PACIFIC GATEWAY PROPERTIES, INC.
101 Spear Street, Suite 215
San Francisco, CA 94105
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 10, 1994
This proxy statement is furnished to holders of
the Common Stock, par
value $1.00 per share, of PACIFIC GATEWAY PROPERTIES,
INC. (hereinafter called the "Company") in connection
with the solicitation of proxies by the Board of
Directors of the Company to be used at the Annual
Meeting of Shareholders of the Company to be held at
the World Trade Club in the World Trade Center which
is the clock tower building at the foot of Market
Street on the Embarcadero waterfront area, San
Francisco, California, on Tuesday, May 10, 1994 at
9:00 a.m., and at any adjournment or adjournments
thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders.
If the accompanying form of proxy is executed
and returned, it may nevertheless be revoked at any
time insofar as it has not been exercised. The
persons named in the accompanying form of proxy will
vote such proxy for election to the Board of the
nominees named below. It is anticipated that this
Proxy Statement and the enclosed Proxy will be first
mailed to record holders of the Company's Common Stock
on or about April 6, 1994.
As of April 6, 1994, the Company had outstanding
3,878,964 shares of Common Stock, par value $1.00 per
share. Each share of Common Stock is entitled to one
vote.
The Board of Directors has fixed the close of
business on March 31, 1994, as the record date for the
determination of shareholders entitled to receive
notice of and vote at the annual meeting of
shareholders.
SHAREHOLDER PROPOSALS FOR THE 1995 ANNUAL MEETING
Any proposal of a shareholder intended to be
presented at the Company's 1995 Annual Meeting of
Shareholders must be received by the Company for
inclusion in the proxy statement and form of proxy for
that meeting no later than December 7, 1994.
A. ELECTION OF DIRECTORS
At the meeting a Board of Directors is to be
elected, each director to hold office until the next
annual meeting of shareholders or special meeting of
shareholders held in place thereof, and until his
successor is chosen and qualified. The Board of
Directors does not contemplate that any nominee will
be unable to serve as a director for any reason,
however, if that should occur prior to the meeting,
the proxy holders will select another nominee to stand
for election in his place and stead.
The following table sets forth certain
information as of March 1, 1994, concerning beneficial
ownership of the Common Stock of the Company by each
director and executive officer, individually, and the
executive officers and directors of the Company as a
group. Also included in the table with respect to
each nominee for election as a director is his
principal occupation or employment during the past
five years and his age.
<TABLE>
Amount and Nature of Beneficial
Ownership of Common Stock (1)
Sole
Voting and Shared
Office and Investment Voting and % of
<CAPTION>
Name and Age Principal Occupation Power Investment Aggregate Class
Nominees:
<S> <C> <C> <C> <C> <C>
Robert P. Freeman (49) Chairman of the Company from July 900 --- 900 *
1993 to December 1993; Director of
the Company since December 1985;
President of Lazard Freres Real Estate
Fund, L.P.; President and Chief
Executive Officer of the Company
from February 1991 to July 1992;
prior thereto President, The Marathon
Group of Companies.
Marshall A. Jacobs Director of the Company since 200 --- 200 *
(74) February 1984/ Of Counsel, law firm
of Jacobs Persinger & Parker, prior
thereto, Senior partner in the firm.
David E. Post (A)(37) Director of the Company since May --- 345,000(2) 345,600 8.9%
1993; Hanson Investment Management
Company; President, CSI Capital
Management; President, Alternative
Capital Corporation; President, HS
Partners, Inc. (a subsidiary of HS
Resources, Inc.)
Roger D. Snell (A)(38) Director of the Company since July 21,000(3) --- 21,000 *
1992; President and Chief Executive
Officer of the Company; Partner and
Vice President Paragon Group.
Roderick A. Young(A) Director of the Company since July 1,000 --- 1,000 *
(50) 1992; President of General Surgical
Innovations; President and Chief
Executive Officer of Focal Surgery
(a subsidiary of Diasonics); Director
of Diasonics; President and Chief
Financial Officer Diasonics; President
and Chief Operating Officer Diasonics;
Executive Vice President Diasonics;
President of Toshiba America MRI.
Other Executive Officers:
Raymond V. Marino(35) Vice President and Controller of 3,000(3) --- 3,000 *
the Company since August 1992; Vice
President of Finance and Controller
Hunting Gate Investments; Certified
Public Accountant and Consultant
Temple Development and Construction
Companies.
Christopher M. Watson Vice President of Marketing of the 3,000(3) --- 3,000 *
(35) Company since September 1992; Vice
President Coldwell Banker
Commercial Real Estate Services, Inc.
William E. Whitlow(39) Vice President of Property 3,000(3) --- 3,000 *
Management of the Company since
October 1992; Second Vice President,
Director of Management for Aetna
Realty Investors/Aetna Property
Services.
All directors and executive 32,100 345,600 377,700 9.7%
officers as a group
(8 persons)
</TABLE>
* Less than one percent
(1) Beneficial ownership is the direct or indirect
ownership of Common Stock of the Company
including the right to control the vote or
investment of or acquire such Common Stock
within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934. The shares
owned by each person or by the group, and the
shares included in the total number of shares
outstanding have been adjusted in accordance
with said Rule 13d-3. The aggregate percentage
owned has been determined by dividing the
aggregate total of shares owned by each person,
or by the group, by the number of shares of
Common Stock of the Company outstanding on March
1, 1994.
(2) Based on information contained in Amendment No.
1 to Schedule 13D of David E. Post, dated
December 15, 1990. Includes 102,900 shares held
by MiJen L.P. 1 of which David Post is the
General Partner. The remaining 215,950 shares
are held by three trusts and two Individual
Retirement Accounts for which David E. Post acts
as investment adviser.
(3) Represents 21,000, 3,000, 3,000 and 3,000 shares
of exercisable stock options granted under the
1984 Incentive Stock Option Plan as of December
31, 1993 for Roger D. Snell, Raymond V. Marino,
Christopher M. Watson and William E. Whitlow,
respectively.
(A)
Member of the Audit Committee.
Directors who are not officers of the Company
may receive an annual fee of $7,500, and supplemental
fees of $750 for each meeting of the Board or a
committee thereof attended, and $375 for each
telephone meeting, plus out-of-pocket expenses
incurred in connection with services rendered to the
Company and travel and lodging for each board meeting.
