SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
REGENCY REALTY CORPORATION
(Name of Registrant as Specified in Its Charter)
------------------------------------------
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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REGENCY REALTY CORPORATION
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NOTICE AND PROXY STATEMENT
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 2000
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the annual meeting of shareholders of Regency
Realty Corporation (the "Company" or "Regency") will be held on Wednesday,
May 3, 2000, at 10:00 A.M., local time, in the second floor Auditorium of the
Modis Building, Independent Square, One Independent Drive, Jacksonville,
Florida.
The meeting will be held for the following purposes:
1. To elect four Class I Directors to serve terms expiring at the
annual meeting of shareholders to be held in 2003, and until
their successors have been elected and qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The shareholders of record at the close of business on March 22, 2000
will be entitled to vote at the annual meeting.
We hope you will be able to attend the meeting, but in any event we
would appreciate your dating, signing and returning the enclosed proxy as
promptly as possible. You may also vote via the internet, or by telephone, as
instructed on the enclosed proxy. If you are able to attend the meeting, you may
revoke your proxy and vote in person.
By Order of the Board of Directors,
J. Christian Leavitt
Senior Vice President, Secretary
and Treasurer
Dated: April 3, 2000
TABLE OF CONTENTS
Page
VOTING SECURITIES ............................................................1
Standstill................................................................4
ELECTION OF DIRECTORS ........................................................4
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION ......................9
Annual Incentive Component...............................................10
Long-Term Incentive Component............................................11
COMPARATIVE STOCK PERFORMANCE ...............................................12
EXECUTIVE COMPENSATION ......................................................13
Compensation Committee Interlocks and Insider Participation..............16
CERTAIN TRANSACTIONS ........................................................16
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ....................................17
OTHER MATTERS ...............................................................18
SHAREHOLDER PROPOSALS .......................................................18
ANNUAL REPORT ...............................................................18
EXPENSES OF SOLICITATION ....................................................18
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REGENCY REALTY CORPORATION
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
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PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD MAY 3, 2000
This Proxy Statement and the enclosed form of proxy are first being
sent to shareholders of Regency Realty Corporation on or about April 3, 2000 in
connection with the solicitation by the Company's Board of Directors of proxies
to be used at the 2000 annual meeting of shareholders of the Company. The
meeting will be held on Wednesday, May 3, 2000, at 10:00 A.M., local time,
in the second floor Auditorium of the Modis Building, Independent Square, One
Independent Drive, Jacksonville, Florida.
The Board of Directors has designated Martin E. Stein, Jr., Mary Lou
Fiala and Bruce M. Johnson, and each or any of them, as proxies to vote the
shares of common stock solicited on its behalf. If you sign and return the
enclosed form of proxy, you may nevertheless revoke it at any time insofar as it
has not been exercised by (1) giving written notice to the Secretary of the
Company, (2) delivering a later dated proxy, or (3) attending the meeting and
voting in person. The shares represented by the proxy will be voted unless the
proxy is mutilated or otherwise received in such form or at such time as to
render it not votable. If you have access to the Internet you may vote your
proxy electronically at the address on your proxy card. Please follow the
directions on your proxy card carefully.
If necessary, the holders of the proxies may vote in favor of a
proposal to adjourn the meeting to permit further solicitation of proxies in
order to obtain sufficient votes to approve any of the matters being considered
at the meeting. If the meeting is adjourned for any reason, at any subsequent
reconvening of the meeting all proxies may be voted in the same manner as such
proxies would have been voted at the original convening of the meeting (except
for any proxies that have effectively been revoked or withdrawn).
VOTING SECURITIES
The record of shareholders entitled to vote was taken at the close of
business on March 22, 2000. At such date, the Company had outstanding and
entitled to vote 56,510,825 shares of common stock, $.01 par value, 537,107
shares of Series 1 Cumulative Convertible Redeemable Preferred Stock, $.01 par
value (the "Series 1 Preferred Stock"), and 960,000 shares of Series 2
Cumulative Convertible Redeemable Preferred Stock, $.01 par value (the "Series 2
Preferred Stock"). The Series 1 Preferred Stock and the Series 2 Preferred Stock
vote together with the common stock as a single class (the "Voting Stock"). Each
share of Voting Stock entitles the holder to one vote. Holders of a majority of
the outstanding Voting Stock must be present in person or represented by proxy
to constitute a quorum at the annual meeting.
The following table shows certain information relating to the
beneficial ownership as of March 22, 2000 of (i) each person known to the
Company to be the beneficial owner of more
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than 5% of the Company's Voting Stock, (ii) each Director and nominee, (iii)
each of the named executive officers shown in the Summary Compensation Table
elsewhere in this proxy statement, and (iv) all Directors and executive officers
as a group. Except as otherwise indicated, the shareholders listed exercise sole
voting and dispositive power over the shares.
Amount and Nature of Shares Beneficially Owned(1)
Percent of
Number of Outstanding
Title of Shares Right to Restricted Percent Voting
Name Class Owned(2) Acquire Stock(4) of Class Shares
---- -------- --------- -------- ---------- -------- -----------
Security Capital U.S. Realty Common 34,378,236(5) - - 60.8% 59.3%
("SC-USRealty")(5)
Martin E. Stein, Jr. Common 734,439(6) 213,050 - 1.7% 1.6%
Mary Lou Fiala Common 5,701 27,830 20,225 * *
Thomas B. Allin Common 2,313 - - * *
Raymond L. Bank Common 5,640 4,000 - * *
A. R. Carpenter Common 13,362 7,000 - * *
Jeffrey A. Cozad Common 2,217 2,730 - * *
J. Dix Druce Common 30,227 7,000 - * *
John T. Kelley, III Common 38,991 2,543 - * *
Douglas S. Luke Common 31,163 6,044 - * *
John C. Schweitzer Common 12,500 1,920 - * *
Lee S. Wielansky Common 38,182 62,813 - * *
Terry N. Worrell Common 4,149 369,743 - * *
Bruce M. Johnson Common 81,865 86,353 9,092 * *
All directors and Common 1,000,749 791,026 29,317 3.2% 3.1%
Executive Officers as a
group (a total of 13
persons)
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*Less than one percent
(1) Information presented in this table and related notes has been obtained
from the beneficial owner and from reports filed by the beneficial owner
with the Securities and Exchange Commission pursuant to Section 13 of
the Securities Exchange Act of 1934.
