<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
LNR PROPERTY CORPORATION
- --------------------------------------------------------------------------------
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(LNR LOGO)
Seven Hundred Sixty N.W. 107th Avenue, Miami, Florida 33172 - - (305) 485-2000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 8, 1998
TO THE STOCKHOLDERS OF LNR PROPERTY CORPORATION:
Notice is hereby given that the Annual Meeting of the stockholders of LNR
Property Corporation will be held at the Doral Park Golf and Country Club, 5001
N.W. 104 Avenue, Miami, Florida, on Wednesday, April 8, 1998, at 11:00 o'clock
a.m. (Eastern Standard Time) for the following purposes:
1. To elect directors to serve until the next Annual Meeting of
Stockholders.
2. To vote upon a proposal to approve the LNR Property Corporation
1997 Stock Option Plan.
3. To vote upon a proposal to approve the LNR Property Corporation
1998 Incentive Compensation Plan.
4. To transact such other business as may properly come before the
meeting.
Only stockholders of record as of the close of business on February 26,
1998 will be entitled to notice of or to vote at the meeting or any adjournment
of the meeting. The Company's transfer books will not be closed.
If you do not intend to be present at the meeting, please sign and return
the enclosed Proxy. If you attend and vote in person, the Proxy will not be
used.
By Order of the Board of Directors
MICHELLE R. SIMON
Secretary
Dated: March 9, 1998
<PAGE> 3
PROXY STATEMENT
SOLICITATION AND REVOCATION OF PROXY
The accompanying Proxy is solicited by the management of LNR Property
Corporation (the "Company" or "LNR"). The Company was formed in June 1997 as a
wholly-owned subsidiary of Lennar Corporation ("Lennar") to facilitate Lennar's
plan to separate its real estate investment and management business from its
homebuilding business in a tax-free spin-off. On October 31, 1997, Lennar
distributed all of the outstanding stock of the Company to Lennar's
stockholders.
All shares represented by proxies will be voted in the manner designated;
or if no designation is made, they will be voted for the election of directors
and for the proposal to approve the Company's 1997 Stock Option Plan and 1998
Incentive Compensation Plan. Shares represented by proxies which instruct the
proxyholders to abstain (or which are marked by brokers to show that specified
numbers of shares are not to be voted) with regard to particular matters will
not be voted (or will not be voted as to the specified numbers of shares) with
regard to those matters. THIS PROXY STATEMENT AND THE ACCOMPANYING FORM OF PROXY
ARE BEING MAILED ON OR ABOUT MARCH 9, 1998 TO ALL STOCKHOLDERS OF RECORD ON
FEBRUARY 26, 1998. Any stockholder giving a proxy has the power to revoke it at
any time before it is voted by delivery of a written instrument of revocation to
the office of the Company, Seven Hundred Sixty N.W. 107th Avenue, Miami, Florida
33172, or in open meeting, without, however, affecting any vote previously
taken. The presence of a stockholder at the meeting will not operate to revoke a
proxy, but the casting of a ballot by a stockholder who is present at the
meeting will revoke a proxy as to the matter on which the ballot is cast.
COST AND METHOD OF SOLICITATION
The Company will bear the cost of soliciting proxies. Proxies are being
solicited by mail and, in addition, directors, officers and employees of the
Company may solicit proxies personally or by telephone. The Company will
reimburse custodians, brokerage houses, nominees and other fiduciaries for the
cost of sending proxy materials to their principals.
VOTING RIGHTS AND PROXIES
Only stockholders of record as of the close of business on February 26,
1998 will be entitled to vote at the meeting. The only outstanding voting
securities of the Company on that date were 25,348,529 shares of Common Stock
and 10,780,752 shares of Class B Common Stock. Each outstanding share of Common
Stock is entitled to one vote. Each outstanding share of Class B Common Stock is
entitled to ten votes.
Stock may be voted in person or by proxy appointed by a writing signed by a
stockholder. Any message sent to the Company prior to the time for voting which
appears to have been transmitted by a stockholder, or any reproduction of a
proxy, will be deemed sufficient. No proxy will be revoked by the death or
incapacity of the maker, unless written notice of such death or incapacity is
given to the Company by the fiduciary having control of the shares represented
by the proxy.
<PAGE> 4
PRINCIPAL STOCKHOLDERS
The following persons are known by the Company to have owned beneficially
more than 5% of any class of the Company's voting securities as of February 26,
1998:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- -------------- ------------------- -------------------- ----------
<S> <C> <C> <C>
Class B Common Stock Leonard Miller 9,897,930(1) 91.81%
23 Star Island
Miami Beach, FL 33139
Common Stock Goldman, Sachs & Co. 3,524,100(2) 13.90%
The Goldman Sachs Group, L.P.
85 Broad Street
New York, NY 10004
Common Stock Cohen & Steers Capital 1,949,600(2) 7.69%
Management, Inc.
757 Third Avenue
New York, NY 10017
Common Stock FMR Corp. 1,867,418 7.37%
82 Devonshire Street
Boston, MA 02109-3614
</TABLE>
- ---------------
(1) Leonard Miller's shares are owned by two limited partnerships. A corporation
wholly-owned by Mr. Miller is the sole general partner of those
partnerships. The limited partners consist of Mr. Miller, his wife and a
trust of which Mr. Miller is the primary beneficiary. Does not include
30,000 shares of Class B Common Stock owned by Miller Family Foundation,
Inc., a charitable foundation of which Mr. Miller is the President.
(2) Based on information contained in Schedule 13Gs dated February 14, 1998 with
respect to Goldman, Sachs & Co. and The Goldman Sachs Group, L.P. and dated
February 9, 1998 with respect to Cohen & Steers Capital Management, Inc.
On February 26, 1998, The Depository Trust Company owned of record
24,827,379 shares of Common Stock, constituting 97.94% of the outstanding Common
Stock and 799,834 shares of Class B Common Stock, constituting 7.42% of the
outstanding Class B Common Stock. The Company understands those shares were held
beneficially for members of the New York Stock Exchange, some of whom may in
turn have been holding shares beneficially for customers.
2
<PAGE> 5
The directors and executive officers beneficially owned the following
voting securities of the Company on January 23, 1998:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP(1) CLASS
- ------------------------ -------------- ------------ ----------
<S> <C> <C> <C>
Leonard Miller Class B Common Stock 9,897,930(2)(3) 90.11%
Common Stock 9,597 .04%
Brian L. Bilzin Common Stock 7,820(4) .03%
Sue M. Cobb Common Stock 20,000(5) .08%
Carlos M. de la Cruz Common Stock 220,000 .87%
Stuart A. Miller Common Stock 129,093(3) .51%
Steven J. Saiontz Common Stock 130,347(3)(6) .52%
Jeffrey P. Krasnoff Common Stock 29,146 .12%
Mark A. Griffith Common Stock 6,615(7) .03%
David G. Levin Common Stock 4,188 .02%
Directors and Officers as a Group Class B Common Stock 9,897,930 90.11%
(17 persons) Common Stock 566,863 2.25%
</TABLE>
- ---------------
(1) Includes currently exercisable stock options and stock options which become
exercisable within sixty days after January 23, 1998 as follows: Stuart A.
Miller (52,500), Steven J. Saiontz (28,772), Jeffrey P. Krasnoff (25,893),
Mark A. Griffith (4,192), David G. Levin (411), all directors and executive
officers (118,138). Also includes shares held by the Company's Employee
Stock Ownership/401(k) Plan for the accounts of the named persons.
Additional information about those shares is contained in Note (2) to the
Summary Compensation Table.
(2) Leonard Miller's shares are owned by two limited partnerships. A corporation
wholly-owned by Mr. Miller is the sole general partner of those
partnerships. The limited partners consist of Mr. Miller, his wife and a
trust of which Mr. Miller is the primary beneficiary. Does not include
30,000 shares of Class B Common Stock owned by Miller Family Foundation,
Inc., a charitable foundation of which Mr. Miller is the President.
(3) Stuart Miller is the trustee, and Stuart Miller and Mr. Saiontz's wife are
beneficiaries, of a trust which holds limited partnership interests in a
partnership which owns 5,500,000 shares of Class B Common Stock. Because
Leonard Miller is the principal beneficiary of the trust and owns the
corporation which is the sole general partner of the partnership, Leonard
Miller is shown as the beneficial owner of the 5,500,000 shares and neither
Stuart Miller nor Mr. Saiontz is shown as a beneficial owner of those
shares.
(4) Includes 415 shares owned by Mr. Bilzin's wife as to which he has no voting
or investment power and 1,405 shares owned by Mr. Bilzin's sons as to which
he has no voting or investment power and as to which he disclaims beneficial
ownership.
(5) Does not include 30,000 shares owned by Ms. Cobb's husband as to which she
has no voting or investment power.
(6) Does not include 9,000 shares held in a trust for Mr. Saiontz's wife.
(7) Includes five shares owned by Mr. Griffith's son as to which he shares
voting and investment power.
Because each outstanding share of Class B Common Stock is entitled to ten
votes, Leonard Miller, through family partnerships, will be entitled to
98,988,897 votes, which will be 74.34% of the combined votes which may be cast
by all the holders of Common Stock and Class B Common Stock, and all directors
and officers as a group will be entitled to 99,428,025 votes, which will be
74.67% of the combined votes which may be cast by all the holders of Common
Stock and Class B Common Stock. Leonard Miller has said he intends to vote in
favor of the nominees for election as directors named below and for the
proposals to approve the stock option plan and the incentive compensation plan.
Therefore, the nominees will be elected and the proposals will be approved, even
if no stockholders other than Mr. Miller vote for them.
