<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 (S) 240.14a-11(c) or (S) 240.14a-12
Security Capital Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(4) 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:
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Notes:
<PAGE>
SECURITY CAPITAL GROUP INCORPORATED
125 Lincoln Avenue
Santa Fe, New Mexico 87501
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 25, 2000
To the shareholders:
The 2000 annual meeting of shareholders of Security Capital Group
Incorporated will be held on Thursday, May 25, 2000, at the Fairmont Hotel,
200 N. Columbus Drive, Chicago, Illinois 60601 at 9:30 a.m. (Chicago time) for
the following purposes:
1. To elect four Class I Directors to serve until the annual meeting of
shareholders in 2003, and until their successors are duly elected and
qualify; and
2. To transact such other business as may properly come before the
meeting and any adjournment or postponement thereof.
Shareholders of record at the close of business on March 31, 2000, are
entitled to notice of, and to vote at, the meeting.
Please review the accompanying Proxy Statement for information regarding
the meeting, and promptly mark, date, sign and return the enclosed proxy card
in the envelope provided for your convenience. If you attend the meeting and
decide to vote in person, you may revoke your proxy.
Beneficial holders planning to attend the meeting are urged to pre-register
so that your identity as a shareholder may be verified in advance.
Jeffrey A. Klopf
Secretary
April 10, 2000
YOUR VOTE IS IMPORTANT.
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN
YOUR PROXY IN THE ENCLOSED ENVELOPE,
OR SUBMIT YOUR VOTE BY TELEPHONE OR BY INTERNET.
<PAGE>
SECURITY CAPITAL GROUP INCORPORATED
125 Lincoln Avenue
Santa Fe, New Mexico 87501
PROXY STATEMENT
FOR
2000 ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 25, 2000
GENERAL INFORMATION
The Board of Directors of Security Capital Group Incorporated is soliciting
proxies to be voted at the 2000 annual meeting of shareholders to be held on
Thursday, May 25, 2000. This proxy statement provides information concerning
the use of the proxy and the business to be transacted at the annual meeting.
If a shareholder specifies a choice with respect to any matter to be acted
upon, the proxy holders will vote the shares represented by the proxy in
accordance with the shareholder's specifications. If a shareholder returns an
executed proxy without specifying a choice, the proxy holders will vote the
shares represented by the proxy in accordance with the recommendations of the
Board.
If you are a registered owner and plan to attend the meeting in person, you
may request an admission ticket by marking the attendance box on your attached
proxy card. Beneficial owners whose ownership is registered under another
party's name and who plan to attend the meeting in person may obtain admission
tickets in advance by sending written requests, along with proof of ownership,
such as a bank or brokerage firm account statement, to: Lucinda G. Marker,
Vice President and Assistant Secretary, Security Capital Group Incorporated,
125 Lincoln Avenue, Santa Fe, New Mexico 87501. Registered owners and
beneficial owners who do not present valid admission tickets at the meeting or
who have not pre-registered will be admitted only upon verification of
ownership at the registration counter at the meeting.
Any shareholder giving a proxy has the right to revoke it at any time
before it is voted by giving written notice to the Secretary of Security
Capital, by delivering to the Secretary of Security Capital a duly executed
proxy bearing a later date or by attending the meeting and voting in person.
Security Capital will bear the cost of soliciting proxies. In addition to
solicitation by mail, proxies may be solicited personally, or by telephone,
facsimile transmission or other electronic means by officers or employees of
Security Capital. Security Capital will also request banking institutions,
brokerage firms, custodians, trustees, nominees, fiduciaries and similar
parties to forward the solicitation material to the beneficial owners of Class
A Shares and Class B Shares held of record by those persons, and Security
Capital will, upon request of those record holders, reimburse forwarding
charges and expenses.
This proxy statement is being sent on April 10, 2000.
SHARES OUTSTANDING AND VOTE REQUIRED
At the close of business on March 31, 2000, the record date for
determination of shareholders entitled to receive notice of, and to vote at,
the meeting (the "Record Date"), approximately 1,190,361.5 Class A Shares,
50,436,681 Class B Shares and 257,642 Series B Preferred Shares were
outstanding. For the election of each nominee for Director, each whole Class A
Share outstanding on the Record Date is entitled to one vote, and each
fractional Class A Share is entitled to its fraction of one vote or a total of
1,190,361.5 for all outstanding Class A Shares. Each Class B Share outstanding
on the Record Date is entitled to .005 of a vote, or a total of 252,183 votes
for all outstanding Class B Shares. Each Series B Preferred Share outstanding
on the Record Date is entitled to .0641 of a vote, or a total of 16,516 votes
for all outstanding Series B Preferred Shares. There is no right to cumulative
voting. The Class A Shares, the Class B Shares and the Series B Preferred
Shares will vote as a single class for the election of Directors. As of the
Record Date, these shares had a total of 1,459,060.5 votes for the election of
Directors. A majority of all votes entitled to be cast in person or by proxy
will constitute a quorum at the meeting.
<PAGE>
If a quorum is present, the affirmative vote of a plurality of the votes
cast in person or by proxy at the meeting is required to elect each nominee
for Director. Representatives of Security Capital's transfer agent will assist
Security Capital in the tabulation of the votes. Abstentions are counted as
shares represented at the meeting for purposes of determining a quorum. An
abstention has no effect with respect to the election of Directors.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of February 29, 2000, the beneficial
ownership of Class A Shares and Class B Shares (including Class B Shares
issuable upon conversion of Class A Shares or Series B Preferred Shares) for
(i) each Director of Security Capital, (ii) the Chief Executive Officer and
the five other most highly compensated executive officers of Security Capital
(the "Named Executive Officers"), (iii) each person known to Security Capital
to be the beneficial owner of more than 5% of the outstanding Class A Shares
or Class B Shares and (iv) the Directors and executive officers of Security
Capital as a group. The last column shows the percentage of votes represented
by the outstanding voting securities held by such persons. Unless otherwise
indicated in the footnotes, the shares are owned directly, and the indicated
person or entity has sole voting and investment power. The address of each
Director and Named Executive Officer is c/o Security Capital Group
Incorporated at the administrative offices of SCGroup Incorporated located at
7777 Market Center Avenue, El Paso, Texas 79912.
<TABLE>
<CAPTION>
Class A Shares Class B Shares
Name and Address -------------- -------------- Voting
of Beneficial Owner Number(1) %(2) Number(3)(4) %(2)(5) Percentage(6)
- ------------------- -------------- ----- -------------- ------- -------------
<S> <C> <C> <C> <C> <C>
C. Ronald Blankenship
(7).................... 8,968 * 543,407 1.06% .03%
Samuel W. Bodman........ 7,804 * 405,188 * .36%
Hermann Buerger (8)..... 375 * 6,639,955 11.59% 1.13%
John P. Frazee, Jr. (9). 6,067 * 318,366 * .24%
Cyrus F. Freidheim, Jr.
(10)................... 4,741 * 252,066 * .15%
H. Laurance Fuller (11). 4,954 * 262,716 * .16%
Ray L. Hunt (12)........ 38,071 3.19% 2,168,540 4.13% 2.52%
John T. Kelley, III
(13)................... 4,547 * 242,423 * .14%
William D. Sanders (14). 77,513 6.45% 3,949,544 7.24% 4.50%
Peter S. Willmott (15).. 5,830 * 316,516 * .23%
Thomas G. Wattles (16).. 7,352 * 426,535 * .02%
Thomas B. Allin......... 0 28,750 * .00
A. Richard Moore, Jr.... 0 14,092 * .00
Constance B. Moore ..... 2,609 * 197,944 * .08%
Total Directors and
executive officers as a
Group (26 persons)..... 180,687 14.47% 16,620,640 14.61% 9.65%
Commonwealth of
Pennsylvania, Public
School Employes'
Retirement System (17)
5 North 5th Street
Harrisburg, PA 17101... 97,723 8.21% 13,113,690 23.62% 9.52%
United States Steel and
Carnegie Pension Fund
(18)
350 Park Avenue, 17th
Floor
New York, NY 10022..... 74,285 6.24% 3,714,250 6.84% 5.09%
Oppenheimer Capital (19)
Oppenheimer Tower
World Financial Center
New York, NY 10281..... 50,026 4.20% 3,607,594 6.79% 3.81%
Stichting Pensioenfonds
ABP (20)
Oude Lindestraat 70
Postbus 2889
6401 DL Heerlen
The Netherlands........ 89,996 7.56% 4,510,400 8.18% 3.65%
Merrill Lynch & Co.,
Inc. (21)
(on behalf of Merrill
Lynch Asset Management
Group)
World Financial Center,
North Tower
250 Vesey Street
New York, NY 10381..... 0 0 4,112,189 8.12% 1.41%
SCPG Holdings Pte. Ltd.
(22)
250 North Bridge Road
Raffles City Tower
Singapore 179101....... 0 0 3,819,709 7.54% 1.31%
Wellington Management
Company, LLP (23)
72 State Street
Boston, MA 02100....... 0 0 3,307,050 6.53% 1.02%
</TABLE>
2
<PAGE>
- --------
*Less than 1%
(1) Includes Class A Shares which may be acquired upon conversion of
convertible debentures, or the exercise of options or warrants, within 60
days for Messrs. Blankenship (8,582), Bodman (2,549), Buerger (375),
Frazee (2,549), Freidheim (2,549), Fuller (2,549) Hunt (2,549), Kelley
(2,549), Sanders (11,829), Willmott (2,549), Wattles (7,106), Allin (0),
A.R. Moore (0), and for Ms. Moore (1,506), and all Directors and executive
officers as a group (58,334).