(2) Excludes shares that:
o are restricted stock holdings,
o may be acquired through stock option exercises, or
o may be acquired upon conversion of limited partnership interests
in Regency Centers, L.P.
(3) Shares that can be acquired:
o through stock option exercises through May 21, 2000, or
o through conversion of limited partnership interest in Regency
Centers, L.P., or
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o through conversion of Series 1 Preferred Stock or Series 2
Preferred Stock.
(4) Shares subject to a vesting schedule, forfeiture risk and other
restrictions.
(5) Includes the following shares which are held by wholly-owned
subsidiaries of Security Capital Holdings, S.A., a wholly-owned
subsidiary of Security Capital U.S. Realty:
2,037,600 shares held by Security Capital Shopping Center I Sarl
2,037,600 shares held by Security Capital Shopping Center II Sarl
2,037,600 shares held by Security Capital Shopping Center III Sarl
2,037,600 shares held by Security Capital Shopping Center IV Sarl
2,037,600 shares held by Security Capital Shopping Center V Sarl
2,033,828 shares held by Security Capital Shopping Center VI Sarl
The business address of SC-US Realty and each of the listed Security
Capital subsidiaries is 25b boulevard Royal, Luxembourg L-2449.
(6) Includes the following shares over which Mr. Stein is deemed to have
shared voting and investment power:
o 160,263 shares held by The Regency Group (Nevada) Limited
Partnership, the sole general partner of which is a
wholly-owned subsidiary of The Regency Group, Inc. All of the
outstanding stock of The Regency Group, Inc. is owned by The
Regency Square II (Nevada) Limited Partnership, the sole
general partner of which is a corporation in which all of the
outstanding stock is owned by Mr. Stein and members of his
family.
o 307,147 shares held by The Regency Group II. Mr. Stein is a
general partner of The Regency Group II and a trustee of a
trust which is also a general partner.
o 108,235 shares held by Regency Square II. Mr. Stein is a
general partner of Regency Square II and a trustee of a trust
which is also a general partner.
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Standstill
SC-USRealty has agreed to a five-year "standstill" ending September 10,
2001 (renewable for additional one-year terms) in its Stockholders Agreement
with the Company, as amended. A "standstill" is an agreement by a shareholder to
refrain from changing its position, most frequently involving an agreement not
to acquire additional shares and/or not to take certain actions relating to
management or control, such as replacing one or more members of the Board of
Directors. Under the terms of SC-USRealty's standstill, SC-USRealty may not,
among other things, (1) acquire more than 60% of the Company's outstanding
common stock on a fully diluted basis, (2) transfer shares in a negotiated
transaction that would result in any transferee beneficially owning more than
9.8% of the Company's capital stock unless the Company approves the transfer, in
its sole discretion, (3) act in concert with any third parties as part of a 13D
group, or (4) seek to change the composition or size of the Board of Directors,
except as provided in the Stockholders Agreement with respect to SC-USRealty's
representation on the Board. During the standstill term, SC-USRealty is
generally required to vote its shares of common stock in accordance with the
recommendation of the Company's Board of Directors or proportionally in
accordance with the vote of the other holders of the common stock except (1)
with respect to the election of SC-USRealty's nominees to the Company's Board
(as to which SC-USRealty can vote its shares in its sole discretion); (2) with
respect to any amendment to the Company's Articles of Incorporation or Bylaws
that would reasonably be expected to materially adversely affect SC-USRealty;
and (3) certain extraordinary matters (as to which SC-USRealty may vote common
stock owned by it, not to exceed 49% of the outstanding shares, in its sole
discretion).
SC-USRealty's standstill requires it to vote at the annual meeting for
the Board of Directors' nominees (other than SC-USRealty's representatives) or
vote proportionally for such nominees in accordance with the vote of the other
shareholders.
SC-USRealty's standstill provides for automatic termination prior to
the end of its stated term upon the occurrence of certain events, including the
acquisition by another person or group of 9.8% or more of the voting power of
the Company's outstanding voting securities.
ELECTION OF DIRECTORS
The Company's Amended and Restated Articles of Incorporation divide the
Board of Directors into three classes, as nearly equal as possible. At the
meeting, four Class I Directors will be elected to serve for terms of three
years and until their successors are elected and qualified. The Board of
Directors has nominated Mary Lou Fiala, Douglas S. Luke, Lee Wielansky and Terry
N. Worrell to stand for reelection as Class I Directors. All nominees are
presently directors. Ms. Fiala and Mr. Luke were elected at the 1997 annual
meeting of shareholders, Mr. Wielansky was elected at the 1998 annual meeting of
shareholders and Mr. Worrell was elected at the 1999 annual meeting of
shareholders. Directors will be elected by a plurality of votes cast by shares
entitled to vote at the meeting.
The accompanying proxy will be voted, if authority to do so is not
withheld, for the election as Directors of each of the Board's nominees.
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Each nominee is presently available for election. If any nominee should become
unavailable, which is not now anticipated, the persons voting the accompanying
proxy may in their discretion vote for a substitute.
