SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant |X|
Filed by a party other than the registrant | |
Check the appropriate box:
|X| Preliminary proxy statement
| | Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
| | Definitive proxy statement
| | Definitive additional materials
| | Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PS BUSINESS PARKS, INC.
-----------------------
(Name of Registrant as Specified in Its Charter)
_____________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
____________________________
(2) Aggregate number of securities to which transaction applies:
____________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.
____________________________
(4) Proposed maximum aggregate value of transaction:
____________________________
(5) Total fee paid:
____________________________
| | Fee paid previously with preliminary materials.
| | Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
____________________________
(2) Form, schedule or registration statement no.:
____________________________
(3) Filing party:
____________________________
(4) Date filed:
____________________________
<PAGE>
PRELIMINARY COPY
PS BUSINESS PARKS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 1999
The Annual Meeting of Shareholders of PS Business Parks, Inc. a
California corporation (the Company"), will be held at [the Red Lion Hotel, 100
West Glenoaks Boulevard, Glendale, California], on May 10, 1999, at the hour of
[1:00 p.m. Los Angeles] time, for the following purposes:
1. To elect directors for the ensuing year.
2. To consider and vote on an amendment to the Company's articles of
incorporation to increase the ownership limitation applicable to the Company's
Common Stock from 2% to 7% of the outstanding Common Stock.
3. To consider and act upon such other matters as may properly come
before the meeting or any adjournment of the meeting.
The Board of Directors has determined that only holders of record of
Common Stock at the close of business on March 15, 1999 will be entitled to
receive notice of, and to vote at, the meeting or any adjournment of the
meeting.
Please mark your vote on the enclosed Proxy, then date, sign and
promptly mail the Proxy in the stamped return envelope included with these
materials.
You are cordially invited to attend the meeting in person. If you do
attend and you have already signed and returned the Proxy, the powers of the
proxy holders named in the Proxy will be suspended if you desire to vote in
person. Therefore, whether or not you presently intend to attend the meeting in
person, you are urged to mark your vote on the Proxy, date, sign and return it.
By Order of the Board of Directors
JACK E. CORRIGAN, Secretary
Glendale, California
March ___, 1999
<PAGE>
PRELIMINARY COPY
PS BUSINESS PARKS, INC.
701 Western Avenue
Glendale, California 91201-2397
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 10, 1999
GENERAL
This Proxy Statement (first mailed to shareholders on or about April
___, 1999) is furnished in connection with the solicitation by the Board of
Directors of PS Business Parks, Inc. (the "Company") of proxies, including the
enclosed Proxy, for use at the Company's Annual Meeting of Shareholders to be
held at [the Red Lion Hotel, 100 West Glenoaks Boulevard, Glendale, California]
at [1:00 p.m. Los Angeles] time on May 10, 1999 or at any adjournment of the
meeting. The purposes of the meeting are (1) to elect seven directors of the
Company, (2) to consider and vote on an amendment to the Company's articles of
incorporation to increase the ownership limitation applicable to the Company's
Common Stock from 2% to 7% of the outstanding Common Stock and (3) to consider
such other business as may properly be brought before the meeting or any
adjournment of the meeting.
Shares of Common Stock represented by a Proxy in the accompanying form,
if the Proxy is properly executed and is received by the Company before the
voting, will be voted in the manner specified on the Proxy. If no specification
is made with respect to the election of directors or the amendment to the
articles of incorporation, the shares will be voted FOR the election as
directors of the nominees named hereinafter and FOR approval of the amendment to
the articles of incorporation. The persons designated as proxies reserve full
discretion to cast votes for other persons if any of the nominees become
unavailable to serve. A Proxy is revocable by delivering a subsequently signed
and dated Proxy or other written notice to the Secretary of the Company at any
time before its exercise. A Proxy may also be revoked if the person executing
the Proxy is present at the meeting and chooses to vote in person.
In a March 17, 1998 merger (the "AOPP Merger") of American Office Park
Properties, Inc. ("AOPP") with and into the Company, the Company acquired the
commercial property business previously operated by AOPP and the Company changed
its name from "Public Storage Properties XI, Inc." to "PS Business Parks, Inc."
As a result of the AOPP Merger, the Company became the sole general partner of
PS Business Parks, L.P., through which the Company conducts most of its
activities.
QUORUM AND VOTING
The presence at the meeting in person or by proxy of the holders of a
majority of the outstanding shares of the Common Stock is necessary to
constitute a quorum for the transaction of business.
Only holders of record of Common Stock at the close of business on March
15, 1999 (the "Record Date") will be entitled to vote at the meeting, or at any
adjournment of the meeting. On the Record Date, the Company had 23,637,410
shares of Common Stock issued and outstanding.
With respect to the election of directors, each holder of Common Stock
on the Record Date is entitled to cast as many votes as there are directors to
be elected multiplied by the number of shares registered in his name on the
Record Date. The holder may cumulate his votes for directors by casting all of
his votes for one candidate or by distributing his votes among as many
candidates as he chooses. The seven candidates who receive the most votes will
be elected directors of the Company. In voting upon the amendment to the
articles of incorporation and any other proposal that might properly come before
the meeting, each holder of Common Stock is entitled to one vote for each share
registered in his name.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Seven directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting of Shareholders, to hold office until the next
annual meeting and until their successors are elected and qualified. When the
accompanying Proxy is properly executed and returned to the Company before the
voting, the persons named in the Proxy will vote the shares represented by the
Proxy as indicated on the Proxy. If any nominee below becomes unavailable for
any reason or if any vacancy on the Company's Board of Directors occurs before
the election, the shares represented by any Proxy voting for that nominee will
be voted for the person, if any, designated by the Board of Directors to replace
the nominee or to fill the vacancy on the Board. However, the Board of Directors
has no reason to believe that any nominee will be unavailable or that any
vacancy on the Board of Directors will occur. The following persons are nominees
for director:
Name Age Director Since
---- --- --------------
Ronald L. Havner, Jr. 41 1998
Harvey Lenkin 62 1998
Vern O. Curtis 64 1990
Arthur M. Friedman 62 1998
James H. Kropp 49 1998
Alan K. Pribble 56 1998
Jack D. Steele 75 1990
Ronald L. Havner, Jr., a certified public accountant, became a director
of the Company on March 16, 1998 and Chairman of the Company on March 17, 1998.
