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 Section 240.14a-11(c) or Section
240.14a-12
GROVE PROPERTY TRUST
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
GROVE PROPERTY TRUST
Notice of Annual Meeting of Shareholders
To be Held June 16, 2000
To our Shareholders:
The Annual Meeting of Shareholders of Grove Property Trust, a Maryland real
estate investment trust (the "Company"), will be held at The Hartford Club, 46
Prospect Street, Hartford, Connecticut, on Friday, June 16, 2000, at 11:00 A.M.,
local time, for the purpose of acting upon the following matters, as well as
such other business as may properly come before the Annual Meeting or any
adjournment thereof:
1. The election of three Trust Managers, each to serve until the annual
meeting of the Company's Shareholders to be held in 2003;
2. The ratification of the appointment of Ernst & Young LLP as the
Company's independent public accountants for the year ending December
31, 2000; and
3. The consideration of any other business which may properly come before
the Annual Meeting.
Only shareholders of record on the books of the Company at the close of
business on April 26, 2000 will be entitled to vote at the Annual Meeting or any
adjournment thereof.
In order that your shares may be represented at the Annual Meeting, please
complete, date and sign the enclosed proxy card and return it promptly in the
enclosed envelope. If you attend the Annual Meeting, you may vote in person even
though you have previously sent in your proxy card.
A copy of the Company's Annual Report for 1999 is enclosed.
By order of the Board of Trust Managers,
Joseph R. LaBrosse
Chief Financial Officer,
Secretary and
Treasurer
Hartford, Connecticut
April 28, 2000
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY AND
PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
GROVE PROPERTY TRUST
598 Asylum Avenue
Hartford, Connecticut 06105
PROXY STATEMENT
Annual Meeting of Shareholders
Friday, June 16, 2000
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" or the "Company"), of proxies from the
holders (the "Shareholders") of the Company's issued and outstanding common
shares of beneficial interest, $0.01 par value per share (the "Common Shares"),
in connection with the Annual Meeting of Shareholders to be held on Friday, June
16, 2000, 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 first being mailed to the
Shareholders on or about May 5, 2000.
At the Annual Meeting, the Shareholders will consider and vote upon
proposals (the "Proposals") set forth in the accompanying Notice of Annual
Meeting.
Only the holders of the Common Shares at the close of business on April 26,
2000 (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,
8,246,975 Common Shares 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 a Trust
Manager (Proposal 1). The affirmative vote of a majority of the Common Shares
voted is required to ratify the appointment of Ernst & Young LLP as the
Company'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 Proposals 1 and 2 although they will be included in
determining whether a quorum is present.
The Common Shares represented by all properly executed proxies will be
voted at the Annual Meeting as indicated or, if no instruction is given, in
favor of each of the Proposals. Since the Company received no notice of any
other proposal to be presented at the Annual Meeting by April 19, 2000, if any
other business properly comes before the Annual Meeting, all properly executed
proxies will be voted by the persons named therein in accordance with their best
judgment. Grove does not know of any business other than the Proposals 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 the Company a duly signed
revocation or a proxy 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 By-laws of the Company 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 the Company
at the Company's principal executive office not less than 60 nor more than 90
days prior to the date corresponding 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 relevant annual
meeting. The notice must contain, in the case of nominations to the Board,
information about
<PAGE>
the nominee required to be included in a proxy statement prepared in accordance
with the rules of the Securities and Exchange Commission and the nominee's
written consent to serve if elected and, in the case of other business proposed
for the annual meeting, a brief description of the business and the reason(s)
therefor. In addition, certain information about the shareholder giving the
notice must be included.
PROPOSAL 1
ELECTION OF TRUST MANAGERS
The number of Trust Managers comprising the Board is currently nine,
divided into three classes. Each class is elected to serve a three-year term,
and classes are elected on a staggered basis. The three Trust Managers who are
nominated for election by the Shareholders at the Annual Meeting are Harold V.
Gorman, J. Timothy Morris and Damon D. Navarro. Three Trust Managers, Keith W.
Munsell, Edmund F. Navarro, and James F. Twaddell, have been elected to hold
office until the Annual Meeting of Shareholders to be held in 2001 and three
Trust Managers, J. Joseph Garrahy, Joseph R. LaBrosse and Gerald A. McNamara,
have been elected to hold office until the Annual Meeting of Shareholders to be
held in 2002.
