<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1 )
MALAN REALTY INVESTORS, INC.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
561063-10-8
(CUSIP Number)
JOHN P. KRAMER
KENSINGTON INVESTMENT GROUP, INC.
4 ORINDA WAY, SUITE 220D
ORINDA, CALIFORNIA 94563
(925) 253-2949
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
With a copy to:
LAWRENCE LEDERMAN, ESQ.
MILBANK, TWEED, HADLEY & McCLOY LLP
1 CHASE MANHATTAN PLAZA
NEW YORK, NY 10005
March 10, 2000
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |X|.
<PAGE> 2
SCHEDULE 13D
CUSIP NO.: 561063-10-8
(1) NAME OF REPORTING PERSON: Kensington Investment Group, Inc.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 68-0309666
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |_|
(3) SEC USE ONLY
(4) SOURCE OF FUNDS: AF; OO
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) |_|
(6) CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
(7) SOLE VOTING POWER: 496,350
(8) SHARED VOTING POWER: 0
(9) SOLE DISPOSITIVE POWER: 496,350
(10) SHARED DISPOSITIVE POWER: 0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 496,350
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 9.60%
(14) TYPE OF REPORTING PERSON: CO; IA
<PAGE> 3
SCHEDULE 13D
CUSIP NO.: 561063-10-8
(1) NAME OF REPORTING PERSON: John P. Kramer
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |_|
(3) SEC USE ONLY
(4) SOURCE OF FUNDS: N/A
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) |_|
(6) CITIZENSHIP OR PLACE OF ORGANIZATION: United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
(7) SOLE VOTING POWER: 0
(8) SHARED VOTING POWER: 0
(9) SOLE DISPOSITIVE POWER: 0
(10) SHARED DISPOSITIVE POWER: 0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 0
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0%
(14) TYPE OF REPORTING PERSON: I
<PAGE> 4
This Amendment No. 1 amends the statement on Schedule 13D
originally filed with the Securities and Exchange Commission on March 6, 2000
(the "Schedule 13D"), with respect to the Common Stock, $.01 par value (the
"Common Stock"), of Malan Realty Investors, Inc., a Michigan corporation (the
"Company"). Other than as set forth herein, there has been no material change in
the information set forth in the Schedule 13D. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the
Schedule 13D.
This Amendment No. 1 is being filed by Kensington Investment
Group, Inc. (the "Reporting Person") and John P. Kramer.
ITEM 1. SECURITY AND ISSUER.
Item 1 of the Schedule 13D is hereby amended and restated in
its entirety as follows:
The class of equity securities to which this Statement on
Schedule 13D relates is the Common Stock, $.01 par value (the "Common Stock"),
of Malan Realty Investors, Inc., a Michigan corporation (the "Company"), with
its principal executive offices located at 30200 Telegraph Road, Suite 105,
Bingham Farms, Michigan 48025. The Common Stock is the only class of securities
of the Company entitled to vote in the election of directors and on the other
matters on which shareholders of the Company are entitled to vote.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Schedule 13D is hereby amended and restated in
its entirety as follows:
Pursuant to a letter dated March 3, 2000, the Reporting Person
requested representation on the Board of Directors of the Company in order to
have direct input into the Board's current deliberations to enhance shareholder
value. Since that date, the Reporting Person has had discussions with the
Company regarding representation on the Board of Directors. The Company has
proposed to increase the size of the Board by one director and to elect a
designee of the Reporting Person. However, the Reporting Person has not been
satisfied with the Company's response to its request for representation on the
Board. Accordingly, on March 10, 2000, in order to preserve its rights under the
advance notice requirements of Article III, Sections 3.12 of the Amended and
Restated Bylaws of the Company, the Reporting Person delivered a Notice of
Shareholder Nominations With Respect to 2000 Annual Meeting (the "Notice") to
the Secretary of the Company. The Notice proposes five individuals (the
"Kensington Nominees") for election to the Board at the 2000 Annual Meeting.
The Reporting Person 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 2000 Annual Meeting.
