<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 240.14a-11(c) or 240.14a-12
ACADIA REALTY TRUST
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
ACADIA REALTY TRUST
20 SOUNDVIEW MARKETPLACE
PORT WASHINGTON, NEW YORK 11050
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000
TO OUR SHAREHOLDERS:
Please take notice that the Annual Meeting of Shareholders of Acadia
Realty Trust will be held on Tuesday, May 16, 2000, at 10:00 a.m., local time,
at the offices of Donaldson, Lufkin & Jenrette, which are located at 277 Park
Avenue, New York, NY 10172, for the purpose of considering and voting upon:
1. The election of seven trustees to hold office until the next Annual
Meeting of Shareholders and until their successors are duly elected and
qualified;
2. The ratification of the appointment of Ernst & Young LLP as independent
auditors for the Company for the fiscal year ending December 31, 2000;
and
3. Such other business as may properly come before the Annual Meeting or
any adjournments thereof.
The record date for determining shareholders entitled to notice of, and to
vote at, such Annual Meeting is the close of business March 31, 2000.
Your attention is directed to the accompanying Proxy Statement and Proxy.
By order of the Board of Trustees,
/s/ Robert Masters
---------------------------------
Robert Masters, Secretary
April 3, 2000
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED FORM OF PROXY IN
THE ENVELOPE PROVIDED FOR THAT PURPOSE WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.
<PAGE>
ACADIA REALTY TRUST
20 SOUNDVIEW MARKETPLACE
PORT WASHINGTON, NEW YORK 11050
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
May 16, 2000
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Acadia Realty Trust (the "Company") for use
at the Annual Meeting of its shareholders scheduled to be held on Tuesday, May
16, 2000, at 10:00 a.m., local time, or any postponement or adjournment thereof
(the "Annual Meeting"). This Proxy Statement and accompanying form of proxy
were first sent to shareholders on or about April 3, 2000.
The Company will bear the costs of the solicitation of its proxies in
connection with the Annual Meeting, including the costs of preparing,
assembling and mailing proxy materials and the handling and tabulation of
proxies received. In addition to solicitation of proxies by mail, proxies in
connection with the Annual Meeting may be solicited by the trustees, officers
and employees of the Company, at no additional compensation, by telephone,
telegram, personal interviews or otherwise. Arrangements have been made with
brokerage firms, custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owners of common shares of beneficial interest, par
value $.001 per share, of the Company, held of record by such persons or firms
with their nominees, and in connection therewith, such firms will be reimbursed
for their reasonable out-of-pocket expenses in forwarding such materials.
All properly executed and unrevoked proxies in the accompanying form that
are received in time for the Annual Meeting will be voted at the Annual Meeting
in accordance with the specification thereon. If no specification is made,
signed proxies will be voted "FOR" the election of the nominee for trustee
listed below and approval of the proposals set forth in the Notice of Annual
Meeting of the Shareholders of the Company. Any shareholder executing and
delivering a proxy has the right to revoke such proxy at any time prior to the
voting thereof by notice to the Company. In addition, although the mere
attendance at the Annual Meeting will not revoke a proxy, a person present at
the Annual Meeting may withdraw his or her proxy and vote at that time in
person.
OUTSTANDING SHARES AND VOTING RIGHTS
The outstanding capital stock of the Company as of March 22, 2000
consisted of 25,261,715 shares of common shares of beneficial interest, par
value $.001 per share, of the Company (the "Common Shares"). Holders of Common
Shares are entitled to one vote for each Common Share registered in their names
on the record date. The Board of Trustees of the Company (the "Board of
Trustees") has fixed the close of business on March 31, 2000 as the record date
for determination of shareholders entitled to notice of and to vote at the
meeting. The presence, in person or by proxy, of the holders of Common Shares
entitled to cast at least a majority of the outstanding Common Shares on March
31, 2000 will constitute a quorum to transact business at the Annual Meeting.
The approval of a plurality of the votes cast by holders of Common Shares
in person or by proxy at the Annual Meeting in the election of trustees will be
required to approve the nominees for trustee at the Annual Meeting. There is no
cumulative voting in the election of trustees. The approval of a plurality of
the votes cast by holders of Common Shares in person or by proxy at the Annual
Meeting in the ratification of the appointment of the independent auditors will
be required to ratify the appointment of Ernst & Young LLP as independent
auditors.
Proxies marked "abstain" and which have not voted on a particular proposal
are included in determining a quorum for the Annual Meeting. Abstentions and
broker non-votes are not treated as votes cast in the election
1
<PAGE>
of trustees or in the ratification of the appointment of the independent
auditors, and thus are not the equivalent of votes against a nominee or against
the ratification of the appointment of Ernst & Young LLP as independent
auditors, as the case may be, and will not affect the vote with respect to
these matters.
PROPOSAL 1 -- ELECTION OF TRUSTEES
The Bylaws provide that the Board of Trustees may be composed of up to a
maximum of 15 members. The Board of Trustees currently consists of six
trustees, each of whom serves until the next annual meeting of shareholders and
until his successor is duly elected and qualified. Effective December 8, 1999,
Marvin Slomowitz resigned from the Board of Trustees. Election of each trustee
requires the approval of a plurality of the votes cast by the holders of Common
Shares in person or by proxy at the Annual Meeting. As stated elsewhere herein,
the enclosed proxy will be voted for the election as trustee of each nominee
whose name is set forth below unless a contrary instruction is given. With the
exception of Lee S. Wielansky (the trustee who has been nominated to replace
Mr. Slomowitz), all of the nominees currently serve as trustees of the Company.
Management believes that all of its nominees are willing and able to serve the
Company as a trustee. If any nominee at the time of election is unable or
unwilling to serve or is otherwise unavailable for election, and as a
consequence thereof, other nominees are designated, the persons named in the
enclosed proxy or their substitutes will have the discretion and authority to
vote or refrain from voting for other nominees in accordance with their
judgment. The Board of Trustees does not have a nominating committee.
The following is a brief description of the nominees for election as
trustees of the Company.
Ross Dworman, age 40, has been Chairman and Chief Executive Officer of the
Company since August 1998, when the Company acquired substantially all of the
assets of RD Capital, Inc., a Delaware corporation ("RDC"). See "Certain
Relationships and Related Transactions." From 1987 to August 1998, Mr. Dworman
was President and Chief Executive Officer of RDC. From 1984 to 1987, Mr.
Dworman was an associate at Odyssey Partners, L.P., a hedge fund engaged in
leveraged buy-outs and real estate investment, and from 1981 until 1984, he was
a Financial Analyst for Salomon, Inc. Mr. Dworman received his Bachelor of Arts
Degree from the University of Pennsylvania.
Kenneth F. Bernstein, age 38, has been President of the Company since
August 1998, when the Company acquired substantially all of the assets of RDC.
