<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by the Party other than the Registrant [ ]
Check the appropriate box: [ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
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(Name of Registrant as Specified in its Charter)
THE BOARD OF DIRECTORS OF CHARLES E. Smith Residential Realty, Inc.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:
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(2) Aggregate number of securities to which
transaction applies:
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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):
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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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<PAGE>
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
2345 Crystal Drive
Arlington, Virginia 22202
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
To Be Held On Wednesday, May 14, 1997
You are cordially invited to attend the 1997 Annual Meeting of Shareholders
of Charles E. Smith Residential Realty, Inc. (the "Company") to be held on
Wednesday, May 14, 1997, at 9:30 a.m., Eastern Daylight Savings Time, in the
Arlington Ballroom of the Crystal Gateway Marriott Hotel, 1700 Jefferson Davis
Highway, Crystal City, Arlington, Virginia 22202. Parking is available for you
in the hotel garage. This meeting will be held for the following purposes:
1. To elect three directors to serve for an ensuing three-year term;
2. To ratify the appointment of Arthur Andersen LLP as independent
auditors of the Company for the 1997 fiscal year; and
3. To transact such other business as may properly come before such
meeting or any adjournments thereof.
Only shareholders of record at the close of business on April 2, 1997, will
be entitled to vote at the meeting or any adjournments thereof.
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING IN PERSON, PLEASE SIGN AND
DATE THE ENCLOSED PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ernest A. Gerardi, Jr.
Ernest A. Gerardi, Jr.
President and Chief Operating Officer
<PAGE>
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
2345 Crystal Drive
Arlington, Virginia 22202
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, MAY 14, 1997
This Proxy Statement is furnished to shareholders of Charles E. Smith
Residential Realty, Inc. (the "Company"), a Maryland corporation, in connection
with the solicitation of proxies for use at the Annual Meeting of Shareholders
(the "Meeting") of the Company to be held on May 14, 1997, at 9:30 a.m., Eastern
Daylight Savings Time, for the purposes set forth in the Notice of Meeting.
This solicitation of proxies is made on behalf of the Board of Directors (the
"Board of Directors") of the Company.
Holders of record of Common Stock (the "Common Stock") of the Company as of
the close of business on the record date, April 2, 1997, are entitled to receive
notice of and to vote at the Meeting, and each share of Common Stock entitles
the holder thereof to one vote. At the close of business on March 20, 1997,
there were 13,232,953 shares of Common Stock issued and outstanding.
Common Stock represented by proxies in the form enclosed, if such proxies
are properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned form of
proxy, the shares will be voted FOR the election of all nominees for Director
and FOR the proposal to ratify the appointment of Arthur Andersen LLP as
independent auditors. The Company knows of no business other than that set
forth above to be transacted at the meeting. If other matters requiring a vote
do arise, it is the intention of the persons named in the proxy to vote in
accordance with their judgment on such matters.
To be voted, proxies must be filed with the Secretary of the Company prior
to the time of voting. Proxies may be revoked at any time before exercise
thereof by filing a notice of such revocation or a later dated proxy with the
Secretary of the Company or by voting in person at the Meeting.
The Company's 1996 Annual Report to Shareholders for the fiscal year ended
December 31, 1996, has been mailed with this Proxy Statement. This Proxy
Statement, the form of proxy, and the 1996 Annual Report to Shareholders were
mailed to shareholders on or about April 14, 1996. The executive offices of the
Company are located at 2345 Crystal Drive, Arlington, Virginia 22202.
ELECTION OF DIRECTORS
(Item 1)
BOARD OF DIRECTORS
The Board of Directors of the Company is divided into three classes, with
approximately one-third of the directors elected by the shareholders annually.
The directors whose terms will expire at the Meeting are Mandell J. Ourisman,
Robert H. Smith, and Mallory Walker, each of whom has been nominated for
election as a director at the Meeting to hold office until the Annual Meeting of
Shareholders to be held in the year 2000 and until his successor is elected and
qualified. Three nominees for director will be elected upon a favorable vote of
a plurality of the voting Common Stock present and entitled to vote, in person
or by proxy, at the Meeting.
1
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The Board of Directors of the Company recommends a vote FOR Messrs.
Ourisman, Smith and Walker as directors to hold office until the Annual Meeting
of Shareholders to be held in the year 2000 and until their successors are
elected and qualified. Should either or both of these nominees become unable to
serve for any reason, the Board of Directors may designate substitute nominees,
in which event the persons named in the enclosed proxy will vote for the
election of such substitute nominee or nominees, or may reduce the number of
directors on the Board of Directors.
NOMINEES FOR ELECTION TO TERM EXPIRING 2000
MANDELL J. OURISMAN. Since 1988, Mr. Ourisman has been Chairman of the
Board of Ourisman Automotive Enterprises. Mr. Ourisman serves on the Board of
Directors of the Acacia Mutual Life Insurance Company, where he is a member of
the Executive and Finance Committees. He is also a former Director of the Riggs
National Corporation. Mr. Ourisman, 70 years old, serves on the Executive
Compensation Committee of the Company.
ROBERT H. SMITH. Mr. Smith is Co-Chief Executive Officer and Co-Chairman
of the Board of the Company, and Co-Chairman of the board of directors of each
of the Property Service Businesses. Since 1962, Mr. Smith has been the
President, Chief Executive Officer and a director of Charles E. Smith
Construction, Inc. and its predecessor companies, where he oversees and directs
all phases of development and construction of the Smith Companies' office,
retail and residential real estate projects. He is also Secretary/Treasurer and
a director of Charles E. Smith Management, Inc., which specializes in the
management of office buildings. Mr. Smith joined the Smith Companies in 1950.
