SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant |x|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|x| Preliminary Proxy Statement
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
HRE PROPERTIES, INC.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|x| No fee required.
|_| $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
|_| $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
|_| 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 No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
PRELIMINARY PROXY STATEMENT
HRE PROPERTIES, INC.
321 RAILROAD AVENUE
GREENWICH, CONNECTICUT 06830
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 11, 1998
Notice is hereby given that the Annual Meeting of Stockholders of HRE
Properties, Inc. (the "Company") will be held at the Greenwich Harbor Inn,
Greenwich, Connecticut, on Wednesday, March 11, 1998, at 11:00 a.m. for the
following purposes:
1. To consider and vote upon a proposal to amend the Company's Articles of
Incorporation to change the name of the Company from HRE Properties, Inc.
to Urstadt Biddle Properties Inc.;
2. To elect three Directors to serve for the ensuing three years;
3. To ratify the appointment of Arthur Andersen LLP as the independent
auditors of the Company for the ensuing year; and
4. To transact such other business as may properly come before the meeting or
any adjournment or postponements thereof.
Stockholders of record as of the close of business on January 27, 1998 are
entitled to notice of and to vote at the Meeting or any adjournments or
postponements thereof.
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING IN PERSON,
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
By Order of the Directors
JAMES R. MOORE
Secretary
January , 1998
<PAGE>
HRE PROPERTIES, INC.
321 RAILROAD AVENUE
GREENWICH, CONNECTICUT 06830
------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 11, 1998
This Proxy Statement is furnished to stockholders of HRE Properties, Inc.,
a Maryland corporation (hereinafter called the "Company"), in connection with
the solicitation of proxies in the form enclosed herewith for use at the Annual
Meeting of Stockholders of the Company (the "Meeting") to be held at the
Greenwich Harbor Inn, Greenwich, Connecticut, on March 11, 1998 at 11:00 a.m.
for the purposes set forth in the Notice of Meeting.
The solicitation is made on behalf of the Directors of the Company and the
costs of the solicitation will be borne by the Company. Directors, officers and
employees of the Company and its affiliates may also solicit proxies by
telephone, telegraph, fax or personal interview. The Company will reimburse
banks, brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy material to the beneficial
owners of the shares.
Holders of record of Common Shares of the Company (the "Common Shares") as
of the close of business on the record date, January 27, 1998 (the "Record
Date"), are entitled to receive notice of, and to vote at, the Meeting. The
outstanding Common Shares constitute the only class of securities entitled to
vote at the Meeting, and each Common Share entitles the holder thereof to one
vote. At the close of business on January 27, 1998, there were [ ] Common Shares
issued and outstanding.
Shares represented by proxies in the form enclosed, if such proxies are
properly executed and returned and not revoked, will be voted as specified, but
where no specification is made, the shares will be voted for (i) the proposed
amendment to the Company's Articles of Incorporation (the "Charter Amendment")
to change the name of the Company from HRE Properties, Inc. to Urstadt Biddle
Properties Inc., (ii) the election of the three Directors and (iii) the
ratification of the appointment of Arthur Andersen LLP as the Company's
independent auditors for the ensuing fiscal year, and, in the named proxies'
discretion, as to any other matter which may properly come before the Meeting.
To be voted, proxies must be filed with the Secretary of the Company prior to
voting. Proxies may be revoked at any time before exercise by filing a notice of
such revocation, by filing a later dated proxy with the Secretary of the Company
or by voting in person at the Meeting.
The Annual Report to stockholders for the Company's fiscal year ended
October 31, 1997 has been mailed with this proxy statement. This proxy statement
and the enclosed proxy were mailed to stockholders on or about January 29, 1998.
The principal executive offices of the Company are located at 321 Railroad
Avenue, Greenwich, Connecticut 06830 (telephone 203-863-8200).
PROPOSAL 1. CHARTER AMENDMENT
TO CHANGE THE NAME OF THE COMPANY
The Board of Directors has unanimously approved the proposed Charter
Amendment to change the name of the Company and recommends that the Company's
stockholders approve the adoption of the Charter Amendment. The effect of the
Charter Amendment would be to change the name of the Company from "HRE
Properties, Inc." to "Urstadt Biddle Properties Inc."
The Company was organized in 1969 as a Massachusetts business trust under
the original name of "Hubbard Real Estate Investments." At the time, the name
was selected because Merrill Lynch, the sponsor of the trust, had bought the
real estate firm owned by John and Morrison Hubbard and wanted
<PAGE>
to capitalize on their name and reputation. In 1986, when the Company became
self-managed, Merrill Lynch kept the "Hubbard" name and the Company's name was
changed to "HRE", which is its symbol on the New York Stock Exchange.
Until 1989, the Company's primary business consisted of diverse use
(office, industrial and retail) properties widely spread throughout 19 states.
Beginning in 1989, the Company, under the leadership of Charles J. Urstadt, the
Company's Chairman, Chief Executive Officer and principal stockholder, began to
refocus the business activities into equity investments in shopping centers,
with primary emphasis in the Northeastern part of the United States. In 1997,
the Company effected a reorganization pursuant to which, among other things, the
Company became a Maryland corporation. Mr. Biddle, who joined the Company in
1992, is a director and the President and Chief Operating Officer of the
Company. He has a substantial interest in the Company and represents the next
generation of leadership for the Company.
