<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
General Growth 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:
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<PAGE> 2
GENERAL GROWTH PROPERTIES, INC.
110 NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 9, 2000
To our Stockholders:
We are notifying you that the Annual Meeting of Stockholders of General
Growth Properties, Inc. will be held on Tuesday, May 9, 2000 at 10:00 a.m. local
time at our principal executive offices located at 110 North Wacker Drive,
Chicago, Illinois 60606 for the following purposes:
1. To elect two directors, each for a term of three years;
2. To ratify the appointment of PricewaterhouseCoopers LLP as our
independent accountants for fiscal 2000; and
3. To transact other business properly coming before the meeting.
Each of these matters is described in further detail in the enclosed proxy
statement. We have also enclosed a copy of our 1999 Annual Report. Only
stockholders of record at the close of business on March 22, 2000 are entitled
to vote at the meeting or any postponement or adjournment of the meeting. A
complete list of these stockholders will be available at our principal executive
offices prior to the meeting.
Please use this opportunity to take part in General Growth's affairs by
voting your shares. Whether or not you plan to attend the meeting, please
complete the enclosed proxy card and return it in the envelope provided as
promptly as possible. Your proxy can be withdrawn by you at any time before it
is voted.
By order of the Board of Directors,
Matthew Bucksbaum
Chairman of the Board
Chicago, Illinois
April 7, 2000
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
ABOUT THE MEETING........................................... 1
What is the purpose of the annual meeting?................ 1
What are General Growth's voting recommendations?......... 1
Who is entitled to vote?.................................. 1
What constitutes a quorum?................................ 1
How do I vote?............................................ 1
Can I vote by telephone or electronically?................ 2
Can I change my vote after I return my proxy card?........ 2
What vote is required to approve each item?............... 2
What happens if additional proposals are presented at the
meeting?............................................... 2
Who will bear the costs of soliciting votes for the
meeting?............................................... 2
PROPOSALS TO BE VOTED ON.................................... 2
Proposal No. 1 -- Election of Directors................... 2
Proposal No. 2 -- Ratification of Independent
Accountants............................................ 4
BOARD STRUCTURE AND COMPENSATION............................ 4
Board of Directors and Board Committees................... 4
Compensation of Directors................................. 4
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION............................................. 5
STOCK OWNERSHIP............................................. 5
Common Stock Ownership of Certain Beneficial Owners....... 5
Equity Ownership of Management............................ 6
Section 16(a) Beneficial Ownership Reporting Compliance... 8
EXECUTIVE OFFICERS.......................................... 8
EXECUTIVE COMPENSATION...................................... 9
Summary of Cash and Certain Other Compensation............ 9
Option Grants............................................. 10
Option Exercises and Year-End Values...................... 10
Long Term Incentive Plan Awards........................... 11
Standard Employee Benefits................................ 11
Report of the Compensation Committee on Executive
Compensation........................................... 11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 15
PERFORMANCE GRAPH........................................... 16
STOCKHOLDER PROPOSALS....................................... 17
</TABLE>
<PAGE> 4
GENERAL GROWTH PROPERTIES, INC.
110 NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
------------------------
PROXY STATEMENT
------------------------
The Board of Directors of General Growth Properties, Inc. ("General
Growth") is asking for your proxy for use at the annual meeting of stockholders
of General Growth to be held on Tuesday, May 9, 2000 at 10:00 a.m. local time at
our principal executive offices located at 110 North Wacker Drive, Chicago,
Illinois, and at any postponements or adjournments of the meeting. We are
initially mailing this proxy statement and the enclosed proxy to stockholders of
General Growth on or about April 7, 2000.
ABOUT THE MEETING
What is the purpose of the annual meeting?
At our annual meeting, stockholders will act upon the matters outlined in
the accompanying notice of meeting, including the election of directors and the
ratification of our independent auditors. In addition, our management will
report on General Growth's performance during fiscal 1999 and respond to
questions from stockholders.
What are General Growth's voting recommendations?
Our Board of Directors recommends that you vote your shares "FOR" each of
the nominees to the Board and "FOR" the ratification of our independent
auditors.
Who is entitled to vote?
Only stockholders of record at the close of business on the record date,
March 22, 2000, are entitled to receive notice of the annual meeting and to vote
the shares of common stock that they held on that date at the meeting, or any
postponement or adjournment of the meeting. Each outstanding share of common
stock entitles its holder to cast one vote on each matter to be voted on.
What constitutes a quorum?
If a majority of the shares outstanding on the record date are present at
the annual meeting, either in person or by proxy, we will have a quorum at the
meeting, permitting the conduct of business at the meeting. As of the record
date, we had approximately 51,927,576 shares of common stock outstanding and
entitled to vote. Any shares represented by proxies that are marked to abstain
from voting on a proposal will be counted as present for purposes of determining
whether we have a quorum. If a broker, bank, custodian, nominee or other record
holder of General Growth common stock indicates on a proxy that it does not have
discretionary authority to vote certain shares on a particular matter, the
shares held by that record holder (referred to as "broker non-votes") will also
be counted as present in determining whether we have a quorum.
How do I vote?
You may vote in person at the annual meeting or you may vote by proxy by
signing, dating and mailing the enclosed proxy card. If you vote by proxy, the
individuals named on the card as proxy holders will vote your shares in the
manner you indicate. If you sign and return the card without indicating your
instructions, your shares will be voted "FOR":
- the election of the two nominees for director, and
- the ratification of PricewaterhouseCoopers LLP as our independent
auditors for fiscal 2000.
1
<PAGE> 5
Can I vote by telephone or electronically?
Yes. If you are a registered stockholder (that is, if you hold your stock
in your own name), you may vote by telephone or electronically by following the
instructions included with your proxy card.
Can I change my vote after I return my proxy card?
Yes. Even after you have submitted your proxy, you may change your vote at
any time before the proxy is exercised at the annual meeting by delivering to
the Secretary of General Growth a written notice of revocation or a properly
signed proxy bearing a later date, or by attending the annual meeting and voting
in person (although attendance at the meeting will not cause your previously
granted proxy to be revoked unless you specifically so request).
What vote is required to approve each item?
Director nominees must receive the affirmative vote of a plurality of the
shares represented at the meeting, meaning that the two nominees for director
with the most votes will be elected. The ratification of PricewaterhouseCoopers
LLP as our independent auditors for fiscal 2000 requires the affirmative vote of
a majority of the shares of common stock represented at the meeting in person or
by proxy. Abstentions and broker non-votes will not be counted for purposes of
determining whether an item has received the requisite number of votes for
approval.
