<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>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] 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 12, 2000
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 Country Club, 5001 N.W.
104th Avenue, Miami, Florida, on Wednesday, April 12, 2000, at 11:00 o'clock
a.m. (Eastern Daylight Savings Time) for the following purposes:
1. To elect directors.
2. To vote upon a proposal to amend the Company's Certificate of
Incorporation to divide the directors into three classes.
3. To vote upon a proposal to approve the LNR Property Corporation
2000 Stock Option and Restricted Stock 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 15,
2000 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
MARGARET A. JORDAN
Secretary
Dated: March 17, 2000
<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"). 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, for the proposal to amend the Certificate of
Incorporation to divide the directors into three classes and for the proposal to
approve the LNR Property Corporation 2000 Stock Option and Restricted Stock
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 17, 2000 TO ALL STOCKHOLDERS OF RECORD ON FEBRUARY 15, 2000. 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 15,
2000 will be entitled to vote at the meeting. The only outstanding voting
securities of the Company on that date were 23,519,078 shares of Common Stock
and 10,057,833 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 15,
2000:
<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) 98.41%
23 Star Island
Miami Beach, FL 33139
Common Stock Wellington Management Company, LLP 2,121,700(2) 9.02%
75 State Street
Boston, MA 02109
Common Stock The Baupost Group, L.L.C. 2,086,700(2) 8.87%
44 Brattle Street, 5th Floor
Cambridge, MA 02138
Common Stock Boston Partners Asset Management, 1,407,500(2) 5.98%
L.P.
28 State Street, 20th Floor
Boston, MA 02109
Common Stock Goldman, Sachs & Co. 1,366,700(2) 5.81%
The Goldman Sachs Group, Inc.
85 Broad Street
New York, NY 10004
</TABLE>
- ---------------
(1) Leonard Miller's shares are owned by a limited partnership. A corporation
wholly-owned by Mr. Miller is the sole general partner of that partnership.
The limited partners consist of Mr. Miller, his wife and a trust of which
Mr. Miller is the primary beneficiary. This does not include 46,000 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 13G's.
On February 15, 2000, The Depository Trust Company owned of record
23,203,803 shares of Common Stock, constituting 98.66% of the outstanding Common
Stock and 86,370 shares of Class B Common Stock, constituting 0.86% 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 28, 2000:
<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) 98.40 %
Common Stock 10,267 (8)
Brian L. Bilzin Common Stock 14,820(4) (8)
Sue M. Cobb Common Stock 30,000(5) (8)
Carlos M. de la Cruz Common Stock 220,000 (8)
Stuart A. Miller Common Stock 422,934(3) 1.80%
Steven J. Saiontz Common Stock 232,166(3)(6) (8)
Jeffrey P. Krasnoff Common Stock 81,663 (8)
Mark A. Griffith Common Stock 22,436(7) (8)
David G. Levin Common Stock 21,535 (8)
David O. Team Common Stock 15,082 (8)
Directors and Executive Class B Common Stock 9,897,930 98.40%
Officers as a Group Common Stock 1,142,213 4.86%
(17 persons)
</TABLE>
- ---------------
(1) Includes currently exercisable stock options and stock options which become
exercisable within sixty days after January 28, 2000 as follows: Stuart A.
Miller (346,029), Steven J. Saiontz (130,431), Jeffrey P. Krasnoff (78,393),
Mark A. Griffith (19,984), David G. Levin (17,681), David O. Team (14,600)
and all directors and executive officers as a group (674,054). Also includes
shares held by the LNR Property Corporation Savings 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 a limited partnership. A corporation
wholly-owned by Mr. Miller is the sole general partner of that partnership.
The limited partners consist of Mr. Miller, his wife and a trust of which
Mr. Miller is the primary beneficiary. This does not include 46,000 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 Steven Saiontz's wife
are beneficiaries, of a trust which holds limited partnership interests in a
partnership which owns 9,897,930 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 9,897,930 shares and neither
Stuart Miller nor Steven Saiontz is shown as a beneficial owner of those
shares.
(4) Includes 415 shares owned by Brian Bilzin's wife as to which he has no
voting or investment power and 1,405 shares owned by Brian 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 a family limited partnership in
which Sue Cobb has approximately a 19% limited partnership interest and in
which her husband has approximately a 81% general partnership interest. Sue
Cobb does not have voting or investment power with respect to these shares.
(6) Does not include 9,000 shares held in a trust for Steven Saiontz's wife.
(7) Includes five shares owned by Mark Griffith's son as to which he shares
voting and investment power.
(8) Less than 1%.
3
<PAGE> 6
Because each outstanding share of Class B Common Stock is entitled to ten
votes, Leonard Miller, through the family partnership, will be entitled to
98,989,567 votes, which will be 79.77% 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 99,912,713 votes, which will be
80.51% of the combined votes which may be cast by all the holders of Common
Stock and Class B Common Stock as of the record date.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Compliance with Section 16(a) of the Exchange Act requires the Company's
directors, executive officers, and persons owning more than 10% of the Company's
Common Stock to file with the Securities and Exchange Commission and New York
Stock Exchange initial reports of ownership of Common Stock and other equity
securities of the Company on Form 3 and reports of changes in such ownership on
Forms 4 or 5. Directors, executive officers and persons owning more than 10% of
the Company's Common Stock are required to furnish the Company with copies of
all Section 16(a) reports they file.
To the Company's knowledge, based solely on a review of the copies of the
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended November 30, 1999, the
Company's directors and executive officers complied with all applicable Section
16(a) filing requirements, except that one such report covering one transaction
was filed late by Carlos de la Cruz.
ELECTION OF DIRECTORS
The persons listed below will be nominated to serve as directors. If the
stockholders approve the proposal to divide the directors into three classes
(see "Proposal Regarding Classified Board"), the term of each director will end
at the Annual Meeting of Stockholders shown opposite his or her name. If the
stockholders do not approve that proposal, the terms of all the directors will
end at the next Annual Meeting of Stockholders.
<TABLE>
<CAPTION>
NAME OF DIRECTOR AGE DIRECTOR SINCE ANNUAL MEETING AT WHICH TERM ENDS(1)
- ---------------- --- -------------- ------------------------------------
<S> <C> <C> <C>
Leonard Miller (2) 67 1997 2001
Brian L. Bilzin 54 1997 2001
Steven J. Saiontz (2) 41 1997 2002
Sue M. Cobb 62 1997 2002
Jeffrey P. Krasnoff 44 1997 2003
Stuart A. Miller (2) 42 1997 2003
Carlos M. de la Cruz 58 1997 2003
</TABLE>
- ---------------
(1) If the stockholders do not approve the proposal to divide the directors into
three classes (see "Proposal Regarding Classified Board"), the terms of all
the directors will end at the 2001 Annual Meeting of Stockholders.
(2) Executive Committee Member.
Leonard Miller is the Chairman of the Board of Lennar Corporation
("Lennar"). He was one of the founders of Lennar and from the time Lennar was
founded in 1969 until April 1997, Mr. Miller was the President and Chief
Executive Officer of Lennar. He is Chairman of the South Florida Annenberg
Challenge, Chairman of the Board of Union Bank of Florida and a Life Trustee at
the University of Miami. Mr. Miller is the father of Stuart A. Miller and the
father-in-law of Steven J. Saiontz.
