<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
EASTGROUP PROPERTIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
================================================================================
<PAGE> 2
EASTGROUP PROPERTIES, INC.
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
April 30, 1998
Dear Stockholder:
You are cordially invited to the annual meeting (the "Meeting") of
stockholders of EastGroup Properties, Inc. (the "Company"), to be held on June
4, 1998 at 9:00 a.m., Jackson time, at the Company's offices, 300 One Jackson
Place, 188 East Capitol Street, Jackson, Mississippi.
Stockholders will be asked to vote on the election of seven directors of
the Company and to transact such other business as may properly come before the
Meeting or any adjournment thereof.
The proposed transaction is important to you as a stockholder. Therefore,
whether or not you plan to attend the Meeting, I urge you to give your immediate
attention to the proposal. Please review the enclosed materials, sign and date
the enclosed proxy card and return it promptly in the enclosed postage-paid
envelope.
Very truly yours,
/s/ Leland R. Speed
LELAND R. SPEED
Chairman of the Board of Directors
<PAGE> 3
EASTGROUP PROPERTIES, INC.
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 4, 1998
To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of EastGroup Properties, Inc. (the "Company"), will be held at the
Company's offices, 300 One Jackson Place, 188 East Capitol Street, Jackson,
Mississippi, on June 4, 1998 at 9:00 a.m., Jackson time, for the following
purposes:
1. To elect seven directors of the Company.
2. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
Only stockholders of record at the close of business on April 23, 1998 are
entitled to notice of and to vote at the Meeting and any adjournment thereof.
The directors sincerely desire your presence at the Meeting. However, so
that we may be sure your vote will be included, please sign and return the
enclosed proxy promptly. A self-addressed, postage-paid return envelope is
enclosed for your convenience.
The prompt return of your proxy will avoid delay and save the expense
involved in further communication. The proxy may be revoked by you at any time
prior to its exercise, and the giving of your proxy will not affect your right
to vote in person if you wish to attend the Meeting.
By Order of the Board of Directors
/s/ N. Keith McKey
N. KEITH MCKEY
Executive Vice President, Chief
Financial Officer, Treasurer and
Secretary
DATED: April 30, 1998
THIS IS AN IMPORTANT MEETING. STOCKHOLDERS ARE URGED TO VOTE BY SIGNING,
DATING AND RETURNING THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE TO WHICH NO
POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
<PAGE> 4
EASTGROUP PROPERTIES, INC.
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 4, 1998
The following information is being furnished to the stockholders of
EastGroup Properties, Inc. (the "Company"), in connection with the solicitation
of proxies by the Board of Directors of the Company for use at its Annual
Meeting of Stockholders (the "Meeting"), to be held on June 4, 1998 at 9:00
a.m., Jackson time, at the Company's offices, 300 One Jackson Place, 188 East
Capitol Street, Jackson, Mississippi. A copy of the Company's Annual Report to
Stockholders for the fiscal year ended December 31, 1997 accompanies this Proxy
Statement. Additional copies of the Annual Report, Notice, Proxy Statement and
Form of Proxy may be obtained from the Company's Secretary, P.O. Box 22728,
Jackson, Mississippi 39225-2728. This Proxy Statement will first be sent to
stockholders on or about April 30, 1998.
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy for the Meeting is being solicited by the directors of
the Company. Any person giving a proxy may revoke it at any time prior to the
exercise thereof by filing with the Secretary of the Company a written
revocation or duly executed proxy bearing a later date. The proxy may also be
revoked by a stockholder attending the Meeting, withdrawing the proxy and voting
in person.
The expense of preparing, printing and mailing the form of proxy and the
material used in the solicitation thereof will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited by the directors,
officers and regular employees of the Company (who will receive no additional
compensation therefor) by means of personal interview, telephone or facsimile.
It is anticipated that banks, brokerage houses and other institutions,
custodians, nominees, fiduciaries or other record holders will be requested to
forward the soliciting material to persons for whom they hold shares and to seek
authority for the execution of proxies; in such cases, the Company will
reimburse such holders for their charges and expenses.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The record date for determining shares of common stock, par value $0.0001
per share, of the Company (the "Common Stock") entitled to vote at the Meeting
has been fixed at the close of business on April 23, 1998. On such date there
were 16,302,876 shares of Common Stock outstanding. The holders of Common Stock
are generally entitled to one vote for each share of Common Stock on each matter
submitted to a vote at a meeting of stockholders. Pursuant to the Company's
Bylaws, directors will be elected by a plurality of the votes with each share
being voted for as many individuals as there are directors to be elected and for
whose election the share is entitled to vote.
