<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
LEXINGTON CORPORATE PROPERTIES TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
LEXINGTON CORPORATE PROPERTIES TRUST
355 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 692-7260
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1999
------------------------
To the Shareholders of
Lexington Corporate Properties Trust:
The 1999 Annual Meeting of Shareholders of Lexington Corporate Properties
Trust (the "Company") will be held at the Hotel Inter-Continental New York, 111
East 48th Street, New York, New York 10017 on Wednesday, May 19, 1999, at 9:00
a.m., New York City time, for the following purposes:
(1) to elect seven trustees to serve until the 2000 Annual Meeting of
Shareholders; and
(2) to transact such other business as may properly come before the 1999
Annual Meeting.
Only shareholders of record at the close of business on April 7, 1999 (the
"Shareholders") are entitled to notice of and to vote at the 1999 Annual Meeting
of Shareholders or any adjournments thereof. A list of Shareholders will be
available for inspection during normal business hours at the offices of the
Company located at 355 Lexington Avenue, New York, New York 10017, during the
ten days preceding the 1999 Annual Meeting of Shareholders.
By Order of the Board of Trustees,
PAUL R. WOOD
Vice President, Chief Accounting
Officer
and Secretary
New York, New York
April 14, 1999
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENVELOPE PROVIDED WHETHER OR NOT YOU PLAN TO ATTEND THE 1999 ANNUAL MEETING.
THE PROXY MAY BE REVOKED BY YOU AT ANY TIME BY WRITTEN NOTICE TO THE COMPANY
PRIOR TO ITS EXERCISE. GIVING YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IF YOU ATTEND THE MEETING AND AFFIRMATIVELY INDICATE YOUR INTENTION TO
VOTE AT SUCH MEETING.
<PAGE> 3
LEXINGTON CORPORATE PROPERTIES TRUST
355 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 692-7260
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Trustees of Lexington Corporate
Properties Trust (the "Company") for use at the 1999 Annual Meeting of
Shareholders, and at any adjournments thereof (the "Annual Meeting"), to be held
on Wednesday, May 19, 1999, at the Hotel Inter-Continental New York, 111 East
48th Street, New York, New York 10017 at 9:00 a.m. New York City time. This
Proxy Statement and the related proxy card are first being sent to the
Shareholders of the Company on or about April 14, 1999.
Valid proxies will be voted as specified thereon at the Annual Meeting. Any
person giving a Proxy may revoke it by written notice to the Company at any time
prior to its exercise. Attendance at the Annual Meeting will not constitute a
revocation of a proxy unless the Shareholder affirmatively indicates at the
Annual Meeting that such Shareholder intends to vote such Shareholder's shares
in person.
ANNUAL REPORT
The Annual Report to Shareholders and Form 10-K of the Company for the year
ended December 31, 1998, including financial statements audited by KPMG LLP, the
Company's independent auditors, and their report thereon dated January 25, 1999,
are being mailed together with this Proxy Statement to each Shareholder. Except
as specifically incorporated herein by reference, the Annual Report is not part
of the proxy solicitation material.
VOTING SECURITIES
The holders of record of Common Shares, par value $.0001 per share (the
"Common Shares"), and of Class A Senior Cumulative Convertible Preferred Shares
(the "Preferred Shares"), of the Company at the close of business on April 7,
1999 (the "Record Date") are entitled to vote at the Annual Meeting. On the
Record Date, there were outstanding 17,210,295 Common Shares and 2,000,000
Preferred Shares, each of which Common Shares and Preferred Shares are entitled
to one vote per share on all matters submitted to a vote of Shareholders.
Unless contrary instructions are indicated on the Proxy, all Common Shares
and Preferred Shares represented by valid proxies received pursuant to this
solicitation, unless previously revoked, will be voted at the Annual Meeting FOR
the election of the seven nominees to serve as trustees until the 2000 Annual
Meeting of Shareholders.
Assuming a quorum is present at the Annual Meeting, the affirmative vote of
the holders of a plurality of the Common Shares and Preferred Shares, considered
as a single class, entitled to be voted at the Annual Meeting will be required
for the election of trustees, and the affirmative vote of the holders of a
plurality of the Preferred Shares, voting separately as a single class, entitled
to be voted at the Annual Meeting will be required for the election of the
Preferred Trustee (as defined). For purposes of the foregoing matter, the Common
Shares and Preferred Shares will vote together as a single class, except with
respect to the election of the Preferred Trustee as to which the holders of the
Preferred Shares will vote as a separate class. The Common Shares and Preferred
Shares represented by a valid proxy which abstains with respect to any matter
will be counted in determining the number of votes cast with respect to that
matter but will not be counted as an affirmative vote in determining whether the
affirmative vote of the requisite number of shares was cast in favor of that
matter. Therefore, abstentions as to the election of trustees will not affect
the election of the
2
<PAGE> 4
candidates receiving a plurality of the votes cast. Abstentions as to the other
proposals will have the same effect as votes against such proposals. Broker
non-votes will be treated as un-voted for purposes of determining approval of
any such proposal and will not be counted as votes for or against such proposal.
