<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy statement pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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 Under Rule 14a-12
BRADLEY REAL ESTATE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the 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 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 if 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 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:
<PAGE>
BRADLEY REAL ESTATE, INC.
40 SKOKIE BOULEVARD, SUITE 600
NORTHBROOK, ILLINOIS 60062-1626
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 11, 2000
March 30, 2000
To Stockholders of
BRADLEY REAL ESTATE, INC.:
The 2000 Annual Meeting of Stockholders (the "Annual Meeting") of Bradley
Real Estate, Inc. (the "Company") will be held at 11:00 a.m., local time, on
the 57th floor of BANK ONE's corporate offices, 1 Bank One Plaza, Chicago,
Illinois on Thursday, May 11, 2000 for the following purposes:
1. To elect two Directors of the Company to serve for three-year terms
until the 2003 Annual Meeting of Stockholders and until their respective
successors have been duly elected and qualified; and
2. To consider and act upon any other matters which may properly be brought
before the Annual Meeting and any adjournments or postponements thereof
as well as on matters related to the conduct of the meeting.
The close of business on March 17, 2000 has been fixed by the Company's
Board of Directors as the record date for determining stockholders entitled to
notice of and to vote at the Annual Meeting or any adjournments or
postponements thereof.
By Order of the Board of Directors:
MARIANNE DUNN, Secretary
IMPORTANT REMINDER: Please complete, date and sign the enclosed proxy card
and return it in the accompanying postage paid envelope, even if you plan to
attend the Annual Meeting. Stockholders of record may revoke their proxies
in writing or at the Annual Meeting if they wish to vote in person.
<PAGE>
BRADLEY REAL ESTATE, INC.
40 Skokie Boulevard, Suite 600
Northbrook, Illinois 60062-1626
PROXY STATEMENT
Proxies in the form of the enclosed proxy card are solicited by the Board of
Directors of Bradley Real Estate, Inc., a Maryland corporation (the "Company"),
for use at the 2000 Annual Meeting of Stockholders of the Company (the "Annual
Meeting") to be held on Thursday, May 11, 2000 on the 57th floor of BANK ONE's
corporate offices, 1 Bank One Plaza, Chicago, Illinois at 11:00 a.m. local
time. The Board has fixed the close of business on March 17, 2000 as the record
date for determining stockholders entitled to notice of and to vote at the
Annual Meeting (the "Record Date"). Only holders of record of shares of the
common stock, par value $.01 per share, of the Company (the "Common Shares")
and/or shares of the 8.4% Series A Convertible Preferred Stock, par value $.01
per share, of the Company (the "Preferred Shares," and together with the Common
Shares, the "Shares") at the close of business on the Record Date will be
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
the Company had (i) 22,252,586 Common Shares outstanding, each of which is
entitled to one vote with respect to each matter submitted at the Annual
Meeting and (ii) 3,478,219 Preferred Shares outstanding, each of which is
entitled to one vote for each share of the Common Shares into which the
holder's Preferred Shares are convertible, which as of the date of this Proxy
Statement is 1.0208 votes per Preferred Share.
At the Annual Meeting, stockholders will be asked to vote upon the election
of two Directors of the Company. Stockholders of the Company will vote together
as a single class on the election of Directors. The presence, in person or by
proxy, of Shares entitled to cast at least a majority of the votes entitled to
vote at the Annual Meeting is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. STOCKHOLDERS ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE
PROVIDED. Shares represented by properly executed proxies received by the
Company will be voted at the Annual Meeting in accordance with the instructions
contained therein. If no specific voting instructions are indicated on the
proxy, the Shares represented thereby will be voted in favor of the Directors
nominated by the Board and in the named proxies' discretion as to any other
matters which may properly come before the Annual Meeting or any adjournment or
postponement thereof as well as on matters related to the conduct of the
Meeting. Any proxy may be revoked by the holder of record at any time before it
is voted, by written notice to the Company, by executing and duly delivering a
proxy bearing a later date or by voting in person at the Annual Meeting. Any
stockholder of record as of the Record Date attending the Annual Meeting may
vote in person whether or not a proxy has been previously given, but the
presence, without further action, of a stockholder at the Annual Meeting will
not constitute a revocation of a previously delivered proxy.
The Notice of Annual Meeting, the Proxy Statement and the proxy card,
together with the Company's Annual Report for 1999, are first being mailed to
stockholders on or about March 30, 2000.
<PAGE>
I. ELECTION OF DIRECTORS
A.Information Regarding Nominees and Directors
The Charter and the Bylaws of the Company provide for a staggered board,
consisting of the number of Directors designated from time to time by the Board
of Directors, divided into three classes. The Directors of each class serve for
three-year terms that expire over a three-year period on a revolving basis.
The Board of Directors has nominated Stephen G. Kasnet and A. Robert Towbin
for election as Directors at the Annual Meeting, to serve for three-year terms
until the 2003 Annual Meeting of Stockholders and until their respective
successors have been elected and qualified, and to serve with the five
Directors whose terms expire in 2001 and 2002. Each of these nominees currently
is serving as a Director for a term expiring at the Annual Meeting.
The Board of Directors recommends a vote FOR the Directors nominated by the
Board.
Information regarding the two nominees and the other Directors is set forth
below. This information has been furnished by the individuals named.
<TABLE>
<CAPTION>
Principal Occupation Director Term to
Name Age and Other Affiliations Since Expire
---- --- ---------------------- -------- -------
<C> <C> <S> <C> <C>
Stephen G. Kasnet.. 54 Mr. Kasnet serves as President of 1986 2003*
Pioneer Global Investments,
Executive Vice President of The
Pioneer Group, and President of
Pioneer Poland Real Estate Fund.