Each Kensington Nominee has agreed to be named as a nominee for election as a
director of the Company at the 2000 Annual Meeting (or at any special
<PAGE> 5
meeting of the shareholders called for that purpose) and not to 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 party (including the Board of Directors of the Company or its
Nominating Committee) other than the Reporting Person unless such slate includes
a number of nominees proposed by the Reporting Person sufficient to constitute a
majority of the members of the Board of Directors of the Company.
The Reporting Person intends to continue to discuss the issues
of additional Board representation with the Company, however, the Reporting
Person can not assure that any agreement will be reached between it and the
Company. If the Company does not take the appropriate steps to insure the
Reporting Person's satisfactory representation on the Board, the Reporting
Person will consider what further actions, if any, it will take. Such further
actions could include the proposal and solicitation of proxies in favor of the
Kensington Nominees to stand for election at the upcoming 2000 Annual Meeting of
Shareholders of the Company in opposition to the slate nominated by the
Company's directors.
Subject to applicable legal requirements and the factors
referred to herein, the Reporting Person may, from time to time, purchase
additional shares of Common Stock in open market or privately negotiated
transactions. In determining whether to purchase additional shares, the
Reporting Person intends to consider and review various factors on a continuous
basis, including the Company's financial condition, business and prospects,
other developments concerning the Company, the price and availability of shares
of Common Stock, other investment and business opportunities available to the
Reporting Person, developments with respect to the Reporting Person's business,
and general economic, money and stock market conditions. The Reporting Person
reserves the right to change its plans and intentions at any time, as it deems
appropriate, and, to the knowledge of the Reporting Person, each of the persons
listed on Annex 1 to the Schedule 13D may make the same evaluation and may have
the same reservation.
Except as described above in this Item 4, the Reporting Person
has no present plans or proposals that relate to or would result in any of the
actions enumerated in Item 4 of Schedule 13D. The Reporting Person reserves the
right to buy additional shares of Common Stock or to sell shares of Common Stock
from time to time.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement (incorporated by reference to
Exhibit 1 to the Schedule 13D filed by the Reporting
Person on March 6, 2000).
2. Letter dated March 3, 2000 from Reporting Person to the
Company (incorporated by reference to Exhibit 2 to the
Schedule 13D filed by the Reporting Person on March 6,
2000).
3. Notice of Shareholder Nominations With Respect to 2000
Annual Meeting, dated March 10, 2000.
2
<PAGE> 6
4. Form of Indemnification Agreement by and between
Kensington Investment Group, Inc. and each Kensington
Nominee.
3
<PAGE> 7
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
KENSINGTON INVESTMENT GROUP, INC.
By: /s/ John P. Kramer
------------------------------
Name: John P. Kramer
Title: President
March 13, 2000
4
<PAGE> 8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
/s/ John P. Kramer
----------------------------------
John P. Kramer
March 13, 2000
5
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
1. Joint Filing Agreement (incorporated by reference to Exhibit 1 to
the Schedule 13D filed by the Reporting Person on March 6, 2000).
2. Letter dated March 3, 2000 from Reporting Person to the Company
(incorporated by reference to Exhibit 2 to the Schedule 13D filed
by the Reporting Person on March 6, 2000).
3. Notice of Shareholder Nominations With Respect to 2000 Annual
Meeting, dated March 10, 2000.
4. Form of Indemnification Agreement by and between Kensington
Investment Group, Inc. and each Kensington Nominee.
</TABLE>
6
<PAGE> 1
EXHIBIT 3
CEDE & CO.
C/O DEPOSITORY TRUST COMPANY
55 WATER STREET
NEW YORK, NEW YORK 10041-0099
March 10, 1999
Malan Realty Investors, Inc.
30200 Telegraph Road, Suite 105
Bingham Farms, Michigan 48025
Attention: Corporate Secretary
Re: Shareholder Notice With Respect To 2000 Annual Meeting
Ladies and Gentlemen:
Cede & Co., the nominee of the Depository Trust Company
("Cede"), is a holder of record of shares of Common Stock, $.01 par value per
share (the "Common Stock"), of Malan Realty Investors, Inc. (the "Company").