(2) For each person who owns restricted stock units which vest within 60 days,
or options or convertible securities which are exercisable within 60 days,
the calculation of the percentage ownership assumes that only that person
has exercised all of his or her options or warrants and converted all of
his convertible securities and that no other person has restricted stock
units which have vested, has exercised any outstanding options or has
converted any convertible securities.
(3) Each Class A Share may be converted at any time into 50 Class B Shares.
Includes Class B Shares which may be acquired upon conversion of Class A
Shares, including Class A Shares which may be acquired upon the exercise
of options or warrants, or upon conversion of convertible debentures, for
Class A Shares as described in footnote 1 above.
(4) Includes Class B Shares which may be acquired upon the exercise of options
or vesting of restricted stock units within 60 days for Messrs.
Blankenship (91,207), Bodman (15,000) Buerger (15,000), Frazee (15,000),
Freidheim (15,000), Fuller (15,000), Hunt (15,000), Kelley (15,000),
Sanders (73,898), Willmott (15,000), Wattles (51,779), Allin (28,750) and
A. R. Moore (12,500), and for Ms. Moore (67,500), and all Directors and
executive officers as a group (700,302).
(5) For each person who owns Class A Shares, the calculation of the percentage
ownership assumes that only that person has converted all of his or her
Class A Shares into Class B Shares and that no other person has converted
any Class A Shares.
(6) Includes only outstanding Class A Shares, Class B Shares and/or Series B
Preferred Shares owned by such person or entity. The percentage is based
on one vote per Class A Share, .005 vote per Class B Share and .0641 vote
per Series B Preferred Share. On the Record Date, the outstanding voting
securities had a total of 1,459,060.5 votes for the election of Directors.
(7) Includes 2,000 Class B Shares held by a corporation of which Mr.
Blankenship is a controlling shareholder.
(8) Mr. Buerger is Executive Vice President of Commerzbank AG in New York.
Commerzbank Aktiengesellschaft, Grand Cayman Bank ("Commerzbank AG, Grand
Cayman Branch"), Two World Financial Center, New York, NY 10281,
beneficially owns 6,606,205 Class B Shares as a result of owning 257,642
Series B Preferred Shares, with respect to all of which it has sole power
to vote or direct the vote and sole power to dispose or direct the
disposition, which shares are included in Mr. Buerger's amount. Mr.
Buerger disclaims beneficial ownership of these shares.
(9) Includes eleven Class A Shares held by Mr. Frazee's children and three
Class A Shares held by his wife.
(10) Includes 100 Class A Shares held by a family trust.
(11) Includes two Class A Shares held by Mr. Fuller's wife.
(12) Includes eight Class A Shares held by family trusts for which Mr. Hunt is
trustee; 1,268 Class A Shares held by a corporation wholly owned by Mr.
Hunt; and 7,154 Class A Shares for which Mr. Hunt shares beneficial
ownership pursuant to a power of attorney. Excludes 3,521 Class A Shares
which Mr. Hunt's wife owns as separate property and 23,772 Class A Shares
held by Hunt Financial Corporation, the capital stock of which is held
indirectly through a series of corporation by trusts for the benefit of
Mr. Hunt and members of his family, as to which Mr. Hunt disclaims
beneficial ownership. Includes 250,000 Class B Shares held by family
trusts which have granted Mr. Hunt authority with respect to the voting
and disposition of these shares.
(13) Includes 1,995 Class A Shares held by a trust of which Mr. Kelley is
trustee, and one Class A Share held by Mr. Kelley's wife in the same
trust.
(14) Includes 789 Class A Shares held by the Sanders Foundation; 5,775 Class A
Shares held by Sanders Partners Incorporated; and 2,286 Class A Shares
held by two family partnerships.
3
<PAGE>
(15) Includes three Class A Shares held by Mr. Willmott's children and two
Class A Shares held by Mr. Willmott's wife.
(16) Includes two Class A Shares held by Mr. Wattles' wife, eight Class A
Shares held by his children and 7,170 Class B Shares held in an IRA
account.
(17) Information with respect to the beneficial ownership of Commonwealth of
Pennsylvania Public School Employes' Retirement System ("PSERS") is
included herein in reliance on an amended Schedule 13G dated January 31,
2000, filed with the SEC. The amended Schedule 13G indicates that PSERS
has sole power to vote or direct the vote of 97,723 Class A Shares and
sole power to vote or direct the vote of 8,227,540 Class B Shares and
sole power to dispose or direct the disposition of 97,723 Class A Shares
and sole power to dispose or direct the disposition of 8,227,540 Class B
Shares. Prior to the commencement of the Security Capital share
repurchase program in 1999, PSERS had purchased shares in the open market
which represented a 9.8% ownership interest. Because of the Security
Capital share repurchase program and a reduction in the number of shares
outstanding, PSERS exceeded the 9.8% ownership limit contained in
Security Capital's charter. The Board of Security Capital has approved
PSERS holding more than 9.8% of the outstanding shares, provided that
PSERS does not purchase additional shares.
(18) Information with respect to beneficial ownership of United States Steel
and Carnegie Pension Fund is included herein in reliance on a Schedule
13G dated March 13, 2000, filed with the SEC. The Schedule 13G indicates
that United States Steel and Carnegie Pension Fund has sole power to vote
and sole power to dispose of 74,285 Class A Shares.
(19) Information with respect to the beneficial ownership of Oppenheimer
Capital is included in reliance on an amended Schedule 13G dated February
11, 2000, filed with the SEC. The Schedule 13G indicates that Oppenheimer
Capital has shared power to vote or direct the vote of 50,026 Class A
Shares and has shared power to vote or direct the vote of 1,106,294 Class
B Shares and shared power to dispose or direct the disposition of 50,026
Class A Shares and shared power to dispose or direct the disposition of
1,106,294 Class B Shares.
(20) Information with respect to beneficial ownership of Stichting
Pensioenfonds ABP is included herein in reliance on a Schedule 13D dated
January 31, 2000, filed with the SEC. The Schedule 13D indicates that
Stichting Pensioenfonds ABP has sole power to vote or dispose of 89,996
Class A Shares, including 36,832 Class A Shares issuable upon conversion
of convertible subordinated debentures; and sole power to vote or dispose
of 4,510,400 Class B Shares, including 4,499,800 Class B Shares issuable
upon conversion of Class A Shares and convertible subordinated
debentures.
(21) Information with respect to beneficial ownership of Merrill Lynch & Co.,
Inc. (on behalf of Merrill Lynch Asset Management Group) is included
herein in reliance on an amended Schedule 13G dated February 4, 2000,
filed with the SEC. The Schedule 13G indicates that Merrill Lynch & Co.,
Inc. on behalf of Merrill Lynch Asset Management Group has shared power
to vote or direct the vote of 4,112,189 Class B Shares and shared power
to dispose or direct the disposition of 4,112,189 Class B Shares. The
Merrill Lynch Global Allocation Fund, a fund within the Merrill Lynch
Asset Management Group, has shared power to vote or direct the vote of
3,815,100 Class B Shares and shared power to dispose or direct the
disposition of 3,815,100 Class B Shares.
(22) Information with respect to beneficial ownership of SCPG Holdings Pte.
Ltd. is included herein in reliance on a Schedule 13G dated June 12,
1998, filed with the SEC. The Schedule 13G indicates that SCPG Holdings
Pte. Ltd. has shared power to vote or direct the vote of 3,819,709 Class
B Shares and shared power to dispose or direct the disposition of
3,819,709 Class B Shares.
(23) Information with respect to beneficial ownership of Wellington Management
Company, LLP is included herein in reliance on an amended Schedule 13G
dated February 11, 2000, filed with the SEC. The Schedule 13G indicates
that Wellington Management Company, LLP has shared power to vote or
direct the vote of 2,989,600 Class B Shares and shared power to dispose
or direct the disposition of 3,307,050 Class B Shares.
4
<PAGE>
The following table sets forth, as of February 29, 2000, the beneficial
ownership of the outstanding common shares of each of Homestead Village
Incorporated ("Homestead"), Archstone Communities Trust ("Archstone"),
ProLogis Trust ("ProLogis"), Security Capital European Realty ("SC-European
Realty") and Security Capital U.S. Realty ("SC-U.S. Realty"), each of which is
an affiliate of Security Capital, for (i) each Director of Security Capital,
(ii) each Named Executive Officer and (iii) the Directors and executive
officers of Security Capital as a group. The address of each person listed
below is c/o Security Capital Group Incorporated at the administrative offices
of SCGroup Incorporated located at 7777 Market Center Avenue, El Paso, Texas
79912. Unless otherwise indicated in the footnotes, all of the interests are
owned directly, and the indicated person or entity has sole voting and
investment power.
<TABLE>
<CAPTION>
SC-European SC-U.S.
Homestead Archstone ProLogis Realty Realty
------------ ------------ ------------ ------------ -----------
Name of Beneficial Owner Number %(1) Number %(1) Number %(1) Number %(1) Number %(1)
- ------------------------ ------ ---- ------- ---- ------- ---- ------- ---- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
C. Ronald Blankenship
(2).................... 7,311 * 36,030 * 825 * 0 0
Samuel W. Bodman (3).... 0 775 * 32,308 * 0 0
Hermann Buerger......... 0 0 0 0 0
John P. Frazee, Jr. (4). 79,358 * 0 2,935 * 0 0
Cyrus F. Freidheim, Jr.
