<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>
THE PARKWAY COMPANY
(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/ $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.: ________________________
(3) Filing Party: ________________________________________________________
(4) Date Filed: __________________________________________________________
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<PAGE> 2
THE PARKWAY COMPANY
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
NOTICE OF
1995 ANNUAL SHAREHOLDERS' MEETING
To the Shareholders:
Notice is hereby given that the 1995 Annual Meeting of Shareholders (the
"Meeting") of The Parkway Company (the "Company") will be held at the Company's
offices, 300 One Jackson Place, 188 East Capitol Street, Jackson, Mississippi at
1:30 p.m., Jackson time, on Wednesday, May 31, 1995 for the following purposes:
1. To elect ten (10) directors to serve until the next Annual Meeting of
Shareholders and until their successors are elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as independent public
accountants for the fiscal year ending December 31, 1995; and
3. To consider and take action upon such other matters as may properly come
before the Meeting or any adjournment thereof.
Only shareholders of record at the close of business on April 12, 1995 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
SARAH P. CLARK
Vice President, Chief
Financial Officer and Secretary
Date: April 28, 1995
- --------------------------------------------------------------------------------
| SHAREHOLDERS 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> 3
April 28, 1995
THE PARKWAY COMPANY
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 31, 1995
The following information is furnished in connection with the Annual
Meeting of Shareholders (the "Meeting") of The Parkway Company (the "Company")
to be held on Wednesday, May 31, 1995 at 1:30 p.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 Shareholders for the
fiscal period ended December 31, 1994 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 shareholders
on or about April 28, 1995.
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy for the Meeting is being solicited by the directors of
the Company. The proxy may be revoked by a shareholder 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 shareholder attending the Meeting, withdrawing such proxy and
voting in person. The cost of soliciting the proxies on the enclosed form will
be paid by the Company. In addition to the use of the mails, proxies may be
solicited by the directors and their agents (who will receive no additional
compensation therefor) by means of personal interview, telephone or facsimile,
and it is anticipated that banks, brokerage houses and other institutions,
nominees or fiduciaries will be requested to forward the soliciting material to
their principals and to obtain authorization for the execution of proxies. The
Company may, upon request, reimburse banks, brokerage houses and other
institutions, nominees and fiduciaries for their expenses in forwarding proxy
material to their principals.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The record date for determining shares of common stock of the Company,
$1.00 par value ("Shares"), entitled to vote at the Meeting has been fixed at
the close of business on April 12, 1995. On such date there were 1,563,308
Shares outstanding, entitled to one vote each.
<PAGE> 4
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)
beneficially owned, as of March 1, 1995, more than five percent of the Shares
outstanding except as set forth in the following table:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNED OF CLASS
------------------- ---------------- --------
<S> <C> <C>
John D. Weil and others
509 Olive Street
Suite 705
St. Louis, Missouri 63101................................ 89,200(1) 5.7%
Leland R. Speed
300 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201-2195.......................... 86,574(2) 5.5
- ---------------
<FN>
(1) Based upon a Schedule 13D filed with the Securities and Exchange Commission
on January 11, 1993 by Mr. Weil; Clayton Management Company, a company
controlled by Mr. Weil; and two of Mr. Weil's brothers. The Schedule 13D
indicates that Weil beneficially owns 60,000 Shares, Clayton Management
Company beneficially owns 9,000 Shares, and Mr. Weil's brothers beneficially
own an aggregate of 20,200 Shares.
(2) Does not include (i) 14,105 Shares owned by Mr. Speed's spouse, (ii) 25,300
Shares owned by Mr. Speed's son, Stewart, (iii) 12,523 Shares held by Mr.
Speed's son, Forrest, and (iv) 5,929 Shares owned by Mr. Speed's son,
Warren.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the Shares beneficially owned, as of March
1, 1995, by each director and executive officer of the Company. Unless otherwise
stated, each person has sole voting and investment power with respect to the
Shares set forth in the table.
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY PERCENT
NAME OWNED OF CLASS
---- ------------ --------
<S> <C> <C>
Daniel C. Arnold.............................................. 14,035 0.90%
H. C. Bailey, Jr.............................................. 7,923 0.51
George R. Farish.............................................. 5,000 0.32
B. Pat Green, Jr.............................................. 10,100 0.65
Sidney W. Lassen.............................................. 5,872 0.38
C. Herbert Magruder........................................... 19,691(1) 1.26
W. Lincoln Mossop, Jr......................................... 3,548 0.23
Joe F. Lynch.................................................. 31,578 2.02
Leland R. Speed............................................... 86,574(2) 5.54
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY PERCENT
NAME OWNED OF CLASS
---- ------------ --------
<S> <C> <C>
Steven G. Rogers.............................................. 29,016 1.86
Sarah P. Clark................................................ 600 .04
Directors and officers as a group............................. 213,937 13.68
- ---------------
<FN>
(1) Includes (i) 300 Shares beneficially owned by Dr. Magruder's wife, as to
which he disclaims beneficial ownership and (ii) 1,342 Shares he holds as
trustee.
