<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
WESTERN PROPERTIES TRUST
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
WESTERN PROPERTIES TRUST
2200 POWELL STREET, SUITE 600
EMERYVILLE, CALIFORNIA 94608
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 2000
Notice is hereby given that the annual meeting of the shareholders of
Western Properties Trust, formerly known as Western Investment Real Estate
Trust, will be held at the Bank of America Center, Bankers Club of San
Francisco, Pacific Room, 52nd Floor, 555 California Street, San Francisco,
California, at 10:00 a.m., on Thursday, May 11, 2000, for the following
purposes:
(1) To elect two trustees to Class III for three-year terms to expire at the
conclusion of the 2003 annual meeting.
(2) To ratify the appointment of independent auditors for the Company.
(3) To transact any other business that may properly come before the
meeting.
All shareholders of record at the close of business on March 15, 2000, are
entitled to vote at the meeting.
A majority of the outstanding shares must be represented at the meeting in
person or by proxy in order to transact business. TO ASSURE A PROPER
REPRESENTATION AT THE MEETING PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND
MAIL IT PROMPTLY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. Your proxy will not be
used if you are personally present at the meeting and you indicate a desire to
revoke such proxy or if a subsequently dated proxy of yours is delivered prior
to or at the meeting.
Dated: Emeryville, California
March 30, 2000
/s/ Barbara J. Donham
Barbara J. Donham
Secretary
If your shares are held in the name of a brokerage firm, bank, nominee or other
institution, only it can vote your shares. Please PROMPTLY CONTACT the person
responsible for your account and GIVE INSTRUCTIONS for your shares to be voted.
<PAGE>
WESTERN PROPERTIES TRUST
2200 POWELL STREET, SUITE 600
EMERYVILLE, CALIFORNIA 94608
PROXY STATEMENT
THIS STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES
BY THE MANAGEMENT OF WESTERN PROPERTIES TRUST, hereinafter called "Western" or
"the Company," for use at the annual meeting of shareholders to be held on
Thursday, May 11, 2000, at 10:00 a.m., at the Bank of America Center, Bankers
Club of San Francisco, Pacific Room, 52nd Floor, 555 California Street, San
Francisco, California, and at any and all postponements and adjournments
thereof, for the purposes set forth in the Notice of Annual Meeting of
Shareholders. The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited personally or by
telephone by trustees, officers or other employees of the Company.
Only shareholders of record of Western at the close of business on
March 15, 2000, will be entitled to vote at the annual meeting. The approximate
date on which the proxy statement and form of proxy are first sent or given to
shareholders will be March 30, 2000.
You are requested to sign, date and return the accompanying proxy in the
enclosed envelope. Proxies duly executed and received by the Company on or
before 10:00 a.m. on May 11, 2000, will be voted in accordance with the
instructions thereon. Such proxies may be revoked by executing and delivering to
Western a written revocation or by executing and delivering a subsequently dated
proxy before or at the meeting or by voting by ballot at the meeting.
As of the record date, 17,297,250 shares of the Company's shares of
beneficial interest were issued and outstanding, each of which is entitled to
one vote at the annual meeting. There will be no cumulative voting for the
election of trustees.
PROPOSAL NO. 1
ELECTION OF TRUSTEES
NOMINEES
Two members of the Board of Trustees (Class III) are to be elected at the
2000 annual meeting. Under the terms of the Declaration of Trust, the trustees
who are not up for election this year will continue to serve until they stand
for election as provided in the Declaration of Trust. In 2001, one trustee
(Class I) will stand for election for a three-year term. In 2002, the remaining
trustees (Class II) will stand for election for a three-year term. All proxies
received by the Company will be voted in accordance with the specifications on
the proxy. Unless the proxy specifies otherwise, proxies held by the trustees
will be voted in the manner described below under "Voting" for the election of
the two nominees listed under "Trustees and Executive Officers," to hold office
until the expiration of their three-year term and until their respective
successors shall be elected and qualified. In the unanticipated event that
either of the current nominees declines to or cannot be a candidate at the
annual meeting, all proxies held by the trustees will be voted in favor of the
remaining nominee and for such substitute nominees (if any) as shall be
designated by the trustees.
1
<PAGE>
Each of the two nominees, if elected, will serve for a three-year term to
expire at the conclusion of the 2003 annual meeting of shareholders and until
their respective successors shall be elected and qualified.
VOTING
Each shareholder will be entitled to cast one vote for each share registered
in his or her name at the close of business on the record date of March 15,
2000, for each of the trustee positions to be filled. The affirmative vote of a
majority of the shares represented in person or by proxy at the annual meeting
is required to elect a trustee. There will be no cumulative voting for the
election of trustees.
All shares represented by proxies solicited by the trustees will be voted in
equal amounts for the two nominees named hereafter, unless a proxy specifies
otherwise. The two nominees receiving the greatest number of affirmative votes
shall be elected to the office of trustee. The withholding of a vote for a
nominee will have the practical effect of voting against that nominee.
