<PAGE>
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:
[_] 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 Section 240.14a-11(c) or Section 240.14a-12
MISSION WEST PROPERTIES
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
MISSION WEST PROPERTIES
6815 Flanders Drive, Suite 250
San Diego, California 92121-3914
===================================
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 3, 1995
===================================
TO THE SHAREHOLDERS:
The annual meeting of shareholders of Mission West Properties (the
"Company") will be held at the executive offices of the Company at 6815 Flanders
Drive, Suite 250, San Diego, California, on Friday, March 3, 1995, at 9:00 a.m.
for the following purposes:
1. To elect directors for the following year.
2. To receive the report of management.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement of the meeting.
Only shareholders of record at the close of business on January 27, 1995,
will be entitled to vote at the meeting. Each of these shareholders is
cordially invited to be present and vote at the meeting in person.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT PROMPTLY. THIS IS IMPORTANT BECAUSE A
MAJORITY OF THE SHARES MUST BE REPRESENTED, EITHER IN PERSON OR BY PROXY, TO
CONSTITUTE A QUORUM. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON EVEN
THOUGH YOU SEND IN YOUR PROXY EARLIER.
By Order of the Directors
Katrina L. Thompson
Secretary
THE DATE OF THIS PROXY STATEMENT IS FEBRUARY 14, 1995.
<PAGE>
MISSION WEST PROPERTIES
6815 Flanders Drive, Suite 250
San Diego, California 92121-3914
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 3, 1995
------------------------
GENERAL INFORMATION
Your proxy in the enclosed form is solicited by the Board of Directors ("Board
or "Directors") of Mission West properties, a California corporation (the
"Company"), for use at the annual meeting of shareholders to be held on March 3,
1995, for the purposes set forth in the accompanying notice and at any
adjournment or postponement of that meeting. The mailing of this Proxy Statement
and the accompanying form of proxy to shareholders of the Company is expected to
commence on or about February 14, 1995.
The shares represented by any proxy in the enclosed form will be voted in
accordance with the instructions given on the proxy if the proxy is properly
executed and is received by the Company prior to the close of voting at the
meeting or any adjournment or postponement thereof. Proxies received by the
Company on which no contrary instruction has been given will be voted FOR the
election of directors nominated by the Nominating Committee of the Board of
Directors as set forth in this Proxy Statement. A shareholder giving a proxy has
the power to revoke it at any time before it is exercised. A proxy may be
revoked by filing with the Secretary of the Company an instrument revoking it or
a duly executed bearing a later date. The powers of the proxy holders will be
suspended if the person executing the proxy is present at the meeting and votes
in person.
The cost of soliciting proxies in the enclosed form will be borne by the
Company. Solicitation will be made primarily by mail but shareholders may be
solicited by telephone, telegraph, or personal contact. The Directors may retain
the services of a proxy-soliciting firm for soliciting proxies from those
entities holding shares in street name.
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Any shareholder desiring to have a proposal included in the Proxy Statement and
form of proxy for the 1996 annual meeting of shareholders must submit that
proposal in writing to the executive offices of the Company by October 16, 1995.
<PAGE>
VOTING SECURITIES
The outstanding securities of the Company at January 27, 1995, consisted of
1,468,721 shares of Common Stock. Each shareholder of record at the close of
business on January 27, 1995, is entitled to one (1) vote for each share of
Common Stock then held. California law permits cumulative voting for the
election of directors in the circumstances described under "ELECTION OF
DIRECTORS" below. Shares of the Company are traded on the American and Pacific
Stock Exchanges. The following table sets forth the beneficial ownership of the
outstanding shares of the Company held at January 27, 1995, by the only persons
known to management to be the beneficial owners of more than five (5) percent of
these shares.
<TABLE>
<CAPTION>
Shares
Beneficially
Owned as of Percent of
Beneficial Owner January 27, 1995 Class
- ------------------------------- --------------------- -----------------
<S> <C> <C>
Triton Group Ltd. 776,050 52.84%
John C. Stiska, Chairman and Chief
Executive Officer
550 West "C" Street, Suite 1880
San Diego, CA 92101
Byron B. Webb, Jr. 161,574/1/ 10.05%
1026 Wall Street
La Jolla, CA 92037
J. Gregory Kasun 93,465/1/ 5.81%
6815 Flanders Drive, Suite 250
San Diego, CA 92121
Dimensional Fund Advisors 76,700/2/ 5.22%
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90401
_____________________________
</TABLE>
/1/ Includes shares that may be acquired within 60 days
after January 27, 1995, upon the exercise of stock options as
follows: Mr. Webb, 14,400; Mr. Kasun 85,020.
