<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
[x] Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1998
-----------------------------------------------
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 1-10641
-------
MILESTONE PROPERTIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 65-0158204
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
150 E. Palmetto Park Rd., 4th Floor, Boca Raton, FL 33432
- ---------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (561) 394-9533
------------------------------
Securities Registered pursuant to Section 12(b) of the Exchange Act: None
Securities Registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $.01 per share
--------------------------------------
(Title of Class)
$.78 Convertible Series A Preferred Stock, par value $.01 per share
-------------------------------------------------------------------
(Title of Class)
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 Exchange 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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or by any
amendment to this Form 10-K. [x]
The aggregate market value of the common equity of the Registrant held by
non-affiliates, computed by reference to the average bid and asked price of a
share of the Registrant's Common Stock on March 12, 1999, was approximately
$1,623,836.
As of the close of business on April 26, 1999, 4,251,042 shares of the
Registrant's Common Stock were outstanding and 16,423 shares of the Registrant's
$.78 Convertible Series A Preferred Stock were outstanding.
<PAGE>
EXPLANATORY NOTE
At the time the Registrant filed its Annual Report on Form 10-K for the
year ended December 31, 1998, the Registrant intended to incorporate by
reference to its Proxy Statement for its 1999 Annual Meeting of Stockholders the
information required by Items 10, 11, 12 and 13 of Part III of Form 10-K, as
permitted by General Instruction G of Form 10-K. However, since the Registrant
no longer expects to file with the Securities and Exchange Commission the
definitive Proxy Statement for its 1999 Annual Meeting of Stockholders within
the time frame General Instruction G permits for incorporation by reference, the
missing information is being provided by the filing of this amendment.
1
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Certain information concerning the directors and executive officers of
the Company is set forth below:
Leonard S. Mandor, age 52, has served as Chairman of the Board and
Chief Executive Officer of the Company since it began operations in December
1990. Mr. Mandor is also the Chairman of the Board and Chief Executive Officer
of Concord. Mr. Mandor has been associated with Concord since its inception in
1981. Mr. Mandor's current term as a director of the Company expires at the
Company's 1999 Annual Meeting of Stockholders and he has been nominated to serve
a new term commencing as of the date of the 1999 Annual Meeting of Stockholders
and expiring on the date of the Company's Annual Meeting of Stockholders to be
held in 2002 and until his successor has been elected and qualified.
Robert A. Mandor, age 47, has served as President, Chief Financial
Officer and a director of the Company since it began operations in December
1990. Mr. Mandor is also the President, Chief Financial Officer and a director
of Concord. Mr. Mandor has been associated with Concord since its inception in
1981. Mr. Mandor's term as a director of the Company was set to expire at the
Company's Annual Meeting of Stockholders that was to be held in 1998. Since the
Company did not hold an Annual Meeting of Stockholders in 1998, Mr. Mandor's
current term as a director of the Company expires at the Company's 1999 Annual
Meeting of Stockholders and he has been nominated to serve a new term commencing
as of the date of the 1999 Annual Meeting of Stockholders and expiring on the
date of the Company's Annual Meeting of Stockholders to be held in 2001 and
until his successor has been elected and qualified.
Geoffrey S. Aaronson, age 48, has been a director of the Company since
December 1990. Mr. Aaronson is a shareholder of the law firm of Schantz,
Schatzman, Aaronson and Perlman, P.A. in Miami, Florida, and has been with such
firm since 1983. Mr. Aaronson's practice emphasizes corporate and business
financial reorganizations. Mr. Aaronson's term as a director of the Company is
set to expire at the Company's Annual Meeting of Stockholders to be held in
2000.
Harvey Jacobson, age 56, has been a director of the Company since
December 1990. Mr. Jacobson has been the Chief Executive Officer of Glencraft
Lingerie Corporation, a lingerie manufacturing company, since 1985. Mr.
Jacobson's term as a director of the Company was set to expire at the Company's
Annual Meeting of Stockholders that was to be held in 1998. Since the Company
did not hold an Annual Meeting of Stockholders in 1998, Mr. Jacobson's current
term as a director of the Company expires at the Company's 1999 Annual Meeting
of Stockholders and he has been nominated to serve a new term commencing as of
the date of the 1999 Annual Meeting of Stockholders and expiring on the date of
the Company's Annual Meeting of Stockholders to be held in 2001 and until his
successor has been elected and qualified.
