SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Rule 14a-6(e)(2))
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[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Aegis Realty, Inc.
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<PAGE>
AEGIS REALTY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
on
June 16, 1999
-------------
April 30, 1999
To the Stockholders of Aegis Realty, Inc.:
NOTICE IS HEREBY GIVEN THAT the 1999 Annual Meeting of Aegis Realty,
Inc. will be held Wednesday, June 16, 1999 at 10:00 A.M. (local time), at the
American Stock Exchange, 86 Trinity Place, New York, New York for the following
purposes:
(1) The election of two (2) Directors for a term of three years to
expire in 2002.
(2) The transaction of such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" each of the listed
nominees. The accompanying proxy statement contains additional information and
should be carefully reviewed by Stockholders.
The Board of Directors has fixed the close of business on April 1, 1999
as the record date for the determination of Stockholders entitled to notice of
and to vote at the meeting and any adjournment thereof.
By Order of the Board of Directors
/s/ J. Michael Fried
J. Michael Fried
Chairman of the Board and
Chief Executive Officer
IT IS MOST IMPORTANT THAT YOU COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
STAMPED, SELF-ADDRESSED PROXY CARD.
YOUR FAILURE TO PROMPTLY RETURN THE PROXY INCREASES THE OPERATING COSTS OF YOUR
INVESTMENT.
YOU ARE CORDIALLY INVITED TO PERSONALLY ATTEND THE MEETING, BUT YOU SHOULD
RETURN THE PROXY CARD WHETHER OR NOT YOU ATTEND THE MEETING.
<PAGE>
AEGIS REALTY, INC.
625 MADISON AVENUE
NEW YORK, NEW YORK, 10022
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
INTRODUCTION
The accompanying form of proxy is solicited on behalf of the Board of
Directors of Aegis Realty, Inc. ("Aegis") for use at the Annual Meeting of
Stockholders of Aegis (the "Meeting") to be held Wednesday, June 16, 1999 at
10:00 A.M. (local time), at the American Stock Exchange, 86 Trinity Place, New
York, New York and at any adjournments thereof. Aegis has first mailed these
proxy materials to holders (the "Stockholders") of shares (the "Shares") of
common stock, $.01 par value of Aegis (the "Common Stock") on or about April 30,
1999. Aegis' executive offices are located at 625 Madison Avenue, New York, New
York 10022 (telephone: (212) 588-1765). Aegis is the sole general partner and
majority owner of Aegis Realty Operating Partnership, LP, a Delaware limited
partnership (the "Operating Partnership") through which Aegis conducts
substantially all of its business. Stockholders of record at the close of
business on April 1, 1999 (the "Record Date") will be entitled to vote at the
Meeting or any adjournments thereof.
Shares represented by properly executed proxy cards received by Aegis at
or prior to the Meeting will be voted according to the instructions indicated on
the proxy card. Unless contrary instructions are given, the persons named on the
proxy card intend to vote the Shares so represented FOR the election of each of
the two nominees for re-election as Directors. Each proxy granted is revocable
and may be revoked at any time prior to its exercise by giving written notice to
Aegis of its revocation by submission of a duly executed proxy bearing a later
date or by the vote of the Stockholder cast in person at the Meeting.
The Board of Directors recommends a vote "FOR" each of the listed
nominees.
As of April 1, 1999 approximately 8,046,859 Shares of Aegis were
outstanding, with each Share entitled to one vote on all matters that may come
before the Meeting.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, currently
consisting of two classes of two directors each and one class of one director.
At the Meeting, two Directors are to be elected for three-year terms expiring in
2002. All of the nominees are currently Directors of Aegis. Directors are
elected by a majority of the votes cast (assuming the presence of a quorum
consisting of a majority of the Stockholders whether present in person or by
proxy).
Unless Stockholders otherwise specify, the Shares represented by the
proxies will be voted "FOR" the indicated nominees for election as Directors. If
for any reason any of the nominees become unavailable for election, the proxies
solicited will be voted for such nominees as are selected by the Board. The
Board has no reason to believe that any of the nominees will be unable or
unwilling to continue to serve as a Director if elected. However, in the event
that any nominee should be unable or for good cause
<PAGE>
unwilling to serve, the Shares represented by proxies received will be voted for
another nominee selected by the Board. The Board of Directors recommends a vote
FOR each of the listed nominees.
The following table sets forth information with respect to each nominee
nominated to serve as a Director for a term to expire in 2002.
Name of Director/
Nominee for Election Age Principal Occupation
Stuart J. Boesky 42 Mr. Boesky is a Director, President and Chief
Operating Officer of Aegis and is President and
Chief Operating Officer of the sole general
partner of Related Aegis LP (the "Advisor"). Mr.