The Board of Directors of the Company believes that the name HRE has a lack
of identity and has been confused with other similarly named real estate
companies such as BRE, HRH, HMG, HRO, HMH. It also believes that by allowing the
use of their names, Messrs. Urstadt and Biddle are demonstrating their
commitment to the integrity and future of the Company and, therefore, The Board
recommends the change of name.
The change of name pursuant to the Charter Amendment will not affect in any
way the validity or transferability of stock certificates currently outstanding,
and the Company's stockholders will not be required to surrender for exchange
any certificates now held by them. In addition, the change of name will not
affect in any way the capital structure of the Company or the listing of any of
the Common Shares on the New York Stock Exchange, except that the Company will
obtain a new stock exchange ticker symbol to reflect the new Company name. If
the proposed Charter Amendment is approved by the stockholders, the Company
expects to adopt the ticker symbol "[ ]" on the New York Stock Exchange
effective , 1998.
The adoption of the Charter Amendment proposal to change the Company's name
requires the affirmative vote of a majority of the Common Shares outstanding on
the Record Date. The text of the proposed Charter Amendment is attached as
Exhibit 1 to this Proxy Statement. If the Charter Amendment is adopted by the
stockholders, it will become effective upon the filing of Articles of Amendment
with the State Department of Assessments and Taxation of the State of Maryland.
Such filing is expected to be accomplished immediately after the Meeting.
Stockholders of the Company will not have any dissenters' rights of appraisal in
connection with the vote upon the Charter Amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR THE CHARTER AMENDMENT PROPOSAL TO CHANGE THE NAME OF THE COMPANY TO "URSTADT
BIDDLE PROPERTIES INC."
PROPOSAL 2. ELECTION OF DIRECTORS
Pursuant to Section 6.2 of the Articles of Incorporation, the Directors are
divided into three classes serving three-year terms. Three Directors, comprising
Class I, are to be elected at the Meeting. Messrs. Willing L. Biddle, E. Virgil
Conway and Charles D. Urstadt have been nominated for election as Directors to
hold office until the year 2001 Annual Meeting and until their successors have
been elected and shall qualify.
2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
FOR THE PAST FIVE YEARS CONTINUOUS TERM TO
NAME AND CURRENT DIRECTORSHIPS AGE SINCE EXPIRE
- - ------------------------ --------------------------------------------------- ----- ------------ --------
CLASS I
(TO BE NOMINATED FOR ELECTION BY
HOLDERS OF COMMON SHARES TO SERVE FOR THREE YEARS)
<S> <C> <C> <C> <C>
Willing L. Biddle(E) President and Chief Operating Officer of the Company 36 1997 2001
since December 1996; Executive Vice President from
March 1996 to December 1996; Senior Vice
President-Management from June 1995 to March 1996; and
Vice President -- Retail from April 1993 to June 1995;
Vice President, Levites Realty Management Corp.
(1989-1993); Commercial Lending Officer, Chase
Manhattan Bank (1983-1988); Executive Committee Member,
Real Estate Finance Association.
E. Virgil Conway(C)(E) Chairman, Metropolitan Transportation Authority (since 68 1989 2001
1995); Former Chairman, Financial Accounting Standards
Advisory Council (1992-1995); Financial Consultant and
Corporate Director (since January 1989); Chairman and
Director, The Seamen's Bank for Savings, FSB
(1969-1989); Trustee, Consolidated Edison Company of
New York, Inc.; Director, Union Pacific Corporation;
Trustee, Phoenix Home Life Mutual Funds; Trustee,
Atlantic Mutual Insurance Company; Director, Centennial
Insurance Com- pany; Director, Trism, Inc.; Director,
AccuHealth, Inc.; Chairman, New York Housing
Partnership Development Corporation; Vice Chairman,
Academy of Political Science; Trustee, Pace University.
Charles D. Urstadt(A) Senior Director, Brown Harris Stevens, LLC (since 38 1997 2001
1992); President and Director, Urstadt Property
Company, Inc. (since 1997); Publisher, New York
Construction News (1984-1992); Senior Vice President,
Pearce, Urstadt, Mayer & Greer, Inc. (until 1989);
Member, Board of Consultants of the Company (since
1991); President and Director, East Side Association
(since 1988); Director, Friends of Channel 13 (since
1992); Board Member, New York State Board for Historic
Preservation (since 1996); Former Director, New York
Building Congress (1988-1992).
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
FOR THE PAST FIVE YEARS CONTINUOUS TERM TO
NAME AND CURRENT DIRECTORSHIPS AGE SINCE EXPIRE
- - ---------------------- --------------------------------------------------- ----- ------------ --------
CLASS II
(TERM OF OFFICE EXPIRES IN 1999)
<S> <C> <C> <C> <C>
Peter Herrick(A)(E) Retired Vice Chairman (1990-1992) and Director, The 70 1990 1999
Bank of New York; President and Chief Operating
Officer, The Bank of New York (February 1982 to June
1990); President and Director, The Bank of New York
Company, Inc. (February 1984 to March 1992); Member,
New York State Banking Board (June 1990 to April 1993);
Director, BNY Hamilton Funds.
Paul D. Paganucci(A) Chairman, Ledyard National Bank (since April 1991); 66 1984 1999
1991); Chairman of the Executive Committee of W.R.
