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 (Amendment No.)

Filed by the Registrant				þ
Filed by a Party other than the Registrant				o

Check the appropriate box:

o Preliminary Proxy Statement

o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ Definitive Proxy Statement

o Definitive Additional Materials

o Soliciting Material Pursuant to §240.14a-12

GOVERNMENT PROPERTIES TRUST, INC.

(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):

o No fee required.

o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
			Common Stock, par value $0.01 per share, of Government Properties Trust, Inc.
	(2)		Aggregate number of securities to which transaction applies:
			20,773,136 shares of Common Stock

	(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): $10.75 per share
	(4)		Proposed maximum aggregate value of transaction: $223,311,212.00 (equal to the sum of 20,773,136 shares of Common Stock multiplied by $10.75 per share).
	(5)		Total fee paid: $23,894.30

þ Fee paid previously with preliminary materials.

o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount Previously Paid:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

 

Government Properties Trust, Inc.
13625 California Street, Suite 310
Omaha, Nebraska 68154

 

March 12, 2007

 

Dear Stockholder:

 

A special meeting of stockholders of Government Properties Trust, Inc., a Maryland corporation, has been scheduled for Wednesday, April 4, 2007, at 10:00 a.m., Central time, at the Company’s headquarters, 13625 California Street, Suite 310, Omaha, Nebraska 68154. At the special meeting, we will ask you to consider and vote on a proposal to approve the merger of our company into Record Realty (US) LLC, an indirect wholly owned subsidiary of Record Realty Trust, an Australian listed property trust, such that our company will become an indirect wholly owned subsidiary of Record Realty Trust, hereinafter referred to as the merger. The Agreement and Plan of Merger, referred to as the merger agreement, dated as of October 23, 2006, by and among Record Realty Trust, Record Realty (US) LLC and our company, provides for the acquisition of our company by Record Realty Trust. If the merger is approved and completed, you will no longer have an ownership interest in our company and your shares of Government Properties Trust, Inc. (“GPT”) common stock will be converted into the right to receive $10.75 in cash, referred to as the merger consideration, without interest and less applicable withholding taxes, for each share of our common stock that you own. The merger consideration represents a 17.2% premium over the closing price of our common stock on October 23, 2006, the last trading day before the public announcement of the signing of the merger agreement.

 

At a meeting of our board of directors, the board unanimously: (i) approved the merger agreement; (ii) determined that the merger agreement and the terms and conditions of the merger are fair to, advisable and in the best interests of our company and our stockholders; and (iii) directed that the merger be submitted for approval at a special meeting of our stockholders. In reaching this determination, our board of directors considered a variety of factors, which are discussed in the attached proxy statement. Our board of directors recommends that all of our stockholders vote “FOR” the approval of the merger.

 

The merger cannot be completed unless the holders of a majority of the outstanding shares of our common stock entitled to be cast at the special meeting vote to approve the merger.

 

The accompanying Notice of Special Meeting of Stockholders and proxy statement explain the merger agreement and the merger and provide specific information concerning the special meeting. Please carefully read these materials and the appendices attached to the proxy statement.

 

Your vote is very important, regardless of the number of shares you own. To be certain that your shares are voted at the special meeting, please mark, sign, date and return promptly the enclosed proxy card in the postage-paid return envelope provided, whether or not you plan to attend the special meeting in person. If you do not return your proxy card or you abstain or do not instruct your broker or other nominee how to vote your shares, it will have the same effect as voting against the proposal to approve the merger. If you sign your proxy card without indicating your vote, your shares will be voted “FOR” the approval of the merger agreement and “FOR” adjournment of the special meeting, if necessary, to solicit additional proxies.

 

OUR BOARD OF DIRECTORS BELIEVES THAT THE MERGER IS IN THE BEST INTERESTS OF OUR COMPANY AND OUR STOCKHOLDERS. ACCORDINGLY, OUR BOARD HAS APPROVED THE MERGER AND RECOMMENDS THAT YOU VOTE “FOR” APPROVAL OF THE MERGER.

 

Please do not send your stock certificates to us at this time.

 

On behalf of our board of directors, thank you in advance for your continued support.

 

Sincerely,

 

Jerry D. Bringard

Chairman of the Board

 

This proxy statement is dated March 12, 2007 and is first being mailed to our stockholders on or about March 12, 2007.

 

GOVERNMENT PROPERTIES TRUST, INC.

13625 California Street, Suite 310
Omaha, Nebraska 68154
(402) 391-0010

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, APRIL 4, 2007

 

NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Government Properties Trust, Inc., will be held at the Company’s headquarters, 13625 California Street, Suite 310, Omaha, Nebraska 68154, on Wednesday, April 4, 2007 at 10:00 a.m., Central time, for the following purposes, all of which are more completely set forth in the accompanying proxy statement:

 

(1) to consider and vote upon a proposal to approve the merger of Government Properties Trust, Inc. on the terms and conditions set forth in the Agreement and Plan of Merger, dated as of October 23, 2006, by and among Record Realty Trust, Record Realty (US) LLC and Government Properties Trust, Inc., as described in the accompanying proxy statement; and

 

(2) to consider and vote upon a proposal to grant discretionary authority to adjourn the special meeting if necessary to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the merger.

 

Our board of directors recommends that all of our stockholders vote “FOR” the approval of the merger.

 

The board of directors has fixed March 9, 2007 as the record date for the determination of stockholders entitled to notice of and to vote at the special meeting and any adjournment or postponement thereof. Only those stockholders of record as of the close of business on that date will be entitled to notice of and to vote at the special meeting. At the close of business on the record date, there were 20,773,136 shares of our common stock entitled to vote at the special meeting. Please note that, under applicable law, holders of our common stock are not entitled to dissenters’ rights in connection with the merger.

 

By Order of the Board of Directors,

 

Thomas D. Peschio
President

 

Omaha, Nebraska

March 12, 2007

 

 

 

GOVERNMENT PROPERTIES TRUST, INC.
PROXY STATEMENT

 

TABLE OF CONTENTS

 

 

 

This proxy statement and the documents incorporated herein by reference contain forward-looking statements by us within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are based on our current expectations, assumptions, estimates and projections about our company and our industry. These forward-looking statements include our statements concerning whether and when the proposed merger will close, whether conditions to the proposed merger will be satisfied, and the effect of the proposed merger on our business and operating results. In addition, any of the words “believes,” “expects,” “anticipates,” “estimates,” “plans,” “projects,” “predicts” and similar expressions indicate forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements due to, among other things:

 

 

 

The statements made in this proxy statement represent our views as of the date of this proxy statement, and it should not be assumed that the statements made herein will remain accurate as of any future date. Except to the extent required by applicable law or regulation, we undertake no duty to any person to update the statements made in this proxy statement under any circumstances. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions.

 

For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see our reports that have been filed with the Securities and Exchange Commission, or SEC, under “Where You Can Find More Information.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. To understand the merger fully and for a more complete description of the legal terms of the merger, you should read carefully this entire document, including the merger agreement, attached as Appendix A, and the other documents to which we have referred you. See “Where You Can Find More Information” beginning on page 48. Page references are included in this summary to direct you to a more complete description of the topics.

 

Throughout this document, “Record Realty” refers to Record Realty Trust, an Australian listed property trust, “Record Realty (US)” refers to Record Realty (US) LLC, a Maryland limited liability company and wholly owned subsidiary of Record Realty, and references to “we”, “us”, “our,” the “Company” or “GPT” refer to Government Properties Trust, Inc. Also, we refer to our merger with Record Realty (US) as the “merger,” and the Agreement and Plan of Merger, dated as of October 23, 2006, by and among Record Realty, Record Realty (US) and GPT as the “merger agreement.”

 

GPT.  Government Properties Trust, Inc. invests primarily in single tenant properties under long-term leases to the U.S. government. Government Properties Trust, Inc. is a self-managed, self-administered real estate investment trust, or REIT. The Company is located at 13625 California Street, Suite 310, Omaha, Nebraska 68154. For additional information, please visit the Government Properties Trust, Inc. web site at www.gptrust.com. The Company’s telephone number is 402-391-0010.

 

Record Realty.  Record Realty is an investment vehicle managed by Record Funds Management Limited, a wholly owned subsidiary of Allco Finance Group, which applies structured finance techniques designed to achieve optimal returns on investments. Record Realty’s investment model targets quality properties with stable long-term cash flows from premium principal tenants (government or major corporates) and where there is a high probability of lease renewal. Record Realty’s strategy is primarily focused on investing in the residual equity positions of premium properties and property portfolios. Record Realty is located at Level 24 Gateway Building, 1 Macquarie Place, Sydney, Australia. Record Realty’s telephone number is 011-612-9255-4100.

 

Record Realty (US).  Record Realty (US) is a wholly owned subsidiary of Record Realty organized under the laws of Maryland. It was formed solely for the purposes of the merger with GPT and is engaged in no other business. Record Realty (US) is located at c/o Record Realty Trust, 153 East 53^rd Street, 55^th Floor, New York, New York 10022-4611. Record Realty (US)’s telephone number is 212-835-9090.

 

We encourage you to read carefully the merger agreement in its entirety, a copy of which is attached as Appendix A to this proxy statement, because it is the legal document that governs the merger. We are proposing a merger whereby we will become a wholly owned subsidiary of Record Realty. If the merger is approved, GPT will merge with and into Record Realty (US), with Record Realty (US) as the surviving company. We expect to complete the proposed merger shortly after the special meeting.

 

Immediately prior to the completion of the merger, all unvested shares of GPT restricted common stock shall vest in full and shall become outstanding shares of common stock for the purposes of the merger and the holders thereof shall be entitled to receive the merger consideration.

 

If the merger of GPT with and into Record Realty (US) is completed, each outstanding share of our common stock will be converted into the right to receive $10.75 in cash, without interest and less any applicable withholding taxes.

 

Prior to entering into the merger agreement, GPT had entered into a definitive agreement to purchase certain property in Denver, Colorado. The merger agreement provided for two potential reductions to the merger consideration (in an aggregate amount not to exceed $0.08 per share), both of which related to the acquisition of that Denver property.

 

The merger agreement provided that, if GPT did not amend the Denver property purchase agreement (in a manner favorable to GPT as described in the merger agreement) prior to the time the merger is consummated, the merger consideration would be reduced by $618,960, or approximately $0.03 per share. On November 15, the Denver property purchase agreement was so amended.

 

The merger agreement also provided for a reduction of the merger consideration, in an amount not to exceed $0.05 per share, in the event that (1) the Denver property purchase agreement was terminated prior to the completion of the merger or (2) at the time the merger is consummated, GPT had not completed the acquisition of the Denver property and (a) any default had occurred that was reasonably likely to result in the termination of the Denver property purchase agreement, (b) it was reasonably likely that any condition to closing on the purchase of the Denver property would not be satisfied or (c) GPT failed to provide to Record Realty specified evidence confirming that there were no existing defaults under the Denver property purchase agreement. On December 20, 2006, GPT completed the acquisition of the Denver property.

 

Because both contingencies have been satisfied in full, the merger consideration will not be decreased as contemplated by these provisions of the merger agreement, and, if the merger is completed, every stockholder will receive $10.75 per share.

 

Our stockholders will need to surrender their common stock certificates or grants evidencing ownership of restricted common stock in order to receive the $10.75 in cash per share after the consummation of the merger, but you should not send in any certificates or grants now. As soon as reasonably practicable after the effective time of the merger, Record Realty (US) will cause an exchange agent to send to our stockholders a letter of transmittal and instructions for surrendering certificates or grants representing shares of our common stock in exchange for the merger consideration. The letter of transmittal should be completed and returned to the designated exchange agent along with the stock certificates or grants representing shares of our common stock. After the letter of transmittal has been received and processed, our stockholders will be sent the merger consideration, without interest and less applicable withholding taxes, to which they are entitled.

 

Our common stock is listed on the New York Stock Exchange under the symbol “GPT.” On October 23, 2006, the last trading day preceding public announcement of the proposed merger, the closing share price of our common stock was $9.17. On March 9, 2007, the last practicable trading date before the printing of this proxy statement, the closing share price of our common stock was $10.54.