Boesky practiced real estate and tax law in New
York City with the law firm of Shipley & Rothstein
from 1984 until February 1986 when he joined
Related Capital Company ("Related"), the real
estate finance affiliate of The Related Companies,
L.P.. From 1983 to 1984, Mr. Boesky practiced law
with the Boston law firm of Kaye, Fialkow,
Richmond & Rothstein (which subsequently merged
with Strook & Strook & Lavan) and from 1978 to
1980 was a consultant specializing in real estate
at the accounting firm of Laventhol & Horwath. Mr.
Boesky is the sole shareholder of one of the
general partners of Related. Mr. Boesky graduated
from Michigan State University with a Bachelor of
Arts degree and from Wayne State School of Law
with a Juris Doctor degree. He then received a
Master of Laws degree in Taxation from Boston
University School of Law. Mr. Boesky is a member
of the Audit Committee. Mr. Boesky also serves on
the Board of Trustees of Charter Municipal
Mortgage Acceptance Company ("CharterMac"), which
company is also advised by affiliates of Related.
Alan P. Hirmes 44 Mr. Hirmes is a Director, Senior Vice President
and Assistant Secretary of Aegis and is a Senior
Vice President and Chief Financial Officer of the
sole general partner of the Advisor. Mr. Hirmes
has been a Certified Public Accountant in New York
since 1978. Prior to joining Related in October
1983, Mr. Hirmes was employed by Weiner & Co.,
certified public accountants. Mr. Hirmes is also
the sole shareholder of one of the general
partners of Related. Mr. Hirmes graduated from
Hofstra University with a Bachelor of Arts degree.
Mr. Hirmes also serves on the Board of Trustees of
CharterMac.
Directors and Officers
The Board of Directors directs the management of the business and
affairs of Aegis but retains the Advisor to manage Aegis' day-to-day affairs.
The Board of Directors delegates to the Advisor responsibilities with respect
to, among other things, overseeing the portfolio of assets of Aegis and the
acquisition or disposition of investments. During 1998, the Board of Directors
held six meetings and the committees held a total of three meetings. The average
attendance in the aggregate of the total number of Board and committee meetings
was 96%.
<PAGE>
The Directors and Executive Officers of Aegis are as follows:
Year First Became
Name Age Offices Held Director/Officer
- ---- --- ------------ -----------------
J. Michael Fried 54 Director, Chairman of the Board and
Chief Executive Officer 1997
Peter T. Allen 53 Director 1997
Arthur P. Fisch 57 Director 1997
Stuart J. Boesky 42 Director, President and
Chief Operating Officer 1997
Alan P. Hirmes 44 Director, Senior Vice President,
and Assistant Secretary 1997
Bruce H. Brown 45 Senior Vice President 1997
Mark J. Schlacter 48 Senior Vice President 1997
John B. Roche 41 Senior Vice President, Chief
Financial Officer and Chief
Accounting Officer 1998
Denise L. Kiley 39 Vice President 1997
Marc D. Schnitzer 38 Vice President 1997
Richard A. Palermo 37 Vice President, Treasurer
and Controller 1997
Teresa Wicelinski 33 Secretary 1998
Biographical information with respect to Messrs. Boesky and Hirmes is set forth
above.
J. MICHAEL FRIED, age 54, is Director, Chairman of the Board and Chief Executive
Officer of Aegis, is Chairman of the Board and a Director of the sole general
partner of the Advisor and is the sole shareholder of one of the general
partners of Related. In that capacity, he is generally responsible for all
syndication, finance, acquisition and investor reporting activities of Related
and its affiliates. Mr. Fried practiced corporate law in New York City with the
law firm of Proskauer Rose Goetz & Mendelsohn from 1974 until he joined Related
in 1979. Mr. Fried graduated from Brooklyn Law School with a Juris Doctor
degree, magna cum laude; from Long Island University Graduate School with a
Master of Science degree in Psychology; and from Michigan State University with
a Bachelor of Arts degree in History. Mr. Fried also serves as Chairman of the
Board of Trustees of CharterMac and Chairman of the Board of Trustees of
American Mortgage Investors Trust ("AMIT"), which company is also advised by
affiliates of Related.
PETER T. ALLEN, age 53, is President of Peter Allen & Associates, Inc., a real
estate development and management firm, in which capacity he has been
responsible for the leasing, refinancing and development of major commercial
properties. Mr. Allen has also been an Adjunct Professor of the Graduate School
of
<PAGE>
Business at the University of Michigan since 1981. Mr. Allen received a Bachelor
of Arts Degree in history/economics from DePauw University and a Masters Degree
in Business Administration with Distinction from the University of Michigan. Mr.
Allen has been an Independent Director since 1997 and is a member of the Audit
and Compensation Committees. Mr. Allen also serves on the Board of Trustees of
CharterMac and on the Board of Trustees of AMIT.
