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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _________
Commission file number: 1-12110
CAMDEN PROPERTY TRUST
(Exact Name of Registrant as Specified in Its Charter)
TEXAS 76-6088377
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3 GREENWAY PLAZA, SUITE 1300
HOUSTON, TEXAS 77046
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 354-2500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Shares of Beneficial Interest,
$.01 par value New York Stock Exchange
7.33% Convertible Subordinated
Debentures due 2001 New York Stock Exchange
$2.25 Series A Cumulative Convertible
Preferred Shares, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
The aggregate market value of voting shares of beneficial interest held by
non-affiliates of the registrant was $975,000,458 at March 1, 2000.
The number of common shares of beneficial interest outstanding at March 1, 2000
was 38,565,696.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Shareholders for the year ended
December 31, 1999 are incorporated by reference in Parts I, II and IV.
Portions of the registrant's Proxy Statement in connection with its Annual
Meeting of Shareholders to be held May 4, 2000 are incorporated by reference in
Part III.
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PART I
ITEM 1. BUSINESS
INTRODUCTION
Camden Property Trust is a real estate investment trust that owns,
develops, constructs, and manages multifamily apartment communities in the
Southwest, Southeast, Midwest and Western regions of the United States. As of
December 31, 1999, we owned interests in and operated 153 multifamily properties
containing 53,311 apartment homes located in nine states. These properties had a
weighted average occupancy rate of 93% for the year ended December 31, 1999.
This represents the average occupancy for all our properties in 1999 weighted by
the number of apartment homes in each property. Additionally, six of our
multifamily properties containing 2,474 apartment homes were under development
at December 31, 1999. We also have several sites which we intend to develop into
multifamily apartment communities.
Acquisition of Oasis Residential, Inc. On April 8, 1998, we acquired,
through a tax-free merger, Oasis Residential, Inc., a publicly traded Las
Vegas-based multifamily REIT. Through this acquisition, we acquired 52 completed
multifamily properties and 15,514 apartment homes at the date of acquisition.
Each share of Oasis common stock outstanding on April 8, 1998 was exchanged for
0.759 of a Camden common share. Each share of Oasis Series A cumulative
convertible preferred stock outstanding on April 8, 1998 was exchanged for one
Camden Series A cumulative convertible preferred share with terms and conditions
comparable to the Oasis preferred stock. We issued 12.4 million common shares
and 4.2 million preferred shares in exchange for the outstanding Oasis common
and preferred stock, respectively. We assumed approximately $484 million of
Oasis debt, at fair value, in the merger.
In connection with the merger with Oasis, on June 30, 1998, we completed a
transaction in which Camden USA, Inc., one of our wholly owned subsidiaries, and
TMT-Nevada, L.L.C., a Delaware limited liability company, formed Sierra-Nevada
Multifamily Investments, LLC. We entered into this transaction to reduce our
market risk in the Las Vegas area. TMT-Nevada holds an 80% interest in
Sierra-Nevada and Camden USA holds the remaining 20% interest.
In the above transaction, we transferred to Sierra-Nevada 19 apartment
communities containing 5,119 apartment homes for an aggregate of $248 million.
Prior to the merger, Oasis owned 100% of each of these communities. In the
merger, Camden USA acquired these communities. As a result, after the merger and
prior to the Sierra-Nevada transaction, Camden USA owned 100% of each of these
19 properties which are located in Las Vegas, Nevada. This transaction was
funded with capital invested by the members of Sierra-Nevada, the assumption of
$9.9 million of existing nonrecourse indebtedness, the issuance of 17
nonrecourse cross collateralized and cross defaulted loans totaling $180 million
and the issuance of two nonrecourse second lien mortgages totaling $7 million.
Acquisition of Paragon Group, Inc. On April 15, 1997, we acquired through a
tax-free merger, Paragon Group, Inc., a Dallas-based multifamily REIT. Through
this acquisition, we acquired 50 multifamily properties and 15,975 apartment
homes. Each share of Paragon common stock outstanding on April 15, 1997 was
exchanged for 0.64 of a Camden common share. In this transaction, we issued 9.5
million common shares, 2.4 million limited partnership units in Camden
Operating, L.P. and assumed approximately $296 million of Paragon debt at fair
value.
At December 31, 1999, we had 1,705 employees. Our headquarters are located
at 3 Greenway Plaza, Suite 1300, Houston, Texas 77046 and our telephone number
is (713) 354-2500.
OPERATING STRATEGY
We believe that producing consistent earnings growth and selectively
investing in favorable markets are crucial factors to our success. We rely
heavily on our sophisticated property management capabilities and innovative
operating strategies in our efforts to produce consistent earnings growth.
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Sophisticated Property Management. We believe the depth of our organization
enables us to deliver quality services, thereby promoting resident satisfaction
and improving resident retention, which should reduce operating expenses. We
manage our properties utilizing a staff of professionals and support personnel,
including certified property managers, experienced apartment managers and
leasing agents, and trained apartment maintenance technicians. Our on-site
personnel are trained to deliver high quality services to their residents. We
attempt to motivate our on-site employees through incentive compensation
arrangements based upon the net operating income produced at their property, as
well as rental rate increases and the level of lease renewals achieved.
Innovative Operating Strategies. We believe an intense focus on operations
is necessary to realize consistent, sustained earnings growth. Ensuring resident
satisfaction, increasing rents as market conditions allow, maximizing rent
collections, maintaining property occupancy at optimal levels and controlling
operating costs comprise our principal strategies to maximize property net
operating income. Lease terms are generally staggered based on vacancy exposure
by apartment type so that lease expirations are better matched to each
property's seasonal rental patterns. We offer leases ranging from six to
thirteen months, with individual property marketing plans structured to respond
to local market conditions. In addition, we conduct ongoing customer service
surveys to ensure we respond timely to residents changing needs and to ensure
that residents retain a high level of satisfaction.
New Development and Acquisitions. We continue to operate in markets where
we have a concentration advantage due to economies of scale. We feel that where
possible, it is best to operate with a strong base of properties in order to
benefit from the personnel allocation and the market strength associated with
managing several properties in the same market. We believe we are well
positioned in our current markets and have the expertise to take advantage of
both development and acquisition opportunities which have healthy long-term
fundamentals and strong growth projections. This dual capability, combined with
what we believe is a conservative financial structure, allows us to concentrate
our growth efforts towards selective development alternatives and acquisition
opportunities.
Selective development of new apartment properties will continue to be
important to the growth of our portfolio for the next several years. We use
experienced on-site construction superintendents, operating under the
supervision of project managers and senior management, to control the
construction process. All development decisions are made from our corporate
office. Risks inherent to developing real estate include zoning changes and
environmental matters. There is also the risk that certain assumptions
concerning economic conditions may change during the development process. We
believe that we understand and effectively manage the risks associated with
development and that the risks of new development are justified by higher
potential yields.
At December 31, 1999, we had a $30.4 million investment in 38 acres in
downtown Dallas which are being used for development of The Park at Farmers
Market, Phase I, and the proposed future development of Phase II. We are also in
the planning phase related to the possible development of 55 for-sale townhomes
in this area. The remaining land may be sold to third parties for commercial and
retail development. Additionally, we had $44.3 million in land under development
in two properties located in Houston and Long Beach. These properties are
currently in the planning stage to determine the number of apartment homes that
will be developed based on demand in these areas over the next three to five
years. We also may sell certain parcels of these two properties to third parties
for commercial and retail development.
We plan to continue diversification of our investments, both geographically
and in the number of apartment homes and selection of amenities offered. Our
operating properties have an average age of 10 years (calculated on the basis of
investment dollars). We believe that the physical improvements we have made at
our acquired properties, such as new or enhanced landscaping design, new or
upgraded amenities and redesigned building structures, coupled with a strong
focus on property management and marketing, has resulted in attractive yields on
acquired properties.
Dispositions. To generate consistent earnings growth, we seek to
selectively dispose of properties and redeploy capital if we determine a
property cannot meet long-term earnings growth expectations. We are currently
seeking to selectively dispose of up to $150 million of real estate assets that
management believes have a lower projected net operating income growth rate than
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the overall portfolio, or no longer conform to our operating and investment
strategies. We currently anticipate using the potential proceeds from these
sales to retire debt and repurchase shares. However, we cannot assure you that
we will complete these sales or that the final outcomes of these sales, if
completed, will be on terms favorable to us.
At year end, we were obligated under an earnest money contract to sell two
parcels of land totaling approximately $15 million. We expect to complete this
transaction late in the first quarter to early in the second quarter of 2000.
Environmental Matters. Under various federal, state and local laws,
ordinances and regulations, we are liable for the costs of removal or
remediation of certain hazardous or toxic substances on or in our properties.
These laws often impose liability without regard to whether we knew of, or were
responsible for, the presence of the hazardous or toxic substances. All of our
properties have been subjected to Phase I site assessments or similar
environmental audits to determine if there is a likelihood of contamination from
either on- or off-site sources. These audits have been carried out in accordance
with accepted industry practices. We have also conducted limited subsurface
investigations and tested for radon and lead-based paint where such procedures
have been recommended by our consultants. We cannot assure you that existing
environmental studies reveal all environmental liabilities or that any prior
owner did not create any material environmental condition not known to us. The
costs of investigation, remediation or removal of hazardous substances may be
substantial. If hazardous or toxic substances are present on a property, or if
we fail to properly remediate such substances, our ability to sell or rent such
property or to borrow using such property as collateral may be adversely
affected.
Insurance. We carry comprehensive liability, fire, flood, extended coverage
and rental loss insurance on our properties, which we believe is of the type and
amount customarily obtained on real property assets. We intend to obtain similar
coverage for properties we acquire in the future. However, there are certain
types of losses, generally of a catastrophic nature, such as losses from floods
or earthquakes, that may be subject to limitations in certain areas. Our board
exercises its discretion in determining amounts, coverage limits and
deductibility provisions of insurance, with a view to maintaining appropriate
insurance on our investments at a reasonable cost and on suitable terms. If we
suffer a substantial loss, our insurance coverage may not be sufficient to pay
the full current market value or current replacement cost of our lost
investment. Inflation, changes in building codes and ordinances, environmental
considerations and other factors also might make it infeasible to use insurance
proceeds to replace a property after it has been damaged or destroyed.
MARKETS AND COMPETITION
Our portfolio consists of middle to upper market apartment properties. We
target acquisitions and developments in selected high-growth markets. Since our
initial public offering in 1993, we have diversified into other markets in the
Southwest region and into the Southeast, Midwest and Western regions of the
United States. By combining acquisition, renovation and development
capabilities, we believe we are able to better respond to changing conditions in
each market, thereby reducing market risk and allowing us to take advantage of
opportunities as they arise.
There are numerous housing alternatives that compete with our properties in
attracting residents. Our properties compete directly with other multifamily
properties and single family homes that are available for rent in the markets in
which our properties are located. Our properties also compete for residents with
the new and existing owned-home market. The demand for rental housing is driven
by economic and demographic trends. Recent trends in the economics of renting
versus home ownership indicate an increasing demand for rental housing in
certain markets, due to a number of factors, including the increase in mortgage
interest rates. Rental demand should be strong in areas anticipated to
experience in-migration, due to the younger ages that characterize movers as
well as the relatively high cost of home ownership in higher growth areas.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
We have made statements in this report that are "forward-looking" in that
they do not discuss historical fact, but instead note future expectations,
projections, intentions or other items relating to the future. These
forward-looking statements include those made in the documents incorporated by
reference in this report.
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Forward-looking statements are subject to known and unknown risks,
uncertainties and other facts that may cause our actual results or performance
to differ materially from those contemplated by the forward- looking statements.
Many of those factors are noted in conjunction with the forward-looking
statements in the text. Other important factors that could cause actual results
to differ include:
1. The results of our efforts to implement our property development strategy.
2. The effect of economic conditions.
3. Failure to qualify as a real estate investment trust.
4. The costs of our capital.
5. Actions of our competitors and our ability to respond to those actions.
6. Changes in government regulations, tax rates and similar matters.
7. Environmental uncertainties and natural disasters.
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. These forward-looking statements represent our
estimates and assumptions only as of the date of this report.
ITEM 2. PROPERTIES
THE PROPERTIES
Our properties typically consist of two- and three-story buildings in a
landscaped setting and provide residents with a variety of amenities. Most of
the properties have, or are expected to have, one or more swimming pools and a
clubhouse and many have whirlpool spas, tennis courts and controlled-access
gates. Many of the apartment homes offer additional features such as fireplaces,
vaulted ceilings, microwave ovens, covered parking, icemakers, washers and
dryers and ceiling fans. The 153 properties, which we owned interests in and
operated at December 31, 1999, average 840 square feet of living area.
OPERATING PROPERTIES
For the year ended December 31, 1999, no single operating property
accounted for greater than 2.8% of our total revenues. The operating properties
had a weighted average occupancy rate of 93% in 1999 and 1998. Resident lease
terms generally range from six to thirteen months and usually require security
deposits. One hundred thirty-two of our operating properties have over 200
apartment homes, with the largest having 894 apartment homes. Our operating
properties were constructed and placed in service as follows:
Year Placed in Service Number of Properties
------------------------------ ------------------------------
1994 - 1999 46
1988 - 1993 27
1983 - 1987 52
1978 - 1982 18
1973 - 1977 6
1967 - 1972 4
Property Table
The following table sets forth information with respect to our operating
properties at December 31, 1999.
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<TABLE>
<CAPTION>
OPERATING PROPERTIES
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December 1999 Avg.
Mo. Rental Rates
------------------------
Number of Year Placed Average Apartment 1999 Average Per
PROPERTY AND LOCATION Apartments in Service Size (Sq. Ft.) Occupancy (1) Apartment Per Sq. Ft.
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<S> <C> <C> <C> <C> <C> <C>
ARIZONA
PHOENIX
Arrowhead Springs, The Park at 288 1997 925 94 % $ 715 $ 0.77
Fountain Palms, The Park at 192 1986/1996 1,050 97 735 0.70
Scottsdale Legacy 428 1996 1,067 87 890 0.83
Towne Center, The Park at (2) 240 1998 871 94 723 0.83
Vista Valley, The Park at 357 1986 923 92 708 0.77
TUCSON
Eastridge 456 1984 559 90 455 0.81
Oracle Villa 365 1974 1,026 93 696 0.68
CALIFORNIA
ORANGE COUNTY
Martinique 713 1986 795 95 1,106 1.39
Parkside (3) 421 1972 835 96 930 1.11
Sea Palms 138 1990 891 96 1,097 1.23
COLORADO
DENVER
Centennial, The Park at 276 1985 744 96 749 1.01
Deerwood, The Park at 342 1996 1,141 96 1,159 1.02
Denver West, The Park at (5) 321 1997 1,012 98 1,072 1.06
Interlocken, The Park at (2) 340 1999 1,022 92 1,122 1.10
Lakeway, The Park at 451 1997 919 95 984 1.07
Park Place 224 1985 748 95 736 0.98
Wexford, The Park at 358 1986 810 95 785 0.97
FLORIDA
ORLANDO
Landtree Crossing 220 1983 748 94 615 0.82
Renaissance Pointe I 272 1996 940 93 793 0.84
Renaissance Pointe II (2) 306 1998 863 96 769 0.89
Riverwalk I & II 552 1984/1986 747 93 572 0.77
Sabal Club 436 1986 1,077 93 852 0.79
Vineyard, The 526 1990/1991 824 96 690 0.84
TAMPA/ST. PETERSBURG
Chase Crossing 444 1986 1,223 90 798 0.65
Chasewood 247 1985 704 94 579 0.82
Dolphin/Lookout Pointe 832 1987/1989 748 95 647 0.87
Heron Pointe 276 1996 942 93 858 0.91
Island Club I & II 484 1983/1985 722 95 559 0.77
Live Oaks 770 1990 1,093 91 740 0.68
Mallard Pointe I & II 688 1982/1983 728 94 599 0.82
Marina Pointe Village 408 1997 927 91 831 0.90
Parsons Run 228 1986 728 96 602 0.83
Schooner Bay 278 1986 728 95 667 0.92
Summerset Bend 368 1984 771 92 615 0.80
KENTUCKY
LOUISVILLE
Copper Creek 224 1987 732 92 647 0.88
Deerfield 400 1987/1990 746 92 643 0.86
Glenridge 138 1990 916 92 760 0.83
Sundance 254 1975 682 89 537 0.79
MISSOURI
KANSAS CITY
Camden Passage I & II 596 1989/1997 832 96 720 0.87
ST. LOUIS
Cedar Ridge 420 1986 852 90 582 0.68
Cove at Westgate, The 276 1990 828 93 904 1.09
Knollwood I & II 608 1981/1985 722 91 533 0.74
Spanish Trace 372 1972 1,158 94 732 0.63
Tempo 304 1975 676 94 523 0.77
Westchase 160 1986 945 95 868 0.92
Westgate I & II 591 1973/1980 947 91 781 0.82
NEVADA
LAS VEGAS
Oasis Bay (4) 128 1990 862 96 736 0.85
Oasis Bel Air I & II 528 1988/1995 943 95 751 0.80
Oasis Breeze 320 1989 846 96 694 0.82
</TABLE>
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<TABLE>
<CAPTION>
OPERATING PROPERTIES (CONTINUED)
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December 1999 Avg.
Mo. Rental Rates
------------------------
Number of Year Placed Average Apartment 1999 Average Per
PROPERTY AND LOCATION Apartments in Service Size (Sq. Ft.) Occupancy (1) Apartment Per Sq. Ft.
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<S> <C> <C> <C> <C> <C> <C>
Oasis Canyon 200 1995 987 94 % $ 780 $ 0.79
Oasis Cliffs 376 1988 936 97 746 0.80
Oasis Club 320 1989 896 97 707 0.79
Oasis Cove 124 1990 898 97 707 0.79
Oasis Crossings (4) 72 1996 983 94 731 0.74
Oasis Del Mar 560 1995 986 94 831 0.84
Oasis Emerald (4) 132 1988 873 94 643 0.74
Oasis Gateway (4) 360 1997 1,146 91 843 0.74
Oasis Glen 113 1994 792 97 727 0.92
Oasis Greens 432 1990 892 98 719 0.81
Oasis Harbor 336 1996 1,008 96 791 0.78
Oasis Heights 240 1989 849 96 670 0.79
Oasis Heritage (4) 720 1986 950 89 622 0.65
Oasis Hills 184 1991 579 96 524 0.90
Oasis Island (4) 118 1990 901 92 637 0.71
Oasis Landing (4) 144 1990 938 95 702 0.75
Oasis Meadows (4) 383 1996 1,031 95 749 0.73
Oasis Palms (4) 208 1989 880 97 679 0.77
Oasis Paradise 624 1991 905 93 758 0.84
Oasis Pearl (4) 90 1989 930 95 695 0.75
Oasis Pines 315 1997 1,005 93 788 0.78
Oasis Place (4) 240 1992 440 96 479 1.09
Oasis Plaza (4) 300 1976 820 95 606 0.74
Oasis Pointe 252 1996 985 97 761 0.77
Oasis Ridge (4) 477 1984 391 94 438 1.12
Oasis Rose (4) 212 1994 1,025 93 723 0.71
Oasis Sands 48 1994 1,125 95 745 0.66
Oasis Sierra (7) 208 1998 922 91 789 0.86
Oasis Springs (4) 304 1988 838 94 635 0.76
Oasis Suites (4) 409 1988 404 91 460 1.14
Oasis Summit 234 1995 1,187 94 1,063 0.90
Oasis Tiara 400 1996 1,043 96 831 0.80
Oasis Topaz 270 1978 827 92 622 0.75
Oasis View (4) 180 1983 940 94 665 0.71
Oasis Vinings (4) 234 1994 1,152 93 754 0.65
Oasis Vintage 368 1994 978 95 738 0.75
Oasis Winds 350 1978 807 94 610 0.76
RENO
Oasis Bluffs 450 1997 1,111 93 1,012 0.91
NORTH CAROLINA
CHARLOTTE
Copper Creek 208 1989 703 94 633 0.90
Eastchase 220 1986 698 95 603 0.86
Habersham Pointe 240 1986 773 91 668 0.86
Overlook, The (6) 220 1985 754 94 696 0.92
Park Commons 232 1997 859 93 753 0.88
Pinehurst 407 1967 1,147 92 791 0.69
Timber Creek 352 1984 706 94 651 0.92
GREENSBORO
Brassfield Park (6) 336 1997 889 93 727 0.82
Glen, The 304 1980 662 91 573 0.87
River Oaks 216 1985 795 92 641 0.81
TEXAS
AUSTIN
Autumn Woods 283 1984 644 98 589 0.91
Calibre Crossing 183 1986 705 97 626 0.89
Huntingdon, The 398 1995 903 97 810 0.90
Quail Ridge 167 1984 859 98 707 0.82
Ridgecrest 284 1995 851 96 770 0.91
South Oaks 430 1980 705 97 606 0.85
CORPUS CHRISTI
Breakers, The 288 1996 861 83 764 0.89
</TABLE>
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<TABLE>
<CAPTION>
OPERATING PROPERTIES (CONTINUED)
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December 1999 Avg.
Mo. Rental Rates
------------------------
Number of Year Placed Average Apartment 1999 Average Per
PROPERTY AND LOCATION Apartments in Service Size (Sq. Ft.) Occupancy (1) Apartment Per Sq. Ft.
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<S> <C> <C> <C> <C> <C> <C>
Miramar I, II & III (8) 300 1994/1995/1998 708 86% $ 863 $ 1.22
Potters Mill 344 1986 775 86 598 0.77
Waterford, The 580 1976/1980 767 91 528 0.69
DALLAS/FORT WORTH
Addison, The Park at 456 1996 942 93 880 0.93
Buckingham, The Park at 464 1997 919 95 833 0.91
Centreport, The Park at 268 1997 910 90 829 0.91
Chesapeake 128 1982 912 95 737 0.81
Cottonwood Ridge 208 1985 829 96 599 0.72
Emerald Valley 516 1986 743 92 681 0.92
Emerald Village 304 1987 713 90 627 0.88
Glen Arbor 320 1980 666 97 524 0.79
Glen Lakes 424 1979 877 92 758 0.86
Highland Trace 160 1985 816 91 662 0.81
Highpoint (6) 708 1985 835 94 662 0.79
Ivory Canyon 602 1986 548 95 566 1.03
Los Rios 286 1992 772 94 800 1.04
Nob Hill 486 1986 642 92 526 0.82
North Dallas Crossing I & II 446 1985 730 94 631 0.86
Oakland Hills 476 1985 853 96 628 0.74
Pineapple Place 256 1983 652 94 599 0.92
Randol Mill Terrace 340 1984 848 96 604 0.71
Shadow Lake 264 1984 733 92 586 0.80
Stone Creek 240 1995 831 93 792 0.95
Stone Gate 276 1996 871 93 819 0.94
Towne Centre Village 188 1983 735 96 596 0.81
Towne Crossing, The Place at 442 1984 772 96 595 0.77
Valley Creek Village 380 1984 855 96 669 0.78
Valley Ridge 408 1987 773 95 632 0.82
Westview 335 1983 697 93 614 0.88
EL PASO
La Plaza 129 1969 997 95 600 0.60
HOUSTON
Brighton Place 282 1978 749 92 572 0.76
Cambridge Place 336 1979 771 92 594 0.77
Crossing, The 366 1982 762 93 580 0.76
Driscoll Place 488 1983 708 95 487 0.69
Eagle Creek 456 1984 639 94 592 0.93
Goose Creek, The Park at (9) 272 1999 844 96 680 0.81
Greenway, The Park at (9) 756 1999 861 82 972 1.13
Holly Springs, The Park at (9) 548 1999 934 66 882 0.94
Jones Crossing 290 1982 748 95 591 0.79
Midtown, The Park at (2) 337 1999 843 97 1,003 1.19
Roseland 671 1982 726 92 564 0.78
Southpoint 244 1981 730 94 595 0.81
Stonebridge 204 1993 845 92 803 0.95
Sugar Grove, The Park at 380 1997 917 87 816 0.89
Vanderbilt I & II, The Park at 894 1996/1997 863 92 1,009 1.17
Wallingford 462 1980 787 92 606 0.77
Wilshire Place 536 1982 761 92 578 0.76
Woodland Park 288 1995 866 91 803 0.93
Wyndham Park 448 1978/1981 797 96 528 0.66
--------- --------------- ------------ --------- -----------
Total 53,311 840 93% $ 713 $ 0.85
========= =============== ============ ========= ===========
</TABLE>
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(1) Represents average physical occupancy for the year, except as noted below.
(2) Development property - average occupancy calculated from date at which
occupancy exceeded 90% through year-end.
(3) Property under renovation during 1999, which affected occupancy levels
during this period. Occupancy percentage listed is as of March 1, 2000, and
is excluded from the December 31, 1999 average physical occupancy
calculation.
(4) Properties owned through Sierra-Nevada Multifamily Investments, LLC joint
venture in which we own a 20% interest.
(5) Property owned through a joint venture in which we own a 50% interest. The
remaining interest is owned by an unaffiliated private investor.
(6) Properties owned through a joint venture in which we own a 44% interest.
The remaining interest is owned by unaffiliated private investors.
(7) Property owned through Sierra-Nevada Multifamily Investments LLC. Property
was acquired during 1999 - average occupancy calculated from acquisition
date through year end.
(8) Miramar is a student housing project for Texas A&M at Corpus Christi.
Average occupancy includes summer which is normally subject to high
vacancies.
(9) Properties under lease-up at December 31, 1999. Occupancy percentage listed
is as of March 1, 2000, and is excluded from the December 31, 1999 average
physical occupancy calculation.
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OPERATING PROPERTIES UNDER LEASE-UP
The operating properties under lease-up table is incorporated herein by
reference from page 19 of the Company's Annual Report to Shareholders for the
year ended December 31, 1999, which page is filed as Exhibit 13.1 hereto.
DEVELOPMENT PROPERTIES
The total budgeted cost of the development properties is approximately
$191.5 million, with a remaining cost to complete, as of December 31, 1999, of
approximately $47.9 million. There can be no assurance that our budget, leasing
or occupancy estimates will be attained for the development properties or that
their performance will be comparable to that of our existing portfolio.
Development Properties Table
The development properties table is incorporated herein by reference from
page 19 of our Annual Report to Shareholders for the year ended December 31,
1999, which is filed as Exhibit 13.1.
Management believes that we possess the development capabilities and
experience to provide a continuing source of portfolio growth. In making
development decisions, management considers a number of factors, including the
size of the property, the season in which leasing activity will occur and the
extent to which delivery of the completed apartment homes will coincide with
leasing and occupancy of such apartment homes (which is dependent upon local
market conditions). In order to pursue a development opportunity, we currently
require a minimum initial stabilized target return of 9.5%-10.5%. This minimum
target return is based on projected market rents and projected stabilized
expenses, considering the market and the nature of the prospective development.
ITEM 3. LEGAL PROCEEDINGS
Prior to our merger with Oasis, Oasis had been contacted by certain
regulatory agencies with regards to alleged failures to comply with the Fair
Housing Amendments Act as it pertained to nine properties (seven of which we
currently own) constructed for first occupancy after March 31, 1991. On February
1, 1999, the Justice Department filed a lawsuit against us and several other
defendants in the United States District Court for the District of Nevada
alleging (1) that the design and construction of these properties violates the
Fair Housing Act and (2) that we, through the merger with Oasis, had
discriminated in the rental of dwellings to persons because of handicap. The
complaint requests an order that (i) declares that the defendants' policies and
practices violate the Fair Housing Act; (ii) enjoins us from (a) failing or
refusing, to the extent possible, to bring the dwelling units and public use and
common use areas at these properties and other covered units that Oasis had
designed and/or constructed into compliance with the Fair Housing Act, (b)
failing or refusing to take such affirmative steps as may be necessary to
restore, as nearly as possible, the alleged victims of the defendants alleged
unlawful practices to positions they would have been in but for the
discriminatory conduct and (c) designing or constructing any covered
multi-family dwellings in the future that do not contain the accessibility and
adaptability features set forth in the Fair Housing Act; and requires us to pay
damages, including punitive damages, and a civil penalty.
With any acquisition, we plan for and undertake renovations needed to
correct deferred maintenance, life/safety and Fair Housing matters. We are
currently in the process of determining the extent of the alleged noncompliance
on the properties discussed above and the remaining changes that may be
necessitated. At this time, we are not able to provide an estimate of costs and
expenses associated with the resolution of this matter, however, management does
not expect the amount to be material. There can be no assurance that we will be
successful in the defense of the Justice Department action.
We are subject to various legal proceedings and claims that arise in the
ordinary course of business. These matters are generally covered by insurance.
While the resolution of these matters cannot be predicted with certainty,
management believes that the final outcome of such matters will not have a
material adverse effect on our consolidated financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders, through the solicitation
of proxies or otherwise.
<PAGE> 11
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information with respect to this Item 5 is incorporated herein by reference
from page 48 of our Annual Report to Shareholders for the year ended December
31, 1999, which is filed as Exhibit 13.1. The number of holders of record of our
common shares, $0.01 par value, as of March 1, 2000, was 1,186.
ITEM 6. SELECTED FINANCIAL DATA
Information with respect to this Item 6 is incorporated herein by reference
from pages 49 and 50 of our Annual Report to Shareholders for the year ended
December 31, 1999, which is filed as Exhibit 13.1.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Information with respect to this Item 7 is incorporated herein by reference
from pages 17 through 27 of our Annual Report to Shareholders for the year ended
December 31, 1999, which is filed as Exhibit 13.1.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information with respect to this Item 7A is incorporated herein by
reference from pages 23 and 24 of our Annual Report to Shareholders for the
year ended December 31, 1999, which is filed as Exhibit 13.1.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our financial statements and supplementary financial information for the
years ended December 31, 1999, 1998 and 1997 are listed in the accompanying
Index to Consolidated Financial Statements and Supplementary Data at F-1 and are
incorporated herein by reference from pages 28 through 48 of our Annual Report
to Shareholders for the year ended December 31, 1999, which is filed as Exhibit
13.1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
<PAGE> 12
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to this Item 10 is incorporated by reference from
our Proxy Statement, which we intend to file on or before March 30, 2000 in
connection with the Annual Meeting of Shareholders to be held May 4, 2000.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to this Item 11 is incorporated by reference from
our Proxy Statement, which we intend to file on or before March 30, 2000 in
connection with the Annual Meeting of Shareholders to be held May 4, 2000.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to this Item 12 is incorporated by reference from
our Proxy Statement, which we intend to file on or before March 30, 2000 in
connection with the Annual Meeting of Shareholders to be held May 4, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to this Item 13 is incorporated by reference from
our Proxy Statement, which we intend to file on or before March 30, 2000 in
connection with the Annual Meeting of Shareholders to be held May 4, 2000.
<PAGE> 13
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Financial Statements:
Our financial statements and supplementary financial information for
the years ended December 31, 1999, 1998 and 1997 are listed in the
accompanying Index to Consolidated Financial Statements and Supplementary
Data at F-1 and are incorporated herein by reference from pages 28 through
48 of our Annual Report to the Shareholders for the year ended December 31,
1999, which pages are filed as Exhibit 13.1 hereto.
(2) Financial Statement Schedule:
The financial statement schedule listed in the accompanying Index to
Consolidated Financial Statements and Supplementary Data at page F-1 is
filed as part of this Report.
(3) Index to Exhibits:
NUMBER TITLE
2.1 Agreement and Plan of Merger, dated as of December 16, 1996, among
Camden Property Trust, Camden Subsidiary, Inc. and Paragon Group,
Inc. Incorporated by reference from Exhibit 99.2 to Camden Property
Trust's Form 8-K filed December 18, 1996 (File No. 1-12110).
2.2 Agreement and Plan of Merger, dated December 16, 1997, among Camden
Property Trust, Camden Subsidiary II, Inc. and Oasis Residential,
Inc. Incorporated by reference from Exhibit 2.1 to Camden Property
Trust's Form 8-K filed December 17, 1997 (File No. 1-12110).
2.3 Amendment No. 1, dated February 4, 1998, to the Agreement and Plan
of Merger, dated December 16, 1997, among Camden Property Trust,
Camden Subsidiary II, Inc. and Oasis Residential, Inc. Incorporated
by reference from Exhibit 2.1 to Camden Property Trust's Form 8-K
filed February 5, 1998 (File No. 1-12110).
2.4 Contribution Agreement, dated June 26, 1998, by and between Camden
Subsidiary, Inc. and Sierra-Nevada Multifamily Investments, LLC.
Incorporated by reference from Exhibit 2.1 to Camden Property
Trust's Form 8-K filed July 15, 1998 (File No. 1-12110).
2.5 Agreement of Purchase and Sale, dated June 26, 1998, by and between
Camden Subsidiary, Inc. and Sierra-Nevada Multifamily Investments,
LLC. Incorporated by reference from Exhibit 2.2 to Camden Property
Trust's Form 8-K filed July 15, 1998 (File No. 1-12110).
2.6 Agreement of Purchase and Sale, dated June 26, 1998, by and between
NQRS, Inc. and Sierra-Nevada Multifamily Investments, LLC.
Incorporated by reference from Exhibit 2.3 to Camden Property
Trust's Form 8-K filed July 15, 1998 (Filed No. 1-12110).
3.1 Amended and Restated Declaration of Trust of Camden Property Trust,
as amended. Incorporated by reference from Exhibit 3.1 to Camden
Property Trust's Form 10-K for the year ended December 31, 1993
(File No. 1-12110).
3.2 Amendment to the Amended and Restated Declaration of Trust.
Incorporated by reference from Exhibit 3.1 to Camden Property
Trust's Form 10-Q filed August 14, 1997 (File No. 1-12110).
3.3 Second Amended and Restated Bylaws. Incorporated by reference from
Exhibit 3.3 to Camden Property Trust's Form 10-K for the year ended
December 31, 1997 (File No. 1-12110).
4.1 Specimen certificate for Common Shares of Beneficial Interest.
Incorporated by reference from Exhibit 4.1 to Camden Property
Trust's Registration Statement on Form S-11 filed September 15, 1993
(File No. 33-68736).
<PAGE> 14
4.2 Indenture dated as of April 1, 1994 by and between Camden Property
Trust and The First National Bank of Boston, as Trustee.
Incorporated by reference from Exhibit 4.3 to Camden Property
Trust's Statement on Form S-11 filed April 12, 1994 (File No.
33-76244).
4.3 Form of Convertible Subordinated Debenture Due 2001. Incorporated by
reference from Exhibit 4.3 to Camden Property Trust's Statement on
Form S-11 filed April 12, 1994 (File No. 33-76244).
4.4 Indenture dated as of February 15, 1996 between Camden Property
Trust and the U.S. Trust Company of Texas, N.A., as Trustee.
Incorporated by reference from Exhibit 4.1 to Camden Property
Trust's Form 8-K filed February 15, 1996 (File No. 1-12110).
4.5 First Supplemental Indenture dated as of February 15, 1996 between
Camden Property Trust and U.S. Trust Company of Texas N.A., as
trustee. Incorporated by reference from Exhibit 4.2 to Camden
Property Trust's Form 8-K filed February 15, 1996 (File No.
1-12110).
4.6 Form of Camden Property Trust 6 5/8% Note due 2001. Incorporated by
reference from Exhibit 4.3 to Camden Property Trust's Form 8-K filed
February 15, 1996 (File No. 1-12110).
4.7 Form of Camden Property Trust 7% Note due 2006. Incorporated by
reference from Exhibit 4.3 to Camden Property Trust's Form 8-K filed
December 2, 1996 (File No. 1-12110).
4.8 Specimen certificate for Camden Series A Cumulative Convertible
Shares of Beneficial Interest. Incorporated from Exhibit 4.3 to
Camden Property Trust's Registration Statement on Form S-4 filed
February 6, 1998 (File No. 333-45817).
4.9 Statement of Designation, Preferences and Rights of Series A
Cumulative Convertible Preferred Shares of Beneficial Interest.
Incorporated by reference from Exhibit 4.1 to Camden Property
Trust's Registration Statement on Form S-4 filed February 6, 1998
(File No. 333-45817).
4.10 Form of Statement of Designation of Series B Cumulative Redeemable
Preferred Shares of Beneficial Interest. Incorporated by reference
from Exhibit 4.1 to Camden Property Trust's Form 8-K filed on March
10, 1999 (File No. 1-12110).
4.11* Form of Statement of Designation of Series C Cumulative Redeemable
Perpetual Preferred Shares of Beneficial Interest of Camden Property
Trust.
4.12* Form of First Amendment to Statement of Designation of Series
C Cumulative Redeemable Perpetual Preferred Shares of Beneficial
Interest of Camden Property Trust.
4.13* Form of Second Amendment to Statement of Designation of Series
C Cumulative Redeemable Perpetual Preferred Shares of Beneficial
Interest of Camden Property Trust.
4.14 Form of Underwriting Agreement among Camden Property Trust and the
Underwriters dated April 15, 1999 relating to the offering of 7%
notes due 2004. Incorporated by reference from Camden Property
Trust's Form 8-K filed April 20, 1999 (File No. 1-12110).
4.15 Form of Camden Property Trust 7% Note due 2004. Incorporated by
reference from Camden Property Trust's For 8-K filed April 20, 1999
(File No. 1-12110).
10.1 Form of Indemnification Agreement by and between Camden Property
Trust and certain of its trust managers and executive officers.
Incorporated by reference from Exhibit 10.18 to Amendment No. 1 of
Camden Property Trust's Registration Statement on Form S-11 filed
July 9, 1993 (File No. 33-63588).
<PAGE> 15
10.2 Amended and Restated Employment Agreement dated August 7, 1998 by
and between Camden Property Trust and Richard J. Campo. Incorporated
by reference from Exhibit 10.4 to Camden Property Trust's Form 10-K
filed March 30, 1999 (File No. 1-12110).
10.3 Amended and Restated Employment Agreement dated August 7, 1998 by
and between Camden Property Trust and D. Keith Oden. Incorporated by
reference from Exhibit 10.5 to Camden Property Trust's Form 10-K
filed March 30, 1999 (File No. 1-12110).
10.4 Form of Employment Agreement by and between Camden Property Trust
and certain senior executive officers. Incorporated by reference
from Exhibit 10.13 to Camden Property Trust's Form 10-K filed March
28, 1997 (File No. 1-12110).
10.5 Camden Property Trust Key Employee Share Option Plan. Incorporated
by reference from Exhibit 10.14 to Camden Property Trust's Form 10-K
filed March 28, 1997 (File No. 1-12110).
10.6 Distribution Agreement dated March 20, 1997 among Camden Property
Trust and the Agents listed therein relating to the issuance of
Medium Term Notes. Incorporated by reference from Exhibit 1.1 to
Camden Property Trust's Form 8-K filed March 21, 1997 (File No.
1-12110).
10.7 Form of Master Exchange Agreement by and between Camden Property
Trust and certain key employees. Incorporated by reference from
Exhibit 10.16 to Camden Property Trust's Form 10-K filed February 6,
1998 (File No. 1-12110).
10.8 Form of Credit Agreement dated August 18, 1999 between Bank of
America, N.A. and Camden Property Trust. Incorporated by reference
from Camden Property Trust's Form 10-Q filed November 15, 1999 (File
No. 1-12110).
10.9 Form the Third Amended and Restated Agreement of Limited Partnership
of Camden Operating, L.P. Incorporated by reference from Exhibit
10.1 to Camden Property Trust's Form S-4 filed on February 26, 1997
(File No. 333-22411).
10.10 Amended and Restated Limited Liability Company Agreement of
Sierra-Nevada Multifamily Investments, LLC, adopted as of June 29,
1998 by Camden Subsidiary, Inc. and TMT-Nevada, L.L.C. Incorporated
by reference from Exhibit 99.1 to Camden Property Trust's Form 8-K
filed July 15, 1998 (File No. 1-12110).
10.11 Amended and Restated Limited Liability Company Agreement of Oasis
Martinique, LLC, dated as of October 23, 1998, by and among Oasis
Residential, Inc. and the persons named therein. Incorporated by
reference from Exhibit 10.59 to Oasis Residential, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997 (File No.
1-12428).
10.12 Exchange Agreement, dated as of October 23, 1998, by and among Oasis
Residential, Inc., Oasis Martinique, LLC and the holders listed
thereon. Incorporated by reference from Exhibit 10.60 to Oasis
Residential, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1997 (File No. 1-12428).
10.13 Contribution Agreement, dated as of February 23, 1999, by and among
Belcrest Realty Corporation, Belair Real Estate Corporation, Camden
Operating, L.P. and Camden Property Trust. Incorporated by reference
from Exhibit 99.1 to Camden Property Trust's Form 8-K filed on March
10, 1999 (File No. 1-12110).
10.14 First Amendment to Third Amended and Restated Agreement of Limited
Partnership of Camden Operating, L.P., dated as of February 23,
1999. Incorporated by reference from Exhibit 99.2 to Camden Property
Trust's Form 8-K filed on March 10, 1999 (File No. 1-12110).
<PAGE> 16
10.15* Form of Second Amendment to Third Amended and Restated Agreement of
Limited Partnership of Camden Operating, L.P., dated as of August
13, 1999.
10.16* Form of Third Amendment to Third Amended and Restated Agreement of
Limited Partnership of Camden Operating, L.P., dated as of September
7, 1999.
10.17* Form of Fourth Amendment to Third Amended and Restated Agreement of
Limited Partnership of Camden Operating, L.P., dated as of January
7, 2000.