<PAGE> 5
The presence, in person or by properly executed proxy, of the holders of
shares of Common Stock entitled to cast a majority of all the votes entitled to
be cast at the Meeting is necessary to constitute a quorum. Common Stock
represented by a properly signed, dated and returned proxy will be treated as
present at the Meeting for purposes of determining a quorum.
The share amounts and per share information set forth in this proxy
statement give retroactive effect to a three-for-two stock split effected by the
Company on April 7, 1997.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the best of the Company's knowledge, no person or group (as those terms
are used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), beneficially owned, as of April 15, 1998, more than five
percent of the Common Stock outstanding, except as set forth in the following
table.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT PERCENT OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK(1)
- ------------------- ------------------ ---------------
<S> <C> <C>
Cohen & Steers Capital Management, Inc.
757 Third Avenue
New York, New York 10017.................................. 979,600(2) 6.02%
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109............................... 980,650(3) 6.02%
</TABLE>
- ---------------
(1) Based on the number of shares of Common Stock outstanding as of April 15,
1998 which was 16,278,068 shares of Common Stock.
(2) Based upon an amended Statement on Schedule 13G filed with the Securities
and Exchange Commission (the "SEC").
(3) Based upon an amended Statement on Schedule 13G filed with the SEC which
indicated that FMR Corp. had sole voting power with respect to 222,400
shares of Common Stock and sole dispositive power with respect to 980,650
shares of Common Stock.
2
<PAGE> 6
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information available to the Company
with respect to shares of Common Stock owned by each director, each nominee for
director, each executive officer and all directors, nominees and executive
officers as a group, as of April 15, 1998.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK PERCENTAGE OF
BENEFICIALLY SHARES OF
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS OWNED COMMON STOCK(1)
- ------------------------------------------ ---------------- ---------------
<S> <C> <C>
Alexander G. Anagnos...................................... 14,250(2) *
H.C. Bailey, Jr. ......................................... 35,852(3) *
Fredric H. Gould.......................................... 3,000 *
Harold B. Judell.......................................... 23,190(4) *
John N. Palmer............................................ 15,870(5) *
David M. Osnos............................................ 21,000(6) *
Leland R. Speed........................................... 264,441(7) 1.61%
David H. Hoster II........................................ 171,214(8) 1.04
N. Keith McKey............................................ 107,110(9) 0.65
Diane W. Hayman........................................... 21,563(10) *
Marshall A. Loeb.......................................... 29,040(11) *
Jann W. Puckett........................................... 22,058(12) *
Stewart R. Speed.......................................... 50,857(13) *
All directors, nominees and executive officers as a
group................................................... 779,445(14) 4.66
</TABLE>
- ---------------
* Less than 0.5%
(1) Based on the number of shares of Common Stock outstanding as of April 15,
1998 which was 16,278,068 shares of Common Stock.
(2) Includes 14,250 shares of Common Stock that Mr. Anagnos has the right to
acquire under the Company's 1991 Directors Stock Option Plan, as amended
(the "Directors Plan").
(3) Includes (i) 16,500 shares of Common Stock that Mr. Bailey has the right to
acquire under the Directors Plan; (ii) 6,136 shares of Common Stock with
respect to which Mr. Bailey has sole voting and dispositive power; and
(iii) 13,216 shares of Common Stock with respect to which Mr. Bailey has
shared voting and dispositive power.
(4) Includes 9,000 shares of Common Stock that Mr. Judell has the right to
acquire under the Directors Plan.
(5) Includes 14,250 shares of Common Stock that Mr. Palmer has the right to
acquire under the Directors Plan.
(6) Includes 16,500 shares of Common Stock that Mr. Osnos has the right to
acquire under the Directors Plan.
(7) Includes 115,108 shares of Common Stock that Mr. Speed has the right to
acquire pursuant to exercisable options granted under the Company's 1994
Incentive Plan, and does not include 21,888 shares of Common Stock
beneficially owned by Mr. Speed's spouse, as to which he disclaims
beneficial ownership.
