<PAGE>
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only
(as Permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
CENTERTRUST RETAIL 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
CENTERTRUST RETAIL PROPERTIES, INC.
3500 Sepulveda Boulevard
Manhattan Beach, California 90266
June 14, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") of CenterTrust Retail Properties, Inc. (the "Company") to be
held on July 14, 1999, at 1:00 p.m. local time, at The Marriott Hotel, Terrace
Ballroom A, located at 1400 Parkview Avenue, Manhattan Beach, California, for
the following purposes:
(1) to elect two directors to the Company's Board of Directors;
(2) to approve an amendment to the Company's Articles of Amendment and
Restatement, as amended (the "Restated Articles of Incorporation"), to
change the name of the Company to "Center Trust, Inc." (the "Name Change
Amendment");
(3) to approve an amendment to the Restated Articles of Incorporation to
state that nothing within the Restated Articles of Incorporation shall
preclude the settlement of transactions entered into through the facilities
of the New York Stock Exchange;
(4) to approve an amendment to the Company's Amended and Restated 1993
Stock Option and Incentive Plan, as amended (the "Restated Plan"), (a) to
increase the number of shares subject to options granted under the Restated
Plan, (b) to provide for the continued granting of incentive stock options
under the Restated Plan and (c) to reflect the change of the Company's name
to "Center Trust, Inc." subject to stockholder approval of the Name Change
Amendment; and
(5) to transact any other business that properly comes before the Annual
Meeting or any adjournments or postponements thereof.
I hope that you will be able to attend the meeting in person. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, WE URGE YOU TO SIGN, DATE, AND RETURN THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE OR TO VOTE BY TELEPHONE IN ACCORDANCE
WITH THE INSTRUCTIONS SET FORTH ON THE ENCLOSED PROXY CARD. This will not
prevent you from voting in person but will assure that your vote is counted if
you are unable to attend the meeting. Your shares will be voted at the meeting
as instructed in your proxy, if given.
I look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Edward D. Fox
EDWARD D. FOX
President, Chief Executive Officer
and
Chairman of the Board
<PAGE>
CENTERTRUST RETAIL PROPERTIES, INC.
3500 Sepulveda Boulevard
Manhattan Beach, California 90266
----------------
Notice of Annual Meeting of Stockholders
To Be Held on July 14, 1999
The Annual Meeting of Stockholders (the "Annual Meeting") of CenterTrust
Retail Properties, Inc. (the "Company") will be held at The Marriott Hotel,
Terrace Ballroom A, located at 1400 Parkview Avenue, Manhattan Beach,
California, on Wednesday, July 14, 1999, at 1:00 p.m., for the following
purposes:
(1) to elect a total of two directors to serve until the 2002 Annual
Meeting of Stockholders and until each of their respective successors is
elected and has qualified;
(2) to approve an amendment to the Company's Articles of Amendment and
Restatement, as amended (the "Restated Articles of Incorporation"), to
change the name of the Company to "Center Trust, Inc." (the "Name Change
Amendment");
(3) to approve an amendment to the Restated Articles of Incorporation to
state that nothing within the Restated Articles of Incorporation shall
preclude the settlement of transactions entered into through the facilities
of the New York Stock Exchange;
(4) to approve an amendment to the Company's Amended and Restated 1993
Stock Option and Incentive Plan, as amended (the "Restated Plan"), (a) to
increase the maximum number of shares which may be subject to options
granted under the Restated Plan by 750,000 shares, (b) to provide for the
continued granting of incentive stock options under the Restated Plan and
(c) to reflect the change of the Company's name to "Center Trust, Inc."
subject to stockholder approval of the Name Change Amendment; and
(5) to transact any other business that properly comes before the Annual
Meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 15, 1999 as
the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting or any adjournments thereof.
To ensure that you are represented at the Annual Meeting, the Company
requests that you sign and date the enclosed proxy card as promptly as
possible and return it in the enclosed envelope. If you attend the Annual
Meeting and vote your shares in person or file with the Secretary of the
Company an instrument revoking your proxy or a duly executed proxy bearing a
later date, your proxy will not be used. If you prefer, you may vote your
shares over the telephone (toll-free from the United States or Canada) by
following the enclosed telephone voting instructions. The voting procedures
are designed to authenticate each stockholder by use of a control number, to
allow stockholders to vote their shares, and to confirm that their
instructions have been properly recorded. You may still attend the Annual
Meeting if you vote by proxy or by telephone.
All stockholders are cordially invited to attend the Annual Meeting.
By Order of the Board of Directors,
/s/ Steven M. Jaffe
STEVEN M. JAFFE
Corporate Secretary
Manhattan Beach, California
June 14, 1999
<PAGE>
CENTERTRUST RETAIL PROPERTIES, INC.
----------------
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
July 14, 1999
CenterTrust Retail Properties, Inc., a Maryland corporation (the "Company"),
is furnishing this Proxy Statement to its stockholders in connection with the
solicitation of proxies to be voted at the Annual Meeting of Stockholders (the
"Annual Meeting") of the Company to be held on Wednesday, July 14, 1999 at
1:00 p.m. Proxies will be used for the following purposes: (1) to elect a
total of two directors to serve until the 2002 Annual Meeting of Stockholders
and until each of their respective successors is elected and has qualified to
serve; (2) to approve an amendment to the Company's Articles of Amendment and
Restatement, as amended (the "Restated Articles of Incorporation"), to change
the name of the Company to "Center Trust, Inc." (the "Name Change Amendment");
(3) to approve an amendment to the Restated Articles of Incorporation to state
that nothing within the Restated Articles of Incorporation shall preclude the
settlement of transactions entered into through the facilities of the New York
Stock Exchange (the "NYSE Amendment"); (4) to approve an amendment (the "Plan
Amendment") to the Company's Amended and Restated 1993 Stock Option and
Incentive Plan, as amended (the "Restated Plan"), (a) to increase the maximum
number of shares which may be subject to options granted under the Restated
Plan by 750,000, (b) to provide for the continued granting of incentive stock
options and (c) to reflect the change of the Company's name to "Center Trust,
Inc." subject to stockholder approval of the Name Change Amendment; and (5) to
transact any other business that properly comes before the Annual Meeting. The
approximate date on which this Proxy Statement and accompanying form of proxy
will first be sent to the Company's stockholders is June 14, 1999.
This solicitation is made on behalf of the Board of Directors of the Company
(the "Board of Directors" or the "Board"). Costs of the solicitation will be
paid by the Company. Directors (the "Directors"), officers and employees of
the Company and its affiliates may also solicit proxies by telephone,
telegraph, fax or personal interview. The Company has retained the services of
Corporate Investor Communications, Inc., for a fee estimated at $4,500 plus
out-of-pocket expenses, to assist in the solicitation of proxies. The Company
will reimburse banks, brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy material
to stockholders.
Holders of record of common stock, par value $.01 per share (the "Common
Stock"), of the Company as of the close of business on April 15, 1999 are
entitled to receive notice of, and to vote at, the Annual Meeting. The
outstanding Common Stock is the only class of securities of the Company
entitled to vote at the Annual Meeting, and each share of Common Stock
entitles its holder to one vote. Stockholders are not permitted to cumulate
their shares for the purpose of electing Directors or otherwise. At the close
of business on April 15, 1999, there were 24,437,348 shares of Common Stock
issued and outstanding.
Unless contrary instructions are indicated on the proxy, all shares
represented by valid proxies received in time to be voted at the Annual
Meeting (and not revoked before they are voted) will be voted "FOR" (i) the
nominees named below for election as Directors, (ii) the Name Change
Amendment, (iii) the NYSE Amendment, and (iv) the Plan Amendment. If any other
business properly comes before the Annual Meeting and is submitted to a vote
of stockholders, then proxies received by the Board of Directors will be voted
in accordance with the best judgment of the designated proxy holders. A
stockholder may revoke his or her proxy at any time before exercise by
delivering to the Secretary of the Company a written notice of such
revocation, by filing with the Secretary of the Company a duly executed proxy
bearing a later date, or by voting in person at the Annual Meeting.
Shares represented by proxies that reflect abstentions or "broker non-votes"
(i.e., shares held by a broker or nominee which are represented at the Annual
Meeting, but with respect to which such broker or nominee is
1
<PAGE>
not empowered to vote on a particular proposal) will be counted as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum. Directors will be elected and the Plan Amendment will be approved by a
favorable vote of a majority of the shares cast at the Annual Meeting,
providing that a quorum is present. The Name Change Amendment and the NYSE
Amendment will each be approved by a favorable vote of two-thirds of all of
the issued and outstanding shares of Common Stock. All other proposals to come
before the Annual Meeting require the approval of a majority of the votes cast
regarding the proposal. Therefore, (i) as to the Name Change Amendment and the
NYSE Amendment, abstentions and broker non-votes will have the same effect as
a vote against such proposals and (ii) as to the election of Directors, the
Plan Amendment and any other proposals to come before the Annual Meeting,
abstentions will have the same effect as a vote against such proposals and
broker non-votes will not be counted as votes for or against such proposals,
and will not be included in counting the number of votes necessary for
approval of such proposals.
The principal executive offices of the Company are located at 3500 Sepulveda
Boulevard, Manhattan Beach, California 90266. The Company's telephone number
is (310) 546-4520.
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors of the Company is currently comprised of eight
members divided into three classes serving staggered terms of three years
each. Since the Company's Amended and Restated Bylaws, as amended (the
"Bylaws"), provide for the existence of eleven members, there will be three
vacant positions on the Board immediately following the Annual Meeting.
Proxies cannot be voted for more than two persons, which is the number of
persons nominated for Director. Pursuant to the Company's Restated Articles of
Incorporation and Bylaws, the term of office of one class of Directors expires
each year and at each annual meeting the successors of the class whose term is
expiring in that year are elected to hold office for a term of three years and
until their successors are elected and have qualified.
In the absence of instructions to the contrary, the persons named as proxy
holders in the accompanying proxy intend to vote in favor of the election of
the two nominees designated below, each of whom is currently a Director of the
Company. Christine Garvey was elected by the Board of Directors to fill a
vacancy on the Board in June, 1999 and is now standing for election by the
stockholders. Stuart J.S. Gulland was elected by the Board of Directors to
fill a vacancy on the Board in 1998 and was then elected by the stockholders
at the 1998 Annual Meeting of Stockholders to serve until the 1999 Annual
Meeting. Warner Heineman, a current director whose term expires in 1999, is
not standing for re-election. If elected, both Mr. Gulland and Ms. Garvey will
serve until the 2002 Annual Meeting of Stockholders and until each of their
respective successors is elected and has qualified to serve. The Board of
Directors expects that each of the nominees will be available to serve as a
Director, but if any nominee should become unavailable for election, it is
intended that the shares represented by the proxy will be voted for a
substitute nominee who would be designated by the Board of Directors.
Under the Company's Bylaws, someone other than the Board may nominate a
person for election as a Director at the Annual Meeting only if the person
making the nomination has first delivered or mailed a timely notice to the
Secretary of the Company. To be timely, a stockholder's notice must be
delivered to or mailed and received at the Company's principal executive
offices not more than 90, nor less than 60 days prior to the Annual Meeting or
the tenth day following the day on which public disclosure of the Annual
Meeting date was made, whichever is later. A notice of nomination must set
forth certain information required under the Company's Bylaws.
Nominees for Election as Director
<TABLE>
<CAPTION>
Present Position With Director
Name Age The Company Since
---- --- --------------------- --------
<C> <C> <S> <C>
Christine Garvey............... 53 Director 1999
Stuart J.S. Gulland............ 37 Director, Senior Vice 1998
President and Chief
Financial Officer
</TABLE>
Christine Garvey has served as a Director of the Company since June, 1999.