TRUSTEES AND EXECUTIVE OFFICERS
Information regarding the two Class III trustees nominated for election as
trustees this year for a term of three years expiring at the conclusion of the
2003 annual meeting of shareholders is set forth below:
<TABLE>
<CAPTION>
TRUSTEE TERM TO
NAME PRINCIPAL OCCUPATION SINCE EXPIRE
---- -------------------- ------- ------
<S> <C> <C> <C>
Reginald B. Oliver Mr. Oliver, 61, is a private investor. He was Executive Vice 1984 2000
President of the Pershing Division of Donaldson, Lufkin & (Class III)
Jenrette Securities Corporation, an investment banking firm,
and continues to be associated with the firm as a
consultant.
Joseph P. Colmery Mr. Colmery, 46, has been a consultant to several companies 1999 2000
within the financial services industry since his retirement (Class III)
in December 1997. For the period 1996 through December 1997,
he served as President and Chief Executive Officer of
U.S. Bancorp and prior to that he served as President and
Chief Executive Officer of California Bancshares, which was
acquired by U.S. Bancorp in 1996.
Information regarding the trustees who are not standing for election this year is set forth below:
Dennis D. Ryan Mr. Ryan, 44, is Executive Vice President and Chief 1994 2001
Financial Officer of Western. Prior to joining the Company (Class I)
in 1993, Mr. Ryan was a financial and real estate
consultant to a variety of clients. Prior to 1992, he was a
Vice President and Chief Financial Officer of Reininga
Corporation, a shopping center development, leasing and
property management firm.
James L. Stell Mr. Stell, 76, is the retired Vice Chairman of the Board of 1985 2002
Lucky Stores, Inc. During the past five years his principal (Class II)
occupation has been trustee of Western.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
TRUSTEE TERM TO
NAME PRINCIPAL OCCUPATION SINCE EXPIRE
---- -------------------- ------- ------
<S> <C> <C> <C>
Bradley N. Blake Mr. Blake, 41, is Chairman, President, Chief Executive 1998 2002
Officer and trustee of Western. Prior to joining the Company (Class II)
in January 1998, he was a Managing Director of Pacific
Retail Trust, a private real estate investment trust, and
prior to December 1996, he was Senior Vice President of
Spieker Properties, a public real estate investment trust.
L. Michael Foley Mr. Foley, 61, has been a principal of L. Michael Foley and 1998 2002
Associates, a real estate and corporate consulting firm, (Class II)
since 1996. He also serves as a Director of BRE Property,
Inc., a REIT focused solely on multi-family properties
located in the western United States. He has been a Director
of BRE since 1994. He was Senior Vice President and Chief
Financial Officer of Coldwell Banker Corporation for the
period 1995 through 1996. Prior to 1995, he served as
Chairman and Chief Executive Officer of Sears Savings Bank;
Senior Executive Vice President of Coldwell Banker Real
Estate Group; and Executive Vice President of Homart
Development Co.
Information regarding the current executive officers who are not trustees of the Company is set forth
below:
Josh Smith Mr. Smith, 36, is Senior Vice President, Chief Investment
Officer of the Company. Prior to joining the Company in
February 1998, he was Senior Vice President of Pacific
Retail Trust, and prior to December 1996, he was a Vice
President of Spieker Properties.
L. Gerald Hunt Mr. Hunt, 34, is Senior Vice President, Chief Operations
Officer of the Company. Prior to joining the Company in
February 1998, he was a Vice President of Pacific Retail
Trust, and prior to December 1996, he was a project director
at Spieker Properties.
</TABLE>
BOARD AND COMMITTEE MEETINGS
During 1999, the Board of Trustees held 6 meetings and the Executive
Committee of the Board of Trustees met telephonically or in person 19 times. The
Executive Committee is presently comprised of Reginald B. Oliver, L. Michael
Foley, Bradley N. Blake and Dennis D. Ryan. The Committee maintains such powers
and exercises such duties of the Board of Trustees in the management of the
business of Western as are delegated to it from time to time by the Board of
Trustees.
During 1999, the Board of Trustees had three additional standing committees:
a Nominating Committee, an Audit Committee and a Compensation Committee.
The functions of the Nominating Committee include screening and recommending
candidates for Board positions, evaluating Board performance and making
recommendations to the Board from time to time as to matters of corporate
governance. The Nominating Committee will consider nominees recommended by
shareholders. The name and other pertinent information of the nominee should be
submitted to the Secretary of the Company. The Nominating Committee members are
L. Michael Foley, James L. Stell and Joseph P. Colmery. The committee met three
times during 1999.