The Board of Directors of the Company held five
meetings of the Board in 1993. Since the size of the
Board of Directors was reduced to five members in
1993, it was decided that only an Audit Committee
consisting of three members was necessary. The Audit
Committee's duties are to oversee the audit function
of the Company's independent certified public
accountants, to periodically review significant
financial information relating to the Company and to
act as a communication link between the Board of
Directors and such certified public accountants. The
Audit Committee met two times in 1993. The members of
the Audit Committee are identified in the above table.
Compensation issues were voted upon by the full Board
of Directors.
During 1993, all of the directors of the Company
attended every meeting of the Board of Directors and
its committees of which they are members, except
Roderick A. Young who was absent from one Board of
Directors meeting.
Except as set forth below, none of the nominees
is a director of any company which is subject to the
reporting requirements of the Securities Exchange Act
of 1934 or which is a registered investment company
under the Investment Company Act of 1940.
<PAGE>
Name of Nominee Director of
Robert P. Freeman Providence Energy
Corporation
Marshall A. Jacobs Perini Corporation
Directors are elected by a plurality of the
votes cast by the holders of shares entitled to vote
in the election.
CERTAIN OTHER BENEFICIAL HOLDERS
The following table sets forth certain
information concerning beneficial ownership, as of
March 1, 1994, of the Common Stock of the Company by
certain other holders of in excess of 5% of the Common
Stock of the Company.
According to the information available to the
Board of Directors no person owns of record, or
beneficially, more than 5% of the outstanding Common
Stock of the Company except as set forth below and in
the table under the caption "ELECTION OF DIRECTORS".
<PAGE>
<TABLE>
Amount and Nature of Beneficial
Ownership of Common Stock
Sole Shared
Voting and Voting and
Investment Investment % of
<CAPTION>
Name Address Power Power Aggregate Class(1)
<S> <C> <C> <C> <C> <C>
Citicorp Real Estate, Inc. One Sansome Street 1,000,000(2) 1,000,000 20.5%
a subsidiary of Citibank Suite 2830
San Francisco, CA 94104
H.Todd Cobey, Jr. 10 Liberty Square 284,500(3) 284,500 7.3%
Boston, MA 02109
Perry Goldberg Specks & Goldbert 136,000(4) 70,000(4) 206,000 5.3%
10 S. Wacker Drive
Suite 3600
Chicago, IL 60606
Robert Stephenson & 555 California Street 211,600(5) 211,600 5.5%
Company, Inc. San Francisco, CA 94104
The Robertson Stephens
Orphan Fund
The Robertson Stephens
Contrarian Fund
</TABLE>
(1) Calculated in accordance with Rule 13d-3. See
footnote (1) on Page 3 hereof.
(2) Based on information contained in Schedule 13D
for Citicorp Real Estate, Inc. (CREI), dated
December 30, 1993. The issuer issued to CREI
warrants to acquire an aggregate of 2,000,000
shares of the Common Stock. Warrants with
respect to 1,000,000 shares are presently
exercisable and, if such warrants were
exercised, CREI would become owner of
approximately 20.5% of the outstanding shares of
Common Sock of the Company. CREI has no present
power to vote or direct the voting of any shares
since no warrants have been exercised. If the
warrants were exercised by CREI, CREI would have
the sole power to vote or direct the voting of
such shares. The transaction was effected in
connection with the restructuring of loans made
by CREI to the Company and was closed in San
Francisco, California.
(3) Based on information contained in Schedule 13D
for H. Todd Cobey, Jr., dated December 9, 1993.
Mr. Cobey is the indirect beneficial owner of
284,500 shares of the Common Stock of the
Company. Cobey, Jacobson & Gordon, Inc. (CJG,
Inc.) as investment advisor to certain private
investors, has sole dispositive power with
respect to 104,000 shares of the 284,500, but
has no voting power with respect to such shares.
Mr. Cobey has sole dispositive and voting power
with respect to such shares. Mr. Cobey has sole
dispositive and voting power with resect to
4,000 shares of the 284,000 owned by him
personally. Mr. Cobey is also a partner in CJG
Associates which is the sole General Partner of
the Ellis Fund Limited Partnership, a
Massachusetts limited partnership. CJG
Associates has sole dispositive and voting power
with respect to all of the shares (176,000)
owned by the Limited Partnership.
(4) Based on information contained in Schedule 13D
of Perry Goldberg, dated October 22, 1993. Mr.
Goldberg beneficially owns 206,000 shares of the
Common Stock. Mr. Goldberg has sole voting and
sole dispositive power with respect to 136,000
shares and shared voting power and shared
dispositive power with respect to 70,000 shares,
68,800 shares of which are owned of record by
the Profit Sharing Plan, for which Mr. Goldberg
is a trustee, and 1,200 shares of which are
owned of record by his wife, Margaret Goldberg.
In addition, Mr. Goldberg disclaims beneficial
ownership of 9,400 shares owned by his adult
daughters, but as to which Mr. Goldberg may be
deemed to be the beneficial owner, and to have
voting and/or dispositive powers.
(5) Based on information contained in Schedule 13D
of Paul H. Stephens: The Robertson Stephens
Orphan Fund, dated July 15, 1993, Bayview
Investors, Ltd., Robertson, Stephens & Company,
L.P., Robertson, Stephens & Company Incorporated
and Paul Stephens are not the registered owners
of the Company's Shares. However, as general
partners of The Orphan Fund, Bayview Investors,
Ltd. and Robertson, Stephens & Company, L.P. may
be deemed to have shared voting and dispositive
power over 166,100 shares of Common Stock held
by The Orphan Fund.
Under the terms of the Investment Advisory
Agreement between the Contrarian Fund and
Robertson Stephens Investment Management, L.P.
("RSIM, L.P."), RSIM, L.P. as investment
manager, possesses the power to manage the
investment activities of the Contrarian Fund
including the power to vote and direct the
disposition of the securities. Paul Stephens is
the investment manager of the Contrarian Fund
and as such may be deemed to have shared voting
and dispositive power over 45,500 shares of
Common Stock held by the Contrarian Fund.
EXECUTIVE COMPENSATION
The Summary Compensation Table below sets forth
individual compensation information for each of the
Company's last three fiscal years on the Chief
Executive Officer ("CEO") and other most highly paid
executive officers who were serving as such at the end
of the Company's fiscal year ended December 31, 1993
and whose total annual salary and bonus for such
fiscal year exceeded $95,000.
