SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the
Securities and Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for use of the Commission only
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MISSION WEST PROPERTIES, INC.
(Name of Registrant as Specified in its Charter)
-------------------------------------------------------
(Name of Person (s) Filing Proxy Statement, if other than Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(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 provide 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 number, of 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:
First mailed to stockholders on or about May 1, 2000.
<PAGE>
MISSION WEST PROPERTIES, INC.
10050 Bandley Drive
Cupertino, California 95104
Dear Stockholder,
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of Mission West Properties, Inc. (the "Company") to be held at
10:00 a.m. on May 31, 2000 at the Company's offices at 10050 Bandley Drive,
Cupertino, California 95014.
The matters expected to be acted upon at the meeting are described in
detail in the following Notice of the 2000 Annual Meeting of Shareholders and
Proxy Statement.
Whether you plan to attend the Annual Meeting or not, it is important
that you promptly complete, sign, date and return the enclosed proxy card, or
vote in accordance with the instruction set forth on the proxy card. This will
ensure your proper representation at the Annual Meeting.
Sincerely,
/s/ Carl E. Berg
--------------------------------
Carl E. Berg
Chairman of the Board
and Chief Executive Officer
YOUR VOTE IS IMPORTANT.
PLEASE REMEMBER PROMPTLY TO RETURN YOUR PROXY
<PAGE>
MISSION WEST PROPERTIES, INC.
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
To be held on May 31, 2000
To the Stockholders of Mission West Properties, Inc.:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of
Mission West Properties, Inc., a Maryland corporation (the "Company"), will be
held on May 31, 2000 at the Company's offices at 10050 Bandley Drive, Cupertino,
California 95014 at 10:00 a.m. for the following purposes:
1. To elect four members of the Board of Directors to hold office until
the next Annual Meeting of Stockholders or until their respective
successors have been elected and qualify. The nominees are Carl E.
Berg, John C. Bolger, William A. Hasler, and Lawrence B. Helzel.
2. To ratify the appointment of the accounting firm of
PricewaterhouseCoopers LLP as independent auditors for the Company for
the year ending December 31, 2000.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 28, 2000 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting and at any adjournments thereof. A list of such
stockholders will be available for inspection at the principal office of the
Company.
All stockholders are cordially invited to attend the Annual Meeting.
However, to ensure your representation, you are requested to complete, sign,
date and return the enclosed proxy as soon as possible in accordance with the
instructions on the proxy card. A return addressed envelope is enclosed for your
convenience. Any stockholder attending the Annual Meeting may vote in person
even though the stockholder has returned a proxy previously. Your proxy is
revocable in accordance with the procedures set forth in the Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Michael Knapp
----------------------------------
Michael Knapp
Secretary
Cupertino, California
May 1, 2000
<PAGE>
MISSION WEST PROPERTIES, INC.
10050 Bandley Drive
Cupertino, California 95104
---------------------
PROXY STATEMENT
---------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Mission West Properties, Inc., a Maryland corporation
(the "Company"), of proxies, in the accompanying form, to be used at the Annual
Meeting of Stockholders to be held at 10:00 a.m. on May 31, 2000 at 10050
Bandley Drive, Cupertino, California 95014 and any postponement or adjournments
thereof (the "Meeting").
This Proxy Statement and the accompanying proxy are being mailed on or
about May 1, 2000 to all stockholders entitled to notice of and to vote at the
Meeting.
SOLICITATION AND VOTING PROCEDURES
Shares represented by valid proxies in the form enclosed, received in time
for use at the Meeting and not revoked at or before the Meeting, will be voted
at the Meeting. The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of the Company's common stock, par value $.01
per share ("Common Stock"), is necessary to constitute a quorum at the Meeting.
Holders of Common Stock are entitled to one vote on all matters. The Company
will tabulate stockholder votes, and an officer of the Company will tabulate
votes cast in person at the Meeting. With respect to the tabulation of proxies
for purposes of constituting a quorum, abstentions are treated as present, but
will not be counted as votes cast at the Meeting with respect to any proposal
and will have no effect on the result of the vote.
Assuming the presence of a quorum, the affirmative vote of a plurality of
the votes cast at the Meeting and entitled to vote is required for Proposal No.
1 regarding the election of directors. An affirmative vote of the holders of a
majority of the votes cast affirmatively or negatively at the Meeting is
necessary for approval of Proposal No. 2 to ratify the appointment of
independent auditors. All proxies will be voted as specified on the proxy cards
submitted by stockholders, if the proxy is properly executed and is received by
the Company before the close of voting at the Meeting or any adjournment or
postponement thereof. If no choice has been specified, a properly executed and
timely proxy will be voted for Proposals Nos. 1 and 2, which are described in
detail elsewhere in this Proxy Statement.
The close of business on April 28, 2000 has been fixed as the record date
for determining the stockholders entitled to notice of and to vote at the
Meeting. As of that date, the Company had 17,025,365 shares of Common Stock
outstanding and entitled to vote.
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company. In
addition, the Company will reimburse brokerage firms and other persons
representing beneficial owners of Common Stock for their expenses in forwarding
proxy material to such beneficial owners. Solicitation of proxies
<PAGE>
by mail may be supplemented by telephone, telegram, telex and other electronic
means, and personal solicitation by the Directors, officers or employees of the
Company. No additional compensation will be paid to Directors, officers or
employees for such solicitation. The Company's Annual Report on Form 10-K for
the year ended December 31, 1999 is being mailed to the stockholders with this
Proxy Statement.
VOTING ELECTRONICALLY OR BY TELEPHONE
A number of brokerage firms and banks are participating in a program
provided through ADP Investor Communication Services that offers telephone and
Internet voting options. If your shares are held in an account at a brokerage
firm or bank participating in the ADP program, you may vote those shares by
calling the telephone number which appears on your voting form or though the
Internet in accordance with instructions set forth on the voting form. Votes
submitted through the Internet or by telephone through the ADP program must be
received by midnight on May 30, 2000.
The Internet and telephone voting procedures are designed to authenticate
stockholders' identities, to allow stockholders to vote their shares and to
confirm that their instructions have been properly recorded. The Company has
been advised by its counsel that the procedures that have been put in place are
consistent with the requirements of applicable law. Stockholders voting via the
Internet through ADP Investor Communication Services should understand that
there may be costs associated with electronic access, such as usage charges from
Internet access providers and telephone companies, that would be borne by the
stockholder.