3
<PAGE>
The Audit Committee meets with the Company's auditors at least twice
annually to review accounting and auditing procedures, to report to the Board of
Trustees any recommended changes in auditing procedures and to recommend to the
Board of Trustees at the close of each fiscal year the independent auditing firm
to be selected for the ensuing fiscal year. The Audit Committee has reviewed and
discussed the Company's audited financial statements for the year ended
December 31, 1999 with the Company's management and the Company's independent
auditors, KPMG LLP. Also, the matters required to be discussed by SAS 61 were
covered with KPMG LLP at the time of the review of the year-end financial
statements. The Audit Committee has received the written disclosures and the
letter from the independent auditors required by Independence Standards Board
Standard No. 1 and has discussed the independent auditors' independence with
them. Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Trustees that the audited financial statements for
the year ended December 31, 1999 be included in the Company's annual report on
Form 10-K for the year ended December 31, 1999 for filing with the Securities
and Exchange Commission (the "SEC"). The current Audit Committee members are
James L. Stell, Reginald B. Oliver and L. Michael Foley. The Board of Trustees
adopted a written charter for the Audit Committee in July 1999. The charter is
attached to this Proxy Statement as Appendix A. The Audit Committee members
believe that the Committee complied with the charter in 1999. All three members
of the Audit Committee are independent, and all members of the Audit Committee
during 1999 were independent, as independence is defined under Section 121(A) of
the AMEX listing standards. During 1999, the Audit Committee was comprised of
James L. Stell, Reginald B. Oliver and Robert J. McLaughlin. During 1999, the
Committee met two times.
The Compensation Committee is responsible for administering and approving
compensation for trustees and officers and certain other employees. The
Committee is presently comprised of Reginald B. Oliver, James L. Stell and
Joseph P. Colmery. During 1999, the Committee met two times.
During 1999, each of the trustees attended at least 75% of the total number
of board meetings and meetings of committees on which they served for the period
they were in office. In addition to the formal Committee meetings listed above,
members of each of the Committees met informally either in person or
telephonically on numbers of occassions during 1999 as needed. Robert J.
McLaughlin served as Chairman of the Board during 1999 until his resignation in
December 1999.
OWNERSHIP OF SHARES
Western currently has one outstanding class of voting securities, comprised
of shares of beneficial interest without par value.
As of December 31, 1999, the Company was not aware of any beneficial owners
of more than 5% of its outstanding shares, based on information publicly
reported to the Securities and Exchange Commission.
CEDE, a stock depository for brokers and other nominees, as of the record
date, March 15, 2000, held approximately 15,477,518 shares, or 89% of the
Company's outstanding shares, in its capacity as a stock depository.
The following table sets forth the number of shares of beneficial interest
beneficially owned by each trustee, by each nominee for trustee and by trustees
and executive officers in office, and the
4
<PAGE>
percentage of the Company's outstanding shares represented by such beneficial
ownership. Such persons had sole voting and investment power with respect to the
shares listed except as otherwise noted.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED DIRECTLY OR PERCENT
INDIRECTLY AS OF OF
NAME OF BENEFICIAL OWNER MARCH 15, 2000(1) CLASS(2)
- ------------------------ ------------------- --------
<S> <C> <C>
James L. Stell 26,000 (0.15%)(3)
Bradley N. Blake 255,319 (1.48%)(2)(4)
L. Michael Foley 12,000 (0.07%)
Reginald B. Oliver 138,600 (0.80%)(5)
Joseph P. Colmery 12,000 (0.07%)
Dennis D. Ryan 94,235 (0.54%)(2)(6)
Josh Smith 63,946 (0.37%)(2)(7)
L. Gerald Hunt 58,185 (0.34%)(2)(7)
All nominees, trustees and executive officers
(8 persons) 660,285 (3.82%)
</TABLE>
- ---------
(1) The number and percentage of shares shown in this table reflect beneficial
ownership in accordance with Rule 13d-3 of the Securities Exchange Act of
1934, including shares that are not owned but as to which options are
outstanding and may be exercised within 60 days of the date of this proxy
statement.
(2) For purposes of calculating percentage of shares owned, total shares
outstanding and shares owned include restricted shares awarded to date
(restricted shares vest over a three-year period).
(3) Includes 4,000 shares held by Mr. Stell as Trustee for a family trust.
Mr. Stell disclaims any ownership of such shares. Includes beneficial
ownership of 4,000 shares that may be acquired within 60 days pursuant to
stock option awards.
(4) Includes beneficial ownership of 125,000 shares that may be acquired within
60 days pursuant to stock option awards.
(5) Includes 6,200 shares held by Mr. Oliver's adult children and 38,400 shares
held by Mr. Oliver as Trustee and Custodian for a minor child under his
custodial care. Mr. Oliver disclaims any ownership of such shares. Includes
beneficial ownership of 4,000 shares that may be acquired within 60 days
pursuant to stock option awards.
(6) Includes beneficial ownership of 48,200 shares that may be acquired within
60 days pursuant to stock option awards.
(7) Includes beneficial ownership of 24,200 shares that may be acquired within
60 days pursuant to stock option awards.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's officers and trustees, and persons who own more than ten
percent of the Company's shares, to file reports of securities ownership and
changes in such ownership with the SEC. Officers, trustees and greater than ten
percent shareholders also are required by rules promulgated by the SEC to
furnish the Company with copies of all Section 16(a) forms they file.
Based upon a review of the copies of such forms and other information, the
Company believes that, during 1999, its officers and trustees complied with all
applicable Section 16(a) filing requirements. The Company believes that there
were no beneficial owners of greater than ten percent of its shares during 1999.