Ms. Garvey served as President of Cadspec, a software firm, from December,
1998 to January, 1999. From April, 1997 to October, 1998, Ms. Garvey was Group
Executive Vice President, Commercial Real Estate Services Group of Bank of
America. From 1992 to March 1997, Ms. Garvey served as Executive Vice
President, Corporate Real Estate, Other Real Estate Owned ("OREO"), Sales and
Property Management of Bank of America. Prior to joining Bank of America, Ms.
Garvey was a Senior Vice President of Security Pacific Bank and was a Senior
Vice President of Wells Fargo Bank. Ms. Garvey currently serves on the Board
of Directors of Catellus Development Corporation, Timberland Growth
Corporation, San Francisco Architectural Heritage Foundation, Philharmonic
Baroque Orchestra and Pacific Gulf REIT. In addition, she is a member of the
Massachusetts, Vermont and Federal Bar Associations, Urban Land Institute,
National Association of Real Estate Investment Trusts, International
Association of Corporate Real Estate Executives, National Realty Committee,
Industrial Development Research Council and holds a Massachusetts Broker's
License.
3
<PAGE>
Stuart J.S. Gulland has served as a Director of the Company since April,
1998. Mr. Gulland also serves as the Company's Senior Vice President and Chief
Financial Officer. He has entered into an employment agreement with the
Company providing for his employment until September, 1999. He joined the
Company in April, 1995. Previously, Mr. Gulland specialized in real estate
with Deloitte & Touche, the international accounting and consulting firm. Mr.
Gulland is a Certified Public Accountant and a Chartered Accountant and is a
member of the American Institute of Certified Public Accountants, the
California Society of Certified Public Accountants and the Institute of
Chartered Accountants in England and Wales.
Directors Continuing in Office
<TABLE>
<CAPTION>
Director Term
Name Age Since Expires
---- --- -------- -------
<S> <C> <C> <C>
R. Bruce Andrews...................................... 58 1994 2001
Robert T. Barnum...................................... 53 1997 2000
Edward D. Fox......................................... 51 1997 2001
Anthony E. Meyer...................................... 37 1997 2000
Fred L. Riedman....................................... 68 1994 2000
Arthur P. Solomon..................................... 59 1997 2001
</TABLE>
R. Bruce Andrews has served as a Director of the Company since February,
1994. Mr. Andrews has been the President and Chief Executive Officer of
Nationwide Health Properties, a REIT specializing in health care properties,
since September, 1989. He served as Chief Financial Officer, Chief Operating
Officer and a director of American Medical International, Inc., an operator of
health care facilities, from 1970 to 1986.
Robert T. Barnum has served as a Director of the Company since August, 1997.
Mr. Barnum is a private investor and an advisor to private equity funds,
including Texas Pacific Group. He was the President and Chief Operating
Officer of American Savings Bank from 1989 until its sale in 1997. Mr. Barnum
served as the Chief Financial Officer of First Nationwide from 1984 to 1988
and the Krupp Companies, a major national real estate and financial services
firm, from 1982 to 1984. He was a director of Harborside Healthcare until its
sale in 1998 and a director of National Reinsurance until its sale to General
Reinsurance in 1996. He is currently a director of Westcorp, a publicly-held
thrift holding company and Berkshire Mortgage, a privately-held commercial
mortgage banking company.
Edward D. Fox has served as a Director of the Company since August, 1997 and
has served as Chairman of the Board of Directors since June, 1999. In
November, 1997 Mr. Fox became Interim President and Chief Executive Officer of
the Company, serving in such capacities until accepting the positions on a
permanent basis in March, 1998. He has entered into an employment agreement
with the Company providing for his employment until March, 2001. Prior to
joining the Company, Mr. Fox was founding and managing Partner of CommonWealth
Pacific, LLC, a major developer, owner and strategic advisor for office and
mixed use properties in the western United States. He was a Senior Partner and
the President of Maguire Thomas Partners from 1981 to 1995. Prior to that, Mr.
Fox was with Arthur Andersen, the international accounting and consulting
firm, where he specialized in real estate.
Anthony E. Meyer has served as a Director of the Company since August, 1997.
He is a Managing Director of Lazard Freres & Co., LLC and a principal of
Lazard Freres Real Estate Investors, LLC. Mr. Meyer was a General Partner and
Co-Founder of Trammell Crow Ventures, a $3 billion real estate investment and
finance affiliate of the Trammell Crow Group from 1984 to 1993. He is a
director of Dermody Properties and Cliveden Limited.
Fred L. Riedman has served as a Director of the Company since February,
1994. From 1965 to 1998, Mr. Riedman was a partner with the law firm of
Riedman, Dalessi & Dybens. Mr. Riedman is a trustee of the California Museum
Foundation and has also served on the board of directors of the Aquarium of
the Pacific at Long Beach, California since 1995.
4
<PAGE>
Arthur P. Solomon has served as a Director of the Company since August, 1997
and served as Chairman of the Board from November, 1997 to June, 1999. From
1987 to April 1999, Mr. Solomon was a Managing Director of Lazard Freres &
Co., LLC and head of its real estate group. Mr. Solomon has also served as the
senior principal of Lazard Freres Real Estate Investors, LLC. He was a Partner
and head of real estate investment banking at Drexel Burnham Lambert from 1984
to 1987. From 1982 to 1984, Mr. Solomon was Chief Executive Officer of the
Krupp Companies and served in the Johnson Administration on the President's
Task Force on Domestic and Intergovernmental Affairs from 1967 to 1968. Mr.
Solomon served as Executive Vice President and Chief Financial Officer of the
Federal National Mortgage Association (FNMA) from 1980 to 1982.
Messrs. Barnum, Fox, Meyer and Solomon were each originally designated for
nomination to the Board by Prometheus Western Retail, LLC ("Prometheus")
pursuant to a stockholders agreement between Prometheus, certain of its
affiliates and the Company whereby the Company agreed to support the
nomination and election of such nominees.
Board Meetings; Committees and Compensation
Certain significant actions of the Company, including transactions involving
a change of control of the Company, amendments to the Company's Restated
Articles of Incorporation or Bylaws or the issuance of securities or rights
with certain special voting or other rights, require the approval of a minimum
of one more than a majority of all Directors.
The Board of Directors met ten times during the year ended December 31,
1998. The Board of Directors has an Audit Committee, an Executive Committee, a
Compensation Committee, a Nominating Committee and an Acquisition/Disposition
Committee.
Audit Committee. Messrs. Andrews (Chairman), Barnum and Heineman currently
serve on the Audit Committee. The Audit Committee was established to make
recommendations concerning the engagement of independent auditors, review with
independent auditors the plans and results of the audit engagement, approve
professional services provided by the independent auditors, review the
independence of the independent auditors, consider the range of audit and non-
audit fees and review the adequacy of the Company's internal accounting
controls. The Audit Committee was created in February, 1994 and held two
meetings in 1998.
Executive Committee. Messrs. Fox and Solomon currently serve on the
Executive Committee. Subject to the Company's conflict of interest policies
and certain other limitations, the Executive Committee has been granted the
authority to acquire and dispose of real property and the power to authorize,
on behalf of the full Board of Directors, the execution of certain contracts
and agreements. The Executive Committee was created in February, 1994 and held
no meetings in 1998.
Compensation Committee. Messrs. Heineman (Chairman), Andrews, Riedman and
Barnum currently serve on the Compensation Committee. The Compensation
Committee determines compensation for the Company's executive officers and
administers grants of stock options and restricted stock pursuant to the
Restated Plan. The Compensation Committee held three meetings in 1998.
Nominating Committee. Messrs. Solomon (Chairman), Fox and Riedman currently
serve on the Nominating Committee. The Nominating Committee was established to
review the qualifications of candidates for Board membership, to review the
status of a Director when his or her principal position and/or primary
affiliation changes, to recommend to the Board of Directors candidates for
election by stockholders at annual meetings, to recommend candidates to fill
vacancies in directorships, to recommend to the Board of Directors the removal
of a Director, if in the Company's best interests, and to make recommendations
to the Board of Directors concerning selection, tenure retirement and
composition of the Board of Directors. The Nominating Committee considers
nominees recommended by stockholders. Detailed resumes of business experience
and personal data of potential nominees may be submitted to the Secretary of
the Company. The Nominating Committee was created in 1997 and held no meetings
in 1998.
5
<PAGE>
Acquisition/Disposition Committee. Messrs. Meyer (Chairman) and Fox
currently serve on the Acquisition/Disposition Committee. The
Acquisition/Disposition Committee was established to review the Company's
short-term and long-term plans regarding real estate acquisitions and
dispositions, to review and approve certain proposed real estate acquisitions
and dispositions and to make recommendations to the Board of Directors
regarding other proposed real estate transactions. The Acquisition/Disposition
Committee was created in 1997 and held four meetings in 1998.
The Company pays its non-employee Directors (the "Independent Directors") an
annual fee of $15,000. In addition, the Company pays the Independent Directors
fees of $1,000 for attendance at each meeting of the Board of Directors, $500
for attendance at committee meetings, and $375 for participation by telephone
at committee meetings. For the period between October 1, 1998 and May 20,
1999, the Company has elected to pay the Independent Directors their director
fees in stock in lieu of cash. The number of shares paid to each Independent
Director was determined by estimating the cash fees that would have been paid
to such Director for such period and calculating the number of shares payable
based on a stock price of $12.75 per share. Pursuant to this formula, each of
Directors Heineman, Barnum, and Andrews were paid 1,196 shares in lieu of cash
fees and Director Riedman was paid 1,098 shares in lieu of cash fees.
Directors Meyer and Solomon have agreed to waive their rights to receive
compensation as Directors of the Company during this period. Each Independent
Director is also reimbursed for expenses incurred in attending meetings
(including committee meetings). Officers of the Company who are Directors are
not paid any Director fees. Pursuant to the Restated Plan, upon initial
election to the Board of Directors, each Independent Director of the Company
receives an initial grant of options to purchase 5,000 shares of Common Stock
having an exercise price equal to the fair market value on the date of grant,
and thereafter on each January 1st during the term of the Restated Plan, each
then serving Independent Director automatically receives a grant of options to
purchase 2,500 shares of Common Stock at an exercise price equal to the fair
market value on the date of grant.
Required Vote for Approval and Recommendation of the Board of Directors
The affirmative vote of a majority of the shares present in person or
represented by proxy and entitled to vote at the Annual Meeting is required to
approve the election of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
APPROVAL OF THE ELECTION OF DIRECTORS. PROPERLY EXECUTED PROXIES WILL BE VOTED
FOR THE ELECTION OF DIRECTORS UNLESS STOCKHOLDERS DESIGNATE OTHERWISE.
6
<PAGE>
PROPOSAL NO. 2
APPROVAL OF AN AMENDMENT TO THE ARTICLES OF AMENDMENT
AND RESTATEMENT OF THE COMPANY TO CHANGE
THE NAME OF THE COMPANY
The Board of Directors of the Company has unanimously approved and directed
that there be submitted to stockholders for their approval an amendment to
Article I of the Restated Articles of Incorporation to change the name of the
Company to "Center Trust, Inc." To effect such a change, Article I of the
Company's Restated Articles of Incorporation will be amended to read in its
entirety as follows:
"ARTICLE I
NAME
The name of the corporation is: Center Trust, Inc."
The Name Change Amendment, if approved by stockholders, will become
effective on the date the Name Change Amendment is filed with the Maryland
Department of Assessments and Taxation. The Company anticipates that the
filing to effect the Name Change Amendment will be made as soon after the
Annual Meeting as practicable.
Required Vote for Approval and Recommendation of the Board of Directors
Approval of the Name Change Amendment requires the affirmative vote of two-
thirds of all of the issued and outstanding shares of the Common Stock
entitled to vote thereon. Accordingly, abstentions and broker non-votes will
have the effect of a vote against this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
NAME CHANGE AMENDMENT. PROPERLY EXECUTED PROXIES WILL BE VOTED FOR THE NAME
CHANGE AMENDMENT UNLESS STOCKHOLDERS DESIGNATE OTHERWISE.
