SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 |_|
<TABLE>
<S> <C>
Check the appropriate box:
|X| Preliminary Proxy Statement |_| Confidential, For Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
STORAGE USA, INC.
--------------------------------------------
(Name of Registrant as Specified in Its Charter)
----------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------
(5) Total fee paid:
------------------------------------------
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
------------------------------------------
(2) Form, Schedule or Registration Statement no.:
------------------------------------------
(3) Filing Party:
------------------------------------------
(4) Date Filed:
------------------------------------------
- --------
*Set forth the amount on which the filing fee is calculated and
state how it was determined.
<PAGE>
[STORAGE USA, INC. LETTERHEAD]
April __, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders of Storage USA, Inc. (the "Company") to be held on May 7, 1997, at
9:00 a.m. local time, at the Company's headquarters at 10440 Little Patuxent
Parkway, Columbia, Maryland. The business to be conducted at the meeting is set
forth in the formal notice that follows. There will also be a report on the
Company's business, and shareholders will have an opportunity to ask questions.
The Company relies upon all shareholders to execute and return
their proxies in order to avoid costly proxy solicitation. Therefore, in order
to save your Company the unnecessary expense of further proxy solicitation, I
ask that you promptly sign and return the enclosed proxy card in the envelope
provided. If you attend the annual meeting, you may withdraw your proxy at the
meeting and vote your shares in person. This year, your vote is particularly
important to the Company as one of the matters to be considered requires the
vote of 75% of all outstanding shares for approval.
I look forward to seeing you at the Annual Meeting.
Sincerely,
Dean Jernigan
Chairman of the Board and
Chief Executive Officer
<PAGE>
STORAGE USA, INC.
10440 Little Patuxent Parkway
Suite 1100
Columbia, Maryland 21044
(410) 730-9500
----------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 7, 1997
----------------------
NOTICE IS HEREBY GIVEN that an Annual Meeting of Shareholders (the
"Annual Meeting") of Storage USA, Inc., a Tennessee corporation (the "Company"),
will be held on May 7, 1997, at 9:00 a.m. local time, at the Company's
headquarters at 10440 Little Patuxent Parkway, Columbia, Maryland, for the
following purposes:
1. To approve an amendment to the Company's charter to declassify
the Board of Directors. (Proposal 1);
2. To elect five directors (Proposal 2);
3. To approve an amendment to the Company's 1993 Omnibus Stock Plan
(Proposal 3);
4. To approve an amendment to the Company's 1995 Employee Stock
Purchase and Loan Plan (Proposal 4);
5. To ratify the selection of the auditors for the fiscal year
ending December 31, 1997 (Proposal 5); and
6. To transact such other business as may properly come before the
meeting and any adjournments thereof.
Pursuant to the Amended and Restated Bylaws of the Company,
the Company's Board of Directors has fixed the close of business on March 21,
1997, as the record date for the determination of shareholders of the Company
entitled to notice of and to vote at the Annual Meeting. Therefore, only record
holders of Company Common Stock at the close of business on that date are
entitled to notice of and to vote shares held on the record date at the Annual
Meeting and any adjournments thereof.
We urge you to review carefully the enclosed materials. Your
vote is important. All shareholders are urged to attend the meeting in person or
by proxy. If you receive more than one proxy card because your shares are
registered in different names or at different addresses, please indicate your
vote, sign, date and return each proxy card so that all of your shares will be
represented at the Annual Meeting.
By Order of the Board of Directors
Christopher P. Marr
Secretary
Columbia, Maryland
April __, 1997
IT IS IMPORTANT THAT ALL PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE INDICATE YOUR VOTE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE. YOU MAY, IF YOU
WISH, REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED, INCLUDING BY
VOTING AT THE MEETING.
<PAGE>
STORAGE USA, INC.
10440 Little Patuxent Parkway
Suite 1100
Columbia, Maryland 21044
(410) 730-9500
----------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
May 7, 1997
----------------------
General
The enclosed proxy is solicited by the Board of Directors of
Storage USA, Inc. (the "Company") for the Annual Meeting of Shareholders to be
held on May 7, 1997, at 9:00 a.m. local time, at the Company's headquarters at
10440 Little Patuxent Parkway, Columbia, Maryland (the "Annual Meeting"). The
proxy may be revoked at any time prior to voting thereof by notifying the
persons named therein of intention to revoke or by conduct inconsistent with
continued effectiveness of the proxy, such as delivery of a later dated proxy or
appearance at the meeting and voting in person the shares to which the proxy
relates. Shares represented by executed proxies will be voted, unless a
different specification is made therein, FOR the amendment to the Company's
Amended and Restated Charter (the "Charter") to declassify the Board of
Directors, FOR election of five directors, FOR the proposed amendment to the
Company's 1993 Omnibus Stock Plan, FOR the proposed amendment of the Company's
1995 Employee Stock Purchase and Loan Plan and FOR the ratification of the
selection of auditors for the fiscal year ending December 31, 1997. If
necessary, and unless the shares represented by the proxy were voted against the
applicable proposal therein, the proxy holder also may vote in favor of a
proposal to adjourn the Annual Meeting to permit further solicitation of proxies
in order to obtain sufficient votes to approve any of the matters being
considered at the Annual Meeting. The Company knows of no business other than
that set forth above to be transacted at the meeting or any adjournment thereof,
but if other matters requiring a vote do arise, it is the intention of the
persons named in the proxy to vote in accordance with their judgment on such
matters.
This proxy statement and the enclosed proxy were mailed on
April __, 1997 to shareholders of record at the close of business on March 21,
1997 (the "Record Date"). The Company has mailed each shareholder of record as
of the Record Date an Annual Report that includes audited financial statements
for the period ended December 31, 1996.
At the close of business on the Record Date, the Company had
26,352,677 shares outstanding and entitled to vote. Each share has one vote on
all matters including those to be acted upon at the Annual Meeting. A majority
of votes entitled to be cast on matters to be considered at the meeting will
constitute a quorum. If a share is represented for any purpose at the meeting,
it is deemed to be present for all other matters. Abstentions and shares held of
record by a broker or its nominee ("Broker Shares") that are voted on any matter
are included in determining the number of votes present. Broker Shares that are
not voted on any matter at the meeting will not be included in determining
whether a quorum is present. If a quorum is present, the affirmative vote of a
plurality of the shares voting at the Annual Meeting is required to elect
directors. The affirmative vote of 75% of the outstanding shares entitled to
vote thereon is required for approval of the amendment to the Charter. The
affirmative vote of a majority of the outstanding shares entitled to vote
thereon is required for approval of the proposed amendments to the Company's
1995 Employee Stock Purchase and Loan Plan and the 1993 Omnibus Stock Plan. The
affirmative vote of a majority of the votes cast is required to approve the
selection of auditors.
