<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 sec. 240.14a-11(c) or sec. 240.14a-12
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- - --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- - --------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
AIMCO LOGO
1873 SOUTH BELLAIRE STREET, SUITE 1700
DENVER, COLORADO 80222-4348
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 22, 1999
You are cordially invited to attend the 1999 Annual Meeting of Stockholders
(the "Meeting") of APARTMENT INVESTMENT AND MANAGEMENT COMPANY (the "Company")
to be held on Thursday, April 22, 1999, at 9:00 a.m. at the principal executive
offices of the Company at 1873 South Bellaire Street, Suite 1700, Denver,
Colorado 80222-4348, for the following purposes:
1. To elect six directors, for a term of one year each, until the next
Annual Meeting of Stockholders and until their successors are elected and
qualify;
2. To ratify the selection of Ernst & Young LLP, to serve as
independent auditors for the Company for the fiscal year ending December
31, 1999; and
3. To transact such other business as may properly come before the
Meeting or any adjournment(s) thereof.
Only stockholders of record at the close of business on March 22, 1999,
will be entitled to notice of, and to vote at, the Meeting or any adjournment(s)
thereof.
WHETHER OR NOT YOU EXPECT TO BE AT THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE. The proxy is revocable at any time prior to
the exercise thereof by written notice to the Company, and stockholders who
attend the Meeting may withdraw their proxies and vote their shares personally
if they so desire.
BY ORDER OF THE BOARD OF DIRECTORS
[/s/ JOEL F. BONDER]
Joel F. Bonder
Secretary
March 25, 1999
<PAGE> 3
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
1873 SOUTH BELLAIRE STREET, SUITE 1700
DENVER, COLORADO 80222-4348
---------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 22, 1999
This Proxy Statement is furnished to stockholders of Apartment Investment
and Management Company ("AIMCO" or the "Company"), a self-administered and
self-managed real estate investment trust ("REIT"), in connection with the
solicitation of proxies in the form enclosed herewith for use at the Annual
Meeting of Stockholders of the Company (the "Meeting") to be held on Thursday,
April 22, 1999, at 9:00 a.m. at the principal executive offices of the Company
at 1873 South Bellaire Street, Suite 1700, Denver, Colorado 80222-4348, and at
any and all adjournments or postponements thereof, for the purposes set forth in
the Notice of Meeting. This Proxy Statement and the enclosed form of proxy are
first being mailed to stockholders on or about March 25, 1999.
This solicitation is made by mail on behalf of the Board of Directors of
the Company. Costs of the solicitation will be borne by the Company. Further
solicitation of proxies may be made by telephone, fax or personal interview by
the directors, officers and employees of the Company and its affiliates, who
will not receive additional compensation for the solicitation. The Company has
retained the services of Corporate Investor Communications, for an estimated fee
of $4,000, plus out-of-pocket expenses, to assist in the solicitation of proxies
from brokerage houses, banks, and other custodians or nominees holding stock in
their names for others. The Company will reimburse banks, brokerage firms and
other custodians, nominees and fiduciaries for reasonable expenses incurred by
them in sending proxy material to stockholders.
Holders of record of the Class A Common Stock of the Company ("Common
Stock") as of the close of business on the record date, March 22, 1999 (the
"Record Date"), are entitled to receive notice of, and to vote at, the Meeting.
Each share of Common Stock entitles the holder to one vote. At the close of
business on the Record Date, there were 61,656,837 shares of Common Stock issued
and outstanding.
Shares represented by proxies in the form enclosed, if the 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 proxy, the
shares will be voted: FOR the election of all nominees for director; and FOR the
ratification of the selection of Ernst & Young LLP as independent auditors for
the calendar year ending December 31, 1999. To be voted, proxies must be filed
with the Secretary of the Company prior to voting. Proxies may be revoked at any
time before voting by filing a notice of revocation with the Secretary of the
Company, by filing a later dated proxy with the Secretary of the Company or by
voting in person at the Meeting. 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.
The Company's 1998 Annual Report to Shareholders is being mailed with this
Proxy Statement. The principal executive offices of the Company are located at
1873 South Bellaire Street, Suite 1700, Denver, Colorado 80222-4348.
1
<PAGE> 4
PROPOSAL 1: ELECTION OF DIRECTORS
Pursuant to the Company's Charter, directors are elected at each Annual
Meeting of Stockholders and hold office for one year, and until their successors
are duly elected and qualify. The Company's Bylaws currently authorize a Board
of Directors consisting of not fewer than three nor more than nine persons.
The nominees for election to the six positions on the Board of Directors to
be voted upon at the Meeting are Terry Considine, Richard S. Ellwood, Peter K.
Kompaniez, J. Landis Martin, Thomas L. Rhodes and John D. Smith. All nominees
were elected to the Board of Directors at the last Annual Meeting of
Stockholders. Messrs. Ellwood, Martin, Rhodes and Smith (the "Independent
Directors") are not employed by, or affiliated with, the Company, other than by
virtue of serving as directors of the Company. Unless authority to vote for the
election of directors has been specifically withheld, the persons named in the
accompanying proxy intend to vote for the election of Messrs. Considine,
Ellwood, Kompaniez, Martin, Rhodes and Smith to hold office as directors for a
term of one year until their successors are elected and qualify at the next
Annual Meeting of Stockholders. All nominees have advised the Board of Directors
that they are able and willing to serve as directors.
If any nominee becomes unavailable for any reason (which is not
anticipated), the shares represented by the proxies may be voted for such other
person or persons as may be determined by the holders of the proxies (unless a
proxy contains instructions to the contrary). In no event will the proxy be
voted for more than six nominees.
Directors will be elected by a favorable vote of a plurality of the shares
of voting 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 plurality
of votes. Unless instructed to the contrary in the proxy, the shares represented
by the proxies will be voted FOR the election of the six nominees named above as
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE SIX NOMINEES.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The firm of Ernst & Young LLP, the Company's independent auditors for the
year ended December 31, 1998, was selected by the Board of Directors, upon the
recommendation of the Audit Committee, to act in the same capacity for the
fiscal year ending December 31, 1999, subject to ratification by the Company's
stockholders. There are no affiliations between the Company and Ernst & Young
LLP, its partners, associates or employees, other than as pertain to the
engagement of Ernst & Young LLP as independent auditors for the Company in the
previous year. Representatives of Ernst & Young LLP are expected to be present
at the Meeting and will be given the opportunity to make a statement if they so
desire and to respond to appropriate questions.
The affirmative vote of a majority of the votes cast regarding the proposal
is required to ratify the selection of Ernst & Young LLP. Accordingly,
abstentions or broker non-votes will not affect the outcome of the vote on the
proposal. Unless instructed to the contrary in the proxy, the shares represented
by the proxies will be voted FOR the proposal to ratify the selection of Ernst &
Young LLP to serve as independent auditors for the Company for the fiscal year
ending December 31, 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP.
2
<PAGE> 5
BOARD OF DIRECTORS AND OFFICERS
The executive officers of the Company and the nominees for election as
directors of the Company, their ages, dates they were first elected and their
positions with the Company or on the Board of Directors are set forth below.