Grace & Co. (July 1989 to March 1991); Vice Chairman,
W.R. Grace & Co. (November 1986 to July 1989);
Executive Vice President, W.R. Grace & Co. (January
1986 to November 1986); formerly Vice President and
Treasurer of Dartmouth College (July 1977 to December
1985); Director, Filene's Basement, Inc.; Director,
Allmerica Securities Trust, Inc.; Director IGI, Inc.;
Trustee, Colby College; Director, The Grace Institute.
James O. York(A) Real Estate Counselor (since 1988); Retired in 1987 70 1979 1999
1987 as President of R.H. Macy Properties Division and
as Senior Vice President and Director of R.H. Macy Co.,
Inc.; Trustee, The International Council of Shopping
Centers Education and Research Foundation.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
FOR THE PAST FIVE YEARS CONTINUOUS TERM TO
NAME AND CURRENT DIRECTORSHIPS AGE SINCE EXPIRE
- - ------------------------ ---------------------------------------------------- ----- ------------ --------
CLASS III
(TERM OF OFFICE EXPIRES IN 2000)
<S> <C> <C> <C> <C>
Robert R. Douglass(C) Of Counsel, Milbank, Tweed Hadley and McCloy; 66 1991 2000
Chairman and Director, Cedel; Retired Vice Chairman and
Director, The Chase Manhattan Corporation (1985 to
1993); Executive Vice President, General Counsel and
Secretary, The Chase Manhattan Corporation (1976 to
1985); Trustee, Dartmouth College (1983 to 1993);
Chairman, Downtown Lower Manhattan Association;
Chairman of Alliance for Downtown New York; Director,
Business Council for the United Nations; Member,
Council on Foreign Relations; Director, Gryphon
Holdings, Inc.
George H.C. Lawrence (C) President and Chief Executive Officer, Lawrence 60 1988 2000
Properties, Inc. (since 1970); Director, Urstadt
Property Company, Inc.; Trustee, Sarah Lawrence
College; Director, Westchester County Associa- tion;
Senior Vice President and Director, Kensico Cemetery;
Director, CLX Energy.
Charles J. Urstadt(E) Chairman of the Board of Directors and Chief Executive 69 1975 2000
Executive Officer of the Company (since September
1989); Chairman, President and Director, Urstadt
Property Company, Inc. (a real estate investment
corporation); Trustee Emeritus, Pace University;
Advisory Director, Putnam Trust Company; Trustee,
Teacher's Insurance and Annuity Association.
</TABLE>
- - ----------
(A) Member of Audit Committee
(C) Member of Compensation Committee
(E) Member of Executive Committee
During the fiscal year ended October 31, 1997, the Directors held six
meetings. The Directors have three standing committees: an Audit Committee, an
Executive Committee and a Compensation Committee. Each Director attended at
least 75% of the aggregate total number of meetings held during the fiscal year
by the Directors and by all committees of which such Director is a member.
The Audit Committee held two meetings during the fiscal year ended October
31, 1997. The Audit Committee recommends to the Directors the independent public
accountants to be engaged by the Company, reviews with the Company's independent
public accountants and management the Company's internal accounting procedures
and controls, and reviews with the Company's independent public accountants the
scope and results of the auditing engagement. Messrs. Peter Herrick, Paul D.
Paganucci, Charles D. Urstadt and James O. York are the current members of the
Audit Committee.
The Executive Committee held one meeting during the fiscal year ended
October 31, 1997. In general, the Executive Committee may exercise such powers
of the Directors between meetings of the Directors as may be delegated to it by
the Directors (except for certain powers of the Directors which may not be
delegated). Messrs. Willing L. Biddle, E. Virgil Conway, Peter Herrick, and
Charles J. Urstadt are the current members of the Executive Committee.
The Compensation Committee, which makes recommendations to the Directors
concerning compensation and administers the Company's Stock Option Plan and
Restricted Stock Plan, held two meet-
5
<PAGE>
ings during the fiscal year ended October 31, 1997. Messrs. E. Virgil Conway,
George H.C. Lawrence and Robert R. Douglass are the current members of the
Compensation Committee.
The Directors do not have a nominating committee but act as a group on such
matters.
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of
the Securities Exchange Act of 1934, as amended, requires the Directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports of
changes in ownership of such equity securities with the Securities and Exchange
Commission (the "SEC"). Such persons are also required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms furnished to the Company, or
written representations that no Forms 5 were required, the Company believes
that, with respect to the period from November 1, 1996 through October 31, 1997,
its Directors, officers and greater than 10% beneficial owners complied with all
Section 16(a) filing requirements.
At the Meeting, the stockholders of the Company will be requested to elect
three Directors, comprising Class I. The affirmative vote of the holders of not
less than a majority of the Common Shares entitled to vote and present, in
person or by properly executed proxy, at the Meeting, assuming the presence of a
Quorum (as defined below), will be required to elect a Director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF
THE NOMINEES FOR ELECTION AS DIRECTORS.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information as of January 12, 1998
available to the Company with respect to the shares of the Company (i) held by
those persons known to the Company to be the beneficial owners (as determined
under the rules of the SEC) of more than 5% of the Common Shares then
outstanding and (ii) held by each of the Directors, each of the executive
officers named in the Summary Compensation Table below, and by all of the
Directors and executive officers as a group:
5% BENEFICIAL OWNERS
<TABLE>
<CAPTION>
NAME AND ADDRESS COMMON SHARES PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- - ------------------------------------------------------ -------------------- -----------
<S> <C> <C>
Charles J. Urstadt (1) ........................ 1,227,550 21.44%
HRE Properties, Inc.
