SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 Rule 14a-11(c) or Rule 14a-12
Evans Withycombe Residential, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
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<PAGE>
EVANS WITHYCOMBE RESIDENTIAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 10, 1997
The Annual Meeting of Stockholders of Evans Withycombe Residential, Inc. (the
"Company") will be held at the Scottsdale Plaza Resort, 7200 North Scottsdale
Road, Scottsdale, Arizona on Tuesday, June 10, 1997 at 10:00 a.m. Arizona time,
for the purposes of (1) electing two directors to serve until the 2000 Annual
Meeting of Stockholders and until their successors are elected and have
qualified, and (2) transacting such other business as may properly come before
the meeting and at any and all postponements and adjournments thereof.
Only stockholders whose names appear of record on the books of the Company at
the close of business on April 25, 1997 are entitled to notice of, and to vote
at, such Annual Meeting or any postponements or adjournments thereof.
You are cordially invited to attend the meeting in person. Whether or not you
expect to attend this meeting, please sign and date the enclosed proxy and
return it as promptly as possible in the enclosed self-addressed,
postage-prepaid envelope. If you attend the Annual Meeting and wish to vote in
person, your proxy will not be used.
By Order of the Board of Directors
Paul R. Fannin
Senior Vice President, Chief Financial
Officer and Secretary
Scottsdale, Arizona
May 7, 1997
<PAGE>
EVANS WITHYCOMBE RESIDENTIAL, INC.
--------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
June 10, 1997
This proxy statement is furnished to the stockholders of Evans Withycombe
Residential, Inc., a Maryland corporation (the "Company"), in connection with
the solicitation of proxies by the Board of Directors of the Company for use at
the 1997 Annual Meeting of Stockholders (the "Annual Meeting") to be held at the
Scottsdale Plaza Resort, 7200 North Scottsdale Road, Scottsdale, Arizona on
Tuesday, June 10, 1997 at 10:00 a.m. Arizona time and at any and all
postponements and adjournments thereof. The principal executive offices of the
Company are located at 6991 East Camelback Road, Suite A-200, Scottsdale,
Arizona 85251. The approximate date on which this proxy statement and form of
proxy solicited on behalf of the Board of Directors will first be sent to the
Company's stockholders is May 7, 1997.
The cost of the solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, directors and officers of the Company, without
receiving any additional compensation, may solicit proxies personally or by
telephone, telegraph or telecopy. The Company will request brokerage houses,
banks, and other custodians or nominees holding stock in their names for others
to forward proxy materials to their customers or principals who are the
beneficial owners of shares and will reimburse them for their expenses in doing
so.
On April 25, 1997, the record date for the determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting, the Company had
20,244,964 shares of common stock, par value $.01 per share (the "Common
Stock"), outstanding. Each such share of Common Stock is entitled to one vote on
all matters properly brought before the meeting. Stockholders are not permitted
to cumulate their shares of Common Stock for the purpose of electing directors
or otherwise. The presence at the Annual Meeting, in person or by proxy, of a
majority of the outstanding shares of Common Stock will constitute a quorum for
the transaction of business at the Annual Meeting. Abstentions and broker
non-votes are counted for purposes of determining the presence of a quorum for
transaction of business. With regard to election of directors, votes may be cast
in favor or withheld; votes that are withheld will be excluded entirely from the
vote and will have no effect. The vote of a plurality of the shares cast in
person or by proxy is required to elect a nominee for director. The nominees for
director who receive the greatest number of votes shall be elected. Abstentions
may be specified on proposals other than the election of directors, and will be
counted as present for purposes of the item on which the abstention is noted,
and therefore counted in the tabulation of the votes cast on a proposal with the
effect of a negative note. Broker non-votes are shares which are represented at
the Annual Meeting which a broker or nominee has indicated it does not have
discretionary authority to vote on with respect to a particular matter. A broker
non-vote will generally have the effect of a negative vote.
Unless contrary instructions are indicated on the proxy, all shares of Common
Stock represented by valid proxies received pursuant to this solicitation (and
not revoked before they
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<PAGE>
are voted) will be voted at the Annual Meeting for the nominees named below for
election as directors. With respect to any other business which may properly
come before the Annual Meeting and be submitted to a vote of stockholders,
proxies received by the Board of Directors will be voted in accordance with the
best judgment of the designated proxy holders. The Bylaws of the Company provide
that with respect to an annual meeting of stockholders, nominations of persons
for election to the Board of Directors and the proposal of business to be
considered by stockholders may be made by a stockholder only pursuant to a
notice delivered or mailed to the Secretary of the Company at the Company's
principal executive offices by a stockholder who was a stockholder of record at
the time of giving notice, who is entitled to vote at the meeting and who has
complied with the advance notice procedures set forth in the Company's Bylaws. A
stockholder may revoke his or her proxy at any time before exercise by
delivering to the Secretary of the Company a written notice of such revocation,
by filing with the Secretary of the Company a duly executed proxy bearing a
later date, or by voting in person at the Annual Meeting.
ELECTION OF DIRECTORS
The Board of Directors of the Company is currently comprised of seven members
divided into three classes serving staggered terms of three years each. Pursuant
to the Company's Charter and Bylaws, the term of office of one class of
directors expires each year and at each annual meeting the successors of the
class whose term is expiring in that year are elected to hold office for a term
of three years and until their successors are elected and have qualified. The
current terms of two directors expire in 1997, three expire in 1998 and two
expire in 1999.
In the absence of instructions to the contrary, the persons named as proxy
holders in the accompanying proxy intend to vote in favor of the election of the
two nominees designated below, each of whom is currently a director of the
Company, to serve until the 2000 annual meeting of stockholders and until their
respective successors shall have been elected and qualified. The Board of
Directors expects that each of the nominees will be available to serve as a
director, but if any such nominee should become unavailable for election, the
shares of Common Stock represented by the enclosed proxy may (unless such proxy
contains instructions to the contrary) be voted for such other person or persons
as may be determined by the holders of such proxies. In no event will the proxy
be voted for more than two nominees.
Nominees for Election as Director at the 1997
Annual Meeting of Stockholders
<TABLE>
<CAPTION>
Name Age Present Position With The Company Director Since
- ---- --- --------------------------------- --------------
<S> <C> <C> <C>
Richard G. Berry 52 President, Chief Operating Officer and Director 1994
Gadi Kaufmann 41 Nominee for Director N/A
</TABLE>
Richard G. Berry was appointed President and Chief Operating Officer of the
Company on January 21, 1997. Prior to that time, Mr. Berry served as the
Executive Vice President and a director of the Company since its formation in
May 1994 and has served as the Executive Vice President of Evans Withycombe,
Inc. since 1992. From 1983 to 1992, Mr. Berry served as
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Chairman of the Board of Berry and Boyle, a real estate investment and
development management company. Prior to 1983, Mr. Berry served as Executive
Vice President of Hutton Real Estate Services and was responsible for that
firm's real estate investment and management activities. Mr. Berry earned a
Bachelor of Architecture degree and a Masters of Business Administration degree
from the University of Michigan. He also served as an officer of a United States
Navy mobile construction battalion for three years.
