SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transaction period from _______ to _______
Commission file number 1-12566
_______________________
G & L REALTY CORP.
(Exact name of Registrant as specified in its charter)
Maryland 95-4449388
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
439 N. Bedford Drive
Beverly Hills, California 90210
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (310) 273-9930
_______________________
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
--------------------- ---------------------
Common Stock, $.01 par value New York Stock Exchange
Series A Preferred Stock, $.01 par value New York Stock Exchange
Series B Preferred Stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
This Annual Report on Form 10-K/A is being filed by G & L Realty Corp. (the
"Company") to amend Part III, Items 10 through 13 of the Company's Annual Report
on Form 10-K filed on April 9, 1999.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to the
directors, based on information furnished to the Company by each such director.
Director
Name Age Position Since
---- --- -------- -------
Daniel M. Gottlieb 58 Chief Executive Officer, Co-Chairman of the 1993
Board and Director
Steven D. Lebowitz 58 President, Co-Chairman of the Board and 1993
Director
Richard L. Lesher 65 Director 1993
Leslie D. Michelson 48 Director 1995
Reese L. Milner 50 Director 1993
Charles P. Reilly 56 Director 1993
S. Craig Tompkins 48 Director 1993
The following is a biographical summary of the experience of the directors
of the Company.
Mr. Gottlieb is the Chief Executive Officer and Co-Chairman of the Board of
the Company and has held these positions since the Company commenced operations
in 1993. Mr. Gottlieb co-founded G&L Development ("G&L Development") in 1976 and
has been a general partner of G&L Development and active in commercial real
estate management and development since that time. Mr. Gottlieb received his
B.A. with honors from the University of Southern California and earned a J.D.
from Boalt Hall School of Law at the University of California at Berkeley. Prior
to forming G&L Development, Mr. Gottlieb first served as a Los Angeles County
Deputy District Attorney for Beverly Hills and later entered private practice
specializing in real estate law and business management. Mr. Gottlieb has also
served on the Board of Directors of the United States Chamber of Commerce,
Washington, D.C. since February 1996.
Mr. Lebowitz is the President and Co-Chairman of the Board of the Company
and has held these positions since the Company commenced operations in 1993. Mr.
Lebowitz is the co-founder and a general partner of G&L Development and has been
active in the development, management and ownership of a wide range of real
estate properties since 1968. Mr. Lebowitz received a B.S. in Accounting from
the University of Southern California, where he also received his MBA with
highest honors in 1965. From 1962 to 1964, Mr. Lebowitz worked for Deloitte &
Touche LLP and was licensed as a Certified Public Accountant in 1964. From 1965
to 1968, Mr. Lebowitz worked with the U.S. Department of Commerce and the
Brookings Institution in Washington D.C. Mr. Lebowitz served on the Board of
Directors of the United States Chamber of Commerce, Washington, D.C. from 1989
to 1994.
Dr. Lesher has served as a director of the Company since the Company
commenced operations in 1993. Dr. Lesher is the immediate past President and
has been a member of the Board of Directors of the United States Chamber of
Commerce, Washington D.C. since 1975. He served on numerous committees of the
Board, including the Executive and Budget committees. In addition, Dr. Lesher is
a member of the Board of Directors of World Heart Corporation (Ottawa, Canada),
an artificial heart research and development company and AIT Corporation, a
high-tech company. Dr. Lesher received a B.B.A. from the University of
Pittsburgh in 1958, an M.S. from Pennsylvania State University in 1960 and a
D.B.A. from Indiana University in 1963.
Mr. Michelson has served as a director of the Company since 1995. Mr.
Michelson has been active in the creation and management of a number of health
care companies. He co-founded Protocare, a clinical trials and disease
management company, and currently serves as its Chairman and Co-CEO. Prior to
forming Protocare, Mr. Michelson was a founder, Chairman and co-Chief Executive
Officer of Value Health Sciences, Inc. Mr. Michelson is also a director of
Catellus Development Corporation, an NYSE traded real estate developer, and
serves as Chairman of the Compensation Committee. He served as Special
Assistant to the General Counsel of the U.S. Department of Health and Human
Services from 1979 to 1981. He received a B.A. from The Johns Hopkins
University and a J.D. from Yale Law School.
