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
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Federal Realty Investment Trust
(Name of Registrant as Specified In Its Charter)
Catherine R. Mack
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] 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:
Notes:
(LOGO OF FEDERAL REALTY INVESTMENT TRUST APPEARS HERE)
March 29, 1994
Dear Shareholder:
Please accept my personal invitation to attend our Annual Meeting of
Shareholders on Wednesday, May 4, 1994 at 10:00 a.m. This year's meeting will
be held in the Corcoran Ballroom at the Four Seasons Hotel--Georgetown,
Washington, D.C.
The business to be conducted at the meeting is set forth in the formal notice
that follows. At the meeting, Management will review 1993, report on recent
financial results and discuss expectations for the future. After the formal
presentation, the Trustees and Management will be available to answer any
questions that you may have.
Your vote is important. I urge you to complete, sign and return the enclosed
proxy card.
I look forward to seeing you on May 4.
Sincerely,
(Signature of Steven J. Guttman
Appears Here)
Steven J. Guttman
President and Chief Executive
Officer
FEDERAL REALTY INVESTMENT TRUST
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 1994
To Our Shareholders:
The 1994 Annual Meeting of Shareholders of Federal Realty Investment Trust
("Trust") will be held at The Four Seasons Hotel--Georgetown, 2800 Pennsylvania
Avenue, N.W., Washington D.C., on Wednesday, May 4, 1994, at 10:00 a.m. for the
purpose of considering and acting upon the following:
1. The election of three Trustees to serve for the ensuing three years.
2. To consider a shareholder proposal to adopt a resolution regarding
executive compensation.
3. The transaction of such other business as may properly come before the
meeting or any adjournment.
Shareholders of record at the close of business on March 28, 1994 are
entitled to notice of and to vote at the Annual Meeting.
For the Trustees:
(Signature of Catherine R. Mack
Appears Here)
Catherine R. Mack
Vice President--General
Counsel and Secretary
PLEASE FILL OUT, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT IN THE
ACCOMPANYING POSTAGE PAID ENVELOPE, EVEN IF YOU PLAN TO ATTEND THE MEETING. YOU
MAY REVOKE YOUR PROXY IN WRITING, OR AT THE ANNUAL MEETING IF YOU WISH TO VOTE
IN PERSON.
FEDERAL REALTY INVESTMENT TRUST
4800 HAMPDEN LANE, SUITE 500, BETHESDA, MARYLAND 20814
PROXY STATEMENT
MARCH 29, 1994
Proxies in the form enclosed are solicited by the Board of Trustees of
Federal Realty Investment Trust for use at the 1994 Annual Meeting of
Shareholders ("Annual Meeting") to be held at 10:00 a.m., Wednesday, May 4,
1994, at the Four Seasons Hotel--Georgetown, 2800 Pennsylvania Avenue, N.W.,
Washington, D.C. The close of business on March 28, 1994 has been fixed as the
record date for determining shareholders entitled to notice of and to vote at
the meeting. On that date, the Trust had 28,110,118 common shares of beneficial
interest ("Shares") outstanding, each of which is entitled to one vote. If the
proxy in the enclosed form is signed and returned, it will be voted as
specified in the proxy; if no specific voting instructions are indicated, the
proxy will be voted FOR Proposal 1, AGAINST Proposal 2 and in the named
proxies' discretion as to other matters at the Annual Meeting. Any proxy may be
revoked by a shareholder at any time before it is voted by written notice, or
by attending the Annual Meeting and voting in person.
The presence, in person or by proxy, of a majority of the outstanding Shares
entitled to vote constitutes a quorum at the Annual Meeting. Trustees are
elected by the affirmative vote of the holders of a majority of the Shares
entitled to vote that are present, in person or by proxy, at the Annual
Meeting. The affirmative vote of a majority of the Shares entitled to vote that
are present, in person or by proxy, at the Annual Meeting is required to adopt
Proposal 2.
Votes cast "for" and "against" each Proposal will be tallied as indicated.
"Broker non-votes" (i.e., Shares held by brokers or nominees as to which
instructions have not been received from the beneficial owners or the persons
entitled to vote such Shares and the broker or nominee does not have
discretionary voting power under applicable New York Stock Exchange ("NYSE")
rules) are not counted and will have no effect on whether a Proposal is
adopted. Abstentions will be treated as Shares that are present and entitled to
vote for purposes of determining the presence of a quorum and the number of
votes necessary to adopt a Proposal. The vote of a shareholder who abstains
will have the same effect as if he or she had voted "against" a Proposal.
This Proxy Statement and an accompanying proxy are being mailed to
shareholders on or about March 29, 1994, together with the Trust's 1993 Annual
Report, which includes certified financial statements for the year ended
December 31, 1993. The Consolidated Balance Sheets as of December 31, 1993 and
1992 and the Consolidated Statements of Operations, the Consolidated Statements
of Shareholders' Equity, the Consolidated Statements of Cash Flows, and the
Notes to Consolidated Financial Statements (each of such Statements being for
the years ended December 31, 1993, 1992 and 1991), certified and contained in
the Trust's 1993 Annual Report, are incorporated herein by reference to that
Report.
OWNERSHIP OF SHARES BY CERTAIN BENEFICIAL OWNERS
To the Trust's knowledge, based upon a Schedule 13G filed with the Securities
and Exchange Commission ("SEC") as of February 11, 1994, beneficial owners of
5% or more of the Trust's Shares are as follows:
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF BENEFICIAL OF
OWNER OWNERSHIP CLASS
---------------- ----------------- -------
FMR Corp. 2,653,900 9.73%
82 Devonshire Street
Boston, Mass. 02109
PROPOSAL 1
ELECTION OF TRUSTEES
Pursuant to Section 2.2 of the Trust's Declaration of Trust, the Trustees are
divided into three classes serving three year terms. Three Trustees, comprising
one class of Trustees, are to be elected at the 1994 Annual Meeting. Messrs. A.