<TABLE>
<CAPTION>
NAME AGE FIRST ELECTED POSITION
---- --- ------------- --------
<S> <C> <C> <C>
Terry Considine................... 51 July 1994 Chairman of the Board of Directors
and Chief Executive Officer
Peter K. Kompaniez................ 54 July 1994 Vice Chairman, President and
Director
Joel F. Bonder.................... 50 December 1997 Executive Vice President, General
Counsel and Secretary
Patrick J. Foye................... 42 May 1998 Executive Vice President
Robert Ty Howard.................. 41 February 1998 Executive Vice
President -- Ancillary Services
Steven D. Ira..................... 48 July 1994 Executive Vice President and Co-
Founder
Paul J. McAuliffe................. 42 February 1999 Executive Vice
President -- Capital Markets
Thomas W. Toomey.................. 38 January 1996 Executive Vice
President -- Finance and
Administration
Harry G. Alcock................... 35 July 1996 Senior Vice
President -- Acquisitions
Troy D. Butts..................... 34 November 1997 Senior Vice President and Chief
Financial Officer
Richard S. Ellwood................ 67 July 1994 Director, Chairman, Audit
Committee
J. Landis Martin.................. 53 July 1994 Director, Chairman, Compensation
Committee
Thomas L. Rhodes.................. 59 July 1994 Director
John D. Smith..................... 70 November 1994 Director
</TABLE>
The following is a biographical summary of the experience of the current
directors and executive officers of the Company for the past five years or more.
Terry Considine. Mr. Considine has been Chairman of the Board of Directors
and Chief Executive Officer of the Company since July 1994. He is the sole owner
of Considine Investment Co. and prior to July 1994 was owner of approximately
75% of Property Asset Management, L.L.C., Limited Liability Company, a Colorado
limited liability company, and its related entities (collectively, "PAM"), one
of the Company's predecessors. Mr. Considine serves as Chairman and director of
Asset Investors Corporation ("Asset Investors") and Commercial Assets, Inc.
("Commercial Assets"), two other public real estate investment trusts. Mr.
Considine has been and remains involved as a principal in a variety of real
estate activities, including the acquisition, renovation, development and
disposition of properties. Mr. Considine has also controlled entities engaged in
other businesses such as television broadcasting, gasoline distribution and
environmental laboratories. Mr. Considine received a B.A. from Harvard College,
a J.D. from Harvard Law School and was formerly admitted as a member of the
Massachusetts Bar (inactive).
Mr. Considine has had substantial multifamily real estate experience. From
1975 through July 1994, partnerships or other entities in which Mr. Considine
had controlling interests invested in approximately 35 multifamily apartment
properties and commercial real estate properties. Six of these real estate
assets (four of which were multifamily apartment properties and two of which
were office properties) did not generate sufficient cash flow to service their
related indebtedness and were foreclosed upon by their lenders, causing
3
<PAGE> 6
pre-tax losses of approximately $11.9 million to investors and losses of
approximately $2.7 million to Mr. Considine.
Peter K. Kompaniez. Mr. Kompaniez has been Vice Chairman and a director of
the Company since July 1994 and was appointed President in July 1997. Mr.
Kompaniez has also served as Chief Operating Officer of NHP Incorporated ("NHP")
(a company acquired by the Company in December 1997). Since September 1993, Mr.
Kompaniez has owned 75% of PDI Realty Enterprises, Inc., a Delaware corporation,
one of the Company's predecessors, and serves as its President and Chief
Executive Officer. From 1986 to 1993, he served as President and Chief Executive
Officer of Heron Financial Corporation ("HFC"), a United States holding company
for Heron International, N.V.'s real estate and related assets. While at HFC,
Mr. Kompaniez administered the acquisition, development and disposition of
approximately 8,150 apartment units (including 6,217 units that have been
acquired by the Company) and 3.1 million square feet of commercial real estate.
Prior to joining HFC, Mr. Kompaniez was a senior partner with the law firm of
Loeb and Loeb where he had extensive real estate and REIT experience. Mr.
Kompaniez received a B.A. from Yale College and a J.D. from the University of
California (Boalt Hall).
Joel F. Bonder. Mr. Bonder was appointed Executive Vice President, General
Counsel and Secretary of the Company effective December 1997. Prior to joining
the Company, Mr. Bonder served as Senior Vice President and General Counsel of
NHP from April 1994 until December 1997. Mr. Bonder served as Vice President and
Deputy General Counsel of NHP from June 1991 to March 1994 and as Associate
General Counsel of NHP Incorporated from 1986 to 1991. From 1983 to 1985, Mr.
Bonder practiced with the Washington, D.C. law firm of Lane & Edson, P.C. From
1979 to 1983, Mr. Bonder practiced with the Chicago law firm of Ross and
Hardies. Mr. Bonder received a B.A. from the University of Rochester and a J.D.
from Washington University School of Law.
Patrick J. Foye. Mr. Foye was appointed Executive Vice President of the
Company in May 1998. He is responsible for acquisitions of partnership
securities, consolidation of minority interests, and corporate and other
acquisitions. Prior to joining the Company, Mr. Foye was a Merger and
Acquisitions Partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP
from 1989 to 1998 and was Managing Partner of the firm's Brussels, Budapest and
Moscow offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the
Long Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham Law School and was Associate Editor of the Fordham Law Review.
Robert Ty Howard. Mr. Howard was appointed Executive Vice
President-Ancillary Services in February 1998. Prior to joining the Company, Mr.
Howard served as an officer and/or director of four affiliated companies, Hecco
Ventures, Craig Corporation, Reading Company and Decurion Corporation. Prior to
joining the Company, Mr. Howard was responsible for venture investment,
financing, mergers and acquisitions activities, and investments in commercial
real estate, both nationally and internationally. From 1983 to 1987, he was
employed by Spieker Properties. Mr. Howard received a B.A. from Amherst College,
a J.D. from Harvard Law School and an M.B.A. from Stanford University Graduate
School of Business.
Steven D. Ira. Mr. Ira is a Co-Founder of the Company and has served as
Executive Vice President of the Company since July 1994. From 1987 until July
1994, he served as President of PAM. Prior to merging his firm with PAM in 1987,
Mr. Ira acquired extensive experience in property management. Between 1977 and
1981 he supervised the property management of over 3,000 apartment and mobile
home units in Colorado, Michigan, Pennsylvania and Florida, and in 1981 he
joined with others to form the property management firm of McDermott, Stein and
Ira. Mr. Ira served for several years on the National Apartment Manager
Accreditation Board and is a former president of both the National Apartment
Association and the Colorado Apartment Association. Mr. Ira is the sixth
individual elected to the Hall of Fame of the National Apartment Association in
its 54-year history. He holds a Certified Apartment Property Supervisor (CAPS)
and a Certified Apartment Manager designation from the National Apartment
Association, a Certified Property Manager (CPM) designation from the National
Institute of Real Estate Management (IREM) and he is a member of the Boards of
Directors of the National Multi-Housing Council, the National Apartment
4
<PAGE> 7
Association and the Apartment Association of Metro Denver. Mr. Ira received a
B.S. from Metropolitan State College in 1975.
Paul J. McAuliffe. Mr. McAuliffe was appointed Executive Vice
President -- Capital Markets in February 1999. Prior to joining the Company, Mr.
McAuliffe was Senior Managing Director of Secured Capital Corp and prior to that
time had been a Managing Director of Smith Barney, Inc. from 1993 to 1996, where
he was a senior member of the underwriting team that lead AIMCO's initial public
offering in 1994. Mr. McAuliffe was also a Managing Director and head of the
real estate group at CS First Boston from 1990 to 1993 and he was a Principal in
the real estate group at Morgan Stanley & Co., Inc. where he worked from 1983 to
1990. Mr. McAuliffe received a B.A. from Columbia College and an M.B.A. from
University of Virginia, Darden School.
Thomas W. Toomey. Mr. Toomey has served as Senior Vice President-Finance
and Administration of the Company since January 1996 and was promoted to
Executive Vice President-Finance and Administration in March 1997. From 1990
until 1995, Mr. Toomey served in a similar capacity with Lincoln Property
Company ("LPC") as Vice President/Senior Controller and Director of
Administrative Services of Lincoln Property Services where he was responsible
for LPC's computer systems, accounting, tax, treasury services and benefits
administration. From 1984 to 1990, he was an audit manager with Arthur Andersen
& Co. where he served real estate and banking clients. Mr. Toomey received a
B.S. in Business Administration/Finance from Oregon State University.