Gregory McMahon, age 48, was elected as a director of the Company by
the holders of the Series A Preferred Stock in 1991. Mr. McMahon is a Certified
Public Accountant and has been a partner in the accounting firm of John McMahon
& Sons for more than 17 years. Mr. McMahon specializes in taxation and real
estate. Mr. McMahon's current term as a director of the Company is set to expire
at the Company's 1999 Annual Meeting of Stockholders and he has been nominated
to serve a new term commencing as of the date of the 1999 Annual Meeting of
Stockholders and expiring on the date of the Company's Annual Meeting of
Stockholders to be held in 2002 and until his successor has been elected and
qualified.
Joseph P. Otto, age 45, has been a director of the Company since
November 1996 and has served as a Vice President of the Company since it began
its operations in December 1990. Mr. Otto is also a Vice President of Concord.
Mr. Otto has been associated with Concord since 1984. Mr. Otto's term as a
director of the Company is set to expire at the Company's Annual Meeting of
Stockholders to be held in 2000.
2
<PAGE>
Harvey Shore, age 54, has served as Secretary and a Senior Vice
President of the Company since it began operations in December 1990. Mr. Shore
is also the Secretary and a Senior Vice President of Concord. Mr. Shore has been
associated with Concord since 1983. The Board of Directors of the Company has
nominated Mr. Shore for election to the Board by the holders of the Series A
Preferred Stock for a term commencing as of the date of the 1999 Annual Meeting
of Stockholders and expiring on the date of the Company's Annual Meeting of
Stockholders to be held in 2002 and until his successor has been elected and
qualified.
Patrick S. Kirse, age 30, was appointed Vice President of Accounting of
the Company in September 1997 and as Controller of the Company in October 1997.
Mr. Kirse had served as a non-executive Vice President of the Company from
February 1996 until September 1997 after joining the Company in March 1995. From
January 1992 until March 1995, Mr. Kirse, a Certified Public Accountant, was an
accountant with Deloitte & Touche LLP.
Leonard S. Mandor and Robert A. Mandor are brothers. There are no other
family relationships among any other directors or executive officers of the
Company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and persons who beneficially own greater than 10% of a
registered class of the Company's equity securities to file certain reports
("Section 16 Reports") with the Securities and Exchange Commission with respect
to ownership and changes in ownership of the Common Stock, the Series A
Preferred Stock and other equity securities of the Company. Based solely on the
Company's review of the Section 16 Reports furnished to the Company and written
representations from reporting persons, all Section 16(a) requirements
applicable to its officers, directors and greater than 10% beneficial owners
were complied with during the year ended December 31, 1998.
3
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth certain information concerning
compensation paid by the Company to its Chief Executive Officer and each of its
four most highly compensated executive officers (together, the "Named Executive
Officers") for services rendered in all capacities to the Company and its
subsidiaries for each of the Company's last three fiscal years.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual
Compensation Long-Term Compensation
------------------------------- -----------------------------------------
Awards Payouts
------ -------
Name and Salary Bonus Securities Underlying LTIP Payouts
Principal Position Year ($) ($) Options (#) ($)
- ------------------ ---- ----- ----- ----------- ---------
<S> <C> <C> <C> <C> <C>
Leonard S. Mandor............ 1998 425,427 191,442 - 334,730(1)
Chairman and Chief 1997 405,168 182,326 111,100(2) 409,482
Executive Officer 1996 385,875 - - -
Robert A. Mandor............... 1998 364,655 164,095 - 334,730(1)
President and Chief 1997 347,287 156,279 111,100(2) 409,482
Financial Officer 1996 330,750 - - -
Harvey Shore................... 1998 151,264 45,379 - -
Senior Vice President 1997 138,519 41,556 28,000(2) -
and Secretary 1996 137,200 20,580 - -
Joseph P. Otto................. 1998 183,750 62,295 - -
Vice President 1997 155,696 51,639 26,000(2) -
1996 137,200 24,380 - -
Patrick S. Kirse............... 1998 100,000 30,000 - -
Vice President and Controller 1997 84,404 5,000 - -
1996 71,416 - - -
</TABLE>
- ------------------------
(1) Amounts were accrued in 1997 based upon 9% of the cumulative adjusted
pre-tax profits of Milestone Asset Management, Inc. ("MAMI"), a wholly
owned subsidiary of the Company, and were paid on January 6, 1998.