(5).................... 0 0 9,958 * 0 10,000 *
H. Laurance Fuller (6).. 216 * 1,110 * 2,846 * 0 0
Ray L. Hunt (7)......... 6,511 * 46,007 * 162,671 * 382,500 * 0
John T. Kelley, III (8). 2,739 * 58,585 * 88,833 * 0 25,000 *
William D. Sanders (9).. 3,500 * 0 2,730 * 106,250 * 9,500 *
Peter S. Willmott (10).. 97,709 * 18,922 * 6 * 0 0
Thomas G. Wattles (11).. 1,300 * 12 * 27,715 * 0 0
Thomas B. Allin......... 0 0 0 0 0
A. Richard Moore, Jr.... 0 0 0 0 0
Constance B. Moore...... 0 2,206 * 0 0 0
All Directors and
executive officers as a
Group (26 persons)..... 203,287 * 170,871 * 335,722 * 490,100 * 80,500 *
</TABLE>
- --------
*Less than 1%.
(1) For each person who owns options which are exercisable within 60 days, the
calculation of the percentage ownership assumes that only that person has
exercised all of his options and that no other person has exercised any
outstanding options.
(2) Homestead shares include 2,895 shares held by a corporation of which Mr.
Blankenship is a controlling shareholder. Archstone shares includes 14,936
shares held by a corporation of which Mr. Blankenship is a controlling
shareholder.
(3) Archstone shares include 775 shares held by M. Diane Bodman's IRA account.
ProLogis shares are owned by the Bodman Foundation, a charitable trust for
which Mr. Bodman is trustee and in which Mr. Bodman disclaims any
beneficial interest.
(4) Homestead shares include 22,758 shares held by Mr. Frazee's IRA account,
600 shares held by Mr. Frazee's children, 50,000 shares held by a
corporation of which Mr. Frazee's wife is president and of which Mr.
Frazee is an officer, and options to acquire 6,000 shares. ProLogis shares
include 402 shares held by Mr. Frazee's wife and 1,212 shares held by his
children.
(5) SC-U.S. Realty shares are held by Mr. Freidheim's wife.
(6) Includes 108 Homestead shares held by Mr. Fuller's wife, 555 Archstone
shares held by Mr. Fuller's wife, and 402 ProLogis shares held by Mr.
Fuller's wife.
(7) Homestead shares include 660 shares for which Mr. Hunt shares beneficial
ownership pursuant to powers of attorney, 5,521 shares held by a family
limited partnership of which a corporation which Mr. Hunt owns is the
general partner and 330 shares held by a corporation which Mr. Hunt owns.
Homestead shares exclude 330 shares which Mr. Hunt's wife owns as separate
property and 23,479 shares held by Hunt Financial Corporation, the capital
stock of which is held, indirectly through a series of corporations, by
trusts for the benefit of Mr. Hunt and members of his family, as to which
Mr. Hunt disclaims beneficial ownership.
5
<PAGE>
Archstone shares include 3,742 shares for which Mr. Hunt shares beneficial
ownership pursuant to powers of attorney, 31,192 shares held by a family
limited partnership of which a corporation which Mr. Hunt owns is the
general partner and 1,871 shares held by a corporation which Mr. Hunt
owns. Archstone shares exclude 1,871 shares which Mr. Hunt's wife owns as
separate property and 111,800 shares held by Hunt Financial Corporation,
the capital stock of which is held, indirectly through a series of
corporations, by trusts for the benefit of Mr. Hunt and members of his
family, as to which Mr. Hunt disclaims beneficial ownership.
ProLogis shares include 10,146 shares held by family trusts for which Mr.
Hunt is trustee, 2,534 shares for which Mr. Hunt shares beneficial
ownership pursuant to power of attorney, 146,192 shares held by a family
limited partnership of which a corporation which Mr. Hunt owns is the
general partner and 2,532 shares held by a corporation owned directly by
Mr. Hunt or by trusts for which he is a trustee. ProLogis shares exclude
1,269 shares which Mr. Hunt's wife owns as separate property, as to which
Mr. Hunt disclaims beneficial ownership, and 605,900 shares held by Hunt
Realty Corporation, as to which Mr. Hunt disclaims beneficial ownership.
The SC-European Realty shares include 382,500 shares for which Mr. Hunt
shares beneficial ownership pursuant to powers of attorney. Excludes
425,000 shares owned by Hunt Securities Corporation, as to which Mr. Hunt
disclaims beneficial ownership.
(8) Homestead, SC-U.S. Realty and Archstone shares are held in a trust for
which Mr. Kelley is trustee. Archstone shares include options to acquire
8,000 shares. ProLogis shares include 88,833 shares held by a trust for
which Mr. Kelley is trustee.
(9) Homestead shares include 3,500 shares held by a family partnership.
ProLogis shares include 2,275 shares held by a family partnership and 455
shares held by Mr. Sanders' wife.
(10) Includes four ProLogis shares held by Mr. Willmott's children and two
ProLogis shares held by Mr. Willmott's wife.
(11) Includes 12 Archstone shares held by Mr. Wattles children. Homestead
shares include one share held by Mr. Wattles' child with the remaining
Homestead shares held in an IRA account. ProLogis shares include 2,333
shares held by Mr. Wattles' children, six shares held by his wife and
8,041 shares held in an IRA account.
ELECTION OF DIRECTORS
The designated proxy holders, unless otherwise instructed, will vote shares
represented by the proxy to elect C. Ronald Blankenship, Samuel W. Bodman,
Hermann Buerger and John P. Frazee, Jr. as Class I Directors. If elected, each
nominee will serve as a Director until the annual meeting of shareholders in
2003. If any of the nominees is not available for election, which is not
anticipated, the shares represented by the accompanying proxy will be voted
for the election of another person recommended by the Board. The Board
recommends that shareholders vote FOR the election of each nominee.
6
<PAGE>
Nominees
<TABLE>
<CAPTION>
Business Experience and
Directorships of Publicly Held Director
Director Age Companies since
-------- --- ------------------------------ --------
<C> <C> <S> <C>
C. Ronald Blankenship. 50 Vice Chairman and Chief Operating 1998
Officer of Security Capital since May
1998. Director of CarrAmerica Realty
Corporation and Storage USA, Inc.
Managing Director of Security Capital
from 1991 until 1998. Prior to June
1997, Chairman of Archstone and since
March 2000, Trustee of Archstone.
Interim Chairman, Chief Executive
Officer and Director of Homestead since
May 1999.
Samuel W. Bodman...... 61 Chairman and Chief Executive Officer of 1990
Cabot Corporation since 1988. Director
of Cabot Corporation, John Hancock
Financial Services, Inc., Thermo
Electron Corp. and Westvaco Corp.
Hermann Buerger....... 56 Executive Vice President of Commerzbank 1996
AG. Director of Paging Network
Incorporated and United Dominion
Industries.
John P. Frazee, Jr.... 55 Director, Chairman and Chief Executive 1990
Officer of Paging Network Incorporated
since 1997, and President from 1997 to
1999. Formerly, President and Chief
Operating Officer of Sprint
Corporation. Director of Cable
Satellite Public Affairs Network (C-
SPAN), Vast Wireless Solutions, Dean
Foods Company and Homestead. Mr. Frazee
is also Chairman and Chief Executive
Officer of Vast Wireless Solutions.
</TABLE>
Continuing Directors
The following persons will continue to hold positions as Directors:
Cyrus F. Freidheim, Jr.--64--Vice Chairman of Booz . Allen & Hamilton,
Inc., an international management consulting firm, which he joined in 1966.
Mr. Freidheim is a Director of Household International Inc. and MicroAge, Inc.
Mr. Freidheim is a Class II Director, and his term as Director expires in
2001.
H. Laurance Fuller--61--Co-Chairman and Director of BPAmoco p.l.c. from
January 1999 until March 2000. Formerly Chairman and Chief Executive Officer
of Amoco Corporation. Mr. Fuller is a Director of Abbott Laboratories, Chase
Manhattan Corporation and Motorola, Inc. Mr. Fuller is a Class II Director,
and his term as Director expires in 2001.
Ray L. Hunt--57--Chairman and Chief Executive Officer of Hunt Oil Company
and Chairman, Chief Executive Officer and President of Hunt Consolidated Inc.
Mr. Hunt is a Director of Halliburton Company, Electronic Data Systems
Corporation and PepsiCo, Inc. Mr. Hunt is a Class II Director, and his term as
Director expires in 2001.
John T. Kelley, III--59--Founding Officer and Advisory Trustee of ProLogis
since January 1993. Mr. Kelley has been a Trustee of Archstone since 1988 and
a Director of Regency Realty Corporation since March 1999, prior to which he
served as Chairman of the Board of Pacific Retail Trust. Mr. Kelly is a Class
III Director, and his term as Director expires in 2002.
William D. Sanders--58--Founder, Chairman and Chief Executive Officer of
Security Capital. Mr. Sanders is a Director of CarrAmerica Realty Corporation,
SC-U.S. Realty, SC-European Realty and Storage USA, Inc. and is an Advisory
Director of Regency Realty Corporation. He is a member of the Board of
Governors of the National Association of Real Estate Investment Trusts
(NAREIT). Mr. Sanders is a Class III Director, and his term as Director
expires in 2002.
Peter S. Willmott--62--Chairman and Chief Executive Officer of Willmott
Services, Inc., since 1989. Mr. Willmott is a Director of Federal Express
Corp. Mr. Willmott is a Class III Director, and his term as Director expires
in 2002.
