SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (the "Exchange Act")
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule-14a-11(c) or Rule 14a-12
UNITED INVESTORS REALTY TRUST
(Name of Registrant as Specified in Its Charter)
Not Applicable
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
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UNITED INVESTORS REALTY TRUST
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000
------------------------
To Our Shareholders:
You are invited to attend the annual meeting of shareholders of United
Investors Realty Trust to be held at the Terrace Hotel, 329 East Main Street,
Lakeland, Florida on Tuesday, May 16, 2000, at 11:30 a.m., local time, for the
following purposes:
Proposal 1. To elect four trust managers to serve for a one-year term
and until their successors are elected and qualified.
Proposal 2. To ratify the selection of Ernst & Young, LLP as
independent auditors for the fiscal year ending December 31, 2000.
Proposal 3. To transact such other business as may properly come before
the annual meeting or any adjournments thereof.
The record date for the annual meeting is April 7, 2000. Only shareholders
of record at the close of business on that date are entitled to notice of and to
vote at the annual meeting.
The Board of Trust Managers hopes that you will find it convenient to
attend the annual meeting in person, but whether or not you plan to attend,
please complete, sign, date and return the enclosed Proxy to ensure that your
common shares of beneficial interest are represented at the annual meeting.
Returning your Proxy does not deprive you of the right to attend the annual
meeting and vote your shares in person.
Robert W. Scharar
Chairman of the Board of Trust
Managers
April 14, 2000
<PAGE>
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MAY 16, 2000
------------------------
United Investors Realty Trust
5847 San Felipe
Suite 850
Houston, Texas 77057
The Board of Trust Managers is soliciting Proxies to be used at the 2000
annual meeting of shareholders to be held at the Terrace Hotel, 329 East Main
Street, Lakeland, Florida 33801-5046 on Tuesday, May 16, 2000, at 11:30 a.m.,
local time. This Proxy Statement, accompanying Proxy and Annual Report to
Shareholders for the fiscal year ended December 31, 1999 are first being mailed
to shareholders on or about April 14, 2000. Although the Annual Report to
Shareholders is being mailed to shareholders with this Proxy Statement, it does
not constitute part of this Proxy Statement.
WHO CAN VOTE
Only shareholders of record as of the close of business on April 7, 2000
are entitled to notice of and to vote at the annual meeting. As of April 7,
2000, United Investors had outstanding 9,043,892 common shares of beneficial
interest, the only outstanding class of shares entitled to vote. Each
shareholder of record on the record date is entitled to one vote for each common
share held.
HOW YOU CAN VOTE
Common shares cannot be voted at the annual meeting unless the holder of
record is present in person or by proxy. All shareholders are urged to complete,
sign, date and promptly return the Proxy in the enclosed postage-paid envelope
after reviewing the information contained in this Proxy Statement and in the
Annual Report to Shareholders. Valid Proxies will be voted at the annual meeting
and at any postponements or adjournments thereof as you direct in the Proxy. If
no direction is given and the Proxy is validly executed, the Proxy will be voted
FOR the election of the nominees for the Board of Trust Managers set forth in
this Proxy Statement and FOR the ratification of the selection of Ernst & Young
LLP as independent auditors for the fiscal year ending December 31, 2000. The
persons authorized under the Proxies will vote upon such other business as may
properly come before the annual meeting in accordance with their best judgment.
REVOCATION OF PROXIES
You may revoke your Proxy at any time prior to the start of the annual
meeting in one of three ways:
(1) by delivering a written notice of revocation to the Secretary of
United Investors;
(2) by submitting a duly executed Proxy bearing a later date; or
(3) by attending the annual meeting and expressing the desire to vote your
shares in person.
QUORUM
A majority of the outstanding common shares on April 7, 2000 (4,521,947
shares), represented in person or by proxy, shall constitute a quorum for the
transaction of business at the annual meeting. However, if a quorum is not
present, the shareholders present at the meeting have the power to adjourn the
meeting until a quorum is present. At any such adjourned meeting at which a
quorum is present or represented, any business may be transacted that might have
been transacted at the original meeting. Broker non-votes (i.e., a nominee
holding common shares for a beneficial owner who has not received voting
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instructions from the beneficial owner with respect to a particular matter and
such nominee does not possess or choose to exercise discretionary authority with
respect thereto) will not be included in the determination of the number of
shares present at the annual meeting for quorum purposes.