10.18* Amended and Restated 1993 Share Incentive Plan of Camden Property
Trust.
10.19* Camden Property Trust 1999 Employee Share Purchase Plan.
10.20* Form of Senior Executive Loan Guaranty between Camden Operating
L.P., Camden USA, Inc. and Bank One, NA.
11.1* Statement re Computation of Per Share Earnings.
12.1* Statement re Computation of Ratios
13.1* Selected pages of the Camden Property Trust Annual Report to
Shareholders for the year ended December 31, 1999.
21.1* Subsidiaries of Camden Property Trust.
23.1* Consent of Deloitte & Touche LLP.
24.1* Powers of Attorney for Richard J. Campo, D. Keith Oden, G. Steven
Dawson, William R. Cooper, George A. Hrdlicka, Scott S. Ingraham,
Lewis A. Levey, F. Gardner Parker and Steven A. Webster.
27.1* Financial Data Schedule (filed only electronically with the SEC).
___________________
*Filed herewith.
14(b) Reports on Form 8-K
Camden Property Trust did not file any Current Reports on Form 8-K during
the fourth quarter of 1999.
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Camden Property Trust has duly caused this Report to be
signed on its behalf by the undersigned thereunto duly authorized.
March 28, 2000
CAMDEN PROPERTY TRUST
By: /S/G. STEVEN DAWSON
---------------------
G. Steven Dawson
Senior Vice President - Finance,
Chief Financial Officer, Treasurer
and Secretary
By: /S/DENNIS M. STEEN
---------------------
Dennis M. Steen
Vice President - Controller and
Chief Accounting Officer (Principal
Accounting Officer)
<PAGE> 18
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of Camden
Property Trust and in the capacities and on the dates indicated.
NAME TITLE DATE
* Chairman of the Board of Trust March 28, 2000
- -------------------------- Managers and Chief Executive
Richard J. Campo Officer (Principal Executive
Officer)
* President, Chief Operating March 28, 2000
- -------------------------- Officer and Trust Manager
D. Keith Oden
/S/G. STEVEN DAWSON Senior Vice President-Finance, March 28, 2000
- -------------------------- Chief Financial Officer,
G. Steven Dawson Treasurer and Secretary
(Principal Financial Officer)
/S/DENNIS M. STEEN Vice President-Controller and March 28, 2000
- -------------------------- Chief Accounting Officer
Dennis M. Steen (Principal Accounting
Officer)
* Trust Manager March 28, 2000
- --------------------------
William R. Cooper
* Trust Manager March 28, 2000
- --------------------------
George A. Hrdlicka
* Trust Manager March 28, 2000
- --------------------------
Scott S. Ingraham
* Trust Manager March 28, 2000
- --------------------------
Lewis A. Levey
* Trust Manager March 28, 2000
- --------------------------
F. Gardner Parker
* Trust Manager March 28, 2000
- --------------------------
Steven A. Webster
*By: /S/G. STEVEN DAWSON
----------------------
G. Steven Dawson
Attorney-in-Fact
<PAGE> 19
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following financial statements of Camden Property Trust and its
subsidiaries required to be included in Item 14(a)(1) are listed below:
CAMDEN PROPERTY TRUST Page
Independent Auditors' Report (included herein) . . . . . . . . . . . . . . F-2
Financial Statements (incorporated by reference under Item 8 of Part II from
pages 28 through 48 of our Annual Report to Shareholders
for the year ended December 31, 1999):
Independent Auditors' Report
Consolidated Balance Sheets as of December 31, 1999 and 1998
Consolidated Statements of Operations for the Years Ended December
31,1999, 1998 and 1997
Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows for the Years Ended December
31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
The following financial statement supplementary data of Camden Property
Trust and its subsidiaries required to be included in Item 14(a)(2) is listed
below:
Schedule III -- Real Estate and Accumulated Depreciation . . . . . . . . . S-1
<PAGE> 20
INDEPENDENT AUDITORS' REPORT
To the Shareholders of Camden Property Trust
We have audited the consolidated financial statements of Camden Property Trust
("Camden") as of December 31, 1999 and 1998, and for each of the three years in
the period ended December 31, 1999, and have issued our report thereon dated
February 4, 2000; such consolidated financial statements and report are included
in your 1999 Annual Report to Shareholders and are incorporated herein by
reference. Our audits also included the financial statement schedule of Camden
Property Trust, listed in Item 14. This financial statement schedule is the
responsibility of Camden's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.
DELOITTE & TOUCHE LLP
Houston, Texas
February 4, 2000
<PAGE> 21
CAMDEN PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(In thousands)
<TABLE>
<CAPTION>
Cost
Capitalized
Subsequent
to
Acquisition
Initial Cost to or
Description Encumbrances Camden Property Trust Development
- ---------------------------------------- -------------- ----------------------- -------------
Building and
PROPERTY NAME Location Land Improvements
- ----------------------------- ---------- -------- --------------
<S> <C> <C> <C> <C>
Apartments TX $ 29,847 $129,146 $ 656,743 $ 55,992
Apartments AZ 8,079 17,074 116,760 4,537
Apartments CA 70,243 43,687 83,476 6,709
Apartments CO 33,114 21,000 154,556 1,755
Apartments FL 22,572 45,975 324,262 16,037
Apartments KY 18,440 5,107 52,645 1,480
Apartments MO 53,441 21,590 141,448 9,416
Apartments NV 94,935 59,412 406,347 8,524
Apartments NC 13,795 11,842 75,099 7,008
Properties under Development AZ 2,222 8,278
Properties under Development NV 7,464 9,479
Properties under Development CO 907 6,580
Properties under Development CA 31,086 12,436
Properties under Development FL 1,195 6,100
Properties under Development KY 10,090
Properties under Development TX 55,161 27,540
-------------- -------- -------------- -------------
Total $344,466 $452,868 $ 2,091,839 $ 111,458
============== ======== ============== =============
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at Which Accumulated Constructed Depreciable
Description Carried at December 31, 1999(a) Depreciation(a) or Acquired Life(Years)
- ---------------------------------------- --------------------------------- -------------- ------------- -------------
PROPERTY NAME Location Land Building Total
- ----------------------------- ---------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Apartments TX $129,146 $ 712,735 $ 841,881 $ 126,606 1993-1999 3-35
Apartments AZ 17,074 121,297 138,371 16,541 1994-1999 3-35
Apartments CA 43,687 90,185 133,872 4,306 1998-1999 3-35
Apartments CO 21,000 156,311 177,311 6,613 1998-1999 3-35
Apartments FL 45,975 340,299 386,274 29,840 1997-1999 3-35
Apartments KY 5,107 54,125 59,232 5,693 1997-1999 3-35
Apartments MO 21,590 150,864 172,454 21,376 1997-1998 3-35
Apartments NV 59,412 414,871 474,283 25,471 1998-1999 3-35
Apartments NC 11,842 82,107 93,949 17,099 1997 3-35
Properties under Development AZ 2,222 8,278 10,500 1998-1999
Properties under Development NV 7,464 9,479 16,943 1998-1999
Properties under Development CO 907 6,580 7,487 1994-1999
Properties under Development CA 31,086 12,436 43,522 1998-1999
Properties under Development FL 1,195 6,100 7,295 1998-1999
Properties under Development KY 10,090 10,090 1997-1999
Properties under Development TX 55,161 27,540 82,701 1995-1999
-------- ------------ ----------- --------------
Total $452,868 $ 2,203,297 $ 2,656,165 $ 253,545
======== ============ =========== ==============
</TABLE>
(a) The aggregate cost for federal income tax purposes at December 31,1999 was
$2.2 billion.
<PAGE> 22
THE CHANGES IN TOTAL REAL ESTATE ASSETS FOR THE YEARS ENDED DECEMBER 31, 1999,
1998 AND 1997 ARE AS FOLLOWS:
<TABLE>
<CAPTION>
1999 1998 1997
----------- ------------ ------------
<S> <C> <C> <C>
Balance, beginning of period $2,455,458 $ 1,382,049 $ 646,545
Additions during period:
Acquisition - Oasis 888 997,049
Acquisition - Paragon 618,292
Acquisition - other 139,199 45,830
Development 188,506 193,212 91,203
Improvements 33,366 26,108 13,308
Deductions during period:
Cost of real estate sold - Sierra Nevada transaction (237,423)
Cost of real estate sold - other (22,053) (44,736) (33,129)
----------- ------------ ------------
Balance, end of period $2,656,165 $ 2,455,458 $ 1,382,049
=========== ============ ============
</TABLE>
THE CHANGES IN ACCUMULATED DEPRECIATION FOR THE YEARS ENDED DECEMBER 31, 1999,
1998 AND 1997 ARE AS FOLLOWS:
<TABLE>
<CAPTION>
1999 1998 1997
----------- ------------ ------------
<S> <C> <C> <C>
Balance, beginning of period $ 167,560 $ 94,665 $ 56,369
Depreciation 87,491 76,740 43,769
Real estate sold (1,506) (3,845) (5,473)
----------- ------------ ------------
Balance, end of period $ 253,545 $ 167,560 $ 94,665
=========== ============ ============
</TABLE>
S-1
<PAGE> 23
EXHIBIT 4.11
FORM OF
STATEMENT OF DESIGNATION
OF
SERIES C CUMULATIVE REDEEMABLE PERPETUAL PREFERRED SHARES
OF
BENEFICIAL INTEREST
OF
CAMDEN PROPERTY TRUST
ARTICLE ONE
CAMDEN PROPERTY TRUST (the "COMPANY"), pursuant to the provisions of
Section 3.30 of the Texas Real Estate Investment Trust Act (the "TREITA"),
hereby files this Statement of Designation of 8.25% Series C Cumulative
Redeemable Perpetual Preferred Shares of Beneficial Interest of the Company (the
"STATEMENT") prior to the issuance of any shares of 8.25% Series C Cumulative
Redeemable Perpetual Preferred Shares of Beneficial Interest, such series of
unissued shares having been established by a resolution duly adopted by all
necessary action on the part of the Company and the Board of Trust Managers, as
provided for in the Amended and Restated Declaration of Trust (the "DECLARATION
OF TRUST").
ARTICLE TWO
The name of the Company is Camden Property Trust.
ARTICLE THREE
Pursuant to the authority conferred upon the Board of Trust Managers by the
Declaration of Trust and Section 3.30 of the TREITA, the Board of Trust
Managers, pursuant to Section 10.20 of the TREITA, adopted a resolution
establishing the 8.25% Series C Cumulative Redeemable Perpetual Preferred Shares
of Beneficial Interest of the Company and designating the series and fixing and
determining the preferences, limitations, and relative rights thereof, as set
forth in the true and correct copy of the resolution attached hereto as EXHIBIT
A (the "DESIGNATING RESOLUTION").
ARTICLE FOUR
The Designating Resolution was adopted effective as of August 13, 1999.
ARTICLE FIVE
The Designating Resolution was duly adopted by all necessary action on the
part of the Company.
<PAGE> 24
IN WITNESS WHEREOF, the undersigned officer has executed this Statement
effective as of August 13, 1999.
CAMDEN PROPERTY TRUST
By:__________________________________
Name:
Title:
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
_____________________________________
<PAGE> 25
EXHIBIT A
DESIGNATING RESOLUTION
BOARD OF TRUST MANAGERS
CAMDEN PROPERTY TRUST
AUGUST 13, 1999
AUTHORIZATION OF SERIES C CUMULATIVE CONVERTIBLE PREFERRED SHARES OF BENEFICIAL
INTEREST
WHEREAS, the Board of Trust Managers of Camden Property Trust (the
"COMPANY") has deemed it to be in the best interest of the Company and its
shareholders for the Company to establish an additional series of preferred
shares pursuant to the authority granted to the Board of Trust Managers in the
Amended and Restated Declaration of Trust (the "DECLARATION OF TRUST") of the
Company:
NOW, THEREFORE, BE IT RESOLVED, that, pursuant to the authority vested in
the Board of Trust Managers by the Declaration of Trust, a series of preferred
shares is hereby established, and the terms of the same shall be as follows:
SECTION 1. DESIGNATION AND NUMBER. A series of Preferred Shares of
Beneficial Interest, designated the "8.25% Series C Cumulative Redeemable
Perpetual Preferred Shares of Beneficial Interest" (the "SERIES C PREFERRED
SHARES") is hereby established. The number of shares of Beneficial Interest
of Series C Preferred Shares shall be 520,000.
SECTION 2. RANK. The Series C Preferred Shares will, with respect to
distributions and rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Company, or both, rank senior to all
classes or series of Common Shares (as defined in the Declaration of Trust)
and to all classes or series of equity securities of the Company now or
hereafter authorized, issued or outstanding, other than any class or series
of equity securities of the Company expressly designated as ranking on a
parity with (including, without limitation, the Series A Cumulative
Convertible Preferred Shares of Beneficial Interest of the Company provided
for in the Company's Statement of Designation filed with the County Clerk
of Harris County, Texas, on April 8, 1998 (the "SERIES A PREFERRED SHARES")
and the Series B Cumulative Convertible Preferred Shares of Beneficial
Interest of the Company provided for in the Company's Statement of
Designation filed with the County Clerk of Harris County, Texas, on
February 24, 1999 (the "SERIES B PREFERRED SHARES")) or senior to the
Series C Preferred Shares as to distributions and rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Company. For
purposes of this Designating Resolution, the term "PARITY PREFERRED SHARES"
shall be used to refer to any class or series of equity securities of the
Company now or hereafter authorized, issued or outstanding expressly
designated by the Company to rank on a parity with Series C Preferred
Shares with respect to distributions and rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Company
including, without limitation, the Series A Preferred Shares and Series B
Preferred Shares. The term "EQUITY SECURITIES" does not include convertible
debt securities (or other evidences of indebtedness), which will rank
senior to the Series C Preferred Shares; provided, however, the term
"EQUITY SECURITIES" shall include any equity securities issued upon the
conversion of convertible debt securities into equity when issued.
SECTION 3. DISTRIBUTIONS.
(a) PAYMENT OF DISTRIBUTIONS. Subject to the rights
of holders of Parity Preferred Shares and holders of equity
securities ranking senior to the Series C Preferred Shares,
holders of Series C Preferred Shares shall be entitled to
receive, when, as and if declared by the Board of Trust
Managers of the Company, out of funds legally available for
the payment of distributions, cumulative preferential cash
distributions at the rate per annum of 8.25% of the $25.00
liquidation preference per Series C Preferred Share. Such
distributions shall be cumulative, shall accrue from the
original date of issuance and will be payable (i) quarterly
(such quarterly periods for purposes of payment and accrual
will be the quarterly periods ending on the dates specified in
this sentence and not calendar year quarters) in arrears, not
later than the third calendar day after March 31, June 30,
September 30 and December 31 of each year commencing on
September 30, 1999 and, (ii) in the event of a redemption, on
<PAGE> 26
the redemption date (each a "PREFERRED SHARES DISTRIBUTION
PAYMENT DATE"). The amount of the distribution payable for any
period will be computed on the basis of a 360-day year of
twelve 30-day months and for any period shorter than a full
quarterly period for which distributions are computed, the
amount of the distribution payable will be computed on the
basis of the actual number of days elapsed in such period. If
any date on which distributions are to be made on the Series C
Preferred Shares is not a Business Day (as defined herein),
then payment of the distribution to be made on such date will
be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on such date. Distributions on the
Series C Preferred Shares will be made to the holders of
record of the Series C Preferred Shares on the relevant record
dates to be fixed by the Board of Trust Managers of the
Company, which record dates shall in no event exceed 15
Business Days prior to the relevant Preferred Shares
Distribution Payment Date (each a "DISTRIBUTION RECORD DATE").
Notwithstanding anything to the contrary set forth herein,
each share of Series C Preferred Shares shall also continue to
accrue all accrued and unpaid distributions, whether or not
declared, up to the exchange date on any Series C Preferred
Unit (as defined in the Third Amended and Restated Agreement
of Limited Partnership of Camden Operating, L.P. (as amended,
the "PARTNERSHIP AGREEMENT"), as amended through the date
hereof) validly exchanged into such share of Series C
Preferred Shares in accordance with the provisions of such
Partnership Agreement.
The term "BUSINESS DAY" shall mean each day, other
than a Saturday or a Sunday, which is not a day on which
banking institutions in Texas are authorized or required by
law, regulation or executive order to close.
(b) DISTRIBUTIONS CUMULATIVE. Distributions on the
Series C Preferred Shares will accrue whether or not the terms
and provisions of any agreement of the Company, including any
agreement relating to its indebtedness at any time prohibit
the current payment of distributions, whether or not the
Company has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or
not such distributions are authorized or declared. Accrued but
unpaid distributions on the Series C Preferred Shares will
accumulate as of the Preferred Shares Distribution Payment
Date on which they first become payable. Distributions on
account of arrears for any past distribution periods may be
declared and paid at any time, without reference to a regular
Preferred Shares Distribution Payment Date to holders of
record of the Series C Preferred Shares on the record date
fixed by the Board of Trust Managers which date shall not
exceed fifteen (15) Business Days prior to the payment date.
Accumulated and unpaid distributions will not bear interest.
(c) PRIORITY AS TO DISTRIBUTIONS.
(i) So long as any Series C Preferred Shares
is outstanding, no distribution of cash or other
property shall be authorized, declared, paid or set
apart for payment on or with respect to any class or
series of Common Shares or any class or series of
other shares of the Company ranking junior as to the
payment of distributions or rights upon voluntary or
involuntary dissolution, liquidation or winding up of
the Partnership to the Series C Preferred Shares
(such Common Shares or other junior shares,
collectively, "JUNIOR SHARES"), nor shall any cash or
other property be set aside for or applied to the
purchase, redemption or other acquisition for
consideration of any Series C Preferred Shares, any
Parity Preferred Shares or any Junior Shares, unless,
<PAGE> 27
in each case, all distributions accumulated on all
Series C Preferred Shares and all classes and series
of outstanding Parity Preferred Shares have been paid
in full. The foregoing sentence will not prohibit (i)
distributions payable solely in Junior Shares, (ii)
the conversion of Series C Preferred Shares, Junior
Shares or Parity Preferred Shares into shares of the
Company ranking junior to the Series C Preferred
Shares as to distributions, and (iii) purchase by the
Company of such Series C Preferred Shares, Parity
Preferred Shares or Junior Shares pursuant to Article
Nineteen of the Declaration of Trust to the extent
required to preserve the Company's status as a real
estate investment trust.
(ii) So long as distributions have not been
paid in full (or a sum sufficient for such full
payment is not irrevocably deposited in trust for
payment) upon the Series C Preferred Shares, all
distributions authorized and declared on the Series C
Preferred Shares and all classes or series of
outstanding Parity Preferred Shares with respect to
distributions shall be authorized and declared so
that the amount of distributions authorized and
declared per Series C Preferred Share and such other
classes or series of Parity Preferred Shares shall in
all cases bear to each other the same ratio that
accrued distributions per Series C Preferred Share
and such other classes or series of Parity Preferred
Shares (which shall not include any accumulation in
respect of unpaid distributions for prior
distribution periods if such class or series of
Parity Preferred Shares do not have cumulative
distribution rights) bear to each other.
(e) NO FURTHER RIGHTS. Holders of Series C Preferred
Shares shall not be entitled to any distributions, whether
payable in cash, other property or otherwise, in excees of
the full cumulative distributions described herein.
SECTION 4. LIQUIDATION PREFERENCE.
(a) PAYMENT OF LIQUIDATING DISTRIBUTIONS,. Subject to
the rights of holders of Parity Preferred Shares with respect
to rights upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and subject to equity
securities ranking senior to the Series C Preferred Shares
with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, the
holders of Series C Preferred Shares shall be entitled to
receive out of the assets of the Company legally available for
distribution or the proceeds thereof, after payment or
provision for debts and other liabilities of the Company, but
before any payment or distributions of the assets shall be
made to holders of Common Shares or any other class or series
of shares of the Company that ranks junior to the Series C
Preferred Shares as to rights upon liquidation, dissolution or
winding-up of the Company, an amount equal to the sum of (i) a
liquidation preference of $25 per Series C Preferred Share,
<PAGE> 28
and (ii) an amount equal to any accumulated and unpaid
distributions thereon, whether or not declared, to the date of
payment. In the event that, upon such voluntary or involuntary
liquidation, dissolution or winding-up, there are insufficient
assets to permit full payment of liquidating distributions to
the holders of Series C Preferred Shares and any Parity
Preferred Shares as to rights upon liquidation, dissolution or
winding-up of the Company, all payments of liquidating
distributions on the Series C Preferred Shares and such Parity
Preferred Shares shall be made so that the payments on the
Series C Preferred Shares and such Parity Preferred Shares
shall in all cases bear to each other the same ratio that the
respective rights of the Series C Preferred Shares and such
other Parity Preferred Shares (which shall not include any
accumulation in respect of unpaid distributions for prior
distribution periods if such Parity Preferred Shares do not
have cumulative distribution rights) upon liquidation,
dissolution or winding-up of the Company bear to each other.
(b) NOTICE. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the
Company, stating the payment date or dates when, and the place
or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (i) fax and
(ii) by first class mail, postage pre-paid, not less than
thirty (30) and not more than sixty (60) days prior to the
payment date stated therein, to each record holder of the
Series C Preferred Shares at the respective addresses of such
holders as the same shall appear on the share transfer records
of the Company.
(c) NO FURTHER RIGHTS. After payment of the full
amount of the liquidating distributions to which they are
entitled, the holders of Series C Preferred Shares will have
no right or claim to any of the remaining assets of the
Company.
(d) CONSOLIDATION, MERGER OR CERTAIN OTHER
TRANSACTIONS. The voluntary sale, conveyance, lease, exchange
or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or
assets of the Company to, or the consolidation or merger or
other business combination of the Company with or into, any
Company, trust or other entity (or of any Company, trust or
other entity with or into the Company) or a statutory share
exchange shall not be deemed to constitute a liquidation,
dissolution or winding-up of the Company.
SECTION 5. OPTIONAL REDEMPTION.
(a) RIGHT OF OPTIONAL REDEMPTION. The Series C
Preferred Shares may not, subject to SECTION 7 hereof, be
redeemed prior to August 13, 2004. On or after such date, the
Company shall have the right to redeem the Series C Preferred
Shares, in whole or in part, at any time or from time to time,
upon not less than 30 nor more than 60 days written notice, at
a redemption price, payable in cash, equal to $25 per Series C
Preferred Share plus accumulated and unpaid distributions,
whether or nor declared, to the date of redemption. If fewer
than all of the outstanding shares of Series C Preferred
Shares are to be redeemed, the Series C Preferred Shares to be
redeemed shall be selected pro rata (as nearly as practicable
without creating fractional units).
<PAGE> 29
(b) LIMITATION ON REDEMPTION. Subject to SECTION 7
hereof, the Company may not redeem fewer than all of the
outstanding Series C Preferred Shares unless all accumulated
and unpaid distributions have been paid on all outstanding
Series C Preferred Shares for all quarterly distribution
periods terminating on or prior to the date of redemption.
(c) PROCEDURES FOR REDEMPTION.
(i) Notice of redemption will be (i) faxed,
and (ii) mailed by the Company, postage prepaid, not
less than thirty (30) nor more than sixty (60) days
prior to the redemption date, addressed to the
respective holders of record of the Series C
Preferred Shares to be redeemed at their respective
addresses as they appear on the transfer records of
the Company. No failure to give or defect in such
notice shall affect the validity of the proceedings
for the redemption of any Series C Preferred Shares
except as to the holder to whom such notice was
defective or not given. In addition to any
information required by law or by the applicable
rules of any exchange upon which the Series C
Preferred Shares may be listed or admitted to
trading, each such notice shall state: (i) the
redemption date, (ii) the redemption price, (iii) the
number of shares of Series C Preferred Shares to be
redeemed, (iv) the place or places where such shares
of Series C Preferred Shares are to be surrendered
for payment of the redemption price, (v) that
distributions on the Series C Preferred Shares to be
redeemed will cease to accumulate on such redemption
date and (vi) that payment of the redemption price
and any accumulated and unpaid distributions will be
made upon presentation and surrender of such Series C
Preferred Shares. If fewer than all of the shares of
Series C Preferred Shares held by any holder are to
be redeemed, the notice mailed to such holder shall
also specify the number of shares of Series C
Preferred Shares held by such holder to be redeemed.
(ii) If the Company gives a notice of
redemption in respect of Series C Preferred Shares
(which notice will be irrevocable) then, by 12:00
noon, Houston time, on the redemption date, the
Company will deposit irrevocably in trust for the
benefit of the Series C Preferred Shares being
redeemed funds sufficient to pay the applicable
redemption price, plus any accumulated and unpaid
distributions, whether or not declared, if any, on
such shares to the date fixed for redemption, without
interest, and will give irrevocable instructions and
authority to pay such redemption price and any
accumulated and unpaid distributions, if any, on such
shares to the holders of the Series C Preferred
Shares upon surrender of the certificate evidencing
the Series C Preferred Shares by such holders at the
<PAGE> 30
place designated in the notice of redemption. If
fewer than all Series C Preferred Shares evidenced by
any certificate is being redeemed, a new certificate
shall be issued upon surrender of the certificate
evidencing all Series C Preferred Shares, evidencing
the unredeemed Series C Preferred Shares without cost
to the holder thereof. On and after the date of
redemption, distributions will cease to accumulate on
the Series C Preferred Shares or portions thereof
called for redemption, unless the Company defaults in
the payment thereof. If any date fixed for redemption
of Series C Preferred Shares is not a Business Day,
then payment of the redemption price payable on such
date will be made on the next succeeding day that is
a Business Day (and without any interest or other
payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year,
such payment will be made on the immediately
preceding Business Day, in each case with the same
force and effect as if made on such date fixed for
redemption. If payment of the redemption price or any
accumulated or unpaid distributions in respect of the
Series C Preferred Shares is improperly withheld or
refused and not paid by the Company, distributions on
such Series C Preferred Shares will continue to
accumulate from the original redemption date to the
date of payment, in which case the actual payment
date will be considered the date fixed for redemption
for purposes of calculating the applicable redemption
price and any accumulated and unpaid distributions.
(d) STATUS OF REDEEMED SHARES. Any Series C Preferred
Shares that shall at any time have been redeemed shall after
such redemption, have the status of authorized but unissued
Preferred Shares, without designation as to class or series
until such shares are once more designated as part of a
particular class or series by the Board of Trust Managers.
SECTION 6. VOTING RIGHTS.
(a) GENERAL. Holders of the Series C Preferred Shares
will not have any voting rights, except as set forth below.
(b) RIGHT TO ELECT TRUST MANAGERS.
(i) If at any time distributions shall be in
arrears with respect to six (6) prior quarterly
distribution periods (including quarterly periods on
the Series C Preferred Units prior to the exchange
into Series C Preferred Shares), whether or not
consecutive, and shall not have been paid in full (a
"PREFERRED DISTRIBUTION Default"), the authorized
number of members of the Board of Trust Managers
shall automatically be increased by two (2) and the
holders of record of such Series C Preferred Shares,
<PAGE> 31
voting together as a single class with the holders of
each class or series of Parity Preferred Shares upon
which like voting rights have been conferred and are
exercisable, will be entitled to fill the vacancies
so created by electing two additional directors to
serve on the Company's Board of Trust Managers (the
"PREFERRED SHARES TRUST MANAGERS") at a special
meeting called in accordance with SECTION 6(B)(II) at
the next annual meeting of shareholders, and at each
subsequent annual meeting of shareholders or special
meeting held in place thereof, until all such
distributions in arrears and distributions for the
current quarterly period on the Series C Preferred
Shares and each such class or series of Parity
Preferred Shares have been paid in full.
(ii) At any time when such voting rights shall
have vested, a proper officer of the Company may,
and upon written request of holders of record of at
least ten percent (10%) of the outstanding Series
C Preferred Shares (addressed to the Secretary at the
principal office of the Company) shall call or cause
to be called a special meeting of the holders of
Series C Preferred Shares and all the series of
Parity Preferred Shares upon which like voting rights
have been conferred and are exercisable
(collectively, the "PARITY SECURITIES"); such call to
be made by special notice similar to that provided in
the By-laws of the Company for a special meeting of
the shareholders or as required by law. If any such
special meeting required to be called as above
provided shall not be called within twenty (20) days
after receipt of any such request, then any holder of
the Series C Preferred Shares may call such meeting
upon the notice above provided, and for that purpose
shall have access to the shareholder records of the
Company. The record date for determining holders of
the Parity Securities entitled to notice of and to
vote at such special meeting will be the close of
business on the third Business Day preceding the day
on which such notice is mailed. At any such special
meeting, all of the holders of the Parity Securities,
by a vote of at least the minimum portion of Parity
Securities permitted under TREITA, voting together as
a single class without regard to series will be
entitled to elect two directors on the basis of one
vote per $25.00 of liquidation preference to which
such Parity Securities are entitled by their terms
(excluding amounts in respect of accumulated and
unpaid dividends) and not cumulatively. The holder or
holders of one-third of the Parity Securities then
outstanding, present in person or by proxy, will
constitute a quorum for the election of the Preferred
Shares Trust Managers except as otherwise provided by
law. Notice of all meetings at which holders of the
Series C Preferred Shares shall be entitled to vote
will be given to such holders at their addresses as
they appear in the transfer records. At any such
<PAGE> 32
meeting or adjournment thereof in the absence of a
quorum, subject to the provisions of any applicable
law, a majority of the holders of the Parity
Securities present in person or by proxy shall have
the power to adjourn the meeting for the election of
the Preferred Shares Trust Managers, without notice
other than an announcement at the meeting, until a
quorum is present. If a Preferred Distribution
Default shall terminate after the notice of a special
meeting has been given but before such special
meeting has been held, the Company shall, as soon as
practicable after such termination, mail or cause to
be mailed notice of such termination to holders of
the Series C Preferred Shares that would have been
entitled to vote at such special meeting.
(iii) If and when all accumulated distributions
and the distribution for the current distribution
period on the Series C Preferred Shares shall have
been paid in full or a sum sufficient for such
payment is irrevocably deposited in trust for payment,
the holders of the Series C Preferred Shares shall be
divested of the voting rights set forth in SECTION
6(B) herein (subject to revesting in the event of
each and every Preferred Distribution Default) and,
if all distributions in arrears and the distributions
for the current distribution period have been paid
in full or set aside for payment in full on all other
classes or series of Parity Preferred Shares upon
which like voting rights have been conferred and are
exercisable, the term and office of each Preferred
Shares Trust Manager so elected shall terminate. Any
Preferred Shares Trust Manager may be removed at any
time with or without cause by the vote of, and shall
not be removed otherwise than by the vote of, the
holders of record of a majority of the outstanding
Series C Preferred Shares when they have the voting
rights set forth in SECTION 6(B) (voting separately
as a single class with all other classes or series of
Parity Preferred Shares upon which like voting rights
have been conferred and are exercisable). So long
as a Preferred Distribution Default shall continue,
any vacancy in the office of a Preferred Shares Trust
Manager may be filled by written consent of the
Preferred Shares Trust Manager remaining in office,
or if none remains in office, by a vote of the
holders of record of a majority of the outstanding
Series C Preferred Shares when they have the voting
rights set forth in SECTION 6(B) (voting separately
as a single class with all other classes or series of
Parity Preferred Shares upon which like voting rights
have been conferred and are exercisable). The
Preferred Shares Trust Manager shall each be entitled
to one vote per director on any matter.
(c) CERTAIN VOTING RIGHTS. Notwithstanding anything
to the contrary contained in the Declaration of Trust, so long
as any Series C Preferred Shares remains outstanding, the
Company shall not, without the affirmative vote of the holders
of at least two-thirds of the Series C Preferred Shares
<PAGE> 33
outstanding at the time: (i) designate or create, or increase
the authorized or issued amount of, any class or series of
shares ranking prior to the Series C Preferred Shares with
respect to payment of distributions or rights upon
liquidation, dissolution or winding-up or reclassify any
authorized shares of the Company into any such shares, or
create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such
shares, (ii) designate or create, or increase the authorized
or issued amount of, any Parity Preferred Shares or reclassify
any authorized shares of the Company into any such shares, or
create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such
shares, but only to the extent such Parity Preferred Shares is
issued to an affiliate of the Company, or (iii) either (A)
consolidate, merge into or with, or convey, transfer or lease
its assets substantially as an entirety, to any company or
other entity, or (B) amend, alter or repeal the provisions of
the Company's Declaration of Trust (including this Designating
Resolution) or By-laws, whether by merger, consolidation or
otherwise, in each case that would materially and adversely
affect the powers, special rights, preferences, privileges or
voting power of the Series C Preferred Shares or the holders
thereof; PROVIDED, HOWEVER, that with respect to the
occurrence of a merger, consolidation or a sale or lease of
all of the Company's assets as an entirety, so long as (a) the
Company is the surviving entity and the Series C Preferred
Shares remains outstanding with the terms thereof unchanged,
or (b) the resulting, surviving or transferee entity is a
corporation or real estate investment trust organized under
the laws of any state and substitutes the Series C Preferred
Shares for other preferred shares having substantially the
same terms and same rights as the Series C Preferred Shares,
including with respect to distributions, voting rights and
rights upon liquidation, dissolution or winding-up, then the
consent of the holders of the Series C Preferred Shares shall
not be required with respect thereto and the occurrence of any
such event shall not be deemed to materially and adversely
affect such rights, privileges or voting powers of the holders
of the Series C Preferred Shares and provided further that any
increase in the amount of authorized Preferred Shares or the
creation or issuance of any other class or series of Preferred
Shares, or any increase in an amount of authorized shares of
each class or series, in each case ranking either (a) junior
to the Series C Preferred Shares with respect to payment of
distributions and the distribution of assets upon liquidation,
dissolution or winding-up, or (b) on a parity with the Series
C Preferred Shares with respect to payment of distributions or
the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Shares is not issued
to an affiliate of the Company, shall not be deemed to
materially and adversely affect such rights, preferences,
privileges or voting powers.
SECTION 7. NO CONVERSION RIGHTS. The holders of the Series C
Preferred Shares shall not have any rights to convert such shares into
shares of any other class or series of stock or into any other
securities of, or interest in, the Company.
<PAGE> 34
SECTION 8. NO SINKING FUND. No sinking fund shall be
established for the retirement or redemption of Series C Preferred
Shares.
SECTION 9. NO PREEMPTIVE RIGHTS. No holder of the Series C
Preferred Shares of the Company shall, as such holder, have any
preemptive rights to purchase or subscribe for additional shares of the
Company or any other security of the Company which it may issue or
sell.
SECTION 10. DECLARATION OF TRUST - ARTICLE THIRTEEN. The
Series C Preferred Shares are deemed to be "Shares" for purposes of
Article Thirteen of the Declaration of Trust; PROVIDED, HOWEVER, that
in no event shall the provisions contained in such Article Thirteen
(including, without limitation, subparagraph (d) thereof) limit any
obligations of the Company or rights of the holders of Series C
Preferred Shares pursuant to this Designating Resolution.
RATIFICATION AND AUTHORIZATION
RESOLVED, that any and all acts and deeds of any officer or Trust Manager
of the company taken prior to the date hereof on behalf of the Company with
regard to the foregoing resolutions are hereby approved, ratified and confirmed
in all respects as and for the acts and deeds of the Company.
FURTHER RESOLVED, that the officers of the Company be, and each of them
hereby is, severally and without the necessity for joinder of any other person,
authorized, empowered and directed to execute and deliver any and all such
further documents and instruments and to do and perform any and all such further
acts and deeds that may be necessary or advisable to effectuate and carry out
the purposes and intents of the foregoing resolutions, including, but not
limited to, the filing of a statement with the County Clerk of Harris County,
Texas, setting forth the designations, preferences, limitations and rights of
Series C Preferred Shares pursuant to Section 3.30 of TREITA, all such actions
to be performed in such manner, and all such documents and instruments to be
executed and delivered in such form, as the officer performing or executing the
same shall approve, the performance or execution thereof by such officer to be
conclusive evidence of the approval thereof by such officer and by the Board of
Trust Managers.
<PAGE> 35
EXHIBIT 4.12
FORM OF
FIRST AMENDMENT TO STATEMENT OF DESIGNATION
OF
SERIES C CUMULATIVE REDEEMABLE PERPETUAL
PREFERRED SHARES
OF
BENEFICIAL INTEREST
OF
CAMDEN PROPERTY TRUST
ARTICLE ONE
CAMDEN PROPERTY TRUST (the "COMPANY"), pursuant to the provisions of
Section 3.30 of the Texas Real Estate Investment Trust Act (the "TREITA"), on
August 13, 1999, adopted a Statement of Designation of 8.25% Series C Cumulative
Redeemable Perpetual Preferred Shares of Beneficial Interest of the Company (the
"INITIAL STATEMENT") prior to the issuance of shares of 8.25% Series C
Cumulative Redeemable Perpetual Preferred Shares of Beneficial Interest, such
series of unissued shares having been established by a resolution duly adopted
by all necessary action on the part of the Company and the Board of Trust
Managers, as provided for in the Amended and Restated Declaration of Trust (the
"DECLARATION OF TRUST"). The Company hereby amends the Initial Statement to
increase the number of shares of 8.25% Series C Cumulative Redeemable Perpetual
Preferred Shares of Beneficial Interest designated pursuant to the Initial
Statement.
ARTICLE TWO
The name of the Company is Camden Property Trust.
ARTICLE THREE
Pursuant to the authority conferred upon the Board of Trust Managers by the
Declaration of Trust and Section 3.30 of the TREITA, the Board of Trust
Managers, pursuant to Section 10.20 of the TREITA, adopted a resolution
increasing the authorized number of 8.25% Series C Cumulative Redeemable
Perpetual Preferred Shares of Beneficial Interest of the Company, as set forth
in the true and correct copy of the resolution attached hereto AS EXHIBIT A (the
"DESIGNATING RESOLUTION").
ARTICLE FOUR
The Designating Resolution was adopted effective as of September 7, 1999.
ARTICLE FIVE
The Designating Resolution was duly adopted by all necessary action on the
part of the Company.
<PAGE> 36
IN WITNESS WHEREOF, the undersigned officer has executed this First
Amendment to Statement of Designation effective as of September 7, 1999.
CAMDEN PROPERTY TRUST
By:__________________________________________
Name:
Title:
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
<PAGE> 37
EXHIBIT A
DESIGNATING RESOLUTION
BOARD OF TRUST MANAGERS
CAMDEN PROPERTY TRUST
SEPTEMBER 7, 1999
AUTHORIZATION OF ADDITIONAL SERIES C CUMULATIVE
CONVERTIBLE PREFERRED SHARES OF BENEFICIAL INTEREST
WHEREAS, the Board of Trust Managers of Camden Property Trust (the
"COMPANY") has established a series of preferred shares designated as "8.25%
Series C Cumulative Redeemable Perpetual Preferred Shares of Beneficial
Interest" (the "SERIES C PREFERRED SHARES") pursuant to that certain Designating
Resolution adopted effective as of August 13, 1999; and
WHEREAS, the Board of Trust Managers has deemed it to be in the best
interests of the Company and its shareholders for the Company to increase the
number of authorized Series C Preferred Shares pursuant to the authority granted
to the Board of Trust Managers in the Amended and Restated Declaration of Trust
(the "DECLARATION OF TRUST") of the Company.
NOW, THEREFORE, BE IT RESOLVED, that, pursuant to the authority vested in
the Board of Trust Managers by the Declaration of Trust, the aggregate number of
shares of Beneficial Interest of Series C Preferred Shares shall be 1,420,000.
FURTHER RESOLVED, that any and all acts and deeds of any officer or Trust
Manager of the company taken prior to the date hereof on behalf of the Company
with regard to the foregoing resolutions are hereby approved, ratified and
confirmed in all respects as and for the acts and deeds of the Company.
FURTHER RESOLVED, that the officers of the Company be, and each of them
hereby is, severally and without the necessity for joinder of any other person,
authorized, empowered and directed to execute and deliver any and all such
further documents and instruments and to do and perform any and all such further
acts and deeds that may be necessary or advisable to effectuate and carry out
the purposes and intents of the foregoing resolutions, including, but not
limited to, the filing of a statement with the County Clerk of Harris County,
Texas, amending the designation of Series C Preferred Shares established as of
August 13, 1999, pursuant to Section 3.30 of TREITA, all such actions to be
performed in such manner, and all such documents and instruments to be executed
and delivered in such form, as the officer performing or executing the same
shall approve, the performance or execution thereof by such officer to be
conclusive evidence of the approval thereof by such officer and by the Board of
Trust Managers.
<PAGE> 38
EXHIBIT 4.13
FORM OF
SECOND AMENDMENT TO STATEMENT OF DESIGNATION
OF
SERIES C CUMULATIVE REDEEMABLE PERPETUAL
PREFERRED SHARES
OF
BENEFICIAL INTEREST
OF
CAMDEN PROPERTY TRUST
ARTICLE ONE
CAMDEN PROPERTY TRUST (the "COMPANY"), pursuant to the provisions of
Section 3.30 of the Texas Real Estate Investment Trust Act (the "TREITA"), on
August 13, 1999, adopted a Statement of Designation of 8.25% Series C Cumulative
Redeemable Perpetual Preferred Shares of Beneficial Interest of the Company (the
"INITIAL STATEMENT") prior to the issuance of shares of 8.25% Series C
Cumulative Redeemable Perpetual Preferred Shares of Beneficial Interest, such
series of unissued shares having been established by a resolution duly adopted
by all necessary action on the part of the Company and the Board of Trust
Managers, as provided for in the Amended and Restated Declaration of Trust (the
"DECLARATION OF TRUST"). Pursuant to that certain First Amendment to Statement
of Designation of Series C Cumulative Redeemable Perpetual Preferred Shares of
Beneficial Interest of Camden Property Trust, dated as of September 7, 1999 (the
"FIRST AMENDMENT"), the Company amended the Initial Statement to increase the
number of shares of 8.25% Series C Cumulative Redeemable Perpetual Preferred
Shares of Beneficial Interest designated pursuant to the Initial Statement. The
Company hereby amends the Initial Statement, as amended by the First Amendment,
to increase the number of shares of 8.25% Series C Cumulative Redeemable
Perpetual Preferred Shares of Beneficial Interest designated pursuant to the
Initial Statement.