3
<PAGE> 6
ELECTION OF DIRECTORS
The following persons will be nominated to serve as directors until the
next Annual Meeting of Stockholders:
<TABLE>
<CAPTION>
TERM
NAME OF DIRECTOR AGE DIRECTOR SINCE EXPIRES
- ---------------- --- -------------- -------
<S> <C> <C> <C>
Leonard Miller(1) 65 June 1997 1998
Stuart A. Miller(1) 40 June 1997 1998
Steven J. Saiontz(1) 39 June 1997 1998
Sue M. Cobb 60 October 1997 1998
Carlos M. de la Cruz 56 October 1997 1998
Brian L. Bilzin 52 December 1997 1998
Jeffrey P. Krasnoff 42 December 1997 1998
</TABLE>
- ---------------
(1) Executive Committee member.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE NAMED
NOMINEES AS DIRECTORS.
Leonard Miller is the Chairman of the Board of Lennar. He has been the
President or Chairman of the Board, or both, of Lennar since it was founded in
1969. From the time Lennar was founded until April 1997, Mr. Miller was the
chief executive officer of Lennar. He is the father of Stuart A. Miller and the
father-in-law of Steven J. Saiontz.
Stuart A. Miller is the Chairman of the Board of LNR. Mr. Miller became the
Chairman of the Board of LNR when it was formed in June 1997. Mr. Miller has
been the President and Chief Executive Officer of Lennar since April 1997. For
more than five years prior to April 1997, Mr. Miller was a vice president of
Lennar and held various executive positions with Lennar subsidiaries, including
being the president of its principal homebuilding subsidiary from December 1991
to April 1997 and the president of its principal real estate investment and
management division (the predecessor to a substantial portion of the Company's
business) from April 1995 to April 1997.
Steven J. Saiontz is the Chief Executive Officer of LNR. Mr. Saiontz became
the Chief Executive Officer and a Director of LNR when it was formed in June
1997. For more than five years prior to that, he was the president of Lennar
Financial Services, Inc., a wholly owned subsidiary of Lennar. Mr. Saiontz is
currently a Director of Lennar. He is the brother-in-law of Stuart A. Miller and
the son-in-law of Leonard Miller.
Sue M. Cobb is, and for more than five years has been, Managing Director
and General Counsel of Cobb Partners, Inc. and affiliated companies, a privately
owned group of companies involved in investments, real estate and resort
development. She was the founding partner of the Public Finance Department in
the law firm of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., with
whom she was affiliated from 1978 until early 1998. From 1993 to 1996, she was
also Vice President and General Counsel of Pan American World Airways, Inc. She
is currently a Director of Enterprise Florida Capital Development Corp., a
public/private development organization in the State of Florida; and a Director
of Kirkwood Associates, Inc., a closely held ski and summer resort company
headquartered in Kirkwood, California. From 1982 to 1988, she was a member of
the Board of Directors of the Federal Reserve Bank of Atlanta, Miami Branch, and
served three terms as Chairman of that Board.
Carlos M. de la Cruz is, and for more than five years has been, the
Chairman of the Board of Eagle Brands, Inc. (a beverage wholesaler), Coca-Cola
Puerto Rico Bottlers and the Miami Honda, Central Hyundai, Sunshine Ford and
Central Kia automobile dealerships.
4
<PAGE> 7
Brian L. Bilzin is, and since February 1, 1998 has been, a partner in the
law firm of Bilzin Sumberg Dunn & Axelrod LLP. For more than five years prior to
February 1, 1998, Mr. Bilzin was a partner in Rubin Baum Levin Constant Friedman
& Bilzin, a law firm.
Jeffrey P. Krasnoff is the President of LNR. Mr. Krasnoff became the
President of LNR when it was formed in June 1997 and became a Director of LNR in
December 1997. From 1987 until June 1997, he was a vice president of Lennar.
From 1990 until he became the President of LNR, Mr. Krasnoff was involved almost
entirely in Lennar's real estate investment and management division (the
predecessor to a substantial portion of the Company's business).
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the annual compensation, long-term
compensation and all other compensation for the Company's chief executive
officer and for the four additional executive officers who together comprised
the five highest paid executive officers of the Company for the year ended
November 30, 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------- --------------------------------------
AWARDS PAYOUTS
------------------------- ----------
RESTRICTED
STOCK SECURITIES LTIP ALL OTHER
SALARY(1) BONUS(1) AWARDS(1)(2) UNDERLYING PAYOUTS(1) COMPENSATION(5)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) OPTIONS(3) ($) ($)
- --------------------------- ---- --------- -------- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stuart A. Miller 1997 200,000 703,800 0(4) 100,000 0 2,900
Chairman of the 1996 207,000 577,000 0(4) 0 0 1,100
Board 1995 197,000 384,900 0(4) 0 0 300
Steven J. Saiontz 1997 209,200 703,800 1,600 389,083 0 5,000
Chief Executive 1996 207,700 577,000 1,500 0 0 3,500
Officer 1995 197,100 384,900 1,500 0 0 2,600
Jeffrey P. Krasnoff 1997 165,400 340,300 1,600 273,988 102,200 5,100
President 1996 145,400 317,900 1,500 0 59,100 3,300
1995 138,800 215,700 1,500 0 28,900 2,600
Mark A. Griffith 1997 111,700 169,000 1,600 98,018 37,600 2,700
Vice President 1996 111,700 157,800 1,500 0 15,400 2,500
1995 104,100 100,000 1,500 0 5,300 1,300
David G. Levin 1997 105,800 208,800 1,600 102,128 60,300 1,800
Vice President 1996 105,800 148,300 1,500 0 40,100 1,500
1995 98,000 100,000 1,500 0 0 1,000
</TABLE>
- ---------------
(1) The salary, bonus, restricted stock award and LTIP payout amounts shown for
1997 reflect compensation earned by the named officer while an officer of
Lennar through October 31, 1997 and compensation earned by the named officer
while an officer of the Company from November 1, 1997 through November 30,
1997. The salary, bonus, restricted stock award and LTIP payout amounts
shown for 1996 and 1995 reflect compensation earned by the named officer
while an officer of Lennar during such years.
(2) At November 30, 1997, a total of 17,815 restricted shares of Common Stock,
as well as 17,815 restricted shares of the Common Stock of Lennar ("Lennar
Common Stock"), with an aggregate market value of $405,278 and $384,136,
respectively, on that day, were held in employees' accounts under the
Company's Employee Stock Ownership/401(k) Plan. All shares in the accounts
of employees with more than five
5
<PAGE> 8
years' service are vested (15,632 shares of Common Stock and 15,632 shares
of Lennar Common Stock at November 30, 1997). Shares in the accounts of
other employees become vested when and if the employees attain five years of
service. Holders of both vested and non-vested shares are entitled to the
dividends on the shares. The restricted shares outstanding on November 30,
1997 included 2,380 shares of Common Stock and 2,380 shares of Lennar Common
Stock in Steven J. Saiontz's account (with a market value on that day of
$54,144 and $51,319, respectively), 386 shares of Common Stock and 386
shares of Lennar Common Stock in Jeffrey P. Krasnoff's account (with a
market value on that day of $8,789 and $8,331, respectively), 318 shares of
Common Stock and 318 shares of Lennar Common Stock in Mark A. Griffith's
account (with a market value on that day of $7,244 and $6,866, respectively)
and 278 shares of Common Stock and 278 shares of Lennar Common Stock in
David G. Levin's account (with a market value on that day of $6,322 and
$5,992, respectively). All shares held in these officers' accounts were
vested.
(3) Additional information about these options is contained in the Option Grants
in Last Fiscal Year Table.
(4) Stuart A. Miller does not participate in the Company's Employee Stock
Ownership/401(k) Plan.
(5) Consisting of matching payments by Lennar under the 401(k) aspect of its
Employee Stock Ownership/401(k) Plan through October 31, 1997 and by the
Company under the 401(k) aspect of the Company's Employee Stock
Ownership/401(k) Plan for November 1997 and consisting of term life
insurance premium and long term disability insurance premium payments made
by Lennar through October 31, 1997 and by the Company for November 1997, as
follows:
<TABLE>
<CAPTION>
LONG TERM
401(K) MATCH TERM LIFE INSURANCE DISABILITY INSURANCE
($) ($) ($)
------------ ------------------- --------------------
<S> <C> <C> <C> <C>
Stuart A. Miller 1997 0(4) 2,400 500
1996 0(4) 700 400
1995 0(4) 300 0
Steven J. Saiontz 1997 2,400 2,200 400
1996 2,400 700 400
1995 2,300 300 0
Jeffrey P. Krasnoff 1997 2,400 2,200 500
1996 2,400 600 300
1995 2,300 300 0
Mark A. Griffith 1997 800 1,400 500
1996 900 1,400 200
1995 300 1,000 0
David G. Levin 1997 0 1,300 500
1996 0 1,300 200
1995 0 1,000 0
</TABLE>
Directors who are not employees of the Company are paid annual fees of
$10,000 plus $2,500 for each board meeting attended in person and $500 for each
telephonic board meeting. If there is a committee meeting on a day that does not
include a full board meeting, the fee is $500 for that day. On the date of each
Annual Meeting of Stockholders, each outside director is granted an option for
1,000 shares of Common Stock at the current market price. The grant becomes
exercisable on the one year anniversary of the grant date. The grant expires on
the third anniversary of the grant date. Upon the death or disability of an
optionee, the option is exercisable up to six months after the death or
disability. Upon resignation or retirement of a director, the option terminates.
Leonard Miller receives an annual fee of $200,000 for serving as Chairman of the
Executive
6
<PAGE> 9
Committee of the Board. Directors who are employees of the Company receive no
additional remuneration for services as directors.
Brian L. Bilzin was a partner in the law firm of Rubin Baum Levin Constant
Friedman & Bilzin, which firm was retained by the Company during the fiscal year
ended November 30, 1997. Mr. Bilzin is currently a partner in the law firm of
Bilzin Sumberg Dunn & Axelrod LLP, a law firm that the Company proposes to
retain during the current fiscal year.
