<PAGE>
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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
[X] Definitive Proxy Statement Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
National Golf 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)(4) and 0-11:
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which the transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(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>
NATIONAL GOLF PROPERTIES, INC.
2951 28th Street, Suite 3001
Santa Monica, California 90405
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 13, 2000
----------------
The annual meeting of stockholders (the "Annual Meeting") of National Golf
Properties, Inc., a Maryland corporation (the "Company"), will be held at
SeaCliff Country Club, 6501 Palm Avenue, Huntington Beach, California on
Tuesday, June 13, 2000, at 9:00 a.m., local time, for the following purposes:
1. To elect two directors to serve on the Board of Directors of the
Company until the annual meeting of stockholders in the year 2003 and until
their successors are duly elected and qualified; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The Board of Directors of the Company has fixed the close of business on
May 1, 2000 as the record date for determining the stockholders entitled to
receive notice of, and to vote at, the Annual Meeting and at any and all
adjournments or postponements thereof.
The enclosed proxy is solicited by the Board of Directors of the Company,
which recommends that stockholders vote FOR the election of the director
nominees named therein. Please refer to the attached proxy statement, which
forms a part of this notice and is incorporated herein by reference, for
further information with respect to the business to be transacted at the
Annual Meeting.
Management welcomes your attendance at the Annual Meeting. Whether or not
you expect to attend the Annual Meeting in person, however, you are requested
to complete, sign, date and promptly return the enclosed proxy in the
accompanying postage-paid envelope. Your proxy is revocable and will not
affect your right to vote in person in the event you attend the Annual
Meeting.
By Order of the Board of Directors,
/s/ James M. Stanich
James M. Stanich
President and Director
Santa Monica, California
May 1, 2000
<PAGE>
NATIONAL GOLF PROPERTIES, INC.
----------------
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 13, 2000
----------------
This Proxy Statement is furnished to the stockholders of National Golf
Properties, Inc., a Maryland corporation (the "Company"), in connection with
the solicitation of proxies by the Board of Directors of the Company from the
holders of its outstanding shares of common stock, par value $0.01 per share
("Common Stock"), for use at the annual meeting of stockholders (the "Annual
Meeting") to be held on Tuesday, June 13, 2000, and at any and all
adjournments or postponements thereof, for the following purposes:
1. To elect two directors to serve until the annual meeting of
stockholders in the year 2003 and until their successors are duly elected
and qualified; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
At the close of business on May 1, 2000, the record date for the
determination of stockholders entitled to notice of, and to vote at, the
Annual Meeting, the Company had 13,454,245 shares of Common Stock outstanding.
Each such share of Common Stock is entitled to one vote on all matters
properly brought before the Annual Meeting. Stockholders are not permitted to
cumulate their shares of Common Stock for the purpose of electing directors or
otherwise. Presence at the Annual Meeting, in person or by proxy, of a
majority of the outstanding shares of Common Stock will constitute a quorum
for the transaction of business at the Annual Meeting. The affirmative vote of
holders of a plurality of the shares voting is required to elect new directors
to the Company's Board of Directors. Shares represented by proxies that
reflect abstentions or "broker non-votes" (i.e., shares held by a broker or
nominee which are represented at the Annual Meeting, but with respect to which
such broker or nominee is not empowered to vote on a particular proposal or
proposals) will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. Shares represented by
proxies that reflect abstentions will have no effect on the outcome of the
vote to elect the two new directors.
Unless contrary instructions are indicated on the proxy, all shares of
Common Stock represented by valid proxies received pursuant to this
solicitation (and not revoked before they are voted) will be voted at the
Annual Meeting for the nominees named below for election as directors. With
respect to any other business which may properly come before the Annual
Meeting and be submitted to a vote of stockholders, proxies received by the
Company's Board of Directors will be voted in accordance with the best
judgment of the designated proxy holders. The Company does not presently know
of any other business which may come before the Annual Meeting. A stockholder
may revoke his or her proxy at any time before exercise by delivering to the
Secretary of the Company a written notice of such revocation, by filing with
the Secretary of the Company a duly executed proxy bearing a later date, or by
voting in person at the Annual Meeting.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT, AND IF
GIVEN OR MADE, SUCH INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED AND THE DELIVERY OF THIS PROXY STATEMENT SHALL, UNDER NO
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
<PAGE>
The cost of the solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, directors and officers of the Company,
without receiving any additional compensation, may solicit proxies personally
or by telephone or telegraph. The Company will request brokerage houses, banks,
and other custodians or nominees holding stock in their names for others to
forward proxy materials to their customers or principals who are the beneficial
owners of shares and will reimburse them for their expenses in doing so. The
Company has retained the services of D.F. King & Co., Inc., 77 Water Street,
New York, New York 10005, telephone (212) 269-5550, for a fee of $4,500 plus
out-of-pocket expenses to assist in the solicitation of proxies from brokerage
houses, banks, and other custodians or nominees holding stock in their names
for others.
The principal executive offices of the Company are located at 2951 28th
Street, Suite 3001, Santa Monica, California 90405, telephone (310) 664-4100.
The approximate date on which this proxy statement and form of proxy solicited
on behalf of the Company's Board of Directors will first be sent to the
Company's stockholders is May 4, 2000.
----------------
The date of this proxy statement is May 1, 2000
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors of the Company currently is comprised of seven
members divided into three classes serving staggered terms of three years
each. Pursuant to the Company's Articles of Incorporation and Bylaws, the term
of office of one class of directors expires each year and, at each annual
meeting of stockholders, the successors of the class whose term is expiring in
that year are elected to hold office for a term of three years and until their
successors are duly elected and qualified. The current terms of two directors
expire at the Annual Meeting, the terms of two directors expire at the 2001
annual meeting of stockholders and the terms of three directors expire at the
2002 annual meeting of stockholders.
In the absence of instructions to the contrary, the persons named as proxy
holders in the accompanying proxy intend to vote in favor of the election of
the two nominees designated below, each of whom is currently a director of the
Company, to serve until the 2003 annual meeting of stockholders and until
their respective successors shall have been elected and qualified. The Company
expects that each of the nominees will be available to serve as a director,
but if any such nominee should become unavailable for election, the shares of
Common Stock represented by the proxy may (unless such proxy contains
instructions to the contrary) be voted for such other person or persons as may
be determined by the holders of such proxies. In no event will the proxy be
voted for more than two nominees.
Under the Company's Bylaws, nominations of persons for election to the
Company's Board of Directors, other than those made by or at the direction of
the Company's Board of Directors, may be made at the Annual Meeting only if
pursuant to a timely notice delivered or mailed to the Secretary of the
Company. To be timely, a stockholder's notice must be delivered to or mailed
and received at the Company's principal executive offices not more than 75 nor
less than 50 days prior to the Annual Meeting or, if less than 65 days' notice
or prior public disclosure of the date of the Annual Meeting is given to
stockholders, on the fifteenth day following the day on which such notice of
the date of the Annual Meeting was mailed or such public disclosure was made,
whichever occurs first. A notice of nomination must set forth certain
information as required under the Company's Bylaws.
