SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-12
CBL & ASSOCIATES PROPERTIES, INC.
_________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14(a)-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) Amounts Previously Paid:
____________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________
3) Filing Party:
___________________________________________________
4) Date Filed:
___________________________________________________<PAGE>
March 31, 1997
Dear Shareholder:
You are cordially invited to attend the annual meeting of
shareholders which will be held at the Chattanooga Marriott at
the Convention Center, 2 Carter Plaza, Chattanooga, Tennessee, on
Thursday, May 1, 1997 at 11:00 a.m.(EDT).
The Notice and Proxy Statement on the following pages contain
details concerning the business to come before the meeting.
Management will report on current operations and there will be an
opportunity for discussion concerning the Company and its
activities. Please sign and return your proxy card in the
enclosed envelope to ensure that your shares will be represented
and voted at the meeting even if you cannot attend. You are
urged to sign and return the enclosed proxy card even if you plan
to attend the meeting.
I look forward to personally meeting all shareholders who
are able to attend.
Sincerely,
CHARLES B. LEBOVITZ
Chairman of the Board,
President and
Chief Executive Officer<PAGE>
CBL & ASSOCIATES PROPERTIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 1, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of CBL & Associates Properties, Inc., a Delaware corporation (the
"Company"), will be held at the Chattanooga Marriott at the
Convention Center, 2 Carter Plaza, Chattanooga, Tennessee 37402,
on Thursday, May 1, 1997 at 11:00 a.m. (EDT) for the following
purposes:
1. To re-elect two directors to serve for a term of three
years and until their respective successors are elected
and qualified;
2. To act upon a proposal to ratify the selection of Arthur
Andersen LLP as independent public accountants for the
fiscal year ending December 31, 1997; and
3. To consider and act upon any other matters which may
properly come before the meeting or any adjournment
thereof.
In accordance with the provisions of the Company's Bylaws,
the Board of Directors has fixed the close of business on March
18,1997, as the record date for the determination of the holders
of Common Stock entitled to notice of, and to vote at, the Annual
Meeting.
Your attention is directed to the accompanying Proxy
Statement.
Whether or not you plan to attend the meeting, we urge you
to sign, date and return the enclosed Proxy promptly in order to
ensure representation of your shares. An addressed envelope for
which no postage is required if mailed in the United States is
enclosed for that purpose. Returning your Proxy will not prevent
you from voting your shares at the meeting if you desire to do
so, as your Proxy is revocable at your option.
By Order of the Board of Directors
JOHN N. FOY
Secretary
Chattanooga, Tennessee
March 31, 1997
<PAGE>
PROXY STATEMENT
CBL & ASSOCIATES PROPERTIES, INC.
ONE PARK PLACE
6148 LEE HIGHWAY
CHATTANOOGA, TENNESSEE 37421
ANNUAL MEETING OF SHAREHOLDERS
MAY 1, 1997
PROXIES
The enclosed proxy is solicited by and on behalf of the
Board of Directors of CBL & Associates Properties, Inc., a
Delaware corporation (the "Company"), for use at the annual
meeting of shareholders (the "Annual Meeting") of the Company to
be held at the Chattanooga Marriott at the Convention Center, 2
Carter Plaza, Chattanooga, Tennessee, on Thursday, May 1, 1997,
at 11:00 a.m. (EDT) and at any and all postponements or
adjournments thereof. Any proxy given may be revoked at any time
before it is voted by filing with the Secretary of the Company an
instrument revoking it or a duly executed proxy bearing a later
date. All expenses of the solicitation of proxies for the Annual
Meeting, including the cost of mailing, will be borne by the
Company. In addition to solicitation by mail, officers and
regular employees of the Company may solicit proxies from
shareholders by telephone, telegram or personal interview and
will not receive additional compensation for such services. In
addition, the Company's regularly retained investment relations
firm, Corporate Communications, Inc., will, among other services
performed for the Company, assist in the solicitation of proxies.
The Company also intends to request persons holding stock in
their name or custody, or in the name of nominees, to send proxy
materials to their principals and request authority for the
execution of the proxies. The Company will reimburse such
persons for their expense in so doing.
The Company anticipates mailing proxy materials and the
Annual Report for the fiscal year ended December 31, 1996, to
shareholders of record as of March 18, 1997, on or about March
31, 1997.
VOTING SECURITIES
Only holders of record of the Company's Common Stock, par
value $.01 per share ("Common Stock"), at the close of business
on March 18, 1997, are entitled to vote on the matters to be
presented at the Annual Meeting. The number of shares of Common
Stock outstanding on such date and entitled to vote was
23,974,330. Each such share is entitled to one vote with
respect to such matters.
The presence in person or by proxy of holders of record of a
majority of the outstanding shares of Common Stock is required
for a quorum to transact business at the Annual Meeting, but if a
quorum should not be present, the Annual Meeting may be adjourned
from time to time until a quorum is obtained. The affirmative
vote of the holders of a plurality of the shares of the Common
Stock present or represented at the Annual Meeting is required
for the election of directors. The affirmative vote of the
holders of a majority of the shares of Common Stock present or
represented at the Annual Meeting is required for the ratification
of the selection of the independent public accountants.
Abstentions and broker non-votes (shares held by a broker or
nominee which are represented at the Annual Meeting, but with
respect to which such broker or nominee does not have
discretionary authority to vote on a particular proposal) will be
counted as present at the Annual Meeting for the purpose of
determining whether or not a quorum exists. Abstentions and
broker non-votes will generally not be counted for any other
purpose, except that abstentions with respect to any proposal,
other than the election of directors, will be treated as negative
votes.
Unless contrary instructions are indicated on the
accompanying Proxy, the shares represented thereby will be voted
in accordance with the recommendations of the Board of Directors.
ELECTION OF DIRECTORS
The Board of Directors currently consists of seven members
divided into three classes (having two, two and three members,
respectively) serving staggered three-year terms. Under the
Company's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") and Amended and Restated Bylaws
(the "Bylaws"), a majority of the Directors must be unaffiliated
("Independent Directors") with the Company and CBL & Associates,
Inc. and its affiliates ("CBL"). The Company succeeded to the
business of CBL in November 1993. Each year the term of office
of one class of directors expires.
<PAGE>
The Board of Directors intends to present for action at the
Annual Meeting the election of John N. Foy and William J. Poorvu,
whose present terms expire in 1997, to serve for a term of three
years and until their successors are duly elected and shall
qualify. Mr. Poorvu is one of the Company's four Independent
Directors.
Unless authority to vote for such directors is withheld, the
enclosed Proxy will be voted for such persons except that the
persons designated as proxies reserve discretion to cast their
votes for other persons in the unanticipated event that any of
such nominees is unable, or declines, to serve.
NOMINEES
Set forth below is information with respect to the nominees
for election.
<TABLE>
NAME AGE CURRENT POSITION(1)
<S> <C> <C>
John N. Foy 53 Director, Executive Vice
President - Finance, Chief
Financial Officer and
Secretary
William J. Poorvu 61 Director
</TABLE>
___________________
(1) The position shown represents the individual's position with
the Company and CBL & Associates Management, Inc., a
Delaware corporation (the "Management Company"), through which
the Company's property management and development activities
are conducted.
JOHN N. FOY has served as a Director and Executive Vice President
- - Finance, Chief Financial Officer and Secretary of the Company since
its inception and is a member of the Executive Committee of the Board
of Directors. Prior thereto, he served in a similar capacity with CBL.
Mr. Foy has been involved in the shopping center industry since 1969
when he joined the Lebovitz family's shopping center development
business. In 1970, he became affiliated with the shopping center
division of Arlen Realty & Development Corp. ("Arlen"), and, in 1978,
joined Charles Lebovitz in establishing CBL. Mr. Foy served as
Chairman of the Board of First Fidelity Savings Bank in Crossville,
Tennessee from December 1985 until April 1994. Since April 1994,
Mr. Foy has served as a member of the Advisory Board of the First
American National Bank of Chattanooga, Tennessee.
WILLIAM J. POORVU was initially elected as a Director of the
Company upon the completion of the Company's initial public
offering in November 1993 and is a member of the Compensation and
Audit Committees of the Board of Directors. Mr. Poorvu has,
since 1981, been a professor at Harvard Business School
specializing in real estate courses. Mr. Poorvu is also
managing partner in several private real estate companies
and has previously consulted for a number of real estate
concerns. He is Chairman of the Board of The Baupost Group,
Inc. and a trustee/director of mutual funds in the Massachusetts
Financial Services Group of Funds.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" THE ELECTION OF THE
TWO DIRECTORS NAMED ABOVE
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is information with respect to the directors
(in addition to John N. Foy and William J. Poorvu) and executive
officers (in addition to John N. Foy) of the Company.
<TABLE>
NAME TERM AGE CURRENT POSITION(1)
_____________ _______ ___ ____________________
<S> <C> <C> <C>
Charles B. Lebovitz 1999 60 Chairman of the Board
of Directors, President
and Chief Executive
Officer
Ben S. Landress - 69 Executive Vice President -
Management
Stephen D. Lebovitz 1998 36 Director, Executive Vice
President - Development
and Treasurer
Jay Wiston - 59 Executive Vice President -
Leasing
Ronald L. Fullam - 54 Senior Vice President -
Development
Ronald S. Gimple - 57 Senior Vice President and
and General Counsel
Michael I. Lebovitz - 33 Senior Vice President -
Mall Projects
Eric P. Snyder - 47 Senior Vice President and
Director of Corporate
Leasing
Augustus N. Stephas - 54 Senior Vice President -
Accounting and Controller
Claude M. Ballard 1999 67 Director
Leo Fields 1999 68 Director
Winston W. Walker 1999 53 Director
___________________
</TABLE>
* Indicates expiration of term as a director.
(1) The position shown represents the individual's position with
the Company and the Management Company.
CHARLES B. LEBOVITZ has served as Chairman of the Board,
President and Chief Executive Officer since the inception of
the Company and is a member of the Executive Committee of the
Board of Directors. Prior to the Company's formation, he served
in a similar capacity with CBL. Mr. Lebovitz has been involved
in shopping center development since 1961 when he joined his
family's development business. In 1970, he became affiliated
with Arlen where he served as President of Arlen's shopping center
division, and, in 1978, he founded CBL together with his
associates (the "Associates"), James Wolford, John Foy, Jay
Wiston, and Ben Landress. In addition to Mr. Lebovitz, Messrs.