Mr. Havner has been President and Chief Executive Officer of the Company or AOPP
since December 1996. He was Senior Vice President and Chief Financial Officer of
Public Storage, Inc. ("PSI"), an affiliated REIT, and Vice President of the
Company and certain other REITs affiliated with PSI until December 1996.
Harvey Lenkin became a director of the Company on March 16, 1998 and was
President of the Company from its inception in 1990 until March 16, 1998. Mr.
Lenkin has been employed by PSI for 20 years and has been President and a
director of PSI since November 1991. He was a director of AOPP from December
1997 until March 17, 1998. From 1989-90 until the respective dates of merger,
Mr. Lenkin was President of 18 affiliated REITs that were merged into PSI
between September 1994 and May 1998 (the "Merged Public Storage REITs"), and he
was also a director of one of the Merged Public Storage REITs from 1989 until
June 1996. Mr. Lenkin is a member of the Board of Governors of the National
Association of Real Estate Investment Trusts (NAREIT).
Vern O. Curtis, Chairman of the Audit Committee, is a private investor.
Mr. Curtis has been a director of the Company since its inception in 1990. Mr.
Curtis is also a director of the Pimco Funds, Pimco Commercial Mortgage
Securities Trust, Inc. and Fresh Choice, Inc. From 1989-90 until the respective
dates of merger, he was a director of the Merged Public Storage REITs. Mr.
Curtis was Dean of Business School of Chapman College from 1988 to 1990 and
President and Chief Executive Officer of Denny's, Inc. from 1980 to 1987.
Arthur M. Friedman, a member of the Audit Committee, became a director
of the Company on March 16, 1998. Mr. Friedman, a certified public accountant,
has been an independent business and tax consultant since September 1995. He was
a partner of Arthur Andersen from 1968 until August 1995. During his 38-year
career in public accounting, he specialized in tax consultation. He was a member
of the Andersen Board of Partners from 1980-1988.
James H. Kropp became a director of the Company on March 16, 1998. Mr.
Kropp has been Director of Investment Management and Banking of Christopher Weil
& Company, Inc. ("CWC"), a securities broker-dealer and registered investment
adviser, since April 1995. CWC has rendered, and is expected to continue to
render, financial advisory and securities brokerage services for PSI and its
2
<PAGE>
affiliates. Mr. Kropp was a director of AOPP from December 1996 until December
1997. From July 1994 to November 1994, he was Executive Vice President and Chief
Financial Officer of Hospitality Investment Trust, a REIT. From 1989 to July
1994, he was Managing Director of MECA Associates USA, a real estate advisory
and asset management company serving institutional property owners.
Alan K. Pribble became a director of the Company on March 16, 1998. He
has been an independent business consultant since June 1997. Mr. Pribble was
employed by Wells Fargo Bank, N.A. for 30 years until June 1997. He was a Senior
Vice President of Wells Fargo from 1984 until June 1997. In 1992, Mr. Pribble
opened a commercial finance division for Wells Fargo and was involved in its
operations until June 1997. From 1988 until 1992, he was a Senior Vice President
and Regional Manager, and from 1984 until 1988, Mr. Pribble was a Senior Credit
Officer, for Wells Fargo.
Jack D. Steele, a member of the Audit Committee, has been a director of
the Company since its inception in 1990. Mr. Steele is also a director of M.C.
Gill and CRG Compensation Resource Group. Mr. Steele is a business consultant.
From 1989-90 until the respective dates of merger, he was a director of the
Merged Public Storage REITs. Mr. Steele was Chairman - Board Services of
Korn/Ferry International from 1986 to 1988 and Dean of School of Business and
Professor at the University of Southern California from 1975 to 1986.
Directors and Committee Meetings
- --------------------------------
The Board of Directors held eight meetings and the Audit Committee held
three meetings during 1998. Each of the directors, except for B. Wayne Hughes
(who was a director of the Company until March 16, 1998), attended at least 75%
of the meetings held by the Board of Directors or, if a member of a committee of
the Board of Directors, held by both the Board of Directors and all committees
of the Board of Directors on which he served, during 1998 (during the period
that he served). The primary functions of the Audit Committee are to meet with
the Company's outside auditors, to conduct a pre-audit review of the audit
engagement, to conduct a post-audit review of the results of the audit, to
monitor the adequacy of internal financial controls of the Company, to review
the independence of the outside auditors, to make recommendations to the Board
of Directors regarding the appointment and retention of auditors and to
administer the Company's stock option and incentive plan.
The Company does not have a compensation committee. The Company has a
stock option and incentive plan, which is administered by the Audit Committee.
The Company does not have a nominating committee. Pursuant to the terms of an
Agreement Among Shareholders and Company dated as of December 23, 1997, as
amended, among Acquiport Two Corporation ("Acquiport"), AOPP, American Office
Park Properties, L.P. and PSI (which agreement was assumed by the Company in the
AOPP Merger), the nominees for the Board of Directors (which constitute the
current Board of Directors) consist of two nominees of PSI (currently Ronald L.
Havner, Jr. and Harvey Lenkin) and five independent directors mutually
acceptable to PSI and Acquiport (currently Vern O. Curtis, Arthur M. Friedman,
James H. Kropp, Alan K. Pribble and Jack D. Steele). PSI and Acquiport have
agreed to vote their respective shares of the Company's Common Stock to support
such nominees to the Board. This voting agreement expires at the later of the
following dates: (1) when PSI's interest in the Company or Acquiport's interest
in the Company is less than 20%, assuming conversion of all limited partnership
interests in PS Business Parks, L.P. into shares of the Company's Common Stock
or (2) December 24, 2001.
Security Ownership of Certain Beneficial Owners
- -----------------------------------------------
The following table sets forth information as of the dates indicated
with respect to persons known to the Company to be the beneficial owners of more
than 5% of the outstanding shares of the Company's Common Stock:
3
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned
----------------------------------
Number Percent
Name and Address of Shares of Class
---------------- --------- --------
<S> <C> <C>
Public Storage, Inc. ("PSI"), 5,254,273 22.2%
PS Texas Holdings, Ltd.,
PS GPT Properties, Inc.
