taxable income be distributed
annually, while retaining for reinvestment in Grove the maximum amount permitted
under the Code.
PROPOSAL 1
ELECTION OF TRUSTEES
Pursuant to the terms of the Declaration of Trust and Bylaws of Grove, the Board
is to consist of seven persons. The Trustees are divided into three classes,
consisting of three members, Damon D. Navarro, Harold V. Gorman and Theodore R.
Bigman, whose terms expire at the Annual Meeting, two members, J. Joseph Garrahy
and Joseph R. LaBrosse, whose terms expire at the 1999 Annual Meeting of
Shareholders, and two members, James F. Twaddell and Edmund F. Navarro, whose
term expires at the 1998 Annual Meeting of Shareholders. At the Annual Meeting,
three Trustees will be elected to hold office until the 2000 Annual Meeting of
Shareholders and until their successors are elected and qualified. Harold V.
Gorman, Damon D. Navarro and Theodore R. Bigman, who are presently Trustees of
Grove, are nominees for election as Trustees for the term that expires at the
2000 Annual Meeting of Shareholders.
Nominees for election as Trustees
The following individuals are nominees for election as Trustees at the Annual
Meeting:
Harold V. Gorman, age 53, has been a Trustee of Grove since its formation
in June of 1994. From 1968 to 1993, Mr. Gorman served as Vice President and
Assistant General Counsel of Heublein, Inc. From 1993 to 1995, he served as Vice
President/General Counsel to the Paddington Corporation. Since 1995, he has
served as Vice-President and Regulatory Counsel of Heublein, Inc. He received
his B.A. from Wesleyan University in 1965 and his J.D. from the University of
Connecticut Law School. Mr. Gorman is a member of the Connecticut Bar
Association, the American Bar Association and the Board of Directors of the
Connecticut Arthritis Foundation.
Damon D. Navarro, age 43, has been the Chairman of the Board, President and
Chief Executive Officer of Grove since its formation in June of 1994. Damon
Navarro was a Co-Founder of the Grove Companies, a group of companies in the
real estate management and investment business, in 1980 and was the President of
the Grove Companies since their founding. He is responsible for investor
relations, marketing, new business development and organizational management for
Grove and had similar responsibilities for the Grove Companies prior to the
Consolidation Transactions. Mr. Navarro is a graduate of the University of Rhode
Island with a degree in Finance.
Theodore R. Bigman, age 34, has been a Trustee of Grove since April, 1997. From
1987 to 1995, he was a Director at CS First Boston in the real estate group,
establishing and managing their REIT effort. He had primary responsibility for
$2.5 billion of initial public offerings by REITs. Previously, he had extensive
real estate experience in a wide variety of transactions involving the financing
and sale of both individual assets and portfolios of real estate assets, as well
as the acquisition of several real estate companies. Since 1995, he has been a
Principal of Morgan Stanley Asset Management Inc., a subsidiary of Morgan
Stanley Group Inc. ("Morgan Stanley"), responsible for its real estate
securities investment management business. He graduated from Brandeis University
in 1983 with a B.A. in Economics and received an M.B.A. from Harvard University
in 1987.
The Board recommends that you vote FOR the election of the
nominees for Trustees.
Other Trustees
Information concerning the other Trustees whose terms of office continue after
the Annual Meeting is set forth below:
Joseph R. LaBrosse, age 34, has been the Chief Financial Officer, Secretary and
Treasurer as well as a Trustee of Grove since its formation in June of 1994.
Prior to the Consolidation Transactions, Mr. LaBrosse was Chief Financial
Officer of the Grove Companies since 1988. He is responsible for financing, loan
portfolio management, financial reporting, tax planning, cash management,
strategic budgeting and planning for Grove and had similar responsibilities for
the Grove Companies. Prior to joining the Grove Companies in 1988, Mr. LaBrosse
was a real estate tax consultant at Arthur Andersen & Company in Hartford,
Connecticut. He is a magna cum laude graduate of the University of Connecticut
with a degree in Accounting. He is a licensed Certified Public Accountant and a
member of the American Institute of Certified Public Accountants, the
Connecticut Society of Certified Public Accountants and the Real Estate Finance
Association.
J. Joseph Garrahy, age 66, has been a Trustee of Grove since its formation
in June of 1994. Mr. Garrahy began his career in public service in 1962 as a
Rhode Island State Senator. In 1968, he was elected Lieutenant Governor of the
State of Rhode Island, where he served four two-year terms. In 1976, Mr. Garrahy
was elected Governor of the State, and was re-elected to that office in 1978,
1980 and 1982. He served as Chairman of the National Governors' Association's
Subcommittee on Health Policy in 1977 and the National Governors' Association's
Human Services Committee and as Chairman of the Coalition of Northeast
Governors' Committee on Transportation. Mr. Garrahy was a Senior Vice President
with the merchants banking firm of G. William Miller & Company, Inc. of
Washington, D.C. from 1985 to 1990. Mr. Garrahy has served as President of J.
Joseph Garrahy & Associates, Inc., in Providence, Rhode Island, a business
consulting firm, since its formation in 1990. He is a Director of the Providence
and Worcester Railroad Company. Mr. Garrahy attended the University of Buffalo
and the University of Rhode Island.
James F. Twaddell, age 56, has been a Trustee of Grove since June of 1994. He
has been a member of the Investment Banking Group of Schneider Securities, Inc.,
Providence, Rhode Island, since 1995. From 1974 to 1995, Mr. Twaddell served as
Chairman of Barclay Investments, Inc., a member firm of the National Association
of Securities Dealers, Inc. ("NASD"). Mr. Twaddell also served as Chairman of
the Regional Investment Bankers Association, a 125-member cooperative
association of regional investment bankers and broker dealers conducting
business throughout the United States, from 1993 to 1994. For the 1993 - 1995
term, he served on both the NASD District 11 Committee and the District Business
Conduct Committee. He has served as Chairman of the Board of First Mutual Fund,
a publicly-traded mutual fund, since 1979. Mr. Twaddell received his B.A. degree
from Brown University in 1961.
