<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ARDEN REALTY, 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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
ARDEN REALTY, INC.
11601 Wilshire Boulevard
Fourth Floor
[ARDEN LOGO] Los Angeles, CA 90025
April 14, 1999
Dear Stockholder:
You are cordially invited to attend the 1999 annual meeting of stockholders
of Arden Realty, Inc. to be held on May 18, 1999, at 10:00 a.m., local time, at
the Sheraton Miramar Hotel at 101 Wilshire Boulevard, Santa Monica, California
90401.
Information about the meeting and the various matters on which the
stockholders will act is included in the Notice of Annual Meeting of
Stockholders and Proxy Statement that follows. Also included is a Proxy Card and
postage paid return envelope.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend, we hope that you will complete and return your Proxy
Card in the enclosed envelope as promptly as possible.
Sincerely,
/s/ RICHARD S. ZIMAN
Richard S. Ziman
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
ARDEN REALTY, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 18, 1999
------------------------
To the stockholders of Arden Realty, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the "Annual
Meeting") of Arden Realty, Inc., a Maryland corporation, will be held at the
Sheraton Miramar Hotel located at 101 Wilshire Boulevard, Santa Monica,
California 90401 on May 18, 1999, at 10:00 a.m., local time, for the following
purposes:
1. To elect two directors to serve until the annual meeting of stockholders
in the year 2002 and until their successors are duly elected and
qualified.
2. To transact such other business as may properly come before the meeting
or any adjournment(s) or postponement(s) thereof.
The Board of Directors has fixed the close of business on March 31, 1999 as
the record date for determining the stockholders entitled to receive notice of
and to vote at the Annual Meeting or any adjournment or postponement thereof.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO COMPLETE, SIGN, DATE
AND RETURN THE ACCOMPANYING PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING.
By Order of the Board of Directors,
/s/ DIANA M. LAING
Diana M. Laing
Executive Vice President,
Chief Financial Officer
and Secretary
April 14, 1999
Los Angeles, California
<PAGE> 4
ARDEN REALTY, INC.
11601 WILSHIRE BOULEVARD
FOURTH FLOOR
LOS ANGELES, CA 90025
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 18, 1999
------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Arden Realty, Inc., a Maryland corporation, of proxies
from the holders of the Company's issued and outstanding common shares of stock,
$.01 par value per share (the "Common Shares"), to be exercised at the Annual
Meeting of Stockholders (the "Annual Meeting") to be held on May 18, 1999 at the
Sheraton Miramar Hotel located at 101 Wilshire Boulevard, Santa Monica,
California 90401 at 10:00 a.m., local time, and at any adjournment(s) or
postponement(s) thereof for the purposes set forth in the accompanying Notice of
Annual Meeting. The terms "Arden Realty", "us", "we" and "our" as used in this
statement refer to Arden Realty, Inc.
This Proxy Statement and enclosed form of proxy are first being mailed to
our stockholders on or about April 14, 1999.
At the Annual Meeting, our stockholders will be asked to consider and vote
upon the following proposals (the "Proposals"):
1. The election of two directors to serve until the annual meeting of
stockholders to be held in the year 2002 and until their successors are
duly elected and qualified, and
2. Such other business as may properly come before the Annual Meeting.
Only the holders of record of our Common Shares at the close of business on
March 31, 1999 (the "Record Date") are entitled to notice of and to vote at the
Annual Meeting. Each Common Share is entitled to one vote on all matters. As of
the Record Date, 62,407,737 Common Shares were outstanding. A majority of the
Common Shares outstanding must be represented at the Annual Meeting in person or
by proxy to constitute a quorum for the transaction of business at the Annual
Meeting. Abstentions and broker non-votes will count toward the presence of a
quorum.
In order to be elected as a director, a nominee must receive a plurality of
all votes cast at the Annual Meeting at which a quorum is present. For purposes
of calculating votes cast in the election of directors, abstentions will not be
counted as votes cast and will have no effect on the result of the vote on the
Proposal regarding the election of director nominees.
The Common Shares represented by all properly executed proxies returned to
us will be voted at the Annual Meeting as indicated or, if no instruction is
given, FOR the nominees for director. As to any other business which may
properly come before the Annual Meeting, all properly executed proxies will be
voted by the persons named therein in accordance with their discretion. We do
not presently know of any other business which may come before the Annual
Meeting. Any person giving a proxy has the right to revoke it at any time before
it is exercised (a) by filing with the Secretary of Arden Realty a duly signed
revocation or a proxy bearing a later date or (b) by electing to vote in person
at the Annual Meeting. Mere attendance at the Annual Meeting will not revoke a
proxy.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT, AND, IF
GIVEN OR MADE, THAT INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY US AND THE DELIVERY OF THIS PROXY STATEMENT SHALL, UNDER NO
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF ARDEN REALTY SINCE THE DATE HEREOF.
------------------------
The date of this proxy statement is April 14, 1999.
1
<PAGE> 5
EXECUTIVE OFFICERS
The following is a biographical summary of the experience of our executive
and senior officers.
RICHARD S. ZIMAN. Mr. Ziman, 56, is a founder of Arden Realty and has
served as our Chairman of the Board and Chief Executive Officer and as a
Director since our formation. Mr. Ziman has been involved in the real estate
industry for over 25 years. In 1990, Mr. Ziman formed Arden Realty Group, Inc.,
a California corporation (currently known as "Namiz") and served as its Chairman
of the Board and Chief Executive Officer from its inception until the formation
of Arden Realty. In 1979 he co-founded Pacific Financial Group, a diversified
real estate investment and development firm headquartered in Beverly Hills, of
which he was the Managing General Partner. Mr. Ziman received his Bachelor's
Degree and his Juris Doctor Degree from the University of Southern California
and practiced law as a partner of the law firm of Loeb & Loeb from 1971 to 1980,
specializing in transactional and financing aspects of real estate.
VICTOR J. COLEMAN. Mr. Coleman, 37, is a founder of Arden Realty and has
served as our President and Chief Operating Officer and as a Director since our
formation. Mr. Coleman was the President, Chief Operating Officer and cofounder
of Namiz from 1990 to 1996. From 1987 to 1989, Mr. Coleman was Vice President of
Los Angeles Realty Services, Inc. and earlier in his career from 1985 to 1987
was Director of Marketing/Investment Advisor of Development Systems
International and an associate at Drexel Burnham Lambert specializing in private
placements with institutional and individual investors. Mr. Coleman received his
Bachelor's Degree from the University of California at Berkeley and received his
Master of Business Administration Degree from Golden Gate University.
