SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
JP REALTY, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Dated filed:<PAGE>
JP REALTY, INC.
35 Century Park-Way
Salt Lake City, Utah 84115
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 30, 1997
To the Stockholders of
JP REALTY, INC.:
The 1997 Annual Meeting of Stockholders of JP Realty, Inc.
(the "Company") will be held at the Utah Briefing Center on the sixth
floor of the Chamber of Commerce Building, 175 East 400 South, Salt
Lake City, Utah, on Wednesday, April 30, 1997, at 10:00 a.m., MDT,
for the following purposes:
1. To elect seven directors to serve on the Company's
Board of Directors until the 1998 Annual Meeting of
Stockholders;
2. To ratify the appointment of Price Waterhouse LLP as
the Company's independent auditors for 1997; and
3. To transact such other business as may properly come
before the 1997 Annual Meeting or any postponements
and adjournments thereof.
The close of business on March 24, 1997 has been fixed by the
Company's Board of Directors as the record date for the determination
of the stockholders entitled to notice of, and to vote at, the 1997 Annual
Meeting or any adjournments thereof.
We hope all stockholders who can do so will attend the 1997
Annual Meeting in person. Whether or not you plan to attend, we urge
you to complete, date and sign the enclosed proxy card and return it
promptly in the enclosed postage-prepaid envelope provided for that
purpose. By returning your proxy promptly you can help the Company
avoid the expense of follow-up mailings to ensure the presence of a
quorum at the 1997 Annual Meeting. If you attend the 1997 Annual
Meeting, you may revoke your proxy and vote your shares in person.
THE ENCLOSED PROXY IS BEING SOLICITED BY THE
BOARD OF DIRECTORS OF THE COMPANY. THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF
THE PROPOSED ITEMS.
By Order of the Board of Directors,
/s/Paul K. Mendenhall
Paul K. Mendenhall
Secretary
Salt Lake City, Utah
March 31, 1997
<PAGE>
JP REALTY, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 30, 1997
This Proxy Statement is being furnished in connection with the
solicitation of proxies by and on behalf of the Board of Directors of JP
Realty, Inc., a Maryland corporation (the "Company"), for use at the
1997 Annual Meeting of Stockholders of the Company to be held at the
Utah Briefing Center on the sixth floor of the Chamber of Commerce
Building, 175 East 400 South, Salt Lake City, Utah, on Wednesday,
April 30, 1997, at 10:00 a.m., MDT, or at any postponements or
adjournments thereof (the "Annual Meeting").
Stockholders are requested to complete, date and sign the
enclosed proxy card (the "Proxy") and return it in the postage-prepaid
envelope provided.
Valid Proxies will be voted as specified thereon at the Annual
Meeting. Any stockholder giving a Proxy in the accompanying form
retains the power to revoke such Proxy at any time prior to its exercise
by delivering to the Company a written notice of revocation or a duly
executed Proxy bearing a later date or upon request if the stockholder
attends the Annual Meeting and chooses to vote in person. Any notice
of revocation sent to the Company must include the stockholder's name
and must be received prior to the Annual Meeting to be effective. If a
Proxy is properly signed, returned without specifying any instructions
and not revoked prior to the Annual Meeting, the shares represented by
such Proxy will be voted FOR the election of the five nominees to serve
as directors until the 1998 Annual Meeting of Stockholders and FOR
ratification of the appointment of Price Waterhouse LLP as the
Company's independent auditors for 1997.
This Proxy Statement, the Notice of Annual Meeting of
Stockholders and the Proxy are first being sent to stockholders on or
about March 31, 1997.
ANNUAL REPORT
This Proxy Statement is accompanied by the Annual Report to
Stockholders of the Company for the year ended December 31, 1996,
including financial statements audited by Price Waterhouse LLP, the
Company's independent auditors, and their report thereon, dated January
29, 1997.
VOTING SECURITIES AND RECORD DATE
Holders of shares of Common Stock, $.0001 par value, of the
Company (the "Common Stock") will be entitled to one vote for each
share of Common Stock held of record at the close of business on March
24, 1997 (the "Record Date"), with respect to the election of five of the
seven directors of the Company, the ratification of the appointment of
Price Waterhouse LLP as the Company's independent auditors and any
other proposal for stockholder action as may properly come before the
Annual Meeting. Holders of shares of Price Group Stock, $.0001 par
value, of the Company (the "Price Group Stock") vote together as a
single class with the holders of Common Stock on the foregoing matters
and are entitled to one vote for each share of Price Group Stock held of
record at the close of business on the Record Date. In addition, holders
of shares of Price Group Stock have other voting rights as specified
below under "ELECTION OF DIRECTORS." Abstentions and broker
non-votes are each included in the determination of the number of shares
present and voting for the purposes of determining whether a quorum is
present at the Annual Meeting and each is tabulated separately. The
shares of Common Stock and Price Group Stock represented by valid
Proxies which abstain with respect to any matter will not be counted as
an affirmative vote in determining whether the requisite vote of the
shares were cast in favor of that matter.
The disposition of business scheduled to come before the Annual
Meeting, assuming a quorum is present, will require the following
affirmative votes: (a) for the election by the holders of Common Stock
and Price Group Stock of the five nominees to serve as directors, a
plurality of the shares of Common Stock and Price Group Stock, voting
together as a single class, present or represented by Proxy at the Annual
Meeting; (b) for the election by the holders of Price Group Stock of the
two remaining nominees to serve as directors, a plurality of the shares
of Price Group Stock, present or represented by Proxy at the Annual
Meeting; and (c) for the ratification of the appointment of Price
Waterhouse LLP as the Company's independent auditors for the calendar
year ending December 31, 1997, a majority of the shares of Common
Stock and Price Group Stock, voting together as a single class.