ARTICLE TWO
The name of the Company is Camden Property Trust.
ARTICLE THREE
Pursuant to the authority conferred upon the Board of Trust Managers by the
Declaration of Trust and Section 3.30 of the TREITA, the Board of Trust
Managers, pursuant to Section 10.20 of the TREITA, adopted a resolution
increasing the authorized number of 8.25% Series C Cumulative Redeemable
Perpetual Preferred Shares of Beneficial Interest of the Company, as set forth
in the true and correct copy of the resolution attached hereto AS EXHIBIT A (the
"DESIGNATING RESOLUTION").
ARTICLE FOUR
The Designating Resolution was adopted effective as of January 7, 2000.
ARTICLE FIVE
The Designating Resolution was duly adopted by all necessary action on the
part of the Company.
<PAGE> 39
IN WITNESS WHEREOF, the undersigned officer has executed this Second
Amendment to Statement of Designation effective as of January 7, 2000.
CAMDEN PROPERTY TRUST
By:_____________________________________
Name:
Title:
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
<PAGE> 40
EXHIBIT A
DESIGNATING RESOLUTION
BOARD OF TRUST MANAGERS
CAMDEN PROPERTY TRUST
JANUARY 7, 2000
AUTHORIZATION OF ADDITIONAL SERIES C CUMULATIVE
CONVERTIBLE PREFERRED SHARES OF BENEFICIAL INTEREST
WHEREAS, the Board of Trust Managers of Camden Property Trust (the
"COMPANY") has established a series of preferred shares designated as "8.25%
Series C Cumulative Redeemable Perpetual Preferred Shares of Beneficial
Interest" (the "SERIES C PREFERRED SHARES") pursuant to that certain Designating
Resolution adopted effective as of August 13, 1999;
WHEREAS, the Board of Trust Managers has previously increased the number of
authorized Series C Preferred Shares pursuant to that certain Designating
Resolution adopted effective as of September 7, 1999;
WHEREAS, the Board of Trust Managers has deemed it to be in the best
interests of the Company and its shareholders for the Company to further
increase the number of authorized Series C Preferred Shares pursuant to the
authority granted to the Board of Trust Managers in the Amended and Restated
Declaration of Trust (the "DECLARATION OF TRUST") of the Company.
NOW, THEREFORE, BE IT RESOLVED, that, pursuant to the authority vested in
the Board of Trust Managers by the Declaration of Trust, the aggregate number of
shares of Beneficial Interest of Series C Preferred Shares shall be 2,120,000.
FURTHER RESOLVED, that any and all acts and deeds of any officer or Trust
Manager of the Company taken prior to the date hereof on behalf of the Company
with regard to the foregoing resolutions are hereby approved, ratified and
confirmed in all respects as and for the acts and deeds of the Company.
FURTHER RESOLVED, that the officers of the Company be, and each of them
hereby is, severally and without the necessity for joinder of any other person,
authorized, empowered and directed to execute and deliver any and all such
further documents and instruments and to do and perform any and all such further
acts and deeds that may be necessary or advisable to effectuate and carry out
the purposes and intents of the foregoing resolutions, including, but not
limited to, the filing of a statement with the County Clerk of Harris County,
Texas, amending the designation of Series C Preferred Shares established as of
August 13, 1999, pursuant to Section 3.30 of TREITA, all such actions to be
performed in such manner, and all such documents and instruments to be executed
and delivered in such form, as the officer performing or executing the same
shall approve, the performance or execution thereof by such officer to be
conclusive evidence of the approval thereof by such officer and by the Board of
Trust Managers.
<PAGE> 41
EXHIBIT 10.15
FORM OF
SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF CAMDEN OPERATING, L.P.
THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF CAMDEN OPERATING, L.P. (this "AMENDMENT") is entered into as of
August 13, 1999, by and between CPT-GP, Inc. ("GENERAL PARTNER"), a Delaware
corporation and a wholly owned subsidiary of Camden USA, Inc. ("CAMDEN USA"), a
Delaware corporation, a wholly owned subsidiary of Camden Property Trust ("CPT
"or the "GENERAL PARTNER ENTITY"), a Texas real estate investment trust, as the
general partner of Camden Operating, L.P., a Delaware limited partnership (the
"PARTNERSHIP") and Edgewater Equity, Inc., a Delaware corporation ("EDGEWATER,
INC.") and Edgewater Equity Partners, L.P., a Delaware limited partnership
("EDGEWATER, L.P."; each of Edgewater, Inc. and Edgewater, L.P. a "SERIES C
PREFERRED PARTNER" and collectively "SERIES C PREFERRED PARTNERS").
RECITALS
WHEREAS, the signatories hereto desire to amend that certain Third
Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P.,
dated as of April 15, 1997, as amended by that certain First Amendment to Third
Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P.,
dated as of February 23, 1999 (collectively, as amended, the "AGREEMENT") as set
forth herein; any terms capitalized herein but not defined herein having the
definitions therefor set forth in the Agreement.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises set forth herein, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree to continue the Partnership and amend the
Agreement as follows:
1. As of the date hereof (a) Edgewater, Inc. has contributed $5,000,000
to the Partnership in exchange for the issuance to Edgewater, Inc. of 200,000
Series C Preferred Units (as defined in the Agreement, as amended hereby), and
(b) Edgewater, L.P. has contributed $8,000,000 to the Partnership in exchange
for the issuance of 320,000 Series C Preferred Units. The Series C Preferred
Units issued to the Series C Preferred Partners have been duly issued and fully
paid. The Series C Preferred Partners are hereby admitted to the Partnership,
effective as of August 13, 1999, each as an Additional Limited Partner (the
information set forth on EXHIBIT A attached hereto relating to the interest of
the Series C Preferred Partners in the Partnership is hereby included in Exhibit
A to the Agreement), and by execution of this Amendment the Series C Preferred
Partners have agreed to be bound by all of the terms and conditions of the
Agreement, as amended hereby.
2. DEFINITIONS.
A. The words "Series C Preferred Units" are inserted after the
word "Series B Preferred Units" in the first sentence of the definition
of "Partnership Unit" in Article I of the Agreement.
B. The following new definitions are inserted in Article I of
the Agreement so as to preserve alphabetical order:
"EXCESS SERIES C UNITS" shall have the meaning set forth
therefor in Section 17.9.A hereof.
<PAGE> 42
"PARTNERSHIP NET ASSET VALUE" means, with respect to any
fiscal quarter of the Partnership, (A) the product of (1) the Net
Operating Income for such quarter (as determined based upon the
financial information of the Partnership provided by the Partnership
pursuant to Section 4(f) of the Series C Preferred Contribution
Agreement) multiplied by four and (2) eleven, less (B) all Indebtedness
of the Partnership.
"NET OPERATING INCOME" means, with respect to any fiscal
quarter of the Partnership, all cash received by the Partnership from
whatever source (excluding the proceeds of any Capital Contributions
and any capital transactions (e.g., refinancings, sales of assets,
casualty or condemnation)) less the aggregate of the following: (i) all
interest payments in respect of Partnership Indebtedness made during
such quarter by the Partnership; and (ii) all operating expenses made
by the Partnership during such quarter.
"PARITY PREFERRED UNITS" shall have the meaning set forth
therefor in Section 17.1 hereof.
"SERIES C EXCHANGE NOTICE" shall have the meaning set forth
therefor in Section 17.9.B hereof.
"SERIES C EXCHANGE PRICE" shall have the meaning set forth
therefor in Section 17.9.A hereof.
"SERIES C PREFERRED CONTRIBUTION AGREEMENT" means,
collectively, that certain (i) Contribution Agreement, dated as of
August 13, 1999, by and among, Edgewater Equity, Inc., CPT and
Partnership, and (ii) Contribution Agreement, dated as of August 13,
1999, by and among, Edgewater Equity Partners, L.P., CPT and
Partnership.
"SERIES C PREFERRED PARTNERS" means Edgewater, Inc. and
Edgewater, L.P., and their respective successors and assigns.
"SERIES C PREFERRED SHARES" shall have the meaning set
forth therefor in Section 17.9.A hereof.
"SERIES C PREFERRED UNIT DISTRIBUTION PAYMENT DATE" shall
have the meaning set forth therefor in Section 17.3.A hereof.
"SERIES C PREFERRED UNIT PARTNERSHIP RECORD DATE" shall
have the meaning set forth therefor in Section 17.3.A hereof.
"SERIES C PREFERRED UNITS" shall have the meaning set forth
therefor in Section 17.2 hereof.
"SERIES C PRIORITY RETURN" shall have the meaning set forth
therefor in Section 17.1 hereof.
"SERIES C REDEMPTION PRICE" shall have the meaning set
forth therefor in Section 17.6 hereof.
"UNITS JUNIOR TO SERIES C" shall have the meaning set forth
therefor in Section 17.3.C hereof.
<PAGE> 43
3. ARTICLE I. The definition of "PARITY PREFERRED UNITS" set forth in
Article I is hereby deleted and replaced with the following:
""PARITY PREFERRED UNITS" shall have the meaning set forth therein
in Section 17.1 hereof."
4. SECTION 4.2.D. Section 4.2.D of the Agreement is amended by
inserting the word "four " in lieu of the word "three" in the second line
thereof, and by inserting the words "and Series C Preferred Units" after the
words "Series B Preferred Units" at the end of the first sentence thereof.
5. SECTION 8.4. Nothing contained in Section 8.4 of the Agreement
shall modify or limit in any way any of the provisions of Article XVII of the
Agreement.
6. SECTION 8.6. The provisions of Section 8.6 of the Agreement shall
not be applicable to the Series C Preferred Units.
7. TRANSFERS. Section 11.1.A of the Agreement is amended by inserting
the words "or an exchange pursuant to Sections 16.9 or 17.9 hereof" after the
words "Section 8.6" in the last line thereof. Section 11.3.A of the Agreement is
amended by inserting the words "or an exchange pursuant to Sections 16.9 or 17.9
hereof" after the words "Section 8.6" in the second line thereof. Section 11.3.A
is further modified to include the following sentence after the last sentence
thereof: "Notwithstanding anything in this Section 11.3 (but not including
11.3.C) to the contrary, the General Partner shall not unreasonably withhold its
consent to any Transfer of any Series C Preferred Units, provided the provisions
of Sections 11.3.B, 11.3.D. 11.3.E, 11.3.F, 11.4.B and 11.6 hereof are
satisfied." Section 11.3.C of the Agreement is amended by adding the following
new clause (x) after clause (ix) thereof: "and (x) notwithstanding any clause of
this Section 11.3.C to the contrary, in the case of any Series C Preferred
Partner, to an Affiliate of such Series C Preferred Partner, provided such
transfer is made in accordance with Sections 11.3.D, 11.3.E, 11.3.F and 11.4.B
of the Agreement (for the sake of this clause (x) and Section 11.6.C (as it
relates to the Series C Preferred Units) only, the word "Affiliate" shall mean,
in respect to any person or entity, any other person or entity directly or
indirectly controlling, controlled by or under common control of such person or
entity whether or not such control shall include a controlling ownership
interest and shall include with respect to any such person or entity the power
to direct the management and policies of such person or entity, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise)." The following sentence is inserted after the last sentence of
Section 11.4.A of the Agreement: "Notwithstanding anything in Section 11.4
hereof to the contrary, the General Partner shall not unreasonably withhold its
consent to the admission of a transferee of Series C Preferred Units as a
Limited Partner, in respect of an exchange of Series C Preferred Units to a
permitted transferee under Section 11.3.C hereof, provided that the effect of
such admission would not be to cause the Partnership to have more than 500
Partners or to be a publicly traded partnership within the meaning of Section
7704 of the Code, and any such transferee shall, upon satisfaction of all of the
conditions set forth in Sections 11.3.B, 11.3.D. 11.3.E, 11.3.F, 11.4.B and 11.6
hereof be admitted to the Partnership as a Substituted Limited Partner
hereunder." Sections 11.6.A and 11.6.B of the Agreement each are amended by
inserting the words "or an exchange pursuant to Sections 16.9 or 17.9 hereof "
after the words "Section 8.6" therein. The following language is inserted at the
end of Section 11.6.C of the Agreement: "; PROVIDED, HOWEVER, that a Series C
Preferred Partner may make a Transfer to an Affiliate of such Series C Preferred
Partner in accordance with the provisions of Section 11.3.C hereof without
regard to such limitation." The last sentence of Section 11.6.D is hereby
modified by inserting the words "or Series C Preferred Unit Partnership Date, as
the case may be" after the words "Partnership Record Date ".
8. SECTION 12.2.B. The last sentence of Section 12.2.B shall not be
deemed applicable to distributions in respect of the Series C Preferred Shares.
<PAGE> 44
9. SECTION 16.1. The first sentence of Section 16.1 is hereby deleted
in its entirety.
10. ARTICLE XVII. The following new Article XVII is inserted in the
Agreement after Article XVI thereof:
ARTICLE XVII
SERIES C CUMULATIVE
REDEEMABLE PERPETUAL PREFERRED UNITS
SECTION 17.1 DEFINITIONS
The term "PARITY PREFERRED UNITS" shall be used to refer to
any class or series of Partnership Interests now or hereafter
authorized, issued or outstanding expressly designated by the
Partnership to rank on a parity with Series C Preferred Units with
respect to distributions and rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Partnership (including,
without limitation, the Series B Preferred Units). The term "SERIES C
PRIORITY RETURN" shall mean, an amount equal to 8.25% per annum,
determined on the basis of a 360 day year of twelve 30 day months (or
actual days for any month which is shorter than a full monthly period),
cumulative to the extent not distributed for any given distribution
period pursuant to Section 5.1 hereof, of the stated value of $25 per
Series C Preferred Unit, commencing on the date of issuance of such
Series C Preferred Unit.
SECTION 17.2 DESIGNATION AND NUMBER
A series of Partnership Units in the Partnership designated as
the "8.25% Series C Cumulative Redeemable Perpetual Preferred Units"
(the "SERIES C PREFERRED UNITS") is hereby established. The number of
Series C Preferred Units shall be 520,000.
SECTION 17.3 DISTRIBUTIONS
A. PAYMENT OF DISTRIBUTIONS. Subject to the rights of holders
of Parity Preferred Units as to the payment of distributions, pursuant
to Sections 5.1, 5.3 and 13.2 hereof, holders of Series C Preferred
Units shall be entitled to receive, when, as and if declared by the
Partnership acting through the General Partner, out of Available Cash,
cumulative preferential cash distributions at the rate per annum of
8.25% of the original Capital Contribution per Series C Preferred Unit.
With respect to the Holders of the Series C Preferred Units, the
original Capital Contribution per Series C Preferred Unit is $25. Such
distributions shall be cumulative, shall accrue from the original date
of issuance and will be payable (i) quarterly (such quarterly periods
for purposes of payment and accrual will be the quarterly periods
ending on the dates specified in this sentence and not calendar year
quarters) in arrears, not later than the third calendar day after March
31, June 30, September 30 and December 31 of each year commencing on
September 30, 1999 and, (ii) in the event of (a) an exchange of Series
C Preferred Units into Series C Preferred Shares, or (b) a redemption
of Series C Preferred Units, on the exchange date or redemption date,
as applicable (each a "SERIES C PREFERRED UNIT DISTRIBUTION PAYMENT
DATE"). The amount of the distribution payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months and for
any period shorter than a full quarterly period for which distributions
are computed, the amount of the distribution payable will be computed
on the basis of the actual number of days elapsed in such a 30-day
month. If any date on which distributions are to be made on the Series
C Preferred Units is not a Business Day, then payment of the
distribution to be made on such date will be made on the next
succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such
<PAGE> 45
Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. Distributions
on the Series C Preferred Units will be made to the holders of record
of the Series C Preferred Units on the relevant record dates to be
fixed by the Partnership acting through the General Partner, which
record dates shall in no event exceed fifteen (15) Business Days prior
to the relevant Series C Preferred Unit Distribution Payment Date (the
"SERIES C PREFERRED UNIT PARTNERSHIP RECORD DATE").
B. DISTRIBUTIONS CUMULATIVE. Distributions on the Series C
Preferred Units will accrue whether or not the terms and provisions of
any agreement of the Partnership, including any agreement relating to
its Indebtedness at any time prohibit the current payment of
distributions, whether or not the Partnership has earnings, whether or
not there are funds legally available for the payment of such of such
distributions and whether or not such distributions are authorized.
Accrued but unpaid distributions on the Series C Preferred Units will
accumulate as of the Series C Preferred Unit Distribution Payment Date
on which they first become payable. Distributions on account of arrears
for any past distribution periods may be declared and paid at any time,
without reference to a regular Series C Preferred Unit Distribution
Payment Date to holders of record of the Series C Preferred Units on
the record date fixed by the Partnership acting through the General
Partner which date shall not exceed fifteen (15) Business Days prior to
the payment date. Accumulated and unpaid distributions will not bear
interest.
C. PRIORITY AS TO DISTRIBUTIONS.
(i) So long as any Series C Preferred Units are
outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or
with respect to any class or series of Partnership Interest
ranking junior as to the payment of distributions or rights
upon a voluntary or involuntary liquidation, dissolution or
winding-up of the Partnership to the Series C Preferred Units
(collectively, "UNITS JUNIOR TO SERIES C"), nor shall any cash
or other property be set aside for or applied to the purchase,
redemption or other acquisition for consideration of any
Series C Preferred Units, any Parity Preferred Units or any
Units Junior to Series C, unless, in each case, all
distributions accumulated on all Series C Preferred Units and
all classes and series of outstanding Parity Preferred Units
have been paid in full. The foregoing sentence will not
prohibit (a) distributions payable solely in Units Junior to
Series C or, in accordance with Section 8.6 hereof, common
shares of beneficial interest (or any similar equity security)
of the General Partner Entity, (b) the conversion of Units
Junior to Series C or Parity Preferred Units into Units Junior
to Series C or common shares of beneficial interest (or any
similar equity security) of the General Partner Entity, and
(c) the redemption of Partnership Interests corresponding to
any Series C Preferred Shares, Parity Preferred Shares or
Junior Shares (as those terms are defined in that certain
Statement of Designation of Series C Cumulative Redeemable
Perpetual Preferred Shares of Beneficial Interest of the
General Partner Entity (the "SERIES C DESIGNATION")
establishing the Series C Preferred Shares (as hereinafter
defined) to be purchased by the General Partner Entity
pursuant to Article Nineteen of the Declaration of Trust.
(ii) So long as distributions have not been paid in full
(or a sum sufficient for such full payment is not irrevocably
deposited in trust for payment) upon the Series C Preferred
Units, all distributions authorized and declared on the Series
C Preferred Units and all classes or series of outstanding
Parity Preferred Units shall be authorized and declared so
that the amount of distributions authorized and declared per
Series C Preferred Unit and such other classes or series of
Parity Preferred Units shall in all cases bear to each other
the same ratio that accrued distributions per Series C
Preferred Unit and such other classes or series of Parity
Preferred Units (which shall not include any accumulation in
<PAGE> 46
respect of unpaid distributions for prior distribution
periods if such class or series of Parity Preferred Units do
not have cumulative distribution rights) bear to each other.
D. NO FURTHER RIGHTS. Holders of Series C Preferred Units
shall not be entitled to any distributions, whether payable in cash,
other property or otherwise, in excess of the full cumulative
distributions described herein.
SECTION 17.4 ALLOCATIONS
Sections 6.1.A and 6.1.B of the Agreement are hereby deleted
and replaced by the following:
NET INCOME. After giving effect to the special allocations
set forth in Section 1 of EXHIBIT C and Section 6.2 below, Net Income
shall be allocated:
(i) first, to the General Partner to the extent that Net Losses
previously allocated to the General Partner pursuant to Section
6.1.B(iii) below for all prior taxable years exceed Net Income
previously allocated to the General Partner pursuant to this
Section 6.1.A(i) for all prior taxable years,
(ii) second, to holders of Partnership Interests that are
entitled to any preference in distribution to the extent that Net
Losses previously allocated to such holders pursuant to Section
6.1.B(ii) below for all prior taxable years exceed Net Income
previously allocated to such holders pursuant to this Section
6.1.A(ii) for all prior taxable years,
(iii) third, to holders of Partnership Interests of a class not
entitled to preference in distribution to the extent that Net
Losses previously allocated to such holders pursuant to Section
6.1.B(i) below for all prior taxable years exceed Net Income
previously allocated to such holders pursuant to this Section
6.1.A(iii) for all prior taxable years,
(iv) fourth, to the holders of any Partnership Interests that are
entitled to any preference in distribution in accordance with the
rights of any such class of Partnership Interests (including
Series B Preferred Units and Series C Preferred Units) until each
such Partnership Interest has been allocated Net Income equal to
the EXCESS OF (x) the cumulative amount of preferred
distributions the holder of such Partnership Interests is
entitled to receive (Series B Priority Return, in the case of
Series B Preferred Units and Series C Priority Return, in the
case of Series C Preferred Units and, as between the holders of
Series B Preferred Units and the Series C Preferred Units, pro
rata in proportion to the respective amount of cumulative
preferred distributions that each such holder is entitled to
receive) to the last day of the current taxable year or to the
date of redemption, to the extent such Partnership Interests are
redeemed during such taxable year, OVER (y) the cumulative Net
Income allocated to such holder, pursuant to this Section
6.1.A(iv) for all prior taxable years, and
(v) fifth, with respect to Partnership Interests that are not
entitled to any preference in the allocation of Net Income, pro
rata to each such class in accordance with the terms of such
<PAGE> 47
class (and, within such class, pro rata in proportion to the
respective Percentage Interests as of the last day of the period
for which such allocation is being made).
NET LOSSES. After giving effect to the special allocations
set forth in Section 1 of EXHIBIT C and Section 6.2, Net Losses shall
be allocated:
(i) first, with respect to classe s of Partnership Interests that
are not entitled to any preference in distribution (including the
General Partner Interest), pro rata to each such class in
accordance with the terms of such class (and, within such class,
pro rata in proportion to the respective Percentage Interests as
of the last day of the period for which such allocation is being
made) until the Adjusted Capital Account (ignoring for this
purpose any amounts a Partner is obligated to contribute to the
capital of the Partnership or is deemed obligated to contribute
pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)) of each
Partner in such classes is reduced to zero,
(ii) second, to the holders of any Partnership Interests that are
entitled to any preference in distribution (including Series B
Preferred Units and Series C Preferred Units) in accordance with
the rights of any such class of Partnership Interests (and, if
there is more than one class of such Partnership Interests, then
in the reverse order of their preference in distribution and if
there is no preference, then among the holders thereof pro rata
among them in proportion to their Adjusted Capital Account
balances), until the Adjusted Capital Account (modified in the
same manner as in clause (i)) of each such holder is reduced to
zero, and
(iii) third, to the General Partner.
To the extent permitted under Section 704 of the Code, solely
for purposes of allocating Net Income or Net Losses in any taxable year
(or a portion thereof) to the holders of Series B Preferred Units and
Series C Preferred Units pursuant to Section 6.1 hereof, items of Net
Income or Net Losses, as the case may be, shall not include
Depreciation with respect to properties that are "ceiling limited" in
respect of holders of Series B Preferred Units or Series C Preferred
Units. For purposes of the preceding sentence, Partnership property
shall be considered "ceiling limited" in respect of a holder of Series
B Preferred Units or Series C Preferred Units if Depreciation
attributable to such Partnership property which would otherwise be
allocable to such holder, without regard to this paragraph, exceeds
depreciation determined for federal income tax purposes attributable to
such Partnership property which would otherwise be allocable to such
holder by more than 5%.
SECTION 17.5 LIQUIDATION PROCEEDS
A. DISTRIBUTIONS UPON CERTAIN EVENTS. Upon voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership,
distributions on the Series C Preferred Units shall be made in
accordance with Section 13.2 hereof; PROVIDED, HOWEVER, that upon any
such liquidation, dissolution or winding-up of the Partnership, the
Liquidator may elect, in its sole discretion, to cause the Partnership
or the General Partner Entity to issue to the holders of the Series C
Preferred Units such number of Series C Preferred Shares as such holder
would have received had they exercised their Exchange Rights in
accordance with Section 17.9 hereof (it being assumed for purposes
hereof that such holders would then be entitled to exercise such
Exchange Rights) in lieu of the cash otherwise distributable to the
Series C Preferred Partners pursuant to Section 13.2 hereof.
<PAGE> 48
B. NOTICE. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership,
stating the payment date or dates when, and the place or places where,
the amounts distributable in such circumstances shall be payable, shall
be given by (i)fax and (ii) by first class mail, postage pre-paid, not
less than thirty (30) and not more than sixty (60) days prior to the
payment date stated therein, to each record holder of the Series C
Preferred Units at the respective addresses of such holders as the
same shall appear on the transfer records of the Partnership.
C. NO FURTHER RIGHTS. After payment of the full amount
of the liquidating distributions to which they are entitled (whether
in accordance with Section 13.2 hereof, or by delivery of Series C
Preferred Shares in accordance with Section 17.5.A hereof or both),
the holders of Series C Preferred Units will have no right or claim to
any of the remaining assets of the Partnership.
D. CONSOLIDATION, MERGER OR CERTAIN OTHER TRANSACTIONS. The
voluntary sale, conveyance, lease, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the General Partner to,
or the consolidation or merger or other business combination of the
Partnership with or into, any corporation, trust, partnership, limited
liability company or other entity (or of any corporation, trust,
partnership, limited liability company or other entity with or into the
Partnership) shall not be deemed to constitute a liquidation,
dissolution or winding-up of the Partnership.
SECTION 17.6 OPTIONAL REDEMPTION
A. RIGHT OF OPTIONAL REDEMPTION. The Series C Preferred Units
may not be redeemed prior to the fifth (5th) anniversary of the
issuance date. On or after such date, the Partnership shall have the
right to redeem the Series C Preferred Units, in whole or in part, at
any time or from time to time, upon not less than 30 nor more than 60
days written notice, at a redemption price, payable in cash, equal to
the Capital Account balance of the holder of Series C Preferred Units
(the "SERIES C REDEMPTION PRICE") or, if greater, the original Capital
Contribution of such holder plus the current Series C Priority Return,
whether or not declared to the relevant date, to the extent not
previously distributed; PROVIDED, HOWEVER, that no redemption pursuant
to this Section 17.6 will be permitted if the Series C Redemption Price
does not equal or exceed the original Capital Contribution of such
holder plus the cumulative Series C Priority Return, whether or not
declared, to the redemption date to the extent not previously
distributed. If fewer than all of the outstanding Series C Preferred
Units are to be redeemed, the Series C Preferred Units to be redeemed
shall be selected pro rata (as nearly as practicable without creating
fractional units).
B. LIMITATION ON REDEMPTION. The Partnership may not redeem
fewer than all of the outstanding Series C Preferred Units unless all
accumulated and unpaid distributions have been paid on all Series C
Preferred Units for all quarterly distribution periods terminating on
or prior to the date of redemption.
C. PROCEDURES FOR REDEMPTION.
(i) Notice of redemption will be (a) faxed, and (b)
mailed by the Partnership, by certified mail, postage prepaid,
not less than 30 nor more than 60 days prior to the redemption
date, addressed to the respective holders of record of the
Series C Preferred Units at their respective addresses as they
appear on the records of the Partnership. No failure to give
or defect in such notice shall affect the validity of the
proceedings for the redemption of any Series C Preferred Units
except as to the holder to whom such notice was defective or
not given. In addition to any information required by law,
each such notice shall state: (m) the redemption date, (n) the
<PAGE> 49
Series C Redemption Price, (o) the aggregate number of Series
C Preferred Units to be redeemed and if fewer than all of the
outstanding Series C Preferred Units are to be redeemed, the
number of Series C Preferred Units to be redeemed held by such
holder, which number shall equal such holder's pro rata share
(based on the percentage of the aggregate number of
outstanding Series C Preferred Units the total number of
Series C Preferred Units held by such holder represents) of
the aggregate number of Series C Preferred Units to be
redeemed, (p) the place or places where such Series C
Preferred Units are to be surrendered for payment of the
Series C Redemption Price, (q) that distributions on the
Series C Preferred Units to be redeemed will cease to
accumulate on such redemption date and (r) that payment of the
Series C Redemption Price will be made upon presentation and
surrender of such Series C Preferred Units and execution and
delivery by the holder of Series C Preferred Units of an
assignment of Partnership Interest pursuant to which such
holder shall assign the Series C Preferred Units to the
Partnership, shall represent and warrant that such Series C
Preferred Units are unencumbered and not subject to any lien
and that such holder has good title to such Series C Preferred
Units and that such holder has requisite authority to assign
the Series C Preferred Units to the Partnership pursuant to
such assignment of Partnership Interest and shall provide such
additional representations and warranties and assurances
(including opinions of counsel) as shall be reasonably
requested by the Partnership; provided that no Series C
Preferred Units shall be redeemed by the Partnership unless
and until the holder thereof shall have satisfied all of the
conditions to such redemption (including, without limitation,
the delivery of the foregoing assignment and further
assurances).
(ii) If the Partnership gives a notice of redemption
in respect of Series C Preferred Units (which notice will be
irrevocable) then, by 12:00 noon, New York City time, on the
redemption date, the Partnership will deposit irrevocably in
trust for the benefit of the Series C Preferred Units being
redeemed funds sufficient to pay the applicable Series C
Redemption Price and will give irrevocable instructions and
authority to pay such Series C Redemption Price to the holders
of the Series C Preferred Units upon surrender of the Series C
Preferred Units by such holders at the place designated in the
notice of redemption, the delivery by such holders of the
opinions of counsel and future assurances further described in
Section 17.6.C(i) hereof, and the execution and delivery by
such holders of an assignment as further described in Section
17.6.C(i) hereof. If the Series C Preferred Units are
evidenced by a certificate and if fewer than all Series C
Preferred Units evidenced by any certificate are being
redeemed, a new certificate shall be issued upon surrender of
the certificate evidencing all Series C Preferred Units,
evidencing the unredeemed Series C Preferred Units without
cost to the holder thereof. On and after the date of
redemption, distributions will cease to accumulate on the
Series C Preferred Units or portions thereof called for
redemption, unless the Partnership defaults in the payment
thereof. If any date fixed for redemption of Series C
Preferred Units is not a Business Day, then payment of the
Series C Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as
if made on such date fixed for redemption. If payment of the
Series C Redemption Price is improperly withheld or refused
and not paid by the Partnership, distributions on such Series
C Preferred Units will continue to accumulate from the
original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the applicable Series C
Redemption Price.
<PAGE> 50
D. The provisions of Section 8.6 of this Agreement do not
apply to redemptions undertaken pursuant to this Article XVII.
SECTION 17.7 VOTING RIGHTS
A. GENERAL. Holders of the Series C Preferred Units will not
have any voting rights or right to consent to any matter requiring the
consent or approval of the Limited Partners, except as provided in
Sections 7.3 and 14.1.C and this Section 17.7. In the event of any
inconsistency between any other provision of this Agreement and the
provisions of this Section 17.7, the provisions of this Section 17.7
shall control.
B. CERTAIN VOTING RIGHTS. So long as any Series C Preferred
Units remain outstanding, the Partnership shall not, without the
affirmative vote of the holders of at least two-thirds of the Series C
Preferred Units outstanding at the time: (i) authorize or create, or
increase the authorized or issued amount of, any class or series of
Partnership Interests ranking senior to the Series C Preferred Units
with respect to payment of distributions or rights upon liquidation,
dissolution or winding-up or reclassify any Partnership Interests into
any such senior Partnership Interest, or create, authorize or issue any
obligations or security convertible into or evidencing the right to
purchase any such senior Partnership Interests; (ii) authorize or
create, or increase the authorized or issued amount of any Parity
Preferred Units or reclassify any Partnership Interest into any such
Partnership Interest or create, authorize or issue any obligations or
security convertible into or evidencing the right to purchase any such
Partnership Interests but only to the extent such Parity Preferred
Units are issued to an Affiliate of the Partnership, other than the
General Partner Entity to the extent the issuance of such interests was
to allow the General Partner Entity to issue corresponding preferred
shares to persons who are not Affiliates of the Partnership; or (iii)
either (A) consolidate, merge into or with, or (other than in a manner
which results in a liquidation of the Partnership and the distributions
provided for in Section 17.5 hereof (which distributions must be in the
form of Series C Preferred Shares at any time prior to the fifth (5th)
anniversary of the date hereof)) convey, transfer or lease its assets
substantially as an entirety to, any corporation or other entity or (B)
amend, alter or repeal the provisions of the Agreement, whether by
merger, consolidation or otherwise, that would materially and adversely
affect the powers, special rights, preferences, privileges or voting
power of the Series C Preferred Units or the holders thereof; PROVIDED,
HOWEVER, that with respect to the occurrence of a merger, consolidation
or a sale or lease of all of the Partnership's assets as an entirety,
so long as (l) the Partnership is the surviving entity and the Series C
Preferred Units remain outstanding with the terms thereof unchanged, or
(2) the resulting, surviving or transferee entity is a partnership,
limited liability company or other pass-through entity organized under
the laws of any state and substitutes for the Series C Preferred Units
other interests in such entity having substantially the same terms and
rights as the Series C Preferred Units, including with respect to
distributions, voting rights and rights upon liquidation, dissolution
or winding-up, then the occurrence of any such event shall not be
deemed to materially and adversely affect such rights, privileges or
voting powers of the holders of the Series C Preferred Units (and shall
not require the vote or consent of any of the holders of the Series C
Preferred Units); and PROVIDED FURTHER that any increase in the amount
of Partnership Interests or the creation or issuance of any other class
or series of Partnership Interests, in each case ranking (y) junior to
the Series C Preferred Units with respect to payment of distributions
and the distribution of assets upon liquidation, dissolution or
winding-up, or (z) on a parity to the Series C Preferred Units with
respect to payment of distributions and the distribution of assets upon
liquidation, dissolution or winding-up to the extent such Partnership
Interests are not issued to an affiliate of the Partnership, other than
the General Partner Entity to the extent the issuance of such interests
was to allow the General Partner Entity to issue corresponding
<PAGE> 51
preferred shares to persons who are not affiliates of the Partnership,
shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers (and shall not require the
vote or consent of any of the holders of the Series C Preferred Units).
SECTION 17.8 TRANSFER RESTRICTIONS
The Series C Preferred Units shall be subject to the
provisions of Article XI of the Agreement, as amended by this
Amendment.
SECTION 17.9 EXCHANGE RIGHTS
A. RIGHT TO EXCHANGE.
(i) Series C Preferred Units will be exchangeable in
whole or in part at anytime on or after the tenth (10th)
anniversary of the date of issuance, at the option of the
holders thereof, for authorized but previously unissued shares
of 8.25% Series C Cumulative Redeemable Preferred Shares of
Beneficial Interest of the General Partner Entity (the "SERIES
C PREFERRED SHARES") at an exchange rate of one share of
Series C Preferred Shares for one Series C Preferred Unit,
subject to adjustment as described below (the "SERIES C
EXCHANGE PRICE"), provided that the Series C Preferred Units
will become exchangeable at any time, in whole or in part, at
the option of the holders of Series C Preferred Units for
Series C Preferred Shares if (x) at any time full
distributions shall not have been timely made on any Series C
Preferred Unit with respect to six (6) prior quarterly
distribution periods, whether or not consecutive, provided,
however, that a distribution in respect of Series C Preferred
Units shall be considered timely made if made within two (2)
Business Days after the applicable Series C Preferred Unit
Distribution Payment Date if at the time of such late payment
there shall not be any prior quarterly distribution periods in
respect of which full distributions were not timely made, (y)
upon receipt by a holder or holders of Series C Preferred
Units of (1) notice from the General Partner that the General
Partner or the General Partner Entity has taken the position
that the Partnership is, or upon the occurrence of a defined
event in the immediate future will be, a PTP and (2) an
opinion rendered by an outside nationally recognized
independent legal counsel reasonably acceptable to the General
Partner familiar with such matters addressed to a holder or
holders of Series C Preferred Units, that the Partnership is
or likely is, or upon the occurrence of a defined event that
shall occur in the immediate future will be or likely will be,
a PTP, or (z) the Partnership Net Asset Value of the
Partnership in any fiscal quarter of the Partnership is less
than $200,000,000. In addition, the Series C Preferred Units
may be exchanged for Series C Preferred Shares, in whole or in
part, at the option any holder prior to the tenth (10th)
anniversary of the issuance date and after the third (3rd)
anniversary thereof if such holder of a Series C Preferred
Units shall deliver to the General Partner either (i) a
private letter ruling issued by the Internal Revenue Service
and addressed to such holder of Series C Preferred Units or
(ii) an opinion of independent legal counsel reasonably
acceptable to the General Partner based on the enactment of
temporary or final Treasury Regulations or the publication of
a Revenue Ruling, in either case to the effect that an
exchange of the Series C Preferred Units at such earlier time
would not cause the Series C Preferred Units to be considered
"stock and securities" within the meaning of section 351(e) of
the Code for purposes of determining whether the holder of
such Series C Preferred Units is an "investment company" under
section 721(b) of the Code if an exchange is permitted at such
earlier date. Furthermore, the Series C Preferred Units may be
exchanged in whole but not in part by any holder thereof which
is a real estate investment trust within the meaning of
Sections 856 through 859 of the Code for Series C Preferred
<PAGE> 52
Shares (but only if the exchange in whole may be accomplished
consistently with the ownership limitations set forth under
Article Nineteen of the Declaration of Trust of the General
Partner Entity (taking into account exceptions thereto)) if at
any time, (i) the Partnership reasonably determines that the
assets and income of the Partnership for a taxable year after
1999 would not satisfy the income and assets tests of Section
856 of the Code for such taxable year if the Partnership were
a real estate investment trust within the meaning of the Code
or (ii) any such holder of Series C Preferred Units shall
deliver to the Partnership and the General Partner Entity an
opinion of independent counsel reasonably acceptable to the
General Partner Entity to the effect that, based on the assets
and income of the Partnership for a taxable year after 1999,
the Partnership would not satisfy the income and assets tests
of Section 856 of the Code for such taxable year if the
Partnership were a real estate investment trust within the
meaning of the Code and that such failure would create a
meaningful risk that a holder of the Series C Preferred Units
would fail to maintain qualification as a real estate
investment trust. In addition, if the holder of the Series C
Preferred Units is an entity other than a real estate
investment trust within the meaning of Sections 856 through
859 of the Code, the Series C Preferred Units may be exchanged
in whole but not in part by such holder for Series C Preferred
Shares (but only if the exchange in whole may be accomplished
consistently with the ownership limitations set forth under
Article Nineteen of the Declaration of Trust of the General
Partner Entity) if at any time, both (I) the holder thereof
concludes based on results or projected results that there
exists (in the reasonable judgment of the holder) an imminent
and substantial risk that the holder's interest in the
Partnership does or will represent more than 19.5% of the
total profits or capital interests in the Partnership
(determined in accordance with Treasury Regulations Section
1.731-2(e)(4)) for a taxable year, and (II) the holder
delivers to the General Partner an opinion of nationally
recognized independent counsel to the effect that there is an
imminent and substantial risk that the holder's interest in
the Partnership does or will represent more than 19.5% of the
total profits or capital interests in the Partnership
(determined in accordance with Treasury Regulations Section
1.731-2(e)(4)) for a taxable year.
(ii) Notwithstanding anything to the contrary set forth
in Section 17.9.A(i), if a Series C Exchange Notice (as
hereinafter defined) has been delivered to the General
Partner, then the General Partner may, at its option, elect to
redeem or cause the Partnership to redeem all or a portion of
the Series C Preferred Units which are subject to such Series
C Exchange Notice for cash in an amount equal to the original
Capital Contribution per Series C Preferred Unit and all
accrued and unpaid distributions thereon to the date of
redemption. The General Partner may exercise its option to
redeem the Series C Preferred Units for cash pursuant to this
Section 17.9.A(ii) by giving each holder which tendered its
Series C Preferred Units pursuant to such Series C Exchange
Notice, notice of its election to redeem for cash, within five
(5) Business Days after receipt of the Series C Exchange
Notice, by (m) fax, and (n) registered mail, postage paid, at
the address of each such holder as it may appear on the
records of the Partnership stating (A) the redemption date,
which shall be no later than sixty (60) days following the
receipt of the Series C Exchange Notice, (B) the Series C
Redemption Price, (C) the place or places where the Series C
Preferred Units are to be surrendered for payment of the
Series C Redemption Price, (D) that distributions on the
Series C Preferred Units will cease to accrue on such
redemption date; (E) that payment of the Series C Redemption
Price will be made upon presentation and surrender of the
Series C Preferred Units and (F) the aggregate number of
Series C Preferred Units to be redeemed, and if fewer than all
of the outstanding Series C Preferred Units are to be
redeemed, the number of Series C Preferred Units to be
redeemed held by such holder, which number shall equal such
<PAGE> 53
holder's pro-rata share (based on the percentage of the
aggregate number of outstanding Series C Preferred Units the
total number of Series C Preferred Units held by such holder
represents) of the aggregate number of Series C Preferred
Units being redeemed.
