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SCHEDULE 14A
(RULE 14A-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of
the Commission Only
(as permitted by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|X| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Cornerstone Properties Inc.
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(Name of Registrant as Specified In Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| 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:
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THE FOLLOWING IS THE TEXT OF A COMMUNICATION DISSEMINATED BY
CORNERSTONE PROPERTIES INC. TO ITS EMPLOYEES ON FEBRUARY 17, 2000.
* * * * *
Attached ( in a question and answer format) is the initial edition of
"Transition", a newsletter we intend to publish regularly to provide information
on merger related issues and to answer questions you have raised. We have
attempted to answer many of the most frequently asked questions in this initial
publication. In future editions we will try to answer the questions we were not
able to address here, as well as additional questions that may come up.
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Transition . . .
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... A COMMUNICATION FOR CORNERSTONE EMPLOYEES AS WE
MERGE WITH EQUITY OFFICE.
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WHY HAS CORNERSTONE DECIDED TO MERGE WITH EQUITY OFFICE?
The Board of Directors of Cornerstone, when presented with the offer from Equity
Office, felt that the merger afforded the shareholders of Cornerstone the best
opportunity to realize full economic value from the assets of Cornerstone. The
Board considered the economics of the transaction as well as the strategic
benefits of the merger resulting from greater scale, market dominance, and
greater financial capability. As we shared in the press release and in our
letter to employees, both organizations see this as a great strategic fit. Our
portfolio of assets is a terrific complement to Equity Office's portfolio. We
also share a similar commitment to superior customer service. This is a great
opportunity for us to take what we've done at the local level and build on it
across a national portfolio.
CAN YOU PROVIDE SOME BACKGROUND ABOUT EQUITY OFFICE?
Equity Office (NYSE: EOP) is the nation's largest publicly held owner and
manager of office properties, with a national portfolio of 291 buildings
comprising 76.6 million square feet in 23 states and the District of Columbia.
They have 1,700 employees working in six regional locations, their corporate
office in Chicago and properties across the country. We'll be sharing more
information about Equity Office over the coming weeks. And from February 28
through March 10, Equity Office's management team will be making presentations
to our employees. For more information, you can also go to Equity Office's
website at www.equityoffice.com.
WHAT IS THE EFFECTIVE DATE OF THE MERGER?
At this time, we anticipate the effective date of the merger to be around July
1, 2000. This date, however, is subject to numerous factors which we do not
control. As we get closer to that date, we will keep you updated on our
progress. In the meantime, you should continue on with your job
responsibilities.
WHY DOES IT TAKE SO LONG TO CLOSE?
The merger must be approved by the shareholders of both companies. This requires
preparation and filing with the Securities & Exchange Commission of a proxy
statement to
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shareholders, and a waiting period before the shareholders meetings are held.
The transaction will be closed immediately following the approval of the
shareholders of both companies.
HOW AND WHEN WILL EQUITY OFFICE DECIDE WHAT CORNERSTONE EMPLOYEES WILL BE
OFFERED JOBS?
It will obviously take some time for Equity Office to become familiar with
Cornerstone and our employees and determine what its ongoing personnel needs
will be. Equity Office will begin this evaluation process immediately and notify
most employees of their status by the end of March.
WILL THE MERGER AFFECT OUR PREVIOUSLY ANNOUNCED PROPERTY DISPOSITION PROGRAM?
The disposition program is being reconsidered, and many of the properties that
we intended to sell will be retained. We currently anticipate, however, that at
least the two properties which are currently under contract (2700 Ygnacio and
1600 South Main) will be sold. We will keep you advised as to the status of
these and other dispositions should they occur.
WILL THERE BE A SEVERANCE PROGRAM FOR EMPLOYEES WHO ARE NOT OFFERED JOBS WITH
EQUITY OFFICE?
Yes. There will be severance provisions in place for employees terminated by
Equity Office as a result of the merger. Equity Office and Cornerstone are
working on these provisions and expect to announce the details next week.
WHEN WILL PEOPLE WHO ARE NOT OFFERED JOBS BE TERMINATED--AT THE CLOSING OR WHEN
THE DECISION IS MADE NOT TO MAKE A JOB OFFER?
We expect that employees whose jobs are eliminated (except for staff at
properties that are sold before the merger) will remain in the employment of
Cornerstone until the closing of the transaction. However, there will be some
employees needed for some time to handle integration issues post-closing.
