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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
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Check the appropriate box:
/ / Preliminary proxy statement
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CARRAMERICA REALTY CORPORATION
(Name of Registrant as Specified in Its Charter)
The Board of Directors of CarrAmerica Realty Corporation
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(Name of Person(s) Filing Proxy Statement)
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14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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applies:
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(2) Aggregate number of securities to which transaction applies:
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CARRAMERICA REALTY CORPORATION
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 12, 1996
You are cordially invited to attend the 1996 Annual Meeting of
Stockholders of CarrAmerica Realty Corporation (the "Company") to be held on
Wednesday, June 12, 1996 at 9:00 a.m., eastern daylight savings time, at The
Willard Inter-Continental Hotel, 1401 Pennsylvania Avenue, N.W., Washington,
D.C. 20004 for the following purposes:
1. To elect two directors to serve for a new one-year term, and
four directors to serve for a new three-year term;
2. To consider and act upon a stockholder proposal relating to
the declassification of the Board of Directors for the purpose
of director elections;
3. To consider and act upon a stockholder proposal to amend the
Company's By-laws to separate the offices of Chairman and
Chief Executive Officer; and
4. To transact such other business as may properly come before
such meeting or any adjournments thereof.
Only stockholders of record at the close of business on April 26, 1996
will be entitled to vote at the meeting or any adjournments 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
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Andrea F. Bradley
Secretary
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CARRAMERICA REALTY CORPORATION
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
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PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 12, 1996
This Proxy Statement is furnished to stockholders of CarrAmerica
Realty Corporation, a Maryland corporation (the "Company"), in connection with
the solicitation of proxies for use at the 1996 Annual Meeting of Stockholders
(the "Meeting") of the Company to be held on Wednesday, June 12, 1996 at 9:00
a.m., eastern daylight savings time, for the purposes set forth in the Notice
of Meeting. This solicitation is made on behalf of the board of directors of
the Company (the "Board of Directors" or the "Board").
Holders of record of shares of common stock (the "Common Stock") of
the Company as of the close of business on the record date, April 26, 1996, 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 26, 1996, there were 13,571,562 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
and AGAINST the stockholder proposals to declassify the Board of Directors for
the purpose of director elections and to separate the offices of Chairman and
Chief Executive Officer. To be voted, proxies must be filed with the Secretary
of the Company prior to the close of voting at the Meeting. Proxies may be
revoked at any time before exercise thereof by filing a notice of such
revocation or a later dated proxy with the Secretary of the Company or by
voting in person at the Meeting.
The Company's 1995 Annual Report to Shareholders for the year ended
December 31, 1995 has been mailed with this Proxy Statement. This Proxy
Statement, the form of proxy and the 1995 Annual Report to Shareholders were
mailed to stockholders on or about May ___,1996. The principal executive
offices of the Company are located at 1700 Pennsylvania Avenue, N.W.,
Washington, D.C. 20006.
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ELECTION OF DIRECTORS
(ITEM 1)
BOARD OF DIRECTORS
The directors of the Company are divided into three classes, with
approximately one-third of the directors elected by the stockholders annually.
The directors whose terms will expire at the Meeting are Andrew F. Brimmer,
Oliver T. Carr, Jr., George R. Puskar, William D. Sanders and Anthony R.
Manno, Jr. Messrs. Brimmer, Carr, Puskar and Sanders have been nominated for
election at the Meeting as directors to hold office until the 1999 Annual
Meeting of Stockholders and until their successors are elected and qualified.
William D. Sanders was elected by the Board of Directors in connection with the
investment by a wholly-owned subsidiary of Security Capital U.S. Realty of
approximately $250 million in the Company (the "US Realty Transaction") to fill
a vacancy created by the resignation of a director in the class of directors
whose term expires at the Meeting. Mr. Manno has been nominated for election
at the Meeting as a director to hold office until the 1997 Annual Meeting of
Stockholders and until his successor is elected and qualified. Mr. Manno was
elected by the Board of Directors in connection with the US Realty Transaction
to fill a vacancy in the class of directors who term expires at the 1997 Annual
Meeting of Stockholders, which vacancy resulted from the resignation of a
director. J. Marshall Peck has been nominated for election at the Meeting as a
director to hold office until the 1997 Annual Meeting of Stockholders and until
his successor is elected and qualified in connection with the US Realty
Transaction to fill a vacancy created by an increase in the size of the Board
of Directors that was approved by the Board of Directors in April 1996.
The Board of Directors of the Company recommends a vote FOR Andrew F.
Brimmer, Oliver T. Carr, Jr., George R. Puskar and William D. Sanders, as
directors to hold office until the 1999 Annual Meeting of Stockholders, and
until their successors are elected and qualified and a vote FOR Anthony R.
Manno, Jr., and J. Marshall Peck, as directors to hold office until the 1997
Annual Meeting of Stockholders, and until their successors are elected and
qualified. Should any one or more of these nominees become unable to serve for
any reason prior to the Meeting, the Board of Directors may designate
substitute nominees, in which event the persons named in the enclosed proxy
will vote for the election of such substitute nominee or nominees, or may
reduce the number of directors on the Board of Directors.
NOMINEES FOR ELECTION TO TERM EXPIRING 1997
Anthony R. Manno, Jr., 43, has been a director of the Company since
May 1, 1996 following consummation of the US Realty Transaction. Mr. Manno is
a Managing Director of Security Capital Investment Research Incorporated, an
affiliate of Security Capital Group Incorporated ("Security Capital Group"),
where he is responsible for corporate acquisitions. Mr. Manno is also a member
of Security Capital Group's Investment Committee. Prior to joining Security
Capital Investment Research Incorporated in March 1994, Mr. Manno was a
managing director of LaSalle Partners Limited where he served in various
capacities, including client manager for LaSalle Partners Limited's joint
venture partner, Dai-ichi Mutual Life Insurance Company; manager of LaSalle
Partners Limited's property finance group; and a member of its investment
committee. Before joining LaSalle Partners Limited in March 1980, Mr. Manno
was a commercial real estate loan officer of The First National Bank of
Chicago. Mr. Manno is a Certified Public Accountant. Mr. Manno received his
Masters in Business Administration, with a concentration in Finance, from the
University of Chicago School of Business and his M.A. and B.A. in Economics
from Northwestern University. Mr. Manno is a member of the Investment
Committee of the Board of Directors.
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J. Marshall Peck, 44, has been nominated for election as a
director to hold office until the 1997 Annual Meeting of Stockholders in
connection with the US Realty Transaction. Mr. Peck is a Managing Director of
Security Capital Investment Research Incorporated, where he is responsible for
the operations and oversight of strategic investments. Prior to joining
Security Capital Investment Research Incorporated in May 1996, Mr. Peck was a
Managing Director of LaSalle Partners Limited since January 1989, where he
served in various capacities over his 14-year tenure with LaSalle Partners
Limited, with responsibility for operating groups within both the investment
and services businesses and was a member of its management committee. Prior
thereto, Mr. Peck held various marketing and management positions in the Data
Processing Division of IBM. Mr. Peck is past Chairman of the Pension Real
Estate Association and serves on the National Real Estate Advisory Board of the
Nature Conservancy. Mr. Peck received his B.A. degree from the University of
North Carolina at Chapel Hill.
NOMINEES FOR ELECTION TO TERM EXPIRING 1999
Andrew F. Brimmer, 69, has been a director of the Company since its
commencement of operations. He has been the President of Brimmer & Company,
Inc., an economic and financial consulting firm, since 1976. During 1995, Dr.
