<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
Walden Residential Properties, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
WALDEN RESIDENTIAL PROPERTIES, INC.
5080 SPECTRUM DRIVE
SUITE 1000 EAST
ADDISON, TEXAS 75001
(972) 788-0510
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 1999
To the Stockholders of
Walden Residential Properties, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Walden Residential Properties, Inc., a Maryland corporation (the
"Company"), will be held at the Spectrum Center Conference Center, 5080 Spectrum
Drive, Addison, Texas on June 2, 1999, at 10:00 a.m. local time, for the
following purposes:
1. To elect four directors to serve for a term of three years each
or until their respective successors are elected and qualified or
until their earlier resignation or removal;
2. To ratify Deloitte & Touche LLP as the Company's independent
auditors; and
3. To transact such other business as may properly come before the
Annual Meeting.
It is desirable that as large a proportion as possible of the stockholders'
interests be represented at the Annual Meeting. Whether or not you plan to be
present at the Annual Meeting, you are requested to sign and return the enclosed
proxy in the envelope provided so that your stock will be represented. The
giving of such proxy will not affect your right to vote in person should you
later decide to attend the Annual Meeting. Please date and sign the enclosed
proxy and return it promptly in the enclosed envelope.
Copies of the Proxy Statement relating to the Annual Meeting and the Annual
Report outlining the Company's operations for the year ended December 31, 1998
accompany this Notice of Annual Meeting of Stockholders.
Only holders of record of the Common Stock of the Company at the close of
business on April 15, 1999 are entitled to notice of, and to vote at, the Annual
Meeting or any adjournment thereof, notwithstanding any transfer of the Common
Stock on the books of the Company after such record date.
By Order of the Board of Directors,
EDWARD H. HATZENBUEHLER
Secretary
Dallas, Texas
April 28, 1999
<PAGE> 3
WALDEN RESIDENTIAL PROPERTIES, INC.
5080 SPECTRUM DRIVE
SUITE 1000 EAST
ADDISON, TEXAS 75001
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 1999
This Proxy Statement and the accompanying proxy card, Notice of Annual
Meeting of Stockholders and Annual Report for the year ended December 31, 1998
are first being mailed to holders (the "Stockholders") of the common stock, par
value $.01 per share (the "Common Stock"), of Walden Residential Properties,
Inc., a Maryland corporation (the "Company"), on or about April 28, 1999, in
connection with the solicitation of proxies on behalf of the Board of Directors
of the Company (the "Board of Directors") to be exercised at the Annual Meeting
of Stockholders (the "Meeting") to be held at the Spectrum Central Conference
Center, 5080 Spectrum Drive, Addison, Texas, on Wednesday, June 2, 1999, at
10:00 a.m.
At the Meeting, the Stockholders will be asked to consider and vote on the
following proposals (the "Proposals"):
(i) The election of four directors to hold office for terms expiring at
the 2002 annual meeting of stockholders;
(ii) The approval and ratification of the selection of Deloitte & Touche
LLP ("Deloitte & Touche") by the Board of Directors as independent
auditors for the 1999 fiscal year; and
(iii) Such other business as may properly come before the Meeting.
The Board of Directors does not know of any other matter that is to come
before the Meeting. If any other matters are properly presented for
consideration, however, the persons authorized by the enclosed proxy will have
discretion to vote on such matters in accordance with their best judgment.
Only Stockholders of record as of the close of business on April 15, 1999
(the "Record Date") are entitled to notice of and to vote at the Meeting or any
adjournments thereof. As of the close of business on the Record Date, there were
24,447,817 shares of Common Stock issued and outstanding and entitled to vote.
The Common Stock constitutes the only class of capital stock of the Company
entitled to vote at the Annual Meeting. Each Stockholder of record on the Record
Date is entitled to one vote for each share of Common Stock held. A majority of
the outstanding shares of Common Stock, represented in person or by proxy, will
constitute a quorum at the Meeting; however, if a quorum is not present or
represented at the Meeting, the Stockholders entitled to vote thereat, present
in person or represented by proxy, have the power to adjourn the Meeting from
time to time, without notice, other than by announcement at the Meeting, until a
<PAGE> 4
quorum is present or represented. At any such adjourned Meeting at which a
quorum is present or represented, any business may be transacted that might have
been transacted at the original Meeting.
Each share of Common Stock may be voted to elect up to four individuals
(the number of directors to be elected) as directors of the Company. To be
elected, each nominee for director must receive a plurality of the votes cast by
the shares of Common Stock entitled to vote at a meeting at which a quorum is
present. A plurality means that the nominees with the largest number of votes
are elected as directors up to the maximum number of directors to be chosen at
the meeting. It is intended that, unless authorization to vote for one or more
nominees for director is withheld, proxies will be voted FOR the election of all
of the nominees named in this Proxy Statement. Approval of a majority of the
shares of Common Stock represented and voting at the Meeting will be necessary
for the ratification of the Board of Directors' selection of Deloitte & Touche
as the Company's independent auditors for the 1999 fiscal year.
Votes cast by proxy or in person will be counted by the person(s) appointed
by the Company to act as inspector(s) for the Meeting. The election inspector(s)
will treat shares represented by proxies that reflect abstentions as shares that
are present and entitled to vote for the purpose of determining the presence of
a quorum. For purposes of the Proposals to elect directors and ratify Deloitte &
Touche, abstentions will not be counted as votes cast and will have no effect on
the result of the vote on such Proposals.
Broker non-votes occur where a broker holding stock in street name votes
the shares on some matters but not others. Brokers are permitted to vote on
routine, non-controversial proposals in instances where they have not received
voting instructions from the beneficial owner of the stock but are not permitted
to vote on non-routine matters. The missing votes on non-routine matters are
deemed to be "broker non-votes." The election inspector(s) will treat broker
non-votes as shares that are present and entitled to vote for the purpose of
determining the presence of a quorum.
