SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the
Securities and Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for use of the Commission only
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MISSION WEST PROPERTIES, INC.
(Name of Registrant as Specified in its Charter)
-------------------------------------------------------
(Name of Person (s) Filing Proxy Statement, if other than Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to 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 provide 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 number, of the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
First mailed to stockholders on or about April 30, 2002.
MISSION WEST PROPERTIES, INC.
10050 Bandley Drive
Cupertino, California 95014
Dear Stockholder,
You are cordially invited to attend the 2002 Annual Meeting of Stockholders
of Mission West Properties, Inc. (the "Company") to be held at 10:00 a.m.,
Pacific Daylight Time ("PDT"), on May 23, 2002 at the Company's offices at 10050
Bandley Drive, Cupertino, California 95014.
The matters expected to be acted upon at the meeting are described in
detail in the following Notice of the 2002 Annual Meeting of Shareholders and
Proxy Statement. Also included is a Proxy Card and postage paid envelope.
Whether you plan to attend the Annual Meeting or not, it is important that
you promptly complete, sign, date and return the enclosed proxy card, or vote in
accordance with the instruction set forth on the proxy card. This will ensure
your proper representation at the Annual Meeting.
Sincerely,
Carl E. Berg
Chairman of the Board
and Chief Executive Officer
YOUR VOTE IS IMPORTANT.
PLEASE REMEMBER TO PROMPTLY RETURN YOUR PROXY
MISSION WEST PROPERTIES, INC.
NOTICE OF 2002 ANNUAL MEETING OF STOCKHOLDERS
To be held on May 23, 2002
To the Stockholders of Mission West Properties, Inc.:
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Stockholders of
Mission West Properties, Inc., a Maryland corporation (the "Company"), will be
held on May 23, 2002 at the Company's offices at 10050 Bandley Drive, Cupertino,
California 95014 at 10:00 a.m., PDT, for the following purposes:
1. To elect five members of the Board of Directors to hold office until the
next Annual Meeting of Stockholders or until their respective successors
have been elected and qualify. The nominees are Carl E. Berg, John C.
Bolger, William A. Hasler, Lawrence B. Helzel, and Raymond V. Marino.
2. To ratify the appointment of the accounting firm of PricewaterhouseCoopers
LLP as independent auditors for the Company for the year ending December
31, 2002.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 17, 2002 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting and at any adjournments thereof. A list of such
stockholders will be available for inspection at the principal office of the
Company.
All stockholders are cordially invited to attend the Annual Meeting.
However, to ensure your representation, you are requested to complete, sign,
date and return the enclosed proxy as soon as possible in accordance with the
instructions on the proxy card. A return addressed envelope is enclosed for your
convenience. Any stockholder attending the Annual Meeting may vote in person
even though the stockholder has returned a proxy previously. Your proxy is
revocable in accordance with the procedures set forth in the Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
Raymond V. Marino
-----------------------------------
Secretary
Cupertino, California
April 30, 2002
MISSION WEST PROPERTIES, INC.
10050 Bandley Drive
Cupertino, California 95014
---------------------
PROXY STATEMENT
---------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Mission West Properties, Inc., a Maryland corporation
(the "Company"), of proxies, in the accompanying form, to be used at the 2002
Annual Meeting of Stockholders to be held at 10:00 a.m., PDT, on May 23, 2002 at
10050 Bandley Drive, Cupertino, California 95014 and any postponement or
adjournments thereof (the "Meeting").
This Proxy Statement and the accompanying proxy are being mailed on or
about April 30, 2002 to all stockholders entitled to notice of and to vote at
the Meeting.
SOLICITATION AND VOTING PROCEDURES
Shares represented by valid proxies in the form enclosed, received in time
for use at the Meeting and not revoked at or before the Meeting, will be voted
at the Meeting. The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of the Company's common stock, par value
$.001 per share ("Common Stock"), is necessary to constitute a quorum at the
Meeting. Holders of Common Stock are entitled to one vote per share on all
matters. The Company will tabulate stockholder votes, and an officer of the
Company will tabulate votes cast in person at the Meeting. With respect to the
tabulation of proxies for purposes of constituting a quorum, abstentions are
treated as present, but will not be counted as votes cast at the Meeting with
respect to any proposal and will have no effect on the result of the vote.
Assuming the presence of a quorum, the affirmative vote of a plurality of
the votes cast at the Meeting and entitled to vote is required for Proposal No.
1 regarding the election of each director. An affirmative vote of the holders of
a majority of the votes cast affirmatively or negatively at the Meeting is
necessary for approval of Proposal No. 2 to ratify the appointment of
independent auditors. All proxies will be voted as specified on the proxy cards
submitted by stockholders, if the proxy is properly executed and is received by
the Company before the close of voting at the Meeting or any adjournment or
postponement thereof. If no choice has been specified, a properly executed and
timely proxy will be voted for Proposals Nos. 1 and 2, which are described in
detail elsewhere in this Proxy Statement.
