SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 Rule 14a-11(c) or Rule 14a-12
------------------------
JP REALTY, INC.
(Name of Registrant as Specified in its Charter)
------------------------
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Dated filed:
[LOGO OF JP REALTY APPEARS HERE]
JP Realty, Inc.
35 Century Park-Way
Salt Lake City, Utah 84115
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 5, 1999
To the Stockholders of
JP REALTY, INC.:
The 1999 Annual Meeting of Stockholders of JP Realty, Inc. (the "Company")
will be held at the Chamber of Commerce Briefing Center Room on the sixth floor
of the Chamber of Commerce Building, 175 East 400 South, Salt Lake City, Utah,
on Wednesday, May 5, 1999, at 10:00 a.m., MDT, for the following purposes:
1. To elect seven directors to serve on the Company's Board of Directors
until the 2000 Annual Meeting of Stockholders;
2. To ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for 1999; and
3. To transact such other business as may properly come before the 1999
Annual Meeting or any postponements and adjournments thereof.
The close of business on March 29, 1999 has been fixed by the Company's Board
of Directors as the record date for the determination of the stockholders
entitled to notice of, and to vote at, the 1999 Annual Meeting or any
adjournments thereof.
We hope all stockholders who can do so will attend the 1999 Annual Meeting in
person. Whether or not you plan to attend, we urge you to complete, date and
sign the enclosed proxy card and return it promptly in the enclosed postage-
prepaid envelope provided for that purpose. By returning your proxy promptly
you can help the Company avoid the expense of follow-up mailings to ensure the
presence of a quorum at the 1999 Annual Meeting. If you attend the 1999 Annual
Meeting, you may revoke your proxy and vote your shares in person.
THE ENCLOSED PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSED ITEMS.
By Order of the Board of Directors,
/s/ Paul K. Mendenhall
Paul K. Mendenhall
Secretary
Salt Lake City, Utah
April 2, 1999
[LOGO OF JP REALTY APPEARS HERE]
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 5, 1999
This Proxy Statement is being furnished in connection with the solicitation
of proxies by, and on behalf of, the Board of Directors of JP Realty, Inc., a
Maryland corporation (the "Company"), for use at the 1999 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at the Chamber
of Commerce Briefing Center Room on the sixth floor of the Chamber of Commerce
Building, 175 East 400 South, Salt Lake City, Utah, on Wednesday, May 5, 1999,
at 10:00 a.m., MDT, or at any postponements or adjournments thereof.
Stockholders are requested to complete, date and sign the enclosed proxy
card (the "Proxy") and return it in the postage-prepaid envelope provided.
Valid Proxies will be voted as specified thereon at the Annual Meeting. Any
stockholder giving a Proxy in the accompanying form retains the power to
revoke such Proxy at any time prior to its exercise by delivering to the
Company a written notice of revocation or a duly executed Proxy bearing a
later date or upon request if the stockholder attends the Annual Meeting and
chooses to vote in person. Any notice of revocation sent to the Company must
include the stockholder's name and must be received prior to the Annual
Meeting to be effective. If a Proxy is properly signed, returned without
specifying any instructions and not revoked prior to the Annual Meeting, the
shares represented by such Proxy will be voted FOR the election of the
nominees to serve as directors until the 2000 Annual Meeting of Stockholders
and FOR ratification of the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for 1999.
This Proxy Statement, the Notice of Annual Meeting of Stockholders and the
Proxy are first being sent to stockholders on or about April 2, 1999.
ANNUAL REPORT
This Proxy Statement is accompanied by the Annual Report to Stockholders of
the Company for the year ended December 31, 1998, including financial
statements audited by PricewaterhouseCoopers LLP, the Company's independent
auditors, and their report thereon, dated February 3, 1999.
VOTING SECURITIES AND RECORD DATE
Holders of shares of Common Stock, $.0001 par value (the "Common Stock"), of
the Company will be entitled to one vote for each share of Common Stock held
of record at the close of business on March 29, 1999 (the "Record Date") with
respect to the election of five of the seven directors of the Company, the
ratification of the appointment of PricewaterhouseCoopers LLP as the Company's
independent auditors and any other proposal for stockholder action as may
properly come before the Annual Meeting. Holders of shares of Price Group
Stock, $.0001 par value (the "Price Group Stock"), of the Company vote
together as a single class with the holders of Common Stock on the foregoing
matters and are entitled to one vote for each share of Price Group Stock held
of record at the close of business on the Record Date. In addition, holders of
shares of Price Group Stock have other voting rights as specified below under
"ELECTION OF DIRECTORS." Abstentions and broker non-votes are each included in
the determination of the number of shares present and voting for the purposes
of determining whether a quorum is present at the Annual Meeting and each is
tabulated separately. The shares of Common Stock and Price Group Stock
represented by valid Proxies which abstain with respect to any matter will not
be counted as an affirmative vote in determining whether the requisite vote of
the shares were cast in favor of that matter.
The disposition of business scheduled to come before the Annual Meeting,
assuming a quorum is present, will require the following affirmative votes:
(a) for the election by the holders of Common Stock and Price Group Stock of
the five nominees to serve as directors, a plurality of the shares of Common
Stock and Price Group Stock, voting together as a single class, present or
represented by Proxy at the Annual Meeting; (b) for the election by the
holders of Price Group Stock of the two remaining nominees to serve as
directors, a plurality of the shares of Price Group Stock, present or
represented by Proxy at the Annual Meeting; and (c) for the ratification of
the appointment of PricewaterhouseCoopers LLP as the Company's independent
auditors for the calendar year ending December 31, 1999, a majority of the
shares of Common Stock and Price Group Stock, voting together as a single
class.
