<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From to
------- --------
Commission File Number 1-7859
-----------------------------
IRT PROPERTY COMPANY
--------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Georgia 58-1366611
(State of other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
200 Galleria Parkway, Suite 1400
Atlanta, Georgia 30339
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code:(770) 955-4406
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<S> <C>
Title of each class Name of each exchange on which registered
Shares of Common Stock New York Stock Exchange
$1 Par Value
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
The aggregate market value of the common stock of the registrant held by
nonaffiliates of the registrant at March 17, 2000 was $254,241,935.
32,030,480 shares of Common Stock, $1 Par Value, were outstanding
at March 17, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
The information called for by Part III (Items 10, 11, 12 and 13) is
incorporated by reference to the registrant's definitive proxy
statement for the 2000 Annual Meeting of Shareholders of the
Company to be filed pursuant to Regulation 14A.
<PAGE> 2
CERTAIN MATTERS DISCUSSED IN THIS REPORT CONTAIN FORWARD-LOOKING STATEMENTS,
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, INCLUDING, WITHOUT
LIMITATION, TAX CONSIDERATIONS, COMPETITIVE CONDITIONS, REGULATION,
DISTRIBUTIONS TO SHAREHOLDERS, DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND LIQUIDITY OF THE COMPANY AND CERTAIN OTHER MATTERS. READERS OF
THIS REPORT SHOULD BE AWARE THAT THERE ARE VARIOUS FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY FORWARD-LOOKING STATEMENTS MADE IN
THIS REPORT, WHICH INCLUDE, WITHOUT LIMITATION, CHANGES IN TAX LAWS OR
REGULATIONS; VACANCIES AND LEASE RENEWALS; TENANT CLOSINGS; THE FINANCIAL
CONDITION (INCLUDING POSSIBLE MERGERS OR BANKRUPTCIES) OF TENANTS; COMPETITION;
CHANGES IN NATIONAL AND LOCAL ECONOMIC CONDITIONS AND POSSIBLE ENVIRONMENTAL
LIABILITIES AND THOSE FACTORS DISCUSSED IN THIS REPORT UNDER THE SECTION
ENTITLED "RISK FACTORS."
2
<PAGE> 3
PART I
ITEM 1
Business
General Development of Business.
IRT Property Company ("IRT"), founded in 1969 and a Georgia corporation
since 1979, is an owner, operator, developer and redeveloper of neighborhood and
community shopping centers located primarily in the southeastern United States
and usually anchored by necessity-oriented retailers such as supermarkets, drug
stores and/or discount variety stores. IRT is a self-administered and
self-managed equity real estate investment trust ("REIT") with acquisition,
development, redevelopment, financing, property management and leasing
capabilities.
IRT has elected since inception to be treated as a REIT under the
Internal Revenue Code (the "Code"). IRT intends to continue such election,
although it is not required to do so. For the special provisions applicable to
REITs, reference is made to Sections 856-860 of the Code, as amended.
IRT has three wholly-owned subsidiaries (collectively, the "Company").
VW Mall, Inc. ("VWM") was formed in July 1994. VWM is not currently engaged in
any activities but may do so in the future. IRT Alabama, Inc. ("IRTAL") was
formed in August 1997. Upon its formation, IRTAL purchased Madison Centre in
Madison, Alabama and has no other significant operations beyond this property.
IRT Management Company ("IRTMC") was formed in 1990. IRTMC currently holds 91.9%
of the operating units of IRT Partners L.P. (see description below). The Company
also has affiliations with three other subsidiaries that are not wholly-owned.
IRT Capital Corporation ("IRTCC"), a taxable subsidiary of the Company,
was formed under the laws of Georgia in 1996. IRTCC has the ability to develop
properties, buy and sell properties, provide equity to developers and perform
third-party management, leasing and brokerage functions. The Company holds 96%
of the non-voting common stock and 1% of the voting common stock of IRTCC. The
remaining voting common stock is currently held by a former member of the Board
of Directors and an executive officer of the Company. IRTCC, which is
accounted for by the Company under the equity method, is taxed as a regular
corporation and not as a REIT.
IRT Partners, L.P. ("LP"), a Georgia limited partnership, was formed in
1998 to enhance the Company's acquisition opportunities by offering potential
sellers the ability to engage in tax-deferred sales in exchange for Operating
Partnership Units ("OP Units") of LP which are redeemable for shares of the
Company's common stock. IRT serves as general partner of LP and made an initial
contribution of 20 shopping centers and related assets and cash to LP in
exchange for OP Units and partnership interests. Subsequent to the formation of
LP, the Company has contributed cash to acquire four shopping centers, and LP
has divested three shopping centers. As a result, IRT and IRTMC own
approximately 92.9% of LP, which is included in the Company's consolidated
financial statements. LP currently has several unaffiliated limited partners
resulting from the acquisition of three Florida properties by LP in August 1998.
The unaffiliated limited partners have the option to require LP to redeem their
OP Units at any time, in which event LP has the option to purchase the OP
3
<PAGE> 4
Units for cash or convert them into one share of the Company's common stock for
each OP Unit. In connection with the Company's formation of LP and its proposed
operations, LP has guaranteed the Company's bank indebtedness and its senior
indebtedness.
IRT Capital Corporation II ("IRTCCII"), a taxable subsidiary of the
Company, was formed under the laws of Georgia in 1999. IRTCCII has the ability
to develop properties, buy and sell properties, provide equity to developers and
perform third-party management, leasing and brokerage functions. The Company
holds 96% of the non-voting common stock and 1% of the voting common stock of
IRTCCII. The remaining voting common stock is currently held by an executive
officer and a director of the Company. IRTCCII, which is accounted for by the
Company under the equity method, is taxed as a regular corporation and not as a
REIT. IRTCCII currently is in the process of developing two shopping centers in
Florida. In connection with the Company's formation of IRTCCII and its proposed
operations, IRTCCII has guaranteed the Company's bank indebtedness and its
senior indebtedness.
Financial Information and Description of Business.
The Company's fundamental business is the ownership of real estate
investments which consist principally of equity investments in income-producing
properties, with primary emphasis on neighborhood and community shopping centers
in the southeastern United States. The Company's investment portfolio also
includes one industrial property, three investments which are accounted for as
direct financing leases and two mortgage loans. In addition, the Company has
authority to make other types of equity and mortgage investments in real estate.
For a description of the Company's individual investments and of
material developments during 1999 regarding these investments and the Company
as a whole, reference is made to Items 2 and 7 hereof. Readers are also urged
to review the Company's Annual Report to Shareholders for the year ended
December 31, 1999.
In making new real estate investments, the Company intends to continue
to place primary emphasis on obtaining equity interests in well-located
income-producing properties with attractive yields and potential for increases
in income and capital appreciation. The Company focuses on neighborhood and
community shopping centers, primarily in the southeastern United States;
however, the Company will consider acquisitions in other regions. The Company
also, from time to time, considers the disposition or exchange of existing
investments in order to improve its investment portfolio or increase its funds
from operations. Existing investments are continuously reviewed by Company
management, and appropriate programs to renovate and modernize properties are
designed and implemented in order to improve leasing arrangements, thereby
increasing funds from operations and property values. The Company's investment
and portfolio management philosophy is designed to implement its overall
objective of maximizing funds from operations and distributions to
shareholders.
The Company directly provides property management and leasing services
for all of its operating properties. Self-management enables the Company to
emphasize and more closely control leasing and property management. Internal
property management also provides the Company opportunities for operating
efficiencies by enabling it to acquire additional properties without
proportionate increases in property management expenses. The Company's property
management program is staffed by property management and leasing professionals
located in offices in Atlanta, GA; Charlotte, NC; Orlando, FL; Ft. Lauderdale,
FL and New Orleans, LA.
In 1999 the Company initiated a development program through IRTCCII
with the acquisition
4
<PAGE> 5
of two parcels of land in Florida. The Company has commenced the development of
these properties and continues to search for other development opportunities.
The Company maintains a conservative approach toward development and a
philosophy similar to its investment and portfolio management philosophy.
The results of the Company's operations depend upon the performance of
its existing investment portfolio, the availability of suitable opportunities
for new investments, the yields then available on such new investments and the
Company's cost of capital. Yields will vary with the type of investment
involved, the condition of the financial and real estate markets, the nature
and geographic location of the investment, competition and other factors. The
performance of a real estate investment company is strongly influenced by the
cycles of the real estate industry. As financial intermediaries providing
equity funds for real estate projects, real estate investment companies are
generally subject to the same market and economic forces as other real estate
investors.
Competitive Conditions.
In seeking new investment opportunities, the Company competes with
other real estate investors, including pension funds, foreign investors, real
estate partnerships, other REITs, such as Weingarten Realty Investors and
Regency Realty Corporation, and other domestic real estate companies. On
properties presently owned by the Company or in which it has investments, the
Company and its tenants and borrowers compete with other owners of like
properties, such as Regency Realty Corporation and JDN Realty Corporation, for
tenants and/or customers depending on the nature of the investment. Management
believes that the Company is well positioned to compete effectively for new
investments and tenants.
For any borrowed funds that may be used in new investment activity,
the Company would be in competition with other borrowers seeking both secured
and unsecured borrowings in the banking, real estate lending and public debt
markets.
Regulation.
The Company is subject to federal, state and local environmental
regulations regarding the ownership, development and operation of real
property. The Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. sec. 9601 et seq. ("CERCLA"), and applicable state laws subject
the owner of real property to claims or liability for the costs of removal or
remediation of hazardous substances that are disposed of on real property in
amounts that require removal or remediation. Liability under CERCLA and
applicable state superfund laws can be imposed on the owner of real property or
the operator of a facility without regard to fault or even knowledge of the
disposal of hazardous substances. The failure to undertake remediation where it
is necessary may adversely affect the owner's ability to sell real estate or
borrow money using such real estate as collateral. In addition to claims for
cleanup costs, the presence of hazardous substances on a property could result
in claims by private parties for personal injury or property damage.
The Company has obtained independent Phase I environmental site
assessments (which generally do not include environmental sampling, monitoring
or laboratory analysis) for property acquisitions beginning in 1989, and
otherwise as required by its lenders. Except as otherwise disclosed and based
upon information presently available to the Company, the Company has no reason
to believe that any environmental contamination has occurred nor any violation
of any
5
<PAGE> 6
applicable environmental law, statute, regulation or ordinance exists that
would have a material adverse effect on the Company's financial position. The
Company presently carries limited insurance coverage for the types of
environmental risks described herein. For the years commencing January 1, 2000,
the Company has acquired environmental and pollution legal liability insurance
coverage to mitigate the associated risks.
Employees.
The Company presently employs fifty-nine people located in five
locations in the southeast United States.
RISK FACTORS
Set forth below are the risks that management believes are material to
investors in the Company's common stock ("Shares") or limited Operating
Partnership Units of IRT Partners L.P. ("OP Units"), which are redeemable on a
one-for-one basis for Shares or their cash equivalent. We refer to the Shares
and the OP Units together as our "Securities," and the investors who own Shares
or OP Units as our "Security Holders."
Owning and Operating Retail Real Estate Entails Certain Risks That Could
Adversely Affect Our Performance.
Dependence on the Retail Industry. Our properties consist
predominately of community and neighborhood shopping centers. The
market for retail space may be adversely affected by consolidation of
retailers, the relatively weak financial condition of certain
retailers and overbuilding in certain markets. Market rents and our
performance could be adversely affected.
Internet Sales. Retail sales over the Internet have been increasing
rapidly. The success of electronic commerce businesses in attracting
customers of our tenants could adversely affect our tenants and other
companies, and thus the demand for retail space. A reduction in the
demand for retail space could adversely affect our performance.
Financial Condition of Tenants. If any of our anchor tenants or a
sufficient number of key tenants were unable to make their scheduled
rental payments, due to poor financial condition, we could experience
a materially adverse effect on our financial condition.
Bankruptcy of Tenants. A financially troubled tenant could seek the
protection of the bankruptcy laws, which might result in rejection and
termination of the tenant's lease. Whether or not a financially
troubled tenant seeks the protection of the bankruptcy laws, we could
experience delays and incur significant costs and delays in enforcing
our rights against a financially troubled tenant that does not pay its
rent when due.
In October 1999, Jitney Jungle Stores of America ("Jitney
Jungle") filed for reorganization under Chapter 11 of the United
States Bankruptcy Code. At the time of the filing, the Company had
leases with Jitney Jungle at ten store locations. Jitney Jungle has
6
<PAGE> 7
disavowed three of the leases, one of which the Company has since
re-leased to a national tenant. In the event that Jitney Jungle,
seeking protection under the bankruptcy laws, rejects or terminates
any of its leases, such rejection or termination could affect the
Company's performance. The timing and effects of the Jitney Jungle
bankruptcy proceedings on the Company are uncertain, but the Company
is participating in these proceedings and is evaluating its
alternatives with respect to each of its leases with Jitney Jungle.
Vacancies and Lease Renewals. Our anchor tenants' leases generally have
terms of up to 20 years, often with one or more renewal options. We may
not be able to find a replacement tenant at the end or nonrenewal of a
lease. The space may remain vacant or may be re-leased at terms that
vary materially with the original terms.
Tenant Closings. Certain leases permit the tenant to close its
operations at the leased location. Although the tenant would still be
responsible for its rental obligations, any rents based on the sales
of that tenant could be lost. Such a closure could adversely affect
customer traffic as well as the other tenants at a shopping center.
Rental rates and occupancy may also be affected adversely at such a
center.
Real Estate Investments Are Illiquid. Real estate investments
generally cannot be sold quickly. We may not be able to alter our
portfolio promptly in response to economic or other conditions.
Real Estate Industry Risks May Affect Our Performance.
Concentration in the Southeast. Most of our real estate portfolio is
located in the southeastern United States. This region has experienced
rapid growth in recent years. Our business could be adversely affected
generally by changes in the region's growth and economic condition, or
specifically in the local markets for retail space.
Uncertainty of Meeting Acquisition Objectives. We continually seek
additional shopping centers and portfolios of shopping centers. We
seek purchases with attractive initial yields and/or which may enhance
our revenues and funds from operations through renovation,
development, expansion and re-leasing programs. We also evaluate
mergers and acquisitions with companies engaged in businesses similar
to ours. We incur certain costs to evaluate possible transactions. We
may not complete such transactions and certain costs are not
recoverable in the event the transactions are not consummated. Also,
there can be no assurance we will be able to meet our acquisition
goals at any given time.
Uncertainty of Acquired Property Performance. We cannot assure that
any acquisition will increase our revenues or funds from operations or
result in a certain yield.
Competition. We compete with numerous other real estate companies.
Other retail properties within our markets compete with us for
tenants. The location and number of competitive retail properties
could affect the Company's occupancy levels and rental increases.
Development Competition. Other real estate companies compete with us
for development, redevelopment and acquisition opportunities. Such
competitors may be willing and able to pay more for such opportunities
than we would. This may increase the prices sought by sellers of these
properties.
7
<PAGE> 8
Environmental Problems Are Possible and Could Be Costly.
Possible Environmental Liabilities. An owner or operator of real
estate may be liable for the costs of removal of the releases of
certain hazardous or toxic substances. The presence of hazardous or
toxic substances on or near our properties, or the failure to properly
clean them up, may adversely affect our ability to sell or rent the
property or to use such property as collateral for our borrowings.
Corrective costs could adversely affect our financial condition and
performance.
Lack of Environmental Analyses. The Company has obtained independent
Phase I environmental site assessments (which generally do not include
environmental sampling, monitoring or laboratory analysis) for
property acquisitions beginning in 1989, and otherwise as required by
its lenders. Except as otherwise disclosed and based upon information
presently available to the Company, the Company has no reason to
believe that any environmental contamination has occurred nor any
violation of any applicable environmental law, statute, regulation or
ordinance exists that would have a materially adverse effect on the
Company's financial position. The Company presently carries limited
insurance coverage for the types of environmental risks described
herein. For the years commencing January 1, 2000, the Company has
acquired environmental and pollution legal liability insurance
coverage to mitigate the associated risks. However, there is no
assurance that this insurance will be adequate to protect the Company
against unforeseen liabilities, which could adversely affect the
Company's performance.
Presence of Dry Cleaning Solvents. A number of Company properties
include facilities leased to dry cleaners. At some of these
properties, dry cleaning solvents have been discovered in soil and or
groundwater. In each such instance either the amount detected was
below reportable limits or the state regulatory authority has informed
the Company that no further enforcement action would be taken. In
Florida, the state regulatory authority has admitted the affected
Company property into the state-sponsored fund responsible for the
clean up of dry cleaning spills. Neither the admission of a property
into the Florida fund nor the assurances of the relevant state
regulatory authority ensures that the Company will not incur costs
associated with corrective action.
American Disabilities Act.
Compliance with the Americans with Disabilities Act and Other Laws.
Our properties must comply with the federal Americans with
Disabilities Act of 1990 (the "ADA"). This law requires that
disabled persons must be able to enter and use public properties
like our shopping centers. The ADA, or other federal, state and
local laws may require us to modify our properties and may limit
renovations. If we fail to obey such laws, we may pay fines or
damages.
Some Potential Losses Are Not Covered by Insurance.
We carry comprehensive liability, fire, extended coverage and rental
loss insurance on all of our properties. We believe this insurance
coverage is reasonably adequate. Certain types of losses, such as
lease and other contract claims generally are not insured. Should an
uninsured loss or a loss in excess of insured limits occur, we could
lose some or all of our investment in a property, and the anticipated
future revenue from the property could be adversely affected.
8
<PAGE> 9
Notwithstanding any such loss, we would still owe mortgage debt or
other financial obligations related to the property.
Our Performance Is Subject to Risks Associated with Debt Financing.
At December 31, 1999, we had $290 million in long-term debt. On
December 31, 1999, our debt-to-total market capitalization ratio was
53% without conversion of the subordinated debentures or the OP Units
and 49% assuming conversion of the subordinated debentures and the OP
Units. Of our long-term debt, 42% is secured by mortgages on our
properties. We must pay our debts on time. We cannot pay dividends to
our Security Holders unless our debt has been paid when due.
Security Holders May Be Adversely Affected by the Dilution of Common Stock.
The Company may issue additional Shares or OP Units without Security
Holder approval. Additionally, each OP Unit may be redeemed by the
holder for one share of common stock or, at our option, the cash value
of one share of common stock. Such actions may dilute a Shareholder's
interest in the Company.
Our Liquidity Is Subject to the Restrictions on Sales of Certain Properties.
We have agreements that limit our sale of certain properties acquired
by LP for up to 10 years. We may enter into similar agreements with
future sellers of properties to LP. These agreements may prevent sales
of properties that could be advantageous to our Security Holders.
The Ability to Effect Changes in Control of the Company May Be Limited.
Certain provisions of the law, our charter documents and Company
policies may have the effect of delaying or preventing a change in
control of the Company or other transaction that could, if
consummated, provide investors with a premium over the then-prevailing
market price of the Company's securities. These provisions include the
Shareholders Rights Plan and the ownership limit described below.
Also, any future series of preferred stock may have certain voting
provisions that could delay or prevent a change of control or other
transaction that might involve a premium price or otherwise be of
benefit to other equity interests in the Company. For a description of
the Company's Shareholders Rights Plan, see the Company's report on
Form 8-K dated August 21, 1998.
The Company Is Subject to Ownership Limits and Certain Adverse Effects of
Failing to Qualify as a Reit.
Concentration of Ownership of the Company Is Limited. In order to
qualify as a REIT under the Code we must satisfy various tests related
to the sources and amounts of our income, the nature of our assets and
our stock ownership. For example, not more than 50% in value of the
outstanding shares of the Company may be owned, directly or indirectly,
by five or fewer individuals. Our charter authorizes our directors to
take such action as may be required to preserve our qualification as a
REIT including placing limits on the ownership of our securities. These
limits may have the ancillary effect of delaying, deferring or
preventing a change in control of the Company.
9
<PAGE> 10
REIT Investment Limitations. We must hold certain types of real estate
and other investments. This may limit our ability to diversify our
assets outside of real estate.
Adverse Effects of Failing to Qualify as a REIT. If the Company fails
to qualify as a REIT under the Code, it will be subject to income
taxes on its taxable income. The Company also may be disqualified from
treatment as a REIT for the four taxable years following the year
during which qualification is lost. This would reduce the net earnings
of the Company available for investment or distribution to Security
Holders because of the additional tax liability for the year(s)
involved. In addition, distributions to our Security Holders would no
longer be required, which would likely substantially reduce, or even
eliminate, any dividends paid by the Company to its shareholders.
10
<PAGE> 11
ITEM 2
(In thousands, except for square footage)
Properties
The following tables and notes thereto describe the properties in
which the Company had investments at December 31, 1999, as well as the mortgage
indebtedness to which the Company's investments were subject. Reference is made
to Note 3 to the consolidated financial statements included as a part of this
report for information on minimum base rentals on noncancellable operating
leases for the next five years and thereafter.
I. EQUITY INVESTMENTS (LAND AND BUILDINGS)
The Company had a fee or leasehold interest in land and improvements
thereon as follows:
<TABLE>
<CAPTION>
Percent
Date Leased Year
Description Acquired Area 12/31/99 Completed
----------- -------- ---- -------- ---------
<S> <C> <C> <C> <C>
SHOPPING CENTERS
Abbeville Plaza 4/86 59,525 sq. ft. 19% 1970
Abbeville, SC
Alafaya Commons 11/96 120,586 sq. ft. 90% 1987
Orlando, FL
Ambassador Row 12/94 193,982 sq. ft. 98% 1980 &
Lafayette, LA 1991
Ambassador Row Courtyards 12/94 155,483 sq. ft. 61% 1986 &
Lafayette, LA 1991
Asheville Plaza (3) 4/86 49,800 sq. ft. 100% 1967
Asheville, NC
Bay Pointe Plaza (3) 12/98 97,390 sq. ft. 93% 1984
St. Petersburg, FL
Bluebonnet Village 12/94 90,215 sq. ft. 99% 1983
Baton Rouge, LA
The Boulevard 12/94 68,012 sq. ft. 54% 1976 &
Lafayette, LA 1994
Carolina Place 5/89 36,560 sq. ft. 100% 1989
Hartsville, SC
Centre Point Plaza (3) 12/92 & 163,642 sq. ft. 100% 1989 &
Smithfield, NC 12/93 1993
Chadwick Square (3) 1/92 31,700 sq. ft. 100% 1985
Hendersonville, NC
Charlotte Square (3) 8/98 96,188 sq. ft. 95% 1980
Port Charlotte, FL
Chastain Square 12/97 74,315 sq. ft. 96% 1981
Atlanta, GA
</TABLE>
11
<PAGE> 12
I. EQUITY INVESTMENTS (LAND AND BUILDINGS) continued
<TABLE>
<CAPTION>
Percent
Date Leased Year
Description Acquired Area 12/31/99 Completed
----------- -------- ---- -------- ---------
<S> <C> <C> <C> <C>
Chelsea Place 7/93 81,144 sq. ft. 100% 1992
New Port Richey, FL
Chester Plaza 4/86 & 71,443 sq. ft. 66% 1967 &
Chester, SC 2/92 1992
Chestnut Square (3) 1/92 39,640 sq. ft. 100% 1985
Brevard, NC
Colony Square 2/88 50,000 sq. ft. 100% 1987
Fitzgerald, GA
Commerce Crossing 12/92 100,668 sq. ft. 100% 1988
Commerce, GA
Country Club Plaza 12/94 64,686 sq. ft. 86% 1982
Slidell, LA
Countryside Shops 6/94 173,161 sq. ft. 97% 1986, 1988
Cooper City, FL & 1991
The Crossing 12/94 113,989 sq. ft. 100% 1988 &
Slidell, LA 1993
Daniel Village 3/98 164,549 sq. ft. 91% 1954 &
Augusta, GA 1997
Delchamps Plaza 4/88 66,857 sq. ft. 100% 1987
Pascagoula, MS
Douglas Commons 8/92 97,027 sq. ft. 99% 1988
Douglasville, GA
Eden Centre (3) 11/94 56,355 sq. ft. 100% 1991
Eden, NC
Elmwood Oaks 1/92 130,284 sq. ft. 100% 1989
Harahan, LA
Fairview Oaks 6/97 77,052 sq. ft. 100% 1997
Ellenwood, GA
Forest Hills Centre (3) 8/90 74,180 sq. ft. 86% 1990
Wilson, NC
Forrest Gallery (3) 12/92 214,450 sq. ft. 98% 1987
Tullahoma, TN
Ft. Walton Beach Plaza 7/86 48,248 sq. ft. 11% 1986
Fort Walton Beach, FL
The Galleria (3) 8/86 & 92,344 sq. ft. 92% 1986, 1990
Wrightsville Beach, NC 12/87 & 1996
Grassland Crossing 2/97 90,906 sq. ft. 100% 1996
Alpharetta, GA
</TABLE>
12
<PAGE> 13
I. EQUITY INVESTMENTS (LAND AND BUILDINGS) continued
<TABLE>
<CAPTION>
Percent
Date Leased Year
Description Acquired Area 12/31/99 Completed
----------- -------- ---- -------- ---------
<S> <C> <C> <C> <C>
Greenwood 7/97 134,132 sq. ft. 86% 1982 &
Palm Springs, FL 1994
Gulf Gate Plaza 6/79 174,566 sq. ft. 79% 1969 &
Naples, FL 1974
Heritage Walk 6/93 159,362 sq. ft. 100% 1991 &
Milledgeville, GA 1992
Hoffner Plaza 6/79 6,000 sq. ft. 67% 1972
Orlando, FL
Lancaster Plaza 4/86 77,400 sq. ft. 91% 1971
Lancaster, SC
Lancaster Shopping Center 8/86 & 29,047 sq. ft. 89% 1963 &
Lancaster, SC 12/87 1987
Lawrence Commons (3) 8/92 52,295 sq. ft. 98% 1987
Lawrenceburg, TN
Lexington Shopping Center 6/88 & 36,535 sq. ft. 100% 1981 &
Lexington, VA 6/89 1989
Mableton Crossing 6/98 86,819 sq. ft. 99% 1997
Mableton, GA
Macland Pointe 1/93 79,699 sq. ft. 97% 1992 &
Marietta, GA 1993
Madison Centre 8/97 64,837 sq. ft. 94% 1997
Madison, AL
Market Place 4/97 73,686 sq. ft. 96% 1976
Norcross, GA
McAlpin Square (2) 12/97 176,807 sq. ft. 87% 1979
Savannah, GA
Millervillage 12/94 94,559 sq. ft. 93% 1983 &
Baton Rouge, LA 1992
New Smyrna Beach Regional 8/92 118,451 sq. ft. 100% 1987
New Smyrna Beach, FL
North River Village Center 12/92 & 177,128 sq. ft. 100% 1988 &
Ellenton, FL 12/93 1993
North Village Center (1) 8/86 60,356 sq. ft. 65% 1984
North Myrtle Beach, SC
Old Kings Commons 5/88 84,759 sq. ft. 100% 1988
Palm Coast, FL
Palm Gardens 6/79 49,890 sq. ft. 17% 1970
Largo, FL
</TABLE>
13
<PAGE> 14
I. EQUITY INVESTMENTS (LAND AND BUILDINGS) continued
<TABLE>
<CAPTION>
Percent
Date Leased Year
Description Acquired Area 12/31/99 Completed
----------- -------- ---- -------- ---------
<S> <C> <C> <C> <C>
Parkmore Plaza 12/92 159,067 sq. ft. 99% 1986 &
Milton, FL 1992
Paulding Commons 8/92 192,391 sq. ft. 100% 1991
Dallas, GA
Pensacola Plaza 7/86 56,098 sq. ft. 100% 1985
Pensacola, FL
Pinhook Plaza 12/94 192,501 sq. ft. 75% 1979 &
Lafayette, LA 1992
Plaza Acadienne (2) 12/94 105,419 sq. ft. 100% 1980
Eunice, LA
Plaza North (3) 8/92 47,240 sq. ft. 100% 1986
Hendersonville, NC
Powers Ferry Plaza 5/97 83,101 sq. ft. 83% 1979 &
Marietta, GA 1983
Providence Square (3) 12/71 85,930 sq. ft. 89% 1973
Charlotte, NC
Riverside Square (3) 8/98 103,241 sq. ft. 98% 1987
Coral Springs, FL
Riverview Shopping Center (3) 3/72 130,058 sq. ft. 88% 1973 &
Durham, NC 1994
Salisbury Marketplace (3) 8/96 76,970 sq. ft. 93% 1987
Salisbury, NC
Scottsville Square 8/92 38,450 sq. ft. 83% 1986
Bowling Green, KY
Seven Hills 7/93 64,590 sq. ft. 99% 1991
Spring Hill, FL
Shelby Plaza (2) (3) 4/86 103,000 sq. ft. 87% 1972
Shelby, NC
Sherwood South 12/94 75,607 sq. ft. 98% 1972, 1988
Baton Rouge,LA & 1992
Shoppes at Lago Mar (3) 2/99 82,613 sq. ft. 100% 1995
Miami, FL
Shoppes of Silverlakes 11/97 126,638 sq. ft. 93% 1995 &
Pembroke Pines, FL 1996
Siegen Village 12/94 174,578 sq. ft. 100% 1988 &
Baton Rouge, LA 1996
Smyrna Village (3) 8/92 83,334 sq. ft. 100% 1992
Smyrna, TN
Smyth Valley Crossing 12/92 126,841 sq. ft. 98% 1989
Marion, VA
South Beach Regional 8/92 289,319 sq. ft. 96% 1990 &
Jacksonville Beach, FL 1991
</TABLE>
14
<PAGE> 15
I. EQUITY INVESTMENTS (LAND AND BUILDINGS) continued
<TABLE>
<CAPTION>
Percent
Date Leased Year
Description Acquired Area 12/31/99 Completed
----------- -------- ---- -------- ---------
<S> <C> <C> <C> <C>
Spalding Village 8/92 235,318 sq. ft. 100% 1989
Griffin, GA
Spring Valley 3/98 75,415 sq. ft. 100% 1988 &
Columbia, SC 1997
Stadium Plaza 8/92 70,475 sq. ft. 100% 1988
Phenix City, AL
Stanley Market Place (3) 1/92 40,364 sq. ft. 100% 1980 &
Stanley, NC 1991
Tamarac Town Square (3) 8/98 123,385 sq. ft. 93% 1982
Tamarac, FL
Tarpon Heights 1/95 56,605 sq. ft. 100% 1982
Galliano, LA
Thomasville Commons 8/92 148,754 sq. ft. 100% 1991
Thomasville, NC
Town & Country 1/98 71,283 sq. ft. 100% 1993
Kissimmee, FL
Treasure Coast (3) 8/98 133,781 sq. ft. 99% 1970 &
Vero Beach, FL 1995
Venice Plaza (1) 6/79 155,987 sq. ft. 63% 1971 &
Venice, FL 1979
Village At Northshore 12/94 144,373 sq. ft. 100% 1988 &
Slidell, LA 1993
Walton Plaza 8/98 43,460 sq. ft. 94% 1991
Augusta, GA
Waterlick Plaza 10/89 98,694 sq. ft. 72% 1973 &
Lynchburg, VA 1988
Watson Central 12/92 & 227,747 sq. ft. 98% 1989 &
Warner Robins, GA 10/93 1993
Wesley Chapel Crossing 12/92 170,792 sq. ft. 100% 1989
Decatur, GA
West Gate Plaza 6/74 & 64,378 sq. ft. 99% 1974 &
Mobile, AL 1/85 1995
West Towne Square 3/90 89,596 sq. ft. 94% 1988
Rome, GA
Westgate Square 6/94 104,853 sq. ft. 96% 1984 &
Sunrise, FL 1988
Williamsburg At Dunwoody (3) 3/99 44,928 sq. ft. 100% 1988
Dunwoody, GA
</TABLE>
15
<PAGE> 16
I. EQUITY INVESTMENTS (LAND AND BUILDINGS) continued
<TABLE>
<CAPTION>
Percent
Date Leased Year
Description Acquired Area 12/31/99 Completed
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Willowdaile Shopping Center (3) 8/86 & 120,815 sq. ft. 92% 1986
Durham, NC 12/87 -----------------
Shopping Center Totals 9,398,698 sq. ft.
