<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>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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.
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(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:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[KENSINGTON INVESTMENT LOGO]
April 7, 2000
Dear Fellow Shareholders:
We are the beneficial owners of 9.9% 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 management. 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.
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,
Georgeson Shareholder Communications, Inc. at (800) 223-2064.
Thank you for your consideration of this matter.
Sincerely yours,
KENSINGTON INVESTMENT GROUP, INC.
<PAGE> 3
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 April 7, 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 Hilton Northfield,
5500 Crooks Rd., Troy, Michigan, 48098 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 MAY HAVE RECEIVED A PROXY CARD FROM THE COMPANY. PLEASE RETURN ONLY
KENSINGTON'S GOLD PROXY CARD AND DO NOT RETURN ANY COMPANY WHITE 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 512,160 shares of Common Stock (or approximately 9.9% of the shares
issued and outstanding). Malan's Articles of Incorporation contain a 9.9% limit
on beneficial ownership of Common Stock. However, the Articles of Incorporation
contain a provision permitting Malan's Board of Directors to exempt Kensington
from this ownership limit. Kensington intends to request that the Malan Board
grant this exemption. Although no assurance can be given, if the exemption is
granted, Kensington would be the beneficial owner of 533,550 shares of Common
Stock or approximately 10.3% 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.
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.
- 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.
<PAGE> 4
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". Although often described as protecting
Shareholders from coercive or unfair acquisition offers, it has also been argued
that 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. Malan claimed in a
press release that the Poison Pill "is designed to help the board of directors
assure that all Malan shareholders are treated fairly in any unsolicited
takeover attempt." Nevertheless, 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 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. Kensington requested that the Board be increased to eight and include
three of its
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nominees. 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. Kensington believes that a
single nominee is merely token representation and would result in an isolated
director without any real influence.
- 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. After the announcement, Kensington asked Malan to keep
Kensington informed about the progress of Malan's review. Kensington and Malan
briefly discussed many possible strategic alternatives that Malan was
considering in broad, general terms. No specific proposals were discussed.
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 price has declined from $13.56 prior to the December
20th announcement to $12.50 on April 4, 2000.
The Kensington Nominees Intend to 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.
- 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.
We believe that they are highly accomplished executives who are well-experienced
at investment decision making, and capital markets activities. We believe that
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 intend to embark on a strategy designed to focus
management on realizing the benefits of the current business and exploring and
evaluating alternatives for the Company. The Kensington Nominees do not
currently have a specific plan to enhance shareholder value. They intend to
evaluate strategic alternatives and to consider other options to enhance
shareholder value after they are elected to the Board and have access to the
Company's information.
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 POSTAGE PAID ENVELOPE PROVIDED.
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<PAGE> 6
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:
Georgeson Shareholder Communications, Inc.
17 State Street, 10th Floor
New York, NY 10004
Call Toll Free
(800) 223-2064
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 5,173,342 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 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. Kensington understands that, due to its internal standards relating to
a change in control, Deloitte & Touche LLP may not be able to continue as the
Company's independent auditors and Malan may be required to engage new
independent auditors. 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.
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<PAGE> 7
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 WHITE 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 POSTAGE PAID
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.
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
ANDREW MILLER, age 45, has been in the real estate business since 1981. He
is currently the President of Miller Capital Advisory, Inc. ("MCA"), an advisory
business focused on real estate capital markets and asset management. Mr. Miller
built MCA and its affiliates on his background and reputation as a
multi-faceted, highly experienced investment real estate professional and
through word-of-mouth client referrals. As leader of the MCA business group, Mr.
Miller has secured repeat consulting assignments serving a growing group of
prominent public pension plan sponsors. Mr. Miller is responsible for the firm's
strategic and marketing initiatives as well as delivery of services. Mr.
Miller's practice has focused on providing his clients with impartial
assessments of their real estate holdings and strategic action plans. Miller has
led several major transactions for the benefit of the firm's clients, including
property sales and joint venture restructurings.
Prior to forming MCA, Mr. Miller was employed by Homart Development
Corporation for 15 years. Homart was one of the nation's leading developers and
owners of investment properties prior to its liquidation in 1995. As Homart's
First Vice President, Capital Markets, Mr. Miller was responsible for asset
disposition, acquisition, financing and joint venture structuring activities. In
this capacity, Mr. Miller cultivated institutional investor relations and
directed capital raising transactions totaling over $3 billion. Mr. Miller
served the early years of his Homart career in various managerial capacities
including acquisitions analysis, corporate planning, financial control and
accounting, and corporate finance and treasury.
