UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1997
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or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from to
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Commission File Number: 1-10850
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PUBLIC STORAGE PROPERTIES XX, INC.
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(Exact name of registrant as specified in its charter)
California 95-4300893
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
701 Western Avenue
Glendale, California 91201-2397
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (818) 244-8080
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock Series A, American Stock Exchange
$.01 par value
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Securities registered pursuant to Section 12(g) of the Act:
None
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [ X ] Yes [ ] No
Item 10. Directors and Executive Officers of the Company.
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Public Storage Properties XX, Inc. (the "Company") was formed in
December 1990 for the purpose of succeeding to the business of Public Storage
Properties XX, Ltd., a California Limited Partnership (the "Partnership") in a
reorganization transaction (the "Reorganization"). The Partnership's general
partners (the "General Partners") were PSI Associates II, Inc. and B. Wayne
Hughes. The Reorganization was effective on August 27, 1991 and subsequently,
the Partnership was dissolved. The Company has elected to be taxed as a real
estate investment trust ("REIT") for federal income tax purposes.
Set forth below is information regarding the directors and executive
officers of the Company:
Name Positions
---- ---------
B. Wayne Hughes Chairman of the Board and Chief Executive
Officer
Harvey Lenkin President
David P. Singelyn Vice President and Chief Financial Officer
David Goldberg Vice President and General Counsel
A. Timothy Scott Vice President and Tax Counsel
Obren B. Gerich Vice President and Secretary
Vern O. Curtis Director
Jack D. Steele Director
B. Wayne Hughes, age 64, has been Chairman of the Board and Chief
Executive Officer of the Company since its inception in 1990. Mr. Hughes has
been a director of Public Storage, Inc. ("PSI"), the Company's mini-warehouse
property operator, since its organization in 1980 and was President and Co-Chief
Executive Officer from 1980 until November 1991 when he became Chairman of the
Board and sole Chief Executive Officer. Mr. Hughes was Chairman of the Board and
Chief Executive Officer from 1990 until March 16, 1998 of Public Storage
Properties XI, Inc., now known as PS Business Parks, Inc. ("PSBP"), a REIT
affiliated with PSI. From 1989-90 until the respective dates of merger, he was
Chairman of the Board and Chief Executive Officer of Public Storage Properties
VI, Inc., Public Storage Properties VII, Inc., Public Storage Properties VIII,
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Inc., Public Storage Properties IX, Inc., Public Storage Properties X, Inc.,
Public Storage Properties XII, Inc., Public Storage Properties XIV, Inc.
("PSP14"), Public Storage Properties XV, Inc. ("PSP15"), Public Storage
Properties XVI, Inc. ("PSP16"), Public Storage Properties XVII, Inc. ("PSP17"),
Public Storage Properties XVIII, Inc. ("PSP18"), Public Storage Properties XIX,
Inc. ("PSP19"), PS Business Parks, Inc., Partners Preferred Yield, Inc.,
Partners Preferred Yield II, Inc., Partners Preferred Yield III, Inc. and
Storage Properties, Inc. ("SPI") (collectively, the "Merged Public Storage
REITs"), affiliated REITs that were merged into PSI between September 1994 and
June 1997. He has been active in the real estate investment field for over 25
years.
Harvey Lenkin, age 61, has been President of the Company since its
inception in 1990. Mr. Lenkin has been employed by PSI for 20 years and became
President and a director of PSI in November 1991. He has been a director of PSBP
since March 16, 1998 and was President of PSBP from 1990 until March 16, 1998.
Mr. Lenkin was President of the Merged Public Storage REITs from 1989-90 until
the respective dates of merger and was also a director of SPI from 1989 until
June 1996. He is a director of the National Association of Real Estate
Investment Trusts (NAREIT).
David P. Singelyn, age 36, a certified public accountant, was
Controller of the Company from November 1995 until December 1996 when he became
Vice President and Chief Financial Officer. Mr. Singelyn has been employed by
PSI since 1989 and became Vice President and Treasurer of PSI in November 1995.