Mr. Milner has served as a director of the Company since the Company
commenced operations in 1993. Mr. Milner is a private real estate developer and
investor. Mr. Milner received a B.A. from the University of California at
Berkeley and a joint J.D./MBA from Stanford University. Mr. Milner practiced
law from 1975 through 1979 before entering the real estate industry in 1980.
Mr. Reilly has served as a director of the Company since the Company
commenced operations in 1993. Mr. Reilly is the managing general partner of
Shamrock Investments, an investment and merchant banking firm that specializes
in the health care industry. Prior to forming Shamrock Investments in 1987, Mr.
Reilly served as Senior Executive Vice President and Chief Development Officer
for American Medical International, Inc. In this position, Mr. Reilly was
responsible for growth through the acquisition and development of new health
care facilities and related business in the United States and abroad. Mr. Reilly
was a member of American Medical International's Board of Directors and served
on its Finance, Management, and Executive Committees. Mr. Reilly is currently
the Chairman of the Board of Directors of PHP Healthcare Corporation ("PHP"), a
New York Stock Exchange Company, which is an owner/operator of primary care
clinics for sponsored beneficiary populations. In November 1998, PHP filed a
petition under Chapter 7 of the U.S. Bankruptcy Code. He also serves as
Chairman of the Board of Directors of Dynamic Health, Inc., an owner/operator of
acute care hospitals; and is the former Chairman of the Board of Directors of
Paragon Ambulatory Surgery Centers, Inc., an owner/operator of freestanding
ambulatory surgery centers. Mr. Reilly holds a law degree from the University of
Pennsylvania and a bachelor's degree in accounting and finance from Pennsylvania
State University. He has served as a director, trustee, and governing council
member of the Federation of American Healthcare Systems, the National Committee
for Quality Health Care and the American Hospital Association and is a past
President of the Beverly Hills Chamber of Commerce.
Mr. Tompkins has served as a director of the Company since the Company
commenced operations in 1993. Mr. Tompkins is the President and a director of
The Craig Corporation, a New York Stock Exchange company engaged in the
ownership and strategic management of its controlling interests in other
operating companies, including a 78% voting interest in Reading Entertainment,
Inc. ("Reading Entertainment") and a 40% interest in Citadel Holding
Corporation. Reading Entertainment, whose shares are quoted on the NASDAQ/NMS,
is principally in the beyond-the-home entertainment business, developing and
operating multiplex cinemas and entertainment centers in the United States,
Puerto Rico and Australia. Citadel Holding Corporation, is an American Stock
Exchange company, whose assets consist primarily of office buildings in
California and Arizona, certain agricultural property in Kern County,
California, and a preferred stock interest in Reading Entertainment. Mr.
Tompkins also serves on the Boards of Directors of Reading Entertainment (where
he is Vice-Chairman) and Citadel Holding Corporation (where he is also Vice-
Chairman). Mr. Tompkins has served, since the third quarter of 1994, as the
Secretary, Treasurer and Principal Accounting Officer of Citadel Holding
Corporation and since 1997 as the President of Citadel's agricultural
subsidiary; Citadel Agricultural, Inc. Beginning in 1984 and prior to joining
Craig and Reading Entertainment in March 1993, Mr. Tompkins was a partner
specializing in corporate and real estate law in the law firm of Gibson, Dunn &
Crutcher LLP. Mr. Tompkins holds a bachelor's degree from Claremont McKenna
College and a J.D. from Harvard Law School.
The following table sets forth the names, ages and positions of each of the
Company's executive officers. Subject to rights pursuant to any employment
agreements, officers of the Company serve at the pleasure of the Board of
Directors.