/2/ Shares owned as of December 31, 1994, the most recent
data available.
TRITON GROUP LTD.
Triton Group Ltd. ("Triton"), of which John C. Stiska is chairman and chief
executive officer is a publicly owned company, the shares of which are traded on
the American Stock Exchange. Triton is an operating/holding company doing
business through a number of mid-sized operating subsidiaries. Triton currently
owns all or part of five (5) operating companies engaged in widely diversified
industries including real estate, manufacturing, and consumer goods. A majority
of the shares of the Company owned by Triton are pledged to Security Pacific
Business Credit as security for a loan.
OWNERSHIP OF TRITON SHARES BY EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY
As of January 27, 1995, the Directors and executive officers of the Company own
in the aggregate 1,472,139 shares of Triton, of which 1,248,000 shares may be
acquired within 60 days after January 27, 1995, upon the exercise of stock
options or warrants.
-2-
<PAGE>
ELECTION OF DIRECTORS
Seven (7) directors are to be elected at the 1995 annual meeting of
shareholders, each to hold office until the next annual meeting and until his
successor is elected and qualified. It is intended that the proxies received
will be voted FOR election of the persons named below unless authority is
withheld, reserving, however, full discretion to vote such proxies for another
person if any nominee is unable or unwilling to serve, an event that is not
anticipated. Any votes so cast may be distributed among the persons voted for
in such proportion as the persons named in the enclosed proxy shall in their
sole judgment determine.
In accordance with the California General Corporation Law, no shareholder may
cumulate votes (that is, cast for any one or more candidates a number of votes
greater than the number of the shareholder's shares) unless such candidate's or
candidates' name(s) have been placed in nomination prior to the voting and such
shareholder gives notice at the meeting, prior to the voting, of intention to
cumulate his or her votes. If any shareholder gives such notice, every
shareholder may cumulate his or her votes and hence each share entitled to vote
for directors will represent seven (7) votes that may be distributed by each
shareholder as desired among any one or more duly nominated candidates. In the
event of cumulative voting, the proxy solicited by the Directors confers
discretionary authority on the holders of the proxy to cumulate votes in such
manner as such holders shall deem to be best calculated to elect the maximum
number of the nominees for the Board of Directors.
The following table sets forth the shares of the Company beneficially owned at
January 27, 1995, by each Director and by all Directors and named executive
officers of the Company as a group.
<TABLE>
<CAPTION>
Shares Beneficially
Name, Age, and Principal Occupation Director Owned as of Percent of
During Previous Five (5) Years Since January 27, 1995/1/ Class/2/
- ------------------------------------------------------------------- ------------- --------------------- ----------
<S> <C> <C> <C>
Michael M. Earley, 39; 1993 0/3/ 0.00%
President, Chief Operating Officer, and Director (July 1994 to
present), Senior Vice President, Chief Financial Officer, and
Director (1991 to June 1994) of Triton Group Ltd.; Senior Vice
President and Chief Financial Officer (1991 to June 1993), Vice
President of Corporate Development (1988 to 1991) of
Intermark, Inc./4/; Director of Ridgewood Properties, Inc.