Brimmer was appointed chairman of the District of Columbia Financial Control
Board. Dr. Brimmer was a member of the Board of Governors of the Federal
Reserve System from 1966 through 1974. He is also the Wilmer D. Barrett
Professor of Economics at the University of Massachusetts--Amherst. Dr.
Brimmer serves as a director of BankAmerica Corporation and Bank of America,
BlackRock Investment Income Trust, Inc. (and other funds), PHH Corporation,
E.I. du Pont de Nemours & Company, Navistar International Corporation, Gannett
Company and Airborne Express. Dr. Brimmer received a B.A. and a masters degree
in Economics from the University of Washington and holds a Ph.D. in Economics
from Harvard University. Dr. Brimmer is a member of the Audit Committee of the
Board of Directors.
Oliver T. Carr, Jr., 71, has been the Chief Executive Officer and
Chairman of the Board of Directors of the Company since its commencement of
operations. Mr. Carr founded The Oliver Carr Company ("OCCO") in 1962 and
since that time has been its Chairman of the Board and a director. In
addition, Mr. Carr has served as President of OCCO since February 1993. He was
Chairman of the Board of Trustees of the George Washington University until May
1995 and currently is Chairman of the Community Partnership for the Prevention
of Homelessness. Mr. Carr is a member of the Executive Committee and the
Investment Committee of the Board of Directors.
George R. Puskar, 52, has been a director of the Company since its
commencement of operations. He has served as the Chairman and Chief Executive
Officer of Equitable Real Estate Investment Management, Inc. ("Equitable Real
Estate") since 1988 and a vice president of The Equitable Life Assurance
Society of the United States ("ELAS"). Mr. Puskar joined ELAS in 1966 in its
local field office in Pittsburgh. Mr. Puskar became the President of
Equitable Real Estate, a diversified real estate organization which is a
subsidiary of ELAS, in 1984. Mr. Puskar is a board member of the
International Council of Shopping Centers, Clark Atlanta University, The
Atlanta Chamber of Commerce, the Vice Chairman and a board member of the
National Realty Committee, and a member of the Advisory Board of the Wharton
School's Real Estate Center in Philadelphia. Mr. Puskar is a member of the
Executive Committee and the Nominating Committee of the Board of Directors.
William D. Sanders, 54, has been a director of the Company since May
1, 1996 following consummation of the US Realty Transaction. He is the Founder
and Chairman of Security Capital Group. Mr. Sanders retired on January 1, 1990
as chief executive officer of LaSalle Partners Limited, a firm he founded in
1968. LaSalle Partners Limited is a major real estate services firm
representing financial institutions and corporations in the United States and
abroad with more than
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700 employees. Mr. Sanders is a director of R.R. Donnelley & Sons Company and
was formerly a director of Continental Bank Corporation, Continental Bank,
N.A., King Ranch, Inc., LaSalle Partners Limited and its affiliates and Lone
Star Technologies, Inc. Mr. Sanders is a former trustee and member of the
executive committee of the University of Chicago and a former trustee fellow of
Cornell University. Mr. Sanders received his Bachelor of Science from Cornell
University. Mr. Sanders is a member of the Nominating Committee of the Board
of Directors.
INCUMBENT DIRECTORS -- TERM EXPIRING 1997
David Bonderman, 53, has been a director of the Company since its
commencement of operations. He is the managing general partner of TPG
Partners, L.P., a private investment partnership. From October 1971 through
June 1983, Mr. Bonderman was an associate and then partner in the law firm of
Arnold & Porter, Washington, D.C. From July 1983 through August 1992, Mr.
Bonderman served as the Vice President and Chief Operating Officer of Keystone,
Inc. (formerly the Robert M. Bass Group, Inc.). Mr. Bonderman also serves as a
director of Bell & Howell Holdings Company, National Re Corporation, American
Savings Bank, F.A., National Education Corporation and Continental Airlines,
Inc. Mr. Bonderman holds a Bachelor of Arts degree from the University of
Washington and an L.L.B. degree from Harvard University. Mr. Bonderman is a
member of the Executive Compensation Committee of the Board of Directors.
Robert O. Carr, 47, has been a director of the Company and President
and a director of Carr Real Estate Services, Inc., the Company's management and
leasing affiliate ("Carr Services, Inc."), since the commencement of their
operations. Mr. Carr is a director of OCCO and, from 1987 until February 1993,
Mr. Carr served as President of OCCO. Mr. Carr joined OCCO in 1973 and has
served in a number of positions. Mr. Carr is a member of the Greater
Washington Board of Trade, The District of Columbia Public Affairs Council and
The Urban Land Institute. Mr. Carr holds a Bachelor of Arts degree from
Trinity College in Hartford, Connecticut. Mr. Carr is the son of Oliver T.
Carr, Jr. and the brother of Thomas A. Carr. Mr. Carr is a member of the
Executive Committee of the Board of Directors.
INCUMBENT DIRECTORS -- TERM EXPIRING 1998
Thomas A. Carr, 37, has been President and a director of the Company
since its commencement of operations. Mr. Carr is also the Chief Operating
Officer of the Company and has been since May 1995. From the Company's
commencement of operations until May 1995, Mr. Carr was the Chief Financial
Officer of the Company. Mr. Carr was President of Carr Partners, Inc., a
financial services affiliate of OCCO, from 1991 until February 1993, when Carr
Partners, Inc. ceased operations. Prior to becoming President of Carr
Partners, Inc., Mr. Carr was Vice President of Suburban Development and
Regional Development Partner for Montgomery County for OCCO, beginning in 1985.
Mr. Carr is a director of OCCO. Mr. Carr holds a Masters degree in Business
Administration from Harvard Business School, and a Bachelor of Arts degree
from Brown University. Mr. Carr is a member of the Board of Governors of the
National Association of Real Estate Investment Trusts and a director of
Lafayette Square Partners, Inc. Mr. Carr is the son of Oliver T. Carr, Jr. and
the brother of Robert O. Carr. Mr. Carr is a member of the Executive Committee
and the Investment Committee of the Board of Directors.
A. James Clark, 68, has been a director of the Company since its
commencement of operations. He has been Chairman of the Board and President of
Clark Enterprises, Inc., a Bethesda, Maryland-based company involved in real
estate, communications, and commercial and residential construction, since
1972. The Clark Construction Group, Inc. a subsidiary of Clark Enterprises,
Inc., is one of the nation's largest general building contractors. Mr. Clark
is a member of the University of Maryland Foundation, and serves on the Board
of Trustees of The Johns Hopkins University. He is also a member of the PGA
Tour Investments Policy Board and a director of Lockheed Martin Corporation and
Potomac Electric Power Company. Mr. Clark is a
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graduate of the University of Maryland. Mr. Clark is a member of the Executive
Committee, the Investment Committee, the Executive Compensation Committee, and
the Nominating Committee of the Board of Directors.
Douglas T. Healy, 45, has been a director of the Company since its
commencement of operations. Mr. Healy also has been a director of Carr
Services, Inc. since March 1994. He serves as Executive Vice President of
Equitable Real Estate and a vice president of ELAS. Mr. Healy joined Equitable
Real Estate in 1977. He served as Senior Vice President in charge of Equitable
Real Estate's New York Regional Office from 1984 to 1989, when he became
Executive Vice President. Mr. Healy is a graduate of Towson State University
and a member of The Urban Land Institute. Mr. Healy is a member of the Audit
Committee of the Board of Directors.
