<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
IRT PROPERTY COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
IRT PROPERTY COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).
By wire transfer.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
(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:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
IRT PROPERTY COMPANY
200 GALLERIA PARKWAY, SUITE 1400
ATLANTA, GEORGIA 30339
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 12, 1994
To the Shareholders of IRT Property Company:
The Annual Meeting of Shareholders (the "Annual Meeting") of IRT Property
Company, a Georgia corporation (the "Company"), will be held at the Cobb
Galleria Centre, Two Galleria Parkway, Suite 105, Atlanta, Georgia, on Thursday,
May 12, 1994, at 10:00 a.m. local time, for the following purposes:
1. To elect eight directors to serve until the annual meeting of
shareholders in 1995 or, in the case of each director, until his successor
is duly elected and qualified;
2. To transact such other business as may properly come before the
Annual Meeting and any adjournments thereof.
Only shareholders of record at the close of business on March 24, 1994 are
entitled to notice of, and to vote at, the Annual Meeting and any adjournments
thereof.
The Company's Proxy Statement and the Annual Report for the fiscal year
ended December 31, 1993 are enclosed.
By Order of the Board of Directors
LEE A. HARRIS
Senior Vice President & Secretary
Atlanta, Georgia
March 31, 1994
YOU ARE URGED TO COMPLETE, SIGN, DATE, AND RETURN YOUR PROXY PROMPTLY IN THE
ENVELOPE PROVIDED SO THAT YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH YOUR
WISHES. RETURNING YOUR PROXY DOES NOT DEPRIVE YOU OF YOUR RIGHT TO ATTEND THE
MEETING AND TO VOTE YOUR SHARES IN PERSON.
<PAGE> 3
IRT PROPERTY COMPANY
200 GALLERIA PARKWAY, SUITE 1400
ATLANTA, GEORGIA 30339
---------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 12, 1994 AND ANY ADJOURNMENTS THEREOF
---------------------
APPROXIMATE DATE PROXY MATERIAL FIRST SENT TO SHAREHOLDERS:
MARCH 31, 1994
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors of IRT Property
Company (the "Company") for use at the Annual Meeting of Shareholders (the
"Annual Meeting") of the Company to be held on May 12, 1994 and any adjournments
thereof. The enclosed proxy is revocable at any time before its exercise at the
Annual Meeting by (i) written notice to the Secretary of the Company, (ii)
properly submitting to the Company a duly executed proxy bearing a later date,
or (iii) attending the Annual Meeting and voting in person.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with directions
given. Regarding the election of directors to serve until the annual meeting of
shareholders in 1995, in voting by proxy, shareholders may vote in favor of all
nominees or withhold their votes as to all nominees or withhold their votes as
to specific nominees. Shareholders should specify their choices on the enclosed
form of proxy. If a shareholder does not specify otherwise, the shares
represented by his or her proxy will be voted "FOR" the election of all
nominees.
The Company has only one class of capital stock, its Common Stock, $1 par
value, of which, as of March 4, 1994, 25,309,717 shares were outstanding. Each
outstanding share of Common Stock is entitled to one vote. Shareholders entitled
to vote or to execute proxies with respect to the Annual Meeting are
shareholders of record at the close of business March 24, 1994.
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SECURITY OWNERSHIP BY CERTAIN BENEFICIAL HOLDERS
The following table sets forth information as of the date indicated with
respect to the only person who is known by the Company to be the beneficial
owner of more than 5% of the outstanding shares of the Company's Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER DATE OWNERSHIP OF CLASS
------------------------------------------------ ------- ----------------- --------
<S> <C> <C> <C>
HB Korenvaes Investments, L.P. 2/8/94 1,351,288(1) 5.34%
777 Main Street
Suite 2750
Fort Worth, TX 76102
</TABLE>
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(1) This information is contained in a Schedule 13G dated February 8, 1994 filed
by HB Korenvaes Investments, L.P. with the Securities and Exchange
Commission, a copy of which was received by the Company. Such Schedule 13G
states that (i) at December 31, 1993, the reporting person owned
$15,202,000 face amount of the Company's 7.3% Convertible Subordinated
Debentures due August 15, 2003 which are convertible into 1,351,288 shares
of the Common Stock, $1 par value of the Company and (ii) the reporting
person has sole voting and dispositive power with respect to such 1,351,288
shares.
The beneficial ownership of directors and executive officers is set forth
under "ELECTION OF DIRECTORS" below.
ELECTION OF DIRECTORS
The Board of Directors is elected at each annual meeting of shareholders
for a one-year term. Eight incumbent directors have been nominated and have
agreed to serve as directors if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" DONALD W. MACLEOD; MARY M.
THOMAS; THOMAS H. MCAULEY; HOMER B. GIBBS, JR.; SAMUEL W. KENDRICK; BRUCE A.
MORRICE; JAMES H. NOBIL; AND LOUIS P. WOLFORT AS DIRECTORS TO HOLD OFFICE UNTIL
THE ANNUAL MEETING OF SHAREHOLDERS IN 1995 AND UNTIL THEIR SUCCESSORS ARE
ELECTED AND QUALIFIED. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A PLURALITY OF THE
SHARES OF COMMON STOCK CAST AT THE ANNUAL MEETING IS REQUIRED WITH RESPECT TO
THE ELECTION OF THE NOMINEES. ABSTENTIONS AND BROKER NON-VOTES WILL HAVE NO
EFFECT ON THE ELECTION OF DIRECTORS.
