<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (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
/X/ Definitive Proxy Statement Commission Only
/ / Definitive Additional Materials (as permitted by Rule
/ / Soliciting Material Pursuant to 14a-6(e)(2))
Rule 14a-11(c) or Rule 14a-12
STORAGE TRUST REALTY
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(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)(1) and
0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
- ------------------------------------------------------------------------------
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTIONS 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:
- ------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
STORAGE TRUST REALTY
2407 Rangeline Street
Columbia, Missouri 65202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
and
PROXY STATEMENT
March 25, 1998
Dear Shareholder:
I would like to invite you to attend our 1998 annual meeting of
shareholders, which will be held on Tuesday, May 12, 1998, beginning at eight
o'clock a.m., Kansas City time, at the Kansas City Airport Marriott, Kansas
City, Missouri.
The formal notice of the annual meeting and the proxy statement can be
found on the following pages. A copy of our 1997 annual report is enclosed for
your review. A proxy card and a postage-paid return envelope are also included.
To be sure that your shares will be voted at the meeting, please complete
and sign the enclosed proxy card and return it in the enclosed envelope as
promptly as possible. You are encouraged to specify your choices on the matters
indicated. However, it is not necessary to specify your choice on a matter if
you wish to vote in accordance with the recommendation of the Board of Trustees;
in such event, merely executing and returning the proxy card will be sufficient.
I hope that you will be able to attend the annual meeting. If you do, you
may vote your shares in person even though you have returned a proxy.
Daniel C. Staton
Chairman
<PAGE>
[PAGE LEFT INTENTIONALLY BLANK]
<PAGE>
STORAGE TRUST REALTY
2407 Rangeline Street
Columbia, Missouri 65202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 12, 1998
The annual meeting of shareholders of Storage Trust Realty will be held at
the Kansas City Airport Marriott, Kansas City, Missouri, on Tuesday, May 12,
1998, at eight o'clock a.m., Kansas City time, for the following purposes:
1. To elect two Trustees to serve until the third subsequent annual
meeting of shareholders and until their successors are elected and
qualify;
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1998;
and
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The Board of Trustees has fixed the close of business on March 6, 1998 as
the record date for determining the shareholders entitled to receive notice of
and to vote at the annual meeting.
By Order of the Board of Trustees
MICHAEL G. BURNAM
Chief Executive Officer
Columbia, Missouri
March 25, 1998
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON.
SHAREHOLDERS WHO DO NOT INTEND TO BE PRESENT AT THE MEETING IN PERSON ARE
REQUESTED TO SIGN AND DATE THE ENCLOSED PROXY AND TO RETURN IT IN THE
ACCOMPANYING ENVELOPE IN ORDER THAT THE NECESSARY QUORUM MAY BE ASSURED. ANY
PROXY MAY BE REVOKED IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT
AT ANY TIME BEFORE IT HAS BEEN VOTED AT THE MEETING.
<PAGE>
STORAGE TRUST REALTY
2407 Rangeline Street
Columbia, Missouri 65202
PROXY STATEMENT
Annual Meeting of Shareholders
To Be Held May 12, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Trustees (the "Board") of Storage Trust
Realty, a Maryland real estate investment trust (the "Company"), for use at the
annual meeting of the Company's shareholders to be held on Tuesday, May 12,
1998, at the Kansas City Airport Marriott, Kansas City, Missouri, at eight
o'clock a.m., Kansas City time, and any adjournments or postponements thereof
(the "Annual Meeting"), for the purposes set forth in the accompanying Notice of
Annual Meeting.
The Company expects to first send this Proxy Statement and the enclosed
form of proxy to shareholders on or about March 25, 1998.
ANNUAL REPORT
The Annual Report of the Company for the year ended December 31, 1997,
including financial statements audited by Ernst & Young LLP, independent
auditors, and their report thereon dated January 23, 1998, is being mailed
together with this Proxy Statement to each of the Company's shareholders of
record at the close of business on March 6, 1998 (the "Record Date"). If you
would like to obtain a copy of the Company's Annual Report on Form 10-K, as
filed with the Securities and Exchange Commission, for the year ended December
31, 1997 (the "Form 10-K"), you may do so by requesting a copy of the Form 10-K
in writing from Storage Trust Realty, Attention: Controller-External Reports,
2407 Rangeline Street, Columbia, Missouri 65202.
VOTING OF PROXIES
Only shareholders of record of the Company's common shares of beneficial
interest, $.01 par value per share (the "Common Shares"), at the close of
business on the Record Date are entitled to notice of and to vote at the Annual
Meeting. Each Common Share is entitled to one vote on all matters voted upon by
shareholders and is entitled to vote for as many persons as there are Trustees
to be elected. There were 15,447,193 Common Shares outstanding on the Record
Date.
<PAGE>
Each valid proxy returned to the Company will be voted at the Annual
Meeting as indicated on the proxy or, if no indication is made with respect to a
proposal, in favor of such proposal in accordance with the recommendations of
the Board set forth in this Proxy Statement. The Company does not know of any
matters to be presented at the Annual Meeting other than the proposals referred
to on the proxies and described in this Proxy Statement. However, if any other
matters are properly presented at the Annual Meeting, the persons named on the
enclosed form of proxy intend to vote the shares represented by them in
accordance with their best judgment pursuant to the discretionary authority
granted them in the proxies.
Any person submitting a proxy may revoke it at any time before it is
exercised by so notifying the Company in writing. In addition, persons
submitting proxies may elect to vote their shares in person at the Annual
Meeting, which will serve to revoke a proxy, although mere attendance at the
Annual Meeting will not serve to revoke a proxy.
PROPOSAL 1
ELECTION OF TRUSTEES
Two Trustees are to be elected at the Annual Meeting, which constitutes
all of the Class I Trustees. Such Trustees will serve for a three-year term
until the Company's third annual meeting of shareholders subsequent to the
Annual Meeting of shareholders and until their respective successors are elected
and qualify, or until their earlier resignation, death, termination or removal.
Trustees will be elected by a plurality of the votes cast at the Annual
Meeting. There is no cumulative voting for Trustees. For purposes of the
election of Trustees, abstentions will not be counted as votes cast and will
have no effect on the result of the vote, although they will count toward the
presence of a quorum.
Each valid proxy returned to the Company will be voted at the Annual
Meeting for the two nominees listed below, unless the proxy specifies
otherwise. All of the nominees listed below are members of the present Board.
P. Crismon Burnam has been a Trustee since inception; Mr. Blake Eagle has held
such position since November 16, 1994, the date of completion of the initial
public offering of the Common Shares. Biographical information for each of the
nominees is set forth under the caption "Management."
Nominees
P. Crismon Burnam
Blake Eagle
If any nominee should unexpectedly become unavailable for service, proxies
will be voted for another person selected by the Board, unless the proxy
specifies otherwise.
