<PAGE>
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
Stratus Properties Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
-------------------------------------------------------------------------
Notes:
<PAGE>
[Stratus Properties Logo Appears Here]
------------------
Notice of Annual Meeting of Stockholders
May 13, 1999
------------------
March 26, 1999
Date: Thursday, May 13, 1999
Time: 1:30 p.m., Central Time
Place: Hotel Crescent Court
400 Crescent Court
Dallas, Texas
Purpose: . To elect two directors;
. To ratify the appointment of the independent auditors; and
. To transact such other business as may properly come before
the meeting.
Record Date: Close of business on March 16, 1999.
Your vote is important. Whether or not you plan to attend the meeting,
please complete, sign and date the enclosed proxy card and return it promptly
in the enclosed envelope. Your cooperation will be appreciated.
By Order of the Board of
Directors.
/s/ KENNETH N. JONES
Kenneth N. Jones
General Counsel
<PAGE>
Information about Attending the Annual Meeting
If you plan to attend the meeting, please bring the following:
1. Proper identification.
2. Proof of Ownership if your shares are held in "Street Name."
Street Name means your shares are held of record by brokers, banks or other
institutions.
Acceptable Proof of Ownership is a letter from your broker stating that you
owned Stratus Properties Inc. stock on the Record Date or an account statement
showing that you owned Stratus Properties Inc. stock on the Record Date.
Only stockholders of record on the Record Date may attend or vote at the
annual meeting.
<PAGE>
Stratus Properties Inc.
98 San Jacinto Boulevard, Suite 220
Austin, Texas 78701
The 1998 Annual Report to Stockholders, including financial statements, is
being mailed to stockholders together with these proxy materials on or about
March 26, 1999.
This proxy statement is furnished in connection with a solicitation of
proxies by the Board of Directors (the "Board of Directors" or the "Board") of
Stratus Properties Inc. (the "Company") for use at its Annual Meeting of
Stockholders to be held on May 13, 1999, and at any adjournments thereof (the
"Meeting").
Who Can Vote
Each share of the Company's common stock that you held on the Record Date
entitles you to one vote at the Meeting. On the Record Date, there were
14,288,270 shares of common stock (the "Common Stock") outstanding.
Voting Rights
Inspectors of election will count votes cast at the Meeting. Directors are
elected by plurality vote. All other matters are decided by majority vote
present at the Meeting, except as otherwise provided by statute, our
certificate of incorporation and our by-laws.
Abstentions and broker non-votes will have no effect on the election of
directors. Abstentions as to all other matters to come before the Meeting will
be counted as votes against those matters. Broker non-votes as to all other
matters will not be counted as votes for or against and will not be included
in calculating the number of votes necessary for approval of those matters.
Quorum
A quorum at the Meeting is a majority of the Common Stock entitled to vote,
present in person or represented by proxy. The persons whom the Company
appoints to act as inspectors of election will determine whether a quorum
exists. Shares of Common Stock represented by properly executed and returned
proxies will be treated as present. Shares of Common Stock present at the
Meeting that abstain from voting or are the subject of broker non-votes will
be counted as present for purposes of determining a quorum. A broker non-vote
occurs when a nominee holding Common Stock for a beneficial owner does not
vote on a particular matter because the nominee does not have discretionary
voting power with respect to that item and has not received voting
instructions from the beneficial owner.
<PAGE>
How Your Proxy Will Be Voted
The Board of Directors is soliciting a proxy in the enclosed form to provide
you with an opportunity to vote on all matters scheduled to come before the
Meeting, whether or not you attend in person.
Granting Your Proxy. If you properly execute and return a proxy in the
enclosed form, your stock will be voted as you specify. If you make no
specifications, the proxy representing any Common Stock will be voted:
. in favor of the proposed director nominees, and
. for the ratification of the appointment of auditors.
We expect no matters to be presented for action at the Meeting other than
the items described in this proxy statement. The enclosed proxy will, however,
confer discretionary authority with respect to any other matter that may
properly come before the Meeting. The persons named as proxies in the enclosed
proxy intend to vote in accordance with their judgment on any other matters
that may properly come before the Meeting.