ARTHUR P. FISCH, age 57, is attorney in private practice specializing in real
property and securities law since October 1987, with Arthur P. Fisch, P.C. and
Fisch & Kaufman. From 1975-1987, Mr. Fisch was employed by E.F. Hutton &
Company, serving as First Vice President in the Direct Investment Department
from 1981-1987 and associate general counsel from 1975-1980 in the legal
department. As First Vice President, he was responsible for the syndication and
acquisition of residential real estate. Mr. Fisch received a B.B.A. from Bernard
Baruch College of the City University of New York and a Juris Doctor degree from
New York Law School. Mr. Fisch is admitted to practice law in New York and
Pennsylvania. Mr. Fisch has been an Independent Director since 1997 and is a
member of the Audit and Compensation Committees. Mr. Fisch also serves on the
Board of Trustees of CharterMac and AMIT.
BRUCE H. BROWN, age 45, is a Senior Vice President of Aegis and is a Senior Vice
President of the sole general partner of the Advisor and Related and is a
director of Related's Portfolio Management Group. He is responsible for
overseeing the administration of the firm's public registered debt and equity
affiliates encompassing the monitoring of the performance of each entity and
each investment. He is also responsible for Related's loan servicing activities
with respect to the firm's $600 million portfolio of tax exempt first mortgage
bonds and FNMA/GNMA insured and co-insured loan portfolio. Prior to joining
Related in 1987, Mr. Brown was a real estate lending officer at the United
States Trust Company of New York and previously held management positions in the
hotel and resort industry with Helmsley-Spear and Westin Hotels. Mr. Brown
graduated from Colgate University with a Bachelor of Arts degree.
MARK J. SCHLACTER, age 48, is a Senior Vice President of Aegis and is a Senior
Vice President of the sole general partner of the Advisor. Mr. Schlacter is a
Vice President of Mortgage Acquisitions of Related, and has been with Related
since June 1989. Prior to joining Related, Mr. Schlacter garnered 16 years of
direct real estate experience covering retail and residential construction,
single and multifamily mortgage origination and servicing, commercial mortgage
origination and servicing, property acquisition and financing, and mortgage
lending program underwriting and development. He was a Vice President with
Bankers Trust Company from 1986 to June 1989, and held prior positions with
Citibank, Anchor Savings Bank and the Pyramid Companies covering the 1972-1986
period. Mr. Schlacter holds a Bachelor of Arts degree in Political Science from
Pennsylvania State University and periodically teaches multifamily underwriting
at the New York University School of Continuing Education, Real Estate
Institute.
JOHN B. ROCHE, age 41, is a Senior Vice President and Chief Financial Officer of
Aegis and a Senior Vice President and Chief Financial officer of the general
partner of the Advisor. Mr. Roche is also a Senior Vice President of Related
Capital Company. Prior to joining the Company, he was the Vice President and
Chief Financial Officer of Emmes Asset Management Company, a real estate and
financial services firm. From 1991 through 1996, he was the Vice President of
Finance of the Robert Martin Company, a real estate developer, owner and
operator in Westchester County, New York. He spent six years in Public
Accounting with the firms of Peat Marwick & Mitchell and later, Kenneth
Leventhal & Co. He has been a Certified Public Accountant in New York since
1986. Mr. Roche holds a Masters in Business Administration from the Columbia
Business School and a Bachelor of Arts in Accounting from Queens College.
DENISE L. KILEY, age 39, is a Vice President of Aegis and is a Vice President of
the sole general partner of the Advisor and is also a Managing Director of
Related, responsible for overseeing the investment underwriting and approval of
all real estate properties invested in Related sponsored corporate, public and
private equity and debt funds. Prior to joining Related in 1990, Ms. Kiley had
experience acquiring, financing and managing the assets of multifamily
residential properties. From 1981 through 1985 she was
<PAGE>
an auditor with a national accounting firm. Ms. Kiley holds a Bachelor of
Science degree in Accounting from Boston College and is a Member of the
Affordable Housing Roundtable.
MARC D. SCHNITZER, age 38, is a Vice President of Aegis and is a Vice President
of the sole general partner of the Advisor. Mr. Schnitzer is a Managing Director
of Related and Director of Related's Tax Credit Acquisitions Group. Mr.
Schnitzer received a Master of Business Administration degree from The Wharton
School of The University of Pennsylvania in December 1987, and joined Related in
January, 1988. From 1983 to 1986, Mr. Schnitzer was a Financial Analyst in the
Fixed Income Research Department of The First Boston Corporation in New York.
Mr. Schnitzer received a Bachelor of Science degree, summa cum laude, in
Business Administration from the School of Management at Boston University.
RICHARD A. PALERMO, age 38, is a Vice President, the Treasurer and the
Controller of Aegis and is a Vice President, the Treasurer and the Controller of
the sole general partner of the Advisor. Mr. Palermo has been a Certified Public
Accountant in New York since 1985. Prior to joining Related in September 1993,
Mr. Palermo was employed by Sterling Grace Capital Management from October 1990
to September 1993, Integrated Resources, Inc. from October 1988 to October 1990
and E.F. Hutton & Company, Inc. from June 1986 to October 1988. From October
1982 to June 1986, Mr. Palermo was employed by Marks Shron & Company and Mann
Judd Landau, certified public accountants. Mr. Palermo graduated from Adelphi
University with a Bachelor of Business Administration degree.