 

The merger will be a taxable transaction for United States federal income tax purposes that will be treated as a sale or exchange by U.S. stockholders of shares of our common stock for the merger consideration. In general, with respect to each share of our common stock owned, a U.S. stockholder will recognize gain or loss as a result of the stockholder’s receipt of the merger consideration equal to the difference between the merger consideration per share of our common stock exchanged in the merger and the stockholder’s adjusted tax basis in that share. Such gain or loss will be capital gain or loss if such share is a capital asset in the hands of the stockholder and will be long-term gain or loss if the stockholder has held such share for more than twelve (12) months as of the effective time of the proposed merger. In addition, because the merger may be a taxable transaction to non-U.S. stockholders, we intend to withhold a portion of the merger consideration that is payable to non-U.S. stockholders and, under certain circumstances, we may be required to withhold a portion of the merger consideration of U.S. stockholders under applicable tax laws. A non-U.S. stockholder is urged to consider selling his, her or its shares prior to the merger in order to be subject to generally more favorable provisions that govern the U.S. federal income tax consequences of a sale of REIT shares rather than the generally less favorable provisions that apply to distributions by REITs.

 

Tax matters can be complicated, and the tax consequences of the merger to you, including the application and effect of any state, local or foreign income and other tax laws, will depend on the facts of your own situation. You are encouraged to consult your own tax advisor to understand fully the tax consequences of the merger to you.

 

In connection with the merger, our financial advisor, Wachovia Securities, delivered a written opinion to our board of directors as to the fairness, from a financial point of view and as of the date of such opinion, of the merger consideration to be received by the holders of our common stock, subject to and based on the assumptions made, procedures followed, matters considered and limitations on the opinion and the review undertaken by Wachovia Securities, as set forth in the opinion. The written opinion of Wachovia is attached to this proxy statement as Appendix B. We encourage you to read this opinion carefully in its entirety for a description of the procedures followed, assumptions made, matters considered and limitations on the scope of review undertaken. The Wachovia opinion was provided to our board of directors in connection with its evaluation of whether the merger consideration was fair, from a financial point of view, to holders of GPT common stock and does not address any other aspect of the proposed merger. This opinion also does not address our underlying business decision to engage in the merger, the relative merits of the merger as compared to any alternative business strategies that might exist for us or the effect of any other transaction in which we might engage, and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to any matter relating to the merger. Wachovia Securities provided its opinion for the information and assistance of the Company’s board of directors in connection with their consideration of the transactions contemplated by the merger agreement.

 

Our board of directors has determined that the merger and the terms of the merger agreement are fair to, advisable and in the best interests of our company and our stockholders. Our board of directors has approved the merger agreement and recommends that our stockholders vote “FOR” the approval of the merger.

 

Date, Time and Place.  A special meeting of stockholders will be held on Wednesday, April 4, 2007, at 10:00 a.m., Central time, at the Company’s headquarters, at 13625 California Street, Suite 310, Omaha, Nebraska 68154.

 

Purpose of the Special Meeting.  At the special meeting, we will ask you to approve the merger. We will also ask you to approve a proposal to grant discretionary authority to adjourn the special meeting if necessary

to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the merger.

 

Record Date; Stock Entitled to Vote.  You are entitled to vote at the special meeting if you owned shares of our common stock at the close of business on March 9, 2007, the record date for the special meeting. You will have one vote at the special meeting for each share of our common stock you owned at the close of business on the record date. As of the record date, there were 20,773,136 shares of our common stock entitled to be voted at the special meeting.

 

Quorum.  The holders of a majority of the outstanding shares of common stock entitled to vote at meetings of stockholders as of the record date must be present, either in person or by proxy, to constitute a quorum at the special meeting. We will count abstentions, either in person or by proxy, and broker nonvotes (shares held by a broker or other nominee that does not have the authority to vote, and does not vote, on a matter but which otherwise submits a validly executed proxy) for the purpose of establishing a quorum. If at any time less than a quorum is present at the special meeting, it is expected that the special meeting will be adjourned or postponed until such time as a quorum is present.

 

Vote Required.  Assuming a quorum is present, the affirmative vote of a majority of the outstanding shares of our common stock entitled to be cast at the special meeting is required to approve the merger.

 

As of the record date, our directors and executive officers beneficially owned approximately 1.20% of the outstanding shares of our common stock entitled to vote at the special meeting.

 

Completion of the merger depends on meeting a number of conditions, including the following:

 

 

Unless prohibited by law, either Record Realty, Record Realty (US) or we could elect, in accordance with the merger agreement, to waive certain conditions that have not been satisfied and complete the merger anyway. The parties cannot be certain whether or when any of the conditions to the merger will be satisfied, or waived where permissible, or that the merger will be completed.

 

Unless the parties to the merger agreement agreed otherwise, the merger could not be completed until the period of time for any applicable review process by the Committee on Foreign Investment in the United States (“CFIUS”) under the Exon-Florio Amendment to the Defense Production Act of 1950, as amended, (“Exon-Florio”) has expired or CFIUS or a related governmental authority has provided a written notice to the effect that a review (if any) of the proposed merger has been concluded. On February 20, 2007, the parties were informed by the Department of Treasury that CFIUS has determined that there are no issues of national security sufficient to warrant a second stage investigation under Exon-Florio and that CFIUS’ review is completed with respect to the merger transaction.

 

Record Realty, Record Realty (US) and GPT can mutually agree at any time to terminate the merger agreement before completing the merger, even if our stockholders have already voted to approve the merger.

 

The merger agreement may also be terminated by:

 

 

The merger agreement provides that in the event that the merger agreement is terminated under specified circumstances, we may be required to pay a termination fee of $6.5 million to Record Realty. In other circumstances, Record Realty may be required to pay us a termination fee of $30 million.

 

The parties may amend the merger agreement at any time before the merger is completed, and may agree to extend the time within which any action required by the merger agreement is to take place. However, if our stockholders approve the merger at the special meeting, no amendment may thereafter be made that requires further approval of our stockholders without obtaining such approval.

 

Prior to the special meeting, Record Realty (US) intends to assign all of its right, title and interest in, to and under the merger agreement to a wholly owned Delaware subsidiary of Record Realty, pursuant to an assignment and assumption agreement to be entered into between Record Realty (US) and such subsidiary. This assignment will require the consent of GPT, which GPT intends to provide. Thereafter, the parties to the merger agreement intend to amend the merger agreement to clarify certain provisions of the merger agreement as a result of the assignment.

 

In considering the recommendation of our board of directors with respect to the merger agreement, you should be aware that some of the members of our management, one of whom is also one of our directors, have interests in the merger that are in addition to, or different from, your interests in the merger. These various interest are set forth in the section “The Merger — Interests of Our Directors and Executive Officers in the Merger” beginning on page 36.

 

Our board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement and the transactions contemplated by the merger agreement.

 

We have agreed that, while the merger is pending, we will not initiate or, subject to some limited exceptions, engage in discussions with any third party regarding extraordinary transactions such as a merger, business combination or sale of a material amount of assets or capital stock.

 

The holders of our common stock do not have rights under Maryland law, our jurisdiction of incorporation, to dissent from the merger and obtain the fair value of their shares.

 

If our stockholders have more questions about the merger or how to submit their proxy, or if they need additional copies of the proxy statement or the enclosed proxy card, they should contact our investor relations department at 402-548-4207.

 

We are furnishing this proxy statement to our stockholders as part of the solicitation of proxies by our board of directors for use at the special meeting, and at any adjournment of the special meeting.

 

We will hold the special meeting on Wednesday, April 4, 2007, at 10:00 a.m., Central time, at the Company’s headquarters, 13625 California Street, Suite 310, Omaha, Nebraska 68154.

 

At the special meeting, stockholders will be asked to consider and vote upon:

 

 

 

The close of business on March 9, 2007 has been fixed by our board of directors as the record date for the determination of holders of our common stock entitled to notice of, and to vote at, the special meeting and any adjournment of the special meeting. At the close of business on the record date, there were 20,773,136 shares of our common stock outstanding and entitled to vote. Each share of our common stock entitles the holder thereof to one vote at the special meeting on all matters properly presented at the special meeting.

 

Our stockholders of record may vote by mail or by attending the special meeting and voting in person. To vote by mail, simply mark the enclosed proxy card, date and sign it, and return it in the postage-paid return envelope provided.

 

If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from the holder of record that you must follow in order for your shares to be voted. Also, please note that if the holder of record of your shares is a broker, bank or other nominee and you wish to vote at the special meeting, you must bring a letter from the broker, bank or other nominee confirming that you are the beneficial owner of the shares.

 

The grant of a proxy on the enclosed form of proxy does not preclude a stockholder from voting in person at the special meeting. A stockholder may revoke a proxy at any time prior to its exercise by:

 

 

If you have instructed your bank, broker or other nominee to vote your shares, you must follow directions received from your bank, broker or other nominee to change or revoke your proxy.

 

All shares represented by properly executed proxies received prior to the special meeting (and not revoked) will be voted at the special meeting in the manner specified by the holders thereof. Properly executed proxies that do not contain voting instructions will be voted “FOR” the approval of the merger and “FOR” approval of adjournment of the special meeting if deemed necessary to permit the solicitation of additional proxies if there are not sufficient votes at the time of the special meeting to approve the merger. No proxy that is specifically marked “AGAINST” approval of the merger will be voted in favor of the adjournment proposal, unless it is specifically marked “FOR” the proposal to adjourn the special meeting to a later date.

 

A quorum, consisting of the holders of a majority of the shares of our common stock entitled to vote as of the record date, must be present in person or by proxy before any action may be taken at the special meeting. Shares of our common stock represented at the special meeting but not voting, including shares of our common stock for which proxies have been received but for which stockholders have abstained, will be treated as present at the special meeting for purpose of determining the presence or absence of a quorum for the transaction of all business at the special meeting but will not be counted as votes cast. Holders of record

of our common stock on the record date are entitled to one vote per share on each matter to be considered at the special meeting.

 

The proposal to approve the merger requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding on the record date and entitled to be cast at the special meeting. If a holder of our common stock abstains from voting or does not vote, either in person or by proxy, it will have the effect of a vote against the approval of the merger. If you hold your shares in “street name” through a broker, bank or other nominee, you must direct your broker, bank or other nominee to vote in accordance with the instructions you have received from your broker, bank or other nominee. Brokers, banks or other nominees who hold shares of our common stock in street name for customers who are the beneficial owners of those shares may not give a proxy to vote those customers’ shares in the absence of specific instructions from those customers. These non-voted shares will have the effect of votes against approval of the merger.

 

The proposal to approve adjournments of the special meeting if deemed necessary to permit the solicitation of additional proxies if there are not sufficient votes at the time of the special meeting to approve the merger, requires the affirmative vote of a majority of the shares of our common stock represented in person or by proxy at the special meeting, even if less than a quorum. Accordingly, not voting at the special meeting will have no effect on the outcome of this proposal, but abstentions will have the same effect as a vote against this proposal.

 

As of the record date, our directors and executive officers beneficially owned and had the right to vote shares of our common stock, or approximately 1.20% of the outstanding shares of common stock entitled to vote at the special meeting. See “Security Ownership of Certain Beneficial Owners and Management” beginning on page 46.

 

We will pay the cost of this solicitation, which will be made primarily by mail. Proxies also may be solicited in person, or by telephone, facsimile, Internet or similar means, by our directors, officers or employees without additional compensation. We will, on request, reimburse stockholders who are brokers, banks or other nominees for their reasonable expenses in sending proxy materials to the beneficial owners of the shares they hold of record.

 

You should be aware that certain members of our board of directors and our officers have interests in the merger that are different from, or in addition to, yours. See “The Merger — Interests of Our Directors and Executive Officers in the Merger” beginning on page 36.

 

Arrangements also will be made with custodians, nominees and fiduciaries to forward solicitation material to the beneficial owners of stock held of record by such persons, and we will reimburse such custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in connection with these arrangements

 

Stockholders should not send stock certificates with their proxies. A letter of transmittal with instructions for the surrender of our common stock certificates will be mailed to our stockholders as soon as practicable after completion of the merger.

 

At a meeting of the board of directors, our board unanimously (i) approved the merger agreement; (ii) determined that the merger agreement and the terms and conditions of the merger are fair to, advisable and in the best interests of our company and our stockholders; and (iii) directed that the merger agreement be submitted for approval at a special meeting of our stockholders. Our board of directors recommends that all of our stockholders vote “FOR” the approval of the merger. Our board of directors also recommends that our stockholders vote “FOR” approval of adjournment of the special meeting if deemed necessary to facilitate the solicitation of additional proxies if there are not sufficient votes at the time of the special meeting to approve the merger. See “The Merger — Our Reasons for the Merger” beginning on page 18.