4
<PAGE> 7
Brian L. Bilzin is, and since February 1, 1998 has been, a partner in the
law firm of Bilzin Sumberg Dunn Price & 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.
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, LLC 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
which she was affiliated from 1978 until January 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 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.
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).
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. Mr. Miller is currently a Director of
Lennar. He is the son of Leonard Miller and the brother-in-law of Steven J.
Saiontz.
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. In 1999, Mr. de la Cruz was elected Chairman
of the Board of Trustees of the University of Miami.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE NAMED
NOMINEES AS DIRECTORS.
5
<PAGE> 8
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 five additional executive officers who together comprised
the six highest paid executive officers of the Company for the year ended
November 30, 1999:
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 (1)(5)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) OPTIONS(4) ($) ($)
- ------------------------------------- ---- --------- -------- ------------ ---------- ---------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stuart A. Miller 1999 200,000 388,000 0(3) 0 0 0
Chairman of the Board 1998 200,000 304,800 0(3) 0 0 0
1997 16,667 0 0(3) 100,000 0 248
Steven J. Saiontz 1999 510,000 776,000 0 0 0 6,318
Chief Executive Officer 1998 510,000 609,600 1,600 0 0 4,045
1997 17,400 0 133 389,083 0 418
Jeffrey P. Krasnoff 1999 501,250 388,000 0 70,000 233,800 6,318
President 1998 402,000 304,800 1,600 0 165,700 4,260
1997 13,800 340,300 133 273,988 102,200 426
David G. Levin 1999 225,000 271,600 0 26,250 121,800 6,318
Vice President 1998 175,000 263,300 1,600 0 90,000 4,260
1997 8,800 208,800 133 102,128 60,300 152
Mark A. Griffith 1999 246,600 289,000 0 26,250 103,000 6,310
Vice President 1998 175,000 227,000 1,600 0 69,200 2,610
1997 9,300 169,000 133 98,018 37,600 232
David O. Team 1999 282,200 271,600 0 26,250 61,400 6,216
Vice President 1998 200,000 213,300 1,600 0 29,600 4,260
1997 11,250 158,800 133 87,331 0 262
</TABLE>
- ---------------
(1) The salary, restricted stock awards and LTIP payout amounts shown for 1999
and 1998 reflect compensation earned by the named officer for the twelve
months ended November 30, 1999 and 1998, respectively. The bonus amounts
shown for 1999 and 1998 reflect compensation earned by the named officer for
the twelve months ended November 30, 1999 and 1998 but not yet paid. Payment
of such amount is (or was) conditioned on the officer's continuing to be
employed by the Company in April 2000 and 1999. The salary, restricted stock
awards and all other compensation shown for 1997 reflect only one month, as
compensation for the other eleven months was paid by Lennar. The bonus and
LTIP payouts shown for 1997 include the full year as the amounts were paid
by LNR, with the exception of Stuart A. Miller and Steven J. Saiontz, each
of whose bonus was paid by Lennar in its entirety. Pursuant to an amendment
to and renaming of the LNR Property Corporation Savings Plan, effective
January 1, 1999 the Employee Stock Ownership Plan ("ESOP") component of the
plan was dissolved and therefore there were no grants of restricted stock
awards under this plan in 1999.
(2) At November 30, 1999, a total of 21,384 restricted shares of Common Stock
(all of which are vested), with an aggregate market value of $377,000 on
that day, were held in employees' accounts under the LNR Property
Corporation Savings Plan. Holders of these shares are entitled to the
dividends on the shares. The restricted shares outstanding on November 30,
1999 included 1,936 shares of Common Stock in Steven J. Saiontz's account
(with a market value on that day of $34,132), 399 shares of Common Stock in
Jeffrey P. Krasnoff's account (with a market value on that day of $7,034),
354 shares of Common Stock in David G. Levin's account (with a market value
on that day of $6,241), zero shares of Common Stock in Mark A. Griffith's
account and 82 shares of Common Stock in David O. Team's account (with a
market value on that day of $1,446). Pursuant to an amendment to the plan,
effective
6
<PAGE> 9
January 1, 1999, all shares held in employees' accounts under the plan
became fully vested for employees employed by the Company on December 31,
1998.
(3) Stuart A. Miller does not participate in the LNR Property Corporation
Savings Plan, term life insurance plan or short-term and long-term
disability insurance plans.
(4) In December 1998, the Company provided employees with the opportunity to
surrender some or all of their stock options in exchange for options to
purchase 30% fewer shares at a lower price. See "Ten Year Option/SAR
Repricings" table.
(5) Consisting of (1) matching payments by LNR under the 401(k) aspect of its
Savings Plan and (2) term life insurance premiums and short-term and
long-term disability insurance premium payments made by the Company for
1999, 1998 and for the month of November 1997 as follows:
<TABLE>
<CAPTION>
SHORT-TERM LONG-TERM
TERM LIFE DISABILITY DISABILITY
401(K) MATCH INSURANCE INSURANCE INSURANCE
($) ($) ($)(6) ($)
------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Stuart A. Miller 1999 0(3) 0(3) 0(3) 0(3)
1998 0(3) 0(3) 0(3) 0(3)
1997 0(3) 200 0 48
Steven J. Saiontz 1999 4,800 858 120 540
1998 2,285 1,260 0 500
1997 200 184 0 34
Jeffrey P. Krasnoff 1999 4,800 858 120 540
1998 2,500 1,260 0 500
1997 200 184 0 42
David G. Levin 1999 4,800 858 120 540
1998 2,500 1,260 0 500
1997 0 108 0 42
Mark A. Griffith 1999 4,800 850 120 540
1998 850 1,260 0 500
1997 67 117 0 42
David O. Team 1999 4,800 756 120 540
1998 2,500 1,260 0 500
1997 100 120 0 42
</TABLE>
- ---------------
(6) Effective January 1, 1999, short-term disability insurance was added as a
benefit for all associates employed by LNR Property Corporation.
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 day of each
Annual Meeting of Stockholders, each outside director is granted an option to
purchase 1,000 shares of Common Stock at the market price on that day. Each
option becomes exercisable on the one year anniversary of the grant date and
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 Committee of the Board. Directors who are employees of the Company
receive no additional remuneration for services as directors.
Brian L. Bilzin is a partner in the law firm of Bilzin Sumberg Dunn Price &
Axelrod LLP, which firm was retained by the Company during the fiscal years
ended November 30, 1999 and 1998 and received fees during
7
<PAGE> 10
those years totalling $1,587,988 and $1,568,851, respectively. Additionally, in
1999, Madison Square Company LLC, a partnership which the Company has a 25.8%
ownership interest in and provides management services for, paid $1,280,145 to
this law firm. The Company expects to retain this law firm again during the
current fiscal year. Until February 1, 1998, Mr. 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, 1998.
The following table sets forth information about sums awarded to four of
the six highest paid executive officers of the Company for the year ended
November 30, 1999 under long-term incentive arrangements:
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 388,000
David G. Levin 1-5 Years Not Applicable Not Applicable 271,600
Mark A. Griffith 1-5 Years Not Applicable Not Applicable 289,000
David O. Team 1-5 Years Not Applicable Not Applicable 271,600
</TABLE>
- ---------------
(1) This amount is payable in five equal annual installments conditioned on the
officer's continuing to be employed by the Company.