Mark G. Foletta, 34; 1993 0/3/ 0.00%
Senior Vice President, Chief Financial Officer, and Corporate
Secretary (July 1994 to present), Vice President, Controller, and
Corporate Secretary of Triton Group Ltd. (June 1993 to July
1994); Vice President and Controller (1991 to June 1993),
Controller (1990 to 1991), Assistant Controller (1987 to 1990)
of Intermark, Inc./4/
J. Gregory Kasun, 39; 1993 93,465 5.81%
Chief Executive Officer (June 1, 1994 to present), President
(November 1993 to present), Chief Financial Officer, Vice
President of Finance and Corporate Secretary (1989 to
November 1993) of Mission West Properties
William E. Nelson, 68; 1979 73,667 4.58%
President and Chief Executive Officer of Scripps Institutions of
Medicine and Science; Chairman of Scripps Bank; Member of
the California Bar; Private investor engaged in development and
management of real estate and securities investments
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially
Name, Age, and Principal Occupation Director Owned as of Percent of
During Previous Five (5) Years Since January 27, 1995/1/ Class/2/
- ------------------------------------------------------------------- ------------- --------------------- ----------
<S> <C> <C> <C>
John C. Stiska, 52; 1992 5,260/3/ 0.33%
Chairman (July 1994 to present), Chief Executive Officer and
Director (1990 to present), President of Triton Group Ltd. (June
1993 to July 1994); President and Director of Intermark, Inc./4/
(1990 to June 1993); Partner of Brobeck, Phleger & Harrison
(attorneys) (1987 to 1990); Director of BioSafety Systems, Inc.
and Ridgewood Properties, Inc.
Richard R. Tartre, 56; 1993 10,456/3/ 0.65%
Managing Director of Eden Financial Group, Inc. (insurance and
investment products); Chairman of BioSafety Systems, Inc.;
Director of Burnham Pacific Properties; Director of Triton
Group Ltd. (August 1993 to present)
Byron B. Webb, Jr., 68; 1975 161,574 10.05%
President of La Jolla Savers and Mortgage Fund (real estate
finance); President of Home Investment & Loan; President of
Byron B. Webb, Inc., Palmyra, Missouri (bank holding
company)
All Directors and named executive officers as a group (8 373,153 23.21%
persons)/5/
- --------------------------
</TABLE>
/1/ Includes shares that may be acquired within 60 days after January 27,
1995, upon the exercise of stock options as follows: Mr. Kasun, 85,020;
Mr. Nelson, 14,400; Mr. Stiska, 1,600; Mr. Webb, 14,400; and all
Directors and named executive officers as a group (8 persons), 138,160.
/2/ Includes as outstanding 138,160 shares that may be acquired within 60
days after January 27, 1995, upon the exercise of stock options.
/3/ Triton Group Ltd., of which Messrs. Earley, Foletta, and Stiska are
officers, and Messrs. Earley, Stiska, and Tartre are directors, owns
776,050 shares of the Company.
/4/ In October 1992, Intermark, Inc. and its wholly owned subsidiary, Triton
Group Ltd., filed for reorganization under Chapter 11 U.S. Bankruptcy
code. The reorganization concluded June 25, 1993, at which time
Intermark, Inc. merged into Triton Group Ltd.
/5/ As of January 27, 1995, Mr. Harve Filuk beneficially owned 28,731 shares
of the Company, which represented 1.79% of the common stock outstanding
(this includes 22,740 shares that may be acquired within 60 days after
January 27, 1995).
MEETINGS OF DIRECTORS
There were eight (8) meetings of the Directors during the year ended November
30, 1994.
COMMITTEE MEETINGS
The Company's Compensation and Nominating Committee had two (2) meetings during
the year ended November 30, 1994. The principal functions of this committee are
to recommend to the Board the remuneration arrangements for directors and
executive officers of the Company, including granting of stock options or other
benefits under similar plans, and to recommend to the Board nominees for
election as directors by the shareholders. The Compensation and Nominating
Committee will consider shareholder recommendations of nominees for directors to
be elected at subsequent annual meetings. These recommendations should be
submitted to the Compensation and Nominating Committee in writing in care of the
Company's executive offices and should include a resume of the individual's
background and qualifications. Messrs. Earley, Foletta, Nelson, Stiska, Tartre,
and Webb constitute the current membership of the Compensation and Nominating
Committee.
-4-
<PAGE>
The Company's Audit Committee had two (2) meetings during fiscal year 1994.
This committee recommends engagement and dismissal of the independent
accountants, monitors the Company's basic accounting policies, and reviews audit
reports and management letters and coordinates other services performed by the
independent accountants. The current members of the Audit Committee are Messrs.
Foletta, Nelson, and Webb.
