SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934
Commission File Number 1-13239
AEGIS REALTY, INC.
------------------
(Exact name of Registrant as specified in its Charter)
Maryland 13-3916825
- ------------------------------- -----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
625 Madison Avenue, New York, New York 10022
- -------------------------------------- ------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 421-5333
Securities registered pursuant to Section 12(b) of
the Act:
Common Stock, par value $.01 per share
--------------------------------------------------
(Title of each class)
American Stock Exchange
--------------------------------------------------
(Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K/A of any
amendment to this Form 10-K/A. [X]
The approximate aggregate market value of the voting and non-voting
common equity held by non- affiliates of the Registrant as of March 9, 2000 was
$66,550,376, based on a price of $8 7/16 per share, the closing sales price for
the Registrant's Common Stock on the American Stock Exchange on that date.
As of March 9, 2000, there were 8,049,179 outstanding shares of the
Registrant's Common Stock.
948812.2
<PAGE>
PURPOSE OF AMENDMENT
The registrant has determined to furnish the information required in
Part III of its Annual Report on Form 10-K for the fiscal year 1999 rather than
to incorporate it by reference to information to be contained in the
registrant's definitive proxy statement. The Registrant hereby amends Part III
of the Annual Report as follows to include the information required by Part III.
PART III
Item 10. Directors and Executive Officers of the Company.
Directors and Officers
The Board of Directors directs the management of the business and
affairs of the Company but retains the Advisor to manage the Company's
day-to-day affairs. The Board of Directors delegates to the Advisor
responsibilities with respect to, among other things, overseeing the portfolio
of the Company's assets and the acquisition or disposition of investments. On
December 16, 1999 J. Michael Fried resigned his position as Chairman of the
Board of Directors and Chief Executive Officer of the Company. Mr. Boesky
replaced Mr. Fried as Chairman and Chief Executive Officer and Mr. Brenner
filled the vacancy that Mr. Fried left on the Board. During 1999, the Board of
Directors held four meetings, the audit committee held a total of three meetings
and the compensation committee held one meeting. The average attendance in the
aggregate of the total number of Board and committee meetings was 96%.
The Directors and Executive Officers of the Company are as follows:
<TABLE>
<CAPTION>
Year First
Became
Director/ Term
Name Age Offices Held Officer Expires
---- ---- ------------ ------- -------
<S> <C> <C> <C>
Stuart J. Boesky 43 Chairman, President and Chief Executive Officer 1997 2000
Peter T. Allen 54 Director 1997 2001
Arthur P. Fisch 58 Director 1997 2001
Michael J. Brenner 54 Director 1999 2000
Alan P. Hirmes 45 Director, Senior Vice President and Assistant 1997 2002
Secretary
Bruce H. Brown 46 Senior Vice President 1997 ---
Mark J. Schlacter 49 Senior Vice President 1997 ---
John B. Roche(1) 42 Senior Vice President and Chief Financial Officer 1998 ---
Denise L. Kiley 40 Vice President 1997 ---
Marc D. Schnitzer 39 Vice President 1997 ---
Jeffrey S. Suchman 37 Vice President 1999 ---
</TABLE>
- --------
1 Mr. Roche has resigned, effective May 15, 2000. Mr. Hirmes has been
appointed interim Chief Financial Officer. The Company is in the process
of hiring a new Chief Financial Officer.
948812.2
1
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Richard Palermo 39 Vice President, Treasurer, Controller and Chief 1997 ---
Accounting Officer
Teresa Wicelinski 34 Secretary 1998 ---
</TABLE>
- - - - - - - - - -
STUART J. BOESKY is Chairman, President and Chief Executive Officer of the
Company and is President, Director and Chief Executive Officer of the sole
general partner of 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. ("TRCLP"). 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") and of American Mortgage Acceptance Company
("AMAC"), which companies are also advised by affiliates of Related.
PETER T. ALLEN 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 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 of AMAC.
ARTHUR P. FISCH is an 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 AMAC.