The Board of Directors of the Company recommends a vote FOR the election of
Richard A. Archer and David G. Price to serve until the annual meeting of
stockholders to be held in the year 2003 and until their respective successors
are duly elected and qualified.
Nominees for Election as Director
Information concerning the nominees for directors of the Company's Board of
Directors whose terms expire at the Annual Meeting is set forth below.
<TABLE>
<CAPTION>
Name Age Present Position with the Company Director Since
---- --- --------------------------------- --------------
<S> <C> <C> <C>
Richard A. Archer..... 72 Director 1993
David G. Price........ 67 Chairman of the Board of Directors 1993
</TABLE>
Richard A. Archer has served as a director of the Company since August 31,
1993. Mr. Archer served as the Chairman of the board of directors of Jardine
Insurance Brokers, Inc. ("Jardine") from 1986 to 1993, and served as Deputy
Chairman of Jardine until December 31, 1995. Mr. Archer is now an independent
consultant. Mr. Archer is also a director of the Hydril Company.
David G. Price has served as the Chairman of the Board of Directors of the
Company since its formation in April 1993. Mr. Price also serves as the
Chairman of the board of directors and Chief Executive Officer of American
Golf Corporation ("AGC") and has served in such capacities since he founded
AGC in 1973. Mr. Price is also a Trustee and the President of the Museum of
Flying in Santa Monica, California.
3
<PAGE>
Directors Continuing in Office
Information concerning the other directors of the Company whose terms do
not expire at the Annual Meeting is set forth below.
<TABLE>
<CAPTION>
Name Age Position with the Company Director Since Term Expires
---- --- ------------------------- -------------- ------------
<S> <C> <C> <C> <C>
John C. Cushman III..... 59 Director 1994 2002
Bruce Karatz............ 54 Director 1993 2001
Charles S. Paul......... 51 Director 1993 2002
Edward R. Sause......... 45 Director 1993 2002
James M. Stanich........ 41 President and Director 1998 2001
</TABLE>
John C. Cushman, III has served as a director of the Company since July 20,
1994. Mr. Cushman has been President and Chief Executive Officer of Cushman
Realty Corporation since 1978. Mr. Cushman also serves as a director of
Meditrust Corporation.
Bruce Karatz has served as a director of the Company since August 31, 1993.
Mr. Karatz has been President, Chief Executive Officer and a director of
Kaufman and Broad Home Corporation ("Kaufman") since 1986 and Chairman of the
board of directors of Kaufman since July 1993. Mr. Karatz is also a director
of Honeywell International, Inc., The Kroger Co. and a Trustee of the RAND
Corporation.
Charles S. Paul has served as a director of the Company since August 31,
1993. Mr. Paul is Chairman and Co-Founder of Sega GameWorks L.L.C. and
Chairman of IFILM Corp. Prior to joining Sega GameWorks L.L.C. in 1996, Mr.
Paul was an Executive Vice President and director of MCA, Inc. from 1989 until
March of 1996 and served as President of MCA Enterprises, Inc. from 1986 until
March of 1996. Mr. Paul is also a director of AMC Entertainment.
Edward R. Sause has served as a director of the Company since April 1993.
Mr. Sause currently is the Executive Vice President--Finance and Corporate
Services of AGC, which position he has held since resigning as an officer of
the Company in April 1997, and a director of AGC. Mr. Sause served as
Executive Vice President, Chief Financial Officer and Secretary of the Company
from April 1993 until April 1997. Prior to the Company's initial public
offering in 1993, Mr. Sause was a director of AGC, a member of AGC's executive
committee and the Senior Vice President and Chief Financial Officer of AGC.
Mr. Sause is also a Trustee and Treasurer of the Museum of Flying and a
director of WISE Senior Services.
James M. Stanich has served as a director and President of the Company
since January 30, 1998. Prior to joining the Company, Mr. Stanich was a
director, Executive Vice President of Corporate Operations and Secretary of
AGC and a member of AGC's executive committee. Mr. Stanich initially joined
AGC in 1990 as corporate counsel responsible for handling legal matters on
acquisitions, and later became General Counsel. Prior to joining AGC, Mr.
Stanich was an attorney with the firm of Sheppard, Mullin, Richter and Hampton
from 1983 to 1990 where he represented both real estate companies and
commercial lenders. Mr. Stanich is a son-in-law of David G. Price. Mr. Stanich
also serves as a director of AGC.
Board of Directors Meetings, Committees and Compensation
The Company's Board of Directors held four meetings during the year ended
December 31, 1999 and also took action with respect to various matters by
unanimous written consent. During that period, no director attended fewer than
100% of the total number of meetings of the Board of Directors and of
committees of the Board of Directors on which such director served.
The Company's Bylaws provide that the majority of its seven member Board of
Directors must consist of directors who are unaffiliated with David G. Price
(the "Independent Directors"). Messrs. Archer, Karatz, and Paul were elected
as Independent Directors by the Company's Board of Directors on August 31,
1993. Mr. Cushman was elected as an Independent Director on July 20, 1994.
4
<PAGE>
In accordance with the Company's Bylaws, transactions involving the Company
and affiliates of David G. Price require the approval of a committee of the
Company's Board of Directors consisting solely of the Independent Directors
(the "Independent Committee"). Such transactions with affiliates of David G.
Price include, without limitation, (i) lease negotiation with respect to owned
golf courses and the enforcement and renegotiation of such leases, (ii) the
selection of operators for acquired golf courses, and (iii) consideration of
the Company's right of first refusal to acquire common limited partnership
units ("OP Units") in National Golf Operating Partnership, L.P., a Delaware
limited partnership (the "Operating Partnership"), through which the Company
owns substantially all of the golf courses and conducts its operations, upon
transfer of OP Units as provided in the Operating Partnership's Agreement of
Limited Partnership (the "OP Partnership Agreement"). Certain other
significant actions of the Company's Board of Directors will require the
approval of a minimum of five directors and certain matters relating to the
Operating Partnership require the approval of holders of a majority of the OP
Units. David G. Price, his former wife Dallas P. Price, and their affiliates
own more than 90% of the OP Units.
The Company currently pays each of its Independent Directors a fee of
$12,000 per year for services as a director plus $1,000 for attendance at each
meeting of the Company's Board of Directors. In addition, the Company
reimburses all directors for reasonable travel expenses incurred in connection
with their duties as directors of the Company. Pursuant to the Company's 1995
Independent Director Equity Participation Plan, each of the Company's
Independent Directors also receives an annual grant of 500 shares of
restricted stock and an option to purchase 2,000 shares of Common Stock. The
shares of restricted stock received by such Independent Directors may not be
sold until the earlier of (i) the fifth anniversary of the date on which such
shares are granted, provided that the recipient of such grant has not
terminated his directorship during such period, and (ii) the recipient's
normal retirement at or after age 65. As of December 31, 1999, Messrs. Archer,
Cushman, Karatz and Paul each hold 4,500 shares of restricted stock, of which
no shares of restricted stock currently may be sold. In addition, as of
December 31, 1999, Messrs. Archer, Cushman, Karatz and Paul each hold options
to purchase 12,000 shares of Common Stock at a range of exercise prices of
$19.75 through $31.50, of which 10,000 shares of Common Stock currently are
exercisable.