The close of business on April 17, 2002 has been fixed as the record date
for determining the stockholders entitled to notice of and to vote at the
Meeting. As of that date, the Company had 17,463,329 shares of Common Stock
outstanding and entitled to vote.
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company. In
addition, the Company will reimburse brokerage firms and other persons
representing beneficial owners of Common Stock for their expenses in forwarding
proxy material to such beneficial owners. Solicitation of proxies by mail may be
supplemented by telephone, telegram, telex and other electronic means, and
personal solicitation by the directors, officers or employees of the Company. No
additional compensation will be paid to directors, officers or employees for
such solicitation.
The Company's Annual Report on Form 10-K for the year ended December 31,
2001 is being mailed to the stockholders with this Proxy Statement.
VOTING ELECTRONICALLY OR BY TELEPHONE
A number of brokerage firms and banks are participating in a program
provided through ADP Investor Communication Services that offers telephone and
Internet voting options. If your shares are held in an account at a brokerage
firm or bank participating in the ADP program, you may authorize and direct your
vote of those shares by calling the telephone number which appears on your
voting form or though the Internet in accordance with instructions set forth on
the voting form. The Authorization to vote your shares through the ADP program
must be received by midnight on May 22, 2002.
The Internet and telephone voting procedures are designed to authenticate
stockholders' identities, to allow stockholders to communicate their
authorization of a proxy to vote their shares and to confirm that their
instructions have been properly recorded. The
- 1 -
Company has been advised by its counsel that the procedures that have been put
in place are consistent with the requirements of applicable law. Stockholders
communicating voting authorization via the Internet through ADP Investor
Communication Services should understand that there may be costs associated with
electronic access, such as usage charges from Internet access providers and
telephone companies, that would be borne by the stockholder.
REVOCABILITY OF PROXIES
You can revoke your proxy at any time before the voting at the Meeting by
sending a properly signed written notice of your revocation to the Secretary of
the Company, by submitting another proxy that is properly signed and bears a
later date or by attending the Meeting and voting in person. Attendance at the
Meeting will not itself revoke an earlier submitted proxy. Requests for
additional copies of the Annual Report and Proxy Statement may be made by
calling the Company at (408) 725-0700. You should direct any written notices of
revocation, requests for additional copies of the Annual Report and Proxy
Statement, and related correspondence to: Mission West Properties, Inc., 10050
Bandley Drive, Cupertino, California 95014, Attention: Secretary.
- 2 -
MANAGEMENT
Directors and Executive Officers
The directors and executive officers of Mission West Properties, Inc. as of
March 31, 2002 are as follows:
Name Age Positions with the Company
- ---- --- --------------------------
Carl E. Berg 64 Chairman of the Board, Chief Executive Officer and Director
Raymond V. Marino 43 President, Chief Operating Officer and Director
Wayne N. Pham 32 Vice President of Finance and Controller
John C. Bolger (1) 55 Director
William A. Hasler (1) 60 Director
Lawrence B. Helzel (1) 54 Director
(1) Member of the Audit Committee, the Compensation Committee, and the
Independent Directors Committee.
The following is a biographical summary of the experience of our executive
officers and directors:
Mr. Berg has served as Chairman of the Board, Chief Executive Officer and
President of the Company since September 1997. Since 1979, Mr. Berg has been a
general partner of Berg & Berg Developers and has been a director and officer of
Berg & Berg Enterprises, Inc. since its inception. Mr. Berg is also a director
of Monolithic System Technology, Inc., Focus Enhancements, Inc., Valence
Technology, Inc., and System Integrated Research, Ltd.
Mr. Marino joined the Company in June 2001 as President and Chief Operating
Officer and was appointed by the Board of Directors to fill a newly created
board seat in July 2001. From November 1996 to August 2000, he was President,
Chief Executive Officer and a member of the board of directors of Pacific
Gateway Properties, Inc.
Mr. Pham joined the Company in March 2000 as Controller and was promoted to
Vice President of Finance in October 2000. From September 1995 to July 1999, he
was Corporate Accountant and Accounting Manager at AvalonBay Communities, Inc.,
a multi-family apartment REIT.
Mr. Bolger became a director of the Company on March 30, 1998. Mr. Bolger
is a private investor. He was Vice President of Finance and Administration of
Cisco Systems, Inc. and is currently retired. Mr. Bolger is also a director of
Integrated Device Technology, Inc., JNI Corporation, Sanmina Corporation, and
Wind River Systems, Inc.