(2) See Note (2) under "Security Ownership of Certain Beneficial Owners."
</TABLE>
1. ELECTION OF DIRECTORS
NOMINEES
In accordance with the By-Laws of the Company, the Board of Directors has
by resolution fixed the number of directors to be elected at the Meeting at ten.
All ten positions on the Board are to be filled by the vote of the shareholders
at the Meeting. Each person so elected shall serve until the next Annual Meeting
and until his successor is elected and qualified.
The directors of the Company recommend a vote FOR the nominees listed
below. All nominees are currently serving as directors of the Company and were
elected at the 1994 Annual Meeting of Shareholders, except Mr. Friou, who joined
the Board in connection with the Company's merger with EB, Inc. in April 1995.
Unless instructed otherwise, proxies will be voted FOR the nominees listed
below. Although the directors do not contemplate that any of the nominees will
be unable to serve prior to the Meeting, if such a situation arises, the
enclosed proxy will be voted in accordance with the best judgment of the person
or persons voting the proxy.
The table below sets forth certain information regarding the nominees for
election to the Company's Board of Directors.
<TABLE>
<CAPTION>
NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS (1)
----------------------- --- ----------------------------------
<S> <C> <C>
Daniel C. Arnold................. 65 Director of Farm & Home Financial Corporation from
Director since 1994 1989 to 1994 and its Chairman of the Board, President and
Chief Executive Officer from 1989 to 1991.
H.C. Bailey, Jr.................. 55 President of H.C. Bailey Company (real estate
Director since 1988 development and investment); Chairman of the Board and President
of Security Savings & Loan Association (2) until
1992; President of Bailey Mortgage Company (mortgage
banking) until 1992.
George R. Farish................. 41 Chief Executive Officer of Houston Savings
Director since 1981 Association.
Roger P. Friou................... 60 Chief Financial Officer of Jitney Jungle Stores of
Director since 1995 America, Inc. (a retail supermarket chain)
B. Pat Green, Jr................. 62 Chairman of Green Oil Company, Inc. (a retail chain
Director since 1981 of gasoline stations and car washes); sole proprietor
of Green Investment Company (real estate
development).
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS (1)
----------------------- --- ----------------------------------
<S> <C> <C>
Sidney W. Lassen................. 60 Chairman and Chief Executive Officer of Sizeler
Director since 1993 Property Investors, Inc. (a real estate investment trust);
Chief Executive Officer of Sizeler Realty Co., Inc.
(a real estate company).
Joe F. Lynch..................... 62 Consultant to the Company since 1994; Chairman of
Director since 1994 the Board and Chief Executive Officer of the First
Continental Real Estate Investment Trust from 1989
to 1994; Vice Chairman of the Board of Farm & Home
Financial Corporation and of Farm & Home Savings
Association from 1991 to 1994.
C. Herbert Magruder.............. 62 Physician and a partner in the medical firm of
Director since 1988 Carolina Pathology Associates.
W. Lincoln Mossop, Jr............ 60 General partner of Barrett & Co. (securities brokers
Director since 1986 and dealers and a member firm of the Boston Stock
Exchange, Inc.).
Leland R. Speed.................. 62 Chief executive officer of the Company and EastGroup
Chairman since 1988, Chief Properties; President of LNH REIT, Inc. since 1992;
Executive Officer since 1980 served as Chief Executive Officer of Congress Street
and Director since 1978 Properties, Inc., Eastover Corporation and Rockwood
National Corporation until 1994 and EB, Inc. until
1995.(3)
- ---------------
<FN>
(1) Unless otherwise stated, each nominee has held the position indicated for at
least the past five years.
(2) Security Savings & Loan Association was placed in conservatorship by the
Resolution Trust Corporation in 1992.
(3) Each of these companies is primarily engaged in the real estate business.
See "Expense-Sharing Arrangement."
</TABLE>
OTHER DIRECTORSHIPS AND TRUSTEESHIPS
Members of the Board of Directors serve on the Boards of Directors or the
Boards of Trustees of the following publicly held companies:
<TABLE>
<CAPTION>
NOMINEE COMPANY
------- -------
<S> <C>
Daniel C. Arnold..................................... CareerStaff Unlimited, Inc.
U.S. Physical Therapy, Inc.
H.C. Bailey, Jr...................................... EastGroup Properties
LNH REIT, Inc.
George R. Farish..................................... LNH REIT, Inc.