Stockholders are urged to sign the accompanying form of proxy, solicited on
behalf of the Board of Directors, and, immediately after reviewing the
information contained in this Proxy Statement and in the Annual Report outlining
the Company's operations for the fiscal year ended December 31, 1998, return it
in the envelope provided for that purpose. Valid proxies will be voted at the
Meeting and any adjournment or adjournments thereof in the manner specified
therein. If no directions are given but proxies are executed in the manner set
forth therein, such proxies will be voted FOR the election of the nominees for
director set forth in this Proxy Statement and FOR the ratification of the
selection of Deloitte & Touche as the Company's independent auditors for the
1999 fiscal year. Any Stockholder returning the accompanying proxy may revoke
such proxy at any time prior to its exercise by giving written notice to the
Secretary of the Company of such revocation, voting in person at the Meeting or
executing and delivering to the Secretary of the Company a later-dated proxy.
Each of the directors and executive officers of the Company has informed
the Company that he or she will vote all of his or her shares of Common Stock in
favor of all of the Proposals.
2
<PAGE> 5
I. ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of directors of the
Company shall be as set forth in the Company's Articles of Incorporation, as
amended (the "Articles"), or as may be established by the Board of Directors but
may not be fewer than the number required under the Maryland General Corporation
Law nor more than 15 members. The Board of Directors currently consists of
eleven members. At the Meeting, four directors are to be elected, Marshall B.
Edwards, Robert L. Honstein, Arch K. Jacobson and Louis G. Munin, to hold office
until the annual meeting of Stockholders held in the third year following the
year of their election and until their successors are elected and qualify. Each
of the nominees has consented to serve as a director if elected. If any of the
nominees shall become unable or unwilling to stand for election as a director
(an event not now anticipated by the Board of Directors), proxies will be voted
for such substitute as shall be designated by the Board of Directors. The
following table sets forth for each nominee for election as a director of the
Company his age, principal occupation, position with the Company, if any, and
certain other information. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF
THE NOMINEES.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Marshall B. Edwards 54 Mr. Edwards has been a Director and the Chief October 1993
Acquisitions Officer of the Company since
October 1993 and was elected President of
the Company on June 8, 1995. On October 20,
1997, Mr. Edwards was elected as Chief
Executive Officer of the Company. Prior to
joining the Company, Mr. Edwards served as
President of Westglen Realty Advisors, Inc.
from 1992 to 1993. From 1988 to 1992, Mr.
Edwards was Executive Vice President of NHP
Real Estate Corporation and President of NHP
Acquisition Corporation, both affiliates of
NHP, Inc., one of the largest owners and
operators of multifamily rental housing in the
United States. His principal responsibilities
at NHP included the acquisition, financing,
asset management and disposition of non-
subsidized rental apartments. Mr. Edwards was
previously with Walden from 1983 to 1988 as
Vice President of Acquisitions and later as
President of the management subsidiary of the
Company's predecessor.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Robert L. Honstein 43 Mr. Honstein has been a director of the Company October 1997
since October 1997. Mr. Honstein has been a
member of Nassau Capital L.L.C., the
investment manager for private investments
of Princeton University's endowment, since
1995. Prior thereto, Mr. Honstein was a Vice
President at Princeton University Investment
Company where he focused on the real estate
investing nationwide for Princeton
University's endowment from 1991 to 1995.
Before Princeton, he was partner at Matrix
Development Group, a commercial and
industrial real estate development firm in
New Jersey. Mr. Honstein serves as a
Director of Corporate Realty Investment
Company and Affordable Residential
Communities.
Arch K. Jacobson 71 Mr. Jacobson retired in 1998 as President of February 1994
Jacobson-Berger Capital Group, Inc. at the
time of its sale. Previously, Mr. Jacobson
was Chairman and Chief Executive Officer of
Union Pacific Realty Corporation (a
subsidiary of Union Pacific Corporation)
from 1986 to 1993. He was with the Real
Estate Department of The Prudential
Insurance Company from 1955 to 1980 and was
President and Chief Executive Officer of the
Prudential Development Company (a subsidiary
of the Prudential Insurance Company) from
1982 to 1986. Mr. Jacobson is a member of
the Urban Land Institute, a director of
Patriot American Hospitality, Inc. and a
member of the Board of Trustees of the
University of Mary Hardin Baylor.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Louis G. Munin 65 Mr. Munin retired in 1989 as Executive Vice February 1994
President and Chief Financial Officer of
Lafarge Corporation (North America's largest
cement manufacturer). Previously, he was
with General Portland Cement from 1966 until
it was acquired by Lafarge in 1981 where he
served as Senior Vice President and Chief
Financial Officer. Mr. Munin currently
serves on the Boards of Directors of Lafarge
Canada, Inc. and Chieftain International,
Inc. and as a member of the Finance Council
of the Catholic Diocese of Dallas. He is a
Certified Public Accountant and a member of
the American Institute of Certified Public
Accountants and the Financial Executives
Institute.
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1998, the Board of Directors
held four regular meetings and seven special meetings. Each of the directors
attended at least 75% of all meetings held by the Board of Directors and all
meetings of each committee of the Board of Directors on which such director
served during the fiscal year ended December 31, 1998.
The Board of Directors has an Audit Committee, an Executive Committee,
a Compensation Committee and a Nominating and Corporate Governance Committee.
The Audit Committee is an advisory committee whose current members are
Louis G. Munin, Robert L. Honstein and Arch K. Jacobson. The Audit Committee met
six times during the fiscal year ended December 31, 1998. The function of the
Audit Committee is to make recommendations concerning the engagement of
independent public accountants, review with the independent public accountants
the plans and results of the audit engagement, approve professional services
provided by the independent public accountants, review the independence of the
independent public accountants, consider the range of audit and nonaudit fees
and review the adequacy of the Company's internal accounting controls.
The Executive Committee currently consists of Linda Walker Bynoe,
Francesco Galesi, Mr. Honstein, Mr. Jacobson, Mr. Munin, and J. Otis Winters.