Mr. Hasler became a director of the Company on December 4, 1998. For seven
years, Mr. Hasler was Dean of Haas School of Business, University of California,
Berkeley. In 1998, he retired as Dean Emeritus and became Co-CEO of Aphton
Corporation, a public pharmaceutical company. Mr. Hasler is also a director of
Aphton Corporation, Solectron Corporation, Walker Interactive Systems, Inc., and
DMC Stratex Networks, Inc. He is a public governor of the Pacific Stock and
Options Exchange and a trustee of the Schwab Funds.
Mr. Helzel became a director of the Company on December 4, 1998. Mr. Helzel
is a general partner of Helzel Kirshman, L.P., a private investment partnership,
a position which he has held for more than five years.
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NUMBER TERMS AND ELECTION OF DIRECTORS
The Company's Bylaws currently provide for a Board of Directors consisting
of five directors. Each director serves for a term of one year or until the next
annual meeting at which directors are elected and the director's successor is
elected and qualifies. In the election of directors, each stockholder is
entitled to one vote for each share of Common Stock held by such stockholder.
MEETINGS OF DIRECTORS
Under the Company's Articles of Amendment and Restatement, or Charter, its
Bylaws and contracts with the "Berg Group," which consists of Carl E. Berg,
Clyde J. Berg, the members of their respective immediate families, and
affiliated entities owning limited partnership interests, or O.P. Units, in
Mission West Properties, L.P., Mission West Properties, L.P. I, Mission West
Properties, L.P. II, or Mission West Properties, L.P. III (the "Operating
Partnerships"), the Berg Group has special rights with respect to meetings of
the Board of Directors. A quorum for any meeting requires the presence of Carl
E. Berg, or in the event of his death, disability or other event which results
in his ceasing to be director, the presence of someone who Mr. Berg has
designated to replace him ("Berg Designee"). With written consent from Mr. Berg
or the Berg Designee, meetings of the Board of Directors may be held without the
presence of either of them. Mr. Berg is obligated to submit a written statement
identifying the Berg Designee to the Company from time to time and may amend the
statement at his sole discretion. In addition, a majority of the Board of
Directors which includes Mr. Berg or the Berg Designee, is required for approval
of any amendment to the Charter or Bylaws and any merger, consolidation or sale
of all or substantially all of the assets of the Company or the Operating
Partnerships. These special provisions will remain in effect as long as the Berg
Group collectively owns at least 15% of the voting stock of the Company computed
on a diluted, or "Fully Diluted", basis taking into account all voting stock
issuable upon the exercise of all outstanding warrants, options, convertible
securities and other rights to acquire voting stock of the Company, and all O.P.
Units exchangeable or redeemable for Common Stock or other voting stock of the
Company without regard to any percentage ownership limit set forth in the
Charter or Bylaws, or by agreement.
COMPENSATION OF DIRECTORS
The Company pays each director who is not an officer or employee of the
Company a fee for serving as director. The annual fee is equal to $15,000 plus
$1,000 for attendance (in person or by telephone) at each meeting of the Board
of Directors, excluding committee meetings. Officers of the Company who are also
directors do not receive any directors' fees.
Each non-employee member of the Board of Directors who became or becomes a
member of the Board of Directors after November 10, 1997, the date on which the
1997 Stock Option Plan (the "Option Plan") was approved by the stockholders of
the Company, automatically receives a grant of an option to purchase 50,000
shares of Common Stock at an exercise price equal to 100% of the fair market
value of the Common Stock at the date of grant of such option upon joining the
Board of Directors. Such options become exercisable cumulatively with respect to
1/48th of the underlying shares on the first day of each month following the
date of grant. Generally, the options must be exercised while the optionee
remains a director.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The Company's Board of Directors has standing Audit and Compensation
Committees. The Audit Committee currently has three members: John C. Bolger,
William A. Hasler and Lawrence B. Helzel. The Compensation Committee currently
has the same three members.
The Board of Directors also has an Independent Directors Committee, which
is also comprised of Messrs. Bolger, Hasler and Helzel. This Committee is
responsible for reviewing and acting upon proposed transactions between the
Company and members of the Berg Group under the terms of certain agreements
between the Company and such Berg Group members. See "Certain Relationships and
Related Transactions."
During the year ended December 31, 2001, there were four meetings of the
Board of Directors, three meetings of the Audit Committee and one meeting of the
Compensation Committee. Each of the directors attended 100% of the total number
of meetings of the Board of Directors and meetings of the committees of the
Board of Directors of which he is a member.
- 4 -
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth summary information as
to compensation received by the Company's Chief Executive Officer and all other
executive officers of the Company (collectively the "named executive officers"),
for the year ended December 31, 2001.
