<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
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 Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
KIMCO REALTY CORPORATION
------------------------------------------------------------------------
(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)(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:
<PAGE>
KIMCO REALTY CORPORATION
3333 NEW HYDE PARK ROAD
NEW HYDE PARK, NY 11042-0020
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 20, 1999
Notice is hereby given of, and you are cordially invited to attend the 1999
Annual Meeting of Stockholders (the "Meeting") of Kimco Realty Corporation, a
Maryland corporation (the "Company"), to be held on Thursday, May 20, 1999, at
10 o'clock a.m. at 270 Park Avenue, 11th Floor, Room C, New York, NY 10017 for
the following purposes:
1. To elect seven Directors to serve for a term of one year and until
their successors are duly elected and qualify;
2. To consider and vote upon a proposal to amend the charter of the
Company to (a) increase the number of authorized shares of Common
Stock of the Company, par value $.01 per share, from 100,000,000
shares to 200,000,000 shares, (b) increase the number of authorized
shares of Excess Stock of the Company, par value $.01 per share, from
51,000,000 shares to 102,000,000 shares, and (c) increase the number
of authorized shares of Preferred Stock of the Company, par value
$1.00 per share, from 3,470,000 shares to 5,000,000 shares; and
3. To transact such other business as may properly come before the
Meeting or any adjournment(s) or postponement(s) thereof.
Only common stockholders of record at the close of business on April 6,
1999, will be entitled to vote at the Meeting or any adjournment(s) or
postponement(s) thereof.
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING IN PERSON, PLEASE SIGN AND
DATE THE ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Bruce M. Kauderer
---------------------
Bruce M. Kauderer
Secretary
April 12, 1999.
<PAGE>
KIMCO REALTY CORPORATION
3333 NEW HYDE PARK ROAD, NEW HYDE PARK, NY 11042-0020
-------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
to be held on May 20, 1999
This Proxy Statement is furnished to common stockholders of Kimco Realty
Corporation, a Maryland corporation (the "Company"), in connection with the
solicitation of proxies in the form enclosed herewith for use at the 1999 Annual
Meeting of Stockholders (the "Meeting") of the Company to be held on Thursday,
May 20, 1999, at 10 o'clock a.m. for the purposes set forth in the Notice of
Annual Meeting of Stockholders.
This solicitation is made on behalf of the Board of Directors of the
Company (the "Board of Directors" or the "Board"). Costs of this solicitation
will be borne by the Company. Directors, officers and employees of the Company
and its affiliates may also solicit proxies by telephone, telegraph, fax or
personal interview. The Company will reimburse banks, brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy material to stockholders.
The Company's Annual Report for the calendar year ended December 31, 1998,
has been mailed with this Proxy Statement. This Proxy Statement and the enclosed
form of proxy were mailed to stockholders on or about April 19, 1999. The
principal executive offices of the Company are located at 3333 New Hyde Park
Road, New Hyde Park, New York 11042-0020; telephone (516) 869-9000.
Holders of record of the Common Stock of the Company, par value $.01 per
share (the "Common Stock"), as of the close of business on the record date,
April 6, 1999, are entitled to receive notice of, and to vote at, the Meeting.
The outstanding Common Stock constitutes the only class of securities entitled
to vote at the Meeting, and each share of Common Stock entitles the holder
thereof to one vote. At the close of business on April 6, 1999, there were
60,181,610 shares of Common Stock issued and outstanding.
Shares represented by proxies in the form enclosed, if such proxies are
properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned form of
proxy, the shares will be voted FOR the election of all nominees for Director
(See Proposal 1), and FOR the proposed amendment of the Company's charter (See
Proposal 2) to increase the number of authorized shares of Common Stock, Excess
Stock, par value $.01 per share (the "Excess Stock") and Preferred Stock, par
value $1.00 per share (the "Preferred Stock"). To be voted, proxies must be
filed with the Secretary of the Company prior to voting. Proxies may be revoked
at any time before exercise by filing a notice of such revocation, by filing a
later dated proxy with the Secretary of the Company or by voting in person at
the Meeting. Dissenting stockholders will not have rights of appraisal with
respect to any matter to be acted upon at the meeting.
Under Maryland law, shares represented by proxies that reflect abstentions
or "broker non-votes" (i.e., shares held by a broker or nominee which are
represented at the Meeting, but with respect to which such broker or nominee is
not empowered by the beneficial owner of the stock to vote on a particular
proposal) will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum.
1
<PAGE>
PROPOSAL 1
Election of Directors
The Company's By Laws provide that all directors be elected at each annual
meeting of stockholders. Pursuant to the Company's charter and such By Laws, the
Directors have fixed the number of directors to be elected at seven. The persons
named as proxies in the accompanying form of proxy intend to vote in favor of
the election of the seven nominees for director designated below, all of whom
are presently directors of the Company, to serve until the next annual meeting
of stockholders and until their respective successors are duly elected and
qualify. It is expected that each of these nominees will be able to serve, but
if any such nominee is unable to serve, the proxies may vote for another person
nominated by the Board of Directors or the Board may amend the By Laws to reduce
the number of directors to be elected at the meeting.
Information Regarding Nominees (as of April 6, 1999)
Present Principal Occupation or
Name Age Employment and Five-Year Employment History
---- --- -------------------------------------------
Martin S. Kimmel(2)(3) 83 Chairman (Emeritus) of the Board of
Directors of the Company since November
1991; Chairman of the Board of Directors of
the Company for more than five years prior
to such date. Founding member of the
Company's predecessor in 1966.
Milton Cooper(2)(3) 70 Chairman of the Board of Directors of the
Company since November 1991; Director and
President of the Company for more than five
years prior to such date. Founding member
of the Company's predecessor in 1966.
Richard G. Dooley(1)(3) 69 Director of the Company since December 1991.
Consultant to, and from 1978 to 1993,
Executive Vice President and Chief
Investment Officer of, Massachusetts Mutual
Life Insurance Company.
Michael J. Flynn(2) 63 Vice Chairman of the Board of Directors of
the Company since January 1996 and, since
January 1997, President and Chief Operating
Officer; Director of the Company since
December 1991. Chairman of the Board and
President of Slattery Associates, Inc. for
more than five years prior to joining the
Company in 1996.
Joseph K. Kornwasser 51 Director and Senior Executive Vice President
of the Company since June 1998. President,
Chief Executive Officer and Director of The
Price REIT, Inc. ("Price REIT") from August
1993 to June 1998. From 1984 until 1994,
Mr. Kornwasser was managing general partner
of Kornwasser and Friedman Shopping Center
Properties, a commercial real estate
development company.
Joe Grills(3) 64 Director of the Company since January 1997.
Chief Investment Officer for the IBM
Retirement Funds from 1986 to 1993.
Frank Lourenso (1)(3) 58 Director of the Company since December 1991.
Executive Vice President of The Chase
Manhattan Bank ("Chase Bank", and successor
by merger to Chemical Bank, N.A.) since
1990. Senior Vice President of Chase Bank
for more than five years prior to that
time.
- ---------------------
(1) Member of Audit Committee.
(2) Member of Executive Committee.
(3) Member of Executive Compensation Committee.
2
<PAGE>
Mr. Cooper is also a director of Getty Realty Corp. and Blue Ridge Real
Estate/Big Boulder Corporation and a trustee of MassMutual Corporate Investors
and MassMutual Participation Investors. He also serves as a member of the
Executive Committee of the Board of Governors of the National Association of
Real Estate Investment Trusts.