Gadi Kaufmann is Managing Director of Robert Charles Lesser & Co., an
independent real estate advisory firm. He specializes in project, portfolio and
corporate strategic planning, transactional and negotiation services, and
financing strategy formulation. Mr. Kaufmann is a member of the Urban Land
Institute, where he recently completed three years of service as Chairman of the
Residential Council. Mr. Kaufmann is a member of the Young Presidents
Organization, an international business organization for education and idea
exchange. Until June 1990, Mr. Kaufmann served as a director of Lincoln N.C.
Realty Fund, Inc., a publicly traded (AMEX, PSE) real estate investment trust.
He currently serves on advisory boards of several privately held companies
including UDC Homes, Inc., a major home-building company, as well as non-profit
charitable organizations.
Directors Continuing in Office
<TABLE>
<CAPTION>
Director Term
Name Age Present Position With The Since Expires
---- --- ------------------------- ----- -------
Company
-------
<S> <C> <C> <C> <C>
Stephen O. Evans 51 Chairman of the Board and 1994 1998
Chief Executive Officer
G. Peter Bidstrup 66 Director 1994 1999
Joseph W. O'Connor(1) 51 Director 1994 1998
John O. Theobald II 52 Director 1994 1998
F. Keith Withycombe 52 Director 1994 1999
</TABLE>
- -------------
(1) Mr. Joseph F. Azrack has informed the Company that he intends to resign from
the Board of Directors effective as of the end of the Annual Meeting. AEW has
designated Mr. Joseph W. O'Connor to replace Mr. Azrack as its designee on the
Board of Directors. Mr. O'Connor presently serves as a director of the Company
whose term on the Board of Directors will expire at the Annual Meeting. By
filling the seat to be vacated by Mr. Azrack, in accordance with the terms of
the Bylaws, Mr. O'Connor's term will expire in 1998.
Stephen O. Evans has served as the Chairman of the Board and Chief Executive
Officer of the Company since its formation in May 1994. Mr. Evans founded the
predecessor of the Company in 1977 and served as Chairman of the Board and Chief
Executive Officer. From 1973 to 1977, Mr. Evans was Investment Vice President of
W.R. Schulz & Associates, at that time Arizona's largest apartment development
company. He earned his Bachelor of Science in Business Administration and
Masters of Business Administration degrees from Arizona State University. He
also served as an officer in the United States Air Force for four years. Mr.
Evans' affiliations include National Multi-Housing Council; National Association
of Real Estate Investment Trusts (NAREIT); Lambda Alpha, a National Land
Economic Fraternity; and the Urban Land Institute.
G. Peter Bidstrup became a director of the Company concurrently with the closing
of the Initial Public Offering in August 1994. Mr. Bidstrup formed Doubletree,
Inc. in 1969 and
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was Chairman and Chief Executive Officer of the company and its successor, Met
Hotels, Inc. until 1991. Since 1991, Mr. Bidstrup has been a principal officer
and director of Bid-Group, Inc., CDT Investments, Inc. and GA Investments, Inc.
and a Manager of COPA Capital, L.L.C. Mr. Bidstrup also is the founder of
Homeward Bound, a non-profit housing organization. His memberships include
Association for Corporate Growth; Dean's Council of 100, ASU College of
Business; Entrepreneurial Fellow, University of Arizona; Lambda Alpha
International; the Board of Directors of the World President's Organization; the
Board of Directors of the Arizona Community Foundation. Mr. Bidstrup holds a
Bachelor of Science Degree from the United States Military Academy and a Master
of Business Administration Degree from the Harvard Graduate School of Business
Administration.
Joseph W. O'Connor became a director of the Company concurrently with the
closing of the Company's Initial Public Offering (the "Initial Public Offering")
in August 1994. Mr. O'Connor has been active in real estate since 1970 and has
served for 14 years as the President and Chief Executive Officer of Copley Real
Estate Advisors, Inc. In 1996, Copley Real Estate Advisors merged with Aldrich,
Eastman and Waltch to form AEW Capital Management L.P. where Mr. O'Connor is
currently Co-Chairman. Mr. O'Connor is a graduate of Holy Cross College and
earned his Masters of Business Administration Degree at Harvard Business School.
He has lectured extensively and is affiliated with numerous real estate
professional organizations and community affairs. At the present time, Mr.
O'Connor is either a Director or Trustee of the following entities: The Urban
Land Institute, The New England Aquarium, Harvard Management Company, Children's
Hospital and the MIT Center for Real Estate Development.
John O. Theobald II became a director of the Company concurrently with the
closing of the Initial Public Offering in August 1994. Since 1988, Mr. Theobald
has served as Senior Vice President and General Counsel for The Pointe Group,
Ltd., a privately owned real estate company operating in Arizona and Southern
California with activities including residential, office, industrial, land
development and resort development and management. From 1973 to 1988, Mr.
Theobald was a partner in the law firm of McLoone, Theobald & Galbut,
specializing in real estate and corporate law. His memberships includes the
Boards of Directors of St. Luke's Charitable Health Trust, Herrington Arthritis
Research Center and The Arizona Historical Foundation. Mr. Theobald holds an AB
Degree from Princeton University and a law degree from the University of
Arizona.
F. Keith Withycombe has served as a director of the Company since its formation
in May 1994 and served as the President and Chief Operating Officer of the
Company since its formation until January 21, 1997. Prior to that time, Mr.
Withycombe served as the President of Evans Withycombe, Inc. From 1973 to 1981,
Mr. Withycombe was Vice President and a Managing Partner for W.R. Schulz &
Associates where he was responsible for the development and management of a
large number of apartment projects, in addition to corporate responsibilities.
Mr. Withycombe is a Certified Property Manager. He is a graduate of the United
States Air Force Academy with an Engineering Sciences degree, and earned a
Master of Industrial Engineering degree from Arizona State University.
He also served as an officer in the United States Air Force for six years.
In October 1992, when unable to reach a negotiated settlement with its secured
lender, a partnership, in which Messrs. Evans and Withycombe had an interest,
elected to file a petition for relief under Chapter 11 of the United States
Bankruptcy Code. The partnership was a single-purpose entity, owning one
apartment project. The partnership was a limited partnership whose corporate
general partner was wholly owned by Messrs. Evans and Withycombe. The case was
favorably resolved in a negotiated settlement with the secured creditor being
paid off in accordance with the applicable settlement agreement and the
bankruptcy petition being voluntarily dismissed by the parties.
4
<PAGE>
Board Meetings; Committees and Compensation
The Board of Directors held four meetings during the year ended December 31,
1996. During that period, no director attended fewer than 75% of the total
number of meetings of the Board and of committees of the Board on which he
served.
The Company currently pays each non-employee director a fee of $12,000 per year
for services as a director plus $500 for attendance in person at each meeting of
the Board of Directors (including telephonic board meetings, but not including
committee meetings). The Company also reimburses the directors for travel
expenses incurred in connection with their duties as directors of the Company.