701 Western Avenue,
Glendale, California 91201-2397 (1)
Acquiport Two Corporation ("Acquiport") 6,110,265 25.8%
c/o Heitman Capital Management Corporation
180 North LaSalle Street
Chicago, Illinois 60601,
New York State Common Retirement Fund
633 Third Avenue, 31st Floor
New York, New York 10017-6754 (2)
LaSalle Advisors Capital Management, Inc. 2,318,648 9.8%
ABKB/LaSalle Securities Limited Partnership
200 East Randolph Drive
Chicago, Illinois 60601 (3)
</TABLE>
- ----------------
(1) This information is as of March ___, 1999. The reporting persons listed
above have filed a joint Schedule 13D, amended as of September 3, 1998.
The 5,254,273 shares of Common Stock beneficially owned by the reporting
persons include (i) 4,987,567 shares as to which PSI has sole voting and
dispositive power and (ii) 266,706 shares held of record by PS Texas
Holdings, Ltd., a Texas limited partnership, as to which (a) PS GPT
Properties, Inc., the sole general partner of PS Texas Holdings, Ltd. and
a wholly-owned subsidiary of PSI, and (b) PSI, share voting and
dispositive power.
The 5,254,273 shares of Common Stock in the above table does not include
7,305,355 units of limited partnership interest in PS Business Parks, L.P.
("Units") held by PSI and affiliated partnerships which (pursuant to the
terms of the agreement of limited partnership of PS Business Parks, L.P.)
are redeemable for cash or, at the Company's election, for shares of the
Company's Common Stock on a one-for-one basis. Upon conversion of such
Units to Common Stock, PSI and its affiliated partnerships would own 40.6%
of the Common Stock.
(2) This information is as of February 28, 1999. The reporting persons
listed above have filed a joint Schedule 13D, amended as of May 21, 1998.
The 6,110,265 shares of Common Stock beneficially owned by the reporting
persons are held of record by Acquiport. New York State Common Retirement
Fund, as the sole stockholder of Acquiport, shares voting and dispositive
power with respect to the 6,110,265 shares.
See "Directors and Committee Meetings" above for a description of the
agreement of PSI and Acquiport to vote their respective shares of the
Company's Common Stock to support their nominees for the Board of
Directors.
(3) This information is as of December 31, 1998 and is based on a Schedule
13G filed by LaSalle Advisors Capital Management, Inc. and ABKB/LaSalle
Securities Limited Partnership. As of December 31, 1998, LaSalle Advisors
Capital Management, Inc. beneficially owned 254,000 shares of Common Stock
and ABKB/LaSalle Securities Limited Partnership owned 2,064,648 shares of
Common Stock. La/Salle Advisors Capital Management, Inc. has sole voting
power and sole dispositive power with respect to 69,000 shares, shared
voting power with respect to 13,500 shares and shared dispositive power
with respect to 185,000 shares. ABKB/LaSalle Securities Limited
Partnership has sole voting power with respect to 906,374 shares, shared
voting power with respect to 264,300 shares, sole dispositive power with
respect to 898,674 shares and shared dispositive power with respect to
1,165,974 shares.
4
<PAGE>
Security Ownership of Management
- --------------------------------
The following table sets forth information as of March ___, 1999
concerning the beneficial ownership of Common Stock of each director of the
Company, the Company's Chief Executive Officer, the three other persons who were
executive officers of the Company on December 31, 1998 and all directors and
executive officers as a group:
<TABLE>
<CAPTION>
Shares of Common Stock:
Beneficially Owned(1)
Shares Subject to Options(2)
-------------------------------------
Name Number of Shares Percent
---- ---------------- -------
<S> <C> <C>
Ronald L. Havner, Jr. 71,948(1)(3) 0.3%
75,490(2) 0.3%
------- ----
147,438 0.6%
Harvey Lenkin 915(1)(4) *
9,657(2) *
------- ----
10,572 *
Vern O. Curtis 2,000(1) *
1,666(2) *
------- ----
3,666 *
Arthur M. Friedman 1,000(1)(5) *
1,666(2) *
------- ----
2,666 *
James H. Kropp 9,791(1)(6) *
1,666(2) *
------- ----
11,457 *
Alan K. Pribble 3,000(1) *
1,666(2) *
------- ----
4,666 *
Jack D. Steele 2,100(1)(7) *
1,666(2) *
------- ----
3,766 *
Mary Jayne Howard 60(1)(8) *
48,630(2) 0.2%
------- ----
48,690 0.2%
Jack E. Corrigan 1,600(1)(9) *
13,333(2) *
------- ----
14,933 *
J. Michael Lynch -- --
13,333(2) *
------- ----
13,333 *
<PAGE>
All Directors and Executive Officers as a Group 92,414(1)(3)(4)(5)
(10 persons) (6)(7)(8)(9) 0.4%
168,773(2) 0.7%
------- ----
261,187 1.1%
</TABLE>
- ---------------
* Less than 0.1%
5
<PAGE>
(1) Shares of Common Stock beneficially owned as of March ___, 1999. Except
as otherwise indicated and subject to applicable community property and
similar statutes, the persons listed as beneficial owners of the shares
have sole voting and investment power with respect to such shares.
(2) Represents vested portion as of March ___, 1999, and portion of which
will be vested within 60 days of March ___, 1999, of shares of Common
Stock subject to options held by the named individuals or the group
pursuant to the Company's stock option and incentive plan.
(3) Includes 500 shares and 500 shares held by custodians of IRAs for Mr.
Havner and Mrs. Havner as to which each has investment power.
(4) Includes 116 shares held by a custodian of an IRA for Mr. Lenkin as to
which he has investment power, 87 shares held by Mrs. Lenkin as to which
she has investment power and 120 shares and 62 shares held by Mrs. Lenkin
as custodian for two sons as to which she has investment power.
(5) Shares held by Mr. Friedman as trustee of Friedman Living Trust.