DIANA M. LAING. Ms. Laing, 44, has served as our Chief Financial Officer
since August 1996 and as our Secretary since February 1997. Prior to joining
Arden Realty, Ms. Laing served, from 1985 to 1996, as Executive Vice President
and Chief Financial Officer of South West Property Trust, Inc., a publicly
traded apartment properties real estate investment trust, and its predecessor
Southwest Realty, Ltd. Ms. Laing also served from 1982 to 1985 as Controller,
Treasurer and Vice President -- Finance of Southwest Realty, Ltd. From 1981 to
1982, Ms. Laing was Controller of Crawford Energy, Inc. and she served as a
member of the audit staff of Arthur Andersen & Company from 1978 to 1981. Ms.
Laing is a Certified Public Accountant and a member of the American Institute of
CPAs and the Texas Society of Public Accountants. Ms. Laing received her
Bachelor of Science Degree in Accounting from Oklahoma State University.
ANDREW J. SOBEL. Mr. Sobel, 39, served as our Executive Vice President and
Director of Leasing from our formation through July 1997 and has served as our
Executive Vice President, Director of Property Operations since August 1997. Mr.
Sobel served as Director of Leasing for Namiz from 1992 to 1996. Mr. Sobel is an
attorney admitted to the State Bar of California in 1985 with 11 years
experience in the practice of real estate law. From 1990 to 1992, Mr. Sobel was
a sole practitioner. From 1987 to 1990 he was an attorney with the law firm of
Pircher, Nichols & Meeks specializing in all aspects of its real estate
transactional practice including acquisitions, leasings and financings. Mr.
Sobel received his Bachelor's Degree from State University of New York at Oswego
and his Juris Doctor Degree from the University of California, Berkeley (Boalt
Hall).
JEFFREY A. BERGER. Mr. Berger, 36, has served as our Senior Vice
President -- Acquisitions since October 1997. Prior to joining Arden Realty, Mr.
Berger served as Vice President and Director of Berger Realty Group, a privately
held real estate company in Chicago, Illinois. Berger Realty Group managed and
leased approximately 1,000 apartments, and over two million rentable square feet
of office, retail, and R&D/industrial properties. Mr. Berger was responsible for
all acquisitions and finance and for managing a staff of 75 people. Prior to
joining Berger Realty Group, Mr. Berger served as Assistant Vice President of
Real Estate Acquisitions for Heitman Financial. Mr. Berger received his Bachelor
of Science Degree in Communication Studies from Northwestern University.
DANIEL S. BOTHE. Mr. Bothe, 33, served as our Vice President -- Finance
from December 1996 to December 1997 and has served as our Senior Vice
President -- Finance since January 1998. From 1993 to 1996, Mr. Bothe was a
management consultant with the E&Y Kenneth Leventhal Real Estate Group of Ernst
& Young LLP. From 1988 to 1991, Mr. Bothe served as a member of the audit staff
of KPMG Peat
2
<PAGE> 6
Marwick LLP specializing in real estate. Mr. Bothe is a Certified Public
Accountant in the State of California and a member of the America Institute of
CPAs. Mr. Bothe received his Bachelor of Science Degree in Accounting from San
Diego State University and his Master of Business Administration Degree from the
University of Southern California.
RICHARD S. DAVIS. Mr. Davis, 40, served as our Chief Accounting Officer
since January 1998 and has served as our Senior Vice President -- Chief
Accounting Officer since December 1998. From 1996 to 1997, Mr. Davis was with
Catellus Development Corporation where he was responsible for accounting and
finance for the asset management and development divisions. From 1985 to 1996,
Mr. Davis served as a member of the audit staff of both KPMG Peat Marwick LLP
and Price Waterhouse LLP, specializing in real estate. Mr. Davis is a Certified
Public Accountant in the states of California and Missouri and a member of the
American Institute of CPAs. Mr. Davis received his Bachelor of Science Degree in
Accounting from the University of Missouri at Kansas City.
RANDY J. NOBLITT. Mr. Noblitt, 42, has served as our Senior Vice
President -- Property Management since November 1997. From 1995 to 1997, Mr.
Noblitt established a management consulting practice serving the real estate
industry. From 1993 to 1995, Mr. Noblitt served as Senior Vice President of
Tishman West in charge of the Southern California operations. In 1992 and 1993,
Mr. Noblitt served as Senior Portfolio Manager and Director of Management
Services for Cushman & Wakefield in Southern California. Mr. Noblitt's career
includes extensive experience in asset management, leasing and development of
all commercial property types. Mr. Noblitt received his Bachelor of Science
Degree in Business Administration from California State University, Northridge.
ROBERT C. PEDDICORD. Mr. Peddicord, 37, served as our Vice
President -- Leasing from December 1996 to September 1997 and has served as our
Senior Vice President -- Leasing since October 1997. From 1987 to 1996, Mr.
Peddicord was a Managing Director in the West Los Angeles office of Julien J.
Studley, representing landlords and tenants in the leasing of office space. From
1984 to 1986, Mr. Peddicord served as a branch Vice President for Great Western
Financial Corporation. Mr. Peddicord received his Bachelor's Degree in Economics
from the University of California at Los Angeles.
HERBERT L. PORTER. Mr. Porter, 60, has served as our Senior Vice
President -- Construction and Development since our formation. Mr. Porter served
as Director of Construction and Capital Improvements for Namiz from 1993 to
1996. From 1973 to 1992, Mr. Porter was a partner/owner in his own real estate
development and property management company specializing in medium to high-rise
commercial office buildings. Mr. Porter's over 25 years in commercial office
development include planning, financing, acquisition, entitlements and
approvals, design, construction, marketing, leasing, tenant improvements and
outright sale. Mr. Porter received his Bachelor's Degree from the University of
Southern California.
BRIGITTA B. TROY. Ms. Troy has served as our Senior Vice
President -- Acquisitions since our formation. Ms. Troy served as Director of
Acquisitions for Namiz from 1993 to 1996 and Pacific Financial Group from 1982
to 1989. During the period from 1989 to 1993, she was principal of Esquire
Investment Partners, a real estate advisory firm. A graduate of Radcliffe
College, Ms. Troy received her Juris Doctor Degree from the University of
Southern California Law School and a Master of Business Administration from the
UCLA Graduate School of Management. Ms. Troy is also a member of the State Bar
of California.