Sidney W. Lassen..................................... Hibernia Corporation
Sizeler Property Investors, Inc.
C. Herbert Magruder.................................. United Financial Corporation of
South Carolina
Leland R. Speed...................................... EastGroup Properties
Farm Fish, Inc.
First Mississippi Corporation
LNH REIT, Inc.
</TABLE>
4
<PAGE> 7
COMMITTEES AND MEETING DATA
The Audit Committee of the Board of Directors currently consists of Messrs.
Farish, Lynch and Mossop. 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 accounting practices which the Audit Committee
believes merit such review. The Audit Committee met two times during the year
ended December 31, 1994.
The Compensation Committee of the Board, which currently consists of
Messrs. Green and Magruder, met two times during the year ended December 31,
1994. The Committee's function is to recommend compensation levels for directors
and review compensation levels for officers and administer the Company's 1994
Stock Option Plan.
The Company does not have a standing nominating committee or any committee
performing a similar function.
During the year ended December 31, 1994, the full Board of Directors met on
seven occasions. Each director attended at least 75% of the aggregate of the
total number of meetings of the Board and the total number of meetings held by
all committees of the Board on which he served.
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 (1)
----------------------- --- -----------------------------------
<S> <C> <C>
Leland R. Speed........................... 62 See table under "Nominees."
Chief Executive Officer since 1980
Steven G. Rogers.......................... 40 President of the Company since 1993 and
President since 1993 Senior Vice President of the Company from
1988 to 1993; Senior Vice President of LNH
REIT, Inc. since 1992; Senior Vice President
of Congress Street Properties, Inc., Eastover
Corporation, EastGroup Properties and Rockwood
National Corporation until 1994 and EB, Inc.
until 1995.
Sarah P. Clark............................ 35 Vice President and Assistant Secretary of
Vice President, Chief Financial Officer the Company since 1992; Vice President and
and Secretary Assistant Secretary of Congress Street
Properties, Inc., Eastover Corporation,
EastGroup Properties and Rockwood National
Corporation from 1992 to 1994 and of EB,
Inc. from 1992 to 1995; Vice President of
LNH REIT, Inc. since 1992; Controller of
Eastover from 1986 to 1992 and EastGroup
from 1990 to 1992; Controller of the
Company from 1986 to 1990.
</TABLE>
5
<PAGE> 8
EXECUTIVE COMPENSATION
Until December 31, 1994, the executive officers of the Company were paid by
Congress Street Properties, Inc. ("Congress Street") and those costs were then
allocated among the Expense-Sharing Participants (described below) in accordance
with the expense-sharing arrangements.
The following table (the "Summary Compensation Table") summarizes, for the
fiscal years ended December 31, 1994, 1993 and 1992, (i) the amount of the
compensation allocated to the Company that was paid by Congress Street to the
Company's Chief Executive Officer and all other officers whose cash compensation
for service to all of the Expense-Sharing Participants during the year ended
December 31, 1994 exceeded $100,000 (the "Named Officers".)
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION (1) ---------------------------------------------
-------------------------------- LTIP
NAME AND PRINCIPAL OTHER ANNUAL PAYOUTS ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS/SARS (2) $ (3) COMPENSATION (4)
- -------------------- ---- ------- ------- ------------ ----------------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Leland R. Speed..... 1994 $58,673 $ 7,379 -- 15,000 $21,220 $1,581
Chief Executive 1993 66,927 -- -- -- 4,145 3,867
Officer 1992 82,198 17,874 -- -- 1,152 3,835
Steven G. Rogers.... 1994 30,761 5,985 -- 45,000 16,977 1,581
President 1993 36,786 8,870 -- -- 3,317 2,912
1992 35,298 9,059 -- -- 921 2,304
David H. Hoster II.. 1994 37,708 4,788 -- 7,500 19,521 1,581
Executive 1993 44,499 7,096 -- -- 3,814 2,895
Vice President 1992 49,982 7,247 -- -- 1,059 2,700
N. Keith McKey...... 1994 26,850 3,420 -- 15,000 8,300 1,351
Executive Vice- 1993 31,808 2,129 -- -- 2,487 1,670
President, Chief 1992 30,769 2,174 -- 3,201/1,761 691 1,553
Financial Officer
and Secretary
- ---------------
<FN>
(1) All amounts are the Company's share of the particular Named Officer's
compensation as allocated under the expense-sharing arrangement.
(2) The options granted in 1994 were granted on September 23, 1994 under the
Company's 1994 Stock Option Plan, and vest one-half on the first anniversary
date of grant and one-half on the second anniversary date of grant. In
connection with the termination of the expense-sharing arrangements
described below, the Compensation Committee agreed to amend the options
granted to Messrs. Hoster and McKey so that the options vested completely
upon their resignation as officers of the Company (December 31, 1994) and so
that these individuals will have two years from their resignation to
exercise the options. The options and SARs granted in 1992 were granted in
tandem under the Company's 1991 Incentive Plan (the "Incentive Plan") and
became exercisable in three equal annual installments beginning on the first
anniversary of their date of grant (December 18, 1992).