The Company's Bylaws provide for an Executive Committee with all of the
authority of the Board of Directors to act on any matter except with respect to
(i) the approval of any action for which shareholder approval is required under
the California General Corporation Law, (ii) the filling of vacancies on the
Board or on any committee thereof, (iii) the fixing of compensation for
directors, (iv) the adoption, amendment, or repeal of any bylaw, (v) the
amendment or repeal of any resolution of the Board, which, by its terms, is not
so amendable or repealable, (vi) any distribution to shareholders except at a
rate or within a price range determined by the Board, and (vii) the appointment
of other committees of the Board or the members thereof. There is currently no
sitting Executive Committee; no meeting of the Executive Committee was held
during fiscal year 1994.
During fiscal year 1994, the Board constituted a special committee of
independent directors (Messrs. Kasun, Nelson, and Webb) to review an appropriate
course for the Company with respect to a requested lease restructure from an
affiliate. The Company is party to a lease with Western Metal Lath ("WML"), a
subsidiary of Triton, for a manufacturing building in Riverside, California.
Due to a downturn in its primary markets, WML's sales declined and it
experienced decreased cash flow. WML began making only partial payments of rent
and requested a restructure of its lease terms. The Company made substantial
efforts to bring WML into compliance with its lease obligations, while WML
maintained that it would be required to vacate the premises if the Company was
unwilling to restructure the lease. The special committee of Directors
consulted with commercial real estate experts and counsel, and after reviewing
the related leasing market and the business and financial prospects for WML
under a new management team, agreed to renegotiate the lease. It is anticipated
that the lease renegotiation will be completed in early 1995 and may include a
provision for Triton to deliver 100,000 shares of the Company's Common Stock to
the Company in exchange for a reduced rental rate and an extended lease term.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors, executive officers, and each beneficial owner of more than ten (10)
percent of the Common Stock of the Company are required by section 16(a) of the
Securities Exchange Act of 1934 to file reports periodically disclosing their
transactions in the Company's securities. Based on a review of such reports, no
reporting person failed to file required reports on a timely basis during fiscal
year 1994.
-5-
<PAGE>
REMUNERATION
SUMMARY OF COMPENSATION
The following table summarizes the compensation paid or accrued during the year
ended November 30, 1994, to each person who served as Chief Executive Officer
and to each other executive officer whose aggregate remuneration in all
capacities from the Company exceeded $100,000 (the "named executive officers")
during the fiscal year.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------------------------- ----------------
Other Annual No. of Options All Other
Name and Principal Position Fiscal Year Salary Bonus Compensation/1/ Granted Compensation
- ------------------------------- ----------- -------- ------- --------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Gregory Kasun 1994 $135,000 $15,000 $ 5,600 0 $ 82,125/2/
President and Chief Executive 1993 85,226 15,000 4,261 10,000 0
Officer; Former CFO and VP 1992 N/A N/A N/A N/A 0
Harve Filuk, 1994 85,000 25,000 67,980 0 0
Vice President 1993 85,000 9,000 8,910 6,600 0
1992 94,000 0 13,411 6,600 0
G. Joseph LaBreche 1994 1,638 0 127,459 0 221,662/3/
Former President and Chief 1993 139,351 0 16,421 0 19,869/3/
Executive Officer 1992 156,600 0 23,086 10,000 N/A
- ------------------------
</TABLE>
/1/ Includes the Company's contributions to its 401(k) Plan and
participation payments in accordance with the Company's Management
Incentive Plans (see "REMUNERATION -- Management Incentive Plans"
below).
/2/ Represents the difference between the option price and the market price
on the date of grant of 73,000 nonqualified stock options granted and
vested during fiscal year 1994 (see "REMUNERATION -- Grants of Stock
Options" below).
/3/ Effective November 3, 1993, Mr. LaBreche resigned all positions with
the Company. Pursuant to an employment separation agreement between Mr.
LaBreche and the Company, a consulting fee of $232,864 was paid,
representing a discounted present value of accrued benefits. See
"REMUNERATION -- Employment Separation Agreements" below. In addition
to the employment separation payment, Mr. LaBreche received
compensation in fiscal year 1994 in accordance with the Company's
Management Incentive Plans and for other incidental consulting in the
amount of $8,667.