Long-Term
Compensation
Annual Compensation Awards
---------------------------------------- ------------
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation(1) Options Compensation
- --------------------------------- ------ ---------- ------- ----------------- ------------ --------------
Carl E. Berg 2001 $100,000 $ - $22,500 - -
Chairman of the Board and Chief 2000 100,000 - 22,500 - -
Executive Officer 1999 100,000 - 15,000 - -
Raymond V. Marino (2) 2001 116,667 - - 375,000 -
President and Chief Operating 2000 - - - - -
Officer 1999 - - - - -
Wayne N. Pham 2001 94,000 - 14,100 152,000 -
Vice President and Controller 2000 94,000 - - - -
1999 - - - - -
- ------------------------------------
(1) Employer contribution to 401(k) plan.
(2) Mr. Marino became an executive officer of the Company in June 2001.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the options to purchase Common Stock granted
with respect to the fiscal year ended December 31, 2001 to the Company's named
executive officers.
Potential
Individual Grants Realizable
------------------------------------------------------------- Value at Assumed
Percent of Annual Rates of
Number of Total Options Stock Price
Shares Granted to Appreciation
Underlying Employees Exercise for Option Term (1)
Options for Fiscal Price Expiration ---------------------------
Name Granted(#)(1) Year 2001 ($/Share) Date 5%($) 10%($)
- ------------------------------------ --------------- --------------- ---------- ------------ ------------ ------------
Raymond V. Marino 375,000 (2) 100% $11.33 4/24/09 $2,028,589 $4,858,823
- ------------------------------------
(1) The options will only have value if they are exercised, and that value will
depend entirely on the share price of the Company's Common Stock on the
exercise date. Potential realizable values are based on assumed compound
annual appreciation rates specified by the SEC. These increases in value
are based on speculative assumptions for illustrative purposes only and are
not intended to forecast possible future appreciation, if any, of the
Company's stock price.
(2) A total of 375,000 options to purchase Common Stock were granted to one
employee of the Company with respect to the fiscal year ended December 31,
2001. These options become exercisable cumulatively with respect to 1/72nd
of the underlying shares on the first day of each month following the date
of grant.
- 5 -
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The following table provides information regarding the aggregate exercises
of options by each of the named executive officers. In addition, this table
includes the number of shares covered by both exercisable and unexercisable
stock options as of December 31, 2001, and the values of "in-the-money" options,
which values represent the positive spread between the exercise price of any
such options and the fiscal year-end value of the Company's Common Stock.
Number of Securities Value of the Unexercised
Underlying Unexercised In-The-Money Options at
Shares Options at December 31, 2001 December 31, 2001 (1)
Acquired on Value ------------------------------ ------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------- ------------- -------------- ------------- --------------- ------------- ---------------
Carl E. Berg.............. -- N/A N/A N/A N/A N/A
Raymond V. Marino......... -- N/A 41,667 333,333 $ 57,917 $463,333
Wayne N. Pham............. -- N/A 44,000 108,000 $116,220 $241,380
- ----------------------
(1) The value of unexercised in-the-money options at fiscal year end assumes a
fair market value for the Company's Common Stock of $12.72, the closing
market price per share of the Company's Common Stock as reported on the
American Stock Exchange on December 31, 2001, the last trading day for the
year.
- 6 -
SHARE OWNERSHIP
The following table sets forth certain information as of March 31, 2002,
concerning the ownership of Common Stock by (i) each stockholder of the Company
known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, (ii) each current member of the Board of
Directors of the Company, (iii) each executive officer and director of the
Company named in the Summary Compensation Table appearing under "Executive
Compensation" below and (iv) all current directors and executive officers of the
Company as a group.
The Company has relied on information supplied by its officers, directors
and certain shareholders and on information contained in filings with the SEC.
Percent of
All Shares of
Common Stock
Number of Percent of (Assuming
Shares All Shares Exchange of Percent of All
Beneficially of Common Number of Holder's O.P. Shares of Common
Name Owned (1) Stock O.P. Units Units)(2) Stock/O.P. Units (1)(2)
- -----------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS AND DIRECTORS:
Carl E. Berg 34,000(3) * 42,603,300(4)(13) 70.98% 41.14%
Chairman of the Board, Chief Executive
Officer and Director
Raymond V. Marino 97,838(5) * - * *
President, Chief Operating Officer and
Director
Wayne N. Pham 58,500(6) * - * *
Vice President and Controller
John C. Bolger, Director 66,222(7) * - * *
96 Southerland Drive
Atherton, CA 94027
William A. Hasler, Director 56,722(8) * - * *
c/o Aphton Corporation
1 Market Street, Spear Tower, Ste. 1850
San Francisco, CA 94105
Lawrence B. Helzel, Director 213,905(8) 1.22% - 1.22% *
c/o Helzel Kirshman, LP
5550 Redwood Road, Suite 4
Oakland, CA 94619
5% STOCKHOLDERS:
J.P. Morgan Chase & Company 1,573,224(9) 9.01% - 9.01% 1.52%
270 Park Avenue
New York, NY 10017
Neuberger Berman, LLC 1,445,225(10) 8.28% - 8.28% 1.39%
Neuberger Berman, Inc.