TERESA WICELINSKI, age 33, is the Secretary of Aegis and is the Secretary of the
sole general partner of the Advisor. Ms. Wicelinski joined Related in June 1992,
and prior to that date was employed by Friedman, Alprin & Green, certified
public accountants. Ms. Wicelinski graduated from Pace University with a
Bachelor of Arts Degree in Accounting.
Committees of the Board of Directors
The Board of Directors has standing Audit and Compensation Committees. The Audit
Committee's duties include the review and oversight of all transactions with
affiliates of Aegis, the periodic review of Aegis' financial statements and
meetings with Aegis' independent auditors. The Audit Committee is comprised of
Messrs. Allen, Fisch and Boesky and held three meetings during Aegis' fiscal
year ended December 31, 1998.
The Compensation Committee's duties include the determination of compensation of
Aegis' executive officers and the administration of Aegis' Incentive Share
Option Plan. The Compensation Committee is comprised of Messrs. Allen and Fisch
and did not hold any meetings during Aegis' fiscal year ended December 31, 1998.
The Compensation Committee must have at least two members, each of which must be
Independent Directors.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires Aegis' officers and directors, and persons who own more than ten
percent of a registered class of Aegis' equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "Commission"). These persons are required by regulation of the Commission
to furnish Aegis with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, Aegis believes that during the fiscal year ended
December 31, 1998, Aegis' officers, directors and greater than ten percent
beneficial owners complied with all applicable Section 16(a) filing
requirements.
<PAGE>
The Advisor
The directors and executive officers of Related Aegis, Inc. ("Related
Aegis"), the sole general partner of the Advisor, are set forth below. These
officers of the general partner of the Advisor may also provide services to
Aegis on behalf of the Advisor.
Related Aegis, Inc.
Year First Became
Name Age Offices Held Director/Officer
- ---- --- ------------ -----------------
J. Michael Fried 54 Director, Chairman of the Board and
Chief Executive Officer 1997
Stuart J. Boesky 42 President and Chief Operating Officer 1997
Alan P. Hirmes 44 Senior Vice President 1997
Stephen M. Ross 58 Director 1997
Bruce H. Brown 45 Senior Vice President 1997
Mark J. Schlacter 48 Senior Vice President 1997
John B. Roche 41 Senior Vice President,
Chief Financial Officer
Chief Accounting Officer 1998
Denise L. Kiley 39 Vice President 1997
Marc D. Schnitzer 38 Vice President 1997
Richard A. Palermo 38 Vice President, Treasurer and
Controller 1997
Teresa Wicelinski 33 Secretary 1998
Biographical information with respect to Messrs. Fried, Boesky, Hirmes,
Brown, Schlacter, Roche, Schnitzer and Palermo and Ms. Kiley and Wicelinski is
set forth above.
STEPHEN M. ROSS, age 58, is a Director of the Advisor. Mr. Ross is also
President, Director and shareholder of The Related Realty Group, Inc., the
general partner of The Related Companies, L.P. He graduated from the University
of Michigan School of Business Administration with a Bachelor of Science degree
and from Wayne State University School of Law with a Juris Doctor degree. Mr.
Ross then received a Master of Laws degree in taxation from New York University
School of Law. He joined the accounting firm of Coopers & Lybrand in Detroit as
a tax specialist and later moved to New York, where he worked for two large Wall
Street investment banking firms in their real estate and corporate finance
departments. Mr. Ross formed the predecessor of The Related Company, L.P. in
1972 to develop, manage, finance and acquire real estate.
Executive Compensation
Aegis has twelve executive officers and five Directors (two of whom are
Independent Directors). Aegis does not pay or accrue any fees, salaries or other
forms of compensation to its officers or Directors, other than Independent
Directors and options received under the Stock Option Plan. Independent
Directors receive compensation for serving as Directors at the rate of $15,000
per year payable $5,000 in cash (or at
<PAGE>
such Director's option, Shares of Common Stock) and Shares having an aggregate
value of $10,000, based on the fair market value at the date of issuance, in
addition to an expense reimbursement for attending meetings of the Board of
Directors.
The Advisor, at its expense, provides all personnel necessary to conduct
Aegis' regular business. The Advisor receives various fees for advisory and
other services performed under the Advisory Agreement, as further described in
the "Certain Relationships and Related Transactions" section of this Proxy
Statement. An affiliate of the Advisor pays all salaries, bonuses and other
compensation (other than options received under the Stock Option Plan) to the
officers of Aegis and the general partner of the Advisor. Certain directors and
officers of the sole general partner of the Advisor and certain officers of
Aegis receive compensation from the Advisor and its affiliates for services
performed for various affiliated entities, which may include services performed
for Aegis. Such compensation may be based in part on the performance of Aegis;
however, the Advisor believes that any compensation attributable to services
performed for Aegis is immaterial.