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
Long Term
Compensation
Awards
<CAPTION>
Annual Compensation Stock All Other
Name and Principal Position Year Salary Bonus Options Compensation
<S> <C> <C> <C> <C> <C>
Roger D. Snell 1993 $170,000 $147,500 --- ---
President and CEO (1) 1992 $ 74,375 $ 39,736 100,000 ---
1991 --- --- --- ---
Raymond V. Marino (2) 1993 $ 80,000 $ 15,000 --- ---
Vice President & Controller 1992 $ 30,000 $ 1,601 15,000 ---
1991 --- --- --- ---
Christopher M. Watson (3) 1993 $ 60,000 $ 30,000 --- $45,714
Vice President of Marketing 1992 $ 16,250 $ 4,399 15,000 ---
1991 --- --- --- ---
William E. Whitlow (4) 1993 $ 95,000 $ 30,000 --- $ 3,000
Vice President of Property 1992 $ 20,628 --- 15,000 $ 625
Management 1991 --- --- --- ---
</TABLE>
(1) Mr. Snell joined the Company as President and CEO
in July 1992. Mr. Snell's employment
arrangements effective January 1, 1994, include a
base salary of $250,000 and annual incentive
bonus and stock options. The exact amount of Mr.
Snell's bonus up to a maximum of $90,000 will be
determined in June and December 1994.
(2) Mr. Marino joined the Company as Vice President
and Controller in August 1992.
(3) Mr. Watson joined the Company as Vice President
of Marketing in September 1992. In 1993, his
other compensation consisted of lease commissions
of $42,714 and an auto allowance of $3,000.
(4) Mr. Whitlow joined the Company as Vice President
of Property Management in October 1992. In 1993
and 1992, his other compensation consisted of an
auto allowance.
None of the other officers listed in the
compensation table were eligible for a Simplified
Employee Pension Plan (SEP) contribution in 1993.
Option Tables
There were no options granted to the CEO or other
executive officers named in the Summary Compensation
Table during the last fiscal year ended December 31,
1993.
The following table sets forth option exercise
activity in the last fiscal year and the fiscal year-
end option values with respect to the CEO and each of
the executive officers named in the Summary
Compensation Table.
<PAGE>
Aggregated Option Exercises in the Fiscal Year Ended
December 31, 1993 and Fiscal Year End Option Values
<TABLE>
Values of
Number of Unexercised In-
Unexercised the-Money
Options at Options at
12/31/93(#) 12/31/93 $ (1)
<CAPTION>
Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise(#) Realized($) Unexercisable Unexercisable
<S> <C> <C> <C> <C> <C>
Roger D. Snell --- --- 20,000/80,000 $2,500/$10,000
Raymond V. Marino --- --- 3,000/12,000 $1,875/$ 7,500
Christopher M. Watson--- --- 3,000/12,000 $2,346/$ 9,384
William E. Whitlow --- --- 3,000/12,000 $3,561/$14,244
</TABLE>
(1) These values are based upon the difference
between the exercise prices of all options
awarded and the December 31, 1993 closing price
for the Company's Common Stock of $3.75 per
share.
Compensation Committee Interlocks and Insider
Participation. Mr. Snell, a Director of the Company,
is its President and Chief Executive Officer. (Mr.
Freeman, a Director of the Company, was President and
Chief Executive Officer of the Company until July
1992). See Report of the Board of Directors on
Executive Compensation for information on
participation in deliberations concerning Executive
Officer Compensation.
Mr. Jacobs is Of Counsel to the law firm of
Jacobs Persinger & Parker. Such law firm performed
services for the Company during fiscal 1993, and the
Company proposes to retain such firm in fiscal 1994.
Report of the Board of Directors on Executive
Compensation
Because of the small size of the Board of
Directors of the Company, there is no compensation
committee. The Board of Directors reviews and
determines all executive compensation matters
including the awarding of bonuses, the granting of
stock options and the administration of the Company's
stock option plans. Mr. Snell, who is President,
Chief Executive Officer and a Director of the Company,
does not participate in executive compensation
determinations with respect to himself, but does
participate with respect to the three other executive
officers and makes recommendations as to the salaries,
bonuses and granting of stock options to such three
executive officers.
Executive Compensation Policies
In mid-1992 at the time the Company moved its
headquarters from Framingham, Massachusetts, to San
Francisco, California, the Board of Directors
assembled a new management team including a new Chief
Executive Officer and three other new executive
officers. In connection with hiring the Chief
Executive Officer and the three other new executive
officers, the Board of Directors determined to pay
base salaries and annual incentive bonuses at levels
required to attract and retain executives who could
manage the operations of the Company in its then
difficult economic circumstances. The fixing of the
base salaries and potential bonus awards and the
granting of options was negotiated by the former Chief
Executive Officer subject to the approval of the Board
of Directors.
For compensation under the annual bonus plan,
executives are evaluated on the basis of performance
against individual work plan objectives. The work
plan objectives include as to each of the three
executive officers other than the Chief Executive
Officer specific improvements in department function
of the respective departments, finance, property
management and leasing, which such executive heads.
The executive officer responsible for leasing is also
eligible for a commission on new or re-leased space of
properties of the Company (with which he is involved).
In December 1993, the Board determined, based upon its
subjective evaluation of each of such three executive
officers achievement of his work plan objectives and
the operations of his department, to award $10,000,
$18,000 and $30,000 bonuses, respectively, to Messrs.
Marino, Watson, and Whitlow for 1993, so that their
total bonuses for 1993 were $15,000, $30,000 and
$30,000, respectively. Based upon the same
evaluation, the Board also determined to increase
Messrs. Marino and Watson's annual salaries to $90,000
and $70,000, respectively, effective October 1, 1993,
and Mr. Whitlow's salary to $105,000 effective January
1, 1994.
In 1992, in connection with assembling the new
management team, the Board of Directors had determined
to provide long term incentive compensation to the new
Chief Executive Officer and the three other new
executive officers by granting options under the
Company's incentive stock option plan. No additional
options were granted to any of them in 1993. The
number of options granted to an executive officer is
based upon the Board's subjective judgment as to the
relative contribution to the long term success of the
Company which such officer may make.
Chief Executive Officer Compensation
Mr. Snell's employment arrangements, including
his compensation for 1993, were negotiated in June
1992, and as described above, included base salary,
annual incentive bonus and stock options. In June
1992, Mr. Snell's bonus potential for the year ended
June 30, 1993 was set at $170,000 of which a minimum
of $80,000 of annual bonus was guaranteed. Mr.