YOUR PROXY VOTE IS IMPORTANT. Accordingly, you are asked to complete,
date, sign and return the accompanying Proxy whether or not you plan to attend
the annual meeting. If you plan to attend the annual meeting to vote in person
and your shares are registered with our transfer agent, EquiServe, in the name
of a broker or bank, you must secure a Proxy from the broker or bank assigning
voting rights to you for your shares.
PROPOSAL ONE -- ELECTION OF TRUST MANAGERS
United Investors' bylaws provide that the Board of Trust Managers will
consist of two to nine trust managers, as determined from time to time by
resolution of the Board. The Board of Trust Managers has set the number of trust
managers at four, all of whom are to be elected at the annual meeting. Each
trust manager will serve until the 2001 annual meeting and until a successor has
been elected and qualified or until the trust manager's earlier death,
resignation or removal. Each nominee has consented to being named in this Proxy
Statement and to serve if elected.
We have no reason to believe that any of the nominees will not serve if
elected, but if any of them should become unavailable to serve as a trust
manager, and if the Board of Trust Managers designates a substitute nominee, the
persons named in the accompanying Proxy will vote for the substitute nominee
designated by the Board of Trust Managers, unless a contrary instruction is
given in the Proxy.
Each shareholder is entitled to cast one vote for each common share held on
April 7, 2000. The majority vote of the shares represented in person or by proxy
at the annual meeting is required to elect each Trust Manager who has previously
been elected by the shareholders. Trust Managers that have not been previously
elected by the shareholders, such as Mr. Fisher, must be approved by the holders
of a majority of the outstanding shares of United Investors. Under the bylaws,
even if such Trust Managers do not receive such vote, they will remain in office
until their successors, if any, are elected. Votes may be cast in favor or
withheld. Votes that are withheld will be excluded entirely from the vote and
will have no effect. Votes that are withheld for a particular nominee will be
excluded from the vote for that nominee only.
NOMINEES
The persons nominated to be Trust Managers are listed below. All of the
nominees listed below are currently Trust Managers and have been since January
1, 1989 except Mr. Brooks who has been a Trust Manager since March 1995, and Mr.
Fisher who has been a Trust Manager since December 1999.
During fiscal year 1999, the Board of Trust Managers held four regularly
scheduled meetings and three special telephone meetings. No Trust Manager
attended less than 75% of the meetings held by the Board of Trust Managers and
the committees on which he served.
The following information as of April 7, 2000 is submitted concerning the
nominees named for election as trust managers:
POSITION WITH UNITED INVESTORS REALTY
NAME AGE TRUST
- --------------------------------- --- -------------------------------------
Robert W. Scharar................ 51 President, Chief Executive Officer,
and Trust Manager
William C. Brooks................ 63 Trust Manager
Frederick E. Fisher.............. 69 Trust Manager
Josef C. Hermans................. 57 Trust Manager
ROBERT W. SCHARAR -- Mr. Scharar, who resides in Houston, Texas, received a
B.S.B.A. degree in business from the University of Florida in 1970, an M.B.A.