The affirmative vote of the holders of a plurality of the Common Shares
voted at the Annual Meeting in person or by proxy is required for the election
of each nominee for Trust Manager. Unless otherwise specified therein, any proxy
received will be voted FOR the election of the listed nominees.
The nominees for Trust Manager and the continuing Trust Managers, their
present principal occupation or employment as of April 15, 2000, and other
positions held during the past five years are set forth below.
Nominees for election as Trust Managers to serve until the 2003 Annual Meeting:
Harold V. Gorman, age 56, has been a Trust Manager of Grove since its
formation in June 1994. Since January 1999, he has been Vice President and
General Counsel of Allied Domecq, PLC . From 1995 to 1999, he served as Vice
President and Regulatory Counsel of Heublein, Inc., Hartford, Connecticut. From
1993 to 1995, he served as Vice President/General Counsel to the Paddington
Corporation. Each of Allied Domecq, PLC, Heublein, Inc. and Paddington
Corporation are engaged in spirits, wines and food services businesses.
J. Timothy Morris, age 33, has been a Trust Manager of Grove since March
1999. Mr. Morris joined Morgan Stanley Dean Witter & Co. in 1988, and is
currently a Principal for the Firm's real estate direct investment activities,
where he is responsible for the Morgan Stanley Real Estate Special Situations
Program. Mr. Morris was in charge of Morgan Stanley Dean Witter's Non-Japan Asia
real estate activities, which included both agency and direct investment
initiatives. He has spent the last eleven years working in New York and Hong
Kong, where he has assisted several corporate financial clients gain access to
the international debt and equity capital markets. He has executed principal
investments on behalf of Morgan Stanley Dean Witter & Co.
Damon D. Navarro, age 46, has been the Chairman of the Board, President and
Chief Executive Officer of Grove since its formation in June 1994. Mr. Navarro
co-founded the Company's predecessor in 1980 and is responsible for new business
development and strategic planning.
- --------------------------------------------------------------------------------
The Board recommends that you vote FOR the election of each of the above
nominees for Trust Manager.
- --------------------------------------------------------------------------------
2
<PAGE>
Continuing Trust Managers serving until the 2001 Annual Meeting:
Keith W. Munsell, age 52, has been a Trust Manager of Grove since November
1998. Mr. Munsell is a real estate professional with 22 years of experience in
construction and management of residential and commercial property. He is the
Chief Operating Officer and Executive Vice President of the McNeil Real Estate
Group, Inc. of Dedham, Massachusetts. Mr. Munsell is also a faculty member of
the School of Management at Boston University.
Edmund F. Navarro, age 39, has been a Trust Manager of Grove since April
1997 and Chief Operating Officer of the Company since 1997. From its formation
in 1994 to 1997, Mr. Navarro was Vice President-Property Management of Grove.
Prior to the March 1997 acquisition by the Company of the property management
and related liabilities of Grove Property Services Limited Partnership ("GPS")
and of properties formerly controlled by affiliates of the Company's executive
officers (collectively, the "Grove Companies"), 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.
James F. Twaddell, age 59, has been a Trust Manager of Grove since June
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.
Continuing Trust Managers serving until the 2002 Annual Meeting:
J. Joseph Garrahy, age 69, has been a Trust Manager of Grove since its
formation in June 1994. Mr. Garrahy has served as President of J. Joseph Garrahy
& Associates, Inc., Providence, Rhode Island, a business consulting firm, since
its formation in 1990. 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 is a Director of the
Providence and Worcester Railroad Company.
Joseph R. LaBrosse, age 37, has been the Chief Financial Officer, Secretary
and Treasurer as well as a Trust Manager of Grove since its formation in June
1994. Prior to March 1997, Mr. LaBrosse was Chief Financial Officer of the Grove
Companies since 1988. Mr. LaBrosse is responsible for financing, loan portfolio
management, financial reporting, tax planning, cash management, strategic
budgeting and planning. Mr. LaBrosse 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.
Gerald A. McNamara, age 60, has been the Executive Vice President -
Marketing and Strategic Planning of the Company since 1997 and was Vice
President - Marketing and Investor Relations of the Company from its formation
in June 1994 to 1997. Mr. McNamara has been a principal of the Company and its
predecessor since 1982 and a Trust Manager of the Company since November 1998.
Mr. McNamara is responsible for public relations and strategic planning. Prior
to joining the Company, Mr. McNamara was Senior Vice President of Heublein
International responsible for its food and beverage operations overseas.