Shareholders who wish to abstain from voting on any matter to
be voted on at the Annual Meeting may do so by specifying that their vote on
such matter be withheld in the manner provided in the enclosed proxy.
Abstentions with respect to the proposals to approve the amendment to the
Charter will be treated as shares present and entitled to vote on that proposal.
Consequently, abstentions will be equivalent to a negative vote on that proposal
as well as the proposals to approve the proposed amendments to the Company's
1995 Employee Stock Purchase and Loan Plan to the 1993 Omnibus Stock Plan.
Abstentions will not be included in determining the number of votes cast for
selection of auditors.
The Company will comply with instructions in a proxy executed
with respect to Broker Shares that less than all of such shares are to be voted
on a particular matter. The mailing address of the Company is 10440 Little
Patuxent Parkway, Suite 1100, Columbia, Maryland 21044. Notices of revocation of
proxies should be sent to that address.
<PAGE>
PROPOSAL TO DECLASSIFY THE BOARD OF DIRECTORS
(Proposal 1)
The Board of Directors unanimously has approved and recommends
the approval by the shareholders of an amendment to Paragraph 8.2 of the Charter
to declassify the Board of Directors and shorten the standard term of office for
each director from three years to one. The full text of the proposed amendment
to Paragraph 8.2 of the Charter is set forth below:
8.2 Election of Directors. Directors shall be elected at the
annual meeting of shareholders to succeed those Directors whose terms
have expired and to fill any vacancies thus existing. Directors shall
hold their offices for terms of one year and until their successors are
elected and qualified. Any Director may be removed from office at a
meeting called expressly for that purpose by the vote of shareholders
holding not less than a majority of the shares entitled to vote at an
election of Directors. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of the majority of the remaining
Directors though less than a quorum of the Board of Directors.
Reasons for and Possible Effects of the Amendment
Under Paragraph 8.2 of the Charter as currently in effect,
each Director is assigned to one of three classes. The terms of each class are
staggered such that each year members of one class stand for election for a
three-year term. Thus, shareholders are currently entitled to elect only
one-third of the Board of Directors at each annual meeting.
In the first few years following the Company's initial public
offering in March 1994 (the "IPO"), the Board of Directors believed that the
Company was best served by a Board of Directors that had staggered terms to
provide continuity and stability of leadership during the crucial formation
period. With the Company's growth over the three years since the IPO, the
Company's management team has grown in depth and experience, and the Board of
Directors believes that the Company's need for a staggered board accordingly has
lessened.
The Board of Directors believes that the proposed amendment
will enhance corporate governance and shareholder value by increasing the
frequency with which shareholders may vote for each director, and, consequently,
the opportunities for shareholders to directly influence management policy.
Moreover, classified boards are sometimes viewed as discouraging tender offers,
attempts to change control of the Company or other transactions that might
result in the payment of a premium to shareholders for their Company Common
Stock. While such transactions may still be subject to (i) provisions of the
Company's Charter generally prohibiting any shareholder (other than Security
Capital U.S. Realty) from owning more than 9.8% of the Company's Common Stock,
and (ii) the Tennessee Business Combination, Greenmail and Investor Protection
Acts, the proposed amendment would eliminate any impediment to such a
transaction resulting from classification of the Board of Directors. No such
transaction involving the Company is pending and management is not aware of any
proposal for such a transaction.
Required Vote and Related Matters
The affirmative vote of 75% of the outstanding shares of
Company Common Stock entitled to vote thereon is required to approve the
proposal to amend Paragraph 8.2 of the Charter to declassify the Board of
Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1.
- 2 -
<PAGE>
PROPOSAL TO ELECT FIVE DIRECTORS
(Proposal 2)
Election of Directors
The Company's Charter currently provides that directors shall
be elected at the applicable annual meeting of shareholders at which their term
expires. The term of the Class III Directors, Messrs. Jernigan and McCann, and,
as described below, the terms of Messrs. Peck and Sanders, expire at the 1997
Annual Meeting. In addition, Mr. Robinson will resign effective at the 1997
Annual Meeting to facilitate the nomination of a new director. Messrs. Jernigan,
McCann, Peck and Sanders have been nominated to stand for reelection, and
Caroline S. McBride has been nominated to fill the seat to be vacated by Mr.
Robinson.
Pursuant to the Strategic Alliance Agreement, dated March 19,
1996 (the "Strategic Alliance Agreement"), by and among the Company, Security
Capital U.S. Realty ("USRealty") and an affiliate of USRealty, which Strategic
Alliance Agreement was approved by the Company's shareholders at the 1996 Annual
Meeting, the Board of Directors elected Messrs. Peck and Sanders, to serve on
the Board until the 1997 Annual Meeting. At the 1997 Annual Meeting and at each
annual meeting thereafter until the Strategic Alliance is terminated, USRealty
has the right to nominate for election to the Board of Directors that number of
Directors that, when added to the USRealty nominees continuing in office,
represents the same proportion of the total number of Directors as is
represented by the shares of Company Common Stock held by USRealty relative to
the total number of shares of Company Common Stock outstanding. At the Record
Date, USRealty held approximately 35% of the total number of shares of Company
Common Stock outstanding. USRealty is therefore entitled to nominate three
individuals to stand for election at the 1997 Annual Meeting. USRealty has
nominated Messrs. Peck and Sanders, and Ms.
McBride to stand for election.
To facilitate the nomination and election of Ms. McBride,
Thomas E. Robinson, President and Chief Financial Officer of the Company, has
agreed to resign from the Board of Directors, effective at the 1997 Annual
Meeting. Mr. Robinson is a member of Class II, whose term currently expires at
the 1999 Annual Meeting.
If Proposal 1 to declassify the Board of Directors is
approved, each director elected at this Annual Meeting will serve a term to
expire at the 1998 Annual Meeting. Upon the approval of Proposal 1, all of the
remaining directors have agreed that their terms will expire at the 1998 Annual
Meeting.