(3) These payments were made under Incentive Compensation Units granted under
the Incentive Plan. The amount for 1994 includes a payment made in December
1994 in consideration of the officer agreeing to cancel the remaining term
of the option which payment was made in Shares. An Incentive Compensation
Unit was a right to receive an amount equal to the dividend paid on a
specified number of Shares during a five year period beginning on the date
of the grant of the unit. The amount payable with respect to an Incentive
Compensation Unit was credited to an account for the holder of such unit.
The grantee of the Incentive Compensation Unit was entitled to a cash
payment of 20% of
</TABLE>
6
<PAGE> 9
the amount in the account of the first anniversary date of its grant, 40% on
the second anniversary date, 60% on the third anniversary date, 80% on the
fourth anniversary date and 100% on the fifth anniversary date.
(4) This amount is the Company's share of Congress Street's discretionary
contribution to a 401(K) plan for the respective Named Officer's benefit.
Option Grants. The following table gives information with respect to
options granted to the Named Officers during the year ended December 31, 1994.
The "Potential Realizable Value" columns assume that the price of Shares will
appreciate at annual rates of 5% and 10%, respectively, during the term of the
options. The price of Shares on the date of grant was $13.78. There can be no
assurance that such appreciation will take place.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
---------------------------------------------------------------------------- ----------------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL
OPTIONS/ OPTIONS/SARS EXERCISE
SARS GRANTED TO OR BASE
GRANTED EMPLOYEES PRICE EXPIRATION
NAME (#) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- -------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Leland R. Speed............... 9,000(1) 10.9% $13.78 9/22/04 $ 78,120 $ 202,410
6,000(1) 18.33 9/22/04 24,780 104,160
Steven G. Rogers.............. 27,000(1) 32.8 13.78 9/22/04 234,360 607,230
18,000(1) 18.33 9/22/04 74,340 312,480
David H. Hoster II............ 4,500(1) 5.5 13.78 9/22/04 39,060 101,205
3,000(1) 18.33 9/22/04 12,390 52,080
N. Keith McKey................ 9,000(1) 10.9 13.78 9/22/04 78,120 202,410
6,000(1) 18.33 9/22/04 24,780 104,160
- ---------------
<FN>
(1) These options were granted on September 23, 1994 and vest as described in
Note 2 to the Summary Compensation Table. These options do not have tandem
stock appreciation rights.
</TABLE>
Option Exercises and Year End Values. The following table shows the value
realized by the Named Officers upon the exercise of options and SARs 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 on the NASDAQ
National Market System on December 30, 1994 ($13.375).
7
<PAGE> 10
AGGREGATED OPTIONS/SAR EXERCISES WITH LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END(#) OPTIONS AT FY-END($)
ACQUIRED VALUE ---------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE(2) EXERCISABLE/UNEXERCISABLE
---- ----------- -------- ---------------------------- ------------------------
<S> <C> <C> <C> <C>
Leland R. Speed........... 15,991 $216,878(1) 0/15,000 $0/$0
Chief Executive Officer
David H. Hoster II........ 14,714 199,561(1) 0/ 7,500 $0/$0
President
Steven G. Rogers.......... 12,796 173,548(1) 0/45,000 $0/$0
Senior Vice President
N. Keith McKey............ 12,796 171,686(1) 0/15,000 $0/$0
Executive Vice
President,
Chief Financial Officer
and Secretary
<FN>
- ---------------
(1) Includes value realized from the simultaneous exercise of stock appreciation
rights related to the exercised options.
(2) The unexercisable options represent the options granted to the Named Officer
on September 23, 1994 under the 1994 Stock Option Plan.
</TABLE>
Directors' Fees. Under the Company's standard compensation arrangement
with directors (other than Mr. Speed, who is a salaried officer), directors are
paid a monthly stipend of $500, plus $1,000 and reimbursement of expenses for
each meeting of the Board and $750 and reimbursement of expenses for each
meeting of a committee established by the Board. Only one fee is paid in the
event more than one meeting is held on a single day.
Directors Plan. The Company's 1991 Directors Stock Option Plan (the
"Directors Plan") authorizes the issuance of options for up to 100,000 Shares 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 September 13, 1991 was automatically granted an option to purchase 5,000
Shares. Each person who first becomes a Non-Employee Director after September
13, 1991 will automatically be granted an option to purchase 5,000 Shares on the
date the person becomes a Non-Employee Director, if such Shares are available.