3
<PAGE>
Executive Officers
Each executive officer holds office at the pleasure of the Board, subject
to the Employment Agreements described below. The executive officers of Grove
(the "Executive Officers") and their positions and offices with Grove as of the
date hereof are set forth below:
Name Age Positions and Offices Held
---- --- --------------------------
Damon D. Navarro 46 Chairman of the Board, President, and Chief
Executive Officer
Joseph R. LaBrosse 37 Chief Financial Officer, Secretary and Treasurer
Edmund F. Navarro 39 Chief Operating Officer
Munawar A. Cheema 34 Chief Investment Officer
Brian A. Navarro 45 Executive Vice President - Acquisitions
Gerald A. McNamara 60 Executive Vice president - Marketing and
Strategic Planning
Information as to the recent business experience of Damon Navarro, Joseph
LaBrosse, Edmund Navarro and Gerald McNamara is included above.
Munawar A. Cheema, joined the Company in 1996 and serves as its Chief
Investment Officer. His responsibilities include negotiating acquisition and
disposition transactions and structuring financing for such transactions. Prior
to joining the Company, Mr. Cheema was an Associate Vice President with
Citicorp's commercial mortgage backed securities business.
Brian A. Navarro, has been Executive Vice President - Acquisitions of the
Company since 1997 and was Vice President - Acquisitions of the Company from its
formation in June 1994 to 1997. Mr. Navarro is responsible for the acquisition
and disposition of properties for the Company.
Damon, Brian and Edmund Navarro are brothers. No family relationship exists
among any of the other Trust Managers or Executive Officers of Grove. No
arrangement or understanding exists between any Trust Manager or Executive
Officer and any other person pursuant to which any Trust Manager or Executive
Officer was elected as a Trust Manager or Executive Officer. Subject to the
provisions of their respective Employment Agreements, Executive Officers of the
Company are elected by and serve at the discretion of the Board.
Indebtedness of Management
Beginning in November 1998, the Company extended credit to Mr. Cheema in
order to facilitate certain purchases of Common Shares by Mr. Cheema. The loan
to Mr. Cheema bears interest at LIBOR plus 2.0% and is evidenced by a promissory
note, dated as of November 30, 1998, pursuant to which any dividends paid on the
Common Shares purchased by Mr. Cheema will be applied to the payment of interest
on such promissory note. As of March 31, 2000, the aggregate principal balance
outstanding under such loan to Mr. Cheema was $145,721, a reduction from the
highest aggregate principal balance outstanding since January 1, 1999 of
$250,514.
A credit facility (the "Facility") has been established with Sovereign
Bank, successor to BankBoston ("Sovereign Bank"), pursuant to which Sovereign
Bank) has made unsecured loans to each of the Executive Officers (other than
Munawar Cheema). No additional amounts can be borrowed under the Facility. The
Company has guaranteed the obligations of the Executive Officers (other than
Munawar Cheema) under the Facility and all loan proceeds were used to purchase
Common Shares. As of March 31,
4
<PAGE>
2000, the following Executive Officers had aggregate principal balances
outstanding under the Facility as follows: Damon Navarro $1,551,054 , Edmund
Navarro $1,562,932, Brian Navarro $1,439,061, Joseph LaBrosse $770,385, and
Gerald McNamara $283,792.
Security Ownership of Trust Managers and Executive Officers
The following table sets forth information as of the Record Date regarding
the beneficial ownership of Common Shares by each Trust Manager and each
Executive Officer of Grove named in the Summary Compensation Table below (the
"Named Executive Officers"), and by all Trust Managers and Named Executive
Officers 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.
Number of Percentage of
Name and Address of Common Common
Beneficial Owner(1) Shares Shares
- ---------------- ------ ------
Damon D. Navarro.............................. 751,766 (2) 8.6%
Joseph R. LaBrosse............................ 307,856 (3) 3.7%
Edmund F. Navarro............................. 685,894 (4) 7.9%
J. Timothy Morris ............................ 1,700,766 (5) 20.6%
James F. Twaddell............................. 45,773 (6) *
Harold V. Gorman.............................. 14,725 (7) *
J. Joseph Garrahy............................. 17,224 (8) *
Brian A. Navarro.............................. 707,406 (9) 8.1%
Gerald A. McNamara............................ 134,766 (10) 1.6%
Munawar A. Cheema............................. 98,863 (11) 1.2%
Keith W. Munsell.............................. 5,000 (12) *
Trust Managers and Named Executive Officers
as a Group (11 Persons)....................... 4,470,039 (13) 41.5%
- ------------
* Less than 1%
(1) Each person listed has a business address c/o the Company, 598 Asylum
Avenue, Hartford, Connecticut 06105.