(2) Includes both new grants of options to purchase shares of Common Stock
pursuant to the Company's 1993 Employee Stock Option Plan (the
"Employee Plan") and grants of options which were issued to such
executive officer upon the cancellation of outstanding options to
purchase shares of Common Stock.
Except as set forth above, no other annual compensation, restricted
stock awards, stock appreciation rights ("SARs") or other compensation (as
defined in Item 402 of Regulation S-K promulgated under the Exchange Act) were
awarded to, earned by or paid to, any of the Named Executive Officers during any
of the last three fiscal years.
Option Grants in Last Fiscal Year
No stock options were granted to the Named Executive Officers during
the year ended December 31, 1998 and the Company does not currently have any
plan pursuant to which SARs may be granted. However, the Board of Directors of
the Company has adopted, subject to stockholder approval at the Company's Annual
Meeting of Stockholder to be held in 1999, the Company's 1999 Stock Incentive
Plan (the "Stock Incentive Plan"), pursuant to which the Named Executive
Officers would be eligible to receive, among other things, awards of SARs from
the Company.
4
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table sets forth information with respect to the value at
December 31, 1998 of unexercised stock options held by the Named Executive
Officers. No options were exercised by any Named Executive Officer and no SARs
were granted by the Company during the year ended December 31, 1998.
<TABLE>
<CAPTION>
Value of Unexercised
Shares Number of Securities Underlying In-the-Money Options
Acquired On Value Unexercised Options at Fiscal Year-End at Fiscal Year-End(1)
Exercise Realized (#) ($)
Name (#) ($) Exercisable / Unexercisable Exercisable / Unexercisable
- ---- ----- ----- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
Leonard S. Mandor... 0 0 111,100/0 34,719/0
Robert A. Mandor.... 0 0 111,100/0 34,719/0
Harvey Shore........ 0 0 28,000/0 8,750/0
Joseph P. Otto...... 0 0 26,000/0 8,125/0
Patrick S. Kirse.... 0 0 0/0 0/0
- ----------------------
</TABLE>
(1) Based upon the last bid price for a share of the Common Stock of $0.8125 as
of the close of business on December 31, 1998, less the exercise price of
each such option.
Long-Term Incentive Plans - Awards in Last Fiscal Year
No awards were granted to the Named Executive Officers under the
Company's Long Term Incentive Plan ("LTIP") during the year ended December 31,
1998.
Compensation of Directors
Each of the Company's directors who is not an employee of the Company
receives an annual fee of $20,000 for serving as a director, and each member of
the Board of Directors' Compensation Committee (the "Compensation Committee"),
Related Party Transaction Committee (the "RPT Committee") and Audit Committee
(the "Audit Committee") receives a fee of $600 for each committee meeting
attended. The Compensation Committee, the RPT Committee and the Audit Committee
are all comprised of Messrs. Aaronson, Jacobson and McMahon. All directors are
also entitled to be reimbursed for their reasonable out-of-pocket expenses in
connection with all meetings of the Board of Directors and committee meetings
attended.
Under the Company's 1993 Nonemployee Director Stock Option Plan (the
"Director Plan"), each director who is not an employee of the Company is granted
options to purchase 2,500 shares of Common Stock on the director's first
election to the Board of Directors and, thereafter through December 28, 2003, is
granted options to purchase an additional 2,500 shares of Common Stock at the
time of each annual meeting of stockholders for his or her prior year of service
as a director. Generally, one-half of each such grant of 2,500 options becomes
exercisable on the first anniversary of the date of the grant and the other half
of such grant becomes exercisable on the second anniversary of the date of the
grant. The nonemployee directors were not granted any options during the year
ended December 31, 1998 because the Company did not hold an annual meeting of
stockholders during 1998.
If the Stock Incentive Plan is approved by the Company's stockholders,
each of the Company's directors would be eligible to receive awards from the
Company of stock options, SARs and/or shares of Common Stock, or any combination
thereof, as determined by the Compensation Committee, in addition to grants made
pursuant to the Director Plan.
5
<PAGE>
Employment Arrangements and Compensation Plans
During 1998, the Company had employment agreements with each of Leonard
S. Mandor, Robert A. Mandor, Joseph P. Otto and Harvey Shore which were entered
into in March 1993, effective as of January 1, 1993, each of which had initial
three year terms and could have been terminated on 30 days written notice by
either the Company or the executive officer. Pursuant to such agreements,
Leonard S. Mandor served as the Company's Chief Executive Officer, Robert A.
