HRE PROPERTIES
321 RAILROAD AVENUE
Greenwich, Connecticut 06830
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
to be held on March 13, 1996
This Proxy Statement is furnished to shareholders of HRE Properties,
a Massachusetts business trust (hereinafter called the "Trust"), in connection
with the solicitation of proxies in the form enclosed herewith for use
at the Annual Meeting of Shareholders of the Trust to be held at the Doral
Arrowwood Conference Center, Rye Brook, New York, on March 13, 1996
at 11:00 a.m. for the purposes set forth in the Notice of Meeting.
The solicitation is made on behalf of the Trustees of the Trust and
the costs of the solicitation will be borneby the Trust. Trustees, officers
and employees of the Trust and its affiliates may also solicit proxies by
telephone,telegraph, fax or personal interview. The Trust will reimburse banks,
brokerage firms and other custodians,nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy material to the beneficial owners
of the shares.
Holders of record of Common Shares of the Trust as of the close of
business on the record date, January 29, 1996, are entitled
to receive notice of, and to vote at, the Meeting. The outstanding Common
Shares constitute the only class of securities entitled to
vote at the Meeting, and each Common Share entitles the holder thereof to
one vote. At the close of business on January 29, 1996, there were
5,367,226 Common Shares issued and outstanding.
Shares represented by proxies in the form enclosed, if such proxies
are properly executed and returned and not revoked, will be voted as specified,
but where no specification is made, the shares will be voted for the election
of three Trustees, and against the shareholder proposal to declassify the
Board of Trustees. To be voted, proxies must be filed with the Secretary of
the Trust prior to voting. Proxies may be revoked at any time before exercise
by filing a notice of such revocation, by filing a later dated proxy with
the Secretary of the Trust or by voting in person at the Meeting.
The Annual Report to shareholders for the Trust's fiscal year ended
October 31, 1995 has been mailed with this proxy statement. This proxy
statement and the enclosed proxy were mailed to shareholders on or about
January 29, 1996. The principal executive offices of the
Trust are located at 321 Railroad Avenue, Greenwich, Connecticut 06830.
ITEM 1.ELECTION OF TRUSTEES
Pursuant to Section 2.2 of the Trust's Declaration of Trust, the
Trustees are divided into three classes serving three year terms. Three
Trustees, comprising Class II, are to be elected at the 1996 Annual Meeting.
Mssrs. Peter Herrick, Paul D. Paganucci and James O. York have been nominated
for election as Trustees to hold office until the 1999 Annual Meeting
and until their successors have been elected and shall qualify.
<TABLE>
<S> <C> <C> <C> <C>
Principal Occupation Trustee Term
For the Past Five Years Continuous to
And Current Directorships Age Since Expire
CLASS II
(To be nominated for election by
holders of Common Shares
to serve for three years)
Peter Herrick(A)(E).... Retired Vice Chairman (1990-1992) 69 1990 1999
and Director, The Bank of New York;
President and Chief Operating
Officer, The Bank of New York
(February 1982 to June 1990);
President and Director, The Bank of
New York Company, Inc. (February
1984 to March 1992); Member, New
York State Banking Board (June 1990
to April 1993); Director, BNY
Hamilton Funds.
Paul D. Paganucci(A)....... Chairman, Ledyard National Bank 64 1984 1999
(since April 1991); Chairman of the
Executive Committee of W.R. Grace
& Co. (July 1989 to March 1991);
Vice Chairman, W.R. Grace & Co.
(November 1986 to July 1989);
Executive Vice President, W.R. Grace
& Co. from (January 1986 to
November 1986); formerly Vice
President and Treasurer of Dartmouth
College (July 1977 to December
1985); Director, Filene's Basement,
Inc.; Director, State Mutual
Securities, Inc.; Trustee Emeritus,
Colby College; Director, The Grace
Institute.
James O. York (A).......... Real Estate Counselor (since 1988); 68 1979 1999
Retired in 1987 as President of R.H.
Macy Properties Division and as
Senior Vice President and Director of
R.H. Macy & Co., Inc.; Trustee, The
International Council of Shopping
Centers Education and Research
Foundation; Trustee, Corporate
Property Investors.