If Proposal 1 to declassify the Board of Directors is not
approved, Messrs. Jernigan, McCann and Sanders will be nominated to stand for
election as members of Class III for a term expiring at the 2000 Annual Meeting.
In addition, Mr. Peck will be nominated to stand for election as a member of
Class II for a term expiring at the 1999 Annual Meeting and Ms. McBride will be
nominated to stand for election as a member of Class I for a term expiring at
the 1998 Annual Meeting.
Unless otherwise specified, proxies solicited hereby will be
voted for the election of Messrs. Jernigan, McCann, Peck and Sanders and Ms.
McBride.
It is expected that each of these nominees will be able to
serve, but if any such nominee is unable to serve for any reason, the proxies
reserve discretion to vote or refrain from voting for a substitute nominee or
nominees. The Company's bylaws provide that a majority of the Board of Directors
shall be "Independent Directors" who are not officers or employees of the
Company or an affiliate of (i) any advisor of the Company, (ii) any lessee of
any of the Company's properties, (iii) any subsidiary of the Company, or (iv)
any partnership which is an affiliate of the Company. Election of the nominees
would preserve the majority of Independent Directors on the Board.
- 3 -
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Directors Standing for Re-Election - Class III Term Expires at the 2000 Annual Meeting:*
Present Principal Occupation or
Name Age Employment and Five-Year Employment History
---- --- -------------------------------------------
Dean Jernigan 51 Director since 1985. Mr. Jernigan has been the Chief
Executive Officer of the Company since its inception in 1985.
John P. McCann(1)(3) 51 Director since March 23, 1994. Mr. McCann has, since
1978, been the President, Chief Executive Officer and a
Director of United Dominion Realty Trust, Richmond,
Virginia.
J. Marshall Peck (Class II) 44 Director since November 6, 1996. Managing Director of
Security Capital Investment Research Incorporated since May
1996; Prior thereto, he was Managing Director of LaSalle
Partners since 1992. Mr. Peck is also a director of Regency
Realty and CarrAmerica Realty Corp.
William D. Sanders 55 Director since November 6, 1996, Mr. Sanders has, since
1990, been Chairman of the Board and Chief Executive
Officer of Security Capital Group. Mr. Sanders is also a
Director of R. R. Donnelley & Sons Company, Regency
Realty Corporation, and Security Capital U.S. Realty.
Nominee for Election as Director - Class I - Term Expires at the 1998 Annual
Meeting:
Caroline S. McBride 43 Managing Director of Security Capital Investment Research
Incorporated since June 1996. From January 1995 to June
1996, Ms. McBride was the director of private market
investments for the IBM Retirement Fund and from January
1992 to January 1995, she was also the director of real estate
investments for such fund. Prior to joining the IBM
Retirement Fund in 1992, Ms. McBride was director of
finance, investments and asset management for IBM's
corporate real estate division. Ms. McBride is a director of
CarrAmerica Realty Corp.
Directors Continuing in Office - Class II - Term Expires at the 1999 Annual
Meeting:*
Harry J. Thie(1)(2) 54 Director since March 23, 1994. Senior researcher with the
RAND Corporation, a non-profit research institute since 1991.
Prior thereto, from 1987 to 1991, he was Senior Manager in
the Office of the Assistant Secretary of the Army for
Manpower and Reserve Affairs.
- 4 -
<PAGE>
Mark Jorgensen(1) 56 Director since January 25, 1995. Mr. Jorgensen serves as a
real estate consultant to the pension fund industry. From
1992 until 1994, Mr. Jorgensen was the managing director of
the Prudential's PRISA, PRISA II and PRISA III real estate
portfolios, and prior thereto he was a Senior Investment
Officer - Real Estate for California State Teachers'
Retirement System.
*Term will expire at the 1998 Annual Meeting if Proposal 1 is approved.
Directors Continuing in Office - Class I - Term expires at the 1998 Annual
Meeting:
Present Principal Occupation or
Name Age Employment and Five-Year Employment History
---- --- -------------------------------------------
Howard P. Colhoun(1)(2) 61 Director since March 23, 1994. Mr. Colhoun has been
General Partner of Emerging Growth Partners, Baltimore,
Maryland, a venture capital/small public company investment
partnership since 1982.
Dennis A. Reeve(1)(2)(3) 48 Director since April 13, 1994. Mr. Reeve has been President
of Sparks Capital Corporation, Memphis, Tennessee since
1994, which is an NASD general securities broker/dealer and
an independent commodity introducing broker. In 1992 and
1993, Mr. Reeve worked as a private consultant. For the
prior thirteen years, he held the position of Senior Vice
President and Chief Financial Officer of Shoney's South, Inc.
and its successor, TPI Restaurants, Inc., one of the largest
restaurant franchises in the United States, also serving on its
Board of Directors.
- ------------------
</TABLE>
(1) Independent Director
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
Regular meetings of the Board are held quarterly. The Board
had two additional special meetings during 1996. All of the directors attended
at least 75% of the aggregate number of meetings of the Board and committees of
the Board on which they served in 1996.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2.
- 5 -
<PAGE>
Beneficial Ownership of Company Common Stock
The following table sets forth information regarding the
beneficial ownership of shares of Company Common Stock outstanding as of the
Record Date, by (i) each person or group known to the Company who owns more than
5% of the outstanding shares of Company Common Stock, and (ii) each of the
directors, director nominee and the chief executive officer and the other four
most highly compensated executive officers of the Company. Unless otherwise
indicated in the footnotes, all of such interests are owned directly, and the
indicated person or entity has sole voting and investment power. The number of
shares represents the number of shares of Company Common Stock the person holds,
including shares that may be issued upon the exercise of options that are
exercisable within 60 days of the Record Date.
<TABLE>
<CAPTION>
<S> <C>
Shares Percent of
Held Class
---- -----
Security Capital U.S. Realty.................. 9,217,754 35.0%
Security Capital Holdings S.A.