Harry G. Alcock. Mr. Alcock has served as a Vice President since July 1996,
and was promoted to Senior Vice President-Acquisitions in October 1997, with
responsibility for acquisition and financing activities since July 1994. From
June 1992 until July 1994, Mr. Alcock served as Senior Financial Analyst for PDI
and HFC. From 1988 to 1992, Mr. Alcock worked for Larwin Development Corp., a
Los Angeles based real estate developer, with responsibility for raising debt
and joint venture equity to fund land acquisitions and development. From 1987 to
1988, Mr. Alcock worked for Ford Aerospace Corp. He received his B.S. from San
Jose State University.
Troy D. Butts. Mr. Butts has served as Senior Vice President and Chief
Financial Officer of the Company since November 1997. Prior to joining the
Company, Mr. Butts served as a Senior Manager in the audit practice of the Real
Estate Services Group for Arthur Andersen LLP in Dallas, Texas. Mr. Butts was
employed by Arthur Andersen LLP for ten years and his clients were primarily
publicly-held real estate companies, including office and multi-family real
estate investment trusts. Mr. Butts holds a Bachelor of Business Administration
degree in Accounting from Angelo State University and is a Certified Public
Accountant.
Richard S. Ellwood. Mr. Ellwood was appointed a director of the Company in
July 1994. Mr. Ellwood is currently Chairman of the Audit Committee and a member
of the Compensation Committee. Mr. Ellwood is the founder and President of R.S.
Ellwood & Co., Incorporated, a real estate investment banking firm. Prior to
forming R.S. Ellwood & Co., Incorporated in 1987, Mr. Ellwood had 31 years
experience on Wall Street as an investment banker, serving as: Managing Director
and senior banker at Merrill Lynch Capital Markets from 1984 to 1987; Managing
Director at Warburg Paribas Becker from 1978 to 1984; general partner and then
Senior Vice President and a director at White, Weld & Co. from 1968 to 1978; and
in various capacities at J.P. Morgan & Co. from 1955 to 1968. Mr. Ellwood
currently serves as a director of Felcor Lodging Trust, Incorporated and Florida
East Coast Industries, Inc.
J. Landis Martin. Mr. Martin was appointed a director of the Company in
July 1994 and became Chairman of the Compensation Committee on March 19, 1998.
Mr. Martin is a member of the Audit Committee. Mr. Martin has served as
President and Chief Executive Officer and a Director of NL Industries, Inc., a
manufacturer of titanium dioxide since 1987. Mr. Martin has served as Chairman
of Tremont Corporation ("Tremont"), a holding company operating through its
affiliates Titanium Metals Corporation ("TIMET") and NL Industries, Inc. ("NL"),
since 1990 and as Chief Executive Officer and a director of Tremont since 1988.
Mr. Martin has served as Chairman of TIMET, an integrated producer of titanium
since 1987 and Chief Executive Officer since January, 1995. From 1990 until its
acquisition by a predecessor of Haliburton Company ("Haliburton") in 1994, Mr.
Martin served as Chairman of the Board and Chief
5
<PAGE> 8
Executive Officer of Baroid Corporation, an oilfield services company. In
addition to Tremont, NL and TIMET, Mr. Martin is a director of Haliburton, which
is engaged in the petroleum services, hydrocarbon and engineering industries.
Thomas L. Rhodes. Mr. Rhodes was appointed a Director of the Company in
July 1994 and is currently a Member of the Audit and Compensation Committees
(and served as Chairman of the Compensation Committee prior to March 19, 1998).
Mr. Rhodes has served as the President and Director of National Review magazine
since November 1992, where he has also served as a Director since 1988. From
1976 to 1992, he held various positions at Goldman, Sachs & Co. and was elected
a General Partner in 1986 and served as a General Partner from 1987 until
November 1992. He is currently Vice Chairman of the Board and a Director of
Asset Investors and Commercial Assets. He also serves as a Director of Delphi
Financial Group and its subsidiaries, Delphi International Ltd., Oracle
Reinsurance Company and The Lynde and Harry Bradley Foundation and is a Trustee
of the Heritage Foundation.
John D. Smith. Mr. Smith was appointed a director of the Company in
November, 1994. Mr. Smith is a member of the Compensation Committee and the
Audit Committee. Mr. Smith is Principal and President of John D. Smith
Developments. Mr. Smith has been a shopping center developer, owner and
consultant for over 8.6 million square feet of shopping center projects
including Lenox Square in Atlanta, Georgia. Mr. Smith is a Trustee and former
President of the International Council of Shopping Centers and was selected to
be a member of the American Society of Real Estate Counselors. Mr. Smith served
as a director for Pan-American Properties, Inc. (National Coal Board of Great
Britain) formerly known as Continental Illinois Properties. He also serves as a
director of American Fidelity Assurance Companies and is retained as an advisor
by Shop System Study Society, Tokyo, Japan.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors held seven meetings during the year ended December
31, 1998. During 1998, no director attended fewer than 75% of the total number
of meetings of the Board of Directors and any committees of the Board of
Directors upon which he served. The Board of Directors has established standing
audit and compensation committees. There is no standing nominating committee.
Audit Committee. The Audit Committee currently consists of the four
Independent Directors: Messrs. Ellwood (Chairman), Martin, Rhodes and Smith. The
Audit Committee makes recommendations to the Board of Directors concerning the
engagement of independent auditors, reviews with the independent auditors the
plans and results of the audit engagement, approves professional services
provided by the independent auditors, reviews the independence of the
independent public accountants, considers the range of audit and non-audit fees
and reviews the adequacy of the Company's internal accounting controls. The
Audit Committee met once in 1998.
Compensation Committee. The Compensation Committee currently consists of
the four Independent Directors: Messrs. Martin (Chairman), Ellwood, Rhodes and
Smith. The Compensation Committee determines and reports to the Board of
Directors regarding compensation for the Company's executive officers and
administers the Company's stock option plans. The Compensation Committee met
once in 1998. On March 19, 1998, Mr. Martin was appointed Chairman of the
Compensation Committee, replacing Mr. Rhodes who had held such position since
the creation of the Compensation Committee in 1994.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Martin (Chairman), Ellwood,
Rhodes and Smith. Mr. Rhodes, a member of the Compensation Committee (and
Chairman of the Compensation Committee prior to March 19, 1998), is Vice
Chairman and a Director of Commercial Assets and Asset Investors. Mr. Considine,
the Chairman of the Board and Chief Executive Officer of the Company, is also
Chairman and a Director of Commercial Assets and Asset Investors.
6
<PAGE> 9
COMPENSATION OF DIRECTORS
In 1998, the Company paid the Independent Directors an annual fee of 1,000
shares of the Company's Common Stock, a fee of $1,000 for attendance at each
in-person meeting of the Board of Directors, $750 for each in-person meeting of
any committee thereof, and $750 for each telephonic meeting of the Board of
Directors or any committee thereof. Compensation for the Independent Directors
in 1999 will be an annual fee of 1,000 shares of Common Stock, a fee of $1,000
for attendance at each in-person meeting of the Board of Directors, $750 for
each in-person meeting of any committee thereof, and $750 for each telephonic
meeting of the Board of Directors or any committee thereof. This amount may be
modified after further review by the Company. Directors who are not Independent
Directors do not receive directors' fees.