(iii) In the event an exchange of all or a portion of
Series C Preferred Units pursuant to SECTION 17.9.A(I) would
violate the provisions on ownership limitation of the C
Preferred Shares set forth in Article Nineteen of the
Declaration of Trust with respect to the Series C Preferred
Shares, the General Partner shall give written notice thereof
to each holder of record of Series C Preferred Units, within
fifteen (15) Business Days following receipt of the Series C
Exchange Notice, by (m) fax, and (n) registered mail, postage
prepaid, at the address of each such holder set forth in the
records of the Partnership. In such event, each holder of
Series C Preferred Units shall be entitled to exchange,
pursuant to the provision of Section 17.9.B, a number of
Series C Preferred Units which would comply with the
provisions on the ownership limitation of the C Preferred
Shares set forth in such Article Nineteen and any Series C
Preferred Units not so exchanged (the "EXCESS SERIES C UNITS")
shall be redeemed by the Partnership for cash in an amount
equal to the original Capital Contribution per Excess Unit,
plus any accrued and unpaid distributions thereon, whether or
not declared, to the date of redemption. The written notice of
the C Preferred Shares shall state (A) the number of Excess
Series C Units held by such holder, (B) the Series C
Redemption Price of the Excess Series C Units, (C) the date on
which such Excess Series C Units shall be redeemed, which date
shall be no later than sixty (60) days following the receipt
of the Series C Exchange Notice, (D) the place or places where
such Excess Series C Units are to be surrendered for payment
of the Series C Redemption Price, (E) that distributions on
the Excess Series C Units will cease to accrue on such
redemption date, and (F) that payment of the Series C
Redemption Price will be made upon presentation and surrender
of such Excess Series C Units. In the event an exchange may,
in the reasonable judgment of the General Partner, result in
Excess Series C Units, as a condition to such exchange, each
holder of such units agrees to provide representations and
covenants reasonably requested by the General Partner relating
to (1) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's
ownership of the Series C Preferred Shares (without regard to
the limits described above) will not cause any individual to
own in excess of 9.8% in value of all shares of beneficial
interest of the General Partner Entity; and (2) to the extent
such holder can so represent and covenant without obtaining
information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates. Each holder shall
provide the General Partner with any reasonably requested
information which the General Partner shall require in order
to determine whether an exchange of all or any portion of the
Series C Preferred Units pursuant to Section 17.9.A(i) hereof
would violate the limitations on ownership set forth in the
Declaration of Trust; provided that General Partner only shall
be entitled to such information from such holder to the extent
that such holder has such information reasonably available. To
the extent that the General Partner requests any such
information during the fifteen (15) Business Day period
referenced in the first sentence of this Section 17.9.A(iii)
and the holder shall fail to provide such information during
such fifteen (15) Business Day period, such period shall be
extended to the date that is three (3) Business Days following
the delivery by the holder of such information to the General
Partner.
(iv) The redemption of Series C Preferred Units
described in Section 17.9.A(ii) and (iii) shall be subject to
the provisions of Section 17.6.B(i) and Section 17.6.C(ii);
PROVIDED, HOWEVER, that the term "Series C Redemption Price"
in such Sections shall be read to mean the original Capital
Contribution per Series C Preferred Unit being redeemed plus
all accrued and unpaid distributions to the redemption date.
<PAGE> 54
B. PROCEDURE FOR EXCHANGE.
(i) Any exchange shall be exercised pursuant to a notice
of exchange (the "SERIES C EXCHANGE NOTICE") delivered
to the General Partner by the holder who is exercising such
exchange right, by (a) fax and (b) by certified mail postage
prepaid. The exchange of Series C Preferred Units, or a
specified portion thereof, may be effected after the fifth
(5th) Business Day following the expiration of the fifteen
(15) day period further described in the first sentence of
Section 17.9.A(iii), by delivering certificates, if any,
representing such Series C Preferred Units to be exchanged
together with written notice of exchange and an assignment of
such Series C Preferred Units and such opinions of counsel and
further assurances further described in Section 17.6.C(i)
hereof to the office of the General Partner maintained for
such purpose. Currently, such office is Three Greenway Plaza,
Suite 1300, Houston, Texas 77046. Each exchange will be deemed
to have been effected immediately prior to the close of
business on the date on which such Series C Preferred Units to
be exchanged (together with all required documentation) shall
have been surrendered and notice shall have been received by
the General Partner as aforesaid and the Series C Exchange
Price shall have been paid. Any Series C Preferred Shares
issued pursuant to this Section 17.9 shall be delivered as
shares which are duly authorized, validly issued, fully paid
and nonassessable, free of pledge, lien, encumbrance or
restriction other than those provided in the Declaration of
Trust, the Bylaws of the General Partner Entity, the
Securities Act and relevant state securities or blue sky laws.
(ii) In the event of an exchange of Series C
Preferred Units for Series C Preferred Shares, an amount equal
to the accrued and unpaid distributions, whether or not
declared, to the date of exchange on any Series C Preferred
Units tendered for exchange shall (a) accrue on the shares of
the Series C Preferred Shares into which such Series C
Preferred Units are exchanged, and (b) continue to accrue on
such Series C Preferred Units, which shall remain outstanding
following such exchange, with the General Partner as the
holder of such Series C Preferred Units. Notwithstanding
anything to the contrary set forth herein, in no event shall a
holder of a Series C Preferred Unit that was validly exchanged
into Series C Preferred Shares pursuant to this section (other
than the General Partner now holding such Series C Preferred
Unit), receive any cash distribution from the Partnership, if
such holder, after exchange, is entitled to receive a cash
distribution with respect to the Series C Preferred Shares for
which such Series C Preferred Unit was exchanged or redeemed.
(iii) Fractional shares of Series C Preferred Shares
are not to be issued upon exchange but, in lieu thereof, the
General Partner will pay a cash adjustment based upon the fair
market value of the Series C Preferred Shares on the day prior
to the exchange date as determined in good faith by the Board
of Directors of the General Partner.
C. ADJUSTMENT OF SERIES C EXCHANGE PRICE.
(i) The Series C Exchange Price is subject to
adjustment upon certain events, including (a) subdivisions,
combinations and reclassification of the Series C Preferred
Shares, and (b) distributions to all holders of Series C
Preferred Shares of evidence of indebtedness of the General
Partner Entity or assets (including securities, but excluding
dividends and distributions paid in cash out of equity
applicable to Series C Preferred Shares).
<PAGE> 55
(ii) In case the General Partner Entity shall be a
party to any transaction (including, without limitation, a
merger, consolidation, statutory share exchange, tender offer
for all or substantially all of the General Partner Entity's
capital shares or sale of all or substantially all of the
General Partner Entity's assets), in each case as a result of
which the Series C Preferred Shares will be converted into the
right to receive shares of capital shares, other securities or
other property (including cash or any combination thereof),
each Series C Preferred Unit will thereafter be exchangeable
into the kind and amount of shares of capital shares and other
securities and property receivable (including cash or any
combination thereof) upon the consummation of such transaction
by a holder of that number of shares of Series C Preferred
Shares or fraction thereof into which one Series C Preferred
Unit was exchangeable immediately prior to such transaction.
The General Partner Entity may not become a party to any such
transaction unless the terms thereof are consistent with the
foregoing. In addition, so long as either Series C Preferred
Partner, or any of their permitted successors or assigns, hold
any Series C Preferred Units, the General Partner Entity shall
not, without the affirmative vote of the holders of at least
two-thirds of the Series C Preferred Units outstanding at the
time: (a) designate or create, or increase the authorized or
issued amount of, any class or series of shares ranking prior
to the Series C Preferred Shares with respect to the payment
of distributions or rights upon liquidation, dissolution or
winding-up or reclassify any authorized shares of the General
Partner Entity into any such shares, or create, authorize or
issue any obligations or security convertible into or
evidencing the right to purchase any such shares; (b)
designate or create, or increase the authorized or issued
amount of, any Parity Preferred Shares or reclassify any
authorized shares of the General Partner Entity into any such
shares, or create, authorize or issue any obligations or
security convertible into or evidencing the right to purchase
any such shares, but only to the extent that such Parity
Preferred Shares are issued to an Affiliate of the General
Partner Entity; (c) amend, alter or repeal the provisions of
the Declaration of Trust (including the Series C Designation)
or bylaws of the General Partner Entity, whether by merger,
consolidation or otherwise, that would materially and
adversely affect the powers, special rights, preferences,
privileges or voting power of the Series C Preferred Shares or
the holders of the Series C Preferred Shares or the Series C
Preferred Units; PROVIDED, HOWEVER, that any increase in the
amount of authorized preferred shares of beneficial interest
of the General Partner Entity ("PREFERRED SHARES") or the
creation or issuance of any other series or class of Preferred
Shares, or any increase in the amount of authorized shares of
each class or series, in each case ranking either (1) junior
to the Series C Preferred Shares with respect to the payment
of distributions and the distribution of assets upon
liquidation, dissolution or winding-up, or (2) on a parity
with the Series C Preferred Shares with respect to the
payment of distributions or the distribution of assets upon
liquidation, dissolution or winding-up to the extent such
Preferred Shares are not issued to an Affiliate of the General
Partner Entity, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or
voting powers.
SECTION 17.10 NO CONVERSION RIGHTS
The holders of the Series C Preferred Units shall not have any
rights to convert such shares into shares of any other class or series
of shares or into any other securities of, or interest in, the
Partnership.
SECTION 17.11 NO SINKING FUND
No sinking fund shall be established for the retirement or
redemption of Series C Preferred Units."
<PAGE> 56
11. EXHIBIT B, PARAGRAPH 3.
The words "and XVII" are inserted after the word "XVI" in Paragraph 3
of Exhibit B of the Agreement.
12. EXHIBIT A. The Agreement is hereby amended by adding to
Exhibit A of said Agreement the addendum to Exhibit A presently
attached hereto and made a part hereof, so that all references to
"Exhibit A" in the Agreement shall be deemed to be references to
Exhibit A which shall include the addendum to Exhibit A attached
hereto.
13. FULL FORCE AND EFFECT. Except as amended by the
provisions hereof, the Agreement, as previously amended, shall remain
in full force and effect in accordance with its terms and is hereby
ratified, confirmed and reaffirmed by the undersigned for all purposes
and in all respects.
14. SUCCESSORS/ASSIGNS. This Amendment shall be binding upon
and shall inure to the benefit of the parties hereto, their respective
legal representatives, successors and assigns.
15. COUNTERPARTS. This Amendment may be executed in
counterparts, all of which together shall constitute one agreement
binding on all the parties hereto, notwithstanding that all such
parties are not signatories to the original or the same counterpart.
(SPACE LEFT INTENTIONALLY BLANK)
<PAGE> 57
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
GENERAL PARTNER:
CPT-GP, INC.
By:_____________________________________________
Name:
Title:
CAMDEN PROPERTY TRUST, for purposes of Sections
8.5.C, 17.5.A and 17.9
By:_____________________________________________
Name:
Title:
***SIGNATURES CONTINUED ON NEXT PAGE***
<PAGE> 58
ADDITIONAL LIMITED PARTNERS:
EDGEWATER EQUITY, INC.
By:_____________________________________________
Name:___________________________________________
Title:__________________________________________
EDGEWATER EQUITY PARTNERS, L.P.
By: WSW Capital, Inc., its general partner
By:_______________________________________
Name:_____________________________________
Title:____________________________________
<PAGE> 59
EXHIBIT A
Series C
Preferred
NAME AND ADDRESS OF PARTNERS: UNITS
- ----------------------------- ------------
LIMITED PARTNERS:
Edgewater Equity, Inc. 200,000
c/o DLJ Asset Management Group
277 Park Avenue
New York, New York 10172
Attention: Peter Gaudet
Edgewater Equity Partners, L.P. 320,000
c/o DLJ Asset Management Group
277 Park Avenue
New York, New York 10172
Attention: Peter Gaudet
TOTAL 520,000
============
<PAGE> 60
EXHIBIT 10.16
FORM OF
THIRD AMENDMENT TO
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF CAMDEN OPERATING, L.P.
THIS THIRD AMENDMENT TO THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF CAMDEN OPERATING, L.P. (this "AMENDMENT") is entered into as of
September 7, 1999, by and between CPT-GP, Inc. ("GENERAL PARTNER"), a Delaware
corporation and a wholly owned subsidiary of Camden USA, Inc. ("CAMDEN USA"), a
Delaware corporation, a wholly owned subsidiary of Camden Property Trust ("CPT"
or the "GENERAL PARTNER ENTITY"), a Texas real estate investment trust, as the
general partner of Camden Operating, L.P., a Delaware limited partnership (the
"PARTNERSHIP") and Edgewater Equity, Inc., a Delaware corporation ("EDGEWATER,
INC.") and Edgewater Equity Partners, L.P., a Delaware limited partnership
("EDGEWATER, L.P.").
RECITALS
WHEREAS, the signatories hereto desire to amend that certain Third Amended
and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated
as of April 15, 1997, as amended by that certain (i) First Amendment to Third
Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P.,
dated as of February 23, 1999, and (ii) Second Amendment to Third Amended and
Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of
August 13, 1999 (collectively, as amended, the "AGREEMENT") as set forth herein;
any terms capitalized herein but not defined herein having the definitions
therefor set forth in the Agreement;
WHEREAS, as of August 13, 1999 (a) Edgewater, Inc. contributed $5,000,000
to the Partnership in exchange for the issuance by the Partnership to Edgewater,
Inc. of 200,000 Series C Preferred Units, and (b) Edgewater, L.P. contributed
$8,000,000 to the Partnership in exchange for the issuance by the Partnership to
Edgewater, L.P. of 320,000 Series C Preferred Units. In connection therewith,
inter alia, Edgewater, Inc. and Edgewater, L.P. were each admitted to the
Partnership, effective, as of August 13, 1999, as an Additional Limited Partner;
and
WHEREAS, as of the date hereof, Edgewater, L.P. has made an additional
contribution to the Partnership in the sum of $22,500,000 in exchange for the
issuance by the Partnership to Edgewater, L.P. of an additional 900,000 Series C
Preferred Units.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
set forth herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to continue the Partnership and amend the Agreement as
follows:
<PAGE> 61
1. UNITS. As of the date hereof, Edgewater, L.P. has contributed
$22,500,000 to the Partnership in exchange for the issuance to Edgewater, L.P.
of 900,000 Series C Preferred Units. As of the date hereof, Edgewater, L.P. is
the holder of a total of 1,220,000 Series C Preferred Units and by execution of
this Amendment, Edgewater, L.P. has agreed to be bound by all of the terms and
conditions of the Agreement, as amended hereby.
2. DEFINITIONS.
(a) Article I of the Agreement is hereby amended by the deletion of the
definition of "Series C Preferred Contribution Agreement" in its entirety
and its replacement with the following:
"SERIES C PREFERRED CONTRIBUTION AGREEMENT" means, collectively, that
certain (i) Contribution Agreement, dated as of August 13, 1999, by and
among, Edgewater Equity, Inc., CPT and the Partnership, (ii) Contribution
Agreement, dated as of August 13, 1999, by and among, Edgewater Equity
Partners, L.P., CPT and the Partnership, and (iii) Contribution Agreement,
dated as of the date hereof, by and among, Edgewater Equity Partners,
L.P., CPT and the Partnership.
(b) The term "SERIES C DESIGNATION" shall mean the Series C Designation,
as amended by that certain First Amendment to Statement of Designation of
Series C Cumulative Redeemable Perpetual Preferred Shares of Beneficial
Interest of Camden Property Trust, dated the date hereof, by the General
Partner Entity.
3. AMENDMENT TO ARTICLE XVII. The second sentence of Section 17.2 is hereby
deleted in its entirety and replaced with the following:
"The number of Series C Preferred Units shall be 1,420,000."
4. EXHIBIT A. The Agreement is hereby amended by adding to Exhibit A of
said Agreement the addendum to Exhibit A presently attached hereto and made a
part hereof, so that all references to "Exhibit A" in the Agreement shall be
deemed to be references to Exhibit A which shall include the addendum to Exhibit
A attached hereto.
5. FULL FORCE AND EFFECT. Except as amended by the provisions hereof, the
Agreement, as previously amended, shall remain in full force and effect in
accordance with its terms and is hereby ratified, confirmed and reaffirmed by
the undersigned for all purposes and in all respects.
6. BINDING. This Amendment shall be binding upon and shall inure to the
benefit of the parties hereto, their respective legal representatives,
successors and assigns.
<PAGE> 62
7. COUNTERPARTS. This Amendment may be executed in counterparts, all of
which together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.
(SPACE LEFT INTENTIONALLY BLANK)
<PAGE> 63
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
GENERAL PARTNER
CPT-GP, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
GENERAL PARTNER ENTITY
CAMDEN PROPERTY TRUST
By:_____________________________________
Name:___________________________________
Title:__________________________________
(SIGNATURES CONTINUED ON NEXT PAGE)
<PAGE> 64
LIMITED PARTNERS
EDGEWATER EQUITY, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
EDGEWATER EQUITY PARTNERS, L.P.
By: WSW Capital, Inc., its general partner
By:_____________________________________
Name:___________________________________
Title:__________________________________
<PAGE> 65
ADDENDUM TO
EXHIBIT A
SERIES C
PREFERRED
NAME AND ADDRESS OF PARTNER: UNITS
LIMITED PARTNER:
Edgewater Equity Partners, L.P. 900,000
c/o DLJ Asset Management Group
277 Park Avenue
New York, New York 10172
Attention: Peter Gaudet
_____________________________________________________________
TOTAL 900,000
=======
<PAGE> 66
EXHIBIT 10.17
FORM OF
FOURTH AMENDMENT TO
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF CAMDEN OPERATING, L.P.
THIS FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF CAMDEN OPERATING, L.P. (this "AMENDMENT") is entered into as of
January 7, 2000, by and between CPT-GP, Inc. ("GENERAL PARTNER"), a Delaware
corporation and a wholly owned subsidiary of Camden USA, Inc. ("CAMDEN USA"), a
Delaware corporation, a wholly owned subsidiary of Camden Property Trust ("CPT"
or the "GENERAL PARTNER ENTITY"), a Texas real estate investment trust, as the
general partner of Camden Operating, L.P., a Delaware limited partnership (the
"PARTNERSHIP") and Edgewater Equity, Inc., a Delaware corporation ("EDGEWATER,
INC.") and Edgewater Equity Partners, L.P., a Delaware limited partnership
("EDGEWATER, L.P.").
RECITALS
WHEREAS, the signatories hereto desire to amend that certain Third Amended
and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated
as of April 15, 1997, as amended by that certain (i) First Amendment to Third
Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P.,
dated as of February 23, 1999, (ii) Second Amendment to Third Amended and
Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of
August 13, 1999, and (iii) Third Amendment to Third Amended and Restated
Agreement of Limited Partnership of Camden Operating, L.P., dated as of
September 7, 1999 (collectively, as amended, the "AGREEMENT") as set forth
herein; any terms capitalized herein but not defined herein having the
definitions therefor set forth in the Agreement;
WHEREAS, as of August 13, 1999 (a) Edgewater, Inc. contributed $5,000,000
to the Partnership in exchange for the issuance by the Partnership to Edgewater,
Inc. of 200,000 Series C Preferred Units, and (b) Edgewater, L.P. contributed
$8,000,000 to the Partnership in exchange for the issuance by the Partnership to
Edgewater, L.P. of 320,000 Series C Preferred Units. In connection therewith,
inter alia, Edgewater, Inc. and Edgewater, L.P. were each admitted to the
Partnership, effective, as of August 13, 1999, as an Additional Limited Partner;
and
WHEREAS, as of September 7, 1999, Edgewater, L.P. made an additional
contribution to the Partnership in the sum of $22,500,000 in exchange for the
issuance by the Partnership to Edgewater, L.P. of an additional 900,000 Series C
Preferred Units.
WHEREAS, as of the date hereof, Edgewater, L.P. has made an additional
contribution to the Partnership in the sum of $17,500,000 in exchange for the
issuance by the Partnership to Edgewater, L.P. of an additional 700,000 Series C
Preferred Units.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
set forth herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to continue the Partnership and amend the Agreement as
follows:
<PAGE> 67
1. UNITS. As of the date hereof, Edgewater, L.P. has contributed
$17,500,000 to the Partnership in exchange for the issuance to Edgewater, L.P.
of 700,000 Series C Preferred Units. As of the date hereof, Edgewater, L.P. is
the holder of a total of 1,920,000 Series C Preferred Units and by execution of
this Amendment, Edgewater, L.P. has agreed to be bound by all of the terms and
conditions of the Agreement, as amended hereby.
2. DEFINITIONS.
(a) Article I of the Agreement is hereby amended by the deletion of
the definition of "Series C Preferred Contribution Agreement" in its
entirety and its replacement with the following:
"SERIES C PREFERRED CONTRIBUTION AGREEMENT" means, collectively,
that certain (i) Contribution Agreement, dated as of August 13, 1999, by
and among, Edgewater Equity, Inc., CPT and the Partnership, (ii)
Contribution Agreement, dated as of August 13, 1999, by and among,
Edgewater Equity Partners, L.P., CPT and the Partnership, (iii)
Contribution Agreement, dated as of September 7, 1999, by and among,
Edgewater Equity Partners, L.P., CPT and the Partnership, and (iv)
Contribution Agreement, dated as of January 7, 2000, by and among,
Edgewater Equity Partners, L.P., CPT and the Partnership
(b) The term "SERIES C DESIGNATION" shall mean the Series C
Designation, as amended by that certain (i) First Amendment to Statement of
Designation of Series C Cumulative Redeemable Perpetual Preferred Shares of
Beneficial Interest of Camden Property Trust, dated as of September 7,
1999, by the General Partner Entity, and (ii) Second Amendment to Statement
of Designation of Series C Cumulative Redeemable Perpetual Preferred Shares
of Beneficial Interest of Camden Property Trust, dated as of January 7,
2000, by the General Partner Entity.
3. AMENDMENT TO ARTICLE XVII. The second sentence of Section 17.2 is
hereby deleted in its entirety and replaced with the following:
"The number of Series C Preferred Units shall be 2,120,000."
4. EXHIBIT A. The Agreement is hereby amended by adding to Exhibit A of
said Agreement the addendum to Exhibit A presently attached hereto and made a
part hereof, so that all references to "Exhibit A" in the Agreement shall be
deemed to be references to Exhibit A which shall include the addendum to Exhibit
A attached hereto.
5. FULL FORCE AND EFFECT. Except as amended by the provisions hereof, the
Agreement, as previously amended, shall remain in full force and effect in
accordance with its terms and is hereby ratified, confirmed and reaffirmed by
the undersigned for all purposes and in all respects.
6. BINDING. This Amendment shall be binding upon and shall inure to the
benefit of the parties hereto, their respective legal representatives,
successors and assigns.
7. COUNTERPARTS. This Amendment may be executed in counterparts, all of
which together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.
<PAGE> 68
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
GENERAL PARTNER
CPT-GP, INC.
By:_____________________________________
Name:
Title:
GENERAL PARTNER ENTITY
CAMDEN PROPERTY TRUST
By:_____________________________________
Name:
Title:
(SIGNATURES CONTINUED ON NEXT PAGE)
<PAGE> 69
LIMITED PARTNERS
EDGEWATER EQUITY, INC.
By:__________________________________________
Name:________________________________________
Title:_______________________________________
EDGEWATER EQUITY PARTNERS, L.P.
By: WSW Capital, Inc., its general partner
By:_____________________________________
Name:___________________________________
Title:__________________________________
<PAGE> 70
ADDENDUM TO
EXHIBIT A
SERIES C
PREFERRED
NAME AND ADDRESS OF PARTNER: UNITS
LIMITED PARTNER:
Edgewater Equity Partners, L.P. 700,000
c/o DLJ Asset Management Group
277 Park Avenue
New York, New York 10172
Attention: Peter Gaudet
________________________________________________________
TOTAL 700,000
=======
<PAGE> 71
EXHIBIT 10.18
AMENDED AND RESTATED 1993 SHARE INCENTIVE PLAN
OF
CAMDEN PROPERTY TRUST
1. PURPOSE.
The purpose of this Plan is to benefit the Company's shareholders by
encouraging high levels of performance by individuals who are key to the success
of the Company and to enable the Company to attract, motivate and retain
talented and experienced individuals essential to its continued success. This is
to be accomplished by providing such individuals an opportunity to obtain or
increase their proprietary interest in the Company's performance and by
providing such individuals with additional incentives to remain with the
Company.
2. DEFINITIONS.
The following terms, as used herein, shall have the meaning specified:
"Additional Base Shares" shall have the meaning set forth in Section
9(a).
"Additional Bonus Shares" shall have the meaning set forth in Section
9(a).
"Affiliate" means (i) any corporation more than 50% of whose stock
having general voting power is owned is by the Company or by another
Affiliate of the Company and (ii) the Special Subsidiary.
"Alternative Rights" shall have the meaning set forth in Section
6(a)(2).
"Amendment Date" shall mean February 13, 1998.
"Award" means an award granted pursuant to Section 6 hereof.
"Base Shares" shall have the meaning set forth in Section 9(a).
"Board" means the Board of Trust Managers of the Company as it may be
comprised from time to time.
"Bonus Shares" shall have the meaning set forth in Section 9(a).
"Change in Control" shall have the meaning set forth in Section 8.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means the Committee as defined in Section 3.
"Company" means Camden Property Trust.
"Conjunctive Rights" shall have the meaning set forth in Section
6(a)(2).
"Consummation Date" means July 29, 1993.
<PAGE> 72
"Director" means any person who shall from time to time serve as a
member of the board of directors of any Affiliate.
"Election Date" shall mean the date an Independent Trust Manager is
first elected to the Board of Trust Managers.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Fair Market Value" means the closing price of the relevant security
as reported on the composite tape of New York Stock Exchange issues
(or such other reporting system as shall be selected by the Committee)
on the relevant date, or if no sale of the security is reported for
such date, the next following day for which there is a reported sale.
The Committee shall determine the Fair Market Value of any security
that is not publicly traded, using such criteria as it shall
determine, in its sole discretion, to be appropriate for such
valuation.
"Incentive Exchange Right" shall have the meaning set forth in Section
9(a).
"Incentive Payment" shall have the meaning set forth in Section 9(a).
"Independent Trust Manager" means any Trust Manager who is not also an
employee of the Company or any Affiliate; provided, that a Trust
Manager who is a director or Trust Manager or a consultant, or both,
but is not an employee also shall be an "Independent Trust Manager."
"Initial Public Offering Price" means $22.00 per Share.
"Insider" means any person who is subject to Section 16 of the
Exchange Act.
"ISO" means an incentive stock option within the meaning of Section
422 of the Code.
"Limited Rights" shall have the meaning set forth in Section 6(d).
"Option" means any option granted pursuant to Sections 6(a)(1) or (2)
"Participant" means any person who has been granted an Award pursuant
to this Plan.
"Performance Share Award" shall have the meaning set forth in Section
6(c).
"Performance Unit" shall have the meaning set forth in Section 6(c).
"Reload Option" shall have the meaning set forth in Section 6(a)(7).
"Restricted Shares" means the Shares issued as a result of a
Restricted Share Award.
"Restricted Share Award" means a grant of the right to purchase Shares
pursuant to Section 6(b) hereof. Such Shares, when and if issued,
shall be subject to such transfer restrictions and risk of forfeiture
as the Committee shall determine at the time the Award is granted,
until such specific conditions are met. Such conditions may be based
on continuing employment or achievement of pre-established performance
objectives, or both.
"Rights" shall have the meaning set forth in Section 6(a)(2).
<PAGE> 73
"Section 16" means Section 16 of the Exchange Act or any successor
regulation and the rules promulgated thereunder by the Securities and
Exchange Commission, as they may be amended from time to time.
"Shares" means the common shares of beneficial interest of the
Company, par value $.01 per share.
"Special Subsidiary" means Apartment Connection, Inc.
"Spread" means (i) with respect to Conjunctive Rights and Alternative
Rights, the excess of the Fair Market Value of one Share on the date
of exercise of such Rights over the purchase price per Share payable
under the related Option and (ii) with respect to Rights not granted
in connection with an Option, the excess of the Fair Market Value of
one Share on the date of exercise of such Rights over the Fair Market
Value of one Share on the date such Rights were granted.
"Texas Act" shall mean the Texas Real Estate Investment Trust Act, as
amended from time to time.
"Trust Manager" means any person who shall from time to time be a
member of the Board of Trust Managers of the Company.
3. ADMINISTRATION AND INTERPRETATION.
(a) ADMINISTRATION. The Plan shall be administered by a Committee which
shall consist of two or more Independent Trust Managers, each of whom shall be a
"non-employee director" within the meaning of Rule 16b 3(b)(3)(i) of the
Exchange Act and an "outside director" within the meaning of Section 162(m) of
the Code and the regulations promulgated thereunder. The Board may from time to
time remove and appoint members of the Committee in substitution for, or in
addition to, members previously appointed and may fill vacancies, however
caused, in the Committee. The Committee may prescribe, amend and rescind rules
and regulations for administration of the Plan and shall have full power and
authority to construe and interpret the Plan. A majority of the members of the
Committee shall constitute a quorum, and the act of a majority of the members
present at a meeting or the acts of a majority of the members evidenced in
writing shall be the acts of the Committee. The Committee may correct any defect
or any omission or reconcile any inconsistency in the Plan or in any Award or
grant made hereunder in the manner and to the extent it shall deem desirable.
The Committee shall have the full and exclusive right to grant all Awards
under this Plan, which may be Options, Rights, Limited Rights, Restricted Share
Awards, Dividend Equivalent Rights, Performance Units and Performance Share
Awards. In granting Awards, the Committee shall take into consideration the
contribution the individual has made or may make to the success of the Company
or its Affiliates and such other factors as the Committee shall determine. The
Committee shall periodically determine the Participants in the Plan and the
nature, amount, pricing, time, and other terms of Awards to be made to such
individuals, subject to the other terms and provisions of the Plan. The
Committee shall also have the authority to consult with and receive
recommendations from officers and other individuals of the Company and its
Affiliates with regard to these matters. In no event shall any individual, his
legal representative, heirs, legatees, distributees, or successors have any
right to participate in the Plan except to such extent, if any, as the Committee
shall determine.
The Committee may from time to time in granting Awards under the Plan
prescribe such other terms and conditions concerning such Awards as it deems
appropriate, including, without limitation, the achievement of specific goals
established by the Committee, provided that such terms and conditions are not
more favorable to any individual than those expressly set forth in the Plan.
<PAGE> 74
The Committee may delegate to the officers of or individuals associated
with the Company the authority to execute and deliver such instruments and
documents, to do all such acts and things, and to take all such other steps
deemed necessary, advisable or convenient for the effective administration of
the Plan in accordance with its terms and purpose, except that the Committee may
not delegate any discretionary authority with respect to substantive decisions
or functions regarding the Plan or Awards thereunder as these relate to
Insiders, including but not limited to decisions regarding the timing,
eligibility, pricing, amount or other material term of such Awards.
(b) INTERPRETATION. The Committee shall have the power to interpret and
administer the Plan. All questions of interpretation with respect to the Plan,
the number of Shares or other security, Rights, or units granted, and the terms
of any Award shall be determined by the Committee and its determination shall be
final and conclusive upon all parties in interest. In the event of any conflict
between an Award and this Plan, the terms of this Plan shall govern. It is the
intent of the Company that this Plan and Awards hereunder satisfy and be
interpreted in a manner that, in the case of participants who are or may be
Insiders, satisfies the applicable requirements of Rule 16b-3 of the Exchange
Act, so that such persons will be entitled to the benefits of Rule 16b-3 or
other exemptive rules under Section 16 and will not be subjected to liability
thereunder. If any provision of this Plan or of any Award would otherwise
frustrate or conflict with the intent expressed in this Section 3(b), that
provision to the extent possible shall be interpreted and deemed amended so as
to avoid such conflict. To the extent of any remaining irreconcilable conflict
with such intent, the provision shall be deemed void as applicable to insiders.
<PAGE> 75
(c) LIMITATION ON LIABILITY. Neither the Committee nor any member thereof
shall be liable for any act, omission, interpretation, construction or
determination made in connection with the Plan in good faith, and the members of
the Committee shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including counsel
fees) arising therefrom to the full extent permitted by law. The members of the
Committee shall be named as insureds under any directors and officers (or
similar) liability insurance coverage which the Company may have in effect from
time to time.
4. ELIGIBILITY.
The class of persons who are potential recipients of Awards granted under
this Plan consist of the (i) Independent Trust Managers, (ii) directors of
Affiliates, (iii) key employees of the Company or any Affiliate, and (iv)
consultants to the Company or any Affiliate, in each case (other than in the
case of clause (i)), as determined by the Committee from time to time. The
Independent Trust Managers, directors, key employees and consultants to whom
Awards are granted under this Plan, and the number of Shares subject to each
such Award, shall be determined by the Committee in its sole discretion,
subject, however, to the terms and conditions of this Plan. Persons to whom
Awards may be granted include key employees, consultants and directors who are
also Trust Managers. No Award may be granted to an Independent Trust Manager
other than in accordance with Section 6(b)(5).
5. SHARES SUBJECT TO GRANTS UNDER THE PLAN.
(a) LIMITATION ON NUMBER OF SHARES. The Shares subject to grants of Awards
shall be authorized but unissued Shares, and such Shares, if any, held as
"treasury stock" by the Company. Subject to adjustment as hereinafter provided,
the aggregate number of Shares as which Awards may be granted under the Plan
shall not exceed 10% of the total number of Shares outstanding at any time.
Shares ceasing to be subject to an Award because of the exercise of an
Option or Right or the vesting of an Award shall no longer be subject to any
further grant under the Plan. However, if any outstanding Option or Right, in
whole or in part, expires or terminates unexercised or is canceled or if any
Award, in whole or in part, expires or is terminated or forfeited, for any
reason prior to May 27, 2003, the Shares allocable to the unexercised,
terminated, canceled or forfeited portion of such Award may again be made the
subject of grants under the Plan; provided, however, that if the Participant
receives the benefits of ownership of any Shares (which includes the receipt of
dividends, but does not include the right to vote such Shares), such Shares may
not again be made the subject of grants under the Plan and provided, further,
that with respect to any Option or Rights granted to any Participant who is a
"covered person" as defined in Section 162(m) of the Code and the regulations
promulgated thereunder that is canceled, the number of Shares subject to such
Option and/or Rights shall continue to count against the maximum number of
Shares which may be the subject of Options and for Rights granted to such
Participant.
<PAGE> 76
For the purposes of computing the total number of Shares granted under the
Plan, the following rules shall apply to Awards payable in Shares or other
securities, where appropriate:
(i) except as provided in (v) of this Section, each Option shall be
deemed to be the equivalent of the maximum number of Shares that may
be issued upon exercise of the particular Option;
(ii) except as provided in (v) of this Section, each other Share-based
Award payable in some other security shall be deemed to be equal to
the number of Shares to which it relates;
(iii) except as provided in (v) of this Section, where the number of
Shares available under the Award is variable on the date it is
granted, the number of Shares shall be deemed to be the maximum number
of Shares that could be received under that particular Award;
(iv) where Alternative Rights are granted in connection with an
Option, only the number of Shares subject to the Option shall be
counted, and any Shares as to which such Option is canceled due to the
exercise of such Alternative Rights shall not again be available for
further grants under the Plan; and
(v) each Share awarded or deemed to be awarded under the preceding
subsections shall be treated as Shares, even if the Award is for a
security other than Shares.
(b) ADJUSTMENTS OF AGGREGATE NUMBER OF SHARES. The aggregate number of
Shares stated in Section 5(a) shall be subject to appropriate adjustment, from
time to time, in accordance with the provisions of Section 7 hereof.
6. AWARDS.
(a) OPTIONS AND RIGHTS.
(1) GRANTS OF OPTIONS. Options granted under the Plan may be either
ISOs or non-qualified stock options. At the time an Option is granted,
the Committee may, in its discretion, designate whether such Option
(i) is to be an ISO, or (ii) is not to be treated as an ISO for
purposes of this Plan and the Code. No Option which is intended to
qualify as an ISO shall be granted under this Plan to any individual
who, at the time of such grant, is not an employee of the Company or
an Affiliate.
Notwithstanding any other provision of the Plan to the contrary,
to the extent that the aggregate Fair Market Value (determined at the
date an Option is granted) of the Shares with respect to which an
Option intended to be an ISO (and any other ISO granted to the holder
under the Plan or any other plans of the Company or an Affiliate)
first becomes exercisable during any calendar year exceeds $100,000,
such Option shall be treated as an Option which is not an ISO. Options
with respect to which no designation is made by the Committee shall be
deemed to be ISOs to the extent that the $100,000 limitation described
in the preceding sentence is met. This paragraph shall be applied by
taking Options into account in the order in which they are granted.
No ISO shall be granted to any person who, at the time of the
grants, owns Shares possessing more than 10% of the total combined
voting power of the Company or an Affiliate (other than the Special
Subsidiary) of the Company, unless (i) on the date such ISO is
<PAGE> 77
granted, the Option price is at least 110% of the Fair Market Value
per Share subject to the ISO and (ii) such ISO by its terms is not
exercisable after the expiration of five years from the date such ISO
is granted.
The purchase price per Share pursuant to the exercise of any
Option shall be fixed by the Committee at the time of grant; provided,
however, that the purchase price per (regardless of whether such
Option is an ISO or a non-qualified Option) shall not be less than the
Fair Market Value of a Share on the date on which the Option is
granted. In addition, the Committee shall designate the number of
Shares, the terms and conditions (which may include, without
limitation, the achievement of specific goals), with respect to
Options granted under the Plan. Options may be granted by the
Committee to any eligible at any time and from time to time.
The form of Option shall be as determined from time to time by
the Committee. A certificate of Option signed by the Chairman of the
Board or the President or Vice President and attested by the Treasurer
or an Assistant Treasurer or Secretary or an Assistant Secretary of
the Company shall be delivered to each person to whom Options are
granted.
(2) GRANTS OF RIGHTS. The Committee shall have the authority in its
discretion to grant to any eligible person Rights which may be granted
separately or in connection with an Option (either at the time of
grant or, with respect to a non-qualified Option, at any time during
the term of the Option). Rights granted in connection with an Option
shall be granted with respect to the same number of Shares then
covered by the Option and may be exercised, as determined by the
Committee in its discretion at the time of the grant of the Rights,
either in conjunction with, or as an alternative to, the exercise of
the related Option; provided, however, that Rights granted in
connection with an ISO can only be exercised as alternative to the
exercise of the ISO.
Rights granted in connection with an Option that entitle the
holder thereof to receive payment from the Company only if and to the
extent that the related Option is exercisable and is exercised are
referred to herein as "Conjunctive Rights." Upon any exercise of an
Option in respect of which Conjunctive Rights shall have been granted,
the holder of the Conjunctive Rights shall be entitled to receive
payment of an amount equal to the product obtained by multiplying (i)
the Spread, or such percentage or portion of the Spread as shall be
determined by the Committee at the time of grant, by (ii) the number
of Shares in respect of which the related Option shall have then been
so exercised. Notwithstanding any provision of the Plan to the
contrary, Conjunctive Rights may not be granted in relation to an ISO.
Rights granted in connection with an Option that entitle the
holder thereof to receive payment from the Company only if, and to the
extent that, the related Option is exercisable, by surrendering the
Option with respect to the number of Shares as to which such Rights
are then exercised are referred to herein as "Alternative Rights."
Notwithstanding the preceding sentence, any Alternative Rights that
relate to an ISO may be exercised only at such times that there is a
positive Spread. Upon any exercise of Alternative Rights, the holder
thereof shall be entitled to receive payment of an amount-equal to
the-product obtained by multiplying (i) the Spread, or such percentage
or portion of the Spread as shall be determined by the Committee at
the time of grant, by (ii) the number of Shares in respect of which
the Alternative Rights shall have then been so exercised.
<PAGE> 78
Rights granted without relationship to an Option shall be
exercisable at such rate as determined by the Committee. Such Rights
shall entitle the holder, upon the exercise thereof, to receive
payment from the Company of an amount equal to the product obtained by
multiplying (i) the Spread, or such percentage or portion of the
Spread as shall be determined by the Committee at the time of grant,
by (ii) the number of Shares in respect of which the Rights shall have
then been so exercised.
Notwithstanding anything contained herein, the Committee may, in
its sole discretion, limit the amount payable upon the exercise of
Rights. Any such limitation shall be determined as of the date of
grant and noted on the certificate evidencing the grant of the Rights.
Payment of the amount determined hereunder upon the exercise of
any Rights shall be made solely in cash, or solely in Shares valued at
their Fair Market Value on the date of exercise of the Rights, or in a
combination of cash and Shares, as the holder may elect, provided that
any election by the holder shall be subject to approval by the
Committee. No fractional Shares shall be issued by the Company, and
settlement therefor shall be made in cash.