605 Third Avenue
New York, NY 10158
Ingalls & Snyder, LLC 969,066(11) 5.55% - 5.55% *
61 Broadway
New York, NY 10006
Clyde J. Berg - * 45,118,677(12)(13) 72.10% 43.54%
c/o Berg & Berg Developers
10050 Bandley Drive
Cupertino, CA 95014
Berg & Berg Enterprises, Inc. (13) - * 10,789,383 38.19% 10.41%
10050 Bandley Drive
Cupertino, CA 95014
All Directors and Officers as a group 527,187(14) 2.98% 42,603,300(14) 71.55% 41.53%
(6 persons)
- -------------------------------
* Less than 1%.
- 7 -
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those securities and includes
securities which such person has the right to acquire beneficial ownership
within 60 days of March 31, 2002. Unless otherwise indicated, the persons
or entities identified in this table have sole voting and investment power
with respect to all shares shown as beneficially owned by them. Common
Stock percentage ownership interest calculations are based on 17,463,329
shares outstanding as of March 31, 2002 and excluding all shares of Common
Stock issuable upon the exercise of outstanding options other than the
shares so issuable within 60 days under options held by the named person.
Common Stock/O.P. Units percentage ownership interest calculations are
based on 103,628,675 shares of Common Stock and O.P. Units exchangeable for
Common Stock as of March 31, 2002.
(2) Assumes O.P. Units are exchanged for shares of Common Stock without regard
to (i) whether such O.P. Units may be exchanged for shares of Common Stock
within 60 days of March 31, 2002, and (ii) certain ownership limit
provisions set forth in the Company's Articles of Amendment and
Restatement.
(3) Mr. Berg disclaims beneficial ownership of 40,738 shares of Common Stock
held by him as a trustee under various pension and profit sharing plans.
Such shares are not included herein.
(4) Includes O.P. Units in which Mr. Berg has a pecuniary interest because of
his status as a limited partner in the operating partnerships. Also
includes an additional 10,789,383 shares of Common Stock held by or
issuable on exchange of O.P. Units beneficially owned by Berg & Berg
Enterprises, Inc. Mr. Berg disclaims beneficial interest in any shares or
O.P. Units deemed beneficially owned by Kara Ann Berg, his daughter, Carl
Berg Child's Trust UTA dated June 2, 1978 and the 1981 Kara Ann Berg Trust.
(5) Includes 67,708 shares of Common Stock issuable on exercise of options.
Does not include 307,292 unvested shares of Common Stock issuable on
exercise of options that are not exercisable within 60 days.
(6) Includes 58,500 shares of Common Stock issuable on exercise of options.
Does not include 93,500 unvested shares of Common Stock issuable on
exercise of options that are not exercisable within 60 days.
(7) Includes 44,000 shares of Common Stock issuable on exercise of options.
Does not include 18,000 unvested shares of Common Stock issuable on
exercise of options that are not exercisable within 60 days.
(8) Includes 56,722 shares of Common Stock issuable on exercise of options.
Does not include 25,278 unvested shares of Common Stock issuable on
exercise of options that are not exercisable within 60 days.
(9) J.P. Morgan Chase & Co. is the beneficial owner on behalf of other persons.
No such person is known to have an interest in more than 5% of the Common
Stock reported. Amount based on the filing of Schedule 13G/A on February
13, 2002.
(10) Neuberger Berman, LLC & Neuberger Berman, Inc. is the beneficial owner on
behalf of other persons. No such person is known to have an interest in
more than 5% of the Common Stock reported. Amount based on the filing of
Schedule 13G/A on February 12, 2002.
(11) Ingalls & Snyder, LLC is the beneficial owner on behalf of other persons.
No such person is known to have an interest in more than 5% of the Common
Stock reported. Amount based on the filing of Schedule 13G/A on February
13, 2002.
(12) Includes O.P. Units in which Mr. Berg has a pecuniary interest because of
his status as a limited partner in the operating partnerships. Also
includes L.P. Units held by Mr. Berg as trustee of the Carl Berg Child's
Trust UTA dated June 2, 1978 and the 1981 Kara Ann Berg Trust, and an
additional 10,789,383 shares of Common Stock held by or issuable on
exchange of O.P. Units beneficially owned by Berg & Berg Enterprises, Inc.
This does not include any share deemed beneficially owned by Sonya L. Berg
and Sherri L. Berg, his daughters, as to which he disclaims beneficial
ownership.