Pursuant to The 1994 Stock Option Plan of Apartment Investment and
Management Company and Affiliates, each Independent Director, upon joining the
Board of Directors, received an initial grant of an option to purchase up to
3,000 shares of Common Stock at the market price of the shares on the date of
grant. Following each annual meeting of stockholders, each Independent Director
receives an additional option to purchase up to 3,000 shares of Common Stock at
the market price of the shares on the date of grant. Such options vest one year
after the date of grant.
7
<PAGE> 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information available to the
Company, as of February 19, 1999, with respect to shares of the Company's Common
Stock and Partnership Common Units ("OP Units") held by (i) each director and
the five most highly compensated executive officers who were serving as of
December 31, 1998, (ii) all directors and executive officers of the Company as a
group and (iii) those persons known to the Company to be the beneficial owners
(as determined under the rules of the Commission) of more than 5% of such
shares. This table does not reflect options that are not exercisable within 60
days, or the beneficial ownership of High Performance Units by executive
officers and directors of the Company. The business address of each of the
following directors and executive officers is 1873 South Bellaire Street, Suite
1700, Denver, Colorado 80222-4348, unless otherwise specified.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF PERCENTAGE OF
SHARES OF COMMON STOCK NUMBER OF OWNERSHIP OF THE
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK OUTSTANDING OP UNITS(1) COMPANY(2)
- - ------------------------------------ ------------ ------------- ------------ ----------------
<S> <C> <C> <C> <C>
Directors & Executive Officers:
Terry Considine.................... 1,713,274(3) 3.0% 785,011(4) 3.7%
Peter K. Kompaniez................. 641,427(5) 1.1% 23,625 1.0%
Steven D. Ira...................... 230,817(6) * 96,614 *
Thomas W. Toomey................... 239,632 * *
Patrick J. Foye.................... 86,258 * *
Richard S. Ellwood................. 17,200(7) * *
J. Landis Martin................... 5,000 * 26 *
Thomas L. Rhodes................... 43,600 * *
John D. Smith...................... 17,700(8) * *
All directors and executive
officers as a group (14
persons)........................ 3,232,024(9) 5.7% 905,276 6.2%
5% or Greater Holders
Cohen & Steers Capital Management,
Inc................................ 5,499,800(10) 9.6% 8.2%
757 Third Avenue
New York, New York 10017
ABKB/LaSalle Securities Limited
Partnership........................ 3,546,418(11) 7.3% 6.2%
200 East Randolph Drive
Chicago, Illinois 60601
FMR Corp............................. 4,002,334(12) 8.3% 7.1%
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- - ---------------
* Less than 1.0%
(1) Through wholly owned subsidiaries, the Company acts as general partner of,
and, as of February 19, 1999, holds approximately 83% of the interests in
AIMCO Properties, L.P. (the "Operating Partnership"). After a one-year
holding period, OP Units may be tendered for redemption and, upon tender,
may be acquired by the Company for shares of the Company's Common Stock at
an exchange ratio of one share of the Company's Common Stock for each OP
Unit (subject to adjustment). If all OP Units were acquired by the Company
for the Company's Common Stock (without regard to the ownership limit set
forth in the Company's Charter) these shares of the Company's Common Stock
would constitute approximately 17% of the then outstanding shares of the
Company's Common Stock. OP Units are subject to certain restrictions on
transfer.
(2) On a fully diluted basis, assuming all 9,551,226 OP Units outstanding as of
February 19, 1999 are acquired by the Company for shares of the Company's
Common Stock without regard to the Ownership Limit.
8
<PAGE> 11
(3) Includes 1,334,759 shares held by entities in which Mr. Considine holds
sole voting and investment power, 74,743 shares held by Mr. Considine's
spouse, Elizabeth Considine, for which Mr. Considine disclaims beneficial
ownership, and 63,278 shares held by a non-profit corporation in which Mr.
Considine has shared voting and investment power with his spouse. Mr.
Considine disclaims beneficial ownership of 1,220,078 shares held by
Considine family partnerships in which Mr. Considine holds a 1% general
partnership interest with the remaining 99% held by trusts for members of
Mr. Considine's family.
(4) Includes 160,724 OP Units held by entities in which Mr. Considine has sole
voting and investment power, 2,300 OP Units held by the Considine
Partnership, for 99% of which Mr. Considine disclaims beneficial ownership,
and 157,698 OP Units held by Mr. Considine's spouse, Elizabeth Considine,
for which Mr. Considine disclaims beneficial ownership.
(5) Includes 800 shares subject to options that are exercisable within 60 days.
(6) Includes 49,600 shares subject to options that are exercisable within 60
days.
(7) Includes 4,500 shares subject to options that are exercisable within 60
days.
(8) Includes 12,000 shares subject to options that are exercisable within 60
days.
(9) Includes 104,175 shares subject to options that are exercisable within 60
days.
(10) Includes 4,789,200 shares as to which Cohen & Steers Capital Management,
Inc. ("Cohen & Steers") has sole voting power. Cohen & Steers has sole
dispositive power as to all 5,499,800 shares.
(11) Includes 974,008 shares beneficially owned by LaSalle Advisors Capital
Management, Inc. ("LaSalle Capital"), 308,497 as to which LaSalle Capital
has sole voting power and sole dispositive power. ABKB/LaSalle Securities
Limited Partnership has sole voting power as to 590,764 shares and sole
dispositive power as to 559,764 shares.
(12) Includes 1,063,379 shares as to which FMR Corp. has sole voting power. FMR
Corp. has sole dispositive power as to all 4,002,334 shares.
9
<PAGE> 12
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid for each of the three
fiscal years ended December 31, 1998 to the Company's Chief Executive Officer
and each of the four other most highly compensated executive officers of the
Company (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION(1)
----------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING STOCK
----------------------- OTHER ANNUAL OPTIONS/SARS (#) ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) COMPENSATION($) AWARDS COMPENSATION($)
- - --------------------------- ---- --------- ----------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Terry Considine................. 1998 $275,000 $1,025,000 -- 150,000 --
Chairman of the Board of 1997 275,000 2,060,000 -- 2,740,000 --
Directors and Chief 1996 267,500 20,000 -- 165,000 --
Executive Officer
Peter K. Kompaniez.............. 1998 $235,000 $ 735,000 -- 75,000 --
President and Vice 1997 235,000 800,000 -- 815,000 --
Chairman 1996 227,500 20,000 -- 87,000 --
Steven D. Ira................... 1998 $200,000 $ 225,000 -- -- --
Executive Vice President 1997 200,000 550,000 -- 210,000 --
and Co-Founder 1996 194,000 20,000 -- 77,000 --
Thomas W. Toomey................ 1998 $200,000 $ 300,000 -- 100,000 --
Executive Vice President -- 1997 180,000 555,000 -- 220,000 --
Finance and Administration 1996 130,000 50,000 -- 73,000 --
Patrick J. Foye(3).............. 1998 $135,600 $ 400,000 -- 375,000 --
Executive Vice President 1997 -- -- -- -- --
1996 -- -- -- -- --
</TABLE>
- - ---------------
(1) Excludes 1,227,078, 376,526, 125,632, 165,632 and 78,948 shares of Common
Stock underlying options granted to Messrs. Considine, Kompaniez, Ira,
Toomey and Foye, respectively, from 1996 to 1998, which were immediately
exercised to purchase shares pursuant to the Company's leveraged stock
purchase program. See "Certain Relationships and Transactions-Stock Purchase
Loans." Options earned in respect of 1997 and 1998 fiscal years were awarded
in January 1998 and 1999, respectively.
(2) Includes all Discretionary and Incentive cash compensation earned by the
Named Executive Officers.