<PAGE>
<TABLE>
<CAPTION>
MANAGEMENT
Trustees and Executive Officers
The following table sets forth certain information with respect to the
Trustees and executive officers of the Company. The Company currently has a
seven member Board of Trustees which includes four members of the Board of
Trustees who are not affiliated with any member of Gordon Burnam's family or
officers or employees of the Company (each an "Independent Trustee"). Except
or Gregory A. Darus, each of the individuals named below as an officer of the
Company accepted that position upon formation of the Company.
Name Age Position
<S> <C> <C>
Daniel C. Staton* 45 Chairman of the Board of Trustees (term will
expire in 1999)
Gordon Burnam 67 Trustee (term will expire in 2000)
Michael G. Burnam 44 Chief Executive Officer and Trustee
(term will expire in 1999)
P. Crismon Burnam 34 Chief Operating Officer and Trustee
(term will expire in 1998)
Stephen M. Dulle 50 Chief Financial Officer
Timothy B. Burnam 40 Vice President-Construction and
Development
Gregory A. Darus 38 Senior Vice President-Acquisitions
Blake Eagle* 64 Trustee (term will expire in 1998)
Randall K. Rowe* 43 Trustee (term will expire in 2000)
Fredrick W. Petri* 51 Trustee (term will expire in 2000)
</TABLE>
____________________________
* Each of these individuals is an Independent Trustee.
The following is a biographical summary of the experience of the Trustees
and executive officers of the Company.
Daniel C. Staton has been Chairman of the Board of Trustees of the Company
since February 1998 and a Trustee of the Company since November 1994. Mr.
Staton is President of Walnut Capital Partners, an investment and venture
capital company. Mr. Staton was the Chief Operating Officer and Executive Vice
President of Duke Realty Investments, Inc. from 1993 to 1997. Mr. Staton has
been a director of Duke Realty Investments, Inc. since 1993. From 1981 to 1993,
Mr. Staton was a principal owner of Duke Associates, the predecessor of Duke
Realty Investments, Inc. Prior to joining Duke Associates in 1981, Mr. Staton
was a partner and general manager of his own moving company, Gateway Van &
Storage, Inc. in St. Louis, Missouri. From 1986 to 1988, he served as president
of the Greater Cincinnati Chapter of the National Association of Industrial and
Office Parks. Mr. Staton received a B.S. degree in Finance from California
Western University in 1982, a B.S. degree in General Business from Ohio
University in 1991 and is currently working on his Ph.D. in Entrepreneurship at
the Union Institute.
<PAGE>
Gordon Burnam has been a Trustee of the Company since its formation and
was Chairman of the Board of Trustees of the Company from its formation until
February 1998. He is the founder and Chairman of the Board of Directors of
Burnam Holding Companies Co. ("BHC"), a corporation owned by Gordon Burnam and
members of his immediate family. Since 1974, Gordon Burnam has been involved in
the development of over 30 self-storage facilities, of which 14 facilities were
for BHC. From 1982 to 1984, Gordon Burnam was the Chairman of the Board of
Directors of the Southwestern Insurance Group. Gordon Burnam is currently a
director of Union Planters Bank of Columbia, was a Central Region Board Member
of the Self Storage Association and was president of the National Home Builders
Association-Columbia Chapter.
Michael G. Burnam has been the Chief Executive Officer and a Trustee of
the Company since its formation. Michael Burnam previously served as the
President of BHC. He began his career in real estate development, and then
moved into self-storage management in 1977. Mike oversaw operations for BHC
from 1983 through 1994. In 1995, Michael Burnam served as President of the Self
Storage Association, a leading industry association. Mike received his B.S.
degree in Agricultural Economics from the University of Missouri in 1975.
Michael Burnam is Gordon Burnam's son.
P. Crismon Burnam has been Chief Operating Officer and a Trustee of the
Company since its formation. Cris Burnam joined BHC in 1987, most recently
serving as its Vice President in charge of Finance and Acquisitions. Cris
Burnam previously served as Vice President Central Region Board of Directors of
the Self Storage Association. Cris received his B.S. degree in Agricultural
Economics from the University of Missouri in 1985. Cris Burnam is Gordon
Burnam's son.
Stephen M. Dulle has been Chief Financial Officer of the Company since
August 1994. Prior thereto, Mr. Dulle was the chief financial officer of each
of Colonial Storage Centers I, Ltd., Colonial Storage Centers II, Ltd. and
Colonial Storage Centers III, Ltd., respectively. Mr. Dulle was also the
Secretary and Treasurer of Colonial Storage Management 85, Inc. and Colonial
Storage Management 86, Inc. Prior to joining Colonial in 1980, Mr. Dulle was a
Senior Manager with the public accounting firm of KPMG Peat Marwick. Mr. Dulle
received his B.S. degree in Business Administration from the University of
Missouri in 1971 and his Masters of Business Administration degree in Accounting
and Finance from Indiana University in 1973.
Timothy B. Burnam has been Vice President-Construction and Development of
the Company since its formation. Tim had previously served as President of
Burnam Construction, Inc., a wholly owned subsidiary of BHC, since 1987. Mr.
Tim Burnam is directly responsible for the design, planning and purchasing for
all of the Company's construction and development projects. Since 1987, Burnam
Construction, Inc. has built over 500,000 square feet of self-storage facilities
and 175 apartment units. He attended the University of Missouri and has over 15
years' experience in the construction and self-storage businesses. Timothy
Burnam is Gordon Burnam's son.
<PAGE>
Gregory A. Darus has been Senior Vice President-Acquisitions for the
Company since August 1997. From July 1996 to August 1997, Mr. Darus was the
director of Real Estate for Venture Stores, Inc., a midwestern based discount
department store. From February 1993 to July 1996, Mr. Darus was Director of
Real Estate and Counsel for Best Products, Inc., a nationwide hard goods
retailer. From December 1991 to February 1993, Mr. Darus was the Real Estate
Manager for Crown Books Corporation, a nationwide book retailer. Mr. Darus
received his B.S. degree in Forestry from West Virginia University in 1981 and
his J.D. degree from the National Law Center at George Washington University in
1984.
Blake Eagle has been a Trustee of the Company since November 1994. Mr.
Eagle has been, since December 1993, Chairman of the MIT Center for Real Estate,
an academic center which engages in a wide variety of research and special
programs for the real estate industry and operates a master's degree program in
real estate development. From 1985 to 1993, Mr. Eagle was President, Real
Estate Consulting, for the Frank Russell Company, a pension fund consulting
firm. Mr. Eagle is a member of the Urban Land Institute, the National Society
of Real Estate Finance and the American Society of Real Estate Counselors. Mr.
Eagle serves as an advisor to the board of the National Council of Real Estate
Investment Fiduciaries, which he helped establish, and formerly served as a
director of the Institute for Real Estate Research. From 1983 to 1984, Mr.