Each Non-Employee Director will also be granted an option to purchase an
additional 1,500 Shares on the date of any annual meeting at which such
Non-Employee Director is reelected to the Board. The option exercise price is
the closing price of a Share if the Company's Shares are listed on an exchange
or the average between the bid and the asked price for that date if the Shares
are traded over-the-counter (or, if no Shares were publicly traded on that date,
the next preceding date that such Shares 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.
No options were exercised under the Trustees Plan during the year ended
December 31, 1994. On May 10, 1994, Daniel C. Arnold and Joe F. Lynch were each
granted an option to purchase 2,500 Shares at an
8
<PAGE> 11
exercise price of $12.00 per Share. Messrs. Arnold and Lynch were not granted
options for 5,000 Shares because there were not sufficient Shares available
under the Directors Plan; the number of Shares remaining to be issued under the
Directors Plan was divided equally between Messrs. Arnold and Lynch. On December
8, 1994, Messrs. Arnold and Lynch were each granted options to purchase 4,000
Shares (the 2,500 Shares referenced above and 1,500 Shares as a result of their
reelection) and Messrs. Bailey, Farish, Green, Lassen, Magruder and Mossop were
each granted options to purchase 1,500 Shares. The exercise price of all of
these options is $13.75 per share.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
During the year ended December 31, 1994, the Company had loan agreements
whereby it advanced funds to Lake Forest, Inc. ("Lake Forest"), a wholly-owned
subsidiary of Rockwood National Corporation ("Rockwood"), to fund continuing
operations. Rockwood was a member of the Eastover Group of Companies until June
29, 1994, at which time Rockwood entered into a series of transactions pursuant
to which its debts and the debts of its wholly-owned subsidiary, Lake Forest,
were restructured, the Administration Agreement between Congress Street and
Rockwood was transferred to Eastover Realty, Inc. ("ERI"), an unrelated entity,
and designees of ERI were appointed directors and officers of Rockwood. In
connection with the restructuring, the Company prepaid on June 29, 1994 a
promissory note in the principal amount of $2,274,000 payable to Lake Forest.
This debt was incurred in connection with the purchase of 80 acres of
undeveloped commercial land from Lake Forest. Immediately prior to the
restructuring, the Company also had the following outstanding credit facilities
with Rockwood and Lake Forest:
(i) Participation on a line of credit with Trustmark National Bank to
the extent of $750,000 bearing interest at 2% above the prime rate.
Interest was payable monthly and the note was due on demand. Terms of the
participation called for Parkway to advance up to $750,000 under the line
of credit. Parkway was participating pari passu on the loan, which was
collateralized by approximately 465 acres of real estate in New Orleans. On
June 29, 1994 this note was paid in full in connection with the
restructuring of Rockwood's debts described above.
(ii) Revolving credit note dated July 14, 1993 in the maximum
principal amount of $250,000 bearing interest at the prime rate plus 2%.
Interest was payable quarterly with the note maturing July 14, 1994. This
note was guaranteed by Rockwood and secured by real estate in New Orleans,
Louisiana. This note was restructured in connection with the restructuring
of Rockwood's debts on June 29, 1994, and as of December 31, 1994, $177,000
was outstanding on this restructured debt.
In connection with the purchase of 80 acres of undeveloped commercial land
from Lake Forest, Rockwood issued to the Company a warrant to purchase 800,000
shares of Rockwood common stock exercisable at $.375 per share during the period
beginning June 17, 1991, and ending December 31, 1995. No warrants have been
exercised through December 31, 1994. The Company is a major shareholder in
Rockwood (approximately 24%).
On January 1, 1994, the Company signed a note whereby it loaned $100,000 to
its then affiliate, Eastover Corporation. This note accrued interest at prime
plus 1% with interest due quarterly. The collateral for this note was a security
interest in shares of EastGroup Properties. This note was paid in full during
1994.
