<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
The Macerich Company
- --------------------------------------------------------------------------------
(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)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
LOGO
THE MACERICH COMPANY
April 15, 1997
Dear Stockholder:
You are cordially invited to attend our Annual Meeting of Stockholders, to
be held on Wednesday, May 28, 1997 at 10:00 a.m. at the Miramar Sheraton Hotel,
101 Wilshire Boulevard, Santa Monica, California.
The enclosed Notice and Proxy Statement contain details concerning the
matters to be considered during the Annual Meeting. At the Annual Meeting you
will be asked to elect three directors to each serve a three-year term, ratify
the appointment of Coopers & Lybrand as the Company's independent accountants,
and approve an amendment and restatement of the Company's 1994 Stock Incentive
Plan. You will note that the Board of Directors of the Company recommends a vote
"FOR" the election of each of the three directors, "FOR" the ratification of the
appointment of Coopers & Lybrand, and "FOR" approval of the Amended and Restated
1994 Incentive Plan. Please complete, sign and return your Proxy Card in the
enclosed envelope at your earliest convenience to assure that your shares will
be represented and voted at the Annual Meeting even if you cannot attend.
We look forward to seeing you at the Annual Meeting and thank you for your
support.
[/S/ MACE SIEGEL]
Mace Siegel
CHAIRMAN OF THE BOARD
[/S/ ARTHUR COPPOLA]
Arthur Coppola
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
THE MACERICH COMPANY
233 WILSHIRE BOULEVARD
NO. 700
SANTA MONICA, CALIFORNIA 90401
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 28, 1997
---------------------
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders (the
"Annual Meeting") of The Macerich Company (the "Company") will be held on
Wednesday, May 28, 1997 at 10:00 a.m. at the Miramar Sheraton Hotel, 101
Wilshire Boulevard, Santa Monica, California, for the following purposes
described in this Notice and Proxy Statement:
1. To elect three members of the Board of Directors, each to serve for
a three-year term;
2. To ratify the appointment by the Board of Directors of Coopers &
Lybrand as independent accountants for the Company for the year ending
December 31, 1997;
3. To approve the Amended and Restated 1994 Incentive Plan; and
4. To consider and act upon any other matter that may properly be
brought before the Annual Meeting and at any adjournment or postponement
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or later
action, the Annual Meeting may be adjourned or postponed.
The Board of Directors has fixed the close of business on March 29, 1997 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournment or postponement thereof. Only
stockholders of record of the Company's common stock, $.01 par value per share,
at the close of business on that date will be entitled to notice of and to vote
at the Annual Meeting and at any adjournment or postponement thereof.
You are requested to complete and sign the enclosed form of proxy, which is
being solicited by the Board of Directors, and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy or by written notice of revocation. In addition, stockholders
of record who attend the Annual Meeting may vote in person, even if they have
previously delivered a signed proxy.
By Order of the Board of Directors
[/S/ RICHARD A. BAYER]
Richard A. Bayer
SECRETARY
Santa Monica, California
April 15, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
THE MACERICH COMPANY
233 WILSHIRE BOULEVARD
NO. 700
SANTA MONICA, CALIFORNIA 90401
------------------------
PROXY STATEMENT
---------------------
FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 28, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Macerich Company, a Maryland
corporation (the "Company"), for use at the 1997 Annual Meeting of Stockholders
of the Company to be held on Wednesday, May 28, 1997 at 10:00 a.m., and at any
adjournment or postponement thereof (the "Annual Meeting").
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are first being sent to stockholders on or about April 15, 1997. The Board
of Directors has fixed the close of business on March 29, 1997 as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting (the "Record Date"). Only stockholders of record of the
Company's common stock, $.01 par value per share (the "Common Stock"), at the
close of business on the Record Date will be entitled to notice of and to vote
at the Annual Meeting. The Common Stock constitutes the only class of securities
of the Company authorized to vote. As of the Record Date, there were 25,816,670
shares of Common Stock outstanding and entitled to vote at the Annual Meeting.
Holders of Common Stock outstanding as of the close of business on the Record
Date will be entitled to one vote for each share held by them. Under the
Company's charter and applicable law, a stockholder is not entitled to cumulate
his or her votes in the election of directors.
The presence, in person or by proxy, of holders entitled to cast at least a
majority of all the votes entitled to be cast is necessary to constitute a
quorum for the transaction of business at the Annual Meeting. Assuming the
presence of a quorum, the three director nominees receiving the highest number
of votes cast at the Annual Meeting will be elected, and the affirmative vote of
a majority of all of the votes cast on the matter at the Annual Meeting will be
required for the ratification of the appointment of Coopers & Lybrand to serve
as the Company's independent accountants. Approval of the proposed Amended and
Restated 1994 Incentive Plan requires the affirmative vote of a majority of all
of the votes cast on the proposal and that the total number of votes cast on the
matter represents over 50% of the total number of shares of Common Stock
outstanding. Under Maryland law, broker "non-votes" (i.e., proxies from brokers
or nominees that disclaim their authority to vote such shares on a particular
matter) and abstentions will count toward the presence of a quorum. Neither
broker non-votes nor abstentions, however, are counted as votes cast.
Accordingly, assuming the presence of a quorum, abstentions and broker non-votes
will have no effect on the outcome of the election of directors or the vote to
ratify the appointment of the Company's independent accountants, but could
affect the result on the proposed Amended and Restated 1994 Incentive Plan if
the total votes cast do not reach the requisite majority of the number of shares
of Common Stock outstanding.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY RECEIVED PRIOR TO THE
VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL MEETING
AS DIRECTED IN THE PROXY. IF A PROPERLY EXECUTED PROXY IS SUBMITTED AND NO OTHER
INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE
NOMINEES FOR DIRECTOR, FOR THE RATIFICATION OF THE APPOINTMENT OF THE COMPANY'S
INDEPENDENT ACCOUNTANTS, AND FOR APPROVAL OF THE AMENDED AND RESTATED 1994
INCENTIVE PLAN. THE HOLDERS OF THE PROXY WILL ALSO HAVE AUTHORITY TO VOTE ON
OTHER MATTERS THAT MAY BE PROPERLY BROUGHT BEFORE THE ANNUAL MEETING OR THAT MAY
BE INCIDENT TO THE CONDUCT THEREOF. IT IS NOT
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ANTICIPATED THAT ANY MATTER OTHER THAN THOSE SET FORTH IN THE PROXY STATEMENT
WILL BE PRESENTED AT THE ANNUAL MEETING. IF OTHER MATTERS ARE PRESENTED, PROXIES
WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE PROXY HOLDERS.
A stockholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Secretary of the Company at
the address of the Company set forth above, by filing a duly executed proxy
bearing a later date, or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the Record Date attending the
Annual Meeting may vote in person whether or not a proxy has been previously
given, but the presence (without further action) of a stockholder at the Annual
Meeting will not constitute revocation of a previously given proxy.
The Company's 1996 Annual Report, including financial statements for the
fiscal year ended December 31, 1996, is being mailed to stockholders
concurrently with this Proxy Statement. The Annual Report, however, is not part
of the proxy solicitation material.
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors is divided into three classes with each class
constituting one-third of the total number of directors. Each class serves a
three-year term. The present term for the Class Three directors expires at the
Annual Meeting, and the present terms for the Class One and Class Two directors
expire at the annual meeting of stockholders to be held in 1998 and 1999,
respectively. Each director holds such office until his or her successor is duly
elected and qualified.
The three Class Three directors are to be elected at the Annual Meeting to
hold office until the annual meeting of stockholders in 2000 and until their
respective successors are duly elected and qualified. The Board of Directors has
nominated Mace Siegel, Arthur M. Coppola and James S. Cownie to continue to
serve as Class Three directors of the Company (the "Nominees"). Each of the
Nominees is currently serving as a director of the Company. The Board of
Directors anticipates that each of the Nominees will serve, if elected, as a
director. However, if any person nominated by the Board of Directors is unable
to serve, the proxy confers upon the holders thereof discretionary authority to
vote for the election of such other person or persons as the Board of Directors
may recommend.
The Board of Directors will consider a nominee for election to the Board of
Directors recommended by a stockholder of record if the stockholder submits the
nomination in compliance with the requirements of the Company's Bylaws. See
"Other Matters--Stockholder Proposals" for a summary of these requirements.
Assuming the presence of a quorum, the three director nominees receiving the
highest number of votes cast at the Annual Meeting will be elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES. PROXIES RECEIVED WILL BE VOTED FOR EACH OF THE NOMINEES UNLESS
STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY.
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INFORMATION REGARDING NOMINEES AND DIRECTORS
The following table and biographical descriptions set forth certain
information with respect to the directors of the Company (including the
Nominees), each of whom has served continuously since elected, based on
information furnished to the Company by each such director. The following
information is as of March 29, 1997, unless otherwise specified.
<TABLE>
<CAPTION>
AMOUNT AND
AMOUNT AND NATURE NATURE OF
OF BENEFICIAL BENEFICIAL
DIRECTOR OWNERSHIP OF PERCENT OF OWNERSHIP OF PERCENT OF
NAME AGE SINCE COMMON STOCK(1) CLASS(2) OP UNITS(1)(3) CLASS(4)
- ---------------------------------- --- ----------- ----------------- --------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Class Three:
Arthur M. Coppola(9).............. 45 1994 270,475(10)(11) 17) * 1,443,316 6.25%
James S. Cownie................... 52 1994 109,458(8)(12) * -- --
Mace Siegel....................... 71 1994 162,525(6)(13) * 3,514,316(14) 12.49%
CONTINUING DIRECTORS
Class One:
Edward C. Coppola(9).............. 42 1994 178,905(10)(15) 18) * 841,368 3.7%
Fred S. Hubbell................... 45 1994 18,761(8)(16) * -- --
Dr. William P. Sexton............. 58 1994 8,761(8) * -- --
Class Two:
Dana K. Anderson.................. 62 1994 103,275(5)(6)(19) * 1,332,632(7) 5.26%
Theodore S. Hochstim.............. 69 1994 9,761(8) * -- --
Stanley A. Moore.................. 58 1994 18,761(8) * -- --
</TABLE>
- ------------------------
* The percentage of shares beneficially owned by any director does not exceed
one percent of the Company's Common Stock.
(1) Except as provided under applicable state marital property laws or as
otherwise noted, each individual in the table above has sole voting and
investment power over the shares of Common Stock or OP Units (as defined
in footnote 3 below) listed.
(2) Assumes that none of the outstanding OP Units are redeemed for shares of
Common Stock.
(3) The Company is the sole general partner of, and owns an aggregate of 68%
of the ownership interests in, The Macerich Partnership, L.P., a Delaware
limited partnership (the "Operating Partnership"). The Operating
Partnership holds directly or indirectly substantially all of the
Company's interests in certain regional and community shopping centers
(the "Centers"). In connection with the formation of the Company and the
Operating Partnership, as well as subsequent acquisitions of certain
Centers, limited partner interests in the Operating Partnership ("OP
Units") were issued to certain individuals in connection with the transfer
of their interests in certain Centers. The OP Units are redeemable for
cash or, at the election of the Company, shares of Common Stock.
(4) Assumes that all OP Units held by the person are redeemed for shares of
Common Stock and that none of the OP Units held by other persons are
redeemed for shares of Common Stock, notwithstanding the percentage
limitations under the Company's charter that limit the number of shares
that may be acquired by such person.
(5) Includes 1,000 shares held in trust by Mr. Anderson as trustee for the
benefit of Mr. Anderson and his wife.
(6) Includes 100,000 shares subject to options granted to this director under
the Company's Stock Incentive Plan that are currently exercisable or
exercisable within 60 days after the Record Date.
(FOOTNOTES CONTINUE ON NEXT PAGE)
3
<PAGE>
(7) All 1,332,632 OP Units are held by Mr. Anderson as trustee of the Anderson
Family Trust for the benefit of Mr. Anderson and his wife.
(8) Includes 5,500 shares subject to options granted to this director under
the 1994 Eligible Directors' Stock Option Plan (the "Director Plan") which
are currently exercisable or exercisable within 60 days after the Record
Date. Also includes 4,261 phantom stock units credited to this director
under the terms of the Company's Eligible Directors' Deferred
Compensation/Phantom Stock Plan (the "Director Phantom Stock Plan").
(9) Edward Coppola and Arthur Coppola are brothers.
(10) Includes 150,000 shares subject to options granted to this director under
the Company's 1994 Stock Incentive Plan (the "Stock Incentive Plan") that
are currently exercisable or exercisable within 60 days after the Record
Date.
(11) Includes 200 shares held by Mr. A. Coppola as custodian for his minor son.
(12) Includes 13,672 shares held in trust for the benefit of Mr. Cownie's minor
children who reside at his home and 5,525 shares owned by Mr. Cownie's
spouse or held by Mr. Cownie's spouse as custodian for legal wards as to
which shares Mr. Cownie, in each case, has neither voting or investment
power. Mr. Cownie disclaims beneficial ownership of all of the shares
described in this footnote.
(13) Includes 37,700 shares held by Mr. Siegel's wife and 24,400 shares held by
his adult daughter residing at his home as to which Mr. Siegel has neither
voting or investment power and disclaims any beneficial ownership.
(14) Includes 1,295,421 OP Units owned by Mr. Siegel's spouse as to which Mr.
Siegel has neither voting or investment power and disclaims any beneficial
ownership.
(15) Includes 12,500 shares held by E.C. Coppola Family Limited Partnership (an
entity controlled by Mr. E. Coppola) and 1,200 shares held by Mr. E.
Coppola as custodian for his minor children.
(16) Includes 900 shares held in trust by Mr. Hubbell as trustee. Also includes
4,000 shares held by his wife as to which Mr. Hubbell has neither voting
or investment power and disclaims any beneficial ownership.
(17) Includes 20,250 shares of restricted stock granted to Mr. A. Coppola under
the terms of the Company's Stock Incentive Plan.
(18) Includes 15,180 shares of restricted stock granted to Mr. E. Coppola under
the terms of the Company's Stock Incentive Plan.
(19) Includes 2,250 shares of restricted stock granted to Mr. Anderson under
the terms of the Company's Stock Incentive Plan.
The Company was formed on September 9, 1993 to continue the business of The
Macerich Group, which had been engaged in the shopping center business since
1965. The principals of The Macerich Group consisted of Mace Siegel, Arthur
Coppola, Dana Anderson, Edward Coppola, Richard Cohen and certain of their
family members, relatives and business associates. The Company conducts all of
its business through the Operating Partnership, the property partnerships that
own title to the shopping centers (the "Property Partnerships") and two
management companies, Macerich Property Management Company and Macerich
Management Company (collectively, the "Management Companies"). The Management
Companies provide property management, leasing and other related services to the
Company's properties. The Operating Partnership owns 100% of the non-voting
preferred stock of each of the Management Companies and all of the common stock
of each such company is owned by Messrs. Siegel, A. Coppola, Anderson and E.
Coppola (the "Principals"). See "Certain Transactions."
The following provides certain biographical information with respect to all
directors of the Company, including the Nominees.
Dana K. Anderson has been Vice Chairman of the Board of Directors and Chief
Operating Officer of the Company since its formation. Mr. Anderson has also
served as Vice Chairman of the Board of
4
<PAGE>
Directors and Chief Operating Officer of the Management Companies since 1992.
Mr. Anderson has been with The Macerich Group since 1966 and acted as Executive
Vice President of the Management Companies from 1979 to 1992. He has 31 years of
shopping center experience with The Macerich Group and the Company and 36 years
of experience in the real estate industry. Mr. Anderson is a member of the Board
of Directors of Alvamar Development Corp. and Leander, Norway, Roddenberry
Corp., an entertainment company.
Arthur M. Coppola has been President and Chief Executive Officer of the
Company since its formation. Mr. Coppola has also served as President and Chief
Executive Officer of the Management Companies since 1992. From 1979 to 1992, Mr.
Coppola was Executive Vice President of the Management Companies. Mr. Coppola
has 21 years of experience in the shopping center industry, all of which has
been with The Macerich Group and the Company. Mr. Coppola is a member of the
Board of Directors of the Management Companies. Mr. Coppola is also an attorney
and a certified public accountant.
Edward C. Coppola has been the Executive Vice President and Director of
Acquisitions of the Company since its formation. Mr. Coppola has also served as
Director of Acquisitions of the Management Companies since 1987 and became
Executive Vice President of the Management Companies in 1992. He has 19 years of
shopping center experience with The Macerich Group and the Company. Mr. Coppola
is also an attorney.
James S. Cownie, currently a private investor, was the former Chairman of
New Heritage Associates, a cable television operator with cable properties
located in the Minneapolis/St. Paul, Minnesota area from 1991 to 1996. Prior to
that, Mr. Cownie was Co-Founder and President of Heritage Communications, Inc.,
a cable television operator serving 22 states, from 1971 to 1990. Mr. Cownie is
a member of the Board of Directors of Da-Lite Screen Company; Heritage Media
Corporation; MARKETLINK, INC., a cable telemarketing firm; National By-Products,
Inc.; Capital Value-Fund, Inc., a venture capital company; and Palmer Wireless.
Theodore S. Hochstim has been a self-employed real estate consultant for
various department store companies and major shopping center owners since 1983,
and was employed as a retail real estate consultant by The Macerich Group from
1984 to March 1994. Previously, Mr. Hochstim was employed as a real estate
executive by Sears Roebuck & Co. from 1967 to 1977 and by Federated Department
Stores from 1977 to 1983. Mr. Hochstim currently serves on the Board of
Directors and Audit Committee of Brown Brothers Harriman Trust Company of Texas,
a trust company located in Dallas, Texas. Mr. Hochstim is also an attorney and a
member of the Bar of New York and Texas.
Fred S. Hubbell is Chairman, President and Chief Executive Officer of
Equitable of Iowa Companies. Mr. Hubbell has served in his position as Chairman
since May 1993 and as President and Chief Executive Officer since May 1989. Mr.
Hubbell has also been the President and CEO of Equitable Life of Iowa, and
Chairman of USG Annuity and Life Company. Mr. Hubbell has served in various
capacities with The Equitable of Iowa Companies since 1983, in addition to
serving as Chairman of Younker's, a department store chain and subsidiary of The
Equitable of Iowa Companies, from 1985 until 1992 when the retail subsidiary was
sold. Mr. Hubbell currently serves on the Board of Directors of Pioneer Hi-Bred
International, Inc. and Equitable of Iowa Companies. Mr. Hubbell is also an
attorney.