Officer
Name Age Position Since
- -------------------------------- --------------- ------------------------------------------------------ --------------
Daniel M. Gottlieb 58 Chief Executive Officer and Co-Chairman of the Board 1993
Steven D. Lebowitz 58 President and Co-Chairman of the Board 1993
Joseph D. Carroll 43 Senior Vice President 1997
John H. Rauch 68 Senior Vice President, Operations 1996
George Nagler 62 Vice President, General Counsel and Secretary 1998
David Hamer 25 Chief Accounting Officer 1998
The following is a biographical summary of the experience of the executive
officers of the Company. For the biographical summary of the experience of
Messrs. Gottlieb and Lebowitz, see the biographical summary of the experience of
the directors of the Company.
Mr. Carroll has been a Senior Vice President of the Company since 1997.
Mr. Carroll is responsible for the acquisition of health care properties for the
Company. From 1987 to 1997 he was President of Traid Partners, Inc.; a Costa
Mesa-based company that develops shopping centers, with responsibilities that
included the acquisition of property for development, the arrangement of debt
and equity capital, property management, and disposition of completed centers.
From 1994 to 1995, Mr. Carroll served as Senior Vice President of Caesar's
World, Inc. where he directed resort and gaming expansion in the United States
and South America. Mr. Carroll received his bachelor's degree in business
administration from the University of Southern California in 1981.
Mr. Rauch has been Senior Vice President, Operations for the Company since
1996. Mr. Rauch is responsible for the asset management of all of the Company's
medical office buildings. From 1975 to 1996 he was founder and President of
Camden Consultants, Inc., an economic consulting firm providing clients with
real estate and corporate planning information. Mr. Rauch was President of
Beverly Hills Bancorp from 1968 to 1975. Mr. Rauch received his law degree from
the University of Southern California with honors in 1961 and his bachelor's
degree in economics from the University of California, Los Angeles in 1954.
Mr. Nagler has been Vice President and General Counsel for the Company
since 1998. Mr. Nagler has been in the private practice of law for over 28
years with an emphasis on real estate, business planning, corporate and general
business matters. Mr. Nagler received his law degree from Harvard Law School
Cum Laude and a Bachelor of Commerce from the University of British Columbia
with first class honors. He is currently a member of the Beverly Hills, Los
Angeles County and California Bar Associations. He is past chairman of the Tax
Subcommittee of the Real Estate Section of the Los Angeles County Bar
Association and has lectured frequently on various real estate topics to
attorneys, accountants and real estate professionals.
Mr. Hamer has been Controller and Chief Accounting Officer of the Company
since 1998. Mr. Hamer worked for Deloitte & Touche LLP from 1995 to 1998;
specializing in real estate. He graduated from the University of California,
Los Angeles in 1995 with a Bachelor of Arts degree in political science and a
specialization in business administration. Mr. Hamer is a registered Certified
Public Accountant.
Section 16(a) Beneficial Ownership Reporting Compliance. Based solely upon
a review of Securities and Exchange Commission Forms 3, 4 and 5 furnished to the
Company and certain written representations, the Company believes that all
reports required by Section 16(a) of the Securities and Exchange Act of 1934
with respect to the Company's fiscal year ended December 31, 1998 have been
filed by its officers and directors.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information with respect to the
chief executive officer of the Company and the four other most highly
compensated executive officers of the Company whose cash compensation exceeded
$100,000 during the fiscal year ended December 31, 1998 (collectively, the
"Named Executive Officers"). The Company did not grant any restricted stock
awards or stock appreciation rights or make any long-term incentive plan payouts
during such period.