See "Certain Relationships and Related Transactions." Mr. Bernstein is
responsible for overseeing the day-to-day activities of the Company including
operations, acquisitions and capital markets. From 1990 to August 1998, Mr.
Bernstein was the Chief Operating Officer of RDC. In such capacity, he was
responsible for overseeing the day-to-day operations of RDC and its management
companies, Acadia Management Company LLC and Sound View Management LLC. Prior
to joining RDC, Mr. Bernstein was associated with the New York law firm of
Battle Fowler, LLP, from 1986 to 1990. Mr. Bernstein received his Bachelor of
Arts Degree from the University of Vermont and his Juris Doctorate from Boston
University School of Law.
Martin L. Edelman, age 58, has been a trustee of the Company since August
1998, and is Of Counsel to Battle Fowler LLP, a New York City law firm
specializing in real estate and corporate law, which has been counsel to the
Company since August 1998. He is one of the managing partners of Chartwell
Hotel Associates which owns and operates in excess of 30 hotels in the U.S. and
10 in Mexico. He has been involved in all aspects of real estate transactions
including acquisitions, dispositions and financings. Mr. Edelman is a graduate
of Princeton University (1963) and Columbia University School of Law (1966). He
is currently a director of Capital Trust, Cendant Incorporated, Delancey
Estates PLC and Avis-Rent-a-Car Inc. Mr. Edelman is one of the founders of the
Jackie Robinson Foundation and a member of the Board of The Intrepid Museum
Foundation and the Fisher Alzheimer Foundation.
Marvin J. Levine, age 50, has been a trustee of the Company since its
inception. Since February 1, 2000, Mr. Levine has been Of Counsel to the firm
of Blackwell Sanders Peper Martin in their Omaha, Nebraska office. From July
1997 to January 31, 2000, Mr. Levine was a partner in the New York City law
firm of Wachtel & Masyr, LLP. Previously, he had been a partner in the New York
City law firms of Gold & Wachtel, LLP for three years and, prior to that, he
was at Stadtmauer, Bailkin, Levine & Masyr for more than five years. Mr. Levine
represented Mark Development Group ("MDG"), the Company's predecessor, from
1982 until the Company's initial public offering. Mr. Levine rendered certain
legal services to the Company during 1999. See "Certain Relationships and
Related Transactions."
2
<PAGE>
Lawrence J. Longua, age 58, has been a trustee of the Company since its
inception. He is currently a consultant to General Electric Capital Investment
Advisors and is employed at New York University's Real Estate Institute in
administration and as an instructor. From February 1998 until March 2000, Mr.
Longua was a Senior Managing Director of the Witkoff Group, LLC, an owner of
major office properties in New York City. From 1990 to February 1998, Mr.
Longua had been a Senior Vice President and Assistant General Manager of The
Mitsubishi Trust & Banking Corporation where he had been responsible for the
management of a substantial portfolio of real estate debt and equities. From
1984 to 1990, Mr. Longua was a Vice President and Manager of Bankers Trust
Company, and was responsible for overseeing a real estate debt portfolio of
approximately $3 billion. Mr. Longua currently is the Chairman of the board of
trustees of the Mortgage Bankers Association of the New York Scholarship
Foundation, a Governor of the Mortgage Bankers Association of New York, a
member of the New York University Appraisal Council and a member of the New
York University REIT roundtable. 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.
Gregory A. White, age 43, has been a trustee of the Company since August
1998. As of August 1998, Mr. White has been a Senior Vice President of Conning
Asset Management Company, a publicly traded investment management company
("Conning"). Mr. White was a founding partner and Managing Director of Schroder
Mortgage Associates ("Schroder") in New York, New York, from 1992 until
Conning's acquisition of Schroder in August 1998. Mr. White was associated with
Schroder from 1992 to 1999. Schroder is an investment adviser that specializes
in commercial mortgages and commercial mortgage backed securities. From 1988 to
1992, Mr. White was a Managing Director of the Salomon Brothers Inc. real
estate finance department. Mr. White also serves as a trustee of New Plan
Realty Trust. He has a B.S. degree in civil engineering from Tufts University
and an MBA from the Wharton School of Business. Mr. White is also on the
advisory board of the Guggenheim Realty Fund and is a visiting professor of
real estate finance at New York University.
Lee S. Wielansky, age 48, was a founding partner and Chief Executive
Officer of the Midland Development Group, Inc., a retail developer of
commercial real estate in the Mid-West, Denver, Dallas, Ohio, North Carolina
and Tennessee. He was responsible for overseeing the development of more than
fifty shopping centers in these regions. Mr. Wielansky serves as a director of
Regency Realty Corporation, a real estate investment trust, with offices
throughout the United States. Mr. Wielansky has been a director of Allegiant
Bancorp, Inc. since 1990 and its Vice Chairman since February, 1999. Mr.
Wielansky is President of Lee S. Wielansky, LLC, a company specializing in
investments and property development.
Committees of the Board of Trustees
The Board's Audit Committee (the "Audit Committee") is empowered to review
the scope and results of the audit by the Company's independent auditors. The
Audit Committee examines the accounting practices and methods of control and
the manner of reporting financial results. These reviews and examinations
include meetings with independent auditors, staff accountants and
representatives of management. The results of the Committee's examinations and
the choice of the Company's independent auditors are reported to the full Board
of Trustees. The Audit Committee includes no officers or employees of the
Company or its majority-owned subsidiary, Acadia Realty Limited Partnership, a
Delaware limited partnership of which the Company serves as general partner
(the "Operating Partnership"). Members of the Audit Committee during the last
fiscal year were Messrs. Longua, White and, until December 8, 1999 when Mr.
Slomowitz resigned from the Board of Trustees, Mr. Slomowitz. The Audit
Committee met twice during the last fiscal year.
The Board's Compensation Committee (the "Compensation Committee") met
twice during the last fiscal year for the purpose of evaluating key officers'
salaries and bonuses. Members of the Compensation Committee during the last
fiscal year were Messrs. Edelman and Levine. See "Report of the Compensation
and Share Option Plan Committees on Executive Compensation."
The Board's Share Option Plan Committee (the "Share Option Plan
Committee") is responsible for administering the Company's 1999 Share Incentive
Plan (the "1999 Share Incentive Plan"), including determining eligible
participants, the number and terms of options granted and other matters
pertaining to the 1999 Share Incentive Plan. The Trustees' Plan is administered
by the Board of Trustees. Members of the Share Option Plan Committee during the
last fiscal year were Messrs. White and Longua. The Share Option Plan Committee
met six times during the last fiscal year. See "Report of the Compensation and
Share Option Plan Committees on Executive Compensation."