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<PAGE> 8
Mr. Miller's background working on challenging capital markets and real
estate joint venture initiatives is extensive. As a principal of Homart, Mr.
Miller successfully negotiated dispositions of partial interests in major
commercial properties to both corporate partners and to such institutional
investors as the State of Wisconsin Investment Board, JMB Group Trust V and The
Aetna. Mr. Miller also negotiated numerous joint venture agreements associated
with these dispositions and with Homart's separate acquisition activities. As
the leader of MCA, Mr. Miller has provided both general and specific joint
venture structuring advice to the firm's clients, including CalPERS, the Arizona
State Retirement System and the State of Michigan Retirement System.
Mr. Miller received his Master's Degree from the University of Chicago and
holds a Bachelor of Science degree from the University of Illinois, Urbana.
JEFFREY LEWIS, age 54, has been in the real estate business since 1971. He
is currently a Vice President at Kennedy Associates Real Estate Counsel, Inc.
("KAREC"), a real estate investment firm. Mr. Lewis joined KAREC in 1998 and is
responsible for managing one of the two KAREC national asset management teams in
addition to his direct responsibility for several properties.
Prior to joining the firm, Mr. Lewis was most recently a Principal
Investment Officer at the California Public Employees' Retirement System
(CalPERS) where he had general responsibility for the fund's national office
portfolio of 35 properties totaling over 15 million square feet and values of
approximately $1.4 billion. For the eight previous years, Mr. Lewis directed a
number of activities at CalPERS, including the design and implementation of the
very successful single family development financing program into which CalPERS
has committed over $800 million and which has earned returns on investment in
excess of 20%.
Prior to his association with CalPERS, Mr. Lewis operated a real estate
development company that developed, built and managed over 650 apartment units
in California and Nevada and in which he was the sole stockholder.
Mr. Lewis received his Master's Degree from Stanford University and holds a
Bachelor of Science degree in economics from The University of Nevada, Las
Vegas. He is a licensed real estate broker in California and Nevada and holds a
general contracting license in California.
JOHN P. KRAMER(1), age 42, has been in the real estate business since 1985.
He is President and co-founder of Kensington Investment Group, Inc., a
registered investment advisor engaged in the business of managing investments in
real estate securities. He is involved in all aspects of the organization and is
primarily responsible for directing the firm's investment policies.
Mr. Kramer was previously Executive Vice President at Liquidity Fund
Investment Corporation where he was responsible for directing the research,
marketing and trading activities of the firm.
Prior to joining Liquidity Fund in 1985, Mr. Kramer was an associate with
Federal Reserve Chairman Allen Greenspan's economic consulting firm,
Townsend-Greenspan & Co. in New York City, and an account executive at Sutro &
Co., Inc. and Prudential-Bache Securities in San Francisco.
Mr. Kramer received his Masters Degree in Business Administration from the
University of California Berkeley in 1986, receiving an award for his work in
real estate finance while at the Business School. He received a Bachelor of Arts
in 1980 from the State University of New York, Oneonta, in Economics, graduating
as class valedictorian.
JILL HOLUP, age 36, has been in the real estate business since 1985. She is
a Partner at John McStay Investment Counsel, an investment management firm. Her
responsibilities include research, portfolio management and new business
development. Previously, Ms. Holup was a First Vice President, Equity Research
at McDonald & Company Securities (an investment bank) from 1996 through 1997.
- ---------------
(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.
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From 1994 to 1996 she was a Senior Securities Analyst with RREEF Real
Estate Securities Advisers, where she specialized in REIT investing. Prior to
joining RREEF, Ms. Holup held the position of Portfolio Manager with Liquidity
Financial Group. While she was with Liquidity Financial Group from 1988 to 1994
she was responsible for research and portfolio management with respect to the
company's partnership and REIT investments. From 1985 to 1988 she was involved
in the real estate field in capacities including leasing, property management,
development and lending.