Snell's work plan objectives included financing and
development objectives, operating performance
improvement at specific properties, and overall
management responsibilities. In December 1993, based
upon the Board's subjective evaluation of Mr. Snell's
performance in achieving his work plan objectives,
including specifically the refinancing of one of the
Company's major properties and of its debt facility
with the Company's primary lender, the Board
determined to pay Mr. Snell $22,500 additional bonus
for 1993. Mr. Snell's bonus for the period from June
1992 to December 1993 totalled $102,500 of a possible
$170,000. No other determination as to the Chief
Executive Officer's 1993 compensation was made.
However, at the December 1993 meeting, the board also
determined, based upon the same subjective judgement
that went into the determination of the bonus payment,
that effective January 1, 1994, Mr. Snell's annual
base salary would be $250,000 and his bonus potential
for 1994 would be $90,000.
<PAGE>
The Board of Directors:
Robert P. Freeman
Marshall A. Jacobs
David E. Post
Roger D. Snell
Roderick A. Young
<PAGE>
PACIFIC GATEWAY PROPERTIES, INC. (PGP)
PERFORMANCE GRAPH
Comparison of Five Year Cumulative Total Return*
Among PGP, Dow Jones Equity Market Index and Dow Jones
Real Estate Inv. Index**
1988 1989 1990 1991 1992 1993
Pacific Gateway Properties $100 $ 95 $ 43 $ 32 $ 17 $ 24
Dow Jones Equity Market Index $100 $131 $126 $167 $181 $199
Dow Jones R.E.Invest. Index $100 $153 $102 $114 $103 $120
Assumes $100 invested on 12/31/88 in Pacific Gateway
Properties Common Stock. Dow Jones Equity Mkt. Index
and Dow Jones Real Estate Inv. Index
* Total return assumes reinvestment of dividends.
** Fiscal year ending December 31.
The above graph compares the performance of PGP with
that of the Dow Jones Equity Market Index and the Dow
Jones Real Estate Investment Index. The real estate
companies in the Dow Jones Real Estate Investment
Index are: Catellus Development, Federal Realty
Investment Trust, Host Marriott Corporation,
Meditrust, Newhall Land, New Plan Realty Trust,
Rockefeller Center Properties, the Rouse Company and
Weingarten.<PAGE>
CERTAIN TRANSACTIONS
Organization
The Company was incorporated under the laws of
the State of New York on January 12, 1984 and began
its operations in April 1984 upon the transfer to it
of certain assets formerly owned by Perini Corporation
and the distribution of shares of the Company's Common
Stock to the shareholders of Perini Corporation.
One of the Company's director nominees is also a
director of Perini Corporation. The two companies had
the same controlling shareholder group during part of
1993. During 1985, the Board of Directors of the
Company established a Special Review Committee,
consisting of independent directors who are not
affiliated with Perini Corporation's board of
directors to review on behalf of, and make
recommendations to the Board with respect to
agreements involving the Company and Perini
Corporation. The Special Review Committee was not
required or used in 1993.
Joint Ventures
The Company and a subsidiary of Perini
Corporation, are partners in a common real estate
venture. The following table identifies the name of
the joint venture, approximate percentage interest of
each company at December 31, 1993, and the designated
managing partner.
Approximate
Partnership Interest
Pacific Subsidiary
Gateway of
Properties, Perini
Inc. Corporation
Rincon Center Associates 23% 46%*
* Managing Partner.
A subsidiary of the Company manages the
operations of Rincon Center Associates (RCA) for a
fee.
The Company acquired 20% of its interest in RCA
from a subsidiary of Perini Corporation for a payment
of $1 million plus the posting of a $6,250,000 secured
letter-of-credit in favor of a lender involved in the
partnership financing. As a result of a refinancing
of RCA in 1993, the letter-of-credit required from the
Company was reduced to $4.5 million. The transaction
also included an allocation of a portion of that
subsidiary's share of partnership tax losses to the
Company.
The improvements of RCA, a mixed-use complex in
San Francisco, California, were built by a
construction joint venture in which a Perini
Corporation subsidiary had a 40% interest. This
contract was completed in 1989.
In connection with the July 1993 refinancing of
Rincon Center Phase One, the Company completed an
agreement in June 1993 with a subsidiary of Perini
Corporation, the other general partner in RCA. This
agreement provides the Company with the flexibility to
borrow funds from the other general partner to limit
its future cash obligations to RCA. Under this
funding arrangement, all amounts advanced, related
fees and accrued interest are non-recourse to the
Company. The Company shall pay a related fee to the
extent of amounts advanced multiplied by the
percentage applicable to the year in which such funds
are advanced:
Calendar Applicable
Year Percentage
1993 6.0%
1994 6.0%
1995 10.0%
1996 17.5%
1997 and thereafter 25.0%
Interest accrues on the unpaid portion of both
the principal amount advanced and related fees at the
Bank of America prime rate plus 2%. Amounts advance
under this funding arrangement, plus related fees and
accrued interest, are required to be repaid from
future cash distributed by RCA to the Company.
This agreement does not reduce the level of the
Company's general and limited partnership interests in
RCA. As of December 31, 1993, $1,660,000 had been
advanced under this agreement. In addition, fees and
accrued interest relating to the amount advanced
through December 31, 1993, of approximately $161,000
was expensed by the Company. Of the $1,660,000
advanced through December 31, 1993, $1,210,000 was
used to reduce debt at Rincon Center in connection
with the refinancings of the Rincon Center Phases One
and Two, and the balance was used for operating cash
requirements in connection with 1993 property taxes
due at Rincon Center. RCA is presently appealing its
property tax assessment, and the outcome is difficult
to predict at this time.
Other
Among other firms, the Company utilized the
services of the law firm of Jacobs Persinger & Parker
(to which Marshall A. Jacobs, a Director of the
Company, is Of Counsel) during the last fiscal year,
and it is anticipated that the Company will continue
to do so during the current year.
B. PROPOSAL TO APPROVE ADOPTION OF
1994 INCENTIVE STOCK OPTION PLAN
In September 1985, the shareholders of the
Company approved the Company's 1985 Incentive Stock
Option Plan (the 1985 ISOP) which contained 200,000
shares of common stock available for grants of Options
under the 1985 ISOP. All the shares of this plan have
been granted.