(8) Includes 111,715 shares of Common Stock that Mr. Hoster has the right to
acquire pursuant to exercisable options granted under the Company's 1994
Incentive Plan and does not include 4,680 shares of Common
3
<PAGE> 7
Stock beneficially owned by Mr. Hoster's wife and daughters, as to which he
disclaims beneficial ownership.
(9) Includes 85,500 shares of Common Stock that Mr. McKey has the right to
acquire pursuant to exercisable options granted under the Company's 1994
Incentive Plan and does not include 773 shares of Common Stock beneficially
owned by Mr. McKey's son, as to which he disclaims beneficial ownership.
(10) Includes 19,563 shares of Common Stock that Ms. Hayman has the right to
acquire pursuant to exercisable options granted under the Company's 1994
Incentive Plan.
(11) Includes 15,000 shares of Common Stock that Mr. Loeb has the right to
acquire pursuant to exercisable options granted under the Company's 1994
Incentive Plan.
(12) Includes 21,563 shares of Common Stock Ms. Puckett has the right to acquire
pursuant to exercisable options granted under the Company's 1994 Incentive
Plan.
(13) Does not include 450 shares of Common Stock owned by Mr. Speed's wife.
Includes 6,000 shares of Common Stock Mr. Speed has the right to acquire
pursuant to exercisable options granted under the Company's 1994 Incentive
Plan.
(14) Includes 70,500 shares of Common Stock that directors of the Company have
the right to acquire under the Directors Plan and 374,449 shares of Common
Stock that officers of the Company have the right to acquire pursuant to
exercisable options granted under the Company's 1994 Incentive Plan.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
ELECTION OF DIRECTORS -- NOMINEES
The Articles of Incorporation of the Company provide that the number of
directors shall be seven. All seven positions on the Board of Directors are to
be filled by the vote of the stockholders at the Meeting. Each person so elected
shall serve until the Company's next Annual Meeting of Stockholders and until
his successor is elected and qualified.
The Company's directors recommend a vote FOR the seven nominees listed
below. Except where authority to do so has been withheld, it is the intention of
the persons named in the accompanying Form of Proxy to vote at the Meeting FOR
these nominees. Each of the nominees listed below, except Mr. Gould, was elected
a director at the Company's 1997 Annual Meeting of Stockholders. Mr. Judell has
decided to retire from his position and therefore has chosen not to stand for
re-election.
Although the directors do not contemplate that any of the nominees listed
below will be unable to serve, if such a situation arises prior to the Meeting,
the enclosed proxy will be voted in accordance with the best judgment of the
person or persons voting the proxy.
<TABLE>
<CAPTION>
NAME, POSITION(S) AND PRINCIPAL OCCUPATION AND
TENURE WITH THE COMPANY AGE BUSINESS FOR THE PAST FIVE YEARS(1)
----------------------- --- -----------------------------------
<S> <C> <C>
Alexander G. Anagnos................. 71 Financial Advisor with WR Family Associates.
Director since 1994
H. C. Bailey, Jr..................... 58 President of H. C. Bailey Company (real estate
Director since 1980 development and investment).
Fredric H. Gould..................... 62 General Partner of Gould Investors L.P.; President
1998 Nominee for Director of REIT Management Group.
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
NAME, POSITION(S) AND PRINCIPAL OCCUPATION AND
TENURE WITH THE COMPANY AGE BUSINESS FOR THE PAST FIVE YEARS(1)
----------------------- --- -----------------------------------
<S> <C> <C>
David H. Hoster II................... 52 Chief Executive Officer of the Company since 1997
Director and President since 1993; and President since 1993; Executive Vice President
Chief Executive Officer since 1997 of the Company until 1993; President of LNH REIT,
Inc. ("LNH") from 1995 to 1996 and its Executive
Vice President from 1992 to 1995; Executive Vice
President of Congress Street Properties, Inc.
("Congress Street"), Eastover Corporation
("Eastover"), The Parkway Company (predecessor to
Parkway Properties, Inc. ("Parkway")), and Rockwood
National Corporation ("Rockwood"), from 1988 to
1994, Citizens Growth Properties from 1988 to 1993,
and EB, Inc. ("EB") from 1993 to 1994.
John N. Palmer....................... 63 Chairman of Mobile Telecommunication Technologies
Director since 1994 since 1989.
David M. Osnos....................... 66 Partner in the law firm of Arent, Fox, Kintner,
Director since 1993 Plotkin & Kahn.