The following table sets forth information about a sum awarded to three of
the five highest paid officers of the Company for the year ended November 30,
1997, which is payable over a period of years:
LONG-TERM INCENTIVE PLANS -- AWARDS
IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
------------------------------------------
PERIOD UNTIL THRESHOLD TARGET MAXIMUM
NAME PAYOUT $ $ $(1)
- ---- ------------ -------------- -------------- --------
<S> <C> <C> <C> <C>
Jeffrey P. Krasnoff 1-5 Years Not Applicable Not Applicable 340,300
Mark A. Griffith 1-5 Years Not Applicable Not Applicable 169,000
David G. Levin 1-5 Years Not Applicable Not Applicable 158,800
</TABLE>
- ---------------
(1) This amount is payable in five equal annual installments conditioned on such
officer continuing to be employed by the Company.
7
<PAGE> 10
The following table sets forth information about options granted to the
chief executive officer and to the four additional highest paid executive
officers of the Company for the fiscal year ended November 30, 1997:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(2)
-------------------------------------------------------
PERCENT OF POTENTIAL REALIZED
NUMBER OF TOTAL OPTIONS VALUE AT ASSUMED ANNUAL RATES
SECURITIES GRANTED TO OF STOCK APPRECIATION FOR
UNDERLYING EMPLOYEES OPTION TERM(1)
OPTIONS IN FISCAL EXERCISE EXPIRATION ------------------------------------
NAME GRANTED YEAR PRICE DATE 0% 5% 10%
- ---- ---------- ------------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Stuart A. Miller 20,145(3) 1.36% $27.30 10/31/02 $ 0 $ 88,181 $ 255,295
79,855(3) 5.40% $24.82 10/31/07 $ 0 $1,246,470 $3,158,799
-------
100,000
Steven J. Saiontz 200,000 13.53% $24.82 10/31/07 $ 0 $3,121,833 $7,911,338
189,083(4) 12.79% $ 3.98(4) 4/2/01 $3,940,490 $4,951,869 $6,118,530
-------
389,083
Jeffrey P. Krasnoff 200,000 13.53% $24.82 10/31/07 $ 0 $3,121,833 $7,911,338
73,988(4) 5.00% $ 6.80(4) 12/26/01 $1,333,264 $1,729,016 $2,185,529
-------
273,988
Mark A. Griffith 75,000 5.07% $24.82 10/31/07 $ 0 $1,170,687 $2,966,752
8,221(4) 0.56% $ 9.92(4) 12/23/04 $ 122,493 $ 205,560 $ 316,074
14,797(4) 1.00% $11.97(4) 7/1/03 $ 190,141 $ 315,045 $ 473,506
-------
98,018
David G. Levin 75,000 5.07% $24.82 10/31/07 $ 0 $1,170,687 $2,966,752
7,398(4) 0.50% $ 9.92(4) 12/23/04 $ 110,230 $ 184.981 $ 284,432
19,730(4) 1.33% $12.32(4) 8/09/03 $ 246,625 $ 413,169 $ 624,457
-------
102,128
</TABLE>
- ---------------
(1) Measured from date of grant (October 31, 1997) on which date the average of
the high and low market price of the Common Stock was $24.82.
(2) Exercise of options begins one year from date of grant and has step vesting
of 10% per year for years one through eight and 20% for year nine, except
that exercise of 20,145 options granted to Stuart A. Miller begins six
months from date of grant and has step vesting of 20% on that date and on
each anniversary of that date. Replacement options retain the original
vesting schedule of 5% per year for years one through five, 10% for years
six and seven, 15% for years eight and nine and 25% for year ten.
(3) In addition, Mr. Miller holds options granted by Lennar with regard to
382,000 shares of its common stock. As a result of the spin-off, when Mr.
Miller exercises those options, he will be entitled to receive, in addition
to Lennar stock, one share of Common Stock of the Company for each share of
Lennar stock as to which the options are exercised.
(4) Represents replacements of Lennar options which were held at the time of the
spin-off. The number of shares subject to replacement options was calculated
by multiplying the number of shares subject to Lennar options by a factor of
1.644206186, and the exercise price of the replacement options was
calculated by dividing the exercise price of the Lennar options by that
factor.
8
<PAGE> 11
The following table sets forth certain information with regard to the
aggregate option/SAR exercises in the fiscal year ended November 30, 1997 and
option/SAR values as of the end of that year for the chief executive officer and
the four other highest compensated executive officers of the Company:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL AT FISCAL
YEAR-END YEAR-END(1)
SHARES ---------------- -----------------
ACQUIRED ON VALUE EXERCISABLE(E)/ EXERCISABLE(E)/
NAME EXERCISE REALIZED UNEXERCISABLE(U) UNEXERCISABLE(U)
- ---- ----------- -------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Stuart A. Miller 0 $0 100,000(U) $ 0(U)
Chairman of the Board
Steven J. Saiontz 0 $0 28,772(E) $ 554,436(E)
Chief Executive Officer 360,311(U) $3,089,193(U)
Jeffrey P. Krasnoff 0 $0 18,497(E) $ 304,276(E)
President 255,491(U) $ 912,827(U)
Mark A. Griffith 0 $0 3,781(E) $ 44,335(E)
Vice President 94,237(U) $ 232,161(U)
David G. Levin 0 $0 102,128(U) $ 314,264(U)
Vice President
</TABLE>
- ---------------
(1) Based upon the difference between the exercise price of the options/SARs and
the last reported sale price of the Common Stock on November 28, 1997.
INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board has established Audit and Compensation Committees. It does not
have a Nominating Committee.
The Audit Committee consists of Ms. Sue M. Cobb and Mr. Carlos M. de la
Cruz. This Committee did not meet in fiscal 1997. Its principal functions are:
recommending to the full Board the engagement of independent auditors for the
ensuing year, reviewing the scope of non-audit services performed for the
Company by the independent auditors, reviewing the independent auditors'
recommendations for improvements of internal controls and reviewing the scope of
work, findings and conclusions of the Company's Internal Audit Department.
The Compensation Committee consists of Messrs. Leonard Miller and Brian
Bilzin. This Committee did not meet in fiscal 1997. Its principal functions are:
recommending to the full Board compensation arrangements for senior management
and recommending to the full Board the adoption and implementation of
compensation and incentive plans. In addition, there is an Officers and
Directors Stock Option Committee, consisting of Ms. Sue M. Cobb and Mr. Carlos
M. de la Cruz, and a Stock Option Committee, consisting of Messrs. Stuart A.
Miller, Leonard Miller and Jeffrey P. Krasnoff, which approve grants of stock
options and SARs to officers.
The Board normally holds meetings quarterly, but holds additional special
meetings when required. During fiscal 1997, the Board met seven times. Each
director attended more than three-fourths of the total number of meetings of the
Board which were held while he or she was a director.
9
<PAGE> 12
PROPOSAL RELATING TO STOCK OPTION PLAN
On October 30, 1997, the Board of Directors adopted, and Lennar, as the
sole shareholder of the Company approved, the LNR Property Corporation 1997
Stock Option Plan (the "Plan"). A copy of the Plan is attached as Exhibit 1 to
this Proxy Statement. Stockholders will be asked at the meeting to vote on a
proposal to approve the Plan.
The purpose of the Plan is to encourage and enable those officers,
employees and directors of the Company and its subsidiaries upon whose
judgement, initiative and efforts the Company and its subsidiaries largely
depend for the successful conduct of their business to acquire proprietary
interests in the Company, and by doing so, to stimulate the efforts of those
officers, employees and directors on behalf of the Company and its subsidiaries
and strengthen their desire to remain officers, employees or directors of the
Company or its subsidiaries.
Under the Plan, a committee appointed by the Board of Directors (which may
be the Board itself) may grant stock options, separately or together with stock
appreciation rights, relating to up to 2,000,000 shares of Common Stock (subject
to adjustment to take account of stock dividends, stock splits,
recapitalizations and similar corporate events). If any option expires,
terminates or is cancelled without being exercised, the shares subject to that
option may be made the subject of new options granted under the Plan. Options
granted under the Plan may, or may not, be designated as Incentive Stock Options
("ISO's"), which receive special tax treatment, as described below under "Tax
Consequences," but must meet certain requirements, including that the recipients
be employees, that the exercise price be at least 100% of the fair market value
of the Common Stock on the date of grant and that the exercise price of all
ISO's held by a person which first become exercisable in a year not exceed
$100,000.
A committee appointed by the Board of Directors (which may be the Board
itself) will determine which officers, employees and directors will receive
options under the Plan and the terms of the options granted to particular
officers, employees or directors. However, an option granted under the Plan must
expire no more than 10 years after the date of grant. The committee may
determine that particular options will initially become exercisable at specified
times, or in specified installments, except that no option may be exercisable
until at least six months after it is granted other than in the event of the
optionee's death or disability. The exercise price of an option will be
determined by the committee (subject to the requirement that if the option is an
ISO, the exercise price must not be less than 100% of the fair market value of
the Common Stock on the date the option is granted), and must be paid in cash or
by check, unless the committee permits it to be paid in whole or in part with
shares of Common Stock valued at their fair market value when the option is
exercised. Options granted under the Plan may be assigned or transferred only
with the permission of the committee, given after a determination that
transferability will not result in specified negative tax effects and is
otherwise appropriate and desirable.
