<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
<TABLE>
<S> <C>
[x] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
MALAN REALTY INVESTORS, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
KENSINGTON INVESTMENT GROUP, INC.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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 0-12.
(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> 2
PRELIMINARY COPY, SUBJECT TO COMPLETION
DATED MARCH __, 2000
[LETTERHEAD OF KENSINGTON INVESTMENT]
March __, 2000
Dear Fellow Shareholders:
We are the beneficial owners of 9.6% of the Common Stock of Malan
Realty Investors, Inc. We have been a shareholder since 1995. Over the past year
or so we have grown increasingly dissatisfied with the Company's performance.
We are particularly dissatisfied with the Board's actions to entrench
itself and its resistance to certain shareholder initiatives which could have
benefited all shareholders. We believe that the Board is only interested in
retaining control of the Company. As a result, we are seeking your support to
elect a new Board of Directors whose interests are more aligned with your
interest as a shareholder.
The slate of nominees that we are proposing are individuals of
integrity and experience who are committed to enhancing value for all
Shareholders. The election of our slate would provide the Company with a fresh
perspective based on a combined total of over 75 years of real estate asset
management, investment and capital markets experience.
It is important that your shares be represented and voted at the annual
meeting regardless of the size of your holdings. Whether or not you plan to
attend the annual meeting, please complete, sign, date and return the
accompanying [GOLD] proxy card in the enclosed envelope in order to make certain
that your shares will be represented at the annual meeting.
If you also believe it is time for a change, please mark, sign, date,
and mail the enclosed [gold] proxy card. If you have already returned the proxy
card sent to you by the company, you may revoke that proxy and vote for our
nominees by marking, signing, dating, and mailing a later dated [gold] proxy
card.
If you have any questions or comments, please contact our proxy
solicitors, [_____________________________________].
Thank you for your consideration of this matter.
Sincerely yours,
KENSINGTON INVESTMENT GROUP, INC.
<PAGE> 3
PRELIMINARY COPY, SUBJECT TO COMPLETION
DATED MARCH ___, 2000
PROXY STATEMENT
OF
KENSINGTON INVESTMENT GROUP, INC.
IN OPPOSITION TO THE BOARD OF DIRECTORS
OF
MALAN REALTY INVESTORS, INC.
---------------------
2000 ANNUAL MEETING OF SHAREHOLDERS
INTRODUCTION
This Proxy Statement (the "Proxy Statement") and the accompanying form
of Proxy are being furnished by Kensington Investment Group, Inc., a Delaware
corporation ("Kensington"), to the owners of shares of Common Stock of Malan
Realty Investors, Inc. (the "Company"), on or about March __, 2000, in
connection with the solicitation by Kensington of proxies to be voted at the
Company's 2000 Annual Meeting of Shareholders (the "Annual Meeting"). The
Company has announced that the Annual Meeting will be held on May 10, 2000, at
the Community House, 380 South Bates Street, Birmingham, Michigan at 10:00 a.m.,
local time.
Kensington is soliciting proxies from the holders of shares of Common
Stock in order to elect the following individuals (collectively, the "Kensington
Nominees") to the Board of Directors of the Company (the "Board") at the Annual
Meeting: Paul Gray, Jill Holup, John P. Kramer, Jeffrey Lewis, and Andrew
Miller. If elected, the Kensington Nominees will constitute the entire Board.
Kensington is proposing a slate of nominees for the Board because it believes a
new Board with a new perspective is needed to enhance Shareholder value.
YOU WILL SOON RECEIVE A PROXY CARD FROM THE COMPANY. PLEASE RETURN ONLY
KENSINGTON'S [GOLD] PROXY CARD AND DO NOT RETURN ANY COMPANY PROXY CARD UNDER
ANY CIRCUMSTANCES. IF YOU RETURN BOTH PROXY CARDS THERE IS A DANGER THAT YOUR
SHARES WILL NOT BE VOTED AS YOU DESIRE, BECAUSE ONLY THE LATEST DATED PROXY CARD
YOU SUBMIT COUNTS.
INFORMATION ABOUT KENSINGTON
Kensington is a major Shareholder of the Company and has been a
shareholder since 1995. As of the date of this Proxy Statement, Kensington is
the beneficial owner of 496,350 shares of Common Stock (or approximately 9.6% of
the shares issued and outstanding). Kensington is a registered investment
advisor engaged in the business of managing investments in real estate
securities. The principal business address of Kensington is 4 Orinda Way, Suite
220D, Orinda, California 94563.
