proxy_statement.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934
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 §240.14a-12
American
Community Properties Trust
________________________________________________________________
(Name of
Registrant as Specified In Its Charter)
________________________________________________________________
(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:
|
|
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:
|
|
[ ]
|
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.:
|
AMERICAN
COMMUNITY PROPERTIES TRUST
222
SMALLWOOD VILLAGE CENTER
ST.
CHARLES, MD 20602
May 15, 2008
Dear
Shareholders:
On behalf of the officers and trustees
of American Community Properties Trust (the "Company"), you are cordially
invited to attend the Company's Annual Meeting of Shareholders to be held at
10:00 a.m. EDT, on Wednesday, June 4, 2008, at the Holiday Inn, James Craik
Room, 45 St. Patrick's Drive, St. Charles, Maryland.
At the meeting, shareholders of the
Company will be asked to consider and act upon the election of five trustees;
three trustees to serve until 2011, one trustee to serve until 2010 and one
trustee to serve until 2009 as described in the accompanying Notice of Meeting
and Proxy Statement.
The trustees of the Company recommend
that all shareholders of the Company vote in favor of the proposal
presented. Your vote is important regardless of the number of shares
you own. We strongly encourage all shareholders of the Company to
participate by voting their shares by proxy whether or not they plan to attend
the meeting. Please sign, date and mail the enclosed proxy as soon as
possible. If you do attend the meeting, you may still vote in
person.
| Sincerely, |
| /s/ J.
Michael Wilson |
| J. Michael
Wilson |
| Chairman
and |
| Chief Executive
Officer |
AMERICAN
COMMUNITY PROPERTIES TRUST
222
SMALLWOOD VILLAGE CENTER
ST.
CHARLES, MD 20602
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD JUNE 4, 2008
TO THE
SHAREHOLDERS OF AMERICAN COMMUNITY PROPERTIES TRUST:
NOTICE IS HEREBY GIVEN that the Annual
Meeting of Shareholders of American Community Properties Trust (the "Company")
will be held on Wednesday, June 4, 2008, at 10:00 a.m. EDT at the Holiday Inn,
James Craik Room, 45 St. Patrick's Drive, St. Charles, Maryland, for the
following purposes:
|
(1)
|
To
elect five trustees of the Company; three to serve until the Annual
Meeting of Shareholders in 2011, one to serve until the Annual Meeting of
Shareholders in 2010, and one to serve until the Annual Meeting of
Shareholders in 2009; and
|
|
(2)
|
To
transact such other business as may properly come before the meeting or
any adjournments or postponements of the
meeting.
|
The Board of Trustees has fixed the
close of business on April 4, 2008 as the record date for the determination of
the shareholders entitled to notice of and to vote at the meeting and at any
adjournment or postponement of the meeting.
Shareholders are invited to attend the
meeting. Whether or not you expect to attend, we urge you to sign,
date and promptly return the enclosed proxy card in the enclosed postage prepaid
envelope. If you attend the meeting, you may vote your shares in
person, which will revoke any previously executed proxy.
If your shares are held of record by a
broker, bank or other nominee and you wish to attend the meeting, you must
obtain a letter from the broker, bank or other nominee confirming your
beneficial ownership of the shares and bring it to the meeting. In
order to vote your shares at the meeting, you must obtain from the record holder
a proxy issued in your name.
| By Order of
the Board of Trustees |
| /s/ Cynthia L.
Hedrick |
| Cynthia L.
Hedrick |
| Secretary |
St.
Charles, Maryland
May 15,
2008
AMERICAN
COMMUNITY PROPERTIES TRUST
222
SMALLWOOD VILLAGE CENTER
ST.
CHARLES, MD 20602
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
To
Be Held June 4, 2008
This proxy statement is furnished in
connection with the solicitation of proxies on behalf of the Board of Trustees
of American Community Properties Trust, a Maryland real estate investment trust
(the "Company" or "ACPT"), for the 2008 Annual Meeting of Shareholders of the
Company (the "2008 Annual Meeting") to be held at the Holiday Inn, James Craik
Room, 45 St. Patrick's Drive, St. Charles, Maryland on Wednesday, June 4, 2008
at 10:00 a.m. EDT. The Notice of the 2008 Annual Meeting, this proxy
statement and the accompanying proxy card are first being mailed on or about May
15, 2008 to holders of record of the Company's common shares ("Common Shares")
as of the close of business on April 4, 2008. You can ensure that
your shares are voted at the meeting by signing, dating and promptly returning
the enclosed proxy card in the envelope provided. Each share entitles
the registered holder to one vote. As of April 4, 2008, there were
5,229,954 Common Shares outstanding and entitled to vote at the 2008 Annual
Meeting. Sending in a signed proxy will not affect your right to
attend the meeting and vote in person. You may revoke your proxy at
any time before it is counted by notifying the Secretary of the Company in
writing, or by executing a subsequent proxy, which revokes your previously
executed proxy. Additionally, if you attend the meeting, you may vote
your shares in person, which will revoke any previously executed
proxy.
At the 2008 Annual Meeting,
shareholders will have the opportunity to elect five trustees; three trustees to
serve until the Annual Meeting in 2011, one trustee to serve until the Annual
Meeting in 2010 and one trustee to serve until the Annual Meeting in
2009. Shareholders will also have the opportunity to transact such
other business as may properly come before the meeting.
The Company's principal executive
offices are located at 222 Smallwood Village Center, St. Charles, Maryland,
20602.
VOTING
OF PROXIES
Proxies will be voted as specified by
the shareholders. Where specific choices are not indicated, proxies
will be voted FOR the election of all nominees for trustee. The
presence in person or by proxy of shareholders entitled to cast a majority of
all votes entitled to be cast at the 2008 Annual Meeting constitutes a
quorum. A properly executed proxy marked to withhold authority with
respect to the election of a trustee nominee will not be voted with respect to
such nominee, although it will be counted for purposes of determining whether
there is a quorum. Accordingly, "withhold authority" votes will have
the effect of a vote against the election of the nominee. The
election of trustees requires the affirmative vote of a majority of the Common
Shares outstanding and entitled to vote at the 2008 Annual
Meeting. Because none of the nominees currently serves as a trustee,
if any of them fails to win a majority, that nominee will not be
elected. Votes submitted by mail must be received on or before June
3, 2008.
ELECTION
OF TRUSTEES
At the 2008 Annual Meeting, the
shareholders will be voting for five trustees; three trustees to serve until the
Annual Meeting in 2011, one trustee to serve until the Annual Meeting in 2010
and one trustee to serve until the Annual Meeting in 2009. The three
nominees for election until the 2011 Annual Meeting are Donald J. Halldin, Eric
P. Von der Porten and Ross B. Levin. The nominee for election until
the 2010 Annual Meeting is Michael E. Williamson and the nominee for election
until the 2009 Annual Meeting is Thomas E. Green. Information
regarding the Board's nominees and the incumbent trustees whose terms expire in
2009 and 2010 is set forth below.
Pursuant to the Company's Bylaws, the
Board of Trustees consists of not less than three nor more than nine
trustees. In connection with its proposal of the nominees to be
considered at the 2008 Annual Meeting, the Board has adopted a resolution that
will increase the number of seats on the Board from six to seven, if three
nominees receive the requisite vote; eight, if four nominees receive the
requisite vote; or nine, if all of the nominees receive the requisite
vote. The Board of Trustees is divided into three classes, as nearly
equal in number as possible with each class serving staggered three-year
terms.
The accompanying proxy, if signed and
returned, will be voted for election of the Board's nominees unless contrary
instructions are given.