Notwithstanding any other provision of the Plan or of the Rights,
for purposes of determining the amount of the Spread in the case of a
holder of Rights who is an Insider, the Committee, in its sole
discretion, may designate a single Fair Market Value per Share with
respect to all such holders who exercise Rights during any single ten
day period; provided, however, that the Fair Market Value per Share
designated by the Committee during any such period shall in no event
be greater than the highest Fair Market Value per Share on any day
during such period or less than the lowest Fair Market Value per Share
on any day during such period.
The form of Rights shall be as determined from time to time by
the Committee. A certificate of Rights signed by the Chairman of the
Board or the President or a Vice President and attested by the
Treasurer or an Assistant Treasurer, or Secretary or an Assistant
Secretary, of the Company shall be delivered to each person to whom
Rights are granted.
The Committee may fix such waiting periods, exercise dates or
other limitations as it shall deem appropriate with respect to Rights
granted under the Plan including, without limitation, the achievement
of specific goals; provided, however, that each Right granted
hereunder shall be exercisable only upon consent of the Committee.
(3) PAYMENT OF OPTION EXERCISE PRICE. Upon exercise of an Option, the
full Option purchase price for the Shares with respect to which the
Option is being exercised shall be payable to the Company, (i) in cash
or by a check payable and acceptable to the Company or (ii) subject to
the approval of the Committee, by tendering to the Company Shares
owned by the holder for at least six months having an aggregate Fair
Market Value per Share as of the date of exercise and tender which is
not greater than the full Option purchase price for the Shares with
respect to which the Option is being exercised and by paying the
remainder of the Option purchase price as provided in (i) above;
however, the Committee may, upon confirming that the holder owns the
number of additional Shares being tendered, authorize the issuance of
a new certificate for the number of Shares being acquired pursuant to
the exercise of the Option less the number of Shares being tendered
upon the exercise and return to the holder (or not require surrender
of) the certificate for the Shares being tendered upon the exercise.
<PAGE> 79
Notwithstanding the preceding, a holder may not use any Shares
acquired pursuant to an Award granted under this Plan (or any other
plan maintained by the Company or any Affiliate) unless the holder has
beneficially owned such Shares for at least six months. Payment
instruments will be received subject to collection. In addition to the
foregoing methods of payment, the full Option purchase price for
Shares with respect to which the Option is being exercised may be
payable to the Company by such other methods as the Committee may
permit from time to time.
(4) TERM. The term of each Option and Right shall be determined by the
Committee at the date of grant; provided, however, that each Option
that is an ISO shall, notwithstanding anything in the Plan to the
contrary, expire not more than ten years from the date the Option is
granted (or five years from the date of grant to the extent required
under Section 6(a)(1)) or, if earlier, the date specified in the
certificate evidencing the grant of such Option. An Option that is a
non-qualified stock option shall expire not more than ten years from
the date the Option is granted, or if earlier, the date specified in
the certificate evidencing the grant of such Option. A Right not
granted in connection with an Option shall expire not more than ten
years from the date the Right is granted or, if earlier, the date
specified in the certificate evidencing the grant of the Right.
(5) TERMINATION OF EMPLOYMENT OR RELATIONSHIP. In the event that a
Participant's employment or relationship with the Company and its
Affiliates shall terminate, for reasons other than (i) retirement
pursuant to a retirement plan or policy of the Company or one of its
Affiliates ("retirement"), (ii) permanent disability as determined by
the Committee based on the opinion of a physician selected or approved
by the Committee ("permanent disability") or (iii) death, the
Participant's Options and Rights shall be exercisable by him or her,
subject to subsection (4) above, only within 90 business days after
such termination, but only to the extent the Option or Right was
exercisable immediately prior to such termination.
If, however, any such termination is due to retirement or
permanent disability, the Participant shall have the right, subject to
the provisions of subsection (6) above, to exercise his or her Option
and Rights at any time within the three month period commencing on the
day next following such termination. Whether any termination is due to
retirement or permanent disability, and whether an authorized leave of
absence on military or government service or for other reasons shall
constitute a termination for the purpose of the Plan, shall be
determined by the Committee.
If a Participant shall die while entitled to exercise an Option
or Rights, the Participant's estate, personal representative or
beneficiary, as the case may be, shall have the right, subject to the
provisions of subsection (4) above, to exercise the Option at any time
within six months from the date of the holder's death.
If the employment, consulting arrangement or service of any
Participant with the Company or an Affiliate shall be terminated
because of the Participant's violation of the duties of such
employment, consulting arrangement or service with the Company or an
Affiliate as he or she may from time to time have, the existence of
which violation shall be determined by the Committee in its sole
<PAGE> 80
discretion (which determination by the Committee shall be conclusive)
all unexercised Options of such Participant shall terminate
immediately upon such termination of such Participant's employment,
consulting arrangement or service with the Company and all Affiliates,
and a Participant whose employment, consulting arrangement or service
with the Company and Affiliates is so terminated, shall have no right
after such termination to exercise any unexercised Option he or she
might have exercised prior to termination of his or her employment,
consulting arrangement or service with the Company and Affiliates.
(6) OPTIONS GRANTED BY OTHER CORPORATIONS. Options may be granted
under the Plan from time to time in substitution for stock options
held by employees and directors of corporations who become key
employees or Trust Managers or directors of the Company or of any
Affiliate as a result of any "corporate transaction" as defined in the
Treasury Regulations promulgated under Section 424 of the Code.
(b) RESTRICTED SHARE AWARDS.
(1) AWARDS OF RESTRICTED SHARES. Restricted Share Awards may be
awarded by the Committee to any individual eligible to receive the
same, at any time and from time to time before May 27, 2003. In
addition, and without limiting the generality of the foregoing, the
Committee shall grant to any individual who is entitled to receive a
bonus under the Company's ash bonus incentive plan, a Restricted Share
Award with respect to Shares having a Fair Market Value on the date of
the grant of such Restricted Share Award equal to a specified
percentage determined by the Committee of the amount of such
individual's bonus, provided that such individual has made an
irrevocable election, at least six months prior to the date of the
grant of such Restricted Share Award, to receive such Restricted Share
Aware in lieu of such bonus.
(2) PURCHASE PRICE UNDER RESTRICTED SHARE AWARDS. The purchase price
of Restricted Shares to be purchased pursuant to a Restricted Share
Award shall be fixed by the Committee at the time of the grant of the
Restricted Share Award; provided, however, that such purchase price
shall not be less than the par value per Share of the Shares subject
to the Restricted Share Award. The Committee shall specify, within its
discretion, the time and manner in which payment of such purchase
price shall be paid.
(3) DESCRIPTION OF RESTRICTED SHARES. All Restricted Shares purchased
by an eligible person shall be subject to the following conditions:
(i) Restricted Shares shall be subject to such
restrictions, terms and conditions as the Committee may
establish, which may include, without limitation, "lapse"
and "non-lapse" restrictions (as such terms are defined
in regulations promulgated under Section 83 of the Code)
and the achievement of specific goals;
(ii) the Restricted Shares may not be sold, exchanged,
pledged, transferred, assigned or otherwise encumbered
or disposed of until the terms and conditions set by
the Committee at the time of the grant of the Restricted
Share Award have been satisfied;
(iii) each certificate representing Restricted Shares
issued pursuant to this Plan shall bear a legend making
appropriate reference to the following:
<PAGE> 81
"the Shares represented by this certificate have been
issued pursuant to the terms of the 1993 Share Incentive
Plan of Camden Property Trust and may not be sold,
pledged, transferred, assigned or otherwise encumbered
in any manner except as is set forth in the terms of such
award dated ____________, ________________;" and
(iv) except as set forth in Section 8 of this Plan, no
Restricted Shares granted pursuant to this Plan shall be
subject to vesting requirements over a period of less
than three years.
If a certificate representing Restricted Shares is issued to an
individual (whether or not escrowed as provided below), the individual
shall be the record owner of such Shares and and shall have all the
rights of a shareholder with respect to such Shares (unless the
Restricted Share Award specifically provides otherwise), including the
right to vote and the right to receive dividends or other dividends
made or paid with respect to such Shares.
In order to enforce the restrictions, terms and conditions that
may be applicable to a Participant's Restricted Shares, the Committee
may require the Participant, upon the receipt of a certificate or
certificates representing such Shares, or at any time thereafter, to
deposit such certificate or certificates, together with stock powers
and other instruments of transfer, appropriately endorsed in blank,
with the Company or an escrow agent designated by the Company under an
escrow agreement, which may be a part of a Restricted Share Award, in
such form as shall be determined by the Committee.
After the satisfaction of the terms and conditions set by the
Committee with respect to Restricted Shares issued to an individual,
and provided the Restricted Shares are not subject to a non-lapse
restriction, a new certificate, without the legend set forth above,
for the number of Shares that are no longer subject to such
restrictions, terms and conditions shall be delivered to the
individual. If such terms and conditions are satisfied as to a
portion, but fewer than all, of such Shares, the remaining Shares
issued with respect to such Award shall either be reacquired by the
Company or, if appropriate under the terms of the award applicable to
such Shares, shall continue to be subject to the restrictions, terms
and conditions set by the Committee at the time of Award.
(4) TERMINATION OF EMPLOYMENT OR RELATIONSHIP. If the employment or
relationship with the Company and its Affiliates of a holder of a
Restricted Share Award is terminated for any reason before
satisfaction of the terms and conditions for the vesting (within the
meaning of Section 83 of the Code) of all Shares subject to the
Restricted Share Award, the number of Restricted Shares not
theretofore vested shall be reacquired by the Company and forfeited,
and the purchase price paid for such forfeited Shares by the holder
shall be returned to the holder. If Restricted Shares issued shall be
reacquired by the Company and forfeited as provided above, the
individual, or in the event of his death, his personal representative,
shall forthwith deliver to the Secretary of the Company the
certificates representing such Shares, accompanied by such instrument
of transfer, if any, as may reasonably be required by the Company.
(5) RESTRICTED SHARE AWARDS TO INDEPENDENT TRUST MANAGERS. Each
Independent Trust Manager shall be granted a Restricted Share Award on
or her Election Date. Thereafter, each Independent Trust Manager shall
be granted a Restricted Share Award of 2,000 or up to 2,225 Shares, at
the discretion of the Board of Trust Managers, on each anniversary of
the Election Date for so long as the individual remains an Independent
<PAGE> 82
Trust Manager. The Restricted Shares granted on an Election Date under
this Section 6(b)(5) shall vest at the rate of 20% on each anniversary
of the Election Date over a five year period. Notwithstanding the
preceding sentences, all or any part of any Restricted Shares granted
pursuant to this Section 6(b)(5) shall immediately vest (but in no
event during the six-month period commencing on the date of grant) in
the event of the holder's retirement from the Company and all
Affiliates on or after his or her 65th birthday, the holder's
permanent disability (within the meaning of Section 22(e)(3) of the
Code), or the holder's death. All or any part of any Restricted Shares
granted pursuant to this Section 6(b)(5) also shall vest (but in no
event during the six-month period commencing on the date of grant)
upon the occurrence of a Change in Control (as defined in Section 8)
while the holder is serving as a Trust Manager of the Company. Any
Restricted Shares granted pursuant to this Section 6(b)(5) to the
extent unvested, shall terminate immediately upon the holder's ceasing
to serve as a Trust Manager of the Company (for reasons other than
retirement, permanent disability or death as described above). To the
extent the Board shall appoint a "Lead Independent Trust Manager,"
such person shall additionally be entitled to receive on the date of
appointment and on the first anniversary date thereafter, a Restricted
Share Award of 2,000 Shares. Thereafter, on each anniversary date, the
Lead Independent Trust Manager will receive a Restricted Share Award
of 1,000 Shares.
No grants of Restricted Shares or any other grants under this
Plan may be made to an Independent Trust Manager except in accordance
with this Section 6(b) (5). Notwithstanding any other provision of the
Plan to the contrary, the provisions of this Section 6(b)(5) shall not
be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules or regulations promulgated thereunder.
(c) PERFORMANCE UNITS AND PERFORMANCE SHARE AWARDS.
(1) AWARDS. Awards may be granted in the form of Performance Units or
Performance Share Awards. Performance Units are units valued by
reference to designated criteria established by the Committee, other
than Shares. Performance Share Awards are Shares expressed in terms
of, or valued by reference to, a Share. Awards of Performance Units
and Performance Share Awards shall refer to a commitment by the
Company to make a distribution to the Participant or to his or her
beneficiary depending on (i) the attainment of the performance
objectives and other conditions established by the Committee and (ii)
the base value of the Performance Unit or Performance Share Award,
respectively, as established by the Committee.
(2) SETTLEMENT. Settlement of Performance Units and Performance Share
Awards may, in the sole discretion of the Committee, be in cash, in
Shares (held for at least six months), or a combination thereof. The
Committee may designate a method of converting Performance Units into
Shares, including but not limited to a method based on the Fair Market
Value over a series of consecutive trading days. Prior to the
settlement of any Performance Unit or Performance Share Award in
Shares, the recipient of such Award shall pay to the Company an amount
of cash equal to, at a minimum, the par value per Share multiplied by
the number of Shares to be issued.
(3) NO RIGHTS AS A SHAREHOLDER. Participants shall not be entitled to
exercise any voting rights or to receive any interest or dividends
with respect to Performance Units or Performance Share Awards.
<PAGE> 83
(d) LIMITED RIGHTS.
The Committee shall have the power to grant limited Rights ("Limited
Rights") which shall be a part of an Award. Limited Rights shall provide for the
automatic cash payment to the holder of the Award equal to the Spread (or other
determination of the value of the Award as fixed by the Committee) upon the
occurrence of a Change in Control (as defined Section 8) on the dated fixed by
the Committee at the time of the grant of such Limited Right. Limited Rights may
provide that Committee approval is not required for the exercise of such Limited
Right.
(e) DIVIDENDS AND DIVIDEND EQUIVALENTS.
An Award (including without limitation an Option Award) may provide the
Participant with the right to receive dividend payments or dividend equivalent
payments with respect to Shares subject to the Award (both before and after the
Shares subject to the Award are earned, vested or acquired), which payments may
be either made currently or credited to an account for the Participant, and may
be settled in cash or Shares as determined by the Committee. Any such
settlements, and any such crediting of dividends or dividend equivalents or
reinvestment in Shares, may be subject to such conditions, restrictions and
contingencies as the Committee shall establish.
(f) CONSIDERATION FOR AWARDS.
Subject to the requirements of the Texas Act, the Company shall obtain such
consideration for the grant of an Award under this Section 6 as the Committee in
its discretion may determine.
7. ADJUSTMENT PROVISIONS.
If, prior to the complete exercise of any Option, or prior to the
expiration or lapse of all of the restrictions and conditions imposed pursuant
to a Restricted Share Award, there shall be declared and paid a dividend upon
the Shares or if the Shares shall be split up, converted, exchanged,
reclassified, or in any way substituted for, then (i) in the case of an Option,
the Option, to the extent that it has not been exercised, shall entitle the
holder thereof upon the future exercise of the Option to such number and kind of
securities or cash or other property subject to the terms of the Option to which
he would have been entitled had he actually owned the Shares subject to the
unexercised portion of the Option at the time of the occurrence of such
dividend, split-up, conversion, exchange, reclassification or substitution, and
the aggregate purchase price upon the future exercise of the Option shall be the
same as if the originally optioned Shares were being purchased thereunder; and
(ii) in the case of Restricted Shares issued pursuant to a Restricted Share
Award, the holder of such Award shall receive, subject to the same restrictions
and other conditions of such Award as determined pursuant to the provisions of
Section 6(b), the same securities or other property as are received by the
holders of the Company's Shares pursuant to such dividend, split-up, conversion,
exchange, reclassification or substitution. Any fractional Shares or securities
payable upon the exercise of the Option as a result of such adjustment shall be
payable in cash based upon the Fair Market Value of such Shares or securities at
the time of such exercise. If any such event should occur, the number of Shares
with respect to which Awards remain to be issued, or with respect to which
Awards may be reissued, shall be adjusted in a similar manner.
In addition to the adjustments provided for in the preceding paragraph,
upon the occurrence of any of the events referred to in said paragraph prior to
the complete exercise of any Rights or Limited Rights, or prior to the complete
expiration of the vesting period with respect to Performance Units or a
Performance Share Award, the Committee, in its sole discretion, shall determine
the amount of cash and/or number of Shares or other property to which the holder
<PAGE> 84
of the Rights shall be entitled upon their exercise, or to which the holder of
the Performance Units or Performance Share Award shall be entitled upon the
expiration of the vesting period, so that there shall be no increase or dilution
in the cash and/or value of the Shares or other property to which the holder of
Rights or of Performance Units or a Performance Share Award shall be entitled by
reason of such events.
Notwithstanding any other provision of the Plan, in the event of a
recapitalization, merger, consolidation, rights offering, separation,
reorganization or liquidation, or any other change in the corporate structure or
outstanding Shares, the Committee may make such equitable adjustments to the
number of Shares and the class of shares available hereunder or to any
outstanding Awards as it shall deem appropriate to prevent dilution or
enlargement of rights.
8. ACCELERATION.
Notwithstanding any other provision of the Plan to the contrary, all or any
part of any remaining unexercised Options and Rights granted to any person may
be exercised in the following circumstances (but in no event during the six
month period commencing on the date granted) and all or any part of any other
Award not theretofore vested shall vest: (a) with respect to Options or Rights
only, immediately upon (but prior to the expiration of the term of the Option or
Rights) retirement, (b) subject to the provisions of Section 6 hereof, upon the
permanent disability or death of the holder, (c) upon the occurrence of such
special circumstance or event as in the opinion of the Committee merits special
consideration, or (d) upon a Change in Control as defined below in which case
the date on which such immediate exercisability and accelerated vesting shall
occur (the "Acceleration Date".) shall be the date of the occurrence of the
Change in Control.
A "Change in Control" shall be deemed to have occurred if:
(a) any "person" (as such term is used in Section 13(d) and
14(d) of the Exchange Act) (other than the Company, any
trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any company owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of
Shares in the Company) together with its "affiliates" and
"associates" (as such terms are defined in Rule 12b-2 of the
Exchange Act) makes a tender or exchange offer for or is or
becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), or has become the beneficial owner
during the most recent twelve-month period ending on the date
of the most recent acquisition by such person directly or
indirectly, of securities of the Company representing 40% or
more of the combined voting power of the Company's then
outstanding securities; or
(b) during any period of two consecutive years (not including
any period prior to the effective date of this Plan),
individuals who at the beginning of such period constitute the
Board, and any new Trust Manager (other than a Trust Manager
designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (a),
(c) or (d) of this definition) whose election by the Board or
nomination-for election by the Company's shareholders was
approved by a vote of at least two-thirds of the Trust
Managers then still in office who either were Trust Managers
at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason
to constitute at least a majority thereof; or
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other company other than
(i) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior
<PAGE> 85
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) more than 80% of the combined voting
power of the voting securities of the Company (or such
surviving entity) outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no "person" (as hereinabove defined)
acquires more than 25% of the combined voting power of the
Company's then outstanding securities; or
(d) the shareholders of the Company adopt a plan of complete
liquidation of the Company or approve an agreement for the
sale, exchange or disposition by the Company of all or a
significant portion of the Company's assets. For purposes of
this clause (d), the term "the sale, exchange or disposition
by the Company of all or a significant portion of the
Company's assets" shall mean a sale or other disposition
transaction or series of related transactions involving assets
of the Company or any subsidiary of the Company (including the
stock of any subsidiary of the Company) in which the value of
the assets or stock being sold or otherwise disposed of (as
measured by the purchase price being paid therefore or by such
other method as the Board determines is appropriate in a case
where there is no readily ascertainable purchase price)
constitutes more than 33-1/3% of the Fair Market Value of the
Company (as hereinafter defined). For purposes of the
preceding sentence, the "fair market value of the Company"
shall be the aggregate market value of the outstanding shares
of beneficial interest of the Company (on a fully diluted
basis) plus the aggregate market value of the Company's other
outstanding equity securities. The aggregate market value of
the Shares shall be determined by multiplying the number of
Shares (on a fully diluted basis) outstanding on the date of
the execution and delivery of a definitive agreement with
respect to the transaction or series of related transactions
(the "Transaction Date") by the average closing price of the
Shares for the ten trading days immediately preceding the
Transaction Date. The aggregate market value of any other
equity securities of the Company shall be determined in a
manner similar to that prescribed in the immediately preceding
sentence for determining the aggregate market value of the
Shares or by such other method as the Board shall determine is
appropriate.
Notwithstanding the foregoing, (except as provided otherwise in an Award) a
Change in Control shall not be deemed to have occurred if, prior to the time a
Change in Control would otherwise be deemed to have occurred pursuant to the
above provisions, the Board determines otherwise.
9. RELOAD FEATURE.
(a) Automatically upon vesting of 20,000 or more Options, the
Participant holding such vested Options shall have the right
(the "Incentive Exchange Right") to exercise (at any time
during the time period the Options are exercisable) any such
vested Options. The exercise price for the Options must be
paid with Shares held by the Participant for at least six
months. Upon the exercise of the Options, the Participant
shall receive Shares covered by the exercised Options. Rather
than issuing the Participant the full number of Shares, the
Company shall have the right to net the Shares to be issued
against the Shares being surrendered by the Participant as
payment for the exercise price, i.e., upon receipt of proof
that the Shares have been held for at least six months, the
<PAGE> 86
Company shall direct that the Participant retain such Shares.
The Company shall then issue to the Participant Shares (the
"Incentive Payment") having a Fair Market Value equal to the
difference between the Fair Market Value of the Shares
underlying the exercised Options on the date the Incentive
Exchange Right is exercised and the exercise price of the
exercised Options. The Participant shall have the right to
receive bonus Shares by depositing 25% of the Incentive in
Shares (the "Base Shares") with the Company. With respect to
the Base Shares, the Participant will receive bonus Shares
(the "Bonus Shares") in an amount equal to the number of Base
Shares multiplied by 25%. The Bonus Shares shall be restricted
and the restrictions shall lapse as follows:
Year One - 10%
Year Two - 10%
Year Three - 80%
The Base Shares received by the Participant will be held by the Company
until the Bonus Shares vest in full; provided, however, the Participant may
elect at any time (upon written notice to the Company) to have the Company issue
the Base Shares to the Participant. If the Participant elects to receive the
Base Shares prior to the vesting of the Bonus Shares, all unvested Bonus Shares
shall be forfeited to the Company.
The Participant shall receive the remaining 75% of the Incentive Payment in
Shares ("Additional Base Shares"). Any Additional Base Shares shall be issued
directly to the Participant. With respect to the Additional Base Shares, the
Participant shall likewise receive bonus Shares (the "Additional Bonus Shares")
in an amount equal to the number of Additional Base Shares multiplied by 35%.
The Additional Bonus Shares shall be restricted and the restrictions shall lapse
as follows:
Year One - 10%
Year Two - 10%
Year Three - 10%
Year Four - 10%
Year Five - 60%
All restricted Shares received under this Section 9(a) and all Base Shares
held by the Company for the Participant shall have the same rights with respect
to voting and dividends as Restricted Shares awarded under this Plan.
(b) Upon exercise of the Incentive Exchange Right, the number
of Options as to which such rights were exercised shall be
"reloaded" and reissued to the Participant who exercised the
Incentive Exchange Right, such Options to represent the right
to purchase a number of Shares equal to the number of Options
exercised less the number of Shares received as the Incentive
Payment. Upon being reloaded, each Option shall again
represent the right to purchase a Share at an exercise price
equal to the Fair Market Value of the Share on the date of the
reload (the date of notice of exercise of the Incentive
Exchange Right). Vesting shall begin with respect to the
reloaded Options on the date of issuance of the reloaded
Options and the vesting term shall be the same as the
surrendered Options (i.e., ten years).
(c) Notwithstanding anything herein to the contrary:
(i) Options may be reloaded only once;
(ii) the maximum Fair Market Value of Incentive Payments
that may be made by the Company in any calendar year is
$1,000,000 per person;
(iii) the maximum Incentive Payments in Shares that any
officer, Trust Manager or 5% or more shareholder may
<PAGE> 87
receive under this Section 9 is limited to an amount equal
to 1% of the Company's outstanding Shares on the Amendment
Date; and
(iv) the maximum amount of Incentive Payments that may be
paid in Shares under this Section 9 is limited to an
amount equal to 5% of the Company's outstanding Shares on
the Amendment Date.
If a Participant gives notice of his or her intention to exercise his or
her Incentive Exchange Right and the Company has already paid its maximum amount
of Incentive Payments under items (iii) or (iv) above, the election under this
Section 9 shall be automatically revoked.
Following is an example reload exercise:
Participant A holds options to purchase 40,000 shares at a price of $20 per
share. All of the options have vested. Participant A elects to exercise 30,000
of his options to purchase shares via a Reload transaction pursuant to Section 9
of the Amended and Restated 1993 Share Incentive Plan. These options were
granted for 10 years and currently have 4 years until expiration. The Company's
shares are currently trading at $28 per share, and the Participant can prove
that he owns 25,000 shares that he has held for six months or longer.
The results of the Reload are as follows:
Option exercise price (30,000 X $20 = $600,000) $600,000
($600,000 / $28 = 21,429 shares) in the form of 21,429 shares
{Since Participant A owns at least 21,429 shares which have been held for
more than 6 months, he is able to exercise the Reload. He has chosen to exercise
on a "net" basis, and therefore is not required to deliver the actual physical
securities, but rather must only prove ownership.}
Incentive Payment {($28-$20) X 30,000 shares] $240,000
($240,000 / $28 = 8,571 shares) in the form of 8,571 shares
Base Shares (8,571 X 25% = 2,143 shares) 2,143 shares
Bonus Shares (2,143 X 25% = 536 shares) 536 shares
(vesting over 3 years - 10%, 10%, 80%)
Additional Shares (8,571 X 75% = 6,428 shares) 6,428 shares
Additional Bonus Shares (6,428 X 35% = 2,250 shares) 2,250 shares
(vesting over 5 years - 10%, 10%, 10%, 10%, 60%)
Reloaded Options priced at $28 per share,
expiring 10 years later. 21,429 options
(30,000 shares purchased - 8,571 Incentive Payment Shares = 21,429)
10. PARTICIPANT'S AGREEMENT.
If, at the time of the exercise of any Option or Right or the granting or
vesting of an Award, in the opinion of counsel for the Company, it is necessary
or desirable, in order to comply with any then applicable laws or regulations
<PAGE> 88
relating to the sale of securities, that the individual exercising the Option or
Right or receiving the Award shall agree to hold any Shares issued to the
individual for investment and without any present intention to resell or
distribute the same and that the individual will dispose of such Shares only in
compliance with such laws and regulations, the individual will, upon the request
of the Company, execute and deliver to the Company a further agreement to such
effect.
11. WITHHOLDING TAXES.
No Award may be exercised and no distribution of Shares or cash pursuant to
an Award may be made under the Plan until appropriate arrangements have been
made by the holder with the Company for the payment of any amounts that the
Company may be required to withhold with respect thereto, which arrangements may
include the tender of previously owned Shares or the withholding of Shares
issuable pursuant to such Award.
12. TERMINATION OF AUTHORITY TO MAKE GRANT.
No Awards will be granted pursuant to this Plan after May 27, 2003.
13. AMENDMENT AND TERMINATION.
The Board may from time to time and at any time alter, amend, suspend,
discontinue or terminate this Plan or, with the consent of an affected holder,
any outstanding Awards hereunder, provided, however, that no such action of the
Board may, without the approval of the shareholders of the Company, alter the
provisions of the Plan or outstanding Awards so as to (i) increase the maximum
number of Shares which may be subject to Awards under the Plan (except as
provided in Section 5(b)); or (ii) change the class of persons eligible to
receive Awards; or (iii) amend the Plan in any manner that would require
shareholder approval under Rule 16b-3 of the Exchange Act or under Section
162(m) of the Code.
14. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS.
Notwithstanding anything in the Plan to the contrary, if, at any time
specified herein for the making of any determination or payment, or the issuance
or other distribution of Shares, any law, regulation or requirement of any
governmental authority having jurisdiction in the premises shall require either
the Company or the Participant (or the Participant's beneficiary), as the case
may be, to take any action in connection with any such determination, payment,
issuance or distribution, the issuance or distribution of such Shares or the
making of such determination or payment, as the case may be, shall be deferred
until such action shall have been taken.
15. CHANGE IN CONTROL LIMITATION.
Notwithstanding any other provision in the Plan, to the extent that the
acceleration of exercisability or vesting of an Award under this Plan following
a Change in Control, when aggregated with other payments or benefits to the
Participant, whether or not payable pursuant to this Plan, would, as determined
by tax counsel selected by the Company, result in "excess parachute payments"
(as defined in Section 280G of the Code) such parachute payments or benefits
provided to a Participant under this Plan shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code, but only if, by reason of such reduction, the
Participant's net after tax benefit shall exceed the net after tax benefit if
such reduction were not made. "Net after tax benefit" shall mean the sum of (i)
all payments and benefits which a Participant receives or is then entitled to
receive that would constitute a "parachute payment" within the meaning of
Section 280G of the Code, less (ii) the amount of federal income taxes payable
<PAGE> 89
with respect to the payments and benefits described in (i) above calculated at
the maximum marginal income tax rate for the year in which such payments and
benefits shall be paid to the Participant (based upon the rate for such year as
set forth in the Code at the time of the first payment of the foregoing), less
(iii) the amount of excise taxes imposed with respect to the payments and
benefits described in (i) above by Section 4999 of the Code.
16. MISCELLANEOUS.
(a) No Employment Contract. Nothing contained in the Plan
shall be construed as conferring upon any Participant the
right to continue in the employ, or as a Trust Manager or
Director of or consultant to, of the Company or any Affiliate.
(b) Employment or Service with Affiliates. Employment by, or
service for, the Company for the purpose of this Plan shall be
deemed to include employment by, or service for, any
Affiliate.
(c) No Rights as a Shareholder. A Participant shall have no
rights as a shareholder with respect to Shares covered by the
Participant's Award until the date of the issuance of such
Shares to the Participant pursuant thereto. No adjustment will
be made for dividends or other distributions or rights for
which the record date is prior to the date of such issuance.
(d) Nonassignability. Neither a Participant nor a
Participant's estate, personal representative or beneficiary
shall have the power or right to sell, exchange, pledge,
transfer, assign or otherwise encumber or dispose of such
Participant's estate's, personal representative's or
beneficiary's interest arising under the Plan nor shall such
interest be subject to seizure for the payment of a
Participant's or beneficiary's debts, Judgments, alimony, or
separate maintenance or be transferable by operation of the
law in the event of a Participant's, estate's, personal
representative's or beneficiary's bankruptcy or insolvency
and to the extent any such interest arising under the Plan is
awarded to a spouse pursuant to any divorce proceeding, such
interest shall be deemed to be terminated and forfeited,
notwithstanding any vesting provisions or other terms herein
or in such Award.
(e) Application of Funds. The proceeds received by the
Company from the sale of Shares pursuant to the Plan will be
used for its general business purposes.
(f) Governing Law: Construction. All rights and obligations
under the Plan shall be governed by, and the Plan shall be
construed in accordance with, the laws of the State of Texas
without regard to the principles of conflicts of laws. Titles
and headings to Sections herein are for purposes of reference
only, and shall in no way limit, define or otherwise affect
the meaning or interpretation of any provisions of the Plan.
<PAGE> 90
EXHIBIT 10.19
CAMDEN PROPERTY TRUST
1999 EMPLOYEE SHARE PURCHASE PLAN
NOVEMBER 3, 1999
1. PURPOSE
The primary purpose of this Plan is to encourage Share ownership by each
Eligible Employee in the belief that such Share ownership will increase his or
her interest in the success of Camden Property Trust, a Texas real estate
investment trust (the "Company").
2. DEFINITIONS
2.1. The term "Account" shall mean the separate bookkeeping account
established and maintained by the Plan Administrator for each Participant for
each Purchase Period to record the contributions made on his or her behalf to
purchase Shares under this Plan.
2.2. The term "Beneficiary" shall mean the person designated as such in
accordance with Section 8.
2.3. The term "Board" shall mean the Board of Trust Managers of the
Company.
2.4. The term "Closing Price" shall mean the closing price for a Share as
reported for such day in The Wall Street Journal or in any successor to The Wall
Street Journal or, if there is no such successor, in any publication selected by
the Committee or, if no such closing price is so reported for such day.
2.5. The term "Committee" shall mean the Compensation Committee of the
Board.
2.6. The term "Company" shall mean Camden Property Trust, a Texas real
estate investment trust.
2.7. The term "Election Form" shall mean the form which an Eligible
Employee shall be required to properly complete in writing and timely file at
least 15 days prior to the commencement of any Purchase Period in order to make
any of the elections available to an Eligible Employee under this Plan.
2.8. The term "Eligible Employee" shall mean each officer or employee of a
Participating Employer who is shown on the payroll records of a Participating
Employer as an employee for at least twelve (12) months prior to the
commencement of a Purchase Period.
2.9. The term "Participant" shall mean (a) for each Purchase Period an
Eligible Employee who has elected to purchase Shares in accordance with Section
4 in such Purchase Period and (b) any person for whom Shares are held pending
delivery under Section 7.
<PAGE> 91
2.10. The term "Participating Employer" shall mean the Company and any
affiliated entity which is designated as such by the Committee.
2.11. The term "Pay" means all cash compensation paid to an Eligible
Employee for services to a Participating Employer, including regular straight
time earnings or draw, overtime, commissions and bonuses, but excluding amounts
paid as living allowance or reimbursement of expenses and other similar payments
paid to him or her by the Participating Employer.
2.12. The term "Pay Day" means the day as of which Pay is paid to a
Participant.
2.13. The term "Plan" shall mean this Camden Property Trust 1999 Employee
Share Purchase Plan, effective as of October 1999, and as thereafter amended
from time to time.
2.14. The term "Plan Administrator" shall mean the Company or the Company's
delegate.
2.15. The term "Purchase Period" shall mean a period set by the Committee.
Unless changed by the Committee, each Purchase Period shall begin on January 1
and July 1 each year and end on June 30 and December 31 each year.
2.16. The term "Purchase Price" for each Purchase Period shall mean 85% of
the lesser of: (a) the Closing Price for a Share on the last trading day of such
Purchase Period or (b) the Closing Price for a Share on the first trading day of
such Purchase Period.
2.17. The term "Rule 16b-3" shall mean Rule 16b-3 promulgated under Section
16(b) of the Securities Exchange Act of 1934, as amended, or any successor to
such rule.
2.18. The term "Share" shall mean the common shares of beneficial interest,
par value $.01 per share, of the Company. The aggregate number of Shares
available for grant under this Plan shall not exceed 500,000, subject to
adjustment pursuant to Section 17 hereof plus any Shares acquired by the Plan
Administrator in the open market for the Accounts of the Participants.
3. ADMINISTRATION
Except for the exercise of those powers expressly granted to the Committee
to determine the Closing Price, who is a Participating Employer and to set the
Purchase Period, the Plan Administrator shall be responsible for the
administration of this Plan and shall have the power in connection with such
administration to interpret the Plan and to take such other action in connection
with such administration as the Plan Administrator deems necessary or equitable
under the circumstances. The Plan Administrator also shall have the power to
delegate the duty to perform such administrative functions as the Plan
Administrator deems appropriate under the circumstances. Any person to whom the
<PAGE> 92
duty to perform an administrative function is delegated shall act on behalf of
and shall be responsible to the Plan Administrator for such function. Any action
or inaction by or on behalf of the Plan Administrator under this Plan shall be
final and binding on each Eligible Employee, each Participant and on each other
person who makes a claim under this Plan based on the rights, if any, of such
Eligible Employee or Participant under this Plan.
4. PARTICIPATION
4.1. Each person who is an Eligible Employee on the enrollment date shall
be a Participant in this Plan for the related Purchase Period, if he or she (i)
properly completes and timely files an Election Form with the Plan Administrator
to elect to participate in this Plan; and (ii) deposits, either through payroll
deduction or a lump sum, the full amount of his or her desired purchase amount
prior to the final pricing day of a Purchase Period. An Election Form may
require an Eligible Employee to provide such information and to agree to take
such action (in addition to the action required under Section 5) as the Plan
Administrator deems necessary or appropriate in light of the purpose of this
Plan or for the orderly administration of this Plan.
4.2. Notwithstanding anything herein to the contrary, no person shall be
deemed to be an Eligible Employee:
(a) if immediately after such participation, Participant would own
Shares, and/or hold outstanding options to purchase Shares, possessing 5%
or more of the total combined voting power or value of all classes of
Shares of the Company (for purposes of this paragraph, the rules of Section
424(d) of the Internal Revenue Code of 1986, as amended, shall apply in
determining Share ownership of any Participant); or
(b) if such Participant's rights to purchase Shares under all employee
share purchase plans of the Company accrues at a rate which exceeds $25,000
in fair market value of the Shares (determined at the time of Plan
enrollment) for each calendar year in which such purchase right is
outstanding; or
(c) if immediately prior to commencement of a Purchase Period, the
Eligible Employee has not been an employee of the Company for at least one
year; or
(d) if the Participant is no longer an Eligible Employee at the final
pricing date and when the shares are purchased.
Contributions
4.3. Each Participant's Election Form under Section 4 shall specify the
contributions that he or she proposes to make for the related Purchase Period.
If the Participant elects to make payroll deductions, such contributions shall
be expressed as a specific dollar amount that Participant proposes to contribute
in cash or a percentage of the Participant's Pay that his or her Participant
Employer is authorized to deduct from his or her Pay each Pay Day during the
Purchase Period (or as a combination of such cash and such payroll deduction
contributions); provided, however:
<PAGE> 93
(a) the minimum payroll deduction for a Participant for each Pay Day
for purposes under this Plan shall be $10.00, and
(b) the maximum contribution which a Participant may make for purposes
under this Plan for any calendar year shall be $25,000.
Notwithstanding the preceding, a Participant may, on his or her
Election Form, elect to make cash deposits to the Plan at any time during a
Purchase Period in any amount up to the $25,000 aggregate annual limit
rather than or in addition to regular deductions from pay.
4.4. A Participant shall have the right to amend his or her Election Form
at any time to reduce or to stop his or her contributions, and such amendment
shall be effective immediately for cash contributions and as soon as practicable
after the Plan Administrator actually receives such amended Election Form for
payroll deductions.
4.5. A Participant may withdraw his or her contributions at any time. A
withdrawal shall be deducted from the Participant's Account as of the date the
Plan Administrator receives such amended Election Form, and the actual
withdrawal shall be effected by the Plan Administrator as soon as practicable
after such date. A Participant who withdraws his or her contributions in full
may not be eligible to participate in the Plan for six (6) months from the date
of such withdrawal, i.e. will not be eligible for the next Purchase Period.
4.6. All payroll deductions made for a Participant shall be credited to his
or her Account as of the Pay Day as of which the deduction is made. All cash
deposits made by a Participant shall be credited to his or her Account as of the
date such amount is received by the Plan Administrator. All contributions made
by a Participant under this Plan, whether in cash or through payroll deductions,
shall be held by the Company or by such Participant's Participating Employer, as
agent for the Company. All such contributions shall be held as part of the
general assets of the Company and shall not be held in trust or otherwise
segregated from the Company's general assets. No interest shall be paid or
accrued on any such contributions. Each Participant's right to the contributions
credited to his or her Account shall be that of a general and unsecured creditor
of the Company. Each Participating Employer shall have the right to make such
provisions as it deems necessary or appropriate to satisfy any tax laws with
respect to purchases of Shares made under this Plan.
4.7. The balance credited to the Account of an Eligible Employee
automatically shall be refunded in full (without interest) if his or her status
as an employee of all Participating Employers terminates for any reason
whatsoever during a Purchase Period. Such refunds shall be made as soon as
practicable after the Plan Administrator has actual notice of any such
termination.
<PAGE> 94
5. PURCHASE OF SHARES
5.1. If a Participant is an Eligible Employee through the end of a Purchase
Period, the balance which remains credited to his or her Account at the end of
such Purchase Period automatically shall be applied to purchase Shares at the
Purchase Price for such Shares for such Purchase Period. Such Shares shall be
purchased on behalf of the Participant by operation of this Plan in whole and
fractional Shares.
5.2. Except as specifically provided herein, all Participants shall have
the same rights and privileges under the Plan. All rules and determinations of
the Board in the administration of the Plan shall be uniformly and consistently
applied to all persons in similar circumstances.
5.3. The Plan Administrator may use up to ten (10) trading days to make
open market purchases of Shares. The average price paid for all Shares purchased
during such ten (10) day period shall become the price used to allocate Shares
to all Participants. For the purpose of determining holding periods pursuant to
the Plan, all Shares purchased shall be deemed to have been purchased on the
10th trading day following the end of the relevant Purchase Period.
5.4. If the total Shares to be purchased in accordance with Section 6.1
exceeds the number of Shares available under the Plan, (after deducting all of
the Shares previously purchased under Section 6.1), the Plan Administrator shall
make a pro rata allocation of the Shares in a uniform manner.