Mr. Dooley is also a director of Advest Group, Inc., Hartford Steam Boiler
Inspection and Insurance Co. and Jefferies Group, Inc. and a trustee of
MassMutual Corporate Investors and MassMutual Participation Investors.
Mr. Flynn is also Chairman of the Board of Directors of Blue Ridge Real
Estate/Big Boulder Corporation.
Mr. Kornwasser is also Chairman of the Board of Directors of National Bank
of California.
Mr. Grills is also a Director of certain Merrill Lynch and Hotchkis and
Wyley Mutual Funds, Duke Management Company and the LaSalle Street Fund. He also
serves as a member of the Investment Advisory Committees of the State of New
York Common Retirement Fund and the Howard Hughes Medical Institute. Mr. Grills
is a member of the Financial Executives Institute Committee on Investment of
Employee Benefit Assets, its executive committee and is a former chairman of
that committee.
All directors of the Company serve terms of one year and until the election
and qualification of their respective successors. Each of the above Directors,
except for Mr. Kornwasser who joined the Board of Directors in June 1998, was in
attendance at the special meeting held on January 13, 1998 and at each of the
four regular meetings of the Board of Directors held during 1998, which occurred
on February 26, April 30, July 28 and October 29, and each, except Mr. Dooley
and Mr. Lourenso, were in attendance at the 1998 Annual Meeting of Stockholders
held on June 19, 1998. Mr. Kornwasser was in attendance at the regular meetings
held on July 28, 1998 and October 29, 1998.
Committees of the Board of Directors
Audit Committee. The Board of Directors has established an Audit Committee
consisting of two independent Directors to make recommendations concerning the
engagement of independent public accountants, review with the independent public
accountants the plans and results of the audit engagement, approve professional
services provided by the independent public accountants, review the independence
of the independent public accountants, consider the range of audit and non-audit
fees and review the adequacy of the Company's internal accounting controls. One
meeting of the Audit Committee was held during 1998 on February 26, 1998; in
addition, the Audit Committee held a meeting on March 1, 1999.
Executive Committee. The Executive Committee has been granted the authority
to acquire and dispose of real property, to borrow money on behalf of the
Company and to authorize, on behalf of the full Board of Directors, the
execution of certain contracts and agreements (except for contracts between the
Company and KC Holdings, Inc. -- see "Compensation Committee Interlocks and
Insider Participation"). The Executive Committee convened twice during 1998, on
April 30 and October 29.
Executive Compensation Committee. The Board of Directors has established an
Executive Compensation Committee to determine compensation for the Company's
executive officers, in addition to administering the Company's Equity
Participation Plan (as defined herein). One meeting of the Executive
Compensation Committee was held during 1998, on February 26; in addition, the
Executive Compensation Committee held a meeting on March 1, 1999.
Each of the Directors comprising these various Committees of the Board of
Directors was in attendance at all meetings of such Committees held on the dates
indicated above. The Board of Directors has not established a nominating
committee.
3
<PAGE>
Compensation of Directors
Members of the Board of Directors and Committees thereof who are not also
employees of the Company ("Non-employee Directors") receive an annual fee of
$24,000, plus fees of $2,000 for attending each regular or special meeting of
the full Board. The Non-employee Directors, other than Mr. Kimmel, receive $500
for attending Committee meetings. In accordance with the Company's Equity
Participation Plan (as defined herein), the Non-employee Directors may be
granted awards of deferred stock ("Deferred Stock") in lieu of directors' fees.
Unless otherwise provided by the Board, a grantee of Deferred Stock shall have
no rights as a Company stockholder with respect to such Deferred Stock until
such time as the Common Stock underlying the award has been issued. Pursuant to
such arrangements, each of Messrs. Kimmel, Dooley, Grills and Lourenso received
directors' fees of $22,000, $23,000, $24,500 and $23,000, respectively, during
1998. In addition, Messrs. Kimmel, Dooley, Grills and Lourenso each received, in
lieu of directors' fees, Deferred Stock awards valued at $12,000. Employees of
the Company who are also Directors are not paid any directors' fees.
During 1996, 1997 and 1998, the Company granted each Non-employee Director,
other than Mr. Kimmel, options to acquire 7,500 shares of Common Stock at
$28.375, $31.75 and $37.375 per share, respectively, the market prices on the
dates of such option grants. See "Executive Compensation and Transactions with
Management and Others--Executive Compensation and Employment Contracts" for
information concerning stock options granted to Mr. Flynn and Mr. Kornwasser.
The Company intends to grant Non-employee Directors, other than Mr. Kimmel,
options to acquire an additional 7,500 shares during 1999 at the then current
market price.
Mr. Kimmel receives $50,000 per annum as payment for consulting services
rendered to, and reimbursement of certain expenses incurred on behalf of, the
Company.
Vote Required
Assuming the presence of a quorum, a plurality of all the votes cast by the
holders of shares of Common Stock present, in person or by proxy, and entitled
to vote at the Company's Annual Meeting will be sufficient to elect a nominee as
a director. Accordingly, abstentions as to the election of directors will not
affect the election of the candidates receiving the plurality of the votes.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMEND THAT YOU VOTE FOR ALL OF
THE NOMINEES SET FORTH IN THIS PROXY STATEMENT.
4
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information available to the Company
as of April 6, 1999, with respect to shares of its Common Stock and Depositary
Shares representing its Class A, Class B, Class C and Class D Preferred Stock
(as defined herein) (i) held by those persons known to the Company to be the
beneficial owners (as determined under the rules of the Securities and Exchange
Commission, the "SEC") of more than 5% of such shares and (ii) held,
individually and as a group, by the Directors and executive officers of the
Company:
<TABLE>
<CAPTION>
Shares Owned Percent
Beneficially (#) of Class (%)
Name & Address (where required) Depositary Depositary
of Beneficial Owner Common Shares(3) Common Shares(3)
------------------- ------ -------- ------ ---------
<S> <C> <C> <C> <C>
Milton Cooper 4,446,023 (1) (6) 3,000 7.3 *
c/o Kimco Realty Corporation
3333 New Hyde Park Rd.
New Hyde Park, NY 10042
Cohen & Steers Capital 4,124,900 - 6.8 -
Mgmt. Inc.
757 Third Avenue
New York, NY 10017
Martin S. Kimmel 2,700,742 (2) - 4.5 -
c/o Kimco Realty Corporation
3333 New Hyde Park Rd.
New Hyde Park, NY 11042
Helen Kimmel 2,000,086 (4) 182,000 3.3 4.3 (4)
445 Park Avenue
New York, NY 10022
Joseph K. Kornwasser 282,633 101,747 * 2.4
Michael J. Flynn 224,000 - * -
Alex Weiss 202,648 (5) - * -
Richard G. Dooley 70,036 - * -
Joseph V. Denis 63,650 - * -
Bruce M. Kauderer 60,610 - * -
Frank Lourenso 60,406 - * -
Michael V. Pappagallo 49,500 - * -
Glenn G. Cohen 35,990 100 * *
Joe Grills 22,500 - * -
Jerald Friedman 22,421 - * -
Lawrence M. Kronenberg 14,926 5,373 * *
All Directors and executive
officers as a group (14 persons) 8,256,085 (6) 110,220 13.6 2.6
</TABLE>
- --------------------
* Less than 1%
(1) Includes 1,070,889 shares held by Mr. Cooper as trustee for the benefit
of Mr. Kimmel's son. Does not include 255,212 shares held by adult
members of Mr. Cooper's family, as to all of which shares Mr. Cooper
disclaims beneficial ownership.
(2) Does not include 1,070,889 shares held in trust by Mr. Cooper for Mr.