321 Railroad Avenue
Greenwich, Connecticut 06830
Countryside Square Limited Partnership(2) ...... 600,000 10.42%
c/o HRE Properties, Inc.
321 Railroad Avenue
Greenwich, Connecticut 06830
Grace & White, Inc.(3) ........................ 324,100 5.63%
515 Madison Avenue, Suite 1700
New York, New York 10022
</TABLE>
- - ----------
(1) Of these shares, 25,000 are owned by Urstadt Property Company, Inc., a
company of which Mr. Urstadt is the chairman, a director and a principal
stockholder, 900,000 shares are owned by two irrevocable trusts established
for Mr. Urstadt's adult children, including Mr. Charles D. Urstadt, a
director of the Company, and 50,000 shares are owned by Elinor Urstadt, Mr.
Urstadt's wife. The figure excludes 57,750 shares issuable upon exercise of
options which are not currently exercisable and will not become exercisable
within 60 days, but includes 236,750 shares issuable upon exercise of
options exercisable within 60 days. See "Compensation and Transactions with
Management and Others" below. Also excludes 25,000 cash appreciation rights,
all of which are exercisable within 60 days.
6
<PAGE>
(2) Pursuant to the terms of a Limited Partnership Agreement of Countryside
Square Limited Partnership (the "Partnership"), dated as of November 22,
1996 (the "Partnership Agreement"), by and among the Company, as general
partner, and the limited partners signatory thereto, the limited partners
contributed to the capital of the Partnership the 600,000 Common Shares
previously held by such limited partners. As the general partner of the
Partnership, the Company may be deemed to beneficially own the 600,000
Common Shares held by the Partnership.
(3) Based upon information contained in Amendment No. 1 to Schedule 13 G filed
with the SEC on February 12, 1997.
7
<PAGE>
DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
COMMON SHARES PERCENT
NAME BENEFICIALLY OWNED OF CLASS
- - ------------------------------------------------------------------- -------------------- ---------
<S> <C> <C>
Charles J. Urstadt ............................................. 1,227,550(1) 21.4%
Willing L. Biddle ............................................. 42,950(6) *
E. Virgil Conway ............................................. 12,500(2)(3) *
Robert R. Douglass ............................................. 7,600(3)(7) *
Peter Herrick ................................................ 18,000(2)(3) *
George H.C. Lawrence .......................................... 25,400(3)(9) *
Paul D. Paganucci ............................................. 8,000(2)(3) *
Charles D. Urstadt ............................................. 0(10) *
James O. York ................................................ 7,100(2)(3) *
James R. Moore ................................................ 45,166(4) *
Raymond P. Argila ............................................. 27,416(5) *
Directors and executive officers as a group (11 persons) ...... 1,421,682(8) 24.7%
</TABLE>
- - ----------
* Less than 1%
(1) Includes 25,000 shares owned by Urstadt Property Company Inc., 900,000
Common Shares owned by two irrevocable trusts established for Mr. Urstadt's
adult children, including Mr. Charles D. Urstadt, a director of the
Company, and 50,000 Common Shares owned by Elinor Urstadt, Mr. Urstadt's
wife. Excludes 57,750 Common Shares issuable upon exercise of options which
are not currently exercisable and will not become exercisable within 60
days, but includes 236,750 Common Shares issuable upon exercise of options
exercisable within 60 days. Also excludes 25,000 cash appreciation rights
all of which are exercisable within 60 days. See "Compensation and
Transactions with Management and Others" below.
(2) Includes 6,000 Common Shares issuable upon exercise of options which are
currently exercisable or which will become exercisable within 60 days. See
"Compensation and Transactions with Management and Others" below.
(3) Excludes 1,000 shares issuable upon exercise of options which are not
currently exercisable and will not become exercisable within 60 days.
(4) Includes 28,500 Common Shares issuable upon exercise of options which are
currently exercisable or which will become exercisable within 60 days.
Excludes 9,000 Common Shares issuable upon exercise of options which are
not currently exercisable and will not become exercisable within 60 days.
See "Compensation and Transactions with Management and Others" below.
(5) Includes 13,250 Common Shares issuable upon exercise of options which are
currently exercisable or which will become exercisable within 60 days.
Excludes 6,750 Common Shares issuable upon exercise of options which are
not currently exercisable and will not become exercisable within 60 days.
See "Compensation and Transactions with Management and Others" below.
(6) Includes 10,250 Common Shares issuable upon exercise of options which are
currently exercisable or which will become exercisable within 60 days.
Excludes 8,750 Common Shares issuable upon exercise of options which are
not currently exercisable and will not become exercisable within 60 days.
Mr. Biddle is the son-in-law of Mr. Urstadt.
(7) Includes 5,000 Common Shares issuable upon exercise of options which are
currently exercisable or will become exercisable within 60 days. See
"Compensation and Transactions with Management and Others" below.
(8) Excludes 88,250 Common Shares issuable upon exercise of options which are
not currently exercisable and will not become exercisable within 60 days,
but includes 319,750 Common Shares issuable upon exercise of options which
are exercisable within 60 days. Also excludes 25,000 cash appreciation
rights all of which are exercisable within 60 days.