REVOCABILITY OF PROXIES
You can revoke your proxy at any time before the voting at the Meeting
by sending a properly signed written notice of your revocation to the Secretary
of the Company, by submitting another proxy that is properly signed and bears a
later date or by attending the Meeting and voting in person. Attendance at the
Meeting will not itself revoke an earlier submitted proxy. You should direct any
written notices of revocation and related correspondence to: Mission West
Properties, Inc., 10050 Bandley Drive, Cupertino, California 95014, Attention:
Secretary.
To revoke a proxy previously submitted electronically through the
Internet or by telephone, you may simply vote again at a later date, using the
same procedures, in which case your later submitted vote will be recorded and
your earlier vote revoked.
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The Directors and executive officers of Mission West Properties, Inc. as of
March 31, 2000 are as follows:
<TABLE>
<CAPTION>
Name Age Positions with the Company
- ----------------------- ----- -----------------------------------------------------------
<S> <C> <C>
Carl E. Berg 63 Chairman of the Board, Chief Executive Officer, President
and Acting Chief Financial Officer
John C. Bolger (1) 53 Director
William A. Hasler (1) 58 Director
Lawrence B. Helzel (1) 51 Director
</TABLE>
(1) Member of the Audit Committee, the Compensation Committee, and the
Independent Directors Committee.
The following is a biographical summary of the experience of our executive
officers and Directors:
Mr. Berg has served as Chief Executive Officer, President and Director of
the Company since September 1997. Since 1979, Mr. Berg has been a general
partner of Berg & Berg Developers and has been a director and officer of Berg &
Berg Enterprises, Inc. since its inception. Mr. Berg is also a director of
Integrated Device Technologies, Inc., Videonics, Inc., Valence Technology, Inc.
and System Integrated Research, Ltd.
Mr. Bolger became a director of the Company on March 30, 1988. Mr. Bolger
is a private investor. He was Vice President of Finance and Administration of
Cisco Systems, Inc. from May 1989 through December 1992. Mr. Bolger is also a
director of Integrated Device Technology, Inc., Integrated Systems Inc., Sanmina
Corporation and TCSI Corporation.
Mr. Hasler became a director of the Company on December 4, 1998. For seven
years, Mr. Hasler was Dean of Haas School of Business, University of California,
Berkeley, a position from which he resigned in June 1998 to assume the position
of Co-CEO of Aphton Corporation, a public pharmaceutical company. Mr. Hasler is
also a director of Aphton, Solectron, Quickturn Design, Walker Interactive, TCSI
Corporation and several start-up companies. He is a public governor of the
Pacific Stock and Options Exchange and a member of the Advisory Board of
Critical Technologies Institute.
Mr. Helzel became a director of the Company on December 4, 1998. Mr. Helzel
is a general partner of Helzel Kirshman, L.P., a private investment partnership
and is a member of the Pacific Exchange. Mr. Helzel has been a director for
Pacific Gateway Properties, a publicly traded real estate company, for the past
seven years and also serves on the board of directors of Infotec Commercial
Systems, Inc., and Avirnex Communications Group, Inc., both privately held
companies.
<PAGE>
NUMBER TERMS AND ELECTION OF DIRECTORS
The Company's Bylaws currently provide for a Board of Directors consisting
of four Directors. Each Director will serve for a term of one year or until the
next annual meeting at which directors are elected and until the Director's
successor is elected and qualifies. In the election of directors, each
stockholder is entitled to one vote for each share of Common Stock held by such
shareholder.
MEETINGS OF DIRECTORS
Until such time as Carl E. Berg, Clyde J. Berg, the members of their
respective immediate families and certain entities controlled by Carl E. Berg
and/or Clyde J. Berg, which are Berg & Berg Enterprises, Inc., Baccarat Cambrian
Partnership, Baccarat Fremont Developers LLC, and DeAnza Office Partners
(collectively, the "Berg Group") and their affiliates (other than the
Corporation and Mission West Properties, L.P., Mission West Properties, L.P. I,
Mission West Properties, L.P. II or Mission West Properties, L.P. III
(collectively, the "Operating Partnership"), in the aggregate, own less 15% of
the voting stock of the Company (including without limitation upon the exercise
of all outstanding warrants, options, convertible securities and other rights to
acquire voting stock of the Company, and all O.P. units exchangeable or
redeemable for Common Stock or other voting stock of the Company without regard
to any ownership limit set forth in the Charter, the Bylaws or by agreement), a
majority of the directors, including Carl E. Berg or an individual whom he
designates to replace him as a director on the Board of Directors (the "Berg
Designee"), shall be required to (i) hold a meeting of the Board of Directors
which is not attended by Carl E. Berg or the Berg Designee (unless Mr. Berg or
the Berg Designee consents in writing to the holding of such meeting), (ii)
approve any amendment to the Company's Charter or Bylaws, or (iii) approve any
merger, consolidation or sale of all or substantially all of the assets of the
Company or the Operating Partnerships.
Until the date on which the Berg Group and their affiliates (other than the
Company and the Operating Partnership) own less than 15% of the fully-diluted
number of shares, all meetings of the Board of Directors require the presence of
Carl E. Berg or in the event of his death, disability or other event which
results in Mr. Berg no longer being a director, the presence of the Berg
Designee. Mr. Berg shall submit a written statement identifying the Berg
Designee to the Company from time to time to permit identification of the Berg
Designee in the event that death, disability or other event results in a vacancy
on the Board of Directors due to Mr. Berg's inability to serve as a director.
Mr. Berg may amend the statement at his sole discretion.
COMPENSATION OF DIRECTORS
The Company pays its Directors who are not officers fees for their services
as Directors. They receive annual compensation of $15,000 plus a fee of $1,000
for attendance (in person or by telephone) at each meeting of the Board of
Directors, but not for committee meetings. Officers of the Company who are also
Directors will not be paid any Directors' fees.
Each non-employee member of the Board of Directors who became or becomes a
member of the Board of Directors after November 10, 1997, the date on which the
1997 Stock Option Plan (the "Option Plan") was approved by the stockholders of
the Company,
<PAGE>
automatically receives a grant of an option to purchase 50,000 shares of Common
Stock at an exercise price equal to 100% of the fair market value of the Common
Stock at the date of grant of such option upon joining the Board of Directors.