7
<PAGE>
PROPOSAL NO. 3
APPROVAL OF AN AMENDMENT TO THE ARTICLES OF AMENDMENT AND RESTATEMENT
OF THE COMPANY TO STATE THAT NOTHING WITHIN THE ARTICLES SHALL
PRECLUDE THE SETTLEMENT OF TRANSACTIONS ENTERED INTO
THROUGH THE FACILITIES OF THE NEW YORK STOCK EXCHANGE
The Board of Directors of the Company has unanimously approved and directed
that there be submitted to stockholders for their approval an amendment to
Article VII of the Restated Articles of Incorporation to state that nothing
within the Restated Articles of Incorporation shall preclude the settlement of
transactions entered into through the facilities of the New York Stock
Exchange. As a condition of its listing on the New York Stock Exchange, the
Company is required to amend its Restated Articles of Incorporation to make it
clear that the restrictions on ownership and transfer set forth within the
Restated Articles of Incorporation will not cause trades made through the
facilities of the New York Stock Exchange to fail to settle. To effect such a
change, Section 2 and Section 6 of Article VII of the Company's Restated
Articles of Incorporation will be amended to read in their entirety as
follows:
"Section 2. Restriction on Ownership and Transfer. Provided that nothing
contained in these Articles shall preclude the settlement of transactions
entered into through the facilities of the NYSE, the following restrictions
on ownership and transfer of Common Stock shall apply:
A. Except as provided in Section 7 of this Article VII, from and after
the date of the Initial Public Offering, no Person shall Beneficially Own
or Constructively Own shares of Common Stock in excess of the Ownership
Limit.
B. Except as provided in Section 7 of this Article VII, from and after
the date of the Initial Public Offering, to the extent any Transfer or
other event (if effective) would result in any Person Beneficially Owning
or Constructively Owning Common Stock in excess of the Ownership Limit,
then (i) the Common Stock being Transferred (or in the case of an event
other than a Transfer, the Common Stock Constructively Owned or
Beneficially Owned) which would otherwise cause such Person to Beneficially
Own or Constructively Own Common Stock in excess of the Ownership Limit
shall be automatically converted into and exchanged for an equal number of
shares of Excess Stock (such conversion shall be effective as of the close
of business on the business day prior to the date of such Transfer or other
event) and such person shall acquire no rights in such shares of Common
Stock; and (ii) shall, if necessary to prevent any Person from Beneficially
Owning or Constructively Owning Common Stock in excess of the Ownership
Limit (notwithstanding the conversion to and exchange for Excess Stock
described in clause (i) of this Section 2.B.), be void ab initio as to the
Transfer of such shares of Common Stock or other event whereby the intended
transferee shall acquire no rights in such shares of Common Stock.
C. Except as provided in Section 7 of this Article VII, from and after
the date of the Initial Public Offering, any Transfer that, if effective,
would result in the Common Stock being beneficially owned by less than 100
Persons (determined without reference to any rules of attribution) shall be
void ab initio as to the Transfer of such shares of Common Stock which
would be otherwise beneficially owned by the transferee and the intended
transferee shall acquire no rights in such shares of Common Stock.
D. From and after the date of the Initial Public Offering, to the extent
any Transfer or other event (if effective) (i) would result in the
Corporation being "closely held" within the meaning of Section 856(h) of
the Code, or (ii) would otherwise result in the Corporation failing to
qualify as a REIT (including, but not limited to, a Transfer or other event
that would result in the Corporation owning (directly or Constructively) an
interest in a tenant that is described in Section 856(d)(2)(B) of the Code
if the income derived by the Corporation from such tenant would cause the
Corporation to fail to satisfy any of the gross income requirements of
Section 856(c) of the Code), then (iii) the Common Stock being Transferred
(or in the case of an event other than a Transfer, the Common Stock
Constructively Owned or Beneficially Owned) which would otherwise cause a
violation of clause (i) or (ii) of this Section 2.D. shall be automatically
converted into and exchanged for an equal number of shares of Excess Stock
(such conversion and exchange shall be
8
<PAGE>
effective as of the close of business on the business day prior to the date
of such Transfer or other event) and the intended transferee shall acquire
no rights in such shares of Common Stock; and (iv) shall, if necessary to
prevent a violation of clause (i) or (ii) of this Section 2.D.
(notwithstanding the conversion into and exchange for Excess Stock
described in clause (iii) of this Section 2.D.), be void ab initio as to
the Transfer of such shares of Common Stock or other event which would
otherwise cause a violation of clause (i) or (ii) of this Section 2.D.
whereby the intended transferee shall acquire no rights in such shares of
Common Stock."
and
"Section 6. Other Action by Board. Nothing contained in this Article VII
shall limit the authority of the Board of Directors to take such other
action as it deems necessary or advisable to protect the Corporation and
the interests of its stockholders by preservation of the Corporation's
status as a REIT, provided, however, that nothing in these Articles shall
preclude the settlement of transactions entered into through the facilities
of the NYSE."
Required Vote for Approval and Recommendation of the Board of Directors
Approval of this proposal requires the affirmative vote of two-thirds of all
of the issued and outstanding shares of the Common Stock entitled to vote
thereon. Accordingly, abstentions and broker non-votes will have the effect of
a vote against this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
NYSE AMENDMENT. PROPERLY EXECUTED PROXIES WILL BE VOTED FOR THE NYSE AMENDMENT
UNLESS STOCKHOLDERS DESIGNATE OTHERWISE.
9
<PAGE>
PROPOSAL NO. 4
APPROVAL OF AN AMENDMENT TO THE AMENDED AND RESTATED 1993
STOCK OPTION AND INCENTIVE PLAN, AS AMENDED
The Board of Directors has ratified the Compensation Committee's approval of
an amendment to the Restated Plan (the "Plan Amendment") (i) to increase the
maximum number of shares available for grants under the Restated Plan from
2,000,000 shares to 2,750,000 shares, (ii) to provide for the continued
granting of incentive stock options under the Restated Plan and (iii) to
reflect the change of the Company's name to "Center Trust, Inc." subject to
stockholder approval of the Name Change Amendment. The Plan Amendment, which
is described below and attached as an exhibit hereto, is effective as of April
1, 1999, subject to stockholder approval. If the Plan Amendment is not
approved by stockholders, the Restated Plan shall continue in effect as it
existed immediately prior to the adoption of the Plan Amendment. The Board and
the Compensation Committee recommend the approval by the stockholders of the
Plan Amendment.
The principal purposes of the Restated Plan are (a) to provide incentives
for officers, key employees and directors of the Company and its subsidiaries
through granting of options and restricted stock, thereby providing them with
incentive to further the Company's development and financial success, and (b)
to enable the Company and its subsidiaries to obtain and retain the services
of directors and key employees considered essential to the long range success
of the Company. The Board and the Compensation Committee believe that the Plan
Amendment, which increases the number of shares available for grants under the
Restated Plan and provides for the continued granting of incentive stock
options under the Restated Plan, will help provide performance incentives to
eligible participants to the benefit of the Company and its stockholders.
Summary of the Restated Plan and the Plan Amendment
The following summary of the Restated Plan, which incorporates the changes
made pursuant to the Plan Amendment, is qualified in its entirety by reference
to the Restated Plan itself, which may be obtained by making a written request
to the Company's Secretary, and the Plan Amendment, which appears as an
exhibit to this Proxy Statement.
General. The Restated Plan consists of three plans: (i) one for the benefit
of the officers and key employees of the Company and its subsidiaries; (ii)
one for the benefit of Independent Directors; and (iii) one for the benefit of
the officers and key employees of CT Operating Partnership, L.P. (the
"Operating Partnership") and its subsidiaries, the officers and key employees
of Haagen Property Management, Inc. ("HPMI") and its subsidiaries and the HPMI
directors. However, as of the termination of the Property Management Agreement
between the Operating Partnership and HPMI on December 31, 1997, employees of
HPMI and its subsidiaries and the HPMI directors are no longer eligible to
receive awards under the Restated Plan.
The approximate number of individuals in each class eligible to participate
in the Restated Plan is as follows: (a) 9 officers and other employees of the
Company and its subsidiaries (except the Operating Partnership); (b) 139
officers and other employees of the Operating Partnership and its
subsidiaries; and (c) 6 Independent Directors.
The Plan Amendment, if approved by the stockholders, would (i) increase the
number of shares authorized upon exercise of options or as restricted stock
awards from 2,000,000 to 2,750,000; (ii) constitute a new plan for purposes of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
thus permitting the continued granting of incentive stock options under the
Restated Plan; and (iii) provided that the Name Change Amendment is approved
by the stockholders, reflect the change of the Company's name from
"CenterTrust Retail Properties, Inc." to "Center Trust, Inc."
10
<PAGE>
NEW PLAN BENEFITS
AMENDED AND RESTATED 1993 STOCK OPTION AND INCENTIVE PLAN, AS AMENDED
<TABLE>
<CAPTION>
Number Value
($)(a)
Name and Position Dollar of Units (#)
----------------- ------ ------------
<S> <C> <C>
Edward D. Fox(b)...................................... -- --
President, Chief Executive Officer and
Chairman of the Board
Stuart J.S. Gulland(b)................................ -- --
Senior Vice President and Chief
Financial Officer
Steven M. Jaffe(b).................................... -- --
Senior Vice President, General
Counsel and Secretary
William P. Hewitt(b).................................. -- --
Senior Vice President,
Leasing
Mark D. Granados(b)(c)................................ -- --
Former Vice President,
Director of Acquisitions
Fred W. Bruning(d).................................... -- --
Former Senior Vice President
and Chief Investment Officer
Executive Group(b).................................... -- --
Non-Executive Director Group(b) ...................... -- 94,000(e)
Non-Executive Officer Employee Group(b) .............. -- --
</TABLE>
- --------
(a) The dollar value of the benefits is not determinable and depends on the
fair market value of the Company's Common Stock on the date of exercise of
the option or vesting of the restricted stock as compared to the fair
market value of the Company's Common Stock on the date of grant.
(b) Except with respect to the non-executive director group, the benefits or
amounts to be received under the Restated Plan by such individual or group
are not determinable. The benefits or amounts to be received by the non-
executive director group are determinable only to the extent the Restated
Plan provides for automatic grants to such individuals; such individuals
may also receive discretionary grants of restricted stock, the benefits or
amounts of which are not determinable.
(c) Effective April 1, 1999, Mr. Granados resigned from his position with the
Company. Mr. Granados has been retained as a consultant by the Company.
(d) Effective May 20, 1998, Mr. Bruning resigned from his positions with the
Company.
(e) As of December 31, 1998, the aggregate number of shares and options to
purchase shares granted as automatic grants to Independent Directors was
104,000. Options for 15,000 shares (3,000 per Independent Director) having
an exercise price of $18 per share were granted on February 9, 1994, at
which time the fair market value of the Common Stock was less than $18 per
share. Options for 1,000 shares (200 per Independent Director) having an
exercise price of $15.875 per share were granted on January 1, 1995, at
which time the fair market value of the Common Stock was $15.875 per
share. Options for 50,000 shares (10,000 per Independent Director) having
an exercise price of $11.625 per share were granted on August 14, 1995, at
which time the fair market value of the Common Stock was $11.625 per
share. Options for 5,000 shares (1,000 per Independent Director) having an
exercise price of $12.25 per share were granted on
11
<PAGE>
January 1, 1996, at which time the fair market value of the Common Stock,
for purposes of the Restated Plan, was $12.25 per share. Options for 6,000
shares (1,000 per Independent Director) having an exercise price of $14.75
per share were granted on January 1, 1997, at which time the fair market
value of the Common Stock, for purposes of the Restated Plan, was $14.75
per share. Options for 3,000 shares (1,000 per Independent Director) having
an exercise price of $17.35 per share were granted on January 1, 1998, at
which time the fair market value of the Common Stock, for purposes of the
Restated Plan, was $17.35 per share. Options for 5,000 shares having an
exercise price of $15.00 per share were granted to Mr. Barnum on June 25,
1998, at which time the fair market value of the Common Stock, for purposes
of the Restated Plan, was $15.00 per share. In addition, 6,000 shares
(1,000 per Independent Director) of restricted stock having a purchase
price of $.01 per share were granted on February 27, 1997 at which time the
fair market value of the Common Stock, for purposes of the Restated Plan,
was $15.50. James Hankla received an option for 3,000 shares of Common
Stock having an exercise price of $13.50 per share on May 15, 1997, at
which time the fair market value of the Common Stock, for purposes of the
Restated Plan, was $13.50.