(13) Carl E. Berg is an executive officer and director and Clyde J. Berg is a
director of Berg & Berg Enterprises, Inc. With members of their immediate
families, the Messrs. Berg beneficially owns, directly and indirectly, all
of the O.P. Units of Berg & Berg Enterprises, Inc.
(14) Current officers and directors include Carl E. Berg, Raymond V. Marino,
Wayne N. Pham, John C. Bolger, William A. Hasler, and Lawrence B. Helzel.
See Notes 3 through 8.
- 8 -
CONTRACTUAL AND OTHER CONTROL ARRANGEMENTS
SPECIAL BOARD VOTING PROVISIONS. The Charter and Bylaws provide substantial
control rights for the Berg Group. These rights include a requirement that Mr.
Berg or his designee as director approve certain fundamental corporate actions,
including amendments to the Charter and Bylaws and any merger, consolidation or
sale of all or substantially all of our assets. In addition, the Bylaws provide
that a quorum necessary to hold a valid meeting of the board of directors must
include Mr. Berg or his designee. The rights described in the two preceding
sentences apply only as long as the Berg Group members and their affiliates,
other than the Company and the Operating Partnerships, beneficially own, in the
aggregate, at least 15% of the outstanding shares of Common Stock on a Fully
Diluted basis. In addition, directors representing more than 75% of the entire
board of directors must approve other significant transactions, such as
incurring debt above certain amounts, acquiring assets and conducting business
other than through the Operating Partnerships.
BOARD OF DIRECTORS REPRESENTATION. The Berg Group members have the right to
designate two of the director nominees submitted by the Board of Directors to
stockholders for election, as long as the Berg Group members and their
affiliates, other than the Company and the Operating Partnerships, beneficially
own, in the aggregate, at least 15% of our outstanding shares of Common Stock on
a Fully Diluted basis. If the Fully Diluted ownership of the Berg Group members
and their affiliates is less than 15% but is at least 10% of the Common Stock,
the Berg Group members have the right to designate one of the director nominees
submitted by the Board of Directors to stockholders for election. Its right to
designate director nominees affords the Berg Group substantial control and
influence over the management and direction of our corporation.
SUBSTANTIAL OWNERSHIP INTEREST. The Berg Group currently owns O.P. Units
representing approximately 75.4% of the equity interests in the operating
partnerships. The O.P. Units may be converted into shares of Common Stock,
subject to limitations set forth in the Charter (including an overall 20%
ownership limitation), and other agreements with the Berg Group. Upon conversion
these shares would represent voting control of the Company. The Berg Group's
ability to exchange its O.P. Units for Common Stock permits it to exert
substantial influence over the management and direction of the Company.
LIMITED PARTNER APPROVAL RIGHTS. Mr. Berg and other limited partners of the
Operating Partnerships, including other members of the Berg Group, may restrict
the Company's operations and activities through rights provided under the terms
of the Amended and Restated Agreement of Limited Partnership which governs each
of the Operating Partnerships and the Company's legal relationship to each
Operating Partnership as its general partner. Matters requiring approval of the
holders of a majority of the O.P. Units, which necessarily would include the
Berg Group, include (i) the amendment, modification or termination of any of the
Operating Partnership Agreements; (ii) the transfer of any general partnership
interest in the Operating Partnerships, including, with certain exceptions,
transfers attendant to any merger, consolidation or liquidation of our
corporation; (iii) the admission of any additional or substitute general
partners in the Operating Partnerships; (iv) any other change of control of the
Operating Partnerships; (v) a general assignment for the benefit of creditors or
the appointment of a custodian, receiver or trustee of any of the assets of the
Operating Partnerships; and (vi) the institution of any bankruptcy proceeding
for any Operating Partnership.
In addition, as long as the Berg Group members and their affiliates,
beneficially own, in the aggregate, at least 15% of the outstanding shares of
Common Stock on a Fully Diluted basis, the consent of the limited partners
holding the right to vote a majority of the total number of O.P. Units
outstanding is also required with respect to (i) the sale or other transfer of
all or substantially all of the assets of the Operating Partnerships and certain
mergers and business combinations resulting in the complete disposition of all
O.P. Units; (ii) the issuance of limited partnership interests senior to the
O.P. Units as to distributions, assets and voting; and (iii) the liquidation of
the Operating Partnerships.