The following table sets forth information about options granted to the six
highest paid executive officers of the Company for the year ended November 30,
1999:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(2)
-----------------------------------------------
PERCENT OF
NUMBER TOTAL POTENTIAL REALIZED VALUE AT
OF OPTIONS ASSUMED ANNUAL RATES OF STOCK
SECURITIES GRANTED TO APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES TERM(1)
OPTIONS IN FISCAL EXERCISE EXPIRATION ------------------------------
NAME GRANTED YEAR PRICE DATE 5% 10%
- ---- ---------- ---------- -------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stuart A. Miller 0 0 $ 0 -- $ 0 $ 0
Steven J. Saiontz 0 0 $ 0 -- $ 0 $ 0
Jeffrey P. Krasnoff 70,000 15.08% $17.31 12/14/07 $668,143 $1,645,665
David G. Levin 26,250 5.65% $17.31 12/14/07 $250,554 $ 617,124
Mark A. Griffith 26,250 5.65% $17.31 12/14/07 $250,554 $ 617,124
David O. Team 26,250 5.65% $17.31 12/14/07 $250,554 $ 617,124
</TABLE>
- ---------------
(1) Measured from date of grant (December 15, 1998) on which date the average of
the high and low market price of the Common Stock was $17.31.
(2) In December 1998, the Company provided employees with the opportunity to
surrender some or all of their stock options in exchange for options to
purchase 30% fewer shares at a lower price. See "Ten Year Option/SAR
Repricings" table. Vesting of options begins immediately for 10% of the
shares granted and has step vesting of 10% per year for years one through
eight and 20% for year nine.
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, 1999 and
option/SAR values as of the end of that year for the six highest paid 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(1) YEAR-END(1)
SHARES ---------------- ----------------
ACQUIRED ON VALUE EXERCISABLE(E)/ EXERCISABLE(E)/
NAME EXERCISE REALIZED UNEXERCISABLE(U) UNEXERCISABLE(U)
- ---- ----------- -------- ---------------- ----------------
<S> <C> <C> <C> <C>
Stuart A. Miller 0 $0 24,029(E) $ 0(E)
Chairman of the Board(2) 75,971(U) $ 0(U)
Steven J. Saiontz 0 $0 130,431(E) $ 1,233,931(E)
Chief Executive Officer 258,652(U) $ 1,346,107(U)
Jeffrey P. Krasnoff 0 $0 60,295(E) $ 362,606(E)
President 183,693(U) $ 460,190(U)
David G. Levin 0 $0 14,645(E) $ 26,769(E)
Vice President 76,233(U) $ 143,103(U)
Mark A. Griffith 0 $0 16,948(E) $ 42,774(E)
Vice President 69,820(U) $ 112,449(U)
David O. Team 0 $0 11,975(E) $ 8,026(E)
Vice President 64,106(U) $ 48,206(U)
</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 30, 1999.
(2) 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.
9
<PAGE> 12
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 met two times in fiscal 1999. 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 plans,
reports and staffing of the Company's Internal Audit Department.
The Compensation Committee consists of Messrs. Leonard Miller and Brian L.
Bilzin. This Committee met once in fiscal 1999. 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 SAR's, under the LNR Property Corporation 1997 Stock Option Plan,
set the terms of these options and SARs and administer the plan. The Officers
and Directors Stock Option Committee did not meet during 1999. The Stock Option
Committee acted by written consent on several occasions during 1999 but did not
formally meet.
The Company's by-laws require that any significant transactions it has with
Lennar or its subsidiaries, including significant decisions regarding Lennar
Land Partners (of which the Company and Lennar each own 50%), be approved by an
Independent Directors Committee, which consists entirely of members of the Board
who are not directors, officers or employees of Lennar. The members of the
Independent Directors Committee are Ms. Sue M. Cobb and Messrs. Carlos M. de la
Cruz and Brian L. Bilzin. The Independent Directors Committee met twice during
1999.
The Board normally holds meetings quarterly, but holds additional special
meetings when required. During fiscal 1999, the Board met six 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 and at least three-fourths
of the total number of meetings of all committees of the Board on which he or
she served.
10
<PAGE> 13
PROPOSAL REGARDING CLASSIFIED BOARD
The Board of Directors has adopted a resolution proposing that a new
Article FIFTH be added to the Company's Certificate of Incorporation, providing
that the directors will be divided into three classes, with as nearly as
possible the same number of directors in each class, and with the directors in
one class to be elected at each Annual Meeting of Stockholders to serve for
three year terms (except that at the 2000 Annual Meeting, the directors of one
class will be elected to serve for one year terms, the directors of a second
class will be elected to serve for two year terms and the directors of a third
class will be elected to serve for three year terms). If the stockholders
approve the amendment to the Certificate of Incorporation, there will be
conforming amendments to the Company's by-laws. A copy of the proposed new
Article FIFTH of the Certificate of Incorporation is Exhibit A to this Proxy
Statement.
The Board of Directors believes classification of the Board of Directors is
important to ensure continuity in the oversight and management of the Company.
It would avoid the possibility that a Board would be elected which would consist
entirely of people who have no background or experience regarding the Company.
If the stockholders approve the proposed amendment to the Certificate of
Incorporation, in order to divide the directors into three classes, two of the
directors elected at the 2000 Annual Meeting of Stockholders will serve until
the 2001 Annual Meeting, two of the directors will serve until the 2002 Annual
Meeting and three of the directors will serve until the 2003 Annual Meeting. See
"Election of Directors." In subsequent years, directors will be elected for
three year terms, so the terms of the directors of one class will expire at each
Annual Meeting.
A classified Board of Directors could delay for more than a year the time
by which somebody seeking to acquire the Company could take control of the Board
of Directors without the approval and assistance of the existing directors. That
could deter somebody from seeking to acquire the Company without approval of its
Board of Directors. However, Leonard Miller holds shares of Class B Common Stock
which entitle him to cast approximately 80% of the votes which may be cast with
regard to the election of directors. While Mr. Miller's shares entitle him to at
least a majority of the votes which may be cast in an election of directors,
nobody could take control of the Board of Directors without Mr. Miller's
approval, even if the Company did not have a classified Board of Directors.
Further, the Board of Directors believes that, even if Mr. Miller were not
entitled to a majority of the votes which could be cast in an election of
directors, the fact that it would take somebody who is seeking to acquire the
Company more than a year to obtain control of the Board unless the Board
approved the acquisition would be more likely to lead that person to discuss
with the Board the terms on which the person might acquire the Company than it
would be to deter the person from seeking to acquire the Company.
REQUIRED VOTE
Approval of the amendment to the Certificate of Incorporation requires the
affirmative vote of a majority of the votes which may be cast by holders of
shares which were outstanding on February 15, 2000. Leonard Miller who, through
a family partnership, owns 98.4% of the Class B Common Stock and therefore is
entitled to cast approximately 79.8% of the votes which may be cast with regard
to approval of the amendment, has said he intends to vote in favor of the
amendment to the Certificate of Incorporation. Therefore, if there is a quorum
present at the meeting, the amendment 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.
11
<PAGE> 14
PROPOSAL RELATING TO STOCK OPTION AND RESTRICTED STOCK PLAN
On February 11, 2000, the Board of Directors adopted the LNR Property
Corporation 2000 Stock Option and Restricted Stock Plan (the "Plan"). A copy of
the Plan is attached as Exhibit B to this Proxy Statement. Stockholders will be
asked at the meeting to vote on a proposal to approve the Plan.