Foy, Wiston and Landress currently serve as executive officers
of the Company. Mr. Lebovitz is an advisory director of First
Tennessee Bank, N.A., Chattanooga, Tennessee and a National Vice
Chairman of the United Jewish Appeal. Until May 1994, Mr. Lebovitz
served as a trustee and Vice President (Southern Division) of the
International Council of Shopping Centers ("ICSC"). Mr. Lebovitz
was elected to serve as the Chairman of ICSC from May 1996 to
May 1997.
BEN S. LANDRESS has served as Senior Vice President -
Management of the Company since September 1993. Prior thereto,
he served in a similar capacity with CBL. Effective January 1,
1997, Mr. Landress was promoted to Executive Vice President
Management. Mr. Landress directs the day-to-day management of
the Company's properties and is responsible for general corporat
e administration. Mr. Landress has been involved in the shopping
center business since 1961 when he joined the Lebovitz family's
development business. In 1970, he became affiliated with Arlen's
shopping center division, and, in 1978, joined Mr. Lebovitz as an
Associate in establishing CBL.
STEPHEN D. LEBOVITZ has served as a Director and Senior Vice
President - New England Office and Treasurer of the Company since
September 1993 and as Senior Vice President - Community Center
Development since May 1994. Effective January 1, 1997, Mr. Lebovitz
was promoted to Executive Vice President - Development. Mr.
Lebovitz joined CBL in 1988 as Vice President responsible for
establishing and directing CBL's New England office. Prior to
that time, Mr. Lebovitz was affiliated with Goldman, Sachs & Co.
from 1984 to 1986. He is a director of the Boston Jewish Family
and Children's Services and a former state director for the New
England states (Maine, Massachusetts, New Hampshire, Rhode Island
and Vermont) of the ICSC. Stephen Lebovitz is a son of Charles
Lebovitz.
JAY WISTON has served as Executive Vice President Leasing of
the Company since September 1993. Prior thereto, he served in a
similar capacity with CBL. Mr. Wiston is responsible for leasing
of the Company's properties. Mr. Wiston has been involved in the
shopping center industry since 1966 when he joined a specialty
retailer as Director of Real Estate. He became affiliated with
Arlen's shopping center division in 1968, and, in 1978, joined
Charles Lebovitz as an Associate in establishing CBL. He is a
Vice President Southeastern Region and an International Vice
President of the United Synagogue of Conservative Judaism.
RONALD L. FULLAM has served as Vice President - Development
of the Company since September 1993. Effective January 1, 1997,
Mr. Fullam was promoted to Senior Vice President - Development.
Mr. Fullam joined Arlen's shopping center development division as
a project manager in August 1977 and CBL as a Vice President upon
its formation in 1978. From July 1986 through October 1988, Mr.
Fullam was affiliated with another shopping center development
company, and, in October 1988, he rejoined CBL as a Vice President
of Development.
RONALD S. GIMPLE has served as Vice President - Development
since joining the Company in 1994. Effective January 1, 1997, he
was promoted to Senior Vice President and General Counsel. Prior
to joining the Company, Mr. Gimple served as a Vice President of
The Edward J. DeBartolo Corporation, from 1987 to 1994, and, prior
to 1987, Mr. Gimple served as General Counsel of Petrie Store
Corporation, Vice President and Real Estate Counsel of BATUS
Retail Group and Vice President and General Counsel of General
Growth Company.
MICHAEL I. LEBOVITZ has served as Vice President -
Development and as a project manager for the Company since
September 1993. Effective January 1, 1997, Mr. Lebovitz was
promoted to Senior Vice President - Mall Projects. Mr. Lebovitz
joined CBL in 1988 as a project manager for CoolSprings Galleria
in Nashville, Tennessee and was promoted to Vice President in 1993.
Prior to joining CBL, he was affiliated with Goldman, Sachs & Co.
from 1986 to 1988. He is a member of the United Jewish Appeal
Young Leadership Cabinet. Michael Lebovitz is a son of Charles
Lebovitz and a brother of Stephen Lebovitz.
ERIC P. SNYDER has served as Vice President and Director of
Corporate Leasing for the Company since September 1993.
Effective January 1, 1997, Mr. Snyder was promoted to Senior Vice
President. Mr. Snyder joined CBL as a project manager in 1978 and
was promoted to Vice President in 1984 and to Director of Corporate
Leasing in 1992. Prior to 1978, Mr. Snyder was a leasing agent
and project manager in Arlen's shopping center division.
AUGUSTUS N. STEPHAS has served as Vice President -
Accounting and Controller for the Company since September 1993.
Effective January 1, 1997, Mr. Stephas was promoted to Senior
Vice President Accounting and Controller. He joined CBL in July
1978 as Controller and was promoted to Vice President in 1984.
From 1970 to 1978, Mr. Stephas was affiliated with the shopping
center division of Arlen, first as Accountant and later as Assistant
Controller.
CLAUDE M. BALLARD, CRE, M.A.I. was elected as a Director of
the Company upon the completion of the Company's initial public
offering in November 1993 and is Chairman of the Compensation
Committee and a member of the Audit Committee of the Board of
Directors. Mr. Ballard joined Goldman, Sachs & Co. in 1981 as a
general partner and as of December 1988 became a limited partner
and senior consultant. Prior to joining Goldman, Sachs & Co.,
Mr. Ballard was a Senior Vice President in the real estate
division of the Prudential Insurance Company of America. He is
currently a director of Bedford Property Investors, Mutual Life
Insurance Company of New York, Taubman Centers, Inc., a shopping
center real estate investment trust, Greater New York Council,
Boy Scouts of America and Horizon Hotel Corp. Mr. Ballard also
served as Chairman of the Board of Rockefeller Center Properties,
Inc., a mortgage real estate investment trust, until December
1994, and as a director of American Building Maintenance
Industries until October 1994. Mr. Ballard currently serves as
Chairman of the Board of Directors of Merit Equity Partners, Inc.
LEO FIELDS was elected as a Director of the Company upon the
completion of the Company's initial public offering in November
1993 and is a member of the Compensation Committee and Chairman
of the Audit Committee of the Board of Directors. Mr. Fields has
been President of Weisberg & Fields, Inc., an investment advisory
company, since November 1991. From 1984 through 1991, Mr. Fields
directed Leo Fields Interests, a private investment firm. He was
affiliated with Zale Corporation from 1947 until his retirement
in 1984, serving, from 1981 to 1984, as Vice Chairman and a
member of Zale's Executive Committee. He is Vice Chairman of the
Institute for Social & Economic Policy in the Middle East at the
John F. Kennedy School of Government at Harvard University,
President of the Dallas Home for the Jewish Aged Endowment
Foundation and a trustee of the M. B. and Edna Zale Foundation.
WINSTON W. WALKER was elected as a Director of the Company
upon the completion of the Company's initial public offering in
November 1993 and is a member of the Executive and Compensation
Committees of the Board of Directors. Mr. Walker served as
President and Chief Executive Officer of Provident Life and
Accident Insurance Company of America ("Provident") from 1987
until October 1, 1993, and served in various other capacities
with Provident from 1974 to 1987. Mr. Walker is a director of
SunTrust Bank, Chattanooga, N.A. (formerly American National
Bank) and Olan Mills, Inc. of Chattanooga, Tennessee.
In addition to the executive officers named above, James L.
Wolford has served as Senior Executive Vice President
Development of the Company since September 1993 to January 15,
1997. Effective as of that date, Mr. Wolford retired as an
officer and employee of the Company.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors met eight times in 1996.
The Board of Directors has established standing Executive,
Audit and Compensation Committees. The Board of Directors has no
standing Nominating Committee. Each director attended more than
75% of the total number of Board meetings and meetings of Board
committees on which the director served during fiscal year 1996.
Executive Committee. The Executive Committee is composed of
Charles B. Lebovitz (Chairman), John N. Foy and Winston W.
Walker, who is an Independent Director. The Executive Committee
may exercise all the powers and authority of the Board of
Directors of the Company in the management of the business and
affairs of the Company as permitted by law except with respect to
(i) the declaration of dividends, (ii) issuance of stock, (iii)
amendment to the Company's Certificate of Incorporation or
Bylaws, (iv) filling vacancies on the Board of Directors, (v)
approval of borrowings in excess of $40,000,000 per transaction
or series of related transactions, (vi) hiring executive
officers, (vii) approval of acquisitions or dispositions of
property or assets in excess of $40,000,000 per transaction and
(viii) certain transactions between the Company and its directors
and officers and certain sales of real estate and reductions of
debt that produce disproportionate tax allocations to CBL
pursuant to the Company's Bylaws. The Executive Committee met
four times and took action by unanimous written consent eleven
times during 1996.
Audit Committee. The Audit Committee is composed of Leo
Fields (Chairman), Claude M. Ballard and William J. Poorvu, all
of whom are Independent Directors. The Audit Committee makes
recommendations concerning the engagement of independent public
accountants and the plans and results of the audit engagement,
approves professional services provided by the independent public
accountants, considers the range of audit and non-audit fees and
reviews the adequacy of the Company's internal accounting
controls. The Audit Committee met two times during 1996.
Compensation Committee. The Compensation Committee is
composed of the four Independent Directors, with Claude M.
Ballard serving as Chairman. The Compensation Committee reviews
and approves compensation programs generally and, specifically,
salaries, bonuses, stock awards and stock options for officers of
the Company of the level of vice president or higher. The
Compensation Committee met two times and took action by unanimous
written consent one time during 1996.
Advisory Committee. The Board of Directors has also
appointed an Advisory Committee consisting of Jay Wiston and Ben
S. Landress. The members of this committee participate in Board
meetings and are otherwise available to consult with and advise
the Board as requested. James L. Wolford served on the Advisory
Committee during 1996 and, on January 15, 1997, he retired as an
officer and employee of the Company and as a member of the
Advisory Committee.