These shares are registered on the stock transfer books of the Company in the
name of Cede. Cede is informed by its Participant, PaineWebber Incorporated (the
"Participant"), that on the date hereof 255,800 shares of the Common Stock
credited to the Participant's account are beneficially owned by Kensington
Investment Group, Inc. ("Kensington").
At the request of Participant, on behalf of Kensington, Cede,
as holder of record of shares of the Common Stock, is hereby submitting this
notice (the "Notice") to the Company in accordance with the requirements of
Article III, Sections 3.12 of the Amended and Restated Bylaws of the Company,
dated September 7, 1999 (the "Bylaws"). Cede's address is c/o Depository Trust
Company, 55 Water Street, New York, New York 10041-0099. Kensington's address is
4 Orinda Way, Suite 220D, Orinda, California 94563.
Cede intends, and has been informed by Kensington that
Kensington represents that it intends, to appear at the 2000 annual meeting of
the Company's stockholders (the "Annual Meeting") in person or by proxy to
submit the business specified in this notice. Cede has been informed by
Kensington that Kensington is seeking at the Annual Meeting to elect the
following persons as members of the Board of Directors of the Company, and in
that regard hereby nominates the following persons (each a "Nominee") as
nominees for election as directors of the Company at the Annual Meeting.
Paul Gray II
Jill Holup
John P. Kramer
Jeffrey Lewis
Andrew Miller
<PAGE> 2
Cede has been informed by Kensington that Kensington believes
the Nominees are appropriate candidates for election at the Annual Meeting and
that Kensington believes that the Nominees presence on the Board of Directors of
the Company will help to enhance shareholder value.
Cede has been informed by Kensington that certain information
relating to each of the Nominees as required by the Bylaws is set forth herein
and in Annexes A through E of this Notice. Except as set forth herein or in any
of such Annexes, to the best of Kensington's knowledge (i) no Nominee owns any
securities of the Company or any parent or subsidiary of the Company, directly
or indirectly, beneficially or of record, or has purchased or sold any
securities of the Company within the past two years, and none of their
associates beneficially owns, directly or indirectly, any securities of the
Company, (ii) no Nominee, his or her associates or any member of his or her
immediate family, has any arrangement or understanding with any person (a) with
respect to any future employment by the Company or its affiliates or (b) with
respect to future transactions to which the Company or any of its affiliates
will or may be a party, nor any material interest, direct or indirect, in any
transaction, or series of similar transactions, that has occurred since January
1, 1999 or any currently proposed transaction, or series of similar
transactions, to which the Company or any of its subsidiaries was or is a party
and in which the amount involved exceeds $60,000, (iii) no Nominee is, or was
within the past year, a party to any contract, arrangement or understanding with
any person with respect to any securities of the Company, including, but not
limited to, joint ventures, loan or option arrangements, puts or calls,
guarantees against loss or guarantees of profit, division of losses or profits
or the giving or withholding of proxies, (iv) no Nominee or any of his or her
associates has any arrangement or understanding with any person pursuant to
which he or she was or is to be selected as a director, nominee or officer of
the Company, and (v) there is no other information with respect to any Nominee
that is required to be disclosed in solicitations of proxies for election of
directors or is otherwise required by the rules and regulations of the
Securities and Exchange Commission promulgated under the Securities Exchange Act
of 1934, as amended. Matters disclosed in any part of this Notice, including the
Annexes, should be deemed disclosed for all purposes of this Notice. The written
consent of each Nominee to be nominated and to serve as a director of the
Company is attached hereto.
Cede has been informed by Kensington that the following is a
description of all arrangements or understandings between Kensington and each
Nominee and any other person, with respect to the proposals contained in this
Notice, the election of each Nominee as a director, and actions to be proposed
or taken by each Nominee if elected as a director:
Kensington has agreed to indemnify each Nominee from and
against any losses incurred by such Nominee resulting from, relating to or
arising out of the nomination of such Nominee for election as a director of the
Company at the Annual Meeting.