Recommendation of the Board
of Trustees
As previously disclosed, the family of
J. Michael Wilson, the Company’s Chairman and CEO, which holds a majority of the
outstanding Common Shares, explored during 2007 and 2008 a possible purchase of
the remaining outstanding Common Shares of the Company not owned by them in a
"going private" transaction. Despite the Wilson family’s consultant and
financial advisor approaching approximately 80 potential investors to provide
financing for such a transaction, no proposals materialized. In
addition the Wilson family and its advisors also approached companies with a
view to a strategic transaction involving the acquisition of all of the Common
Shares of the Company, including the Common Shares of the Wilson
family. Despite these efforts, no satisfactory indications of
interest in an acquisition were received, and the Wilson family subsequently
considered other strategic alternatives for the Company, including a possible
restructuring involving the separation of the Company’s land development assets
from its rental properties. In order to facilitate that
restructuring, the Wilson family offered to purchase the land development assets
from the Company in exchange for a portion of their existing Common
Shares. The Wilson family’s offer subsequently was withdrawn on April
15, 2008.
In connection with these efforts by the
Wilson family, the Company’s Board of Trustees had formed a special committee
comprised of each of its non-employee trustees. Following the
withdrawal of the Wilson family’s offer, and in light of the frequency, extent
and nature of discussions between Mr. Wilson and the special committee and their
respective advisors concerning these strategic alternatives and related
governance matters in which the interests of the special committee and the
Wilson family diverged, the members of the special committee, all of whom also
served on the Company’s Nominating and Corporate Governance Committee,
encouraged Mr. Wilson and his family, as majority shareholders, to recommend
nominees to replace the two incumbent members of the Board whose terms were set
to expire at the 2008 Annual Meeting.
Mr. Wilson and his family recommended
Messrs. Halldin, Green and Williamson as potential nominees. Mr.
Levin was recommended by Paul Isaac, the Company’s second largest shareholder;
Mr. Levin serves as an investment advisor to Mr. Isaac. Mr. Von der
Porten was identified by the members of the Nominating and Corporate Governance
Committee as a potential nominee. The members of the Board considered
the qualifications of all of the potential nominees and resolved that all five
persons be nominated for election at the 2008 Meeting.
THE
BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE ELECTION OF MR. HALLDIN, MR. VON DER
PORTEN, MR. LEVIN, MR. WILLIAMSON AND MR. GREEN AS TRUSTEES.
Nominees for Election to the
Board of Trustees for a Three-Year Term to Expire at the 2011 Annual Meeting of
Shareholders
Donald J. Halldin, 49, is the
co-founder of Meridian Capital Partners, a New York-based investment firm, and
has served as its Vice Chairman since January 2007 and President from July 1994
to January 2007. Mr. Halldin is also co-founder and Vice Chairman of Sage
Administrators LLC, CWS Securities LLC, Meridian Diversified Fund Management
LLC, Meridian Equipment Corp. Inc and Meridian Fund Management
LLC. Mr. Halldin has also been a member of The Managed Fund YogaPulse
Wellness LLC since 2007 and is also a member of The Managed Fund
Association.
Eric P. Von der Porten,
50. Since February 1997, Mr. Von der Porten has been the managing
member of Leeward Investments, LLC, an investment management firm in San Carlos,
California. He has more than 20 years of experience in financial services
and investing, with much of that experience focused on small capitalization
stocks and real estate investments. He has served as a director of Dynex
Capital, Inc. since May 2002. He earned an A.B. from the University of
Chicago and an M.B.A. from the Stanford Graduate School of
Business.
Ross B. Levin, 24, is the sole analyst
for Arbiter Partners LP, a $400 million investment partnership managed by Paul
J. Isaac. Mr. Levin has served Arbiter Partners LP since June
2005. Mr. Levin was an Equity Analyst for Burkenroad Reports from
August 2004 through April 2005 where he worked on a team responsible for
publishing an investment research report for a publicly traded sporting goods
retailer. Prior to that, Mr. Levin was an Agent for Hogan Group, Inc.
from May 2004 to March 2005 where he conducted land acquisition prospecting and
research for regional and national builders.
Nominee for Election to the
Board of Trustees for a Two-Year Term to Expire at the 2010 Annual Meeting of
Shareholders
Michael E. Williamson, 40, is the
President and Chief Operating Officer of Tropical, Inc. Canada/USA (“Tropical”),
a position he has held since January 1993. Tropical is a snack food
manufacturing and distribution company.
Nominee for Election to the
Board of Trustees for a One-Year Term to Expire at the 2009 Annual Meeting of
Shareholders
Thomas E. Green, 46, is the founder and
has served since April 2008 as Principal and CEO of Providence One
Partners. Prior to forming Providence One Partners, Mr. Green was the
Florida Market Officer of Colonial Properties Trust, a NYSE-listed real estate
investment trust, from September 1999 to April 2008. Mr. Green
is a member of the National Association of Industrial and Office Properties’
National Mixed-Use Forum. Mr. Green has served on the Executive Committee of
both the Economic Development Commission of Mid-Florida and the Seminole
Community College Foundation since 2005. He has served on the Board of Directors
of the Young President’s Organization Orlando Chapter since 2006 and the
Chairman of the Seminole County Regional Chamber of Commerce from
July 2004 to June 2005.
Members of the Board of
Trustees Continuing in Office with a Term to Expire at the 2009 Annual Meeting
of Shareholders
Antonio Ginorio, 65. Mr.
Ginorio has been a trustee of the Company since January 2001. Prior
to his retirement in 2000, he was a Senior Audit Partner in the San Juan Office
of PricewaterhouseCoopers, a globally-recognized public accounting firm, for 36
years. He has extensive audit experience in banking, manufacturing,
retail and real estate.
Edwin L. Kelly, 66. Mr.
Kelly has been a trustee of the Company since March 1997 and currently serves as
Vice Chairman, President and Chief Operating Officer of the
Company. Mr. Kelly has served as President and Chief Operating
Officer since July 1998. Mr. Kelly was President and Chief Operating
Officer of IGC and IGMC from 1997 to 1998. Prior to that, he served
as Senior Vice President and Treasurer of IGC and Senior Vice President of IGMC
since their formation in 1986. He has served in various executive
positions with IGC and its predecessor companies since 1974, including as a
Director of IGMC from 1986 to 1998.
Members of the Board of
Trustees Continuing in Office with a Term to Expire at the 2010 Annual Meeting
of Shareholders
J. Michael Wilson, 42. Mr.
Wilson has been a trustee of the Company since March 1997 and has served as
Chairman and Chief Executive Officer of the Company since July
1998. Mr. Wilson was a Director of Interstate General Management
Corporation (“IGMC”), the managing general partner of Interstate General Company
L.P. (“IGC”), the predecessor to the Company, from 1996 to 1998 and from January
1997 to November 1998 was Vice Chairman, Secretary, and Chief Financial Officer
of IGC. He has been President and Chief Operating Officer of
Interstate Business Corporation ("IBC"), a general partner of IGC, since 1994
and a Director of IBC since 1991. He served as Vice President of IBC
from 1991 to 1994. He has been a director of Wilson Securities
Corporation since 1991, and President since March 1996. He was Vice
President of Wilson Securities Corporation from 1991 to 1996. He has
been Vice President of Interstate Waste Technologies, a subsidiary of IGC, since
1994 and in July 2006 was appointed to their Board of Directors.
Thomas J. Shafer, 78. Mr.
Shafer has been a trustee of the Company since August 1998. He is a
registered professional engineer specializing in real estate evaluation and land
development. Prior to his retirement in 1997, he was a partner in
Whitman, Requardt and Associates, LLP ("Whitman Requardt"), an engineering and
architectural firm from 1976 through 1997 and its managing partner from 1989
through 1997. He was a director of IGMC from January 1998 to June
2000. He is a member of the Urban Land Institute, the American
Society of Professional Engineers and numerous other technical organizations.
Whitman Requardt has provided engineering services to the Company for over
thirty years.
BOARD
AND COMMITTEE MATTERS
Requirements of Board
Members
Pursuant to the Company's Declaration
of Trust not fewer than two of the members of the Board of Trustees must be
persons who are not employed by (i) the Company, (ii) any Affiliate of the
Company, or (iii) a member of the family of James J. Wilson, the President and
Chief Executive Officer of IGC and the father of J. Michael Wilson.