The Company already has a stock option plan, the LNR Property Corporation
1997 Stock Option Plan (the "1997 Plan"), under which the Company is authorized
to grant stock options relating to a total of up to 2,000,000 shares of Common
Stock. At February 11, 2000, options relating to 1,759,053 shares of Common
Stock were outstanding under the 1997 Plan, which meant the Company could only
issue additional options related to 240,947 shares of Common Stock under the
1997 Plan.
The Company's Board of Directors believes stock options are important to
the Company's efforts to attract and retain key employees. They are particularly
important because a substantial portion of the Company's business involves
analyzing and pricing complex real estate related financial products or
commercial properties, and there are relatively few people who have the skills,
training and background to be able to do this well. The Company believes most of
the people who have the qualifications the Company seeks find equity interests
in the Company an important inducement to become and remain employed by the
Company. The Company believes the number of shares which remain available under
the 1997 Plan is too small for the Company's key employee recruitment and
retention needs. The Company wishes to amend and restate the 1997 Plan in order
to (i) increase the number of shares of Common Stock available to be awarded and
(ii) include awards of restricted stock to key employees and directors of the
Company. The awards of restricted stock will be subject to vesting periods and,
if a key employee's compensation is subject to Section 162(m) of the Internal
Revenue Code (generally limiting the tax-deductibility of compensation to
certain executives to $1,000,000 per year), performance goals, in order to
retain key employees and directors and to give those key employees and directors
an incentive to be realized over time.
If the Company's stockholders approve the Plan, the Company will have
2,240,947 shares of Common Stock available for issuance under the Plan, which
includes: 1) the 240,947 shares remaining under the 1997 Plan and 2) an
additional 2,000,000 shares.
DESCRIPTION OF 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 judgment,
initiative and efforts the Company and its subsidiaries largely depend for the
successful conduct of their business to acquire equity 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 with the Company or its subsidiaries.
Under the Plan, the Compensation Committee, the Officers and Directors
Stock Option Committee, or such other committee of the Board of Directors as is
specified by the Board of Directors to perform the functions and duties under
the Plan ("the Committee"), may grant stock options, separately or together with
stock appreciation rights, and awards of restricted stock, relating to up to
2,240,947 shares of Common Stock (subject to adjustment to take account of stock
dividends, stock splits, recapitalizations and similar corporate events). If an
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"), which receive special tax treatment, as described below
under "Tax Consequences." In order to be eligible to be treated as an ISO for
tax purposes, an option must meet certain requirements, including that the
recipient be an employee, that the exercise price generally be at least 100% of
the fair market value of the Common Stock on the date of grant, that the term
12
<PAGE> 15
generally not exceed ten years, and that the exercise price of all ISO's held by
the person to whom it is granted which first become exercisable in a year not
exceed $100,000.
The Committee 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. The exercise price
of an option will be determined by the Committee 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 that are ISOs, and options intended to satisfy the exception
for performance-based compensation under Section 162(m) of the Internal Revenue
Code will have an exercise price of not less than 100% of the fair market value
of the Common Stock on the date the option is granted. An ISO granted to a
person who beneficially owns 10% or more of the Company's stock must have a term
of not more than five years and an exercise price equal to at least 110% of the
market price on the date of grant. Because Stuart A. Miller is Leonard Miller's
son, he is treated as owning more than 10% of the Company's stock. 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. No officer, employee or director may receive options under the Plan
relating to more than 750,000 shares of Common Stock in any fiscal year.
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 options
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.
The Committee may issue awards of restricted stock to officers, employees
and directors of the Company. Restricted stock is subject to vesting periods and
performance goals which will be established by the Committee. Grantees of
restricted stock will be entitled to the restricted stock upon the expiration of
the vesting period, or if an employee's compensation is subject to Section
162(m) of the Internal Revenue Code, the later of the expiration of the vesting
period and the attainment of the performance goals, with respect to those
shares. Awards of restricted stock may be assigned or transferred only with the
permission of the Committee, given after a determination that transferability is
appropriate and desirable. No officer, employee or director may receive awards
of more than 500,000 shares of restricted stock under the Plan in any fiscal
year.
13
<PAGE> 16
The following table provides information about the options which were
outstanding under the 1997 Plan on November 30, 1999:
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK AVERAGE PER SHARE
INDIVIDUAL OR GROUP HOLDING SUBJECT TO OPTIONS EXERCISE PRICE
- --------------------------- ---------------------- -----------------
<S> <C> <C>
Stuart A. Miller 100,000 $25.31
Steven J. Saiontz 389,083 $14.69
Jeffrey P. Krasnoff 243,988 $17.20
David G. Levin 90,878 $18.72
Mark A. Griffith 86,768 $18.94
David O. Team 76,081 $20.43
All executive officers 1,287,059 $18.13
All directors who are not executive officers 5,700 $22.39
All employees other than executive officers 228,044 $18.38
</TABLE>
On February 11, 2000, the last sale price of the Common Stock reported on
the New York Stock Exchange was $18.00.
TAX CONSEQUENCES
The principal Federal income tax consequences to an officer, employee or
director of (i) the grant and exercise of options under the Plan, and of the
sale of shares acquired through exercise of options and (ii) the grant of
restricted stock, 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 short-term or long-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 held by
the person who exercised the option. 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
14
<PAGE> 17
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.
Unless a holder of restricted stock makes an "83(b) election" (as discussed
below), there generally will be no tax consequences as a result of the award of
restricted shares until the restricted shares are no longer subject to a
substantial risk of forfeiture or are transferable (free of such risk). The
Company intends that, generally, when the restrictions are lifted, the holder
will recognize ordinary income, and the Company will be entitled to a deduction,
equal to the difference between the fair market value of the shares at such time
and the amount, if any, paid by the holder of restricted shares. Subsequently
realized changes in the value of the stock generally will be treated as
long-term or short-term capital gain or loss, depending on the length of time
the shares are held prior to disposition of such shares. In general terms, if a
holder makes an "83(b) election" (under Section 83(b) of the Internal Revenue
Code) upon the award of restricted shares, the holder will recognize ordinary
income on the date of the award of restricted shares, and the Company will be
entitled to a deduction, equal to (i) the fair market value of the restricted
shares as though the shares were (A) not subject to a substantial risk of
forfeiture or (B) transferable, minus (ii) the amount, if any, paid for the
restricted shares. If an "83(b) election" is made, there will generally be no
tax consequences to the holder upon the lifting of restrictions, and all
subsequent appreciation in the restricted shares generally would be eligible for
capital gains treatment.
REQUIRED VOTE
Approval of the Plan requires the affirmative vote of a majority of the
votes which are cast with regard to the proposal to approve the Plan. Leonard
Miller who, through a family partnership, owns 98.4% of the Class B Common Stock
and therefore is entitled to cast approximately 79.8% 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.
15
<PAGE> 18
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors presents this report
to describe the compensation policies it applied with regard to the Company's
executive officers for fiscal 1999 and the basis for the compensation of Steven
J. Saiontz, the Chief Executive Officer of the Company and Jeffrey P. Krasnoff,
the President of the Company.
Each year, the Compensation Committee reviews the compensation of each of
our associates (i.e., employees) and each associate of our subsidiaries whose
compensation for the previous year exceeded a specified level. This review
includes salary for the prior year, the bonus earned in the prior year and
management's recommendations as to salary and bonus formulae for the following
year.