Eagle served as a member of the board of advisors of the Federal National
Mortgage Association (Fannie Mae). Mr. Eagle received his B.A. degree in
Business Administration from the University of Washington in 1956.
Randall K. Rowe has been a Trustee of the Company since November 1994.
Mr. Rowe is Chairman, Managing Director and Chief Executive Officer of
Transwestern Investment Company, LLC and Chairman of Transwestern Property
Company, LLC. From January 1995 until March 1996, he was Managing Director and
Chief Executive Officer of Equity Venture Partners, Inc., a merchant banking
company. From December 1989 until March 1995, he was co-chairman, chief
executive officer of Manufactured Home Communities, Inc. and its predecessor
entities. From December 1989 until January 1995, Mr. Rowe served as Chairman,
Chief Executive Officer of Equity Office Properties, Inc. and President, Chief
Executive Officer of Equity Assets Management, Inc. Mr. Rowe holds an M.B.A.
degree from Harvard University Graduate School of Business, and a J.D. degree
from the University of Michigan Law School. Mr. Rowe is a member of the Urban
Land Institute and Chairman of the Policy Committee of the National Realty
Committee.
Fredrick W. Petri has been a Trustee of the Company since May 1995. Mr.
Petri has been President of Petrone, Petri & Company, a real estate investment
firm since 1993. Prior thereto, Mr. Petri was an Executive Vice President of
Wells Fargo Bank, where for over 18 years he held various positions involving
real estate. Mr. Petri is a director of Simon DeBartolo Group. Additionally, he
is a trustee of the Urban Land Institute and a director of the Real Estate
Center of the University of Wisconsin Business School. He formerly served as a
member of the board of governors and a Vice President of the National
Association of Real Estate Investment Trusts and as a board member and director
of the National Association of Industrial and Office Parks. Mr. Petri received
his B.A. degree in Business and his M.B.A. in Finance from the University of
Wisconsin in 1969 and 1970, respectively.
<PAGE>
Board Committees and Meetings
There were 13 meetings of the full Board in 1997. Each Trustee who held
such position in 1997 attended at least 75% in the aggregate of all meetings of
the Board and any committee on which such Trustee served.
The Company has standing Audit, Executive Compensation and Executive
Committees of the Board. The Company does not have a standing nominating
committee.
Audit Committee
The Board has established an Audit Committee that consists of two
Trustees. Each member of the Audit Committee is required to be independent of
management of the Company and free from any relationship that, in the opinion of
the Board of Trustees of the Company, would interfere with the exercise of
independent judgment. Messrs. Eagle and Petri constitute the Audit Committee.
The Audit Committee makes recommendations concerning the engagement of the
independent auditors, reviews with the independent auditors the plans and
results of the audit engagement, approves professional services provided by the
independent auditors, reviews the independence of the independent auditors,
considers the range of audit and non-audit fees and reviews the adequacy of the
Company's internal accounting controls and financial reporting. The Audit
Committee met one time in 1997.
Executive Compensation Committee
The Board has established an Executive Compensation Committee. Messrs.
Rowe and Staton constitute the Executive Compensation Committee, which must
consist entirely of "non-employee directors" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
a majority of the members of which must be Independent Trustees. The Executive
Compensation Committee determines the compensation of the Company's executive
officers, administers the Company's option plan and reviews and acts upon any
changes to the Company's bonus incentive compensation plan and the Company's
retirement savings plan. See "Executive Compensation" below. The Executive
Compensation Committee met five times in 1997.
Executive Committee
The Board has established an Executive Committee. Messrs. Gordon Burnam,
Eagle and Staton constitute the Executive Committee, which has the authority,
within certain parameters set by the Board, to acquire, dispose of and finance
assets on behalf of the Company. The Executive Committee cannot, however, take
any action that requires a majority vote of the Independent Trustees or which
requires unanimous approval of all Trustees. The Executive Committee met eight
times in 1997.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding the
compensation of Mr. Michael G. Burnam and the Company's three other most highly
compensated executive officers during 1997, 1996 and 1995. The table includes
compensation from all sources for services rendered to the Company and its
subsidiaries during 1997, 1996 and 1995.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Payouts
Restricted
Securities
Other Annual Shares
Underlying LTIP All Other
Salary Bonus Compensation Awards
Options/SARs Payouts Compensation
Name and Principal Position Year ($) ($) ($) ($)
(number) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael G. Burnam 1997 $150,000 -- -- -- 210,000 -- 2,801 (1)
Chief Executive 1996 $123,200 $80,080 -- -- -- -- --
Officer and Trustee 1995 $110,000 $27,500 -- -- 1,085 -- --
P. Crismon Burnam 1997 $142,200 -- -- -- 200,000 -- 1,689 (1)
Chief Operating 1996 $117,600 $76,440 -- -- -- -- --
Officer and Trustee 1995 $105,000 $26,250 -- -- 1,085 -- --
Stephen M. Dulle 1997 $135,000 -- -- -- 190,000 -- 3,033 (1)
Chief Financial Officer 1996 $112,000 $72,800 -- -- -- -- --
1995 $100,000 $25,000 -- -- 18,440 -- --
Timothy B. Burnam 1997 $109,725 $12,500 -- -- 45,000 -- 1,802 (1)
Vice President - 1996 $109,725 $20,000 -- -- -- -- --
Construction & Development 1995 $ 95,000 $98,500 -- -- -- -- --
</TABLE>
(1) Disability insurance premiums
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth certain information concerning options/SAR s
granted during 1997 to the named executives:
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants For Option Term
Number of % of Total
Securities Option/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price
Expiration
Name Granted Fiscal Year ($/Share)
Date 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Michael G. Burnam 210,000 26.17% $25.9375 2/4/2007 3,426,084 8,682,319
P. Crismon Burnam 200,000 24.93% $25.9375 2/4/2007 3,262,937 8,268,875
Stephen M. Dulle 190,000 23.68% $25.9375 2/4/2007 3,099,791 7,855,431
Timothy B. Burnam 45,000 5.61% $24.25 5/19/2007 686,396 1,739,452
</TABLE>
On February 4, 1997 options for 600,000 units of partnership interest
( Units ) in Storage Trust Properties, L.P. (the Operating Partnership ) were
granted by the Company to certain executive officers named in the above table at
the then current price for the Common Shares of $25.9375. On May 7, 1997
options for 12,000 Common Shares were granted to the Independent Trustees. On
May 19, 1997, options for 45,000 Units were granted by the Company to the Vice
President- Construction and Development as reflected in the above table at the
then current price for the Common Shares of $24.25. On May 19, 1997, options
for 137,350 Units were granted to 125 employees at an exercise price equal to
then current market price for the Common Shares of $24.25. On August 12, 1997,
options for 20,000 Units were granted to an employee at an exercise price equal
to the then current market price for the Common Shares of $26.1875. During
1997, 18 individuals terminated employment with the Company, and, accordingly,
options on 22,660 Units were canceled. Additionally, during 1997, 8 employees
exercised options on 7,440 Units, which were converted into 7,440 Common
Shares.