As of the Record Date, the Company had issued and outstanding
17,384,317 shares of Common Stock and 200,000 shares of Price Group
Stock.
1. ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of
seven directors: John Price, G. Rex Frazier, Warren P. King, James A.
Anderson, Allen P. Martindale, Sam W. Souvall and Albert Sussman.
Under the Company's Articles of Incorporation, for the period
that John Price, his spouse and children, any lineal descendants of any
of the foregoing, any estates of any of the foregoing, any trusts created
for their benefit, and entities which any of the foregoing control
(together, the "Price Group") continue to hold a combined 10% or
greater direct or indirect economic interest in Price Development
Company, Limited Partnership, a Maryland limited partnership ("PDC"),
in which the Company holds an 83% general partner interest and through
which the Company conducts all of its business, the holders of Price
Group Stock will elect two of the seven members of the Board of
Directors and the holders of Common Stock and Price Group Stock,
voting together as a single class, will elect the remaining five members
of the Board of Directors.
Five persons have been nominated by the Board of Directors for
election as directors by the holders of Common Stock and Price Group
Stock, voting together as a single class, at the Annual Meeting to serve
until the 1998 Annual Meeting of Stockholders and until their respective
successors are elected or appointed. It is intended that the shares of
Common Stock and Price Group Stock represented by properly executed
Proxies will be voted by the Proxy holders FOR the re-election of the
five nominees listed below, unless authority to so vote is withheld. If
the candidacy of any of such nominees should, for any reason, be
withdrawn, the Proxy holders will vote in favor of the remaining
nominees and for such substituted nominees (if any) as shall be
designated by the Proxy holders. The Board of Directors has no reason
to believe that any of such nominees will be unable or unwilling to serve
as a director if re-elected.
The following information is furnished regarding the nominees
for election by the holders of Common Stock and Price Group Stock,
voting together as a single class.
John Price, age 63, was appointed to serve in his current
capacity as the Chairman of the Board of Directors and Chief Executive
Officer in September, 1993. Mr. Price formed Fairfax Realty, Inc.
("Fairfax") in 1972, and its predecessor, John Price Associates, Inc., a
construction company, in 1957. Mr. Price has developed and built
substantial retail and commercial real estate in his 39 years of real estate
activity and has been involved in all facets of real estate development,
construction, leasing, management and financing. He is a director and
on the Executive Committee of Alta Industries - Utah, Ltd. (a distributor
and manufacturer of steel products). Mr. Price is also a trustee of the
University of Utah and is a member of the Advisory Board of the First
Security Bank of Utah, N.A. Mr. Price is a graduate of the University
of Utah.
G. Rex Frazier, age 53, was appointed to serve in his current
capacity as President and Chief Operating Officer in September, 1993.
Mr. Frazier has served as President and Chief Operating Officer of
Fairfax since 1986, prior to which he had served as Executive Vice
President, Vice President-Finance and Director of Finance. He became
a director of the Company in 1993. Mr. Frazier has been involved in
the real estate industry since 1976. He is a certified public accountant
and, prior to joining Fairfax, worked as an audit supervisor with Touche
Ross & Company. Mr. Frazier is a graduate of the University of Utah.
Warren P. King, age 59, has been a director since the formation
of the Company and was appointed Vice Chairman of the Board of
Directors in August, 1994. Prior to the formation of the Company, Mr.
King had served as Vice Chairman of the Board of Directors and
Chairman of the Finance Committee of Fairfax since 1977, and has been
involved in the real estate industry since 1974. He is the President and
Chief Executive Officer and director of Alta Industries - Utah, Ltd. Mr.
King is also a director of A.T.S. Industrial Supply (an industrial tool and
supply distributor) and is on the Advisory Board of Gibbons & Reed (a
general contractor). He is a certified public accountant. Mr. King is a
graduate of Stevens Henager Business College.
James A. Anderson, age 61, has been a director since the
formation of the Company. From April, 1978 to March, 1993, Mr.
Anderson was the Chairman of the Board of Directors of the State of
California Mining and Geology Board. He also was the Executive Vice
President of Fulcrum Management, Inc. (a public and private natural
resource venture capital investment company) from 1987 to 1991, and
was a director of Venture Trident Ltd. Partnership (the parent company
of Fulcrum Management, Inc.). He also served as a director of
Homestake Mining Company from 1980 to 1987 and as Executive Vice
President from 1979 to 1987. Mr. Anderson received his bachelor's
degree in geological engineering from the University of Utah, his
masters degree in mining and geology and his doctorate in economic
geology from Harvard University, and a degree in business
administration from the Stanford University Executive Program.
Sam W. Souvall, age 76, has been a director since the formation
of the Company. Since 1979, Mr. Souvall has been Chairman of the
Board of Alta Industries - Utah, Ltd. and, from 1970 to 1978, was
President and Chief Executive Officer of that company. From 1972 to
1984, Mr. Souvall served as a director of Valley Bank & Trust Company
and as Chairman from 1984 to 1988. Mr. Souvall also served as
Chairman of the Board of Directors of Utah Bancorporation from 1980
to 1988, and as President and Chief Executive Officer of Souvall Bros.
Intermountain Wholesalers from 1946 to 1969.
The Board of Directors recommends a vote FOR the election of
Messrs. Price, Frazier, King, Anderson and Souvall as directors of the
Company.
The following information is furnished regarding the two
nominees who will be elected by the holders of Price Group Stock at the
Annual Meeting.
Allen P. Martindale, age 65, has been a director since the
formation of the Company. Since 1988, Mr. Martindale has served as
the President of A.P.M. Associates (a management consulting firm).
