<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
-----------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-9663
-----------
MID-AMERICA REALTY INVESTMENTS, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 47-0700007
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
11506 NICHOLAS STREET, SUITE 100, OMAHA, NE 68154
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (402) 496-3300
-------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
---
At April 30, 1995, the registrant had 8,279,892 shares of common stock
outstanding.
1
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MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
FORM 10-Q
INDEX
Page
----
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
at March 31, 1995 and December 31, 1994. 3
Consolidated Statements of Operations
for the Three Months Ended March 31,
1995 and 1994. 4
Consolidated Statements of Cash Flows
for the Three Months Ended March 31,
1995 and 1994. 5
Notes to Consolidated Financial Statements. 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. 9
Part II. Other Information 13
Signature Page 14
2
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PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(COLUMNAR DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C>
Cash $ ---- $ ----
Accounts receivable, net of allowance
of $197,000 and $161,000 1,359 1,345
Notes receivable, net of allowance of
$160,000 846 866
Property:
Land and land improvements 36,819 36,812
Buildings 109,502 109,356
Equipment and fixtures 559 559
Construction-in-progress 730 334
--------- --------
147,610 147,061
Less: Accumulated depreciation (20,891) (19,800)
--------- --------
126,719 127,261
Interest in Twin Oaks Centre, net of
allowances of $4,886,000 and $4,900,000 3,008 2,953
Investment in Mid-America Bethal
Limited Partnership 16,209 16,367
Intangible assets, less accumulated
amortization of $1,848,000 and $2,110,000 2,483 2,463
Other assets 441 187
--------- ---------
$ 151,065 $ 151,442
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $ 63,944 $ 63,486
Accrued liabilities 1,241 1,143
--------- ---------
Total Liabilities 65,185 64,629
Commitments and Contingencies
Shareholders' Equity:
Common stock, $.01 par value; authorized
25,000,000 shares; issued and
outstanding 8,279,892 shares 83 83
Capital in excess of par value 119,677 119,677
Distributions in excess of net income (33,880) (32,947)
--------- ---------
Total Shareholders' Equity 85,880 86,813
-------- ---------
$151,065 $151,442
-------- ---------
-------- ---------
</TABLE>
3
<PAGE>
MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(COLUMNAR DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------
1995 1994
---------- ----------
<S> <C> <C>
REVENUES:
Rental income $ 4,130 $ 3,875
Reimbursement income 1,247 1,128
Property management income 53 68
Other income 163 213
---------- ----------
Total Revenues 5,593 5,284
EXPENSES:
Real estate taxes 703 691
Other property costs 858 939
Interest expense 1,449 1,311
Administrative expenses 474 406
Property management expenses 237 276
Depreciation and amortization 1,225 1,316
---------- ----------
Total Expenses 4,946 4,939
---------- ----------
Income Before Equity in
Earnings of Mid-America Bethal
Limited Partnership 647 345
Equity in Earnings of Mid-America Bethal
Limited Partnership 242 230
---------- ----------
NET INCOME $ 889 $ 575
---------- ----------
---------- ----------
Weighted Average Shares
Outstanding During Period 8,279,892 8,280,212
---------- ----------
---------- ----------
NET INCOME PER SHARE $ .11 $ .07
---------- ----------
---------- ----------
</TABLE>
4
<PAGE>
MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Columnar Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------
1995 1994
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 889 $ 575
Adjustments:
Depreciation and amortization 1,225 1,316
Investment in Mid-America Bethal
Limited Partnership:
Equity in earnings (242) (230)
Distributions received 400 ----
Increase in related liabilities 97 231
Increase in related assets (267) (141)
Other ---- 33
---------- ----------
Net Cash Flows From Operating Activities 2,102 1,784
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal repayments of notes receivable 20 13
Interest in Twin Oaks Centre (54) (115)
Payments from Valley Park Centre ---- 101
Additions to property:
Purchase of new properties ---- (12,985)
Renovation and expansion projects (480) (403)
Tenant improvements (101) ----
Payments from Yield Maintenance Agreement 31 ----
Cash paid for leasing fees (29) (56)
Cash paid for loan fees and other assets (126) ----
---------- ---------
Net Cash Flows From Investing Activities (739) (13,445)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (payments) on short-term debt, net (7,395) 13,516
Proceeds of mortgages payable 8,000 ----
Scheduled principal payments on mortgages (146) (121)
Dividends paid (1,822) (1,822)
---------- ----------
Net Cash Flows From Financing Activities (1,363) 11,573
---------- ----------
NET CHANGE IN CASH ---- (88)
CASH, BEGINNING OF PERIOD ---- 182
---------- ----------
CASH, END OF PERIOD $ ---- $ 94
---------- ----------
---------- ----------
</TABLE>
5
<PAGE>
MID-AMERICA REALTY INVESTMENTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1995
(UNAUDITED)
(COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
A. BASIS OF CONSOLIDATION AND PRESENTATION:
The unaudited consolidated financial statements are prepared on an accrual
basis and include the accounts of Mid-America Realty Investments, Inc. (the
"Company") and its wholly-owned subsidiary, Mid- America Centers Corp. The
unaudited consolidated financial statements should be read in conjunction
with the audited consolidated financial statements included in the
Company's 1994 Annual Report on Form 10-K for the year ended December 31,
1994.
The information furnished herein reflects all adjustments, which consist of
normal recurring accruals, which are, in the opinion of management,
necessary to fairly present the financial results for the interim periods
presented. The results for the three months ended March 31, 1995 and 1994
are not necessarily indicative of the operating results for the full year.
All material intercompany transactions and profits have been eliminated in
consolidation. Certain reclassifications have been made to the 1994
financial statements to conform to those classifications used in 1995.
Net income per share was determined by dividing net income for the periods
presented by the weighted average number of shares of common stock
outstanding for the period.
B. INVESTMENT IN MID-AMERICA BETHAL:
Mid-America Bethal Limited Partnership ("Mid-America Bethal") was formed on
June 1, 1989 by the Company and a European investor. The Company has a 50%
interest in Mid-America Bethal and is the managing general partner. The
European investor has a 50% interest and is the limited partner.
Summarized financial information on Mid-America Bethal is as follows:
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C>
BALANCE SHEETS:
Assets:
Cash $ 813 $ 829
Property, net of depreciation of
$5,462,000 and $5,188,000 30,644 30,918
Other Assets 568 561
-------- --------
$ 32,025 $ 32,308
-------- --------
-------- --------
Liabilities and Partners' Capital:
Accounts payable and other
liabilities $ 67 $ 33
Partners' capital 31,958 32,275
-------- --------
$ 32,025 $ 32,308
-------- --------
-------- --------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1995 1994
-------- --------
<S> <C> <C>
STATEMENTS OF OPERATIONS:
Total Revenues $ 1,096 $ 1,062
-------- --------
-------- -------
Net Income $ 484 $ 460
-------- --------
-------- --------
EQUITY IN EARNINGS OF MID-AMERICA
BETHAL RECORDED BY THE COMPANY $ 242 $ 230
-------- --------
-------- --------
</TABLE>
C. MORTGAGES AND NOTES PAYABLE:
Mortgages and notes payable are comprised of the following:
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C>
Mortgages Payable $ 54,373 $ 46,516
Working Capital Line of Credit
($5,000,000 available at prime plus
1/2% due July 1995) 299 138
Acquisitions Line of Credit
($15,000,000 available at prime plus
1/2% due July 1995) ---- 4,056
Acquisitions Line of Credit
($15,000,000 available at prime plus
1/2% due July 1995) 9,250 12,750
Other 22 26
------- -------
$63,944 $63,486
------- -------
------- -------
</TABLE>
During the three months ended March 31, 1995, the Company finalized an
$8,000,000, 9.2% fixed rate mortgage loan on the Southport Centre. The net
proceeds were primarily used to repay adjustable rate acquisition line
debt. The Company also secured a commitment for $6,500,000 of 9.08% fixed
rate mortgage financing on the Edgewood Shopping Centers which currently
secure a $5,000,000 adjustable rate mortgage loan. Both the $8,000,000 loan
and the prospective $6,500,000 loan have seven-year terms requiring
interest only payments for the first five years, with subsequent payments
based upon a 25-year amortization.
D. COMMITMENTS AND CONTINGENCIES:
In 1992, the Company entered into a Yield Maintenance Agreement (as
amended, the "YMA") with parties formerly related to the Company. Under
the YMA, the formerly related parties guarantee a 10% return from June 1,
1992 to December 31, 1996, calculated on a quarterly basis, to the Company
based upon the amount of the Company's "Investment Base" (as defined in the
YMA) for five specific properties (listed below) purchased from the
formerly related parties. If the cash flow (as defined in the YMA) of the
properties after debt service on a quarterly basis does not exceed the
required 10% return, the difference (defined as the "Arrearage" in the YMA)
is owed to the Company by the formerly related parties. The formerly
related parties have the option of paying the Arrearage in cash every
quarter or having it added to the "Investment Base."
Under the YMA, the market value of these properties will be determined as
of December 31, 1996. The determined market value will be based on a 10.25%
capitalization rate applied to "net operating income" (as defined in the
YMA) for the year ended December 31, 1996. If the determined market value
of the properties is different than the Company's "adjusted Acquisition
Cost" (as defined in the YMA), the difference will be paid by or owed to
the Company, subject to certain limits as defined in the YMA.