Edmund F. Navarro, age 36, has been a Trustee of Grove since April, 1997 and has
been the Vice President--Property Management of Grove since its formation in
June of 1994. Prior to the Consolidation Transactions, Edmund Navarro was
President of GPS since 1983. He is responsible for the management of the
properties owned by Grove, marketing and supervision of construction projects
and had similar responsibilities for the Grove Companies. Prior to his
employment with the Grove Companies, Mr. Navarro was a Media Marketing Planner
with Vitt Median International in New York City. Mr. Navarro is a graduate of
the University of Rhode Island with a degree in Marketing.
Executive Officers
Each Executive Officer of Grove was appointed in June 1994. Each Executive
Officer holds office at the pleasure of the Board, subject to the Employment
Agreements described below. The Executive Officers of Grove and their positions
and offices with Grove are as set forth below:
Name Age Positions and Offices Held
Damon D. Navarro 43 Chairman of the Board, President, and
Chief Executive Officer
Joseph R. LaBrosse 34 Chief Financial Officer, Secretary,
Treasurer, and Trustee
Edmund F. Navarro 36 Vice President -- Property Management
Brian A. Navarro 42 Vice President -- Acquisition
Gerald A. McNamara 56 Vice President -- Marketing and
Investor Relations
Damon D. Navarro, Chairman of the Board, President and Chief Executive Officer
of Grove. Biographical information regarding Mr. Navarro is set forth above
under "Election of Trustees".
Joseph R. LaBrosse, Chief Financial Officer, Secretary and Treasurer, as well as
Trustee of Grove. Biographical information regarding Mr. LaBrosse is set forth
above under "Election of Trustees".
Edmund F. Navarro, Vice President and Trustee of Grove. Biographical information
regarding Mr. Navarro is set forth above under "Election of Trustees".
Brian A. Navarro, has been the Vice President--Acquisitions of Grove since its
formation in June of 1994. Brian Navarro, a Co-Founder of the Grove Companies in
1980, served as Vice President of the Grove Companies prior to the Consolidation
Transactions. Mr. Navarro is responsible for the acquisition and disposition of
property, financing and organizational management for Grove and had similar
responsibilities for the Grove Companies. Prior to co-founding the Grove
Companies in 1980, Brian Navarro acquired, renovated and resold over 30 two-,
three- and six-family houses in the Hartford, Connecticut, Springfield,
Massachusetts and Westerly, Rhode Island areas. Mr. Navarro is a graduate of the
University of Connecticut with a degree in Finance and a special concentration
in real estate.
Gerald A. McNamara has been the Vice President--Marketing and Strategic Planning
of Grove since its formation in June of 1994. Prior to the Consolidation
Transactions, Mr. McNamara had been a principal and Vice President of the Grove
Companies since 1985. Mr. McNamara was involved in all aspects of property
acquisition and financing, and is now responsible for long-range planning,
marketing and investor relations for Grove. Prior to his association with the
Grove Companies, Mr. McNamara was Senior Vice President of Heublein
International in charge of Food and Beverage Operations overseas. Mr. McNamara
is a graduate of Trinity College with a degree in History and Economics.
Damon Navarro, Brian Navarro and Edmund Navarro are brothers. No family
relationships exists among any of the other Trustees or Executive Officers of
Grove. No arrangement or understanding exists between any Trustee or Executive
Officer or any other person pursuant to which any Trustee or Executive Officer
was selected as a Trustee or Executive Officer, except that, as part of the New
Equity Investment, Morgan Stanley obtained the right to require the Board to
elect a Trustee and to have that person nominated for election by Shareholders
at the Annual Meeting. Mr. Bigman has been designated by Morgan Stanley as such
Trustee.
Certain Relationships and Transactions with Trustees and Executive Officers
During 1996
On January 12, 1996, Grove purchased a ninety-two unit multi-family apartment
complex known as Cambridge Estates Apartments in Norwich, CT from Grove
Cambridge Associates Limited Partnership for $4,250,000. Grove Cambridge
Associates is owned 99% by Grove Norwich Associates Limited Partnership and 0.5%
by Grove Investment Group, Inc. Grove Norwich Associates Limited Partnership is
owned 50% by Messrs. Damon, Brian and Edmund Navarro and Grove Investment Group,
Inc. is owned 100% by Messrs. Damon, Brian and Edmund Navarro.
GPS, which is owned 100% by Messrs. Damon, Brian and Edmund Navarro and Joseph
LaBrosse, provided all of the operating and support functions requisite to the
operation of the properties, including building management and leasing, owned by
Grove. The management agreement provided for a management fee equal to 5% of
gross rental revenues, as defined. Management fees in 1995 and 1996 were $66,781
and $108,731, respectively.
Grove Development Corporation, which is owned 100% by Messrs. Damon, Brian and
Edmund Navarro, provided construction services to Grove. These services were
generally provided at the cost of materials and labor plus a project management
and supervision fee equal to 20% of the aforementioned direct project costs.
Total costs in 1995 were $26,788 and there were no costs in 1996.
Certain Relationships And Transactions In Connection With The Consolidation
Transactions
Certain Trust Managers and Executive Officers of Grove (or members of their
immediate families) and persons who will hold more than 5% of the outstanding
Common Shares (assuming the exchange of all Common Units for Common Shares) have
direct or indirect interests in the transactions which have been consummated in
connection with the Consolidation Transactions, including, without limitation:
(i) the transfer of certain assets and liabilities of GPS and the Grove
Companies' interests in the Property Partnerships to the Operating Partnership
pursuant to the Contribution Agreement and the receipt by certain Executive
Officers of Common Units in connection therewith; (ii) the repayment of certain
indebtedness encumbering the Partnership Properties in connection with the
refinancing at mortgage indebtedness of 17 Property Partnerships and the release
of guarantees by certain Executive Officers in connection therewith; and (iii)
the provision, following the consummation of the Consolidation Transactions, by
the Operating Partnership and National Realty Services, L. P. ("National
Realty") of certain property related services to Grove, the partnerships owning
properties not included as part of the Consolidation Transactions and other
third parties.