(6) Includes 100 shares and 100 shares held by Mr. Kropp as custodian for a
son and a daughter as to which he has investment power, 700 shares held by
CWC Good Company Portfolio, a general partnership of which Mr. Kropp is a
general partner, as to which Mr. Kropp shares investment power and 8,891
shares held by a custodian of an IRA for Mr. Kropp as to which he has
investment power.
(7) Shares held by a custodian of a simplified employee pension for Mr. Steele
as to which he has investment power.
(8) Includes 30 shares held by Mr. Howard as to which he has investment power.
(9) Shares held by a custodian of an IRA for Mr. Corrigan as to which he has
investment power.
COMPENSATION
Compensation of Executive Officers
- ----------------------------------
The following table sets forth certain information concerning the annual
and long-term compensation paid to Ronald L. Havner, Jr., the Company's Chief
Executive Officer and the three other persons who were executive officers of the
Company on December 31, 1998 (the "Named Executive Officers") for 1998, 1997 and
1996.
6
<PAGE>
Summary Compensation Table (1)
------------------------------
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
---------------------------------------------------- ------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options (#) Compensation (2)
- ------------------ ---- ------ ----- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Ronald L. Havner, Jr. 1998 $185,000 $350,500 (3) -- $ 4,700
Chairman of the Board,
President and Chief 1997 185,000 150,500 (3) 148,636(4) 4,700
Executive Officer
1996 5,000(5) -- -- -- --
Mary Jayne Howard 1998 165,000 75,500 (3) 50,000 4,700
Executive Vice
President (6) 1997 165,000 75,500 (3) 47,947(4) 4,700
J. Michael Lynch 1998 84,600(7) 50,300(8) 18,100(9) 40,000 3,900
Vice President-Director
of Acquisitions and
Development
Jack E. Corrigan 1998 81,900(10) 20,100 -- 40,000 3,000
Vice President and
Chief Financial Officer
</TABLE>
- ----------------
(1) Includes compensation paid for services to the Company and AOPP.
(2) All Other Compensation consists solely of employer contributions to the
Company's profit sharing plan and trust.
(3) Value is not included because it did not exceed 10% of the annual salary
and bonus of the individual for the years indicated.
(4) Option granted by AOPP. The number of shares has been adjusted to reflect
the AOPP Merger.
(5) Represents salary paid by the Company (formerly Public Storage Properties
XI, Inc.). In 1996, Mr. Havner was Senior Vice President and Chief
Financial Officer of PSI and a Vice President of the Company, until
December 16, 1996 when he became Chairman, President and Chief Executive
Officer of AOPP.
(6) In 1996, Ms. Howard was a Senior Vice President of PSI until December 16,
1996 when she became Executive Vice President of AOPP.
(7) For the period June 1, 1998 through December 31, 1998.
(8) Includes a $30,000 signing bonus.
(9) Includes a reimbursement of relocation expenses of $16,850.
(10) For the period June 8, 1998 through December 31, 1998.
The following table sets forth certain information relating to options
to purchase shares of Common Stock granted to the Named Executive Officers
during 1998.
7
<PAGE>
Option Grants in Last Fiscal Year
---------------------------------
<TABLE>
<CAPTION>
Individual Grants
- -------------------------------------------------------------------------------------
Percent Potential Realizable
Number of of Total Value at Assumed
Securities Options Annual Rates of Share
Underlying Granted to Exercise Price Appreciation for
Options Employees in Price Expiration Option Term
Name Granted (#) Fiscal Year ($/Sh) Date 5% 10%
- ------------------------------------------------------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Ronald L. Havner, Jr. -- -- -- -- -- --
Mary Jayne Howard 25,000 13.0% $23.50 03/17/08 $ 370,125 $ 934,125
25,000 13.0% $25.00 05/07/08 393,750 993,750
J. Michael Lynch 40,000 20.8% $23.50 03/17/08 592,200 1,494,600
Jack E. Corrigan 40,000 20.8% $23.50 03/17/08 592,200 1,494,600
</TABLE>
All options granted in 1998 become exercisable in three equal
installments beginning on the first anniversary of the date of grant and have a
term of ten years.
The following table sets forth certain information concerning exercised
and unexercised options held by the Named Executive Officers at December 31,
1998.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
-----------------------------
<TABLE>
<CAPTION>
Number of Value of Unexercised
Shares Securities Underlying In-the-Money
Acquired Value Unexercised Options Options at
Name on Exercise(#) Realized($) at December 31, 1998 December 31, 1998(1)
---- -------------- ----------- -------------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald L. Havner, Jr. 23,600(2) $107,733 25,945 99,091 $ 186,545 $ 712,464
Mary Jayne Howard -- -- 15,982 81,965 114,911 239,203
J. Michael Lynch -- -- -- 40,000 -- 15,000
Jack E. Corrigan -- -- -- 40,000 -- 15,000
</TABLE>
- --------------
(1) Based on closing price of $23.875 per share of Common Stock on December
31, 1998, as reported by the American Stock Exchange. On March ___, 1999,
the closing price per share of Common Stock as reported by the American
Stock Exchange was $_______.
(2) Option was exercised in AOPP; the number of shares acquired on exercise
has been adjusted to reflect the AOPP Merger.
Compensation of Directors
- -------------------------
Each of the Company's directors, other than Ronald L. Havner, Jr.,
receives directors' fees of $10,000 per year plus $200 for each meeting
attended. In addition, each of the members of the Audit Committee receives $100
for each meeting of the Audit Committee attended. The policy of the Company is
to reimburse directors for reasonable expenses. Directors who are not officers
or employees of the Company ("Outside Directors") also receive automatic grants
of options under the 1997 Stock Option and Incentive Plan (the "1997 Plan"), and
Ronald L. Havner, Jr. is eligible to receive discretionary grants of options
and/or restricted stock thereunder. Under the 1997 Plan, (i) on March 16, 1998,
following the annual meeting of shareholders, each Outside Director was
automatically granted a non-qualified option to purchase 5,000 shares of Common
8
<PAGE>
Stock and (ii) thereafter, each new Outside Director will, upon the date of his
or her initial election to serve as an Outside Director, automatically be
granted a non-qualified option to purchase 5,000 shares of Common Stock. In
addition, after each annual meeting of shareholders commencing with this 1999
annual meeting, each Outside Director then duly elected and serving will
automatically be granted, as of the date of such annual meeting, a non-qualified
option to purchase 1,000 shares of Common Stock.