As of the Record Date, the Company had issued and outstanding 17,440,747
shares of Common Stock and 200,000 shares of Price Group Stock.
1. ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of seven directors:
John Price, G. Rex Frazier, Warren P. King, James A. Anderson, Allen P.
Martindale, Sam W. Souvall and Albert Sussman.
Under the Company's Amended and Restated Articles of Incorporation, for the
period that John Price, his spouse and children, any lineal descendants of any
of the foregoing, any estates of any of the foregoing, any trusts created for
their benefit, and entities which any of the foregoing control (together, the
"Price Group") continue to hold a combined 10% or greater direct or indirect
economic interest in Price Development Company, Limited Partnership, a
Maryland limited partnership (the "Operating Partnership"), in which the
Company holds an 83% general partner interest and through which the Company
conducts all of its business, the holders of Price Group Stock will elect two
of the seven members of the Board of Directors and the holders of Common Stock
and Price Group Stock, voting together as a single class, will elect the
remaining five members of the Board of Directors.
Five persons have been nominated by the Board of Directors for election as
directors by the holders of Common Stock and Price Group Stock, voting
together as a single class, at the Annual Meeting to serve until the 2000
Annual Meeting of Stockholders and until their respective successors are
elected or appointed. It is intended that the shares of Common Stock and Price
Group Stock represented by properly executed Proxies will be voted by the
Proxy holders FOR the re-election of the five nominees listed below, unless
authority to so vote is withheld. If the candidacy of any of such nominees
should, for any reason, be withdrawn, the Proxy holders will vote in favor of
the remaining nominees and for such substituted nominees (if any) as shall be
designated by the Proxy holders. The Board of Directors has no reason to
believe that any of such nominees will be unable or unwilling to serve as a
director if re-elected.
The following information is furnished regarding the nominees for election
by the holders of Common Stock and Price Group Stock, voting together as a
single class.
John Price, age 65, has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company since September 1993. Mr. Price formed
Fairfax Realty, Inc. ("Fairfax") in 1972, and its predecessor, John Price
Associates, Inc., a construction company, in 1957. Mr. Price has developed and
built substantial retail and commercial real estate properties during his 41
years in the real estate industry and has been involved in all facets of real
estate development, construction, leasing, management and financing. Mr. Price
is a member of the Board of Directors and the Executive Committee of Alta
Industries--Utah, Inc. (a distributor of ferrous and nonferrous metals and a
manufacturer of roofing, siding, and other structural components). Mr. Price
is also a member of the NAREIT Board of Governors, a member of the NAREIT
Legislative Advisory Council, a trustee of the University of Utah, a member of
the Board of Trustees of the Salt Lake Organizing Committee for the 2002
Winter Olympic Games, a member of the Board of Directors of the Utah State
Fairpark Corporation which operates the Utah State Fairgrounds and a member of
the Advisory Board of the First Security Bank of Utah, N.A. Mr. Price is a
graduate of the University of Utah.
2
G. Rex Frazier, age 55, has served as President and Chief Operating Officer
and a Director of the Company since September 1993. Mr. Frazier has served as
President and Chief Operating Officer of Fairfax since 1986, prior to which he
had served as Executive Vice President, Vice President--Finance and Director
of Finance. Mr. Frazier has been involved in the real estate industry since
1976. He is a certified public accountant and, prior to joining Fairfax,
worked as an audit supervisor with Touche Ross & Company. Mr. Frazier is a
graduate of the University of Utah.
Warren P. King, age 61, has been a Director since the formation of the
Company and was appointed Vice Chairman of the Board of Directors in August
1994. Prior to the formation of the Company, Mr. King served as Vice Chairman
of the Board of Directors and Chairman of the Finance Committee of Fairfax
beginning in 1977 and has been involved in the real estate industry since
1974. He is the President and Chief Executive Officer and director of Alta
Industries--Utah, Inc. He is a certified public accountant and is a graduate
of Stevens Henager Business College.
James A. Anderson, age 63, has been a Director since the formation of the
Company. From April 1978 to March 1993, Mr. Anderson was the Chairman of the
Board of Directors of the State of California Mining and Geology Board. He
also was the Executive Vice President of Fulcrum Management, Inc. (a public
and private natural resource venture capital investment company) from 1987 to
1991, and was a director of Venture Trident Ltd. Partnership (the parent
company of Fulcrum Management, Inc.). He also served as a director of
Homestake Mining Company from 1980 to 1987 and as Executive Vice President
from 1979 to 1987. Mr. Anderson received his bachelor's degree in geological
engineering from the University of Utah, a masters degree in mining geology, a
doctorate degree in economic geology from Harvard University and a degree in
business administration from the Stanford University Executive Program.
Sam W. Souvall, age 78, has been a Director since the formation of the
Company. Since 1979, Mr. Souvall has been Chairman of the Board of Alta
Industries--Utah, Inc. and, from 1970 to 1978, was President and Chief
Executive Officer of that company. From 1972 to 1984, Mr. Souvall served as a
director of Valley Bank & Trust Company and as Chairman of the Board of
Directors from 1984 to 1988. Mr. Souvall also served as Chairman of the Board
of Directors of Utah Bancorporation from 1980 to 1988, and as President and
Chief Executive Officer of Souvall Bros. Intermountain Wholesalers from 1946
to 1969.
The Board of Directors recommends a vote FOR the election of Messrs. Price,
Frazier, King, Anderson and Souvall as directors of the Company.
The following information is furnished regarding the two nominees who will
be elected by the holders of Price Group Stock at the Annual Meeting.
Allen P. Martindale, age 67, has been a Director since the formation of the
Company. Since 1988, Mr. Martindale has served as the President of A.P.M.