The obligations of the formerly related parties under the YMA relative to
Lakewood Mall, Kimberly West and Twin Oaks Centre are limited to $2,300,000
and are secured by a promissory note in the principal
7
<PAGE>
amount of $2,300,000. This promissory note is personally guaranteed by the
formerly related parties and is collateralized by specific tangible
collateral.
The obligations of the formerly related parties under the YMA relative to
Moorland Square and Fairacres Shopping Center are limited to $500,000 and
are secured by a promissory note in the principal amount of $500,000. This
promissory note is personally guaranteed by the formerly related parties.
Under the YMA, the Company has an assignment of a 50% interest in Kearney
Mall Associates, Ltd., Limited Partnership ("Kearney Mall Associates"),
whose limited partners were formerly related to the Company, which owns
Hilltop Mall in Kearney, Nebraska. From the operations of Hilltop Mall for
the three months ended March 31, 1995, the Company received $31,000, which
was applied to reduce the book value of the related properties. Cumulative
amounts received under this assignment totaled $232,000 through March 31,
1995 and reduce the guaranteed limits described above.
At March 31, 1995, accumulated YMA arrearages (which are not reflected in
the consolidated financial statements) exceeded the guaranteed limits.
E. SUBSEQUENT EVENT
On April 19, 1995, the Company entered into a settlement agreement with the
Twin Oaks Centre Limited Partnership (the "Partnership"). The Partnership
was in default on a mortgage loan to the Company. Pursuant to the
settlement, the Company took ownership of the underlying collateral which
consisted of the Twin Oaks Centre and tax increment financing bonds payable
from incremental sales and real estate taxes generated by the shopping
center and adjacent properties. Certain limited partners had initiated
litigation against the Company which was dismissed as a part of the
settlement.
The Twin Oaks Centre is a 95,000 square foot neighborhood shopping center
in Silvis, Illinois. At March 31, 1995, the Twin Oaks Centre was 86% leased
and 73% occupied. Walgreens vacated in the second quarter of 1994 but
continues to pay annual rent of $119,000. For the three months ended March
31, 1995, Twin Oaks Centre's total revenues and expenses (excluding
depreciation and interest on related debt) were approximately $154,000 and
$35,000, respectively.
As a result of the acquisition of the Twin Oaks Centre, and the assumption
of a $3,000,000 first mortgage, the Company's total assets and liabilities
will each increase by approximately $3,000,000 during the second quarter of
1995.
A portion of previously recorded book losses associated with the Company's
investment in Twin Oaks Centre have not been utilized for income tax
purposes. As a result of the settlement, these losses are expected to
effect the taxation of dividends paid during 1995 by increasing the return
of capital portion and decreasing the ordinary income portion.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
- -------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES:
The Company's primary source of funds are (i) cash generated from operations
which includes distributions from Mid-America Bethal, (ii) borrowings, (iii)
sales of real estate, and (iv) principal repayments on notes receivable.
Management anticipates that these sources will provide the necessary funds for
its operating expenses, interest expense on outstanding indebtedness, recurring
capital expenditures and dividends to shareholders in accordance with REIT
requirements, during the next twelve months. Management also believes that it
has capital, and the access to capital resources, sufficient to expand and
develop its business in accordance with its strategy for growth. In general, the
Company intends to acquire and finance additional real estate properties and
investments, to the extent possible, in such a manner as to maintain the ability
to make regular distributions to shareholders. However, the future issuance of
debt or equity securities by the Company or the acquisition of new properties or
investments could affect the yield to shareholders.
At March 31, 1995, the Company had invested approximately 97% of its assets in
enclosed malls and neighborhood shopping centers, including the Company's
investment in Mid-America Bethal and interest in Twin Oaks Centre. The remainder
of the Company's assets primarily consisted of accounts and notes receivable.
At March 31, 1995, the Company had a debt-to-equity ratio of .74 to 1, compared
to .73 to 1 at December 31, 1994, based upon the ratio of mortgages and notes
payable to total shareholders' equity. The Company's ratio of debt to total
market capitalization was 52% at March 31, 1995 and 51% at December 31, 1994.
During the three months ended March 31, 1995, the Company finalized an
$8,000,000, 9.2% fixed rate mortgage loan on the Southport Centre. The net
proceeds were primarily used to repay adjustable rate acquisition line debt. The
Company also secured a commitment for $6,500,000 of 9.08% fixed rate mortgage
financing on the Edgewood Shopping Centers which currently secure a $5,000,000
adjustable rate mortgage loan. Both the $8,000,000 loan and the prospective
$6,500,000 loan have seven-year terms requiring interest only payments for the
first five years, with subsequent payments based upon a 25-year amortization.
After giving effect to the comittment described in the preceeding paragraph,
mortgages and revolving credit agreements of $23,286,000 will mature during
1995. Mortgages collateralized by the Cornhusker Plaza ($3,703,000 at 9.75%),
Lakewood Mall ($7,732,000 at 8.50%), and Fairacres Shopping Center ($3,802,000
at 10.0%) are expected to be extended for two to seven year periods by the
existing lenders. Revolving credit agreements which mature during 1995 are
expected to be extended for one year at similar terms.
RESULTS OF OPERATIONS:
Net income for the three months ended March 31, 1995 was $889,000 or $.11 per
share compared to $575,000 or $.07 per share for the three months ended March
31, 1994, a dollar increase of $314,000 or 55%.
The increase in net income for the three months ended March 31, 1995 compared to
the three months ended March 31, 1994 was primarily due to the following: an
increase in total revenues of $309,000 and an increase of $12,000 in the
Company's equity in earnings of Mid-America Bethal Limited Partnership. These
improvements were offset by increases of $7,000 in total expenses.
9
<PAGE>
RENTAL INCOME:
Rental income for the three months ended March 31, 1995 was $4,130,000 compared
to $3,875,000 for the three months ended March 31, 1994, an increase of $255,000
or 7%. The increase was due primarily to an increase of $142,000 in percentage
rents collected. The remainder of the increase reflects the effect of new leases
and rent increases.
REIMBURSEMENT INCOME:
Reimbursement income for the three months ended March 31, 1995 was $1,247,000
compared to $1,128,000 for the three months ended March 31,1994, an increase of
$119,000 or 11%. The increase was due primarily to one-time tenant charges of
approximately $75,000 related to lease audits. The remainder of the increase
reflects the effect of new leases.
PROPERTY MANAGEMENT INCOME:
Property management income, which primarily consists of lease and property
management fees from properties managed for Mid-America Bethal, was $53,000 for
the three months ended March 31, 1995 compared to $68,000 for the three months
ended March 31, 1994, a decrease of $15,000 or 22%. The decrease is attributable
to fewer new leases at properties owned by Mid-America Bethal during the three
months ended March 31, 1995 compared to the three months ended March 31, 1994.
OTHER INCOME:
Other income for the three months ended March 31, 1995 was $163,000 compared to
$213,000 for the three months ended March 31, 1994, a decrease of $50,000 or
23%. The decrease is primarily attributable to a decrease in interest income
related to the Company's interest in Twin Oaks Centre and notes receivable.
OTHER PROPERTY COSTS:
Other property costs for the three months ended March, 31, 1995 were $858,000
compared to $939,000 for the three months ended March 31, 1994, a decrease of
$81,000 or 9%. The decrease is primarily attributable to a reduction in weather
related costs (snow removal, utilities, etc.), and a reduction in property
personnel during the three months ended March 31, 1995 compared to the three
months ended March 31, 1994.
INTEREST EXPENSE:
Interest expense for the three months ended March 31, 1995 was $1,449,000
compared to $1,311,000 for the three months ended March 31, 1994, an increase of
$138,000 or 11%. The Company's average total debt was $63,715,000 during the
three months ended March 31, 1995 compared to $64,940,000 during the three
months ended March 31, 1994. This positive change in average total debt was
offset by an increase in the Company's weighted average cost of funds to 9.2%
during the first three months of 1995 compared to 8.1% during the same period of
1994.
ADMINISTRATIVE EXPENSES:
Administrative expenses for the three months ended March 31, 1995 were $474,000
compared to $406,000 for the three months ended March 31, 1994, an increase of
$68,000 or 17%. The increase relates primarily to increased professional fees
and general compensation increases.
10
<PAGE>
PROPERTY MANAGEMENT EXPENSES:
Property management expenses for the three months ended March 31, 1995 were
$237,000 compared to $276,000 for the three months ended March 31, 1994, a
decrease of $39,000 or 14%. The decrease is primarily attributable to a
reduction in property management administrative personnel.
FUNDS FROM OPERATIONS:
Management considers Funds from Operations to be the most appropriate measure of
the performance of an equity real estate investment trust ("REIT"). The Company
defines Funds From Operations as net income before gains/losses from property
sales adjusted for non-cash items in the income statement, such as depreciation
and amortization. Funds from Operations is a supplemental measure of performance
that does not replace net income (loss) as a measure of performance or net cash
provided by operating activities as a measure of liquidity.
Funds From Operations were $2,232,000 or $.27 per share for the three months
ended March 31, 1995 compared to $2,190,000 or $.26 per share for the three
months ended March 31, 1994, an increase of $42,000 or 2%. The increase is
primarily attributable to an increase in net income which was partially offset
by a reduction in the equity in Funds From Operations from Valley Park Centre.
