SCHEDULE 14(a) 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 Pursuant to Rule 14a-11(c) or Rule 14a-12
CV REIT, 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)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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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
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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CV REIT, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of CV Reit, Inc.
The annual meeting of stockholders of CV Reit, Inc. will be held at The
Peninsula Hotel, 700 5th Avenue, at 55th Street, 3rd floor (La Grande Salle),
New York, New York, 10019 on June 7, 1999, at 9:30 a.m., for the following
purposes:
1. To elect two directors, comprising the class of directors to be
elected for a three-year term expiring in 2002;
2. To approve the appointment of BDO Seidman LLP as independent auditors
of the Company for 1999; and
3. To transact such other business as may properly be brought before the
meeting.
The Board of Directors has fixed the close of business on April 16, 1999 as the
record date for the determination of stockholders entitled to notice of and to
vote at the meeting.
By Order of the Board of Directors
By Orilla Floyd, Secretary
May 5, 1999
IT IS IMPORTANT THAT EACH STOCKHOLDER EXERCISE HIS RIGHT TO VOTE. Whether or not
you plan to attend the meeting, we urge that you execute and return your proxy
cards as soon as possible in the enclosed postage-paid envelope, in order that
your shares will be represented at the meeting. If you attend the meeting, you
may vote in person.
4
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CV REIT, INC.
100 Century Boulevard
West Palm Beach, Florida 33417
PROXY STATEMENT
This statement is furnished in connection with the solicitation of proxies on
behalf of the Board of Directors of CV Reit, Inc. (the "Company") to be voted at
the annual meeting of stockholders of the Company referred to in the foregoing
Notice. Shares represented by duly executed proxies received by the Company will
be voted in accordance with the instructions contained therein and, in the
absence of specific instructions, will be voted FOR the election of the two
directors who have been nominated by the Board of Directors, comprising the
class of directors to be elected for a three-year term expiring in 2002; FOR the
appointment of the Company's existing independent auditors; and in accordance
with the judgment of the person or persons voting the proxies on any other
matter that may properly be brought before the meeting. The execution of a proxy
will in no way affect a stockholder's right to attend the Annual Meeting and to
vote in person. Any proxy executed and returned by a stockholder may be revoked
at any time either by giving written notice to the Secretary of the Company at
the above address before it is voted or by attending the Annual Meeting and
revoking the proxy in person.
This Proxy Statement and the accompanying proxy are being sent on or about May
5, 1999 to stockholders entitled to vote at the Annual Meeting of Stockholders.
The entire cost of soliciting proxies will be borne by the Company and will be
made through the use of the mails. The Company will, upon request, reimburse
brokerage houses and persons holding shares in their names or in the names of
their nominees for their reasonable expenses in sending soliciting material to
their principals.
The Company has outstanding 7,966,621 shares of Common Stock, $.01 par value
("Common Stock"), which are entitled to vote at the meeting, each share being
entitled to one vote. Only stockholders of record at the close of business on
April 16, 1999 will be entitled to vote at the meeting. There was no other class
of voting securities outstanding at that date.
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PROPOSAL 1
ELECTION OF DIRECTORS
Two directors are to be elected at the meeting. For purposes of this meeting,
the Board of Directors has fixed the number of directors at seven, divided into
three classes. Each class is elected for a three-year term at successive Annual
Meetings of the Stockholders. In all cases, directors hold office until their
successors have been elected and qualified, or until their earlier resignation,
death or removal.
NOMINEES AND INCUMBENT DIRECTORS
Set forth below are the names of the persons nominated as directors and
directors whose terms do not expire this year, their ages, their offices in the
Company, if any, their principal occupations or employment for the past five
years, the length of their tenure as directors and the names of other public
companies in which such persons hold directorships. Information regarding their
beneficial ownership of the Company's Common Stock and equity securities of the
Company's subsidiaries is reported under the caption "Security Ownership of
Management". All of the nominees are currently directors of the Company.
NOMINEES FOR DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 2002
Milton S. Schneider
Mr. Schneider, 49, became a director of the Company in December 1997. Mr.