Mandor served as the Company's President and Chief Financial Officer, Harvey
Shore served as Senior Vice President and Secretary of the Company and Joseph P.
Otto served as a Vice President of the Company. In April 1996, the Compensation
Committee recommended, and the Board of Directors approved, three year
extensions, effective as of January 1, 1996, to each such employment agreement.
All of the agreements terminated at midnight on December 31, 1998. Pursuant to
the agreements, each of the individual executive officers named above were
entitled to receive annually a base salary and a discretionary bonus. The
initial annual base salary of each executive officer was subject to annual
increases at the discretion of the Board of Directors. In addition, the
agreements provided for certain benefits, including health care and life
insurance. In March 1995, the agreements between the Company and each of Harvey
Shore and Joseph P. Otto were amended to provide for six months' base salary as
severance pay in the event of the termination of their respective employment
with the Company without cause (as defined in such agreements). The Compensation
Committee recommended, and the Board of Directors approved, increases in the
base salary of each of Leonard S. Mandor, Robert A. Mandor, Harvey Shore and
Joseph P. Otto for the fiscal years ended December 31, 1994, 1995, 1996, 1997
and 1998. In addition, effective August 1, 1997, Joseph P. Otto's base salary
was increased in connection with an increased work load and greater
responsibilities assumed by Mr. Otto in connection with the resignation of
another executive officer. For the year ended December 31, 1998, the base
salaries of the above named executive officers were as follows: Leonard S.
Mandor -- $425,427, Robert A. Mandor -- $364,655, Harvey Shore -- $151,264 and
Joseph P. Otto -- $183,750.
In March 1993, the Company entered into separate severance agreements
(the "Severance Agreements") with each of Leonard S. Mandor, Robert A. Mandor,
Harvey Shore and Joseph P. Otto. The Severance Agreements, which were superceded
on January 1, 1999 by new employment agreements (as discussed below), provided
that if the applicable executive's employment was terminated by the Company
without "cause" or by the executive for "good reason" within three years of a
"change in control" of the Company, the Company would pay to the executive a
termination payment of up to three times the executive's annual salary plus
certain bonuses, would pay to the executive all accrued fringe benefits and
would continue to provide insurance coverage as in effect on the date of
termination. For purposes of the Severance Agreements, "cause" included certain
misconduct by the executive, conviction of the executive of certain felonies and
neglect of the executive's duties; "good reason" included a breach by the
Company of the executive's employment agreement or severance agreement, removal
of the executive from any positions without cause or a significant adverse
change in the executive's working conditions or status; and "change in control"
included certain acquisitions of voting securities giving a person 20% or more
of the combined voting power of the Company, certain changes in the composition
of the Company's Board of Directors, certain mergers, consolidations,
reorganizations or dispositions of assets or the liquidation or dissolution of
the Company.
Effective as of January 1, 1999, the Company entered into new
employment agreements with each of Leonard S. Mandor, Robert A. Mandor, Harvey
Shore, Joseph P. Otto and Patrick S. Kirse. Such agreements have an initial
three year term which will be automatically extended for additional consecutive
one year periods unless written notice is given by either party to the other no
later than 60 days before the expiration of the term. Pursuant to such
agreements, Leonard S. Mandor will continue to serve as the Chief Executive
Officer of the Company, Robert A. Mandor will continue to serve as the President
and Chief Financial Officer of the Company, Harvey Shore will continue to serve
as Secretary and a Senior Vice President of the Company, Joseph P. Otto will
continue to serve as a Vice President of the Company and Patrick S. Kirse will
continue to serve as a Vice President of the Company. Under each such agreement,
the executive is provided an annual base salary which is subject to annual
adjustments at the discretion of the Board of Directors of the Company (or a
committee thereof), but which may not be reduced to less than the base salary of
such executive for the initial year of his agreement. Pursuant to their
respective agreement, the initial base salary of each of the executive officers
is as follows: Leonard S. Mandor -- $446,698, Robert A. Mandor -- $382,887,
Harvey Shore -- $158,826, Joseph P. Otto -- $192,938 and Patrick S. Kirse --
$105,000. Effective as of April 19, 1999, the employment agreements of Robert A.
