<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
-------- --------
Commission File Number: 1-12588
---------------------
CENTER TRUST, INC.
(Exact name of registrant as specified in charter)
Maryland 95-4444963
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
3500 Sepulveda Boulevard, Manhattan Beach, California 90266
(Address of principal executive offices) (Zip Code)
(310) 546-4520
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
<S> <C>
COMMON STOCK, PAR VALUE $.01 PER SHARE NEW YORK STOCK EXCHANGE
7 1/2% CONVERTIBLE SUBORDINATED NEW YORK STOCK EXCHANGE
DEBENTURES DUE 2001, SERIES A
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
NONE REGISTERED
(Title of Class)
---------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for at least the past 90 days. YES [X] NO [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K: [_]
The aggregate market value of the voting stock held by non-affliates of the
Registrant was approximately $73,443,000 (computed on the basis of $6.688 per
share), which was the last sale price on the New York Stock Exchange on March
17, 2000.
As of March 17, 2000, 26,647,968 shares of Common Stock, Par Value $.01 Per
Share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
================================================================================
<PAGE>
The following items are amended:
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors
The names of the persons serving as directors of the Company are listed
below, together with their ages and other biographical information.
<TABLE>
<CAPTION>
Name Age Present Position With The Company Term Expires
- ---- --- ---------------------------------- ------------
<S> <C> <C> <C>
R. Bruce Andrews 58 Director 2001
Robert T. Barnum 54 Director 2000
Edward D. Fox 52 Chairman of the Board, Chief 2001
Executive Officer and President
Christine Garvey 54 Director 2002
Stuart J.S. Gulland 38 Director, Senior Vice President and 2002
Chief Financial Officer
Anthony E. Meyer 38 Director 2000
Fred L. Riedman 69 Director 2000
Mark S. Ticotin 51 Director 2000
</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.
2
<PAGE>
Edward D. Fox has served as a Director of the Company since August, 1997
and in November, 1997 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. Mr. Fox has entered into an employment
agreement with the Company providing for his employment until December 31, 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.
Christine Garvey has served as a Director of the Company since June, 1999.
Ms. Garvey currently serves as Vice President, Worldwide Real Estate and
Workplace Resources for Cisco Systems, Inc. Prior to joining Cisco Systems, Ms.
Garvey served as President of Cadspec, a software firm, from December, 1998 to
January, 1999. From April, 1997 to October, 1998, she 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. Ms. Garvey 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.
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 and has entered into an employment agreement with the Company
providing for his employment until December 31, 2000. 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.
Anthony E. Meyer has served as a Director of the Company since August,
1997. He is currently a private investor with Meyer Ventures L.L.C. Through
1999, Mr. Meyer was 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. Mr. Riedman has been a private investor since he retired from his
position as a partner with the law firm of Riedman, Dalessi & Dybens in 1998,
where he was a partner since 1965. Mr. Riedman is a trustee of the California
Museum Foundation. Mr. Riedman has also served on the board of directors of the
Aquarium of the Pacific at Long Beach, California since 1995.
Mark S. Ticotin has served as a Director of the Company since October,
1999. Mr. Ticotin currently serves as Chief Operating Officer of Lazard Freres
Real Estate Investors, LLC. Before joining Lazard, he was Senior Executive Vice
President of Simon Property Group after Simon Property Group merged with
Corporate Property Investors in September, 1998. Mr. Ticotin had been President
and Chief Operating Officer of Corporate Property Investors prior to the merger.
From 1988 to 1997, he was Senior Vice President of Corporate Property Investors
and responsible for the leasing, legal and marketing departments. Mr. Ticotin
is a director of Konover Property Trust, InTown Suites and Atria Senior
Quarters.
Messrs. Barnum, Fox, Meyer and Ticotin were each originally designated for
nomination to the Board by Prometheus Western Retail, LLC ("Prometheus")
pursuant to a stockholders agreement between Prometheus,
3
<PAGE>
certain of its affiliates and the Company whereby the Company agreed to support
the nomination and election of such nominees. The nominees for election as
Directors at the Company's 2000 Annual Meeting of Stockholders have yet to be
determined.