The Board of Directors has an Independent Committee, an Executive
Committee, an Audit Committee and a Compensation Committee, each established
on August 10, 1993 under the Company's Bylaws. In addition, the Company
established a Financial Committee in April 1997. The Company does not have a
Nominating Committee.
Independent Committee. As provided in the Company's Bylaws, the Independent
Committee includes only Independent Directors. The Independent Committee was
established to oversee the selection of operators for golf courses acquired in
the future and to approve transactions between the Company and affiliates of
David G. Price that it considers from time to time. Messrs. Archer, Cushman,
Karatz and Paul are the current Independent Committee members. Mr. Archer
serves as the chair of the Independent Committee. The Independent Committee
held no meetings during 1999, but took action with respect to certain matters
by unanimous written consent.
Executive Committee. The Executive Committee has such authority as may be
granted by the Company's Board of Directors, including the power to acquire
and dispose of real property and the power to authorize, on behalf of the full
Board of Directors, the execution of certain contracts and agreements. The
Executive Committee consists of the Chairman of the Board of Directors, the
Chairman of the Independent Committee and an executive officer of the Company.
Messrs. Price, Archer and Stanich are the current members of the Executive
Committee. Mr. Price serves as the chair of the Executive Committee. The
Executive Committee held no meetings during 1999.
Audit Committee. The Audit Committee was established to make
recommendations concerning the engagement of independent public accountants,
review with the independent public accountants the plans and results of the
audit engagement, approve professional services provided by the independent
public accountants, review the independence of the independent public
accountants, consider the range of audit and non-audit fees and review the
adequacy of the Company's internal accounting controls. Messrs. Cushman,
Karatz and Paul are
5
<PAGE>
the current members of the Audit Committee. Mr. Karatz serves as the chair of
the Audit Committee. The Audit Committee held one meeting during 1999.
Compensation Committee. The Compensation Committee is responsible for the
administration of the Company's employee benefit plans. The Compensation
Committee is authorized to determine the persons eligible to participate in
any of the plans, the extent of such participation and the terms and
conditions under which benefits may be vested, received or exercised. The
Compensation Committee also reviews and approves the compensation of the
Company's executive officers and determines the general compensation policy
for the Company. Messrs. Cushman and Paul are the current members of the
Compensation Committee. The Compensation Committee held no meetings during
1999, but took action with respect to certain matters by unanimous written
consent.
Financial Committee. The Financial Committee is responsible for the
oversight of the Company's significant financial matters, including
capitalization, budgeting and financial reporting. Messrs. Sause, Karatz and
Stanich are the current members of the Financial Committee. Mr. Sause serves
as the chair of the Financial Committee. The Financial Committee held no
meetings during 1999.
6
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the names, ages and positions of each of the
Company's executive officers.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
James M. Stanich............ 41 President and Director
Paul W. Major............... 36 Executive Vice President
Neil M. Miller.............. 36 Vice President--Finance
William C. Regan............ 41 Vice President--Controller and Treasurer
Scott S. Thompson........... 43 General Counsel, Chief Leasing Officer,
Vice President and Secretary
</TABLE>
James M. Stanich has served as a director and President of the Company
since January 30, 1998. Biographical information regarding Mr. Stanich is set
forth under "Proposal 1--Election of Directors--Directors Continuing in
Office."
Paul W. Major was appointed in 1998 to serve as the Company's Executive
Vice President. Prior to such appointment, Mr. Major served as the Company's
Senior Vice President--Acquisitions from April 1997 to January 1998. Mr. Major
served as Vice President of Acquisitions of the Company from October 1993 to
April 1997. Prior to joining the Company, Mr. Major was a corporate lawyer at
Latham & Watkins in Los Angeles where he worked extensively on the formation
and initial public offering of the Company.
Neil M. Miller was appointed in 1997 to serve as the Company's Vice
President--Finance. Prior to such appointment, Mr. Miller served as the
Associate General Counsel for the Company from March 1995 to April 1997. Mr.
Miller served as the Company's Director of Acquisitions and Director of
Investor Relations from March 1994 to March 1995. Prior to joining the Company
in March 1994, Mr. Miller was a corporate lawyer with the law firm of
Armstrong, Teasdale, Schlafly & Davis in St. Louis, Missouri.
William C. Regan was appointed in April 1997 to serve as the Company's Vice
President--Controller and Treasurer. Prior to such appointment, Mr. Regan
served as the Company's Controller from August 1993 to April 1997. Prior to
the Company's initial public offering in 1993, Mr. Regan was Corporate
Accounting Manager of AGC. Mr. Regan is a certified public accountant.
Scott S. Thompson has served as the Company's General Counsel and Chief
Leasing Officer since July 1993. In April 1997, Mr. Thompson was appointed to
also serve as Secretary of the Company and, in January 1998, was appointed to
serve as Vice President of the Company. Prior to joining the Company in July
1993, Mr. Thompson was a partner with the law firm of Gilchrist & Rutter where
he specialized in real estate transactions and commercial, industrial and
retail leasing.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the close of business on May 1, 2000, the Company had outstanding
13,454,245 shares of Common Stock. The following table sets forth information
as to the number of shares of Common Stock beneficially owned as of May 1,
2000, by (i) each person known by the Company to be the beneficial owner of
more than 5% of any class of the Company's voting securities, (ii) each
director of the Company, (iii) the Chief Executive Officer and other named
executive officers and (iv) the Company's directors and executive officers as
a group.
<TABLE>
<CAPTION>
Number of
Shares of Percentage of
Common Stock Outstanding
Beneficially Shares of
Name of Beneficial Owner(1) Owned(2) Common Stock
- --------------------------- ------------ -------------
<S> <C> <C>
David G. Price................................. 2,941,290 (3) 19.9%
Dallas P. Price................................ 2,941,089 (4) 19.9%
Richard A. Archer.............................. 28,000 (5) *
John C. Cushman, III........................... 24,500 (5) *
Bruce Karatz................................... 15,100 (5) *
Paul W. Major.................................. 25,113 (6) *
Neil M. Miller................................. 39,500 (7) *
Charles S. Paul................................ 35,500 (5) *
William C. Regan............................... 35,200 (8) *
Edward R. Sause................................ 167,550 (9) 1.2%
James M. Stanich............................... 91,000 (10) *
Scott S. Thompson.............................. 46,000 (11) *
Schwerin Boyle Capital Management, Inc......... 991,500 (12) 7.4%
Oaks Christian High School..................... 1,250,000 (13) 9.3%
All directors and executive officers as a group
(11 persons).................................. 3,448,753 22.9%
</TABLE>
- --------
* Less than 1% of outstanding shares of Common Stock.
(1) Unless otherwise indicated, the address for each named person is c/o
National Golf Properties, Inc., 2951 28th Street, Suite 3001, Santa
Monica, California 90405.
(2) For purposes of this Proxy Statement, beneficial ownership of securities
is defined in accordance with the rules of the Securities and Exchange
Commission and means generally the power to vote or exercise investment
discretion with respect to securities, regardless of any economic
interests therein. Except as otherwise indicated, the Company believes
that the beneficial owners of shares of Common Stock listed below have
sole investment and voting power with respect to such shares, subject to
community property laws where applicable.