Long Term
Compensation
Awards
Annual Compensation Securities
Fiscal Year ---------------------------------------------- Underlying
Ended Other Annual Options/
Name and Principal Position December 31 Salary($) Bonus($) Compensation($) SARS(#)
- --------------------------- ----------- --------- -------- --------------- -------------
Daniel M. Gottlieb............. 1998 $255,000 --- --- ---
Chief Executive Officer, 1997 230,000 $ 25,000 $725,500(1) ---
Co-Chairman of the Board 1996 181,100 15,000 275,000(2) ---
and Director
Steven D. Lebowitz............. 1998 $255,000 --- --- ---
President, Co-Chairman 1997 230,000 $ 25,000 $725,200(1) ---
of the Board and Director 1996 181,100 15,000 225,000(2) ---
Joseph Carroll................. 1998 $120,000 $191,227 --- ---
Senior Vice President 1997 75,000(3) 120,000 --- 40,000
1996 --- --- --- ---
John Rauch..................... 1998 $108,864 $ 10,000 --- ---
Senior Vice President 1997 103,680 10,000 --- ---
1996 24,000(3) 5,000 --- 12,000
George Nagler.................. 1998 $100,000(3) $ 25,000 --- 20,000
Vice President, General 1997 --- --- --- ---
Counsel and Secretary 1996 --- --- --- ---
- ----------------------------------------------------------------------------------------------------------------------
______________________
(1) On December 18, 1997, Messrs. Gottlieb and Lebowitz exercised options
acquiring 67,000 shares of Common Stock each. The Company received cash of
approximately $645,000 from each of Messrs. Gottlieb and Lebowitz as a
result of these option exercises. Other compensation includes taxable
income to Messrs. Gottlieb and Lebowitz in the amount of $708,000 each
based upon the difference between the exercise price of $9.625 per share
and the closing price of $20.1875 per share on December 18, 1997. During
1997, the Company also paid $17,500 and $17,200 for life insurance premiums
for the benefit of Messrs. Gottlieb and Lebowitz, respectively.
(2) Such amounts were paid to Messrs. Gottlieb and Lebowitz partially to defray
tax liabilities imposed on them as a result of the transfer by the Company
of the property at 436 North Bedford Drive, Beverly Hills, California
(which was contributed by Messrs. Gottlieb and Lebowitz to the Company in
exchange for Units in 1993) to the lender in satisfaction of the loan on
the property.
(3) Messrs. Carroll, Rauch and Nagler joined the Company in May 1997, October
1996 and March 1998, respectively. On an annualized basis, Messrs.
Carroll, Rauch and Nagler would have earned base salaries of $120,000 in
1997, $96,000 in 1996 , and $120,000 in 1998, respectively.
Employment Agreements and Arrangements
In December 1993, each of Daniel M. Gottlieb and Steven D. Lebowitz entered
into separate but identical employment agreements with the Company and the
Operating Partnership for a term of three years. The agreements provide for
automatic renewal for succeeding terms of one year unless the Company or Messrs.
Gottlieb or Lebowitz give notice at least three months prior to expiration of
any term. The employment agreements provide for automatic annual increases in
base compensation equal to 5% per annum; however, the Compensation Committee of
the Board of Directors may review the annual base compensation every twelve
months in light of various factors, and following each such review, the annual
base compensation may be increased above the 5% automatic increase.
In addition, each of Messrs. Gottlieb and Lebowitz are entitled to receive
an annual bonus as determined by the Compensation Committee in an amount not to
exceed a maximum of 100% of annual base compensation. Furthermore, each
agreement provides that Messrs. Gottlieb and Lebowitz are entitled: (i) to
participate in all medical, dental, life insurance, retirement, profit sharing,
stock incentive, disability and bonus plans of the Company which may be made
available to executives of the Company (only medical plans presently exist) and
(ii) to severance payments, under certain circumstances, equal to two times
their then-current annual compensation.
The agreements require Messrs. Gottlieb and Lebowitz to devote
substantially all of their working time and best efforts to performance of their
duties for the Company and, during the term of their employment, prohibits them,
with certain exceptions, from directly or indirectly owning or operating or
otherwise investing or participating in any other business that is in
competition with the business of the Company without the prior approval of a
majority of the independent members of the Board of Directors of the Company.
Option Grants for 1998
The following table sets forth information with respect to options granted
to the Named Executive Officers during the fiscal year ended December 31, 1998
pursuant to the Company's 1993 Stock Incentive Plan, as amended. No options
were granted to Messrs. Gottlieb, Lebowitz, Carroll and Rauch during 1998.
% of Total
Number of Options Granted
Name and Principal Options Granted to Employees in Exercise Price Expiration Grant Date
Position (#) (1) Fiscal Year ($/Share) Date Value ($) (2)
__________________________ ________________ _________________ _________________ ______________ _________________
George Nagler............. 20,000 45.5% $17.375 4/15/08 $33,300
Vice President, General
Counsel and Secretary
(1) All of the options granted vest between the years 1999 and 2003.