Revoking Your Proxy. If you submit a proxy, you may subsequently revoke it
or submit a revised proxy at any time before it is voted. You may also attend
the Meeting in person and vote by ballot, which would cancel any proxy that
you previously submitted.
Proxy Solicitation
The Company will pay all expenses of soliciting proxies for the Meeting. In
addition to solicitations by mail, arrangements have been made for brokers and
nominees to send proxy materials to their principals, and the Company will
reimburse them for their reasonable expenses in doing so. The Company has
retained Georgeson & Co. Inc., Wall Street Plaza, New York, New York, to
assist it in the solicitation of proxies from brokers and nominees. It is
estimated that the fees for Georgeson's services will be $6,500 plus its
reasonable out-of-pocket expenses. Representatives of the Company, who will
receive no compensation for their services, may also solicit proxies by
telephone, telecopy, personal interview or other means.
Stockholder Proposals
If you want us to consider including a proposal in next year's proxy
statement, you must deliver it in writing to the Corporate Secretary, Stratus
Properties Inc., 98 San Jacinto Boulevard, Suite 220, Austin, Texas 78701 by
November 26, 1999.
If you want to present a proposal at the next annual meeting but do not wish
to have it included in our proxy statement, you must submit it in writing to
the Corporate Secretary at the above address,
2
<PAGE>
by January 13, 2000 in accordance with the specific procedural requirements in
our by-laws. If you would like a copy of these procedures, please contact the
Corporate Secretary. Failure to comply with our by-law procedures and deadline
may preclude the presentation of the matter at the Meeting.
Corporate Governance
The Board of Directors, which held four meetings during 1998, has primary
responsibility for directing the management of the business and affairs of the
Company. The Board currently consists of four members. To provide for
effective direction and management of the Company's business, the Board of
Directors has established committees of the Board, including the Audit
Committee and the Corporate Personnel Committee. The Board has no standing
nominating committee.
<TABLE>
<CAPTION>
Audit Committee Members Functions of the Committee Meetings in 1998
----------------------- -------------------------- ----------------
<S> <C> <C>
Michael D. Madden, Chairman . reviews financial statements of the Company 4
Robert L. Adair III
James C. Leslie . exercises general oversight of the integrity
and reliability of the Company's accounting
and financial reporting practices and the
effectiveness of its system of internal
controls
. exercises general oversight of the activities
of the Company's independent auditors, principal
accounting officer, internal auditors and related
matters
Corporate Personnel
Committee Members Functions of the Committee Meetings in 1998
- -------------------- -------------------------- ----------------
James C. Leslie, Chairman . please refer to the Corporate Personnel 5
Michael D. Madden Committee Report on Executive Compensation
</TABLE>
Election of Directors
The Board of Directors has fixed the number of directors at four. The Board
consists of three classes, each of which serves for three years, with one
class being elected each year. This table shows the members of the different
classes of the Board and the expiration of their terms.
Class Expiration of Term Names of Class Members
----- ------------------ ----------------------
Class I 1999 Annual Stockholder Meeting Robert L. Adair III
Michael D. Madden
Class II 2000 Annual Stockholder Meeting James C. Leslie
Class III 2001 Annual Stockholder Meeting William H. Armstrong III
3
<PAGE>
The Board has nominated each of the Class I directors named above for an
additional three-year term. The persons named as proxies in the enclosed form
of proxy intend to vote your proxy for the re-election of each of the Class I
directors, unless otherwise directed. If, contrary to our present
expectations, a nominee should become unavailable for any reason, votes may be
cast pursuant to the accompanying form of proxy for a substitute nominee
designated by the Board.
Information About Nominees and Directors
This table provides certain information as of March 5, 1999 with respect to
each director nominee and each other director whose term will continue after
the Meeting. Unless otherwise indicated, each person has been engaged in the
principal occupation shown for the past five years.
<TABLE>
<CAPTION>
Year First
Name of Nominee or Principal Occupations, Other Directorships Elected a
Director Age and Positions with the Company Director
------------------ --- --------------------------------------------- ----------
<S> <C> <C> <C>
Robert L. Adair III 55 Director, President and Chief Operating 1998
Officer of Amresco, Inc., a diversified
financial services company. Director,
Chairman and Chief Executive Officer of
Amresco Capital Trust, a commercial mortgage
real estate investment trust.