<PAGE> 4
REASONS FOR THE SOLICITATION
Kensington is asking Shareholders to elect the five Kensington Nominees
to replace the current Board. As one of the Company's largest Shareholders,
Kensington has become dissatisfied with the Company's performance and is seeking
to elect a new slate of nominees to the Board.
Below we have summarized why we think it is time to have a new Board in
place.
o THE CURRENT BOARD'S ACTIONS ARE HOSTILE TOWARDS THE SHAREHOLDERS
Kensington believes that the incumbent Board's actions over the past
year have been directed against the Shareholders of the Company.
JANUARY, 1999. THE BOARD ADOPTED A "POISON PILL". After a 21% decline
in the price of the stock (from July 15, 1998 to January 15, 1999) the Board of
Directors adopted a "Poison Pill". Poison Pills have the effect of causing a
substantial dilution of ownership to any person or group that attempts to
acquire a significant number of shares in the Company without the prior
permission of the Board. Kensington believes that in the hands of the current
Board the Poison Pill serves to protect management from direct Shareholder
accountability. Kensington believes the adoption of the "Poison Pill" hurt all
Shareholders in the Company because it shows that management and the Board are
more interested in entrenching themselves and maintaining control of the Company
than in working to increase value for all Shareholders.
SPRING, 1999. ATTEMPT TO STAGGER THE BOARD. The Board tried to have the
Shareholders approve a "Staggered Board" at the 1999 Annual Meeting. Under a
Staggered Board, only one-third of the directors are elected at each annual
meeting. In its draft proxy statement, the Company admitted that a Staggered
Board would make it more difficult to replace a majority of the Board, even if
shareholders desire such a change. The Board eventually withdrew the Staggered
Board proposal after Shareholders expressed their concerns about it. Although
the Staggered Board proposal was eventually withdrawn, Kensington views its
inclusion in the Company's 1999 proxy statement as another example of the
Board's desire to entrench itself and maintain control of the Company rather
than work to increase value for all Shareholders.
FALL, 1999. HOSTILE BEHAVIOR TOWARD MAJOR SHAREHOLDER. Based on
Securities and Exchange Commission filings, Kensington believes that the Company
engaged in highly aggressive actions against a large shareholder named Peter T.
Kross near the end of 1999.
The specific actions of the Company are discussed below, but Kensington
sees this behavior as another example of the Board's desire to entrench itself
and maintain control of the Company rather than work to increase value for all
Shareholders.
According to SEC filings, Mr. Kross was and remains the beneficial
owner of 9.0% of the Common Stock. In August, 1999 this Shareholder met with
management to encourage the Company to explore different strategies for
maximizing Shareholder value and requested that the Company add either himself
or his representative to the Board. On September 14, 1999, Mr. Kross met with
the Board to discuss his qualifications for membership on the Board.
However, just prior to the September 14th meeting, the Board held a
special meeting on September 7, 1999, in order to take steps to limit
Shareholder action by amending the Company's By-Laws with respect to special
meetings, shareholder proposals and nomination of Directors. The amended By-Laws
set forth new procedural requirements for Shareholder proposals and nominations
as well as limit the ability to call a special meeting of Shareholders to those
Shareholders who are record holders of
2
<PAGE> 5
shares of at least fifty-one percent (as opposed to twenty-five percent under
the Company's previous By-Laws) of Common Stock. The Board did not disclose
these By-Laws changes until after its meeting with Mr. Kross.
In November, Mr. Kross informed the Company of his intention to run a
full slate of five Director nominees for the Annual Meeting and formally
withdrew his request for appointment to the Board. In response, the Company sent
a letter to the parent corporation of Mr. Kross' employer. The letter referred
to the close banking relationship between the Company and another of the parent
corporation's subsidiaries and asked that Mr. Kross' actions be reviewed. Mr.
Kross' employer investigated and found no improper conduct. However, the
employer asked Mr. Kross to not seek or accept a Board position, and to not
nominate any other candidate for a Board position. In response, Mr. Kross stated
that he no longer intended to nominate a slate of directors for the Board.
Kensington hopes that the Board does not intend to take similar actions against
Shareholders who attempt to exercise their shareholder rights.