From 1996 to 1998, Mr. Kasnet
served as President of Pioneer
Real Estate Advisors, Inc. and
Vice President of The Pioneer
Group. He was Managing Director
of First Winthrop Corporation and
Winthrop Financial Associates,
which are real estate development
and management companies, from
1991 to September 1995. He is
also Chairman of the Board of
Warren Bancorp, Inc. and Warren
Five Cents Savings Bank in
Peabody, Massachusetts, a Trustee
and Vice President of Pioneer
Real Estate Shares and Pioneer
Real Estate Shares (Dublin), and
a member of the Urban Land
Institute.
A. Robert Towbin... 64 Mr. Towbin is Co-Chairman and 1994 2003*
Managing Director of C.E.
Unterberg Towbin. From January
1994 to August 1995, he was
President and Chief Executive
Officer of the Russian-American
Enterprise Fund and, upon its
merger with the Fund for Large
Enterprises in Russia, Vice
Chairman of the resulting U.S.
Russia Investment Fund. From 1987
to 1994, Mr. Towbin was a
Managing Director of Lehman
Brothers. Prior to 1987, he was a
Director and Vice Chairman of
L.F. Rothschild, Unterberg,
Towbin Holdings, Inc. Mr. Towbin
serves as a Director of Gerber
Scientific, Inc., Globalstar
Telecommunications Limited,
Globecomm Systems, Inc., True
Time, Inc. and K&F Industries
Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation Director Term to
Name Age and Other Affiliations Since Expire
---- --- ---------------------- -------- -------
<C> <C> <S> <C> <C>
William L. Brown.... 78 Mr. Brown is retired. He was 1990 2002
Chairman of the Board of
BankBoston Corporation and The
First National Bank of Boston
from 1983 to 1989, Chief
Executive Officer from 1983 to
1987 and President from 1971 to
1982. He was a Director of both
Bank of Boston Corporation and
The First National Bank of
Boston until March 1992. He is
also a Director of GC Companies,
Inc. and Ionics Incorporated.
Thomas P. D'Arcy.... 40 Mr. D'Arcy was elected 1996 2002
President, Chief Executive
Officer and a Director of the
Company in 1996 and Chairman of
the Board in 1998. Mr. D'Arcy
previously served as Executive
Vice President of the Company
from September 1995 to February
1996, Senior Vice President of
the Company from June 1992 to
September 1995, Vice President
of the Company from October 1991
to June 1992 and Investment
Manager from September 1989 to
October 1991. Mr. D'Arcy is a
member of the International
Council of Shopping Centers, the
Building Owners and Managers
Association and the National
Association of Real Estate
Investment Trusts.
Joseph E. Hakim..... 51 Mr. Hakim has served since 1990 1994 2002
as President and Chief Executive
Officer of Merchandise Mart
Properties, Inc. in Chicago,
Illinois. Mr. Hakim served as
Chairman of the Board of the
Company from February 1996 to
May 1998. He has served as
Chairman of the Board of Joseph
P. Kennedy Enterprises, Inc.
since 1998, and was the
President of Joseph P. Kennedy
Enterprises, Inc. from 1980 to
1998. Mr. Hakim is also the
Treasurer of the Joseph P.
Kennedy Foundation.
Paul G. Kirk, Jr. .. 62 Mr. Kirk is counsel to, and 1991 2001
until 1989 was a partner in the
law firm of Sullivan & Worcester
in Boston, Massachusetts. He is
also Chairman and Treasurer of
Kirk and Associates, Inc., a
business advisory and consulting
firm. From 1985 to 1989, he
served as Chairman of the
Democratic Party of the United
States, and from 1983 to 1985 as
its Treasurer. Mr. Kirk is a
Director of Hartford Life
Insurance Inc., Hartford
Financial Services Group, Inc.
and Rayonier, Inc. He is a
Trustee of St. Sebastian's
School, Co-Chairman of the
Commission on Presidential
Debates, Chairman of the John F.
Kennedy Library Foundation and
Chairman of the National
Democratic Institute for
International Affairs.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation Director Term to
Name Age and Other Affiliations Since Expire
---- --- ---------------------- -------- -------
<C> <C> <S> <C> <C>
W. Nicholas Thorndike.. 67 Mr. Thorndike serves as a 1980 2001
corporate director or trustee
of a number of organizations,
including Courier Corporation,
Eastern Utility Associates, The
Putnam Funds and Cabot
Industrial Trust. He also has
served as a Trustee of
Massachusetts General Hospital
for many years, having served
as Chairman of the Board from
1987 to 1992 and President from
1992 to 1994. Until December
1988, he was Chairman and
Managing Partner of Wellington
Management Company (an
investment advisor).
</TABLE>
- --------
* If elected at the Annual Meeting.
There were four meetings of the Board of Directors of the Company in 1999.
All of the Directors attended at least 75% of such board meetings and meetings
of committees of which they were members.
The Company has standing Audit, Compensation and Executive Committees.
The Audit Committee makes recommendations to the full Board as to the
selection of the Company's independent public accounting firm, meets with
representatives of such firm two times a year and reviews transactions between
the Company and any Director, officer or affiliate for potential conflicts of
interest. Messrs. Thorndike, as Chairman, Brown and Kasnet served as members of
the Audit Committee at the two meetings held by such Committee in 1999.
The Compensation Committee, consisting of Messrs. Kirk, as Chairman, Hakim
and Towbin, with Mr. Brown as a voting member through May 13, 1999, is
responsible for the oversight of executive compensation and the issuance and
administration of option and other grants under the Company's Amended Stock
Option and Incentive Plan (the "Stock Option and Incentive Plan"). The
Compensation Committee met three times during 1999. For more information
regarding the Compensation Committee's duties, see "Report of the Compensation
Committee" below.
The Executive Committee, consisting of Messrs. Hakim, as Chairman, D'Arcy
and Kasnet, has authority to approve acquisitions of, additions to and
dispositions of properties. The Executive Committee met five times in 1999.