Kimmel's son or 1,218,419 shares held by Helen Kimmel, his wife, as to
all of which shares Mr. Kimmel disclaims beneficial ownership. Also, does
not include 781,667 shares held by foundations and trusts for which Mrs.
Kimmel is a trustee, as to all of which shares Mr. Kimmel disclaims
beneficial ownership.
5
<PAGE>
(3) All Depositary Shares and Percent of Class represent ownership of Class D
Preferred Stock.
(4) Does not include 2,700,742 shares held by Mr. Kimmel, her husband, or
1,070,889 shares held in trust by Mr. Cooper for Mr. Kimmel's son, as to
all of which shares Mrs. Kimmel disclaims beneficial ownership.
(5) Does not include 1,154 shares held by Mrs. Linda Weiss, wife of Mr. Alex
Weiss, an executive officer of the Company, as to all of which shares Mr.
Weiss disclaims beneficial ownership.
(6) Does not include 383,546 shares held by KC Holdings, Inc., a related,
private corporation in which Mr. Cooper holds a controlling interest. See
"Compensation Committee Interlocks and Insider Participation - Transactions
with KC Holdings, Inc."
Executive Compensation and Transactions with Management and Others
Executive Officers. Reference should be made to the Company's annual report
on Form 10-K for the year ended December 31, 1998, incorporated herein by
reference, following Part I, Item IV, for information with respect to the
executive officers of the Company.
Executive Compensation. The following table sets forth the summary
compensation of the Chairman of the Board of Directors (and Chief Executive
Officer) and the four other most highly paid executive officers of the Company
for calendar years 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------- ------
(a) (b) (c) (d) (e) (f) (g) (h)
Other
Name and Annual Restricted All other
Principle Period Salary Bonus Compensation Stock Options Compensation
Position Ended ($) ($) ($) (1) Awards (#) (2) ($) (3)
-------- ----- --- --- ------- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Milton Cooper 12/98 439,731 375,000 - - (4) 8,190
Chief Executive Officer 12/97 283,000 100,000 - - (4) 8,190
and Chairman of the 12/96 282,500 100,000 - - (4) 8,190
Board of Directors
Michael J. Flynn (5) 12/98 485,885 300,000 - - 73,000 4,563
Vice Chairman of the 12/97 358,000 100,000 - - 73,000 4,563
Board of Directors. 12/96 350,000 100,000 - 934,388(6) 73,000 4,563
President & Chief
Operating Officer
since January 1997.
Joseph K. Kornwasser (5) 12/98 234,386 120,000 - - 250,000 -
Senior Executive 12/97 - - - - - -
Vice President since 12/96 - - - - - -
June 1998
Jerald Friedman (5) 12/98 164,251 80,000 - - 100,000 -
Executive Vice 12/97 - - - - - -
President since 12/96 - - - - - -
June 1998
Michael V. Pappagallo (5) 12/98 262,808 150,000 - - 50,000 429
Chief Financial Officer 12/97 148,539 51,667 - - 100,000 429
since May 1997 12/96 - - - - - -
</TABLE>
(1) No named officer received perquisites or other personal benefits
aggregating the lesser of 10% of annual salary and bonus or $50,000.
(2) Options to acquire shares of Common Stock at exercise prices equal to the
fair market value on the dates of grant.
(3) The amounts shown represent the value of Company paid group term life
insurance premiums.
(4) Mr. Cooper is ineligible to participate in the Company's Equity
Participation Plan (as defined herein) for so long as he serves as a member
of the Executive Compensation Committee.
6
<PAGE>
(5) See "Executive Compensation and Transactions with Management and Others -
Employment Contracts".
(6) Restricted stock award covering 37,500 shares of the Company's Common Stock
valued at $1,488,281 based upon the closing price on the New York Stock
Exchange on December 31, 1998. Mr. Flynn is eligible to receive dividends
on such restricted shares at such times and in such amounts as may be
declared by the Board of Directors with respect to all shares of Common
Stock then outstanding.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on options to acquire shares of
the Company's Common Stock granted to the named executive officers during
1998.
<TABLE>
<CAPTION>
Potential Realizable Value at Assumed Annual
Rates of Stock Price Appreciation for
Individual Grants Option Term (1)
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options Option Granted Exercise
Granted to Employees Price Expiration
Name (#) (2) in Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- ------- -------------- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Milton Cooper (3) (3) (3) (3) (3) (3)
Michael J. Flynn 73,000 7.1 37.375 10/21/08 1,715,865 4,348,245
Joseph K. Kornwasser 250,000 24.4 37.437 6/19/08 5,885,750 14,915,750
Jerald Friedman 100,000 9.8 37.437 6/19/08 2,354,300 5,966,300
Michael V. Pappagallo 50,000 4.9 37.375 10/21/08 1,175,250 2,978,250
</TABLE>
(1) Assumed annual rates of stock price appreciation, as determined by the SEC,
for illustrative purposes only. Actual stock prices will vary from time to
time based upon market factors and the Company's financial performance. No
assurance can be given that such rates will be achieved.
(2) Options become exercisable one-third on each of the first three
anniversaries of the date of grant.
(3) Mr. Cooper is ineligible to participate in the Company's Equity
Participation Plan (as defined herein) for so long as he serves as a member
of the Executive Compensation Committee.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table provides information on options to acquire shares of
Common Stock exercised in 1998 by the named executive officers, and the value of
each such officer's unexercised options to acquire shares of Common Stock
outstanding at December 31, 1998.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Unexercised Value of Unexercised In-the-Money
Shares Acquired Value Options at Year End (#) Options at Year End ($)(1)
Name on Exercise (#) Realized ($) Exer. Unexer. Exer. Unexer.
---- --------------- ------------ ---- ------- ----- -------
<S> <C> <C> <C> <C> <C> <C>
Milton Cooper (2) (2) (2) (2) (2) (2)
Michael J. Flynn (3) - - 175,000 146,000 2,396,275 829,481
Joseph K. Kornwasser (3) - - - 250,000 - 562,500
Jerald Friedman (3) - - - 100,000 - 225,000
Michael V. Pappagallo (3) - - 33,000 117,000 272,234 668,317
</TABLE>
(1) Based upon the closing price of the Company's Common Stock on the New York
Stock Exchange on December 31, 1998 of $39.6875 per share.
(2) Mr. Cooper is ineligible to participate in the Company's Equity
Participation Plan (as defined herein) for so long as he serves as a member
of the Executive Compensation Committee.
(3) See "Executive Compensation and Transaction with Management and Others -
Employment Contracts".
Employment Contracts. In November 1998, the Company entered into a new
five-year employment agreement with Mr. Michael J. Flynn pursuant to which Mr.
Flynn continues to serve as Vice Chairman of the Board of Directors and
President and Chief Operating Officer of the Company. In accordance with this
employment agreement, Mr. Flynn (i) is to receive a base salary of $650,000 per
annum, (ii) shall be eligible to receive a bonus in such amounts, if any, as the
Board, in its sole discretion shall determine and (iii) shall be eligible to
receive grants of Common Stock of the Company or options with respect thereto,
in such amounts, if any, as the Board, in its sole discretion shall determine.