Security Ownership of Certain Beneficial Owners and Management
As of April 1, 1999, no person was known by Aegis to be the beneficial
owner of more than five percent of the outstanding Shares of Common Stock.
As of April 1, 1999, the directors and officers of the sole general
partner of the Advisor in the aggregate owned 100% of the shares of common stock
of the sole general partner of the Advisor.
<PAGE>
As of April 1, 1999, directors and officers of Aegis and directors and
officers of the sole general partner of the Advisor own directly or beneficially
Shares of Common Stock as follows:
<TABLE>
<CAPTION>
Amount and Nature of
Name Title Beneficial Ownership Percent of Class(14)
- ---- ----- -------------------- -------------------
<S> <C> <C> <C>
Stephen M. Ross Director of Related Aegis 136,924 Shares(1)(2)(3) 1.60%
Alan P. Hirmes Director, Senior VP, 63,353 Shares(3)(4)(5) *
and Assistant Secretary of Aegis
SVP of Related Aegis
J. Michael Fried Director, Chairman of the Board 109,356 Shares(3)(6)(7)(8) 1.28%
and CEO of Aegis and Director,
CEO and Chairman of the Board
of Related Aegis
Stuart J. Boesky Director, President, and COO of 112,635 Shares(3)(7)(9)(10) 1.32%
Aegis and President and COO of
Related Aegis
Peter T. Allen Director of Aegis 1,216 Shares *
Arthur P. Fisch Director of Aegis 1,216 Shares *
John B. Roche Senior VP & CFO of Aegis 2,000 Shares *
& SVP and CFO of Related Aegis
Bruce H. Brown Senior VP of Aegis and SVP of 400 Shares *
Related Aegis
Mark J. Schlacter Senior VP of Aegis and SVP of 2,075 Shares(11) *
Related Aegis
All Officers and Directors of Aegis and Related Aegis 429,175 Shares(7)(12)(13) 5.01%
as a group (13 persons)
</TABLE>
*Less than 1% of the Common Stock issued by Aegis.
1 Includes 32,177 units of limited partnership interest ("OP Units") of the
Operating Partnership which are currently convertible to Shares of Common
Stock on a one-to-one basis.
2 Includes 23,614 OP Units which are convertible to Shares of Common Stock on a
one-to-one basis commencing on December 10, 1999.
3 Includes 1,574 OP Units held by Related Capital Company, in which Messrs.
Ross, Fried, Boesky and Hirmes hold 100% of the direct and indirect equity
interest. The OP Units are convertible to Shares of Common Stock on a
one-to-one basis commencing on December 10, 1999.
4 Includes 2,833 OP Units, which are currently convertible to Shares of Common
Stock on a one to one basis.
5 Includes 38,813 OP Units which are convertible to Shares of Common Stock on a
one-to-one basis commencing on December 10, 1999.
6 Includes 8,993 OP Units, which are currently convertible to Shares of Common
Stock on a one to one basis.
7 Includes 15,200 shares are owned by BF Security Partners, of which Messrs.
Fried and Boesky are each 50% equity owners.
8 Includes 56,923 OP Units which are convertible to Shares of Common Stock on a
one-to-one basis commencing on December 10, 1999.
9 Includes 2,833 OP Units, which are currently convertible to Shares of Common
Stock on a one to one basis.
10 Includes 57,945 OP Units which are convertible to Shares of Common Stock on a
one-to-one basis commencing on December 10, 1999.
<PAGE>
11 Includes 2,075 OP Units which are convertible to Shares of Common Stock on a
one-to-one basis commencing on December 10, 1999.
12 Includes 46,836 OP Units, which are currently convertible to Shares of Common
Stock on a one to one basis.
13 Includes 179,370 OP Units which are convertible to Shares of Common Stock on
a one-to-one basis commencing on December 10, 1999.
14 Percent of Class assumes that all OP Units have been converted to Shares of
Common Stock.
Stock Option Plan
Aegis has adopted an incentive stock option plan (the "Plan"), the
purpose of which is to (i) attract and retain qualified persons as directors and
officers and (ii) to incentivize and more closely align the financial interests
of the Advisor and its employees and officers with the interests of the
Stockholders by providing the Advisor with substantial financial interest in
Aegis' success. The Compensation Committee, which consists of Messrs. Allen and
Fisch, administers the Plan. Pursuant to the Plan, if Aegis' distributions per
Share of Common Stock in the immediately preceding calendar year exceed $0.9869
per Share, the Compensation Committee has the authority to issue options to
purchase, in the aggregate, that number of Shares of Common Stock which is equal
to three percent of the Shares outstanding as of December 31 of the immediately
preceding calendar year (or in the initial year, as of October 1, 1997),
provided that the Compensation Committee may only issue, in the aggregate,
options to purchase a maximum number of Shares of Common Stock over the life of
the Incentive Stock Option Plan equal to 809,754 Shares (10% of the Shares
outstanding on October 1, 1997).