William H. Armstrong III 34 Chairman of the Board, President and Chief 1998
Executive Officer of the Company. Chief
Operating Officer and Chief Financial
Officer of the Company until 1998. Executive
Vice President of the Company until 1996.
James C. Leslie 42 Director, President and Chief Operating 1996
Officer of The Staubach Company, a
commercial real estate services firm.
President of Wolverine Holding Company, a
real estate holding company. President of
Staubach Financial Services, a financial
real estate services firm, until March 1996.
Director of Amresco Capital Trust and
Wyndham International Inc.
Michael D. Madden 50 Partner of Questor Management Co., merchant 1992
bankers, since March 1999. Chairman of the
Board of Hanover Capital L.L.C., investment
bankers. Vice Chairman of the Board of
PaineWebber Incorporated, investment
bankers, until December 1995. Executive Vice
President and Chief Origination Officer of
Kidder Peabody Group Inc., investment
bankers, until December 1994. Executive
Managing Director and Head of Global
Business Development of Kidder Peabody Group
Inc. until September 1994. Director of
COMFORCE Corporation.
</TABLE>
4
<PAGE>
Director Compensation
Cash Compensation
Each non-officer director receives $500 for attending each Board committee
meeting as well as an annual fee consisting of (a) $10,000 for serving on the
Board, (b) $1,000 for each committee on which he serves, and (c) $1,000 for
each committee of which he is the chairman. Each director receives a fee of
$500 for attending each Board meeting and reimbursement for reasonable out-of-
pocket expenses incurred in attending Board and committee meetings.
Stock Option Plan for Non-Employee Directors
Each non-employee and non-officer director is eligible for the grant of
options under the 1996 Stock Option Plan for Non-Employee Directors (the "1996
Plan"). On September 1 of each year, each eligible director will be granted an
option to purchase 5,000 shares of Common Stock at 100% of the fair market
value of the shares on the grant date. Each option granted under the 1996 Plan
expires ten years after the grant date, and each eligible director may
transfer his options during his lifetime to his immediate family members or
certain entities owned by or for the benefit of his immediate family members
or pursuant to a domestic relations order. In accordance with the 1996 Plan,
on September 1, 1998, each eligible director was granted an option to purchase
5,000 shares of Common Stock at an exercise price of $3.50.
Stock Ownership of Directors and Executive Officers
This table shows how much Common Stock each director and named executive
officer beneficially owned on December 31, 1998. The directors and executive
officers as a group beneficially owned approximately 1.2%. Each individual
holds less than 1% of the outstanding shares. Unless otherwise indicated, all
shares shown are held with sole voting and investment power. This table also
shows the number of shares each director and named executive officer could
acquire as of March 1, 1999 upon the exercise of options granted pursuant to
Company stock option plans.
<TABLE>
<CAPTION>
Number of
Number of Shares Total Number
Shares Not Subject to of Shares
Subject to Exercisable Beneficially
Name of Beneficial Owner Options Options Owned
- ------------------------ ---------- ----------- ------------
<S> <C> <C> <C>
Robert L. Adair III 3,000 0 3,000
William H. Armstrong III 12,600 66,250 78,850
James C. Leslie 71,000 11,250 82,250
Michael D. Madden 0 11,250 11,250
All directors and executive officers as a
group (5 persons) 86,600 88,750 175,350
</TABLE>
5
<PAGE>
Stock Ownership of Certain Beneficial Owners
This table shows beneficial owners of more than 5% of the Company's
outstanding Common Stock based on filings with the SEC. Unless otherwise
indicated, all information is presented as of December 31, 1998, and all
shares indicated as beneficially owned are held with sole voting and
investment power.
<TABLE>
<CAPTION>
Number of
Shares
Beneficially Percent
Name and Address of Person Owned of Class
-------------------------- ------------ --------
<S> <C> <C>
Goldman, Sachs & Co. 759,196(1) 5.3%
The Goldman Sachs Group, L.P.