3
<PAGE>
Vote Required; Recommendation
The election to the Board of Trustees of each of the seven nominees will
require the approval of a plurality of the votes cast by the holders of Common
Shares in person or by proxy at the Annual Meeting. The Board of Trustees
unanimously recommends that the shareholders vote FOR the election to the Board
of Trustees of each of the seven nominees.
Trustees' Attendance at Meetings
The Board of Trustees held six meetings during the last fiscal year.
Martin L. Edelman attended 66.7% of the meetings of the Board of Trustees and
100% of the meetings held by the compensation committee during the last fiscal
year. Each other incumbent trustee of the Company attended at least 75% of the
meetings of the Board of Trustees and meetings held by all committees on which
such trustee served during the last fiscal year.
Trustees' Fees
Each trustee who is not also an officer and full-time employee of the
Company or the Operating Partnership receives an annual trustee fee in the
amount of $15,000 plus a fee of $1,250 for each meeting of the Board of
Trustees and each committee meeting attended. Chairmen of committees of the
Board of Trustees received $1,000 for each committee meeting attended. Trustees
who are officers and full-time employees of the Company or the Operating
Partnership receive no separate compensation for service as a trustee or
committee member. Additionally, members of the Board of Trustees are reimbursed
for travel and lodging expenses associated with attending meetings of the Board
of Trustees and committees of the Board of Trustees. Additionally, pursuant to
the 1999 Share Incentive Plan, non-employee trustees are entitled to automatic
grants of options to purchase 1,000 Common Shares following the annual meeting
of shareholders held during each year during which they serve as trustees,
which options vest in five equal cumulative annual installments commencing on
the date of grant. Pursuant to the 1999 Share Incentive Plan, options to
purchase 5,000 Common Shares at an exercise price of $5.75 per Common Share
were granted to non-employee trustees on June 16, 1999.
PROPOSAL 2 -- RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Trustees has selected Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000, and has
directed that the selection of the independent auditors be submitted for
ratification by the shareholders at the Annual Meeting.
Shareholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's Declaration of
Trust, Bylaws or otherwise. However, the Board of Trustees is submitting the
selection of Ernst & Young LLP to the shareholders for ratification as a matter
of what it considers to be good corporate practice. If the shareholders fail to
ratify the selection, the Board of Trustees in its discretion may direct the
appointment of a different independent accounting firm at any time during the
year if the Board of Trustees determines that such a change would be in the
best interests of the Company and its subsidiaries.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting to respond to shareholder's questions raised at the Annual
Meeting, and they will have the opportunity to address the meeting, if they so
desire.
Vote Required; Recommendation
The approval of a plurality of the votes cast by holders of Common Shares
in person or by proxy at the Annual Meeting in the ratification of the
appointment of the independent auditors is required to ratify the appointment
of Ernst & Young LLP as independent auditors. The Board of Trustees unanimously
recommends that the shareholders vote FOR the ratification of Ernst & Young LLP
as independent auditors.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company's authorized capital consists of 100,000,000 Common Shares. As
of March 22, 2000, the Company had 25,261,715 Common Shares outstanding, which
shares were held by 213 record holders.
The Company is not aware of any person or any "group" within the meaning
of Section 13(d)(3) of the Exchange Act that is the beneficial owner of more
than five percent of any class of the Company's voting securities other than as
set forth in the table below. The Company does not know of any arrangements at
present, the operation of which may, at a subsequent date, result in a change
in control of the Company.
The following table sets forth, as of March 22, 2000, certain information
concerning the holdings of each person known to the Company to be beneficial
owner of more than five percent (5%) of the Common Shares at March 22, 2000,
and all Common 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 Percent of
Beneficial Owners Owned Class
- --------------------------------------------------- -------------------------------------------------- -----------
<S> <C> <C>
Yale University(1) ................................ 6,138,492(2) 21.89%
Five Arrows Realty Securities LLC(3) .............. 3,226,667(4) 12.77
Howard Hughes Medical Institute(5) ................ 2,266,667 8.94
The Board of Trustees of the Leland Stanford Junior
University(6) .................................... 2,133,333 8.44
Marvin L. Slomowitz (7) ........................... 2,018,840(8) 7.95
Harvard Private Capital Realty, Inc.(9) ........... 2,000,000(10) 7.92
Vanderbilt University(11) ......................... 1,346,647 5.33
Ross Dworman (12) ................................. 1,817,320(13) 6.74
Kenneth F. Bernstein(12) .......................... 759,201(14) 2.92
Perry Kamerman (12) ............................... 154,866(15) *
Robert Masters (12) ............................... 66,888(16) *
Timothy J. Bruce (12) ............................. 46,334(17) *
Gregory A. White .................................. 17,229(18) *
Martin L. Edelman ................................. 200(19) *
Marvin J. Levine .................................. 200(19) *
Lawrence J. Longua ................................ 200(19) *
Lee S. Wielansky .................................. 0 *
All Executive Officers and Trustees as a Group
(eleven persons) ................................. 2,982,438(12,13,14,15,16,17,18,19) 10.65%
</TABLE>
- ------------
* Percentage less than 1% of class.
(1) The business address of Yale University is c/o Yale University Investments
Office, Real Estate, 230 Prospect Street, New Haven, CT 06511.
(2) Includes 2,771,876 units of limited partnership interests in the Operating
Partnership ("Units") which are immediately exchangeable into an equivalent
number of Common Shares, which Units are beneficially held by Yale
University through its limited partnership interest in RD Properties, L.P.
V, the record holder of such Units.
(3) The business address of Five Arrows Realty Securities LLC is c/o Rothschild
Realty, Inc., 1251 Avenue of the Americas, 51st Floor, New York, NY 10020.
(4) Rothschild Realty Investors II L.L.C. ("Rothschild"), a Delaware limited
liability company and sole managing member of Five Arrows Realty Securities
L.L.C., may be deemed the beneficial owner of these Common Shares. The
business address of Rothschild is c/o Rothschild Realty, Inc. 1251 Avenue
of the Americas, 51st Floor, New York, NY 10020.
(5) The business address of Howard Hughes Medical Institute is 4000 Jones
Bridge Road, Chevy Chase, MD 20815.
(6) The business address of The Board of Trustees of the Leland Stanford Junior
University is c/o Stanford Management Company, 2770 Sand Hill Road, Mentas
Park, CA 94025.
5
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(7) The business address of Mr. Slomowitz is c/o Mark Development Company, 600
Third Avenue, Kingston, PA 18704.
(8) Includes 121,000 Units which are immediately exchangeable into an
equivalent number of Common Shares. Does not include 240 Common Shares held
by Mr. Slomowitz's children, as to which Mr. Slomowitz disclaims beneficial
interest.
(9) The business address of Harvard Private Capital Realty, Inc. is 600
Atlantic Avenue, Boston, MA 02210.
