SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Aegis Realty, Inc.
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<PAGE>
AEGIS REALTY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
on
June 14, 2000
-------------
May 10, 2000
To the Stockholders of Aegis Realty, Inc.:
NOTICE IS HEREBY GIVEN THAT the 2000 Annual Meeting of Aegis Realty, Inc.
will be held Wednesday, June 14, 2000 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 2003.
(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.
This year, for the first time, you can vote your shares by Internet or
phone. Follow the instructions on the enclosed proxy card if you wish to do so.
Or, if you prefer to vote by regular mail, please sign, date and return the
enclosed proxy card in the enclosed return envelope as soon as possible.
The Board of Directors has fixed the close of business on April 17, 2000
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/ Stuart J. Boesky
Stuart J. Boesky
Chairman of the Board and
Chief Executive Officer
IT IS MOST IMPORTANT THAT YOU VOTE YOUR SHARES EITHER BY INTERNET, PHONE OR
MAIL. IF YOU DECIDE TO DO SO BY MAIL, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED STAMPED, SELF-ADDRESSED PROXY CARD.
YOUR FAILURE TO PROMPTLY VOTE YOUR SHARES INCREASES THE OPERATING COSTS OF YOUR
INVESTMENT.
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YOU ARE CORDIALLY INVITED TO PERSONALLY ATTEND THE MEETING, BUT YOU SHOULD VOTE
BY PHONE, ON THE INTERNET OR BY MAIL WHETHER OR NOT YOU ATTEND THE MEETING.
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AEGIS REALTY, INC.
625 MADISON AVENUE
NEW YORK, NEW YORK, 10022
---------------
PROXY STATEMENT
---------------
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 14, 2000 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 May 1,
2000. 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 17, 2000 (the "Record Date") will be entitled to vote at the
Meeting or any adjournments thereof.
This year, for the first time, Stockholders are able to vote their Shares
by telephone or on the Internet. If you wish to vote your Shares by telephone or
the Internet, follow the instructions on the attached proxy card.
Shares represented by properly executed proxy cards, Internet votes or
telephone votes received by Aegis at or prior to the Meeting will be voted
according to the instructions indicated by the Stockholder. If no 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 17, 2000 approximately 8,049,179 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 2003.
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
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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 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 2003.
Name of Director/
Nominee for Election Age Principal Occupation
- -------------------- --- --------------------
Stuart J. Boesky 43 Mr. Boesky is Chairman, President and Chief
Executive Officer of Aegis and is President,
Director and Chief Executive 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. ("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.
Michael J. Brenner 54 Mr. Brenner is a Director of Aegis, 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.
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 Aegis' assets and the
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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 Aegis. 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 Aegis are as follows:
Year First Became Term
Name Age Offices Held Director/Officer Expires
- ---- --- ------------ ---------------- -------
Stuart J. Boesky 43 Chairman, President and Chief 1997 2000
Executive Officer
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 Secretary 1997 2002
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 --
Richard A. Palermo 39 Vice President, Treasurer,
Controller and Chief Accounting
Officer 1997 --
Teresa Wicelinski 34 Secretary 1998 --
- -----------
(1) Mr. Roche has resigned, effective May 15, 2000. Mr. Hirmes has been
appointed interim Chief Financial Officer. Aegis is in the process of hiring a
new Chief Financial Officer.
Biographical information with respect to Messrs. Boesky and Brenner is set forth
above.
ALAN P. HIRMES is a Director, Senior Vice President and Assistant Secretary of
Aegis 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
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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.
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.
BRUCE H. BROWN 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 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 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 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. 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.
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DENISE L. KILEY 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 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 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.
JEFFREY S. SUCHMAN is a Vice President of Aegis 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.
RICHARD A. PALERMO is a Vice President, the Treasurer, the Controller and Chief
Accounting Officer of Aegis 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 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, 1999.
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 held one meeting during Aegis' fiscal year ended December 31,
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1999. 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, 1999, Aegis' officers, directors and greater than ten percent
beneficial owners complied with all applicable Section 16(a) filing
requirements.
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
- ---- --- ------------ ----------------
Stuart J. Boesky 43 President and Chief Executive Officer 1997
and Director
Alan P. Hirmes 45 Senior Vice President and Director 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 (1) 42 Senior Vice President and
Chief Financial Officer 1998
Denise L. Kiley 40 Vice President 1997
Marc D. Schnitzer 39 Vice President 1997
Richard A. Palermo 39 Vice President, Treasurer,
Controller and Chief Accounting
Officer 1997
Teresa Wicelinski 34 Secretary 1998
- ---------------
(1) Mr. Roche has resigned, effective May 15, 2000. Mr. Hirmes has been
appointed interim Chief Financial Officer.
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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 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.
Executive Compensation
Aegis has ten 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. 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
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 17, 2000, one person was known by Aegis to be the beneficial
owner of more than five percent of the outstanding Shares of Common Stock.
Amount and Nature of Percentage of
Name and Address Beneficial Ownership Common Shares Outstanding
- ---------------- -------------------- -------------------------
Warren E. Buffet
1440 Kiewit Plaza
Omaha, NE 68131 406,000 Shares (1) 5.04%
(1) The ownership of Common Shares reported herein is based upon 13-G filings
with the Securities and Exchange Commission
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.