What happens if additional proposals are presented at the meeting?
Other than the matters described in this proxy statement, we do not expect
any additional matters to be presented for a vote at the annual meeting. If you
vote by proxy, your proxy grants the persons named as proxy holders the
discretion to vote your shares on any additional matters properly presented for
a vote at the meeting.
Who will bear the costs of soliciting votes for the meeting?
General Growth will bear the entire cost of the solicitation of proxies
from its stockholders, which is currently estimated to be less than $10,000. In
addition to the mailing of these proxy materials, the solicitation of proxies or
votes may be made in person, by telephone or by electronic communication by our
directors, officers and employees, who will not receive any additional
compensation for such solicitation activities. We may also hire a solicitor, for
an additional fee that is estimated not to exceed $10,000, to assist us in the
solicitation process. We will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses
for forwarding proxy and solicitation materials to our stockholders.
PROPOSALS TO BE VOTED ON
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
Our Board of Directors is currently comprised of seven members. Our By-Laws
divide the Board into three classes, as nearly equal in number as possible, with
each class of directors serving a three-year term. The term of office of the
classes of directors expires in rotation so that one class is elected at each
annual meeting for a full three-year term.
The Board of Directors has nominated and urges you to vote "FOR" the
election of the two nominees named below for terms of office ending in 2003.
Proxies will be so voted unless stockholders specify otherwise in their proxies.
In the event a nominee is not available to serve for any reason when the
election occurs, it is intended that the proxies will be voted for the election
of the other nominee and may be voted for any substitute nominee. The Board of
Directors has no reason to believe that either nominee will not be a candidate
or, if elected, will be unable or unwilling to serve as a director. In no event
will the proxies be voted for a greater number of persons then the number of
nominees named.
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<PAGE> 6
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION TO THE BOARD
OF EACH OF THE NOMINEES NAMED BELOW.
NOMINEES FOR ELECTION AT THIS MEETING FOR TERMS EXPIRING IN 2003:
Morris Mark, 59, has served as a director of General Growth since 1993. Mr.
Mark has served as the general partner of Mark Partners, an investment
partnership, since June 1985, President and director of Mark Asset Management
Corporation, an investment management company, since December 1996, and
President and director of Mark International Partners, Ltd., an investment
management company, since December 1989. Mr. Mark is a co-founder and past
President of the Real Estate Analysts Group and the Real Estate Investment Trust
Analysts Association. From 1975 to 1984, Mr. Mark specialized in the real estate
and building industries as a Vice President in the research department of
Goldman Sachs & Co. Mr. Mark serves as a member of the Advisory Board of the
Harvard Law School, from which he received a J.D. degree in 1964.
Robert Michaels, 56, has served as a director of General Growth since 1995.
Mr. Michaels has served as President and Chief Operating Officer of General
Growth since May 1995. In addition, Mr. Michaels has served as President, Chief
Executive Officer and a director of General Growth Management, Inc., a property
manager ("GGMI"), since April 1994. From January 1989 until March 1994, Mr.
Michaels held various other positions with GGMI.
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2001:
John Bucksbaum, 43, has served as a director of General Growth since 1992,
and has served as Chief Executive Officer of General Growth since July 1999.
From December 1992 through June 1999, Mr. Bucksbaum served as Executive Vice
President of General Growth. From 1984 to December 1992, he served as President
of General Growth of California, Inc. and Fallbrook Mall Corporation, a
predecessor to General Growth and previously one of the indirect owners of an
enclosed mall shopping center. Mr. Bucksbaum has served as Co-Chairman of the
Board of Directors and Executive Vice President of GGMI since December 1996. Mr.
Bucksbaum is a member of the Board of Governors of the National Association of
Real Estate Investment Trusts ("NAREIT"), the Executive Committee of the
National Realty Council, the Policy Advisory Board of the University of
California Real Estate Center and the Executive Committee of the Wharton School
Advisory Board. He also serves as a trustee of the Urban Land Institute. Mr.
Bucksbaum is the son of Matthew Bucksbaum.
Anthony Downs, 69, has served as a director of General Growth since 1992.
Since 1977, Mr. Downs has been a Senior Fellow at The Brookings Institution (a
private, non-profit policy research center) and a self-employed speaker and
writer. Mr. Downs served as an executive consultant to Salomon Brothers Inc.
from 1986 to 1994 and to Aetna Realty Investors from 1977 to 1994. Mr. Downs is
a trustee of The Urban Land Institute and The Urban Institute, and is a director
of the National Housing Partnerships Foundation, the NAACP Legal and Education
Defense Fund, Inc. and the Counselors of Real Estate. He is also a director of
Bedford Properties, Inc., Essex Property Trust, Inc., Massachusetts Mutual Life
Insurance Company and Penton Media, Inc.
A. Lorne Weil, 53, has served as a director of General Growth since 1994.
Mr. Weil has served as a director, Chairman and Chief Executive Officer of
Autotote Corporation, a worldwide provider of computerized wagering systems for
gaming operations, since 1989, 1991, and 1992, respectively. From 1979 to 1992,
Mr. Weil served as President of Lorne Weil, Inc., a private consulting firm. Mr.
Weil also serves as a director of Fruit of the Loom, Inc., a basic apparel
manufacturer.
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2002:
Beth Stewart, 43, has served as a director of General Growth since 1993.
Ms. Stewart has been a private real estate consultant since December 1992 and
served as Vice President of Goldman, Sachs & Co. from 1986 to November 1992.
3
<PAGE> 7
Matthew Bucksbaum, 74, has served as a director of General Growth since
1986 and as Chairman of General Growth since July 1995. Mr. Bucksbaum also
served as Chief Executive Officer of General Growth from July 1995 through June
1999, as President of General Growth from December 1992 through June 1995 and as
Secretary and Treasurer of General Growth from 1986 to December 1992. Mr.
Bucksbaum has served as President of General Growth Companies, Inc. since 1985.
He has also served as a director of GGMI since December 1992, acting in the
capacity of Chairman of the Board of Directors from 1986 to December 1992 and as
Co-Chairman of the Board of Directors since December 1996. Since December 1996,
Mr. Bucksbaum has also served as Chief Executive Officer of GGMI. See "Certain
Relationships and Related Transactions." Mr. Bucksbaum is an ex-officio trustee
of the International Council of Shopping Centers, and previously served as
chairman. Mr. Bucksbaum is also a member of the Urban Land Institute and NAREIT,
and is a trustee and chairman of the Aspen Music Festival and School. Mr.