Wesley S. Williams, Jr., 53, has been a director of the Company since
its commencement of operations. Mr. Williams has been a partner of the law
firm of Covington & Burling since 1975. He was adjunct professor of real
estate finance law at the Georgetown University Law Center from 1971 to 1973
and is a contributing author to several texts on banking law and on real estate
finance and investment. Mr. Williams is also on the Editorial Advisory Board
of the District of Columbia Real Estate Reporter. Mr. Williams serves as the
Vice Chairman of the Boards of Directors of the Blackstar Communications
Corporations of Florida, Michigan, Oregon and Washington, D.C. Mr. Williams
also is Vice Chairman and co-Chief Executive Officer of the Board of Directors
of The Lockhart Companies, Inc., and is a member of the Executive Committee of
the Board of Trustees of Penn Mutual Life Insurance Company. Mr. Williams
received a B.A. and J.D. from Harvard University, an M.A. from the Fletcher
School of Law and Diplomacy and an L.L.M. from Columbia University. Mr.
Williams is a member of the Executive Compensation Committee of the Board of
Directors.
COMMITTEES OF THE BOARD OF DIRECTORS; MEETINGS
In accordance with the By-laws of the Company, the Board of Directors
has established an Executive Committee, an Investment Committee, an Audit
Committee, an Executive Compensation Committee and a Nominating Committee. The
membership of these Committees is set forth in the preceding sections of this
Proxy Statement.
The Executive Committee has the authority, subject to the Company's
conflict of interest policies, to acquire and dispose of real property and the
power to authorize, on behalf of the full Board of Directors, the execution of
certain contracts and agreements, including those related to the borrowing of
money by the Company. The Executive Committee met one time in 1995 and took
action by unanimous written consent five times.
The Investment Committee was established by the Board of Directors in
April 1996 in general to approve agreements and other actions contemplated by
and within the amounts established in the budget for the Company approved by
the Board of Directors and to approve the acquisition of assets and the
incurrence of indebtedness and other matters treated as capital items which
involve less than $50 million for any single transaction or series of related
transactions and, in the aggregate, represent not more than 10% of the
Company's total assets during any fiscal quarter or that do not represent a
material change from the Company's business plan. The Investment Committee
does not have authority to approve any expenditure to or agreement with any
member of the Investment Committee, any member of the immediate family of a
member of the Investment Committee, or any entity in which any such person has
a direct or indirect financial interest.
The Audit Committee, which consists of two independent directors, was
established 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
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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. The Audit Committee met two times in 1995.
The Executive Compensation Committee was established to determine
compensation for the Company's executive officers and to implement the
Company's option plans. The Executive Compensation Committee met one
time in 1995 and took action by unanimous written consent one time.
The Nominating Committee was established to consider and make
recommendations to the Board of Directors regarding the size of the Board and
nominees for election as members of the Board of Directors of the Company. The
Committee is willing to consider nominees recommended by stockholders.
Stockholders who wish to suggest qualified candidates should write to the
Secretary of the Company and describe the qualifications of the persons they
wish to have considered. The Nominating Committee did not meet in 1995, but
took one action by unanimous written consent.
The Board of Directors held eight meetings during 1995 and took action
by unanimous written consent two times.
COMPENSATION OF DIRECTORS
The Company pays its directors who are not officers of the Company
fees for their services as directors. Directors receive annual compensation of
$12,000 plus a fee of $1,000 (plus out-of-pocket expenses) for attendance (in
person or by telephone) at each meeting of the Board of Directors. Directors
who are not officers of the Company receive a fee of $500 for attendance (in
person or by telephone) at each committee meeting held on a non-board meeting
day. Officers of the Company who are directors are not paid any director fees.
Pursuant to policies of ELAS, any remuneration received by a director that
represents ELAS must be paid to ELAS.
The Company has established the Non-Employee Director Stock Option
Plan for the purpose of attracting and retaining directors who are not
employees of the Company ("Non-Employee Directors"). The stock option plan
provides for the grant of options that are exercisable at fair market value of
the Company's Common Stock on the date of grant. The stock option plan was
approved by the Company's stockholders at its Annual Meeting of Stockholders on
April 28, 1995, following which each then-serving Non-Employee Director was
granted options to purchase 3,000 shares of Common Stock of the Company.
Immediately following each annual election of directors, each then serving
Non-Employee Director will receive options to purchase 5,000 shares of Common
Stock. The Non-Employee Director stock options vest over a three year period,
33 1/3% per year.
As of December 31, 1995 the Company had 150,000 shares of Common Stock
reserved for issuance under the Non-Employee Director Stock Option Plan, of
which 21,000 options were outstanding.
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STOCKHOLDER PROPOSAL RELATING TO
THE DECLASSIFICATION OF THE BOARD OF DIRECTORS
FOR THE PURPOSE OF DIRECTOR ELECTIONS
(ITEM 2)
The Service Employees International Union, 1313 L Street, N.W.,
Washington, D.C. 20005, holding 61 shares of Common Stock, has given notice of
its intention to propose the following resolution at the Meeting:
"BE IT RESOLVED: The stockholders of Carr Realty Corporation urge that the
Board of Directors take the necessary steps to declassify the Board of
Directors for the purpose of director elections. The Board declassification
shall be done in a manner that does not affect the unexpired terms of directors
previously elected."
The following statement has been submitted by the Service Employees
International Union in support of the resolution:
"The Board of Directors of Carr Realty Corporation is divided into
three classes serving staggered three-year terms. It is our belief that the
classification of the Board of Directors is not in the best interests of the
[sic] Carr Realty Corporation and its' shareholders. The elimination of the
staggered board would require each director to stand for election annually.
This procedure would allow shareholders an opportunity to annually register
their views on the performance of the board collectively and each director
individually. Concerns that the annual election of all directors would leave
Carr Realty Corporation without experienced board members in the event that all
incumbents are voted out is unfounded. If the owners should choose to replace
the entire board, it would be obvious that the incumbent directors'
contributions were not valued.
A classified board of directors protects the incumbency of the board
of directors and current management which in turn limits accountability to
stockholders. In addition to a classified board, the [sic] Carr Realty
Corporation has the following measures which protect incumbency and limit
accountability to shareholders. It is our belief that these protections for
incumbents reduce management's accountability to shareholders and negatively
impact financial performance.
We urge you to VOTE FOR this proposal."
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 2.
The Company's current system of electing directors to staggered
three-year terms has been in place since the Company completed its initial
public offering of Common Stock in February 1993. Under this method,
approximately one-third of the directors are elected annually by the Company's
stockholders.
The Board of Directors believes that board classification provides the
Company and its stockholders with significant continuity and stability, factors
which are of vital importance to the Company's business. At all times, the
Company benefits from having at least two-thirds of the Board of Directors
experienced with the Company's long-term business strategy and operations.
This enables the Board of Directors to build on past experience and plan for a
reasonable time into the future. Board classification provides an effective
balance between the need for continuity and experience on the Board and the
need for revalidation of the stockholder mandate through the election process.
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The Board believes that directors elected to a classified Board are no
less accountable to stockholders than they would be if elected annually.
Directors are continually accountable to stockholders by virtue of state law
fiduciary duties and their ongoing legal obligations to serve the best
interests of all stockholders. Accountability is not affected by the length of
a director's term.
In addition, the classified Board is intended to encourage persons who
may seek to acquire control of the Company to initiate such action through
negotiations with the Board. At least two meetings of the stockholders would
generally be required to replace a majority of the Board. Board classification
reduces the risk to the Company and its stockholders of the uncertainty and
instability resulting from a precipitous change in the majority control of the
Board. By reducing the threat of an abrupt change in the composition of the
entire Board, classification of directors would give the Board sufficient time
to review any takeover proposal, study appropriate alternatives and achieve the
best results for all stockholders. The Board believes that although a
classified board enhances the ability to negotiate favorable terms with a
proponent of an unfriendly or unsolicited proposal, it does not necessarily
discourage takeover offers.