Stock appreciation rights may only be granted with regard to specific stock
option grants. A stock appreciation right may not relate to more shares than may
be issued on exercise of the option to which the stock appreciation right
relates. A stock appreciation right gives the holder the right to receive,
without payment by the holder, an amount equal to the excess of the fair market
value on the date the stock appreciation right is exercised of the shares of
Common Stock as to which it is exercised over the amount the holder would have
had to pay for those shares if the holder had purchased them by exercising the
related stock option. When a stock appreciation right is exercised as to a
number of shares, the holder will be deemed to surrender the related option with
regard to that number of shares. The committee may specify that the sum the
holder will receive upon exercise of a stock appreciation right will be paid
wholly or partly in cash or wholly or partly with Common Stock valued at its
fair market value on the date the stock appreciation right is exercised.
10
<PAGE> 13
In addition, stock options were granted under the Plan to replace Lennar
stock options held by employees of the Company at the time of the spin-off. The
number of options granted by the Company was determined by multiplying the
number of unexercised Lennar options by a fraction of which the numerator is the
average of the closing prices of Lennar Common Stock as reported on the New York
Stock Exchange on October 27, 28, 29, 30 and 31, 1997 and the denominator is the
average of the closing prices of LNR Common Stock as reported on the New York
Stock Exchange on November 3, 4, 5, 6 and 7, 1997.
The following table provides information about the options which were
outstanding on November 30, 1997:
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK AVERAGE PER SHARE
INDIVIDUAL OR GROUP HOLDING SUBJECT TO OPTIONS EXERCISE PRICE
- --------------------------- ---------------------- -----------------
<S> <C> <C>
Stuart A. Miller(1) 100,000 $25.32
Steven J. Saiontz 389,083 $14.69
Jeffrey P. Krasnoff 273,988 $19.95
Mark A. Griffith 98,018 $21.63
David G. Levin 102,128 $21.33
All current executive officers 1,390,009 $20.15
All directors who are not executive officers 0 $ 0
All employees other than executive officers 88,638 $19.21
</TABLE>
- ---------------
(1) In addition, Mr. Miller holds options granted by Lennar before the spin-off
with regard to 382,000 shares of its common stock. As a result of the
spin-off, when Mr. Miller exercises those options, he will be entitled to
receive, in addition to Lennar stock, one share of Common Stock of the
Company for each share of Lennar stock as to which the options are
exercised.
On February 27, 1998, the last sale price of the Common Stock reported on
the New York Stock Exchange was $26.6875.
Tax Consequences
The principal Federal income tax consequences to an employee, officer or
director of the grant and exercise of options under the Plan, and of the sale of
shares acquired through exercise of options, are as follows:
Recipients of options do not have taxable income because of the grant of
options to them under the Plan.
Unless an option is an ISO, when the option is exercised the holder will be
treated as receiving ordinary income equal to the amount by which the fair
market value of the Common Stock at the time of the exercise exceeds the
exercise price of the option (and the fair market value of the Common Stock when
the option is exercised will be the basis of that stock while it is held by the
person who exercised the option). Therefore, when the stock is sold, the amount
by which the sale price is greater or less than the fair market value of the
shares when the option was exercised will be a capital gain or loss, which will
be long-term or short-term, depending on how long the shares are held after
exercise.
The holder of an ISO does not realize any taxable income when the ISO is
exercised. However, when an ISO is exercised, the amount by which the fair
market value at the time of exercise of the stock acquired through the exercise
exceeds the exercise price is treated as an item of adjustment for alternative
minimum tax purposes (unless the stock is disposed of within one year) and may
be subject to the alternative minimum tax. The price paid for the Common Stock
when the ISO is exercised will be the basis of that stock while it is
11
<PAGE> 14
held by the optionee. If a person who exercises an ISO holds the stock for at
least one year after the date of exercise (and at least two years after the date
of grant), when the shares are sold the difference between the exercise price
and the sale price will be treated as a long-term capital gain or loss. If the
person does not hold the stock for one year after exercise (and two years after
the date of grant), the person is treated as having made a "disqualifying
disposition," and the person will be treated as receiving ordinary income at the
time of sale equal to the lesser of (i) the amount by which the fair market
value of the stock when the option was exercised exceeded the exercise price, or
(ii) the gain on the sale. In addition, if the sale price exceeds the fair
market value of the stock when the option was exercised, the difference between
the exercise price and the sale price will be a capital gain.
When a stock appreciation right is exercised, the holder is treated as
receiving ordinary income equal to the amount paid, or the fair market value of
the Common Stock distributed, to the holder as a result of the exercise. The
holder's basis in any Common Stock received will be its fair market value when
the stock appreciation right was exercised.
When an employee is treated as receiving ordinary income as a result of
exercise of a non-ISO or a stock appreciation right, the Company is required to
withhold and pay the withholding tax due with regard to that ordinary income.
The Company may do this by withholding from the employee's compensation, by
withholding from the number of shares issued on exercise of the option or stock
appreciation right or by requiring payment of the amount required to be withheld
before the Company will issue shares upon exercise of the option.
When a non-ISO or a stock appreciation right is exercised or there is a
disqualifying disposition of shares acquired through exercise of an ISO, the
Company will, in at least most instances, be entitled to a deduction equal to
the ordinary income which the person who exercised the option is treated as
having received.
Required Vote
Approval of the Plan requires the affirmative vote of the holders of a
majority of the shares which are voted on the proposal to approve the Plan.
Leonard Miller who, through family partnerships, owns 91.81% of the Class B
Common Stock and therefore is entitled to cast approximately 74.34% of the votes
which may be cast with regard to approval of the Plan, has said he intends to
vote in favor of the Plan. Therefore, if there is a quorum present at the
meeting, the Plan will be approved, even if no stockholders other than Mr.
Miller vote to approve it.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
12
<PAGE> 15
PROPOSAL REGARDING INCENTIVE COMPENSATION PLAN
The Company has adopted an Incentive Compensation Plan (the "Incentive
Plan"), under which the Compensation Committee or another committee of the Board
of Directors may award various forms of incentive compensation to officers and
other key employees of the Company and its subsidiaries. Forms of incentive
compensation may include (1) compensation based upon a percentage of
consolidated pre-tax or after-tax earnings or EBITDA of the Company and its
subsidiaries, or of the separate pre-tax or after-tax earnings or EBITDA of
particular subsidiaries, divisions or other business units of the Company, (2)
changes (or the absence of changes) in the per share or aggregate market price
of the Company's Common Stock, (3) revenues, earnings, costs, return on assets,
return on equity, return on capital, return on investment, return on assets
under management, net operating income or net operating income as a percentage
of book value, with regard to the Company, particular subsidiaries, divisions or
other business units, particular assets or groups of assets or particular
employees or groups of employees. Performance goals on which bonuses may be
based may be absolute amounts or percentages or may be relative to the
performance of other companies or of indexes. Performance goals may relate to
particular fiscal years or to periods which are longer or shorter than a single
fiscal year. No officer or employee may, however, be awarded a bonus for any
fiscal year in excess of the greater of (i) $1,500,000 or (ii) 1.5% of the
consolidated pre-tax income of the Company and its subsidiaries in that fiscal
year. Bonuses may be payable in single lump sums, or may be payable over periods
of years, and may (but will not be required to) be made forfeitable to the
extent recipients do not continue to be employed by the Company or its
subsidiaries throughout the period during which they are payable. A copy of the
Incentive Plan is attached as Exhibit 2 to this Proxy Statement.
The bonus arrangements contemplated by the Incentive Plan are similar to
the bonus arrangements which the Company has implemented for a number of years.
See "Compensation Committee Report." However, the Company has adopted the
Incentive Plan, and stockholders are being asked to approve the Incentive Plan,
with the intent of avoiding the possibility that the deductibility for Federal
income tax purposes of bonus compensation with regard to the year ending
November 30, 1998 or future years will be limited by Section 162(m) of the
Internal Revenue Code (which under certain circumstances causes compensation to
an employee in a year in excess of $1 million not to be deductible to the
employer). Under current law, adoption of the Incentive Plan will not affect the
extent to which bonus compensation constitutes taxable income to recipients, the
time when recipients will be required to recognize income from incentive
compensation or any other aspects of the way recipients are taxed with regard to
incentive compensation. Adoption of the Incentive Plan will not prevent the
Company from entering into compensation arrangements with employees outside the
Incentive Plan.
Required Vote
Approval of the Incentive Plan requires the affirmative vote of the holders
of a majority of the shares which are voted on the proposal to approve the
Incentive Plan. Leonard Miller who, through family partnerships, owns 91.81% of
the Class B Common Stock and therefore is entitled to cast approximately 74.34%
of the votes which may be cast with regard to approval of the Incentive Plan,
has said he intends to vote in favor of the Incentive Plan. Therefore, if there
is a quorum present at the meeting, the Incentive Plan will be approved, even if
no stockholders other than Mr. Miller vote to approve it.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
13
<PAGE> 16
COMPENSATION COMMITTEE REPORT
Before Lennar distributed the stock of the Company to its stockholders (and
therefore, while the Company was a wholly-owned subsidiary of Lennar), Lennar's
Compensation Committee fixed the compensation of the executive officers of the
Company for the year ending November 30, 1998. It did that because the Company
would have two new directors who would not take office until the distribution of
the Company's stock was completed, and would not be familiar with the executive
officers of the Company. Therefore, it seemed appropriate for Lennar's
Compensation Committee to review the recommended compensation of the Company's
executive officers, subject possibly to subsequent review by the Company's Board
of Directors.
Lennar's Compensation Committee discussed the proposed compensation and
award of stock options to Steven J. Saiontz, the Chief Executive Officer of the
Company, and Jeffrey P. Krasnoff, the President of the Company. It noted that,
although Mr. Saiontz is the Chief Executive Officer of the Company, he has
principal responsibility for a portion of the Company's operations and Mr.
Krasnoff has principal responsibility for the other portion of the Company's
operations, and, therefore, their levels of responsibility are in some respects
equivalent. Lennar's Compensation Committee also noted that Mr. Saiontz and Mr.