Mr. Smith is the brother-in-law of Mr. Robert P. Kogod. Mr. Smith, 68 years old,
serves on the Executive and Nominating Committees of the Company.
MALLORY WALKER. Since 1976, Mr. Walker has been President, Chief Executive
Officer and a Director of Walker & Dunlop, Inc., a mortgage banking real estate
company. Mr. Walker previously served on the Boards of Directors of Atlantic
Trust Company, N.A. and Federal National Mortgage Association ("Fannie Mae"); at
Fannie Mae, he was a member of the Executive and Audit Committees, and was
Chairman of the Nominating Committee. Mr. Walker is a former Governor of the
Mortgage Bankers Association of America, and a former Director of the Apartment
& Office Building Association, the Greater Washington Board of Trade, the
Mortgage Bankers Association of Metropolitan Washington and the Washington Board
of Realtors. Mr. Walker is a member of the American Society of Real Estate
Counselors and the Urban Land Institute. Mr. Walker, 57 years old, serves on the
Executive, Nominating and Audit Committees of the Company.
INCUMBENT DIRECTORS - TERM EXPIRING 1998
ERNEST A. GERARDI, JR. Mr. Gerardi is President, Chief Operating Officer
and a Director of the Company, and President, Chief Executive Officer, and a
director of each of the Property Service Businesses. From 1985 until 1994, Mr.
Gerardi was a member of the Executive Committee of Charles E. Smith Management,
Inc., where he had overall responsibility for all day-to-day business operations
and long-range planning. From 1985 through 1993, he served as Executive Vice
President and Senior Executive Vice President of Charles E. Smith Management,
Inc. Prior to joining the Smith Companies in 1985, Mr. Gerardi was with Arthur
Andersen and Co., where he served as senior partner in charge of the firm's
accounting and financial practice for over 250 professionals in Washington, D.C.
During his 27 years with Arthur Andersen, he specialized in management
consultation and strategic planning. He is also a member of the American
Institute of Certified Public Accountants and the D.C. Institute of Certified
Public Accountants. Mr. Gerardi, 61 years old, serves on the Executive Committee
of the Company.
CHARLES B. GILL. Mr. Gill is currently a Director of the Company. From
1979 until March 1, 1995, Mr. Gill was Governor and Chief Executive Officer of
the National Rural Utilities Cooperative Finance Corporation ("NRUCFC"), a
financial intermediary providing capital to rural electric systems. Mr. Gill
also served on the Board and was Chief Executive Officer of the Rural Telephone
Finance Cooperative, a financial intermediary providing capital to rural
telephone systems. Mr. Gill also served on the Board of Directors and was
President of the Guaranty Funding Corporation, a firm that issues government
guaranteed debt for electric generation and transmission cooperatives. He also
served on the Board and was Vice President of the National Cooperative Service
Corporation, a firm that provides senior capital for various types of lease
transactions for electric cooperatives. In addition, Mr. Gill served on the
Boards of Directors of the National Rural Electric Cooperative Association
International Foundation and the National Rural
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Telecommunications Cooperative. Mr. Gill retired from full-time employment on
March 1, 1995, and now acts in a consulting capacity to the various
organizations mentioned above. Mr. Gill, 58 years old, serves on the Audit and
Executive Compensation Committees of the Company.
INCUMBENT DIRECTORS - TERM EXPIRING 1999
FRED J. BRINKMAN. From 1966 to 1991, Mr. Brinkman was a Partner in Arthur
Andersen & Co. Since his retirement in 1991, he has served as a consultant to a
number of organizations. Mr. Brinkman has been Managing Partner of Arthur
Andersen & Co.'s Cleveland, San Francisco and Washington, D.C. offices, Regional
Managing Partner of the firm's Western and Southeastern United States regions
and Area Managing Partner for the Asia Pacific Area and Mainland China. Mr.
Brinkman serves on the Boards of Directors of Figgie International Incorporated,
Washington Gas Light Company, and Washington Mutual Investors Fund and is
currently a consultant to Johnston Lemon Company. He is also a member of the
American Institute of Certified Public Accountants and the D.C. Institute of
Certified Public Accountants. Mr. Brinkman, 68 years old, serves on the
Executive, Nominating and Audit Committees of the Company.
ROBERT P. KOGOD. Mr. Kogod is Co-Chief Executive Officer and Co-Chairman
of the Board of the Company, and Co-Chairman of the board of directors of each
of Smith Realty Company, Consolidated Engineering Services, Inc., Smith
Management Construction, Inc., and Charles E. Smith Insurance Agency, Inc., the
affiliated entities that conduct the Company's multifamily and retail management
and leasing, engineering and technical, interior construction and renovation,
financing, insurance brokerage, and other property-related services
(collectively the "Property Service Businesses"). Since 1964, Mr. Kogod has
been the President, Chief Executive Officer and a director of Charles E. Smith
Management, Inc. where he oversees and directs all phases of the leasing and
management of the Smith Companies' office real estate portfolios. He is also
Secretary/Treasurer and a director of Charles E. Smith Construction, Inc., an
affiliate company that specializes in the development and construction of
office, retail and residential projects. Mr. Kogod joined the Smith Companies
in 1959. Mr. Kogod is the brother-in-law of Mr. Robert H. Smith. Mr. Kogod, 65
years old, serves on the Executive, Nominating and Executive Compensation
Committees of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS; MEETINGS
In accordance with the Amended and Restated Bylaws of the Company, the
Board of Directors has established an Executive Committee, an Audit Committee, a
Nominating Committee, and an Executive Compensation Committee. The membership
of these Committees is set forth in the preceding section of this Proxy
Statement.
The Executive Committee has the authority, subject to the Company's
conflict of interest policies, to acquire and dispose of real property and the
power to authorize, on behalf of the full Board of Directors, the execution of
certain contacts and agreements, including those related to the borrowing of
money by the Company (and, consistent with the First Amended and Restated
Agreement of Limited Partnership of Charles E. Smith Residential Realty L.P.