<PAGE>
Aggregated Option Exercises in 1997 and Year-End Option Values
The following table sets forth certain information concerning exercises of
options during 1997 by each of the executive officers named in the above table
and the year-end value of unexercised options owned by such executive officers.
<TABLE>
<CAPTION>
Securities Number of Securities
Acquired on Underlying Unexercised Value
of Unexercised in-the-
Exercise (1) Realized Options at Year-end (2)
Money Options at Year-End
Name (number) ($) Exercisable Unexercisable
Exercisable Uxercisable
<S> <C> <C> <C> <C> <C>
<C>
Michael G. Burnam -- -- 37,583 235,417 $330,025 $ 301,170
P. Crismon Burnam -- -- 37,583 225,417 $330,025 $ 297,410
Stephen M. Dulle -- -- 34,112 218,888 $280,345 $ 295,604
Timothy B. Burnam -- -- 29,700 64,800 $261,746 $ 267,332
</TABLE>
(1) Options are exercisable one-fifth each on the first, second, third, fourth
and fifth anniversaries of the date of grant, respectively.
(2) Represents aggregate options to purchase Common Shares or Units.
<PAGE>
Option Plan
The Company has adopted the Storage Trust Realty 1994 Share Incentive Plan
(as amended and restated)(the Option Plan )to provide incentives to attract and
retain Trustees, officers and key employees and service providers. The
description of the Option Plan set forth below is qualified in its entirety by
reference to the text of the Option Plan, a copy of which has been filed with
the Securities and Exchange Commission.
The Option Plan provides for the grants of options to purchase a specified
number of Common Shares or Units ( Options ). Under the Option Plan, the total
number of Common Shares available for grant and available to be issued upon
exchange of Units issued under the Option Plan is currently 1,630,381. Under
the Amended Plan adopted at the 1997 Annual Meeting of Shareholders, the number
of Common Shares and Units available will increase on each January 1 to an
amount equal to 10% of the aggregate number of outstanding Common Shares and
Units on such date; provided, however, that no adjustment will be made if the
aggregate number of outstanding Common Shares and Units on any such date has
decreased from the number previously used to establish the number of Common
Shares and Units available under the amended Option Plan. Upon certain
extraordinary events, the Executive Compensation Committee may make such
adjustments in the aggregate number and kind of Common Shares or Units reserved
for issuance, the number and kind of Common Shares or Units covered by
outstanding awards and the exercise prices specified therein as they determine
to be appropriate.
Participants in the Option Plan, who may be Trustees, officers or
employees of, or service providers to, the Company, its subsidiaries or
designated affiliates, are selected by the Executive Compensation Committee.
Four Trustees (excluding those who are officers of the Company), 6 officers,
approximately 380 full-time employees and an indeterminate number of service
providers are currently eligible to participate in the Option Plan. The
Executive Compensation Committee also determines the terms of Options granted
under the Option Plan including, among other things, the individuals who shall
receive Options, the number of Common Shares or Units subject to each Option and
the vesting schedule and expiration date applicable to each such Option.
Trustees of the Company are also eligible to participate, but in the case of
Trustees who are not also officers or employees of the Company, only pursuant to
automatic grants under a specified formula set forth in the Option Plan. See
"Executive Compensation-Compensation of Trustees."
With certain limited exceptions, the Board may amend the Option Plan and
any Option outstanding thereunder without the approval of the shareholders,
provided that no amendment may alter or impair the rights of a participant with
respect to an Option previously granted without the consent of such participant
(except for any amendment made to cause the Option Plan to qualify for an
exemption provided by Rule 16b-3 under the Exchange Act).
The Option Plan authorizes the Executive Compensation Committee to grant
Options at an exercise price determined by the Executive Compensation Committee.
Such price cannot be less than 100% of the fair market value of the Common
Shares or Units on the date on which the Option in respect thereof is granted.
Subject to the limitations regarding REIT qualification and taxes, there is no
<PAGE>
limit on the number of nonqualified Options that may be granted to any one
individual. No Option may be granted or exercised if the grant or exercise of
such Option could cause the Company to fail to qualify as a REIT for federal
income tax purposes or to incur additional taxes under Section 857 of the
Internal Revenue Code of 1986, as amended (the "Code"). The exercise price is
payable in cash. The vesting provisions of the Options are determined by the
Executive Compensation Committee.
The Option Plan provides for the award of Common Shares or the right to
receive Common Shares ( Share Awards ) and Units or the right to receive Units
( Unit Awards ) to participants. The earning, vesting and distribution of Share
Awards and Unit Awards may be subject to one or more conditions established by
the Executive Compensation Committee. Such conditions may relate to events
(such as performance or continued employment) occurring before or after the date
the Share Awards or Unit Awards are granted, or the date the Common Shares or
Units are earned by, vested in or delivered to the participant. Share Awards
and Unit Awards may provide for delivery of the Common Shares or Units at the
time of grant or may provide for a deferred delivery date, including delivery
upon the satisfaction of certain conditions. The Executive Compensation
Committee, in its sole discretion, may provide with respect to a Unit Award that
Units shall be converted to Common Shares immediately upon delivery of the
Units.
Dividend Equivalent Rights and Distribution Equivalent Rights (each,
DERs ) may be awarded in conjunction with Options for Common Shares and Share
Awards and Options for Units and Unit Awards, as applicable. DERs entitle the
participant, with respect to each dividend or distribution payment date related
to a record date upon which Options for Common Shares, Options for Units, Share
Awards or Unit Awards are outstanding, to a payment or credit in an amount equal
to all or a percentage of the dividends or distributions payable with respect to
a Common Share or Unit, as applicable. DERs will be subject to such conditions,
limitations and restrictions as the Executive Compensation Committee shall
determine.
Pursuant to the Option Plan, unless determined otherwise by the Executive
Compensation Committee, each Common Share or Unit underlying an Option granted
under the Option Plan on and after February 4, 1997 shall be awarded with a DER.
Additionally, each Option granted an Independent Trustee on or after February 4,
1997 pursuant to the formula set forth in the Option Plan shall be awarded with
a DER. See Executive Compensation-Compensation of Trustees for information
regarding such Options. Such DER entitles the participant to a credit of a
certain percentage of the dividends or distributions payable during a calendar
year on payment dates with respect to record dates on which the Option was
outstanding. The applicable percentages are based upon the annual total
shareholder return for such calendar year as determined by the Executive
Compensation Committee. Unless provided otherwise by the Executive Compensation
Committee, DER credits accumulated in this manner may only be used to pay a
portion or all of the exercise price with respect to an Option. DER credits may
not be used with respect to the exercise of any Option for which the fair market
value of the underlying Common Shares or Units on the exercise date is less than
the exercise price without taking into account the DER credit.