3
<PAGE> 7
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
we paid for services rendered during the fiscal years ended December 31, 1998
and 1997 and for the period from our inception as a public company, (October 9,
1996) through December 31, 1996 to our Chief Executive Officer and to our four
other most highly compensated executive officers (the "Named Executive
Officers"). Prior to our inception as a public company, we did not pay any
compensation to our officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------- ------------ RESTRICTED
OTHER ANNUAL OPTIONS STOCK STOCK
NAME AND TITLE YEAR SALARY($) BONUS($) COMPENSATION($)(1) GRANTED(#) AWARD($) BONUS(#)
- ---------------------------- ---- --------- -------- ------------------ ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard S. Ziman............ 1998 $330,000 $247,500 $9,600 422,000 -- --
Chairman of the Board, 1997 300,000 228,000 9,600 211,000 -- --
Chief Executive Officer 1996 75,000 -- 2,400 400,000 -- --
and Director
Victor J. Coleman........... 1998 275,000 206,250 7,800 280,000 -- --
President, Chief Operating 1997 250,000 162,500 7,800 140,000 -- --
Officer and Director 1996 62,500 -- 1,950 250,000 -- --
Diana M. Laing.............. 1998 214,500 160,875 6,000 200,000 --(2) --
Executive Vice President, 1997 195,000 114,500 6,000 60,000 -- --
Chief Financial Officer 1996 48,750 -- 1,500 50,000 -- --
and Secretary
Andrew J. Sobel............. 1998 187,500 140,625 -- 200,000 --(2) --
Executive Vice President 1997 150,000 87,500 -- 45,000 -- --
and Director of Property 1996 31,250 7,750 -- 40,000 -- 3,750(3)
Operations
Robert C. Peddicord......... 1998 112,300 127,600 -- 70,000 -- --
Senior Vice President -- 1997 106,250 68,750 -- -- -- --
Leasing 1996 11,600 6,400 -- 10,000 -- --
</TABLE>
- ---------------
(1) Represents an annual auto allowance.
(2) In August 1998, we issued 42,553 shares of our Common Stock, through the
1996 Stock Option and Incentive Plan of Arden Realty, Inc. and Arden Realty
Limited Partnership to this executive. These shares are encumbered by a
promissory note (the "Note") in the amount of $1.0 million. The Note is
recourse and secured by the shares of Common Stock issued, bears interest at
6% per annum with all accrued interest and principal due on August 14, 2004.
Provided that the executive is still employed by Arden Realty, the
outstanding principal amount of the Note will be forgiven as follows: (i)
8/14/01, $100,000; (ii) 8/14/02, $166,667; (iii) 8/14/03, $200,000; (iv)
8/14/04, $200,000. Additionally, provided that the executive is still
employed by Arden Realty, all accrued and unpaid interest and the
outstanding principal amount of the Note will be forgiven upon a change in
control (as defined) of Arden Realty or upon the death or disability of the
executive.
(3) Represents the number of shares for a one-time Common Stock Bonus in 1996.
4
<PAGE> 8
OPTION GRANTS IN LAST FISCAL YEAR
The following table presents information relating to options granted to
purchase Common Shares to the Named Executive Officers during 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1)
---------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT
COMMON PERCENT OF ASSUMED ANNUAL RATES OF
SHARES TOTAL OPTIONS SHARE PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ------------------------
NAME GRANTED(#) FISCAL YEAR SHARE DATE 5% 10%
---- ----------- ------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard S. Ziman........ 422,000 25.78% $25.94 7/22/08 $6,884,000 $17,446,000
Victor J. Coleman....... 280,000 17.10% 25.94 7/22/08 4,568,000 11,576,000
Diana M. Laing.......... 200,000 12.22% 25.94 7/22/08 3,263,000 8,268,000
Andrew J. Sobel......... 200,000 12.22% 25.94 7/22/08 3,263,000 8,268,000
Robert C. Peddicord..... 10,000 .61% 28.56 2/27/08 157,000 388,000
60,000 3.67% 25.94 7/22/08 979,000 2,481,000
</TABLE>
- ---------------
(1) The options granted to Messrs. Ziman, Coleman, Sobel and Ms. Laing become
exercisable in two equal installments beginning on the first anniversary of
the date of grant. The options granted to Mr. Peddicord become exercisable
in three equal installments beginning on the first anniversary of the date
of grant. All options granted in 1998 have a term of ten years subject to
earlier termination in certain events related to termination of employment.
The option exercise price for all options granted in 1998 is equal to the
fair market value of outstanding Common Shares on the date of grant.
(2) Assumed annual rates of stock price appreciation for illustrative purposes
only. Actual stock prices will vary from time to time based upon market
factors and our financial performance. No assurances can be given that these
appreciation rates will be achieved.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth certain information concerning exercised and
unexercised options held by the Named Executive Officers at December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT
SHARES AT DECEMBER 31, 1998 DECEMBER 31, 1998(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard S. Ziman........... -- -- 203,666 696,001 $3,092,000 $3,092,000
Victor J. Coleman.......... -- -- 213,334 456,666 3,865,000 1,932,000
Diana M. Laing............. -- -- 53,333 256,667 773,000 387,000
Andrew J. Sobel............ -- -- 41,667 243,333 618,000 309,000
Robert C. Peddicord........ -- -- 6,666 73,334 -- --
</TABLE>
- ---------------
(1) Based on the December 31, 1998 closing price of $23.19 per Common Share, as
reported by the New York Stock Exchange.
EMPLOYMENT AGREEMENTS
In October 1996, we entered into employment agreements with both Messrs.
Ziman and Coleman which were amended and restated in August 1998. The employment
agreements of Messrs. Ziman and Coleman have an initial term of three years and
are subject to automatic one-year extensions following the expiration of the
initial term. For the first year of the term, the employment agreements of
Messrs. Ziman and Coleman provide for an initial annual base compensation in the
amounts set forth in the Executive Compensation table with the amount of an
initial bonus for such year determined by the Compensation Committee as set
forth in the Executive Compensation Table. For subsequent years, both the amount
of base compensation and any bonus will be determined by the Compensation
Committee.