(9) Includes 2,000 Common Shares issuable upon exercise of options which are
currently exercisable or which will become exercisable within 60 days.
(10) Mr. Charles D. Urstadt, the son of Mr. Charles J. Urstadt, is the
beneficiary of an irrevocable trust established by Mr. Charles J. Urstadt
which holds 450,000 Common Shares.
8
<PAGE>
COMPENSATION AND TRANSACTIONS WITH MANAGEMENT AND OTHERS
Executive Officer Compensation
There is set forth below information concerning the annual and long-term
compensation paid by the Company during each of the three years ended October
31, 1997 to those persons who were, at October 31, 1997 (i) the chief executive
officer and (ii) the three other most highly compensated executive officers of
the Company constituting the only persons who were serving as executive officers
at such date.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS/PAYOUTS
- - ------------------------------------------------------------ -----------------------------------------
$
RESTRICTED #
NAME AND STOCK OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS TOTAL AWARD(1) SARS COMPENSATION
- - -------------------------- ------ ---------- --------- ---------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles J. Urstadt ...... 1997 $240,000 $50,000 $290,000 $256,875 0 $14,500
Chief Executive Officer 1996 $240,000 $50,000 $290,000 $ 0 52,000 $14,165
1995 $225,000 $40,000 $265,000 $ 0 50,000 $ 7,500
Willing L. Biddle ...... 1997 $180,833 $70,000 $250,833 $342,500 0 $12,504
President & Chief 1996 $146,250 $15,000 $161,250 $ 0 9,500 $ 8,063
Operating Officer 1995 $100,813 $10,000 $110,813 $ 0 5,000 $ 5,541
James R. Moore, ......... 1997 $158,333 $15,000 $173,333 $ 85,625 0 $ 8,667
Executive Vice President 1996 $147,292 $15,000 $162,292 $ 0 8,500 $ 8,115
1995 $138,813 $10,000 $148,813 $ 0 7,000 $ 7,440
Raymond P. Argila, ...... 1997 $136,255 $ 6,000 $142,255 $ 42,812 0 $ 7,113
Senior Vice President 1996 $131,167 $10,000 $141,167 $ 0 6,000 $ 7,058
1995 $126,073 $ 5,000 $131,073 $ 0 6,000 $ 6,554
</TABLE>
- - ----------
* Consists of a discretionary contribution by the Company to the Company's
Profit Sharing and Savings Plan (the "401(k) Plan") allocated to an account
of the named executive officer and related excess benefit compensation.
(1) Amounts shown represent the dollar value on the date of grant. The aggregate
number of shares of restricted stock held on October 31, 1997 and the value
thereof as of such date, were as follows: Urstadt: 15,000 shares ($273,750),
Biddle: 20,000 shares ($365,000), Moore: 5,000 shares ($91,250) and Argila:
2,500 shares ($45,625). Restricted Stock awards granted in 1997 vest at the
end of five years. Dividends on shares of restricted stock are paid as
declared.
9
<PAGE>
Director Compensation
Other than Messrs. Urstadt and Biddle, each Director is entitled to an
annual retainer of $16,000 and compensation of $1,200 for each Director meeting
and each committee meeting attended. Directors may elect to defer payment of any
fees until they leave office. The Company paid annual interest of 7.5% on
deferred Director fees during the fiscal year ended October 31, 1997 and
currently accrues 7.5% annual interest on deferred Director fees.
Excess Benefit and Deferred Compensation Plan
Effective November 1, 1996, the Directors adopted the HRE Properties Excess
Benefit and Deferred Compensation Plan, a non-qualified deferred compensation
plan. The Plan is intended to provide eligible employees with benefits in excess
of the amounts which may be provided under the Company's tax-qualified Profit
Sharing and Savings Plan (a 401(K) plan), and to provide such employees with the
opportunity to defer receipt of a portion of their compensation. Participation
is limited to those employees who earn above the limit on compensation under the
Company's Profit Sharing and Savings Plan, currently $160,000.
Under the Plan, a participant is credited with an amount equal to the
contributions which would have been credited to the participant if the $160,000
compensation limitation under the Profit Sharing and Savings Plan did not apply.
Amounts credited under the Plan vest under the same rules as under the Profit
Sharing and Savings Plan. In addition, each Participant may elect to defer the
receipt of a portion of his or her compensation until a later date. Amounts
credited under the Plan are increased with interest at a rate set from time to
time by the Compensation Committee. For the fiscal year ended October 31, 1997,
the Company paid annual interest of 7.5% on deferred compensation accounts. In
the event of a "change of control" (as defined in the Plan), the Compensation
Committee may in its discretion accelerate the vesting of benefits under the
Plan.
Change of Control Agreements
The Company has agreements with each of its officers, including Messrs.
Urstadt, Biddle, Moore and Argila, under which, in certain circumstances
following a Change of Control of the Company (as defined in such agreements),
the Company would pay severance benefits to such persons. If, within 18 months
following the Change of Control, the Company terminates the executive's
employment other than for cause, or if the executive elects to terminate his
employment with the Company for reasons specified in the agreement, the Company
will make a severance payment equal to a portion of such person's base salary,
together with medical and other benefits during such period. The severance
payments range from 6 months' to 12 months' salary plus benefits. Messrs.