As of December 31, 1998, the aggregate number of options and shares of
restricted stock received by each of the following individuals and groups of
individuals under the Restated Plan since its adoption are as follows:
(1) Edward D. Fox, President, Chief Executive Officer and Chairman of the
Board, had received (i) non-qualified options for 276,300 shares, (ii)
105,034 shares of restricted stock (of which, 45,034 were received in lieu
of cash compensation), and (iii) incentive stock options for 23,700 shares;
(2) Stuart J.S. Gulland, Senior Vice President and Chief Financial
Officer, had received (i) non-qualified options for 185,492 shares, (ii)
5,000 shares of restricted stock, and (iii) incentive stock options for
57,008 shares;
(3) Steven M. Jaffe, Senior Vice President, General Counsel and
Secretary, had received (i) non-qualified options for 155,897 shares, (ii)
5,000 shares of restricted stock, and (iii) incentive stock options for
33,533 shares;
(4) William P. Hewitt, Senior Vice President, Leasing, had received (i)
non-qualified options for 75,388 shares, (ii) 6,154 shares of restricted
stock, and (iii) incentive stock options for 24,612 shares;
(5) Mark D. Granados, Senior Vice President, Director of Acquisitions,
had received (i) non-qualified options for 75,388 shares and (ii) incentive
stock options for 24,612 shares;
(6) all current executive officers as a group had received aggregate
options for 1,175,138 shares and restricted stock awards for 133,640
shares;
(7) all current directors who are not officers as a group had received
aggregate options for 53,600 shares and restricted stock awards for 3,000
shares; and
(8) all employees, other than executive officers, had received aggregate
options for 46,310 shares and restricted stock awards for 3,819 shares.
On May 5, 1995, options for 20,000 shares were granted to non-officer
employees (such options are included in the options set forth in item (8)
above). On August 14, 1995, options for 192,500 shares were granted to seven
officers of the Company (a portion of such options are included in the options
set forth in items (1) through (6) above) and options previously granted to
non-officer employees on December 30, 1994 were repriced. No options were
granted in 1996. On May 15, 1997, options for 40,000 shares were granted to
specified non-officer employees (such options are included in the options set
forth on item (8) above). On May 30, 1997, options for 470,000 shares were
granted to six officers of the Company (a portion of such options are included
in the options set forth in items (1) through (6) above). On March 30, 1998,
options for 300,00 shares were granted to Mr. Fox. On August 20, 1998, options
for 615,000 shares were issued to eight officers (such options are included in
the options set forth in items (1) through (6) above). On December 31, 1998,
the closing price of a share of the Company's Common Stock on the American
Stock Exchange was $12.25.
12
<PAGE>
Administration of the Restated Plan. The Restated Plan is administered by
the Compensation Committee, or another committee of the Board appointed to
administer the Restated Plan (such committee is hereinafter referred to as the
"Committee"). The Committee interprets the Restated Plan and the options and
restricted stock thereunder, adopts such rules for the administration,
interpretation and application of the Restated Plan as are consistent
therewith and interprets, amends or revokes any such rules. The Board conducts
the general administration of the Restated Plan with respect to awards granted
to Independent Directors. In addition, the Board, in its absolute discretion,
may at any time exercise any and all rights or duties of the Committee under
the Restated Plan except with respect to matters which under Rule 16b-3 or
Section 162(m) of the Code, or any regulations or rules issued thereunder, are
required to be determined in the sole and absolute discretion of the
Committee.
The Committee selects from among the eligible employees the individuals to
whom options and restricted stock are to be granted and determines the number,
terms and conditions of shares to be subject thereto, consistent with the
Restated Plan. The Board selects which Independent Directors will receive
restricted stock and determines the number, terms and conditions of shares to
be subject thereto, consistent with the Restated Plan.
Awards to Employees. Subject to certain award and ownership limits, officers
and other employees of the Company, the Operating Partnership or any of their
respective subsidiaries who are determined by the Committee to be key
employees are eligible to receive options and restricted stock grants under
the Restated Plan. Options granted to employees of the Company or its
subsidiaries (other than the Operating Partnership) may be either nonqualified
stock options ("NQSOs") or incentive stock options ("ISOs"). The Plan
Amendment, if approved by the Company's stockholders would constitute a new
plan for purposes of Section 422 of the Code, thus permitting the continued
granting of ISO's under the Restated Plan. Prior to the termination of the
Property Management Agreement between the Operating Partnership and HPMI, HPMI
directors and employees of HPMI were also eligible to receive awards under the
Restated Plan.
NQSOs will provide for the right to purchase Common Stock at a specified
price which, unless intended to qualify as performance-based compensation for
purposes of Section 162(m) of the Code, may be less than fair market value on
the date of grant (but not less than par value unless otherwise permitted by
applicable state law). NQSOs may be granted for any term specified by the
Committee.
ISOs will be designed to comply with the applicable provisions of the Code
but may be subsequently modified to disqualify them from treatment as an ISO.
The exercise price of an ISO shall equal at least 100% of fair market value of
Common Stock on the grant date; provided, however, in the case of an ISO
granted to an individual then owning (within the meaning of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
the Company's stock (or the stock of any subsidiary or any parent corporation
of the Company), the price per share must be at least 110% of the fair market
value of such share on the date the option is granted. The term of ISOs shall
not be more than ten years from the date granted, or five years from such date
if the ISO is granted to an individual then owning more than 10% of the total
combined voting power described in the preceding sentence.
Options usually will become exercisable (in the discretion of the Committee)
in one or more installments after the grant date. Unless the Committee
otherwise provides, no option held by an employee subject to Section 16 of the
Securities Exchange Act of 1934, as amended ("Section 16"), may be exercised
during the first six months and one day after such option is granted. The
Committee may accelerate the time at which options granted to employees become
exercisable.
Restricted stock may be sold to eligible employees at various prices (but
not below par value unless otherwise permitted by applicable state law) and
may be made subject to such restrictions as may be determined by the
Committee. Unless the Committee otherwise provides, no share of restricted
stock granted to a person subject to Section 16 shall be sold, assigned or
otherwise transferred until at least six months and one day have elapsed from
the date on which the restricted stock was issued. Restricted stock,
typically, may be repurchased
13
<PAGE>
by the Company immediately upon a restricted stockholder's termination of
employment at the original purchase price if the conditions or restrictions
are not then met. In addition, unless provided otherwise by the Committee, if
no consideration was paid by the restricted stockholder upon issuance, a
restricted stockholder's rights in unvested restricted stock shall lapse upon
termination of employment. In general, restricted stock may not be sold, or
otherwise transferred or hypothecated, until restrictions are removed or
expire. Unless otherwise provided by the Committee, purchasers of restricted
stock, unlike recipients of options, will have voting rights and will receive
dividends prior to the time when the restrictions lapse, subject to the
restrictions in his or her restricted stock agreement, except that in the
discretion of the Committee, any extraordinary distributions with respect to
the Common Stock shall be subject to the restrictions applicable to the
restricted stock.
Awards to Independent Directors. All options granted to Independent
Directors are NQSOs. Subject to certain award and ownership limits, each
Independent Director of the Company automatically receives an option to
purchase 5,000 shares of Common Stock on the date of his or her election to
the Board; and on January 1 of each year during the term of the Restated Plan,
automatically receives an option to purchase 2,500 shares of Common Stock. The
maximum number of shares which may be subject to options granted to any
individual in any one-year period cannot exceed 500,000.
The exercise price of options granted to Independent Directors equals 100%
of the fair market value of a share of Common Stock on the date the option is
granted, except for options granted shortly after the initial public offering
of the Common Stock of the Company.
The term of options granted to Independent Directors is ten years from the
date the option is granted, and options granted to Independent Directors
become exercisable in cumulative annual installments of 25% on each of the
first, second, third and fourth anniversaries of the date of option grant,
without variation or acceleration except as described below with respect to
certain corporate transactions.
Restricted stock may be sold to Independent Directors at various prices (but
not below par value unless otherwise permitted by applicable state law) and
may be made subject to such restrictions as may be determined by the Board.
Unless the Board otherwise provides, no share of restricted stock granted to
an Independent Director shall be sold, assigned or otherwise transferred until
at least six months and one day have elapsed from the date on which the
restricted stock was issued. Restricted stock, typically, may be repurchased
by the Company immediately upon a restricted stockholder's termination of
employment at the original purchase price if the conditions or restrictions
are not then met. In addition, unless provided otherwise by the Board, if no
consideration were paid by the Independent Director upon issuance, a
restricted stockholder's rights in unvested restricted stock shall lapse upon
termination of employment. In general, restricted stock may not be sold, or
otherwise transferred or hypothecated, until restrictions are removed or
expire. Unless otherwise provided by the Board, purchasers of restricted
stock, unlike recipients of options, will have voting rights and will receive
dividends prior to the time when the restrictions lapse, subject to the
restrictions in his or her restricted stock agreement, except that in the
discretion of the Board, any extraordinary distributions with respect to the
Common Stock shall be subject to the restrictions applicable to the restricted
stock.
Consideration. Except as the Committee (or the Board, in the case of awards
to Independent Directors) may otherwise provide, in consideration of the
granting of a stock option or restricted stock, the employee or Independent
Director must agree in the written award agreement to remain in the employ of,
or to continue as a director for, the Company, or the Operating Partnership,
or a subsidiary thereof, for at least one year (or such shorter period as may
be fixed in the agreement or by actions of the Committee or the Board
following the grant) after the award is granted (or until the next annual
meeting of the stockholders of the Company, in the case of an Independent
Director).
Exercise of Options. Options may be exercised by compliance with certain
prescribed procedures. The option price must be paid in cash unless the
Committee (or the Board, in the case of options granted to Independent
Directors) in its discretion allows payment through delivery of shares of
Common Stock with a fair market value on the date of delivery equal to the
aggregate option price or (subject to certain timing requirements
14
<PAGE>
if the option was granted prior to November 19, 1996) through the surrender of
shares issuable upon exercise of the option. In addition, in the case of
options granted to employees, the Committee may allow a delay in payment for
up to thirty days or through the delivery of other property or by a
combination of these methods. The Committee may make loans to employees in
connection with the exercise or receipt of options or the issuance of
restricted stock.
No option granted to any Independent Director may be exercised to any extent
by anyone after the first to occur of the following events: (i) ten years from
the date of option grant, or (ii) three months from the date of termination of
directorship (for any reason other than death or disability), or (iii) one
year from the date of such Independent Director's death or disability. The
Committee shall provide, in the terms of each individual option granted to an
employee, when such option expires and becomes unexercisable and, except as
limited by the Code and the regulations and rulings thereunder with respect to
ISOs, the Committee may expand the term of any option granted to an employee.
Acceleration and Termination Upon Corporate Events and Transactions. Subject
to certain limitations, in the event of certain corporate transactions set
forth in the Restated Plan or any unusual or nonrecurring transactions or
events affecting the Company, or of changes in applicable laws, regulations,
or accounting principles, the Committee (or the Board, in the case of awards
granted to Independent Directors) may take certain actions set forth in the
Restated Plan whenever it determines that such action is appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Restated Plan or with respect to any
option, or restricted stock, to facilitate such transactions or events or to
give effect to such changes in laws, regulations or principles.