degree in 1971 from Northeastern University, a J.D. from Northeastern University
Law School in 1974, and an L.L.M. degree in Taxation from Boston University Law
School in 1979. He is a Florida-licensed certified public accountant. In 1975,
he formed
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First Commonwealth Associates, a Texas partnership, which engaged in financial
planning and advisory services. In 1981, the assets of First Commonwealth
Associates were acquired by UST Financial Planning Company, Inc., a subsidiary
of UST Corp. (a Massachusetts bank holding company), and Mr. Scharar served as
President of that subsidiary. In 1983, Mr. Scharar founded FCA Corp, United
Investors' external advisor (the "Investment Manager"), which acquired the
Texas and Florida offices of UST Financial Planning Company, Inc. Mr. Scharar is
the principal shareholder, President and a director of the Investment Manager's
parent company. Mr. Scharar also serves as one of four trustees of First
Commonwealth Mortgage Trust ("FCMT"), a private real estate investment trust
("REIT") which is engaged in the business of originating and investing in real
estate mortgage loans, Ivy Realty Trust ("Ivy"), a private REIT engaged in the
business of acquiring and operating office buildings, and Holly Mortgage Trust
("Holly"), a private mortgage REIT. The Investment Manager is also the
investment manager for FCMT, Ivy, and Holly. Since 1991, Mr. Scharar has served
as President and Portfolio Manager of Capstone New Zealand Fund and since 1997
as President and Portfolio Manager of Capstone Japan Fund. From 1992 through
1996, he served as director of South West Property Trust, Inc. ("SWP") and in
1997 when SWP merged into United Dominion Realty Trust, Inc. ("UDR"), he
became, and remains, a director of UDR. Mr. Scharar has served as a Trust
Manager and Chairman of the Board of United Investors since its inception in
1989 and as President and Chief Executive Officer since May 1999.
WILLIAM C. BROOKS -- Mr. Brooks is a financial consultant who resides in
Boynton Beach, Florida. Mr. Brooks is a graduate of Oberlin College. From 1980
to 1994, Mr. Brooks was Chief Financial Officer, Senior Vice President and
Treasurer of UST Corp., a Massachusetts bank holding company. Since 1994, Mr.
Brooks has served as a financial consultant. Mr. Brooks currently serves as a
Trust Manager of FCMT and Ivy. Mr. Brooks has served as a Trust Manager of
United Investors since March 3, 1995.
FREDERICK E. FISHER -- Mr. Fisher was a founder, Vice Chairman and Chief
Financial Officer of US Home Corporation from 1969 to 1981. A graduate of the
University of Florida in 1959, he was a partner in Fisher, Morrison & Co., CPAs
until 1969. He is a founder of Peoples Bank and currently serves as a director.
Mr. Fisher currently resides in Tarpon Springs, Florida.
JOSEF C. HERMANS -- Mr. Hermans resides in Houston, Texas and is a
consultant to the hotel industry. Mr. Hermans is a graduate of the Lausanne,
Switzerland Hotel Management School. In addition to his early experience in
European hotels, Mr. Hermans served as Vice President of Operations of Mariner
Corporation between 1976 and 1983. Since 1983, Mr. Hermans has been
self-employed as a consultant in the hospitality industry. Mr. Hermans currently
serves as a Trust Manager of FCMT and Ivy and a director of Mirror Properties
Corp. Mr. Hermans has served as a Trust Manager of United Investors since
January 1, 1989.
The Board of Trust Managers unanimously recommends that shareholders vote
FOR the election of Trust Managers as set forth in Proposal One.
COMMITTEES OF BOARD OF TRUST MANAGERS
AUDIT COMMITTEE
FUNCTIONS: Reviews proposals of United Investors' independent auditors
regarding annual audits.
Recommends the engagement or discharge of the auditors.
Reviews recommendations of the auditors concerning accounting principles
and the adequacy of internal controls and accounting procedures and
practices.
Reviews the scope of the annual audit.
Approves or disapproves each professional service or type of service other
than standard auditing services to be provided by the auditors.
Reviews and discusses the audited financial statements with the auditors.
MEMBERS: William C. Brooks (Chairman)
Josef C. Hermans
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NUMBER OF MEETINGS IN 1999: Two.
GOVERNANCE COMMITTEE
FUNCTIONS: Reviews and recommends individuals to be considered as Trust
Managers, and reviews and recommends proposals to revise United Investors'
bylaws and other policies and practices concerning ethical standards of
trust managers, officers, and business relationships.
MEMBERS: Josef C. Hermans (Chairman)
William C. Brooks
Frederich E. Fisher
NUMBER OF MEETINGS IN 1999: None (the Committee was established in March
2000).
COMPENSATION COMMITTEE
FUNCTIONS: Reviews annual salaries and bonuses paid by the Investment
Manager to executive officers of United Investors. In addition, the
compensation committee determines the recipients of, and time of granting
of, stock options. The compensation committee also determines the exercise
price of each option and the number of shares to be issued upon the
exercise of each stock option. The compensation committee determines
vesting periods of options and the provisions of any stock loan and/or
programs attendant on the exercise of options.