Terms of office of the four Trustees named below will continue until the
Annual Meeting in the years indicated.
Principal Occupation Trustee Term
For the Past Five Years Continuous to
Name And Current Directorships Age Since Expire
CLASS I
(Term of Office expires in 1998)
E. Virgil Conway (C)(E) Chairman, Metropolitan 66 1989 1998
Transportation Authority (since
1995); Former Chairman,
Financial Accounting Standards
Advisory Council (1992-1995);
Financial Consultant and Corporate
Director (since January 1989);
Chairman and Director, The
Seamen's Bank for Savings, FSB
(1969-1989); Trustee, Consolidated
Edison Company of New York,
Inc.; Director, Union Pacific
Corporation; Trustee, Phoenix
Home Life Mutual Funds; Trustee,
Atlantic Mutual Insurance
Company; Director, Centennial
Insurance Company; Director,
Trism, Inc.; Director,
AccuHealth, Inc.; Chairman, New
York Housing Partnership
Development Corporation; Vice
Chairman, Academy of Political
Science; Trustee, Pace University.
Principal Occupation Trustee Term
For the Past Five Years Continuous to
Name And Current Directorships Age Since Expire
CLASS III
(Term of Office expires in 1997)
Robert R. Douglass(C)..... Of Counsel, Milbank, Tweed 64 1991 1997
Hadley and McCloy; Chairman
and Director, Cedel; Retired Vice
Chairman and Director, The Chase
Manhattan Corporation (1985 to
1993); Executive Vice President,
General Counsel and Secretary,
The Chase Manhattan Corporation
(1976 to 1985); Trustee,
Dartmouth College (1983 to 1993);
Chairman, Downtown Lower
Manhattan Association;Chairman
of Alliance for Downtown New
York; Member, Board of Managers,
The New York Botanical Garden;
Director, Business Council for the
United Nations; Member, Council on
Foreign Relations;
Director, Gryphon Holdings, Inc.
Trustee, Managed Accounts Services
Portfolio Trust.
George H.C. Lawrence(C)....... Chairman, Chief Executive Officer 58 1988 1997
and President, Lawrence Investing
Company, Inc. (since 1970);
Director, Urstadt Property
Company, Inc.; Trustee, Sarah
Lawrence College; Director,
Westchester County Association;
Senior Vice President and
Director, Kensico Cemetery;
Director, CLX Energy.
Charles J. Urstadt (E)........ Chairman of the Board of 67 1975 1997
Trustees; President and Chief
Executive Officer of the Trust
(since September 1989); Chairman,
President and Director, Urstadt
Property Company, Inc. (a real
estate investment corporation);
Trustee, Pace University; Trustee,
Teacher's Insurance and Annuity
Association.
________________
(A) Member of Audit Committee
(C) Member of Compensation Committee
(E) Member of Executive Committee
</TABLE>
During the fiscal year ended October 31, 1995, the Trustees held
five meetings. The Trustees have three standing committees:
an Audit Committee, an Executive Committee and a Compensation Committee.
Each Trustee attended at least 75% of the aggregate total number of meetings
held during the fiscal year by the Trustees and by all committees of which
such Trustee is a member.
The Audit Committee met twice during the fiscal year ended October
31, 1995. The Committee recommends to the Trustees the independent public
accountants to be engaged by the Trust, reviews with the Trust's
independent public accountants and management the Trust's internal
accounting procedures and controls, and reviews with the Trust's independent
public accountants the scope and results of the auditing engagement.
Messrs. Paul D.Paganucci, Peter Herrick and James O. York are the current
members of the Audit Committee.
The Executive Committee did not meet during the fiscal year ended
October 31, 1995. In general, the Executive Committee may exercise
such powers of the Trustees between meetings of the Trustees as may be
delegated to it by the Trustees (except for certain powers of the Trustees
which may not be delegated). Messrs.E. Virgil Conway, Peter Herrick, and
Charles J. Urstadt are the current members of the Executive Committee.