5
<PAGE> 9
We entered into an employment agreement with Ms. Laing effective August 1,
1996 which had an initial term of one year and was subject to automatic one-year
extensions following the expiration of the initial term. On August 1, 1997, Ms.
Laing's employment agreement was extended for a one year term. Ms. Laing's
initial employment agreement provided for an initial annual base compensation in
the amount set forth in the Executive Compensation table and entitled her to an
initial cash bonus in an amount determined by the Compensation Committee but not
to exceed 20% of her initial annual base compensation. On August 4, 1998, we
amended and restated Ms. Laing's employment agreement for an initial three year
term commencing on January 1, 1998 with automatic one-year extensions following
the expiration of the initial term. For the first year of the amended and
restated term, Ms. Laing's annual base compensation was as set forth in the
Executive Compensation Table with the amount of an initial cash bonus for such
year determined by the Compensation Committee as set forth in the Executive
Compensation Table. For subsequent years, both the amount of Ms. Laing's base
compensation and any bonus will be determined by the Compensation Committee.
In October 1996, we entered into an employment agreement with Mr. Sobel
which had an initial term of three years and was subject to automatic one-year
extensions following the expiration of the initial term. In August 1998, we
amended and restated Mr. Sobel's employment agreement for an initial three year
term commencing on January 1, 1998 with automatic one-year extensions following
the expiration of the initial term. Mr. Sobel's employment agreement provides
for an initial annual base compensation in the amount set forth in the Executive
Compensation table and entitles him to an initial cash bonus in an amount
determined by the Compensation Committee as set forth in the Executive
Compensation Table. For subsequent years, both the amount of Mr. Sobel's base
compensation and any bonus will be determined by the Compensation Committee.
In January 1999, we entered into an employment agreement with Mr. Peddicord
which has a term of one year with an effective date of December 1, 1998. Mr.
Peddicord's employment agreement provides for annual base compensation of
$196,000 and any bonus to be determined by the Compensation Committee.
The employment agreements of Messrs. Ziman, Coleman, Sobel, Peddicord and
Ms. Laing entitle the executives to participate in our Stock Incentive Plan
(each executive has been allocated the number of stock options set forth in the
Executive Compensation table) and to receive certain other insurance and pension
benefits. In addition, in the event of a termination by Arden Realty without
"cause," a termination by the executive for "good reason," or a termination
pursuant to a "change in control" of Arden Realty (as such terms are defined in
the respective employment agreements), the terminated executive will be entitled
to (i) a single severance payment (the "Severance Amount") and (ii) continued
receipt of certain benefits including medical insurance, life and disability
insurance and participation in all pension, 401(k) and other employee plans and
benefits we have established for our executive employees for a specified period
of time following the date of termination (collectively, the "Severance
Benefits"). The Severance Amount for Messrs. Ziman, Coleman, Sobel and Ms. Laing
is equal to the sum of three times the executive's average annual base
compensation for the preceding 36 months and three times the highest annual
bonus received in the preceding 36 month period. The Severance Amount for Mr.
Peddicord is equal to the sum of one times his average annual base compensation
for the preceding 24 month period and an amount equal to his most recent annual
bonus. Receipt of the Severance Benefits shall continue for three years
commencing on the date of termination in the case of Messrs. Ziman, Coleman,
Sobel and Ms. Laing and for one year commencing on the date of termination in
the case of Mr. Peddicord. In the event of a termination without cause, in
addition to payment of the Severance Amount, for Messrs. Ziman, Coleman, Sobel,
Peddicord and Ms. Laing, any unvested stock options will become fully vested as
of the date of termination. In addition, if any of Messrs. Ziman's, Coleman's,
Sobel's, Peddicord's or Ms. Laing's Severance Amounts or Benefits are parachute
payments under the Internal Revenue Code, we have agreed to make additional
payments to he or she to compensate for additional tax obligations.
The employment agreements for Ms. Laing and Mr. Sobel entitle the
executives to receive, through the 1996 Stock Option and Incentive Plan of Arden
Realty, Inc. and Arden Realty Limited Partnership, shares of our Common Stock
equal in value to $1.0 million. Accordingly, on August 14, 1998, we issued
42,553 shares
6
<PAGE> 10
of our Common Stock to both Ms. Laing and Mr. Sobel in exchange for Promissory
Notes (the "Notes") in the amount of $1.0 million each from Ms. Laing and Mr.
Sobel.
The Notes are recourse and secured by the shares of Common Stock issued to
Ms. Laing and Mr. Sobel, bear interest at 6% per annum with all accrued interest
and principal due on August 14, 2004. Provided that Ms. Laing and Mr. Sobel are
still employed by Arden Realty, the outstanding principal amount of the Notes
will be forgiven as follows:
<TABLE>
<CAPTION>
AMOUNT
DATE FORGIVEN
- ---- --------
<S> <C>
8/14/01................................................... $100,000
8/14/02................................................... 166,667
8/14/03................................................... 200,000
8/14/04................................................... 200,000
--------
$666,667
========
</TABLE>
Additionally, provided that Ms. Laing and Mr. Sobel are still employed by
Arden Realty, all accrued and unpaid interest and the outstanding principal
amount of the Notes will be forgiven upon a change in control (as defined) of
Arden Realty or upon the death or disability of Ms. Laing or Mr. Sobel.
As part of the employment agreements, each of Messrs. Ziman, Coleman, Sobel
and Ms. Laing are bound by a non-competition covenant with us which prohibits
them from engaging in (i) the acquisition, renovation, management or leasing of
any office properties in the Los Angeles, Orange and San Diego counties of
Southern California and (ii) any active or passive investment in or reasonably
relating to the acquisition, renovation, management or leasing of office
properties in the Los Angeles, Orange and San Diego counties of Southern
California for a period of one year following the date of such executive's
termination, unless such termination was without cause.
PROPOSAL I: ELECTION OF DIRECTORS
Pursuant to our charter (the "Charter"), we have seven directors, who are
divided into three classes, as nearly equal in number as possible. The directors
currently are divided into three classes, consisting of two members whose terms
will expire at this Annual Meeting, three members whose terms will expire at the
2000 annual meeting of stockholders and two members whose terms will expire at
the 2001 annual meeting of stockholders.