IF I DECIDE TO LEAVE CORNERSTONE PRIOR TO THE MERGER DATE, WILL I STILL RECEIVE
THE SEVERANCE PACKAGE?
No. Only employees who are still employed on the effective date of the merger or
a later date as needed to meet business needs and whose employment is in good
standing, will receive the severance package if their position is eliminated. If
you leave Cornerstone prior to that date, you will not be eligible for
severance, unless your property is sold before the merger. An exception to this
may be that management determines that your position is no longer required
through the merger date and decides to eliminate your position earlier.
IF I AM OFFERED A POSITION WITH EQUITY OFFICE AFTER THE MERGER AND WISH TO
DECLINE, WILL I STILL GET A SEVERANCE PACKAGE?
No. If you decline a job offer that is comparable to the position you have
presently at Cornerstone, you will not receive the severance package. However,
if an offer is made that is not comparable or that may create a hardship for you
(e.g. an unreasonable commute), you may elect to decline the offer and still
receive the severance package.
IF MY POSITION IS ELIMINATED, WILL I BE CONSIDERED FOR OTHER POSITIONS IF THEY
BECOME AVAILABLE?
Yes. Employees impacted by this merger will be considered for other positions in
the new organization and you will have access to job postings. Employees will be
expected to go
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through a standard interview process in which the company will hire the
best-qualified candidate.
IF I LOSE MY JOB WITH CORNERSTONE, WILL I BE ELIGIBLE FOR REHIRE?
Yes. Employees who leave the company in good standing will be eligible for
rehire.
IF I STAY WITH THE NEW COMPANY, WILL I RETAIN ALL OF MY YEARS OF SERVICE CREDIT
I PRESENTLY HAVE WITH CORNERSTONE?
Employees who will become part of Equity Office will retain their years of
service credit. This includes time worked under the old Cornerstone Properties
and William Wilson & Associates companies.
CAN I COLLECT UNEMPLOYMENT INSURANCE AFTER MY TERMINATION DATE?
Depending on the eligibility rules of your state's unemployment compensation
insurance, if your job is terminated because of the merger, you may be eligible
for unemployment benefits after your termination date. WILL THERE BE ANY
OUTPLACEMENT SERVICES PROVIDED TO EMPLOYEES WHO ARE TERMINATED?
Yes. Some outplacement assistance will be provided to terminated employees.
Details will be provided to impacted employees as part of their severance
package.
WILL THERE BE ADDITIONAL POSITIONS ELIMINATED AFTER THE MERGER?
Once the new organization is fully implemented, we do not anticipate any further
reductions, except for scheduled property dispositions which do not close before
the merger. Having said that, we are always subject to conditions in the
marketplace and can't anticipate what the future may bring. However, we don't
expect additional reductions in the near term once the new organization is in
place.
HOW WILL THE COMPANY HANDLE REFERENCE CHECKS?
It is the policy of both Equity Office and Cornerstone to verify only dates of
employment, title, and (with a written release from you) salary. No other
information will be provided.
WHAT WILL HAPPEN WITH MY 401(K) MONEY?
Your 401(k) plan will continue under its current terms at least until the
closing of the transaction. At that point, Equity Office's current plans are to
merge the Cornerstone 401(k) plan as soon as it is possible following the
closing. Employer contributions will not automatically vest upon the closing,
and instead these contributions will continue to vest under your current vesting
schedule based on past service with Cornerstone and its predecessors and future
service with Equity Office. There are no current plans to accelerate vesting in
the 401(k) employer contribution account of those Cornerstone employees whose
employment is terminated in connection with the transaction.
If your position is eliminated and your employment terminates, a distribution
will be available from the Cornerstone 401(k) plan. If your vested account
balance is $5,000 or less, your account balance automatically will be
distributed to you as soon as practicable after your termination, generally
within 30 days of your termination date. The distribution can be rolled into a
new employer's 401(k) plan or into an IRA. If your vested account balance is
over $5,000, you can leave your money in the Company's 401(k) plan and elect a
distribution or rollover at any later time prior to normal retirement age. More
details will be provided on the date of termination or you can refer to your
401(k) brochure.
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WHAT WILL HAPPEN WITH MY HEALTH BENEFITS?
Your current health benefits plans will continue through to the closing date of
the merger and for a transition period following the merger closing date. As a
result, these benefits will not immediately be changed for those Cornerstone
employees who become regular EOP employees.