Stanley A. Moore is Chief Executive Officer of Overton, Moore & Associates,
Inc., which constructs and owns and manages office, industrial and mixed-use
space and has served in such position since 1973. Mr. Moore also has been a
director of Overton, Moore & Associates, Inc. since 1973. Mr. Moore is past
president of the Southern California Chapter of the National Association of
Industrial and Office Parks, and a board member of the Economic Resources
Corporation of South Central Los Angeles and Torrance Limited Partners.
Dr. William P. Sexton is Vice President, University Relations of the
University of Notre Dame and has served in such position since 1983. Dr. Sexton
is also a Full Professor in the Management Department and teaches in the
University's Executive MBA Program. Dr. Sexton has been employed as a professor
in the
5
<PAGE>
Management Department of the Business School at Notre Dame since 1966. He
currently serves on the Board of Directors of The St. Joseph Care Group and the
Community Foundation in South Bend, Indiana.
Mace Siegel has been Chairman of the Board of Directors of the Company since
its formation. Mr. Siegel has also served as Chairman of the Board of Directors
of the Management Companies since 1992. From 1965 to 1992, Mr. Siegel was
President of the Management Companies. Mr. Siegel founded The Macerich Group in
1965 and has 44 years of experience in the shopping center business.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
BOARD OF DIRECTORS. The Company is managed by a Board of Directors composed
of nine members, a majority of whom are neither current nor former executive
officers or employers of the Company. The Board of Directors met five times in
1996. Each of the directors attended at least 75% of the total number of
meetings of the Board of Directors and of each committee on which he served
during the year.
EXECUTIVE COMMITTEE. The Executive Committee of the Board of Directors
consists of Messrs. Moore, Siegel and A. Coppola and has such authority as is
delegated by the Board of Directors, including authority to negotiate and
implement acquisitions and to execute certain contracts and agreements with
unaffiliated third parties. The primary purposes of the Executive Committee are
(i) to exercise, during intervals between meetings of the Board of Directors and
subject to certain limitations, all of the powers of the full Board of
Directors, (ii) to monitor and advise the Board of Directors on strategic
business planning for the Company, and (iii) to deal with matters relating to
the directors of the Company. The Executive Committee did not meet during 1996.
AUDIT COMMITTEE. The Board's Audit Committee consists of Messrs. Hochstim
and Hubbell, neither of whom is an officer or employee of the Company. 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. The Audit Committee
met three times during 1996; Mr. Hochstim attended all of the meetings, and Mr.
Hubbell attended all but one of the meetings, of the Audit Committee.
COMPENSATION COMMITTEE. The members of the Compensation Committee are Mr.
Cownie and Dr. Sexton, neither of whom is an officer or employee of the Company.
The Compensation Committee reviews and recommends to the Board of Directors
compensation for the Company's officers and key employees, in addition to
administering certain of the Company's employee benefit and stock plans. The
Compensation Committee met four times during 1996; both Mr. Cownie and Dr.
Sexton attended all of the meetings.
The Board of Directors does not have a standing nominating committee. The
full Board of Directors performs the function of such a committee and will
consider nominees, if any, for election to the Board of Directors who are
recommended in accordance with the provisions of the Bylaws.
COMPENSATION OF DIRECTORS
Non-employee directors are compensated for their services according to a
standard arrangement authorized by resolution of the Board of Directors. Subject
to elections under the Director Phantom Stock Plan, each non-employee director
is entitled to an annual retainer fee of $18,000, payable in equal quarterly
installments, plus a fee of $1,000 for each Board meeting attended. Non-employee
directors attending any Committee meeting are also entitled to an additional fee
of $1,000 for each Committee meeting attended, unless the Committee meeting is
held on the day of, or on the day before or after, a meeting of the Board of
Directors. The reasonable expenses incurred by each director in connection with
the performance of the director's duties are also reimbursed by the Company. A
Board member who is also an employee of the Company will not receive
compensation for service as a director. Messrs. Siegel, A. Coppola, Anderson and
E. Coppola are the only directors who are also employees of the Company or a
subsidiary.
6
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Pursuant to the terms of the Director Plan, each director of the Company who
is not otherwise an employee of the Company or any of its subsidiaries or
affiliates, on each December 31 commencing December 31, 1994, received and
automatically will receive an annual grant of options to purchase 1,000 shares
of Common Stock having an option price equal to 100% of the fair market value of
the Common Stock at the date of grant of such option. Under the Director Plan,
each non-employee director, upon joining the Board of Directors, will also
receive an initial grant of options to purchase 2,500 shares of Common Stock
having an option price equal to 100% of the fair market value of the Common
Stock as of such date. On December 31, 1996, Messrs. Cownie, Hochstim, Hubbell
and Moore and Dr. Sexton were each granted options under the Director Plan to
purchase 1,000 shares of Common Stock at a price of $26.125 per share. These
options become fully exercisable on the date which is six months after the date
of grant. The options generally expire on the earlier of twelve months after a
termination of service or ten years after the date of grant.
The Director Phantom Stock Plan offers eligible directors the opportunity to
defer compensation for up to three years and to receive that compensation (to
the extent that it is actually earned) in shares of Common Stock rather than in
cash after termination of service or a predetermined period, and will be
accelerated in the event of a Change in Control. Such compensation includes the
annual retainer, regular meeting fees and special meeting fees payable by the
Company to an eligible director. Deferred amounts are credited as stock units at
the beginning of the period based on the then current market price of the Common
Stock. Stock unit balances are credited with dividend equivalents (priced at
market) and are ultimately paid out in shares on a 1:1 basis. A maximum of
250,000 shares of Common Stock may be issued in total under the Director Phantom
Stock Plan, subject to certain customary adjustments. In 1996, Messrs. Cownie,
Hochstim, Hubbell and Moore and Dr. Sexton were each credited with 367.95
dividend equivalent stock units under the Director Phantom Stock Plan.
EXECUTIVE AND SENIOR OFFICERS
The following table sets forth the names, ages and positions of the
executive officers of the Company, the date each became an officer of the
Company, and the number of shares of the Company's Common Stock and OP Units
beneficially owned by each of them as of March 29, 1997. Executive officers of
the Company serve at the pleasure of the Board of Directors. All of the
executive officers of the Company have employment agreements with the Company.
<TABLE>
<CAPTION>
AMOUNT AND
AMOUNT AND NATURE NATURE OF
OF BENEFICIAL BENEFICIAL
OFFICER OWNERSHIP OF PERCENT OF OWNERSHIP OF
NAME AGE POSITION SINCE COMMON STOCK(1) CLASS(2) OP UNITS(1)
- ---------------------- --- ------------------------- ----------- ------------------ --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mace Siegel........... 71 Chairman of the Board of 1993 162,525(4)(5) * 3,514,316(6)
Directors
Arthur M. Coppola..... 45 President and Chief 1993 270,475(7)(8)(17) * 1,443,316
Executive Officer
Dana K. Anderson...... 62 Vice Chairman of the 1993 103,275(4)(9) * 1,332,632(10)
Board of Directors and
Chief Operating Officer
Edward C. Coppola..... 42 Executive Vice President 1993 178,905(7)(11)(18) * 841,368
and Director of
Acquisitions
Thomas E. O'Hern...... 41 Senior Vice President, 1993 51,383(12)(13) 15) * --
Chief Financial Officer
and Treasurer
Richard A. Bayer...... 47 General Counsel and 1994 36,452(14)(16) * --
Secretary
<CAPTION>
PERCENT OF
NAME CLASS(3)
- ---------------------- ------------
<S> <C>
Mace Siegel........... 12.49%
Arthur M. Coppola..... 6.25%
Dana K. Anderson...... 5.26%
Edward C. Coppola..... 3.7%
Thomas E. O'Hern...... *
Richard A. Bayer...... *
</TABLE>
- ------------------------
* The percentage of shares beneficially owned by any executive officer does
not exceed one percent of the Company's Common Stock.
(FOOTNOTES APPEAR ON NEXT PAGE)
7
<PAGE>
(1) Except as provided under applicable state marital property laws or as
otherwise noted, each individual in the table above has sole voting and
investment power over the shares of Common Stock or OP Units listed.
(2) Assumes that none of the outstanding OP Units are redeemed for shares of
Common Stock.
(3) Assumes that all OP Units held by one person are redeemed for shares of
Common Stock and that none of the OP Units held by other persons are
redeemed for shares of Common Stock, notwithstanding the percentage
limitations under the Company's charter which limit the number of shares
that may be acquired by such person.
(4) Includes 100,000 shares subject to options granted to this executive
officer under the Company's Stock Incentive Plan which are currently
exercisable or exercisable within 60 days after the Record Date.
(5) Includes 37,700 shares held by Mr. Siegel's wife and 24,400 shares held by
his adult daughter residing at his home, as to which shares Mr. Siegel has
neither voting or investment power and disclaims any beneficial ownership.
(6) Includes 1,295,421 OP Units owned by Mr. Siegel's spouse, as to which
shares Mr. Siegel has neither voting or investment power and disclaims any
beneficial ownership.
(7) Includes 150,000 shares subject to options granted to this executive
officer under the Company's Stock Incentive Plan that are currently
exercisable or exercisable within 60 days after the Record Date.
(8) Includes 200 shares held by Mr. A. Coppola as custodian for his minor son.
(9) Includes 1,000 shares held in trust by Mr. Anderson as trustee for the
benefit of Mr. Anderson and his wife.
(10) All 1,332,632 OP Units are held by Mr. Anderson as trustee of the Anderson
Family Trust for the benefit of Mr. Anderson and his wife.
(11) Includes 10,000 shares held by the E.C. Coppola Family Limited Partnership
(an entity controlled by Mr. E. Coppola) and 1,200 shares held by Mr. E.
Coppola as custodian for his minor children.
(12) Includes 43,333 shares subject to options granted to this executive
officer under the Company's Stock Incentive Plan that are currently
exercisable or exercisable within 60 days after the Record Date.
(13) Includes 959 shares held by Mr. O'Hern as custodian for his minor sons.
(14) Includes 28,333 shares subject to options granted to Mr. Bayer under the
Company's Stock Incentive Plan that are currently exercisable or
exercisable within 60 days after the Record Date, and 900 shares held by
Mr. Bayer as custodian for his minor children.
(15) Includes 6,591 shares of restricted stock granted to Mr. O'Hern under the
Company's Stock Incentive Plan.
(16) Includes 6,219 shares of restricted stock granted to Mr. Bayer under the
Company's Stock Incentive Plan.
(17) Includes 20,250 shares of restricted stock granted to Mr. A. Coppola under
the terms of the Company's Stock Incentive Plan.
(18) Includes 15,180 shares of restricted stock granted to Mr. E. Coppola under
the terms of the Company's Stock Incentive Plan.
8
<PAGE>
Biographical information concerning Messrs. Siegel, A. Coppola, Anderson and
E. Coppola is set forth under the caption "Information Regarding Nominees and
Directors."
Thomas E. O'Hern has been Senior Vice President, Chief Financial Officer and
Treasurer of the Company and the Management Companies since July 1994. From the
formation of the Company to July 1994, Mr. O'Hern served as Senior Vice
President, Chief Accounting Officer, Treasurer and Secretary of the Company. In
addition, he served as the Senior Vice President, Chief Accounting Officer,
Treasurer and Secretary of the Management Companies from May 1993 to July 1994.
Prior to joining The Macerich Group in May 1993, Mr. O'Hern held the position of
Chief Financial Officer with Sierra Pacific Properties, Inc. from March 1992 to
May 1993 and The Riley-Pearlman Company from March 1988 to March 1992. Both
firms are owners and developers of commercial real estate, primarily retail
properties. Mr. O'Hern is a certified public accountant. He has over 17 years of
experience in retail real estate and real estate specific public accounting.
Richard A. Bayer has been General Counsel and Secretary of the Company since
July 28, 1994, and has been General Counsel and Secretary of the Management
Companies since May 23, 1994. Prior to joining the Company in May 1994, he was a
Special Counsel in the Real Estate and Natural Resources Department of the law
firm of O'Melveny & Myers LLP for three years, after serving as an Associate
there for eight years. From 1972 to 1983, Mr. Bayer held various professional
positions at the University of California, San Diego, including Resident Dean of
Revelle College, and Associate Dean of Students.
In addition, certain individuals serve as officers of the Management
Companies, and in so doing are expected to make significant contributions to the
business of the Company. Such officers, their ages and their positions are set
forth in the following table. Officers of the Management Companies serve at the
pleasure of the Board of Directors of the Management Companies.
<TABLE>
<CAPTION>
NAME AGE POSITION OFFICER SINCE
- ------------------------------ --- ------------------------------------------------------------- ---------------
<S> <C> <C> <C>
Scott W. Burchard............. 43 Senior Vice President/Co-Director of Operations 1987
Lori A. Gatto................. 35 Senior Vice President/Director of Asset Management 1992
Larry E. Sidwell.............. 53 Senior Vice President of Development 1997
Dane F. Smith................. 45 Senior Vice President/Director of Leasing 1985
Stephen L. Spector............ 38 Associate General Counsel/Director of Legal Affairs 1990
Tom Unis...................... 42 Vice President/National Leasing Manager 1996
Charles P. Waldron............ 40 Senior Vice President/Co-Director of Operations 1987
</TABLE>
Scott W. Burchard has been Senior Vice President/Co-Director of Operations
of the Management Companies since 1987. His responsibilities include supervision
of the management, marketing, maintenance, security and human resources
divisions of the Management Companies. Mr. Burchard has 20 years of experience
with The Macerich Group and the Management Companies.
Lori A. Gatto was appointed Senior Vice President/Director of Asset
Management of the Management Companies in March 1995. She is responsible for the
asset management of the Company's portfolio as well as properties managed for
third parties. She also handles joint venture relationships for the Company. Ms.
Gatto was previously a Vice President, and has been an officer of the Management
Companies since 1992. Ms. Gatto has seven years of experience with The Macerich
Group and the Management Companies. Her prior experience includes four years as
Representative of Production and Development for The Northwestern Mutual Life
Insurance Company, where she was responsible for the placement of debt and
equity real estate investments.
Larry E. Sidwell was appointed Senior Vice President of Development of the
Management Companies in February, 1997. He is responsible for the Company's
redevelopment and expansion activities involving anchor tenants. Mr. Sidwell
held various positions with The May Department Stores Company during the period
from April, 1983 until joining the Company in 1997, including Vice President of
the Western Region, and Senior Vice President of May Realty, Inc. Mr. Sidwell
was Director of Development of C.B.L & Associates, Inc. from December, 1981
until March 1983, and prior to that held various
9
<PAGE>
positions with Sears, Roebuck and Co. during the period commencing in July,
1969, including Vice President, Development for the Western Region for Homart
Development Co.
Dane F. Smith is the Senior Vice President/Director of Leasing of the
Management Companies. Mr. Smith has been Senior Vice President of the Management
Companies since March 1989. He has also served as Director of Leasing of the
Management Companies since May 1985. His responsibilities include supervision of
all leasing personnel for the Management Companies. Mr. Smith is also involved
in department store relationships and lease negotiations. Mr. Smith has 21 years
of experience with The Macerich Group and the Management Companies.
Stephen L. Spector was appointed Director of Legal Affairs of the Management
Companies in September 1995. Since 1990 he has been Associate General Counsel of
the Management Companies. His responsibilities include the supervision of the
Management Companies legal department. Mr. Spector has 8 years of experience
with The Macerich Group and the Management Companies. His prior experience
includes 5 years with Los Angeles based law firms specializing in real estate,
corporate and securities law matters.
Tom Unis was appointed Vice President, National Leasing Manager of the
Management Companies in July, 1996. He is responsible for coordinating all of
the day-to-day activities of the Management Company's leasing team. Mr. Unis was
previously a member of the Company's acquisition team, and was Director of
Specialty Leasing for the Company. Mr. Unis has 12 years of experience with The
Macerich Group and the Management Companies.
Charles P. Waldron has been Senior Vice President/Co-Director of Operations
of the Management Companies since 1987. His responsibilities include supervision
of the management, marketing, maintenance, security and human resources
divisions of the Management Companies. Mr. Waldron has 19 years of experience
with The Macerich Group and the Management Companies.
10
<PAGE>
EXECUTIVE COMPENSATION
The following table and accompanying notes show for the Chief Executive
Officer and the four next most highly compensated executive officers of the
Company, as of December 31, 1996, the aggregate indicated compensation paid by
the Company and the Management Companies to such persons during 1996, 1995 and
1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION AWARDS
COMPENSATION(1) -------------------------------
-------------------- RESTRICTED SECURITIES ALL OTHER
SALARY STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)(2) BONUS ($) AWARDS($)(3) OPTIONS/SARS(#) ($)(4)
- ------------------------------------- --------- --------- --------- ------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mace Siegel ......................... 1996 241,200 -- -- -- 9,648
Chairman of the Board of Directors 1995 241,200 -- -- -- 2,800
1994 183,628 -- -- 100,000 84,687
Arthur M. Coppola ................... 1996 261,839 -- 243,281 150,000 10,473
President and Chief Executive 1995 251,200 -- -- -- --
Officer 1994 206,952 -- -- 150,000 30,000
Dana K. Anderson .................... 1996 224,301 -- 48,656 25,000 8,972
Vice Chairman of the Board of 1995 221,200 -- -- -- --
Directors and Chief Operating 1994 214,809 -- -- 100,000 25,081
Officer
Edward C. Coppola ................... 1996 206,455 -- 189,219 100,000 11,358
Executive Vice President and 1995 201,200 -- -- -- 9,820
Director of Acquisitions 1994 191,320 -- -- 150,000 4,500
Thomas E. O'Hern .................... 1996 180,384 65,000 45,373 -- 11,576
Senior Vice President, Chief 1995 141,612 12,500 -- 50,000 10,223
Financial Officer and Treasurer 1994 127,018 50,000 -- 25,000 11,274
</TABLE>
- ------------------------
(1) The Company provides vehicle allowances to certain employees, including the
executives listed above, the value of which is not included in the table
above and which in no case exceeded the lesser of $50,000 or 10% of the
annual salary and bonus of the executive.
(2) No compensation was paid by the Company to these executive officers prior
to its initial public offering ("IPO") on March 16, 1994. Amounts given
reflect actual base salary earned and received from (i) the Company since
March 16, 1994 and (ii) the Management Companies during the period of
January 1, 1994 through March 15, 1994. In addition, salary earned but
deferred under the Company's deferred compensation plans at the election of
those officers is also included in such amounts. Under split dollar life
insurance arrangements with Messrs. Siegel, A. Coppola, Anderson and E.
Coppola, the Company has used some portion of the amounts deferred to pay
the component of the premium attributable to the whole life element of a
life insurance policy for each executive. The component of the premium
attributable to the term element of the policy is not paid by the Company.