85 Broad Street
New York, New York 10004
The Guardian Life Insurance Company of America 858,000(2) 6.0%
201 Park Avenue South
New York, New York 10003
Ingalls & Snyder LLC 2,803,342(3) 19.6%
61 Broadway
New York, New York 10006
Robert A. Day 740,510(4) 5.2%
Oakmont Corporation
865 South Figueroa Street
Los Angeles, California 90017
</TABLE>
- ---------
(1) Based on the Schedule 13G dated February 14, 1999 that Goldman, Sachs &
Co. and The Goldman Sachs Group, L.P. filed with the SEC, the companies
share voting and investment power with respect to all 759,196 shares, and
each disclaims beneficial ownership with respect to some of the shares.
(2) Based on the Schedule 13G dated February 11, 1998 that The Guardian Life
Insurance Company of America filed with the SEC, The Guardian Life
Insurance Company of America, through its affiliates, shares voting and
investment power with respect to 357,000 of those shares.
(3) Based on the Schedule 13G dated February 4, 1999 that Ingalls & Snyder LLC
filed with the SEC, Ingalls & Snyder LLC has sole voting and investment
power with respect to 313,300 of those shares.
(4) Based on the amended Schedule 13G dated February 12, 1999 filed by Robert
A. Day and Oakmont Corporation with the SEC, Robert A. Day beneficially
owns all 740,510 shares and has sole voting and investment power with
respect to 185,510 of those shares.
6
<PAGE>
Executive Officer Compensation
Richard C. Adkerson was a director and the Chairman of the Board until
August 26, 1998 and was Chief Executive Officer until May 14, 1998. During
this time, Mr. Adkerson was employed by another entity and performed his
duties for the Company in accordance with a services agreement between the
Company and a corporation in which the Company owns a 10% equity interest (the
"Services Company"). In 1998 Mr. Adkerson's employer paid his compensation.
Additionally, in 1998 the Services Company provided to the Company executive,
technical, administrative, accounting, financial, tax and other services. The
Company paid a fee to the Services Company of $1.0 million for 1998 based upon
the sum of (a) the Services Company's expenses that were incurred on behalf of
the Company, (b) the costs of goods, services and other items paid by the
Services Company on behalf of the Company, and (c) an allocable portion of all
other expenses incurred by the Services Company in connection with providing
services to the Company, including the services provided by Mr. Adkerson.
The current Chairman of the Board and Chief Executive Officer, William H.
Armstrong III, was the only executive officer employed by the Company who
earned in excess of $100,000 for services provided to the Company in 1998. The
following table shows compensation that the Company paid to Mr. Armstrong and
Mr. Adkerson (together, the "Named Executive Officers") for all services
rendered to the Company and its subsidiaries in 1998, 1997 and 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
----------------------------------- ------------
Securities
Name and Principal Other Annual Underlying All Other
Position Year Salary Bonus Compensation Options Compensation
------------------ ---- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
William H. Armstrong III 1998 $190,417 $195,000 -- 80,000 $8,104(1)
Chairman of the Board, 1997 159,167 150,000 $1,000(2) 65,000 17,917(3)
President and Chief 1996 150,000 120,000 -- 25,000 0
Executive Officer
Richard C. Adkerson 1998 25,000 -- 767(4) 75,000 3,646(5)
</TABLE>
- ---------
(1) Consists of Company contributions of $7,604 to defined contribution plans
and $500 of director fees.
(2) Consists of matching gifts under the matching gifts program.
(3) Consists of Company contributions to defined contribution plans.
(4) Amount allocated to the Company for the payment of taxes in connection
with certain benefits provided to Mr. Adkerson.
(5) Consists of $2,000 of director fees and the following payments allocated
to the Company: (a) $1,336 toward defined contribution plans and (b) $310
toward premium payments for a universal life insurance policy.
------------------
7
<PAGE>
This table shows all stock options that the Company granted to the Named
Executive Officers during 1998.
Option Grants in 1998
<TABLE>
<CAPTION>
Number of Percent of
Securities Options
Underlying Granted to Exercise
Options Employees or Base Expiration Grant Date
Name Granted(1) in 1998 Price Date Present Value(2)
---- ---------- ---------- -------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
William H. Armstrong III 80,000 26.3% 6.1875 May 14, 2008 $356,000
Richard C. Adkerson 75,000 24.7% 6.1875 May 14, 2008 $333,750
</TABLE>
- ---------
(1) The stock options will become exercisable over a four-year period. The
stock options will become immediately exercisable in their entirety if (a)
any person or group of persons acquires beneficial ownership of shares
representing 20% or more of the Company's total voting power or (b) under
certain circumstances, the composition of the Board of Directors is
changed after a tender offer, exchange offer, merger, consolidation, sale
of assets or contested election or any combination thereof.
