ILM I LEASE CORPORATION
Dear Shareholder:
May 15, 1998
You are cordially invited to attend the Annual Meeting of Shareholders
to be held on Thursday, June 18, 1998 at 10:00 a.m. at The Waldorf-Astoria
Hotel, 301 Park Avenue, New York, New York 10022. The business to be conducted
at the meeting, which is set forth in the formal notice that follows, includes:
1. To elect three (3) directors to hold office until the 1999 Annual
Meeting;
2. To ratify the selection of Ernst & Young LLP as auditors of the
Company for the Fiscal Year ending August 31, 1998; and
3. To transact such other business as may properly come before the
Annual meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on May 15, 1998
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment or adjournments thereof.
At the Annual Meeting, management will review Fiscal 1997, report on
recent financial results and discuss expectations for the future. Directors and
management will be available to answer any questions from the floor.
The Company relies upon all shareholders to promptly execute and return
their proxies in order to avoid costly proxy solicitation. Therefore, in order
to save the Company the unnecessary expense of further proxy solicitation, I ask
that you promptly sign and return the enclosed proxy card in the envelope
provided. If you attend the Annual Meeting, as we hope you do, you may withdraw
your proxy at the Annual Meeting, and vote your shares in person from the floor.
Your vote is important to the Company.
Sincerely,
ILM I LEASE CORPORATION
J. William Sharman, Jr.
President
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<PAGE>
May 15, 1998
LETTER TO SHAREHOLDERS,
NOTICE
and
PROXY STATEMENT
for the
ANNUAL MEETING
Of
SHAREHOLDERS
June 18, 1998
ILM I LEASE CORPORATION
28 State Street
Suite 1100
Boston, MA 02109
2
<PAGE>
ILM I LEASE CORPORATION
May 15, 1998
Notice of Annual Meeting of Shareholders
To be Held on Thursday, June 18, 1998
The Annual Meeting of Shareholders of ILM I Lease Corporation. will be held at
The Waldorf-Astoria Hotel, 301 Park Avenue, New York, New York 10022 on
Thursday, June 18, 1998, at 10:00 a.m. for the following purposes:
1. To elect three (3) directors to hold office until the 1999 Annual
Meeting;
2. To ratify the selection of Ernst & Young LLP as auditors of the
Company for the Fiscal Year ending August 31, 1998; and
3. To transact such other business as may properly come before the
Annual meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on May 15, 1998 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment or
adjournments thereof.
The holders of shares of Common Stock of record at the close of business on May
15, 1998 are entitled to vote at the meeting. If you are present at the meeting,
you may vote in Person even though you have previously delivered your proxy.
By Order of the Board of Directors
Jeffry Dwyer
Secretary
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR
PROXY AND VOTE IN PERSON.
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<PAGE>
ILM I LEASE CORPORATION.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 15, 1998
General
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of ILM I Lease Corporation (the "Company") for the Annual Meeting of
Shareholders to be held at The Waldorf-Astoria Hotel, 301 Park Avenue, New York,
New York 10022, at 10:00 a.m. on Thursday, June 18, 1998 (the "Annual Meeting").
The Proxy may be revoked at any time prior to voting thereof by notifying the
persons named therein of intention to revoke or by conduct inconsistent with
continued effectiveness of the Proxy, such as delivery of a later dated Proxy or
appearance at the Annual Meeting and voting in person the shares to which the
Proxy relates. Shares represented by executed Proxies will be voted, unless a
different specification is made therein, FOR election to the Board of Directors
of the persons identified therein as nominees for director, and FOR each
proposition identified therein.
This Proxy Statement and the enclosed Proxy were mailed on or about May
15, 1998 to shareholders of record at the close of business on May 15, 1998 (the
"Record Date"). The Company has mailed each shareholder of record as of the
Record Date an Annual Report that includes audited financial statements for the
fiscal year ended August 31, 1997.
The Company has one class of securities, a voting common stock (the
"Common Stock"). The holders of a majority of the shares outstanding and
entitled to vote that are present at the Annual Meeting in person or represented
by proxies will constitute a quorum. The affirmative vote of a majority of the
shares represented at the Annual Meeting is required to elect a nominee to the
Board of Directors and to approve each other proposition identified in the Proxy
Statement. In the event that none of the nominees for Director are elected at
the Annual Meeting, the existing members of the Board of Directors will continue
to serve until their successors qualify as Directors. At the close of business
on the Record Date, the Company had 7,519,430 shares outstanding and entitled to
vote. Each share has one vote on all matters, including those to be acted upon
at the Annual Meeting.