The following summary of the Company's 1994
Incentive Stock Option Plan (the 1994 ISOP) is
qualified in its entirety by the full text of the 1994
ISOP, a copy of which is attached hereto as Exhibit A.
On March 7, 1994, the Board of Directors of the
Company adopted the 1994 ISOP subject to approval by
the Company's shareholders, which provides for the
grant of incentive stock options (within the meaning
of Section 422 of the Internal Revenue Code) to
officers and other key employees of the Company
presently approximately 50 in number. The 1994 ISOP
will be administered by the Board, of Directors or a
Committee to be designated by the Board of (the
"Committee") .
A total of 250,000 shares of Common Stock have
been reserved for issuance under the 1994 ISOP. As of
March 31, 1994 options to purchase an aggregate of
50,000 shares of Common Stock have been granted under
the 1994 ISOP to four employees of the Company. The
share price at March 31, 1994, was $____.
The Committee will determine, subject to the
terms of the 1994 ISOP (i) which eligible employee
will be granted options, (ii) the number of shares
that may be purchased under the option, (iii) the
exercise price of the options, (iv) the form of
consideration that may be used to pay for the shares
issued upon the exercise of an option, (v) when an
option will become exercisable and (vi) the periods
during which the options may be exercised. In no
event will options be granted (i) at prices less than
the fair market value of the Common Stock on the date
of grant or (ii) for a term of more than ten years.
The 1994 ISOP provides that, unless the
Committee determines otherwise, options that have not
been exercised will expire (i) one year after
termination due to disability within the meaning of
Section 22(e)(3) of the Internal Revenue Code as
determined by the Committee, (ii) one year after the
participant's death, and (iii) coincident with the
date of termination if due to any other reasons,
except as and to the extent that the Committee may
determine otherwise. In the event of termination due
to normal retirement, or earlier retirement with
Committee consent under a formal plan or policy of the
Company while any portion of an option remains
exercisable, such option shall expire at the earlier
of the expiration of the option's term or three years
after such termination; provided, however, that
exercise of the option after the periods set forth in
the preceding sentence may disqualify such option from
treatment as an Incentive Stock Option. In the event
of death following termination of employment while any
portion of the option remains exercisable, the
Committee in its discretion may provide for an
extension of the exercise period for up to one year
after the participant's death but not beyond the
expiration of the option's terms. In no event is an
option exercisable after its original term. The 1994
ISOP also provides that certain participants, in lieu
of exercise of options will be entitled to a cash
payment upon the occurrence of a "change in control"
of the Company, including a sale of all or
substantially all of the property of the Company.
Options are not transferable other than by will
or under the laws of descent and distribution, and are
exercisable during the lifetime of the optionee only
by the optionee. The Board of Directors has the right
to amend, suspend or terminate the 1994 ISOP at any
time, but no such action after the 1994 ISOP becomes
effective can effect or impair the rights of any
optionee under an option granted prior to such action
without the optionee's consent. Certain amendments
must be approved by the Company's stockholders.
Federal Income Tax Consequences
The following is a general summary of the
federal income tax consequences under the current tax
law of incentive stock options. It does not purport
to cover all of the special rules, including special
rules relating to optionees subject to Section 16(b)
of the Securities Exchange Act of 1934, as amended,
and the exercise of an option with previously-acquired
shares, or the state or local income or other tax
consequences inherent in the ownership and exercise of
stock options and the ownership and disposition of the
underlying shares.
An optionee will not recognize taxable income
for federal purposes upon the grant of an incentive
stock option or upon its exercise. If the optionee
disposes of the shares acquired pursuant to the
exercise of an incentive stock option more than two
years after the date of grant and more than one year
after the transfer of the shares to him, the optionee
will recognize long-term capital gain or loss upon
such disposition. In such instances, the Company will
not be entitled to a deduction. However, if the
optionee disposes of such shares within the required
holding period, a portion of the optionee's gain will
be treated as ordinary income. In this instance, the
Company will generally be entitled to deduct at that
time such amount.
In addition to the federal income tax
consequences described above, an optionee may be
subject to the alternative minimum tax, which is
payable to the extent it exceeds the optionee's
regular tax. For this purpose, upon the exercise of
an incentive stock option, the excess of the fair
market value of the shares over the exercise price
thereof is an adjustment which increases the
optionees's alternative minimum taxable income. In
addition, the optionee's basis in such shares is
increased by such excess for purposes of computing the
gain or loss on the disposition of the shares for
alternative minimum tax purposes. If an optionee is
required to pay an alternative minimum tax, the amount
of such tax which is attributable to deferral-type
preferences and adjustments (including the incentive
stock option adjustment) is allowed as a credit
against the optionee's regular tax liability in
subsequent years. To the extent the credit is not
used, it is carried forward.
The following table presents information
concerning awards made under the 1985 and 1994 ISOP's
by the Board of Directors on March 7, 1994.
<TABLE>
1985 ISOP Exercise or
Options Base Price
<CAPTION>
Name and Position Granted # ($/Sh)
<S> <C> <C>
Roger D. Snell, President and CEO 20,500 $3.6875
Raymond V. Marino, Vice President & Controller 2,150 $3.6875
Christopher M. Watson, Vice President of Marketing 6,175 $3.6875
William E. Whitlow, Vice President of Property Management 6,175 $3,6875
All current executive officers as a group 35,000
1994 ISOP Exercise or
Options Base Price
Name and Position Granted # ($/Sh)
Roger D. Snell, President and CEO 29,500 $3.6875
Raymond V. Marino, Vice President & Controller 2,850 $3.6875
Christopher M. Watson, Vice President of Marketing 8,825 $3.6875
William E. Whitlow, Vice President of Property Management 8,825 $3.6875
All executive officers as a group 50,000
</TABLE>
No current director, who is not an executive
officer, and no nominee orother employees have been
granted options under the 1994 ISOP.
The Board of Directors recommends that the
shareholders vote FOR the adoption of the 1994 ISOP.
To be adopted, the 1994 ISOP must be approved by a
majority of the votes cast by the holders of shares
entitled to vote thereon.
C. OTHER MATTERS
The Board of Directors knows of no matters which
will be presented for consideration at the meeting
other than the matters referred to in this statement.
Should any other matters properly come before the
meeting, it is the intention of the persons named in
the accompanying proxy to vote such proxy in
accordance with their best judgement.