Amendment And Termination. Generally, the Restated Plan can be amended,
modified, suspended or terminated by the Board or the Committee. However,
without approval of the Company's stockholders given within twelve months
before or after the action by the Committee or the Board, no action of the
Committee or the Board may increase the limits imposed on the maximum number
of shares which may be issued under the Restated Plan or, subject to certain
exceptions, modify any award limits, and no action of the Committee or the
Board may be taken that would otherwise require stockholder approval as a
matter of applicable law, regulation or rule. No termination date is specified
for the Restated Plan.
Federal Income Tax Consequences
The following discussion is a general summary of the material U.S. federal
income tax consequences to U.S. participants in the Restated Plan, and is
intended for general information only. The discussion is based on the Code,
regulations thereunder, rulings and decisions now in effect, all of which are
subject to change. Alternative minimum tax and state and local income taxes
are not discussed, and may vary depending on individual circumstances and from
locality to locality. Depending on the interaction of Section 83(a) of the
Code with the provisions of Rule 16b-3 which apply to the Restated Plan at the
time of the grant of options and restricted stock, the tax consequences to
persons subject to Section 16 may be different from the general consequences
described below.
Section 162(m). Under Section 162(m) of the Code, income tax deductions of
publicly-traded companies may be limited to the extent total annual
compensation for certain executive officers exceeds $1 million (less the
amount of any "excess parachute payments" as defined in Section 280G of the
Code) in any one year. However, under Section 162(m), the deduction limit does
not apply to certain "qualified performance-based compensation" established by
an independent compensation committee which is adequately disclosed to, and
approved by, stockholders. In particular, stock options will satisfy the
performance-based exception if the awards are made by a qualifying
compensation committee under a plan that has been approved by the Company's
stockholders, the plan sets the maximum number of shares that can be granted
to any particular employee within a specified period and the compensation is
based solely on an increase in the stock price after the grant date (i.e. the
option exercise price is equal to or greater than the fair market value of the
stock subject to the award on the grant date). Restricted stock granted under
the Restated Plan will not qualify as "qualified performance-based
15
<PAGE>
compensation" for purposes of Section 162(m) unless such restricted stock
vests upon preestablished objective performance goals, the material terms of
which are disclosed to and approved by the stockholders of the Company. Thus,
the Company expects that restricted stock granted under the Restated Plan will
not constitute "qualified performance-based compensation" for purposes of
Section 162(m).
It is the practice of the Committee to attempt to have all compensation
treated as tax-deductible compensation wherever, in the judgment of the
Committee, to do so would be consistent with the objectives of the
compensation plan under which the compensation is paid. Accordingly, the Board
of Directors is asking stockholders to approve the Plan Amendment in
compliance with requirements of Section 162(m). In general, the Company
intends to comply with other requirements of the performance-based
compensation exclusion under Section 162(m) with respect to option grants,
including option pricing requirements and requirements governing the
administration of the Restated Plan, so that, upon stockholder approval of the
Plan Amendment, the deductibility of compensation paid to top executives
pursuant to options issued thereunder is not expected to be disallowed.
Nonqualified Stock Options. For federal income tax purposes, the recipient
of NQSOs granted under the Restated Plan will not have taxable income upon the
grant of the option, nor will the Company then be entitled to any deduction.
Generally, upon exercise of NQSOs the optionee will realize ordinary income,
in an amount equal to the difference between the option exercise price and the
fair market value of the stock at the date of exercise. Subject to the
deductibility limits of Section 162(m), upon exercise of a NQSO by an employee
of the Company or a Company subsidiary or by an Independent Director, the
Company will be entitled to a deduction in an amount equal to such difference.
An optionee's basis for the stock for purposes of determining his gain or loss
on his subsequent disposition of the shares generally will be the fair market
value of the stock on the date of exercise of the NQSO.
The tax consequence resulting from the exercise of a NQSO through delivery
of already-owned Company shares are not completely certain. In published
rulings, the Internal Revenue Service has taken the position that, to the
extent an equivalent value of shares is acquired, the optionee will recognize
no gain and the employee's basis in the stock acquired upon such exercise is
equal to the employee's basis in the surrendered shares, that any additional
shares acquired upon such exercise are compensation to the employee taxable
under the rules described above and that the employee's basis in any such
additional shares is their then-fair market value.
Incentive Stock Options. There is no taxable income to an optionee when an
ISO is granted to him or when that option is exercised; provided, however,
that upon exercise the optionee's alternative minimum taxable income will
generally include an amount equal to the difference between the option
exercise price and the fair market value at the time of exercise. Gain
realized by an optionee upon sale of stock issued on exercise of an ISO is
taxable at capital gains rates, and no tax deduction is available to the
Company, unless the optionee disposes of the shares within two years after the
date of grant of the option or within one year of the date the shares were
transferred to the optionee. In such event, the difference between the option
exercise price and the fair market value of the shares on the date of the
option's exercise will be taxed at ordinary income rates, and, subject to the
deductibility limits of Section 162(m), the Company will be entitled to a
deduction to the extent the employee must recognize ordinary income. An ISO
exercised more than three months after an optionee's termination of
employment, other than by reason of death or disability, will be taxed as a
NQSO, with the optionee deemed to have received income upon such exercise
taxable at ordinary income rates. Subject to the deductibility limits of
Section 162(m), the Company will be entitled to a tax deduction equal to the
ordinary income, if any, realized by the optionee.
The tax consequences resulting from the exercise of an ISO through delivery
of already-owned shares of Common stock are not completely certain. In
published rulings and proposed regulations, the Internal Revenue Service has
taken the position that generally the employee will recognize no income upon
such stock-for-stock exercise, that, to the extent an equivalent number of
shares is acquired, the employee's basis in the shares acquired upon such
exercise is equal to the employee's basis in the surrendered shares increased
by any compensation income recognized by the employee, that the employee's
basis in any additional shares acquired
16
<PAGE>
upon such exercise is zero and that any sale or other disposition of the
acquired shares within the one- or two-year period described above will be
viewed first as a disposition of the shares with the lowest basis.
Restricted Stock. An employee or Independent Director to whom restricted
stock is issued will not have taxable income upon issuance and the Company
will not then be entitled to a deduction. However, when restrictions on shares
of restricted stock lapse, such that the shares are no longer subject to
repurchase by the Company, the grantee will realize ordinary income and,
subject to the deductibility limits of Section 162(m), the Company will be
entitled to a deduction in an amount equal to the fair market value of the
shares at the date such restrictions lapse, less the purchase price therefor.
Grantees of restricted stock may not make an election under Section 83(b) of
the Code.
Required Vote for Approval and Recommendation of the Board of Directors
The affirmative vote of a majority of the total shares, present in person or
represented by proxy at the Annual Meeting, is required to approve the Plan
Amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 4.
PROPERLY EXECUTED PROXIES WILL BE VOTED FOR THE RESTATED PLAN, AS AMENDED BY
THE FIRST AMENDMENT UNLESS STOCKHOLDERS DESIGNATE OTHERWISE.
17
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of December 31, 1998 regarding
beneficial ownership of the Common Stock of the Company by (1) each person
known by the Company to be the beneficial owner of 5% or more of the Company's
Common Stock, (2) each director and nominee for director of the Company, (3)
the Chief Executive Officer and the other named executive officers of the
Company and (4) the Company's executive officers and directors as a group.
<TABLE>
<CAPTION>
Shares Beneficially Owned
-------------------------------------
Amount and
Nature of
Beneficial Percent of
Name of Beneficial Owner Ownership(a) Class(b)
------------------------ ------------ ----------
<S> <C> <C>
Prometheus Western Retail, LLC.......... 15,666,666(c) 56.8%
30 Rockefeller Plaza
New York, NY 10020
Merrill Lynch & Co., Inc. .............. 1,666,668(d) 6.6%
World Financial Center, North Tower
250 Vesey Street, New York, NY 10281
Heitman PRA Securities Advisors......... 1,297,500(e) 5.0%
180 N. La Salle St., Ste, 3600
Chicago, IL 60601
Haagen Limited Partnership.............. 3,962,482(f) 13.8%
Edward D. Fox........................... 105,034(g) *
Mark D. Granados(h)..................... -- *
Stuart J.S. Gulland..................... 66,875(i) *
William P. Hewitt....................... 6,154(j) *
Steven M. Jaffe......................... 13,646(k) *
R. Bruce Andrews........................ 19,400(l) *
Christine Garvey........................ -- *
Warner Heineman......................... 21,400(l) *
Fred L. Riedman......................... 14,400(l) *
Robert T. Barnum........................ 13,000 *
Anthony E. Meyer........................ -- *
Arthur P. Solomon....................... -- *
Fred W. Bruning......................... 332,750(m) 1.3%
All Directors and Executive Officers as
a group (11 persons)................... 290,644(g)(i)(j)(k)(n) 1.1%
</TABLE>
- --------
* Less than 1%
(a) For purposes of this Proxy Statement, beneficial ownership of securities
is defined in accordance with the rules of the Securities and Exchange
Commission and means generally the power to vote or exercise investment
discretion with respect to securities, regardless of any economic
interests therein. Except as otherwise indicated, the Company believes
that the beneficial owners of shares of Common Stock listed in this table
have sole investment and voting power with respect to such shares, subject
to community property laws where applicable.
(b) Based on 25,346,727 shares of Common Stock outstanding as of December 31,
1998.
18
<PAGE>
(c) Assuming consummation of the purchase of all shares of Common Stock to be
purchased pursuant to a stock purchase agreement between the stockholder
and the Company and assuming no other changes, the percent of class would
equal 56.8%. The Schedule 13G filed by the stockholder indicates sole
voting power and sole dispositive power with respect to all shares.
(d) The Schedule 13G filed by the stockholder indicates shared investment and
dispositive power with respect to all shares. Includes shares that the
holder has the right to acquire through the exchange of 7 1/4%
exchangeable subordinated debentures due in 2003.
(e) Although the stockholder has not filed a Schedule 13G, the Company
believes that the stockholder owns the number of shares indicated.
(f) In connection with the retirement of Alexander Haagen, Sr., Charlotte
Haagen and Alexander Haagen III (the "Haagen Family") from the Company, on
May 25, 1999, the Company purchased from Haagen Limited Partnership and
certain members of the Haagen Family, 817,534 shares of Common Stock and
2,839,284 OP Units at a previously agreed upon price per share of $17.
Certain of the shares of Common Stock repurchased represented options to
purchase Common Stock held by the Haagen Family.
(g) Includes 60,000 shares of restricted stock received per the terms of Mr.
Fox's employment contract and 45,034 shares of restricted stock received
in lieu of cash compensation.
(h) Effective April 1, 1999, Mr. Granados resigned from his position with the
Company. Mr. Granados has been retained as a consultant by the Company.
(i) Includes options to purchase 61,875 shares which are exercisable within 60
days as of December 31, 1998.
(j) Represents shares of restricted stock received per the terms of Mr.
Hewitt's employment contract.
(k) Includes options to purchase 8,646 shares of Common Stock which are
exercisable within 60 days as of December 31, 1998.
(l) Includes options to purchase 11,400 shares of Common Stock which are
exercisable within 60 days as of December 31, 1998.
(m) Includes options to purchase 68,750 shares of Common Stock and 262,333 OP
Units which are exchangeable for shares of Common Stock.
(n) Includes options to purchase 104,721 shares of Common Stock which are
exercisable within 60 days as of December 31, 1998.