Such options become exercisable cumulatively with respect to 1/48th of the
underlying shares on the first day of each month following the date of grant.
Generally, the options must be exercised while the optionee remains a Director.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The Company's Board of Directors has standing Audit and Compensation
Committees. The Audit Committee currently has three members: John C. Bolger,
William A. Hasler and Lawrence B. Helzel, who became a member of the Audit
Committee in April, 2000. The Compensation Committee currently has the same
three members.
The Board of Directors has an Independent Directors Committee comprised of
Messrs. Bolger, Hasler and Helzel. This committee is responsible for acting upon
proposed transactions between the Company and members of the Berg Group under
the terms of certain agreements between the Company and such Berg Group members.
See "Certain Relationships and Related Transactions."
During the fiscal year ended December 31, 1999, there were three meetings
of the Board of Directors, one meeting of the Audit Committee and one meeting of
the Compensation Committee of the Board of Directors. In addition, the members
of the Board of Directors, the Compensation Committee and the Independent
Directors Committee acted at various times by unanimous written consent pursuant
to Maryland law.
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth summary information as
to compensation received by the Company's Chief Executive Officer and each of
the other most highly compensated persons who were serving as executive officers
of the Company as of December 31, 1999, and one former executive who would have
been among the four most highly compensated persons but for the fact that he was
not employed by the Company as of December 31, 1999 (collectively, the "named
executive officers") for services rendered to the Company in all capacities
during the three fiscal years ended December 31, 1999. All of the officers,
except Carl E. Berg, joined the Company in 1998. Carl E. Berg joined the Company
in September 1997, but received no compensation from the Company in 1997.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------------------- ------------
Securities
Other Annual underlying All Other
Name and Principal Position Year Salary Bonus Compensation Options Compensation
- --------------------------------- ------ -------- ------- -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Carl E. Berg 1999 $100,000 $ - $15,000(1) -
Chief Executive Officer 1998 100,000 - - -
and President 1997 - - - -
Michael J. Anderson(2) 1999 50,000 50,000 - 600,000 122,188(4)
Vice President, Chief Executive 1998 147,919 - 22,188(5) -
Officer and Secretary 1997 - - - -
Marianne K. Aguiar(3) 1999 130,015 - 19,500(1) 75,000
Vice President and Controller 1998 74,775 - - -
1997 - - - -
</TABLE>
- --------------------------
(1) Employer contribution to 401(k) plan.
(2) Michael J. Anderson resigned from the Company effective April 30, 1999.
(3) Marianne K. Aguiar resigned from her position as Chief Financial Officer of
the Company as of January 4, 2000.
(4) Included a severance payment paid to Mr. Anderson as required under his
employment agreement and interest of $22,188 forgiven by the Company.
(5) 1998 bonus paid in 1999.
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The following table provides information regarding the aggregate exercises
of options by each of the named executive officers. In addition, this table
includes the number of shares covered by both exercisable and unexercisable
stock options as of December 31, 1999, and the values of "in-the-money" options,
which values represent the positive spread between the exercise price of any
such options and the fiscal year-end value of the Company's Common Stock.
<TABLE>
<CAPTION>
Number of Securities Value of the Unexercised
Underlying Unexercised In-The-Money Options at
Shares Options at December 31, 1999 December 31, 1999(2)
Acquired On Value ---------------------------- ---------------------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable(1) Unexercisable(1)
- -------------------------- ----------- ----------- ------------ -------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Carl E. Berg.............. - N/A N/A
Marianne K. Aguiar........ 19,142 66,997 17,973 112,885 $33,014 $148,525
Michael J. Anderson....... 167,917 650,678 N/A N/A N/A N/A
</TABLE>
- -------------------
(1) The value realized represents the aggregate market value of the shares
covered by the option on the date of exercise less the aggregate exercise
price paid by the executive officer.
(2) The value of unexercised in-the-money options at fiscal year end assumes a
fair market value for the Company's Common Stock of $7.75, the closing
market price per share of the Company's Common Stock as reported on the
American Stock Exchange on December 31, 1999.
CONTRACTUAL ARRANGEMENTS
In April 1999, the Company entered into a settlement and mutual release
agreement terminating the employment agreement with Mr. Anderson. The Company
paid Mr. Anderson severance of $100,000 as provided in his employment agreement.
The Company also paid medical and dental insurance premiums for six months
subsequent to April 1999. As additional consideration, the Company agreed to
offset the interest due and payable under a note issued to purchase shares of
common stock against the amount of retirement contribution that Mr. Anderson
forfeited to the Company upon termination of his employment
<PAGE>
SHARE OWNERSHIP
The following table sets forth certain information as of March 31, 2000,
concerning the ownership of Common Stock by (i) each stockholder of the Company
known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, (ii) each current member of the Board of
Directors of the Company, (iii) each executive officer of the Company named in
the Summary Compensation Table appearing under "Executive Compensation" below
and (iv) all current Directors and executive officers of the Company as a group.
The Company has relied on information supplied by its officers, directors
and certain shareholders and on information contained in filings with the SEC.
<TABLE>
<CAPTION>
Percent of
all Shares
of Common
Stock Percent of
Number of Percent of (Assuming All Shares
Shares All Shares Exchange of of Common
Beneficially of Common Number of O.P. Holder's Stock/O.P.
Name Owned(1) Stock Units O.P. Units)(2) Units(1)(2)
- ----------------------------------------- --------------- ---------- --------------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
Marianne K. Aguiar 29,379(7) * - * *
Vice President of Finance and
Controller
Carl E. Berg 50,000(4)(14) * 51,057,099(5)(14) 75.07% 53.23%
President, Chief Executive Officer
and Director
John C. Bolger, Director 37,222(6) * - * *
96 Sutherland Drive
Atherton, CA 94027
William A. Hasler, Director 14,000(8) * - * *
c/o Aphton Corporation
1 Market Street
Spear Tower, Suite 1850
San Francisco, CA 94105
Lawrence B. Helzel, Director 192,500(3) 1.13% - 1.13% *
c/o Helzel Kirshman, L.P.