(the "Operating Partnership"), as amended, to cause the Operating Partnership to
take such actions), provided however, that it may not approve acquisitions of
property in excess of either $50 million per property or $100 million per
calendar quarter, or take any action which would cause the debt-to-market
capitalization ratio of the Company to exceed 50%. The Executive Committee met
three times in 1996.
The Audit Committee, which consists of three independent directors, was
established to make recommendations concerning the engagement of independent
public accountants, review with the independent public accountants the plans and
results of the audit engagement, review professional services provided by the
independent public accountants, review the independence of the independent
public accountants, consider the range of audit and non-audit fees, and review
the adequacy of the Company's internal accounting controls. The Audit Committee
met three times in 1996.
The Executive Compensation Committee was established to determine
compensation for the Company's executive officers and to implement the Company's
stock and unit option award plans and annual incentive plans. The Executive
Compensation Committee met once in 1996, in January, to approve executive
compensation levels for 1996 and award bonuses with respect to fiscal year 1995.
3
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The Nominating Committee was established to seek out, evaluate, and
recommend to the Board candidates for election to the Board of Directors. It was
formed subsequent to the Annual Meeting of 1996 and did not meet during 1996. It
will consider nominees recommended by shareholders, but has adopted no special
procedures for such nominations.
The Board of Directors held four regular and three special meetings during
1996, in addition to conducting occasional business by unanimous written
consent.
COMPENSATION OF DIRECTORS
The Company pays its directors who are not officers of the Company fees for
their services as directors. Directors receive annual compensation of $15,000,
paid quarterly, plus a fee of $1,000 (plus out-of-pocket expenses) for
attendance (in person or by telephone) at each meeting of the Board of
Directors, including committee meetings. Effective as of June 30, 1994, and
pursuant to the Company's Directors Stock Option Plan, each current director who
is not an employee of the Company received an option to purchase 5,000 shares of
Common Stock at $24.00 per share (equal to the public offering price in the
Company's initial public offering). The Plan also provides for automatic grants
of options, exercisable for 5,000 shares of Common Stock, to each newly
appointed non-employee director, of which there have been none to date. Officers
of the Company who are directors are not paid any director fees, nor are they
eligible to participate in the Directors Stock Option Plan.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(Item 2)
The Board of Directors of the Company, upon the recommendation of the Audit
Committee, has appointed the accounting firm of Arthur Andersen LLP to serve as
independent auditors of the Company for the fiscal year ending December 31,
1997. Arthur Andersen LLP has served as independent auditors of the Company
since the Company's commencement of operations and is considered by management
of the Company to be well qualified. The Company has been advised by Arthur
Andersen LLP that neither the firm nor any member thereof has any financial
interest, direct or indirect, in the Company or any of its subsidiaries in any
capacity. Representatives of Arthur Andersen LLP will be present at the
Meeting, will have the opportunity to make a statement if they so desire, and
will be available to respond to appropriate questions.
The ratification of the appointment of Arthur Andersen LLP requires the
approval of a majority of shares of Common Stock present and entitled to vote at
the meeting. The Board of Directors of the Company recommends a vote FOR the
proposal to ratify the appointment of Arthur Andersen LLP as independent
auditors of the Company for the 1997 fiscal year.
4
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EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the annual
and long-term compensation for services in all capacities to the Company and the
Property Service Businesses of the Co-Chief Executive Officers, and those
persons who were, as of December 31, 1996, the six other most highly compensated
executive officers or employees (the "Named Executive Officers") of the Company
and the Property Service Businesses:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
RESTRICTED STOCK/UNITS ALL OTHER
NAME AND PRINCIPAL STOCK/UNIT UNDERLYING COMPENSATION
POSITION YEAR SALARY (1) BONUS (1) OTHER (2) AWARDS (3) OPTIONS (3) (4)
<S> <C> <C> <C> <C> <C> <C> <C>
ROBERT H. SMITH (5) 1994 $75,000 $0 $0 NA NA $0
Co-Chairman of the 1995 $150,000 $0 $0 NA NA $0
Board 1996 $150,000 $0 $0 NA NA $0
and Co-Chief Executive
Officer
ROBERT P. KOGOD (5) 1994 $75,000 $0 $0 NA NA $0
Co-Chairman of the 1995 $150,000 $0 $0 NA NA $0
Board 1996 $150,000 $0 $0 NA NA $0
and Co-Chief Executive
Officer
ERNEST A. GERARDI, JR. 1994 $189,000 $100,000 $0 $1,256,250 150,000 $10,457
President, Chief 1995 $378,200 $200,000 $0 $0 0 $55,936
Operating 1996 $378,200 $200,000 $0 $0 0 $34,677
Officer, and Director
MATTHEW B. MCCORMICK 1994 $90,000 $30,000 (6) $0 $0 40,000 $1,973
Senior Vice President- 1995 $180,000 $75,000 (6) $0 $0 0 $10,163
Retail 1996 $180,000 $75,000 (6) $0 $0 0 $55,710
ROGER L. WEEKS 1994 $92,500 $14,000 $0 $0 50,000 $1,973
Senior Vice President- 1995 $195,000 $32,000 $0 $0 0 $4,920
Residential 1996 $200,000 $32,000 $0 $0 0 $4,927
ANTHONY L. LOPINTO (7) 1994 $87,500 $48,000 $0 $376,875 75,000 $987
(former) Executive 1995 $282,560 $160,000 $0 $0 0 $2,460
Vice President, 1996 $236,554 $0 $0 $0 0 $750
Treasurer, and Chief
Financial Officer
CHARLES R. HAGEN (7) 1994 $59,125 $12,500 $0 $0 10,000 $1,898
Vice President, Acting 1995 $123,000 $15,000 $0 $0 0 $4,623
Treasurer and Chief 1996 $128,000 $17,000 $0 $0 0 $4,893
Financial Officer
</TABLE>
_______________
(1) A portion of the amounts set forth as "Salary" and "Bonus" represent amounts
actually paid to Messrs. Gerardi, McCormick, Weeks, LoPinto, and Hagen by the
Property Service Businesses, which are unconsolidated subsidiaries of the
Company. The Company commenced operations on June 30, 1994, and the amounts set
forth as "Salary" and "Bonus" for 1994 represent the amounts actually paid to
such officers for the period June 30, 1994, to December 31, 1994. For 1995 and
1996, "Salary" includes amounts actually paid in 1995 and 1996 and "Bonus"
includes amounts paid in January 1996 and January 1997 with respect to the
immediately preceding fiscal year.