(10) Charlesbank Capital Partners, LLC ("Charlesbank"), a Massachusetts limited
liability company, pursuant to an agreement among Charlesbank, the
President and Fellows of Harvard College and certain individuals, has sole
power to direct the vote of these Common Shares and may be deemed the
beneficial owner of these Common Shares. The business address of
Charlesbank is 600 Atlantic Avenue, Boston, MA 02210.
(11) The business address of Vanderbilt University is c/o Vanderbilt University,
Treasurer's Office, Alumni Hall, Nashville, TN 37240.
(12) The business address of each such persons is c/o Acadia Realty Trust, 20
Soundview Marketplace, Port Washington, NY 11050.
(13) Reflects the Common Shares beneficially owned by Mr. Dworman in his
individual capacity, either directly or indirectly, and the Common Shares
deemed to be beneficially owned by Mr. Dworman. The Common Shares directly
owned by Mr. Dworman in his individual capacity consist of (i) 533,399
Units which are immediately exchangeable into a like number of Common
Shares, (ii) 5,000 restricted Common Shares issued to Mr. Dworman on March
15, 2000, (iii) 4,000 Common Shares purchased by Mr. Dworman on the open
market and (iv) 666,667 vested options issued pursuant to the 1999 Share
Incentive Plan. The Common Shares indirectly owned by Mr. Dworman in his
individual capacity consist of 61,750 Units which are immediately
exchangeable into a like number of Common Shares, which Units are
beneficially held by Mr. Dworman through his equity interests in various
limited partnerships which are the record holders of such Units. The
Common Shares deemed to be beneficially owned by Mr. Dworman consist of
107,728 Common Shares beneficially held by Mr. Dworman through his equity
interest in RD New York VI LLC, the record holder of such Common Shares,
and 438,776 Units which are immediately exchangeable into a like number of
Common Shares, which Units are beneficially held by Mr. Dworman through
his equity interests in various corporations, limited liability companies
and limited partnerships which are the record holders of such Units.
(14) Reflects the Common Shares beneficially owned by Mr. Bernstein in his
individual capacity and the Common Shares deemed to be beneficially owned
by Mr. Bernstein. The Common Shares directly owned by Mr. Bernstein in his
individual capacity consist of (i) 261,691 Units which are immediately
exchangeable into a like number of Common Shares, (ii) 25,532 restricted
Common Shares issued to Mr. Bernstein on January 3, 2000, (iii) 8,000
Common Shares purchased by Mr. Bernstein on the open market and (iv)
333,334 vested options issued pursuant to the 1999 Share Incentive Plan.
The Common Shares deemed to be beneficially owned by Mr. Bernstein consist
of 26,933 Common Shares beneficially held by Mr. Bernstein through his
equity interest in RD New York VI LLC, the record holder of such Common
Shares, and 103,711 Units which are immediately exchangeable into a like
number of Common Shares, which Units are beneficially held by Mr.
Bernstein through his equity interests in various corporations, limited
liability companies and limited partnerships which are the record holders
of such Units.
(15) Represents 50,000 Units which are immediately exchangeable into an
equivalent number of Common Shares, 1,532 restricted Common Shares issued
to Mr. Kammerman on January 3, 2000 and 103,334 vested options issued
pursuant to the 1999 Share Incentive Plan.
(16) Represents 4,667 Units which are immediately exchangeable into an
equivalent number of Common Shares, 2,554 restricted Common Shares issued
to Mr. Masters on January 3, 2000, 56,667 vested options issued pursuant
to the 1999 Share Incentive Plan and 3,000 Common Shares purchased by Mr.
Masters on the open market.
(17) Represents 3,000 restricted Common Shares issued to Mr. Bruce on January
3, 2000 and 43,334 vested options issued pursuant to the 1999 Share
Incentive Plan.
(18) Represents 17,029 Units which are immediately exchangeable into an
equivalent number of Common Shares, which Units are owned by Mr. White's
wife, and 200 vested options issued pursuant to the 1999 Share Incentive
Plan.
(19) Represents vested options issued pursuant to the 1999 Share Incentive Plan.
6
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table shows for the fiscal years ended December 31, 1999,
1998 and 1997, the annual and long-term compensation paid and accrued by the
Company to the Company's Chief Executive Officer and to each of the four most
highly compensated executive officers whose total annual compensation for
fiscal year 1999 exceeded $100,000.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------------------ -----------------------------------------------------
Other Restricted Long-Term All
Annual Share Compensation Other
Fiscal Salary Bonus Compensation Awards Options Payouts Compensation
Year ($) ($) ($) ($) SARs($) (#) ($)(1)
-------- ----------- ----------- -------------- ------------ --------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ross Dworman 1999 $287,000 $287,000 $ --(2) $ -- $ -- 1,000,000 (3) --
Chief Executive Officer 1998 110,385 55,827 --(2) -- -- -- --
1997 -- -- -- -- -- -- --
Kenneth F. Bernstein 1999 250,000 250,000 --(2) -- -- 500,000 (3) 4,800
President 1998 96,154 48,630 --(2) -- -- -- --
1997 -- -- -- -- -- -- --
Timothy J. Bruce 1999 186,563 81,100 --(2) -- -- 50,000 (3) --
Senior Vice President -- 1998 16,154 -- --(2) -- -- -- --
Director of Leasing 1997 -- -- -- -- -- -- --
Perry Kamerman 1999 150,000 76,200 --(2) -- -- 140,000 (3) 4,800
Senior Vice President -- 1998 53,269 30,000 --(2) -- -- -- --
Finance 1997 -- -- -- -- -- -- --
Robert Masters 1999 150,000 62,000 --(2) -- -- 70,000 (3) 4,108
Senior Vice President -- 1998 51,269 25,000 --(2) -- -- -- --
General Counsel and 1997 -- -- -- -- -- -- --
Corporate Secretary
</TABLE>
- ------------
(1) Represents contributions made by the Company to the account of the named
executive officer under a 401(k) Plan.
(2) Did not exceed the lesser of $50,000 or 10% of the total annual salary and
bonus for the named individual.
(3) Represents options granted under the Company's 1999 Share Incentive Plan.
7
<PAGE>
Share Option Grants, Exercises and Holdings
The following tables set forth certain information concerning share
options granted to the persons named in the Summary Compensation Table above
during fiscal year 1999 and unexercised share options held by such persons at
the end of fiscal year 1999.