Should your position be eliminated and your job terminated, you will have the
right to elect to continue your health care coverages under COBRA. COBRA does
not cover short-term disability, long-term disability, life insurance, or
accidental death and dismemberment insurance.
WHAT WILL BE THE IMPACT OF THIS TRANSACTION ON CORNERSTONE GRANTS AND STOCK
OPTIONS?
All outstanding Cornerstone stock options, including those issued in January
2000, will be fully vested at the time the transaction closes. At that time,
there will be two alternatives available for employees holding options:
First, you may elect, for a brief period of time, to have your outstanding
options cancelled and Equity Office will pay you in cash the difference between
$18.00 per share and the strike price of your options, less applicable
withholdings.
Second, you may elect to convert your options into options to purchase Equity
Office stock at the .7009 exchange ratio. For example, if you owned options to
purchase 100 shares of Cornerstone's stock at a price of $16.00 per share, you
would receive an option to purchase 70 (.7009 x 100) shares of Equity Office
stock at a price of $22.83 per share ($16.00 / .7009). Employees who are
terminated will have one year after their termination date to exercise their
options. Employees who continue with Equity Office will be subject to the terms
of their existing Cornerstone Option Agreements.
The number of shares received in the conversion will be rounded down to the
nearest whole share. This was done to preserve the favorable tax treatment of
the option.
WHAT WILL HAPPEN WITH RESTRICTED STOCK?
Restricted stock grants, including restricted stock grants made by WWA
Shareholder's, LLC to former William Wilson & Associates employees, will vest as
of the closing. Restricted stockholders will have the opportunity to elect to
receive cash and/or Equity Office stock in exchange for the shares of restricted
stock, in accordance with the rules applicable to all other holders of
Cornerstone common stock under the merger agreement. Upon vesting, shares (or,
as applicable, cash) will be withheld to cover applicable withholding taxes.
CAN I (DIRECTLY OR THROUGH MY 401(K) PLAN) BUY CORNERSTONE OR EOP SHARES?
Employees below the position of senior vice president who do not possess
material non-public information regarding the merger may buy or sell Cornerstone
or EOP shares directly or through their 401(k) plans. Questions regarding your
ability to trade should be addressed to Cornerstone's compliance officer, Tom
Loftus.
WHAT IS EQUITY OFFICE'S BENEFITS PACKAGE?
Equity Office offers a comprehensive and competitive benefits package that is
comparable to Cornerstone. Employees will be receiving complete information on
the overall program offered by EOP during the upcoming employee meetings.
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WHEN CAN WE EXPECT REPRESENTATIVES OF EQUITY OFFICE TO VISIT OUR PROPERTIES AND
OFFICES? WILL THEY VISIT ALL OF THEM?
Members of Equity Office's senior management team and human resources personnel
will begin employee meetings on February 28. Those meetings are expected to be
wrapped up by March 10 and it is expected they will cover most locations and all
employees.
WHAT KIND OF ORIENTATION WILL BE PROVIDED TO EMPLOYEES WHO ARE RETAINED BY
EQUITY OFFICE?
Equity Office has a thorough orientation program, known as "Trailblazer," which
will be provided to employees during early June.
DOES EQUITY OFFICE USE THE CTI SYSTEM?
Equity Office is in the process of implementing an enterprise-wide JD Edwards
system. A team will be formed to develop an integration and transition plan to a
common system over time.
WILL BILL OR JOHN OR ANY OF OUR SENIOR EXECUTIVES CONTINUE ON WITH EQUITY
OFFICE?
As previously announced, Bill and John will be on the Equity Office Board of
Trustees.
As noted above, it will take some time for Equity Office to become familiar with
Cornerstone and its employees and determine what ongoing personnel needs will
be.
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The following legend is required by SEC regulations to appear on all written
communications relating to the Merger:
Investors are urged to read the joint proxy statement/prospectus regarding the
merger when it becomes available because it will contain important information.
Investors may obtain a free copy of the joint proxy statement/prospectus (when
it is available) at the SEC's web site at www.sec.gov. The joint proxy
statement/prospectus may also be obtained for free by directing a request to
Cornerstone Properties Inc., Tower 56, 126 East 56th Street, New York, New York
10022, Attention: Corporate Secretary, telephone: (212) 605-7100.
The identity of the persons who, under SEC rules, may be considered
"participants in the solicitation" of Cornerstone stockholders in connection
with the proposed merger, and a description of their ownership interests in
Cornerstone, is available in a filing under Schedule 14A made by Cornerstone on
February 18, 2000.
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