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 52 President, Chief Executive Officer and Chairman
of the Board
Stuart J.S. Gulland 38 Senior Vice President, Chief Financial Officer
and Director
Steven M. Jaffe 38 Senior Vice President, General Counsel and
Secretary
Joseph F. Paggi, Jr. 62 Senior Vice President, Assets
Edward A. Stokx 34 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:
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 December, 2000. 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 December 31, 2001. 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 December, 2000. 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.
4
<PAGE>
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, 1999.
5
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain compensation information for the
fiscal years ended December 31, 1997, 1998 and 1999 with respect to the
Company's Chief Executive Officer and five other executive officers of the
Company (the "Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------- --------------------------------
Securities All Other
Name and Salary Restricted Stock Underlying Compensation
Principal Position Year ($)(a) Bonus($) Awards ($)(b) Options (#)(c) ($)
- ------------------------------------------------------------------------------ ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward D. Fox 1999 421,088 (d) 357,955 (d) 3,267,975 (e) 0 0
President, Chief Executive Officer and 1998 391,906 (d) 292,048 (d) 1,012,500 (f) 300,000(g) 0
Chairman of the Board 1997 74,000 0 0 0 0
Stuart J.S. Gulland 1999 265,114 124,255 1,093,600 (h) 0 0
Senior Vice President and 1998 220,488 112,500 0 100,000 (g) 0
Chief Financial Officer 1997 177,531 75,000 77,500 (i) 60,000 0
Steven M. Jaffe 1999 226,401 50,000 0 125,000 0
Senior Vice President, General Counsel and 1998 220,298 50,000 0 100,000 0
Corporate Secretary 1997 188,462 75,000 77,500 (i) 87,500 0
Mark D. Granados (j) 1999 70,439 0 0 0 248,778 (k)
Former Vice President, 1998 251,919 187,500 0 100,000 (l) 0
Director of Acquisitions 1997 0 0 0 0 0
William P. Hewitt (m) 1999 257,831 0 546,800 (n)(o) 0 0
Senior Vice President, Leasing 1998 172,305 0 100,000 (p) 100,000 (g) 0
1997 0 0 0 0 0
Joseph F. Paggi, Jr. 1999 211,894 73,032 546,800 (n) 100,000 (g) 0
Senior Vice President, Assets 1998 163,653 50,959 200,000 (q) 0 0
1997 0 0 0 0 0
</TABLE>
______________________________
(a) Includes accrued vacation paid out.
(b) Represents restricted stock granted under the Stock Option and Incentive
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 according to
the footnotes (e) and (f) below. 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 Stock Option
and Incentive 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. The 1999 options vest over a
three year period and have an exercise price of $10.00. See "--Aggregated
Option Exercises and Fiscal Year-End Option Value Table."
(d) In lieu of cash compensation, Mr. Fox received his salary and bonus in 1998
and 1999 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. As of
December 30, 1999, all of the restricted stock granted in 1998 had vested.
The restricted stock granted in 1999 vested on March 30, 2000.
(e) Represents the value of 225,000 shares of restricted stock granted effective
January 1,1999; 18,750 shares granted effective March 31, 1999; 18,750
shares granted effective June 30, 1999; 18,750 shares granted effective
September 31, 1999 and 18,750 shares granted effective December 31, 1999. A
maximum of 75,000 shares may vest each year subject to certain performance
requirements as set by the Board. Eligible shares not vested shall be
forfeited.
(f) Represents the value of 60,000 shares of restricted stock granted under the
Stock Option and Incentive Plan in connection with the commencement of
employment on March 30, 1998. The shares vested over a one year period and
thus, as of December 31, 1999, all of the shares had vested.
(g) Pursuant to employment agreements with the Company, the options were
cancelled as of January 1, 1999.