69, route d'Esch
L-1470 Luxembourg
Dean Jernigan................................. 606,973(1) 2.3%
Thomas E. Robinson............................ 153,023(2) (9)
Morris Kriger................................. 70,200(3) (9)
Jesse Morgan.................................. 83,100(3) (9)
Karl Haas..................................... 60,200(3) (9)
Howard P. Colhoun*............................ 6,267(5) (9)
Mark Jorgensen*............................... 7,448(4) (9)
Caroline S. McBride........................... - -
John P. McCann*............................... 10,529(5) (9)
J. Marshall Peck.............................. 722(7) (9)
Dennis A. Reeve*.............................. 4,801(6) (9)
William D. Sanders............................ 722(7) (9)
Harry J. Thie*................................ 6,075(5) (9)
All Directors and Executive Officers
as a Group (18 persons)....................... 1,162,153(8) 4.4%
10440 Little Patuxent Parkway
Suite 1100
Columbia, Maryland 21044
- 6 -
<PAGE>
- -------------------------
* Independent Director
(1) Includes 120,000 shares of Company Common Stock subject to immediately exercisable options and 5,438 shares
owned by Mr. Jernigan's children.
(2) Includes 100,976 shares of Company Common Stock subject to immediately exercisable options.
(3) Includes 50,000 shares of Company Common Stock subject to immediately exercisable options.
(4) Includes 2,376 shares of Company Common Stock subject to immediately exercisable options.
(5) Includes 3,318 shares of Company Common Stock subject to immediately exercisable options.
(6) Includes 3,340 shares of Company Common Stock subject to immediately exercisable options.
(7) Includes 722 shares of Company Common Stock subject to immediately exercisable options.
(8) Includes 484,756 shares of Company Common Stock subject to immediately exercisable options.
(9) Less than 1%.
</TABLE>
Committees of the Board of Directors
Audit Committee
The Audit Committee consists of three Independent Directors.
The Audit Committee 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. Messrs.
Reeve, Colhoun, and Thie current serve on the Audit Committee with Mr. Reeve
serving as Chairman.
Compensation Committee
The Compensation Committee consists of two Independent
Directors. The Compensation Committee determines compensation for the Company's
Chief Executive Officer and President, reviews and approves the compensation of
the other executive officers and administers the 1993 Omnibus Stock Plan and
1995 Employee Stock Purchase and Loan Plan. Messrs. McCann and Reeve currently
serve on the Compensation Committee, with Mr.
McCann serving as Chairman.
Compensation of Directors
The Company pays each Independent Director an annual fee of
$14,000, paid in Company Common Stock under the 1993 Omnibus Stock Plan, plus
$1,000 cash per Board meeting attended, $750 cash per committee meeting
attended, and $350 cash for teleconference meetings attended. Directors who are
employees of the Company are not paid any directors' fees, either in stock or in
cash. In addition, the Company reimburses directors for expenses incurred in
connection with their activities on behalf of the Company.
Each Independent Director of the Company, who is serving as
such on December 31 of each calendar year, receives a grant of options under the
Omnibus Stock Plan to purchase that number of shares of Company Common Stock
determined by dividing $25,000 by the fair market value per share on December 31
of each calendar year at an exercise price equal to that same fair market value
per share.
Executive Compensation
The following table sets forth information concerning the
annual compensation for services in all capacities to the Company and its
subsidiaries for the period from March 16, 1994, the date the Company became
subject to the Securities Exchange Act of 1934, as amended, through December 31,
1996, of those persons who were, at
- 7 -
<PAGE>
December 31, 1996, (i) the Chief Executive Officer and (ii) the four other most
highly compensated executive officers of the Company (hereinafter, the "Named
Officers") whose annual salary exceeds $100,000.
<TABLE>
<CAPTION>
<S> <C>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
------------------------------------ ---------------------------------
Other Awards
Annual Securities
Compen- Underlying All Other
Name and Principal Position Year Salary(1) Bonus sation Options(#) Compensation
- --------------------------- ---- --------- ----- ------ ---------- ------------
Dean Jernigan 1996 $279,231 $174,519 0 0 $15,084(2)
Chairman of the Board and 1995 218,539 97,875 0 0 10,204(2)
Chief Executive Officer 1994 178,404 65,000 0 120,000 5,654(2)
Thomas E. Robinson 1996 214,244 85,698 0 0 23,766(3)
President and Chief 1995 161,539 65,000 0 0 36,674(4)
Financial Officer 1994 51,924 50,026 0 100,978 22,155(5)
Karl Haas 1996 149,841 59,936 0 15,000 7,483(2)
Executive Vice President, 1995 124,898 37,616 0 0 4,934(2)
Management 1994 106,362 7,513 0 50,000 3,632(2)
Morris Kriger 1996 159,202 63,681 0 55,000 3,711(2)
Executive Vice President,
Acquisitions
Jesse Morgan 1996 136,895 54,758 0 55,000 2,519(2)
Executive Vice President,
Development
- ----------------------
</TABLE>
(1) For Messrs. Jernigan and Haas, 1994 salary includes amounts paid by the
Company's predecessor from January 1 to March 15, 1994. Mr. Robinson was
employed by the Company commencing August 15, 1994, and Messrs. Kriger and
Morgan were employed by the Company commencing February 19, 1996.
(2) Represents contributions to the Company's 401k plan for each of the Named
Officers.
(3) Represents the payment of country club dues ($3,144), Automobile costs
($6,352), life insurance premiums ($2,320) and contribution to the
Company's 401(k) plan ($11,950).
(4) Represents the payment of a country club initiation fee ($20,500),
Automobile costs ($6,352), life insurance premiums ($2,320) and
contribution to the Company's 401(k) plan ($7,502).
(5) Represents the payment of moving expenses ($20,567) and the payment of
automobile costs ($1,588).
- 8 -
<PAGE>
Stock Options
The following table provides information concerning the grants
of options during 1996 under the 1993 Omnibus Stock Plan.
<TABLE>
<CAPTION>
<S> <C>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable Value At
Percent of Assumed Annual Rates of Stock
Number of Total Options/ Price Appreciation for Option
Securities SARs Granted Term
Underlying to Employees Exercise of
Option/SARs In Fiscal Base Price Expiration
Name Granted (#) Year ($/Sh) Date 5% ($) 10% ($)
- ---- ----------- -------------- -------------- ---------- ------ -------
Dean Jernigan - - - - - -
Thomas E. Robinson - - - - - -
Karl Haas 15,000 3% $36.75 12/12/2006 $27,564 $55,125
Morris Kriger 50,000 13% $31.25 2/08/2006 $78,125 $156,250
5,000 1% $36.75 12/12/2006 $9,188 $18,375
Jesse Morgan 50,000 13% $31.25 2/08/2006 $78,125 $156,250
5,000 1% $36.75 12/12/2006 $9,188 $18,375
The following table provides information on the value of each
Named Officer's unexercised options at December 31, 1996.