Each Nominee has agreed with Kensington to be named as a
nominee for election as a director of the Company at the Annual Meeting (or at
any special meeting of the shareholders called for that purpose).
Cede has been informed by Kensington that: (i) the proposal
included in this Notice is a proper matter for shareholder action and (ii) this
Notice sets forth information which
<PAGE> 3
is equivalent to the information that would be required under the proxy
solicitation rules of the Securities and Exchange Commission if proxies were
solicited for shareholder consideration of the proposals included in this Notice
at a meeting of shareholders, including information required if proxies were
solicited for the election of the Nominees as directors of the Company.
While Cede is furnishing this Notice as the stockholder of
record of the shares of Common Stock, it does so at the request of Participant
and only as a nominal party for the true party in interest, Kensington. Cede has
no interest in this matter other than to take those steps which are necessary to
ensure that Kensington is not denied its rights as the beneficial owner of
Common Stock, and Cede assumes no further responsibility in this matter.
Sincerely yours,
Cede & Co.
By: /s/ John L. Scheuermann
--------------------------------
John L. Scheuermann, partner
Enclosures: Annexes A-E
<PAGE> 4
ANNEX A
Name: ANDREW MILLER (the "Nominee")
Age: 45
Business address: 1800 Sherman Avenue, Suite 100
Evanston, IL 60201
Residence address: 920 Woodland Drive
Glenview, IL 60025
Set forth below is a brief description of the Nominee's business
experience during the past five years, including the Nominee's principal
occupations and employment during the past five years; the name and principal
business of any corporation or other organization in which such occupations and
employment were carried on and the Nominee's current principal occupation or
employment.
1996-Present: President
Miller Capital Advisory, Inc.
Chicago, IL
(Advisory business focused on real estate
capital markets and asset management)
1981-1995: First Vice President, Capital Markets
Homart Development Co.
Chicago, IL
(Consultant on acquisition, disposition and
general asset management of real estate)
None of the entities listed above is a parent, subsidiary or other
affiliate of Malan Realty Investors, Inc. The Nominee does not hold any
positions or offices with Malan Realty Investors, Inc.
The Nominee currently is a director of the following companies that
have a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") or that are subject to
the requirements of Section 15(d) of such Act or that are registered as an
investment company under the Investment Company Act of 1940:
None.
Set forth below are the number of shares of capital stock of Malan
Realty Investors, Inc. beneficially owned by the Nominee within the meaning of
SEC Rule 13d-1 and earliest date of acquisition of such capital stock:
None.
<PAGE> 5
The Nominee has entered into an Indemnification Agreement with
Kensington. The Indemnification Agreement includes the written consent of the
Nominee to serve as director of Malan Realty Investors, Inc. if nominated and
elected as a director. For a description of the arrangements and understanding
between the Nominee and Kensington contained within the Indemnification
Agreement with respect to the proposals contained in the Notice, the election of
the Nominee as a director, and actions to be proposed or taken by the Nominee if
elected as director, see the Notice to which this Annex is attached.
<PAGE> 6
ANNEX B
Name: JEFFREY LEWIS (the "Nominee")
Age: 54
Business address: 2400 Financial Center
Seattle, WA 98161
Residence address: 9712 SW 188th Street
Vashon Island, Washington 98070
Set forth below is a brief description of the Nominee's business
experience during the past five years, including the Nominee's principal
occupations and employment during the past five years; the name and principal
business of any corporation or other organization in which such occupations and
employment were carried on and the Nominee's current principal occupation or
employment.
1998-Present: Vice President
Kennedy Associates Real Estate Counsel, Inc.
Seattle, Washington
(Real estate investing)
1996-1998: Principal Investment Officer
California Public Employees' Retirement System
Sacramento, California
(Managed the fund's national office portfolio)
1992-1996 Consultant
BARD Consulting
Sacramento, California
(Consulting)
None of the entities listed above is a parent, subsidiary or other
affiliate of Malan Realty Investors, Inc. The Nominee does not hold any
positions or offices with Malan Realty Investors, Inc.