MEMBERS: William C. Brooks (Chairman)
Frederick E. Fisher
Josef C. Hermans
NUMBER OF MEETINGS IN 1999: One.
Trust Managers Compensation
Non-employee Trust Managers receive:
o an annual fee of $10,000,
o a payment of $250 for each Board meeting attended, and
o a payment of $250 for each committee meeting attended.
In addition, upon completion of United Investors' initial public offering
on March 13, 1998, non-employee Trust Managers received options to acquire 8,000
common shares under the 1997 share incentive plan. The share options are
exercisable over a four year period commencing January 1, 1999 at an exercise
price of $10 per share. In addition, each non-employee Trust Manager is entitled
to receive options to acquire 2,000 common shares on January 1 of each year
commencing January 1, 1999. These options are exercisable upon grant at an
exercise price equal to the fair market value of the underlying common shares on
the date of grant and expire after four years.
MANAGEMENT
EXECUTIVE OFFICERS
NAME AGE TITLE
- ------------------------------------ --- -------------------------------------
Robert W. Scharar................... 51 Chairman of the Board of Trust
Managers, President and Chief
Executive Officer
R. Steven Hamner.................... 43 Vice President and Chief Financial
Officer
Joseph W. Karp...................... 48 Vice President, Asset Management
Randall D. Keith.................... 41 Vice President and Chief Operating
Officer
ROBERT W. SCHARAR -- Set forth under "Proposal One -- Election of
Directors."
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R. STEVEN HAMNER -- Mr. Hamner resides in Houston, Texas. He has been Vice
President and Chief Financial Officer since July 1, 1998. For the 10 years prior
to his employment with United Investors, he was employed by Ernst & Young LLP,
or its predecessors, most recently as Senior Audit Manager.
JOSEPH W. KARP -- Mr. Karp resides in Houston, Texas. He currently serves
as Vice President and Director of Asset Management and Leasing for United
Investors. Prior to joining United Investors in August 1998, he was President of
Realty/REIT Advisors, Inc., a consulting practice that focused on providing real
estate and organizational enhancements to private organizations and the
governments of Poland, Hungary, Romania, Ukraine, Slovakia, Turkey and Russia.
From 1981 through 1995 he served as Vice President and Director of Operating
Properties for Weingarten Realty Investors.
RANDALL D. KEITH -- Mr. Keith resides in Houston, Texas. Mr. Keith
currently serves as Vice President and Chief Operating Officer of United
Investors. Mr. Keith has been involved with United Investors since its inception
in 1988. He served as Secretary of United Investors from 1988 to 1990 and from
1993 to 1996, Treasurer from 1990 to 1993, Vice President from 1993 to 1996, and
as Vice President and Chief Operating Officer from 1996 to the present.
COMPENSATION OF EXECUTIVE OFFICERS
The following table summarizes the compensation paid by the Investment
Manager for the fiscal years ended December 31, 1999 and 1998, to the most
highly compensated executive officers who received a total annual salary and
bonus in excess of $100,000 in fiscal year 1998. We are not required to report
compensation for the periods prior to United Investors' IPO.
The executive officers are employed and paid by the Investment Manager.
Messrs. Hamner and Keith devote substantially all of their efforts to United
Investors matters, and accordingly, their compensation from the Investment
Manager is closely correlated with their efforts on behalf of United Investors.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
----------------------------------- COMPENSATION
OTHER SECURITIES
FISCAL ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- ------------------------------------- ------ ---------- ----- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Scharar (1)................ 1999 -- -- -- -- --
President and Chief Executive 1998 -- -- -- 147,000 --
Officer
Lewis H. Sandler (2)................. 1999 $ 58,276 -- -- -- --
President and Chief Executive 1998 $ 140,000 -- -- 40,000 --
Officer
R. Steven Hamner (3)................. 1999 $ 156,750 -- -- -- --
Vice President and 1998 $ 159,000 -- -- 26,000 $20,000(4)
Chief Financial Officer
Randall D. Keith (5)................. 1999 $ 133,800 -- -- 32,000 --
Vice President and
Chief Operating Officer
</TABLE>
- ------------
(1) Mr. Scharar is also the Chief Executive Officer of the Investment Manager's
parent company and a substantial majority of his time is devoted to matters
other than United Investors. Accordingly, it is impracticable to accurately
determine the amount of Mr. Scharar's compensation from the Investment
Manager that is directly correlated with his efforts on behalf of United
Investors. The number of securities underlying options includes 107,000
options issued to the Investment Manager. Mr. Scharar became President and
Chief Executive Officer on May 6, 1999.