Associates (a management consulting firm). Mr. Martindale has served as a
director of Smith's Food and Drug Center, Inc. (a retail food and drug store)
since 1970 and served such company in several senior executive capacities
since that date, including Chairman of the Board of Directors and Chief
Executive Officer. He also served as President and Chief Executive Officer of
Arden-Mayfair from 1964 to 1970. Mr. Martindale is a certified public
accountant and a graduate of the University of California at Los Angeles.
Albert Sussman, age 82, has been a Director since the formation of the
Company. Since January 1985, Mr. Sussman has been the Senior Advisor and a
lifetime member of the Board of Trustees of the International Council of
Shopping Centers, an organization of which he had previously served as
executive head for 28 years. From 1987 to 1988, Mr. Sussman was consultant to
LaSalle Partners (a national firm which specializes in the management and
investment of real estate properties held by major corporations) and he also
was a consultant to Kimco Realty Corporation (a public company owning/managing
small and medium-size shopping centers). Mr. Sussman is a graduate of the City
College of New York and has studied at Oxford University, the University of
Vilnius and Columbia University.
3
Vacancies occurring on the Board of Directors as a result of (i) the removal
of a director for cause may be filled by either the stockholders of the
Company or a majority of the remaining directors, (ii) an increase in the size
of the Board of Directors may be filled by either the stockholders of the
Company or a majority of the entire Board of Directors or (iii) any cause
except for an increase in the size of the Board of Directors shall be filled
by a majority of the remaining directors. Vacancies occurring on the Board of
Directors as a result of the death, resignation, removal or retirement of a
director elected by the holders of Price Group Stock shall be filled by
holders representing a majority of the outstanding shares of Price Group
Stock. In addition, any change in the size of the Board of Directors must be
approved by holders representing a majority of the outstanding shares of Price
Group Stock.
There is no familial relationship among any of the members of the Board of
Directors or executive officers of the Company.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers LLP as the
independent auditors to examine the accounts of the Company for the 1999
calendar year. PricewaterhouseCoopers LLP and its predecessor, Price
Waterhouse LLP, have served as the Company's independent auditors since the
Company was formed. In the event that ratification of this appointment of
auditors is not approved by the affirmative vote of a majority of the shares
of Common Stock, the Board of Directors will review its future selection of
auditors.
A member of PricewaterhouseCoopers LLP is expected to be in attendance at
the Annual Meeting to respond to questions.
The Board of Directors recommends a vote FOR ratification of the appointment
of PricewaterhouseCoopers LLP as the Company's independent auditors.
BOARD OF DIRECTORS, COMMITTEE MEETINGS
AND COMPENSATION OF DIRECTORS
Board of Directors and Committees of the Board of Directors
During the fiscal year ended December 31, 1998, the Board of Directors held
four meetings. Each of the Company's directors attended at least 75% of the
board meetings and assigned committee meetings held in 1998.
The Board of Directors has three standing committees: the Executive
Committee, the Audit Committee and the Executive Compensation Committee. The
Company does not have a standing nominating committee; the usual functions of
such committee are performed by the entire Board of Directors.
Executive Committee. John Price (Chairman), G. Rex Frazier and Warren P.
King are members of the Executive Committee. Such Committee, which met 26
times in 1998, has the authority to acquire, dispose of and finance
investments for the Company and to authorize the execution of contracts and
agreements, including those related to the borrowing of money by the Company,
and to generally exercise all other powers of the Board of Directors, except
as prohibited by law.
Audit Committee. Warren P. King (Chairman), Allen P. Martindale and Sam W.
Souvall are members of the Audit Committee. Such Committee, which met three
times in 1998, makes recommendations concerning the engagement of independent
public accountants, reviews with the independent public accountants the plans
and results of the audit engagement, approves professional services provided
by the independent public accountants, reviews the independence of the
independent public accountants, considers the range of audit and non-audit
fees, and reviews the adequacy of the Company's internal accounting controls.
4
Executive Compensation Committee. Warren P. King (Chairman), James A.
Anderson and Sam W. Souvall are members of the Executive Compensation
Committee. Such Committee, which met once in 1998, determines compensation for
the Company's executive officers and administers and reviews the Company's
1993 Stock Option Plan.
Compensation of Directors
The Company pays an annual fee of $15,000 to its non-employee directors.
Directors who are employees of the Company are not paid any director fees. The
Company also reimburses directors for travel expenses incurred in connection
with their activities on behalf of the Company. In addition, on the date of
each Annual Meeting of the Company's stockholders, each non-employee director
then in office receives an annual grant of options to purchase 1,000 shares of
Common Stock at the then current market price. Additionally, each non-employee
director is granted options to purchase 10,000 shares of Common Stock at the
then current market price upon becoming a member of the Executive Committee
and options to purchase an additional 2,000 shares at the then current market
price on the date of each Annual Meeting of the Company's stockholders
thereafter that such non-employee director continues as a member of the
Executive Committee.
EXECUTIVE COMPENSATION
Summary of Executive Compensation
The following table sets forth certain information concerning the
compensation paid by the Company to its Chief Executive Officer and Chairman
of the Board of Directors and to its President and Chief Operating Officer,
Vice President and General Counsel, Vice President--Chief Financial Officer
and Treasurer and Vice President--Chief Investment Officer and Secretary, the
Company's four most highly compensated executive officers other than the Chief
Executive Officer (together with the Chief Executive Officer, the "Named
Executive Officers").