Adoption of this proposal would not in itself eliminate the classified
Board. The proposal is precatory, urging the Board of Directors to take steps
to declassify the Board. Further action by the stockholders would be necessary
to amend the Articles of Incorporation and By-laws of the Company with a vote
of a majority of the stockholders cast at a stockholders meeting.
The Board believes that a classified Board is in the best interests of
the stockholders of the Company and that stockholders should oppose efforts to
eliminate it.
-----------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 2.
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STOCKHOLDER PROPOSAL TO
AMEND THE COMPANY'S BY-LAWS TO
SEPARATE THE OFFICES OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER
(ITEM 3)
Emanuel David Pastreich, 1631 S Street, N.W., #804, Washington, D.C.,
holding 4 shares of Common Stock, has given notice of his intention to propose
the following resolution at the Meeting:
"RESOLVED, that the shareholders of Carr Realty Corporation amend Article 4,
Section 15 of the By-Laws as follows:
DELETE existing Section 4.15
INSERT in Lieu Thereof:
Section 4.15 Chairman of the Board. The Board of Directors may choose
a Chairman of the Board who shall, if present, preside at meetings of the Board
and of the stockholders. The Chairman of the Board shall not be an officer of
the Corporation. The latter [sic] sentence may not be amended or repealed
except by holders of a majority of the issued and outstanding shares of Common
Stock."
Mr. Pastreich has not submitted to the Company a statement in support
of his resolution.
-----------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 3.
Oliver T. Carr, Jr. has served as the Chairman and Chief Executive
Officer of the Company since its commencement of operations. By holding both
positions, the Board believes that Mr. Oliver Carr has been better able to
effectively act in both capacities. As Chief Executive Officer, Mr. Oliver
Carr understands the day-to-day operations of the Company and thus, in his
capacity as Chairman of the Board, is a more effective liaison between
management of the Company and the Board of Directors. Similarly, as Chairman
of the Board of Directors, Mr. Oliver Carr's ability to guide the Board of
Directors in setting the overall direction for the Company in a manner which is
consistent with the vision and objectives of management is enhanced because of
his participation as Chief Executive Officer in formulating management's
recommendations to the Board of Directors regarding long-term business plans.
Directors of the Company, including the Chairman of the Board, are
bound by state law-imposed fiduciary obligations to serve the best interests of
the Company's stockholders. Separating the offices of Chairman and Chief
Executive Officer would not serve to enhance or diminish the fiduciary duties
of any director or officer of the Company. The Board of Directors currently
believes that the fact that the positions of Chairman and Chief Executive
Officer are held by the same person does not impair the independence, integrity
or functioning of either the Chairman or the Chief Executive Officer but rather
greatly enhances the productivity of both positions. It is important to note
that there currently is nothing in the Company's By-laws which would preclude
the Board of Directors from determining that the positions of Chairman and
Chief Executive Officer should be held by different people, if, at some future
time, the Board of Directors believes that such action is in the best interests
of the Company's stockholders. The proposed amendment to the By-laws, however,
limits the flexibility of the Board of Directors to act in the manner that it
determines, based on the facts and circumstances at any given time, would best
serve the stockholders' interests. The Chairman of the Board has no greater
nor lesser vote on matters considered by the Board of Directors than any other
director.
10
<PAGE> 12
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 3.
11
<PAGE> 13
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
annual and long-term compensation for the chief executive officer and the four
most highly compensated executive officers of the Company (the "Named Executive
Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------------- ----------------
Other Annual Options All Other
Name and Principal Position Year Salary($)(1) Bonus($) Compensation Granted (#) (2) Compensation
--------------------------- ---- ----------- -------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Oliver T. Carr, Jr. 1995 $152,885(3) -- -- -- $8,695(6)
Chairman of the Board 1994 $125,000 -- -- 81,500 $4,806(6)
and Chief Executive Officer 1993 $108,200 -- -- 38,500 $8,900(6)
Thomas A. Carr 1995 $225,000 -- -- -- $8,782(7)
President and Chief 1994 $225,000 -- -- 81,500 $9,306(7)
Operating Officer 1993 $194,700 $29,530 -- 38,500 $3,600(7)
Robert O. Carr 1995 $200,000 -- -- -- $8,782(8)
President of Carr 1994 $200,000 -- -- 51,500 $9,306(8)
Services, Inc. 1993 $173,000 $19,369 -- 38,500 $3,000(8)
John J. Donovan, Jr. 1995 $543,462(4) -- -- -- $8,782(9)
Senior Vice President of 1994 $387,452(4) -- -- 31,500 $9,306(9)
Carr Services, Inc. 1993 $263,600(4) $11,863 -- 38,500 $ 900(9)
Steven N. Bralower 1995 $249,148(5) -- -- -- $7,718(10)
Senior Vice President of 1994 $256,635(5) -- -- 26,500 $8,694(10)
Carr Services, Inc. 1993 $178,400(5) $5,931 -- 33,500 $2,200(10)
</TABLE>
(1) The Company commenced operations on February 16, 1993. The amounts
set forth as "Salary" for 1993 represent actual salary paid to such
officers for the period from February 16, 1993 to December 31, 1993.
The salaries of Messrs. Oliver T. Carr, Jr., Thomas A. Carr, Robert
O. Carr, John J. Donovan and Steven N. Bralower for 1993 on an
annualized basis were $125,000, $225,000, $200,000, $200,000 and
$175,000, respectively. Compensation paid to Messrs. Robert Carr,
Donovan and Bralower was paid by Carr Services, Inc.
(2) Represents options to purchase Class A Units of limited partner
interest in Carr Realty, L.P. ("Class A Units") granted during the
period ended December 31, 1995, 1994, and 1993 respectively. Class A
Units are redeemable by the holder thereof for cash or Common Stock of
the Company, at the option of the Company.
(3) Mr. Oliver Carr's employment contract was amended by the Board of
Directors as of May 22, 1995, to increase his salary to $250,000 on an
annualized basis effective as of October 1995. Mr. Oliver Carr's
employment contract was also amended by the Board of Directors as of
May 22, 1995 to permit Mr. Oliver Carr to receive additional
compensation in such amounts and at such times as the Board of
Directors determines.
(4) Salary for 1995, 1994 and 1993 for Mr. Donovan includes $333,462,
$178,991 and $91,300, respectively, in commissions earned by Mr.
Donovan based on certain leasing commissions earned by Carr Services,
Inc.
(5) Salary for 1995, 1994 and 1993 for Mr. Bralower includes $59,148,
$68,944 and $27,000, respectively, in commissions earned by Mr.
Bralower based on certain leasing commissions earned by Carr Services,
Inc.
(6) All Other Compensation for 1995, 1994 and 1993 consists solely of
employer contributions to the Carr Realty Retirement Plan in the
amount of $8,250, $3,750 and $8,000, respectively, and life insurance
premiums in the amount of $445, $1,056 and $900, respectively, paid
for the benefit of Mr. Oliver Carr.
12
<PAGE> 14
(7) All Other Compensation for 1995, 1994 and 1993 consists solely of
employer contributions to the Carr Realty Retirement Plan in the
amount of $8,250, $8,250 and $2,700, respectively, and life insurance
premiums in the amount of $532, $1,056 and $900, respectively, paid
for the benefit of Mr. Thomas Carr.
(8) All Other Compensation for 1995, 1994 and 1993 consists solely of
employer contributions to the Oliver Carr Retirement Plan and Trust in
the amount of $8,250, $8,250 and $2,100, respectively, and life
insurance premiums in the amount of $532, $1,056 and $900,
respectively, paid for the benefit of Mr. Robert Carr.