Share Option Grants in Fiscal Year 1999
<TABLE>
<CAPTION>
Percentage of
Total Annual
Options/SARs Potential Realizable Value At
Granted to Assumed
Option/ Employees in Exercise or Annual Rate of Share Price
SARs Fiscal Year Base Price/ Expiration for Option Term
Name(1) Granted(2) 1999 Per Share(3) Date 5% 10%
- ---------------------- ------------ -------------- -------------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Ross Dworman 1,000,000 48.3% $ 7.50 8/11/08 $ 1,458,950 $ 6,765,350
Kenneth F. Bernstein 500,000 24.1% $ 7.50 8/11/08 $ 729,475 $ 3,382,675
Timothy J. Bruce 50,000 2.4% $ 5.75 8/11/08 $ 160,448 $ 425,768
Perry Kamerman 140,000 6.8% $ 5.75 8/11/08 $ 449,253 $ 1,192,149
Robert Masters 70,000 3.4% $ 5.75 8/11/08 $ 224,627 $ 596,075
</TABLE>
- ------------
(1) See Executive Compensation Summary Table for titles of the persons named
above.
(2) Represents options granted under the 1999 Share Incentive Plan. One-third
of the options vested as of the grant date, one-third of the options
vested as of the first anniversary of the RDC Transaction and the final
one-third of the options will vest on the next anniversary of the RDC
Transaction.
(3) All options were granted at an exercise price greater than the market price
of the Company's Common Shares on the date of grant.
1999 Fiscal Year End Option Values
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised in-the-Money
Options/SARs Options/SARs
at Fiscal at Fiscal
Shares Year-End(2) Year-End(3)
Acquired ----------------- --------------
on Value Exercisable/ Exercisable/
Name(1) Exercise Realized Unexercisable Unexercisable
- ---------------------- ---------- ---------- ----------------- --------------
<S> <C> <C> <C> <C>
Ross Dworman -- -- 666,667/333,333 --
Kenneth F. Bernstein -- -- 333,334/166,666 --
Timothy J. Bruce(4) -- -- 33,334/16,666 --
Perry Kamerman(4) -- -- 93,334/46,666 --
Robert Masters(4) -- -- 46,667/23,333 --
</TABLE>
- ------------
(1) See Summary Compensation Table for title of the persons named above.
(2) Represents options granted under the 1999 Share Incentive Plan. One-third
of the options vested as of the grant date, one-third of the options
vested as of the first anniversary of the RDC Transaction and the final
one-third of the options will vest on the next anniversary of the RDC
Transaction.
(3) At December 31, 1999, the exercise price for the options exceeded the fair
market value for the underlying Common Shares.
(4) Not reflected are options to purchase 10,000 Common Shares, granted under
the 1999 Share Incentive Plan as compensation for fiscal year 2000. Such
options vested on the grant date, are exercisable at a price of $5.00 per
Common Share and expire on January 2, 2010.
8
<PAGE>
Employment Contracts
Ross Dworman. The Company entered into an employment agreement with its
Chairman and Chief Executive Officer, Ross Dworman, pursuant to which the
Company compensates Mr. Dworman at the rate of $287,000 per year, subject to an
annual review and upward adjustment by the Compensation Committee. The
Compensation Committee has increased Mr. Dworman's annual base compensation by
10% to $315,700 for the calendar year ending December 31, 2000. In addition,
each year during the term of Mr. Dworman's employment commencing with the
calendar year ending December 31, 1999, the Compensation Committee will
consider Mr. Dworman for an incentive bonus (to be determined by the
Compensation Committee) and discretionary bonuses or options to purchase Common
Shares as the Board of Trustees, the Share Option Plan Committee or the
Compensation Committee may approve. The Board of Trustees has instituted a
program to encourage all executives who have been awarded bonuses to elect to
receive payment of all or any portion thereof in Common Shares rather than
cash. To the extent that an executive elects to receive his or her bonus in
Common Shares, such executive will receive Common Shares with a value on the
date of issuance equal to 120% of that portion of the executive's bonus which
the executive has elected to receive in Common Shares. The Compensation
Committee awarded a bonus of $287,000 to Mr. Dworman for the calendar year
ended December 31, 1999. Mr. Dworman received $200,000 of this bonus in cash in
1999 and elected to receive $21,406 of the remaining $87,000 in Common Shares.
Therefore, in January 2000, the Company issued to Mr. Dworman Common Shares
with a value at the time of issuance of $25,687 ($21,406 x 120%) and in March
2000, Mr. Dworman received the remainder of his bonus, $65,594, in cash. The
employment agreement, effective as of August 12, 1998, provides for a
three-year term, is renewable for successive daily periods, and is subject to
termination in accordance with the terms and conditions of such agreement.
Under the employment agreement, Mr. Dworman is entitled to receive options
to purchase an aggregate of 1,000,000 Common Shares, exercisable at $7.50 per
share, which options vest at the rate of one-third as of the grant date,
one-third as of the first anniversary of the RDC Transaction and the final
one-third on the next anniversary of the RDC Transaction. Any unvested options
will expire if they have not vested upon the occurrence of certain events
enumerated in the employment agreement (including termination of employment for
cause), and the options are subject to customary antidilution provisions. The
terms of the options may be modified by the terms of any share option plan
adopted by the Company.
The employment agreement also provides for an annual car allowance plus
insurance costs for Mr. Dworman to be maintained by the Company. Mr. Dworman is
also entitled to participate in all benefit plans, health insurance,
disability, retirement and incentive compensation plans generally available to
the Company's executives, and is subject to certain non-competition and
confidentiality requirements.
The employment agreement provides for certain termination or severance
payments to be made by the Company to Mr. Dworman in the event of his
termination of employment as the result of his death, disability, discharge
with or without Cause (as defined therein), his resignation or a termination by
Mr. Dworman for "good reason," including, a Change of Control (as defined
therein) of the Company. If Mr. Dworman's employment is terminated either
because he is discharged without cause or due to a termination by Mr. Dworman
for "good reason," including, a Change of Control, the Company will be required
to make a lump sum payment equal to among other things, unpaid salary and
bonus, and unpaid severance salary and bonus, each paid in accordance with the
terms and conditions of such agreement.
Kenneth F. Bernstein. The Company entered into an employment agreement
with its President, Kenneth F. Bernstein, pursuant to which the Company
compensates Mr. Bernstein at the rate of $250,000 per year, subject to an
annual review and upward adjustment by the Compensation. The Compensation
Committee has increased Mr. Bernstein's annual base compensation by 10% to
$275,000 for the calendar year ending December 31, 2000. In addition, each year
during the term of Mr. Bernstein's employment commencing with the calendar year
ending December 31, 1999, the Compensation Committee will consider Mr.
Bernstein for an incentive bonus (to be determined by the Compensation
Committee) and discretionary bonuses or options to purchase Common Shares as
the Board of Trustees, the Share Option Plan Committee or the Compensation
Committee may approve. The Board of Trustees has instituted a program to
encourage all executives who have been awarded bonuses to elect to receive
payment of all or any portion thereof in Common Shares rather than cash. To the
extent that an executive elects to receive his or her bonus in Common Shares,
such executive will receive Common Shares with
9
<PAGE>
a value on the date of issuance equal to 120% of that portion of the
executive's bonus which the executive has elected to receive in Common Shares.