CERTAIN INFORMATION CONCERNING NOMINEES AND THE NAMED EXECUTIVE OFFICER
The following table sets forth the name and age of each nominee for
election to the Board of Directors of the Company and information as of March 4,
1994 regarding the beneficial ownership of the Company's Common Stock by each
director of the Company, by the Named Executive Officer (as hereinafter
defined),
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and by all directors and executive officers as a group. The amounts shown are
based upon information furnished by the individuals named.
<TABLE>
<CAPTION>
COMPANY SHARES OWNED PERCENTAGE OF
BENEFICIALLY AND OUTSTANDING
NAME CURRENT POSITION WITH NATURE OF BENEFICIAL SHARES OWNED
(DIRECTOR SINCE) AGE COMPANY OWNERSHIP(1) BENEFICIALLY(1)
- --------------------------------- --- ----------------------- -------------------- ---------------
<S> <C> <C> <C> <C>
NOMINEES
Donald W. MacLeod(2) 68 President and Chairman 225,680(6) (9)
(1969)
Mary M. Thomas 47 Director, Executive 50,703(7) (9)
(1994) Vice President, and
Treasurer
Thomas H. McAuley(2)(4) 48 Director and Chairman 16,500(7) (9)
(1987) of the Executive
Committee
Homer B. Gibbs, Jr.(3)(4) 62 Director 24,516(7)(8) (9)
(1976)
Samuel W. Kendrick(2)(4) 54 Director 2,930(7) (9)
(1993)
Bruce A. Morrice(2)(4) 60 Director 12,762(7)(8) (9)
(1986)
James H. Nobil(3)(4) 63 Director 36,675(7)(8) (9)
(1976)(5)
Louis P. Wolfort(3)(4) 77 Director 37,195(7)(8) (9)
(1970)
NAMED EXECUTIVE OFFICER
W. Benjamin Jones III 44 Senior Vice President 41,115(7) (9)
ALL DIRECTORS, NOMINEES, AND
EXECUTIVE OFFICERS
(15 PERSONS) AS A GROUP 549,142(10) 2.15%
</TABLE>
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(1) The amounts and percentages of the Company's Common Stock beneficially
owned are reported on the basis of regulations of the Securities and
Exchange Commission governing the determination of beneficial ownership of
securities. The beneficial owner has both voting and investment power over
the shares, unless otherwise indicated.
(2) Member of the Executive Committee.
(3) Member of the Audit Committee.
(4) Member of the Compensation Committee. The Compensation Committee also acts
as the Stock Option Committee.
(5) Date of initial service as a trustee of Summit Properties. Directorship in
the Company commenced on the June 20, 1979 effective date of the merger of
Summit Properties with and into the Company.
(6) This amount includes 53,000 shares which Mr. MacLeod has the right to
acquire pursuant to grants under the Company's Stock Option Plan. This
amount also includes 5,716 shares owned by Mr. MacLeod's wife. Mr. MacLeod
is deemed to be the beneficial owner of such shares under the regulations
of the Securities and Exchange Commission, but he disclaims such beneficial
ownership.
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<PAGE> 6
(7) The number of shares reflected as being owned includes 3,750 shares for Mr.
Nobil; 5,000 shares for Mr. Wolfort; 6,250 shares each for Messrs. McAuley,
Gibbs, and Morrice; 1,250 shares for Mr. Kendrick; 33,375 shares for Ms.
Thomas; and 33,915 shares for Mr. Jones which each has the right to acquire
pursuant to the Company's Stock Option Plan.
(8) The number of shares reflected as being beneficially owned by Mr. Morrice
includes 2,966 shares owned by a marital trust, over which he has no voting
or investment power; and with regard to Messrs. Gibbs, Nobil, and Wolfort
includes 2,500; 30,922; and 478 shares, respectively, owned by their wives.
Messrs. Morrice, Gibbs, Nobil, and Wolfort are deemed to be beneficial
owners of such shares under the regulations of the Securities and Exchange
Commission, but they disclaim such beneficial ownership.
(9) Less than 1%.
(10) This amount includes 204,365 shares which the Company's executive officers
have the right to acquire and 28,750 shares which the Company's
non-management directors have the right to acquire pursuant to the
Company's Stock Option Plan. Additionally, this amount includes 44,831
shares owned by spouses of the directors and executive officers. The
directors and executive officers are deemed to be the beneficial owners of
such shares under the regulations of the Securities and Exchange
Commission, but they disclaim beneficial ownership in such shares.
COMMITTEES OF THE BOARD OF DIRECTORS; MEETINGS AND COMPENSATION OF DIRECTORS
In accordance with the By-Laws of the Company, the Board of Directors has
established an Executive Committee, an Audit Committee, and a Compensation
Committee (which also serves as a Stock Option Committee). The members of these
Committees are indicated in the preceding section of this Proxy Statement.