Mr. Martindale has served as a director of Smith's Food and Drug
Center, Inc. (a retail food and drug store) since 1970 and served such
company in several senior executive capacities since that date, including
Chairman of the Board of Directors and Chief Executive Officer. He
also served as President and Chief Executive Officer of Arden-Mayfair
from 1964 to 1970. Mr. Martindale is a certified public accountant and
a graduate of the University of California at Los Angeles.
Albert Sussman, age 80, has been a director since the formation
of the Company. Since January, 1985, Mr. Sussman has been the Senior
Advisor and a lifetime member of the Board of Trustees of the
International Council of Shopping Centers, an organization of which he
had previously served as executive head for 28 years. From 1987 to
1988, Mr. Sussman was a consultant to LaSalle Partners (a national firm
which specializes in the management and investment of real estate
properties held by major corporations) and he also was a consultant to
Kimco Realty Corporation (a public company owning/managing small
and medium-size shopping centers). Mr. Sussman is a graduate of the
City College of New York.
Vacancies occurring on the Board of Directors as a result of (i)
the removal of a director for cause may be filled by either the
stockholders of the Company or a majority of the remaining directors,
(ii) an increase in the size of the Board of Directors may be filled by
either the stockholders of the Company or a majority of the entire Board
of Directors, or (iii) any cause except for an increase in the size of the
Board of Directors shall be filled by a majority of the remaining
directors. Vacancies occurring on the Board of Directors as a result of
the death, resignation, removal or retirement of a director elected by the
holders of Price Group Stock shall be filled by holders representing a
majority of the outstanding shares of Price Group Stock. In addition,
any change in the size of the Board of Directors must be approved by
holders representing a majority of the outstanding shares of Price Group
Stock.
There is no familial relationship among any of the members of
the Board of Directors or executive officers of the Company.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Price Waterhouse LLP as
the independent auditors to examine the accounts of the Company for the
1997 calendar year. Price Waterhouse LLP has served as the
Company's independent auditors since the Company was formed. In the
event that ratification of this appointment of auditors is not approved by
the affirmative vote of a majority of the shares of Common Stock, the
Board of Directors will review its future selection of auditors.
A member of Price Waterhouse LLP is expected to be in
attendance at the Annual Meeting to make a statement and to respond to
questions.
The Board of Directors recommends a vote FOR ratification of
the appointment of Price Waterhouse LLP as the Company's independent
auditors.
BOARD OF DIRECTORS, COMMITTEE MEETINGS
AND COMPENSATION OF DIRECTORS
Board of Directors and Committees of the Board of Directors
During the fiscal year ended December 31, 1996, the Board of
Directors held six meetings. Each of the Company's directors attended
at least 75% of the board meetings and assigned committee meetings held
in 1996.
The Board of Directors has three standing committees: the Audit
Committee, the Executive Committee and the Executive Compensation
Committee. The Company does not have a standing nominating
committee; the usual functions of such committee are performed by the
entire Board of Directors.
Executive Committee. John Price (Chairman), G. Rex Frazier
and Warren P. King are members of the Executive Committee. Such
Committee, which met 35 times in 1996, has the authority to acquire,
dispose of and finance investments for the Company and to authorize the
execution of contracts and agreements, including those related to the
borrowing of money by the Company, and to generally exercise all other
powers of the Board of Directors, except as prohibited by law.
Audit Committee. Warren P. King (Chairman), Allen P.
Martindale and Sam W. Souvall are members of the Audit Committee.
Such Committee, which met three times in 1996, makes
recommendations concerning the engagement of independent public
accountants, reviews with the independent public accountants the plans
and results of the audit engagement, approves professional services
provided by the independent public accountants, reviews the
independence of the independent public accountants, considers the range
of audit and non-audit fees, and reviews the adequacy of the Company's
internal accounting controls.
Executive Compensation Committee. Warren P. King
(Chairman), James A. Anderson and Sam W. Souvall are members of
the Executive Compensation Committee. Such Committee, which met
once in 1996, determines compensation for the Company's executive
officers and administers and reviews the Company's 1993 Stock Option
Plan.
Compensation of Directors
The Company pays an annual fee of $15,000 to its non-
employee directors. Directors who are employees of the Company are
not paid any directors' fees. The Company also reimburses directors for
travel expenses incurred in connection with their activities on behalf of
the Company. In addition, on the date of each annual meeting of the
Company's stockholders, each non-employee director then in office
receives an annual grant of options to purchase 1,000 shares of Common
Stock at the then current market price. Additionally, each non-employee
director is granted options to purchase 10,000 shares of Common Stock
at the then current market price upon its election as a member of the
Executive Committee, and options to purchase an additional 2,000 shares
at the then current market price on the date of each annual meeting of
the Company's stockholders thereafter that such non-employee director
continues as a member of the Executive Committee.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information concerning the
compensation paid by the Company to its Chief Executive Officer and
Chairman of the Board of Directors and to its President and Chief
Operating Officer, Vice President and General Counsel, Vice President
of Leasing/Development, and Vice President of Finance and Secretary,
the Company's four most highly compensated executive officers other
than the Chief Executive Officer (together with the Chief Executive
Officer, the "Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation Awards
------------------- -----------------------------
Name and Principal Securities All Other
Positions Year Salary($) Bonus($)(1) Underlying Options(#) Compensation($)
- ------------------ ---- --------- ----------- --------------------- ---------------
<S> <C> <C> <C> <C> <C>
John Price(2) 1996 $115,000 $86,250 - $11,767(3)
Chief Executive 1995 $100,000 45,000 - 9,397(4)
Officer and 1994 $100,000 - 265,000 7,381(5)
Chairman of the
Board
G. Rex Frazier 1996 $130,000 $97,500 12,500 $11,007(3)
President and 1995 $125,000 56,250 - 16,440(4)
Chief Operating 1994 $125,000 - 50,000 9,875(5)
Officer
David R. Sabey 1996 $100,000 $33,000 5,000 $8,925(3)
Vice President 1995 $ 97,500 19,305 - 7,836(4)
and General 1994 $ 97,500 - 20,000 4,125(5)
Counsel
Thomas L. Mulkey 1996 $100,000 $50,000 10,000 $7,581(3)
Vice President- 1995 $ 97,000 29,100 - 8,293(4)
Leasing/Development 1994 $ 97,000 - 30,000 3,574(5)
Paul K. Mendenhall 1996 $ 80,000 $40,000 10,000 $9,194(3)
Vice President- 1995 $ 77,500 23,250 - 9,272(4)
Finance and 1994 $ 70,000 - 30,000 7,396(5)
Secretary
</TABLE>
- -----------------
(1) Bonuses received for 1995 and 1996 were paid in February,
1996 and 1997, respectively.