The bonus formulae which our management recommends vary depending on
particular associates' positions and other factors. Bonuses for division
presidents and associates in similar capacities often are a percentage of the
consolidated net earnings of the Company and its subsidiaries for a year, before
income taxes, but after giving credit for tax credits and benefits from the
affordable housing business. Bonuses for other associates are based on a
percentage of their salary, the percentage being based on the amount of
consolidated net earnings of the Company and its subsidiaries for the year,
before income taxes, but after giving credit for tax credits and benefits from
the affordable housing business.
The Compensation Committee almost always accepts our management's
recommendations as to all but our highest paid officers. This is because our
management is far more familiar than anyone on the Compensation Committee with
the individual associates, with prevailing levels of compensation in areas in
which particular associates work and with other factors affecting compensation
decisions. The Compensation Committee believes that its review of the
compensation of everyone who has received more than a specified amount per year
has helped ensure that management's compensation decisions have been made
responsibly.
The Compensation Committee reviews in greater depth the recommendations
regarding the Chief Executive Officer, the President and our other most highly
paid executive officers. The review has included proposed salaries and bonus
formulae.
At its December 1998 meeting, the Compensation Committee discussed the
proposed compensation of 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. The 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, 1999, Mr. Saiontz and Mr. Krasnoff each would be paid a base salary
of $500,000 plus a bonus equal to 0.50% of the consolidated net earnings of the
Company and its subsidiaries for that year, before income taxes, but after
giving credit for tax credits and benefits from the affordable housing business.
The 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, 1999 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
16
<PAGE> 19
equal to 0.25% of the consolidated net earnings of the Company and its
subsidiaries for that year, before income taxes, but after giving credit for tax
credits and benefits from the affordable housing business.
The proposed compensation of Steven J. Saiontz, the Chief Executive Officer
of the Company, and Jeffrey P. Krasnoff, the President of the Company, as well
as the recommendations for the salary and bonuses for the other executive
officers of the Company and its subsidiaries, were reviewed with and approved by
the Company's outside directors.
The Company's Board of Directors believes stock options are important to
the Company's efforts to attract and retain key employees. The Company believes
most of the people who have the qualifications the Company seeks find equity
interests in the Company an important inducement to become and remain employed
by the Company. For these reasons, the Board decided in December 1998 to offer
all employees of the Company the opportunity to surrender some or all of their
stock options in exchange for options to purchase 30% fewer shares at a lower
exercise price. The Board determined that the options had largely lost the
incentive they were designed to create because their original exercise price
reflected market conditions which had since declined. The Board decided that a
lower exercise price of $17.31 (which was the market price of the Company's
common stock at the date of repricing, and below the previous exercise price of
$24.82) would enhance the incentive value of the options and encourage many of
the Company's most valuable employees to stay with the Company in a competitive
market.
17
<PAGE> 20
The following table sets forth the option repricings for the last ten years
for all persons who were executive officers at the time of such repricings.
TEN YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF MARKET ORIGINAL
SECURITIES PRICE EXERCISE OPTION TERM
UNDERLYING OF STOCK PRICE AT NEW REMAINING AT
OPTIONS AT TIME OF TIME OF EXERCISE DATE OF
NAME DATE REPRICED REPRICING REPRICING PRICE REPRICING
- ---- -------- ---------- ------------ --------- -------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey P. Krasnoff 12/15/98 70,000 $17.31 $24.82 $17.31 8 yrs; 11 months
President
Shelly Rubin 12/15/98 26,250 $17.31 $24.82 $17.31 8 yrs; 11 months
Vice President and Chief Financial
Officer
Michelle R. Simon 12/15/98 7,000 $17.31 $24.82 $17.31 8 yrs; 11 months
Former Secretary and Corporate Counsel
Robert Cherry 12/15/98 36,750 $17.31 $24.82 $17.31 8 yrs; 11 months
Vice President
Steven I. Engel 12/15/98 17,500 $17.31 $24.82 $17.31 8 yrs; 11 months
Vice President
Mark A. Griffith 12/15/98 26,250 $17.31 $24.82 $17.31 8 yrs; 11 months
Vice President
David G. Levin 12/15/98 26,250 $17.31 $24.82 $17.31 8 yrs; 11 months
Vice President
Ronald E. Schrager 12/15/98 26,250 $17.31 $24.82 $17.31 8 yrs; 11 months
Vice President
David O. Team 12/15/98 26,250 $17.31 $24.82 $17.31 8 yrs; 11 months
Vice President
Margaret A. Jordan 12/15/98 3,500 $17.31 $24.82 $17.31 8 yrs; 11 months
Treasurer and Secretary
John T. McMickle 12/15/98 7,000 $17.31 $24.82 $17.31 8 yrs; 11 months
Former Corporate Controller
</TABLE>
LEONARD MILLER
BRIAN L. BILZIN
18
<PAGE> 21
PERFORMANCE GRAPH
The following graph compares the two year cumulative total return of the
Company's Common Stock, assuming reinvestment of dividends, with the Standard
and Poors 500 Index, the Russell 2000 Index, the Morgan Stanley REIT Index and
the NAREIT Mortgage Real-Time Index.
In previous Proxy Statements, the total cumulative return of the Company's
Common Stock was compared to a peer group which included Amresco, Inc., Criimi
Mae, Inc. and Ocwen Financial Corporation. For the current year, the Company has
selected the indices mentioned above for a basis of comparison because Criimi
Mae, Inc. is in bankruptcy and because of a change in business strategy with the
other two companies.
COMPARISON OF CUMULATIVE TOTAL RETURN
12/1/97 -- 11/30/99
(12/1/97 = 100)
<TABLE>
<CAPTION>
12/01/97 2/27/98 5/29/98 8/31/98 11/30/98 2/26/99 5/31/99 8/31/99 11/30/99
-------- ------- ------- ------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LNR Property Corporation $100.00 $111.20 $107.81 $64.58 $ 81.25 $ 75.78 $ 83.33 $ 77.60 $ 73.44
S&P 500 Index $100.00 $107.65 $111.91 $98.21 $119.37 $127.04 $133.55 $135.46 $142.49
Russell 2000 Index $100.00 $106.37 $105.17 $77.84 $ 91.61 $ 90.35 $101.04 $ 98.54 $104.59
Morgan Stanley REIT Index $100.00 $ 98.66 $ 96.57 $81.30 $ 86.00 $ 81.17 $ 90.12 $ 84.83 $ 78.25
NAREIT Mortgage Real-Time Index $100.00 $ 97.95 $ 94.19 $73.49 $ 78.23 $ 63.33 $ 74.26 $ 54.49 $ 43.75
</TABLE>
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, 1999. 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.
19
<PAGE> 22
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, 2000.
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 12, 2000 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 17, 2000.
By Order of the Board of Directors
MARGARET A. JORDAN
Secretary
Dated: March 17, 2000
20
<PAGE> 23
EXHIBIT A
PROPOSED NEW ARTICLE FIFTH OF THE CERTIFICATE OF INCORPORATION
FIFTH: The business of the Corporation will be managed by a Board of
Directors consisting of not fewer than three nor more than twenty persons, with
the exact number to be determined from time to time in accordance with the
By-Laws. The Board of Directors will be divided into three classes, each of
which will have the highest whole number of directors obtained by dividing the
number of directors constituting the entire Board by three, with any additional
directors allocated, one to a class, to the classes designated by the Board of
Directors. The directors of each class will serve for terms of three years, and
until their successors are elected and qualified, or with regard to any
particular director, until that director's earlier death or resignation, except
that as to the directors elected at the first annual meeting of stockholders at
which directors are elected in classes, the terms of the directors of one class
will expire at the next following annual meeting of stockholders, the terms of
the directors of a second class will expire at the second following annual
meeting of stockholders and the terms of the directors of the third class will
expire at the third following annual meeting of stockholders. If there is a
vacancy in any class of directors, including a vacancy because of a newly
created directorship, the person elected to fill that vacancy will serve until
the next election of the directors of that class and until that person's
successor is elected and qualified.