(h) Represents the value of 100,000 shares of restricted stock granted under the
Stock Option and Incentive Plan effective January 1, 1999. The vesting of
such shares is primarily based on the achievement of certain performance
requirements, as set by the Board. As of December 31, 1999, none of the
shares had vested.
(i) Represents the value of 5,000 shares of restricted stock granted under the
Stock Option and Incentive Plan on February 27, 1997. As of December 31,
1999, 3,333 of such shares had vested.
(j) Effective April 1, 1999, Mr. Granados resigned from his position with the
Company. Mr. Granados was retained as a consultant by the Company through
January 31, 2000.
(k) Represents amounts paid to Mr. Granados in connection with his resignation
and for services rendered as a consultant to the Company during 1999.
(l) The options were cancelled in connection with Mr. Granados' resignation on
April 1, 1999.
(m) Effective March 31, 2000, Mr. Hewitt resigned from his position with the
Company.
(n) Represents the value of 50,000 shares of restricted stock granted under the
Stock Option and Incentive Plan effective January 1, 1999. The vesting of
such shares is primarily based on the achievement of certain performance
requirements as set by the Board.
(o) Upon Mr. Hewitt's resignation effective March 31, 2000, 16,667 of the
shares had vested and 33,333 were cancelled.
(p) Represents the value of 6,154 shares of restricted stock granted under the
Stock Option and Incentive Plan granted in connection with the commencement
of employment on May 1, 1998. As of December 31, 1999, 2,051 of the shares
had vested.
(q) Represents the value of 12,452 shares of restricted stock granted under the
Stock Option and Incentive Plan granted in connection with the commencement
of employment on April 27, 1998. As of December 31, 1999, 4,151 of the
shares had vested.
6
<PAGE>
Option Grants
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
- -----------------------------------------------------------------------------------------------------------------------
Number of Percent of Total
Securities Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward D. Fox - - - - - -
President, Chief
Executive Officer and
Chairman of the Board...........
Stuart J.S. Gulland - - - - - -
Senior Vice President and
Chief Financial Officer.........
Steven M. Jaffe
Senior Vice President,
General Counsel and
Corporate Secretary............ 125,000 23.2% $10.00 11/18/09 $607,964 $1,708,439
Mark D. Granados (a) - - - - - -
Former Vice President,
Director of Acquisitions........
William P. Hewitt (b) - - - - - -
Senior Vice President,
Leasing.........................
Joseph F. Paggi, Jr. - - - - - -
Senior Vice President, Assets...
</TABLE>
________________
(a) Effective April 1, 1999, Mr. Granados resigned from his position with the
Company. Mr. Granados was retained as a consultant by the Company through
January 31, 2000.
(b) Effective March 31, 2000, Mr. Hewitt resigned from his position with the
Company.
7
<PAGE>
Aggregated Option Exercises and Fiscal Year-End Option Value Table
The following table provides information related to the 1999 fiscal year-
end value and number of unexercised options held by each of the Named Executive
Officers. During the fiscal year ended December 31, 1999, none of the Named
Executive Officers exercised any options to purchase shares of Common Stock of
the Company.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-Money
Options at FY-End Options at FY-End
Exercisable/ Exercisable/
Name Unexercisable(#) Unexercisable($)
- ------------------------ ---------------------- ----------------------------
<S> <C> <C>
Edward D. Fox 0/0 0/0
Stuart J.S. Gulland 122,496/20,004 0/0 (a)
Steven M. Jaffe 89,006/225,424 0/0 (a)
Mark D. Granados (b) 0/0 0/0
William P. Hewitt (c) 0/0 0/0
Joseph F. Paggi, Jr. 0/0 0/0
</TABLE>
________________
(a) On December 31, 1999, the closing market price of Common Stock on the New
York Stock Exchange was $9.6875. At that time, the exercise price for all
options held by Named Executive Officers was above $10.00.
(b) Effective April 1, 1999, Mr. Granados resigned from his position with the
Company. Mr. Granados was retained as a consultant by the Company through
January 31, 2000.