<PAGE>
Notwithstanding the foregoing references to the Executive Compensation
Committee, the authority to grant and administer Options awarded to persons who
perform services for the Management Company (defined below) and who are not
subject to Section 16(a) of the Exchange Act with respect to the Company is
vested in the board of directors of the Management Company or a committee of two
or more directors of the Management Company. All Options granted to such
persons will be Unit Options.
Incentive Compensation
The Company's bonus incentive compensation plan for the three senior
executive officers for 1998 awards a bonus to executive officers covered under
the plan based on the achievement of specified targets and goals for the Company
and the individual officer. The plan provides for bonuses of 0% to 100% of base
compensation based on the achievement of targeted annual increases in
shareholder return and per share Funds from Operations and other subjective
factors as determined by the Executive Compensation Committee. For 1998 and
future years, one-half of an officer's bonus in excess of the target amount of
40% of base compensation will be paid in Common Shares or Units subject to
transferability restrictions. No bonuses were paid for 1997 to the three senior
executive officers. For additional details, see "Executive Compensation
Committee Report on Executive Compensation."
Retirement Savings Plan
In 1995, the Company adopted a retirement savings plan (the 401(k) Plan )
for its full-time employees. The 401(k) Plan is a qualified plan pursuant to
Sections 401(a) and 401(k) of the Internal Revenue Code. Participants in the
401(k) Plan may elect to contribute a portion of their compensation to the
401(k) Plan and the Company is obligated to make a matching contribution for the
employee equal to 50% of the participant s contribution to the 401(k) Plan, up
to 2% of the participant s compensation. The Company s contribution to the
401(k) Plan was approximately $22,000 in 1997.
The Company made employer contributions of $2,853, $2,705, $2,568 and
$2,195 during 1997 for Messrs. Michael Burnam, Crismon Burnam, Stephen Dulle and
Timothy Burnam, respectively.
Compensation of Trustees
Since the initial public offering through June of 1997, the Company paid
its Independent Trustees an annual fee of $12,000 in cash, plus $1,000 in cash
for each meeting attended (in person or by telephone). Since July of 1997, the
Company paid its Independent Trustees an annual fee in Common Shares with a
market value of $12,000 at the time of issuance, plus $1,000 in cash for each
regular meeting attended (in person or by telephone) and $500 in cash for each
committee meeting attended (in person or by telephone). Trustees who are also
officers or employees of the Company are not paid any Trustees' fees. In
addition, the Company reimburses all Trustees for expenses incurred in attending
meetings.
Pursuant to the Option Plan (described above), each Trustee who is not an
officer or employee of the Company was granted, effective as of the later of the
Trustee's initial election or appointment or the completion of the Company s
<PAGE>
initial public offering, a ten-year option to acquire 3,000 Common Shares at the
initial public offering price of $17.50 or fair market value on the date of
grant, as applicable. Additionally, each Trustee who is not an officer or
employee of the Company has been and will be, as of the close of each annual
shareholders' meeting after such Trustee s initial election or appointment,
granted a ten-year option to acquire an additional 3,000 Common Shares at the
fair market value of the Common Shares on the date of grant. The initial
options for 3,000 Common Shares are not exercisable until after the first
anniversary of the date of grant; the Trustees' options awarded periodically
thereafter vest immediately. The exercise price is payable in cash. See
"Option Plan" for information regarding dividend equivalent rights which will be
awarded with such options in the future.
Commencing with the calendar quarter ending June 30, 1997, as of the last
day of each calendar quarter, Independent Trustees shall be paid their annual
fee for such quarter in arrears with a number of Common Shares equal to $3,000
(or the quarterly portion of the annual fee specified by the Board from time to
time) divided by the fair market value of a Common Share as of the last day of
the calendar quarter. Independent Trustees who served only a portion of the
quarter will receive a pro rata number of Common Shares. Any fractional Common
Shares will be rounded up to the nearest whole Common Share. In 1997 each of
the Trustees received 231 shares for such fees.
<PAGE>
Non-competition Agreements and Termination of Employment
Messrs. Michael and Crismon Burnam and Stephen Dulle have each entered
into a non-competition agreement with the Company which requires each of them to
devote their full business time to the Company. These non-competition
agreements (a) prohibit each of them from, directly or indirectly, owning,
acquiring, operating or developing any self-storage properties other than on
behalf of the Company during the period each of them is an officer or Trustee of
the Company and for a period of two years thereafter, unless their termination
is not voluntary, and (b) prohibit each of them from actively engaging in
property management, development or leasing of other real estate properties,
during the period each of them is an officer or Trustee of the Company. Mr.
Gordon Burnam has entered into a non-competition agreement with the Company
which requires him to devote at least one-half of his business time to the
Company and prohibits him from, directly or indirectly, owning, acquiring,
operating or developing any self-storage properties other than on behalf of the
Company during the period he is an officer or Trustee of the Company and for a
period of two years thereafter, unless his termination is not voluntary.
Employment Agreements
Each of Messrs. Michael Burnam, P. Crismon Burnam and Stephen Dulle
entered into an employment agreement with Storage Trust Properties, L.P. which
expires on June 30, 2000. Each employment agreement will be automatically
extended for a one-year period unless, at least 30 days prior to expiration of
the agreement, a notice not to extend is given by either party. In addition, if
a Change in Control , as defined in the agreements, occurs during the term of
employment, each employment agreement will be automatically extended for a
twelve month period following the date of such Change in Control . The
employment agreements provide for minimum annual base salaries of $150,000,
$142,000 and $135,000, respectively. The base salary amounts are subject to
review by the Board of Trustees and may be increased on an annual basis.
If termination of employment occurs because of death or total disability,
each of the employment agreements provides for the lump sum payment of the sum
of (i) such officer s base salary, and (ii) bonus payable for the calendar year
immediately preceding the calendar year in which the termination occurs as well
as for the payment, continuation or immediate vesting of certain benefits. If
termination occurs within twelve months following a Change in Control for any
reason other than death, total disability or for cause, each of the employment
agreements provides for the lump sum payment of two and one-half time the sum of
(i) such officer s annual base salary, and (ii) bonuses paid during the twelve
full calendar months immediately preceding the calendar month in which the
officer s employment terminated as well as for the payment, continuation or
immediate vesting of certain benefits. If termination occurs for reasons other
than total disability, cause or inadequate performance or is for Good Reason
as defined in such agreements, each of the employment agreements provides for
the lump sum payment of the sum of (i) such officer s base salary, and (ii)
bonuses paid during the twelve full calendar months immediately preceding the
calendar month in which employment is terminated as well as for the payment,
continuation or immediate vesting of certain benefits.