Pursuant to the Charter, at each annual meeting the successors to the class
of directors whose terms expire at that meeting shall be elected to hold office
for a term expiring at the annual meeting of stockholders held in the third year
following the year of their election. Accordingly, at the Annual Meeting, the
nominees for election will be elected to hold office for a term of three years
until the annual meeting of stockholders to be held in the year 2002, and until
their respective successor is duly elected and qualified.
EXCEPT WHERE OTHERWISE INSTRUCTED, PROXIES SOLICITED BY THIS PROXY
STATEMENT WILL BE VOTED FOR THE ELECTION OF THE BOARD'S NOMINEES LISTED BELOW.
Each nominee has consented to be named in this Proxy Statement and to serve as a
director if elected.
The information below relating to the nominees for election as director and
for each of the other directors whose terms of office continue after the Annual
Meeting has been furnished to us by the respective individuals.
NOMINEES FOR DIRECTOR
RICHARD S. ZIMAN. Chairman of the Board, Chief Executive Officer and
Director of Arden Realty. Biographical information regarding Mr. Ziman is set
forth under "Executive Officers" in this Proxy Statement. If elected, Mr.
Ziman's term as a Director will expire at the year 2002 annual meeting of
stockholders.
7
<PAGE> 11
VICTOR J. COLEMAN. President, Chief Operating Officer and Director of Arden
Realty. Biographical information regarding Mr. Coleman is set forth under
"Executive Officers" in this Proxy Statement. If elected, Mr. Coleman's term as
a Director will expire at the year 2002 annual meeting of stockholders.
VOTE REQUIRED AND BOARD RECOMMENDATION
The director will be elected by a favorable vote of a plurality of all
votes cast at a meeting at which a quorum is present. For purposes of the
election of the directors, abstentions will count toward calculation of a quorum
but will not be counted as votes cast and will have no effect on the results of
the vote. Unless instructed to the contrary, the shares represented by the
proxies will be FOR the election of the nominees named above.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
RICHARD S. ZIMAN AND VICTOR J. COLEMAN TO SERVE UNTIL THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD IN THE YEAR 2002 AND UNTIL THEIR SUCCESSORS ARE DULY
ELECTED AND QUALIFIED.
OTHER DIRECTORS WHOSE TERMS OF OFFICE CONTINUE AFTER THE ANNUAL MEETING
Information concerning the other directors whose terms do not expire at the
Annual Meeting is set forth below.
CARL D. COVITZ. Mr. Covitz, 60, has served as a member of our Board of
Directors since our formation as a public company in October 1996. For the past
19 years, Mr. Covitz has served as the owner and President of Landmark Capital,
Inc., a national real estate development and investment company involved in the
construction, financing, ownership and management of commercial, residential and
warehouse properties. Mr. Covitz has also previously served, from 1990 to 1993,
as Secretary of the Business, Transportation & Housing Agency of the State of
California as well as Under Secretary and Chief Operating Officer of the U.S.
Department of Housing and Urban Development from 1987 to 1989. Mr. Covitz is
currently the Chairman of the Board of Directors of Century Housing Corporation
and is the past Chairman of the Board of several organizations including the
Federal Home Loan Bank of San Francisco and the Los Angeles City Housing
Authority. Mr. Covitz received his Bachelor's Degree from the Wharton School at
the University of Pennsylvania and his Master of Business Administration from
the Columbia University Graduate School of Business. Mr. Covitz' term as
Director is schedule to expire at the year 2000 annual meeting of stockholders.
LARRY S. FLAX. Mr. Flax, 56, has served as a member of our Board of
Directors since December 1996. Mr. Flax is Co-Founder and Co-Chairman of the
Board of California Pizza Kitchen. Prior to becoming a restaurateur in 1985, Mr.
Flax served in Los Angeles as Assistant U.S. Attorney from 1968 to 1972, Chief
of Civil Rights from 1970 to 1971 and Assistant Chief of the Criminal Division
for the United States Department of Justice from 1971 to 1972. Mr. Flax attended
the University of Washington as an undergraduate and received his Juris Doctor
from the University of Southern California Law School in 1967. Mr. Flax's term
as a Director is scheduled to expire at the year 2000 annual meeting of
stockholders.
PETER S. GOLD. Mr. Gold, 73, has served as a member of our Board of
Directors since July 1998. During a career that spanned more than 30 years at
Price Pfister, Inc., Mr. Gold served as owner, President, Chairman and Chief
Executive Officer. Price Pfister, Inc., is one of the largest faucet
manufacturers in the world. Mr. Gold executed a leveraged buyout of Price
Pfister, Inc. and eventually took that company public in 1987 before selling it
in 1988. Mr. Gold remained in his position as a Chairman and Chief Executive
Officer of Price Pfister, Inc. until his retirement in 1990. Mr. Gold is a
Director Emeritus of Home Depot, Inc. and is currently a chairman and a member
of the board of trustees of two private organizations. Mr. Gold attended the
University of Southern California, received his Juris Doctor Degree from
Southwestern University School of Law and received a Doctor of Humane Letters
from Pitzer College. Mr. Gold's term as Director will expire at the year 2001
annual meeting of stockholders.
STEVEN C. GOOD. Mr. Good, 56, has served as a member of our Board of
Directors since our formation as a public company in October 1996. Mr. Good is
the senior partner in the firm of Good Swartz & Berns, an accountancy
corporation founded in 1993 which evolved from the firm of Block, Good and
Gagerman, which
8
<PAGE> 12
he founded in 1976. Prior to 1976, Mr. Good was a partner first at Laventhol &
Horwath, a national accounting firm, and later at Horowitz & Good. Mr. Good is a
founder and past Chairman of CU Bancorp, where he directed the bank's operations
from 1982 through 1989. For the past seven years he has been a member of the
Board of Directors of Opto Sensors, Incorporated. Mr. Good received his Bachelor
of Science in Business Administration from the University of California at Los
Angeles and attended UCLA's Graduate School of Business. Mr. Good's term as
Director will expire at the year 2001 annual meeting of stockholders.
KENNETH B. ROATH. Mr. Roath, 63, has served as a member of our Board of
Directors since our formation as a public company in October 1996. Mr. Roath is
currently Chairman, President and Chief Executive Officer of Health Care
Property Investors, Inc., a leader in the health care REIT industry. Mr. Roath
is past Chairman of the National Association of Real Estate Investment Trusts
("NAREIT") and also serves as a member of the Board of Governors and Executive
Committee of NAREIT. Mr. Roath is also a director of Franchise Finance
Corporation of America. Mr. Roath received his Bachelor's Degree in accounting
from San Diego State University. Mr. Roath's term as a Director is scheduled to
expire at the year 2000 annual meeting of stockholders.