Cornet de Ways Ruart, Morton S. Lerner and Walter F. Loeb have been nominated
for election as Trustees to hold office until the 1997 Annual Meeting and until
their successors have been elected and shall qualify. Proxies may not be voted
for more than three Trustees.
PRINCIPAL OCCUPATIONS
AND OTHER TRUSTEE TERM TO
NAME AGE DIRECTORSHIPS SINCE EXPIRE
- ----------------------------------------------------------------------------------
A. Cornet de Ways Ruart 60 Director of SIPEF S.A., an interna- 1983 1997
tional holding company principally of
agricultural interests; Director of
Interbrew S.A.
Morton S. Lerner........ 66 Retired President and Chief Operating 1993 1997
Officer of Lerner Shoes, Inc.; Direc-
tor, Wachovia Bank.
Walter F. Loeb.......... 69 President, Loeb Associates, 1991 1997
management consulting firm.
Publisher, Loeb Retail Letter;
Director, Intertan Inc., a holding
company for foreign retailers;
Director, ColorTile, Inc., a
retailer; Retired Principal and
Senior Retail Analyst, Morgan Stanley
& Co., Inc.; Director, Wet Seal, a
women's apparel retailer.
Terms of office of the six Trustees named below will continue until the
Annual Meeting in the years indicated.
PRINCIPAL OCCUPATIONS
AND OTHER TRUSTEE TERM TO
NAME AGE DIRECTORSHIPS SINCE EXPIRE
- -------------------------------------------------------------------------------
Dennis L. Berman..... 43 General Partner, GDR Partnerships and 1989 1995
Vingarden Associates,
builders/developers; Berman Enter-
prises.
Arnold M. Kronstadt.. 74 Founding Partner, Collins & 1975 1995
Kronstadt-Leahy Hogan Collins Draper,
architects and planners; Director,
Carl M. Freeman Associates, Inc.,
real estate builders-developers.
Donald H. Misner..... 59 President, Misner Development; Em- 1978 1995
ployee of the Trust.
Samuel J. Gorlitz.... 76 Founder of the Trust; President, 1975 1996
Gorlitz Associates, real estate de-
velopers.
Steven J. Guttman.... 47 President and Chief Executive Officer 1979 1996
of the Trust; Trustee, International
Council of Shopping Centers.
George L. Perry...... 60 Senior Fellow, Brookings Institution; 1993 1996
Director, State Farm Insurance Com-
pany and various mutual funds managed
by the Dreyfus Corporation.
2
The Board of Trustees has an Audit Committee, comprised of Messrs. Berman,
Loeb and Perry, which independently reviews the Trust's financial statements
and coordinates its review with the Trust's independent public accountants. The
Audit Committee held four meetings in 1993. The Compensation Committee,
comprised of Messrs. Berman, Lerner and Perry, reviews and reports to the Board
on incentive plans and remuneration of officers. That committee held eight
meetings in 1993. The Compensation Committee, administers the Trust's 1993
Long-term Incentive Plan. During 1993 the Board of Trustees held ten meetings.
The Board of Trustees has no standing nominating committee.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE THREE NOMINEES.
OWNERSHIP OF SHARES BY TRUSTEES AND OFFICERS
As of March 28, 1994, Trustees and executive officers as a group, and the
Trustees, and named executive officers, individually, beneficially owned the
following Shares:
PERCENTAGE OF
NUMBER OF SHARES OUTSTANDING SHARES
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) OF THE TRUST
- --------------------------------------------------------------------------
Trustees and executive officers 1,598,222 5.69%
as a group (14 individuals)
Dennis L. Berman(2) 449,373 1.60%
A. Cornet de Ways Ruart(3) 20,051 under 1%
Steven J. Guttman(4) 510,168 1.81%
Samuel J. Gorlitz(5) 138,731 under 1%
Ron D. Kaplan(6)(7) 71,162 under 1%
Arnold M. Kronstadt(8) 34,613 under 1%
Morton S. Lerner(9) 5,334 under 1%
Walter F. Loeb 8,104 under 1%
Donald H. Misner(10) 25,637 under 1%
Mary Jane Morrow(11) 89,226 under 1%
George L. Perry(12) 4,157 under 1%
Hal A. Vasvari 97,236 under 1%
Robert S. Wennett 83,333 under 1%
- --------
(1) The number and percentage of Shares shown in this table reflect
beneficial ownership, determined in accordance with Rule 13d-3 of the
Securities Exchange Act of 1934, including Shares which are not owned but as to
which options are outstanding and may be exercised within 60 days. Except as
noted in the following footnotes, each Trustee and named executive officer has
sole voting and investment power as to all Shares listed. Fractions are rounded
to the nearest full Share.
(2) Includes 434,875 Shares as to which Mr. Berman is Trustee under Voting
Trust Agreements for certain family members. Mr. Berman does not have
disposition rights with respect to these Shares. This number also includes
1,000 Shares owned by a partnership in which Mr. Berman is a general partner.
(3) Does not include 700 Shares owned by a corporation of which Mr. Cornet's
wife is a director.
(4) Includes 12,000 Shares in trust as to which Mr. Guttman shares voting and
investment power with two other trustees, 12,899 Shares owned jointly with his
wife and 35,574 Shares held as custodian for minor children.
(5) Includes 22,100 Shares as to which Mr. Gorlitz shares voting and
investment power. Does not include 4,954 Shares as to which Mr. Gorlitz's wife
has sole voting and investment power.
(6) Mr. Kaplan was elected an executive officer on March 11, 1993. Pursuant
to Section 16, a report on Form 3 of his beneficial ownership of Shares was
required to be filed within 10 days of his election. Mr. Kaplan's report on
Form 3 was filed on March 29, 1993.
(7) Does not include 1,283 Shares as to which Mr. Kaplan's wife has sole
voting and investment power.
(8) Does not include 3,331 Shares as to which Mr. Kronstadt's wife has sole
voting and investment power.
(9) Does not include 2,500 Shares as to which Mr. Lerner's wife has sole
voting and investment power.
(10) Includes 536 Shares owned jointly as to which voting and investment
power is shared with Mr. Misner's wife.