6. DELIVERY
A book-entry record of the Shares purchased by each Participant shall be
maintained by the Company's transfer agent and no certificates shall be issued
for such Shares except to the extent that a Participant specifically so
requests. Notwithstanding the foregoing, when a refund is made to a Participant
pursuant to Section 5.5, certificates shall be delivered to him or her for all
Shares then held for the Participant under the Plan. A Share certificate
delivered to a Participant shall be registered in his or her name or, if the
Participant so elects and is permissible under applicable law, in the names of
the Participant and one such other person as may be designated by the
Participant, as joint tenants with rights of survivorship. However, (a) no Share
certificate representing a fractional share of Share shall be delivered to a
Participant or to a Participant and any other person, (b) cash which the Plan
Administrator deems representative of the value of a Participant's fractional
share shall be distributed (when a Participant requests a distribution of
certificates for all of the shares of Share held for him or her) in lieu of such
fractional share unless a Participant in light of Rule 16b-3 waives his or her
right to such cash payment and (c) the Plan Administrator shall have the right
to charge a Participant for registering a Share in the name of the Participant
and any other person. No Participant (or any person who makes a claim for, on
behalf of or in place of a participant) shall have any interest in any Share
under this Plan until they have been reflected in the book-entry record
maintained by the transfer agent or the certificate for such Share has been
delivered to such person.
<PAGE> 95
7. DESIGNATION OF BENEFICIARY
A Participant may designate on his or her Election Form a Beneficiary (a)
who shall receive the balance credited to his or her Account if the Participant
dies before the end of a Purchase Period and (b) who shall receive the Share, if
any, purchased for the Participant under this Plan if the Participant dies after
the end of a Purchase Period but before either the certificate representing such
Shares has been delivered to the Participant or before such Shares have been
credited to a brokerage account maintained for the Participant. Such designation
may be revised in writing at any time by the Participant by filing an amended
Election Form, and his or her revised designation shall be effective at such
time as the Plan Administrator receives such amended Election Form. If a
deceased Participant fails to designate a Beneficiary or, if no person so
designated survives a Participant or, if after checking his or her last known
mailing address, the whereabouts of the person so designated survives a
Participant or, if after checking his or her last known mailing address, the
whereabouts of the person so designated are unknown, then the Participant's
estate shall be treated as his or her designated Beneficiary under this Section
8. TRANSFERABILITY AND DISPOSITIONS
8.1. Neither the balance credited to a Participant's Account nor any rights
to receive Shares under this Plan may be assigned, encumbered, alienated,
transferred, pledged or otherwise disposed of in any way by a Participant during
his or her lifetime or by his or her Beneficiary or by any other person during
his or her lifetime, and any attempt to do so shall be without effect.
8.2. Except as provided in Section 7, no sale, transfer or other
disposition may be made of any Shares purchased under the Plan during the first
nine (9) months following the end of a Purchase Period. If a Participant
violates the foregoing restriction, he or she shall remit to the Company an
amount of cash equal to the difference between the Purchase Price for such
Shares and the price paid by the Plan Administrator to acquire the Shares as
provided under Section 6.3. Notwithstanding the foregoing, if a Participant who
owns Shares subject to the foregoing restriction is determined by the Plan
Administrator in its discretion to have a serious financial need for the
proceeds of the sale of such Shares, then upon application made by the
Participant, the Plan Administrator shall consent to a sale of such Shares to
the extent necessary to satisfy the serious financial need, and the Participant
will not be required to make the remittance to the Company described in this
Section 9.2. Alternatively, the Plan Administrator may, at the Participant's
option, sell the Shares and deduct from the proceeds of such sale the remittance
due under this Section 9.2. No participant shall be required to sell Shares upon
termination of employment.
9. SECURITIES REGISTRATION
If the Company shall deem it necessary to register under the Securities Act
of 1933, as amended, or any other applicable statute any Shares purchased under
this Plan or to qualify any such Shares for an exemption from any such statutes,
the Company shall take such action at its own expense. If Shares are listed on
<PAGE> 96
any national securities exchange at the time any Shares are purchased hereunder,
the Company shall make prompt application for the listing on such national
securities exchange of such Shares, at its own expense. Purchases of Shares
hereunder shall be postponed as necessary pending any such action.
10. COMPLIANCE WITH RULE 16B-3
All elections and transactions under this Plan by persons subject to Rule
16b-3 are intended to comply with at least one of the exemptive conditions under
Rule 16b-3. The Plan Administrator shall establish such administrative
guidelines to facilitate compliance with at least one such exemptive condition
under Rule 16b-3 as the Plan Administrator may deem necessary or appropriate. If
any provision of this Plan or such administrative guidelines or any act or
omission with respect to this Plan (including any act or omission by an Eligible
Employee) fails to satisfy such exemptive condition under Rule 16b-3 or
otherwise is inconsistent with such condition, such provision, guidelines or act
or omission shall be deemed null and void.
11. AMENDMENT OR TERMINATION
This Plan may be amended by the Board from time to time to the extent that
the Board deems necessary or appropriate, and any such amendment shall be
subject to the approval of the Company's shareholders to the extent such
approval is required under the laws of the State of Texas, federal tax laws or
to the extent such approval is required to meet the security holder approval
requirements under Rule 16b-3; provided, however, no amendment shall be
retroactive unless the Board in its discretion determines that such amendment is
in the best interest of the Company or such amendment is required by applicable
law to be retroactive. The Board also may terminate this Plan and any Purchase
Period at any time (together with any related contribution election) or may
terminate any Purchase Period (together with any related contribution elections)
at any time; provided, however, no such termination shall be retroactive unless
the Board determines that applicable law requires a retroactive termination.
12. NOTICES
All Election Forms and other communications from a Participant to the Plan
Administrator under, or in connection with, this Plan shall be deemed to have
been filed with the Plan Administrator when actually received in the form
specified by the Plan Administrator at the location, or by the person,
designated by the Plan Administrator for the receipt of any such Election Form
and communications.
13. EMPLOYMENT
The right to elect to participate in this Plan shall not constitute an
offer of employment or membership on the Board, and no election to participate
in this Plan shall constitute an employment agreement for an Eligible Employee.
Any such right or election shall have no bearing whatsoever on the employment
relationship between an Eligible Employee and any other person. Finally, no
Eligible Employee shall be induced to participate in this Plan, or shall
participate in this Plan, with the expectation that such participation will lead
to employment or continued employment.
<PAGE> 97
14. CHANGES IN CAPITAL STRUCTURE
14.1.In the event that the outstanding Shares of the Company are hereafter
increased or decreased or changed into or exchanged for a different number or
kind of Shares or other securities of the Company or of another corporation, by
reason of any reorganization, merger, consolidation, recapitalization,
reclassification, Share split-up, combination of Shares or dividend payable in
Shares, appropriate adjustment shall be made by the Board in the number or kind
of Shares as to which a right granted under this Plan shall be exercisable, to
the end that the right holder's proportionate interest shall be maintained as
before the occurrence of such event. Any such adjustment made by the Board shall
be conclusive.
14.2.If the Company is not the surviving or resulting corporation in any
reorganization, merger, consolidation or recapitalization, this Plan, and the
Company's rights, duties and obligations hereunder, shall be assumed by the
surviving or resulting corporation and the rights of a Participant to purchase
Shares shall continue in full force and effect.
15. HEADINGS, REFERENCES AND CONSTRUCTION
The headings to sections in this Plan have been included for convenience of
reference only. This Plan shall be interpreted and construed in accordance with
the laws of the State of Texas.
16. SHAREHOLDER APPROVAL
This Plan is intended to be a " Qualified Plan" within the meaning of
Section 423 of the Internal Revenue Code of 1986, as amended. Accordingly, the
Company will seek shareholder approval of the Plan at the next annual meeting of
the Company's shareholders. If shareholder approval is not obtained, the Board
of Trust Managers may terminate the Plan or cause the Plan to continue as a
"Non-Qualified Plan" in its sole discretion.
<PAGE> 98
EXHIBIT 10.20
FORM OF
GUARANTY
This Guaranty (this "GUARANTY") is made as of the _____ day of _________ by
each of the entities that is a signatory hereto (individually, a "GUARANTOR";
collectively, the "GUARANTORS"), in favor of Bank One, NA (the "BANK"), a
national banking association having its principal office in Chicago, Illinois.
R E C I T A L S:
A. Camden Property Trust, a Texas real estate investment trust (the
"COMPANY"), has requested that the Bank make a loan ("LOAN") to an employee of
the Company (including such employee's heirs, personal representatives and
assigns, the "BORROWER"), the proceeds of which will be used by the Borrower to
purchase common shares of beneficial interest ("COMMON SHARES") of the Company.
The Borrower has executed a promissory note (as amended, replaced or restated
from time to time, a "NOTE") to evidence the Loan which may from time to time,
in the sole discretion of the Bank, be made to the Borrower. The Borrower and
his/her Note amount are set forth on Exhibit A hereto.
B. Each of the Guarantors is a direct or indirect wholly-owned subsidiary
of the Company. The execution and delivery of this Guaranty is a condition
precedent to any extension of credit to the Borrower pursuant to the Note. Each
term used but not otherwise defined herein shall have the meaning ascribed to
such term by the Note.
C. By virtue of the Borrower's services to the Company and the Guarantors,
the Guarantors have derived and will continue to derive substantial benefits.
Moreover, the ownership of the Common Shares which will be facilitated by the
Loan will provide incentive to the Borrower in performing his/her job so as to
more closely align the interests of the Borrower with those of the Company and
its shareholders, and thus confer significant benefits upon the Guarantors.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration and as an inducement to the Bank to make the Loan to the
Borrower, each Guarantor hereby agrees as follows:
1. Each Guarantor hereby jointly and severally, absolutely, irrevocably
and unconditionally guarantees prompt payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of any
and all existing and future indebtedness, fees (including any Early Payment
Fees) and liabilities of every kind, nature and character, direct or indirect,
absolute or contingent (including all renewals, extensions and modifications
thereof and all reasonable attorneys' fees incurred by the Bank in connection
with the collection or enforcement thereof), of the Borrower to the Bank
howsoever and whensoever created, but only to the extent constituting a Loan or
Overdrafts (as defined in the Note) or arising under and evidenced by the Note
executed by the Borrower and payable to the Bank (the "Guaranteed Debt"). This
is a guaranty of payment, not a guaranty of collection.
2. Each Guarantor waives notice of the acceptance of this Guaranty and of
the extension or continuation of the Guaranteed Debt or any part thereof. Each
Guarantor further waives all setoffs and counterclaims and presentment, protest,
notice, the benefit of any statutes of limitation, demand or action or
<PAGE> 99
delinquency in respect of the Guaranteed Debt or any part thereof, including any
right ...()()()..to require the Bank to sue the Borrower, any other guarantor or
any other person obligated with respect to the Guaranteed Debt or any part
thereof, or otherwise to enforce payment thereof against any collateral securing
the Guaranteed Debt or any part thereof. If at any time any payment of any
portion of the Guaranteed Debt is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, each Guarantor's obligations hereunder with respect to such payment
shall be reinstated at such time as though such payment had not been made and
whether or not the Bank is in possession of this Guaranty.
3. Each Guarantor hereby agrees that, to the fullest extent permitted by
law, its obligations hereunder shall be continuing, absolute and unconditional
under any and all circumstances and not subject to any reduction, limitation,
impairment, termination, defense (other than indefeasible payment in full),
setoff, counterclaim or recoupment whatsoever (all of which are hereby expressly
waived by it to the fullest extent permitted by law), whether by reason of any
character whatsoever, including, without limitation, any claim of waiver,
release, surrender, alteration or compromise. This Guaranty shall continue in
effect until receipt by the Bank of written notice of its termination and,
notwithstanding such receipt, thereafter as to Guaranteed Debt incurred, arising
or committed for prior to receipt by the Bank of such notice of termination,
notwithstanding any extensions, modifications, renewals or indulgences with
respect to, or substitutions for, the Guaranteed Debt or any part thereof.
4. The validity and enforceability of this Guaranty shall not be impaired
or affected by any of the following, whether occurring before or after receipt
by the Bank of notice of termination of this Guaranty: (a) any extension,
modification or renewal of, or indulgence with respect to, or substitutions for,
the Guaranteed Debt or any part thereof or any agreement relating thereto at any
time; (b) any failure or omission to enforce any right, power or remedy with
respect to the Guaranteed Debt or any part thereof or any agreement relating
thereto, or any collateral securing the Guaranteed Debt or any part thereof; (c)
any waiver of any right, power or remedy or of any default with respect to the
Guaranteed Debt or any part thereof or any agreement relating thereto or with
respect to any collateral securing the Guaranteed Debt or any pan thereof; (d)
any release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any collateral securing the
Guaranteed Debt or any part thereof, any other guaranties with respect to the
Guaranteed Debt or any part thereof, or any other obligation of any person or
entity with respect to the Guaranteed Debt or any pad thereof; (e) the
enforceability or validity of the Guaranteed Debt or any part thereof or the
genuineness, enforceability or validity of any agreement relating thereto or
with respect to any collateral securing the Guaranteed Debt or any part thereof;
(f) the application of payments received from any source to the payment of
indebtedness other than the Guaranteed Debt, any part thereof or amounts which
are not covered by this Guaranty even though the Bank might lawfully have
elected to apply such payments to any part or all of the Guaranteed Debt or to
amounts which are not covered by this Guaranty; (g) the insolvency, bankruptcy,
death or any other change in the legal status of the Borrower; (h) the change in
or the imposition of any law, decree, regulation or other governmental act which
does or might impair, delay or in any way affect the validity, enforceability or
the payment when due of the Guaranteed Debt; (i) the failure of the Borrower or
any Guarantor to maintain in full force, validity or effect or to obtain or
renew when required all governmental and other approvals, licenses or consents
required in connection with the Guaranteed Debt or this Guaranty, or to take any
other action required in connection with the performance of all obligations
pursuant to the Guaranteed Debt or this Guaranty; (j) the existence of any
claim, setoff or other rights which any Guarantor may have at any time against
the Borrower in connection herewith or an unrelated transaction; (k) any
disbursement of funds to the Borrower who has not executed and delivered a Note
<PAGE> 100
or any disbursement of funds on the basis of a facsimile (rather than original)
signature for such Note (it being understood that upon the disbursement of funds
by the Bank to the Company with respect to the Borrower in the principal amount
set forth on Exhibit A hereto, such amount shall for all purposes of this
Guaranty be treated as a Loan outstanding to the Borrower in accordance with the
Note and shall be included in the Guaranteed Debt; or (l) any other fact or
circumstances which might otherwise constitute grounds at law or equity for the
discharge or release of any Guarantor from its obligations hereunder, all
whether or not any Guarantor shall have had notice or knowledge of any act or
omission referred to in the foregoing clauses (a) through (l) of this paragraph.
It is agreed that each Guarantor's liability hereunder is several and
independent of any other guaranties or other obligations at any time in effect
with respect to the Guaranteed Debt or any part thereof and that each
Guarantor's liability hereunder may be enforced regardless of the existence,
validity, enforcement or non-enforcement of any such other guaranties or other
obligations or any provision of any applicable law or regulation purporting to
prohibit payment by the Borrower of the Guaranteed Debt in the manner agreed
upon between the Bank and the Borrower. To the extent that, by operation of
Section 16 of the Note or otherwise, the Bank is not entitled to collect any
portion of the Guaranteed Debt in the amount and manner provided for in the Note
(such portion being the "Excess Amount"), the Guarantors shall nevertheless be
obligated to, and shall, pay to the Bank, as additional consideration for
funding the Loan and thereby benefiting the Guarantors, an amount equal to such
Excess Amounts. Such additional consideration shall be paid upon demand made on
or after the date such Excess Amount was otherwise due.
5. Credit may be granted or continued from time to time by the Bank to the
Borrower without notice to or authorization from any Guarantor regardless of the
Borrower's financial or other condition at the time of any such grant or
continuation, provided that in no event shall the principal amount outstanding
under the Borrower's Note exceed the amount set forth for the Borrower on
Exhibit A hereto. The Bank shall have no obligation to disclose or discuss with
any Guarantor its assessment of the financial condition of the Borrower.
6. Until the Guaranteed Debt is irrevocably paid in full, the Guarantors
shall not have or exercise any right of subrogation with respect to payments
made by any Guarantor pursuant to this Guaranty and hereby waive any right to
enforce any remedy which the Bank now has or may hereafter have against the
Borrower.
7. In the event that acceleration of the time for payment of any of the
Guaranteed Debt is stayed, upon the insolvency, bankruptcy or reorganization of
the Borrower, or otherwise, all such amounts shall nonetheless be payable by the
Guarantors forthwith upon demand by the Bank. Each Guarantor further agrees
that, to the extent that the Borrower makes a payment or payments to the Bank on
the Guaranteed Debt, or the Bank receives any proceeds of collateral, if any,
securing the Guaranteed Debt, which payment or receipt of proceeds or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be returned or repaid to the Borrower, its estate,
trustee, receiver, debtor in possession or any other party, including, without
limitation, any Guarantor, under any insolvency or bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment,
return or repayment, the obligation or part thereof which has been paid, reduced
or satisfied by such amount shall be reinstated and continued in full force and
effect as of the date when such initial payment, reduction or satisfaction
occurred.
8. Without limiting the rights of the Bank under applicable law, each
Guarantor authorizes the Bank to apply or offset any sums standing to the credit
of the Guarantors with any office, branch, subsidiary or affiliate of the Bank
to the payment when due of any amount owing by the Guarantors under this
Guaranty.
<PAGE> 101
9. No provision of this Guaranty may be amended, supplemented or modified,
or any of the terms and provisions hereof waived, except by a written instrument
executed by the Bank and each Guarantor. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law. Any determination by a court of competent jurisdiction
of the amount of any Guaranteed Debt owing by the Borrower to the Bank shall be
conclusive and binding on each Guarantor irrespective of whether such Guarantor
was a party to the suit or action in which such determination was made. All
obligations of the Guarantors hereunder shall be joint and several.
10. Each Guarantor hereby represents and warrants to the Bank that:
(a) such Guarantor is a corporation or limited partnership duly
incorporated or organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or formation,
as applicable, and is duly qualified and in good standing as a
foreign corporation or limited partnership and is duly authorized
to conduct its business in each jurisdiction in which the nature
of its business or the ownership of its properties makes such
qualification necessary, other than in such jurisdictions where
the failure to be so qualified would not have a material adverse
effect on such Guarantor;
(b) such Guarantor has all requisite power and authority (corporate
and otherwise) and legal right to execute and deliver this
Guaranty and to perform its obligations hereunder;
(c) the execution and delivery by such Guarantor of this Guaranty and
the performance of its obligations hereunder have been duly
authorized by proper corporate or partnership proceedings, as
applicable, and this Guaranty constitutes the legal, valid and
binding obligations of such Guarantor, enforceable against such
Guarantor, in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally;
(d) neither the execution and delivery by such Guarantor of this
Guaranty nor compliance with the provisions of this Guaranty will,
or at the relevant time did, (i) violate any law, rule, regulation
(including Regulations T, U or X), order, writ, judgment,
injunction, decree or award binding on such Guarantor or such
Guarantor's charter, articles or certificate of incorporation,
certificate of formation, by-laws or partnership agreement, (ii)
violate the provisions of or require the approval or consent of
any party to any indenture, instrument or agreement to which such
Guarantor is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any lien
in, of or on the property of such Guarantor pursuant to the terms
of any such indenture, instrument or agreement, or (iii) require
any consent of the stockholders of any person or of any
governmental authority; and
(e) no obligations of the Borrower to such Guarantor in respect of the
Loan or this Guaranty are directly or "indirectly secured" by any
"margin stock" (as such terms are defined in Regulation U of the
Board of Governors of the Federal Reserve System).
Each Guarantor agrees that (i) the foregoing representations and warranties
shall be deemed to have been made by such Guarantor on the date of this Guaranty
and (ii) it will not take any action or accept any collateral which would result
in Section 10(e) of this Guaranty being untrue at any time. At the request of
the Bank, each Guarantor agrees to promptly deliver, or caused to be delivered,
<PAGE> 102
to the Bank the information required to be delivered under Section 7.1 of the
Existing Credit Agreement evidencing compliance with the covenants and other
terms contained therein and such other information regarding the financial
position or business of the Guarantors as the Bank may reasonably request from
time to time.
11. The undersigned shall pay all costs, fees and expenses (including
reasonable attorneys' fees) incurred by the Bank in collecting or enforcing the
Guarantors' obligations under this Guaranty.
12. Wherever possible, each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Guaranty. The provisions of this Guaranty are
severable, and in any action or proceeding involving any state corporate law, or
any state or federal bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally, if the obligations of any Guarantor
hereunder would otherwise be held or determined to be avoidable, invalid or
unenforceable on account of the amount of such Guarantor's liability under this
Guaranty, then, notwithstanding any other provision of this Guaranty to the
contrary, the amount of such liability shall, without any further action by the
Guarantors or the Bank be automatically limited and reduced to the highest
amount which is valid and enforceable as determined in such action or
proceeding.
13. This Guaranty shall (i) bind the Guarantors and their successors and
assigns, (ii) inure to the benefit of the Bank, its successors and assigns and
(iii) be governed by the internal laws (and not the law of conflicts) of the
State of Illinois. The undersigned hereby irrevocably submits to the
non-exclusive jurisdiction of any United States federal or Illinois state court
sitting in Chicago in any action or proceeding arising out of or relating to
this Guaranty, and each Guarantor hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in any such
court. THE GUARANTORS AND THE BANK, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE
ANY RIGHT TO A JURY TRIAL IN ANY ACTION ARISING HEREUNDER.
14. Except as otherwise expressly provided herein, any notice required
or desired to be served, given or delivered to any party hereto under this
Guaranty shall be in writing by telex, facsimile, U.S. mail or overnight courier
and addressed or delivered to such party (a) if to the Bank, at 1 Bank One
Plaza, Chicago, Illinois 60670, Attention: Carolyn M. Johnson, facsimile: (312)
732-7099, or (b) if to any Guarantor, at their addresses set forth below, or to
such other address as the Bank or any Guarantor designates to the Agent in
writing. All notices by United States mail shall be sent certified mail, return
receipt requested. All notices hereunder shall be effective upon delivery or
refusal of receipt; provided, however, that any notice transmitted by telex or
facsimile shall be deemed given when transmitted (answerback confirmed in the
case of telexes).
[signature page follows]
<PAGE> 103
IN WITNESS WHEREOF, each Guarantor has executed this Guaranty as of the
date first above written.
CAMDEN USA, INC.
By:_____________________________________
Title:__________________________________
Address: 3 Greenway Plaza
Suite 1300
Houston, Texas 77046
Attention: G. Steven Dawson
Facsimile: (713) 354-2710
CAMDEN OPERATING L.P.
By: CPT-GP, Inc., its general partner
By:_____________________________________
Title:__________________________________
Address: 3 Greenway Plaza
Suite 1300
Houston, Texas 77046
Attention: G. Steven Dawson
Facsimile: (713) 354-2710
<PAGE> 104
<TABLE>
<CAPTION>
EXHIBIT 11.1
CAMDEN PROPERTY TRUST
COMPUTATION OF EARNINGS PER COMMON SHARE
Year Ended December 31,
----------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
BASIC EARNINGS PER SHARE
Weighted average common shares outstanding 41,236 41,174 26,257
========== ========== ==========
Basic earnings per share $ 1.27 $ 1.16 $ 1.46
========== ========== ==========
DILUTED EARNINGS PER SHARE
Weighted average common shares outstanding 41,236 41,174 26,257
Shares issuable from assumed conversion of:
Common share options and awards granted 431 399 330
Minority interest units 2,624 2,610 1,769
---------- ---------- ----------
Weighted average common shares outstanding,
as adjusted 44,291 44,183 28,356
========== ========== ==========
Diluted earnings per share $ 1.23 $ 1.12 $ 1.41
========== ========== ==========
EARNINGS FOR BASIC AND DILUTED COMPUTATION
Net income $ 61,623 $ 57,333 $ 38,438
Less: dividends on preferred shares 9,371 9,371
---------- ---------- ----------
Net income to common shareholders (basic
earnings per share computation) 52,252 47,962 38,438
Dividends on preferred shares
Minority interests 2,014 1,322 1,655
---------- ---------- ----------
Net income to common shareholders, as adjusted
(diluted earnings per share computation) $ 54,266 $ 49,284 $ 40,093
========== ========== ==========
</TABLE>
<PAGE> 105
EXHIBIT 12.1
CAMDEN PROPERTY TRUST
STATEMENT REGARDING COMPUTATION OF RATIOS
FOR THE FIVE YEARS ENDED DECEMBER 31, 1999
(In thousands, except for ratio amounts)
<TABLE>
<CAPTION>
1999 (3) 1998 1997 (1) 1996 (2) 1995
----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
EARNINGS BEFORE FIXED CHARGES:
Net income before minority interests $ 71,915 $ 58,655 $ 40,093 $ 8,713 $ 12,330
Less: equity in income of joint ventures (683) (1,312) (1,141)
----------- ------------ ----------- ----------- -----------
71,232 57,343 38,952 8,713 12,330
Distributed income of joint ventures 2,505 2,350 1,939
Less: interest capitalized (16,396) (9,929) (3,338) (4,129) (5,321)
Less: preferred distribution of subsidiaries (8,278)
----------- ------------ ----------- ----------- -----------
Total earnings before fixed charges 49,063 49,764 37,553 4,584 7,009
----------- ------------ ----------- ----------- -----------
FIXED CHARGES:
Interest expense 57,856 50,467 28,537 17,336 13,843
Interest capitalized 16,396 9,929 3,338 4,129 5,321
Accretion of discount 320 169 142
Loan amortization 1,100 785 864 825 720
Interest portion of rental expense 517 300 235 143 143
Preferred distribution of subsidiaries 8,278
----------- ------------ ----------- ----------- -----------
Total fixed charges 84,467 61,650 33,116 22,433 20,027
----------- ------------ ----------- ----------- -----------
Total earnings and fixed charges $ 133,530 $ 111,414 $ 70,669 $ 27,017 $ 27,036
=========== ============ =========== =========== ===========
RATIO OF EARNINGS TO FIXED CHARGES 1.58x 1.81x 2.13x 1.20x 1.35x
RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED SHARE DIVIDENDS:
Total fixed charges $ 84,467 $ 61,650 $ 33,116 $ 22,433 $ 20,027
Preferred share dividends 9,371 9,371 4 39
----------- ------------ ----------- ----------- -----------
Total combined fixed charges and preferred
share dividends 93,838 71,021 33,116 22,437 20,066
Total earnings and combined fixed charges
and preferred share dividends $ 142,901 $ 120,785 $ 70,669 $ 27,021 $ 27,075
=========== ============ =========== =========== ===========
RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED SHARE DIVIDENDS 1.52 x 1.70x 2.13x 1.20x 1.35x
</TABLE>
(1) Earnings include a $10,170 impact related to gain on sales of properties.
Excluding this impact, such ratios would be 1.83x.
(2) Earnings include a $(5,351) impact from the extinguishment of hedges upon
debt refinancing. Excluding this impact, such ratios would be 1.44x.
(3) Earnings include a $2,979 impact related to gain on sales of properties.
Excluding this impact, such ratios would be 1.55x and 1.49x.
<PAGE> 106
EXHIBIT 13.1
Management's Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion should be read in conjunction with all of the
financial statements and notes appearing elsewhere in this report. Historical
results and trends which might appear should not be taken as indicative of
future operations.
We have made statements in this report that are "forward-looking" in that
they do not discuss historical fact, but instead note future expectations,
projections, intentions or other items relating to the future. You should not
rely on these forward-looking statements because they are subject to known and
unknown risks, uncertainties and other factors that may cause our actual results
or performance to differ materially from those contemplated by the
forward-looking statements. Many of those factors are noted in conjunction with
the forward-looking statements in the text. Other important factors that could
cause actual results to differ include:
the results of our efforts to implement our property
development strategy;
the effect of economic conditions;
our failure to qualify as a real estate investment trust;
our cost of capital;
the actions of our competitors and our ability to respond
to those actions;
changes in government regulations, tax rates and similar
matters;
and environmental uncertainties and natural disasters.
These forward-looking statements represent our estimates and assumptions
only as of the date of this report.
Business
Camden Property Trust is a real estate investment trust and, with our
subsidiaries, reports as a single business segment. Our activities relate to the
ownership, development, construction and management of multifamily apartment
communities in the Southwest, Southeast, Midwest and Western regions of the
United States. As of December 31, 1999, we owned interests in, operated or were
developing 159 multifamily properties containing 55,785 apartment homes located
in nine states. Our properties, excluding properties in lease-up and under
development during 1999, had a weighted average occupancy rate of 93% for the
year ended December 31, 1999. This represents the average occupancy for all our
properties in 1999 weighted by the number of apartment homes in each property.
Six of our multifamily properties containing 2,474 apartment homes were under
development at December 31, 1999. Additionally, we have several sites which we
intend to develop into multifamily apartment communities.
On April 8, 1998, we acquired, through a tax-free merger, Oasis
Residential, Inc., a publicly traded Las Vegas-based multifamily REIT. Through
this acquisition, we acquired 52 completed multifamily properties and 15,514
apartment homes. Each share of Oasis common stock outstanding on April 8, 1998
was exchanged for 0.759 of a Camden common share. Each share of Oasis Series A
cumulative convertible preferred stock outstanding on April 8, 1998 was
exchanged for one Camden Series A cumulative convertible preferred share with
terms and conditions comparable to the Oasis preferred stock. We issued 12.4
million common shares and 4.2 million preferred shares in exchange for the
outstanding Oasis common and preferred stock, respectively. We assumed
approximately $484 million of Oasis debt, at fair value in the merger. The
accompanying consolidated financial statements include the operations of Oasis
since April 1, 1998, the effective date of the Oasis merger for accounting
purposes.
<PAGE> 107
In connection with the merger with Oasis, on June 30, 1998, we completed a
transaction in which Camden USA, Inc., one of our wholly owned subsidiaries, and
TMT-Nevada, L.L.C., a Delaware limited liability company, formed Sierra-Nevada
Multifamily Investments, LLC. We entered into this transaction to reduce our
market risk in the Las Vegas area. TMT-Nevada holds an 80% interest in
Sierra-Nevada and Camden USA holds the remaining 20% interest.
In the above transaction, we transferred to Sierra-Nevada 19 apartment
communities containing 5,119 apartment homes for an aggregate of $248 million.
Prior to the merger, Oasis owned 100% of each of these communities. In the
merger, Camden USA acquired these communities. As a result, after the merger and
prior to the Sierra-Nevada transaction, Camden USA owned 100% of each of these
19 properties which are located in Las Vegas, Nevada. This transaction was
funded with capital invested by the members of Sierra-Nevada, the assumption of
$9.9 million of existing nonrecourse indebtedness, the issuance of 17
nonrecourse cross collateralized and cross defaulted loans totaling $180 million
and the issuance of two nonrecourse second lien mortgages totaling $7 million.
On April 15, 1997, we acquired, through a tax-free merger, Paragon Group,
Inc., a Dallas-based multifamily REIT. Through this acquisition, we acquired 50
multifamily properties and 15,975 apartment homes. Each share of Paragon common
stock outstanding on April 15, 1997 was exchanged for 0.64 of our common shares.
We issued 9.5 million common shares in exchange for all of the outstanding
shares of Paragon common stock, issued 2.4 million limited partnership units in
Camden Operating, L.P. and assumed approximately $296 million of Paragon debt,
at fair value, in the Paragon acquisition. The accompanying consolidated
financial statements include the operations of Paragon since April 1, 1997, the
effective date of the Paragon acquisition for accounting purposes.
Our multifamily property portfolio, excluding land we hold for future
development and joint venture properties we do not manage, at December 31, 1999,
1998 and 1997 is summarized as follows:
<PAGE> 108
<TABLE>
<CAPTION>
1999 1998 (a) 1997
-------------------------------------------------------------------------------------------
Apartment Apartment Apartment
Homes Properties % (b) Homes Properties % (b) Homes Properties % (b)
---------- ---------- ------- ----------- ---------- ------- ----------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Properties
Texas
Houston 8,258 19 16% 6,345 15 13% 6,345 16 18%
Dallas (d) 9,381 26 18 9,381 26 17 9,381 26 24
Austin 1,745 6 4 1,745 6 4 1,745 6 5
Other 1,641 5 3 1,641 5 3 1,585 5 4
---------- ---------- ------- ----------- ---------- ------- ----------- ---------- -------
Total Texas Operating 21,025 56 41 19,112 52 37 19,056 53 51
Properties
Arizona 2,326 7 5 2,326 7 5 1,894 5 5
California 1,272 3 3 1,272 3 3
Colorado (c) 2,312 7 4 1,972 6 3
Florida 7,335 17 15 7,261 17 14 6,355 17 18
Kentucky 1,016 4 2 1,142 5 2 1,142 5 3
Missouri 3,327 8 7 3,327 8 7 3,487 10 10
Nevada (c) 11,963 41 14 12,163 41 14
North Carolina (d) 2,735 10 4 2,735 10 4 2,735 10 6
---------- ---------- ------- ----------- ---------- ------- ----------- ---------- -------
Total Operating Properties 53,311 153 95 51,310 149 89 34,669 100 93
---------- ---------- ------- ----------- ---------- ------- ----------- ---------- -------
Properties Under Development
Texas
Houston (e) 2,213 5 4 1,365 3 4
Dallas 620 1 1 600 1 1
---------- ---------- ------- ----------- ---------- ------- ----------- ---------- -------
Total Texas 620 1 1 2,813 6 5 1,365 3 4
Development Properties
Arizona 332 1 1 325 1 1 240 1 1
California 380 1 1 380 1 1
Colorado 218 1 558 2 1
Florida (e) 492 1 1 1,150 3 2 306 1 1
Kentucky 432 1 1 432 1 1 432 1 1
---------- ---------- ------- ----------- ---------- ------- ----------- ---------- -------
Total Properties Under Development 2,474 6 5 5,658 14 11 2,343 6 7
---------- ---------- ------- ----------- ---------- ------- ----------- ---------- -------
Total Properties 55,785 159 100% 56,968 163 100% 37,012 106 100%
========== ======= ========== ======= ========== =======
Less: Joint Venture
Apartment Homes (c) (d) 6,504 6,704 1,264
----------- ----------- -----------
Total Apartment Homes
- Owned 100% 49,281 50,264 35,748
=========== =========== ===========
</TABLE>
<PAGE> 109
(a) Includes the combination of operations at December 31, 1998 of two
adjacent properties in Nevada, which were acquired in the Oasis merger,
two adjacent properties in Houston and two adjacent properties in Florida.
(b) Based on number of apartment homes we owned 100%.
(c) The 1999 and 1998 figures include properties held in joint ventures as
follows: one property with 321 apartment homes in Colorado in which we own
a 50% interest, the remaining interest is owned by an unaffiliated private
investor; and 19 properties with 4,919 apartment homes (5,119 apartment
homes at December 31, 1998) in Nevada owned through Sierra-Nevada
Multifamily Investments, LLC in which we own a 20% interest.
(d) The 1999, 1998 and 1997 figures include properties held in a joint venture
as follows: one property with 708 apartment homes in Dallas and two
properties with 556 apartment homes in North Carolina in which we own a
44% interest, the remaining interest is owned by unaffiliated private
investors.
(e) The 1999 figures exclude two properties classified as Properties Under
Development at December 31, 1998 as follows: one property with 300
apartment homes in Houston which is now classified as land held for future
development, and one property with 352 apartment homes in Florida which
was sold during the year.
<PAGE> 110
At December 31, 1999, we had three completed properties under lease-up as
follows:
<TABLE>
<CAPTION>
Product Number of % Leased Estimated
Type Apartment at 3/2/00 Date of Date of
Property and Location Homes Completion Stabilization
- ----------------------------------------- ------------ --------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
The Park at Goose Creek
Baytown, TX Affordable 272 96% 3Q99 1Q00
The Park at Holly Springs
Houston, TX Garden 548 66% 3Q99 4Q00
The Park at Greenway
Houston, TX Urban 756 82% 4Q99 3Q00
</TABLE>
At December 31, 1999, we had six development properties in various stages
of construction as follows:
<TABLE>
<CAPTION>
Product Number of Estimated Estimated Estimated
Type Apartment Cost Date of Date of
Property and Location Homes ($ millions)* Completion Stabilization
- --------------------------------------------- --------------- ----------- ----------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
In Lease-Up
The Park at Caley Garden 218 $ 18.4 1Q00 2Q00
Denver, CO
The Park at Lee Vista Garden 492 33.1 1Q00 1Q01
Orlando, FL
The Park at Oxmoor Garden 432 22.3 1Q00 1Q01
Louisville, KY
---------- ----------
Subtotal 1,142 73.8
---------- ----------
Under Construction
The Park at Arizona Center Urban 332 24.7 1Q00 1Q01
Phoenix, AZ
The Park at Farmers Market, Phase I Urban 620 50.1 4Q00 4Q01
Dallas, TX
The Park at Crown Valley Garden 380 42.9 1Q01 4Q01
Mission Viejo, CA
---------- -----------
Subtotal 1,332 117.7
---------- -----------
Total for 6 development properties 2,474 $ 191.5
========== ===========
</TABLE>
*As of December 31, 1999, we had incurred $143.6 million of the estimated
$191.5 million.
Properties under development in our consolidated financial statements
includes land held for development totaling $94.8 million at December 31, 1999.
Included in this amount is $74.7 million related to the development of three
urban land projects located in Dallas, Houston and Long Beach, California.
At December 31, 1999, we had a $30.4 million investment in 38 acres in
downtown Dallas which are being used for development of The Park at Farmers
Market, Phase I, and the proposed future development of Phase II. We are also in
the planning phase related to the possible development of 55 for-sale townhomes
in this area. The remaining land may be sold to third parties for commercial and
retail development. Additionally, we had $44.3 million in land under development
in two properties located in Houston and Long Beach. These properties are
currently in the planning stage to determine the number of apartment homes that
will be developed based on demand in these areas over the next three to five
years. We also may sell certain parcels of these two properties to third parties
for commercial and retail development.
<PAGE> 111
At year end, we were obligated under an earnest money contract to sell two
parcels of land totaling approximately $15 million. We expect to complete this
transaction late in the first quarter to early in the second quarter of 2000.
Our multifamily property portfolio is diversified throughout markets in the
Southwest, Southeast, Midwest and Western regions of the United States. At
December 31, 1999 and 1998, our investment in various geographic areas,
excluding investment in joint ventures, was as follows:
(Dollars in thousands)
<TABLE>
<CAPTION>
1999 1998
------------------- --------------------
<S> <C> <C> <C>
Texas
Houston $ 402,997 15% $ 347,069 14%
Dallas 393,223 15 370,538 15
Austin 69,162 3 67,832 3
Other 59,200 2 57,705 2
------------- ----- ------------ -------
Total Texas Properties 924,582 35 843,144 34
------------- ----- ------------ -------
Arizona 148,871 6 133,047 5
California 177,394 7 139,602 6
Colorado 184,798 7 158,837 7
Florida 393,569 15 376,235 15
Kentucky 69,322 3 56,954 2
Missouri 172,454 6 169,741 7
Nevada 491,226 18 487,679 20
North Carolina 93,949 3 90,219 4
------------- ----- ------------ -------
Total Properties $ 2,656,165 100% $ 2,455,458 100%
============= ===== ============ =======
</TABLE>
Liquidity and Capital Resources
Financial Structure
We intend to continue maintaining what management believes to be a
conservative capital structure by:
(i) using what management believes is a prudent combination
of debt and common and preferred equity;
(ii) extending and sequencing the maturity dates of our debt
where possible;
(iii) managing interest rate exposure using fixed rate debt
and hedging, where management believes it is appropriate;
(iv) borrowing on an unsecured basis in order to maintain a
substantial number of unencumbered assets; and
(v) maintaining conservative coverage ratios.
The interest expense coverage ratio, net of capitalized interest, was 3.7
times for each of the years ended December 31, 1999 and 1998. At December 31,
1999 and 1998, 76.0% and 73.2%, respectively, of our properties (based on
invested capital) were unencumbered.
<PAGE> 112
Liquidity
We intend to meet our short-term liquidity requirements through cash flows
provided by operations, our unsecured line of credit discussed in the financial
flexibility section and other short-term borrowings. We expect that our ability
to generate cash will be sufficient to meet our short-term liquidity needs,
which include:
(i) normal operating expenses;
(ii) current debt service requirements;
(iii) recurring capital expenditures;
(iv) property development;
(v) common share repurchases; and
(vi) distributions on our common and preferred equity.
We consider our long-term liquidity requirements to be the repayment of
maturing debt and borrowings under our unsecured line of credit and funding of
acquisitions. We intend to meet our long-term liquidity requirements through the
use of common and preferred equity capital, senior unsecured debt and property
dispositions.
In 1998, we began repurchasing our securities under a program approved by
our Board of Trust Managers. The plan allows us to repurchase or redeem up to
$200 million of our securities through open market purchases and private
transactions. Management believes that we can reinvest available cash flow into
our own securities at yields which exceed those currently available on direct
real estate investments. In management's opinion, these repurchases can be made
without incurring additional debt and without reducing our financial
flexibility. At December 31, 1999, we had repurchased approximately 5.7 million
common shares and redeemed approximately 104,000 units at a total cost of $149.7
million. Management expects to complete the remaining repurchases during 2000.
As of December 31, 1999, we had $259 million available under the unsecured
line of credit. In December 1999, we filed a universal shelf registration
statement providing for the issuance of up to $660.2 million in debt securities,
preferred shares, common shares or warrants, all of which was available at year
end. Additionally, at December 31, 1999, we had $75.3 million available under
our $500 million shelf registration filed in April 1997 and $14.5 million
available from our medium-term note program. Subsequent to year end, we filed a
post-effective amendment to combine these three programs into a single $750
million universal shelf registration. We have significant unencumbered real
estate assets which could be sold or used as collateral for financing purposes
should other sources of capital not be available.