(2) The Black-Scholes option pricing model was used to determine the grant
date present value of the options that the Company granted to Messrs.
Armstrong and Adkerson. The grant date present value was calculated to be
$4.45. The following facts and assumptions were used in making this
calculation: (a) an exercise price for each stock option of $6.1875; (b) a
fair market value of $6.1875 for one share on the grant date; (c) a term
for options as set forth under the column labeled "Expiration Date"; (d) a
stock volatility of 55.4%, based on an analysis of historical weekly
closing prices of the Common Stock over a 52-week period; and (e) an
assumed risk-free interest rate of 5.80%, this rate being equivalent to
the yield on the grant date on a treasury note with a maturity date
comparable to the expiration date of the options. No other discounts or
restrictions related to vesting or the likelihood of vesting of the
options were applied.
------------------
8
<PAGE>
This table shows all outstanding Company stock options held by each Named
Executive Officer as of December 31, 1998. None of them exercised any Company
stock options during 1998.
Option Values at December 31, 1998
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
December 31, 1998 December 31, 1998
------------------------- -------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------- -------------------------
<S> <C> <C>
William H. Armstrong III 66,250/153,750 $ 90,781/$ 50,469
Richard C. Adkerson 95,000/210,000 173,750/ 183,750
</TABLE>
Corporate Personnel Committee Report on Executive Compensation
The Corporate Personnel Committee is composed of two independent directors
who are responsible for the Company's executive compensation programs. The
Committee's executive compensation philosophy is to:
. emphasize performance-based compensation that balances rewards for short-
and long-term results;
. tie compensation to the interests of stockholders; and
. provide a competitive level of total compensation in order to attract and
retain talented executives.
Executive officer compensation for 1998 included base salaries, annual cash
incentive awards and long-term incentive compensation in the form of stock
options.
Base Salaries
Richard C. Adkerson served as Chairman of the Board of the Company until
August 26, 1998 and as Chief Executive Officer until May 14, 1998. As Chairman
and Chief Executive Officer, he provided services to the Company pursuant to a
services agreement between the Company and the Services Company and was paid
salary, benefits and other compensation by the Company through this agreement.
Additionally, he received director fees and stock options directly from the
Company.
William H. Armstrong III, who served as President and Chief Operating
Officer prior to mid-1998 and Chairman of the Board, President and Chief
Executive Officer thereafter, is the only executive officer whose salary is
paid by the Company. His salary is based on his level of responsibility and
the Committee's assessment of his performance. His salary was increased in
1998 in recognition of his new position and additional responsibilities.
9
<PAGE>
Annual Incentive Awards
The Company provided annual cash incentives to its current Chief Executive
Officer and other officers for 1998 through its performance incentive awards
program. Each person selected to participate in the program is assigned a
target award based on level of responsibility, which serves as a guideline
amount. When determining the actual amounts awarded to participants for any
year, the Committee considers both individual performance and Company
performance as measured by operational and financial accomplishments.
The Committee determined that the level of Company and individual
performance achieved in 1998 warranted the payment of a cash bonus to the
Chief Executive Officer in the amount shown in the Summary Compensation Table
under the heading "Executive Officer Compensation."
Long-Term Incentives
The Company also grants long-term incentives to executive officers in the
form of stock options. The stock option award guidelines are intended to
reinforce the relationship between compensation and increases in the market
price of the Company's common stock and align the executive officers'
financial interests with those of the Company's stockholders. The Committee
establishes guidelines based upon the position of each participating officer
and then grants options within those guidelines based upon the Committee's
subjective assessment of each participant's individual performance. The table
entitled "Option Grants in 1998" under the heading "Executive Officer
Compensation" shows the stock options that the Committee granted in 1998 to
the current and former Chief Executive Officer, based upon the Committee's
guidelines and subjective assessment.