If a Shareholder is a participant in the Company's Dividend Reinvestment
Plan, the proxy card enclosed herewith represents shares in the participant's
account, as well as shares held of record in the participant's name. The Company
knows of no business, other than that set forth above, to be presented at the
Annual Meeting which would be a proper subject for action by the Shareholders.
If any other matter should be presented at the Annual Meeting upon which a vote
properly may be taken, it is intended that any share represented by a proxy in
the accompanying form will be voted with respect thereto in accordance with the
judgment of the person or persons voting such shares.
SHARE OWNERSHIP OF PRINCIPAL SECURITY HOLDERS,
TRUSTEES AND EXECUTIVE OFFICERS
The following table indicates, as of February 26, 1999, (a) the number of
Common Shares and Preferred Shares beneficially owned by each person known by
the Company to own in excess of five percent of the outstanding Common Shares or
Preferred Shares, each trustee and each executive officer named in the Summary
Compensation Table under "COMPENSATION OF EXECUTIVE OFFICERS" below, and by all
trustees and officers as a group, and (b) the percentage such shares represent
of the total outstanding Common Shares, Preferred Shares and voting shares. All
shares were owned directly on such date with sole voting and investment power
unless otherwise indicated.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF
SHARES(1) PERCENT OF CLASS
------------------------ -----------------------------
COMMON PREFERRED VOTING
NAME OF BENEFICIAL OWNER SHARES SHARES COMMON PREFERRED SHARES
- ------------------------ --------- --------- ------ --------- ------
<S> <C> <C> <C> <C> <C>
Five Arrows Realty Securities
L.L.C. ............................. -- 2,000,000(2) -- 100.000% 10.37%
E. Robert Roskind..................... 1,911,989(3) -- 10.06% -- 9.10%
Richard J. Rouse...................... 396,968(4) -- 2.26% -- 2.03%
T. Wilson Eglin....................... 363,196(5) -- 2.07% -- 1.86%
Patrick Carroll....................... 8,865(6) -- * -- *
Stephen C. Hagen...................... 39,211(7) -- * -- *
Carl D. Glickman...................... 158,965(8) -- * -- *
Kevin W. Lynch........................ 23,131(9) -- * -- *
John D. McGurk........................ -- 2,000,000(10) 100.000% 10.37%
Seth M. Zachary....................... 35,321(11) -- * -- *
All trustees and executive officers as
a group (10 persons)(12)............ 2,973,101 2,000,000 15.11% 100.000% 22.95%
</TABLE>
- ---------------
* Represents beneficial ownership of less than 1.000%
(1) For purposes of this table, a person is deemed to have "beneficial
ownership" of any shares as of a given date which such person has the right
to acquire within 60 days after such date. For purposes of computing the
percentage of outstanding shares held by each person named above on a given
date, any security which such person or persons has the right to acquire
within 60 days after such date is deemed to be outstanding, but is not
deemed to be outstanding for the purpose of computing the percentage
ownership of any other person.
(2) These shares are convertible into 2,000,000 Common Shares, subject to
adjustment, at any time.
(3) Includes (i) 698,448 limited partnership units held by Mr. Roskind in
Lepercq Corporate Income Fund L.P. and Lepercq Corporate Income Fund II
L.P., each of which is a subsidiary of the Company, which are exchangeable,
on a one-for-one basis, for Common Shares, (ii) 714,717 limited partnership
units in Lepercq Corporate Income Fund L.P. and Lepercq Corporate Income
Fund II L.P. held by The LCP Group, L.P., of which Mr. Roskind is Chairman,
which are exchangeable, on a one-
3
<PAGE> 5
for-one basis, for Common Shares, (iii) 9,000 Common Shares owned of record
by The LCP Group, L.P., (iv) options to purchase 180,000 Common Shares at
an exercise price of $11.125 per share, 52,600 Common Shares at an exercise
price of $11.875 per share, 32,800 Common Shares at an exercise price of
$11.25 per share, 51,310 Common Shares at an exercise price of $12.325 per
share, (v) 71,839 Common Shares owned of record by Mr. Roskind's wife, (vi)
31,727 Common Shares owned of record in a retirement plan for the benefit
of Mr. Roskind and his wife and (vii) 20,000 restricted Common Shares. Mr.
Roskind disclaims beneficial ownership of the 71,839 shares listed in
clause (v) above.