EXPENSE-SHARING ARRANGEMENTS
Description of Arrangements. Until December 31, 1994, the Company had an
expense-sharing agreement with Congress Street, EastGroup Properties
("EastGroup") and Eastover Corporation ("Eastover")
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<PAGE> 12
(which are more fully described below) pursuant to which the participants shared
administrative offices at the same location in Jackson, Mississippi and common
officers and other personnel, subject to the authority of the board of each
member company to elect or appoint and remove its officers in accordance with
its certificate of incorporation, declaration of trust or other charter
documents and applicable law. EB had a separate administrative agreement with
Congress Street which allowed EB to participate in the expense-sharing agreement
on the same basis as the companies which were parties to the expense-sharing
arrangement until November 29, 1994. Under this arrangement, the participants
shared the cost of the common officers and other employees and of shared
facilities and activities. These common costs were initially paid by Congress
Street, which served as the administrator of the arrangement, and the other
participants paid Congress Street an annual fee (on a monthly basis) of one-half
of one percent of their assets which were publicly-traded securities. After
these fees and any profits of Eastover Realty Corporation (see "Eastover Realty
Corporation" below)were subtracted from total common costs, the remaining common
costs were allocated on a monthly basis among EastGroup, the Company, Congress
Street, Eastover and EB in proportion to their assets other than publicly-traded
securities, based on their balance sheets as contained in their most recent SEC
filing. Certain costs which the common officers believed to be particularly
attributable to each member company were not shared. These non-allocable costs
included but were not limited to directors' and trustees' fees, legal, audit and
stock transfer expenses, stationery and items of a similar nature. Since the
allocation formula was not based upon actual costs incurred by each member
company, the allocation may have, from time to time, resulted in a greater or
lesser charge to each member company than would have resulted if actual costs to
each member company were allocated.
LNH REIT, Inc. ("LNH") also had a separate administration agreement with
Congress Street pursuant to which LNH shared common offices and personnel with
Congress Street, the Company, EB and the other participants, and LNH paid
Congress Street a fixed annual fee of $125,000.
Because conflicts of interest may have arisen from the management of the
participating companies by common officers, agreements governing these
expense-sharing arrangements included the following provisions designed to
prevent such conflicts of interest and to deal with those that have arisen on an
equitable basis:
(1) Subject to the conditions described below, when officers submit and
recommend to the board of any company the proposed acquisition of any property
or security, the officers of that company shall cause the same opportunity to be
presented to the board of each of the other companies. If two or more of the
companies determine to participate in the transaction, the provisions of
paragraph (3) below will govern. Notwithstanding the foregoing provisions, an
investing company need not present an investment opportunity to another company
if it proposes to purchase securities issued by it or if, in the good faith
judgment of their common officers, the investment opportunity involves the
acquisition of (i) an investment which is one in which that company would not
invest because it does not come under that company's Investment Strategy (as
defined below), (ii) property in which the investing company has an existing
ownership or other type of interest and the latter company has none, or (iii)
securities of an issuer in which the investing company has an existing
investment and the latter company has none. Whenever any company authorizes the
sale, transfer or modification of its interest in a property or of its holdings
of securities of an issuer, it must so inform the board of each company which
also has an interest in that property or which owns securities of that issuer;
unless impractical to do so, that information must be given to the board of the
latter company at the next scheduled meeting of the board of the latter company.
If the board of the latter company authorizes similar action, the provisions of
paragraph (3) will govern.
(2) No company will sell any property or security to, or purchase any
property or security from, any other company unless that sale or purchase is
approved and determined to be fair to each company in the
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<PAGE> 13
transaction by a majority of the trustees or directors of that company who are
not affiliated as officers, trustees, directors or controlling persons of any
other company in the transaction.
(3) Whenever two or more of the companies shall concurrently undertake to
acquire or dispose of interests in the same property or in the same class of
securities under circumstances in which it appears likely that the price or
other consideration to be paid or received will not be equal for all property or
securities to be acquired or disposed of in a single transaction, the property
or securities will be acquired or disposed of in such a manner that, as nearly
as feasible, each company will participate in each transaction in proportion to
the total amount of such property or securities which its board has determined
to acquire or dispose of until each company has acquired or disposed of the
total amount of that property or class of security which its board has
determined to acquire or dispose of. In the event that the boards have not
determined in advance the total amount to be acquired or disposed of or the
participating companies desire in the aggregate to acquire more than is
available, the participation of each company in each transaction will be
proportionate to its total assets as shown on its balance sheet as at the close
of its quarterly fiscal period ended on or prior to the date of that
transaction, or, if that balance sheet is not available, as at the close of the
latest quarterly fiscal period for which a balance sheet is available. The
provisions of this paragraph may be modified with respect to a particular
transaction by the board of each company if it appears that such modification is
required in the interests of fairness, but any such modification must be
approved by majorities of the trustees or directors of each company
participating in the transaction, including a majority of the trustees or
directors of each participating company who are not officers, trustees,
directors or controlling persons of any other company participating in the
transaction.
(4) Each company shall from time to time provide each of the other
companies with a statement approved by that company's board of directors or
trustees setting forth that company's present strategy with respect to the
acquisition of additional property or other investments, describing the type of
assets which that company desires to purchase, that company's financial and
other objectives with respect to investments, the types of assets in which that
company does not wish to invest, and any other factors deemed appropriate by the
company's board of directors or trustees (the "Investment Strategy"). A company
may change its Investment Strategy by giving notice to the other companies, and
such change shall take effect 30 days after the date of the notice.