AGGREGATED OPTION EXERCISES IN 1996
AND FISCAL YEAR-END OPTION VALUES
Number of Unexercised Value of
Shares Acquired Options at Year End(#) Options at Year-End($)(1)
Name on Exercise(#) Value Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- -------------- ----------------- ----------- ------------- ----------- -------------
Dean Jernigan - - 120,000 - $1,905,000 -
Thomas E. Robinson - - 100,978 - 1,299,212 -
Karl Haas - - 50,000 15,000 673,750 $13,125
Morris Kriger - - 50,000 5,000 318,750 4,375
Jesse Morgan - - 50,000 5,000 318,750 4,375
</TABLE>
(1) Based upon the closing price of the Company Common Stock on the NYSE on
December 31, 1996, of $37.625 per share.
Certain Transactions
On August 15, 1994, the Company made a loan of $625,000 to
Thomas E. Robinson, President and Chief Operating Officer, for the purpose of
purchasing a home upon his relocation to the Company's headquarters. The loan
bears interest at the rate of 6% per annum and is secured by a first mortgage
lien on Mr. Robinson's residence. No payments of principal or interest were
required (although interest accrued) until December 31, 1996, at which time
monthly principal and interest payments, based on a 15-year amortization
schedule, were required. The loan will mature
- 9 -
<PAGE>
upon the earlier of August 15, 1999, or six months following termination of Mr.
Robinson's employment with the Company.
During 1996, Faye Stephens, Mr. Jernigan's sister, was paid
approximately $125,000 in commissions relating to property and casualty
insurance purchased through her with respect to certain self-storage facilities.
The Company believes that the terms of the insurance policies were no less
favorable to the Company than could have been obtained from third parties in
arms-length transactions. The Company expects to discontinue purchasing
insurance through Ms. Stephens in 1997.
The executive officers of the Company listed in the table
below are indebted to the Company for Company Common Stock purchased pursuant to
the 1995 Employee Stock Purchase and Loan Plan (the "Stock Purchase and Loan
Plan") approved by the shareholders at the 1994 Annual Meeting. The table
indicates the largest amount of the indebtedness outstanding since the beginning
of fiscal year 1996 and the amount outstanding at December 31, 1996. As provided
in the Stock Purchase and Loan Plan, such indebtedness bears interest at the
rate of 7% per annum and is collateralized by the Company Common Stock purchased
with the proceeds of such loan.
<TABLE>
<CAPTION>
<S> <C>
Maximum Indebtedness Indebtedness at
Name Since January 1, 1996 December 31, 1996
---- --------------------- -----------------
Dean Jernigan $4,775,000 $4,754,377
Thomas Robinson 1,462,500 1,452,188
Karl Haas 292,500 290,438
Morris Kriger 622,500 621,594
Jesse Morgan 630,000 629,497
</TABLE>
The Company has no present intention to engage in transactions
in the future with its officers, directors or their affiliates; any such future
transactions must first be approved by a majority of the disinterested
Independent Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that the Company's
directors and executive officers, and persons that own more than 10% of the
Company Common Stock, file with the Securities and Exchange Commission initial
reports of ownership and reports of change in ownership of Company Common Stock
and other equity securities of the Company. Copies of these reports must be
filed with the Company. Based solely on its review of the copies of these
reports filed with it, and written representations that no other reports were
required, to the Company's knowledge, all reports required by Section 16(a) were
timely filed in 1996, except the Forms 3 for Messrs. Kriger, Morgan, Peck and
Sanders.
Report of the Compensation Committee on Executive Compensation
To Our Shareholders:
The Board has delegated to the Compensation Committee
responsibility for developing and administering programs for compensating the
Company's executive officers. The Compensation Committee, which consists of two
outside directors, believes that the Company's success is attributable in part
to the management and leadership efforts of its executive officers. The
Company's management team has substantial experience in owning, operating,
managing,
- 10 -
<PAGE>
constructing, developing and acquiring self-storage facilities. The Company
intends to maintain compensation policies, plans, and programs which will
attract and retain executives who can enhance shareholder value.
The Compensation Committee determines the compensation for the
Chief Executive Officer and the President, and reviews and approves the Chief
Executive Officer's recommendation of the compensation for other executive
officers.
In evaluating the performance and setting the compensation of
the Chief Executive Officer and the President, the Compensation Committee has
considered industry compensation levels and the success of the Company in
executing and exceeding the expectations of its business plan. The Compensation
Committee engaged a compensation consulting firm to review the salary and
incentive paid for similar positions in the real estate investment trust
industry, and for a peer group of companies, as a means of establishing
reasonable levels of base and performance compensation. Based on this review,
the Compensation Committee established levels of aggregate compensation that it
judged to be approximately equal to the median in the industry. Base
compensation was determined primarily with reference to industry data.
Performance compensation in the form of bonuses was granted for exceeding the
business plan, particularly the success of the offerings of the Company Common
Stock and debt securities of the Partnership, the 12.4% growth in funds from
operations per share, and the acquisition and integration of 82 properties
during the year.
Incentive compensation in the form of participation in the
Stock Purchase and Loan Plan also was granted. The Company's incentive
compensation program is designed to attract, motivate and retain executives
critical to the long term success of the Company by promoting the alignment of
executive interests and the interests of shareholders. The Compensation
Committee intends to use grants of options under the 1993 Omnibus Stock Plan and
participation in the Stock Purchase and Loan Plan to create long-term incentives
by providing the means for executive officers to make a significant personal
investment in the Company, thus aligning them more closely with the interests of
the shareholders.
The size of the performance and incentive awards was
determined based on the recipient's position with the Company and, to a lesser
extent, the Compensation Committee's subjective judgment as to the recipient's
contribution to the success of the Company. The Chief Executive Officer used the
same criteria in establishing recommended base compensation, performance
compensation and incentive compensation for the other executive officers. The
Compensation Committee reviewed and approved the Chief Executive Officer's
recommendations.
Effective January 1, 1994, new Section 162(m) of the Internal
Revenue Code placed limits on the deductibility of certain compensation paid to
executive officers of the Company. The Compensation Committee does not
anticipate that these limitations will affect the Company in fiscal 1997, but
will continue to monitor their application and consider appropriate action.