Information concerning all incumbent Directors and all
nominees for Director, based on data furnished by them, is set forth below.
Under the terms of a Stockholders Agreement between the Company and SC-USRealty,
SC-USRealty has the right, under certain circumstances, to nominate for election
by shareholders its proportionate share of the members of the Board (generally
not fewer than two, nor more than 49% of the Directors). Mr. Allin and Mr. Cozad
have been designated by SC-USRealty as its representatives to the Company's
Board of Directors. SC-USRealty currently has the right to designate three more
members to the Board of Directors but has chosen not to do so. In connection
with the Company's acquisition of assets from Branch Properties, L.P. ("Branch")
in March 1997, Opportunity Capital Partners II Limited Partnership, a Maryland
limited partnership ("OCP"), acquired shares of common stock in exchange for its
interest in Branch. OCP has the right to nominate one member of the Board so
long as it retains the shares of common stock received in connection with the
Branch transaction. Mr. Raymond Bank has been designated by OCP as its
representative to the Company's Board of Directors. In accordance with the
Agreement and Plan of Merger between Regency and Pacific Retail Trust ("Pacific
Retail"), Pacific Retail named Mr.
Kelley, Mr. Schweitzer, and Mr. Worrell as its representatives to the Board.
The Board of Directors of the Company recommends a vote "for" the
election of each of its nominees. Proxies solicited by the Board will be so
voted unless shareholders specify in their proxies a contrary choice.
MARTIN E. STEIN, JR.
Director since 1993; Class II term expiring 2001
Mr. Stein, age 47, is Chairman of the Board and Chief Executive Officer
of the Company. He served as President of the Company from its initial public
offering in October 1993 until December 31, 1998. Mr. Stein also served as
President of the Company's predecessor real estate division since 1981, and Vice
President from 1976 to 1981. He is a Director of FRP Properties, Inc., a
publicly held transportation and real estate company.
MARY LOU FIALA
Director since 1997; standing for re-election to Class I term expiring 2003
Ms. Fiala, age 48, became President and Chief Operating Officer of the
Company in January 1999. Prior to joining the Company she was Managing Director
- - Security Capital U.S. Realty Strategic Group from March 1997 to January 1999.
Ms. Fiala was Senior Vice President and Director of Stores, New England - Macy's
East/ Federated Department Stores from 1994 to March 1997. From 1976 to 1994,
Ms. Fiala held various merchandising and store operations positions with Macy's/
Federated Department Stores.
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THOMAS B. ALLIN
Director since 1999; Class III term expiring 2002
Mr. Allin, age 50, became Managing Director of Security Capital Group
Incorporated, a publicly held real estate research, investment and operating
management company, in December 1998. He served as President of Strategic Hotel
Capital Incorporated, a privately held owner of luxury and upscale full service
hotels, from April 1998 to November 1998, and President and Chief Executive
Officer of Gordon Biersch Brewing Company, a regional microbrewery and
restaurant operation located in California, from 1996 to 1998. From 1973 to
1996, Mr. Allin was Senior Vice President and Zone Manager of the Western Zone
for McDonald's Corporation, spending 15 years in Europe where he launched the
McDonald's System in France and later was responsible for the direction and
support of 20 European countries, as well as the development of new markets in
Africa and the Middle East.
RAYMOND L. BANK
Director since 1997; Class II term expiring 2001
Mr. Bank, age 46, has been President and Chief Operating Officer of
Merchant Development Corporation, a venture capital and buy-out firm focusing
on consumer retail, direct marketing, and service companies, since 1994. He has
also served as President of Raymond L. Bank Associates, Inc., a consulting firm
serving a diverse clientele in corporate development, retail, and direct
marketing strategies, since 1991. He is a Director of OfficeMax, Inc.
A. R. CARPENTER
Director since 1993; Class II term expiring 2001
Mr. Carpenter, age 58, is Vice Chairman (since July 1999) of CSX
Corporation. From 1962 until July 1999 he held a variety of positions with CSX
Transportation, Inc., including President and Chief Executive Officer (from 1992
to July 1999) and Executive Vice President-Sales and Marketing (from 1989 to
1992). Mr. Carpenter is a Director of Florida Rock Industries, Inc., Stein Mart,
Inc. and Birmingham Steel Corporation.
JEFFREY A. COZAD
Director since 1999; Class III term expiring 2002
Mr. Cozad, age 35, has been Director of Security Capital U.S. Realty
since June 1996 and of Security Capital Holdings since April 1997, and Managing
Director of Security Capital U.S. Realty and Security Capital Holdings since
June 1996. He was Senior Vice President of Security Capital Markets Group
Incorporated from June 1995 to June 1996 and Vice President of Security Capital
Group from August 1991 to June 1995. Prior to joining Security Capital Group,
Mr. Cozad was with LaSalle Partners Incorporated, where he provided corporate
real estate services to major institutions.
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J. DIX DRUCE, JR
Director since 1993; class II term expiring 2001
Mr. Druce, age 52, has been President and Chairman of the Board of Life
Service Corp., Inc., a life insurance management company, since 1988, and
President and Director of American Merchants Life Insurance Company and its
parent, AML Acquisition Company, since October 1992. He was President and
Director (Chairman from May 1989 to July 1991) of National Farmers Union Life
Insurance Company from 1987 to 1991, and President and Director of Loyalty Life
Insurance Company and NFU Acquisition Company from 1987 to 1991.
JOHN T. KELLEY, III
Director since 1999; Class III term expiring 2002
Mr. Kelley, age 59, was Chairman of Pacific Retail Trust's Board of
Trustees prior to its merger into the Company in February 1999. He is a Trustee
of Archstone Communities Trust, an Advisory Trustee of Prologis Trust and a
Director of Security Capital Group Incorporated. From 1987 to 1991 he was
Chairman of the Board of Kelley-Harris Company, Inc., a real estate investment
company, and from 1968 to 1987 he was Managing Director of LaSalle Partners
Limited, specializing in corporate real estate services.