(3) Mr. Foye was not an employee of the Company prior to May 1998.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Information on options granted in 1998 to the Named Executive Officers is
set forth in the following table.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
----------------------------------------------------
% OF
TOTAL
OPTIONS/
SARS POTENTIAL REALIZABLE VALUE AT
NUMBER OF GRANTED ASSUMED ANNUAL RATES OF STOCK
SECURITIES TO PRICE APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES EXERCISE OR TERM(4)
OPTIONS/SARS IN FISCAL BASE EXPIRATION ------------------------------
NAME GRANTED(#)(2) YEAR(3) PRICE($/SH) DATE 5%($) 10%($)
---- ------------- --------- ----------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Terry Considine......... 2,740,000 55.7% $37.375 1/21/2008 $64,403,500 $163,211,200
Peter K. Kompaniez...... 815,000 16.7% 37.375 1/21/2008 19,156,500 48,546,400
Steven D. Ira........... 210,000 4.3% 37.375 1/21/2008 4,936,000 12,508,900
Thomas W. Toomey........ 220,000 4.5% 37.375 1/21/2008 5,171,100 13,104,500
Patrick J. Foye......... 275,000 5.6% 38.000 5/22/2008 6,571,900 16,654,600
</TABLE>
10
<PAGE> 13
- - ---------------
(1) Unless otherwise specified, options vest over five years, with vesting as to
40% of the underlying shares after two years and an additional 20% vesting
each of the next two years. Under the terms of the Apartment Investment and
Management Company 1997 Stock Award and Incentive Plan (the "1997 Stock
Plan"), the plan administrator retains discretion, subject to certain
restrictions, to modify the terms of outstanding options. The exercise price
of incentive and non-qualified options granted under the 1997 Stock Plan
will generally equal the fair market value of a share of Common Stock on the
date of grant.
(2) Excludes 78,948 shares of Common Stock underlying options granted to Mr.
Foye which were immediately exercised to purchase shares pursuant to the
Company's leveraged stock purchase program. See "Certain Relationships and
Transactions -- Stock Purchase Loans."
(3) Excludes 513,046 shares of Common Stock underlying options granted to all
employees which were immediately exercised to purchase shares pursuant to
the Company's leveraged stock purchase program. See "Certain Relationships
and Transactions -- Stock Purchase Loans."
(4) Assumed annual rates of stock price appreciation are set forth for
illustrative purposes only. The amounts shown are for the assumed rates of
appreciation only, do not constitute projections of future stock price
performance, and may not be realized.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
Information on option exercises during 1998 by the Named Executive
Officers, and the value of unexercised options held by Named Executive Officers
at December 31, 1998 is set forth in the following table.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
FY-END(#) AT FY-END($)(3)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#)(1) REALIZED($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Terry Considine.................. 2,400 $ 20,954 -- 2,747,200 -- $119,250
Peter K. Kompaniez............... -- -- 800 817,400 $13,250 39,750
Steven D. Ira.................... 25,000 293,200 49,600 212,400 815,500 39,750
Thomas W. Toomey................. -- -- -- 220,000 -- --
Patrick J. Foye.................. -- -- -- 275,000 -- --
</TABLE>
- - ---------------
(1) Excludes 78,948 shares of Common Stock underlying options granted to Mr.
Foye which were immediately exercised to purchase shares pursuant to the
Company's leveraged stock purchase program. See "Certain Relationships and
Transactions -- Stock Purchase Loans."
(2) "Value Realized" is reduced by amounts withheld for payment of Federal and
state taxes.
(3) Market value of underlying securities at fiscal year-end, less the exercise
price. Market value is determined based on the closing price of the Common
Stock on the New York Stock Exchange on December 31, 1998 of $37.1875 per
share.
11
<PAGE> 14
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The four members of the Board of Directors who are not members of
management constitute the Compensation Committee. The Compensation Committee
determines the compensation of the Chief Executive Officer and the President;
reviews and approves compensation of other corporate officers holding the title
of Senior Vice President or above ("Other Senior Management" and together the
Chief Executive Officer and the President, "Senior Management"), reviews the
general compensation and benefit practices of the Company; and administers the
Company's stock option and other stock related plans.
In conducting its review and in making its determination and granting
approvals, the Committee considers various factors: the alignment of management
financial awards with shareholder objectives for Total Return (dividend income
plus share price appreciation); reasonability of compensation in consideration
of all the facts, including Total Return, the size and complexity of the company
and practices of other real estate investment trusts; and recruitment and
retention of the Company's management.
Compensation of Senior Management is comprised of Base Compensation,
Discretionary Compensation and Incentive Compensation. The policy of the
compensation Committee is to set Base Compensation at or below the median paid
by comparable companies to executive officers with comparable responsibilities;
to utilize Discretionary Compensation, generally cash and in an amount not more
than Base Compensation, to reward specific achievements; and to make the chief
financial reward Incentive Compensation which is tied directly to the creation
of shareholder value. In addition, certain members of Senior Management have
made a cash investment in a partnership which received High Performance Units
which will have a value only if the Company's Total Return on a sustained basis
exceeds industry averages. The comparable companies reviewed by the Compensation
Committee are among those included in the SNL indices used in the performance
graph on page 15 of this Proxy Statement.
Base Compensation. The Compensation Committee determined 1998 Base
Compensation for the Chief Executive Officer and for the President; reviewed and
approved 1998 Base Compensation for Other Senior Management based upon the
recommendation of the Chief Executive Officer and President; and considered such
1998 Base Compensation reasonable and in line with Company policy. The base
Compensation for Messrs. Considine and Kompaniez has been set to be equal or
below the median compensation paid to executives with similar responsibilities
at comparable companies reviewed by the Compensation Committee.
Discretionary Compensation. For 1998, the Compensation Committee
considered, among other things:
- AFFO and FFO per share increased to $3.12 and $3.42, an increase of 26%
and 23% respectively, over prior year's results. Dividends per share
increased to $2.25 from $1.85, an increase of 22%.
- Total assets increased to $4,268,000,000 as of December 31, 1998,
compared to $2,101,000,000 as of December 31, 1997, an increase of 105%.
- Total equity market capitalization increased to $5,519,000,000
($3,009,000,000 in equity cap) as of December 31, 1998 compared to
$2,701,000,000 ($1,818,000,000 in equity cap), as of December 31, 1997,
an increase of 65%.
- 1998 acquisitions, excluding the Insignia and Ambassador properties,
totaled 30 properties, including 6,707 units for $316,500,000.
- The number of owned or operated apartment units increased from 192,000 to
over 380,000, making AIMCO larger than its three largest REIT competitors
on a combined basis.
- The number of employees increased to almost 13,000 making AIMCO a
national enterprise.
- AIMCO 1998 Total Return of 7.8% exceeded the Morgan Stanley REIT Index
which had a negative return of 16.7%. On the basis of Total Return for
1998, AIMCO ranked 9th among the 82 equity REITs with market
capitalizations in excess of $500,000,000 for the year, (6th of the 44
equity REITs with market capitalizations over $1,000,000,000) and first
among the 14 apartment REITs of similar size.
12
<PAGE> 15
- AIMCO Total Return since inception (July 1994) is 172.5% or 25.4%
annualized which is in excess of the Morgan Stanley REIT Index for the
same period by 121.3% or by 14.5% annualized. For the period commencing
January 1, 1995, AIMCO ranked first among the 67 equity REITs with market
capitalization in excess of $500,000,000 in providing Total Return for
Shareholders, and first among the 14 apartment REITs of similar size.
The Compensation Committee considered 1998 to be a year of comparative
excellent performance by the Company. Recognizing Senior Management's
contribution to this performance, the Compensation Committee awarded
Discretionary Compensation of $275,000 to Mr. Considine and $235,000 to Mr.