The Executive Committee, during the interval between meetings of the Board
of Directors, may exercise the powers of the Board of Directors except with
respect to a limited number of matters which include (i) amending the Articles
of Incorporation or the By-Laws of the Company, (ii) adopting a plan of merger
or consolidation, (iii) the sale, lease, exchange, or other disposition of all
or substantially all the property and assets of the Company, and (iv) a
voluntary dissolution of the Company or a revocation thereof. The Executive
Committee may also serve as a Nominating Committee which serves the limited
purpose of nominating persons to serve as directors of the Company. The full
Board of Directors, however, currently acts as the Nominating Committee and as
such, nominated the eight persons named in the foregoing table. No
recommendations were submitted by shareholders with respect to the nomination of
directors, and the Nominating Committee has no policy with respect to whether or
not it would consider such recommendations by shareholders. The Executive
Committee met once in 1993.
The Audit Committee, composed entirely of outside directors, approves any
transactions involving related parties, recommends to the Board of Directors the
engagement of the independent auditors of the Company, and reviews with the
independent auditors the scope and results of the Company's audits, the
Company's internal accounting controls and the professional services furnished
by the independent auditors to the Company. The Audit Committee met once in
1993.
The Compensation Committee, composed entirely of outside directors,
determines the salary and other compensation to be paid to the executive
officers of the Company. It also acts as the Stock Option Committee and is
responsible for the administration of the Company's Stock Option Plan. The
Compensation Committee met once in 1993.
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<PAGE> 7
During the Company's fiscal year ended December 31, 1993, the Company's
Board of Directors held eight meetings. Except for Thomas H. McAuley and Bruce
A. Morrice, each of whom attended 70% of all meetings, all of the directors
attended 75% or more of the aggregate of all meetings of the Board of Directors
and the committees on which they served during 1993.
The Company's policy regarding the compensation of directors is to pay
directors who are not also employees of the Company a retainer fee of $5,000 per
annum; $1,000 plus expenses for each Board meeting attended; and $500 plus
expenses for each Executive Committee, Audit Committee or Compensation Committee
meeting attended. Directors' fees in 1993 aggregated $66,250.
Beginning in 1990, the Company entered into an arrangement with Mr.
McAuley, whereby Mr. McAuley provided real estate consulting services to the
Company. Pursuant to this arrangement, the Company paid Mr. McAuley $24,000 for
these services during 1993. By mutual agreement of Mr. McAuley and the Company,
this arrangement was terminated effective March 1, 1994.
There is no family relationship between any of the directors and/or
executive officers of the Company.
PRINCIPAL OCCUPATIONS OF NOMINEES FOR ELECTION DURING THE PAST FIVE YEARS
The principal occupations during the past five years of the nominees for
election as directors of the Company are as follows:
Mr. MacLeod has been President and Chairman of the Board of Directors of
the Company since its inception in 1979 and previously served as President and
Managing Trustee of the Company's predecessor, Investors Realty Trust. He is a
director of Abrams Industries, Inc., a real estate development and contracting
company, and a member of the American Institute of Real Estate Appraisers
("M.A.I.").
Ms. Thomas has been Executive Vice President of the Company since May 1991
and Treasurer of the Company or its predecessor, Investors Realty Trust, since
1976. She served as Senior Vice President from May 1987 to May 1991 and Vice
President from 1981 to 1987.
Mr. McAuley has served as Chairman of the Executive Committee of the
Company since 1990 and regional partner of Faison Associates, Inc. ("Faison"), a
real estate development and management company headquartered in Charlotte, North
Carolina, since May 1993. From June 1988 to May 1993, he served as Chairman and
Chief Executive Officer and part owner of Ewing Southeast Realty, Inc.
("Ewing"), an Atlanta, Georgia real estate company. Faison purchased Ewing on
May 1, 1993, the date Mr. McAuley became a Faison partner. From June 1986 to May
1988, he was Executive Vice President and Chief Operating Officer of Johnstown
American Companies ("Johnstown"), an Atlanta-based diversified real estate
company, a position he resigned voluntarily upon the acquisition of such company
by Southmark Corporation ("Southmark") in April 1988. In February 1989,
Johnstown was put into federal bankruptcy proceedings by Southmark. From 1984 to
March 1986, Mr. McAuley was President and a director of Ewing and Johnstown
Mortgage Company, an Atlanta mortgage banking company.
Mr. Gibbs is currently occupied in the management of private investments.
He retired as Vice Chairman of Mid-South Financial Corporation, a Nashville,
Tennessee mortgage banking firm, on January 1, 1994, a position he held since
1986. He was President of Gibbs and Company, a Nashville, Tennessee mortgage
banking firm, from 1965 through 1986.
Mr. Kendrick has been Executive Vice President of Harris Teeter, Inc.
("Harris Teeter"), a 140-store supermarket chain with principal executive
offices in Charlotte, North Carolina, since July 1992. He was
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<PAGE> 8
Senior Vice President/Finance and Administration for Harris Teeter from October
1989 to 1992, Vice President/Real Estate and Construction from February 1986 to
1989, and Vice President/Real Estate from February 1984 to 1986. Mr. Kendrick,
currently a director of Harris Teeter, has been with the Charlotte-based
supermarket company since March 1982.