(3) Dollar amount shown equals number of shares of restricted stock granted
multiplied by the stock price on grant date. This valuation does not take
into account the diminution in value attributable to the restrictions
applicable to the shares. The number and dollar value of shares of
restricted stock held on December 31, 1996, based on a closing price of
Macerich common stock on December 31, 1996 of $26.125, were: Arthur M.
Coppola -- 11,250 shares ($293,906); Dana K. Anderson -- 2,250 shares
($58,781); Edward C. Coppola -- 8,750 shares ($228,594); Thomas E. O'Hern
-- 2,312 shares ($60,401). Restricted stock shares vest over a five-year
period, with 20% of the shares vesting on each
(FOOTNOTES CONTINUE ON NEXT PAGE)
11
<PAGE>
of the first, second, third, fourth and fifth anniversary of the grant
date. Dividends are paid on all shares of restricted stock at the same rate
as on unrestricted shares.
(4) For each of Messrs. Siegel, A. Coppola and Anderson, amounts shown for 1996
represent matching deferred compensation contributions by the Company as
determined by the Board of Directors annually under certain deferred
compensation plans. Amounts shown for 1996 for each of Mr. E. Coppola and
Mr. O'Hern include $8,258 and $7,076, respectively, in the form of deferred
compensation contributions by the Company, and $3,100 and $4,500,
respectively, in the form of profit sharing contributions by the Company as
determined by the Board of Directors annually under the Company's 401k
profit sharing plan.
EMPLOYMENT AND TERMINATION BENEFIT AGREEMENTS
The Company entered into employment agreements on March 16, 1994 with
Messrs. Siegel, A. Coppola, Anderson and E. Coppola which provide for various
benefits, including annual base salaries of not less than $240,000, $250,000,
$220,000 and $200,000, respectively. The agreements provide that the executive
officers serve in their positions for an initial period of five years from the
date thereof. The Company also entered into an employment agreement with Mr.
O'Hern on September 1, 1996 which provides for various benefits, including an
annual base salary of not less than $175,000. Mr. O'Hern's agreement provides
that he will serve in his position for an initial period of 2 1/2 years from the
date thereof. All of the agreements also provide for automatic one-year
extensions when one year of the term, as extended, remains.
The agreements provide for various payments to the executive officer or his
beneficiaries in the event of his death, disability or termination or a change
in control. In the event of death or disability, during the remainder of the
term of the agreement, the Company will continue to pay the executive or
beneficiaries, as applicable, the executive's annual base salary at the same
time and in the same manner as if he had continued to perform services under the
agreement. In addition, the executive or his surviving spouse is entitled to
receive the same level of health insurance provided to other executives of the
Company. If the executive's employment is terminated by the Company for cause,
the agreement terminates without further obligation to the executive except for
(i) payment in cash within 30 days of the termination date of an amount equal to
the executive's annual base salary through the termination date and any accrued
vacation pay, (ii) payment of any compensation previously deferred by the
executive in accordance with the terms of the plan or agreement under which such
compensation was deferred; and (iii) payment of any amounts due pursuant to the
terms of any applicable welfare benefit plans. "Cause" means the Company, acting
in good faith based upon information been known to the Company, determines that
the employee has (i) failed to perform in a material respect his obligations
under the agreement, (ii) been convicted of a felony, or (iii) committed a
material act of fraud, dishonesty or gross misconduct that is materially
injurious to the Company.
The agreements further provide that if, within two years following a change
in control, the executive officer's employment is terminated other than for
cause or he terminates his employment for "good reason," such executive officer
will be entitled to receive by cashier's check an amount equal to the sum of the
highest annual salary in effect during the three years preceding the change in
control and the highest bonus award received under the Incentive Compensation
Plan for any calendar year prior to the change in control. "Good reason"
includes diminution in authority, reduction in compensation, change of location
or adverse modification of bonus, benefit plans or fringe benefits. However, in
no event would such termination payments exceed specified Code limits or include
parachute payments that exceed 2.99 times the average annual taxable
compensation received by the executive officer for the five years preceding the
year in which the change in control occurs. "Change in control" means the
dissolution, liquidation, merger, consolidation, reorganization, or sale of
substantially all the assets of the Company, or the acquisition of more than 20%
of the Company's securities by any person.
In addition, the Company has established an executive officer salary
deferral plan for Messrs. Siegel, A. Coppola, Anderson and E. Coppola pursuant
to which participants are entitled to defer compensation until the earlier of a
specified date established by the participant or his death. This plan provides
that participants are at all times 100% vested in all amounts credited to their
accounts.
12
<PAGE>
OPTION GRANTS
OPTION GRANTS IN FISCAL YEAR 1996. The following table sets forth the
options granted with respect to the fiscal year ended December 31, 1996 to the
Company's Chief Executive Officer and each of the four other most highly
compensated executive officers. The Company has not granted any stock
appreciation rights.
OPTION GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES OF
SHARES PERCENT OF TOTAL EXERCISE STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED OR BASE FOR OPTION TERM(1)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION --------------------------
NAME GRANTED(#)(2) FISCAL YEAR ($/SH)(3) DATE 5%($) 10%($)
- ------------------------------------- ------------- ----------------- --------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mace Siegel.......................... 0 0% -- -- -- --
Arthur M. Coppola.................... 150,000 55% $ 21.625 08/05/06 $ 2,039,250 $ 5,169,750
Dana K. Anderson..................... 25,000 9% 21.625 08/05/06 339,875 861,625
Edward C. Coppola.................... 100,000 36% 21.625 08/05/06 1,359,500 3,446,500
Thomas E. O'Hern..................... 0 0% -- -- -- --
</TABLE>
- ------------------------
(1) The amounts under the columns labeled "5%" and "10%" are included pursuant
to certain rules promulgated by the Commission and are not intended to
forecast future appreciation, if any, in the price of the Company's Common
Stock. Such amounts are based on the assumption that the named persons hold
the options granted for their full ten-year term. The actual value of the
options will vary in accordance with the market price of the Company's
Common Stock. The actual value, if any, an optionee will realize upon
exercise of an option will depend on the excess of the market value of the
Company's Common Stock over the exercise price on the date the option is
exercised.
(2) Stock options were granted under the Stock Incentive Plan on August 6, 1996
with an exercise price equal to $21.625 per share, for a term (subject to
earlier termination following a termination of employment or change in
control) of ten years, and exercisable no earlier than the first
anniversary of the date of grant. The options vest in three equal annual
installments. Options under the Stock Incentive Plan may result in payments
following the resignation or other termination of employment with the
Company or as a result of a change in control. Vested options under the
Stock Incentive Plan generally must be exercised within a period of twelve
months following a termination by reason of death or disability, and three
months following a termination for other reasons except for cause, unless
the Compensation Committee otherwise provides. The Stock Incentive Plan
permits the Compensation Committee, which administers the Stock Incentive
Plan, to accelerate, extend or otherwise modify benefits payable under the
applicable awards in various circumstances as the Compensation Committee
shall determine, including a change in control, but an option will not be
accelerated to a date less than six months after its grant date.
(3) The exercise price may be paid in any combination of cash, promissory notes
and shares of Common Stock or pursuant to certain cashless exercise
procedures, in each case as permitted under the Stock Incentive Plan. In
addition, holders may be permitted to offset or surrender shares or deliver
already owned shares in satisfaction of applicable tax withholding
requirements.
13
<PAGE>
OPTION EXERCISES AND YEAR-END HOLDINGS. None of the named executive
officers exercised any options in 1996. The following table sets forth
information regarding the number and value of options held at the end of the
1996 by the Company's Chief Executive Officer and four other most highly
compensated executive officers.
FISCAL YEAR-END 1996 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY
AT FISCAL OPTIONS AT FISCAL
YEAR-END(#) YEAR END($)(1)
------------------- --------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------- ------------------- --------------------
<S> <C> <C>
Mace Siegel....................................... 66,666/ 33,334 474,995/ 237,505
Arthur M. Coppola................................. 100,000/200,000 712,500/1,031,250
Dana K. Anderson.................................. 66,666/ 58,334 474,995/ 350,005
Edward C. Coppola................................. 100,000/150,000 712,500/ 806,250
Thomas E. O'Hern.................................. 58,333/ 16,667 396,873/ 97,919
</TABLE>
- ------------------------
(1) This amount represents solely the difference between the market value at
December 31, 1996 ($26.125) of those unexercised options which had an
exercise price below such market price (i.e., "in-the-money options") and
the respective exercise prices of the options. No assumptions or
representations regarding the "value" of such options are made or intended.
CERTAIN TRANSACTIONS
The following provides a description of certain relationships and related
transactions between various directors and executive officers of the Company and
the Company or its subsidiaries.
MANAGEMENT COMPANIES. All of the common stock of the Management Companies
is owned by the Principals, which enables the Principals to control the election
of the board of directors of each of the Management Companies. The Operating
Partnership owns all of the non-voting preferred stock of the Management
Companies, which is generally entitled to dividends equal to 95% of the net cash
flow of the Management Companies.
The Management Companies provide property management, leasing and other
related services to nine community shopping centers in which Mr. Siegel has
interests. Under the terms of the applicable management agreements, the
Management Companies are reimbursed for compensation paid to on-site employees,
leasing agents and redevelopment and construction staff, and other
administrative expenses. In addition, the Management Companies earn a management
fee equal to approximately one and one-half to five percent of gross rental
revenue. Management fees earned from services provided to these community
shopping centers during the year ended December 31, 1996 were $215,268.
Pursuant to the management agreements, the Operating Partnership and certain
Property Partnerships engage the Management Companies to provide property
management, leasing and other related services to the Centers. Under the terms
of the management agreements, the Management Companies are reimbursed for
compensation paid to on-site mall employees, leasing agents and redevelopment
and construction staff, and other administrative expenses. In addition, the
Management Companies earn a management fee typically equal to one and one-half
to five percent of gross rental revenue. Management fees paid to the Management
Companies for services provided to the Centers during the year ended December
31, 1996 were $1,788,000.
GUARANTEES. The Principals have guaranteed mortgage loans encumbering two
Centers. The aggregate principal amount of the two loans is approximately
$23,750,000, of which a portion is guaranteed by the Principals as follows: Mr.
Siegel $11,864,880; Mr. A. Coppola $4,391,220; Mr. Anderson $6,327,935; and Mr.
E. Coppola $3,708,803.
14
<PAGE>
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE STOCK PERFORMANCE
GRAPH INCLUDED IN THIS PROXY STATEMENT SHALL NOT BE DEEMED FILED UNDER THE
SECURITIES ACT OF 1933 OR THE EXCHANGE ACT EXCEPT TO THE EXTENT THE COMPANY
SPECIFICALLY INCORPORATES THIS REPORT OR THE STOCK PERFORMANCE GRAPH BY
REFERENCE THEREIN, AND SHALL NOT BE DEEMED SOLICITING MATERIAL OR OTHERWISE
DEEMED FILED UNDER EITHER OF SUCH ACTS.
REPORT OF THE COMPENSATION COMMITTEE
THE COMPENSATION COMMITTEE. Mr. Cownie and Dr. Sexton are the two members
of the Compensation Committee (the "Committee"). The Committee reviews and
recommends to the Board of Directors compensation for the Company's officers and
key employees and administers certain of the Company's employee benefit and
stock plans, with authority to authorize awards under the Company's stock
incentive plan.
OBJECTIVES OF THE COMPANY'S EXECUTIVE COMPENSATION PROGRAM. The Company's
executive compensation program is intended to attract, retain and reward
experienced, highly motivated executives who are capable of leading the Company
effectively and continuing its growth. The Company's objective has been to
utilize a combination of cash and equity-based compensation to provide
appropriate incentives for executives to achieve the business objectives of the
Company. The Committee intends to target aggregate compensation levels at rates
that are reflective of current practices of comparable companies in the real
estate investment trust ("REIT") industry, particularly companies that own
retail malls.
ELEMENTS OF THE PROGRAM. The Company's executive compensation program
includes three principal elements, each of which is intended to serve the
overall compensation philosophy of the Company. FIRST, the executive's base
salary is intended to create a minimum level of compensation that is reasonably
competitive with other retail mall REITs. SECOND, the Company uses stock
options, restricted stock and may use other stock awards under its 1994 Stock
Incentive Plan as a long-term incentive. The Company believes that these types
of awards are an important means to link the interests of management and
stockholders and to encourage management to adopt a longer term perspective.
FINALLY, the Company has established an incentive compensation plan for
executive officers under which bonuses, which may be paid in cash or in the form
of restricted stock, are awarded based upon the Committee's subjective
assessment of each individual's contributions to the Company and the achievement
of individual and corporate performance goals. The objective of the incentive
compensation plan is to motivate and reward executives for performance that
benefited the Company and to recognize the contribution of its executive
officers. The amount of the bonus award is based on a formula determined for
each executive officer by the Committee but will not exceed 70% of base salary.
The Company developed specific performance criteria for some individual
executives in 1996 (which were generally tied to increases in FFO per share and
the number of accretive acquisitions completed), and will continue to develop
specific performance criteria for additional executives during 1997. Executive
officers of the Company further participate in certain deferred compensation
plans, and the top four executive officers also participate in a split dollar
life insurance arrangement, to assist them in their tax and estate planning. In
addition, the executive officers are eligible to receive other benefits such as
medical and retirement benefits.
COMPETITIVE COMPENSATION COMPARISONS. In connection with its IPO in 1994,
the Company undertook a review of certain companies in the REIT industry of
comparable size and management structure selected by management and the
participating underwriters to determine reasonable and competitive compensation
levels for the Company's chief executive officer and other executive officers.
The review focused on the compensation levels established by those companies in
connection with their respective initial public offerings. Since the Company had
no operating history, the initial compensation of Arthur Coppola and the
executive officers was subjectively set by the Board of Directors within a range
developed through this review process. In 1995, the Committee commissioned FPL
Associates ("FPL"), an outside compensation consultant, to conduct a
comprehensive analysis of the Company's compensation program for key executives
(the "1995 Compensation Study"). In 1996, the Committee commissioned FPL to
assist the Committee in the development of a competitive total compensation
program for Mr. Coppola and the three other most senior executive officers (the
"1996 Compensation Study"). Both the 1995 and 1996 Compensation Studies included
a comparison of the Company's compensation program with the compensation
programs of similar companies in the REIT industry, including retail mall
owners.
15
<PAGE>
CEO COMPENSATION. Mr. Coppola's minimum base compensation, which is
specified in his employment agreement with the Company, was established in
connection with the Company's IPO in 1994. This employment agreement provides
for a minimum annual base salary equal to at least $250,000 until March 16,
1999. This base salary is reviewed by the Committee on an annual basis and is
subject to discretionary increases that generally are based on individual and
corporate performance and competitive, economic and other factors, including
subjective factors, deemed relevant by the Committee. The results of the 1996
Compensation Study disclosed that Mr. Coppola's base salary was low compared to
his peers in the REIT industry and including retail mall owners. As a result,
effective November 6, 1996, Mr. Coppola's salary was increased to $350,000 per
year. Mr. Coppola's aggregate salary for 1996 totalled $261,839.
In addition to Mr. Coppola's base salary, as the long-term incentive
component of Mr. Coppola's compensation, in 1996 the Committee granted to Mr.
Coppola 11,250 shares of restricted stock that will vest over a 5-year period,
and 150,000 stock options that will vest over a 3-year period, in each case
subject to certain conditions. For details of these grants, see the table
captioned "Summary Compensation Table" and the discussion beginning at page 11
of this Proxy Statement. Mr. Coppola's long-term incentive compensation grants
were based upon recommendations contained in the 1996 Compensation Study in
order to maintain Mr. Coppola's long-term incentive compensation at a level
which is competitive to that of his peers in the REIT industry and including
retail mall owners, and were made on a basis which is consistent with the
philosophy of granting long-term incentive grants made to other executives of
the Company as described elsewhere in this report..
OTHER EXECUTIVE OFFICERS. The other executive officers also received base
salary, bonus salary grants under the Company's incentive compensation plan, and
equity-based incentive compensation in the form of restricted stock awards in
1996. The amounts of the base salaries, bonus salary grants and the restricted
stock grants for the executive officers were established subjectively within the
range developed through the 1995 and 1996 Compensation Studies and the
above-described analysis of comparable compensation levels relative to each
executive officer's position with the Company. All of the named executives are
entitled to receive minimum specified annual base salaries as set forth in their
respective employment agreements with the Company, which were executed in
connection with the Company's IPO. The Committee contemplates that any annual
increases will also generally be based on substantially the same criteria that
will be used for Mr. Coppola.
For all of the executive officers, the Committee considers stock options and
restricted stock grants to be important components of the compensation mix
because they provide executives with a promise of longer term rewards directly
linked to increased share values. With respect to Mr. Siegel and Mr. Anderson,
the Committee believes increases in the value of their existing holdings of
Common Stock and OP Units currently are an appropriate long-term incentive.
However, upon the recommendation of the CEO, additional options were granted to
certain other executive officers in 1996, based on the results of the 1995 and
1996 Compensation Studies as well as the Committee's evaluation of individual
and corporate performance, including the successful completion of acquisitions
and increases in Funds From Operations.
SECTION 162(M) ISSUES. The Commission requires that this report comment
upon the Company's policy with respect to Section 162(m) of the Code, which
limits the deductibility on the Company's tax return of compensation over $1
million to certain executive officers of the Company unless, in general, the
compensation is paid pursuant to a plan which, among other conditions, is
performance-related, non-discretionary and has been approved by the Company's
stockholders. The Committee's policy with respect to Section 162(m) is to make
reasonable efforts to ensure that compensation is deductible to the extent
permitted, while preserving the authority to pay compensation that may not be
deductible if that is considered advisable to appropriately reward Company
executives for their performance. The Company did not pay any compensation
during 1996 that would be subject to the Section 162(m) limitation.
------------------------
MEMBERS OF THE COMPENSATION COMMITTEE
James S. Cownie
Dr. William P. Sexton
16
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph provides a comparison, from the Company's IPO in March
1994, of the cumulative total stockholder return (assuming reinvestment of
dividends) of the Company, the Standard & Poor's ("S&P") 500 Index and the
National Association of Real Estate Investment Trusts, Inc. ("NAREIT") Equity
REIT Total Return Index (the "NAREIT Index"), an industry index of 175 REITs
(including the Company). The NAREIT Index includes REITs with 75% or more of
their gross invested book value of assets invested directly or indirectly in the
equity ownership of real estate.
The graph assumes that the shares of the Company's Common Stock were
purchased at the IPO price of $19.00 per share and that the value of the
investment in each of the Company's Common Stock and the indices was $100 at the
beginning of the period. The graph further assumes the reinvestment of
dividends. The initial period for the NAREIT Index is February 28, 1994 because
the NAREIT Index is only published monthly based on the last closing prices of
the preceding month.