The Executive Committee has the authority to acquire, dispose of and finance
investments for the Company and execute contracts and agreements, including
those relating to the borrowing of money by the Company, and generally exercises
all other powers of the Board of Directors except for those which require action
by all
5
<PAGE> 8
directors or the independent directors under the Articles or the Company's
bylaws or under applicable law. The Executive Committee met five times during
the fiscal year ended December 31, 1998.
The Compensation Committee currently consists of Ms. Bynoe and Messrs.
Galesi and Winters. The function of the Compensation Committee is to oversee and
approve the Company's policy regarding overall compensation, management
development, performance appraisal and Chief Executive Officer succession. The
Compensation Committee has the specific responsibility for the compensation of
the key executives and recommends to the Board of Directors compensation for the
Chief Executive Officer and the executives that report directly to the Chief
Executive Officer. The Compensation Committee also administers the Walden
Residential Properties, Inc. 1994 Stock Option Plan, as amended (the "Stock
Option Plan") and the Company's other benefit plans. The Compensation Committee
met four times during the fiscal year ended December 31, 1998.
The Nominating and Corporate Governance Committee currently consists of
Ms. Bynoe and Messrs. Galesi, Honstein, Jacobson, Munin and Winters. The
Nominating and Corporate Governance Committee selects the candidates for
election as directors to be recommended to the Board of Directors for either
filling vacancies that arise from time to time on the Board or for presenting to
the stockholders at each annual meeting of stockholders. The committee also
assists the Board of Directors in carrying out its responsibilities by reviewing
corporate governance issues. The Nominating and Corporate Governance Committee
met one time during the fiscal year ended December 31, 1998.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are paid a $15,000
annual retainer, with an additional $5,000 retainer being paid to each member of
the Executive Committee (which amount is payable in shares of restricted stock)
and an additional $5,000 retainer payable to each committee chairperson. In
addition, each non-employee director receives a fee of $1,500 for attending each
meeting of the Board of Directors and an additional fee of $1,000 for attending
each committee meeting. Directors who are employees of the Company are not paid
any director's fees. The Company may reimburse all directors for their travel
expenses incurred in connection with attending meetings and their activities on
behalf of the Company.
The Stock Option Plan provides each director who is not an employee of
the Company and who is serving as a director on such date with automatic annual
grants of options to purchase 5,000 shares of Common Stock, within five days
following each annual meeting of Stockholders. Each of the current non-employee
directors was granted an option to acquire 5,000 shares of Common Stock in 1998.
Each such non-employee director option is exercisable on the first anniversary
of the date such option was granted. The exercise price of each such
non-employee director option is the greater of the fair market value of the
shares of Common Stock on the date of the grant or the average of the closing
prices of the Common Stock on the 20 business days preceding the date of grant.
Each non-employee director option will expire on the tenth anniversary of the
date of the grant.
6
<PAGE> 9
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Ms. Bynoe and Mr. Galesi neither
of whom is a former or current officer or employee of the Company or any of its
subsidiaries. No executive officer of the Company serves as an officer, director
or member of any entity, an executive officer or director of which is a member
of the Compensation Committee.
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers of the Company serve at the discretion of the
Board of Directors and are chosen annually by the Board of Directors at its
first meeting following the annual meeting of Stockholders. The following table
sets forth the names and ages of the executive officers and directors of the
Company and the positions held with the Company by each individual.
<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
EXECUTIVE OFFICERS
- ------------------
<S> <C> <C>
Michael E. Masterson................55 Chairman of the Board of Directors
Marshall B. Edwards.................54 President, Chief Executive Officer and Director
Mark S. Dillinger...................47 Executive Vice President, Chief Financial Officer and Director
Theodore M. Kerr....................40 Executive Vice President--Property Operations
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS
- ---------
<S> <C> <C>
Don R. Daseke.......................59 Chairman Emeritus
Maxwell B. Drever...................58 Chairman Emeritus
Linda Walker Bynoe..................46 Director
Francesco Galesi....................68 Director
Robert L. Honstein..................43 Director
Arch K. Jacobson....................71 Director
Louis G. Munin......................65 Director
J. Otis Winters.....................66 Director
- --------------------------------------
</TABLE>
OFFICERS
For a description of the business experience of Mr. Edwards, see
"Election of Directors" above.
Michael E. Masterson. Mr. Masterson has been Chairman of the Board and
a director of the Company since October 1997. Prior thereto, Mr. Masterson was
Executive Vice President of Drever Partners, Inc. from 1989 to 1992 and
President of Drever Partners, Inc. from 1992 to October 1997. As President of
Drever Partners, Inc. Mr. Masterson was responsible for the overall
administration of Drever Partners, Inc. and its subsidiaries, he coordinated
institutional financing and oversaw the several joint ventures in which
institutions were investors. From 1986
7
<PAGE> 10
to 1989, he was President of Asset Development and Management, Inc. in San
Francisco, a company charged with the management of a major portion of the
commercial REO portfolio of BA Properties I, subsidiary of Bank of America.
Prior to that (1984-1988), Mr. Masterson held the positions of Executive Vice
President and President, respectively, of The Innisfree Companies and IMG
Financial of Sausalito, major San Francisco Bay Area real estate development and
marketing concerns. His projects have won numerous awards, including the U.S.
Department of Energy National Energy Award, awards from the City and County of
Honolulu and the Pacific Coast Builders Choice Grand Award.
Mark S. Dillinger. Mr. Dillinger has been Executive Vice President and
Chief Financial Officer of the Company since October 1993. Mr. Dillinger joined
The Walden Group, Inc. ("Walden Group"), one of the Company's predecessor
entities, in 1982 and has served as Executive Vice President and the Chief
Financial Officer of Walden Group since 1987. Mr. Dillinger is a member of the
American Institute of Certified Public Accountants, the National Association of
Real Estate Investment Trusts and the National Multi-Housing Council.