In June 1996 the Board of Directors adopted, and the stockholders of the Company
approved, a plan to allow the non-employee directors to elect to receive payment
of their retainer fees in the form of Common Stock or options to purchase Common
Stock rather than in cash. See "Non-Employee Directors Stock Plan" below. In
addition, pursuant to the terms of the Company's 1994 Stock Incentive Plan, each
non-employee director will automatically receive, on the date of each annual
meeting, an option to purchase 2,500 shares of Common Stock, at an exercise
price equal to the fair market value of such shares on the date of grant. See
"Executive Officers--1994 Stock Incentive Plan." The Company has been advised
that any compensation received by Mr. O'Connor is as a nominee for AEW. See
"Director Designation Agreement" below.
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee. The Board of Directors does not have a Nominating
Committee.
Executive Committee. The Executive Committee has such authority as may be
granted from time to time by the Board of Directors, including, within certain
limitations, the power to approve the acquisition and disposition of properties
and the development of properties. The Executive Committee currently consists of
Messrs. Evans, Withycombe and Theobald. All actions by the Executive Committee
require the unanimous vote of all of its members. The Executive Committee held
two meetings during 1996.
Audit Committee. The Audit Committee was established to make recommendations
concerning the engagement of independent public accountants, review with the
independent public accountants the plans and results of the audit engagement,
approve professional services provided by the independent public accountants,
review the independence of the independent public accountants, consider the
range of audit and non-audit fees and review the adequacy of the Company's
internal accounting controls. Messrs. Bidstrup and O'Connor are the current
members of the Audit Committee. The Audit Committee held three meetings during
1996.
Compensation Committee. The Compensation Committee is responsible for the
administration of the Company's 1994 Stock Incentive Plan, the Non-Employee
Directors Stock Plan and compensation for the Company's senior executive
officers. The Compensation Committee is authorized to determine the persons
eligible to participate in the 1994 Stock Incentive Plan, the extent of such
participation and the terms and conditions under which benefits may be vested,
received or exercised. Messrs. Azrack and Bidstrup are the current members of
the Compensation Committee. The Compensation Committee held two meetings during
1996.
Director Designation Agreement. In connection with the Initial Public Offering,
the Company entered into a Director Designation Agreement with each of AEW
Partners, L.P. ("AEW"), CIIF Associates II Limited Partnership, a Delaware
limited partnership ("Copley"), Mr. Evans and Mr. Withycombe. Pursuant to the
terms of such agreement, AEW, Copley and each of Messrs. Evans and Withycombe
had certain rights with respect to the nomination of directors and the voting of
shares held by such parties, based on specified common stock ownership
thresholds and, in the case of Messrs. Evans and Withycombe, status as officers
of
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the Company. Because Copley and Mr. Withycombe no longer satisfy certain
conditions set forth in the agreement, Copley and Mr. Withycombe no longer have
the right to designate directors for nomination. AEW continues to satisfy the
stock ownership requirement and therefore retains the right to designate for
nomination one director for a period of five years following the Company's
Initial Public Offering, so long as AEW continues to hold at least a 7.5%
interest in the Company (giving effect to the exchange of all Units (as defined
below under "Security Ownership of Certain Beneficial Owners and Management")
for shares of Common Stock. Additionally, Mr. Evans retains the right to
designate himself for nomination for a period of five years following the
Company's Initial Public Offering so long as he continues to hold the requisite
equity ownership interest in the Company. Each of AEW, Copley, Mr. Evans and Mr.
Withycombe have agreed to vote their shares of Common Stock for the persons
nominated for director under the Director Designation Agreement. AEW's initial
designee to the Board of Directors, Mr. Azrack, has informed the Company that he
will resign immediately following the Annual Meeting and AEW has notified the
Company that it will nominate Mr. O'Connor to serve the remainder of Mr.
Azrack's term.
Non-Employee Directors Stock Plan. The Board of Directors has adopted, and the
Company's stockholders have approved, the Evans Withycombe Residential, Inc.
Non-Employee Directors Stock Plan (the "Directors Plan"). As discussed under
"Board Meetings; Committees and Compensation" on page 5 of this Proxy Statement,
non-employee directors of the Company currently receive cash compensation as an
annual retainer and for meeting fees. Under the Directors Plan, non-employee
directors have the ability to elect to receive their quarterly directors'
retainer (including meeting fees) in the form of Common Stock or options to
purchase Common Stock in lieu of the cash they would otherwise be entitled to
receive.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership of the
Common Stock and Units of the Company as of the Record Date by (i) each person
known by the Company to be the beneficial owner of more than 5% of the Company's
Common Stock, (ii) each director of the Company, (iii) the Chief Executive
Officer and each of the four most highly compensated executive officers of the
Company whose cash compensation exceeded $100,000 for the fiscal year ended
December 31, 1996 and (iv) the Company's executive officers and directors as a
group. "Units" are partnership interests in Evans Withycombe Residential, L.P.,
a Delaware limited partnership (the "Operating Partnership"), the primary entity
through which the Company owns its real estate properties. Units were
exchangeable by the holder for cash or, at the Company's option, shares of
Common Stock on a one-for-one basis (subject to adjustments) commencing in
August 1996. Only shares of Common Stock, and not Units, are eligible to vote at
the Annual Meeting. For purposes of this Proxy Statement, beneficial ownership
of securities is defined in accordance with the rules of the Securities and
Exchange Commission and generally means the power to vote or exercise investment
discretion with respect to securities, regardless of any economic interests
therein. Except as otherwise indicated, the Company believes that the beneficial
owners of Common Stock listed below have sole investment and voting power with
respect to such shares, subject to community property laws where applicable.
<TABLE>
<CAPTION>
Number of
Common Shares Percent of All Percent of
Name and Address of Beneficially Common Shares Number of Units Percent of
Beneficial Owner(1) Owned Outstanding Units Outstanding(12) Equity Interest
- ------------------------------- ------------- -------------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Stephen O. Evans(2)......... 248,252 1.2% 1,808,136 39.2% 8.2%
F. Keith Withycombe(3)...... 215,402 1.1% 1,674,886 36.4% 7.6%
Richard G. Berry(4)......... 48,120 * 110,000 2.4% *
Paul R. Fannin (5).......... 41,334 * - - *
G. Edward O'Clair(6)........ 49,828 * 4,724 * *
Joseph F. Azrack(7)......... 2,455,400 12.1% __ __ 9.9%
Joseph W. O'Connor(8)....... 981,797 4.8% __ __ 3.9%
G. Peter Bidstrup(9)........ 27,500 * __ __ *
John O. Theobald II(9)...... 8,500 * __ __ *
AEW Partners, L.P........... 2,447,900 12.1% __ __ 9.8%
CIIF Associates II Limited
Partnership, a Delaware
limited partnership......... 974,297 4.8% __ __ 3.9%
ABKB/LaSalle Group(11)...... 1,980,850 9.8% __ __ 8.0%
All Executive Officers and
Directors as a Group (10
persons)(7)(8)(10).......... 4,122,522 20.0% 3,600,331 78.1% 30.6%
</TABLE>
* Less than 1%.