Kompaniez, and approved additional Discretionary Compensation of $2,792,000 to
Other Senior Management.
Incentive Compensation. Beginning in 1997, the Compensation Committee
decided to base Incentive Compensation primarily by reference to "Excess Value
Added", calculated as the amount, if any, by which the Company's Total Return
achieved by other real estate investment trusts (as measured by Morgan Stanley
REIT Index) multiplied by the weighted average market value of the Company's
stock and OP Units outstanding during the measurement period. Up to 15% amount
of Excess Value is available for cash or stock option awards (valued using a
modified Black Scholes formula applied by an investment banking firm).
In 1998, the Company's Total Return was 7.8% which exceeded the negative
16.7% Total Return of the Morgan Stanley REIT Index; the Company's weighted
average equity market value was approximately $1,918,000,000; and Excess Value
Added was $149,000,000. The pool available for Incentive Compensation for 1998
was $22,300,000 (15% of the Excess Value Added). The maximum amount available
for Incentive Compensation is limited by the amount which would be allocated to
the High Performance Units.
The Compensation Committee awarded Senior Management approximately
$3,232,000 in 1998 Incentive Compensation: $1,600,000 in cash and approximately
$1,632,000 in options to acquire approximately 510,205 shares at $36.50 per
share, the closing price of the Company's Common Stock on January 20, 1999, the
date of the award. The Compensation Committee valued the options at $3.20 per
underlying shares, based on the advice of a nationally recognized independent
investment bank that considered the exercise price, the terms of the options,
the lack of transferability of the options, the vesting provisions (60% after
three years and an additional 20% annually for years four to five), and the
likely dividend rate on the underlying stock.
High Performance Units. Effective January 1, 1998, the Company sold to a
partnership owned by fourteen members of Senior Management (70% by a Considine
family partnership, 14% owned by Mr. Kompaniez and 16% owned by twelve members
of Senior Management) and directors Martin, Rhodes and Smith, certain High
Performance Units ("HPUs"). The sale of HPUs was ratified by stockholder vote at
the Company's 1998 Annual Stockholders Meeting. The HPUs have the following
features:
- They represent equity in the Company and were sold at a cash cost of
$2,070,000, paid entirely from the personal resources of the purchasers;
- They will have nominal value unless the Company's Total Return for the
three year period from 1998 through 2000 exceeds the greater of 115% of
the Total Return of the Morgan Stanley REIT INDEX (or such other index as
the Compensation Committee shall determine) or 30% (any value will be
represented by nontransferable equity securities of AIMCO);
- Total Return in excess of this benchmark is considered Excess Shareholder
Return and the HPUs receive distributions and allocations of income and
loss from the Operating Partnership based on 15% of the Excess
Shareholder Return.
Based upon the Company's actual 1998 performance versus the Morgan Stanley
REIT Index, the HPUs would have had a zero value because the minimum Total
Return standard was not met, even though the Company's Total Return was in
excess of the benchmark and produced Excess Value Added of $149,000,000.
The Compensation Committee considers the HPUs the principal method of
retaining key members of management and incentivising the 14 members of
management who own HPUs to focus on achieving superior
13
<PAGE> 16
Total Return to Shareholders. It is anticipated that additional HPUs may be sold
to certain members of Senior Management when the 1998-2000 measuring period
ends.
Chief Executive Officer and President. In granting the options described
above, and in determining the compensation for the Chief Executive Officer and
the President, the Compensation Committee considered, among other things, the
Company's 1998 financial performance as described above. In addition, the
Committee considered the fact that while the relative performance of the Company
was excellent, the overall Total Return of 7.8% was below satisfactory levels of
return. Terry Considine, the Company's Chief Executive Officer, and Peter
Kompaniez, the Company's President, received the following compensation in 1995
through 1998:
<TABLE>
<CAPTION>
TERRY CONSIDINE PETER KOMPANIEZ
------------------------------------------- -----------------------------------------
1995 1996 1997 1998 1995 1996 1997 1998
-------- -------- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Base Compensation........ $257,500 $267,500 $ 275,000 $275,000 $227,500 $227,500 $235,000 $235,000
Discretionary
Compensation........... $ 6,000 $ 20,000 $ 275,000 $275,000 $ 6,000 $ 20,000 $235,000 $235,000
Incentive Compensation
Cash................... -- -- $1,785,000 $750,000 -- -- $565,000 $500,000
Options to purchase.... -- 165,000 2,740,000 150,000 -- 87,000 815,000 75,000
</TABLE>
- - ---------------
(1) Options to purchase is number of shares granted. Excludes shares of common
stock underlying options granted in 1995 through 1998, which were
immediately exercised to purchase shares of common stock.
Date: March 22, 1999 J. LANDIS MARTIN (CHAIRMAN)
RICHARD S. ELLWOOD
THOMAS L. RHODES
JOHN D. SMITH
The above report will not be deemed to be incorporated by reference into
any filing by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates the same by reference.
EMPLOYMENT ARRANGEMENTS
Each of Messrs. Considine, Kompaniez and Ira receive annual cash
compensation pursuant to employment contracts with the Company. The initial
two-year term of each of these contracts expired in July 1996 but the contracts
are automatically renewed for successive one-year terms unless the officer is
terminated by the Company. The base salary payable under the employment
contracts is subject to annual review and adjustment by the Compensation
Committee. The base annual salaries of Messrs. Considine, Kompaniez and Ira are
$275,000, $235,000 and $200,000, respectively, for 1998 and 1999. Each of
Messrs. Considine, Kompaniez and Ira are also eligible for a bonus set by the
Compensation Committee. See "Compensation Committee Report to Stockholders."
The employment contracts provide that upon a change in control of the
Company or a termination of employment under certain circumstances, the employee
will be entitled to a payment equal to three times the average annual salary for
the previous three years. The contracts provide that during the term of the
contract and for one year thereafter, except with respect to certain existing
investments held by the employee (which the employees have committed to
liquidate in an orderly manner), in no event will the employees engage in the
acquisition, development, operation or management of other multifamily rental
apartment properties outside of the Company. In addition, the contracts provide
that the employees will not engage in any active or passive investment in
property relating to multifamily rental apartment properties, with the exception
of the ownership of up to 1% of the securities of any publicly-traded company
involved in those activities.
14
<PAGE> 17
STOCK PRICE PERFORMANCE GRAPH
The following graph compares cumulative total returns for the Company's
Common Stock ("AIMCO"), the Standard & Poor's 500 Total Return Index (the "S&P
500"), the SNL Equity REIT Index, the SNL Residential REIT Index and the Morgan
Stanley REIT Index from July 29, 1994, the date on which the initial public
offering of the Company's Common Stock was consummated (except for the Morgan
Stanley REIT Index, which begins on December 31, 1994, the date that results for
the index were first published), to December 31, 1998. The SNL Equity REIT Index
and the SNL Residential REIT Index were prepared by SNL Securities, an
independent research and publishing firm specializing in the collection and
dissemination of data on the banking, thrift and financial services industries.
The Morgan Stanley REIT Index is published by Morgan Stanley & Co. Incorporated,
an investment banking company. The indices are weighted for all companies that
fit the definitional criteria of the particular index and are calculated to
exclude companies as they are acquired and add them to the index calculation as
they become publicly traded companies. All companies of the definitional
criteria in existence at the point in time presented are included in the index
calculations. The graph assumes the investment of $100 in the Company's Common
Stock and in each index on July 29, 1994 (other than the Morgan Stanley REIT
Index, which assumes investment of $100 on December 31, 1994), and that all
dividends paid have been reinvested.