B.Compensation of Directors and Executive Officers
During 1999, the Company paid its non-employee Directors annual cash
retainers of $15,000, plus a fee of $1,000 for each Board meeting attended. The
chairman of each of the Audit, Compensation and Executive Committees received
an additional fee of $1,000, and each other committee member an additional fee
of $750, for each committee meeting attended. The Compensation Committee has
determined that all of the non-employee Directors, will continue to receive the
same $15,000 cash retainer and $1,000 fee per meeting for 2000. Pursuant to
advice from compensation consultants engaged by the Committee and the Company's
Stock Option and Incentive Plan, each non-employee Director who was serving as
a Director of the Company on the next business day after the adjournment of the
Company's Annual Meeting of Stockholders receives on such day a nonqualified
option to purchase 3,500 Common Shares. Thus, each non-employee Director
serving as a Director on the next business day after the adjournment of the
2000 Annual Meeting will receive on such day a non-qualified option to purchase
3,500 Common Shares. All such options are immediately exercisable in full
4
<PAGE>
and have an exercise price per share equal to the fair market value of the
Common Shares at the time of grant, as determined by reference to a formula
provided in the Stock Option and Incentive Plan. In addition, all Directors are
reimbursed for travel expenses incurred in attending meetings of the Board and
its committees.
The following sections of this Proxy Statement set forth and discuss the
compensation paid or awarded during the last three fiscal years to (i) the
Company's Chief Executive Officer and (ii) the four other most highly
compensated executive officers who earned in excess of $100,000 as compensation
for their services during 1999 (collectively, the "Named Executives").
Summary Compensation Table
The following table sets forth certain information regarding the cash and
equity-based compensation paid or granted by the Company to or on behalf of the
Named Executives in all capacities as compensation for their services during
each of the three years ended December 31, 1999.
<TABLE>
<CAPTION>
Annual Compensation Long-Term
---------------------------- Compensation
Bonus Award
------------------- ------------
Common
Management Shares
Name and Cash Adjustment Underlying All Other
Principal Position Year Salary Bonus Awards(1) Options(2) Compensation
------------------ ---- -------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas P. D'Arcy, ...... 1999 $325,000 $275,000 $ -- 200,000 $7,642(3)
President and Chief 1998 325,000 244,000 -- 100,000 6,587
Executive Officer 1997 250,000 200,000 713,194 -- 3,342
Richard L. Heuer, ...... 1999 206,000 154,500 -- 50,000 3,650(4)
Executive Vice Presi- 1998 196,000 75,000 -- 50,000 2,950
dent
1997 185,000 70,000 285,274 -- 2,387
E. Paul Dunn, .......... 1999 195,500 146,250 -- 50,000 3,571(5)
Executive Vice Presi- 1998 185,500 75,000 -- 50,000 2,950
dent
1997 175,000 70,000 285,274 -- 2,232
Irving E. Lingo, Jr., .. 1999 195,000 146,250 -- 50,000 3,563(6)
Chief Financial Officer 1998 180,000 75,000 -- 50,000 2,950
1997 168,000 70,000 285,274 -- 2,181
Steven St. Peter, ...... 1999 185,000 146,250 -- 50,000 3,388(7)
Executive Vice Presi- 1998 157,576 75,000 -- 50,000 2,908
dent
1997 130,000 70,000 142,637 -- 791
</TABLE>
- --------
(1) Reflects (i) the market value on the date of issuance of "management
adjustment awards" in the form of unrestricted Common Shares issued on
February 18, 1998 in connection with the Board of Directors' decision in
the fourth quarter of 1997 to terminate the Company's Superior Performance
Incentive Plan, plus cash payments made in 1998 to cover the related
increased income tax liability, (ii) the Compensation Committee's
determination that such management adjustment awards should be allocated
equally to the service of the Named Executives for the Company during 1996
and 1997, and (iii) the Compensation Committee's awareness that no equity-
based compensation was awarded to the Named Executives in 1996 or 1997 and
that no stock options would be granted to the Named Executives during 1998.
The Board of Directors' decision to terminate the Superior Performance
Incentive Plan was based upon the fact that administrative complexities
made implementation of and accounting for such plan impractical, primarily
5
<PAGE>
because of the impossibility of accurately estimating quarterly period
costs of a plan whose pay-out, if any, would be based upon the superior
total return to stockholders of the Company in excess of the Company's peer
group over a 3-year period.
(2) Reflects stock options to purchase Common Shares granted to the Named
Executives under the Stock Option and Incentive Plan on January 27, 2000
based on 1999 performance and on February 1, 1999 based on 1998
performance. All such options vest over a period of 5 years, as follows:
50% on the third anniversary of their grant and 25% each on the fourth and
fifth anniversaries of their grant, subject to earlier vesting upon the
occurrence of specified events including a change of control (as defined
in the Stock Option and Incentive Plan) of the Company.
(3) Includes $4,142 in premiums paid by the Company for disability and life
insurance policies and Company matching contributions of $3,500 under the
Company's 401(k) plan.
(4) Includes $150 in premiums paid by the Company for a term life insurance
policy and Company matching contributions of $3,500 under the Company's
401(k) plan.
(5) Includes $150 in premiums paid by the Company for a term life insurance
policy and Company matching contributions of $3,421 under the Company's
401(k) plan.
(6) Includes $150 in premiums paid by the Company for a term life insurance
policy and Company matching contributions of $3,413 under the Company's
401(k) plan.
(7) Includes $150 in premiums paid by the Company for a term life insurance
policy and Company matching contributions of $3,238 under the Company's
401(k) plan.