In connection with Mr. Flynn's previous employment contract signed in
November 1995, Mr. Flynn received a grant of 37,500 shares of restricted Common
Stock which vested in three equal installments, one-third on each of January 2,
1997, 1998 and 1999. This agreement provided further that Mr. Flynn be granted
options to acquire 75,000 shares of the Company's Common Stock at an exercise
price of $24.917 per share, the market price on the date of grant. These stock
options are to be considered incentive stock options as defined in and to the
extent permitted under the Company's Equity Participation Plan (as defined
herein), and otherwise shall be non-qualified options. Options with respect to
37,500 of these shares vest in three equal installments upon each of the first
three anniversaries of the date of grant. Options with respect to the remaining
37,500 shares vest in three equal installments upon the day prior to each of the
first three anniversaries of the date of grant, but only if the average of the
closing prices of a share of the Company's Common Stock (on the principal
exchange on which such stock is then traded) during any twenty consecutive day
trading period equals or exceeds $33.34, which has occurred.
The Company entered into a three-year employment agreement with Mr. Joseph
K. Kornwasser pursuant to which Mr. Kornwasser, effective June 19, 1998, was
appointed as a director of the Board and began to serve as Senior Executive
Vice President of the Company. In accordance with this employment agreement, Mr.
Kornwasser is to receive $650,000 per annum ($425,000 base salary and $225,000
guaranteed bonus) as compensation for his services. The agreement further
provides that Mr. Kornwasser be granted options to acquire 250,000 shares of the
Company's Common Stock at an exercise price of $37.437 per share, the market
price on the date of grant. These stock options are to be considered qualified
incentive stock options, as defined in and to the extent permitted under the
Company's Equity Participation Plan (as defined herein). Options with respect to
these shares shall vest in three equal installments upon each of the first three
anniversaries of the date of grant. In the event of, and depending upon the
reasons for, a termination of Mr. Kornwasser's employment with the Company prior
to such dates, (i) any such non vested shares
8
<PAGE>
would become 100% vested as of the termination date and (ii) Mr. Kornwasser
would receive severance in the amount equal to the base salary and bonus then in
effect for the greater of the balance of the term of this agreement or one year.
In addition, in the event that the Company determines to distribute to its
stockholders equity interests in one of its subsidiaries that is qualified as a
real estate investment trust and structured to be a so-called "leveraged REIT",
Mr. Kornwasser shall be appointed Chairman of the Board of Directors of such
subsidiary at the time of such distribution and he shall be entitled to receive
options to acquire shares of common stock of such subsidiary equal to 1.5% of
the outstanding (not diluted) common shares of such subsidiary immediately
following their distribution to the Company's stockholders. The exercise price
of such options shall equal the distribution value for tax purposes of the
underlying shares at the time of distribution. Such options shall otherwise be
structured and exercisable with terms similar in all material respects to the
terms of the Equity Participation Plan (as defined herein) of the Company. The
Company shall undertake to cause such subsidiary to effect the registration
under the Securities Act of the shares issuable upon exercise of such options,
including resale thereof. Following any such distribution to the Company's
stockholders, Mr. Kornwasser's salary set forth herein shall be apportioned
between the Company and such subsidiary in the manner determined by the Company.
The Company entered into a three-year employment agreement with Mr. Jerald
Friedman effective June 19, 1998, pursuant to which Mr. Friedman began to serve
as Executive Vice President of the Company. In accordance with this employment
agreement, Mr. Friedman is to receive $450,000 per annum ($300,000 base salary
and $150,000 guaranteed bonus) as compensation for his services. The agreement
further provides that Mr. Friedman be granted options to acquire 100,000 shares
of the Company's Common Stock at an exercise price of $37.437 per share, the
market price on the date of grant. These stock options are to be considered
qualified incentive stock options, as defined in and to the extent permitted
under the Company's Equity Participation Plan (as defined herein). Options with
respect to these shares shall vest in three equal installments upon each of the
first three anniversaries of the date of grant. In the event of, and depending
upon the reasons for, a termination of Mr. Friedman's employment with the
Company prior to such dates, (i) any such non vested shares would become 100%
vested as of the termination date and (ii) Mr. Friedman would receive severance
in the amount equal to the base salary and bonus then in effect for the greater
of the balance of the term of this agreement or one year. In addition, in the
event that the Company determines to distribute to its stockholders equity
interests in one of its subsidiaries that is qualified as a real estate
investment trust and structured to be a so-called "leveraged REIT", Mr. Friedman
shall be entitled to receive options to acquire shares of common stock of such
subsidiary equal to .4% of the outstanding (not diluted) common shares of such
subsidiary immediately following their distribution to the Company's
stockholders. The exercise price of such options shall equal the distribution
value for tax purposes of the underlying shares at the time of distribution.
Such options shall otherwise be structured and exercisable with terms similar in
all material respects to the terms of the Equity Participation Plan (as defined
herein) of the Company. The Company shall undertake to cause such subsidiary to
effect the registration under the Securities Act of the shares issuable upon
exercise of such options, including resale thereof. Following any such
distribution to the Company's stockholders, Mr. Friedman's salary set forth
herein shall be apportioned between the Company and such subsidiary in the
manner determined by the Company.
In April 1997, the Company entered into a two-year employment agreement
with Michael V. Pappagallo pursuant to which Mr. Pappagallo began to serve as
Chief Financial Officer effective May 27, 1997. During 1999, the Company
extended the term of Mr. Pappagallo's employment agreement for a period of one
year. In accordance with this employment agreement, Mr. Pappagallo is to receive
$400,000 per annum ($250,000 base salary and $150,000 guaranteed bonus) as
compensation for his services. The agreement further provides that Mr.
Pappagallo be granted options to acquire 50,000 shares of the Company's Common
Stock at an exercise price of $31.125 per share, the market price on the date
of grant. These stock options are to be considered incentive stock options, as
defined in and to the extent permitted under the Company's Equity Participation
Plan (as defined herein), and otherwise shall be non-qualified options. Options
with respect to these shares shall vest in three equal installments upon each of
the first three anniversaries of the date of grant. In the event of, and
depending upon the reasons for, a termination of Mr. Pappagallo's employment
with the Company prior to such dates, (i) any such non vested shares would
become 100% vested as of the termination date and (ii) Mr. Pappagallo would
receive the remaining compensation due through the term of his employment
agreement.
9
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Executive Compensation Committee of the Board of Directors, comprised
of Messrs. Martin Kimmel, Milton Cooper, Richard Dooley, Joe Grills and Frank
Lourenso, are charged with the responsibility of determining compensation
levels, including awards pursuant to the Company's Equity Participation Plan (as
defined herein), for the named executive officers other than Mr. Cooper. Mr.
Cooper's compensation is subject to review and approval by the members of the
Executive Compensation Committee other than Mr. Cooper and, further, Mr. Cooper
is ineligible to participate in the Company's Equity Participation Plan (as
defined herein) for so long as he serves as a member of this Committee.
Mr. Milton Cooper is Chairman of the Board of Directors of the Company, and
Mr. Martin Kimmel is Chairman Emeritus of the Board. Messrs. Cooper and Kimmel
were founding members of the Company's predecessor in 1966.
Transactions with KC Holdings, Inc. To facilitate its initial public stock
offering in November 1991 (the "IPO"), the Company transferred its interests in
46 shopping center properties to a newly-formed corporation, KC Holdings, Inc.
("KC Holdings"), and subsidiaries of KC Holdings. The stock of KC Holdings is
owned by the stockholders of the Company prior to the IPO. All of the real
estate interests owned by KC Holdings and its subsidiaries are subject to
purchase options held by the Company.
As of April 1, 1999, KC Holdings' subsidiaries had conveyed fourteen
shopping center properties back to the Company and had disposed of ten
additional centers in transactions with third parties. The members of the
Company's Board of Directors who are not also shareholders of KC Holdings have
unanimously approved the Company's acquisition of all fourteen shopping center
properties that have been conveyed back to the Company.