Leland R. Speed...................... 65 Chairman of the Board of the Company and Parkway;
Director since 1978 and Chairman Chief Executive Officer of the Company and Parkway
since 1983 until 1997; Chief Executive Officer of LNH until
1996; Chief Executive Officer of Eastover, Congress
Street and Rockwood until 1994, and EB until 1995.
</TABLE>
- ---------------
(1) Unless otherwise stated, each nominee has held the positions indicated for
at least the past five years.
OTHER DIRECTORSHIPS AND TRUSTEESHIPS
Directors and nominees to the Company's Board of Directors serve on the
Boards of Directors or the Boards of Trustees of the following publicly-held
companies:
<TABLE>
<CAPTION>
NAME COMPANY
---- -------
<S> <C>
Fredric H. Gould..................................... BRT Realty Trust
One Liberty Properties, Inc.
Sunstone Hotel Investors, Inc.
Harold B. Judell..................................... Sizeler Property Investors, Inc.
David M. Osnos....................................... VSE Corporation
Washington Real Estate Investment Trust
John N. Palmer....................................... Entergy Corporation
Mobile Telecommunication Technologies
Deposit Guaranty National Bank
Leland R. Speed...................................... Farm Fish, Inc.
ChemFirst Inc.
KLLM Transport Services, Inc.
Parkway Properties, Inc.
</TABLE>
5
<PAGE> 9
COMMITTEES AND MEETING DATA
The Audit Committee of the Company's Board of Directors consists of Messrs.
Bailey, Judell and Osnos. The Audit Committee met two times during the Company's
1997 fiscal year. The functions performed by this committee consist principally
of conferring with and reviewing the reports of the Company's independent
accountants and bringing to the entire Board of Directors for review those items
relating to audits or to accounting practices which the Audit Committee believes
merit such review.
The Compensation Committee of the Company's Board of Directors consists of
Messrs. Anagnos, Bailey and Palmer. Its function is to recommend compensation
levels for directors, review compensation levels for executive officers and
administer the 1994 Incentive Plan. The Compensation Committee met once during
the Company's 1997 fiscal year.
The Company does not have a standing nominating committee or any committee
performing a similar function.
The Board of Directors held eight meetings during the Company's 1997 fiscal
year. Each director attended at least 75% of the aggregate of the total number
of meetings of the Board of Directors and meetings held by all committees of the
Board of Directors on which he served.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that directors, officers and more than 10 percent
stockholders of the Company file reports with the SEC within the first 10 days
of the month following any purchase or sale of Common Stock. During 1997, no
officer or director of the Company was late in filing a report under Section
16(a).
EXECUTIVE OFFICERS
The following is a list of the Company's executive officers:
<TABLE>
<CAPTION>
NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS
----------------------- --- ---------------------------------
<S> <C> <C>
Leland R. Speed...................... 65 See table under "Nominees."
Director since 1978 and Chairman
since 1983
David H. Hoster II................... 52 See table under "Nominees."
Director and President since 1993,
Chief Executive Officer since 1997
N. Keith McKey....................... 47 Executive Vice President of the Company since 1993,
Executive Vice President since Chief Financial Officer and Secretary since 1992 and
1993, Chief Financial Officer and Treasurer since 1997; Senior Vice President of LNH
Secretary since 1992, Treasurer from 1992 until 1996; Senior Vice President of
since 1997 Congress Street, Eastover, EB, Parkway and Rockwood
until 1994.
Diane W. Hayman...................... 36 Vice President since 1997 and Controller of the
Vice President and Controller Company.
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS
----------------------- --- ---------------------------------
<S> <C> <C>
Marshall A. Loeb..................... 35 Vice President and Asset Manager of the Company
Vice President since 1991.
Jann W. Puckett...................... 50 Vice President of the Company since 1995 and its
Vice President Asset Manager since 1992; Vice President and Asset
Manager of Parkway from 1992 to 1995.
Stewart R. Speed..................... 34 Vice President of the Company since 1997; Vice
Vice President President of Merry Land & Investment (an apartment
REIT) from 1993 to 1997; Asset Manager of GE Capital
(real estate finance) from 1991 to 1993.
</TABLE>
- ---------------
Leland R. Speed, Chairman, is the father of Stewart R. Speed, Vice
President of the Company. There are no other family relationships between any of
the directors or executive officers of the Company.