19
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the names, ages and positions of each of the
Company's executive officers.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Edward D. Fox........... 51 President, Chief Executive Officer and Chairman of the Board
Stuart J.S. Gulland..... 37 Senior Vice President, Chief Financial Officer and Director
William P. Hewitt....... 49 Senior Vice President, Leasing
Steven M. Jaffe......... 37 Senior Vice President, General Counsel and Corporate Secretary
Joseph F. Paggi, Jr. ... 61 Senior Vice President, Assets
Edward A. Stokx......... 33 Vice President and Controller
</TABLE>
In addition to Messrs. Fox and Gulland, whose biographies appear above, the
following persons are executive officers of the Company:
William P. Hewitt, Senior Vice President, Leasing, joined the Company in
April, 1998 and has entered into an employment agreement with the Company
providing for his employment until April, 2001. Previously, Mr. Hewitt served
as a Senior Vice President of Forest City Development, where he was
responsible for its West Coast commercial real estate portfolio, totaling in
excess of five million square feet. Mr. Hewitt was with Forest City
Development since 1988. From 1984 to 1987, he served as Vice
President/Director of Leasing for MacDonald Group. Mr. Hewitt is a graduate of
California State University at Northridge.
Steven M. Jaffe, Senior Vice President, General Counsel, and Corporate
Secretary of the Company, has been with the Company since September 1993 and
has entered into an employment agreement with the Company providing for his
employment until September, 1999. Mr. Jaffe had previously served as counsel
for The Alexander Haagen Company, a predecessor to the Company, since 1990.
Prior to his employment with The Alexander Haagen Company, Mr. Jaffe was an
associate with the Los Angeles law firm of Pircher, Nichols and Meeks. Mr.
Jaffe is a member of the California Bar Association and is a graduate of the
University of California at Berkeley and Hastings College of the Law.
Joseph F. Paggi, Jr., Senior Vice President, Assets, joined the Company in
April, 1998 and has entered into an employment agreement with the Company
providing for employment until April, 2000. From 1993 to 1998 he was Senior
Vice President for Blatteis Realty Co., a 75 year old firm specializing in
retail properties nationally. From 1989 to 1998 Mr. Paggi served as a
consultant for Waterfront Renaissance Associates, owner/developer of Philly
Walk, and as a retail development consultant to Playa Capital Company, LLC,
the successor to Maguire Thomas Partners for the development of Playa Vista, a
1,300 acre mixed-use project near Marina Del Rey, California. Mr. Paggi was a
national retail consultant for Maguire Thomas Partners from 1988 to 1993. He
is a graduate of UCLA and Loyola University School of Law.
Edward A. Stokx, Vice President and Controller, joined the Company in
October, 1997 and has entered into an employment agreement with the Company
providing for his employment until Spetember, 1999. Prior to joining the
Company, Mr. Stokx was a Senior Manager with Deloitte & Touche LLP and in his
capacity with Deloitte & Touche LLP was associated with the Company from 1993
to October, 1997. Mr. Stokx is a Certified Public Accountant and a member of
the American Institute of Certified Public Accountants and the California
Society of Public Accountants. Mr. Stokx is a graduate of Loyola Marymount
University.
20
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation
awarded to, earned by or paid during the fiscal years ended December 31, 1996,
1997 and 1998 to the Company's Chief Executive Officer and five other current
or former executive officers of the Company (the "Named Executive Officers").
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
----------------------- ---------------------------
Restricted Securities
Stock Underlying All Other
Name and Principal Salary Bonus Awards Options Compensation
Position Year ($)(a) ($) ($)(b) (#)(c) ($)
------------------ ---- ------- ------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Edward D. Fox............. 1998 0(d) 0 1,012,500(e) 300,000 683,954(d)
President, Chief
Executive Officer 1997 74,000 0 0 0 0
and Chairman of the Board 1996 0 0 0 0 0
Stuart J.S. Gulland....... 1998 220,488 75,000 0 100,000 0
Senior Vice President and 1997 177,531 0 77,500(f) 60,000 0
Chief Financial Officer 1996 138,000 50,000 0 0 0
Steven M. Jaffe........... 1998 220,298 75,000 0 100,000 0
Senior Vice President, 1997 188,462 0 77,500(f) 87,500 0
General Counsel and 1996 171,657 0 0 0 0
Corporate Secretary
Mark D. Granados(g)....... 1998 251,919 0 0 100,000 0
Former Vice President,
Director of 1997 0 0 0 0 0
Acquisitions 1996 0 0 0 0 0
William P. Hewitt......... 1998 172,305 0 100,000(h) 100,000 0
Senior Vice President, 1997 0 0 0 0 0
Leasing 1996 0 0 0 0 0
Fred W. Bruning........... 1998 178,888 100,000 0 0 236,000(i)
Former Senior Vice
President and 1997 311,904 76,501 77,500(f)(j) 100,000 0
Chief Investment Officer 1996 339,700 108,900 0 0 0
</TABLE>
- --------
(a) Includes accrued vacation paid out.
(b) Represents restricted stock granted under the Restated Plan. All the
restricted stock vests in equal one-third amounts over a three year period
except for Mr. Fox's restricted shares which vest over a one year period.
The value of the restricted stock is calculated by multiplying the closing
market price of the Company's Common Stock on the date of the grant by the
number of shares awarded.
(c) Represents options to purchase Common Stock granted under the Restated
Plan. The 1997 options vest over a three-year period, are also tied to
stock price performance, and have exercise prices ranging from $15.00 to
$15.50. The 1998 options vest over a three year period and have exercise
prices ranging from $15.00 to $16.85. See "--Aggregated Option Exercises
and Fiscal Year-End Option Value Table."
(d) In lieu of cash compensation, Mr. Fox elected to receive his compensation
in 1998 in the form of restricted stock. The value of the restricted stock
is calculated by multiplying the closing market price of the Company's
Common Stock on the date of the grant by the number of shares awarded.
(e) Represents the value of 60,000 shares of restricted stock granted under
the Restated Plan on March 30, 1998. As of December 31, 1998, none of the
shares of restricted stock had vested.
(f) Represents the value of 5,000 shares of restricted stock granted under the
Restated Plan on February 27, 1997. As of December 31, 1998, 1,667 of such
shares had vested.
21
<PAGE>
(g) Effective April 1, 1999, Mr. Granados resigned from his position with the
Company. Mr. Granados has been retained as a consultant by the Company.
(h) Represents the value of 6,154 shares of restricted stock granted under the
Restated Plan on April 27, 1998. As of December 31, 1998, none of the
shares had vested.
(i) Represents amounts paid or to be paid to Mr. Bruning subsequent to his
resignation from the Company on May 20, 1998 for consulting services.
(j) 3,333 of such shares were canceled upon Mr. Bruning's resignation from the
Company on May 20, 1998.
22
<PAGE>
Option Grants
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------
Potential
Realizable Value
at Assumed Annual
Rates of Stock Alternative
Price to and
Percent of Appreciation for Grant Date
Number of Total Option Term Value
Securities Options/SARs Exercise ----------------- -----------
underlying Granted to of Base Grant Date
option/SARs Employees in Price Expiration Present
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($) Value ($)
---- ----------- ------------ -------- ---------- ------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Edward D. Fox........... 300,000 32.15% 16.875 3/27/08 923,708 4,469,348 (1,387,500)
President, Chief
Executive
Officer and Chairman of
the
Board
Stuart J.S. Gulland..... 100,000 10.72% 15.00 8/20/08 495,403 1,677,283 (275,000)
Senior Vice President
and Chief Financial
Officer
Steven M. Jaffe......... 100,000 10.72% 15.00 8/20/08 495,403 1,677,283 (275,000)
Senior Vice President,
General Counsel and
Corporate Secretary
Mark D. Granados(a)..... 100,000 10.72% 15.00 8/20/08 495,403 1,677,283 (275,000)
Vice President,
Director of
Acquisitions
William P. Hewitt....... 100,000 10.72% 15.00 8/20/08 495,403 1,677,283 (275,000)
Senior Vice President,
Leasing
Fred W. Bruning(b)...... 0 0 -- -- -- -- --
Former Senior Vice
President and Chief
Investment Officer
</TABLE>
- --------
(a) Effective April 1, 1999, Mr. Granados resigned from his position with the
Company. Mr. Granados has been retained as a consultant by the Company.
(b) Effective May 20, 1998, Mr. Bruning resigned from his positions with the
Company.
23
<PAGE>
Aggregated Option Exercises and Fiscal Year-End Option Value Table
The following table provides information related to the exercise of stock
options during the year ended December 31, 1998 by each of the Named Executive
Officers and the 1998 fiscal year-end value of unexercised options.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at FY-End Options at FY-End
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable (#) Unexercisable ($)
---- --------------- ------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Edward D. Fox........... 0 0 0/300,000 $ 0/$ 0
Stuart J.S. Gulland..... 0 0 61,875/180,625 $12,891/$4,297
Steven M. Jaffe......... 0 0 8,646/180,784 $ 1,047/$ 80
Mark D. Granados(a)..... 0 0 0/100,000 $ 0/$ 0
William P. Hewitt....... 0 0 0/100,000 $ 0/$ 0
Fred W. Bruning(b)...... 0 0 68,750/113,750 $ 8,594/$8,594
</TABLE>
- --------
(a) Effective April 1, 1999, Mr. Granados resigned from his position with the
Company. Mr. Granados has been retained as a consultant by the Company.
(b) Effective May 20, 1998, Mr. Bruning resigned from his positions with the
Company.
Employment and Change-in-Control Agreements
On November 24, 1997, Alexander Haagen, Sr., Alexander Haagen III, and
Charlotte Haagen resigned from their positions with the Company, and the
Company entered into a Separation Agreement and Release (the "Separation
Agreement") with Alexander Haagen, Sr., Alexander Haagen III, Charlotte
Haagen, and certain related persons (together, the "Haagen Family"). Pursuant
to the Separation Agreement, the Company agreed to pay to the Haagen Family
approximately $2.7 million in cash, to accelerate vesting of all granted stock
options and restricted stock awards, to grant and vest all previously
committed restricted stock awards, and to purchase from the Haagen Family or
cause to be purchased on May 25, 1999, substantially all of the Common Stock
and OP Units owned by the Haagen Family at market price, but no lower than
$17.00 per share. In addition, for certain defined periods the Company agreed
to continue to provide the Haagen Family certain medical benefits and
administration assistance. Further, pursuant to the Separation Agreement,
Alexander Haagen, Sr., as Chairman Emeritus and Alexander Haagen III, as Vice
Chairman Emeritus, are each entitled to receive one-half of the compensation
payable to the Independent Directors.
On November 24, 1997, Edward D. Fox was appointed as interim President and
Chief Executive Officer. On March 11, 1998, Mr. Fox accepted the position on a
permanent basis and entered into an employment agreement with the Company
providing for his employment as President and Chief Executive Officer until
March 2001. During the term of such contract, compensation will be paid to Mr.
Fox at the annual rate of $375,000 or should the Board of Directors increase
such salary, at the then present salary. Mr. Fox's employment contract also
provides for a bonus of $282,000 if he is employed by the Company on December
31, 1998 and an additional $93,000 if he is employed by the Company on March
9, 1999. Bonuses in future years are to be as determined by the Board of
Directors. On March 30, 1998, the Company granted Mr. Fox 60,000 shares of
restricted stock and options to purchase 300,000 shares of Common Stock at an
exercise price of $16.875 per share subject to vesting requirements under the
Restated Plan. Mr. Fox elected to receive his 1998 compensation in the form of
restricted stock. Pursuant to such election, he was granted 45,034 shares of
restricted stock in 1998.
Effective May 20, 1998, Fred W. Bruning resigned from his positions with the
Company, and the Company has entered into a Separation Agreement and Release
(the "Bruning Separation Agreement") with Mr. Bruning. Pursuant to the Bruning
Separation Agreement, the Company agreed (i) to pay to Mr. Bruning
approximately $236,000 over a nine month period during which Mr. Bruning has
agreed to provide the Company with
24
<PAGE>
consulting services, (ii) to accelerate vesting of granted stock options that
would have vested within three months of Mr. Bruning's resignation, (iii) to
extend the expiration of vested options from 90 days following termination to
one year, and (iv) to forbear on collecting amounts owed the Company under a
loan agreement, secured by his ownership interests in the Company, with
Mr. Bruning for a maximum of six months after it becomes due and payable
pursuant to its terms. In addition, the Company agreed to continue to provide
Mr. Bruning certain medical benefits for one year following his termination.