Theodore M. Kerr. Mr. Kerr has been Executive Vice President--Property
Operations of the Company since March 1, 1999. From October 1997 through
February 1999, Mr. Kerr headed up the Company's Asset Management division and
was primarily responsible for the Company's repositioning program, as well as
overseeing strategies for maximizing the performance of the Company's individual
properties and its portfolio as a whole. Mr. Kerr joined Drever Partners, Inc.
in 1992 as its director of asset management. In that capacity, he was
responsible for the oversight of the portfolio's performance and played a
primary role in the implementation of enhancement programs at a number of Drever
properties. From 1985 to 1992, Mr. Kerr was with the Bank of America where he
was promoted to Vice President in charge of managing a diverse real estate and
loan portfolio valued in excess of $100 million.
DIRECTORS
Set forth below is a description of the business experience of each of
the directors continuing in office after the Annual Meeting. For a description
of the business experience of Messrs. Honstein, Jacobson and Munin, see
"Election of Directors" above.
Linda Walker Bynoe. Ms. Bynoe has been a Director of the Company since
February 1994. Ms. Bynoe is the President and Chief Operating Officer of Telemat
Ltd., a private investment and project management company located in Chicago,
Illinois. She was previously with Morgan Stanley from 1978 to 1989 where she
served as Vice President -- Capital Markets. Ms. Bynoe, a certified public
accountant, was on the audit staff of Arthur Andersen & Co. from 1974 to 1976.
She currently serves on the Boards of Directors of the American Odyssey Funds,
Inc. and Chart House Enterprises, Inc. Ms. Bynoe is also a Trustee of The Museum
of Contemporary Art in Chicago and a member of The Economic Club of Chicago and
The Financial Research and Advisory Committee of The Commercial Club. Ms.
Bynoe's term as a director of the Company expires at the 2000 annual meeting of
stockholders.
8
<PAGE> 11
Don R. Daseke. Mr. Daseke has been a Director of the Company since its
formation in September 1993 and Chairman of the Board of Directors and Chief
Executive Officer of the Company from October 1993 to October 1997. In October
1997, Mr. Daseke resigned as Chairman of the Board and Chief Executive Officer
and was elected as Chairman Emeritus of the Company. He has been the Chairman of
the Board of Directors, President and Chief Executive Officer of Walden Group
and its predecessor since 1974. Mr. Daseke is a Certified Public Accountant and
a member of the American, Connecticut and New York Institutes of Certified
Public Accounts, Chairman of the Board of Galapagos Studios, Inc., Chairman of
the Board of Netier Technologies, Inc., Chairman of the Board of U.S. Telephone
Holding, Inc., Director of Promise House and has served on the Board of Trustees
of DePauw University since 1984.
Maxwell B. Drever. Mr. Drever has been Chairman Emeritus and a director
of the Company since October 1997. From 1985 until October 1997, Mr. Drever was
Chairman of Drever Properties, Inc., which along with certain of its affiliates,
was the general partner of the partnerships from which the Company acquired a 79
property portfolio consisting of approximately 18,100 apartment units. In his
capacity as Chairman of Drever Partners, Inc., he set company policies and
devised strategies relevant to the acquisition, enhancement and management of
the company's 79 apartment properties in Texas, Georgia, Arizona and California.
From 1970 to 1985, Mr. Drever was President of Drever, McIntosh, Inc.,
acquiring, refurbishing and managing 60 projects in Seattle, Memphis, Columbus,
Tampa and other comparable cities. Mr. Drever is a Director of the National
Multi Housing Council and a Full Member of the Urban Land Institute.
Francesco Galesi. Mr. Galesi has been the Chairman of the Board and
sole equity holder of each entity constituting the Galesi Group since 1969. The
Galesi Group consists of a group of privately owned entities that invest in real
estate, telecommunications and manufacturing. These entities own and develop
numerous townhome developments and apartment complexes located in Florida,
Texas, Georgia and Colorado, office buildings in New York and Texas, and 10
million square feet of industrial parks. Mr. Galesi currently serves on the
Board of Directors of LDDS WORLDCOM, the fourth largest long distance telephone
company. In 1978, Mr. Galesi received the Award of Achievement from President
Carter for his contribution to economic development in the United States. Mr.
Galesi's term as a director of the Company expires at the 2001 annual meeting of
stockholders.
J. Otis Winters. Mr. Winters has been the Chairman of the Board of PWS
Group, Inc. (formerly Pate, Winters & Stone, Inc.), a corporate consulting firm,
since 1990. He previously served as Executive Vice President and Director of The
Williams Companies and Executive Vice president and Director of the First
National Bank and Trust Co. of Tulsa, Oklahoma. Mr. Winters currently serves on
the Boards of Directors of AMX Corporation, Chancellor Media Corporation and
Dynegy, Inc. He is a registered professional engineer (Oklahoma). Mr. Winters'
term as a director of the Company expires at the 2001 annual meeting of
stockholders.
9
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
annual and long-term compensation for the periods ended December 31, 1998, 1997
and 1996, accrued with respect to each of the Company's executive officers (the
"Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------- ------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options Compensation
------------------ ---- ------ ----- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Masterson(1)....... 1998 $250,000 $ -- $4,030(2) -- $ --
Chairman of the Board 1997 $ 62,500 $ -- $ -- 225,000 $ --
Marshall B. Edwards........... 1998 $304,500 $ -- $3,363(2) -- $4,999(3)
President and Chief 1997 $260,900 $ -- $ -- 190,000 $4,750(3)
Executive Officer 1996 $240,000 $ 110,000 -- 125,000 $7,220(3)
Mark S. Dillinger............. 1998 $200,000 $ -- $3,363(2) -- $4,802(3)
Executive Vice President 1997 $172,000 $ -- $ -- 125,000 $4,208(3)
and Chief Financial Officer 1996 $165,000 $ 59,000 $ -- 75,000 $6,882(3)
Theodore M. Kerr(4)........... 1998 $135,000 $ -- $ -- -- $4,162(3)
Executive Vice President-- 1997 $ 33,750 $ -- $ -- 44,000 $1,013(3)
Property Operations
</TABLE>
- -------------
(1) Mr. Masterson became an executive officer of the Company in October
1997. Prior to that, he was not employed by the Company; therefore, his
compensation numbers for 1997 reflect only the period from October to
December 1997.
