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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO FORM 10-K
AMENDMENT TO ANNUAL REPORT FILED PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission file number 1-12002
MARK CENTERS TRUST
(Exact name of registrant as specified in its charter)
Maryland 23-2715194
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation)
600 Third Avenue
Kingston, PA 18704
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (717) 288-4581
Securities registered pursuant to section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- --------------------------- -----------------------
Common Shares of Beneficial New York Stock Exchange
Interest, $.001 par value
Securities registered pursuant to section 12(g) of the Act: None
For purposes of this amendment, "Company" shall mean Mark Centers Trust.
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Part III, Items 10, 11, 12 and 13 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1997 are amended and restated in their entirety
by the following:
PART III
Item 10. Directors and Executive Officers of the Company
The following is a brief description of the trustees of the Company as well
as other executive officers of the Company.
Marvin L. Slomowitz, age 68, has been Chairman of the Board of Trustees and
Chief Executive Officer since the Company's inception in March 1993. He served
as President of the Company from its inception until February 1994. Mr.
Slomowitz founded Mark Development Group, the Company's predecessor ("MDG"), in
1960 and had been Chairman of the Board and Chief Executive Officer of MDG since
its inception. Mr. Slomowitz is a director of Charming Shoppes, Inc., a publicly
held national retail clothing chain, and serves as a member of the national
board of directors of the SLE (Lupus) Foundation. Mr. Slomowitz is a member of
the International Council of Shopping Centers ("ICSC") and the National Real
Estate Board. See "Certain Relationships and Related Transactions."
Harvey Shanus, age 67, has been a trustee of the Company since its
inception in March 1993 and, until February 1994, served as Executive Vice
President. Since February 1994, Mr. Shanus has been a private investor.
Previously, he served as Executive Vice President of MDG since 1978. From 1972
to 1978 he was a Vice President and Director of Construction of MDG. Mr. Shanus
is a member of the ICSC. See "Certain Relationships and Related Transactions."
Joseph L. Castle, II, age 65, has been a trustee of the Company since its
inception. Since 1981, Mr. Castle has been Chairman and Chief Executive Officer
and a director of Castle Energy Corporation, a public company engaged in oil and
gas exploration, and production. Mr. Castle also is a director of Comcast
Corporation and Charming Shoppes, Inc.
Marvin J. Levine, Esq., age 48, has been a trustee of the Company since its
inception. Mr. Levine is currently a partner in the New York City law firm of
Wachtel & Masyr, LLP. Previously, he has been a partner in the New York City law
firms of Gold & Wachtel, LLP for three years and prior to that Stadtmauer,
Bailkin, Levine & Masyr for more than five years. Mr. Levine represented MDG
from 1982 until the Company's initial public offering. See "Certain
Relationships and Related Transactions."
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Lawrence J. Longua, age 56, has been a trustee of the Company since its
inception. Mr. Longua is currently Senior Managing Director of the Witkoff
Group, LLC , an owner and operator of major office properties in New York City,
Philadelphia, Newark and Dallas. From 1990 to February 1998, Mr. Longua had been
a Senior Vice President and Assistant General Manager of Mitsubishi Trust &
Banking Corporation where he had been manager of the Real Estate Finance Group
at the Bank's New York Branch, and responsible for the management of a
substantial portfolio of real estate properties. From 1984 to 1990, Mr. Longua
was a Vice President and Manager of Bankers Trust Company, responsible for
overseeing a $3 billion real estate loan portfolio. Mr. Longua currently is the
Chairman of the Board of Trustees of the Mortgage Bankers Association of New
York Scholarship Foundation. Mr. Longua is the former president of the Mortgage
Bankers Association of New York and is the former Director of the Association of
Foreign Investors in U.S. Real Estate.
John Vincent ("Vin") Weber, age 45, has been a trustee of the Company since
its inception. Since December 1994, Mr Weber has been a partner of Clark &
Weinstock, a consulting firm. From 1980 through 1992, Mr. Weber was a United
States Congressman, representing Minnesota's Second Congressional District.
During his tenure in Congress, Mr. Weber was appointed to various committees and
subcommittees and held various leadership positions within the Republican Party.