DOUGLAS S. LUKE
Director since 1993; standing for re-election to Class I term expiring 2000
Mr. Luke, age 58, is President and Chief Executive Officer of HL
Capital, Inc., a personal management and investment company. Mr. Luke was
President and Chief Executive Officer of WLD Enterprises, Inc., a Ft.
Lauderdale, Florida based diversified private investment and management company
with interests in securities, real estate and operating businesses from 1991 to
1998. From 1987 to 1990 he was Managing Director of Rothschild Inc./Rothschild
Ventures. He is Director of Orbital Sciences Corporation, a space systems
company, and Westvaco Corporation, a diversified paper and chemicals
manufacturing company.
JOHN C. SCHWEITZER
Director since 1999; Class III term expiring 2002
Mr. Schweitzer, age 55, was a member of Pacific Retail Trust's Board of
Trustees prior to its merger into the Company in February 1999. He is President
of Westgate Corporation and Managing Partner of Campbell Capital, Ltd., which
holds investments in real estate and venture capital operations. Mr. Schweitzer
is a Trustee of Archstone Communities Trust, and a Director of Homestead Village
Incorporated, Chase Bank of Texas-Austin, Texas Christian University, Fort
Worth, Texas and KLRJ Austin Public Television. He previously served as a
director or officer of many public companies and financial institutions,
including Franklin Federal Bancorp, Elgin Clock Company, El Paso Electric
Company, MBank El Paso, the Circle K Corporation and Enerserv Products.
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LEE S. WIELANSKY
Director since 1998; standing for re-election to Class I term expiring 2003
Mr. Wielansky, age 49, has been Managing Director - Investments of the
Company since March 1998. He was President and Chief Executive Officer of
Midland Development Group, Inc. from 1983 to March 1998. Mr. Wielansky is a
Director of Allegiant Bancorp, Inc.
TERRY N. WORRELL
Director since 1999; standing for election to Class I term expiring 2003
Mr. Worrell, age 55, was a member of Pacific Retail Trust's Board of
Trustees prior to its merger into the Company in February 1999. He is a private
investor in commercial properties and other business ventures. From 1974
to 1989 he was President and CEO of Sound Warehouse of Dallas, Inc. prior to its
purchase by Blockbuster Music.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act, a Form 4 reporting
the acquisition or disposition of Company securities by an officer, director or
10% shareholder must be filed with the Securities and Exchange Commission no
later than the 10th day after the end of the month in which the transaction
occurred unless certain exceptions apply. Transactions not reported on Form 4
must be reported on Form 5 within 45 days after the end of the company's fiscal
year. To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the Company's 1999 fiscal year all applicable
Section 16(a) filing requirements were complied with by the officers, directors,
and greater than ten-percent beneficial owners.
Board of Directors and Standing Committees.
The Board held four regular meetings and three special meetings during
1999. All Directors attended at least 75% of all meetings of the Board and Board
committees on which they served during 1999.
The Board of Directors has established four standing committees: an
Executive Committee, an Audit Committee, a Compensation Committee and a
Nominating Committee, which are described below. Members of these committees
will be elected annually at the regular Board meeting held in conjunction with
the annual shareholders' meeting.
Executive Committee. The Executive Committee presently is comprised of
Martin E. Stein, Jr. (Chairman) or Mary Lou Fiala if Mr. Stein is unavailable,
one independent non-SC-USRealty Director, and any one independent Director
nominee of SC-USRealty. The Executive Committee met once during 1999. The
Executive Committee is authorized by the resolutions establishing the committee
to handle ministerial matters requiring Board approval. The Executive Committee
may not exercise functions reserved under Florida law for the full Board of
Directors and, in addition, may not declare dividends.
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Audit Committee. The Audit Committee presently is comprised of J. Dix
Druce, Jr. (Chairman), Raymond L. Bank, and Douglas S. Luke, none of whom is an
officer of the Company. The Audit Committee met twice during 1999. The
principal responsibilities of and functions generally performed by the Audit
Committee are reviewing the Company's internal controls and the objectivity of
its financial reporting, making recommendations regarding the Company's
employment of independent auditors, and reviewing the annual audit with the
auditors.
Nominating Committee. The Nominating Committee presently is comprised
of John C. Schweitzer (Chairman), Thomas B. Allin, A. R. Carpenter, John T.
Kelley, III and Martin E. Stein, Jr. The Nominating Committee, which makes
nominations for election of Directors, also has responsibility for accepting
nominations from shareholders. The Nominating Committee met once during 1999.
The Company's Bylaws require that any nominations by shareholders be delivered
to the Company no later than the deadline for submitting shareholder proposals.
See "Shareholder Proposals."
Compensation Committee. The Compensation Committee presently is
comprised of John C. Schweitzer (Chairman), Thomas B. Allin, A. R. Carpenter
and John T. Kelley, III. The Compensation Committee held four meetings during
1999 to review annual performance and to review and approve changes to the
Company's current executive compensation plans. This Committee has the
responsibility of approving the compensation arrangements for senior management
of the Company, including annual bonus and long term compensation. It also
recommends to the Board of Directors adoption of any compensation plans in which
officers and Directors of the Company are eligible to participate, as well as
makes grants of employee stock options and other stock awards under the
Company's Long Term Omnibus Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
is responsible for evaluating and establishing appropriate levels of executive
compensation and other benefit plans of the Company. The Committee is comprised
entirely of independent non-employee Directors.
Compensation Philosophy
The Company's executive compensation program is incentive based, and
has been designed to attract, motivate, reward and retain executives who are
result-oriented and capable of achieving the Company's key objectives.