(11) Includes 40 Shares held as custodian for minor children.
(12) Does not include 300 Shares as to which Mr. Perry's wife has sole voting
and investment power.
3
REMUNERATION OF EXECUTIVE OFFICERS AND TRUSTEES
The following table sets forth the summary compensation of the Chief
Executive Officer and the four other most highly paid executive officers. In
accordance with transitional provisions to the revised rules on executive
officer and director compensation disclosure adopted by the SEC, the Trust is
not required to disclose amounts that would otherwise be required to be
included under the columns "Other Annual Compensation" and "All Other
Compensation" for 1991.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------ ------------
(a) (b) (c) (d) (e) (g) (i)
OTHER
ANNUAL ALL OTHER
SALARY COMPENSATION COMPENSATION
(A) BONUS (B) OPTIONS (D)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) (C) ($)
- -------------------------------------------------------------------------------------------
Steven J. Guttman 1993 $496,000 $200,000 80,000 $ 18,000
President 1992 466,000 150,000 10,000 395,000(E)
& Chief Executive 1991 402,000 120,000 --
Officer
Ron D. Kaplan 1993 178,000 60,000 -- 76,000(F)
Vice President, Capital 1992 21,000 -- -- 400
Markets 1991 -- -- --
Mary Jane Morrow 1993 193,000 50,000 40,000 24,000
Senior Vice President, 1992 181,000 38,000 10,000 112,000(E)
Finance & Treasurer 1991 156,000 32,000 --
Hal A. Vasvari 1993 223,000 125,000 40,000 31,000
Executive Vice 1992 208,000 75,000 10,000 116,000(E)
President, 1991 179,000 50,000 --
Management
Robert S. Wennett 1993 190,000 100,000 40,000 13,000
Senior Vice President, 1992 179,000 65,000 10,000 107,000(E)
Acquisitions 1991 140,000 85,000 --
- --------
(A) Amounts shown includes amounts deferred at the election of the named
officer pursuant to plans available to substantially all employees.
(B) No named officer received perquisites or other personal benefits
aggregating the lesser of 10% of annual salary and bonus or $50,000.
(C) Option exercise price is equal to the fair market value of the Shares on
the date of grant.
(D) The amounts shown in this column for the last fiscal year include the
following: (i) Mr. Guttman: $4,816--Trust paid group term life insurance;
$4,497--Trust contribution to Section 401 (k) Plan; $3,948--Trust paid
annuity contract premium; and $4,549--Trust paid long-term disability
insurance premium; (ii) Mr. Kaplan: $513--Trust paid group term life
insurance; $408--Trust paid long-term disability insurance premium;
$75,125--Trust reimbursement of relocation expenses; (iii) Ms. Morrow:
$1,036--group term life insurance premium; $4,497--Trust contribution to
Section 401 (k) Plan; $2,683--Trust paid long-term disability insurance
premium; and $16,113--deferred compensation from forgiveness of loans as
described below in (E); (iv) Mr. Vasvari: $3,427--Trust paid group term
life insurance; $4,497--Trust contribution to Section 401 (k) Plan;
$6,830--Trust paid long-term disability insurance premium; and $16,113--
deferred compensation from forgiveness of loans as described below in (E);
(v) and Mr. Wennett: $539--Trust paid group term life insurance premium;
$4,279--Trust contribution to Section 401 (k) Plan; and $7,960--deferred
compensation from forgiveness of loans as described below in (E).
(E) In either 1988 or 1989 restricted Share grants were made to the named
officer. Loans to facilitate the payment of taxes, either when the officer
elected to be taxed or upon vesting, were made to the named
4
officer. The loans are forgiven in three equal installments so long as the
officer is still employed by the Trust and such forgiveness is included in
Column (i).
In 1991, the named officers, except Mr. Kaplan, were awarded the opportunity
to purchase Shares of the Trust and the Trust made available loans for 100%
of the purchase price. One half of the loan was originally scheduled to be
forgiven, by forgiving one-sixteenth each January 31, over an 8 year period
so long as the officer was employed by the Trust. There was no forgiveness
in 1993. The Trust and the officers have agreed to modify the terms of the
loan so that beginning in 1995 and each year thereafter, there will be no
forgiveness as of January 31 of each year if Funds from Operations ("FFO")
per Share increases by less than 5% during the preceding fiscal year. If FFO
per Share increases by 5% or more, one-sixteenth of the loan will be
forgiven. Beginning in 1997 and thereafter, if FFO per Share increases by
10% or more and total return to shareholders is 10% or greater during the
preceding fiscal year, one-eighth of the loan will be forgiven. However, 25%
of the original principal amount of each loan is not subject to forgiveness
by the Trust. These loans were also modified during 1993 so that they are
due on January 31, 2001.
(F) On December 17, 1993, The Trust awarded Mr. Kaplan the opportunity to
purchase 40,000 Shares as of January 1, 1994 at the closing price on
December 31, 1993 ($25 per share). The Trust loaned Mr. Kaplan 100% of the
purchase price for a term of 12 years. One-sixteenth of the loan is
scheduled to be forgiven on January 31, 1995. Forgiveness of the remainder
of Mr. Kaplan's loan is subject to the same performance measures described
above in (E). Therefore, an additional one-sixteenth could be forgiven in
1995 if FFO per share increases by 5% or more in 1994.
Trustees' fees are paid to Trustees other than Mr. Guttman. In accordance
with the provisions of the 1993 Long-Term Incentive Plan, Trustees' fees are
payable in cash or Shares or a combination of both, at the election of the
Trustee; the Trust issued Shares for 71% of the Trustees' fees paid in 1993.
The annual Trustee fee for 1993 was $25,000. Each Trustee was paid the fee
based on the number of months during the year he served as a Trustee. The
annual fee in 1993 for service on the Compensation Committee was $3,000 and
$3,500 for service as its Chairman. The annual fee in 1993 for service on the
Audit Committee was $2,500 and $3,000 for service as its Chairman. Committee
fees were also prorated based on the number of months of service. In accordance
with the 1993 Long-Term Incentive Plan, as of the date of the 1993 Annual
Meeting of Shareholders, each non-employee Trustee received an option to
purchase 2,500 Shares at an exercise price of $26.00. Pursuant to a consulting
agreement, Mr. Gorlitz provides consulting services to the Trust and is paid an
annual consulting fee. The current annual consulting fee is $120,000 and Mr.