Employment Agreements
- ---------------------
In December 1997, Ronald L. Havner, Jr. and Mary Jayne Howard each
entered into an employment agreement with AOPP, which agreements were assumed by
the Company in the AOPP Merger. Mr. Havner's employment agreement is for a term
of two years (ending in December 1999) and provides for an annual base salary of
$185,000 and a discretionary annual bonus. Ms. Howard's employment agreement was
for a term of one year (which ended in December 1998) and provided for an annual
base salary of $165,000 and a discretionary annual bonus. The agreements include
provisions restricting Mr. Havner and Ms. Howard from competing with the Company
during employment. In the event of termination of an agreement by the Company
without cause, termination by the employee with cause or a merger or
consolidation in which the Company is not the surviving corporation, or a
transfer of all or substantially all of the assets of the Company (other than
any merger approved by Mr. Havner in which the agreement is assumed by the
surviving corporation), each agreement provides for the following payments: (i)
the present value of the employee's annual base salary for the remainder of the
term of the agreement (based on a discount rate of 5%), (ii) a prorated portion
of the employee's last annual bonus, but in no event less than the employee's
annual base salary and (iii) the acceleration of the vesting of the employee's
stock options so that all of the employee's outstanding stock options will be
exercisable during a specified period.
In May 1998, J. Michael Lynch entered into an employment agreement with
the Company. Mr. Lynch's employment agreement is for a term of one year (ending
in May 1999) and provides for an annual base salary of $145,000 and a
discretionary annual bonus. The agreement includes a provision restricting Mr.
Lynch from competing with the Company during employment. In the event of
termination of the agreement by the Company without cause, the agreement
provides for the payment by the Company of the present value of Mr. Lynch's
annual base salary for the remainder of the term of the agreement (based on a
discount rate of 5%) (the "Base Salary Payment"), but in no event less than
$72,500. In the event of a merger or consolidation in which the Company is not
the surviving corporation, or a transfer of all or substantially all of the
assets of the Company (other than any merger approved by the Company's Chief
Executive Officer in which the agreement is assumed by the surviving
corporation), the agreement provides for the following payments: (i) the Base
Salary Payment, but in no event less than $72,500 and (ii) the acceleration of
the vesting of Mr. Lynch's stock options so that all of Mr. Lynch's outstanding
stock options will be exercisable at the time of closing of such transaction. In
the event of termination of the agreement by Mr. Lynch with cause, the agreement
provides for the payment by the Company of the Base Salary Payment, but in no
event less than $145,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company does not have a compensation committee. The Company's stock
option and incentive plan, under which executive officers are eligible to
receive options and/or restricted stock, is administered by the Audit Committee.
The members of the Audit Committee are Vern O. Curtis, Arthur M. Friedman and
Jack D. Steele.
Ronald L. Havner, Jr., who is an executive officer of the Company, is a
member of the Board of Directors. Harvey Lenkin, who has been a director of the
Company since March 16, 1998, is president and a director of PSI and was
president of the Company until March 16, 1998 and president of Public Storage
Properties XX, Inc. ("Properties 20"), one of the Merged Public Storage REITs,
until May 8, 1998. B. Wayne Hughes, who was a director and the chief executive
officer of the Company until March 16, 1998, is chairman of the board and chief
executive officer of PSI and was a director and the chief executive officer of
Properties 20 until May 8, 1998. Neither the Company nor PSI has (nor did
Properties 20 have) a compensation committee.
9
<PAGE>
Certain Relationships and Related Transactions
- ----------------------------------------------
AOPP Merger. On March 17, 1998, AOPP, a subsidiary of PSI, merged into
the Company (the "AOPP Merger"), pursuant to an Amended and Restated Agreement
and Plan of Reorganization dated as of December 17, 1997 among the Company, AOPP
and PSI. In connection with the AOPP Merger, (i) the Company changed its name
from Public Storage Properties XI, Inc. to PS Business Parks, Inc., (ii) of the
1,819,937 outstanding shares of the Company's Common Stock Series A, based upon
elections made by the shareholders, 106,155 shares were converted into
$2,176,178 in cash (at the rate of $20.50 per share) and 1,713,782 shares
continued to be owned by the shareholders, (iii) of the 707,071 shares of the
Company's Common Stock Series B and Common Stock Series C, 47,824 shares of
Common Stock Series C were canceled prior to the AOPP Merger, and 659,247 shares
of Common Stock Series B and C were converted into 569,656 shares of the
Company's Common Stock Series A (at the rate of 0.8641 shares of Common Stock
Series A per share of Common Stock Series B and C), (iv) 11,737,527 shares of
the Company's Common Stock Series A were issued to the holders of AOPP's common
stock (at the rate of 1.18 shares of the Company's Common Stock Series A per
share of AOPP's common stock), (v) the Company's Common Stock Series A was
reconstituted as Common Stock and (vi) the Company became the general partner of
American Office Park Properties, L.P., which changed its name to PS Business
Parks, L.P. (the "Operating Partnership"). Concurrently with the AOPP Merger,
the Company exchanged 13 predominantly mini-warehouse properties for 11
commercial properties owned by PSI. In the AOPP Merger, (i) B. Wayne Hughes, the
Company's former chief executive officer, received 113,931 shares of the
Company's Common Stock in exchange for his shares of the Company's Common Stock
Series B and C, and the other former executive officers of the Company received
an aggregate of 7,492 shares of the Company's Common Stock in exchange for their
shares of AOPP's common stock, (ii) options to purchase shares of AOPP common
stock held by former executive officers of the Company were assumed by the
Company and converted into options to purchase an aggregate of 26,370 shares of
the Company's Common Stock, (iii) Ronald L. Havner, Jr. and Mary Jayne Howard,
who became executive officers of the Company as a result of the AOPP Merger,
received an aggregate of 71,008 shares of the Company's Common Stock in exchange
for their shares of AOPP's common stock, (iv) options to purchase shares of AOPP
common stock held by Ronald L. Havner, Jr. and Mary Jayne Howard were assumed by
the Company and converted into options to purchase an aggregate of 172,983
shares of the Company's Common Stock, (v) PSI and its affiliated partnership
received an aggregate of 4,576,785 shares of the Company's Common Stock in
exchange for their shares of AOPP's common stock and the Company's Common Stock
Series B and C, (vi) Acquiport received 5,289,765 shares of the Company's Common
Stock in exchange for its shares of AOPP's common stock and (vii) an aggregate
of 2,185,189 shares of the Company's Common Stock was received by the
institutional investors listed below in exchange for their shares of AOPP's
common stock: State of Michigan Retirement Systems, Cohen & Steers Capital
Management, Inc., Morgan Stanley Asset Management, Harvard Private Capital
Realty, Inc., ABKB/LaSalle Securities Limited Partnership, Fidelity Real Estate
Investment Portfolio, Stanford University, The Fidelity REIT Collective Pool,
State Employees' Retirement Fund of the State of Delaware and J.W. McConnell
Family Foundation (collectively, the "Institutional Investors"). In addition, as
a result of the AOPP Merger, the number of units of limited partnership interest
in the Operating Partnership ("Units") owned by PSI and its affiliated
partnerships was adjusted to 7,305,355 Units. The AOPP Merger was approved by
the shareholders and the disinterested directors of the Company.