Schneider is Chief Executive Officer of The Glenville Group, Inc.,
headquartered in Plymouth Meeting, Pennsylvania, involved in the
development, ownership and management of commercial and residential
properties. Mr. Schneider is Chairman of Togar Property Company, an
apartment development company located in Malvern, Pennsylvania. In
addition, Mr. Schneider is Vice Chairman of Parkland Management Company, a
financial services company, and Vice Chairman of Horvitz Newspapers, Inc.
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Alan L. Shulman
Mr. Shulman, 66, has been a director of the Company since 1985 and served
as Chairman of the Board from August 1992 until May 1996. Mr. Shulman is a
private investor and was previously a general partner of Unitel Associates,
Ltd., a Florida limited partnership engaged in the ownership and operation
of Holiday Inn motel properties, for more than twenty years until its
dissolution in 1987. Mr. Shulman also serves as a director of Engle Homes,
a NASDAQ listed real estate development company, and was a director of
Island National Bank from its inception in 1989 until April 1997. A company
controlled by Mr. Shulman leased, operated and managed a Days Inn Motel in
West Palm Beach, Florida, which was owned by the Company until sold in May
1998 (see "Transactions With Others").
INCUMBENT DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 2001
Stanley Brenner
Mr. Brenner, 73, has been a director of the Company since 1988. Mr. Brenner
was a partner of Laventhol & Horvath, certified public accountants, for
more than five years until his retirement in 1990. From April 1991 until
May 1996, Mr. Brenner served as a consultant to the Company. Mr. Brenner
was Interim President of the Company from August 1996 to December 1997.
Stanley S. Cohen
Mr. Cohen, 59, became a director of the Company in December 1997. Mr. Cohen
is a partner and a member of the Executive Committee of the law firm of
Fox, Rothschild, O'Brien & Frankel, LLP in Philadelphia, Pennsylvania. Mr.
Cohen previously served for 11 years as Co-Chairman of that firm's Real
Estate Department. Mr. Cohen presently serves as an appointee of the
Majority Leader of the Pennsylvania State House of Representatives to the
Pennsylvania Economic Development Financing Authority, which grants loans
to encourage economic development within Pennsylvania, and served as an
appointee of the Governor of Pennsylvania to the Pennsylvania Commission
for Women. Fox, Rothschild, O'Brien & Frankel, LLP provides legal services
to the Company (see "Transactions With Others").
Allyn L. Levy
Mr. Levy, 71, has been a director of the Company since 1993. Mr. Levy
served as Chairman and Chief Executive Officer of Patriot Bancorporation of
Boston, Massachusetts, and its predecessor, Harbor National Bank of Boston,
from 1975 until 1986. Since 1986, Mr. Levy has been a private investor. He
is also a director of B.J. Wholesale Club, a New York Stock Exchange listed
company. Mr. Levy is not related to H. Irwin Levy.
7
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INCUMBENT DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 2000
H. Irwin Levy, Chairman
Mr. Levy, 72, became a director and Chairman of the Board of the Company in
December 1997. Mr. Levy is Chairman of the Board, Chief Executive Officer
and a majority stockholder of Hilcoast Development Corp. (see "Transactions
With Others"). Since 1995, he has also served as a director of nStor
Technologies, Inc., an American Stock Exchange listed company. Mr. Levy was
Chairman of the Board and Chief Executive Officer of the Company from 1985
to July 1992. He is currently of counsel to the West Palm Beach law firm of
Levy Kneen Mariani Curtin Kornfeld and del Russo, which provides legal
services to the Company.
Louis P. Meshon, Sr.
Mr. Meshon, 58, became a director, Chief Executive Officer and President of
the Company in December 1997. Mr. Meshon served as President of Drexel
Realty, Inc. ("Drexel"), a real estate management and leasing company he
co-founded in 1974, until December 1997, at which time the Company acquired
a 95% economic interest in Drexel. Mr. Meshon is a member of the Wharton
School's Real Estate Advisory Board.