(9) All Other Compensation for 1995, 1994 and 1993 consists solely of
employer contributions to the Oliver Carr Retirement Plan and Trust in
the amount of $8,250, $8,250 and $0, respectively, and life insurance
premiums in the amount of $532, $1,056 and $900, respectively, paid
for the benefit of Mr. Donovan.
(10) All Other Compensation for 1995, 1994 and 1993 consists solely of
employer contributions to the Oliver Carr Retirement Plan and Trust in
the amount of $7,186, $7,638 and $1,300 respectively, and life
insurance premiums in the amount of $532, $1,056 and $900,
respectively, paid for the benefit of Mr. Bralower.
OPTION PLANS
Options granted generally vest 20% on each of the first five
anniversaries of the respective grant dates; provided that the options granted
on January 28, 1994 commenced vesting on February 16, 1994 and vest 20% on each
anniversary thereof. There were no options granted in 1995 to the Named
Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Securities Underlying In-the-Money
Shares Options at FY-End(1) Options at FY-End(2)
Acquired Value -------------------- -----------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Oliver T. Carr, Jr. -- -- 55,700 64,300 $103,763 $109,925
Thomas A. Carr -- -- 55,700 64,300 103,763 109,925
Robert O. Carr -- -- 33,400 56,600 61,300 62,325
John J. Donovan, Jr. -- -- 29,400 40,600 58,800 52,325
Steven N. Bralower -- -- 25,400 34,600 51,050 45,075
----------------------
</TABLE>
(1) The number of unexercised options at fiscal year end is based on the
number of shares of Common Stock for which each underlying Class A
Unit of Carr Realty, L.P. would have been redeemable on that date.
(2) Based on the last reported sale price of the Common Stock on the NYSE
on December 31, 1995 of $24.375.
Upon exercise of an option, an optionee will be deemed to receive
ordinary income in an amount equal to the difference between the exercise price
and the fair market value of the underlying Class A Unit on the date of the
exercise and Carr Realty, L.P. or Carr Services, Inc., as applicable, will be
entitled to a deduction for the amount recognized as ordinary income by the
optionee.
13
<PAGE> 15
EMPLOYMENT CONTRACTS
Each of Messrs. Oliver T. Carr, Jr., Thomas A. Carr, Robert O. Carr,
John J. Donovan, Jr., and Steven N. Bralower have entered into employment
contracts with the Company. These contracts, which expire on December 31,
1996, provide for annual compensation in the amounts set forth in the Summary
Compensation Table above, exclusive of leasing commissions. Each contract
includes provisions restricting the officers from competing with the Company
during employment and, except in certain circumstances, for a limited period of
time (or, in the case of Oliver T. Carr, Jr., indefinitely) after termination
of employment. Each of the employment contracts provides for certain severance
payments in the event of disability or termination by the Company without cause
or by the employee with cause.
By unanimous written consent as of May 22, 1995, the Board of
Directors (with Mr. Oliver Carr recusing himself) approved the amendment of Mr.
Oliver Carr's employment contract with the Company to increase his base salary
to $250,000 per year effective as of October 1995, and to permit him to receive
additional compensation in such amounts and at such times as the Board of
Directors determines in its sole and absolute discretion.
14
<PAGE> 16
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1993, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate SEC filings, in whole
or in part, the following Performance Graph and the Report on Executive
Compensation shall not be incorporated by reference into any such filings:
PERFORMANCE GRAPH
COMPARISON OF 35 MONTH CUMULATIVE TOTAL RETURN*
AMONG CARR REALTY CORPORATION, THE S & P 500 INDEX
AND THE NAREIT EQUITY INDEX
<TABLE>
<CAPTION>
CARR
REALTY S&P NAREIT
CORPORATION 500 EQUITY
<S> <C> <C> <C>
2/9/93 $100 $100 $100
12/93 109 109 112
12/94 93 111 116
12/95 138 152 134
</TABLE>
* $100 INVESTED ON 02/09/93 IN STOCK OR
ON 01/31/93 IN INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS
FISCAL YEAR ENDING DECEMBER 31.
15
<PAGE> 17
REPORT ON EXECUTIVE COMPENSATION
The following sets forth the report of the Executive Compensation
Committee of the Board of Directors:
The Company's Executive Compensation Committee (the "Committee") is
comprised entirely of non-employee directors and is responsible for
recommending to the Board of Directors compensation policies applicable to the
Company's executive officers, including salaries and bonuses, and such other
forms of compensation as the Committee deems appropriate. The Committee
believes that the success of the Company is attributable to the dedication of
its employees and, in particular, to the management and leadership effort of
its executive officers. The Committee believes that the Company's compensation
program must be structured in a manner that will help the Company attract and
retain qualified executive officers. At the recommendation of the Committee,
the Company has developed and implemented compensation policies, plans and
programs which seek to enhance the profitability of the Company, and thus
shareholder value, by aligning closely the financial interests of the Company's
executive officers with those of its shareholders. The Committee annually
deliberates the appropriate combination of cash and option-based compensation
and, among other things, weighs the competitiveness of the Company's overall
compensation arrangements in relation to comparable corporations.
The Committee is committed to a compensation philosophy which rewards
employees primarily on the Company's success in attaining corporate financial
objectives and, secondarily, on the employee's success in attaining
departmental and individual financial and qualitative performance objectives.
In view of the significant shift in the business strategy of the Company and
its aggressive national growth plan, management recommended to the Committee a
substantially revised compensation plan in 1996 (the "Plan") which elaborates
upon and formalizes the Company's prior compensation policies, plans and
programs. At the Committee's direction, management retained a compensation
consultant to assist it in the development of the Plan. The Committee sees the
Plan as a transitional one due to the fact that the Company is in a period of
significant change. Accordingly, the Committee intends to comprehensively
re-examine the Plan for 1997 to tailor it to the Company's objectives and needs
at that time. The Plan has been approved by the Board of Directors.
Central to the Plan is the definition of detailed performance goals
and financial targets. The Plan continues the three major components of the
Company's prior compensation plans: base salaries and increases thereto;
annual cash bonuses; and long-term incentive compensation.
Base Salaries
Base salaries are determined by reference to a variety of factors,
including level of responsibility, an analysis of job requirements and prior
experience and accomplishments. Base salary ranges are established
preliminarily after analyzing compensation surveys for the industry and
similarly-situated companies. Base salaries for specific jobs are then
determined by evaluating the knowledge required for the job, how the employee's
knowledge is applied in completing assignments and the impact to the Company of
the end results. The Company's annual base salaries and increases thereto have
historically been in general below those of other publicly traded real estate
investment trusts the Company has reviewed.
16
<PAGE> 18
Annual Bonus Compensation
An important feature of the Plan is the emphasis placed on annual cash
incentive compensation as an integral part of an employee's total compensation
package. Employees are expected to be successful in attaining well-defined
performance criteria. These performance criteria are primarily quantitative
goals for the performance of the Company and, in some cases, for a specific
department and, to a lesser extent, individualized qualitative goals. Actual
awards paid are based on actual performance. As part of the Plan, the Company
will implement a comprehensive program of evaluating employee achievement based
on preestablished detailed qualitative performance criteria.
An aggregate of approximately $400,000 was paid in 1996 to a total of
7 executive officers and key employees of the Company as annual cash bonuses
for 1995. The award of cash bonuses was based primarily of the fact that the
Company exceeded its budgeted quantitative targets. In addition, the grant of
cash bonuses in 1995 reflects recognition of the special efforts of certain
executive officers and key employees in consummating the US Realty Transaction.