The Compensation Committee awarded a bonus of $250,000 to Mr. Bernstein for the
calendar year ended December 31, 1999. Mr. Bernstein elected to receive
$100,000 of this bonus in Common Shares and the remainder in cash. Therefore,
in January 2000, the Company issued to Mr Bernstein Common Shares with a value
at the time of issuance of $120,000 ($100,000 x 120%) and in January 2000 and
March 2000, Mr. Bernstein received $20,000 and $130,000, respectively, in cash.
The employment agreement, effective as of August 12, 1998, provides for a
three-year term, is renewable for successive daily periods, and is subject to
termination in accordance with the terms and conditions of such agreement.
Under the employment agreement, Mr. Bernstein is entitled to receive
options to purchase an aggregate of 500,000 Common Shares, exercisable at $7.50
per share, which options vest at the rate of one-third as of the grant date,
one-third as of the first anniversary of the RDC Transaction and the final
one-third on the next anniversary of the RDC Transaction. Any unvested options
will expire if they have not vested upon the occurrence of certain events
enumerated in the employment agreement (including termination of employment for
cause), and the options are subject to customary antidilution provisions. The
terms of the options may be modified by the terms of any share option plan
adopted by the Company.
The employment agreement also provides for an annual car allowance plus
insurance costs for Mr. Bernstein to be maintained by the Company. Mr.
Bernstein is also entitled to participate in all benefit plans, health
insurance, disability, retirement and incentive compensation plans generally
available to the Company's executives, and is subject to certain
non-competition and confidentiality requirements.
The employment agreement provides for certain termination or severance
payments to be made by the Company to Mr. Bernstein in the event of his
termination of employment as the result of his death, disability, discharge
with or without Cause (as defined therein), his resignation or a termination by
Mr. Bernstein for "good reason," including, a Change of Control (as defined
therein) of the Company. If Mr. Bernstein's employment is terminated either
because he is discharged without cause or due to a termination by Mr. Bernstein
for "good reason," including, a Change of Control, the Company will be required
to make a lump sum payment equal to among other things, unpaid salary and
bonus, and unpaid severance salary and bonus, each paid in accordance with the
terms and conditions of such agreement.
Employee Benefit Plans
The Company provides a variety of medical, dental, vision, life,
disability and accidental death and dismemberment insurance policies that are
generally available to all of its full-time employees. The Company also
provides a contributory 401(k) savings plan to employees of the Company.
REPORT OF THE COMPENSATION AND SHARE OPTION PLAN
COMMITTEES ON EXECUTIVE COMPENSATION
The Compensation Committee, composed of outside trustees of the Board of
Trustees, reviews the performance of the Company's executive personnel and
develops and makes recommendations to the Board of Trustees with respect to
executive compensation policies, including the awarding of appropriate bonuses.
The Share Option Plan Committee, composed of outside trustees of the Board of
Trustees, is empowered by the Board of Trustees to recommend to the Board of
Trustees those executive officers to whom share options and restricted share
awards should be granted and the number of common shares to which such options
and awards should be subject.
Each committee has access to independent compensation data and is
authorized, if determined appropriate in any particular case, to engage outside
compensation consultants.
The objectives of each committee are to support the achievement of desired
Company performance, to provide compensation and benefits that will attract and
retain superior talent and reward performance and to fix a portion of
compensation to the outcome of corporate performance.
The executive compensation program is generally comprised of base salary,
discretionary performance bonuses and long term incentives in the form of share
options and restricted share awards. The compensation program also includes
various benefits, including health insurance plans and programs and pension and
profit sharing and retirement plans in which substantially all of the Company's
employees participate.
10
<PAGE>
Base salary levels for the Company's executive officers are competitively
set relative to salaries of officers of companies comparable in business, size
and location. In each instance, base salary takes into account individual
experience and performance specific to the Company.
The Compensation Committee is empowered to recommend for full Board of
Trustees approval the payment of cash performance bonuses to employees,
including executive officers, of the Company. Performance bonuses are paid
based upon the degree of achievement of a specified earnings goal. The Board of
Trustees determines annually both the targeted earnings goal and the maximum
performance bonus to be paid to each employee. The amount of the target bonus
is determined by each employee's level of responsibility and material
contributions to the success of the Company. In 1999, the Compensation
Committee recommended (and the Board approved) the payment of an aggregate of
$1,023,800 in bonuses of which $215,000 was paid in 1999 and $808,800 in 2000.
The Board of Trustees believes that employee equity ownership provides
significant additional motivation to executive officers to maximize value for
the Company's shareholders and, therefore, has authorized the Share Option Plan
Committee to periodically recommend to the Board of Trustees grants of share
options and restricted share awards to the Company's employees, including
executive officers. Share options are granted typically at prevailing market
price and, therefore, will only have value if the Company's share price
increases over the exercise price. The Share Option Plan Committee believes
that the grant of share options and restricted share awards provides a long
term incentive to such persons to contribute to the growth of the Company and
establishes a direct link between compensation and shareholder return, measured
by the same index used by shareholders to measure Company performance. The
terms of options and restricted share awards granted by the Board of Trustees,
including vesting, exercisability and term, are determined by the Share Option
Plan Committee, subject to requirements imposed by the plans under which such
options and awards may be granted, based upon relative position and
responsibilities of each executive officer, historical and expected
contributions of each officer to the Company, previous option grants to
executive officers and a review of competitive equity compensation for
executive officers of similar rank in companies that are comparable to the
Company's industry, geographic location and size. For information regarding
recent options granted to the Company's executive officers, reference is made
to the tables set forth in the Proxy Statement under the caption "Executive
Compensation."
The Compensation Committee is aware that a recent amendment to the
Internal Revenue Code of 1986 treats certain elements of executive compensation
in excess of $1.0 million a year as an expense not deductible by the Company
for federal income tax purposes. Currently, no executive officer's
compensation, as determined in accordance with these regulations, exceeds the
$1.0 million cap. Accordingly, the Compensation Committee has not yet
established a policy which would address compensation to the Company's
executive officers in light of the cap.
Compensation Committee
Martin L. Edelman
Marvin J. Levine
Share Option Plan Committee
Lawrence J. Longua
Gregory A. White
11
<PAGE>
SHARE PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return for
the Common Shares for the period commencing December 31, 1994 through December
31, 1999 with the cumulative total return on the Standard & Poor's 500 Stock
Index (the "S&P 500"), and the NAREIT Equity REIT Total Return Index (the
"Index") over the same period. Total return values for the S&P 500, the Index
and the Common Shares were calculated based upon cumulative total return
assuming the investment of $100 in each of the S&P 500, the Index and the
Common Shares on December 31, 1994, and assuming reinvestment of such
dividends. The shareholder return as set forth in the below is not necessarily
indicative of future performance.