The Committee evaluates and establishes the Company's executive
compensation program based upon current market information including comparative
executive compensation studies provided by Arthur Andersen. Regency's program
is comprised of base salary, an annual incentive bonus and a long-term incentive
component. The annual and long-term incentive compensation are primarily
variable in nature, and designed to effectuate a pay-for-performance philosophy.
This program considers management's ability to grow funds from operations per
share (FFO is the most widely-accepted measure of performance for real estate
investment trusts), position the Company for future FFO per share growth, and
strengthen the Company's capital structure. The Company's philosophy is that the
consistent achievement of
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these objectives should over time result in total shareholder returns that are
above the average for shopping center REITs.
1999 Operating Results
The Committee is pleased with Regency's 1999 financial, operating, and
development results. Funds from operations ("FFO") increased to $141 million
from $67 million in 1998 while per share FFO grew by 9.1% to $2.45. As important
was the remarkable progress the Company made building upon its merger with
Pacific Retail Trust to enhance the Company's development and operating
programs. These efforts established Regency as the leading national owner,
operator, and developer focused on neighborhood retail centers.
Regency generated significant profitable growth from its customer
driven development program. 15 shopping center developments and build-to-suits
at a cost $161 million were completed. These properties were 98% leased, and
generated an annualized unleveraged return on investment of 11.1%. Regency
realized $17.8 million in profits and fees from the sale of developments,
outparcels, and retailer services. $278 million of new developments, represent-
ing a 27% increase over 1998 were commenced. This activity was the result of
Regency growing its relationships with leading supermarket chains such as
Publix, Kroger, Safeway, and Albertsons.
The value of the existing portfolio increased substantially. Rental
revenues and net operating income more than doubled to $278.9 million and
$211.5 million, respectively. This growth was generated from the effective
assimilation of Pacific Retail's high quality, 80 property, 8 million square
foot portfolio and from same property NOI growth of 4.3%. The operating
portfolio was 95% leased. To achieve these results, in excess of 950 new leases
and renewals were signed for over 2.8 million square feet at 7.6% higher rents.
Regency's "Preferred Customer Initiative" furthered the Company's relationship
with key side shop retailers like Hallmark and Starbucks.
The balance sheet was strengthened in a difficult capital market
environment. Regency's debt to asset ratio was reduced to a conservative
37% from 42%. The line of credit was expanded on favorable terms to $635 million
from $300 million. Over $450 million of long term capital was cost effectively
raised in the form of $250 million of 5 and 10 year notes at 7.47% and $210
million of Perpetual Preferred Units at 8.94%. Standard and Poors upgraded
Regency's unsecured debt rating to BBB.
Annual Incentive Component
Base Salary. Base salaries of executives are reviewed annually by the
Committee. In determining appropriate base salaries, the Committee considers
external competitiveness in relation to the Company's current financial
condition and capital resources, the roles and responsibilities of the
individual, the contributions of the individual to the Company's business, an
analysis of job requirements and the individual's prior experience and
accomplishments.
Annual Performance Bonus. To provide additional incentive to
achieve outstanding performance, the Committee also makes cash bonus awards
based on corporate, group and individual performance. The compensation plan
established by the Committee in 1999 establishes target cash bonuses based on
achievement of quantitative and qualitative financial
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and operational goals for the Company and, where appropriate, those activities
of the Company managed by the executive. As a result of 1999 operating
performance, executive officers received bonuses equal to approximately 130% of
established targets.
Long-Term Incentive Component
Stock Options and Dividend Equivalents. In 1999, the Company granted
stock options to executives as part of their performance review. Options are
granted at fair market value on the date of grant, vest 25% per year, and
expire after 10 years. These options also receive dividend equivalents equal to
the Company's dividend yield less the average dividend yield of the S&P 500.
Dividend equivalents are funded in Company common stock, and vest at the same
rate as the options upon which they are based.
Restricted Stock Plan. The Company granted restricted stock to certain
executive officers in 1999 based on their position and their contribution to
1999's performance. The shares were granted at fair market value on the date of
grant, and vest over four years.
Stock Purchase Plan. The Committee structured a stock purchase plan
("SPP") whereby executives acquired common stock at fair market value by
investing their own capital in combination with loans provided by the Company.
These full recourse loans are secured by stock, which is held as collateral by
the Company. The terms and amounts of existing SPP loans are further described
under the summary of Executive Compensation included elsewhere in this Proxy
Statement. Certain SPP loans originated during 1993 and 1996 provide for loan
forgiveness awards primarily based upon growth in FFO per share and cumulative
total shareholder return. In 1999, the Company exceeded the performance target
that provides loan forgiveness related to FFO per share growth. Forgiveness
amounts related to total shareholder return were not achieved, and accordingly,
were not granted. Forgiveness amounts for the executives are reported in the
Summary Compensation Table as SPP Loan Awards.
CEO Compensation
The Committee's policies for determining the CEO's compensation are the
same as the other executives. For 2000, the CEO's base compensation remained at
1999's level of $400,000. As a result of 1999 performance, the CEO received an
incentive bonus of $520,000 and SPP loan forgiveness of $85,213, and was granted
options to purchase 125,000 shares of common stock at an average exercise price
of $20.44 per share, the fair market value on the grant dates. In March 2000 the
CEO entered into a change of control agreement having an initial term of five
years and providing for base salary and benefits for 24 months in the event of a
change of control and termination.