The Compensation Committee, which makes recommendations to the
Trustees concerning compensation and administers the Trust's Stock Option
Plan, held two meetings during the fiscal year ended October 31, 1995.
Messrs. E. Virgil Conway, George H.C. Lawrence and Robert R. Douglass are
the current members of the Compensation Committee.
The Trustees do not have a nominating committee but act as a group
on such matters.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Trust's Trustees and officers, and persons who own more than 10%
of a registered class of the Trust's equity securities, to file initial
reports of ownership and reports of changes in ownership of such equity
securities with the Securities and Exchange Commission (the "SEC").
Such persons are also required by SEC regulations to furnish the Trust with
copies of all Section 16(a) forms they file. Based solely
on a review of the copies of such forms furnished to the Trust, or
written representations that no Forms 5 were required, the Trust believes
that, with respect to the period from November 1, 1994 through
October 31, 1995, its Trustees, officers and greater than 10% beneficial owners
complied with all Section 16(a) filing requirements.
At the Meeting, the shareholders of the Trust will be requested to
elect three Trustees, comprising Class II. The affirmative vote of the
holders of not less than a majority of the Trust's Common Shares entitled to
vote and present, in person or by proxy, at the Annual Meeting
will be required to elect a Trustee. Abstentions will thus
be the equivalent of negative votes and broker non-votes will have no effect,
as any shares subject to broker non-votes will not be present and entitled
to vote with respect to any proposal to which the broker non-vote applies.
THE TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND
A VOTE FOR APPROVAL OF THE NOMINEES FOR ELECTION AS TRUSTEES.
Security Ownership of Certain Beneficial Owners and Management
The following tables set forth certain information as of January 16,
1996 available to the Trust with respect to the shares of the Trust (i)
held by those persons known to the Trust to be the beneficial owners (as
determined under the rules of the Securities and Exchange Commission)
of more than 5% of the Trust's Common Shares then outstanding and (ii) held
by each of the Trustees, each of the executive officers named in the Summary
Compensation Table below, and by all of the Trustees and executive officers
as a group:
<TABLE>
<S> <C>
5% BENEFICIAL OWNERS
Name and Address Common Shares Percent
of Beneficial Owner Beneficially Owned of Class
Charles J. Urstadt(1)
HRE Properties
321 Railroad Avenue
Greenwich, Connecticut 06830 1,100,800 19.7%
The Kimco Group(2)
1044 Northern Boulevard
Roslyn, New York 11576 601,050 10.8%
________________
(1) Of these shares, 15,000 are owned by Urstadt Property Company, Inc., a company of which Mr. Urstadt
is the president, a director and a principal stockholder, 900,000 shares are owned by two irrevocable trusts
established for Mr. Urstadt's children and 40,000 shares are owned by Elinor Urstadt, Mr. Urstadt's wife.
The figure excludes 98,750 shares issuable upon exercise of options which are not currently exercisable
and will not become exercisable within 60 days, and includes 145,000 shares issuable upon exercise of
options exercisable within 60 days. See "Compensation and Transactions with Management and Others"
below. Also excludes 25,000 cash appreciation rights, all of which are exercisable within 60 days.
(2) Based on information contained in Amendment No. 10 to a Schedule 13D filed with the Securities and
Exchange Commission on December 11, 1989 by a group of persons and entities (the "Kimco Group")
comprised principally of Milton Cooper, Kimco Corporation, Kimco Development Corporation, CLS
General Partnership Corp., K.O. Associates, Orentreich Cooper Joint Venture and Dr. Norman Orentreich.