(3) Includes 354,938 shares of Common Stock owned of record by the David G.
Price Trust, of which David G. Price is the sole trustee, 1,336,352
shares of Common Stock issuable upon exchange of 1,336,352 OP Units which
Mr. Price may be deemed to beneficially own, and 1,250,000 shares of
Common Stock which Mr. Price may be deemed to beneficially own. Does not
include 2,654,357 shares of Common Stock issuable upon exchange of an
additional 2,654,357 OP Units which may be deemed to be beneficially
owned by Mr. Price and which presently are not entitled to be exchanged
pursuant to the terms of the OP Partnership Agreement. Mr. Price and
Dallas P. Price together can exchange up to 2,672,705 OP Units for an
equal number of shares of Common Stock in any one year period ending
August 18. Exchange of any of the OP Units beneficially owned by Mr.
Price also is subject to the ownership limit contained in the
8
<PAGE>
Company's Articles of Incorporation (the "Ownership Limit"), which
prohibits the actual or constructive ownership of more than 9.8% of the
outstanding shares of Common Stock by any person. Without regard to the
Ownership Limit and the limitation on the exchange of OP Units contained
in the OP Partnership Agreement, all 3,990,709 OP Units beneficially owned
by Mr. Price presently would be exchangeable into 3,990,709 shares of
Common Stock and the total amount and percentage of shares of Common Stock
beneficially owned by Mr. Price as of May 1, 2000 would be 5,595,647 and
32.1%, respectively.
(4) Includes 354,737 shares of Common Stock owned of record by the Dallas P.
Price Trust, a revocable trust, of which Dallas P. Price is the sole
trustee, 1,336,352 shares of Common Stock issuable upon exchange of
1,336,352 OP Units which Mrs. Price may be deemed to beneficially own,
and 1,250,000 shares of Common Stock which Mrs. Price may be deemed to
beneficially own. Does not include 1,742,594 shares of Common Stock
issuable upon exchange of an additional 1,742,594 OP Units which may be
deemed to be beneficially owned by Mrs. Price and which presently are not
entitled to be exchanged pursuant to the terms of the OP Partnership
Agreement. Mrs. Price and David G. Price together can exchange up to
2,672,705 OP Units for an equal number of shares of Common Stock in any
one year period ending August 18. Exchange of any of the OP Units
beneficially owned by Mrs. Price also is subject to the Ownership Limit
contained in the Company's Articles of Incorporation. Without regard to
the Ownership Limit and the limitation on the exchange of OP Units
contained in the OP Partnership Agreement, all 3,078,946 OP Units
beneficially owned by Mrs. Price presently would be exchangeable into
3,078,946 shares of Common Stock and the total amount and percentage of
shares of Common Stock beneficially owned by Mrs. Price as of May 1, 2000
would be 4,683,683 and 28.3%, respectively. Dallas P. Price is the former
wife of David G. Price, Chairman of the Board of Directors of the
Company.
(5) Includes 4,500 shares of Common Stock which include voting rights but
that are subject to forfeiture and various other restrictions and 10,000
shares of Common Stock issuable upon exercise of options that presently
are exercisable and excludes 2,000 shares of Common Stock subject to
options that are not exercisable within 60 days.
(6) Includes 12,000 shares of Common Stock that Mr. Major is entitled to vote
but that are subject to forfeiture upon termination of his employment and
various other restrictions and 5,000 shares of Common Stock issuable upon
the exercise of options that presently are exercisable.
(7) Includes 21,000 shares of Common Stock that Mr. Miller is entitled to
vote but that are subject to forfeiture upon termination of his
employment and various other restrictions and 15,000 shares of Common
Stock issuable upon exercise of options that presently are exercisable.
Does not include 15,000 shares of Common Stock subject to options that
are not exercisable within 60 days.
(8) Includes 20,000 shares of Common Stock that Mr. Regan is entitled to vote
but that are subject to forfeiture upon termination of his employment and
various other restrictions and 11,000 shares of Common Stock issuable
upon exercise of options that presently are exercisable. Does not include
15,000 shares of Common Stock subject to options that are not exercisable
within 60 days.
(9) Includes 8,000 shares of Common Stock that Mr. Sause is entitled to vote
but that are subject to forfeiture upon termination of his employment
with AGC and various other restrictions, 55,550 shares of Common Stock
that are presently issuable upon exchange of all of the 55,550 OP Units
owned by Mr. Sause, and 80,000 shares of Common Stock issuable upon
exercise of options that presently are exercisable.
(10) Includes 30,000 shares of Common Stock that Mr. Stanich is entitled to
vote but that are subject to forfeiture upon termination of his
employment and various other restrictions and 45,000 shares of Common
Stock issuable upon exercise of options that presently are exercisable.
Does not include 25,000 shares of Common Stock subject to options that
are not exercisable within 60 days.
(11) Includes 21,000 shares of Common Stock that Mr. Thompson is entitled to
vote but that are subject to forfeiture upon termination of employment
and various other restrictions and 20,000 shares of Common Stock issuable
upon exercise of options that presently are exercisable. Does not include
15,000 shares of Common Stock subject to options that are not exercisable
within 60 days.
9
<PAGE>
(12) Based on information in Amendment No. 3 to Schedule 13G filed with the
Securities and Exchange Commission on February 10, 2000 by Schwerin Boyle
Capital Management, Inc., a Massachusetts corporation ("Schwerin"). As of
December 31, 1999, Schwerin had (i) sole voting power with respect to
75,000 shares of Common Stock and (ii) sole dispositive power with
respect to 991,500 shares of Common Stock. The address for Schwerin is
1391 Main Street, Springfield, Massachusetts 01103.
(13) David G. Price and Dallas P. Price are each members of the Oaks Christian
High School board of trustees, which is comprised of three persons. The
shares beneficially owned by Oaks Christian High School have been pledged
for the joint benefit of City National Bank, a California banking
corporation, and UnionBank of California, N.A.