(2) The dollar value of perquisites and other personal benefits did not exceed
$50,000 or 10% of the total annual salary and bonus for any of the persons named
in the table for 1994, 1995, or 1996.
(3) Neither Mr. Smith nor Mr. Kogod is eligible to participate in the Restricted
Stock and Restricted Unit Plan or the Employee Stock and Unit Option Plan (the
"Plans"). No stock, Units, or options were granted under these Plans in 1995 or
1996. As a result of previous grants under the Plans, on December 31, 1996, Mr.
Gerardi held 25,000 restricted Units worth $731,250 based on the last reported
sale price of the Company's Common Stock on December 31, 1996, of $29.25;
distributions are paid on such Units.
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(4) Unless otherwise stated, these amounts represent employer contributions to
the Charles E. Smith Employees Retirement Plan maintained by the Property
Service Businesses, made with respect to the listed year even if such payment
was partially made in the following year. In the case of Mr. Gerardi, a portion
of these amounts represents the payment of premiums on a life insurance policy:
$29,750 in 1996, $51,016 in 1995 ($21,266 of which was for a partial year
period), and $8,484 in 1994. In the case of Mr. McCormick, a portion of these
amounts, $50,783 in 1996 and $5,243 in 1995, represents leasing commissions paid
in connection with extraordinary third-party brokerage business.
(5) Messrs. Smith, Kogod, and LoPinto also received compensation from entities
other than the Company and the Property Service Businesses, for services
rendered as employees of those entities.
(6) This bonus was granted partially in consideration of the standard level of
commission business generated on behalf of the Company.
(7) Mr. LoPinto was the Chief Financial Officer of the Company until August
1996, but was not an executive officer of the Company on December 31, 1996. He
is included in the chart because he was among the four most highly compensated
employees of the Company in 1996 under applicable securities law definitions.
Mr. Hagen was acting Treasurer and Chief Financial Officer on December 31, 1996.
OPTIONS AND AWARDS
The Company has established an Employee Stock and Unit Option Plan (the
"Option Plan") and an Employee Restricted Stock and Restricted Unit Plan for the
purpose of attracting and retaining executive officers and other key employees.
Options granted under the Option Plan are exercisable for Units in the Operating
Partnership or shares of Common Stock; in certain circumstances, Unit holders
may redeem their Units, on a one-for-one basis, for shares of Common Stock, or
the cash equivalent thereof, at the option of the Company. As of December 31,
1996, the Company and the Property Service Businesses had granted and
outstanding 815,000 Unit options and 87,500 restricted Units under these Plans.
No options or awards were granted to the Named Executive Officers in 1996.
The following table sets forth for four of the Named Executive Officers
information with respect to: (i) the Unit options exercised during 1996, (ii)
the net value realized upon such exercises, (iii) the number of Units covered by
unexercised Unit options held at December 31, 1996, and (iv) the value of such
unexercised options at December 31, 1996. Neither Robert H. Smith nor Robert P.
Kogod, Co-Chief Executive Officers, is eligible to participate in the Option
Plan.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
# OF UNITS OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE DECEMBER 31, 1996 DECEMBER 31, 1996 (1)
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ernest A. Gerardi, Jr. 0 0 60,000 90,000 $315,000 $472,500
<PAGE>
Matthew B. McCormick 0 0 16,000 24,000 $84,000 $126,000
Roger L. Weeks 0 0 20,000 30,000 $105,000 $157,500
Anthony J. LoPinto 0 0 0 0 $0 $0
Charles R. Hagen 0 0 4,000 6,000 $21,000 $31,500
</TABLE>
________
(1) Based on the last reported sale price of the Company's Common Stock on
December 31, 1996, of $29.25 and the per Unit exercise price of $24.00. All
options are exercisable for Units in the Operating Partnership and expire on
June 23, 2004. Holders of Units may redeem their Units for either shares of
Common Stock on a one-for-one basis or the cash equivalent thereof, at the
option of the Company.
EMPLOYMENT AGREEMENTS
Neither the Company nor any of its affiliated entities has an employment
agreement with any officer or employee.