(4) Includes (i) 86,702 limited partnership units held by Mr. Rouse in Lepercq
Corporate Income Fund L.P. and Lepercq Corporate Income Fund II L.P., which
are exchangeable, on a one-for-one basis, for Common Shares, (ii) options
to purchase 90,000 Common Shares at an exercise price of $11.125 per share,
43,800 Common Shares at an exercise price of $11.875 per share, 32,800
Common Shares at an exercise price of $11.25 per share and 34,552 Common
Shares at an exercise price of $12.325 per share, (iii) 8,677 Common Shares
owned of record in a retirement plan for the benefit of Mr. Rouse, (iv)
14,000 restricted Common Shares and (v) 65,500 Common Shares which secure a
note issued by Mr. Rouse.
(5) Includes (i) options to purchase 61,250 Common Shares at an exercise price
of $11.125 per share, 35,000 Common Shares at an exercise price of $11.875
per share, 46,000 Common Shares at an exercise price of $11.25 per share,
111,466 Common Shares at an exercise price of $12.325 per share, (ii)
14,000 restricted Common Shares and (iii) 65,500 Common Shares which secure
a note issued by Mr. Eglin.
(6) Includes 8,000 restricted Common Shares.
(7) Includes (i) options to purchase 10,000 Common Shares at an exercise price
of $12.25 per share and 25,000 Common Shares at an exercise price of $15.25
and (ii) 4,000 restricted Common Shares.
(8) Includes (i) options to purchase 2,500 Common Shares at an exercise price
of $9.00 per share, 2,500 Common Shares at an exercise price of $11.25 per
share, 2,500 Common Shares at an exercise price of $14.25 per share, 12,500
Common Shares at an exercise price of $15.25 and (ii) 1,250 restricted
Common Shares.
(9) Includes (i) options to purchase 2,500 Common Shares at an exercise price
of $11.75, 2,500 Common Shares at an exercise price of $14.25 per share,
12,500 Common Shares at an exercise price of $15.25 and (ii) 1,250
restricted Common Shares.
(10) Includes 2,000,000 Preferred Shares owned beneficially and of record by
Five Arrows. Mr. McGurk, among others, has been appointed by Rothschild
Investors as a manager of Five Arrows. Mr. McGurk is also the designee of
Five Arrows to the Company's Board of Trustees. Mr. McGurk disclaims
beneficial ownership of all such Preferred Shares.
(11) Includes (i) options to purchase 2,500 Common Shares at an exercise price
of $9.00 per share, 2,500 Common Shares at an exercise price of $11.25 per
share, 2,500 Common Shares at an exercise price of $14.25 per share, 12,500
Common Shares at an exercise price of $15.25, and (ii) 1,250 restricted
Common Shares.
(12) Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's trustees and executive officers to file initial reports of
ownership and reports of changes in ownership of Common Shares and other
equity securities with the Securities and Exchange Commission and the New
York Stock Exchange. Trustees and executive officers are required to
furnish the Company with copies of all Section 16 (a) forms they file.
Based on a review of the copies of such reports furnished to the Company
and written representations from the Company's trustees and executive
officers that no other reports were required, the Company believes that
during the 1998 fiscal year the Company's trustees and executive officers
complied with all Section 16(a) filing requirements applicable to them.
4
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF TRUSTEES
BOARD OF TRUSTEES
The Board of Trustees of the Company currently consists of seven trustees,
and the entire Board is nominated to be elected at the Annual Meeting pursuant
to which this Proxy Statement is being distributed. Election of trustees
requires the affirmative vote of a plurality of the votes cast by holders of the
outstanding Common Shares and Preferred Shares, considered as a single class,
and the election of the Preferred Trustee requires the affirmative vote of a
plurality of the votes cast by holders of the outstanding Preferred Shares,
voting separately as a single class. The seven nominees for trustee are E.
Robert Roskind, Richard J. Rouse, T. Wilson Eglin, Carl D. Glickman, Kevin W.
Lynch, John D. McGurk and Seth M. Zachary. All of the nominees are presently
serving as trustees of the Company. Mr. McGurk is the designee of Five Arrows,
who is serving as the Preferred Trustee and is subject to re-election by the
holders of Preferred Shares voting separately as a single class. Each nominee
has consented to being named in the Proxy Statement and to serve if elected. If
elected, each nominee is expected to serve until the Company's 2000 Annual
Meeting of Shareholders and until his successor is elected. Background
information relating to the nominees for election appears below.