VOTING PROCEDURES
Under Delaware law and the Company's certificate of incorporation and by-laws,
if a quorum is present, directors are elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting and entitled to
vote on the election of directors. A majority of the outstanding shares entitled
to vote, present in person or represented by proxy, constitutes a quorum. Shares
represented by proxies or ballots withholding votes from one or more directors
and any "broker non-votes", if the broker's proxy is voted for at least one
proposal, will be counted only for purposes of determining a quorum. "Broker
non-votes" are instances where a broker holding shares of record for a
beneficial owner is precluded by rules of a stock exchange or the National
Association of Securities Dealers, Inc. from voting on a matter. Otherwise,
abstentions and "broker non-votes" will not be counted for or against matters
presented for stockholder consideration. The General Corporation law of the
State of Delaware and the certificate of incorporation of the Company do not
provide for cumulative voting in the election of directors.
The Board of Directors recommends that the stockholders vote their shares FOR
the election of the two directors.
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COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The Board of Directors of the Company met 8 times during the year ended December
31, 1998. Each director attended all of the meetings.
The Audit Committee, consisting of Messrs. Shulman and Brenner, met once during
the past year. The Audit Committee is responsible for overseeing the financial
reporting process and the effectiveness of internal controls of the Company and
for recommendations to the full Board of Directors, including the designation of
independent auditors on an annual basis.
The Acquisition Committee consists of Messrs. Meshon and H. Irwin Levy. If
requested by the Board, the Acquisition Committee reviews for recommendation to
the Board, or rejection, proposed acquisitions of real property. During 1998,
the Acquisition Committee did not meet since this function was performed by the
full Board of Directors.
The Investment Committee, consisting of Messrs. Brenner, Allyn Levy and Shulman,
did not meet during the past year. The Investment Committee's functions include
the approval of all investments of the Company not otherwise approved by the
full Board of Directors.
The Board's functions include quarterly reviews of all of the Company's major
assets. This responsibility was previously performed by the Asset Review
Committee.
The Board of Directors has no standing nomination or compensation committees or
other committees performing similar functions.
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EXECUTIVE OFFICERS
The following are the executive officers of the Company (and the Company's
wholly-owned subsidiary, Montgomery CV Realty Trust - the "Trust", where
indicated), their respective ages, the year in which each was first elected an
officer and the office of the Company held by each. Each executive officer will
hold office until the next annual meeting of the Board of Directors or until
their respective successors have been duly elected and qualified:
Officer
Officer's Name Age Office Since
- -------------- --- ------ -------
H. Irwin Levy 72 Chairman of the Board 1997
Louis P. Meshon, Sr. 58 President and Chief Executive 1997
Officer
Elaine Hauff 36 Vice President and Treasurer 1992
Etta Strehle 43 Chief Financial Officer
of the Trust 1999
Orilla Floyd 63 Secretary 1996
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
EXECUTIVE COMPENSATION
The following table sets forth, for the years ended December 31, 1998, 1997 and
1996, the compensation awarded to, earned by, or paid to those persons who were,
during 1998 (i) the Chief Executive Officer of the Company and (ii) the other
executive officers of the Company and the Trust whose compensation is required
to be disclosed pursuant to the rules of the Securities and Exchange Commission
(the "Named Officers"). The only compensation paid by the Company to its
executive officers was base salary and annual bonuses.
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------------------
Name and Principal Position Year Salary($) Bonus($)
- --------------------------- ---- --------- -----------
Louis P. Meshon, Sr. President 1998 $279,744 $17,829(3)
and Chief Executive
Officer (1)
Paul Zambrotta, Chief 1998 $151,500 $75,000(4)
Financial Officer of
the Trust (2)
----------
(1) Mr. Meshon was elected President and Chief Executive Officer effective
December 31, 1997.
(2) Mr. Zambrotta served as Chief Financial Officer of the Trust until January
29, 1999, at which time he resigned. Etta Strehle was appointed to that
position on February 1, 1999.
(3) Performance Bonus for 1998 pursuant to Mr. Meshon's Employment Agreement,
was paid in April 1999 (see "Compensation of Executive Officers and
Directors - Executive Compensation")
(4) Includes $37,500, which was paid in January 1999.