REGENCY REALTY CORPORATION
COMPENSATION COMMITTEE
John C. Schweitzer, Chairman
Thomas B. Allin
A. R. Carpenter
John T. Kelley, III
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COMPARATIVE STOCK PERFORMANCE
The graph below provides an indicator of cumulative total shareholder
returns for Regency as compared with the S&P Stock Index and the NAREIT Equity
Index, weighted by market value at each measurement point. The graph assumes
that $100 was invested on December 31, 1995 in Regency common shares and that
all dividends were reinvested by the shareholder.
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY, PEER GROUP AND BROAD MARKET
Fiscal Year Ending
-----------------------------------------------------------------
COMPANY/INDEX/MARKET 1994 1995 1996 1997 1998 1999
Regency Realty Corporation 100.00 113.13 190.61 214.13 184.75 181.03
NAREIT Equity Index 100.00 115.27 155.92 187.51 154.69 147.54
S&P 500 Index 100.00 137.58 169.17 225.61 290.09 351.13
ASSUMES $100 INVESTED ON JAN. 01, 1995
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 1999
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EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or
accrued by the Company for services rendered during fiscal 1999, 1998 and 1997
to the Company's Chief Executive Officer and the Company's two other executive
officers during the year ended December 31, 1999.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
------------------- ------------
Restricted Securities
Name & Principal Stock Underlying SPP Loan All Other
Position Year Salary(1) Bonus(2) Awards(3) Options/SARs(4) Awards(5) Compensation(6)
-------- ---- --------- -------- --------- --------------- --------- ---------------
Martin E. Stein, Jr. 1999 $ 400,000 $ 520,000 $ 0 125,000 $ 85,213 $ 9,941
Chairman and Chief 1998 $ 275,000 $ 350,000 $ 0 123,596 $ 135,775 $ 14,813
Executive Officer 1997 $ 275,000 $ 197,500 $ 265,800 232,626 $ 186,338 $ 17,325
Mary Lou Fiala 1999 $ 325,000 $ 360,000 $ 0 75,000 $ 0 $ 10,021
President and Chief 1998 $ 0 $ 0 $ 500,000 87,640 $ 0 $ 0
Operating Officer 1997 $ 0 $ 0 $ 0 0 $ 0 $ 0
Bruce M. Johnson 1999 $ 225,000 $ 175,000 $ 100,000 30,000 $ 37,268 $ 11,707
Managing Director and 1998 $ 190,000 $ 150,000 $ 100,000 29,213 $ 60,675 $ 15,870
Chief Financial Officer 1997 $ 180,000 $ 104,400 $ 132,900 128,390 $ 84,083 $ 18,143
- -------------------------
(1) Includes amounts deferred under the 401(k) feature of the Company's
profit sharing plan.
(2) Bonuses for the year ended December 31, 1999, 1998 and 1997 were paid
100% in cash.
(3) Consists of the fair market value of restricted stock awards in each of
the years of grant. 1999 and 1998 awards vest as follows: year 1 - 10%,
year 2 - 20%, year 3 - 30%, year 4 - 40%. 1997 awards vest 34%, 33%
and 33% on the first, second and third anniversary dates of the grant.
The executive is entitled to dividends and voting rights on unvested
shares. Shares representing the full amount of the awards listed above,
held by the named executives are as follows: Mr. Stein, 9,600 shares;
Ms. Fiala, 22,472 shares; and Mr. Johnson, 14,341 shares.
(4) The exercise prices of stock option grants are equal to fair market
value of the Company's common stock on date of grant.
(5) Represents amounts earned by the named executive officers in the form of
loan forgiveness in accordance with the terms of the stock purchase plan
that is part of the Company's 1993 Long Term Omnibus Plan, primarily
based upon FFO per share growth greater than 7%, annual shareholder
return of 15% or more and cumulative shareholder return of 20% or more
since January 1, 1996.
(6) The amounts shown in this column for 1999 include the following:
Life Insurance Company Contribution to Other
Premiums 401(k)/Profit Sharing Plan Compensation
-------- -------------------------- ------------
Mr. Stein $2,941 $6,000 $1,000
Ms. Fiala $3,021 $6,000 $1,000
Mr. Johnson $4,707 $6,000 $1,000
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Stock Purchase Plan. The following table sets forth as of March 1,
2000, the amounts outstanding under the SPP loan program due from each of the
Company's executive officers.
Largest Balance
SPP Loan Balance During Fiscal Year Ended
Executive Officer March 1, 2000 Interest Rate December 31, 1999
- ----------------- ------------- ------------- -----------------
Martin E. Stein, Jr. $1,257,165 6% - 7.8% $1,461,856
Mary Lou Fiala N/A N/A N/A
Bruce M. Johnson $ 822,657 6% - 7.8% $ 919,242
Stock Options. The following table sets forth information concerning
the value of unexercised options as of December 31, 1999 held by the executive
officers named in the Summary Compensation Table above.
AGGREGATED OPTION EXERCISES DURING FISCAL 1999
AND OPTION YEAR-END VALUES TABLE
Number of Number of Value of Unexercised
Shares Unexercised In-the-Money Options
Acquired Value Options at at
Upon Realized December 31, 1999 December 31, 1999
Exercise Upon Exercisable/ Exercisable/
Name Options Exercise Unexercisable Unexercisable
---- ------- -------- ------------- -------------
Martin E. Stein, Jr. 0 $0 213,050 (E) / $25,833 (E) /
327,317 U) $11,850 U)
Mary Lou Fiala 0 $0 27,830 (E) / None (E) /
140,731 (U) $7,216 (U)
Bruce M. Johnson 0 $0 86,353 (E) / $8,852 (E) /
114,052 (U) $2,886 (U)
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The following table sets forth information with respect to option
grants to the executive officers named in the Summary Compensation Table above
during 1999 and the potential realizable value of such option grants.