(2) Includes 331,337 Common Shares which might be acquired by Mr. Navarro upon
redemption of an equal number of Common Units and 173,369 Common Shares
which could be acquired within 60 days upon exercise of options.
(3) Includes 76,833 Common Shares which might be acquired by Mr. LaBrosse upon
redemption of an equal number of Common Units and 109,294 Common Shares
which could be acquired within 60 days upon exercise of options.
(4) Includes 280,357 Common Shares which might be acquired by Mr. Navarro upon
redemption of an equal number of Common Units and 171,969 Common Shares
which could be acquired within 60 days upon exercise of options.
(5) Represents the Common Shares which are owned by entities managed by Morgan
Stanley or an affiliate of Morgan Stanley as to which Mr. Morris has shared
voting and investment power.
5
<PAGE>
(6) Includes 12,500 Common Shares which could be acquired by Mr. Twaddell
within 60 days upon exercise of options.
(7) Common Shares which could be acquired by Mr. Gorman within 60 days upon
exercise of options.
(8) Includes 14,862 Common Shares which could be acquired by Mr. Garrahy within
60 days upon exercise of options.
(9) Includes 323,784 Common Shares which might be acquired by Mr. Navarro upon
redemption of an equal number of Common Units and 171,969 Common Shares
which could be acquired within 60 days upon exercise of options.
(10) Includes 40,750 Common Shares which might be acquired by Mr. McNamara upon
redemption of an equal number of Common Units and 54,344 Common Shares
which could be acquired within 60 days upon exercise of options.
(11) Includes 41,667 Common Shares which could be acquired by Mr. Cheema within
60 days upon exercise of options.
(12) Common Shares which could be acquired by Mr. Munsell wihin 60 days upon
exercise of options.
(13) Includes 1,053,062 Common Shares which might be acquired upon redemption of
an equal number of Common Units and 777,199 Common Shares which could be
acquired within 60 days upon exercise of options.
Security Ownership of Certain Beneficial Owners
Set forth below is a table indicating those persons whom the management of
the Company believes to be beneficial owners of more than 5% of the Common
Shares. Except where otherwise indicated, the following information is based on
reports filed with the Company and the Securities and Exchange Commission as of
December 31, 1999.
Common Shares
Name and Business Address Beneficially Percent of
Of Beneficial Owner Owned Common Shares
- --------------------------------------------------------------------------------
Morgan Stanley Group, Inc. 1,700,766 (1) 20.0%
1221 Avenue of the Americas
22nd Floor
New York, NY 10020
Oregon Public Employees' Retirement Fund
and LaSalle Investment Management
(Securities) L.P. 1,012,729 (2) 10.1%
100 East Pratt Street, 20th Floor
Baltimore, MD 21202
Wellington Management Company, LLP 801,400 (3) 8.0%
75 State Street
Boston, MA 02109
Damon D. Navarro 751,766 (4) 8.0%
c/o Grove Property Trust
598 Asylum Avenue
Hartford, CT 06105
6
<PAGE>
Common Shares
Name and Business Address Beneficially Percent of
Of Beneficial Owner Owned Common Shares
- --------------------------------------------------------------------------------
Brian D. Navarro 707,406 (5) 7.5%
c/o Grove Property Trust
598 Asylum Avenue
Hartford, CT 06105
Edmund F. Navarro 685,894 (6) 7.3%
c/o Grove Property Trust
598 Asylum Avenue
Hartford, CT 06105
Cliffwood Partners LLC 426,000 (7) 5.2%
11726 San Vicente Boulevard
Suite 600
Los Angeles, CA 90049
- ----------
(1) Morgan Stanley Group, Inc. has advised that with respect to such shares it
has sole voting and dispositive power for all shares.
(2) LaSalle Investment Management (Securities) L.P. has advised that with
respect to such shares it has (i) sole voting and dispositive power for
55,200 shares and (ii) shared voting and dispositive power for 957,529
shares. It can be inferred from LaSalle Investment Management (Securities)
L.P.'s Schedule 13G filed with the Securities and Exchange Commission that
LaSalle and the State of Oregon, Public Employees' Retirement Fund share
voting and dispositive power for shares held by LaSalle for the account of
the State of Oregon, Public Employees' Retirement fund which exceed five
percent of such class of securities of the Company.