The mailing address of the Company is c/o Investor Services Department,
P.O. Box 7090, Troy, MI 48007. Notices of revocation of Proxy should be sent to
that address. Questions concerning the Annual Meeting can be answered by calling
the Company's Investor Services Department, toll free, at 888-257-3550.
The Company will provide shareholders, without charge, a copy of the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended August 31, 1997, including the financial
statements and schedules thereto, on written request to Jeffry Dwyer, Secretary
of the Company, at the Company's mailing address: Investor Services Department,
P.O. Box 7090, Troy, MI 48007.
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<PAGE>
Ownership of Equity Securities
"Beneficial ownership" as used herein has been determined in accordance
with the rules and regulations of the Securities and Exchange Commission and is
not to be construed as an admission that any of such shares are in fact
beneficially owned by any person. As of the Record Date, there are no
shareholders known to the Company who own beneficially 5% or more of the
outstanding shares of the Company's Common Stock.
As of May 15, 1998, the following is the beneficial ownership of the
Directors and nominees for Director individually and for Directors and executive
officers of the Company as a group in the Company's Common Stock.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial
Name and Address Title Ownership Percent of Class
- ----------------------------------- ----------------------------- ------------------ ----------------
<S> <C> <C> <C>
J. William Sharman, Jr. President and Chief Executive None N/A
Officer, Director and Nominee
for Director
Lawrence A. Cohen Director None N/A
John B. Watts III Director None N/A
Jeffry R. Dwyer Secretary, Director and Nominee None N/A
for Director
Julien G. Redele Nominee for Director None N/A
Directors and Executive Officers
of Company as a group
None N/A
</TABLE>
Compliance With Exchange Act Filing Requirements
The Securities Exchange Act of 1934 requires the officers and Directors
of the Company, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file certain reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC").
Officers, Directors and ten percent beneficial holders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms received by it,
the Company believes that during the year ended August 31, 1997, all filing
requirements applicable to its officers, Directors and ten percent beneficial
holders were complied with.
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Terms of Solicitation
D.F. King & Co., Inc. has been retained by the Company to assist in
soliciting proxies. It is anticipated that fees and expenses paid to D.F. King &
Co., Inc. in connection with this process will be approximately $5000. The cost
of solicitation will be borne by the Company.
ELECTION OF DIRECTORS
(Proposal 1)
At the Annual Meeting three Directors are to be elected to the Board of
Directors, each to hold office until the next Annual Meeting of Shareholders and
until his successor is duly elected and qualified, except in the event of death,
resignation or removal. Unless otherwise specified, proxies solicited hereby
will be voted for the election; discretionary authority may be exercised to vote
for a substitute. No circumstances are presently known that would render any
nominee named herein unavailable. All of the nominees are existing members of
the Board of Directors.
Information Concerning Nominees
The nominees, their ages, the year of election of each to the Board of
the Company, their principal occupations during the past five years or more, and
Directorships of each in public companies in addition to the Company, are as
follows:
J. William Sharman, Jr. (age 58) is a Director of the Company and has
held such position since he was elected as of June 9, 1989. Mr. Sharman is also
a Director of ILM Senior Living, Inc., and ILM II Senior Living, Inc., and the
current President and a Director of ILM II Lease Corporation. Mr. Sharman is the
Chairman of the Board and President of Lancaster Hotels and Resorts, Inc., a
hotel management company, and Bayou Equities, Inc., a real estate development
company. Mr. Sharman served for ten years as Chairman of the Board and President
of the Lancaster Group, Inc., a real estate development firm based in Houston,
Texas. Mr. Sharman is also a Director of Small Luxury Hotels Ltd. of the United
Kingdom, an international hotel marketing and reservations firm. He has a
Bachelor of Science degree in Civil Engineering from the University of Notre
Dame.