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OPTION/STOCK APPRECIATION RIGHTS (SAR) GRANTED DURING 1998
There were no options to purchase the Company's Common Stock or SAR's granted
during 1998 to the Named Officers.
AGGREGATED YEAR END OPTION VALUES
The following table sets forth information regarding unexercised stock options
held by the Named Officers as of December 31, 1998. No stock options were
exercised by the Named Officers during 1998. No SAR's have been granted or are
outstanding.
Number of Value of
Unexercised Unexercised
Options at In-the-Money
Dec. 31, 1998 Options at
(#) (1) Dec.31, 1998($)
Shares ---------------- ----------------
Acquired on Value Exercis- Unexer- Exercis- Unexer-
Name Exercise(#) Realized($) able cisable sable cisable
---- ----------- ----------- ---- ------- ----- -------
Louis P.
Meshon, Sr. -0- -0- 30,000 120,000 -0- -0-
- --------
(1) These options were granted on December 31, 1997 and are exercisable in
equal annual installments of 30,000 shares, commencing on December 31,
1998. Unexercisable options are subject to forfeiture under certain
circumstances.
BOARD COMPENSATION REPORT
Since the Board does not have a Compensation Committee, the entire Board has
provided the following Compensation Report:
Executive Compensation Policy - The Board's overall compensation philosophy is
to attract and retain quality talent, which is critical to both the short-term
and long-term success of the Company, and to create a mutuality of interest
between executive officers and stockholders through compensation structures that
share the rewards and risks of strategic decision making.
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The Board examines market compensation levels and trends observed in the labor
market. Market information is used as a frame of reference for annual salary
adjustments and starting salary offers. Executive salary decisions are generally
determined in an annual review of each individual's performance, decision-making
responsibilities, experience and team-building skills. In certain instances,
these reviews include recommendations by the Company's financial consultants.
Mr. Meshon's compensation arrangement has been established under an Employment
Agreement, dated December 31, 1997 (the "Employment Agreement" - see below).
Base Compensation - The Board's approach to base compensation is to offer
competitive salaries in accordance with market practices prevalent in the
Company's geographical areas. In addition, effective in 1999, the Company is
sponsoring a 401(k) - retirement plan which covers substantially all employees
meeting certain minimum age and service requirements. The plan provides for
employer contributions equal to 50% of the first 3% of employee contributions.
Mr. Meshon's Employment Agreement provides for a base salary of $285,000,
subject to increases, at the sole discretion of a Committee of the Trust (the
"Committee"), in the event that there is a substantial increase in the scope of
his responsibilities, and annually commencing in December 2000. Pursuant to the
Employment Agreement, in the event the Company does not pay a quarterly dividend
to stockholders of at least $.29 per common share, under certain circumstances,
Mr. Meshon's base salary may be reduced by 50% and remain at such reduced level
until the Company has paid quarterly dividends of at least $.29 per common share
for four consecutive quarters. In that event, no Performance Bonus (see below)
shall be paid doing the period for which such decrease has been in effect.
Bonus Compensation - Under the Employment Agreement, Mr. Meshon is entitled to
an annual performance bonus (the "Performance Bonus") equal to 5% of the
Improvement Percentage, as defined, times the OP's Funds From Operations, as
determined by the Company's independent auditors. In addition, Mr. Meshon is
entitled to receive a bonus, based upon a formula set forth in the Employment
Agreement, in the event fees are paid by third parties to Drexel in connection
with the termination, on or before December 31, 2000, of certain existing
management and leasing agreements between those third parties and Drexel. No
bonuses have been paid to Mr. Meshon other than the 1998 Performance Bonus of
$17,829, which was paid in April 1999.
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The Board generally rewards its other executive officers with annual bonuses
based on performance on specific projects or transactions, taking into account
the overall performance of the Company. Input from the Company's financial
consultants and the Chief Executive Officer is considered when establishing
bonuses for other executive officers. A balance is made between overall
corporate performance and performance of the specific areas of the Company under
a participant's direct control. This balance supports the accomplishment of
overall objectives and rewards individual contributions and tasks assigned to
Company executives.