OPTION GRANTS DURING FISCAL 1999
% of Total Options Hypothetical Value
Number of Options Granted Exercise Price Expiration at
Executive Officer Granted(1) during 1999 ($/share) Date Grant Date(2)
----------------- ------- ----------- --------- ---- -------------
Martin E. Stein, Jr. 61,798 8.6% $21.0625 7-29-2009 $76,012
63,202 8.8% $19.8125 12-14-2009 $77,738
Mary Lou Fiala 36,517 5.1% $21.0625 7-29-2009 $44,916
38,483 5.3% $19.8125 12-14-2009 $47,334
Bruce M. Johnson 14,607 2.0% $21.0625 7-29-2009 $17,967
15,393 2.1% $19.8125 12-14-2009 $18,933
- ---------------------
(1) Stock options granted in 1999 vest 25% per year over 4 years. These
options, if exercised, may be reloaded, but expire after 10 years. These
options also earn dividend equivalents units (DEU) that vest at the same
rate as the underlying option. DEU's are credited to the participant's
account quarterly based upon the current dividend rate of Regency common
stock less the average dividend rate of the S&P 500.
(2) The estimated present value at grant date of each option granted during
1999 has been calculated to be $1.23 using the Black-Scholes option
pricing model. The valuation is based upon the following assumptions:
o estimated time until exercise of 5.3 years
o a risk-free interest rate of 5.7%; a volatility rate of 21%
o a dividend yield of 9.2%.
The approach used in developing the assumptions upon which the
Black-Scholes valuation was calculated is consistent with the
requirements of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation." The actual value of the
options may be significantly different, and the value actually realized,
if any, will depend upon the excess of the market value of the common
stock over the option exercise price at the time of exercise.
Change of Control Agreements. The Company has entered into change of
control agreements with each of the executive officers named in the Summary
Compensation Table providing for the executive officer to receive base salary
and benefits for 24 months in the event of a change of control and termination.
These agreements were effective March 1, 2000 and have an initial term of five
years, automatically renewing for successive additional five year terms unless
either party gives written notice of non-renewal.
Compensation of Directors. In 1999, the Company paid an annual fee of
$18,000 to each of its non-employee Directors, plus $500 for each Board
committee meeting attended. Directors' fees are currently paid in shares of
common stock, unless the Director elects to receive the fees in cash. During
1999, Directors could also elect to participate in a stock purchase matching
program that provides for a stock value match equal to 50% of the common
-15-
stock purchased by the Director, limited to a Company match of $10,000 per year.
For the year 2000 the stock purchase matching program has been discontinued and
the fees for non-employee directors were increased to $28,000 annually.
Non-employee Directors also receive non-qualified options to purchase
5,000 shares of common stock each year. These options are granted immediately
following each annual meeting and also entitle the Director to receive dividend
equivalent units on the same basis as employee optionees. The options have a
term of ten years, and have an exercise price equal to the greater of the fair
market value of the common stock on the date of grant or the average trading
price of the common stock for the 20 business days preceding the date of grant.
Beginning with the options granted in 1999, the annual options vest 25% on each
of the first four anniversary dates of the grant, and will become fully vested
upon the involuntary termination, death or disability of the Director. Options
granted prior to 1999 became fully vested one year after grant.
Compensation Committee Interlocks
and Insider Participation
During the year ended December 31, 1999, Martin E. Stein, Chairman and
Chief Executive Officer of the Company, served on the board of Directors of FRP
Properties, Inc. Edward L. Baker, Chairman of the Board of FRP Properties, Inc.
was a member of the Company's Compensation Committee until his retirement. Mr.
Baker retired from the Company's Board of Directors effective February 28, 1999,
the date of the merger with Pacific Retail Trust.
CERTAIN TRANSACTIONS
The Audit Committee of the Board of Directors is responsible for
evaluating the appropriateness of all related-party transactions.
Management Services for Barnett Bank Plaza. The Company, through its
affiliate, Regency Realty Group, Inc. (the "Management Company"), has provided
management and leasing services for Barnett Bank Plaza. All of such services
were provided on terms and conditions no less favorable to the Management
Company than the terms and conditions on which the Management Company provides
similar services to third parties. This arrangement was terminated in 1999. The
Audit Committee of the Board of Directors was required to review annually the
terms and conditions on which such services were provided. During the year ended
December 31, 1999, prior to termination of the arrangement, Barnett Bank Plaza
paid the Management Company an aggregate of $111,550 for such services. Barnett
Bank Plaza is owned by RSP II Barnett Bank Plaza, Ltd., a limited partnership
indirectly controlled by Martin E. Stein, Jr. and his family, and in which
certain executive officers of the Company also have an indirect ownership
interest.
Cost Sharing Arrangement with Management Company. The Company manages,
leases and develops properties under employee and cost sharing arrangements with
the Management Company. The Regency Group, Inc. owns 93% of the voting common
stock of the Management Company, and the Company, through its investment in
Regency Centers, L.P., owns 100% of the Management Company's non-voting
preferred stock and 7% of its voting common stock. The cost sharing arrangements
are based on allocations of
-16-
management time and general overhead made on an arm's-length basis and are in
compliance with applicable regulations of the Internal Revenue Service. All such
cost sharing arrangements must be reviewed annually by the Audit Committee of
the Board of Directors, and any changes in such arrangements must be approved by
a majority of the Company's independent Directors. Under generally accepted
accounting principles, all items of income and expense of the Management Company
are consolidated with the Company and included in the Company's financial
statements, net of inter-company transactions.
Transactions with SC-USRealty. In September 1999, the Company paid
Security Capital Markets Group, an affiliate of SC-USRealty ("SC Markets
Group"), a placement fee of $750,000 for its services as financial advisor in
connection with the sale of $50 million of 9.125% Cumulative Redeemable
Preferred Units of limited partnership interest in Regency Centers, L.P., the
Company's operating partnership.