Gorlitz was paid consulting fees of $138,667 during 1993, which included a
retroactive adjustment.
EMPLOYMENT AGREEMENTS
In April 1989, the Trust entered into employment agreements with Steven J.
Guttman, Mary Jane Morrow and Hal A. Vasvari. In January 1992, the Trust
entered into an employment agreement with Robert S. Wennett. The employment
agreements provide that the employee's salary may not be decreased and is
automatically increased on January 1 of each year by 50% of any increase in the
Consumer Price Index for the previous year. The Board may further increase the
salary at any time. The term of each agreement is three years, to be
automatically renewed at the end of each month for an additional three years
unless either party notifies the other that it elects not to extend the term.
The Trustees may terminate the agreement, if the employee is totally disabled
for at least six consecutive months and a severance payment is made to the
employee of compensation for the lesser period of one year or the remaining
term of the agreement, and may also terminate the agreement for "just cause"
without payment to the employee. The employee may terminate the agreement
without advance notice if his/her duties or responsibilities are materially
modified without his/her consent, if the Trust moves the location of its
principal office outside the Washington D.C. area, or if the Trust is merged or
consolidated with another entity. If any employee so terminates his/her
agreement, he/she is entitled to full compensation for the remaining term of
the agreement. The employee may also
5
terminate the agreement upon at least six months notice and in that case the
Trust's obligations to pay compensation to the employee ceases on the effective
date of termination. The agreements are automatically terminated upon an
employee's death. In October 1992, the Trust entered into an employment
agreement with Mr. Kaplan for an initial term of three years. The Trustees may
terminate the agreement for "just cause" without payment to the employee. Mr.
Kaplan may terminate the agreement on 60 days notice, provided, however, if he
terminates before two full years of service to the Trust, he must reimburse the
Trust for 50% of any relocation expense paid to him. Mr. Guttman's, Mr.
Kaplan's, Ms. Morrow's, Mr. Vasvari's and Mr. Wennett's current annual salaries
are $500,000, $190,000, $200,000, $225,000, and $200,000, respectively.
In April 1989, the Trust entered into agreements with Mr. Guttman, Ms.
Morrow, Mr. Vasvari and in January 1990 with Mr. Wennett that provide that if
any of these officers leaves the employment of the Trust following a "change of
control" (defined as control of 35% or more of outstanding Shares of the
Trust), each officer will be entitled to receive a lump sum cash payment, to
have health and welfare benefits and executive privileges continued for a
period following such termination, to have all restrictions on the exercise or
receipt of any stock options or stock grants lapse, to accelerate forgiveness
of Share purchase loans and to have all Shares owned at termination be redeemed
at a formula price. Mr. Guttman's payment would be equal to 299% of his salary
including incentive compensation and his benefits and privileges would continue
for three years. Each of the other named officers would receive two times their
salary including incentive compensation and their benefits and privileges would
continue for two years.
OPTION GRANTS IN 1993
The following table provides information on option grants in 1993 to the
named executive officers.
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
- ------------------------------------------------------------------ ---------------------
(A) (B) (C) (D) (E) (F) (G)
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#)(2) YEAR ($/SH) DATE 5% ($) 10% ($)
- ----------------------------------------------------------------------------------------
Steven J. Guttman....... 80,000 15.2% $26.00 5/13/2003 $1,308,000 $3,316,000
Mary Jane Morrow........ 40,000 7.6% 26.00 5/13/2003 654,000 1,658,000
Hal A. Vasvari.......... 40,000 7.6% 26.00 5/13/2003 654,000 1,658,000
Robert S. Wennett....... 40,000 7.6% 26.00 5/13/2003 654,000 1,658,000
- --------
(1) These assumed annual rates of stock price appreciation are specified by
the SEC. No assurance can be given that such rates will be achieved.
(2) From May 14, 1994 to May 13, 1995, one-third of the option may be
exercised; from May 14, 1995 to May 13, 1996, two-thirds of the option may be
exercised; and from May 14, 1996 to the expiration date, the total may be
exercised. In the event the optionee transfers Shares to the Trust to satisfy
all or part of the exercise price of his/her option, the optionee will be
automatically granted a reload option covering the number of Shares transferred
to the Trust in payment of the exercise price. This reload option is a non-
qualified stock option and its exercise price per Share is the fair market
value of a Trust Share on the date of grant of the reload option. The optionee
may also pay the purchase price with a loan from the Trust with such terms as
the Compensation Committee determines. In the event of a change in control of
the Trust, these options become immediately exercisable.
6
AGGREGATED OPTION EXERCISES IN 1993 AND DECEMBER 31, 1993 OPTION VALUES
The following table provides information on option exercises in 1993 by the
named executive officers and the value of each such officer's unexercised
options at December 31, 1993.
(A) (B) (C) (D) (E)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR-END (#) FISCAL YEAR-END ($)(1)
SHARES ACQUIRED ------------------------- -------------------------
NAME ON EXERCISE (#) VALUE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------------------
Steven J. Guttman....... -- -- 12,378 85,122 $29,000 $23,000
Ron D. Kaplan........... -- -- 26,743 13,257 64,000 31,000
Mary Jane Morrow........ 4,878 $35,000 4,000 45,122 4,000 23,000
Hal A. Vasvari.......... 4,878 35,000 8,000 45,122 32,000 23,000
Robert S. Wennett....... 9,878 67,000 0 45,122 0 23,000
- --------
(1) Based on $25.00 per Share the closing price on the NYSE on December 31,
1993.