10
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation of
the Company's executive officers (the "Named Executive Officers") for the
fiscal years ended December 31, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------------------
Awards Payouts
----------------------- ----------
Annual Securities
Compensation Restricted Underlying
Name and Principal ----------------- Stock Options/SARs LTIP All Other
Position Year Salary Bonus Awards(1) (#) Payouts(2) Compensation(3)
------------------ ---- -------- -------- ---------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
James M. Stanich(4)..... 1999 $254,000 $100,000 (5) -- $231,660 $2,400
President and Director 1998 $229,167 $100,000 (5) -- $106,710(6) $2,400
Paul W. Major........... 1999 $133,420 $ 75,000 (5) $193,743 $2,400
Executive Vice
President 1998 $131,320 $ 75,000 (5) -- $301,963 $2,400(7)
1997 $129,125 $ 87,500 (5) -- $154,450 $2,400
Neil M. Miller.......... 1999 $120,000 $ 58,000 (5) $ 96,871 $2,400
Vice President--Finance 1998 $101,700 $ 47,289 (5) -- $109,559 $2,400
1997 $100,000 $ 59,500 (5) -- $ 59,980 $2,400
William C. Regan........ 1999 $120,000 $ 58,000 (5) $104,616 $2,400
Vice President--
Controller 1998 $101,700 $ 35,595 (5) -- $119,960 $2,400
and Treasurer 1997 $100,000 $ 35,000 (5) -- $ 76,569 $2,400
Scott S. Thompson....... 1999 $175,000 $ 77,500 (5) $ 83,033 $2,400
General Counsel, 1998 $156,618 $ 25,000 (5) -- $200,618 $2,400
Chief Leasing Officer, 1997 $154,000 $ 40,000 (5) -- $151,700 $2,400
Vice President and
Secretary
</TABLE>
- -------
(1) The aggregate number and value of shares of restricted stock of the
Company, all of which shares are designated as long-term incentive awards,
held by each Named Executive Officer as of December 31, 1999 were as
follows: Mr. Stanich, 40,000 shares valued at $790,000; Mr. Major, 19,000
shares valued at $375,250; Mr. Miller, 28,500 shares valued at $562,875;
Mr. Regan, 26,500 shares valued at $523,375; and Mr. Thompson,
28,000 shares valued at $553,000. Such shares represent the unvested
portion of restricted stock awarded to Messrs. Stanich, Major, Miller,
Regan and Thompson. All such shares vest on a pro-rata basis over a five
year period upon the Company's satisfaction of certain financial
performance targets, and unvested shares are subject to continued
employment. During the period in which any restrictions apply, holders of
restricted stock are entitled to receive all dividends or other
distributions paid with respect to such stock.
(2) Represents the market value of the shares of restricted stock of the
Company that vested in 1999, 1998 and 1997 as of the vesting date.
(3) Represents matching contributions made by the Company to its 401(k)
Retirement Plan.
(4) James M. Stanich has served as a director and President of the Company
since January 30, 1998.
(5) Restricted stock awards are subject to performance requirements and are
designated as long-term incentive awards.
(6) The Company established the 1993 Stock Incentive Plan, under which
executive officers and other key employees of the Company and AGC may be
granted restricted stock of the Company and options to purchase shares of
Common Stock. In 1993, while employed by AGC, Mr. Stanich was granted
20,000 shares of restricted stock of the Company and options to purchase
20,000 shares of Common Stock. The market value of the shares of
restricted stock of the Company that vested in 1997 as of the vesting date
was $121,710.
11
<PAGE>
(7) Does not include $750,000 received by Mr. Major as consideration for
cancelling one-third of the options to purchase shares of AGC common stock
granted to him by David G. Price as compensation for services rendered by
Mr. Major to the Operating Partnership. Mr. Price paid the $750,000 to the
Operating Partnership and, of such amount, Mr. Major received $30,000 in
cash and elected to defer $720,000 pursuant to the terms of the Company's
Deferred Compensation Plan. See "Certain Relationships and Related
Transactions."
Option Grants During Fiscal Year Ended December 31, 1999
The following table sets forth certain information regarding grants of
stock options made to the Named Executive Officers during the fiscal year
ended December 31, 1999:
<TABLE>
<CAPTION>
Individual Grants(1)
---------------------------------------------
Potential
% of Total Realizable Value
Options at Assumed Annual
Granted to Rates of Stock
Number of Employees in Price
Shares Fiscal Year Appreciation for
Underlying Ended Exercise Option Term
Options December 31, Price Expiration -----------------
Name Granted (#) 1999 Per Share Date 5% ($) 10% ($)
- ---- ----------- ------------ --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Neil M. Miller.......... 20,000 21% $27.4178 01-01-09 $344,858 $873,938
William C. Regan........ 20,000 21% $27.4178 01-01-09 $344,858 $873,938
Scott S. Thompson....... 20,000 21% $27.4178 01-01-09 $344,858 $873,938
</TABLE>
- --------
(1) All options granted in 1999 become exercisable in four equal installments
beginning on January 1, 2000 and have a term of ten years. The option
exercise price is equal to the average fair market value of the Common
Stock during the month of January 1999 on the date of the grant.
Aggregated Option Exercises and Fiscal Year-End Option Value Table
The following table provides information related to the 1999 fiscal year-
end value of unexercised options.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-money
Options/SARs Options/SARs
Shares at FY-End at FY-End
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable(1)
- ---- ----------- -------- ------------- ----------------
<S> <C> <C> <C> <C>
James M. Stanich............ -- -- 32,500/37,500 -- /--
Paul W. Major............... -- -- 5,000/ -- $6,250/--
Neil M. Miller.............. -- -- 10,000/20,000 $6,250/--
William C. Regan............ -- -- 6,000/20,000 -- /--
Scott S. Thompson........... -- -- 15,000/20,000 -- /--
</TABLE>
- --------
(1) Calculated on the basis of the closing price per share of the Common Stock
on the New York Stock Exchange of $19.75 on December 31, 1999, the last
trading day in fiscal year 1999.
12
<PAGE>
Long-Term Incentive Plans--Awards Made in Last Fiscal Year
The following table provides information related to grants of shares of
restricted stock, all of which shares are designated as long-term incentive
awards, to each of the Named Executive Officers during the year ended December
31, 1999.
<TABLE>
<CAPTION>
Number of Performance
Shares, or Other
Units or Period
Other Until
Name Rights(1) Maturation
- ---- --------- -----------
<S> <C> <C>
Neil M. Miller............................................ 20,000 (2)
William C. Regan.......................................... 20,000 (2)
Scott S. Thompson......................................... 20,000 (2)
</TABLE>
- --------
(1) Represents shares of restricted stock of the Company granted on January 1,
1999 pursuant to the Company's 1997 Equity Participation Plan.
(2) Twenty percent of such shares vest each January 1 if the Company's funds
from operations for the preceding fiscal year exceed the funds from
operations for the prior year by at least six percent. Vesting of
restricted shares also is subject to the continued employment of the
holder of such shares.
Employment Contracts
On January 15, 1997, the Company entered into employment agreements with
Paul W. Major, Neil M. Miller, William C. Regan and Scott S. Thompson. Each
agreement provides for an initial term of three years which shall be
automatically extended for an additional year on the expiration of the initial
term and each anniversary thereafter unless earlier terminated pursuant to the
terms of each agreement. Each of the agreements provides for a base salary for
the twelve calendar months beginning January 1, 1997 at an annual rate of
$129,125 for Mr. Major; $100,000 for Mr. Miller; $100,000 for Mr. Regan; and
$154,000 for Mr. Thompson. The base salary amounts will be adjusted annually
to reflect increases in the Consumer Price Index ("CPI").
Upon entering into the employment agreements, Messrs. Major, Miller, Regan
and Thompson received initial grants of 25,000, 7,500, 7,500 and 10,000 shares
of restricted stock, respectively. Each of the employment agreements provides
for payment of bonus compensation upon the achievement of certain performance
objectives set forth in such agreements or determined by the Compensation
Committee. Each of the agreements also provides for additional stock options
and restricted stock to be awarded at the discretion of the Compensation
Committee.
On January 30, 1998, the Company entered into an employment agreement with
James M. Stanich, pursuant to which Mr. Stanich was granted an annual base
salary of $250,000 and an annual bonus of 40% of his base salary. In addition,
the Company issued to Mr. Stanich 50,000 shares of restricted stock and 50,000
options to purchase shares of Common Stock. The base salary amount will be
adjusted annually to reflect increases in the CPI.