Effective April 1, 1999, Mark Granados resigned from his position as Vice
President, Director of Acquisitions. Prior to his resignation, Mr. Granados
had entered into an employment agreement providing for his employment until
December 31, 2000. The employment agreement provided for an annual salary of
$250,000, bonuses as determined by the Board and options to purchase 100,000
shares of Common Stock subject to certain vesting requirements. Upon his
resignation on April 1, 1999, the Company entered into a consulting agreement
with Mr. Granados providing for his services as a consultant to the Company
until January 6, 2001.
The Company has entered into an employment agreement with William P. Hewitt,
dated as of April 27, 1998, providing for his employment as Senior Vice
President, Leasing until April 27, 2001. During the term of such contract,
compensation will be paid to Mr. Hewitt at the annual rate of $250,000 or
should the Board of Directors increase such salary, at the then present
salary. Mr. Hewitt's employment contract also provides for bonuses as
determined by the Board of Directors. Pursuant to Mr. Hewitt's employment
agreement, the Company granted Mr. Hewitt 6,154 shares of restricted stock and
options to purchase 100,000 shares of Common Stock subject to vesting
requirements under the Restated Plan.
The Company has entered into an employment agreement with Stuart J.S.
Gulland, dated as of March 1, 1998, providing for his employment as Senior
Vice President and Chief Financial Officer until September 30, 1999. During
the term of such contract, compensation will be paid to Mr. Gulland at the
annual rate of $230,000 or should the Board of Directors increase such salary,
at the then present salary. Mr. Gulland's employment contract also provides
for bonuses as determined by the Board of Directors. Pursuant to Mr. Gulland's
employment agreement, the Company granted Mr. Gulland options to purchase
100,000 shares of Common Stock subject to vesting requirements under the
Restated Plan.
The Company has entered into an employment agreement with Steven M. Jaffe,
dated as of March 1, 1998, providing for his employment as Senior Vice
President, General Counsel and Corporate Secretary until September 30, 1999.
During the term of such contract, compensation will be paid to Mr. Jaffe at
the annual rate of $220,000 or should the Board of Directors increase such
salary, at the then present salary. Mr. Jaffe's employment contract also
provides for bonuses as determined by the Board of Directors. Pursuant to Mr.
Jaffe's employment agreement, the Company granted Mr. Jaffe options to
purchase 100,000 shares of Common Stock subject to vesting requirements under
the Restated Plan.
The Bylaws of the Company provide for indemnification of the officers,
directors, employees and agents of the Company pursuant to the Maryland
General Corporation Law. The Maryland General Corporation Law permits the
indemnification of any officer, director, employee or agent of the Company
against expenses and liabilities in any action arising out of such person's
activities on behalf of the Company, if such person acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests
of the Company or in a manner he had no reasonable cause to believe was
unlawful.
25
<PAGE>
Stock Performance Graph
The graph below compares cumulative total return of the Company, the S&P 500
Index and the SNL Retail REIT Index(*) from December 17, 1993 to December 31,
1998. The comparison assumes $100 was invested on December 17, 1993 in the
Company's Common Stock and each of the foregoing indices and assumes
reinvestment of dividends before consideration of income taxes.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
12/17/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CenterTrust............. 100.00 97.88 84.99 114.01 147.40 114.69
S&P 500 Total Return.... 100.00 101.42 139.54 171.44 228.65 293.99
SNL Retail REITs........ 100.00 105.08 111.63 150.13 175.79 165.54
</TABLE>
- --------
* The SNL Retail REIT Index is a peer group index comprised of the following
companies: Acadia Realty Trust, Aegis Realty, Inc., Agree Realty
Corporation, Atlantic Realty Trust, Bradley Real Estate, Inc., Burnham
Pacific Properties, Inc., CBL & Associates Properties, Inc., CenterTrust
Retail Properties, Inc., CV REIT, Inc., Equity One, Inc., Federal Realty
Investment Trust, First Washington Realty Trust, Inc., Glimcher Realty
Trust, IRT Property Company, Kimco Realty Corporation, Konover Property
Trust, Inc., Kranzco Realty Trust, Malan Realty Investors, Inc., Mid-
Atlantic Realty Trust, New Plan Excel Realty Trust, Pan Pacific Retail
Properties, Inc., Philips International Realty Corporation, Price
Enterprises, Inc., Ramco-Gershenson Properties Trust, Regency Realty
Corporation, Saul Centers, Inc., United Investors Realty Trust, Urstadt
Biddle Properties, Inc., USP Real Estate Investment Trust, Weingarten
Realty Investors, Western Investment Real Estate Trust, and Westfield
America, Inc. The graph presented here was prepared by SNL Securities L.C.
("SNL"). SNL has informed the Company that the graph was prepared from
sources believed by SNL to be reliable, but SNL (i) does not warrant in any
way the information supplied; (ii) disclaims any liability resulting in any
way from said information; and (iii) reserves all copyright rights in the
graph.
26
<PAGE>
Compensation Committee Interlocks and Insider Participation
Messrs. Heineman (Chairman), Andrews, Riedman and Barnum currently serve on
the Compensation Committee. None of the Compensation Committee members is or
has been an officer or employee of the Company and each is an Independent
Director. For a description of the background of each of these individuals,
see "Election of Directors." For a discussion of interrelationships involving
members of the Compensation Committee or other directors of the Company, see
"Certain Relationships and Related Transactions."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The information set forth below shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or
under the Securities Exchange Act of 1934, as amended, except to the extent
the Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
The members of the Compensation Committee believe the success of a company
on a long term basis is attributable in large part to the talent and
dedication of its personnel and, in particular, to the management and
leadership efforts of its executive officers. Accordingly, the Company, under
the guidance of the Compensation Committee, is committed to develop and
maintain compensation policies, plans and programs which seek to enhance cash
flows, and consequently real property and stockholder values, by aligning the
financial interests of the Company's senior management with those of its
stockholders.
In furtherance of these goals, the Company relies, to a large degree, on
annual and longer term incentive compensation (that is, specifically cash
bonuses, restricted stock grants and stock option grants) to attract and
retain corporate officers and other key associates of outstanding ability, and
to motivate such persons to perform to their fullest potential. Both of these
forms of incentive compensation are variable and designed to effectuate a pay-
for-performance philosophy which considers management's ability to
consistently improve the Company's "funds from operations" (a widely-accepted
measure of performance for real estate investment trusts) to be of paramount
importance. Other performance criteria which effect incentive awards include
the demonstrated ability to strengthen the Company's capital structure, the
measure of improved total return to stockholders and individual
performance/contributions to corporate goals and objectives.
From time to time the Compensation Committee may retain compensation and
other management consultants to assist with, among other things, structuring
the Company's various compensation programs and determining appropriate levels
of salary, bonus and other awards payable to the Company's officers and key
personnel, as well as to guide the Company in the development of near term
individual performance objectives necessary to achieve long-term
profitability. In 1998 the Company retained a compensation consultant to
assess the competitiveness of the Company's compensation and benefits program
and to review enhancing the program and maintaining its competitiveness
through incentive-based compensation strategies.
The compensation consultant's report, which reviewed industry background and
appropriate comparatives, provided recommendations regarding both compensation
structure in general and specific compensation for various positions. Based on
this report, the Compensation Committee concluded that the total compensation
for its senior management should be consistent with a subset of the REIT
industry that reflects similar business characteristics as the Company.
Further, in an effort to align employee and owner interests in the Company,
the Compensation Committee decided to maintain its previously adopted
philosophy that executive compensation should be focused toward incentives,
which will take the form of largely stock-based incentives with respect to
employees at the officer level and largely cash-based incentives below the
officer level. The Committee also reaffirmed its philosophy that the
compensation policy and the structure of compensation should be closely
monitored to assure that the Company's compensation program remains
competitive and consistent with the industry.
27
<PAGE>
Edward D. Fox, President and Chief Executive Officer and the Company entered
into an employment agreement for three years with the Company in 1998. During
the term of his employment he is to receive a base salary of $375,000 per year
or should the Board increase such salary, then at the then present salary. The
Company also awarded him a bonus of $282,000 as of December 31, 1998. Mr. Fox
also received 60,000 shares of restricted stock and options to purchase
300,000 shares of Common Stock at an exercise price of $16.875 per share
subject to vesting requirements under the Restated Plan. Mr. Fox then elected
to receive his 1998 compensation in the form of restricted stock at $12.75 per
share and received 45,034 shares of restricted stock. The Compensation
Committee recognizes Mr. Fox's contributions to the Company since he became
the President and Chief Executive Officer on a full time basis. The Board and
the Compensation Committee feel Mr. Fox's compensation is commensurate with
the compensation of chief executive officers with similar business experience
of competitive real estate trusts, and have deemed Mr. Fox's salary, stock
option awards and restricted stock awards and total compensation appropriate
in light of Mr. Fox's substantial contribution to the Company's growth in
1998.
During 1993, the Code was amended to include a provision which denies a
deduction to any publicly held corporation for compensation paid to any
"covered employee" (which are defined as the chief executive officer and the
Company's other four most highly compensated officers, as of the end of a
taxable year) to the extent that the compensation exceeds $1 million in any
taxable year of the corporation beginning after 1993. Compensation which is
payable pursuant to written binding agreements entered into before February
18, 1993 and compensation which constitutes "performance based compensation"
is excludable in applying the $1 million limit. Generally, it is the Company's
policy to qualify compensation (other than restricted stock) paid to its top
executives for deductibility under Section 162(m) in order to maximize the
Company's income tax deductions. Based upon the Internal Revenue Service's
regulations and the compensation paid to the Company's "covered employees" for
the 1998 taxable year, all compensation payable by the Company in 1998 to such
covered employees should be deductible by the Company.
Warner Heineman (Chairman)
Date: April 29, 1999 R. Bruce Andrews
Fred L. Riedman
Robert T. Barnum
28
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 1997, the Company extended a loan of $3,138,586 to Fred W.
Bruning. Interest on the loan is at a rate of 7.45%. The loan was secured by
all of Mr. Bruning's actual and beneficial ownership interest in the Company.
The loan was scheduled to mature in December 2004, but became due in full six
months following the termination of Mr. Bruning's employment with the Company.
As a part of the Severance Agreement between the Company and Mr. Bruning (the
"Bruning Severance Agreement"), the Company has agreed to forbear on
collecting the loan for a maximum additional six months provided that Mr.
Bruning complies with the Bruning Severance Agreement.
During 1998, the Company sold its Sears Hollywood facility, a single tenant
facility for proceeds of $5.4 million which resulted in a net gain of $1.1
million. In addition, the Company purchased the Manhattan Beach, California
building in which its corporate headquarters are located for $3.2 million.
Both of the above transactions were with affiliates of Alexander Haagen, Sr.,
the Company's former chairman, and were negotiated at arms-length.
In connection with the Separation Agreement, as described in "Employment and
Change-in-Control Agreements" above, the Company purchased from the Haagen
Family, on May 25, 1999, an aggregate of 3,656,818 shares of common stock and
Operating Partnership Units (the "Shares") at a previously agreed upon price
per share of $17. A portion of the Shares represented options to purchase
Common Stock held by the Haagen Family. The total purchase price of the Shares
was $58.8 million. Included in the Shares repurchased were 590,034 shares of
Common Stock as of December 31, 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
persons who beneficially own more than 10% of a registered class of the
Company's equity securities to file reports with the Securities and Exchange
Commission and the Company disclosing their initial beneficial ownership of
the Company's equity securities and changes in such ownership.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company by the directors, executive officers and
greater than 10% beneficial owners, all Section 16(a) filing requirements were
satisfied during the fiscal year ended December 31, 1998, except that the
following reports were filed late: (1) one Form 5 with respect to two Section
16(b) exempt transactions in 1998 for each of Messrs. Heineman, Gulland and
Jaffe; (2) one Form 5 with respect to four Section 16(b) exempt transactions
in 1998 for Mr. Fox; (3) two Forms 4 with respect to two Section 16(b) exempt
transactions in 1998 for each of Messrs. Andrews and Riedman; (4) two Forms 4
with respect to three transactions in 1998, two of which were Section 16(b)
exempt transactions, for Mr. Stokx; (5) three Forms 4 with respect to three
transactions in 1998, two which were Section 16(b) exempt transactions, for
Mr. Barnum; (6) one Form 4 with respect to three transactions in 1998 for Mr.