Bucksbaum is the father of John Bucksbaum.
PROPOSAL NO. 2 -- RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP as General
Growth's independent accountants for fiscal 2000, subject to stockholder
ratification of such appointment. PricewaterhouseCoopers LLP served as General
Growth's independent accountants during fiscal 1999. Representatives of
PricewaterhouseCoopers LLP are expected to attend the annual meeting where they
will be available to respond to questions and, if they desire, to make a
statement.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS GENERAL GROWTH'S INDEPENDENT
ACCOUNTANTS FOR FISCAL 2000. In the event stockholders do not ratify the
appointment, the appointment will be reconsidered by the Board of Directors.
BOARD STRUCTURE AND COMPENSATION
BOARD OF DIRECTORS AND BOARD COMMITTEES
Our Board of Directors has standing Audit and Compensation Committees. The
Board has no Nominating Committee; rather, the Board as a whole performs the
functions which would otherwise be delegated to such a committee. During 1999,
the Board of Directors met nine times and took action by written consent twelve
times. With the exception of Mr. Weil, during 1999, all of the directors
attended at least 75% of all the meetings of the Board and those committees on
which he or she served.
The members of the Audit Committee are Messrs. Downs and Mark and Ms.
Stewart (Chair). The functions of the Audit Committee include recommending the
engagement of General Growth's independent auditors, reviewing the independence
of the independent auditors, reviewing with the independent auditors the plans
for and results of the audit engagement and reviewing the adequacy of General
Growth's internal accounting controls. None of the members of the Audit
Committee is an employee of General Growth. The Audit Committee met twice during
1999.
The members of the Compensation Committee are Messrs. Matthew Bucksbaum and
Downs and Ms. Stewart. The functions of the Compensation Committee include
determining the compensation for General Growth's Chief Executive Officer (with
Mr. Bucksbaum abstaining), approving the compensation for General Growth's other
executive officers and administering General Growth's 1993 Stock Incentive Plan
(the "1993 Plan"), Cash Value Added Incentive Compensation Plan (the "CVA
Plan"), and 1998 Incentive Stock Plan (the "1998 Incentive Plan") and all other
executive compensation plans which General Growth may adopt from time to time.
The Compensation Committee met twice during 1999.
COMPENSATION OF DIRECTORS
Directors who are General Growth employees receive no fees for their
services as directors. Outside directors receive an annual fee of $18,000, a
meeting fee of $1,000 for each Board or Committee meeting attended, and
reimbursement of expenses incurred in attending meetings.
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<PAGE> 8
Under the 1993 Plan, all outside directors are entitled to receive, upon
joining the Board of Directors, an initial grant of options to purchase 500
shares of common stock having an exercise price equal to the fair market value
of the common stock on the date of grant. In addition, under the 1993 Plan, each
outside director automatically receives on the first business day in January of
every year, an annual grant of options to purchase 500 shares of common stock
having an exercise price equal to the fair market value of the common stock on
the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Matthew Bucksbaum, the Chairman of General Growth, is the only member of
the Compensation Committee who is a present or former officer or employee of
General Growth or of GGP Limited Partnership, the partnership in which General
Growth owns an approximate 72% partnership interest and of which General Growth
is the sole general partner (the "Operating Partnership"). None of the members
of the Compensation Committee have any "interlocking" relationships as defined
by the Securities and Exchange Commission (the "SEC"), in that none of them
serve on the board of directors or compensation committee of any other company
where an executive officer of that company is on the Board or Compensation
Committee of General Growth.
STOCK OWNERSHIP
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following sets forth, as of March 15, 2000, certain information
concerning each stockholder who is known by General Growth to beneficially own
5% or more of the outstanding common stock. The table is based upon reports on
Schedules 13G filed by the stockholders with the SEC. Unless otherwise noted,
each stockholder has sole voting and investment power for all shares shown.
<TABLE>
<CAPTION>
NUMBER OF SHARES APPROXIMATE
NAME AND ADDRESS BENEFICIALLY OWNED PERCENT OF CLASS
---------------- ------------------ ----------------
<S> <C> <C>
General Trust Company, as trustee(1)........................ 14,760,300(2) 22.2%
4001 W. 41st Street, 04A
Empire Mall
Sioux Falls, South Dakota 57116
Capital Growth Management Limited Partnership............... 4,173,000(3) 8.0%
One International Place
Boston, Massachusetts 02110
Cohen & Steers Capital Management, Inc. .................... 3,572,300(3) 6.9%
757 Third Avenue
New York, New York 10017
Hexalon Real Estate, Inc. .................................. 3,098,400(4) 6.0%
950 East Paces Ferry Road
Suite 2275
Atlanta, Georgia 30326
</TABLE>
- -------------------------
(1) General Trust Company beneficially owns these shares as trustee of various
trusts which serve as general partners of a partnership that owns units of
limited partnership interest in the Operating Partnership. These units may
be converted, in certain circumstances, into shares of General Growth common
stock as described in "Certain Relationships and Related Transactions." The
beneficiaries of the trusts are members of the Bucksbaum family which, for
purposes hereof, include the descendants of Martin, Matthew and Maurice
Bucksbaum, including John Bucksbaum, Chief Executive Officer and a director
of General Growth.
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<PAGE> 9
(2) This amount includes 14,577,402 shares of common stock issuable upon
conversion of certain limited partnership units in the Operating
Partnership. See "Certain Relationships and Related Transactions."
(3) As stated in the relevant reports on Schedules 13G, numerous investment
counseling clients own the reported shares.
(4) This amount consists of 2,158,013 shares and 940,387 shares of common stock
held by two wholly-owned subsidiaries of Hexalon Real Estate, Inc.
EQUITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 15, 2000, certain information
regarding the beneficial ownership of General Growth's common stock by (a) each
of our directors and nominees for election as directors, (b) each of our
executive officers named in the Summary Compensation Table and (c) all directors
and executive officers as a group. Unless otherwise noted, each person named in
the table has sole voting and investment power for all shares shown.
For information regarding the beneficial ownership of General Growth's
depositary shares by each of the persons indicated above, we refer you to
footnotes (5) and (9) below.