Equity-Based Compensation - Stock options provide additional incentives to key
employees to maximize shareholder value. Options generally vest over specified
periods to encourage continued employment. In accordance with this philosophy,
on December 31, 1997, the Company adopted the Montgomery CV Trust Executive
Stock Option Plan which provides for the issuance to certain executives of
options to purchase a maximum of 150,000 shares of Common Stock, all of which
were granted to Mr. Meshon on December 31, 1997. Mr. Meshon's options are
exercisable in equal annual installments of 30,000 shares, commencing on
December 31, 1998. Unexercisable options are subject to forfeiture under certain
circumstances.
Employment Agreement - As discussed above, effective December 31, 1997, the
Company entered into an Employment Agreement with Mr. Meshon pursuant to which
Mr. Meshon serves as President and Chief Executive Officer of the Company and
President and Chief Operating Officer of the Trust for five years, with an
automatic extension provision except under certain circumstances. In addition to
the compensation provisions discussed above, if, during the term of the
Employment Agreement, Mr. Meshon's employment is terminated for Cause, as
defined, or Mr. Meshon resigns without Good Reason, as defined, all or a portion
of 227,577 Units owned by Mr. Meshon in Montgomery CV Realty, L.P., an operating
partnership (the "OP") in which the Trust owns 84.1%, as of April 15, 1999, and
is its sole general partner, shall be deemed to be transferred to the Trust. The
number of OP Units subject to transfer is reduced on a pro rata basis over five
years. Mr. Meshon acquired those OP Units in exchange for his shares of Drexel
on December 31, 1997.
In the event of Mr. Meshon's death or disability, the Trust shall be required to
make severance payments for one year equal to Mr. Meshon's base salary, plus
certain fringe benefits in the event of disability.
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In the event Mr. Meshon terminates his employment for Good Reason, as defined,
or after the occurrence of a Significant Event, as defined (which includes a
change in control of the Company and a transfer of substantially all of the
Company's assets and business), the Trust is required to pay severance benefits
equal to the greater of the aggregate sum of all compensation (including bonuses
based on historical averages) due to Mr. Meshon during the remaining term of the
Employment Agreement, or 199% of Mr. Meshon's annual salary for the year prior
to termination. In addition, Mr. Meshon would be entitled to receive certain
fringe benefits for up to three years.
Respectfully submitted,
H. Irwin Levy, Chairman
Stanley Brenner
Stanley S. Cohen
Allyn L. Levy
Louis P. Meshon, Sr.
Milton S. Schneider
Alan L. Shulman
BOARD COMPENSATION
Except for Messrs. Meshon and H. Irwin Levy, directors of the Company receive
monthly compensation of $1,000, are paid $1,000 for attending each Board of
Directors meeting and $500 for attending each committee meeting. Pursuant to the
CV Reit, Inc. Non-Employee Director 1998 Stock Option Plan, non-employee
directors, excluding Mr. H. Irwin Levy, receive annual grants of options to
purchase 5,000 shares of Common Stock and the Board has the authority to grant,
in its sole discretion, a stock option to purchase up to 20,000 shares of Common
Stock on the date any individual first commences service as a non-employee
director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has no Compensation Committee. The Chief Executive Officer's salary
is based upon the Employment Agreement, discussed herein. Other executive salary
decisions are determined in an annual review based upon recommendations of the
Chief Executive Officer and/or the Company's financial consultants and approved
by the Chairman of the Board.
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STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return (assuming
reinvestment of dividends) to CV Reit, Inc.'s stockholders during the five year
period ended December 31, 1998, as well as an overall stock market index (S&P
500 Index) and CV Reit's peer group index (REIT Industry Index):
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
CV Reit, Inc. 100.00 108.67 152.60 205.36 223.66 224.00
S&P 500 Index 100.00 101.31 139.23 171.19 228.32 293.57
REIT Industry
Index 100.00 100.81 119.26 161.90 192.44 156.22
Total returns assume $100 invested on December 31, 1993 in the Company's Common
Stock, the S&P 500 Index and the REIT Industry Index with reinvestment of
dividends.