THE ENCLOSED PROXY, IF PROPERLY COMPLETED, SIGNED, DATED AND RETURNED, AND
UNLESS AUTHORITY TO VOTE IS WITHHELD OR A CONTRARY VOTE IS INDICATED, WILL BE
VOTED FOR THE ELECTION OF THESE SEVEN NOMINEES. In the event any such nominee
becomes unavailable for election, votes will be cast, pursuant to authority
granted by the enclosed Proxy, for such substitute nominee as may be designated
by the Board of Trustees. All trustees serve for a term of one year and until
their successors are elected.
The following information relates to the nominees for election as trustees
of the Company:
<TABLE>
<CAPTION>
NAME BUSINESS EXPERIENCE
---- -------------------
<S> <C>
E. ROBERT ROSKIND.................... Mr. Roskind has served as the Chairman of the Board of
Age 54 Trustees and Co-Chief Executive Officer of the Company since
October 1993. He founded The LCP Group, L.P. ("LCP") in 1973
and has been its Chairman since 1976. LCP has acted as
general partner in limited partnerships in which the Company
has had prior dealings. Prior to founding LCP, Mr. Roskind
headed the net leasing financing area of Lehman Brothers
Inc. He is also a general partner of a variety of entities
which serve as the general partner of various partnerships
that hold net leased real properties or interest therein.
Mr. Roskind is a director of Berkshire Realty Company, Inc.,
Krupp Government Income Trust I and Krupp Government Income
Trust II.
RICHARD J. ROUSE..................... Mr. Rouse became the Vice Chairman of the Board of Trustees
Age 53 in April, 1996, has served as the Co-Chief Executive Officer
and a trustee of the Company since October 1993, and was the
President of the Company from October 1993 until April 1996.
Mr. Rouse was a managing director of LCP. He had been
associated with LCP since 1979 and had been engaged there in
all aspects of net lease finance, acquisition and
syndication and corporate financing transactions.
T. WILSON EGLIN...................... Mr. Eglin became the President of the Company in April 1996,
Age 34 has served as Chief Operating Officer of the Company since
October 1993, has been a trustee of the Company since May
1994, and was the Executive Vice President of the Company
from October 1993 until April 1996. Prior to his association
with the Company, Mr. Eglin had been associated with LCP
since 1987 and had been its Vice President -- Acquisitions
from 1990 to 1993.
</TABLE>
5
<PAGE> 7
<TABLE>
<CAPTION>
NAME BUSINESS EXPERIENCE
---- -------------------
<S> <C>
CARL D. GLICKMAN..................... Mr. Glickman has served as a trustee and the Chairman of the
Age 72 Executive Committee of the Board of Trustees of the Company
since May 1994 and as a member of the Audit Committee since
May 1994 and the Compensation Committee of the Board of
Trustees of the Company until May 1998. He has been
President of The Glickman Organization since 1953. He is on
the Board of Directors of Alliance Tire & Rubber Co., Ltd.,
Bear Stearns Companies, Inc., Kuala Healthcare, Inc., Infu-
Tech, Inc., Jerusalem Economic Corporation Ltd. and
OfficeMax Inc., as well as numerous private companies.
KEVIN W. LYNCH....................... Mr. Lynch has served as a trustee of the Company since May
Age 46 1996 and is a founder and principal of The Townsend Group,
an institutional real estate consulting firm founded in
1983. Prior to forming The Townsend Group, Mr. Lynch was a
Vice President for Stonehenge Capital Corporation. Mr. Lynch
has been involved in the commercial real estate business
since 1974, and is a director of First Industrial Realty
Trust.
JOHN D. MCGURK....................... Mr. McGurk became a trustee in January 1997 as the designee
Age 55 of Five Arrows Realty Securities L.L.C. ("Five Arrows") to
the Board of Trustees. He is the founder and President of
Rothschild Realty, Inc., the advisor to Five Arrows. Prior
to starting Rothschild Realty, Inc. in 1981, Mr. McGurk
served as a regional vice president for The Prudential
Insurance Company of America, where he oversaw its New York
City real estate loan portfolio, equity holdings, joint
ventures and projects under development. Mr. McGurk is a
member of the Urban Land Institute, Pension Real Estate
Association, Real Estate Board of New York and the National
Real Estate Association, and a member of the Trustee
Committee of the Caedmon School.
SETH M. ZACHARY...................... Mr. Zachary has served as a trustee and a member of the
Age 46 Audit Committee and Compensation Committee of the Board of
Trustees of the Company since November 1993. Since 1987, he
has been a partner in the law firm of Paul, Hastings,
Janofsky & Walker LLP, counsel to the Company.
</TABLE>
BOARD OF TRUSTEES AND COMMITTEES OF THE BOARD OF TRUSTEES
The Board of Trustees of the Company held five meetings during the fiscal
year ended December 31, 1998. All trustees serving as members of the Board of
Trustees, as constituted at the time of each meeting, attended all meetings. The
Board of Trustees has two standing committees: the Audit Committee and the
Compensation Committee. The Board of Trustees does not have a nominating
committee, and the usual functions of such a committee are performed by the
entire Board of Trustees.