He was Vice President and Controller of SPI from 1991 until June 1996. From 1987
to 1989, Mr. Singelyn was Controller of Winchell's Donut Houses, L.P.
David Goldberg, age 48, became Vice President and General Counsel of
the Company in December 1995. Mr. Goldberg became Senior Vice President and
General Counsel of PSI in November 1995. He joined PSI's legal staff in June
1991. From December 1982 until May 1991, he was a partner in the law firm of
Sachs & Phelps, then counsel to PSI.
A. Timothy Scott, age 46, became Vice President and Tax Counsel of the
Company in November 1996. Mr. Scott became Senior Vice President and Tax Counsel
of PSI in November 1996. From June 1991 until joining PSI, he practiced tax law
as a shareholder of the law firm of Heller, Ehrman, White & McAuliffe, counsel
to PSI. Prior to June 1991, his professional corporation was a partner in the
law firm of Sachs & Phelps, then counsel to PSI.
Obren B. Gerich, age 59, a certified public accountant, has been Vice
President and Secretary of the Company since its inception in 1990 and was Chief
Financial Officer until November 1995. He has been a Vice President of PSI since
1980, became Senior Vice President of PSI in November 1995 and was Chief
Financial Officer of PSI until November 1991. He was Vice President and
Secretary of the Merged Public Storage REITs from 1989-90 until the respective
dates of merger.
Vern O. Curtis, age 63, 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 has also been a director of PSBP since 1990. Mr. Curtis is also
a director of the Pimco Funds, Pimco Commercial Mortgage Securities Trust, Inc.
and Fresh Choice, Inc. He was a director of the Merged Public Storage REITs from
1989-90 until the respective dates of merger. 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.
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Jack D. Steele, age 74, a member of the Audit Committee, has been a
director of the Company since its inception in 1990. Mr. Steele has also been a
director of PSBP since 1990. He is also a director of M.C. Gill and CRG
Compensation Resource Group. Mr. Steele is a business consultant. He was a
director of the Merged Public Storage REITs from 1989-90 until the respective
dates of merger. 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.
Item 11. Executive Compensation.
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Compensation of Directors
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Each of the Company's directors, other than B. Wayne Hughes, receives
director's fees of $2,000 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.
Compensation of Executive Officers
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Set forth below is certain compensation relating to B. Wayne Hughes,
the Company's Chief Executive Officer. The Company has no executive officer who
earned $100,000 or more in 1997 for services rendered to the Company.
Summary Compensation Table
Annual Compensation
Name and Principal Position Year Salary
--------------------------- ---- ------
B. Wayne Hughes 1997 $ 500
Chairman of the Board and 1996 500
Chief Executive Officer 1995 500
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company does not have a compensation committee. Mr. Hughes, the
Chief Executive Officer of the Company, is a member of the Board of Directors.
During 1997, Mr. Hughes was a director and the chief executive officer of PSBP
(and during part of 1997, Mr. Hughes was a director and the chief executive
officer of PSP14, PSP15, PSP16, PSP17, PSP18 and PSP19). Mr. Hughes also is the
chief executive officer and a director of PSI, of which Harvey Lenkin, the
President of the Company, is the president and a director. Neither PSI nor PSBP
has (nor did PSP14, PSP15, PSP16, PSP17, PSP18 or PSP19 have) a compensation
committee.
Certain Relationships and Related Transactions
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MANAGEMENT AGREEMENT. The Company has a Management Agreement with PSI
pursuant to which the Company pays PSI a fee of 6% of the gross revenues of the
mini-warehouse spaces operated for the Company. During 1997, the Company paid or
accrued fees of $205,000 to PSI pursuant to the Management Agreement.