(2) Mr. Price receives a minimum of $100,000 in annual compensation
and participates in other standard benefit programs available
to senior executives generally pursuant to a year-to-year
employment and non-competition agreement that was entered into
on January 21, 1994, the closing date of the Company's initial
public offering (the "IPO").
(3) Amounts received in 1996 for each of the Named Executive Officers
are as follows:
<TABLE>
<CAPTION>
Health Life Retirement
Insurance Insurance 401(k) Plan Plan Total
--------- --------- ----------- ---------- -----
<S> <C> <C> <C> <C> <C>
John Price $6,264 $1,053 $1,000 $3,450 $11,767
G. Rex Frazier 5,675 432 1,000 3,900 11,007
David R. Sabey 4,772 153 1,000 3,000 8,925
Thomas L. Mulkey 3,370 153 1,000 3,058 7,581
Paul K. Mendenhall 5,487 261 1,000 2,446 9,194
(4) Amounts received in 1995 for each of the Named Executive Officers are as follows:
</TABLE>
<TABLE>
<CAPTION>
Health Life Retirement
Insurance Insurance 401(k) Plan Plan Total
--------- --------- ----------- ---------- -----
<S> <C> <C> <C> <C> <C>
John Price $ 4,344 $ 1,053 $ 1,000 $ 3,000 $ 9,397
G. Rex Frazier 11,258 432 1,000 3,750 16,440
David R. Sabey 3,758 153 1,000 2,925 7,836
Thomas L. Mulkey 4,230 153 1,000 2,910 8,293
Paul K. Mendenhall 5,686 261 1,000 2,325 9,272
(5) Amounts received in 1994 for each of the Named Executive Officers are as follows:
</TABLE>
<TABLE>
<CAPTION>
Health Life Retirement
Insurance Insurance 401(k) Plan Plan Total
--------- --------- ----------- ---------- -----
<S> <C> <C> <C> <C> <C>
John Price $ 6,719 $ 162 $ 500 - $ 7,381
G. Rex Frazier 9,213 162 500 - 9,875
David R. Sabey 3,463 162 500 - 4,125
Thomas L. Mulkey 2,912 162 500 - 3,574
Paul K. Mendenhall 6,734 162 500 - 7,396
</TABLE>
Option Grants for Calendar Year 1996
The following table sets forth as to each of the Named
Executive Officers information with respect to option grants during 1996.
Option Grants in Fiscal 1996
<TABLE>
<CAPTION>
Number of
Securities Percent of Total Potential Realizable Value
Underlying Options Granted Exercise at Assumed Annual Rates of
Options to Employees in of Base Stock Price Appreciation
Name Granted(#) Fiscal Year (%) Price($/Sh) Expiration Date for Option Term(1)
- -------------- ------------ ----------------- ------------ ---------------- ---------------------------------
5%($) 10%($)
--------------- --------------
<S> <C> <C> <C> <C> <C> <C>
John Price - - - - - -
G. Rex Frazier 12,500 11.71% $20 1/31/06 $157,224 $398,437
David R. Sabey 5,000 4.68% 20 1/31/06 62,891 159,375
Thomas L. Mulkey 10,000 9.37% 20 1/31/06 125,779 318,748
Paul K. Mendenhall 10,000 9.37% 20 1/31/06 125,779 318,748
(1) These amounts represent certain assumed rates of appreciation only. Actual gains, if any, on option exercises
and holdings of Common Stock are dependent on the future performance of the Common Stock.
</TABLE>
Option Exercises/Values of Unexercised Options
The following table sets forth as to each of the Named
Executive Officers information with respect to option exercises
during 1996 and unexercised options on December 31, 1996.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values(1)
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-The-Money Options
Acquired Options at Fiscal Year-End(#) at Fiscal Year-End ($)(2)
on Value ----------------------------- -----------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- -------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John Price - - 53,000 159,000 $443,875 $1,331,625
G. Rex Frazier 325 $2,275 19,675 42,500 164,778 324,688
David R. Sabey - - 8,000 17,000 67,000 129,875
Thomas L. Mulkey - - 12,000 28,000 100,500 209,500
Paul K. Mendenhall 572 5,005 11,428 28,000 95,710 209,500
_________________
(1) No SARs are held by any of the Named Executive Officers.
(2) In accordance with the rules of the Securities and Exchange Commission (the "Commission"), values are
calculated by subtracting the exercise price of an option from the fair market value of the underlying
Common Stock. For purposes of this table, fair market value is deemed to be $25.875, the closing price
of the Common Stock reported for the New York Stock Exchange on December 31, 1996.
</TABLE>
Report on Executive Compensation
This report is presented to describe the compensation policies
applied by the Executive Compensation Committee of the Board of
Directors with regard to the Company's executive officers and the basis
for the compensation of John Price, Chief Executive Officer of the
Company, for the year 1996.
