SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[x] Annual Report pursuant to Section 15(d) of the Securities Exchange Act of
1934 (No fee required, effective October 7, 1996)
For the years ended December 31, 1998, 1997 and 1996
OR
[ ] Transition Report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 (No fee required)
Commission file number 1-12792
A. Full title of the plan and address of the plan, if different from that of
issuer named below:
Summit Properties Inc.
1996 Non-Qualified Employee Stock Purchase Plan
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Summit Properties Inc.
212 South Tryon Street
Suite 500
Charlotte, North Carolina 28281
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<TABLE>
<CAPTION>
ITEMS 1. AND 2. FINANCIAL STATEMENTS PAGE
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<S> <C>
Independent Auditors' Report 3
Statements of Financial Condition as of December 31, 1998 and 1997 4
Statements of Changes in Plan Equity for the years ended
December 31, 1998, 1997 and 1996 5
Notes to Financial Statements 6
Independent Auditors' Consent 8
</TABLE>
Schedules I, II and III have been omitted because the information is given
in the financial statements or notes thereto or is not required.
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INDEPENDENT AUDITORS' REPORT
Compensation Committee of the Board of Directors
Summit Properties Inc.
Charlotte, North Carolina
We have audited the accompanying statements of financial condition of the Summit
Properties Inc. 1996 Non-Qualified Employee Stock Purchase Plan (the "Plan") as
of December 31, 1998 and 1997, and the related statements of changes in plan
equity for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial condition of the Plan at December 31, 1998 and 1997, and
the Plan's changes in plan equity for each of the three years in the period
ended December 31, 1998 in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
March 26, 1999
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SUMMIT PROPERTIES INC. 1996 NON-QUALIFIED EMPLOYEE
STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
December 31,
---------------------
1998 1997
---------- --------
ASSETS:
Receivable from Summit Properties Inc:
Participant contributions $963,764 $324,765
Employer contributions 170,076 66,574
---------- --------
PLAN EQUITY $1,133,840 $391,339
========== ========
See notes to financial statements.
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SUMMIT PROPERTIES INC. 1996 NON-QUALIFIED EMPLOYEE
STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN PLAN EQUITY
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------
1998 1997 1996
--------- -------- ----------
<S> <C> <C> <C>
PLAN EQUITY AT THE BEGINNING OF THE YEAR $391,339 $907,659 $ -
ADDITIONS:
Participant contributions 1,720,568 686,306 1,432,175
Employer contributions 303,630 130,375 346,090
---------- --------- ----------
Total additions 2,024,198 816,681 1,778,265
DEDUCTIONS:
Purchases and distributions of common stock to 1,281,697 1,333,001 870,606
participants
---------- --------- ----------
PLAN EQUITY AT THE END OF THE YEAR $1,133,840 $391,339 $907,659
========== ========= ==========
</TABLE>
See notes to financial statements.
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<PAGE>
SUMMIT PROPERTIES INC.
1996 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
1. THE PLAN
The Summit Properties Inc. (the "Company") 1996 Non-Qualified Employee Stock
Purchase Plan (the "Plan") was adopted by the Company's Board of Directors on
September 18, 1995 and became effective on January 1, 1996. The Plan is a
non-qualified voluntary contribution plan designed to enable eligible
employees and directors (the "participants") of the Company to purchase
common stock in the Company at a discount. The Plan allows each participant
to purchase up to $100,000 per year (with certain executive officers limited
to $25,000) of the Company's common stock. The Plan is administered by the
Company (referred to herein as the "Administrator") which has delegated
certain administrative responsibilities to the Compensation Committee of the
Board of Directors of the Company. The Plan provides for a series of six
month purchase periods ("purchase period"). A purchase period is a period of
six months beginning each January 1 and July 1 and ending each June 30 and
December 31, respectively. The price of the shares of the common stock
purchased is the lesser of 85 percent of the closing price of such shares
either on (a) the first day of each purchase period, or (b) the last day of
each purchase period.
The Company has reserved 500,000 shares of common stock for participants
under the Plan.