 

If our stockholders have more questions about the merger agreement or the merger or how to submit their proxy, or if they need additional copies of the proxy statement or the enclosed proxy card, they should contact our investor relations department via e-mail at slatham@gptrust.com or call (402) 548-4207.

 

The following information describes the material aspects of the merger agreement and the merger. This description does not purport to be complete and is qualified in its entirety by reference to the appendices to this document, including the merger agreement. Our stockholders are urged to carefully read the appendices in their entirety.

 

Our board of directors has approved the merger whereby our company will become a wholly owned subsidiary of Record Realty. If the merger is approved and completed, GPT will merge with and into Record Realty (US), with Record Realty (US) as the surviving company in the merger. If the merger is completed, you will be entitled to receive the merger consideration of $10.75, without interest and less applicable withholding taxes, in exchange for each share of our common stock that you own at the effective time of the merger. We encourage you to read carefully the merger agreement in its entirety, a copy of which is attached as Appendix A to this proxy statement, because it is the legal document that governs the merger.

 

After the merger is completed, you will have the right to receive the merger consideration but you will no longer have any rights as a stockholder of GPT. You will receive your portion of the merger consideration after exchanging your stock certificates representing our common stock or grants representing shares of restricted common stock in accordance with the instructions contained in a letter of transmittal to be sent to you shortly after completion of the merger.

 

Our common stock is currently registered under the Exchange Act and is listed on the New York Stock Exchange under the symbol “GPT.” Following the merger, our common stock will be delisted from the New York Stock Exchange and will no longer be publicly traded, and the registration of our common stock under the Exchange Act will be terminated.

 

At a meeting of our board of directors on November 10, 2005, Thomas Peschio, GPT’s president, chief executive officer and director, made a presentation, at the request of the chairman of the board, regarding current conditions in the market in which GPT operates and the Company’s position in that market. Mr. Peschio indicated that GPT faced several challenges, including a falling stock price, rising interest rates and increased cost of capital. As possible courses of action, Mr. Peschio suggested that our board consider strategic alternatives including, but not limited to, raising additional capital for acquisitions, merging with another organization or going private. The board did not take any formal action at this meeting, but instead agreed to carefully consider these matters at future meetings.

 

At a meeting of the finance committee of our board of directors on February 22, 2006 and at the meeting of our board of directors on February 23, 2006, the board discussed GPT’s business plan and budget for 2006 and the issues surrounding its execution as presented by Mr. Peschio and Ms. Nancy Olson, the Company’s chief financial officer. During these discussions, the board again focused on the challenges facing GPT, most notably the divergence between the enterprise value of GPT and the trading price of its common stock which, in management’s opinion, did not fully reflect the enterprise value. These discussions highlighted the difficulties facing GPT in its efforts to achieve its strategic short- and long-term objectives. Following this discussion, the finance committee agreed to take certain actions in an effort to address this divergence, including requesting management to prepare a revised business plan addressing the strategic problems then

faced by the Company and commencing to execute the strategies proffered in the report to the committee entitled Fourth Quarter 2005 Operating Results and 2006 Business Plan and Budget.

 

At a meeting of our board of directors on April 27, 2006, the board reviewed GPT’s business plan and management’s financial models for 2006 and 2007. The board and the finance committee discussed whether GPT could continue to pay a dividend at the current rate.

 

On May 3, 2006, GPT declared a quarterly dividend of $0.1125 per share to stockholders of record on June 30, 2006. Heretofore, GPT had been paying a quarterly dividend of $0.15 per share. On this same date, GPT issued a press release announcing the reduced dividend and that the Company was currently unable to incrementally acquire properties at the same attractive spreads that it had in the past.

 

On May 3, 2006, GPT received a letter from Cadmus Capital Management, LLC (“Cadmus”), a significant stockholder. In its letter, Cadmus encouraged GPT to either sell its portfolio and return cash to its stockholders or to sell GPT to a strategic buyer.

 

On May 8, 2006, Cadmus filed a Schedule 13D with the Securities and Exchange Commission disclosing that Cadmus, together with the other members of the filing group, possessed shared voting power over 15.6% of GPT’s common stock. In this filing, Cadmus stated that it would not attend or vote at the annual meeting of stockholders scheduled to be held on June 1, 2006 and would encourage a limited number of other stockholders to do the same, with the intention of denying the presence of a quorum and thus delaying the meeting. Cadmus pointed out that, if the meeting was not held by August 17, 2006, a new record date would have to be set. If that occurred, Cadmus would have the opportunity, and intended to avail itself of such opportunity, to submit a proposal to be included on the agenda for the meeting. Specifically, Cadmus planned to nominate a new group of individuals chosen by Cadmus to be elected to GPT’s board of directors. If elected, these individuals might constitute a majority or the entirety of our board and would thus put Cadmus in a position to control the Company.

 

On May 15, 2006, GPT received an unsolicited offer from a competitor (“Bidder A”) to acquire GPT for $9.00 per share of GPT common stock, consisting of $2.00 per share in cash and $7.00 per share in stock of the acquiring company. In connection with the offer, the potential acquiror expressed a desire to enter into a two-week standstill and confidentiality agreement, during which time the two companies would negotiate and conduct due diligence on one another.

 

At the direction of our board, our management began interviewing financial advisors to, among other things, assist GPT in responding, to the extent necessary, to the Schedule 13D filing, the acquisition proposal and address the general concerns of the Company regarding the divergence between the trading price of the common stock and the enterprise value and the seeming illiquidity of the common stock and exploring strategic alternatives. After interviewing four financial advisors, management recommended that the board engage Wachovia Securities. The board was of the view that Wachovia Securities had a thorough knowledge of the Company and possessed significant experience in performing financial advisory services for similarly situated real estate investment trusts.

 

On May 21 and 22, 2006, our board held an extended special meeting to discuss the Schedule 13D filing by Cadmus and the unsolicited acquisition proposal by Bidder A. At this meeting, the board ratified the appointment of directors Jerry Bringard, Robert Peck and Thomas Peschio to a select committee to act as the liaison between the board and the outside advisors, with the goals of facilitating the board’s communication with the advisors and assisting the board in considering strategic alternatives. Mr. Bringard was selected because, as chairman, he is the senior representative of our board. Mr. Peschio was selected because, as Chief Executive Officer, he is most familiar with the daily operations of GPT. The directors believed the committee should also include a representative with a strong understanding of General Services Administration properties and the current market, as well as a solid business and legal background. Because our board believed that Mr. Peck best possessed these attributes, Mr. Peck was selected as a member of the committee.

 

Prior to the conclusion of those meetings, our board ratified the engagement of Wachovia Securities as GPT’s financial advisor and the engagement of Ballard Spahr Andrews & Ingersoll, LLP as GPT’s legal counsel.

 

During this special meeting, Wachovia Securities conducted a review of GPT’s current business plan, a general review of strategic and tactical alternatives and an overview of the due diligence, analytical and implementation process, including a proposed timeline for proceeding with a strategic alternatives review. The board reiterated its desire to examine its strategic alternatives thoroughly in order to gather the information necessary to make a strategic decision that would maximize the benefit to be realized by GPT’s stockholders.

 

Our board also considered how it should respond to the Cadmus letter and the acquisition proposal from Bidder A, including the possibility of implementing defensive or anti-takeover measures. Having decided to commence a broader review of strategic alternatives, the board decided not to respond at that time to either Cadmus or Bidder A, nor did it implement any defensive or anti-takeover measures.

 

Following a meeting of our board of directors on May 22 and 23, 2006, GPT issued a press release announcing the engagement of Wachovia Securities as its financial advisor and the commencement of a review by the board of strategic alternatives available to the Company.

 

On May 31, 2006, Cadmus requested that GPT enter into a confidentiality agreement in order to facilitate a more open dialogue about the strategic review process. Our board determined that such an agreement would not be appropriate at that time and notified Cadmus of its decision not to enter into such a confidentiality agreement. Wachovia Securities discussed with the board a preliminary valuation analysis, potential business plan enhancements and independent business plan considerations.

 

On June 1, 2006, the Company held its annual stockholders’ meeting, at which all of the Company’s incumbent directors were re-elected. No other action was taken at this meeting.

 

Throughout June 2006, Wachovia reviewed certain business, financial and other information, including financial forecasts, regarding GPT that were furnished to Wachovia Securities by management and prepared with management various business models, designed to project operating results for the Company as (i) a stand alone entity, (ii) a stand alone entity following the sale of certain assets, (iii) a party to a joint venture arrangement, and (iv) a landlord to tenants other than the General Services Administration of the United States of America.

 

Wachovia Securities also advised our board of directors regarding preliminary valuation analyses, potential business plan enhancements and independent business plan considerations.

 

On June 28 and 29, 2006, our board of directors held a special meeting. The board began the meeting by discussing the advantages and disadvantages of GPT remaining an independent public company. Thereafter, Wachovia Securities advised the board with respect to the Company’s valuation assuming that GPT were to remain an independent public company, including the implementation of certain of management’s proposed independent business plan enhancements, and compared this analysis to potential private market valuations available to GPT. Wachovia Securities also reviewed the issues involved in a potential change in control of GPT. In addition, Wachovia Securities presented background information on 19 companies that had contacted Wachovia Securities, without solicitation, about GPT’s strategic alternatives review subsequent to the Company’s May 22, 2006 press release.

 

Our board and Wachovia Securities discussed how to effectively explore opportunities to create additional stockholder value through a potential sale or merger of GPT as compared to continuing to operate the Company on a stand-alone basis. After a thorough discussion, the board directed management to work with Wachovia Securities in preparing a confidential information memorandum for such purpose.

 

Over the course of the next seven weeks, Wachovia Securities identified and contacted 139 prospective financial buyers and 46 prospective strategic buyers of GPT that had a potential interest in acquiring assets tenanted by the General Services Administration and 47 confidentiality agreements were executed with these interested parties. On a regular basis, Wachovia Securities provided updates on the status of its efforts to identify prospective purchasers of GPT to management, to the select committee and to our board of directors as a whole.

 

The board of directors held a meeting on July 26, 2006, during which Wachovia Securities provided an interim update on the process of identifying and contacting parties that might be interested in pursuing a

strategic transaction with GPT. The board stressed that Wachovia Securities should continue this process and conduct a broad search for potentially interested and suitable counterparties.

 

From August 14 through August 18, 2006, management of GPT and Wachovia Securities made management presentations to the bidders, both in person and by telephone.

 

On August 22 and 23, 2006, Wachovia Securities received nine non-binding proposals, including a proposal from Record Realty. Seven of these proposals ranged from $9.00 to $9.70 per share and two proposals were below the then current stock price.

 

On August 25 and 26, 2006, our board of directors met to review each of these proposals. Wachovia Securities presented a financial analysis of each of these proposals to the board. After an extensive discussion, the board authorized Wachovia Securities to pursue a second round of proposals from those parties that had proposed or indicated a willingness and ability to revise their proposal to at least $9.50 per share. Five bidders, including Bidder A and Record Realty, with initial or revised proposals ranging from $9.50 to $9.70 per share were permitted to participate in the second round of bidding.

 

Throughout September 2006, all of the bidders conducted additional due diligence, including participating in management meetings and property tours.

 

On September 6 and 7, 2006, Wachovia Securities and management met with representatives of Bidder A to conduct due diligence on this bidder. This due diligence was conducted because Bidder A’s proposal included both cash and equity components, while the other four proposals offered consideration comprised entirely of cash. The due diligence included a review of Bidder A’s historical and projected financial information and Bidder A’s potential synergies with the Company.

 

On September 13, 2006, Wachovia Securities received a non-binding proposal from a party that had not previously submitted a proposal for $10.00 per share, subject to GPT’s execution of an exclusivity agreement. GPT was unwilling to grant exclusivity and the bidder subsequently withdrew its proposal and did not otherwise participate in the process.

 

On September 22, 2006, Wachovia Securities presented to our board the summary of the due diligence conducted on Bidder A, including a pro forma financial analysis based on management’s assessment of the potential combination of GPT and Bidder A.

 

On October 4, 2006, the second round bids were due. Two written proposals were submitted at per share values at or above $10.00 per share. Wachovia Securities also received verbal indications from certain other bidders that were below $10.00 per share. These parties indicated that they would not move forward at a per share offer at or above $10.00 per share. Record Realty submitted a proposal to acquire all of GPT’s outstanding common stock for $10.55 per share, payable in cash. As part of its proposal, Record Realty requested a two-week exclusivity agreement to conduct limited additional due diligence and to complete its board approval process. Bidder A proposed to acquire all of GPT’s outstanding stock for $10.00 per share, payable in both cash and equity.