TRANSACTIONS WITH OTHERS
H. Irwin Levy/Hilcoast
During December 1981 and January 1982, the Company sold each of its recreation
facilities at the Century Villages in West Palm Beach, Deerfield Beach and Boca
Raton in separate transactions to different purchasers, including Mr. Levy, for
sales prices based upon independent appraisals. The Company sold the recreation
facilities at Boca Raton to Mr. Levy for $18 million, subject to a lease to a
corporation currently owned by Mr. Levy. (The annual net rental to Mr. Levy on
that lease is $2,162,000.) At closing, Mr. Levy issued a 30-year non-recourse
promissory note to the Company in the principal amount of $12,535,000 which
bears interest at 13.25% per annum. At December 31, 1998, the outstanding
balance on this note was $10.7 million. During 1998, the Company recognized $1.4
million in interest income on this note.
Since 1990, companies owned by Mr. Levy and/or certain members of his family
have leased, managed and operated the recreation facilities at the Century
Villages in West Palm Beach, Deerfield Beach and Boca Raton, which are
collateral for certain notes held by the Company with an outstanding balance of
$40.1 million (including the $10.7 million discussed above) at December 31,
1998. During 1998, the Company leased approximately 2,500 square feet of office
space to those companies on a month-to-month basis for $2,100 per month, plus an
allocation of utility expenses.
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Mr. Levy is Chairman of the Board, Chief Executive Officer and a majority
stockholder of Hilcoast Development Corp. ("Hilcoast") which as of December 31,
1998, owed $24.9 million to the Company, consisting of an 11% mortgage note (the
"Hilcoast Note") collateralized by first mortgages on the recreation facilities
at the Century Village at Pembroke Pines, Florida active adult condominium
project. The Hilcoast Note requires equal monthly payments of principal and
interest aggregating approximately $2.9 million per annum through 2023 and may
not be prepaid by Hilcoast without a prepayment penalty. During 1998, the
Company recognized $3.1 million in interest income from Hilcoast on the Hilcoast
Note and certain other mortgage notes, which were repaid in full during 1998.
Effective July 31, 1992, the Company and Hilcoast entered into a consulting and
advisory agreement under which Hilcoast provides certain investment advisory,
consulting and administrative services to the Company, excluding matters related
to Hilcoast's loans from the Company. The agreement provides for the payment of
$10,000 per month to Hilcoast, plus reimbursement for reasonable out-of-pocket
expenses. The agreement may be terminated by Hilcoast upon 180 days notice and
by the Company upon 30 days notice. During 1998, the Company paid $110,000 under
this agreement, plus expense reimbursement.
On December 31, 1997, the OP acquired nine shopping centers and an office
building for a purchase price of approximately $61.7 million. Two of the
shopping centers were acquired from Mr. Levy and members of his family in
exchange for 390,717 OP Units, as adjusted (valued at approximately $4.6
million), including 78,149 OP Units (valued at approximately $900,000) issued to
Mr. Levy. The economic basis used to determine the acquisition price was the
same as that used for the other properties acquired by the OP on that date.
Stanley S. Cohen
Mr. Cohen is a partner and a member of the Executive Committee of the law firm
of Fox, Rothschild, O'Brien & Frankel, LLP. During 1998, the Company paid
$380,093 to that firm for legal services.
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Alan L. Shulman
On November 7, 1988, the Company entered into a lease with Century Inn Operating
Corp., a company controlled by Mr. Shulman, for the operation and management of
its Days Inn motel in West Palm Beach, Florida. The lease, as amended, provided
for annual rent through the expiration of the lease term, on August 31, 1999,
equal to a minimum of $330,000, plus 30% of gross room revenues in excess of
$1.3 million. On May 15, 1998, the Company sold the motel for net cash proceeds
of $4.2 million and recognized a gain of $2.3 million. In connection with the
sale, Mr. Shulman received a $250,000 early termination fee from the buyer.
During 1998, the Company recognized rent income of $223,000 under the lease.