=================
Industrial Properties
Industrial Buildings 6/79 188,513 sq. ft. 82% 1956 &
Charlotte, NC 1963
=================
Total Equity Investments In
Land And Buildings 9,587,211 sq. ft.
=================
</TABLE>
NOTES:
(1) The Company owns a 49.5% interest in the property of North Village Center
and is entitled to 54.5% of the financial performance of the property. The
Company also owns a 75% interest in Venice Plaza Shopping Center. These
investments are consolidated for reporting purposes and minority interests
are recorded.
(2) Subject to ground leases expiring in 2002 for Shelby Plaza, 2005 for
McAlpin Square and 2008 for Plaza Acadienne, with renewal options to extend
the terms to 2017, 2033 and 2035, respectively. The Company has options to
purchase the land at Shelby Plaza and McAlpin Square.
(3) Ownership through IRT Partners, L.P.
16
<PAGE> 17
II. EQUITY INVESTMENTS (DIRECT FINANCING LEASES)
The Company also had a fee interest in land and improvements thereon in the
following properties occupied by tenants under leases which are treated as
direct financing leases.
<TABLE>
<CAPTION>
Percent
Date Leased Year
Description Acquired Area 12/31/99 Completed
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OFFICE
The Old Phoenix National Bank (1) 12/84 73,074 sq. ft. 100% Various
Medina County, OH
===============
SHOPPING CENTERS
Wal-Mart Stores, Inc. (2) 6/85 54,223 sq. ft. 100% 1985
Mathews, LA
Wal-Mart Stores, Inc. (2) 7/85 53,571 sq. ft. 100% 1985
Marble Falls, TX
---------------
TOTAL SHOPPING CENTERS 107,794 sq. ft.
===============
TOTAL DIRECT FINANCING LEASES 180,868 sq. ft.
===============
</TABLE>
Notes:
(1) This investment represents ten banking facilities leased to The Old
Phoenix National Bank. The leases expire March 2013 with no purchase or
renewal options.
(2) These two retail facilities are leased to Wal-Mart Stores, Inc. The leases
expire January 2011, with five 5-year renewal options. There are no
purchase options. No percentage rental was received during the fiscal year
ended December 31, 1999.
17
<PAGE> 18
III. EQUITY INVESTMENTS (LAND PURCHASE-LEASEBACKS)
The Company owned land under the following properties, all of which are net
leased back to lessees on terms summarized below. The improvements on such
properties are owned by others but will revert to the Company at the end of the
lease terms unless the purchase options of the lessees, as referred to below,
are exercised.
<TABLE>
<CAPTION>
Land Lease
Date Area Year Expiration
Description Acquired in Acres Improvements Completed Date
- ------------------------------------------------------------------------------------------------------
OFFICE
<S> <C> <C> <C> <C> <C>
Lawrence County Shopping Center 5/71 13.62 135,605 sq. ft. 1971 2069 (1)
Sybene, OH
Grand Marche Shopping Center 9/72 11.38 200,585 sq. ft. 1969 2012
Lafayette, LA
------------------------------
TOTAL LAND PURCHASE-LEASEBACKS 25.00 336,190 sq. ft.
==============================
</TABLE>
NOTE:
(1) The lessee has a repurchase option exercisable at a specified price
(in each case higher than the costs to the Company of its investment) which
increases annually by a fixed amount.
IV. MORTGAGE LOAN INVESTMENTS
The Company had mortgage loans receivable on the following properties:
(In thousands, except area and units)
<TABLE>
<CAPTION>
Security
------------------------- Principal Stated
Type of Land Area Outstanding Maturity Interest
Location Loan in Acres Improvements 12/31/99 Date Rate
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mill Creek Club Condominiums 1st Mortgage -- 4 units $ 22 2006- 8.63%-
Nashville, TN Participation 2007 (1) 12.38%
Cypress Chase "A" Condominiums 1st Mortgage 2.00 recreational 70 May 2009 10.00%
Lauderdale Lakes, FL
------ -------
TOTAL MORTGAGE LOAN INVESTMENTS 2.00 $ 92
====== =======
</TABLE>
NOTE:
(1) Principal outstanding at December 31, 1999 represents the Company's 46.2%
participation in the total loan outstanding.
18
<PAGE> 19
V. MORTGAGE INDEBTEDNESS
Indebtedness of the Company secured by its investments (not including
mortgage debt owed by lessees of its land purchase-leaseback investments)
was as follows:
(In thousands)
<TABLE>
<CAPTION>
Principal Balance Annual
Investment 12/31/99 Maturity Date Interest Rate Constant Payment
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Macland Pointe $ 3,528 2/1/00 (8) 7.7500% 363
Marietta, GA
Thomasville Commons 5,360 6/1/02 (1) 9.6250% 583
Thomasville, NC
Town & Country 2,142 12/1/02 (1) 7.6500% 214
Kissimmee, FL
Elmwood Oaks 7,500 6/1/05 8.3750% 628 (2)
Harahan, LA
North Village Center 2,227 (3) 3/15/09 8.1250% 343
North Myrtle Beach, SC
Tamarac Town Square (6), (7) 6,477 10/1/09 (1) 9.1875% 651
Tamarac, FL
Spalding Village 11,377 9/1/10 (1) 8.1940% 989 (4)
Griffin, GA
Charlotte Square (6), (7) 3,820 2/1/11 (1) 9.1875% 394
Port Charlotte, FL
Riverside Square (6), (7) 8,030 3/1/12 (1) 9.1875% 808
Coral Springs, FL
Village at Northshore 5,068 7/1/13 (5) 9.0000% 648
Slidell, LA
Treasure Coast (7) 5,697 4/1/15 8.0000% 646
Vero Beach, FL
Shoppes of Silverlakes 3,292 7/1/15 7.7500% 364
Pembroke Pines, FL
Grassland Crossing 6,504 12/1/16 (1) 7.8650% 623
Alpharetta, GA
Mableton Crossing 4,477 8/15/18 (1) 6.8500% 308
Mableton, GA
Shoppes at Lago Mar (7) 5,655 4/21/21 7.5000% 532
Miami, FL
Douglas Commons 5,531 2/28/24 6.5000% 454
Douglasville, GA
Paulding Commons 7,210 2/28/24 6.5000% 591
Dallas, GA
Wesley Chapel Crossing 3,704 2/28/24 6.5000% 304
Decatur, GA
Fairview Oaks 5,235 2/28/24 6.5000% 429
Ellenwood, GA
Madison Centre 4,247 2/28/24 6.5000% 348
Madison, AL
Chastain Square 4,247 2/28/24 6.5000% 348
Atlanta, GA
Daniel Village 4,642 2/28/24 6.5000% 381
Augusta, GA
Siegen Village 4,692 2/28/24 6.5000% 385
Baton Rouge, LA ------------- ---------
120,662
Interest Premium (6) 1,502
-------------
TOTAL MORTGAGE INDEBTEDNESS $ 122,164 $ 11,334
============= =========
</TABLE>
Notes:
(1) Balloon payment at maturity.
(2) Interest only. Entire principal due at maturity.
(3) Although the Company is a partner or joint venturer in this investment,
100% of the mortgage note payable is recorded for financial reporting
purposes.
(4) Interest only through 9/1/00; then principal and interest of $1,158
annually for the final 10 years.
(5) Callable anytime after 7/30/03.
(6) For financial reporting purposes, mortgage indebtedness is valued assuming
current interest rates at date of acquisition.
(7) Ownership through IRT Partners, L.P.
(8) Balance paid through balloon payment at maturity on February 1, 2000.
19
<PAGE> 20
VI. SHOPPING CENTER ACQUISITIONS
(in thousands, except square footage)
<TABLE>
<CAPTION>
Total
Date Initial Cash Mortgage Principal
Acquired Property Name City, State Area Cost Paid Assumed Tenants
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2/26/99 Shoppes At Lago Mar Miami, FL 82,613 sq. ft. $ 9,916 $ 4,174 $ 5,742 Publix
Blockbuster
3/15/99 Williamsburg At Dunwoody Atlanta, GA 44,928 sq. ft. 5,602 5,602 --
-----------------------------------------------------------
TOTAL ACQUISITIONS 127,541 sq. ft. $ 15,518 $ 9,776 $ 5,742
===========================================================
</TABLE>
VII. SHOPPING CENTER DISPOSITIONS
(in thousands, except square footage)
<TABLE>
<CAPTION>
Date Sales Cash Financial Property Principal
Sold Property Name City, State Area Price Proceeds Gain Type Tenants
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6/1/99 Litchfield Landing North Litchfield, SC 42,201 sq. ft. $ 3,190 $ 3,129 $1,191 Shopping Center Harris Teeter,
Eckerd
6/1/99 First Street Station Albemarle, NC 52,230 sq. ft. 3,137 3,038 320 Shopping Center Harris Teeter,
Eckerd
6/1/99 Taylorsville Shopping Center Taylorsville, NC 48,537 sq. ft. 2,571 2,430 609 Shopping Center Harris Teeter
6/1/99 University Center Greenville, SC 56,180 sq. ft. 3,462 3,399 202 Shopping Center Harris Teeter,
Eckerd
Other 417 413 161
-----------------------------------------
TOTAL DISPOSITIONS 199,148 sq. ft. $12,777 $ 12,409 $2,483
=========================================
</TABLE>
(In thousands, except square footage)
Investment in Joint Ventures
During 1997, IRTCC entered into a co-development agreement for the
development of a Kroger anchored shopping center in Decatur, Georgia. The
project was being developed in two phases totaling approximately 140,000 square
feet, not including two out-parcels, at a total anticipated cost of
approximately $14,100. The venture could have required the Company to purchase
the shopping center upon the completion of Phase I at cost or upon the
completion of Phase II at the greater of cost or a 10.75% capitalization rate.
On December 31, 1999, the Company relinquished its option to purchase the
shopping center to the co-developer for $969.
20
<PAGE> 21
Mortgage Indebtedness
During 1999, the Company repaid at maturity a $3,333 mortgage bearing
interest at 9.875% and repaid at maturity a $625 purchase-money mortgage bearing
interest at 9%. In February 1999, the Company obtained a 25 year
fully-amortizing $40,000 loan secured by first mortgages on eight properties
bearing interest at 6.5%. Also, upon the acquisition of the Shoppes at Lago Mar
shopping center, the Company assumed a $5,742 mortgage bearing interest at
7.65%.
21
<PAGE> 22
ITEM 3
Legal Proceedings
There are no material pending legal proceedings of which the Company
is aware involving the Company, its subsidiaries or its properties.
ITEM 4
Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the Company's
shareholders during the fourth quarter of the Company's fiscal year ended
December 31, 1999.
22
<PAGE> 23
PART II
ITEM 5
Market for the Registrant's Common Equity and Related Security Holder Matters
a) The following table shows the high and low sale prices for the
Company's common stock, as reported on the New York Stock Exchange for the
periods indicated.
<TABLE>
<CAPTION>
High Low
------ -------
<S> <C> <C>
1999
----
First Quarter $10.00 $ 8.69
Second Quarter 10.00 8.81
Third Quarter 9.88 9.00
Fourth Quarter 9.25 7.31
1998
----
First Quarter $12.31 $11.25
Second Quarter 12.06 10.19
Third Quarter 11.50 8.38
Fourth Quarter 10.50 8.81
</TABLE>
b) Approximate number of Equity Security Holders.
<TABLE>
<CAPTION>
Approximate Number of Record
Title of Class Holders at March 17, 2000
-------------- ----------------------------
<S> <C>
Shares of Common Stock
$1 Par Value 3,000
-----
</TABLE>
23
<PAGE> 24
c) IRT Property Company paid quarterly cash dividends per share of Common
Stock during the years 1999 and 1998 as follows:
<TABLE>
<CAPTION>
Cash Dividends Paid
-------------------
<S> <C>
1999
----
First Quarter $.230
Second Quarter .230
Third Quarter .235
Fourth Quarter .235
1998
----
First Quarter $.225
Second Quarter .230
Third Quarter .230
Fourth Quarter .230
</TABLE>
IRT has paid 88 consecutive quarterly dividends. The current
annualized dividend rate is $0.94. The Company does not foresee any
restrictions upon its ability to continue its dividend payment policy
of distributing at least the 95% of its otherwise taxable ordinary
income required for qualification as a REIT.
24
<PAGE> 25
ITEM 6
Selected Consolidated Financial Data
(In thousands, except per share amounts)
The following table sets forth selected consolidated financial data for the
Company and should be read in conjunction with the consolidated financial
statements and notes thereto included elsewhere in this report.
<TABLE>
<CAPTION>
As of or for the Years Ended 1999 1998 1997 1996 1995
- --------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Gross revenues $ 85,391 $ 79,870 $ 67,118 $ 60,233 $ 60,196
========= ========= ========= ========= =========
Earnings from operations $ 26,688 $ 24,691 $ 22,216 $ 15,602 $ 15,550
Minority interest of unitholders in
operating partnership (683) (262) -- -- --
Gain on sales of properties 2,483 1,213 3,897 1,232 173
--------- --------- --------- --------- ---------
Earnings before extraordinary items 28,488 25,642 26,113 16,834 15,723
Extraordinary items:
Loss on extinguishment of debt (157) (57) -- (16) (137)
--------- --------- --------- --------- ---------
Net earnings $ 28,331 $ 25,585 $ 26,113 $ 16,818 $ 15,586
========= ========= ========= ========= =========
Per share (basic and diluted):
Earnings before extraordinary items $ 0.86 $ 0.78 $ 0.82 $ 0.65 $ 0.61
Extraordinary items -- -- -- -- --
--------- --------- --------- --------- ---------
Net earnings $ 0.86 $ 0.78 $ 0.82 $ 0.65 $ 0.61
========= ========= ========= ========= =========
Dividends paid $ 0.93 $ 0.915 $ 0.90 $ 0.90 $ 0.885
========= ========= ========= ========= =========
Federal income tax status of dividends
paid to shareholders:
Ordinary income $ 0.787 $ 0.787 $ 0.730 $ 0.470 $ 0.635
Capital gain 0.143 0.054 0.080 -- --
Return of capital -- 0.074 0.090 0.430 0.250
--------- --------- --------- --------- ---------
$ 0.930 $ 0.915 $ 0.900 $ 0.900 $ 0.885
========= ========= ========= ========= =========
Weighted average shares outstanding:
Basic 33,119 32,940 31,868 25,750 25,590
========= ========= ========= ========= =========
Diluted 33,904 33,305 31,921 25,755 25,595
========= ========= ========= ========= =========
Total assets $ 565,896 $ 562,259 $ 498,153 $ 437,695 $ 427,398
========= ========= ========= ========= =========
Indebtedness:
Mortgage notes payable $ 122,164 $ 82,215 $ 59,558 $ 84,001 $ 99,188
7.30% convertible subordinated debentures 23,275 23,275 28,453 84,905 84,905
Senior notes 124,654 124,595 124,536 49,929 --
Indebtedness to banks 20,400 51,500 14,400 15,000 36,000
--------- --------- --------- --------- ---------
$ 290,493 $ 281,585 $ 226,947 $ 233,835 $ 220,093
========= ========= ========= ========= =========
Shareholders' equity $ 256,203 $ 262,773 $ 259,676 $ 193,355 $ 198,630
========= ========= ========= ========= =========
Other data:
Funds from operations(1) $ 40,377 $ 38,118 $ 34,079 $ 26,389 $ 26,406
Assuming conversion of 7.30% debentures:(1)
Funds from operations(1) $ 43,037 $ 40,324 $ 36,543 $ 32,953 $ 32,983
Weighted average shares outstanding 35,973 35,463 34,766 33,302 33,162
Net cash flows from (used in) --
Operating activities $ 41,452 $ 36,785 $ 34,792 $ 27,751 $ 25,947
Investing activities (8,551) (39,586) (60,273) (15,660) (7,769)
Financing activities (32,731) 2,870 22,582 (8,933) (20,003)
</TABLE>
(1) The Company defines funds from operations, consistent with the NAREIT
definition, as net income before gains (losses) on the sales of properties
and extraordinary items plus depreciation and amortization of capitalized
leasing costs. Conversion of the 7.30% subordinated debentures is dilutive
and therefore assumed for all years presented. Conversion of the OP Units
is dilutive and therefore assumed for 1999 and 1998. Management believes
funds from operations should be considered along with, but not as an
alternative to, net income as defined by generally accepted accounting
principles as a measure of the Company's operating performance. Funds from
operations does not represent cash generated from operating activities in
accordance with generally accepted accounting principles and is not
necessarily indicative of cash available to fund operating needs. See Item
7.
25
<PAGE> 26
ITEM 7
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(Dollars in thousands, except per share amounts)
Material Changes in Financial Condition.
During the fiscal year ended December 31, 1999, the Company:
- obtained a $40,000, 6.5% fixed rate, 25 year
fully-amortizing loan secured by first mortgages on
eight properties, and
- obtained cash proceeds of approximately $12,409 upon
the sales of properties and recognized a gain of
approximately $2,483 for financial reporting
purposes.
During the fiscal year ended December 31, 1999, the Company
utilized funds of:
- approximately $31,100 to pay down its unsecured
revolving term loan,
- approximately $30,908 to pay dividends on the
Company's outstanding common stock,
- approximately $15,518 for the acquisition of two
shopping center investments, consisting of cash of
approximately $9,776 and mortgage debt of
approximately $5,742 secured by one of the centers,
- approximately $3,776 to repurchase 492,575 shares of
the Company's common stock,
- approximately $1,191 for costs related to acquiring
the new credit facility and obtaining the $40,000
mortgage,
- approximately $7,251 for a loan to IRT Capital
Corporation II ("IRTCCII"), consisting of
approximately $3,800 for the acquisition of 23 acres
of undeveloped land in Miramar, Florida,
approximately $2,600 for the acquisition of a
shopping center and 9 acres of undeveloped land in
Pasco County, Florida, and approximately $851 to fund
land development costs, and
- $3,333 to repay at maturity a 9.875% mortgage and
$625 to repay at maturity a 9% purchase-money
mortgage.
During the fiscal year ended December 31, 1998, the Company:
- obtained cash proceeds of approximately $5,783 from
the sale of an investment and the condemnation of a
small strip of land,
26
<PAGE> 27
- obtained net cash proceeds of approximately $4,400
from the financing of the Mableton Crossing shopping
center, a 1998 acquisition, and
- borrowed $37,100 under its unsecured revolving term
loan.
During the fiscal year ended December 31, 1998, the Company
utilized funds of:
- approximately $77,280 for the acquisition of nine
shopping center investments, consisting of cash of
approximately $36,610, mortgage debt of approximately
$31,208 secured by six of the centers and OP Units
valued at approximately $9,462,
- approximately $28,417 to pay dividends on the
Company's outstanding common stock,
- $3,525 to prepay two mortgage notes payable bearing
interest at 9.875%,
- $2,175 to prepay a 10.25% mortgage,
- $544 to prepay an 8.25% mortgage,
- $2,224 to repay at maturity an 11% mortgage
(discounted to 9.75% for financial reporting
purposes), and
- $625 to make a scheduled principal payment under a 9%
purchase-money mortgage.
Additionally, in 1998, $5,178 of the Company's 7.3%
convertible subordinated debentures were converted into
460,263 shares of common stock at $11.25 per share.
Material Changes in Results of Operations.
During the fiscal year ended December 31, 1999, rental income
from the Company's portfolio of shopping center investments:
- increased approximately $1,147 for the core
portfolio,
- increased approximately $7,115 due to the acquisition
of nine shopping centers in 1998 and two in 1999,
- decreased approximately $994 due to the sales of an
investment in 1998 and five investments in 1999 and
the foreclosure of a mortgage held by the Company in
1998, and
- decreased approximately $2,435 due to the
redevelopment of six centers.
During the fiscal year ended December 31, 1998, rental income
from the Company's portfolio of shopping center investments:
- increased approximately $736 for the core portfolio,
27
<PAGE> 28
- increased approximately $10,213 due to the
acquisition of nine shopping centers in each of 1998
and 1997,
- decreased approximately $1,198 due to the sales of
one investment in 1998 and two investments in 1997,
and
- included approximately $2,092 of income upon the
termination of two anchor tenants' leases.
Percentage rentals received from shopping center investments,
excluding percentage rentals received from the two Wal-Mart investments
classified as direct financing leases, totaled approximately $1,018, $776
and $649 during the fiscal years ended December 31, 1999, 1998 and 1997,
respectively. Percentage rental income is recorded upon collection based
on the tenants' lease years.
Interest income during the fiscal year ended December 31,
1999, increased approximately $18 due primarily to the interest charged
on development loans.
Interest income during the fiscal year ended December 31, 1998
decreased primarily due to decreases of approximately $110 on short-term
money market investments, $628 on two mortgages under which the borrowers
defaulted and the Company acquired title to the properties and $251 on a
mortgage that was paid in full in 1997.
Other income increased approximately $969 due to the Company's
relinquishment of an option to purchase Old Decatur Square.
During the fiscal year ended December 31, 1999, operating
expenses related to the Company's portfolio of real estate investments:
- increased approximately $228 for the core portfolio,
- increased approximately $1,893 due to the acquisition
of two shopping centers in 1999 and nine in 1998,
- decreased approximately $305 due to the sale of
foreclosed apartments in 1998, and
- decreased approximately $135 due to the redevelopment
of six properties.
During the fiscal year ended December 31, 1998, operating
expenses related to the Company's portfolio of real estate investments:
- increased approximately $850 for the core portfolio,
- increased approximately $2,835 due to the acquisition
of nine shopping centers in each of 1998 and 1997,
- increased approximately $344 due to the acquisition
of the two properties obtained through foreclosure
subsequent to default under the respective mortgage
loans, and
28
<PAGE> 29
- decreased by approximately $527 due to the sales of
one investment in 1998 and two investments in 1997.
During the fiscal year ended December 31, 1999, interest
expense on mortgages decreased approximately $454 primarily due to two
mortgages being repaid in 1999 and five in 1998 and increased
approximately $4,208 due to:
- the assumption of a $2,232 mortgage bearing interest
at 7.65% upon the acquisition of Town & Country
shopping center in January 1998,
- the assumption of three mortgages aggregating
approximately $20,083, bearing interest at 9.1875%,
upon the acquisition of Charlotte Square, Riverside
Square and Tamarac Square in August 1998 (these
mortgages were discounted to the then current market
rate of 8% for financial reporting purposes),
- the assumption of a $5,937 mortgage bearing interest
at 8% upon the acquisition of Treasure Coast shopping
center in August 1998,
- the placement of a $4,500 mortgage, bearing interest
at 6.85%, on Mableton Crossing in August 1998
(Mableton was acquired without debt in June 1998),
- the assumption of a $5,742 mortgage bearing interest
at 8% upon the acquisition of Lago Mar shopping
center in February 1999, and
- the procurement, in February 1999, of a 25 year
fully-amortizing $40,000 loan, secured by first
mortgages on eight properties, bearing fixed interest
at 6.5%.
During the fiscal year ended December 31, 1998, interest
expense on mortgages decreased approximately $522 due to the repayment of
an aggregate of $43,768 of mortgage debt bearing interest at an average
rate of 8.44% and the subsequent assumption of an aggregate of $44,297 of
mortgage debt bearing interest at an average rate of 7.85% during 1998
and 1997.
Interest expense in 1998 increased due to the issuance in
August 1997 of $75,000 of 7.25% senior notes due August 2007. This
increase was offset by a decrease due to the conversion of $5,178 of 7.3%
debentures during the first quarter of 1998 and $1,653 during 1997.
Interest expense on bank indebtedness decreased approximately
$1,122 for the fiscal year ended December 31, 1999. The Company had
average borrowings of approximately $21,959, $35,211 and $14,165 at
effective interest rates of 6.75%, 6.87% and 7.09%, under its variable
rate bank credit facility during the fiscal years ended December 31,
1999, 1998 and 1997, respectively. In addition, the Company incurred
commitment fees of approximately $201, $160 and $212 in 1999, 1998 and
1997, respectively. During 1999, average interest rates on bank
indebtedness decreased 0.12%.
The net increase in depreciation expense in 1999 was primarily
due to the 11 shopping center investments acquired during 1999 and 1998,
partially offset by the five investments sold during 1999 and 1998.