(2) Mr. Sandler became President and Chief Executive Officer effective January
1, 1997; he was appointed a Trust Manager on August 10, 1998, and resigned
all of his positions on May 6, 1999.
(3) Mr. Hamner began his employment by the Investment Manager on July 1, 1998.
The amount reflected is his annualized salary.
(4) Mr. Hamner was granted 2,000 common shares of beneficial interest, valued at
$10.00 per share on July 1, 1998.
(5) Mr. Keith's salary first became reportable in 1999.
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OPTION TABLES
OPTION GRANTS
No options were granted in 1999 to United Investors' executive officers.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning the value of
the unexercised options as of December 31, 1999 held by the executive officers
named above.
AGGREGATE OPTION EXERCISES IN FISCAL YEAR 1999 AND
FISCAL 1999 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AS OF
ACQUIRED DECEMBER 31, 1999 DECEMBER 31, 1999(1)
ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------- ---------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Scharar.................... 36,750(2) $ 0 0 110,250(2) $-- $ 0
R. Steven Hamner..................... 6,500 0 0 19,500 -- 0
Randall D. Keith..................... 8,000 0 0 24,000 -- 0
</TABLE>
- ------------
(1) Value based on $6.19 closing price per share of common stock on December 31,
1999.
(2) The amounts shown for Mr. Scharar include options held by the Investment
Manager, as to which he is deemed to share beneficial ownership due to his
ownership of a majority of the common stock of the Investment Manager's
parent company.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
United Investors' executive compensation is determined and paid by the
Investment Manager. Such compensation is subject to review and approval by the
compensation committee of the Board of Trust Managers. The functions of the
compensation committee are to review general compensation policies and to review
recommendations made by the Investment Manager regarding the salaries of
executive officers. United Investors seeks to ensure executive compensation that
will support the achievement of United Investors' financial goals while
attracting and retaining talented executives and rewarding superior performance.
In performing this function, the compensation committee reviews executive
compensation surveys and other available information and may from time to time
consult with independent compensation consultants.
In general, the Investment Manager compensates United Investors' executive
officers through base salary and long-term incentive compensation. In addition,
executive officers participate in benefit plans that are generally available to
the Investment Manager's employees.
The compensation committee's compensation policies for executive officers
follow United Investors' compensation policy for all employees, whether paid by
the Investment Manager or directly by United Investors. This policy emphasizes
the principle that compensation should be commensurate with performance of the
individual and United Investors. The chief executive officer is also the chief
executive officer and the majority owner of the Investment Manager's parent
company. The independent trust managers evaluate the performance of the
Investment Manager and approve the fees paid on an annual basis. See "Certain
Relationships and Transactions" in this Proxy Statement for a discussion of
such fees.
Respectfully submitted,
Compensation Committee:
William C. Brooks, Chairman
Josef C. Hermans
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Trust Managers previously awarded to the Investment Manager,
certain officers, and the Trust Managers of United Investors 334,000 options to
acquire common shares at a price of $10.00 per share. See Compensation of Trust
Managers. The options become exercisable at 25% per year beginning January 1,
1999, and expire five years from the date they become eligible for exercise. As
of January 1, 1999, options to acquire 83,500 common shares were exercised,
including 2,000 each by Messrs. Brooks and Hermans. United Investors loaned 100%
of the purchase price, of which 20% will be forgiven each year for four years
beginning January 1, 2000, conditioned upon continued employment by United
Investors or the Investment Manager.