Long-Term Incentive Compensation
The Company's long-term incentive compensation plan currently consists
of option plans under which executive officers and other key employees of the
Company are eligible to receive options to acquire Class A Units in Carr
Realty, L.P. ("Options"). Class A Units of Carr Realty, L.P. are redeemable
for Common Stock of the Company or, at the Company's election, cash equal to
the value of an equal number of shares of Common Stock and, therefore, have a
value equal to that of the Company's Common Stock.
The purpose of Option grants is to offer employees an incentive to
maximize their efforts to promote the Company's economic performance, thereby
also advancing the interests of the Company's stockholders. Option grants have
an exercise price at least equal to 100% of the fair market value of the
underlying Class A Units on the date of grant (determined by reference to the
Company's Common Stock) so that an employee does not profit from the Option
unless the price of the Company's Common Stock increases. In addition, to
encourage the Company's employees to seek long-term appreciation in the value
of the Company's Common Stock, Options are not exercisable immediately upon
grant, but instead vest over a specified period of time, and then only if the
employee remains with the Company. Accordingly, an employee generally must
remain with the Company for a period of 5 years to enjoy the full economic
benefit of an Option.
The Plan contemplates that the Committee will make Option awards on a
periodic basis. The number of Options granted to a particular employee is
based on the Company's financial success, its future business plans and the
employee's individual position and level of responsibility within the Company.
In granting Options in 1995, the Committee acknowledged that certain executive
officers and key employees of the Company had previously been awarded Options
and accordingly, Options were granted to these executive officers and key
employees in 1995 solely to equalize the total number of Options among
executive officers within the same job function category.
Chief Executive Officer Compensation
The salary and long-term incentive awards of Mr. Oliver T. Carr, Jr.
are determined substantially in conformity with the policies described above
for all other executive officers of the Company. The base salary of Mr. Oliver
T. Carr, Jr. for 1995 was based on the terms of his employment agreement with
the Company. That employment agreement was entered into on February 5, 1993 in
connection with the Company's initial public offering. Mr. Carr was not
17
<PAGE> 19
granted any Options during 1995. Prior to October, 1995, Mr. Carr's base
salary was significantly less than that of chief executive officers of many
competitive companies. Mr. Carr's employment contract was amended in 1995 with
the approval of the Board of Directors of the Company to increase Mr. Carr's
annual base salary to $250,000 (effective as of October, 1995), and to permit
the Board of Directors to award Mr. Carr a cash bonus in such amounts and at
such times as the Board of Directors determines. For 1995, Mr. Carr received
an annual cash bonus in 1996 of $67,500.
Carr Services, Inc.
Certain of the executive officers of the Company are employed by Carr
Services, Inc., in which the Company owns a preferred interest that entitles it
to receive 95% of cash flow but does not control the voting Common Stock. As
employees of Carr Services, Inc., these officers are paid by Carr Services,
Inc. In making its base salary, annual bonus compensation and long-term
incentive compensation decisions, Carr Services, Inc.'s board of directors
considers all of the factors described above.
David Bonderman
A. James Clark
Wesley S. Williams, Jr.
EXECUTIVE COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Executive Compensation Committee is an
employee of the Company.
As described below, A. James Clark, who is a member of the Executive
Compensation Committee, owns interests in certain entities that, during 1995,
were parties to certain transactions involving the Company.
Carr Services, Inc. provides management and leasing services to
properties owned by partnerships in which A. James Clark and/or Clark
Enterprises, Inc. have interests. Carr Services, Inc. received revenue of $.4
million for 1995 from partnerships in which A. James Clark and/or Clark
Enterprises, Inc. have interests.
Wholly-owned subsidiaries of Clark Enterprises, Inc. have provided
construction services to the Company. In connection with these services, the
subsidiaries received payments from the Company of $.7 million for 1995,
excluding payments described in the next paragraph. These amounts included
amounts paid by these subsidiaries for materials and to sub-contractors.
On September 26, 1994, the Company and Cousins Properties Incorporated
entered into a joint venture ("CC-JM II Associates") to develop and own a new
office building to be located in McLean, Virginia. Mr. Clark was a limited
partner in the partnership which sold the land to CC-JM II Associates for a
purchase price of $2.1 million. A wholly-owned subsidiary of Clark
Enterprises, Inc. is providing construction services to the joint venture
pursuant to an $18 million contract and, for the year ended December 31, 1995,
received payments from the Company, including change orders, of $18.4 million.
18
<PAGE> 20
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information regarding the beneficial
ownership of shares of Common Stock as of April 30, 1996 for (1) each person
known by the Company to be holding more than 5% of the outstanding Common
Stock, (2) each director and nominee of the Company and each Named Executive
Officer, and (3) the directors and executive officers of the Company as a
group. Unless otherwise indicated in the footnotes, all such interests are
owned directly, and the indicated person or entity has sole voting and
investment power. The number of shares reported as beneficially owned by a
person represents the number of shares of Common Stock the person holds
(including shares of Common Stock that may be issued upon exercise of options
that are exercisable within 60 days of April 30, 1996) plus the number of
shares into which Class A Units of Carr Realty, L.P. held by the person
(including Class A Units of Carr Realty, L.P. that may be issued upon the
exercise of options that are exercisable within 60 days of April 30, 1996) are
redeemable (if the Company elects to issue shares rather than pay cash upon
such redemption). For purposes of the following table, the number of shares of
Common Stock and Class A and Class B Units deemed outstanding includes
25,200,469 shares of Common Stock, 18,197,446 Class A and Class B Units of Carr
Realty, L.P. (including the Class A Units held by the Company) and 414,540
Class A Units and 5,000 shares of Common Stock issuable upon exercise of
options exercisable within 60 days of April 30, 1996. The extent to which a
person holds shares of Common Stock, as opposed to Class A or Class B Units of
Carr Realty, L.P. or options to purchase Class A Units of Carr Realty, L.P. or
Common Stock which are exercisable within 60 days of April 30, 1996, is set
forth in the footnotes.
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF PERCENT ALL
NUMBER AND ADDRESS SHARES/UNITS OF ALL SHARES/
OF BENEFICIAL OWNER BENEFICIALLY OWNED SHARES (1) UNITS(2)
------------------- ------------------ ---------- ---------
<S> <C> <C> <C>
Security Capital U.S. Realty
Security Capital Holdings S. A. (3) . . . . 11,627,907 46.1% 39.0%
69, route d'Esch
L-2953 Luxembourg
Oliver T. Carr, Jr. (4) . . . . . . . . . . 1,656,466 6.3% 5.5%
CarrAmerica Realty Corporation
1700 Pennsylvania, N.W.
Washington, D.C. 20006
The Equitable Life Assurance
Society of the United States (5) . . . . 1,565,429 6.2% 5.2%
787 7th Avenue
New York, New York 10019
A. James Clark (6) . . . . . . . . . . . . 929,575 3.6% 3.1%
Clark Enterprises, Inc.
7500 Old Georgetown Road
Bethesda, Maryland 20814
Thomas A. Carr (7) . . . . . . . . . . . . 104,422 * *
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Andrew F. Brimmer (8) . . . . . . . . . . . 1,000 * *
4400 MacArthur Boulevard, N.W.
Washington, D.C. 20007
</TABLE>
19
<PAGE> 21
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF PERCENT ALL
NUMBER AND ADDRESS SHARES/UNITS OF ALL SHARES/
OF BENEFICIAL OWNER BENEFICIALLY OWNED SHARES (1) UNITS(2)
------------------- ------------------ ---------- --------
<S> <C> <C> <C>
David Bonderman (9) . . . . . . . . . . . . 38,083 * *
201 Main Street
Fort Worth, Texas 76102
William D. Sanders (10) . . . . . . . . . . 0 * *
Security Capital Group
125 Lincoln Avenue
Santa Fe, NM 87501
J. Marshall Peck (11) . . . . . . . . . . . 0 * *
Security Capital Investment Research
11 South LaSalle Street
Chicago, IL 60603
Steven N. Bralower (12) . . . . . . . . . . 53,887 * *
Carr Services, Inc.