We are currently seeking to selectively dispose of up to $150 million of
real estate assets that management believes have a lower projected net operating
income growth rate than the overall portfolio, or no longer conform to our
operating and investment strategies. We currently anticipate using the potential
proceeds from these sales to retire debt and repurchase shares. However, we
cannot assure you that we will complete these sales or that the final outcomes
of these sales, if completed, will be on terms favorable to us.
On January 17, 2000, we paid a distribution of $0.52 per share for the
fourth quarter of 1999 to all holders of record of our common shares as of
December 20, 1999, and paid an equivalent amount per unit to holders of limited
partnership units in Camden Operating, L.P. Total distributions to common
shareholders and holders of operating partnership units for the year ended
December 31, 1999 were $2.08 per share or unit. We determine the amount of cash
available for distribution to unitholders in accordance with the partnership
<PAGE> 113
agreements and have made and intend to continue to make distributions to the
holders of operating partnership units in amounts equivalent to the per share
distributions paid to holders of common shares. We intend to continue to make
shareholder distributions in accordance with REIT qualification requirements
under the federal tax code while maintaining what management believes to be a
conservative payout ratio, and expect to continue reducing the payout ratio. The
dividend payout ratio was 65% and 68.5% for the year ended December 31, 1999 and
1998, respectively.
On February 15, 2000, we paid a quarterly dividend on our preferred shares
of $0.5625 per share to all preferred shareholders of record as of December 20,
1999. Total dividends to holders of preferred shares for the year ended December
31, 1999 were $2.25 per share.
Financial Flexibility
We intend to concentrate our growth efforts toward selective development
and acquisition opportunities in our current markets, and through the
acquisition of existing operating portfolios and development properties in
selected new markets. During the year ended December 31, 1999, we incurred
$188.5 million in development costs and no acquisition costs. We are developing
six additional properties at an aggregate cost of approximately $191.5 million
of which we incurred $81.9 million during 1999. At year end, we were obligated
for approximately $45 million under construction contracts (a substantial amount
of which is to be funded by debt). We fund our developments and acquisitions
through a combination of equity capital, partnership units, medium-term notes,
construction loans, other debt securities and the unsecured line of credit. We
also seek to selectively dispose of assets that management believes have a lower
projected net operating income growth rate than the overall portfolio, or no
longer conform to our operating and investment strategies. Such sales may
generate capital for acquisitions and new developments, debt reduction, and
common share repurchases.
During the third quarter of 1999, we entered into a line of credit with 14
banks for a total commitment of $375 million. This line of credit replaced our
three previous lines of credit which totaled $275 million. The new line of
credit is scheduled to mature in August 2002. The scheduled interest rate is
currently based on a spread over LIBOR or Prime. The scheduled interest rates
are subject to change as our credit ratings change. Advances under the line of
credit may be priced at the scheduled rates, or we may enter into bid rate loans
with participating banks at rates below the scheduled rates. These bid rate
loans have terms of six months or less and may not exceed the lesser of $187.5
million or the remaining amount available under the line of credit. The line of
credit is subject to customary financial covenants and limitations. At year end,
we were in compliance with all covenants and limitations.
As an alternative to our unsecured line of credit, we from time to time
borrow using competitively bid unsecured short-term notes with lenders who may
or may not be a part of the unsecured line of credit bank group. Such borrowings
vary in term and pricing and are typically priced at interest rates below those
available under the unsecured line of credit.
During the first quarter of 1999, our operating partnership issued $100
million of 8.5% Series B Cumulative Redeemable Perpetual Preferred Units.
Distributions on the preferred units are payable quarterly in arrears. The
preferred units are redeemable for cash by the operating partnership on or after
the fifth anniversary of the date of issuance at par plus the amount of any
accumulated and unpaid distributions. The preferred units are convertible after
10 years by the holder into our 8.5% Series B Cumulative Redeemable Perpetual
Preferred Shares. The preferred units are subordinate to present and future
debt. We used the net proceeds to reduce indebtedness outstanding under the
unsecured lines of credit and repurchase common shares.
<PAGE> 114
During the third quarter of 1999, our operating partnership issued $35.5
million of 8.25% Series C Cumulative Redeemable Perpetual Preferred Units.
Distributions on the preferred units are payable quarterly in arrears. The
preferred units are redeemable for cash by the operating partnership on or after
the fifth anniversary of the date of issuance at par plus the amount of any
accumulated and unpaid distributions. The preferred units are convertible after
10 years by the holder into our 8.25% Series C Cumulative Redeemable Perpetual
Preferred Shares. The preferred units are subordinate to present and future
debt. Subsequent to year end, our operating partnership issued an additional
$17.5 million Series C preferred units. We used the net proceeds to reduce
indebtedness outstanding under the unsecured lines of credit and repurchase
common shares.
During the first quarter of 1999, we issued $39.5 million aggregate
principal amount of senior unsecured notes from our $196 million medium-term
note shelf registration. These fixed rate notes, due in January 2002 through
2009, bear interest at a weighted average rate of 7.07%, payable semiannually on
January and July 15. We used the net proceeds to reduce indebtedness outstanding
under the unsecured lines of credit.
During the second quarter of 1999, we issued $15 million principal amount
of senior unsecured notes from our $196 million medium-term note shelf
registration. These fixed rate notes, due in March 2002, bear interest at a rate
of 6.74%, payable semiannually on March and September 15. We used the net
proceeds to reduce indebtedness outstanding under the unsecured lines of credit.
Also during the second quarter of 1999, we issued from our $500 million
shelf registration an aggregate principal amount of $200 million of five-year
senior unsecured notes. Interest on the notes accrues at an annual rate of 7.0%
and is payable semi-annually on April and October 15, commencing on October 15,
1999. The notes are direct, senior unsecured obligations and rank equally with
all other unsecured and unsubordinated indebtedness. We may redeem the notes at
any time subject to a make-whole provision. The proceeds from the sale of the
notes were $197.7 million, net of issuance costs. We used the net proceeds to
reduce indebtedness under the unsecured lines of credit and for general working
capital purposes.
Market Risk
We use fixed and floating rate debt to finance acquisitions, developments
and maturing debt. These transactions expose us to market risk related to
changes in interest rates. Management's policy is to review our borrowings and
attempt to mitigate interest rate exposure through the use of derivative
instruments. Our policy regarding the use of derivative financial instruments in
managing market risk exposures is consistent with the prior year and is not
expected to change in future years. We do not use derivative financial
instruments for trading or speculative purposes.
We currently have a $25 million interest rate swap agreement designated as
a partial hedge of floating rate debt. The swap is scheduled to mature in July
2000, but the issuing bank has an option to extend this agreement to July 2002.
The interest rate is fixed at 6.1%, resulting in an interest rate exposure equal
to the difference between 6.1% and the actual base rate on the related
indebtedness. This swap continues to be used as a hedge to manage the risk of
interest rate fluctuations on the unsecured line of credit and other floating
rate indebtedness.
During September 1999, we executed three interest rate swap agreements
totaling $70 million which are scheduled to mature in October 2000. These swaps
are being used as a hedge of interest rate exposure on our $90 million
medium-term notes issued in October 1998 which mature in October 2000.
Currently, the interest rate on the medium-term notes is fixed at 7.23%. The
interest rates on the swaps are reset monthly based on the one-month LIBOR rate
plus a spread which resulted in an effective interest rate on the swaps of 7.70%
at December 31, 1999.
<PAGE> 115
For fixed rate debt, interest rate changes affect the fair market value but
do not impact net income to common shareholders or cash flows. Conversely, for
floating rate debt, interest rate changes generally do not affect the fair
market value but do impact net income to common shareholders and cash flows,
assuming other factors are held constant.
At December 31, 1999, after adjusting for the effect of the interest rate
swap agreements, we had fixed rate debt of $940.6 million and floating rate debt
of $224.5 million. Holding other variables constant (such as debt levels), a one
percentage point variance in interest rates would change the unrealized fair
market value of the fixed rate debt by approximately $33.8 million. The net
income to common shareholders and cash flows impact on the next year resulting
from a one percentage point variance in interest rates on floating rate debt
would be approximately $2.2 million, holding all other variables constant.
Funds from Operations
Management considers FFO to be an appropriate measure of performance of an
equity REIT. The National Association of Real Estate Investment Trusts currently
defines FFO as net income (computed in accordance with generally accepted
accounting principles), excluding gains (or losses) from debt restructuring and
sales of property, plus real estate depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. Our definition
of diluted FFO also assumes conversion at the beginning of the period of all
convertible securities, including minority interest, which are convertible into
common equity.
We believe that in order to facilitate a clear understanding of our
consolidated historical operating results, FFO should be examined in conjunction
with net income as presented in the consolidated financial statements and data
included elsewhere in this report. FFO is not defined by generally accepted
accounting principles. FFO should not be considered as an alternative to net
income as an indication of our operating performance or to net cash provided by
operating activities as a measure of our liquidity. Further, FFO as disclosed by
other REIT's may not be comparable to our calculation. Our diluted FFO for the
year ended December 31, 1999 increased $14.4 million, or 10.4%, over 1998
primarily due to the Oasis merger, property acquisitions, developments and
improvements in the performance of the stabilized properties in the portfolio.
<PAGE> 116
The calculation of basic and diluted FFO for the years ended December 31,
1999 and 1998 follows:
(In thousands)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Funds from operations
Net income to common shareholders $ 52,252 $ 47,962
Real estate depreciation 87,491 76,740
Real estate depreciation from unconsolidated ventures 3,198 2,253
Loss on sale of property held in unconsolidated ventures 738
Gain on sales of properties and joint venture interests (2,979)
----------- -----------
Funds from operations - basic 140,700 126,955
Preferred share dividends 9,371 9,371
Income allocated to operating partnership units 2,014 1,322
Interest on convertible subordinated debentures 258 317
Amortization of deferred costs on convertible debentures 26 31
----------- -----------
Funds from operations - diluted $ 152,369 $ 137,996
=========== ===========
Weighted average shares - basic 41,236 41,174
Common share options and awards granted 431 399
Preferred shares 3,207 2,416
Minority interest units 2,624 2,610
Convertible subordinated debentures 146 180
----------- -----------
Weighted average shares - diluted 47,644 46,779
=========== ===========
</TABLE>
Results of Operations
Changes in revenues and expenses related to the operating properties from
period to period are primarily due to the Oasis and Paragon mergers, property
acquisitions, developments, dispositions and improvements in the performance of
the stabilized properties in the portfolio. Where appropriate, comparisons are
made on a dollars-per-weighted-average-apartment homes basis in order to adjust
for such changes in the number of apartment homes owned during each period.
Selected weighted average revenues and expenses per operating apartment home for
the three years ended December 31, 1999 are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ----------- ------------
<S> <C> <C> <C>
Rental income per apartment home per month $ 623 $ 591 $ 535
Property operating and maintenance per apartment home per year $ 2,367 $ 2,290 $ 2,414
Real estate taxes per apartment home per year $ 798 $ 742 $ 718
Weighted average number of operating apartment homes 45,606 42,411 29,280
</TABLE>
1999 Compared to 1998
For the year ended December 31, 1999, income before gain on sales of
properties and joint venture interests, losses on early retirement of debt and
minority interests increased $10.3 million, or 17.5%, as compared to the year
ended December 31, 1998. This increase is primarily due to the Oasis merger, the
transfer of 19 properties into the Sierra-Nevada joint venture, the development
of 2,855 apartment homes, the acquisition of 2,226 apartment homes, the
disposition of 1,752 apartment homes and an increase in net operating income
generated by the stabilized portfolio. The weighted average number of apartment
homes increased by 3,195 apartment homes, or 7.5%, from 42,411 to 45,606 for the
years ended December 31, 1998 and 1999, respectively. Total operating properties
were 126 and 130 at December 31, 1998 and 1999, respectively. The weighted
average number of apartment homes and the operating properties exclude the
impact of our ownership interest in operating properties and apartment homes
owned in joint ventures.
<PAGE> 117
Rental income per apartment home per month increased $32, or 5.4%, from
$591 to $623 for the years ended December 31, 1998 and 1999, respectively. The
increase was primarily due to a 3.0% increase in revenues from the stabilized
real estate portfolio, higher average rental rates on properties added to the
portfolio through the Oasis merger, and four of the five acquired properties,
and completion of new development properties. Additionally, seven of the eight
disposed properties had average rental rates significantly lower than the
portfolio average.
Other property income increased $4.1 million from $18.1 million to $22.1
million for the years ended December 31, 1998 and 1999, respectively, which
represents a monthly increase of $4 per apartment home. This increase in other
property income was primarily due to a larger number of apartment homes owned
and in operation and a $2.7 million increase from revenue sources such as
telephone, cable and water.
Fee and asset management income increased $3.8 million from $1.6 million to
$5.4 million for the years ended December 31, 1998 and 1999, respectively. This
increase is primarily due to fees generated from the construction and renovation
of multifamily properties for third parties.
Property operating and maintenance expenses increased $10.8 million, from
$97.1 million to $108.0 million, but decreased as a percent of total property
income from 30.5% to 29.7% for the years ended December 31, 1998 and 1999,
respectively. Our operating expense ratio decreased from the prior year
primarily as a result of our continued focus on creating operating efficiencies
in the stabilized portfolio, and the impact of our April 1, 1998 adoption of a
new accounting policy, whereby expenditures for floor coverings, appliances and
HVAC unit replacements are expensed in the first five years of a property's life
and capitalized thereafter. Prior to the adoption of this policy, we had been
expensing these costs. Had this policy change been adopted as of January 1,
1998, the 1998 operating expense ratio would have been 30.1%.
Real estate taxes increased $4.9 million from $31.5 million to $36.4
million for the years ended December 31, 1998 and 1999, respectively, which
represents an annual increase of $56 per apartment home. Real estate taxes per
apartment home have increased due to increases in the valuations of renovated,
acquired and developed properties and increases in property tax rates. This
increase per apartment home was partially offset by lower property taxes in the
portfolio added through the Oasis merger.
General and administrative expenses increased from $8.0 million in 1998 to
$10.6 million in 1999, and increased as a percent of revenues from 2.5% to 2.9%.
The general and administrative expense ratio increase is primarily attributable
to the impact of our March 20, 1998 adoption of Issue No. 97-11, Accounting for
Internal Costs Relating to Real Estate Property Acquisitions, which required
certain costs that were previously capitalized to be expensed, an increase in
compensation costs and additional expenses associated with training and
information systems functions.
Interest expense increased from $50.5 million in 1998 to $57.9 million in
1999 primarily due to increased indebtedness related to the Oasis merger,
completed developments, renovations and property acquisitions. Additionally, the
average interest rate on our debt increased slightly from 7.1% for 1998 to 7.2%
for the year ended 1999. Interest capitalized was $16.4 million and $9.9 million
for the years ended December 31, 1999 and 1998, respectively.
Depreciation and amortization increased from $78.1 million to $89.5
million. This increase was due primarily to the Oasis merger, developments,
renovations and property acquisitions.
Gains on sales of properties and joint venture interests increased $3.0
million due to gains from the disposition of two multifamily properties
containing 358 units and our joint venture investment in two commercial office
buildings. The gains recorded on these dispositions were partially offset by a
loss on the sale of a retail/commercial center. These gains do not include a
<PAGE> 118
loss on the sale of a 408 unit property held in a joint venture of $738,000
which is included in "Equity in Income of Joint Ventures."
1998 Compared to 1997
The changes in operating results from 1997 to 1998 are primarily due to the
Oasis and Paragon mergers, the development of five properties aggregating 2,074
apartment homes, the acquisition of seven properties containing 3,123 apartment
homes, the disposition of 11 properties containing 2,986 apartment homes and an
increase in net operating income generated by the stabilized portfolio. The
weighted average number of apartment homes increased by 13,131 apartment homes,
or 44.8%, from 29,280 to 42,411 for the years ended December 31, 1997 and 1998,
respectively. Total operating properties were 97 and 126 at December 31, 1997
and 1998, respectively. The weighted average number of apartment homes and the
operating properties exclude the impact of our ownership interest in operating
properties and apartment homes owned in joint ventures.
Rental income per apartment home per month increased $56, or 10.5%, from
$535 to $591 for the years ended December 31, 1997 and 1998, respectively. The
increase was primarily due to increased revenue growth from the stabilized real
estate portfolio, higher average rental rates on properties added to the
portfolio through the Oasis merger, the acquisition of seven properties and the
completion of new development properties.
Other property income increased $8.6 million from $9.4 million to $18.1
million for the years ended December 31, 1997 and 1998, respectively. This
increase in other property income was primarily due to a larger number of
apartment homes owned and in operation and a $2.9 million increase from new
revenue sources such as telephone, cable and water.
Property operating and maintenance expenses increased $26.5 million, from
$70.7 million to $97.1 million, but decreased as a percent of total property
income from 35.8% to 30.5% for the years ended December 31, 1997 and 1998,
respectively. Our operating expense ratios decreased from the prior year
primarily as a result of operating efficiencies resulting from operating a
larger portfolio and the impact of our April 1, 1998 adoption of a new
accounting policy, whereby expenditures for carpet, appliances and HVAC unit
replacements are expensed in the first five years of a property's life and
capitalized thereafter. Prior to the adoption of this policy, we had been
expensing these costs. Had this policy change not been adopted, the 1998
operating expense ratio would have been 32.0%.
Real estate taxes increased $10.4 million from $21.0 million to $31.5
million for the years ended December 31, 1997 and 1998, respectively, which
represents an annual increase of $24 per apartment home. Real estate taxes per
apartment home have increased primarily due to increases in the valuations of
renovated, acquired and developed properties, and increases in property tax
rates. This increase per apartment home was partially offset by lower property
taxes in the portfolio added through the Oasis merger.
General and administrative expenses increased from $4.4 million in 1997 to
$8.0 million in 1998, and increased as a percent of revenues from 2.2% to 2.5%.
The general and administrative expense ratio increase is mainly attributable to
the impact of our March 20, 1998 adoption of Issue No. 97-11, Accounting for
Internal Costs Relating to Real Estate Property Acquisitions, which required
certain costs that were previously capitalized to be expensed, which was
partially offset by efficiencies resulting from operating a larger portfolio.
<PAGE> 119
Interest expense increased from $28.5 million in 1997 to $50.5 million in
1998 due to increased indebtedness related to the Oasis and Paragon mergers,
completed developments, renovations and property acquisitions. This increase was
partially offset by reductions in average interest rates on our debt, the equity
offering that occurred in July 1997 and property dispositions. Interest
capitalized was $9.9 million and $3.3 million for the years ended December 31,
1998 and 1997, respectively.
Depreciation and amortization increased from $44.8 million to $78.1
million. This increase was due primarily to the Oasis and Paragon mergers,
developments, renovations and property acquisitions.
Gain on sales of properties decreased $10.2 million due to the December
1997 disposition of four properties containing 1,400 apartment homes.
Dispositions in 1998 resulted in no book gain or loss.
Inflation
We lease apartments under lease terms generally ranging from six to
thirteen months. Management believes that such short-term lease contracts lessen
the impact of inflation due to the ability to adjust rental rates to market
levels as leases expire.
Year 2000 Conversion
We recognized the need to ensure that our computer equipment and software,
other equipment and operations would not be adversely impacted by the change to
the calendar Year 2000. As such, we took steps to identify and resolve potential
areas of risk by implementing a comprehensive Year 2000 action plan. The plan
was divided into four phases: identification, assessment,
notification/certification, and testing/contingency plan development; and
included three major elements: computer systems, other equipment and third
parties. We have completed all four phases of our Year 2000 action plan.
The Year 2000 issue did not pose significant operating problems for our
computer systems, since the majority of computer equipment and software products
we utilize were already compliant or were converted or modified as part of
system upgrades unrelated to the Year 2000 issue. We have developed a
contingency plan which will permit our primary computer systems operations to
continue if any Year 2000 issues presently unknown to us occur in the future.
We communicated with our key third party service providers and vendors,
including those who had previously sold equipment to us, and obtained
information and compliance certificates, wherever possible, regarding their
state of readiness with respect to the Year 2000 issue. Although all of our key
third party service providers and vendors indicated that they are or were
expected to be ready regarding the Year 2000 issue, and we are not aware of any
material Year 2000 issues regarding these third parties readiness, we cannot be
certain that the representations of these third parties were accurate or their
systems will continue to be Year 2000 compliant.
Impact of New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for
Derivative Instruments and Hedging Activities, which requires recognition of all
derivatives as either assets or liabilities in the financial statements and
measurement of those instruments at fair value. The initial effective date of
SFAS No. 133 was delayed, and is now effective for all periods beginning after
June 15, 2000. Management believes that the adoption of SFAS No. 133 will not
have a material impact on our consolidated financial statements.
<PAGE> 120
INDEPENDENT AUDITORS' REPORT
To the Shareholders of Camden Property Trust
We have audited the accompanying consolidated balance sheets of Camden Property
Trust as of December 31, 1999 and 1998, and the related consolidated statements
of operations, shareholders' equity and cash flows for each of the three years
in the period ended December 31, 1999. These financial statements are the
responsibility of the management of Camden Property Trust. Our responsibility is
to express an opinion on the financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Camden Property Trust at December
31, 1999 and 1998, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1999 in conformity with
generally accepted accounting principles.
Houston, Texas
February 4, 2000
<PAGE> 121
CAMDEN PROPERTY TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
December 31,
------------------------------
1999 1998
-------------- ---------------
<S> <C> <C>
Assets
Real estate assets, at cost
Land $ 354,833 $ 321,752
Buildings and improvements 2,122,793 1,917,026
-------------- ---------------
2,477,626 2,238,778
Less: accumulated depreciation (253,545) (167,560)
-------------- --------------
Net operating real estate assets 2,224,081 2,071,218
Properties under development, including land 178,539 216,680
Investment in joint ventures 21,869 32,484
-------------- --------------
Total real estate assets 2,424,489 2,320,382
Accounts receivable-- affiliates 2,228 831
Notes receivable:
Affiliates 1,800 1,800
Other 34,442
Other assets, net 14,744 15,036
Cash and cash equivalents 5,517 5,647
Restricted cash 4,712 4,286
-------------- --------------
Total assets $ 2,487,932 $ 2,347,982
============== ==============
Liabilities and Shareholders' Equity
Liabilities
Notes payable:
Unsecured $ 820,623 $ 632,923
Secured 344,467 369,645
Accounts payable 20,323 24,180
Accrued real estate taxes 24,485 21,474
Accrued expenses and other liabilities 33,987 28,278
Distributions payable 27,114 25,735
-------------- --------------
Total liabilities 1,270,999 1,102,235
Minority interests:
Preferred units 132,679
Common units 64,173 71,783
-------------- -------------
Total minority interests 196,852 71,783
7.33% Convertible Subordinated Debentures 3,406 3,576
Shareholders' Equity
Preferred shares of beneficial interest; $2.25 Series A Cumulative
Convertible, $0.01 par value per share, liquidation preference
of $25 per share, 10,000 shares authorized, 4,165 issued and
outstanding at December 31, 1999 and 1998 42 42
Common shares of beneficial interest; $0.01 par value per share;
100,000 shares authorized; 45,317 and 45,123 issued at
December 31, 1999 and 1998, respectively 448 447
Additional paid-in capital 1,303,645 1,299,539
Distributions in excess of net income (132,198) (98,897)
Unearned restricted share awards (8,485) (10,039)
Less: treasury shares, at cost (146,777) (20,704)
-------------- --------------
Total shareholders' equity 1,016,675 1,170,388
-------------- --------------
Total liabilities and shareholders' equity $ 2,487,932 $ 2,347,982
============== ==============
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 122
<TABLE>
<CAPTION>
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Year Ended December 31,
-----------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Revenues
Rental income $ 341,168 $ 300,632 $ 187,928
Other property income 22,148 18,093 9,446
----------- ----------- -----------
Total property income 363,316 318,725 197,374
Equity in income of joint ventures 683 1,312 1,141
Fee and asset management 5,373 1,552 743
Other income 1,924 2,250 531
----------- ----------- -----------
Total revenues 371,296 323,839 199,789
----------- ----------- -----------
Expenses
Property operating and maintenance 107,972 97,137 70,679
Real estate taxes 36,410 31,469 21,028
General and administrative 10,606 7,998 4,389
Interest 57,856 50,467 28,537
Depreciation and amortization 89,516 78,113 44,836
----------- ----------- -----------
Total expenses 302,360 265,184 169,469
----------- ----------- -----------
Income before gain on sales of properties and joint venture
interests, losses related to early retirement of debt and
minority interests 68,936 58,655 30,320
Gain on sales of properties and joint venture interests 2,979 10,170
Losses related to early retirement of debt (397)
----------- ----------- -----------
Income before minority interests 71,915 58,655 40,093
Income allocated to minority interests
Preferred unit distributions (8,278)
Operating partnership units (2,014) (1,322) (1,655)
----------- ----------- -----------
Total income allocated to minority interests (10,292) (1,322) (1,655)
----------- ----------- -----------
Net income 61,623 57,333 38,438
Preferred share dividends (9,371) (9,371)
----------- ----------- -----------
Net income to common shareholders $ 52,252 $ 47,962 $ 38,438
=========== =========== ===========
Basic earnings per share $ 1.27 $ 1.16 $ 1.46
Diluted earnings per share $ 1.23 $ 1.12 $ 1.41
Distributions declared per common share $ 2.08 $ 2.02 $ 1.96
Weighted average number of common shares outstanding 41,236 41,174 26,257
Weighted average number of common and common dilutive 44,291 44,183 28,356
equivalent shares outstanding
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 123
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Preferred Common Additional Distributions Unearned Treasury
Shares of Shares of Paid-In in Excess of Restricted Shares
Beneficial Beneficial Capital Net Income Share
Interest Interest Awards
---------- ---------- ------------ -------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shareholders' Equity, January 1, 1997 $ $ 165 $ 348,339 $ (49,515) $ (3,561) $
Net income to common shareholders 38,438
Common shares issued in Paragon Acquisition
(9,466 shares) 95 262,275
Public offering of 4,830 common shares 48 142,579
Common shares issued under dividend reinvestment plan 38
Conversion of debentures 851 shares) 9 21,061
Restricted shares issued under benefit plan
(188 shares) 2 5,519 (3,407)
Restricted shares placed into Rabbi Trust (261 shares) (3) 3
Common share options exercised (33 shares) 1 773
Conversion of Operating Partnership units (5 shares) 154
Cash distributions ($1.96 per share) (52,449)
---------- ---------- ------------ -------------- ----------- ----------
Shareholders' Equity, December 31, 1997 317 780,738 (63,526) (6,965)
---------- ---------- ------------ -------------- ----------- ----------
Net income to common shareholders 47,962
Common shares issued in Oasis Merger (12,393 shares) 124 395,404
Preferred shares issued in Oasis Merger (4,165 shares 42 104,083
Common shares issued under dividend reinvestment plan 35
Conversion of debentures (102 shares) 1 2,408
Restricted shares issued under benefit plan (232 shares) 2 6,675 (3,076)
Employee Stock Purchase Plan (136)
Restricted shares placed into Rabbi Trust (236 shares) (2) 2
Common share options exercised (82 shares) 1 428
Conversion of Operating Partnership units (346 shares) 4 9,904
Repurchase of common shares (801 shares) (20,704)
Cash distributions ($2.02 per share) (83,333)
---------- ---------- ------------ -------------- ----------- ----------
Shareholders' Equity, December 31, 1998 42 447 1,299,539 (98,897) (10,039) (20,704)
---------- ---------- ------------ -------------- ----------- ----------
Net income to common shareholders 52,252
Common shares issued under dividend reinvestment plan 28
Conversion of debentures (7 shares) 169
Restricted shares issued under benefit plan (90 shares) 1 2,041 1,559
Employee Stock Purchase Plan (522)
Restricted shares placed into Rabbi Trust (35 shares) 5 (5)
Common share options exercised (80 shares) 1,806
Conversion of Operating Partnership units (23 shares) 479
Repurchase of minority interest units 100
Repurchase of common shares (4,890 shares) (126,073)
Cash distributions ($2.08 per share) (85,553)
---------- ---------- ------------ -------------- ----------- ----------
Shareholders' Equity, December 31, 1999 $ 42 $ 448 $1,303,645 $ (132,198) $ (8,485) $(146,777)
========== ========== ============ ============== =========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 124
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------
1999 1998 1997
----------- ----------- ------------
<S> <C> <C> <C>
Cash Flow from Operating Activities
Net income $ 61,623 $ 57,333 $ 38,438
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 89,516 78,113 44,836
Equity in income of joint ventures, net of cash received 2,491 1,278 929
Gain on sales of properties and joint venture interests (2,979) (10,170)
Losses related to early retirement of debt 397
Minority interest. 2,014 1,322 1,655
Accretion of discount on unsecured notes payable 320 169 142
Net change in operating accounts 11,036 204 (10,253)
----------- ----------- ------------
Net cash provided by operating activities 164,021 138,419 65,974
Cash Flow from Investing Activities
Cash of Oasis and Paragon at acquisition 7,253 9,847
Net proceeds from Sierra-Nevada transaction 226,128
Increase in real estate assets (213,352) (335,567) (133,206)
Net proceeds from sales of properties 13,226 42,513 37,826
Net proceeds from sale of joint venture interests 5,465 6,841
Increase in investment in joint ventures (2,012) (4,922)
Decrease in investment in joint ventures 1,505 1,478 4,624
Increase in notes receivable (23,530)
Net decrease in affiliate notes receivable 5,389 7,749
Other (1,873) (4,126) (549)
----------- ----------- ------------
Net cash used in investing activities (220,571) (55,013) (73,709)
Cash Flow from Financing Activities
Net increase (decrease) in unsecured lines of credit and short-term (66,000) 146,792 31,000
borrowings
Debt repayments from Sierra-Nevada translation (114,248)
Proceeds from notes payable 253,380 152,600 100,000
Repayment of notes payable (25,178) (160,225) (206,097)
Proceeds from issuance of preferred units, net 132,679
Proceeds from issuance of common shares 142,627
Distributions to shareholders and minority interests (108,253) (89,115) (55,514)
Repurchase of common shares and units (128,929) (20,704)
Losses related to early retirement of debt (397)
Other (1,279) 673 218
----------- ----------- ------------
Net cash provided by (used in) financing activities 56,420 (84,227) 11,837
----------- ----------- ------------
Net (decrease) increase in cash and cash equivalents (130) (821) 4,102
Cash and cash equivalents, beginning of period 5,647 6,468 2,366
----------- ----------- ------------
Cash and cash equivalents, end of period $ 5,517 $ 5,647 $6,468
=========== ============ ===========
Supplemental Information
Cash paid for interest, net of interest capitalized $ 54,226 $ 51,574 $ 27,155
Interest capitalized 16,396 9,929 3,338
Supplemental Schedule of Noncash Investing and Financing Activities
Acquisition of Oasis (including the Sierra-Nevada transaction)
and Paragon, net of cash acquired:
Fair value of assets acquired $ 835 $ 793,513 $ 650,634
Liabilities assumed 835 505,721 332,839
Common shares issued 395,528 262,370
Preferred shares issued 104,125
Fair value of minority interest 21,520 65,272
Notes payable assumed upon purchase of properties 22,424 16,022
Conversion of 7.33% subordinated debentures to common shares, net 169 2,409 21,070
Value of shares issued under benefit plans, net 2,047 6,821 5,372
Conversion of operating partnership units to common shares 479 9,881 153
Notes receivable issued upon sale of real estate assets 10,912
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 125
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS
Camden Property Trust is a self-administered and self-managed real estate
investment trust organized on May 25, 1993. We, with our subsidiaries, report as
a single business segment, with activities related to the ownership,
development, construction and management of multifamily apartment communities in
the Southwest, Southeast, Midwest and Western regions of the United States. As
of December 31, 1999, we owned interests in, operated or were developing 159
multifamily properties containing 55,785 apartment homes located in nine states.
Six of our multifamily properties containing 2,474 apartment homes were under
development at December 31, 1999. Additionally, we have several sites which we
intend to develop into multifamily apartment communities.
Acquisition of Oasis Residential, Inc. On April 8, 1998, we acquired,
through a tax-free merger, Oasis Residential, Inc., a publicly traded Las
Vegas-based multifamily REIT. Through this acquisition, we acquired 52 completed
multifamily properties and 15,514 apartment homes at the date of acquisition.
Each share of Oasis common stock outstanding on April 8, 1998 was exchanged for
0.759 of a Camden common share. Each share of Oasis Series A cumulative
convertible preferred stock outstanding on April 8, 1998 was exchanged for one
Camden Series A cumulative convertible preferred share with terms and conditions
comparable to the Oasis preferred stock. We issued 12.4 million common shares
and 4.2 million preferred shares in exchange for the outstanding Oasis common
and preferred stock, respectively. We assumed approximately $484 million of
Oasis debt, at fair value, in the merger. The accompanying consolidated
financial statements include the operations of Oasis since April 1, 1998, the
effective date of the Oasis merger for accounting purposes.
In connection with the merger with Oasis, on June 30, 1998, we completed a
transaction in which Camden USA, Inc., one of our wholly owned subsidiaries, and
TMT-Nevada, L.L.C., a Delaware limited liability company, formed Sierra-Nevada
Multifamily Investments, LLC. We entered into this transaction to reduce our
market risk in the Las Vegas area. TMT-Nevada holds an 80% interest in
Sierra-Nevada and Camden USA holds the remaining 20% interest.
In the above transaction, we transferred to Sierra-Nevada 19 apartment
communities containing 5,119 apartment homes for an aggregate of $248 million.
Prior to the merger, Oasis owned 100% of each of these communities. In the
merger, Camden USA acquired these communities. As a result, after the merger and
prior to the Sierra-Nevada transaction, Camden USA owned 100% of each of these
19 properties which are located in Las Vegas, Nevada. This transaction was
funded with capital invested by the members of Sierra-Nevada, the assumption of
$9.9 million of existing nonrecourse indebtedness, the issuance of 17
nonrecourse cross collateralized and cross defaulted loans totaling $180 million
and the issuance of two nonrecourse second lien mortgages totaling $7 million.
Acquisition of Paragon Group, Inc. On April 15, 1997, we acquired, through
a tax-free merger, Paragon Group, Inc., a Dallas-based multifamily REIT. Through
this acquisition, we acquired 50 multifamily properties and 15,975 apartment
homes. Each share of Paragon common stock outstanding on April 15, 1997 was
exchanged for 0.64 of our common shares. We issued 9.5 million common shares in
exchange for all of the outstanding shares of Paragon common stock, issued 2.4
million limited partnership units in Camden Operating, L.P. and assumed
approximately $296 million of Paragon debt, at fair value, in the Paragon
acquisition. The accompanying consolidated financial statements include the
operations of Paragon since April 1, 1997, the effective date of the Paragon
acquisition for accounting purposes.
<PAGE> 126
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation. The consolidated financial statements include
our assets, liabilities, and operations and those of our wholly-owned
subsidiaries and partnerships in which our aggregate ownership is greater than
50%. Those entities owned less than 50% are accounted for using the equity
method. All significant intercompany accounts and transactions have been
eliminated in consolidation. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, results of operations
during the reporting periods and related disclosures. Actual results could
differ from those estimates.
Operating Partnership and Minority Interests. Approximately 29% of our
multifamily apartment units at December 31, 1999 are held in our operating
partnership. This operating partnership has issued both common and preferred
limited partnership units. As of December 31, 1999 we held 82.3% of the common
limited partnership units and the sole 1% general partnership interest. The
remaining 16.7% of the common limited partnership units are primarily held by
former officers, directors and investors of Paragon, who collectively owned
1,977,270 common limited partnership units at December 31, 1999. Each common
limited partnership unit is redeemable for one common share of Camden or cash at
our election. Holders of common limited partnership units are not entitled to
rights as shareholders prior to redemption of their common limited partnership
units. No member of our management owns common limited partnership units and
only two of our eight Trust Managers own common limited partnership units.
Additionally, in conjunction with the Oasis merger, we acquired the
controlling managing member interest in Oasis Martinique, LLC which owns one
property in Orange County, California and is included in our consolidated
financial statements. The remaining interests comprising 754,270 units are
exchangeable into 572,490 of our common shares.
Minority interests in the accompanying consolidated financial statements
relate to holders of common limited partnership units and Martinique units, as
well as holders of preferred limited partnership units, which are discussed in
Note 8.
Cash and Cash Equivalents. All cash and investments in money market
accounts and other securities with a maturity of three months or less at the
date of purchase, are considered to be cash and cash equivalents.
Restricted Cash. Restricted cash mainly consists of escrow deposits held by
lenders for property taxes, insurance and replacement reserves. Substantially
all restricted cash is invested in short-term securities.
Real Estate Assets, at Cost. Real estate assets are carried at cost plus
capitalized carrying charges. Expenditures directly related to the development,
acquisition, and improvement of real estate assets, excluding those costs
prohibited by EITF 97-11 described in the New Accounting Pronouncements section,
are capitalized at cost as land, buildings and improvements. All construction
and carrying costs are capitalized and reported on the balance sheet in
"Properties under development, including land" until individual buildings are
completed. Upon completion of each building, the total cost of that building and
the associated land is transferred to "Land" and "Buildings and improvements"
and the assets are depreciated over their estimated useful lives using the
straight line method of depreciation. All operating expenses, excluding
depreciation, associated with occupied apartment homes for properties in the
development and leasing phase are expensed against revenues generated by those
apartment homes as they become occupied. Upon achieving 90% occupancy, or
<PAGE> 127
generally one year from opening the leasing office (with some allowances for
larger than average properties), whichever comes first, all apartment homes are
considered operating and we begin expensing all items that were previously
considered as carrying costs.
If there is an event or change in circumstance that indicates a potential
impairment in the value of a property has occurred, our policy is to assess any
potential impairment by making a comparison of the current and projected
operating cash flows for such property over its remaining useful life, on an
undiscounted basis, to the carrying amount of the property. If such carrying
amounts are in excess of the estimated projected operating cash flows of the
property, we would recognize an impairment loss equivalent to an amount required
to adjust the carrying amount to its estimated fair market value.
Real estate to be disposed of is reported at the lower of its carrying
amount or its estimated fair value, less its cost to sell. Depreciation expense
is not recorded during the period in which such assets are held for sale.
We capitalized $33.4 million and $26.1 million in 1999 and 1998,
respectively, of renovation and improvement costs which extended the economic
lives and enhanced the earnings of our multifamily properties. If the accounting
policy described below had been adopted as of January 1, 1998, the amounts
capitalized for 1998 would have been $27.2 million.
Effective April 1, 1998, we implemented prospectively a new accounting
policy whereby expenditures for carpet, appliances and HVAC unit replacements
are capitalized and depreciated over their estimated useful lives. Previously,
all such replacements had been expensed. We believe that the newly adopted
accounting policy is preferable as it is consistent with standards and practices
utilized by the majority of our peers and provides a better matching of expenses
with the related benefit of the expenditure. The change in accounting principle
is inseparable from the effect of the change in accounting estimate and is
therefore treated as a change in accounting estimate. See the New Accounting
Pronouncements section for the effect of this change and our adoption of a new
accounting pronouncement for the year ended December 31, 1998.
Carrying charges, principally interest and real estate taxes, of land under
development and buildings under construction are capitalized as part of
properties under development and buildings and improvements to the extent that
such charges do not cause the carrying value of the asset to exceed its net
realizable value. Capitalized interest was $16.4 million in 1999, $9.9 million
in 1998 and $3.3 million in 1997. Capitalized real estate taxes were $3.2
million in 1999, $1.4 million in 1998 and $557,000 in 1997.
All initial buildings and improvements costs are depreciated over their
remaining estimated useful lives of 5 to 35 years using the straight line
method. Capital improvements subsequent to the initial renovation period are
depreciated over their expected useful lives of 3 to 15 years using the straight
line method.
Other Assets, Net. Deferred financing costs are amortized over the lives of
the asset or the terms of the related debt on the straight line method.
Leasehold improvements and equipment are depreciated on the straight line method
over the shorter of the expected useful lives or the lease terms which range
from 3 to 10 years. Accumulated depreciation and amortization for such assets
was $5.6 million in 1999 and $4.1 million in 1998.
Interest Rate Swap Agreements. The differential to be paid or received on
interest rate swap agreements is accrued as interest rates change and is
recognized over the life of the agreements as an increase or decrease in
interest expense. We do not use these instruments for trading or speculative
purposes.
Income Recognition. Rental and other property income is recorded when due
from residents and is recognized monthly as it is earned. Interest and all other
sources of income are recognized as earned.
<PAGE> 128
Rental Operations. We own and operate multifamily apartment homes that are
rented to residents on lease terms ranging from six to thirteen months, with
monthly payments due in advance. None of the properties are subject to rent
control or rent stabilization. Operations of apartment properties acquired are
recorded from the date of acquisition in accordance with the purchase method of
accounting. In management's opinion, due to the number of residents, the type
and diversity of submarkets in which the properties operate, and the collection
terms, there is no concentration of credit risk.
Income Taxes and Distributions. We have maintained and intend to maintain
our election as a REIT under the Internal Revenue Code of 1986, as amended. As a
result, we generally will not be subject to federal taxation to the extent we
distribute 95% of our REIT taxable income to our shareholders and satisfy
certain other requirements. Accordingly, no provision for federal income taxes
has been included in the accompanying consolidated financial statements.