EXECUTIVE COMPENSATION
The following table summarizes, for the fiscal years ended December 31,
1997, 1996 and 1995, the amount of the compensation paid by the Company to its
Chief Executive Officer and all other executive officers whose cash compensation
during 1997 exceeded $100,000 (the "Named Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
--------------------
ANNUAL COMPENSATION SECURITIES
------------------------------------ UNDERLYING
NAME AND OTHER ANNUAL OPTIONS/ LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION SARS(3) PAYOUTS COMPENSATION(4)
------------------ ---- ------ ----- ------------ ---------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Leland R. Speed...... 1997 $139,731 $ 91,538(2) -0- 47,000 -0- $10,765
Chief Executive 1996 130,000(1) 110,502(2) -0- 37,500 -0- 9,124
Officer until 1995 129,863(1) 139,014(2) -0- -0- -0- 9,172
September 1997
David H. Hoster II... 1997 191,855 124,950(2) -0- 84,000 -0- 13,830
President and 1996 181,865 116,028(2) -0- 52,500 -0- 13,455
Chief Executive 1995 174,745 140,351(2) -0- -0- -0- 13,464
Officer
N. Keith McKey....... 1997 139,947 90,967(2) -0- 47,000 -0- 13,830
Executive Vice 1996 132,404 84,471(2) -0- 37,500 -0- 13,625
President, Chief 1995 127,212 102,256(2) -0- -0- -0- 12,867
Financial Officer,
Treasurer and
Secretary
Marshall A. Loeb..... 1997 86,785 17,500 -0- 16,000 -0- 10,209
Vice President 1996 78,875 14,000 -0- 9,000 -0- 9,315
1995 71,281 -0- -0- -0- -0- 7,224
</TABLE>
7
<PAGE> 11
- ---------------
(1) For 1995 and 1996, Mr. Speed's salary was paid one-half by the Company and
one-half by Parkway, of which he was also Chief Executive Officer until
September 1997. For 1995 and 1996, this amount is the Company's share of Mr.
Speed's compensation.
(2) This is the amount of incentive compensation payable to the Named Officer
under the 1994 Incentive Plan. The amount was paid two-thirds in cash and
one-third in shares of Common Stock.
(3) These options were granted under the Company's 1994 Incentive Plan and
become exercisable with respect to one-half the shares on the first
anniversary date of grant and one-half the shares on the second anniversary
date of grant.
(4) This is the Company's discretionary contribution to its 401(k) Plan for the
Named Officer's benefit and the amount of premium paid by the Company for
group term life insurance on the Named Officer's life. During 1995 and 1996,
the Company reimbursed Parkway for one-half of Parkway's contribution to its
401(k) plan for Mr. Speed's benefit, and the amounts reimbursed by the
Company to Parkway with respect thereto are included in this column.
Option Grants. The following table gives information with respect to
options granted to the Named Officers during the year ended December 31, 1997.
The "Potential Realizable Value" columns assume that the price of the shares of
Common Stock will appreciate at annual rates of 5% and 10%, respectively, during
the term of the options. The prices of the shares of Common Stock on the dates
of grant were $17.91 and $22.00. There can be no assurance that such
appreciation will take place.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- ------------------------------------------------------------------------------------- ---------------------
(a) (b) (c) (d) (e) (f) (g)
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL
OPTIONS/ OPTIONS/SARS EXERCISE
SARS GRANTED TO OR BASE
GRANTED EMPLOYEES PRICE EXPIRATION
NAME (#) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- -------------- -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Leland R. Speed................. 21,000(1) 7.3% $17.91 02/02/07 $236,949 $ 598,015
26,000(2) 9.1 22.00 10/08/07 360,360 909,480
David H. Hoster II.............. 30,000(1) 10.5 17.91 02/02/07 338,499 854,307
54,000(2) 18.8 22.00 10/08/07 748,440 1,351,620
N. Keith McKey.................. 21,000(1) 7.3 17.91 02/02/07 236,949 598,015
26,000(2) 9.1 22.00 10/08/07 360,360 909,480
Marshall A. Loeb................ 6,000(1) 2.1 17.91 02/02/07 67,700 170,861
10,000(2) 3.5 22.00 10/08/07 138,600 242,340
</TABLE>
- ---------------
(1) These options were granted on February 3, 1997. They become exercisable
one-half on the first anniversary of the date of grant and one-half on the
second anniversary of the date of grant.