RETIREMENT AND DISABILITY PLANS
The Trust has a retirement and disability plan for Mr. Guttman, effective
since 1978. The agreement implementing the plan provides generally for an
annual payment after retirement at or after age 62, or at any time on suffering
a total and permanent disability, of $40,000. A lump-sum death benefit of
$40,000 will be paid to Mr. Guttman. Mr. Guttman's plan requires funding, and a
$200,000 annuity contract was purchased to assist the Trust in meeting this
obligation.
The Trust has a retirement and disability plan for Mr. Gorlitz, effective
since 1978, and amended in 1988 and 1992 to revise the current annual payments.
The plan provides for an annual consultation fee payment of $120,000, until
notice of retirement is given by either Mr. Gorlitz or the Trust, at which time
Mr. Gorlitz will receive an annual retirement payment of $75,000 plus
adjustments for changes in the Consumer Price Index that occur between June 1,
1988 and the date of Mr. Gorlitz's retirement. Thereafter retirement payments
are adjusted annually for changes in the Consumer Price Index, except that no
annual adjustment may exceed 10%.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
For 1993, as for prior years, the Compensation Committee was responsible for
determining the level of compensation paid to the Trust's executive officers,
subject to review and approval of the entire Board of Trustees. The
Compensation Committee is comprised entirely of non-employee Trustees.
Philosophy. The members of the Compensation Committee believe that the
Trust's success is largely due to the efforts of its employees and, in
particular, the leadership exercised by its executive officers. Therefore, the
Compensation Committee believes that it is important to:
. Adopt compensation programs that enhance the Trust's ability to attract
and retain qualified executive officers while providing the financial
motivation appropriate to achieve continued high levels of Trust
performance.
. Adopt compensation programs that stress stock ownership and, thereby, tie
long-term compensation to increases in shareholder value.
. Provide a mix of cash and stock-based compensation programs that are
competitive with a select group of successful real estate investment
trusts and other successful national and regional firms that the members
of the Compensation Committee believe are comparable to the Trust.
7
. Adjust salary, bonuses and other compensation awards commensurate with
overall corporate results.
. Select compensation programs that emphasize teamwork, pay-for-performance
and overall corporate results.
The members of the Compensation Committee believe, however, that fixed
compensation formulas may not adequately reflect all aspects of the Trust's and
an individual executive officer's performance. Therefore, the Compensation
Committee has retained a high degree of flexibility in structuring the Trust's
compensation programs. This allows the Compensation Committee annually to
evaluate subjectively and reward each executive officer's individual
performance and contribution to the Trust's overall financial and operational
success.
The Compensation Committee has from time to time retained compensation
consultants to assist it in structuring the Trust's various compensatory
programs and determining the level of salary, bonus and other awards paid to
the Trust's executive officers. For 1993, the Compensation Committee retained
Compensation Resources, Inc. ("CRI") for this task.
1993 Salary and Bonus Compensation. Near the end of each year, the
Compensation Committee determines the salary to be paid to each executive
officer during the subsequent year and the bonus to be paid for the current
year. Sometimes, however, as a result of delays in scheduling meetings or
because of other issues being considered by the Compensation Committee, salary
or bonus is not set until early in the following year. The timing of these
meetings allows the Compensation Committee to review the Trust's activities
during the entire year and to collect and analyze competitive market data. This
process is utilized by the Compensation Committee even though all of the
executive officers of the Trust (including Mr. Guttman) have entered into
employment agreements with the Trust. All but one of these agreements provide
for a salary increase on January 1 of each year equal to 50% of any increase in
the Consumer Price Index for the previous year. One employment agreement does
not contain a provision providing for automatic salary increases.
Salaries and bonuses for 1993 were set after consultation with CRI. CRI
provided the Compensation Committee with aggregated information regarding the
total cash compensation paid to officers holding similar positions in certain
successful real estate investment trusts and other national and regional
companies that CRI and the Compensation Committee have determined have
comparable revenues, profitability and growth. CRI made specific
recommendations as to 1993 salary levels.
The particular companies within this group were selected several years ago
jointly by CRI and the then members of the Compensation Committee. Some of
these companies are included in the National Association of Real Estate
Investment Trust equity index used for comparative purposes in the stock price
performance graph below, and some are not.
The Compensation Committee also requested Mr. Guttman's recommendations with
respect to the individual efforts of the executive officers other than himself.
The Compensation Committee, based on the recommendations made by Mr. Guttman
with respect to executive officers other than himself, increased 1993 salaries
for executive officers by approximately 4.5% over 1992 levels. However, one
executive officer did not receive an increase because he was hired in late
1992. The Compensation Committee determined that it would be inappropriate to
increase his salary in light of his short period of service to the Trust. In
all instances, the salary increases were less than those recommended by CRI,
based on its evaluation of the competitive marketplace.
Mr. Guttman also prepared recommendations to the Compensation Committee
concerning 1993 bonuses to be paid to executive officers other than himself.
These recommendations were based on his analysis of each executive officer's
performance and the performance of the Trust as a whole. Among the performance
factors considered were the productivity of the leasing effort, the number and
quality of properties acquired, the increase in funds from operations, the
financing transactions completed, and the redevelopment and operation of Trust
properties. Mr. Guttman subjectively weighed these and other factors, based
upon the responsibilities of each of the executive officers.
8
CRI advised the Compensation Committee that the bonus amounts suggested by
Mr. Guttman were within the range that CRI would recommend, based on the total
cash compensation paid to officers of companies within the group considered by
the Compensation Committee and the Trust's overall performance.
The Compensation Committee set 1993 bonuses at the amounts suggested by Mr.
Guttman; however, the Compensation Committee adjusted the bonus of one
executive officer in light of his superior performance of his Trust duties
during 1993.
Mr. Guttman's 1993 bonus was determined by the Compensation Committee, after
considering the levels of the 1993 bonuses to be paid to the other executive
officers of the Trust, the bonus paid to Mr. Guttman for 1992, and his
contribution to the Trust during 1993, and after consulting with CRI.
The Compensation Committee strives to maintain the total compensation package
for executive officers at or near the 70th to 75th percentiles of the
compensation paid by the group of companies considered by the Compensation
Committee. The Compensation Committee considers the Trust's overall performance
in setting salary and bonus levels for executive officers, as well as the
relative performance of the other companies in this group and the compensation
paid to their executives.