5
<PAGE>
COMPENSATION OF TRUSTEES
During 1999, the independent trustees, James L. Stell, L. Michael Foley,
Reginald B. Oliver and Joseph P. Colmery, each received an annual fee of $16,000
and $750 for each Board meeting or Board committee meeting attended and $500 for
each telephonic meeting of the Board or Board committee. During 1999, total fees
paid to the independent trustees were $99,500. Additionally, Robert J.
McLaughlin received $50,000 in fees for his services as Chairman of the Board.
Management trustees and officers receive no compensation from the Company
for serving as trustees or attending meetings separate from that shown in the
Summary Compensation Table below.
The independent trustees are eligible for stock option awards pursuant to
the 1998 Equity Incentive Plan. During 1999 options to purchase shares of
beneficial interest were granted to Joseph P. Colmery. Each of the independent
trustees holds 10,000 options.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows for the fiscal years ending December 31, 1999,
1998 and 1997, certain compensation paid by Western to its Chief Executive
Officer and the other most highly compensated executive officers whose
compensation exceeded $100,000 at December 31, 1999:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
------------------------------------------ --------------------------------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION (1) AWARD(S)(2) OPTIONS/SARS COMPENSATION(3)
POSITION YEAR ($) ($) ($) ($) (#) ($)
- ------------------- -------- --------- --------- ------------------ ----------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Bradley N. Blake 1999 $300,000 $150,000 $100,575 $ 112,800 -- $9,600
CEO, President & 1998 275,000 140,000 100,575 207,189 250,000 4,800
Chairman 1997 -- -- -- -- -- --
Dennis D. Ryan 1999 $200,000 $ 49,500 $ 60,458 $ 45,120 -- $9,600
EVP, Chief 1998 197,916 45,000 60,421 110,860 50,000 9,600
Financial Officer 1997 175,000 -- 338 -- 3,000 9,500
Josh Smith 1999 $165,000 $ 49,000 50,192 $ 33,840 -- 48,000 $9,600
SVP, Chief 1998 147,548 50,000 50,191 110,860 -- 4,426
Investment 1997 -- -- -- -- --
Officer
L. Gerald Hunt 1999 $160,000 $ 51,500 $ 50,172 $ 33,840 -- $9,600
SVP, Chief 1998 134,135 40,000 50,172 110,860 48,000 7,798
Operations 1997 -- -- -- -- -- --
Officer
</TABLE>
- ----------
(1) Consists of: (a) sums forgiven relative to loans made as follows:
In January and February 1998, Western loaned an aggregate of
$1.3 million to the named executive officers. The loan proceeds
were used to fund the purchase of Company shares of beneficial
interest by the named officers. The loans bear interest at a rate
of 5.58% per annum, (equal to the applicable Federal Rate in effect
on the date the promissory notes were issued) are
6
<PAGE>
recourse and are secured by a pledge of certain shares of
beneficial interest of Western. The amounts shown include amounts
forgiven under these loans during 1999 as follows:
<TABLE>
<CAPTION>
AMOUNT FORGIVEN CURRENT
AMOUNT OF LOAN DURING 1999 LOAN BALANCE
-------------- --------------- ------------
<S> <C> <C> <C>
Bradley N. Blake $500,000 $100,000 $300,000
Dennis D. Ryan $300,000 $ 60,000 $180,000
Josh Smith $250,000 $ 50,000 $150,000
L. Gerald Hunt $250,000 $ 50,000 $150,000
</TABLE>
and (b) life insurance premiums paid for the benefit of the named
executive officers.
(2) The amounts shown represent the dollar value on the date of grant of
restricted share awards made under Western's 1998 Equity Incentive Plan.
Each of the awards was made in February 1999 and vests over three years in
equal installments. Dividends are paid on these shares.
On December 31, 1999, the aggregate value of the restricted share awards
granted to each of the named executive officers during 1999, based on a share
price of $9.5625 at December 31, 1999, was as follows:
<TABLE>
<CAPTION>
RESTRICTED SHARE AWARDS
------------------------
NUMBER OF
DOLLAR VALUE SHARES
------------ ---------
<S> <C> <C>
Bradley N. Blake $95,625 10,000
Dennis D. Ryan $38,250 4,000
Josh Smith $28,688 3,000
L. Gerald Hunt $28,688 3,000
</TABLE>
(3) Amounts shown represent employer matching contributions and discretionary
contributions under Western's 401(k) Plan.
COMPENSATION PURSUANT TO PLANS OR ARRANGEMENTS
The Company is a party to employment agreements that were entered into in
January and February 1998 with each of the following executive officers:
Bradley N. Blake, Dennis D. Ryan, Josh Smith and L. Gerald Hunt. Each agreement
sets forth the terms of the individual's employment, including base salary and
potential cash incentive compensation for the first year covered by the
agreement, 401(k) contributions, stock options and restricted stock awards,
stock purchase loan and other employment benefits. The base salary and potential
cash incentive compensation are subject to renegotiation each year; amounts paid
to each officer with respect to 1999 are shown under "Compensation of Executive
Officers" above. The amount and other terms of share options and restricted
share awards issued and the original amount, outstanding balance and other terms
of share purchase loans made are also shown in above in the Summary Compensation
Table.