Mandor and Harvey Shore were amended to increase each such executive's base
salary by $25,000 and $18,358.34, respectively, in connection with an increased
work load and greater responsibilities. In addition, pursuant to their
respective
6
<PAGE>
agreement, each executive officer may be given an annual bonus. Bonuses awarded
to Messrs. Shore, Otto and Kirse pursuant to each executive's agreement are
subject to the sole discretion of the Board of Directors of the Company and are
in addition to any bonuses awarded to them under the Management Incentive Plan
(the "Management Incentive Plan"), as adopted by the Compensation Committee of
the Company on May 24, 1994, and bonuses payable to Leonard S. Mandor and Robert
A. Mandor are to be paid in accordance with the guidelines set forth in the
Management Incentive Plan and/or as otherwise determined by the Board of
Directors of the Company in its discretion. The employment agreements also
provide each executive officer with certain benefits, including a term life
insurance policy generally providing for a benefit of no less than $200,000 and
eligibility to participate in all benefit plans established by the Company
(including, but not limited to, medical, bonus and stock option programs). If an
executive's employment is terminated by the Company without "cause" or in
connection with, or as a result of, a "change of control" within three years of
such "change in control," including the executive's voluntary termination of his
employment with the Company within 60 days of a "change in control" if there is
a material change in the executive's working condition or status, the Company
would be obligated to pay to the executive a termination payment of up to three
times the executive's annual salary, then in effect, plus certain bonuses, and
would be obligated to pay to the executive all fringe benefits accrued at the
time of termination. For purposes of the employment agreements, "cause" includes
certain misconduct by the executive, conviction of the executive of a felony and
neglect of the executive's duties and "change of control" includes certain
acquisitions of voting securities giving a person 20% or more of the combined
voting power of the Company, certain changes in the composition of the Company's
Board of Directors, certain mergers or other business combinations, cash tender
or exchange offers, dispositions of assets or the liquidation or dissolution of
the Company.
In February 1994, the Compensation Committee recommended, and the Board
of Directors of the Company approved, the creation of (i) the Management
Incentive Plan under which annual bonuses may be awarded to the Company's
executive officers pursuant to a formula based on (a) the Company's adjusted
pre-tax net profit for each year compared to an adjusted pre-tax net profit
target that is established for that year by the Compensation Committee, (b) the
performance of the Common Stock and the Series A Preferred Stock for that year
and (c) for the Company's executive officers other than the two most senior
executive officers (Leonard S. Mandor and Robert A. Mandor) the achievement of
certain individual performance objectives that were established for that year by
the Compensation Committee and (ii) the LTIP providing for a cash bonus to each
of Leonard S. Mandor and Robert A. Mandor of 9% of the adjusted pre-tax net
profits of MAMI in 1994, 1995 and 1996, which was subsequently extended to cover
1997, 1998, 1999 and 2000. Based on the achievement of certain Company
performance objectives, the Compensation Committee recommended the award of, and
the Board of Directors approved and awarded to Leonard S. Mandor and Robert A.
Mandor, bonuses for 1998 of $191,442 and $164,095, respectively, under the
Management Incentive Plan. In addition, on January 6, 1998, each of Leonard S.
Mandor and Robert A. Mandor were paid $334,730, representing bonuses accrued to
them under the LTIP for 1997. In January 1999, pursuant to the Management
Incentive Plan, Harvey Shore, Joseph P. Otto and Patrick S. Kirse were paid
bonuses for 1998 of $45,379, $62,295 and $30,000, respectively.
Compensation Committee Interlocks And Insider Participation
During the fiscal year ended December 31, 1998, the Compensation
Committee of the Board of Directors of the Company consisted of Messrs.
Aaronson, Jacobson and McMahon. Mr. Aaronson is a shareholder in the law firm of
Schantz, Schatzman, Aaronson & Perlman, P.A., which firm performed various legal
services for the Company during the year ended December 31, 1998. Mr. McMahon is
a partner in the independent certified public accounting firm of John McMahon &
Sons, which firm performed accounting, tax and other general business advisory
services for the Company and its subsidiaries during the year ended December 31,
1998 and which firm derives a substantial portion of its revenues from the
services it provides to the Company, its subsidiaries and affiliates. The
Company paid $32,500 to John McMahon & Sons for services provided to the Company
during the year ended December 31, 1998. Except as set forth above, there were
no interlocks or insider participants, as defined in Item 402 of Regulation S-K
promulgated under the proxy regulations of the Exchange Act, during the fiscal
year ended December 31, 1998.