Upon written request directed to the Secretary of the Company, the Company
will provide any stockholder with a list of the REITs included in the Index. The
historical information set forth below is not necessarily indicative of future
performance. Data for the NAREIT Index and the S&P 500 Index were provided to
the Company by NAREIT and Bloomberg, respectively.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
TOTAL RETURN PERFORMANCE
<TABLE>
<CAPTION>
MACERICH COMPANY S&P 500 NAREIT EQUITY INDEX
<S> <C> <C> <C>
03/09/1994 $100.00 $100.00 $100.00
12/31/1994 117.60 100.62 97.16
04/30/1995 112.94 113.67 96.98
08/31/1995 122.10 125.28 105.72
12/31/1995 119.51 138.43 111.99
04/30/1996 118.26 148.01 115.12
08/31/1996 136.45 148.73 125.28
12/31/1996 168.92 170.07 151.49
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDING
--------------------------------------------------------------------------------------------
INDEX 3/9/94 12/31/94 4/30/95 8/31/95 12/31/95 4/30/96 8/31/96 12/31/96
- ----------------------------------- --------- ----------- --------- --------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Macerich Company................... 100.00 117.60 112.94 122.10 119.51 118.26 136.45 168.92
S&P 500............................ 100.00 100.62 113.67 125.28 138.43 148.01 148.73 170.07
NAREIT Equity Index................ 100.00 97.16 96.98 105.72 111.99 115.12 125.28 151.49
</TABLE>
17
<PAGE>
PRINCIPAL STOCKHOLDERS
Except as otherwise noted, the following table sets forth information as of
March 29, 1997 with respect to the only persons known by the Company to own
beneficially more than 5% of the outstanding shares of its Common Stock, based
upon Schedule 13G reports filed with the Commission, and the number of shares of
the Company's Common Stock beneficially owned by its executive officers and
directors as a group. Each of the persons listed below which has reported that
it may be considered a beneficial owner of more than 5% of the Company's
outstanding shares of Common Stock has certified that, to the best of its
knowledge and belief, the shares were acquired in the ordinary course of
business and were not acquired for the purpose of and do not have the effect of
changing or influencing the control of the Company and were not acquired in
connection with or as a participant in any transaction having such purpose or
effect. The number of shares of the Company's Common Stock beneficially owned by
each director is set forth in "Information Regarding Nominees and Directors" and
by each named executive officer is set forth in "Executive Officers."
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
Cohen and Steers Capital Management Inc.(1) .............................................. 3,604,500 13.96%
757 Third Avenue
New York, New York 10017
FMR Corp.(2) ............................................................................. 3,249,100 12.59%
82 Devonshire Street
Boston, Massachusetts
Alpha Assurances I.A.R.D. Mutuelle, Alpha Assurances Vie Mutuelle, AXA Assurances I.A.R.D.
Mutuelle, AXA Assurances Vie Mutuelle and AXA Courtage Assurance Mutuelle (AXA Courtage
was formerly known as Uni Europe Assurance Mutuelle), as a group (collectively, the
"Mutuelles AXA"), AXA and The Equitable Companies Incorporated (3)...................... 2,516,222 9.75%
All directors and executive officers as a group (11 persons) (4).......................... 968,480 3.66%
</TABLE>
- ------------------------
(1) The Schedule 13G indicates that the reporting entity is a registered
investment adviser and that the reporting entity has sole voting power with
respect to 3,105,100 of such shares and sole dispositive power with respect
to all of such shares.
(2) The Schedule 13G indicates that the reporting entity is a parent holding
company and as such is considered the beneficial owner in the aggregate of
the shares listed in the table. The Schedule 13G also indicates that the
reporting entity has sole voting power with respect to 128,400 of such
shares and sole dispositive power with respect to all of such shares.
(3) These entities made a joint filing on Schedule 13G indicating that the
Mutuelles AXA, as a group, AXA and the Equitable Companies were each a
parent holding company and as such were each considered the beneficial
owner of such shares. Mutuelles AXA, as a group, and AXA each expressly
declared that the filing of the Schedule 13G was not an admission that it
is, for purposes of Section 13(d) of the Exchange Act, the beneficial owner
of such shares. Certain subsidiaries of the Equitable Companies
Incorporated, The Equitable Life Assurance Society of the United States
("Equitable Life") and Alliance Capital Management L.P. ("Alliance
Capital") have voting and dispositive power with respect to these shares as
follows: Equitable Life has sole voting power with respect to 3,400 of such
shares, shared voting power with respect to 169,900 of such shares and sole
dispositive power with respect to 173,300 of such shares; and Alliance
Capital has sole voting power with respect to 2,338,322 of such shares and
sole dispositive power with respect to 2,342,922 of such shares. The
address of Alpha Assurances I.A.R.D. Mutuelle and Alpha Assurances Vie
Mutuelle is 101-100 Terrasse Boieldien, 92042 Paris La Defense, France. The
address for AXA Assurances I.A.R.D. Mutuelle and AXA Assurances Vie
Mutuelle is 21, rue de Chateaudun, 75009 Paris, France. The
18
<PAGE>
address for AXA Courtage Assurance Mutuelle (formerly known as Uni Europe
Assurance Mutuelle) is 26 rue Louis le Grand, 75002 Paris France. The
address for AXA is 23, Avenue Matignon, 75008 Paris, France. The address
for The Equitable Companies Incorporated is 787 Seventh Avenue, New York,
New York 10019.
(4) Includes options to purchase shares under the Stock Incentive Plan and
under the Director Plan which are currently exercisable or exercisable
within 60 days after the Record Date and phantom stock units credited to
certain directors under the Director Phantom Stock Plan. Assumes that none
of the OP Units held by members of the group are redeemed for shares of
Common Stock. If, notwithstanding the percentage limitations under the
Company's charter which limit the number of shares that may be acquired by
any person, all OP Units held by members of the group were redeemed for
shares of Common Stock (but none of the OP Units held by other persons were
so redeemed), the number of shares of the Company's Common Stock
beneficially owned by members of the group would be 8,100,149, which would
represent 24.13% of the class.
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND
AS THE COMPANY'S INDEPENDENT ACCOUNTANTS
INDEPENDENT ACCOUNTANTS
The Board of Directors, on the recommendation of the Audit Committee, has
appointed Coopers & Lybrand as independent accountants to audit the financial
statements of the Company for the year ending December 31, 1997. Coopers &
Lybrand has served as the principal independent accountants for the Company
since its formation in September 1993.
If the stockholders of the Corporation do not ratify the selection of
Coopers & Lybrand, or if such firm should decline to act or otherwise become
incapable of acting, or if the employment should be discontinued, the Board of
Directors, on the recommendation of the Audit Committee, will appoint substitute
independent public accountants. A representative of Coopers & Lybrand will be
present at the Annual Meeting, will be given the opportunity to make a statement
if he or she so desires and will be available to respond to appropriate
questions.
Ratification of the appointment of Coopers & Lybrand as the Company's
independent accountants requires the affirmative vote of a majority of all of
the votes cast at the Annual Meeting assuming the presence of a quorum.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF COOPERS & LYBRAND AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR
THE YEAR ENDING DECEMBER 31, 1997. PROXIES RECEIVED WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY.
PROPOSAL 3: APPROVAL OF AMENDMENTS TO AND RESTATEMENT OF THE
COMPANY'S 1994 STOCK INCENTIVE PLAN
At the annual meeting, stockholders will be asked to approve the Amended and
Restated 1994 Incentive Plan (the "Restated Plan"), adopted by the Board of
Directors (the "Board") on April 8, 1997.
SUMMARY OF AMENDMENTS
The Restated Plan incorporates amendments to the 1994 Stock Incentive Plan
(the "1994 Plan"), which has been the Company's only employee stock-based
incentive plan. The more significant amendments authorize: 600,000 additional
shares, plus 9.9% of any increase in the total outstanding shares after March
31, 1997 (other than shares issued thereafter under the Restated Plan); cash or
stock-related performance-based awards within the meaning of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"); awards to all
employees and directors (as well as other currently eligible persons); reduced
vesting periods; expanded deferred compensation alternatives; and dividend
equivalent rights ("DERs") in respect of awards.
19
<PAGE>
Although the Restated Plan is substantively similar to the 1994 Plan, the
Restated Plan imposes some material new restrictions on Awards that were not
included in the 1994 Plan: annual limits on individual grants have been imposed
to satisfy certain requirements for performance-based compensation under Section
162(m) of the Code; and option repricing authority has been eliminated. The
maximum number of shares subject to Awards granted under the Restated Plan to a
person who is a non-employee director at the time of grant is limited to 50,000
shares per individual director. (These directors also participate in the
director-only plans described beginning at page 6 of this Proxy Statement.)
The provisions of the Restated Plan, including a description of the types of
awards that may be granted under the Restated Plan, are summarized below. The
full text of the Restated Plan can be reviewed on the Securities and Exchange
Commission's Web site at http://www.sec.gov. and may be obtained, without
charge, upon request directed to:
Office of the Corporate Secretary
The Macerich Company
233 Wilshire Boulevard, No. 700
Santa Monica, CA 90401
(telephone no. (310) 394-6911)
Capitalized terms are used as defined in the Restated Plan. Telephone inquiries
concerning the Restated Plan may be directed to Richard A. Bayer, the General
Counsel and Secretary of the Company, at (310) 394-6911.
SUMMARY DESCRIPTION OF THE RESTATED PLAN
The Restated Plan continues to provide long-term, stock-based incentives and
other awards ("Awards") to employees (including all executive officers) who are
in a position to contribute to the success and growth of the Company, its
subsidiaries, and related entities, including The Macerich Partnership, L.P.,
the Macerich Management Company and the Macerich Property Management Company
(collectively, the "Related Entities"). The purpose of the Restated Plan is to
promote the success of the Company and its stockholders by providing a means to
attract and retain eligible persons and provide them long-term incentives to
improve the financial performance of the Company, directly or through Related
Entities.
The Restated Plan authorizes stock options ("Options"), stock units,
restricted stock, stock bonuses, stock appreciation rights ("SARs"), performance
shares, and DERs, as well as other Awards responsive to changing developments in
management compensation, including cash only performance-based awards. The
Restated Plan retains the flexibility to offer competitive incentives and to
tailor benefits to specific needs and circumstances.
ADMINISTRATION. The Restated Plan will continue to be administered by a
committee of the Board, currently the Company's Compensation Committee (the
"Committee"), which consists of Mr. Cownie and Dr. Sexton. The Committee
determines the nature and type of Award, the number of shares that are to be
subject to share-based Awards, and the terms and conditions of all Awards,
including the price (if any) to be paid for the shares or the Award, subject to
overall plan limits.
ELIGIBILITY. Persons eligible to receive Awards under the Restated Plan
include directors (subject to the 50,000 share limit for directors who are
neither officers nor employees of the Company), officers or employees of the
Company and its Related Entities and certain other individuals who perform
substantial services for the Company and its Related Entities. All directors and
approximately 1,000 officers and employees of the Company and its Related
Entities are considered eligible under the Restated Plan at the present time,
subject to the power of the Committee to determine all eligible persons to whom
Awards will be granted. Grants to Committee members must be ratified by the
Board.
LIMITED TRANSFERABILITY. Generally, Awards to individuals under the
Restated Plan are not transferable by a holder other than by will or the laws of
descent and distribution and are generally exercisable, during his or her
lifetime, only by the holder; any amounts payable or shares issuable pursuant to
an Award
20
<PAGE>
will be paid only to the participant or the participant's beneficiary or
representative. However, except in the case of Incentive Stock Options ("ISOs"),
the Committee may establish conditions and procedures (for example, in
connection with a holder's estate or tax planning initiatives) under which
Awards may be transferred and/or payments may be made to a third party, to the
extent permitted by law.
TYPES OF AWARDS; AUTHORIZED SHARES. The aggregate share limit under the
1994 Plan was 1,950,000. As of March 31, 1997, only 196,011 shares remained
available for additional Options and other Awards under the 1994 Plan. With the
additional share authority, the Company's aggregate plan shares would remain at
less than 10% of the outstanding shares of Common Stock and approximately 6.7%
of the combined number of shares of Common Stock and Operating Partnership
Units. (The maximum number of shares of Common Stock that may be issued as ISOs
under the Restated Plan will remain at 1,950,000 shares).
As of March 31, 1997, an additional 600,000 shares would be authorized by
the proposed amendment to the Restated Plan, for an aggregate of 2,550,000
shares, plus 9.9% of any increase in the total outstanding shares of Common
Stock of the Company after March 31, 1997 (other than an increase by reason of
the issuance of shares under the Restated Plan). The plan share limit will not
contract if shares are reacquired in the market by the Company, but the
reissuance of those reacquired shares will not further increase the share limit.
For purposes of determining the number of shares to charge against the share
limits, shares relating to any Award (or part of an Award) that fails to vest or
for other reasons is not exercised or which expires or is cancelled will again
become available for Award purposes under the Restated Plan, subject certain
limits (if applicable) in respect of performance-based awards for purposes of
Section 162(m) of the Code. Under the 1994 Plan, up to 1,693,691 shares subject
to outstanding Awards as of March 31, 1997 could become available for future
Awards under the Restated Plan to the extent the outstanding Awards terminate,
expire or fail to vest. Any subsequent use of those shares would be subject to
the individual grant limits during any period and aggregate plan limits on
shares issued.
To the extent that the exercise of an Option or other Award would cause the
holder to own more than 9.8% of the value of the Company's Common Stock or
preferred stock, the Company has the option to deliver either shares of Common
Stock or an amount in cash equal to the closing price for a share of Common
Stock reported on the New York Stock Exchange ("Fair Market Value") of such
shares.
Cash-only Awards (whether or not denominated with reference to a number of
shares) may also be issued, subject to the aggregate and individual limits under
the Restated Plan. As of March 31, 1997, no cash-only Awards had been granted
under the 1994 Plan.
The maximum number of shares subject to Options and SARs which may be
granted to any individual during any calendar year will be 300,000 shares. The
maximum individual limit on the number of shares subject to all stock-related
Awards under the Restated Plan that are granted during any calendar year is
500,000 shares.
As is customary in incentive plans of this nature, the number and kind of
shares available under the Restated Plan and then outstanding stock-based
Awards, as well as exercise or purchase prices, performance targets under
certain performance-based awards and share limits, are subject to adjustment in
the event of certain reorganizations, mergers, combinations, consolidations,
recapitalizations, reclassifications, stock splits, stock dividends, asset sales
or other similar events, or extraordinary dividends or distributions of property
to the stockholders.
STOCK OPTIONS. An Option is the right to purchase shares of Common Stock at
a future date at a specified price ("Option Price"). The Option Price may be no
less than the Fair Market Value on the date of grant. No Option may be repriced
below the fair market value of the Option on the original date of grant.
An Option may either be an ISO, as defined in the Code, or a nonqualified
stock option. ISO benefits are taxed differently from nonqualified stock
options, as described under "Federal Income Tax Treatment of Awards under the
Restated Plan" below. ISOs also are subject to more restrictive terms and are
limited in amount by the Code and are limited under the Restated Plan to no more
than 1,950,000 of the Plan shares to satisfy Code requirements.
21
<PAGE>
Full payment for shares purchased on the exercise of any Option must be made
at the time of such exercise in cash or in exchange for a promissory note by the
Option holder in favor of the Company (subject to approval by the Committee), in
shares of Common Stock having a Fair Market Value equal to the Option Price, or
in any combination of cash, promissory notes and shares or pursuant to certain
cashless exercise procedures, as may be permitted under the Restated Plan. In
addition, Option holders may be permitted by the Committee to offset or
surrender stock or deliver already owned stock in satisfaction of applicable tax
withholding requirements.
Subject to early termination or acceleration provisions (which are
summarized below), an Option generally will be exercisable, in whole or in part,
from the date specified in the related Award agreement until the expiration date
determined by the Committee. Generally speaking, an Option or SAR will not be
exercisable after more than 10 years after its date of grant. Unless the
Committee provides otherwise in the Award agreement, Options become exercisable
in three equal installments, commencing on the first anniversary of the grant
date.
The Committee may modify or terminate any outstanding Option held by a
participant, subject only to the general limitations under the Restated Plan or
under applicable law and, in the case of an adverse change, with the consent of
the holder.
STOCK APPRECIATION RIGHTS. In its discretion, the Committee may grant an
SAR concurrently with or after the grant of an Option, and with reference to all
or a portion of the shares covered by such Options. An SAR granted in connection
with an Option is the right to receive payment of an amount equal to the excess
of the Fair Market Value of Common Stock on the date of exercise of the SAR over
the Option Price of the related Option (the "spread value"). The base price of
an SAR granted after the grant of an Option may be less than the Fair Market
Value of Common Stock at the date of grant of the SAR, but if so, may not be
less than the Option exercise price. An SAR granted in connection with an Option
is only exercisable when and to the extent that the related Option is
exercisable. Upon exercise of an SAR, the holder receives the spread value in
shares of Common Stock (valued at Fair Market Value at date of exercise), in
cash, or in a combination of Common Stock and cash. A stock appreciation right
may also be granted independently of an Option, as a Section 162(m)
Performance-Based Award (as defined below). SARs limited to certain periods of
time around a major event, such as a reorganization or change in control, may
also be granted under the Restated Plan.
RESTRICTED STOCK AWARDS. A restricted stock Award is an Award for a fixed
number of shares of Common Stock subject to restrictions. The Committee
specifies the price, if any, the participant must pay for such shares and the
restrictions (which may include, for example, continued service only and/or
performance standards) imposed on such shares which with limited exception
cannot terminate earlier than one year after the Award date. Restricted stock
awarded to a participant may not be voluntarily or involuntarily sold, assigned,
transferred, pledged or encumbered during the restricted period. Restricted
stock awards for 107,656 shares (only 5.5% of the 1994 Plan share limit or less
than 1% of the outstanding Common Stock) had been granted under the 1994 Plan as
of March 31, 1997.
STOCK BONUSES. The Committee may grant a stock bonus to any eligible person
to reward exceptional or special services, contributions or achievements in the
manner and on such terms and conditions (including any restrictions on such
shares) as determined from time to time by the Committee. The number of shares
so awarded shall be determined by the Committee and may be granted independently
or in lieu of a cash bonus.
PERFORMANCE-BASED AWARDS UNDER SECTION 162(M); BUSINESS CRITERIA. The bonus
plan referenced in the 1994 Plan has been replaced with more explicit
performance Award features in the Restated Plan. In addition to Awards to any
salaried employee or officer ("Eligible Employee") under other provisions of the
Restated Plan, the Committee may grant to any Eligible Employee
performance-based Awards designed to satisfy the requirements for deductibility
under Section 162(m) of the Code. Awards will be based on the performance of the
Company and/or one or more of its Related Entities in respect of specified
business criteria (collectively, "Section 162(m) Performance-Based Awards").