7
<PAGE>
Meetings and Committees
The Board held six meetings in 1999.
The Audit Committee of the Board, composed of Messrs. Fuller (Chairman),
Buerger, Freidheim and Willmott, makes recommendations concerning the
engagement of independent public accountants, reviews the plans and results of
the audit engagement with the independent public accountants, approves
professional services provided by the independent public accountants, reviews
the independence of the independent public accountants, considers the range of
audit and non-audit fees and reviews the adequacy of Security Capital's
internal accounting controls. The Audit Committee held three meetings in 1999.
The Management Development and Compensation Committee (the "Compensation
Committee"), composed of Messrs. Bodman (Chairman), Frazee and Kelley, reviews
and approves compensation arrangements and plans of Security Capital and
administers the various long term incentive plans of Security Capital. The
Compensation Committee held three meetings in 1999.
The Executive Committee, composed of Messrs. Sanders (Chairman), Frazee,
Hunt and Blankenship, has full authority to act on behalf of the Board between
regular meetings of the Board, to the extent permitted by Maryland law. The
Executive Committee held no meetings in 1999.
In November 1999, the Board established a Nominating Committee and elected
Messrs. Frazee (Chairman), Bodman, Fuller and Hunt as members. The Nominating
Committee will have the responsibility to identify and select individuals for
nomination to the Board. The Nominating Committee did not meet in 1999.
During 1999, each Director attended at least 75 percent of the total number
of meetings of the Board and the committees on which he served.
Director Compensation
Security Capital pays an annual retainer of $35,000 to Directors who are
not officers or employees of Security Capital or its affiliates. The retainer
is paid quarterly to the Directors in cash or, at the election of the
Director, in Class A Shares based on the then current fair market value of the
Class A Shares. Non-employee chairpersons of Board committees receive an
additional annual retainer of $3,000 payable in cash or, at the election of
the Director, in Class A Shares based on the then current fair market value of
the Class A Shares. Officers of Security Capital or its affiliates who are
Directors are not paid any Director fees. Directors are reimbursed for any
out-of-town travel expenses incurred in connection with attendance at Board
meetings.
Outside Directors Plan
The purpose of the Security Capital Group Incorporated Outside Directors
Plan (the "Outside Directors Plan") is to enable each Director who is not an
employee or officer of Security Capital or any of its affiliates (an "Outside
Director") to increase their ownership of Security Capital and thereby further
the identity of their interests with those of Security Capital's other
shareholders. The Secretary of Security Capital (the "Administrator")
administers the Outside Directors Plan with a view to Security Capital's best
interests and the Outside Directors Plan's objectives.
Under the Outside Directors Plan, each Outside Director is entitled to
receive on January 1 of each year an option to purchase 7,500 Class B Shares
at a price per Class B Share equal to the fair market value of a Class B Share
on that date. Before March 1998, each Outside Director received an annual
option to purchase 150 Class A Shares at a price per Class A Share equal to
the fair market value of a Class A Share on January 1 of each year.
The number of Class B Shares currently reserved for issuance upon exercise
of options granted under the Outside Directors Plan is 173,750. Options for a
total of 3,525 Class A Shares and 120,000 Class B shares have been issued and
are outstanding under the Outside Directors Plan. In the event of certain
transactions affecting the type or number of outstanding shares, the
Administrator may make adjustments to Class B Shares and options that are
subject to the Outside Directors Plan.
8
<PAGE>
Options granted after March 1998 may be exercised immediately. Options
granted before March 1998 became exercisable one year after the date of grant.
Each option expires on the ten-year anniversary of the date of grant.
EXECUTIVE COMPENSATION
The following table presents compensation for 1999, 1998 and 1997 paid to
the Named Executive Officers:
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------------- ----------------------------------
Class A Class B
Shares Shares Restricted
Underlying Underlying Stock All Other
Other Annual Stock Stock Awards Compensation
Name and Position Year Salary($) Bonus($) Compensation(1) Options (#) Options (#) ($) (2) ($) (3)
- ------------------------ ---- --------- -------- --------------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William D. Sanders-- 1999 650,000 641,500 19,398 -- 375,000 -- 6,216
Chairman and Chief 1998 300,000 781,500 -- -- 295,593 1,732,500 5,070
Executive Officer 1997 300,000 481,150 -- 3,667 -- -- 270
C. Ronald Blankenship-- 1999 550,000 574,150 -- -- 160,000 1,121,250 4,260
Vice Chairman and 1998 275,000 711,500 -- -- 364,831 1,443,750 270
Chief Operating Officer 1997 275,000 525,000 -- 3,248 -- -- 763
Thomas G. Wattles-- 1999 450,000 445,500 2,836 -- 100,000 731,250 7,444
Managing Director 1998 260,000 643,000 -- -- 207,119 1,155,000 5,070
1997 260,000 440,000 -- 2,830 -- -- 132
Constance B. Moore (4) 1999 400,000 507,000 -- 235 360,000 -- 149,954
Managing Director 1998 -- -- -- -- -- 649,688 --
Thomas B. Allin (5) 1999 400,000 401,000 -- -- 40,000 243,750 52,561
Managing Director 1998 33,334 -- -- -- 115,000 -- --
A. Richard Moore, Jr. 1999 400,000 400,000 -- -- 40,000 243,750 7,356
(6)
Managing Director 1998 250,257 362,500 -- 1,070 50,000 707,813 1,000
</TABLE>
- --------
(1) Includes earnings deferred under the non-qualified savings plan.
(2) Amounts shown represent restricted stock unit awards made in 1999 and 1998
under the 1998 Long-Term Incentive Plan. Awards granted in 1998 vest upon
the earlier of December 9, 2003, or the date upon which the Class B Shares
have traded at a closing price of at least $40 per share for ten
consecutive trading days. Awards granted in 1999 vest in one-fourth
increments on the first, second, third and fourth anniversaries of December
1, 1999. The aggregate number of Class B Shares covered by restricted stock
unit awards and the value of the restricted stock unit awards at December
31, 1999, based on the closing price of the Class B Shares on that date,
for the Named Executive Officers were: Mr. Sanders--120,000 shares
($1,500,000); Mr. Blankenship--192,000 shares ($2,400,000); Mr. Wattles--
140,000 shares ($1,750,000); Ms. Moore-- 45,000 shares ($562,500); Mr.
Allin--20,000 shares ($250,000); and Mr. Moore--62,500 shares ($781,250).
(3) Includes contributions made by Security Capital in 1998 and 1999 under its
401(k) savings plan and its non-qualified savings plan and the dollar value
of insurance premiums paid by Security Capital for term life insurance for
the benefit of the Named Executive Officer. Beginning in 1998, Security
Capital has matched up to 50% of the first 6% of compensation contributed
by the employee under the 401(k) savings plan or non-qualified savings plan
with Class B Shares.
(4) Ms. Moore joined Security Capital on January 1, 1999. Class A Share options
were issued in 1999 to replace options surrendered by Ms. Moore to cover
tax payment obligations arising from exercise of options for Class A Common
Stock in 1999 pursuant to the terms of her option agreements. 48.416 of
these Class A options expired on December 31, 1999.
(5) Mr. Allin joined Security Capital on December 1, 1998.
(6) Mr. Moore joined Security Capital in May 1998. The restricted share award
for 1998 includes an award for 7,500 Class B Shares granted to Mr. Moore on
July 8, 1998, under the 1998 Long-Term Incentive Plan in
9
<PAGE>
connection with his initial offer of employment. These awards vest in one-
third increments on each May 21 following the grant date. The value of the
remaining 5,000 Class B Shares of the award at December 31, 1999, was
$62,500.
In December 1998, the Board granted restricted stock unit awards to certain
key executives whom the Compensation Committee deemed critical to the long-
term success of Security Capital to promote long-term retention and provide
incentives to these key executives to achieve targeted shareholder value
goals. The restricted stock unit awards are composed of units which will vest
for a specified number of Class B Shares. The Board granted restricted stock
unit awards to 11 key executives, including the Named Executive Officers
(other than Mr. Allin), for a total of 728,000 Class B Shares, which awards
will vest upon the earlier of December 9, 2003, or the date upon which the
Class B Shares trade at a closing price of at least $40 per share for ten
consecutive trading days. The Board also granted restricted stock unit awards
to 18 other key executives for a total of 540,000 Class B Shares, which awards
will vest 10% on the first anniversary, 20% on the second anniversary, 30% on
the third anniversary, and 40% on the fourth anniversary of the date of grant
(December 9, 1998). All restricted stock unit awards will vest earlier in the
case of the recipient's retirement, disability or death, or upon a change of
control and termination of the recipient's employment.
In December 1999, the Board granted restricted stock unit awards to certain
key executives whom the Compensation Committee deemed critical to the long-
term success of Security Capital to promote long-term retention and provide
incentives to these key executives to achieve targeted shareholder value
goals. The restricted stock unit awards are composed of units which will vest
for a specified number of Class B Shares. The Board granted restricted stock
unit awards to 21 key executives, including the Named Executive Officers
(other than Mr. Sanders and Ms. Moore, each of whom instead elected to receive
options for Class B Shares), for a total of 426,800 Class B Shares, which
awards will vest 25% on the first anniversary, 25% on the second anniversary,
25% on the third anniversary, and 25% on the fourth anniversary of the date of
grant (December 1, 1999). All restricted stock unit awards will vest earlier
in the case of the recipient's retirement, disability or death, or upon a
change of control and termination of the recipients employment.