(2) Calculated using the Binary option pricing model. The following variables
were used in this model: risk-free interest rate of 5.01%, 12.1% dividend
yield, expected life of three years and expected volatility of 24.0%.
Aggregated Option Exercises in 1998 and Options Values at December 31, 1998
The following table sets forth information with respect to options
exercised and the value of unexercised options held by the Named Executive
Officers as of the end of the fiscal year ended December 31, 1998. All options
were granted pursuant to the Company's 1993 Stock Incentive Plan, as amended.
Number of Securities Value of
Underlying Unexercised In-The-Money
Number of Options at Options at
Shares Fiscal Year End (#) Fiscal Year End ($) (1)
Name and Principal Acquired on Value --------------------------- ---------------------------
Position Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------- ------------ ------------ ----------- ------------- ----------- -------------
Daniel M. Gottlieb........ --- --- 33,500 --- $108,875 ---
Chief Executive Officer
and Co-Chairman of the
Board
Steven D. Lebowitz........ --- --- 33,500 --- $108,875 ---
President and Co-Chairman
of the Board
Joseph Carroll............ --- --- 13,333 26,667(2) --- ---
Senior Vice President
John Rauch................ --- --- 11,000 4,000(3) $9,750 ---
Senior Vice President
George Nagler............. --- --- --- 20,000(4) --- ---
Vice President, General
Counsel and Secretary
__________________________
(1) This amount represents solely the difference between the market value at
December 31, 1998 ($12.875) of those unexercised options which had an
exercise price below such market price (i.e., "in-the-money options") and
the respective exercise prices of the options. No assumptions or
representations regarding the "value" of such options are made or intended.
(2) The stock options are exercisable as follows: 20,000 shares of Common Stock
at $16.75 per share, 1/3 on May 28, 1998, 1/3 on May 28, 1999, and 1/3 on
May 28, 2000; and 20,000 shares of Common Stock at $20.125 per share, 1/3
on December 19, 1998, 1/3 on December 19, 1999, and 1/3 on December 19,
2000.
(3) The stock options are exercisable as follows: 4,000 shares of Common Stock
that will vest on May 7, 1999 at $13.625 per share.
(4) The stock options are exercisable as follows: 20,000 shares of Common Stock
at $17.375 per share, 1/3 on April 15, 1999, 1/3 on April 15, 2000 and 1/3
on April 15, 2001.
Compensation of Directors
The Company pays an annual fee of $12,000 plus a fee of $1,000 for
attending regular meetings and $500 for attending committee meetings to its
directors who are not employees of the Company. Employees of the Company who
are also directors are not paid any director fees. Messrs. Gottlieb and
Lebowitz are the only directors who are also employees of the Company. The
reasonable expenses incurred by each director in connection with the performance
of the director's duties are also reimbursed by the Company. In addition,
pursuant to the 1993 Stock Incentive Plan, each nonemployee director is
automatically granted an option to purchase 500 shares of Common Stock each year
on the first business day after the date of the Annual Meeting and each person
who becomes a nonemployee director is granted an option to purchase 3,000 shares
of Common Stock upon joining the Board of Directors. The exercise price of
these option grants is equal to 100% of the fair market value of the Common
Stock at the date of grant.
On June 5, 1998, Messrs. Lesher, Michelson, Milner, Reilly and Tompkins
were each granted an option to purchase 500 shares of Common Stock at a price of
$17.50 per share. These options became fully exercisable on December 5, 1998.
The options generally expire on the earlier of the first anniversary of the date
upon which the director shall cease to be a director as a result of death or
total disability, the 90th day after the date upon which the director shall
cease to be a director for any other reason or ten years after the date of
grant.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 12, 1999 regarding
the beneficial ownership of Equity Stock and Operating Partnership Units
("Units") by (i) each person or company known by the Company to be the
beneficial owner of more than 5% of the Company's outstanding shares of Common
Stock, (ii) each director of the Company, (iii) each of the Named Executive
Officers of the Company and (iv) the directors and executive officers of the
Company as a group. As of April 12, 1999 the Company had 3,952,900 shares of
Common Stock outstanding. In addition there were 633,027 Units outstanding which
were not owned by the Company.