The Company is party to a management agreement pursuant to which it manages
18 of KC Holdings' 22 shopping center properties under terms which the Company
believes are no less favorable than would be obtained in negotiations with an
independent third party. The remaining 4 shopping center properties are owned in
two separate joint ventures and are managed by unaffiliated joint venture
partners. The management agreement was approved by a majority of the Company's
Directors who are not also stockholders of KC Holdings. Management fees paid by
KC Holdings to the Company totaled approximately $.6 million during 1998.
Transactions with Jeffries Group, Inc. During 1998, the Company paid
investment banking fees to Jeffries Group, Inc. ("Jeffries") for services
rendered in connection with the Price REIT acquisition and a common stock
offering. Mr. Richard G. Dooley, a director of the Company since December
1991, is also a director of Jeffries. The Company believes that the fees paid
by it to Jeffries were at customary rates paid for such services.
Joint Ventures. Members of the Company's management have investments in
certain real estate joint ventures or limited partnerships which own and/or
operate seven of the Company's 436 property interests as of December 31, 1998.
Such management investments predate the Company's IPO and, in each case, the
Company is a general partner of the joint venture or partnership and controls or
directs the management of the joint venture or partnership. Any material future
transactions involving these joint ventures or partnerships, such as major
renovations, disposal or sale, will be subject to the approval of a majority of
disinterested directors of the Company.
10
<PAGE>
Relationship with Chase Bank. Mr. Lourenso, an Executive Vice President of
Chase Bank, has been a Director of the Company since December 1991. The Company
has maintained its principal banking relationship with Chase Bank. Chase Bank,
together with a consortium of eight additional banks, has provided the Company
with a $215 million, unsecured revolving credit facility which is scheduled to
expire in August 2001. No borrowings were outstanding under this facility at
December 31, 1998.
Report of the Executive Compensation Committee
on Executive Compensation
The Executive Compensation Committee has provided the following Report on
Executive Compensation:
Compensation Strategy and Performance Criteria. The members of this
Committee believe the Company's success is attributable in large part to the
talent and dedication of its associates and, in particular, to the management
and leadership efforts of its executive officers. Accordingly, the Company,
under the guidance of the Executive Compensation Committee, is committed to
develop and maintain compensation policies, plans and programs which seek to
enhance cash flows, and consequently real property and stockholder values, by
aligning the financial interests of the Company's senior management with those
of its stockholders.
In furtherance of these goals, the Company relies, to a large degree, on
annual and longer term incentive compensation (that is, specifically cash
bonuses and stock option grants) to attract and retain corporate officers and
other key associates of outstanding ability, and to motivate such persons to
perform to their fullest potential. Both of these forms of incentive
compensation are variable and designed to effectuate a pay-for-performance
philosophy which considers management's ability to consistently improve the
Company's Funds from Operations (a widely-accepted measure of performance for
real estate investment trusts) to be of paramount importance. Other performance
criteria which effect incentive awards include the demonstrated ability to
strengthen the Company's capital structure, the measure of improved total return
to stockholders and individual performance/contributions to corporate goals and
objectives.
The Committee annually deliberates the appropriate combination of cash and
stock-based compensation, and weighs the competitiveness of the Company's plans
in relation to compensation practices employed by a select group of successful
real estate investment trusts that are (i) included in the NAREIT equity index
used in the accompanying stock performance graph, and (ii) believed to be
comparable to the Company based on market capitalization, portfolio size and
distribution and product type. In general, the Committee has set base
compensation levels for the Company's executive officers at competitive levels
relative to this peer group. The number of stock options granted annually is an
amount which the Committee, after due consideration of corporate and individual
performance, changes in job function or title, competitive option grant levels
and previously awarded options, considers appropriate to fairly compensate and
properly motivate its officers.
From time to time the Committee may retain compensation and other
management consultants to assist with, among other things, structuring the
Company's various compensation programs and determining appropriate levels of
salary, bonus and other awards payable to the Company's officers and key
personnel, as well as to guide the Company in the development of near-term
individual performance objectives necessary to achieve long-term profitability.
No compensation consultants were retained during the years for which
compensation information has been provided in this Proxy Statement.
1998 Performance. In evaluating 1998 performance, particularly noteworthy
was the Company's ability, under senior management's direction, to increase
Funds from Operations for the year ended December 31, 1998 to $153.7 million, or
$3.03 per share on a diluted basis, from $98.2 million, or $2.59 per share on a
diluted basis, during the preceding year. The growth in Funds from Operations
was achieved through an aggressive acquisition program, the acquisition of Price
REIT and significant accomplishments in new leasing and strategic re-tenanting
within the portfolio which added (i) 30
11
<PAGE>
property interests comprising approximately 4 million square feet of leasable
area, (ii) 43 property interests comprising 8 million square feet of leasable
area in connection with the Price REIT acquisition and (iii) 30 former Venture
locations comprising 3.8 million square feet of leasable area and acquired 93
former Venture leasehold positions. In addition, the Company maintained strong
occupancy levels, and continued to increase in its average annualized base rent
per square foot, capitalizing on its below market-rate rents.
Further, consideration was given to management's ability to continue its
strengthening of the Company's consolidated balance sheet through (i) the
completion of 16 offerings of the Company's Common Stock which has added
approximately $280 million to stockholders' equity providing capital for
property acquisitions and redevelopment projects underway in the portfolio, (ii)
the completion of the Price REIT acquisition through the issuance of
approximately $632.4 million of the Company's Common Stock and preferred stock
and the assumption of approximately $310 million of debt and (iii) effectively
utilizing its medium-term notes (MTN) program to issue $290 million in
cost-effective unsecured debt financing during 1998 providing capital for debt
repayment and property acquisitions. As a consequence of these transactions, the
Company continues to maintain a strong, prudent capital structure as evidenced
by the percentage of its total debt to total market capitalization of 32% at
December 31, 1998.
The strong cash flow performance and strengthening of the Company's capital
structure encouraged investor support of the Company's Common Stock in the
marketplace and produced total returns to stockholders during 1998 of
approximately 18%. As a result of the Company's 1998 performance, the Board of
Directors in October 1998 authorized an increase in dividends on the Common
Stock by 18.8% from $.48 per share to $.57 per share. At the most recent meeting
of the Board, held on March 1, 1999, the Board further increased the quarterly
dividend to $.60 per share.
1998 Incentive Compensation. In establishing 1998 incentive compensation
(that is, the cash bonuses and stock option grants as set forth in the
accompanying Summary Compensation and Option Grants in Last Fiscal Year tables)
for the Company's named executive officers, the Committee concluded that each
such officer had individually made a very substantial contribution toward
achieving the aforementioned performance levels. The Committee did not
specifically relate any measure of performance or any accomplishment to the
incentives awarded, nor did the Committee assign relative weight to any specific
performance factor. Rather, the Committee members made the subjective
determination that the incentives awarded were appropriate in view of previously
awarded incentives and their qualitative assessment that 1998 represented a year
of significant achievement for the Company that was, in large part, attributable
to the talents and efforts of its executive officers.
The annual bonus awarded for 1998 to Mr. Cooper, Chairman of the Board of
Directors and Chief Executive Officer, as set forth in the accompanying Summary
Compensation Table, was determined by the members of the Executive Compensation
Committee, other than Mr. Cooper, after evaluating generally the Company's
achievements for the year and specifically Mr. Cooper's contributions towards
realizing such performance levels. The Board concluded that Mr. Cooper's
leadership, vision and decision making contributed significantly to these
accomplishments and warranted the bonus awarded to Mr. Cooper.