The Investment Strategy of EB, Congress Street, LNH and Eastover was not to
make further investments. The Company's Investment Strategy involves acquiring
equity positions in private or publicly traded companies which may or may not
result in mergers or acquisitions. The Company will also invest directly in real
property in the form of equity ownership or mortgages, however, the Company will
seek to control its investments by owning substantially all of the investment
and will avoid investments directly in real property that would result in a
minority interest. EastGroup's Investment Strategy also involves acquiring
equity interests in real property; however, based on EastGroup's size relative
to that of the Company, any investment opportunity of EastGroup in which the
Company could seek to participate would result in the Company holding only a
non-controlling minority interest. Accordingly, the Company believes that
EastGroup is not presently required to offer any of its investment opportunities
to the Company or any other member company of the Eastover Group.
The expense-sharing agreement was in effect from year to year and was
automatically renewable although any participant may have terminated its
participation in the arrangement at any time upon 60 days notice (or a shorter
period if necessary for a participating real estate investment trust to maintain
its tax status). If a participant did terminate, the expense-sharing agreement
would remain in effect with the remaining participants so long as Congress
Street had not given notice of termination. The expense-sharing agreement
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<PAGE> 14
contemplated that other real estate companies may have participated in the
future upon the same terms, unless one or more of the other participating
companies objected.
Background of Participants. EB and the Company began participating in the
expense-sharing arrangement in 1993 and 1980, respectively. Other than the
Company and EB, the other participants and the dates they began participating in
the expense-sharing arrangement are as follows: EastGroup, a Maryland real
estate investment trust, since 1983; Congress Street, a former Delaware
corporation engaged in the real estate business which merged with a wholly-owned
subsidiary of the Company on November 29, 1994, since 1984; Eastover, a former
Louisiana real estate investment trust which merged with a wholly-owned
subsidiary of EastGroup on December 22, 1994, since 1979; and LNH, a Maryland
corporation operating as a real estate investment trust, since 1992. (The
companies which participated in the expense-sharing arrangement, including LNH,
are collectively referred to herein as the "Expense-Sharing Participants.")
Total Assets and Common Costs. The following table shows the total assets
of each of the participants in the expense-sharing arrangement that were
publicly-traded securities and assets other than publicly-traded securities as
shown on their most recent publicly available balance sheets, the date of such
balance sheets and the percentage relationship of each participant's
non-securities assets to the total non-securities assets of all participants as
a group.
<TABLE>
<CAPTION>
AMOUNT OF ASSETS
AMOUNT OF ASSETS OTHER THAN PERCENT OF TOTAL
DATE OF THAT ARE PUBLICLY PUBLICLY TRADED NON-SECURITIES
NAME OF COMPANY(1) BALANCE SHEET TRADED SECURITIES(2) SECURITIES(2) ASSETS OF GROUPS
- ------------------- ------------- -------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
EastGroup........... 9/30/94 $ 978,000 $149,940,000 68.60%
The Company......... 9/30/94 16,371,000 46,083,000 21.08
Eastover............ 9/30/94 14,551,000 385,000 .18
EB.................. 9/30/94 14,154,000 22,164,000 10.14
Congress Street..... 8/31/94 11,957,000 --(3) --
<FN>
- ---------------
(1) Asset information as to LNH is not included because it paid a fixed annual
fee as its contribution to the expense-sharing agreement.
(2) Asset figures are unaudited with respect to all companies.
(3) Number is negative and assumed to be zero for purposes of allocating common
costs.
</TABLE>
During the twelve months ended December 31, 1994, a total of $2,133,913 of
common costs were incurred by EastGroup, the Company, Eastover, Congress Street
and EB. These common costs were allocated under the expense-sharing arrangement
as follows: $1,225,021 to EastGroup; $508,041 to the Company; $74,617 to
Eastover; $50,745 to Congress Street; and $275,489 to EB.
Termination of Arrangements. In connection with the business combinations
involving the Expense-Sharing Participants (i.e., Congress Street merged with a
wholly-owned subsidiary of the Company on November 29, 1994, EB combined with
the Company on April 27, 1995 and Eastover combined with EastGroup on December
22, 1994), the above described expense-sharing arrangements terminated on
December 31, 1994, except that EastGroup has the responsibility for managing LNH
under the prior administration agreement between LNH and Congress Street. Since
that date, the Company and EastGroup each have their own respective officers and
employees, who do not serve as officers or employees of the other company,
except for Leland R. Speed, who continues to serve as the Chief Executive
Officer of both
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<PAGE> 15
companies, and a small number of clerical and support staff employees. Certain
officers of the Company continue to serve as officers of EB, and EB pays the
Company an administrative fee based on EB's share of the common costs for the
last quarter of 1994, which will be prorated if terminated by reason of the
merger or otherwise (either party may terminate the arrangement on 30 days'
notice). The officers of EastGroup also continue to serve as officers of LNH; in
addition, two officers of the Company -- Steven G. Rogers and Sarah P.