COMPENSATION OF DIRECTORS
During 1996, each Independent Director received from the
Company an annual fee of $15,000. Effective January 1, 1997,
this annual fee was increased to $18,000. In addition to the
annual fee, each Independent Director receives a meeting fee of
$1,000 for each Board or Committee meeting attended (excluding
telephonic meetings) and reimbursements of expenses incurred in
attending meetings. Each Independent Director serving as a
member of the Executive Committee receives from the Company a
monthly fee of $500 in lieu of meeting fees for each Executive
Committee meeting.
Each Independent Director, on December 31 of each fiscal
year of the Company, automatically receives an annual grant of
options to purchase 500 shares of Common Stock having an exercise
price equal to 100% of the fair market value of the shares of
Common Stock at the date of grant of such option. The options
granted to the Independent Directors on December 31, 1996 have an
exercise price equal to $25.625 (based upon the average of the
high and low sales prices of the Common Stock on the New York
Stock Exchange ("NYSE") Composite Tape on December 31, 1996).
Each holder of a director option granted pursuant to this
arrangement also has the same rights as other holders of options
in the event of a change in control. By Resolution dated April
30, 1996, the Compensation Committee adopted certain additional
terms for options granted to the Independent Directors. Pursuant
to the Resolution, options granted to the Independent Directors
(i) shall have a term of 10 years from date of grant, (ii) are
100% vested upon grant, (iii) are nonforfeitable except upon the
Independent Director's conviction for any criminal activity
involving the Company or if non-exercised within one year
following the date the Independent Director ceases to be a
director of the Company, and (iv) are non-transferrable. In
addition, any person who becomes an Independent Director will
receive an initial grant of 500 shares of Common Stock upon
joining the Board of Directors. The transfer of such shares is
restricted during the Independent Director's term and for
one year thereafter pursuant to the Stock Incentive Plan.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth information available to the
Company as of March 15, 1997, with respect to the ownership of
Common Stock by (i) each person known to the Company to be the
beneficial owner of more than 5% of the outstanding Common Stock,
(ii) each director of the Company, (iii) each executive officer
of the Company and (iv) all directors and executive officers as a
group. Except as otherwise indicated, each person named below
has sole investment and voting power with respect to the
securities shown.<PAGE>
<TABLE>
Rule Fully-
Number 13d-3 Diluted
of Percentage Percentage
Shares (1) (2)
-------- -------- ---------
<S> <C> <C> <C>
Cohen & Steers Capital
Management, Inc. (3).......... 2,280,300 9.5% 6.9%
757 Third Avenue
New York, New York 10017
The Equitable Companies
Incorporated(4)............... 1,310,600 5.5 3.9
787 Seventh Avenue
New York, New York 10019
FMR Corp.(5)................... 2,781,000 11.6 8.3
82 Devonshire Street
Boston, Massachesetts 02109
Wellington Management
Company, LLP(6)............... 1,050,400 4.4 3.1
75 State Street
Boston, Massachusetts 02109
Vanguard/Wellesley Income
Fund, Inc.(7)................. 1,050,400 4.4 3.1
P.O. Box 2600
Valley Forge, Pennsylvania 19482-2600
CBL & Associates, Inc.(8)...... 8,628,843 27.7 21.3
Charles B. Lebovitz(9)......... 9,407,558 29.5 22.8
James L. Wolford(10)........... 611,624 2.5 1.8
John N. Foy(11)................ 250,787 1.0 *
Jay Wiston(12)................. 111,853 * *
Ben S. Landress(13)............ 113,771 * *
Stephen D. Lebovitz(14)........ 294,509 1.2 *
Ronald L. Fullam(15)........... 10,800 * *
Ronald S. Gimple(16)........... 9,338 * *
Michael I. Lebovitz(17)........ 141,411 * *
Eric P. Snyder(18)............. 81,810 * *
Augustus N. Stephas(19)........ 39,565 * *
Claude M. Ballard(20).......... 8,000 * *
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Leo Fields(21)................. 56,000 * *
c/o Weisberg & Fields, Inc.
Preston Commons East
8115 Preston Road
Dallas, Texas 75225
William J. Poorvu(20).......... 2,060 * *
c/o Investent Resource Group
44 Brattle Street
Cambridge, Massachusetts 02138
Winston W. Walker(20).......... 4,400 * *
4 Bartram Road
Lookout Mountain, Tennessee 37350
All executive officers and
directors as a group
15 persons).................... 11,143,486 33.26 33.38
</TABLE>
_________________
* Less than 1%
<PAGE>
(1) The Company conducts all of its business activities through
CBL & Associates Limited Partnership, a Delaware limited
partnership (the "Operating Partnership"). Pursuant to the
amended and restated partnership agreement of the Operating
Partnership (the "Partnership Agreement"), each of the
limited partners of the Operating Partnership, which include
CBL and certain of the executive officers named in this Proxy
Statement, has the right ("CBL Rights") to (i) exchange all
or a portion of its partnership interest in the Operating
Partnership for shares of Common Stock (based on the trading
price of the Common Stock at the time of exchange) until it
owns up to the applicable ownership limit ("Ownership Limit")
as prescribed in the Company's Certificate of Incorporation
and (ii) subsequently, after November 3, 1996, sell to the
Company part or all of its remaining partnership interest in
the Operating Partnership in exchange for shares of Common
Stock or their cash equivalent (based on the trading price of
the Common Stock), at the Company's election. See "Certain
Relationships and Transactions." Under the terms of Rule
13d-3 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), shares of Common Stock that
may be acquired within 60 days are deemed outstanding for
purposes of computing the percentage of Common Stock owned by
a shareholder. Therefore, percentage ownership of the Common
Stock is computed based on the sum of (i) 23,974,330 shares
of Common Stock actually outstanding as of March 15, 1997,
(ii) shares of Common Stock that may be acquired upon
exercise of CBL Rights by the individual or entity whose
percentage of share ownership is being computed (but not
taking account of the exercise of CBL Rights by any other
person or entity) and (iii) shares of Common Stock that may
be acquired within 60 days of March 15, 1997 upon the
exercise of outstanding options. Amounts shown were
determined without regard to applicable Ownership Limits.
(2) Calculated based on 23,974,330 shares of Common Stock
outstanding and assuming full exercise of all CBL Rights by
all limited partners of the Operating Partnership (without
regard to applicable Ownership Limits) for an aggregate of
33,382,335 shares of Common Stock. Calculation does
not include 1,291,050 shares of Common Stock subject to
outstanding stock options other than, with respect to each
person whose fully-diluted percentage is being computed,
shares which may be acquired within 60 days upon the exercise
of outstanding options.
(3) In a Schedule 13G/A filed on January 28, 1997 by Cohen and
Steers Capital Management Inc. ("CSCM"), CSCM reported that
as of December 31, 1996 it beneficially owned 2,280,300
shares of Common Stock, or 9.51% of the total shares
outstanding as of March 15, 1997, on behalf of various
investment advisory clients. CSCM reported that it possesses
(i) sole dispositive power with respect to 2,280,300 shares
of Common Stock and (ii) sole voting power with respect to
1,942,900 shares of Common Stock. The Schedule 13G/A also
states that CSCM has not acquired the Company's shares for
the purpose of changing or influencing the control of the
Company.
(4) In a Schedule 13G/A filed on February 13, 1997 by The
Equitable Companies Incorporated and certain of its
subsidiaries (collectively, the "Equitable Entities"), the
Equitable Entities reported that as of December 31, 1996 they
collectively beneficially owned 1,310,600 shares of Common
Stock, or 5.5% of the total shares outstanding as of
March 15, 1997. The Equitable Entities reported that the
1,310,600 shares of Common Stock were held on behalf of
various client discretionary investment advisory and were
acquired solely for investment purposes. The Equitable
Entities reported that they possess (i) sole dispositive
power with respect to 1,310,600 shares of Common Stock and
(ii) sole voting power with respect to 1,306,200 shares of
Common Stock. The Schedule 13G/A also states that the
Equitable Entities have not acquired the Company's shares
for the purpose of changing or influencing the control of the
Company.
(5) In a Schedule 13G/A filed on February 10, 1997 by FMR Corp.
and certain of its subsidiaries ("FMR Entities"), the FMR
Entities reported that as of December 31, 1996 they
collectively beneficially owned 2,781,000 shares of Common
Stock, or 11.6% of the total shares outstanding as of March
15, 1997, on behalf of various investment advisory clients,
none of whom beneficially owns more than 5% of the
outstanding shares of Common Stock. The FMR Entities
reported that they possess (i) sole dispositive power with
respect to 2,781,000 shares of Common Stock and (ii) sole
voting power with respect to 170,600 shares of Common Stock.
The Schedule 13G/A also states that the FMR Entities have not
acquired the Company's shares for the purpose of changing or
influencing the control of the Company.
(6) In a Schedule 13G filed on February 13, 1997 by Wellington
Management Company, LLC ("Wellington"), Wellington reported
that as of December 31, 1996 it beneficially owned 1,050,400
shares of Common Stock, or 4.4% of the total shares
outstanding as of March 15, 1997, on behalf of various
investment advisory clients. Wellington reported that it
possesses shared dispositive power with respect of 1,050,400
shares of Common Stock. The Schedule 13G also states that
Wellington has not acquired the Company's shares for the
purpose of changing or influencing the control of the
Company.
(7) In a Schedule 13G filed on February 4, 1997 by Vanguard/
Wellesley Income Fund, Inc. ("Vanguard"), Vanguard reported
that as of December 31, 1996 it beneficially owned 1,050,400
shares of Common Stock, or 4.4% of the total shares
outstanding as of March 15, 1997. Vanguard reported that it
possesses (i) shared dispositive power with respect to
1,050,400 shares of Common Stock and (ii) sole voting power
with respect to 1,050,400 shares of Common Stock. The
Schedule 13G states that Vanguard has not acquired the
Company's shares for the present intention of acquiring
control of the Company.