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Anthony R. Manno, Jr.(13) . . . . . . . . . 10,000 * *
11 South LaSalle Street
Chicago, Illinois 60603
Robert O. Carr (14) . . . . . . . . . . . . 64,619 * *
Carr Services, Inc.
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
John J. Donovan, Jr. (15) . . . . . . . . . 52,036 * *
Carr Services, Inc.
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
George R. Puskar (16) . . . . . . . . . . . 11,000 * *
1150 Lake Hearn Drive, N.E.
Suite 400
Atlanta, Georgia 30342
Douglas T. Healy (17) . . . . . . . . . . . 1,000 * *
5775 Peachtree Dunwoody Road
Suite 200-D
Atlanta, Georgia 30342
Wesley S. Williams, Jr. (18) . . . . . . . 1,200 * *
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20044
All officers and directors as a group 3,116,579 11.3% 10.3%
(22 persons)
</TABLE>
-------------------------
*Less than 1.0%
20
<PAGE> 22
(1) Assumes that all Class A and Class B Units of Carr Realty, L.P. held by
the person (including Class A Units issuable to such person upon
exercise of options which are exercisable within 60 days of April 30,
1996) are redeemed for shares of Common Stock. The total number of
shares outstanding used in calculating this percentage includes all
currently issued and outstanding shares of Common Stock plus shares of
Common Stock issuable upon redemption of all Class A and Class B Units
beneficially owned by the person (including Class A Units issuable to
such person upon exercise of options which are exercisable within 60
days of April 30, 1996), but assumes that none of the Class A
and Class B Units held by other persons are redeemed for shares of
Common Stock.
(2) Assumes that all Class A and Class B Units held by the person (including
Class A Units issuable to such person upon exercise of options which are
exercisable within 60 days of April 30, 1996) are redeemed for shares of
Common Stock. The total number of shares outstanding used in
calculating this percentage includes all currently issued and
outstanding shares of Common Stock and assumes that all of the Class A
and Class B Units held by other persons (including Class A Units
issuable to such person upon exercise of options which are exercisable
within 60 days of April 30, 1996) are redeemed for shares of Common
Stock.
(3) Security Capital Holdings S.A., a wholly-owned subsidiary of Security
Capital U.S. Realty, holds all of its interest in shares of Common
Stock. These shares were purchased after the record date for the
Meeting and therefore are not entitled to vote on the matters being
considered herein.
(4) The aggregate amount of shares of Common Stock beneficially owned by Mr.
Oliver T. Carr, Jr. consists of 71,045 shares of Common Stock and
284,672 Class A Units owned directly by him, and 10,000 shares of Common
Stock and 150,000 Class A Units owned by his spouse, 7,565 shares of
Common Stock owned by Mr. and Mrs. Carr as joint tenants, 1,061,184
shares of Common Stock and Class A Units owned by OCCO, of which Mr.
Carr is a director, chairman of the board, president and trustee of the
majority stockholder and Mr. Carr's options to purchase 72,000 Class A
Units which are exercisable within 60 days of April 30, 1996. Of the
amount shown, Mr. Carr and OCCO hold 1,085,133 Class A Units and 499,333
shares of Common Stock.
(5) ELAS holds all of its interest in the Company in shares of Common Stock.
(6) The aggregate amount of shares of Common Stock beneficially owned by Mr.
A. James Clark consists of 359,596 Class A Units owned directly by him
and 569,979 Class A Units owned by Clark Enterprises, Inc., of which Mr.
Clark is chairman, president, a director and the majority stockholder.
(7) Mr. Thomas A. Carr is a director of OCCO. Mr. Carr disclaims beneficial
ownership of the shares of Common Stock and Class A Units held by OCCO
and the amount reported for him does not include such shares of Common
Stock or Class A Units. Mr. Carr holds 29,515 Class A Units directly
and 2,907 Class A Units are held by his children. Mr. Carr has options
to purchase 72,000 Class A Units which are exercisable within 60 days of
April 30, 1996. Mr. Carr was late in filing one Form 4 with the
Securities and Exchange Commission reporting the gift of Units to four
persons.
(8) Dr. Brimmer has options to purchase 1,000 shares of Common Stock of the
Company which are exercisable within 60 days of April 30, 1996.
(9) The aggregate amount of shares of Common Stock beneficially owned by Mr.
Bonderman consists of 22,176 Class A Units owned directly by him, 5,000
Class A Units owned by Group Management, Inc., of which Mr. Bonderman is
the controlling person, 8,084 shares of Common Stock owned directly by
Mr. Bonderman and 1,823 shares of Common Stock owned by Group Management,
Inc. Mr. Bonderman has options to purchase 1,000 shares of Common Stock
of the Company which are exercisable within 60 days of April 30, 1996.
(10) Mr. Sanders became a director of the Company as of May 1, 1996.
(11) Mr. Peck has been nominated to become a director of the Company.
(12) Mr. Bralower holds 23,187 shares of Common Stock and has options to
purchase 30,700 Class A Units which are exercisable within 60 days of
April 30, 1996. Mr. Bralower was late in filing one Form 4 with the
Securities and Exchange Commission reporting the transfer of
21
<PAGE> 23
the Units to him as deferred compensation, the redemption of Units and
the sale of shares of Common Stock.
(13) Mr. Manno, who became a director of the Company as of May 1, 1996, holds
10,000 shares of Common Stock.
(14) Mr. Robert O. Carr is a director of OCCO. Mr. Carr disclaims beneficial
ownership of the shares of Common Stock and Class A Units held by OCCO,
and the amount reported for him does not include such shares of Common
Stock or Class A Units. Mr. Carr holds 14,083 shares of Common Stock,
6,836 Class A Units and has options to purchase 43,700 Class A Units
which are exercisable within 60 days of April 30, 1996.
(15) Mr. Donovan holds 16,336 shares of Common Stock and has options to
purchase 35,700 Class A Units which are exercisable within 60 days of
April 30, 1996. Mr. Donovan was late in filing one Form 4 with the
Securities and Exchange Commission reporting the transfer of Units to
him as deferred compensation, the redemption of Units and the sale of
shares of Common Stock.
(16) Mr. Puskar, who is a director of the Company, is an officer of Equitable
Real Estate, a wholly owned subsidiary of ELAS, but disclaims beneficial
ownership of shares of Common Stock held by ELAS. The reported amount
therefore does not include any shares held by ELAS. Mr. Puskar holds
all of his interest in the Company in shares of Common Stock. The
aggregate amount of shares of Common Stock beneficially owned by Mr.
Puskar consists of 5,500 shares of Common Stock owned directly by him,
4,500 shares of Common Stock owned by his spouse and options to purchase
1,000 shares of Common Stock of the Company which are exercisable
within 60 days of April 30, 1996.
(17) Mr. Healy, who is a director of the Company, is an officer of Equitable
Real Estate, a wholly owned subsidiary of ELAS, but disclaims beneficial
ownership of shares of Common Stock held by ELAS. The reported amount
therefore does not include any shares of Common Stock held by ELAS. Mr.
Healy has options to purchase 1,000 shares of Common Stock of the
Company which are exercisable within 60 days of April 30, 1996.