Option Grants
During 1999, options for 2,552,800 Class B Shares were granted by the
Compensation Committee to 148 key employees and officers of Security Capital
and its affiliates. The following table presents information about individual
grants of options to the Named Executive Officers.
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------
Class B Percent of
Shares Total Exercise Grant
Underlying Options or Date
Options Granted to Base Present
Granted Employees in Price Expiration Value
Name (#)(1) 1999 (%) ($/share) Date ($)(2)
- ---- ---------- ------------ --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
William D. Sanders..... 175,000 $14.6875 8/19/09 $1,124,095
200,000 14.69% $12.1875 12/1/09 $1,066,000
C. Ronald Blankenship.. 160,000 6.27% $14.6875 8/19/09 $1,027,744
Thomas G. Wattles...... 100,000 3.92% $14.6875 8/19/09 $ 642,340
Constance B. Moore..... 270,000 $13.5625 1/1/09 $1,601,478
40,000 $14.6875 8/19/09 $ 256,936
50,000 14.10% $12.1875 12/1/09 $ 266,500
Thomas B. Allin........ 40,000 1.57% $14.6875 8/19/09 $ 256,936
A. Richard Moore, Jr... 40,000 1.57% $14.6875 8/19/09 $ 256,936
</TABLE>
- --------
(1) These options become exercisable in one-fourth increments on the first,
second, third and fourth anniversaries of the dates of grant, except that
such options may be exercised earlier in the case of the optionee's
retirement, disability or death or upon a change of control and
termination of the optionee's employment.
10
<PAGE>
(2) The amounts shown are based on the Black-Scholes option pricing model. The
material assumptions incorporated in the Black-Scholes model for
estimating the value of the options include the following: risk-free
interest rates of 6.58%; expected lives of 6.25 years; no expected
dividends; and expected volatility of 29.57%.
Option Exercises in 1999 and Year-End Option Values
The following table presents information about exercises of options during
1999 by the Named Executive Officers and the year-end value of unexercised
options owned by the Named Executive Officers:
<TABLE>
<CAPTION>
Number of Class A Shares and Value of Unexercised
Class B Shares Underlying in-the-money options at
Unexercised Options at Year-End December 31, 1999($)(1)
Class A Class B ------------------------------- -----------------------
Shares Shares Class A Class B
Acquired Acquired Class A Class B Shares Shares
on on Value Shares Shares Unexer- Unexer-
Exercise Exercise Realized Exercisable Exercisable cisable cisable Exercisable Unexercisable
Name # # # $ # # # $ $
- ---- -------- -------- -------- ----------- ----------- ------- ------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William D. Sanders -- -- -- 3,473 73,898 3,991 596,695 374,480 62,500
C. Ronald Blankenship -- -- -- 7,898 91,207 4,816 433,624 1,675,839 341,364
Thomas G. Wattles -- -- -- 6,543 51,779 4,108 255,340 1,362,519 264,674
Constance B. Moore 998.884 -- $691,942 1,279 67,500 1,282 292,500 34,675 90,506
Thomas B. Allin -- -- -- 0 28,750 0 126,250 0 0
A. Richard Moore, Jr. -- -- -- 0 12,500 1,070 77,500 0 0
</TABLE>
- --------
(1) Based on the December 31, 1999, NYSE closing prices of $620 per Class A
Share and $12 1/2 per Class B Share.
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements
Security Capital has no employment contracts with any executive officer.
Under the Company's 1998 Long-Term Incentive Plan, if (i) a participant's
employment is terminated or constructively terminated by Security Capital or a
successor to Security Capital or an affiliated entity which is his or her
employer for reasons other than cause following a change in control (as
defined in the 1998 Long-Term Incentive Plan) of Security Capital or (ii) the
1998 Long-Term Incentive Plan is terminated by Security Capital or its
successor following a change in control without provision for the continuation
of outstanding awards, all unexpired options will become immediately
exercisable and all restricted stock unit awards will immediately vest. The
Company's 1995 Option Plan (the "1995 Option Plan") contains similar
provisions for options granted under that plan.
Security Capital has entered into change in control agreements with each of
its officers, including the Named Executive Officers. The agreements provide
that, if the officer is terminated or constructively terminated other than for
cause within two years after a change in control of Security Capital, the
officer will be entitled to receive a lump-sum severance payment (the amount
of which depends upon the individual's responsibility level within Security
Capital), together with certain payments and benefits, including continuation
of certain employee benefits. An additional payment will be required to
compensate certain officers for excise taxes imposed upon severance payments
under these agreements. The severance amounts would range from three times the
sum of base salary and target bonus for the year in which termination occurs,
plus pro-rated target bonus through the date of termination, for the three
most senior officers, to one times salary, plus pro-rated target bonus through
the date of termination, for other officers.
As part of A. Richard Moore's original employment offer in May 1998,
Security Capital agreed that if Mr. Moore's employment is terminated without
cause during his initial three years of employment, any unvested restricted
stock unit awards granted as part of his initial employment offer will vest,
and he will receive one year's pay (base salary and target bonus) as severance
pay.
11
<PAGE>
As part of Thomas Allin's original employment offer in November 1998,
Security Capital agreed that if Mr. Allin's employment is terminated without
cause before December 2000, Security Capital will pay Mr. Allin 12 months'
salary, subject to execution of a settlement agreement.
Loans to Executive Officers
See "Certain Relationships and Transactions" for a description of loans
made to executive officers of Security Capital.
1998 Long-Term Incentive Plan
The 1998 Long-Term Incentive Plan authorizes the establishment of one or
more qualified and non-qualified option programs and authorizes the award of
share grants (any of which may be subject to restrictions). A total of
12,257,733 Class B Shares was reserved originally for issuance and 6,759,840
remain available for award at March 1, 2000. In the event of certain
transactions affecting the type or number of outstanding shares, the shares
and awards subject to the 1998 Long-Term Incentive Plan may be adjusted. All
exempt employees of Security Capital or any of its affiliates are eligible to
participate in the 1998 Long-Term Incentive Plan. The Compensation Committee
determines, subject to full Board approval for senior officers, which
employees and other persons providing advisory services to Security Capital
and its affiliates are eligible to receive awards under the 1998 Long-Term
Incentive Plan, and the terms and conditions of those awards. Options expire
on the date determined by the Compensation Committee which will not be later
than the tenth anniversary of the grant date.
The 1998 Long-Term Incentive Plan also provides that the Compensation
Committee may award participants stock, the distribution of which is subject
to the satisfaction of conditions established by the Compensation Committee.
The number of shares and the conditions will be established by the
Compensation Committee at the time the award is made, provided that any
performance period will be at least one year and no more than 2,451,546 Class
B Shares (20% of the total aggregate shares reserved for grant under the 1998
Long-Term Incentive Plan) may be for stock awards. 862,446 Class B Shares
remain available for stock awards at March 1, 2000.
Subject to obtaining any approvals required by applicable law or New York
Stock Exchange requirements, the Board may amend or terminate the 1998 Long-
Term Incentive Plan at any time, provided that no amendment or termination may
materially adversely affect the rights of participants under any award made
under the 1998 Long-Term Incentive Plan prior to the date that the amendment
or termination is adopted by the Board.
1995 Option Plan
The 1995 Option Plan provides for the granting of options to purchase Class
A Shares. The Compensation Committee administers the 1995 Option Plan
determining, among other things, the employees of Security Capital or its
subsidiaries or affiliates to whom awards under the 1995 Option Plan will be
granted, and the exercise price which may not be less than the greater of the
fair market value of an underlying Class A Share on the date of the grant of
the option or the par value of the underlying share. The expiration date for
each option is no later than the ten-year anniversary of the date on which the
option is granted.
Options for up to 35,192 Class A Shares remain available for grant under
the 1995 Option Plan. In the event of certain transactions affecting the type
or number of shares outstanding, the number of shares or awards outstanding
under the 1995 Option Plan may be adjusted.
Subject to obtaining any approvals required by applicable law or New York
Stock Exchange requirements, the Board may amend or terminate the 1995 Option
Plan, at any time, provided that no amendment or termination may materially
adversely affect the rights of any participant or beneficiary under any option
granted under the 1995 Option Plan prior to the date that amendment or
termination is adopted by the Board.
12
<PAGE>
Other Option Plans
Security Capital's predecessors also adopted the Security Capital Realty
Investors Incorporated Option Plans A and B (each, a "Realty Option Plan") and
the Security Capital Group Incorporated 1991 and 1992 Option Plans A and the
1991 and 1992 Option Plans B (each, a "Group Option Plan"). The Realty Option
Plans provide for the grant of options to purchase Class A Shares. Each of the
Group Option Plans provides for the grant of options to purchase Class A
Shares. Generally, all of the plans contain terms substantially similar to the
1995 Option Plan. The number of Class A Shares reserved for issuance pursuant
to options under the Realty Option Plans A and B and the Group 1991 and 1992
Option Plans A and the 1991 and 1992 Option Plans B are 16,366, 3,845, 9,982,
29,946, 7,010 and 21,031, respectively. Of those shares, 957, 0, 484, 3,724,
524 and 538, respectively, remain available for the granting of options
thereunder.
1999 COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is comprised entirely of non-employee directors
and is responsible for acting on behalf of the Board with respect to (i)
general compensation and benefit practices of Security Capital, (ii) reviewing
and making recommendations to the Board of salaries and other compensation
actions for Security Capital's Chief Executive Officer, Named Executive
Officers and other senior executive officers, and (iii) adopting,
administering and approving or recommending the approval by the Board of
awards under annual and long-term incentive compensation plans.