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EXHIBIT B
LNR PROPERTY CORPORATION
2000 STOCK OPTION
AND RESTRICTED STOCK PLAN
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
1. Purpose of the Plan......................................... 24
2. Definitions................................................. 24
3. Authority to Grant Stock Options............................ 25
4. Authority to Grant Stock Appreciation Rights................ 26
5. Authority to Grant Restricted Stock......................... 26
6. Terms and Conditions of Stock Options....................... 26
7. Terms and Conditions of Restricted Stock.................... 27
8. Payment of Option Exercise Price............................ 29
9. Withholding Payment......................................... 29
10. Written Agreement........................................... 29
11. Administration of the Plan.................................. 30
12. Shares Available for Options................................ 30
13. Laws and Regulations........................................ 31
14. Modification of Numbers of Shares and Other Securities...... 31
15. Effects of Termination of Employment........................ 31
16. No Rights to Continued Employment........................... 33
17. Rights as a Shareholder..................................... 33
18. Effective Date.............................................. 33
19. Amendments of the Plan...................................... 34
20. Termination of the Plan..................................... 34
21. Governing Law............................................... 34
</TABLE>
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LNR PROPERTY CORPORATION
2000 STOCK OPTION AND RESTRICTED STOCK 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. The Plan is an amendment and complete restatement of the 1997 Stock
Option Plan and provides, in addition, to the granting of stock options, for the
granting of Restricted Stock.
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 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) "Grantee" means a person who holds a stock option, Stock
Appreciation Right or Restricted Stock granted under the Plan.
(j) "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.
(k) "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.
(l) "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
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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.
(m) "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.
(n) "LNR" means LNR Property Corporation, a Delaware corporation, or
its successor by merger or any similar transaction.
(o) "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.
(p) "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.
(q) "Plan" means this LNR Property Corporation 2000 Stock Option and
Restricted Stock Plan.
(r) "Restricted Stock" means Common Stock granted under the terms of
the Plan, which are subject to the restrictions hereunder.
(s) "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).
(t) "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. However, the aggregate number of options
granted to any Grantee in any fiscal year may not exceed 750,000. They may at
their discretion, grant Assumed Options to Grantees 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. Stock options granted under the
Plan 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,
and (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. 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 a Grantee 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 Grantee which remain unexercised.
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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 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 Grantee, 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 Grantee 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) 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 15.
5. AUTHORITY TO GRANT RESTRICTED STOCK
The Committee or the Officers and Directors Stock Option Committee may at
any time authorize the grant of Restricted Stock under the Plan to any one or
more Key Employees or Directors. However, the aggregate number of shares of
Restricted Stock granted to a Key Employee or Director in any fiscal year shall
not exceed 500,000.
6. 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. In the case of new Assumed Options granted to a Grantee in
replacement in accordance with Section 424 of the Code for options held by
the Grantee, the new options may be made exercisable, if so determined by
the
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Committee or the Officers and Directors Stock Option Committee, in its
discretion, at the earliest date the replaced options were available.
(ii) Each Assumed Option issued in substitution for a Lennar Option
will be exercisable 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,
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, except
that a stock option intended to qualify for an exemption under Section
162(m) of the Code, shall have an exercise price of not less than 100% of
the fair market value of the Common Stock on the date the stock option is
granted. 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 exercise 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 15 upon the death of the Grantee
to whom the stock option was granted; provided, however, that the Committee or
the Officers and Directors Stock Option Committee, may (but need not) permit
other transfers, where the Committee or the Officers and Directors Stock Option
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.
7. TERMS AND CONDITIONS OF RESTRICTED STOCK
(a) Performance Goals: The Committee or the Officers and Directors Stock
Option Committee, in its Discretion, shall in the case of grants of Restricted
Stock intended to qualify for an exception from the limitation imposed by
Section 162(m) of the Code (i) establish one or more performance goals
("Performance Goals") as a precondition to the grant of Restricted Stock awards,
and (ii) provide, in connection with the establishment of the Performance Goals,
for predetermined grants of specified numbers of shares of Restricted Stock to
those Grantees (who continue to meet all applicable eligibility requirements)
with respect
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to whom the applicable Performance Goals are satisfied; provided, however, that
the Officers and Directors Stock Option Committee shall retain the discretion to
reduce the number of shares subject to the Restricted Stock grant prior to the
award. The Performance Goals shall be based upon the achievement of (i) a
specified level, of (x) the Company's consolidated pre-tax or after-tax earnings
or EBITDA or (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,
(ii) the 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 assets or groups
of assets or particular employees or groups of employees, or (iii) any
combination of the foregoing. Performance Goals may be absolute amounts or
percentages of amounts or may be relative to the performance of other companies
or of indexes. The Performance Goals shall be established in a timely fashion
such that they are considered preestablished for purposes of the rules governing
performance-based compensation under Section 162(m) of the Code. Prior to the
award of Restricted Stock hereunder, the Officers and Directors Stock Option
Committee shall have certified that any applicable Performance Goals, and other
material terms of the grant, have been satisfied. Notwithstanding the foregoing,
Performance Goals which do not satisfy the foregoing provisions of this Section
7(a) may be established by the Committee or the Officers and Directors Stock
Option Committee with respect to grants of Restricted Stock not intended to
qualify for an exception from the limitations imposed by Section 162(m) of the
Code.
(b) Vesting Periods: In connection with the grant of a Restricted Stock
award, whether or not Performance Goals apply thereto, the Committee or the
Officers and Directors Stock Option Committee shall establish one or more
vesting periods ("Vesting Periods") with respect to the shares of Restricted
Stock granted hereunder, the length of which shall be determined in the
Discretion of the Committee or the Officers and Directors Stock Option
Committee. Subject to the provisions of this Section 7, the Restricted Stock
agreement and the other provisions of the Plan, restrictions on Restricted Stock
shall lapse if the Grantee satisfies all applicable employment or other service
requirements through the end of the applicable Vesting Period.
(c) Assignment: No Restricted Stock granted under the Plan may be assigned
or transferred, other than as provided in Section 15 upon the death of the
Grantee to whom the Restricted Stock was granted; provided, however, that the
Committee or the Officers and Directors Stock Option Committee may (but need
not) permit other transfers, where the Committee or the Officers and Directors
Stock Option Committee concludes that such transferability is appropriate and
desirable.