Robert W. Scharar is Chairman, President and CEO of United Investors and of
the Investment Manager's parent company. Although he draws no salary from United
Investors, he owns 52.7% of the voting stock of the Investment Manager's parent
company and accordingly benefits from the advisory fee paid by United Investors
to the Investment Manager and from any stock grants or options granted to the
Investment Manager.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
United Investors has entered into an agreement (the "Advisory Agreement")
with the Investment Manager. Robert W. Scharar, United Investors' Chairman,
President and CEO owns 52.7% of the voting stock of the Investment Manager's
parent company. The Advisory Agreement obligates the Investment Manager to use
its best efforts to administer the day-to-day operations of United Investors and
to implement the directives of the Trust Managers with respect to property
operations, maintenance, rehabilitation, acquisitions, financings, refinancings,
and dispositions.
The Investment Manager is paid a fee based on an amount equivalent to 6.5%
of earnings before interest, taxes, depreciation, amortization, and advisory
fees. In addition, United Investors reimburses the Investment Manager for the
salaries, benefits, and occupancy costs of employees who perform property
management, leasing, property level accounting, and other operational duties for
United Investors.
During 1999, United Investors paid the Investment Manager fees of
$1,141,189 and reimbursed the Investment Manager an additional $741,425 for
salaries, benefits, and occupancy costs. United Investors estimates that the
Investment Manager will be paid fees of approximately $1,200,000 and will be
reimbursed approximately $800,000 in 2000.
During 1998, United Investors granted options to purchase 334,000 common
shares to certain officers, employees, Trust Managers, and the Investment
Manager. The recipients become eligible to exercise 25% of their options each
January 1, beginning in 1999. The exercise price is $10.00 per share, 100% of
which may be borrowed from United Investors. Loans are repayable over four years
and require annual payments of 25% of the initial principal and interest
calculated at the Applicable Federal Rate published by the IRS. The Applicable
Federal Rate as of January 1, 1999 was 4.64%. Following is a table indicating
related persons and entities that had loans payable to United Investors for the
purchase of shares:
HIGHEST AMOUNT OWED AMOUNT OWED AT
NAME DURING 1999 APRIL 14, 2000
- ------------------------------------- ------------------- --------------
Robert W. Scharar (1)................ $ 100,000 $ 75,000
FCA Corp (1)......................... $ 367,500 $275,625
Lewis H. Sandler..................... $ 100,000 $ 0
Randall D. Keith (2)................. $ 80,000 $ 60,000
R. Steven Hamner (2)................. $ 65,000 $ 48,750
- ------------
(1) Mr. Scharar is the Chairman of the Board of Trust Managers, President and
CEO of United Investors and the principal shareholder of First Commonwealth
Holding Corporation, the Investment Manager's parent company. As of May 6,
1999, Mr. Sandler's employment terminated and the Investment Manager assumed
Mr. Sandler's obligation and share ownership.
(2) Messrs. Keith, Hamner and Karp are executive officers.
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With respect to options that became exercisable on January 1, 1999, the
Board of Trust Managers elected to forgive 80% of the borrowed amount. The loan
will be forgiven at the rate of 20% per year, beginning January 1, 2000,
conditioned upon continued employment by United Investors or the Investment
Manager. Subsequent to December 31, 1999, Messrs. Scharar, Keith and Hamner and
the Investment Manager made annual interest payments and principal payments of
5% of their outstanding loan balances. United Investors forgave 20% of the
original loan amounts.
PERFORMANCE GRAPH
SEC rules require the presentation of a line graph comparing, over a period
of five years (or such shorter period that a class of securities has been
registered under Section 12 of the Securities Exchange Act of 1934), the
cumulative total stockholder return to a performance indicator of a broad equity
market index and either a nationally recognized industry index or a peer group
index constructed by United Investors.
The graph below compares cumulative total return on United Investors common
shares to the cumulative total return of the NASDAQ Market Index and the NAREIT
Equity REIT Index from March 13, 1998, when United Investors' common shares
became publicly traded, through December 31, 1999. The comparison assumes $100
was invested on March 13, 1998 in United Investors' common shares and in each of
the aforementioned indices and assumes reinvestment of dividends.