MARCH, 2000. DENIAL OF KENSINGTON'S REQUEST FOR MEANINGFUL INPUT. On
March 3, 2000, Kensington requested representation on the Board in order to have
direct input into the Board's current deliberations to enhance Shareholder
value. After discussions with Kensington, the Company rejected Kensington's
request but did offer to increase the size of the Board by one director and to
elect a Kensington designee. It is Kensington's view, that this response did not
adequately satisfy our request as the single largest Shareholder of the Company
to have greater input into the Company's plans.
o THE BOARD'S STRATEGY IS NOT WORKING
PRUDENTIAL HAS BEEN RETAINED TO EVALUATE STRATEGIC ALTERNATIVES. On
December 20, 1999, the Company announced that it has been conducting a
comprehensive review of its strategy and operations. The goal of this review was
to identify and analyze various means of enhancing Shareholder value. The
Company announced that since the summer of 1999 Prudential Securities
Incorporated has been working with the Company and had been retained as
financial advisor.
BUT NOTHING HAS HAPPENED. It appears that the Company has been working
with Prudential for more than nine months to enhance Shareholder value, and yet
since this activity began in "late summer" the Company's share price has gone
down. The Company's stock continues to trade at what Kensington believes are
disappointing values.
THE KENSINGTON NOMINEES WILL REINVIGORATE THE PROCESS AND PROTECT
SHAREHOLDER VALUE. Kensington believes that a new perspective is needed on the
Board to reinvigorate the process of enhancing shareholder value and to ensure
that any strategic transactions are undertaken in the best interest of all
Shareholders.
o THE KENSINGTON NOMINEES HAVE THE EXPERIENCE THE COMPANY NEEDS
The Kensington Nominees are individuals of integrity who combined have
over 75 years of experience in the real estate industry. The Kensington Nominees
have been carefully chosen for their depth of experience in the real estate
business. They are highly accomplished executives who are well-experienced at
asset management, investment decision making, and capital markets activities.
They are capable of thoroughly understanding and directing the Company's
business.
The Kensington Nominees are committed to enhancing value for all
Shareholders. If elected, they will embark on a strategy designed to focus
management on realizing the benefits of the current business and exploring and
evaluating alternatives for the Company.
3
<PAGE> 6
Based upon reports contained in the Company's SEC filings, the three
senior executives of the Company have "change of control" golden parachute
contracts. These golden parachutes purport to grant the executives health
insurance for their entire lives and a cash payment payable 5 days after a
change in control as follows: Anthony Gramer -- $1,000,000; Michael Kaline --
$500,000; and Elliott Broderick -- $250,000. The golden parachutes purport to
define a change in control as including the election of the Kensington Nominees.
The executives would be entitled to the golden parachute payments whether they
leave the Company voluntarily, whether they are terminated by the new Board or
whether they remain employees and continue in their positions. Kensington
expects the Kensington Nominees to evaluate the propriety and legality of these
golden parachute and take any actions they deem necessary to protect the
interests of the Company and its Shareholders.
KENSINGTON STRONGLY RECOMMENDS THAT YOU VOTE FOR THE KENSINGTON
NOMINEES BY MARKING, SIGNING, DATING AND MAILING THE ENCLOSED [GOLD] PROXY CARD
PROMPTLY IN THE ENVELOPE PROVIDED.
HOLDERS OF RECORD OF SHARES OF COMMON STOCK AS OF MARCH 17, 2000, THE
RECORD DATE FOR VOTING AT THE MEETING, ARE URGED TO SUBMIT A [GOLD] PROXY CARD
EVEN IF YOUR SHARES HAVE BEEN SOLD AFTER THE RECORD DATE.
IF YOU HAVE PURCHASED SHARES OF COMMON STOCK AFTER THE RECORD DATE AND
WISH TO VOTE SUCH SHARES AT THE MEETING, YOU SHOULD SEEK TO OBTAIN A PROXY FROM
THE SELLER OF SUCH SHARES.
IF YOUR SHARES OF COMMON STOCK ARE HELD IN THE NAME OF A BROKERAGE
FIRM, BANK OR NOMINEE ON THE RECORD DATE, ONLY IT CAN VOTE YOUR SHARES AND ONLY
UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. PLEASE CONTACT THE PERSON
RESPONSIBLE FOR YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR YOUR SHARES TO BE VOTED
ON THE [GOLD] PROXY CARD.
- - --------------------------------------------------------------------------------
QUESTIONS CONCERNING THIS PROXY STATEMENT OR THE ACCOMPANYING GOLD
PROXY CARD SHOULD BE DIRECTED TO:
[_________________________________]
- - --------------------------------------------------------------------------------
VOTING
The Board has fixed the close of business on March 17, 2000 as the
record date for the determination of the holders of Common Stock entitled to
notice of and to vote at the Annual Meeting. On such date, there were
[__________] shares of Common Stock outstanding and entitled to vote at the
Annual Meeting. On all matters, including the election of Directors, each holder
of Common Stock will have one vote for each share held.