Compensation Philosophy. The Company's compensation
program for executive officers is based upon a desire to achieve both its
short-term and long-term business goals and strategies with a view to
enhancing stockholder value. To achieve its goals, the Company
recognizes that it must adopt a compensation program which will attract,
retain and motivate qualified and experienced executive officers and that
its compensation program should align the financial interests of its
executive officers with those of its stockholders.
Compensation of Executive Officers (other than the Chief
Executive Officer). Each year, the Executive Compensation Committee
reviews the compensation of each executive officer of the Company for
the previous year. In approving the 1996 annual salary for each of the
executive officers, the Executive Compensation Committee considered
several factors, including the individual's salary for the previous year,
the individual's anticipated bonus (if any) for the previous year, the
scope of the individual's responsibilities, the recommendations of
management as to salary and bonus formula for the subsequent year, the
Company's historical financial results and the Company's anticipated
financial performance. The compensation determination for each
individual was largely subjective, and no specific weight was given to
any particular factor. In addition to their base salaries, these executive
officers of the Company are eligible to participate in the Management
Incentive Compensation Plan described below and to receive
discretionary bonuses tied to their individual performances and the
overall performance of the Company.
Compensation of Chief Executive Officer. The Executive
Compensation Committee determined the 1996 annual salary for John
Price, Chief Executive Officer of the Company, based upon a number of
factors and criteria, including the Company's historical financial results,
the Company's anticipated financial performance and the requirements
of Mr. Price. Based on a survey of comparable companies, the
Executive Compensation Committee determined that salary paid to Mr.
Price was reasonable in comparison to the group surveyed for 1996. As
Chief Executive Officer of the Company, Mr. Price is also eligible to
participate in the Management Incentive Compensation Plan described
below and to receive discretionary bonuses tied to his individual
performance and the overall performance of the Company.
1993 Stock Option Plan. The Company believes that providing
executive officers with opportunities to acquire significant equity stakes
in its growth and prosperity through the grant of stock options will
enable the Company to attract and retain qualified and experienced
executive officers. Stock options represent a valuable portion of the
compensation program for the Company's executive officers. Stock
options are generally awarded to executive officers at the time that they
join the Company and periodically thereafter. The exercise price of
stock options has thus been tied to the fair market value of the
Company's Common Stock on the date of the grant, and will only have
value if the value of the Common Stock increases. The size of the initial
grants of stock options made to the existing executive officers was
determined in connection with the formation of the Company. As of
December 31, 1996, there has been only one additional grant of stock
options under the plan. Future grants of stock options to executive
officers will generally be made by the Executive Compensation
Committee upon the recommendation of management and be based upon
the level of each executive officer's position with the Company, an
evaluation of the executive officer's past and expected future
performance, the number of outstanding and previously granted options,
and discussions with the executive officer.
Management Incentive Compensation Plan. The Company
established an incentive compensation plan for its officers beginning in
1995. The plan provides that each officer will earn a cash bonus for a
calendar year equal to a percentage of his annual base salary provided
that funds from operations per share of Common Stock increase at
specified levels as compared to the previous year. The Executive
Compensation Committee will review the plan at the end of each fiscal
year to determine if it should be retained or revised to take into
consideration future developments.
Executive Compensation Committee
Warren P. King, Chairman
James A. Anderson
Sam W. Souvall
Compensation Committee Interlocks and Insider Participation
John Price, Chief Executive Officer of the Company, is a
director of Alta Industries - Utah, Ltd.; Warren P. King is the President
and Chief Executive Officer of Alta Industries - Utah, Ltd. and is the
Chairman of the Executive Compensation Committee of the Company's
Board of Directors.
SHARE PERFORMANCE GRAPH
The graph and table set forth below compare the cumulative
total stockholder return on the Company's Common Stock for the period
of January 21, 1994 through December 31, 1995, with the NAREIT
Equity Retail REIT and NAREIT Equity Mall REIT Total Return
Indices, and the S&P 500 Index for the same period. The graph and
table assume an investment of $100 in the Common Stock and each index
on January 21, 1994, the date trading of the Common Stock commenced
on the New York Stock Exchange, and the reinvestment of all dividends.
[graph]
<TABLE>
<CAPTION>
12/94 1/95 2/95 3/95 4/95 5/95 6/95 7/95 8/95 9/95 10/95 11/95 12/95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity 100.00 97.90 100.00 99.08 98.19 101.92 103.69 105.84 104.36 105.81 101.29 100.48 105.10
Retail
REIT
Equity 100.00 97.53 99.09 98.75 98.28 101.89 102.95 103.83 101.69 103.27 99.75 97.53 103.00
Mall
REIT
S&P 500 100.00 102.60 106.58 109.74 112.92 117.39 120.15 124.15 124.48 129.70 129.25 134.93 137.43
Index
JP 100.00 97.62 95.24 96.43 92.40 99.09 99.70 101.67 99.19 102.29 103.68 100.52 112.77
Realty,
Inc.
</TABLE>
The foregoing Share Performance Graph and the Report on
Executive Compensation shall not be deemed incorporated by
reference by any general statement incorporating by
reference this Proxy Statement into any filing under the
Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),
except to the extent that the Company specifically
incorporates such graph or report by reference and shall
not otherwise be deemed filed under such acts.
There can be no assurance that the Company's share
performance will continue into the future with the same or
similar trends depicted in the graph above. The Company
will not make or endorse any predictions as to future share
performance.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's
directors, executive officers and holders of more than 10%
of the outstanding shares of Common Stock ("10%
Stockholders") to file with the Commission and the New York
Stock Exchange initial reports of ownership and reports of
changes in ownership of Common Stock and other equity
securities of the Company. Directors, executive officers
and 10% Stockholders are required by the Commission's
regulations to furnish the Company with copies of all
Section 16(a) forms and amendments thereto filed during any
given year.