Mr. Blake's agreement requires the Company to use best efforts to have him
elected to the Board of Trustees for the duration of his employment.
Mr. Blake's agreement also provides that if his employment is terminated by the
Company other than for cause, he is entitled to receive a lump sum payment equal
to his prior year's salary and cash bonus. The lump sum payment shall not be
less than $400,000.
Each agreement includes terms related to a change of control of the Company.
The change of control provisions of each agreement were amended effective as of
August 4, 1999 to provide, among
7
<PAGE>
other things, that on a change of control, any remaining balance of the
executive's stock purchase loans will be forgiven and all options, restricted
stock and other shares subject to vesting will become fully vested. A "change of
control" is defined as: (a) a sale of all or substantially all of the assets of
the Company; or (b) a merger, consolidation, reorganization, or similar event as
a result of which the equity holders of the Company do not continue to hold, in
exchange for their equity interests in the Company, a majority of the
outstanding securities of the successor to the Company's business; or (c) the
change, in any twelve month period, of a majority of the members of the
Company's Board of Trustees, except that trustees who join the Board during the
twelve-month period with the approval of a majority of the existing trustees
shall not be included in this calculation.
The change of control provisions of each agreement also provide that if, in
anticipation of, or during the 12-month period following a change of control,
the executive is terminated other than for cause or resigns for "good reason,"
he shall be entitled to receive a severance package to include a lump sum cash
payment equal to two times (for Bradley N. Blake) and one time (for each of
Dennis D. Ryan, Josh Smith and L. Gerald Hunt) the current base annual salary
and the highest cash bonus paid during the prior two calendar years. The lump
sum payment shall be not less than $800,000 for Bradley N. Blake, not less than
$225,000 for Dennis D. Ryan, and not less than $175,000 for each of Josh Smith
and L. Gerald Hunt. "Good reason" is defined as: (a) a reduction in the
executive's base annual salary, bonus opportunity or a material reduction in
benefits; or (b) the executive is assigned duties inconsistent with the
executive's position, authority or responsibilities as they existed prior to the
change of control; or (c) the executive's primary office is relocated more than
35 miles from its location immediately prior to the change of control or the
executive is required to travel on Company business to a substantially greater
extent than required immediately prior to the change of control. In addition, a
resignation by the executive for any reason during the 30-day period immediately
following the first anniversary of a change of control shall be deemed to be a
resignation for "good reason" and shall entitle the executive to the lump sum
payment described above.
Western also has agreements with three former trustees, Bernard Etcheverry,
O.A. Talmage and Chester R. MacPhee, Jr. (each, a "Recipient") that provide that
the Company pay the Recipient, or his eligible spouse, a monthly stipend of
$5,000 until the later of (i) the death of the Recipient or (ii) the death of
the Recipient's eligible spouse. The actuarially determined present value of
these obligations was recorded as a restructuring charge in 1997. During 1999,
each of the three recipients received a total of $60,000 pursuant to the
agreements. The agreements provide that the Recipient or his eligible spouse, as
the case may be, will receive an accelerated payment of the amounts due under
the agreement if the net assets of the Company fall below $15 million. The
accelerated payment will be equal to the sum of (i) the present value of the
total amount the Recipient or his eligible spouse would have received under the
agreement (based on the life expectancy of the Recipient and his eligible spouse
according to an actuarial table and discounted at a rate of seven percent per
annum), and (ii) an amount sufficient to cover the income tax payable by such
Recipient or his eligible spouse on receipt of the accelerated payment.
8
<PAGE>
STOCK OPTION PLAN AND EQUITY INCENTIVE PLAN
Western's Nonqualified Stock Option Plan adopted in 1988 (the "Old Plan")
has been cancelled and replaced by the 1998 Equity Incentive Plan ("1998 Plan").
Options to purchase shares that have been granted under the Old Plan that have
not lapsed are as follows:
<TABLE>
<CAPTION>
TOTAL NO.
OF UNEXPIRED PRICE
GRANT OPTIONS PER
DATE GRANTED SHARE
- -------- ------------ --------
<S> <C> <C>
6/28/94 25,000 13.88
11/11/94 66,600 12.31
11/13/95 22,800 11.00
11/12/96 26,000 13.31
11/18/97 36,000 13.59
</TABLE>
In each instance, the option price was 100% of the fair market value at the
date of the grant.