MICHAEL J. BRENNER is a Director of the Company, and is the Executive Vice
President and Chief Financial Officer of TRCLP. Prior to joining TRCLP in 1996,
Mr. Brenner was a partner with Coopers & Lybrand, having served as managing
partner of its Industry Programs and Client Satisfaction initiatives from
1993-1996, managing partner of the Detroit group of offices from 1986-1993 and
Chairman of its National Real Estate Industry Group from 1984-1986. Mr. Brenner
graduated summa cum laude from the University of Detroit with a Bachelors degree
in Business Administration and from the University of Michigan with a Masters of
Business Administration, with distinction. Mr. Brenner also serves on the Board
of Trustees of CharterMac.
ALAN P. HIRMES is a Director, Senior Vice President and Assistant Secretary of
the Company and is a Director and Senior Vice President of the sole general
partner of the Advisor. Mr. Hirmes is also the sole shareholder of one of the
general partners of Related and is a Senior Managing Director of Related, where
he is responsible for overseeing the finance and accounting departments, asset
and portfolio management, and the joint venture development program. 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 graduated from Hofstra University with a Bachelor
of Arts degree. Mr. Hirmes also serves on the Board of Trustees of CharterMac.
948812.2
2
<PAGE>
BRUCE H. BROWN is a Senior Vice President of the Company 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 is a Senior Vice President of the Company and is a Senior Vice
President of the sole general partner of the Advisor. Mr. Schlacter is a Vice
President of taxable 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 is a Senior Vice President and Chief Financial Officer of the
Company 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.
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 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 is a Vice President of the Company 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 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 is a Vice President of the Company 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.
JEFFREY S. SUCHMAN is a Vice President of the Company where he is responsible
for the financial evaluation and the initial due diligence of potential shopping
center acquisitions. Mr. Suchman joined Related in February of 1998. Prior to
joining Related, Mr. Suchman was the President of The Suchman Group from 1995 -
1998. From 1987-1995, Mr. Suchman held positions with the Macklowe Organization
as a Vice President and Rockrose Development Corp., as an Assistant Vice
President, participating in acquisitions and asset management and from 1985-1987
was employed by Helmsley-Spear, Inc., involved in commercial leasing and sales.
Mr. Suchman received a Bachelor of Arts degree in psychology from New York
University and a Master of Business Administration from Fordham University. Mr.
Suchman is currently a member of the International Council of Shopping Centers.
948812.2
3
<PAGE>
RICHARD A. PALERMO is a Vice President, the Treasurer, the Controller and Chief
Accounting Officer of the Company and is a Vice President, the Treasurer, the
Controller and Chief Accounting Officer 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 is the Secretary of the Company 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.
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 the
Company on behalf of the Advisor.
<TABLE>
<CAPTION>
Year First Became
Name Age Offices Held Director/Officer
---- ---- ------------ ----------------
<S> <C> <C>
Stuart J. Boesky 43 Chairman, President and Chief Executive Officer 1997
Alan P. Hirmes 45 Director and Senior Vice President 1997
Stephen M. Ross 59 Director 1997
Bruce H. Brown 46 Senior Vice President 1997
Mark J. Schlacter 49 Senior Vice President 1997
John B. Roche(2) 42 Senior Vice President and Chief Financial Officer 1998
Denise L. Kiley 40 Vice President 1997
Marc D. Schnitzer 39 Vice President 1997
Richard Palermo 39 Vice President, Treasurer, Controller and Chief 1997
Accounting Officer
Teresa Wicelinski 34 Secretary 1998
</TABLE>
- - - - - - - - - -
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 is a Director of the Advisor. Mr. Ross is also
President, Director and shareholder of The Related Realty Group, Inc., the
general partner of TRCLP. 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
- --------
2 Mr. Roche has resigned, effective May 15, 2000. Mr. Hirmes has been
appointed interim Chief Financial Officer. The Company is in the process of
hiring a new Chief Financial Officer.
948812.2
4
<PAGE>
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 TRCLP in 1972 to
develop, manage, finance and acquire real estate.
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 the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's 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 the Company 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, the Company believes that during the fiscal year
ended December 31, 1999, the Company's officers, directors and greater than ten
percent beneficial owners complied with all applicable Section 16(a) filing
requirements.
Item 11. Executive Compensation.