(2) These options were granted on October 9, 1997. They become exercisable
one-half on the first anniversary of the date of grant and one-half on the
second anniversary of the date of grant.
8
<PAGE> 12
Option Exercises and Year End Values. No options were exercised by Messrs.
McKey and Loeb during 1997. The following table shows the value realized by
Messrs. Speed and Hoster upon the exercise of options, and the year end value of
unexercised in-the-money options held by the Named Officers. Year end values are
based upon the closing price of shares of Common Stock on the New York Stock
Exchange, Inc. on December 31, 1997 ($21.625).
AGGREGATED OPTIONS/SAR EXERCISES WITH LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
SHARES VALUE OF UNEXERCISED
ACQUIRED VALUE NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
NAME ON EXERCISE REALIZED OPTIONS AT FY-END(#) AT FY-END($)
---- ----------- -------- --------------------- --------------------
EXERCISABLE/UNEXERCISABLE(1) EXERCISABLE/UNEXERCISABLE
---------------------------- -------------------------
<S> <C> <C> <C> <C>
Leland R. Speed................. 7,892 $70,673 85,858/65,750 $733,046/$210,109
Chief Executive Officer
until September 1997
David H. Hoster II.............. 4,000 $23,160 70,465/110,250 $580,877/$296,381
President and Chief
Executive Officer
N. Keith McKey.................. N/A N/A 56,250/65,750 $467,906/$210,109
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
Marshall A. Loeb................ N/A N/A 7,500/20,500 $60,578/$53,993
Vice President
</TABLE>
- ---------------
(1) These options, both exercisable and unexercisable, represent options granted
to the Named Officer under the 1994 Incentive Plan.
Compensation Committee Report. The Compensation Committee of the Board of
Directors consists of Messrs. Bailey, Palmer and Anagnos. The Compensation
Committee believes that the main purpose of base compensation is to provide
sufficient base compensation to the executive officers of the Company in
relation to salary levels for other real estate companies and the officer's
level of responsibility. Mr. Speed served as the Company's Chief Executive
Officer until September 1997, after which Mr. Hoster became the Company's Chief
Executive Officer. In setting the base compensation of Mr. Speed, the
Compensation Committee took account of the fact that Mr. Speed also was the
Chairman and a salaried officer of Parkway, another real estate investment
trust. The Compensation Committee considered a number of other factors in
setting his base compensation, the most important of which were the level of
compensation paid to the chief executive officers of other real estate companies
the same relative size as the Company, the success of the Company's recent
program of acquiring new properties and engaging in business combination
transactions with other REITs and his importance in delineating and implementing
the Company's strategic plans. The Compensation Committee considered the same
factors in setting the base salary of Mr. Hoster.
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The Compensation Committee has determined that the primary goals of the
Company's compensation policies should be as follows:
- To provide total compensation opportunities for executive officers which
are competitive with those provided to persons in similar positions with
which the Company competes for employees.
- To strengthen the mutuality of interest between management and
stockholders through the use of incentive compensation directly related
to corporate performance and through the use of the stock-based
incentives that result in increased Common Stock ownership by executive
officers.
The Compensation Committee believes that incentive compensation payable to
the executive officers of the Company should be based upon the Company's
performance and align the interests of management and the Company's
stockholders. In 1994, the Compensation Committee, in conjunction with an
independent compensation consultant, formulated the 1994 Incentive Plan. The
1994 Incentive Plan was approved by the Company stockholders in December 1994.
Under the 1994 Incentive Plan, each year the Compensation Committee establishes
a goal for funds from operations ("FFO") per share, a minimum level for FFO per
share below which incentive compensation should not be paid, and an incentive
award payout objective for each executive officer. Two-thirds of any incentive
award is paid in cash and one-third in shares of Common Stock. For 1997, the
Compensation Committee computed target FFO before bonus accruals of $1.73 as the
minimum FFO per share necessary for any bonus to be paid, and $1.85 as the
target FFO per share under which management would receive their target bonuses,
and $1.98 as the target FFO under which management would receive 200% of their
target bonuses. To the extent the Company's actual FFO per share exceeded $1.85
but was less than $1.98, the target bonus amounts would be increased pro rata.