(8) Includes (i) 1,426,744 shares of Common Stock owned directly,
(ii) 7,104,733 shares of Common Stock which may be
acquired upon the exercise of CBL Rights and (iii) 97,366
shares of Common Stock which may be acquired by four entities
controlled by CBL & Associates, Inc. (CBL Employees
Partnership/Conway, Foothills Plaza Partnership, Girvin Road
Partnership and Warehouse Partnership) upon the exercise of
CBL Rights.
(9) Includes (i) 13,655 shares of Common Stock owned directly,
(ii) 2,241 shares owned by Mr. Lebovitz's wife, 8,121 shares
held in trusts for the benefit of his step-daughter and
grandchildren (of which Mr. Lebovitz disclaims beneficial
ownership) and 101,600 shares which may by acquired upon the
exercise of CBL Rights and held in trusts for the benefit of
Mr. Lebovitz and his sister, (iii) 352,903 shares of Common
Stock which may be acquired upon the exercise of CBL Rights,
(iv) 36,000 shares of Common Stock subject to options granted
under the Stock Incentive Plan ( as defined herein) which
became exercisable with respect to such shares on May 9, and
May 10, 1996, and (v) 36,000 shares of Common Stock subject to
options granted under the Stock Incentive Plan which become
exercisable with respect to such shares within sixty days of
March 15, 1997. In addition, by virtue of Mr. Lebovitz's
control of CBL & Associates, Inc., he may be deemed to own
beneficially the shares of Common Stock beneficially owned by
such entity and, by virtue of his control of College Station
Associates, an entity owning 228,194 shares of Common Stock
which may be acquired upon the exercise of CBL Rights, he may
be deemed to own beneficially the shares of Common Stock
beneficially owned by such entity.
(10)Includes (i) 1,099 shares owned directly, (ii) 4,866 shares
held in trusts for the benefit of Mr. Wolford's children and
4,368 shares held by the Wolford Family Foundation, Inc.,
(iii)582,091 shares of Common Stock which may be acquired
upon the exercise of CBL Rights, and (iv) 19,200 shares of
Common Stock subject to options granted under the Stock
Incentive Plan which became exercisable with respect to such
shares on May 9 and May 10, 1996. Mr. Wolford retired as an
officer and employee of the Company effective January 15,
1997.
(11)Includes (i) 23,146 shares of Common Stock owned directly,
(ii) 189,241 shares of Common Stock which may be acquired
upon the exercise of CBL Rights, (iii) 19,200 shares of
Common Stock subject to options granted under the Stock
Incentive Plan which became exercisable with respect to such
shares on May 9 and May 10, 1996, and (iv) 19,200 shares of
Common Stock subject to options granted under the Stock
Incentive Plan which become exercisable with respect to such
shares within sixty days of March 15, 1997.
(12)Includes (i) 17,876 shares owned directly, (ii) 500 shares
held in a trust for the benefit of Mr. Wiston's son, (iii)
74,277 shares of Common Stock which may be acquired upon the
exercise of CBL Rights, and (iv) 19,200 shares of Common
Stock subject to options granted under the Stock Incentive
Plan which become exercisable with respect to such shares
within sixty days of March 15, 1997.
(13)Includes (i) 5,131 shares owned directly, (ii) 10,000 shares
owned by Mr. Landress' wife, (iii) 60,240 shares of Common
Stock which may be acquired upon the exercise of CBL Rights,
(iv) 19,200 shares of Common Stock subject to options granted
under the Stock Incentive Plan which became exercisable with
respect to such shares on May 9 and May 10, 1996, and (v)
19,200 shares of Common Stock subject to options granted
under the Stock Incentive Plan which become exercisable with
respect to such shares within sixty days of March 15, 1997.
(14)Includes (i) 17,173 shares owned directly, (ii) 238,936
shares of Common Stock which may be acquired upon the
exercise of CBL Rights, (iii) 19,200 shares of Common Stock
subject to options granted under the Stock Incentive Plan
which became exercisable with respect to such shares on
May 9 and May 10, 1996, and (iv) 19,200 shares of Common
Stock subject to options granted under the Stock Incentive
Plan which become exercisable with respect to such shares
within sixty days of March 15, 1997.
(15)Includes 10,800 shares of Common Stock subject to options
granted under the Stock Incentive Plan which become
exercisable with respect to such shares within sixty days of
March 15, 1997.
(16)Includes (i) 138 shares of Common Stock owned by Mr. Gimple's
wife, and (ii) 9,200 shares of Common Stock subject to
options granted under the Stock Incentive Plan which become
exercisable with respect to such shares within sixty days of
March 15, 1997.
(17)Includes (i) 4,160 shares of Common Stock owned directly,
(ii) 538 shares of Common Stock owned by Mr. Lebovitz' wife,
(iii) 115,113 shares of Common Stock which may be acquired
upon the exercise of CBL Rights, (iv) 10,800 shares of
Common Stock subject to options granted under the Stock
Incentive Plan which became exercisable with respect to such
shares on May 9 and May 10, 1996, and (v) 10,800 shares of
Common Stock subject to options granted under the Stock
Incentive Plan which become exercisable with respect to such
shares within sixty days of March 15, 1997.
(18)Includes (i) 3,523 shares of Common Stock owned directly,
(ii) 4,943 shares of Common Stock owned by Mr. Snyder's wife
and 3,305 shares of Common Stock owned by Mr. Snyder's
children, (iii) 48,439 shares of Common Stock which may be
acquired upon the exercise of CBL Rights, (iv) 10,800 shares
of Common Stock subject to options granted under the Stock
Incentive Plan which became exercisable with respect to such
shares on May 9 and May 10, 1996, and (v) 10,800 shares of
Common Stock subject to options granted under the Stock
Incentive Plan which become exercisable with respect to such
shares within sixty days of March 15, 1997.
(19)Includes (i) 1,095 shares of Common Stock owned directly,
(ii) 27,670 shares of Common Stock which may be acquired upon
the exercise of CBL Rights, and (iii) 10,800 shares of Common
Stock subject to options granted under the Stock Incentive
Plan wich become exercisable with respect to such shares
within sixty days of March 15, 1997.
(20)Includes 1,500 shares of Common Stock subject to immediately
exercisable stock options granted to each Independent
Director on each of December 31, 1994 (500), December 31,
1995 (500) and December 31, 1996 (500) pursuant to the Stock
Incentive Plan. See "Stock Incentive Plan".
(21)Includes (i) 18,000 shares of Common Stock owned by a family
limited partnership created by Mr. Fields and his wife on
January 1, 1997 and in which Mr. Fields serves as a general
partner, (ii) 37,500 shares of Common Stock held by members
of Mr. Fields' family, with respect to which Mr. Fields acts
as investment adviser and of which Mr. Fields disclaims
beneficial ownership, and (iii) 500 shares of Common Stock
subject to immediately exercisable stock options granted
under the Stock Incentive Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company believes that there has been full compliance
with the Section 16(a) filing requirements under the Exchange
Act applicable to its officers, directors and greater than 10%
beneficial owners, except that five executive officers (Ronald
L. Fullam, Ronald S. Gimple, Michael I. Lebovitz, Eric P. Snyder
and Augustus N. Stephas) failed to timely report their initial
beneficial ownership of the Company's securities upon being
promoted to executive officer positions on January 1, 1997.
These filings were subsequently made.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding the
compensation of the Company's Chief Executive Officer and each of
the other five executive officers (these individuals being
referred to herein as the "named executive officers" which group
includes the four most highly compensated executive officers) for
the fiscal year ended December 31, 1996 and for the fiscal years
ending December 31, 1995 and 1994. The table also includes
information regarding the compensation of two additional officers
(Eric P. Snyder and Augustus N. Stephas) who were not executive
officers at the end of 1996 but for whom disclosure would have
been provided had they been executive officers at the end of
1996.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
---------------------------------- ----------------------- -------
Name and Other Restricted Securities
Name and Annual Stock Underlying LTIP All
Principal Compensation Awards(s) Options Payouts Other
Position(2) Year Salary($) Bonus($) ($) ($)(3) (#) ($) Compensation
- ---------------------- ------- --------- ---------- ---------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles B. Lebovitz, 1996 415,800 -- -- 75,000 60,000 -- 7,434(4)
Chairman of the 1995 385,000 -- -- 75,011 60,000 -- 9,426(5)
Board, President 1994 385,000 -- -- 65,001 60,000 -- 7,120(6)
and Chief Executive
Officer
- ----------------------------------------------------------------------------------------------------------------------
James L. Wolford, 1996 291,600 25,000 25,002(7) -- 32,000 -- 7,434(4)
Senior Executive 1995 270,000 -- 90,023(8) -- 32,000 -- 6,444(9)
Vice President -- 1994 250,000 -- 34,996(11) -- 32,000 -- 4,635(12)
Development(10)
- -----------------------------------------------------------------------------------------------------------------------
John N. Foy, 1996 268,272 -- -- 75,000 32,000 -- 7,434(4)
Director, Executive 1995 248,400 -- -- 75,004 32,000 -- 6,444(9)
Vice President -- 1994 230,000 -- -- 50,008 32,000 -- 4,635(12)
Finance, Chief
Financial Officer
and Secretary
- -----------------------------------------------------------------------------------------------------------------------
Jay Wiston, 1996 268,272 12,500 -- 57,538 32,000 -- 7,434(4)
Executive Vice 1995 248,400 10,000 10,002(13) 29,992 32,000 -- 6,624(14)
President -- 1994 230,000 12,500 -- 12,497 32,000 -- 4,635(12)
Leasing
- -----------------------------------------------------------------------------------------------------------------------
Ben S. Landress, 1996 186,624 -- -- 25,008 32,000 -- 7,684(15)
Executive Vice 1995 172,800 -- -- 20,003 32,000 -- 6,570(16)
President -- 1994 160,000 -- -- 20,003 32,000 -- 4,635(12)
Management
- -----------------------------------------------------------------------------------------------------------------------
Stephen D. Lebovitz, 1996 186,624 50,000 -- 100,009 32,000 -- 4,452(17)
Director, Executive 1995 172,800 -- -- 60,001 32,000 -- 6,444(9)
Vice President -- 1994 160,000 -- -- 59,991 32,000 -- 4,635(12)
Development and
Treasurer
- -----------------------------------------------------------------------------------------------------------------------
Eric P. Snyder, 1996 236,933 -- 40,446(18) -- 18,000 -- 5,730(19)
Senior Vice President 1995 223,825 -- 20,008(20) -- 18,000 -- 6,335(21)
and Director of 1994 214,925 20,000 -- -- 18,000 -- 6,027(22)
Corporate Leasing
- -----------------------------------------------------------------------------------------------------------------------
Augustus N. Stephas, 1996 254,225 25,000 -- -- 18,000 -- 5,730(19)
Senior Vice 1995 232,400 25,000 -- -- 18,000 -- 6,335(21)
President -- 1994 218,125 20,000 -- 10,001 18,000 -- 6,027(22)
Accounting and
Controller
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
_______________________
(1) All amounts shown represent compensation paid to the named
executive officers and to Mr. Snyder and Mr. Stephas by the
Management Company.