7
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of securities of the Company as of the close of business on
April 26, 1999 by (i) each person known by the Company to beneficially own more
than 5% of any class of the Company's voting securities, (ii) each director and
nominee for director of the Company, (iii) the Company's Chief Executive Officer
and each of the Company's four most highly compensated executive officers who
beneficially owns shares of Common Stock or Series A Preferred Stock and (iv)
all directors, nominees for director and executive officers of the Company as a
group. The information in the table reflects the current conversion ratio for
the Series A Preferred Stock (which is convertible at any time, for no
consideration, into Common Stock) of 0.91 shares of Series A Preferred Stock to
be surrendered for each share of Common Stock to be received upon conversion.
The information in the table also gives effect to the Company's cancellation, as
of the close of business on March 5, 1999, of 2,983,284 shares of Series A
Preferred Stock in connection with the settlement of the Winston Actions.
Except as noted below, each person has sole voting and investment power
with respect to the shares beneficially owned by such person. The Common Stock
is the only voting security of the Company, except that holders of the Series A
Preferred Stock currently have the right to elect two of the Company's
directors. A person is deemed to beneficially own a security if he or she has or
shares the power to vote or dispose of the security or has the right to acquire
it within 60 days.
<TABLE>
<CAPTION>
Common Stock Series A Preferred Stock
------------------------------- ----------------------------------
Percent Percent
Name of Beneficial Owner Number of Shares of Class Number of Shares of Class
- ------------------------- ----------------- -------- ----------------- --------
<S> <C> <C> <C> <C>
Robert A. Mandor(1)................. 3,066,566(2) 70.2% 4,348(3) 26.5%
Leonard S. Mandor(1) ............... 3,063,945(4) 70.2 2,500(5) 15.2
Concord Assets Group, Inc.(1)....... 2,903,845(6) 68.3 2,500 15.2
Castle Plaza, Inc.(1)............... 2,260,564 53.2 - -
Concord Milestone, Incorporated(1).. 274,910(7) 6.5 - -
Concord Fund Incorporated(1)........ 274,910(8) 6.5 - -
George J. D'Angelo(9)............... 229,000 5.4 - -
Harvey J. Shore..................... 29,180(10) * - -
Joseph P. Otto...................... 26,463(11) * 326(12) 2.0
Gregory McMahon..................... 12,610(13) * 100 *
Geoffrey S. Aaronson................ 12,500(14) * - -
Harvey Jacobson..................... 12,500(14) * - -
All directors, nominees for director,
and executive officers as a group
(8 persons)(15)..................... 3,267,169(16) 71.5 4,774 29.1
</TABLE>
- ------------------
* Less than 1%
(1) The address of each of the indicated stockholders is c/o Milestone
Properties, Inc., 150 E. Palmetto Park Road, 4th Floor, Boca Raton, Florida
33432.
(2) Includes (a) 111,100 shares of Common Stock subject to currently
exercisable options; (b) 2,031 shares of Common Stock issuable upon the
conversion of 1,848 shares of Series A Preferred Stock; (c) 590 shares of
Common Stock owned directly; (d) 2,903,845 shares of Common Stock
beneficially owned by Concord (see footnote (6)); and (e) 49,000 shares of
Common Stock owned by Mill Neck Associates. Mill Neck Associates is a
general partnership in which Leonard S. Mandor and Robert A. Mandor each
own a 50% general partnership interest. Therefore, each of them has the
power to vote and dispose of the 49,000 shares and, as a result of such
power, are each deemed to own
(footnotes continued on next page)
8
<PAGE>
(footnotes continued from previous page)
beneficially all of such 49,000 shares. Robert A. Mandor is an officer,
director and stockholder of Concord and, therefore, may be deemed to be a
beneficial owner of the shares of Common Stock beneficially owned by
Concord. Robert A. Mandor disclaims beneficial ownership of the shares of
Common Stock beneficially owned by Concord pursuant to Rule 13d-4
promulgated under the Exchange Act, by virtue of the ownership by Leonard
S. Mandor of more than a majority of the outstanding capital stock of
Concord, thereby giving Leonard S. Mandor the ultimate power to control the
voting and disposition of the shares of Common Stock beneficially owned by
Concord.