- 9 -
COMPARISON OF SHAREHOLDER RETURN ON INVESTMENT
The following line graph compares the change in the Company's cumulative
stockholder return on its shares of Common Stock to the cumulative total return
of the NAREIT Equity REIT Total Return Index ("NAREIT Equity Index") and the
Standard & Poor's 500 Stock Index ("S & P 500 Index") from December 31, 1998 to
December 31, 2001. The line graph starts December 31, 1998; however, the Company
started trading under the Berg Group ownership on December 8, 1998. The graph
assumes that the value of the investment in the Company's Common Stock was $100
at December 31, 1998 and that all dividends were reinvested. The Common Stock's
price on December 31, 1998 was $6.75. The Company obtained the information about
the NAREIT Equity Index and S & P 500 Index from each entity respectively, and
has assumed that the information is reliable, but cannot assume its accuracy.
[GRAPH OMITTED]
Mission West
Properties, Inc. S & P 500 NAREIT EQUITY INDEX
---------------- --------- -------------------
1998 $100.00 $100.00 $100.00
1999 $123.23 $119.53 $ 95.38
2000 $233.98 $ 89.86 $126.37
2001 $230.37 $ 86.96 $113.93
(1) Due to the reorganization of the Company by the Berg Group and the
effective liquidation of the Company's assets during this same period, the
Company has not included stock price performance for the years ended 1996
and 1997 in the above chart. For the year ended 1996, the Company's stock
price performance was $255.21. For the same time period, the Russell 2000
and peer group were $176.14 and $233.23, respectively. For the year ended
1997, the Company's stock price performance was $364.33. For the same time
period, the Russell 2000 and a peer group were $215.52 and $320.39,
respectively.
(2) The stock price performance shown in the graph is not necessarily
indicative of future performance of the Company's Common Stock.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate
this Proxy Statement on future filings made by the Company under those
statutes, the Audit Committee Report, the Report on Executive Compensation
and Stock Performance Graph are not deemed filed with the Securities
Exchange Commission and shall not be deemed incorporated by reference into
any such filings.
- 10 -
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Set forth below is a summary of certain material transactions since January
1, 2001 between the Company and any of its directors, executive officers or
holders of more than 5% of the Company's Common Stock, or between the Company
and persons in which directors, executive officers or such stockholders have
direct or indirect material interests.
PROPERTY ACQUISITIONS AND FINANCIAL TRANSACTIONS BETWEEN THE COMPANY AND THE
BERG GROUP
Through a series of transactions in 1997 and 1998, the Company became the
vehicle for substantially all of the Silicon Valley R&D property activities of
the Berg Group, which includes Mr. Berg, his brother Clyde J. Berg, members of
their families and a number of entities in which they have controlling or
substantial ownership interests. The Company owns these former Berg Group
properties, as well as the rest of its properties, through the Operating
Partnerships, of which the Company is the sole general partner. Through various
property acquisition agreements with the Berg Group, the Company has the right
to purchase, on pre-negotiated terms, R&D and other types of office and light
industrial properties that the Berg Group develops in the future in the states
of California, Oregon and Washington.
PENDING PROJECTS ACQUISITION AGREEMENT. In December 1998, the Company
entered into the pending projects acquisition agreement with members of the Berg
Group, under which the Company agreed to acquire, through the Operating
Partnerships, approximately 1.0 million square feet upon the completion and
leasing of identified pending development projects owned by certain members of
the Berg Group. The pending projects acquisition agreement was terminated in
December 2000 when the last property contemplated for development was completed,
leased, and purchased by the Company.
BERG LAND HOLDINGS OPTION AGREEMENT. In December 1998, the Company entered
into the Berg land holdings option agreement under which the Company, through
the Operating Partnerships, has the option to acquire any future R&D, office and
industrial property developed by the Berg Group on land currently owned or
optioned, or acquired for these purposes in the future, directly or indirectly,
by Carl E. Berg or Clyde J. Berg. The principal terms of the agreement include
the following:
- - So long as the Berg Group members and their affiliates own or have the
right to acquire shares representing at least 65% of our Common Stock on a
Fully Diluted basis the Company will have the option to acquire any
building developed by any member of the Berg Group on the land subject to
the agreement at such time as the building has been leased. Upon the
exercise of the option, the option price will equal the sum of:
(1) the full construction cost of the building; plus
(2) 10% of the full construction cost of the building; plus
(3) interest at LIBOR plus 1.65% on the amount of the full construction
cost of the building for the period from the date funds were disbursed
by the developer to the close of escrow; plus
(4) the original acquisition cost of the parcel on which the improvements
will be constructed; plus
(5) 10% per annum of the amount of the original acquisition cost of the
parcel from the later of January 1, 1998 and the seller's acquisition
date, to the close of escrow; minus
(6) the aggregate principal amount of all debt encumbering the acquired
property, or a lesser amount as approved by the Independent Directors
Committee.
- - The acquisition cost, net of any debt, will be payable in cash, or O.P.
Units valued at the average closing price of the Common Stock over the
30-trading-day period preceding the acquisition or in cash, at the option
of the Berg Group.