Effective January 1, 1999, the Company extended the initial term of each
employment agreement with Messrs. Miller, Regan and Thompson for an additional
three years until December 31, 2002. As part of the employment extensions, the
base salaries have been increased to an annual rate of $120,000 for Mr.
Miller; $120,000 for Mr. Regan; and $175,000 for Mr. Thompson. In addition,
each of Messrs. Miller, Regan and Thompson was granted 20,000 shares of
restricted stock and options to purchase 20,000 shares of Common Stock.
Each employment agreement includes provisions restricting the officers from
competing, directly or indirectly, with the Company or the Operating
Partnership during employment and, except in certain circumstances, for one
year after termination of employment. Each of the employment agreements
provides for certain severance payments in the event of termination by the
Company without cause, or by the employee with good reason.
13
<PAGE>
The Company generally will have cause to terminate the employment of
Messrs. Stanich, Major, Miller, Regan and Thompson if they (1) engage in acts
or omissions with respect to the Company which constitute intentional
misconduct or a knowing violation of law; (2) personally receive a benefit in
money, property or services from the Company or from another person dealing
with the Company in violation of law; (3) breach their non-competition
covenant with the Company; (4) breach their duty of loyalty to the Company;
(5) engage in gross negligence in the performance of their duties; or (6)
frequently and repeatedly fail to perform services that have been reasonably
requested of them by the Company's Board of Directors and which are consistent
with the terms of the employment agreements.
Messrs. Stanich, Major, Miller, Regan and Thompson generally will have good
reason to terminate their employment with the Company in the event of any
reduction in their compensation without their consent, any material breach or
default by the Company under the employment agreements or any substantial
diminution in their respective duties.
The Board of Directors of the Company approved a resolution that commencing
on November 1, 1999, David G. Price shall be paid an annual salary of $350,000
by the Company for the continued performance of his duties as Chairman of the
Board of Directors.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is comprised of Messrs. Cushman and Paul,
neither of whom is or has been an officer or employee of the Company or any of
its subsidiaries. For a description of the background of each of these
individuals, see "Proposal 1--Election of Directors--Directors Continuing in
Office."
14
<PAGE>
BOARD OF DIRECTORS COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report and the Stock Performance Graph shall be deemed not to
be incorporated by reference by any general statement incorporating by
reference this proxy statement into any filings under the Securities Act of
1933, as amended (the "Securities Act"), or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), except to the extent that the Company
specifically incorporates this information by reference and shall not
otherwise be deemed filed under such Acts.
Compensation and benefit practices of the Company are established and
governed by the Compensation Committee, which is made up of two Independent
Directors. The Compensation Committee is chartered to establish the general
compensation policy of the Company, to review and approve compensation of the
executive officers of the Company and to administer all of the Company's
employee benefit plans. The Compensation Committee reviews the Company's
overall compensation program to assure that it (i) is reasonable and
consistent with competitive practices, (ii) adequately recognizes performance,
and (iii) meets the Company's overall compensation and business objectives.
Compensation Philosophy
The primary focus of the Company's compensation program is to create value
for stockholders. The Compensation Committee attempts to promote desired
financial and operational results by attracting, motivating and assisting in
the retention of key employees with outstanding ability. In addition, the
compensation program is designed to promote teamwork, initiative and
resourcefulness on the part of key employees whose performance and
responsibilities directly affect the Company's profits. In this regard, the
compensation program is designed to balance short and long-term incentive
compensation to achieve desired results and above all to pay for performance.
The Company is not allowed a deduction for certain compensation paid to
certain executive officers in excess of $1 million, except to the extent such
excess constitutes performance-based compensation. The Compensation Committee
considers its primary goal to design compensation strategies that further the
best interests of the Company and its stockholders. To the extent not
inconsistent with that goal, the Compensation Committee will attempt where
practical to use compensation policies and programs that preserve the
deductibility of compensation expenses.
Compensation Mix
The Company's executive compensation is based on three components designed
in each case to accomplish the Company's compensation philosophy.
Base Salary. Salaries for executives are reviewed by the Compensation
Committee on an annual basis and may be increased based upon an assessment of
the individual's contributions to the asset and financial growth of the
Company as well as competitive pay levels. The Compensation Committee
generally targets base salary levels at the market median of salaries paid by
other publicly-traded real estate investment trusts ("REIT"), with a desire to
reward excellent results with incentive compensation consistent with the
Company's pay-for-performance philosophy.
Base salary levels for the Company's executive officers for 1999
approximated the market median. The Compensation Committee has reviewed the
base salary for each of the executive officers for 1999 and believes that such
compensation is reasonable in view of the Company's performance and the
contribution of those officers to that performance. The increase in base
salary experienced by Mr. Major in 1999 represented a cost-of-living increase
provided for in his employment agreement.
Annual Cash Incentive Awards. Annual cash bonus incentive awards generally
are designed to protect stockholder interests by establishing a performance
target (the "Performance Target") which must be satisfied
15
<PAGE>
before any awards are paid to executive officers. The Performance Target is
based on increases in funds from operations and, in the case of the Company's
President, the acquisitions made by the Company. To establish the Performance
Target, the Compensation Committee sets goals for such criteria at the
beginning of each year at a level considered to provide stockholders with an
acceptable rate of return. For the 1999 Performance Target, these goals were
adjusted upward from the goals set in the previous year to reflect expected
performance of the Company's golf course portfolio. In addition to satisfying
the Performance Target, bonus awards also are based on personal performance
measured by the extent to which personal goals are achieved.
A target award is established for each officer based on the level of his or
her position and on competitive practices. The Compensation Committee approves
each officer's target award. The target award is expressed as a percentage of
salary and as a corresponding dollar amount. No award can exceed 50% of an
officer's base salary. The Performance Target approved by the Compensation
Committee was achieved in 1999. See "Executive Compensation--Summary
Compensation Table."
Stock Options and Restricted Stock. The Compensation Committee may grant
stock options, restricted common stock and performance awards to executives
and other key employees of the Company pursuant to the 1997 Equity
Participation Plan. In determining the grants of stock options, restricted
stock and performance awards, the Compensation Committee takes into account,
among other things, the competitive practice in the REIT industry, the
respective scope of responsibility and the anticipated performance
requirements and contributions to the Company of each proposed award
recipient. Stock options, restricted stock and performance awards are designed
to align the interest of executives with those of the stockholders. The
Compensation Committee believes that significant equity interests in the
Company held by the Company's management serve to retain and motivate
management.
President. James M. Stanich was appointed on January 30, 1998 as President
of the Company. The Company entered into an employment agreement with Mr.
Stanich pursuant to which the Company granted Mr. Stanich an annual base
salary of $250,000 and an annual bonus of 40% of his base salary. In addition,
the Company issued Mr. Stanich 50,000 shares of the Company's restricted stock
and 50,000 options to purchase shares of the Common Stock. The base salary
amount will be adjusted annually to reflect increases in the CPI.