Mr. Weber is currently Co-director of Empower America, a conservative public
policy advocacy group of which he was President until January 1994. Mr. Weber
also is a director of Dept. 56, Inc., Twin Cities Federal Bank and ITT
Educational Systems, Inc.
David S. Zook, age 50, has been Executive Vice President and Chief
Operating Officer of the Company since December 1994. Previously, he had been
Senior Vice President and Director of Leasing of the Trust since its inception,
positions he previously held with MDG since 1984. Prior to joining MDG, Mr. Zook
held various executive positions at Oxford Development Company, where he was
General Manager from 1977-1984. From 1971 to 1977, Mr. Zook was employed at
Eagan Real Estate, Inc. and the Edward J. DeBartolo Corporation. All of the
foregoing entities have been engaged in shopping center development. Mr. Zook is
a member of the ICSC.
Joshua Kane, age 38, has been the Chief Financial Officer of the Company
since its inception, a position he previously held with MDG since 1986, and has
been Senior Vice President and Chief Financial Officer since December 1994. From
1981 to 1986 he was employed as an accountant at Charles Hecht and Company, most
recently as Senior Accountant. Mr. Kane is a certified public accountant and a
member of the American Institute of Certified Public Accountants and the
Pennsylvania Institute of Certified Public Accountants.
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Compliance with Section 16(a)
of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and trustees and persons who own more than ten percent of
the Company's common shares (collectively, the "Reporting Persons") to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and to furnish the Company with copies of these reports. Based on the
Company's review of the copies of these reports received by it, the Company
believes that all filings required to be made by the Reporting Persons for the
period January 1, 1997 through December 31, 1997 were made on a timely basis.
Item 11. Executive Compensation
The following table shows, for the fiscal years ended December 31, 1995,
1996 and 1997, the annual and long-term compensation paid or accrued by the
Company and its subsidiaries, including the Operating Partnership, to the
Company's Chief Executive Officer and to those executive officers whose total
annual compensation exceeded $100,000.
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION SUMMARY
Annual Compensation
---------------------------------------
Other
Annual
Fiscal Salary Bonus Compensation
Year ($) ($) ($)
------ ------------ ------ ------------
<S> <C> <C> <C> <C>
Marvin L. Slomowitz 1997 $181,692 -- --(1)
Chief Executive Officer 1996 $176,400 -- --(1)
1995 $168,000 -- --(1)
David S. Zook 1997 $146,003 -- --(1)
Executive Vice 1996 $141,750 -- --(1)
President and Chief 1995 $135,000 -- --(1)
Operating Officer
Joshua Kane 1997 $116,385 -- --(1)
Senior Vice President 1996 $ 94,500 -- --(1)
and Chief Financial 1995 $ 90,000 -- --(1)
Officer
</TABLE>
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<TABLE>
<CAPTION>
Long-Term Compensation
-------------------------------------------------
Restricted Long-Term All
Share Options/ Compensation Other
Fiscal Awards SARs Payouts Compensation
Year ($) ($) (#) ($)(2)
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Marvin L. Slomowitz 1997 -- -- 100,000(3) --
Chief Executive Officer 1996 -- -- -- --
1995 -- -- 100,000(3) --
David S. Zook 1997 -- -- 7,500(3) $1,480
Executive Vice 1996 -- -- -- $1,457
President and Chief 1995 -- -- 7,500(3) $1,446
Operating Officer
Joshua Kane 1997 -- -- 7,500(3) $3,580
Senior Vice President 1996 -- -- -- $483
and Chief Financial 1995 -- -- 7,500(3) $471
Officer
</TABLE>
(1) Did not exceed the lesser of $50,000 or 10% of the total annual salary
and bonus for the named executive officer.
(2) Represents contributions made by the Company to the account of the named
executive officer under a 401(k) Plan.
(3) Represents options granted under the Company's 1994 Share Option Plan.
The options granted during fiscal 1995 vested as to 20% of the common
shares subject thereto upon the approval of the Plan on June 15, 1995.
The options granted during fiscal 1997 vested as to 20% of the common
shares subject thereto upon the grant date. The remaining options vest in
20% increments over a four year period.
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Share Option Grants, Exercises and Holdings
The following tables set forth certain information concerning share options
granted to the persons named in the Executive Compensation Summary Table above
during fiscal year 1997 and unexercised share options held by such persons at
the end of fiscal year 1997.