5550 Redwood Road
Suite 4
Oakland, CA 94619
5% STOCKHOLDERS:
Ingalls & Snyder LLC(9) 1,845,714 10.84% - 10.84% 1.92%
61 Broadway
New York, NY 10006
Ingalls & Snyder Value Partners, L.P.(10) 1,025,067 6.02% - 6.02% 1.07%
61 Broadway
New York, NY 10006
Daniel McCarthy (15) 1,212,670 7.12% - 7.12% 1.26%
c/o Marquette National Bank
6316 So. Western Ave.
Chicago, IL 60636
Clyde J.Berg 0 * 31,380,398(12)(13) 64.83% 32.68%
c/o Berg & Berg Developers
10050 Bandley Drive
Cupertino, CA 95014
Berg & Berg Enterprises, Inc.(13) 0 * 7,867,648 31.61% 8.19%
10050 Bandley Drive
Cupertino, CA 95014
All Directors and Officers as a group 293,722(14) 1.73% 51,057,099(14) 75.42% 53.48%
(5 persons)
</TABLE>
* Less than 1%.
<PAGE>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those securities and includes
securities which such person has the right to acquire beneficial ownership
within 60 days of March 31, 2000. Unless otherwise indicated, the persons
or entities identified in this table have sole voting and investment power
with respect to all shares shown as beneficially owned by them. Percent of
all shares of common stock calculations are based on 17,025,365 shares
outstanding as of March 31, 2000. Percent of all shares of common
stock/O.P. Units calculations are based on 96,015,700 shares of common
stock and O.P. Units exchangeable for common stock as of March 31, 2000.
(2) Assumes O.P. Units are exchanged for shares of common stock without regard
to (i) whether such O.P. Units may be exchanged for shares of common stock
within 60 days of March 31, 2000, and (ii) certain ownership limit
provisions set forth in the Company's Articles of Amendment and
Restatement.
(3) Includes 12,500 shares of common stock issued on exercise of options. Does
not include 37,500 shares of common stock issuable on exercise of the
"Non-Employee Director Grant pursuant to 1997 Stock Option Plan."
(4) Mr. Berg disclaims beneficial ownership of 53,071 shares of Common Stock
held by him as a trustee under various pension and profit sharing plans.
Such shares are not included herein. Mr. Berg has no investment control
over such shares.
(5) Includes O.P. Units in which Mr. Berg has a pecuniary interest because of
his status as a limited partner in the operating partnerships. Also
includes an additional 9,712,072 shares of Common Stock held by or issuable
on exchange of O.P. Units beneficially owned by Berg & Berg Enterprises,
Inc. and King Ranch Partnership, and 11,425,293 shares of common stock
issuable on exchange of O.P. Units held by West Coast Venture Capital,
Limited, L.P., because Mr. Berg is an executive officer and director of the
sole general partner, West Coast Venture Capital, Inc. Mr. Berg disclaims
beneficial interest in any shares or O.P. Units deemed beneficially owned
by Kara Ann Berg, his daughter, Carl Berg Child's Trust UTA dated June 2,
1978 and the 1981 Kara Ann Berg Trust.
(6) Includes 15,000 shares of common stock issued on exercise of options. Does
not include 20,000 shares of common stock issuable on exercise of the
"Non-Employee Director Grant pursuant to 1997 Stock Option Plan."
(7) Includes 29,379 shares of common stock issued on exercise of options.
(8) Includes 14,000 shares of common stock issued on exercise of options. Does
not include 36,000 shares of common stock issuable on exercise of the
"Non-Employee Director Grant pursuant to 1997 Stock Option Plan."
(9) Edward H. Oberst, Managing Director, has the power to vote and the power to
direct the investment of Ingalls & Snyder LLC with respect to the common
stock.
(10) Thomas Boucher and Robert L. Cipson, general partners of Ingalls & Snyder
Value Partners, L.P. ("Value Partners"), have the power to vote and the
power to direct the investment of Value Partners with respect to the common
stock.
(11) Intentionally omitted.
(12) Includes O.P. Units in which Mr. Berg has a pecuniary interest because of
his status as a limited partner in the operating partnerships. Also
includes L.P. Units held by Mr. Berg as trustee of the Carl Berg Child's
Trust UTA dated June 2, 1978 and the 1981 Kara Ann Berg Trust, and an
additional 9,712,072 shares of Common Stock held by or issuable on exchange
of O.P. Units beneficially owned by Berg & Berg Enterprises, Inc. and King
Ranch Partnership. This does not include any share deemed beneficially
owned by Sonya L. Berg and Sherri L. Berg, his daughters, as to which he
disclaims beneficial ownership.
(13) Carl E. Berg is an executive officer and director and Clyde J. Berg is a
director of Berg & Berg Enterprises, Inc. With members of their immediate
families, the Messrs. Berg beneficially owns, directly and indirectly, all
of the O.P. Units of Berg & Berg Enterprises, Inc.
(14) Current officers and directors include Carl E. Berg, John C. Bolger,
William A. Hasler, and Lawrence B. Helzel. See Notes 3 through 8.
(15) Includes 50,000 shares held in Mr. McCarthy's Individual Retirement
Account; includes 107,670 shares of which Mr. McCarthy has to power to vote
and the power to direct in Marquette National Bank; includes 335,000 shares
in the Marquette National Bank John McCarthy Rev Trust, Paul McCarthy
Trustee.
<PAGE>
CONTRACTUAL AND OTHER CONTROL ARRANGEMENTS
SPECIAL BOARD VOTING PROVISIONS. The Charter and Bylaws provide substantial
control rights for the Berg Group. These rights include a requirement that Mr.
Berg or his designee as director approve certain fundamental corporate actions,
including amendments to the Charter and Bylaws and any merger, consolidation or
sale of all or substantially all of our assets. In addition, the Bylaws provide
that a quorum necessary to hold a valid meeting of the board of directors must
include Mr. Berg or his designee. The rights described in the two preceding
sentences apply only as long as the Berg Group members and their affiliates,
other than the Company and the Operating Partnerships, beneficially own, in the
aggregate, at least 15% of the outstanding shares of Common Stock on a fully
diluted basis, which is calculated based on all outstanding shares of Common
Stock and all shares of Common Stock that could be acquired upon the exercise of
all outstanding options to acquire the Company's stock, as well as all shares of
Common Stock issuable upon exchange of all O.P. Units. In addition, directors
representing more than 75% of the entire board of directors must approve other
significant transactions, such as incurring debt above certain amounts,
acquiring assets and conducting business other than through the Operating
Partnerships.