Krasnoff would be responsible for the initial adjustment of the Company to being
a publicly owned company and for overseeing, with the assistance of Stuart A.
Miller (who is Lennar's chief executive officer and the Chairman of the Board of
the Company), the initial activity of the Company and its subsidiaries as a
separate corporate group. Lennar's Compensation Committee also was informed that
there would be a recommendation to the Company's Board of Directors that Mr.
Saiontz and Mr. Krasnoff each receive options to purchase 200,000 shares of the
Company's Common Stock, in addition to receiving Company stock options to
replace Lennar stock options they held. The Company's Board of Directors (which,
at the time, consisted entirely of officers or employees of Lennar or its
subsidiaries) subsequently approved the grant of options to purchase 200,000
shares to each of Mr. Saiontz and Mr. Krasnoff.
Lennar's Compensation Committee reviewed a compilation of information about
compensation of senior officers of other real estate investment and asset
management companies. It noted that, while there was a wide variation in the
compensation of senior officers of companies shown in the compilation, the
proposed compensation of Messrs. Saiontz and Krasnoff would be less than that of
the most senior officers of the company included in the compilation which was
most similar to the Company. It then determined that for the year ending
November 30, 1998, Mr. Saiontz would be paid a base salary of $500,000 plus a
bonus equal to 0.50% of the consolidated net income of the Company and its
subsidiaries, before income taxes, and Mr. Krasnoff would be paid a base salary
of $400,000 plus a bonus equal to 0.50% of the consolidated net income of the
Company and its subsidiaries, before income taxes, during that year.
Lennar's Compensation Committee then reviewed recommendations for salary
and bonuses for other executive officers of the Company and its subsidiaries,
and approved the recommended compensation for the year ending November 30, 1998
of executive officers of the Company in addition to Mr. Saiontz and Mr.
Krasnoff. That included compensation to Stuart A. Miller for serving as Chairman
of the Board of the Company, to which he is expected to devote approximately 25%
of his working time, of $200,000 plus a bonus equal to 0.25% of the consolidated
net income of the Company and its subsidiaries, before income taxes, during that
year.
LEONARD MILLER
BRIAN BILZIN
14
<PAGE> 17
PERFORMANCE GRAPH
The Company's Common Stock began trading on the New York Stock Exchange on
November 3, 1997. Because the Common Stock traded for only 20 days during the
fiscal year ended November 30, 1997, the Company has not included a performance
graph as the information contained therein would be immaterial.
OTHER MATTERS
The Company's management knows of no matters other than the foregoing which
will be presented for action at the meeting. If any other matters properly come
before the meeting, or any adjournments, the person or persons voting the
management proxies will vote them in accordance with their best judgment.
AUDITORS
Deloitte & Touche LLP audited the Company's financial statements for the
year ended November 30, 1997. Representatives of that firm are expected to be
present at the Annual Meeting of Stockholders to answer questions. They will be
given an opportunity to make a statement if they wish to do so.
The Board of Directors has not at this time selected an accounting firm to
audit the Company's financial statements for the year ending November 30, 1998.
The selection will be discussed at meetings of the Audit Committee and of the
Board of Directors to be held after the Company's April 8, 1998 Annual Meeting.
STOCKHOLDERS' PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
Proposals which stockholders wish included in next year's Proxy Statement
must be received at the Company's principal executive offices at Seven Hundred
Sixty N.W. 107th Avenue, Miami, Florida 33172 no later than November 9, 1998.
By Order of the Board of Directors
MICHELLE R. SIMON
Secretary
Dated: March 9, 1998
15
<PAGE> 18
EXHIBIT 1
LNR PROPERTY CORPORATION
1997 STOCK OPTION PLAN
<PAGE> 19
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
1. Purpose of the Plan......................................... A-1
2. Definitions................................................. A-1
3. Authority to Grant Stock Options............................ A-2
4. Authority to Grant Stock Appreciation Rights................ A-2
5. Terms and Conditions of Stock Options....................... A-3
6. Payment of Option Exercise Price............................ A-4
7. Withholding Payment......................................... A-4
8. Written Agreement........................................... A-5
9. Administration of the Plan.................................. A-5
10. Shares Available for Options................................ A-6
11. Laws and Regulations........................................ A-6
12. Modification of Numbers of Shares and other Securities...... A-6
13. Effects of Termination of Employment........................ A-6
14. No Rights to Continued Employment........................... A-7
15. Effective Date.............................................. A-7
16. Amendments of the Plan...................................... A-8
17. Termination of the Plan..................................... A-8
18. Governing Law............................................... A-8
</TABLE>
<PAGE> 20
LNR PROPERTY CORPORATION
1997 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The Purpose of the Plan is to encourage and enable those officers,
employees and directors of the Company upon whose judgement, initiative and
efforts the Company largely depends for the successful conduct of its business
to acquire a proprietary interest in LNR, and by doing so to stimulate the
efforts of those officers, employees and directors on behalf of the Company and
strengthen their desire to remain officers, employees or directors of the
Company.
2. DEFINITIONS
As used in this Plan the following definitions apply:
(a) "Assumed Options" means options granted in connection with the
spinoff of LNR from Lennar Corporation in substitution for unexercised
options granted under the Lennar Corporation 1991 Stock Option Plan or
otherwise.
(b) "Board of Directors" means the Board of Directors of LNR.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Compensation Committee of the Board of
Directors, or such other committee consisting of at least three members of
the Board of Directors as is specified by the Board of Directors to perform
the functions and duties of the Committee under the Plan. If there is no
Compensation Committee and the Board of Directors does not appoint another
Committee, the Board of Directors will be the Committee.
(e) "Common Stock" means common stock, par value $.10 per share, of
LNR.
(f) "Company" means LNR and all its more than 50% owned subsidiaries.
(g) "Director" means any person serving as a member of the board of
directors of any corporation included in the Company.
(h) "Discretion" means the ability of a committee or other body to act
in its sole discretion, with no requirement that it follow past practices
or treat one employee in a manner consistent with the treatment afforded to
any other employee.
(i) "Incentive Option" means an option to purchase Common Stock which
meets the requirements set forth in the Plan and is intended to be, and
qualifies as, an Incentive Stock Option as that term is used in Section 422
of the Code.
(j) "Key Employee" means an officer or employee of the Company, who
the Committee determines can contribute significantly to the growth and
successful operations of the Company.
(k) "Lennar Equivalent Fraction" means a fraction of which (i) the
numerator is the average of the closing prices of Lennar Corporation common
stock, as reported on the New York Stock Exchange on October 27, 28, 29, 30
and 31, 1997 and (ii) the denominator is the average of the closing prices
of LNR Common Stock, as reported on the New York Stock Exchange on November
3, 4, 5, 6 and 7, 1997.
(l) "Lennar Options" means options granted under the Lennar 1991 Stock
Option Plan which were outstanding (whether or not they were immediately
exercisable) on October 31, 1997.
A-1
<PAGE> 21
(m) "LNR" means LNR Property Corporation, a Delaware corporation, or
its successor by merger or any similar transaction.
(n) "Nonqualified Option" means an option to purchase Common Stock
which meets the requirements set forth in the Plan but is not intended to
be, or does not qualify as, an Incentive Stock Option as that term is used
in Section 422 of the Code.
(o) "Officers and Directors Stock Option Committee" means a committee
designated by the Board of Directors, consisting of two or more persons all
of whom are outside directors, as that term is used in Section 162(m) of
the Code.
(p) "Optionee" means a person who holds a stock option or Stock
Appreciation Right granted under the Plan.
(q) "Plan" means this LNR Property Corporation 1997 Stock Option Plan.
(r) "Stock Appreciation Right" means a right to receive the
appreciation in value, or a portion of the appreciation value, of a
specified number of shares of Common Stock, as provided in Section 4(b).
(s) "10% Stockholder" means a person who owns (after applying the
attribution rules contained in Section 424 of the Code) more than 10% of
the total combined voting stock of all classes of LNR or of any parent or
subsidiary.
3. AUTHORITY TO GRANT STOCK OPTIONS
(a) The Committee or the Officers and Directors Stock Option Committee may
at any time authorize the grant of stock options under the Plan to any one or
more Key Employees or Directors. They may not grant to any Optionee options for
more than 400,000 shares of stock. They may at their discretion, grant Assumed
Options to Optionees that are intended to replace those unexercised options
granted by Lennar Corporation under its 1991 Stock Option Plan; it is intended
that such replacement would comply with Section 424 of the Code. An Assumed
Option issued in substitution for a Lennar Option will entitle the holder to
purchase a number of shares of Common Stock equal to (i) the number of shares
which were subject to the Lennar Option on October 31, 1997, times (ii) the
Lennar Equivalent Fraction. These stock options may be Incentive Options or
Nonqualified Options, except that (i) no officer or Director who is not an
employee may be granted an Incentive Option, (ii) no employee may be granted an
Incentive Option which would result in the aggregate fair market value,
determined as of the date the stock option is granted, of the Common Stock with
respect to which that Incentive Option and all other Incentive Options held by
that employee under any plan maintained by LNR (or any parent or subsidiary of
LNR) are exercisable for the first time by that employee during any calendar
year exceeds $100,000 and (iii) no employee may receive options under the Plan
relating in total to more than 750,000 shares of Common Stock. Each stock option
will be designated at the time of grant as a Nonqualified Option or as an
Incentive Option.
(b) Without limiting the generality of what is stated in Section 3(a),
stock options may be granted to a Key Employee regardless of the fact that stock
options or Stock Appreciation Rights previously granted to that Key Employee
remain unexercised, and an Optionee may exercise a stock option or Stock
Appreciation Right when it is exercisable by its own terms, notwithstanding that
there are stock options and Stock Appreciation Rights which were previously
granted to that Optionee which remain unexercised.