VOTING PROCEDURES
A stockholder who abstains from a vote by
registering an abstention vote will be deemed present
at the meeting for quorum purposes but will not be
deemed to have voted on the particular matter.
Similarly, in the event a nominee holding shares for
beneficial owners votes on certain matters pursuant to
discretionary authority or instructions from
beneficial owners, but with respect to one or more
other matters does not receive instructions from
beneficial owners and does not exercise discretionary
authority (a so-called "non-vote"), the shares held by
the nominee will be deemed present at the meeting for
quorum purposes but will not be deemed to have voted
on such other matters. Thus, on the vote for the
proposal to elect directors and for the proposal to
adopt the stock option plan, where the outcome depends
on the votes cast, abstentions and non-votes will have
no effect.
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The financial statements of the Company and its
subsidiaries included in the 1993 Annual Report on
Form 10-K have been examined by Arthur Andersen & Co.
A representative of Arthur Andersen & Co. is expected
to attend the Annual Meeting with the opportunity to
make a statement if he so desires. It is expected
that such representative will be available to respond
to appropriate questions from shareholders.<PAGE>
SOLICITATION OF PROXIES
The Company will bear the cost of this solicitation
of proxies. In addition to solicitation of proxies by
mail, the Company may reimburse brokers and other
nominees for the expense of forwarding proxy materials
to the beneficial owners of stock held in their names.
Directors, officers and employees of the Company may
also solicit proxies on behalf of the Board of
Directors but will not receive any additional
compensation therefor.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
THEREFORE, SHAREHOLDERS ARE URGED TO FILL IN, SIGN,
DATE AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE
ENCLOSED ENVELOPE.
By order of the Board of
Directors
Raymond V. Marino
Secretary
San Francisco, California
April 6, 1994
Upon the written request of any shareholder, the
Company will provide a copy of its Annual Report on
Form 10-K for 1993, including the financial statements
and the schedules thereto, filed with the Securities
and Exchange Commission. Any request should be
directed to Raymond V. Marino, Vice President and
Controller, Pacific Gateway Properties, Inc. One
Rincon Center, 101 Spear Street, Suite 215, San
Francisco, California 94105, Telephone Number (415)
543-8600, Facsimile Number (415) 777-3765. There will
be no charge for such report unless one or more
exhibits thereto are requested, in which case the
Company's reasonable expenses of furnishing exhibits
may be charged.
<PAGE>
EXHIBIT A
PACIFIC GATEWAY PROPERTIES, INC.
1994 INCENTIVE STOCK OPTION PLAN
1. PURPOSE
The Plan is intended to enhance the
profitability and value of Pacific Gateway
Properties, Inc. for the benefit of its
stockholders by permitting the Corporation to
grant stock ownership to officers and other
key employees. These opportunities are
intended to provide additional incentive to
such personnel by offering them a greater
stake in the Corporation's continued success.
Further, the availability and offering of
award opportunities under the Plan is
intended to enhance the Corporation's ability
to attract and retain individuals of
exceptional managerial talent upon whom, in
large measure, the sustained progress, growth
and profitability of the Corporation will
depend. Through incentive stock option
grants, the proprietary position and outlook
of officers and key employees is furthered,
thus tying their personal interests more
closely to those of stockholders.
2. DEFINITIONS
For Plan purposes, except where the
context otherwise indicates, the following
terms shall have the meanings which follow:
(a) "Agreement" shall mean a
written agreement (including any amendment or
supplement thereto) between the Corporation
and a Participant which specifies the terms
and conditions of an Option granted to such
Participant.
(b) "Award" shall mean an Option
granted to a Participant.
(c) "Beneficiary" shall mean the
person or persons, who may be designated by a
Participant from time to time in writing to
the Committee, and who shall receive, if the
Participant dies, any Option exercise rights.
(d) "Board" shall mean the Board
of Directors of the Corporation.
(e) "Code" shall mean the
Internal Revenue Code of 1986, as it may be
amended from time to time, and the rules and
regulations promulgated thereunder.
<PAGE>
(f) "Committee" shall mean the
Compensation Committee, or such other
Committee of the Board, which shall be
designated by the Board to administer the
Plan. The Committee shall be composed of two
or more persons as from time to time are
appointed to serve by the Board. Each member
of the Committee, while serving as such,
shall also be a member of the Board and shall
be a disinterested person within the meaning
of the Rule 16b-3 of the Securities Exchange
Act of 1934.
(g) "Common Stock" shall mean
the Common Stock of the Corporation having a
par value of $1.00 per share.
(h) "Corporation" shall mean
Pacific Gateway Properties, Inc.
(i) "Employee" shall mean any
person who is employed on full-time or part-
time basis by the Corporation or any
Subsidiary Corporation and who is
compensated, at least in part, by the
Corporation.
(j) "Fair Market Value" shall
mean, with respect to any given day, the mean
average of the highest and lowest reported
sales prices on the principal national stock
exchange on which the Common Stock is traded,
or if such exchange was closed on such day
or, if it was open but the Common Stock was
not traded on such day, then on the next
preceding day that the Common Stock was
traded on such exchange, as reported by such
responsible reporting service as the
Committee may select.
(k) "Incentive Stock Option"
shall mean an Option which intended to meet
and comply with the terms and conditions for
an "incentive stock option" as set forth in
Section 422 of the Code.
(l) "Option" shall mean a right,
including an Incentive Stock Option, to
purchase a stated number of shares of Common
Stock subject to such terms and conditions as
are set forth in the Agreement and the Plan.
(m) "Participant" shall mean an
Employee, including an Employee who may also
be a member of the Board, who is granted an
Award under the Plan.
(n) "Plan" shall mean the
Pacific Gateway Properties, Inc. Incentive
Stock Option Plan as set forth herein and as
amended from time to time.
(o) "Subsidiary Corporation"
shall mean any corporation which is a
subsidiary corporation of the Corporation as
defined in Section 424(f) of the Code.
<PAGE>
3. ADMINISTRATION
(a) The Committee shall
administer the Plan and, accordingly, it
shall have full power to grant Awards,
construe and interpret the Plan, establish
rules and regulations and perform all other
acts it believes reasonable and proper,
including the authority to delegate
responsibilities to others to assist in
administering the Plan.
(b) The determination of those
eligible to receive Awards, and the amount,
type and timing of each Award shall rest in
the sole discretion of the Committee, subject
to the provisions of the Plan.