</TABLE>
<TABLE>
<S> <C> <C>
TRUSTEES AND OFFICERS
Name Common Shares Percent
Beneficially Owned of Class
Charles J. Urstadt.......................... 1,100,800 (1) 19.7 %
E. Virgil Conway . . . . . . . . . . . . . . 10,500 (2)(3) *
Robert R. Douglass . . . . . . . . . . . . . 5,600 (3)(8) *
Peter Herrick. . . . . . . . . . . . . . . . 16,000 (2)(3) *
George H.C. Lawrence . . . . . . . . . . . . 23,400 (2)(3) *
Paul D. Paganucci. . . . . . . . . . . . . . 6,000 (2)(3) *
James O. York. . . . . . . . . . . . . . . . 5,100 (2)(3) *
James R. Moore . . . . . . . . . . . . . . . 27,916 (4)(6) *
Raymond P. Argila. . . . . . . . . . . . . . 14,416 (4)(5) *
Willing L. Biddle. . . . . . . . . . . . . . 14,950 (7) *
Trustees and executive officers
as a group (10 persons). . . . . . . . . . 1,224,682 (9) 21.9 %
* Less than 1%
(1) Includes 15,000 shares owned by Urstadt Property Company Inc., 900,000 Common Shares owned by
two irrevocable trusts established for Mr. Urstadt's adult children, and 40,000 Common Shares owned
by Elinor Urstadt, Mr. Urstadt's wife. Excludes 98,750 Common Shares issuable upon exercise of
options which are not currently exercisable and will not become exercisable within 60 days, and includes
145,000 Common Shares issuable upon exercise of options exercisable within 60 days. Also excludes
25,000 cash appreciation rights all of which are exercisable within 60 days. See "Compensation and
Transactions with Management and Others" below.
(2) Includes 4,000 Common Shares issuable upon exercise of options which are currently exercisable or
which will become exercisable within 60 days. See "Compensation and Transactions with Management
and Others" below.
(3) Excludes 1,000 shares issuable upon exercise of options which are not currently exercisable and will
not become exercisable within 60 days.
(4) Represents Common Shares issuable upon exercise of options which are currently exercisable or which
will become exercisable within 60 days. See "Compensation and Transactions with Management and
Others" below.
(5) Excludes 11,250 Common Shares issuable upon exercise of options which are not currently exercisable
and will not become exercisable within 60 days.
(6) Excludes 12,750 Common Shares issuable upon exercise of options which are not currently exercisable
and will not become exercisable within 60 days.
(7) Includes 2,250 Common Shares issuable upon exercise of options which are currently exercisable or
which will become exercisable within 60 days. Excludes 7,250 Common Shares issuable upon exercise
of options which are not currently exercisable and will not become exercisable within 60 days.
Mr. Biddle is the son-in-law of Mr. Urstadt.
(8) Includes 3,000 Common Shares issuable upon exercise of options which are currently exercisable or will
become exercisable within 60 days. See "Compensation and Transactions with Management and
Others" below.
(9) Excludes 136,000 Common Shares issuable upon exercise of options which are not currently exercisable
and will not become exercisable within 60 days, but includes 212,582 Common Shares issuable upon
exercise of options which are exercisable within 60 days. Also excludes 25,000 cash appreciation rights
all of which are exercisable within 60 days.
</TABLE>
Compensation and Transactions with Management and Others
Executive Officer Compensation
There is set forth below information concerning the annual and
long-term compensation paid by the Trust during each of the three years
ended October 31, 1995 to those persons who were, at October 31, 1995 (i)
the chief executive officer and (ii) the three other most
highly compensated executive officers of the Trust constituting the
only persons who were serving as executive officers at such date.
SUMMARY COMPENSATION TABLE
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Annual Compensation Long-Term Compensation
Awards/Payouts
Name and #
Principal Options/ All Other
Position Year Salary Bonus Total SARS Compensation* Total
Charles J. 1995 $225,000 $40,000 $265,000 50,000 $7,500 $272,500
Urstadt, 1994 $215,000 $20,000 $235,000 50,000 $7,500 $242,500
Chief 1993 $191,667 $ 0 $191,667 67,500 $9,583 $201,250
Executive
Officer
James R. 1995 $138,813 $10,000 $148,813 7,000 $7,440 $156,253
Moore, 1994 $132,415 $ 6,500 $138,915 6,500 $6,946 $145,861
Senior Vice 1993 $125,345 $ 4,000 $129,345 7,500 $6,467 $135,812
President
Raymond P. 1995 $126,073 $ 5,000 $131,073 6,000 $6,554 $137,627
Argila, 1994 $121,115 $ 4,500 $125,615 5,500 $6,280 $131,895
Senior Vice 1993 $115,185 $ 3,000 $118,185 7,500 $5,909 $124,094
President
Willing L. 1995 $100,813 $10,000 $110,813 5,000 $5,541 $116,354
Biddle (a) 1994 $ 80,832 $ 3,500 $ 84,232 3,250 $4,213 $ 88,445
Senior Vice 1993 $ 43,667 $ 0 $ 43,667 1,250 $ 0 $ 43,667
President
________________
* Discretionary contribution by the Trust to the Trust's Profit Sharing
and Savings Plan (the "401(k) Plan")
allocated to an account of the named executive officer.