Summary Compensation Table
Long-Term
Annual Compensation Compensation Awards
--------------------- ---------------------
Name and Principal Securities All Other
Positions Year Salary($) Bonus($)(1) Underlying Options(#) Compensation($)
------------------ ---- --------- ----------- --------------------- ---------------
John Price(2) 1998 $130,000 $78,000 12,500 $ 7,077(3)
Chairman of the Board 1997 118,500 53,325 -- 13,313(4)
and Chief Executive
Officer 1996 115,000 86,250 -- 11,767(5)
G. Rex Frazier 1998 $142,360 $84,000 12,500 $ 7,585(3)
President and Chief 1997 134,000 60,300 -- 14,596(4)
Operating Officer 1996 130,000 97,500 12,500 11,007(5)
David R. Sabey 1998 $108,860 $31,631 5,000 $ 6,168(3)
Vice President and
General 1997 103,000 20,394 -- 8,941(4)
Counsel 1996 100,000 33,000 5,000 8,925(5)
M. Scott Collins 1998 $101,360 $44,550 25,000 $ 5,834(3)
Vice President--Chief
Financial 1997 56,857 20,000 -- 3,261(4)
Officer and Treasurer 1996 -- -- -- --
Paul K. Mendenhall 1998 $ 88,360 $38,700 10,000 $ 5,723(3)
Vice President--Chief
Investment 1997 82,500 24,750 -- 10,459(4)
Officer and Secretary 1996 80,000 40,000 10,000 9,194(5)
- --------
(1) Bonuses received for 1996, 1997 and 1998 were paid in February, 1997,
1998 and 1999, respectively.
(2) Mr. Price receives a minimum of $100,000 in annual compensation and
participates in other standard benefit programs available to senior
executives generally pursuant to a year-to-year employment and
5
non-competition agreement that was entered into on January 21, 1994, the
closing date of the Company's initial public offering (the "IPO").
(3) Amounts received in 1998 for each of the Named Executive Officers are as
follows:
Health Life Retirement
Insurance Insurance 401(k) Plan Plan Total
--------- --------- ----------- ---------- -------
John Price $1,715 $1,890 $1,000 $2,472 $ 7,077
G. Rex Frazier 1,715 675 1,000 4,194 7,585
David R. Sabey 1,715 261 1,000 3,192 6,168
M. Scott Collins 1,715 153 1,000 2,966 5,834
Paul K. Mendenhall 1,715 432 1,000 2,577 5,723
(4) Amounts received in 1997 for each of the Named Executive Officers are as
follows:
Health Life Retirement
Insurance Insurance 401(k) Plan Plan Total
--------- --------- ----------- ---------- -------
John Price $7,708 $1,053 $1,000 $3,552 $13,313
G. Rex Frazier 9,147 432 1,000 4,017 14,596
David R. Sabey 4,592 261 1,000 3,088 8,941
M. Scott Collins 1,569 34 -- 1,658 3,261
Paul K. Mendenhall 6,530 432 1,000 2,497 10,459
(5) Amounts received in 1996 for each of the Named Executive Officers are as
follows:
Health Life Retirement
Insurance Insurance 401(k) Plan Plan Total
--------- --------- ----------- ---------- -------
John Price $6,264 $1,053 $1,000 $3,450 $11,767
G. Rex Frazier 5,675 432 1,000 3,900 11,007
David R. Sabey 4,772 153 1,000 3,000 8,925
Paul K. Mendenhall 5,487 261 1,000 2,446 9,194
Option Grants for Calendar Year 1998
The following table sets forth as to each of the Named Executive Officers
information with respect to option grants during 1998.
Option Grants in Fiscal 1998
Potential
Realizable Value at
Assumed Annual
Number of Percent of Rates of Stock
Securities Total Options Price Appreciation
Underlying Granted to for Option Term (1)
Options Employees in Exercise of Base -------------------
Name Granted(#) Fiscal Year(%) Price ($/Sh) Expiration Date 5%($) 10%($)
- ------------------ ---------- -------------- ---------------- --------------- -------- ----------
John Price 12,500 7.6% $25.25 10/03 $198,494 $ 503,028
G. Rex Frazier 12,500 7.6% 25.25 10/03 198,494 503,028
David R. Sabey 5,000 3.0% 25.25 10/03 79,400 201,211
M. Scott Collins 25,000 15.2% 25.25 10/03 396,993 1,006,049
Paul K. Mendenhall 10,000 6.0% 25.25 10/03 158,797 402,422
- --------
(1) These amounts represent certain assumed rates of appreciation only.
Actual gains, if any, on option exercises and holdings of Common Stock
are dependent on the future performance of the Common Stock.
6
Option Exercises/Values of Unexercised Options
The following table sets forth as to each of the Named Executive Officers
information with respect to option exercises during 1998 and unexercised
options on December 31, 1998.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values(1)
Number of
Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options
Shares Fiscal Year-End(#) at Fiscal Year-End($)(2)
Acquired Value ------------------------- -------------------------
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------ -------------- ----------- ----------- ------------- ----------- -------------
John Price -- -- 159,000 65,500 $337,875 $112,625
G. Rex Frazier 3,535 $7,512 40,515 30,000 75,469 21,250
David R. Sabey -- -- 17,100 12,000 32,088 8,500
M. Scott Collins -- -- -- 25,000 -- --
Paul K. Mendenhall -- -- 27,143 22,000 49,179 12,750
- --------
(1) No SARs are held by any of the Named Executive Officers.
(2) In accordance with the rules of the Securities and Exchange Commission
(the "Commission"), values are calculated by subtracting the exercise
price of an option from the fair market value of the underlying Common
Stock. For purposes of this table, fair market value is deemed to be
$19.625, the closing price of the Common Stock reported for the New York
Stock Exchange on December 31, 1998.