Each person named in the table has sole voting and investment power with
respect to all shares shown as beneficially owned by such person except as
provided under applicable state marital property laws or as set forth in the
notes following the table.
Number of Percentage of Percentage Number of
Shares of Shares of Interest In Percentage Shares of
Name and address Common Common Stock Number of Operating Ownership in Preferred
of Beneficial Owner Stock(1) Outstanding(2) Units(3) Partnership(4) Company(5) Stock
- ---------------------------------- ------------ ---------------- ------------ -------------- --------------- ----------
Joseph Carroll.................... 21,000 * -- -- * 1,000 (10)
439 N. Bedford Drive
Beverly Hills, CA 90210
Daniel M. Gottlieb(6)............. 411,332 10.0% 303,098 6.6% 15.1% --
439 N. Bedford Drive
Beverly Hills, CA 90210
Steven D. Lebowitz(7)............. 336,128 8.2 269,315 5.9 12.8 --
439 N. Bedford Drive
Beverly Hills, CA 90210
Richard Lesher.................... 9,000 * -- * * --
1126 Cider Press Road
Chambersburg, PA 17201
Leslie D. Michelson............... 4,500 * -- * * --
2400 Broadway, Suite 100
Santa Monica, CA 90404
Reese L. Milner................... 5,000 * 47,486(8) 1.0 1.1 --
439 N. Bedford Drive
Beverly Hills, CA 90210
George Nagler..................... 6,666 * -- -- * --
439 N. Bedford Drive
Beverly Hills, CA 90210
John H. Rauch..................... 15,000 * -- -- * --
439 N. Bedford Drive
Beverly Hills, CA 90210
Charles P. Reilly................. 5,000 * -- -- * --
2049 Century Park East
Suite 3330
Los Angeles, CA 90067
S. Craig Tompkins (9)............. 10,500 * -- -- * --
550 South Hope Street
Suite 1825
Los Angeles, CA 90071
Directors and Executive Officers.. 826,792 20.1% 619,899 13.5% 30.5% 1,000
as a group (11 persons)
* Less than 1%
See numbered footnotes on the following page.
(1) The number of shares beneficially owned includes shares that the following
individuals have the right to acquire within 60 days of April 12, 1999 upon
exercise of stock options, but not shares that such individuals have the
right to acquire upon exchange of Units, in the following amounts: (a)
33,500 shares as to Messrs. Gottlieb and Lebowitz, (b) 20,000 shares as to
Mr. Carroll (c) 2,666 as to Mr. Hamer, (d) 500 shares as to Dr. Lesher, (e)
6,666 shares as to Mr. Nagler, (f) 15,000 shares as to Mr. Rauch, (g) 5,000
shares as to each of Messrs. Milner, Reilly and Tompkins and (h) 4,500
shares as to Mr. Michelson.
(2) For the purposes of determining the percentage of outstanding Common Stock
held by each person or group set forth in the table, the number of shares
indicated as beneficially owned by such person or group is divided by the
sum of the number of outstanding shares of Common Stock as of April 12,
1999 plus the number of shares of Common Stock subject to options
exercisable currently or within 60 days of April 12, 1999 by such person or
group, in accordance with Rule 13d-3(d)(1) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Assumes that none of the
outstanding Units are redeemed for or converted into shares of Common
Stock.
(3) Units in the Operating Partnership (other than those held by the Company)
are redeemable at the option of the holder for shares of Common Stock or
cash, at the election of the Company, at the date one year from the date of
issuance. All Units are currently redeemable. The initial redeemable
ratio is one Unit for one share of Common Stock.
(4) Based on a total of 4,585,927 Units outstanding, including the 3,952,900
Units held by the Company as of April 12, 1999.