Based on review of the copies of such reports and
amendments thereto furnished to the Company and written
representations from the Company's directors, executive
officers and 10% Stockholders that no other reports were
required to be filed, the Company believes that for the
year ended December 31, 1996, the Company's directors,
executive officers and 10% Stockholders complied with all
Section 16(a) filing requirements applicable to them.
CERTAIN TRANSACTIONS
Formation Transactions
The Company commenced operations in January, 1994 upon
completion of a series of transactions intended to allow it
to reorganize and continue the business of certain
affiliated companies (the "Predecessor Companies") owned by
John Price, Chairman of the Board of Directors and Chief
Executive Officer of the Company. Under the
reorganization, certain properties (or interest therein)
were transferred to PDC. Immediately prior to the closing
of the IPO, certain Predecessor Companies owed
approximately $30.8 million to Fairfax, a company which is
wholly owned by John Price and is the company through which
the principal operations of the Predecessor Companies were
conducted. Fairfax borrowed funds from third-party lenders
in order to provide loans to these Predecessor Companies
during the development and lease-up periods of certain
properties. Upon closing of the IPO, PDC repaid (out of
proceeds from the IPO) that amount of principal plus
accrued interest that Fairfax owed to third-party lenders
as of such date. The remaining debt was contributed by
Fairfax to (i) the Company in exchange for 200,000 shares
of Price Group Stock and (ii) PDC in exchange for 250,400
units of limited partner interest in PDC ("PDC Units").
Management Contracts
The Company provides third-party management services for
certain properties owned directly or indirectly by John
Price as follows: (i) an office building in Salt Lake City,
Utah, the owner of which paid the Company a management fee
of $114,000 in 1996 (Fairfax is a general partner of the
owner of this building); (ii) a commercial building in
Layton, Utah, the owner of which paid the Company a
management fee of $21,000 in 1996; and (iii) a commercial
building in Salt Lake City, Utah, the owner of which paid
the Company a management fee of $3,000 in 1996 (John Price
is the general partner of the owner of this building).
Receipt of Equity Interests by Management
Of the PDC Units issued in the formation of the Company,
2,964,385 PDC Units (having a value of $51.8 million based
on the price of the shares of Common Stock in the IPO) were
allocated directly or indirectly to certain executive
officers and directors of the Company, including entities
they control and trusts established for members of their
immediate families, as follows: John Price (2,746,184 PDC
Units); G. Rex Frazier (31,831 PDC Units); Paul K.
Mendenhall (7,112 PDC Units); Martin G. Peterson (20,134
PDC Units); Thomas L. Mulkey (3,291 PDC Units); Greg Curtis
(2,975 PDC Units); David R. Sabey (1,595 PDC Units); Warren
P. King (126,297 PDC Units); and Sam W. Souvall (23,371 PDC
Units).
Boise Towne Square Settlement
On March 17, 1997, a settlement agreement was entered
into by the Company, Boise Mall Development Company, Ltd.,
a Utah partnership which is beneficially owned by, among
others, John Price (Chairman of the Board of Directors and
Chief Executive Officer of the Company), G. Rex Frazier
(President and Chief Operating Officer and a director of
the Company), Paul K. Mendenhall (Vice President-Finance
and Secretary of the Company), Martin G. Peterson (Vice
President-Administration of the Company), Greg Curtis (Vice
President-Management of the Company), Warren P. King (a
director of the Company), Fairfax and JPET II Company, Ltd.
(a limited partnership in which Mr. Price is the sole
general partner ("JPET")) and which contributed Boise Towne
Square to the Company ("BMDC"), and the successor to the
company that owned a certain parcel adjacent to Boise Towne
Square (the "Prior Owner"), which parcel is believed to be
the source of an environmental contaminant that has been
found to affect Boise Towne Square as well as certain other
adjacent parcels. The settlement agreement, which was
approved by the unanimous vote of the independent directors
of the Board of Directors of the Company, memorializes the
final settlement of all claims that the Company and BMDC
have against the Prior Owner relating to the environmental
condition existing at Boise Towne Square. In connection
with the settlement agreement, BMDC, which retained all
claims of an environmental nature with respect to Boise
Towne Square that it held on the date of the contribution
of such property to the Company, will receive a cash
payment totaling $4.5 million for its prior damages. In
addition, the Company will receive a cash payment of $1.1
million which is intended to defray, based on independent
studies of the condition, the additional costs that may be
incurred by the Company in any future expansion of Boise
Towne Square as result of such environmental condition and
to reimburse the Company for certain sums escrowed at the
time of, and in connection with, its formation and the
closing of the IPO. In addition, the Company has received
from the Prior Owner a broad indemnification relating to
such environmental condition as well as covenant to
complete the ongoing remediation of such environmental
condition.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of
the Record Date regarding the beneficial ownership of the
Company's Common Stock and Price Group Stock with respect
to (i) each person known to the Company to be the
beneficial owner of 5% or more of the Company's outstanding
shares of Common Stock and Price Group Stock; (ii) the
Named Executive Officers; (iii) the Company's directors;
and (iii) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Beneficial Ownership Table(1)
Name and Business Address Beneficially Percent of
of Beneficial Owner Owned Shares
- ---------------------------------------- ---------------------- --------------
<S> <C> <C>
John Price(2) 3,114,868 15.24%
Warren P. King(3) 150,297 *
G. Rex Frazier(4) 65,865 *
Sam W. Souvall(5) 32,061 *
Paul K. Mendenhall(6) 26,865 *
Thomas L. Mulkey(7) 23,291 *
Allen P. Martindale(8) 22,000 *
David R. Sabey(9) 14,961 *
James A. Anderson(10) 8,000 *
Albert Sussman(11) 8,000 *
All Directors and Executive Officers
of the Company as a Group (12 Persons). . . 3,521,467 16.91
Fairfax Realty, Inc.(12)
35 Century Park-Way
Salt Lake City, Utah 84115 . . . . . . . . 2,787,994 13.82
Fairfax Holding, L.L.C.(13)
35 Century Park-Way
Salt Lake City, Utah 84115 . . . . . . . . 2,356,823 11.82
The Equitable Companies Incorporated(14)
787 Seventh Avenue
New York, New York 10019 . . . . . . . . . 2,055,768 11.69
Cohen & Steers Capital Management, Inc.(15)
757 Third Avenue
New York, New York 10017 . . . . . . . . . 2,332,000 13.26
</TABLE>
* An asterisk indicates ownership of less than 1%.