1993 Long-Term Incentive Plan ("1993 Plan"). The 1993 Plan was approved by
the shareholders at the Trust's 1993 Annual Meeting. The 1993 Plan allows the
Compensation Committee to make cash and stock-based awards to officers and
other key employees of the Trust (such as grants of stock options, stock
appreciation rights, restricted stock, performance awards and stock purchase
awards).
During 1993, the Compensation Committee granted stock options to all but one
of the executive officers of the Trust. These awards were made on the date of
the Trust's 1993 Annual Meeting and are separately disclosed in this proxy
statement.
The amount of these awards were set for all executive officers (including Mr.
Guttman) based on recommendations prepared by CRI. In preparing its
recommendations, CRI considered how many options had been previously awarded to
each executive officer under the Trust's prior stock option plans and the
contractual commitments made by the Trust when recruiting a new executive
officer. At the time the Compensation Committee determined the number of
options to be granted, the Compensation Committee also determined that, barring
unforseen circumstances, no additional grants of options would be made to these
persons in 1994 or 1995.
As disclosed separately in this proxy statement, on December 17, 1993, one
Trust executive officer was offered the opportunity to purchase 40,000 Shares.
This officer was hired by the Trust in late 1992 and, as a result, did not
receive a similar award in 1991 when they were made to the other Trust
executive officers. The amount of the award was set by the Compensation
Committee after reviewing the recommendations of Mr. Guttman and CRI.
Deductibility of Compensation Paid in Excess of $1 Million. Section 162(m) of
the Internal Revenue Code of 1986, as amended ("Code"), limits the ability of a
public company, such as the Trust, to deduct, in 1994 and subsequent years,
compensation paid to an executive officer who is named in its "Summary
Compensation Table" in excess of $1 million per year unless certain conditions
are met. What the requirements are vary depending on the type of compensation
paid. It is not anticipated that any executive officer will be paid in excess
of $1 million in 1994. Therefore, the Committee does not believe that it is
necessary at this time to modify any of the Trust's compensatory programs as a
result of Section 162(m).
Dennis L. Berman
Morton S. Lerner
George L. Perry
9
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Trust's Compensation Committee are Dennis L.
Berman, Morton S. Lerner and George L. Perry. Arnold Kronstadt served as a
member of the Compensation Committee until May 13, 1993 and Donald H. Misner
served as a member of the Compensation Committee until June 1, 1993. On June 1,
1993, Mr. Misner resigned as a member of the Audit Committee.
On October 1, 1993, Mr. Misner became a full time employee of the Trust at an
annual salary of $120,000. Between June 1 and October 1, 1993, Mr. Misner
served as a consultant to the Trust on the development of new shopping centers.
Mr. Misner has over 30 years experience as an architect and developer and has
completed over $250 million of projects for his own account or in conjunction
with partners. During 1993, Mr. Misner was paid $50,000 for both his consulting
services and employment. In addition, Mr. Misner continues to receive Trustees'
fees in cash from the Trust. On the date of the 1994 Annual Meeting, Mr. Misner
will also be granted an option to purchase 2,500 Shares, the per Share exercise
price of which will be the fair market value of a Trust Share on the date of
grant. This option is in lieu of the option he is no longer eligible to receive
as he is no longer a non-employee Trustee.
STOCK PRICE PERFORMANCE
The following stock price performance chart compares the Trust's performance
to the S&P 500 and the index of equity real estate investment trusts prepared
by the National Association of Real Estate Investment Trusts ("NAREIT"). Equity
real estate investment trusts are defined as those which derive more than 75%
of their income from equity investments in real estate assets. The NAREIT
equity index includes all tax qualified real estate investment trusts listed on
the NYSE, American Stock Exchange or the NASDAQ National Market. Stock price
performance for the past five years is not necessarily indicative of future
results. All stock price performance includes the reinvestment of dividends.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG FRT, NAREIT INDEX AND S&P INDEX
Measurement period NAREIT S&P
(Fiscal year Covered) FRT Index Index
- --------------------- -------- -------- --------
Measurement PT -
12/31/88 $ 100.00 $ 100.00 $ 100.00
FYE 12/31/89 $ 110.56 $ 108.84 $ 131.49
FYE 12/31/90 $ 78.01 $ 92.13 $ 127.32
FYE 12/31/91 $ 111.36 $ 125.02 $ 166.21
FYE 12/31/92 $ 158.04 $ 143.26 $ 178.96
FYE 12/31/93 $ 167.12 $ 171.42 $ 196.84
10
PROPOSAL 2
SHAREHOLDER PROPOSAL TO ADOPT A RESOLUTION
REGARDING EXECUTIVE COMPENSATION
Murray Katz and Beatrice Katz of 11435 Monterrey Drive, Silver Spring, MD
20902, as joint record holders of Trust shares, having a current market value
of more than $1,000 and having held the shares for more than one year and
intending to hold the shares through the date of the next annual meeting, have
given notice that they intend to propose a resolution. The exact number of
Trust shares held by the Proponents will be furnished promptly by the Trust to
any person who requests this information. The text of the resolution is as
follows:
"RESOLVED: That the shareholders of Federal Realty Investment Trust
recommend that the Board of Directors take the necessary steps to institute
a salary and compensation ceiling such that as to future employment
contracts, no senior executive officer or director of the Company receive
combined salary and other compensation which is more than two times the
salary provided to the President of the United States," that is, no more
than $400,000.
"REASONS: There is no corporation which exceeds the size and complexity
of operation of the government of the United States of which the President
is the chief executive officer. Even most government agencies far exceed
the size, as measured by personnel and budget, of most private
corporations. The President of the United States now receives a salary of
$200,000; even heads of agencies and members of Congress are paid only
somewhat in excess of $100,000. The recommended ceiling is sufficient to
motivate any person to do his best.