Audit Committee. The principal functions of the Audit Committee include
making recommendations concerning the engagement of independent public
accountants, reviewing with the independent public accountants plans and results
of the audit engagement, approving professional services provided by the
independent public accountants, reviewing the independence of the independent
public accountants, considering the range of the audit, and reviewing the
adequacy of the Company's internal accounting controls. The Audit Committee's
current members are Messrs. Glickman and Lynch. The Audit Committee met once
during 1998 to discuss matters concerning 1998.
Compensation Committee. The principal functions of the Compensation
Committee are to determine the compensation for the Company's executive officers
and to administer and review the Company's incentive compensation plans. The
Compensation Committee, whose current members are Messrs. Lynch, McGurk and
Zachary, met twice during 1998.
6
<PAGE> 8
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In October 1996, the Company was granted an option by LCP, an affiliate of
Mr. Roskind, exercisable any time to acquire general partnership interests
currently owned by LCP in two limited partnerships, Net 1 L.P. and Net 2 L.P.
(collectively, the "Net Partnerships"), which own net leased office, industrial
and retail properties. Under the terms of the option, the Company, subject to
review of any such transaction by the independent members of its Board of
Trustees, may acquire the general partnership interests in either or both of the
Net Partnerships at their fair market value based upon a formula relating to
partnership cash flows, with the Company retaining the option of paying such
fair market value in securities of the Company, units representing interests in
partnerships controlled by the Company or cash (or a combination thereof).
In connection with the acquisition of certain properties, the Company
assumed an obligation to pay LCP an aggregate amount of $1,778,250 for rendering
services in connection with the original acquisition of certain properties in
1980 and 1981. These properties were acquired by the Company in 1996. Simple
interest is payable monthly from available net cash flow of the respective
original properties on the various unpaid principal portions of the fees, at
annual rates ranging from 12.25% to 19.00%. Monthly installment payments are
made to satisfy principal and current interest payments as well as any unpaid
accrued interest outstanding.
During 1998, the Company performed brokerage services for the Net
Partnerships and received $376,000 in related fees.
During 1998, the Company issued an aggregate 1,187,228 limited partnership
units to Messrs. Roskind and Rouse and an affiliate of Mr. Roskind in exchange
for their interests in certain partnerships and related contractual obligations.
During 1998, the Company issued an aggregate 131,000 common shares to
Messrs. Rouse and Eglin in exchange for notes aggregating $1,998,000 which
mature on February 14, 2003, bear interest at 7.6% per annum and are secured by
the common shares issued.
CERTAIN BUSINESS RELATIONSHIPS
Seth M. Zachary, who is presently serving as a member of the Board of
Trustees and is a nominee to serve as a trustee until the 2000 Annual Meeting of
Shareholders, is a partner of Paul, Hastings, Janofsky & Walker LLP, which is
the general counsel to the Company. The Company paid Paul, Hastings, Janofsky &
Walker LLP $1,248,636 for services during 1998. The Company intends to continue
to retain the services of Paul, Hastings, Janofsky & Walker LLP for general,
corporate and other matters.
7
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS
Summary of Cash and Certain Other Compensation. The following table sets
forth the summary compensation to the Chairman of the Board of Trustees (and
Co-Chief Executive Officer), and the four other most highly paid executive
officers of the Company for the calendar years 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL -----------------------------------
COMPENSATION AWARDS PAYOUTS
----------------- ----------------------- ---------
LONG
OTHER TERM ALL
ANNUAL RESTRICTED SECURITIES INCENTIVE OTHER
FISCAL COMPEN- SHARE UNDERLYING PLAN COMPEN-
NAME AND YEAR SALARY BONUS SATION AWARDS OPTIONS PAYOUTS SATION
PRINCIPAL POSITION ENDED ($) ($)(1) ($) ($) (#)(2) ($) ($)(3)
------------------ -------- ------- ------- ------- ---------- ---------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E. Robert Roskind............ 12/31/98 250,000 133,000 -- -- 100,000 -- 720
Chairman of the Board of 12/31/97 237,500 42,917 -- -- 51,310 -- 900
Trustees and Co-Chief 12/31/96 200,000 18,333 -- -- 85,400 -- 900
Executive Officer
Richard J. Rouse............. 12/31/98 175,000 95,500 -- -- 34,500 -- 720
Vice Chairman and Co- 12/31/97 136,250 25,273 -- -- 34,552 -- 900
Chief Executive Officer(4) 12/31/96 125,000 11,458 -- -- 76,600 -- 750
T. Wilson Eglin.............. 12/31/98 200,000 108,000 -- -- 34,500 -- 720
President and Chief 12/31/97 150,000 64,667 -- -- 111,466 -- 900
Operating Officer(5) 12/31/96 120,000 11,000 -- -- 81,000 -- 600
Patrick Carroll.............. 12/31/98 112,727 72,000 -- -- 50,000 -- 720
Chief Financial Officer
and Treasurer(6)
Stephen C. Hagen............. 12/31/98 120,000 54,000 -- -- 25,000 -- 720
Senior Vice President(7) 12/31/97 100,000 14,167 -- -- 10,000 -- 600
</TABLE>
- ---------------
(1) Bonus amounts include amounts contributed at the election of the Company
pursuant to the Company's plan established under Section 401 (k) of the
Internal Revenue Code of 1986, as amended, and year-end awards at the
discretion of the Compensation Committee of the Board of Trustees.