(2) Represents the compensation amounts paid to offset tax consequences
resulting from subsidiary restricted stock awards.
(3) Represents the Company's matching contribution under its 401(k) Plan.
(4) Mr. Kerr became an executive officer of the Company in March 1999 and
began his employment with the Company in October 1997. His compensation
information reflects compensation paid to him in other capacities with
the Company since October 1997.
10
<PAGE> 13
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth certain information concerning the value
of the unexercised options as of December 31, 1998 held by the Executive
Officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised in-the-Money
Option/SARs at Fiscal Options/SARs at Fiscal
Shares Year-End Year End(1)
Acquired on ---------------------------- -----------------------------
Name Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Masterson....... -- $ -- 56,250 168,750 $ -- $ --
Marshall B. Edwards........ 5,000 $ 26,875 295,000 170,000 $ 178,500 $ --
Mark S. Dillinger.......... 17,175 $ 39,816 172,825 110,000 $ 98,562 $ --
Theodore M. Kerr........... -- $ -- 11,000 33,000 $ -- $ --
</TABLE>
- ---------------
(1) The fair market value on December 31, 1998 of the Common Stock
underlying the options was $20.44 per share.
EMPLOYMENT AGREEMENTS
Each of Messrs. Edwards and Dillinger has entered into an employment
agreement with the Company that expires on October 20, 2002 and February 5,
2002, respectively, each of Messrs. Masterson and Drever has entered into an
employment agreement with the Company that expires on October 1, 2002 and Mr.
Kerr has entered into an employment agreement with the Company that expires on
March 1, 2002 (collectively, the "Employment Agreements"). The Employment
Agreements provide annual salaries for each of such executives, subject to
increase at the discretion of the Board of Directors. The Employment Agreement
for Mr. Masterson grants him the right, on the second and third anniversaries of
the date of execution (October 1, 1999 and October 1, 2000), respectively, to
resign as an officer of the Company and to be engaged as a consultant for the
remainder of the term of the Employment Agreement. Pursuant to the terms of the
Settlement and Employment Agreement entered into between the Company and Mr.
Daseke in connection with his resignation as Chairman of the Board and Chief
Executive Officer of the Company, Mr. Daseke is to serve as Chairman Emeritus of
the Company until October 2000.
11
<PAGE> 14
Each of the employment agreements, other than Mr. Daseke's, provides
for the following terms:
o If the executive is terminated as a result of (1) any
intentional act of fraud, embezzlement or theft constituting a
felony or the continued willful refusal to perform his duties,
or (2) any reduction in his salary or job function or required
relocation, the executive will be entitled to receive an
amount equal to the highest annualized rate of salary prior to
the termination date.
o The payment of severance compensation of up 2.99 times the
executive's compensation, including both salary and cash
bonus, in the event the executive is terminated without cause
or by constructive discharge within three years following our
merger or consolidation with another entity.
Each employment agreement also prohibits the executive from competing against us
during the term of employment.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE OFFICER COMPENSATION
The following report of the Compensation Committee of the Company's
Board of Directors (the "Committee") and the performance graph that appears
immediately after such report shall not be deemed to be soliciting material or
filed with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or incorporated by reference in any document so
filed.
COMMITTEE RESPONSIBILITIES
The Committee is responsible for establishing, overseeing and approving
the Company's policy regarding overall compensation, management development and
performance appraisal. The Committee, composed entirely of independent,
non-employee directors, has specific responsibility for the compensation of the
Executive Officers and recommends, on an annual basis, to the Board of Directors
compensation for the Chief Executive Officer and the other Executive Officers
who report directly to him. The Committee is also responsible for administering
the Stock Option Plan.
The Committee serves pursuant to a charter adopted by the Board of
Directors which, among other things, directs the Committee to assure the Board
of Directors that the officers and key management personnel are effectively
compensated in terms of salaries, supplemental compensation and benefits. This
responsibility includes a continuing evaluation to determine whether the
Company's overall compensation is internally equitable, externally competitive
and that such compensation provides stockholder value.
12
<PAGE> 15
GENERAL COMPENSATION POLICIES
The Committee's philosophy for compensating executive officers is that
an incentive based compensation system tied to the Company's financial
performance and stockholder return will best align the interests of its
executive officers with the objectives of the Company and its stockholders. In
accordance with this philosophy, the Committee oversees the implementation of a
compensation system designed to meet the Company's financial objectives by
making a significant portion of an executive officer's compensation dependent
upon both the Company's and such executive's performance. The Committee bases
its compensation program on the following principles:
o Compensation levels are evaluated using surveys and analyses
of the real estate investment trust ("REIT") industry and of a
selected group of peer companies.
o The Company's executive compensation program consists of the
following elements:
(i) a base salary which results from an
assessment of each executive's level of
responsibility and experience, individual
performance and contributions to the
Company;
(ii) annual incentives that are directly related
to the performance of the executive's
department and the financial performance of
the Company as a whole; and
(iii) grants of stock options designed to motivate
individuals to enhance long-term
profitability of the Company and the value
of the Common Stock.
o Incentive Compensation is designed to reward the achievement
of both short and long-term Company objectives.
o The Company's executive compensation program provides
significant equity-based, long-term incentives that encourage
the long-term ownership of Common Stock in order to provide a
mutuality of interests between the executive officers and the
Company's stockholders.
The process used by the Committee in evaluating executive compensation
is also based upon the Committee's subjective judgment and takes into account
both qualitative and quantitative factors in determining an executive officer's
compensation level. At the end of each fiscal year, the Committee reviews annual
salary and bonus proposals made under the direction
13
<PAGE> 16
of the Chief Executive Officer and then recommends, with any modifications it
has deemed appropriate, such proposals to the full Board of Directors for its
approval.