Compensation Committee
John C. Cushman, III
Charles S. Paul
Santa Monica, California
May 1, 2000
16
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below compares cumulative total return of the Company, the S&P 500
Index and the NAREIT Equity REIT Total Return Index from December 31, 1994 to
December 31, 1999. The comparison assumes $100.00 was invested on December 31,
1994 in the Common Stock and each of the foregoing indices and assumes
reinvestment of dividends before consideration of income taxes.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NATIONAL S&P
Measurement Period GOLF 500 NAREIT
(Fiscal Year Covered) PROPERTIES INDEX EQUITY
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 1994 $100.00 $100.00 $100.00
FYE 1995 $111.75 $137.68 $115.27
FYE 1996 $164.74 $159.17 $155.92
FYE 1997 $180.67 $225.61 $187.51
FYE 1998 $168.71 $290.09 $154.69
FYE 1999 $123.99 $361.13 $147.54
</TABLE>
The stock performance depicted in the above graph is not necessarily
indicative of future performance. The Stock Performance Graph shall not be
deemed to be "soliciting material" or to be "filed" with the Securities and
Exchange Commission or subject to Regulations 14A or 14C or to the liabilities
of Section 18 of the Exchange Act, except to the extent that the Company
specifically requests that such information be treated as soliciting material
or specifically incorporates them by reference into a filing under the
Securities Act or the Exchange Act.
17
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1999, the Operating Partnership entered into 11 leases with AGC (an
affiliate of David G. Price, the Chairman of the Board of Directors of the
Company) with respect to five golf courses and certain of the Acquired
Cobblestone Courses, as defined below. Such leases are in addition to the 90
existing leases between the Operating Partnership or the Company and AGC that
were entered into in prior years. In 1999, the aggregate annual base rent
payable (on an annualized basis) under the 11 new leases and all leases with
AGC was approximately $18.4 million and $101.6 million, respectively. The
terms of all leases between the Operating Partnership and AGC are
substantially similar (other than the amount of rent payments thereunder), and
pursuant to the Company's Bylaws, the terms of all such leases were approved
by the Independent Committee prior to entering into the leases. Mr. Thompson,
the Company's General Counsel and Chief Leasing Officer, who has no prior
affiliation with David G. Price or his affiliates (including AGC), assists the
Independent Committee with respect to certain potential conflicts of interest
between the Company and affiliates of David G. Price, including the
negotiation, enforcement and renegotiation of all leases. David G. Price owns
approximately 35.5% of the outstanding common stock of AGC. James M. Stanich,
the President and a director of the Company and a director of AGC, together
with his wife, owns approximately 4.0% of the outstanding common stock of AGC.
On March 31, 1999, the Company purchased fee interests in 15 golf courses,
long-term leasehold interests in two golf courses and leasehold rights in
three golf courses and made a participating mortgage loan secured by an
additional golf course (collectively, the "Acquired Cobblestone Courses")
previously owned or leased by subsidiaries of Meditrust Corporation and
Meditrust Operating Company (collectively, "Meditrust") comprising the
"Cobblestone Golf Group" for an aggregate initial investment of approximately
$186.5 million, which investment was financed by approximately $180.8 million
of cash and approximately $5.7 million of assumed notes. The Company's
acquisition of interests in these golf courses was part of a larger
transaction in which a subsidiary of AGC and a subsidiary of ClubCorp
International ("ClubCorp") formed Golf Acquisitions, L.L.C., a new limited
liability company ("Golf Acquisitions"), to purchase from Meditrust the
subsidiaries comprising the Cobblestone Golf Group. Golf Acquisitions closed
this purchase on March 31, 1999, and immediately thereafter sold interests in
23 golf courses to subsidiaries of ClubCorp, sold interests in the Acquired
Cobblestone Courses to the Company and sold to AGC short-term interests in
three golf course facilities and a portion of the personal property assets
related to some of the Acquired Cobblestone Courses. The Company financed the
cash portion of the aggregate initial investment of the Acquired Cobblestone
Courses with $169 million in borrowings under its credit facility. Three of
the Acquired Cobblestone Courses are leasehold rights in the golf courses at
Carmel Mountain Ranch Country Club and Sweetwater Country Club, courses in
which the Company already owned the fee interest and had previously leased
such properties to a subsidiary of Meditrust. John C. Cushman, III, a director
on the Company's Board of Directors and a member of the Company's Independent
Committee, Audit Committee and Compensation Committee, is also a director of
Meditrust Corporation. The transaction was approved by the Company's Board of
Directors. However, Mr. Cushman abstained from any voting or actions regarding
the review or approval of the transaction and from participating in any
negotiations regarding the transaction.
Concurrently with closing its purchase of the Acquired Cobblestone Courses,
the Company entered into agreements to lease or sublease 18 of the Acquired
Cobblestone Courses to AGC and two of the Acquired Cobblestone Courses to Golf
Enterprises, Inc. The transaction was approved by the Company's Board of
Directors, with the abstention of Mr. Cushman. AGC also entered into a
separate agreement to lease the golf course which secures the Company's
participating mortgage loan to a subsidiary of Golf Acquisitions.
The Company leases approximately 5,100 square feet of commercial office
space for use as its corporate headquarters from 2951 Company LLC, a
California limited liability company of which David G. Price is a majority
owner and James M. Stanich and his wife are minority owners. The term of such
lease is 12 years commencing December 16, 1996, and provides for monthly
rental payments of approximately $9,500 for the first five years of the term,
followed by a higher fixed monthly rental payment for the remaining seven
years of the term. The Company believes that the terms of this lease,
including the rental payments, are on market terms.
18
<PAGE>
Edward R. Sause entered into a consulting agreement with the Company on
April 30, 1997 following his resignation as an officer of the Company.
Pursuant to such agreement, Mr. Sause agreed to provide consulting services on
an as-needed basis to the Company in connection with capital raising,
budgeting, financial reporting, acquisitions, corporate governance and
strategic planning. Mr. Sause is paid $200.00 per hour for the consulting
services he provides pursuant to such agreement. Mr. Sause has not been paid
any consideration under such agreement, but is owed approximately $50,000,
$52,200 and $43,400 for consulting services rendered in 1999, 1998 and 1997,
respectively. Upon resigning as an officer of the Company in April 1997, Mr.
Sause became an officer and director of AGC.
On April 30, 1997, David G. Price and Paul W. Major entered into an
agreement pursuant to which Mr. Price granted to Mr. Major an option to
purchase shares of AGC's common stock owned by Mr. Price which, subject to
certain vesting requirements (including full vesting in the event of a sale or
certain other corporate transactions involving AGC), enables Mr. Major to
receive shares of AGC's common stock as compensation for services rendered by
Mr. Major to the Operating Partnership. In January 1998, Mr. Price and Mr.
Major agreed to cancel one-third of such options in exchange for the payment
by Mr. Price of $750,000 to the Operating Partnership, of which amount Mr.
Major received $30,000 in cash and elected to defer $720,000 pursuant to the
terms of the Company's Deferred Compensation Plan.
On March 31, 2000, the Independent Directors waived the requirement that
AGC post and maintain an irrevocable letter of credit in an amount equal to
approximately $13.6 million, representing six months of base rent under the
leases at the time of the initial public offering in 1993.