(a) Mr. Biddle commenced employment with the Trust on April 1, 1993.
</TABLE>
Trustee Compensation
Other than Mr. Urstadt, each Trustee is entitled to an annual retainer
of $15,000 and compensation of $1,000 for each Trustee meeting and each
committee meeting attended. Trustees may elect to defer payment of any Trustee
fees until they leave office. The Trust paid annual interest of 7.5% on
deferred Trustee fees during the fiscal year ended October 31, 1995
and currently accrues 7.5% annual interest on deferred Trustee fees.
Change of Control Agreements
The Trust has agreements with each of its officers, including Messrs.
Urstadt, Moore, Argila and Biddle, under which, in certain
circumstances following a Change of Control of the Trust (as defined in such
agreements), the Trust would pay severance benefits to such
persons. If, within 18 months following the Change of Control, the Trust
terminates the executive's employment other than for cause, or if the
executive elects to terminate his employment with the Trust for
reasons specified in the agreement, the Trust will make a severance payment
equal to a portion of such person's base salary, together with
medical and other benefits during such period. The severance payments
range from 6 months' to 12 months' salary plus benefits. Messrs. Urstadt,
Moore, Argila and Biddle would each receive a severance payment equal to their
respective twelve month salaries plus benefits. The salaries of Messrs.
Urstadt, Moore, Argila and Biddle are currently $240,000, $145,000, $132,000
and $130,000, respectively. Each of such agreements has an indefinite term.
Stock Options
Under the Trust's Stock Option Plan ("Plan"), 453,665 shares of the
Trust's authorized but unissued Common Shares are reserved for issuance
upon the exercise of options or stock appreciation rights which have been or
may be granted under the Plan. The persons eligible to participate
in the Plan are such key employees of the Trust as
may be selected from time to time by the Compensation Committee in its
discretion, as well as non-employee Trustees. The Plan provides that each
Trustee who is not a full-time employee or former full-time employee of the
Trust will automatically be awarded options covering 1,000 shares on
April 1 of each year. The Plan is administered by the Compensation Committee.
The following table sets forth, for the executive officers named in the
Summary Compensation Table, information regarding individual grants of stock
options and stock appreciation rights ("SARs") made under the Plan
in the fiscal year ended October 31, 1995.
<TABLE>
<S> <C> <C> <C> <C> <C>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants Grant Date Value
% of Total
Options/
SARs
Options/ Granted to Average
SARs Employees Exercise or
Granted* in Fiscal Base Price Expiration Grant Date
Name (#) Year ($/sh) Date Present Value ($)**
Charles J. Urstadt 25,000 34.01% $14.13 11/10/04 $ 32,500
25,000 34.01% $14.00 06/10/05 $ 32,250
James R. Moore 3,500 4.76% $14.13 11/10/04 $ 4,550
3,500 4.76% $14.00 06/10/05 $ 4,515
Raymond P. Argila 3,000 4.08% $14.13 11/10/04 $ 3,900
3,000 4.08% $14.00 06/10/05 $ 3,870
Willing L. Biddle 2,000 2.72% $14.13 11/10/04 $ 2,600
3,000 4.08% $14.00 06/10/05 $ 3,870
* All options granted during the past fiscal year vest over four years. No options granted during the past fiscal
year were granted with related stock appreciation rights.