BOARD OF DIRECTORS MEETINGS AND ATTENDANCE
Our Board of Directors (the "Board") held ten meetings during our last full
fiscal year. All Directors attended at least 75% of the aggregate of (i) the
total number of meetings of the Board while they were on the Board and (ii) the
total number of meetings of the committees of the Board on which such directors
served.
BOARD COMMITTEES
Our Board of Directors has an Audit Committee, an Executive Committee, a
Compensation Committee, and an Acquisition Committee.
Audit Committee. The Audit Committee consists of Mr. Good, its Chairman,
and Mr. Covitz. The Audit Committee:
- Makes recommendations concerning the engagement of independent public
accountants.
- Reviews the independence of our independent public accountants.
- Approves other professional services provided by the independent public
accountants.
- Reviews the scope and results of the annual audit engagement with our
independent public accountants.
- Considers the range of audit and non-audit fees.
- Reviews the adequacy of our internal accounting controls.
The Audit Committee met three times during 1998.
Executive Committee. The Executive Committee consists of Mr. Ziman, its
Chairman, and Mr. Coleman. Subject to our conflict of interest policies, the
Executive Committee has authority to dispose of real property and the power to
authorize on behalf of the full Board of Directors, the execution of certain
contracts and agreements, including those related to our debt financings (and,
consistent with the Partnership Agreement of Arden Realty Limited Partnership
(the "Operating Partnership"), to cause the Operating Partnership to take such
actions). The Executive Committee did not meet during 1998.
Compensation Committee. The Compensation Committee consists of Mr. Roath,
its Chairman, and Messrs. Good and Gold. The function of the Compensation
Committee is to:
- Establish, review, modify, and adopt compensation plans and arrangements
for Arden Realty.
- Review, determine and establish the compensation (including bonuses) of
our officers.
The Compensation Committee met three times during 1998.
9
<PAGE> 13
Acquisition Committee. The Acquisition Committee consists of Mr. Ziman, its
Chairman, and Messrs. Coleman and Covitz. The Acquisition Committee has the
authority to approve the acquisition of real property with purchase prices up to
$20 million. Any acquisition greater in amount requires full Board approval. The
Acquisition Committee met one time during 1998.
COMPENSATION OF DIRECTORS
Each of our non-employee directors receives annual compensation of $18,000
for their services. In addition, each non-employee director receives $1,000 for
each Board of Directors meeting attended. Each non-employee director attending
any committee meetings receives an additional $1,000 for each committee meeting
attended, unless the committee meeting is held on the day of a meeting of the
Board of Directors. Each non-employee director is also reimbursed for reasonable
expenses incurred to attend director and committee meetings. Officers who are
also our Directors are not paid any directors' fees. In addition, under our
stock incentive plan, upon his initial appointment to the Board of Directors,
each non-employee director is automatically granted options to purchase 10,000
Common Shares of our stock at the then current market price. These initial
options vest during the directors' continued service at a rate of 2,500 Common
Shares per year.
On October 15, 1997, each non-employee director was granted options to
purchase an additional 10,000 Common Shares at the closing stock price on such
date ($32.25). On December 15, 1998, each non-employee director was granted
options to purchase an additional 40,000 Common Shares at the closing stock
price on such date ($22.50). These options vest during the directors' continued
service over a three-year period, with one third of the options vesting on each
anniversary of the grant date. The following table sets forth certain
information concerning exercised and unexercised options held by non-employee
directors at December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF COMMON SHARES
UNDERLYING OPTIONS GRANTED(#) EXERCISE
----------------------------- PRICE EXPIRATION
NAME EXERCISABLE UNEXERCISABLE PER SHARE DATE
- ---- ----------- ------------- --------- ----------
<S> <C> <C> <C> <C>
Carl D. Covitz............................ 5,000 5,000 $20.00 10/04/06
3,333 6,667 32.25 10/15/07
-- 40,000 22.50 12/15/08
Larry S. Flax............................. 5,000 5,000 27.00 2/13/07
3,333 6,667 32.25 10/15/07
-- 40,000 22.50 12/15/08
Peter S. Gold............................. -- 10,000 25.94 7/22/08
-- 40,000 22.50 12/15/08
Steven C. Good............................ 5,000 5,000 20.00 10/04/06
3,333 6,667 32.25 10/15/07
-- 40,000 22.50 12/15/08
Kenneth B. Roath.......................... 5,000 5,000 20.00 10/04/06
3,333 6,667 32.25 10/15/07
-- 40,000 22.50 12/15/08
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no Compensation Committee interlocks and none of our employees
participate on the Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board is composed of the three
non-employee directors whose names appear at the end of this report, each has
general review authority over compensation levels of all corporate officers and
key management personnel, oversees benefit and compensation programs, and, from
time to time, considers and recommends new programs to the Board.
10
<PAGE> 14
The Committee is responsible for reviewing the performance of, and
recommending to the Board the compensation of Mr. Ziman, our Chairman of the
Board and Chief Executive Officer. The Board has the final authority to set Mr.
Ziman's compensation.
In 1998, Mr. Ziman received an annual base salary of $330,000 pursuant to
his employment agreement, as well as a performance based cash bonus of $247,500.
In determining the amount of the cash bonus to Mr. Ziman, the Committee
considered the overall performance of Arden Realty for 1998 as compared to other
REITs. In addition, Mr. Ziman received an option exercisable for 422,000 Common
Shares. The Committee believes that the option grant to Mr. Ziman in 1998 is
consistent with the long-term performance objectives of Arden Realty, and is
also consistent with the Committee's philosophy to link a substantial portion of
the chief executive officer's compensation with the long-term value created for
our stockholders. The options vest equally over two years, with the first half
becoming exercisable one year from the date of grant.
The Committee also reviews the individual performance level for other
senior executives whose compensation is detailed in this Proxy Statement.
Set forth below is a report of the Committee addressing our compensation
policies for 1998.
OVERALL POLICY
The key elements of our senior executive compensation program consist of
base salary, cash bonuses and a long-term incentive opportunity. The program is
intended to enable us to attract, motivate, and retain senior executives, by
providing a fully competitive total compensation package based on both
individual and corporate performance, taking into account both annual and
long-term performance goals, and recognizing individual initiative and
achievement. In the view of the Committee, the program fully satisfied those
goals in 1998.