Options Granted in Last Fiscal Year
The following table sets forth certain information regarding options that
were granted to Named Executives during 1999, based on 1998 performance.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Options Term(1)
- ------------------------------------------------------------------------------ -----------------------
Number of Percent of Total
Securities Options
Underlying Granted to Per Share
Options Employees in Exercise Expiration
Name Granted Fiscal Year Price Date 5% 10%
---- ---------- ---------------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Thomas P. D'Arcy............. 100,000 21% $19.90 1/31/09 $ 1,251,500 $ 3,171,550
Richard L. Heuer............. 50,000 11% 19.90 1/31/09 625,750 1,585,775
E. Paul Dunn................. 50,000 11% 19.90 1/31/09 625,750 1,585,775
Irving E. Lingo, Jr.......... 50,000 11% 19.90 1/31/09 625,750 1,585,775
Steven St. Peter............. 50,000 11% 19.90 1/31/09 625,750 1,585,775
</TABLE>
- --------
(1) Potential realizable values are based on assumed compound annual
appreciation rates specified by the SEC. These increases in value are
based on speculative assumptions and are not intended to forecast possible
future appreciation, if any, of the Company's stock price. The options
will have value only if they are exercised, and that value will depend
entirely on the share price on the exercise date.
6
<PAGE>
Unexercised Options at 1999 Year-End
The following table sets forth certain information regarding unexercised
stock options held by the Named Executives as of December 31, 1999. No Named
Executive exercised options during 1999.
<TABLE>
<CAPTION>
Number of Common Value of Unexercised
Shares Underlying In-the-Money
Unexercised Options at Options at
December 31, 1999 December 31, 1999
Name Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- ------------------------- ----------------------------
<S> <C> <C>
Thomas P. D'Arcy......... 40,000/100,000 $ 110,750/ --
Richard L. Heuer......... 25,000/50,000 64,063/ --
E. Paul Dunn............. --/50,000 --/ --
Irving E. Lingo, Jr...... 25,000/50,000 23,438/ --
Steven St. Peter......... --/50,000 --/ --
</TABLE>
- --------
(1) Market value of the Common Shares underlying the Named Executive's in-the-
money options at year-end (based on a closing market price of $17.4375 per
Common Share) minus the aggregate exercise price.
C.Report of the Compensation Committee
Committee Responsibilities. The responsibilities of the Compensation
Committee (the "Committee") include: (i) reviewing the performance of the Chief
Executive Officer and the other executive officers of the Company on at least
an annual basis; (ii) establishing the cash and equity-based compensation and
benefits to be provided to the executive officers of the Company; (iii) issuing
and administering awards under the Stock Option and Incentive Plan; (iv)
informally reviewing, to the extent available, information with respect to the
compensation paid to executive officers of comparable equity real estate
investment trusts ("REITs") comprising the "NAREIT Strip Center Index," and
comparing such information with the overall compensation paid to the Company's
executive officers; (v) recommending compensation for the members of the Board
of Directors for their services as Directors; and (vi) reporting periodically
to the full Board with respect to the foregoing.
Compensation Philosophy for Executive Officers. The Committee's executive
compensation philosophy is to align the interests of key executives with the
interests of stockholders by developing appropriate compensation measures for
such executives. The Committee believes that components of the total
compensation package for senior executives should include (i) a base salary,
(ii) an annual incentive bonus, which may be in the form of cash or stock and
the amount of which will depend upon the success of the Company and of the
executives' involvement in achieving specified objectives, and (iii) a long-
term performance incentive, the value of which will depend upon an increase in
the value of the Company's common stock over an extended period of time. For
1999, the compensation of the Company's Chief Executive Officer and other
executive officers was comprised of (i) an annual base salary, (ii) an annual
incentive cash bonus, and (iii) a long-term performance incentive in the form
of grants of nonqualified options made as of January 27, 2000 under the
Company's Stock Option and Incentive Plan.
Base Salary. In order to compete for and retain talented executives who are
critical to the Company's long term success, the Committee has determined that
the base salaries of executive officers should approximate those of executives
of equity REITs that compete with the Company for employees, investors and
tenants while also taking into account the executive officers' performance and
tenure. The Committee reviews base salaries annually and, if appropriate,
modifies such salaries to reflect recent market practices and
7
<PAGE>
performance. The increase in base salaries for 1999 over 1998 for the Named
Executives reflected in the accompanying table reflects the modifications made
by the Committee in early 1999. After its annual review of base salaries in
early 2000, the Committee maintained the base salaries of its Named Executives
for 2000, with the exception of Mr. St. Peter, whose salary was increased by
$10,000 from his 1999 base salary.
Annual Incentive Bonus. In order to motivate key executives to achieve
annual strategic business goals, the Committee believes executives should
receive annual incentive bonuses for their contributions in achieving such
goals. In particular, the Committee seeks to provide key executives with a
total compensation package that is competitive with comparable equity REITs
when, among other things, the Company's per share funds from operations ("FFO")
increase and its total return to stockholders exceeds that of comparable equity
REITs.
Beginning with the 1997 fiscal year, the Committee implemented an incentive
award program to compensate senior executive officers in the form of annual
incentive bonuses for achieving the Company's strategic business goals.
Pursuant to this program, at the beginning of each year the Committee, in
consultation with the Chief Executive Officer, establishes for each executive a
range of incentive bonus opportunities, stated as percentages of such
executive's base salary, which the executive is entitled to receive based in
part upon such executive's position to impact the annual success of the Company
and in part upon the level of performance achieved by the Company and the
individual executive for that year. With respect to that portion of the annual
incentive bonus that is based upon the Company's and the individual executive's
performance, sixty-five percent (65%) is tied to the Company's overall
performance level and thirty-five percent (35%) is tied to the individual
executive's performance level. In general, the threshold, target and maximum
amounts of the annual bonus, subject in each case to the Committee's
discretion, are set at 25%, 50% and 75% of annual base salary, respectively.