BASE SALARY
Each of the Executive Officers has entered into an employment agreement
with the Company, which employment agreements are described under the caption
"Employment Agreements" contained in this Proxy Statement. Pursuant to the terms
of such employment agreements, the base salary levels of the Executive Officers
are to be reviewed and determined annually by the Committee. Recommendations for
compensation of the Executive Officers are provided by the Chief Executive
Officer after annual evaluations of individual contributions to the business of
the Company are held with each Executive Officer. No formal performance ratings
are assigned as a result of this performance evaluation process. The Committee
generally believes that, in order to attract and retain qualified executives, it
is necessary to provide market competitive compensation. Accordingly, the base
salary of each Executive Officer is determined from a market competitive and
performance based evaluation of the responsibilities of the position held and
the experience of that particular individual compared to other companies of
similar size and complexity in the same industry. To assess market compensation
levels, the Committee relies on REIT industry analyses and reports, as well as
reports and analyses prepared by independent third party consultants.
ANNUAL INCENTIVES
Executives are also eligible for annual incentive awards, designed to
make a significant part of an executive's annual compensation contingent upon
the achievement of certain performance targets. The Executive Officers
participate in a bonus incentive program under which the individual executives
are eligible for annual cash bonuses. Bonuses are determined primarily on the
basis of a comparison of actual performance against pre-established goals and
are, in part, based on the discretion of the Committee. For 1998 bonus awards,
the Committee considered the following performance measures: (i) achieving a
specific level of growth in funds from operations (which the Company generally
considers to be an appropriate measure of the performance of an equity REIT);
(ii) producing a total return (stock price change plus dividends paid) to
stockholders which exceeds that of certain of the Company's peers; and (iii)
receipt of an investment grade rating for the Company's debt securities. The
maximum amount available for payment of annual incentive awards to all the
Executive Officers has been established at 50% of the executive group's
aggregate base compensation. Individual bonus awards can vary from an Executive
Officer receiving no bonus to up to 100% of an Executive Officer's base salary.
No cash bonuses were paid to the Executive Officers for 1998 because the
performance measures were not met.
LONG-TERM INCENTIVES
In keeping with the Committee's philosophy to provide long-term
incentives to executive officers and other key employees, stock options are
granted at the then existing fair market value to executive officers and other
key employees on a periodic basis. The Committee establishes
14
<PAGE> 17
the number of options granted based upon REIT industry data and upon each
individual's base salary.
CEO PERFORMANCE EVALUATION
The Committee recommends to the Board of Directors for its approval the
compensation for all executives, including the Chief Executive Officer (the
"CEO"). In determining the CEO's salary for 1998, the Committee compared the
CEO's salary to that of the chief executive officers of Walden's peers set forth
above and set the CEO's salary at a rate competitive with other chief executive
officers with comparable duties. The CEO received no cash bonus for 1998.
TAX CONSIDERATIONS
The Committee has reviewed the federal tax legislation which makes
certain "non-performance based" compensation to certain executive officers in
excess of $1,000,000 non-deductible to the Company. While none of the Executive
Officers of the Company currently receives performance-based compensation at or
near the $1,000,000 maximum, the Committee has carefully considered the impact
of this tax legislation and has taken steps which are designed to minimize its
future effect, if any.
Linda Walker Bynoe
Francesco Galesi
J. Otis Winters
15
<PAGE> 18
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total stockholder return on the Common Stock, with the
cumulative total return of the S&P 500 Index and the Company's peer group (the
"Walden Peer Group"), assuming the investment of $100 on February 2, 1994 (the
date the Common Stock began trading) and the reinvestment of dividends. The
companies in the Walden Peer Group are as follows: Apartment Investment and
Management Company, Archstone Communities Trust, AvalonBay Communities, Inc.,
Camden Property Trust, Equity Residential Properties Trust, Post Properties,
Inc. and United Dominion Realty Trust.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, S&P 500 INDEX
AND WALDEN PEER GROUP
[GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING
------------------------------------------------------------------------
Index 2/2/94 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Walden Residential Properties, Inc. 100.00 98.03 126.02 163.46 181.03 157.34
S&P 500 100.00 97.88 134.66 165.44 220.65 283.71
Walden Peer Group 100.00 106.49 119.80 164.03 191.73 175.01
</TABLE>
16
<PAGE> 19
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 2, 1998, the Company issued to Marshall B. Edwards, Michael E.
Masterson, Maxwell B. Drever and Theodore M. Kerr 45,000 shares, 20,202 shares,
12,121 shares and 3,000 shares, respectively, of Common Stock, at a purchase
price of $24.75 per share (the closing price on the New York Stock Exchange on
that date). Additionally, on such date Mr. Edwards and Mark S. Dillinger
acquired an additional 5,000 shares and 5,175 shares, respectively, of Common
Stock upon the exercise of vested options at a price of $19.25 per share. Each
of Mr. Edwards and Mr. Masterson paid 10% of the purchase price in cash; each of
Mr. Dillinger and Mr. Kerr paid 5% of the purchase price in cash; and Mr. Drever
paid 15% of the purchase price in cash. The remaining balances of the purchase
prices are evidenced by notes payable to the Company bearing interest at 7% per
annum, payable quarterly, and due in February 2003. These notes are secured by
the shares purchased and are recourse as to the principal amount to each of such
officers.
On September 1, 1998, the Company issued to Mr. Edwards, Mr. Masterson
and Mr. Dillinger 11,049 shares, 4,419 shares and 7,500 shares, respectively of
Common Stock, at a purchase price of $22.625 (the closing price on the New York
Stock Exchange on that date). Each of Messrs. Edwards, Masterson and Dillinger
paid 10% of the purchase price in cash. The remaining balances of the purchase
prices are evidenced by notes payable to the Company bearing interest at 7% per
annum, payable quarterly, and due in August 2003. These notes are secured by the
shares purchased and are recourse as to the principal amount to each of such
officers.