The Company had a loan with Valley Park Limited Partnership which was accounted
for as a real estate investment and was paid in full in the second quarter of
1994.
Funds From Operations is computed as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1995 1994
---------------------
(In Thousands Except Per Share Data)
<S> <C> <C>
Net Income $ 889 $ 575
Accruals for "straight-line" rents (28) ----
Depreciation and Amortization (1) 1,225 1,318
Investment in Mid-America Bethal:
Equity in Earnings (242) (230)
Equity in Funds From Operations (2) 388 373
Investment in Valley Park Centre:
Equity in Loss ---- 53
Equity in Funds from Operations ---- 101
------ -------
Funds From Operations $2,232 $2,190
------ ------
------ ------
Funds From Operations Per Share $ .27 $ .26
------ ------
------ ------
<FN>
- ----------------------
(1) Depreciation and Amortization for the three months ended March 31, 1995
consisted of real property depreciation of $1,073,000, other depreciation
of $18,000, lease fee amortization of $74,000, loan fee amortization of
$56,000 and intangible amortization of $4,000. Repairs and maintenance
expensed as "Property Costs" during the three months ended March 31, 1995
totaled $84,000.
(2) Equity in Funds From Operations of Mid-America Bethal for the three months
ended March 31, 1995 included real property depreciation of $271,000, other
depreciation of $3,000 and lease fee amortization of $12,000.
</TABLE>
11
<PAGE>
The Funds From Operations reported above do not reflect recommendations
contained in the Funds From Operations White Paper (the "FFO White Paper")
recently adopted by the National Association of Real Estate Investment Trusts to
standardize financial reporting by real estate investment trusts. Had the
Company adopted the recommendations prescribed in the FFO White Paper (which is
suggested for reporting periods beginning after January 1, 1996), Funds From
Operations for the three months ended March 31, 1995 and 1994 would have been
approximately $.01 per share lower than reported.
Tenant and Leasing Information:
The following tables set forth information concerning each of the properties
that the Company owns directly or has an equity interest in through Mid-America
Bethal Limited Partnership:
<TABLE>
<CAPTION>
(Square Footage in Thousands)
Gross Leaseable Area Leased Space(1) Leased %
---------------------------- ---------------------------- ----------------------------
3/31/95 12/31/94 3/31/94 3/31/95 12/31/94 3/31/94 3/31/95 12/31/94 3/31/94
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-America Realty
Investments, Inc.:
Neighborhood shopping centers 1,705 1,696 1,683 1,645 1,641 1,614 97% 97% 96%
Enclosed malls 863 863 847 796 796 758 97% 92% 89%
----- ----- ----- ----- ----- ----- --- --- ---
2,568 2,559 2,530 2,441 2,437 2,372 95% 95% 94%
Mid-America Bethal L.P. (2) 538 538 538 497 495 480 92% 92% 89%
----- ----- ----- ----- ----- ----- --- --- ---
3,106 3,097 3,068 2,938 2,932 2,852 95% 95% 93%
----- ----- ----- ----- ----- ----- --- --- ---
----- ----- ----- ----- ----- ----- --- --- ---
<FN>
- --------------------------------
(1) Leased space represents the percentage of gross leasable area which is
leased to third-party tenants. Average leased space at Company-owned
properties was 95% during the three months ended March 31, 1995 compared to
93% during the three months ended March 31, 1994.
(2) The Company owns a 50% partnership interest in Mid-America Bethal Limited
Partnership. All information presented is for the entire partnership.
</TABLE>
Fitchburg Ridge Shopping Center, which was acquired in August 1994, has 50,000
square feet of leasable area and is 100% leased at March 31, 1995. Village
Square, which was sold in December 1994, had 71,000 square feet of leasable area
of which 86% was leased.
12
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders of the Company was held on
April 26, 1995. The shareholders elected five directors, approved
the Company's 1995 Stock Plan, and ratified the appointment of
the independent accountants for 1995. The voting on each proposal
is set forth below:
1. ELECTION OF DIRECTORS:
<TABLE>
<CAPTION>
FOR WITHHELD
--------- --------
<S> <C> <C>
Jerome L. Heinrichs 7,210,938 296,406
Daniel A. Burkhardt 7,210,471 296,873
E. Stanley Kroenke 7,211,192 296,152
Michael F. Lawler 7,207,058 299,286
John L. Maginn 7,211,232 296,112
</TABLE>
2. APPROVAL OF THE COMPANY'S 1995 STOCK PLAN:
FOR 6,803,941
AGAINST 592,811
WITHHELD 110,592
3. RATIFICATION OF INDEPENDENT ACCOUNTANTS:
FOR 7,416,853
AGAINST 42,624
WITHHELD 47,867
Item 5. Exhibits and Reports on Form 8-K
A. Exhibits
10.1 Settlement Agreement dated April 19, 1995 among, inter alia,
Twin Oaks Centre Limited Partnership and Mid-America Realty
Investments, Inc.
10.2 First Amendment to Yield Maintenance Agreement dated April 19,
1995
10.3 Mid-America Realty 1995 Stock Plan
27 Financial Data Schedule
B. Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
ended March 31, 1995.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Mid-America Realty Investments, Inc.
/s/ Jerome L. Heinrichs Date: May 8 , 1995
- ------------------------------ ------------
Jerome L. Heinrichs,
Chief Executive Officer
/s/ Dennis G. Gethmann Date: May 8 , 1995
- ------------------------------ ------------
Dennis G. Gethmann
President and Principal Financial Officer
14
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
<C> <S> <C>
10.1 Settlement Agreement dated April 19, 1995 among,
inter alia, Twin Oaks Centre Limited Partnership
and Mid-America Realty Investments, Inc . . . . . . . . . . 16
10.2 First Amendment to Yield Maintenance Agreement
dated April 19, 1995 . . . . . . . . . . . . . . . . . . . 26
10.3 Mid-America Realty 1995 Stock Plan. . . . . . . . . . . . . 34
27 Financial Data Schedule . . . . . . . . . . . . . . . . . . 43
</TABLE>
15
<PAGE>
SETTLEMENT AGREEMENT
This Settlement Agreement, made and entered into as of the 19th day of
April, 1995, by and between TWIN OAKS CENTRE LIMITED PARTNERSHIP, a Nebraska
limited partnership (the "Partnership"); TWIN OAKS CENTRE, INC., a Nebraska
corporation and general partner of the Partnership (the "General Partner");
DONALD F. DAY, CHRISTOPHER R. HELD, TERRY L. CLAUFF and JAMES R. THORBURN (each
a limited partner of the Partnership, herein collectively referred to as the
"Guarantors"); M.C.P. Limited Partners, Inc., an Illinois corporation ("MCP") (a
limited partner of the Partnership, and together with the Guarantors, herein
collectively referred to as the "Limited Partners"); JAMES E. MASSA, ANDREW A.
POELVOORDE and JOHN M. CRAMPTON (each a stockholder of MCP and herein
collectively referred to as the "Stockholders"); JJA, Inc., an Illinois
corporation and an affiliate of MCP ("JJA"); MID-AMERICA REALTY INVESTMENTS,
INC. (formerly Dial REIT, Inc.), a Maryland corporation ("REIT"); Dial Realty,
Inc., a Nebraska corporation controlled by the Guarantors ("Realty"); and Dial
Properties Co., a Nebraska corporation controlled by the Guarantors
("Properties").
WHEREAS, the parties hereto are involved in or affected by the Litigation
(as defined below), and (except as otherwise specifically provided to the
contrary herein) wish to effect a complete settlement of the Litigation and
resolve all other issues among them relating to the Twin Oaks development.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. BACKGROUND.
(a) The Partnership owns the Twin Oaks Centre shopping center and certain
additional lots adjacent thereto, legally described as follows: Lots
2, 4, 6, 7, 9, 10, 11, 12 and 13 of Twin Oaks Centre Subdivision, a
subdivision to the City of Silvis, Illinois being a subdivision of a
part of the West 1/2 of the Southeast 1/4 and a part of the Southwest
1/4 and a part of the South 1/2 of the Southwest 1/4 of the Northeast
1/4, all in Section 6, Township 17 North, Range 1 East, 4th P.M. Rock
Island County, Illinois (the "Twin Oaks Property").
(b) The Partnership has an option to acquire Lot 3 of the Twin Oaks
Property from the Stockholders pursuant to an Option to Purchase and
Purchase Agreement and a First Amendment to Option to Purchase and
Purchase Agreement, each dated April 19, 1990 (collectively, the
"Option Agreement").
<PAGE>
(c) Realty, and/or other individuals or entities affiliated with the
Guarantors, has one or more agreements with the Partnership by which
such persons or entities may be entitled to real estate commissions
with respect to any sales of the Twin Oaks Property (the "Commission
Agreements").
(d) Properties, and/or other individuals or entities affiliated with the
Guarantors, has one or more agreements with the Partnership by which
such persons or entities may be entitled to leasing commissions and/or
property management fees with respect to the Twin Oaks Property (the
"Leasing/Fee Agreements").
(e) REIT holds certain notes from the Partnership and has and holds
mortgages on the Twin Oaks Property, all as described in the recitals
to the Purchase and Sale Agreement attached as Exhibit A to this
Settlement Agreement (the "Purchase and Sale Agreement").