Clark -- continue to serve as officers of LNH. David H. Hoster II and N. Keith
McKey, who formerly served as officers of all the Expense-Sharing Participants,
now serve as officers of EastGroup and LNH and not the Company.
Eastover Realty Corporation. Eastover Realty Corporation ("Eastover
Realty"), currently a wholly-owned subsidiary of the Company and prior to
November 29, 1994, a wholly-owned subsidiary of Congress Street, manages several
commercial and multi-family residential properties, for which it receives
management fees. Eastover Realty also performs leasing and brokerage services on
a commission basis. Pursuant to an understanding among the Expense-Sharing
Participants, any income derived from Eastover Realty was used to offset common
costs under the expense-sharing arrangements. In connection with the termination
of the expense-sharing arrangements and the combinations of various of the
Expense-Sharing Participants, the sharing of Eastover Realty's income has been
terminated, so that the Company, as a result of its business combination with
Congress Street, receives all of that income (or loss). Mr. Rogers has an
agreement with Eastover Realty pursuant to which he is paid 15% of the profits
of Eastover Realty. This payment will be in addition to his annual salary.
2. RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Ernst & Young LLP, independent public
accountants, to act as auditors for the fiscal year ending December 31, 1995.
Ernst & Young LLP has audited the accounts of the Company since 1986. A
representative of Ernst & Young 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.
The directors recommend a vote FOR the ratification of the appointment of
Ernst & Young LLP as the Company's independent public accountants for the fiscal
year ending December 31, 1995. Unless instructed otherwise, proxies will be
voted FOR this proposal.
3. OTHER MATTERS
So far as the Management is aware, no matters other than those outlined in
this Proxy Statement will be presented to the Meeting for action on the part of
the shareholders. If any other matters are properly brought before the Meeting,
it is the intention of the persons named in the accompanying proxy to vote
thereon the Shares to which the proxy relates in accordance with their best
judgment.
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<PAGE> 16
SHAREHOLDER PROPOSALS
Shareholder proposals must be received at the Company's offices no later
than December 31, 1995 in order to be considered for inclusion in the Company's
proxy materials for the 1996 Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
SARAH P. CLARK
Vice President, Chief Financial
Officer
and Secretary
Jackson, Mississippi
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<TABLE>
<S> <C> <C> <C>
P THE PARKWAY COMPANY
R 300 ONE JACKSON PLACE
O 188 EAST CAPITOL STREET
X JACKSON, MISSISSIPPI 39201
Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Leland R. Speed and H. C. Bailey, Jr., and each or either of them, Proxies for the
undersigned, with full power of substitution, to vote all shares of Common Stock, $1.00 par value ("Shares"), of The
Parkway Company (the "Company") which the undersigned would be entitled to vote at the Annual Meeting of Shareholders (the
"Meeting") to be held at the Company's offices, 300 One Jackson Place, 188 East Capitol Street, Jackson, Mississippi on
Wednesday, May 31, 1995, at 1:30 p.m., Jackson time, and directs that the Shares represented by this Proxy shall be voted
as indicated below:
Election of Directors, Nominees: (change of address)
Daniel C. Arnold; H.C. Bailey, Jr.; George R. Farish; Roger P. __________________________________________
Friou; B. Pat Green, Jr.; Sidney W. Lassen; Joe F. Lynch; C. __________________________________________
Herbert Magruder; W. Lincoln Mossop, Jr.; and Leland R. Speed. __________________________________________
__________________________________________
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER. THE BOARD OF DIRECTORS FAVORS A VOTE FOR THE
ABOVE PROPOSALS. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
--- SEE REVERSE
SIDE
</TABLE>
<PAGE> 18
<TABLE>
<C> <S> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
<CAPTION>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. Election of / / / / 2. Proposal to ratify / / / / / /
Directors the appointment
(see reverse) of Ernst & Young,
For, except vote withheld from the following LLP as the inde-
nominee(s): pendent public accountants of the
Company for the fiscal year ending
---------------------------------- December 31, 1995.
3. In their discretion,
the Proxies are
authorized to vote
upon such other
business as may properly
come before the
Meeting or any
adjournment thereof.
Change / /
of
Address
Attend / /
Meeting
SIGNATURE(S) _____________________________________________ DATE ___________ Joint owners should each sign.
Executors, administrators,
trustees, guardians and
SIGNATURE(S) _____________________________________________ DATE ___________ corporate officers should
give title.
Please date and sign name exactly as it appears above and return this Proxy promptly in the enclosed
envelope, which requires no postage if mailed in the United States.
</TABLE>