(2) The position shown represents the individual's position with
the Company and the Management Company.
(3) Amounts shown are based upon the closing price of the Common
Stock on the NYSE as of the date of grant of the restricted
stock awards. As of December 31, 1994, 11,678 shares of
restricted stock with a value as of December 31, 1996 of
$302,168 were outstanding and were held as follows: (I)
Charles Lebovitz 3,490 shares with a value of $90,304; (ii)
John Foy 2,685 shares with a value of $69,474; (iii) Jay
Wiston 671 shares with a value of $17,362; (iv) Ben Landress
1,074 shares with a value of $27,790; (v) Stephen Lebovitz
3,221 shares with a value of $83,343; and (vi) Augustus
Stephas 537 shares with a value of $13,895. The 11,678
shares of restricted stock held by the above stated executive
officers as of December 31, 1994 vested on January 1, 1997,
except for the shares held by Mr. Wiston, which vested on
January 1, 1996. As of December 31, 1995, an additional
12,594 shares of restricted stock with a value as of December
31, 1996 of $325,870 were outstanding and were held as
follows: (i) Charles Lebovitz - 3,615 shares with a value of
$93,538; (ii) John Foy - 3,705 shares with a value of
$95,867; (iii) Jay Wiston - 1,472 shares with a value of
$38,088; (iv) Ben Landress - 964 shares with a value of
$24,944; and (v) Stephen Lebovitz - 2,838 share with a value
of $73,433. The additional 12,594 shares of restricted
stock held by the above stated executive officers as of
December 31, 1995 will vest on November 7, 1997, except for
(i) the shares held by Mr. Wiston, which vested on January 1,
1997,(ii) 2,500 of the shares held by Mr. Foy, which vested
on January 9, 1997, (iii) 506 of the shares held by Stephen
Lebovitz, which will vest on May 9, 1997 and (iv) 1,850 of
the shares held by Stephen Lebovitz, which will vest on
December 15, 1997. As of December 31, 1996, 13,722 shares of
restricted stock with a value as of December 31, 1996 of
$355,057 were outstanding and were held as follows: (i)
Charles Lebovitz - 3,125 shares with a value of $80,859; (ii)
John Foy - 3,062 shares with a value of $79,229; (iii) Jay
Wiston - 2,404 shares with a value of $62,204; (iv) Ben
Landress - 1,042 shares with a value of $29,962; and (v)
Stephen Lebovitz - 4,089 shares with a value of $105,803.
The additional 13,722 shares of restricted stock held by the
above stated executive officers as of December 31, 1996 will
vest on January 1, 1999, except for (i) the shares held by
Mr. Wiston which vested on February 1, 1997, (ii) the shares
held by Mr. Landress which vested on January 1, 1997 and
(iii) 442 of the shares held by Stephen Lebovitz which will
vest on June 26, 1998. During the vesting period, dividends
will be paid on all outstanding shares of restricted stock.
All of the shares of restricted stock were issued pursuant to
the Stock Incentive Plan.
(4) For fiscal year 1996, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $3,684 and matching contributions by the Management
Company under the Management Company's 401(k) Plan, as
defined herein, in the amount of $3,750.
(5) For fiscal year 1995, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $5,856 and matching contributions by the Management
Company under the Management Company's 401(k) Plan in the
amount of $3,570.
(6) For fiscal year 1994, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $3,550 and matching contributions by the Management
Company under the Management Company's 401(k) Plan in the
amount of $3,570.
(7) Represents an award of 1,099 shares of unrestricted Common
Stock granted to Mr. Wolford during fiscal year 1996 but
actual date of receipt was January 1, 1997. Amount shown is
based upon the closing price of the Common Stock on the NYSE
as of the date of grant.
(8) Represents an award of 4,471 shares of unrestricted Common
Stock granted to Mr. Wolford during fiscal year 1995. Amount
shown is based upon the closing price of the Common Stock on
the NYSE as of the date of grant.
(9) For fiscal year 1995, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $2,874 and matching contributions by the Management
Company under the Management Company's 401(k) Plan in the
amount of $3,570.
(10)Effective January 15, 1997, Mr. Wolford retired as an officer
and employee of the Company.
(11)Represents an award of 1,879 shares of unrestricted Common
Stock granted to Mr. Wolford during fiscal year 1994. Amount
shown is based upon the closing price of the Common Stock on
the NYSE as of the date of grant.
(12)For fiscal year 1994, amounts shown represent term life
insurance premiums paid by the Management Company in the
amount of $1,065 and matching contributions by the Management
Company under the Management Company's 401(k) Plan in the
amount of $3,570.
(13)Represents an award of 482 shares of unrestricted Common
Stock granted to Mr. Wiston during fiscal year 1995. Amount
shown is based upon the closing price of the Common Stock on
the NYSE as of the date of grant.
(14)For fiscal year 1995, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $2,874 and matching contributions by the Management
Company under the Management Company's 401(k) in the amount
of $3,750.
(15)For fiscal year 1996, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $3,684 and matching contributions by the Management
Company under the Management Company's 401(k) Profit Sharing
Plan in the amount of $4,000.
(16)For fiscal year 1995, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $3,000 and matching contributions by the Management
Company under the Management Company's 401(k) Profit Sharing
Plan in the amount of $3,570.
(17)For fiscal year 1996, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $702 and matching contributions by the Management
Company under the Management Company's 401(k) Profit Sharing
Plan in the amount of $3,750.
(18)Represents awards of 898 and 834 shares of unrestricted
Common Stock granted to Mr. Snyder during fiscal year 1996
but actual date of receipt was January 1, 1997. Amount shown
is based upon the closing price of the Common Stock on the
NYSE as of the date of grant.
(19)For fiscal year 1996, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $1,980 and matching contributions by the Management
Company under the Management Company's 401(k) Profit Sharing
Plan in the amount of $3,750.
(20)Represents an award of 982 shares of unrestricted Common
Stock granted to Mr. Snyder during fiscal year 1995. Amount
shown is based upon the closing price of the Common Stock on
the NYSE as of the date of grant.
(21)For fiscal year 1995, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $2,585 and matching contributions by the Management
Company under the Management Company's 401(k) Profit Sharing
Plan in the amount of $3,750.
(22)For fiscal year 1994, amount shown represents term life
insurance premiums paid by the Management Company in the
amount of $2,457 and matching contributions by the Management
Company under the Management Company's 401(k) Profit Sharing
Plan in the amount of $3,750.
<PAGE>
The following table sets forth information regarding grants
of stock options made during fiscal year 1996 to each of the
named executive officers and the two individuals referred to
above for whom disclosure would have been provided had the
individuals been executive officers at the end of 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
Assumed Annual Rates of
Stock Price Appreciation For
Individual Grants Option Term(4)
- ---------------------- ----------------------------
Number of % of Total
Securities Options Executive
Underlying Granted to or
Options Employees Base
Granted in Fiscal Price Expiration
Name (#)(1) Year(2) ($/Sh)(3) Date 5% 10%
- ---------------------- ---------- ------------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Charles B. Lebovitz 60,000 11.34% 20.50 04/30/06 $ 773,540 $1,860,303
James L. Wolford(5) 32,000 5.52 20.50 04/30/06 412,555 1,045,495
John N. Foy 32,000 5.52 20.50 04/30/06 412,555 1,045,495
Jay Wiston 32,000 5.52 20.50 04/30/06 412,555 1,045,495
Ben S. Landress 32,000 5.52 20.50 04/30/06 412,555 1,045,495
Stephen D. Lebovitz 32,000 5.52 20.50 04/30/06 412,555 1,045,495
Eric P. Snyder 18,000 3.1 20.50 04/30/06 232,062 588,091
Augustus N. Stephas 18,000 3.1 20.50 04/30/06 232,062 588,091
</TABLE>
______________________
(1) All options granted to the named executive officers and to
Mr. Snyder and Mr. Stephas were granted pursuant to the Stock
Incentive Plan on April 30, 1996 and become exercisable in
five equal annual installments beginning April 30, 1997.
(2) Percentages listed are based on options to purchase a total
of 580,000 shares of Common Stock granted by the Company to
certain of its officers and employees during fiscal year
1996. Calculations do not include options to purchase an
aggregate of 2,000 shares of Common Stock granted to the
Independent Directors in fiscal year 1996 pursuant to the
Stock Incentive Plan.
(3) The exercise price is generally payable in cash or, in
certain circumstances by the surrender, at the fair market
value on the date on which the option is exercised, of shares
of Common Stock.
(4) Potential realizable value is calculated based on an
assumption that the fair market value of the Common Stock
appreciates at the annual rates shown (5% and 10%),
compounded annually, from the date of grant until the end of
the option term (10 years). The 5% and 10% assumed rates are
mandated by the Securities and Exchange Commission for
purposes of calculating realizable value and do not represent
the Company's estimate or projection of future stock prices.
(5) Mr. Wolford retired as an officer and employee of the Company
effective January 15, 1997 and, as a result thereof, all
options granted to Mr. Wolford during fiscal year 1996 lapsed
and are no longer exercisable by Mr. Wolford.
AGGREGATED 1996 YEAR-END OPTION VALUES
The following table provides information regarding the
number and value of options held by each of the named executive
officers at December 31, 1996 and the two individuals reterred to
above for whom disclosure would have been provided had the
individuals been executive officers at the end of 1996. With two
exceptions, no options were exercised by any named executive
officer or the two individuals referred to above during fiscal
year 1996.