(1) For purposes of this table, a person is deemed to be the beneficial
owner of shares of Common Stock if that person has the right to
acquire such shares within 60 days of the Record Date by the
exercise of any stock option or any other right to convert or
exchange outstanding securities. The Company is the sole
general partner of, and owns an 83% interest in, PDC. PDC
Units are exchangeable, at the option of the holders thereof,
for shares of Common Stock on a one-for-one basis (subject to
adjustment in the event of stock splits, dividends, combinations
or reclassifications). PDC Units and stock options held by a
person are deemed to have been exchanged or exercised for the
purpose of computing the percentage of outstanding shares of
Common Stock beneficially owned by such person, but shall not
be deemed to have been exchanged or exercised for the purpose
of computing the percentage of outstanding shares of Common Stock
beneficially owned by any other person. The Company has the right
to convert any outstanding shares of Price Group Stock on a
one-for-one basis into shares of Common Stock in the event that
the combined direct or indirect economic interest held by the
Price Group in PDC falls below 10%. Even though such economic
interest held by the Price Group is not below the 10% level,
for purposes of this table, shares of Price Group Stock are
deemed to be converted into an equivalent number of shares
of Common Stock. Additionally, for the purposes of this table,
a person or entity shall be deemed to be a beneficial owner
of shares of Common Stock if such person or entity has or
shares either investment or voting power with respect to
such shares.
(2) Includes (i) 162,420 PDC Units held by Mr. Price, (ii) 231,171
PDC Units and 200,000 shares of Price Group Stock held by
Fairfax, (iii) 2,356,823 PDC Units held by Fairfax Holding,
L.L.C., a limited liability company in which Mr. Price holds an
approximate 83% direct and indirect interest ("Holding"), (iv)
4,454 PDC Units held by JPET, and (v) options to purchase
106,000 shares of Common Stock. Mr. Price, through his
control of Fairfax, Holding and JPET, exercises sole investment
and voting power over the PDC Units and shares of Price
Group Stock held by such entities and disclaims beneficial
ownership of the PDC Units held by Holding and JPET, except
to the extent of his approximate 83% interest in Holding and his
approximate 6% interest in JPET.
(3) Includes (i) 80,952 PDC Units held by Mr. King, (ii) 16,008
PDC Units held by Mr. King's wife, Florence K. King, (iii)
29,337 PDC Units held by W.P. King & Co., a partnership in
which Mr. King holds an approximate 5.8% interest, and (iv)
options to purchase 24,000 shares of Common Stock.
(4) Includes (i) 31,831 PDC Units and (ii) options to purchase
32,175 shares of Common Stock.
(5) Includes (i) 23,371 PDC Units and (ii) options to purchase
8,000 shares of Common Stock. Of the shares of Common
Stock reported in the table, 2,300 shares are owned of record
by S.W. Souvall Co., a partnership in which Mr. Souvall and
his wife each hold 2% general partner interests, and 2,300
shares are owned of record by Sary Enterprises, a partnership
of which Mr. Souvall and his wife are 11% and 3% owners,
respectively. Mr. Souvall disclaims beneficial ownership of the
shares of Common Stock held by S.W. Souvall Co. and Sary
Enterprises, except to the extent of Mr. and Mrs. Souvall's
ownership interests therein.
(6) Includes (i) 7,187 PDC Units and (ii) options to purchase
19,428 shares of Common Stock.
(7) Includes (i) 3,291 PDC Units and (ii) options to purchase
20,000 shares of Common Stock.
(8) Includes options to purchase 3,000 shares of Common Stock.
(9) Includes (i) 1,595 PDC Units and (ii) options to purchase
13,000 shares of Common Stock.
(10) Includes options to purchase 8,000 shares of Common Stock.
(11) Includes options to purchase 2,000 shares of Common Stock.
(12) Includes (i) 231,171 PDC Units held by Fairfax, (ii) 200,000
shares of Price Group Stock held by Fairfax, and (iii) 2,356,823
PDC Units held by Holding. Fairfax exercises shared
investment and voting power with respect to the PDC Units held
by Holding and disclaims beneficial ownership of such PDC
Units, except to the extent of its approximate 42% interest in
Holding. All shares beneficially owned by Fairfax and Holding
are additionally identified as being beneficially owned by Mr.
Price.
(13) Includes 2,356,823 PDC Units, of which 1,031,979 and
869,774 PDC Units are additionally identified as being
beneficially owned by Mr. Price and Fairfax, respectively.
(14) On its Schedule 13G dated February 12, 1997, filed with the
Commission, The Equitable Companies Incorporated, AXA
Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle,
Alpha Assurances I.A.R.D. Mutuelle, Alpha Assurances Vie
Mutuelle, AXA Courtage Assurance Mutuelle and AXA
reported sole voting power with respect to 1,728,068 shares of
Common Stock beneficially owned by them, shared voting
power with respect to 325,700 shares of Common Stock
beneficially owned by them and sole dispositive power with
respect to 2,055,768 shares of Common Stock beneficially
owned by them.
(15) On its Schedule 13G dated February 3, 1997, filed with the
Commission, Cohen & Steers Capital Management, Inc.
reported sole voting power with respect to 2,025,900 shares of
Common Stock beneficially owned by it and sole dispositive
power with respect to 2,332,000 shares of Common Stock
beneficially owned by it.