4. AUTHORITY TO GRANT STOCK APPRECIATION RIGHTS
(a) The Committee or the Officers and Directors Stock Option Committee may
at any time authorize the grant of Stock Appreciation Rights to any Key
Employees or Directors who hold or are receiving stock
A-2
<PAGE> 22
options granted under the Plan. Each Stock Appreciation Right will relate to a
specific stock option granted under the Plan. A Stock Appreciation Right may be
granted concurrently with the stock option to which it relates or at any time
after the stock option has been granted and before it has been exercised,
terminates or expires. The number of shares subject to a Stock Appreciation
Right may not exceed the number of shares which may be issued on exercise of the
option to which the Stock Appreciation Right relates.
(b) The term "Stock Appreciation Right" means the right to receive from the
Company, without payment by the Optionee, an amount equal to the excess of the
fair market value on the date the Stock Appreciation Right is exercised of the
number of shares of Common Stock for which the Stock Appreciation Right is
exercised over the exercise price the Optionee would have had to pay to exercise
the related stock option in order to purchase that number of shares of Common
Stock. Upon exercise of a Stock Appreciation Right the Participant will
automatically be deemed to surrender the related stock option with regard to the
number of shares of Common Stock as to which the Stock Appreciation Right is
exercised. Except as provided in subsection 4(c), at the Discretion of the
Committee or the Officers and Directors Stock Option Committee, Stock
Appreciation Rights may specify that the sum to be paid upon their exercise may
be paid by the Company in cash, in Common Stock valued at its fair market value
on the date the Stock Appreciation Right is exercised, or in any combination of
cash and Common Stock valued in that manner.
(c) All actions taken and decisions made by the Committee or the Officers
and Directors Stock Option Committee will be binding and conclusive on all
Optionees of stock options and Stock Appreciation Rights granted under the Plan
and all other officers, Directors and employees of the Company, and on their
respective legal representatives and beneficiaries. No member of the Committee
or the Officers and Directors Stock Option Committee will be liable for any
determination made or action taken in good faith with respect to the Plan or any
stock options or Stock Appreciation Rights granted under the Plan, or for any
decision not to grant stock options or Stock Appreciation Rights under the Plan
to any officer or employee of the Company.
(d) A Stock Appreciation Right granted under the Plan will be exercisable
only when, and with regard to the number of shares of Common Stock as to which,
the related stock option is exercisable and will lapse when the related stock
option terminates or expires. A Stock Appreciation Right granted under the Plan
may only be transferred when, and to the person, to whom the right to exercise
the related stock option is transferred as provided in Section 12.
5. TERMS AND CONDITIONS OF STOCK OPTIONS
(a) Expiration Date: Each stock option granted under the Plan, other than
an Assumed Option, will expire on a date determined by the Committee or the
Officers and Directors Stock Option Committee, in its Discretion, when the
option is granted, which will be not more than 10 years after the date of grant,
except that an Incentive Option granted to a Key Employee who, at the time of
the grant, is a 10% Stockholder will expire not more than five years after the
date of grant.
(b) Exercise Date:
(i) Each stock option granted under the Plan, other than an Assumed
Option, will be exercisable at such time or times, and in such
installments, as are determined by the Committee or the Officers and
Directors Stock Option Committee, in its Discretion, when the stock option
is granted. However, no stock option granted under the Plan may be
exercisable until at least six months after the date of grant, except upon
the death or disability of the Optionee prior to the expiration of that six
month period. In addition, in the case of new Assumed Options granted to an
Optionee in replacement in accordance with section 424 of the Code for
options held by the Optionee, the new options may be made exercisable, if
so determined by the Committee or the Officers and Directors Stock Option
Committee, in its discretion, at the earliest date the replaced options
were available.
A-3
<PAGE> 23
(ii) Each Assumed Option issued in substitution for a Lennar Option
will be exercisable at any time with regard to (x) the number of shares as
to which the Lennar Option would have been exercisable, multiplied by (y)
the Lennar Equivalent Fraction.
(c) Price:
(i) The exercise price of each stock option granted under the Plan,
other than an Assumed Option, will be determined by the Committee or the
Officers and Directors Stock Option Committee, in its Discretion, at the
time the stock option is granted, except that the exercise price of a stock
option may not be less than (i) if the stock option is an Incentive Option
granted to a person who is not a 10% Stockholder, 100% of the fair market
value of the Common Stock on the date the stock option is granted or (ii)
if the stock option is an Incentive Option granted to a 10% Stockholder,
the option price may not be less than 110% of the fair market value of the
Common Stock on the date the stock option is granted. If the stock option
is a Nonqualified Option, the option may be granted at any price determined
by the appropriate committee. For the purposes of the Plan, the fair market
value of a share of the Common Stock on any day will be the mean between
the highest and lowest quoted selling prices of the Common Stock on the New
York Stock Exchange (or, if the Common Stock is not traded on the New York
Stock Exchange, on the principal securities exchange or market on which the
Common Stock is traded) on that date, or if there are no sales on that
date, on the next following day on which there are sales. In the event the
Common Stock is not publicly traded as of the date the option is granted,
the exercise price of each such Incentive Option granted under the Plan
will be determined by the Committee or the Officers and Directors Stock
Option Committee, in its Discretion, at the time the Incentive Option is
granted, except that the exercise price of the Incentive Option may not be
less than the fair market value of such shares as of the grant date, with
such fair market value determination to be made in 'good faith' as
prescribed in section 14a.422A-1 Q&A 2(c)(4) of the Temporary Treasury
Regulations.
(ii) The per share excise price of an Assumed Option issued in
substitution for a Lennar Option will be (x) the per share exercise price
of the Lennar Option on October 31, 1997, divided by (y) the Lennar
Equivalent Fraction.
(d) Assignment: No stock option granted under the Plan may be assigned or
transferred, other than as provided in Section 12 upon the death of the Optionee
to whom the stock option was granted; provided, however, that the Committee may
(but need not) permit other transfers, where the Committee concludes that such
transferability (i) does not result in accelerated taxation, (ii) does not cause
any option intended to be an Incentive Option to fail to meet the requirements
set forth in Section 422(b) of the Code (or any applicable successor to that
Section) and (iii) is otherwise appropriate and desirable.
6. PAYMENT OF OPTION EXERCISE PRICE
The exercise price of any stock option will be payable in cash or by check
payable to the order of LNR, except that the Committee or the Officers and
Directors Stock Option Committee may determine, in its Discretion, that the
exercise price of the stock option may be paid by delivering shares of the
Common Stock with a fair market value at the date the stock option is exercised
equal to all or any part of the exercise price, with any remaining balance to be
paid in cash or by check payable to the order of LNR.
7. WITHHOLDING PAYMENT
If as a result of the exercise of a Nonqualified Option or a Stock
Appreciation Right, or upon a disqualifying disposition (as that term is used in
Section 422 of the Code) of shares acquired upon exercise of an Incentive
Option, the Company is required to pay any amount as withheld income tax, the
Company may, at its Discretion, either (i) reduce the number of shares of Common
Stock issuable upon exercise of the stock
A-4
<PAGE> 24
option, or the cash or Common Stock to be paid or delivered upon exercise of the
Stock Appreciation Right, by the amount of the required withholding (with the
Common Stock valued at its fair market value on the date the stock option or
Stock Appreciation Right is exercised), or (ii) require that, as a condition to
exercise of the stock option or Stock Appreciation Right, the Optionee remit to
the Company the amount of withholding tax required to be paid as a result of the
exercise. If a person makes a disqualifying disposition (as that term is used in
Section 422 of the Code) of shares acquired upon exercise of an Incentive
Option, that person will promptly notify the Company of the disqualifying
disposition and pay to the Company an amount equal to any withholding tax the
Company is required to pay as a result of the disqualifying disposition. If a
person fails to reimburse the Company for any sum he or she is required to pay
as a result of a disqualifying disposition of shares acquired upon exercise of
an Incentive Option, the Company may withhold that amount from any payments of
salary or other payments the Company is required to make to the person or may
take any other lawful steps to collect that amount from the person.
8. WRITTEN AGREEMENT
Promptly after a stock option or Stock Appreciation Right is granted under
the Plan, LNR will provide the Optionee of that stock option or Stock
Appreciation Right with a written agreement containing the provisions of the
stock option or Stock Appreciation Right. The terms of the agreement will be in
accordance with the Plan, but may contain additional provisions and restrictions
authorized by the Committee or the Officers and Directors Stock Option
Committee, in its Discretion, which are not inconsistent with the Plan. Each
agreement relating to a stock option will state whether the stock option is or
is not intended to be an Incentive Option. Each Optionee of a stock option or
Stock Appreciation Right granted under the Plan will be bound by the terms of
the Plan and of the agreement relating to the stock option or Stock Appreciation
Right.
9. ADMINISTRATION OF THE PLAN
(a) The Plan will be administered by the Committee.
(b) The Committee will have full power to construe, interpret and
administer the Plan and to establish and change the rules and regulations for
its administration.
(c) Subject to the limitations contained in the Plan, the Committee will
have full power, in its Discretion, (i) to grant Incentive Options, Nonqualified
Options and Stock Appreciation Rights to any one or more Key Employees or
Directors, as applicable, and (ii) to determine as to any stock option or Stock
Appreciation Right granted to any Key Employee or Director the number of shares
of Common Stock to which the stock option or Stock Appreciation Right will
relate, the exercise price of the stock option or Stock Appreciation Right, the
term of the stock option or Stock Appreciation Right, and all other terms of the
stock option or Stock Appreciation Right.
(d) In exercising its powers under the Plan, the Committee may act in its
sole discretion, with no requirement that it follow past practice or treat one
employee, officer or Director in a manner consistent with the treatment afforded
to any other employee, officer or Director.