<TABLE>
Number of Securities underlying Value of Unexercised
Unexercised Options at In-the-Money
December 31, 1996 Options at December 31, 1996
------------------------------- ----------------------------
Shares
Acquired
on Value
Exercised Realized Unexercisable
Name (#) ($) Exercisable Unexercisable Exercisable (1)
- -------------------------- --------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles B. Lebovitz -0- -0- 36,000 144,000 $226,500 $849,750
James L. Wolford(2) -0- -0- 19,200 76,800 120,800 453,200
John N. Foy -0- -0- 19,200 76,800 120,800 453,200
Jay Wiston(3) 19,200 91,375 -0- 76,800 -0- 453,200
Ben S. Landress -0- -0- 19,200 76,800 120,800 453,200
Stephen D. Lebovitz -0- -0- 19,200 76,800 120,800 453,200
Eric P. Snyder -0- -0- 10,800 43,200 67,950 254,925
Augustus N. Stephas(4) 10,800 35,550 -0- 43,200 -0- 254,925
</TABLE>
(1) Amounts listed are based upon the $25.875 closing price for
the Common Stock on the NYSE on December 31, 1996 (last
trading day in 1996).
(2) Mr. Wolford retired as an officer and employee of the Company
effective January 15, 1997 and, as a result thereof, any
non-vested options held by Mr. Wolford on the date thereof
lapsed. Mr. Wolford continues to hold 19,200 options which
were vested as of December 31, 1996.
(3) Mr. Wiston exercised options to acquire 19,200 shares on
November 8, 1996.
(4) Mr. Stephas exercised options to acquire 10,800 shares on
June 25, 1996.
EMPLOYMENT CONTRACTS AND TERMINATION
OF EMPLOYMENT ARRANGEMENTS
Upon completion of the Company's initial public offering in
November 1993, each named executive officer of the Company
entered into an employment agreement (an "Employment Agreement"
and collectively, the "Employment Agreements") with the Company
and the Management Company (collectively, the "Employer")
expiring on November 2, 1996. Pursuant to the Employment
Agreements, the named executive officers of the Company held
corresponding positions with the Management Company. Upon the
expiration of the Employment Agreements on November 2, 1996, the
named executive officers continued to hold the corresponding
positions with the Management Company.
Upon the commencement of their terms in 1993, the Employment
Agreements provided for the following annual base salaries, which
were paid by the Management Company: (i) Charles Lebovitz
$385,000; (ii) James Wolford $250,000; (iii) John Foy $230,000;
(iv) Jay Wiston $230,000; (v) Ben Landress $160,000; and (iv)
Stephen Lebovitz $160,000. The annual base salaries are subject
to review annually for increase at the discretion of the
Compensation Committee of the Board of Directors and, since 1993,
the base salaries referenced above have been increased to the
levels set forth on the Summary Compensation Table on page 11.
Additionally, pursuant to the Employment Agreements, the
named executive officers were eligible for participation in bonus
programs and incentive compensation and stock incentive programs
as generally provided to executive officers commensurate
with such officers' performance, all at the discretion of the
Compensation Committee. See "Stock Incentive Plan." These
benefits continued following the expiration of the Employment
Agreements. The Employment Agreements also provided for certain
other benefits, including life insurance, health, disability and
major-medical insurance and other benefit plans maintained from
time to time for the benefit of all employees of the Employer and
these benefits continued following the expiration of the
Employment Agreements.
Charles Lebovitz has agreed to refrain from competing with
the Employer until the later of (i) November 3, 2003 or (ii) two
years from the date of termination of his employment. If his
employment is terminated without cause, the restrictive covenant
will expire two years from the date of termination. Each named
executive officer, other than Charles Lebovitz, has agreed to
refrain from competing with the Employer, until the later of (i)
November 3, 1996 or (ii) two years from the date of termination
of his employment. Prohibited competition includes any
participation in the development, improvement or construction of
any shopping center project, acquiring any interest in a shopping
center project or acquiring vacant land for development as a
shopping center project. The named executive officers are,
however, permitted to hold certain investments which they owned
prior to signing the Employment Agreements.
STOCK INCENTIVE PLAN
The Company adopted the CBL & Associates Properties, Inc.
1993 Stock Incentive Plan (the "Stock Incentive Plan") to provide
incentives to attract and retain officers and key employees. The
Stock Incentive Plan provides for the grant by the Compensation
Committee of options to purchase a specified number of shares of
Common Stock ("Options") or rights to future grants of Common
Stock ("Deferred Stock"), subject to applicable Ownership Limits.
Pursuant to an amendment to the Stock Incentive Plan adopted in
1996, the total number of shares available for grant is equal to
2,800,000 shares. The Board of Directors or the Compensation
Committee may, under certain circumstances, make such adjustments
in the aggregate number and kind of shares reserved for issuance,
the number of shares and kind covered by outstanding awards and
the exercise prices specified therein.
Participants in the Stock Incentive Plan, who may be
officers or employees of the Company, its subsidiaries (including
the Management Company) or designated affiliates, are selected by
the Compensation Committee. Directors of the Company are also
eligible to participate, but, in the case of directors who are
not employees, only pursuant to automatic grants under a
specified formula set forth in the Stock Incentive Plan. See
"Election of Directors -- Compensation of Directors."
The Stock Incentive Plan authorizes the Compensation
Committee to grant Options at an exercise price determined by the
Compensation Committee. Such price cannot be less than 100% of
the fair market value of the shares of Common Stock on the date
on which the Option in respect thereof is granted. The term of
each Option is fixed by the Compensation Committee, but, in any
event will expire 10 years after the date of grant (Options
designated as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), will
expire 5 years after the date of grant where the optionee owns
more than 10% of the voting power of all classes of stock of the
Company or any subsidiary). Additionally, the vesting provisions
of the Options will be determined by the Compensation Committee.
Pursuant to an amendment to the Stock Incentive Plan adopted in
1996, the number of options that may be granted to any officer or
employee of the Company in any given year is limited to a maximum
of 100,000 such options.
Options granted under the Stock Incentive Plan will become
fully exercisable upon a Change in Control (as defined in the
Stock Incentive Plan). In general, Change of Control means (i)
any acquisition by a person or group (other than an acquisition
from the Company or by the Company, the Company's management,
through the exercise of the CBL Rights, or a Company-sponsored
employee benefit plan) of 20% or more of the outstanding shares
of Common Stock, (ii) a change in the majority of the Company's
directors, (iii) approval by the Company's shareholders of a
reorganization, merger, consolidation, sale or disposition of all
or substantially all of the assets of the Company under certain
circumstances or (iv) approval by the Company's shareholders of a
complete liquidation or dissolution of the Company. Holders of
Options also have the right to cash out their Options in the
event of a Change of Control.
If Options granted in connection with the Stock Incentive
Plan are exercised at any time or from time to time, the
Partnership Agreement requires the Company to contribute to the
Operating Partnership as an additional contribution the exercise
price received by the Company in connection with the issuance of
shares of Common Stock to such exercising participant. Although
the Company will contribute to the Operating Partnership an
amount equal to the exercise price received by the Company, the
Company will be considered to have contributed an amount equal to
the fair market value of the shares of Common Stock issued to the
exercising party for purposes of determining the increase in the
Company's percentage interest in the Operating Partnership (and
the dilution of the interests of the limited partners of the
Operating Partnership) in connection with additional capital
contributions of the Company.
The Stock Incentive Plan also permits the Compensation
Committee to grant rights to receive shares of Deferred Stock,
subject to the terms and conditions imposed by the Compensation
Committee. These terms may include a vesting period (the
"Vesting Period") during which the rights to receive Deferred
Stock will be subject to forfeiture upon certain terminations of
employment, as determined by the Compensation Committee, although
the Vesting Period will be accelerated upon a Change of Control.
At the end of the Vesting Period set by the Compensation
Committee, the participant will be issued unrestricted shares of
Common Stock, and will have all the rights of a holder of Common
Stock as to such shares, including the right to vote the shares
and the right to receive any cash distributions. If so
determined by the Compensation Committee in the applicable
Deferred Stock agreement, Deferred Stock awards may provide for
the payment to the awardee, during the Vesting Period, of cash
amounts in respect of such Deferred Stock equal to the amount of
dividends that would have been paid on an equivalent number of
shares of Common Stock. The Compensation Committee may, at or
after grant, accelerate the vesting of all or any part of any
awards of Deferred Stock.
401(K) PROFIT SHARING PLAN
The Management Company adopted the CBL & Associates
Management, Inc. 401(k) Profit Sharing Plan and Trust (the
"401(k) Plan"), a retirement plan qualified under Section 401(a)
and Section 401(k) of the Code, for the benefit of employees of
the Management Company. All employees who have attained the age
of 21 and have completed at least one year of service are eligible
to participate in the 401(k) Plan, and will continue to be so
eligible as employees of the Management Company. The Plan allows
participants to defer between 1% and 10% of their Plan year
compensation, on a pre-tax basis, in the form of "elective
deferral contributions made by the employer on the participant's
behalf," subject to maximum deferral of $9,500 for 1996. The
Plan also provides for employer "matching contributions" on
behalf of each participant equal to 50% of the portion of such
participant's elective deferral contributions which does not
exceed 2.5% of such participant's compensation for the plan year.
The Management Company has discretion to increase the matching
contribution percentage. All elective deferral and matching
contributions are 100% vested when made. The Management Company
also has discretion to make additional profit sharing-type
contributions not related to elective deferral contributions.
By amendment dated January 1, 1996, the Management Company
amended the 401(k) Plan to provide for self-directed investments
by participants of the 401(k) Plan. Subsequent to the date of
the amendment to the 401(k) Plan, participants shall be entitled
to direct the investment of their account balances into a menu of
investment alternatives provided by the trustee of the 401(k)
Plan.
The employer and employee contributions made by, or on
behalf of, the named executive officers and two additional officers
of the Company have been included in the Summary Compensation Table on
page 11.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors
consists of the Independent Directors, Claude M. Ballard, Leo
Fields, William J. Poorvu and Winston W. Walker. Mr. Ballard
serves as Chairman of such committee. None of such members of
the Compensation Committee are or have been officers or employees
of the Company.