6
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NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE OTHER FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION ("SEC"), INCLUDING THIS PROXY STATEMENT, IN
WHOLE OR IN PART, THE FOLLOWING PERFORMANCE GRAPH AND REPORT ON EXECUTIVE
COMPENSATION SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN OF CHARLES E. SMITH
RESIDENTIAL REALTY, INC., THE NAREIT EQUITY REIT TOTAL RETURN INDEX,
AND THE S&P 500 COMPOSITE INDEX (1)
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
PERIOD ENDING
INDEX 6/24/94 12/31/94 6/30/95 12/31/95 6/30/96 12/31/96
- ----- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Charles E. Smith Residential Realty, Inc. 100.0 104.48 101.80 105.58 111.80 142.07
S&P 500 100.0 105.28 126.56 144.84 159.44 177.95
NAREIT Equity Total Return Index 100.0 97.56 103.13 112.46 120.13 152.12
</TABLE>
(1) Assumes $100 invested on June 24, 1994, in the Company's Common Stock, the
NAREIT Equity REIT Total Return Index ("NAREIT Index"), and the S&P 500
Composite Index ("S&P Index"). Returns for the Company are actual returns
measured from the date of the initial public offering on June 24, 1994. The
values of the assumed investment in both the NAREIT Index and the S&P Index are
the estimated values of these indices on June 24, 1994, based on a proration of
the values of those indices on May 31 and June 30, 1994 (these indices are
published only as of the last day of each month). Total return assumes the
reinvestment of dividends and an actual increase in the market value of the
Common Stock relative to an initial investment of $100.
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REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The following report has been provided by the Executive Compensation
Committee (the "Committee") of the Company's Board of Directors. The Committee
met on January 30, 1996, to approve base compensation levels for certain
executive officers in 1996, to approve annual cash bonuses for 1995, and to
review the Company's compensation practices. The Committee met again on January
21, 1997, to approve base compensation levels for certain executive officers in
1997 (including compensation for a new chief financial officer), to approve
annual cash bonuses for 1996, and to review the Company's compensation
practices.
EXECUTIVE COMPENSATION PHILOSOPHY
The Company's compensation philosophy is guided by two overriding
principles. First, the Company intends to provide fully competitive levels of
compensation, at expected performance levels, in order to attract, motivate and
retain talented executives. Second, the Company's compensation program is
intended to align the interests of the Company's executives and shareholders, by
linking a portion of each executive's compensation directly to the Company's
performance, which should increase shareholder value over time.
In support of this compensation philosophy, the Company's executive
compensation program is designed to reward performance that contributes to the
Company's short-term and long-term success. Accordingly, the Company attempts
to provide both short-term and long-term incentive compensation that varies
based on the Company's performance and the individual's performance. To
accomplish these goals, the Company's executive compensation program is
structured with three primary components: base salary, annual bonus and
long-term incentives (i.e., stock and Unit options and restricted stock and Unit
awards). Each of these three components is discussed separately below.
The deductibility limitation outlined by Section 162(m) of the Internal
Revenue Code is not currently a consideration for the Company because none of
its executives earned sufficient income in 1995 nor are any Company executives
anticipated to have sufficient income in the near future to be subject to the
provision's $1 million compensation deduction limitation. Certain
"performance-based compensation" is excluded from the $1 million limitation.
Restricted Units are subject to the deductibility limitation, but are not
treated as compensation paid to an executive officer for this purpose until the
Units have vested.
BASE SALARY
The base salary program is designed to provide salary opportunities which
are competitive with a community of competitor companies, as well as to reward
individual contributions through performance-driven salary growth. Base salary
levels are determined according to each individual employee's position in the
Company and the employee's performance in that position. Consequently,
employees with higher levels of sustained performance over time and/or employees
assuming greater responsibilities will be paid correspondingly higher salaries.
Salaries for executive officers are reviewed annually in accordance with a
variety of factors, including individual performance, market increases in salary
levels, and the Company's overall financial results.
At its meeting in January 1996, the Committee reviewed a comparative
analysis of company data and compensation of executives by other REITs prepared
by Arthur Andersen LLP, while acknowledging that realistic comparisons are
difficult because of inconsistent job responsibilities and titles, the common
practice of granting senior executives significant stock at the time of a REIT's
formation in lieu of salary, and the large ownership positions held by many of
these officers in predecessor entities that make wage compensation a secondary
concern. In addition, the Company has income from property service businesses
which is significantly greater than that of any other REIT included in the
compensation comparison reviewed by the Committee. The Committee noted that the
Company had achieved or exceeded its operating objectives in 1995, by exceeding
the projected "Funds From Operations" and property acquisition and development
targets. The Company's stock performance was considered with respect to the
compensation of the Chief Operating Officer. The Committee reviewed and approved
management's recommended salary levels for 1996. At its meeting in January 1997,
the Committee undertook a similar analysis and approved management's recommended
salary levels for 1997. The 1996 and 1997 salary levels of the Co-Chief
Executive Officers and the Chief Operating Officer and President remained
unchanged from 1995.
8
<PAGE>
BONUS
The Company's policy of awarding annual cash bonuses is designed to relate
executive pay to Company and individual performance. Cash bonuses provide
financial rewards for the achievement of Company and personal goals. At its
January 1996 and 1997 meetings, the Committee approved bonuses for 1995 and
1996, respectively, to executive officers consistent with this approach. The
Company's achievement of its cash flow and acquisition objectives and other
strategic business objectives in 1996 and the Company's stock performance were
major factors in determining bonus awards. Consistent with previous practice, no
bonuses were awarded to the Co-Chief Executive Officers.
EMPLOYEE STOCK AND UNIT OPTION PLAN
The Company has adopted the 1994 Employee Stock and Unit Option Plan, which
is designed to attract, retain and motivate executive officers and other key
employees. As the Company's performance results in increased shareholder value,
key employees will participate by increases in the value of their stock or unit
options. Messrs. Smith and Kogod are not eligible to participate in this plan.
Under the terms of the plan, the Committee selects the officers and employees of
the Company and the Operating Partnership (but not the Property Service
Businesses) to whom options will be granted. The number of options granted is
determined based on competitive market practice, the Company's financial
success, and each individual's position and level of responsibility within the
Company. Initial grants were made to certain employees of the Company, including
all of its executive officers other than Messrs. Smith and Kogod, at the time of
the Company's initial public offering in June 1994; these options vest in 20%
increments on the first through fifth anniversaries of the date of grant and
will expire if not exercised by June 23, 2004, or under certain other conditions
set forth in the Option Plan. No additional grants were made by the Committee in
1996.