The target bonus amounts were 50% of total base salary for Messrs. Speed, Hoster
and McKey. The Compensation Committee determined the FFO targets based upon its
analysis of the Company's internal projected financial results for 1997 and the
estimates of 1997 FFO prepared by independent securities analysts who followed
the Company. The Compensation Committee believed that the stockholders of the
Company would be benefitted significantly if the FFO goal was met and would be
further benefitted if such goal were exceeded, and that management should be
compensated for the benefits derived by the Company's stockholders. The target
bonus amounts were set by the Compensation Committee after consultation with the
compensation consultant who helped the Compensation Committee formulate the 1994
Incentive Plan.
The Company's 1997 FFO per share before bonus awards was $1.89. After
consideration, the Compensation Committee believed that each of Mr. Speed, Mr.
McKey and Mr. Hoster should be paid the amount of incentive compensation
provided by the above formula, under which Messrs. Speed, Hoster and McKey
received bonuses with respect to 1997 of $91,538, $124,950 and $90,967,
respectively, two-thirds of which were paid in cash and one-third of which was
paid in shares of Common Stock.
The Compensation Committee also believes that stock based incentive
compensation in the form of stock options helps to align the interest of the
management of the Company and its stockholders. During 1997, the Compensation
Committee granted options to the Named Officers of the Company as described
under "Option Grants." In determining the number of options to be granted, the
Compensation Committee took into account the executive's current base
compensation, the amount of stock-based compensation previously granted to the
executive, the executive's duties and performance, and competitive industry
practices.
H.C. BAILEY, JR.
JOHN N. PALMER
ALEXANDER G. ANAGNOS
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This Compensation Committee Report shall not be deemed incorporated by
reference by any general statement incorporating by reference this document or
any portion thereof into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, and shall not
otherwise be deemed filed under such acts.
Performance Comparison. Set forth below is a line graph comparing the
percentage change in the cumulative return to stockholders on shares of Common
Stock over the five years ending December 31, 1997 against the cumulative return
of the Standard & Poor's 500 ("S&P 500"), and the Equity REIT Index prepared by
the National Association of Real Estate Investment Trusts ("NAREIT Equity").
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) The Company S&P 500 NAREIT Equity
<S> <C> <C> <C>
1992 100 100 100
1993 132 110 120
1994 126 111 123
1995 163 153 142
1996 226 188 192
1997 282 251 231
</TABLE>
Directors' Fees. Under the Company's standard compensation arrangements
with directors (except Mr. Speed and Mr. Hoster who are salaried officers),
directors are paid a monthly stipend of $500, plus $1,000 and reimbursement of
actual expenses for attendance at each meeting of the Board of Directors and
$750 and reimbursement of expenses for each meeting of a committee established
by the Board of Directors. Only one fee is paid in the event more than one
meeting is held on a single day.
Directors Stock Option Plan. At the 1991 annual meeting, the stockholders
of the Company approved the Directors Plan. The Directors Plan authorizes the
issuance of options for up to 150,000 shares of Common Stock to directors of the
Company who are not, and have not been for at least one year prior to the date
of determination, employees of the Company ("Non-Employee Directors"). Under the
Directors Plan, each Non-Employee Director of the Company on March 15, 1991 was
automatically granted an option to purchase 7,500 shares of Common Stock. Each
person who first becomes a Non-Employee Director after March 15, 1991 will
automatically be granted an option to purchase 7,500 shares of Common Stock on
the date the person becomes a Non-Employee Director, if such shares of Common
Stock are available. Each Non-Employee Director will also be granted an option
to purchase 2,250 additional shares of Common Stock on the date of any annual
meeting at which such Non-Employee Director is reelected to the Board of
Directors. The option exercise price is the
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<PAGE> 15
closing price of a share of Common Stock if shares of Common Stock are listed on
an exchange or the average between the bid and the asked price for the date if
the shares of Common Stock are traded over-the-counter (or, if no shares of
Common Stock were publicly traded on that date, the next preceding date that
such shares of Common Stock were so traded). Such options are exercisable in
full on the date of grant and expire ten years after the date of grant, or, if
earlier, six months after the termination of the optionee's service as a
Non-Employee Director, unless such service is terminated by reason of death, in
which case the optionee's legal representative shall have one year in which to
exercise the option.
One director exercised options under the Directors Plan during 1997. On
February 17, 1997, Mr. Judell exercised options to purchase 5,000 shares of
Common Stock at an exercise price of $16.00.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
Cost Sharing Arrangement with Parkway. The Company and Parkway shared the
same office space at One Jackson Place in Jackson, Mississippi until April 1997.