COMPENSATION COMMITTEE
John P. McCann, Chairman
Dennis A. Reeve
Shareholder Return
The following line graph sets forth a comparison of the
percentage change in the cumulative total shareholder return on the Company's
Common Stock compared to the cumulative total return of the S&P Stock Index and
the National Association of Real Estate Investment Trusts ("NAREIT"). Equity
REIT Total Return Index for the period March 16, 1994, the date on which trading
of the Company's Common Stock commenced, through December 31, 1996.
- 11 -
<PAGE>
The graph assumes that the shares of the Company Common Stock
were bought at the Initial Public Offering price of $21.75 per share and that
the value of the investment in each of the Company Common Stock and the indices
was $100 at the beginning of the period. The graph further assumes the
reinvestment of dividends. The NAREIT Equity REIT Total Return Index, which is
only published monthly based on the last closing prices of the preceding month,
and the S&P Stock Index have been prorated for the month of March to arrive at
the beginning index used in this graph.
The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
Performance Graph
Comparison of Cumulative Total Return Among
Storage USA, Inc.
The NAREIT Equity REIT Total Return
Index and the S&P 500 Index
[GRAPH]
NAREIT
Storage USA S&P 500 Equity
----------- ------- ------
3/16/94 $100.00 $100.00 $100.00
12/31/94 $133.28 $103.00 $ 97.89
12/30/95 $169.07 $141.55 $112.84
12/29/96 $208.00 $174.06 $152.63
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<PAGE>
PROPOSAL TO AMEND THE COMPANY'S 1993 OMNIBUS STOCK PLAN
(Proposal 3)
The Board of Directors unanimously has approved and recommends amending
the Company's 1993 Omnibus Stock Plan (the "Omnibus Stock Plan") to increase the
number of shares of Common Stock issuable under the Omnibus Stock Plan from
1,000,000 to 2,000,000. The Company has adopted the Omnibus Stock Plan to
attract and provide incentives to officers, key employees and Independent
Directors.
Shares Subject to Option; Administration
The Omnibus Stock Plan, administered by the Compensation Committee,
provides for the grant of options to purchase a specified number of Shares
("Options") or grants of shares of Common Stock that are "restricted" for
purposes of section 83 of the Internal Revenue Code ("Section 83 Shares"). Under
the Omnibus Stock Plan as proposed to be amended, a total of 2,000,000 shares of
Common Stock will be available for grant, an increase of 1,000,000 shares.
Shares subject to Options that expire unexercised and Section 83 Share grants
that are forfeited will be available for new award grants. In the event of a
stock dividend or distribution, recapitalization, merger, consolidation,
reorganization, split-up, combination, exchange of shares or the like, the Board
of Directors, in its discretion, may make such adjustments in the aggregate
number and kind of shares reserved for issuance, the number and kind of shares
covered by outstanding awards and the exercise prices specified therein as may
be determined to be appropriate. As of March 31, 1997, 555,090 options for
shares of Common Stock have been granted to officers, directors and key
employees of the Company as NQSOs (as defined below) under the Omnibus Stock
Plan. Based on the closing sale price of the Company's Common Stock on the New
York Stock Exchange on that date of $36.875, the 555,090 shares of Common Stock
that would be issuable under the amended Omnibus Stock Plan would have had a
market value of $20,468,944.
Eligibility
Officers, employees and directors of the Company, its subsidiaries or
designated affiliates (including SUSA Partnership, L.P., the operating
partnership of which the Company is general partner (the "Operating
Partnership")) are eligible to participate in the Omnibus Stock Plan, but
directors who are not also employees may participate only pursuant to automatic
grants of Options and Shares under specified formulas. See "Compensation of
Directors," above.
Plan Benefits
The Options can either be "incentive stock options" that are intended
to satisfy the requirements of the Code ("ISOs") or "non-qualified stock
options" that are not intended to satisfy such requirements ("NQSOs"); provided,
however, that employees of the Operating Partnership and directors who are not
also employees of the Company will be eligible only for the grant of NQSOs. The
Compensation Committee has the discretion to fix the exercise price of the
Options; however, the exercise price for ISOs cannot be less than 100% of fair
market value as of the date of grant. The Option exercise price may be satisfied
in cash or by exchanging shares of Common Stock owned by the optionee, or a
combination of cash and shares. The Company may facilitate the cashless exercise
of Options through customary brokerage arrangements. If the exercise price is
paid by tendering shares, the Committee in its discretion may grant the optionee
a new stock option for the number of shares used to pay the exercise price.
Subject to the terms of the Omnibus Stock Plan, the Compensation Committee has
broad discretion as to the terms and conditions upon which Options granted shall
be exercised. Options have a maximum term of ten years from date of grant. The
right of any participant to exercise an Option may not be transferred in any way
other than by will or the laws of descent and distribution.
The Omnibus Stock Plan also permits the Compensation Committee to grant
Section 83 Shares to a participant subject to the terms and conditions imposed
by the Compensation Committee. These terms will include a restriction period
during which the Section 83 Shares may not be sold, assigned, transferred,
pledged or otherwise encumbered and during which such shares are subject to
forfeiture if one or more conditions established by the Compensation Committee
are not satisfied. Except for such restrictions on transfer and such other
restrictions as the Compensation Committee may impose, the participant will have
all the rights of a holder of Common Stock as to such Section 83 Shares
including the
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<PAGE>
right to vote the shares and the right to receive any cash distributions. The
Compensation Committee has broad discretion as to the specific terms and
conditions of each award, including applicable rights upon certain terminations
of employment.
The Compensation Committee, in its sole discretion to further the
purpose of the Omnibus Stock Plan, may provide for supplemental cash payments or
loans to individuals in connection with all or any part of an award under the
Omnibus Stock Plan, provided that in no event shall the amount of any such
payment exceed: (i) in the case of an option, the excess of the fair market
value of a share on the date of exercise over the option price multiplied by the
number of shares for which such an option is exercised, or (ii) in the case of a
restricted stock award, the value of the shares and other consideration issued
in payment of such award. The Compensation Committee also has the discretion to
permit a participant to satisfy such tax withholding obligations, in whole or in
part, by having the Company withhold shares for the value equal to the amount of
taxes required by law to be withheld.