RESTRICTED STOCK AND RESTRICTED UNIT PLAN
The Company has adopted the 1994 Restricted Stock and Restricted Unit Plan
as an additional means of attracting, retaining, and motivating key employees.
Messrs. Smith and Kogod are not eligible to participate under the plan. Under
the terms of the plan, the Committee selects the officers and employees of the
Company and the Operating Partnership (but not the Property Service Businesses)
to whom restricted shares and/or units will be granted. The Committee is also
authorized to determine the bases upon which the restrictions on restricted
shares and restricted Units will lapse. Initial grants to certain employees of
the Company, including some of its executive officers, were approved by the
Committee at its meeting in July 1994. The number of Units granted was
determined according to each individual's position and level of responsibility
within the Company. The restrictions on the initial grants lapse in four equal
annual installments of 25% each on July 1, 1995, July 1, 1996, July 1, 1997, and
July 1, 1998. No additional grants were made by the Committee in 1996.
RETIREMENT SAVINGS PLAN
The Property Service Businesses have adopted the Charles E. Smith Companies
Employees Retirement Plan effective June 30, 1994, pursuant to Section 401(a)
and 401(k) of the Internal Revenue Code of 1986, as amended. The plan covers
full-time employees of such entities and the Company who have completed six
months of service, as defined by the plan. Executives of the Company who are
also employed by the Property Service Businesses are eligible to participate on
the same terms as nonexecutive employees, subject to any legal limitations on
amounts which may be contributed or the benefits which may be payable under the
plan.
Participants may elect to contribute to the plan on a pre-tax basis, within
certain percentage limitations, up to a maximum of $9,500 for both 1996 and
1997. The participating employer matches 50% of the first $1,500 of an
employee's contribution, up to a maximum of $750. In addition, the participating
employer may make a discretionary contribution, calculated as a percentage of
each participant's compensation as defined by the plan.
Receipt of benefits attributable to the employer's matching contribution
and discretionary contribution is subject to the vesting and forfeiture
provisions of the plan. An employee's own contribution is fully vested at all
times.
The Company did not contribute to the plan on behalf of Messrs. Smith and
Kogod in 1996.
9
<PAGE>
CO-CHIEF EXECUTIVE OFFICER COMPENSATION
Robert H. Smith and Robert P. Kogod, Co-Chief Executive Officers, each
received a salary of $150,000 for the period January 1, 1996 to December 31,
1996. The salary and long-term compensation awards of Messrs. Smith and Kogod
are determined substantially in conformity with the policies described above for
all other executive officers of the Company. Messrs. Smith and Kogod receive a
base salary which is substantially less than that of chief executive officers of
many competitive companies, but the amounts paid to them are deemed appropriate
in view of their substantial equity interest in the Company and their
performance of services for entities other than the Company and the Property
Service Businesses, which entities pay them separately for such services.
Consistent with past practice, Messrs. Smith and Kogod did not receive a cash
bonus for 1996.
PROPERTY SERVICE BUSINESSES
Certain executive officers of the Company also are employed by the Property
Service Businesses, of which the Company owns 99% of the economic interest but
does not own or control any voting stock. A substantial portion of such
executive officers' total cash compensation is paid by the Property Service
Businesses for services rendered to such entities. All base salary and annual
bonus compensation decisions made by the Committee with respect to the executive
officers who also are employed by the Property Service Businesses are made after
consultation with the boards of directors of the Property Service Businesses.
In making their base salary and annual compensation decisions with respect to
these executive officers, the boards of directors of the Property Service
Businesses consider all of the factors described above along with the extent of
services provided to the Property Service Businesses.
THE EXECUTIVE COMPENSATION COMMITTEE
CHARLES B. GILL, CHAIRMAN
MANDELL J. OURISMAN
ROBERT P. KOGOD
10
<PAGE>
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
One of the members of the Executive Compensation Committee, Robert P.
Kogod, is an executive officer of the Company. As described below, Mr. Kogod,
together with his brother-in-law, Robert H. Smith (and their families), own
interests in certain entities that were parties to certain transactions
involving the Company, the Operating Partnership, and the Property Service
Businesses during 1996. These transactions include the following:
- - In connection with the evaluation of prospective land acquisition properties,
the Operating Partnership from time-to-time employs the services of personnel
employed by Charles E. Smith Construction, Inc. ("Smith Construction"), which is
owned by Messrs. Smith and Kogod. For such services, Smith Construction
received reimbursements of payroll expenses in the amount of approximately
$657,000 during 1996.
- - The Property Service Businesses lease office and associated parking spaces
from partnerships affiliated with Messrs. Smith and Kogod, and the total rent
paid by these entities to these partnerships during 1996 was $2,528,829.
- - The Company's two retail properties lease health club facilities to entities
controlled by Messrs. Smith and Kogod. Rent paid by these entities to the
Company for the year 1996 totaled approximately $4,978,000.