Martin S. Kimmel
Milton Cooper
Richard G. Dooley
Joe Grills
Frank Lourenso
12
<PAGE>
As to that portion of the report which pertains
to Mr. Cooper's compensation:
Martin S. Kimmel
Richard G. Dooley
Joe Grills
Frank Lourenso
Stock Price Performance. The following stock price performance chart compares
the Company's performance to the S&P 500 and the index of equity real estate
investment trusts prepared by the National Association of Real Estate Investment
Trusts ("NAREIT"). Equity real estate investment trusts are defined as those
which derive more than 75% of their income from equity investments in real
estate assets. The NAREIT equity index includes all tax qualified real estate
investment trusts listed on the New York Stock Exchange, American Stock Exchange
or the NASDAQ National Market System. Stock price performance, presented
quarterly for the five years ended December 31, 1998, is not necessarily
indicative of future results. All stock price performance assumes the
reinvestment of dividends.
[LINE GRAPH]
TOTAL RETURN PERCENTAGE
-----------------------
KIMCO NAREIT S & P 500
01/01/94 100.00 100.00 100.00
03/31/94 103.15 103.40 96.19
06/30/94 104.56 105.31 96.58
09/30/94 107.06 103.15 101.33
12/31/94 113.42 103.17 101.31
03/31/95 116.64 103.00 111.17
06/30/95 110.60 109.05 121.72
09/30/95 124.68 114.19 131.40
12/31/95 129.56 118.92 139.23
03/31/96 130.25 121.63 146.70
06/30/96 138.29 127.04 153.28
09/30/96 147.75 135.35 158.02
12/31/96 175.48 160.86 171.19
03/31/97 165.62 161.98 175.78
06/30/97 164.04 170.04 206.47
09/30/97 182.25 190.13 221.94
12/31/97 186.83 193.45 228.32
03/31/98 190.14 192.55 260.16
06/30/98 223.31 183.72 268.77
09/30/98 209.41 164.39 242.03
12/31/98 221.88 159.59 293.57
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<PAGE>
Equity Participation Plan
Description of Plan. The Company maintains an equity participation plan
(the "Equity Participation Plan") for the benefit of its eligible employees,
consultants, and directors. The Equity Participation Plan was established for
the purpose of attracting and retaining the Company's directors, executive
officers and other key employees by offering them an opportunity to own Common
Stock of the Company and/or rights which will reflect the growth, development
and financial success of the Company. The Equity Participation Plan provides
that the Executive Compensation Committee or the Board, as applicable, may grant
or issue "incentive" stock options and "non-qualified" stock options (within the
meaning of the Internal Revenue Code, the "Code"), that vest over time and are
exercisable at the "fair market value" of the Common Stock at the date of grant.
In addition, the Equity Participation Plan provides for the granting of deferred
stock ("Deferred Stock") to the Non-employee Directors of the Company. Deferred
Stock may be granted to Non-employee Directors in lieu of directors' fees which
would otherwise be payable to such Non-employees Directors, pursuant to such
policies as may be adopted by the Board from time to time. Unless otherwise
provided by the Board, a grantee of Deferred Stock shall have no rights as a
Company stockholder with respect to such Deferred Stock until such time as the
Common Stock underlying the award has been issued. The term of an award of
Deferred Stock shall be set by the Board in its sole discretion.
The Executive Compensation Committee has the authority under the Equity
Participation Plan to determine the terms of options granted under the Equity
Participation Plan, including, among other things, the individuals (who may be
employees, consultants or directors of the Company) who shall receive options,
the times when they shall receive them, whether an incentive stock option and/or
non-qualified option shall be granted, the number of shares to be subject to
each option and the date or dates each option shall become exercisable. The
Executive Compensation Committee also has the authority to grant options upon
the condition that the employee agrees to cancel all or a part of a previously
granted option and to amend or accelerate the vesting of previously granted
options.
The exercise price and term of each option are fixed by the Executive
Compensation Committee, provided, however, that the exercise price must be at
least equal to the fair market value of the stock on the date of grant and the
term cannot exceed 10 years; and further provided that in the case of an
incentive stock option granted to an individual who owns (or is deemed to own)
at least 10% of the total combined voting power of all classes of stock of the
Company, a subsidiary or a parent (within the meaning of Section 424 of the
Code), the exercise price must be at least 110% of the fair market value on the
date of grant and the term cannot exceed five years. Incentive stock options may
be granted only within 10 years from the date of adoption of the Equity
Participation Plan. The aggregate fair market value (determined at the time the
option is granted) of shares with respect to which incentive stock options may
be granted under the Equity Participation Plan, or any other plan of the Company
or any parent or subsidiary, which stock options are exercisable for the first
time during any calendar year, may not exceed $100,000. The maximum number of
non-qualified options that may be granted to any one individual is 500,000,
provided that the grant of the options will not cause the Company to fail to
qualify as a real estate investment trust for Federal income tax purposes. An
optionee may, with the consent of the Executive Compensation Committee, elect to
pay for the shares to be received upon exercise of his options in cash, shares
of Common Stock of the Company or any combination thereof.
Option Grants. A maximum of 6,000,000 shares of the Company's Common Stock
have been reserved for issuance under the Equity Participation Plan. Options to
acquire 1,023,500, 470,700 and 315,500 shares were granted during 1998, 1997 and
1996 at weighted average exercise prices of $37.32, $31.72 and $28.32 per share,
respectively. A total of 2,767,830 options at a weighted average exercise price
of $30.03 per share were outstanding at December 31, 1998, and as of such date
2,316,420 shares were available for future grant under the Equity Participation
Plan.
14
<PAGE>
401(k) Plan
The Company maintains a 401(k) retirement plan covering substantially all
officers and employees of the Company. The 401(k) plan permits participants to
defer up to a maximum of 10% of their eligible compensation, which deferrals
generally are matched concurrently by the Company up to a maximum of 5% of the
employee's eligible compensation. Participants in the 401(k) Plan are not
subject to Federal and state income tax on salary deferral contributions or
Company contributions or on the earnings thereon until such amounts are
withdrawn from the 401(k) Plan. Salary reduction contributions are treated as
wages subject to FICA tax. Withdrawals from the plan may only be made upon
termination of employment, or in connection with certain provisions of the
401(k) Plan that permit hardship withdrawals.
Certain Relationships and Related Transactions.
Members of the Company's management hold investments in certain real estate
joint ventures or limited partnerships to which the Company is a party. Such
investments predate the Company's IPO and, in each case, the Company controls or
directs the management of the joint venture or limited partnership. Any material
future transactions involving these joint ventures or partnerships require the
approval of a majority of disinterested directors of the Company. See
"Compensation Committee Interlocks and Insider Participation".
Messrs. Kimmel and Cooper, Directors of the Company, are stockholders of KC
Holdings. See "Compensation Committee Interlocks and Insider Participation".
Mr. Frank Lourenso, a Director of the Company, is also an Executive Vice
President of Chase Bank. The Company maintains its principal banking
relationship with Chase Bank. See "Compensation Committee Interlocks and Insider
Participation".
Mr. Paul Dooley, Manager of Real Estate Tax Administration and Insurance
for the Company, is the son of Mr. Richard G. Dooley, a director of the Company.
Mr. Paul Dooley was paid total cash compensation of $178,178 in salary in 1998
as an employee of the Company. In addition, he was granted 5,000 options in 1998
pursuant to the Equity Participation Plan.
Indebtedness of Management. The following table sets forth information with
respect to indebtedness of Directors and executive officers to the Company.