During the fiscal year 2007, the Board
of Trustees held six regular meetings and two special meetings. All trustees
attended at least 75% of the total meetings of the Board of Trustees and
committees of the Board on which they served. In accordance with
Company policy, all members of our Board attended last year's annual
meeting.
Trustee
Independence
The
Company has established Trustee independence standards to assist the Board in
determining Trustee independence in accordance with the requirements of the
American Stock Exchange’s (“AMEX”) corporate governance listing
standards. The Company considers all relevant facts and circumstances
in making an independence determination. To be considered “independent” under
our independence standards, our Board of Trustees must determine that the
trustee has no material relationship with us (other than as a trustee) directly
or indirectly, that would interfere with the exercise of independent
judgment.
Our Board has affirmatively determined
that each of our incumbent trustees, except for Messrs. Wilson and Kelly who are
Company officers, and each of the nominees for election at the 2008 Annual
Meeting, qualifies as “independent” under our independence standards, as none of
such trustees or nominees has a material relationship with us, directly or
indirectly, that would interfere with the exercise of independent
judgment. Mr. Shafer has a consulting agreement with the Company,
described below under the heading “Certain Relationships and Related
Transactions” which does not interfere with his independence as a Trustee, but
does preclude him from being able to serve as a member of the Audit
Committee.
Committees of the
Board
The Board of Trustees has established
three committees: the Audit Committee, the Compensation Committee and
the Nominating and Corporate Governance Committee. The charters for
the Audit Committee and the Nominating and Corporate Governance Committee may be
found on our website at www.acptrust.com. You may also obtain a copy
of the Audit Committee and the Nominating and Corporate Governance Committee
charters without charge by writing to the Secretary of the Company at the
principal executive offices of the Company.
Audit Committee. The
responsibilities of the Audit Committee include the appointment and termination
of the independent auditors, reviewing the plans for and results of the annual
audit engagement with the independent auditors, approval of any other
professional services provided by the independent auditors, approval of the fees
paid to the independent auditors for audit and non-audit services, and
periodically reviewing, with the assistance of the independent auditors, the
adequacy of ACPT's internal accounting controls. The Audit Committee held four
meetings during the year ended December 31, 2007.
The members of the Audit Committee are
Mr. Ginorio and two trustees, T. Michael Scott and Thomas Condit, whose terms
expire at the 2008 Annual Meeting of Shareholders. The Board of Trustees has
determined that each current member of the Audit Committee is an independent
trustee under the AMEX listing requirements and the applicable rules of the
Securities and Exchange Commission and, as required by AMEX rules, is able to
read and understand fundamental financial statements. The Board has
further determined that Mr. Ginorio is "financially sophisticated" under the
AMEX rules and is an "audit committee financial expert" as defined in Item
407(d)(5) of Regulation S-K.
Compensation
Committee. The Compensation Committee is responsible for
approving the compensation of the executive officers of ACPT, including the CEO
and for the administration of the Share Incentive Plan. The members
of the Compensation Committee are Messrs. Shafer (Chairman), Condit, Ginorio and
Scott, each of whom is an independent trustee under the AMEX listing
requirements. The Compensation Committee met three times during
2007.
Nominating and Corporate Governance
Committee. The Nominating and Corporate Governance Committee
assists our Board with: identifying qualified individuals to become members of
our Board in the event of any vacancy on the Board, recommending to the Board
from time to time the member who should serve as Chairman of the Board,
determining the composition of the committees of the Board, recommending to the
Board, on an annual basis, trustee nominees for the Board to be presented at the
annual shareholders meeting, monitoring a process to assess Board effectiveness
and developing and implementing our corporate governance
guidelines. The members of the Nominating and Corporate Governance
Committee are Messrs. Scott (Chairman), Condit, Ginorio, and Shafer, each of
whom is an independent trustee under the AMEX listing
requirements. The Nominating and Corporate Governance Committee met
once during 2007.
There are no differences in the way the
Nominating and Corporate Governance Committee evaluates nominees suggested by
shareholders from those suggested by Board members or management.
INDEPENDENT
AUDITOR FEES AND SERVICES
The following table sets forth the
aggregate fees for professional services rendered by Ernst & Young LLP, the
Company's independent registered public accounting firm, for the audit of the
Company's annual financial statements for the years ended December 31, 2007 and
December 31, 2006 and fees billed for other services rendered by Ernst &
Young LLP during those periods.
|
|
|
2007
|
|
|
2006
|
|
|
Audit
Fees
|
|
$ |
790,700 |
|
|
$ |
802,400 |
|
|
Audit-Related
Fees
|
|
|
36,500 |
|
|
|
28,200 |
|
|
Tax
Fees
|
|
|
177,110 |
|
|
|
186,326 |
|
|
All
Other Fees
|
|
|
- |
|
|
|
- |
|
Audit
Fees
Audit fees in 2007 and 2006 represented
fees for professional services provided in connection with the annual audit of
our financial statements reported on Form 10-K and review of our quarterly
financial statements reported on Form 10-Q.
Audit
fees in 2007 also included fees for professional services rendered in connection
with the audit of the Company’s adoption of Financial Accounting Standards Board
Interpretation No. 48 “Accounting for Uncertainty in Income Taxes,” on January
1, 2007. Audit fees in 2006 also included fees for professional
services rendered in connection with the audit of the Company’s adoption of
Emerging Issues Task Force (EITF) 04-05 “Determining Whether a General Partner
as a Group Controls a Limited Partnership or Similar Entity When the Limited
Partners Have Certain Rights,” on January 1, 2006.
Audit-Related
Fees
Audit-related
services in 2007 and 2006 included the audit of the Retirement Benefit Plan, the
Company’s subscription to Ernst & Young's on-line accounting and auditing
research tool and technical accounting assistance.
Tax
Fees
We use
Ernst & Young for tax services, including tax compliance, tax advice and tax
planning. Included in the tax fees for 2007 are tax consulting
fees related to certain strategic planning activities undertaken during
2007. Included in the tax fees for 2006 are amounts related to
assisting the Company in reaching a Closing Agreement with the IRS.
Other
Fees
We did
not engage the independent auditor to provide services other than those
identified in the above categories for us in 2007 or 2006.
Pre-Approval
Policies and Procedures
The Audit
Committee adopted a policy that requires approval in advance of all audit,
audit-related, tax services, and other services performed by the independent
auditor outside of the audit engagement letter. The policy provides for
pre-approval by the Audit Committee of specifically defined audit and
non-audit services. The policy states that the Audit Committee must pre-approve
the permitted service before the independent auditor is engaged to perform
it. The Audit Committee reports that all services rendered in fiscal
year 2007 were pre-approved.
Appointment of Principal
Independent Auditor for 2009
The Audit Committee of the Board of
Trustees has appointed Ernst & Young LLP as the Company's independent
registered public accounting firm for fiscal 2008. Ernst & Young
LLP has served in this capacity since May 15, 2002. Ernst & Young
LLP will audit and report to shareholders on the consolidated financial
statements of the Company and its subsidiaries.
Representatives of Ernst & Young
LLP will be present at the annual meeting, will have an opportunity to make a
statement if they so desire, and are expected to be available to respond to
appropriate questions.