- - Partnerships or corporations in which Messrs. Smith or Kogod and their
spouses have an interest made certain payments to the Company or the Property
Service Businesses during 1996. These transactions include the following:
- approximately $3,762,000 paid to Smith Realty Company in residential and
retail management and leasing fees and hotel asset management fees
(including an approximately $624,000 fee paid in connection with the
termination of one hotel management agreement);
- approximately $2,640,000 paid to Smith Realty Company as financing fees,
for mortgage placement and related services or as reimbursement for
financial services rendered;
- approximately $5,630,000 paid to Smith Realty Company as reimbursement
for the cost of corporate overhead and office services, including human
resources, information systems, marketing, accounting, and similar
services, provided to such entities;
- approximately $21,301,000 paid to Consolidated Engineering Services,
Inc. for engineering and technical consulting services provided to and the
repair, replacement, and operation of HVAC systems of facilities owned by,
such entities, and fees and payroll reimbursements paid by a joint venture
of which Messrs. Smith and Kogod are the trustees (of which approximately
$20,719,000 was payment for material, labor, and associated overhead costs
incurred in performing such work);
- approximately $23,244,000 paid to Smith Management Construction, Inc.,
for renovations, tenant and building improvements, and other construction
management services provided to such entities (of which approximately
$19,626,000 was payment for material, labor, and associated overhead costs
incurred in performing such work); and
- approximately $ 136,000 in commissions paid to Charles E. Smith Insurance
Agency, Inc., directly or indirectly, for insurance coverage obtained for
such entities.
11
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth beneficial ownership of shares of Common
Stock as of March 20, 1997 (or otherwise as noted) for (i) persons known to the
Company to be the beneficial owners (as determined under the rules of the
Securities and Exchange Commission) of more than 5% of Common Stock, (ii) each
of the directors and Named Executive Officers of the Company, and (iii) the
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Number of Number of Percentage
Shares Shares and Units of all
Name and Address of Beneficially Percentage Beneficially Shares and
Beneficial Owner (1) Owned of Shares (2) Owned Units (3)
- -------------------- ------------ ------------- ----------------- ------------
<S> <C> <C> <C> <C>
(i)
Cohen & Steers
Capital Management, Inc. 1,430,100 (4) 10.8 % 1,430,100 5.3%
United States Steel &
Carnegie Pension Fund 742,200 (5) 5.6% 742,200 2.8%
European Investors, Inc. 589,500 (6) 4.5% 589,500 2.2%
(ii)
Robert H. Smith 145,700 (7) 1.1% 3,134,411 (8) 11.7%
Robert P. Kogod 104,370 (9) * 3,051,583 (10) 11.3%
Ernest A. Gerardi, Jr. 0 * 51,000 *
Matthew B. McCormick 0 * 1,996 *
Roger L. Weeks 0 * 18,193 *
Anthony J. LoPinto (11) 400 * 400 *
Charles R. Hagen 400 (12) * 817 *
Fred J. Brinkman 700 * 700 *
Charles B. Gill 400 * 400 *
Mandell J. Ourisman 0 * 110,519 *
Mallory Walker 4,000 * 4,000 *
(iii)
All directors and executive
officers as a group
(13 persons) 257,670 1.9% 3,549,177 13.3%
</TABLE>
____________________
* less than 1%
12
<PAGE>
(1) The address of each beneficial owner is 2345 Crystal Drive, Crystal City,
Arlington, Virginia 22202, except as otherwise noted.
(2) Based on 13,232,953 shares of Common Stock issued and outstanding on March
20, 1997.
(3) Based on 13,232,953 shares of Common Stock issued and outstanding and
26,778,052 Units deemed outstanding on March 20, 1997 (13,545,089 of which
are held by limited partners other than the Company). With the limited
exception of certain recently-issued Units, holders of Units may redeem
their Units for either shares of Common Stock, on a one-for-one basis, or
the cash equivalent thereof, at the option of the Company.
(4) Based on a Schedule 13G dated February 5, 1997. According to the Schedule
13G, this owner has the sole power to vote or direct the vote of 1,170,700
of these shares. These shares represented 14.2% of the 10,059,975 shares
outstanding and 6.5% of the 22,012,755 combined shares and Units
outstanding on the date of such Schedule 13G. The business address of this
owner is 757 Third Avenue, New York, New York 10017.
(5) Based on a Schedule 13G dated April 9, 1997. According to the Schedule 13G,
the owner has the sole power to vote or direct the vote of all of these
shares. The business address of this owner is 767 Fifth Avenue, New York,
New York 10153.
(6) Based on a Schedule 13G filing dated February 4, 1997; includes
E.I.I.Realty Securities, Inc., a subsidiary of the named owner. According
to the Schedule 13G, the owner has the sole power to vote or direct the
vote of 412,800 shares and the shared power to vote or direct the vote of
176,700 shares. These shares represented 5.9% of the 10,059,975 shares
outstanding and 2.7% of the 22,012,755 combined shares and Units
outstanding on the date of such Schedule 13G. The business address of this
owner is 667 Madison Avenue, New York, New York 10021.
(7) Includes 145,500 shares held, directly and indirectly, by Robert Smith's
spouse, Clarice Smith.
(8) The total number of Units includes 90,733 Units held by Robert Smith,
40,954 Units held by Clarice Smith and 2,857,024 Units held by corporations
wholly owned by Messrs. Smith and Kogod and/or their spouses. The Units
owned by these corporations are reported twice in this part of the table,
once as beneficially owned by Robert Smith and again as beneficially owned
by Robert Kogod, but only once in part (iii) of the table.
(9) Includes 52,185 shares held by Robert Kogod's spouse, Arlene Kogod.
(10) The total number of Units includes 57,464 Units held by Robert Kogod,
32,725 Units held by Arlene Kogod and 2,857,024 Units held by corporations
wholly owned by Messrs. Smith and Kogod and/or their spouses. The Units
owned by these corporations are reported twice in this part of the table,
once as beneficially owned by Robert Kogod and again as beneficially owned
by Robert Smith, but only once in part (iii) of the table.
(11) Mr. LoPinto is no longer employed by the Company, and these amounts
represent his last known ownership. His address is 1523 33rd Street, N.W.,
Washington, D.C. 20007.
(12) These shares are owned by his son.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Certain transactions and relationships between directors and officers and
the Company and its Property Service Businesses are described in the section
entitled "Executive Compensation Committee Interlocks and Insider Participation"
above. There are no additional matters requiring disclosure.