The attendance at the Annual Meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock entitled to vote
at the Annual Meeting is necessary to constitute a quorum. "Broker non-votes"
will be counted for purposes of determining whether there is a quorum.
Similarly, a proxy marked "abstain" with respect to any matter will not be voted
but will be counted as present. The affirmative vote of the holders of a
plurality of the votes cast at the Annual Meeting is
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<PAGE> 7
required for the election of Directors. A properly signed Proxy marked "withhold
authority" with respect to the election of one or more Directors will not be
voted for the Directors so indicated, but will be counted to determine whether
there is a quorum. The affirmative vote of a majority of the votes cast at the
Annual Meeting will be necessary to ratify the appointment of Deloitte & Touche
LLP as the Company's independent auditors for 2000. If any other matter properly
comes before the Annual Meeting, its resolution will be determined by the
affirmative vote of the holders of a majority of votes cast at the meeting.
Since the election of Directors and the ratification of the appointment of
auditors will be determined by votes cast rather than by a percentage of the
shares present, "broker non-votes" and abstentions will not affect the election
of Directors or the ratification of auditors.
If the enclosed form of Proxy is executed and returned, it may
nevertheless be revoked by the person giving it any time before the vote at the
Annual Meeting either by filing with the Secretary of the Company a written
notice of revocation or a proxy bearing a later date than the most recently
submitted proxy or by attending the Annual Meeting and voting in person. The
execution of a proxy will not affect a Shareholder's right to attend the Annual
Meeting and vote in person, but attendance at the Annual Meeting will not, by
itself, revoke a proxy.
Unless contrary instructions are indicated on the enclosed [GOLD]
Proxy, all shares of Common Stock represented by valid Proxies received pursuant
to this solicitation (which have not been revoked as described above) will be
voted (a) FOR the election of the Kensington Nominees, (b) FOR the ratification
of the selection of Deloitte & Touche LLP as the Company's independent auditors
for 2000 and (c) at the discretion of the Proxy holder(s), on such other
business as may properly come before the Annual Meeting, including any
adjournment(s) or postponements(s) thereof.
IF YOU WISH TO VOTE FOR THE KENSINGTON NOMINEES, YOU MUST SUBMIT THE
ENCLOSED [GOLD] PROXY CARD AND SHOULD NOT SUBMIT THE COMPANY'S PROXY CARD.
- - --------------------------------------------------------------------------------
YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT. PLEASE
SIGN AND DATE THE ENCLOSED [GOLD] PROXY CARD AND RETURN IT IN THE ENCLOSED
ENVELOPE PROMPTLY.
- - --------------------------------------------------------------------------------
PROPOSAL 1
NOMINEES FOR ELECTION AS DIRECTORS
GENERAL
The Amended and Restated By-Laws of the Company (the "By-Laws") provide
that the Board shall consist of not less than 3 nor more than 11 Directors, with
the exact number to be fixed by resolution of the Board. At the 1999 annual
meeting of Shareholders, 5 persons were elected to serve as Directors on the
Board until the 2000 annual meeting of Shareholders and until his or her
successor had been duly elected and qualified, or until his or her death,
resignation or removal.
5
<PAGE> 8
THE KENSINGTON NOMINEES
The information below concerning age and principal occupation has been
furnished by the respective Kensington Nominees. None of the Kensington Nominees
directly owns Common Stock.
NOMINEES FOR DIRECTOR
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
- - ---- --- --------------------
<S> <C> <C>
ANDREW MILLER 45 Mr. Miller is currently the President of Miller Capital Advisory, Inc. (an
advisory business focused on real estate capital markets and asset management).
Prior thereto Mr. Miller was the First Vice President, Capital Markets at Homart
Development Co. (where he was a consultant on acquisition, disposition and
general asset management of real estate) from 1981 through 1995.
JEFFREY LEWIS 54 Mr. Lewis is currently a Vice President at Kennedy Associates Real Estate
Counsel, Inc. (a real estate investment firm). Prior thereto Mr. Lewis was a
Principal Investment Officer for the California Public Employees' Retirement
System (where he managed the funds' national office portfolio) from 1996 through
1998, and a Consultant at BARD Consulting (a consulting firm) from 1992 through
1996.
JOHN P. KRAMER (1) 42 Mr. Kramer is currently President of Kensington Investment Group, Inc. (a
registered investment advisor engaged in the business of managing investments in
real estate securities) and has been at such position for the past five years.