(e) All actions taken and decisions made by the Committee will be binding
and conclusive on all Optionees of stock options and Stock Appreciation Rights
granted under the Plan and all other officers, employees and Directors of the
Company, and on their respective legal representatives and beneficiaries. No
member of the Committee will be liable for any determination made or action
taken in good faith with respect to the Plan or any stock options or Stock
Appreciation Rights granted under the Plan, or for any decision not to grant
stock options or Stock Appreciation Rights under the Plan to any officer,
employee or Director of the Company.
A-5
<PAGE> 25
10. SHARES AVAILABLE FOR OPTIONS
The aggregate number of shares of Common Stock which may be issued upon
exercise of stock options or Stock Appreciation Rights granted under this Plan
is 2,000,000 shares, subject to adjustment as provided in Section 12. Any shares
which are subject to stock options or Stock Appreciation Rights which terminate
or are surrendered (including shares subject to stock options which are deemed
surrendered because of exercise of Stock Appreciation Rights, to the extent the
shares are not issued on exercise of the Stock Appreciation Rights) will be
available to be issued on exercise of subsequently granted stock options or
Stock Appreciation Rights. Any shares as to which stock options or Stock
Appreciation Rights are exercised but which are retained by LNR to pay the
exercise price of stock options, to reimburse the Company for paying withholding
taxes or otherwise, will be deemed to have been issued upon exercise of stock
options or Stock Appreciation Rights, and will not be available to be issued on
exercise of other stock options or Stock Appreciation Rights.
11. LAWS AND REGULATIONS
The obligation of the Company to issue shares of Stock upon exercise of
Options will be subject to (a) the condition that counsel for the Company is
satisfied that the sale and delivery will be in compliance with the Securities
Act of 1933, as amended, and all other applicable laws, rules or regulations,
and (b) the condition that the shares of stock reserved for issuance under the
Plan have been authorized for listing on any securities exchange or exchanges on
which the Common Stock is listed.
12. MODIFICATION OF NUMBERS OF SHARES AND OTHER SECURITIES
If (a) the Company at any time is involved in a merger, consolidation,
dissolution, liquidation, reorganization, exchange of shares, sale of all or
substantially all of the assets or stock of the Company or similar transaction,
(b) there is a stock dividend, stock split, reverse stock split, stock
combination, reclassification, recapitalization or other similar change in the
capital structure of LNR, or a distribution to holders of Common Stock other
than a cash dividend or (c) any other event occurs which in the judgment of the
Committee necessitates an adjustment to the terms of the outstanding stock
options or Stock Appreciation Rights which were issued under the Plan, the
Committee may make such modifications in terms of outstanding stock options as
in its judgment are appropriate so the Optionees' rights will be substantially
proportionate to the rights existing prior to the event, and to maintain the
continuing availability of shares under Section 10 (if shares are otherwise then
available) including, without limitation, adjustments in (i) the number and kind
of shares subject to options, (ii) the exercise price of outstanding stock
options and (iii) the number and kind of shares available under Section 10. To
the extent that such action includes an increase or decrease in the number of
shares subject to outstanding options, the number of shares available under
Section 10 above will be increased or decreased, as the case may be,
proportionately. The judgment of the Committee with respect to any matter
referred to in this Section 12 will be conclusive and binding upon each Optionee
without the need for any amendment to the Plan or any stock options or Stock
Appreciation Rights which had been granted under the Plan.
13. EFFECTS OF TERMINATION OF EMPLOYMENT
(a) Each Nonqualified Option and related Stock Appreciation Right granted
under the Plan will terminate when the Optionee ceases to be an officer,
employee or Director of the Company, except that
(i) If an Optionee of a Nonqualified Option dies while an officer,
employee or Director of the Company, each Nonqualified Option and related
Stock Appreciation Right held by the Optionee at the date of the Optionee's
death may be exercised, to the extent it was exercisable at the date of
death (or,
A-6
<PAGE> 26
with the consent of the Committee, in full) by the Optionee's legal
representative until the earlier of 12 months after the date of death or
the date on which the Nonqualified Option expires by its terms.
(ii) If an Optionee of a Nonqualified Option ceases to be an officer,
employee or Director of the Company,
(A) after the Optionee becomes 65 years old,
(B) because of the disability of the Optionee (as determined by the
Committee in its Discretion), or
(C) under other circumstances which the Committee or the Officers
and Directors Stock Option Committee, in its Discretion, determines to
justify continued exercise of stock options and related Stock
Appreciation Rights, each Nonqualified Option and related Stock
Appreciation Right held by the Optionee on the date the Optionee ceased
to be an officer, employee or Director of the Company may be exercised,
to the extent it was exercisable on the date the Optionee ceased to be
an officer, employee or Director of the Company until the earlier of
three months after (x) the date the Optionee ceased to be an officer,
employee or Director of the Company, or (y) the date the stock option
expires by its own terms.
(b) Each Incentive Option and related Stock Appreciation Right granted
under the Plan will terminate when the Optionee ceases to be an employee of the
Company (whether or not the Optionee continues to be an officer of the Company),
except that if the Optionee dies while an employee of the Company, or ceases to
be an employee of the Company under a circumstance described in clause (A), (B)
or (C) of subparagraph (a) (ii), each Incentive Option and related Stock
Appreciation Right held at the date the Optionee ceases to be an employee of the
Company may be exercised by the Optionee's legal representative until twelve
months after the date of death, or by the Optionee until three months after the
Optionee ceases to be an employee of the Company. Notwithstanding the above, if
an Incentive Option is granted to a Director or officer, who is also an
employee, in the event such Optionee ceases to be an employee, that option may
be converted to a Nonqualified Option, under circumstances which the Committee
or the Officers and Directors Stock Option Committee, in its Discretion deems
appropriate, if that option is not exercised by the Optionee within three months
of the time the Optionee ceases to be an employee, and shall thereafter be
subject to the provisions of clause (A), (B) or (C) of subparagraph (a) (ii)
above so long as the Optionee remains a Director or officer.
14. NO RIGHTS TO CONTINUED EMPLOYMENT
Nothing in the Plan or in any stock option or Stock Appreciation Right
granted under the Plan will give any officer, employee or Director of the
Company a right to continue to be an officer, employee or Director of the
Company or in any other way affect the right of the Company to terminate the
officer position or employment of any officer, employee or Director at any time
for any reason whatsoever, with or without cause.
15. EFFECTIVE DATE
The Plan will be effective on the date it is adopted by the Board of
Directors, provided that the stockholders of LNR approve the Plan within 12
months after it is adopted by the Board of Directors. Stock options and Stock
Appreciation Rights may be granted prior to approval of the Plan by the
stockholders of LNR, but each stock option and Stock Appreciation Right granted
prior to stockholder approval of the Plan will be subject to approval of the
Plan by the stockholders of LNR within 12 months after its adoption. No stock
option or Stock Appreciation Right may be exercised until the Plan is approved
by the stockholders of LNR, and all stock options and Stock Appreciation Rights
granted before the Plan is approved by the
A-7
<PAGE> 27
stockholders of LNR will automatically terminate at the end of 12 months after
the Plan is adopted by the Board of Directors if the Plan is not approved by the
stockholders of LNR by that date.
16. AMENDMENTS OF THE PLAN
The Board of Directors may amend the Plan at any time, except that no
amendment to the Plan will be effective until it is approved by the stockholders
of LNR if the amendment (a) increases the maximum number of shares which may be
issued upon exercise of stock options or Stock Appreciation Rights granted under
the Plan, (b) changes the categories of persons eligible to receive stock
options or Stock Appreciation Rights under the Plan or (c) materially increases
the benefits officers or employees of the Company may receive under the Plan. No
amendment to the Plan will change the exercise price, or otherwise alter any
provision, of any stock option or Stock Appreciation Right which has been
granted prior to the amendment, unless the Optionee of the stock option or Stock
Appreciation Right consents to the change.
17. TERMINATION OF THE PLAN
The Plan may be terminated at any time by the Board of Directors. The Plan
will terminate on the 10th anniversary of the date it is adopted by the Board of
Directors unless it is terminated before that. No stock options or Stock
Appreciation Rights may be granted after the Plan is terminated. However,
termination of the Plan will not affect any stock option or Stock Appreciation
Right which is outstanding when the Plan is terminated.
18. GOVERNING LAW
With respect to options granted pursuant to the Plan and the option
agreements thereunder, the Plan, such option agreements and any options granted
pursuant thereto shall be governed by the applicable Code provisions to the
maximum extent possible. Otherwise, the operation of, and the rights of
Optionees under, the Plan, the option agreements and any options granted
thereunder shall be governed by applicable federal law and, to the extent not
governed by federal law, by the laws of the State of Florida.
As approved by the Board of Directors of LNR Property Corporation on
October 30, 1997.
A-8
<PAGE> 28
EXHIBIT 2
LNR PROPERTY CORPORATION 1998 INCENTIVE COMPENSATION PLAN
1. PURPOSE OF THE PLAN
The purpose of the Plan is to enable the Compensation Committee to
establish performance goals for officers and other key employees of LNR and its
subsidiaries, to determine bonuses which will be awarded to particular officers
and key employees on the basis of the performance goals established for them and
to ensure that bonus payments are in accordance with the arrangements
established by the Committee.
2. DEFINITIONS
As used in this Plan, the following definitions apply:
(a) "Bonus" means the bonus to which an Employee is entitled under a
bonus arrangement established by the Committee under the Plan.
(b) "Bonus Formula" means the formula for calculating an Employee's
Bonus on the basis of a performance goal established under the Plan.
(c) "EBITDA" means earnings before interest, taxes, depreciation and
amortization.
(d) "Employee" means an employee of the Company.