BOARD OF DIRECTORS REPRESENTATION. The Berg Group members have the right to
designate two of the director nominees submitted by the Board of Directors to
stockholders for election, as long as the Berg Group members and their
affiliates, other than the Company and the Operating Partnerships, beneficially
own, in the aggregate, at least 15% of our outstanding shares of common stock on
a fully diluted basis. If the fully diluted ownership of the Berg Group members
and their affiliates is less than 15% but is at least 10% of the common stock,
the Berg Group members have the right to designate one of the director nominees
submitted by the Board of Directors to stockholders for election. Its right to
designate director nominees affords the Berg Group substantial control and
influence over the management and direction of our corporation.
SUBSTANTIAL OWNERSHIP INTEREST. The Berg Group currently owns O.P. Units
representing approximately 77.77% of the equity interests in the operating
partnerships. The O.P. Units may be converted into shares of Common Stock,
subject to limitations set forth in the Charter (including an overall 20%
ownership limitation), and other agreements with the Berg Group. Upon conversion
these shares would represent voting control of the Company. The Berg Group's
ability to exchange its O.P. Units for Common Stock permits it to exert
substantial influence over the management and direction of the Company.
LIMITED PARTNER APPROVAL RIGHTS. Mr. Berg and other limited partners,
including other members of the Berg Group, may restrict the Company's operations
and activities through rights provided under the terms of the Amended and
Restated Agreement of Limited Partnership which governs each of the Operating
Partnerships and the Company's legal relationship to each Operating Partnership
as its general partner. Matters requiring approval of the holders of a majority
of the O.P. Units, which necessarily would include the Berg Group, include (i)
the amendment, modification or termination of any of the Operating Partnership
Agreements; (ii) the transfer of any general partnership interest in the
Operating Partnerships, including, with certain exceptions, transfers attendant
to any merger, consolidation or liquidation of our corporation; (iii) the
admission of any additional or substitute general partners in the Operating
Partnerships;
<PAGE>
(iv) any other change of control of the Operating Partnerships; (v) a general
assignment for the benefit of creditors or the appointment of a custodian,
receiver or trustee of any of the assets of the Operating Partnerships; and (vi)
the institution of any bankruptcy proceeding for any Operating Partnership.
In addition, as long as the Berg Group members and their affiliates,
beneficially own, in the aggregate, at least 15% of the outstanding shares of
common stock on a fully diluted basis, the consent of the limited partners
holding the right to vote a majority of the total number of O.P. Units
outstanding is also required with respect to (i) the sale or other transfer of
all or substantially all of the assets of the Operating Partnerships and certain
mergers and business combinations resulting in the complete disposition of all
O.P. Units; (ii) the issuance of limited partnership interests senior to the
O.P. Units as to distributions, assets and voting; and (iii) the liquidation of
the Operating Partnerships.
<PAGE>
COMPARISON OF SHAREHOLDER RETURN ON INVESTMENT
The following line graph compares the change in the Company's cumulative
stockholder return on its shares of Common Stock to the cumulative total return
of the NAREIT Equity REIT Total Return Index ("NAREIT Equity Index") and the
Standard & Poor's 500 Stock Index ("S & P 500 Index") from December 31, 1998 to
December 31, 1999. The line graph starts December 31, 1998; however, the Company
started trading under the Berg Group ownership on December 8, 1998. The graph
assumes that the value of the investment in the Company's common stock was $100
at December 31, 1998 and that all dividends were reinvested. The common stock's
price on December 31, 1998 was $6.75. The Company obtained the information about
the NAREIT Equity Index and S & P 500 INDEX from each entity respectively, and
has assumed that the information is reliable, but cannot assume its accuracy.
[GRAPH OMITTED]
<TABLE>
<CAPTION>
Mission West Properties, Inc. S & P 500 NAREIT EQUITY INDEX
----------------------------- --------- -------------------
<S> <C> <C> <C>
1998 $100.00 $100.00 $100.00
1999 $123.23 $119.53 $ 95.38
</TABLE>
(1) Due to the reorganization of the Company by the Berg Group and the
effective liquidation of the Company's assets during this same period, the
Company has not included stock price performance from year ending 1995 to
1997 in the above chart. The Company's stock price performance for year
ending 1995 was $137.42. For the same time period, the Russell 2000 and
peer group were $151.17 and $173.06, respectively. For year ending 1996,
the Company's stock price performance was $255.21. For the same time
period, the Russell 2000 and peer group were $176.14 and $233.23,
respectively. For year ending 1997, the Company's stock price performance
was $364.33. For the same time period, the Russell 2000 and a peer group
were $215.52 and $320.39, respectively.
(2) The stock price performance shown in the graph is not necessarily
indicative of future performance of the Company's common stock.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate
this Proxy Statement on future filings made by the Company under those
statutes, the Compensation Committee Report and Stock Performance Graph are
not deemed filed with the Securities Exchange Commission and shall not be
deemed incorporated by reference into any such filings.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Set forth below is a summary of certain material transactions since January
1, 1999 between the Company and any of its Directors, executive officers or
holders of more than 5% of the Company's Common Stock, or between the Company
and persons in which Directors, executive officers or such stockholders have
direct or indirect material interests.
PROPERTY ACQUISITIONS AND FINANCIAL TRANSACTIONS BETWEEN THE COMPANY AND THE
BERG GROUP
Through a series of transactions in 1997 and 1998, the Company became the
vehicle for substantially all of the Silicon Valley R&D property activities of
the Berg Group, which includes Mr. Berg, his brother Clyde J. Berg, members of
their families and a number of entities in which they have controlling or
substantial ownership interests. The Company owns these former Berg Group
properties, as well as the rest of its properties, through the Operating
Partnerships, of which the Company is the sole general partner. Through various
property acquisition agreements with the Berg Group, the Company has the right
to purchase, on pre-negotiated terms, R&D and other types of office and light
industrial properties that the Berg Group develops in the future in California,
Oregon and Washington.