In 1998, Western adopted the 1998 Plan. Employees, officers and trustees of
Western and its subsidiaries are eligible to participate in the 1998 Plan. The
Compensation Committee of the Board of Trustees administers the 1998 Plan and
determines the persons to whom awards will be made, when awards will be granted,
the amount of the awards, and other terms and conditions of the awards. The 1998
Plan permits the granting of options to purchase shares of beneficial interest
(ISOs), stock appreciation rights (SARs), restricted shares and unrestricted
shares. Western may issue up to 850,000 shares of beneficial interest under the
1998 Plan. Options to purchase shares and restricted shares that have been
granted through December 31, 1999 pursuant to the 1998 Plan and have not lapsed
are as follows:
<TABLE>
<CAPTION>
RESTRICTED
OPTIONS SHARES
--------------- ----------
TOTAL NO. PRICE TOTAL NO. PRICE
GRANT OF UNEXPIRED PER GRANT OF SHARES ON AWARD
DATE OPTIONS GRANTED SHARE(1) DATE GRANTED(2) DATE
- --------------------- --------------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
1/28/98 250,000 $13.81 1/28/98 15,000 $13.81
2/9/98 146,000 $14.78 2/9/98 22,500 $14.78
5/14/98 15,000 $14.50 6/18/98 4,000 $13.00
6/18/98 76,000 $13.00 2/16/99 20,000 $11.25
8/10/98 10,000 $12.59
2/16/99 185,000 $11.25
11/8/99 30,400 $10.50
</TABLE>
- ---------
(1) Option price was 100% of the fair market value at the date of grant.
(2) Shares vest over three-year period, at the rate of one-third per year.
9
<PAGE>
SHARE OPTION GRANTS AND EXERCISES
Share options were granted to the executive officers during 1999 as shown on
the following table:
SHARE OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF SHARE
GRANTED TO PRICE APPRECIATION
EMPLOYEES FOR OPTION TERM
OPTIONS IN FISCAL EXERCISE EXPIRATION ---------------------
NAME GRANTED(1) YEAR PRICE DATE 5% 10%
---- ---------- ---------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Bradley N. Blake 100,000 46.4% $ 11.25 2/16/05 $ 382,500 $ 866,300
Dennis D. Ryan 25,000 11.6% $ 11.25 2/16/05 95,600 216,600
Josh Smith 25,000 11.6% $ 11.25 2/16/05 95,600 216,600
L. Gerald Hunt 25,000 11.6% $ 11.25 2/16/05 95,600 216,600
</TABLE>
- ---------
(1) Options are exercisable as to 20% of the shares covered by the grant at the
end of each year for five years. No option is exercisable after six years
from the date of grant. No SARs have been granted.
The number and value of unexercised options at year-end 1999 are shown on
the following table:
FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1999 AT DECEMBER 31, 1999(1)
---------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
Bradley N. Blake 50,000/300,000 $--/--
Dennis D. Ryan 33,200/69,800 --/--
Josh Smith 9,600/63,400 --/--
L. Gerald Hunt 9,600/63,400 --/--
</TABLE>
- ---------
(1) The fair market value of shares at December 31, 1999 was $9.5625.
TAX QUALIFIED RETIREMENT PLAN PURSUANT TO IRS CODE SECTION 401(k)
Western adopted a Tax Qualified Retirement Plan pursuant to Section 401(k)
(the "401(k) Plan") in 1990. Under the 401(k) Plan, the Company makes
contributions as follows: (a) the total amount of compensation deferred by all
eligible employees through salary-deferral contributions to the 401(k) Plan;
(b) a discretionary matching contribution equal to a percentage of the amount of
employee salary-deferral contributions, which percentage will be determined each
year by the Company; and (c) a discretionary contribution determined each year
by the Company. All salaried employees are eligible to become 401(k) Plan
participants on completion of three months of employment and the attainment of
age 21. Compensation deferrals and discretionary matching contributions are
fully vested and any other discretionary contributions become vested as follows:
20% at 2 years of service; 40% at 3 years of service; 60% at 4 years of service;
80% at 5 years of service and 100% at 6 years of service. For the year 1999, the
Company made approximately $187,000 of discretionary contributions for all
eligible employees. Inasmuch as the 401(k) Plan is a defined contribution plan,
rather than a defined benefit plan, it is not possible to definitively estimate
annual benefits upon retirement.
10
<PAGE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Trustees (the "Committee"), is
responsible for administering and approving compensation packages for officers
and for employees whose annual base salary is $100,000 or greater. In addition,
the Committee reviews the general compensation strategy and approves ranges of
bonus and increases for the entire employee group. The review process includes
performance evaluation of officers as well as consideration for promotion and
succession. The Committee was comprised entirely of non-employee trustees during
1999.
COMPENSATION PHILOSOPHY AND OBJECTIVES
It is the philosophy of the Committee and the Company that in order to meet
Western's goal to increase long-term shareholder value, the Company must develop
and maintain a compensation program that attracts, motivates and retains
qualified executives.
The compensation program includes a base salary, bonus, equity incentive
plan and 401(k) Plan. The total compensation package for senior executives may
include other perquisites as deemed appropriate. The Committee reviews the
entire program annually.
The Committee consults several sources of information and data related to
salary trends in similar companies and other real estate investment trusts. The
Committee also evaluates the Company's operating performance, financial position
and results compared with the REIT industry and real estate investments in
general. The primary measure of performance reviewed by the Committee is the
level of funds from operations generated and available for distribution to
shareholders.
The Committee believes that the best interests of shareholders and
executives will be closely aligned by providing executives and employees an
opportunity to increase their ownership in Western. The Committee therefore
periodically will grant options and restricted shares and will provide loans to
executive officers to fund the purchase of shares of beneficial interest of
Western.