<TABLE>
<CAPTION>
Largest Aggregate
Indebtedness
Outstanding During Amount
Name and 1998 Purpose of Outstanding Interest Rate
Principal Position ($) Indebtedness ($) (3) (%)
------------------ --------------------- ------------ ------- ---
<S> <C> <C> <C>
Michael J. Flynn
Vice Chairman of the
Board of Directors. 716,750 (2) Stock purchase 716,750 6.0
President and Chief
Operating Officer
since January 1997.
Alex Weiss
Vice President - 219,280 (1) Stock purchase - 6.0
Management Information
Systems
</TABLE>
(1) Loans extended during 1992 to supplement available margin loans and
partially fund the purchase of 60,000 shares of the Company's Common Stock
by Mr. Weiss. The stock purchase loans are collateralized by the shares of
Common Stock acquired and are scheduled to be repaid over a term of eight
years.
15
<PAGE>
(2) Loans extended to Mr. Flynn during 1996 to fund the purchase of 10,000
outstanding shares of the Company's Common Stock and in 1997 and 1998 to
fund amounts associated with a previously granted restricted stock award.
This stock purchase loan is collateralized by the shares of Common Stock
acquired and is repayable, commencing in 1999, over an approximate term of
eight years.
(3) Indebtedness outstanding as of April 6, 1999. Mr. Weiss repaid the stock
purchase loan in full during 1998.
Indebtedness for Affiliate. During 1997, the Company loaned to its
preferred stock affiliate, KRS, an aggregate amount of $12,000,000 evidenced by
a series of notes due in the year 2000 at a rate of interest of 10% per annum.
The Company believes that the terms of such loans are no less favorable than
could have been obtained in an arm's length transaction with an unrelated third
party.
Independent Public Accountants
PricewaterhouseCoopers LLP was engaged to perform the annual audit of the
books of account of the Company for the calendar year ended December 31, 1998.
There are no affiliations between the Company and PricewaterhouseCoopers LLP,
its partners, associates or employees, other than as pertain to its engagement
as independent auditors for the Company in previous years. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the Company's Annual
Meeting and will be given the opportunity to make a statement if they so desire
and to respond to appropriate questions.
The Audit Committee of the Board of Directors annually submits its
recommendation with respect to the engagement of independent public accountants
at the meeting of the full Board of Directors which takes place each year during
the Company's third fiscal quarter. PricewaterhouseCoopers LLP has been the
Company's independent public accountants since 1986. The Audit Committee of the
Board of Directors will review the appointment of PricewaterhouseCoopers LLP for
1999 later this year.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports (Forms 3, 4 and 5) of the
ownership and changes in the ownership of such equity securities with the SEC
and the New York Stock Exchange. Officers, directors and beneficial owners of
more than ten percent of the Company's stock are required by SEC regulation to
furnish the Company with copies of all such forms which they file.
Based solely on the Company's review of the copies of Forms 3, 4 and 5 and
amendments thereto received by it for the year ended December 31, 1998, or
written representations from certain reporting persons that no such forms were
required to be filed by those persons, the Company believes that during the year
ended December 31, 1998, all filing requirements were complied with by its
officers, directors, beneficial owners of more than ten percent of the Company's
stock and other persons subject to Section 16 of the Exchange Act.
PROPOSAL 2
Amendment of Charter to Increase Number of Shares of Authorized Stock
By resolution dated March 31, 1999, the Board of Directors adopted a
resolution declaring it advisable to amend subsection A of Article IV of the
Company's charter to (i) increase the aggregate number of shares of stock that
the Company has the authority to issue to an aggregate of 310,600,000 shares,
(ii) increase the number of shares of Common Stock that the Company has
authority to issue to 200,000,000 shares, (iii) increase the number of shares of
Excess Stock that the Company has authority to issue to 102,000,000 shares, and
(iv) increase the number of shares of Preferred Stock that the Company has
authority to issue to 5,000,000 shares. The number of authorized shares of all
other classes, as set forth below, would remain the same. The proposed revised
subsection A of Article IV of the Company's charter is set forth as Exhibit A to
this Proxy Statement. The Board of Directors directed that the amendment be
submitted for consideration by the stockholders at the Meeting.
16
<PAGE>
The Company's charter currently authorizes the issuance of up to
158,070,000 shares, consisting of:
<TABLE>
<S> <C>
.100,000,000 shares of Common Stock;
. 51,000,000 shares of Excess Stock;
. 3,470,000 shares of Preferred Stock;
. 345,000 shares of 7-3/4% Class A Cumulative Redeemable
Preferred Stock, $1.00 par value per share
("Class A Preferred Stock");
. 230,000 shares of 8-1/2% Class B Cumulative Redeemable
Preferred Stock, $1.00 par value per share
("Class B Preferred Stock");
. 460,000 shares of 8-3/8% Class C Cumulative Redeemable
Preferred Stock, $1.00 par value per share
("Class C Preferred Stock");
. 700,000 shares of 7-1/2% Class D Cumulative Convertible
Preferred Stock, $1.00 par value per share
("Class D Preferred Stock");
. 65,000 shares of Floating-Rate Class E Cumulative
Redeemable Preferred Stock, $1.00 par value per share
("Class E Preferred Stock");
. 345,000 shares of Class A Excess Preferred Stock, $1.00 par
value per share ("Class A Excess Preferred Stock");
. 230,000 shares of Class B Excess Preferred Stock, $1.00 par
value per share ("Class B Excess Preferred Stock"); and
. 460,000 shares of Class C Excess Preferred Stock, $1.00 par
value per share ("Class C Excess Preferred Stock");
. 700,000 shares of Class D Excess Preferred Stock, $1.00 par
value per share ("Class D Excess Preferred Stock");
. 65,000 shares of Class E Excess Preferred Stock, $1.00 par
value per share ("Class E Excess Preferred Stock").
</TABLE>
As of April 6, 1999, the outstanding shares of stock of the Company were as
follows: 60,181,610 shares of Common Stock; no shares of Excess Stock; no shares
of Preferred Stock; 300,000 shares of Class A Preferred Stock; no shares of
Class A Excess Preferred Stock; 200,000 shares of Class B Preferred Stock; no
shares of Class B Excess Preferred Stock; 400,000 shares of Class C Preferred
Stock; no shares of Class C Excess Preferred Stock; 429,159 shares of Class D
Preferred Stock; no shares of Class D Excess Preferred Stock; no shares of Class
E Preferred Stock; and no shares of Class E Excess Preferred Stock. In addition,
as of the same date, approximately 2,297,485 shares of Common Stock have been
reserved for issuance under the Company's Equity Participation Plan.
The authorized shares of Common Stock and Preferred Stock in excess of
those presently outstanding will be available for issuance at such times and for
such purposes as the Board of Directors may deem advisable without further
action by the Company's stockholders, except as may be required by applicable
laws or regulations, including stock exchange rules. These purposes may include
stock dividends, stock splits, retirement of indebtedness, employee benefit
programs, corporate business combinations, acquisitions of property or other
corporate purposes. The authorized shares of Excess Stock, proposed to be
increased in direct proportion to the increase in the number of authorized
shares of Common Stock, will be available for issuance pursuant to the Company's
charter and as may be necessary to preserve the Company's qualification as a
real estate investment trust under applicable tax
17
<PAGE>
laws. The Board does not intend to issue any stock except for reasons and on
terms which the Board deems to be in the best interests of the Company. Because
the holders of the Common Stock do not have preemptive rights, the issuance of
Common Stock (other than on a pro rata basis to all current stockholders) would
reduce the current stockholders' proportionate interests. However, in any such
event, stockholders wishing to maintain their interests may be able to do so
through normal market purchases. Any future issuance of Common Stock will be
subject to the rights of holders of outstanding shares of the existing Class A
Preferred Stock, Class B Preferred Stock, Class C Preferred Stock and Class D
Preferred Stock and of any shares of the Preferred Stock the Company may issue
in the future.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO
AMEND THE COMPANY'S CHARTER TO INCREASE THE AGGREGATE NUMBER OF SHARES OF STOCK,
THE NUMBER OF SHARES OF COMMON STOCK, THE NUMBER OF SHARES OF EXCESS STOCK AND
THE NUMBER OF SHARES OF PREFERRED STOCK THAT THE COMPANY IS AUTHORIZED TO ISSUE.