Change in Control
If a Change in Control occurs, Options granted that were not previously
exercisable and vested will become fully exercisable and vested and all
restrictions applicable to any Section 83 Shares will lapse. In general, a
Change in Control means (i) the acquisition of the power to direct, or cause the
direction of, the management and policies of the Company by a person (not with
others, whether through the ownership of Common Stock, by contract or
otherwise), or (ii) the acquisition, directly or indirectly, of the power to
vote more than 20% of the outstanding Common Stock by any person or by two or
more persons acting together except an acquisition from the Company or by the
Company, the Company's management or a Company-sponsored employee benefit plan,
where (x) the term "person" means a natural person, corporation, partnership,
joint venture, trust, government or instrumentality of a government, and (y)
customary agreements with or between underwriters and selling group members with
respect to a bona fide public offering of Common Stock shall be disregarded for
purposes of this definition.
Non-Competition
Unless the award agreement with respect to any Options or Section 83
Shares provides otherwise, a participant will forfeit all unexercised, unearned
and unpaid awards, including awards earned but not yet paid, all unpaid
dividends and dividend equivalents, and all accrued interest, if (i) in the
opinion of the Compensation Committee, the participant, without the written
consent of the Compensation Committee, engages directly or indirectly in any
manner or capacity as principal, agent, partner, officer, director, employee or
otherwise, in a business or activity competitive with the business conducted by
the Company or any of its subsidiaries; or (ii) the participant performs any act
or engages in any activity that, in the opinion of the Chief Executive Officer
of the Company, is inimical to the best interests of the Company.
Amendment of Omnibus Stock Plan
The Board of Directors may terminate, amend, modify or suspend the
Omnibus Stock Plan at any time, except that the Board of Directors may not,
without the authorization of the holders of a majority of the Company's
outstanding Common Stock, increase the maximum number of shares that may be
issued under the Omnibus Stock Plan (other than the adjustments pursuant to the
Omnibus Stock Plan), extend the last date on which awards may be granted under
the Omnibus Stock Plan, extend the date on which the Omnibus Stock Plan expires,
change the class of persons eligible to receive awards or change the minimum
option price. However, no termination, modification, amendment or suspension of
the Omnibus Stock Plan may impair the rights of any participant under an award
previously granted without the written consent of such participant.
Duration of Omnibus Stock Plan
Unless it is sooner terminated in accordance with its terms, the
Omnibus Stock Plan will remain in effect until all awards thereunder have been
satisfied or otherwise terminated, but no award will be granted after December
28, 2003.
- 14 -
<PAGE>
Federal Income Tax Consequences
The Company has been advised by counsel regarding the Federal income
tax consequences of the Omnibus Stock Plan. No income will be recognized by a
participant at the time an option is granted. If the Option is an ISO, no income
will be recognized upon the participant's exercise of the Option (although the
exercise of an ISO may result in, or increase, an employee's alternative minimum
tax). Income will be recognized by an employee when he disposes of shares
acquired under an ISO. The exercise of a NQSO generally will be a taxable event
that will require the participant to recognize, as ordinary income, the
difference between the shares' fair market value and the option price.
Income will be recognized on account of an award of Restricted Shares
when the shares first become transferrable or are no longer subject to a
substantial risk of forfeiture. At that time, the participant will recognize
income equal to the fair market value of the Restricted Shares. Notwithstanding
the general rule, a participant may elect to recognize income, equal to the fair
market value of the Restricted Shares, as of the date of award.
The employer (either the Company or a subsidiary) will be entitled to
claim a federal income tax deduction on account of the exercise of a NQSO or the
vesting of a Restricted Share award. The amount of the deduction will be equal
to the ordinary income recognized by the participant. The employer will not be
entitled to a federal income tax deduction on account of the grant or the
exercise of an ISO, except that the employer may claim a federal income tax
deduction on account of certain dispositions of ISO stock.
Income in the amount of such payments will be recognized upon receipt
by a participant of any supplemental cash payments made under the Omnibus Stock
Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 3.
PROPOSAL TO AMEND THE COMPANY'S 1995 EMPLOYEE
STOCK PURCHASE AND LOAN PLAN
(Proposal 4)
The Board of Directors unanimously has recommended amending the 1995
Employee Stock Purchase and Loan Plan (the "Stock Purchase Plan") to increase
the number of shares of Common Stock issuable under the Stock Purchase Plan from
400,000 to 500,000. The purpose of the Stock Purchase Plan is to assist the
Company in recruiting and retaining key employees with ability and initiative by
enabling employees who contribute significantly to the Company to participate in
its future success and to associate their interests with those of the Company
and its shareholders through the purchase of Common Stock.
Administration
The Stock Purchase Plan is administered by the Compensation Committee,
which has complete authority to interpret all provisions of the Stock Purchase
Plan; to prescribe the form of agreements with participants; to adopt, amend and
rescind rules and regulations pertaining to the administration of the Stock
Purchase Plan; and to make all other determinations necessary or advisable for
its administration of the Stock Purchase Plan. Any decision made, or action
taken, by the Compensation Committee or in connection with the administration of
the Stock Purchase Plan shall be final and conclusive.
Eligibility
Any officer of the Company who is selected by the Compensation
Committee of the Board of Directors and is not a member of the Compensation
Committee is eligible to participate in the Stock Purchase Plan.
General Description
- 15 -
<PAGE>
Under the Stock Purchase Plan, as proposed to be amended, a total of
500,000 shares of Common Stock will be available for sale (subject to adjustment
in the event of stock dividends, stock splits or similar changes in the number
of outstanding shares of Common Stock) to participants selected by the
Compensation Committee at a price per share equal to the closing sale price of
Common Stock on the New York Stock Exchange (the "NYSE") on the date on which a
participant executes and delivers an agreement to purchase shares pursuant to
the Stock Purchase Plan (an "Agreement"), or, if the NYSE shall be closed on
such date, the next preceding date on which the NYSE shall have been open. As of
March 31, 1997, a total of 330,000 shares had been sold to 12 employees of the
Company under the Stock Purchase Plan.
At the option of the participant, payment of the purchase price of
Common Stock acquired under the Stock Purchase Plan shall be made in full in
cash or a cash equivalent acceptable to the Compensation Committee, at the time
of execution and delivery of the participant's Agreement, or by delivery to the
Company of a note ("Note"), provided that the initial principal amount of the
Note may in no event exceed the "Good Faith Loan Value" of such Common Stock.