(2) Options to acquire common shares at exercise prices equal to the fair market
value on the grant dates.
(3) Amount represents the dollar value of life insurance premiums paid by the
Company during the applicable fiscal year with respect to the life of the
named executive officer.
(4) Mr. Rouse was elected Vice Chairman of the Company on April 1, 1996, and
until such date had served as President of the Company.
(5) Mr. Eglin was elected President and Chief Operating Officer of the Company
on April 1, 1996, and until such date had served as Executive Vice President
and Chief Operating Officer of the Company.
(6) Mr. Carroll became Chief Financial Officer of the Company on May 4, 1998 and
Treasurer effective January 1999.
(7) Mr. Hagen has been a Senior Vice President of the Company since January
1997.
Stock Options. The following table sets forth certain information
concerning share options granted during the fiscal year ended December 31, 1998
to each of the executive officers named in the Summary
8
<PAGE> 10
Compensation Table. Since inception, the Company has not granted any share
appreciation or dividend equivalent rights.
OPTION GRANTS IN FISCAL YEAR 1998
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF SHARE
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ------------------------------------------------------------------------------------ ---------------------
NUMBER OF PERCENTAGE(%) OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL 1998 ($/SHARE) DATE 5%($) 10%($)
---- ---------- ---------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
E. Robert Roskind......... 100,000 25.87% 15.25 01/02/03 421,329 931,028
Richard J. Rouse.......... 34,500 8.92% 15.25 01/02/03 145,359 321,205
T. Wilson Eglin........... 34,500 8.92% 15.25 01/02/03 145,359 321,205
Patrick Carroll........... 50,000 12.93% 14.375 05/04/03 198,577 438,804
Stephen C. Hagen.......... 25,000 6.47% 15.25 01/02/03 105,332 232,757
</TABLE>
Option Exercises/Value of Unexercised Options. The following table sets
forth certain information concerning the exercise of share options during the
fiscal year ended December 31, 1998 by each of the executive officers named in
the Summary Compensation Table, and the year-end value of unexercised options
held by such persons.
SHARE OPTION EXERCISES IN FISCAL YEAR 1998
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
ON VALUE --------------------------- ---------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
E. Robert Roskind........... -- -- 316,710 100,000 350,149 0
Richard J. Rouse............ -- -- 201,152 34,500 210,744 0
T. Wilson Eglin............. -- -- 253,716 34,500 198,958 0
Patrick Carroll............. -- -- 0 50,000 0 0
Stephen C. Hagen............ -- -- 35,000 0 2,375 0
</TABLE>
COMPENSATION OF TRUSTEES
Each non-employee trustee, with the exception of Mr. McGurk, receives an
annual fee of $20,000 for service as a trustee. In addition, such trustees
receive $1,000 for each meeting of the Board of Trustees or any committee
thereof attended by the trustee and reimbursement for expenses incurred in
attending such meetings. Pursuant to the 1994 Outside Director Stock Plan, as
amended, each non-employee trustee was required to receive not less than 50% of
such trustee's fees in Common Shares at an amount per share equal to 95% of the
fair market value of one Common Share as of the date of purchase. During 1998,
Messrs. Glickman, Lynch and Zachary elected to receive 100% of their fees in
Common Shares with respect to the five meetings which the Board of Trustees held
in 1998. Pursuant to the Company's 1998 Share Option Plan, non-employee
trustees, with the exception of Mr. McGurk, automatically are granted each year,
on January 1, non-qualified share options to purchase, after a one-year holding
period, 2,500 Common Shares at an exercise price equal to the fair market value
of the Common Shares on the date of the grant.