Mr. Morrice is Managing Director of Morrice Financial Corp., a Dallas,
Texas real estate finance and investment firm. He was President of Lion Service
Corp., a Dallas, Texas service corporation of Federated Savings and Loan,
engaged in the origination and servicing of loans and real estate investment
mortgage banking, from 1983 to 1987. He was President of Morrice Financial Corp.
from 1977 until 1985.
Mr. Nobil is President of JLJ Realty, Inc., a Florida property management
firm. From 1987 through 1990, he was President of TMI Realty, Inc., a Florida
property management firm. He also served as President of another Florida
property management firm from December 1990 to March 1991. Mr. Nobil has been
the managing joint venture partner in Kokomo Mall Associates, an Indiana Joint
Venture, since August 1986. On April 5, 1991, Kokomo Mall Associates filed a
petition for relief under Chapter 11 of the United States Bankruptcy Code, 11
U.S.C. sections 101 et seq. On June 30, 1992, the Bankruptcy Court entered an
order dismissing the Chapter 11 proceeding filed by Kokomo Mall Associates based
upon its finding that all payments to creditors had been made. Mr. Nobil is the
President and 30% owner of Pearl Britain, Inc., a Florida corporation. Pearl
Britain, Inc. is a general partner of Pearl Britain Associates, Ltd., a Florida
limited partnership. On September 21, 1992, the Circuit Court for the Fifth
Judicial Circuit in and for Marion County, Florida, appointed a receiver for
Pearl Britain Plaza, a shopping center located in Ocala, Florida, which center
is owned by Pearl Britain Associates, Ltd. The receivership terminated when, on
March 11, 1993, Pittsburgh National Bank acquired this property, by foreclosure.
Mr. Nobil was a Trustee and Chairman of Summit Properties from 1976 until its
merger into the Company in June 1979.
Mr. Wolfort is retired and currently occupied as a private investor. From
1986 to January 1991, he was Chairman of the Board of Mortgage Co-op, Inc., a
New Orleans, Louisiana mortgage banking firm. From 1984 through 1986, he was a
director of and a consultant to First National Mortgage Corporation, a New
Orleans, Louisiana mortgage banking firm, and Meritor Mortgage Corporation, a
Philadelphia, Pennsylvania mortgage banking firm, both of which are subsidiaries
of Philadelphia Savings Fund Society of Philadelphia, Pennsylvania. He was
Chairman of the Board of First National Mortgage Corporation from 1960 to
January 1984.
EXECUTIVE OFFICERS
In addition to Donald W. MacLeod, President, and Mary M. Thomas, Executive
Vice President and Treasurer, the executive officers of the Company consist of
W. Benjamin Jones III, Senior Vice President; Robert E. Mitzel, Senior Vice
President; Lee A. Harris, Senior Vice President and Secretary; Donna I. Hubbard,
Vice President and Assistant Treasurer; Rosemary C. Beck, Vice President;
Nanette B. Cook, Vice President; and E. Denton Williams III, Vice President.
Mr. Jones has been Senior Vice President of the Company since May 1987. He
served as Secretary of the Company or its predecessor, Investors Realty Trust,
from 1977 to May 1992, and Vice President from 1981 to 1987. Mr. Mitzel, age 45,
has been Senior Vice President of the Company since May 1991 and Vice President
from January 1988 to May 1991. Mr. Harris, age 35, has been Senior Vice
President of the Company since August 1992 and Secretary of the Company since
May 1992. He served as Vice President from May 1989 to
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<PAGE> 9
August 1992 and Assistant Secretary from May 1987 to May 1992. He was Assistant
Vice President from 1988 to May 1989. Ms. Hubbard, age 29, has been Vice
President of the Company since August 1992 and Assistant Treasurer since May
1992. She was a consultant with Metropolitan Life Insurance Company from
September 1991 to March 1992. She was an auditor with Arthur Andersen & Co., the
Company's present accounting firm, from December 1987 to September 1991. Ms.
Beck, age 38, has been Vice President of the Company since August 1992. She
served as Assistant Vice President from May 1990 to August 1992 and has been
employed by the Company since July 1987. Ms. Cook, age 36, has been Vice
President of the Company since August 1992. She served as Controller of The
Sofran Company, an Atlanta, Georgia real estate company specializing in the
development and management of neighborhood and community shopping centers, from
1988 to 1992. Mr. Williams, age 61, was employed by the Company in February 1993
to oversee retail acquisitions and elected Vice President in May 1993. He served
as associate broker for O'Brian Realty, a Lexington Park, Maryland residential
and commercial real estate company, from 1991 to 1993. From 1987 to 1990 he
served as Vice President of Home Federal Savings Bank in Washington, D.C.
The executive officers are elected by and serve at the pleasure of the
Board of Directors.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
The Compensation Committee, composed entirely of outside directors,
determines the salary and other compensation to be paid to the executive
officers of the Company. The Compensation Committee typically reviews the salary
of each executive officer once each year at its November Board meeting. At that
meeting, the Compensation Committee acting as a Stock Option Committee also
usually determines the individuals to whom incentive stock options are to be
awarded and the number of shares for which options are to be granted.