22
<PAGE>
The business criteria on which performance goals will be established are
defined in Exhibit A and include one or more of the following:
<TABLE>
<S> <C>
- - funds from operations - occupancy gains
- - stock appreciation - EBITDA
- - total stockholder return - overall square footage growth
</TABLE>
These Awards are earned and payable ONLY if performance reaches specific,
preestablished performance goals approved by the Committee in advance of
applicable deadlines under the Code and while the performance relating to the
goals remains substantially uncertain. Performance goals may be adjusted to
reflect certain changes, including reorganizations, liquidations and
capitalization and accounting changes, to the extent permitted by Section
162(m). Performance criteria and goals may be applied on a consolidated,
subsidiary, division or business segment basis.
Section 162(m) Performance-Based Awards may be stock-based (payable in stock
only or in cash or stock) or may be cash-only Awards. Grants of this type of
Award in any fiscal year to any participant may not be made with reference to
more than 500,000 shares. Cash-only Awards to any participant that are payable
solely in cash and without reference to any number of shares are limited to the
lesser of 200% of base salary as of the beginning of the period or $600,000,
times the number of years (not more than 10) to which the Awards relate in the
applicable performance periods. Before any of these Section 162(m)
Performance-Based Awards is paid, the Committee must certify that the
performance goals have been satisfied to the extent required by Section 162(m).
The Committee will have discretion to determine the performance goals and
restrictions or other limitations of the individual Awards and is expected to
reserve "negative" discretion to reduce payments below maximum Award limits. No
cash-only Awards have yet been made under the Restated Plan.
STOCK UNITS. The Restated Plan authorizes the Committee to grant stock unit
Awards to certain key employees and also permit a participant to defer all or a
portion of the compensation the participant could otherwise elect to defer under
any Company plan, or in respect of any Award under the Restated Plan. The
Committee may determine the terms of a stock unit Award, the form of payment of
stock units and the vesting and payout provisions of the Award.
DIVIDEND EQUIVALENT RIGHTS. The Restated Plan authorizes stock-based
Awards, including Options, to be granted with or without DERs. DERs are amounts
payable in cash or stock (or additional stock units that may be paid in stock or
cash) equal to the amount of dividends that would have been paid on shares had
the shares been outstanding from the date the stock-based Award was granted. The
Committee, at the time of grant, determines the time and conditions of payment
and may limit amounts payable as DERs. The Committee also may impose individual
or corporate performance conditions on the payment of DERs or condition the
payment right on certain other events.
LOANS TO PURCHASE SHARES. The Restated Plan continues to authorize loans to
finance Awards and clarifies provisions for stock purchase loans to eligible
employees. Loans associated with the exercise or vesting of an Award may not
exceed the exercise price and applicable withholding taxes; loans to purchase
stock without reference to exercise or vesting, such as in furtherance of stock
ownership guidelines or when the Committee otherwise believes that the loan can
reasonably otherwise be expected to benefit the Company, may not exceed
$1,000,000 to any individual. Loans under the Restated Plan must be full
recourse loans and secured by the stock purchased, but may include favorable
(below market) terms as to interest rates or other provisions. The term of any
loan may not exceed 10 years.
TERMINATION OF EMPLOYMENT. On or after specified periods following a
termination of service for any reason, unvested restricted stock may be
forfeited, unexercisable Options may terminate, and Options which have become
exercisable may expire, unless the Committee otherwise provides. Such
post-service exercise periods cannot exceed the term of the Options. SARs have
the same termination provisions as any Options to which they relate. With
respect to other types of Awards which may be granted under the
23
<PAGE>
Restated Plan, the Committee will establish a participant's rights and benefits
in the event of a termination of service and in doing so may make distinctions
based upon the cause of termination or other factors.
ACCELERATION OF AWARDS; POSSIBLE EARLY TERMINATION OF AWARDS. The Committee
has the discretion to accelerate the exercisability or vesting of Awards upon
the occurrence of, or in anticipation of certain events including, a Change in
Control Event (as defined in the Restated Plan). Acceleration of Awards is
subject to compliance with applicable laws. A Change of Control Event under the
Restated Plan generally includes (i) an acquisition by a person or group
(subject to certain exceptions) of securities representing 20% or more of the
combined voting power of the Company's outstanding securities, (ii) approval by
the Company's stockholders of a reorganization, merger, consolidation or sale
under certain circumstances in which the stockholders of the Company (after
giving effect to the transaction) own less than 50% of the voting securities of
the combined entity, or disposition of all or substantially all of the assets of
the Company under certain circumstances or (iii) approval by the Company's
stockholders of a complete liquidation or dissolution of the Company. An Award
may terminate if it is not exercised or vested by the time of any event or
transaction that the Company does not survive, unless provision has been made
for the assumption or survival of the Award by adjustments in respect of the
underlying shares.
TERMINATION OF OR CHANGES TO THE RESTATED PLAN. The Board may, at any time,
terminate or from time to time amend, modify or suspend the Restated Plan in
whole or in part. To the extent then required by any applicable law, any
amendment will be subject to stockholder approval. Unless previously terminated
by the Board, the Restated Plan will terminate on March 3, 2004. Termination of
the Restated Plan will not affect then outstanding Awards or the Committee's
authority as to those Awards. Awards may be amended subject to the consent of
the holder if the amendment materially and adversely affects the holder.
SECURITIES UNDERLYING AWARDS. The market value of the Common Stock as of
April 2, 1997 was $27.50 per share. Upon receipt of stockholder approval, the
Company plans to register under the Securities Act of 1933 the additional shares
that will be available under the Restated Plan.
FEDERAL INCOME TAX TREATMENT OF AWARDS UNDER THE RESTATED PLAN
With respect to nonqualified stock options, the Company is generally
entitled to deduct an amount equal to the difference between the option exercise
price and the Fair Market Value of the shares at the time of exercise. With
respect to ISOs, the Company is generally not entitled to a similar deduction
either upon grant of the option or at the time the option is exercised. If ISO
shares are not held for specified qualifying periods, however, the difference
between the Fair Market Value of the shares at the date of exercise (or, if
lower, the sale price) and the cost of such shares is taxed as ordinary income
(and the Company will receive a corresponding deduction) in the year the shares
are sold.
The current federal income tax consequences of other Awards authorized under
the Plan generally follow certain basic patterns: SARs are taxed and deductible
in substantially the same manner as nonqualified stock options; nontransferable
restricted stock subject to a substantial risk of forfeiture results in income
recognition equal to the excess of the fair market value over the price paid (if
any) only at the time the restrictions lapse (unless the recipient elects to
accelerate recognition as of the date of grant); performance share Awards and
DERs generally are subject to tax at the time of payment; unconditional stock
bonuses are generally subject to tax measured by the value of the payment
received; cash-based Awards generally are subject to tax at the time of payment;
and compensation otherwise effectively deferred is taxed when paid. In each of
the foregoing cases, the Company will generally have a corresponding deduction
at the time the participant recognizes income.
If, as a result of the occurrence of a change in control (as this term is
used under the Code), a participant's benefits are increased (e.g., an Option
holder's Options or rights become exercisable, the restrictions on Awards lapse,
or shares are issued), the participant may be deemed to have received a
"parachute payment". If the economic value of the acceleration, and/or grant,
together with any other benefits which are deemed to be contingent upon the
change in control, equals or exceeds a threshold amount equal to 300% of the
person's average annual taxable compensation over the five calendar years
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preceding the year in which the change in control occurs, the excess of the
total of such amounts over such person's average annual taxable compensation
generally will be subject to a 20% non-deductible excise tax in addition to any
income tax payable. The Company will not be entitled to a deduction for any
benefits or payments that are subject to the excise tax.
Further, if the compensation attributable to Awards to persons subject to
Section 162(m) limits is not "performance-based" within the meaning of Section
162(m) of the Code, the Company may not be permitted to deduct that compensation
to the extent the individual's aggregate compensation exceeds $1,000,000 in any
year. In light of uncertainties regarding the ultimate interpretation of Section
162(m), no assurances can be given that all compensation intended to qualify as
"performance-based compensation" under Section 162(m) will in fact be
deductible.
The above tax summary is based upon federal income tax laws in effect as of
March 31, 1997.
SPECIFIC BENEFITS
As of March 31, 1997, the number of Options granted under the 1994 Plan to
current named executive officers was 100,000, 300,000, 125,000, 250,000 and
75,000 for Mace Siegel, Arthur M. Coppola, Dana K. Anderson, Edward C. Coppola
and Thomas E. O'Hern, respectively, and 900,000 shares to all executive officers
as a group; the number of Options granted under the 1994 Plan to all employees
(and other eligible persons), including all current officers who are not
executive officers, as a group, was 827,000.
At that date, the number of shares of Restricted Stock granted under the
1994 Plan to current executive officers was 0, 20,250, 2,250, 15,180 and 6,591
for Mace Siegel, Arthur M. Coppola, Dana K. Anderson, Edward C. Coppola and
Thomas E. O'Hern, respectively, and 50,490 shares to all executive officers as a
group; and the number of shares of Restricted Stock granted under the 1994 Plan
to all employees (and other eligible persons), including all current officers
who are not executive officers, as a group, was 57,166.
No other types of Awards had been granted under the 1994 Plan as of March
31, 1997.
The number, amount and type of Awards to be received by or allocated to
eligible persons under the Restated Plan cannot be determined at this time. The
Committee has not yet considered any specific Awards under the additional
authority of the Restated Plan. If the Restated Plan had been in effect in 1996,
the Company expects that the grants would not have been substantially different
from those reported in the table encaptioned "Option Grants In Fiscal Year 1996"
at page 13 (the "Option Grants Table") and in the Summary Compensation Table at
page 11 of this Proxy Statement.
VOTE REQUIRED; RECOMMENDATION OF YOUR BOARD OF DIRECTORS "FOR" THIS PROPOSAL
The Board believes that the Restated Plan will promote the interests of the
Company and its stockholders and continue to enable the Company to attract,
retain and reward persons important to the Company's success and to provide
incentives based on the attainment of corporate objectives and increases in
stockholder value. All Directors are eligible for Awards under the Restated
Plan.
Approval of the Restated Plan requires the affirmative vote of a majority of
all of the votes cast on the matter at the Annual Meeting and that the total
number of votes cast on the matter represents over 50% of the outstanding shares
of Common Stock. Broker non-votes and abstentions on this proposal have the
effect described on page 1 of this Proxy Statement.
THE BOARD HAS APPROVED AND RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RESTATED PLAN. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES.
25
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OTHER MATTERS
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will be
paid by the Company. Solicitation will be made primarily by mail, but regular
employees of the Company, without additional remuneration, may solicit proxies
by telephone, telegram, facsimile and personal interviews. The Company will also
request persons, firms and corporations holding shares in their names or in the
names of their nominees, which are beneficially owned by others, to send proxy
materials to and obtain proxies from such beneficial owners. The Company will
reimburse such holders for their reasonable expenses.
The Company has retained D.F. King & Co., Inc. to assist in the solicitation
of proxies. D.F. King & Co., Inc. will be paid approximately $3,800, plus
out-of-pocket expenses, for its services.
STOCKHOLDER PROPOSALS
For a matter to be properly presented at the Annual Meeting by a
stockholder, the Secretary of the Company must have received written notice
thereof after February 13, 1997 and on or before March 15, 1997, as specified in
the Company's Bylaws.
A stockholder proposal submitted pursuant to Exchange Act Rule 14a-8 for
inclusion in the Company's proxy statement and form of proxy for the 1998 annual
meeting of stockholders must be received by the Company by December 16, 1997.
Such a proposal must also comply with the requirements as to form and substance
established by the Commission for such proposals. A stockholder otherwise
desiring to bring discussion before an annual meeting of stockholders (including
any proposal relating to the nomination of a director to be elected to the Board
of Directors) must submit a proposal that is received at the principal executive
offices of the Company not less than 60 nor more than 90 days prior to the first
anniversary of the previous year's annual meeting. Any such proposal should be
mailed to: The Macerich Company, 233 Wilshire Boulevard, No. 700, Santa Monica,
California 90401, Attn: Secretary. Copies of the charter and Bylaws may be
obtained by providing a written request to the Secretary of the Company at that
address.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Commission and the New York Stock Exchange. Officers,
directors and greater than 10% stockholders are required by the Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1996, all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than 10% beneficial owners were satisfied.
OTHER MATTERS
The Board of Directors does not know of any matter other than those
described in this Proxy Statement which will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO THE
COMPANY. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD
TODAY.
26
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EXHIBIT A
PERFORMANCE-BASED BUSINESS CRITERIA
FUNDS FROM OPERATIONS means Funds from Operations, as defined by The
National Association of Real Estate Investment Trusts at the time of the grant
of an Award, for the applicable period, as reflected in the Corporation's
periodic financial reports for the period.
STOCK APPRECIATION means an increase in the price or value of the Common
Stock of the Corporation after the date of grant of an Award and during the
applicable period.
TOTAL STOCKHOLDER RETURN means the aggregate Common Stock price appreciation
and dividends paid (assuming full reinvestment of dividends) during the
applicable period.
OCCUPANCY GAINS means increases in the occupancy level (leased and occupied
areas) of malls and freestanding store area (excluding Anchors) (owned at both
the beginning and end of the applicable period) during the period, measured as a
percentage of the gross leasable/occupiable area of such properties, as reported
to the Committee for inclusion in the Corporation's reports to the SEC for the
applicable period.
EBITDA means earnings before interest, taxes, depreciation and amortization
for the applicable period, as reflected in the Corporation's financial reports
for the applicable period.
OVERALL SQUARE FOOTAGE GROWTH means the increase, between the beginning and
end of the applicable period, in the total square feet of gross leasable mall
and free standing stores area (excluding Anchors), as reported to the Committee
for inclusion in the Corporation's reports to the SEC for the applicable period.
Except as otherwise expressly provided, all financial terms are used as
defined under Generally Accepted Accounting Principles (GAAP) and all
determinations shall be made in accordance with GAAP, as applied by the
Corporation in the preparation of its periodic reports to stockholders.
A-1
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(The following copy of the Amended and Restated 1994 Incentive Plan is filed
as an appendix to the proxy materials filed with the Securities and Exchange
Commission pursuant to Instruction 3 to Item 10 of Schedule 14A, but is not
part of the proxy statement and does not otherwise constitute soliciting
material.)
THE MACERICH COMPANY
AMENDED AND RESTATED 1994 INCENTIVE PLAN
(AS AMENDED EFFECTIVE APRIL 8, 1997)
<PAGE>
TABLE OF CONTENTS
Page
------
I. THE PLAN. . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration and Authorization; Power and
Procedure. . . . . . . . . . . . . . . . . . . . 1
1.3 Participation. . . . . . . . . . . . . . . . . . 3
1.4 Shares Available for Awards. . . . . . . . . . . 3
1.5 Grant of Awards. . . . . . . . . . . . . . . . . 4
1.6 Award Period . . . . . . . . . . . . . . . . . . 4
1.7 Limitations on Exercise and Vesting of Awards. . 4
1.8 Notes to Finance Exercise or Purchase. . . . . . 5
1.9 No Transferability of Awards . . . . . . . . . . 6
II. EMPLOYEE OPTIONS. . . . . . . . . . . . . . . . . . . 6
2.1 Grants . . . . . . . . . . . . . . . . . . . . . 6
2.2 Option Price . . . . . . . . . . . . . . . . . . 7
2.3 Limitations on Grant and Terms of Incentive Stock
Options. . . . . . . . . . . . . . . . . . . . . 7
2.4 Limits on 10% Holders. . . . . . . . . . . . . . 8
2.5 Award Changes/Limits on Repricing. . . . . . . . 8
2.6 Limitation on Exercise of Option Award.. . . . . 9
III. STOCK APPRECIATION RIGHTS.. . . . . . . . . . . . . . 9
3.1 Grants . . . . . . . . . . . . . . . . . . . . . 9
3.2 Exercise of Stock Appreciation Rights. . . . . . 9
3.3 Payment. . . . . . . . . . . . . . . . . . . . . 10
IV. RESTRICTED STOCK AWARDS . . . . . . . . . . . . . . . 11
4.1 Grants . . . . . . . . . . . . . . . . . . . . . 11
4.2 Restrictions . . . . . . . . . . . . . . . . . . 11
4.3 Return to the Corporation. . . . . . . . . . . . 12
V. STOCK BONUSES, OTHER CASH OR STOCK PERFORMANCE-BASED
AWARDS, STOCK UNITS AND DIVIDEND EQUIVALENT RIGHTS. . 12
5.1 Grants of Stock Bonuses. . . . . . . . . . . . . 12
5.2 Other Performance-Based Awards . . . . . . . . . 12
5.3 Stock Units. . . . . . . . . . . . . . . . . . . 14
5.4 Dividend Equivalent Rights . . . . . . . . . . . 15
VI. OTHER PROVISIONS. . . . . . . . . . . . . . . . . . . 15
6.1 Rights of Eligible Persons, Participants and
Beneficiaries. . . . . . . . . . . . . . . . . . 15
6.2 Adjustments; Early Termination . . . . . . . . . 16
6.3 Termination of Employment; Termination of
Subsidiary Status. . . . . . . . . . . . . . . . 17
6.4 Compliance With Laws . . . . . . . . . . . . . . 19
6.5 Tax Withholding. . . . . . . . . . . . . . . . . 20
6.6 Plan Amendment, Termination and Suspension . . . 20
i
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6.7 Privileges of Stock Ownership. . . . . . . . . . 21
6.8 Effective Date of This Plan. . . . . . . . . . . 21
6.9 Term of This Plan. . . . . . . . . . . . . . . . 21
6.10 Governing Law/Construction/Severability. . . . . 21
6.11 Captions . . . . . . . . . . . . . . . . . . . . 22
6.12 Non-Exclusivity of Plan. . . . . . . . . . . . . 22
VII. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 22
7.1 Definitions. . . . . . . . . . . . . . . . . . . 22
ii
<PAGE>
THE MACERICH COMPANY
1994 INCENTIVE PLAN
(AS AMENDED EFFECTIVE APRIL 8, 1997)
I. THE PLAN.
1.1 PURPOSE.
The purpose of this Plan is to promote the success of
the Company and the interests of its stockholders by providing an
additional means through the grant of Awards to attract,
motivate, retain and reward employees, including officers, by
providing them long-term incentives to improve the financial
performance of the Company. "Corporation" means The Macerich
Company, a Maryland corporation, and its successors, and
"Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are
defined in Article VII.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
(a) COMMITTEE. This Plan shall be administered by and
all Awards to Eligible Persons shall be authorized by the
Committee. Action of the Committee with respect to the adminis-
tration of this Plan shall be taken pursuant to a majority vote
or by written consent of its members. Where the Committee
authorizes the issuance of shares for consideration other than
money, the Committee shall adopt a resolution which fairly
describes such consideration and states (i) its actual value as
determined by the Committee; or (ii) that the Committee has
determined that the actual value is or will be not less than a
certain sum.