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
STOCK PRICE PERFORMANCE
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
MEASUREMENT
PERIOD SNL MORGAN
(FISCAL YEAR SNL EQUITY RESIDENTIAL STANLEY
COVERED) AIMCO S&P 500 REIT INDEX REIT INDEX REIT INDEX
<S> <C> <C> <C> <C> <C>
7/29/94 100 100 100 100 N/A
12/31/94 94.78 102.85 98.29 99.73 100
12/31/95 116.08 141.49 113.22 113.22 112.90
12/31/96 183.47 173.84 153.77 148.20 153.42
12/31/97 253.55 231.86 185.13 171.95 181.92
3/31/98 269.58 260.84 186.11 173.02 180.63
6/30/98 280.68 269.45 177.61 169.35 172.69
9/30/98 272.37 242.65 158.26 160.52 154.46
12/31/98 276.83 294.32 154.27 158.67 151.18
1997
1998
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDING
--------------------------------------------------------------------------------------------
7/29/94 12/31/94 12/31/95 12/31/96 12/31/97 3/31/98 6/30/98 9/30/98 12/31/98
------- -------- -------- -------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AIMCO................ $100.00 $ 94.78 $116.08 $183.47 $253.55 $269.58 $280.68 $272.37 $276.83
S&P 500.............. $100.00 $102.85 $141.49 $173.84 $231.86 $260.84 $269.45 $242.65 $294.32
SNL Equity REIT
Index............... $100.00 $ 98.29 $113.11 $153.77 $185.13 $186.11 $177.61 $158.26 $154.27
SNL Residential REIT
Index............... $100.00 $ 99.73 $113.22 $148.20 $171.95 $173.02 $169.35 $160.52 $158.67
Morgan Stanley REIT
Index............... N/A $100.00 $112.90 $153.42 $181.92 $180.63 $172.69 $154.46 $151.18
</TABLE>
The Stock Price Performance Graph will not be deemed to be incorporated by
reference into any filing by the Company under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates the same by reference.
15
<PAGE> 18
CERTAIN RELATIONSHIPS AND TRANSACTIONS
From time to time, the Company has entered into various transactions with
certain of its executive officers and directors. The Company attempts to price
such transactions based on fair market value, and believes that the transactions
are on terms that are as favorable to the Company as could be achieved with
unrelated third parties.
FORMATION OF MANAGEMENT COMPANIES
From time to time the Company has formed corporations (the "Management
Companies") in which the Operating Partnership holds non-voting preferred stock
representing a 95% economic interest in such corporations. The remaining 5%
economic interest, which represents 100% of the voting interest, is owned by
certain of the Company's executive officers, including Messrs. Considine,
Kompaniez and Ira. The Management Companies were formed to engage in businesses
generally not permitted under the REIT provisions of the Internal Revenue Code.
Although transactions between the Company and the Management Companies are not
at arm's length, the Company believes that such transactions are at fair market
value.
During 1997, in connection with the acquisition of NHP and certain related
assets, the following Management Companies were formed: AIMCO/NHP Holdings, Inc.
("ANHI"), NHP Management Company ("NHPMC"), AIMCO/NHP Properties, Inc. ("ANPI")
and NHP A&R Services, Inc. ("NHPAR"). Messrs. Considine and Kompaniez,
collectively, own 5% of the outstanding stock of each of NHPAR, NHPMC, ANHI and
ANPI. Prior to July 1, 1998, Messrs. Considine and Kompaniez, collectively,
owned 5% of the outstanding stock of Property Asset and Management Services,
Inc. ("PAMS, Inc."), a Management Company formed in 1996. On July 1, 1998, each
of Messrs. Considine and Kompaniez and the Operating Partnership contributed all
of their stock in PAMS, Inc. to NHPMC. Because the relative share ownership of
PAMS, Inc. and NHPMC by Messrs. Considine and Kompaniez and the Operating
Partnership was identical, no additional shares of NHPMC were issued in
consideration for the contribution.
For the year ended December 31, 1998, Messrs. Considine and Kompaniez have
received dividends of approximately $232,000 and $46,000, respectively, on their
shares of common stock of the Management Companies and the Company has received
dividends of $5,284,000 on its shares of preferred stock of the Management
Companies. All of the amounts paid as dividends to Messrs. Considine and
Kompaniez were used to pay interest and/or principal due under promissory notes
to the Company and the Management Companies.
TRANSACTIONS WITH THE MANAGEMENT COMPANIES
When the Company owns a significant interest in a real estate partnership,
the management contract for the property owned by that real estate partnership
may be assigned by the Management Companies to the Operating Partnership. During
1998, Management Companies assigned their rights under a total of 330 management
contracts to the Operating Partnership in exchange for the Operating Partnership
assuming all obligations under such contracts.
During 1998, in connection with the merger of Insignia Financial Group,
Inc. into the Company, the Operating Partnership transferred its subsidiary, AG
Management LLC, to NHPMC. NHPMC executed a note for $45,000,000 in favor of the
Operating Partnership in respect of certain obligations assumed by the Operating
Partnership. The highest amount of indebtedness existing under the note during
1998 was $45,000,000. The rate of interest under the note is 8.5%. The amount
outstanding under the note was $45,000,000 as of December 31, 1998.
During 1998, the Operating Partnership formed a partnership, AG Services,
L.P., with NHPMC and NHPAR in connection with a cost sharing arrangement with
the Company. Under this arrangement, AG Services, L.P. serves as a common
paymaster agent and employs certain individuals who provide services to
properties that are managed by NHPMC, NHPAR and/or the Operating Partnership.
16
<PAGE> 19
STOCK PURCHASE LOANS
From time to time, the Company makes loans to its executive officers to
finance their purchase of shares of Common Stock from the Company. All loans
made prior to 1998 bear interest at the rate of 7.25% per annum. During 1998,
the Company sold 152,860 shares of Common Stock to Messrs. Bonder, Howard and
Foye for an aggregate purchase price of $5,648,000. In each case, the purchase
price was equal to the closing price of the Common Stock on the New York Stock
Exchange on the date of sale. In payment for such shares, Messrs. Bonder, Howard
and Foye executed notes payable to the Company bearing interest at 7.0%, 7.0%
and 6.25%, respectively, per annum, payable quarterly, and due in 2008. The
interest rate on the loans is based upon the Company's cost of borrowing under
its line of credit.
The following table sets forth certain information with respect to these
loans to executive officers.
<TABLE>
<CAPTION>
HIGHEST AMOUNT AMOUNT REPAID
OWED DURING SINCE INCEPTION
NAME INTEREST RATE 1998 (THRU 3/8/99) 3/8/99 BALANCE
---- ------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Terry Considine........................ 7.25% $22,020,964 $19,619,183 $ 16,216,252
Peter K. Kompaniez..................... 7.25% 4,124,478 8,137,031 3,799,234
Steven D. Ira.......................... 7.25% 3,052,093 131,400 2,962,310
Thomas W. Toomey....................... 7.25% 1,363,946 4,569,804 1,197,866
Harry G. Alcock........................ 7.25% 404,289 136,478 270,522
David L. Williams(1)................... 7.25% 1,568,309 1,578,960 --
Troy D. Butts.......................... 7.25% 1,048,619 36,225 1,013,783
Joel F. Bonder......................... 7.00% 1,200,000 28,850 1,171,150
Robert Ty Howard....................... 7.00% 1,447,500 22,491 1,425,010
Patrick J. Foye........................ 6.25% 3,000,024 125,000 2,875,024
----------- ----------- --------------
$39,230,222 $34,385,422 $ 30,931,151
=========== =========== ==============
</TABLE>
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(1) Mr. Williams resigned his position with the Company in January 1999.