29
<PAGE> 30
The net decrease in general and administrative expense of
approximately $1,223 for the fiscal year ended December 31, 1999 was
primarily due to:
- capitalization of approximately $230 of compensation
and overhead costs associated with development
activity,
- capitalization of $430 of incremental compensation
and other personnel costs associated with leasing
activity, and
- merger expenses of approximately $373 which were
incurred in 1998 and did not result in a merger.
The increase in general and administrative expense in 1998 was
primarily due to increased employment-related costs which included the
implementation of the Incentive Compensation Plan. General and
administrative expense for 1998 also included approximately $373 in
merger-related expenses for a merger that was not consummated.
Year 2000 Readiness Disclosure.
The Company successfully completed its transition to Year 2000
readiness with no impact to the Company's results of operations or
financial condition other than $20 to update the voice mail and phone
systems. In addition the Company is not aware of any significant counter
parties which were negatively impacted by their lack of Year 2000
readiness. Due to the nature of Year 2000 issues, the Company realizes
that additional information may come to light at any time after December
31, 1999; and the Company, therefore, intends to continue to monitor
significant counterparties in the future in the event that circumstances
change. Overall, even in the event of Year 2000 related failures at all
major tenants, the Company believes that it can receive its rent payments
via alternative methods of payment. However, no assurance may be given
that potential Year 2000 problems at those companies with which the
Company does business will not occur, and if these occur, consequences to
the Company will not be material. Except for the voice mail and phone
systems, most of the Company's technology systems were certified as Year
2000 compliant, and the cost of addressing the Year 2000 issues was less
than the estimated amount of $30. The Company designates each of the
statements made by it herein as a Year 2000 Readiness Disclosure. Such
statements are made pursuant to the Year 2000 Information and Readiness
Disclosure Act.
Funds from Operations.
The Company defines funds from operations, consistent with the
National Association of Real Estate Investment Trusts ("NAREIT")
definition, as net earnings on real estate investments less gains
(losses) on sale of properties and extraordinary items plus depreciation
and amortization of capitalized leasing costs. Interest and amortization
of issuance costs related to convertible subordinated debentures and
minority interest expenses are added back to funds from operations when
assumed conversion of the debentures and OP Units is dilutive. The
conversion of the debentures is dilutive and therefore assumed for the
fiscal years ended December 31, 1999, 1998 and 1997. The conversion of OP
Units is dilutive and assumed for the fiscal years ended December 31,
1999 and 1998. Management believes funds from operations should be
considered along with, but not as an alternative to, net income as
defined
30
<PAGE> 31
by generally accepted accounting principles as a measure of the
Company's operating performance. Funds from operations do not
represent cash generated from operating activities in accordance with
generally accepted accounting principles and is not necessarily
indicative of cash available to fund cash needs.
The following data is presented with respect to the
calculation of funds from operations under the NAREIT definition for
1999, 1998 and 1997:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Net earnings $ 28,331 $ 25,585 $ 26,113
Gain on sales of properties (2,483) (1,213) (3,897)
Depreciation* 13,708 12,833 11,453
Amortization of capitalized leasing fees* 504 350 288
Amortization of capitalized leasing income 160 133 122
Loss on extinguishment of debt 157 57 --
Nonrecurring merger expenses -- 373 --
-------- -------- --------
Funds From Operations 40,377 38,118 34,079
Interest on convertible debentures 1,699 1,745 2,325
Amortization of convertible debenture costs 100 104 139
Amounts attributable to minority interests 861 357 --
-------- -------- --------
Fully Diluted Funds From Operations $ 43,037 $ 40,324 $ 36,543
======== ======== ========
Per Share:
Fully Diluted Funds From Operations $ 1.20 $ 1.14 $ 1.05
======== ======== ========
Applicable weighted average shares 35,973 35,463 34,766
======== ======== ========
</TABLE>
* Net of amounts attributable to minority interests
31
<PAGE> 32
Liquidity and Capital Resources.
In 1999 and 1998, the Company's dividends, mortgage
amortization payments and capital improvements were funded primarily by
funds from operations and also through supplemental funding from
available cash investments, bank borrowings and other sources. The
Company believes that dividends, mortgage amortization payments and
necessary capital improvements will continue to be funded primarily by
funds from operations. Other planned activities, including property
acquisitions, new developments, certain capital improvement programs and
debt repayments are expected to be funded to the extent necessary by bank
borrowings, mortgage financing, periodic sales or exchanges of existing
properties, the issuance of OP Units and public or private offerings of
stock or debt.
For a description of the Company's mortgage debt, reference is
made to Note 7 to the consolidated financial statements included as a
part of this report. For a description of commitments and contingencies,
reference is made to Note 17 to the consolidated financial statements
included as a part of this report. For additional information on the
convertible subordinated debentures and the outstanding senior notes,
reference is made to Notes 8 and 9, respectively, to the consolidated
financial statements.
In May 1998, the Company filed a shelf registration statement
covering up to $300,000 of common stock, preferred stock, depositary
shares and warrants. The Company intends to use the net proceeds of any
offerings under such shelf registration for general corporate purposes,
which may include, without limitation, repayment of maturing obligations,
redemption of outstanding indebtedness or other securities, financing
future acquisitions and for working capital. As of December 31, 1999,
there had been no issuances of securities in connection with such shelf
registration statement.
On December 15, 1995, the Company entered into a $100,000
unsecured revolving term loan which, with extensions, was scheduled to
mature on January 4, 2001. On November 1, 1999, the Company repaid the
balance and cancelled this loan and entered into a new $100,000 unsecured
revolving term loan led by a different financial institution and further
backed by a syndicate of four other financial institutions. This new
credit facility is scheduled to mature on November 1, 2002. Not later
than November 1 of each year commencing in 2000, the Company may request
to extend the maturity date for an additional 12-month period beyond the
existing maturity date. The interest rate is, at the option of the
Company, either prime, fluctuating daily, or LIBOR plus the "Applicable
Margin" (currently 1.15%), which is subject to adjustment based upon the
rating of the senior unsecured long-term debt obligations of the Company.
The Company may borrow, repay and/or reborrow under this loan at any
time. In addition, the Company secured a $5,000 unsecured swingline,
bearing interest at LIBOR plus the Applicable Margin, scheduled to mature
on October 31, 2000. As of December 31, 1999 and 1998, the borrowings
under the Company's credit facilities totaled $20,400 and $51,500,
respectively. For additional information on this revolving term loan,
reference is made to Note 10 to the consolidated financial statements.
In connection with the Company's formation of IRT Partners,
L.P. ("LP") and IRT Capital Corporation II ("IRTCCII") and their proposed
operations, both entities guarantee the Company's indebtedness under the
Company's existing unsecured revolving term loan.
In October 1999, Jitney Jungle Stores of America ("Jitney
Jungle") filed for reorganization under Chapter 11 of the United States
Bankruptcy Code. At the time of filing,
32
<PAGE> 33
the Company had leases with Jitney Jungle at ten store locations.
Jitney Jungle has disavowed three of these leases, one of which the
Company has since re-leased to a national tenant. While the Company
currently has $118 in outstanding billings related to these three
leases, all of which is reserved against, the timing and effects of the
Jitney Jungle bankruptcy proceedings on the Company are uncertain. The
Company is participating in those proceedings and is evaluating its
alternatives with respect to these and the remaining leases in light of
the reorganization.
Prior to July 1998, the Company's Dividend Reinvestment Plan
allowed shareholders to elect to reinvest all or a portion of their
distributions in newly issued shares of common stock of the Company at
95% of the market price of the shares. This plan was amended to eliminate
the discount. During 1998 and 1997, the Company received net proceeds
under this plan of $1,740 and $2,864, respectively, and received no
proceeds in 1999.
Inflationary and Economic Factors.
The effects of inflation upon the Company's results of
operations and investment portfolio are varied. From the standpoint of
revenues, inflation has the dual effect of both increasing the tenant
revenues upon which percentage rentals are based and allowing increased
fixed rentals as rental rates rise generally to reflect higher
construction costs on new properties. This positive effect is partially
offset by increasing operating expenses, but usually not to the extent of
the increases in revenues.
Environmental Factors.
Certain of the Company's properties have environmental concerns
that have been or are being addressed. The Company maintains limited
insurance coverage for this type of environmental risk. For the years
commencing January 1, 2000, the Company has acquired environmental and
pollution legal liability insurance coverage to attempt to mitigate the
associated risks. Although no assurance can be given that Company
properties will not be affected adversely in the future by environmental
problems, the Company presently believes that there are no environmental
matters that are reasonably likely to have a material adverse effect on
the Company's financial position. See "Regulation."
Recent Accounting Pronouncements.
In 1998 the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income." SFAS No.
130 established standards for reporting and disclosing comprehensive
income (defined as revenues, expenses, gains and losses that under
generally accepted accounting principles are not included in net income)
and its components. The Company had no items of other comprehensive
income in 1999, 1998 or 1997.
In 1998 the Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131
established standards for reporting financial and descriptive information
about operating segments in annual financial statements. Operating
segments are defined as components of an enterprise about which separate
financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and
in assessing performance. The Company's chief operating decision maker is
its senior management group.
33
<PAGE> 34
The Company owns and operates retail shopping centers in ten
states in the southeast. Such shopping centers generate rental and other
revenue through the leasing of shop spaces to a diverse base of tenants.
The Company evaluates the performance of each of its shopping centers on
an individual basis. However, because each of the shopping centers have
similar economic characteristics and tenants, the shopping centers have
been aggregated into one reportable segment.
In June 1998 SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," was issued establishing accounting
and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded in the balance sheet as either an asset or liability measured at
its fair market value. The statement, as amended in June 1999 by SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities --
Deferral of the Effective Date of FASB Statement No. 133," is effective
for the Company on January 1, 2000. SFAS No. 133 requires that changes
in the derivative's fair market value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses
to offset related results on the hedged item in the income statement and
requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting. The Company
has never used derivative instruments or hedging activities.
34
<PAGE> 35
ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk.
The Company's exposure to market risk for changes in interest
rates relates primarily to its credit facility. The Company has no
involvement with derivative financial, hedging or similar instruments.
The table below provides information about the Company's
financial instruments that are sensitive to changes in interest rates or
market conditions, including estimated fair values for the Company's
interest rate sensitive liabilities as of December 31, 1999. As the table
incorporates only those exposures that exist as of December 31, 1999, it
does not consider exposures which could arise after that date. Moreover,
because there were no firm commitments to sell the obligations at fair
value as of December 31, 1999, the information presented has limited
predictive value. As a result, the Company's ultimate realized gain or
loss with respect to interest rate fluctuations will depend on the
exposures that arise during a future period and prevailing interest
rates.
<TABLE>
<CAPTION>
Expected Maturity/Principal Repayment
Nominal* ----------------------------------------------------------- Total Fair
Interest Rate 2000 2001 2002 2003 2004 Thereafter Balance Value
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-Sensitive Liabilities:
Lines of Credit Facilities 7.31% $ -- $ -- $20,400 $ -- $ -- $ -- $ 20,400 $ 20,400
7.3% Convertible Subordinated
Debentures - fixed rate 7.30% -- -- -- 23,275 -- -- 23,275 22,751
7.25% Senior Notes - fixed rate 7.25% -- -- -- -- -- 75,000 75,000 71,743
7.45% Senior Notes - fixed rate 7.45% -- 50,000 -- -- -- -- 50,000 49,647
Mortgage Notes Payable 7.42% 5,555 2,366 9,654 2,600 2,807 97,680 120,662 117,000
</TABLE>
* Average rates as of December 31, 1999
35
<PAGE> 36
ITEM 8.
Financial Statements and Supplementary Data
IRT PROPERTY COMPANY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants 37
Consolidated Balance Sheets:
December 31, 1999 and 1998 38
Consolidated Statements of Earnings:
For the Years Ended December 31, 1999, 1998 and 1997 39
Consolidated Statements of Changes in Shareholders' Equity:
For the Years Ended December 31, 1999, 1998 and 1997 40
Consolidated Statements of Cash Flows:
For the Years Ended December 31, 1999, 1998 and 1997 41
Notes to Consolidated Financial Statements:
December 31, 1999, 1998 and 1997 42
SCHEDULES
III Real Estate and Accumulated Depreciation 58
IV Mortgage Loans on Real Estate 68
</TABLE>
36
<PAGE> 37
Report of Independent Public Accountants
To IRT Property Company:
We have audited the accompanying consolidated balance sheets of IRT
PROPERTY COMPANY (a Georgia corporation) and subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of earnings, changes in
shareholders' equity and cash flows for each of the three years ended December
31, 1999. These financial statements and the schedules referred to below are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IRT Property Company
and subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years ended December 31,
1999, in conformity with accounting principles generally accepted in the United
States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the index to
consolidated financial statements are presented for purposes of complying with
the Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 11, 2000
37
<PAGE> 38
Item 1. Financial Statements.
IRT PROPERTY COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1999 and 1998
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
1999 1998
--------- ---------
ASSETS
Real estate investments:
<S> <C> <C>
Rental properties $ 630,005 $ 622,117
Accumulated depreciation (86,170) (74,943)
--------- ---------
Net rental properties 543,835 547,174
Equity investment in and advances to unconsolidated affiliates 7,251 --
Net investment in direct financing leases 4,412 4,572
Mortgage loans, net 92 1,097
--------- ---------
Net real estate investments 555,590 552,843
Cash and cash equivalents 514 344
Prepaid expenses and other assets 9,792 9,072
--------- ---------
Total assets $ 565,896 $ 562,259
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable, net $ 122,164 $ 82,215
7.3% convertible subordinated debentures, net 23,275 23,275
Senior notes, net 124,654 124,595
Indebtedness to banks 20,400 51,500
Accrued interest 3,612 3,612
Accrued expenses and other liabilities 8,196 7,204
--------- ---------
Total liabilities 302,301 292,401
--------- ---------
Commitments and contingencies (Note 17)
Minority interest payable 7,392 7,085
Shareholders' equity:
Common stock, $1 par value, 150,000,000 shares authorized;
33,234,206 shares issued in 1999 and
33,251,763 shares issued in 1998 33,234 33,252
Preferred stock, $1 par value, authorized 10,000,000 shares;
none issued -- --
Additional paid-in capital 272,448 272,975
Deferred compensation/stock loans (1,808) (2,386)
Treasury stock, at cost, 516,527 shares in 1999 and 0 shares in 1998 (4,026) --
Cumulative distributions in excess of net earnings (43,645) (41,068)
--------- ---------
Total shareholders' equity 256,203 262,773
--------- ---------
Total liabilities and shareholders' equity $ 565,896 $ 562,259
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
balance sheets.
38
<PAGE> 39
IRT PROPERTY COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
For the Years Ended December 31, 1999, 1998 and 1997
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- -------
REVENUES:
<S> <C> <C> <C>
Income from rental properties $ 83,481 $ 78,937 $65,216
Interest income 381 363 1,330
Interest on direct financing leases 560 570 572
Other income 969 -- --
-------- -------- -------
Total revenues 85,391 79,870 67,118
-------- -------- -------
EXPENSES:
Operating expenses of rental properties 19,458 17,944 14,076
Interest expense 21,488 19,272 15,587
Depreciation 13,869 12,925 11,453
Amortization of debt costs 460 437 423
General and administrative 3,432 4,655 3,363
-------- -------- -------
Total expenses 58,707 55,233 44,902
-------- -------- -------
Equity in earnings of unconsolidated affiliates 4 54 --
-------- -------- -------
Earnings before minority interest, gain on
sales of properties and extraordinary item 26,688 24,691 22,216
Minority interest of unitholders in
operating partnership (683) (262) --
Gain on sales of properties 2,483 1,213 3,897
-------- -------- -------
Earnings before extraordinary item 28,488 25,642 26,113
EXTRAORDINARY ITEM:
Loss on extinguishment of debt (157) (57) --
-------- -------- -------
Net earnings $ 28,331 $ 25,585 $26,113
======== ======== =======
PER SHARE: (Note 11)
Earnings before extraordinary item - basic $ 0.86 $ 0.78 $ 0.82
Extraordinary item - basic -- -- --
-------- -------- -------
Net earnings - basic $ 0.86 $ 0.78 $ 0.82
======== ======== =======
Earnings before extraordinary item - diluted $ 0.86 $ 0.78 $ 0.82
Extraordinary item - diluted -- -- --
-------- -------- -------
Net earnings - diluted $ 0.86 $ 0.78 $ 0.82
======== ======== =======
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic 33,119 32,940 31,868
======== ======== =======
Diluted 33,904 33,305 31,921
======== ======== =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
39
<PAGE> 40
IRT PROPERTY COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Years Ended December 31, 1999, 1998 and 1997
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Total Shares Additional
Common Treasury Common Paid-In Treasury
Stock Stock Stock Capital Stock
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 25,807 -- $ 25,807 $ 201,274 $ --
Net earnings -- -- -- -- --
Dividends declared - $.90 per share -- -- -- -- --
Issuance of shares under Dividend
Reinvestment Plan, net 260 -- 260 2,604 --
Conversion of debentures, net 147 -- 147 1,463 --
Exercise of options, net 17 -- 17 88 --
Issuance of common stock, net 4,654 -- 4,654 44,881 --
Issuance of shares for the repurchase of
convertible debentures, net 1,500 -- 1,500 13,477 --
------ ---- -------- --------- -------
Balance at December 31, 1997 32,385 -- 32,385 263,787 --
Net earnings -- -- -- -- --
Dividends declared - $.915 per share -- -- -- -- --
Issuance of shares under Dividend
Reinvestment Plan, net 164 -- 164 1,576 --
Conversion of debentures, net 460 -- 460 4,596 --
Exercise of options, net 3 -- 3 17 --
Issuance of restricted stock to employees 120 -- 120 1,130 --
Amortization of deferred compensation -- -- -- -- --
Issuance of shares subject to employee loans 120 -- 120 1,130 --
Adjustments to minority interest of unitholders
in operating partnership for issuance of
additional units -- -- -- 739 --
------ ---- -------- --------- -------
Balance at December 31, 1998 33,252 -- 33,252 272,975 --
Net earnings -- -- -- -- --
Dividends declared - $.93 per share -- -- -- -- --
Exercise of options, net 4 -- 4 33 --
Amortization of deferred compensation -- -- -- -- --
Forfeiture of restricted stock (22) -- (22) (203) --
Adjustment to minority interest of unitholders
in operating partnership for issuance of
additional units -- -- -- (357) --
Acquisition of treasury stock -- (517) -- -- (4,026)
------ ---- -------- --------- -------
Balance at December 31, 1999 33,234 (517) $ 33,234 $ 272,448 $(4,026)
====== ==== ======== ========= =======
<CAPTION>
Cumulative
Deferred Distributions Total
Compensation/ in Excess of Shareholders'
Stock Loans Net Earnings Equity
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1996 $ -- $(33,726) $ 193,355
Net earnings -- 26,113 26,113
Dividends declared - $.90 per share -- (28,883) (28,883)
Issuance of shares under Dividend
Reinvestment Plan, net -- -- 2,864
Conversion of debentures, net -- -- 1,610
Exercise of options, net -- -- 105
Issuance of common stock, net -- -- 49,535
Issuance of shares for the repurchase of
convertible debentures, net -- -- 14,977
-------- -------- ---------
Balance at December 31, 1997 -- (36,496) 259,676
Net earnings -- 25,585 25,585
Dividends declared - $.915 per share -- (30,157) (30,157)
Issuance of shares under Dividend
Reinvestment Plan, net -- -- 1,740
Conversion of debentures, net -- -- 5,056
Exercise of options, net -- -- 20
Issuance of restricted stock to employees (1,250) -- --
Amortization of deferred compensation 114 -- 114
Issuance of shares subject to employee loans (1,250) -- --
Adjustments to minority interest of unitholders -- -- --
in operating partnership for issuance of
additional units -- -- 739
-------- -------- ---------
Balance at December 31, 1998 (2,386) (41,068) 262,773
Net earnings -- 28,331 28,331
Dividends declared - $.93 per share -- (30,908) (30,908)
Exercise of options, net -- -- 37
Amortization of deferred compensation 103 -- 103
Forfeiture of restricted stock 225 -- --
Adjustment to minority interest of unitholders
in operating partnership for issuance of
additional units -- -- (357)
Acquisition of treasury stock 250 -- (3,776)
-------- -------- ---------
Balance at December 31, 1999 $ (1,808) $(43,645) $ 256,203
======== ======== =========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
40
<PAGE> 41
IRT PROPERTY COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1999, 1998 and 1997
(In thousands)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
Cash flows from operating activities:
<S> <C> <C> <C>
Net earnings $ 28,331 $ 25,585 $ 26,113
Adjustments to reconcile earnings to net cash from operating activities:
Depreciation 13,869 12,925 11,453
Gain on sales of properties (2,483) (1,213) (3,897)
Minority interest of unitholders in partnership (50) 262 --
Amortization of deferred compensation 103 114 --
Amortization of debt costs and discounts 519 496 455
Amortization of capitalized leasing income 160 133 122
Extraordinary loss - extinguishment of debt 157 57 --
Changes in assets and liabilities:
(Decrease) increase in accrued interest on debentures
and senior notes -- (143) 482
Increase in interest receivable, prepaid expenses
and other assets (146) (1,170) (478)
Increase (decrease) in accrued expenses and other liabilities 992 (318) 542
-------- -------- --------
Net cash flows from operating activities 41,452 36,728 34,792
-------- -------- --------
Cash flows used in investing activities:
Proceeds from sales of properties, net 12,409 5,783 6,077
Nonoperating distributions from unconsolidated joint venture -- 356 --
Investment in unconsolidated affiliates (7,251) -- --
Additions to real estate investments, net (14,714) (45,749) (70,211)
Collections of mortgage loans, net 1,005 24 3,861
-------- -------- --------
Net cash flows used in investing activities (8,551) (39,586) (60,273)
-------- -------- --------
Cash flows (used in) from financing activities:
Cash dividends, net (30,908) (28,417) (26,019)
Purchase of treasury stock (3,776) -- --
Exercise of stock options 37 20 105
Principal amortization of mortgage notes payable (1,835) (1,084) (1,146)
Repayment of mortgage notes payable (3,958) (9,093) (34,840)
Payment of deferred financing costs (1,191) -- --
Proceeds from mortgage notes payable 40,000 4,401 --
(Decrease) increase in bank indebtedness (31,100) 37,100 (600)
Issuance of common stock, net -- -- 49,534
Issuance of senior notes, net -- -- 73,817
Repurchase of 7.3% convertible subordinated debentures, net -- -- (38,269)
-------- -------- --------
Net cash flows (used in) from financing activities (32,731) 2,927 22,582
-------- -------- --------
Net increase (decrease) in cash and cash equivalents 170 69 (2,899)
Cash and cash equivalents at beginning of period 344 275 3,174
-------- -------- --------
Cash and cash equivalents at end of period $ 514 $ 344 $ 275
======== ======== ========
Supplemental disclosures of cash flow information:
Total cash paid during period for interest $ 21,344 $ 19,008 $ 15,518
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
41
<PAGE> 42
IRT PROPERTY COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 and 1997
(Dollars in thousands, except per share amounts)
(Unaudited with respect to square footage)
1. ORGANIZATION AND NATURE OF OPERATIONS:
IRT Property Company ("IRT"), founded in 1969, is a
self-administered and self-managed equity real estate
investment trust ("REIT") which invests primarily in
neighborhood and community shopping centers which are located
in the southeastern United States and are anchored by
necessity-oriented retailers such as supermarkets, drug stores
and/or discount variety stores. No single retailer accounts for
more than 7.7% of IRT's gross revenues.
In 1999 IRT Capital Corporation II ("IRTCCII"), a taxable
subsidiary of IRT, was formed under the laws of Georgia. This
taxable subsidiary has the ability to develop properties, buy
and sell properties, provide equity to developers and perform
third-party management, leasing and brokerage. IRT holds 96% of
the nonvoting common stock and 1% of the voting common stock
of IRTCCII. The remaining voting common stock is currently held
by a member of the board of directors of IRT and an executive
officer of IRT. IRTCCII is accounted for as an investment under
the equity method in the accompanying consolidated financial
statements. IRTCCII is taxed as a regular corporation and not
as a REIT.
In 1998 IRT Partners L.P. ("LP"), a Georgia limited
partnership, was formed to enhance the acquisition
opportunities of IRT by offering potential sellers the ability
to engage in tax-deferred sales in exchange for Operating
Partnership Units ("OP Units") of LP which are redeemable for
shares of IRT common stock. IRT serves as general partner of LP
and initially contributed 20 of its shopping centers and
related assets and cash to LP in exchange for OP Units and
partnership interests. Since the formation of LP, IRT has
contributed cash to acquire four shopping centers, and LP has
disposed of three shopping centers. As a result, IRT and one of
its wholly owned subsidiaries own approximately 92.9% of LP at
December 31, 1999. The accounts of LP are included in the
accompanying consolidated financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Consolidation
The accompanying consolidated financial statements
include the accounts of IRT and its wholly-owned subsidiaries
and majority-owned and controlled subsidiaries and partnership
(collectively, the "Company"). Investments in
42
<PAGE> 43
unconsolidated affiliates over which the Company does not
exercise control are accounted for by the equity method.
Intercompany transactions and balances have been eliminated in
consolidation.
Income Recognition
The Company employs a policy of suspending the accrual of
income on any investments where interest or rental payments are
delinquent 60 days or more. Percentage rental income is
recorded upon collection.
Depreciation
The Company provides depreciation on buildings and other
improvements on the straight-line basis over their estimated
useful lives. Such lives range from 16 to 40 years for
buildings and six years for improvements. Maintenance and
repairs are charged to expense as incurred, while significant
improvements are capitalized.
Use of Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
Cash Equivalents
The Company considers all highly liquid investments with
a maturity of three months or less when purchased to be cash
equivalents.
Earnings Per Share
Earnings per share is computed by dividing net earnings
by the weighted average number of shares outstanding consistent
with the guidelines of Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings Per Share." See Note 11
for the required disclosures.
Reclassification of Prior Year Amounts
Certain items in the consolidated financial statements
have been reclassified to conform with the 1999 presentation.
Recent Accounting Pronouncements
In 1998 the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." This statement established standards for
reporting and disclosing
43
<PAGE> 44
comprehensive income (defined as revenues, expenses, gains and
losses that under generally accepted accounting principles are
not included in net income) and its components. The Company had
no items of other comprehensive income in 1999 or 1998.
In 1998 the Company adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." This
statement established standards for reporting financial and
descriptive information about operating segments in annual
financial statements. Operating segments are defined as
components of an enterprise about which separate financial
information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. The Company's chief
operating decision maker is its senior management group.
The Company owns and operates retail shopping centers in
ten states in the southeastern United States. Such shopping
centers generate rental and other revenue through the leasing
of shop spaces to a diverse base of tenants. The Company
evaluates the performance of each of its shopping centers on an
individual basis. However, as each of the shopping centers
possesses similar economic characteristics and tenants, the
shopping centers have been aggregated into one reportable
segment.
In June 1998 SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," was issued establishing
accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other
contracts and for hedging activities. This statement, as
amended in June 1999 by SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133," is effective for the
Company on January 1, 2000. The Company has never used
derivative instruments or hedging activities.
Income Taxes
The Company has in past years elected to qualify, and
intends to continue such election, to be taxed as a REIT under
Sections 856-860 of the Internal Revenue Code of 1986, as
amended (the "Code"). In general terms, under such Code
provisions a trust or corporation which, in any taxable year,
meets certain requirements and distributes to its shareholders
at least 95% of its taxable income will not be subject to
federal income tax. Additionally, certain subsidiaries of IRT,
formed to provide management and other services to third and
related parties, are taxed based on reportable income. The tax
attributes of these entities are immaterial to the accompanying
consolidated financial statements.
44
<PAGE> 45
3. RENTAL PROPERTIES:
Rental properties are comprised of the following:
<TABLE>
<CAPTION>
December 31,
------------
1999 1998
------- -------
<S> <C> <C>
Land covered by purchase-
leaseback agreements $ 686 $ 928
Land related to buildings
and improvements 146,919 143,648
Buildings and improvements 482,400 477,541
-------- --------
Total rental properties $630,005 $622,117
======== ========
</TABLE>
Upon expiration of the leases for land covered by
purchase-leaseback agreements, all improvements on the land
will become the property of the Company. The lessees of these
properties have the option, subject to certain conditions, to
repurchase the land. Such option prices are for amounts
greater than the Company's carrying value of the related land.