Urstadt, Biddle, Moore and Argila would each receive a severance payment equal
to their respective twelve month salaries plus benefits. The salaries of Messrs.
Urstadt, Biddle, Moore and Argila are currently $260,000, $200,000, $170,000 and
$140,000, respectively. Each of such agreements has an indefinite term.
Stock Options
Under the Company's Stock Option Plan ("Plan"), 424,145 shares of the
Company's authorized but unissued Common Shares are reserved for issuance upon
the exercise of options or stock appreciation rights which have been or may be
granted under the Plan. The persons eligible to participate in the Plan are such
key employees of the Company as may be selected from time to time by the
Compensation Committee in its discretion, as well as non-employee Directors. The
Plan provides that each Director who is not a full-time employee or former
full-time employee of the Company will automatically be awarded options covering
1,000 shares on April 1 of each year. The Plan is administered by the
Compensation Committee.
The Compensation Committee has authorized loans to finance the exercise of
incentive stock options granted to executive officers. The loans have a
five-year term, subject to extension at the discretion of the Compensation
Committee, bear interest at the Base Rate of The First National Bank of Boston
and are secured by a pledge of the related shares. The loans become due on
termination of employment
10
<PAGE>
by the Company, but are automatically extended for seven months following
termination of employment other than for cause, and for 13 months following
termination of employment occurring after a Change of Control of the Company.
The following table sets forth, for the executive officers named in the
Summary Compensation Table, information concerning the fiscal year-end value of
unexercised options and SARs.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES FY-END(#) FY-END($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAMES EXERCISE(#) REALIZED($) UNEXERCISEABLE UNEXERCISABLE
- - -------------------------- ------------- ------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Charles J. Urstadt ...... -- -- 236,750/57,750 $1,123,469/$214,469
Willing L. Biddle ...... -- -- 10,250/8,750 $ 38,719/$30,938
James R. Moore ......... 11,666 $76,404 28,500/9,000 $ 57,906/$32,656
Raymond P. Argila ...... 11,666 $66,196 13,250/6,750 $ 49,969/$25,219
</TABLE>
Restricted Stock Plan
Under the Company's Restricted Stock Award Plan (the "Restricted Stock
Plan"), 250,000 shares of the Company's authorized but unissued Common Shares
are reserved for issuance in connection with restricted stock awards made under
the Restricted Stock Plan. The persons eligible to receive restricted stock
awards under the Restricted Stock Plan are selected by the Compensation
Committee, in its discretion, from management personnel who are considered to
have significant responsibility for the growth and profitability of the Company.
The Restricted Stock Plan is administered by the Compensation Committee.
Each restricted stock award is evidenced by a written agreement, executed
by both the relevant participant and the Company, setting forth all the terms
and conditions applicable to such award as determined by the Compensation
Committee. Such terms and conditions shall include (i) the length of the
restricted period of the award, (ii) the restrictions applicable to the award,
including (without limitation) the employment status rules governing forfeiture,
and the prohibition against the sale, assignment, transfer, pledge or other
encumbrance of the restricted stock during the restricted period, and (iii) the
eligibility to share in dividends and other distributions paid to the Company's
stockholders during the restricted period.
If the employment of a participant shall be terminated prior to the lapse
of the restricted period by reason of death or disability, the restrictions
shall lapse on such date. If the employment of a participant shall be terminated
prior to the lapse of the restricted period by reason of retirement, the
restricted period will continue as if that participant had remained in the
employment of the Company.
The Compensation Committee will have the authority to accelerate the time
at which the restrictions may lapse whenever it considers that such action is in
the best interests of the Company and of its stockholders, whether by reason of
changes in tax laws or otherwise. Restrictions will lapse immediately upon a
"change in control" (as defined in the Restricted Stock Plan) of the Company.
The aggregate number of shares of restricted stock held on October 31, 1997
and the value thereof as of such date, were as follows: Urstadt: 15,000 shares
($273,750), Biddle: 20,000 shares ($365,000), Moore: 5,000 shares ($91,250) and
Argila: 2,500 shares ($45,625). Restricted Stock awards granted in 1997 vest at
the end of five years. Dividends on shares of restricted stock are paid as
declared. Dollar amounts represent the dollar value on the date of grant.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee, which is composed of three independent outside
Directors, is responsible for making recommendations to the Board concerning
compensation and for administering the Company's Stock Option Plan and
Restricted Stock Plan. The Compensation Committee considered a variety of
factors and criteria in arriving at its recommendations for compensation of the
Company's executive officers for fiscal 1997.
11
<PAGE>
The Committee believes that compensation should be structured so as to
provide incentives to the Company's officers to enhance the long-term
profitability of the Company. Thus, in making its recommendations regarding
compensation, the Committee attempts to align the financial interests of the
Company's executive officers with those of its stockholders.
In evaluating the potential long-term profitability of the Company and
making its fiscal 1997 compensation recommendations, the Committee considered
stock price, projected and actual cash flow, leasing activities, new
acquisitions and other factors in arriving at its conclusions. In 1997, the
stockholders approved a Restricted Stock Award Plan to provide the Company's key
executives with a direct incentive to improve the Company's profitability and
consequently, stockholder value. The Plan provides that restricted stock be held
for a specified time after it is issued before it can be sold or disposed of.