The Nominee currently is a director of the following companies that
have a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") or that are subject to
the requirements of Section 15(d) of such Act or that are registered as an
investment company under the Investment Company Act of 1940:
None.
Set forth below are the number of shares of capital stock of Malan
Realty Investors, Inc. beneficially owned by the Nominee within the meaning of
SEC Rule 13d-1 and earliest date of acquisition of such capital stock:
None.
<PAGE> 7
The Nominee has entered into an Indemnification Agreement with
Kensington. The Indemnification Agreement includes the written consent of the
Nominee to serve as director of Malan Realty Investors, Inc. if nominated and
elected as a director. For a description of the arrangements and understanding
between the Nominee and Kensington contained within the Indemnification
Agreement with respect to the proposals contained in the Notice, the election of
the Nominee as a director, and actions to be proposed or taken by the Nominee if
elected as director, see the Notice to which this Annex is attached.
<PAGE> 8
ANNEX C
Name: JILL HOLUP (the "Nominee")
Age: 36
Business address: 5949 Sherry Lane, Suite 1600
Dallas, TX 75225
Residence address: 6747 Lupton Drive
Dallas, TX 75225
Set forth below is a brief description of the Nominee's business
experience during the past five years, including the Nominee's principal
occupations and employment during the past five years; the name and principal
business of any corporation or other organization in which such occupations and
employment were carried on and the Nominee's current principal occupation or
employment.
1997-Present: Partner and Portfolio Manager
John McStay Investment Counsel
Dallas, Texas
(Investment management firm)
1996-1997: First Vice President, Equity Research
McDonald & Company Securities
Cleveland, Ohio
(Investment bank)
1994-1996: Senior Securities Analyst
RREEF Real Estate Securities Advisors
San Francisco, California
(Investment advisor to primarily pension funds)
None of the entities listed above is a parent, subsidiary or other
affiliate of Malan Realty Investors, Inc. The Nominee does not hold any
positions or offices with Malan Realty Investors, Inc.
The Nominee currently is a director of the following companies that
have a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") or that are subject to
the requirements of Section 15(d) of such Act or that are registered as an
investment company under the Investment Company Act of 1940:
None.
Set forth below are the number of shares of capital stock of Malan
Realty Investors, Inc. beneficially owned by the Nominee within the meaning of
SEC Rule 13d-1 and earliest date of acquisition of such capital stock:
None.
<PAGE> 9
The Nominee has entered into an Indemnification Agreement with
Kensington. The Indemnification Agreement includes the written consent of the
Nominee to serve as director of Malan Realty Investors, Inc. if nominated and
elected as a director. For a description of the arrangements and understanding
between the Nominee and Kensington contained within the Indemnification
Agreement with respect to the proposals contained in the Notice, the election of
the Nominee as a director, and actions to be proposed or taken by the Nominee if
elected as director, see the Notice to which this Annex is attached.
<PAGE> 10
ANNEX D
Name: PAUL GRAY II (the "Nominee")
Age: 35
Business address: 4 Orinda Way, Suite 220D
Orinda, CA 94563
Residence address: 969 Calle Verde
Martinez, CA 94553
Set forth below is a brief description of the Nominee's business
experience during the past five years, including the Nominee's principal
occupations and employment during the past five years; the name and principal
business of any corporation or other organization in which such occupations and
employment were carried on and the Nominee's current principal occupation or
employment.
1994-Present: Portfolio Manager
Kensington Investment Group, Inc.
Orinda, California
(Investment advisors to five
separate investment accounts and the
general partner to ten limited
partnership investment partnerships)
None of the entities listed above is a parent, subsidiary or other
affiliate of Malan Realty Investors, Inc. The Nominee does not hold any
positions or offices with Malan Realty Investors, Inc.