<TABLE>
<CAPTION>
DIRECTORS AND NUMBER OF SHARES APPROXIMATE
EXECUTIVE OFFICERS BENEFICIALLY OWNED PERCENT OF CLASS
- ------------------ ------------------ ----------------
<S> <C> <C>
Matthew Bucksbaum........................................ 1,166,260(1)(2) 2.2%
John Bucksbaum........................................... 124,617(1)(3)(4)(5) *
Anthony Downs............................................ 7,396(4) *
Morris Mark.............................................. 11,500(4) *
Robert Michaels.......................................... 132,104(4)(6) *
Beth Stewart............................................. 5,000(4) *
A. Lorne Weil............................................ 5,500(4) *
Bernard Freibaum......................................... 711,335(4)(5)(6)(7) 1.4%
Jon Batesole............................................. 57,332(4)(6)(8) *
Joel Bayer............................................... 129,630(4)(6) *
All Directors and Executive Officers as a group (11
persons)............................................... 2,356,663(9) 4.5%
</TABLE>
- -------------------------
* Represents less than 1% of General Growth's outstanding common stock.
(1) This amount does not include shares of common stock beneficially owned by
General Trust Company, as to which Messrs. Matthew Bucksbaum and John
Bucksbaum disclaim beneficial ownership. See "Common Stock Ownership of
Certain Beneficial Owners," above.
(2) This amount includes 850,745 shares beneficially owned by Mr. Bucksbaum as
co-trustee of the Martin Bucksbaum Marital GST Trust and 200,614 shares held
by Mr. Bucksbaum in retirement accounts. However, this amount excludes 4,520
shares of common stock beneficially owned by Mr. Bucksbaum's spouse and
216,981 shares of common stock beneficially owned by the Matthew and Carolyn
Bucksbaum Family Foundation, as to which Mr. Bucksbaum disclaims beneficial
ownership.
(3) This amount does not include 1,313 shares of common stock beneficially owned
by Mr. Bucksbaum's spouse, as to which Mr. Bucksbaum disclaims beneficial
ownership.
(4) A portion of this amount includes shares of common stock subject to
immediately exercisable options granted pursuant to the 1993 Plan. These
amounts are as follows: Mr. John Bucksbaum, 100,000 shares; Mr. Downs, 4,000
shares; Mr. Mark, 1,500 shares; Mr. Michaels, 110,000 shares; Ms. Stewart,
2,000 shares; Mr. Weil, 3,500 shares; Mr. Freibaum, 60,000 shares; Mr.
Batesole, 40,000 shares; and Mr. Bayer, 66,000 shares.
(5) Mr. John Bucksbaum and Mr. Freibaum own 2,550 and 1,000 depositary shares,
respectively. Each depositary share represents 1/40 of a share of 7.25%
Preferred Income Equity Redeemable Stock, Series A ("PIERS") and is
immediately convertible at the option of the holder into shares of common
stock at a conversion rate of 0.6297 shares of common stock for each
depositary share. Accordingly, the
6
<PAGE> 10
shares owned by Mr. Bucksbaum and Mr. Freibaum include, respectively, 1,606
and 630 shares of common stock issuable upon conversion of their depositary
shares.
(6) Does not include shares of common stock subject to currently unexercisable
options granted under the 1998 Incentive Plan. For information related to
awards made under the 1998 Incentive Plan during 1999, see "Executive
Compensation -- Long Term Incentive Plan Awards."
(7) This amount does not include an aggregate of 8,000 shares of common stock
beneficially owned by Mr. Freibaum's spouse and his children or an aggregate
of 5,038 shares of common stock issuable upon conversion of the depositary
shares beneficially owned by Mr. Freibaum's spouse and his children, as to
which Mr. Freibaum disclaims beneficial ownership.
(8) This amount does not include 2,252 shares of Common Stock beneficially owned
by Mr. Batesole's spouse, as to which Mr. Batesole disclaims beneficial
ownership.
(9) This amount is comprised of an aggregate of 1,948,428 shares of common
stock, an aggregate of 406,000 shares of common stock subject to immediately
exercisable options granted pursuant to the 1993 Plan, and an aggregate of
2,235 shares of common stock issuable upon conversion of an aggregate of
3,550 depositary shares, each representing 1/40 of a share of PIERS, which
are immediately convertible at the option of the holder. This amount does
not include options to acquire an aggregate of 197,000 shares of common
stock granted pursuant to the 1993 Plan which are not exercisable within 60
days after the date of this table or options to acquire an aggregate of
98,636 shares of common stock granted pursuant to the 1998 Incentive Plan
which will not be exercisable within 60 days after the date of this table
unless shares of the common stock maintain a certain threshold price for 20
consecutive trading days. See "Report of the Compensation Committee on
Executive Compensation" for a description of the 1998 Incentive Plan.
7
<PAGE> 11
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and holders of more than 10% of our common stock
to file with the SEC reports regarding their ownership and changes in ownership
of our common stock. Based solely on our review of the reports furnished to us,
we believe that all of our directors, executive officers and 10% stockholders
complied with all Section 16(a) filing requirements.
EXECUTIVE OFFICERS
The executive officers of General Growth are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Matthew Bucksbaum...................... 74 Chairman of the Board
John Bucksbaum......................... 43 Chief Executive Officer
Robert Michaels........................ 56 President and Chief Operating Officer
Bernard Freibaum....................... 47 Executive Vice President and Chief Financial Officer
Ronald L. Gern......................... 41 Senior Vice President and Assistant Secretary
Jon Batesole........................... 60 Senior Vice President
Joel Bayer............................. 36 Senior Vice President -- Acquisitions
</TABLE>
We refer you to "Proposal No. 1 -- Election of Directors" above for
biographical information concerning Messrs. Matthew Bucksbaum, John Bucksbaum
and Robert Michaels. Biographical information concerning our other executive
officers is set forth below.
Bernard Freibaum, 47, has served as Executive Vice President and Chief
Financial Officer of General Growth since October 1993. From August 1992 and
prior to joining General Growth, Mr. Freibaum was a consultant with Ernst &
Young. From 1985 through 1992, Mr. Freibaum was Chief Financial Officer and
General Counsel of Stein & Company, a real estate development and service
company. From 1973 through 1985, Mr. Freibaum held various positions with Ernst
& Young, American Invsco Corp., and Coopers & Lybrand L.L.P.
Ronald L. Gern, 41, has served as Senior Vice President and Assistant
Secretary of General Growth since December 1997. From 1985 to November 1997, Mr.