COMPARISON 5-YEAR CUMULATIVE TOTAL RETURN
AMONG UNITED INVESTORS REALTY TRUST,
NASDAQ MARKET INDEX AND NAREIT EQUITY INDEX
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
03/13/98 12/31/98 12/31/99
--------- --------- ---------
UIRT................................. 100.000 73.950 74.780
Nasdaq Market Index.................. 100.000 124.850 225.555
NAREIT Equity Index.................. 100.000 84.372 80.474
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the common shares as of April 14, 2000 by (1) each person known by
United Investors to own beneficially more than 5% of its outstanding common
shares, (2) each current Trust Manager of United Investors, (3) each current
executive officer named in the executive compensation table, and (4) all current
Trust Managers and current named executive officers of United Investors as a
group. Unless otherwise indicated, the shares listed in the table are owned
directly by the individual or entity, or by both the individual and the
individual's spouse. The individual or entity has sole voting and investment
power as to shares shown or, in the case of the individual, such power is shared
with the individual's spouse.
AMOUNT AND NATURE OF PERCENT OF
CLASS BENEFICIAL OWNERSHIP OUTSTANDING SHARES
- ----- --------------------- ------------------
OVER 5% SHAREHOLDERS
None
- ----
DIRECTORS AND EXECUTIVE OFFICERS
Robert W. Scharar (1)............... 119,348 1.3
Randall D. Keith.................... 35,678 *
R. Steven Hamner.................... 27,900 *
William C. Brooks................... 12,718 *
Frederick Fisher.................... 15,100 *
Josef C. Hermans.................... 9,626 *
All trust managers and executive
officers as a
group (6 persons) (1)............. 220,370 2.4%
- ------------
* Less than one percent.
(1) The amounts shown for Mr. Scharar include 31,000 shares owned by the
Investment Manager, as to which he is deemed to share beneficial ownership
due to his ownership of a majority of the common stock of the Investment
Manager's parent company, and 5,838 shares owned by trusts for the benefit
of unrelated individuals for which Mr. Scharar exercises voting power, but
has no beneficial interest.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires United
Investors' officers and Trust Managers, and persons who own more than 10% of a
registered class of United Investors' equity securities, to file reports of
ownership and changes in ownership of such securities with the SEC. Officers,
directors and greater than 10% beneficial owners are required by applicable
regulations to furnish United Investors with copies of all Section 16(a) forms
they file.
Based solely upon a review of the reports to United Investors with respect
to fiscal year 1999, no person failed to disclose on a timely basis reports
required by Section 16(a).
PROPOSAL TWO -- RATIFICATION OF INDEPENDENT AUDITORS
The shareholders are asked to ratify the appointment by the Board of Trust
Managers of Ernst & Young LLP as independent auditors for the fiscal year ending
December 31, 2000. The selection was based upon the recommendation of the audit
committee.
Representatives of Ernst & Young LLP will be available at the annual
meeting to respond to appropriate questions from shareholders and to make a
statement if they desire.
Adoption of Proposal Two requires approval by the holders of majority of
common shares of beneficial interest present in person or represented by proxy,
and entitled to vote at the annual meeting. Abstentions may be specified on this
proposal to ratify the selection of the independent auditors. Abstentions will
be considered present and entitled to vote at the annual meeting but will not be
counted as votes cast in the
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affirmative. Abstentions will have the effect of a negative vote for this
proposal to ratify the selection of the independent auditors.
The Board of Trust Managers unanimously recommends that shareholders vote
FOR the ratification of the appointment of Ernst & Young LLP as independent
auditors for fiscal 2000.
SHAREHOLDER PROPOSALS
A proper proposal submitted by shareholders for presentation at United
Investors' 2001 annual meeting and received by United Investors' corporate
secretary at United Investors' principal executive office no later than December
16, 2000 will be included in the Proxy Statement and Proxy related to the 2001
annual meeting.
OTHER BUSINESS
United Investors' management knows of no other business that will be
presented at the annual meeting. If other matters requiring a vote of the
shareholders properly come before the annual meeting, the persons authorized
under the Proxies will vote and act according to their best judgment.