The Company and Parkway shared the rent with respect to their shared office
space based upon the number of employees each had in such office space divided
by the total number of employees of both companies using the office space. In
addition, Parkway and the Company also shared the expenses of certain office
supplies and equipment, and the Company reimbursed Parkway for the services of
certain employees of Parkway who performed services for the Company on an as
requested basis. The Company and Parkway continue to share the services of Mr.
Speed and his administrative assistant and expenses related thereto are shared
equally between the Company and Parkway. During the year ended December 31,
1997, Parkway paid the Company $34,017 under this cost-sharing arrangement.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP as the Company's
auditors for the year ending December 31, 1998. A representative of KPMG Peat
Marwick LLP is expected to be present at the Meeting and will have an
opportunity to make a statement, if he so desires, and will be available to
respond to appropriate questions.
PROPOSAL NO. 2 -- OTHER MATTERS
The management of the Company does not know of any other matters to come
before the Meeting. However, if any other matters come before the Meeting, it is
the intention of the persons designated as proxies to vote in accordance with
their judgment on such matters.
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STOCKHOLDER PROPOSALS FOR THE
1999 ANNUAL MEETING OF STOCKHOLDERS
Any Company stockholder who wishes to submit a proposal for presentation at
the Company's 1999 Annual Meeting of Stockholders must submit such proposal to
the Company at its office at 300 One Jackson Place, 188 East Capitol Street,
Jackson, Mississippi 39201, Attention: Secretary no later than December 31,
1998, in order to be considered for inclusion, if appropriate, in the Company's
proxy statement and form of proxy relating to its 1999 Annual Meeting of
Stockholders.
By Order Of The Board Of Directors
/s/ N. Keith McKey
N. KEITH MCKEY
Executive Vice President, Chief
Financial Officer, Treasurer and
Secretary
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PROXY PROXY
EASTGROUP PROPERTIES, INC.
300 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints DAVID H. HOSTER II and N. KEITH McKEY,
or either of them, Proxies for the undersigned, each with full power of
substitution, and hereby authorizes them to represent and to vote all shares of
common stock, $0.0001 par value per share, of EastGroup Properties, Inc. (the
"Company"), which the undersigned would be entitled to vote at the Annual
Meeting of Stockholders to be held at the Company's offices, 300 One Jackson
Place, 188 East Capitol Street, Jackson, Mississippi, on Thursday, June 4,
1998, at 9:00 a.m., Jackson time, or any adjournment or postponement thereof,
and directs that the shares represented by this Proxy shall be voted as
indicated on the reverse.
PLEASE SIGN, DATE, DETACH AND RETRUN THIS PROXY CARD
IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.
(Continued and to be signed on reverse side.)
- -------------------------------------------------------------------------------
<PAGE> 18
<TABLE>
<CAPTION>
EASTGROUP PROPERTIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
<S> <C> <C>
1. Election of Directors -- For Withhold For All 2. In their discretion, the Proxies are authorized to vote upon
Nominees: Alexander G. Anagnos; All All Except such other business as may properly come before the meeting
H. C. Bailey, Jr.; / / / / / / or any adjournment thereof.
Fredric H. Gould;
David H. Hoster II;
David M. Osnos; This proxy, when properly executed, will be voted in the
John N. Palmer; and manner directed herein by the undersigned stockholder. If no
Leland R. Speed. direction is made, this proxy will be voted FOR the matter
indicated in 1 above and will be voted in the discretion of
_____________________________________ the Proxies named herein with respect to any matters referred
(Except for nominee(s) written above) to in 2 above. You are encouraged to specify your choices by
marking the appropriate boxes, but you need not mark any boxes
if you wish to vote in accordance with the Board of Directors'
recommendations. The Proxies cannot vote your shares unless
you sign and return this card.
Dated: ________________________ , 1998
Signature(s) _________________________________________________
______________________________________________________________
PLEASE SIGN EXACTLY AS NAME(S) APPEAR ON STOCK
CERTIFICATE(S). A corporation is requested to sign its name by
its President or other authorized officer, with the office
held so designated. A partnership should sign in the
partnership name by an authorized person. Executors, trustees,
administrators, etc., are requested to indicate the capacity
in which they are signing. JOINT TENANTS SHOULD BOTH SIGN.
- -----------------------------------------------------------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
PLEASE SIGN, DATE, DETACH AND RETURN THIS PROXY CARD
IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.
</TABLE>