1999 COMPENSATION PACKAGES
Executive salaries are determined through an evaluation of the
responsibilities of the position held and the experience of the individual, and
by reference to salary and bonus levels paid in comparable companies for
comparable positions. The Committee monitors on an annual basis certain
operating ratios of other real estate investment trusts as compared to the
Company, including total administrative expenses as a percentage of assets and
revenues.
During 1999, the Committee approved a discretionary bonus pool to be
available to the executive officers provided the executives met certain
performance goals. A total of $200,000 was distributed from this pool to the
four executive officers. Additionally, a bonus pool of $50,000 was approved to
be available if the Company achieved a specified funds from operations goal. The
goal was met and the $50,000 was allocated among the executive officers.
11
<PAGE>
Also during 1999, as part of the executive compensation plan, a total of
20,000 restricted shares of beneficial interest were awarded to the executive
officers under the 1998 Equity Incentive Plan.
Submitted by the Compensation
Committee
Joseph P. Colmery, Chairman(1)
James L. Stell(2)
Reginald B. Oliver
- ---------
(1) Appointed Chairman effective 3/1/00
(2) Appointed to Committee effective 3/1/00
12
<PAGE>
SHARE PRICE PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return with two indices, the Equity REIT Index
prepared by the National Association of Real Estate Investment Trusts
("NAREIT"), and the S & P 500 Index. The period covered by the graph commences
on December 31, 1994. The graph assumes that $100 was invested on December 31,
1994 in the Company's shares and the indices, and that all dividends were
reinvested throughout the period. Data points on the graph are as of
December 31 of each year. Historic share price performance is not necessarily
indicative of future share price performance.
PERFORMANCE MEASUREMENT COMPARISON(1)
TOTAL RETURN
WESTERN PROPERTIES TRUST
NAREIT EQUITY INDEX AND S&P 500 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURN (2)
<S> <C> <C> <C>
Western NAREIT Equity Index (3) S&P 500 Index
1994 100 100 100
1995 91.92 115.27 137.43
1996 121.56 155.92 168.98
1997 139.67 187.51 225.37
1998 130.50 154.69 289.78
1999 116.80 147.54 350.72
</TABLE>
- ----------
(1) This Share Price Performance Graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Act of 1934, except to the extent the Company specifically
incorporates this graph by reference, and shall not otherwise be deemed
filed under such Acts.
13
<PAGE>
(2) The total return on investment assumes dividends reinvested on dividend
payment dates for each of the periods for the Company, the NAREIT Equity
Index (peer group) and the S&P 500 Index.
(3) The NAREIT Equity Index includes 167 tax-qualified REITS (all of which are
listed on either the New York Stock Exchange, American Stock Exchange or the
NASDAQ National Market System). The 167 REITS have a total market
capitalization of $118.2 billion as of December 31, 1999. The NAREIT Equity
Index is maintained by the National Association of Real Estate Investment
Trusts, Washington, D.C.
PROPOSAL NO. 2
APPOINTMENT OF AUDITORS
KPMG LLP, Certified Public Accountants, were the independent auditors for
the Company for the year ended 1999. The Board of Trustees has appointed KPMG
LLP as independent auditors for the year ending December 31, 2000, and
recommends to the shareholders that such appointment be ratified.
Representatives of KPMG LLP are expected to attend the annual meeting with the
opportunity to make a statement if desired and are also expected to be available
to respond to appropriate questions from the shareholders at the annual meeting.
OTHER BUSINESS
The management of Western knows of no matters to be brought before the
meeting other than those set forth in the Notice of Annual Meeting of
Shareholders. If, however, any other matters of which management is not now
aware are presented for action, it is the intention of the proxy holders named
in the enclosed proxy to vote in accordance with their discretion on such
matters. The giving of the proxy does not preclude the right to vote in person
should the shareholder giving it so desire, as the proxy may be revoked at any
time prior to its having been exercised.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be submitted for inclusion in proxy-soliciting
material for the 2001 annual shareholders' meeting must be received by the
Secretary of the Company no later than November 30, 2000.
Dated: Emeryville, California
March 30, 2000
/s/ Barbara J. Donham
Barbara J. Donham
Secretary
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S 1999 ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1999, FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION, INCLUDING FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS, WILL BE
PROVIDED WITHOUT CHARGE TO EACH SHAREHOLDER WHO SENDS A WRITTEN REQUEST TO
INVESTOR RELATIONS, WESTERN PROPERTIES TRUST, 2200 POWELL STREET, EMERYVILLE,
CA 94608.
- --------------------------------------------------------------------------------
14
<PAGE>
APPENDIX A
WESTERN PROPERTIES TRUST
CHARTER AND POWERS OF THE AUDIT COMMITTEE
RESOLVED, that the charter and powers of the Audit Committee of the Board of
Trustees (the "Audit Committee") shall be:
- Overseeing that management has maintained the reliability and integrity of
the accounting policies and financial reporting and disclosure practices
of the Company;
- Overseeing that management has established and maintained processes to
assure that an adequate system of internal control is functioning within
the Company;
- Overseeing that management has established and maintained processes to
assure compliance by the Company with all applicable laws, regulations and
Company policy.