(f) The Rock Island Bank, an Illinois banking corporation ("Rock Island
Bank") holds a note of the Partnership and a mortgage on certain of
the Twin Oaks Property. Rock Island Bank holds a promissory note
dated April 3, 1992 in the original principal amount of $3,200,000,
the principal and accrued interest on which as of November 15, 1994
was $3,083,323.65, which note is secured by a mortgage on Lots 4, 6, 7
and 9 of the Twin Oaks Property (the "Rock Island Bank Indebtedness").
(g) The Stockholders collectively own Lots 1, 3, 5, 8, 14, 15 and 16
adjacent to the Twin Oaks Property.
(h) The Guarantors are parties to certain guaranty agreements with REIT as
described in the Purchase and Sale Agreement.
(i) MCP, the Stockholders and JJA have instituted a legal action entitled
MCP LIMITED PARTNERS, INC. ET AL. VS. TWIN OAKS LIMITED PARTNERSHIP ET
AL., 92 CH 104 in the Circuit Court of Rock Island County (the
"Illinois Action") which Illinois Action includes the Partnership as a
nominal plaintiff, and have also instituted a related action, MCP
LIMITED PARTNERS, INC. V. LAKEWOOD MALL ET AL., CIV 92-801 in the
Circuit Court of Brown County, South Dakota (the "South Dakota
Action", and together with the Illinois Action, collectively the
"Litigation").
2. REIT ACQUISITION OF TWIN OAKS PROPERTY. REIT is contemporaneously
herewith acquiring the Twin Oaks Property from the Partnership, and the
Partnership is transferring the Twin Oaks
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<PAGE>
Property to REIT, pursuant to the Purchase and Sale Agreement attached to this
Settlement Agreement as Exhibit A. In connection therewith and prior to or
contemporaneous with the closing thereof:
(a) PERMITTED ENCUMBRANCES. The Partnership is transferring the Twin Oaks
Property to REIT free and clear of all liens and encumbrances
excepting only the Rock Island Bank Indebtedness and any indebtedness
in favor of REIT.
(b) ROCK ISLAND BANK ACTIONS. The Partnership has caused Rock Island Bank
(i) to release its mortgage on Lot 4 of the Twin Oaks Property, and
(ii) to consent to the acquisition of the Twin Oaks Property by REIT
subject to the Rock Island Bank Indebtedness.
(c) CONDITIONS TO REIT OBLIGATIONS. The obligations of REIT to execute
the Purchase and Sale Agreement and acquire the Twin Oaks Property
pursuant thereto have been subject to the prior satisfaction of the
following conditions: (i) the transfer of ownership to REIT of all TIF
Bonds described in paragraph 3 of this Settlement Agreement free and
clear of all liens and encumbrances (excepting liens to REIT), (ii)
the execution of the YMA Amendment as described in paragraph 4 of this
Settlement Agreement, and (iii) the dismissal of the Litigation and
related releases as described in paragraph 7 of this Settlement
Agreement.
3. REIT ACQUISITION OF TIF BONDS. The City of Silvis, Illinois has
previously issued to the Partnership certain tax increment revenue bonds in the
aggregate principal amount of $4,882,000 in connection with the Twin Oaks
Property as described in the Purchase and Sale Agreement (collectively the "TIF
Bonds"). The Partnership hereby sells, transfers, assigns and conveys the TIF
Bonds to REIT, so that REIT is the owner of the TIF Bonds. The Partnership shall
execute all documents necessary so that REIT is reflected as such on the records
of the City of Silvis, Illinois, free and clear of all liens and encumbrances.
The General Partner, the Limited Partners and the Stockholders consent to the
sale of the TIF Bonds to REIT.
4. YMA AMENDMENT. The Guarantors, certain limited partnerships
affiliated with the Guarantors, and REIT are contemporaneously herewith
executing an amendment to the Yield Maintenance Agreement (the "YMA Amendment")
in the form attached as Exhibit B to this Settlement Agreement. The Partnership
(and the General Partner, the Limited Partners and the Stockholders) consent to
the inclusion of the Twin Oaks Property under the terms of the Yield Maintenance
Agreement (as defined in the YMA Amendment) subject to the terms thereof.
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<PAGE>
5. LOTS 3, 4 AND 15. The Stockholders own Lots 3 and 15 adjacent to the
Twin Oaks Property. The Partnership currently owns Lot 4 of the Twin Oaks
Property, which Lot 4 is being acquired by REIT pursuant to the Purchase and
Sale Agreement.
(a) RIGHTS OF SALE. The Stockholders and REIT shall each have the right
(i) to market for sale Lot 3 adjacent to the Twin Oaks Property, and
(ii) to market for sale Lots 4 and 15. Any sale of Lots 4 and 15
shall be made contemporaneously with and to the purchaser of Lot 3,
except as provided by paragraph 5(a)(iv). The owner of the marketed
lot shall be obligated to sell the lot pursuant to the terms of this
paragraph, except as provided by paragraph 5(a)(iv). The right to
market said lots shall run with the land and be binding on the heirs,
assigns and successors in interest of the parties.
(i) REIT, or its designee, shall be entitled to a real estate fee or
consulting fee of 7% of the purchase price of any lot sold by
REIT. The Stockholders, or their designee, shall be entitled to a
real estate fee or consulting fee of 7% of the purchase price of
any lot sold by the Stockholders. However, REIT or the
Stockholders, as the case may be, shall not receive any such fee
if a real estate commission is paid to a real estate broker with
whom the subject property was listed.
(ii) REIT and the Stockholders shall list Lots 3, 4 and 15 for sale at
an aggregate purchase price of $1,450,000. The listed aggregate
purchase price shall not be reduced on account of any costs
associated with improvements to the intersection adjacent to Lot
3. All costs and fees with respect to such sales shall be paid in
accordance with applicable local real estate custom (which shall
be allocated in the same percentages as the sales price in the
following two sentences). If Lots 3, 4 and 15 are sold
contemporaneously, the net proceeds of such sales shall be
allocated 80% to the Stockholders and 20% to REIT. If Lots 3 and
4 are sold contemporaneously, the net proceeds of such sales
shall be allocated 77.78% to the Stockholders and 22.22% to REIT.
Any sale of Lot 4 contemporaneously with Lot 3 requires the prior
written approval of REIT (which approval shall be given if the
requirements of paragraph 5(a)(iii) are met). The owner of lots
sold pursuant to paragraph 5 shall require the purchaser of any
such lot to agree to use and exterior elevation conditions on
such lot acceptable to both the Stockholders and REIT.
-4-
<PAGE>
(iii) The purchaser of Lot 3 must provide bona fide projections
indicating that within two years from the purchase of the
property, the purchaser (or an assignee or lessee of the
purchaser) shall have constructed and have in operation retail
stores on Lot 3, which retail stores shall have estimated gross
annual sales subject to Illinois sales tax of at least
$10,000,000. Such projections shall be subject to the approval
of each of the Stockholders and REIT, which approvals shall not
be unreasonably withheld.
(iv) Lot 3 may be sold to a purchaser who does not purchase Lots 4 and
15. The rights and obligations of the parties to market Lots 3, 4
and 15 under this paragraph 5 shall terminate upon the sale of
Lot 3 to a purchaser that does not purchase Lots 4 and 15
contemporaneously with Lot 3, or on December 31, 1996, whichever
event is first to occur. Upon the happening of either of these
events, all parties shall execute any and all documents required
to clear the title to said lots of any claim or interest they may
have therein by virtue of this agreement.
(v) The owner of the lots subject to sale pursuant to this paragraph
(1) shall not suffer or permit any mortgages, liens or
encumbrances to exist on such lots and (2) shall convey the lot
owned by such person to any purchaser hereunder free and clear of
all liens and encumbrances.
(b) LOT 3 SIGNAGE. If Lot 3 is sold to a third party and improved by
the third party, the Stockholders and REIT shall, together with
such third party, install a sign designating the name of the
shopping center on Lot 13. The cost of such signage shall be
allocated among the third party, the Stockholders and REIT based
on the number of improved square feet owned by each such party in
Lots 3, 4, 6, 7 and 15. The foregoing arrangement with respect
to the sharing of signage costs shall not apply to any individual
signs listing the tenants of a lot or lots.
(c) DISTRIBUTION OF ALLOCATED LOT 4 SALE PROCEEDS. The net proceeds
(allocated to Lot 4 pursuant to paragraph 5(a)(ii) above) from
the sale of Lot 4 (if Lot 4 is sold pursuant to paragraph 5(a)
above) shall be distributed as follows: (i) the first $150,000
of such net proceeds shall be paid to REIT, and (ii) all
remaining net proceeds shall be distributed 50% to REIT and 50%
to the Stockholders.
-5-
<PAGE>
(d) OPTION AGREEMENT. The Partnership hereby assigns all of its
rights under the Option Agreement to REIT and the Stockholders
consent to such assignment. REIT and the Stockholders hereby
amend the term of the Option Agreement so that the option granted
therein expires on the date of this Settlement Agreement and the
First Amendment to Option to Purchase and Purchase Agreement
dated April 19, 1990 is revoked.
6. COMMISSION AGREEMENTS, LEASING AGREEMENTS AND PROPERTY MANAGEMENT
AGREEMENTS. The Commission Agreements are hereby terminated and the
Partnership, Realty and any parties affiliated with Realty affected thereby,
shall execute any additional documents requested by REIT, satisfactory in form
and substance to REIT, evidencing such termination, (ii) the Leasing/Fee
Agreements are hereby terminated and the Partnership, Properties and any parties
affiliated with Properties affected thereby, shall execute any additional
documents requested by REIT, satisfactory in form and substance to REIT,
evidencing such termination, and (iii) the Partnership and the Guarantors shall
cause to be terminated any other agreements by which any other parties may be
entitled to real estate commissions or leasing commissions with respect to the
Twin Oaks Property.