Thus, if the executive leaves the Company other than by retirement, the unvested
stock generally is forfeited. Restricted stock awards serve as both a reward for
performance and a retention device for key executives as well as aligning their
interests with all stockholders.
The Committee believes that the continued focus by the Chief Executive
Officer on financing, acquisitions and sales, leasing and cost containment, in
the face of a highly competitive market, has positioned the Company for
potential long-term profitability as this strategy matures. The Committee
recognized the leadership by Mr. Urstadt during 1997 in all areas of management
including particularly increasing leasing, debt reduction and undertaking
acquisitions, which has resulted in a 11% improvement in cash flow in fiscal
1997. The Committee recommended to the Board of Directors and the Board of
Directors approved an increase in Mr. Urstadt's annual salary to $260,000 and an
award to him of a cash bonus of $50,000.
The Committee also awarded Mr. Urstadt 15,000 shares of restricted stock.
The amount of restricted stock was determined by the Committee based on its
judgment as to the appropriate amount of incentive compensation that should be
in the form of stock in order to meet competitive compensation trends.
Compensation Committee
E. Virgil Conway, Chairman
George H.C. Lawrence
Robert R. Douglass
12
<PAGE>
OTHER INFORMATION
PERFORMANCE GRAPH
The following graph compares, for the five-year period ended October 31,
1997, the Company's cumulative total return to its stockholders with the returns
for the NAREIT All-REIT Total Return Index published by the National Association
of Real Estate Investment Trusts (NAREIT) and for the S&P 500 Index for the same
period.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG HRE PROPERTIES, INC., THE S&P 500 INDEX AND
THE NAREIT ALL-REIT INDEX
[COMPARISON GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
HRE Properties ...... 100 144 150 161 187 240
S&P 500 ............... 100 115 119 151 187 247
NAREIT ALL-REIT ...... 100 129 121 138 173 229
10/92 10/93 10/94 10/95 10/96 10/97
</TABLE>
* $100 INVESTED ON 10/31/92 IN STOCK OR INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS, FISCAL YEAR ENDING OCTOBER 31.
13
<PAGE>
PROPOSAL 3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
OF THE COMPANY
Arthur Andersen LLP, independent auditors, provided auditing services to
the Company during the fiscal year ended October 31, 1997. The Directors have,
subject to ratification by the stockholders of the Company, appointed Arthur
Andersen LLP to audit the financial statements of the Company for the ensuing
fiscal year and recommend to the stockholders that such appointment be ratified.
Representatives of Arthur Andersen LLP will be present at the Meeting, with the
opportunity to make a statement if they so desire. Such representatives will
also be available to respond to appropriate questions.
The affirmative vote of the holders of not less than a majority of the
Common Shares present, in person or by properly executed proxy, at the Meeting,
assuming the presence of a Quorum, will be required to ratify the appointment of
Arthur Andersen LLP as independent auditors of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
SOLICITATION OF PROXIES AND VOTING PROCEDURES
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, solicitations may also be made by personal interview,
facsimile transmission or telephone. Directors and officers of the Company may
participate in such solicitation and will not receive additional compensation
for such services. Arrangements will also be made with custodians, nominees and
fiduciaries for forwarding of proxy solicitation material to beneficial owners
of Common Shares, and the Company will reimburse such custodians, nominees and
fiduciaries for reasonable expenses incurred in connection therewith. To assure
the presence in person or by proxy of the largest number of stockholders
possible, D.F. King & Company has been engaged to solicit proxies on behalf of
the Company. It is anticipated that D.F. King & Company will be paid a fee of
$7,500 for its services.
The presence, either in person or by properly executed proxy, of a majority
of the outstanding Common Shares is necessary to constitute a quorum at the
Meeting (a "Quorum"). Each of the Common Shares outstanding on the Record Date
is entitled to one vote. An automated system administered by the Company's
transfer agent tabulates the votes.
The Charter Amendment requires the affirmative vote of a majority of the
Common Shares outstanding on the Record Date. Abstentions and broker non-votes
will thus be the equivalent of negative votes with respect to the Charter
Amendment.
The election of the Directors and the ratifications of the appointment of
the Company's auditors each requires the affirmative vote of a majority of the
Common Shares entitled to vote and present, in person or by properly executed
proxy, at the Meeting, assuming the presence of a Quorum. Abstentions will thus
be the equivalent of negative votes and broker non-votes will have no effect
with respect to such proposals, as any Common Shares subject to broker non-votes
will not be present and entitled to vote with respect to any proposal to which
the broker non-vote applies.
Each of the proposals presented to the Company's stockholders at the
Meeting is being presented as a separate and independent proposal and no
proposal is conditioned upon adoption or approval of any other proposal.
14
<PAGE>
OTHER MATTERS
The Directors know of no other business to be presented at the Meeting. If
other matters properly come before the meeting in accordance with the Articles
of Incorporation, the persons named as proxies will vote on them in accordance
with their best judgment.
Proposals of stockholders intended to be presented to the Company's Annual
Meeting of Stockholders to be held in 1999 must be received by the Company by
October 1, 1998. Such proposal must also comply with the requirements as to form
and substance established by the SEC for such proposals to be included in the
proxy statement.