AUDIT
COMMITTEE REPORT
With
respect to the Company’s financial reporting process, the management of the
Company has the primary responsibility for establishing and maintaining internal
controls and preparing the Company’s consolidated financial statements. The
independent registered public accounting firm, Ernst &Young LLP, is
responsible for auditing these financial statements. It is the responsibility of
the Audit Committee to oversee these activities. It is not the responsibility of
the Audit Committee to prepare or certify the Company’s financial statements or
guarantee the audits or reports of the independent auditors, nor is it the duty
of the Audit Committee to certify that the independent auditor is “independent”
under applicable rules. These are the fundamental responsibilities of Company
management and the independent auditors. In the performance of its oversight
function, the Audit Committee has:
|
·
|
Reviewed
and discussed the audited financial statements with the independent
registered public accounting firm and management, including a discussion
of the quality, not just the acceptability, of the accounting principles,
the reasonableness of significant judgments, and the clarity of
disclosures in the financial
statements;
|
|
·
|
Discussed
with the independent registered public accounting firm the matters
required to be discussed by the Statement on Auditing Standards No. 114,
Communication with Audit Committees, as currently in
effect;
|
|
·
|
Received
the written disclosures and the letter from the independent registered
public accounting firm required by Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees, as currently in
effect, and has discussed with the independent registered public
accounting firm their
independence;
|
|
·
|
Considered
whether the provision of non-audit services is compatible with maintaining
the independent registered public accountant’s independence;
and
|
|
·
|
Concluded
that the independent registered public accounting firm is independent from
the Company and its management.
|
The Audit
Committee discussed with the Company’s independent auditors the overall scope
and plans for their respective audits. The Committee meets with the independent
auditors, with and without management present, to discuss the results of their
examinations and the overall quality of the Company’s financial
reporting.
In
reliance on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Trustees (and the board has approved) that the
audited financial statements for 2007 be included in the Annual Report on Form
10-K for the year ended December 31, 2007 filed with the Securities and Exchange
Commission.
Audit
Committee
Antonio
Ginorio, Committee Chairman
Thomas S.
Condit
T.
Michael Scott
May 15,
2008
EXECUTIVE
COMPENSATION
The following table sets forth certain
information concerning the compensation of the Chief Executive Officer and the
two other most highly compensated executive officers of the Company (the "Named
Executive Officers") during the Company's last fiscal year.
SUMMARY
COMPENSATION TABLE
|
Name
& Principal Position
|
Year
|
|
Salary
($)
|
|
|
Annual
Bonus
($)
|
|
|
Stock
Awards
($)(1)
|
|
|
Other
($)(2)
|
|
|
Total
Compensation
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Michael Wilson (3)
|
2007
|
|
|
390,000 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
390,000 |
|
|
Chairman
& Chief Executive Officer
|
2006
|
|
|
375,000 |
|
|
|
95,000 |
|
|
|
-- |
|
|
|
-- |
|
|
|
470,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edwin
L. Kelly
|
2007
|
|
|
457,800 |
|
|
|
-- |
|
|
|
-- |
|
|
|
36,408 |
|
|
|
494,208 |
|
|
Vice
Chairman, President & Chief Operating Officer
|
2006
|
|
|
400,300 |
|
|
|
105,000 |
|
|
|
-- |
|
|
|
24,224 |
|
|
|
529,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos
R. Rodriguez
|
2007
|
|
|
300,300 |
|
|
|
-- |
|
|
|
(20,000 |
) |
|
|
27,419 |
|
|
|
307,719 |
|
|
Executive
Vice President
|
2006
|
|
|
300,300 |
|
|
|
50,000 |
|
|
|
(1,287 |
) |
|
|
25,569 |
|
|
|
374,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
No stock awards were
granted in 2007 or 2006. However, the outstanding SARs were
re-measured for financial reporting purposes and the amount included above
reflects the change in fair value recorded during the period as required
by SFAS 123(R). The Company used the Black-Scholes model to
value its SARs assuming a volatility of 45.34% and 44.72% and a risk free
interest rate equally to the US Treasury Daily Yield Curve Rates as of
December 31, 2007 and 2006,
respectively.
|
|
Name
|
|
Contribution
to Qualified Defined Contribution Plan
($)
|
|
|
Country
Club and Other Dues
($)
|
|
|
Car
and Other Allowances
($)
|
|
|
Cell
Phone
($)
|
|
|
Total
Other
($)
|
|
|
J.
Michael Wilson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
2006
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edwin
L. Kelly
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
20,564 |
|
|
|
5,990 |
|
|
|
9,002 |
|
|
|
852 |
|
|
|
36,408 |
|
|
2006
|
|
|
19,711 |
|
|
|
2,700 |
|
|
|
1,813 |
|
|
|
-- |
|
|
|
24,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos
R. Rodriguez
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
20,093 |
|
|
|
5,113 |
|
|
|
-- |
|
|
|
2,213 |
|
|
|
27,419 |
|
|
2006
|
|
|
19,711 |
|
|
|
5,858 |
|
|
|
-- |
|
|
|
-- |
|
|
|
25,569 |
|
|
(3)
|
J.
Michael Wilson, the CEO of ACPT and President of IBC, is on the payroll of
IBC. ACPT reimburses IBC for his services provided to
ACPT.
|
NARRATIVE
DISCLOSURE TO SUMMARY COMPENSATION TABLE
Employment Agreements
Edwin
L. Kelly
On August
6, 2007, the Company entered into an executive retention agreement with Edwin L.
Kelly. This executive retention agreement superseded Mr. Kelly’s
prior employment contract with the Company and was retroactively effective as of
July 1, 2007. The agreement provided for Mr. Kelly to serve as Vice
Chairman, President and Chief Operating Officer of the Company, reporting to the
Chairman of the Board of Trustees of the Company, for a term expiring December
31, 2010 unless earlier terminated pursuant the terms of the
agreement. The agreement renews automatically for successive one-year
periods following December 31, 2010 unless either the Company or Mr. Kelly
notifies the other of non-renewal.
During
the term of the agreement, Mr. Kelly will receive an annual base salary of
$500,000, subject to annual inflationary adjustments and discretionary increases
determined by the Company’s Board of Trustees. In addition, under his
agreement, Mr. Kelly will be entitled to participate in the Company’s standard
benefits, five weeks of paid vacation annually, the use of a company-owned car
and membership fees and dues at his country club, among other
perquisites.
The
employment agreement includes customary restrictive covenants relating to
protection of confidential information, non-solicitation and a non-compete
clause that will prevent Mr. Kelly from seeking or obtaining employment by any
competitor during the term of his employment with the Company and for one year
thereafter.
Carlos
R. Rodriguez
The Company has executed an employment
agreement dated as of April 20, 2006 with Mr. Rodriguez, who serves as president
of the Company’s subsidiary, IGP Group, Corp. The agreement provides
for an initial term expiring June 30, 2007, subject to extension at the
Company’s option. The Company opted to extend Mr. Rodriguez’s
employment term for one additional year to June 30, 2008. Unless the
agreement is earlier terminated, upon expiration of the term of the agreement,
as extended, Mr. Rodriguez has agreed to serve as a consultant, performing not
more than 250 hours of services in any 12 month period, until June 30,
2011.
Mr. Rodriguez’s initial base salary is
$300,000, and is subject to review and increase, but not decrease, in the
discretion of the Board of Trustees. The agreement provides for Mr.
Rodriguez to be eligible for such bonus and other benefits as may be established
and conferred upon comparable senior executives of the Company. Under
the terms of the agreement, Mr. Rodriguez will be paid an annual fee of $100,000
for the period he serves as a consultant following expiration of the term of his
employment. Total consulting fees for the three-year period are
estimated to be $300,000.
The employment agreement contains a
non-competition and non-solicitation provision pursuant to which Mr. Rodriguez
has agreed that he will not, until June 30, 2011, provide services to, or become
engaged in any capacity, including as a principal, agent, shareholder (other
than as a passive investor of less than 5% of the outstanding stock of any
public company), consultant, employee, lender or surety, in, any entity that
competes with the Company or its subsidiaries in Puerto Rico. Mr.
Rodriguez has also agreed that, during this period, he will not hire or attempt
to hire any person who, during the year prior to the termination of Mr.
Rodriguez’s employment with the Company, was serving as an employee, director or
trustee of the Company or any subsidiary, or otherwise solicit or induce any
such person to terminate his or her service with the Company. The
non-competition and non-solicitation provisions will terminate should Mr.
Rodriguez terminate his employment agreement due to a breach by the Company of
its obligations thereunder.
Annual Incentive
Compensation
Performance
based incentives reflect both business and individual
accomplishment. Incentives are tied to not only the Company’s
operating results, but also to senior management’s ability to manage the Company
effectively and create long term value for the shareholders. In this regard,
assessment of performance should take into account factors, such as the impact
of economic and industry trends in the Company’s business.