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PROPOSED MERGER. In February 1998, the Company and PSI agreed, subject
to certain conditions, to merge. Upon the merger, each outstanding share of the
Company's Common Stock Series A (other than shares held by PSI or by holders of
the Company's Common Stock Series A ("Series A Shareholders") who have properly
exercised dissenters' rights under California law ("Dissenting Shares")) will be
converted into the right to receive cash, PSI common stock or a combination of
the two, as follows: (i) with respect to a certain number of shares of the
Company's Common Stock Series A (not to exceed 20% of the outstanding Common
Stock Series A of the Company, less any Dissenting Shares), upon a Series A
Shareholder's election, $22.57 in cash, subject to reduction as described below
or (ii) that number (subject to rounding) of shares of PSI common stock
determined by dividing $22.57, subject to reduction as described below, by the
average of the per share closing prices on the New York Stock Exchange of PSI
common stock during the 20 consecutive trading days ending on the fifth trading
day prior to the special meeting of the Company's shareholders. The
consideration paid by PSI to the Series A Shareholders in the merger will be
reduced by the amount of cash distributions required to be paid to the Series A
Shareholders by the Company prior to completion of the merger (estimated at $.93
per share) in order to satisfy the Company's REIT distribution requirements
("Required REIT Distributions"). The consideration received by the Series A
Shareholders in the merger, however, along with any Required REIT Distributions,
will not be less than $22.57 per share of the Company's Common Stock Series A,
which amount represents the interest of the Series A Shareholders in the market
value of the Company's real estate assets at October 1, 1997 (based on an
independent appraisal) and the interest of the Series A Shareholders in the
estimated net asset value of its other assets at April 30, 1998. Additional
distributions will be made to the Series A Shareholders to cause the Company's
estimated net asset value allocable to the Series A Shareholders as of the date
of the merger to be substantially equivalent to $22.57 per share. Upon the
merger, each share of the Company's Common Stock Series B and Common Stock
Series C (other than shares held by PSI) would be converted into the right to
receive $10.90 in PSI common stock (valued as in the case of the Company's
Common Stock Series A) plus (i) any additional distributions equal to the amount
by which the Company's estimated net asset value allocable to the holders of the
Company's Common Stock Series B and C as of the date of the merger exceeds
$10.90 per share and (ii) the estimated Required REIT Distributions payable to
the holders of the Company's Common Stock Series B of $.93 per share. The common
stock of the Company held by PSI will be canceled in the merger. The merger is
conditioned on, among other requirements, approval by the Company's
shareholders. It is expected that the merger will close in the second quarter of
1998. PSI and B. Wayne Hughes own 29.8% of the total combined shares of the
Company's Common Stock Series A, B and C.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
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Security Ownership of Certain Beneficial Owners
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Information regarding beneficial ownership of shares of the Company's
common stock by B. Wayne Hughes (a beneficial owner of more than 5% of the
Company's combined outstanding shares of Common Stock Series A, Common Stock
Series B and Common Stock Series C) is set forth under "Security Ownership of
Management" below. The following table sets forth information as of the dates
indicated with respect to the other persons known to the Company to be the
beneficial owner of more than 5% of the Company's combined outstanding shares of
Common Stock Series A, Common Stock Series B and Common Stock Series C (or
Common Stock Series A):
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Shares of Common Stock,
$.01 Par Value,
Beneficially Owned(1)
---------------------------------
Number
Name and Address of Shares(2)(3) Percent
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PSI A: 11,909(4) A: 1.4%
701 Western Avenue, Suite 200 B: 90,859(4) B: 100.0%
Glendale, California 91201-2397 C: 257,432(4) C: 100.0%
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360,200(4)(5) 29.8%
Loeb Arbitrage Fund A: 44,300(6) A: 5.1%
Loeb Partners Corporation
61 Broadway
New York, New York 10006
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(Footnotes to the table are set forth following the table under "Security
Ownership of Management" below).
Security Ownership of Management
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The following table sets forth information as of March 31, 1998
concerning the security ownership of each director of the Company (including B.