PENDING PROJECTS ACQUISITION AGREEMENT. In December 1998, the Company
entered into the Pending Projects Acquisition Agreement with members of the Berg
Group, under which the Company agreed to acquire approximately 1.0 million
square feet upon the completion and leasing of identified pending development
projects upon the following material terms: (i) the acquisition price is payable
in cash or, at the option of the Berg Group, in O.P. Units valued at $4.50 per
O.P. Unit, which was the price per share of the Company's common stock in May
1998, when the Company agreed to the terms of the Pending Projects Acquisition
Agreement; (ii) the Berg Group will build and deliver each completed and
fully-leased R&D property in the pending development projects to the operating
partnerships at an acquisition price equal to the average monthly rental rate
per square foot over the term of the lease divided by an agreed upon
capitalization rate, which ranges from 14.0% to 16.0%, minus the amount of debt
encumbering the property; (iii) the closing for the acquisition of an individual
R&D property within a project will occur only when the building has been
completed and leased, unless otherwise agreed by the parties; (iv) leases will
be on commercially reasonable terms and conditions; and (v) all action taken by
the Company under the Pending Projects Acquisition Agreement must be approved by
a majority of the members of the Independent Directors Committee.
BERG LAND HOLDINGS OPTION AGREEMENT. In December 1998, the Company entered
into the Berg Land Holdings Option Agreement under which the Company has the
option to acquire any fully leased future R&D, office and industrial property
developed by the Berg Group on land currently owned or optioned, or acquired for
these purposes in the future, directly or indirectly, by Carl E. Berg or Clyde
J. Berg so long as the Berg Group members and their affiliates own or have the
right to acquire shares representing at least 65% of our common stock on a fully
diluted basis. The principal terms of the agreement include the following:
(1) the full construction cost of the building; plus
(2) 10% of the full construction cost of the building; plus
<PAGE>
(3) interest at LIBOR plus 1.65% on the amount of the full construction cost of
the building for the period from the date funds were disbursed by the
developer to the close of escrow; plus
(4) the original acquisition cost of the parcel on which the improvements will
be constructed; plus
(5) 10% per annum of the amount of the original acquisition cost of the parcel
from the later of January 1, 1998 and the seller's acquisition date, to the
close of escrow; minus
(6) the aggregate principal amount of all debt encumbering the acquired
property.
- The acquisition cost, net of any debt, will be payable in O.P. Units
valued at the average closing price of the Common Stock over the
30-trading-day period preceding the acquisition or in cash, at the
option of the Berg Group.
- The Company must assume all tax assessments.
- If the Company elects not to exercise the option with respect to any
property, the Berg Group may hold and lease the property for its own
account, or may sell it to a third party.
- All action taken by the Company under the Berg Land Holdings Option
Agreement must be approved by a majority of the members of the
Independent Directors Committee.
<PAGE>
The following table presents certain information concerning projects
acquired since January 1, 1999 under the Pending Projects Acquisition Agreement
("PENDING") and the Berg Land Holdings Option Agreement ("BERG LAND") or to be
acquired in the future under the Pending Projects Acquisition Agreement:
<TABLE>
<CAPTION>
Actual/ Estimated
Approximate Anticipated Total O.P.
Rentable Area Acquisition Acquisition Cash/Debt Units
Property (square feet) Period Price Assumption Issued
- ---------------------------- ------------- ------------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
PENDING
6810 Santa Teresa 54,996 Q1 - 99 $ 6,648,000 $ 3,524,601 694,030
1065 - 1105 La Avenida 515,700 Q2 - 99 $116,486,830 $57,057,000 13,206,629
1750 Automation 80,640 Q3 - 99 $ 10,050,101 $ 3,500,000 1,455,578
1756 Automation 80,640 Q1 - 00 $ 11,059,200 $ 5,000,000 1,346,480
1762 Automation (1) 61,100 Q2 - 00 $ 8,379,429 $ 3,788,200 1,020,273
1768 Automation (1) 114,028 Q4 - 00 $ 15,637,800 $ 7,069,736 1,904,014
1688 Richard 52,800 Q3 - 99 $ 4,197,600 $ 2,374,353 405,166
BERG LAND
5713 - 5749 Fontanoso 77,700 Q4 - 99 $ 7,169,394 $ 3,943,924 406,358
------------- ------------ ------------ ----------
1,037,604 $179,628,354 $86,257,814 20,438,528
</TABLE>
(1) Estimated acquisition price based upon the contractual capitalization rate.
Although the capitalization rates have been agreed upon and will not
change, the sellers of the pending development projects may elect to
receive cash or O.P. Units at the value of $4.50 per unit, which was set in
May 1998 based on the selling price for our shares in private placement
transactions with unrelated purchasers. This valuation represents a
substantial discount from the current price of the Common Stock and may be
substantially lower than the value of the Company's Common Stock at the
future issuance dates of the O.P. Units. Under generally accepted
accounting principles, the acquisition cost in the form of O.P. Units
issued will be calculated based upon the current market value of the Common
Stock on the date the acquisition closes. Consequently, the Company's
actual cost of these future acquisitions as well as the actual
capitalization rate for accounting rather than cash purposes will depend in
large part on the percentage of the fixed acquisition value paid for by the
issuance of O.P. Units and the price of the Common Stock on the closing of
the acquisition.
OTHER COVENANTS. The Acquisition Agreement, Berg Land Holdings Option
Agreement and Supplemental Agreement to which the Company and the Berg Group, or
Carl E. Berg and Clyde J. Berg, individually are parties includes the
undertaking of Carl E. Berg not to directly or indirectly acquire or develop, or
acquire any equity ownership interest in any entity that has an ownership
interest in, any real estate zoned or intended for use as R&D, office or
industrial properties, with the exception of investments in securities of
publicly traded companies, which securities do not represent more than 10% of
the outstanding voting securities of such companies, in California, Oregon or
Washington without first disclosing such investment opportunity to the Company
and making such opportunity available to the Company, subject to the approval of
the Independent Directors Committee. This restriction does not apply to any
acquisition of the projects subject to the Pending Projects Acquisition
Agreement or completed buildings acquired pursuant to the Berg Land Holdings
Option Agreement or the Supplemental Agreement. This restriction remains in
effect until the date on which both of the following conditions are satisfied:
(i) no nominee of the Berg Group is a member of the Board of Directors; and (ii)
the Berg Group and its affiliates, other than the Company and the Operating
Partnerships, beneficially own less than 25% of the outstanding Common Stock,
including for these purposes all shares issuable upon exercise of the rights to
exchange O.P. Units for Common Stock.