James M. Stanich is employed and compensated by both the Operating
Partnership and the Company. The Company believes that the allocation of his
compensation as between the Company and the Operating Partnership reflects the
services provided by him with respect to each entity.
The Company and the Operating Partnership have entered into a services
agreement pursuant to which the Operating Partnership provides the Company
with administrative, accounting and other services relating to the operations
and administration of the Company at a rate equal to the cost (including
allocable overhead) to the Operating Partnership of providing such services
plus 15% of such costs.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities to file with the Securities and
Exchange Commission and the New York Stock Exchange initial reports of
ownership and reports of changes in ownership of the Common Stock and other
equity securities of the Company. Officers, directors and greater than ten
percent stockholders are required by the regulations of the Securities and
Exchange Commission to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1999, all of
the Company's officers, directors and greater than ten percent beneficial
owners complied with all applicable Section 16(a) filing requirements, except
for John C. Cushman, III who filed his Form 5 for the year ended December 31,
1999 approximately two weeks late.
19
<PAGE>
APPOINTMENT OF AUDITORS
PricewaterhouseCoopers LLP audited the Company's financial statements for
the year ended December 31, 1999 and has been the Company's auditors since the
Company's formation in 1993. The Audit Committee of the Company's Board of
Directors has selected the firm of PricewaterhouseCoopers LLP as independent
accountants for the Company for the fiscal year ending December 31, 2000. A
representative of PricewaterhouseCoopers LLP is expected to be present at the
Annual Meeting with an opportunity to make a statement if he desires to do so,
and such representative is expected to be available to respond to appropriate
questions.
STOCKHOLDER PROPOSALS
The proxy rules adopted by the Securities and Exchange Commission provide
that certain proposals by the Company's stockholders must be included in the
proxy statement for the Company's annual meeting of stockholders. For a
proposal to be considered for inclusion in next year's proxy statement, it
must be received by the Company no later than January 11, 2001.
The Company's stockholders also may bring business for consideration at
next year's annual meeting of the stockholders of the Company (the "2001
Meeting"), in accordance with the procedures set forth below. In addition to
any other applicable requirements, the Company's Bylaws provide that in order
for business to be properly brought before the 2001 Meeting by a stockholder,
the stockholder must give notice of such business in writing to the Secretary
of the Company. The notice must be delivered to or mailed and received at the
principal executive offices of the Company, not less than fifty days nor more
than seventy-five days prior to the 2001 Meeting; provided, however, that in
the event that less than sixty-five days' notice or prior public disclosure of
the date of the 2001 Meeting is given or made to stockholders, notice by the
stockholder must be received not later than the close of business on the
fifteenth day following the day on which such notice of the date of the 2001
Meeting was mailed or such public disclosure was made, whichever occurs first.
A stockholder's notice to the Secretary shall set forth (a) as to each matter
the stockholder proposes to bring before the 2001 Meeting (i) a brief
description of the business desired to be brought before such meeting and
their reasons for conducting such business at such meeting, (ii) the name and
record address of the stockholder proposing such business, (iii) the class,
series and number of shares of the Company which are beneficially owned by the
stockholder, and (iv) any material interest of the stockholder in such
business and (b) as to the stockholder giving the notice (i) the name and
record address of the stockholder and (ii) the class and number of shares of
capital stock of the Company which are beneficially owned by the stockholder.
Any stockholder proposal not meeting these requirements will not be brought
before the 2001 Meeting.
OTHER MATTERS
The Board of Directors of the Company knows of no matters to be presented
at the Annual Meeting other than those described in this Proxy Statement.
Other business may properly come before the Annual Meeting, or any adjournment
or postponement thereof, and in that event it is the intention of the persons
named in the accompanying proxy to vote in accordance with their judgment on
such matters.
The Company's Annual Report to Stockholders, including the Company's
audited financial statements for the year ended December 31, 1999, is being
mailed to all stockholders of record. THE COMPANY WILL PROVIDE WITHOUT CHARGE
TO ANY PERSON SOLICITED HEREBY, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH
PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING
FINANCIAL STATEMENTS OF AGC, FOR THE YEAR ENDED DECEMBER 31, 1999 FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. SUCH REQUESTS SHOULD BE DIRECTED TO
THE INVESTOR RELATIONS DEPARTMENT OF THE COMPANY, AT 2951 28TH STREET, SUITE
3001, SANTA MONICA, CALIFORNIA 90405.
20
<PAGE>
ALL STOCKHOLDERS ARE URGED TO IMMEDIATELY COMPLETE, SIGN AND RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
/s/ James M. Stanich
James M. Stanich
President and Director
Santa Monica, California
May 1, 2000
21
<PAGE>
PROXY
NATIONAL GOLF PROPERTIES, INC.
Annual Meeting of Stockholders--June 13, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of NATIONAL GOLF PROPERTIES, INC., a Maryland
corporation ("NGP"), acknowledges receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders dated May 1, 2000 and the Proxy
Statement dated May 1, 2000 (the "Proxy Statement") and, revoking all prior
proxies, does hereby nominate, constitute and appoint James M. Stanich and
Scott S. Thompson, or either of them, as the true and lawful proxies, agents
and attorneys-in-fact of the undersigned, with full power of substitution to
vote all the shares of common stock, par value $0.01 per share, of NGP, held
of record by the undersigned on NGP's books at the close of business on May
1, 2000, at the Annual Meeting of Stockholders to be held at SeaCliff Country
Club, 6501 Palm Avenue, Huntington Beach, California on Tuesday, June 13,
2000, at 9:00 a.m., local time, or at any adjournment or postponement thereof
(the "Annual Meeting"), and otherwise to represent the undersigned at the
Annual Meeting with all the powers which would be possessed by the
undersigned if personally present at the Annual Meeting.
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS INDICATED,
IT WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR LISTED IN THE PROXY STATEMENT.
(Continued and to be signed on other side)
<PAGE>
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Please mark [X]
your vote
as in this
example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NAMED
DIRECTOR NOMINEES.
1. Election of Directors to vote for the following director nominees: Richard
A. Archer and David G. Price.
Instruction: To withhold authority to vote for any director nominee, write
the director nominee's name on the space provided:
FOR (except as
indicated
to the
contrary) WITHHOLD ABSTAIN
[_] [_] [_]
___________________________________________
2. In their discretion, to vote on any other matter that may properly come
before the Annual Meeting or at any adjournment or postponement thereof.
[PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED ENVELOPE
AS SOON AS POSSIBLE TO ENSURE RECEIPT PRIOR TO THE ANNUAL MEETING. THE
ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.]
If no contrary instruction is indicated above, this
proxy will be voted FOR election of the named
director nominees.
The undersigned hereby acknowledges receipt of the
accompanying Notice of Annual Meeting of
Stockholders dated May 1, 2000 and Proxy Statement.
I PLAN TO ATTEND THE ANNUAL MEETING. [_]
Signature(s) ____________________________ Date _______________________ , 2000
Note: Please sign name exactly as your name (or names) appears printed in the
space above. When signing as attorney, executor, administrator, trustee
or guardian, please give full title. If more than one trustee, all should
sign. All joint owners must sign.
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