Wayne Hughes, the only executive officer named under Item 11) and of all
directors and executive officers of the Company as a group:
Shares of Common Stock,
$.01 Par Value,
Beneficially Owned(1)
---------------------------------
Number
Name of Shares(2)(3) Percent
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B. Wayne Hughes A: 609.0(7) A: (8)
B: 18,171.8(7) B: 20.0%
C: 51,486.4(7) C: 20.0%
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70,267.2(5)(7) 5.8%
Vern O. Curtis A: 500.0 (8)
Jack D. Steele A: 100.0(9) (8)
All Directors and Executive A: 1,209.0(7)(9) A: 0.1%
Officers as a Group B: 18,171.8(7) B: 20.0%
(eight persons) C: 51,486.4(7) C: 20.0%
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70,867.2(5)(7)(9) 5.9%
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(1) 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 the shares.
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(2) Capital letters "A", "B" and "C" denote share information with
respect to Common Stock Series A, Common Stock Series B and Common
Stock Series C, respectively.
(3) The Company's Articles of Incorporation provide that the Common Stock
Series B and Common Stock Series C will convert automatically into
Common Stock Series A on a share-for-share basis when (A) the sum of
(1) all cumulative dividends and other distributions from all sources
paid with respect to the Common Stock Series A (including liquidating
distributions, but not including payments made to redeem such stock
other than in liquidation) and (2) the cumulative Partnership
distributions from all sources with respect to all Partnership units
(including the General Partners' 1% interest) equals (B) the product
of $20 multiplied by the number of then outstanding "Original Series
A Shares." The term "Original Series A Shares" means the shares of
Common Stock Series A issued in the Reorganization.
(4) This information is as of March 31, 1998 and includes (i) 11,700
shares of Common Stock Series A, 72,687.2 shares of Common Stock
Series B and 205,945.6 shares of Common Stock Series C owned by PSI
as to which PSI has sole voting and dispositive power and (ii) 209
shares of Common Stock Series A, 18,171.8 shares of Common Stock
Series B and 51,486.4 shares of Common Stock Series C which PSI has
an option to acquire (together with other securities) from B. Wayne
Hughes as trustee of the B.W. Hughes Living Trust and as to which PSI
has sole voting power (pursuant to an irrevocable proxy) and no
dispositive power.
(5) Includes Common Stock Series A, Common Stock Series B and Common
Stock Series C.
(6) This information is based on a Schedule 13D dated August 13, 1997
filed by Loeb Arbitrage Fund and Loeb Partners Corporation. As of
August 13, 1997, Loeb Arbitrage Fund beneficially owned 39,145 shares
of Common Stock Series A and Loeb Partners Corporation beneficially
owned 5,155 shares of Common Stock Series A. Loeb Arbitrage Fund has
sole voting and sole dispositive power with respect to 39,145 shares,
and Loeb Partners Corporation has sole voting and dispositive power
with respect to 3,087 shares and shared voting and dispositive power
with respect to 2,068 shares.
(7) Includes (i) 209 shares of Common Stock Series A, 18,171.8 shares of
Common Stock Series B and 51,486.4 shares of Common Stock Series C
owned by B. Wayne Hughes as trustee of the B.W. Hughes Living Trust
as to which Mr. Hughes has sole dispositive power and no voting
power; PSI has an option to acquire these shares and an irrevocable
proxy to vote these shares (see footnote (4) above), and (ii) 400
shares of Common Stock Series A owned by B. Wayne Hughes' wife as
trustee FBO Parker Hughes Trust dtd 3/7/91.
(8) Less than 0.1%.
(9) Shares held by a bank custodian of a simplified employee pension for
the benefit of Mr. Steele.
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Item 13. Certain Relationships and Related Transactions.
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See "Compensation Committee Interlocks and Insider Participation --
Certain Relationships and Related Transactions" under Item 11.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
PUBLIC STORAGE PROPERTIES XX, INC.
(Registrant)
Dated: April 1, 1998 By: /s/ DAVID GOLDBERG
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Name: David Goldberg
Title: Vice President
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