Management
proposes annual performance goals which are reviewed by the Compensation
Committee and either modified or approved by the Committee. These goals are
divided into five major areas as follows:
The goals
in this area include the development of long range strategic plans, monitoring
or modifying the company structure to maximize the benefit to shareholders,
minimizing tax impact to shareholders, and promoting public relations and the
company image.
The goals
in this area include the development and sale of residential land and buildings,
leasing of commercial and residential units, and maximizing net operating income
from rental properties.
The goals
in this area include obtaining the best available bank loans where necessary for
construction or working capital, refinancing of investment properties to obtain
the best available long term rates and to provide cash for capital funding,
managing cash flow to provide for acquisitions and return to
shareholders.
The goals
in this area include establishing a succession plan for key executives,
evaluating employee benefits, hiring new staff where a need has been identified,
training and expanding the responsibilities of employees.
The goals
in this area include the development of new commercial and residential product,
acquisition of investment properties and land available for future development,
analyzing new opportunities and markets for the company.
While the Compensation Committee
considered these performance factors in making individual compensation
decisions, the Committee applied its own business judgment in making final
determinations. The maximum bonus amount awarded to each executive will not
exceed fifty percent of his or her base salary for the calendar
year. For the year 2007, the Compensation Committee did not award any
Annual Incentive Compensation to the CEO and two other named executive
officers.
Other Compensation
ACPT has established a qualified
defined contribution retirement plan (the "Retirement Plan") for eligible
employees of the Company. Employees are generally eligible to
participate when they complete one year of service. Contributions
from the Company to the plan are 5.7% of base salaries and wages not in excess
of the U.S. Social Security taxable wage base, and 11.4% of salaries (limited to
$225,000) that exceed that wage base. In addition, the Retirement
Plan contains a profit sharing provision allowing ACPT to award annual cash
bonuses to the officers and employees in reasonable amounts reflecting their
contributions to the Company. The awards are determined by the
Compensation Committee. A portion of each bonus is contributed on
behalf of the employee to the Retirement Plan. No annual cash bonuses
were made under the Retirement Plan in 2007. All of the named
executive officers participate in the Retirement Plan except for the Chief
Executive Officer.
Other perquisites are provided to
certain named executive officers, primarily the payment of country club and
other dues on behalf of the officers, use of Company automobiles or car
allowance and cellular phones. The Committee believes that the
perquisites offered represent market practice and serve to minimize distractions
and enable the named executive officers to efficiently and effectively conduct
business. The Committee also notes that these perquisites do not
represent a significant portion of the named executive officers’ total
compensation.
SHARE
INCENTIVE PLAN
Under the Share Incentive Plan, the
Compensation Committee of the Board of Trustees may grant to key employees the
following types of Share-based incentive compensation awards ("Awards"): (i)
options to purchase a specified number of Common Shares ("Options"), (ii) Common
Shares that vest upon the occurrence of certain vesting criteria ("Restricted
Shares"), or (iii) Stock Appreciation Rights (“SARs”) that entitle the holder to
receive upon exercise an amount payable in cash, Common Shares or other property
(or any combination of the foregoing) equal to the difference between the market
value of Common Shares and a base price fixed on the date of grant. A
total of 208,000 Common Shares have been reserved for issuance under the Share
Incentive Plan. However, the Share Incentive Plan will expire on July
7, 2008, at which point these shares will no longer be available for
issuance.
No equity awards were issued in 2007 to
the Named Executive Officers. The following table summarizes the
amount of unexercised SARs held by the Named Executive Officers at December 31,
2007.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END
|
Name
|
|
Securities
Underlying Unexercised SARs
(#)
Exercisable
|
|
|
Securities
Underlying Unexercised SARs
(#)
Unexercisable
|
|
|
SARs
Exercise Price
($)
|
|
|
SARs
Expiration
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Michael Wilson
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
Edwin
L. Kelly
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
Carlos
R. Rodriguez
|
|
|
10,000 |
|
|
|
-- |
|
|
|
40,000 |
|
|
4/30/2011
|
|
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
Mr.
Kelly’s executive retention agreement includes, among other provisions, a
change-in-control provision. No other Named Executive Officers have
change of control agreements with the Company. However, Mr.
Rodriguez’s employment agreement includes certain other termination
provisions. Further details of these provisions are set forth
below.
Edwin
L. Kelly
Mr.
Kelly’s executive retention agreement will terminate prior to the stated term
upon Mr. Kelly’s death or disability. In addition, the Company may
terminate Mr. Kelly’s employment for “cause” or for any other
reason. Mr. Kelly may terminate his employment for “good reason” or
for any other reason, as well as upon a change of control of the Company or the
first anniversary thereafter. If Mr. Kelly’s employment is terminated
by the Company other than for “cause” or by him for “good reason,” Mr. Kelly
will be entitled to receive the following amounts, subject to customary
withholding and deductions, without regard to whether Mr. Kelly obtains a
position with another employer:
|
·
|
Termination
prior to the 1st anniversary of the Agreement: 48 months of his
then-current base salary;
|
|
·
|
Termination
prior to the 2nd anniversary of the Agreement: 36 months of his
then-current base salary;
|
|
·
|
Termination
prior to the 3rd anniversary of the Agreement: 30 months of his
then-current base salary; or
|
|
·
|
Termination
at any time thereafter: 24 months of his then-current base
salary.
|
In
addition, upon delivery by a party of a notice of non-renewal, Mr. Kelly shall
be entitled to receive severance in the amount of 24 months of his then-current
base salary.
If Mr.
Kelly terminates his employment at any time effective upon the first anniversary
of a change of control of the Company, Mr. Kelly will be entitled to receive
severance in the amount of 48 months of his then-current base
salary. Under certain circumstances related to a change of control,
Mr. Kelly will be entitled to receive a gross-up of such severance amount in an
amount necessary to make him whole for any excise taxes payable by him in
connection with such severance. Should a change in control have
occurred, the Company estimates approximately $2.0 million would be due to Mr.
Kelly under the change in control provision as of December 31,
2007.
“Cause” is defined to mean (1) the
executive’s conviction of, or plea of nolo contendere to, a felony involving
dishonesty, disloyalty, fraud, or moral turpitude; (2) the executive’s material
breach of any material obligation in the Kelly Agreement; or (3) the executive’s
engaging in conduct constituting a material breach of any fiduciary duty to the
Company. In the event of termination for cause, all salary and benefit
payments cease immediately.
“Good
reason” is defined to mean (1) a material diminution in any of the executive’s
base compensation, authority (which includes but is not limited to a change in
the identity of the person to whom the executive reports), duties or
responsibilities without his agreement; (2) the executive being required to
relocate his office to executive offices outside of an area within a fifty (50)
mile radius of the Company’s existing executive offices; (3) there being a
material reduction in the overall value of the employee benefits being provided
to the executive, unless the reduction is effective for all senior executive
employees; or (4) a material breach by the Company of any of its obligations to
the executive under the executive retention agreement, and in each case, so long
as the executive gives such notice within sixty (60) days of the circumstances
believed by the executive to constitute Good Reason and the Company fails to
remedy those circumstances within thirty (30) days of its receipt of such
notice. Should Mr. Kelly have terminated his employment for good
reason, the Company estimates approximately $2.0 million would be due to Mr.
Kelly under this provision as of December 31, 2007.
All
payments and benefits to which Mr. Kelly may become entitled under his executive
retention agreement are subject to delay or modification if necessary to comply
with Section 409A of the Internal Revenue Code.
If the Company terminates the
employment agreement other than for cause, or if Mr. Kelly terminates the
agreement upon any breach by the Company of its obligations thereunder, the
Company would be required to pay the executive’s base salary and benefits for a
period of 48 months following such termination, estimated to be approximately
$2.0 million as of December 31, 2007.