(18) Mr. Williams holds all of his interest in the Company in shares of
Common Stock. Mr. Williams has options to purchase 1,000 shares of
Common Stock of the Company which are exercisable within 60 days of
April 30, 1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
OCCO AND OLIVER T. CARR, JR.
Carr Services, Inc. provides management and leasing services to
properties owned by partnerships in which OCCO and/or Oliver T. Carr, Jr. (as
well as A. James Clark and ELAS in some circumstances) have interests.
Management fees are generally equal to 2% to 3% of collected revenue from the
managed property, and leasing fees are generally equal to 1.5% to 2% of the
rent payable over the life of the lease. Carr Services, Inc. received revenue
from these affiliated partnerships of $6.7 million for 1995.
CarrPark, Inc. ("CarrPark") a wholly owned subsidiary of OCCO, manages
certain parking garages in properties owned by the Company. CarrPark is
responsible for payment of all garage operating expenses. Fees paid by the
Company to CarrPark for 1995 totaled $1.8 million.
The Company leases office space from a partnership affiliated with
OCCO. Rent paid to the partnership for 1995 was $.9 million.
In connection with the Company's acquisition of 1717 Pennsylvania
Avenue, Carr Development & Construction, the development business of OCCO,
assisted the Company in its due diligence and underwriting work, and
subsequently was retained as the development manager of the Company's current
redevelopment of 1717 Pennsylvania Avenue. Fees paid by the Company to Carr
Development & Construction for 1995 totaled $.5 million.
22
<PAGE> 24
On January 6, 1995, Carr Realty, L.P. and OCCO formed a new
subsidiary, CRESNOVA. Carr Realty, L.P. owns approximately 98.8% of the
economic interest in CRESNOVA, but OCCO owns 95% of the voting stock. On
January 20, 1995, CRESNOVA acquired the property management and leasing
business of The Evans Company, a Northern Virginia real estate company, for
$7.1 million. The Evans Company's property management and leasing business
included contracts to provide property management and leasing services for 11
commercial office buildings located in Northern Virginia. Carr Realty, L.P.
also made a $1.5 million secured loan to The Evans Company. David W. Evans, a
controlling shareholder of The Evans Company, is the brother-in-law of Oliver
T. Carr, Jr. On January 31, 1996, the Company terminated an agreement to
acquire the development business of The Evans Company, and as a result in 1995
the Company recognized a $1.9 million loss consisting of 40,909 Units of Carr
Realty, L.P., a cash payment of $750 thousand and various other acquisition
costs of approximately $170 thousand. The Company elected to take this action
in order to focus on implementing its national growth strategy precipitated by
the Transaction, focusing solely on value office properties.
Oliver T. Carr, Jr., as beneficial owner of the majority of shares of
OCCO, also has an indirect material interest in the transactions involving OCCO
described above.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Carr Services, Inc. provides management and leasing services to
properties owned by partnerships in which ELAS has interests. In addition to
revenue received from partnerships in which OCCO also has an interest (as
described above), Carr Services, Inc. received revenue of $.4 million for 1995
from partnerships in which ELAS has an interest.
ELAS leases approximately 10,000 square feet of space in one of the
Properties, and paid base rent to the Company in the amount of approximately
$.3 million for 1995.
OTHER MATTERS
The Company's management knows of no other matters which may be
presented for consideration at the Meeting. However, if any other matters
properly come before the Meeting, it is the intention of the persons named in
the proxy to vote such proxy in accordance with their judgment on such matters.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of stockholders to be presented at the 1997 Annual Meeting
must be received by the Secretary of the Company prior to January 13, 1997 to
be considered for inclusion in the 1996 proxy material. In addition, any
stockholder who wishes to propose a nominee to the Board of Directors or submit
any other matter to a vote at a meeting of stockholders (other than a
stockholder proposal included in the Company's proxy materials pursuant to Rule
14a-8 of the
23
<PAGE> 25
rules promulgated under the Securities Exchange Act of 1934, as amended), must
comply with the advance notice provisions and other requirements of Section
3.11 of the Company's By-laws, which are on file with the Securities and
Exchange Commission and may be obtained from the Secretary of the Company upon
request.
VOTING PROCEDURES AND
COSTS OF PROXY SOLICITATION
Each matter properly submitted to the stockholders for a vote is
deemed approved if a majority of the shares of Common Stock of the Company
present in person or by proxy at a meeting at which a quorum is present votes
in favor of the matter. The presence in person or by proxy of stockholders
entitled to cast a majority of all the votes entitled to be cast at the meeting
constitutes a quorum.
Under the Company's Amended and Restated Bylaws and Maryland statutory
law governing corporations organized 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 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. Directors will be elected by a favorable
vote of a plurality of the voting shares of Common Stock present and entitled
to vote, in person or by proxy, at the Meeting. Accordingly, abstentions or
broker non-votes as to the election of directors will not affect the election
of the candidates receiving the most votes. All other proposals to come before
the Meeting require the approval of a majority of the shares of Common Stock
present and entitled to vote. Abstentions as to a particular proposal will
have the same effect as votes against such proposal. Broker non-votes,
however, will be treated as unvoted for purposes of determining approval of
such proposal and will not be counted as votes for or against such proposal.
The cost of preparing, assembling, and mailing the proxy materials
will be borne by the Company. The Company will also request persons, firms and
corporations holding shares in their names or in the names of their nominees,
which shares are beneficially owned by others, to send the proxy material to,
and obtain Proxies from, such beneficial owners and will reimburse such holders
for their reasonable expenses in doing so.
Your vote is important. Please complete the enclosed proxy card and
mail it in the enclosed postage-paid envelope as soon as possible.
By Order of the Board of Directors
Oliver T. Carr, Jr.
Chairman of the Board
May ___, 1996
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<PAGE> 26
THIS PROXY IS SOLICITED BY AND ON
BEHALF OF THE BOARD OF
DIRECTORS
P CARRAMERICA REALTY CORPORATION
R
O REVOCABLE PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
X JUNE 12, 1996
Y
The undersigned hereby appoints Thomas A. Carr, Brian K. Fields and
Andrea F. Bradley, or any of them, proxies, with full power of substitution,
to act for and to vote the shares of the Common Stock of CARRAMERICA REALTY
CORPORATION which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders of said Company to be held on
June 12, 1996, and at any and all adjournments thereof.
Receipt of the Company's Notice of Annual Meeting of Stockholders and
Proxy Statement is acknowledged.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE> 27
DETACH HERE
/x/ Please mark
votes as in
this example.
This proxy when properly executed will be voted as directed hereon, or
if no direction is indicated, will be voted FOR the election of the
Board of Directors' nominees for Directors, AGAINST proposal 2 and
AGAINST proposal 3.
1. ELECTION OF DIRECTORS:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C>
Nominees for term expiring 1997:
Anthony R. Manno, Jr., J. Marshall Peck
2. Declassification of the Board / / / / / /
Nominees for term expiring 1999: of Directors for purposes of
Andrew F. Brimmer, Oliver T. Carr, Jr., director elections.
George R. Puskar, William D. Sanders
/ / FOR / / WITHHELD 3. Separation of offices of / / / / / /
ALL FROM ALL Chairman and Chief Executive
NOMINEES NOMINEES Officer
In their discretion, the Proxies are authorized to
vote upon such other business as may properly
/ / ---------------------------------- come before the meeting
For all nominees except as noted above
MARK HERE
FOR ADDRESS / /
CHANGE AND
NOTE AT LEFT
(Please date and sign exactly as name appears on
this proxy. Joint owners should each sign. When
signing as attorney, executor, administrator,
trustee, guardian, etc. give full title as well)
</TABLE>
SIGNATURE: _________ DATE: ____ SIGNATURE: _________ DATE: ____