(3) Wellington Management Company, LLP has advised that with respect to such
shares it has (i) sole voting and dispositive power for no shares, (ii)
shared voting power for 513,200 shares and (iii) shared dispositive power
for 801,400 shares.
(4) Common Shares beneficially owned as of April 15, 2000. Includes 323,784
Common Shares which might be acquired by Mr. Navarro upon redemption of an
equal number of Common Units and 173,369 Common Shares which could be
acquired within 60 days upon exercise of options.
(5) Common Shares beneficially owned as of April 15, 2000. Includes 323,784
Common Shares which might be acquired by Mr. Navarro upon redemption of an
equal number of Common Units and 171,969 Common Shares which could be
acquired within 60 days upon exercise of options.
(6) Common Shares beneficially owned as of April 15, 2000. Includes 280,357
Common Shares which might be acquired by Mr. Navarro upon redemption of an
equal number of Common Units and 171,969 Common Shares which could be
acquired within 60 days upon exercise of options.
(7) Cliffwood Partners LLC has advised that with respect to such shares it has
sole voting and dispositive power for all shares.
7
<PAGE>
Board Meetings
The Board held four meetings during 1999. The Board also took action once
during the year by consent action. Management also confers frequently with the
Trust Managers on an informal basis to discuss Grove's affairs.
Board Committees
The Board has established an Audit Committee, an Acquisition and 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 makes recommendations concerning the
engagement of independent public accountants, reviews with the independent
public accountants the plans and results of audit engagements, 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 Company's internal
accounting controls. The current members of the Audit Committee are Messrs.
Gorman, Twaddell and Munsell. The Audit Committee met twice during 1999.
Acquisition and Investment Committee. The Acquisition and Investment
Committee has the authority to acquire, dispose of and finance investments for
the Company (including the direct or indirect purchase or sale by the Company of
real estate properties or interests in real estate properties) and to execute
contracts and agreements, including those related to the borrowing of money by
the Company or the purchase or sale by the Company of direct or indirect
interests in real properties, and generally to exercise all other powers of the
Trust Managers except those which require action by all Trust Managers or the
Independent Trust Managers under the Charter or Bylaws or under applicable law.
The current members of the Acquisition and Investment Committee are Messrs.
Garrahy and E. Navarro. The Acquisition and Investment Committee took action
once during 1999 by consent action.
Compensation Committee. The Compensation Committee has the authority to
determine compensation for the Company's Executive Officers and to administer
the 1994 Share Option Plan (the "1994 Plan") and the 1996 Share Incentive Plan
(the "1996 Plan"). The Compensation Committee has the authority to grant share
options in accordance with the 1994 Plan to the Trust Managers, Executive
Officers, other key employees of the Company and consultants and to grant share
options and share appreciation rights to the Trust Managers, Executive Officers,
other key employees and consultants of the Company in accordance with the 1996
Plan. The current members of the Compensation Committee are Messrs. Garrahy and
Gorman. The Compensation Committee took action four times during 1999 by consent
action.
Compensation of Trust Managers
Currently, the Company pays the non-employee Trust Managers a fee of $1,000
for attending each meeting of the Board. Trust Managers who are employees of the
Company are not paid any trust manager fees. In addition, the Company reimburses
the Trust Managers for travel expenses incurred in connection with their
activities on behalf of the Company.
The 1996 Plan provides that each Non-Employee Trust Manager (as defined in
the 1996 Plan) who is first elected or appointed after the 1996 Annual Meeting
of Shareholders receives an automatic initial grant of a nonqualified stock
option to purchase 10,000 Common Shares. In addition, promptly following the
date of each annual meeting of shareholders, each Non-Employee Trust Manager
elected by the shareholders will receive an additional automatic grant of an
option to purchase 5,000 Common Shares; provided, however, that no Non-Employee
Trust Manager will receive more than one such automatic grant in any calendar
year. The exercise price for options granted to Non-Employee Trust Managers
under the 1996 Plan is 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).
8
<PAGE>
Non-Employee Trust Managers who assist the Company in locating acquisitions
which are consummated receive a finder's fee of 0.2% of the acquisition purchase
price plus an additional 0.1% if they participate in the negotiations. No such
fees were paid during 1999, and no such payments are contemplated in 2000.