JILL HOLUP 36 Ms. Holup is currently a Partner and Portfolio Manager at John McStay Investment
Counsel (an investment management firm). Prior thereto Ms. Holup was a First
Vice President, Equity Research at McDonald & Company Securities (an investment
bank) from 1996 through 1997, and a Senior Securities Analyst at RREEF Real
Estate Securities Advisors (an investment advisor to primarily pension funds)
from 1994 through 1996.
PAUL GRAY 34 Mr. Gray is currently a Portfolio Manager at Kensington Investment Group, Inc. (a
registered investment advisor engaged in the business of managing investments in
real estate securities) and has been at such position for the past five years.
</TABLE>
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(1) Mr. Kramer controls more than a majority of the stock of Kensington,
and accordingly may be deemed to beneficially own the shares of Common
Stock beneficially owned by Kensington. Mr. Kramer disclaims beneficial
ownership of all such shares.
Each Kensington Nominee has entered into an Indemnification Agreement
with Kensington pursuant to which: (i) each Kensington Nominee has agreed to be
named as a nominee for election as a Director of the Company at the Annual
Meeting; (ii) each Kensington Nominee (unless previously approved by Kensington
in writing) has agreed that each will not serve as a nominee for election as a
Director of the Company, or to otherwise stand for election as or become a
Director of the Company, as part of a slate of nominees proposed by any other
party (including the Board), unless such slate includes a number of nominees
proposed by Kensington sufficient to constitute a majority of the members of the
Board of the Company; and (iii) Kensington has agreed to indemnify each
Kensington Nominee from and against any losses incurred by such Kensington
Nominee resulting from, relating to or arising out of the nomination of such
Kensington Nominee for election as a Director of the Company at the Annual
Meeting.
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<PAGE> 9
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KENSINGTON RECOMMENDS THAT HOLDERS OF SHARES OF COMMON STOCK VOTE IN FAVOR OF
THE KENSINGTON NOMINEES LISTED ABOVE AND NOT VOTE IN FAVOR OF ANY OF THE
NOMINEES OF THE COMPANY.
- - --------------------------------------------------------------------------------
INFORMATION CONCERNING PERSONS WHO MAY SOLICIT PROXIES
Under the applicable regulations of the Securities and Exchange
Commission ("SEC"), Kensington and each of the Kensington Nominees is deemed to
be a "participant" in Kensington's solicitation of proxies. The following table
sets forth the name, business address and principal occupation of the Kensington
Nominees and any other person who may solicit proxies from Shareholders of the
Company on behalf of Kensington ("Participants").
ANDREW MILLER PAUL GRAY
President Portfolio Manager
Miller Capital Advisory, Inc. Kensington Investment Group, Inc.
1800 Sherman Avenue, Suite 100 4 Orinda Way, Suite 220D
Evanston, IL 60201 Orinda, CA 94563
JEFFREY LEWIS JOHN P. KRAMER
Vice President President
Kennedy Associates Real Estate Counsel, Inc. Kensington Investment Group, Inc.
2400 Financial Center 4 Orinda Way, Suite 220D
Seattle, WA 98161 Orinda, CA 94563
JILL HOLUP
Partner and Portfolio Manager
John McStay Investment Counsel
5949 Sherry Lane, Suite 1600
Dallas, TX 75225
--------------------------
(1) The companies named in the table above, to the extent that the
Participants are officers of such companies, are deemed to be
associates of such Participants. The addresses of such associates are
as given above.
The following is a summary of all transactions in Company securities by
the Participants over the last two years. Unless otherwise indicated, none of
the Participants other than Kensington has purchased or sold Common Stock of the
Company within the past two years.
