SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): AUGUST 5, 1998
MGI PROPERTIES
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(Exact name of registrant as specified in its charter)
MASSACHUSETTS 1-6833 04-6268740
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
ONE WINTHROP SQUARE, BOSTON, MASSACHUSETTS 02110
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (617) 422-6000
<PAGE>
Item 5. OTHER EVENTS.
On August 12, 1998, MGI Properties (NYSE: MGI) (the "Trust")
announced that its Board of Trustees unanimously approved a plan of complete
liquidation and termination of the Trust (the "Plan") and directed that the Plan
be submitted to the Trust's shareholders for approval. The Trust intends to
submit the Plan to its shareholders for approval in October 1998. There can be
no assurance with respect to the results that may or may not be achieved in the
implementation of the Plan or the net realizable value upon liquidation of the
Trust's properties.
The Trust also announced that it has retained Fallon Hines &
O'Connor, a Trammell Crow Company, as the Trust's exclusive sales agent with
respect to property sales pursuant to the Plan and Ernst & Young LLP as the
Trust's strategic and financial advisor.
On June 18, 1998, the Trust publicly announced that its Board
of Trustees had decided to undertake a review of strategic alternatives
available to the Trust to maximize shareholder value, including a possible
liquidation of the Trust's properties.
For additional information, reference is made to the news
release which is incorporated herein by reference and is attached hereto as
Exhibit 99.1.
On August 5, 1998, the Administrative-Audit Committee of the
Trust's Board of Trustees approved and adopted the Long-Term Performance Plan, a
copy of which is incorporated herein by reference and is attached hereto as
Exhibit 10.1.
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<PAGE>
This Current Report on Form 8-K contains 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. These forward-looking
statements are dependent on a number of factors which could cause actual results
to differ materially from those expressed or implied in the forward-looking
statements. Such factors include, among other things, the risks of future action
or inaction by the Board of Trustees and/or shareholders (and the actual results
thereof) with respect to the Plan (including the possibility of litigation
pertaining thereto), the net realizable value of the properties upon liquidation
thereof, current market conditions remaining the same or improving, maintaining
the current occupancy and rent levels at the properties, as well as those risk
factors set forth under "Forward-Looking Statements," in Management's Discussion
and Analysis of Financial Condition and Results of Operations in the Trust's
Form 10-K for the year ended November 30, 1997 and in its most recent report on
Form 10-Q and Current Report on Form 8-K, dated June 18, 1998.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(C) EXHIBITS
EXHIBIT NO. EXHIBIT
10.1 Long-Term Performance Plan of MGI Properties
dated August 5, 1998.
99.1 News Release of MGI Properties dated August
12, 1998.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MGI PROPERTIES
(Registrant)
Dated: August 12, 1998 By: /s/ Phillip C. Vitali
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Name: Phillip C. Vitali
Title: Executive Vice President and
Treasurer
(Chief Financial Officer)
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<PAGE>
EXHIBIT INDEX
10.1 Long-Term Performance Plan of MGI Properties dated August 5,
1998.
99.1 News Release of MGI Properties dated August 12, 1998.
MGI PROPERTIES
LONG-TERM PERFORMANCE PLAN AS ADOPTED ON AUGUST 5, 1998
In accordance with the resolutions adopted by the Administrative-Audit
Committee ("Committee") of MGI Properties (the "Trust") at a meeting duly called
and held on August 5, 1998, the following long-term performance plan was adopted
for the benefit of the certain key employees of the Trust, as
designated below:
1. Said key employees will receive performance bonuses payable in cash,
provided that the future common share price of the Trust on the New York Stock
Exchange reaches the following average levels for the periods specified below:
DURING YEARS 1998 AND 1999
<TABLE>
<CAPTION>
OFFICERS LESS THAN $28/SHARE $28/SHARE $30/SHARE $32/SHARE
- -------- ------------------- --------- --------- ---------
<S> <C> <C> <C> <C>
W. Pearce Coues None 1 x 1998* 2 x 1998 4 x 1998
Bonus Bonus Bonus
Phillip C. Vitali None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
Karl W. Weller None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
Robert Ware None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
Jean M. None 1 x 1998 2 x 1998 4 x 1998
Harrington Bonus Bonus Bonus
David P. Morency None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
Jackie K. Eamer None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
David D. Wamester None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
</TABLE>
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* The 1998 Bonus referred to in each case was that amount awarded by the
Committee on August 5, 1998.
<PAGE>
DURING YEAR 2000
<TABLE>
<CAPTION>
OFFICERS LESS THAN $30/SHARE $30/SHARE $32/SHARE $34/SHARE
- -------- ------------------- --------- --------- ---------
<S> <C> <C> <C> <C>
W. Pearce Coues None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
Phillip C. Vitali None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
Karl W. Weller None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
Robert Ware None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
Jean M. None 1 x 1998 2 x 1998 4 x 1998
Harrington Bonus Bonus Bonus
David P. Morency None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
Jackie K. Eamer None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
David D. Wamester None 1 x 1998 2 x 1998 4 x 1998
Bonus Bonus Bonus
</TABLE>
2. The aforesaid stock price thresholds are required to be maintained
for a period of six consecutive months or any six months out of a calendar year,
meaning that the average closing stock price on the New York Stock Exchange (or
any exchange on which the common shares are subsequently traded) during any
six-month period within the specified time frame set forth in Section 1 shall be
at or above such threshold prices. If the aforesaid stock price thresholds are
achieved and the Trust is not able to fulfill the foregoing calendar measurement
period by reason of the occurrence of any corporate transaction or extraordinary
distributions to shareholders or other like events, the required
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<PAGE>
calendar thresholds should be reduced to the actual period the stock price has
maintained the threshold levels.