(3) Includes (a) 1,521 shares of Series A Preferred Stock held in the name of
American Century Co., as custodian for Robert A. Mandor's individual
retirement account, (b) 218 shares of Series A Preferred Stock held in the
name of Resources Trust Corp., as custodian for Robert A. Mandor's
individual retirement account, (c) 109 shares of Series A Preferred Stock
held in the name of Resources Trust Corp., as custodian for Elizabeth
Mandor's individual retirement account and (d) 2,500 shares of Series A
Preferred Stock owned by Concord. Elizabeth Mandor is Robert A. Mandor's
wife.
(4) Includes (a) 111,100 shares of Common Stock subject to currently
exercisable options; (b) 2,903,845 shares of Common Stock beneficially
owned by Concord (see footnote (6)); and (c) 49,000 shares of Common Stock
owned by Mill Neck Associates (see footnote (2)).
(5) Represents 2,500 shares of Series A Preferred Stock owned by Concord.
(6) Includes (a) 274,910 shares of Common Stock held in the name of Concord
Associates and beneficially owned by Concord Milestone, Incorporated
("CMI"), a wholly owned subsidiary of Concord (see footnote (7)); (b)
81,534 shares of Common Stock owned by Concord Milestone Partners, L.P.,
whose general partner, Concord Milestone Income II, Inc., is a wholly owned
subsidiary of Concord; (c) 2,747 shares of Common Stock which Concord has
the right to acquire upon conversion of 2,500 shares of the Series A
Preferred Stock directly owned by Concord; (d) 2,260,564 shares of Common
Stock owned by Castle Plaza, Inc. ("CPI"), a wholly owned subsidiary of
Concord; (e) 163,291 shares of Common Stock owned by Mountain View Mall,
Inc., a wholly owned subsidiary of Concord; and (f) 120,799 shares of
Common Stock owned by Concord Income Realty Partners VI, L.P., a limited
partnership, the sole general partner and sole limited partner of which are
wholly owned subsidiaries of Concord.
(7) Consists of the 274,910 shares of Common Stock beneficially owned by
Concord Fund Incorporated ("CFI"). CFI is a wholly owned subsidiary of CMI.
(8) Owned as successor to Concord Associates, the registered owner of such
shares.
(9) Based on information contained in a Schedule 13D, as amended and filed with
the Securities and Exchange Commission on November 9, 1998 by George J.
D'Angelo. Mr. George D'Angelo's address is 14502 W. Dale Mabry, Suite 305,
Tampa, Florida 33618.
(10) Includes 1,180 shares of Common Stock owned directly and 28,000 shares of
Common Stock subject to currently exercisable options.
(11) Includes (a) 358 shares of Common Stock issuable upon conversion of 326
shares of Series A Preferred Stock, (b) 26,000 shares of Common Stock
subject to currently exercisable options and (c) 105 shares of Common Stock
owned directly.
(12) These shares are held in the name of Resources Trust Corp., as custodian
for Joseph P. Otto's individual retirement account.
(13) Includes (a) 110 shares of Common Stock issuable upon conversion of 100
shares of Series A Preferred Stock and (b) 12,500 shares of Common Stock
subject to options, 11,250 of which are currently exercisable and 1,250 of
which will become exercisable within 60 days.
(14) Consists of 12,500 shares of Common Stock subject to options, 11,250 of
which are currently exercisable and 1,250 of which will become exercisable
within 60 days.
(15) The shares of Common Stock beneficially owned by Concord (see footnote
(6)), and Mill Neck Associates (see footnote (2)) may be deemed to be
beneficially owned by both Leonard S. Mandor and Robert A. Mandor. Such
shares, however, are only included once in the computation of shares
beneficially owned by directors, nominees for director and executive
officers as a group.
(16) Includes (a) 309,950 shares of Common Stock subject to currently
exercisable options; (b) 3,750 shares of Common Stock subject to options
which will become exercisable within 60 days and (c) 5,246 shares of Common
Stock issuable upon the conversion of 4,774 shares of Series A Preferred
Stock.
9
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company, certain past and present members of its Board of Directors
and executive officers, and Concord were named as defendants in the Winston
Actions, which were commenced in 1996. On August 5, 1998, the counsel for the
named plaintiff in the Winston Actions and the counsel for the defendants
entered into a Stipulation and Agreement of Settlement (the "Settlement
Agreement") which memorialized the terms of a settlement (the "Settlement") of
the Winston Actions. On January 28, 1999, the Delaware Court approved the
Settlement which approval became final effective as of the close of business on
March 5, 1999. In connection with the Winston Actions, the Company retained
counsel for all of the defendants, including, without limitation, Leonard S.