Loans from Affiliate. On May 1, 1998, the Operating Partnership borrowed
$179 million from PSI to fund a portion of the acquisition cost of real estate
facilities. On May 6, 1998, $105 million of the loan was repaid and the
remaining balance was repaid on May 27, 1998. The loan bore interest at 6.91%
per annum. On January 19, 1999, the Operating Partnership borrowed $26.5 million
and on January 28, 1999, the Operating Partnership borrowed an additional $6
million from PSI to repay the outstanding balance on the Operating Partnership's
bank line of credit and to fund a portion of the acquisition cost of real estate
facilities. Approximately $4.5 million of the loan was repaid on January 29,
1999, $5 million was repaid on February 12, 1999 and the balance was repaid on
March ___, 1999. The loan bore interest at 5.5% per annum. The terms of these
loans were approved by the Company's disinterested directors.
Sale of Stock to Institutional Investors. On May 6, 1998, pursuant to an
agreement assumed by the Company in the AOPP Merger, the Company sold in a
private placement an aggregate of 4,588,885 shares of its Common Stock for an
aggregate amount of $104,999,911 in cash to the Institutional Investors.
10
<PAGE>
Management Agreements with Affiliates. Prior to the AOPP Merger, PSI
operated the Company's (formerly Public Storage Properties XI, Inc.'s)
mini-warehouse facilities pursuant to a management agreement under which the
Company paid to PSI a fee of 6% of the gross revenues of the mini-warehouse
facilities operated for the Company. During 1998 (prior to the AOPP Merger), the
Company paid fees of $78,621 to PSI pursuant to that management agreement.
The Operating Partnership operates industrial, retail and office
facilities for PSI and partnerships and joint ventures of which PSI is a general
partner or joint venturer ("Affiliated Entities") pursuant to a management
agreement under which PSI and the Affiliated Entities pay to the Operating
Partnership a fee of 5% of the gross revenues of the facilities operated for PSI
and the Affiliated Entities. During 1998, PSI and the Affiliated Entities paid
fees of $444,756 to the Operating Partnership pursuant to that management
agreement. As to facilities directly owned by PSI, the management agreement has
a seven-year term with the term being automatically extended for one year on
each anniversary date (thereby maintaining a seven-year term) unless either
party (PSI or the Operating Partnership) notifies the other that the management
agreement is not being extended, in which case it expires, as to such
facilities, on the first anniversary of its then scheduled expiration date. As
to facilities owned by the Affiliated Entities, the management agreement may be
terminated as to such facilities upon 60 days' notice by PSI (on behalf of the
Affiliated Entity) and upon seven years' notice by the Operating Partnership.
REPORT OF THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE
ON EXECUTIVE COMPENSATION
The Company pays its executive officers compensation deemed appropriate
in view of the nature of the Company's business, the performance of individual
executive officers, and the Company's objective of providing incentives to its
executive officers to achieve a level of individual and Company performance that
will maximize the value of shareholders' investment in the Company. To those
ends, the Company's compensation program consists of payment of a base salary
and, potentially, bonus compensation, and making incentive awards of options to
purchase Common Stock. Grants of options to executive officers are made under
the 1997 Stock Option and Incentive Plan. In connection with the AOPP Merger,
the Company assumed the outstanding options to purchase AOPP common stock
granted by AOPP under AOPP's 1997 Stock Option and Incentive Plan, which were
converted into options to purchase the Company's Common Stock ("Converted
Options"), and the Company adopted the 1997 Stock Option and Incentive Plan (the
"1997 Plan") as a new plan of the Company for the purpose of covering and
administering Converted Options and making awards to eligible participants.
Cash Compensation. Base salary levels are based generally on market
compensation rates and each individual's role in the Company, subject in certain
cases to minimums set forth in individual employment agreements. The Company
determines market compensation rates by reviewing public disclosures of
compensation paid to executive officers by other REITs of comparable size and
market capitalization. Some of the REITs whose executive compensation the
Company considered in establishing the compensation it pays to executive
officers are included in the NAREIT Equity Index referred to below under the
caption "Stock Price Performance Graph." Generally, the Company seeks to
compensate its executives at levels consistent with the middle of the range of
amounts paid by REITs deemed comparable by the Company. Individual salaries may
vary based on the experience and contribution to overall corporate performance
by a particular executive officer.
In connection with the AOPP Merger, the Company assumed AOPP's
employment agreements with Ronald L. Havner, Jr., who became the Company's Chief
Executive Officer, and Mary Jayne Howard, who became the Company's Executive
Vice President in charge of property operations. Mr. Havner's base compensation
for 1998 was established in his employment agreement at $185,000 per year, and
Ms. Howard's base compensation for 1998 was established in her employment
agreement at $165,000 per year. The Company deems these salary levels to be
consistent with its guidelines for executive compensation and therefore does not
currently intend to change them.