(c) Effective March 31, 2000, Mr. Hewitt resigned from his position with the
Company.
8
<PAGE>
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. On May 25,
1999, the Company purchased from the Haagen Family an aggegate of 3,656,818
shares of Common Stock and OP Units for $17 per share for a total purchase price
of $58.8 million. 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. and Alexander Haagen III are each entitled to receive one-
half of the compensation payable to the Independent Directors.
The Company has entered into an employment agreement with Edward D. Fox,
dated as of January 1, 1999, providing for his employment as President and Chief
Executive Officer until March 2001. The agreement provides for annual
compensation of $375,000; a discretionary bonus in an amount to be determined by
the Board based on the performance of Mr. Fox and the Company; and a grant of
225,000 shares of restricted stock, subject to both a time and performance based
vesting component, as long term incentive compensation. For the year ended
December 31, 1999, the annual compensation was paid in restricted stock of the
Company on a quarterly basis and based on a price calculated at 85% of the
average stock price for the prior calendar quarter. For the year ended December
31, 1999, Mr. Fox received his discretionary bonus in restricted stock of the
Company, a portion of which was paid pursuant to a prior employment agreement
and the remainder of which was based on a price calculated at 85% of the stock
price on the date of grant by the Board. The 225,000 shares of restricted stock
granted to Mr. Fox as long term incentive compensation are subject to both a
time and performance based vesting component. As the time component is
satisfied, the Company reloads Mr. Fox's unvested shares of restricted stock by
granting him an additional number of shares of restricted stock equal to the
number of shares that satisfied the time component. Thus, Mr. Fox's total number
of unvested shares is always equal to 225,000. Pursuant to this reload
procedure, Mr. Fox was granted 75,000 additional shares of restricted stock
during 1999 to replace shares that satisfied the time component. The employment
agreement also provided for the cancellation of 300,000 stock options issued to
Mr. Fox pursuant to his prior employment agreement.
9
<PAGE>
The Company has entered into an employment agreement with Stuart J.S.
Gulland, dated as of January 1, 1999, providing for his employment as Senior
Vice President and Chief Financial Officer until December 31,2000. During the
term of such contract, compensation will be paid to Mr. Gulland at the annual
rate of $230,000. 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 100,000 shares of restricted stock of
the Company, subject primarily to the achievement of certain performance
criteria as set by the Board. The employment agreement also provided for the
cancellation of 100,000 stock options issued to Mr. Gulland pursuant to his
prior employment agreement.
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 December, 2000.
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 Company has entered into an employment agreement with Joseph F. Paggi,
Jr., dated as of January 1, 1999, providing for his employment as Senior Vice
President of Assets until December 31, 2000. During the term of such contract,
compensation will be paid to Mr. Paggi at the annual rate of $200,000. Mr.
Paggi's employment contract also provides for bonuses as determined by the Board
of Directors. Pursuant to Mr. Paggi's employment agreement, the Company granted
Mr. Paggi 50,000 shares of restricted stock of the Company, subject primarily to
the achievement of certain performance criteria as set by the Board. The
employment agreement also provided for the cancellation of 100,000 stock options
issued to Mr. Paggi pursuant to his prior employment agreement.
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.
Effective March 31, 2000, William P. Hewitt resigned from his position as
Senior Vice President of Leasing and Operations. Prior to his resignation, Mr.
Hewitt 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 of Directors and 50,000 shares
of restricted stock, subject primarily to the achievement of certain performance
criteria as set by the Board. The employment agreement also provided for the
cancellation of 100,000 stock options issued to Mr. Hewitt pursuant to his prior
employment agreement. Upon his resignation effective March 31, 2000, 33,333 of
the shares of restricted stock were cancelled.
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.
Compensation Committee Interlocks and Insider Participation
Messrs. Andrews (Chairman), 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
"Directors." For a discussion of interrelationships involving members of the
Compensation Committee or other directors of the Company, see "Certain
Relationships and Related Transactions."