In connection with the merger of Pacific Retail Trust into the Company
in February 1999, the Company engaged SC Markets Group to solicit shareholder
proxies for approval of the merger. SC Markets Group was paid $250,000 for their
solicitation services.
In September 1999, Regency entered into an agreement with SC
Markets Group to act as its broker in connection with the repurchase of $65
million of Regency common stock. During the period October 1999 through
February, 2000, Regency paid fees to SC Markets Group related to the stock
buyback program of $.05 per share or $157,707.
In October, 1999, Regency entered into an agreement with SC Markets
Group whereby SC Markets Group will act as Regency's financial advisor in
connection with identifying alternative sources of capital including arranging
and structuring a joint venture or fund that owns grocery-anchored shopping
centers. Fees paid to SC Markets Group, if any, will be based upon a percentage
(a range of 2% - 3%) of capital raised.
The Company has an administrative services agreement with SC Group
Incorporated, an affiliate of SC-USRealty, to provide risk management, property
tax, and income tax consulting services. During 1999, the Company paid SC-Group
Incorporated approximately $100,000 for these services.
In December 1999, Regency paid SC Markets Group a 1.5% fee of the gross
sales price of MacArthur Park as consideration for its assistance in identifying
a purchaser. The fee approximated $300,000.
As successor by merger to Pacific Retail, the Company became the owner
of all of the outstanding non-voting stock in PRT Development Corporation,
Pacific Retail's management company, in which Security Capital Holdings, S.A.
was the owner of all of the outstanding voting stock. In December 1999, the
Management Company purchased the voting stock held by Security Capital Holdings
S.A. for $272,000.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected the firm of KPMG LLP to serve as
the independent certified public accountants for the Company for the current
fiscal year ending December 31,
-17-
2000. That firm has served as the auditors for the Company since 1993.
Representatives of KPMG LLP are expected to be present at the annual meeting of
shareholders and will be accorded the opportunity to make a statement, if they
so desire, and to respond to appropriate questions.
OTHER MATTERS
The Board of Directors does not know of any other matters to come
before the meeting; however, if any other matters properly come before the
meeting, it is the intention of the persons designated as proxy to vote in
accordance with their best judgment on such matters. If any other matter should
come before the meeting, action on such matter will be approved if the number of
votes cast in favor of the matter exceeds the number opposed.
SHAREHOLDER PROPOSALS
Regulations of the Securities and Exchange Commission require proxy
statements to disclose the date by which shareholder proposals must be received
by the Company in order to be included in the Company's proxy materials for the
next annual meeting. In accordance with these regulations, shareholders are
hereby notified that if, pursuant to Rule 14a-8, they wish a proposal to be
included in the Company's proxy statement and form of proxy relating to the year
2001 annual meeting, a written copy of their proposal must be received at the
principal executive offices of the Company no later than December 5, 2000.
Proposals must comply with the proxy rules relating to shareholder proposals in
order to be included in the Company's proxy materials. Notice to the Company of
a shareholder proposal submitted otherwise than pursuant to Rule 14a-8 will be
considered untimely if received by the Company after December 5, 2000, and the
persons named in proxies solicited by the Company's Board for its Annual Meeting
of shareholders to be held in 2001 may exercise discretionary voting power with
respect to any such proposal as to which Regency does not receive timely notice.
To ensure prompt receipt by the Company, proposals should be sent certified mail
return receipt requested.
ANNUAL REPORT
A copy of the Company's Annual Report for the year ended December 31,
1999 accompanies this Proxy Statement. Additional copies may be obtained by
writing to Lesley Stocker, at the Company's principal executive offices, at 121
West Forsyth Street, Suite 200, Jacksonville, Florida 32202.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In
addition, the Company may reimburse brokers and other persons holding stock
in their names, or in the names of nominees, for their expenses for sending
proxy material to principals and obtaining their proxies.
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN
THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH HAS BEEN
PROVIDED. YOUR PROMPT RESPONSE WILL BE APPRECIATED. IF SUBMITTING YOUR PROXY
VIA THE INTERNET PLEASE FOLLOW THE INSTRUCTIONS ON YOUR PROXY CARD CAREFULLY.
-18-
REGENCY REALTY CORPORATION
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 3, 2000
The undersigned, having received the Notice of Annual Meeting
of Shareholders and Proxy Statement, appoints Martin E. Stein, Jr., Mary Lou
Fiala and Bruce M. Johnson, and each or any of them, as proxies, with full power
of substitution and resubstitution, to represent the undersigned and to vote all
shares of common stock of Regency Realty Corporation which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be held
on May 3, 2000, and any and all adjournments thereof, in the manner specified.
1. Election of four Class I Directors nominated by the Board of
Directors - (01) Mary Lou Fiala, (02) Douglas S. Luke, (03) Lee S. Wielansky and
(04) Terry N. Worrell.
[_] FOR all [_] WITHHOLD INSTRUCTION: To withhold authority to vote for any
nominees listed AUTHORITY individual nominee, write that nominee's name in the space
(except as marked to vote for provided below.)
to the contrary all nominees.
to the right).
-------------------------------------------------------------
(Continued and to be SIGNED and dated on the reverse side.)
(Continued from reverse side)
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" ELECTION OF EACH NOMINEE.
Should any other matters requiring a vote of the shareholders
arise, the above named proxies are authorized to vote the same in accordance
with their best judgment in the interest of the Company. The Board of Directors
is not aware of any matter which is to be presented for action at the meeting
other than the matters set forth herein.
Dated:________________, 2000
________________________________(SEAL)
________________________________(SEAL)
(Please sign exactly as name or names appear hereon. Executors, administrators,
trustees or other representatives should so indicate when signing.)