Executive Compensation
The following tables set forth information concerning compensation paid and
share awards granted to the Company's Named Executive Officers for the years
ended December 31, 1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
--------------------------------------------- ------------------------
Bonus Awards
------------------------- ------------------------
Name and Restricted
Principal Stock Stock Options/
Position Year Salary Regular Purchase(1) Awards(2) SARs
-------- ---- ------ ------- ----------- --------- ----
<S> <C> <C> <C> <C> <C> <C>
Damon D. 1999 $100,000 none $2,230,218 none none
Navarro/Chief 1998 100,000 none 99,961 $143,922(3) none
Executive Officer 1997 34,839 none none none 177,133
Joseph R. 1999 $100,000 none $1,205,622 none none
LaBrosse/Chief 1998 100,000 none 52,102 $107,996(3) 50,000
Financial Officer 1997 38,512 none none none 101,601
Edmund F. 1999 $100,000 none $2,230,277 none none
Navarro/Chief 1998 100,000 none 99,898 $143,992(3) none
Operating Officer 1997 34,839 none none none 177,133
Brian A. 1999 $100,000 none $1,761,256 none none
Navarro/ 1998 100,000 none 76,436 $143,992(3) none
Executive Vice 1997 35,331 none none none 177,133
President
Munawar A. 1999 $100,000 $20,000 $691,932 none none
Cheema/ Chief 1998 98,217 50,000 16,688 $29,992(3) 50,000
Investment 1997 292 none none none 25,000
Officer
</TABLE>
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9
<PAGE>
(1) The proceeds of these bonus amounts, after payment of applicable
income taxes, were applied by the receipients to the repayment of
loans incurred in connection with the acquisition by such receipients
of Common Shares of the Company.
(2) Dollar amount shown equals the number of shares of restricted stock
granted multiplied by the stock price on the date of grant. This
valuation does not take into account the any discount attributable to
the restrictions applicable to the shares.
(3) The shares vest over a period of five years and are subject to
forfeiture if the recipient's employment with the Company is
terminated at any time in the four-year period following the date of
grant, except if such termination is "without cause" or due to a
"change in control" of the Company, as those terms are defined in the
1996 Plan.
OPTIONS GRANTED DURING THE YEAR ENDED DECEMBER 31, 1999
No options were granted during the year ended December 31, 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST
YEAR AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Shares Number of Securities Underlying In-the-Money Options at
Acquired on Value Unexercised Options at FY-End FY-End ($) Exercisable/
Name Exercise Realized Exercisable/Unexercisable Unexercisable
---- ----------- -------- ------------------------------- ------------------------
<S> <C> <C> <C> <C>
Damon Navarro 0 0 173,369/34,044 541,888/80,004
Joseph LaBrosse 0 0 109,294/50,534 315,153/135,004
Edmund Navarro 0 0 171,969/34,044 536,527/80,004
Brian Navarro 0 0 171,969/34,044 536,527/80,004
Munawar Cheema 0 0 41,667/33,333 114,167/94,583
</TABLE>
Employment Agreements
Grove has entered into an employment agreement with each Named Executive
Officer (other than Munawar Cheema) (the "Employment Agreements"). The annual
base salary for each Executive Officer who is a party to an Employment Agreement
is $100,000.
The Employment Agreements provide that the Executive Officers will devote a
substantial part of their business time to the operations of Grove. The
Employment Agreements establish the base salaries set forth above and provide
for an initial three-year term for each of the Executive Officers. The term of
each 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 will not be extended. If the 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 defined therein), such
Executive Officer will be entitled to a lump sum payment equal to 200% 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.
10
<PAGE>
During 1998, in order to facilitate the acquisition of Common Shares by the
Named Executive Officers, the Company approved a three-year bonus program which,
subject to the financial and other results of the Company, would provide, on an
after tax basis, all or a substantial portion of the amounts used by the Named
Executive Officers in purchasing the Company's Common Shares. Under the terms of
such three-year bonus program, in the event that any Named Executive Officer is
terminated as a direct result of a Change in Control (as defined in the 1996
Plan), the bonuses payable to such named Executive Officer shall become payable
in a lump sum as of the date of such Named Executive Officer's termination.
Based on the Company's results, the Board and the Compensation Committee
approved the payment of the balance of these bonuses not later than January 1,
2001.