(1) Unless otherwise noted, the address for each of the persons or entities
listed above is 6991 East Camelback Road, Suite A-200, Scottsdale,
Arizona, 85251. The address for AEW and Mr. Azrack is 225 Franklin
Street, Boston, Massachusetts 02110; the address for CIIF Associates II
Limited Partnership and Mr. O'Connor is 225 Franklin Street, Boston,
Massachusetts 02110; and the address for ABKB/LaSalle Securities
Limited Partnership is 11 South LaSalle Street, Chicago, Illinois
60603.
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<PAGE>
(2) Includes 111,250 shares subject to options that are exercisable within
60 days. Does not include 83,750 shares subject to options that are not
exercisable within 60 days. Does not include shares of Common Stock
issuable upon exchange of 1,808,136 Units. All exchanges of Units for
shares of Common Stock and exercise of stock options are subject to the
Ownership Limit (as defined in the Company's Charter). Without regard
to the Ownership Limit, 1,808,136 Units owned by Mr. Evans would be
presently exchangeable into a like number of shares of Common Stock and
the amount and percentage of shares in the table above for Mr. Evans
would be 2,056,388 and 8.2%, respectively.
(3) Includes 111,250 shares subject to options that are exercisable within
60 days. Does not include 83,750 shares subject to options that are not
exercisable within 60 days. Does not include shares of Common Stock
issuable upon exchange of 1,674,886 Units. All exchanges of Units for
shares of Common Stock and exercise of stock options are subject to the
Ownership Limit (as defined in the Company's Charter). Without regard
to the Ownership Limit, 1,674,886 Units owned by Mr. Withycombe would
be presently exchangeable into a like number of shares of Common Stock
and the amount and percentage of shares in the table above for Mr.
Withycombe would be 1,890,288 and 7.6%, respectively.
(4) Includes 46,000 shares subject to options that are exercisable within
60 days. Does not include 73,000 shares subject to options that are not
exercisable within 60 days. Does not include shares of Common Stock
issuable upon exchange of 110,000 Units. The 110,000 Units owned by Mr.
Berry are presently exchangeable into a like number of shares of Common
Stock and, giving effect to such exchange, the amount and percentage of
shares in the table above for Mr. Berry would be 158,120 and .6%,
respectively.
(5) Includes 25,000 shares subject to options that are exercisable within
60 days. Does not include 35,000 shares subject to options that are not
exercisable within 60 days. The percentage of shares in the table above
for Mr. Fannin is 41,344 and .2%.
(6) Includes 23,125 shares subject to options that are exercisable within
60 days. Does not include 34,375 shares subject to options that are not
exercisable within 60 days. Does not include shares of Common Stock
issuable upon exchange of 4,724 Units. The 4,724 Units owned by Mr.
O'Clair are presently exchangeable into a like number of shares of
Common Stock and, giving effect to such change, the amount and
percentage of shares in the table above for Mr. O'Clair would be 49,828
and .2%, respectively.
(7) Includes 2,447,900 shares held by AEW Partners, L.P. Mr. Azrack
disclaims beneficial ownership of all of such shares except 3,309
shares relating to his proportionate interest in AEW Partners, L.P.
Also includes 7,500 shares subject to options that are exercisable
within 60 days. Mr. Azrack is the President and Chief Executive Officer
of AEW Capital Management, L.P., the advisor to AEW Partners, L.P. Mr.
Azrack holds all options as nominee of AEW Partners, L.P.
(8) Includes 974,297 shares held by CIIF Associates II Limited Partnership,
a Delaware limited partnership, as to which Mr. O'Connor disclaims
beneficial ownership. Also includes 7,500 shares subject to options
that are exercisable within 60 days. Mr. O'Connor is Co-Chairman of AEW
Capital Management, L.P. AEW Advisors, Inc. (formerly Copley Advisors,
Inc.) is an indirectly wholly-owned subsidiary of AEW Capital
Management, L.P., and serves as the managing general partner of CIIF
Associates II Limited Partnership. Mr. O'Connor holds all options as
nominee of CIIF Associates II Limited Partnership.
(9) Includes 7,500 shares subject to options that are exercisable within 60
days.
(10) Does not include 339,875 shares subject to options that are not
exercisable within 60 days. Does not include shares of Common Stock
issuable upon exchange of 3,600,331 Units held by Executive Officers
and directors as a group. All exchanges of Units for shares of Common
Stock and exercise of stock options are subject to the Ownership
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<PAGE>
Limit (as defined in the Company's Charter). Without regard for the
Ownership Limit, 3,600,331 Units owned by such persons would be
presently exchangeable into a like number of shares of Common Stock,
and the amount and percentage of shares in the table above for such
persons would be 7,722,853 and 30.6%, respectively.
(11) The information set forth is based on a Schedule 13G filed by LaSalle
Advisors Limited Partnership ("LaSalle Advisors") and ABKB/LaSalle
Securities Limited Partnership ("ABKB/LaSalle") with the SEC on
February 14, 1997 that identifies such entities as a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Such Schedule 13G indicates that LaSalle Advisors
Limited Partnership beneficially owns an aggregate of 1,021,500 shares
of Common Stock, of which it has sole and dispositive power over
509,400 shares, shared voting power over 188,300 shares and shared
dispositive power over 512,100 shares. The Schedule 13G further
indicates that ABKB/LaSalle beneficially owns 959,350 shares of Common
Stock, of which it has sole voting and dispositive power over 213,300
shares, shared voting power over 587,210 shares and shared dispositive
power over 746,050 shares.
(12) Does not include 20,244,964 Units held by Evans Withycombe Residential,
Inc.
9
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the names, ages and positions of each of the
Company's executive officers.
<TABLE>
<CAPTION>
Name Age Position
---------------------------- --- --------------------------------------------------
<S> <C> <C>
Stephen O. Evans 51 Chairman of the Board and Chief Executive Officer
Richard G. Berry (1) 52 President, Chief Operating Officer and Director
Paul R. Fannin 40 Senior Vice President, Chief Financial Officer,
Treasurer and Secretary
Jay E. Northrop 51 Senior Vice President--Property Management
G. Edward O'Clair 53 Senior Vice President--Construction
</TABLE>
(1) Richard G. Berry was appointed President and Chief Operating
Officer on January 21, 1997.
Stephen O. Evans has served as the Chairman of the Board and Chief Executive
Officer of the Company since its formation in May 1994. Mr. Evans founded the
predecessor of the Company in 1977 and served as Chairman of the Board and Chief
Executive Officer. From 1973 to 1977, Mr. Evans was Investment Vice President of
W.R. Schulz & Associates, at that time Arizona's largest apartment development
company. He earned his Bachelor of Science in Business Administration and
Masters of Business Administration degrees from Arizona State University. He
also served as an officer in the United States Air Force for four years. Mr.