Compensation Philosophy
The Compensation Committee is committed to a compensation philosophy that
rewards employees on the basis of Security Capital's success in attaining
corporate financial objectives as well as on the basis of the employees'
success in attaining individual financial and qualitative performance
objectives. Security Capital's compensation program is designed to:
. Attract, motivate, reward and retain highly qualified executives.
. Align shareholder and employee interests.
. Reward long-term career contributions to Security Capital.
. Emphasize the variable portion of total compensation (cash and stock) as
an individual's level of responsibility increases.
. Provide fully competitive compensation opportunities consistent with
performance.
. Encourage teamwork.
During 1999, the Compensation Committee conducted a review of Security
Capital's executive compensation programs, assessing the effectiveness of the
programs and relative competitiveness versus identified companies of similar
size and business characteristics to Security Capital. This comparable group
included companies from both the real estate investment trust and diversified
financial marketplace representing the most direct competitors for executive
talent. The review was also used to verify that changes made to the
compensation program effective for 1999 were having the desired results.
Key Elements of Compensation
The key elements of Security Capital's executive compensation program are
base salary, employee benefits, annual bonus and long-term stock incentives.
As an executive's level of responsibility increases, a greater portion of
total compensation is based on annual and long-term performance-based
incentive compensation and less on salary and employee benefits, creating the
potential for greater variability in the individual's compensation level from
year to year. The mix, level and structure of performance-based incentive
elements reflect market industry practices as well as the executive's role and
relative impact on business results consistent with Security Capital's
variable pay for performance philosophy.
13
<PAGE>
Base Salary
The philosophy of Security Capital is to provide base salaries that
recognize an individual's ongoing contribution to the organization, are
commensurate with an individual's experience and organization level, and are
competitive with mid-market salary levels of the comparable market benchmarks.
To achieve Security Capital's base salary pay philosophy and desired
competitive posture for 1999, salary levels were generally increased, in some
cases significantly, consistent with the overall responsibilities of the
position, the performance and experience of the individual, and the position
versus mid-market levels of comparable market benchmarks. The increases were
based on an independent compensation consultant's review, which determined
that Security Capital's base salaries for senior management positions in
general, and for the Named Executives in particular, were significantly below
mid-market levels versus comparable companies. Formal, company-wide salary
reviews are conducted every two years, but the Compensation Committee may
adjust salaries on an individual basis as needed at any time.
Annual Bonus
Security Capital's senior executives are eligible for annual cash bonus
awards based on Security Capital, business unit and individual performance
during the prior year. Target bonus award levels have been established for
plan participants based on participants' role, organization level and market
competitive practices as determined by independent compensation consultants.
Annual performance goals are established for eligible annual bonus
participants at the beginning of each fiscal year. For the Named Executive
Officers, the annual performance goals are established during the year by the
Compensation Committee. Generally, performance goals may include financial
measures such as earnings before depreciation, amortization and deferred taxes
(EBDADT), as well as more qualitative measures, such as strategic acquisitions
and deployment of capital, that position Security Capital for growth.
Performance versus these criteria will determine individual awards with
100% achievement resulting in payment of the target bonus award. Awards for
performance below and above this level of achievement will be at the
discretion of the Compensation Committee. Additionally, bonus awards earned
under the program may be further adjusted up or down at the discretion of the
Compensation Committee based on the quality of the results, extraordinary
circumstances, and other factors that the Compensation Committee deems
relevant.
Based on 1999 individual, business unit and Security Capital performance
results, the Compensation Committee approved an aggregate bonus award equal to
75% of the aggregate target level. Additionally, a discretionary bonus pool
was established to be awarded to key executives and top performers based on a
review by senior management.
Long-Term Stock Incentives
Long-term stock incentives are designed to foster significant ownership of
Security Capital stock, promote a close identity of interests between Security
Capital senior executives and shareholders, and motivate and reward long-term
strategic management and enhancement of shareholder value.
Since Security Capital was founded, non-qualified stock options have been
the primary long-term incentive vehicle and constitute a major component of
senior executive compensation. Option awards generally reflect the executive's
level of responsibility and impact on the long-term success of Security
Capital. Additionally, consideration is given to an executive's potential for
future responsibility and impact on longer term results. Stock options were
granted in August and December 1999 with exercise prices equal to the market
prices on the dates of grant and vest ratably over four years.
In December 1999, restricted stock units were granted on a highly selective
basis to key executives critical to the long-term success of Security Capital
to promote long-term retention. Restricted stock unit awards granted in 1999
vest ratably over four years. Individuals granted restricted stock units
could, at their election, choose to receive stock options in lieu of the
restricted stock unit award on an equal economic basis as determined by
independent compensation consultants.
14
<PAGE>
In the aggregate, the number of stock options and/or restricted stock units
granted in 1999 generally reflects competitive practices of comparable
companies.
The Compensation Committee believes long-term stock incentives are integral
in motivating senior executives to achieve Security Capital's long-range goals
and enhance shareholder value. The Compensation Committee intends to continue
to emphasize this element of the compensation package.
Chief Executive Officer Compensation
The Compensation Committee meets annually without the Chief Executive
Officer present to evaluate his performance and to determine his compensation.
In considering Mr. Sanders' compensation, the Compensation Committee considers
his principal responsibilities, which are to provide the overall vision and
strategic direction and leadership for Security Capital, to attract and retain
highly qualified employees and to develop and maintain key capital
relationships for Security Capital.
Effective for 1999, Mr. Sanders' base salary was increased to $650,000.
This increase was intended to bring Mr. Sanders' base salary to competitive
base salary levels of other Chief Executive Officers in companies of
comparable size and business profile and represents the first increase in base
salary for Mr. Sanders since January 1, 1997.
In determining Mr. Sanders' 1999 annual bonus and long-term incentive
award, the Compensation Committee reviewed the overall performance of Security
Capital and Mr. Sanders' individual performance. During 1999, Security Capital
achieved several important objectives that the Compensation Committee believed
Mr. Sanders was instrumental in achieving:
. A clear plan for unlocking value was developed with the intent of
narrowing the difference between Security Capital's current stock price
and its net asset value.
. The Security Capital share repurchase program was initiated.
. A restructuring of Homestead Village Incorporated was completed.
. The sale of Security Capital's interest in Strategic Hotel Capital was
completed.
. Significant progress was made in reducing Security Capital's operating
expenses. Operating expenses have been reduced 22.8% during 1999.
. Significant progress was made in improving Security Capital's debt
coverage ratio from 1.74X to 2.37X.
In view of these accomplishments, the Compensation Committee recommended an
award for Mr. Sanders of an annual bonus of $650,000 for 1999 (which amount
was reduced by directors' fees received from affiliates of Security Capital).
Additionally, the Compensation Committee recommended a grant to Mr. Sanders of
stock options to acquire 375,000 Class B Shares for 1999. The Compensation
Committee has determined that the combination of the annual bonus award and
stock option grants, in addition to base salary, would place Mr. Sanders'
total compensation at approximate mid-market levels versus the comparable
companies.
The full Board approved these recommendations.
SECTION 162(m)
The Compensation Committee is aware of the limitations imposed by Section
162(m) of the Internal Revenue Code on the deductibility of compensation paid
to certain senior executives to the extent it exceeds $1 million per
executive. The law exempts compensation paid under plans that relate
compensation to performance. Although Security Capital's plans are designed to
relate compensation to performance, certain elements of the plans do not meet
the tax law's requirements because they allow the Compensation Committee to
exercise discretion in setting compensation. The Compensation Committee is of
the opinion that it is better to retain discretion in determining executive
compensation. However, the Compensation Committee will continue to monitor the
requirements of the Internal Revenue Code to determine what actions, if any,
should be taken with respect to Section 162(m).
This report is submitted by the members of the Compensation Committee:
Samuel W. Bodman, John P. Frazee, Jr. and John T. Kelley, III.
15
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on Class A Shares and Class B Shares
against the cumulative total return of the Standard & Poor's Composite--500
Stock Index, the Wilshire Real Estate Securities Index and the Wilshire Real
Estate Operating Company Index for the period beginning September 18, 1997
(the date that the Class A Shares and Class B Shares began trading on the New
York Stock Exchange) and ended December 31, 1999. The Class A Share and Class
B Share price performance shown on the graph is not necessarily indicative of
future price performance.
It would be difficult to develop a peer group of companies similar to
Security Capital. Security Capital is a real estate research, investment and
operating management company engaged in a number of diverse business
activities. A majority of Security Capital's investments are in public and
private strategic real estate operating companies which own and operate
commercial real estate. Security Capital has used for comparative purposes the
Wilshire Real Estate Securities Index, which is comprised of publicly traded
real estate securities of companies which own and operate commercial real
estate. Security Capital is a C Corporation and not a REIT and has therefore
also used for comparative purposes the Wilshire Real Estate Operating Company
Index, which is composed of the securities of other C Corporation real estate
operating companies.
Comparison of Cumulative Total Return(1)
Security Capital Class A Shares, Class B Shares, S&P Composite-500 Stock
Index,
Wilshire Real Estate Securities Index and Wilshire Real Estate Operating
Company Index
[Line Graph Appears Here]
<TABLE>
<CAPTION>
September 18, 1997 December 31, 1997 December 31, 1998 December 31, 1999
------------------ ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Class A Shares $100.00 $112.86 $ 47.14 $ 44.29
Class B Shares 100.00 116.07 48.44 44.64
S&P 500 100.00 102.91 132.32 160.17
Wilshire Real Estate
Securities Index 100.00 104.59 86.36 83.61
Wilshire Real Estate
Operating Company Index 100.00 98.39 76.96 71.32
</TABLE>
(1) Assumes that the value of the investment in Class A Shares and Class B
Shares and each index was $100.00 on September 18, 1997. Also assumes that the
initial investment in Class A Shares and Class B Shares was made at the
initial public offering price of $28.00 per Class B Share (equivalent to
$1,400.00 per Class A Share).