Ms. Holup received her Master's Degree in Business Administration from the
Haas School of Business at the University of California at Berkeley. She earned
her bachelor's degree in finance at the University of Texas, El Paso in 1985.
PAUL GRAY, age 34, has been in the real estate business since 1988. He is
Executive Vice President and co-founder of Kensington Investment Group, Inc., a
registered investment advisor engaged in the business of managing investments in
real estate securities. Mr. Gray has overall responsibility for investment
decision making on behalf of Kensington's portfolios and is the director of
Kensington's research group.
Mr. Gray was previously a partner of Golden State Financial Services, a
mortgage brokerage company. From 1988 to 1992, Mr. Gray was a senior analyst at
Liquidity Fund Investment Corporation where he managed the firm's REIT
portfolios and developed the models used to evaluate limited partnerships. He
was simultaneously Director of Research for the National Real Estate Index where
he was instrumental in designing the methodology and systems used to track real
estate values throughout the United States.
Mr. Gray received a Bachelor of Science in Finance and Real Estate in 1988
from the Haas School of Business at the University of California at Berkeley. He
is a licensed real estate broker in the state of California.
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.
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.
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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
President
Miller Capital Advisory, Inc.
1800 Sherman Avenue, Suite 100
Evanston, IL 60201
JEFFREY LEWIS
Vice President
Kennedy Associates Real Estate Counsel, Inc.
2400 Financial Center
Seattle, WA 98161
JILL HOLUP
Partner and Portfolio Manager
John McStay Investment Counsel
5949 Sherry Lane, Suite 1600
Dallas, TX 75225
PAUL GRAY
Portfolio Manager
Kensington Investment Group, Inc.
4 Orinda Way, Suite 220D
Orinda, CA 94563
JOHN P. KRAMER
President
Kensington Investment Group, Inc.
4 Orinda Way, Suite 220D
Orinda, CA 94563
JOEL S. BEAM
Vice President
Kensington Investment Group, Inc.
4 Orinda Way, Suite 220D
Orinda, CA 94563
IRA R. GOLTRA
Senior Analyst
Kensington Investment Group, Inc.
4 Orinda Way, Suite 220D
Orinda, CA 94563
- ---------------
(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 STOCK
DATE OF PURCHASED (P)
TRANSACTION OR SOLD (S)
- ----------- -------------
<S> <C>
3/29/98.............. 5,000(P)
3/31/98.............. 7,500(P)
4/2/98............... 5,000(P)
4/3/98............... 3,500(P)
4/13/98.............. 2,000(P)
4/14/98.............. 1,000(P)
4/15/98.............. 100(P)
4/22/98.............. 4,200(P)
4/27/98.............. 1,500(P)
4/28/98.............. 100(P)
5/14/98.............. 3,000(S)
5/27/98.............. 1,000(P)
6/3/98............... 700(P)
6/24/98.............. 45,000(P)
6/26/98.............. 20,000(P)
6/29/98.............. 5,000(P)
6/30/98.............. 7,000(P)
7/2/98............... 10,900(P)
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF
COMMON STOCK
DATE OF PURCHASED (P)
TRANSACTION OR SOLD (S)
- ----------- -------------
<S> <C>
7/6/98............... 1,500(P)
7/9/98............... 5,000(P)
7/10/98.............. 2,000(P)
7/14/98.............. 2,000(P)
7/15/98.............. 10,000(P)
7/17/98.............. 8,100(P)
7/21/98.............. 500(P)
7/23/98.............. 5,000(P)
7/24/98.............. 13,000(P)
7/27/98.............. 12,000(P)
7/28/98.............. 10,000(P)
7/30/98.............. 7,000(P)
7/31/98.............. 7,000(P)
8/11/98.............. 4,000(P)
8/12/98.............. 3,100(P)
8/21/98.............. 1,000(P)
8/31/98.............. 5,000(P)
9/2/98............... 2,000(P)
</TABLE>
<TABLE>
<S> <C>
<CAPTION>
AMOUNT OF
COMMON STOCK
DATE OF PURCHASED (P)
TRANSACTION OR SOLD (S)
- ----------- -------------
<S> <C>
9/4/98............... 500(P)