At March 31, 1999, Ms. Bynoe and Messrs. Edwards, Masterson, Dillinger,
Drever, Kerr, Jacobson, Munin and Winters had balances of $9,687.50,
$2,332,579.01, $1,439,979.88, $738,747.81, $254,995.54, $165,529.43, $48,437.50,
$19,375.00 and $48,437.50 respectively, under notes payable to the Company
relating to stock purchases.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table and the notes thereto set forth certain information
with respect to the beneficial ownership of shares of Common Stock, as of March
31, 1999 (except as noted in the footnotes to such table), by each person or
group within the meaning of Section 13(d)(3) of the Exchange Act who is known to
the management of the Company to be the beneficial owner of more than five
percent of the outstanding Common Stock of the Company:
17
<PAGE> 20
<TABLE>
<CAPTION>
NUMBER OF
SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
OF BENEFICIAL OWNER OWNED OF CLASS
------------------- ----- --------
<S> <C> <C>
Don R. Daseke.......................................... 1,287,046(1) 5.1%
1625 West Crosby Road
Suite 100
Carrollton, Texas 75006
Yale University........................................ 1,255,875(2) 5.1%
230 Prospect Street
New Haven, Connecticut 06511
Westdale Properties America I, Ltd..................... 1,224,300(3) 5.0%
3300 Commerce
Dallas, Texas 75226
</TABLE>
(1) Includes 530,699 shares of Common Stock owned of record by The Walden
Group, Inc., of which Mr. Daseke is the holder of 90% of the common
stock and the sole director, and 720,000 shares of Common Stock which
Mr. Daseke has the right to acquire through the exercise of options
granted pursuant to the Stock Option Plan
(2) This information is provided in reliance on a Schedule 13G filed with
the SEC on or about February 16, 1999 by Yale University.
(3) This information is provided in reliance on Amendment No. 1 to Schedule
13D filed with the SEC on or about March 1, 1999 by Westdale Properties
America I, Ltd., JGB Ventures I, Ltd., JGB Holdings, Inc., Westdale
2000 Inc., Trivestment Holdings Limited, 657330 Ontario, Inc., Joseph
G. Beard ("Beard") and Ronald Kimmel (collectively, the "Reporting
Persons"). This number does not include 16,900 shares of Common Stock
beneficially owned by Beard separately from the shares beneficially
owned by the Reporting Persons.
SECURITY OWNERSHIP OF MANAGEMENT
The following table and the notes thereto set forth certain information
with respect to the beneficial ownership of shares of Common Stock of the
Company, as of March 31, 1999, by each director, each nominee for director, each
Executive Officer and by all Executive Officers and directors as a group:
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------- ------------------ --------
<S> <C> <C>
Michael E. Masterson................................... 140,796(3) (4)
Marshall B. Edwards.................................... 451,110(5) 1.8%
Mark S. Dillinger...................................... 232,565(6) (4)
Theodore M. Kerr....................................... 20,063(7) (4)
Maxwell B. Drever...................................... 100,576(8) (4)
Linda Walker Bynoe..................................... 23,837(9) (4)
Don R. Daseke.......................................... 1,287,046(10) 5.1%
Francesco Galesi....................................... 728,399(11) 2.9%
Robert L. Honstein..................................... 459(12) (4)
Arch K. Jacobson....................................... 27,059(9) (4)
Louis G. Munin......................................... 26,459(9) (4)
J. Otis Winters........................................ 21,459(13) (4)
All Directors and Executive Officers (12 persons)...... 3,059,828 11.5%
</TABLE>
18
<PAGE> 21
- -----------------
(1) The business address of all the persons named above is c/o Walden
Residential Properties, Inc., 5080 Spectrum Drive, Suite 1000 East,
Addison, Texas 75001, except for Mr. Daseke whose address is 1625 West
Crosby Road, Suite 100, Carrollton, Texas 75006.
(2) Except as otherwise indicated, (i) the persons named in this table have
sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by them, and (ii) none of the shares
shown in this table or referred to in the footnotes hereto are shares
of which the persons named in this table have the right to acquire
beneficial ownership as specified in Rule 13d-3(d)(1) promulgated under
the Exchange Act.
(3) Includes 56,250 shares of Common Stock which Mr. Masterson has the
right to acquire through the exercise of options granted pursuant to
the Stock Option Plan. Does not include 300,556 shares of Common Stock
issuable upon the exchange of units of beneficial interest of
Walden/Drever Operating Partnership, L.P. ("OP Units") held by Mr.
Masterson which become exchangeable on October 1, 1999.
(4) Less than 1%.
(5) Includes 295,000 shares of Common Stock which Mr. Edwards has the right
to acquire through the exercise of options granted pursuant to the
Stock Option Plan and 23,000 restricted shares of Common Stock, which
shares are subject to certain transfer restrictions which lapse over
time.
(6) Includes 172,825 shares of Common Stock which Mr. Dillinger has the
right to acquire through the exercise of options granted pursuant to
the Stock Option Plan and 11,000 restricted shares of Common Stock,
which shares are subject to certain transfer restrictions which lapse
over time.
(7) Includes 11,000 shares of Common Stock which Mr. Kerr has the right to
acquire through the exercise of options granted pursuant to the Stock
Option Plan. Does not include 24,945 shares of Common Stock issuable
upon the exchange of OP Units which held by Mr. Kerr become
exchangeable on October 1, 1999.
(8) Includes 87,500 shares of Common Stock which Mr. Drever has the right
to acquire through the exercise of options granted pursuant to the
Stock Option Plan. Does not include 1,440,112 shares of Common Stock
issuable upon the exchange of OP Units held by Mr. Drever which become
exchangeable on October 1, 1999.
(9) Includes 20,000 shares of Common Stock which such person has the right
to acquire through the exercise of options granted pursuant to the
Stock Option Plan and 1,459 restricted shares of Common Stock, which
shares are subject to certain transfer restrictions which lapse over
time (the "Director Restricted Shares").
(10) Includes 530,699 shares of Common Stock owned of record by The Walden
Group, Inc., of which Mr. Daseke is the holder of 90% of the common
stock and the sole director, and 720,000 shares of Common Stock which
Mr. Daseke has the right to acquire through the exercise of options
granted pursuant to the Stock Option Plan.