Gern was employed by Kravco Company, a shopping center management and
development company. From 1990 to November 1997, he held the position of Vice
President and General Counsel to Kravco, and from 1985 to 1990, he held the
position of Counsel to Kravco. From 1982 to 1985, Mr. Gern was associated with
the law firm of Wolf, Block, Schorr & Solis-Cohen.
Jon Batesole, 60, has served as Senior Vice President of General Growth
since December 1992. From 1985 to December 1992, Mr. Batesole served as
President of General Growth Development Corp.
Joel Bayer, 36, has served as Senior Vice President-Acquisitions of General
Growth since March, 1998 and as Vice President of General Growth since September
1993. From July 1988 through August 1993, Mr. Bayer held various positions with
Equity Financial and Management Company.
8
<PAGE> 12
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table discloses compensation received by our Chairman of the
Board, our Chief Executive Officer and our four other most highly compensated
executive officers (together, the "Named Officers") in the three most recent
years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------
AWARDS PAYOUTS
----------- -----------
ANNUAL COMPENSATION SECURITIES
------------------------------- UNDERLYING LTIP
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) PAYOUTS ($)
--------------------------- ---- ---------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Matthew Bucksbaum..................... 1999 $200,000 -- -- --
Chairman of the Board 1998 $200,000 -- -- --
1997 $175,000 -- -- --
John Bucksbaum........................ 1999 $225,000 -- 40,000 --
Chief Executive Officer 1998 $225,000 $150,000 -- --
1997 $200,000 -- -- --
Robert Michaels....................... 1999 $450,000 $361,363(1) 30,246 $34,058(2)
President and Chief 1998 $450,000 $315,256(1) 50,000 --
Operating Officer 1997 $425,000 $200,000 -- --
Bernard Freibaum...................... 1999 $450,000 $361,363(1) 30,246 $34,058(2)
Executive Vice President 1998 $450,000 $315,256(1) 100,000 --
and Chief Financial Officer 1997 $400,000 $200,000 200,000 --
Jon Batesole.......................... 1999 $350,000 $281,061(1) 18,666 $13,244(2)
Senior Vice President 1998 $350,000 $210,000(1) -- --
1997 $325,000 $100,000 -- --
Joel Bayer............................ 1999 $300,000 $240,908(1) 12,757 $ 5,203(2)
Senior Vice President -- 1998 $275,000 $151,289(1) 15,000 --
Acquisitions 1997 $250,000 $125,000 -- --
</TABLE>
- -------------------------
(1) These bonuses represent amounts earned under the CVA Plan for the year shown
and paid during the following year. For each of Messrs. Michaels, Freibaum,
Batesole and Bayer, respectively, additional amounts of (i) $160,225,
$160,225, $124,619 and $106,817 have been credited to a "bonus bank" for
1999 but have not been paid, and (ii) $68,115, $68,115, $26,487 and $10,407
were credited to a "bonus bank" for 1998, half of which was paid during 1999
(see footnote (2) below). The amounts credited to the "bonus bank" will
either be paid to such persons in subsequent years or forfeited, depending,
primarily, on the extent to which future annual financial performance goals
under the CVA Plan are achieved. See "Report of the Compensation Committee
on Executive Compensation" for a description of the CVA Plan.
(2) The long term incentive plan ("LTIP") payout reported for each of Messrs.
Michaels, Freibaum, Batesole and Bayer represents the payment to such
individual during 1999 of half of the amount previously credited to his
"bonus bank" for 1998. See footnote (1) above.
9
<PAGE> 13
OPTION GRANTS
The following table provides information on grants of options to the Named
Officers during 1999.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR PER SHARE DATE VALUE
---- ---------- ------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Matthew Bucksbaum....................... -- -- -- -- --
Robert Michaels(1)...................... -- -- -- -- --
John Bucksbaum.......................... 40,000 84.2% $32.19 3/25/09 $112,800(2)
Bernard Freibaum(1)..................... -- -- -- -- --
Jon Batesole(1)......................... -- -- -- -- --
Joel Bayer(1)........................... -- -- -- -- --
</TABLE>
- -------------------------
(1) Does not include currently unexercisable options granted under the 1998
Incentive Plan during 1999. For information related to awards made under the
1998 Incentive Plan during 1999, see "-- Long Term Incentive Plan Awards,"
below.
(2) This amount was estimated using the Black-Scholes Option Pricing Formula on
the basis of the following assumptions: expected volatility: 20.02%; risk
free rate of return: 5.21%; dividend yield: 7.22%; and expected time until
exercise: 4.6 years.
OPTION EXERCISES AND YEAR-END VALUES
The following table provides information on option exercises during 1999 by
each of the Named Officers and the values of each of such officer's unexercised
options at December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AT YEAR-END VALUE OF UNEXERCISED
NO. OF ---------------------------- IN-THE-MONEY OPTIONS
SHARES AT YEAR-END
ACQUIRED VALUE ----------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Matthew Bucksbaum.............. -- -- -- -- -- --
Robert Michaels................ 0 -- 100,000 50,000 -- --
John Bucksbaum................. 0 -- 100,000 15,000 -- --
Bernard Freibaum............... 40,000 $645,000 240,000 100,000 $360,000 --
Jon Batesole................... 0 -- 40,000 10,000 -- --
Joel Bayer..................... 20,000 $221,250 76,000 24,000 $ 90,000 --
</TABLE>
On December 31, 1999, the fair market value per share of common stock was
$28.00.
10
<PAGE> 14
LONG TERM INCENTIVE PLAN AWARDS
The following table provides information on awards under the 1998 Incentive
Plan to the Named Officers during 1999.
LONG TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NO. OF
SECURITIES PERFORMANCE OR
UNDERLYING OTHER PERIOD
OPTIONS UNTIL MATURATION
NAME GRANTED(1) OR PAYOUT(2)
---- ---------- ----------------
<S> <C> <C>
Matthew Bucksbaum........................................... 0 --
Robert Michaels............................................. 30,246 --
John Bucksbaum.............................................. 0 --
Bernard Freibaum............................................ 30,246 --
Jon Batesole................................................ 18,666 --
Joel Bayer.................................................. 12,757 --
</TABLE>
- -------------------------
(1) Awards granted during 1999 under the 1998 Incentive Plan are in the form of
threshold-vesting stock options ("TSOs"), which, when vested, are
exercisable for shares of common stock. The exercise price of each of the
TSOs shown in this column is $31.69 per share, the fair market value of one
share of common stock on the date of grant.