The program employs cash incentives based upon performance and stock
options with time vesting provisions. The Committee endorses the view that
performance based annual cash compensation and stock-based long-term incentives
aid in aligning management's and stockholders' interests and enhance value to
stockholders. Accordingly, these elements play an important role in the total
compensation packages for our executive officers.
ANNUAL COMPENSATION PROGRAM
Annual total cash compensation for senior executives consists of base
salary and performance based cash bonuses.
Base salaries for executive officers are determined by evaluating the
responsibilities of the position held and the experience of the individual, and
by reference to the competitive marketplace for executives, including a
comparison to base salaries for comparable positions at other real estate
companies.
The amount of bonus awards are determined by evaluating the performance of
the senior executive and our overall performance.
LONG-TERM INCENTIVE PROGRAM
The long-term incentive program for senior executives consists of the use
of stock options and restricted stock awards. In 1998, all of our senior
executives participated in the long-term program and received stock options and
two of our officers received restricted stock awards. The primary purpose of the
program is to offer an incentive for the improvement of our long-term
performance and promote growth in stockholder value.
Options and restricted stock awards may be granted under the stock option
program to our senior executives at the discretion of the Committee. The
exercise price for all option shares granted to senior executives is the fair
market value on the date of the grant. The issue price for restricted stock
awards in 1998 was the fair market value on the date of the award.
11
<PAGE> 15
Annual compensation, restricted stock awards and stock options granted to
our senior executive officers in 1998 are summarized in the Executive
Compensation Table of this Proxy Statement.
Compensation Committee
Kenneth B. Roath, Chairman
Peter S. Gold
Steven C. Good
Date: April 14, 1999
The above report of the Compensation Committee will not be deemed to be
incorporated by reference into any filing by Arden Realty under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we
specifically incorporate the same by reference.
PERFORMANCE GRAPH
As a part of the rules of the Securities and Exchange Commission (the
"Commission") concerning executive compensation disclosure, we are obligated to
provide a chart comparing the yearly percentage change in the cumulative total
stockholder return on our Common Shares over a five year period. However, since
our Common Shares have been publicly traded only since October 4, 1996, this
information is provided from that date through December 31, 1998.
The following line graph compares the change in our cumulative stockholder
return on our Common Shares to the cumulative total return of the Standard &
Poor's 500 Stock Index ("S&P 500 Index") and the NAREIT Equity REIT Total Return
Index ("NAREIT Index") from October 3, 1996, the effective date of our initial
public offering, to December 31, 1998. The graph assumes the investment of $100
in Arden Realty and each of the indices on October 3, 1996 and, as required by
the Commission, the reinvestment of all distributions. The return shown on the
graph is not necessarily indicative of future performance.
<TABLE>
<CAPTION>
NAREIT INDEX ARDEN REALTY, INC. S&P 500 INDEX
------------ ------------------ -------------
<S> <C> <C> <C>
10/4/96 100.00 100.00 100.00
12/31/96 121.49 122.10 108.81
6/30/97 130.67 118.26 144.09
12/31/97 154.08 143.67 165.94
6/30/98 144.35 124.44 206.39
12/31/98 120.22 115.69 231.19
</TABLE>
12
<PAGE> 16
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Shares (or Common Shares for which limited partnership
interests in the Operating Partnership ("OP Units") are exchangeable) as of
December 31, 1998 for (1) each person known by us to be the beneficial owner of
five percent or more of our outstanding Common Shares (or Common Shares for
which OP Units are exchangeable), (2) each director and each Named Executive
Officer and (3) our directors and officers as a group. Except as indicated
below, all such Common Shares are owned directly, and the indicated person has
sole voting and investment power.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE OF COMMON
NAME AND ADDRESS(1) COMMON SHARES SHARES OUTSTANDING(2)
------------------- ------------------- ---------------------
<S> <C> <C>
Cohen & Steers Capital Management, Inc......... 7,235,500 12.92%
757 Third Avenue
New York, NY 10017
Scudder Kemper Investments, Inc................ 3,974,975 6.37%
345 Park Avenue
New York, NY 10154
Franklin Resources, Inc........................ 3,782,184 6.10%
777 Mariners Island Blvd.
San Mateo, CA 94404
Richard S. Ziman............................... 2,095,305(3) 3.36%
Victor J. Coleman.............................. 1,429,114(4) 2.29%
Diana M. Laing................................. 100,886(5) *
Andrew J. Sobel................................ 87,970(6) *
Robert C. Peddicord............................ 6,666(7) *
Carl D. Covitz................................. 8,333(7) *
Larry S. Flax.................................. 18,333(8) *
Peter S. Gold.................................. 4,000(9)
Steven C. Good................................. 9,933(10) *
Kenneth B. Roath............................... 9,333(8) *
All directors and officers as a group (16
persons)..................................... 3,843,006 6.16%
</TABLE>
- ---------------
* Less than one percent.
(1) Unless otherwise indicated, the address for each of the persons listed is
11601 Wilshire Boulevard, Fourth Floor, Los Angeles, CA 90025.
(2) For Mr. Coleman, beneficial ownership of Common Shares is currently held
100% in the form of OP Units and exercisable stock options. In addition,
amounts for individuals assume that all OP Units held by the person are
exchanged for Common Shares and that none of the OP Units held by other
persons are exchanged for Common Shares. Amounts for all directors and
officers as a group assume all OP Units owned by directors and officers are
exchanged for Common Shares.
(3) Includes (a) 775,196 OP Units held by an entity in which Messrs. Ziman and
Coleman have shared voting and investment power, of which OP Units Mr.
Ziman disclaims beneficial ownership in the 40% of such OP Units in which
he has no pecuniary interest, (b) 314,342 OP Units owned by Mr. Ziman, (c)
136,674 OP Units owned by a family partnership of Mr. Ziman, in which Mr.
Ziman has shared voting and investment power and of which Mr. Ziman is a
20% general partner and disclaims beneficial ownership of the remaining 80%
in which he has no pecuniary interests, (d) 353,212 OP Units held by
entities of which Mr. Ziman is a 100% owner, and (e) 203,666 shares related
to exercisable stock options.
(4) Includes (a) 775,196 OP Units held by an entity in which Messrs. Ziman and
Coleman have shared voting and investment power, of which OP Units Mr.