Participant Contributions - Full time employees who have completed one month
service with the Company are eligible to participate in the Plan either by
payroll withholding or cash payments at any time during each purchase period.
Directors who have completed one month as a member of the Board of Directors
are eligible to participate in the Plan by making cash payments at any time
during each purchase period. Participants elect to participate in the Plan by
completing and submitting an election form to the Plan Administrator.
Employer Contributions - Employer contributions represent the discount or
aggregate difference between the market value price of the Company's common
stock and the established discount purchase price at the end of a purchase
period.
Distributions - The Company's Transfer Agent and Registrar issues shares of
common stock upon receipt of participant and Company contributions. The
Transfer Agent and Registrar then prepares stock certificates, which are
registered in the participant's name, and holds such certificates on behalf
of the participants or issues stock certificates to the participants upon
their written request. Accordingly, all shares purchased under the provisions
of the Plan are deemed to be immediately distributed to the participants.
Withdrawals - A participant may withdraw all or any part of the contributions
made during a purchase period by delivering an amended election form to the
Plan Administrator on or before the last day of such purchase period.
Plan Termination - The Board of Directors of the Plan may terminate this Plan
and any purchase period at any time (together with any related contribution
elections) or may terminate any purchase period (together with any related
contribution elections) at any time, provided, however, no such termination
shall be retroactive unless the Board determines that applicable law requires
a retroactive termination of this Plan.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared on the accrual basis of accounting.
Administrative Expenses - All administrative expenses of the Plan are paid by
the Company.
Distributions - Distributions are recorded when common stock has been
distributed to participants.
3. INTERNAL REVENUE SERVICE STATUS
The Plan is not a qualified plan under Section 423(b) of the Internal Revenue
Code. Participants are subject to any required tax withholding by the Company
on the discount/compensation earned under the Plan.
4. DISTRIBUTIONS
A summary of stock purchased and distributed on July 1, 1998, January 2,
1998, July 1, 1997, January 2, 1997, and July 1, 1996, for the six month
purchase periods ended June 30, 1998, December 31, 1997, June 30, 1997,
December 31, 1996 and June 30, 1996, respectively, is as follows:
<TABLE>
<CAPTION>
July 1, January 2, July 1, January 2, July 1,
1998 1998 1997 1997 1996
--------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
Participant contributions $756,804 $324,765 $361,541 $692,160 $740,015
Employer contributions 133,554 66,574 63,801 215,499 130,591
========= ========= ========== ========= ==========
Market value of stock $890,358 $391,339 $425,342 $907,659 $870,606
========= ========= ========== ========= ==========
Market value of stock
purchased and
distributed per share $18.94 $21.13 $20.63 $21.88 $ 19.625
========= ========= ========== ========= ==========
Shares purchased and
distributed 47,016 18,525 20,623 41,493 44,362
========= ========= ========== ========= ==========
</TABLE>
5. SUBSEQUENT EVENT
On January 2, 1999 an additional 65,730 shares of common stock with a market
value of approximately $1,134,000 were purchased and distributed for the
purchase period ended December 31, 1998.
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference of our report dated March 26, 1999
on our audits of the financial statements of the Summit Properties Inc. 1996
Non-Qualified Employee Stock Purchase Plan as of December 31, 1998 and 1997 and
for each of the three years in the period ended December 31, 1998 included in
the Form 11-K for the year ended December 31, 1998 in Registration Statements
Nos. 333-24669, 33-93540, 333-25575 and 333-51623 on Form S-3, and Registration
Statements Nos. 33-88202 and 333-78 on Form S-8 of Summit Properties Inc.
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
March 29, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Summit
Properties Inc., the Administrator of the Plan, has duly caused this annual
report to be signed on its behalf by the undersigned, hereunto duly authorized.
SUMMIT PROPERTIES INC.
1996 NON-QUALIFIED EMPLOYEE
STOCK PURCHASE PLAN
BY: Summit Properties Inc., the
Administrator
Date: March 30, 1999 /s/ Michael L. Schwarz
------------------------------------------
Executive Vice President and Chief
Financial Officer
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