Evans' affiliations include National Multi-Housing Council; National Association
of Real Estate Investment Trusts (NAREIT); Lambda Alpha, a National Land
Economic Fraternity; and the Urban Land Institute.
Richard G. Berry was appointed President and Chief Operating Officer of the
Company on January 21, 1997. Prior to that time, Mr. Berry served as the
Executive Vice President and a director of the Company since its formation in
May 1994 and has served as the Executive Vice President of Evans Withycombe,
Inc. since 1992. From 1983 to 1992, Mr. Berry served as Chairman of the Board of
Berry and Boyle, a real estate investment and development management company.
Prior to 1983, Mr. Berry served as Executive Vice President of Hutton Real
Estate Services and was responsible for that firm's real estate investment and
management activities. Mr. Berry earned a Bachelor of Architecture degree and a
Masters of Business Administration degree from the University of Michigan. He
also served as an officer of a United States Navy mobile construction battalion
for three years.
Paul R. Fannin has served as the Senior Vice President, Chief Financial Officer
and Treasurer of the Company since its formation in May 1994 and was appointed
Secretary in 1996. Prior to that time, Mr. Fannin served as the Vice President
- -- Asset Management of Evans Withycombe, Inc. since 1986. From 1983 to 1986, Mr.
Fannin served as the Director of Finance of an Arizona real estate development
firm for three years, and was a member of the tax staff of a public accounting
firm for a period of three years. Mr. Fannin is a Certified Public Accountant
licensed in the State of Arizona and holds a Bachelor of Science degree in
Accounting from the University of Arizona and a Masters of Business
Administration degree from Arizona State University.
Jay E. Northrop has served as a Senior Vice President -- Property Management of
the Company since its formation in May 1994. From 1981 to 1994, Mr. Northrop
served as Senior Vice President -- Property Management of Evans Withycombe, Inc.
Prior to that time, Mr. Northrop served as a District Manager for W.R. Schultz &
Associates, where he was
10
<PAGE>
responsible for the property operations of a large number of apartment
communities. Mr. Northrop holds a Bachelor of Science degree in Business
Administration from Arizona State University.
G. Edward O'Clair has served as the Senior Vice President -- Construction of the
Company since its formation in May 1994. From 1978 to 1994, Mr. O'Clair served
as the Senior Vice President -- Construction of Evans Withycombe, Inc. Mr.
O'Clair has been involved in the construction management field since 1967. Prior
to joining Evans Withycombe's predecessor in 1978, Mr. O'Clair supervised the
construction of numerous residential and commercial projects for Stanley
Development Company and C.J. Hassett Corporation, both located in Arizona. Mr.
O'Clair is a licensed general contractor in the state of Arizona and holds a
Bachelor of Science degree in Business Administration from Arizona State
University.
EXECUTIVE COMPENSATION
Summary Compensation Table
The Company was organized as a Maryland corporation in May 1994 and commenced
operations in connection with the consummation of its Initial Public Offering on
August 17, 1994. Prior to the Initial Public Offering, the Company did not pay
any compensation to its executive officers. The following table sets forth
information concerning the compensation awarded to, earned by or paid during the
last three fiscal years to the Company's Chief Executive Officer and to each of
the four most highly compensated executive officers of the Company whose cash
compensation exceeded $100,000 for the fiscal year ended December 31, 1996 (the
"Named Executive Officers").
11
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
------------------- -------------------
Restricted Securities
Other Annual Stock Underlying All Other
Year Salary (2) Bonus Compensation Awards (3) Options/SARs Compensation
Name and Principal Position (1) $ $ $ $ # (4) $
- --------------------------- ---- ---------- ----- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen O. Evans................. 1996 $204,000 $ -- $ 14,400 $ -- 45,000 $ 2,918
Chairman of the Board and
Chief Executive Officer 1995 204,000 -- -- -- -- 2,079
1994 71,538 37,500 -- -- 150,000 3,179
F. Keith Withycombe (5).......... 1996 199,313 -- 12,000 -- 45,000 2,871
President and Chief Operating
Officer 1995 204,000 -- -- -- -- 1,853
1994 45,000 37,500 -- -- 150,000 2,738
Richard G. Berry (5)............. 1996 181,188 -- 12,000 40,006 54,000 1,812
Executive Vice President
1995 165,000 -- -- -- -- 2,310
1994 53,654 28,125 -- -- 65,000 2,767
Paul R. Fannin .................. 1996 116,000 15,000 3,000 -- 30,000 1,784
Senior Vice President--Chief
Financial Officer, Treasurer 1995 103,600 -- 3,058 193,160 -- 1,857
and Secretary
1994 32,192 3,750 1,071 -- 35,000 322
G. Edward O'Clair................ 1996 104,500 -- 6,000 -- 22,500 2,610
Senior Vice President--
Construction 1995 99,493 -- -- 423,240 -- 1,014
1994 34,219 4,875 -- -- 35,000 1,913
</TABLE>
- -----------------
(1) Compensation information contained in the above table for 1994 represents
the period from August 17, 1994 (the date of the Initial Public Offering)
through December 31, 1994.
(2) On an annualized basis in 1994, the salaries for the Named Executive
Officers would be: $200,000 for each of Messrs. Evans and Withycombe,
$150,000 for Mr. Berry, $90,000 for Mr. Fannin, and $95,667 for Mr.
O'Clair.
(3) An aggregate of 82,802 shares of "restricted stock" were issued to certain
officers of the Company in August 1995 in connection with the continuation
of an executive incentive deferred compensation plan of a predecessor to
the Company, including 21,162 shares to Mr. O'Clair and 9,658 shares to Mr.
Fannin. Such shares vest over a three-year period after issuance and upon
issuance such shares had voting and dividend rights with one-third of the
shares vesting in August 1996. The value of the restricted stock at the end
of the last fiscal year was $202,818 for Mr. Fannin, and $444,402 for Mr.
O'Clair.
(4) Amounts shown in this column represent Company contributions to the
Company's 401(k) Plan.
12
<PAGE>
(5) Mr. Withycombe resigned as President and Chief Operating Officer of the
Company effective January 21, 1997. Mr. Withycombe remains a director of
the Company. On January 21, 1997, Richard G. Berry was appointed President
and Chief Operating Officer of the Company.
INFORMATION CONCERNING STOCK OPTIONS
The following table contains information concerning the grant of stock options
under the Company's 1994 Stock Incentive Plan for the 1996 fiscal year to the
Named Executive Officers. The table also lists potential realizable values of
such options on the basis of assumed annual compounded stock appreciation rates
of 5% and 10% over the life of the options which are set at a maximum of ten
years.