(B) PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE.
Subject to the express provisions of this Plan, the Committee
shall have the authority:
(i) to determine the particular Eligible Persons who
will receive Awards;
(ii) to grant, directly or indirectly through its
Subsidiaries, Awards to Eligible Persons, determine the
price at which securities will be offered or awarded and the
amount of securities to be offered or awarded to any of such
persons, and determine the other specific terms and
conditions of such Awards consistent with the express limits
of this Plan, and establish the installments (if any) in
which such Awards shall become exercisable or shall vest, or
determine that no delayed exercisability or vesting is
1
<PAGE>
required, and establish the events of termination or
reversion of such Awards;
(iii) to approve the forms of Award Agreements (which
need not be identical either as to type of award or among
Participants);
(iv) to construe and interpret this Plan and any
agreements defining the rights and obligations of the
Company and Participants under this Plan, further define the
terms used in this Plan, and prescribe, amend and rescind
rules and regulations relating to the administration of this
Plan;
(v) to cancel, modify, or waive the Corporation's
rights with respect to, or modify, discontinue, suspend, or
terminate any or all outstanding Awards held by Eligible
Persons, subject to any required consent under Section 6.6;
(vi) to accelerate the exercisability or the vesting of
any Awards under such circumstances as the Committee shall
determine, including a Change in Control Event, or to extend
the exercisability or extend the term of any or all such
outstanding Awards within the term limits on Awards under
Section 1.6; and
(vii) to make all other determinations and take such
other action as contemplated by this Plan or as may be
necessary or advisable for the administration of this Plan
and the effectuation of its purposes.
(c) BINDING DETERMINATIONS. Any action taken by, or
inaction of, the Corporation, any Subsidiary, the Board or the
Committee relating or pursuant to this Plan shall be within the
absolute discretion of that entity or body and shall be conclu-
sive and binding upon all persons. No member of the Board or
Committee, or officer of the Corporation or any Subsidiary, shall
be liable for any such action or inaction of the entity or body,
of another person or, except in circumstances involving bad
faith, of himself or herself. Subject only to compliance with
the express provisions hereof, the Board and Committee may act in
their absolute discretion in matters within their authority
related to this Plan.
(d) RELIANCE ON EXPERTS. In making any determination
or in taking or not taking any action under this Plan, the
Committee or the Board, as the case may be, may obtain and may
rely upon the advice of experts, including employees of and
professional advisors to the Corporation. No director, officer
or agent of the Company shall be liable for any such action or
determination taken or made or omitted in good faith.
2
<PAGE>
(e) DELEGATION. The Committee may delegate
ministerial, non-discretionary functions to individuals who are
officers or employees of the Company.
1.3 PARTICIPATION.
Awards may be granted by the Committee only to those
persons that the Committee determines to be Eligible Persons. An
Eligible Person who has been granted an Award may, if otherwise
eligible, be granted additional Awards if the Committee shall so
determine subject to the limitations otherwise provided in this
Plan.
1.4 SHARES AVAILABLE FOR AWARDS; SHARE LIMITS.
Subject to the provisions of Section 6.2, the stock
that may be delivered under this Plan shall be shares of the
Corporation's authorized but unissued Common Stock. The shares
may be delivered for any lawful consideration, but not for less
than the minimum lawful consideration under applicable state law.
(a) NUMBER OF SHARES. The maximum number of shares of
Common Stock that may be delivered pursuant to Awards granted to
Eligible Persons under this Plan shall not exceed 2,550,000
shares, plus 9.9% of any increase in the total outstanding shares
of the Company after March 31, 1997 (other than an increase as a
result of the issuance of share under this Plan), subject to
adjustments contemplated by Section 6.2. The Plan share limit
may not contract if shares are reacquired by the Company after an
increase has been made, but neither shall the limit increase if
the reacquired shares are reissued.
(b) CALCULATION OF AVAILABLE SHARES AND REPLENISHMENT.
Shares subject to outstanding Awards shall be reserved for
issuance. If any Option or other right to acquire shares of
Common Stock under or receive cash or shares in respect of an
Award shall expire or be cancelled or terminated without having
been exercised or paid in full, or any Common Stock subject to a
Restricted Stock Award or other Award shall not vest or be
delivered, the unpurchased, unvested or undelivered shares of
Common Stock subject thereto shall again be available for the
purposes of this Plan, subject only to any applicable limitations
for the preservation of deductibility under Section 162(m) of the
Code.
(c) PROVISIONS FOR CERTAIN STOCK-BASED CASH AWARDS.
The number of stock-related Awards actually paid in cash shall be
determined by reference to the number of shares by which the
value or price of the Award is measured and shall not, together
with the aggregate number of shares theretofore delivered and
shares subject to then outstanding Awards payable in shares (or
alternatively payable in cash or shares) under this Plan, exceed
3
<PAGE>
the aggregate or applicable individual limits of Section 1.4,
subject to adjustments under this Section 1.4 and Section 6.2.
(d) ISO LIMIT. The maximum number of shares of Common
Stock that may be issued under Incentive Stock Options under the
Plan shall not exceed 1,950,000 shares.
(e) INDIVIDUAL LIMITS. Notwithstanding anything
contained herein to the contrary, the aggregate number of shares
of Common Stock subject to Options and Stock Appreciation Rights
("SARs") granted during any calendar year to any individual shall
be limited to 300,000, and the maximum individual limit on the
number of shares in the aggregate subject to all stock-related
Awards under this Plan granted during any calendar year shall be
500,000, subject to adjustments under Section 6.2.
(f) DIRECTOR LIMITS. The maximum number of shares
that may be issued under Awards under this Plan that are granted
to any director who is not as of the applicable date or dates of
grant an employee or officer shall be 50,000, subject to
adjustments under Section 6.2. Any Award issued to a member of
the Committee shall be subject to approval or ratification by the
Board.
1.5 GRANT OF AWARDS.
Subject to the express provisions of this Plan, the
Committee shall determine those individuals who are Eligible
Persons, the number of shares of Common Stock subject to each
Award, the price (if any) to be paid for the shares or the Award
and the other terms of the Award. Each Award shall be evidenced
by an Award Agreement signed by the Corporation and, if required
by the Committee, by the Participant. Each Award shall be
subject to the terms and conditions set forth in this Plan and
such other terms and conditions established by the Committee as
are not inconsistent with the specific provisions of this Plan.
1.6 AWARD PERIOD.
Any Option, SAR, warrant or similar right shall expire
and any other Award shall either vest or be forfeited not more
than 10 years after the date of grant; provided, however, that
any payment of cash or delivery of stock pursuant to an Award may
be delayed until a future date if specifically authorized by the
Committee in writing.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
(a) PROVISIONS FOR EXERCISE. Unless the Committee
otherwise provides, once exercisable an Award shall remain
exercisable until the expiration or earlier termination of the
Award. Unless the Committee otherwise provides, Options shall
4
<PAGE>
first become exercisable in three equal annual installments,
commencing on the first anniversary of the Award Date.
(b) PROCEDURE. Any exercisable Award shall be deemed
to be exercised when the Corporation receives written notice of
such exercise from the Participant, together with any required
payment made in accordance with Section 2.2.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share
interests shall be disregarded, but may be accumulated. The
Committee, however, may determine in the case of Eligible Persons
that cash, other securities, or other property will be paid or
transferred in lieu of any fractional share interests. No fewer
than 100 shares may be purchased on exercise of any Award at one
time unless the number purchased is the total number at the time
available for purchase under the Award.
1.8 NOTES TO FINANCE EXERCISE OR PURCHASE.
If the Committee, in its sole discretion approves, and
subject to Section 6.4, the Corporation may accept one or more
notes from any Eligible Person (i) in connection with the
exercise, receipt or vesting of any outstanding Award or (ii) in
such other circumstances to facilitate the purchase of stock by
an eligible employee or officer as the Committee determines to be
reasonably expected to benefit the Corporation; provided that any
such note shall be subject to the following terms and conditions:
(a) The principal of the note shall not exceed the
amount required to be paid to the Corporation upon the exercise
or receipt of one or more Awards under this Plan and the note
shall be delivered directly to the Corporation in consideration
of such exercise or receipt.
(b) The initial term of the note shall be determined
by the Committee; provided that the term of the note, including
extensions, shall not exceed ten(10) years.
(c) The note shall provide for full recourse to the
Participant and shall bear interest at a rate determined by the
Committee but not less than the interest rate necessary to avoid
the imputation of interest under the Code.
(d) The unpaid principal balance of the note shall
become due and payable on the 10th business day after Termination
of Employment of the Participant; provided, however, that if a
sale of the shares financed by the note would cause such
Participant to incur liability under Section 16(b) of the
Exchange Act, the unpaid balance shall become due and payable on
the 10th business day after the first day on which a sale of such
shares could have been made without incurring such liability,
assuming for these purposes that there are no other transactions
5
<PAGE>
(or deemed transactions) in securities of this Corporation by the
Participant subsequent to such termination.
(e) In the case of a note issued other than in
connection with the receipt, exercise or vesting of another Award
or in any case if required by the Committee or by applicable law,
(i) the note shall be secured by a pledge of any shares or rights
financed thereby (and such other collateral as may be required by
the Committee), and (ii) the maximum principal amount of the note
may not exceed $1,000,000.
(f) The terms, repayment provisions, and collateral
release provisions of the note and the pledge securing the note
shall conform with applicable rules and regulations of the
Federal Reserve Board as then in effect.
1.9 NO TRANSFERABILITY OF AWARDS; LIMITED EXCEPTIONS.
Awards may be exercised only by, and amounts payable or
shares issuable pursuant to an Award shall be paid only to (or
registered only in the name of), the Participant or, if the
Participant has died, the Participant's Beneficiary or, if the
Participant has suffered a Disability, the Participant's Personal
Representative, if any, or if there is none, the Participant, or,
(except in the case of Incentive Stock Options) to the extent
expressly permitted by the Committee and applicable law to such
persons and pursuant to such conditions and procedures as the
Committee may establish. Other than by will or the laws of
descent and distribution or (except in the case of Incentive
Stock Options) as the Committee may otherwise expressly permit,
no right or benefit under this Plan or any Award (other than
shares issued without further restrictions) shall be
transferrable by the Participant or shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge (other than to the Corporation) and
any such attempted action shall be void. The Corporation shall
disregard any attempt at transfer, assignment or other alienation
prohibited by the preceding sentences and shall pay or deliver
such cash or shares of Common Stock in accordance with the
provisions of this Plan. The designation of a Beneficiary for
purposes hereof shall not constitute a transfer for these
purposes.
II. EMPLOYEE OPTIONS.
2.1 GRANTS.
One or more Options may be granted under this Article
to any Eligible Person. Each Option granted shall be designated
by the Committee in the applicable Award Agreement as either a
Nonqualified Stock Option or an Incentive Stock Option.
Notwithstanding anything contained herein to the contrary,
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Incentive Stock Options may be granted only to Eligible Persons
who are employed by the Corporation or a corporation which is
either a direct Subsidiary of the Corporation or an indirect
Subsidiary through an unbroken chain of corporations.
2.2 OPTION PRICE.
(a) PRICING LIMITS. The purchase price per share of
the Common Stock covered by each Option, PROVIDED that such price
shall be no less than 100% (110% in the case of an Incentive
Stock Option granted to a Participant described in Section 2.4)
of the Fair Market Value of the Common Stock on the date of
grant. The base price of each stock appreciation right shall be
determined by the Committee at the time of the Award. The base
price of an SAR granted after the grant of an Option may be less
than the Fair Market Value of Common Stock at the date of grant
of the SAR, but if so, may not be less than the Option exercise
price.
(b) PAYMENT PROVISIONS. The purchase price of any
shares purchased on exercise of an Option granted under this
Article shall be paid in full at the time of each purchase in one
or a combination of the following methods: (i) in cash or by
electronic funds transfer; (ii) by certified or cashier's check
payable to the order of the Corporation; (iii) if authorized by
the Committee or specified in the applicable Award Agreement, by
a promissory note of the Participant consistent with the
requirements of Section 1.8; or (iv) by the delivery of shares of
Common Stock of the Corporation already owned by the Participant,
provided, however, that the Committee may in its absolute
discretion limit the Participant's ability to exercise an Award
by delivering such shares, and any shares delivered which were
initially acquired upon exercise of a share option must have been
owned by the Participant at least six months as of the date of
delivery. Shares of Common Stock used to satisfy the exercise
price of an Option shall be valued at their Fair Market Value on
the date of exercise. In addition to the payment methods
described above, the Committee may provide that the Option can be
exercised and payment made by delivering a properly executed
exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Corporation the amount of sale
proceeds necessary to pay the exercise price and, unless other-
wise allowed by the Committee, any applicable tax withholding
under Section 6.5. The Corporation shall not be obligated to
deliver certificates for the shares unless and until it receives
full payment of the exercise price therefor and any related
withholding obligations have been satisfied.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK
OPTIONS.
(a) $100,000 LIMIT. To the extent that the aggregate
Fair Market Value of stock with respect to which Incentive Stock
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Options first become exercisable by a Participant in any calendar
year exceeds $100,000, taking into account both Common Stock
subject to incentive stock options (as defined in Section 422 of
the Code) under this Plan and stock subject to incentive stock
options under all other plans of the Corporation or its
Subsidiaries, if any, such options shall be treated as
Nonqualified Stock Options. For this purpose, the Fair Market
Value of the stock subject to options shall be determined as of
the date the options were awarded. In reducing the number of
options treated as incentive stock options to meet the $100,000
limit, the most recently granted options shall be reduced first.
To the extent a reduction of simultaneously granted options is
necessary to meet the $100,000 limit, the Committee may, in the
manner and to the extent permitted by law, designate which shares
of Common Stock are to be treated as shares acquired pursuant to
the exercise of an Incentive Stock Option.
(b) OPTION PERIOD. Each Option and all rights
thereunder shall expire no later than 10 years after the Award
Date.
(c) OTHER CODE LIMITS. There shall be imposed in any
Award Agreement relating to Incentive Stock Options such terms
and conditions as from time to time are required in order that
the Option be an "incentive stock option" as that term is defined
in Section 422 of the Code.
2.4 LIMITS ON 10% HOLDERS.
No Incentive Stock Option may be granted to any person
who, at the time the Option is granted, owns (or is deemed to own
under Section 424(d) of the Code) shares of outstanding Common
Stock possessing more than 10% of the total combined voting power
of all classes of stock of the Corporation or a Subsidiary,
unless the exercise price of such Option is at least 110% of the
Fair Market Value of the stock subject to the Option and such
Option by its terms is not exercisable after the expiration of
five years from the date such Option is granted.
2.5 AWARD CHANGES/LIMITS ON REPRICING.
Subject to Section 1.4, Section 6.2 and Section 6.6 and
the specific limitations on Awards contained in this Plan, the
Committee from time to time may authorize, generally or in
specific cases only, for the benefit of any Eligible Person any
adjustment in the vesting schedule, the number of shares subject
to, the restrictions upon or the term of, an Award granted under
this Article, by amendment, by substitution, by waiver or by
other legally valid means. Subject to Section 1.4, Section 6.2
and Section 6.6 and the specific limitations on Awards contained
in this Plan, such amendment or other action may, among other
changes, provide for a greater or lesser number of shares subject
to the Award, or provide for a longer or shorter vesting or
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exercise period. Subject to Section 6.2 and Section 6.3 and the
specific limitations on Awards contained in this Plan, the
Committee also may reduce the exercise or purchase price of any
or all outstanding Awards as deemed appropriate by the Committee,
provided that the Committee does not reduce the exercise price of
any Option or related SAR to a price below the Fair Market Value
of the Option on the date of its grant.
2.6 LIMITATION ON EXERCISE OF OPTION AWARD.
No Participant may receive Common Stock upon exercise
of an Option to the extent that it will cause such person to
Beneficially or Constructively Own Equity Shares in excess of the
Ownership Limit.
In the event that a Participant exercises any portion
of an Option (by tendering the exercise price to the Corporation)
which upon delivery of the Common Stock would cause the holder of
the Option to Beneficially or Constructively Own Equity Shares in
excess of the Ownership Limit, the Corporation shall have the
right to deliver to the Participant, in lieu of Common Stock, a
check or cash in the amount equal to the Fair Market Value of the
Common Stock otherwise deliverable on the date of exercise (minus
any amounts withheld pursuant to Section 6.5).
III. STOCK APPRECIATION RIGHTS.
3.1 GRANTS.
In its discretion, the Committee may grant to any
Eligible Person SARs concurrently with the grant of Options or
thereafter, including in the circumstances of a Change in Control
Event, on such terms as set forth by the Committee in the Award
Agreement for such Option or such SARs. Unless the Committee
with the consent of the Participant otherwise determines, any SAR
granted in connection with an Incentive Stock Option shall
contain such terms as may be required to comply with the
provisions of Section 422 of the Code and the regulations
promulgated thereunder.
3.2 EXERCISE OF STOCK APPRECIATION RIGHTS.
(a) EXERCISABILITY. Unless the Award Agreement or the
Committee otherwise provides, a SAR shall be exercisable at such
time or times, and to the extent, that the related Option shall
be exercisable and only when the Fair Market Value of the stock
subject to the related Option exceeds the Option price of the
related Option.
(b) EFFECT ON AVAILABLE SHARES. To the extent that a
SAR is exercised, the number of shares of Common Stock subject to
the related Option shall be charged against the maximum amount of
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Common Stock that may be delivered pursuant to Awards under this
Plan. The number of shares subject to the SAR and the related
Option of the Participant shall also be reduced by such number of
shares.
(c) NON-PROPORTIONATE REDUCTION. If a SAR extends to
less than all the shares covered by the related Option and if a
portion of the related Option is thereafter exercised, the number
of shares subject to the unexercised SAR shall be reduced only if
and to the extent that the remaining number of shares covered by
such related Option is less then the remaining number of shares
subject to such SAR, unless the Committee otherwise provides.