The Company's executive compensation program has three primary objectives:
* Reward executives for long-term management focus and the enhancement
of shareholder value.
* Attract and retain key executives critical to the long-term success
of the Company.
* Support the achievement of desired Company performance.
In determining the compensation to be paid to the executive officers of the
Company, the Compensation Committee considers compensation paid to other
executives performing similar jobs within the industry. Some of the companies
considered by the Compensation Committee are included in the NAREIT All REIT
Index included in the Comparative Stock Performance section of this Proxy
Statement. In addition, the members of the Compensation Committee rely upon
their own knowledge of compensation paid to executives of companies of
comparable size and complexity. In these comparisons the Compensation Committee
strives to fix the compensation of the Company's executive officers in the
middle of the class of comparable companies. The members also consider the
performance of the Company and the merits of the individual under consideration.
The members will use their discretion to set executive compensation where in
their judgment external, internal or an individual's circumstances warrant it.
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EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's executive officer compensation program is comprised of base
salary, year-end additional cash compensation, long-term incentive compensation
in the form of stock options, and various benefits, including medical and life
insurance generally available to employees of the Company.
BASE SALARY
The Chairman and President recommends to the Compensation Committee the
base salary levels for the Company's executive officers (other than the Chairman
and President) based on his evaluation of individual experience and performance
and in his subjective discretion on the overall operating performance of the
Company. Base salary levels are then set in the discretion of the Compensation
Committee after consideration of the foregoing recommendations. The Compensation
Committee members also have access to salary levels of executive officers of
other companies within the industry which they may consult.
YEAR-END ADDITIONAL CASH COMPENSATION AND CERTAIN EMPLOYMENT AGREEMENTS
During 1980 the Board of Directors approved and adopted a pension program
for the employees of the Company. The program included a noncontributory pension
plan for all employees of the Company, under which the Company accrued and
funded pension costs each year equal to 12% of employees' annual base salaries,
and each employee became "vested" with respect to his or her accumulated pension
account at the rate of 20% per year, with full "vesting" upon completion of five
years of service with the Company. Effective June 30, 1990, the Board of
Directors elected to terminate the pension plan.
Upon termination of the pension plan, the Board of Directors determined
that it would be appropriate to substitute in lieu thereof a program of year-end
cash payments to the executive officers of the Company and certain other
corporate employees of the Company selected in the discretion of the Chairman
and President. This program was instituted in 1990. Under this program,
participants receive a year-end cash payment from the Company, the amount of
which is based upon each participant's length of service with the Company. Each
participant who has been employed by the Company for more than five years will
receive a year-end cash payment equal to 12% of his or her salary. Each
participant with less than five years will receive year-end cash payments in
graduated amounts designed to produce a cumulative 12% payment after completion
of five years of service. The Company paid or accrued approximately $154,000,
$99,000, and $100,000 under this program in 1993, 1992, and 1991, respectively.
The Company, in 1980, in conjunction with the adoption of the
noncontributory pension plan, agreed to provide deferred compensation to Mr.
MacLeod and Ms. Thomas upon their retirement in recognition of their time in
service with the Company, which had been significantly longer than that of the
remaining employees. Based upon the assumption that Ms. Thomas will continue in
the employ of the Company until retirement, it is expected that her agreement
with the Company will not add to any benefits otherwise payable to her under the
Company's Year-End Additional Cash Compensation Program as described above. In
the case of Mr. MacLeod, the Company has agreed to annually accrue deferred
compensation allocable to him for each of the 15 years beginning in 1980 in
amounts ranging from approximately $6,000 in 1980 to approximately $22,000 in
1994, assuming continued employment. Benefits payable to Mr. MacLeod under this
agreement (the "Employment Agreement") vary depending upon the reason and timing
of the termination of his employment. If his employment is terminated after Mr.
MacLeod has reached age 70, the Company has agreed to pay him deferred
compensation of approximately $29,000 per year. If Mr. MacLeod voluntarily
leaves the employ of the Company between ages 65 and 69 inclusive, his annual
compensation under this
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Employment Agreement would increase from approximately $13,000 at age 65 to
approximately $25,000 at age 69. Termination due to death or disability at any
time will entitle Mr. MacLeod or his beneficiary to the cumulative total accrual
in his deferred compensation account at the December 31st next preceding the
date of his death or disability.
The Company currently has no other postretirement or postemployment
benefits.
STOCK OPTION PROGRAM
Long-term incentives are provided through the Company's 1989 Stock Option
Plan (the "Plan"). The purpose of the Plan is to promote the long-term success
of the Company by providing financial incentives to the directors, officers, and
key employees of the Company who are in positions to make significant
contributions toward the success of the Company.
Options granted under the Plan may be either incentive stock options
(options that meet certain requirements of the Internal Revenue Code, thereby
receiving special tax treatment) or nonqualified stock options (options to
purchase company stock that do not meet the special requirements for incentive
stock options). Incentive stock options ("ISOs") may be granted only to persons
who are employees of the Company, including members of the Board of Directors
who are also employees of the Company. Nonqualified stock options may also be
granted to officers and employees of the Company.