3. The Committee shall have authority and sole discretion to pro-rate
and adjust the amount of the share performance bonus payments if the stock
prices fall within the parameters of the foregoing threshold prices. (For
example, if the stock price reaches $31 for the requisite time period during
1998-1999, the Committee may award a bonus of up to 3 x 1998 Bonus.)
4. The Committee shall have sole discretion to adjust, by way of
increase or decrease, the foregoing threshold prices by reason of the occurrence
of any corporate transactions or extraordinary dividends to shareholders or
other like events where the Committee deems it equitable and appropriate to make
such an adjustment or to adjust the measuring period or the timing of any
payment otherwise contemplated under Section 5 below, as deemed appropriate to
accomplish the objectives of this Plan. The Committee shall also have sole
discretion to reduce the foregoing calendar measurement periods based on the
Trust's relative performance with respect to factors such as total return, FFO
growth, leasing success and growth in property net operating income versus
budget and prior year levels.
5. Subject to the provisions of Section 4 above, no performance bonus
awarded under this Plan shall be payable prior to January 1, 2000, provided that
the employee also continues to be employed by the Trust through and including
the date of such payment, unless such employment has previously been terminated
by
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<PAGE>
the Trust without "Cause" (in which event payment may be accelerated by the
Committee). Payment of any performance bonus hereunder, shall, in any event, be
made no later than January 10, 2001. In the event a covered employee is
previously terminated for Cause, no performance bonus shall be payable to such
Employee under this Plan. The following shall constitute Cause: (i) the willful
and repeated failure of Employee to perform any material duties hereunder or
gross negligence of Employee in the performance of such duties, and if such
failure or gross negligence is susceptible of cure by Employee, the failure to
effect such cure within 20 days after written notice of such failure or gross
negligence is given to Employee; (ii) excessive use of alcohol or illegal drugs
interfering with the performance of Employee's duties hereunder; (iii) theft,
embezzlement, fraud, misappropriation of funds, other material acts of
dishonesty in the course of employment or the violation of any law or ethical
rule relating to Employee's employment; (iv) or the conviction of a felony or
other crime involving moral turpitude by Employee. An action shall be considered
"willful" if it is done intentionally, purposely or knowingly, distinguished
from an act done carelessly, thoughtlessly or inadvertently.
August 12, 1998
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FOR IMMEDIATE RELEASE
August 12, 1998
BOARD OF TRUSTEES OF MGI PROPERTIES
VOTES TO SUBMIT PLAN OF LIQUIDATION
TO SHAREHOLDER VOTE
BOSTON, MASSACHUSETTS . . . MGI Properties, ("MGI") (NYSE:MGI),
announced today that its Board of Trustees approved a plan of complete
liquidation and termination of the Trust (the "Plan") and directed that the Plan
be submitted to the Trust's shareholders for approval. The Trust intends to
submit the Plan to its shareholders for approval in October 1998.
W. Pearce Coues, Chairman of the Board, stated that "management
estimates that sales of the Trust's assets pursuant to the Plan will be made at
prices that will yield aggregate net cash distributions of between $30 per share
and $33 per share; however, no assurance can be given that per share net cash
distributions will fall within such range." The timing of any distributions of
such net cash proceeds will be affected by, among other things, the timing of
sales of assets, income tax considerations and the establishment of reserves.
Accordingly, no assurances can be made as to the actual amount or timing of such
distributions, which could be made over a substantial period of time. The Plan
and other pertinent information relating thereto will be set forth in the
definitive proxy statement distributed to shareholders following its submission
to the Securities and Exchange Commission and the Commission's review thereof.
There can be no assurance with respect to the results that may or may not be
achieved in the implementation of the Plan or the net realizable value upon
liquidation of the Trust's properties.
MGI also announced today that it has retained Fallon Hines & O'Connor,
a Trammell Crow Company, as the Trust's exclusive sales agent with respect to
property sales pursuant to the Plan and Ernst & Young LLP as the Trust's
strategic and financial advisor.
On June 18, 1998, the Trust publicly announced that its Board of
Trustees had decided to undertake a review of strategic alternatives available
to the Trust to maximize shareholder value, including a possible liquidation of
the Trust's properties.
# # #
FOR FURTHER INFORMATION CONTACT:
Phillip C. Vitali, Executive Vice President and Treasurer (617) 422-6000
<PAGE>
THIS PRESS RELEASE CONTAINS 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. THESE FORWARD-LOOKING STATEMENTS ARE DEPENDENT
ON A NUMBER OF FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE EXPRESSED OR IMPLIED IN THE FORWARD-LOOKING STATEMENTS. SUCH FACTORS
INCLUDE, AMONG OTHER THINGS, THE RISKS OF FUTURE ACTION OR INACTION BY THE BOARD
OF TRUSTEES AND/OR SHAREHOLDERS (AND THE ACTUAL RESULTS THEREOF) WITH RESPECT TO
THE SUBJECT MATTER OF THE FOREGOING PRESS RELEASE (INCLUDING THE POSSIBILITY OF
LITIGATION PERTAINING THERETO); THE NET REALIZABLE VALUE OF THE PROPERTIES IN
THE EVENT OF THE LIQUIDATION THEREOF; CURRENT MARKET CONDITIONS REMAINING THE
SAME OR IMPROVING; MAINTAINING THE CURRENT OCCUPANCY AND RENT LEVELS AT THE
PROPERTIES; AS WELL AS THOSE RISK FACTORS SET FORTH UNDER "FORWARD-LOOKING
STATEMENTS" IN MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS IN MGI'S FORM 10-K FOR THE YEAR ENDED NOVEMBER 30, 1997
AND IN ITS MOST RECENT REPORT ON FORM 10-Q AND CURRENT REPORT ON FORM 8-K, DATED
JUNE 18, 1998.
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