 

On the evening of October 4, 2006, Wachovia Securities, Record Realty and legal counsel for Record Realty and GPT held a conference call to discuss and clarify certain points in Record Realty’s bid.

 

On October 5 and 6, 2006, our board of directors met to discuss the two proposals and to review the updated financial analyses related to remaining an independent public company. The board also discussed the challenges of remaining an independent public company, and compared the estimated present value of GPT’s common stock, assuming successful execution of the Company’s updated business plan, with the values represented in the two proposals. The comparative analyses were provided using present, pro-forma and net present value terms.

 

After extensive discussions, our board unanimously agreed to enter into a two-week exclusivity period with Record Realty to allow it to conduct limited additional due diligence, such as the finalization of reports by third-party consultants and property visits, and to secure its board approval. As consideration for GPT

entering into this exclusivity period, Record Realty increased its proposal to $10.75 per share, payable in cash. The parties signed the exclusivity letter on October 10, 2006.

 

Between October 10 and October 23, 2006, GPT and Record Realty negotiated the merger agreement and completed its due diligence. On October 18, 2006, the chief executive officer of Record Realty met with management and other employees of the Company at GPT’s headquarters.

 

On October 22 and 23, 2006, our board of directors met to consider the provisions of the merger agreement and to discuss the risks and benefits of entering into the merger agreement.

 

On October 23, 2006, Wachovia Securities made a presentation and rendered an oral opinion to our board of directors, subsequently confirmed in writing, that, as of October 23, 2006, and subject to and based on the assumptions made, procedures followed, matters considered and limitations on its opinion and the review undertaken by Wachovia Securities, as set forth in the opinion, the merger consideration to be received by the holders of shares of GPT’s common stock pursuant to the merger agreement was fair, from a financial point of view, to such holders. This opinion is described in “Opinion of Our Financial Advisor” beginning on page 20 and attached to this proxy statement as Appendix B. Following the consideration of the merger agreement, the discussions of the risks and benefits of the merger and the rendering of the fairness opinion, the board unanimously voted to enter into the merger agreement.

 

At 9:00 a.m., Eastern Standard Time, on October 23, 2006, the exclusivity agreement with Record Realty expired. GPT and Record Realty finalized the negotiations on the merger agreement on October 23, 2006 and, at approximately 8:00 p.m., Eastern Standard Time, the parties executed the merger agreement and issued press releases announcing the merger.

 

Our board of directors, at its meeting held on October 23, 2006, considered the merger agreement and determined it to be fair to, advisable and in the best interests of our company and our stockholders. In evaluating the merger, our board of directors consulted with management, as well as our legal and financial advisors, and considered a number of factors. Listed below are the material factors that our board of directors considered in its decision:

 

 

 

 

 

 

 

The foregoing discussion of the factors considered by our board of directors is not intended to be exhaustive, but, rather, includes the material factors considered by our board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, our board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. Our board of directors considered all these factors as a whole, and overall considered the factors to be favorable to, and supportive of, its determination.

 

For the reasons set forth above, our board of directors determined that the merger agreement and the merger are in the best interests of our company and our stockholders, and approved the merger agreement. Our board of directors recommends that you vote “FOR” the approval of the merger.

 

We do not, as a matter of course, make public projections as to our future performance or earnings. In general, our forecasts are prepared solely for internal use and capital budgeting and other management decisions. From time to time however, we have published guidance with respect to General & Administrative expenses, Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”). These forecasts are inherently subjective and uncertain and, thus, susceptible to interpretation and revision based on actual experience and business and industry developments. However, in connection with the discussions concerning the merger, we furnished to Record Realty certain financial forecasts prepared by our management that were based upon our performance through December 2015. The forecasts were adjusted to reflect the acquisition of the Denver property, which acquisition was not complete until December 2006. The forecasts included projections of total gross revenue of approximately $45.2 million and $58.2 million for fiscal 2006 and 2007, respectively; total operating expenses of $12.4 million and $14.9 million for fiscal 2006 and 2007, respectively; and cash flow after debt service of $15.5 million and $17.8 million for fiscal 2006 and 2007, respectively.

 

The forecasts referred to above were not prepared with a view to public disclosure, and are included in this proxy statement only because this information was made available to Record Realty. The forecasts were not prepared with a view to compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. Neither our

independent auditor, nor any other independent accountants have compiled, examined or performed any procedures with respect to the forecasts. The forecasts were forward-looking statements and represented our management’s best estimates as of September, 2006 and do not reflect events after that date. While presented with numeric specificity, the forecasts reflect, and are based upon, numerous assumptions made by our management with respect to industry performance, interest rates, general business, economic, market and financial conditions, and other matters, including assumed effective tax rates consistent with historical levels for us, all of which are difficult to predict, many of which are beyond our control and none of which was subject to approval by Record Realty. Accordingly, there can be no assurance that the assumptions made in preparing the forecasts will prove accurate. The inclusion of these forecasts should not be regarded as an indication that GPT or Record Realty, or their respective affiliates or representatives, considered or consider such data to be a reliable prediction of future events, and such data should not be relied upon as such. Except to the extent required under applicable laws, we do not intend to make publicly available any update or other revisions to the forecasts to reflect circumstances existing after the date of the preparation of the projections. See “Cautionary Statement Concerning Forward-Looking Statements” on page 1.

 

The Company’s board of directors retained Wachovia Securities to act as its exclusive financial advisor with respect to the exploration of strategic alternatives and to provide a fairness opinion in connection with the transactions contemplated by the resulting merger agreement. The Company’s board of directors selected Wachovia Securities to act as its exclusive financial advisor based on Wachovia Securities’ qualifications, expertise and reputation. Wachovia Securities rendered its oral opinion, subsequently confirmed in writing, to the board of directors that, as of October 23, 2006, the merger consideration to be received by holders of shares of the Company’s common stock pursuant to the merger agreement was fair, from a financial point of view, to such holders. The opinion is subject to and based upon the assumptions made, procedures followed, matters considered and limitations on the opinion and the review undertaken in connection with such opinion.

 

The full text of Wachovia Securities’ written opinion, dated October 23, 2006, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the opinion and the review undertaken in connection with the opinion, is attached as Appendix B to this proxy statement. The opinion of Wachovia Securities is for the use of the Company’s board of directors in connection with its consideration of the merger and relates only to the fairness, from a financial point of view, of the merger consideration to the Company’s stockholders. This opinion does not and shall not constitute a recommendation to any holder of shares of the Company’s common stock as to how such holder should vote in connection with the merger agreement or any other matter related thereto. You should carefully read the opinion in its entirety.

 

In arriving at its opinion, Wachovia Securities, among other things:

 

 

 

 

 

In connection with its review, Wachovia Securities has assumed and relied upon the accuracy and completeness of the foregoing financial and other information, including all accounting, legal and tax information, and did not and does not assume any responsibility for, nor did it conduct, any independent verification of such information. Wachovia Securities relied upon the assurances of the management of the Company that they are not aware of any facts or circumstances that would make such information about the Company inaccurate or misleading.

 

Wachovia Securities has been provided with prospective financial information of the Company. Wachovia Securities has discussed such prospective financial information, as well as the forecasts, estimates, judgments, and assumptions upon which such prospective financial information is based, with the management of the Company. Wachovia Securities has assumed that the forecasts, estimates, judgments, allocations and assumptions expressed by the management of the Company in such prospective financial information have been reasonably formulated and that they reflect the best currently available forecasts, estimates, judgments, allocations and assumptions of the management of the Company regarding such prospective financial information. Wachovia Securities assumes no responsibility for, and expresses no view as to the preparation or verification of any such prospective financial information or the forecasts, estimates, judgments, or assumptions upon which they are based. Wachovia Securities has not conducted any physical inspection or assessment of the facilities or assets of the Company. In addition, Wachovia Securities has not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance sheet assets or liabilities) of the Company or any of its subsidiaries and has not been furnished with any such evaluations or appraisals.

 

In rendering its opinion, Wachovia Securities has assumed that the merger will be consummated on the terms described in the merger agreement, without waiver of any material terms or conditions, and that each party to the merger agreement and the agreements contemplated thereby will perform all the covenants and agreements required to be performed by it thereunder without any consents or waivers of the other parties thereto. Wachovia Securities also assumed that, in the course of the parties to the merger agreement obtaining any necessary legal, regulatory or third party consents and/or approvals, no restrictions will be imposed or delay will be suffered that will have a material adverse effect on the Company, or on the merger or on other actions contemplated by the merger agreement in any way meaningful to Wachovia Securities’ analysis. Wachovia Securities also has assumed that Record Realty will be able to obtain any financing arrangements necessary to pay to all holders of the Company’s common stock (other than Excluded Shares (as that terms is defined in the merger agreement)) the merger consideration due to them. Wachovia Securities further assumed that the final merger agreement and the agreements contemplated thereby will not differ in any material respect from the drafts furnished to and reviewed by Wachovia Securities. The opinion is necessarily based upon economic, market, financial and other conditions and the information made available to Wachovia Securities as of the date thereof. Although subsequent developments may affect the opinion, Wachovia Securities does not have any obligation to update, revise or reaffirm the opinion. In addition, Wachovia Securities is expressing no view on the terms of the merger. The opinion does not address the relative merits of the merger or other actions contemplated by the merger agreement compared with other business strategies or transactions that may have been considered by the Company’s management, its board of directors or any committee thereof, nor should it be construed as a recommendation to any stockholder how they should vote.

 

The summary set forth below does not purport to be a complete description of the analyses performed by Wachovia Securities, but describes, in summary form, the material elements of the presentation that Wachovia

Securities made to the Company’s board of directors in connection with the preparation of the fairness opinion by Wachovia Securities. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its fairness opinion, Wachovia Securities considered the results of all of the analyses that it conducted as a whole, and did not attribute any particular weight to any particular analyses or factors considered by it. Accordingly, the analyses and factors listed in the tables and described below must be considered as a whole. To consider any portion of such analyses and factors, without considering all analyses and factors as a whole, could create a misleading or incomplete view of the process underlying Wachovia Securities’ fairness opinion.

 

Historical Stock Trading Analysis.  Wachovia Securities reviewed publicly available historical trading prices and volumes for the Company’s common stock for the 12-month period ending October 20, 2006. Wachovia Securities compared the $10.75 in cash per common share to be received by holders of shares of the Company’s common stock pursuant to the merger agreement to (i) the unaffected share price (the closing price on May 22, 2006, the day the Company issued a press release announcing that it was exploring strategic alternatives), (ii) the average closing price of the Company’s common stock on October 20, 2006, and (iii) the average closing prices of the Company’s common stock during the 10-day, 30-day, 60-day, 90-day, and 180-day periods preceding the announcement of the merger. The $10.75 per share offer price represents a premium to the historical average prices of the Company’s common shares as follows:

 

 

Comparable Companies Analysis.  Wachovia Securities compared the Company’s financial, operating and stock market data to the following publicly traded REITs that it believed were reasonably comparable to the Company:

 

American Financial Realty Trust

Capital Lease Funding, Inc.

National Retail Properties, Inc.

Lexington Corporate Properties Trust

Realty Income Corporation

Spirit Finance Corporation

Trustreet Properties, Inc.

 

Wachovia Securities calculated, among other things, the multiple of per share closing prices to estimated funds from operations (“FFO”) for 2007 for the comparable companies, based upon projected financial information from the Thompson Financial Company First Call (“First Call”) consensus estimates and closing share prices on October 20, 2006. Wachovia Securities calculated a range consisting of the high, mean, median and low multiples of per share price to projected FFO for the comparable companies and applied this range to the estimates of the Company’s projected FFO for 2007 prepared by management and First Call’s consensus estimates of the Company’s projected FFO for 2007. This analysis produced an implied per share value range for shares of the Company’s common stock of $6.67 to $10.09. The range of implied share prices for the Company’s common stock is outlined below.

 

 

Wachovia Securities selected the companies reviewed in the comparable companies analyses based upon, among other factors, those companies’ specialization in the net lease and/or office REIT sector, asset quality, market capitalization, and capital structure. None of the companies utilized in the above analyses, however, is identical to the Company. Accordingly, a complete analysis of the results of the foregoing calculations cannot be limited to a quantitative review of such results and involves complex considerations and judgments concerning the differences in the financial and operating characteristics of the comparable companies and other factors that could affect the public trading value of the comparable companies, as well as the potential trading value of the Company.