Future minimum base rentals on noncancellable operating
leases for the Company's shopping center, industrial and land
purchase-leaseback investments at December 31, 1999 are as
follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
2000 $ 65,902
2001 58,379
2002 49,885
2003 42,132
2004 37,906
Thereafter 227,661
-------
Total $481,865
=======
</TABLE>
45
<PAGE> 46
SHOPPING CENTER ACQUISITIONS
<TABLE>
<CAPTION>
Date Square Total Initial Mortgage
Acquired Property Name City, State Footage Cost Cash Paid Assumed
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2/26/99 Shoppes at Lago Mar Kendall, FL 82,613 $ 9,916 $ 4,174 $5,742
3/15/99 Williamsburg at Dunwoody Dunwoody, GA 44,928 5,602 5,602 --
------- ------- ------ ------
127,541 $15,518 $ 9,776 $5,742
======= ======= ====== ======
</TABLE>
SHOPPING CENTER DISPOSITIONS
<TABLE>
<CAPTION>
Date Square Sales Cash
Sold Property Name City, State Footage Price Proceeds Gain
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6/1/99 Litchfield Landing Pawley's Island, SC 42,201 $ 3,190 $ 3,129 $1,191
6/1/99 First Street Station Albemarle, NC 52,230 3,137 3,038 320
6/1/99 Taylorsville Taylorsville, NC 48,537 2,571 2,430 609
6/1/99 University Center Greenville, NC 56,180 3,462 3,399 201
Other 417 413 162
------- ------- ------- ------
199,148 $12,777 $12,409 $2,483
======= ======= ======= ======
</TABLE>
4. NET INVESTMENT IN DIRECT FINANCING LEASES:
At December 31, 1999, two retail facilities are leased to
Wal-Mart Stores, Inc. at a total annual rental of $333 plus
percentage rentals of 1% of gross sales in excess of the
tenants' actual sales for its fiscal year ended January 31,
1990. Rental income from these leases totaled $399, $400 and
$381 in 1999, 1998 and 1997, respectively.
The Company acquired ten branch bank buildings in a 1984
merger. These facilities are leased to The Old Phoenix National
Bank at a total annual rental of $313.
Of the total rental income on direct financing leases,
$160, $133 and $122 were recorded as amortization of
capitalized leasing income in 1999, 1998 and 1997,
respectively.
The Company is to receive minimum lease payments of $646
per year during 2000 through 2004 and a total of $4,607
thereafter through the remaining lease terms.
46
<PAGE> 47
5. DEVELOPMENT AND CO-DEVELOPMENT:
IRTCCII currently is in the process of developing two
shopping centers in Florida for which IRT has committed to
loan up to $13,000. The loan, bearing interest at 2% over the
rates paid by IRT on its variable debt, matures in June 2001.
In 1999 the Company was engaged in a project to develop
Old Decatur Square jointly with a partner. On December 31,
1999, the Company agreed to relinquish its option to acquire
this property to the co-developer for $969 which is included in
other income in the accompanying consolidated statements of
earnings. The Company no longer maintains an interest in this
co-development.
6. MORTGAGE LOANS:
The Company's investments in mortgage loans, all of which
are secured by real estate investments, are summarized by type
of loan at December 31, 1999 and 1998, as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------------- --------------------------
Number Amount Number Amount
of Loans Outstanding of Loans Outstanding
------------ -------------- --------- -------------
<S> <C> <C> <C> <C>
First mortgage 1 $ 108 1 $ 114
Mortgage
participation 1 21 1 23
Second mortgage -- -- 2 1,000
----- ------ ------ -------
2 129 4 1,137
Less: Interest
discounts and
negative goodwill -- (37) -- (40)
----- ------ ------ -------
Mortgage loans, net 2 $ 92 4 $ 1,097
===== ====== ====== =======
</TABLE>
During the fourth quarter of 1997, the borrower under the
Spanish Quarter Apartments wrap-around mortgage loan defaulted
under the terms of the mortgage, and on February 18, 1998, the
Company obtained title to the property through foreclosure. On
August 14, 1998, the Company sold Spanish Quarter Apartments
for approximately $5,100. The Company received net cash
proceeds from the sale of approximately $4,806 and recognized a
gain, net of deferred income tax, of approximately $469 for
financial reporting purposes.
On August 1, 1998, the borrower under the Walton Plaza
first mortgage defaulted under the terms of the mortgage and on
August 31, 1998, the Company obtained title to Walton Plaza
through a deed in lieu of foreclosure.
47
<PAGE> 48
Annual principal payments applicable to mortgage loan
investments in the next five years and thereafter are as
follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
2000 $ 8
2001 9
2002 10
2003 11
2004 11
Thereafter 43
------
$ 92
======
</TABLE>
Based on current rates at which similar loans would be
made, the estimated fair value of mortgage loans was
approximately $148 and $1,160 at December 31, 1999 and 1998,
respectively.
7. MORTGAGE NOTES PAYABLE:
Mortgage notes payable are collateralized by various real
estate investments having a net carrying value of approximately
$190,128 at December 31, 1999. These notes have stated interest
rates ranging from 6.50% to 9.625% and are due in monthly
installments with maturity dates ranging from 2000 to 2024.
On February 25, 1999, the Company entered into a $40,000
loan secured by first mortgages on eight properties. This loan
is a 25-year fully amortizing loan that bears interest at a
fixed rate of 6.5%.
During 1999, the Company repaid at maturity a $625
purchase-money mortgage bearing interest at 9% and made a
scheduled balloon payment at maturity of $3,333 on a mortgage
bearing interest at 9.875%.
48
<PAGE> 49
Future principal amortization and balloon payments
applicable to mortgage notes payable at December 31, 1999 are
as follows:
<TABLE>
<CAPTION>
Principal Balloon
Year Amortization Payments Total
- ---- ------------ --------- -------
<S> <C> <C> <C>
2000 $ 2,034 $ 3,521 $ 5,555
2001 2,366 -- 2,366
2002 2,499 7,155 9,654
2003 2,600 -- 2,600
2004 2,807 -- 2,807
Thereafter 62,745 34,935 97,680
------- -------- --------
75,051 45,611 120,662
Interest premium 1,502
--------
$122,164
========
</TABLE>
Based on the borrowing rates currently available to the
Company for mortgages with similar terms and maturities, the
estimated fair value of mortgage notes payable was
approximately $117,000 and $88,622 at December 31, 1999 and
1998, respectively.
8. CONVERTIBLE SUBORDINATED DEBENTURES:
Effective August 31, 1993, the Company issued $86,250 of
7.3% convertible subordinated debentures due August 15, 2003,
$23,275 of which are outstanding as of December 31, 1999.
Interest on the debentures is payable semiannually on February
15 and August 15. The debentures are convertible at any time
prior to maturity into common stock of the Company at $11.25
per share, subject to adjustment in certain events. The Company
has the option to redeem the debentures at par. Costs
associated with the issuance of the debentures were
approximately $3,701 and are being amortized over the life of
the debentures.
During 1997, $1,653 of these debentures were converted
into 146,921 shares of common stock. During 1998, $5,178 of
these debentures were converted into 460,263 shares of common
stock. No debentures were converted during 1999. Based upon the
conversion price, 2,068,889 authorized but unissued common
shares have been reserved for possible issuance if the $23,275
debentures outstanding at December 31, 1999 are converted.
Based on the closing market price at year-end, the
estimated fair value of the debentures was approximately
$22,751 and $22,286 at December 31, 1999 and 1998,
respectively.
49
<PAGE> 50
9. SENIOR NOTES:
On March 26, 1996, the Company issued $50,000 of 7.45%
senior notes due April 1, 2001. These senior notes were issued
at a discount of $84 which is being amortized over the life of
the notes for financial reporting purposes. Net proceeds from
the issuance totaled approximately $49,394.
Interest on the 7.45% senior notes is payable
semiannually on April 1 and October 1. Costs associated with
the issuance of these senior notes totaled approximately $522
and are being amortized over the life of the notes.
On August 15, 1997, the Company issued $75,000 of 7.25%
senior notes due August 15, 2007. These senior notes were
issued at a discount of $426 which is being amortized over the
life of the notes for financial reporting purposes. Net
proceeds from the issuance totaled $73,817.
Interest on the 7.25% senior notes is payable
semiannually on February 15 and August 15. Costs associated
with the issuance of these senior notes totaled approximately
$757 and are being amortized over the life of the notes.
10. INDEBTEDNESS TO BANKS:
On November 1, 1999, the Company obtained a $100,000
unsecured revolving loan facility ("Revolving Loan") which is
scheduled to mature on November 1, 2002. This loan replaces the
Company's previous credit facility which was canceled
concurrent to the procurement of the new term loan. In
conjunction with the cancellation of the previous credit
facility, the Company recognized $157 of extraordinary loss for
the write-off of the related unamortized loan costs. In
addition, the Company secured a $5,000 swing line credit
facility with terms similar to those of the Revolving Loan with
a scheduled maturity date of October 31, 2000. The Company may
request to extend the maturity date for an additional
twelve-month period beyond the existing maturity date.
Under the Revolving Loan, the Company may elect to pay
interest at either the lender's prime, adjusted daily, or the
London Interbank Offered Rates ("LIBOR"), plus the "Applicable
Margin" based upon the rating of the senior unsecured debt
obligations of the Company. The Applicable Margin ranges from
.95% to 1.4%. The Applicable Margin based on the Company's
current rating is 1.15%. At December 31, 1999, the weighted
average interest rate was 7.62%. The terms of the Revolving
Loan require the Company to pay an annual facility fee equal to
0.2% of the total commitment and include certain restrictive
covenants which require compliance with certain financial
ratios and measurements. At December 31, 1999, the Company was
in compliance with these covenants.
LP and IRTCCII guarantee the Company's indebtedness on
the Revolving
50
<PAGE> 51
Loan.
The following data is presented with respect to the
Revolving Loan and swing line agreements in 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Available balance at year-end $84,600 $48,500
Average borrowing for the period 21,959 35,211
Maximum amount outstanding
during the period 51,500 52,000
Average interest rate for the period 6.75 % 6.87 %
Interest rate at year-end 7.62 % 6.69 %
</TABLE>
The Company incurred commitment fees of approximately
$201, $160 and $212 for the years ended December 31, 1999,
1998 and 1997, respectively
11. EARNINGS PER SHARE:
Basic earnings per share were computed by dividing net
earnings by the weighted average number of shares of common
stock outstanding during the year. The effects of the conversion
of the 7.3% subordinated debentures and the exercise of certain
stock options, using the treasury stock method, have been
excluded from the calculation of dilutive earnings per share, as
they are antidilutive for all periods presented.
<TABLE>
<CAPTION>
Shares Per Share
Income (in thousands) Amount
------------- -------------- ----------
<S> <C> <C> <C>
For the fiscal year ended December 31, 1999
- ---------------------------------------------------------
Basic net earnings available to shareholders $28,331 33,119 $ 0.86
Minority interest of unitholders in operating partnership 683 785 ========
------- ------
Diluted net earnings available to shareholders $29,014 33,904 $ 0.86
======= ====== ========
For the fiscal year ended December 31, 1998
- ---------------------------------------------------------
Basic net earnings available to shareholders $25,585 32,940 $ 0.78
Options outstanding -- 23 ========
Minority interest of unitholders in operating partnership 262 340
Restricted stock -- 2
------- ------
Diluted net earnings available to shareholders $25,847 33,305 $ 0.78
======= ====== ========
For the fiscal year ended December 31, 1997
- ---------------------------------------------------------
Basic net earnings available to shareholders $26,113 31,868 $ 0.82
Options outstanding -- 53 ========
------- ------
Diluted net earnings available to shareholders $26,113 31,921 $ 0.82
======= ====== ========
</TABLE>
51
<PAGE> 52
12. CASH DISTRIBUTIONS AND DIVIDEND REINVESTMENT PLAN:
The taxability of per share distributions paid to
shareholders during the years ended December 31, 1999, 1998 and
1997 was as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Ordinary income $ 0.787 $ 0.787 $ 0.730
Capital gains 0.143 0.054 0.080
Return of capital -- 0.074 0.090
------- ------ -----
$ 0.930 $ 0.915 $ 0.900
======= ====== =====
</TABLE>
In addition, the 5% discount received upon purchase of
shares under the Dividend Reinvestment Plan (the "DRIP") for
1998 and 1997 is taxable as ordinary income to the participant.
The DRIP allowed shareholders to elect to reinvest all or
a portion of their distributions in newly issued shares of
common stock of the Company at 95% of the market price of the
shares. The DRIP was amended in July 1998 to eliminate the
discount. During 1998 and 1997, the Company received net
proceeds under the DRIP of $1,740 and $2,864, respectively. The
Company did not receive any proceeds under the DRIP in 1999.
13. STOCK OPTIONS:
Effective May 8, 1989, the Company adopted and its
shareholders approved the 1989 Stock Option Plan (the "1989
Plan"). The 1989 Plan includes provisions for a) the granting
of both Incentive Stock Options ("ISOs") (as defined in Section
422A of the Code) and nonqualified options to officers and
employees and b) the automatic granting of nonqualified options
for 1,250 shares to each non-employee director upon the
election and each annual re-election of each non-employee
director. Under the terms of the 1989 Plan, the option price
shall be no less than the fair market value of the optioned
shares at the date of grant. The options are automatically
vested and expire after ten years.
Effective June 18, 1998, the Company adopted and its
shareholders approved the 1998 Long-Term Incentive Plan (the
"1998 Plan"). The 1998 Plan includes provisions for the
granting of ISOs, nonqualified options, stock appreciation
rights, performance shares, restricted stock, dividend
equivalents and other stock-based awards. Under the terms of
the 1998 Plan, the option exercise price shall be no less than
the fair market value of the optioned shares at the date of the
grant. The options are automatically vested and expire after
ten years.
The Company accounts for these plans under APB 25, under
which no compensation cost has been recognized. Had
compensation cost for these plans
52
<PAGE> 53
been determined consistent with SFAS 123, the Company's net
income and earnings per share would have been reduced to the
following pro forma amounts:
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C> <C>
Net earnings: As reported $28,331 $25,846
Pro forma $28,231 $25,412
EPS (basic and diluted): As reported $ 0.86 $ 0.78
Pro forma $ 0.85 $ 0.77
</TABLE>
Because the SFAS 123 method of accounting has not been
applied to options granted prior to January 1, 1995, the
resulting pro forma compensation cost may not be representative
of that to be expected in future years.
The weighted average fair value of options granted is
$0.62 and $1.10 for 1999 and 1998, respectively. The fair value
of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following
weighted-average assumptions used for grants in 1999 and 1998,
respectively: risk-free interest rates of 4.74% and 5.48%;
expected dividend yields of 9.50% and 7.87%; expected lives of
five years; expected volatility of 21%.
53
<PAGE> 54
Details of the stock option activity during 1999, 1998,
and 1997 are as follows:
<TABLE>
<CAPTION>
Number of Shares
--------------------------------- Option Price
Employees Directors Per Share
--------------- ------------- ----------------
<S> <C> <C> <C>
Options outstanding at
December 31, 1996 397,193 61,250 $7.63 - $15.10
Granted, 1997 90,000 -- $11.38
Granted, 1997 -- 5,000 $11.63
Exercised, 1997 (44,200) $9.25 - $10.75
Exercised, 1997 -- (6,250) $9.50 - $10.25
Expired unexercised, 1997 (60,000) -- $9.25 - $15.10
------- -------
Options outstanding at
December 31, 1997 382,993 60,000 $7.63 - $14.90
Granted, 1998 150,300 -- $11.69 - $11.81
Granted, 1998 -- 7,500 $10.44
Exercised, 1998 (4,750) -- $ 9.25
Expired unexercised, 1998 (42,575) -- $9.25 - $12.60
------- ------
Options outstanding at
December 31, 1998 485,968 67,500 $7.63 - $14.90
Granted, 1999 156,400 -- $9.69
Granted, 1999 -- 5,000 $9.38
Exercised, 1999 (4,000) -- $9.25
Expired unexercised, 1999 (130,500) (10,000) $9.25 - $14.90
------- -------
Options outstanding at
December 31, 1999 507,868 62,500 $7.63 - $13.38
======= =======
</TABLE>
54
<PAGE> 55
The following table summarizes information about stock
options outstanding and exercisable at December 31, 1999:
<TABLE>
<CAPTION>
Number Weighted Average Weighted
Range of Outstanding Remaining Average
Exercise Prices And Exercisable Contractual Life Exercise Price
------------------------- ---------------------- -------------------------- -----------------------------
<S> <C> <C> <C>
$ 7.63 - $9.75 271,768 7.26 years $ 9.55
$10.00 - $11.38 144,000 5.50 years $10.76
$11.63 - $13.38 154,600 6.22 years $11.92
------------------------- ---------------------- ------------------------- -----------------------------
$ 7.63 - $13.38 570,368 6.53 years $10.50
========================= ====================== ========================= =============================
</TABLE>
14. DEFERRED COMPENSATION AND STOCK LOANS:
On June 18, 1998, 119,760 restricted shares of common
stock (the "Restricted Shares") were granted and 119,760 shares
(the "Loan Shares") were issued pursuant to recourse loans due
June 18, 2008 made to certain Company officers as incentives
for future services. The Restricted Shares and the Loan Shares
were valued at the closing price of the Company's common stock
on June 18, 1998 of $10.437.
15. EMPLOYEE RETIREMENT BENEFITS:
Under the Company's 401(k) Plan, employees who have
completed one year of service and are at least 18 years of age
are eligible for participation in the Plan. Employees may elect
to make contributions to the Plan, and the Company matches 100%
of such contributions up to 6% of the individual participant's
compensation, based on the length of service. The Company
contributed approximately $159, $145 and $131 to the 401(k)
Plan in 1999, 1998 and 1997, respectively.
16. SUMMARY OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Significant noncash transactions for the years ended
December 31, 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- ------
<S> <C> <C> <C>
Mortgages assumed in purchase of rental
properties $ 5,742 $28,334 $ --
Adjustment for minority interest
ownership of LP (357) 739 --
OP Units issued in exchange for initial
capital contributions -- 75,484 --
</TABLE>
55
<PAGE> 56
<TABLE>
<S> <C> <C> <C>
OP Units issued in connection with the
acquisition of rental properties -- 7,741 --
Property acquired through foreclosure -- 7,635 --
Issuance of stock subject to employee
loans -- 1,250 --
Issuance of employee restricted stock -- 1,250 --
Issuance of common stock in exchange for
redemption of debentures -- -- 16,575
Conversion of debentures into common
stock -- 5,178 1,653
</TABLE>
17. COMMITMENTS AND CONTINGENCIES:
The Company has entered into Change In Control Employment
agreements with certain key executives. Under each agreement in
the event employment is terminated following a "Change In
Control," the Company is committed to pay certain benefits,
including the payment of each employee's base salary through
the expiration of each agreement.
Certain of the Company's properties have environmental
concerns that have been or are being addressed. The Company
maintains limited insurance coverage for this type of
environmental risk. Although no assurance can be given that
Company properties will not be affected adversely in the future
by environmental problems, the Company presently believes that
there are no environmental matters that are reasonably likely
to have a material adverse effect on the Company's financial
position.
18. SUBSEQUENT EVENTS:
On January 14, 2000, the Company sold Palm Gardens
shopping center, located in Largo, Florida, for approximately
$1,389 in cash.
The Company entered into a co-development agreement in
January 2000. Under this agreement, the Company will fund,
through loans to the co-developer, monies to acquire land
adjacent to an existing shopping center and to develop such
land. The Company has committed up to $3,650 for this
co-development.
19. EVENT (UNAUDITED) SUBSEQUENT TO DATE OF AUDITOR'S REPORT:
On February 18, 2000, the Company sold Westgate Square
shopping center, located in Sunrise, Florida, for approximately
$10,271 in cash.
56
<PAGE> 57
20. QUARTERLY FINANCIAL INFORMATION (UNAUDITED):
The following is a summary of the unaudited quarterly
financial information for the fiscal years ended December 31,
1999 and 1998.