Granados; (7) one Form 3 with respect to their appointments as officers in
1998 for each of Messrs. Granados, Hewitt and Paggi; and (8) one Form 3 with
respect to his appointment as an officer in 1997 for Mr. Stokx. In addition,
Mr. Bruning inadvertently failed to file one Form 4 with respect to one
transaction in 1998.
29
<PAGE>
INDEPENDENT AUDITORS
Deloitte & Touche LLP audited the Company's financial statements for the
fiscal year ended December 31, 1998, and has been the Company's independent
auditors since June 1992. The Board of Directors has selected Deloitte &
Touche LLP to serve as independent auditors for the Company for the fiscal
year ending December 31, 1999. A representative of Deloitte & Touche LLP is
expected to be present at the Annual Meeting and will be given the opportunity
to make a statement if he desires to do so, and it is expected that such
representative will be available to respond to appropriate questions from the
stockholders at the Annual Meeting.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
FOR 2000 ANNUAL MEETING
Any stockholder intending to submit to the Company a proposal for inclusion
in the Company's proxy materials relating to the 2000 Annual Meeting must
submit such proposal so that it is received by the Company no later than
February 14, 2000.
OTHER MATTERS
The Company is not aware of any matters that may be presented for action by
the stockholders at the Annual Meeting other than those set forth above. If
any other matter shall properly come before the Annual Meeting, the persons
named in the accompanying form of proxy intend to vote thereon in accordance
with their best judgment.
The Company's Annual Report to Stockholders, including the Company's audited
financial statements for the year ended December 31, 1998, is being mailed
herewith to all stockholders of record. THE COMPANY WILL PROVIDE FREE OF
CHARGE TO ANY STOCKHOLDER A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1998 FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IF THE STOCKHOLDER SUBMITS A WRITTEN REQUEST TO THE SECRETARY OF
THE COMPANY, AT 3500 SEPULVEDA BOULEVARD, MANHATTAN BEACH, CALIFORNIA 90266.
STOCKHOLDERS ARE URGED TO IMMEDIATELY MARK, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED, TO WHICH NO POSTAGE NEED BE AFFIXED
IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
STEVEN M. JAFFE
Corporate Secretary
June 14, 1999
Manhattan Beach, California
30
<PAGE>
SEVENTH AMENDMENT TO THE AMENDED AND RESTATED 1993 STOCK OPTION AND
INCENTIVE PLAN FOR OFFICERS, DIRECTORS AND
KEY EMPLOYEES OF CENTERTRUST RETAIL PROPERTIES, INC.
AND CT OPERATING PARTNERSHIP, L.P.
CenterTrust Retail Properties, Inc., a Maryland corporation (f.k.a.
Alexander Haagen Properties, Inc.), CT Operating Partnership, L.P., a
California limited partnership (f.k.a. Alexander Haagen Properties Operating
Partnership, L.P.), and Haagen Property Management, Inc., a California
corporation, adopted The 1993 Stock Option and Incentive Plan for Officers,
Directors and Key Employees of CenterTrust Retail Properties, Inc.,
CT Operating Partnership, L.P. and Haagen Property Management, Inc., effective
December 10, 1993, for the benefit of their eligible employees and directors.
Such plan was amended on August 14, 1995 and was amended and restated on
February 28, 1996 (such amended and restated plan is hereinafter referred to
as the "Plan"). An amendment to the Plan was authorized by a resolution of the
Board of Directors of the Company on November 19, 1996 (such amendment to the
Plan is hereinafter referred to as the "First Amendment"). A second amendment
was authorized by a resolution of the Board of Directors of the Company on
February 27, 1997 (such amendment to the Plan is hereinafter referred to as
the "Second Amendment"). A third amendment to the Plan was authorized by a
resolution of the Compensation Committee of the Board of Directors of the
Company on May 30, 1997 (such amendment to the Plan is hereinafter referred to
as the "Third Amendment"). A fourth amendment to the Plan was authorized by a
resolution of the Compensation Committee of the Board of Directors of the
Company on July 8, 1997 (such amendment to the Plan is hereinafter referred to
as the "Fourth Amendment"). A fifth Amendment to the Plan was authorized by a
resolution of the Compensation Committee of the Board of Directors of the
Company on April 30, 1998 (such amendment to the Plan is hereinafter referred
to as the "Fifth Amendment"). A sixth amendment to Plan was authorized by a
resolution of the Compensation Committee of the Board of Directors of the
Company on February 9, 1999 (such Amendment to the Plan is hereinafter
referred to as the "Sixth Amendment").
The Plan consists of three plans: (i) one for the benefit of the key
employees of CenterTrust Retail Properties, Inc. and the Company Subsidiaries
(as defined in the Plan), (ii) one for the benefit of the Independent
Directors (as defined in the Plan) and (iii) one for the benefit of key
employees of CT Operating Partnership, L.P. and the Operating Partnership
Subsidiaries (as defined in the Plan), Haagen Property Management, Inc. and
the HPMI Subsidiaries (as defined in the Plan) and the directors of Haagen
Property Management, Inc.
As allowed by Section 9.2 of the Plan, this amendment to the Plan (the
"Seventh Amendment") was authorized by a resolution of the Compensation
Committee of the Board of Directors of the Company subject to and effective
upon stockholder approval. This Seventh Amendment, together with the Plan, the
First Amendment, the Second Amendment, the Third Amendment, the Fourth
Amendment, the Fifth Amendment and the Sixth Amendment, constitutes the entire
Plan as amended to date.
1. Section 1.9 of the Plan is hereby amended and restated in its entirety as
follows:
"Company" shall mean Center Trust, Inc., a Maryland corporation (f.k.a.
CenterTrust Retail Properties, Inc., f.k.a. Alexander Haagen Properties,
Inc.); provided, however, if, prior to June 30, 1999, the Company's
stockholders fail to approve an amendment to the Company's Articles of
Amendment and Restatement changing the name of the Company to "Center
Trust, Inc.", then "Company" shall mean CenterTrust Retail Properties, Inc.
2. Section 1.31 of the Plan is hereby amended and restated in its entirety
as follows:
"Plan" shall mean The Amended and Restated 1993 Stock Option and
Incentive Plan for Officers, Directors and Key Employees of Center Trust,
Inc. and CT Operating Partnership, L.P.; provided, however, if, prior to
June 30, 1999, the Company's stockholders fail to approve an amendment to
the Company's Articles of Amendment and Restatement changing the name of
the Company to "Center Trust, Inc.", then "Plan" shall mean The Amended and
Restated 1993 Stock Option and Incentive Plan for Officers, Directors and
Key Employees of CenterTrust Retail Properties, Inc. and CT Operating
Partnership, L.P.
A-1
<PAGE>
3. Section 2.1(a) of the Plan is hereby amended and restated in its entirety
as follows:
(a) The shares of stock subject to Options or Restricted Stock Awards
shall be Common Stock, initially shares of the Company's common stock, par
value $.01 per share, as presently constituted, and the aggregate number of
such shares which may be issued upon exercise of such Options or upon any
such awards under the Plan shall not exceed 2,750,000 (which amount
includes (i) the original 850,000 shares authorized to be issued upon
exercise of such Options or upon any such awards under the Plan, (ii) an
additional 500,000 shares authorized to be issued upon exercise of such
Options or upon any such awards under the Plan by a resolution of the
Committee on February 27, 1997, (iii) an additional 650,000 shares
authorized to be issued upon exercise of such Options on upon any such
awards under the Plan by a resolution of the Committee on May 30, 1997, and
(iv) an additional 750,000 shares authorized to be issued upon exercise of
such Options or upon any such awards under the Plan by a resolution of the
Committee on April 29, 1999). The shares of Common Stock issuable upon
exercise or grant of an Option, or as Restricted Stock, shall be previously
authorized but unissued shares.
4. Section 9.4 of the Plan is hereby amended by adding the following after
the last sentence in Section 9.4:
With respect to Incentive Stock Options granted after the date of the
adoption of the Seventh Amendment, the Plan, as amended by the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment,
the Fifth Amendment and the Sixth Amendment, shall constitute a new plan
for purposes of Section 422 of the Code. In the event the Seventh Amendment
is not approved by the Company's stockholders, Incentive Stock Options
granted after the date of the Board's adoption of the Seventh Amendment
shall be governed by the provisions of the Plan as it existed immediately
prior to the adoption of the Seventh Amendment.
Executed at Manhattan Beach, California, this 29th day of April, 1999.
/s/ Edward D. Fox
By __________________________________
President
/s/ Steven M. Jaffe
By __________________________________
Corporate Secretary
A-2
<PAGE>
CENTERTRUST RETAIL PROPERTIES, INC.
Annual Meeting of Stockholders--July 14, 1999
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
O The undersigned stockholder of CENTERTRUST RETAIL PROPERTIES, INC.
X does hereby nominate, constitute and appoint Steven M. Jaffe and
Y Joseph F. Paggi, Jr., the true and lawful proxies, agents and attorneys
of the undersigned, with full power of substitution, to vote for the
undersigned all of the common stock of said corporation standing
in the name of the undersigned on its books at the close of business
on April 15, 1999 at the Annual Meeting of Stockholders to be held
at The Marriott Hotel, Terrace Ballroom A, 1400 Parkview Avenue,
Manhattan Beach, California, on July 14, 1999 at 1:00 p.m. or at any
adjournment or postponement thereof, with all of the powers which would be
possessed by the undersigned if personally present as follows on the
reverse side.
- ------------ ------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------ ------------
<PAGE>
[X] Please mark votes as in this example.
IF NO CONTRARY INSTRUCTION IS INDICATED, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF MANAGEMENT'S TWO NOMINEES AS DIRECTORS.
<TABLE>
<S> <C>
1. Election of Directors: 4. Amendment of the Company's Amended and Restated 1993
Nominees: Stuart J.S. Gulland and Christine Garvey. Stock Option and Incentive Plan, as amended, to (a)
FOR WITHHELD increase the maximum number of shares which may be
[ ] [ ] subject to options granted under the Plan by 750,000
shares, (b) provide for the continued granting of
[ ] _______________________________ incentive stock options under the Plan and (c) reflect
For all nominees except as noted above the change of the Company's name to "Center Trust, Inc."
subject to stockholder approval of such name change.
FOR AGAINST ABSTAIN
2. Amendment of the Articles of Amendment and [ ] [ ] [ ]
Restatement of the Company to change the name
of the Company to "Center Trust, Inc." 5. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
FOR AGAINST ABSTAIN meeting.
[ ] [ ] [ ]
Mark here for address change
3. Amendment of the Articles of Amendment and and note below [ ]
Restatement of the Company to state that
nothing within the Articles shall preclude The undersigned hereby acknowledges receipt of the Notice
the settlement of transactions entered into of Annual Meeting of Stockholders dated June 14, 1999 and
through the facilities of the New York Stock the Proxy Statement furnished therewith.
Exchange.
FOR AGAINST ABSTAIN NOTE: Please sign name exactly as your name (or names)
[ ] [ ] [ ] appear on the stock certificate. When signing as attorney,
executor, administrator, trustee or guardian please give
full title. If more than one trustee, all should sign. All
joint owners must sign.
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES Signature:________________________Date:_________________
NO POSTAGE IF MAILED IN THE UNITED STATES. Signature:________________________Date:_________________
</TABLE>