In connection with the Consolidation Transactions, pursuant to the Contribution
Agreement, the Executive Officers received the number of Common Units and the
dollar amounts set forth opposite their names below in exchange for their
respective interests in the Property Partnerships and certain assets and
liabilities of GPS. The cash payments to the Navarros represents the purchase
price for their respective general partnership interests in certain Property
Partnerships. The balance of the Grove Companies' interests in the Property
Partnerships, including the economic interests in their general partnership
positions in certain of the Property Partnerships, were acquired by the
Operating Partnership in exchange for Common Units. No member of the Board of
Trust Managers who is not also an Executive Officer transferred any assets to
Grove in connection with the Consolidation Transactions. The Common Units
received by such Executive Officers will carry redemption rights and
registration rights, as described in further detail under "Consolidation
Transactions" elsewhere in this Proxy Statement.
Executive Officer Common Units(1) Cash
Damon D. Navarro 289,874 $85,797
Brian A. Navarro 282,322 $85,797
Edmund F. Navarro 247,174 $6,075
Joseph R. LaBrosse 65,833 _
Gerald A. McNamara 23,912 _
- -----------
(1) Includes Common Units an Executive Officer may be deemed to own beneficially
as a result of his ownership of entities included in the Grove Companies, based
solely on his pro rata ownership of the equity of that entity. One or more of
the Executive Officers may be deemed to own beneficially additional Common Units
held by the Grove Companies pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended, as a result of such Executive Officer's ability to
exercise control over voting and/or investment decisions with respect to one or
more of the entities included in the Grove Companies.
Following the consummation of the Consolidation Transactions, National Realty,
which is 100% owned by Messrs. Damon, Brian and Edmund Navarro and Joseph
LaBrosse, will provide real estate brokerage and related services to Grove. The
real estate brokerage services to be performed by National Realty for Grove will
include the finding, underwriting and negotiation of purchase contracts with
respect to properties to be acquired by Grove, the negotiation of the contracts
with respect to properties to be sold by Grove, and certain commercial leasing
services. In connection with such services, National Realty will receive a 4%
commission on purchases or sales arranged by National Realty which are valued at
up to $5.0 million and a 3% commission on purchases or sales arranged by
National Realty which are valued in excess of $5.0 million. The brokerage
services contracts provide that the Operating Partnership will indemnify
National Realty and the Grove Companies for any liability incurred in performing
such services, except in certain circumstances. Such agreements have terms of
one to two years, subject to either party's right to cancel upon at least 30
days' notice. The brokerage services contracts were not negotiated on an
arm's-length basis and the owners of National Realty may have conflicts of
interest (due to their ownership of National Realty) in connection with the
brokerage services contracts and the provision of real estate brokerage services
by National Realty to Grove.
Following the consummation of the Consolidation Transactions, the Operating
Partnership owns certain of the assets and liabilities of GPS previously used by
GPS in connection with the provision of real estate management services to the
Grove Companies and Grove Real Estate Asset Trust. Following the consummation of
the Consolidation Transactions, pursuant to management services agreements, the
Operating Partnership will provide such property management services to certain
limited partnerships whose General Partner is the Grove Companies. Such
management services agreements will provide that the Operating Partnership shall
receive in exchange for its provision of property management services, with
respect to each property, a fee equal to from 4% to 6% of gross income
(excluding interest income). Such management services agreements have terms of
one year, and will automatically renew for successive one-year terms if neither
party thereto gives notice of termination within 90 days prior to the end of the
then current term.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of the Record Date regarding the
beneficial ownership of Common Shares by each person known by Grove to be the
beneficial owner of more than five percent of the Common Shares, by each Trustee
of Grove, by each Executive Officer of Grove named in the Summary Compensation
Table below, and by all Trustees and Executive Officers of Grove as a group.
Each person named in the table has the sole voting and investment power with
respect to all shares shown as beneficially owned by such person, except as
otherwise set forth in the notes to the table.
Name and Business Address Common Shares Percent of
Of Beneficial Owner Beneficially Owned Common Shares
- -------------------------------------------------------------------------------
Damon D. Navarro 38,837(1)(4) *
Grove Property Trust
598 Asylum Avenue
Hartford, CT 06105
Brian A. Navarro 36,001(1)(4) *
Grove Property Trust
598 Asylum Avenue
Hartford, CT 06105
Edmund F. Navarro 36,001(1)(4) *
Grove Property Trust
598 Asylum Avenue
Hartford, CT 06105
Joseph R. LaBrosse 9,164(1)(4) *
Grove Property Trust
598 Asylum Avenue
Hartford, CT 06105
Gerald A. McNamara 6,790(2)(4) *
Grove Property Trust
598 Asylum Avenue
Hartford, CT 06105
James F. Twaddell 43,311 (3)(4) 1.1%
Schneider Securities, Inc.
2 Charles Street
Providence, Rhode Island 02904
Harold V. Gorman 3,542(4) *
Heublein, Inc.
450 Columbus Boulevard
Hartford, CT 06103
J. Joseph Garrahy 3,542(4) *
220 South Main Street
Providence, Rhode Island 02903
Theodore R. Bigman 777,778(5) 19.7%
Morgan Stanley Group Inc.
1221 Avenue of the Americas
22nd Floor
New York, NY 10020
All Trustees and Executive
Officers as a group 954,766 23.7%
(9 persons)
Morgan Stanley Group Inc. 777,778(5) 19.7%
1221 Avenue of the Americas
22nd Floor
New York, NY 10020
Oregon Public Employees' Retirement
Fund, byABKB/LaSalle Securities
Limited, as agent for Oregon
Public Employees' Retirement Fund 391,392(6) 9.9%
100 East Pratt Street
20th Floor
Baltimore, MD 21202
- --------------------------
* Less than 1%.
(1) Includes Common Shares owned by Grove Equity Partnership, a partnership
whose general partners are Messrs. Damon Navarro, Brian Navarro, Edmund Navarro
and Joseph LaBrosse, which beneficially owns 35,849 Common Shares (less than 1%
of the Common Shares). Each partner's pro rata share of the partnership's Common
Shares has been included in the Common Shares owned by such partner.
(2) Of such Common Shares, 1,181 are beneficially owned by Mr. McNamara's
daughter and he disclaims beneficial ownership in such shares.