<TABLE>
<CAPTION>
1999
------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 21,043 $ 21,478 $ 20,772 $ 22,098
======== ======== ======== ========
Earnings before minority interest, gain on
sales of properties and extraordinary item $ 6,661 $ 6,445 $ 6,315 $ 7,267
Minority interest - OP unitholders (170) (254) (147) (112)
Gain on sales of properties -- 2,483 -- --
-------- -------- -------- --------
Earnings before extraordinary item 6,491 8,674 6,168 7,155
Extraordinary item - loss on extinguishment
of debt -- -- -- (157)
-------- -------- -------- --------
Net earnings $ 6,491 $ 8,674 $ 6,168 $ 6,998
======== ======== ======== ========
Per share:
Basic $ 0.20 $ 0.26 $ 0.19 $ 0.21
======== ======== ======== ========
Diluted $ 0.20 $ 0.26 $ 0.19 $ 0.21
======== ======== ======== ========
1998
------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
--------- --------- --------- ---------
Revenues $ 18,527 $ 19,907 $ 20,817 $ 20,619
======== ======== ======== ========
Earnings before minority interest, gain on
sales of properties and extraordinary item $ 6,056 $ 5,633 $ 6,919 $ 6,083
Minority interest - OP unitholders -- -- (105) (157)
Gain on sales of properties -- 744 469 --
-------- -------- -------- --------
Earnings before extraordinary item 6,056 6,377 7,283 5,926
Extraordinary item - loss on extinguishment
of debt -- -- (57) --
-------- -------- -------- --------
Net earnings $ 6,056 $ 6,377 $ 7,226 $ 5,926
======== ======== ======== ========
Per share:
Basic $ 0.19 $ 0.19 $ 0.22 $ 0.18
======== ======== ======== ========
Diluted $ 0.19 $ 0.19 $ 0.22 $ 0.18
======== ======== ======== ========
</TABLE>
57
<PAGE> 58
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands, except useful lives)
<TABLE>
<CAPTION>
Estimated
Costs Gross Amount Accumulated Useful
Initial Capitalized at Which Depreciation Life of
Cost to Subsequent to Carried at at Close Buildings Date Year
Description Encumbrances Company Acquisition Close of Year of Year (Years) Acquired Completed
----------- ------------ ------- ----------- ------------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Abbeville Plaza
Abbeville, SC
Land $ -- $ 48 $ -- $ 48 $ -- 21 April, 1986 1970
Buildings 458 56 514 384
Alafaya Commons
Orlando, FL
Land -- 5,526 -- 5,526 -- 40 November, 1996 1987
Buildings 4,724 102 4,826 373
Ambassador Row
Lafayette, LA
Land -- 2,452 -- 2,452 -- 40 December, 1994 1980 &
Buildings 7,244 472 7,716 1,048 1991
Ambassador Row Courtyards
Lafayette, LA
Land -- 2,899 -- 2,899 -- 40 December, 1994 1986 &
Buildings 8,698 269 8,967 1,170 1991
Asheville Plaza(1)
Asheville, NC
Land -- 53 15 68 -- 30 April, 1986 1967
Buildings 336 2 338 155
Bay Pointe Plaza(1)
St. Petersburg, FL
Land -- 3,250 -- 3,250 -- 40 December, 1998 1998
Buildings 3,138 -- 3,138 85
Bluebonnet Village
Baton Rouge, LA
Land -- 2,540 (5) 2,535 -- 40 December, 1994 1983
Buildings 5,510 116 5,626 728
The Boulevard
Lafayette, LA
Land -- 948 -- 948 -- 40 December, 1994 1976 &
Buildings 2,845 51 2,896 373 1994
Carolina Place
Hartsville, SC
Land -- 345 -- 345 -- 40 May, 1989 1989
Buildings 2,006 4 2,010 530
Centre Pointe Plaza(1)
Smithfield, NC
Land -- 984 12 996 -- 40 December, 1992& 1989 &
Buildings 8,003 286 8,289 1,501 December, 1993 1993
Chadwick Square(1)
Hendersonville, NC
Land -- 277 -- 277 -- 40 January, 1992 1985
Buildings 1,180 99 1,279 253
Charlotte Square(1)
Port Charlotte, FL
Land 4,130 2,114 -- 2,114 -- 40 August, 1998 1998
Buildings 3,892 117 4,009 138
</TABLE>
58
<PAGE> 59
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands, except useful lives)
<TABLE>
<CAPTION>
Estimated
Costs Gross Amount Accumulated Useful
Initial Capitalized at Which Depreciation Life of
Cost to Subsequent to Carried at at Close Buildings Date Year
Description Encumbrances Company Acquisition Close of Year of Year (Years) Acquired Completed
----------- ------------ ------- ----------- ------------- ---------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Chastain Square
Atlanta, GA
Land $4,247 $ 1,689 -- $ 1,689 $ -- 40 December, 1997 1981
Buildings 5,069 28 5,097 261
Chelsea Place
New Port Richey, FL
Land -- 1,388 -- 1,388 -- 40 July, 1993 1992
Buildings 5,550 56 5,606 899
Chester Plaza
Chester, SC
Land -- 69 143 212 -- 16 April, 1986 & 1967 &
Buildings 414 1,675 2,089 891 February, 1992 1992
Chestnut Square(1)
Brevard, NC
Land -- 296 -- 296 -- 40 January, 1992 1985
Buildings 1,113 96 1,209 235
Colony Square
Fitzgerald, GA
Land -- 273 -- 273 -- 40 February, 1988 1987
Buildings 2,456 254 2,710 930
Commerce Crossing
Commerce, GA
Land -- 380 1 381 -- 40 December, 1992 1988
Buildings 4,090 57 4,147 730
Country Club Plaza
Slidell, LA
Land -- 1,069 -- 1,069 -- 40 January, 1995 1982
Buildings 3,010 157 3,167 444
Countryside Shops
Cooper City, FL
Land -- 5,652 -- 5,652 -- 40 June, 1994 1986, 1988
Buildings 10,977 186 11,163 1,589 & 1991
The Crossing
Slidell, LA
Land -- 1,282 -- 1,282 -- 40 December, 1994 1988 &
Buildings 3,214 109 3,323 465 1993
Daniel Village
Augusta, GA
Land 4,642 2,633 -- 2,633 -- 40 March, 1998 1998
Buildings 9,612 88 9,700 435
Delchamps Plaza
Pascagoula, MS
Land -- 359 -- 359 -- 40 April, 1988 1987
Buildings 4,130 109 4,239 1,252
Douglas Commons
Douglasville, GA
Land 5,531 2,543 3 2,546 -- 40 August, 1992 1998
Buildings 5,958 169 6,127 1,198
</TABLE>
59
<PAGE> 60
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands, except useful lives)
<TABLE>
<CAPTION>
Estimated
Costs Gross Amount Accumulated Useful
Initial Capitalized at Which Depreciation Life of
Cost to Subsequent to Carried at at Close Buildings Date Year
Description Encumbrances Company Acquisition Close of Year of Year (Years) Acquired Completed
----------- ------------ ------- ----------- ------------- ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Eden Centre(1)
Eden, NC
Land $ -- $ 626 $ -- 626 $ -- 40 November, 1994 1991
Buildings 2,901 23 2,924 378
Elmwood Oaks
Harahan, LA
Land 7,500 4,559 -- 4,559 -- 40 January, 1992 1989
Buildings 6,560 91 6,651 1,342
Fairview Oaks
Ellenwood, GA
Land 5,235 714 -- 714 -- 40 June, 1997 1997
Buildings 6,396 3 6,399 406
Forest Hills Centre(1)
Wilson, NC
Land -- 870 (9) 861 -- 40 August, 1990 1990 &
Buildings 4,121 626 4,747 1,039 1995
Forrest Gallery(1)
Tullahoma, TN
Land -- 2,137 11 2,148 -- 40 December, 1992 1987
Buildings 9,978 676 10,654 1,999
Ft. Walton Beach Plaza
Ft. Walton Beach, FL
Land -- 788 -- 788 -- 30 July, 1986 1986
Buildings 1,860 29 1,889 856
The Galleria(1)
Wrightsville Beach, NC
Land -- 1,070 -- 1,070 -- 40 August, 1986 1986, 1990
Buildings 6,139 1,318 7,457 2,182 & December, 1987 &1996
Grassland Crossing
Alpharetta, GA
Land 6,504 1,075 -- 1,075 -- 40 February, 1997 1996
Buildings 8,832 233 9,065 681
Greenwood
Palm Springs, FL
Land -- 4,129 -- 4,129 -- 40 July, 1997 1982 &
Buildings 8,954 170 9,124 561 1994
Gulf Gate Plaza
Naples, FL
Land -- 278 -- 278 -- 28 June, 1979 1969 &
Buildings 1,858 2,421 4,279 3,116 1974
Heritage Walk
Milledgeville, GA
Land -- 810 -- 810 -- 40 June, 1993 1991 &
Buildings 7,944 34 7,978 1,312 1992
</TABLE>
60
<PAGE> 61
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands, except useful lives)
<TABLE>
<CAPTION>
Estimated
Costs Gross Amount Accumulated Useful
Initial Capitalized at Which Depreciation Life of
Cost to Subsequent to Carried at at Close Buildings Date Year
Description Encumbrances Company Acquisition Close of Year of Year (Years) Acquired Completed
----------- ------------ ------- ----------- ------------- ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Hoffner Plaza
Orlando, FL
Land $ -- $ 337 $ 78 $ 415 $ -- 28 June, 1979 1972
Buildings 147 20 167 141
Lancaster Plaza
Lancaster, SC
Land -- 121 -- 121 -- 30 April, 1986 1971
Buildings 744 572 1,316 666
Lancaster Shopping Center
Lancaster, SC
Land -- 338 -- 338 -- 30 August, 1986 & 1963 &
Buildings 1,228 77 1,305 523 December, 1987 1987
Lawrence Commons(1)
Lawrenceburg, TN
Land -- 816 -- 816 -- 40 August, 1992 1987
Buildings 2,729 62 2,791 535
Lexington Shopping Center
Lexington, VA
Land -- 312 -- 312 -- 30 June, 1988 & 1981 &
Buildings 1,639 650 2,289 870 June, 1989 1989
Mableton Crossing
Mableton, GA
Land 4,477 2,781 -- 2,781 -- 40 June, 1998 1998
Buildings 5,389 5 5,394 206
Macland Pointe
Marietta, GA
Land 3,528 1,252 (12) 1,240 -- 40 January, 1993 1992 &
Buildings 4,317 598 4,915 863 1993
Madison Centre
Madison, AL
Land 4,247 2,772 -- 2,772 -- 40 August, 1997 1997
Buildings 3,046 -- 3,046 181
Market Place
Norcross, GA
Land -- 3,820 -- 3,820 -- 40 April, 1997 1976
Buildings 3,254 366 3,620 237
McAlpin Square
Savannah, GA
Land -- -- -- -- -- 40 December, 1997 1979
Buildings 6,152 251 6,403 309
Millervillage
Baton Rouge, LA
Land -- 1,927 -- 1,927 -- 40 December, 1994 1983 &
Buildings 5,662 129 5,791 762 1992
</TABLE>
61
<PAGE> 62
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands, except useful lives)
<TABLE>
<CAPTION>
Estimated
Costs Gross Amount Accumulated Useful
Initial Capitalized at Which Depreciation Life of
Cost to Subsequent to Carried at at Close Buildings Date Year
Description Encumbrances Company Acquisition Close of Year of Year (Years) Acquired Completed
----------- ------------ ------- ----------- ------------- ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
New Smyrna Beach Regional
New Smyrna Beach, FL
Land $ -- $ 3,704 $ 7 $ 3,711 $ -- 40 August, 1992 1987
Buildings 6,401 383 6,784 1,417
North River Village
Ellenton, FL
Land -- 2,949 -- 2,949 -- 40 December, 1992 & 1988 &
Buildings 7,161 106 7,267 1,214 December, 1993 1993
North Village Center
North Myrtle Beach, SC
Land 2,227 483 -- 483 -- 37 August, 1986 1984
Buildings 2,785 10 2,795 891
Old Kings Commons
Palm Coast, FL
Land -- 1,491 -- 1,491 -- 40 May, 1988 1988
Buildings 4,474 197 4,671 1,437
Palm Gardens
Largo, FL
Land -- 98 -- 98 -- 26 June, 1979 970 &
Buildings 658 1,123 1,781 1,267 1993
Parkmore Plaza
Milton, FL
Land -- 1,799 8 1,807 -- 40 December, 1992 1986 &
Buildings 6,454 138 6,592 1,192 1992
Paulding Commons
Dallas, GA
Land 7,210 2,312 3 2,315 -- 40 August, 1992 1991
Buildings 10,607 207 10,814 2,030
Pensacola Plaza
Pensacola, FL
Land -- 131 -- 131 -- 30 July, 1986 1985
Buildings 2,392 168 2,560 1,204
Pinhook Plaza
Lafayette, LA
Land -- 2,768 -- 2,768 -- 40 December, 1994 1979 &
Buildings 8,304 228 8,532 1,082 1992
Plaza Acadienne
Eunice, LA
Land -- -- -- -- -- 40 December, 1994 1980
Buildings 2,918 99 3,017 394
Plaza North(1)
Hendersonville, NC
Land -- 658 -- 658 -- 40 August, 1992 1986
Buildings 1,796 50 1,846 338
Powers Ferry Plaza
Marietta, GA
Land -- 1,725 (9) 1,716 -- 40 May, 1997 1979&
Buildings 5,785 467 6,252 346 1983
</TABLE>
62
<PAGE> 63
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands, except useful lives)
<TABLE>
<CAPTION>
Estimated
Costs Gross Amount Accumulated Useful
Initial Capitalized at Which Depreciation Life of
Cost to Subsequent to Carried at at Close Buildings Date Year
Description Encumbrances Company Acquisition Close of Year of Year (Years) Acquired Completed
----------- ------------ ------- ------------- ------------- ------------ ---------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Providence Square(1)
Charlotte, NC
Land $ -- $ 450 $ -- $ 450 $ -- 35 December, 1971 1973
Buildings 1,896 2,266 4,162 3,140
Riverside Square(1)
Coral Springs, FL
Land 8,725 5,893 -- 5,893 -- 40 August, 1998 1998
Buildings 7,131 161 7,292 253
Riverview Shopping
Center(1)
Durham, NC
Land -- 400 -- 400 -- 35 March, 1972 1973 &
Buildings 1,823 4,617 6,440 2,619 1994
Salisbury Marketplace(1)
Salisbury, NC
Land -- 734 -- 734 -- 40 August, 1996 1987
Buildings 3,878 57 3,935 330
Scottsville Square
Bowling Green, KY
Land -- 653 1 654 -- 20 August, 1992 1986
Buildings 1,782 158 1,940 542
Seven Hills
Spring Hill, FL
Land -- 1,903 -- 1,903 -- 40 July, 1993 1991
Buildings 2,977 35 3,012 503
Shelby Plaza(1)
Shelby, NC
Land -- -- -- -- -- 21 April, 1986 1972
Buildings 937 745 1,682 832
Sherwood South
Baton Rouge, LA
Land -- 496 -- 496 -- 40 December, 1994 1972, 1988
Buildings 1,489 290 1,779 248 & 1992
Shoppes at Lago Mar
Miami, FL
Land 5,655 3,170 -- 3,170 -- 40 February, 1999 1995
Buildings 6,746 -- 6,746 138
Shoppes of Silverlakes
Pembroke Pines, FL
Land 3,292 4,043 -- 4,043 -- 40 November, 1997 1995 &
Buildings 12,826 72 12,898 681 1996
Siegen Village
Baton Rouge, LA
Land 4,692 2,375 (325) 2,050 -- 40 December, 1994 1988 &
Buildings 6,952 441 7,393 751 1996
Smyrna Village(1)
Smyrna, TN
Land -- 968 21 989 -- 40 August, 1992 1992
Buildings 4,744 181 4,925 920
</TABLE>
63
<PAGE> 64
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands, except useful lives)
<TABLE>
<CAPTION>
Estimated
Costs Gross Amount Accumulated Useful
Initial Capitalized at Which Depreciation Life of
Cost to Subsequent to Carried at at Close Buildings Date Year
Description Encumbrances Company Acquisition Close of Year of Year (Years) Acquired Completed
----------- ------------ ------- ------------- ------------- ------------ --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Smyth Valley Crossing
Marion, VA
Land $ -- $ 1,693 $ 7 $ 1,700 $ -- 40 December, 1992 1989
Buildings 5,231 182 5,413 1,009
South Beach Regional
Jacksonville Beach, FL
Land -- 3,958 20 3,978 -- 40 August, 1992 1990 &
Buildings 17,130 1,038 18,168 3,519 1991
Spalding Village
Griffin, GA
Land 11,377 2,814 3 2,817 -- 40 August, 1992 1989
Buildings 12,470 221 12,691 2,401
Spring Valley
Columbia, SC
Land -- 1,382 -- 1,382 -- 40 March, 1998 1998
Buildings 4,722 -- 4,722 216
Stadium Plaza
Phenix City, AL
Land -- 1,829 2 1,831 -- 40 August, 1992 1988
Buildings 2,614 89 2,703 504
Stanley Market Place(1)
Stanley, NC
Land -- 198 -- 198 -- 35 January, 1992 1980 &
Buildings 1,603 66 1,669 339 1991
Tamarac Town Square(1)
Tamarac, FL
Land 6,974 4,637 -- 4,637 -- 40 August, 1998 1998
Buildings 6,015 118 6,133 213
Tarpon Heights
Galliano, LA
Land -- 706 -- 706 -- 40 January, 1995 1982
Buildings 2,117 15 2,132 270
Thomasville Commons
Thomasville, NC
Land 5,360 963 -- 963 -- 40 August, 1992 1991
Buildings 6,183 96 6,279 1,185
Town & Country
Kissimmee, FL
Land 2,142 1,065 -- 1,065 -- 40 January, 1998 1998
Buildings 3,200 23 3,223 160
Treasure Coast(1)
Vero Beach, FL
Land 5,697 2,471 -- 2,471 -- 40 May, 1998 1998
Buildings 8,622 215 8,837 303
</TABLE>
64
<PAGE> 65
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands, except useful lives)
<TABLE>
<CAPTION>
Estimated
Costs Gross Amount Accumulated Useful
Initial Capitalized at Which Depreciation Life of
Cost to Subsequent to Carried at at Close Buildings Date Year
Description Encumbrances Company Acquisition Close of Year of Year (Years) Acquired Completed
----------- ------------ ------- ------------- ------------- ------------ --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Venice Plaza
Venice, FL
Land $ -- $ 333 $ -- $ 333 $ -- 27 June, 1979 1971 &
Buildings 1,973 1,194 3,167 1,980 1979
Village At Northshore
Slidell, LA
Land 5,068 2,066 -- 2,066 -- 40 December, 1994 1988 &
Buildings 6,197 76 6,273 802 1993
Walton Plaza
Augusta, GA
Land -- 598 -- 598 -- 40 August 1998 1991
Buildings 2,561 2 2,563 171
Waterlick Plaza
Lynchburg, VA
Land -- 1,071 -- 1,071 -- 40 October, 1989 1973 &
Buildings 5,091 221 5,312 1,422 1988
Watson Central
Warner Robins, GA
Land -- 1,646 12 1,658 -- 40 December, 1992 & 1989 &
Buildings 11,317 181 11,498 1,992 October, 1993 1993
Wesley Chapel Crossing
Decatur, GA
Land 3,704 3,829 9 3,838 -- 40 December, 1992 1989
Buildings 7,032 252 7,284 1,271
West Gate Plaza
Mobile, AL
Land -- 475 -- 475 -- 25 June, 1974 & 1974 &
Buildings 3,782 593 4,375 1,355 January, 1985 1995
West Towne Square
Rome, GA
Land -- 325 -- 325 -- 40 March, 1990 1988
Buildings 5,581 154 5,735 1,457
Westgate Square
Sunrise, FL
Land -- 2,229 -- 2,229 -- 40 June, 1994 1984 &
Buildings 6,850 400 7,250 1,039 1988
Williamsburg At Dunwoody(1)
Dunwoody, GA
Land -- 1,638 -- 1,638 -- 40 March 1999 1983
Buildings 3,964 26 3,990 78
Willowdaile Shopping
CENTER (1)
Durham, NC
Land -- 937 (70) 867 -- 40 August, 1986 & 1986
Buildings 7,352 653 8,005 2,515 December, 1987
Industrial Buildings
Charlotte, NC -
Industrial
Land -- 143 183 326 -- 14 June, 1979 1956 &
Buildings 2,170 1,304 3,474 2,968 1963
</TABLE>
65
<PAGE> 66
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands, except useful lives)
<TABLE>
<CAPTION>
Estimated
Costs Gross Amount Accumulated Useful
Initial Capitalized at Which Depreciation Life of
Cost to Subsequent to Carried at at Close Buildings Date Year
Description Encumbrances Company Acquisition Close of Year of Year (Years) Acquired Completed
----------- ------------ ------- ----------- ------------- ------------ --------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence County
Shopping Center
Sybene, OH
Land $ -- $ 436 $ -- $ 436 $ -- May, 1971 1971
Grand Marche
Shopping Center
Lafayette, LA
Land -- 250 -- 250 -- September, 1972 1969
-------- -------- ------- -------- -------
$122,164 $597,666 $32,339 $630,005 $86,170
======== ======== ======= ======== =======
</TABLE>
(1) Ownership through IRT Partners L.P.
66
<PAGE> 67
IRT PROPERTY COMPANY SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
(In thousands)
NOTE: Real estate activity is summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
RENTAL PROPERTIES:
Cost -
Balance at beginning of year $ 622,117 $ 537,160 $ 463,393
Acquisitions and improvements 20,456 90,036 81,755
Retirements -- -- (663)
Reduction in carrying value -- -- --
--------- --------- ---------
642,573 627,196 544,485
Cost of properties sold (12,568) (5,079) (7,325)
--------- --------- ---------
Balance at end of year $ 630,005 $ 622,117 $ 537,160
========= ========= =========
Accumulated depreciation -
Balance at beginning of year $ 74,943 $ 62,527 $ 56,882
Depreciation 13,869 12,925 11,453
Retirements -- -- (663)
--------- --------- ---------
88,812 75,452 67,672
Accumulated depreciation related to
rental properties sold (2,642) (509) (5,145)
--------- --------- ---------
Balance at end of year $ 86,170 $ 74,943 $ 62,527
========= ========= =========
</TABLE>
67
<PAGE> 68
IRT PROPERTY COMPANY SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
December 31, 1999
(In thousands)
<TABLE>
<CAPTION>
Face Amount
Final Periodic and Carrying
Type of Type of Interest Maturity Payment Amount of
Location of Property Loan Property Rate Date Terms Mortgages
- -------------------- ---- -------- ---- ---- ----- ---------
(See Note) (See Note)
<S> <C> <C> <C> <C> <C> <C>
Lauderdale Lakes, FL First Mortgage Condominiums 10.00% May, 2009 (1) $ 108
Nashville, TN First Mortgage Condominiums 8.63% - 2006-2007 (1) 21
Participation 12.38% ------
129
Less interest discounts and negative goodwill (37)
------
$ 92
======
</TABLE>
Note:
(1) Monthly payments include principal and interest.
Mortgage loan activity is summarized as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $ 1,097 $ 9,321 $ 13,183
New mortgage loans 365 -- --
Amortization of interest discounts and negative
goodwill 4 160 41
Collections of principal (1,374) (8,384) (3,903)
------- ------- --------
Balance at end of year $ 92 $ 1,097 $ 9,321
======= ======= ========
</TABLE>
68
<PAGE> 69
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
None.
69
<PAGE> 70
PART III
The information called for by Part III (Items 10, 11, 12, and 13) is
incorporated herein by reference to the Company's definitive proxy statement
for the Company's 2000 Annual Meeting of Shareholders of the Company, to be
filed pursuant to Regulation 14A, pursuant to General Instruction G(3) to the
Report on Form 10-K.
70
<PAGE> 71
PART IV
ITEM 14.
Exhibits, Financial Statement Schedules and Reports on Form 8-K
Financial Statements and Schedules.
Included in Part II of this Report are the following:
Report of Independent Public Accountants
Consolidated Balance Sheets at December 31, 1999 and 1998
Consolidated Statements of Earnings for the Years Ended
December 31, 1999, 1998 and 1997
Consolidated Statements of Changes in Shareholders' Equity
for the Years Ended December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
Schedule III - Real Estate and Accumulated Depreciation
Schedule IV - Mortgage Loans on Real Estate
EXHIBITS
3.1 The Company's Amended and Restated Articles of Incorporation
were filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1997, which is
incorporated by reference herein.
3.2 The Company's By-Laws, as amended, were filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995, which is incorporated by
reference herein.
3.2.1 Amendments to By-laws of IRT Property Company filed as an
exhibit to the Company's report on Form 8-K dated August 21,
1998, which is incorporated by reference herein.
4.1 The Indenture dated August 15, 1993 between the Company and
Trust Company Bank, as Trustee, relating to the 7.3%
Convertible Subordinated Debentures due August 15, 2003 was
filed as an exhibit to the Company's Form 10-K for the year
71
<PAGE> 72
ended December 31, 1993, which is incorporated by reference
herein.
4.2 The form of 7.3% Convertible Subordinated Debenture was
included in 4.1 above.
4.3 The Indentures dated as of November 9, 1995 between the
Company and SunTrust Bank, Atlanta, as Trustee, relating to
Senior Debt Securities and Subordinated Debt Securities were
filed as an exhibit to the Company's Form 10-K for the year
ended December 31, 1995, which is incorporated by reference
herein.
4.4 First Supplemental Indenture dated as of March 26, 1996
between IRT Property Company and SunTrust Bank, Atlanta was
filed as an exhibit to the Company's Form 8-K dated March 26,
1996, which is incorporated by reference herein.
4.5 Supplemental Indenture No. 2, dated August 15, 1997, between
IRT Property Company and SunTrust Bank, Atlanta was filed as
an exhibit to the Company's Form 8-K dated August 15, 1997,
which is incorporated by reference herein.
4.6 Supplemental Indenture No. 3, dated September 9, 1998,
between IRT Property Company and SunTrust Bank, Atlanta was
filed as an exhibit to the Company's Form 8-K dated September
15, 1998, which is incorporated by reference herein.
4.7 IRT Property Company Stock Certificate Legend Regarding
Shareholder Rights Agreement which was filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999, which is incorporated by reference
herein.
4.8 Supplemental Indenture No. 2, dated as of November 1, 1999,
among IRT Property Company, an issuer, IRT Capital
Corporation II, IRT Management Company, IRT Alabama, Inc.,
and IRT Partners L.P., as guarantors, and SunTrust Bank,
Atlanta, as trustee (Registration Statement No. 333-48571),
incorporated by reference to Exhibit No. 4.5 of the Company's
report on Form 8-K dated November 12, 1999.
4.9 Supplemental Indenture No. 4, dated as of November 1, 1999,
among IRT Property Company, an issuer, IRT Capital
Corporation II, IRT Management Company, IRT Alabama, Inc.,
and IRT Partners L.P., as guarantors, and SunTrust Bank,
Atlanta, as trustee (Registration Statement No. 333-48571),
incorporated by reference to Exhibit No. 4.7 of the Company's
report on Form 8-K dated November 12, 1999.
10.1 The Company's 1989 Stock Option Plan was filed as an exhibit
to the Company's Form 8-K dated March 22, 1989, which is
incorporated by reference herein.
10.2 Amendment No. 1 to the Company's 1989 Stock Option Plan was
filed as an exhibit to the Company's Form 10-K for the year
ended December 31, 1993, which is incorporated by reference
herein.
10.3 The Company's Key Employee Stock Option Plan was filed as an
exhibit to the Company's Registration Statement on Form S-2
(No. 2-88716) dated January 4,
72
<PAGE> 73
1984, which is incorporated by reference herein.
10.4 IRT Property Company Long-Term Incentive Plan was filed in
the Company's Definitive Proxy Statement dated May 22, 1998,
which is incorporated by reference herein.
10.5 The Company's Deferred Compensation Plan for Outside
Directors dated December 22, 1995 was filed as an exhibit to
the Company's Form 10-K for the year ended December 31, 1995,
which is incorporated by reference herein.
10.6 Amended and Restated Employment Agreement between the Company
and Thomas H. McAuley dated as of November 11, 1997 was filed
as an exhibit to the Company's Form 10-K for the year ended
December 31, 1997, which is incorporated by reference herein.
10.7 Change in Control Employment Agreement between the Company
and W. Benjamin Jones III dated as of November 11, 1997 was
filed as an exhibit to the Company's Form 10-K for the year
ended December 31, 1997, which is incorporated by reference
herein.
10.8 Change in Control Employment Agreement between the Company
and Robert E. Mitzel dated as of November 11, 1997 was filed
as an exhibit to the Company's Form 10-K for the year ended
December 31, 1997, which is incorporated by reference herein.
10.9 Agreement of Limited Partnership of IRT Partners L.P., and
Amendment No. 1 was filed as an exhibit to the Company's
report on Form 8-K dated September 15, 1998, which is
incorporated by reference herein.
10.10 Loan Agreement dated February 25, 1999 between IRT Property
Company, IRT Alabama, Inc. and General Electric Capital
Assurance Company which was filed as an exhibit to the
Company's Form 10-K for the year ended December 31, 1998.
10.11 Secured Promissory Note from W. Benjamin Jones III to IRT
Property Company dated June 18, 1998 was filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, which is incorporated by
reference herein.
10.12 Pledge Agreement by and between W. Benjamin Jones III and IRT
Property Company dated June 18, 1998 was filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, which is incorporated by
reference herein.
10.13 Restricted Stock Award Agreement by and between W. Benjamin
Jones III and IRT Property Company dated June 18, 1998 was
filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1998, which is
incorporated by reference herein.
10.14 Secured Promissory Note from Robert E. Mitzel to IRT Property
Company dated June 18, 1998 was filed as an exhibit to the
Company's Quarterly Report on Form
73
<PAGE> 74
10-Q for the quarter ended June 30, 1998, which is
incorporated by reference herein.
10.15 Pledge Agreement by and between Robert E. Mitzel and IRT
Property Company dated June 18, 1998 was filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, which is incorporated by
reference herein.
10.16 Restricted Stock Award Agreement by and between Robert E.
Mitzel and IRT Property Company dated June 18, 1998 was filed
as an exhibit to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998, which is incorporated by
reference herein.
10.17 Secured Promissory Note from Thomas H. McAuley to IRT
Property Company dated June 18, 1998 was filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, which is incorporated by
reference herein.
10.18 Pledge Agreement by and between Thomas H. McAuley and IRT
Property Company dated June 18, 1998 was filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, which is incorporated by
reference herein.
10.19 Restricted Stock Award Agreement by and between Thomas H.
McAuley and IRT Property Company dated June 18, 1998 was
filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1998, which is
incorporated by reference herein.
10.20 $100,000,000 Credit Agreement dated as of November 1, 1999,
among the Company, Wachovia Bank, N.A., First Union National
Bank, Wachovia Securities, Inc., AmSouth Bank, SouthTrust
Bank, N.A., and SunTrust Bank, Atlanta incorporated by
reference to Exhibit No. 10.12 of the Company's report on
Form 8-K dated November 12, 1999.
10.21 $5,000,000 Revolving Loan Credit Agreement dated as of
November 1, 1999, among the Company and Wachovia Bank, N.A.,
incorporated by reference to Exhibit No. 10.13 of the
Company's report on Form 8-K dated November 12, 1999.
10.22 Change in Control Agreement between the Company and James G.
Levy dated as of August 1, 1999 which was filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999, which is incorporated by reference
herein.
10.23 Change in Control Agreement between the Company and Daniel F.
Lovett dated August 1, 1999 which was filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999, which is incorporated by reference
herein.
10.24 First Amendment to the Restricted Stock Award Agreement and
Pledge Agreement and Secured Promissory Note between Thomas
H. McAuley and IRT Property Company dated December 17, 1999.
10.25 First Amendment to the Restricted Stock Award Agreement
and Pledge Agreement and Secured Promissory Note between
W. Benjamin Jones III and IRT Property Company dated
December 17, 1999.
10.26 First Amendment to the Restricted Stock Award Ageement
and Pledge Agreement and Secured Promissory Note between
Robert E. Mitzel and IRT Property Company dated
December 17, 1999.
10.27 Restricted Stock Award Agreement between James G. Levy and
IRT Property Company dated January 7, 2000.
10.28 Restricted Stock Award Agreement between Kip R. Marshall and
IRT Property Company dated January 7, 2000.
10.29 Restricted Stock Award Agreement between Daniel F. Lovett and
IRT Property Company dated January 7, 2000.
10.30 Restricted Stock Award Agreement between E. Thornton Anderson
and IRT Property Company dated January 7, 2000.
10.31 Change in Control Agreement between E. Thornton Anderson and
IRT Property Company dated January 1, 2000.
11. Computation of Per Share Earnings.
21. Company Subsidiaries.
23. Consent of Arthur Andersen LLP to the incorporation of their
report included in this
74
<PAGE> 75
Form 10-K in the Company's previously filed Registration
Statements File Nos. 33-65604, 33-66780, 33-59938, 33-64628,
33-64741, 33-63523, 333-62435, and 333-38847.
27. Financial Data Schedule (for SEC use only)
99. Audited Financial statements of IRT Partners L.P. as of and
for the period from inception (July 15, 1998) through
December 31, 1999.
REPORTS ON FORM 8-K.
(i.) A current report on Form 8-K was filed with the commission on
November 12, 1999, in connection with the following items:
- $100,000,000 Credit Agreement dated as of November
1, 1999, among the Company, Wachovia Bank, N.A.,
First Union National Bank, Wachovia Securities,
Inc., AmSouth Bank, SouthTrust Bank, N.A., and
SunTrust Bank, Atlanta.
- $5,000,000 Revolving Loan Credit Agreement dated as
of November 1, 1999, among the Company and Wachovia
Bank, N.A.
- Supplemental Indenture No. 2, dated as of November
1, 1999, among IRT Property Company, an issuer, IRT
Capital Corporation II, IRT Management Company, IRT
Alabama, Inc., and IRT Partners L.P., as guarantors,
and SunTrust Bank, Atlanta, as trustee (Registration
Statement No. 333-48571).
- Supplemental Indenture No. 4, dated as of November
1, 1999, among IRT Property Company, an issuer, IRT
Capital Corporation II, IRT Management Company, IRT
Alabama, Inc., and IRT Partners L.P., as guarantors,
and SunTrust Bank, Atlanta, as trustee (Registration
Statement No. 333-48571).
(ii.) A current report on Form 8-K was filed with the commission on
November 23, 1999, in connection with the announcement of the
approval by the Company's Board of Directors of a stock
repurchase plan of up to $25 million of the Company's common
stock.
75
<PAGE> 76
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
March 29, 2000 IRT PROPERTY COMPANY
By: /s/ Thomas H. McAuley
--------------------------------------
Thomas H. McAuley
President, Chief Executive
Officer, Chairman of the Board &
Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Thomas H. McAuley President, Chief March 29, 2000
- ------------------------ Executive Officer,
Thomas H. McAuley Chairman of the
Board & Director
/s/ James G. Levy Senior Vice- March 29, 2000
- ------------------------ President & Chief
James G. Levy Accounting Officer
/s/ Patrick L. Flinn Director March 29, 2000
- ------------------------
Patrick L. Flinn
/s/ Homer B. Gibbs, Jr. Director March 29, 2000
- ------------------------
Homer B. Gibbs, Jr.
/s/ Samuel W. Kendrick Director March 29, 2000
- ------------------------
Samuel W. Kendrick
/s/ Bruce A. Morrice Director March 29, 2000
- ------------------------
Bruce A. Morrice
</TABLE>
76
<PAGE> 1
EXHIBIT 10.24
PERSONAL AND CONFIDENTIAL
IRT PROPERTY COMPANY
FIRST AMENDMENT TO THE RESTRICTED STOCK
AWARD AGREEMENT AND PLEDGE AGREEMENT
AND SECURED PROMISSORY NOTE
The Restricted Stock Award Agreement (the "Award Agreement"), the
Secured Promissory Note (the "Note"), and the Pledge Agreement (the "Pledge
Agreement"), each dated June 18, 1998, by and among IRT Property Company (the
"Company") and Thomas H. McAuley (the "Executive"), are each hereby amended as
follows:
A. THE AWARD AGREEMENT
The Award Agreement is hereby amended by adding the following Paragraphs 7 and
8:
" 7. VESTING ON CHANGE OF CONTROL. Notwithstanding any other
provisions of this Agreement, upon the occurrence of a Change of Control, all
of the shares of Restricted Stock granted to the Executive under the Award
Agreement shall be vested immediately.