PRINCIPAL STOCKHOLDERS
As of April 1, 1999, the following persons were known by the Company to own
beneficially (as defined under applicable rules of the Securities and Exchange
Commission) more than 5% of its outstanding Common Stock:
Amount and
Nature of
Title Beneficial Percent
Name and Address of Class Ownership(1) of Class
- ---------------- ------------ ------------ --------
H. Irwin Levy......... Common Stock 742,697(2) 9.3%
100 Century Boulevard
West Palm Beach, FL 33417
Alan J. Evans and Robert
J. Cartagena, Trustees.. Common Stock 655,759(3) 8.2%
100 Century Boulevard
West Palm Beach, FL 33417
- ----------
(1) Unless otherwise indicated, each stockholder listed has the sole power to
vote and direct disposition of the shares of the Company shown as
beneficially owned by such stockholder.
2) Includes 97,292 shares owned by a corporation controlled by Mr. Levy.
Excludes 175,000 shares owned by Mr. Levy's wife. Mr. Levy disclaims
beneficial ownership of the excluded shares.
(3) Shares owned by a family trust established by Mr. Evans's wife, of which
Messrs. Evans and Cartagena are Trustees.
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SECURITY OWNERSHIP OF MANAGEMENT
As of April 1, 1999, all directors, and all directors and executive officers of
the Company as a group, beneficially owned (as defined under the applicable
rules of the Securities and Exchange Commission) shares of the Company, and OP
Units of limited partnership interests in the Company's approximately 84.1%
owned subsidiary, Montgomery CV Realty, L.P., as follows:
Percent
Amount and of Class
Nature of --------------
Title Beneficial Common OP
Name and Address of Class Ownership(1) Stock Units
- ---------------- ------------ ------------ ------ -------
H. Irwin Levy ............ Common Stock 742,697(2) 9.3%
100 Century Boulevard OP Units 78,149(7) (5)
West Palm Beach, FL 33417
Allyn L. Levy............. Common Stock 30,000(3) (5)
100 Century Boulevard OP Units -0- -0-
West Palm Beach, FL 33417
Alan L. Shulman........... Common Stock 20,680 (5)
100 Century Boulevard OP Units -0- -0-
West Palm Beach, FL 33417
Stanley Brenner........... Common Stock 12,500 (5)
100 Century Boulevard OP Units -0- -0-
West Palm Beach, FL 33417
Stanley S. Cohen ......... Common Stock 11,290(4) (5)
2000 Market Street OP Units -0- -0-
Philadelphia, PA 19103
Louis P. Meshon, Sr. ..... Common Stock 30,790 (5)
580 W. Germantown Pike, OP Units 674,249(6)(7)(8) 7.1%
Suite 200
Plymouth Meeting, PA 19462
Milton S. Schneider ...... Common Stock 10,000 (5)
580 W. Germantown Pike, OP Units 20,957(7)(9) (5)
Suite 202
Plymouth Meeting, PA 19462
All Directors, Nominees... Common Stock 867,957 10.8%
and Executive Officers OP Units 773,355(6)(7) 8.2%
as a Group (10 persons)
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(1) Unless otherwise indicated, each stockholder listed has the sole power to
vote and direct disposition of the shares of the Company shown as beneficially
owned by such stockholder. For purposes of this table, a person or group of
persons is deemed to have "beneficial ownership" of the following shares which
such person or group has the right to acquire pursuant to options exercisable
within 60 days: Allyn L. Levy - 10,000 shares; Alan L. Shulman - 10,000 shares;
Stanley Brenner -10,000 shares; Stanley S. Cohen - 10,000 shares; Milton S.
Schneider - 10,000 shares; Louis P. Meshon, Sr. - 30,000 shares; all directors
and executive officers as a group - 90,000 shares.
(2) Includes 97,292 shares owned by a corporation controlled by Mr. Levy.
Excludes 175,000 shares owned by Mr. Levy's wife. Mr. Levy disclaims beneficial
ownership of the excluded shares.
(3) Held by a revocable trust, of which Mr. Levy is the trustee and income
beneficiary.
(4) Includes 1,000 shares jointly owned with Mr. Cohen's wife. Excludes 145
shares owned by Mr. Cohen's wife. Mr. Cohen disclaims beneficial ownership of
the excluded shares.