(3) Of such Common Shares, 3,071 are beneficially owned by Mr. Twaddell's spouse
and he disclaims beneficial ownership in such shares. At the time of Grove's
initial public offering in 1994 (the "IPO"), Mr. Twaddell was a principal of
Barclay Investments, Inc., the managing underwriter of the IPO, which was issued
warrants to purchase Common Shares at a price of $11.31 per share (the
"Underwriter Warrants"). On February 21, 1996, Barclay Investments, Inc.
transferred 11,221 of the Underwriter Warrants to Mr. Twaddell, which
Underwriter Warrants are included in the Common Shares owned by Mr. Twaddell.
The Underwriter Warrants became exercisable on the first anniversary date of the
IPO and terminate on the fourth anniversary date of the IPO.
(4) Includes Common Shares subject to options to purchase Common Shares granted
pursuant to the 1994 Share Option Plan as follows: Mr. Damon Navarro - 18,231
shares; Messrs. Brian and Edmund Navarro - 16,830 shares; Mr. LaBrosse - 4,210
shares; Mr. McNamara - 2,951 shares; and Messrs. Twaddell, Gorman and Garrahy -
3,542 shares.
(5) The Common Shares beneficially owned by Morgan Stanley include
Common Shares held in investor accounts or entities with respect to
which Morgan Stanley shares discretionary voting and dispositive
authority. Morgan Stanley Asset Management Inc. ("MSAM"), a
wholly-owned subsidiary of Morgan Stanley, shares discretionary voting
and dispositive power over 707,071 of such Common Shares (17.9% of the
Common Shares) which are held in investor accounts or entities,
including The Morgan Stanley Real Estate Special Situations Fund I,
L.P. (214,264 Common Shares, 5.4% of the Common Shares) and The Morgan
Stanley Real Estate Special Situations Fund II, L.P. (285,686 Common
Shares, 7.2% of the Common Shares), for which MSAM is an investment
advisor. By reason of his relationship with Morgan Stanley and MSAM,
Mr. Bigman may be deemed to have beneficial ownership of such shares
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934.
Pursuant to the Securities Purchase Agreement entered into with Morgan
Stanley in connection with its purchase of Common Shares in the New
Equity Investment, Grove has (i) agreed to permit Morgan Stanley to
designate one person to be a member of the Board of Grove and to
nominate that person for election by the Shareholders and (ii) granted
to Morgan Stanley certain preemptive rights in connection with future
issuances (with certain exceptions) by Grove of Common Shares and
other securities convertible into Common Shares ("Convertible
Securities"); the preemptive rights is to purchase (a) in the case of
the issuance by Grove of Convertible Securities, up to the Percentage
Amount of such Convertible Securities and (b) in the case of the
issuance by Grove of Common Shares, a number of Common Shares up to
that number of Common Shares such that Morgan Stanley's ownership,
following such issuance, would continue to be the Percentage Amount of
the issued and outstanding Common Shares plus then-exercisable
"in-the-money" employee stock options. For the purposes of Morgan
Stanley's Securities Purchase Agreement and the preemptive rights
described in the preceding sentence, "Percentage Amount" means 20%,
except in the case of any proposed issuance of Common Shares for less
than $9.00 per share or any Convertible Securities where the initial
conversion, exchange or exercise price, as the case may be, is less
than $9.00 per Common Share, in which case the "Percentage Amount"
means 25%. Morgan Stanley will retain the right to nominate a director
and the preemptive rights described above until the earlier of (i)
Morgan Stanley and its affiliates ceasing to own at least 10% of the
issued and outstanding Common Shares and (ii) Grove consummating an
underwritten public offering of Common Shares yielding gross proceeds
of at least $40.0 million. Pursuant to a Registration Rights Agreement
entered into among Grove, Morgan Stanley and other purchasers in the
New Equity Investment, Grove is required to effect a shelf
registration under the Securities Act of 1933, subject to certain
conditions, of the Common Shares beneficially owned by Morgan Stanley
promptly after September 14, 1997. Moreover, subject to certain
conditions, the Common Shares beneficially owned by Morgan Stanley may
be included in the registration of Common Shares when Grove registers
its Common Shares or the Common Shares of other holders.
(6) Pursuant to the Securities Purchase Agreement entered into with the Oregon
Public Employees' Retirement Fund, by ABKB/LaSalle Securities Limited, as agent
for the Oregon Public Employees' Retirement Fund ("ABKB/LaSalle") in connection
with its purchase of Common Shares in the New Equity Investment, Grove has
granted to ABKB/LaSalle certain preemptive rights in connection with future
issuances (with certain exceptions) by Grove of Common Shares and Convertible
Securities; the preemptive right is to purchase (a) in the case of the issuance
by Grove of Convertible Securities, up to 9.9% of such Convertible Securities
and (b) in the case of the issuance by Grove of Common Shares, a number of
Common Shares up to that number of Common Shares such that ABKB/LaSalle's
ownership would continue to be 9.9% of the issued and outstanding Common Shares
following such issuance. ABKB/LaSalle will retain the preemptive rights
described above until the earlier of (i) ABKB/LaSalle and its affiliates ceasing
to own at least 5.0% of the issued and outstanding Common Shares and (ii) Grove
consummating an underwritten public offering of Common Shares yielding gross
proceeds of at least $40.0 million. Pursuant to a Registration Rights Agreement
entered into among Grove, ABKB/LaSalle and the other purchasers in the New
Equity Investment, Grove is required to effect a shelf registration under the
Securities Act of 1933, subject to certain conditions, of the Common Shares
beneficially owned by ABKB/LaSalle promptly after September 14, 1997. Moreover,
subject to certain conditions, the Common Shares beneficially owned by
ABKB/LaSalle may be included in the registration of Common Shares when Grove
registers its Common Shares or the Common Shares of other holders.
Board Meetings
The Board held three regular meetings during 1996. The Board also took action
four times during the year by consent action. Management also confers frequently
with the Board on an informal basis to discuss Grove's affairs.
Board Committees
The Board has established an Audit Committee, an Investment Committee and a
Compensation Committee. The Board does not have a nominating committee or a
committee performing the functions of a nominating committee; the entire Board
performs the usual functions of such committee.