<PAGE>
As used in the employment agreements, a Change in Control means a change
in the beneficial ownership of the Company s voting shares or a change in the
composition of the Company s board of Trustees which occurs if (1) any person
(other than a trustee or other fiduciary of securities held under an employee
benefit plan of the Company, a corporation owned by the shareholders of the
company in substantially the same proportion as their ownership of the Company
or an entity in which the officer has a substantial equity interest) is or
becomes the beneficial owner of 25% or more of the total voting power of the
Company s then outstanding shares, (2) a tender offer is made for the shares of
the Company by any person (other than a trustee or other fiduciary of securities
held under an employee benefit plan of the Company, a corporation owned by the
shareholders of the Company in substantially the same proportion as their
ownership of the Company or an entity in which the officer has a substantial
equity interest)and the person making the tender offer owns or has accepted for
payment shares of the Company representing 25% or more of the total voting power
the Company s shares, (3) the shareholders of the Company approve a sale of
all or substantially all of the Company s assets or a merger or consolidation of
the Company with any other company (other than (i) a merger or consolidation
which results in the Company s voting shares outstanding immediately prior
thereto continuing to represent more than 51% of the combined voting power of
the Company s or the surviving entity s outstanding voting shares immediately
after the merger or consolidation or (ii) an asset sale, merger or consolidation
which would result in the Trustees of the Company who were Trustees immediately
prior thereto, not including any Trustee who was designated by a person who has
entered into an agreement with the Company to effect a transaction described
above or any Trustee who was not a Trustee at the beginning of the 12
consecutive month period preceding the date of such merger or consolidation
unless his or her election was approved by a vote of at least two-thirds of the
Trustees then still in office who were Trustees before the beginning of such
period or two-thirds of the shareholders voting for the election of Trustees,
continuing to constitute at least 50% of the Trustees of the surviving entity
immediately after such merger or consolidation) or (4) a majority of the members
of the Board of Trustees is comprised of individuals whose initial assumption of
office occurred as a result of an actual or threatened election contest. Such
agreements could discourage possible takeovers of the Company since they would
tend to increase the cost of such acquisitions to potential acquirers.
<PAGE>
Compensation Committee Interlocks and Insider Participation
There are no Executive Compensation Committee interlocks or insider
participation on the Executive Compensation Committee. Mr. Michael Burnam,
however, serves as an "ex officio" (non-voting) advisor to the Executive
Compensation Committee. The sole purpose of Mr. Michael Burnam's position as an
"ex officio" advisor to the Executive Compensation Committee is to furnish
whatever information may be necessary in order for the Executive Compensation
Committee to function. Mr. Burnam has not been and will not be present at the
time of deliberations or at the time of any vote by the Executive Compensation
Committee concerning compensation of the Company's executive officers, including
his own.
Executive Compensation Committee Report on Executive Compensation
Payment of cash compensation to the executive officers of the Company
began in November 1994. The base salary paid to the Company's executive
officers during 1994 and 1995, and initial option grants to the Company's
executive officers were determined prior to that time by Messrs. Gordon, Michael
and Crismon Burnam, the then-current Trustees and officers of the Company. In
making these determinations, the management of the Company considered job
responsibilities, the salaries paid and options granted to executive officers of
other real estate investment trusts ( REITs ) similar to the Company, as well as
the salaries paid to and past performance of such persons in their prior
capacities at BHC or elsewhere.
For 1996, the Company's Executive Compensation Committee built on the
traditional compensation policies of BHC, adapted to the Company's competitive
environment of similar publicly-traded REITs. The Company established a bonus
incentive compensation plan for its executive officers, which provided for cash
bonuses of 0% to 75% of base compensation based on the achievement of targeted
annual increases in per share Funds from Operations and other goals as
determined by the Executive Compensation Committee. In 1996 the Company paid
cash bonuses of 65% of base compensation to the three senior executive officers,
including the Chief Executive Officer, based on the achievement of these goals.
See "Incentive Compensation" above. Also, the Company has adopted the Option
Plan, which authorizes the Executive Compensation Committee to grant options for
Units (exchangeable for Common Shares on a one-for-one basis) to the Company's
executive officers and other employees at exercise prices determined by the
Executive Compensation Committee. See "Option Plan" above. Through these plans
and other means, the Executive Compensation Committee intends to maintain strong
links between executive officer compensation and corporate and individual
performance.
<PAGE>
Executive Compensation Committee Report on Executive Compensation (continued)
For 1997 and future years, the Company s Executive Compensation Committee
commissioned FPL Associates, compensation consultants, to conduct a compensation
study of the Company. Based upon this study, in 1997 the shareholders approved
an amendment and restatement of the Option Plan, pursuant to which the Option
Plan became the 1994 Share Incentive Plan. This study contained detailed
compensation and performance data on self-storage REITs and other REITs. The
Company believes that its compensation levels compare favorably to its peer
groups described in the study and targets competitive compensation levels for
its executive officers.
The Company's salary structure is designed to attract and retain highly
qualified executives. This is accomplished by providing competitive base
salaries and meaningful incentives, including short-term and long-term
incentives, intended to reward performance. These incentives are designed to
deliver competitive levels of compensation consistent with the performance of
the Company.
Benchmarks for determining bonus levels include achievement of financial
goals (80%), which consist of targeted Funds from Operations (weighted 75%) and
increases in shareholder value (weighted 25%), and qualitative assessments of
the executive s performance (20%). The target amount of bonus for each of the
Chief Executive Officer, Chief Operating Officer and Chief Financial Officer is
40% of salary. Under the Option Plan, one-half of an officer s bonus in excess
of 40% will be paid in Common Shares or Units, subject to transferability
restrictions.
The long-term incentives for the Chief Executive Officer, the Chief
Operating Officer and the Chief Financial Officer are in the form of
nonqualified option grants. Such options are granted with DERs entitling the
holder to credits towards the exercise price of the options equal to certain
percentages of dividends paid on Common Shares based on the achievement of
various targeted shareholder returns. The Executive Compensation Committee
recognizes that the interests of the shareholders are best served by giving key
employees the opportunity to participate in the appreciation of the Company s
Common Shares through the granting of options. The Executive Compensation
Committee believes that over an extended period of time, share performance will
reflect executive performance and that such arrangements further reinforce
management goals and incentives to achieve shareholders' objectives.
The Executive Compensation Committee does not believe that the Company's
compensation policies will be affected by the $1 million compensation deduction
limit.
Executive Compensation Committee
Randall K. Rowe
Daniel C. Staton
<PAGE>
Performance Graph
The following line graph compares the change in the Company's cumulative
shareholder return on its Common Shares to the cumulative total return of the
Standard & Poor's 500 Stock Index ("S&P 500 Index") and the NAREIT Equity REIT
Total Return Index ("NAREIT Index") from November 8, 1994, the effective date of
the Company's initial public offering of Common Shares, to December 31, 1997.
The graph assumes the investment of $100 in the Company and each of the indices
on November 8, 1994 and the reinvestment of all dividends. The NAREIT Index and
the S&P 500 Index for November 1994 were prorated to adjust for the partial
month. The return shown on the graph is not necessarily indicative of future
performance.