Non-Competition Agreements
Grove has entered into a non-competition agreement with each Named
Executive Officer (other than Munawar Cheema) (the "Non-Competition
Agreements"). The Non-Competition Agreement of each Named Executive Officer
precludes him from directly or indirectly developing, redeveloping, acquiring,
managing or operating multi-family or retail mixed-use properties, other than
certain properties set forth in the Non-Competition Agreements, which compete
with properties owned by Grove or with properties acquired by Grove in the
future 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 such Executive Officer in the event of a "change in control"
or "for good reason" (as defined therein). Except for the Named Executive
Officers (other than Munawar Cheema) and Gerald A. McNamara, no other Trust
Manager had an interest in any of the Grove Companies and will not be bound by
the Non-Competition Agreements.
REPORT OF THE COMPENSATION COMMITTEE
The Company's executive compensation program is intended to attract, retain
and reward experienced, highly motivated executives who contribute to the
Company's growth. The Compensation Committee of the Board is currently composed
of two Independent Trust Managers. The Compensation Committee is responsible for
setting base salaries for the Named Executive Officers. For each of the Named
Executive Officers other than Munawar Cheema, base salaries are currently fixed
by the Employment Agreements between the Company and each of these Named
Executive Officers, including the Chief Executive Officer. Mr. Cheema's base
salary was fixed by the Chief Executive Officer prior to Mr. Cheema's becoming a
Named Executive Officer in late 1998. Adjustments to Mr. Cheema's base salary
were thereafter determined by the Compensation Committee. The Compensation
Committee also determines awards under, and administers, the 1994 Plan and the
1996 Plan.
During 1997, the Compensation Committee approved the salaries paid to the
Named Executive Officers other than Mr. Cheema under Employment Agreements which
became effective upon completion of the Company's reorganization of its
operations in March 1997. Prior to March 1997, the Company did not pay cash
compensation to the Named Executive Officers. The salaries of $50,000 per year
then payable to Messrs. D. Navarro, LaBrosse, E. Navarro and B. Navarro
reflected the Compensation Committee's evaluation of the expense which the
Company could reasonably bear at that time and took into consideration the
substantially expanded role of the Named Executive Officers following
consummation of that reorganization.
In connection with the completion of the Company's underwritten public
offering in November 1997, the Compensation Committee approved amendments to the
Employment Agreements with the Named Executive Officers (other than Mr. Cheema)
increasing the base salary of each to $100,000 per year. The Compensation
Committee believed that this adjustment was appropriate to reflect more
accurately the contributions of the Named Executive Officers to the Company as
the Company continued to grow. The Compensation Committee also concluded, based
on a review of base salaries in the Company's industry, that
11
<PAGE>
increased base salaries for the Named Executive Officers (other than Mr. Cheema)
would be necessary for the Company to remain competitive in attracting and
retaining talented executives.
The Compensation Committee also believes that the granting of stock options
or sharer of restricted stock to the Named Executive Officers, including the
Chief Executive Officer, or otherwise facilitating their increased ownership of
Common Shares of the Company, benefits the Company's shareholders generally by
tying a significant portion of an Executive Officer's long-term compensation and
economic success to the market value of the Company's Common Shares and,
therefore, to the interests of its shareholders. After consultation with
independent compensation consultants, the Compensation Committee concluded that
a significant increase in compensation for the Named Executive Officers for 1999
was appropriate, taking into account such factors as the success of the
Company's acquisition program which resulted in more than doubling the assets of
the Company between January 1, 1998 and December 31, 1998 and the financial
performance of the Company for 1999.
During 1998, the Compensation Committee (or the Compensation Committee
together with the Board of Trust Managers) approved various transactions
designed not only to provide compensation to the Named Executive Officers but
also to increase their equity interest in the Company. These actions included
the grant of restricted stock awards under the 1996 Plan, the grant of options
under the 1996 Plan and the private sale of Common Shares to the Named Executive
Officers. To facilitate the acquisition of Common Shares by the Named Executive
Officers either directly from the Company or in open market purchases, the
Compensation Committee approved a three-year bonus program which, subject to the
financial and other results of the Company, would provide on an after-tax basis
all or a substantial portion of the amounts used by the Named Executive Officers
in purchasing the Company's Common Shares. The amounts used by the Named
Executive Officers in acquiring shares were either borrowed by the Named
Executive Officers from a bank with the borrowings guaranteed by the Company or
borrowed from the Company. Based on the Company's results since this bonus
program was authorized, the Board and the Compensation Committee approved the
payment of the balance of these bonuses not later than January 1, 2001.
The Compensation Committee intends to continue its review of the
compensation of the Named Executive Officers and will make such modification in
its approach to executive compensation as it determines to be appropriate in
light of the Company's financial performance, changes in the size of the
Company, the performance of its officers and executive compensation practices of
its peer group.