The Nominee currently is a director of the following companies that
have a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") or that are subject to
the requirements of Section 15(d) of such Act or that are registered as an
investment company under the Investment Company Act of 1940:
None.
Set forth below are the number of shares of capital stock of Malan
Realty Investors, Inc. beneficially owned by the Nominee within the meaning of
SEC Rule 13d-1 and earliest date of acquisition of such capital stock:
None.
The Nominee has entered into an Indemnification Agreement with
Kensington. The Indemnification Agreement includes the written consent of the
Nominee to serve as director of Malan Realty Investors, Inc. if nominated and
elected as a director. For a description of the arrangements and understanding
between the Nominee and Kensington contained within the Indemnification
Agreement with respect to the proposals contained in the Notice, the election of
the Nominee as a director, and actions to be proposed or taken by the Nominee if
elected as director, see the Notice to which this Annex is attached.
<PAGE> 11
ANNEX E
Name: John Patrick Kramer (the "Nominee")
Age: 43
Business address: 4 Orinda Way, Suite 220D
Orinda, CA 94563
Residence address: 120 Windsor Ave.
Kensington, CA 94708
Set forth below is a brief description of the Nominee's business
experience during the past five years, including the Nominee's principal
occupations and employment during the past five years; the name and principal
business of any corporation or other organization in which such occupations and
employment were carried on and the Nominee's current principal occupation or
employment.
1993-Present: President
Kensington Investment Group, Inc.
Orinda, California
(Investment advisors to five
separate investment accounts and the
general partner to ten limited
partnership investment partnerships)
None of the entities listed above is a parent, subsidiary or other
affiliate of Malan Realty Investors, Inc. The Nominee does not hold any
positions or offices with Malan Realty Investors, Inc.
The Nominee currently is a director of the following companies that
have a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") or that are subject to
the requirements of Section 15(d) of such Act or that are registered as an
investment company under the Investment Company Act of 1940:
None.
Set forth below are the number of shares of capital stock of Malan
Realty Investors, Inc. beneficially owned by the Nominee within the meaning of
SEC Rule 13d-1 and earliest date of acquisition of such capital stock:
None.
The Nominee has entered into an Indemnification Agreement with
Kensington. The Indemnification Agreement includes the written consent of the
Nominee to serve as director of Malan Realty Investors, Inc. if nominated and
elected as a director. For a description of the arrangements and understanding
between the Nominee and Kensington contained within the Indemnification
Agreement with respect to the proposals contained in the Notice, the election of
the Nominee as a director, and actions to be proposed or taken by the Nominee if
elected as director, see the Notice to which this Annex is attached.
<PAGE> 1
EXHIBIT 4
FORM OF INDEMNIFICATION AGREEMENT
AGREEMENT dated as of March 10, 2000 between Kensington
Investment Group, Inc. ("Kensington") and the undersigned nominee (the
"Indemnitee").
WHEREAS, Kensington has asked and the Indemnitee has agreed to
be a nominee for election to the Board of Directors of Malan Realty Investors,
Inc. (the "Company") at the 2000 annual meeting of stockholders of the Company
(the "Annual Meeting"); and
WHEREAS, Kensington and/or its affiliates may, in appropriate
circumstances, solicit proxies from the stockholders of the Company in support
of the Indemnitee's election as a director of the Company at the Annual Meeting;
NOW, THEREFORE, in consideration of the foregoing and with the
understanding on the part of Kensington that the Indemnitee is relying on this
Agreement in agreeing to be a nominee as aforesaid and for other and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the
following defined terms have the meanings indicated below:
"Claim" means any threatened, pending or completed action,
suit or proceeding (whether civil, criminal, administrative,
formal or informal investigative or other), whether instituted
by Kensington, any stockholder of the Company, the Company or
any other party (other than by the Indemnitee), or any inquiry
or investigation that the Indemnitee in good faith believes
might lead to the institution of any such action, suit or
proceeding.