Option Grants in Last Fiscal Year
---------------------------------
<TABLE>
<CAPTION>
Potential Realizable
Value at
Assumed Annual
Number of Percent of Total Rates of Share
Securities Options Exercise Price Appreciation
Underlying Granted Or Base For Option Term (4)
Options Granted to Employees in Price Expiration -------------------------
Name (#)(1) Fiscal Year ($/Sh)(2) Date(3) 5%($)(2) 10%($)(2)
- ------------------------- --------------- --------------- --------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Stephen O. Evans 45,000 13.0% $22.25 February 2006 $629,681 $1,595,735
F. Keith Withycombe 45,000 13.0% $22.25 February 2006 629,681 1,595,735
Richard G. Berry 54,000 15.6% $22.25 February 2006 755,617 1,914,882
Paul R. Fannin 30,000 8.7% $22.25 February 2006 419,787 1,063,823
G. Edward O'Clair 22,500 6.3% $22.25 February 2006 314,840 797,867
</TABLE>
(1) These options generally will vest in three equal installments on the
first, second and third anniversaries of the date of grant in the case of
Messrs. Evans and Withycombe and in four equal installments for the other
officers.
(2) Based on the price per share of Common Stock at the award date.
(3) The expiration date of the options is ten years from the date of the
award.
(4) The potential realizable value is reported net of the option price, but
before income taxes associated with exercise. These amounts represent
assumed annual compounded rates of appreciation at 5% and 10% only from
the date of grant to the expiration date of the option.
The following table provides information related to the exercise of stock
options during the year ended December 31, 1996 by each of the Named Executive
Officers and the 1996 fiscal year-end value of unexercised options. No stock
options were exercised in 1996.
13
<PAGE>
Aggregated Option Exercises In Last Fiscal Year
-----------------------------------------------
and Fiscal Year-End Option Values
---------------------------------
<TABLE>
<CAPTION>
Number of
Securities
Underlying Value of
Unexercised Unexercised
Options In-the-Money
at FY-End (#) Options at FY-End
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable ($)(1)
- ---------------------------- --------------- -------------- ------------- --------------------
<S> <C> <C> <C> <C>
Stephen O. Evans - $- 100,000/95,000 $100,000/$50,000
F. Keith Withycombe (2) - - 100,000/95,000 100,000/50,000
Richard G. Berry (2) - - 32,500/86,500 32,500/32,500
Paul R. Fannin - - 17,500/47,500 17,500/17,500
G. Edward O'Clair - - 17,500/40,000 17,500/17,500
</TABLE>
(1) Market value of underlying Common Stock on date of fiscal year-end minus
the exercise price. The closing price on December 31, 1996 was $21.00.
(2) F. Keith Withycombe resigned as President and Chief Operating Officer
effective January 21, 1997 and remains a director of the Company. Richard
G. Berry was appointed President and Chief Operating Officer on such date.
The Company does not have any stock appreciation rights.
Employment Agreements
On August 17, 1994, each of Stephen O. Evans and Richard G. Berry entered into
employment agreements with the Company for a term of three years. The agreements
provide for annual compensation in the amounts set forth in the "Summary
Compensation Table" above and incentive compensation on the terms set forth in
"Incentive Compensation Plan" below. Each of the employment agreements provides
for certain severance payments equal to base compensation for the longer of the
balance of the employment term or 18 months in the event of disability or
termination by the Company without cause or by the employee with "good reason."
The Company generally will have "cause" to terminate Messrs. Evans or Berry if
such person (i) engages in acts or omissions with respect to the Company which
constitute intentional misconduct or a knowing violation of law, (ii) personally
receives a benefit of money, property or services from the Company or from
another person dealing with the Company in violation of law, (iii) breaches his
non-competition agreement with the Company, (iv) breaches his duty of loyalty to
the Company, (v) engages in gross negligence in the performance of his duties or
(vi) fails to perform services that have been reasonably requested of him by the
Board of Directors following applicable notice and cure periods and which are
consistent with the terms of his employment agreement. Messrs. Evans or Berry
will each have "good reason" to terminate his employment with the Company in the
event of any reduction in his compensation without his consent, any material
breach or default by the Company under his employment agreement or any
substantial diminution in his duties.
14
<PAGE>
As part of their employment agreements, each of Messrs. Evans and Berry agreed
to a noncompetition covenant with the Company which generally prohibits them
(with certain specified exceptions) from engaging in or carrying on, directly or
indirectly, whether as an advisor, principal, agent, partner, officer, director,
employee, shareholder, associate or consultant to any person, partnership,
corporation or any other business entity which is engaged in the development,
construction, acquisition or management of multifamily apartment properties in
the North America except by or through the Company for the longer of (a) 12
months following the termination of employment with the Company or (b) three
years after the closing of the Company's Initial Public Offering, without the
prior written consent of the Board of Directors; provided, however, if such
person's employment is terminated by the Company without "cause" or by the
employee for "good reason," the agreement not to compete will terminate upon the
termination of employment.
On January 21, 1997, Mr. Withycombe resigned as an officer of the Company and
his duties were assumed by Mr. Berry. Mr. Withycombe will continue to serve in
his capacity as a Director of the Company. Pursuant to an employment agreement
between the Company and Mr. Withycombe, Mr. Withycombe is prohibited (with
certain specified exceptions) from engaging in or carrying on, directly or
indirectly, whether as an advisor, principal, agent, partner, officer, director,
employee, shareholder, associate or consultant to any person, partnership,
corporation or any other business entity which is engaged in the development,
construction, acquisition or management of multifamily apartment properties in
North America except by or through the Company for one year following the
termination of his employment with the Company.
1994 Stock Incentive Plan
In August 1994 the Company's Board of Directors adopted, and the stockholders of
the Company approved, the 1994 Stock Incentive Plan (the "1994 Plan"). Any
person, including any director of the Company, who is an employee of or
consultant to the Company, the Operating Partnership, the Management Company or
any of their subsidiaries, is eligible to be considered for the grant of an
Award (any type of arrangement, consistent with the provisions of the 1994 Plan,
that involves or might involve the issuance of (a) Common Stock, (b) an option,
warrant, convertible security, stock appreciation right or similar right, with
an exercise or conversion privilege at a price related to the Common Stock, or
(c) any other security or benefit with a value derived from the value of the
Common Stock) under the 1994 Plan. The 1994 Plan also provides for the automatic
grant of options to directors of the Company who are not employees.
Incentive Compensation Plan
The Company has established an incentive compensation plan for officers and key
employees of the Company. This plan provides for payment of a cash bonus to
participating officers and key employees if certain performance objectives
established for each individual are achieved. Pursuant to such plan, each of
Messrs. Evans, Withycombe and Berry shall be entitled to receive a cash bonus of
up to 100% of their respective base compensation, respectively, upon the
achievement by the Company of specified targets of growth in funds available for
distribution per share as determined by the Compensation Committee. The amount
of the bonus to other participating officers and key employees is based on a
formula determined for each employee by the Compensation Committee or the Chief
Executive Officer and President of the Company, which is based on growth in
funds available for distribution and other factors.
15
<PAGE>
401(k) Plan
The Company maintains through Evans Withycombe Management, Inc. (the "Management
Company"), a qualified retirement plan, with a salary deferral feature designed
to qualify under Section 401 of the Internal Revenue Code (the "401(k) Plan").