Winston Walker was, until October 1, 1993, President and
Chief Executive Officer of Provident Life and Accident Insurance
Company of America and is currently a member of the Board of
Directors of SunTrust Bank, Chattanooga, N.A. (formerly, American
National Bank). In connection with the Company's initial public
offering and related transactions, certain indebtedness owed by
CBL to Provident Life and Accident Insurance Company of America
and its affiliated companies and to SunTrust Bank, Chattanooga,
N.A. (formerly American National Bank) were repaid, and, in
October, 1994, the Company obtained a two-year $10,000,000 line
of credit from SunTrust Bank, Chattanooga, N.A. (formerly
American National Bank). In the future, the Company or the
Operating Partnership may, in the ordinary course of business,
engage in other transactions with such bank on competitive terms.
Claude Ballard is a limited partner of Goldman, Sachs & Co.,
which served as an underwriter in the Company's initial public
offering in November 1993 and subsequent follow-on offerings in
September 1995 and January 1997 and performs investment banking
services for the Company from time to time.
<PAGE>
No executive officer of the Company served on any board of
directors or compensation committee of any entity (other than the
Company) with which any member of the Compensation Committee is
affiliated.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
GENERAL. The Company is a self-managed, self-administered,
fully-integrated real estate company which is engaged in the
ownership, marketing, management, leasing, expansion,
development, redevelopment, acquisition and financing of regional
malls and community and neighborhood centers.
The Company conducts all its business through the Operating
Partnership and owns a 71.82% general partner interest therein.
To comply with certain technical requirements of the Code, the
Operating Partnership carries out the Company's property
management and development activities through the Management
Company.
Neither the Company nor the Operating Partnership has any
paid employees. Although Charles Lebovitz and the other
executive officers named in this Proxy Statement are executive
officers of the Company, their compensation is in the form of a
base salary and bonus paid entirely by the Management Company.
The Compensation Committee determines all matters related to
the compensation of all officers of the Company of the level of
vice president or higher and administers the Stock Incentive
Plan.
PHILOSOPHY. It is the philosophy of the Company to ensure
that executive compensation be directly linked to financial
objectives that the Company believes are primary determinates of
shareholder value over time. The Compensation Committee's
objectives in administering the Company's executive compensation
plan are to ensure that pay levels and incentive compensation are
(i) competitive in attracting and retaining the best personnel,
(ii) properly linked to the Company's performance, and (iii)
simple in design. To fulfill these objectives, the compensation
plan for executives includes base salary, performance based
discretionary bonuses and periodic grants of stock awards and
stock options pursuant to the Stock Incentive Plan.
Non-executive employees of the Company are also eligible to
participate in the Stock Incentive Plan.
The Company believes that the ability to use the Stock
Incentive Plan to attract and retain key personnel has
substantial value and will be essential to the growth of the
Company. The stock option and stock award elements of
compensation are designed to encourage and create ownership and
retention of the Company's stock by key employees in order to
align their long-range interests with those of shareholders and
to allow the opportunity for key employees to build, through the
achievement of corporate goals, a meaningful ownership stake in
the Company.
FINANCIAL CRITERIA. The Compensation Committee, based on
recommendations made by the Company, implemented an executive
compensation program in 1994 pursuant to which officers of the
level of vice president and higher received during fiscal year
1996, in addition to a base salary, incentive compensation
consisting of cash, stock options and stock awards for the
achievement of target levels of performance determined by the
Compensation Committee. The amount of this additional
compensation was determined for each executive officer based upon
his contribution to the overall success of the Company.
Consideration was also given, based upon information prepared by
the independent compensation consultant, to comparable
compensation data for persons holding similarly-responsible
positions at other companies in determining the appropriate
executive officer compensation levels. Pursuant to this program,
cash awards were granted during fiscal year 1996 to other
employees of the Company as performance-based incentive
compensation.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Charles
Lebovitz's base salary of $415,800 for 1996 was paid pursuant to
his Employment Agreement. The Employment Agreement provides for
annual reviews for salary increases and discretionary bonuses
through the term of the agreement. Additionally, the Employment
Agreement provides for participation in the Company's incentive
plans, including the Stock Incentive Plan. During fiscal year
1996, Mr. Lebovitz received options to purchase 60,000 shares of
Common Stock and awards of an aggregate of 3,125 shares of Common
Stock under the Stock Incentive Plan. The awards were determined
upon the same criteria as applied to the other executive officers
of the Company.
POLICY REGARDING QUALIFYING COMPENSATION. Section 162(m) of
the Code imposes a $1,000,000 ceiling on tax-deductible
remuneration paid to the five most highly compensated executive
officers of a publicly-held corporation. The limitation does not
apply to remuneration payable solely on account of the attainment
of one or more performance goals approved by a compensation
committee. While the compensation paid to the executive officers
falls well within the applicable guidelines for the Company's
1996 fiscal year, an amendment to the Company's Stock Incentive
Plan was adopted in 1996 that limits the number of stock options
that may be granted to an employee in any calendar year. See
"Stock Incentive Plan". This amendment conforms the Stock
Incentive Plan to the requirements of "performance-based
compensation" exempt from the deductibility limitations of
Section 162(m) of the Code.
<PAGE>
COMPENSATION COMMITTEE
Claude M. Ballard (Chairman)
Leo Fields
William J. Poorvu
Winston W. Walker
<PAGE>
PERFORMANCE GRAPH
The graph set forth below compares the percentage change in
the cumulative shareholder return on the Common Stock with the
cumulative total return of the Standard & Poor's 500 Total Return
Index ("S&P 500") and The National Association of Real Estate
Investment Trusts ("NAREIT") Equity REIT Total Return Index for
the period commencing October 28, 1993 (the date on which trading
of the Company's Common Stock commenced) through December 31,
1996. The following graph assumes that the value of the
investment in the Company and the indices was $100 at the
beginning of the period and that dividends were reinvested. The
stock price performance presented below is not necessarily
indicative of future results.
GRAPH
CERTAIN RELATIONSHIPS AND TRANSACTIONS
MANAGEMENT AGREEMENT
In connection with the Company's initial public offering in
November 1993, the Company entered into a management agreement
with the Management Company pursuant to which the Management
Company renders management and administrative services with
respect to the Company's properties. The Company, through the
Operating Partnership, owns 100% of the preferred stock and 5% of
the common stock of the Management Company and Charles Lebovitz,
his family and the Associates own 95% of the common stock of the
Management Company. Through the ownership of 100% of the
preferred stock of the Management Company, the Company enjoys
substantially all of the economic benefits of the Management
Company's business. The Management Company also provides
management services for certain properties owned by CBL and
certain other third parties for which the Management Company is
paid a management fee. See "Certain Relationships and
Transactions Retained Property Interests."
PARTNERSHIP AGREEMENT; CBL RIGHTS
In connection with the Company's initial public offering in
November 1993, the Company entered into the Partnership Agreement
with CBL. Pursuant to such agreement, the Company currently owns
a 71.82% general partner interest in the Operating Partnership
and CBL owns a 28.18% limited partner interest in the Operating
Partnership.
Pursuant to the Partnership Agreement, CBL was granted CBL
Rights, consisting of the rights to: (i) exchange all or a
portion of its partnership interest in the Operating Partnership
for shares of Common Stock (based on the trading price of the
Common Stock at the time of conversion) until it owns up to the
applicable share Ownership Limit; and (ii) subsequently, after
November 3, 1996, sell to the Company part or all of its
remaining partnership interest in the Operating Partnership in
exchange for shares of Common Stock or their cash equivalent
(based on the trading price of the Common Stock), at the
Company's election. The Company, however, may not pay in shares
of Common Stock to the extent that this would result in CBL
beneficially or constructively owning in the aggregate more than
the applicable Ownership Limit or otherwise jeopardize, in the
opinion of counsel to the Company, the Company's qualification as
a real estate investment trust for tax purposes.
The purchase price (the "Purchase Price") payable upon
exercise of CBL Rights is the fair market value of the
partnership interests with respect to which CBL Rights are
exercised (the "Offered Interests") computed as of the date on
which such CBL Rights are exercised. The number of shares of
Common Stock and/or cash received by the limited partners of the
Operating Partnership upon exercise of CBL Rights will be based
upon the trading price of the shares of Common Stock at the time
of exercise. If CBL Rights are exercised for shares of Common
Stock, the Purchase Price for the Offered Interests is payable by
the Company's issuance of the number of shares of Common Stock
having a market value at the time of exercise equal to the
Purchase Price. If the CBL Rights are satisfied in cash and the
Company raises such funds through a public offering of its
securities, by borrowing or otherwise, the purchase price
otherwise payable for the Offered Interests will be reduced by
the amount equal to the transaction expenses incurred by the
Company in so raising such funds (but not exceeding 5% of the
Purchase Price computed without regard to such expenses).
CBL Rights will expire in November 2043 if not exercised
prior to that date. Charles Lebovitz, James Wolford and their
respective affiliates (as defined under the attribution rules of
the Code) may not transfer rights to acquire more than 6% of the
outstanding shares of Common Stock to any single entity that is
not an affiliate under the applicable attribution rules of the
Code.
RETAINED PROPERTY INTERESTS
Following the Company's initial public offering in November
1993, CBL retained ownership interests in the following
properties (the "Outparcels"): (i) Outparcels at certain of the
Company's properties, which are being offered for sale through
the Management Company, and a minority interest in one mall; (ii)
three long-term mortgages on single-user properties; and (iii)
CBL's interest in three vacant anchor stores (two former Phar-Mor
stores, one of which was purchased by the Company in 1994 and a
former Hills Department Store) at associated and community
centers which the Company has an option to acquire. These
properties were not transferred to the Operating Partnership
because their cash flow or capital structure was inconsistent
with the Company's investment objectives. The aggregate gross
leasable area ("GLA") of the two vacant anchor stores subject to
option is approximately 138,000 square feet, which, if included
in the Company's properties, would represent approximately .69%
of the total GLA.