Jeffry R. Dwyer (age 51) is a Director of the Company and has held such
position since he was elected as of June 9, 1989. Mr. Dwyer is also a Director
of ILM Senior Living, Inc., ILM II Senior Living, Inc., ILM II Lease Corporation
and ING U.S. - Residential Real Estate Investment Company, Inc. Mr. Dwyer has
been a shareholder of the law firm of Greenberg Traurig Hoffman Lipoff Rosen &
Quentel since 1997, and from 1993 to 1997 was a partner with the law firm of
Akin, Gump, Straus, Hauer & Feld, L.L.P., in the District of Columbia, which he
joined in 1993. Immediately prior to joining Akin, Gump, Straus, Hauer & Feld,
L.L.P, Mr. Dwyer was a partner with the law firm of Morrison & Foerster in the
District of Columbia from 1989 to 1993. Prior to joining Morrison & Foerster,
Mr. Dwyer was a partner with the law firm of Lane & Edson. Mr. Dwyer has written
several books on real estate financing and taught Real Estate Planning as an
Adjunct Professor at the Georgetown University Law Center.
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<PAGE>
Julien G. Redele (age 62) was appointed to fill a newly created seat on
the Company's Board of Directors as of December 5, 1996. Following the date of
the Annual Meeting, Mr. Redele will become Chairman of the Board, President and
Chief Executive Officer of the Company and of ILM II Lease. Mr. Redele is one of
the original founders of SFRE, Inc., a Dutch owned real estate investment and
development firm which has served since 1963 as advisor to Dutch institutional,
corporate and individual investors active in the United States. Mr. Redele
serves as a director of the Island Preservation Partnership. Mr. Redele attended
Westersingel Business School, Rotterdam, where he studied economics, law and
finance. Mr. Redele also presently serves as a director of ILM Senior Living,
Inc. and ILM II Senior Living, Inc., but he is not standing for reelection as a
Director of either of those companies.
Board Meetings During Fiscal 1997
During fiscal 1997, the Board of Directors held eight meetings. No
Director attended less than 75'% of the meetings of the Board.
Legal Proceedings
None of the Directors or officers of the Company are involved in legal
proceedings which are material to an evaluation of his or her ability or
integrity as a Director or officer other than that described below.
On July 29, 1996, the Company and ILM Holding, Inc. ("ILM Holding"), a
subsidiary of ILM Senior Living, Inc. ("ILM 1") (collectively for this
discussion, with ILM I and ILM Holding, the "Companies") terminated the property
management agreement ("Agreement") with Angeles Housing Concepts, Inc. ("AHC")
covering the eight senior housing facilities (the "Senior Housing Facilities")
then leased by the Companies. Such Agreement was terminated for cause pursuant
to Sections 1.05(a)(i), (iii) and (iv) of the Agreement. Simultaneously with the
termination of the Agreement, the Companies, together with certain affiliated
entities, filed suit against AHC in the United States District Court for the
Eastern District of Virginia for breach of contract, breach of fiduciary duty
and fraud (the "Virginia litigation"). In November 1996, AHC filed with the
Virginia District Court an Answer in response to the litigation initiated by the
Companies and a Counterclaim against ILM Holding. The Counterclaim alleges that
the Agreement was wrongfully terminated for cause and requested damages which
include the payment of the termination fee in the amount of $1,250,000, payment
of management fees pursuant to the Agreement from August 1, 1996 through October
15, 1996, which is the earliest date that the Agreement could have been
terminated without cause, and recovery of attorney's fees and expenses. The
aggregate amount of damages against all parties as requested in AHC's
Counterclaim exceeds $2,000,000. ILM 1 has guaranteed the payment of the
termination fee at issue in these proceedings to the extent that any termination
fee is deemed payable by the court and in the event that the Company fails to
perform pursuant to its obligations under the Agreement. On June 13, 1997 and
July 8, 1997, the court issued orders purporting to enter judgment against ILM 1
and ILM II Senior Living Inc. ("ILM2") in the amount of $1,000,000 (the
"Orders"). On July 10, 1997, the Company, ILM 1, Lease II and ILM 2 filed a
notice of appeal to the United States Court of Appeals for the Fourth Circuit
from the Orders.