Carlos
R. Rodriguez
Upon expiration of the term of the
agreement, as extended, Mr. Rodriguez has agreed to serve as a consultant,
performing not more than 250 hours of services in any 12-month period, until
June 30, 2011. Following expiration of the term of his employment,
Mr. Rodriguez will be paid an annual fee of $100,000 for the period he serves as
a consultant. Total consulting fees for the three-year period are
estimated to be $300,000.
Mr. Rodriguez’s employment agreement
may be terminated by either party upon 90 days prior written notice and
terminates automatically upon the death or disability of Mr.
Rodriguez. If the agreement terminates due to death or disability,
the Company will pay Mr. Rodriguez or his estate the base salary or consulting
fees otherwise scheduled to be paid for the six months following such
termination, estimated to be approximately $150,000 as of December 31,
2007.
In addition, the Company may terminate
the employment agreement prior to its expiration on June 30, 2008 for
“cause.” As defined in the employment agreement, “cause” means the
executive’s (i) willful, reckless or grossly negligent inattention to his duties
or responsibilities to the Company and its subsidiaries, (ii) unethical conduct
relating to the performance of his duties and responsibilities, (iii) repeated
disregard for the written rules, policies and regulations of the Company, (iv)
conviction of a felony or other criminal offense relating to fraud or theft, (v)
repeated failure or refusal to perform employment obligations under the
agreement or (vi) breach of his obligations, including without limitation the
non-compete provision described below, under the employment agreement. In
the event of termination for cause, all salary and benefit payments cease
immediately.
If the Company terminates the
employment agreement prior to its expiration on June 30, 2008 other than for
cause, or if Mr. Rodriguez terminates the agreement upon any breach by the
Company of its obligations thereunder, the Company will pay the executive’s base
salary for the remainder of the year of termination plus one additional year;
provided that if Mr. Rodriguez terminates the agreement during the consultancy
period, the Company will pay all consultant fees for the remainder of the
consultancy period. Depending on which provision of the agreement
applies, we estimate that the range of potential payment would be between
$300,000 and $600,000 as of December 31, 2007.
COMPENSATION
OF TRUSTEES
The
Company pays its Trustees who are not employees of the Company or any of its
affiliates fees for services as trustees. Trustees receive fees of $6,500 per
quarter plus $1,400 per Board meeting and an additional $500 fee for each
telephonic meeting. The Chairman of the Audit Committee receives an
additional $1,400 per meeting. The Trustees are also reimbursed for
all reasonable expenses incurred by them in attending Board and committee
meetings.
The
following table summarizes Trustee compensation:
|
Name
|
|
Fees
Earned or Paid in Cash
($)(A)
|
|
|
Stock
Awards
($)(B)
|
|
|
All
Other Compensation
($)(C)
|
|
|
Total
($)
|
|
|
Thomas
J. Shafer
|
|
|
58,400 |
|
|
|
32,160 |
|
|
|
61,440 |
|
|
|
152,000 |
|
|
T.
Michael Scott
|
|
|
57,000 |
|
|
|
13,920 |
|
|
|
1,440 |
|
|
|
72,360 |
|
|
Antonio
Ginorio
|
|
|
63,000 |
|
|
|
9,360 |
|
|
|
1,440 |
|
|
|
73,800 |
|
|
Thomas
S. Condit
|
|
|
57,000 |
|
|
|
32,160 |
|
|
|
1,440 |
|
|
|
90,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
During 2007,
the Board of Trustees established a Special Committee made up of each of
the outside trustees. These Special Committee members were
eligible to receive a fee of $70,000 each for their participation on the
Special Committee, payable in installments, based on certain
conditions. Each member received $20,000 for service on the
Special Committee during 2007, which payments are included in the amounts
above. An additional $50,000 was paid to each member
during the first quarter of 2008, and accordingly, is not included in the
amounts above.
|
|
(B)
|
Included
for each trustee listed above is $32,160 related to the FAS 123(R) expense
recorded for the restricted shares issued in August 2006 (see discussion
below). The SFAS 123(R) expense recognized for financial
reporting purposes for the year ended December 31, 2007 represents the
amortization of the grant date fair value. In addition, Messrs.
Scott and Ginorio had 8,000 and 10,000, respectively, vested SARs
outstanding, which were re-measured for financial reporting purposes and
the amount included above reflects the change in fair value recorded
during the year ended December 31, 2007 required by SFAS
123(R). To estimate fair value, the Company used the
Black-Scholes model to assuming a volatility of 45.34% and a risk free
interest rate equally to the US Treasury Daily Yield Curve Rates as of
December 31, 2007.
|
|
(C)
|
Each
of the four trustees received $1,440 related to dividends paid on
restricted shares granted as described in note (B) above. In
addition, Mr. Shafer received $60,000 related to a consulting agreement
with the Company which is discussed further below under the heading
“Certain Relationships and Related
Transactions.”
|
Trustee Share Incentive
Plan. The Trustee Share Incentive Plan authorizes the Board of
Trustees, in its discretion, to grant to eligible trustees, awards of the same
type and terms as the awards available under the Employee Share Incentive Plan
discussed in this Proxy Statement under "Executive
Compensation". Only trustees who are not employees of ACPT or any
affiliated company are eligible to receive awards under the Trustee Share
Incentive Plan. An aggregate of 52,000 Common Shares was reserved for
issuance under the Trustee Share Incentive Plan. Under this plan, the
Company awarded 8,000 shares to each of the four non-employee Trustees on August
28, 2006. These shares vest annually at a rate of 1,600 per year, per
trustee, with the initial tranche of shares vesting immediately at the grant
date. In addition, 1,600 unregistered shares were awarded to each
non-employee Trustee in June 2005. Finally, during 2001, Thomas J.
Shafer, T. Michael Scott and Antonio Ginorio were each awarded 10,000 SARs that
entitle the holder to receive upon exercise an amount payable in cash, common
shares or other property equal to the difference between the market value of
common shares and a $4.00 base price which was fixed on the date of
grant. As of December 31, 2007, Messrs. Scott and Ginorio had 8,000
and 10,000, respectively, vested SARs outstanding. The Trustee
Share Incentive Plan will expire on July 7, 2008.
EQUITY
COMPENSATION PLAN INFORMATION
As described previously, certain shares
are available for issuance under the Share Incentive Plan and the Trustee Share
Incentive Plan. As of December 31, 2007, there were 208,000 shares
available for issuance under the Share Incentive Plan, of which 7,275 share
equivalents would be necessary to satisfy outstanding SARS at December 31, 2007
should the SARS be settled for stock as opposed to cash. For the
Trustee Share Incentive Plan, 13,600 shares were available for issuance, of
which 12,591 share equivalents would be necessary to satisfy outstanding SARS at
December 31, 2007. However, both of these plans will expire on July
7, 2008, at which point these shares will no longer be available for
issuance.
SHARE
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain
information with respect to beneficial ownership of the Company's Common Shares
by each of the Company's trustees, the nominees for trustee, the Named Executive
Officers, all trustees and current executive officers as a group and each person
who is known by the Company to beneficially own more than five percent of any
class of the Company's voting securities as of April 4, 2008. The
Company has relied upon information supplied by its officers, trustees,
nominees, and certain shareholders and upon information contained in filings
with the SEC. Except as otherwise noted below, the address of each
person listed in the following table is: c/o American Community Properties
Trust, 222 Smallwood Village Center, St. Charles, MD 20602.
|
Name
|
|
Number
of Shares
of
Common Stock
Beneficially
Owned
|
|
|
Percent
of
All
Shares of
Common
Stock
|
|
|
|
|
|
|
|
|
|
|
J.
Michael Wilson, (1)(2)(4)
|
|
|
107,747 |
|
|
|
2.06 |
|
|
Edwin
L. Kelly
|
|
|
54,607 |
|
|
|
1.04 |
|
|
Carlos
R. Rodriguez
|
|
|
-- |
|
|
|
-- |
|
|
Thomas
J. Shafer
|
|
|
14,600 |
|
|
|
* |
|
|
T.