EMPLOYMENT SEPARATION AGREEMENTS
The Company is a party to employment separation agreements with each of its
named executive officers. Each agreement provides that the officer be retained
as a consultant to the Company upon termination of employment other than for
cause, or upon resignation following a reduction in salary or benefits not
shared with all other employees of the Company, a reduction in corporate title,
or a relocation of the officer's place of work greater than 50 miles from the
Company's current headquarters. While a consultant, a former officer would
receive a consulting fee equal to the individual's annual base salary
immediately before termination, paid in monthly installments during the
consulting period, which ranges from 12 to 24 months. While a consultant, the
former officer would continue to be eligible to participate in medical, dental,
and life insurance programs generally available to the Company's employees, for
which the officer would contribute 50 percent of any applicable premiums, and
would be reimbursed for actual, pre-approved expenses incurred while performing
consulting services. The consulting fee is subject to reduction if the former
officer enters into other employment.
MANAGEMENT INCENTIVE PLANS
In 1985 the Company adopted a Management Incentive Plan (the "Plan") providing,
in effect, that the executive officers and staff of the Company will have in the
aggregate a ten (10) percent interest in the profits generated from the
operation and sale of the real estate projects developed or purchased by the
Company. This Plan was terminated
-6-
<PAGE>
in November 1994. No payments were made under the Plan during fiscal year 1994
and it is not anticipated that future payments will be made under the Plan.
In addition to the above Plan, the executive officers and staff participate in
ten (10) percent of the profits generated from the sale of the Company's
properties in Del Mar, California; Messrs. LaBreche and Filuk have interests of
six (6) percent and three (3) percent, respectively, in any such profits. The
term "profits" as used herein means the amount by which the deferred sales
prices exceed $12,400,000, the estimated value of these properties at the time
the Management Incentive Plan was adopted. The amounts to which participants
are entitled are based on cash proceeds less related expenses. In fiscal year
1994 the following amounts were distributed to the named executive and former
officers in conjunction with this arrangement: Mr. LaBreche, $127,459; Mr.
Filuk, $63,730; and all named executive and former officers as a group (three
(3) persons), $191,189.
GRANTS OF STOCK OPTIONS
The following table sets forth information regarding the grants of stock options
for the year ended November 30, 1994, to the named executive officers.
<TABLE>
<CAPTION>
Individual Grants Potential Realizable Value at Assumed
Annual Rates/1/ of Stock Price
Appreciation for Option Term
- ------------------------------------------------------------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Number of % of Total Exercise Market Price
Options Options Price on Date Expiration
Name Granted Granted Per Share of Grant Date 0% 5% 10%
- --------------------- --------- ---------- --------- ---------- -------------- -------- -------- --------
J. Gregory Kasun 125,000/2/ 100% $3.00 $4.125 June 30, 2004 $140,625 $464,899 $962,398
Harve Filuk 0 N/A N/A N/A N/A N/A N/A N/A
</TABLE>
/1/ The 0%, 5%, and 10% assumed rates of appreciation are mandated by the
rules of the Securities and Exchange Commission and are not an estimate
or projection of future prices for the Company's Common Stock.
/2/ Options are nonqualified and were granted pursuant to a recommendation
by the Compensation and Nominating Committee. Options are not subject
to the Company's Incentive Stock Option Plan (see discussion below).
73,000 of the options vested upon grant; the remaining 52,000 vest if,
and when, certain financial milestones occur.
At the 1991 annual meeting of shareholders, the shareholders approved the 1990
Incentive Stock Option Plan (the "1990 Plan"), under which 200,000 shares of
Common Stock are reserved for issuance. The 1990 Plan succeeded the Company's
1981 Incentive Stock Option Plan pursuant to which no further options are
available for grant although outstanding options may be exercised according to
their terms. Options to purchase Common Stock of the Company may from time to
time be granted to executive officers and key employees as an incentive to
encourage the maximum effort by the grantees and their continued association
with the Company by facilitating their acquisition of, or increase in, a
proprietary interest in the Company. Such options constitute "incentive stock
options" as defined in Section 422A of the Internal Revenue Code and the
Treasury Regulations promulgated thereunder and conform to the requirements
thereof. No options were granted under the 1990 Plan, nor were any options
exercised, during fiscal 1994.