GRAPH
<TABLE>
<CAPTION>
11/08/94 12/31/94 12/31/95 12/31/96 12/31/97
<S> <C> <C> <C> <C> <C>
Storage Trust Realty $100.00 $102.14 $138.71 $177.78 $188.51
NAREIT Index $100.00 $103.52 $122.47 $163.04 $197.82
S&P 500 Index $100.00 $ 98.63 $135.69 $166.80 $222.46
</TABLE>
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Management Company
Storage Realty Management Co. (the "Management Company"), 95% of the
voting common shares of which are owned by BHC, manages facilities which are
owned by unrelated third-parties. The Management Company also conducts various
other businesses, such as the sale of locks, the rental of trucks and the
processing of customer property insurance at various facilities, which, if
conducted by the Company or Operating Partnership, could jeopardize the
Company's qualification as a REIT.
Other Transactions
Pursuant to a Corporate Services Agreement among the Management Company,
the Operating Partnership and the Company, the Operating Partnership and the
Management Company provide various managerial, administrative, accounting, and
other services related to the operations and administration of the Management
Company, the Operating Partnership and the Company. The Corporate Services
Agreement provides for the parties to reimburse the Operating Partnership and
the Management Company quarterly for costs incurred with respect to this
agreement. The Corporate Services Agreement was amended as of January 1, 1996
and January 1, 1997 primarily to take into account the truck rental business
conducted by the Management Company. The Corporate Services Agreement had an
initial term through December 31, 1995. The Corporate Services Agreement has
been renewed for additional one-year terms and will continue to be renewed for
consecutive one-year terms, provided that the Company, the Operating Partnership
and the Management Company mutually consent to each such renewal at least 60
days before the expiration of the then-current term. The Corporate Services
Agreement may be terminated earlier in the event that the Operating Partnership
no longer owns more than 50% of the preferred stock of the Management Company,
in the event of a material default by the Management Company, the Operating
Partnership or the Company (which is not cured within certain specified time
periods), or in the event of the voluntary or involuntary bankruptcy of the
Management Company. During 1997, reimbursements incurred pursuant to the
Corporate Services Agreement were as follows: by the Company to the Operating
Partnership, $59,455; and by the Management Company to the Operating
Partnership, $473,922.
<PAGE>
SECURITY OWNERSHIP
The following table sets forth the beneficial ownership of the Common
Shares as of March 6, 1998 (except where so noted) for (1) each person who is
known to the Company to have been the beneficial owner of more than five percent
of the Common Shares outstanding on March 6, 1998, (2) each Trustee and
executive officer of the Company and (3) the Company's Trustees and executive
officers as a group. There are no other persons who are known by the Company to
be the beneficial owner of more than five percent of the Common Shares, which
are the only voting securities of the Company. Units are exchangeable into
Common Shares, and the number of Common Shares beneficially owned by a person
for the purposes of this presentation includes the number of Common Shares into
which Units beneficially owned by the person are exchangeable. The number of
Common Shares beneficially owned by a person also includes the number of Common
Shares or Units for which a person holds an option, exercisable within sixty
days of March 6, 1998, to acquire. The percent of Common Shares beneficially
owned by a person assumes that all Units held by the person are exchanged for
Common Shares and that none of the Units held by other persons are so exchanged
and that options exercisable within sixty days of March 6, 1998 to acquire
Common Shares or Units held by the person are exercised and no options to
acquire Common Shares or Units held by other persons are exercised. Unless
otherwise indicated in the footnotes, all of such interests are owned directly,
and the indicated person or entity has sole voting and dispositive power.
<TABLE>
<CAPTION>
Common Percent
Shares of All
Beneficially Common
Name and Address of Beneficial Owner (1) Owned (2) Shares
<S> <C> <C>
Franklin Resources, Inc. (3) . . . . . . 1,557,415 10.08
Public Employees Retirement System of Ohio
(4) . . . . . . . . . . . . . . . . . . . . 986,700 6.39
European Investors Inc. (5) . . . . . . . . 930,200 6.02
Gordon Burnam (6)(7)(8)(9) . . . . . . . . 495,105 3.14
Michael G. Burnam (7)(8)(9) . . . . . . . . 441,591 2.80
P. Crismon Burnam (7)(8)(9) . . . . . . . . 440,676 2.79
Timothy B. Burnam (7)(8)(9) . . . . . . . . 388,909 2.48
Stephen M. Dulle (9) . . . . . . . . . . . 82,238 .53
Kimberly Flower (7)(8)(9) . . . . . . . . . 389,529 2.48
Burnam Holding Companies Co. (7) . . . . . 184,284 1.18
Burnam Storage Associates, L.L.C. (8) . . . 174,269 1.12
Blake Eagle (9) . . . . . . . . . . . . . . 14,231 .09
Daniel C. Staton (9) . . . . . . . . . . . 12,731 .08
Randall K. Rowe (9) . . . . . . . . . . . . 18,231 .12
Fredrick w. Petri (9) . . . . . . . . . . . 15,331 .10
All Trustees and executive officers as a
group (9 persons) . . . . . . . . . . . . . 833,384 5.19
See notes on following page.
</TABLE>
<PAGE>
Notes to Security Ownership table:
(1) Unless otherwise noted, the address for each of the persons or entities is
2407 Rangeline Street, Columbia, Missouri 65202.
(2) Units are exchangeable into Common Shares, and the number of Common Shares
beneficially owned by a person for the purposes of this presentation
includes the number of Common Shares into which Units beneficially owned
by the person are exchangeable. The number of Common Shares beneficially
owned by a person also includes the number of Common Shares or Units for
which a person holds an option, exercisable within sixty days of March 6,
1998, to acquire. The percent of Common Shares beneficially owned by a
person assumes that all Units held by the person are exchanged for Common
Shares and that none of the Units held by other persons are so exchanged
and that options exercisable within sixty days of March 6, 1998 to acquire
Common Shares or Units held by the person are exercised and no options to
acquire Common Shares or Units held by other persons are exercised.
(3) Information with respect to beneficial ownership by Franklin Resources,
Inc., Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin Advisers,
Inc. is included herein in reliance on a Schedule 13G dated January 30,
1998 filed by Franklin Resources, Inc. with the Securities and Exchange
Commission. The Schedule 13G indicates that Franklin Advisers, Inc. may
be deemed, as of December 31, 1997, to have sole voting power for
1,510,700 Common Shares, and Franklin Advisers, Inc. and Franklin
Management, Inc. have sole power to direct the disposition of 1,510,700
and 46,665 Common Shares, respectively. The address of Franklin
Resources, Inc. Is 777 Mariners Island Blvd., San Mateo, California
94403.