Subject to the limitations described in the preceding paragraph, if the
Compensation Committee does not grant the maximum number of options in any year,
then the excess of the number of authorized options over the number of options
granted in such year will be added to the number of authorized options in the
next succeeding year and will be available for grant by the Compensation
Committee in such succeeding year.
All options granted will have an exercise price equal to or greater than
the fair market value of the shares of common stock on the date of the grant.
The maximum option term is ten years from the date of grant. All stock options
granted pursuant to the Incentive Stock Option Plan may vest immediately upon
issuance or in accordance with the determination of the Compensation Committee.
No options were granted for the year ended December 31, 1997. In 1998,
Aegis distributed $1.035 per share of common stock ($0.96 from continuing
operations and a $0.075 special capital gains distribution), thus enabling the
Compensation Committee, at its discretion, to issue options for up to 241,522
Shares. The Compensation Committee is considering granting options; however, as
of the date of this proxy statement, no options have been granted.
Report of the Compensation Committee
The Compensation Committee is comprised of two Independent Directors
(Messrs. Allen and Fisch). The role of the Compensation Committee is to
administer the policies governing the Plan. Because Aegis does not pay salaries
and bonuses to the officers of Aegis and the general partner of the Advisor, the
Compensation Committee does not determine executives' salary levels. Option
compensation is intended to be set at a level competitive with the amounts paid
to the management of similarly sized companies in similar industries. The
Committee also evaluates the performance of management when determining the
number of options to be issued.
Aegis' grant of stock options are structured to link the compensation of
the officers and the officers of the general partner of the Advisor with Aegis'
performance. Through the establishment of the stock option plan, Aegis has
aligned the financial interests of its executives with the results of Aegis'
performance, thus enhancing shareholder value. The Compensation Committee may
only grant options if
<PAGE>
certain performance levels are met and is limited in the number of options which
may be granted each year (See "Stock Option Plan" above). The amount of options
which may be granted are set at levels that the Compensation Committee believes
to be consistent with others in Aegis' industry, with such compensation
contingent upon Aegis' level of annual and long-term performance.
Section 162 (m) was added to the Internal Revenue Code as part of the
Omnibus Budget Reconciliation Act of 1993. Section 162 (m) limits the deduction
for compensation paid to the Chief Executive Officer and the other executive
officers to the extent that compensation of a particular executive exceeds
$1,000,000 (less the amount of any "excess parachute payments" as defined in
Section 280G of the Code) in any one year. However, under Section 162(m), the
deduction limit does not apply to certain "performance-based" compensation
established by an independent compensation committee which conforms to certain
restrictive conditions stated under the Code and related regulations. It is
Aegis' goal to have compensation paid to its five most highly compensated
officers qualify as performance based compensation deductible for federal income
tax purposes under Section 162 (m). Given the fact that Aegis is externally
advised and the only compensation that currently may be paid to its executives
are options pursuant to the Plan, it is unlikely that Section 162 (m) will
present any concerns.
COMPENSATION COMMITTEE
Peter T. Allen
Arthur P. Fisch
Certain Relationships and Related Transactions
Aegis has and will continue to have certain relationships with the
Advisor and its affiliates. However, there have been no direct financial
transactions between Aegis and its Directors and officers or the directors and
officers of the sole General Partner of the Advisor.
Aegis and the Operating Partnership entered into an Advisory Agreement
pursuant to which the Advisor is obligated to use its best efforts to seek out
and present to Aegis, whether through its own efforts or those of third parties
retained by it, suitable and a sufficient number of investment opportunities
which are consistent with the investment policies and objectives of Aegis and
consistent with such investment programs as the Directors may adopt from time to
time in conformity with Aegis' Articles of Amendment and Restatement (the
"Articles").
Although the Directors have continuing exclusive authority over the
management of Aegis, the conduct of its affairs and the management and
disposition of Aegis' assets, the Directors have initially delegated to the
Advisor, subject to the supervision and review of the Board of Directors and
consistent with the provisions of the Articles, the power and duty to: (i)
manage the day-to-day operations of Aegis; (ii) acquire, retain or sell Aegis'
assets; (iii) seek out, present and recommend investment opportunities
consistent with Aegis' investment policies and objectives, and negotiate on
behalf of Aegis with respect to potential investments or the disposition
thereof; (iv) when appropriate, cause an affiliate to serve as the mortgagee of
record for mortgage investments of Aegis and in that capacity hold escrows on
behalf of mortgagors in connection with the servicing of mortgages; (v) obtain
for Aegis such services as may be required in acquiring and disposing of
investments, disbursing and collecting the funds of Aegis, paying the debts and
fulfilling the obligations of Aegis, and handling, prosecuting and settling any
claims of Aegis, including foreclosing and otherwise enforcing mortgages and
other liens securing investments; (vi) obtain for Aegis such services as may be
required for property management, mortgage brokerage and servicing, and other
activities relating to the investment portfolio of Aegis; (vii) evaluate,
structure and negotiate prepayments or sales of Aegis' mortgage investments and
mortgage securities; (viii) monitor operations and expenses of Aegis; and (ix)
from time to time, or as requested by the Directors, make reports to Aegis as to
its performance of the foregoing services.