8. CERTAIN DEFINITIONS.
(a) Affiliated Company shall mean any corporation,
partnership, limited liability company, trust and/or other entity
controlled by, controlling or under common control with, the
Company. Unless the context clearly requires otherwise, as used
herein, the Company shall include all its Affiliated Companies.
(b) Change of Control shall mean:
(i) The acquisition by any Person of beneficial
ownership (within the meaning of SEC Rule 13d-3 under the
Exchange Act) of 25% or more of the combined voting power of (x)
all then outstanding shares of Company common stock ("Outstanding
Company Common Stock") and (y) all outstanding voting securities
of the Company entitled to vote generally in the election of
directors and all outstanding securities and/or rights to acquire
(whether by conversion, exchange or otherwise) voting securities
of the Company entitled to vote generally in the election of
directors (collectively with the Outstanding Voting Common Stock,
the "Outstanding Company Voting Securities"); provided, however,
that for purposes of this subsection 8(b)(i), the following
acquisitions shall not constitute a Change of Control: (r) any
acquisition by a Person who was on November 1, 1997 the
beneficial owner of 25% or more of the Outstanding Company Voting
Securities, (s) any acquisition by the Company, provided no
<PAGE> 2
Change in Control has previously occurred or would result
therefrom under subsections 8(b)(ii) and 8(b)(iii) of this
Agreement, (t) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
Affiliated Company, or (u) any acquisition by any Person pursuant
to a transaction which complies with clauses (x), (y) and (z) of
subsection (iii) of this Section 8(b); or
(ii) Individuals who, as of November 1, 1997, constituted
the Board (the "Incumbent Board"), cease for any reason to
constitute at least a majority of the entire Board; provided,
however, that any individual becoming a director subsequent to
November 1, 1997 whose election, or nomination for election by
the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation, a sale, liquidation or partial liquidation, or
other disposition of all or substantially all (e.g., 50% or more)
of the assets of the Company in one or a series of transactions,
and/or any combination of the foregoing (a "Business
Combination"), in each case, unless, following such Business
Combination, (x) all or substantially all of the Persons who were
the beneficial owners, respectively, of the outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially owns
(within the meaning of SEC Rule 13d-3 under the Exchange Act),
directly or indirectly, more than 60% of, respectively, the
combined voting power of the then outstanding shares of Company
Common Stock and/or the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a
result of such transaction beneficially owns (within the meaning
of SEC Rule 13d-3 under the Exchange Act) the Company or all or
substantially all (e.g., 50% or more) of the Company's assets
either directly or through one or more subsidiaries,
partnerships, limited liability companies, trusts and/or other
entities or Persons) in substantially the same proportions as
their beneficial ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (y) no
Person (excluding any corporation or other entity resulting from
such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation or entity
resulting from such Business Combination) beneficially owns
(within the meaning of SEC Rule 13d-3 under the Exchange Act),
directly or indirectly, 25% or more of the combined voting power
of the then outstanding voting securities of such corporation or
entity except to the extent that such ownership existed prior to
-2-
<PAGE> 3
the Business Combination, and (z) at least a majority of the
members of the board of directors or other governing body
(including trustees and/or general partners) of the corporation
or entity resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for
such Business Combination.
(c) Exchange Act shall mean the Securities Exchange Act
of 1934, as amended and the rules and regulations of the
Securities and Exchange Commission ("SEC") thereunder.
(d) Person shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act)."
B. THE NOTE
The following is hereby inserted as the penultimate paragraph on page 3 of the
Note:
" Upon the occurrence of a Change of Control as defined in the
Award Agreement, as amended, the entire principal amount of the Note and
all accrued and unpaid interest thereunder shall be forgiven and such
Note shall be deemed paid in full without the necessity of any payment
from the Borrower."
C. THE PLEDGE AGREEMENT
Section 12 of the Pledge Agreement is hereby amended to read in its entirety as
follows:
"Section 12. Termination. Upon payment in full of the Note, or upon a
Change of Control as defined in the Award Agreement as amended, this
Agreement shall terminate. Upon termination of this Agreement in
accordance with its terms, the Secured Party agrees to take such actions
as the Pledgor may reasonably request (a) to return the Collateral to
the Pledgor, and (b) to evidence the termination of this Agreement."
The foregoing amendments are entered into in consideration of the
continued service by Executive to the Company, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged.
-3-
<PAGE> 4
The Executive and the Company, intending to be legally bound, have
executed or caused this Agreement to be executed by the undersigned thereunto
duly authorized officer, to be effective as of December 17, 1999.
IRT PROPERTY COMPANY
By: /s/ Thomas H. McAuley
----------------------
Its President and CEO
/s/ Thomas H. McAuley
---------------------
Executive: Thomas H. McAuley
-----------------
-4-
<PAGE> 1
EXHIBIT 10.25
PERSONAL AND CONFIDENTIAL
IRT PROPERTY COMPANY
FIRST AMENDMENT TO THE RESTRICTED STOCK
AWARD AGREEMENT AND PLEDGE AGREEMENT
AND SECURED PROMISSORY NOTE
The Restricted Stock Award Agreement (the "Award Agreement"), the
Secured Promissory Note (the "Note"), and the Pledge Agreement (the "Pledge
Agreement"), each dated June 18, 1998, by and among IRT Property Company (the
"Company") and W. Benjamin Jones, III (the "Executive"), are each hereby
amended as follows:
A. THE AWARD AGREEMENT
The Award Agreement is hereby amended by adding the following Paragraphs 7 and
8:
" 7. VESTING ON CHANGE OF CONTROL. Notwithstanding any other
provisions of this Agreement, upon the occurrence of a Change of
Control, all of the shares of Restricted Stock granted to the Executive
under the Award Agreement shall be vested immediately.
8. CERTAIN DEFINITIONS.
(a) Affiliated Company shall mean any corporation,
partnership, limited liability company, trust and/or other entity
controlled by, controlling or under common control with, the Company.
Unless the context clearly requires otherwise, as used herein, the
Company shall include all its Affiliated Companies.
(b) Change of Control shall mean:
(1) The acquisition by any Person of beneficial
ownership (within the meaning of SEC Rule 13d-3 under the Exchange Act)
of 25% or more of the combined voting power of (x) all the then
outstanding shares of Company common stock ("Outstanding Company Common
Stock") and (y) all then outstanding voting securities of the Company
entitled to vote generally in the election of directors and/or all
outstanding securities and/or rights to acquire (whether by conversion,
exchange or otherwise) voting securities of the Company entitled to vote
generally in the election of directors (collectively with the
Outstanding Company Common Stock, the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection
(1), the following acquisitions shall not constitute a Change of
Control: (i) any acquisition by a Person who was on November 1, 1997 the
beneficial owner of 25% or more of the Outstanding Company Voting
Securities, (ii) any acquisition by the
<PAGE> 2
Company, provided no Change in Control has previously occurred or would
result therefrom under subsections 8(b)(2) and 8(b)(3) of this
Agreement, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Affiliated
Company, or (iv) any acquisition by any Person pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (3) of
this Section 8(b); or
(2) Individuals who, as of November 1, 1997, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to November 1, 1997 whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger or
consolidation, a sale, liquidation or partial liquidation, or other
disposition of all or substantially all (e.g., 50% or more) of the
assets of the Company in one or a series of transactions, and/or any
combination of the foregoing (a "Business Combination"), in each case,
unless, following such Business Combination, (i) all or substantially
all of the Persons who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
owns (within the meaning of SEC Rule 13d-3 under the Exchange Act),
directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the entity resulting from
such Business Combination (including, without limitation, an entity
which as a result of such transaction beneficially owns (within the
meaning of SEC Rule 13d-3 under the Exchange Act) the Company or all or
substantially all (e.g., 50% or more) of the Company's assets either
directly or through one or more subsidiaries, partnerships, limited
liability companies, trusts and/or other entities or Persons) in
substantially the same proportions as their beneficial ownership,
immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the
case may be, (ii) no Person (excluding any corporation or other entity
resulting from such Business Combination or any employee benefit plan
(or related trust) of the Company or such corporation or entity
resulting from such Business Combination) beneficially owns (within the
meaning of SEC Rule 13d-3 under the Exchange Act), directly or
indirectly, 25% or more of the combined voting power of the then
outstanding voting securities of such corporation or entity except to
the extent that such ownership existed prior to the Business
-2-
<PAGE> 3
Combination, and (iii) at least a majority of the members of the board
of directors or other governing body, including trustees and/or general
partners) of the corporation or entity resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination.
(c) Exchange Act shall mean the Securities Exchange Act
of 1934, as amended and the rules and regulations of the Securities and
Exchange Commission ("SEC") thereunder.
(d) Person shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act."
B. THE NOTE
The following is hereby inserted as the penultimate paragraph on page 3 of the
Note:
" Upon the occurrence of a Change of Control as defined in the Award
Agreement, as amended, the entire principal amount of the Note and all
accrued and unpaid interest thereunder shall be forgiven and such Note
shall be deemed paid in full without the necessity of any payment from
the Borrower."
C. THE PLEDGE AGREEMENT
Section 12 of the Pledge Agreement is hereby amended to read in its entirety as
follows:
"Section 12. Termination. Upon payment in full of the Note, or upon a
Change of Control as defined in the Award Agreement as amended, this
Agreement shall terminate. Upon termination of this Agreement in
accordance with its terms, the Secured Party agrees to take such actions
as the Pledgor may reasonably request (a) to return the Collateral to
the Pledgor, and (b) to evidence the termination of this Agreement."
The foregoing amendments are entered into in consideration of the
continued service by Executive to the Company, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged.
-3-
<PAGE> 4
The Executive and the Company, intending to be legally bound, have
executed or caused this Agreement to be executed by the undersigned thereunto
duly authorized officer, to be effective as of December 17, 1999.
IRT PROPERTY COMPANY
By: /s/ Thomas H. McAuley
-----------------------
Its President and CEO
/s/ W. Benjamin Jones, III
--------------------------
Executive: W. Benjamin Jones, III
----------------------
-4-
<PAGE> 1
EXHIBIT 10.26
PERSONAL AND CONFIDENTIAL
IRT PROPERTY COMPANY
FIRST AMENDMENT TO THE RESTRICTED STOCK
AWARD AGREEMENT AND PLEDGE AGREEMENT
AND SECURED PROMISSORY NOTE
The Restricted Stock Award Agreement (the "Award Agreement"), the
Secured Promissory Note (the "Note"), and the Pledge Agreement (the "Pledge
Agreement"), each dated June 18, 1998, by and among IRT Property Company (the
"Company") and Robert E. Mitzel (the "Executive"), are each hereby amended as
follows:
A. THE AWARD AGREEMENT
The Award Agreement is hereby amended by adding the following Paragraphs 7 and
8:
" 7. VESTING ON CHANGE OF CONTROL. Notwithstanding any other
provisions of this Agreement, upon the occurrence of a Change of
Control, all of the shares of Restricted Stock granted to the Executive
under the Award Agreement shall be vested immediately.
8. CERTAIN DEFINITIONS.
(a) Affiliated Company shall mean any corporation,
partnership, limited liability company, trust and/or other entity
controlled by, controlling or under common control with, the Company.
Unless the context clearly requires otherwise, as used herein, the
Company shall include all its Affiliated Companies.
(b) Change of Control shall mean:
(1) The acquisition by any Person of beneficial
ownership (within the meaning of SEC Rule 13d-3 under the Exchange Act)
of 25% or more of the combined voting power of (x) all the then
outstanding shares of Company common stock ("Outstanding Company Common
Stock") and (y) all then outstanding voting securities of the Company
entitled to vote generally in the election of directors and/or all
outstanding securities and/or rights to acquire (whether by conversion,
exchange or otherwise) voting securities of the Company entitled to vote
generally in the election of directors (collectively with the
Outstanding Company Common Stock, the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection
(1), the following acquisitions shall not constitute a Change of
Control: (i) any acquisition by a Person who was on November 1, 1997 the
beneficial owner of 25% or more of the Outstanding Company Voting
Securities, (ii) any acquisition by the Company, provided no Change in
Control has previously occurred or would result
<PAGE> 2
therefrom under subsections 8(b)(2) and 8(b)(3) of this Agreement, (iii)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Affiliated Company, or
(iv) any acquisition by any Person pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of this
Section 8(b); or
(2) Individuals who, as of November 1, 1997, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to November 1, 1997 whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger or
consolidation, a sale, liquidation or partial liquidation, or other
disposition of all or substantially all (e.g., 50% or more) of the
assets of the Company in one or a series of transactions, and/or any
combination of the foregoing (a "Business Combination"), in each case,
unless, following such Business Combination, (i) all or substantially
all of the Persons who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
owns (within the meaning of SEC Rule 13d-3 under the Exchange Act),
directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the entity resulting from
such Business Combination (including, without limitation, an entity
which as a result of such transaction beneficially owns (within the
meaning of SEC Rule 13d-3 under the Exchange Act) the Company or all or
substantially all (e.g., 50% or more) of the Company's assets either
directly or through one or more subsidiaries, partnerships, limited
liability companies, trusts and/or other entities or Persons) in
substantially the same proportions as their beneficial ownership,
immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the
case may be, (ii) no Person (excluding any corporation or other entity
resulting from such Business Combination or any employee benefit plan
(or related trust) of the Company or such corporation or entity
resulting from such Business Combination) beneficially owns (within the
meaning of SEC Rule 13d-3 under the Exchange Act), directly or
indirectly, 25% or more of the combined voting power of the then
outstanding voting securities of such corporation or entity except to
the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of the board
of directors
-2-
<PAGE> 3
or other governing body, including trustees and/or general partners) of
the corporation or entity resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such
Business Combination.
(c) Exchange Act shall mean the Securities Exchange Act of
1934, as amended and the rules and regulations of the Securities and
Exchange Commission ("SEC") thereunder.
(d) Person shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act."
B. THE NOTE
The following is hereby inserted as the penultimate paragraph on page 3 of the
Note:
" Upon the occurrence of a Change of Control as defined in the
Award Agreement, as amended, the entire principal amount of the Note and
all accrued and unpaid interest thereunder shall be forgiven and such
Note shall be deemed paid in full without the necessity of any payment
from the Borrower."
C. THE PLEDGE AGREEMENT
Section 12 of the Pledge Agreement is hereby amended to read in its entirety as
follows:
"Section 12. Termination. Upon payment in full of the Note, or upon a
Change of Control as defined in the Award Agreement as amended, this
Agreement shall terminate. Upon termination of this Agreement in
accordance with its terms, the Secured Party agrees to take such actions
as the Pledgor may reasonably request (a) to return the Collateral to
the Pledgor, and (b) to evidence the termination of this Agreement."
The foregoing amendments are entered into in consideration of the
continued service by Executive to the Company, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged.
-3-
<PAGE> 4
The Executive and the Company, intending to be legally bound, have
executed or caused this Agreement to be executed by the undersigned thereunto
duly authorized officer, to be effective as of December 17, 1999.
IRT PROPERTY COMPANY
By: /s/ Thomas H. McAuley
----------------------
Its President and CEO
/s/ Robert E. Mitzel
--------------------
Executive: Robert E. Mitzel
----------------
-4-
<PAGE> 1
EXHIBIT 10.27
PERSONAL AND CONFIDENTIAL
IRT PROPERTY COMPANY
RESTRICTED STOCK AWARD AGREEMENT
IRT Property Company (the "Company") hereby grants to James G. Levy
(the "Executive") 8,333 shares of the Company's $1.00 par value common stock
("Common Stock") set forth herein ("Restricted Stock") pursuant to the IRT
Property Company 1998 Long Term Incentive Plan, and the Executive hereby
accepts such grant upon such terms and conditions. Capitalized terms used but
not defined herein shall have the meanings specified in the Plan.
RESTRICTED STOCK GRANT
<TABLE>
<S> <C>
Number of shares of Restricted Stock granted: 8,333
Date of Grant: December 17, 1999
Vesting Date(s) of Restricted Stock: 926 (Shares of Restricted Stock
granted hereby shall vest on January
31 of each year commencing 2000,
with the balance vesting on January
31, 2008)
</TABLE>
Restrictions applicable to Restricted Stock:
(a) The Executive must remain in the continuous employ of the
Company or a Subsidiary of the Company until the respective vesting dates shown
above (the "Restricted Period"). For example, if on January 31, 2000 the
Executive has since the grant date been in the continuous employ of the Company
or an affiliate that is consolidated with the Company in the Company's
consolidated financial statements, 926 shares will vest and no longer be
subject to forfeiture. The foregoing notwithstanding, all shares of Restricted
Stock shall immediately vest upon the death or Disability of the Executive, as
provided in Section 7 hereof, or upon any action of the Board of Directors or
the Compensation Committee to vest such shares earlier than the scheduled
vesting date. For purposes hereof, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a full-time basis for
180 consecutive days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative.
(b) The shares of Common Stock will be issued in the name of the
Executive as Restricted Stock and the certificates representing such shares
will be held by the Company during the Restricted Period until vested.
<PAGE> 2
(c) The Executive, as beneficial owner of the Restricted Shares,
shall have full voting and dividend rights with respect to the Restricted
Shares during the Restricted Period.
(d) Certificates representing shares of Restricted Stock shall bear
the following legend:
THE SHARES ARE SUBJECT TO A RESTRICTED STOCK AWARD AGREEMENT DATED AS
OF JANUARY 7, 2000 (THE "AWARD AGREEMENT"), AND NO SHARES OR ANY
RIGHTS OR INTERESTS THEREIN MAY BE SOLD, TRANSFERRED OR DISPOSED OF
EXCEPT IN ACCORDANCE WITH THE AWARD AGREEMENT.
*******************************************************************************
The following additional terms shall apply to this Restricted Stock
Agreement:
1. TAX WITHHOLDING. Prior to the delivery of any certificate or
certificates for shares acquired upon the vesting of Restricted Stock
hereunder, the Executive must satisfy federal, state and local withholding tax
obligations by either (a) delivering to the Company shares of Common Stock, or
(b) directing the Company to withhold certain of such shares, or (c) remitting
to the Company a sufficient amount of cash to satisfy the withholding
requirements. No election to satisfy withholding under (a) or (b) shall be
effective unless approved by the Board of Directors of the Company, in its sole
discretion. If withholding is to be satisfied under either (a) or (b), the
Common Stock used for payment shall have a fair market value (as determined by
the Board) on the date of delivery or withholding, which shall be the date the
withholding tax is determined, equal to the amount of the taxes to be withheld.
Any election by the Executive to satisfy withholding under (a) or (b) must be
made in writing, signed by the Executive and delivered by the Executive prior
to the date the amount of the withholding tax is determined, and shall be
irrevocable. The portion of any withholding tax represented by a fractional
share must be paid in cash.
2. PAYMENT OF WITHHOLDING OBLIGATIONS. Prior to the delivery of
stock certificates to the Executive pursuant to vesting of shares of Restricted
Stock, the Executive shall deliver to the Company his check and/or a stock
certificate registered in the name of the Executive duly assigned to the
Company (with the assignment guaranteed by a bank, trust company, member firm
of the New York Stock Exchange ("NYSE") or other participant in a Signature
Guarantee Medallion Program), or directions for withholding of shares (as
applicable) which the Board of Directors has permitted the Executive to
transfer for satisfying federal and state withholding tax obligations.
3. TRANSFERABILITY. None of the shares of Restricted Stock granted
hereby or any interest therein are transferable or assignable prior to vesting.
Until vesting, neither the shares nor any interest therein may be sold, pledged
or transferred in any manner, nor
-2-
<PAGE> 3
will any assignee or transferee thereof be recognized as an owner by the
Company for any purpose.
4. DELIVERY OF SHARES. Certificates representing the shares of
Common Stock shall be delivered as soon as practicable after vesting of the
shares of Restricted Stock, but such delivery may be postponed for such period
as may be required for the Company with reasonable diligence to comply if
deemed advisable by the Company, with registration requirements under the 1933
Act, listing requirements under the rules of the NYSE, and requirements under
any other law or regulation applicable to the issuance or transfer of such
shares.
5. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor of the Company, in accordance with the terms of
this Restricted Stock Award Agreement.
6. MISCELLANEOUS. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
7. VESTING ON CHANGE OF CONTROL. Upon the occurrence of a Change
of Control, all of the shares of Restricted Stock granted under this Agreement
shall vest immediately.
8. CERTAIN DEFINITIONS.
(a) Affiliate Company shall mean any corporation,
partnership, limited liability company, trust and/or other entity controlled
by, controlling or under common control with, the Company. Unless the context
clearly requires otherwise, as used herein, the Company shall include all its
Affiliated Companies.
(b) Change of Control shall mean:
(1) The acquisition by any Person of beneficial
ownership (within the meaning of SEC Rule 13d-3 under the Exchange Act) of 25%
or more of the combined voting power of (x) all then outstanding shares of
Company common stock ("Outstanding Company Common Stock") and (y) all then
outstanding securities of the Company entitled to vote generally in the
election of directors and all outstanding securities and/or rights to acquire
(whether by conversion, exchange or otherwise) voting securities of the Company
entitled to vote generally in the election of directors (collectively with the
Outstanding Company Common Stock, the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (1), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition by a
Person who was on July 1, 1999 the beneficial owner of 25% or more of the
Outstanding Company Voting Securities, (ii) any acquisition by the Company,
provided no Change of Control has previously occurred or would result therefrom
under subsections 8(b)(2) and 8(b)(3) of this Agreement, (iii) any acquisition
by any employee benefit plan (or related
-3-
<PAGE> 4
trust) sponsored or maintained by the Company or any Affiliated Company, or
(iv) any acquisition by any Person pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection 8(b)(3); or
(2) Individuals who, as of July 1, 1999, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to July 1, 1999 whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger or
consolidation, a sale, liquidation or partial liquidation, or other disposition
of all or substantially all (e.g., 50% or more) of the assets of the Company in
one or a series of transactions, and/or any combination of the foregoing (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the Persons who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act), directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act) the Company or all or substantially all (e.g., 50% or more) of
the Company's assets either directly or through one or more subsidiaries,
partnerships, limited liability companies, trusts and/or other entities or
Persons) in substantially the same proportions as their beneficial ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation or other entity resulting from such
Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation or entity resulting from such Business Combination)
beneficially owns (within the meaning of SEC Rule 13d-3 under the Exchange
Act), directly or indirectly, 25% or more of the combined voting power of the
then outstanding voting securities of such corporation or entity except to the
extent that such ownership existed prior to the Business Combination, and (iii)
at least a majority of the members of the board of directors or other governing
body (including trustees and/or general partners) of the corporation or entity
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination.
-4-
<PAGE> 5
(c) Exchange Act shall mean the Securities Exchange
Act of 1934, as amended and the rules and regulations of the Securities and
Exchange Commission ("SEC") thereunder.
(d) Person shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
IN WITNESS WHEREOF, the Company has caused this Restricted Stock Award
Agreement to be executed and delivered as of the date shown below by the
undersigned officer thereunto duly authorized.
IRT PROPERTY COMPANY
By: /s/ Thomas H. McAuley
---------------------
Name: Thomas H. McAuley
Dated as of: January 7, 2000
As of the day and year first above written, I hereby accept the above
Restricted Stock grant in accordance with and subject to the terms and
conditions set forth above, and pledge all such Restricted Stock to the
Company, and I agree that any shares of Common Stock, together with all
substitutions and replacements therefore received by me hereunder will not be
sold or otherwise disposed of by me except in a manner in compliance with
applicable securities laws. I agree to notify the Company at lease five
business days in advance of any proposed sale or other disposition of any such
shares following the vesting thereof and as permitted by the Pledge Agreement.
/s/ James G. Levy
----------------------------
Executive: James G. Levy
Date: January 7, 2000
-5-
<PAGE> 1
EXHIBIT 10.28
PERSONAL AND CONFIDENTIAL
IRT PROPERTY COMPANY
RESTRICTED STOCK AWARD AGREEMENT
IRT Property Company (the "Company") hereby grants to Kip R. Marshall
(the "Executive") 5,556 shares of the Company's $1.00 par value common stock
("Common Stock") set forth herein ("Restricted Stock") pursuant to the IRT
Property Company 1998 Long Term Incentive Plan, and the Executive hereby
accepts such grant upon such terms and conditions. Capitalized terms used but
not defined herein shall have the meanings specified in the Plan.
RESTRICTED STOCK GRANT
<TABLE>
<S> <C>
Number of shares of Restricted Stock granted: 5,556
Date of Grant: December 17, 1999
Vesting Date(s) of Restricted Stock: 618 (Shares of Restricted Stock
granted hereby shall vest on January
31 of each year commencing 2000,
with the balance vesting on January
31, 2008)
</TABLE>
Restrictions applicable to Restricted Stock:
(a) The Executive must remain in the continuous employ of the
Company or a Subsidiary of the Company until the respective vesting dates shown
above (the "Restricted Period"). For example, if on January 31, 2000 the
Executive has since the grant date been in the continuous employ of the Company
or an affiliate that is consolidated with the Company in the Company's
consolidated financial statements, 618 shares will vest and no longer be
subject to forfeiture. The foregoing notwithstanding, all shares of Restricted
Stock shall immediately vest upon the death or Disability of the Executive, as
provided in Section 7 hereof, or upon any action of the Board of Directors or
the Compensation Committee to vest such shares earlier than the scheduled
vesting date. For purposes hereof, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a full-time basis for
180 consecutive days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative.
(b) The shares of Common Stock will be issued in the name of the
Executive as Restricted Stock and the certificates representing such shares
will be held by the Company during the Restricted Period until vested.
<PAGE> 2
(c) The Executive, as beneficial owner of the Restricted Shares,
shall have full voting and dividend rights with respect to the Restricted
Shares during the Restricted Period.
(d) Certificates representing shares of Restricted Stock shall bear
the following legend:
THE SHARES ARE SUBJECT TO A RESTRICTED STOCK AWARD AGREEMENT DATED AS
OF JANUARY 7, 2000 (THE "AWARD AGREEMENT"), AND NO SHARES OR ANY
RIGHTS OR INTERESTS THEREIN MAY BE SOLD, TRANSFERRED OR DISPOSED OF
EXCEPT IN ACCORDANCE WITH THE AWARD AGREEMENT.
*******************************************************************************
The following additional terms shall apply to this Restricted Stock
Agreement:
1. TAX WITHHOLDING. Prior to the delivery of any certificate or
certificates for shares acquired upon the vesting of Restricted Stock
hereunder, the Executive must satisfy federal, state and local withholding tax
obligations by either (a) delivering to the Company shares of Common Stock, or
(b) directing the Company to withhold certain of such shares, or (c) remitting
to the Company a sufficient amount of cash to satisfy the withholding
requirements. No election to satisfy withholding under (a) or (b) shall be
effective unless approved by the Board of Directors of the Company, in its sole
discretion. If withholding is to be satisfied under either (a) or (b), the
Common Stock used for payment shall have a fair market value (as determined by
the Board) on the date of delivery or withholding, which shall be the date the
withholding tax is determined, equal to the amount of the taxes to be withheld.
Any election by the Executive to satisfy withholding under (a) or (b) must be
made in writing, signed by the Executive and delivered by the Executive prior
to the date the amount of the withholding tax is determined, and shall be
irrevocable. The portion of any withholding tax represented by a fractional
share must be paid in cash.
2. PAYMENT OF WITHHOLDING OBLIGATIONS. Prior to the delivery of
stock certificates to the Executive pursuant to vesting of shares of Restricted
Stock, the Executive shall deliver to the Company his check and/or a stock
certificate registered in the name of the Executive duly assigned to the
Company (with the assignment guaranteed by a bank, trust company, member firm
of the New York Stock Exchange ("NYSE") or other participant in a Signature
Guarantee Medallion Program), or directions for withholding of shares (as
applicable) which the Board of Directors has permitted the Executive to
transfer for satisfying federal and state withholding tax obligations.