(4) Information with respect to beneficial ownership by Public Employees
Retirement System of Ohio is included herein in reliance on a Schedule 13G
dated January 31, 1997 filed by Public Employees Retirement System of Ohio
with the Securities and Exchange Commission. The Schedule 13G indicates
that Public Employees Retirement System of Ohio may be deemed to have sole
voting power for 986,700 Common Shares, sole power to direct the
disposition of 986,700 Common Shares and shared power to vote or direct
the disposition of no Common Shares. The address of Public Employees
Retirement System of Ohio is 277 East Town Street, Columbus, Ohio 43215.
(5) Information with respect to beneficial ownership by European Investors
Inc. and EII Realty Securities Inc. is included herein in reliance on a
Schedule 13G dated February 13, 1998 filed by European Investors Inc.
with the Securities and Exchange Commission. The Schedule 13G indicates
that, as of December 31, 1997, European Investors Inc. may be deemed, as
of December 31, 1997, to have sole voting power with respect to 89,100
Common Shares, shared voting power with respect to 153,300 Common Shares,
sole dispositive power with respect to 100,300 Common Shares and shared
dispositive power with respect to 142,100 Common Shares and EII Realty
Securities Inc. may be deemed to have sole voting power with respect to
575,100 Common Shares and shared dispositive power with respect to
687,800 Common Shares.
<PAGE>
(6) Gordon Burnam (and his wife Bonnie Burnam) beneficially owns 72,617 Common
Shares and 34,235 Units directly.
(7) Burnam Holding Companies Co. beneficially owns 1,463 Common Shares and
182,821 Units. Burnam Holding Companies Co. is owned approximately one-
fifth by each of: Gordon and Bonnie Burnam; Michael G. Burnam; P. Crismon
Burnam; Timothy B. Burnam; and Kimberly Flower. Each such owner of Burnam
Holding Companies Co. may be deemed to beneficially own the Common Shares
and Units owned by Burnam Holding Companies Co. Each such owner of Burnam
Holding Companies Co. disclaims beneficial ownership of the Common Shares
and Units owned by Burnam Holding Companies Co.
(8) Burnam Storage Associates, L.L.C. beneficially owns 112,500 Common Shares
and 61,769 Units. Burnam Storage Associates, L.L.C. is owned
approximately one-fifth by each of: Gordon and Bonnie Burnam; Michael G.
Burnam; P. Crismon Burnam; Timothy B. Burnam; and Kimberly Flower. Each
such owner of Burnam Storage Associates, L.L.C. may be deemed to
beneficially own the Common Shares and Units owned by Burnam Storage
Associates, L.L.C. Each such owner of Burnam Storage Associates, L.L.C.
disclaims beneficial ownership of the Common Shares and Units owned by
Burnam Storage Associates, L.L.C.
(9) Common Shares owned by such persons include the following numbers of
Common Shares for which such persons held options which are exercisable
within 60 days of March 6, 1998: Gordon Burnam, 29,700; Michael G. Burnam,
79,583; P. Crismon Burnam, 77,583; Timothy B. Burnam, 29,700; Stephen M.
Dulle, 72,112; Kimberly Flower, 29,700; Blake Eagle, 12,000; Daniel C.
Staton, 12,000; Randall K. Rowe, 12,000; Fredrick W. Petri, 12,000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's Trustees, certain
of the Company's officers, and beneficial owners of more than 10 percent of the
Company's outstanding Common Shares, to file reports of ownership and changes in
ownership of the Company's Common Shares with the Securities and Exchange
Commission and to send copies of such reports to the Company. Based solely upon
a review of such reports and amendments thereto furnished to the Company and
upon written representations of certain of such persons that they were not
required to file certain of such reports, the Company believes that no such
person failed to file any such report on a timely basis during 1997, except that
Daniel Staton failed to report three acquisitions totaling 500 shares in
September, November and December 1997 for himself and, accordingly, filed three
Form 4's late.
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board, upon the recommendation of the Audit Committee, has appointed
the firm of Ernst & Young LLP as the Company's independent auditors for 1998. A
proposal to ratify this appointment will be presented at the Annual Meeting.
The affirmative vote of a majority of the votes cast at the Annual Meeting will
be necessary to adopt this proposal. For purposes of the vote on this matter,
abstentions will not be counted as votes cast and will have no effect on the
result of the vote, although they will be counted toward the presence of a
quorum.
Each valid proxy returned to the Company will be voted for the
ratification of the appointment of Ernst & Young LLP as the Company's
independent auditors for 1998 unless the proxy specifies otherwise. The Board
recommends that shareholders vote for the ratification of such appointment. The
Board also retains the right to appoint substitute independent auditors at any
time during 1998 for any reason whatsoever upon the recommendation of the Audit
Committee.
The Company expects that representatives of Ernst & Young LLP will be
resent at the Annual Meeting and will be available to respond to appropriate
questions. Such representatives will have the opportunity to make a statement
at the Annual Meeting if they desire to do so.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1999 annual meeting
of shareholders must be received by the Company at its principal executive
offices on or before November 25, 1998 for inclusion in the Company's proxy
statement and form of proxy relating to that meeting.
PROXY SOLICITATION EXPENSE
The cost of soliciting proxies will be borne by the Company. The Company
will also request persons, firms and corporations holding shares beneficially
owned by others to send proxy material to, and obtain proxies from, the
beneficial owners of such shares and will, upon request, pay the holders'
reasonable expenses for doing so.
<PAGE>
Please mark
your vote as /X/
indicated in
this example
ELECTION OF TRUSTEES:
FOR WITHHOLD
all nominees vote for all
listed (except as nominees
otherwise indicated) listed
/ / / /
Ratification of the appointment of Ernst & Young
LLP as independent auditors for 1998.
FOR AGAINST ABSTAIN
/ / / / / /
P. Crismon Burnam and Blake Eagle, as Trustees
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the line below.)
- ------------------------------------------------------------------------------
2. To vote upon any other matters that may properly be
presented at the meeting according to their best
judgment and in their discretion.
The undersigned acknowledges receipt of the Notice of Annual Meeting
and the Proxy Statement together with this Proxy.
Please sign exactly as name appears hereon. If shares are held jointly,
each joint tenant should sign. If signing as attorney, executor,
administrator, trustee or guardian or an officer of a corporation or other
entity, please give full title.
Please sign, date and return this proxy promptly using the enclosed
envelope.
Date: _________________________________
_______________________________________
Signature
______________________________________
Signature, if held jointly
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
[LOGO]
RENTAL SPACES
March 25, 1998
Dear Shareholder:
The 1998 annual meeting of Shareholders of Storage Trust Realty (the
"Company") will be held at the Kansas City Airport Marriott, Kansas City,
Missouri, at 8:00 a.m. on Tuesday, May 12, 1998. At the meeting, Shareholders
will elect two trustees and ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for 1998.
It is important that your shares are represented at this meeting. Whether
or not you plan to attend the meeting, please review the enclosed proxy
materials, complete the attached proxy form below, and return it promptly in the
envelope provided.
