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, 1996
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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: 1-10913
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PUBLIC STORAGE PROPERTIES XIX, INC.
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(Exact name of registrant as specified in its charter)
California 95-4325981
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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
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 XIX, Inc. (the "Company") was formed
in December 1990 for the purpose of succeeding to the business of Public
Storage Properties XIX, 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 October 30, 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.
In 1995, there were a series of mergers among Public Storage
Management, Inc. (which was the Company's mini-warehouse property
operator) ("PSMI"), Public Storage, Inc. and their affiliates,
culminating in the November 16, 1995 merger (the "PSMI Merger") of PSMI
into Storage Equities, Inc. As a result of the PSMI Merger, Storage
Equities, Inc. was renamed Public Storage, Inc. ("PSI") and PSI acquired
substantially all of the United States real estate operations of PSMI and
became the operator of the Company's mini-warehouse properties.
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
Hugh W. Horne Vice President
Vern O. Curtis Director
Jack D. Steele Director
B. Wayne Hughes, age 63, has been Chairman of the Board and
Chief Executive Officer of the Company since its inception in 1990. Mr.
Hughes has been Chairman of the Board and Chief Executive Officer since
1990 of Public Storage Properties XI, Inc., Public Storage Properties
XVI, Inc., Public Storage Properties XVII, Inc., Public Storage
Properties XVIII, Inc. and Public Storage Properties XX, Inc.
(collectively, the "Public Storage REITs"), real estate investment trusts
organized by an affiliate of PSMI. He has been a director of 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 an officer and director of affiliates
of PSMI and a director of PSMI until November 1995. 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, Inc., Public
Storage Properties IX, Inc. ("PSP9"), Public Storage Properties X, Inc.
("PSP10"), Public Storage Properties XII, Inc. ("PSP12"), Public Storage
Properties XIV, Inc. ("PSP14"), Public Storage Properties XV, Inc.
("PSP15"), PS Business Parks, Inc. ("PSBP"), Partners Preferred Yield,
Inc. ("PPY"), Partners Preferred Yield II, Inc. ("PPY2"), Partners
Preferred Yield III, Inc. ("PPY3") and Storage Properties, Inc. ("SPI")
(collectively, the "Merged Public Storage REITs"), affiliated REITs that
were merged into PSI between September 1994 and April 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. He has been President of the Public Storage REITs
since 1990. Mr. Lenkin became President and a director of PSI in
November 1991. He was an officer and director of PSMI and its affiliates
until November 1995. 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.
David P. Singelyn, age 35, 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 was
Controller of the Public Storage REITs from November 1995 until December
1996 when he became Vice President and Chief Financial Officer. In
November 1995, he became Vice President and Treasurer of PSI. Mr.
Singelyn was employed by affiliates of PSMI from 1989 until 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 47, 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 and Vice President
and General Counsel of the Public Storage REITs in December 1995. He
joined PSMI's legal staff in June 1991, rendering services on behalf of
PSI, PSMI, the Company and the Public Storage REITs. From December 1982
until May 1991, he was a partner in the law firm of Sachs & Phelps, then
counsel to PSI and PSMI.
A. Timothy Scott, age 45, became Vice President and Tax Counsel
of the Company in November 1996. Mr. Scott became Senior Vice President
and Tax Counsel of PSI and Vice President and Tax Counsel of the Public
Storage REITs 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 and PSMI. Prior to June 1991, his
professional corporation was a partner in the law firm of Sachs & Phelps,
then counsel to PSI and PSMI.
Obren B. Gerich, age 58, 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. Mr. Gerich has
been Vice President and Secretary of the Public Storage REITs since 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.
Mr. Gerich was an officer and director of PSMI and its affiliates until
November 1995. He was Vice President and Secretary of the Merged Public
Storage REITs from 1989-90 until the respective dates of merger.
Hugh W. Horne, age 52, has been a Vice President of the Company
and of the Public Storage REITs since June 1993. Mr. Horne has been a
Vice President of PSI since 1980 and was Secretary of PSI from 1980 until
February 1992 and became Senior Vice President of PSI in November 1995.
He is responsible for managing all aspects of property acquisition for
PSI. Mr. Horne was an officer and director of affiliates of PSMI and an
officer of PSMI until November 1995. He was a Vice President of SPI from
1989 until June 1996 and of the other Merged Public Storage REITs from
June 1993 until the respective dates of merger.
Vern O. Curtis, age 62, 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 the Public
Storage REITs 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.
Jack D. Steele, age 73, 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 the Public Storage REITs since 1990. He is
also a director of Rohr, Inc. 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 1996 for services
rendered to the Company.
Summary Compensation Table
Annual Compensation
Name and Principal Position Year Salary
B. Wayne Hughes 1996 $2,000
Chairman of the Board and 1995 2,000
Chief Executive Officer 1994 2,000
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. Mr. Hughes is a director and the chief executive
officer of the five Public Storage REITs (and during all or part of 1996,
Mr. Hughes was a director and the chief executive officer of PSP9, PSP10,
PSP12, PSP14, PSP15, PSBP, PPY, PPY2 and PPY3). Mr. Hughes also is the
chief executive officer and a director of PSI, of which Harvey Lenkin,
President of the Company, is the president and a director (and until June
1996, Mr. Hughes was also a director and the chief executive officer of
SPI, of which Mr. Lenkin was the president and a director). Neither PSI
nor any of the five Public Storage REITs has (nor did PSP9, PSP10, PSP12,
PSP14, PSP15, PSBP, PPY, PPY2, PPY3 or SPI have) a compensation
committee.