In consultation with the Chief Executive Officer, the Committee set as the
corporate performance measures for 1999 under the incentive award program (i)
growth in FFO per share, and (ii) achieving greater total stockholder return
than its peer group. In order to achieve the maximum incentive bonus allocated
to corporate performance, the Company's FFO per share had to increase by 9.0%
and its total stockholder return had to be 5.0% greater than its peer group.
The Company's actual growth in FFO per share in 1999 was 9.6% and its total
market return was 4.7% in excess of its peer group.
In assessing the individual performance component of the incentive award
program for each senior executive, the Committee considered the significant
roles played by the various executive officers in achieving the following
strategic initiatives during 1999: (i) exceeding an FFO per share target of
$2.24, and (ii) increasing the Company's return on real estate investments
above 10.25%. In addition to these financial factors, the Committee considered
the Company's success in implementing its development program, expanding its
redevelopment activities, implementing a comprehensive credit evaluation system
and bringing the Company's web site on-line, among other things. The Committee
acknowledged that the Company's ratio of debt to total market capitalization of
43.9% exceeded its target level of 40% and that the Company had not achieved a
market capitalization in excess of $1.25 billion but determined that the state
of the equity capital markets had prevented the Company from achieving these
objectives. Based upon these achievements and the recommendation of the Chief
Executive Officer, the Committee determined each senior executive was entitled
to the maximum level incentive bonus allocated to individual performance.
As a result of the above analysis, and exercising its authority to increase
or decrease amounts determined by formulaic allocation, the Committee, in
consultation with the Chief Executive Officer, awarded to the Named Executives
other than the Chief Executive Officer the following cash bonuses for 1999:
$154,500 to Mr. Heuer and $146,250 to each of Messrs. Dunn, Lingo and St.
Peter.
8
<PAGE>
Long-Term Incentive Program. Beginning with the 1998 fiscal year, the Board
of Directors, upon terminating the previous Superior Performance Incentive Plan
for the reasons described in note (1) to the accompanying Summary Compensation
Table and in the Committee's Report contained in the proxy statement relating
to the 1998 Annual Meeting, determined that the Company's long-term incentive
program would consist of the grant of nonqualified stock options under the
Company's Stock Option and Incentive Plan at the beginning of each year to
senior executives of the Company for a number of Common Shares which will vary,
depending on the position and salary of the executive and the Company's success
in delivering annual total stockholder returns that meet threshold, target or
superior returns established by the Committee. For 1999, the Committee
initially established these threshold, target and superior total returns at
10%, 12% and 15%, respectively.
The Committee met in early 2000 to review the Company's results and the
senior executives' respective performance during 1999. Although the 10%
threshold was not met for 1999, the Committee noted that, relative to its peer
group, the Company's performance during the year was very strong despite
difficult market conditions. The Company's total return was -7.8%, as compared
to -12.5% for its direct peers and -10.7% for the broader NAREIT Strip Center
Index, which consists of owners of community shopping centers such as the
Company. The Committee noted that, since January 1996, the Company has produced
the highest total returns to stockholders among its peer group. Accordingly,
the Committee exercised its discretionary power to grant stock options largely
equivalent to the amount set to have been granted upon meeting the threshold
level, including, with respect to the Named Executive Officers other than the
Chief Executive Officer, the grant of options to purchase 50,000 Common Shares
to each of Messrs. Heuer, Dunn, Lingo and St. Peter. In recognition of the
Chief Executive Officer's role in the Company's strong relative performance,
the Committee exercised its discretion to award options to purchase 200,000
Common Shares to Mr. D'Arcy, which is equivalent to the amount set to have been
granted if the target level had been met. The options were granted at an
exercise price of $17.50 per share, the closing price per Common Share on the
New York Stock Exchange on the January 27, 2000 grant date.
Pursuant to the long-term incentive program, each such option will vest with
respect to 50% of the underlying Common Shares on the third anniversary of the
grant, 75% of the underlying Common Shares on the fourth anniversary of the
grant, and 100% of the underlying Common Shares on the fifth anniversary of the
grant or earlier upon the occurrence of certain events, including a change of
control (as defined in the Company's Stock Option and Incentive Plan) of the
Company. The right to exercise any option granted under the program will expire
on the tenth anniversary of such grant or earlier upon the occurrence of
certain events.
Compensation of Chief Executive Officer. The Committee believes that Mr.
D'Arcy played a significant role in the Company's having achieved many of its
objectives in 1999 and performing well despite difficult market conditions.
Under the Committee's policies, Mr. D'Arcy's annual compensation is determined
in a manner similar to the other executive officers, with a base salary
reviewed annually, a bonus under the annual incentive bonus program and an
annual grant of a nonqualified stock option under the long-term incentive
program depending on whether the Company meets determined performance
objectives. In accordance with the goals and formulas established under the
Committee's annual incentive bonus program, the Committee awarded Mr. D'Arcy
the maximum cash bonus of $275,000 for 1999. As described above, exercising its
discretionary powers, the Committee awarded 200,000 stock options to Mr. D'Arcy
under the long-term incentive plan. Following its annual review of base
salaries, the Committee voted, consistent with Mr. D'Arcy's employment
agreement, to maintain Mr. D'Arcy's current base salary of $325,000 for 2000.
Federal Tax Regulations. As a result of Section 162(m) of the Internal
Revenue Code (the "Code"), the Company's Federal tax deduction of executive
compensation may be limited to the extent that the Chief
9
<PAGE>
Executive Officer or other executive officers whose compensation is required to
be reported in the summary compensation table in the Company's proxy statement
receives compensation in excess of $1,000,000 in a taxable year of the Company
(other than performance-based compensation that otherwise meets the
requirements of Section 162(m) of the Code). The Committee believes that the
amount by which the fair market value of stock issued to the Chief Executive
Officer and to the other Named Executives upon the exercise of the nonqualified
options granted to them under the long-term incentive program exceeds the
exercise price of such options (which amount will constitute taxable income to
the Named Executive) will be deductible by the Company as performance-based
compensation under Section 162(m) of the Code.