The 401(k) Plan permits employees of the Management Company to defer a portion
of their compensation in accordance with the provisions of Section 401(k) of the
Code. The 401(k) Plan currently allows participants to defer up to 20% of their
eligible compensation on a pre-tax basis subject to certain maximum amounts.
Matching contributions may be made in amounts and at times determined by the
Company. Amounts contributed by the Company for a participant will vest over
five years and will be held in trust until distributed pursuant to the terms of
the 401(k) Plan. Employees are eligible to participate in the 401(k) Plan if
they meet certain requirements concerning minimum age and period of credited
service. Distributions from participant accounts will not be permitted before
age 59 1/2, except in the event of death, disability, certain financial
hardships or termination of employment.
For the fiscal year ended December 31, 1996, the Company contributed an
aggregate of approximately $12,000 pursuant to the 401(k) Plan on behalf of the
Named Executive Officers and $113,000 on behalf of all employees as a group. At
December 31, 1996, a total of 272 of the Company's employees were participants
in the 401(k) Plan.
Executive Incentive Deferred Compensation Plan
Prior to the Company's Initial Public Offering, Evans Withycombe, Inc. had in
place an Executive Incentive Deferred Compensation Plan (the "Executive Plan").
Pursuant to the Executive Plan, certain executives of Evans Withycombe, Inc.
(the "Participants") were granted unfunded, unsecured rights to receive cash
payments based on the distributions from certain partnerships in which Evans
Withycombe, Inc. owned an interest. The awards would have vested over a six-year
period from the date of grant. In connection with the consummation of the
Company's Initial Public Offering, all rights of Participants under the
Executive Plan were canceled, and the Participants received (a) an aggregate of
approximately $2.6 million in cash funded by the Management Company prior to the
Initial Public Offering and (b) the right to receive an aggregate of 98,500
shares of restricted stock from the Company one year following the Initial
Public Offering if they remained as employees of the Company during such period,
of which 82,802 shares were issued on or about August 17, 1995. One third of the
shares will vest on each of the second, third and fourth anniversaries of the
Initial Public Offering based upon the continued employment by the Company of
the Participants.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act, that might incorporate future filings, including
this Proxy Statement, in whole or in part, the following report and the Stock
Performance Graph shall not be incorporated by reference into any such filing.
COMPENSATION COMMITTEE REPORT
The Company consummated the Initial Public Offering in August 1994 and shortly
thereafter established the Compensation Committee which is made up of Messrs.
Azrack and Bidstrup. Executive compensation for the year ended December 31, 1996
was determined by the Compensation Committee, and, with respect to the base
salary paid to Messrs. Evans, Withycombe and Berry, was paid in accordance with
employment agreements entered into at
16
<PAGE>
the time of the Initial Public Offering. The Compensation Committee is
responsible for the administration of the Company's 1994 Stock Incentive Plan,
the Non-Employee Directors Stock Plan and compensation for the Company's senior
executive officers. The Compensation Committee is authorized to determine the
persons eligible to participate in the 1994 Stock Incentive Plan, the extent of
such participation and the terms and conditions under which benefits may be
vested, received or exercised. The Company's executive compensation program is
intended to attract, retain and reward experienced, highly motivated executives.
The Company's objective is to utilize a combination of cash and equity-based
compensation to provide appropriate incentives for executives while aligning
their interests with those of the Company's stockholders.
The Compensation Committee established policies regarding qualification of
compensation under Section 162(m) of the Code to the extent it considers such
policies appropriate. Section 162(m) limits the deductibility of compensation
over $1 million to any of certain executive officers unless, in general, the
compensation is paid pursuant to a plan which is performance related,
non-discretionary and has been approved by the Company's stockholders. The
Company did not pay any compensation in 1996 that would be subject to Section
162(m).
Compensation Mix
The Company's executive compensation is based on three components designed in
each case to accomplish the Company's compensation philosophy.
Base Salary. Messrs. Evans, Withycombe and Berry received a salary of $204,000,
$199,313 and $181,188, respectively, pursuant to the terms of employment
agreements entered into between the Company and such executives in connection
with the consummation of the Company's Initial Public Offering in August 1994.
The terms of the employment agreements were determined at the time of the
offering and prior to the formation of the Compensation Committee.
Bonus under Incentive Compensation Plan. The Company has established the
incentive compensation plan described above pursuant to which cash bonuses are
paid upon achievement of certain performance objectives.
Stock Options and Restricted Stock. The Compensation Committee may grant stock
options and restricted stock to executives and other key employees of the
Company pursuant to the 1994 Stock Incentive Plan. In determining the grants of
stock options and restricted stock, the Compensation Committee will take into
account, among other things, the respective scope of responsibility and the
anticipated performance requirements and contributions to the Company of each
proposed award recipient. Stock options and restricted stock are designed to
align the interests of executives with those of the stockholders. Stock options
may also be granted to those non-employee directors who elect to receive them in
lieu of cash payments of directors fees pursuant to the Non-Employees Directors
Stock Plan. Although the Non-Employees Director Stock Plan is intended to be
self-governing, the Compensation Committee may alter, amend, suspend or
terminate the plan, subject to certain exceptions.
JOSEPH W. AZRACK
G. PETER BIDSTRUP
17
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below compares cumulative total return of the Company, the S & P 500
Index and the Equity REIT Total Return Index of the National Association of Real
Estate Investment Trusts ("NAREIT") from August 11, 1994, the first day of
trading of the Common Stock on the New York Stock Exchange, to December 31,
1996. The S&P 500 Index and the NAREIT Equity REIT Total Return Index for the
month of August, 1994 have been prorated to arrive at the beginning index used
in this graph. The comparison assumes $100 was invested on August 11, 1994 in
the Company's Common Stock and each of the foregoing indices and assumes
reinvestment of dividends before consideration of income taxes.
EWR
Stock Performance Graph
1996 Proxy
NARIET
Equity
EWR S & P Index
------ ------ ------
8/11/94 100.00 100.00 100.00
9/30/94 97.50 101.56 98.44
12/31/94 105.99 101.54 98.45
3/31/95 102.83 111.42 98.29
6/30/95 106.76 121.99 104.07
9/30/95 108.04 131.69 108.97
12/31/95 116.90 139.54 113.48
3/31/96 128.65 147.03 116.06
6/30/96 117.64 153.63 121.23
9/30/96 125.61 158.36 129.16
12/31/96 125.28 171.62 153.51
The stock performance depicted in the above graph is not necessarily indicative
of future performance. The Stock Performance Graph shall not be deemed to be
"soliciting material" or to be "filed" with the SEC or subject to Regulations
14A or 14C or to the liabilities of Section 18 of the Exchange Act, except to
the extent that the Company specifically requests that such information be
treated as soliciting material or specifically incorporates them by reference
into a filing under the Securities Act or Exchange Act.