The Company has ten executive officers and five Directors (two of whom
are Independent Directors). The Company 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 Incentive Stock Option
Plan. Commencing in the calendar year 2000, Independent Directors will receive
compensation for serving as Directors at the rate of $17,500 per year payable
$7,500 in cash (or at 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. Prior to 2000, Independent Directors received $15,000
per year in aggregate compensation 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 the Company's 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 Annual Report. An affiliate of the Advisor pays all salaries, bonuses and
other compensation (other than options received under the Incentive Stock Option
Plan) to the officers of the Company and the general partner of the Advisor.
Certain directors and officers of the sole general partner of the Advisor and
certain officers of the Company receive compensation from the Advisor and its
affiliates for services performed for various affiliated entities, which may
include services performed for the Company. Such compensation may be based in
part on the performance of the Company; however, the Advisor believes that any
compensation attributable to services performed for the Company is immaterial.
Compensation Committee
The Board of Directors has a standing Compensation Committee. The
Compensation Committee's duties include the determination of compensation of the
Company's executive officers and the administration of the Company's Incentive
Stock Option Plan. The Compensation Committee is comprised of Messrs. Allen and
Fisch and held one meeting during the Company's fiscal year ended December 31,
1999. The Compensation Committee must have at least two members, each of which
must be Independent Directors.
Incentive Stock Option Plan
The Company has adopted the Incentive Stock Option 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 the Company's
success. The Compensation administers the Incentive Stock Option Plan. Pursuant
to the Incentive Stock Option Plan, if the Company's distributions per
948812.2
5
<PAGE>
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,
the Company 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.
In 1999, the Company granted a total of 30,000 options to employees of
affiliates of the Advisor. The following table sets forth information concerning
the grant of stock options to the Company's officers during the last fiscal
year:
<TABLE>
<CAPTION>
Percentage
of total Potential Realized
options Value at assumed
granted to Per annual rates of stock
employees share price appreciation at
Options in fiscal exercise Expiration the end of 10 years(4)
Name Title granted(3) year price date 5% 10%
---- ----- ------- ---- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
John B. Roche(5) Senior VP 16,000 53.3% $9.50 08/06/09 $95,592 $242,249
and CFO
</TABLE>
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 Incentive Stock Option Plan. Because the
Company does not pay salaries and bonuses to the officers of the Company 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
- --------
3 Options become exercisable one-third on each of the first three
anniversaries of the date of grant.
4 Assumed annual rates of stock price appreciation, as determined by the
Commission, for illustrative purposes only. Actual stock prices will vary
from time to time based upon market factors and the Company's financial
performance. No assurance can be given that such rates will be achieved.
5 Mr. Roche has resigned his position, effective May 15, 2000. With his
resignation, Mr. Roche will forfeit back to the Company all of his options,
none of which have vested.
948812.2
6
<PAGE>
sized companies in similar industries. The Committee also evaluates the
performance of management when determining the number of options to be issued.
The Company' grant of stock options are structured to link the
compensation of the officers of the Company, the officers of the general partner
of the Advisor, and the officers and employees of affiliates of the Advisor with
the Company's performance. Through the establishment of the stock option plan,
the Company has aligned the financial interests of its executives with the
results of the Company's performance, thus enhancing shareholder value. The
Compensation Committee may only grant options if certain performance levels are
met and is limited in the number of options which may be granted each year (See
"Incentive 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 the Company's industry, with such compensation contingent upon the
Company's 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 the
Company's 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 the Company is
externally advised and the only compensation that currently may be paid to its
executives are options pursuant to the Incentive Stock Option Plan, it is
unlikely that Section 162 (m) will present any concerns.
COMPENSATION COMMITTEE
Peter T. Allen
Arthur P. Fisch
Stock Performance Graph
The following stock performance graph compares the Company's
performance to the S&P 500 and the index of equity real estate investment trusts
prepared by 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.
948812.2
7
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
Cumulative Total Return
- -----------------------
10/13/97 12/97 12/98 12/99
----------- ---------- ----------- -----------
AEGIS $100 103 97 96
S&P 500 $100 103 132 160
NAREIT EQUITY $100 102 84 80
- - - - - - - - - -
Item 12. Security Ownership of Certain Beneficial Owners and Management.
As of April 17, 2000, one person was known by the Company to be the
beneficial owner of more than five percent of the outstanding shares of Common
Stock.