Submitted by:
Paul G. Kirk, Jr., Chairman
Joseph E. Hakim
A. Robert Towbin
D.Compensation Committee Interlocks and Inside Participation
The Compensation Committee consists of Messrs. Kirk, as Chairman, Hakim, and
Towbin. No member of the Compensation Committee has ever been an officer or
employee of the Company.
E.Employment Agreement
The Company has entered into an employment contract with Mr. D'Arcy for a
period of three years commencing April, 1999, with an automatic one year
evergreen extension unless notice is given by either party. The employment
contract provides a minimum annual base salary of $325,000 per year, which the
Board may increase based on an annual redetermination. Mr. D'Arcy's base salary
for 2000 is $325,000. Under the employment contract, Mr. D'Arcy is also
entitled to receive an annual incentive bonus and to participate in the
Company's long-term incentive program, which at the present time consists of
the grant of nonqualified options for Common Shares under the Stock Option and
Incentive Plan. See "Report of the Compensation Committee."
The contract contains a noncompetition provision and a change in control
provision pursuant to which Mr. D'Arcy would receive up to three times his
annual cash compensation in the event of a termination of his employment or a
significant alteration of his duties within 18 months of such change in
control.
10
<PAGE>
F.Share Performance Graph
The following graph provides a comparison of the five-year cumulative total
stockholder return (assuming reinvestment of dividends) among the Company, the
NAREIT Equity REIT Total Return Index (the "NAREIT Equity Index") and the
Standard & Poor's 500 Index, beginning on December 31, 1994. The NAREIT Equity
Index is an industry index maintained by the National Association of Real
Estate Investment Trusts ("NAREIT") which measures the performance over
applicable periods of time of those publicly-traded qualified REITs whose
investments consist primarily of the ownership of equity interests in income
producing real property. The NAREIT Equity Index includes the Company and,
according to NAREIT, 167 other REITs which, in the aggregate, had a market
capitalization of $118 billion at December 31, 1999. The historical information
set forth below is not necessarily indicative of future performance.
[CHART]
<TABLE>
<CAPTION>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
<S> <C> <C> <C> <C> <C> <C>
Bradley Real Estate, Inc. $ 100 $ 96 $ 140 $ 174 $ 182 $ 168
NAREIT Equity REIT Index $ 100 $ 115 $ 156 $ 188 $ 155 $ 148
S&P 500 $ 100 $ 137 $ 169 $ 225 $ 290 $ 351
</TABLE>
11
<PAGE>
II. BENEFICIAL OWNERSHIP OF SHARES
A. Security Ownership of Certain Beneficial Owners
Information known to the Company with respect to beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934 (the "Exchange
Act")) of more than 5% of the Company's outstanding Common Shares as of
December 31, 1999 is as follows. Such information is based upon filings
received by the Company under the Exchange Act and the number of shares
outstanding as of March 1, 2000. Based upon filings received by the Company
under the Exchange Act, there were no holders of more than 5% of the Company's
outstanding Preferred Shares as of December 31, 1999.
<TABLE>
<CAPTION>
No. of Common Shares Percent
Name and Address of Beneficial Owner Beneficially Owned of Class
- ------------------------------------ -------------------- --------
<S> <C> <C>
CRA Real Estate Securities, L.P. (1)............. 2,041,091 9.1%
259 N. Radnor Chester Road, Suite 205
Radnor, PA 19087
Public Employees Retirement System of Ohio (2)... 1,362,993 6.1%
277 East Town Street
Columbus, Ohio 43215-4642
European Investors Inc. (3)...................... 1,353,990 6.1%
667 Madison Avenue, 16th Floor
New York, NY 10021
LaSalle Investment Management (Securities), L.P.
(4)............................................. 1,315,100 5.9%
200 East Randolph Drive
Chicago, IL 60601
</TABLE>
- --------
(1) In a filing on Schedule 13G under the Exchange Act dated February 14, 2000
received by the Company and not subsequently amended, CRA Real Estate
Securities, L.P. reported that it had sole voting power with respect to
1,832,191 of such Shares, sole dispositive power with respect to 1,968,291
of such Shares, and shared dispositive power with respect to 72,800 of such
Shares.
(2) In a filing on Schedule 13G under the Exchange Act dated January 26, 2000
received by the Company and not subsequently amended, Public Employees
Retirement System of Ohio reported that it had sole voting power with
respect to all 1,362,993 of such Shares and sole dispositive power with
respect to all 1,362,993 of such Shares.
(3) In a filing on Schedule 13G under the Exchange Act dated February 10, 2000
received by the Company and not subsequently amended, European Investors
Inc. reported that it had sole voting power with respect to 204,391 of such
Shares, shared voting power with respect to 80,100 of such Shares, sole
dispositive power with respect to 214,990 of such Shares, and shared
dispositive power with respect to 80,100 of such Shares. EII Realty
Securities Inc., a wholly-owned subsidiary of European Investors Inc.,
reported that it had sole voting power with respect to 951,399 of such
Shares and sole dispositive power with respect to 1,058,900 of such Shares.
(4) In a filing on Schedule 13G under the Exchange Act dated February 10, 2000
received by the Company and not subsequently amended, LaSalle Investment
Management (Securities), L.P. reported that it had sole voting power with
respect to 132,200 of such Shares, shared voting power with respect to
1,182,900 of such Shares, sole dispositive power with respect to 132,200 of
such Shares, and shared dispositive power with respect to 1,182,900 of such
Shares. LaSalle Investment Management, Inc., a related party, filed as part
of a group reporting no ownership.