(5) Assumes that all Units held by the person or group and all options
exercisable within 60 days of April 12, 1999 held by the person or group
are redeemed or exercised for shares of Commons Stock and that none of the
Units held by other persons are redeemed for or converted into Shares of
Common Stock, notwithstanding the percentage limitations under the
Company's Charter that limit the number of shares that may be acquired by
such person.
(6) Mr. Gottlieb has pledged 110,000 shares of Common Stock and 239,219 Units
to Mr. Milner, members of the Milner family and related entities to secure
certain indebtedness. In addition his remaining 267,832 shares of Common
Stock and 63,879 Units have been pledged to various financial institutions
to secure other indebtedness.
(7) Mr. Lebowitz has pledged 105,000 shares of Common Stock and 159,480 Units
to Mr. Milner, members of the Milner family and related entities to secure
certain indebtedness. In addition his remaining 195,168 shares of Common
Stock and 109,835 Units have been pledged to various financial institutions
to secure other indebtedness. Also includes 2,460 shares of Common Stock
held in trust for the benefit of Mr. Lebowitz's children.
(8) Includes 13,128 Units held by Milner Investment Corporation, which is
controlled by Mr. Milner. Does not include 13,128 shares held by Mr.
Milner's sister, as to which Mr. Milner disclaims beneficial ownership.
(9) Includes 1,400 shares of Common Stock held in trust for the benefit of Mr.
Tompkins' child's trust account, as to which Mr. Tompkins disclaims
beneficial ownership.
(10) Mr. Carroll purchased 1,000 shares of the Company's Series A Preferred
Stock on December 15, 1998. This amount represented 0.07% of the Company's
outstanding Series A Preferred Stock as of April 12, 1999.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has adopted a policy pursuant to which material transactions
between the Company and its executive officers, directors and principal
Stockholders (i.e., Stockholders owning beneficially 5% or more of the
outstanding voting securities of the Company) are submitted to the Board of
Directors for approval by a disinterested majority of the directors voting with
respect to the transaction. For this purpose, a transaction is deemed material
if such transaction, alone or together with a series of similar transactions
during the same fiscal year, involves an amount which exceeds $60,000.
In December 31, 1998, the Company acquired an office and retail complex
located in Coronado, California from a limited liability company (the "LLC")
owned by Messrs. Gottlieb and Lebowitz, each of whom is both a director and an
officer of the Company. Messrs. Gottlieb and Lebowitz held interests in the LLC
of 30% and 70%, respectively. The property was acquired for an aggregate
purchase price of $9.5 million. The Company assumed $7.5 million in long-term
debt and issued 134,499 Units valued at $2.0 million. The Units were issued at
an effective price of $14.87 per Unit, a 15.5% premium over the $12.875 closing
price of the Company's Common Stock on December 31, 1998. In connection with
the purchase of the property, G&L Coronado Managers Corp., an entity owned 30%
and 70% by Messrs. Gottlieb and Lebowitz, respectively, signed a lease with the
Company for the entire third floor of the building. Under the terms of the
lease, G&L Coronado Managers Corp. will lease the executive suites located on
the third floor of the building on behalf of the Company for rental payments
equal to $19,000 per month. The lease expires on November 30, 2010.
During 1998, a subsidiary of PHP Healthcare, Inc. ("PHP") occupied 100% of
six medical office buildings in New Jersey owned by the Company, which accounted
for approximately 10.8% of the Company's total rental revenues. The Company
also purchased $2.8 million of PHP bonds for approximately $1.3 million during
1998. In late November 1998, both PHP and its subsidiary filed for bankruptcy.
As a result, the Company has increased its reserves for delinquent rents and
established a reserve against the bonds. Mr. Reilly, one of the Company's
directors, is the Chairman of the Board of Directors of PHP.
On April 15, 1999, the Company borrowed $2.0 million from Reese L. Milner,
a director of the Company. The loan bears interest at 12% per annum and is due
on May 13, 1999. The Company also paid a loan fee of $20,000 to Mr. Milner.
The loan is secured by a first trust deed against a parcel of real property
owned by the Company.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
G & L REALTY CORP.
Date: April 30, 1999 By: /s/ David Hamer
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David Hamer
Chief Accounting Officer