<PAGE>
In addition, transactions between the Company and any member of the Berg
Group, or an entity in which a member of the Berg Group holds at least 5% of the
equity interests, including the Company's election to issue Common Stock or pay
cash in exchange for O.P. Units tendered by the Berg Group are subject to review
and approval by the Independent Directors Committee. Aside from these
restrictions, the Berg Group is generally free to conduct its business
activities and will not be required to seek the approval of such activities or
refer business opportunities to the Company, nor will it have any liability to
the Company for its failure to do so.
ISSUANCE AND ASSUMPTION OF DEBT. As of March 31, 2000, the Company was
liable for loans aggregating approximately $36,070,000 million payable to the
Berg Group. These loans are secured by seven properties, bears interest at LIBOR
plus 1.30 percent and the maturity date has recently been extended to March,
2001.
In September 1998, the Company assumed a $100 million line of credit with
the Wells Fargo Bank N.A. previously provided to and guaranteed by the Berg
Group, which was reduced to $50 million subsequently. The Wells Fargo line of
credit expired on February 29, 2000 and was repaid with proceeds from and
replaced by a $50 million line of credit from the Berg Group. The Wells Fargo
line of credit was collateralized by 14 of the Company's properties and was
guaranteed by Mr. Berg and certain other members of the Berg Group.
When the Company acquired the Microsoft project in April 1999, it assumed a
mortgage loan of $25.0 million payable to the Berg Group.
Effective December 31, 1998, the Berg Group loaned $9.6 million to the
operating partnerships, which was equal to the amount of distributions payable
by the operating partnerships with respect to the Berg Group's O.P. Units as of
December 28, 1998. During the year ended December 31, 1999, distributions
payable to various members of the Berg Group of approximately $27.3 million
relating to the first, second and third quarters of 1999 were converted to
related party debt, on terms identical to the Wells Fargo line of credit.
LEASE FROM BERG GROUP. The Company leases its executive offices from the
Berg Group. For the year ended December 31, 1999, the Company paid $80,640 to
the Berg Group under the terms of the lease agreement for its executive offices.
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Directors, officers and greater than ten percent holders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) reports they
file.
To the Company's knowledge, based solely on review of the copies of the
above-mentioned reports furnished to the Company and written representations
regarding all reportable transactions, during the fiscal year ended December 31,
1999, all Section 16(a) filing requirements applicable to its Directors,
officers and greater than ten percent holders were complied with on time.
REPORT ON EXECUTIVE COMPENSATION BY THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee (the "Committee") comprises three independent
members of the Board of Directors. The Company's Board of Directors has
delegated to the Committee responsibility for reviewing, recommending and
approving the Company's compensation policies and benefits programs. The
Committee also has the principal responsibility for the administration of the
company's stock plans, including approving stock option grants to executive
officers.
COMPENSATION PHILOSOPHY
The Company's executive compensation policy is designed to attract and
retain qualified executive personnel by providing executives with a competitive
total compensation package based in large part on their contribution to the
financial and operational success of the Company, the executive's personal
performance and increases in stockholder value as measured by the Company's
stock price.
COMPENSATION PROGRAM
The compensation package for the Company's executive officers consists of
the following three components:
BASE SALARY. The Committee determines the base salary of each executive
based on the executive's scope of responsibility, past accomplishments and
experience and personal performance, internal comparability considerations and
data regarding the prevailing compensation levels for comparable positions in
relevant competing executive labor markets. The Committee may give different
weight to each of these factors for each executive, as it deems appropriate. In
selecting comparable companies for the purpose of setting competitive
compensation for the Company's executives, the Committee considers many factors
not directly associated with stock price performance, such as geographic
location, annual revenue and profitability, organizational structure,
development stage and market capitalization.
<PAGE>
ANNUAL INCENTIVE COMPENSATION. At the present time, the Company does not
have an annual incentive compensation program in place. However, the
Compensation Committee may in the future at the Committee's discretion institute
an annual incentive program.
STOCK OPTIONS. The Committee believes that granting stock options to
executives and other key employees on an ongoing basis gives them a strong
incentive to maximize stockholder value and aligns their interests with those of
other stockholders. The Committee determines stock option grants to executives
and has authorized the Company's CEO to determine stock option grants for all
other employees, subject to the Committee's approval of total share allocations
from the Company's option plan. In determining the size of stock option grants,
the Committee considers the executive's current position with and
responsibilities to the Company, potential for increased responsibility and
promotion over the option term, tenure with the Company and performance in
recent periods, as well as the size of comparable awards made to executives in
similar positions in competing executive labor markets. Generally, each stock
option grant allows the executive to purchase shares of the Company's common
stock at a price per share equal to the market price on the date the option is
granted, but the Committee has the power to grant options at a lower price if
considered appropriate under the circumstances. Each stock option grant
generally becomes exercisable, or vests, in installments over time, contingent
upon the executive's continued employment with the Company.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. The annual salary for Mr. Berg,
was set in 1997 and first became payable in 1998. The Compensation Committee has
no plan to adjust his compensation.
Compliance with Internal Revenue Code Section 162(m). Section 162(m) of the
Internal Revenue Code generally disallows a tax deduction to publicly-held
companies for compensation paid to certain executive officers, to the extent
that compensation paid to the officer exceeds $1 million during the Company's
taxable year. the compensation paid to the company's executive officers for the
year ended December 31, 1999 did not exceed the $1 million limit per officer. In
addition, the Company's 1997 Stock Option Plan and executive incentive option
grants have been structured so that any compensation deemed paid to an executive
officer in connection with the exercise of his or her outstanding options with
an exercise price per share equal to the fair market value per share of the
Common Stock on the grant date will qualify as performance-based compensation
that will not be subject to the $1 million limitation. It is very unlikely that
the cash compensation payable to any of the Company's executive officers in the
foreseeable future will approach the $1 million limit, and the Compensation
Committee does not expect to take any action at this time to modify cash
compensation payable to the Company's executive officers to avoid the
application of Section 162(m).