Proxies will be so voted unless stockholders specify otherwise in their proxies.
The affirmative vote of holders of two-thirds of the outstanding shares of
Common Stock is required for approval of this proposal. Consequently,
abstentions and broker non-votes will have the same effect as votes against the
proposal. If the proposed amendment is approved by the stockholders, it will
become effective upon the filing of Articles of Amendment and Restatement for
recording with the State Department of Assessments and Taxation of Maryland,
which will occur as soon as reasonably practicable after approval.
Other Matters
Financial and Other Information. Reference should be made to the Company's
annual report on Form 10-K for the year ended December 31, 1998, and the
Company's Annual Report delivered together with this Proxy Statement, such
documents incorporated herein by reference, for financial information and
related disclosures required to be included herein.
Stockholders' Proposals. Proposals of stockholders intended to be presented
at the Company's Annual Meeting of Stockholders to be held in 2000 must be
received by the Company no later than January 3, 2000, in order to be included
in the Company's proxy statement and form of proxy relating to that meeting.
Such proposals must comply with the requirements as to form and substance
established by the SEC for such proposals in order to be included in the proxy
statement. A stockholder who wishes to make a proposal at the 2000 Annual
Meeting without including the proposal in the Company's proxy statement and form
of proxy relating to that meeting must notify the Company by March 6, 2000. If
the stockholder fails to give notice by this date, then the persons named as
proxies in the proxies solicited by the Board for the 2000 Annual Meeting may
exercise discretionary voting power with respect to any such proposal.
Documents Incorporated by Reference. This Proxy Statement incorporates
documents by reference which are not presented herein or delivered herewith.
These documents (except for certain exhibits to such documents, unless such
exhibits are specifically incorporated herein) are available upon request
without charge. Requests may be oral or written and should be directed to the
attention of the Secretary of the Company at the principal executive offices of
the Company.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the date of
the Meeting shall be deemed incorporated by reference into this Proxy Statement
and shall be deemed a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Proxy Statement to the
extent that a statement contained herein (or subsequently filed document which
is also incorporated by reference herein) modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed to constitute a part
of this Proxy Statement, except as so modified or superseded.
Other Business. All shares represented by the accompanying proxy will be
voted in accordance with the proxy. The Company knows of no other business which
will come before the Meeting for action. However, as to any such business, the
persons designated as proxies will have authority to act in their discretion.
18
<PAGE>
EXHIBIT A:
Proposed Revised Subsection A of
Article IV of the Company's Charter
A. The total number of shares of all classes of stock that the
Corporation shall have authority to issue is three hundred ten million six
hundred thousand (310,600,000) shares, consisting of two hundred million
(200,000,000) shares of Common Stock, with a par value of $0.01 per share (the
"Common Stock"), one hundred two million (102,000,000) shares of Excess Stock,
with a par value of $0.01 per share (the "Excess Stock"), five million
(5,000,000) shares of Preferred Stock, with a par value of $1.00 per share (the
"Preferred Stock"), three hundred forty-five thousand (345,000) shares of 7-3/4%
Class A Cumulative Redeemable Preferred Stock, with a par value of $1.00 per
share ("Class A Preferred Stock"), three hundred forty-five thousand (345,000)
shares of Class A Excess Preferred Stock, with a par value of $1.00 per share
("Class A Excess Preferred Stock"), two hundred thirty thousand (230,000) shares
of 8-1/2% Class B Cumulative Redeemable Preferred Stock, with a par value of
$1.00 per share ("Class B Preferred Stock"), two hundred thirty thousand
(230,000) shares of Class B Excess Preferred Stock, with a par value of $1.00
per share ("Class B Excess Preferred Stock"), four hundred sixty thousand
(460,000) shares of 8-3/8% Class C Cumulative Redeemable Preferred Stock, with a
par value of $1.00 per share ("Class C Preferred Stock"), four hundred sixty
thousand (460,000) shares of Class C Excess Preferred Stock, with a par value of
$1.00 per share ("Class C Excess Preferred Stock"), seven hundred thousand
(700,000) shares of 7-1/2% Class D Cumulative Convertible Preferred Stock, with
a par value of $1.00 per share ("Class D Preferred Stock") and seven hundred
thousand (700,000) shares of Class D Excess Preferred Stock, with a par value of
$1.00 per share ("Class D Excess Preferred Stock"), sixty-five thousand (65,000)
shares of Floating Rate Class E Cumulative Redeemable Preferred Stock, with a
par value of $1.00 per share ("Class E Preferred Stock") and sixty-five thousand
(65,000) shares of Class E Excess Preferred Stock, with a par value of $1.00 per
share ("Class E Excess Preferred Stock"). The aggregate par value of all
authorized shares having a par value is eleven million six hundred twenty
thousand dollars ($11,620,000).
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<PAGE>
DETACH HERE KMC 3
KIMCO REALTY CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
P
R
O
X
Y
The undersigned hereby appoints Milton Cooper, Michael J. Flynn and Bruce
Kauderer as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all of the shares
of Common Stock of Kimco Realty Corporation held of record by the undersigned on
April 6, 1999, at the Annual Meeting of Stockholders to be held on May 20, 1999,
or any adjournment(s) or postponements(s) thereof. The undersigned hereby
acknowledges receipt of the Notice of the Annual Meeting of Stockholders and the
accompanying Proxy Statement.
The Board of Directors recommends a vote FOR all of the nominees for
director and FOR the proposal to increase the number of authorized shares of
Common, Excess and Preferred Stock.
To vote FOR all of the nominees for director and FOR the proposal to
increase the number of authorized shares of Common, Excess and Preferred Stock,
just sign and date the reverse side. No boxes need to be checked.
SEE REVERSE
SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
20
<PAGE>
DETACH HERE KMC 3
Please mark
votes as in
X this example.
- ---
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR, FOR THE PROPOSAL TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON, EXCESS AND PREFERRED STOCK
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING. BY EXECUTING THIS PROXY, THE UNDERSIGNED HEREBY REVOKES
ALL PRIOR PROXIES.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C>
1. Election of Directors. 2. Proposal to Increase Number of
Nominees: M. Kimmel, M. Cooper, J. Kornwasser, Authorized Shares. --- --- ---
R. Dooley, J. Grills, M. Flynn, F. Lourenso
FOR ALL NOMINEES __ WITHHELD FROM ALL NOMINEES __
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
------------------------------------- CHANGE AND TO ATTEND
For all nominees except as noted above NOTE AT LEFT --- THE MEETING ---
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
Please sign exactly as name appears at left. When shares are held
by joint tenants, both should sign. When signing as attorney, as
executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
Signature: Date: Signature: Dated:
---------------------------- ------------- ----------------------------- ------------
</TABLE>
21