While the duties of the President of the United States are not comparable
to those of senior executive officers or directors (the President has a
much more demanding job), and while the President has many valuable
compensations, we use the salary of the President only as a reference point
for the shareholders to consider as they evaluate this resolution.
Officers of public corporations are the employees and not the owners,
except as they may be shareholders in common with other stockholders. Yet,
officers give the appearance that they run the corporations primarily for
their benefit rather than for the benefit of the shareholders. Thus, they
may drain away millions of dollars in salary, stock options and other
compensation. When more than the recommended ceiling on salary and
compensation is taken, this is an expression of greed and abuse of power.
Usually, there is no direct correlation between the profitability of a
corporation and the compensation to officers. In fact, in many
corporations, compensation increases even as profits fall. It is apparent
that high compensation does not usually serve as an incentive for a better
run or more profitable corporation. Obscene compensation packages
illustrate the power of the Board of Directors, a closed group which
perpetuates itself, by determining who is to be selected to the Board and
who is to be an officer of the company, as well as the compensation to be
received. The Board of Directors does not own the corporation, but it can
run the corporation as if it were their property. There is a general
perception in the United States that corporate officials are grossly
overpaid and that this state of affairs is promulgated by the policy of
Boards of Directors. There is no shortage of qualified people who would
gladly step in and do as good a job as the incumbent officers of the
Corporation and who would have no hesitation serving within the
aforementioned pay ceiling.
Any officer who believes he can better the corporation should be
sufficiently motivated to purchase stock on the open market or to receive
stock options as part of his salary and compensation package. To remain
competitive in world markets we must cut our costs and not overcompensate
directors and officers."
Last year a similar proposal received 3,074,577 of the stockholder's vote
FOR and 13,270,243 AGAINST. On this basis the vote FOR is 18.8%.
"If you agree, please mark your proxy FOR this resolution."
11
RECOMMENDATION OF THE BOARD OF TRUSTEES
The Board of Trustees believes that adoption of this Proposal would be
detrimental to the best interests of the Trust and its shareholders.
Accordingly, the Board recommends a vote AGAINST this Proposal.
The Proponents request that the Board of Trustees "institute a salary and
compensation ceiling" that would remove a necessary and desirable level of
flexibility needed to make proper compensation decisions. The Trustees believe
that this flexibility is key to attracting, motivating and retaining qualified
officers at the Trust and that the Board of Trustees should retain discretion
with respect to the compensation arrangements of the Trust's officers.
Compensation arrangements for the Trust's officers are the responsibility of
the Compensation Committee, comprised of three outside Trustees. The
Compensation Committee meets regularly and employs an independent compensation
consultant as well as outside legal counsel.
The Trust competes for executive talent with other publicly traded as well as
other real estate companies. Consequently, the design and scope of the Trust's
compensation program has a significant and direct impact on the Trust's ability
to attract and retain the best possible executive talent. The Trustees believe
that if the Trust loses its ability to compensate its officers at competitive
levels this in turn, will impact the Trust's ability to enhance overall
corporate performance and ultimately, shareholder value.
The need for flexibility in establishing officer compensation is the primary
reason the Trustees oppose this proposal. The Trustees also object to the
Proponent's suggestion that the Trust adopt an inappropriate standard for
comparison. It is misleading to compare the compensation of the Trust's
officers with the salary of the President of the United States because the
positions are so vastly different. In addition, the salary paid to the
President is just a very small part of the compensation received, both during
and after service in the White House.
The Proponents assert in their supporting statement that "officers give the
appearance that they run the corporations for their benefit rather than for the
benefit of the shareholders." The Trustees, in fact, believe that the Trust's
performance record reflects otherwise. During the past 20 years, including
periods of economic recession and marked downturns in certain segments of the
real estate market, the Trust's shareholders have enjoyed a compound average
annual return of 20%, which is well above the average 13% return of the S&P 500
for this same period. In addition, the Trust's steady growth has enabled the
Trustees to increase the annual dividend rate for 26 consecutive years. The
Trustees believe that this performance is, at least in part, a direct result of
the Trust's ability to attract and retain the best possible executive talent.
The affirmative vote of a majority of the Shares entitled to vote that are
present, in person or by proxy, at the Annual Meeting is required to adopt this
shareholder Proposal.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL 2.
CERTAIN TRANSACTIONS
Pursuant to the terms of the stock option plans, from 1984 through 1993
officers and key employees have exercised options and paid for some of the
Shares by issuance of notes to the Trust. The notes are for a term of five
years, interest payable quarterly, with interest at the per annum rate that is
the lesser of (i) the Trust's borrowing rate or (ii) the current indicated
annual dividend rate on the Shares acquired pursuant to the option divided by
the purchase price of such Shares. The notes are secured by the Shares, which
will not be released until the notes are paid in full. Pursuant to the terms of
a restrictive stock agreement Mr. Guttman borrowed $210,000, $105,000 of which
was repaid in 1992. The remaining balance of $105,000 is payable on April 15,
1996, with no interest. The note is secured by 18,975 Shares. In connection
with restricted Share
12
grants, the Trust has loaned officers funds with which to pay taxes on the
Shares. The notes, which total $76,000 as of March 28, 1994, bear interest at
the lesser of (i) the Trust's borrowing rate or (ii) the current indicated
annual dividend rate divided by the closing price of such Shares on the vesting
date. The loans are being forgiven pro-rata over three years if the officer is
still employed by the Trust.
In 1991, the Trust accepted notes from Trust officers in connection with the
1991 Share Purchase Plan for $5,359,922. The current balance of the notes is
$4,546,000. Up to 75% of the original principal balance of these loans may be
forgiven by the Trust if certain conditions are met. In connection with the
1991 Share Purchase Plan, the Trust has loaned officers $420,000 with which to
pay income taxes associated with the forgiveness. The interest rate on the
Share purchase loans and related tax loans is 9.39%. On January 1, 1994, the
Trust lent Mr. Kaplan $1,000,000 to purchase 40,000 Trust Shares. Up to 75% of
the original principal balance of this loan may be forgiven by the Trust if
certain conditions are met.