MANAGEMENT OF CERTAIN PROPERTIES
Mr. Considine retains the Company to manage one property owned by his
affiliates. This contract is on similar terms as contracts with other property
owners and is terminable upon 30 days notice. During 1998, an aggregate of
$76,200 in management fees were paid to the Company for management of this
property.
SALE OF HIGH PERFORMANCE UNITS
In January 1998, the Operating Partnership sold an aggregate of 15,000
Class I High Performance Partnership Units of the Operating Partnership (the
"HPUs") to SMP, L.L.C. ("SMP"), a joint venture formed by fourteen of the
Company's officers, and to Messrs. Martin, Rhodes and Smith for an aggregate
purchase price of $2,070,000, of which $1,980,000 was paid by SMP and an
aggregate of $90,000 was paid by three non-employee directors. The purchase
price of the HPUs was determined by the Board of Directors, based upon the
advice of a nationally recognized independent investment bank that this purchase
price represented the fair market value of the HPUs. The sale of the HPUs was
ratified and approved by the Company's stockholders at the 1998 Annual Meeting.
See "Compensation Committee Report to Stockholders."
SALE OF BRANDON LAKES, LTD.
On September 24, 1998, Messrs. Considine and Ira and other partners of
Brandon Lakes, Ltd. transferred all of their respective interests in Brandon
Lakes, Ltd. to the Operating Partnership and its affiliate, AIMCO Holdings, L.P.
Brandon Lakes, Ltd. owns a multifamily residence commonly known as Sun Lake
Apartments, located in Brandon, Florida. The total purchase price for all the
interests in Brandon Lakes, Ltd. was approximately $4,300,000. Mr. Considine
received 1,208 OP Units valued at $41,000 for the transfer of his
17
<PAGE> 20
interests in Brandon Lakes, Ltd. Mr. Ira received 241 OP Units valued at $8,000
for the transfer of his interests in Brandon Lakes, Ltd.
OTHER MATTERS
Section 16(a) Compliance. Section 16(a) of the Exchange Act requires the
Company's executive officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports (Forms 3, 4 and 5) of stock ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC") and the New York Stock Exchange.
Officers, directors and beneficial owners of more than ten percent of the
Company's stock are required by SEC regulations to furnish the Company with
copies of all such forms that they file.
Based solely on the Company's review of the copies of Forms 3, 4 and 5 and
the amendments thereto received by it for the year ended December 31, 1998, or
written representations from certain reporting persons that no Forms 5 were
required to be filed by those persons, the Company believes that during the
period ended December 31, 1998, all filing requirements were complied with by
its executive officers, directors and beneficial owners of more than ten percent
of the Company's stock, with the exception of the following: Mr. Considine filed
a Form 5 on January 29, 1999, which disclosed the acquisition of OP Units; Mr.
Ira filed a Form 5 on January 29, 1999, which disclosed the acquisition of OP
Units and the sale of Common Stock; and Messrs. Williams and Rhodes each filed a
Form 5 on January 29, 1999, which disclosed the sale of Common Stock.
Stockholders' Proposals. Proposals of stockholders intended to be presented
at the Company's Annual Meeting of Stockholders to be held in 2000 must be
received by the Company, marked to the attention of the Secretary, no later than
November 25, 1999. Proposals must comply with the requirements as to form and
substance established by the SEC for proposals in order to be included in the
proxy statement.
Other Business. The Company knows of no other business that will come
before the Meeting for action. As to any other business that comes before the
Meeting, the persons designated as proxies will have discretionary authority to
act in their best judgment.
Available Information. The Company files annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and
copy any reports, statements or other information that the Company files at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. The Company's public filings are also available
to the public from commercial document retrieval services and at the Internet
World Wide Web site maintained by the SEC at "http://www.sec.gov." Reports,
proxy statements and other information concerning the Company also may be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005.
The SEC allows the Company to "incorporate by reference" information into
this Proxy Statement, which means that the Company can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
Proxy Statement, except for any information superseded by information contained
directly in the Proxy Statement. This Proxy Statement incorporates by reference
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998 (Commission file No. 1-13232). This document contains important information
about the Company and its financial condition.
The Company incorporates by reference additional documents that the Company
may file with the SEC between the date of this Proxy Statement and the date of
the Meeting. These include periodic reports, such as Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as
proxy statements.
18
<PAGE> 21
If you are a stockholder, the Company may have sent you some of the
documents incorporated by reference, but you can obtain any of them through the
Company or the SEC or the SEC's Internet World Wide Web site described above.
Documents incorporated by reference are available from the Company without
charge, excluding all exhibits unless specifically incorporated by reference as
exhibits in the Proxy Statement. Stockholders may obtain documents incorporated
by reference in this Proxy Statement by requesting them in writing from the
Company at the following address:
Apartment Investment and Management Company
1873 South Bellaire Street
Suite 1700
Denver, Colorado 80222-4348
If you would like to request documents from the Company, please do so by
April 9, 1999 to receive them before the Meeting. If you request any
incorporated documents, they will be mailed to you by first-class mail, or other
equally prompt means, within two business days of receipt of your request.
You should rely only on the information contained or incorporated by
reference in this Proxy Statement to vote your shares at the Annual Meeting of
Stockholders. The Company has not authorized anyone to provide you with
information that is different from what is contained in this Proxy Statement.
This Proxy Statement is dated March 25, 1999. You should not assume that the
information contained in the Proxy Statement is accurate as of any date other
than that date.
THE BOARD OF DIRECTORS
March 25, 1999
Denver, Colorado
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<PAGE> 22
- - --------------------------------------------------------------------------------
PROXY
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE SIX
NOMINEES
FOR DIRECTOR AND THE PROPOSAL REFERRED TO IN 2 BELOW
The undersigned hereby appoints Terry Considine and Peter K. Kompaniez and
each of them the undersigned's true and lawful attorneys and proxies (with full
power of substitution in each) to vote all Common Stock of Apartment Investment
and Management Company (the "Company"), standing in the undersigned's name, at
the Annual Meeting of Stockholders of the Company to be held at 1873 South
Bellaire Street, Suite 1700, Denver, Colorado 80222-4348, on April 22, 1999 at
9:00 a.m., Denver time (including any adjournments or postponements thereof, the
"Stockholders' Meeting"), upon those matters as described in the Proxy Statement
for the meeting and such other matters as may properly come before such meeting.
A vote FOR the following proposals described in the Proxy Statement for the
Stockholders' Meeting is recommended:
1. Election of the following nominees for director: Terry Considine, Peter K.
Kompaniez, Richard S. Ellwood, J. Landis Martin, Thomas L. Rhodes and John D.
Smith.
<TABLE>
<S> <C> <C>
[ ] FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY for all [ ] WITHHOLD AUTHORITY for any Individual Nominee(s)
Nominees (Write the name(s) of the nominee(s) in the space
below)
</TABLE>
- - --------------------------------------------------------------------------------
2. Ratification of the selection of Ernst & Young LLP as independent auditors
for the calendar year ending December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be dated and signed on the reverse side.)
- - --------------------------------------------------------------------------------
<PAGE> 23
- - --------------------------------------------------------------------------------
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PROXY FOR COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS ON
APRIL 22, 1999
If any other business is transacted at the Stockholders' Meeting, the Proxy
shall be voted in accordance with the best judgment of the above-named attorneys
and proxies.
Dated:
---------------------------------------- ,
1998
----------------------------------------
(Signature of Stockholder)
----------------------------------------
(Signature of Stockholder)
Please sign your name exactly as it
appears hereon. If acting as attorney,
executor, trustee, or in other
representative capacity, please sign
name and title. If stock is held
jointly, each joint owner should sign.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN
THE
ENCLOSED ENVELOPE
- - --------------------------------------------------------------------------------