7. DISMISSAL OF LITIGATION AND MUTUAL RELEASES.
(a) MCP, the Stockholders, JJA and the Partnership shall (i) dismiss the
Litigation with prejudice, and (ii) release any liens or encumbrances
on the Twin Oaks Property, or on the REIT's Lakewood Mall property in
Aberdeen, South Dakota, arising out of or in connection with the
Litigation or the allegations therein.
(b) All parties hereto hereby fully and forever release and discharge all
other parties hereto (and their heirs, administrators, executors,
officers, employees, agents, affiliates, related individuals or
entities, successors and assigns) from any and all claims, demands,
damages, actions, rights of action of whatsoever kind or nature, which
the releasing party now has or may hereafter have arising out of, in
consequence of, or on account of any and all actions, events and
omissions which occurred or failed to occur on or before the date of
this Settlement Agreement to the extent that such actions, events or
omissions arose out of the acquisition and ownership of the Twin Oaks
Property, any loans or operations of the Twin Oaks Property or the
Partnership, or the issuance of the TIF Bonds, excepting only (i) the
Partnership shall not be released with respect to its representations,
warranties and agreements to REIT in the Purchase and Sale Agreement,
(ii) the obligations of the Partnership to REIT pursuant to the
$2,600,000 tax increment loan shall not be released or treated as paid
in full but REIT
-6-
<PAGE>
hereby covenants and agrees that REIT shall not institute any action
to collect or otherwise enforce said loan against the Partnership or
any partners or guarantors thereof, and (iii) the obligations of the
parties to the YMA (as defined in the YMA Amendment) shall not be
released.
(c) In furtherance of the releases provided above, MCP, the Stockholders
and JJA shall contemporaneously herewith take all actions to dismiss
all Litigation with prejudice.
(d) The parties declare that this mutual release and settlement is
intended to cover and does cover not only all now known injuries,
losses and damages, but any future injuries, losses and damages not
now known or anticipated but which may later be discovered and arose
out of actions, events or omissions relating to the acquisition,
ownership or operation of the Twin Oaks Property or the formation and
operation of the Partnership, prior to the date of this Settlement
Agreement.
(e) The releases contained herein are in full accord and satisfaction of
disputed claims and are not to be construed as an admission of
liability by or on behalf of any of the parties hereto, by whom all
liability is hereby expressly denied.
(f) Nothing contained herein shall be construed to release any right,
obligation or covenant arising by virtue of or under the provisions of
this Settlement Agreement, and all parties expressly reserve the right
to enforce said Settlement Agreement and to recover any damages
accruing by virtue of its breach by any party. All parties agree to
execute all documents and to do all things necessary effectuate the
terms of this Settlement Agreement.
8. REPRESENTATIONS AND WARRANTIES ON BEHALF OF THE PARTNERSHIP.
(a) The General Partner and the Limited Partners severally, and jointly
and severally with the Partnership, represent and warrant that (i) the
Partnership is validly organized and existing and in good standing
under and pursuant to the laws of the State of Nebraska, (ii) the
Partnership has full power and authority to execute the Settlement
Agreement and all documents, instruments and agreements referred to
therein, (iii) the General Partner and the Limited Partners are
authorized to execute this Settlement Agreement on behalf of the
Partnership and all proceedings necessary or proper with respect
thereto have been done, taken or performed, (iv) the General Partner
-7-
<PAGE>
is authorized to execute on behalf of the Partnership all documents,
instruments and agreements referred to in the Settlement Agreement and
all proceedings necessary or proper with respect thereto have been
done, taken or performed, and (v) this Settlement Agreement and all
documents and instruments contemplated hereunder when executed as
described above shall constitute the valid and binding obligations of
the Partnership and shall be enforceable in accordance with their
respective terms.
(b) The Stockholders and MCP jointly and severally (i) consent to the
execution of this Settlement Agreement and all documents, instruments
and agreements referred to therein by the General Partner and the
Limited Partners as the case may be, (ii) consent to the transfer of
the Twin Oaks Property to REIT pursuant to the Purchase and Sale
Agreement, notwithstanding any provisions of the Twin Oaks partnership
agreement which may provide to the contrary, (iii) consent to the
transfer of the TIF Bonds as described in paragraph 3, and (iv) agree
to take and to use their best efforts to cause the Partnership to
execute such other reasonable further and additional documents as may
be necessary in order to carry out the terms and conditions of this
Settlement Agreement.
9. REPRESENTATIONS AND WARRANTIES ON BEHALF OF REALTY AND PROPERTIES. The
Guarantors severally, and jointly and severally with Realty and Properties,
represent and warrant as follows: (i) each of Realty and Properties is a
corporation validly organized and existing and in good standing under and
pursuant to the laws of the State of Nebraska, (ii) each of Realty and
Properties has full power and authority to execute this Settlement Agreement and
all documents, instruments and agreements referred to therein, (iii) Donald F.
Day has been duly and lawfully authorized to execute this Settlement Agreement
and all documents, instruments and agreements referred to therein on behalf of
Realty and Properties, and (iv) this Settlement Agreement and all documents and
instruments contemplated hereunder shall constitute the valid and binding
obligations of Realty and Properties, respectively, and shall be enforceable in
accordance with their respective terms.
10. REPRESENTATIONS AND WARRANTIES ON BEHALF OF MCP AND JJA. The
Stockholders severally, and jointly and severally with MCP and JJA, represent
and warrant as follows: (i) each of MCP and JJA is a corporation validly
organized and existing and in good standing under and pursuant to the laws of
the State of Illinois, (ii) each of MCP and JJA has full power and authority to
execute this Settlement Agreement and all documents, instruments and agreements
referred to therein, (iii) Andrew Poelvoorde has been duly and lawfully
authorized to execute this Settlement Agreement and all documents, instruments
and agreements referred to therein on behalf of MCP and JJA, (iv) this
Settlement Agreement and all documents and instruments contemplated hereunder
shall constitute the valid
-8-
<PAGE>
and binding obligations of MCP and JJA, respectively, and shall be enforceable
in accordance with their respective terms, and (v) the Stockholders own Lots 3
and 15 free and clear of all liens and encumbrances.
11. REPRESENTATIONS AND WARRANTIES OF REIT. REIT represents and warrants
that: (i) it is a corporation validly organized and existing and in good
standing under and pursuant to the laws of the State of Maryland and in April
1994 changed its corporate name from "Dial REIT, Inc." to "Mid-America Realty
Investments, Inc.", (ii) it has full power and authority to execute this
Settlement Agreement and all documents, instruments and agreements referred to
therein, (iii) the Chief Executive Officer of REIT has been duly and lawfully
authorized to execute and deliver this Settlement Agreement and all documents,
instruments and agreements referred to therein, and (iv) this Settlement
Agreement and all documents and instruments contemplated hereunder shall
constitute the valid and binding obligations of REIT and shall be enforceable in
accordance with their respective terms.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties and covenants contained in this Settlement Agreement shall survive
the closing of the transactions contemplated hereby and the delivery and
recording, where applicable, of such documents.
13. COUNTERPARTS. This Settlement Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the undersigned, by their authorized representatives,
have executed this Settlement Agreement as of the day and year first above
written.
TWIN OAKS CENTRE LIMITED TWIN OAKS CENTRE, INC., a
PARTNERSHIP, a Nebraska Nebraska corporation
limited partnership
By: /s/ Donald F. Day
--------------------------
By: Twin Oaks Centre, Inc., Name: Donald F. Day
a Nebraska corporation, ------------------------
General Partner Title: President
-----------------------
M.C.P. Limited Partners, Inc.,
By: /s/ Donald F. Day an Illinois corporation
--------------------------
Name: Donald F. Day
------------------------
Title: President By:/s/ Andrew A. Poelvoorde
---------------------- -----------------------------
Name: Andrew A. Poelvoorde
---------------------------
Title: President
--------------------------
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<PAGE>
JJA, Inc., an Illinois
corporation
By: /s/ Andrew A. Poelvoorde MID-AMERICA REALTY INVESTMENTS,
----------------------------- INC., a Maryland corporation
Name: Andrew A. Poelvoorde
---------------------------
Title: President
--------------------------
By: /s/ Jerome L. Heinrichs
------------------------------
Dial Realty, Inc., a Nebraska Name: Jerome L. Heinrichs
corporation ----------------------------
Title: Chief Executive Officer
---------------------------
By: /s/ Donald F. Day
------------------------
Name: Donald F. Day
----------------------
Title: President DIAL PROPERTIES CO., a
--------------------- Nebraska corporation
By: /s/ T. L. Clauff
-----------------------
Name: T. L. Clauff
---------------------
Title: President
--------------------
STOCKHOLDERS GUARANTORS
/s/ James E. Massa /s/ Donald F. Day
____________________________ ________________________________
James E. Massa Donald F. Day
/s/ Andrew A. Poelvoorde /s/ Christopher R. Held
___________________________ ________________________________
Andrew A. Poelvoorde Christopher R. Held
/s/ John M. Crampton /s/ Terry L. Clauff
___________________________ ________________________________
John M. Crampton Terry L. Clauff
/s/ James M. Thorburn
________________________________
James M. Thorburn
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<PAGE>
FIRST AMENDMENT TO YIELD MAINTENANCE AGREEMENT
This First Amendment dated as of April , 1995 (the "Amendment") amends
the Yield Maintenance Agreement dated as of June 1, 1992 (the "YMA") by and
between LAKEWOOD ASSOCIATES LIMITED PARTNERSHIP, a South Dakota limited
partnership ("Lakewood"), TWIN OAKS CENTRE LIMITED PARTNERSHIP, A Nebraska
limited partnership ("Twin Oaks"), KIMBERLY WEST SHOPPING CENTER LIMITED
PARTNERSHIP, a Nebraska limited partnership ("Kimberly West") (collectively
referred to in the YMA as the "Sellers"), DONALD F. DAY, CHRISTOPHER R. HELD,
TERRY L. CLAUFF and JAMES R. THORBURN (referred to in the YMA collectively as
the "Guarantors"), and MID-AMERICA REALTY INVESTMENTS, INC. (formerly Dial REIT,
Inc.), a Maryland corporation ("REIT"). Pursuant to this Amendment, NATIONAL-
MOORLAND ASSOCIATES LIMITED PARTNERSHIP, a Nebraska limited partnership
("National-Moorland") and FAIRGROUNDS LIMITED PARTNERSHIP, a Nebraska limited
partnership ("Fairgrounds") become parties to the YMA.