18
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Management Company
Messrs. Evans and Withycombe own 99% of the voting common stock of Evans
Withycombe Management, Inc., the entity through which the Company conducts its
property management operations and other related services (the "Management
Company"), which enables Messrs. Evans and Withycombe to control the election of
directors of the Management Company. The Operating Partnership owns 1% of the
voting common stock and 100% of the non-voting common stock of the Management
Company, as a result of which the Operating Partnership is entitled to 99% of
all of the distributions made by the Management Company. Pursuant to a
management agreement between the Management Company and the Operating
Partnership, the Management Company provides various managerial, administrative,
accounting, industrial relations and, at the election of the Operating
Partnership, development services, and other services related to the management,
operation and administration of the Operating Partnership and the communities
owned by the Operating Partnership. The management agreement provides for the
Operating Partnership to compensate the Management Company monthly with respect
to such matters. The management agreement had an initial one-year term.
Thereafter, it was and will be renewed for consecutive one-year terms, unless
the Operating Partnership or the Management Company elects to terminate the
management agreement at least 30 days before the expiration of the then-current
term. The management agreement may be terminated in its entirety earlier in the
event that the Operating Partnership no longer owns more than 50% of the
non-voting stock of the Management Company or in the event of a material default
by the Management Company or the Operating Partnership (which is not cured
within certain specified time periods).
Pursuant to a management agreement between the Management Company and the
Financing Partnership, the Management Company provides various managerial,
administrative, accounting, industrial relations and, at the election of the
Financing Partnership, development services, and other services related to the
management, operation and administration of the Financing Partnership and the
communities owned by the Financing Partnership. The management agreement
provides for the Financing Partnership to compensate the Management Company
monthly with respect to such matters. The management agreement has an initial
term of seven years. The management agreement may be terminated in its entirety
earlier upon 30 days notice from the Financing Partnership or by the Management
Company or the Financing Partnership in the event of a material default by the
other party (which default is not cured within certain specified time periods).
Director Designation Agreement
The Company is a party to a Director Designation Agreement which, among other
things, provides AEW and Mr. Evans with the right, subject to certain
limitations, to designate a person to serve as directors of the Company. For a
description of the Director Designation Agreement, see "Election of
Directors--Director Designation Agreement."
Relationship Regarding Excluded Properties
Certain entities affiliated with Messrs. Evans and Withycombe (the "Evans
Withycombe Entities") own a minority interest in joint ventures that own nine
multi-family apartment communities (the "Berry and Boyle Communities"), which
were not transferred to the Company in connection with certain transactions
consummated in connection with the Initial Public Offering. The Evans Withycombe
Entities have a right of first refusal to acquire the Berry and Boyle
Communities upon a sale by a venture. The Evans Withycombe Entities had agreed
to transfer any Berry Boyle Community subject to the right of first refusal to
the
19
<PAGE>
Company, if the Company so elects, at the right of first refusal price In the
second quarter of 1996, the Company elected not to acquire the Berry & Boyle
communities and terminated its management contracts on the nine multi-family
apartment communities in exchange for a termination fee of $500,000. In
addition, five multifamily apartment communities in which Evans Withycombe owns
an interest were not transferred to the Company. The Management Company
continues to manage these five multi-family apartment communities for a fee
pursuant to existing management agreements.
INDEPENDENT AUDITORS
Ernst & Young LLP audited the Company's financial statements for the year ended
December 31, 1996 and has been the Company's auditors since the Company's
organization. The directors have selected the firm of Ernst & Young LLP as
independent auditors for the Company for the fiscal year ending December 31,
1997. A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting to respond to appropriate questions. Such representative will
have an opportunity to make a statement at the Annual Meeting if he or she
desires to do so.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Based solely upon a review of Securities and Exchange Commission Forms 3, 4 and
5 furnished to the Company and certain written representations, the Company
believes that all reports required by Section 16(a) of the Securities and
Exchange Act of 1934 with respect to the Company's fiscal year ended December
31, 1996 have been filed by its officers and directors and each person known to
the Company to be the beneficial owner of more than 10% of the Company's Common
Stock.
OTHER MATTERS
Stockholder Proposals for Next Year's Annual Meeting. The proxy rules adopted by
the Securities and Exchange Commission provide that certain stockholder
proposals must be included in the proxy statement for the Company's Annual
Meeting. For a proposal to be considered for inclusion in next year's proxy
statement, it must be received by the Company no later than January 7, 1998.
The Board of Directors of the Company knows of no matters to be presented at the
Annual Meeting other than those described in this proxy statement. Other
business may properly come before the meeting, and in that event it is the
intention of the persons named in the accompanying proxy to vote in accordance
with their judgment on such matters.
20
<PAGE>
The Company's Annual Report to Stockholders, including the Company's audited
financial statements for the year ended December 31, 1996, is being mailed
herewith to all stockholders of record. THE COMPANY WILL PROVIDE WITHOUT CHARGE
TO ANY PERSON SOLICITED HEREBY, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K/A, AS AMENDED, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. SUCH REQUESTS SHOULD BE DIRECTED TO THE
SECRETARY OF THE COMPANY, AT 6991 EAST CAMELBACK ROAD, SUITE A-200, SCOTTSDALE,
ARIZONA 85251.
ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN THE ACCOMPANYING PROXY
CARD IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
Paul R. Fannin
Senior Vice President, Chief Financial
Officer and Secretary
Scottsdale, Arizona
May 7, 1997
21
<PAGE>
<TABLE>
<S> <C>
PROXY EVANS WITHYCOMBE RESIDENTIAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON JUNE 10, 1997
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and the accompanying Proxy Statement for
the 1997 Annual Meeting and revoking all prior Proxies, makes, constitutes and appoints Stephen O. Evans and Richard G. Berry (and
each of them) proxies of the undersigned, each with full power of substitution, to represent the undersigned, and to vote all shares
of Common Stock of the undersigned in Evans Withycombe Residential, Inc. (herein the "Company"), at the 1997 Annual Meeting of
Stockholders of the Company at the Scottsdale Plaza Resort, 7200 North Scottsdale Road, Scottsdale, Arizona on Tuesday, June 10,
1997 at 10:00 a.m., local time, and at any adjournment(s) or postponement(s) thereof, with all powers the undersigned would be
entitled to vote if personally present:
1. Election of Directors
The Board of Directors recommends a vote FOR all nominees below.
[ ] FOR ALL NOMINEES listed below [ ] WITHOLD AUTHORITY to vote for all
(except as marked to the contrary below. nominees listed below
(INSTRUCTION: To withold authority to vote for any individual nominee, strike a line through the nominee's name.)
NOMINEES: RICHARD G. BERRY AND GADI KAUFMANN
2. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof and
as to which the undersigned hereby confers discretionary authority.
(Continued, and to be signed on the other side.)
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(Continued from other side.)
This Proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. Unless otherwise
directed, or if no direction is given, this Proxy will be voted FOR all of the nominees in Item I and in accordance with the best
judgement of the proxies or any of them on any other matters which may properly come before the meeting.
Dated:________________, 1997
_________________________________________
_________________________________________
Please date and sign exactly as your name
or names appear herein. Persons signing
in a fiduciary capacity or as corporate
officers should so indicate.
PLEASE COMPETE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED PREPAID ENVELOPE.
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