(5) Less than 1%.
(6) Subject to adjustment under certain circumstances.
(7) The Trust (a wholly-owned subsidiary of CV Reit, Inc.) owns 7,966,621 OP
Units (representing 84.1% of the OP). The holders of substantially all the
remaining 15.9%, or 1,505,424 OP Units, have the right to require the OP to
redeem their OP Units for cash at any time after December 31, 1998. However,
upon a holder giving notice of the exercise of this right, the Trust has the
right to acquire such holder's OP Units in exchange for cash or, if certain
conditions are satisfied, an equal number of shares of CV Reit's Common Stock.
(8) Includes 89,909 shares jointly owned with Mr. Meshon's wife and 4,573 owned
by companies controlled by Mr. Meshon.
(9) Excludes 34,013 OP Units owned by Mr. Schneider's wife. Mr. Schneider
disclaims beneficial ownership of the excluded shares.
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COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's directors and executive officers, and persons who
own more than ten percent of the Company's outstanding Common Stock, to file
with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock. Such persons are
required by SEC regulation to furnish the Company with copies of all such
reports they file, except that due to an administrative oversight, Etta Strehle
did not file Initial Statement of Beneficial Ownership of Securities on Form 3
on a timely basis with respect to being named Chief Financial Officer of the
Trust on February 1, 1999.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, the officers, directors and greater than ten percent
beneficial owners of the Company have complied with all applicable Section 16(a)
filing requirements.
PROPOSAL 2
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed BDO Seidman, LLP as
independent auditors for the Company for the year ending December 31, 1999,
subject to the approval of stockholders. BDO Seidman, LLP acted as independent
auditors for the Company for the year ended December 31, 1998. A representative
of BDO Seidman, LLP is expected to be present at the stockholders' meeting, will
have the opportunity to make a statement if he or she desires to do so, and will
be available to respond to appropriate questions.
The Board of Directors recommends that the stockholders vote their shares FOR
the appointment of BDO Seidman, LLP as the Company's independent auditors.
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GENERAL
The Board of Directors does not know of any matters other than the foregoing
proposals that will be presented for consideration at the meeting. However, if
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote thereon in accordance with their
judgment. In the event that any nominee is unable to serve as a director at the
date of the meeting, the enclosed form of proxy will be voted for any nominee
who shall be designated by the Board of Directors to fill such vacancy.
STOCKHOLDERS' PROPOSALS
Pursuant to Rule 14a-8 promulgated by the SEC, proposals of stockholders to be
presented at the annual meeting to be held in 2000 must be received for
inclusion in the Company's proxy statement no later than January 7, 2000.
Dated: West Palm Beach, Florida
May 7, 1999
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C A R D
PROXY
CV REIT, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints LOUIS P. MESHON, SR. AND H. IRWIN LEVY, and each
of them, the attorneys and proxies of the undersigned, with power of
substitution, to vote on behalf of the undersigned all the shares of stock of CV
REIT, INC. which the undersigned is entitled to vote at the Annual meeting of
Stockholders of CV REIT, INC. to be held at The Peninsula Hotel, 500 Fifth
Avenue (at 55th Street), New York, New York, on June 7, 1999 at 9:30 a.m. and at
all adjournments thereof, hereby revoking any proxy heretofore given with
respect to such stock, and the undersigned authorizes and instructs said proxies
to vote as follows:
1. Election of directors
FOR the election of the nominees listed below (three year term).
WITHHOLD AUTHORITY to vote for all the nominees listed below.
Nominees: (three year term)
Milton S. Schneider, Alan L. Shulman
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name on the list above.)
2. Approve the appointment of BDO Seidman, LLP as independent auditors for the
Company for fiscal 1999.
FOR AGAINST ABSTAIN
3. In their discretion, upon such other business as may be properly brought
before the meeting.
If this Proxy is properly executed and returned, the shares represented
hereby will be voted. If not otherwise specified, this Proxy will be voted FOR
the persons nominated as directors, and FOR proposal number 2.
PLEASE DATE AND SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR AT LEFT.
Dated: ________________________, 1999
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(Signature of Stockholders)