(d) Certificates: A stock certificate shall be issued with respect to
shares of Restricted Stock awarded under the Plan. Such certificates shall be
registered in the name of the Grantee. The certificates for shares of Restricted
Stock issued hereunder may include any legend which the Committee or the
Officers and Directors Stock Option Committee deems appropriate to reflect any
restrictions on transfer hereunder or under the written agreement, or as the
Committee or the Officers and Directors Stock Option Committee may otherwise
deem appropriate, and, without limiting the generality of the foregoing, shall
bear a legend referring to the terms, conditions, and restrictions applicable to
such award, substantially in the following form:
The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the LNR Property Corporation 2000 Stock Option and
Restricted Stock Plan and a written agreement entered into between the
registered owner and LNR Property Corporation. Copies of such Plan and
agreement are on file in the offices of the LNR Property Corporation at
760 NW 107th Avenue, Suite 300, Miami, Florida, 33172.
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(e) The Committee or the Officers and Directors Stock Option Committee
shall require that the stock certificates evidencing such shares be held in
custody by LNR until the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Stock award, the Grantee shall have delivered a
stock power, endorsed in blank, relating to the stock covered by such award. If
and when such restrictions so lapse, the stock certificates shall be delivered
by LNR to the recipient or his or her designee.
8. 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 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.
9. 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
or as a result of the lapse of restrictions on Restricted Stock (or other income
recognition event, such as an election under Section 83 (b) of the Code), 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 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 or as a condition precedent to issuance of the Restricted
Stock, the Grantee 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.
10. WRITTEN AGREEMENT
Promptly after a stock option, Stock Appreciation Right or Restricted Stock
award is granted under the Plan, LNR will provide the Grantee of that stock
option, Stock Appreciation Right or Restricted Stock with a written agreement
containing the provisions of the stock option, Stock Appreciation Right or
Restricted Stock. 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 Grantee of a stock option, Stock Appreciation Right or
Restricted Stock award granted under the Plan will be bound by the terms of the
Plan and of the agreement relating to the stock option, Stock Appreciation Right
or Restricted Stock.
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11. ADMINISTRATION OF THE PLAN
(a) The Plan will be administered by the Committee or the Officers and
Directors Stock Option Committee. The Officers and Directors Stock Option
Committee shall be authorized to take action under the Plan as it relates to and
in order to comply with Section 162(m) of the Code.
(b) The Committee or the Officers and Directors Stock Option 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 or the
Officers and Directors Stock Option Committee will have full power, in its
Discretion, (i) to grant Incentive Options, Nonqualified Options, Stock
Appreciation Rights or Restricted Stock to any one or more Key Employees or
Directors, as applicable, (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 and (iii) to determine the number of
shares of Restricted Stock granted to any Key Employee or Director and all other
terms of the Restricted Stock.
(d) In exercising its powers under the Plan, the Committee or the Officers
and Directors Stock Option 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 or the Officers
and Directors Stock Option Committee will be binding and conclusive on all
Grantees of stock options, Stock Appreciation Rights or Restricted Stock 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 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, Stock Appreciation Rights or Restricted Stock
granted under the Plan, or for any decision not to grant stock options, Stock
Appreciation Rights or Restricted Stock under the Plan to any officer, employee
or Director of the Company.
12. SHARES AVAILABLE FOR OPTIONS
The aggregate number of shares of Common Stock which may be issued as
Restricted Stock or upon exercise of stock options (including Assumed Options)
or Stock Appreciation Rights granted under this Plan is 4,615,600 shares
(inclusive of the 2,000,000 shares authorized under the Plan as approved on
October 30, 1997), subject to adjustment as provided in Section 14. Any shares
of Restricted Stock or 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 as Restricted Stock or
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 as Restricted Stock or on exercise of
other stock options or Stock Appreciation Rights.
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13. LAWS AND REGULATIONS
The obligation of the Company to issue shares of Stock upon exercise of
stock options or shares of Restricted Stock 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.
14. 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, Stock Appreciation Rights or Restricted Stock which were issued under
the Plan, the Committee or the Officers and Directors Stock Option Committee may
make such modifications in terms of outstanding stock options, Stock
Appreciation Rights or Restricted Stock as in its judgment are appropriate so
the Grantees' rights will be substantially proportionate to the rights existing
prior to the event, and to maintain the continuing availability of shares under
Section 12 (if shares are otherwise then available) including, without
limitation, adjustments in (i) the number and kind of shares subject to stock
options or Restricted Stock, (ii) the exercise price of outstanding stock
options and (iii) the number and kind of shares available under Section 12. To
the extent that such action includes an increase or decrease in the number of
shares subject to outstanding options, Stock Appreciation Rights or Restricted
Stock, the number of shares available under Section 12 above will be increased
or decreased, as the case may be, proportionately. In addition, the limits on
the number of options or Restricted Stock that may be granted to an individual
under Sections 3 and 5 may be adjusted proportionately. The judgment of the
Committee or the Officers and Directors Stock Option Committee with respect to
any matter referred to in this Section 14 will be conclusive and binding upon
each Grantee without the need for any amendment to the Plan or any stock
options, Stock Appreciation Rights or Restricted Stock which had been granted
under the Plan.
15. EFFECTS OF TERMINATION OF EMPLOYMENT
(a) Unless otherwise provided in an individual written agreement pursuant
to Section 10 hereof, each Nonqualified Option and related Stock Appreciation
Right granted under the Plan will terminate when the Grantee ceases to be an
officer, employee or Director of the Company, except that
(i) If a Grantee of a Nonqualified Option dies while an officer,
employee or Director of the Company, each Nonqualified Option and related
Stock Appreciation Right granted under the Plan (or any predecessor) and
held by the Grantee at the date of the Grantee's death shall become fully
vested and may be exercised, by the Grantee's legal representative until 12
months after the date of death.
(ii) If a Grantee of a Nonqualified Option ceases to be an officer,
employee or Director of the Company,
(A) after the Grantee becomes 65 years old,
(B) because of the disability of the Grantee (as determined by the
Committee in its Discretion), or
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(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
Grantee on the date the Grantee ceased to be an officer, employee or Director of
the Company may be exercised, to the extent it was exercisable on the date the
Grantee ceased to be an officer, employee or Director of the Company (or, with
the consent of the Committee or the Officers and Directors Stock Option
Committee in full) until the earlier of (x) three months after the date the
Grantee ceased to be an officer, employee or Director of the Company, or (y) the
date the stock option expires by its own terms.
(b) Unless otherwise provided in an individual written agreement pursuant
to Section 10 hereof, each Incentive Option and related Stock Appreciation Right
granted under the Plan will terminate when the Grantee ceases to be an employee
of the Company (whether or not the Grantee continues to be an officer of the
Company), except that if the Grantee dies while an employee of the Company all
Incentive Options and related Stock Appreciation Rights shall be fully
exercisable, and each Incentive Option and related Stock Appreciation Right held
at the date the Grantee ceases to be an employee of the Company may be exercised
by the Grantee's legal representative until 12 months after the date of death.
Moreover, if the Grantee ceases to be an employee of the Company under a
circumstance described in clause (A), (B) or (C) of subparagraph (a) (ii), the
Grantee may exercise each Incentive Option or related Stock Appreciation Right
to the extent it was exercisable on the date the Grantee ceased to be an
employee of the Company (or, with the consent of the Committee or Directors and
Stock Option Committee in full), until the earlier of (x) three months after the
Grantee ceases to be an employee of the Company or (y) the date the stock option
expires by its own terms. Notwithstanding the above, if an Incentive Option is
granted to a Director or officer, who is also an employee, in the event such
Grantee 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 Grantee within three months of the time the Grantee 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 Grantee remains a
Director or officer.