(2) The TSOs will vest, and therefore will become exercisable, if shares of
common stock achieve and sustain a threshold market price of $44.44 per
share for at least 20 consecutive trading days at any time over the five
years following the date of grant (i.e., on or before March 19, 2004). If
the TSOs do not vest by March 19, 2004, they will be forfeited. If, however,
the TSOs vest by this date, they will be exercisable until March 19, 2009,
at which time they will expire. As of March 15, 2000, none of the TSOs had
vested.
STANDARD EMPLOYEE BENEFITS
During 1999, General Growth contributed toward the cost of health, life and
disability insurance for employees with dependents, as part of a standard
employee benefit package. General Growth also provided employees the opportunity
to contribute pre-tax salary (subject to applicable limitations) to a company-
sponsored 401(k) plan. Messrs. Matthew Bucksbaum, John Bucksbaum, Michaels,
Freibaum, Batesole and Bayer chose to contribute a portion of their respective
salaries to the 401(k) plan during 1999, and General Growth made a matching
contribution of $8,000 on behalf of each of them.
The following Report of the Compensation Committee on Executive
Compensation and the performance graph included elsewhere in this proxy
statement do not constitute soliciting material and should not be deemed filed
or incorporated by reference into any other General Growth filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent General Growth specifically incorporates this Report or the performance
graph by reference therein.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
GENERAL. General Growth's executive compensation program is administered by
the Compensation Committee of the Board of Directors. The Compensation Committee
currently consists of Matthew Bucksbaum, Anthony Downs and Beth Stewart. The
Compensation Committee is responsible for determining the level of compensation
paid to our Chief Executive Officer (with Matthew Bucksbaum abstaining),
approving the level of compensation paid to our other executive officers and
determining awards under, and administering, the 1993 Plan, the CVA Plan and the
1998 Incentive Plan. The Compensation Committee is also responsible for
reviewing and establishing all other executive compensation plans which General
Growth may adopt from time to time.
11
<PAGE> 15
EXECUTIVE COMPENSATION POLICY. General Growth's compensation policy for
executive officers consists of three key elements:
- a base salary,
- a performance-based annual bonus comprised of both cash and stock
options, and
- periodic grants of stock options.
The Compensation Committee believes that this three-part approach best
serves the interests of General Growth and its stockholders. It enables General
Growth to recruit and retain highly-qualified individuals by providing them with
a compensation package which is competitive and has financial incentives which
are aligned with General Growth's performance. Under this approach, compensation
for these officers involves a portion of pay that is "at risk" -- namely, the
annual cash and stock option bonus. The annual bonus is variable and is based on
a measure of company performance known as "cash value added," as described
below. Annual stock option awards relate a significant portion of an employee's
long-term remuneration directly to stock price appreciation realized by all of
General Growth's stockholders.
BASE SALARY. In establishing the base salary paid to each of our executive
officers for fiscal 1999, the Compensation Committee reviewed the compensation
paid by comparable REITs to their executive officers and determined it to be in
the best interests of General Growth and its stockholders for our executive
officers to be in the lower-to-mid portion of the range. The Compensation
Committee also took into account such factors as a subjective assessment of the
nature of the position, the contribution and experience of the executive
officer, and the length of the executive officer's service to General Growth.
ANNUAL BONUS. Since its adoption in 1998, bonus awards for General Growth's
executive officers have generally been determined in accordance with the CVA
Plan. The purpose of the CVA Plan is to provide additional incentive
compensation to participants by relating the financial reward of such
participants to the increase in the value of General Growth realized by its
stockholders. To date, various members of management of General Growth and GGMI
(excluding Matthew Bucksbaum and John Bucksbaum) have been designated by the
Compensation Committee as participants under the CVA Plan.
In general, "cash value added" or "CVA" is determined to be the excess of
net operating income less a capital charge that is intended to represent the
return expected by the providers of General Growth's capital. The Compensation
Committee believes that increases in CVA represent a performance standard that
is closely coordinated with increases in stockholder value.
The CVA Plan is intended to provide a target incentive award generally
ranging from between 10% and 50% of salary for participants. Under the CVA Plan,
the annual bonus award for a participant for a particular year is generally
equal to base salary x target incentive award x performance factor (although the
Compensation Committee may retain discretion to determine whether a participant
receives all or a portion of such award). The performance factor is determined
by reference to the amount of improvement or deterioration in CVA measured
against established targets based, in part, on prior performance. The
performance factor calculation will produce an amount in excess of the target
incentive award if actual CVA exceeds targeted CVA and will produce an amount
which is less than the target incentive award if actual CVA is less than
targeted CVA.
The CVA Plan provides the opportunity for enhanced bonuses, but also uses a
"bonus bank" feature to ensure that increases in CVA are sustained before
extraordinary bonus awards are paid out. Each year, two-thirds of any annual
bonus award in excess of 125% of the target incentive award is added to the
outstanding bonus bank balance. The bonus paid to a participant is equal to the
annual bonus award for the year, up to a maximum of 125% of the target incentive
award, plus one-third of the annual bonus award in excess of 125% of the target
incentive award. In addition, amounts added to the bonus bank in any year are
paid in equal installments over the following two years, unless that amount is
forfeited under the "at risk" rules of the CVA Plan. A bonus bank balance is
considered "at risk" in the sense that in any year the annual bonus award is
negative, the negative annual bonus award amount will be subtracted from the
outstanding bonus bank balance.
12
<PAGE> 16
Our 1998 Incentive Plan has been integrated with the CVA Plan. Under the
1998 Incentive Plan, the Compensation Committee is authorized to grant to
employees of General Growth and GGMI (other than Matthew Bucksbaum and John
Bucksbaum) stock incentive awards in the form of threshold-vesting stock options
("TSOs"). In any particular year, the number of TSOs to be granted to a
participant under the 1998 Incentive Plan will be determined, generally, by
multiplying the annual bonus award to a participant under the CVA Plan by a
percentage amount selected by the Compensation Committee (such product is the
"percentage bonus amount") and then dividing the percentage bonus amount by 10%
of the fair market value of a share of common stock on the date of grant. The
exercise price of the TSOs to be granted to a participant will be the fair
market value on the date the TSO is granted. The threshold price which must be
achieved in order for the TSO to vest will be determined by multiplying the fair
market value on the date of grant by the estimated annual growth rate (currently
set at 7% pursuant to the 1998 Incentive Plan) and compounding the product over
a five year period. Shares of General Growth's common stock must achieve and
sustain the threshold price for at least 20 consecutive trading days at any time
over the five years following the date of grant in order for the TSO to vest.