SECTION 16(A) DISCLOSURE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership of such securities with the Securities and
Exchange Commission and the NYSE. To the best of the Company's knowledge, all
reports required in 1996 were timely filed.
13
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be presented for consideration at
the Meeting. However, if any other matters properly come before the Meeting, it
is the intention of the persons named in proxies returned to the Company to vote
such proxies in accordance with their judgment on such matters.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of shareholders to be presented at the 1998 Annual Meeting must
be received by the Secretary of the Company prior to December 13, 1997, to be
considered for inclusion in the Company's proxy material for the 1998 Annual
Meeting of Shareholders. In addition, any shareholder who wishes to propose a
nominee to the Board of Directors or submit any other matter to a vote at a
meeting of shareholders (other than a shareholder proposal included in the
Company's proxy material pursuant to SEC Rule 14a-8) must comply with the
advance notice provisions and other requirements of Article I, Section 1.11 of
the Company's By-laws, which are on file with the Securities and Exchange
Commission and may be obtained from the Secretary of the Company upon request.
VOTING PROCEDURES AND COSTS OF PROXY SOLICITATION
Under the Company's Amended and Restated By-laws and Maryland statutory law
governing corporations organized under Maryland law, shares represented by
proxies that reflect abstentions or "broker non-votes" (i.e., shares held by a
broker or nominee which are represented at the Meeting, but with respect to
which such broker or nominee is not empowered to vote on a particular proposal)
will be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Directors will be elected by a favorable
vote of a plurality of the voting shares of Common Stock present and entitled to
vote, in person or by proxy, at the Meeting. Accordingly, abstentions or broker
non-votes as to the election of directors will not affect the election of the
candidates receiving the most votes. All other proposals to come before the
Meeting require the approval of a majority of the shares of Common Stock present
and entitled to vote. Abstentions as to a particular proposal will have the
same effect as votes against such proposal. Broker non-votes, however, will not
be treated as entitled to vote on a proposal, will not be counted as votes for
or against such proposal, and therefore will have no effect on the outcome of
the vote on such proposal.
The cost of preparing, assembling, and mailing the proxy material will be
borne by the Company. The Company will also request persons, firms and
corporations holding shares in their names or in the names of their nominees,
which shares are beneficially owned by others, to send the proxy material to,
and to obtain proxies from, such beneficial owners and will reimburse such
holders for their reasonable expenses in doing so.
Your vote is important. Please complete the enclosed proxy card and mail it
in the enclosed postage-paid envelope as soon as possible.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ernest A. Gerardi, Jr.
Ernest A. Gerardi, Jr.
President and Chief Operating Officer
April 11, 1997
14
<PAGE>
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
2345 CRYSTAL DRIVE, ARLINGTON, VIRGINIA 22202
April 11, 1997
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Charles E. Smith Residential Realty, Inc., to be held on Wednesday, May 14,
1997, at 9:30 a.m., Eastern Daylight Savings Time, in the Crystal Gateway
Marriott Hotel, 1700 Jefferson Davis Highway, Crystal City, Arlington, Virginia
22202. Parking will be available for you in the hotel garage.
The matters to be acted on at the meeting - the election of directors and
the ratification of the selection of the Company's independent accountants - are
described in the accompanying Notice and Proxy Statement.
We realize that each of you cannot attend the meeting and vote your shares
in person. However, whether or not you plan to attend the meeting, we need your
vote. A proxy card on which to indicate your vote and an envelope, postage
prepaid, in which to return your proxy are enclosed. WE URGE YOU TO COMPLETE,
SIGN, AND RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES WILL BE REPRESENTED. If
you later decide to attend the meeting, you may revoke your proxy at that time
and vote your shares in person.
This is your opportunity to voice your opinion on matters affecting the
Company. Your participation is extremely important.
Sincerely,
/s/ Robert H. Smith /s/ Robert P. Kogod
Robert H. Smith Robert P. Kogod
Co-Chairman of the Board and Co-Chairman of the Board and
Co-Chief Executive Officer Co-Chief Executive Officer
<PAGE>
REVOCABLE PROXY
THIS PROXY IS SOLICITED BY AND ON BEHALF OF
THE BOARD OF DIRECTORS
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
REVOCABLE PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 14, 1997
The undersigned shareholder of Charles E. Smith Residential Realty, Inc.
(the "Company") hereby appoints Ernest A. Gerardi, Jr. and Robert D. Zimet, or
either of them, proxies, with full power of substitution, to act for and to vote
the shares of the Common Stock of the Company which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Shareholders of
said Company to be held on May 14, 1997, and at any and all adjournments
thereof.
Receipt of the Company's Notice of Annual Meeting of Shareholders and Proxy
Statement is acknowledged.
IMPORTANT--THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREON, OR IF NO
DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES FOR DIRECTORS, FOR PROPOSAL 2, AND IN ACCORDANCE WITH THE
DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS AS TO OTHER MATTERS.
The Board of Directors recommends a vote FOR:
1. ELECTION OF DIRECTORS / / FOR ALL NOMINEES / / WITHHOLD AUTHORITY TO VOTE
FOR ALL NOMINEES
Nominees: Mandell J. Ourisman Robert H. Smith Mallory Walker
(INSTRUCTION: To withhold authority to vote for any individual nominee, print
each such nominee's name or names in the space provided below.)
_____________________________________________________________________________
2. APPOINTMENT OF ARTHUR ANDERSEN LLP as Independent
Auditors / / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS
CHANGE AND NOTE AT LEFT ______
(Please date and sign exactly as name
appears on this proxy. Joint owners
should each sign. When signing as
attorney, executor, administrator,
trustee, guardian, etc., give full
title as well.)
Signature:__________ Date:____________
Signature:__________ Date:____________