** Based on the Black-Scholes option pricing model adapted for use in valuing executive stock options. The
actual value, if any, an executive may realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised, so that there is no assurance the value realized by an executive will
be at or near the value estimated by the Black-Scholes model. The estimated values under that model are
based on arbitrary assumptions as to variables such as interest rates, stock price volatility and future dividend
yield.
</TABLE>
The Compensation Committee has authorized loans to finance the
exercise of incentive stock options granted to executive officers.
The loans have a five-year term, subject to extension at the discretion of
the Compensation Committee, bear interest at the Base Rate of The First
National Bank of Boston and are secured by a pledge of the
related shares. The loans become due on termination of employment by the
Trust, but are automatically extended for seven months following termination
of employment other than for cause, and for 13 months following
termination of employment occurring after a Change of Control of the Trust.
The following table sets forth, for the executive officers named in the
Summary Compensation Table, information concerning the fiscal year-end value
of unexercised options and SARs. No Common Shares of the Trust
were acquired by such executive officers through the exercise of options in
fiscal 1995.
<TABLE>
Aggregated Options/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
<S> <C> <C>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
Charles J. Urstadt. . . . . . . . . 145,000/ 98,750 $235,469/$ 42,344
James R. Moore. . . . . . . . . . . 27,916/ 12,750 $29,378/$ 4,953
Raymond P. Argila . . . . . . . . . 14,416/ 11,250 $29,363/$ 4,781
Willing L. Biddle . . . . . . . . . 2,250/ 7,250 $141/$ 1,016
</TABLE>
Report of Compensation Committee on Executive Compensation
The Board of Trustees Compensation Committee, which is composed of
three independent outside Trustees, is responsible for making recommendations
to the Board concerning compensation and for administering the Trust's
Stock Option Plan. The Compensation Committee considered a variety of
factors and criteria in arriving at its recommendations for compensation
of the Trust's executive officers for fiscal 1995.
The Committee believes that compensation should be structured so as to
provide incentives to the Trust's officers to enhance the long-term
profitability of the Trust. Thus, in making its recommendations regarding
compensation, the Committee attempts to align the financial interests of the
Trust's executive officers with those of its shareholders.
Options to purchase the Trust's Common Shares are a key element in the
Trust's compensation program.
Since the Trust's Stock Option Plan provides for a one-year waiting period
before options may be exercised and an exercise price of the Trust's
Common Shares at fair market value as of the date of grant, executive officers
benefit from options only when the share price increases. As a result,
options help to motivate executives by providing incentives tied to shareholder
goals. The Committee determined that it was advisable to consider the grant
of options twice a year, so as to provide a more immediate incentive to loyal
employees and align more closely the award of options to job performance.
In evaluating the potential long-term profitability of the Trust and
making its fiscal 1995 compensation recommendations, the Committee
considered stock price, projected and actual cash flow, leasing activities, new
acquisitions and other factors in arriving at its conclusions. The Committee
decided to grant options pursuant to the Trust's Stock Option Plan
to purchase the Trust's Common Shares to certain executive officers which the
Committee believed would provide such officers with a direct incentive to
improve the Trust's profitability and consequently, shareholder value.
The Committee believes that the continued focus by the Chief Executive
Officer on financing, acquisitions and sales, leasing and cost
containment, in the face of a highly competitive market, warrants special
recognition and that such focus will position the Trust for potential
long-term profitability as this strategy matures. In light of the
leadership by Mr. Urstadt during 1995 in all areas of management including
particularly increasing leasing and undertaking acquisitions, and sales which
has resulted in a 13% improvement in cash flow in fiscal 1995, the
Committee decided to award Mr. Urstadt options to purchase 50,000 of the
Trust's Common Shares. The Committee believes that the Chief Executive Officer
should be able to profit directly from future increases in the
value of the Trust's Common Shares which enures to the benefit of all
shareholders.
The Committee compared the annual compensation of Mr. Urstadt with that
of Chief Executive Officers of other REITs in the comparable size category
of the Trust and determined that Mr. Urstadt's current salary was
lower than the mean annual salary of such other Chief Executive Officers.