(c) The Committee may cancel any
Awards awarded under the Plan if a
Participant conducts oneself in a manner
which the Committee determines to be inimical
to the best interests of the Corporation.
Any decision made, or action taken, by the
Committee, arising out of, or in connection
with, the interpretation and administration
of the Plan shall be final and conclusive.
4. COMMON STOCK
The total number of shares of Common
Stock available for grants of Options under
the Plan shall be 250,000, subject to
adjustment in accordance with Section 7 of
the Plan, which shares may be either
authorized by unissued or reacquired shares
of Common Stock. If an Option or portion
thereof shall expire or terminate for any
reason without having been exercised in full,
the unpurchased shares covered by such Option
shall again be available for grants.
5. ELIGIBILITY FOR PARTICIPATION
(a) Consistent with Plan
objectives, eligibility to become a
Participant in the Plan and receive Awards
shall be limited to key Employees.
(b) No Incentive Stock Option
shall be granted to an Employee ineligible at
the time to receive such an Option because of
owning more than 10% of the Common Stock in
accordance with the provisions of Section
422(b) (6) of the Code, unless the Option
meets the requirements of Section 422(c) (5).
<PAGE>
6. OPTIONS - TERMS AND CONDITIONS
All Options granted under the Plan shall
be evidenced by Agreements which shall be
subject to applicable provisions of the Plan,
and such other provisions not inconsistent
with the qualification requirements for the
Incentive Stock Option as the Committee may
adopt, including the following provisions:
(a) Price: The option
price per share shall not be less than 100%
of the Fair Market Value of a share of Common
Stock on the date of grant.
(b) Period: No Option
shall be exercisable after the expiration of
ten years from date of grant.
(c) Time of Exercise: The
Committee may establish installment exercise
terms for an Option such that the Option
becomes fully exercisable in a series of
cumulating portions. The Committee may also
accelerate the time of exercise of any
Option.
(d) Exercise: An Option,
or portion thereof, shall be exercised by
delivery of a written notice of exercise to
the Corporation and payment of the full price
of the shares being exercised. Payment pay
be made: (i) in United States dollars in
cash or by check, bank draft or money order
payable to the order of the Corporation, or
(ii) at the discretion of the Committee,
through the delivery of shares of Common
Stock with a value equal to the Option price,
or (iii) by a combination of both (i) or (ii)
above. The Committee shall determine
acceptable methods for tendering Common Stock
as payment upon exercise of an Option and may
impose such limitations and prohibitions on
the use of Common Stock to exercise an Option
as it deems appropriate. A participant shall
not have any of the rights or privileges of a
holder of Common Stock until such time as
shares of Common Stock are issued or
transferred to the Participant pursuant to
exercising said Option.
(e) Termination of
Employment: In the event a Participant shall
cease to be employed by the corporation or
any Subsidiary Corporation while he is
holding one or more Options, each Option
shall expire at the earlier of the expiration
of the Option's term or the following:
(i) one year after
termination due to disability within the
meaning of Section 22(e) (3) of
the Code as determined
by the Committee;
<PAGE>
(ii) one year after the
Participant's death; and
(iii) coincident with the date
of termination if due to any other
reasons, except as and to the extent that the
Committee may determine otherwise.
In the event of termination due to
normal retirement, or earlier retirement with
Committee consent under a formal plan or
policy of the Corporation while any portion
of an Option remains exercisable, such Option
shall expire at the earlier of the expiration
of the Option's term or three years after
such termination; provided, however, that
exercise of the Option after the periods set
forth in the preceding sentence may
disqualify such Option from treatment as an
Incentive Stock Option.
In the event of death following
termination of employment while any portion
of the Option remains exercisable, the
Committee in its discretion may provide for
an extension of the exercise period for up to
one year after the Participant's death but
not beyond the expiration of the Options'
terms.
(f) Effect of Leaves of Absence: For the purposes of this
Section, it shall not be considered a termination of employment when
a Participant is placed by the Corporation or any Subsidiary
Corporation on military or sick leave or such other type of leave of
absence which is considered as continuing intact the employment
relationship of the Participant. In case of such leave of absence
the employment relationship shall be continued until the later of
the date when such leave equals 90 days or the date when the
Optionee's right to reemployment with the Corporation or such
subsidiary Corporation shall no longer be guaranteed either by
statute or contract.
(g) $100,000 Per Year Limitation: The aggregate Fair Market Value
(determined at the time of grant) of the shares of Common Stock
with respect to which Incentive Stock Options (whether granted
hereunder or pursuant to any other plan of the Corporation or a
Subsidiary Corporation) are first exercisable by a Participant
during any calendar year shall not exceed $100,000 (or such
limit as may be in effect from time to time under the Code).
<PAGE>
(h) Notice of Certain
Dispositions: Any Participant who disposes of shares
of Common Stock acquired on the exercise of an Incentive Stock
Option by sale or exchange either (i) within two years after the
date of the grant of the Option under which the stock was acquired
or (ii) within one year after the acquisition of such shares, shall
notify the Corporation of such disposition and of the amount
realized upon such disposition promptly after the disposition.
(i) Restrictions on Transferability: Any option shall not be
transferable by the individual to whom it is granted otherwise
than by will or the laws of descent and distribution and
is exercisable during this lifetime only by him.
7. ADJUSTMENTS
In the event of a stock dividend, stock
split or other subdivision, consolidation or
change in the shares of Common Stock, the
number of shares of Common Stock available
for Options and subject to outstanding
Options shall be adjusted proportionately.
Likewise, the option price per share of
outstanding Options shall be appropriately
adjusted.
8. MERGER, CONSOLIDATION OR TENDER
OFFER
(a) If the corporation shall be a
party to any merger, consolidation or
reorganization, or shall sell substantially
all its assets, each outstanding Option shall
pertain and apply to the securities and/or
property which a holder of the number of
shares of Common Stock subject to the Option
would be entitled to receive pursuant to such
merger, consolidation or reorganization or
sale of assets.