All TSOs granted will have a term of 10 years but must vest within 5 years of
the grant date in order to avoid forfeiture.
Compensation under the 1998 Incentive Plan is intended to reinforce the
attainment of annual performance goals while encouraging sustained profitable
long-term growth. We believe that the 1998 Incentive Plan accomplishes this by
providing a portion of annual compensation in options to purchase common stock,
the vesting of which is tied directly to a sustained increase in our economic
value to our stockholders. By doing so, the 1998 Incentive Plan aligns the
interests of our management employees with those of our stockholders.
OTHER STOCK OPTIONS AWARDS. Stock options have historically been an
important element of our compensation program and have generally been awarded to
our executive officers either as an inducement to join General Growth or as
additional compensation in recognition of exceptional performance. Particular
awards have generally been made without specific reference to any aspect of
General Growth's performance at such time. Rather, the Chief Executive Officer
and President have historically recommended to the Compensation Committee the
size of a particular award under the 1993 Plan based upon their subjective
assessments of factors such as job responsibilities undertaken and efforts
expended on behalf of General Growth, contributions to General Growth and
leadership qualities. Options granted to executive officers pursuant to the 1993
Plan have an exercise price equal to the fair market value of the common stock
on the date of grant, are for 10-year terms and are generally exercisable in
either 33 1/3% or 20% annual increments from the date of grant.
13
<PAGE> 17
COMPENSATION OF MATTHEW AND JOHN BUCKSBAUM. In establishing the
compensation to be paid to each of Matthew Bucksbaum and John Bucksbaum, the
Compensation Committee (with Matthew Bucksbaum abstaining), noted that their
salaries were originally established at subjective levels prior to General
Growth's initial public offering in 1993 and had only been moderately adjusted
since such time. The Committee also recognized the unique position occupied by
each of Matthew Bucksbaum and John Bucksbaum by virtue of the Bucksbaums'
ownership of a 21.8% limited partnership interest in the Operating Partnership
(subject to dilution in certain circumstances) and their rights to increase
their ownership in General Growth, primarily as trust beneficiaries, to 25% of
the outstanding common stock by converting a portion of the units representing
such limited partnership interest into shares of common stock. See "Stock
Ownership -- Common Stock Ownership of Certain Beneficial Owners," "Stock
Ownership -- Common Stock Ownership of Management," and "Certain Relationships
and Related Transactions." Accordingly, the compensation paid to Matthew
Bucksbaum and John Bucksbaum during 1999 was not based upon, and had no specific
relation to, General Growth's performance during such period.
INTERNAL REVENUE CODE SECTION 162(M). As one of the factors in its review
of compensation matters, the Compensation Committee considers the anticipated
tax treatment to General Growth and to our executives of various payments and
benefits. The deductibility of some types of compensation payments depends upon
the timing of an executive's vesting or exercise of previously granted rights.
Furthermore, interpretations of and changes in the tax laws and other factors
beyond the Compensation Committee's control also affect the deductibility of
compensation. For these and other reasons, the Committee will not necessarily
limit executive compensation to that deductible under Section 162(m) of the
Internal Revenue Code. The Compensation Committee will consider various
alternatives to preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent with
its other compensation objectives.
Respectfully submitted by the
Compensation Committee,
Matthew Bucksbaum
Anthony Downs
Beth Stewart
14
<PAGE> 18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
General Growth is the general partner of the Operating Partnership and
currently the owner of an approximate 72% interest in the Operating Partnership.
The Bucksbaums currently own a 21.8% limited partnership interest in the
Operating Partnership (subject to dilution in certain circumstances) and certain
rights to increase their ownership in General Growth, primarily as trust
beneficiaries, by converting a portion of the units representing their interests
in the Operating Partnership into shares of General Growth common stock until
they own up to 25% of the outstanding common stock and, subject to certain
limitations, by selling their remaining interests in the Operating Partnership
to General Growth for cash or common stock, or a combination thereof, at General
Growth's election. The Operating Partnership currently holds all of the non-
voting preferred stock of GGMI, and certain executive officers and/or directors
of GGMI own 100% of the common stock which is entitled to all voting rights in
GGMI.
General Growth has contracted with GGMI to provide management, leasing,
development and construction management services to the various enclosed mall
shopping centers which are owned by General Growth. In addition, certain
advertising and payroll costs of the shopping centers are paid by GGMI and
reimbursed by General Growth. During 1999, General Growth paid GGMI
approximately $21.2 million for management and leasing fees, $56.5 million for
cost reimbursements and $3.5 million for development fees.
Since 1998, certain of our executive officers have issued notes to General
Growth in connection with their exercise of options to purchase shares of common
stock. Specifically, during 1998, 1999 and the first quarter of 2000, Mr.
Freibaum issued three separate notes in the aggregate principal amount of
$9,261,000, of which $1,266,000 represents withholding taxes paid by General
Growth on behalf of Mr. Freibaum, relating to his exercise of options to
purchase an aggregate of 385,000 shares of common stock. In addition, during
1998 and 1999, Mr. Bayer issued two separate notes in the aggregate principal
amount of $801,148, of which $136,147 represents withholding taxes paid by
General Growth on behalf of Mr. Bayer, relating to his exercise of options to
purchase an aggregate of 35,000 shares of common stock. These notes bear
interest at a rate computed as a formula of a market rate (6.02% per annum at
December 31, 1999) adjusted monthly, are collateralized by the shares of common
stock issued upon the exercise of such options, provide for quarterly payments
of interest and are payable to General Growth on demand. As of January 31, 2000,
(i) the outstanding balance on Mr. Freibaum's notes was $9,304,429, including
$43,429 of accrued interest, and (ii) the outstanding balance on Mr. Bayer's
notes was $812,796, including $11,649 of accrued interest.
During 1998, Mark London, then a Senior Vice President of General Growth,
issued a note to General Growth in the principal amount of $123,780 in
connection with his exercise of an option to purchase 6,000 shares of common
stock. In connection with Mr. London's resignation as an executive officer of
General Growth in May 1999 and pursuant to the terms of a separation agreement,
Mr. London repaid approximately $66,000 in principal and accrued interest on the
note and the Company forgave the remaining balance of approximately $64,000 in
principal and accrued interest on the note.