The Company bases its payment of annual bonuses on corporate, business
unit and individual performance. In establishing individual bonuses, the Company
takes into account the Company's overall profitability, the Company's internal
revenue growth, the Company's revenue growth due to acquisitions, and the
executive officer's contribution to the Company's growth and profitability. The
Company based its payment of the Chief Executive Officer's bonus for 1998 on the
Company's performance, taking into account the AOPP Merger.
11
<PAGE>
Equity-Based Compensation. The Company believes that its executive
officers should have an incentive to improve the Company's performance by having
an ongoing stake in the success of the Company's business. The Company seeks to
create this incentive by granting to appropriate executive officers stock
options that have an exercise price of not less than 100% of the fair market
value of the underlying stock on the date of grant, so that the executive
officer may not profit from the option unless the price of the Common Stock
increases. Options granted by the Company also are designed to help the Company
retain executive officers in that options are not exercisable at the time of
grant, and achieve their maximum value only if the executive remains in the
Company's employ for a period of years. The Company did not grant any options to
the Chief Executive Officer during 1998 (however, the Company assumed Mr.
Havner's Converted Options in the AOPP Merger). Options were granted to the
other named executive officers as reflected above in the table captioned "Option
Grants in Last Fiscal Year." The number of options granted to individual
executive officers is based on a number of factors, including seniority,
individual performance, and the number of options previously granted to such
executive officer, including Converted Options.
The 1997 Plan also authorizes the Company to compensate its executive
officers and other employees with grants of restricted stock. Restricted stock
would increase in value as the value of the Common Stock increased, and would
vest over time provided that the executive officer remained in the employ of the
Company. Accordingly, awards of restricted stock would serve the Company's
objectives of retaining its executive officers and other employees and
motivating them to advance the interests of the Company and its shareholders.
The Company did not grant any shares of restricted stock during 1998.
BOARD OF DIRECTORS AUDIT COMMITTEE
Ronald L. Havner, Jr. Vern O. Curtis (Chairman)
Harvey Lenkin Arthur M. Friedman
Vern O. Curtis Jack D. Steele
Arthur M. Friedman
James H. Kropp
Alan K. Pribble
Jack D. Steele
12
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The graph set forth below compares the yearly change in the cumulative
total shareholder return on the Common Stock (formerly Common Stock Series A) of
the Company (formerly Public Storage Properties XI, Inc.) for the five-year
period ended December 31, 1998 to the cumulative total return of the American
Stock Exchange Market Value Index ("AMEX Index") and the National Association of
Real Estate Investment Trusts Equity Index ("NAREIT Equity Index") for the same
period (total shareholder return equals price appreciation plus dividends). The
stock price performance graph assumes that the value of the investment in the
Company's Common Stock and each index was $100 on December 31, 1993 and that all
dividends were reinvested. The stock price performance shown in the graph is not
necessarily indicative of future price performance.
Comparison of Cumulative Total Return
PS Business Parks, Inc., AMEX Index and NAREIT Equity Index
December 31, 1993 - December 31, 1998
-------------------------------------
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD PS BUSINESS NAREIT
(FISCAL YEAR COVERED) PARKS, INC. AMEX EQUITY
- --------------------- ----------- ---- ------
<S> <C> <C> <C>
Measurement Pt. 12/31/93 $100.00 $100.00 $100.00
FYE 12/31/94 100.49 90.89 103.17
FYE 12/31/95 125.28 114.90 118.92
FYE 12/31/96 155.99 122.24 160.86
FYE 12/31/97 184.21 148.26 193.45
FYE 12/31/98 208.46 150.84 159.59
</TABLE>
13
<PAGE>
PROPOSAL NO. 2
AMENDMENT TO THE ARTICLES OF INCORPORATION
The Company's articles of incorporation include provisions designed to
assist the Company in meeting the stock ownership requirements for continued
qualification as a "Real Estate Investment Trust" ("REIT") for income tax
purposes. One of the REIT ownership tests generally prohibits any five or fewer
"individuals" from owning more than 50% of the value of the outstanding stock of
a REIT (the "5/50 Rule"). In that respect, the Company's articles of
incorporation currently impose an "Ownership Limit" that generally precludes any
"Person" from owning or acquiring more than 2% of the outstanding shares of
Common Stock. For this purpose, the articles of incorporation generally define
"Person" to mean an individual, corporation, partnership, limited liability
company, estate, trust, association, private foundation within the meaning of
Section 509(a) of the Internal Revenue Code of 1986, joint stock company or
other entity. The articles of incorporation also authorize the Board of
Directors to grant exceptions to that limit, when appropriate and provided that
the granting of the exception would not jeopardize the Company's REIT status.
The Ownership Limit for the Company's Common Stock was established in
connection with the AOPP Merger when AOPP was essentially wholly owned by PSI,
which is also a REIT. The Company's Ownership Limit was originally established
to correspond with the 2% limit applicable to public shareholders of PSI. Since
the initial establishment of the Company's Ownership Limit, PSI's ownership
interest in the Company has been considerably reduced by the issuance of a
substantial number of shares of the Company's Common Stock to other investors.
PSI currently owns less than a 50% interest in the Company (treating interests
that PSI and affiliates hold in PS Business Parks, L.P. as if converted into
shares of the Company's Common Stock). In light of that fact, and as a result of
requests from representatives of institutional investors, the Company previously
adopted an exception to its Ownership Limit permitting ownership of up to 7% of
the Company's Common Stock by certain institutional investors without requiring
that such an investor seek a specific, individual exception from the Board.
At this time, the Company is proposing to amend its articles of
incorporation to increase the Ownership Limit to 7% for any Person. The Board of
Directors believes that such a change may facilitate the Company's ability to
attract large investors to the Company.
Exhibit A contains a complete text of the proposed amendment to the
Company's articles of incorporation.
The affirmative vote of the holders of a majority of the Company's
outstanding shares of Common Stock is required to approve the amendment to the
Company's articles of incorporation. For these purposes, an abstention or broker
non-vote will have the effect of a vote against the proposal. The officers and
directors of the Company intend to vote their shares in favor of the amendment.
The Board of Directors recommends that you vote FOR this amendment.