"Expenses" means all reasonable attorney's fees and all other
reasonable fees, costs, expenses and obligations paid or
incurred in connection with the election of directors at the
Annual Meeting or related matters, including without
limitation, investigating, defending or participating (as a
party, witness or otherwise) in (including on appeal), or
preparing to defend or participate in, any Claim relating to
any Indemnifiable Event.
"Indemnifiable Event" means any event or occurrence relating
to or directly or indirectly arising out of, or any action
taken or omitted to be taken in connection with the election
of directors at the Annual Meeting or related matters, but not
in the Indemnitee's capacity as a director of the Company if
the Indemnitee is so elected.
<PAGE> 2
"Loss" means any and all damages, judgments, fines, penalties,
amounts paid or payable in settlement, deficiencies, losses
and Expenses (including all interest, assessments, and other
charges paid or payable in connection with or respect of such
Losses).
2. Agreement to Serve as a Nominee. (a) The Indemnitee hereby
consents to being named as a nominee for election as a director of the Company
at the Annual Meeting (or any special meeting of the stockholders of the Company
called for that purpose) in any materials submitted by or on behalf of
Kensington to the Company or filed by or on behalf of Kensington or the Company
with the Securities and Exchange Commission, and further consents to serve as a
director of the Company if elected at the Annual Meeting (or any special meeting
of the stockholders of the Company called for that purpose), upon the
Indemnitee's reasonable satisfaction that the Company maintains customary
indemnification provisions for directors and has in effect customary insurance
coverage for directors. The indemnification provisions of this Agreement will
continue in effect even if the Indemnitee no longer serves as a director
following the Annual Meeting.
(b) Notwithstanding anything to the contrary contained in
paragraph (a) above, the Indemnitee hereby agrees with Kensington that the
Indemnitee does not and will not (unless previously approved by Kensington in
writing) consent to 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 party (including the
Board of Directors of the Company or its Nominating Committee) other than
Kensington unless such slate includes a number of nominees proposed by
Kensington sufficient to constitute a majority of the members of the Board of
Directors of the Company.
3. Indemnification. (a) In the event the Indemnitee in his
capacity as nominee for election to the Company's Board of Directors at the
Annual Meeting was, is or becomes a party to or other participant in, or is
threatened to be made a party to or other participant in, a Claim by reason of
(or arising or allegedly arising in any manner out of or relating to in whole or
in part) an Indemnifiable Event or Indemnitee's being a nominee for election to
the Company's Board of Directors at the Annual Meeting, Kensington to the
fullest extent permitted by applicable law shall indemnify and hold harmless the
Indemnitee from and against any and all Losses suffered, incurred or sustained
by the Indemnitee or to which the Indemnitee becomes subject, resulting from,
arising out of or relating to such Claim (it being understood that except as
provided in Section 3(c) with respect to Expenses, reimbursements of any such
Losses shall be made as soon as practicable but in any event no later than 15
days after written request (a "Claim Notice") is made to Kensington accompanied
by supporting documentation). The Indemnitee shall give Kensington written
notice of any Claim (accompanied by such reasonable supporting documentation as
may be in the Indemnitee's possession) as soon as practicable after the
Indemnitee becomes aware thereof; provided that the failure of the Indemnitee to
give such notice shall not relieve Kensington of its indemnification
<PAGE> 3
obligations under this Agreement, except to the extent that such failure
materially prejudices the rights of Kensington.