RESOLVED, that the Audit Committee shall have the following specific powers
and duties:
1. Holding such regular meetings as may be necessary and such special meetings
as may be called by the chairman of the Audit Committee or at the request
of the independent accountants;
2. Creating an agenda for the ensuing year;
3. Reviewing the performance of the independent accountants and making
recommendations to the Board of Trustees regarding the appointment or
termination of the independent accountants;
4. Conferring with the independent accountants concerning the scope of their
examinations of the books and records of the Company and its subsidiaries;
reviewing and approving the independent accountants' annual engagement
letter; directing the special attention of the auditors to specific matters
or areas deemed by the Committee or the auditors to be of special
significance; and authorizing the auditors to perform such supplemental
reviews or audits as the Committee may deem desirable;
5. Reviewing with management and the independent accountants significant risks
and exposures, audit activities and significant audit findings;
6. Reviewing the range and cost of audit- and non-audit services performed by
the independent accountants and recommending assignments in areas not
regularly covered;
7. Reviewing the Company's audited annual financial statements and the
independent accountants' opinion rendered with respect to such financial
statements, including reviewing the nature and extent of any significant
changes in accounting principles or the application therein;
8. Reviewing the procedures for maintaining the Company's systems of internal
control;
9. Obtaining from the independent accountants their recommendations regarding
internal controls and other matters relating to the accounting procedures
and the books and records of the Company and its subsidiaries and reviewing
the correction of controls deemed to be deficient;
A-1
<PAGE>
10. Providing an independent, direct communication between the Board of
Trustees and independent accountants;
11. Reviewing the adequacy of appropriate approval procedures related to
employee and trustee entertainment and expense reimbursement;
12. Reviewing with appropriate Company personnel the actions taken to ensure
compliance with the Company's Code of Conduct and the results of
confirmations and violations of such Code;
13. Reviewing the programs and policies of the Company designed to ensure
compliance with applicable laws and regulations and monitoring the results
of these compliance efforts;
14. Reviewing the procedures established by the Company that monitor the
compliance by the Company with its loan and indenture covenants and
restrictions;
15. Reporting through its Chairman to the Board of Trustees following the
meetings of the Audit Committee;
16. Maintaining minutes or other records of meetings and activities of the
Audit Committee;
17. Reviewing the powers of the Committee annually and reporting and making
recommendations to the Board of Trustees on these responsibilities;
18. Conducting or authorizing investigations into any matters within the Audit
Committee's scope of responsibilities. The Audit Committee shall be
empowered to retain independent counsel, accountants, or others to assist
it in the conduct of any investigation;
19. Considering such other matters in relation to the financial affairs of the
Company and its accounts, and in relation to the internal and external
audit of the Company as the Audit Committee may, in its discretion,
determine to be advisable.
COMPOSITION OF COMMITTEE
The Audit Committee shall be comprised of three or more trustees as
determined by the Board, each of whom shall be independent trustees, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee.
All members of the Committee shall have a working familiarity with basic finance
and accounting practices and at least one member of the Committee shall have
accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Corporation or an outside consultant.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
A-2
<PAGE>
WESTERN PROPERTIES TRUST
ANNUAL MEETING OF SHAREHOLDERS
May 11, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Reginald B. Oliver, James L. Stell,
Dennis D. Ryan, Bradley N. Blake, L. Michael Foley and Joseph P. Colmery,
jointly and severally, as proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote, as
designated below, all the shares of beneficial interest of Western Properties
Trust held of record by the undersigned on March 15, 2000 at the annual
meeting of shareholders to be held on May 11, 2000 or any adjournment or
postponement thereof.
Should the undersigned be present and choose to vote at the meeting or at
any adjournment or postponement thereof, and after notification to the
Secretary of the Company at the meeting of the shareholder's decision to
terminate this proxy, then the power of the proxies shall be deemed
terminated and of no further force and effect. This proxy may also be revoked
by filing a written notice of revocation with the Secretary of the Company or
by duly executing a proxy bearing a later date.
IMPORTANT: PLEASE DATE AND SIGN ON REVERSE SIDE.
- -----------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
This proxy will be voted as directed, but if no instructions are specified,
this proxy will be voted FOR each of the propositions stated.
Please mark your votes as indicated in this example /X/
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
1. The election as trustees of all nominees listed below
(except as marked to the contrary).
FOR / / VOTE WITHHELD / /
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
REGINALD B. OLIVER
JOSEPH P. COLMERY
2. Ratification of the appointment of
KPMG LLP as auditors for the fiscal year ending December 31, 2000.
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment or postponement thereof.
If any other business is presented at the meeting, this proxy will be voted
by those named in this proxy in their best judgement. At the present time,
the Board of Trustees knows of no other business to be presented at the
meeting.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
The undersigned acknowledges receipt from the Company, prior to the execution
of this proxy, of notice of the Meeting, a Proxy Statement and an Annual
Report to shareholders.
I plan to attend the meeting. / /
Signature(s)___________________________________ Dated ________________, 2000
Please sign exactly as your name(s) appear(s) to the left. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