"Good Faith Loan Value" means "good faith loan value" as defined in Section
207.2(e) of Regulation G of the Board of Governors of the Federal Reserve
System, 12 CFR 207.2(e).
Each Note shall be executed and delivered by the participant and the
participant's spouse, if any; shall be due and payable seven years after the
date of purchase; shall bear interest at rates to be determined by the
Compensation Committee; shall become due and payable on the 90th day following
cessation of the participant's employment by the Company; and shall be secured
by a pledge of all Common Stock purchased by the participant pursuant to the
Stock Purchase Plan. In the discretion of the Compensation Committee and on such
terms and conditions as it may specify, pledged shares of Common Stock may be
released from such pledge, provided that such release shall not cause the
principal amount of the Note then outstanding to exceed the Good Faith Loan
Value of the remaining pledged shares.
Until a default under the Note, all pledged Common Stock shall be
registered in the participant's name and the participant shall have all rights
of a shareholder of the Company with respect to such Common Stock. The
participant shall agree to remit to the Company all dividends paid on such
Common Stock, to be applied first towards payment of interest on the Note
accrued to the dividend payment date, and then towards reduction of principal of
the Note. Any balance of any applied dividend payment remaining after prepayment
of the Note in full shall be delivered to the participant.
Before the second anniversary of the Note, no partial payment of the
Note shall be deemed payment in full of the purchase price of any Common Stock
purchased pursuant to the Stock Purchase Plan, entitling the participant to the
release of any Common Stock from the pledge thereof securing the Note, but each
such prepayment shall be deemed a pro rata partial payment of the purchase price
of all such Common Stock. A partial prepayment after the second anniversary of
the Note that is attributable to a source other than remitted dividend payments
may be deemed at the discretion of the participant payment in full for the
number of whole shares of pledged Common Stock obtained by dividing the amount
of such prepayment allocable to reduction of principal of the Note by the
quotient obtained by dividing the principal amount of the Note outstanding
before giving effect to such prepayment by the number of shares pledged, and at
the request of the participant, shares deemed paid for in full shall be released
from pledge, but only if the principal amount of the Note then outstanding will
not exceed the Good Faith Loan Value of the remaining pledged Common Stock.
Amendment of Stock Purchase Plan
The Board of Directors may amend the Stock Purchase Plan from time to
time; provided that shareholder approval is required for any amendment that
would increase the number of shares of Common Stock that may be sold pursuant to
the Stock Purchase Plan or change the class of individuals eligible to
participate.
Duration of Stock Purchase Plan
Unless it is sooner terminated by the Board of Directors, the Stock
Purchase Plan will terminate on May 3, 2005.
- 16 -
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 4.
PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
(Proposal 5)
The Company has engaged Coopers & Lybrand L.L.P. as its independent
public accountants since September 1993. The Board has selected Coopers &
Lybrand L.L.P. as auditors for the fiscal year ended December 31, 1997.
Representatives of Coopers & Lybrand L.L.P. will be present at the meeting to
respond to appropriate questions and to make such statements as they may desire.
The Board unanimously recommends a vote FOR the proposal to ratify the
selection of Coopers & Lybrand L.L.P. as the Company's independent public
accountants for the fiscal year ended December 31, 1997.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 5.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company hereby incorporates by reference into this Proxy Statement
the following sections of the Company's 1996 Annual Report: (i) Management's
Discussion and Analysis of Financial Condition and Results of Operation, and
(ii) the Company's Audited Consolidated Financial Statements.
The Company will provide without charge to each person to whom a copy
of this Proxy Statement is delivered, on the written or oral request of such
person and by first class mail or other equally prompt means within one business
day of receipt of such request, a copy of any and all of the documents referred
to above which may have been or may be incorporated by reference in this Proxy
Statement. Such written or oral request should be directed to Storage USA, Inc.,
10440 Little Patuxent Parkway, Suite 1100, Columbia, Maryland 21044, Attention:
Investor Relations ((410) 730- 9500).
SHAREHOLDER PROPOSALS
Any qualified shareholder willing to make a proposal to be acted upon
at the Annual Meeting of Shareholders in 1998 must submit such proposal to be
considered by the Company for inclusion in the proxy statement, to the Secretary
of the Company at its principal office in Columbia, Maryland, no later than
December __, 1997.
- 17 -
<PAGE>
STORAGE USA, INC.
Columbia, Maryland, 21044
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dean Jernigan and Thomas E. Robinson
and each of them proxies (and if the undersigned is a proxy, as substitute
proxies) each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all of the shares of Common
Stock of the Company held of record by the undersigned on March 21, 1997, at the
annual meeting of shareholders to be held at 9:00 a.m. on May 7, 1997, or any
adjournments thereof.
PROXY VOTE AUTHORIZATION FOR STORAGE USA, INC.
ANNUAL MEETING MAY 7, 1997 CUSIP 861907-STORAGE USA, INC.
The Board of Directors unanimously recommends a vote "FOR" each of the
following proposals
1. To approve an amendment to Storage USA, Inc.'s Charter to declassify the
Board of Directors.
( ) FOR ( ) AGAINST ( ) ABSTAIN
2. ELECTION OF DIRECTORS
( ) FOR all nominees listed below ( ) WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for all nominees listed
Dean Jernigan, Caroline S. McBride, John P. McCann,
J. Marshall Peck, William D. Sanders
To withhold authority to vote for any individual nominee, write that name on the
line below.
- --------------------------------------------------------------------------------
3. To approve an amendment to Storage USA, Inc.'s 1993 Omnibus Stock Plan.
( ) FOR ( ) AGAINST ( ) ABSTAIN
4. To approve an amendment to Storage USA, Inc.'s 1995 Employee Stock Purchase
and Loan Plan.
( ) FOR ( ) AGAINST ( ) ABSTAIN
5. To ratify the selection of the auditors for the fiscal year ending December
31, 1997.
( ) FOR ( ) AGAINST ( ) ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AND MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENTS THEREOF.
Please sign exactly as your name appears hereon.
When shares are held by joint tenants, only one of
such persons need sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a corporation,
please sign in full corporate name by the
president or other authorized officer. If a
partnership, please sign in partnership name by an
authorized person. Please mark, sign, date and
return the proxy card promptly, using the enclosed
envelope.
-------------------------------------------------
Signature
Date ______________________________________, 1997