10
<PAGE>
Director Compensation
The Company pays its non-employee Directors (the "Independent Directors")
an annual fee of $20,000. In addition, the Company pays the Independent
Directors fees of $1,000 for attendance at each meeting of the Board of
Directors and $500 for attendance at committee meetings. For the fiscal year
ended December 31, 1999, the Company 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 based on 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 $15 for the period from January 1, 1999 through May 31, 1999
and $9.69 for the period from June 1, 1999 through December 31, 1999 per share.
Pursuant to this formula, each of Directors Barnum, Riedman, Meyer, Garvey and
Andrews were paid 2,697, 2,688, 1,842, 1,680 and 2,818 shares of Common Stock,
respectively. Director Ticotin has agreed to waive his rights to receive
compensation as a Director 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 Stock Option and Incentive 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 Stock Option
and Incentive 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.
11
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of December 31, 1999
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 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 Percent of
Name of Beneficial Owner Beneficial Ownership(a) Class(b)
- ------------------------ --------------------------------------------------------------
<S> <C> <C>
Prometheus Western Retail, LLC
30 Rockefeller Plaza
New York, NY 10020 15,666,666(c) 58.8%
Merrill Lynch & Co., Inc.
World Financial Center, North Tower
250 Vesey Street, New York, NY 10281 1,669,448(d)(e) 6.3%
Edward D. Fox 481,330(f) 1.8%
Mark D. Granados (g) - *
Stuart J.S. Gulland 227,496(h) *
William P. Hewitt (i) 22,821 *
Steven M. Jaffe 94,006(j) *
Joseph Paggi 62,452(k)
R. Bruce Andrews 24,718(l) *
Robert T. Barnum 29,197(m) *
Christine Garvey 6,680(n) *
Anthony E. Meyer 1,842 *
Fred L. Riedman 19,588(o) *
Mark S. Ticotin - *
All Directors and Executive
Officers as a group (11 persons) 970,130(f)(j)(l) 3.6%
(m)(n)(o)
</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 26,647,968 shares of Common Stock outstanding as of December 31,
1999.
(c) 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.
(e) Includes shares that the holder has the right to acquire through the
exchange of 7 1/4% exchangeable subordinated debentures due in 2003.
(f) Includes restricted stock received per the terms of Mr. Fox's employment
contract in lieu of cash compensation as well as restricted stock received
as long term incentive compensation.
(g) Effective April 1, 1999, Mr. Granados resigned from his position with the
Company. Mr. Granados was retained as a consultant by the Company through
January 31, 2000.
(h) Includes options to purchase 142,500 shares within 60 days of December 31,
1999.
(i) Effective March 31, 2000, Mr. Hewitt resigned from his position with the
Company. Includes restricted stock received per the terms of Mr. Hewitt's
employment contract.
(j) Includes options to purchase 109,010 shares within 60 days of December 31,
1999.
(k) Includes restricted stock received per the terms of Mr. Paggi's employment
contract.
(l) Includes options to purchase 13,900 shares within 60 days of December 31,
1999.
(m) Includes options to purchase 7,500 shares within 60 days of December 31,
1999.
(n) Includes options to purchase 5,000 shares within 60 days of December 31,
1999.
(o) Includes options to purchase 13,900 shares within 60 days of December 31,
1999.
12
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 1997, the Company extended a loan of $3,138,586 to Fred W.
Bruning, the Company's former Senior Vice President and Chief Investment
Officer, with an interest 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 on May
20, 1998. As a part of the severance agreement between the Company and Mr.
Bruning, the Company agreed to forbear on collecting the loan for a maximum
additional six months provided that Mr. Bruning comply with the severance
agreement. The loan was paid in full in exchange for OP Units owned by Mr.
Bruning on July 12, 1999.
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.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
Center Trust, Inc.
By: /s/ Edward D. Fox
---------------------------
Edward D. Fox
Chairman of the Board, Chief Financial
Officer and President
S-1