The Plan is currently administered by the Compensation Committee. Subject
to the approval of the Board of Directors, the Compensation Committee has the
authority to determine the individuals to whom stock options are awarded, the
number of shares for which options are granted (the aggregate fair market value
of stock with respect to which ISOs are exercisable for the first time by any
individual during any calendar year shall not, however, exceed $100,000, and no
person shall be eligible to receive an ISO for shares in excess of such
limitation), and the determination of whether an option shall be an incentive
stock option or a nonqualified stock option. In addition, the Plan provides for
the automatic grant of nonqualified options to purchase 1,250 shares of the
Company's Common Stock to each non-employee director upon his or her election
and each annual re-election to the Board.
Options granted under the Plan are exercisable no later than ten years from
the date of grant with the exercise price being equal to 100% of the market
value on the date of grant. The 1989 Plan replaced the Key Employee Stock Option
Plan adopted in 1983, as amended by the Board of Directors on February 9, 1987
(the "1983 Plan"). No further options or Stock Appreciation Rights ("SARs") may
be granted under the 1983 Plan, although unexercised options previously granted
under the 1983 Plan remain in full force and effect. The 1989 Plan does not
provide for SARs.
In determining the grants of stock options to officers and key employees of
the Company, including the executive officers other than the Chairman and
President, the Compensation Committee reviewed with the Chairman and President
the recommended individual awards, based on the respective performance,
responsibilities, and contributions of each of the individuals under
consideration, and the operating performance of the Company. The Compensation
Committee also considered the expected performance requirements and
contributions, as well as the position level, of each of these individuals. The
Chairman and President and the Compensation Committee did not give consideration
to current holdings of the Common Stock or options to purchase the Common Stock
of the Company when making their decision regarding option awards.
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<PAGE> 12
COMPENSATION TO CHAIRMAN AND PRESIDENT
Mr. MacLeod has been President and Chairman of the Board of Directors of
the Company since its inception in 1979. He previously served as President and
Managing Trustee of Investors Realty Trust, the predecessor of the Company,
founded in 1969.
Mr. MacLeod's base salary for fiscal year 1993 was $250,000, an
approximately 4.17% increase over his $240,000 base salary for fiscal years 1992
and 1991. Under the Company's program of year-end cash payments, Mr. MacLeod
also received $30,000 in additional cash compensation for fiscal year 1993
compared to $28,800 for fiscal years 1992 and 1991. Although Mr. MacLeod
received no compensation during these years under his Employment Agreement, the
Company accrued $20,613, $18,824, and $17,191 during fiscal years 1993, 1992,
and 1991, respectively, for payments that will be made after his retirement. Mr.
MacLeod also was awarded, during fiscal years 1993, 1992, and 1991, incentive
stock options to purchase 8,000, 10,000, and 11,500 shares of the Company's
Common Stock, respectively.
The Compensation Committee considered Mr. MacLeod's dual role as both
Chairman and President and the salaries and benefits of other Chief Executive
Officers for similar companies within the industry in determining his cash
compensation. The award of stock options to the Chairman and President was made
separately and was based, among other things, on competitive practice within the
industry, the Committee's perception of his past and expected contributions to
the Company's long-term performance, and the $100,000 ISO limitation as
described above.
Section 162(m) of the Internal Revenue Code (the "Code") adopted as part of
the Revenue Reconciliation Act of 1993, generally limits to $1 million the
deduction that can be claimed by any publicly-held corporation for compensation
paid to any "covered employee" in any taxable year beginning after December 31,
1993. The term "covered employee" for this purpose is defined generally as the
Chairman and President and the four other highest paid employees of the Company.
Performance-based compensation is outside the scope of the $1 million limitation
and, hence, generally can be deducted by a publicly-held corporation without
regard to amount, provided that, among other requirements, such compensation is
approved by the shareholders. The Compensation Committee has not and does not
anticipate the need to develop a formal policy on this matter since the
compensation of the Company's executive officers is clearly outside the scope of
the limitations of Section 162(m).
COMPENSATION COMMITTEE
James H. Nobil, Chairman
Thomas H. McAuley
Homer B. Gibbs, Jr.
Bruce A. Morrice
Louis P. Wolfort
Samuel W. Kendrick
10
<PAGE> 13
SUMMARY COMPENSATION TABLE
The following table shows the compensation for the past three years of the
President and each of the Company's executive officers with salary and bonus of
over $100,000 for fiscal 1993 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------
------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) OPTIONS(#) COMPENSATION(3)
- ---------------------------- ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Donald W. MacLeod 1993 $250,000 $ -- $30,000 8,000 $20,613
Chairman of the Board and 1992 240,000 -- 28,800 10,000 18,824
President 1991 240,000 -- 28,800 11,500 17,191
Mary M. Thomas 1993 120,000 -- 14,400 6,000 --
Executive Vice President 1992 99,000 4,000 11,880 6,000 --
and Treasurer 1991 94,000 1,073 11,280 6,000 --
W. Benjamin Jones III 1993 100,000 -- 12,000 6,000 --
Senior Vice President 1992 91,500 4,000 10,980 6,000 --
1991 87,000 1,073 10,440 6,000 --
</TABLE>
- ---------------
(1) Prior to August 1992, the Company had a bonus plan under which certain
employees could share in the success of the Company in leasing vacant
space. The total amount paid under this plan each year was based on the
present value of 3% of the net rental stream over the initial terms of
leases generated by Company employees. Payments made to each of Ms. Thomas
and Mr. Jones in 1992 and 1991 represented 4.76% and 3.57%, respectively,
of the total bonuses paid under this plan. The Company restructured its
leasing and property management division in August 1992 and discontinued
this bonus plan.