On February 4, 1997, AHC filed a complaint in the Superior Court of the State of
California against Capital Senior Living, Inc., an affiliate of Capital Senior
Management 2, Inc. ("Capital"),
7
<PAGE>
the Company's property manager, Lawrence A. Cohen, a director and the President
and Chief Executive Officer of each of ILM 1 and ILM 2, and others alleging that
the defendants intentionally interfered with AHC's Agreement (the "California
litigation"). The complaint sought damages of at least $2,000,000. On March 4,
1997, the defendants moved the case to Federal District Court in the Central
District of California. At a Board meeting on February 26, 1997, the Board of
Directors of each of ILM 1 and ILM 2 concluded that since all of Mr. Cohen's
actions relating to the California litigation were taken either on behalf of
each of ILM 1 and ILM 2 under the direction of the Board or as a PaineWebber
employee, the Company or its affiliates should indemnify Mr. Cohen with respect
to any expenses arising from the California litigation, subject to any insurance
recoveries for those expenses. The Board of each of ILM 1 and ILM 2 also
concluded that, subject to certain conditions, each of ILM 1 and ILM 2 or its
affiliates should advance up to $20,000 to pay reasonable legal fees and
expenses incurred by Capital in the California litigation. Subsequently, the
boards of directors of the Company and Lease II voted to increase the maximum
amount of the advance to Capital to $100,000. By the end of November 1997,
Capital had incurred $100,000 of legal expenses in the California litigation. On
February 2, 1998, the amount to be advanced to Capital was increased to include
75% of the California litigation legal fees and costs incurred by Capital for
December 1997 and January 1998, plus 75% of cash legal fees and costs incurred
by Capital thereafter, not to exceed $500,000. The Company intends to
vigorously defend its interests in the Virginia Litigation.
Related Transactions
Through June 18, 1997, and subject to the supervision of the Company's
Board of Directors, assistance with the management of the business of the
Company was provided by PaineWebber.
Under the advisory agreement, PaineWebber had specific management
responsibilities: to perform day-to-day operations of the Company and to act as
the investment advisor and consultant for the Company in connection with general
policy and investment decisions. PaineWebber received a fee in an amount equal
to 0.5% of the gross operating revenue of the facilities. PaineWebber earned
management fees totalling $70,000 and $86,000 for the years ended August 31,
1997 and 1996, respectively. PaineWebber was reimbursed for direct expenses
relating to the administration of the Company. PaineWebber performed certain
accounting, tax preparation, securities law compliance and investor
communications and relations services for the Company. Included in general and
administrative expenses for the year ended August 31, 1997 and 1996 are $80,000
and $73,000, respectively, representing reimbursement to PaineWebber for
providing such services to the Company. The Company, ILM I, ILM 2 and their
affiliates accepted the resignation of PaineWebber effective as of June 18,
1997. The Company, ILM 1, ILM 2 and their affiliates and PaineWebber entered
into a transaction services agreement pursuant to which PaineWebber would
continue to provide certain administrative services to the Company, ILM 1, ILM 2
and their affiliates through August 31, 1997.
The Company retained Capital to be the manager of the senior housing
facilities leased by the Company from a subsidiary of ILM 1 (the "Senior Housing
Facilities") pursuant to a Management Agreement which commenced on July 29,
1996. In November 1996, Lawrence A. Cohen, a Director of the Company and
President, Chief Executive Officer and Director of ILM 1
8
<PAGE>
and ILM 2, became Vice Chairman and Chief Financial Officer of Capital Senior
Living Corporation, an affiliate of Capital. As a result, the Management
Agreement with Capital is considered a related party transaction. Under the
terms of the Management Agreement, Capital will earn a base management fee equal
to 4% of the gross operating revenues of the Senior Housing Facilities, as
defined. Capital will also be eligible to earn an incentive management fee equal
to 25% of the amount by which the average monthly net cash flow of the Senior
Housing Facilities, as defined, for the twelve month period ending on the last
day of each calendar month exceeds a specified base amount. Each August 31,
beginning on August 31, 1997, the base amount will be increased annually based
on the percentage increase in the consumer price index. ILM 1 has guaranteed the
payment of all fees due to Capital under the terms of the Management Agreement.
Capital earned total management fees of $841,000 and $75,000 for the years ended
August 31, 1997 and 1996, respectively. On September 18, 1997, the Company
entered into an agreement with Capital Senior Development, Inc., an affiliate of
Capital, to manage the Facilities. Capital Senior Development, Inc. will receive
a fee equal to 7% of the total Development Costs of these expansions if they are
pursued. ILM I will reimburse the Company for all costs related to these
potential expansions, including fees to Capital Senior Development, Inc. During
the quarter ended November 30, 1997, Capital Senior Development, Inc. earned
fees of $96,810 for managing pre-construction development activities for
potential expansions of the Senior Housing Facilities.