Taxable income differs from net income for financial reporting purposes due
principally to the timing of the recognition of depreciation expense. This
difference is primarily due to the difference in the book/tax basis of the real
estate assets and the differing methods of depreciation and useful lives of the
assets. During 1999, book depreciation expense exceeded the amount reported for
tax purposes by $21.1 million. The net book basis of our real estate assets
exceeds our net tax basis by $198.5 million at December 31, 1999.
A schedule of per share distributions we paid and reported to our
shareholders is set forth in the following tables:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
Common Share Distributions 1999 1998 1997
--------- ---------- ----------
<S> <C> <C> <C>
Ordinary income $ 2.08 $ 1.68 $ 1.30
20% Long-term capital gain 0.10 0.12
25% Sec. 1250 capital gain 0.24 0.08
Return of capital 0.46
--------- ---------- ----------
Total $ 2.08 $ 2.02 $ 1.96
========= ========== ==========
Percentage of distributions representing tax preference items. 12.187% 9.052% 17.013%
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------
Preferred Share Dividends 1999 1998*
---------- --------
<S> <C> <C>
Ordinary income $ 2.25 $ 1.40
20% Long-term capital gain 0.09
25% Sec. 1250 capital gain 0.20
---------- --------
Total $ 2.25 $ 1.69
========== ========
</TABLE>
* Preferred share dividends for 1998 only include dividends paid from the date
of the Oasis merger through December 31,1998.
Property Operating and Maintenance Expenses. Property operating and
maintenance expenses included normal repairs and maintenance totaling $24.5
million in 1999, $21.5 million in 1998 and $14.6 million in 1997.
Earnings Per Share. Basic earnings per share has been computed by dividing
net income to common shareholders by the weighted average number of common
shares outstanding. Diluted earnings per share has been computed by dividing net
income to common shareholders (as adjusted) by the weighted average number of
common and common dilutive equivalent shares outstanding.
<PAGE> 129
The following table presents basic and diluted earnings per share for the
periods indicated (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
BASIC EARNINGS PER SHARE
Weighted average common shares outstanding 41,236 41,174 26,257
========== ========== ==========
Basic earnings per share $ 1.27 $ 1.16 $ 1.46
========== ========== ==========
DILUTED EARNINGS PER SHARE
Weighted average common shares outstanding 41,236 41,174 26,257
Shares issuable from assumed conversion of:
Common share options and awards granted 431 399 330
Minority interest units 2,624 2,610 1,769
---------- ---------- ----------
Weighted average common shares outstanding, as adjusted 44,291 44,183 28,356
========== ========== ==========
Diluted earnings per share $ 1.23 $ 1.12 $ 1.41
========== ========== ==========
EARNINGS FOR BASIC AND DILUTED COMPUTATION
Net income $ 61,623 $ 57,333 $ 38,438
Less: preferred share dividends 9,371 9,371
---------- ---------- ----------
Net income to common shareholders (basic earnings per share 52,252 47,962 38,438
computation)
Minority interests 2,014 1,322 1,655
---------- ---------- ----------
Net income to common shareholders, as adjusted (diluted
earnings per share computation) $ 54,266 $ 49,284 $ 40,093
========== ========== ==========
</TABLE>
Reclassifications. Certain reclassifications have been made to amounts in
prior year financial statements to conform with current year presentations.
New Accounting Pronouncements. In March 1998, the Emerging Issues Task
Force ("EITF") of the Financial Accounting Standards Board ("FASB") reached a
consensus decision on Issue No. 97-11, Accounting for Internal Costs Relating to
Real Estate Property Acquisitions, which requires that internal costs of
identifying and acquiring operating properties be expensed as incurred for
transactions entered into on or after March 20, 1998. Prior to our adoption of
this policy, we had been capitalizing such costs. Had we adopted Issue No. 97-11
and the new accounting policy for floor coverings, appliances and HVAC unit
replacements as of January 1, 1998, net income to common shareholders would have
increased $650,000 or $0.02 per basic and diluted earnings per share for the
year ended December 31, 1998.
In June 1998, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities,
which requires recognition of all derivatives as either assets or liabilities in
the financial statements and measurement of those instruments at fair value. The
initial effective date of SFAS No. 133 was delayed, and is now effective for all
periods beginning after June 15, 2000. Management believes that the adoption of
SFAS No. 133 will not have a material impact on our consolidated financial
statements.
<PAGE> 130
3. NOTES RECEIVABLE
We have entered into agreements with unaffiliated third parties to develop,
construct, and manage four multifamily projects containing 1,357 apartment
homes. We are providing financing for a portion of each project in the form of
notes receivable which mature in 2004. These notes earn interest at 10% annually
and are secured by second liens on the assets and partial guarantees by the
third party owners. Payments on the notes are to be from operating cash flow of
the individual properties. At December 31, 1999, these notes had principal
balances totaling $28.1 million. We anticipate funding up to an aggregate of $41
million in connection with these projects. We earn fees for managing the
development, construction and eventual operations of these properties. We have
the option to purchase these properties in the future at a price to be
determined based upon the property's performance and an agreed valuation model.
Additionally, we have a $6.3 million note receivable which bears interest
at 12% and matures in June 2000.
4. NOTES PAYABLE
The following is a summary of our indebtedness:
(In millions)
<TABLE>
<CAPTION>
December 31,
-------------------------
1999 1998
------------ ------------
<S> <C> <C>
Senior Unsecured Notes:
6.73% - 7.28% Notes, due 2001 - 2006 $ 523.1 $ 323.9
6.68% - 7.70% Medium-Term Notes, due 2000 - 2009 181.5 127.0
Unsecured Lines of Credit and Short-Term Borrowings 116.0 182.0
---------- ----------
820.6 632.9
Secured Notes - Mortgage Loans (5.75% - 8.63%), due 2001-2028 344.5 369.7
---------- ----------
Total notes payable $1,165.1 $ 1,002.6
========== ==========
Floating rate debt included in unsecured notes payable, net
of interest rate swap agreements (5.75% - 8.50%) $ 161.0 $ 157.0
Floating rate tax-exempt debt included in mortgage loans (6.95% - 7.15%) $ 63.5 $ 64.3
Net book value of real estate assets subject to mortgage notes $ 605.5 $ 646.6
</TABLE>
In August 1999, we entered into a line of credit with 14 banks for a total
commitment of $375 million. This line of credit replaces our three previous
lines of credit which totaled $275 million. The new line of credit is scheduled
to mature in August 2002. The scheduled interest rate is currently based on a
spread over LIBOR or Prime. The scheduled interest rates are subject to change
as our credit ratings change. Advances under the line of credit may be priced at
the scheduled rates, or we may enter into bid rate loans with participating
banks at rates below the scheduled rates. These bid rate loans have terms of six
months or less and may not exceed the lesser of $187.5 million or the remaining
amount available under the line of credit. The line of credit is subject to
customary financial covenants and limitations. At year end, we were in
compliance with all covenants and limitations.
As of December 31, 1999, we had $259 million available under our unsecured
line of credit. The weighted average balance outstanding on the unsecured lines
of credit during the year ended December 31, 1999 was $74.3 million, with a
maximum outstanding balance of $220 million.
<PAGE> 131
During September 1999, we executed three interest rate swap agreements
totaling $70 million which are scheduled to mature in October 2000. These swaps
are being used as a hedge of interest rate exposure on our $90 million
medium-term notes issued in October 1998 which mature in October 2000.
Currently, the interest rate on the medium-term notes is fixed at 7.23%. The
interest rates on the swaps are reset monthly based on the one-month LIBOR rate
plus a spread which resulted in an effective interest rate on the swaps of 7.70%
at December 31, 1999.
During the first quarter of 1999, we issued $39.5 million aggregate
principal amounts of senior unsecured notes from our $196 million medium-term
note shelf registration. These fixed rate notes, due in January 2002 through
2009, bear interest at a weighted average rate of 7.07%, payable semiannually on
January and July 15. We used the net proceeds to reduce indebtedness outstanding
under the unsecured lines of credit.
During the second quarter of 1999, we issued $15 million aggregate
principal amounts of senior unsecured notes from our $196 million medium-term
note shelf registration. These fixed rate notes, due in March 2002, bear
interest at a rate of 6.74%, payable semiannually on March and September 15. We
used the net proceeds to reduce indebtedness outstanding under the unsecured
lines of credit.
Also during the second quarter, we issued from our $500 million shelf
registration an aggregate principal amount of $200 million of five-year senior
unsecured notes. Interest on the notes accrues at an annual rate of 7.0% and is
payable semi-annually on April and October 15, commencing on October 15, 1999.
The notes are direct, senior unsecured obligations and rank equally with all
other unsecured and unsubordinated indebtedness. We may redeem the notes at any
time subject to a make-whole provision. We used the net proceeds of $197.7
million to reduce indebtedness under the unsecured lines of credit and for
general working capital purposes.
At December 31, 1999, we maintained a $25 million interest rate hedging
agreement which is scheduled to mature in July 2000. The issuing bank has an
option to extend this agreement to July 2002. The LIBOR rate is fixed at 6.1%,
resulting in the fixed rate equal to 6.1% plus the actual LIBOR spread on the
related indebtedness. This swap continues to be used as a hedge to manage the
risk of interest rate fluctuations on the unsecured lines of credit and other
floating rate indebtedness.
At December 31, 1999, the weighted average interest rate on floating rate
debt was 7.45%.
Scheduled principal repayments on all notes payable outstanding at December
31, 1999 over the next five years are $107.0 million in 2000, $167.5 million in
2001, $156.4 million in 2002, $125.5 million in 2003, $235.3 million in 2004 and
$373.4 million thereafter.
5. CONVERTIBLE SUBORDINATED DEDENTURES
In April 1994, we issued $86.3 million aggregate principal amount of 7.33%
Convertible Subordinated Debentures due 2001. The debentures are convertible at
any time prior to maturity into our common shares of beneficial interest at a
conversion price of $24 per share, subject to adjustment under certain
circumstances. The debentures will not be redeemable prior to maturity, except
in certain circumstances intended to maintain our status as a REIT. Interest on
the debentures is payable on April and October 1 of each year. The debentures
are unsecured and subordinated to present and future senior debt and will be
effectively subordinated to all debt and other liabilities.
<PAGE> 132
6. INCENTIVE AND BENEFIT PLANS
We have elected to follow Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees ("APB No. 25") and related
interpretations in accounting for our share-based compensation. Under APB No.
25, since the exercise price of share options equals the market price of our
shares at the date of grant, no compensation expense is recorded. Restricted
shares are recorded to compensation expense over the vesting periods based on
the market value on the date of grant, and no compensation expense is recorded
for our Employee Stock Purchase Plan ("ESPP"), since the ESPP is considered
non-compensatory. We have adopted the disclosure-only provisions of SFAS No.
123, Accounting for Stock-Based Compensation.
Incentive Plan. We have a non-compensatory option plan which was amended in
the second quarter of 1997 by our shareholders and trust managers. This
amendment resulted in an increase in the maximum number of common shares
available for issuance under the plan to 10% of the common shares outstanding at
any time. Compensation awards that can be granted under the plan include various
forms of incentive awards including incentive share options, non-qualified share
options and restricted share awards. The class of eligible persons that can
receive grants of incentive awards under the plan consists of non-employee trust
managers, key employees, consultants, and directors of subsidiaries as
determined by a committee of our Board of Trust Managers. No incentive awards
may be granted after May 27, 2003.
Following is a summary of the activity of the plan for the three years
ended December 31, 1999:
<TABLE>
<CAPTION>
Shares Options and Restricted Shares
Available
for
Issuance
------------- ----------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
1999 1999 1999 Price 1998 1998 Price 1997 1997 Price
------------- --------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1 1,280,362 2,838,499 $ 28.03 1,303,849 $ 24.94 843,360 $ 23.34
Current Year Share Adjustment (a) (477,959)
Options
Granted (603,072) 603,072 24.88 1,657,008 29.32 310,050 26.99
Exercised (79,650) 22.67 (82,327) 22.96 (33,042) 23.39
Forfeited 139,768 (139,768) 27.38 (271,538) 23.57 (4,333) 24.00
------------- --------- ------------ ---------- ------------ ---------- ------------
Net Options (463,304) 383,654 27.71 1,303,143 30.92 272,675 27.47
------------- --------- ------------ ---------- ------------ ---------- ------------
Restricted Shares
Granted (142,826) 142,826 25.31 248,769 29.06 193,724 28.42
Forfeited (53,274) 27.01 (17,262) 27.67 (5,910) 26.39
------------- --------- ------------ ---------- ------------ ---------- ------------
Net Restricted Shares (142,826) 89,552 26.79 231,507 29.16 187,814 28.48
------------- --------- ------------ ---------- ------------ ---------- ------------
Balance at December 31 196,273 3,311,705 $ 27.50 2,838,499 $ 28.03 1,303,849 $ 24.94
============= ========= ============ ========== ============ ========== ============
Exercisable options at December 31 1,056,076 $ 27.86 586,607 $ 26.15 565,600 $ 22.95
Vested restricted shares at December 31 343,702 $ 25.93 213,782 $ 25.20 123,341 $ 24.46
</TABLE>
(a) Current year share adjustment is the net affect from the repurchase of our
common shares and the increase in shares available due to the increase in
shares outstanding.
Options are exercisable, subject to the terms and conditions of the plan,
in increments of 33.33% per year on each of the first three anniversaries of the
date of grant. The plan provides that the exercise price of an option will be
determined by the committee on the day of grant and to date all options have
been granted at an exercise price which equals the fair market value on the date
of grant. Options exercised during 1999 were exercised at prices ranging from
$22 to $24.25 per share. At December 31,1999, options outstanding were at prices
<PAGE> 133
ranging from $22 to $29.44 per share. Such options have a weighted average
remaining contractual life of eight years.
In 1998, in connection with the merger with Oasis, we assumed the Oasis
stock incentive plans. We converted all unexercised Oasis stock options issued
under the former Oasis stock incentive plans that are held by former employees
of Oasis into 894,111 options to purchase Camden common shares based on the
0.759 exchange ratio described in Note 1. The options are exercisable at prices
ranging from $28.66 to $33.76. All of the Oasis options became fully vested upon
conversion, are exercisable, and have a weighted average remaining contractual
life of five years. These options are exercisable at a weighted average price of
$30.29.
The fair value of each option grant, excluding the Oasis stock options, was
estimated on the date of grant utilizing the Black-Scholes option pricing model
with the following weighted average assumptions used for grants in 1999, 1998,
and 1997, respectively: risk-free interest rates of 4.9%, 5.5% to 5.6%, and 6.3%
to 6.9%, expected life of ten years, dividend yield of 7.6%, 7.8% and 6.3%, and
expected share volatility of 13.7%, 13.9%, and 14.4%. The weighted average fair
value of options granted in 1999, 1998, and 1997, respectively, was $0.91, $1.27
and $2.63 per share.
Restricted shares have vesting periods of up to five years. The
compensation cost for restricted shares has been recognized at the fair market
value of our shares.
Employee Stock Purchase Plan. In July 1997, we established and commenced an
ESPP for all active employees, officers, and trust managers who have completed
one year of continuous service. Participants may elect to purchase Camden common
shares through payroll or director fee deductions and/or through quarterly
contributions. At the end of each six-month offering period, each participant's
account balance is applied to acquire common shares on the open market at 85% of
the market value, as defined, on the first or last day of the offering period,
whichever price is lower. Effective for the 2000 plan year, each participant
must hold the shares purchased for nine months in order to receive the discount.
A participant may not purchase more than $25,000 in value of shares during any
plan year, as defined. No compensation expense was recognized for the difference
in price paid by employees and the fair market value of our shares at the date
of purchase. There were 98,456 and 32,678 shares purchased under the ESPP during
1999 and 1998, respectively. No shares were purchased in 1997. The weighted
average fair value of ESPP shares purchased in 1999 and 1998 was $27.42 and
$30.41 per share, respectively. On January 4, 2000, 17,298 shares were purchased
under the ESPP related to the 1999 plan year.
If we applied the recognition provisions of SFAS No. 123 to our option
grants and ESPP, our net income to common shareholders and related basic and
diluted earnings per share would be as follows (in thousands, except per share
amounts):
Year Ended December 31,
-----------------------------------
1999 1998 1997
----------- ----------- -----------
Net income to common shareholders $ 51,076 $ 47,360 $ 38,381
Basic earnings per share $ 1.24 $ 1.15 $ 1.46
Diluted earnings per share $ 1.20 $ 1.10 $ 1.41
The effects of applying SFAS No. 123 in this pro forma disclosure are not
indicative of future amounts.
Rabbi Trust. In February 1997, we established a rabbi trust in which salary
and bonus amounts awarded to certain officers under the key employee share
option plan and restricted shares awarded to certain officers and trust managers
may be deposited. We account for the rabbi trust similar to a compensatory stock
option plan. At December 31, 1999, approximately 532,000 restricted shares were
held in the rabbi trust.
<PAGE> 134
401(k) Savings Plan. We have a 401(k) savings plan which is a voluntary
defined contribution plan. Under the savings plan, every employee is eligible to
participate beginning on the earlier of January 1 or July 1 following the date
the employee has completed six months of continuous service with us. Each
participant may make contributions to the savings plan by means of a pre-tax
salary deferral which may not be less than 1% nor more than 15% of the
participant's compensation. The federal tax code limits the annual amount of
salary deferrals that may be made by any participant. We may make matching
contributions on the participant's behalf. A participant's salary deferral
contribution will always be 100% vested and nonforfeitable. A participant will
become vested in our matching contributions 33.33% after one year of service,
66.67% after two years of service and 100% after three years of service.
Expenses under the savings plan were not material.
7. COMMON SHARE REPURCHASE PROGRAM
In October 1999, the Board of Trust Managers authorized us to repurchase or
redeem up to $100 million of our securities through open market purchases and
private transactions. This amount is in addition to the initial $50 million the
Board authorized for repurchase or redemption in September 1998, and the
additional $50 million the Board authorized for repurchase or redemption in
March 1999. As of December 31, 1999, we had repurchased 5,691,826 common shares
and redeemed 103,864 units for a total cost of $146.8 million and $2.9 million,
respectively. Management expects to complete the remaining repurchases during
2000.
8. PREFERRED UNITS
In February 1999, our operating partnership issued $100 million of 8.5%
Series B Cumulative Redeemable Perpetual Preferred Units. Distributions on the
preferred units are payable quarterly in arrears. The preferred units are
redeemable for cash by the operating partnership on or after the fifth
anniversary of issuance at par plus the amount of any accumulated and unpaid
distributions. The preferred units are convertible after 10 years by the holder
into our 8.5% Series B Cumulative Redeemable Perpetual Preferred Shares. The
preferred units are subordinate to present and future debt. We used the net
proceeds to reduce indebtedness outstanding under the unsecured lines of credit
and repurchase common shares.
During the third quarter of 1999, our operating partnership issued $35.5
million of 8.25% Series C Cumulative Redeemable Perpetual Preferred Units.
Distributions on the preferred units are payable quarterly in arrears. The
preferred units are redeemable for cash by the operating partnership on or after
the fifth anniversary of issuance at par plus the amount of any accumulated and
unpaid distributions. The preferred units are convertible after 10 years by the
holder into our 8.25% Series C Cumulative Redeemable Perpetual Preferred Shares.
The preferred units are subordinate to present and future debt. Subsequent to
year end, our operating partnership issued $17.5 million of the 8.25% Series C
Cumulative Redeemable Perpetual Preferred Units. We used the net proceeds to
reduce indebtedness outstanding under the unsecured lines of credit and
repurchase common shares.
9. CONVERTIBLE PREFERRED SHARES
The 4,165,000 preferred shares pay a cumulative dividend quarterly in
arrears in an amount equal to $2.25 per share per annum. The preferred shares
generally have no voting rights and have a liquidation preference of $25 per
share plus accrued and unpaid distributions. The preferred shares are
convertible at the option of the holder at any time into common shares at a
conversion price of $32.4638 per common share (equivalent to a conversion rate
of 0.7701 per common share for each preferred share), subject to adjustment in
certain circumstances. The preferred shares are not redeemable prior to April
30, 2001.
<PAGE> 135
10. RELATED PARTY TRANSACTIONS
Two of our executive officers have loans totaling $1.8 million with one of
our nonqualified-REIT subsidiaries. The executives utilized amounts received
from these loans to purchase our common shares in 1994. The loans mature in
February 2004 and bear interest at the fixed rate of 5.23%. These loans are full
recourse obligations of the officers and do not require any prepayments of
principal until maturity.
In connection with the Paragon and Oasis mergers and the formation of
Sierra-Nevada, we began performing property management services for owners of
affiliated properties. Management fees earned on the properties amounted to
$845,000, $583,000, and $279,000 for the years ended December 31, 1999, 1998,
and 1997, respectively.
In connection with the Oasis merger, we entered into consulting agreements
with two former Oasis executives, one of whom currently serves as a trust
manager, to locate potential investment opportunities in California. We paid
consulting fees totaling $389,000 and $340,000 to these executives in 1999 and
1998, respectively.
In December 1999, our Board of Trust Managers approved a plan which
permitted six of our senior executive officers to complete the purchase of
666,034 shares of our common shares of beneficial interest in open market
transactions for a total of $17.5 million. The purchases were funded with
unsecured full recourse personal loans made to each of the executives by a third
party lender. The loans mature in five years, bear interest at 7.5% and require
interest to be paid quarterly. In order to facilitate the employee share
purchase transactions, we entered into a guaranty agreement with the lender for
payment of all indebtedness, fees and liabilities of the officers to the lender.
Simultaneously, we entered into a reimbursement agreement with each of the
executive officers whereby each executive officer has indemnified us and
absolutely and unconditionally agreed to reimburse us fully for any amounts paid
by us pursuant to the terms of the guaranty agreement, including interest from
the date amounts are paid by us until repayment by the officer. We have not had
to perform under the guaranty agreement.
Subsequent to year end, the Board approved a plan for four of our senior
executive officers to complete the purchase of an additional $5.5 million of
our common shares. We have provided additional guarantees for these purchases.
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107 requires disclosure about fair value for all financial
instruments, whether or not recognized, for financial statement purposes.
Disclosure about fair value of financial instruments is based on pertinent
information available to management as of December 31, 1999 and 1998.
Considerable judgment is necessary to interpret market data and develop
estimated fair values. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts we could obtain on disposition of the
financial instruments. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.
As of December 31, 1999 and 1998, management estimates that the fair value
of cash and cash equivalents, accounts receivable, notes receivable, accounts
payable, accrued expenses and other liabilities and distributions payable are
carried at amounts which reasonably approximate their fair value.
As of December 31, 1999, the outstanding balance of fixed rate notes
payable of $985.6 million (excluding $25 million of variable rate debt fixed
through an interest rate swap agreement) had a fair value of $963.5 million as
estimated based upon interest rates available for the issuance of debt with
<PAGE> 136
similar terms and remaining maturities. The floating rate notes payable balance
at December 31, 1999 approximates fair value.
The fair value of our interest rate swap agreements, which are used for
hedging purposes, are estimated by obtaining quotes from an investment broker.
At December 31, 1999, there were no carrying amounts related to these
arrangements in the consolidated balance sheet, and the fair value of these
agreements was approximately $90,000.
As of December 31, 1998, the carrying amount of fixed and floating rate
debt, including interest rate swap agreements, approximated fair value.
We are exposed to credit risk in the event of nonperformance by
counterparties to our interest rate swap agreements, but have no off-balance
sheet risk of loss. We anticipate that our counter parties will fully perform
their obligations under the agreements.
12. NET CHANGE IN OPERATING ACCOUNTS
The effect of changes in the operating accounts on cash flows from
operating activities is as follows:
<TABLE>
<CAPTION>
(In thousands) Year Ended December 31,
-----------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Decrease (increase) in assets:
Accounts receivable - affiliates $ (1,085) $ 1,496 $ 853
Other assets, net 38 1,518 2,046
Restricted cash (426) 1,272 (1,733)
Increase (decrease) in liabilities:
Accounts payable (3,768) 11,570 434
Accrued real estate taxes 3,011 3,879 842
Accrued expenses and other liabilities 13,266 (19,531) (12,695)
------------ ------------ ------------
Net change in operating accounts $ 11,036 $ 204 $ (10,253)
============ ============ ============
</TABLE>
13. COMMITMENTS AND CONTINGENCIES
Construction Contracts. As of December 31, 1999, we were obligated for
approximately $45.0 million of additional expenditures (a substantial amount of
which is to be provided by debt).
Lease Commitments. At December 31, 1999, we had long-term leases covering
certain land, office facilities and equipment. Rental expense totaled $1.7
million in 1999, $1.0 million in 1998 and $783,000 in 1997. Minimum annual
rental commitments for the years ending December 31, 2000 through 2004 are $1.5
million, $1.3 million, $1.1 million, $1.0 million and $1.0 million,
respectively, and $8.1 million in the aggregate thereafter.
Employment Agreements. We have employment agreements with six of our senior
officers, the terms of which expire at various times through August 20, 2001.
Such agreements provide for minimum salary levels as well as various incentive
compensation arrangements, which are payable based on the attainment of specific
goals. The agreements also provide for severance payments in the event certain
situations occur such as termination without cause or a change of control. The
severance payments vary based on the officer's position and amount to one times
the current salary base for four of the officers and 2.99 times the average
annual compensation over the previous three fiscal years for the two remaining
officers. Six months prior to expiration, unless notification of termination is
given by the senior officers, these agreements extend for one year from the date
of expiration.
<PAGE> 137
Contingencies. Prior to our merger with Oasis, Oasis had been contacted by
certain regulatory agencies with regards to alleged failures to comply with the
Fair Housing Amendments Act (the "Fair Housing Act") as it pertained to nine
properties (seven of which we currently own) constructed for first occupancy
after March 31, 1991. On February 1, 1999, the Justice Department filed a
lawsuit against us and several other defendants in the United States District
Court for the District of Nevada alleging (1) that the design and construction
of these properties violates the Fair Housing Act and (2) that we, through the
merger with Oasis, had discriminated in the rental of dwellings to persons
because of handicap. The complaint requests an order that (i) declares that the
defendant's policies and practices violate the Fair Housing Act; (ii) enjoins us
from (a) failing or refusing, to the extent possible, to bring the dwelling
units and public use and common use areas at these properties and other covered
units that Oasis has designed and/or constructed into compliance with the Fair
Housing Act, (b) failing or refusing to take such affirmative steps as may be
necessary to restore, as nearly as possible, the alleged victims of the
defendants alleged unlawful practices to positions they would have been in but
for the discriminatory conduct and (c) designing or constructing any covered
multi-family dwellings in the future that do not contain the accessibility and
adaptability features set forth in the Fair Housing Act; and requires us to pay
damages, including punitive damages, and a civil penalty.
With any acquisition, we plan for and undertake renovations needed to
correct deferred maintenance, life/safety and Fair Housing matters. We are
currently in the process of determining the extent of the alleged noncompliance
on the properties discussed above and the remaining changes that may be
necessitated. At this time, we are not able to provide an estimate of costs and
expenses associated with the resolution of this matter, however, management does
not expect the amount to be material. There can be no assurance that we will be
successful in the defense of the Justice Department action.
We are subject to various legal proceedings and claims that arise in the
ordinary course of business. These matters are generally covered by insurance.
While the resolution of these matters cannot be predicted with certainty,
management believes that the final outcome of such matters will not have a
material adverse effect on our consolidated financial statements.
14. SUBSEQUENT EVENTS
In the ordinary course of our business, we issue letters of intent
indicating a willingness to negotiate for the purchase or sale of multifamily
properties or development land. In accordance with local real estate market
practice, such letters of intent are non-binding, and neither party to the
letter of intent is obligated to pursue negotiations unless and until a
definitive contract is entered into by the parties. Even if definitive contracts
are entered into, the letters of intent and resulting contracts contemplate that
such contracts will provide the purchaser with time to evaluate the properties
and conduct due diligence and during which periods the purchaser will have the
ability to terminate the contracts without penalty or forfeiture of any deposit
or earnest money. There can be no assurance that definitive contracts will be
entered into with respect to any properties covered by letters of intent or that
we will acquire or sell any property as to which we may have entered into a
definitive contract. Further, due diligence periods are frequently extended as
needed. An acquisition or sale becomes probable at the time that the due
diligence period expires and the definitive contract has not been terminated. We
are then at risk under an acquisition contract, but only to the extent of any
earnest money deposits associated with the contract, and is obligated to sell
under a sales contract.
We are currently in the due diligence period for the purchase of land for
development. No assurance can be made that we will be able to complete the
negotiations or become satisfied with the outcome of the due diligence.
<PAGE> 138
At year end, we were obligated under an earnest money contract to sell two
parcels of land totaling approximately $15 million. We expect to complete this
transaction late in the first quarter to early in the second quarter of 2000.
We are currently seeking to selectively dispose of up to $150 million of
real estate assets that management believes have a lower projected net operating
income growth rate than the overall portfolio, or no longer conform to our
operating and investment strategies. We currently anticipate using the potential
proceeds from these sales to retire debt and repurchase shares. However, we
cannot assure you that we will complete these sales or that the final outcomes
of these sales, if completed, will be on terms favorable to us.
15. QUARTERLY FINANCIAL DATA (unaudited)
Summarized quarterly financial data for the years ended December 31, 1999
and 1998 are as follows:
<TABLE>
<CAPTION>
(In thousands, except per share amounts)
First Second Third Fourth Total
---------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
1999:
Revenues $ 88,835 $ 91,412 $ 94,177 $ 96,872 $ 371,296
Net income to common shareholders 13,706* 12,838 13,535** 12,173 52,252
Basic earnings per share 0.32* 0.31 0.33** 0.30 1.27
Diluted earnings per share 0.31* 0.30 0.32** 0.29 1.23
1998***:
Revenues $ 58,592 $ 91,587 $ 86,549 $ 87,111 $ 323,839
Net income to common shareholders 8,961 9,568 14,650 14,783 47,962
Basic earnings per share 0.28 0.22 0.33 0.33 1.16
Diluted earnings per share 0.27 0.21 0.31 0.32 1.12
</TABLE>
* Includes a $720 or $0.02 basic and diluted earnings per share impact
related to gain on the sale of a property.
** Includes a $2,259 or $0.06 basic earnings and $0.05 diluted earnings per
share impact related to gain on sales of properties.
*** Includes results of the Oasis merger beginning April 1, 1998.
16. Price Range of Common Shares (unaudited)
The high and low sales prices per share of our common shares, as reported
on the New York Stock Exchange composite tape, and distributions per share
declared for the quarters indicated were as follows:
High Low Distributions
------------ -------------- -----------------
1999:
First $ 26 11/16 $ 24 3/16 $ 0.520
Second 28 3/16 24 1/8 0.520
Third 28 3/16 25 15/16 0.520
Fourth 27 3/4 25 9/16 0.520
1998:
First $ 30 9/16 $ 28 5/8 $ 0.505
Second 31 1/16 27 15/16 0.505
Third 30 7/16 25 0.505
Fourth 27 7/8 24 1/2 0.505
<PAGE> 139
CAMDEN PROPERTY TRUST
COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------
1999 1998* 1997** 1996 1995
------------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Operating Data
Revenues:
Rental income $ 341,168 $ 300,632 $ 187,928 $ 105,785 $ 92,275
Other property income 22,148 18,093 9,446 4,453 3,617
------------- ------------- ------------- ----------- -----------
Total property income 363,316 318,725 197,374 110,238 95,892
Equity in income of joint ventures 683 1,312 1,141
Fee and asset management 5,373 1,552 743 949 1,029
Other income 1,924 2,250 531 419 353
------------- ------------- ------------- ----------- -----------
Total revenues 371,296 323,839 199,789 111,606 97,274
------------- ------------- ------------- ----------- -----------
Expenses
Property operating and maintenance 107,972 97,137 70,679 40,604 37,093
Real estate taxes 36,410 31,469 21,028 13,192 11,481
General and administrative 10,606 7,998 4,389 2,631 2,263
Interest 57,856 50,467 28,537 17,336 13,843
Depreciation and amortization 89,516 78,113 44,836 23,894 20,264
------------- ------------- ------------- ----------- -----------
Total expenses 302,360 265,184 169,469 97,657 84,944
------------- ------------- ------------- ----------- -----------
Income before gain on sales of properties and joint
venture interests, losses related to early
retirement of debt and minority interests 68,936 58,655 30,320 13,949 12,330
Gain on sales of properties and joint venture interests 2,979 10,170 115
Losses related to early retirement of debt (397) (5,351)
------------- ------------- ------------- ----------- -----------
Income before minority interests 71,915 58,655 40,093 8,713 12,330
Income allocated to minority interests
Preferred unit distributions (8,278)
Operating partnership units (2,014) (1,322) (1,655)
------------- ------------- ------------- ----------- -----------
Total income allocated to minority interests (10,292) (1,322) (1,655)
------------- ------------- ------------- ----------- -----------
Net income 61,623 57,333 38,438 8,713 12,330
Preferred share dividends (9,371) (9,371) (4) (39)
------------- ------------- ------------- ---------- -----------
Net income to common shareholders $ 52,252 $ 47,962 $ 38,438 $ 8,709 $ 12,291
============= ============= ============= =========== ===========
Basic earnings per share $ 1.27 $ 1.16 $ 1.46 $ 0.59 $ 0.86
Diluted earnings per share $ 1.23 $ 1.12 $ 1.41 $ 0.58 $ 0.86
Distributions per common share $ 2.08 $ 2.02 $ 1.96 $ 1.90 $ 1.84
Weighted average number of common shares outstanding . 41,236 41,174 26,257 14,849 14,325
Weighted average number of common and common 44,291 44,183 28,356 14,979 14,414
dilutive equivalent shares outstanding
Balance Sheet Data (at end of period)
Real estate assets $ 2,678,034 $ 2,487,942 $ 1,397,138 $ 646,545 $ 607,598
Accumulated depreciation (253,545) (167,560) (94,665) (56,369) (36,800)
Total assets 2,487,932 2,347,982 1,323,620 603,510 582,352
Notes payable 1,165,090 1,002,568 480,754 244,182 235,459
Minority interests 196,852 71,783 63,325
Convertible subordinated debentures 3,406 3,576 6,025 27,702 44,050
Series A Preferred Shares issued in 1993 1,950
Shareholders' Equity 1,016,675 1,170,388 710,564 295,428 267,829
Common shares outstanding 39,093 43,825 31,694 16,521 14,514
</TABLE>
<PAGE> 140
CAMDEN PROPERTY TRUST
COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA (continued)
(In thousands, except property data amounts)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1999 1998* 1997** 1996 1995
------------ ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Other Data
Cash flows provided by (used in):
Operating activities $ 164,021 $ 138,419 $ 65,974 $ 41,267 $ 37,594
Investing activities (220,571) (55,013) (73,709) (41,697) (97,003)
Financing activities 56,420 (84,227) 11,837 59,404
2,560
Funds from operations*** 152,369 137,996 75,753 39,999 35,260
Property Data
Number of operating properties (at end of period) 153 149 100 48 50
Number of operating apartment homes (at end of period) 53,311 51,310 34,669 17,611 16,742
Number of operating apartment homes (weighted average) 45,606 42,411 29,280 17,362 16,412
Weighted average monthly total property
income per apartment home $ 664 $ 626 $ 562 $ 529 $ 487
Properties under development (at end of period) 6 14 6 5 9
</TABLE>
* Effective April 1, 1998 we acquired Oasis.
** Effective April 1, 1997 we acquired Paragon.
*** Management considers FFO to be an appropriate measure of the performance of
an equity REIT. The National Association of Real Estate Investment Trusts
("NAREIT") currently defines FFO as net income (computed in accordance with
generally accepted accounting principles), excluding gains (or losses) from
debt restructuring and sales of property, plus real estate depreciation and
amortization, and after adjustments for unconsolidated partnerships and
joint ventures. In addition, extraordinary or unusual items, along with
significant non-recurring events that materially distort the comparative
measure of FFO are typically disregarded in its calculation. Our definition
of diluted FFO also assumes conversion at the beginning of the period of
all convertible securities, including minority interests, which are
convertible into common equity. We believe that in order to facilitate a
clear understanding of our consolidated historical operating results, FFO
should be examined in conjunction with net income as presented in the
consolidated financial statements and data included elsewhere in this
report. FFO is not defined by generally accepted accounting principles. FFO
should not be considered as an alternative to net income as an indication
of our operating performance or to net cash provided by operating
activities as a measure of our liquidity. Further, FFO as disclosed by
other REIT's may not be comparable to our calculation.
<PAGE> 141
EXHIBIT 21.1
State of
Incorporation/ Name Under Which
Names of Subsidiaries Organization Business is Done
- --------------------------------- -------------------- ------------------------
1.Camden Operating, L.P. Delaware Camden Operating, L.P.
2.Camden USA, Inc. Delaware Camden USA, Inc.
3.Camden Development, Inc. Delaware Camden Development, Inc.
4.Camden Realty, Inc. Delaware Camden Realty, Inc.
<PAGE> 142
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements No.
33-80230, No. 333-32569 and No. 333-57565, each on Form S-8, Amendment No. 2 to
No. 33-84658, Amendment No. 1 to No. 33-84536, Amendment No. 4 to No. 333-70295
and Post-Effective Amendment No. 1 to No. 333-92959, each on Form S-3, of Camden
Property Trust of our report dated February 4, 2000, appearing in this Annual
Report on Form 10-K of Camden Property Trust for the year enced December 31,
1999.
DELOITTE & TOUCHE LLP
Houston, Texas
March 28, 2000
<PAGE> 143
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint D. Keith Oden and G. Steven Dawson, and each of them, each with full
power to act without the other, his true and lawful attorneys-in-fact and
agents, each with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign an Annual Report
(the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended
December 31, 1999 and to sign any and all amendments to the Annual Report and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite and necessary to be done as fully to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that each of said attorneys-in-fact and agents or
any of them may lawfully do or cause to be done by virtue hereof.
/s/Richard J. Campo
----------------------------------------
Signature
Richard J. Campo
----------------------------------------
Print Name
Dated: March 28, 2000
<PAGE> 144
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint Richard J. Campo and G. Steven Dawson, and each of them, each with
full power to act without the other, his true and lawful attorneys-in-fact and
agents, each with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign an Annual Report
(the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended
December 31, 1999 and to sign any and all amendments to the Annual Report and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite and necessary to be done as fully to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that each of said attorneys-in-fact and agents or
any of them may lawfully do or cause to be done by virtue hereof.
/s/D. Keith Oden
----------------------------------------
Signature
D. Keith Oden
----------------------------------------
Print Name
Dated: March 28, 2000
<PAGE> 145
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint D. Keith Oden and Richard J. Campo, and each of them, each with full
power to act without the other, his true and lawful attorneys-in-fact and
agents, each with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign an Annual Report
(the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended
December 31, 1999 and to sign any and all amendments to the Annual Report and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite and necessary to be done as fully to all
intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that each of said attorneys-in-fact and agents or
any of them may lawfully do or cause to be done by virtue hereof.
/s/G. Steven Dawson
----------------------------------------
Signature
G. Steven Dawson
----------------------------------------
Print Name
Dated: March 28, 2000
<PAGE> 146
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of
them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY
TRUST on Form 10-K for the year ended December 31, 1999 and to sign any and all
amendments to the Annual Report and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
/s/William R. Cooper
----------------------------------------
Signature
William R. Cooper
----------------------------------------
Print Name
Dated: March 28, 2000
<PAGE> 147
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of
them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY
TRUST on Form 10-K for the year ended December 31, 1999 and to sign any and all
amendments to the Annual Report and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
/s/George A. Hrdlicka
----------------------------------------
Signature
George A. Hrdlicka
----------------------------------------
Print Name
Dated: March 28, 2000
<PAGE> 148
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of
them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY
TRUST on Form 10-K for the year ended December 31, 1999 and to sign any and all
amendments to the Annual Report and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
/s/Scott S. Ingraham
----------------------------------------
Signature
Scott S. Ingraham
----------------------------------------
Print Name
Dated: March 28, 2000
<PAGE> 149
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of
them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY
TRUST on Form 10-K for the year ended December 31, 1999 and to sign any and all
amendments to the Annual Report and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
/s/Lewis A. Levey
----------------------------------------
Signature
Lewis A. Levey
----------------------------------------
Print Name
Dated: March 28, 2000
<PAGE> 150
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of
them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY
TRUST on Form 10-K for the year ended December 31, 1999 and to sign any and all
amendments to the Annual Report and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
/s/F. Gardner Parker
----------------------------------------
Signature
F. Gardner Parker
----------------------------------------
Print Name
Dated: March 28, 2000
<PAGE> 151
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of
them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY
TRUST on Form 10-K for the year ended December 31, 1999 and to sign any and all
amendments to the Annual Report and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
/s/Steven A. Webster
----------------------------------------
Signature
Steven A. Webster
----------------------------------------
Print Name
Dated: March 28, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 10,229
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,678,034
<DEPRECIATION> 253,545
<TOTAL-ASSETS> 2,487,932
<CURRENT-LIABILITIES> 0
<BONDS> 1,165,090
0
42
<COMMON> 448
<OTHER-SE> 1,016,185
<TOTAL-LIABILITY-AND-EQUITY> 2,487,932
<SALES> 0
<TOTAL-REVENUES> 371,296
<CGS> 0
<TOTAL-COSTS> 144,382
<OTHER-EXPENSES> 89,516
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 57,856
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61,623
<EPS-BASIC> 1.27
<EPS-DILUTED> 1.23
</TABLE>