14
<PAGE>
INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent
auditors, to audit the accounts of the Company for the fiscal year ending
December 31, 1999.
It is anticipated that representatives of Ernst & Young LLP, which has
acted as the independent auditors for the Company since the Company's
organization, will be in attendance at the Annual Meeting of Shareholders and
will have the opportunity to make a statement if they desire to do so and to
respond to any appropriate inquiries of the shareholders or their
representatives.
ANNUAL REPORT
The Company has filed, for its fiscal year ended December 31, 1998, an
Annual Report on Form 10-K with the Securities and Exchange Commission, together
with applicable financial statements and schedules thereto. The Company will
furnish, without charge, upon written request of any shareholder as of March 15,
1999, who represents in such request that he or she was the record or beneficial
owner of the Company's shares on that date, a copy of the Annual Report together
with the financial statements and any schedules thereto. Upon written request
and payment of a copying charge of 15 cents per page, the Company will also
furnish to any shareholder a copy of the exhibits to the Annual Report. Requests
should be addressed to: Jack E. Corrigan, Secretary, PS Business Parks, Inc.,
701 Western Avenue, Glendale, California 91201-2397.
EXPENSES OF SOLICITATION
The Company will pay the cost of soliciting Proxies. In addition to
solicitation by mail, certain directors, officers and regular employees of the
Company and its affiliates may solicit the return of Proxies by telephone,
telegram, personal interview or otherwise. The Company may also reimburse
brokerage firms and other persons representing the beneficial owners of the
Company's stock for their reasonable expenses in forwarding proxy solicitation
materials to such beneficial owners. Shareholder Communications Corporation, New
York, New York may be retained to assist the Company in the solicitation of
Proxies, for which Shareholder Communications Corporation would receive normal
and customary fees and expenses from the Company.
DEADLINES FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR
CONSIDERATION AT 2000 ANNUAL MEETING
Any proposal that a shareholder wishes to submit for inclusion in the
Company's Proxy Statement for the 2000 Annual Meeting of Shareholders ("2000
Proxy Statement") pursuant to Securities and Exchange Commission Rule 14a-8 must
be received by the Company no later than December ___, 1999. In addition, notice
of any proposal that a shareholder wishes to propose for consideration at the
2000 Annual Meeting of Shareholders, but does not seek to include in the
Company's 2000 Proxy Statement pursuant to Rule 14a-8, must be delivered to the
Company no later than February ___, 2000 if the proposing shareholder wishes for
the Company to describe the nature of the proposal in its 2000 Proxy Statement
as a condition to exercising its discretionary authority to vote proxies on the
proposal. Any shareholder proposals or notices submitted to the Company in
connection with the 2000 Annual Meeting of Shareholders should be addressed to:
Jack E. Corrigan, Secretary, PS Business Parks, Inc., 701 Western Avenue,
Glendale, California 91201-2397.
OTHER MATTERS
The management of the Company does not intend to bring any other matter
before the meeting and knows of no other matters that are likely to come before
the meeting. If any other matters properly come before the meeting, the persons
named in the accompanying Proxy will vote the shares represented by the Proxy in
accordance with their best judgment on such matters.
15
<PAGE>
You are urged to vote the accompanying Proxy and sign, date and return
it in the enclosed stamped envelope at your earliest convenience, whether or not
you currently plan to attend the meeting in person.
By Order of the Board of Directors
JACK E. CORRIGAN, Secretary
Glendale, California
March ___, 1999
16
<PAGE>
Exhibit A
Proposed Amendment to Articles of Incorporation
Set forth below is the proposed amendment to Article IV, Section 4.01
(a) of the Company's Articles of Incorporation. Article IV, Section 4.01 (a)
would read in its entirety as follows:
"4.01 Ownership Limitations
(a) Basic Ownership Limits. Except as provided in
Section 4.01(b) and Section 4.03, no Person shall Beneficially
Own shares of Common Stock or any series of Preferred Stock or
Equity Stock in excess of the Ownership Limit set forth in
this Section 4.01(a). In the case of Common Stock, the
Ownership Limit is 7.0% of the outstanding shares of Common
Stock. In the case of any series of Preferred Stock or Equity
Stock, the Ownership Limit is 9.9% of the outstanding shares
of such series of Preferred Stock or Equity Stock."
<PAGE>
PRELIMINARY COPY
PS BUSINESS PARKS, INC.
701 Western Avenue
Glendale, California 91201-2397
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Ronald L. Havner, Jr. and Harvey Lenkin,
or either of them, with power of substitution, as Proxies, to appear and vote,
as designated below, all the shares of Common Stock of PS Business Parks, Inc.
held of record by the undersigned on March 15, 1999, at the Annual Meeting of
Shareholders to be held on May 10, 1999, and any adjournments thereof.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED. IN THE ABSENCE OF ANY DIRECTION, THE SHARES WILL BE VOTED FOR THE
ELECTION OF ALL NOMINEES LISTED IN ITEM 1 AND IN FAVOR OF ITEM 2.
(Continued and to be signed on reverse side)
<PAGE>
X Please mark votes as in this example.
- ---
1. Election of Directors
Nominees: Ronald L. Havner, Jr., Harvey Lenkin, Vern O. Curtis, Arthur
M. Friedman, James H. Kropp, Alan K. Pribble and Jack D. Steele.
FOR WITHHELD
ALL FROM ALL
___ NOMINEES ___ NOMINEES
___________________________________________
For all nominees except as noted above
2. Approval of Amendment to the Articles of Incorporation in the form of
Exhibit A to the accompanying Proxy Statement to increase the ownership
limitation applicable to the Common Stock from 2% to 7% of the
outstanding Common Stock.
____ FOR ____ AGAINST ____ ABSTAIN
3. Other matters: In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement dated March ___, 1999.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE TO
AMERICAN STOCK TRANSFER & TRUST COMPANY, 40 WALL STREET, 46TH FLOOR, NEW YORK,
NEW YORK 10005.
Dated: ______________________, 1999
___________________________________
Signature
____________________________________
Signature if held jointly
Please sign exactly as your name
appears. Joint owners should each
sign. Trustees and others acting in
a representative capacity should
indicate the capacity in which they
sign.