Audit Committee. The Audit Committee, which consists of Messrs. Twaddell,
Garrahy and Gorman, makes recommendations concerning the engagement of
independent public accountants, reviews with the independent public accountants
the plans and results of the audit engagement, approves professional services
provided by the independent public accountants, reviews the independence of the
independent public accountants, considers the range of audit and non-audit fees
and reviews the adequacy of the Grove's internal accounting controls. The Audit
Committee did not meet during 1996.
Investment Committee. The Investment Committee, which consists of Messrs.
Navarro, Twaddell and Gorman, has the authority to acquire, dispose of and
finance investments for Grove and execute contracts and agreements, including
those related to the borrowing of money by Grove, and generally exercise all
other powers of the Board except for those which require action by all Trustees
or the independent Trustees under the Declaration of Trust or Bylaws of Grove or
under applicable law. The Investment Committee did not meet during 1996; the
properties acquired by Grove early in 1996 and in the Consolidation Transactions
were considered by the entire Board.
Compensation Committee. The Compensation Committee, which consists of Messrs.
Twaddell, Gorman and Garrahy, has the authority to determine the compensation
for Grove's Executive Officers and to administer the Incentive Plan (see
"Executive Bonus Incentive Plan" set forth in this Proxy Statement) and the 1994
Share Option Plan (the "1994 Plan") (see "1994 Share Option Plan" set forth in
this Proxy Statement). The Compensation Committee also has the authority to
grant share options and share appreciation rights in accordance with the 1994
Plan to the Trustees and Executive Officers, other key employees and consultants
of Grove. The Compensation Committee did not meet during 1996.
Compensation of Trustees
Prior to the Consolidation Transactions, Grove paid each Trustee who is not an
employee of Grove (a "Non-Employee Trustee") a fee of $250 for attending each
meeting. Trustees who are employees of Grove are not paid any fees. In addition,
Grove may reimburse Non-Employee Trustees for travel expenses incurred in
connection with their activities on behalf of Grove. Each Non-Employee Trustee
automatically received, upon his initial election to the Board, a non-qualified
option (a "Non-Employee Trustee Option") to purchase 2,362 Common Shares (as
adjusted to give effect to the Stock Split, as provided in the 1994 Plan) at the
IPO price for the Common Shares of $9.42 per share (as adjusted to give effect
to the Stock Split, as provided in the 1994 Plan) (the "Offering Price") under
Grove's 1994 Plan. Thereafter, on the date of the Annual Meetings of Grove's
Shareholders held in 1995 and 1996, each Non-Employee Trustee received an annual
grant of options to purchase 1,181 Common Shares (as adjusted to give effect to
the Stock Split, as provided in the 1994 Plan) at the then-current market price.
Each Non-Employee Trustee Option expires on the tenth anniversary of the date of
grant and generally becomes exercisable in increments of 33 1/3% per year on
each of the first three anniversaries of the date of grant.
Following the Consolidation Transactions, each Non-Employee Trustee receives a
fee of $1,000 for attending each meeting. In addition, Grove may reimburse
Non-Employee Trustees for travel expenses incurred in connection with their
activities on behalf of Grove. Upon the consummation of the Consolidation
Transactions, each Non-Employee Trustee received a grant of a non-qualified
stock option to purchase 10,000 Common Shares under the 1996 Share Incentive
Plan (the "1996 Plan") (see "1996 Share Incentive Plan" elsewhere in this Proxy
Statement). The 1996 Plan provides that each Non-Employee Trustee who is first
elected or appointed after the Consolidation Transactions will receive an
automatic initial grant of a non-qualified stock option to purchase 10,000
Common Shares. In addition, promptly following the date of each Annual Meeting
of Shareholders (including the 1997 Annual Meeting), each Non-Employee Trustee
elected by the Shareholders (including the Nominees) will receive an additional
automatic grant of an option to purchase 5,000 Common Shares; provided, however,
that no Non-Employee Trustee will receive more than one such automatic grant in
any calendar year. The exercise price for grants to Non-Employee Trustees will
be 100% of the fair market value of the Common Shares on the date of grant. Each
such option will expire ten years from the grant date (subject to earlier
termination). Each option will become exercisable in increments of 50% per year
on each of the first two anniversaries of the date of grant. If a Non-Employee
Trustee's service terminates by reason of death, disability, or retirement, the
options will immediately become and remain fully exercisable for one year after
the date of such termination or until the expiration date of such option,
whichever occurs first. If a Non-Employee Trustee's service terminates for any
other reason, that portion of the option that is not exercisable at such time
shall terminate and any portion then exercisable may be exercised until the
earlier of three months after the date of termination or the expiration date of
the option. In the event of a "change of control" (as defined in the 1996 Plan),
each option granted to a Non-Employee Trustee will become immediately
exercisable.
Executive Compensation
The following tables set forth information concerning compensation and share
options provided to the Executive Officers of Grove.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
-------------------- ----------------------------------
Other
Annual Restr-
Name and Comp- icted All Other
Principal ensa- Stock Options/ LTIP Compen-
Position Year Salary Bonus tion Awards SARs(1) Payouts sation
-------- ---- ------ ----- ---- ----- ------- ------- ------
Damon D. 1996 none none none none 12,048 none none
Navarro/Chief 1995 none none none none none none none
Executive Officer 1994 none none none none 18,232 none none
Joseph R. 1996 none none none none 4,016 none none
LaBrosse/Chief 1995 none none none none none none none
Financial Officer 1994 none none none none 4,211 none none
Edmund F. 1996 none none none none 12,048 none none
Navarro/Vice 1995 none none none none none none none
President 1994 none none none none 16,832 none none
Brian A. 1996 none none none none 12,048 none none
Navarro/Vice 1995 none none none none none none none
President 1994 none none none none 16,832 none none
Gerald A. 1996 none none none none 4,725 none none
McNamara/Vice 1995 none none none none none none none
President 1994 none none none none 2,953 none none
- ------------
(1) The number of Common Shares underlying such options have been adjusted to
give effect to the Stock Split, as provided in the 1994 Plan.