COMPENSATION COMMITTEE
J. Joseph Garrahy
Harold V. Gorman
12
<PAGE>
PERFORMANCE GRAPH
The line graph below sets forth the cumulative total shareholder return on
the Common Shares as compared with the cumulative total return of the American
Stock Exchange ("AMEX") Market Value Index and the NAREIT Equity REIT
Index-Apartments, in each case (i) for the five years ended on December 31,
1999, and (ii) assuming that $100 was invested on December 31, 1994 and that all
dividends were reinvested.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
12/31/94 1995 1996 1997 1998 1999
-------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Grove Property Trust 100.00 118.86 144.56 210.36 242.22 289.86
NAREIT Equity REIT Index - Apartments 100.00 112.26 144.75 167.96 153.22 169.66
AMEX Market Value Index 100.00 126.42 135.50 157.86 158.87 202.22
- -----------------------------------------------------------------------------------------------------
</TABLE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board has appointed the firm of Ernst & Young LLP to audit the
financial statements of the Company for the year ending December 31, 2000. Ernst
& Young LLP served as the Company's independent public accountants for the year
ended December 31, 1999. 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
13
<PAGE>
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.
- --------------------------------------------------------------------------------
The Board recommends that you vote FOR the proposed ratification of
appointment of Ernst & Young LLP as independent public accountants for the
Company for the year ending December 31, 2000.
- --------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that Grove's
Executive Officers and Trust Managers, 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. Trust
Managers, 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 Forms 5 were
required for those persons, Grove believes that all Section 16(a) filings
required to be filed in respect of 1999 by its Executive Officers, Trust
Managers and greater-than-ten-percent beneficial owners were timely made.
However, J. Joseph Garrahy failed to file a Form 4 with respect to one
transaction in 1998.
SHAREHOLDER PROPOSALS
Proposals of Shareholders intended to be present at the Annual Meeting of
Shareholders to be held in 2001 must be received by the Secretary of Grove at
Grove's principal executive office no later than January 8, 2001, 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 year ended December 31, 1999, 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 Trust Managers, 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. In addition, the Company has
retained Corporate Investor Communications, Inc. to assist in the solicitation
of proxies at a fee estimated to be $4,500.
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. Because the
Company did not receive notice by April 19, 2000 of any matter proposed to be
brought before the Annual meeting by any Shareholder, if any such matter
properly comes before the Annual Meeting, the persons named in the accompanying
form of Proxy intend to vote the proxies in accordance with their best judgment.
14
<PAGE>
DETACH HERE
GROVE PROPERTY TRUST
PROXY The undersigned hereby appoints Damon D. Navarro and Joseph
R. LaBrosse, and each of them, as proxies, with full power of
substitution in each, to vote the shares of Grove Property
Trust (the "Company") of the undersigned at the Annual
Meeting of the Shareholders to be held on Friday, June 16,
2000 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.
- ----------------- ----------------
SEE REVERSE SIDE (CONTINUED AND TO BE SIGNED ON REVERSE SIDE) SEE REVERSE SIDE
- ----------------- ----------------
<PAGE>
DETACH HERE
|X| Please mark
votes as in
this
example.
This proxy is solicited by the Board of Trust Managers 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 Items 1 and 2.
1. Election of three Trust Managers, each to serve until the annual meeting
of the Company's shareholders to be held in 2003.
Nominees: Harold V. Gorman,
Damon D. Navarro, and
J. Timothy Morris
FOR WITHHELD
ALL NOMINEES FROM ALL
NOMINEES
|_| |_|
|_|
------------------------------
For all nominees except as
noted above
FOR AGAINST ABSTAIN
2. The ratification of the
appointment of Ernst & |_| |_| |_|
Young LLP as the Company's
independent public
accountants for the year
ending December 31, 2000.
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 Trust Managers at present knows of no other formal business to be
brought before the meeting.
MARK HERE FOR MARK HERE IF YOU
ADDRESS CHANGE AND |_| PLAN TO ATTEND THE |_|
NOTE AT LEFT MEETING
Please sign exactly as name(s) appear(s) hereon. If shares are registered in the
names of two or more persons, each should sign. Executors, administrators,
trustees, guardians, attorneys-in-fact, general partners and other persons
acting in a representative capacity, should add their title. When the proxy is
given by a cooperation, it should be signed by an authorized officer.
Signature Date , 2000
------------------------------ -------
Signature Date , 2000
------------------------------ ------