12
<PAGE>
B. Security Ownership of Management
Information known to the Company as of March 1, 2000 with respect to
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of the
Company's Common Shares by (i) each Director of the Company, (ii) each of the
Named Executives and (iii) all Directors and executive officers of the Company
as a group is as follows. Such information is based on filings received by the
Company under the Exchange Act, as supplemented by additional information
provided to the Company. Unless otherwise indicated, the beneficial owner has
sole voting power and sole dispositive power with respect to the Common Shares
beneficially owned. None of the following individuals own any Preferred Shares.
<TABLE>
<CAPTION>
No. of Common Shares Percent
Name of Beneficial Owner Beneficially Owned of Class (1)
- ------------------------ -------------------- ------------
<S> <C> <C>
William L. Brown............................ 18,500(2) *
Thomas P. D'Arcy............................ 87,412(3) *
Joseph E. Hakim............................. 312,435(4) 1.4%
Stephen G. Kasnet........................... 27,060(5) *
Paul G. Kirk, Jr. .......................... 18,726(6) *
W. Nicholas Thorndike....................... 29,877(7) *
A. Robert Towbin............................ 31,000(8) *
Richard L. Heuer............................ 51,146(9) *
E. Paul Dunn................................ 18,000(10) *
Irving E. Lingo, Jr. ....................... 43,506(11) *
Steven St. Peter............................ 9,323 *
All Directors and executive officers as a 684,883(12) 3.0%
group (13 persons).........................
</TABLE>
- --------
* Less than one percent.
(1) For purposes of computing the percentage of outstanding Common Shares held
by each person, any Common Shares which such person has the right to
acquire pursuant to the exercise of a stock option within 60 days following
March 1, 2000 is deemed to be outstanding, but is not deemed to be
outstanding for the purposes of computing the percentage ownership of any
other person.
(2) Includes 17,000 Common Shares subject to stock options granted to Mr. Brown
under the Company's Stock Option and Incentive Plan.
(3) Includes 40,000 Common Shares subject to stock options granted to Mr.
D'Arcy under the Company's Stock Option and Incentive Plan.
(4) Includes 17,000 Common Shares subject to stock options granted to Mr. Hakim
under the Company's Stock Option and Incentive Plan; 1,000 Common Shares
owned by Mr. Hakim's spouse, as to which Mr. Hakim does not have any voting
or investment power and as to which Mr. Hakim disclaims any beneficial
interest and 286,635 Common Shares owned by a trust for which Mr. Hakim
serves as trustee and as to which Mr. Hakim disclaims any beneficial
interest.
(5) Includes 17,000 Common Shares subject to stock options granted to Mr.
Kasnet under the Company's Stock Option and Incentive Plan and 8,350 Common
Shares which Mr. Kasnet and his spouse own jointly. Also includes 1,710
owned by a family trust of which Mr. Kasnet is trustee; Mr. Kasnet
disclaims any economic interest in such 1,710 Common Shares. Does not
include any Common Shares which may be beneficially owned by Pioneer Real
Estate Shares, of which Mr. Kasnet serves as Trustee and Vice President.
Mr. Kasnet does not have any voting or dispositive power with respect to
any Common Shares owned by Pioneer Real Estate Shares.
(6) Includes 17,000 Common Shares subject to stock options granted to Mr. Kirk
under the Company's Stock Option and Incentive Plan.
13
<PAGE>
(7) Includes 17,000 Common Shares subject to stock options granted to Mr.
Thorndike under the Company's Stock Option and Incentive Plan.
(8) Includes 17,000 Common Shares subject to stock options granted to Mr.
Towbin under the Company's Stock Option and Incentive Plan, 1,000 Common
Shares held by a family trust of which Mr. Towbin is trustee and 8,000
Common Shares beneficially owned by Global Foundation for the Humanities,
of which Mr. Towbin serves as a Director. Mr. Towbin disclaims any economic
interest in the 1,000 Common Shares owned by the family trust and the 8,000
Common Shares owned by Global Foundation for the Humanities. Mr. Towbin has
sole investment power but no voting power with respect to the Common Shares
owned by Global Foundation for the Humanities.
(9) Includes 25,000 Common Shares subject to stock options granted to Mr. Heuer
under the Company's Stock Option and Incentive Plan.
(10) Includes 2,000 Common Shares owned by Mr. Dunn's spouse, as to which Mr.
Dunn does not have any voting or investment power and as to which Mr. Dunn
disclaims any economic interest.
(11) Includes 25,000 Common Shares subject to stock options granted to Mr.
Lingo under the Company's Stock Option and Incentive Plan.
(12) Includes 211,000 Common Shares subject to stock options granted to the
Directors and executive officers of the Company under the Company's Stock
Option and Incentive Plan.
III. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
No Director, officer or associate of any such person is or at any time
during 1999 was indebted to the Company, and it has not been the Company's
practice to make loans to Directors, officers or their associates.
IV. INDEPENDENT PUBLIC ACCOUNTANT
KPMG LLP served as the Company's independent public auditors for the fiscal
year ended December 31, 1999 and has been selected by the Board to be the
Company's independent public auditors for 2000. A representative of KPMG LLP is
expected to be present at the Annual Meeting with the opportunity to make a
statement, if he or she so desires, and to answer appropriate questions from
stockholders.
V. SOLICITATION OF PROXIES AND VOTING PROCEDURES
The entire cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, solicitation may also be made by personal
interview, telegram, facsimile transmission or telephone. Directors and
officers of the Company may participate in such solicitation. Banks, brokerage
houses, custodians, nominees and other fiduciaries have been requested to
forward proxy materials to the beneficial owners of the Shares held of record
by them and such custodians will be reimbursed for their expenses.
The presence, in person or by proxy, of holders of Shares entitled to cast
at least a majority of the total number of votes entitled to vote is necessary
to constitute a quorum for the transaction of business at the Annual Meeting.