Report on Executive Compensation
This report is presented to describe the compensation policies applied by
the Executive Compensation Committee of the Board of Directors with regard to
the Company's executive officers and the basis for the compensation of John
Price, Chief Executive Officer of the Company, for the year 1998.
Compensation Philosophy. The Company's compensation program for executive
officers is based upon a desire to achieve both its short-term and long-term
business goals and strategies with a view to enhancing stockholder value. To
achieve its goals, the Company recognizes that it must adopt a compensation
program which will attract, retain and motivate qualified and experienced
executive officers and that its compensation program should align the
financial interests of its executive officers with those of its stockholders.
Compensation of Executive Officers (other than the Chief Executive Officer).
Each year, the Executive Compensation Committee reviews the compensation of
each executive officer of the Company for the previous year. In approving the
1998 annual salary for each of the executive officers, the Executive
Compensation Committee considered several factors, including the individual's
salary for the previous year, the individual's anticipated bonus (if any) for
the previous year, the scope of the individual's responsibilities, the
recommendations of management as to salary and bonus formula for the
subsequent year, the Company's historical financial results and the Company's
anticipated financial performance. The compensation determination for each
individual was largely subjective, and no specific weight was given to any
particular factor. In addition to their base salaries, these executive
officers of the Company are eligible to participate in the Management
Incentive Compensation Plan described below and to receive discretionary
bonuses tied to their individual performances and the overall performance of
the Company.
Compensation of Chief Executive Officer. The Executive Compensation
Committee determined the 1998 annual salary for John Price, Chief Executive
Officer of the Company, based upon a number of factors and criteria, including
the Company's historical financial results, the Company's anticipated
financial performance and the requirements of Mr. Price. As Chief Executive
Officer of the Company, Mr. Price is also eligible to participate in the
Management Incentive Compensation Plan described below and to receive
discretionary bonuses tied to his individual performance and the overall
performance of the Company.
7
1993 Stock Option Plan. The Company believes that providing executive
officers with opportunities to acquire significant equity stakes in its growth
and prosperity through the grant of stock options will enable the Company to
attract and retain qualified and experienced executive officers. Stock options
represent a valuable portion of the compensation program for the Company's
executive officers. Stock options are generally awarded to executive officers
at the time that they join the Company and periodically thereafter. The
exercise price of stock options has thus been tied to the fair market value of
the Company's Common Stock on the date of the grant and will only have value
if the value of the Common Stock increases. The size of the initial grants of
stock options made to the existing executive officers was determined in
connection with the formation of the Company. As of December 31, 1998, there
have been only two additional grants of stock options to executive officers
under the plan. Future grants of stock options to executive officers will
generally be made by the Executive Compensation Committee upon the
recommendation of management and be based upon the level of each executive
officer's position with the Company, an evaluation of the executive officer's
past and expected future performance, the number of outstanding and previously
granted options, and discussions with the executive officer.
Management Incentive Compensation Plan. The Company established an incentive
compensation plan for its officers beginning in 1995. The plan provides that
each officer will earn a cash bonus for a calendar year equal to a percentage
of his annual base salary provided that the Company's funds from operations
per share of Common Stock increase at specified levels as compared to the
previous year. The Executive Compensation Committee will review the plan at
the end of each fiscal year to determine if it should be retained or revised
to take into consideration future developments.
Executive Compensation Committee
Warren P. King, Chairman
James A. Anderson
Sam W. Souvall
Compensation Committee Interlocks and Insider Participation
John Price, Chief Executive Officer of the Company, is a director of Alta
Industries--Utah, Inc.; Warren P. King, a Director of the Company and the
Chairman of the Executive Compensation Committee of the Company's Board of
Directors, is the President and Chief Executive Officer of Alta Industries--
Utah, Inc.
SHARE PERFORMANCE GRAPH
The graph and table set forth below compare the cumulative total stockholder
return on the Company's Common Stock for the period of January 1994 through
December 1998, with the NAREIT Equity Retail REIT Total Return Index, the
NAREIT Equity Mall REIT Total Return Index and the S&P 500 Index for the same
period. The graph and table assume an investment of $100 in the Common Stock
and each index on or about January 21, 1994, the date trading of the Common
Stock commenced on the New York Stock Exchange, and the reinvestment of all
dividends.
8
[SHARE PERFORMANCE GRAPH APPEARS HERE]
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Jan. 31, 1994 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1998
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Equity Retail REIT 100.00 99.45 104.53 140.70 164.54 156.74
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Equity Mall REIT 100.00 105.42 108.58 157.73 179.33 174.63
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S&P 500 Index 100.00 98.02 134.71 165.64 220.91 284.04
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JP Realty, Inc. 100.00 123.11 135.91 173.40 186.23 153.13
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There can be no assurance that the Company's share performance will continue
into the future with the same or similar trends depicted in the graph above.
The Company will not make or endorse any predictions as to future share
performance.
The foregoing Share Performance Graph and the Report on Executive
Compensation shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), except to the extent that the
Company specifically incorporates such graph or report by reference and shall
not otherwise be deemed filed under such acts.
9
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and holders of more than 10% of the outstanding shares of
Common Stock ("10% Stockholders") to file with the Commission and the New York
Stock Exchange initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.
Directors, executive officers and 10% Stockholders are required by the
Commission's regulations to furnish the Company with copies of all Section
16(a) forms and amendments thereto filed during any given year.