9
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1998, the Compensation Committee
consisted of Messrs. Lynch, McGurk and Zachary. None of such persons are or have
been executive officers of the Company. Mr. Zachary is a partner of Paul,
Hastings, Janofsky & Walker LLP, which is the general counsel to the Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF TRUSTEES
For the fiscal year ended December 31, 1998, all matters concerning
executive compensation for the Co-Chief Executive Officers and other executive
officers were considered and acted upon by the Compensation Committee of the
Board of Trustees.
Compensation Philosophy. The Company's compensation program for executive
officers is based upon a desire to achieve both its short- and long-term
business goals and strategies with a view to enhancing shareholder value. To
achieve its goals, the Company recognizes that it must adopt a compensation
program which will attract, retain and motivate qualified and experienced
executive officers and that its compensation program should align the financial
interests of its executive officers with those of its shareholders. In 1998, the
Company retained an independent third party, to assist in determining the
reasonableness and competitiveness of its compensation program for its executive
officers.
Compensation of Executive Officers (other than the Co-Chief Executive
Officers). In approving the annual salary for Messrs. Eglin, Carroll and Hagen,
the Board of Trustees considered several factors, including the scope of the
individual's responsibilities, the cost of living, the historical financial
results of the Company and the anticipated financial performance of the Company.
The compensation determination for each individual was largely subjective, did
not involve discussions with the individual executive officer regarding such
executive officer's compensation requirements and no specific weight was given
to any particular factor. In addition to their base salaries, these executive
officers of the Company receive discretionary bonuses tied to their individual
performances and the overall performance of the Company. Messrs. Eglin, Carroll
and Hagen are eligible to receive additional bonuses under the Company's
Incentive Bonus Plan tied to growth in the Company's operating cash flow per
share. The Board of Trustees has not established specific performance goals for
the payment of discretionary bonuses.
Compensation of Co-Chief Executive Officers. As with the other executive
officers, the Board of Trustees determined the annual salaries for the Co-Chief
Executive Officers based upon a number of factors and criteria, including the
historical financial results of the Company, the anticipated financial
performance of the Company and the requirements of such Co-Chief Executive
Officers. The compensation determination for each of the Co-Chief Executive
Officers was largely subjective, and no specific weight was given to any
particular factor. The Co-Chief Executive Officers of the Company are also
eligible to receive discretionary bonuses tied to their individual and overall
performances and to participate in the Company's Incentive Bonus Plan. The Board
of Trustees has not established specific performance goals for the payment of
discretionary bonuses.
1998 Share Option Plan. The Company believes that providing executive
officers with opportunities to acquire significant equity stakes in its growth
and prosperity through the grant of share options will enable the Company to
attract and retain qualified and experienced executive officers. Share options
represent a valuable portion of the compensation program for the Company's
executive officers. Share options may be awarded to executive officers at the
time they join the Company and periodically thereafter. The exercise price of
share options has been tied to the fair market value of the Company's Common
Shares on the date of the grant and the options will only have value as the
value of the Company's Common Shares increases. Grants of share options to
executive officers generally are made by the Compensation Committee upon the
recommendation of senior management and are based upon the level of each
executive officer's position with the Company, an evaluation of the executive
officer's past and expected future performance and the number of outstanding and
previously granted options.
10
<PAGE> 12
Incentive Bonus Plan. The Company maintains an Incentive Bonus Plan
pursuant to which participants in the Incentive Bonus Plan are entitled to
receive annual bonuses which are tied to growth in the Company's operating cash
flow per share. The Incentive Bonus Plan is administered by the Compensation
Committee on an annual basis. The bonus amount, which is shared among plan
participants, will not exceed an amount equal to 10% of the amount determined by
multiplying (a) the difference between (i) the Company's operating cash flow per
share for the year during which the incentive bonus amount is being determined
(the "Measurement Year") (before calculation of the bonus amount) and (ii)
$1.14, the Company's operating cash flow per share for the calendar year 1993
(calculated as if the Company had been in existence on January 1, 1993) by (b)
the weighted average number of Common Shares outstanding during the Measurement
Year. The Incentive Bonus Plan also provides that, notwithstanding the
foregoing, no incentive bonus will be paid in respect of any Measurement Year if
the Company's operating cash flow per share (before calculation of the bonus
amount) for the Measurement Year does not exceed the Company's operating cash
flow per share in the year prior to the Measurement Year. The participants in
the Incentive Bonus Plan currently include Messrs. Roskind, Rouse, Eglin,
Carroll and Hagen. No bonuses under the Incentive Bonus Plan were payable with
respect to the fiscal years ended December 31, 1998, December 31, 1997 and
December 31, 1996.
Other Bonuses. In addition to bonuses that may be payable to participants
under the Incentive Bonus Plan, the Compensation Committee may also approve the
payment of other bonuses to executive officers and employees of the Company
based on their contributions and performances.