3. TRANSFERABILITY. None of the shares of Restricted Stock granted
hereby or any interest therein are transferable or assignable prior to vesting.
Until vesting, neither the shares nor any interest therein may be sold, pledged
or transferred in any manner, nor
-2-
<PAGE> 3
will any assignee or transferee thereof be recognized as an owner by the
Company for any purpose.
4. DELIVERY OF SHARES. Certificates representing the shares of
Common Stock shall be delivered as soon as practicable after vesting of the
shares of Restricted Stock, but such delivery may be postponed for such period
as may be required for the Company with reasonable diligence to comply if
deemed advisable by the Company, with registration requirements under the 1933
Act, listing requirements under the rules of the NYSE, and requirements under
any other law or regulation applicable to the issuance or transfer of such
shares.
5. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor of the Company, in accordance with the terms of
this Restricted Stock Award Agreement.
6. MISCELLANEOUS. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
7. VESTING ON CHANGE OF CONTROL. Upon the occurrence of a Change
of Control, all of the shares of Restricted Stock granted under this Agreement
shall vest immediately.
8. CERTAIN DEFINITIONS.
(a) Affiliate Company shall mean any corporation,
partnership, limited liability company, trust and/or other entity controlled
by, controlling or under common control with, the Company. Unless the context
clearly requires otherwise, as used herein, the Company shall include all its
Affiliated Companies.
(b) Change of Control shall mean:
(1) The acquisition by any Person of beneficial
ownership (within the meaning of SEC Rule 13d-3 under the Exchange Act) of 25%
or more of the combined voting power of (x) all then outstanding shares of
Company common stock ("Outstanding Company Common Stock") and (y) all then
outstanding securities of the Company entitled to vote generally in the
election of directors and all outstanding securities and/or rights to acquire
(whether by conversion, exchange or otherwise) voting securities of the Company
entitled to vote generally in the election of directors (collectively with the
Outstanding Company Common Stock, the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (1), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition by a
Person who was on July 1, 1999 the beneficial owner of 25% or more of the
Outstanding Company Voting Securities, (ii) any acquisition by the Company,
provided no Change of Control has previously occurred or would result therefrom
under subsections 8(b)(2) and 8(b)(3) of this Agreement, (iii) any acquisition
by any employee benefit plan (or related
-3-
<PAGE> 4
trust) sponsored or maintained by the Company or any Affiliated Company, or
(iv) any acquisition by any Person pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection 8(b)(3); or
(2) Individuals who, as of July 1, 1999, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to July 1, 1999 whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger or
consolidation, a sale, liquidation or partial liquidation, or other disposition
of all or substantially all (e.g., 50% or more) of the assets of the Company in
one or a series of transactions, and/or any combination of the foregoing (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the Persons who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act), directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act) the Company or all or substantially all (e.g., 50% or more) of
the Company's assets either directly or through one or more subsidiaries,
partnerships, limited liability companies, trusts and/or other entities or
Persons) in substantially the same proportions as their beneficial ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation or other entity resulting from such
Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation or entity resulting from such Business Combination)
beneficially owns (within the meaning of SEC Rule 13d-3 under the Exchange
Act), directly or indirectly, 25% or more of the combined voting power of the
then outstanding voting securities of such corporation or entity except to the
extent that such ownership existed prior to the Business Combination, and (iii)
at least a majority of the members of the board of directors or other governing
body (including trustees and/or general partners) of the corporation or entity
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination.
-4-
<PAGE> 5
(c) Exchange Act shall mean the Securities Exchange
Act of 1934, as amended and the rules and regulations of the Securities and
Exchange Commission ("SEC") thereunder.
(d) Person shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
IN WITNESS WHEREOF, the Company has caused this Restricted Stock Award
Agreement to be executed and delivered as of the date shown below by the
undersigned officer thereunto duly authorized.
IRT PROPERTY COMPANY
By: /s/ Thomas H. McAuley
----------------------
Name: Thomas H. McAuley
Dated as of: January 7, 2000
As of the day and year first above written, I hereby accept the above
Restricted Stock grant in accordance with and subject to the terms and
conditions set forth above, and pledge all such Restricted Stock to the
Company, and I agree that any shares of Common Stock, together with all
substitutions and replacements therefore received by me hereunder will not be
sold or otherwise disposed of by me except in a manner in compliance with
applicable securities laws. I agree to notify the Company at lease five
business days in advance of any proposed sale or other disposition of any such
shares following the vesting thereof and as permitted by the Pledge Agreement.
/s/ Kip R. Marshall
-------------------------------
Executive: Kip R. Marshall
Date: January 7, 2000
-5-
<PAGE> 1
EXHIBIT 10.29
PERSONAL AND CONFIDENTIAL
IRT PROPERTY COMPANY
RESTRICTED STOCK AWARD AGREEMENT
IRT Property Company (the "Company") hereby grants to Daniel F. Lovett
(the "Executive") 5,556 shares of the Company's $1.00 par value common stock
("Common Stock") set forth herein ("Restricted Stock") pursuant to the IRT
Property Company 1998 Long Term Incentive Plan, and the Executive hereby
accepts such grant upon such terms and conditions. Capitalized terms used but
not defined herein shall have the meanings specified in the Plan.
RESTRICTED STOCK GRANT
<TABLE>
<S> <C>
Number of shares of Restricted Stock granted: 5,556
Date of Grant: December 17, 1999
Vesting Date(s) of Restricted Stock: 618 (Shares of Restricted Stock
granted hereby shall vest on January
31 of each year commencing 2000,
with the balance vesting on January
31, 2008)
</TABLE>
Restrictions applicable to Restricted Stock:
(a) The Executive must remain in the continuous employ of the
Company or a Subsidiary of the Company until the respective vesting dates shown
above (the "Restricted Period"). For example, if on January 31, 2000 the
Executive has since the grant date been in the continuous employ of the Company
or an affiliate that is consolidated with the Company in the Company's
consolidated financial statements, 618 shares will vest and no longer be
subject to forfeiture. The foregoing notwithstanding, all shares of Restricted
Stock shall immediately vest upon the death or Disability of the Executive, as
provided in Section 7 hereof, or upon any action of the Board of Directors or
the Compensation Committee to vest such shares earlier than the scheduled
vesting date. For purposes hereof, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a full-time basis for
180 consecutive days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative.
(b) The shares of Common Stock will be issued in the name of the
Executive as Restricted Stock and the certificates representing such shares
will be held by the Company during the Restricted Period until vested.
<PAGE> 2
(c) The Executive, as beneficial owner of the Restricted Shares,
shall have full voting and dividend rights with respect to the Restricted
Shares during the Restricted Period.
(d) Certificates representing shares of Restricted Stock shall bear
the following legend:
THE SHARES ARE SUBJECT TO A RESTRICTED STOCK AWARD AGREEMENT DATED AS
OF JANUARY 7, 2000 (THE "AWARD AGREEMENT"), AND NO SHARES OR ANY
RIGHTS OR INTERESTS THEREIN MAY BE SOLD, TRANSFERRED OR DISPOSED OF
EXCEPT IN ACCORDANCE WITH THE AWARD AGREEMENT.
*******************************************************************************
The following additional terms shall apply to this Restricted Stock
Agreement:
1. TAX WITHHOLDING. Prior to the delivery of any certificate or
certificates for shares acquired upon the vesting of Restricted Stock
hereunder, the Executive must satisfy federal, state and local withholding tax
obligations by either (a) delivering to the Company shares of Common Stock, or
(b) directing the Company to withhold certain of such shares, or (c) remitting
to the Company a sufficient amount of cash to satisfy the withholding
requirements. No election to satisfy withholding under (a) or (b) shall be
effective unless approved by the Board of Directors of the Company, in its sole
discretion. If withholding is to be satisfied under either (a) or (b), the
Common Stock used for payment shall have a fair market value (as determined by
the Board) on the date of delivery or withholding, which shall be the date the
withholding tax is determined, equal to the amount of the taxes to be withheld.
Any election by the Executive to satisfy withholding under (a) or (b) must be
made in writing, signed by the Executive and delivered by the Executive prior
to the date the amount of the withholding tax is determined, and shall be
irrevocable. The portion of any withholding tax represented by a fractional
share must be paid in cash.
2. PAYMENT OF WITHHOLDING OBLIGATIONS. Prior to the delivery of
stock certificates to the Executive pursuant to vesting of shares of Restricted
Stock, the Executive shall deliver to the Company his check and/or a stock
certificate registered in the name of the Executive duly assigned to the
Company (with the assignment guaranteed by a bank, trust company, member firm
of the New York Stock Exchange ("NYSE") or other participant in a Signature
Guarantee Medallion Program), or directions for withholding of shares (as
applicable) which the Board of Directors has permitted the Executive to
transfer for satisfying federal and state withholding tax obligations.
3. TRANSFERABILITY. None of the shares of Restricted Stock granted
hereby or any interest therein are transferable or assignable prior to vesting.
Until vesting, neither the shares nor any interest therein may be sold, pledged
or transferred in any manner, nor
-2-
<PAGE> 3
will any assignee or transferee thereof be recognized as an owner by the
Company for any purpose.
4. DELIVERY OF SHARES. Certificates representing the shares of
Common Stock shall be delivered as soon as practicable after vesting of the
shares of Restricted Stock, but such delivery may be postponed for such period
as may be required for the Company with reasonable diligence to comply if
deemed advisable by the Company, with registration requirements under the 1933
Act, listing requirements under the rules of the NYSE, and requirements under
any other law or regulation applicable to the issuance or transfer of such
shares.
5. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor of the Company, in accordance with the terms of
this Restricted Stock Award Agreement.
6. MISCELLANEOUS. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia.
7. VESTING ON CHANGE OF CONTROL. Upon the occurrence of a Change of
Control, all of the shares of Restricted Stock granted under this Agreement
shall vest immediately.
8. CERTAIN DEFINITIONS.
(a) Affiliate Company shall mean any corporation,
partnership, limited liability company, trust and/or other entity controlled
by, controlling or under common control with, the Company. Unless the context
clearly requires otherwise, as used herein, the Company shall include all its
Affiliated Companies.
(b) Change of Control shall mean:
(1) The acquisition by any Person of beneficial
ownership (within the meaning of SEC Rule 13d-3 under the Exchange Act) of 25%
or more of the combined voting power of (x) all then outstanding shares of
Company common stock ("Outstanding Company Common Stock") and (y) all then
outstanding securities of the Company entitled to vote generally in the
election of directors and all outstanding securities and/or rights to acquire
(whether by conversion, exchange or otherwise) voting securities of the Company
entitled to vote generally in the election of directors (collectively with the
Outstanding Company Common Stock, the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (1), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition by a
Person who was on July 1, 1999 the beneficial owner of 25% or more of the
Outstanding Company Voting Securities, (ii) any acquisition by the Company,
provided no Change of Control has previously occurred or would result therefrom
under subsections 8(b)(2) and 8(b)(3) of this Agreement, (iii) any acquisition
by any employee benefit plan (or related
-3-
<PAGE> 4
trust) sponsored or maintained by the Company or any Affiliated Company, or
(iv) any acquisition by any Person pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection 8(b)(3); or
(2) Individuals who, as of July 1, 1999, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to July 1, 1999 whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger or
consolidation, a sale, liquidation or partial liquidation, or other disposition
of all or substantially all (e.g., 50% or more) of the assets of the Company in
one or a series of transactions, and/or any combination of the foregoing (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the Persons who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act), directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act) the Company or all or substantially all (e.g., 50% or more) of
the Company's assets either directly or through one or more subsidiaries,
partnerships, limited liability companies, trusts and/or other entities or
Persons) in substantially the same proportions as their beneficial ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation or other entity resulting from such
Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation or entity resulting from such Business Combination)
beneficially owns (within the meaning of SEC Rule 13d-3 under the Exchange
Act), directly or indirectly, 25% or more of the combined voting power of the
then outstanding voting securities of such corporation or entity except to the
extent that such ownership existed prior to the Business Combination, and (iii)
at least a majority of the members of the board of directors or other governing
body (including trustees and/or general partners) of the corporation or entity
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination.
-4-
<PAGE> 5
(c) Exchange Act shall mean the Securities Exchange Act of
1934, as amended and the rules and regulations of the Securities and Exchange
Commission ("SEC") thereunder.
(d) Person shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
IN WITNESS WHEREOF, the Company has caused this Restricted Stock Award
Agreement to be executed and delivered as of the date shown below by the
undersigned officer thereunto duly authorized.
IRT PROPERTY COMPANY
By: /s/ Thomas H. McAuley
----------------------
Name: Thomas H. McAuley
Date as of: January 7, 2000
As of the day and year first above written, I hereby accept the above
Restricted Stock grant in accordance with and subject to the terms and
conditions set forth above, and pledge all such Restricted Stock to the
Company, and I agree that any shares of Common Stock, together with all
substitutions and replacements therefore received by me hereunder will not be
sold or otherwise disposed of by me except in a manner in compliance with
applicable securities laws. I agree to notify the Company at lease five
business days in advance of any proposed sale or other disposition of any such
shares following the vesting thereof and as permitted by the Pledge Agreement.
/s/ Daniel F. Lovett
---------------------------
Executive: Daniel F. Lovett
----------------
Date: January 7, 2000
-5-
<PAGE> 1
EXHIBIT 10.30
PERSONAL AND CONFIDENTIAL
IRT PROPERTY COMPANY
RESTRICTED STOCK AWARD AGREEMENT
IRT Property Company (the "Company") hereby grants to E. Thornton
Anderson (the "Executive") 5,556 shares of the Company's $1.00 par value common
stock ("Common Stock") set forth herein ("Restricted Stock") pursuant to the
IRT Property Company 1998 Long Term Incentive Plan, and the Executive hereby
accepts such grant upon such terms and conditions. Capitalized terms used but
not defined herein shall have the meanings specified in the Plan.
RESTRICTED STOCK GRANT
<TABLE>
<S> <C>
Number of shares of Restricted Stock granted: 5,556
Date of Grant: December 17, 1999
Vesting Date(s) of Restricted Stock: 618 (Shares of Restricted Stock
granted hereby shall vest on January
31 of each year commencing 2000,
with the balance vesting on January
31, 2008)
</TABLE>
Restrictions applicable to Restricted Stock:
(a) The Executive must remain in the continuous employ of the
Company or a Subsidiary of the Company until the respective vesting dates shown
above (the "Restricted Period"). For example, if on January 31, 2000 the
Executive has since the grant date been in the continuous employ of the Company
or an affiliate that is consolidated with the Company in the Company's
consolidated financial statements, 618 shares will vest and no longer be
subject to forfeiture. The foregoing notwithstanding, all shares of Restricted
Stock shall immediately vest upon the death or Disability of the Executive, as
provided in Section 7 hereof, or upon any action of the Board of Directors or
the Compensation Committee to vest such shares earlier than the scheduled
vesting date. For purposes hereof, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a full-time basis for
180 consecutive days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative.
(b) The shares of Common Stock will be issued in the name of the
Executive as Restricted Stock and the certificates representing such shares
will be held by the Company during the Restricted Period until vested.
<PAGE> 2
(c) The Executive, as beneficial owner of the Restricted Shares,
shall have full voting and dividend rights with respect to the Restricted
Shares during the Restricted Period.
(d) Certificates representing shares of Restricted Stock shall bear
the following legend:
THE SHARES ARE SUBJECT TO A RESTRICTED STOCK AWARD AGREEMENT DATED AS
OF JANUARY 7, 2000 (THE "AWARD AGREEMENT"), AND NO SHARES OR ANY
RIGHTS OR INTERESTS THEREIN MAY BE SOLD, TRANSFERRED OR DISPOSED OF
EXCEPT IN ACCORDANCE WITH THE AWARD AGREEMENT.
*******************************************************************************
The following additional terms shall apply to this Restricted Stock
Agreement:
1. TAX WITHHOLDING. Prior to the delivery of any certificate or
certificates for shares acquired upon the vesting of Restricted Stock
hereunder, the Executive must satisfy federal, state and local withholding tax
obligations by either (a) delivering to the Company shares of Common Stock, or
(b) directing the Company to withhold certain of such shares, or (c) remitting
to the Company a sufficient amount of cash to satisfy the withholding
requirements. No election to satisfy withholding under (a) or (b) shall be
effective unless approved by the Board of Directors of the Company, in its sole
discretion. If withholding is to be satisfied under either (a) or (b), the
Common Stock used for payment shall have a fair market value (as determined by
the Board) on the date of delivery or withholding, which shall be the date the
withholding tax is determined, equal to the amount of the taxes to be withheld.
Any election by the Executive to satisfy withholding under (a) or (b) must be
made in writing, signed by the Executive and delivered by the Executive prior
to the date the amount of the withholding tax is determined, and shall be
irrevocable. The portion of any withholding tax represented by a fractional
share must be paid in cash.
2. PAYMENT OF WITHHOLDING OBLIGATIONS. Prior to the delivery of
stock certificates to the Executive pursuant to vesting of shares of Restricted
Stock, the Executive shall deliver to the Company his check and/or a stock
certificate registered in the name of the Executive duly assigned to the
Company (with the assignment guaranteed by a bank, trust company, member firm
of the New York Stock Exchange ("NYSE") or other participant in a Signature
Guarantee Medallion Program), or directions for withholding of shares (as
applicable) which the Board of Directors has permitted the Executive to
transfer for satisfying federal and state withholding tax obligations.
3. TRANSFERABILITY. None of the shares of Restricted Stock granted
hereby or any interest therein are transferable or assignable prior to vesting.
Until vesting, neither the shares nor any interest therein may be sold, pledged
or transferred in any manner, nor
-2-
<PAGE> 3
will any assignee or transferee thereof be recognized as an owner by the
Company for any purpose.
4. DELIVERY OF SHARES. Certificates representing the shares of
Common Stock shall be delivered as soon as practicable after vesting of the
shares of Restricted Stock, but such delivery may be postponed for such period
as may be required for the Company with reasonable diligence to comply if
deemed advisable by the Company, with registration requirements under the 1933
Act, listing requirements under the rules of the NYSE, and requirements under
any other law or regulation applicable to the issuance or transfer of such
shares.
5. SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor of the Company, in accordance with the terms of
this Restricted Stock Award Agreement.
6. MISCELLANEOUS. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
7. VESTING ON CHANGE OF CONTROL. Upon the occurrence of a Change
of Control, all of the shares of Restricted Stock granted under this Agreement
shall vest immediately.
8. CERTAIN DEFINITIONS.
(a) Affiliate Company shall mean any corporation,
partnership, limited liability company, trust and/or other entity controlled
by, controlling or under common control with, the Company. Unless the context
clearly requires otherwise, as used herein, the Company shall include all its
Affiliated Companies.
(b) Change of Control shall mean:
(1) The acquisition by any Person of beneficial
ownership (within the meaning of SEC Rule 13d-3 under the Exchange Act) of 25%
or more of the combined voting power of (x) all then outstanding shares of
Company common stock ("Outstanding Company Common Stock") and (y) all then
outstanding securities of the Company entitled to vote generally in the
election of directors and all outstanding securities and/or rights to acquire
(whether by conversion, exchange or otherwise) voting securities of the Company
entitled to vote generally in the election of directors (collectively with the
Outstanding Company Common Stock, the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (1), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition by a
Person who was on July 1, 1999 the beneficial owner of 25% or more of the
Outstanding Company Voting Securities, (ii) any acquisition by the Company,
provided no Change of Control has previously occurred or would result therefrom
under subsections 8(b)(2) and 8(b)(3) of this Agreement, (iii) any acquisition
by any employee benefit plan (or related
-3-
<PAGE> 4
trust) sponsored or maintained by the Company or any Affiliated Company, or
(iv) any acquisition by any Person pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection 8(b)(3); or
(2) Individuals who, as of July 1, 1999, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to July 1, 1999 whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or
(3) Consummation of a reorganization, merger or
consolidation, a sale, liquidation or partial liquidation, or other disposition
of all or substantially all (e.g., 50% or more) of the assets of the Company in
one or a series of transactions, and/or any combination of the foregoing (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the Persons who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act), directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act) the Company or all or substantially all (e.g., 50% or more) of
the Company's assets either directly or through one or more subsidiaries,
partnerships, limited liability companies, trusts and/or other entities or
Persons) in substantially the same proportions as their beneficial ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation or other entity resulting from such
Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation or entity resulting from such Business Combination)
beneficially owns (within the meaning of SEC Rule 13d-3 under the Exchange
Act), directly or indirectly, 25% or more of the combined voting power of the
then outstanding voting securities of such corporation or entity except to the
extent that such ownership existed prior to the Business Combination, and (iii)
at least a majority of the members of the board of directors or other governing
body (including trustees and/or general partners) of the corporation or entity
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination.
-4-
<PAGE> 5
(c) Exchange Act shall mean the Securities Exchange Act of
1934, as amended and the rules and regulations of the Securities and Exchange
Commission ("SEC") thereunder.
(d) Person shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
IN WITNESS WHEREOF, the Company has caused this Restricted Stock Award
Agreement to be executed and delivered as of the date shown below by the
undersigned officer thereunto duly authorized.
IRT PROPERTY COMPANY
By: /s/ Thomas H. McAuley
-----------------------------
Name: Thomas H. McAuley
Date as of: January 7, 2000
As of the day and year first above written, I hereby accept the above
Restricted Stock grant in accordance with and subject to the terms and
conditions set forth above, and pledge all such Restricted Stock to the
Company, and I agree that any shares of Common Stock, together with all
substitutions and replacements therefore received by me hereunder will not be
sold or otherwise disposed of by me except in a manner in compliance with
applicable securities laws. I agree to notify the Company at lease five
business days in advance of any proposed sale or other disposition of any such
shares following the vesting thereof and as permitted by the Pledge Agreement.
/s/ E. Thornton Anderson
------------------------
Executive: E. Thornton Anderson
Date: January 7, 2000
-5-
<PAGE> 1
EXHIBIT 10.31
CHANGE IN CONTROL EMPLOYMENT AGREEMENT
THIS AGREEMENT is by and between IRT Property Company, a Georgia
corporation (herein, together with any successor or assigns to its business
and/or assets, and any person or entity that assumes and agrees to perform this
Agreement by operation of law or otherwise, the "Company") and E. Thornton
Anderson (the "Executive"), dated as of the 1st day of January, 2000.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its stockholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control
and to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of
other corporations and entities. Therefore, in order to accomplish these
objectives, the Board has authorized and caused the Company to enter into this
Agreement.
In consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by each
party hereto, the parties, intending to be legally bound, agree as follows:
1. Certain Definitions.
(a) "Affiliated Companies" shall mean any corporation,
partnership, limited liability company, trust and/or other entity controlled
by, controlling or under common control with, the Company. Unless the context
clearly requires otherwise, as used herein, the Company shall include all its
Affiliated Companies.
(b) "Change of Control Period" shall mean the period of
three years ending on the third anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof shall hereinafter be referred to as the "Renewal Date"), unless
previously terminated, the Change of Control Period shall be automatically
extended so as to terminate three years from such Renewal Date.
(c) "Disability" shall mean the absence of the Executive
from the Executive's duties with the Company on a full-time basis for 180
consecutive days as a result of incapacity due to mental or physical illness
which is determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the Executive's
legal representative.
<PAGE> 2
(d) "Effective Date" shall mean the first date during
the Change of Control Period (as defined in Section l(b)) on which a Change of
Control (as defined in Section 2) occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination of employment.
(e) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended and the rules and regulations of the Securities and
Exchange Commission ("SEC") thereunder.
(f) "Person" shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
2. Change of Control. For the purposes of this Agreement, a
"Change of Control" shall mean:
(a) The acquisition by any Person of beneficial
ownership (within the meaning of SEC Rule 13d-3 under the Exchange Act) of 25%
or more of the combined voting power of (x) all then outstanding shares of
Company common stock ("Outstanding Company Common Stock") and (y) all then
outstanding securities of the Company entitled to vote generally in the
election of directors and all outstanding securities and/or rights to acquire
(whether by conversion, exchange or otherwise) voting securities of the Company
entitled to vote generally in the election of directors (collectively with the
Outstanding Company Common Stock, the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition by a
Person who was on July 1, 1999 the beneficial owner of 25% or more of the
Outstanding Company Voting Securities, (ii) any acquisition by the Company,
provided no Change in Control has previously occurred or would result therefrom
under subsections 2(b) and 2(c) of this Agreement, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Affiliated Company, or (iv) any acquisition by any Person pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection (c)
of this Section 2; or
(b) Individuals who, as of July 1, 1999, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to July 1, 1999 whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest
- 2 -
<PAGE> 3
with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(c) Consummation of a reorganization, merger or
consolidation, a sale, liquidation or partial liquidation, or other disposition
of all or substantially all (e.g., 50% or more) of the assets of the Company in
one or a series of transactions, and/or any combination of the foregoing (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the Persons who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act), directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction beneficially owns (within the meaning of SEC Rule 13d-3 under the
Exchange Act) the Company or all or substantially all (e.g., 50% or more) of
the Company's assets either directly or through one or more subsidiaries,
partnerships, limited liability companies, trusts and/or other entities or
Persons) in substantially the same proportions as their beneficial ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation or other entity resulting from such
Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation or entity resulting from such Business Combination)
beneficially owns (within the meaning of SEC Rule 13d-3 under the Exchange
Act), directly or indirectly, 25% or more of the combined voting power of the
then outstanding voting securities of such corporation or entity except to the
extent that such ownership existed prior to the Business Combination, and (iii)
at least a majority of the members of the board of directors or other governing
body (including trustees and/or general partners) of the corporation or entity
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination.
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ as provided in Section 4 hereof, and the Executive
hereby agrees to remain in the employ of the Company subject to the terms and
conditions of this Agreement, for the period commencing on the Effective Date
and ending on the first anniversary of such date (the "Employment Period").
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the
Executive's position (including status, offices, titles and reporting
relationships), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period immediately
preceding the Effective Date, and
- 3 -
<PAGE> 4
(B) the Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or any office
or location not more than 35 miles from such location.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote full attention and time during normal business hours
to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to spend reasonable time not inconsistent with
his responsibilities to the Company to (A) serve on corporate, civic or
charitable boards or committees, (B) engage in other business activities that
do not represent a conflict of interest with his duties to the Company, and (C)
manage personal investments, so long as such activities do not interfere with
the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such activities
(or the conduct of activities similar in nature and scope thereto) subsequent
to the Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period,
the Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to 12 times the highest monthly
base salary paid or payable, including any base salary which has been earned
but deferred, to the Executive by the Company and its Affiliated Companies in
respect of the 12-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Annual Base Salary
shall be reviewed not later than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter shall be
reviewed at least annually. Any increase in Annual Base Salary shall not serve
to limit or reduce any other obligation to the Executive under this Agreement.
The Annual Base Salary shall not be reduced after any such increase and the
term Annual Base Salary as utilized in this Agreement shall refer to Annual
Base Salary as so increased.
(ii) Annual Bonus. In addition to Annual
Base Salary, the Executive shall be awarded, for each fiscal year ending during
the Employment Period, an annual bonus, excluding any payments of cash in lieu
of pension (the "Annual Bonus"), in cash at least equal to the Executive's
highest annual bonus for the last two full fiscal years prior to the Effective
Date (annualized in the event that the Executive was not employed by the
Company for the whole of such fiscal year). Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, unless the Executive
shall elect to defer the receipt of such Annual Bonus.
- 4 -
<PAGE> 5
(iii) Incentive, Savings and Retirement Plans.
During the Employment Period, the Executive shall be entitled to participate in
all incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its Affiliated
Companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to
both regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its Affiliated Companies for the
Executive under such plans, practices, policies and programs as in effect at
any time during the one-year period immediately preceding the Effective Date or
if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and its Affiliated
Companies.