KENSINGTON TRANSACTIONS
<TABLE>
<CAPTION>
AMOUNT OF COMMON AMOUNT OF COMMON AMOUNT OF COMMON
----------------- ----------------- ----------------
DATE OF STOCK PURCHASED DATE OF STOCK PURCHASED DATE OF STOCK PURCHASED
-------- ---------------- -------- ---------------- -------- ---------------
TRANSACTION (P) OR SOLD (S) TRANSACTION (P) OR SOLD (S) TRANSACTION (P) OR SOLD (S)
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
3/29/98 5,000 (P) 1/4/99 1,000 (S) 8/23/99 1,000 (P)
3/31/98 7,500 (P) 1/5/99 10,000 (S) 8/24/99 10,000 (P)
4/2/98 5,000 (P) 1/5/99 500 (P) 9/9/99 7,400 (P)
</TABLE>
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<TABLE>
<CAPTION>
AMOUNT OF COMMON AMOUNT OF COMMON AMOUNT OF COMMON
----------------- ----------------- ----------------
DATE OF STOCK PURCHASED DATE OF STOCK PURCHASED DATE OF STOCK PURCHASED
-------- ---------------- -------- ---------------- -------- ---------------
TRANSACTION (P) OR SOLD (S) TRANSACTION (P) OR SOLD (S) TRANSACTION (P) OR SOLD (S)
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
4/3/98 3,500 (P) 1/8/99 2,000 (S) 9/13/99 8,000 (P)
4/13/98 2,000 (P) 1/12/99 3,500 (P) 9/14/99 3,000 (S)
4/14/98 1,000 (P) 1/13/99 4,500 (S) 9/14/99 1,000 (P)
4/15/98 100 (P) 2/3/99 500 (P) 9/15/99 2,000 (S)
4/22/98 4,200 (P) 2/10/99 5,000 (P) 9/16/99 2,500 (S)
4/27/98 1,500 (P) 2/11/99 5,000 (S) 9/17/99 4,000 (S)
4/28/98 100 (P) 2/18/99 100 (S) 9/20/99 200 (P)
5/14/98 3,000 (S) 2/23/99 2,000 (S) 9/21/99 500 (P)
5/27/98 1,000 (P) 2/25/99 500 (P) 9/23/99 7,500 (P)
6/3/98 700 (P) 3/3/99 2,500 (P) 9/23/99 8,000 (S)
6/24/98 45,000 (P) 3/4/99 15,200 (P) 9/24/99 3,000 (S)
6/26/98 20,000 (P) 3/5/99 100 (P) 9/27/99 500 (P)
6/29/98 5,000 (P) 3/8/99 200 (P) 9/28/99 100 (P)
6/30/98 7,000 (P) 3/9/99 6,000 (P) 9/30/99 15,700 (P)
7/2/98 10,900 (P) 3/15/99 1,000 (P) 10/1/99 500 (S)
7/6/98 1,500 (P) 3/16/99 1,000 (P) 10/4/99 600 (P)
7/9/98 5,000 (P) 3/17/99 200 (P) 10/14/99 2,000 (S)
7/10/98 2,000 (P) 3/22/99 4,800 (S) 10/26/99 200 (P)
7/14/98 2,000 (P) 3/24/99 7,000 (S) 11/1/99 400 (S)
7/15/98 10,000 (P) 3/26/99 2,000 (S) 11/4/99 1,000 (P)
7/17/98 8,100 (P) 3/29/99 2,300 (P) 11/8/99 500 (S)
7/21/98 500 (P) 3/30/99 2,000 (P) 11/9/99 500 (S)
7/23/98 5,000 (P) 3/30/99 500 (S) 11/10/99 1,200 (P)
7/24/98 13,000 (P) 3/31/99 3,100 (S) 11/16/99 100 (P)
7/27/98 12,000 (P) 4/1/99 2,500 (S) 11/17/99 100 (P)
7/28/98 10,000 (P) 4/5/99 5,000 (S) 11/19/99 100 (P)
7/30/98 7,000 (P) 4/6/99 2,000 (S) 11/22/99 200 (P)
7/31/98 7,000 (P) 4/7/99 7,600 (S) 11/23/99 3,700 (P)
8/11/98 4,000 (P) 4/8/99 1,000 (S) 11/24/99 100 (P)
8/12/98 3,100 (P) 4/13/99 1,600 (P) 11/26/99 800 (P)
8/21/98 1,000 (P) 4/21/99 2,300 (P) 11/29/99 100 (P)
8/31/98 5,000 (P) 4/23/99 800 (P) 11/30/99 100 (P)
9/2/98 2,000 (P) 4/26/99 1,500 (S) 12/1/99 6,200 (P)
</TABLE>
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<PAGE> 11
<TABLE>
<CAPTION>
AMOUNT OF COMMON AMOUNT OF COMMON AMOUNT OF COMMON
----------------- ----------------- ----------------
DATE OF STOCK PURCHASED DATE OF STOCK PURCHASED DATE OF STOCK PURCHASED
-------- ---------------- -------- ---------------- -------- ---------------
TRANSACTION (P) OR SOLD (S) TRANSACTION (P) OR SOLD (S) TRANSACTION (P) OR SOLD (S)
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
9/4/98 500 (P) 4/29/99 500 (S) 12/14/99 100 (P)
9/8/98 2,000 (P) 4/30/99 6,300 (P) 12/16/99 1,000 (P)
9/9/98 1,000 (P) 5/3/99 100 (P) 12/17/99 1,100 (P)
9/10/98 100 (P) 5/13/99 3,000 (P) 12/20/99 100 (P)
9/15/98 2,000 (P) 5/14/99 500 (P) 12/21/99 1,000 (P)