<TABLE>
<CAPTION>
OPTION GRANTS DURING FISCAL 1997
Percentage of
Total annual Potential Realizable
Options/SARs Value at Assumed
Granted to Annual Rates of Share
Option/ Employees Exercise or Price Appreciation
SARs in Fiscal Base Price/ Expiration for Option Term
Name(1) Granted(2) Year 1997 per Share $(3) Date 5% 10%
- ------- ---------- ------------- --------------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Marvin L. Slomowitz 100,000 78% $11.1875 3/12/2007 $703,582 $1,782,952
David S. Zook 7,500 6% $11.1875 3/12/2007 $52,769 $133,721
Joshua Kane 7,500 6% $11.1875 3/12/2007 $52,769 $133,721
</TABLE>
(1) See Executive Compensation Summary Table for titles of the persons named
above.
(2) Represents options granted under the 1994 Share Option Plan. The options
vested immediately as to 20% of the common shares subject thereto, with
the remainder to vest in 20% increments over a four year period.
(3) All options were granted at fair market value on the date of grant.
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<TABLE>
<CAPTION>
1997 FISCAL YEAR END OPTION VALUES
Value of
Number of Unexercised
Unexercised in-the-Money
Options/SARs Options/SARs
at Fiscal at Fiscal
Year-End Year-End(2)
------------- ---------------
Shares
Acquired Value Exercisable/ Exercisable/
Name(1) on Exercise Realized Unexercisable Unexercisable
- ------- -------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Marvin L. Slomowitz -- -- 100,000/100,000(3) --/--
David S. Zook -- -- 7,500/7,500(3) --/--
Joshua Kane -- -- 7,500/7,500(3) --/--
</TABLE>
(1) See Executive Compensation Summary Table for titles of the persons named
above.
(2) At December 31, 1997, the exercise price for the options exceeded the
fair market value for the underlying common shares.
(3) Represents options granted under the 1994 Share Option Plan. The options
vested immediately as to 20% of the common shares subject thereto, with
the remainder to vest in 20% increments over a four year period.
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<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth, as of April 24, 1998, certain information
concerning the holdings of each person who was known to the Company to be the
beneficial owner of more than five percent (5%) of the Company's common shares
and all shares beneficially owned by each trustee, each nominee for trustee,
each executive officer named in the Executive Compensation Summary table
appearing elsewhere herein and by all trustees and executive officers as a
group. Each of the persons named below has sole voting power and sole investment
power with respect to the shares set forth opposite his name, except as
otherwise noted.
<TABLE>
<CAPTION>
Number of
Common Shares
Beneficially Owned Beneficially Owned Percent of Class
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Marvin L. Slomowitz(1) 2,018,840(2) 19.84%
Joseph L. Castle, II 10,000(3) *
Marvin J. Levine 10,000(3)(4) *
Lawrence J. Longua 11,000(3) *
Harvey Shanus 10,000(3) *
John Vincent Weber 10,000(3) *
David S. Zook 14,379(5) *
Joshua Kane 10,479(6) *
Franklin Resources, Inc.
777 Mariners Island Blvd
6th Floor
San Mateo, CA 94404 821,800(7) 9.61%
Corbyn Investment Management, Inc.
Suite 108
2330 W. Joppa Road
Lutherville, MD 21093 608,152(8) 7.11%
First Manhattan Co.
437 Madison Avenue
New York, NY 10022 574,480(9) 6.72%
All Executive Officers and Trustees
as a Group (8 persons) 2,094,698(2) - (8) 20.21%
</TABLE>
*Percentage less than 1% of class
(1) Mr. Slomowitz's address is c/o Mark Centers Trust, 600 Third Avenue,
Kingston, PA 18704.
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(2) Includes 1,621,000 Operating Partnership Units ("OP Units") of Mark
Centers Limited Partnership (the "Operating Partnership") which are
immediately exchangeable into an equivalent number of common shares and
immediately exercisable options to purchase 100,000 common shares. Does
not include 240 common shares held by Mr. Slomowitz's children, as to
which Mr. Slomowitz disclaims beneficial interest.
(3) Represents immediately exercisable options to purchase 10,000 common
shares.
(4) Does not include 500 common shares held by Mr. Levine's wife, as to
which Mr. Levine disclaims beneficial interest.