Michael Scott
|
|
|
11,600 |
|
|
|
* |
|
|
Antonio
Ginorio
|
|
|
10,600 |
|
|
|
* |
|
|
Thomas
S. Condit
|
|
|
9,600 |
|
|
|
* |
|
|
Ross
B. Levin
|
|
|
6,400 |
|
|
|
* |
|
|
Donald
J. Halldin
|
|
|
-- |
|
|
|
-- |
|
|
Michael
Williamson
|
|
|
-- |
|
|
|
-- |
|
|
Thomas
E. Green
|
|
|
-- |
|
|
|
-- |
|
|
All
trustees and executive officers of
ACPT
as a group (15 persons)(2)
|
|
|
214,854 |
|
|
|
4.11 |
|
|
The
Wilson Group (1)
222
Smallwood Village Center
St.
Charles, MD 20602
|
|
|
2,650,720 |
|
|
|
50.68 |
|
|
Interstate
Business Corporation (1)(3)(4)
222
Smallwood Village Center
St.
Charles, MD 20602
|
|
|
1,549,976 |
|
|
|
29.64 |
|
|
Wilson
Securities Corporation (1)(3)(4)
222
Smallwood Village Center
St.
Charles, MD 20602
|
|
|
545,673 |
|
|
|
10.43 |
|
|
Paul
J. Isaac (5)
75
Prospect Avenue
Larchmont,
New York 10538
|
|
|
572,383 |
|
|
|
10.94 |
|
|
Robert
L. Chapman, Jr. (6)
Pacific
Corporate Towers, 13th
Floor
222
N. Sepulveda Blvd.
El
Segundo, CA 90245
|
|
|
389,271 |
|
|
|
7.44 |
|
|
Eric
P. Von der Porten (7)
1395
San Carlos Avenue, Suite B
San
Carlos, CA 94070
|
|
|
283,100 |
|
|
|
5.41 |
|
* Less
than 1%.
|
(1)
|
As
reported in a Schedule 13D/A filed April 15, 2008, the Wilson Group is
comprised of James J. Wilson and his wife, Barbara A. Wilson; their six
children, J. Michael Wilson (CEO and Chairman of ACPT), Thomas B. Wilson,
Kevin J. Wilson, Elizabeth W. Weber, Mary P. Wilson and Brian J. Wilson;
Interstate Business Corporation; Wilson Securities Corporation; and Wilson
Family Limited Partnership. The Wilson Group, collectively, has
voting and dispositive control through direct and indirect ownership of
51% of ACPT's outstanding shares as reflected in the Wilson Group's
Schedule 13D. The members of the group periodically meet to
discuss matters relating to their ownership of ACPT and may from time to
time act together with respect to the voting or disposition of common
shares. However, there is no formal arrangement among the
members of the group in regard to their voting and dispositive voting
rights and, accordingly, the group members may not always act together
with respect to the common shares.
|
|
(2)
|
Includes
21,350 shares attributable to ACPT shares held by the Wilson Family
Limited Partnership. J. Michael Wilson is a General Partner of
the Wilson Family Limited Partnership. The management and
control of the business and affairs of the partnership are vested jointly
in the General Partners, thus J. Michael Wilson shares voting and
dispositive power over Common Shares owned by the Wilson Family Limited
Partnership.
|
|
(3)
|
Interstate
Business Corporation and Wilson Securities Corporation are owned by
certain members of the Wilson Family, including J. Michael
Wilson.
|
|
(4)
|
These
persons are members of the Wilson Group and their shares are also included
with the Wilson Group.
|
|
(5)
|
Based
on a Schedule 13D/A filed April 21, 2008, Paul J. Isaac directly owns
73,450 shares and has beneficial ownership of 446,048 shares that are
directly owned by: (i) Isaac Brothers L.L.C. (220,200 shares); (ii)
Arbiter Partners L.P. (177,083 shares); (iii) Karen Isaac (wife) and 4
grandchildren (84,400); (iv) Isaac Grandchildren’s Trust (12,250 shares);
(v) Marjorie S. Isaac u/w/o Irving H. Isaac Marital Trust (5,000
shares).
|
|
(6)
|
Based
on a Schedule K-1 information as of December 31, 2007, Robert
L. Chapman, Jr., through Chapman Capital L.L.C., has beneficial ownership
of 389,271 shares that are directly owned by: (i) Westlake Real Estate
L.L.C. (71,585 shares), (ii) Smallwood Real Estate L.L.C. (85,144 shares),
(iii) Fairway Real Estate L.L.C. (56,814 shares), (iv) Piney Reach Real
Estate L.L.C. (79,757 shares) and (v) Wooded Glen Real Estate L.L.C.
(96,002 shares).
|
|
(7)
|
Based
on a Schedule 13D filed December 14, 2007, Eric P. Von der Porten, through
Leeward Capital, L.P. and Leeward Investments, LLC, has beneficial
ownership of 283,100 shares.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Payments
to IBC for Services Provided by J. Michael Wilson
J. Michael Wilson, the Chief Executive
Officer of ACPT and President of IBC, is on the payroll of
IBC. During 2007, ACPT reimbursed IBC $390,000 for his services
provided to ACPT. IBC is owned by the Wilson Group, beneficial owners of 51% of
ACPT’s outstanding shares.
Property
Management Services
During 2007, ACPT provided management
services to one multifamily apartment project in which ACPT is not the general
partner and IBC or an IBC related entity holds an ownership interest. The
management contract provided for fees of 4.5% of collected rents. Total fees
earned from this property in 2007 were $41,815. Effective February
28, 2007, the Company’s management agreement with this project was terminated
upon the sale of the project to a third party.
Consulting
Agreement
American Rental Management Company
("American Management"), a wholly owned subsidiary of ACPT, entered into a
consulting and retirement compensation agreement with IGC's founder and Chief
Executive Officer, James J. Wilson, effective October 5, 1998 (the “Consulting
Agreement). The Consulting Agreement provides for annual cash
payments during the first two years of $500,000 and annual cash payments for
eight years thereafter of $200,000. However, if Mr. Wilson dies or ACPT is sold
during the term of the Consulting Agreement, the agreement provides for a lump
sum payment equal to the lesser of $400,000 or the aggregate of annual payments
then payable under the agreement. During the Consulting Agreement term, Mr.
Wilson will remain available to provide consulting services requested from time
to time by the Board of Trustees, including strategic planning and transaction
advisory services. Pursuant to the Consulting Agreement, American Rental
Management Company will reimburse the reasonable costs and expenses incurred by
Mr. Wilson in providing requested consulting services. At the request of Mr.
Wilson, ACPT has been making monthly payments under this Consulting Agreement to
Interstate Waste Technologies, Inc.(“IWT”). Mr. Wilson is the father of J.
Michael Wilson, Chairman and Chief Executive Officer of the
Company. The final monthly payment under this agreement will be made
in September 2008.
Payment
of Legal Fees
During 2007, the Company’s non-employee
trustees concluded that certain legal fees and expenses incurred by J. Michael
Wilson in connection with the preliminary work done related to recapitalizing
the Company were in the best interest of the Company and the minority
shareholders. Accordingly, these trustees authorized the Company to
fund up to $225,000 of such costs, all of which were incurred as of December 31,
2007.
Consulting
and Engineering Services
Thomas J. Shafer, Trustee, provides
engineering and consulting services to the Company pursuant to a consulting
agreement between the Company and Mr. Shafer. During 2007, Mr. Shafer was paid
$5,000 per month for these services. The agreement may be terminated
by either party upon thirty days' notice. The Board has determined
that Mr. Shafer's provision of services pursuant to his consulting agreement is
not a "material" relationship within the meaning of the AMEX corporate
governance listing standards.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities
Exchange Act of 1934 requires the Company's trustees, officers, and persons who
beneficially own more than ten percent of ACPT's Common Shares to file with the
SEC initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of ACPT. Trustees, officers and greater than
ten percent shareholders are required by SEC regulation to furnish ACPT with
copies of all Section 16(a) forms they file.