The Company's acquisition option is a ten-year option to
acquire each property subject to option for a fixed acquisition
price. The option exercise price is payable in shares of Common
Stock (valued at their market price) or in cash, solely at the
Company's election. If the Company elects to pay in shares, CBL
may elect to receive such payment in the form of limited
partner interests in the Operating Partnership which would be
convertible into shares of Common Stock. The aggregate option
exercise price for the remaining two vacant anchor stores subject
to option is $5,343,865, which amount did not exceed 10 times the
annual base rent paid at the time of the Company's initial public
offering under an existing lease by a tenant in place. At the
time entered into, management believed that the option exercise
price for each property subject to option was greater than its
current fair market value. Such exercise prices, however, were
determined without obtaining real estate appraisals with respect
to any such properties. The option exercise price will be reduced
by the amount of the then existing mortgage indebtedness and any
other known liabilities affecting such properties. The option will
expire with respect to any property upon its sale to any non-CBL
affiliate. The option may be exercised only by a majority vote
of the Independent Directors. The option will enable the Company
to obtain any appreciation in the value of the properties over
the option exercise price.
The Company has an option to purchase any Outparcel if CBL
enters into a binding agreement to enter into a lease for such
Outparcel with an unaffiliated third party under which CBL agrees
to construct improvements on the Outparcel at the direction and
for use by the tenant. CBL intends to sell the Outparcels, and
the Management Company will receive a commission of 5% of the net
sales proceeds for serving as CBL's agent with respect to such
sales.
During 1996, the Company exercised its option to acquire a
tract of land adjacent to the Company's mall know as Hamilton
Place in Chattanooga, Tennessee. The Company acquired the parcel
from an entity comprised of CBL and certain executive officers of
the Company (namely, Charles Lebovitz, certain members of his
family, the Associates, Eric Snyder and Gus Stephas). The
acquisition price was $780,053 and the Company acquired the parcel
in return for limited partner interests in the Operating Partnership.
The certain executive officers of the Company and CBL received an
aggregate .0798% limited partner's interest in return for the parcel.
Aside from the properties retained by CBL, certain members
of Charles Lebovitz family and his father's estate continue to
own four community and neighborhood centers and two tracts of
vacant land. The Company has agreed that it will not acquire any
of the four community and neighborhood centers.
The properties retained by CBL and the properties owned by
the Lebovitz family are managed by the Management Company for a
management fee of 3% to 5% per annum of such properties' annual
rents. The Management Company is also paid a leasing commission
of 5% per annum of annual rental payments for new leases and 3%
per annum of annual rental payments for extensions or renewals of
existing leases at the properties retained by CBL and the
properties owned by the Lebovitz family. During fiscal year
1996, CBL and the Lebovitz family paid the Management Company
approximately $67,000 under such management arrangements.
AFFILIATED ENTITIES
The shareholders of CBL own interests in a number of
entities that have provided services to CBL in the past and
currently continue to provide services to the Operating
Partnership. Such services are provided at competitive rates.
The Independent Directors have, subsequent to the Company's
initial public offering, ratified each of the following
arrangements pursuant to which such services are provided.
CBL has a non-controlling interest in a major national
construction company that has been engaged by CBL in the building
of substantially all of the properties and is currently being
engaged by the Company for building and construction of the
Company's construction properties. Charles Lebovitz is also a
director of the construction company. The majority interest in
the construction company is held by the members of its senior
management, none of whom are affiliated with CBL or the Company.
As of December 31, 1996, the Company had 8 active contracts
(including contracts in respect of each of the construction
properties) with such construction company having aggregate value
of approximately $98.8 million. During fiscal year 1996, the
Company paid approximately $74.1 million to this construction
company.
The construction company and CBL own all of the interests of
a partnership that owns two aircraft used by the personnel of the
Company and the construction company. Each partner contributes
equally to fixed costs and shares variable costs through an
hourly charge based on usage. The Company reimburses the
partnership for costs on an hourly basis associated with use of
the aircraft relating to the business of the Company. During
fiscal year 1996, the Company paid approximately $685,803 as
reimbursement for operating expenses pursuant to such
arrangement.
A company that provides security, maintenance and cleaning
services for most of the Company's malls, office building and
other properties not affiliated with the Company is majority
owned by certain executive officers of the Company (namely,
Charles Lebovitz, certain members of his family and the
Associates). On February 28, 1997, substantially all of the
assets of this company were sold to a third party not affiliated
with CBL or any executive officer of the Company.
An insurance agency that has in the past served as agent
with respect to the placing of insurance on substantially all of
the Company's properties is majority owned by Charles Lebovitz
and the Associates. This company ceased operations on January 31,
1997.
The Bylaws provide that any contract or transaction between
the Company or the Operating Partnership and one or more
directors or officers of the Company or between the Company or
the Operating Partnership and any other entity in which one or
more of its directors or officers are directors or officers, or
have a financial interest, must be approved by disinterested
directors or shareholders after the material facts as to the
relationship or interest and as to the contract or transaction
are disclosed or are known to them.
CERTAIN LEASES
The executive officers named in this Proxy Statement and
certain CBL employees are partners in partnerships that lease 21
spaces representing approximately 34,000 square feet in 13 of the
Company's malls as tenants. Such spaces are operated as food
service and entertainment establishments. Management believes
that, at the time these leases were entered into, they provided
for rental payments at market rates and terms.
An entity owned by an executive officer of the Company (namely,
John Foy) leased 661 square feet of office space at the Company's
office building. Management believes that, at the time the lease
was entered into, it provided for rental payments at market rates
and terms. This lease expired on March 15, 1997 and this entity
relocated to another space not owned by the Company.
Shumacker & Thompson, P.C., local counsel to the Company and
CBL, leases 2,536 square feet of office space at the Company's
office building. The construction company, a significant
minority interest in which is owned by CBL, leases 10,054 square
feet of office space at the Company's office building.
Management believes that, at the time these leases were entered
into, they provided for rental payments at market rates and
terms.
Renewals of any of the foregoing leases will provide for
rental payments at market rates and terms at the time such
renewal leases are entered into.
<PAGE>
OTHER
A member of the family of an executive officer of the
Company (namely, John Foy) owns an approximately 5,000 square
foot store at Hamilton Collection, a retail condominium center
adjacent to Hamilton Place, a mall located in Chattanooga,
Tennessee.
Charles Lebovitz, certain members of his family, the
Associates and a certain executive officer of the Company (namely,
Eric Snyder), have personally guaranteed an aggregate of $8.8
million of the mortgage debt encumbering CoolSprings Galleria,
a mall located in Nashville, Tennessee, for the length of the
term of the mortgage. Such guarantee is payable only if, and
to the extent that, proceeds from a foreclosure sale of the mall
are not in excess of the guarantee.
Certain members of Shumacker & Thompson, P.C., local counsel
to the Company and CBL, are assistant secretaries of the Company.
Shumacker & Thompson, P.C. has also provided legal services to
CBL in the past and currently continues to provide such services.
The Company has retained the law firm of Finkel Goldstein
Berzow & Rosenbloom to represent the Company in connection with
the bankruptcy of Caldor Corporation, with whom the Company had
entered into some pre-development leases, which have been
subsequently terminated prior to the commencement of any
construction. The fee arrangement is a contingent arrangement
providing for the firm to receive 25% of the first $1 million of
recoveries from the tenant, 15% of any additional recoveries and
reimbursement of all out-of-pocket expenses. Harvey L. Goldstein,
Esq., a member of the firm, is the father-in-law of Stephen Lebovitz.
<PAGE>
RATIFICATION OF THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors proposes and recommends that the
shareholders ratify the selection of the firm of Arthur
Andersen LLP to serve as independent public accountants of the
Company for the year ending December 31, 1997. Arthur Andersen
LLP served as the Company's independent public accountants from
the Company's inception in July 1993 to the present. Unless
otherwise directed by the shareholders, proxies will be voted for
approval of the selection of Arthur Andersen LLP to audit the
Company's consolidated financial statements for the 1997 fiscal
year. A representative of Arthur Andersen LLP will attend the
Annual Meeting, and will have an opportunity to make a statement
and to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE RATIFICATION OF THE SELECTION OF
ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR 1997
<PAGE>
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
In accordance with the rules established by the Securities
and Exchange Commission, shareholder proposals to be included in
the Company's proxy statement with respect to the 1998 Annual
Meeting of Shareholders must be received by the Company at its
executive offices located at One Park Place, 6148 Lee Highway,
Chattanooga, Tennessee 37421 no later than December 1, 1997.
In addition, the Company's Bylaws provide that any
shareholder of record desiring to nominate a director or have a
shareholder proposal considered at an annual meeting must provide
written notice of such nomination or proposal and appropriate
supporting documentation, as set forth in the Bylaws, to the
Company at its principal executive offices not less than 60 days
nor more than 90 days prior to the anniversary date of the prior
year's annual meeting (the "Anniversary Date"); provided,
however, that shareholders will have additional time to deliver
the required notice in the event the annual meeting is advanced
by more than 30 days or delayed by more than 60 days from the
Anniversary Date. <PAGE>
OTHER BUSINESS OF THE MEETING
Management is not aware of any matters to come before the
Annual Meeting other than those stated in this Proxy Statement.
However, inasmuch as matters of which the management is not now
aware may come before the meeting or any adjournment, the proxies
confer discretionary authority with respect to acting thereon,
and the persons named in such proxies intend to vote, act and
consent in accordance with their best judgment with respect
thereto. Upon receipt of such proxies (in the form enclosed and
properly signed) in time for voting, the shares represented
thereby will be voted as indicated thereon and in this Proxy
Statement.
By Order of the Board of Directors
JOHN N. FOY
Secretary
Chattanooga, Tennessee
March 31, 1997
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1996 MAY BE OBTAINED WITHOUT CHARGE BY
ANY SHAREHOLDER TO WHOM THIS PROXY STATEMENT IS SENT, UPON
WRITTEN REQUEST TO INVESTOR RELATIONS, CBL & ASSOCIATES
PROPERTIES, INC., ONE PARK PLACE, 6148 LEE HIGHWAY, CHATTANOOGA,
TENNESSEE 37421.