Jeffry R. Dwyer is an employee of Greenberg Traurig Hoffman Lipoff
Rosen & Quentel, P.A., which acts as Counsel to the Company and its affiliates.
Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., received fees from the
Company of $46,000 for the year ended August 31, 1997.
Each Director of the Company, other than Mr. Watts, is a Director of
ILM 1, the company that, through its subsidiary, owns the Senior Housing
Facilities.
Board Committees
The Company has no standing committees of its Board of Directors.
Compensation of Directors and Executive Officers
The Company's Directors each receive an annual fee of $9,000 plus $500
for attending each board of directors meeting and reimbursement for expenses
incurred in attending meetings, and as a result of other work performed for the
Company. After the date of the Annual Meeting all Directors will receive an
annual fee of $12,000, plus $500 for attending each Board of Directors meeting,
as well as reimbursement for expenses incurred in attending meetings and other
compensation as a result of other work performed for the Company. Officers of
the Company are not compensated. Despite an increase in annual Directors'
compensation from $9,000 to $12,000 per annum, by reducing the number of
Directors from four to three the Company has maintained aggregate Directors'
compensation at $36,000 per annum. At the same time, by eliminating one Director
the Company will save $500 in attendance fees per Board meeting, plus reduce its
expense reimbursements for meeting attendance. Lawrence A. Cohen, a Director of
the Company through the date of the Annual Meeting, is an employee of Capital
Senior Living Corporation, an affiliate of Capital. Jeffry R. Dwyer is an
employee of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., which acts
as Counsel to the Company. The former officers of the Company, who were also
officers of PaineWebber, received compensation from PaineWebber which indirectly
related to services to the Company, because the Company was required to pay
certain fees to PaineWebber as described in "Related Transactions," above. When
PaineWebber resigned as advisor to the Company, the former officers resigned
effective
9
<PAGE>
the same date. Therefore, no services have been provided by such persons
subsequent to June 18, 1997. Following the date of the Annual Meeting, Julien G.
Redele will become the President, Chief Executive Officer and Chairman of the
Board of the Company.
Comparative Stock Performance Graph
The following performance graph compares the cumulative total
shareholder return on the Company's ("ILM I Lease") stock for the period
commencing on November 30, 1995 and terminating on August 31, 1997 with the
cumulative total returns on the SIC Code Index for companies engaged in the same
line of business as the Company ("SIC Code Index") and the Standard and Poor's
500 Stock Index ("S&P 500") over the same period. The comparison assumes that
the value of the investments in common stock of ILM I Lease, SIC Code Index and
S&P 500 were $100 at November 30, 1995 and that all dividends were reinvested;
provided, no dividends have been declared and paid by the Company. Historical
comparisons are not necessarily indicative of future performance, as ILM I Lease
stock has had limited public trading to date. Due to such limited trading
history, in order to prepare the following performance graph, the values of ILM
I Lease stock used are based on appraisals of the value of ILM I Lease stock
prepared for the Company as of December 31, 1995 (used for the value at November
30, 1995) and December 31, 1996 (used for the value at both August 31, 1996 and
1997). Such appraisals represent the values of cash reserves at the instant
dates plus the discounted then present values of anticipated earnings after
income taxes through the expected term of the Company's existence.
10
<PAGE>
COMPARATIVE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG ILM I LEASE CORPORATION,
S&P 500 INDEX AND SIC CODE INDEX
ASSUMES $100 INVESTED ON NOV. 30, 1995
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING AUG. 31, 1997
[LINE REPRESENTATION OF GRAPH]
<TABLE>
<CAPTION>
- --------------------------- --------------- ---------------- ----------------
<S> <C> <C> <C>
1995 1996 1997
- --------------------------- --------------- ---------------- ----------------
ILM II Lease 100.00 89.47 89.47
- --------------------------- --------------- ---------------- ----------------
SIC Code 100.00 160.92 167.72
- --------------------------- --------------- ---------------- ----------------
S&P 500 100.00 109.53 154.05
- --------------------------- --------------- ---------------- ----------------
</TABLE>
11
<PAGE>
RATIFICATION OF AUDITORS
(Proposal 2)
The Board of Directors has designated Ernst & Young LLP as the
Company's independent auditors for fiscal 1998. This firm has audited the
Company's financial statements since the Company's inception. A representative
of Ernst & Young LLP is expected to be available during the meeting to respond
to appropriate questions.