(b) In the case of the commencement of any action against the
Indemnitee in respect of which the Indemnitee may seek indemnification from
Kensington hereunder, Kensington will be entitled to participate therein,
including, without limitation, the negotiation and approval of any settlement of
such action and, to the extent that Kensington may wish to assume the defense
thereof, with counsel reasonably satisfactory to the Indemnitee, and after
notice from Kensington to the Indemnitee of Kensington's election so to assume
the defense thereof, together with Kensington's written acknowledgement and
agreement that it will fully indemnify the Indemnitee under the terms of this
Agreement with regard to such Claim, Kensington will not be liable to the
Indemnitee under this Agreement for any Expenses subsequently incurred by the
Indemnitee in connection with the defense thereof other than reasonable costs of
investigation and preparation therefor (including, without limitation, appearing
as a witness and reasonable fees and expenses of legal counsel in connection
therewith). If in any action for which indemnity may be sought hereunder
Kensington shall not have timely assumed the defense thereof with counsel
reasonably satisfactory to the Indemnitee, or the Indemnitee shall have been
advised by counsel that it would constitute a conflict of interest for the same
counsel to represent both the Indemnitee and Kensington in such action, or if
the Indemnitee may have separate or additional defenses with regard to such
action, the Indemnitee shall have the right to employ counsel for the Indemnitee
reasonably satisfactory to Kensington in such action, in which event Kensington
shall reimburse the Indemnitee for all reasonable legal fees and expenses
incurred by the Indemnitee in connection with the defense thereof. Kensington
shall in no event be liable for any settlement of any action effected without
its prior written consent (which consent shall not be unreasonably withheld,
delayed and conditioned). Kensington shall not settle any Claim in any manner
that would impose any expense, penalty, obligation or limitation on the
Indemnitee, or would contain language other than a recitation of any amounts to
be paid in settlement, the fact of the settlement or the underlying claim
relating to the settlement, that could be viewed, in the sole discretion of the
Indemnitee, as an acknowledgement of wrongdoing on the part of the Indemnitee or
as detrimental to the reputation of the Indemnitee, without the Indemnitee's
prior written consent.
(c) The Indemnitee's right to indemnification in Section 3 of
this Agreement shall include the right of the Indemnitee to be advanced by
Kensington any Expenses incurred in connection with any Indemnifiable Event as
such Expenses are incurred by the Indemnitee; provided, however, that all
amounts advanced in respect of such Expenses shall be repaid to Kensington by
the Indemnitee if it shall ultimately be determined in a final judgment without
further right to appeal by a court of appropriate jurisdiction that the
Indemnitee is not entitled to be indemnified for such Expenses because their
Loss arose as a result of the Indemnitee's recklessness or willful misconduct.
<PAGE> 4
4. Partial Indemnity. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by Kensington for some or a
portion of any Loss, but not for all of the total amount thereof, Kensington
shall nevertheless indemnify the Indemnitee for the portion thereof to which the
Indemnitee is entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful on the merits
or otherwise in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including
dismissal without prejudice, the Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
5. No Presumptions. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval), or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
6. Nonexclusivity. The rights of the Indemnitee hereunder
shall be in addition to any other rights the Indemnitee may have under any
bylaw, insurance policy, Delaware corporate law or otherwise. To the extent that
a change in applicable law (whether by statute or judicial decision) would
permit greater indemnification by agreement than would be afforded currently
under this Agreement, it is the intent of the parties hereto that the Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by such change.
7. Amendment, etc. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
8. Subrogation. In the event of any payment under this
Agreement, Kensington shall be subrogated to the extent of such payment to all
of the rights of recovery of the Indemnitee, and the Indemnitee shall execute
all papers reasonably required and shall take such action that may be reasonably
necessary to secure such rights, including the execution of such documents
reasonably necessary to enable Kensington effectively to bring suit to enforce
such rights.
9. No Duplication of Payments. Kensington shall not be liable
under this Agreement to make any payment in connection with a Claim made against
the Indemnitee to the extent the Indemnitee has otherwise actually received
payment (under any insurance policy, bylaw or otherwise) of the amounts
otherwise indemnifiable hereunder; provided that, if the Indemnitee for any
reason is required to disgorge any payment actually received, Kensington shall
be obligated to pay such amount to the Indemnitee in accordance with the other
terms of this Agreement (i.e., disregarding the terms of this Section 9).
<PAGE> 5
10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of laws.
11. Counterparts. This Agreement may be executed in one or
more counterparts for the convenience of the parties hereto, all of which
together shall constitute one and the same instrument.
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
KENSINGTON INVESTMENT GROUP, INC.
By:
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Name:
Title
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