Based solely on review of the copies of
these reports furnished to the Company during and with respect to the fiscal
year ended December 31, 2007 and written representations that no other reports
were required, the Company believes that all Section 16(a) filing requirements
were complied with during the fiscal year ended December 31, 2007.
ANNUAL
REPORT
The Company's audited financial
statements and notes thereto, including selected financial data and management's
discussion and analysis of financial condition and results of operations for the
year ended December 31, 2007, are included in the Company's Annual Report, which
was mailed to all shareholders on April 29, 2008.
Additional
copies of the Annual Report and the Company's 2007 Form 10-K and this proxy
statement are available without charge on the Company's website at
www.acptrust.com or upon written request to American Community Properties Trust,
222 Smallwood Village Center, St. Charles, Maryland 20602, Attention: Director
of Investor Relations.
SHAREHOLDER
PROPOSALS AND ADVANCE NOTICE PROVISIONS
Proposals for Inclusion in
2009 Proxy Materials
If any shareholder intends to submit a
proposal for consideration at the Company's 2009 Annual Meeting of Shareholders,
such proposal must be received by the Secretary of the Company no later than
January 15, 2009, in order to be considered for inclusion in the proxy statement
and form of proxy to be distributed by the Board of Trustees in connection with
that meeting. Shareholder proposals should be submitted to American
Community Properties Trust, Attn: Secretary, 222 Smallwood Village Center, St.
Charles, Maryland, 20602. Such a proposal must contain a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such shareholder and of the beneficial owner, if any, on whose
behalf the proposal is made, and all other information required to be presented
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended. In accordance with our Bylaws, the shareholder and the
beneficial owner, if any, on whose behalf the nomination or proposal is made
also must provide (x) the name and address of such shareholder, as they appear
on the Company's books, and of such beneficial owner and (y) the number of each
class of shares of the Company which are owned beneficially and of record by
such shareholder and such beneficial owner.
Trustee Nominations and
Other Proposals to be Addressed at the 2009 Annual Meeting
The Bylaws of the Company provide a
formal procedure for bringing business before the annual meeting of shareholders
that also applies to matters that shareholders wish to present, but do not wish
to be considered for inclusion in the proxy statement and form of
proxy. A shareholder proposing to present a matter before the 2009
annual meeting but not have the proposal considered for inclusion in the proxy
materials is required to deliver notice thereof in writing to the Secretary of
the Company at the principal executive offices of the Company no earlier than
March 6, 2009 and no later than April 6, 2009. If the date of the
2009 annual meeting is advanced by more than 30 days or delayed by more than 60
days from the anniversary date of this year's annual meeting of shareholders,
for the notice by the shareholder to be considered timely, it must be delivered
to the Secretary of the Company on the tenth day following the day on which
public announcement of the date of such meeting is first made. The
notice must contain (i) as to each person whom the shareholder proposes to
nominate for election or reelection as a trustee, all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of trustees, or is otherwise required, in each case pursuant to
Regulation 14A under the Exchange Act (including such person's written consent
to being named in the proxy statement as a nominee and to serving as a trustee
if elected); (ii) as to any other business that the shareholder proposes to
bring before the meeting, the same type of information required for proposals to
be considered for inclusion in the proxy materials under the prior
paragraph.
Discretionary
Authority
Pursuant to Rule 14a-4 under the
Exchange Act, if a shareholder notifies the Company after April 1, 2009 of an
intent to present a proposal at the Company's 2008 annual meeting of
shareholders (and for any reason the proposal is voted upon at that annual
meeting), the Company's proxy holders will have the right to exercise
discretionary voting authority with respect to the proposal, if presented at the
meeting, without including information regarding the proposal in its proxy
materials.
Communicating with the Board
of Trustees
Any shareholder who wishes to
communicate to the entire Board of Trustees of the Company, or to any individual
trustee, whether or not in relation to a shareholder nomination or a shareholder
proposal, may send that communication in writing to the Secretary of the Company
at the address provided in the paragraph above and it will be forwarded to the
appropriate member (s) of the Board. All written shareholder
communications to the Board of Trustees will be forwarded to the designated
recipients.
Other
Matters
The Board of Trustees does not know of
any matters other than those described in this proxy statement that will be
presented for action at the meeting. If other matters properly come
before the meeting, the persons named as proxies intend to vote the shares they
represent in accordance with their judgment.
Expenses of
Solicitation
The cost of proxy solicitation will be
borne by the Company. In an effort to have as large a representation
at the meeting as possible, special solicitation of proxies may, in certain
instances, be made personally, or by telephone, telegraph, or mail by one or
more Company employees. The Company will also reimburse brokers,
banks, nominees and other fiduciaries for postage and reasonable clerical
expenses of forwarding the proxy materials to their principals, the beneficial
owners of the Company's shares. The Company anticipates these fees and expenses
will be approximately $6,500.
May 15,
2008
AMERICAN
COMMUNITY PROPERTIES TRUST
Proxy for
Meeting of ACPT Shareholders on June 4, 2008
The
undersigned, a shareholder of American Community Properties Trust, (the
"Company") hereby appoints Edwin L. Kelly and Cynthia L. Hedrick, and each of
them individually, as Proxies to represent and vote all of the Company's Common
Shares held of record by the undersigned, each with full power of substitution,
at the Annual Meeting of Shareholders of the Company, to be held at the Holiday
Inn, James Craik Room, 45 St. Patrick's Drive, St. Charles, Maryland, on
Wednesday, June 4, 2008 at 10:00 a.m., EDT, or at any adjournment or
postponement thereof, as follows on the reverse side.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES AND WILL BE VOTED IN
ACCORDANCE WITH THE SPECIFICATIONS MADE BELOW. IF A CHOICE IS NOT
INDICATED WITH RESPECT TO ITEM (1) BELOW, THIS PROXY WILL BE VOTED "FOR ALL
NOMINEES". THIS PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS
EXERCISED.
|
1.
|
To
elect five trustees of the Company; three trustees for a three-year term
to expire at the 2011 Annual Meeting of Shareholders, one trustee for a
two-year term to expire at the 2010 Annual Meeting of Shareholders and one
trustee for a one-year term to expire at the 2009 Annual Meeting of
Shareholders.
|
|
Nominee
|
Vote
For Nominee
|
Vote
Withheld from Nominee
|
|
(a)
Donald J. Halldin for a three-year term
|
[ ]
|
[ ]
|
|
(b)
Eric P. Von der Porten for a three-year term
|
[ ]
|
[ ]
|
|
(c)
Ross B. Levin for a three-year term
|
[ ]
|
[ ]
|
|
(d)
Michael E. Williamson for a two-year term and
|
[ ]
|
[ ]
|
|
(e)
Thomas E. Green for a one-year term
|
[ ]
|
[ ]
|
|
2.
|
In
their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
postponement thereof.
|
MARK HERE FOR ADDRESS CHANGE AND NOTE
AT
LEFT [ ]
The
undersigned hereby acknowledges receipt of a copy of the Notice of Annual
Meeting and accompanying Proxy Statement dated May 15, 2008.
Please
complete, sign, and date this proxy card and return it promptly in the enclosed
postage prepaid envelope or otherwise to P.O. Box 2637, Waldorf, Maryland
20604.
|
_______________________________________
Name
of Shareholder
|
______________________
Number
of Shares Held
|
|
_______________________________________
Signature
|
______________________,
2008
Date
|
|
_______________________________________
Title
or Authority, if applicable
|
|
|
Note:
|
If
Shares are registered in more than one name, the signatures of all such
persons are required. A corporation should sign in its full
corporate name by a duly authorized officer, giving his or her
title. A partnership should sign in the partnership name by an
authorized person. Trustees, guardians, executors and
administrators should sign in their official capacity, giving full title
as such.
|
PLEASE
COMPLETE, SIGN AND DATE THIS PROXY AND RETURN IT
PROMPTLY