(11) Consists of 711,940 shares of Common Stock which entities controlled by
Mr. Galesi have the right to acquire pursuant to the Interests held in
Walden Operating Partnership, L.P., a Georgia limited partnership and
an affiliate of the Company ("Walden Operating Partnership"), 15,000
shares of Common Stock which Mr. Galesi has the right to acquire
through the exercise of options granted pursuant to the Stock Option
Plan and 459 Director Restricted Shares.
(12) Consists of 459 Director Restricted Shares.
(13) Includes 15,000 shares of Common Stock which Mr. Winters has the right
to acquire through the exercise of options granted pursuant to the
Stock Option Plan and 1,459 Director Restricted Shares.
19
<PAGE> 22
II. RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors selected Deloitte & Touche as the Company's
independent auditors for the year ending December 31, 1999. The Board of
Directors, upon recommendation of its Audit Committee, has appointed Deloitte &
Touche as the Company's independent auditors for the fiscal year ending December
31, 1999. Deloitte & Touche has been serving as the independent auditors of the
Company (including its predecessors) since 1979.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF DELOITTE
& TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER
31, 1999.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires that Company directors,
executive officers and persons who own more than 10% of the Common Stock file
initial reports of ownership and reports of changes in ownership of Common Stock
with the SEC. Officers, directors and stockholders who own more than 10% of the
Common Stock are required by the SEC to furnish the Company with copies of all
Section 16(a) reports they file.
To the Company's knowledge, based solely on the 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, 1999, the
Company's officers, directors and 10% stockholders complied with all Section
16(a) filing requirements applicable to them.
INDEPENDENT ACCOUNTANTS
Deloitte & Touche served as the Company's independent accountants for the
fiscal year ended December 31, 1999. A representative of Deloitte & Touche will
be present at the Meeting to answer any appropriate questions and to make a
statement if that person desires to do so.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2000 annual
meeting of stockholders of the Company must be received by the Secretary of the
Company at the Company's principal executive office no later than December 31,
1999, in order to be included in the proxy statement and form of proxy for such
meeting.
EXPENSES OF SOLICITATION
The expense of the solicitation of proxies will be borne by the Company.
In addition to the solicitation of proxies by mail, solicitation may be made by
the directors, officers and employees of the Company by other means, including
telephone, telecopy or in person. No special
20
<PAGE> 23
compensation will be paid to directors, officers or employees for the
solicitation of proxies. To solicit proxies, the Company also will request the
assistance of banks, brokerage houses and other custodians, nominees or
fiduciaries, and, upon request, will reimburse such organizations or individuals
for their reasonable expenses in forwarding soliciting materials to their
principals and in obtaining authorization for the execution of proxies.
Corporate Investor Communications has been retained to assist in the
solicitation of proxies for a fee not to exceed $2,000, plus reimbursement of
out-of-pocket expenses. No officer or director of the Company has an interest
in, or is related to any principal of, Corporate Investor Communications.
OTHER MATTERS
The management of the Company is not aware of any other matters to be
presented for action at the Meeting; however, if any such matters are properly
presented for action, it is the intention of the persons named in the enclosed
form of proxy to vote in accordance with their best judgment on such matters.
By Order of the Board of Directors,
EDWARD H. HATZENBUEHLER
Secretary
April 28, 1999
Dallas, Texas
STOCKHOLDERS ARE URGED, REGARDLESS OF THE NUMBER OF SHARES OF COMMON
STOCK OF THE COMPANY OWNED, TO DATE, SIGN AND RETURN THE ENCLOSED PROXY. YOUR
COOPERATION IN GIVING THESE MATTERS YOUR IMMEDIATE ATTENTION AND IN RETURNING
YOUR PROXY PROMPTLY IS APPRECIATED.
21
<PAGE> 24
REVOCABLE PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF WALDEN RESIDENTIAL PROPERTIES, INC.
The undersigned hereby appoint(s) Michael E. Masterson and Mark S.
Dillinger, or either of them, with full power of substitution and
resubstitution, proxies of the undersigned, with all of the powers that the
undersigned would possess if personally present, to cast all votes which the
undersigned would be entitled to cast at the Annual Meeting of Stockholders
(the "Annual Meeting") of Walden Residential Properties, Inc. (the "Company")
to be held on Wednesday, June 2, 1999, at the Spectrum Center Conference
Center, 5080 Spectrum Drive, Addison, Texas, commencing at 10:00 a.m., local
time, and any and all adjournments thereof, including (without limiting the
generality of the foregoing) to vote and act as follows:
1. Election of directors.
[ ] FOR the nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as indicated to the the nominees listed below
contrary)
Marshall B. Edwards Robert L. Honstein
Arch K. Jacobson Louis G. Munin
Instruction: To withhold authority to vote for any individual nominee(s),
write the name(s) here:
------------------------------------------------------
------------------------------------------------------
2. Proposal to ratify the appointment of Deloitte & Touche LLP as
independent auditors for the Company for the fiscal year ending December 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting. THIS PROXY WILL BE
VOTED AT THE ANNUAL MEETING OR ANY ADJOURNMENT THEREOF IN ACCORDANCE WITH THE
INSTRUCTIONS SET FORTH ABOVE OR, IN THE EVENT NO INSTRUCTIONS ARE SET FORTH,
THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES FOR DIRECTOR AND FOR PROPOSAL
2. This proxy hereby revokes all prior proxies given with respect to the shares
of the undersigned.
<PAGE> 25
Your Board of Directors unanimously recommends that you vote FOR each of
the nominees for director and for Proposal 2. Accordingly, please complete,
sign, date and return envelope. No postage is required for mailing in the
United States.
Date: ___________, 1999 -----------------------------------
Signature(s)
-----------------------------------
Signature(s)
IMPORTANT: Please date this proxy and sign
exactly as your name appears to the left.
If shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give title as such. If a
corporation, please sign in full corporate
name by president or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