1. CERTAIN DEFINITIONS. Terms not otherwise defined in this Amendment
shall have the meanings ascribed to them in the YMA. From and after the date of
this Amendment, (i) all references on any documents to the YMA shall be deemed
to be a reference to the YMA as amended by this Amendment, and (ii) all
references to "Sellers" in the YMA shall be a collective reference to Lakewood,
Kimberly West, Twin Oaks, National-Moorland and Fairgrounds.
2. BACKGROUND.
(a) Lakewood, Twin Oaks and Kimberly West were parties to a Purchase and
Sale Agreement pursuant to which certain shopping centers were to be
sold to REIT. Closings were held with respect to the shopping centers
owned by Lakewood and Kimberly West. Pursuant to a letter agreement
dated August 28, 1992, the parties to the YMA agreed that the closing
with respect to the Twin Oaks shopping center would not occur.
(b) Pursuant to a purchase agreement dated December 22, 1992, REIT
acquired the Fairacres Square Shopping Center ("Fairacres Square") in
Oshkosh, Wisconsin from Fairgrounds, which purchase agreement provided
in part that such property would become subject to the YMA.
(c) Pursuant to a purchase agreement dated November 23, 1992, REIT
acquired Moorland Square Shopping Center ("Moorland Square") in New
Berlin, Wisconsin from National-Moorland, which purchase agreement
provided in part that such property would become subject to the YMA.
(d) Pursuant to a purchase agreement of even date with this Amendment,
REIT has contracted to acquire, subject to certain conditions, from
Twin Oaks the property
<PAGE>
previously subject to acquisition pursuant to the Purchase and Sale
Agreement.
(e) The YMA requires determinations of Investment Base and Arrearages on a
quarterly basis, and the parties now wish to document their current
agreement with respect to such calculations.
(f) In consideration of the matters set forth in this Amendment, and for
other good and valuable consideration the receipt of which is hereby
acknowledged, the parties to the YMA have agreed to add National-
Moorland and Fairgrounds as parties to the YMA, and all such parties
have agreed to the amendments to the YMA described herein.
3. AMENDMENTS TO SECTION 1. Certain provisions of Section 1 of the YMA
are amended as follows:
(a) The last sentence of the definition of "Adjusted Acquisition Cost" is
revised to read as follows:
On the Termination Date, and for purposes of calculating the
Termination Date Differential as defined in Section 2.B.
below, the amount of Arrearages on the Termination Date
shall be added to the Adjusted Acquisition Cost.
(b) The definition of "Effective Date" is revised to read as follows:
"Effective Date" shall mean (i) June 1, 1992 with respect to
Lakewood and Kimberly West, (ii) December 22, 1992 with
respect to Fairgrounds, (iii) November 23, 1992 with respect
to National-Moorland, and (iv) the date of this Amendment
with respect to Twin Oaks.
(c) The definition of "Properties" is revised to read as follows:
"Properties" shall mean Lakewood Mall, Twin Oaks Centre, and
Kimberly West (all as defined in the Purchase and Sale
Agreement), and Moorland Square and Fairacres Square (as
defined herein).
4. INVESTMENT BASE. The Investment Base for each of the five properties
subject to the YMA, as of September 30, 1994, is as set forth on Exhibit A to
this Amendment. Such Investment Base is the "Investment Base" required to be
calculated quarterly pursuant to the definition of "Investment Base" in the YMA.
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<PAGE>
5. ARREARAGES. The Schedule of Arrearages for each of the five
properties subject to the YMA, as of September 30, 1994, is set forth on Exhibit
B to this Amendment. Such Schedule of Arrearages is the "Schedule of
Arrearages" required to be calculated quarterly pursuant to the definition of
"Schedule of Arrearages" in the YMA.
6. AMENDMENT TO SECTION 2.C. Section 2.C. of the YMA is amended as
follows:
C. MAXIMUM LIABILITY. The maximum aggregate amount
payable by the Sellers and the Guarantors to REIT
pursuant to this Section 2, with respect to the
Schedule of Arrearages and Termination Date
Differential determined on an aggregate basis for
Lakewood Mall, Kimberly West and Twin Oaks Centre,
shall be limited to $2,300,000. The maximum aggregate
amount payable by the Sellers and the Guarantors to
REIT pursuant to this Section 2, with respect to the
Schedule of Arrearages and Termination Date
Differential determined on an aggregate basis for
Moorland Square and Fairacres Square shall be limited
to $500,000.
7. AMENDMENT TO EXHIBIT D. Exhibit D to the YMA sets forth certain
assets and Section 2.D. of the YMA describes the required application of
proceeds from the sale, financing, refinancing or ground-lease of such assets.
Parcel 5 of Moorland Square owned by National-Moorland (legally described on
Exhibit C to this Agreement) is hereby added to Exhibit D and shall be subject
to all of the terms of the YMA.
8. PLEDGE AGREEMENT. Exhibit E to the YMA describes certain security
received by REIT for the obligations of the Sellers and Guarantors. REIT
acknowledges receipt of an assignment of a 50% interest in Kearney Mall
Associates, Ltd. Limited Partnership, pursuant to a Pledge and Assignment of
Partnership Agreement dated August 28, 1992 executed by Donald F. Day and
Terry L. Clauff. Day and Clauff acknowledge that such assignment carries with
it the immediate right of REIT to receive 50% of any and all distributions from
or with respect to such limited partnership.
9. REPRESENTATIONS AND WARRANTIES OF GUARANTORS. The Guarantors jointly
and severally represent and warrant to REIT that (i) each of the Sellers has
full power and authority to execute this Amendment and all documents,
instruments and agreements referred to therein, (ii) Donald F. Day has been
authorized to execute and deliver, on behalf of each of the Sellers, this
Amendment and all documents, instruments and agreements referred to herein and
all acts and proceedings necessary or proper with
-3-
<PAGE>
respect thereto have been done, taken or performed and (iii) this Amendment and
all documents and instruments referred to herein and contemplated hereunder when
executed on behalf of each Seller do and shall constitute the valid and binding
obligations of each Seller and shall be enforceable in accordance with their
terms.
10. ARBITRATION/APPRAISAL. Certain provisions of the YMA require
arbitration in accordance with the rules of the American Arbitration
Association. If such arbitration is not available, or is not legally
enforceable under applicable law, the valuation in question shall be effected by
appraisal. The Sellers and the Guarantors on the one hand shall select an
appraiser, and REIT on the other hand shall select an appraiser. These
appraisers shall have MAI designation. The two appraisers so selected shall in
turn select a third appraiser, and the decision of the three appraisers shall be
final and binding on the parties.
11. REAFFIRMATION. Subject to the revisions effected by the Amendment,
the parties hereto, including but not limited to National-Moorland and
Fairgrounds, ratify and reaffirm the YMA.
12. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the undersigned, by their authorized representatives,
have executed this Amendment as of the day and year first above written.