 

Selected Transactions Analysis.  Wachovia Securities reviewed selected transactions involving publicly traded net lease and/or office REITs since January 1, 2004, which, in Wachovia Securities’ professional judgment, were most relevant to the proposed merger. In connection with this analysis, Wachovia Securities reviewed publicly available information relating to FFO and premiums paid in connection with these transactions. The selected transactions were:

 

 

Wachovia Securities calculated, among other things, a range consisting of the high, mean, median and low transaction prices to forward FFO multiples for the selected transactions and applied this range to the estimates of the Company’s projected FFO for 2007 prepared by management and First Call’s consensus estimates of the Company’s FFO for 2007. This analysis produced an implied per share value range for shares of the Company’s common stock of $7.14 to $12.37, as shown in the chart below.

 

 

Premiums Paid Analysis.  Wachovia Securities reviewed the same transactions used in the selected transactions FFO analysis, using publicly available information, to determine the premium or discount paid by the acquirer relative to the closing market price of the target companies’ common shares for the day prior to, and relative to the average of closing market prices of the target companies’ common shares for the 10-day, 30-day, 60-day and 90-days prior to, the public announcement of the respective transaction, as shown in the chart below.

 

 

Wachovia Securities then calculated, among other things, a range consisting of the high, mean, median and low premium paid in these transactions and applied these figures to the closing price of the Company’s common stock on the trading day prior to the public announcement of the merger and the 10-day, 30-day, 60-day and 90-day prices prior to the announcement.

 

This analysis resulted in the following range of implied prices per share of the Company’s common stock:

 

 

Because the market conditions, rationale and circumstances surrounding each of the transactions analyzed in the various selected transaction analyses were specific to each transaction, and because of the inherent differences between the Company’s businesses, operations and prospects and those of the comparable acquired companies, Wachovia Securities believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the analysis. Accordingly, Wachovia Securities also made qualitative judgments based on its professional experience concerning differences between the characteristics of these transactions and the proposed merger that could affect the Company’s acquisition values and those of such acquired companies.

 

Dividend Discount Analysis.  Wachovia Securities performed a dividend discount analysis of shares of the Company’s common stock using the Company’s management’s FFO per share estimates through 2011 and the Company’s management’s projected dividends per share for the fourth quarter of 2006 through 2011. Wachovia Securities calculated the implied present values of projected cash dividends for the Company for the fourth quarter of 2006 through 2011 using discount rates ranging from 10.0% to 11.0%. Wachovia Securities then calculated implied terminal values in 2011, based upon multiples ranging from 11.0x to 13.0x 2012 FFO per share, which were derived by applying a 3.0% growth rate to projected annualized fourth quarter 2011 projected FFO per share. These implied terminal values were then discounted at discount rates 10.0% to 11.0% to arrive at implied present values. Discount rates utilized in this analysis were derived from the capital asset pricing model and historic REIT equity returns and multiples were derived based upon the Company’s peers’ forward FFO multiples. Wachovia Securities derived a range of implied per share prices for the Company’s common stock based on the sum of the respective implied present value of the Company’s

projected cash dividends and the implied present value of the Company’s terminal value in 2011. This analysis produced an estimated per share value range of $8.27 to $9.79 for the Company’s common shares.

 

Discounted Cash Flow Analysis.  Wachovia Securities performed a discounted cash flow analysis of the Company, based upon the projected unleveraged cash flows provided by the Company’s management. Wachovia Securities calculated a range of equity values per share of the Company’s common stock, based upon the sum of the discounted net present values of the Company’s unleveraged free cash flows for the fourth quarter of 2006 through 2011, plus the discounted net present value of the Company’s terminal value. Applying a range of discount rates from 7.7% to 8.1%, Wachovia Securities calculated an estimated per share value range of $8.32 to $9.84 for the Company’s common shares. Discount rates utilized in this analysis were derived from historic REIT equity returns and from the calculation of the Company’s weighted average cost of capital.

 

Net Asset Value Analysis.  Using information provided by the Company’s management, Wachovia Securities calculated the net asset value per share of the Company’s common stock. For this analysis, Wachovia Securities applied a range of blended capitalization rates from 7.0% to 7.5% to management’s projected 12 month forward cash net operating income. The capitalization rates utilized in this analysis were derived from numerous sources including but not limited to industry sources and a review of real estate transactions that Wachovia Securities determined to be relevant to this transaction. The resulting gross real estate value was combined with the value of cash and other assets to arrive at a total asset value. Total liabilities and transaction related expenses were then subtracted from such total asset value to arrive at an estimated net asset value per share of the Company’s common stock. In applying the range of blended capitalization rates, Wachovia Securities took into consideration current market conditions and property characteristics. The net asset valuation analysis produced an estimated per share value range of $8.97 to $10.91 for the Company’s common shares.

 

In performing its analyses, Wachovia Securities made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the Company’s control. No company, transaction or business used in the analyses described above is identical to the Company or the proposed merger. Any estimates contained in Wachovia Securities’ analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by these estimates. The analyses performed were prepared solely as a part of Wachovia Securities’ analysis of the fairness, from a financial point of view, to the holders of the Company’s common shares, as of October 23, 2006, and subject to and based upon the assumptions made, procedures followed, matters considered and limitations on the opinion and the review undertaken in such opinion, of the merger consideration to be received by such holders pursuant to the terms of the merger agreement, and were conducted in connection with the delivery by Wachovia Securities of its fairness opinion, dated October 23, 2006. Wachovia Securities’ analyses do not purport to be appraisals or to reflect the prices at which the shares of the Company’s common stock might actually trade. The merger consideration to be received by the holders of the Company’s common shares pursuant to the merger agreement was determined through negotiations between the Company and Record Realty and members of their respective senior management teams and their respective advisors, and was unanimously approved by the Company’s board of directors.

 

Wachovia Securities’ opinion was one of the many factors taken into consideration by the Company’s board of directors in making its determination to approve the merger. Wachovia Securities’ analyses summarized above should not be viewed as determinative of the opinion of the Company’s board of directors with respect to the value of the Company’s common shares or of whether the Company’s board of directors would have been willing to agree to a different form of consideration. Wachovia Securities’ opinion does not address the merits of the underlying decision by the Company to enter into the merger agreement, including the relative merits of the merger compared with other business strategies or transactions that may have been considered by the Company’s management, its board of directors or any committee thereof.

 

Wachovia Securities, the trade name of Wachovia Capital Markets, LLC, is a nationally recognized investment banking and advisory firm, and a subsidiary of Wachovia Corporation. Wachovia Securities, as part of its investment banking and financial advisory business, is continuously engaged in the valuation of

businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. Prior to the rendering of the fairness opinion and prior to the date of the merger agreement, Wachovia Securities had no relationship with Record Realty, Record Realty (US) or their affiliates. Wachovia Securities and its affiliates (including Wachovia Corporation and its affiliates) may maintain relationships with the Company, Record Realty and Record Realty (US), as well as any of their principals or affiliates, in the future. Additionally, in the ordinary course of its business, Wachovia Securities may trade in securities of the Company and in securities of affiliates of Record Realty and Record Realty (US) for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. In November 2005, an affiliate of Wachovia Securities served as administrative agent on the Company’s $65 million revolving credit facility. In November 2006, Wachovia Securities closed the commercial mortgage backed securities financing for two of the Company’s properties totaling $55.7 million.

 

Pursuant to an engagement letter dated May 22, 2006, we have agreed to pay Wachovia Securities an advisory fee of approximately $4.3 million in connection with the consummation of the merger. In connection with Wachovia Securities’ delivery of its fairness opinion, we paid $750,000, and this fee will be credited in full against the advisory fee paid in connection with the merger. In addition, we have agreed to reimburse Wachovia Securities for its expenses and to indemnify Wachovia Securities and certain related parties against certain liabilities and expenses related to or arising out of Wachovia Securities’ engagement.

 

Structure.  We encourage you to read carefully the merger agreement in its entirety, a copy of which is attached as Appendix A to this proxy statement, because it is the legal document that governs the merger. We are proposing a merger whereby GPT will merge with and into Record Realty (US), with Record Realty (US) as the surviving entity.

 

Merger Consideration.  The merger agreement provides that each share of our common stock shall be converted into the right to receive $10.75 in cash, without interest and less applicable withholding taxes.

 

Reductions to Merger Consideration.  Prior to entering into the merger agreement, GPT had entered into a definitive agreement to purchase certain property in Denver, Colorado. The merger agreement provided for two potential reductions to the merger consideration (in an aggregate amount not to exceed $0.08 per share), both of which related to the acquisition of that Denver property.

 

The merger agreement provided that, if GPT did not amend the Denver property purchase agreement (in a manner favorable to GPT as described in the merger agreement) prior to the time the merger is consummated, the merger consideration would be reduced by $618,960, or approximately $0.03 per share. On November 15, 2006, the Denver property purchase agreement was so amended.

 

The merger agreement also provided for a reduction of the merger consideration, in an amount not to exceed $0.05 per share, in the event that (1) the Denver property purchase agreement was terminated prior to the completion of the merger or (2) at the time the merger is consummated, GPT had not completed the acquisition of the Denver property and (a) any default had occurred that was reasonably likely to result in the termination of the Denver property purchase agreement, (b) it was reasonably likely that any condition to closing on the purchase of the Denver property would not be satisfied or (c) GPT failed to provide to Record Realty specified evidence confirming that there were no existing defaults under the Denver property purchase agreement. On December 20, 2006, GPT completed the acquisition of the Denver property.

 

Because both contingencies have been satisfied in full, the merger consideration will not be decreased as contemplated by these provisions of the merger agreement, and, if the merger is completed, every stockholder will receive $10.75 per share.

 

Our stockholders should not return their stock certificates or grants with the enclosed proxy, and stock certificates and grants should not be forwarded to us, Record Realty or any other party until you have received the letter of transmittal, which will be sent to you after we complete the merger.

 

Treasury Shares.  Upon consummation of the merger, any shares of our common stock that are held by us as treasury stock will be canceled and retired and no merger consideration will be given with respect to those shares.

 

Promptly after the completion of the merger, but in no event more than three business days after the merger, the exchange agent, selected by Record Realty, will mail to each holder of record of shares of our common stock a letter of transmittal and instructions for surrendering certificates representing shares of our common stock or grants representing shares of restricted stock in exchange for the merger consideration. Upon surrender of a stock certificate of our common stock or grants of restricted stock for exchange and cancellation to the exchange agent in accordance with terms of the letter of transmittal and instructions provided, together with a duly executed letter of transmittal, the holder of such stock certificate or grant will be entitled to receive the merger consideration and the stock certificate for our common stock or grant of restricted stock so surrendered will be canceled.

 

After completion of the merger, no transfers of our common stock issued and outstanding immediately prior to the completion of the merger will be allowed. Any stock certificates representing shares of our common stock or grants representing restricted stock that are presented for transfer after the completion of the merger will be canceled and exchanged for the merger consideration, without interest and less applicable withholding taxes.

 

Each restricted share of our common stock that we issued pursuant to our equity compensation plan shall become fully vested and will be converted into, and shall be cancelled in exchange for, the right to receive the per share merger consideration, less any applicable withholding taxes.

 

The Deposit

 

The completion of the merger is not conditioned on Record Realty obtaining financing to pay the merger consideration. However, Record Realty (US) has placed $30 million into an escrow account as a deposit. The deposit shall be held by an escrow agent in accordance with the terms of an escrow agreement and shall either (i) be applied to the merger consideration if the merger is completed; (ii) be delivered to us if Record Realty breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in the merger agreement, which breach or failure to perform is reasonably unlikely to be able to cured by June 30, 2007; or (iii) be returned to Record Realty (US) if the merger is not completed for any other reason.