(2) Year-End Additional Cash Compensation in lieu of pension.
(3) Amounts accrued by the Company during fiscal years 1993, 1992 and 1991 under
Mr. MacLeod's Employment Agreement for amounts payable to him after
retirement.
11
<PAGE> 14
STOCK OPTION PLAN
The following table sets forth (i) all individual grants of stock options
made by the Company during fiscal 1993 to each of the Named Executive Officers
(all of which are incentive stock options granted under the Plan and exercisable
immediately upon grant), (ii) the ratio that the number of options granted to
each individual bears to the total number of options granted to all employees of
the Company, (iii) the exercise price and expiration date of these options, and
(iv) estimated potential realizable values assuming the stock price appreciates
over a ten-year term at rates of 5% and 10% compounded annually.
OPTION GRANTS IN FISCAL 1993
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
--------------------------------------- ANNUAL RATES OF
% OF TOTAL STOCK
NUMBER OF OPTIONS PRICE APPRECIATION
SECURITIES GRANTED TO EXERCISE FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM
OPTIONS IN FISCAL PRICE EXPIRATION --------------------
NAME GRANTED (#) 1993 ($/SH) DATE 5% 10%
- ------------------------ ----------- ---------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Donald W. MacLeod 8,000 14.29% $12.00 1/3/03 $60,374 $152,999
Mary M. Thomas 6,000 10.71 12.00 1/3/03 45,280 114,749
W. Benjamin Jones III 6,000 10.71 12.00 1/3/03 45,280 114,749
</TABLE>
The following table sets forth (i) the number of shares received and the
aggregate dollar value realized in connection with each exercise of outstanding
stock options during fiscal 1993 by each of the Named Executive Officers, (ii)
the total number and value of all outstanding, unexercised options (all of which
are exercisable) held by the Named Executive Officers as of the end of fiscal
1993, and (iii) the aggregate dollar value of all such unexercised options that
are in-the-money; that is, when the fair market value of the common stock that
is subject to the option exceeds the exercise price of the option.
AGGREGATED OPTION EXERCISES IN FISCAL 1993
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF NUMBER OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT OPTIONS AT
NAME EXERCISE REALIZED 12/31/93 12/31/93(1)
- ----------------------------------- ----------- -------- ----------- ------------
<S> <C> <C> <C> <C>
Donald W. MacLeod -- -- 45,000 $ 15,000
Mary M. Thomas -- -- 27,375 27,750
W. Benjamin Jones III -- -- 27,915 14,652
</TABLE>
- ---------------
(1) Value based on market value of the Company's Common Stock at the date of
exercise or the end of fiscal 1993 minus the exercise price.
12
<PAGE> 15
COMPARATIVE STOCK PERFORMANCE
The line graph below compares the cumulative total shareholder return on
Common Stock of the Company for the last five fiscal years with the cumulative
total return on the NAREIT All REIT Total Return Index and the S&P 500 Index
over the same period. This comparison assumes that the value of the investment
in the Company Common Stock and each index was $100 on December 31, 1988 and
that all dividends were reinvested.
<TABLE>
<CAPTION>
NAREIT ALL
REIT Total
Measurement Period IRT Property Return S&P 500 In-
(Fiscal Year Covered) Company Index(1) dex
<S> <C> <C> <C>
12/31/88 100 100 100
12/31/89 91 98 131
12/31/90 62 81 127
12/31/91 84 110 166
12/31/92 117 124 179
12/31/93 110 146 197
</TABLE>
- ---------------
(1) The NAREIT All REIT Total Return Index is maintained by the National
Association of Real Estate Investment Trusts. It contained 186
tax-qualified REITs with a total market capitalization of $31.6 billion as
of December 31, 1993.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Board of Directors, excluding Mr. MacLeod and Ms. Thomas,
serves as its Compensation Committee. Norman Zavalkoff, who resigned as a
director on January 27, 1994, served on the Compensation Committee from May 13,
1993 to January 27, 1994.
On July 31, 1992, the Company acquired ten shopping centers (the "Sofran
Centers") from entities which were directly or indirectly owned or controlled by
Mr. Zavalkoff and nine other investors (the "Sellers"). At the time of the
purchase, a portion of the purchase price composed of 169,290 shares of the
Company's Common Stock was retained as "holdback shares" subject to the
satisfaction of various holdback requirements provided in a Real Property
Purchase Agreement dated June 23, 1992 (the "Purchase Agreement") between the
Company and the Sellers. The holdback shares were issuable at various dates over
30 months from the closing of the acquisition. The acquisition and the Purchase
Agreement are more fully described in the Company's Form 8-K report dated August
12, 1992, as amended by Form 8 reports dated August 18, 1992 and February 24,
1993.