16
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
C. Ronald Blankenship, a Director, Vice Chairman and Chief Operating
Officer of Security Capital, is a party to a full recourse secured note and
related pledge agreement executed in 1996 with Security Capital, under which
Security Capital loaned Mr. Blankenship $925,000. The note is due on the
earlier of January 15, 2005, 120 days after Mr. Blankenship is no longer an
officer of Security Capital or, if a change of control of Security Capital
occurs and Mr. Blankenship's employment with Security Capital is terminated,
one year after such termination. Interest accrues at six percent per year and
is payable annually on January 15 each year the note is outstanding. The note
is secured by Class A Shares of Security Capital, common shares of Archstone,
ProLogis and Homestead owned by Mr. Blankenship, and a life insurance policy
on Mr. Blankenship in the amount of $925,000 which policy names Security
Capital as beneficiary. Mr. Blankenship has also agreed that if he exercises
any options for Security Capital securities prior to payment of the note, any
securities obtained upon exercise of those options will become subject to the
pledge agreement and the net proceeds (after payment of minimum withholding
taxes) from the sale of any securities obtained upon exercise of those options
will be immediately applied to payment of the note.
Thomas G. Wattles, a Managing Director of Security Capital, is a party to a
full recourse secured note and related pledge agreement executed in 1997 with
Security Capital, under which Security Capital loaned Mr. Wattles $418,936.93.
The note is due on the earlier of January 15, 2005, 120 days after Mr. Wattles
is no longer an officer of Security Capital or, if a change of control of
Security Capital occurs and Mr. Wattles' employment with Security Capital is
terminated, one year after such termination. Interest accrues at six percent
per year and is payable annually on January 15 each year the note is
outstanding. The note is secured by Class A Shares of Security Capital, common
shares of ProLogis owned by Mr. Wattles, and by a life insurance policy on Mr.
Wattles in the amount of $536,000, which policy has been assigned to Security
Capital. Mr. Wattles has also agreed that if he exercises any options for
Security Capital securities prior to payment of the note, any securities
obtained upon exercise of those options will become subject to the pledge
agreement and the net proceeds (after payment of minimum withholding taxes)
from the sale of any securities obtained upon exercise of those options will
be immediately applied to payment of the note.
Cyrus F. Freidheim, Jr., a Director, has three unsecured full recourse
notes outstanding with Security Capital: a note dated January 4, 1991, in the
principal amount of $250,000; a note dated April 6, 1992, in the principal
amount of $84,083.34; and a note dated December 31, 1993, in the principal
amount of $166,667. Each note is due on January 4, 2001. Interest on each note
accrues at a floating rate per annum equal to the lowest rate charged by
Morgan Guaranty Trust Company of New York to its most creditworthy corporate
customers for unsecured loans having a maturity of ninety days or less, in
effect from time to time, plus .25%. Interest on each note is payable
annually. Mr. Freidheim used the proceeds of each loan to purchase common
stock of Security Capital.
H. Laurence Fuller, a Director, has three unsecured full recourse notes
outstanding with Security Capital: a note dated January 4, 1991, in the
principal amount of $250,000; a note dated April 6, 1992, in the principal
amount of $84,333.34; and a note dated December 31, 1993, in the principal
amount of $166,667. Each note is due on January 4, 2001. Interest on each note
accrues at a floating rate per annum equal to the lowest rate charged by
Morgan Guaranty Trust Company of New York to its most creditworthy corporate
customers for unsecured loans having a maturity of ninety days or less, in
effect from time to time, plus .25%. Interest on each note is payable
annually. Mr. Fuller used the proceeds of each loan to purchase common stock
of Security Capital.
Constance B. Moore, a Managing Director of the Capital Division of Security
Capital, has two notes outstanding with Security Capital. Security Capital
loaned Ms. Moore $117,250 under an unsecured full recourse note dated
September 1, 1993, of which Ms. Moore has repaid $55,809.24. The note is due
on September 1, 2003. Interest accrues at a floating rate per annum equal to
the lowest rate charged by Morgan Guaranty Trust Company of New York to its
most creditworthy corporate customers for unsecured loans having a maturity of
ninety days or less, in effect from time to time, plus .25%, and is payable
annually. Ms. Moore used the proceeds of the loan to purchase common stock of
Security Capital.
17
<PAGE>
Security Capital loaned Ms. Moore $250,000 under a second secured full
recourse note dated May 10, 1996, which is due on the earlier of January 5,
2006, or 120 days after Ms. Moore is no longer an officer of Archstone or an
affiliate thereof. Interest accrues at a floating rate per annum equal to the
lowest rate charged by Morgan Guaranty Trust Company of New York to its most
creditworthy corporate customers for unsecured loans having a maturity of
ninety days or less, in effect from time to time, plus .25%, and is payable
semiannually on each January 5 and July 5. Ms. Moore used the proceeds of the
note to purchase common shares of Security Capital Atlantic Incorporated,
which are now shares of Archstone. At the time the loan was originally made,
Ms. Moore was an officer of Security Capital Atlantic Incorporated.
Security Capital loaned Ms. Moore $245,625 under another secured full
recourse note dated March 31, 1995. During 1999, Ms. Moore repaid this note in
full. Interest accrued at a floating rate per annum equal to the lowest rate
charged by Morgan Guaranty Trust Company of New York to its most creditworthy
corporate customers for unsecured loans having a maturity of ninety days or
less, in effect from time to time, plus .25%, and was payable semiannually.
Ms. Moore used the proceeds of this note to purchase common shares of
Archstone which shares secured the loan. At the time the loan was originally
made, Ms. Moore was an officer of Archstone.
Paul E. Szurek, Chief Financial Officer of Security Capital, has a loan
outstanding in the principal amount of $95,000 with Security Capital under a
note dated October 30, 1995. The note is due on January 4, 2005, and interest
accrues at a floating rate per annum equal to the lowest rate charged by
Morgan Guaranty Trust Company of New York to its most creditworthy corporate
customers for unsecured loans having a maturity of ninety days or less, in
effect from time to time, plus .25%. Interest is payable semiannually. Mr.
Szurek used the proceeds of the loan to purchase common shares of SC-U.S.
Realty. At the time the loan was originally made, Mr. Szurek was scheduled to
become an officer of SC-U.S. Realty.
Anthony R. Manno, Jr., a Managing Director of the Global Capital Management
Group, has a loan outstanding with Security Capital in the principal amount of
$250,000 under a secured amended and restated note dated December 1, 1999
(originally issued in June 1997). The note is due on January 12, 2003 or 120
days after the date Mr. Manno ceases to be an officer of any affiliate of
Security Capital. Interest on the note accrues at a rate of six percent per
annum and is payable annually. Mr. Manno used the proceeds of the loan to
purchase shares of Security Capital Preferred Growth Incorporated ("Preferred
Growth"), an affiliate of Security Capital, and the note is secured by those
shares.
During 1999, Daniel F. Miranda, formerly a Managing Director of the Global
Capital Management Group, had a loan outstanding with Security Capital in the
principal amount of $250,000 under a secured note dated June 30, 1997. The
note was payable on January 15, 2000, or 120 days after the date Mr. Miranda
ceased to be an officer of any affiliate of Security Capital. Interest on the
note accrued at a rate of six percent per annum, and was payable annually. Mr.
Miranda used the proceeds of the loan to purchase shares of Preferred Growth,
and the note was secured by those shares. In January 2000, as part of Mr.
Miranda's separation from Security Capital, Security Capital and Mr. Miranda
agreed to reduce the principal amount of the note to $242,625, equal to the
then fair market value of the Preferred Growth stock purchased with the
proceeds of the note. In February 2000, the Preferred Growth shares securing
the note were transferred to Security Capital and the note was cancelled.
On September 8, 1997, Security Capital loaned Gordon S. Kerr, formerly a
Managing Director of the Capital Division of Security Capital, $500,000 as
part of Mr. Kerr's original employment agreement under which Security Capital
agreed to loan him funds to purchase 17,857 Class B Shares. No interest was
charged on the loan. In September 1999, as part of Mr. Kerr's separation from
Security Capital, Security Capital and Mr. Kerr agreed to reduce the principal
amount of the loan to $254,462.25, equal to the then fair market value of the
Class B Shares Mr. Kerr had purchased with the proceeds of the loan. In
October 1999, Security Capital redeemed the Class B Shares securing the loan
in exchange for cancellation of the loan.
18
<PAGE>
On September 1, 1999, as part of its $100 million share repurchase program,
Security Capital purchased from entities affiliated with William Sanders,
Chairman and Chief Executive Officer, 225,000 Class B Shares for
$3,192,187.50, or $14.1875 per share, which was the lowest per share sale
price reported by the New York Stock Exchange on September 1. The purchase was
approved by a special committee of outside Directors. In October 1999, Mr.
Sanders purchased 4,500 Class A Shares at $733.75 per share in open market
transactions for a total of $3,301,875.
In February, 1999, Security Capital sold a house located in Santa Fe, New
Mexico, and a community club membership associated with the house to Constance
B. Moore and her husband for $730,000, as part of their relocation to Santa
Fe. Security Capital had purchased the house and membership in July 1997 for
$790,000 from a former employee of Security Capital as part of his relocation.