John C. Bolger, Compensation Committee Member
William A. Hasler, Compensation Committee Member
Lawrence B. Helzel, Compensation Committee Member
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the company's Board of Directors was formed
in December 1998 and currently is comprised of Messrs. John C. Bolger, William
A. Hasler and Lawrence B. Helzel. None of these individuals was at any time
during 1999, or at any other time, an officer or employee of the Company. No
executive officer of the Company serves as a member of the compensation
committee of any other entity that has one or more executive officers serving as
a member of the Company's Board of Directors or Compensation Committee.
<PAGE>
--------------------------------------------------
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
--------------------------------------------------
At the Meeting, four Directors (constituting the entire Board of Directors)
are to be elected to serve until the next annual meeting of Stockholders and
until a successor for such Director is elected and qualified, or until the
death, resignation or removal of such Director. There are four nominees, all of
whom are currently Directors of the Company.
NOMINEES
Set forth below is information regarding the nominees for election to the
Board of Directors:
<TABLE>
<CAPTION>
Name Position(s) with the Company First Elected Director
- ------------------------------ ------------------------------ ------------------------
<S> <C> <C>
Carl E. Berg Chairman of the Board, Chief 1997
Executive Officer, President
and Acting Chief Financial
Officer
John C. Bolger Director 1998
William A. Hasler Director 1998
Lawrence B. Helzel Director 1998
</TABLE>
In accordance with the Bylaws, it is a qualification of two directors that
they be nominated by the Berg Group and that one such director be Carl E. Berg
or the Berg Designee as long as the Berg Group and its affiliates (other than
the Company and the Operating Partnership) own at least 15% of the fully-diluted
number of shares. The Company has been advised by Mr. Berg, representing the
Berg Group, that he will be the only Berg Group nominee for election at this
meeting.
A plurality of the votes cast at the Meeting is required to elect each
nominee as a Director. Unless authority to vote for any of the nominees named
above is withheld, the shares represented by the enclosed proxy will be voted
FOR the election as Directors of such nominees. Each person nominated has agreed
to serve if elected, and the Board of Directors has no reason to believe that
any nominee will be unavailable or will decline to serve. In the event, however,
that any nominee is unable or declines to serve as a Director at the time of the
Meeting, the proxies will be voted for any nominee who is designated by the
current Board of Directors to fill the vacancy.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF ALL OF THE ABOVE NOMINEES.
<PAGE>
--------------------------------------------------
PROPOSAL NO. 2:
INDEPENDENT PUBLIC ACCOUNTANTS
--------------------------------------------------
The Board of Directors has appointed PricewaterhouseCoopers LLP,
independent public accountants, to audit the financial statements of the Company
for the year ending December 31, 2000. The Board of Directors proposes that the
stockholders ratify this appointment. The Company expects that it's
representatives of PricewaterhouseCoopers LLP will be present at the Annual
Meeting, will have the opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions.
In the event that stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors, in its discretion, may direct the appointment of a different
independent accounting firm at any time during the year if the Board of
Directors determines that such a change would be in the Company's best
interests.
On March 12, 1998, Price Waterhouse LLP, San Diego, California ("Price
Waterhouse"), the independent accountant previously engaged as the principal
accountant to audit the financial statements of Mission West Properties (the
"Company"), was dismissed by the Company. There were no disagreements with Price
Waterhouse on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements if not
resolved to their satisfaction would have caused them to make reference in
connection with their opinion on the subjection matter of the disagreement.
The Company engaged Coopers & Lybrand LLP, San Francisco, California
("Coopers & Lybrand") as the Company's new principal independent accountants as
of March 12, 1998. During the Company's two most recent fiscal years and through
March 12, 1998, the Company had not consulted with Coopers & Lybrand regarding
either (i) the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on the Company's financial statements, and neither a written report nor
oral advice was provided to the Company that Coopers & Lybrand concluded was an
important factor considered by the Company in reaching a decision as to the
accounting, auditing or financial reporting issue. In 1999, Price Waterhouse and
Coopers & Lybrand merged, becoming PricewaterhouseCoopers LLP.
The affirmative vote of a majority of the votes cast affirmatively or
negatively at the Meeting is required to ratify the appointment of the
independent public accountants.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP TO SERVE AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 2000.
<PAGE>
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
In addition, if you desire to bring business (including director
nominations) before the Company's 2001 Annual Meeting, the Company's Bylaws
received by the Company's Secretary before December 31, 2000. For additional
requirements, a stockholder should refer to our Bylaws, Article II, Section 12,
"Nominations and Proposals by Stockholders," a current copy of which may be
obtained from our Secretary. If the Company does not receive timely notice
pursuant to the Company's Bylaws, any proposal will be excluded from
consideration at the meeting, regardless of any earlier notice provided in
accordance with SEC Rule 14a-8. All stockholder proposals should be addressed to
the attention of the Chief Executive Officer at the principal office of the
Company.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
stockholder action at the Annual Meeting. However, if other matters do properly
come before the Annual Meeting or any adjournments or postponements thereof, the
Board of Directors intends that the persons named in the proxies will vote upon
such matters in accordance with the best judgment of the proxy holders.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Michael Knapp
----------------------------------
Secretary
Cupertino, California
May 1, 2000
<PAGE>
MISSION WEST PROPERTIES, INC.
------------------
------------------------
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Carl E. Berg and Michael L. Knapp, each
with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, all shares of common stock of Mission West Properties,
Inc. (the "Company") held of record by the undersigned on April 28, 2000 at the
Annual Meeting of Stockholders to be held May 31, 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 REQUIRED IF MAILED IN THE UNITED STATES.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy.
There are a number of issues related to the operation of the Company that
require your immediate attention.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy in the enclosed
postage paid envelope.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Mission West Properties, Inc.
- --------------------------------------------------------------------------------
DETACH HERE
[X] Please mark vote as in this example
1. Election of Directors
NOMINEES: Carl E. Berg, John C. Bolger, William A. Hasler, and
Lawrence B. Helzel
FOR WITHHELD
[ ] [ ]
2. Ratify the appointment of PricewatershouseCoopers LLP as independent
auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting.
- ---------------------------------------------------- MARK HERE FOR [ ]
Name ADDRESS CHANGE
AND NOTE AT LEFT
- ----------------------------------------------------
Street Address
- ----------------------------------------------------
City State Country Zip Code
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.
[ ] Please check here if you plan on attending the Annual Shareholders Meeting.
Signature: ___________________________________ Date: _____________
Signature: ___________________________________ Date: _____________