<TABLE>
<CAPTION>
Name and address of Amount and nature of beneficial
Title of class beneficial owner ownership Percentage of class
-------------- ---------------- --------- -------------------
<S> <C> <C> <C>
Common Warren E. Buffet 406,000 shares(6) 5.04%
Stock 1440 Kiewit Plaza
Omaha, NE 6813
</TABLE>
- - - - - - - - - -
As of April 17, 2000, the directors of the sole general partner of the
Advisor own, in the aggregate, 100% of the voting stock of the sole general
partner of the Advisor.
- ----------------------
6 The ownership of Common shares reported herein is based upon 13G filings
with the Securities and Exchange Commission.
948812.2
8
<PAGE>
As of April 17, 2000, directors and executive officers of the Company
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 Percentage
Name Title Beneficial Ownership of Class
---- ----- -------------------- --------
<S> <C> <C> <C>
Stephen M. Ross Director of Related Aegis 149,768 shares(a)(b)(c) 1.84%
Alan P. Hirmes Director, Senior VP, and Assistant Secretary 94,816 shares(c)(d)(e) 1.17%
of the Company; Director and Senior VP of
Related Aegis
Stuart J. Boesky Director, President, and CEO of the 154,426 shares(c)(f)(g)(h) 1.89%
Company; President, CEO and Director of
Related Aegis
Peter T. Allen Director of the Company 2,376 shares *
Arthur P. Fisch Director of the Company 2,376 shares *
John B. Roche(n) Senior VP and CFO of the Company; Senior 2,000 shares *
VP and CFO of Related Aegis
Bruce H. Brown Senior VP of the Company; Senior VP of 400 shares *
Related Aegis
Mark J. Schlacter Senior VP of the Company; Senior VP of 3,371 shares(i) (j) *
Related Aegis
All Officers and Directors of the Company and Related Aegis as a 409,533 shares(f)(k)(l) 4.94%(m)
group (13 persons)
</TABLE>
* Less than 1% of the Common Stock issued by the Company.
(a) Includes 55,791 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.
(b) Includes 12,147 OP Units which are convertible to shares of Common
Stock on a one-to-one basis commencing on December 9, 2000.
(c) Includes 2,271 OP Units held by Related Capital Company, in which
Messrs. Ross, Boesky and Hirmes hold a majority of the direct and
indirect equity interest. 1,574 OP Units are currently convertible to
shares of Common Stock on a one-to-one basis. 697 OP Units are
convertible to shares of Common Stock on a one-to-one basis, commencing
December 9, 2000.
(d) Includes 41,646 OP Units, which are currently convertible to shares of
Common Stock on a one to one basis.
(e) Includes 23,766 OP Units which are convertible to shares of Common
Stock on a one-to-one basis commencing on December 9, 2000.
(f) Includes 15,200 shares owned by BF Security Partners, of which Mr.
Boesky is a 50% equity owner.
(g) Includes 60,778 OP Units which are currently convertible to shares of
Common Stock on a one-to-one basis.
(h) Includes 37,994 OP Units which are convertible to shares of Common
Stock on a one-to-one basis commencing on December 9, 2000.
(i) Includes 2,075 OP Units which are currently convertible to shares of
Common Stock on a one-to-one basis
(j) Includes 1,296 OP Units which are convertible to shares of Common Stock
on a one-to-one basis, commencing December 9, 2000
(k) Includes 160,290 OP Units, which are currently convertible to shares of
Common Stock on a one to one basis.
948812.2
9
<PAGE>
(l) Includes 77,474 OP Units which are convertible to shares of Common
Stock on a one-to-one basis commencing on December 9, 2000.
(m) Percent of Class assumes that (i) with respect to each individual
person, all OP Units held by such person have been converted to shares
of Common Stock and (ii) with respect to all officers and directors as
a group that all such OP Units held by all such persons have been
converted to shares of Common Stock.
(n) Mr. Roche has resigned his position, effective May 15, 2000.
Item 13. Certain Relationships and Related Transactions.
The Company has and will continue to have certain relationships with
the Advisor and its affiliates. However, there have been no direct financial
transactions between the Company and its Directors and officers or the directors
and officers of the sole General Partner of the Advisor.