Coleman disclaims beneficial ownership in the 60% of such OP Units in which
he has no pecuniary interest, (b) 99,458 OP Units owned by an entity owned
100% by Mr. Coleman, (c) 341,126 OP Units owned of record by the Coleman
Family Trust of
13
<PAGE> 17
which Mr. Coleman is the trustee with sole voting and disposition power,
and (d) 213,334 shares related to exercisable stock options.
(5) Includes 42,553 shares encumbered by a $1.0 million note payable to Arden
Realty, and 53,333 shares related to exercisable stock options.
(6) Includes 42,553 shares encumbered by a $1.0 million note payable to Arden
Realty, and 41,667 shares related to exercisable stock options.
(7) Represents shares related to exercisable stock options.
(8) Includes 8,333 shares related to exercisable stock options.
(9) These shares are owned of record by a family trust of which Mr. Gold is a
co-trustee with shared investment and voting power.
(10) Includes 1,200 shares held in trust by the Good Swartz & Berns Pension
Plan, 400 shares in Mr. Good's 401(k) plan with Good, Swartz & Berns and
8,333 shares related to exercisable stock options.
COMPLIANCE WITH FEDERAL SECURITIES LAWS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our officers and directors, and persons who own more than ten percent of a
registered class of our equity securities (collectively, "Insiders"), to file
with the Commission initial reports of ownership and reports of changes in
ownership of our Common Shares and other equity securities of Arden Realty.
Insiders are required by regulation of the Commission to furnish us with copies
of all Section 16(a) forms they file.
To our knowledge, based solely on review of the copies of such reports
furnished to us or written representations that no other reports were required,
during the year ended December 31, 1998, all Insiders complied with all Section
16(a) filing requirements applicable to them; however, compliance with such
requirements by the following Insiders was late due to administrative oversight
with respect to the filing by each of his or her Form 4: Jeffrey A. Berger;
Daniel S. Bothe; Victor J. Coleman; Carl D. Covitz; Richard S. Davis; Larry S.
Flax; Peter S. Gold; Steven C. Good; Diana M. Laing; Randy J. Noblitt; Robert C.
Peddicord; Herber L. Porter; Kenneth B. Roath; Andrew J. Sobel; Brigitta B. Troy
and Richard S. Ziman.
SHAREHOLDER PROPOSALS
In order for stockholder proposals otherwise satisfying the eligibility
requirements of SEC Rule 14a-8 to be considered for inclusion in our Proxy
Statement, they must be received by us at our principal office in Los Angeles,
California, on or before December 16, 1999.
In addition, if a stockholder desires to bring business (including director
nominations) before our Year 2000 Annual Meeting that is or is not the subject
of a proposal timely submitted for inclusion in our Proxy Statement, written
notice of such business, as prescribed in our Bylaws, must be received by our
Secretary between February 18, 2000 and March 19, 2000. For additional
requirements, a stockholder may refer to our Bylaws, Section 12, "Nominations
and Stockholder Business," a copy of which may be obtained from our Secretary.
If we do not receive timely notice pursuant to our Bylaws, any proposal will be
excluded from consideration at the meeting, regardless of any earlier notice
provided in accord with SEC Rule 14a-8.
14
<PAGE> 18
AUDITORS
Subject to its discretion to appoint alternative auditors if it deems such
action appropriate, the Board of Directors has retained Ernst & Young, LLP as
our auditors for the current fiscal year. The Board of Directors has been
advised that Ernst & Young, LLP is independent with regard to Arden Realty
within the meaning of the Securities Act and the applicable published rules and
regulations thereunder. Representatives of Ernst & Young, LLP are expected to be
present at the Annual Meeting and will have the opportunity to make statements
if they desire and to respond to appropriate questions from stockholders.
PROXY SOLICITATION EXPENSE
The cost of soliciting proxies will be borne by Arden Realty. We will also
request persons, firms and corporations holding shares beneficially owned by
others to send proxy materials to, and obtain proxies from, the beneficial
owners of such shares and will, upon request, pay the holders' reasonable
expenses for doing so.
April 14, 1999
By Order of the Board of Directors
/s/ DIANE M.LAING
Diana M. Laing
Executive Vice President,
Chief Financial Officer and Secretary
15
<PAGE> 19
ARDEN REALTY, INC.
11601 WILSHIRE BOULEVARD
FOURTH FLOOR
LOS ANGELES, CALIFORNIA 90025-1740
P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Arden Realty, Inc., a Maryland Corporation,
hereby appoints Richard S. Ziman and Victor J. Coleman, and each or either of
them as proxies, with full power of substitution or resubstitution, to represent
the undersigned and to vote all shares of Common Stock of Arden Realty, Inc.
which the undersigned is entitled to vote at the Annual Meeting of the Company
to be held on May 18, 1999 and any and all adjournments in the manner specified.
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY AND THAT YOUR SHARES
BE REPRESENTED. STOCKHOLDERS ARE URGED TO IMMEDIATELY MARK, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
(Continued and to be dated and signed on the reverse side.)
ARDEN REALTY, INC.
P.O. BOX 11414
NEW YORK, N.Y. 10203-0414
<PAGE> 20
Proposal 1. Election of Directors
The Board of Directors recommends a vote FOR Election of Directors.
FOR the nominees listed below. WITHHOLD AUTHORITY to vote for
the nominees listed below.
[ ] [ ]
NOMINEES: VICTOR J. COLEMAN AND RICHARD S. ZIMAN
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, strike a line through that nominee's name above.)
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" PROPOSAL ONE.
Should any other matters requiring the vote of the Stockholders arise, the
named proxies are authorized to vote the same in accordance with their best
judgement in the interest of the Company. The Board of Directors is not aware
of any other matter which is to be presented for action at the meeting other
than the matters set forth herein.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Change of Address and or Comments Mark Here [ ]
Please sign exactly as your name appears hereon. When
signing as attorney, executor, administrator, trustee, or
other representative, please give full title. If more than
one trustee, all should sign. All joint owners should sign.
If a corporation, please sign in full corporate name by
President or other authorized officer.
Date: , 1999
---------------------------
---------------------------
(Signature)
---------------------------
(Signature if held jointly)
Votes must be indicated
[ ] in Black or Blue Ink.
(Please sign, date and return this proxy in the enclosed postage prepaid
envelope.)