-7-
<PAGE>
EXERCISE OF STOCK OPTIONS
The following table sets forth information regarding the exercise of stock
options by the named executive officers during the year ended November 30,
1994, and the value of unexercised options for the year then ended.
<TABLE>
<CAPTION>
Number of Unexercised Value/1/ of Unexercised
Options at In-the-Money Options at
November 30, 1994 November 30, 1994
No. of Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
- ------------------ ----------- -------------- ------------- -----------------
<S> <C> <C> <C> <C>
J. Gregory Kasun 0 0 85,020/65,880 $277,975/$225,400
Harve Filuk 0 0 22,740/11,160 $ 11,055/$27,720
- ------------------
</TABLE>
/1/ Represents the difference between the exercise price of the options and
the closing price of the Company's Common Stock on November 30, 1994,
of $6.625 per share.
COMPENSATION AND NOMINATING COMMITTEE REPORT REGARDING EXECUTIVE OFFICER
SALARIES IN FISCAL YEAR 1994
The Compensation and Nominating Committee's objective with respect to executive
compensation is to provide the executive officers of the Company with
competitive compensation that enables the Company to attract and retain
employees who contribute to the success of the Company, thereby maximizing
shareholder value. Among the factors considered by the Compensation and
Nominating Committee in setting the salaries of the executive officers of the
Company for the year ended November 30, 1994, were the operating results of the
Company in the preceding fiscal year compared to the expectations of the
committee for such fiscal year and the committee's evaluation of the degree of
difficulty encountered by management in achieving such operating results posed
by national and local economic conditions generally and other unforeseen
circumstances; the committee's evaluation of each officer's skill and judgment
in carrying out his assigned duties; the salaries paid to persons in similar
positions in other companies in the same geographic area; and the Company's own
historical patterns of remuneration. The salaries set for fiscal year 1994 were
also affected by the committee's anticipation that certain of the executive
officers would spend significant time exploring strategic alternatives available
to the Company, as well as negotiation between the committee and the executive
officers.
Under Section 162(m) of the Internal Revenue Code, adopted in August 1993, and
regulations recently adopted thereunder, publicly held companies may be
precluded from deducting certain compensation paid to an executive officer in
excess of $1 million per year. The Company is studying these regulations and
intends to comply with them; the Company does not anticipate that a change in
its current compensation policy will be necessary for the purpose of qualifying
under Section 162(m).
By the Committee:
Michael M. Earley John C. Stiska
Mark G. Foletta Richard R. Tartre
William E. Nelson Byron B. Webb, Jr.
COMPARISON OF SHAREHOLDER RETURN ON INVESTMENT
The following graph compares the percentage change in the cumulative total
shareholder return on the Common Stock of the Company for fiscal years 1990
through 1994, as of each fiscal year end, with (i) the cumulative total return
(assuming reinvestment of dividends) of the Russell 2000 Index, a broad equity
market index, and (ii) the cumulative total return (assuming reinvestment of
dividends) of a peer group of real estate companies with portfolios
-8-
<PAGE>
of income-producing industrial and office properties believed by the Company's
management to be comparable to those of the Company.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG MISSION WEST PROPERTIES, RUSSELL 2000 INDEX AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period Mission West Russell
(Fiscal Year Covered) Properties 2000 INDEX Peer Group
- ------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Measurement Pt-1989 $100 $100 $100
FYE 1990 $128 $ 78 $ 54
FYE 1991 $121 $109 $ 52
FYE 1992 $ 60 $135 $ 53
FYE 1993 $ 55 $161 $ 75
FYE 1994 $104 $159 $ 78
</TABLE>
DIRECTOR'S CASH COMPENSATION
Each director who was not a salaried officer of the Company received $500 per
month and $750 for each meeting of the Board or any committee thereof he
attended; see also "REMUNERATION -- Director Stock Option Programs" and
"REMUNERATION -- Stock Purchase Plan" below.
DIRECTOR STOCK OPTION PROGRAMS
The Company maintains a director stock option program whereby options to
purchase shares of Common Stock of the Company may be granted to directors of
the Company who do not receive a salary from the Company, exclusive of
directors' fees. The option price in all instances will not be less than the
fair market value of the shares on the date of grant and all determinations as
to grants of options, the number of shares subject to option and other terms and
conditions of the options are made by the Board upon the recommendation of the
Compensation and Nominating Committee.