 

Completion of the merger is subject to the satisfaction of certain conditions set forth in the merger agreement, or the waiver of such conditions by the party entitled to do so, at or before the closing date of the merger. Each of the parties’ obligations to consummate the merger under the merger agreement is subject to the following conditions:

 

 

 

In addition to the other conditions set forth above, our obligation to consummate the merger under the merger agreement is subject to the following conditions, which may be waived by us:

 

 

In addition to the foregoing conditions, the obligation of Record Realty to consummate the merger under the merger agreement is subject to the following conditions, which may be waived by Record Realty:

 

 

Under the merger agreement, the term “material adverse effect”, means, with respect to us, a material adverse effect on (x) the assets, condition (financial or otherwise), business or results of operations of GPT and any of our subsidiaries, taken as a whole or (y) our ability to consummate the transactions contemplated by, or to perform our obligations under, the merger agreement prior to June 30, 2007; provided, however, that none of the following, in and of itself or themselves, shall be considered in determining whether a material adverse effect shall have occurred under clause (x) of this definition:

 

 

The merger could not be completed until the period of time for any applicable review process by CFIUS under Exon-Florio shall have expired or CFIUS (or a related governmental authority) has provided written notice to the effect that review (if any) of the proposed merger has been concluded. On February 20, 2007, the parties were notified by the Department of Treasury that CFIUS had determined that there are no issues of national security sufficient to warrant a second stage investigation under Exon-Florio and that CFIUS’ review is completed with respect to the merger transaction.

 

Record Realty must have received statements of lease from the General Services Administration of the United States of America dated no more than 120 days prior to the closing date of the merger confirming that neither we, nor any of our subsidiaries, is in default of any of our obligations as landlord with respect to at least 90% of the aggregate square footage leased by the United States of America under leases with GPT and our subsidiaries. Record Realty has received statements of lease with respect to all square footage leased by the United States of America as of February 23, 2007.

 

Record Realty must also obtain consent to the merger from each mortgagee of any of our properties that is encumbered by a mortgage. In connection with the merger, Record Realty wishes to change the

organizational structure of some of our subsidiaries. At the time Record Realty requests the mortgagees to consent to the merger, it will also request applicable mortgagees to consent to changes in organizational structure for some of our subsidiaries. Obtaining mortgagee consents to changes in organizational structure is not a condition that must be met in order to complete the merger. If Record Realty has not obtained consent to the merger from a mortgagee because of Record Realty’s efforts to obtain consent to a change in organizational structure, the requirement that the consent of such mortgagee to the merger be obtained shall be deemed waived. We have agreed to cooperate with Record Realty in its efforts to obtain the mortgagee consents.

 

The merger agreement contains certain covenants of GPT regarding the conduct of its business pending consummation of the merger. These covenants, which are contained in Article V of the merger agreement included as Appendix A hereto, are briefly described below.

 

Except for certain actions provided for in the merger agreement, until the merger is consummated or the merger agreement is terminated, we will use our commercially reasonable best efforts to carry on our business in the usual, regular and ordinary course consistent with past practice and will use our commercially reasonable efforts to preserve intact our business organization, the services of our officers and employees and our goodwill and relationships with tenants and others with whom we have business dealings. We will also comply in all material respects with all applicable laws, including the timely filing of reports, forms or other documents with the Securities and Exchange Commission required pursuant to the Securities Act and the Exchange Act;

 

Unless previously agreed to by Record Realty or otherwise expressly contemplated or permitted by the merger agreement, pending consummation of the merger, we may not, and will cause each of our subsidiaries not to take the following actions without the prior written consent of Record Realty:

 

 

 

 

On the date we entered into the merger agreement, we agreed to (and to cause each of our subsidiaries to) cease immediately, and cause to be terminated, any and all existing activities, discussions or negotiations with any parties conducted prior thereto with respect to, or that would reasonably be expected to lead to, an inquiry, offer or proposal regarding a sale of the Company or any of our subsidiaries, or 5% or more of our or our subsidiaries’ assets, or certain other business combination transactions.

 

Except as otherwise permitted in the merger agreement, we will not, and will not authorize or permit any of our subsidiaries, or any of our or our subsidiaries’ directors, officers, employees, investment bankers, financial advisors, attorneys, accountants or other representatives to:

 

 

 

Prior to the special meeting, our board of directors may not:

 

 

 

The term “acquisition proposal” is defined in the merger agreement as any inquiry, offer or proposal regarding:

 

 

The term “superior proposal” is defined as an acquisition proposal which our board of directors determines in good faith, after consultation with its financial advisors, will be more favorable to holders of our common stock than the merger with Record Realty (US) (taking into account all of the terms and conditions of such acquisition proposal, including the financial terms, any conditions to consummation and the likelihood of such acquisition proposal being consummated).

 

Pursuant to the merger agreement, we are required to call a special meeting of our stockholders to consider and vote upon approval and adoption of the merger agreement. Also, our board of directors is required at all times prior to and during the meeting of stockholders at which the merger agreement is to be considered to recommend that our stockholders approve the merger and merger agreement and to take all reasonable action to solicit such approval of our stockholders. Notwithstanding the foregoing, nothing in the merger agreement prevents our board of directors from withholding, withdrawing, amending or modifying its recommendation if it determines, after consultation with its outside counsel, that failure to take such action would be reasonably likely to be inconsistent with its duties to GPT and our stockholders under applicable law.

 

GPT, Record Realty and Record Realty (US) have agreed to use their respective commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper, or advisable to consummate or make effective, as promptly as practicable, the merger.

 

The merger agreement contains additional covenants of each of the parties, including covenants relating to:

 

 

 

 

Pursuant to the merger agreement, our company, Record Realty and Record Realty (US) made certain customary representations and warranties relating to our respective companies, subsidiaries, businesses and matters related to the merger. For detailed information concerning these representations and warranties, reference is made to Article III and IV of the merger agreement included as Appendix A hereto.

 

The representations and warranties of each party set forth in the merger agreement have been made solely for the benefit of the other parties to the merger agreement. The assertions embodied in our representations and warranties have been qualified by information in a confidential disclosure schedule that we provided Record Realty in connection with the signing of the merger agreement. While neither Record Realty nor we believe that the confidential disclosure schedule contains material information that is required to be disclosed publicly other than information that has already been so disclosed, the disclosure schedule does contain information that modifies, qualifies and creates exceptions to our representations and warranties contained in the merger agreement, including certain nonpublic information. Accordingly, you should not rely on our representations and warranties as characterizations of the actual state of facts, since they are modified in part by the underlying disclosure schedule. In addition, such representations and warranties (i) will not survive consummation of the merger and cannot be the basis for any claims under the merger agreement by the other party after termination of the merger agreement except for liabilities or damages arising out of any fraud or willful breach, (ii) are subject in certain respects to the materiality standards contained in the merger agreement which may differ from what may be viewed as material by investors and (iii) were made only as of the date of the merger agreement or such other date as is specified in the merger agreement, may have changed since the date of the merger agreement and will not reflect any such subsequent changes in facts. Such representations and warranties generally must remain accurate through the completion of the merger unless the fact or facts that caused a breach of a representation and warranty has not had or is not reasonably likely to have a material adverse effect on the party making the representation and warranty. See “Conditions to the Merger” beginning on page 27.

 

The merger will become effective upon the later of such time as the articles of merger are filed with and accepted for record by the Maryland Department of Assessments and Taxation and such time as a certificate of merger has been filed with the Secretary of State of Delaware, unless a different date and time is specified as the effective time in such documents. The articles of merger and the certificate of merger will be filed (i) five business days following satisfaction or waiver of all conditions to the merger set forth in the merger agreement, other than those conditions that must be satisfied or waived at the consummation of the merger, or (ii) on such other date as the parties may mutually agree upon in writing.

 

The merger agreement may be amended or modified at any time by written agreement of the parties whether before or after the approval of our stockholders, except that after this special meeting, no amendment which by law requires further approval by our stockholders may be made without obtaining such approval.

 

Prior to the special meeting, Record Realty (US) intends to assign all of its right, title and interest in, to and under the merger agreement to a wholly owned Delaware subsidiary of Record Realty, pursuant to an assignment and assumption agreement to be entered into between Record Realty (US) and such subsidiary. This assignment will require the consent of GPT, which GPT intends to provide. Thereafter, the parties to the merger agreement intend to amend the merger agreement to clarify certain provisions of the merger agreement as a result of the assignment.

 

The merger agreement may be terminated by:

 

 

 

 

 

 

 

 

 

In the event the merger agreement is terminated as described above, neither we nor Record Realty will have any liability thereunder, except as set forth under “Termination Fees” below or in respect of specified covenants that survive termination. However, termination of the merger agreement will not relieve either us or Record Realty of any liability for fraud or willful breach of the representations, warranties, covenants or other agreements contained in the merger agreement.

 

The merger agreement provides that we must pay Record Realty a $6.5 million termination fee under the circumstances and in the manner described below:

 

 

 

 

The $6.5 million termination fee, to the extent payable by GPT pursuant to the merger agreement, shall be paid by wire transfer of immediately available funds to an account designated by Record Realty.

 

If the merger agreement is terminated by us because Record Realty or Record Realty (US) breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in the merger agreement which breach or failure is reasonably likely to be incapable of being cured by June 30, 2007, Record Realty must instruct the escrow agent to deliver the $30 million deposit to GPT. This amount shall be counted towards, and reduce, any amounts for which Record Realty or Record Realty (US) shall otherwise be liable to GPT arising from the merger agreement.

 

Whether or not the merger is completed, all fees incurred in connection with the merger shall be paid by the party incurring the expense. Certain costs, including filing fees and expenses related to this proxy statement, CFIUS and other regulatory filing fees and expenses incurring in connection with obtaining lender approval for the merger (the shared costs), will be shared between GPT and Record Realty in the following manner:

 

 

If the merger agreement is terminated because GPT’s stockholders have not approved the merger, GPT must pay to Record Realty all documented out-of-pocket fees and expenses incurred by Record Realty or Record Realty (US) in connection with the merger, provided however, that such fees and expenses shall not exceed $2 million.

 

General.  Some of the members of our management, one of whom is also one of our directors, have interests in the merger that are in addition to, or different from, the interests of our stockholders generally, which are described below. Our board of directors was aware of these interests and considered them, among other matters, before approving the merger agreement and the transactions contemplated by the merger agreement. See “The Merger — Background of the Merger” beginning on page 14.

 

Existing Employment Agreements.  We have entered into employment agreements with Thomas D. Peschio, our President and Chief Executive Officer, and Nancy D. Olson, our Chief Financial Officer. Thomas D. Peschio’s employment agreement has a five year term and commenced on September 30, 2003. Nancy Olson’s employment agreement has a three year initial term and commenced on February 24, 2004.

Ms. Olson’s employment agreement will automatically renew for an additional one-year period, unless either Ms. Olson or GPT provides written notice to the other party at least 30 days prior to the expiration of the initial term of such party’s intent not to renew. At the end of the initial term of each agreement, the agreement will automatically extend for additional one-year periods unless GPT or the officer elects not to extend the employment. Set forth below is a summary of the benefits that each officer receives under his or her employment agreement, including if his or her employment was terminated following the merger:

 

 

 

 

In the new employment agreement between Mr. Peschio and Record Realty (US), described below, Record Realty (US) acknowledges that it accepts the assignment of Mr. Peschio’s current employment agreement. In satisfaction of Record Realty (US)’s obligations to pay severance benefits to Mr. Peschio upon the completion of the merger, Record Realty (US) will make one lump-sum payment to Mr. Peschio in the amount of $1,577,286.42.

 

 

 

 

Other Payments.  Upon the consummation of the merger, Stephen Sharpe, Director of Capital Markets, will receive an incentive bonus in the approximate amount of $600,000 pursuant to an agreement with the Company.

 

New Employment Agreement.  Mr. Peschio has entered into an employment agreement with Record Realty (US) which shall become effective on the date that the merger is complete. This employment agreement provides that Mr. Peschio will be employed as the President and Chief Executive Officer. This agreement has an initial term of two years and shall automatically renew thereafter for additional one-year terms unless either party terminates the agreement. Mr. Peschio will receive the following benefits as compensation: (1) an annual base salary of not less than $375,762, which shall be adjusted for increases in CPI each January 1; (ii) an annual cash incentive bonus based on pre-determined performance standards which shall not exceed 80% of Mr. Peschio’s base salary; (iii) twenty business days of vacation per calendar year; (iv) sick and personal days on an as-needed basis; (v) the ability to participate in all employee benefit arrangements; (vi) a monthly car allowance of $1,468.00 plus all related fuel, operating expenses, repair and maintenance, taxes, insurance and other fees; (vii) reimbursement for tax preparation and financial services in an amount not to exceed $7,500 in the aggregate; (viii) directors and officers insurance coverage; (ix) disability insurance; (x) life insurance; and (xi) reimbursement for reasonable business expenses. In addition, Mr. Peschio may perform his duties from a remote location for up to thirty business days per calendar year.