Therefore, the Committee decided that an increase in Mr. Urstadt's
annual salary to $240,000 was advisable and awarded a bonus of $40,000 in
view of the Trust's continued improved operating performance.
Compensation Committee
E. Virgil Conway, Chairman
George H.C. Lawrence
Robert R. Douglass
ITEM 2. SHAREHOLDER PROPOSAL
William Steiner, a shareholder of the Trust, of 4 Radcliff Drive, Great Neck,
New York, has submitted the following resolution for consideration by
shareholders at the Annual Meeting:
RESOLVED, that the stockholders of the Company request that the Board of
Directors take the necessary steps,in accordance with state law, to declassify
the Board of Directors so that all directors are elected annually, such
declassification to be effected in a manner that does not affect the
unexpired terms of directors previously elected.
In support of this proposal, William Steiner has submitted the following
statement:
The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable
for it's implementation of those policies. I believe that the classification
of the Board of Directors, which results in only a portion
of the Board being elected annually, is not in the best interests
of the Company and it's stockholders.
The Board of Directors of the Company is divided into three classes
serving staggered three-year terms. I believe that the Company's
classified Board of Directors maintains the incumbency of the current Board and
therefore of current management, which in turn limits management's
accountability to stockholders.
The elimination of the Company's classified Board would require each
new director to stand for election annually and allow stockholders
an opportunity to register their views on the performance of the Board
collectively and each director individually.
I believe this is the one of the best methods available to stockholders to
insure that the Company will be managed in a manner that
is in the best interests of the stockholders.
I am a founding member of the Investors Rights Association of America
and I believe that concerns expressed by companies with
classified boards that the annual election of all directors could leave
companies without experienced directors in the event that all
incumbents are voted out by stockholders, are unfounded. In my view,
in the unlikely event that stockholders vote to replace all directors, this
decision would express stockholder dissatisfaction with the incumbent
directors and reflect the need for change.
I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION
YOUR BOARD OF TRUSTEES RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE
FOLLOWING REASONS:
At the 1994 Annual Meeting of Shareholders, the Trust's shareholders
voted to amend the Trust's Declaration of Trust to provide for the
classification of the Board of Trustees into three classes serving staggered
three-year terms. The Board stated in the proxy materials
relating to that meeting its belief that a classified board will help
to ensure the continuity and stability of the Trust's management and
policies. In the opinion of the Board, the foregoing reasons continue to be
valid and the classified board remains in the best interests of the
shareholders.
Approval of this proposal requesting the Board of Trustees to take the
necessary steps to eliminate the classified Board requires the affirmative vote
of the holders of not less than a majority of the votes present at the Annual
Meeting. Abstentions will thus be the equivalent of negative votes and
broker non-votes will have no effect, as any shares subject to broker
non-votes will not be present and entitled to vote with respect to any
proposal to which the broker non-vote applies.
If approved, the proposal would serve as a recommendation to the Board of
Trustees to take the necessary steps to eliminate
the classified Board. Such steps would require amending the Trust's
Declaration of Trust, which would require approval at a future shareholders'
meeting of the holders of not less than a majority of the then
outstanding Common Shares of the Trust.
ACCORDINGLY, THE BOARD OF TRUSTEES RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
The following graph compares, for the five-year period ended October 31,
1995, the Trust's cumulative total return to its shareholders
with the returns for the NAREIT All REIT Total Return Index published by the
National Association of Real Estate Investment Trusts
(NAREIT) and for the S&P 500 Index for the same period.
Insert Graph Here
Audit Matters
The Trustees have appointed Arthur Andersen LLP. to examine the
financial statements of the Trust for the fiscal year ended October 31, 1995,
and to report the results of their examination.
It is expected that a representative of Arthur Andersen LLP. will be
present at the Annual Meeting. Such representative will be afforded
the opportunity to make a statement if he or she so desires and will be
available to respond to appropriate questions raised at the meeting.