Ernst & Young LLP's principal function is to audit the consolidated
financial statements of the Company and in connection with that audit to review
certain related filings with the Securities and Exchange Commission.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF RATIFICATION OF
THE DESIGNATION OF ERNST & YOUNG LLP AS THE COMPANY'S AUDITORS FOR THE FISCAL
YEAR ENDING AUGUST 31, 1998.
OTHER BUSINESS
While management of the Company does not know of any matters which may
be brought before the Meeting other than as set forth in the Notice of Meeting,
the Proxy confers discretionary authority with respect to the transaction of any
other business. It is expected that the proxies will be voted in support of
management on any question that may properly be submitted to the meeting.
MATTERS TO BE PRESENTED AT THE
1998 ANNUAL MEETING OF SHAREHOLDERS
Any qualified shareholder wishing to make a proposal to be acted upon
at the Annual Meeting of Shareholders in 1999 must submit such proposal, to be
considered by the Company for inclusion in the proxy statement, to the Company
at its principal office, 28 State Street, Suite 1100, Boston, MA 02109, by no
later than January 16, 1999.
OTHER MATTERS
As of the date of this statement, the management of the Company knows
of no matters other than those stated above likely to be brought before the
Annual Meeting. However, if any matters not now known come before the Annual
Meeting, the persons named in the enclosed proxy are expected to vote the shares
represented by such proxy on such matters in accordance with their best
judgment.
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<PAGE>
THE COMPANY DEPENDS UPON ALL SHAREHOLDERS PROMPTLY SIGNING AND RETURNING THE
ENCLOSED PROXY TO AVOID COSTLY SOLICITATION. YOU CAN SAVE THE COMPANY
CONSIDERABLE EXPENSE BY SIGNING AND RETURNING YOUR PROXY AT ONCE.
By Order of the Board of Directors
Jeffry Dwyer
Secretary
13
<PAGE>
PLEASE VOTE - YOUR VOTE IS IMPORTANT
ILM I LEASE CORPORATION Many shareholders may think their votes are not
Needs important. On the contrary, they are vital. If a quorum
Your Proxy Vote is not present in person or by proxy at the Annual
Before Meeting, the Company will have to continue to solicit
June 16, 1998 votes until a quorum is obtained. Your vote, then,
could be critical in allowing the Company to conduct
the business at hand, so please return your proxy card
as soon as possible. All Shareholders will benefit from
your cooperation. Thank you.
ILM I Lease Corporation
28 State Street
Suite 1100
Boston, MA 02109
14
<PAGE>
This Proxy is Solicited on Behalf of the Board of Directors of
ILM I LEASE CORPORATION
28 State Street, Suite 1100
Boston, MA 02109
The undersigned hereby appoints Jeffry Dwyer and J. William Sharman, Jr., or
either of them, with full power of substitution in each, Proxies, to vote all
shares of Common Stock of ILM I LEASE CORPORATION held of record by the
undersigned on May 15, 1998 at the Annual Meeting of Shareholders (the
"Meeting") to be held on June 18, 1998 at 10:00 a.m., or any continuation or
adjournment thereof.
1. ELECTION OF DIRECTORS
|_| FOR all nominees listed |_| WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees
the contrary below) listed below
(Instruction: To withhold authority to vote for any individual nominee,
strike such nominee's name from the list below.)
JULIEN G. REDELE JEFFRY R. DWYER J. WILLIAM SHARMAN, JR.
2. RATIFICATION OF AUDITORS. For ratification of the designation of Ernst &
Young LLP as the Company's auditors for the fiscal year ending August 31, 1998.
|_| FOR |_| AGAINST |_| ABSTAIN
3. In their discretion the Proxies are authorized to vote upon such other
business, and matters incidental to the conduct of the Meeting, as may properly
come before the Meeting.
|_| FOR |_| AGAINST |_| ABSTAIN
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1 AND 2.
Dated:_______________________________________________________
PROXY NUMBER When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or
SHARES guardian, please give full title as such. If a corporation,
please sign in full corporate name by the President or other
authorized officer. If a partnership please sign in
partnership name by authorized person.
Please sign exactly as name appears to the left
_____________________________________________________________
Signature
_____________________________________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE, or send to ILM I Lease Corporation, Investor Services Department,
P.O. Box 7090, Troy, MI 48007