<PAGE>
The original term of the Advisory Agreement will terminate on October 1,
2001, the fourth anniversary of its effective date. Thereafter, the Advisory
Agreement may be renewed annually by Aegis, subject to an evaluation of the
performance of the Advisor by the Board of Directors. The Advisory Agreement may
be terminated (i) without Cause by the Advisor or (ii) for Cause by a majority
of the Independent Directors, each without penalty, and each upon 60 days' prior
written notice to the non-terminating party.
The Advisory Agreement cannot be terminated by Aegis prior to October 1,
2001, other than for Cause. "Cause" is defined as gross negligence or willful
misconduct of the Advisor. Aegis cannot dissolve and liquidate prior to such
anniversary date except upon a recommendation of the Advisor and the vote of a
majority in interest ("Majority Vote") of the Stockholders. After October 1,
2001, the vote of the holders of 66-2/3% of Aegis' then outstanding Shares is
required to approve a dissolution and liquidation of Aegis that is not
recommended by the Advisor and the Majority Vote of Stockholders is required to
approve a liquidation of Aegis recommended by the Advisor. If for any reason,
whether prior to or after October 1, 2001, the Advisory Agreement is terminated
in accordance with its terms, Aegis may dissolve and liquidate upon the Majority
Vote of Stockholders.
Pursuant to the terms of the Advisory Agreement, the Advisor is entitled
to receive the fees and other compensation set forth below:
Fee/Compensation* Amount
---------------- ------
Acquisition Fee 3.75% of the acquisition price
of each property acquired by Aegis, the
Operating Partnership and their
respective subsidiaries.
Mortgage Selection Fee 3.0 % of the principal amount of each
mortgage loan originated or acquired by
Aegis, the Operating Partnership and
their respective subsidiaries.
Mortgage Placement Fee 0.75% of the principal amount of each
mortgage loan originated or acquired by
Aegis, the Operating Partnership and
their respective subsidiaries (payable
by the borrower, and not Aegis).
Asset Management Fee/ Special
Distribution 0.375% per annum of total invested
assets of Aegis, the Operating
Partnership and their respective
subsidiaries.
Operating Expense Reimbursement For direct expenses incurred by the
Advisor in an amount not to exceed
$200,000 per annum (subject to increase
based on increases in Aegis', the
Operating Partnership's and their
respective subsidiaries' assets and to
annual increases based upon increases
in the Consumer Price Index).
<PAGE>
Incentive Share Options The Advisor may receive options to
acquire additional Shares pursuant to
Aegis' Incentive Share Option Plan only
if Aegis' distributions in any year
exceed $0.9869 per Share (i.e., the
1996 pro forma distributions set forth
Aegis' Solicitation Statement dated as
of June 15, 1997), and the Compensation
Committee of the Board of Directors
determines to grant such options.
Liquidation Fee 1.50% of the gross sales price of the
assets sold by the Aegis in connection
with a liquidation of the Aegis' assets
supervised by the Advisor.
- ----------------
* The Advisor is also permitted to earn miscellaneous compensation which may
include, without limitation, construction fees, escrow interest, property
management fees, leasing commissions and insurance brokerage fees. The payment
of any such compensation is generally limited to the competitive rate for the
services being performed.
The Advisor may engage in other business activities related to real
estate, mortgage investments or other investments whether similar or dissimilar
to those made by Aegis, or act as manager to any other person or entity having
investment policies whether similar or dissimilar to those of Aegis. Before the
Advisor, the officers and directors of the Advisor and all persons controlled by
the Advisor and its officers and directors may take advantage of an opportunity
for their own account or present or recommend it to others, they are obligated
to present such investment opportunity to Aegis if (i) such opportunity is of a
character which could be taken by Aegis, (ii) such opportunity is compatible
with Aegis' investment objectives and policies and (iii) Aegis has the financial
resources to take advantage of such opportunity.
The Articles and the Advisory Agreement provide that Aegis will
indemnify the Advisor and its affiliates under certain circumstances.
The Advisor is entitled to subcontract its obligations under the
Advisory Agreement to an affiliate. In accordance with the foregoing, the
Advisor has assigned its rights and obligations to Related.
All of Aegis' twenty-eight properties are managed by RCC Property
Advisors, Inc. (the "Property Manager"), an affiliate of the Advisor. The
Property Manager receives standard leasing commissions for space leased to new
tenants and lease renewals.
Stock Performance Graph
The following stock performance graph compares Aegis' performance to the
S&P 500 and the index of equity real estate investment trusts prepared by the
National Association of Real Estate Investment Trusts ("NAREIT"). Equity real
estate investment trusts are defined as those that derive more than 75% of their
income from equity investments in real estate assets. The NAREIT equity index
includes all tax-qualified real estate investment trusts listed on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ National Market. Stock
price performance for the past year is not necessarily indicative of future
results. All stock price performance figures include the reinvestment of
dividends.