The Company 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 the Company, 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 the Company and consistent with such investment programs as the Directors may
adopt from time to time in conformity with the Company's Articles of Amendment
and Restatement (the "Articles").
Although the Directors have continuing exclusive authority over the
management of the Company, the conduct of its affairs and the management and
disposition of the Company's 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 the Company; (ii) acquire, retain or sell
the Company's assets; (iii) seek out, present and recommend investment
opportunities consistent with the Company's investment policies and objectives,
and negotiate on behalf of the Company 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 the Company and in that
capacity hold escrows on behalf of mortgagors in connection with the servicing
of mortgages; (v) obtain for the Company such services as may be required in
acquiring and disposing of investments, disbursing and collecting the funds of
the Company, paying the debts and fulfilling the obligations of the Company, and
handling, prosecuting and settling any claims of the Company, including
foreclosing and otherwise enforcing mortgages and other liens securing
investments; (vi) obtain for the Company such services as may be required for
property management, mortgage brokerage and servicing, and other activities
relating to the investment portfolio of the Company; (vii) evaluate, structure
and negotiate prepayments or sales of the Company's mortgage investments and
mortgage securities; (viii) monitor operations and expenses of the Company; and
(ix) from time to time, or as requested by the Directors, make reports to the
Company as to its performance of the foregoing services.
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 the Company, 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 the Company prior to
October 1, 2001, other than for Cause. "Cause" is defined as gross negligence or
willful misconduct of the Advisor. The Company 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 the Company's then
outstanding shares is required to approve a dissolution and liquidation of the
Company that is not recommended by the Advisor and the Majority Vote of
Stockholders is required to approve a liquidation of the Company 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, the Company may
dissolve and liquidate upon the Majority Vote of Stockholders.
948812.2
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Pursuant to the terms of the Advisory Agreement, the Advisor is
entitled to receive the fees and other compensation set forth below:
Fee/Compensation(7) Amount
- ----------------- ------
Acquisition Fee 3.75% of the acquisition
price of each property
acquired by the
Company, the
Operating Partnership
and their respective
subsidiaries.
Mortgage Selection Fee 3.0% of the principal
amount of each
mortgage loan
originated or
acquired by the
Company, the
Operating Partnership
and their respective
subsidiaries.
Mortgage Placement Fee 0.75% of the principal
amount of each
mortgage loan
originated or
acquired by the
Company, the
Operating Partnership
and their respective
subsidiaries (payable
by the borrower, and
not the Company).
Asset Management Fee / Special Distribution 0.375% per annum of total
invested assets of the
Company, the Operating
Partnership and their
respective subsidiaries.
Operating Expense Reimbursement For direct expenses incurred
by the Advisor in an amount
not to exceed $282,272 per
annum (subject to increase
based on increases in the
Company's, the Operating
Partnership's and their
respective subsidiaries'
assets and to annual
increases based upon
increases in the Consumer
Price Index).
Incentive Stock Options The Advisor may receive
options to acquire
additional shares pursuant
to the Company's Incentive
Stock Option Plan only if
the Company's distributions
in any year exceed $0.9869
per share (i.e., the 1996
pro forma distributions set
forth the Company's
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 Company in
connection with a
liquidation of the
Company's assets
supervised by the
Advisor.
- - - - - - - - - -
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 the Company, or act as manager to any other person or entity
having investment policies whether similar or dissimilar to those of the
Company. Before the Advisor, the officers and directors of the Advisor and all
persons controlled by the Advisor and its officers and
- ------------
7 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.
948812.2
11
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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 the Company if (i) such opportunity is of a character which could
be taken by the Company, (ii) such opportunity is compatible with the Company's
investment objectives and policies and (iii) the Company has the financial
resources to take advantage of such opportunity.
The Articles and the Advisory Agreement provide that the Company 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 the Company's twenty-eight properties are managed by the
Property Manager, an affiliate of the Advisor. The Property Manager receives
standard leasing commissions for space leased to new tenants and lease renewals.
948812.2
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment on Form
10-K/A to its Annual Report on Form 10-K to be signed on its behalf by the
undersigned, thereunto duly authorized.
AEGIS REALTY, INC.
Date: April 28, 2000 By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Director and Senior Vice President
948812.2
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