(5) Represents immediately exercisable options to purchase 7,500 common
shares and 1,375 common shares subject to a restricted share award which
vests within 60 days. Does not include 250 common shares held by Mr.
Zook's daughter, as to which Mr. Zook disclaims beneficial interest.
(6) Includes immediately exercisable options to purchase 7,500 common shares
and 919 common shares subject to a restricted share award which vests
within 60 days.
(7) Franklin Resources, Inc., consisting of a registered investment advisor
and an investment company, has sole voting and dispositive power with
respect to the common shares. This information has been obtained by
reference to a Schedule 13G filed by the named entity.
(8) Corbyn Investment Management, Inc., consisting of a registered investment
advisor and an investment company, has sole voting and dispositive power
with respect to the common shares. This information has been obtained by
reference to a Schedule 13G filed by the named entity.
(9) First Manhattan Co. is a registered investment advisor and has sole
voting and sole dispositive power with respect to 48,800 shares. It has
shared voting and shared dispositive power with respect to 507,130 and
525,680 shares, respectively. The total number of shares reported herein
includes 27,300 shares owned by family members of general partners of
First Manhattan Co. which are reported for informational purposes. First
Manhattan Co. disclaims dispositive power as to 4,700 of such shares and
beneficial ownership as to 25,100 of such shares. This information has
been obtained directly from First Manhattan Co.
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Item 13. Certain Relationships and Related Transactions
During fiscal 1997, the Company held an option to acquire 26 acres
contiguous to the Plaza 15 in Lewisburg, Pennsylvania from Mr. Slomowitz for
$1,325,000 which represents the fair market value as established by an
independent appraisal. The Company and Mr. Slomowitz agreed to terminate this
option in March 1998.
In 1996, the Company issued a note payable to Mr. Slomowitz for $3,030,000
for the purchase of the Union Plaza, located in New Castle, Pennsylvania. The
note, which bears interest payable monthly at a rate equal to that charged on
the Mellon Bank, N.A. facility, is payable in full the earlier of (i) two years
following the date the Union Plaza is completed or (ii) on June 12, 1999.
The Company leases office space from Mr. Slomowitz under the terms of a
noncancelable ten year operating triple net lease which provides for annual rent
of $104,000 for the first five years with annual escalations thereafter based on
increases in the consumer price index. Rent expense, excluding escalations, for
fiscal 1997 aggregated $104,000.
Marvin J. Levine, a trustee of the Company, became a Partner in the law
firm of Wachtel & Masyr, LLP during fiscal 1997. Prior to that Mr. Levine was a
Partner in the law firm of Gold & Wachtel, LLP. Payments to such firms
aggregated $272,197 for legal services rendered to the Trust during fiscal year
1997.
The Company has not recognized rental income for fiscal 1997 pursuant to a
ground lease on Blackman Plaza (a limited partnership in which Mr. Slomowitz is
the sole general partner owning a one percent economic interest) due to the
lessee's inability to pay the ground rent as a result of insufficient cash flow
from the property. The lease, which expires in the year 2051, provides the
Company with an option, exercisable between January 2, 1997 and August 2, 2001,
to purchase the lessee's interests in the shopping center. On January 7, 1998,
the Company exercised its option to purchase the lessee's interests in the
Blackman Plaza with a closing date anticipated to occur during fiscal 1998. All
ground rent currently in arrears will be applied as a credit towards the
Company's purchase price.
Mr. Slomowitz is also a member of the Board of Directors of a tenant which
leases space in twelve of the Company's properties. Rental income from this
tenant for fiscal 1997 aggregated $885,389. Additionally, for fiscal 1995, the
Company paid approximately $1,050,000 for tenant improvements at three
properties for this tenant.
Harvey Shanus, a trustee of the Company, has provided consulting services
to the Company, pursuant to a consulting agreement which expires February 1999,
in connection with construction activities in which the Company is engaged.
Mr. Shanus was paid $100,000 by the Company during fiscal year 1997 for the
provision of such consulting services.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized:
Mark Centers Trust (Registrant)
By: /s/ Marvin L. Slomowitz
- - -----------------------------------
Name: Marvin L. Slomowitz
Title: Chief Executive Officer
Date: April 29, 1998
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