 

If Mr. Peschio’s employment agreement is terminated due to death, “disability”, by Record Realty (US) without “cause” or by Mr. Peschio for “good reason” (each as defined in the employment agreement), Record Realty (US) shall pay Mr. Peschio his full base salary and any accrued vacation pay, unreimbursed business expenses and any other amount earned and owed through the effective time of the termination. In addition, Record Realty (US) will have to pay an amount equal to two times Mr. Peschio’s base salary, plus an additional amount of $300,000 or two times the prior year’s bonus (whichever is greater). If Record Realty (US) terminates Mr. Peschio on the day after the merger is completed, Record Realty (US) will have to pay Mr. Peschio $1,051,524.20, excluding any potential gross-up payment as defined below, as severance. For twelve months following the termination date, Mr. Peschio will also receive medical, group term life and disability insurance, life insurance (including benefits pursuant to the Executive Life Insurance Program, as defined in the employment agreement) and, if applicable, Medicare supplemental coverage.

 

In the event that any of the payments or benefits that Mr. Peschio will receive upon termination are subject to an excise tax imposed by Section 4999 of the Internal Revenue Code, then Record Realty (US) will pay Mr. Peschio an additional amount such that the net amount retained by Mr. Peschio after deduction of the excise tax and any federal, state or local tax on the additional payment will be equal to the payments described above.

 

Equity Compensation Awards.  Prior to the effective time of the merger, all of our employees and the employees of our subsidiaries, including executive officers, must waive any right to future grants of equity based compensation under existing employment agreements or any of GPT’s employment benefit plans.

 

Acceleration of Payments to Directors.  Upon the completion of the merger, our board of directors will receive any unpaid portion of their annual compensation (including compensation for serving as a committee chair) and fees for all board and committee meetings that occurred or were scheduled to occur between July 1, 2006 and June 30, 2007, assuming a calendar in accordance with the board’s past practices of four meetings per year of the board. In addition, any unvested portion the annual grant of restricted shares to the directors will vest in full immediately prior to the completion of the merger.

 

Each director is paid a director’s fee of $25,000 per year. Directors also receive a fee of $1,000 for each board meeting attended. We pay directors a fee of $10,000 per year for service as a chairman of our board, $7,500 per year for service as chairman of the audit committee, $6,000 per year for services as chairman of the compensation committee and $5,000 per year for service as a chairman for any other committee. Each director is also paid a fee of $1,250 per committee meeting attended, except when the committee meeting is on the same day as the board meeting. A portion of these fees are paid quarterly in arrears.

 

At or prior to the completion of the merger, we will deliver the written resignation of each of our directors and officers, if such resignations are requested by Record Realty.

 

Accelerated Vesting of Restricted Stock.  Immediately prior to the completion of the merger, all unvested restricted stock shall vest in full and shall be treated as common stock for the purposes of receiving the merger consideration (less any applicable withholding taxes). The table below sets forth, as of March 9, 2007, for any person who has been a director or officer of GPT at any time since January 1, 2006, the number of unvested restricted shares and the value of such restricted shares determined by multiplying the number of shares by the merger consideration:

 

Executive Officers and Directors

 

 

Indemnification and Insurance.  Record Realty and Record Realty (US) have agreed that all rights to indemnification existing in favor of, and all limitations on the personal liability of, the directors, officers, employees, trustees, fiduciaries or agents of GPT or any of its subsidiaries provided for in the charter or bylaws (or other applicable organizational documents) of GPT or its subsidiaries, in effect as of October 23, 2006, shall survive the merger and continue in full force and effect for a period of six years from the closing date of the merger with respect to any matters arising before the closing of the merger and, at the closing date of the merger, shall become the obligation of Record Realty (US). However, all rights to indemnification with respect to any claims asserted or made within such period shall continue until the final disposition of such claim. From and after the closing date of the merger, Record Realty (US) must also indemnify and hold harmless the present and former officers and directors of GPT with respect to acts or omissions occurring prior to the closing date of the merger to the extent provided for in any written indemnification agreements between GPT and its subsidiaries and its officers and directors.

 

Prior to the closing date of the merger, we shall purchase a non-cancelable extended reporting period endorsement under our existing directors’ and officers’ liability insurance coverage for our directors and officers in the same form as presently maintained by us, with the same or comparably rated insurers as our current insurer, which shall provide such directors and officers with coverage in respect of any matter arising prior to the consummation of the merger for six years following the closing date of the merger of not less than the existing coverage under, and have other terms not less favorable to, the insured persons than the directors’ and officers’ liability insurance coverage presently maintained by us. Record Realty shall, and shall cause Record Realty (US) to, maintain such policies in full force and effect, and continue to honor all obligations thereunder.

 

Upon the completion of the merger, by operation of law, each or our employees and the employees of our subsidiaries will become employees of Record Realty (US). For a period of one year following the effective

time of the merger, Record Realty shall cause Record Realty (US) or its affiliates to provide compensation and employee benefits to our employees for so long as they are employed on terms that are substantially comparable or more favorable in the aggregate to the compensation and benefits we provided immediately prior to the merger. In addition, Record Realty will cause Record Realty (US) or its affiliates to honor fully all of our employment agreements, severance agreements and retention bonus agreements with Thomas Peschio, Nancy Olson and Stephen Sharpe.

 

When employees of GPT or any of our subsidiaries become eligible to participate in a medical, dental or health plan of Record Realty or its subsidiaries, Record Realty will cause such plan to:

 

 

Prior to entering into the merger agreement, GPT adopted a severance policy which provides that in the event of an involuntary termination of an employee without cause following a change in control, such as the merger, the employee will receive a severance benefit equal to two months of salary for every year of employment with a minimum of three months paid and a maximum of eight months paid.

 

The following is a general summary of the material federal income tax considerations that you should take into account in determining whether to vote for or against the merger. This summary is based upon interpretations of the Internal Revenue Code, Treasury Regulations promulgated under the Internal Revenue Code, judicial decisions and administrative rulings as of the date of this proxy statement, all of which are subject to change or differing interpretations, including changes and interpretations with retroactive effect. We have not requested, and do not plan to request, any rulings from the Internal Revenue Service, which we refer to in this proxy statement as the “IRS,” concerning the tax treatment of the merger. We can provide no assurance that the tax consequences contained in this summary that are not binding on the IRS or any court may not be challenged by the IRS or if challenged whether the IRS challenge would be sustained by a court. The discussion below does not address all federal income tax considerations, or any state, local or foreign tax consequences of the merger. Your tax treatment may vary depending upon your particular situation. This discussion assumes that our common shares are held as a capital asset and does not address various tax rules that may apply if you are a stockholder subject to special treatment under the Internal Revenue Code, including, for example:

 

 

 

If any entity that is treated as a partnership for federal income tax purposes holds our common shares, the tax treatment of its partners or members generally will depend upon the status of the partner or member and the activities of the entity. If you are a partner of a partnership or a member of a limited liability company or other entity classified as a partnership for federal income tax purposes and that entity holds our common shares, you should consult your tax advisor.

 

For purposes of this discussion, a “U.S. stockholder” is a beneficial owner of our common shares that is for federal income tax purposes one of the following: a U.S. citizen or “resident alien individual” as defined in the Internal Revenue Code, a domestic corporation or entity that has elected to be treated as a domestic corporation for federal income tax purposes or an estate or trust the income of which is includable in its gross income for federal income tax purposes without regard to its source.

 

For purposes of this discussion, a “non-U.S. stockholder” is a beneficial owner of our common shares that is an individual or other entity that is not a U.S. stockholder as described above.

 

THIS FEDERAL INCOME TAX DISCUSSION IS FOR GENERAL INFORMATION PURPOSES ONLY AND MAY NOT ADDRESS ALL TAX CONSIDERATIONS THAT MAY BE SIGNIFICANT TO YOU. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO YOU OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN LAWS.

 

Consequences to Us of the Merger.  For federal income tax purposes, we will treat the merger as if we had sold all of our assets to Record Realty (US) in exchange for the merger consideration and then made a liquidating distribution of the merger consideration to our stockholders in exchange for shares of our common stock. Since as a REIT we are entitled to receive a deduction for liquidating distributions and we anticipate that our deemed liquidating distribution will exceed our taxable income recognized as a result of the merger, we anticipate that we will not be subject to federal income tax on any gain recognized in connection with the merger.

 

Consequences to You of the Merger — U.S. Stockholders.  The merger will be treated as a taxable sale by you of your shares of our common stock in exchange for the merger consideration. As a result, if you are a U.S. stockholder, you will recognize capital gain or loss with respect to your shares, measured by the difference between your adjusted tax basis in the shares exchanged and the amount of cash received for those shares. Your gain or loss generally will constitute long-term capital gain or loss if you held your shares for more than one year as of the effective time of the merger. However, if you have held some or all our shares for six months or less at the effective time of the merger, taking into account the holding period rules of Sections 246(c)(3) and (4) of the Internal Revenue Code, and you recognize a loss with respect to those shares, you will be treated as recognizing long-term capital loss to the extent of any capital gain distributions attributable to those shares.

 

If you are an individual holder, you will be subject to tax on net long-term capital gain at a maximum federal income tax rate of 15%. Corporate holders generally will be subject to tax at the regular rates applicable to corporations. The deductibility of a capital loss recognized as a result of the merger is subject to limitations under the Code. In addition, the IRS has the authority to prescribe, but has not yet prescribed,

regulations that would apply a capital gain tax rate of 25%, which is generally higher than the long-term capital gain tax rates for noncorporate stockholders, to a portion of capital gain realized by a noncorporate stockholder on the sale of REIT shares that would correspond to the REIT’s “unrecaptured Section 1250 gain.”

 

If you hold blocks of shares which were acquired separately at different times and/or prices, you must separately calculate your gain or loss for each block of shares. Stockholders are urged to consult with their own tax advisors with respect to their potential capital gain tax liability.

 

Consequences to You of the Merger — Non-U.S. Stockholders.  If you are a non-U.S. stockholder, generally you will be required to compute the amount of your recognized capital gain or loss with respect to your shares of our common stock calculated in the same manner as U.S. stockholders. However, the manner in which your capital gain or loss will be taxed will depend on the treatment of the merger for purposes of the Foreign Investment in Real Property Tax Act of 1980, which we refer to in this proxy statement as FIRPTA. In particular, the consequences to you will depend on whether your receipt of the merger consideration will be taxed under the provisions of FIRPTA governing sales of REIT shares, consistent with the treatment of the merger as a sale of shares for purposes of determining the tax consequences to U.S. stockholders, or whether their receipt of the merger consideration will be taxed under the provisions of FIRPTA governing distributions from REITs. The provisions governing distributions from REITs could apply because, for federal income tax purposes, the merger will be treated as a sale of our assets followed by a liquidating distribution from us to our stockholders of the proceeds from the asset sale. Current law is unclear as to which provisions should apply, and both sets of provisions are discussed below. As the following discussion indicates, the provisions governing the taxation of distributions by REITs are less favorable to non-U.S. stockholders. Accordingly, we urge you to consult with your tax advisors regarding the proper treatment of the merger under FIRPTA. A non-U.S. stockholder is urged to consider selling its shares prior to the merger in order to be subject to the generally more favorable provisions that govern the tax consequences of a sale of REIT shares rather than the generally less favorable provisions that apply to distributions by REITs.

 

Merger Treated As A Taxable Sale of Shares.  Subject to the discussions of backup withholding, if the merger is treated as a taxable sale of shares, then you should not be subject to federal income taxation on any gain or loss from the merger unless (a) the gain is effectively connected with a trade or business that you conduct in the United States or, if an applicable income tax treaty applies, the gain is attributable to a permanent establishment maintained by the non-U.S. stockholder in the United States, (b) you are an individual who has been present in the United States for 183 days or more during the taxable year of the merger and certain other conditions are satisfied or (c) your shares constitute a “U.S. real property interest” under FIRPTA.

 

(a) Effectively Connected Gain.  If your gain is effectively connected with a U.S. trade or business, then you will be subject to federal income tax on your gain on a net basis in the same manner as U.S. stockholders. In addition, if you are a non-U.S. corporation, you will be subject to the 30% branch profits tax.

 

(b) 183-Day Rule.  If you are an individual non-U.S. stockholder and have been present in the United States for 183 days or more during the taxable year of the merger and certain other conditions are satisfied, you will be subject to a flat 30% tax on the gross amount of your capital gains, which may be offset by U.S. source capital losses. In addition, non-U.S. stockholders may be subject to applicable alternative minimum taxes.