Comparison of 5 Year Cumulative Total Return*
among Acadia Realty Trust, the S&P 500 Index
and the Nareit Equity Index
[GRAPHIC OMITTED]
*$100 INVESTED ON 12/31/94 IN STOCK OR INDEX.
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
<TABLE>
<CAPTION>
Cumulative Total Return
--------------------------------------------------------
12/94 12/95 12/96 12/97 12/98 12/99
<S> <C> <C> <C> <C> <C> <C>
ACADIA REALTY TRUST ......... 100 98 99 95 56 112
S&P 500 ..................... 100 138 169 226 290 351
NAREIT EQUITY ............... 100 115 156 188 155 148
</TABLE>
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RDC Transaction
On August 12, 1998, the Company and the Operating Partnership consummated
the transactions (the "RDC Transaction") contemplated by the Contribution and
Share Purchase Agreement dated April 15, 1998 (the "Agreement") among the
Company, the Operating Partnership and certain entities affiliated with RD
Capital, Inc., a Delaware corporation ("RDC"). The closing (the "Closing") of
the RDC Transaction followed Registrant's annual meeting the same day at which
Registrant's shareholders approved the RDC Transaction.
At the Closing of the RDC Transaction, the Company issued to RD
Properties, L.P. VI, RD Properties, L.P. VIA and RD Properties, L.P. VIB
(collectively, the "RDC Funds") an aggregate of 13,333,333 newly issued Common
Shares, in exchange for a $100 million cash investment. In addition, the
Operating Partnership acquired fee title to, or all or substantially all of the
ownership interests in, 12 retail shopping centers, five multi-family apartment
complexes, one redevelopment property and a 49% interest in a retail shopping
center owned by certain entities in which RDC or its affiliates (certain of
which Ross Dworman and Kenneth F. Bernstein were controlling principals) served
as the general partner or in another similar management capacity, as well as
certain third party management contracts and certain promissory notes, in
exchange for approximately 11.1 million Units, each of which is exchangeable,
on a one-for-one basis, for Common Shares, and approximately 2.0 million newly
issued Common Shares valued at $97,217,000. In addition, the Company assumed
mortgage debt aggregating $154,234,000 and incurred other capitalized
transaction costs of $5,757,000 resulting in an aggregate purchase price of
$257,208,000.
As a result of the RDC Transaction, the RDC Funds collectively
beneficially owned approximately 63.2% of the Common Shares issued and
outstanding as of the Closing. Furthermore, the RDC Funds, together with such
other affiliates of RDC, beneficially owned approximately 72.2% of the Common
Shares issued and outstanding as of the Closing, after giving effect to the
conversion of the Units into Common Shares. Other real estate investment
partnerships and related entities in which RDC or its affiliates serve as
general partner or in another similar management capacity owned 93% of the
minority interest in the Operating Partnership as limited partners. Prior to
the Closing and pursuant to the Agreement, the Board of Trustees exempted (i)
the RDC Funds, and (ii) the other affiliates of RDC which received Units
(which, upon exchange of such Units into Common Shares, would exceed the excess
share limitations) from the excess share limitations of the Company's
Declaration of Trust. Pursuant to the Agreement, the RDC Funds granted to each
of their respective partners a proxy, appointing such partners as proxy to vote
the Common Shares to which such partners would be entitled assuming a
dissolution of the RDC Funds.
The Operating Partnership is obligated to issue Units valued at $2,750,000
to an RDC affiliate upon the completion of certain improvements and the
commencement of rental payments from a designated tenant at one of the
properties acquired in the RDC Transaction.
Upon the consummation of the RDC Transaction, Marvin L. Slomowitz resigned
as Chairman of the Board and Chief Executive Officer of the Company and Ross
Dworman and Kenneth F. Bernstein, the President and Chief Executive Officer and
Chief Operating Officer, respectively, prior to the RDC Transaction, of RDC,
became the Chairman and Chief Executive Officer and President, respectively, of
the Company. In addition, Messrs. Dworman and Bernstein and two other designees
of RDC, Martin L. Edelman and Gregory White, neither of whom was an officer,
trustee, director or employee of the Company or RDC or any its affiliates,
became four of the seven trustees comprising the Board of Trustees upon
consummation of the RDC Transaction. Following the completion of the RDC
Transaction, the Company changed its name from Mark Centers Trust to Acadia
Realty Trust and the name of the Operating Partnership was changed from Mark
Centers Limited Partnership to Acadia Realty Limited Partnership.
Agreements with Respect to Share Ownership
In March 2000, the RDC Funds, in accordance with their respective
partnership agreements (the "RDC Fund Partnership Agreements"), distributed to
their respective limited partners the Common Shares which had been issued to
the RDC Funds in connection with the RDC Transaction. Pursuant to a
registration and lock-up agreement, dated as of the date of the RDC Transaction
(the "Registration Agreement"), in March 2000, the
13
<PAGE>
Company filed a registration statement with the Securities and Exchange
Commission to permit the resale of such Common Shares, which registration
statement was declared effective in March 2000. Pursuant to the RDC Fund
Partnership Agreements and the Registration Agreement, such limited partners
had agreed to certain restrictions on the sale of such Common Shares by such
limited partners (the "Original Lock-Up Provisions"). In March 2000, such
limited partners agreed, subject to certain conditions, to extend the term of
the Original Lock-Up Provisions until December 28, 2000.
On two occasions subsequent to the RDC Transaction, the Board of Trustees
permitted investors owning in excess of 4% of the Company's Common Shares to
acquire additional Common Shares through open market purchases transacted
during specified three-month windows.
Transactions with Former Chief Executive Officer
The Company entered into the following transactions with Mr. Slomowitz in
connection with the RDC Transaction: (i) repaid a $3,030,000 note related to
the Company's 1996 purchase of the Union Plaza, (ii) paid $600,000 in severance
pay, (iii) paid $100,000 on the Closing and agreed to pay $100,000 on each of
the following two anniversary dates of the Closing for his agreement not to
compete with the Company and for certain consulting services, (iv) granted ten
year options to purchase 300,000 Common Shares at an exercise price of $9.00
per Common Share, (v) canceled formerly issued options to purchase 200,000
Common Shares at $12.00 per Common Share, and (vi) agreed to pay a brokerage
commission of 2% of the sales price of nine designated properties currently
comprising a portion of the Company's portfolio, provided such commissions will
not exceed $600,000 in the aggregate.