(b) In the event that:
(i) any person other that the Corporation shall acquire more
than 20% of the Common Stock through a tender offer, exchange
offer or otherwise; or
(ii) a change in the"control" of the Corporation occurs, as such
term is defined in Rule 405 under the Securities Act
of 1934; or
(iii) there shall be a sale of all or substantially all of the
assets of the Corporation; any then outstanding
Option which has been held for six months or longer by a
participant, who is deemed by the Committee to be a
statutory officer or insider for purposes of Section 16 of the
Securities Exchange Act of 1934 shall be entitled to receive,
subject to any action by the Committee revoking such an
entitlement as provided for below,in lieu of exercise of such
Option, a cash payment in an amount equal to the difference
between the aggregate exercise price of such Option and,
(A) in the event of an offer or
similar event, the final offer price
per share paid for Common stock, or
such lower price as the Committee
may determine to conform an Option
to preserve its Incentive Stock
Option status, times the number of
shares of Common Stock covered by
the Option, or (B) in the case of
any change of control or sale of
assets covered by (iii) above, the
aggregate fair market value of the
shares covered by the Option, as
determined by the Committee at such
time.
Any payment which the Corporation is
required to make pursuant to the above, shall
be made within thirty business days following
the event which results in the Participant's
right to such payment. In the event of an
offer in which fewer than all the shares
which are validly tendered in compliance with
such offer are purchased or exchanged, then
only that portion of the shares covered by an
Option as results from multiplying such
shares by a fraction, the numerator of which
is the number of shares of Common Stock
acquired pursuant to the offer and the
denominator of which is the number of shares
of Common Stock tendered in compliance with
such offer, shall be used to determine the
payment thereupon. To the extent that all or
any portion of an Option shall be affected by
this provision all or such portion of the
Option shall be terminated.
Notwithstanding the above, the Committee
may, by unanimous vote and resolution,
unilaterally revoke the benefits of the above
provision; provided, however, that such vote
is taken no later than ten business days
following public announcement of the intent
of an offer or sale or the change of control,
whichever occurs earlier.
9. AMENDMENT AND TERMINATION OF PLAN
(a) The Board, without further
approval of the stockholders, may at any
time, and from time to time, suspend or
terminate the Plan in whole or in part or
amend it from time to time in such respects
as the Board may deem appropriate and in the
best interests of the Corporation; provided,
however, no such amendment shall be made,
without approval of the stockholders, which
would:
<PAGE>
(i) materially modify the eligibility requirements for
Participants;
(ii) increase the total number of shares of Common Stock which
may be issued pursuant to Options, except as
is provided for in accordance with Section 7 of the Plan:
(iii) decrease the minimum Option price per share;
(iv) extend the period for granting Options; or
(v) materially increase benefits accruing to Participants.
(b) No amendment, suspension or
termination of this Plan shall, without the
Participant's consent, alter or impair any of
the rights or obligations under any Award
theretofore granted to her or him under the
Plan.
(c) The Board may amend the Plan,
subject to the limitations cited above, in
such manner as it deems necessary to permit
the granting of Options meeting the
requirements of future amendments or issued
regulations, if any, to the Code.
10. GOVERNMENT AND OTHER REGULATIONS
The obligation of the corporation to
issue, or transfer and deliver shares for
Options exercised under the Plan shall be
subject to all applicable laws, regulations,
rules and orders which shall then be in
effect.
11. UNFUNDED PLAN
The Plan, insofar as its provides for
payments shall be unfunded and the
Corporation shall not be required to
segregate any assets which may at any time be
subject to Awards under the Plan. Any
liability of the Corporation to any person
with respect to any award under this Plan
shall be based solely upon any contractual
obligations which may be created by
Agreements reflecting grants under this Plan.
<PAGE>
12. MISCELLANEOUS PROVISIONS
(a) Right to Continued Employment:
No person shall have any claim or right to be
granted an Award under the Plan, and the
grant of an Award under the Plan shall not be
construed as giving any Participant the right
to be retained in the employ of the
Corporation or any Subsidiary Corporation and
the Corporation expressly reserves the right
at any time to dismiss a Participant with or
without cause, free from any liability, or
any claim under the Plan, except as provided
herein or in an Agreement.
(b) Non-Transferability: Except by
will or the laws of descent and distribution,
no right or interest of any Participant in
the Plan shall be assignable or transferable
and no right or interest of any Participant
shall be liable for, or subject to, any lien,
obligation or liability of such Participant.
(c) Withholding Taxes: The
Corporation may require a payment to cover
applicable withholding for income and
employment taxes in the event of certain
exercises of Options or dispositions of
Common Stock acquired pursuant to an Option.
In the event such tax withholding shall be
required, a Participant may, subject to
satisfaction of the requirements of Rule 16b-
3 of the Securities Exchange Act of 1934,
make a written election to have shares of
Common Stock withheld by the Corporation from
the shares otherwise to be received. The
number of shares so withheld shall have an
aggregate Fair Market Value on the date of
exercise sufficient to satisfy the applicable
withholding taxes. The acceptance of any
such election made by a Participant shall be
at the sole discretion of the Committee.
(d) Plan Expenses: Any expenses of
administering this Plan shall be borne by the
Corporation.
(e) Legal Considerations: No
person, including a Participant, or his or
her Beneficiary, shall have any claim or
right to receipt of an Award, if, in the
opinion of counsel for the Corporation, such
payment does not comply with legal
requirements, or is opposed to governmental
public policy.
(f) Other Plans: Nothing contained
herein shall prevent the Corporation from
establishing other incentive and benefit
plans in which Participants in the Plan may
also participate. However, any amounts paid
to a Participant with respect to Awards under
the Plan shall not affect the level of
benefits provided to or received by any
Participant (or his or her estate or
Beneficiary) as part of any other employee
benefit plan of the Corporation.
<PAGE>
(g) No Warranty of Tax Effect:
Except as may be contained in any Agreement,
no opinion shall be deemed to be expressed or
warranties made as to the effect for federal,
state or local tax purposes of any Awards.
(h) Construction of Plan: The place
of administration of the Plan shall be in the
Commonwealth of Massachusetts. The validity,
construction, interpretation, administration
and effect of the Plan and of its rules and
regulations, and rights relating to the Plan,
shall be determined solely in accordance with
the laws of the State of New York.
13. STOCKHOLDER APPROVAL AND
EFFECTIVE DATES
Upon approval by the stockholders of the
Corporation, this Plan shall become
unconditionally effective as of March 7,
1994. No Option shall be granted after March
6, 2004; provided, however, that the Plan and
all outstanding Awards granted under the Plan
prior to such date shall remain in effect
until the applicable Options have expired.
If the stockholders shall not approve the
Plan, the thereto shall be null and void or
shall, if necessary, be deemed to have been
fully rescinded.