On February 1, 2000, General Growth Companies, Inc., a Delaware corporation
whose sole stockholder and director is Matthew Bucksbaum, transferred a parcel
of land adjacent to the Bowling Green Mall in Bowling Green, Kentucky to the
Operating Partnership. The purchase price for the parcel of land was $215,000,
payable by delivery of 7,563 units of limited partnership interest in the
Operating Partnership, based upon $28.43, the average closing price per share of
General Growth's common stock for the twenty trading days preceding the closing
date. The purchase price was equal to the appraised value of the land as
determined by an independent third party.
General Growth Companies, Inc. owns a 25% undivided interest in two
airplanes which were used by certain of General Growth's executive officers
during 1999 for business travel. Aircraft expenses incurred and paid or payable
by General Growth to General Growth Companies, Inc. in connection with such
business travel during 1999 were approximately $315,000.
Because of the Internal Revenue Code's ownership requirements for REITs,
certain executive officers of General Growth, certain trusts for the benefit of
the Bucksbaums and certain employees of GGMI purchase, or in the case of
employees, receive as additional compensation, from time to time, a preferred
stock ownership interest in one or more private REITs in which General Growth
and/or the Operating Partnership has a controlling interest. While the aggregate
value of all such preferred stock ownership interests may exceed $60,000 at any
time, no individual's ownership interest in such preferred stock exceeds $60,000
at any time.
15
<PAGE> 19
PERFORMANCE GRAPH
The graph below compares the five-year cumulative total stockholder return
assuming the investment of $100 on January 1, 1995 (and the reinvestment of
dividends thereafter) in each of General Growth's common stock, the S&P 500
Stock Index, the NAREIT All Equity REIT Total Return Index and a peer index of
enclosed mall REITs (currently comprised of General Growth, CBL & Associates
Properties, Inc., Crown American Realty Trust, JP Realty, Inc., The Macerich
Company, Taubman Centers, Inc., Urban Shopping Centers, Inc., Simon Property
Group, Inc., Glimcher Realty Trust, The Mills Corporation, The Rouse Company and
Westfield America, Inc.). The comparisons in the graph below are not intended to
forecast the possible future performance of our common stock.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
PERIOD ENDING
- ---------------------------------------------------------------------------------------------------------------------
INDEX 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
General Growth Properties, Inc. 100.00 101.35 168.39 198.76 216.56 169.45
- ---------------------------------------------------------------------------------------------------------------------
S&P 500 100.00 137.58 169.03 225.44 289.79 350.78
- ---------------------------------------------------------------------------------------------------------------------
NAREIT All Equity REIT Index 100.00 115.27 155.92 187.51 154.69 147.54
- ---------------------------------------------------------------------------------------------------------------------
General Growth Properties Peer Index 100.00 103.98 150.33 169.09 164.31 139.89
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 20
STOCKHOLDER PROPOSALS
Notice of any stockholder proposal that is intended to be included in
General Growth's proxy statement and form of proxy for next year's annual
meeting must be received by General Growth at our principal executive offices no
later than December 15, 2000. Such notice must be in writing and must comply
with the other provisions of Rule 14a-8 under the Securities Exchange Act of
1934. In addition, the persons named in the proxy for the next annual meeting
will have discretionary authority to vote with respect to any matter that is
brought by any stockholder during the meeting and that is not described in the
proxy statement for such meeting if General Growth receives notice before
February 7, 2001 or after March 10, 2001 that such matter would be raised at the
meeting. Any notices regarding shareholder proposals must be received by the
Company at its principal executive offices at 110 North Wacker Drive, Chicago,
Illinois, 60606, Attention: Secretary.
17
<PAGE> 21
GENERAL GROWTH PROPERTIES, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Matthew Bucksbaum, Beth Stewart and Marshall E. Eisenberg, and each of
them, are hereby constituted and appointed the lawful attorneys and proxies of
the undersigned, with full power of substitution, to vote and act as proxy with
respect to all shares of common stock, $.10 par value, of GENERAL GROWTH
PROPERTIES, INC., standing in the name of the undersigned on the Company's books
at the close of business on March 22, 2000, at the Annual Meeting of
Stockholders to be held at the Company's principal executive offices, 110 North
Wacker Drive, Chicago, Illinois, at 10:00 a.m., local time, on May 9, 2000, or
at any postponement(s) or adjournment(s) thereof, as follows:
The powers hereby granted may be exercised by any of said attorneys or
proxies or their substitutes present and acting at the above-described Annual
Meeting of Stockholders or any postponement(s) or adjournment(s) thereof, or,
if only one be present and acting, then by that one. The undersigned hereby
revokes any all proxies heretofore given by the undersigned to vote at said
meeting.
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE. THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
<PAGE> 22
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2. Please mark [x]
your vote as
indicated in
this example
<TABLE>
<CAPTION>
<S> <C> <C>
1. Election of directors: WITHHOLD Nominees: 01 Morris Mark, 02 Robert Michaels
FOR all nominees AUTHORITY
listed to the right to vote for all nominees
(except as marked listed to the right (Instruction: To withhold authority to vote for any individual nominee, write
to the contrary) that nominee's name on the space provided below.)
[ ]
-----------------------------------------------------------------------------
3. In their discretion, the proxies are authorized to vote upon such other
2. Ratification of the appointment of accountants business as may properly come before the meeting or any postponement(s) or
for fiscal 2000. adjournment(s) thereof.
FOR AGAINST ABSTAIN Mark here if you plan to attend the [ ]
[ ] [ ] [ ] meeting
"By checking the box to the right, I consent to future [ ]
delivery of the Annual Report, Proxy Statements,
prospectuses and other communications in connection
with future shareholders meetings electronically via
the Company's Web site. I understand that the Company
may no longer distribute printed materials to me for
any future shareholders meetings until such consent is
revoked. I understand that I may revoke any consent at
any time by contacting the Company's transfer agent,
ChaseMellon Shareholder Services, Ridgefield Park, NJ
and that costs normally associated with electronic
access, such as usage and telephone charges, will be
my responsibility."
SIGNATURE SIGNATURE DATE
-------------------------------------- --------------------------------------- -----------------------
(Please sign this proxy as your name appears on the Company's corporate records. Joint owners should each sign personally.
Trustees and others signing in a representative capacity should indicate the capacity in which they sign.)
</TABLE>