Mandor, Robert A. Mandor, Harvey Jacobson, Gregory McMahon and Geoffrey Aaronson
(each of whom is a director and/or officer of the Company) and assumed
responsibility for the payment of all legal fees incurred by such persons in
connection with the Winston Actions and the Settlement.
In December 1990, the Company entered into an executive management
agreement, as amended (the "Executive Management Agreement"), with Concord,
pursuant to which the Company provides management services and assists Concord
in the management of certain properties (the "Concord Properties") owned by
Concord and its affiliates, including limited partnerships controlled by Concord
or affiliates of Concord. Pursuant to the Executive Management Agreement, which
is renewable annually, the Company makes available to Concord certain personnel
of the Company to provide management services (the "Management Services") to
Concord in connection with which Concord is required to reimburse the Company
based upon the hourly wage rate of such personnel, and the Company provides
Concord with office space and general office services. The Management Services
include overseeing all financing, acquisitions, dispositions and operational
functions of the relevant Concord Properties. The operational functions of the
Management Services include procuring and maintaining insurance, leasing,
supervising and administering expansion and maintenance projects, and performing
all other necessary services for maintaining the Concord Properties involved.
Under the Executive Management Agreement, affiliates of Concord engaged in real
estate brokerage activities may receive brokerage or leasing commissions in
connection with the purchase, sale or leasing of properties by the Company. In
March 1995, the Executive Management Agreement was amended to reduce by 50% the
quarterly fee paid by Concord to the Company for Management Services to its
present fee of $12,500 and to reduce by 50% the amount reimbursed by Concord for
office space and general office services. This reduction was occasioned by a
significant decrease in the Management Services. Pursuant to the Executive
Management Agreement, Concord owes the Company $67,491 and $163,188 for expenses
incurred by the Company in 1998 and 1997, respectively. In addition, Concord
owes the Company $76,576 and $69,910 for various services provided by the
Company to Concord in 1998 and 1997, respectively, pursuant to the Executive
Management Agreement. Leonard S. Mandor and Robert A. Mandor are the only
shareholders, the only directors and the Chief Executive Officer and the
President and Chief Financial Officer, respectively, of Concord. Harvey Shore is
the Secretary and a Senior Vice President of Concord and Joseph P. Otto is a
Vice President of Concord. Leonard S. Mandor and Robert A. Mandor beneficially
own in the aggregate all of the outstanding common stock of Concord.
Milestone Properties Management, Inc. ("MPMI"), one of the Company's
wholly owned subsidiaries, is a party to a property management agreement (the
"Property Management Agreement") with Concord under which MPMI manages certain
properties owned by Concord and its affiliates, including limited partnerships
controlled by Concord or affiliates of Concord. Pursuant to the Property
Management Agreement, MPMI received $40,437 in termination fees and incurred
$10,725 of accelerated amortization in connection with the termination of
management agreements for the year ended December 31, 1998, resulting from the
sale or foreclosure of properties owned by limited partnerships syndicated by
Concord. As of December 31, 1998, MPMI performed property management and leasing
services for seven of Concord's shopping centers pursuant to the Property
Management Agreement.
The Company's obligations as master lessee under 23 leases on
commercial real estate properties are guaranteed by Concord. The Company has no
obligation to indemnify Concord with respect to such guarantees.
See the section "Compensation Committee Interlocks And Insider
Participation" of this amendment for a discussion of certain other relationships
and related transactions between the Company and each of Geoffrey S. Aaronson
and Gregory McMahon, directors of the Company.
10
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
MILESTONE PROPERTIES, INC.
By /s/ Robert A. Mandor
--------------------------------------
Robert A. Mandor, President and
Chief Financial Officer
April 30, 1999
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
99.01 Consent of Harvey Shore
<PAGE>
Exhibit 99.01
Board of Directors
Milestone Properties, Inc.
Gentlemen:
I hereby consent to my being named as a nominee for director of
Milestone Properties, Inc. (the "Company") in the Company's Form 10-K/A and to
serve as a director of the Company if so elected.
Very truly yours,
/s/ Harvey Shore
----------------
Harvey Shore
April 29, 1999