(iv) Welfare Benefit Plans. During the
Employment Period (and after termination of employment, except where prohibited
by law or the applicable plan, or the generally applicable practices, policies
and programs of the Company and its Affiliated Companies and their respective
successors and assigns), the Executive and/or the Executive's family, as the
case may be, shall be eligible for participation in and shall receive all
benefits under such welfare benefit plans, practices, policies and programs
(including, without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident insurance plans
and programs) to the extent applicable generally to other peer executives of
the Company, its Affiliated Companies and their respective successors and
assigns, but in no event shall such plans, practices, policies and programs
provide the Executive and his or her family, as applicable, with benefits which
are less favorable, in the aggregate, than the most favorable of such plans,
practices, policies and programs in effect for the Executive and his or her
family, as applicable, at any time during the one year period immediately
preceding the Effective Date or, if more favorable to the Executive and his or
her family, as applicable, those provided generally at any time after the
Effective Date to other peer executives (and their families) of the Company and
its Affiliated Companies or their successors. In the event that the Executive's
and his or her family's participation in any such plan, program or other
benefit provided under the generally applicable practices, policies and
programs of the Company and its Affiliated Companies and their respective
successors and assigns are prohibited, the Company and its Affiliated Companies
and their respective successors and assigns shall provide the Executive and his
or her family, without further cost or expense to the Executive and his or her
family members, benefits similar to those which the Executive and his or her
family would otherwise have been entitled to receive under such plans,
programs, practices and policies as if the Executive's employment had not
ceased.
(v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its Affiliated Companies
in effect for the Executive at any time during the one-year period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company, the Affiliated Companies, and their respective successors and
assigns.
- 5 -
<PAGE> 6
(vi) Fringe Benefits. During the Employment
Period (but not after termination of employment, except as required by this
Agreement, law and/or the applicable plan, practices, policies and programs of
the Company and its Affiliated Companies and their respective successors and
assigns), the Executive shall be entitled to fringe benefits in accordance with
the most favorable of such plans, practices, programs and policies in effect
for the Executive at any time during the one year period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its Affiliated Companies.
5. Termination of Employment.
(a) Death or Disability. The Executive's employment
shall terminate automatically upon the Executive's death during the Employment
Period. If the Board determines in good faith that the Disability of the
Executive has occurred during the Employment Period, it may give to the
Executive written notice in accordance with Section 13(b) of this Agreement of
its intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's duties.
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the willful and continued failure of the
Executive to perform substantially the Executive's duties with the Company
and/or its Affiliated Companies (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the manner in
which the Board or Chief Executive Officer believes that the Executive has not
substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in
illegal conduct or gross misconduct which is materially and demonstrably
injurious to the Company.
For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or omitted
to be done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of the Company or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy
of a
- 6 -
<PAGE> 7
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good faith opinion of the Board, the Executive
is guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good Reason. The Executive's employment may be
terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) the assignment or proposed assignment to
the Executive of any duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting relationships),
authority, duties or responsibilities as contemplated by Section 4(a) of this
Agreement, or any other action by the Company which results in a diminution in
such position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company or any Affiliated Company promptly
after receipt of notice thereof given by the Executive;
(ii) any failure by the Company and its Affiliated
Companies to comply with any of the provisions of Section 4(b) of this
Agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company and such Affiliated
Companies promptly after receipt of notice thereof given by the Executive;
(iii) the Company or any Affiliated Company
requiring the Executive to be based at any office or location other than as
provided in Section 4(a)(i)(B) hereof or the Company's requiring the Executive
to travel on Company or any Affiliated Company's business to a substantially
greater extent than required immediately prior to the Effective Date;
(iv) any purported termination by the Company or
any Affiliated Company of the Executive's employment otherwise than as
expressly permitted by this Agreement; or
(v) any failure by the Company or any Affiliated
Company to comply with and satisfy Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of
Good Reason made by the Executive shall be conclusive. Anything in this
Agreement to the contrary notwithstanding, a termination by the Executive for
any reason during the period beginning on the Effective Date and ending 30 days
following the first anniversary of the Effective Date shall be deemed to be a
termination for Good Reason for all purposes hereunder.
(d) Notice of Termination. Any termination by the
Company for Cause, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in accordance with
Section 13(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
- 7 -
<PAGE> 8
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination
date (which date shall be not more than 30 days after the giving of such
notice). The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means
(i) if the Executive's employment is terminated by the Company and/or any
Affiliated Company for Cause, or by the Executive for Good Reason, the date of
receipt of the Notice of Termination or any later date specified therein, as
the case may be, (ii) if the Executive's employment is terminated by the
Company other than for Cause or Disability, the Date of Termination shall be
the date on which the Company and/or any Affiliated Company notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the
case may be.
6. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause, Death or
Disability. If, during the Employment Period, the Company and/or any Affiliated
Company shall terminate the Executive's employment other than for Cause or
Disability, or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in
a lump sum in cash within 30 days after the Date of Termination the aggregate
of the following amounts, or if elected by the Executive, the following
aggregate amounts shall be paid in cash to the Executive in equal monthly
installments over the one year following termination of employment:
A. the sum of (1) the Executive's
Annual Base Salary through the Date of Termination to the extent not
theretofore paid, (2) the product of (x) the average of the Annual Bonus paid
or payable, including any bonus or portion thereof which has been earned but
deferred, for the two most recently completed fiscal years during the
Employment Period, if any (such amount being referred to as the "Most Recent
Annual Bonus") and (y) a fraction, the numerator of which is the number of days
in the current fiscal year through the Date of Termination, and the denominator
of which is 365, and (3) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (1), (2), and (3) shall be hereinafter referred to
as the "Accrued Obligations");
- 8 -
<PAGE> 9
B. the amount equal to the sum of
(x) one (1) times the Executive's Annual Base Salary, and (y) one (1) times the
Most Recent Annual Bonus; and
(ii) for one year after the Executive's Date of
Termination, or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company and its Affiliated
Companies, shall continue to provide benefits to the Executive and/or the
Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described
in Section 4(b)(iv) of this Agreement if the Executive's employment had not
been terminated or, if more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer executives of the Company and
its affiliated companies and their families, provided, however, that if the
Executive becomes re-employed with another employer and is eligible to receive
medical or other welfare benefits under another employer provided plan, the
medical and other welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of eligibility.
For purposes of determining eligibility (but not the time of commencement of
benefits) of the Executive for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall be considered to have
remained employed until two years after the Date of Termination and to have
retired on the last day of such period;
(iii) to the extent not theretofore paid or
provided, the Company shall timely pay or provide to the Executive any other
amounts or benefits required to be paid or provided or which the Executive is
eligible to receive under any plan, program, policy or practice or contract or
agreement of the Company and its Affiliated Companies (such other amounts and
benefits shall be hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 6(b) shall include without limitation, and the
Executive's estate and/or beneficiaries shall be entitled to receive, benefits
at least equal to the most favorable provided by the Company and Affiliated
Companies to the estates and beneficiaries of peer executives of the Company.
(c) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination. With
respect to the provision of Other Benefits, the term Other Benefits as utilized
in this Section 6(c) shall include, and the Executive shall be entitled after
the Disability Effective Date to receive, disability and other benefits at
least equal to the most favorable such benefits provided by the Company and its
Affiliated Companies to other peer executives and their families, provided the
provision of such
- 9 -
<PAGE> 10
benefits are permissible under law, and the plans and programs of the Company
and its Affiliated Companies.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive (x) his Annual Base Salary through
the Date of Termination, (y) the amount of any compensation previously deferred
by the Executive, and (z) Other Benefits, in each case to the extent
theretofore unpaid. If the Executive voluntarily terminates employment during
the Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits. In
such case, all Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination.
7. Non-exclusivity of Rights; Disputes; etc. Nothing in this
Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its Affiliated Companies and entities and for which the Executive may
qualify, nor, subject to Section 13(f), shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its Affiliated Companies and entities.
Amounts or benefits which are vested or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of, or any
contract or agreement with, the Company or any of its Affiliated Companies at
or subsequent to the Date of Termination, shall be payable in accordance with
such plan, policy, practice, program, contract or agreement, except as
explicitly modified by this Agreement. In the event that the Company terminates
or seeks to terminate this Agreement or the employment of the Executive
hereunder and/or disputes its obligation to pay or fails or refuses to pay or
provide timely to the Executive any portion of the amounts or benefits due to
the Executive pursuant to this Agreement and the Executive prevails without
regard to amount, the Company shall pay or reimburse to the Executive all costs
incurred by him in such dispute or collection effort, including reasonable
attorneys' fees and expenses (whether or not suit is filed) and costs of
litigation.
8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. The Executive shall not be required to mitigate the amount
of any payment or benefit provided herein by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided herein be
reduced by any compensation earned by the Executive as a result of employment
by another employer or by retirement or disability benefits after the date of
termination of employment or otherwise. The Company agrees to pay as incurred,
to the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus
- 10 -
<PAGE> 11
in each case interest on any delayed payment at the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").
9. Limitation of Benefits.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any benefit, payment
or distribution by the Company to or for the benefit of the Executive (whether
payable or distributable pursuant to the terms of this Agreement or otherwise)
(a "Payment") would, if paid, be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), then the Payment shall be reduced to the
extent necessary to avoid the imposition of the Excise Tax. The Executive may
select the Payments to be limited or reduced.
(b) All determinations required to be made under this
Section 9, including whether an Excise Tax would otherwise be imposed and the
assumptions to be utilized in arriving at such determination, shall be made by
Arthur Andersen L.L.P. or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within
15 business days of the receipt of notice from the Executive that a Payment is
due to be made, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive may
appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Payments hereunder will have been unnecessarily limited by this Section 9
("Underpayment"), consistent with the calculations required to be made
hereunder. The Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
10. No Contract of Employment. Nothing in this Agreement shall be
construed as a contract or guaranty of employment between the Executive and the
Company, or as a right of the Executive to continue to be employed by the
Company.
11. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its Affiliated
Companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
Affiliated Companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal
- 11 -
<PAGE> 12
process, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 11 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement. Executive agrees that, for a period of one (1) year after
termination, he will not solicit or hire any Company employees for any business
that is in direct competition with any Company property.
- 12 -
<PAGE> 13
12. Successors.
(a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
heirs, legatees, and personal and legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company, the Affiliated Companies and their respective
successors and assigns.
(c) The Company will require any successor (whether
direct or indirect, as a result of a Business Combination, or otherwise) to all
or substantially all (e.g. 50% or more) of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.
13. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia, without reference to
conflicts of laws principles. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than-by a written agreement executed by the
parties hereto or their respective successors and legal representatives. As
used herein, the plural shall include the singular and vice versa, any
reference to gender shall include the other genders, and the term "include" and
any derivation thereof shall be without limitation by virtue of enumeration
thereof or otherwise.
(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid, or by
reliable overnight courier service addressed as follows:
If to the Executive:
E. Thornton Anderson
------------------------
------------------------
If to the Company:
IRT Property Company
200 Galleria Parkway, Suite 1400
Atlanta, Georgia 30339
Attention: President
- 13 -
<PAGE> 14
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist
upon strict compliance with any provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.
(f) The Executive and the Company acknowledge that,
except as may otherwise be provided under any other written agreement between
the Executive and the Company, the employment of the Executive by the Company
is "at will" and, subject however to subsections 1(b) and 1(d) hereof, prior to
a Change-in-Control, the Executive or the Company may terminate the Executive's
employment or this Agreement at any time prior to the Effective Date with or
without cause for any reason or for no reason at all, in which case the
Executive shall have no further rights under this Agreement. From and after the
Effective Date, this Agreement shall supersede any other agreement between the
parties with respect to the subject matter hereof.
[Signatures on following page]
- 14 -
<PAGE> 15
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the
Company has caused this Agreement to be executed in its name on its behalf by
its undersigned officer thereunto, duly authorized, all as of the day and year
first above written.
EXECUTIVE:
/s/ E. Thornton Anderson
------------------------------------
E. Thornton Anderson
COMPANY:
IRT PROPERTY COMPANY
By: /s/ Thomas H. McAuley
---------------------------------
Thomas H. McAuley
President
- 15 -
<PAGE> 1
EXHIBIT 11
<TABLE>
<CAPTION>
Computation of Per Share Earnings
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Basic:
Net earnings $28,331,000 $25,584,693 $26,112,680
=========== =========== ===========
Net earnings available to common shareholders $28,331,000 $25,584,693 $26,112,680
=========== =========== ===========
Average common shares outstanding 33,119,312 32,940,399 31,867,743
=========== =========== ===========
Basic earnings per share $ 0.86 $ 0.78 $ 0.82
=========== =========== ===========
Diluted:
Net earnings $28,331,000 $25,584,693 $26,112,680
Minority interest - OP Unitholders 683,509 261,764 --
----------- ----------- -----------
$29,014,509 $25,846,457 $26,112,680
=========== =========== ===========
Net earnings available to common shareholders $29,014,509 $25,846,457 $26,112,680
=========== =========== ===========
Dilutive stock options 248 22,607 53,469
Dilutive stock loans -- 1,806 --
Dilutive OP Units 784,480 339,776 --
Average common shares outstanding 33,119,312 32,940,399 31,867,743
----------- ----------- -----------
Average diluted common shares outstanding 33,904,040 33,304,588 31,921,212
=========== =========== ===========
Diluted earnings per share $ 0.86 $ 0.78 $ 0.82
=========== =========== ===========
</TABLE>
<PAGE> 1
EXHIBIT 21
Company Subsidiaries
<TABLE>
<CAPTION>
Jurisdiction of Year
Name Organization Incorporated
---- ------------ ------------
<S> <C> <C>
IRT Management Company Georgia 1990
VW Mall, Inc. Georgia 1994
IRT Capital Corporation Georgia 1996
IRT Alabama, Inc. Alabama 1997
IRT Partners L.P. Georgia 1998
IRT Capital Corporation II Georgia 1999
</TABLE>
All are wholly-owned subsidiaries of the Company except IRT Capital
Corporation ("IRTCC"), IRT Partners L.P. and IRT Capital Corporation II
("IRTCCII"). The Company owns 96% of the non-voting common stock and 1% of the
voting stock of each of IRTCC and IRTCCII. The Company and IRT Management
Company, collectively, own 92.9% of IRT Partners, L.P.
<PAGE> 1
EXHIBIT 23
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation
by reference of our reports dated February 11, 2000 and to all references to
our firm, included in this Form 10-K, into the Company's previously filed
Registration Statement Files Nos. 33-63523, 33-64628, 33-59938, 33-64741,
33-66780, 33-65604, 333-62435 and 333-38847.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
March 29, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF IRT PROPERTY COMPANY AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 514
<SECURITIES> 0
<RECEIVABLES> 2
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,791
<PP&E> 630,005
<DEPRECIATION> (86,170)
<TOTAL-ASSETS> 565,896
<CURRENT-LIABILITIES> 11,808
<BONDS> 290,493
0
0
<COMMON> 33,234
<OTHER-SE> 222,969
<TOTAL-LIABILITY-AND-EQUITY> 565,896
<SALES> 0
<TOTAL-REVENUES> 85,391
<CGS> 19,458
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,432
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,948
<INCOME-PRETAX> 28,488
<INCOME-TAX> 0
<INCOME-CONTINUING> 28,488
<DISCONTINUED> 0
<EXTRAORDINARY> (157)
<CHANGES> 0
<NET-INCOME> 28,331
<EPS-BASIC> 0.86
<EPS-DILUTED> 0.86
</TABLE>
<PAGE> 1
EXHIBIT 99 Financial Statements of IRT Partners L.P. for the year ended December
31, 1999 and the period from inception (July 15, 1998) to December
31, 1998
Report of Independent Public Accountants
To IRT Partners L.P.:
We have audited the accompanying balance sheets of IRT Partners L.P. (a
Georgia limited partnership) as of December 31, 1999 and 1998, and the related
statements of earnings, changes in partners' capital, and cash flows for the
year ended December 31, 1999 and the period from inception (July 15, 1998) to
December 31, 1998. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IRT Partners L.P.,
as of December 31, 1999 and 1998, and the results of its operations and its cash
flows for the year ended December 31, 1999 and the period from inception (July
15, 1998) to December 31, 1998, in conformity with accounting principles
generally accepted in the United States.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 11, 2000
<PAGE> 2
IRT PARTNERS L.P.
BALANCE SHEETS
December 31, 1999 and 1998
(In thousands, except unit data)
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
ASSETS
Rental properties $ 147,123 $ 139,936
Accumulated depreciation (20,518) (19,099)
--------- ---------
Net rental properties 126,605 120,837
Cash and cash equivalents 359 1,103
Advances to affiliate, net 8,923 --
Prepaid expenses and other assets 1,947 1,269
--------- ---------
Total assets $ 137,834 $ 123,209
========= =========
LIABILITIES & PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable, net $ 31,181 $ 25,963
Advances from affiliate, net -- 33
Accrued expenses and other liabilities 2,545 1,660
--------- ---------
Total liabilities 33,726 27,656
--------- ---------
Limited partners' capital interest (815,852 OP Units at December 31, 1999
and 779,385 OP Units at December 31, 1998) at redemption value 6,374 7,794
Commitments and contingencies (Note 5)
Partners' capital
General partner (114,613 OP Units at December 31, 1999 and
103,982 OP Units at December 31, 1998) 1,041 955
Limited partner (10,530,883 OP Units at December 31, 1999 and
9,514,844 OP Units at December 31, 1998) 96,693 86,804
--------- ---------
Total partners' capital 97,734 87,759
--------- ---------
Total liabilities and partners' capital $ 137,834 $ 123,209
========= =========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
<PAGE> 3
IRT PARTNERS L.P.
STATEMENTS OF EARNINGS
For the Year Ended December 31, 1999 and the Period from Inception
(July 15, 1998) to December 31, 1998
(In thousands)
<TABLE>
<CAPTION>
1999 1998
------- ------
<S> <C> <C>
Revenues:
Income from rental properties $19,802 $7,187
Interest income from affiliate 324 --
------- ------
Total revenues 20,126 7,187
------- ------
Expenses:
Operating expenses of rental properties 4,909 1,794
Interest on mortgages 2,418 836
Depreciation 3,350 1,281
General and administrative 788 1
------- ------
Total expenses 11,465 3,912
------- ------
Income before gain on sales of properties 8,661 3,275
Gain on sales of properties 1,130 --
------- ------
Net earnings $ 9,791 $3,275
======= ======
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 4
IRT PARTNERS L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Year Ended December 31, 1999 and the Period From
Inception (July 15, 1998) through December 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Limited
Total Partners'
General Limited Partners' Capital
Partner Partner Capital Interest
------- ------- -------- ---------
<S> <C> <C> <C> <C>
Opening balance $ -- $ -- $ -- $ --
Initial capital contributions 832 74,652 75,484 --
Issuance of units for acquisitions of rental properties -- -- -- 7,741
Cash contributions for acquisitions of rental properties 113 11,182 11,295 --
Issuance of units for cash 7 675 682 53
Distributions (30) (2,715) (2,745) (232)
Net earnings 33 2,980 3,013 262
Adjustment to reflect limited partners' capital interest at
redemption value -- 30 30 (30)
------- -------- -------- -------
Balance, December 31, 1998 955 86,804 87,759 7,794
Cash contributions for acquisitions of rental properties 92 9,169 9,261 --
Distributions (104) (9,660) (9,764) (733)
Net earnings 98 9,010 9,108 683
Adjustment to reflect limited partners' capital interest at
redemption value -- 1,370 1,370 (1,370)
------- -------- -------- -------
Balance, December 31, 1999 $ 1,041 $ 96,693 $ 97,734 $ 6,374
======= ======== ======== =======
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 5
IRT Partners L.P.
STATEMENTS OF CASH FLOWS
For the Year Ended December 31, 1999 and the Period from
Inception (July 15, 1998) to December 31, 1998
(In thousands)
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 9,791 $ 3,275
Adjustments to reconcile earnings to net cash from operating activities:
Depreciation 3,350 1,281
Gain on sales of properties (1,130) --
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses and other assets (678) 116
Increase (decrease) in accrued expenses and other liabilities 885 (544)
-------- --------
Net cash flows from operating activities 12,218 4,128
-------- --------
Cash flows used in investing activities:
Proceeds from sales of properties, net 8,867 --
Additions to real estate investments, net (11,113) (11,973)
-------- --------
Net cash flows used in investing activities (2,246) (11,973)
-------- --------
Cash flows (used in) from financing activities:
Distributions paid, net (10,497) (2,242)
Net advances (to) from affiliate (8,956) 33
Principal amortization of mortgage notes payable (524) (138)
Issuance of units for cash 9,261 11,295
-------- --------
Net cash flows (used in) from financing activities (10,716) 8,948
-------- --------
Net (decrease) increase in cash and cash equivalents (744) 1,103
Cash and cash equivalents at beginning of period 1,103 --
-------- --------
Cash and cash equivalents at end of period $ 359 $ 1,103
======== ========
Supplemental disclosures of cash flow information:
Total cash paid for interest $ 2,386 $ 663
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 6
IRT PARTNERS L.P.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Dollars in thousands)
(Unaudited with respect to square footage)
1. ORGANIZATION AND NATURE OF OPERATIONS:
IRT Partners L.P. ("LP"), a Georgia limited partnership formed
July 15, 1998, is the entity through which IRT Property Company (the
"Company"), a self-administered and self-managed real estate investment
trust ("REIT"), conducts a portion of its business and owns (either
directly or through subsidiaries) a portion of its assets.
The Company is the sole general partner of LP and maintains an
indirect partnership interest through its wholly-owned subsidiary, IRT
Management Company. The Company initially contributed 20 shopping
centers, related assets and cash to LP in exchange for 8,486,217
limited partnership units ("OP Units"). The Company was issued
additional OP Units in exchange for cash contributions to fund further
acquisition activity. Since the formation of LP, the Company has
contributed cash to acquire four shopping centers, and LP has divested
three shopping centers. At December 31, 1999, the Company owns
approximately 92.9% of LP.
LP was formed by the Company in order to enhance the Company's
acquisition opportunities by offering potential sellers the ability to
engage in tax deferred sales of properties in exchange for OP Units. In
August 1998, certain unaffiliated persons contributed their interests
in three Florida shopping centers in exchange for a total of 815,852 OP
Units.
LP is obligated to redeem each OP Unit held by a person other
than the Company, at the request of the holder, for cash equal to the
fair market value of a share of the Company's common stock at the time
of such redemption, provided that the Company may elect to acquire any
such OP Unit presented for redemption for one common share or cash.
Such limited partnership interest held by persons unaffiliated with the
Company is reflected as "Limited Partners' Capital Interest" in the
accompanying balance sheets at the cash redemption amount on the
balance sheet dates.
Federal income tax laws require the Company, as a REIT, to
distribute 95% of its ordinary taxable income. LP makes quarterly
distributions to holders of OP Units to enable the Company to satisfy
this requirement.
At December 31, 1999, LP owns 24 neighborhood and community
shopping centers located in Florida, Tennessee, Georgia and North
Carolina. The shopping centers are anchored by necessity-oriented
retailers such as supermarkets, drug stores and/or discount variety
stores.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Income Recognition
LP follows the policy of suspending the accrual of income on
any investments where interest or rental payments are delinquent 60
days or more. Percentage rental income is recorded upon collection.
Depreciation
LP records depreciation on buildings and other improvements on
the straight-line basis over their estimated useful lives. Such lives
range from 16 to 40 years for buildings and are six years for
improvements. Maintenance and repairs are charged to expense as
incurred, while significant improvements are capitalized.
<PAGE> 7
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Cash Equivalents
LP considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
Recent Accounting Pronouncements
In 1998 LP adopted Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income." SFAS No. 130
established standards for reporting and disclosing comprehensive income
(defined as revenues, expenses, gains and losses that under generally
accepted accounting principles are not included in net income) and its
components. At December 31, 1999 and 1998, LP had no items of other
comprehensive income.
In 1998 LP adopted SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information." SFAS No. 131 established
standards for reporting financial and descriptive information about
operating segments in annual financial statements. Operating segments
are defined as components of an enterprise for which separate financial
information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in
assessing performance. LP's chief operating decision maker is its
senior management group.
LP owns and operates retail shopping centers in four states in
the southeast. Such shopping centers generate rental and other revenue
through the leasing of shop spaces to a diverse base of tenants. LP
evaluates the performance of each of its shopping centers on an
individual basis. However, as each of the shopping centers has similar
economic characteristics and tenants, the shopping centers have been
aggregated into one reportable segment.
In June 1998 SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" was issued establishing accounting
and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts)
be recorded in the balance sheet as either an asset or liability
measured at its fair market value. SFAS No. 133 requires that changes
in the derivative's fair market value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses
to offset related results on the hedged item in the income statement
and requires that a company must formally document, designate, and
assess the effectiveness of transactions that receive hedge accounting.
SFAS No. 133, as amended in June 1999 by SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133," is effective for fiscal
years beginning after June 15, 2000. The Company has never used
derivative instruments or hedging activities.
Income Taxes
No federal or state income taxes are reflected in the
accompanying financial statements since LP is a partnership and its
partners are required to include their respective share of profits and
losses in their income tax returns.
<PAGE> 8
3. RENTAL PROPERTIES:
Rental properties are comprised of the following at December
31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
Land related to buildings and improvements $ 34,628 $ 30,761
Buildings and improvements 112,495 109,175
----------- ----------
$ 147,123 $ 139,936
=========== ===========
</TABLE>
Future minimum base rentals on noncancellable operating leases
for LP's shopping center investments at December 31, 1999 are as
follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
2000 $ 15,812
2001 13,574
2002 11,495
2003 9,448
2004 8,490
Thereafter 37,405
-----------
$ 96,224
===========
</TABLE>
Shopping center acquisitions
<TABLE>
<CAPTION>
Date Square Total Cash Mortgage
Acquired Property Name City, State Footage Cost Paid Assumed
-------- ------------- ----------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
2/26/99 The Shoppes at Lago Mar Miami, FL 82,613 $ 9,916 $ 4,174 $ 5,742
3/15/99 Williamsburg at Dunwoody Dunwoody, GA 44,928 5,602 5,602 --
-------- -------- -------- ---------
127,541 $ 15,518 $ 9,776 $ 5,742
======== ======== ======== =========
=========================================================================================================
</TABLE>
Shopping center dispositions
<TABLE>
<CAPTION>
Date Square Sales Cash
Sold Property Name City, State Footage Price Proceeds Gain
-------- ------------- ----------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
6/01/99 First Street Station Albemarle, NC 52,230 $ 3,137 $ 3,038 $ 320
6/01/99 Taylorsville Taylorsville, NC 48,537 2,571 2,430 609
6/01/99 University Center Greenville, NC 56,180 3,462 3,399 201
------- ------- -------- --------
156,947 $ 9,170 $ 8,867 $1,130
======== ======= ======= ======
</TABLE>
<PAGE> 9
4. MORTGAGE NOTES PAYABLE:
Mortgage notes payable are collateralized by various real
estate investments having a net carrying value of approximately $50,259
at December 31, 1999. These notes have stated interest rates ranging
from 7.50% to 9.1875% and are due in monthly installments with maturity
dates ranging from 2009 to 2021.
Future principal amortization and balloon payments applicable
to mortgage notes payable at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
Principal Balloon
Year Amortization Payments Total
---- ------------ -------- -----
<S> <C> <C> <C>
2000 $ 485 $ -- $ 485
2001 527 -- 527
2002 573 -- 573
2003 623 -- 623
2004 676 -- 676
Thereafter 11,763 15,032 26,795
------- ------- ---------
14,647 15,032 29,679
Interest Premium 1,502
---------
$ 31,181
=========
</TABLE>
Based on the borrowing rates currently available to LP for
mortgages with similar terms and maturities, the estimated fair value
of mortgage notes payable was approximately $30,920 at December 31,
1999.
5. RELATED PARTY TRANSACTIONS
In 1999, LP advanced IRT Property Company (the "Parent")
approximately $8,923. The advances represent cash generated by LP that
has been subsequently advanced to the Parent. During the year, LP
earned approximately $324 in interest generated from these borrowings,
which bear interest, calculated on a monthly basis, at the three-month
treasury bill rate.
6. COMMITMENTS AND CONTINGENCIES:
LP has guaranteed the bank indebtedness and senior
indebtedness of the Company.
LP is not aware of any environmental problems on the
properties owned. While LP has not obtained Phase One environmental
surveys on those properties owned by LP and located in North Carolina,
and the fact that phase one environmental surveys which have been
obtained provide no assurance that properties will not be adversely
affected in the future by environmental problems, LP presently believes
that there are no environmental matters that are reasonably likely to
have a material adverse effect on LP's financial position.