At the 1991 annual meeting of shareholders, the shareholders approved the 1990
Director Stock Option Program (the "1990 Program"), under which 150,000 shares
of Common Stock are reserved for issuance. No options were granted under the
1990 Program, nor were any options exercised, during fiscal year 1994. No
further options may be granted under the Company's initial Director Stock Option
Program, although outstanding options may be exercised according to their terms.
STOCK PURCHASE PLAN
The Company has available to its employees and directors a plan whereby such
individuals can, through voluntary payroll deductions or other contributions of
up to $3,000 per month, acquire shares of Common Stock of the Company in the
open market. The Company contributes a matching $0.50 for each $1.00
contributed by individuals. During the year ended November 30, 1994, matching
contributions made by the Company to the Stock Purchase Plan on behalf of each
director and the named executive officers were as follows: Messrs. Earley,
Foletta, Filuk, and Kasun, $0; Mr. Nelson, $3,000; Mr. Stiska, $3,375; Mr.
Tartre, $5,625; Mr. Webb, $5,625; and all Directors and named executive officers
as a group (eight (8) persons) $17,625.
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<PAGE>
INDEPENDENT ACCOUNTANTS
The Company's independent accountants for the year ended November 30, 1994, were
Price Waterhouse LLP. A representative of Price Waterhouse LLP is expected to
attend the annual meeting, will have an opportunity to make a statement if he or
she desires to do so and will be available to respond to appropriate questions.
The Company has not yet selected an accounting firm to perform the audit of the
Company's financial statements for the year ending November 30, 1995, inasmuch
as such action is customarily undertaken by the Audit Committee later in the
fiscal year.
OTHER MATTERS
The Directors know of no other matters to be presented for action at the annual
meeting. As to any matter that may properly come before the meeting, the
proxies confer discretionary authority on the persons named therein and those
persons will vote the proxies in accordance with their best judgment with
respect thereto.
By Order of the Directors
Katrina L. Thompson
Secretary
February 14, 1995
San Diego, California
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<PAGE>
MISSION WEST PROPERTIES
For Annual Meeting of Shareholders
March 3, 1995
The undersigned hereby appoints John C. Stiska, Michael M. Earley and Byron
B. Webb, Jr., and each of them, as his agents and proxies with full power of
substitution to vote any and all shares of Common Stock of Mission West
Properties which the undersigned is entitled to vote at the annual meeting of
shareholders of said company to be held March 3, 1995, or any adjournment or
postponement thereof, as specified below.
1. Election of the following nominees as directors: Michael M. Earley,
Mark G. Foletta, J. Gregory Kasun, William E. Nelson, John C. Stiska,
Richard R. Tartre and Byron B. Webb, Jr.
[_]FOR [_] WITHHOLD AUTHORITY
(except as indicated to the contrary below) TO VOTE FOR
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S
NAME ON THE LINE PROVIDED BELOW
- -------------------------------------------------------------------------------
2. As they shall in their sole judgment determine on any other matter that
may properly come before the meeting or any adjournment or postponement
thereof.
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
(Please Sign and Date the Proxy on the Reverse Side)
This Proxy will be voted as you specify on the reverse hereof. UNLESS
OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF SOME OR ALL
OF THE PERSONS NAMED IN PROPOSAL 1 ON THE REVERSE HEREOF, ALL OF WHOM
WILL BE NOMINATED BY THE BOARD OF DIRECTORS OF MISSION WEST PROPERTIES FOR
ELECTION AS DIRECTORS. In the election of directors, the named proxy holders
shall have discretion and authority to cumulate votes and to distribute the
votes represented by this proxy among the nominees named in Proposal 1 in
such proportions as they in their sole judgment shall determine. If any such
nominee is unable or unwilling to serve or is otherwise unavailable, said
proxy holders shall have discretion and authority to vote in accordance with
their judgment for other nominees or to distribute such votes in such
proportions among other nominees as they in their sole judgment shall determine.
Dated:____________,1995
_______________________
_______________________
(Signature)
Sign exactly as name
appears hereon. Give
your full title if
signing in other than
individual capacity.
All joint owners should
sign.