Ms. Moore and her husband have agreed that if they sell the house for more
than $685,000, Security Capital will receive 50% of the proceeds above
$685,000. Ms. Moore and her husband have no obligation to share with Security
Capital any of the proceeds from a sale of the club membership.
Pursuant to an agreement dated July 1, 1997, SC-U.S.Realty, which during
1999 beneficially owned more than 5% of the Class A Shares and the Class B
Shares and which currently owns no securities of Security Capital, appointed
Security Capital U.S.Realty Management S.A., a wholly owned subsidiary of
Security Capital (the "U.S.Realty Adviser"), as operating advisor to provide
SC-U.S.Realty with advice with respect to strategy, investments, financing,
administrative and all other operating matters affecting SC-U.S.Realty. The
U.S.Realty Adviser receives a single all-inclusive annual advisory fee equal
to 1.25% of SC-U.S. Realty's average monthly market value of assets, excluding
investments in Security Capital securities and investments of short-term cash
and cash equivalents. The fee payable to the U.S.Realty Adviser is reduced to
the extent that the third-party operating and administrative expenses of SC-
U.S.Realty exceed 0.25% of assets per annum. The U.S.Realty Adviser is
responsible for paying all fees of Security Capital Investment Research and
any other Security Capital advisory affiliates for services related to
advising SC-U.S.Realty. The agreement is automatically renewable for
successive two-year periods, unless either the U.S.Realty Adviser, on the one
hand, or SC-U.S.Realty and Security Capital Holdings S.A., a wholly owned
subsidiary of SC-U.S.Realty ("U.S.Realty Holdings"), acting together, on the
other hand, give sixty days' prior written notice that the agreement will not
be renewed. After the first anniversary date of any renewal date, both SC-
U.S.Realty and U.S.Realty Holdings, acting together, may terminate the
agreement on not less than sixty days' prior written notice to the U.S.Realty
Adviser. During the year ended December 31, 1999, the U.S.Realty Adviser
received fees of $32.5 million pursuant to the advisory agreement.
Homestead, an 87%-owned affiliate of Security Capital, has a $110 million
revolving credit facility with Commerzbank AG, New York Branch
("Commerzbank"), as the arranger or agent, and other lenders. On March 18,
1999, the credit facility, which had a maximum principal amount of $170
million, was extended from April 23, 1999, to December 31, 2000. On February
29, 2000, the credit facility was extended to December 31, 2002, and reduced
to $110 million in principal amount. In addition, the facility was converted
into a $85 million term loan and a $35 million revolving credit facility.
Borrowings under the credit facility prior to February 29, 2000, accrued
interest at rates equal to 2.0% to 3.0% over LIBOR, 1% to 2% over the prime
rate or 1.5% to 2.5% over the federal funds rate, with the margin depending
upon the ratio of outstanding indebtedness to the amount of qualifying
collateral. As of February 29, 2000, borrowings accrue interest at rates equal
to 2.5% over LIBOR, 2% over the prime rate and 2.5% over the federal funds
rate.
Homestead also had two other credit facilities, one with Commerzbank, as
the arranger and agent, and other lenders in the maximum principal amount of
$30 million and secured by mortgages on Homestead's urban properties (the
"Urban Line"), and one solely with Commerzbank in the maximum principal amount
of $200 million (the "Bridge Facility"), secured by a subscription agreement
with Security Capital for $200 million of convertible subordinated debentures.
Borrowings under the Urban Line accrued interest at the rate of 3.0% over
LIBOR. Borrowings under the Urban Line were repaid and the Urban Line was
terminated in November 1999.
19
<PAGE>
Borrowings under the Bridge Facility bore interest at the Eurodollar rate plus
1.25% or at a base rate of prime plus 0.25%. The average unfunded balance
accrued a commitment fee of 0.25% per annum. The Bridge Facility was repaid
and terminated in May 1999, with the proceeds of a rights offering in which
Security Capital purchased $214 million of Homestead common stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Security Capital's Directors,
officers and beneficial owners of more than 10 percent of the outstanding
Class A Shares or Class B Shares to file reports of ownership and changes in
ownership of the Class A Shares or Class B Shares with the Securities and
Exchange Commission and to send copies of those reports to Security Capital.
Based solely on a review of those reports and amendments thereto furnished to
Security Capital and on written representations of certain of those persons
that they were not required to file certain of those reports, Security Capital
believes that no such person failed to file any such report on a timely basis
during 1999.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Arthur Andersen LLP ("Arthur Andersen"), certified
public accountants, who have served as auditors for Security Capital since
1991, to serve again as the auditors of Security Capital's books and records
for the coming year. A representative of Arthur Andersen is expected to be
present at the annual meeting and will be given an opportunity to make a
statement if that representative desires to do so and will be available to
respond to appropriate questions.
ANNUAL REPORT
Security Capital's 1999 Annual Report, which includes audited financial
statements, has previously been mailed to shareholders or is being mailed to
shareholders together with this Proxy Statement. The Annual Report does not
constitute a part of the proxy solicitation material.
SHAREHOLDER PROPOSALS
Any proposal by a shareholder of Security Capital intended to be presented
at the 2001 annual meeting of shareholders must be received by Security
Capital at its principal executive offices not later than December 11, 2000,
for inclusion in Security Capital's proxy statement and form of proxy relating
to that meeting.
In addition, shareholders may present proposals which are proper subjects
for consideration at an annual meeting, even if the proposal is not submitted
by the deadline for inclusion in the proxy statement. To do so, the
shareholder must comply with the procedures specified by Security Capital's
bylaws. Security Capital's bylaws require that all shareholders who intend to
make proposals at an annual shareholders' meeting submit their proposals to
the Secretary of Security Capital during the period 75 to 100 days before the
anniversary date of the previous year's annual meeting. To be eligible for
consideration at the 2001 annual meeting, proposals which have not been
submitted by the deadline for inclusion in the proxy statement must be
received by the Secretary of Security Capital between February 14, 2001, and
March 11, 2001.
OTHER MATTERS
Security Capital is not aware of any business or matter other than those
indicated above which may properly be presented at the meeting. If any other
matter properly comes before the meeting, the proxy holders will, in their
discretion, vote thereon in accordance with their best judgment.
Jeffrey A. Klopf
Secretary
April 10, 2000
20
<PAGE>
SKU #1665-PS-00
<PAGE>
SECURITY CAPITAL GROUP INCORPORATED
Annual Meeting of Shareholders
Thursday, May 25, 2000
9:30 a.m. (Central Daylight time)
Fairmont Hotel
200 N. Columbus Drive
Chicago, Illinois 60601
We request that you pre-register for attendance at the meeting
by calling our meeting planning staff
at 1-800-988-4307.
SCG86B DETACH HERE
PROXY
SECURITY CAPITAL GROUP INCORPORATED
THE PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 2000
The undersigned hereby appoints each of William D. Sanders, C. Ronald
Blankenship, Thomas G. Wattles and Jeffrey A. Klopf, as proxies with full power
of substitution, to represent the undersigned at the annual meeting of
shareholders of Security Capital Group Incorporated to be held on May 25, 2000,
and at any adjournments or postponements thereof, and to vote at such meeting
the shares of common stock that the undersigned would be entitled to vote if
present at such meeting, in accordance with the instructions indicated on the
reverse side of this card: if no instructions are indicated, the shares
represented by this proxy will be voted for the election of the listed nominees
for Director, and, at the discretion of the proxies named above, on any other
matter that may properly come before the meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting and
the Proxy Statement together with this Proxy.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The proxies cannot vote
your shares unless you sign and return this card.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
<PAGE>
- -----------------
Vote by Telephone
- -----------------
It's fast, convenient, and immediate! Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683).
- --------------------------------------------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement/Prospectus and Proxy Card.
2. Call the toll-free number 1-877-PRX-VOTE (1-877-779-8683).
3. Enter your 14-digit Voter Control Number located on your Proxy Card
above your name.
4. Follow the recorded instructions.
- --------------------------------------------------------------------------------
Your vote is important!
Call 1-877-PRX-VOTE anytime!
- ----------------
Vote by Internet
- ----------------
It's fast, convenient, and your vote is immediately confirmed and posted.
- --------------------------------------------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement/Prospectus and Proxy Card.
2. Go to the Website http://www.eproxyvote.com/scz
3. Enter your 14-digit Voter Control Number located on your Proxy Card
above your name.
4. Follow the instructions provided.
- --------------------------------------------------------------------------------
Your vote is important!
Go to http://www.eproxyvote.com/scz anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
DETACH HERE
SCG86A
[X] Please mark
votes as in
this example.
1. The election of the following persons as Class I Directors:
(01) C. Ronald Blankenship, (02) Samuel W. Bodman, (03) Hermann Buerger
and (04) John P. Frazee, Jr.
FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[_] [_]
FOR ALL nominees except as noted below
[_] _______________________________________
2. To vote upon any other matters that may properly be presented at the
meeting in their discretion.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
Please sign, date and return this proxy card promptly using the enclosed
postage-paid envelope whether or not you plan to attend the meeting.
Please sign exactly as name(s) appear(s) to the left. If shares are held
jointly, each joint tenant should sign. If signing as attorney, executor,
administrator, trustee or guardian or as officer of a corporation or other
entity, please give full title and capacity in which you are signing.
Signature: _______________________________________ Date: ______________________
Signature: _______________________________________ Date: ______________________