Based on review of the copies of such reports and amendments thereto
furnished to the Company and representations from the Company's directors,
executive officers and 10% Stockholders that no other reports were required to
be filed, the Company believes that for the year ended December 31, 1998, the
Company's directors, executive officers and 10% Stockholders complied with all
Section 16(a) filing requirements applicable to them.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Management Contracts
The Company provided third-party management services for certain properties
owned directly or indirectly by John Price, Chairman of the Board of Directors
and Chief Executive Officer of the Company, as follows: (i) an office building
in Salt Lake City, Utah, the owner of which paid the Company a management fee
of $115,000, $105,000 and $114,000 in 1998, 1997 and 1996, respectively
(Fairfax, a company which is wholly-owned by John Price, is a general partner
of the owner of this building); (ii) a commercial building in Salt Lake City,
Utah, the owner of which paid the Company a management fee of $1,900 and
$3,000 in 1997 and 1996, respectively (John Price is the general partner of
the owner of this building); and (iii) a commercial building in Albuquerque,
New Mexico, the owner of which paid the Company a management fee of $5,000 in
1998 (John Price is the general partner of the owner of the building).
Computer Services
The Company leases computer services from Alta Computer Services, Inc.
("Alta Computer"). Alta Computer is majority owned by John Price, Chairman of
the Board of Directors and Chief Executive Officer of the Company, Warren P.
King, a Director of the Company, and Sam W. Souvall, a Director of the
Company. The Company paid $175,000, $200,000 and $194,000 in 1998, 1997 and
1996, respectively, for such services.
Accounting and Management Services
The Company has entered into a management agreement under which it performs
certain accounting and management functions on behalf of Fairfax. Management
fees collected by the Company under this agreement totaled $72,000 for each of
the three years ended December 31, 1998.
Boise Towne Square Settlement
On March 17, 1997, a settlement agreement was entered into by the Company,
Boise Mall Development Company, Ltd. ("BDMC"), a Utah partnership which is
beneficially owned by, among others, John Price (Chairman of the Board of
Directors and Chief Executive Officer of the Company), G. Rex Frazier
(President and Chief Operating Officer and a Director of the Company), Paul K.
Mendenhall (Vice President--Chief Investment Officer and Secretary of the
Company), Martin G. Peterson (Vice President--Administration of the Company),
Greg Curtis (Vice President--Property Management of the Company), Warren P.
King (a Director of the Company), Fairfax and JPET II Company, Ltd. (a limited
partnership in which John Price is the sole general partner ("JPET")) and
which contributed Boise Towne Square to the Company, and the successor to the
10
company that owned a certain parcel adjacent to Boise Towne Square (the "Prior
Owner"), which parcel is believed to be the source of an environmental
contaminant that has been found to affect Boise Towne Square as well as
certain other adjacent parcels. The settlement agreement, which was approved
by the unanimous vote of the independent directors of the Board of Directors
of the Company, memorializes the final settlement of all claims that the
Company and BMDC have against the Prior Owner relating to the environmental
condition existing at Boise Towne Square. In connection with the settlement
agreement, BMDC, which retained all claims of an environmental nature with
respect to Boise Towne Square that it held on the date of the contribution of
such property to the Company received a cash payment totaling $4.5 million for
its prior damages. In addition, the Company received a cash payment of $1.1
million which is intended to defray, based on independent studies of the
condition, the additional costs that may be incurred by the Company in any
future expansion of Boise Towne Square as result of such environmental
condition and to reimburse the Company for certain sums escrowed at the time
of, and in connection with, its formation and the closing of the IPO. In
addition, the Company has received from the Prior Owner a broad
indemnification relating to such environmental condition as well as covenant
to complete the ongoing remediation of such environmental condition.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of the Record Date
regarding the beneficial ownership of the Company's Common Stock and Price
Group Stock with respect to (i) each person known to the Company to be the
beneficial owner of 5% or more of the Company's outstanding shares of Common
Stock and Price Group Stock; (ii) the Named Executive Officers; (iii) the
Company's directors; and (iv) all directors and executive officers of the
Company as a group.
Beneficial Ownership Table(1)
Name and Business Address Shares Beneficially Percent of
of Beneficial Owner(2) Owned Shares
- --------------------------------------------- ------------------- ----------
John Price(3)................................ 3,268,468 15.86%
Warren P. King(4)............................ 186,297 1.05
G. Rex Frazier(5)............................ 93,365 *
Sam W. Souvall(6)............................ 52,351 *
Paul K. Mendenhall(7)........................ 44,890 *
Allen P. Martindale(8)....................... 29,000 *
David R. Sabey(9)............................ 25,061 *
James A. Anderson(10)........................ 10,000 *
Albert Sussman(11)........................... 10,000 *
M. Scott Collins(12)......................... 5,000 *
All Directors and Executive Officers
of the Company as a Group (13 Persons)....... 3,798,191 18.04
Fairfax Realty, Inc.(13)
35 Century Park-Way
Salt Lake City, Utah 84115................... 2,967,313 14.40
Fairfax Holding, L.L.C.(14)
35 Century Park-Way
Salt Lake City, Utah 84115................... 2,967,313 14.40
11
Name and Business Address Shares Beneficially Percent of
of Beneficial Owner(2) Owned Shares
- --------------------------------------------- ------------------- ----------
Grantham, Mayo, Van Otterloo & Co., LLC(15)
40 Rowes Wharf
Boston, Massachusetts 02110.................. 1,935,500 10.97%
Cohen & Steers Capital Management, Inc.(16)
757 Third Avenue
New York, New York 10017..................... 1,729,400 9.80
The Equitable Companies Incorporated(17)
787 Seventh Avenue
New York, New York 10019..................... 1,400,645 7.94
- --------
* An asterisk indicates ownership of less than 1%.
(1) For purposes of this table, a person is deemed to be the beneficial owner
of shares of Common Stock if that person has the right to acquire such
shares within 60 days of the Record Date by the exercise of any stock
option or any other right to convert or exchange outstanding securities.