Compensation Committee of the Board of
Trustees
Kevin W. Lynch
John D. McGurk
Seth M. Zachary
11
<PAGE> 13
PERFORMANCE GRAPH
The graph and table set forth below compare the cumulative total
shareholder return on the Company's Common Shares for the period of December 31,
1993 through December 31, 1998 with the NAREIT Equity REIT Total Return Index,
which includes all tax-qualified equity REITs listed on the New York Stock
Exchange, the American Stock Exchange and the NASDAQ National Market System, and
the S&P 500 Index for the same period. The graph and table assume an investment
of $100 in the Common Shares in each index on December 31, 1993 and the
reinvestment of all dividends.
THE PERIOD OF DECEMBER 31, 1993 THROUGH DECEMBER 31, 1998
<TABLE>
<CAPTION>
LEXINGTON CORPORATE NAREIT EQUITY REIT
PROPERTIES TRUST S&P 500 INDEX TOTAL RETURN INDEX
------------------- ------------- ------------------
<S> <C> <C> <C>
12/31/93 100.00 100.00 100.00
12/31/94 100.44 101.31 100.81
12/31/95 139.61 139.23 119.26
12/31/96 199.63 171.19 161.90
12/31/97 229.71 228.32 192.44
12/31/98 203.63 293.57 156.22
</TABLE>
FINANCIAL AND OTHER INFORMATION
Information required by this item is incorporated by reference to the
material appearing under the headings "Selected Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Financial Statements and Supplementary Data" in the Company's Form 10-K.
OTHER MATTERS
The Board of Trustees is not aware of any business to come before the
Annual Meeting other than the election of trustees. However, if any other
matters should properly come before the Annual Meeting, including matters
relating to the conduct of the Annual Meeting, it is intended that proxies in
the accompanying form will be voted in respect thereof in accordance with the
judgment of the person or persons voting the proxies.
12
<PAGE> 14
APPOINTMENT OF INDEPENDENT AUDITORS
Independent Public Accountants KPMG LLP was engaged to perform the annual
audit of the books of account of the Company for the calendar year ended
December 31, 1998. There are no affiliations between the Company and its
partners, associates or employees, other than as pertain to its engagement as
independent auditors for the Company in previous years. Representatives of KPMG
LLP are expected to be present at the Annual Meeting and will be given the
opportunity to make a statement if they so desire and to respond to appropriate
questions.
The Audit Committee of the Board of Trustees will submit its recommendation
with respect to the engagement of independent public accountants at the meeting
of the full Board of Trustees, which will take place during the Company's second
fiscal quarter. KPMG LLP has been the Company's independent public accountants
since 1993.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the Company. The
Company expects to retain ChaseMellon Shareholder Services, L.L.C., an outside
proxy solicitation firm, in connection with the Annual Meeting. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy material to the beneficial
owners of Common Shares. In addition to solicitations by mail, trustees,
officers and regular employees of the Company may solicit proxies personally or
by telegraph or telephone without additional compensation.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at the office of the Company located at
355 Lexington Avenue, New York, New York 10017, no later than December 22, 1999.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934, as amended.
13
<PAGE> 15
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
LEXINGTON CORPORATE PROPERTIES TRUST
The undersigned hereby appoints Patrick Carroll and Paul R. Wood proxies,
with power to act without the other and with power of substitution, and hereby
authorizes them to represent and vote, as designated on the other side, all the
shares of Lexington Corporate Properties Trust standing in the name of the
undersigned with all powers which the undersigned would possess if present at
the Annual Meeting of Shareholders of the Company to be held May 19, 1999 or any
adjournment thereof.
(Continued, and to be marked, dated and signed, on the other side)
-FOLD AND DETACH HERE-
<PAGE> 16
Please mark your votes as indicated in this example X
(1) to elect seven trustees to serve until the 2000 Annual Meeting of
Shareholders;
<TABLE>
<S> <C> <C>
FOR all nominees WITHHOLD Election of Trustees Include:
listed to the right AUTHORITY
(except as marked to the to vote for all nominees E. Robert Roskind, Richard J. Rouse, T. Wilson Eglin,
contrary) listed to the right Carl D. Glickman, John D. McGurk, Kevin W. Lynn, Seth M. Zachary
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
</TABLE>
(2) to transact such other business as may properly come before the 1999 Annual
Meeting.
Please sign exactly as your name appears
on this Proxy Card. When signing as
attorney, executor, administrator,
trustee, guardian or corporate or
partnership official, please give full
title as such and the full name of the
entity on behalf of whom you are
signing. If a partnership, please sign
in partnership name by authorized
person.
Dated: ___________________________, 1999
_______________________________________
Signature
_______________________________________
Signature
--FOLD AND DETACH HERE--