INDIVIDUAL OPTION/SAR GRANTS IN LAST FISCAL YEAR
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees Price Expiration
Name Granted (#) (1) in Fiscal Year ($/share) Date
---- --------------- --------------- ---------- ----
(2)
Damon Navarro 12,048 26.8% 7.25 10/31/06
Joseph LaBrosse 4,016 8.9% 7.25 10/31/06
Brian Navarro 12,048 26.8% 7.25 10/31/06
Edmund Navarro 12,048 26.8% 7.25 10/31/06
Gerald McNamara 4,725 10.6% 7.25 10/31/06
- -----------
(1) Options to purchase the indicated number of Common Shares were granted to
such Executive Officer on October 31, 1996, pursuant to the 1994 Plan. The
number of Common Shares underlying such options have been adjusted to give
effect to the Stock Split, as provided in the 1994 Plan.
(2) The exercise price per Common Share of options granted under the 1994 Plan
has been adjusted to give effect to the Stock Split, as provided in the 1994
Plan.
(3) For a description of the terms of the options, see "1994 Share Option Plan"
elsewhere in this Proxy Statement".
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
Number of Under- Value of
lying Securities Unexercised In-the-
Shares Unexercised Money Options/SARs at
Acquired Options/SAR's at FY-End
on Value FY-End Exercisable/ ($)Exercisable/
Name Exercise Realized Unexercisable(1) Unexercisable
---- -------- -------- ---------------- -------------
Damon Navarro 0 0 12,155/18,125 0/4,463
Joseph LaBrosse 0 0 2,807/5,420 0/1,488
Brian Navarro 0 0 11,221/17,659 0/4,463
Edmund Navarro 0 0 11,221/17,659 0/4,463
Gerald McNamara 0 0 1,969/5,709 0/1,750
- -----------
(1) The number of Common Shares underlying options to purchase Common Shares
granted to an individual under the 1994 Plan has been adjusted to give effect to
the Stock Split, as provided in the 1994 Plan.
Employment Agreements
In connection with the IPO, Grove entered into a three-year employment agreement
(each, a "Prior Employment Agreement") with each Executive Officer. Pursuant to
the Prior Employment Agreements, Damon D. Navarro served as Chairman of the
Board, President and Chief Executive Officer of Grove; Brian A. Navarro served
as Vice President--Acquisitions; Edmund F. Navarro serves as Vice
President--Property Management; Joseph R. LaBrosse served as Chief Financial
Officer, Secretary and Treasurer; and Gerald A. McNamara served as Vice
President--Marketing and Strategic Planning. None of Grove's Executive Officers
was paid a salary pursuant to the Prior Employment Agreements.
Grove issued to each of its Executive Officers, as a sign-on bonus, options to
purchase an aggregate of 59,060 Common Shares (as adjusted to give effect to the
Stock Split, as provided in the 1994 Plan) at the Offering Price. Such options
are exercisable for a period of ten years from the date of grant, were issued
pursuant to the 1994 Plan and vest in increments of one-third on each
anniversary of the grant. See "1994 Share Option Plan" set forth below.
In connection with the Consolidation Transactions, and particularly as a result
of the Operating Partnership's acquisition of the Partnership Properties and
certain assets and liabilities of GPS from the Grove Companies, Grove entered
into a new employment agreement (each, a "New Employment Agreement") with each
Executive Officer. The annual base salary for each Executive Officer is as
follows: Messrs. Damon Navarro, Brian Navarro, Edmund Navarro and Joseph
LaBrosse: $50,000; and Mr. McNamara: $25,000.
The New Employment Agreements provide that the Executive Officers shall devote a
substantial part of their business time to the operations of Grove. The New
Employment Agreements establish the initial base salaries set forth above and
provide for an initial three-year term for each of the Executive Officers. The
term of each New Employment Agreement is automatically extended for an
additional year upon expiration of the initial term and any extension period
unless either Grove or the Executive Officer provides the other with at least
120 days' prior written notice that such term shall not be extended. If the New
Employment Agreements are terminated by Grove "without cause" or are terminated
by the Executive Officer after a "change in control" or for "good reason" (as
such terms are defined in the agreements), the Executive Officer will be
entitled to a lump sum payment equal to 200 percent of such Executive Officer's
annual base salary plus an amount equal to the aggregate value of all bonuses,
whether cash, stock, options, or otherwise, granted to such Executive Officer
for the previous year.
Non-Competition Agreements
In connection with the Consolidation Transactions, the Executive Officers
entered into non-competition agreements with Grove (the "Non-Competition
Agreements"). The Non-Competition Agreement of each Executive Officer will
preclude him from directly or indirectly developing, redeveloping, acquiring,
managing or operating multi-family or retail mixed-use properties, other than
certain properties owned by the Grove Companies not included in the
Consolidation Transactions, which compete with the Grove Properties or with
properties acquired by Grove in the future (including the Partnership
Properties) for so long as he is an Executive Officer, Trust Manager,
significant Shareholder (5% or more of the outstanding Common Shares) or
employee of, or consultant to, Grove, and for a period of twenty-four months
after termination thereof other than in the event of termination of his
employment by Grove without cause or by the Executive Officer in the event of a
"change in control" or "for good reason" (as defined therein). Except for the
Executive Officers, no other Trust Manager had an interest in any of the Grove
Companies and will not be bound by the Non-Competition Agreements. These
Non-Competition Agreements superseded the prior non-compete agreements with
Grove entered into at the time of the IPO. Such prior agreements precluded the
identified activities only if they competed with properties acquired by Grove.
1994 Share Option Plan
Grove adopted the 1994 Plan which is administered by the Compensation Committee
of the Board. The Compensation Committee generally has the authority, within
limitations set forth in the 1994 Plan, to establish rules and regulations
concerning the 1994 Plan, to determine the persons to whom options may be
granted, the number of Common Shares to be covered by each option, and the terms
and provisions of the option to be granted.
A total of 118,120 Common Shares (as adjusted to give effect to the Stock Split,
as provided in the 1994 Plan) were reserved for issuance under the 1994 Plan and
options to purchase 118,120 Common Shares have been granted. No further options
may be granted under the 1994 Plan. All options granted to Executive Officers
are incentive stock options, expire on the tenth anniversary of the date of
grant and generally become exercisable in increments of 33 1/3% per year on each
of the first three anniversaries of the date of grant.