The Company is the sole general partner of, and owns an 83% interest in,
the Operating Partnership. Units of limited partner interests in the
Operating Partnership (the "OP Units") are exchangeable, at the option of
the holders thereof, for shares of Common Stock on a one-for-one basis
(subject to adjustment in the event of stock splits, dividends,
combinations or reclassifications). OP Units and stock options held by a
person are deemed to have been exchanged or exercised for the purpose of
computing the percentage of outstanding shares of Common Stock
beneficially owned by such person, but shall not be deemed to have been
exchanged or exercised for the purpose of computing the percentage of
outstanding shares of Common Stock beneficially owned by any other
person. The Company has the right to convert any outstanding shares of
Price Group Stock on a one-for-one basis into shares of Common Stock in
the event that the combined direct or indirect economic interest held by
the Price Group in the Operating Partnership falls below 10%. Even though
such economic interest held by the Price Group is not below the 10%
level, for purposes of this table, shares of Price Group Stock are deemed
to be converted into an equivalent number of shares of Common Stock.
Additionally, for the purposes of this table, a person or entity shall be
deemed to be a beneficial owner of shares of Common Stock if such person
or entity has or shares either investment or voting power with respect to
such shares.
(2) The business address of each officer and/or director of the Company named
herein is JP Realty, Inc., 35 Century Park-Way, Salt Lake City, Utah
84115.
(3) Includes (i) 37,201 OP Units held by Mr. Price, (ii) 2,713,313 OP Units,
54,000 shares of Common Stock and 200,000 shares of Price Group Stock
held by Fairfax Holding, L.L.C., a limited liability company in which Mr.
Price holds an approximate 85% direct and indirect interest ("Holding"),
(iii) 4,454 OP Units held by JPET, and (iv) options to purchase 214,500
shares of Common Stock. Mr. Price, through his control of Holding and
JPET, exercises sole investment and voting power over the OP Units,
shares of Common Stock and shares of Price Group Stock held by such
entities and disclaims beneficial ownership of the OP Units, shares of
Common Stock and shares of Price Group Stock held by Holding and JPET,
except to the extent of his approximate 85% interest in Holding and his
approximate 6% interest in JPET.
(4) Includes (i) 80,952 OP Units held by Mr. King, (ii) 16,008 OP Units held
by Mr. King's wife, Florence K. King, (iii) 29,337 OP Units held by W.P.
King & Co., a partnership in which Mr. King holds an approximate 8.5%
interest, and (iv) options to purchase 30,000 shares of Common Stock.
(5) Includes (i) 31,831 OP Units and (ii) options to purchase 55,515 shares
of Common Stock.
(6) Includes (i) 23,371 OP Units held by S.W. Souvall Trust and (ii) options
to purchase 10,000 shares of Common Stock. Of the shares of Common Stock
reported in the table, 2,300 shares are owned of record by S.W. Souvall
Co., a partnership in which Mr. Souvall and his wife each hold 2% general
partner interests, and 2,300 shares are owned of record by Sary
Enterprises, a partnership of which Mr. Souvall and his wife are 11% and
3% owners, respectively. Mr. Souvall disclaims beneficial ownership of
the shares of Common
12
Stock held by S.W. Souvall Co. and Sary Enterprises, except to the extent
of Mr. and Mrs. Souvall's ownership interests therein.
(7) Includes (i) 7,187 OP Units and (ii) options to purchase 37,143 shares of
Common Stock.
(8) Includes options to purchase 2,000 shares of Common Stock.
(9) Includes (i) 1,595 OP Units and (ii) options to purchase 23,100 shares of
Common Stock.
(10) Includes options to purchase 10,000 shares of Common Stock.
(11) Includes options to purchase 3,000 shares of Common Stock.
(12) Includes options to purchase 5,000 shares of Common Stock.
(13) Includes 200,000 shares of Price Group Stock, 54,000 shares of Common
Stock and 2,713,313 OP Units held by Holding. Fairfax exercises shared
investment and voting power with respect to the OP Units, shares of
Common Stock and shares of Price Group Stock held by Holding and
disclaims beneficial ownership of such OP Units, shares of Common Stock
and shares of Price Group Stock, except to the extent of its approximate
44% interest in Holding. All securities beneficially owned by Fairfax
and Holding are additionally identified as being beneficially owned by
Mr. Price.
(14) Includes 200,000 shares of Price Group Stock and 2,713,313 OP Units. All
securities beneficially owned by Holding are additionally identified as
being beneficially owned by Mr. Price and Fairfax.
(15) On its Schedule 13G filed with the Commission on February 12, 1999,
Grantham, Mayo, Van Otterloo & Co., LLC reported sole voting power and
sole dispositive power with respect to 1,935,500 shares of Common Stock
beneficially owned by them.
(16) On its Schedule 13G filed with the Commission February 11, 1999, Cohen &
Steers Capital Management, Inc. reported sole voting power with respect
to 1,425,100 shares of Common Stock beneficially owned by them and sole
dispositive power with respect to 1,729,400 shares of Common Stock
beneficially owned by them.
(17) On its Schedule 13G/A filed with the Commission February 16, 1999, The
Equitable Companies Incorporated, AXA Conseil Vie Assurance Mutuelle,
AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, AXA
Courtage Assurance Mutuelle and AXA reported sole voting power with
respect to 240,874 shares of Common Stock beneficially owned by them,
shared voting power with respect to 1,147,114 shares of Common Stock
beneficially owned by them, sole dispositive power with respect to
1,397,531 shares of Common Stock beneficially owned by them and shared
dispositive power with respect to 3,114 shares of Common Stock
beneficially owned by them.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented at
the Annual Meeting. If any other business is properly brought before the
Annual Meeting, it is intended that Proxies in the enclosed form will be voted
in respect thereof in accordance with the judgments of the persons voting the
Proxies.