EXPENSES
The expense of preparing, printing, and mailing proxy materials to United
Investors' shareholders will be borne by United Investors. In addition to the
solicitation of Proxies by use of the mail, Proxies may be solicited personally
or by telephone or facsimile by trust managers, officers and regularly engaged
employees of United Investors, none of whom will receive additional compensation
therefor. Brokerage houses, nominees and other similar record holders will be
requested to forward proxy materials to the beneficial owners of the common
shares and will be reimbursed by United Investors upon request for their
reasonable out-of-pocket expenses.
ANNUAL REPORT
United Investors has provided without charge a copy of the Annual Report to
Shareholders for fiscal year 1999 to each person being solicited by this Proxy
Statement. Upon the written request by any person being solicited by this Proxy
Statement, United Investors will provide without charge a copy of the Annual
Report on Form 10-K as filed with the Securities and Exchange Commission
(excluding exhibits, for which a reasonable charge shall be imposed). All such
requests should be directed to R. Steven Hamner, Vice President-Chief Financial
Officer, United Investors Realty Trust, 5847 San Felipe, Suite 850, Houston,
Texas 77057.
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UNITED INVESTORS REALTY TRUST
ANNUAL MEETING OF SHAREHOLDERS
MAY 17, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUST MANAGERS
The shareholder of United Investors Realty Trust, a Texas real estate investment
trust, whose name and signature appear on the reverse side of this card, having
received the notice of the annual meeting of shareholders and the related proxy
statement for United's annual meeting of shareholders to be held at the Terrace
Hotel, 329 East Main Street, Lakeland, Florida, on Tuesday, May 16, 2000, at
11:30 a.m., local time, hereby appoints Robert W. Scharar and R. Steven Hamner
the proxies of the shareholder, and either of them, each with full power of
substitution, to vote at the annual meeting, and at any adjournments of the
annual meeting, all common shares, of United stock that the shareholder is
entitled to vote, in the manner shown on the reverse side of this card.
THIS PROXY IS SOLICTED BY THE BOARD OF TRUST MANAGERS AND THE COMMON SHARES
REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH THE SHAREHOLDER'S DIRECTIONS
ON THE REVERSE SIDE OF THE CARD. IF NO DIRECTION IS GIVEN, THEN THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND IN THE
PROXIES' DISCRETION ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
ANNUAL MEETING OR ANY ADJOURNMENTS THEREOF, SUBJECT TO LIMITATIONS SET FORTH IN
APPLICABLE REGULATIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.
Please mark, sign, date, and return this proxy card promptly using the enclosed
envelope. If you plan to attend the meeting, please so indicate in the space
provided on the reverse side.
SEE REVERSE SIDE
<PAGE>
UNITED INVESTORS REALTY TRUST
PLEASE MARK YOUR VOTE IN THE FOLLOWING MANNER USING DARK INK ONLY: [ X]. THIS
PROXY, WHEN PROPERLY EXECUTED AND DELIVERED, WILL BE VOTED AS SPECIFIED BELOW.
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. THE
PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
THE BOARD OF TRUST MANAGER RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. Election of Trust Managers.
[ ] FOR all nominees listed below [ ] Withhold Authority to vote for all
(except as marked to the nominees listed below
contrary)
Robert W. Scharar, William C. Brooks, Josef C. Hermans, and Frederick E. Fisher.
INSTRUCTION: To withhold authority to vote for any individual nominee, list the
individual's name below.
- --------------------------------------------------------------------------------
2. Ratification of Ernst & Young LLP as United's independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon all other
matters which may properly come before the annual meeting or any
adjournments of the annual meeting.
The undersigned hereby revokes any proxy previously given with respect to
United's common shares and hereby ratifies and confirms all that the proxies,
their substitutes or any of them may lawfully do by virtue hereof.
Signature _______________________________________________ Date _____________
Signature _______________________________________________ Date _____________
Note: Please sign exactly as name(s) appear(s) on this card. When shares are
held jointly, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. When
executed by a corporation or partnership, please sign in full corporate or
partnership name by a duly authorized officer or partner, giving title. Please
sign, date and mail this proxy promptly whether or not you expect to attend the
meeting. You may nevertheless vote in person if you do attend.
SEE REVERSE SIDE