Options granted under the 1994 Plan were incentive stock options under Section
422 of the Code and non-qualified options, at the discretion of the Compensation
Committee. No option can be exercised until at least six months after the date
of grant. Options are nontransferable and nonassignable; provided, however, that
the estate of a deceased holder can exercise options. However, an option will be
exercisable immediately upon the happening of any of the following (but in no
event during the six-month period following the date of grant or subsequent to
the expiration of the term of an option): (i) the holder's retirement on or
after attainment of age 62; (ii) the holder's disability or death; (iii) a
"change in control" of Grove; or (iv) except with respect to Non-Employee
Trustee Options, the occurrence of such special circumstances or events as the
Compensation Committee determines merit special considerations. For purposes of
the 1994 Plan, a change in control will be deemed to have occurred, subject to
certain exceptions, if (i) any person acquires direct or indirect beneficial
ownership of securities of Grove representing 40% or more of the combined voting
securities of Grove, or (ii) a person acquires assets from Grove having a total
fair market value equal to or exceeding 33 1/3% of the total assets of Grove.
Options granted to employees terminate ten business days after the termination
of employment, except if cessation of employment is due to retirement on or
after attainment of age 62, disability or death, the option holder or such
holder's successor-in-interest, as the case may be, is permitted to exercise any
option within three months of retirement or within twelve months of death or
disability.
1996 Share Incentive Plan
At the Special Meeting of Shareholders held on March 10, 1997, the 1996
Share Incentive Plan (the "1996 Plan") was approved. All employees of Grove and
its subsidiaries, including the Executive Officers, are eligible to receive
awards under the 1996 Plan, subject to the discretion of the Compensation
Committee to determine the particular individuals who, from time to time, will
be selected to receive awards. The 1996 Plan will remain in existence as to all
outstanding awards until all such awards are either exercised, converted or
terminated; provided, however, that no award can be made after December 31,
2006.
Awards to employees under the 1996 Plan may be in the form of
non-qualified stock options, incentive stock options, stock appreciation rights
("SARs"), restricted stock and other share-based incentive awards. Awards may be
granted singly, or in tandem or in combination with other awards. Each award
will be evidenced by an award agreement setting forth the specific terms and
conditions applicable to that award. Awards under the 1996 Plan that are not
vested or exercised generally will be nontransferable by a holder (other than by
will, the laws of descent and distribution or a qualified domestic relations
order) and rights thereunder will generally be exercisable, during the holder's
lifetime, only by the holder (or by his guardian or legal representative),
subject to such exceptions as (consistent with applicable legal considerations)
may be authorized from time to time by the Compensation Committee.
Options. Stock options authorized under the 1996 Plan are rights to
purchase a specified number of Common Shares at a set price during a specified
period. Unless the Compensation Committee provides otherwise, and such provision
is reflected in the award agreement, the exercise price of an option may not be
less than the fair market value of the Common Shares on the date of grant. Stock
options that are granted as incentive stock options will be granted with an
exercise price no less than fair market value (110% of fair market value if the
incentive stock option is granted to a person who owns more than 10% of the
combined voting power of Grove or any corporate subsidiary), and with such
additional terms as are necessary to satisfy the applicable requirements of
Section 422 of the Code. The fair market value of the Common Shares for which
incentive stock options are exercisable for the first time by an optionee during
any calendar year may not exceed $100,000 (measured as of the date such options
become exercisable) under current tax law. The 1996 Plan also provides that the
maximum number of Common Shares or share-units that may be subject to all
share-based awards, including options, SARs and restricted stock awards, that
are granted to any participant under the 1996 Plan during any calendar year,
will not exceed 500,000 Common Shares (or share-units), either individually or
in the aggregate.
SARs. SARs entitle the recipient to receive, upon surrender of the
right, but without other payment, an amount (payable in cash, Common Shares or
another form of payout as determined by the Compensation Committee) based on the
appreciation in the value of a Common Share on the date the SAR is exercised
over the base price of the Common Share established in the award agreement.
Restricted Stock Awards. A restricted stock award is an award entitling
the recipient to acquire, at no cost or for a purchase price determined by the
Compensation Committee, Common Shares subject to such restrictions and
conditions as the Committee may determine at the time of grant. Conditions may
be based on continuing employment and/or achievement of pre-established
performance goals and objectives. A participant who receives a restricted stock
award will have all rights of a Shareholder with respect to such restricted
stock, including voting and dividend rights, subject to non-transferability
restrictions and other conditions contained in the written instrument evidencing
the restricted stock award or the resolution of the Compensation Committee
authorizing such award. Common Shares underlying a restricted stock award will
become vested with respect to a participant following the date or dates
specified or the attainment of the pre-established performance goals, objectives
or other conditions associated with such restricted stock award, such as
continued employment. Following such date or dates or the attainment of such
pre-established performance goals, objectives or other conditions, restricted
stock will be deemed "vested" and will no longer be restricted stock.
In general, the Company will have the right to repurchase from a
participant any Common Shares still subject to restrictions under the award
agreement immediately upon a termination of such participant's employment, at a
cash price per share equal to the price paid by such participant for such
restricted shares, or, if acquired at no cost, to require forfeiture of such
restricted shares; provided, however, that the Compensation Committee may
provide that no such right of repurchase or forfeiture exists if the
participant's termination of employment is other than for "cause" (as defined in
the 1996 Plan), or occurs after a "change of control" (as defined in the 1996
Plan), or because of the participant's retirement, death or disability, or
otherwise.
Other Share-Based Awards. Other share-based awards might include
phantom stock or units, performance stock or units, bonus stock or units,
dividend equivalent units, or similar securities or rights and other awards
payable in or with a value derived from or related to the fair market value of
the Common Shares, payable on such terms as the Compensation Committee may
approve. Such awards may be granted, become vested or be payable based upon
attainment of specified corporate or individual performance goals.
Other. The number of Common Shares that may be issued in respect of
awards under the 1996 Plan will not exceed 900,000. The number and kind of
shares available for grant and the Common Shares subject to outstanding awards
(as well as individual share limits on awards, performance targets and exercise
prices of awards) may be adjusted to reflect the effect of a stock dividend,
split, recapitalization, merger, consolidation, reorganization, combination or
exchange of Common Shares, extraordinary dividend or other distribution or other
similar transaction. Any unexercised or undistributed portion of any expired,
cancelled, terminated or forfeited award, or any alternative form of
consideration under an award that is not paid in connection with the settlement
of any portion of an award, will again be available for award under the 1996
Plan, whether or not the participant has received benefits of ownership (such as
dividends or dividend equivalents or voting rights) during the period in which
the participant's ownership was restricted or otherwise not vested.