 

(c) U.S. Real Property Interest.  If your shares constitute a “U.S. real property interest” under FIRPTA, you will be subject to federal income tax on your gain on a net basis in the same manner as U.S. stockholders. In addition, if you are a non-U.S. corporation, you may be subject to the 30% branch profits tax. Your shares generally will constitute a “U.S. real property interest” if (a) we are not a “domestically-controlled qualified investment entity” at the effective time of the merger, and (b) you hold more than 5% of the total fair market value of our shares at any time during the shorter of (x) the five-year period ending with the effective date of the merger and (y) your holding period for your shares. A “qualified investment entity” includes a REIT. Assuming we qualify as a REIT, we will be a “domestically-controlled qualified investment entity” at the effective time of the merger if non-U.S. stockholders held directly or indirectly less than 50% of the value of our common stock at all times during the five-year period ending with the effective time of the merger. No

assurances can be given that the actual ownership of shares of our common stock has been or will be sufficient for us to qualify as a domestically-controlled qualified investment entity at the effective time of the merger.

 

In addition, our common shares will not constitute a U.S. real property interest if (1) as of the effective date of the merger, we did not hold any U.S. real property interests and (2) all of the U.S. real property interests held by us during the five-year holding period ending with the effective date of the merger were disposed of in transactions in which the full amount of the gain (if any) was recognized. The application of this rule in a transaction such as the merger is not entirely clear. You should consult your tax advisor regarding the possible FIRPTA tax consequences to you of the merger.

 

Merger Treatment As A Distribution of Gain.  The tax treatment described above assumes that the receipt of the merger consideration will be treated as a sale or exchange of your shares of our common stock under FIRPTA, which is consistent with the general treatment of the merger for other federal income tax purposes. It is possible, however, that the IRS may assert that the merger consideration you receive should be treated as a distribution from us that is attributable to gain from the deemed sale of our U.S. real estate assets in the merger, and not as a sale of shares of our common stock. If the IRS were successful in making this assertion, then such distribution would be taxed under FIRPTA, unless a special exception (the “5% Exception,” discussed below) applies. If the distribution were taxed under FIRPTA, gain recognized by you generally would be subject to federal income tax on a net basis to the extent attributable to gain from the sale of our U.S. real estate assets and, if you are a corporation, you could be subject to the branch profits tax on such FIRPTA gain. On the other hand, the 5% Exception would apply to you if (a) the distribution is attributable to a class of our common stock that is regularly traded on an established securities market located in the United States and (b) you do not own more than 5% of such class of our common stock (after the application of certain constructive ownership rules) at any time during the one-year period ending on the distribution date. If the 5% Exception were to apply to you, the FIRPTA tax would not apply, but there is some risk that the merger consideration could be treated as an ordinary dividend distribution from us, in which case the merger consideration you receive would be subject to federal income tax at a 30% rate or lower treaty rate.

 

Income Tax Treaties.  If you are eligible for treaty benefits under an income tax treaty with the United States, you may be able to reduce or eliminate certain of the federal income tax consequences discussed above, such as the branch profits tax. You should consult your tax advisor regarding possible relief under an applicable income tax treaty.

 

U.S. Withholding Tax Under FIRPTA.  As described above, it is unclear whether the receipt of the merger consideration will be treated as a sale or exchange of our common shares or as a distribution from us that is attributable to gain from the deemed sale of our U.S. real estate assets in the merger. To avoid potential liability to the IRS, we intend to treat the merger consideration as a distribution from us. Accordingly, we intend to withhold federal income tax at a rate of 35% from the portion of the merger consideration that is, or is treated as, attributable to the gain from the sale of U.S. real property interests unless you qualify for the 5% Exception, in which case we intend to withhold federal income tax at a 30% rate unless reduced by an applicable income tax treaty and you provide us with an applicable Form W-8. A non-U.S. stockholder is urged to consider selling its shares prior to the merger in order to be subject to the generally more favorable provisions that govern the tax consequences of a sale of REIT shares rather than the generally less favorable provisions that apply to distributions by REITs.

 

If the receipt of the merger consideration is properly treated as a sale or exchange of our common shares, you may be entitled to a refund or credit against your U.S. tax liability, if any, with respect to any amount withheld pursuant to FIRPTA, provided that the required information is furnished to the IRS on a timely basis. You should consult your tax advisor regarding withholding tax considerations.

 

Information Reporting and Backup Withholding.  Under certain circumstances you may be subject to information reporting and backup withholding at a rate of 28% with respect to your merger consideration. Backup withholding generally will not apply if you are a corporation or other exempt entity, or you furnish a correct taxpayer identification number and certify that you are not subject to backup withholding on IRS Form W-9 if you are a U.S. stockholder, or on the applicable Form W-8 if you are a non-U.S. stockholder, or an appropriate substitute form. If you are subject to backup withholding, the amount withheld is not an

additional tax, but rather is credited against your federal income tax liability. You should consult your tax advisor to ensure compliance with the procedures for exemption from backup withholding.

 

On January 4, 2007, an action was filed in the District Court of Douglas County, Nebraska, Fourth District Court against us, all of the members of our board of directors and Record Realty (US). The complaint alleges, among other things, that the preliminary proxy statement filed by us in connection with the merger failed to disclose certain material information. On February 27, 2007, counsel to the plaintiff and counsel to the defendants, other than Record Realty (US), entered into a Memorandum of Understanding with respect to their agreement in principle to a settlement of this action, subject to the terms and conditions provided for in the Memorandum of Understanding. There can be no assurance, however, that the action will be settled. The defendants believe that the allegations in the complaint have no merit and, in the event the action is not settled, intend to vigorously defend the action. There can be no assurance, however, that the defendants will be successful in defending this action.

 

Under the Maryland General Corporation Law, holders of record of our common stock are not entitled to dissent from the merger and obtain the fair value of their shares.

 

If the merger is completed, our common stock will cease trading on the New York Stock Exchange and will be deregistered under the Exchange Act.

 

Our common stock is currently reported on the New York Stock Exchange composite tape under the symbol “GPT.” As of March 9, 2007, there were 20,773,136 shares of our common stock outstanding.

 

The following table shows, for the periods indicated, the range of high and low sale prices for our common stock as quoted on the New York Stock Exchange composite tape. The following table also sets forth the dividends declared per share of our common stock for the periods indicated.

 

 

 

 

 

 

 

 

 

 

 

On October 23, 2006, the last full trading day prior to the public announcement of the proposed merger, the closing price per share of our common stock was $9.17. On March 9, 2007, the last practicable trading day prior to the date of this proxy statement, the closing price per share of our common stock was $10.54.

 

The following table sets forth certain information, as of March 9, 2007, with respect to the beneficial ownership of common stock owned by (i) each person or entity, including any “group” as that term is used in Section 13(d)(3) of the Exchange Act, who or which was known to us to be the beneficial owner of more than 5% of the issued and outstanding common stock, (ii) our directors, (iii) each of our named executive officers, and (iv) all directors and executive officers of our company as a group.

 

 

 

 

General.  If, at our special meeting on Wednesday, April 4, 2007, the number of shares of our common stock, present in person or by proxy, is insufficient to constitute a quorum or the number of shares of our common stock voting in favor of approval of the merger is insufficient to approve the merger under Maryland law, our management intends to move to adjourn the special meeting in order to enable our board of directors to solicit additional proxies. In that event, we will ask our stockholders to vote only upon the adjournment proposal and not on the proposal relating to the approval of the merger.

 

In this adjournment proposal, we are asking stockholders to grant discretionary authority to the holder of any proxy solicited by our board of directors so that the holder can vote in favor of the proposal to adjourn the special meeting to solicit additional proxies. If our stockholders approve the adjournment proposal, we could adjourn the special meeting, and any adjourned session of the special meeting, and use the additional time to solicit additional proxies, including the solicitation of proxies from stockholders that have previously voted.

Among other things, approval of the adjournment proposal could mean that, even if we had received proxies representing a sufficient number of votes against approval of the merger to defeat the merger proposal, we could adjourn the special meeting without a vote on the merger proposal and seek to convince the holders of those shares to change their votes to votes in favor of the approval of the merger.

 

If the special meeting is adjourned to a date not more than 120 days after the record date, no notice of the adjourned meeting is required to be given to stockholders, other than an announcement at the special meeting of the place, date and time to which the meeting is adjourned.

 

Vote Required.  Pursuant to our bylaws, the adjournment proposal requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or by proxy at the special meeting. Abstentions will have the same effect as a vote against the adjournment proposal. Under rules of the New York Stock Exchange, the proposal to adjourn the special meeting is considered a “non discretionary” item upon which brokerage firms may not vote in their discretion on behalf of their clients if such clients have not furnished voting instructions. Broker “non-votes” will have the same affect as a vote against the adjournment proposal.

 

No proxy that is specifically marked “AGAINST” approval of the merger agreement will be voted in favor of the adjournment proposal, unless it is specifically marked “FOR” granting the discretionary authority to adjourn the special meeting.

 

Recommendation of our Board of Directors.  The board of directors believes that if the number of shares of our common stock present in person or by proxy at the special meeting and voting in favor of approval of the merger is insufficient to approve the merger, it is in the best interests of our stockholders to enable the board to continue to seek to obtain a sufficient number of additional votes in favor of approval of the merger. Therefore, our board of directors recommends that you vote “FOR” the proposal to grant discretionary authority to adjourn the special meeting for the purpose of soliciting additional proxies.

 

We will not hold an annual meeting of stockholders in 2007 if the merger is completed because we will no longer be a publicly held company. However, if the merger agreement is terminated for any reason, we expect to hold our regularly scheduled annual meeting of stockholders, which is currently scheduled to be held in June 2007. If we hold such annual meeting, any proposal which a stockholder wishes to have included in our proxy materials relating to the next annual meeting of stockholders of our company must be received at our principal executive offices located at 13625 California Street, Suite 310, Omaha, Nebraska, 68154, Attention: Thomas D. Peschio, President, no later than December 29, 2006.

 

If we hold our 2007 annual meeting, stockholder proposals which are not submitted for inclusion in our proxy materials pursuant to Rule 14a-8 under the Exchange Act may be brought before the annual meeting pursuant to Section 1.10 of our bylaws, which provides that business at an annual meeting of stockholders must be (A) specified in the notice of the stockholders’ meeting, (B) properly brought before the meeting by or at the direction of the board of directors, or (C) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of our company. To be timely, a stockholder’s notice must be delivered to, or mailed and received at our principal executive offices not later than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders of our company, or not later than December 29, 2006 in connection with the next annual meeting of stockholders. Such stockholder’s notice is required to set forth as to each matter the stockholder proposes to bring before an annual meeting certain information specified in the bylaws.

 

As of the date of this proxy statement, our board of directors knows of no matters that will be presented for consideration at the special meeting other than as described in this proxy statement. However, if any other matter is properly presented at the special meeting, the shares represented by proxies in the form of the enclosed proxy card will be voted in the discretion of the named proxy holders.

 

We file annual, quarterly and current reports, proxy statements and other information with the SEC under the Exchange Act. You may read and copy any reports, proxy statements or other information filed by us at the SEC’s public reference room in Washington, D.C., which is located at the following address: Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549.

 

You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the SEC’s public reference room. Our SEC filings are also available to the public from document retrieval services and at the SEC’s Internet website (http://www.sec.gov).

 

You should also be able to inspect reports, proxy statements and other information about us at the offices of the New York Stock Exchange, 11 Wall Street, New York, New York 10005.

 

Our stockholders should not send in their certificates for our common stock until they receive the transmittal materials from the exchange agent after completion of the merger. Our stockholders of record who have further questions about their share certificates or the exchange of our common stock for cash following the completion of the merger should call our investor relations department via e-mail at slatham@gptrust.com or call (402) 548-4207.

 

You should rely only on the information contained in this proxy statement. We have not authorized anyone to provide you with information that is different from what is contained in this proxy statement. This proxy statement is dated March 12, 2007. You should not assume that the information contained in this proxy statement is accurate as of any date other than that date. Neither the mailing of this proxy statement to stockholders nor the issuance of cash in the merger creates any implication to the contrary.

Appendix A

 

 

AGREEMENT AND PLAN OF MERGER
AMONG
RECORD REALTY TRUST,
RECORD REALTY (US) LLC,
AND
GOVERNMENT PROPERTIES TRUST, INC.
DATED AS OF OCTOBER 23, 2006

 

TABLE OF CONTENTS

 

COMPANY DISCLOSURE SCHEDULE

 

Title Section