On December 30, 1999, the Company and Mr. Slomowitz agreed to terminate
certain of the obligations described above which were incurred in connection
with the RDC Transaction. The principal terms of the agreement included
cancellation of the lease for the Company's prior headquarters in a building
owned by Mr. Slomowitz. Rent expenses for this office space were $119,000,
$112,000 and $104,000 for the years ended December 31, 1999, 1998 and 1997,
respectively. The Company paid Mr. Slomowitz the sum of $329,000 in connection
with the lease cancellation. Additionally, Mr. Slomowitz terminated his options
to acquire 300,000 Common Shares (and an additional option to acquire 1,000
Common Shares which option Mr. Slomowitz had received as a trustee of the
Company) and waived the final $100,000 installment payment due August, 2000.
The Company agreed to indemnify Mr. Slomowitz with respect to certain
contingent liabilities. Mr. Slomowitz retains the right to continue to
guarantee Company debt up to $55,000,000. Mr. Slomowitz also removed all
restrictions on the sale of any properties which he had originally contributed
to the Company, waived his claims for present and future brokerage commissions
and agreed to absorb up to $1,250,000 of tax liabilities resulting in event of
the sale thereof. Finally, Mr. Slomowitz resigned from the Company's Board of
Trustees effective December 8, 1999.
On July 16, 1999 and April 9, 1999, Mr. Slomowitz converted 600,000 and
100,000 Units, respectively, into 600,000 and 100,000 Common Shares.
Affiliated Management Agreements
In connection with the RDC Transaction, the Company acquired certain
property management contracts for three properties in which certain current
shareholders of the Company or their affiliates have ownership interests.
Management fees earned by the Company under these contracts are at rates of
3.25% and 3.5% of collections. Such fees aggregated $639,000 for the year ended
December 31, 1999.
Future Equity Offerings
In connection with the RDC Transaction, the Company agreed that following
the Closing, if the Board of Trustees determines, in the exercise of its
duties, to engage in an offering of preferred stock convertible into Common
Shares, then, upon commencement of any such offering, the Company shall use
commercially reasonable efforts to provide a right of first preference to those
partners of the RDC Funds who are equity owners of the RDC Funds on the date of
the Closing and who have made capital contributions to permit the RDC Funds to
meet their obligations to make certain cash investment at the Closing, to
purchase such convertible preferred stock, on terms and conditions which will
be identical to the offer and sale of any preferred stock to investors
14
<PAGE>
other than such partners, provided that any such rights of first preference
shall be made only and if to the extent permitted by applicable federal, state
and securities laws and that the terms of any such rights of first preference
shall only be in a manner determined fair and equitable to the Company.
Other
During 1999, Marvin J. Levine rendered legal services to the Company.
Battle Fowler LLP, a New York City law firm of which Martin L. Edelman is
Of Counsel, has been counsel to the Company since August 1998.
ANNUAL SHAREHOLDERS REPORT
A copy of the Company's Annual Report to Shareholders is being provided to
each shareholder of the Company along with this Proxy Statement. Upon written
request of any record or beneficial owner of Common Shares of the Company whose
proxy was solicited in connection with the Annual Meeting, the Company will
furnish such owner, without charge, a copy of its Annual Report on Form 10-K
for the year ended December 31, 1999. A request for a copy of such Annual
Report on Form 10-K should be made in writing, addressed to Acadia Realty
Trust, 20 Soundview Marketplace, Port Washington, New York 11050, (516)
767-8830, Attention: Robert Masters.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Trustees does not
know of any matters to be presented at the Annual Meeting other than those
specifically set forth in the Notice of Annual Meeting of Shareholders. If
other proper matters, however, should come before the Annual Meeting or any
adjournment thereof, the persons named in the enclosed proxy intend to vote the
shares represented by them in accordance with their best judgement in respect
to any such matters.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's officers and
trustees and persons who own more than ten percent of the 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 has determined that Messrs.
Bruce, Hogan, Kammerman, Levine, Longua and Slomowitz have each filed two late
reports. In the case of Messrs. Bruce, Kammerman and Slomowitz, two
transactions were reported late; in the case of Mr. Hogan, three transactions
were reported late; and each of Messrs. Levine and Longua reported one
transaction late. The Company believes that all filings required to be made by
the Reporting Persons for the period January 1, 1999 through December 31, 1999
have now been made and that the failure of the Reporting Persons to timely file
all such reports was, in each instance, inadvertent.
SUBMISSION OF SHAREHOLDER PROPOSALS
All proposals of any shareholder of the Company which the holder desires
be presented at the next annual meeting of Shareholders and be included in the
proxy statement and form of proxy prepared for that meeting must be received by
the Company at its principal executive offices no later than January 1, 2001.
Proxies solicited by the Company for the next annual meeting of Shareholders
may confer discretionary authority to vote on any proposals submitted after
March 16, 2001 without a description of such proposals in the proxy materials
for that meeting. All such proposals must be submitted in writing to the
Secretary of the Company at the address appearing on the notice accompanying
this proxy statement.
By order of the Board of Trustees,
/s/ Robert Masters
-----------------------------------
Robert Masters, Secretary
15
<PAGE>
ACADIA REALTY TRUST
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 2000
This Proxy is Solicited on Behalf
of the Board of Trustees
The undersigned hereby constitutes and appoints Ross Dworman, Kenneth F.
Bernstein and Robert Masters, Esq., or any one of them, as proxies, with full
power of substitution, to vote all common shares of beneficial interest of
Acadia Realty Trust (the "Company") which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders of the Company
to be held at the offices of Donaldson, Lufkin & Jenrette, which are located at
277 Park Avenue, New York, NY 10172 at 10:00 o'clock a.m. local time, on May 16,
2000, or at any adjournments or postponements thereof.
THIS PROXY IS ON BEHALF OF THE BOARD OF TRUSTEES.
(Continued and to be signed on reverse side.)
<PAGE>
A [X] Please mark your
votes as in this
example using dark
ink only.
WITHHOLD
FOR AUTHORITY
all nominees to vote for all nominees
listed at right listed at right
1. TO ELECT [ ] [ ]
SEVEN
TRUSTEES
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES AND EACH OF
THE PROPOSALS LISTED BELOW.
Nominees: Ross Dworman
Kenneth F. Bernstein
Martin L. Edelman, Esq.
Marvin J. Levine, Esq.
Lawrence J. Longua
Gregory A. White
Lee S. Wielansky
(2) TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR
THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
FOR AGAINST ABSTAIN
/ / / / / /
(3) TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
FOR AGAINST ABSTAIN
/ / / / / /
(instruction: To withold authority to vote for any individual nominee, strike a
line through the nominee's name in the list at right.)
Date 2000
- ------------------------------------------ --------------------------
Signature
Date 2000
- ------------------------------------------ --------------------------
Signature if held jointly
Please sign exactly as name appears on tne certificate or certificates
representing shares to be voted by this proxy, as shown on the label above. When
signing as executor, administrator, attorney, trustee, or guardian, please give
full title as such. If a corporation, please sign full corporation name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person(s).