Full payment for Common Shares purchased on exercise of any option,
along with payment of any required tax withholding, must be made at the time of
such exercise in cash or, if permitted by the Compensation Committee, in
exchange for a promissory note in favor of the Company, in shares of stock
having a fair market value equivalent to the exercise price and withholding
obligation, or any combination thereof, or pursuant to such "cashless exercise"
procedures as may be permitted by the Compensation Committee. Any payment
required in respect of other awards may be in such amount and in any lawful form
of consideration as may be authorized by the Compensation Committee.
The 1996 Plan generally does not impose any minimum vesting periods on
options or other awards. The maximum term of an option or any other award is ten
years.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board has appointed the firm of Ernst & Young, LLP, which firm was engaged
as independent public accountants for the fiscal year ended December 31, 1996,
to audit the financial statements Grove for the fiscal year ending December 31,
1997. A proposal to ratify this appointment is being presented to the
Shareholders at the Annual Meeting. A representative of Ernst & Young, LLP is
expected to be present at the meeting and available to respond to appropriate
questions and, although that firm has indicated that no statement will be made,
an opportunity for a statement will be provided.
Grove has dismissed BDO Seidman, LLP as its independent public accountants
effective August 16, 1996. During Grove's two most recent fiscal years and the
subsequent interim period from January 1, 1996 to August 16, 1996, there were no
disagreements with the former accountants on any matter of accounting principle
or practice, financial statement disclosure, or auditing scope or procedure. The
former accountants' report on the financial statements of Grove for each of the
two past fiscal years was unqualified.
Grove engaged Ernst & Young, LLP as its new independent public accountants
effective with the dismissal of its former accountants. During Grove's two most
recent fiscal years and the subsequent interim period from January 1, 1996 to
August 16, 1996, there were no consultations with the newly engaged accountants
with regard to either the application of accounting principles as to any
specific transaction, either completed or contemplated, the type of audit
opinion that would be rendered on Grove's financial statements, or any matter of
disagreements with the former accountants.
The decision to change accountants was approved by all members of the Board of
Grove.
The Board recommends that you vote FOR the proposed ratification of appointment
of Ernst & Young, LLP as independent public accountants for Grove for the fiscal
year ended December 31, 1997.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that Grove's
Executive Officers and Trustees, and persons who own more than ten percent of a
registered class of Grove's equity securities, file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Trustees,
Executive Officers and greater-than-ten-percent shareholders are required by
regulation of the Securities and Exchange Commission to furnish Grove with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Form 5 was
required for those persons, Grove believes that all Section 16(a) filings
required to be filed during 1996 by its Executive Officers, Trustees and
greater-than-ten-percent beneficial owners were timely made, except as follows.
Messrs. Gorman and Garrahy each failed to timely file one report to report the
grant of options. Mr. Twaddell failed to timely file one report to report the
grant of options and one report to report one transaction.
SHAREHOLDER PROPOSALS
Proposals of Shareholders intended to be present at the Annual Meeting of
Shareholders to be held in 1998 must be received by the Secretary of Grove at
Grove's principal executive offices no later than January 16, 1998 for inclusion
in Grove's proxy statement and form of proxy relating to that meeting.
FINANCIAL AND OTHER INFORMATION
Grove's Annual Report for the fiscal year ended December 31, 1996, including
financial statements, is being concurrently sent to the Shareholders. The Annual
Report is not a part of the proxy solicitation materials.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by Grove. Brokers and nominees
should forward soliciting materials to the beneficial owners of the Common
Shares held of record by such persons, and Grove will reimburse them for their
reasonable forwarding expenses. In addition to the use of the mails, proxies may
be solicited by Trustees, Executive Officers and regular employees of Grove, who
will not be specially compensated for such services, by means of personal calls
upon, or telephonic or telegraphic communications with Shareholders or their
personal representatives.
OTHER MATTERS
The Board knows of no matters other than those described in this Proxy Statement
which are likely to come before the Annual Meeting. If any other matters
properly come before the Annual Meeting, the persons named in the accompanying
form of Proxy Card intend to vote the proxies in accordance with their best
judgment.
<PAGE>
GROVE PROPERTY TRUST
P
R The undersigned hereby appoints Damon D. Navarro and Joseph R. LaBrosse,
O and each of them, as proxies, with full power of substitution in each, to
X vote the shares of Grove Property Trust of the undersigned at the Annual
Y Meeting of the Shareholders to be held on Wednesday, June 18 at 11:00 a.m.
at The Hartford Club, 46 Prospect Street, Hartford, Connecticut
06103 and any adjournment thereof as specified on the reverse side.
(continued on reverse side)
SEE REVERSE SIDE
<PAGE>
X Please mark
votes as in
this example
This proxy is solicited by the Board of Trustees and may be revoked prior to
exercise.
This proxy, when properly executed, will be voted as directed herein by the
undersigned shareholder. In the absence of direction, this proxy will be voted
FOR Item 1 and Item 2.
1. Election of Trustees 2. Ratification of appointment
Nominee: Damon D. Navarro, Harold V. Gorman of Ernst & Young, LLP as
Theodore R. Bigman independent public accountant
FOR WITHHELD FOR
AGAINST
ABSTAIN
--------------------------------------
For all nominees except as noted above
3. Other Business:
In their discretion, the proxies are authorized to vote upon such other business
as may properly be brought before the meeting. The Board of Trustees at present
knows of no other formal business to be brought before the meeting.
IF YOU PLAN
TO ATTEND MARK HERE
THE MEETING, FOR ADDRESS CHANGE
INDICATE NUMBER AND NOTE AT LEFT
OF ATTENDEES
IN THE BOX
Important: Please sign exactly as name appears hereon. Executors,
Administrators, Guardians, Attorneys or any other representative should give
full title. Corporate stockholders sign with full corporate name by a duly
authorized officer. If a partnership, sign in partnership name by authorized
person.
Signature:_________________________Date _________________
Signature:_________________________Date _________________