9/21/98 500 (P) 5/17/99 100 (P) 12/22/99 800 (P)
9/22/98 500 (P) 5/18/99 2,000 (P) 12/23/99 500 (P)
9/25/98 500 (P) 6/1/99 500 (P) 12/27/99 1,500 (P)
9/30/98 8,000 (P) 6/4/99 7,000 (P) 12/29/99 4,000 (P)
10/7/98 10,500 (S) 6/10/99 1,000 (P) 12/30/99 2,000 (P)
10/13/98 500 (S) 6/11/99 1,000 (P) 12/31/99 1,500 (P)
10/19/98 200 (S) 6/14/99 7,000 (P) 1/05/00 500 (P)
10/20/98 1,600 (S) 6/15/99 1,400 (P) 1/07/00 500 (P)
10/22/98 1,000 (S) 6/16/99 200 (P) 1/10/00 1,000 (P)
10/27/98 1,000 (S) 6/17/99 1,000 (P) 1/24/00 700 (P)
10/29/98 1,000 (S) 6/21/99 400 (S) 1/25/00 5,000 (S)
11/2/98 1,400 (S) 6/22/99 200 (P) 1/28/00 200 (P)
11/5/98 500 (S) 6/23/99 5,000 (S) 2/01/00 500 (P)
11/6/98 1,000 (S) 6/23/99 200 (P) 2/02/00 500 (P)
11/10/98 100 (P) 6/24/99 700 (P) 2/07/00 500 (P)
11/12/98 500 (S) 6/25/99 1,000 (P) 2/08/00 500 (P)
11/16/98 1,000 (S) 6/28/99 500 (P) 2/09/00 500 (P)
11/24/98 500 (S) 6/29/99 4,100 (P) 2/14/00 500 (P)
12/8/98 500 (P) 6/30/99 3,500 (P) 2/16/00 2,000 (P)
12/14/98 5,000 (S) 7/2/99 100 (P) 2/22/00 500 (P)
12/18/98 5,000 (S) 7/8/99 500 (P) 2/23/00 500 (P)
12/24/98 600 (P) 7/22/99 100 (P) 2/25/00 2,200 (P)
12/29/98 100 (P) 7/30/99 100 (P) 2/28/00 1,300 (P)
12/30/98 200 (P) 8/3/99 100 (P)
12/31/98 7,100 (P) 8/19/99 2,450 (P)
</TABLE>
- - ---------------------------------------
(1) All of the shares of Common Stock denoted in the table above as being
purchased and/or sold by Kensington were purchased and/or sold in the
ordinary course of business at the direction of Kensington as
investment advisor to certain investment accounts and as general
partner of certain limited partnership investment partnerships.
9
<PAGE> 12
Except as described in this Proxy Statement, none of the Participants
nor any of their respective affiliates or associates (together, the "Participant
Affiliates"), (i) directly or indirectly beneficially owns any securities of the
Company or of any subsidiary of the Company or (ii) has had any relationship
with the Company in any capacity other than as a Shareholder. Furthermore,
except as described in this Proxy Statement, no Participant or Participant
Affiliate is either a party to any transaction or series of transactions since
January 1, 1998, or has knowledge of any currently proposed transaction or
series of transactions, (i) to which the Company or any of its subsidiaries was
or is to be a party, (ii) in which the amount involved exceeds $60,000, and
(iii) in which any Participant or Participant Affiliate had or will have, a
direct or indirect material interest.
Except as described in this Proxy Statement, no Participant or
Participant Affiliates has entered into any agreement or understanding with any
person respecting any (i) future employment by the Company or its affiliates or
(ii) any transactions to which the Company or any of its affiliates will or may
be a party. Except as described in this Proxy Statement, there are no contracts,
arrangements or understandings by any Participant or Participant Affiliates
within the past year with any person with respect to any capital stock of the
Company.
COST AND METHOD OF SOLICITATION
Kensington will bear the cost of this solicitation. While no precise
estimate of this cost can be made at the present time, Kensington currently
estimates that it will spend a total of approximately $[______] for its
solicitation of proxies, including expenditures for attorneys, solicitors and
advertising, printing, transportation and related expenses. As of March __,
2000, Kensington has incurred proxy solicitation expenses of approximately [$ ].