3.3 PAYMENT.
(a) AMOUNT. Unless the Committee otherwise provides,
upon exercise of a SAR and surrender of an exercisable portion of
any related Option to the extent required by Section 3.2, the
Participant shall be entitled to receive, subject to Section 6.5,
payment of an amount determined by multiplying
(i) the difference obtained by subtracting the
exercise price per share of Common Stock under the related
Option from the Fair Market Value of a share of Common Stock
on the date of exercise of the SAR, by
(ii) the number of shares with respect to which
the SAR shall have been exercised.
If an SAR is granted as a Performance Based Award under Section
5.2 without reference to any performance criterion other than
stock price appreciation, the base price shall be not less than
the Fair Market Value at date of grant.
(b) FORM OF PAYMENT. The Committee, in its sole
discretion, shall determine the form in which payment shall be
made of the amount determined under paragraph (a) above, either
solely in cash, solely in shares of Common Stock (valued at Fair
Market Value on the date of exercise of the SAR), or partly in
such shares and partly in cash, provided that the Committee shall
have determined that such exercise and payment are consistent
with applicable law. If the Committee permits the Participant to
elect to receive cash or shares (or a combination thereof) on
such exercise, any such election shall be subject to such
conditions as the Committee may impose. Notwithstanding anything
contained herein to the contrary, no Participant may receive
Common Stock upon the exercise of a SAR to the extent it will
cause such person to Beneficially or Constructively Own Equity
Shares in excess of the Ownership Limit. In the event that a
Participant exercises any portion of a SAR which upon delivery of
Common Stock would cause such Participant to Beneficially or
Constructively Own Equity Shares in excess of the Ownership
Limit, the Corporation shall have the right, notwithstanding any
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election granted to the Participant by the Committee, to deliver
a check or cash to the Participant.
IV. RESTRICTED STOCK AWARDS.
4.1 GRANTS.
Subject to the Restricted Stock limits set forth in
Section 4.2(e), the Committee may, in its discretion, grant one
or more Restricted Stock Awards to any Eligible Person based upon
such factors (which in the case of any Award to a Section 16
Person shall include but not be limited to the contributions,
responsibilities and other compensation of the person) as the
Committee shall deem relevant in light of the specific terms of
the Award. Each Restricted Stock Award Agreement shall specify
the number of shares of Common Stock to be issued to the
Participant, the date of such issuance, the consideration for
such shares (but not less than the minimum lawful consideration
under applicable state law) by the Participant, the restrictions
imposed on such shares and the conditions of release or lapse of
such restrictions, which may include performance criteria,
continued employment for a specified period of time and/or other
factors. Such restrictions shall not lapse earlier than one year
after the Award Date, except as set forth in Section 6.2 and
Section 6.3 and to the extent the Committee may otherwise
provide. Shares of Restricted Stock may be issued in the form of
book entries or stock certificates, each registered in the name
of the Participant ("Restricted Shares"). Stock certificates or
book entry records evidencing shares of Restricted Stock pending
the lapse of the restrictions shall bear an appropriate reference
to the restrictions imposed hereunder. Restricted Shares shall
be held (if in certificate form) and restricted as to transfer
until the restrictions have lapsed and such shares have vested in
accordance with the provisions of the Award Agreement and this
Plan. Upon issuance of the Restricted Stock Award, the
Participant may be required to provide such further assurance and
documents as the Committee may require to enforce the
restrictions.
4.2 RESTRICTIONS.
(a) PERFORMANCE VESTING. The vesting of shares
pursuant to a Restricted Stock Award may be based solely upon the
continued employment for a specific period of time or the degree
of attainment, over a specified period as may be established by
the Committee, of such measure(s) of the performance of the
Company (or any part thereof) or the Participant's performance,
or upon any combination thereof, as may be established by the
Committee. Performance-based or accelerating Restricted Stock
Awards may also be granted under Section 5.2.
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(b) PRE-VESTING RESTRAINTS. Except as provided in and
subject to the provisions of Sections 4.1 and 1.9, Restricted
Shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or
encumbered, either voluntarily or involuntarily, until such
shares have vested.
(c) DIVIDEND AND VOTING RIGHTS. Unless otherwise
provided in the applicable Award Agreement, a Participant
receiving a Restricted Stock Award shall be entitled to cash
dividend and voting rights for all shares issued even though they
are not vested, provided that all such rights shall terminate
immediately as to any restricted shares which cease to be
eligible for vesting.
(d) CASH PAYMENTS. If the Participant shall have paid
cash in connection with the Restricted Stock Award, the Award
Agreement shall specify whether and to what extent such cash
shall be returned (with or without an earnings factor) as to any
restricted shares which cease to be eligible for vesting.
4.3 RETURN TO THE CORPORATION.
Unless the Committee otherwise expressly provides,
Restricted Shares that are subject to restrictions at the time of
Termination of Employment or are subject to other conditions to
vesting that have not been satisfied by the time specified in the
applicable Award Agreement shall not vest and shall be returned
to the Corporation in such manner and on such terms as the
Committee shall therein provide.
V. STOCK BONUSES, OTHER CASH OR STOCK PERFORMANCE-BASED AWARDS,
STOCK UNITS AND DIVIDEND EQUIVALENT RIGHTS.
5.1 GRANTS OF STOCK BONUSES.
The Committee may grant a Stock Bonus to any Eligible
Person to reward exceptional or special services, contributions
or achievements in the manner and on such terms and conditions
(including any restrictions on such shares) as determined from
time to time by the Committee. The number of shares so awarded
shall be determined by the Committee; provided, however, in no
case may a Stock Bonus be granted to the extent that it will
cause an Eligible Person to Beneficially or Constructively Own
Equity Shares in excess of the Ownership Limit. The Award may be
granted independently or in lieu of a cash bonus.
5.2 OTHER PERFORMANCE-BASED AWARDS.
(a) GENERAL PROVISIONS. Without limiting the
generality of the foregoing, and in addition to qualifying awards
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granted under other provisions of this Plan (i.e. Options or SARs granted
with an exercise price not less than Fair Market Value at the applicable date
of grant for Section 162(m) purposes to Eligible Persons who are either
salaried employees or officers ("Eligible Employees") ("Presumptively
Qualifying Awards")), the Committee may authorize and grant to any Eligible
Employee, other cash or stock-related performance-based awards, including
"performance-based" awards within the meaning of Section 162(m) of the Code
("PERFORMANCE-BASED AWARDS"), whether in the form of restricted stock, stock
appreciation rights, performance stock, phantom stock, stock units, Dividend
Equivalent Rights ("DERs"), or other rights, whether or not related to stock
values or appreciation, and whether payable in cash, Common Stock or a
combination thereof. If the Award (other than a Presumptively Qualifying
Award) is intended as performance-based compensation under Section 162(m) of
the Code, the vesting or payment thereof will depend on the performance of
the Company on a consolidated, Subsidiary, segment, or division basis with
reference to performance goals relative to one or more of the following
business criteria (the "criterion"): funds from operations, EBITDA, stock
appreciation, total stockholder return, occupancy gains, and overall square
footage growth, each as defined in Exhibit A. These terms otherwise are used
as applied under generally accepted accounting principles and in the
Company's financial reporting. To qualify Awards as performance-based under
Section 162(m), the applicable business criteria and specific performance
goal or goals ("targets") must be established and approved by the Committee
during the first 90 days of the year (or before one-quarter of the
performance measurement period has elapsed, if such period exceeds one year)
and while the performance relating to such targets remains substantially
uncertain within the meaning thereof. The applicable performance measurement
period may be not less than one nor (except as provided in Section 1.6) more
than 10 years.
(b) MAXIMUM AWARD. Grants or awards under this Section 5.2
may be paid in cash or stock or any combination thereof. In no event shall
grants of stock-related Awards made in any calendar year to any Eligible
Employee under this Plan relate to more than 500,000 shares. In no event
shall grants to any Eligible Employee under this Plan of Awards payable only
in cash and not related to stock provide for payment of more than (x) the
lesser of 200% of base salary as of the beginning of the applicable
performance period or $600,000, times (y) the applicable number of years (not
more than 10) to which the Awards relate in the performance periods.
(c) COMMITTEE CERTIFICATION. Except as otherwise permitted to
qualify as performance-based compensation under Section 162(m), before any
Performance-Based Award under this Section 5.2 is paid, the Committee must
certify that the performance standard, target(s), and the other material
terms of the Performance-Based Award were in fact satisfied.
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(d) TERMS AND CONDITIONS OF AWARDS. The Committee
will have discretion to determine the restrictions or other
limitations of the individual Awards under this Section 5.2,
including the authority to reduce Awards, to determine payout
schedules and the extent of vesting or to pay no Awards, in its
sole discretion, if the Committee preserves such authority at the
time of grant by language to this effect in its authorizing
resolutions or otherwise. The Committee may provide that in the
event a Participant terminates employment or service for any one
or more reason during a Plan Year, the Participant shall forfeit
all rights to any Award for the Plan Year.
(e) ADJUSTMENTS FOR MATERIAL CHANGES. Performance
goals or other features of an Award may provide that they
(a) shall be adjusted to reflect a change in corporate
capitalization, a corporate transaction (such as a
reorganization, combination, separation, or merger) or a complete
or partial corporate liquidation, or (b) shall be calculated
either without regard for or to reflect any change in accounting
policies or practices affecting the Company and/or the business
criteria or performance goals or targets, or (c) shall be
adjusted for any other circumstance or event, but only to the
extent in each case that such adjustment or determination in
respect of Performance-Based Awards would be consistent with the
requirements of Section 162(m) to qualify as performance-based
compensation.
(f) SECTION 162(m) CONSIDERATIONS. Options or SARs
granted under this Plan at an exercise price not less than Fair
Market Value at the applicable date of grant, and (except to the
extent an Award becomes vested or payable as a result of a Change
in Control Event) other Qualified Performance-Based Awards
granted under this Section 5.2, shall be interpreted in a manner
consistent with the requirements of Section 162(m) to qualify as
performance-based compensation.
5.3 STOCK UNITS.
(a) GRANTS. Subject to Section 5.3(d) and such rules
and procedures as the Committee may establish from time to time,
the Committee may, in its discretion, authorize Stock Unit Awards
and permit an Eligible Person to elect to defer or receive in
Stock Units all or a portion of the compensation the Eligible
Person could otherwise elect to defer under any other Company
plan, or in respect of any Award hereunder, or may grant Awards
in the form of Stock Units in lieu of or in addition to any other
Award under this Plan. The specific terms, conditions and
provisions relating to each Stock Unit Award or election,
including the form of payment to be made at or following the
vesting thereof, shall be set forth in or pursuant to the
Participant's Award Agreement in respect thereof.
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(b) OTHER PROVISIONS. The Committee shall determine,
among other terms of a Stock Unit Award, the form of payment of
Stock Units, whether in cash, Common Stock, or other
consideration (including any other Award) or any combination
thereof, and the applicable vesting and payout provisions of the
Award. The Committee in the Award Agreement may permit the
Participant to elect the form and time of payout of vested Stock
Units on such conditions or subject to such procedures as the
Committee may impose.
(c) STOCK UNITS. Each Award Agreement for an Award of
Stock Units shall include the applicable benefit distribution and
termination provisions, which may include elective features, for
such Award and shall specify the form of payment.
(d) LIMIT ON CERTAIN STOCK UNIT AWARDS.
Notwithstanding anything contained herein to the contrary, any
Stock Unit Award or Stock Unit Awards which individually or in
the aggregate would constitute an "employee pension benefit plan"
(as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974 ("ERISA")) shall be made only to Eligible
Persons who are members of "a select group of management or
highly compensated employees" (as provided in Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA) of the Company.
5.4 DIVIDEND EQUIVALENT RIGHTS. In its discretion,
the Committee may grant to any Eligible Person DERs concurrently
with the grant of any Option, Restricted Stock, Stock Unit or
other stock-based Award, on such terms as set forth by the
Committee in the Award Agreement. DERs shall be based on all or
part of the amount of dividends declared on shares of Common
Stock and shall be credited as of dividend payment dates, during
the period between the date of grant (or such later date as the
Committee may set) and the date the stock-based Award is
exercised or expires (or such earlier date as the Committee may
set), as determined by the Committee. DERs shall be payable in
cash or shares, or (to the extent permitted by law) may be
subject to such conditions, not inconsistent with Section 162(m)
(in the case of Options or SARs, or other Awards intended to
satisfy its conditions with respect to deductibility), as may be
determined by the Committee.
VI. OTHER PROVISIONS.
6.1 RIGHTS OF ELIGIBLE PERSONS, PARTICIPANTS AND
BENEFICIARIES.
(a) EMPLOYMENT STATUS. Status as an Eligible Person
shall not be construed as a commitment that any Award will be
made under this Plan to an Eligible Person or to Eligible Persons
generally.
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(b) NO EMPLOYMENT CONTRACT. Nothing contained in this
Plan (or in any other documents related to this Plan or to any
Award) shall confer upon any Eligible Person or other Participant
any right to continue in the employ or other service of the
Company or constitute any contract or agreement of employment or
other service, nor shall interfere in any way with the right of
the Company to change such person's compensation or other
benefits or to terminate the employment of such person, with or
without cause, but nothing contained in this Plan or any document
related hereto shall adversely affect any independent contractual
right of such person without his or her consent thereto.
(c) PLAN NOT FUNDED. Awards payable under this Plan
shall be payable in shares or from the general assets of the
Corporation, and (except as provided in Section 1.4(b)) no
special or separate reserve, fund or deposit shall be made to
assure payment of such Awards. No Participant, Beneficiary or
other person shall have any right, title or interest in any fund
or in any specific asset (including shares of Common Stock,
except as expressly otherwise provided) of the Company by reason
of any Award hereunder. Neither the provisions of this Plan (or
of any related documents), nor the creation or adoption of this
Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind
or a fiduciary relationship between the Company and any
Participant, Beneficiary or other person. To the extent that a
Participant, Beneficiary or other person acquires a right to
receive payment pursuant to any Award hereunder, such right shall
be no greater than the right of any unsecured general creditor of
the Company.
6.2 ADJUSTMENTS; EARLY TERMINATION.
(a) ADJUSTMENTS. If the outstanding shares of Common
Stock are changed into or exchanged for cash, other property or a
different number or kind of shares or securities of the
Corporation, or if additional shares or new or different
securities are distributed with respect to the outstanding shares
of Common Stock, through a reorganization or merger in which the
Corporation is the surviving entity, or through a combination,
consolidation, recapitalization, reclassification, stock split,
stock dividend, reverse stock split, stock consolidation,
dividend or distribution of cash or property to the stockholders
of the Corporation, or if there shall occur any other
extraordinary corporate transaction or event in respect of the
Common Stock or a sale of substantially all the assets of the
Corporation as an entirety which in the judgment of the Committee
materially affects the Common Stock, then the Committee shall, in
such manner and to such extent (if any) as it deems appropriate
and equitable, (i) proportionately adjust any or all of (1) the
number and kind of shares or other consideration that is subject
to or may be delivered under this Plan and pursuant to outstand-
ing Awards, (2) any performance standards appropriate to any
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outstanding Awards, and/or (3) the consideration payable with
respect to Awards granted prior to any such change and the price,
if any, paid in connection with Restricted Stock Awards; or
(ii) in the case of an extraordinary dividend or other
distribution, merger, reorganization, consolidation, combination,
sale of assets, split up, exchange or spin off, make provision
for a cash payment or for the substitution or exchange of (1) any
or all outstanding Awards or the cash, securities or property
deliverable to the holder of any or all outstanding Awards, for
(2) cash, property and/or other securities, based upon the
distribution or consideration payable to holders of the Common
Stock of the Corporation upon or in respect of such event;
provided, however, in each case, that with respect to awards of
Incentive Stock Options, no such adjustment shall be made without
the consent of the holder which would cause this Plan to violate
Section 422 or 424(a) of the Code or any successor provisions
thereto. Corresponding adjustments shall be made with respect to
SARs based upon the adjustment made to the Options to which they
relate.
(b) POSSIBLE EARLY TERMINATION OF AWARDS. If any
Award or other right to acquire Common Stock has not been
exercised or has not become vested or exercisable prior to (i) a
dissolution of the Corporation or (ii) a reorganization event
described in Section 6.2(a) that the Corporation does not survive
and no provision has been made for the substitution, exchange or
other settlement of such Award, such Award shall thereupon
terminate.
(c) LIMITATION ON AWARD ADJUSTMENTS. To the extent
required in the case of an Award intended as a Performance-Based
Award for purposes of Section 162(m), the Committee shall have no
discretion (i) to increase the amount of compensation or the
number of shares that would otherwise be due upon the attainment
of the applicable performance goal or the exercise of the option
or SAR or (ii) to waive the achievement of any applicable
performance goal as a condition to receiving a benefit or right
under an Award.
6.3 TERMINATION OF EMPLOYMENT; TERMINATION OF SUBSIDIARY
STATUS.
Any Award to the extent not exercised shall terminate
and become null and void upon a Termination of Employment of the
Participant, except as set forth in subsections (a) through (e)
below or as otherwise expressly provided by the Committee.
Notwithstanding anything contained in this Section to the
contrary, all Awards shall be subject to earlier termination
pursuant to or as contemplated by Section 1.6 and Section 6.2 of
this Plan. Unless the Committee otherwise provides, any and all
rights to an Award, to the extent not exercised or vested, shall
expire immediately upon a Termination of Employment of the
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Participant for cause, of which the Committee (in the case of any
dispute about cause) shall be the sole judge.
(a) NONQUALIFIED STOCK OPTIONS. Unless the Committee
otherwise expressly provides in the Award Agreement:
(i) If the Participant's employment by the
Company terminates by reason other than death, Disability or
cause, or by reason of a Subsidiary ceasing to be a
Subsidiary, then the Participant shall have three months
after the date of Termination of Employment to exercise any
Nonqualified Stock Option to the extent that it was
exercisable on such date;
(ii) If the Participant's employment by the
Company terminates by reason of a Disability, or if
Participant suffers a Disability within three months of a
Termination of Employment under subsection (i) above, then
the Participant or Participant's Personal Representative, as
the case may be, shall have twelve months after the date of
Disability (or, if earlier, Termination of Employment) to
exercise any Nonqualified Stock Option to the extent that it
was exercisable on such date; and
(iii) If the Participant dies while in the employ
of the Company, or within three months after a Termination
of Employment under subsection (i) or (ii) above, then the
Participant's Beneficiary may exercise, at any time within
twelve months after the Participant's Termination of
Employment, any Nonqualified Stock Option to the extent that
it was exercisable on the date of the Participant's
Termination of Employment);
PROVIDED, HOWEVER, that in no event shall the Option be exercised
after the expiration of its term or its earlier termination under
any other provisions of the Plan.