13
<PAGE> 16
During 1993, the number of holdback shares available to the Sellers was
reduced by 40,506 shares and the Company issued 9,182 shares to Sofran Company
("Sofran"). The shares issued to Sofran were held by Sofran as nominee for the
Sellers which included Norpet, Inc. ("Norpet") of which Mr. Zavalkoff had an 85%
pecuniary interest. Sofran, as nominee, issued 3,673 shares to Norpet. As a
result of Mr. Zavalkoff's 85% pecuniary interest in Norpet, he received 3,122.05
of such shares. Also during 1993, the Company paid dividend equivalents of
$100,466 to the Sellers a portion of which was further credited to Norpet and,
as a result, Mr. Zavalkoff.
Ewing Southeast Realty, Inc., of which Mr. McAuley served as Chairman and
Chief Executive Officer and minority shareholder, received an $86,576 brokerage
commission from the seller of one of the investments acquired by the Company
during 1993.
EMPLOYMENT AGREEMENTS
Mr. MacLeod, Chairman and President of the Company, and Ms. Thomas,
Executive Vice President and Treasurer, each entered into Employment Agreements
with the Company in July 1980 (the "Employment Agreements"). The Employment
Agreements continue until terminated by either party on at least 90 days prior
written notice. The Employment Agreements established that the base salary for
Mr. MacLeod and Ms. Thomas would not be less than $90,000 or $35,000,
respectively, with the annual base salary determined in the discretion of the
Board of Directors. In addition, the Employment Agreements provided for deferred
compensation for each of Mr. MacLeod and Ms. Thomas which has been more fully
described under "--Compensation Committee Report on Executive Compensation" and
"--Summary Compensation Table."
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen & Co. has been appointed by the Board of Directors as the
independent public accountants for the Company for 1994. It has served as the
independent public accountants for the Company since 1979.
Representatives of the firm of Arthur Andersen & Co. will be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so
and will be available to answer questions concerning the financial affairs of
the Company.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
solicitations by mail, officers, directors, and regular employees of the Company
may solicit proxies personally or by telephone, telegraph or other means without
additional compensation. The Company will reimburse brokers, fiduciaries, and
custodians for their costs in forwarding proxy materials to beneficial owners of
Common Stock held in their names.
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 1995 annual
meeting of shareholders must be received at the Company's principal executive
offices on or before December 1, 1994 to be eligible for inclusion in the
Company's proxy statement and proxy relating to that meeting.
14
<PAGE> 17
OTHER MATTERS
The management of the Company does not know of any matters to be
represented at the meeting other than those mentioned in this Proxy Statement.
During fiscal 1993, Samuel W. Kendrick, a director, failed to timely file a
Form 4 on one transaction.
The management of the Company urges you to attend the Annual Meeting and to
vote your shares in person. Whether or not you plan to attend, please sign and
promptly return your proxy. Your proxy may be revoked at any time before it is
voted. Such proxy, if executed and returned, gives discretionary authority with
respect to any other matters that may come before the meeting.
IRT PROPERTY COMPANY
By: LEE A. HARRIS
Senior Vice President & Secretary
15
<PAGE> 18
IRT PROPERTY COMPANY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints DONALD W. MACLEOD and LEE A. HARRIS, as
Proxies, each with the full power of substitution to represent the undersigned
and to vote all of the shares of IRT Property Company (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Company to be held at the Cobb Galleria Centre, Two Galleria Parkway, Suite
105, Atlanta, Georgia 30339 on Thursday, May 12, 1994 at 10:00 a.m. local time,
and any adjournments thereof (1) as hereinafter specified upon the proposal
listed below and more particularly described in the Company's proxy statement,
receipt of which is hereby acknowledged, and (2) in their discretion upon such
other matters as may properly come before the meeting.
A vote "FOR" the following is recommended by the Board of Directors:
<TABLE>
<CAPTION>
1. Election of Directors as proposed in the accompanying proxy statement.
<S> <C>
/ / FOR for all nominees listed below / / WITHHOLD AUTHORITY to vote for all nominees listed below
(except as marked to the contrary below)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST
BELOW.)
D.W. MacLeod; M.M. Thomas; T.H. McAuley; H.B. Gibbs, Jr.; S.W. Kendrick; B.A. Morrice; J.H. Nobil; L.P. Wolfort.
</TABLE>
(PLEASE SIGN AND DATE ON THE REVERSE SIDE)
(OVER)
<PAGE> 19
(continued from other side)
The shares represented hereby will be voted as specified. If no
specification is made, such shares will be voted "FOR" all of the nominees
listed on the reverse side hereof, and with discretionary authority on all
other matters that may properly come before the meeting or any adjournments
thereof.
Dated ,1994
----------------------
---------------------------------
Signature of Shareholder
---------------------------------
Signature of Shareholder
PlEASE SIGN IN THE EXACT FORM AS
APPEARS AT THE LEFT AND DATE YOUR
PROXY. When signing as attorney,
executor, administrator, guardian,
trustee, etc., please give full
title as such.