MISCELLANEOUS
The cost of soliciting Proxies will be borne by the Company. This
solicitation is being made by mail, but may also be made by officers,
directors and regular employees of the Company by telephone, telegraph,
facsimile transmission, mail or personal interview. No additional compensation
will be given to officers, directors or employees for such solicitation. The
Company will request brokers and nominees who hold Common Stock in their names
to furnish proxy material to beneficial owners of the shares and will
reimburse such brokers and nominees for their reasonable expenses incurred in
forwarding solicitation material to such beneficial owners.
13
STOCKHOLDERS' PROPOSALS
Any stockholder who intends to submit a proposal at the 2000 Annual Meeting
of Stockholders and who wishes to have the proposal considered for inclusion in
the proxy statement and proxy card must, in addition to complying with the
applicable laws and regulations governing submissions of such proposals,
deliver the proposal to the Company no later than December 4, 1999. Such
proposals should be sent to Paul K. Mendenhall, Secretary, at JP Realty, Inc.,
35 Century Park-Way, Salt Lake City, Utah 84115.
Any stockholder who intends to submit a proposal at the 2000 Annual Meeting
of Stockholders without including the proposal in the proxy statement for such
Annual Meeting must notify the Company of such proposal by February 28, 2000.
If a stockholder fails to give notice by this date, then the persons named as
proxies in the Proxies solicited by the Board of Directors for the 2000 Annual
Meeting of Stockholders may exercise discretionary voting power with respect to
any such proposal.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION AND THE NEW YORK STOCK EXCHANGE), WHICH CONTAINS
ADDITIONAL INFORMATION ABOUT THE COMPANY, IS AVAILABLE WITHOUT CHARGE TO ANY
STOCKHOLDER. REQUESTS SHOULD BE DIRECTED TO PAUL K. MENDENHALL, SECRETARY, AT
JP REALTY, INC., 35 CENTURY PARK-WAY, SALT LAKE CITY, UTAH 84115.
By Order of the Board of Directors,
/s/ Paul K. Mendenhall
Paul K. Mendenhall
Secretary
Salt Lake City, Utah
April 2, 1999
14
FOLD AND DETACH HERE
JP REALTY, INC. PROXY
PROXY FOR 1999 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of JP Realty, Inc., a Maryland corporation,
acting under the laws of the State of Maryland, hereby constitutes and
appoints John Price and G. Rex Frazier, and each of them, the attorneys and
proxies of the undersigned, each with the power of substitution, to attend and
act for the undersigned at the 1999 Annual Meeting of Stockholders of said
corporation to be held on May 5, 1999 at 10:00 a.m., MDT, at the Chamber of
Commerce Building, Chamber of Commerce Briefing Center Room, sixth floor, 175
East 400 South, Salt Lake City, Utah 84111, and at any adjournments thereof,
and in connection therewith to vote all of the shares of said stock of said
corporation which the undersigned would be entitled to vote, as follows on the
reverse side of this proxy.
Said attorneys and proxies, and each of them, shall have all the powers
which the undersigned would have if acting in person. The undersigned hereby
revokes any other proxy to vote at such meeting and hereby ratifies and
confirms all that said attorneys and proxies and each of them, may lawfully do
by virtue hereof. Said proxies, without hereby limiting their general
authority, are specifically authorized to vote in accordance with their best
judgment with respect to all matters incident to the conduct of the meeting,
all matters presented at the meeting but which are not known to the Board of
Directors at the time of the solicitation of this proxy and, with respect to
the election of any person as a Director, if a bona fide nominee for the
office is named in the Proxy Statement and such nominee is unable to serve or
will not serve, to vote for any other person.
(Continued, and to be signed on the other side)
Please mark [X]
your vote
as indicated
in the example
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF JP REALTY, INC.
FOR
ALL
NOMINEES
1. ELECTION OF DIRECTORS LISTED WITHHOLD
(EXCEPT AS AUTHORITY
LISTED TO FOR ALL
RIGHT) NOMINEES
[_] [_]
Nominees: John Price, G. Rex Frazier, Warren P. King, James A. Anderson and
Sam W. Souvall
(INSTRUCTION TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THE NAME(S) OF SUCH NOMINEE(S) BELOW)
- -------------------------------------------------------------------------------
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FOR AGAINST ABSTAIN
2. PROPOSAL TO RATIFY THE APPOINTMENT [_] [_] [_]
OF PRICE WATERHOUSE AS INDEPENDENT
AUDITORS OF THE CORPORATION
Each of the above-named proxies present at said meeting either in person or by
substitute, shall have and exercise all the powers of said proxies hereunder.
This proxy shall be voted in accordance with the choices specified by the
undersigned on this proxy. IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED
HEREON THIS PROXY WILL BE TREATED AS A GRANT OF AUTHORITY TO VOTE FOR THE
ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS NAMED ABOVE AND AS A GRANT
OF AUTHORITY TO VOTE FOR THE PROPOSALS STATED ABOVE AND ON ANY OTHER MATTER TO
BE VOTED UPON.
The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement relating to the 1998 Annual Meeting of Stockholders.
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE POSTAGE PREPAID
ENVELOPE PROVIDED.
Signature(s) ___________________________________________ Date: _________________
IMPORTANT: In signing this proxy, please sign your name or names on the
signature line in the same manner as it appears on your stock certificate.
When signing as an attorney, executor, administrator, trustee or guardian,
please give your full title as such. EACH JOINT TENANT SHOULD SIGN.
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FOLD AND DETACH HERE