SELLERS
NATIONAL-MOORLAND ASSOCIATES LAKEWOOD ASSOCIATES LIMITED
LIMITED PARTNERSHIP, A Nebraska PARTNERSHIP, a South
limited partnership Dakota limited partnership
By: Dial-New Berlin, Inc., a By: Aberdeen Mall Associates
Nebraska corporation, Limited Partnership, a
General Partner South Dakota limited
partnership
By: /s/ Donald F. Day By: Aberdeen Mall, Inc., a
-------------------------- Nebraska corporation,
Name: Donald F. Day General Partner
------------------------
Title: President
-----------------------
By: /s/ Donald F. Day
--------------------------
Name: Donald F. Day
------------------------
Title: President
-----------------------
-4-
<PAGE>
FAIRGROUNDS LIMITED PARTNERSHIP, TWIN OAKS CENTRE LIMITED
A Nebraska limited partnership PARTNERSHIP, a Nebraska
limited partnership
By: Fairgrounds, Inc., a Nebraska
corporation, General Partner By: Twin Oaks Centre, Inc., a
Nebraska corporation,
General Partner
By: /s/ Donald F. Day
--------------------------
Name: Donald F. Day By: /s/ Donald F. Day
------------------------ --------------------------
Title: President Name: Donald F. Day
----------------------- ------------------------
Title: President
-----------------------
MID-AMERICA REALTY INVESTMENTS KIMBERLY WEST SHOPPING CENTER
INC., a Maryland corporation LIMITED PARTNERSHIP, a
Nebraska limited partnership
By: /s/ Jerome L. Heinrichs By: Kimberly West Shopping
------------------------------ Center, Inc., a Nebraska
Name: Jerome L. Heinrichs corporation, General
---------------------------- Partner
Title: Chief Executive Officer
---------------------------
By: /s/ Donald F. Day
---------------------------
Name: Donald F. Day
-------------------------
Title: President
------------------------
GUARANTORS
/s/ Donald F. Day
------------------------------
Donald F. Day
/s/ Christopher R. Held
------------------------------
Christopher R. Held
/s/ Terry L. Clauff
-----------------------------
Terry L. Clauff
/s/ James M. Thorburn
-----------------------------
James M. Thorburn
-5-
<PAGE>
EXHIBIT A
CALCULATION OF INVESTMENT BASE
The Investment Base, for each property subject to the YMA, as of
September 30, 1994 is as follows:
1. Kimberly West............. $ 2,901,165.35
2. Lakewood.................. $10,076,874.87
3. Fairgrounds............... $ 2,034,274.05
4. National-Moorland......... $ 826,945.47
5. Twin Oaks................. $ 8,672,271.12
<PAGE>
EXHIBIT B
SCHEDULE OF ARREARAGES
The Arrearages for each property subject to the YMA, as of
September 30, 1994 is as follows:
1. Kimberly West............. $ 301,118.99
2. Lakewood.................. $ 1,451,775.29
3. Fairgrounds............... $ 692,611.99
4. National-Moorland......... $ 91,072.07
5. Twin Oaks................. $ 1,370,633.83
______________
$ 3,907,212.17
<PAGE>
EXHIBIT C
Parcel Five (5) of CERTIFIED SURVEY MAP NO. 6149, being a Division of
Parcel Two (2) of Certified Survey Map No. 5711, located in the
Northwest one-quarter (1/4) and Southwest one-quarter (1/4) of the
Southwest one-quarter (1/4) of Section Fourteen (14), in Township Six
(6) North, Range Twenty (20) East, in the City of New Berlin, Waukesha
County, Wisconsin, recorded in the office of the Register of Deeds for
Waukesha County on May 3, 1990 in Volume 50 of Certified Survey Maps
at Pages 291 to 293 inclusive, as Document No. 1589790.
<PAGE>
MID-AMERICA REALTY 1995 STOCK PLAN
SECTION 1
NAME AND PURPOSE
1.1 NAME. The name of the plan shall be the Mid-America Realty
Investments, Inc. 1995 Stock Plan (the "Plan").
1.2. PURPOSE OF PLAN. The purpose of the Plan is to foster and promote the
long-term financial success of the Company and increase stockholder value by (a)
motivating superior performance by means of stock incentives, (b) encouraging
and providing for the acquisition of an ownership interest in the Company by
Employees and (c) enabling the Company to attract and retain the services of a
management team responsible for the long-term financial success of the Company.
SECTION 2
DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms shall have the
respective meanings set forth below:
(a) "Act" means the Securities Exchange Act of 1934, as amended.
(b) "Award" means any Option, Stock Appreciation Right or Restricted
Stock, or any combination thereof, including Awards combining two or
more types of Awards in a single grant.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation Committee of the Board, which shall
consist of two or more members, each of whom shall be "disinterested
persons" within the meaning of Rule 16b-3 as promulgated under the
Act.
(f) "Company" means Mid-America Realty Investments, Inc., a Maryland
corporation (and any successor thereto) and its Subsidiaries.
(g) "Director Award" means an award of Stock granted to each Eligible
Director pursuant to Section 7.1 without any action by the Board or
the Committee.
<PAGE>
(h) "Eligible Director" means a person who is serving as a member of the
Board and who is not an Employee.
(i) "Employee" means any employee of the Company or any of its
Subsidiaries.
(j) "Fair Market Value" means, on any date, the closing price of the Stock
as reported on the New York Stock Exchange (or on such other
recognized market or quotation system on which the trading prices of
the Stock are traded or quoted at the relevant time) on such date. In
the event that there are no Stock transactions reported on such
exchange (or such other system) on such date, Fair Market Value shall
mean the closing price on the immediately preceding date on which
Stock transactions were so reported.
(k) "Option" means the right to purchase Stock at a stated price for a
specified period of time. For purposes of the Plan, an Option may be
either (i) an Incentive Stock Option within the meaning of Section 422
of the Code or (ii) a Nonstatutory Stock Option.
(l) "Participant" means any Employee designated by the Committee to
participate in the Plan.
(m) "Plan" means the Mid-America Realty Investments, Inc. 1995 Stock Plan,
as in effect from time to time.
(n) "Restricted Stock" shall mean a share of Stock granted to a
Participant subject to such restrictions as the Committee may
determine.
(o) "Stock" means the Common Stock of the Company, par value $.01 per
share.
(p) "Stock Appreciation Right" means the right, subject to such terms and
conditions as the Committee may determine, to receive an amount in
cash or Stock, as determined by the Committee, equal to the excess of
(i) the Fair Market Value, as of the date such Stock Appreciation
Right is exercised, of the number shares of Stock covered by the Stock
Appreciation Right being exercised over (ii) the aggregate exercise
price of such Stock Appreciation Right.
(q) "Subsidiary" means any corporation or partnership in which the Company
owns, directly or indirectly, 50% or more of the total combined voting
power of all classes of stock of such corporation or of the capital
interest or profits interest of such partnership.
-2-
<PAGE>
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
words in the masculine gender used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
SECTION 3
ELIGIBILITY AND PARTICIPATION
Except as otherwise provided in Section 7.1, the only persons eligible to
participate in the Plan shall be those Employees selected by the Committee as
Participants.
SECTION 4
POWERS OF THE COMMITTEE
4.1 POWER TO GRANT. The Committee shall determine the Participants to
whom Awards shall be granted, the type or types of Awards to be granted, and the
terms and conditions of any and all such Awards. The Committee may establish
different terms and conditions for different types of Awards, for different
Participants receiving the same type of Awards, and for the same Participant for
each Award such Participant may receive, whether or not granted at different
times.
4.2 ADMINISTRATION. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to prescribe, amend, and rescind rules and regulations relating to
the Plan, to provide for conditions deemed necessary or advisable to protect the
interests of the Company, and to make all other determinations necessary or
advisable for the administration and interpretation of the Plan in order to
carry out its provisions and purposes. Determinations, interpretations, or other
actions made or taken by the Committee pursuant to the provisions of the Plan
shall be final, binding, and conclusive for all purposes and upon all persons.
Notwithstanding anything else contained in the Plan to the contrary, neither the
Committee nor the Board shall have any discretion regarding whether an Eligible
Director receives a Director Award pursuant to Section 7.1 or regarding the
terms of any such Director Award, including, without limitation, the number of
shares subject to any such Director Award.
-3-
<PAGE>
SECTION 5
STOCK SUBJECT TO PLAN
5.1 NUMBER. Subject to the provisions of Section 5.3, the number of
shares of Stock subject to Awards (including Director Awards) under the Plan may
not exceed 250,000 shares of Stock. The shares to be delivered under the Plan
may consist, in whole or in part, of treasury Stock or authorized but unissued
Stock, not reserved for any other purpose. The maximum number of shares of Stock
with respect to which Awards may be granted to any one Employee under the Plan
is 25% of the aggregate number of shares of Stock available for Awards under
Section 5.1.
5.2 CANCELLED, TERMINATED OR FORFEITED AWARDS. Any shares of Stock
subject to an Award which for any reason are cancelled, terminated or otherwise
settled without the issuance of any Stock shall again be available for Awards
under the Plan.
5.3 ADJUSTMENT IN CAPITALIZATION. In the event of any Stock dividend or
Stock split, recapitalization (including, without limitation, the payment of an
extraordinary dividend), merger, consolidation, combination, spin-off,
distribution of assets to stockholders, exchange of shares, or other similar
corporate change, (i) the aggregate number of shares of Stock available for
Awards under Section 5.1 and (ii) the number of shares and exercise price with
respect to Options and the number, prices and dollar value of other Awards, may
be appropriately adjusted by the Committee, whose determination shall be
conclusive. If, pursuant to the preceding sentence, an adjustment is made to the
number of shares of Stock authorized for issuance under the Plan, a
corresponding adjustment shall be made to the number of shares subject to each
Director Award thereafter granted pursuant to Section 7.1.
SECTION 6
STOCK OPTIONS
6.1 GRANT OF OPTIONS. Options may be granted to Participants at such time
or times as shall be determined by the Committee. Options granted under the
Plan may be of two types: (i) Incentive Stock Options and (ii) Nonstatutory
Stock Options. The Committee shall have complete discretion in determining the
number of Options, if any, to be granted to a Participant. Each Option shall be
evidenced by an Option agreement that shall specify the type of Option granted,
the exercise price, the duration of the Option, the number of shares of Stock to
which the Option pertains, the exercisability (if any) of the Option in the
event of death, retirement, disability or termination of employment, and such
other
-4-
<PAGE>
terms and conditions not inconsistent with the Plan as the Committee shall
determine.