You are urged to complete, date, sign and return your Proxy Card promptly
to make certain your Shares will be voted at the Meeting, even if you plan to
attend the meeting in person. If you desire to vote your Shares in person at the
meeting, your proxy may be revoked. For your convenience in returning the Proxy
Card, a pre-addressed and postage paid envelope has been enclosed.
YOUR PROXY IS IMPORTANT
WHETHER YOU OWN FEW OR MANY SHARES.
PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD TODAY.
15
<PAGE>
EXHIBIT 1
ARTICLES OF AMENDMENT
HRE Properties, Inc., a Maryland corporation (the "Corporation"), hereby
certifies as follows:
FIRST: The Corporation desires to amend its Charter as currently in effect.
SECOND: The amendment to the Charter of the Corporation set forth herein
shall become effective on the date and at the time that these Articles of
Amendment (the "Articles") are filed with, and approved and accepted for record
by, the State Department of Assessments and Taxation of Maryland in accordance
with the Maryland General Corporation Law.
THIRD: Article II of the Corporation's Charter is hereby deleted in its
entirety and in its place shall be inserted the following:
ARTICLE II
NAME
--------
The name of the corporation (the "Corporation") is:
URSTADT BIDDLE PROPERTIES INC.
FOURTH: The amendment to the Charter of the Corporation set forth in these
Articles were advised by the board of directors of the Corporation and approved
by the stockholders of the Corporation, all in the manner prescribed by and in
accordance with the provisions of the Maryland General Corporation Law relating
to charter amendments.
* * * *
IN WITNESS WHEREOF, HRE Properties, Inc. has caused these Articles of
Amendment to be executed in its name and on its behalf by its President who
achnowledges that these Articles of Amendment are the act of the Corporation and
that to the best of his knowledge, information and belief and under the
penalties of perjury, all matters and facts contained in these Articles of
Amendment are true in all material respects and its corporate seal is to be
affixed and attested to by its Secretary as of this ___ day of ___________, 19__
ATTEST: HRE PROPERTIES, INC.
- - ----------------------- -----------------------
James R. Moore, Secretary Willing L. Biddle, President
<PAGE>
(Form of Proxy Card - Front)
HRE PROPERTIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
To be held on March 11, 1998
The undersigned hereby constitutes and appoints Charles J. Urstadt and James R.
Moore, and each of them, as Proxies of the undersigned, with full power to
appoint his or her substitute, and authorizes each of them to represent and vote
all shares of Common Stock, par value $1.01 per share, of HRE Properties, Inc.
(the "Company") held of record as of the close of business on January 27, 1998,
at the Annual Meeting of Stockholders of the Company (the "Annual Meeting") to
be held at the Greenwich Harbor Inn, Greenwich, Connecticut, on Wednesday March
11, 1998, and at any adjournments or postponements thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR (I) THE APPROVAL OF THE PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES
OF INCORPORATION, WHICH PROVIDES FOR THE CHANGE OF THE NAME OF THE COMPANY FROM
"HRE PROPERTIES, INC." TO "URSTADT BIDDLE PROPERTIES, INC.", AS SET FORTH IN
PROPOSAL 1, (II) THE ELECTION OF THREE DIRECTORS OF THE COMPANY TO SERVE FOR THE
ENSUING THREE YEARS, AS SET FORTH IN PROPOSAL 2, AND (III) THE RATIFICATION OF
THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT FINANCIAL AUDITORS OF
THE COMPANY FOR THE ENSUING FISCAL YEAR, AS SET FORTH IN PROPOSAL 3. IN THEIR
DISCRETION, THE PROXIES ARE EACH AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF. A STOCKHOLDER WISHING TO VOTE IN ACCORDANCE WITH THE
BOARD OF DIRECTORS' RECOMMENDATIONS, NEED ONLY SIGN AND DATE THIS PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders, the Proxy Statement and the Company's
Annual Report to stockholders and hereby revoke(s) any proxy or proxies
heretofore given. This proxy may be revoked at any time before it is exercised
by filing a notice of such revocation, by filing a later dated proxy with the
Secretary of the Company or by voting in person at the Annual Meeting.
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
HRE PROPERTIES, INC.
Please vote and sign on the other side and return
promptly in the enclosed envelope. Do not
forget to date your proxy.
Please sign name exactly as shown. Where there is more than one holder, each
should sign. When signing as an attorney, administrator, guardian or trustee,
please add your title as such. If executed by a corporation or partnership, the
proxy should be signed by a duly authorized person, stating his or her title or
authority.
<PAGE>
(Form of Proxy Card - Reverse)
Please check appropriate box
Proposal 1. Proposal to approve the proposed amendment to the Company's
Articles of Incorporation, which provides for the change of the name of the
Company from "HRE Properties, Inc." to "Urstadt Biddle Properties, Inc."
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL 1 PROPOSAL 1
Proposal 2. Proposal to elect three Directors of the Company to serve for
the ensuing three years.
FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] EXCEPTIONS [ ]
listed below for all nominees listed below
Nominees: Willing L. Biddle, E. Virgil Conway, Charles D. Urstadt
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.)
Exceptions:
--------------------------------
Proposal 3. Proposal to ratify the appointment of Arthur Andersen LLP as
the independent financial auditors of the Company for the ensuing fiscal year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL 3 PROPOSAL 3
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THESE PROPOSALS.
Please be sure to sign and date this proxy
Date:
-----------------------------
Signature(s):
-----------------------------
-----------------------------