(e) "Committee" means the Compensation Committee, a subcommittee of
the Compensation Committee or another committee of LNR's Board of
Directors, consisting solely of two or more Outside Directors.
(f) "Company" means LNR and its more than 50% owned subsidiaries.
(g) "Compensation Committee" means the Compensation Committee of LNR's
Board of Directors.
(h) "LNR" means LNR Property Corporation, a Delaware corporation.
(i) "Outside Director" means a director of LNR who qualifies as an
outside director for the purposes of Section 162(m) of the Internal Revenue
Code of 1986, as amended.
(j) "Plan" means this LNR Property Corporation 1998 Incentive
Compensation Plan.
3. AUTHORITY TO ESTABLISH PERFORMANCE GOALS AND BONUSES
(a) The Committee will have the authority to establish for any Employee who
is an officer, or who the Committee determines to be a key employee, of LNR or
any subsidiary a performance goal, and a Bonus Formula related to that
performance goal, for any fiscal year of the Company, or for a period which is
shorter or longer than a single fiscal year. A Bonus Formula may be (i) a
percentage, or may be based upon the extent of achievement of a specified level,
of (x) the Company's consolidated pre-tax or after-tax earnings or EBITDA, (y)
the pre-tax or after tax earnings, or the EBITDA, of any particular subsidiary,
division or other business unit of LNR or the Company, or (z) changes (or the
absence of changes) in the per share or aggregate market price of LNR's common
stock, or (ii) the extent of achievement of a specified level of revenues,
earnings, costs, return on assets, return on equity, return on capital, return
on investment, return on assets under management, net operating income or net
operating income as a percentage of book value with regard to the Company,
particular subsidiaries, divisions or business units of LNR or the Company,
particular
<PAGE> 29
assets or groups of assets or particular Employees or groups of Employees.
Performance goals may be absolute amounts or percentages of amounts or may be
relative to the performance of other companies or of indexes.
(b) The Committee may determine the Bonus Formula which will determine the
Bonus an Employee will receive with regard to a fiscal year or other period.
However, no Employee may be awarded a Bonus for any fiscal year in excess of the
greater of (i) $1.5 million or (ii) 1.5% of the consolidated pre-tax income of
the Company in that fiscal year.
(c) When the Committee establishes a performance goal and Bonus Formula for
an Employee, the Committee may provide (i) that the resulting Bonus will be paid
in a single lump sum or that the resulting Bonus will be paid over a period of
years, with or without interest on deferred payments, and (ii) if a Bonus is to
be paid over a period of years, whether the right to the unpaid portion of the
Bonus will be forfeited if the Employee ceases to be employed by the Company
before the bonus is paid in full.
4. REVIEW OF PAYMENT OF BONUSES
Promptly after the end of each fiscal year of the Company, the management
of the Company will present to the Committee a list showing with regard to each
employee who has become entitled to a Bonus with regard to that fiscal year (i)
the Employee's performance goal or Bonus Formula with regard to that fiscal
year, (ii) the extent to which the performance goal was achieved or exceeded, or
other applicable information relating to the performance goal or otherwise
applicable to the Employee's Bonus Formula, and (iii) the Bonus to which the
Employee is entitled with regard to the fiscal year. No Bonus may be paid to an
Employee with regard to a fiscal year until the Committee certifies that the
Bonus with regard to the Employee shown on the list (or on an amended list) is
correct based upon the performance goal and the Bonus Formula established for
the Employee with regard to the fiscal year.
5. ADMINISTRATION OF THE PLAN
(a) The Plan will be administered by the Committee.
(b) The Committee will have full power to construe, interpret and
administer the Plan and to establish and change the rules and regulations for
its administration. Any interpretation by the Committee of the Plan or of any
performance goal or Bonus Formula established for an Employee under the Plan,
and any determination of the Committee regarding the Bonus to which any employee
is entitled, will bind the Company and all Employees who are affected by it.
(c) The Committee will have total discretion to determine whether
performance goals and Bonus Formulae are to be established under the Plan for
particular Employees. The Committee will not be required to establish similar
performance goals or similar Bonus Formulae for employees who hold similar
positions.
6. NO RIGHTS TO CONTINUED EMPLOYMENT
Nothing in the Plan or in the establishment of any performance goal or
Bonus Formula, and no award of any Bonus which is payable immediately or in the
future (whether or not future payments may be forfeited), will give any officer
or employee of the Company a right to continue to be an officer or employee of
the Company or in any other way affect the right of the Company to terminate the
officer position or employment of any officer or employee at any time.
7. EFFECTIVE DATE
This Plan is effective as of March 1, 1998, provided that the stockholders
of LNR approve the Plan at the first annual meeting of stockholders held after
that date. Performance goals and Bonus Formulae may be
2
<PAGE> 30
established prior to the time the stockholders of LNR approve this Plan.
However, no Bonuses will be paid under this Plan unless this Plan is approved by
the stockholders of LNR.
8. AMENDMENTS OF THE PLAN
The Committee may, with the approval of the Board of Directors of LNR,
amend the Plan at any time, except that no amendment to the Plan will be
effective if it materially changes any of the criteria on which Bonuses may be
based, alters the maximum Bonus which may be paid to an Employee with regard to
a fiscal year or other period, or otherwise materially changes the Plan, unless
the amendment is approved by the stockholders of LNR. No amendment to the Plan
may change any performance goal or Bonus Formula which has been established for
an Employee, or affect any Employee's right to receive a Bonus which has been
earned, before the amendment, unless the Employee consents to the change.
9. TERMINATION OF THE PLAN
The Plan may be terminated at any time by the Committee, with the approval
of the Board of Directors of LNR. However, termination of the Plan will not
affect any performance goal or Bonus Formula which has been established before
the Plan is terminated or the right of any Employee to receive payments of a
Bonus which the Employee earned as a result of a performance goal or Bonus
Formula established for the Employee before the Plan is terminated.
3
<PAGE> 31
SKU# 4934-PS-98
<PAGE> 32
Appendix A
DETACH HERE
PROXY
[LNR PROPERTY CORPORATION LOGO]
760 N.W. 107TH AVENUE
MIAMI, FLORIDA 33172
PROXY FOR 1998 ANNUAL MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of LNR PROPERTY CORPORATION hereby appoints
Stuart A. Miller and Michelle R. Simon, or any one or more of them present,
with full power of substitution, as attorneys and proxies of the undersigned to
appear at the Annual Meeting of the Stockholders of LNR PROPERTY CORPORATION to
be held at the Doral Park Golf and Country Club, 5001 N.W. 104 Avenue, Miami,
Florida on Wednesday, April 8, 1998, and at any and all adjournments thereof,
and there to act for the undersigned and vote all shares of Common Stock of LNR
PROPERTY CORPORATION standing in the name of the undersigned, with all the
powers the undersigned would possess if personally present at the meeting, as
follows on the reverse side.
[SEE REVERSE SIDE]
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 33
DETACH HERE
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. THIS PROXY WHEN PROPERLY
EXECUTED WILL BE VOTED IN THE MANNER DIRECTED. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL THE LISTED NOMINEES FOR ELECTION OF DIRECTORS AND
FOR ALL OF THE OTHER PROPOSALS.
1. ELECTION OF DIRECTORS:
NOMINEES: Leonard Miller, Stuart A. Miller, Steven J. Saiontz, Sue M. Cobb,
Carlos M. de la Cruz, Brian L. Bilzin and Jeffrey P. Krasnoff
FOR WITHHELD
[ ] ALL [ ] FROM ALL
NOMINEES NOMINEES
[ ]________________________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Approval of LNR Property Corporation
1997 Stock Option Plan. [ ] [ ] [ ]
3. Approval of LNR Property Corporation
1998 Incentive Compensation Plan. [ ] [ ] [ ]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears at left.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
an authorized person.
Signature:_________________Date:________Signature:_________________Date:________
<PAGE> 34
Appendix B
DETACH HERE
PROXY
[LNR PROPERTY CORPORATION LOGO]
760 N.W. 107TH AVENUE
MIAMI, FLORIDA 33172
PROXY FOR 1998 ANNUAL MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of LNR PROPERTY CORPORATION hereby appoints
Stuart A. Miller and Michelle R. Simon, or any one or more of them present,
with full power of substitution, as attorneys and proxies of the undersigned to
appear at the Annual Meeting of the Stockholders of LNR PROPERTY CORPORATION to
be held at the Doral Park Golf and Country Club, 5001 N.W. 104 Avenue, Miami,
Florida on Wednesday, April 8, 1998, and at any and all adjournments thereof,
and there to act for the undersigned and vote all shares of Class B Common
Stock of LNR PROPERTY CORPORATION standing in the name of the undersigned, with
all the powers the undersigned would possess if personally present at the
meeting, as follows on the reverse side.
[SEE REVERSE SIDE]
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 35
DETACH HERE
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. THIS PROXY WHEN PROPERLY
EXECUTED WILL BE VOTED IN THE MANNER DIRECTED. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL THE LISTED NOMINEES FOR ELECTION OF DIRECTORS AND
FOR ALL OF THE OTHER PROPOSALS.
1. ELECTION OF DIRECTORS:
NOMINEES: Leonard Miller, Stuart A. Miller, Steven J. Saiontz, Sue M. Cobb,
Carlos M. de la Cruz, Brian L. Bilzin and Jeffrey P. Krasnoff
FOR WITHHELD
[ ] ALL [ ] FROM ALL
NOMINEES NOMINEES
[ ]________________________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Approval of LNR Property Corporation
1997 Stock Option Plan. [ ] [ ] [ ]
3. Approval of LNR Property Corporation
1998 Incentive Compensation Plan. [ ] [ ] [ ]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears at left.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
an authorized person.
Signature:_________________Date:________Signature:_________________Date:________