OTHER MATTERS
The Board of Directors knows of no other business which will
be presented at the Annual Meeting. If any other business is properly
brought before the Annual Meeting, it is intended that proxies in the
enclosed form will be voted in respect thereof in accordance with the
judgments of the persons voting the proxies.
MISCELLANEOUS
The cost of soliciting proxies will be borne by the Company.
This solicitation is being made by mail, but may also be made by
officers, directors and regular employees of the Company by telephone,
telegraph, facsimile transmission, mail or personal interview. No
additional compensation will be given to officers, directors or employees
for such solicitation. The Company will request brokers and nominees
who hold Common Stock in their names to furnish proxy material to
beneficial owners of the shares and will reimburse such brokers and
nominees for their reasonable expenses incurred in forwarding
solicitation material to such beneficial owners.
STOCKHOLDERS' PROPOSALS
Any stockholder who intends to submit a proposal at the 1998
Annual Meeting of Stockholders and who wishes to have the proposal
considered for inclusion in the proxy statement and proxy card must, in
addition to complying with the applicable laws and regulations governing
submissions of such proposals, deliver the proposal to the Company no
later than December 1, 1997. Such proposals should be sent to Paul K.
Mendenhall, Secretary, at 35 Century Park-Way, Salt Lake City, Utah
84115.
A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K (FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND NEW YORK STOCK EXCHANGE), WHICH
CONTAINS ADDITIONAL INFORMATION ABOUT THE
COMPANY, IS AVAILABLE WITHOUT CHARGE TO ANY
STOCKHOLDER. REQUESTS SHOULD BE DIRECTED TO
PAUL K. MENDENHALL, SECRETARY, AT 35 CENTURY
PARK-WAY, SALT LAKE CITY, UTAH 84115.
By Order of the Board of Directors,
/s/Paul K. Mendenhall
Paul K. Mendenhall
Secretary
Salt Lake City, Utah
March 31, 1997
JP REALTY, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of JP Realty, Inc., a Maryland corporation,
acting under the laws of the State of Maryland, hereby constitutes and appoints
John Price and G. Rex Frazier, and each of them, the attorneys and proxies of
the undersigned, each with the power of substitution, to attend and act for the
undersigned at the Annual Meeting of Stockholders of said corporation to be
held on April 30, 1997 at 10:00 a.m. MDT, at the Chamber of Commerce Building,
Utah Briefing Center, 6th Floor, 175 East Fourth South, Salt Lake City, Utah
84111, and at any adjournments thereof, and in connection therewith to vote all
of the shares of said stock of said corporation which the undersigned would be
entitled to vote, as follows on the reverse side of this proxy.
Said attorneys and proxies, and each of them, shall have all the powers
which the undersigned would have if acting in person. The undersigned hereby
revokes any other proxy to vote at such meeting and hereby ratifies and
confirms all that said attorneys and proxies and each of them, may lawfully do
by virtue hereof. Said proxies, without hereby limiting their general
authority, are specifically authorized to vote in accordance with their best
judgment with respect to all matters incident to the conduct of the meeting,
all matters presented at the meeting but which are not known to the Board of
Directors at the time of the solicitation of this proxy and, with respect to
the election of any person as a Director, if a bona fide nominee for the office
is named in the Proxy Statement and such nominee is unable to serve or will not
serve, to vote for any other person.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
* FOLD AND DETACH HERE *
<TABLE>
<CAPTION>
<S> <C> <C>
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF JP REALTY, INC. PLEASE MARK X
YOUR VOTE AS
INDICATED IN
THE EXAMPLE
1. ELECTION OF DIRECTORS Nominees: John Price, G. Rex Frazier, Warren P. King, 2. Proposal to ratify the appointment of
James A. Anderson, Sam W. Souvall Price Waterhouse as independent
FOR WITHHOLD auditors of the corporation
ALL NOMINEES AUTHORITY
LISTED FOR ALL (INSTRUCTION TO WITHHOLD AUTHORITY TO VOTE FOR ANY
(EXCEPT AS NOMINEES INDIVIDUAL NOMINEE WRITE THE NAME(S) OF SUCH NOMINEE(S)
LISTED TO BELOW)
RIGHT) FOR AGAINST RETAIN
<square> <square> _______________________________________________________ <square> <square> <square>
Each of the above-named proxies present at
said meeting either in person or by
substitute, shall have and exercise all the
powers of said proxies hereunder. This proxy
shall be voted in accordance with the choices
specified by the undersigned on this proxy.
IF NO INSTRUCTIONS TO THE CONTRARY ARE
INDICATED HEREON THIS PROXY WILL BE TREATED
AS A GRANT OF AUTHORITY TO VOTE FOR THE
ELECTION OF THE NOMINEES FOR THE BOARD OF
DIRECTORS NAMED ABOVE AND AS A GRANT OF
AUTHORITY TO VOTE FOR THE PROPOSALS STATED
ABOVE AND ON ANY OTHER MATTER TO BE
VOTED UPON.
The undersigned acknowledges receipt of
the Notice of Annual Meeting and Proxy
Statement relating to the meeting.
PLEASE SIGN, DATE AND RETURN YOUR PROXY
PROMPTLY IN THE POSTAGE PREPAID ENVELOPE
PROVIDED.
Signature(s)__________________________________________________________________________________ Date:______________________________
IMPORTANT: In signing this proxy, please sign your name or names on the signature line in the same manner as it appears on your
stock certificate. When signing as an attorney, executor, administrator, trustee or guardian, please give your full title as such.
EACH JOINT TENANT SHOULD SIGN.
* FOLD AND DETACH HERE *
</TABLE>