Kensington expects to seek reimbursement from the Company for its expenses in
connection with this solicitation. In addition to soliciting proxies by mail,
proxies may be solicited in person or by telephone or telecopy.
Kensington will also reimburse brokers, fiduciaries, custodians and
other nominees, as well as persons holding stock for others who have the right
to give voting instructions, for out-of-pocket expenses incurred in forwarding
this Proxy Statement and related materials to, and obtaining instructions or
authorizations relating to such materials from, beneficial owners of Company
capital stock. Kensington will pay for the cost of these solicitations, but
these individuals will receive no additional compensation for these solicitation
services. Kensington has retained the proxy solicitation firm of
[_______________] at estimated fees of not more than $[______] in the aggregate,
plus reasonable out-of-pocket expenses, to participate in the solicitation of
proxies and revocations. Kensington also has agreed to indemnify [___________]
against certain liabilities and expenses. Kensington estimates that
approximately __ employees of [_______________] will be involved in the
solicitation of proxies on behalf of Kensington.
10
<PAGE> 13
ADDITIONAL INFORMATION
Certain information regarding Company Common Stock held by the
Company's Directors, nominees, management and 5% stockholders is contained in
the Company's Proxy Statement and is incorporated herein by reference.
Information concerning the date by which proposals of security holders intended
to be presented at the next annual of stockholders of the Company must be
received by the Company for inclusion in the Company's proxy statement and form
of proxy for that meeting is also contained in the Company's Proxy Statement and
is incorporated herein by reference.
Kensington assumes no responsibility for the accuracy or completeness
of any information contained herein which is based on, or incorporated by
reference to, the Company's Proxy Statement.
KENSINGTON INVESTMENT GROUP, INC.
March __, 2000
11
<PAGE> 14
- - --------------------------------------------------------------------------------
IMPORTANT
1. Be sure to vote on the [GOLD] Proxy card. Kensington urges you NOT sign
any proxy card which is sent to you by the Company.
2. If any of your shares are held in the name of a bank, broker or other
nominee, please contact the person responsible for your account and
direct him or her to vote on the [GOLD] Proxy "FOR" the Kensington
Nominees and "FOR" the approval of Deloitte & Touche LLP as the
Company's independent public accountants for 2000.
3. If you have any questions or need assistance in voting your shares,
please contact :
[__________________________________________]
- - --------------------------------------------------------------------------------
<PAGE> 15
PRELIMINARY COPY, SUBJECT TO COMPLETION
DATED MARCH __, 2000
MALAN REALTY INVESTORS, INC.
COMMON STOCK PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
KENSINGTON INVESTMENT GROUP, INC. ("KENSINGTON")
The undersigned hereby appoints John Patrick Kramer and Paul Gray II,
and each of them proxies for the undersigned with full power of substitution, to
vote all shares of Common Stock of Malan Realty Investors, Inc. (the "Company")
which the undersigned is entitled to vote at the Company's 2000 Annual Meeting
of Shareholders, and any postponements or adjournments thereof (the "Meeting"),
hereby revoking all prior proxies, on the matters set forth below as follows:
- - --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS SPECIFIED. IF A CHOICE IS NOT SPECIFIED, THE
PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED BELOW AND "FOR" THE
RATIFICATION OF DELOITTE & TOUCHE LLP AS INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE COMPANY FOR 2000.
- - --------------------------------------------------------------------------------
[X] Please mark your votes as in this example.
<TABLE>
<S> <S>
1. Election of Directors Nominees: Paul Gray II, Jill Holup, John Patrick Kramer,
Jeffrey Lewis and Andrew Miller
FOR the nominees listed above WITHHOLD AUTHORITY to vote for the nominees listed
above
[_] [_]
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual nominee
or nominees, write that nominee's name in the space provided below.
-------------------------------------------------------------------
2. Approve Appointment of Deloitte & Touche LLP as Auditors for fiscal
2000
FOR AGAINST ABSTAIN
[_] [_] [_]
4. In the discretion of the proxyholders, on any other matters that may
properly come before the meeting.
Please sign exactly as your name appears hereon. When shares are held
by two or more persons, all of them should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by the
authorized person.
Date
------------------------ -----------------------------
(SIGNATURE)
-----------------------------
(SIGNATURE IF HELD JOINTLY)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD USING THE
ENCLOSED ENVELOPE.