The following table sets forth the indebtedness to the Trust of the executive
officers as of March 28, 1994:
MAXIMUM
OUTSTANDING CURRENT
DURING BALANCE
NAME TITLE 1993 OF NOTES
- --------------------------------------------------------------------------------
Steven J. Guttman......... President and Chief $3,090,000 $2,269,000
Executive Officer
Ron D. Kaplan............. Vice President--Capital -- $1,200,000
Markets
Catherine R. Mack......... Vice President--General $ 403,000 $ 375,000
Counsel and Secretary
Mary Jane Morrow.......... Senior Vice President-- $ 805,000 $ 760,000
Finance and Treasurer
Hal A. Vasvari............ Executive Vice President-- $ 905,000 $ 860,000
Management
Cecily A. Ward............ Vice President--Controller $ 107,000 $ 103,000
Robert S. Wennett......... Senior Vice President-- $ 904,000 $ 975,000
Acquisitions
A retail women's clothing store owned by Mr. Guttman and his wife, which is
operated by Mr. Guttman's wife, leases space at one of the Trust's properties.
Terms of the lease were negotiated at arms length and reflected prevailing
market conditions. Total payments in 1993 for rent, operating expenses and real
estate taxes were $64,000. From time to time the Trustees may actively engage
on their own behalf and as agents for and advisors to others in real estate
transactions, including development and financing. The Trustees have agreed
that they will not acquire an interest in any property which meets the
investment criteria of the Trust without first offering the property to the
Trust.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Grant Thornton has been selected as independent public accountants for the
Trust for the current year, and examined the Trust's financial statements for
the year ended December 31, 1993. Grant Thornton also provided limited reviews
of the Trust's quarterly financial information and assisted in connection with
certain other filings with the Securities and Exchange Commission.
A representative of Grant Thornton will be present at the Annual Meeting and
will have the opportunity to make a statement and answer appropriate questions
from shareholders.
13
ANNUAL REPORT
A COPY OF THE TRUST'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 1993, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE MAILED
WITHOUT CHARGE TO SHAREHOLDERS UPON REQUEST. REQUESTS SHOULD BE ADDRESSED TO
THE TRUST, 4800 HAMPDEN LANE, SUITE 500, BETHESDA, MARYLAND 20814, ATTENTION:
MS. KATHY KLEIN, VICE PRESIDENT--CORPORATE COMMUNICATIONS. THE FORM 10-K
INCLUDES CERTAIN EXHIBITS, WHICH WILL BE PROVIDED ONLY UPON PAYMENT OF A FEE
COVERING THE TRUST'S REASONABLE EXPENSES.
SOLICITATION OF PROXIES, SHAREHOLDER PROPOSALS AND OTHER MATTERS
The cost of this solicitation of proxies will be borne by the Trust. In
addition to the use of the mails, Trust officials may solicit proxies in person
and by telephone or telegraph, and may request brokerage houses and other
custodians, nominees and fiduciaries to forward soliciting materials to the
beneficial owners of Shares.
Proposals of shareholders intended to be presented at the 1995 Annual Meeting
must be received by the Trust no later than November 30, 1994 to be considered
for inclusion in the Trust's proxy statement and form of proxy relating to such
meeting.
The Trustees know of no other business to be presented at the 1994 Annual
Meeting. If other matters properly come before the meeting, the persons named
as proxies will vote on them in accordance with their best judgment.
You are urged to complete, sign, date and return your proxy promptly to make
certain your Shares will be voted at the 1994 Annual Meeting. For your
convenience in returning the proxy, an addressed envelope is enclosed,
requiring no additional postage if mailed in the United States.
For the Trustees,
(Signature of Catherine R. Mack
Appears Here)
Catherine R. Mack
Vice President--General
Counsel and Secretary
YOUR PROXY IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES.
PLEASE SIGN, DATE AND MAIL IT TODAY.
14
PROXY
FEDERAL REALTY INVESTMENT TRUST
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned, a shareholder of Federal Realty Investment Trust (the
"Trust"), hereby constitutes and appoints THOMAS F. COONEY, ESQ., MARY JANE
MORROW and CECILY A. WARD, or any of them, as the true and lawful attorneys and
proxies of the undersigned, with full power of substitution, for and in the
name of the undersigned, to vote and otherwise act at the Annual Meeting of
Shareholders of the Trust to be held at the Four Seasons Hotel--Georgetown,
2800 Pennsylvania Avenue, N.W., Washington, D.C. on Wednesday, May 4, 1994 at
10:00 a.m., or at any adjournment thereof, with respect to all of the Common
Shares of Beneficial Interest of the Trust which the undersigned would be
entitled to vote, with all the powers the undersigned would possess if
personally present, on the following matters.
The undersigned hereby ratifies and confirms all that the aforesaid attorneys
and proxies may do hereunder.
(TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE SIDE
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
This Proxy when properly executed will be voted as directed by the
undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR" PROPOSAL 1 AND AGAINST PROPOSAL 2.
FOR WITHHELD
1. Election of Trustees: [_] [_]
A. Cornet de Ways Ruart; Morton S. Lerner; Walter F. Loeb
The Board of Trustees unanimously recommends a vote FOR the three Nominees.
For all, except as otherwise indicated (INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN
THE LIST.)
FOR AGAINST ABSTAIN
2. Shareholder Proposal to limit compensation
based on comparison to the President of the [_] [_] [_]
United States...............................
The Board of Trustees unanimously recommends a vote AGAINST Proposal 2.
3. In their discretion, on any other matters properly coming before the meeting
or any adjournment thereof.
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
SHAREHOLDER NAME AND ADDRESS
DO NOT PRINT IN THIS AREA
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
SIGNATURE(S) DATE
---------------------------------------------- ----------------
----------------------------------------------
NOTE: Please sign exactly as your name(s) appear(s) hereon. If the shares are
held jointly each party must sign. If the shareholder named is a corpora-
tion, partnership or other association, please sign its name and add your
own name and title. When signing as an attorney, executor, administrator,
trustee, guardian or in any other representative capacity, please also
give your full title or capacity.