Certain Relationships and Related Transactions
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Management Agreements. 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
1996, the Company paid or accrued fees of $125,000 to PSI pursuant to the
Management Agreement, exclusive of the prepayment made by the Company to
PSI in November 1995 of eight months of 1996 management fees at a cost of
$207,000.
Through 1996, the Company's commercial properties were managed
by Public Storage Commercial Properties Group, Inc. ("PSCP") pursuant to
a Management Agreement which provides for the payment of a fee by the
Company of 5% of the gross revenues of the commercial space operated for
the Company. During 1996, the Company paid or accrued $118,000 to PSCP
pursuant to the Management Agreement. PSI has a 95% economic interest in
PSCP (represented by nonvoting preferred stock) and B. Wayne Hughes and
members of his family (the "Hughes Family") had a 5% economic interest in
PSCP (represented by voting common stock) until December 1996, when the
Hughes Family sold its interest to Ronald L. Havner, Jr., formerly Senior
Vice President and Chief Financial Officer of PSI, who became the Chief
Executive Officer of PSCP. PSCP issued additional voting common stock to
two other unaffiliated investors. In January 1997, American Office Park
Properties, L.P. ("AOPPLP") became the manager of the Company's
commercial properties pursuant to the Management Agreement. AOPPLP is an
operating partnership formed to own and operate business parks in which
PSI has an approximate 85% economic interest. The general partner of
AOPPLP is PSCP, now known as American Office Park Properties, Inc.
Each Management Agreement, as amended in February 1995,
provides that the Management Agreement will expire in February 2002
provided that in February of each year it shall be automatically extended
for one year (thereby maintaining a seven-year term) unless either party
notifies the other that the Management Agreement is not being extended,
in which case it expires, on the first anniversary of its then scheduled
expiration date. Each Management Agreement may also be terminated by
either party for cause.
Proposed Merger. In April 1997, 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, $16.72 in cash, subject to reduction as described
below or (ii) that number (subject to rounding) of shares of PSI common
stock determined by dividing $16.72, 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 $.35 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 $16.72 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 March 17, 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 June 30, 1997. 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 $16.72 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 (or deemed to be converted) into the right to receive $1.41
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 $1.41 per share and (ii) the estimated Required REIT
Distributions payable to the holders of the Company's Common Stock
Series B of $.35 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 PSI's board of directors, receipt of a
satisfactory fairness opinion by the Company and approval by the
Company's shareholders. It is expected that the merger will close in the
second half of 1997. PSI and B. Wayne Hughes own 42.2% of the total
combined shares of the Company's Common Stock Series A, B and C (the
"Total Company Common Stock"). The Company's executive officers and
directors, excluding B. Wayne Hughes, own an additional 0.09% of the
Total Company Common Stock and members of B. Wayne Hughes' family own an
additional 0.1% of the Total Company Common Stock.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
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Security Ownership of Certain Beneficial Owners
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The following table sets forth information with respect to the
only person known to the Company to be the beneficial owner of more than
5% of the Company's outstanding shares of Common Stock Series A, Common
Stock Series B and Common Stock Series C (the "Common Stock") (or Common
Stock Series A):
Shares of Common Stock,
$.01 Par Value,
Beneficially Owned as of
April 15, 1997(1)
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Number
Name and Address of Shares(2)(3) Percent
PSI A: 646,796(4) A: 21.4%
701 Western Avenue, Suite 200 B: 283,224(4) B: 100.0%
Glendale, California 91201-2397 C: 802,466(4) C: 100.0%
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1,732,486(4)(5) 42.2%
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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 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 as of
April 15, 1997(1)
---------------------------------
Number
Name of Shares(2)(3) Percent
B. Wayne Hughes A: 1,751(6) (7)
Vern O. Curtis A: 1,500 (7)
Jack D. Steele A: 2,100(8) (7)
All Directors and Executive A: 5,351(6)(8) A: 0.2%
Officers as a Group
(nine persons)
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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.
(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) Includes (i) 646,145 shares of Common Stock Series A, 283,224 shares
of Common Stock Series B and 802,466 shares of Common Stock Series C
owned by PSI as to which PSI has sole voting and dispositive power
and (ii) 651 shares of Common Stock Series A 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) Includes (i) 651 shares of Common Stock Series A 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) 1,100 shares of Common
Stock Series A owned by B. Wayne Hughes' wife as trustee FBO Parker
Hughes Trust dtd 3/7/91.
(7) Less than 0.1%.
(8) Includes 1,100 shares of Common Stock Series A held by a bank
custodian of a simplified employee pension for the benefit of Mr.
Steele and 1,000 shares of Common Stock Series A held by a bank
custodian of an individual retirement account for the benefit of Mrs.
Marion L. Steele (Mr. Steele's wife).
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.
<PAGE>
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 XIX, INC.
(Registrant)
Dated: April 30, 1997 By: /s/OBREN B. GERICH
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Name: Obren B. Gerich
Title: Vice President