6.2 OPTION PRICE. Nonstatutory Stock Options and Incentive Stock Options
granted pursuant to the Plan shall have an exercise price which is not less than
the Fair Market Value on the date the Option is granted.
6.3 EXERCISE OF OPTIONS. Options awarded to a Participant under the Plan
shall be exercisable at such times and shall be subject to such restrictions and
conditions as the Committee may impose, subject to the Committee's right to
accelerate the exercisability of such Option in its discretion, including the
right to accelerate the exercisability of such Option in the event of a change-
in-control of the Company. Notwithstanding the foregoing, no Option shall be
exercisable for more than ten years after the date on which it is granted.
6.4 PAYMENT. The Committee shall establish procedures governing the
exercise of Options, which shall require that written notice of exercise be
given and that the Option price be paid in full in cash or cash equivalents,
including by personal check, at the time of exercise or pursuant to any
arrangement that the Committee shall approve. The Committee may, in its
discretion, permit a Participant to make payment (i) in Stock already owned by
the Participant valued at its Fair Market Value on the date of exercise (if such
Stock has been owned by the Participant for at least six months) or (ii) by
electing to have the Company retain Stock which would otherwise be issued on
exercise of the Option, valued at its Fair Market Value on the date of exercise.
As soon as practicable after receipt of a written exercise notice and full
payment of the exercise price, the Company shall deliver to the Participant a
certificate or certificates representing the acquired shares of Stock.
6.5 INCENTIVE STOCK OPTIONS. Notwithstanding anything in the Plan to the
contrary, no term of this Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under Section 422
of the Code, or, without the consent of any Participant affected thereby, to
cause any Incentive Stock Option previously granted to fail to qualify for the
Federal income tax treatment afforded under Section 421 of the Code. In
furtherance of the foregoing, (i) the aggregate Fair Market Value of shares of
Stock (determined at the time of grant of each Option) with respect to which
Incentive Stock Options are exercisable for the first time by an Employee during
any calendar year shall not exceed $100,000 or such other amount as may be
required by the Code, (ii) an Incentive Stock Option may not be exercised more
than three months following termination of employment (except as the Committee
may otherwise determine in the event of death or disability), and (iii) if the
Employee receiving
-5-
<PAGE>
an Incentive Stock Option owns Stock possessing more than 10% of the total
combined voting power of all classes of Stock of the Company, the exercise price
of the Option shall be at least 110% of Fair Market Value and the Option shall
not be exercisable after the expiration of five years from the date of grant.
SECTION 7
DIRECTOR AWARDS
7.1 AMOUNT OF AWARD. Beginning with the annual term of Directors
commencing at the 1995 Annual Stockholders' Meeting, each Eligible Director
shall receive 50% of the value of his annual retainer fee in the form of Stock.
The annual retainer fee shall be paid in four installments on the last business
day of each calendar quarter. The number of shares of Stock issued to an
Eligible Director pursuant to this Section 7.1 shall be determined by (i)
dividing 50% of the amount of the Eligible Director's retainer fee payable on
such quarterly date by (ii) the Fair Market Value of a share of Stock on such
date. Whenever under the term of this Section 7.1 a fractional share of Stock
would otherwise be required to be issued, an amount in lieu thereof shall be
paid in cash based upon the Fair Market Value of such fractional share.
7.2 NO OTHER AWARDS. An Eligible Director shall not receive any other
Award under the Plan.
SECTION 8
STOCK APPRECIATION RIGHTS
8.1 SAR'S IN TANDEM WITH OPTIONS. Stock Appreciation Rights may be
granted to Participants in tandem with any Option granted under the Plan, either
at or after the time of the grant of such Option, subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine. Each Stock Appreciation Right shall only be exercisable to the
extent that the corresponding Option is exercisable, and shall terminate upon
termination or exercise of the corresponding Option. Upon the exercise of any
Stock Appreciation Right, the corresponding Option shall terminate.
8.2 OTHER STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may also
be granted to Participants separately from any Option, subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine.
-6-
<PAGE>
SECTION 9
RESTRICTED STOCK
9.1 GRANT OF RESTRICTED STOCK. The Committee may grant Restricted Stock
to Participants at such times and in such amounts, and subject to such other
terms and conditions not inconsistent with the Plan as it shall determine. Each
grant of Restricted Stock shall be subject to such restrictions, which may
relate to continued employment with the Company, performance of the Company, or
other restrictions, as the Committee may determine. Each grant of Restricted
Stock shall be evidenced by a written agreement setting forth the terms of such
Award.
9.2 REMOVAL OF RESTRICTIONS. The Committee may accelerate or waive such
restrictions in whole or in part at any time in its discretion.
SECTION 10
AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
10.1 GENERAL. The Board may from time to time amend, modify or terminate
any or all of the provisions of the Plan, subject to the provisions of this
Section 10.1; provided, in no event may the Board amend the Plan more than once
every six months. The Board may not change the Plan in a manner which would
prevent outstanding Incentive Stock Options granted under the Plan from being
Incentive Stock Options without the consent of the optionees concerned.
Furthermore, the Board may not make any amendment which would (i) materially
modify the requirements for participation in the Plan, (ii) increase the number
of shares of Stock subject to Awards under the Plan pursuant to Section 5.1,
(iii) materially increase the benefits accruing to Participants under the Plan,
or (iv) make any other amendments which would cause the Plan not to comply with
Rule 16b-3 under the Act, in each case without the consent and approval of the
holders of a majority of the outstanding shares of Stock entitled to vote
thereon. No amendment or modification shall affect the rights of any Employee
with respect to a previously granted Award, nor shall any amendment or
modification affect the rights of any Eligible Director pursuant to a previously
granted Director Award.
10.2 TERMINATION OF PLAN. No further Options shall be granted under the
Plan subsequent to December 31, 2004, or such earlier date as may be determined
by the Board.
-7-
<PAGE>
SECTION 11
MISCELLANEOUS PROVISIONS
11.1 NONTRANSFERABILITY OF AWARDS. No Awards granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. All rights with
respect to Awards granted to a Participant under the Plan shall be exercisable
during his lifetime only by such Participant and all rights with respect to any
Director Awards granted to an Eligible Director shall be exercisable during his
lifetime only by such Eligible Director.
11.2 BENEFICIARY DESIGNATION. Each Participant under the Plan may from
time to time name any beneficiary or beneficiaries (who may be named contingent
or successively) to whom any benefit under the Plan is to be paid or by whom any
right under the Plan is to be exercised in case of his death. Each designation
will revoke all prior designations by the same Participant shall be in a form
prescribed by the Committee, and will be effective only when filed in writing
with the Committee. In the absence of any such designation, Awards outstanding
at death may be exercised by the Participant's surviving spouse, if any, or
otherwise by his estate.
11.3 NO GUARANTEE OF EMPLOYMENT OR PARTICIPATION. Nothing in the Plan
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary. No Employee shall have a right to be selected as a Participant, or,
having been so selected, to receive any future Awards.
11.4 TAX WITHHOLDING. The Company shall have the power to withhold, or
require a Participant or Eligible Director to remit to the Company, an amount
sufficient to satisfy federal, state, and local withholding tax requirements on
any Award under the Plan, and the Company may defer issuance of Stock until such
requirements are satisfied. The Committee may, in its discretion, permit a
Participant to elect, subject to such conditions as the Committee shall impose,
(i) to have shares of Stock otherwise issuable under the Plan withheld by the
Company or (ii) to deliver to the Company previously acquired shares of Stock,
in each case having a Fair Market Value sufficient to satisfy all or part of the
Participant's estimated total federal, state and local tax obligation associated
with the transaction.
11.5 COMPANY INTENT. The Company intends that the Plan comply in all
respects with Rule 16b-3 under the Act, and any ambiguities or inconsistencies
in the construction of the Plan shall be interpreted to give effect to such
intention.
-8-
<PAGE>
11.6 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
shares of Stock shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or securities exchanges as
may be required.
11.7 EFFECTIVE DATE. The Plan shall be effective upon its adoption by the
Board subject to approval by the affirmative vote of the holders of a majority
of the shares of Stock present in person or by proxy at a stockholders' meeting.
11.8 GOVERNING LAW. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Maryland.
-9-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Unaudited Consolidated Balance Sheet at March 31, 1995 and Unaudited Statement
of Income for the Three Months Ended March 31, 1995 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 2,562
<ALLOWANCES> 357
<INVENTORY> 0
<CURRENT-ASSETS> 2,919
<PP&E> 147,610
<DEPRECIATION> 20,891
<TOTAL-ASSETS> 151,065
<CURRENT-LIABILITIES> 1,241
<BONDS> 63,944
<COMMON> 83
0
0
<OTHER-SE> 85,797
<TOTAL-LIABILITY-AND-EQUITY> 151,065
<SALES> 0
<TOTAL-REVENUES> 5,835
<CGS> 0
<TOTAL-COSTS> 1,763
<OTHER-EXPENSES> 1,699
<LOSS-PROVISION> 35
<INTEREST-EXPENSE> 1,447
<INCOME-PRETAX> 889
<INCOME-TAX> 0
<INCOME-CONTINUING> 889
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 889
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