(b) INCENTIVE STOCK OPTIONS. Unless the Committee
otherwise expressly provides in the Award Agreement:
(i) If the Participant's employment by the
Company terminates by reason other than death, Disability or
cause, or by reason of a Subsidiary ceasing to be a
Subsidiary, then the Participant shall have three months
after the date of Termination of Employment to exercise any
Incentive Stock Option to the extent that it was exercisable
on such date;
(ii) If the Participant's employment by the
Company terminates by reason of a Disability, or if
Participant suffers a Disability within three months of a
Termination of Employment under subsection (i) above, then
the Participant or Participant's Personal Representative, as
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the case may be, shall have twelve months after the date of
Disability (or, if earlier, Termination of Employment) to
exercise any Incentive Stock Option to the extent that it
was exercisable on such date; and
(iii) If the Participant dies while in the employ
of the Company, or within three months after a Termination
of Employment under subsection (i) or (ii) above, then the
Participant's Beneficiary may exercise, at any time within
twelve months after the Participant's Termination of
Employment, any Incentive Stock Option to the extent that it
was exercisable on the date of the Participant's Termination
of Employment);
PROVIDED, HOWEVER, that in no event shall the Option be exercised
after the expiration of its term or its earlier termination under
other provision of this Plan.
(c) STOCK APPRECIATION RIGHTS. Each SAR shall have
the same termination provisions and exercisability periods as the
Option to which it relates. The exercisability period of a SAR
shall not exceed that provided in the related Award Agreement,
and the SAR shall expire at the end of such exercisability
period.
(d) OTHER AWARDS. The Committee shall establish in
respect of each other Award granted hereunder the Participant's
rights and benefits (if any) in the event of a Termination of
Employment and in so doing may make distinctions based upon,
among other factions, the cause of termination and the nature of
the Award.
(e) EXTENSION OF EXERCISE. Notwithstanding the
foregoing provisions but subject to Section 6.2, in the event of,
or in anticipation of, a Termination of Employment with the
Company, the Committee may, in its discretion, increase the
portion of the Award available to the Participant (or
Participant's Beneficiary or Personal Representative, as the case
may be) or extend the exercisability period upon such terms as
the Committee shall determine.
6.4 COMPLIANCE WITH LAWS.
This Plan, the granting and vesting of Awards under
this Plan and the offer, issuance and delivery of shares of
Common Stock and/or the payment of money under this Plan or under
Awards granted hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law
and federal margin requirements) and to such approvals by any
listing, agency or any regulatory or governmental authority as
may, in the opinion of counsel for the Corporation, be necessary
or advisable in connection therewith. Any securities delivered
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under this Plan shall be subject to such restrictions, and the
person acquiring such securities shall, if requested by the
Corporation, provide such assurances and representations to the
Corporation as the Corporation may deem necessary or desirable to
assure compliance with all applicable legal requirements.
6.5 TAX WITHHOLDING.
Upon any exercise, vesting, or payment of any Award or
upon the disposition of shares of Common Stock acquired pursuant
to the exercise of an Incentive Stock Option prior to
satisfaction of the holding period requirements of Section 422 of
the Code, the Company shall have the right at its option to
(i) require the Participant (or the Participant's Personal
Representative or Beneficiary, as the case may be) to pay or
provide for payment of the amount of any taxes which the Company
may be required to withhold with respect to such transaction or
(ii) deduct from any amount payable the amount of any taxes which
the Company may be required to withhold with respect to such cash
amount. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this
Plan, the Committee may permit the Participant to elect, pursuant
to such rules and subject to such conditions as the Committee may
establish, to have the Corporation reduce the number of shares to
be delivered by (or otherwise reacquire) the appropriate number
of shares valued at their then Fair Market Value, to satisfy such
withholding obligation.
6.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
(a) BOARD OR COMMITTEE AUTHORIZATION. The Board may,
at any time, terminate or, from time to time, amend, modify or
suspend this Plan, in whole or in part. No Awards may be granted
during any suspension of this Plan or after termination of this
Plan, but the Committee shall retain jurisdiction as to Awards
then outstanding in accordance with the terms of this Plan.
(b) STOCKHOLDER APPROVAL. Any amendment to this Plan
shall be subject to stockholder approval to the extent then
required under Sections 422 and 424 of the Code or any other
applicable law, or deemed necessary or advisable by the Board.
(c) AMENDMENTS TO AWARDS. Without limiting any other
express authority of the Committee under but subject to the
express limits of this Plan (including Section 6.2(c)), the Board
or the Committee, by agreement or resolution, may waive
conditions of or limitations on Awards to Eligible Persons that
the Committee in the prior exercise of its discretion has
imposed, without the consent of a Participant, and may make other
changes to the terms and conditions of Awards that do not affect,
in any manner materially adverse to the Employee Participant, his
or her rights and benefits under an Award.
(d) LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No
amendment, suspension or termination of this Plan or change of or
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affecting any outstanding Award shall, without written consent of
the Participant, affect in any manner materially adverse to the
Participant any rights or benefits of the Participant or
obligations of the Corporation under any Award granted under this
Plan prior to the effective date of such change. Changes
contemplated by Section 6.2 shall not be deemed to constitute
changes or amendments for purposes of this Section 6.6.
6.7 PRIVILEGES OF STOCK OWNERSHIP.
Except as otherwise expressly authorized by the
Committee or this Plan, a Participant shall not be entitled to
any privilege of stock ownership as to any shares of Common Stock
not actually delivered to and held of record by him or her. No
adjustment will be made for dividends or other rights as a
stockholder for which a record date is prior to such date of
delivery.
6.8 EFFECTIVE DATE OF THIS PLAN.
The effective date of this Plan was March 4, 1994.
Amendments effective April 8, 1997 were approved by the Board,
subject to approval of stockholders, and did not adversely affect
any award holder's rights or benefits under this Plan.
6.9 TERM OF THIS PLAN.
No Award shall be granted after March 3, 2004 (the
"Termination Date"). Unless otherwise expressly provided in this
Plan or in an applicable Award Agreement, any Award theretofore
granted may extend beyond such date, and all authority of the
Committee with respect to Awards hereunder, including its
authority to amend an Award, shall continue during any suspension
of this Plan and in respect of outstanding Awards on such
Termination Date.
6.10 GOVERNING LAW/CONSTRUCTION/SEVERABILITY.
(a) CHOICE OF LAW. This Plan, the Awards, all
documents evidencing Awards and all other related documents shall
be governed by, and construed in accordance with the laws of the
State of Maryland.
(b) SEVERABILITY. If any non-essential provision
shall be held by a court of competent jurisdiction to be invalid
and unenforceable, the remaining provisions of this Plan shall
continue in effect.
(c) PLAN CONSTRUCTION; BIFURCATION. Notwithstanding
anything to the contrary in this Plan, the provisions of this
Plan may at any time be bifurcated by the Board or the Committee
in any manner so that certain provisions of any Award Agreement
(or this Plan) intended (or required in order) to satisfy the
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applicable requirements of Rule 16b-3 or to qualify for exemption
from the limit on deductibility under Section 162(m) (to the
extent permitted thereby) are applicable only to persons subject
to those provisions and to those Awards to those persons intended
to satisfy the requirements of the applicable rule or rules
thereunder.
6.11 CAPTIONS.
Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material
or relevant to the construction or interpretation of this Plan or
any provision thereof.
6.12 NON-EXCLUSIVITY OF PLAN.
Nothing in this Plan shall limit or be deemed to limit
the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to
the Common Stock, under any other plan or authority.
VII. DEFINITIONS.
7.1 DEFINITIONS.
(a) "Award" shall mean an award of any Option, SAR,
Stock Unit, Restricted Stock, Stock Bonus, DER, or any combina-
tion thereof, whether alternative or cumulative, authorized by
and granted under this Plan.
(b) "Award Agreement" shall mean any writing setting
forth the terms of an Award that has been authorized by the
Committee.
(c) "Award Date" shall mean the date upon which the
Committee took the action granting an Award or such later date as
the Committee designates as the Award Date at the time of the
Award.
(d) "Award Period" shall mean the period beginning on
an Award Date and ending on the expiration date of such Award.
(e) "Beneficial Ownership" shall mean ownership of
Equity Shares by a person who would be treated as an owner of
such shares either directly or indirectly through the application
of Section 544 of the Code, as modified by Section 856(h)(1)(B)
of the Code. The terms "Beneficial Owner," "Beneficially Owns"
and "Beneficially Owned" shall have correlative meanings.
(f) "Beneficiary" shall mean the person, persons,
trust or trusts entitled by will or the laws of descent and
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distribution to receive the benefits specified in the Award
Agreement and under this Plan in the event of a Participant's
death, and shall mean the Participant's executor or administrator
if no other Beneficiary is identified and able to act under the
circumstances.
(g) "Board" shall mean the Board of Directors of the
Corporation.
(h) "Change in Control Event" shall mean any of the
following:
(1) Approval by the stockholders of the Corporation of
the dissolution or liquidation of the Corporation;
(2) Approval by the stockholders of the Corporation of
an agreement to merge or consolidate, or otherwise
reorganize, with or into one or more entities that are not
Subsidiaries or other affiliates, as a result of which less
than 50% of the outstanding voting securities of the
surviving or resulting entity immediately after the
reorganization are, or will be, owned, directly or
indirectly, by stockholders or other affiliates of the
Corporation immediately before such reorganization (assuming
for purposes of such determination that there is no change
in the record ownership of the Corporation's securities from
the record date for such approval until such reorganization
but including in such determination any securities of the
other parties to such reorganization held by affiliates of
the Corporation);
(3) Approval by the stockholders of the Corporation of
the sale of substantially all of the Corporation's business
and/or assets to a person or entity which is not a
Subsidiary or other affiliate; or
(4) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation
representing more than 20% of the combined voting power of
the Corporation's then outstanding securities entitled to
then vote generally in the election of directors of the
Corporation.
(i) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(j) "Commission" shall mean the Securities and
Exchange Commission.
(k) "Committee" shall mean a committee appointed by
the Board to administer this Plan, which committee shall be
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comprised of at least two Board members or such greater number of
directors as may be required under applicable law, each of whom,
during such time as one or more Participants may be subject to
Section 16 of the Exchange Act, shall be a Disinterested
Director.
(l) "Common Stock" shall mean the Common Stock of the
Corporation and such other securities or property as may become
the subject of Awards, or become subject to Awards, pursuant to
an adjustment made under Section 6.2 of this Plan.
(m) "Company" shall mean, collectively, The Macerich
Company and its Subsidiaries, and shall mean, individually, any
one of them, as the context requires.
(n) "Constructive Ownership" shall mean ownership of
Equity Shares by a person who would be treated as an owner of
such shares either directly or indirectly through the application
of Section 318 of the Code, as modified by Section 856(d)(5) of
the Code. The terms "Constructive Owner," "Constructive Owns"
and "Constructively Owned" shall have correlative meanings.
(o) "Corporation" shall mean The Macerich Company, a
Maryland corporation, and its successors.
(p) "Deferred Stock Award" shall mean a deferred
payment award payable in Common Stock or cash or other
consideration, as determined by the Committee, based on Stock
Units credited to a Participant's Stock Unit Account.
(q) "Disability" shall mean, in the case of an
Incentive Stock Option, a "permanent and total disability" within
the meaning of Section 22(e)(3) of the Code and, in the case of
all other Awards, such other disabilities, infirmities,
afflictions or conditions as the Committee by rule may include.
(r) "Disinterested Director" shall mean (unless the
Board otherwise determines) a member of the Board who is a Non-
Employee Director as defined in Rule 16b-3 and an "outside
director" as defined in regulations under Section 162(m) of the
Code, as each may be amended from time to time.
(s) "Dividend Equivalent Right" shall mean a right
authorized under Section 5.4 of this Plan.
(t) "Eligible Person" shall mean an officer (whether
or not an employee), an employee of the Company, a director of the
Company or any other person (including a significant agent or
consultant) who performs substantial services for the Company, all
as determined by the Committee in its discretion, except as
otherwise limited for purposes of Section 5.2 and Section 5.3.
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(u) "Equity Shares" shall mean shares that are either
Common Stock or Preferred Stock.
(v) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
(w) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(x) "Fair Market Value" on any date shall mean the
closing price of the stock on the Composite Tape, as published in
the Western Edition of The Wall Street Journal, of the principal
securities exchange or market on which the stock is so listed,
admitted to trade, or quoted on such date, or, if there is no
trading of the stock on such date, then the closing price of the
stock as quoted on such Composite Tape on the next preceding date
on which there was trading in such shares; PROVIDED, HOWEVER, if
the stock is not so listed, admitted or quoted, the Committee may
designate such other exchange, market or source of data as it
deems appropriate for determining such value for purposes of this
Plan.
(y) "Incentive Stock Option" shall mean an Option
which is designated as an incentive stock option within the
meaning of Section 422 of the Code and which contains such
provisions as are necessary to comply with that section.
(z) "Nonqualified Stock Option" shall mean an Option
that is designated as a Nonqualified Option and shall include any
Option intended as an Incentive Option that fails to meet the
applicable legal requirements thereof. Any Option granted
hereunder that is not designated as an Incentive Stock Option
shall be deemed to be designated a Nonqualified Stock Option
under this Plan and not an Incentive Share Option under the Code.
(aa) "Option" shall mean an option to purchase Common
Stock under this Plan. The Committee shall designate any Option
granted to an Eligible Person as a Nonqualified Stock Option or
an Incentive Stock Option.
(ab) "Ownership Limit" shall mean 9.8% of the value of
the outstanding Equity Shares of the Corporation.
(ac) "Participant" shall mean an Eligible Person who
has been granted an Award under this Plan.
(ad) "Personal Representative" shall mean the person or
persons who, upon the disability or incompetence of a
Participant, shall have acquired on behalf of the Participant, by
legal proceeding or otherwise, the power to exercise the rights
or receive benefits under this Plan by virtue of having become
the legal representative of the Participant.
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(ae) "Plan" shall mean The Macerich Company 1994 Stock
Incentive Plan, as amended, renamed and restated effective April
8, 1997.
(af) "Preferred Stock" shall mean the Preferred Stock
of the Corporation.
(ag) "Qualified Performance-Based Award" shall mean a
performance-based award under this Plan that is intended to
satisfy the requirements of Section 162(m) of the Code in respect
of performance-based compensation, the payment of which is
contingent upon attainment of performance objectives specified by
the Committee in respect of the business criteria specified in
Section 5.2, and the issuance or vesting of which may be subject
to other restrictions or conditions.
(ah) "Restricted Stock" shall mean shares of Common
Stock awarded to a Participant pursuant to Article IV.
(ai) "Rule 16b-3" shall mean Rule 16b-3 as promulgated
by the Commission pursuant to the Exchange Act as in effect on
November 1, 1996, or any successor provision, as amended from
time to time.
(aj) "Section 16 Person" shall mean a person subject to
Section 16(a) of the Exchange Act.
(ak) "Section 162(m)" shall mean Section 162(m) of the
Code and the regulations and interpretations of the Internal
Revenue Service thereunder, as amended from time to time.
(al) "Securities Act" shall mean the Securities Act of
1933, as amended from time to time.
(am) "Stock Appreciation Right" shall mean a right
authorized under Article III of this Plan.
(an) "Stock Bonus" shall mean an Award of shares of
Common Stock for no consideration other than past services
(subject to Section 6.4) that includes such restrictions (if any)
as the Committee may deem advisable to assure compliance with law
or satisfaction of other conditions it may impose.
(ao) "Stock Unit" shall mean a non-voting unit of
measurement which is deemed for bookkeeping purposes to be
equivalent to one outstanding share of Common Stock of the
Company (subject to adjustment) solely for purposes of this Plan.
(ap) "Stock Unit Account" shall mean the bookkeeping
account maintained by the Company on behalf of each Participant
which is credited with Stock Units in accordance with Section
5.3(c) and which is payable in cash, stock and/or other
consideration as the Committee may determine.
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(aq) "Subsidiary" shall mean The Macerich Partnership,
L.P., a Delaware limited partnership, The Macerich Management
Company, The Macerich Property Management Company, both
California corporations, or any corporation or other entity a
majority of whose outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation.
(ar) "Termination of Employment" shall mean any
termination of the Participant's employment with the Company; if
an entity ceases to be a Subsidiary, a Termination of Employment
shall be deemed to have occurred with respect to each employee of
such Subsidiary who does not continue as an employee of another
entity owned, controlled by or under common control with the
Company. The Committee may provide generally or on a case-by-
case basis on such conditions as it deems appropriate that a
Termination of Employment does not occur if a person's status as
an employee terminates but his or her services continue as an
officer or other person who would be eligible to participate in
the Plan as an Other Eligible Person.
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PROXY
THE MACERICH COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING TO BE HELD ON MAY 28, 1997
The undersigned hereby constitutes and appoints Dana K. Anderson, Thomas E.
O'Hern, and Richard A. Bayer, and each of them, the true and lawful agents and
proxies of the undersigned, each with full power of substitution, to vote and
act as proxy with respect to all shares of common stock of THE MACERICH COMPANY
(the "Company") which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders of the Company to be held at the
Miramar Sheraton Hotel, 101 Wilshire Boulevard, Santa Monica, California on May
28, 1997 at 10:00 a.m, and at any adjournment of postponement thereof, with
respect to the matters described herein.
In their discretion, the proxies are authorized to vote upon such other matters
as may come before the Annual Meeting of any adjournment or postponement
thereof.
(change of address/comments)
Election of Directors, Nominees: Arthur M. ___________________________________
Coppola, James S. Cownie, and Mace Siegel ___________________________________
___________________________________
___________________________________
(If you have written in the above
space, please mark the
corresponding box on the reverse
side of this proxy)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. YOUR SHARES CANNOT BE VOTED UNLESS
YOU SIGN AND RETURN THIS PROXY.
SEE REVERSE
SIDE
<PAGE>
X Please mark your
votes as in this 0682
example.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR AND FOR PROPOSALS 2 AND 3.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR the election of each of the
nominees for director and FOR Proposals 2 and 3.
- -------------------------------------------------------------------------------
FOR WITHHELD
1.Election of all
nominees for
director.
(see reverse)
For, except vote withheld from the following nominee(s):
______________________________
FOR AGAINST ABSTAIN
2.Ratification of the appointment
of Coopers & Lybrand as the
Company's independent
accountants for the year
ending December 31, 1997
FOR AGAINST ABSTAIN
Comments/Address Change
3.Approval of the
Amended and Restated
1994 Incentive Plan.
SIGNATURE(S):______________________________________
NOTE: Please sign exactly as name appears on this proxy. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. Corporations and partnerships
shall sign in full corporate or partnership name by authorized person.
DATE_________ The signer hereby revokes all proxies heretofore given
by the signer at said meeting or any adjournment or
postponement thereof.