[INSERT GRAPH]
Cumulative Total Return
10/13/97 12/97 12/98
AEGIS REALTY, INC. $100 103 97
S&P 500 $100 103 132
NAREIT EQUITY $100 102 84
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP have been and presently are the independent
auditors for Aegis. Representatives of Deloitte & Touche LLP are expected to be
present at the Meeting and to be available to respond to appropriate questions
from Stockholders.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by Aegis. Brokers and
nominees should forward soliciting materials to the beneficial owners of the
Shares held of record by such person, and Aegis will reimburse them for their
reasonable forwarding expenses. In addition to the use of the mails, proxies may
be solicited by directors, officers and regular employees of Aegis and the
Advisor by personal interview or telephone.
VOTING PROCEDURES
Boston Equiserve, LP (the "Inspector") has been appointed the inspector
of elections. The Inspector will count all votes cast, in person or by
submission of a properly executed proxy, received at or prior to the Meeting.
Abstentions and "broker non-votes" (nominees holding Shares for beneficial
owners who have not voted on a specific matter) will be treated as present for
purposes of determining whether a quorum is present at the Meeting. However,
abstentions and broker non-votes will have no effect on the vote because the
vote required is a plurality of the votes actually cast (assuming the presence
of a quorum).
STOCKHOLDER PROPOSALS
Any proposal by a Stockholder of Aegis intended to be presented at the
2000 Annual Meeting of Stockholders must be received by Aegis at its principal
executive office not later than January 6, 2000 for inclusion in Aegis' proxy
statement and form of proxy relating to that meeting. Any such proposal must
also comply with other requirements of the proxy solicitation rules of the
Securities and Exchange Commission.
ANNUAL REPORT ON FORM 10-K
UPON WRITTEN REQUEST BY ANY STOCKHOLDER ENTITLED TO VOTE AT THE MEETING,
AEGIS WILL FURNISH THAT PERSON WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 WHICH IS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO. Requests should be addressed to Shannon Lizee at Aegis
Realty, Inc. 625 Madison Avenue, New York, New York 10022-1801.
OTHER BUSINESS
The Board of Directors does not know of any other matters to be brought
before the Meeting except those set forth in the notice thereof. If other
business is properly presented for consideration at the Meeting, it is intended
that the proxies will be voted by the persons named therein in accordance with
their judgment on such matters.
It is important that your Shares be represented at the Meeting. If you
are unable to be present in person, please complete, date, sign and return the
enclosed stamped, self-addressed proxy-card. Your failure to do so will increase
the costs of operating Aegis and decrease the return on your investment.
<PAGE>
By Order of the Board of Directors
/s/ J. Michael Fried
April 30, 1999 J. Michael Fried
Chairman of the Board and Chief Executive Officer
<PAGE>
[Aegis Logo]
Proxy
AEGIS REALTY, INC.
625 Madison Avenue
New York, New York 10022
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints J. Michael Fried and John B. Roche, each with
the power to appoint his substitute, and hereby authorizes them to represent and
to vote, as designated on the reverse side, all shares of common stock of Aegis
Realty, Inc. ("Aegis") held of record by the undersigned on April 1, 1999 at the
Annual Meeting of Stockholders to be held on June 16, 1999 and any adjournments
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED, IF NO
DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE
VOTED FOR SUCH PROPOSAL.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
[SEE REVERSE SIDE] [SEE REVERSE SIDE]
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
Dear Stockholder:
Please take note of the important information enclosed with this Proxy. There
are a number of issues related to the operation of Aegis that require your
immediate attention.
Your vote counts, and you are strongly encouraged to exercised your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy in the enclosed
postage paid envelope.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Aegis Realty, Inc.
- -------------------------------------------------------------------------------
DETACH HERE
[X] Please mark votes as in this example.
<TABLE>
<S> <C>
1. Election of Directors. 2. In their discretion, the proxies are authorized to
Nominees: Stuart J. Boesky and Alan P. Hirmes vote upon any other business that may properly
come before the meeting.
FOR WITHELD Mark here if you
[ ] [ ] plan to attend the
meeting
[ ]--------------------------------------- [ ]
For both nominees except as noted above
THE BOARD OF DIRECTORS MARK HERE FOR ADDRESS CHANGE AND NOTE AT
RECOMMENDS A VOTE "FOR" LEFT [ ]
EACH OF THE LISTED NOMINEES
Please sign exactly as name appears
hereon. Joint owners should each
sign. Executors, administrators,
trustees, guardians or other
fiduciaries should give full title
as such. If signing for a
corporation, please sign in full
corporate name by a duly authorized
officer.
Signature:________________________ Date:______________Signature:____________________ Date:___________
</TABLE>
4928-PS-99