9/8/98............... 2,000(P)
9/9/98............... 1,000(P)
9/10/98.............. 100(P)
9/15/98.............. 2,000(P)
9/21/98.............. 500(P)
9/22/98.............. 500(P)
9/25/98.............. 500(P)
9/30/98.............. 8,000(P)
10/7/98.............. 10,500(S)
10/13/98............. 500(S)
10/19/98............. 200(S)
10/20/98............. 1,600(S)
10/22/98............. 1,000(S)
10/27/98............. 1,000(S)
10/29/98............. 1,000(S)
11/2/98.............. 1,400(S)
11/5/98.............. 500(S)
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
AMOUNT OF
COMMON STOCK
DATE OF PURCHASED (P)
TRANSACTION OR SOLD (S)
- ----------- -------------
<S> <C>
11/6/98.............. 1,000(S)
11/10/98............. 100(P)
11/12/98............. 500(S)
11/16/98............. 1,000(S)
11/24/98............. 500(S)
12/8/98.............. 500(P)
12/14/98............. 5,000(S)
12/18/98............. 5,000(S)
12/24/98............. 600(P)
12/29/98............. 100(P)
12/30/98............. 200(P)
12/31/98............. 7,100(P)
1/4/99............... 1,000(S)
1/5/99............... 10,000(S)
1/5/99............... 500(P)
1/8/99............... 2,000(S)
1/12/99.............. 3,500(P)
1/13/99.............. 4,500(S)
2/3/99............... 500(P)
2/10/99.............. 5,000(P)
2/11/99.............. 5,000(S)
2/18/99.............. 100(S)
2/23/99.............. 2,000(S)
2/25/99.............. 500(P)
3/3/99............... 2,500(P)
3/4/99............... 15,200(P)
3/5/99............... 100(P)
3/8/99............... 200(P)
3/9/99............... 6,000(P)
3/15/99.............. 1,000(P)
3/16/99.............. 1,000(P)
3/17/99.............. 200(P)
3/22/99.............. 4,800(S)
3/24/99.............. 7,000(S)
3/26/99.............. 2,000(S)
3/29/99.............. 2,300(P)
3/30/99.............. 2,000(P)
3/30/99.............. 500(S)
3/31/99.............. 3,100(S)
4/1/99............... 2,500(S)
4/5/99............... 5,000(S)
4/6/99............... 2,000(S)
4/7/99............... 7,600(S)
4/8/99............... 1,000(S)
4/13/99.............. 1,600(P)
4/21/99.............. 2,300(P)
4/23/99.............. 800(P)
4/26/99.............. 1,500(S)
4/29/99.............. 500(S)
4/30/99.............. 6,300(P)
5/3/99............... 100(P)
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF
COMMON STOCK
DATE OF PURCHASED (P)
TRANSACTION OR SOLD (S)
- ----------- -------------
<S> <C>
5/13/99.............. 3,000(P)
5/14/99.............. 500(P)
5/17/99.............. 100(P)
5/18/99.............. 2,000(P)
6/1/99............... 500(P)
6/4/99............... 7,000(P)
6/10/99.............. 1,000(P)
6/11/99.............. 1,000(P)
6/14/99.............. 7,000(P)
6/15/99.............. 1,400(P)
6/16/99.............. 200(P)
6/17/99.............. 1,000(P)
6/21/99.............. 400(S)
6/22/99.............. 200(P)
6/23/99.............. 5,000(S)
6/23/99.............. 200(P)
6/24/99.............. 700(P)
6/25/99.............. 1,000(P)
6/28/99.............. 500(P)
6/29/99.............. 4,100(P)
6/30/99.............. 3,500(P)
7/2/99............... 100(P)
7/8/99............... 500(P)
7/22/99.............. 100(P)
7/30/99.............. 100(P)
8/3/99............... 100(P)
8/19/99.............. 2,450(P)
8/23/99.............. 1,000(P)
8/24/99.............. 10,000(P)
9/9/99............... 7,400(P)
9/13/99.............. 8,000(P)
9/14/99.............. 3,000(S)
9/14/99.............. 1,000(P)
9/15/99.............. 2,000(S)
9/16/99.............. 2,500(S)
9/17/99.............. 4,000(S)
9/20/99.............. 200(P)
9/21/99.............. 500(P)
9/23/99.............. 7,500(P)
9/23/99.............. 8,000(S)
9/24/99.............. 3,000(S)
9/27/99.............. 500(P)
9/28/99.............. 100(P)
9/30/99.............. 15,700(P)
10/1/99.............. 500(S)
10/4/99.............. 600(P)
10/14/99............. 2,000(S)
10/26/99............. 200(P)
11/1/99.............. 400(S)
11/4/99.............. 1,000(P)
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF
COMMON STOCK
DATE OF PURCHASED (P)
TRANSACTION OR SOLD (S)
- ----------- -------------
<S> <C>
11/8/99.............. 500(S)
11/9/99.............. 500(S)
11/10/99............. 1,200(P)
11/16/99............. 100(P)
11/17/99............. 100(P)
11/19/99............. 100(P)
11/22/99............. 200(P)
11/23/99............. 3,700(P)
11/24/99............. 100(P)
11/26/99............. 800(P)
11/29/99............. 100(P)
11/30/99............. 100(P)
12/1/99.............. 6,200(P)
12/14/99............. 100(P)
12/16/99............. 1,000(P)
12/17/99............. 1,100(P)
12/20/99............. 100(P)
12/21/99............. 1,000(P)
12/22/99............. 800(P)
12/23/99............. 500(P)
12/27/99............. 1,500(P)
12/29/99............. 4,000(P)
12/30/99............. 2,000(P)
12/31/99............. 1,500(P)
1/05/00.............. 500(P)
1/07/00.............. 500(P)
1/10/00.............. 1,000(P)
1/24/00.............. 700(P)
1/25/00.............. 5,000(S)
1/28/00.............. 200(P)
2/01/00.............. 500(P)
2/02/00.............. 500(P)
2/07/00.............. 500(P)
2/08/00.............. 500(P)
2/09/00.............. 500(P)
2/14/00.............. 500(P)
2/16/00.............. 2,000(P)
2/22/00.............. 500(P)
2/23/00.............. 500(P)
2/25/00.............. 2,200(P)
2/28/00.............. 1,300(P)
3/23/00.............. 3,500(P)
3/24/00.............. 5,000(P)
3/27/00.............. 1,300(P)
3/28/00.............. 9,000(P)
3/29/00.............. 3,100(P)
3/30/00.............. 3,500(P)
3/31/00.............. 11,800(P)
3/31/00.............. 2,000(S)
4/3/00............... 2,000(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 $400,000 for its
solicitation of proxies, including expenditures for attorneys, solicitors and
advertising, printing, transportation and related expenses. As of April 6, 2000,
Kensington has incurred proxy solicitation expenses of approximately $200,000.
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 Georgeson
Shareholder Communication ("Georgeson") at estimated fees of not more than
$40,000 in the aggregate, plus reasonable out-of-pocket expenses, to participate
in the solicitation of proxies and revocations. Kensington also has agreed to
indemnify Georgeson against certain liabilities and expenses. Kensington
estimates that approximately 25 employees of Georgeson will be involved in the
solicitation of proxies on behalf of Kensington.
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.
April 7, 2000
10
<PAGE> 13
YOUR VOTE IS IMPORTANT
1. Kensington Investment Group urges you to DISCARD the WHITE proxy card
recently sent to you. A "WITHHOLD AUTHORITY" vote on the White proxy card is
not a vote for Kensington's nominees. To vote FOR our nominees you MUST
execute a GOLD proxy card.
2. If you voted on a Managements White proxy card BUT WISH TO SUPPORT OUR
NOMINEES, please sign, date and mail the enclosed GOLD proxy card in the
postage-paid envelope provided as soon as possible.
3. Remember -- only your latest dated proxy will determine how your shares are
to be voted at the meeting.
4. If any of your shares are held in the name of a bank, broker or other
nominee, please contact the party responsible for your account and direct
them to vote your shares for the Kensington nominees on the GOLD proxy card.
5. If you have any questions or need further assistance in voting your shares,
please contact our proxy solicitor.
[GEORGESON SHAREHOLDER COMMUNICATIONS INC. LOGO]
17 State Street, 10(th) Floor
New York, NY 10004
Banks and Brokers (212) 440-9800
Shareholders Call Toll Free (800) 223-2064
<PAGE> 14
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.
<PAGE> 15
- --------------------------------------------------------------------------------
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 :
[__________________________________________]
- --------------------------------------------------------------------------------