Submission of Shareholder Proposals
Proposals of shareholders intended to be presented to the Trust's Annual
Meeting of Shareholders to be held in 1997 must be received by the
Trust by September 30, 1996. Such proposals must also comply with the
requirements as to form and substance established by the Securities and
Exchange Commission for such proposals to be included in the proxy statement.
General
All shares represented by the accompanying proxy will be voted in
accordance with the proxy. The Trustees know of no other business
which will come before the Meeting for action. However, as to any such
business, the persons designated as proxies will
have discretionary authority to act in their best judgment.
The Declaration of Trust dated July 7, 1969 establishing HRE Properties,
a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "HRE Properties" refers to the
trustees under the Declaration collectively
as trustees, but not as individuals or personally; and no trustee,
shareholder, officer or agent of HRE Properties shall be held to any
personal liability; nor shall resort be had to their private property for
the satisfaction of any obligation or claim or otherwise in connection
with the affairs of said HRE Properties, but the trust estate only shall
be liable.
PROXY
1996 ANNUAL MEETING OF
HRE PROPERTIES
This Proxy is solicited on behalf of the Trustees of HRE Properties.
The undersigned hereby appoints RAYMOND P. ARGILA and JAMES R. MOORE, or
either of them with full power of substitution to each, proxies to
vote and act at the Annual Meeting of Shareholders of HRE Properties
to be held on March 13, 1996 at 11:00 a.m. at the Doral Arrowwood Conference
Center, Rye Brook, New York and at any adjournments thereof,
upon and with respect to the number of Common Shares of HRE Properties as
to which the undersigned may be entitled to vote or act. The undersigned
instructs such proxies, or their substitutes,to vote in such manner
designated on the reverse side hereof on any matters which may come before
the meeting, all as indicated in the accompanying Notice of
Annual Meeting and Proxy Statement, receipt of which is
acknowledged, and to vote on the following as specified by the undersigned.
The undersigned hereby revokes any other proxy previously granted to
vote the Common Shares for said meeting.
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES TO WHICH IT RELATES
WILL BE VOTED AS SPECIFIED, BUT IF NO SPECIFICATION IS MADE, THE SHARES TO
WHICH IT RELATES WILL BE VOTED FOR THE ELECTION OF THREE
TRUSTEES LISTED ON THE REVERSE SIDE, AGAINST PROPOSAL 2 AND ACCORDING TO THE
DISCRETION OF THE PROXY HOLDERS ON
ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT DEEMED DESIRABLE BY HRE PROPERTIES.
(Continued and to be signed and dated on reverse side)
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<S> <C>
Please mark box / / in blue or / / black ink.
1. Election of three Trustees to serve for the ensuing three years:
Nominees: Peter Herrick, Paul D. Paganucci, James O. York
FOR / /. . . . . . . . . . . . WITHHOLD / /. . . . . . . (INSTRUCTIONS: To withhold authority
all nominees listed above. . . authority to vote for all to vote for any individual
nominees listed above. nominee, write that nominee's name
in the space provided below.)
(except as marked to the
contrary to the right)
2. To act upon a shareholder proposal as set forth in the accompanying Proxy Statement.
FOR / / . . . . . . . . . AGAINST / / ABSTAIN / /
The Trustees unanimously recommend a vote AGAINST Proposal 2
In their discretion the Proxies are authorized to vote upon such other business as may properly come before this
meeting.
ANY PROXY WHICH IS EXECUTED IN SUCH MANNER AS NOT TO WITHHOLD AUTHORITY TO
VOTE FOR THE ELECTION OF THE NOMINEES SHALL BE DEEMED TO GRANT SUCH
AUTHORITY OR IF NO DIRECTION IS MADE SHALL BE DEEMED A VOTE FOR.
(Please sign exactly as your name(s) appear hereon. When signing as attorney, executor, administrator, trustee
or guardian, please sign your full title as such. If signer is a corporation, please
sign in full corporate name by authorized officer. If signer is a partnership,please sign in
partnership name by authorized person. Each joint owner should sign.)
Dated:_________________
________________________
Signature of Shareholder
_________________________
Signature if held jointly
Votes must be indicated (X) in Black or Blue ink.
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