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As of April 17, 2000, directors and executive 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
- ---- ----- -------------------- ----------------
<S> <C> <C> <C>
Stephen M. Ross Director of Related Aegis 149,768 Shares(1,2,3) 1.84%
Alan P. Hirmes Director, Senior VP, 94,816 Shares(3,4,5) 1.17%
and Assistant Secretary of Aegis
Director & SVP of Related Aegis
Stuart J. Boesky Director, President, and CEO of 154,426 Shares(3,6,7,8) 1.89%
Aegis and President, CEO and
Director of Related Aegis
Peter T. Allen Director of Aegis 2,376 Shares *
Arthur P. Fisch Director of Aegis 2,376 Shares *
John B. Roche (14) 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 3,371 Shares(9,10) *
Related Aegis
All Officers and Directors of Aegis and Related Aegis 409,533 Shares(6,11,12) 4.94%(13)
as a group (13 persons)
</TABLE>
*Less than 1% of the Common Stock issued by Aegis.
(1) 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.
(2) Includes 12,147 OP Units which are convertible to Shares of Common Stock
on a one-to-one basis commencing on December 9, 2000.
(3) 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.
(4) Includes 41,646 OP Units, which are currently convertible to Shares of
Common Stock on a one to one basis.
(5) Includes 23,766 OP Units which are convertible to Shares of Common Stock
on a one-to-one basis commencing on December 9, 2000.
(6) Includes 15,200 shares owned by BF Security Partners, of which Mr. Boesky
is a 50% equity owner.
(7) Includes 60,778 OP Units which are currently convertible to Shares of
Common Stock on a one-to-one basis.
(8) Includes 37,994 OP Units which are convertible to Shares of Common Stock
on a one-to-one basis commencing on December 9, 2000.
(9) Includes 2,075 OP Units which are currently convertible to Shares of
Common Stock on a one-to-one basis.
(10) Includes 1,296 OP Units which are convertible to Shares of Common Stock on
a one-to-one basis, commencing December 9, 2000.
(11) Includes 160,290 OP Units, which are currently convertible to Shares of
Common Stock on a one to one basis.
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(12) Includes 77,474 OP Units which are convertible to Shares of Common Stock
on a one-to-one basis commencing on December 9, 2000.
(13) 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.
(14) Mr. Roche has resigned his position, effective May 15, 2000.
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.
In 1999, Aegis 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>
Potential
realized value
at assumed
Percentage of annual rates of
total options stock price
granted to Per share appreciation at the
Options employees in exercise Expiration end of 10 years (2)
Name Title Granted (1) fiscal year price Date 5% 10%
- ---- ----- ----------- ----------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
John B. Roche (3) SVP & CFO 16,000 53.3% $9.50 08/06/09 $95,592 $242,249
</TABLE>
(1) Options become exercisable one-third on each of the first three
anniversaries of the date of grant.
12
<PAGE>
(2) Assumed annual rates of stock price appreciation, as determined by the
SEC, 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.
(3) Mr. Roche has resigned his position, effective May 15, 2000. With his
resignation, Mr. Roche will forfeit back to Aegis all of his options, none
of which have vested.
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 of Aegis, the officers of the general partner of the Advisor, and
the officers and employees of affiliates 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 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
13
<PAGE>
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.
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
14
<PAGE>
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
$282,272 per annum (subject to further
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).
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.
15
<PAGE>
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.
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
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
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
2001 Annual Meeting of Stockholders must be received by Aegis at its principal
executive office not later than January 6, 2001 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
16
<PAGE>
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, 1999 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, or, if you wish to vote by
telephone or Internet, follow the instructions on the proxy card. Your failure
to do so will increase the costs of operating Aegis and decrease the return on
your investment.
By Order of the Board of Directors
/s/ Stuart J. Boesky
May 10, 2000 Stuart J. Boesky
Chairman of the Board and
Chief Executive Officer
17
<PAGE>
[Aegis Logo]
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.
This year, for the first time, you can vote your Shares by Internet or phone.
Follow the instructions on the reverse side of proxy card if you wish to do so.
If you chose to vote by mail, 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.
- --------------------------------------------------------------------------------
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 Alan P. Hirmes, with the power to appoint his
substitute, and hereby authorizes him 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 17, 2000 at the Annual Meeting of
Stockholders to be held on June 14, 2000 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
18
<PAGE>
Vote By Telephone
- -----------------
It's fast, convenient and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-888-779-8683)
- --------------------------------------------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number 1-877-PRX-VOTE (1-877-779-8683).
3. Enter your 14-digit Voter Control Number located on your Proxy Card above
your name.
4. Follow the recorded Instructions.
- --------------------------------------------------------------------------------
Your vote is important!
Call 1-877-PRX-VOTE anytime!
Vote By Internet
- ----------------
It's fast, convenient and your vote is immediately confirmed and posted.
- --------------------------------------------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Go to the Website http://www.eproxyvote.com/aer
3. Enter your 14-digit Voter Control Number located on your Proxy Card above
your name.
4. Follow the Instructions provided.
- --------------------------------------------------------------------------------
Your vote is important!
Go to http://www.eproxyvote.com/aer anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
================================================================================
DETACH HERE
[X] Please mark votes as in this example.
1. Election of Directors.
Nominees: Stuart J. Boesky
and Michael J. Brenner
FOR WITHELD
|_| |_|
|_| _______________________________________
For both nominees except as noted above
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED NOMINEES
Signature:_______________________ Date:__________
2. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting.
Mark here if you Mark here for address
plan to attend the change and note
meeting below
|_| |_|
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT |_|
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:___________
19