Shares held of record by stockholders or nominees who do not return a signed
and dated proxy or attend the Annual Meeting in person will not be considered
present or represented at the Annual Meeting and will not be counted in
determining the presence of a quorum. Shares that reflect abstentions or
"broker nonvotes" (i.e., Shares represented at the Annual Meeting held by
brokers or nominees as to which instructions have not been received from the
beneficial owners or persons entitled to vote such Shares and, with
14
<PAGE>
respect to one or more but not all issues, such brokers or nominees do not have
discretionary voting power to vote such Shares), if any, will be counted as
present for purposes of determining whether a quorum is present.
Directors are elected by a plurality of votes cast if a quorum is present.
With respect to the election of Directors, votes may only be cast in favor of
or withheld from each nominee; votes that are withheld, abstentions and broker
nonvotes will have no impact on the outcome of the election of Directors and
will be excluded entirely from the vote and will have no effect.
VI. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who own more than ten percent of the Company's Common
Shares or of the Company's Preferred Shares to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. Officers, directors and greater than ten percent
stockholders are required by the Securities and Exchange Commission regulations
to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Section 16(a)
reports were required for those persons, the Company believes that during the
fiscal year ended December 31, 1999, all filing requirements were complied
with.
VII. STOCKHOLDER PROPOSALS AND OTHER MATTERS
Stockholder proposals intended to be presented at the 2001 Annual Meeting of
Stockholders must be received by the Company on or before November 30, 2000 in
order to be considered for inclusion in the Company's Proxy Statement and form
of proxy for that meeting. These proposals must also comply with the rules of
the Securities and Exchange Commission governing the form and content of
proposals in order to be included in the Company's proxy statement and form of
proxy and should be directed to the Secretary of the Company.
The Company's Bylaws provide that any stockholder of record wishing to have
a stockholder proposal that is not included in the Company's Proxy Statement
considered at an annual meeting must provide written notice of such proposal
and appropriate supporting documentation, as provided in the Company's Bylaws,
to the Secretary of the Company no earlier than December 12, 2000 and no later
than February 26, 2001, if the Company's 2001 Annual Meeting of Stockholders is
on the business day closest to the Anniversary Date as defined below. The
Company's Bylaws provide a formula for calculating the above dates, which is
(i) not less than 75 days nor more than 150 days prior to the anniversary date
of the immediately preceding annual meeting or special meeting in lieu thereof
(the "Anniversary Date") or, (ii) if the Annual Meeting is called for a date
more than seven calendar days prior to the Anniversary Date, not later than the
close of business on (1) the 20th calendar day (or if that day is not a
business day for the Company, the next succeeding business day) following the
earlier of (x) the date on which notice of the date of such meeting was mailed
to stockholders, or (y) the date on which the date of such meeting was publicly
disclosed, or (2) if such date of notice or public disclosure occurs more than
75 calendar days prior to the scheduled date of such meeting, then the later of
(x) the 20th calendar day (or if that day is not a business day for the
Company, the next succeeding business day) following the date of the first to
occur of such notice or public disclosure or (y) the 75th calendar day prior to
such scheduled date of such meeting (or if that day is not a business day for
the Company, the next succeeding business day). Proxies solicited by the Board
of Directors will confer discretionary voting authority with
15
<PAGE>
respect to these proposals, subject to rules of the Securities and Exchange
Commission governing the exercise of this authority.
The Directors know of no other business to be presented at the Annual
Meeting. If other matters properly come before the meeting, the persons named
as proxies will vote on such matters in accordance with their best judgment.
You are urged to complete, date, sign and return your proxy promptly to make
certain your Shares will be voted at the Annual Meeting, even if you plan to
attend the meeting in person. For your convenience in returning the proxy card,
a preaddressed and postage paid envelope has been enclosed.
YOUR PROXY IS IMPORTANT
WHETHER YOU OWN FEW OR MANY SHARES.
Please date, sign and mail the enclosed proxy card today.
16
<PAGE>
1355-PS-00
<PAGE>
DETACH HERE
PROXY
BRADLEY REAL ESTATE, INC.
PROXY FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS ON MAY 11, 2000
The undersigned, revoking any proxy heretofore given, hereby appoints THOMAS
P. D'ARCY and JOSEPH E. HAKIM, and each of them (with full power to act alone),
proxies with power of substitution to act and vote on behalf of the undersigned,
as designated on the reverse side, all shares of Common Stock and 8.4% Series A
Convertible Preferred Stock of BRADLEY REAL ESTATE, INC. (the "Company") held of
record by the undersigned at the close of business on March 17, 2000, at the
2000 Annual Meeting of Stockholders of the Company to be held at 11:00 a.m.
local time on the 57th Floor of BANK ONE, 1 Bank One Plaza, Chicago, Illinois,
on May 11, 2000, or at any adjustment or postponement thereof. When properly
executed, this proxy will be voted in the manner directed herein by the
undersigned stockholder(s). The proxies are further authorized to vote, in their
discretion, upon such other business as may properly come before the meeting or
any adjournment or postponement thereof as well as on matters related to the
conduct of the meeting. The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting of Stockholders and Proxy Statement and the Company's
1999 Annual Report. This proxy may be revoked at any time before it is
exercised.
UNLESS OTHERWISE INSTRUCTED, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
<PAGE>
DETACH HERE
[X] Please mark
vote as in
example.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
The Board of Directors recommends a vote "FOR" each of the nominees set
forth below.
1. Proposal to elect two Directors to hold office until the 2003 Annual
Meeting of Stockholders and until their successors are elected and
qualified.
Nominees: (01)Stephen G. Kashet and (02)A. Robert Towbin
FOR [_] [_] WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[_] ___________________
For all nominees except as noted above
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
Sign exactly as name appears hereon, Joint owners
should each sign. (NOTE: When signing as Executor,
Administrator, Custodian, Attorney, Trustee,
Guardian, etc., please add full title.)
Signature:_____________ Date: ___________ Signature: _____________ Date:________