Section 162(m)
Section 162(m) limits to $1 million a public company's annual tax deduction
for compensation paid to each of its most highly compensated executive
officers. Qualified performance-based compensation is excluded from this
deduction limitation if certain requirements are met. The Committee's policy
is to monitor compensation levels and to qualify stock options or other
elements of compensation as "performance based" in order to preserve
deductibility where doing so will further the purposes of the Company's
executive compensation programs and may be accomplished by the Committee.
James C. Leslie, Chairman Michael D. Madden
Compensation Committee Interlocks and Insider Participation
The current members of the Company's Corporate Personnel Committee are
Messrs. Leslie and Madden. In 1998, no executive officer of the Company served
as a director or member of the compensation committee of another entity, where
one of the other entity's executive officers served as a director of the
Company or on the Company's Corporate Personnel Committee.
10
<PAGE>
Performance Graph
The following graph compares the change in the cumulative total stockholder
return on the Common Stock with the cumulative total return of the Standard &
Poor's 500 Stock Index and the Dow Jones Real Estate Investment Companies
Group from 1994 through 1998. This comparison assumes $100 invested on
December 31, 1993 in (a) Stratus Properties Inc. Common Stock, (b) S&P 500
Stock Index and (c) Dow Jones Real Estate Investment Companies Group.
Comparison of Cumulative Total Return*
Stratus Properties Inc., S&P 500 Stock Index &
Dow Jones Real Estate Investment Companies Group
[Graph Appears Here]
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------
1993 1994 1995 1996 1997 1998
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Stratus Properties Inc......... $100.00 $ 77.78 $ 38.89 $ 66.67 $115.27 $ 83.33
S&P 500 Stock Index............ 100.00 101.32 139.40 171.40 228.59 293.91
Dow Jones Real Estate
Investment Companies Group.... 100.00 104.51 124.31 171.34 210.01 169.40
</TABLE>
* Total Return Assumes Reinvestment of Dividends
11
<PAGE>
Ratification of the Appointment of Auditors
The Board of Directors seeks stockholder ratification of the Board's
appointment of Arthur Andersen LLP to act as the independent auditors of the
financial statements of the Company and its subsidiaries for the year 1999.
The Board has not determined what, if any, action would be taken should the
appointment of Arthur Andersen LLP not be ratified. One or more
representatives of the firm will be available at the Meeting to respond to
appropriate questions, and those representatives will also have an opportunity
to make a statement.
12
<PAGE>
[Recycled paper logo
appears here]
<PAGE>
STRATUS PROPERTIES INC.
Proxy Solicited on Behalf of the Board of Directors for Annual Meeting of
Stockholders, May 13, 1999
The undersigned hereby appoints William H. Armstrong III and Kenneth N. Jones
as proxies, with full power of substitution, to vote the shares of the
undersigned in Stratus Properties Inc. at the Annual Meeting of Stockholders to
be held on Thursday, May 13, 1999, at 1:30 p.m., and at any adjournment
thereof, on all matters coming before the meeting. The proxies will vote: (1)
as you specify on the back of this card, (2) as the Board of Directors
recommends where you do not specify your vote on a matter listed on the back of
this card, and (3) as the proxies decide on any other matter.
If you wish to vote on all matters as the Board of Directors recommends,
please sign, date and return this card. If you wish to vote on items
individually, please also mark the appropriate boxes on the back of this card.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
- --------------------------------------------------------------------------------
(continued on reverse side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark
your votes as
indicated in [X]
this example
The Board of Directors recommends a vote FOR:
Item 1--Election of the FOR WITHHELD
nominees for directors. [ ] [ ]
Nominees for
directors of Stratus
Properties Inc.
Robert L. Adair III
Michael D. Madden
FOR, EXCEPT WITHHELD FROM:
-------------------------
(Write nominee name(s) in the
space provided above to withhold
authority.)
Item 2--Ratification of FOR AGAINST ABSTAIN
appointment of [ ] [ ] [ ]
Arthur Andersen LLP
as independent
auditors.
Signature(s)
------------------------------------------ Dated:______ 1999
You may specify your votes by marking the appropriate boxes on this side.
You need not mark any boxes, however, if you wish to vote all items in
accordance with the Board of Directors' recommendation. If your votes are
not specified, this proxy will be voted FOR the election of the nominees for
directors and FOR Proposal 2.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