(c) Unless otherwise provided in an individual written agreement pursuant
to Section 10 hereof, each nonvested Restricted Stock granted under the Plan
will be forfeited when the Grantee ceases to be an officer, employee or Director
of the Company, except that
(i) If a Grantee of a nonvested Restricted Stock dies while an
officer, employee or Director of the Company, such Restricted Stock shall
become fully vested; however any Performance Goals under Section 7 must
still be achieved prior to the award of such shares of Restricted Stock.
(ii) If a Grantee of a nonvested Restricted Stock ceases to be an
officer, employee or Director of the Company,
(A) because of disability of the Grantee (as determined by the
Committee or the Officers and Directors Stock Option Committee in its
Discretion), or
(B) under other circumstances as determined by the Committee or the
Officers and Directors Stock Option Committee, in its Discretion, such
Restricted Stock shall (with the consent of the Committee or the
Officers and Directors Stock Option Committee) not be forfeited;
however, any Performance Goals under Section 7 must still be achieved
prior to the award of such shares of Restricted Stock.
(d) Notwithstanding the above, each stock option or Restricted Stock
granted under the Plan (or any predecessor Plan) shall be fully vested and any
Performance Goals shall be deemed to be met upon a Change
32
<PAGE> 35
in Control. For purposes of this Plan, a "Change in Control" means the
occurrence of one or more of the following events: (i) any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of
all or substantially all of the assets of the Company to any person or group of
related persons for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended (a "Group"), together with any affiliates thereof, other than a
transaction with any wholly owned subsidiary of Company, (ii) the approval by
the holders of capital stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company; (iii) any Person or Group (other than
Leonard Miller and any Permitted Transferees of Leonard Miller) shall become the
owner, directly or indirectly, beneficially or of record, of shares representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of Company; (iv) a majority of the members of the
Board of Directors of the Company are persons who were not directors on [date of
this Plan] and whose election was not approved by a vote of at least a majority
of the members of the Board of Directors of the Company in office at the time of
the election who either were members of the Board of Directors on the [date of
this Plan] or whose election as members of such Board of Directors was
previously approved by such a majority.
"Permitted Transferee" means, with respect to any person, (i) that person's
spouse, (ii) a parent or lineal descendant (including an adopted child) of a
parent of that person, or the spouse of a lineal descendant of a parent of that
person, (iii) a trustee, guardian or custodian for, or an executor,
administrator or other legal representative of the estate of, that person, or a
trustee, guardian or custodian for a Permitted Transferee of that person, (iv)
the trustee of a trust (including a voting trust) for the benefit of that person
and (v) a corporation, partnership, trust or other entity of which that person
and Permitted Transferees of that Person are the beneficial owners of a majority
in voting power of the equity.
16. NO RIGHTS TO CONTINUED EMPLOYMENT
Nothing in the Plan or in any stock option, Stock Appreciation Right or
Restricted Stock 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.
17. RIGHTS AS A SHAREHOLDER
A Grantee shall have no rights as a shareholder with respect to any shares
covered by any stock option or Stock Appreciation Right or any shares of
Restricted Stock until the issuance of a stock certificate to the Grantee for
such shares.
18. EFFECTIVE DATE
The Plan was first adopted by the Board of Directors on October 30, 1997
and approved by shareholders on . This restatement of the Plan
will be effective on the date it is adopted by the Board of Directors, provided
that the stockholders of LNR approve this restatement within 12 months after it
is adopted by the Board of Directors. Stock options, Stock Appreciation Rights
and Restricted Stock may be granted prior to approval of the Plan by the
stockholders of LNR, but each stock option, Stock Appreciation Right and
Restricted Stock granted prior to stockholder approval of this restatement will
be subject to approval of this restatement by the stockholders of LNR within 12
months after its adoption. No stock option or Stock Appreciation Right may be
exercised or Restricted Stock become vested until the Plan is approved by the
stockholders of LNR, and all stock options, Stock Appreciation Rights and
Restricted Stock granted before the Plan is approved by the stockholders of LNR
will automatically terminate at the end of 12 months
33
<PAGE> 36
after the Plan is adopted by the Board of Directors if the Plan is not approved
by the stockholders of LNR by that date.
19. 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 as Restricted Stock or upon exercise of stock options or Stock
Appreciation Rights granted under the Plan, (b) changes the categories of
persons eligible to receive stock options, Stock Appreciation Rights or
Restricted Stock 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, Stock Appreciation Right or Restricted Stock which has been
granted prior to the amendment, unless the Grantee of the stock option, Stock
Appreciation Right or Restricted Stock consents to the change.
20. 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, Stock
Appreciation Rights or Restricted Stock may be granted after the Plan is
terminated. However, termination of the Plan will not affect any stock option,
Stock Appreciation Right or Restricted Stock which is outstanding when the Plan
is terminated.
21. GOVERNING LAW
With respect to stock or options granted pursuant to the Plan and the
agreements thereunder, the Plan, such agreements and any options or stock
granted pursuant thereto shall be governed by the applicable Code provisions to
the maximum extent possible. Otherwise, the operation of, and the rights of
Grantees under, the Plan, the agreements and any options or stock 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
February 11, 2000.
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<PAGE> 37
SKU# 4934-PS-00
<PAGE> 38
EXHIBIT C
LNR93B DETACH HERE
PROXY
LNR PROPERTY CORPORATION [LOGO]
760 N.W. 107th Avenue
Miami, Florida 33172
PROXY FOR 2000 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 Shelly Rubin, 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 Stockholders of LNR PROPERTY CORPORATION to be held at the
Doral Park Country Club, 5001 N.W. 104th Avenue, Miami, Florida on Wednesday,
April 12, 2000, 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 SEE REVERSE
SIDE SIDE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 39
[X] PLEASE MARK 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: (01) Leonard Miller, (02) Stuart A. Miller, (03) Steven J.
Saiontz, (04) Sue M. Cobb, (05) Carlos M. de la Cruz, (06) Brian L.
Bilzin and (07) Jeffrey P. Krasnoff
FOR ALL NOMINEES [ ] WITHHELD FROM ALL NOMINEES [ ]
[ ] ______________________________________________
For all nominees except as noted above
2. To vote upon a proposal to amend the Company's Certificate of Incorporation
to divide the directors into three classes.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To vote upon a proposal to approve the LNR Property Corporation 2000 Stock
Option and Restricted Stock Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. To transact 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> 40
PROXY
LNR PROPERTY CORPORATION [LOGO]
760 N.W. 107th Avenue
Miami, Florida 33172
PROXY FOR 2000 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 Shelly Rubin, 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 Stockholders of LNR PROPERTY CORPORATION to be held at the
Doral Park Country Club, 5001 N.W. 104th Avenue, Miami, Florida on Wednesday,
April 12, 2000, 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 SEE REVERSE
SIDE SIDE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 41
[X] PLEASE MARK 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: (01) Leonard Miller, (02) Stuart A. Miller, (03) Steven J.
Saiontz, (04) Sue M. Cobb, (05) Carlos M. de la Cruz, (06) Brian L.
Bilzin and (07) Jeffrey P. Krasnoff
FOR ALL NOMINEES [ ] WITHHELD FROM ALL NOMINEES [ ]
[ ] ______________________________________________
For all nominees except as noted above
2. To vote upon a proposal to amend the Company's Certificate of Incorporation
to divide the directors into three classes.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To vote upon a proposal to approve the LNR Property Corporation 2000 Stock
Option and Restricted Stock Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. To transact 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: ____________________