- - The Company must assume all property tax assessments.
- - If the Company elects not to exercise the option with respect to any
property, the Berg Group may hold and lease the property for its own
account, or may sell it to a third party.
- - All action taken by the Company under the Berg land holdings option
agreement must be approved by a majority of the members of the Independent
Directors Committee.
- 11 -
The following table presents certain information concerning projects
acquired under the Berg land holdings option agreement ("Berg Land"):
Approximate
Rentable Area Acquisition Acquisition Cash/Debt O.P. Units
Property (square feet) Period Price Assumption Issued
- ----------------------------------- --------------- ------------- -------------- ------------ ------------
Berg Land:
5325 Hellyer Avenue 131,500 Q1 2001 $15,472,318 $ 9,000,000 464,452
5500 Hellyer Avenue 117,740 Q1 2001 17,808,741 11,000,000 506,599
5550 Hellyer Avenue 78,794 Q2 2001 7,133,722 2,972,725 314,156
5905-5965 Silver Creek Road I 247,500 Q3 2001 26,990,990 18,033,511 647,279
5750 Hellyer Avenue 73,312 Q3 2001 6,619,937 4,901,740 127,438
5905-5965 Silver Creek Road II 98,500 Q4 2001 6,657,623 2,000,000 362,913
5345 Hellyer Avenue 125,000 Q1 2002 13,651,965 7,500,000 502,805
--------------- -------------- ------------ ------------
TOTAL 872,346 $94,335,296 $55,407,976 2,925,642
=============== ============== ============ ============
In January 2002, we acquired an approximately 125,000 rentable square foot
newly constructed R&D property located at 5345 Hellyer Avenue in San Jose,
California under the Berg land holdings option agreement. The total acquisition
price for this property was approximately $13.7 million. We acquired this
property by borrowing $7.5 million under the Berg Group line of credit and
issuing 502,805 O.P. Units to various members of the Berg Group.
OTHER COVENANTS. The acquisition agreement, Berg land holdings option
agreement and supplemental agreement to which the Company and the Berg Group, or
Carl E. Berg and Clyde J. Berg, individually are parties includes the
undertaking of Carl E. Berg not to directly or indirectly acquire or develop, or
acquire any equity ownership interest in any entity that has an ownership
interest in, any real estate zoned or intended for use as R&D, office or
industrial properties, with the exception of investments in securities of
publicly traded companies, which securities do not represent more than 10% of
the outstanding voting securities of such companies, in California, Oregon or
Washington without first disclosing such investment opportunity to the Company
and making such opportunity available to the Company, subject to the approval of
the Independent Directors Committee. This restriction does not apply to any
acquisition of the projects subject to the pending projects acquisition
agreement or completed buildings acquired pursuant to the Berg land holdings
option agreement or the supplemental agreement. This restriction remains in
effect until the date on which both of the following conditions are satisfied:
(i) no nominee of the Berg Group is a member of the Board of Directors; and (ii)
the Berg Group and its affiliates, other than the Company and the Operating
Partnerships, beneficially own less than 25% of the outstanding Common Stock,
including for these purposes all shares issuable upon exercise of the rights to
exchange O.P. Units for Common Stock.
In addition, transactions between the Company and any member of the Berg
Group, or an entity in which a member of the Berg Group holds at least 5% of the
equity interests, including the Company's election to issue Common Stock or pay
cash in exchange for O.P. Units tendered by the Berg Group are subject to review
and approval by the Independent Directors Committee. Aside from these
restrictions, the Berg Group is generally free to conduct its business
activities and will not be required to seek the approval of such activities or
refer business opportunities to the Company, nor will it have any liability to
the Company for its failure to do so.
ISSUANCE AND ASSUMPTION OF DEBT. As of March 31, 2002, the Company was
liable for loans aggregating approximately $85,089,000 and $11,300,000 payable
to the Berg Group under a secured line of credit and mortgage loan,
respectively. The Berg Group line of credit is secured by eleven properties,
bears interest at LIBOR plus 1.30 percent, and the maturity date has recently
been extended to March 2003. The mortgage loan is secured by two properties,
bears interest at 7.65 percent, and matures in June 2010.
LEASE FROM BERG GROUP. The Company leases its executive offices from Berg &
Berg Enterprises, Inc. For the year ended December 31, 2001, the Company paid
$87,840 to Berg & Berg Enterprises, Inc. under the terms of the lease agreement
for its executive offices.
- 12 -
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Directors, officers and greater than ten percent holders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) reports they
file.
To the Company's knowledge, based solely on review of the copies of the
above-mentioned reports furnished to the Company and written representations
regarding all reportable transactions, during the fiscal year ended December 31,
2001, all Section 16(a) filing requirements applicable to its directors,
officers and greater than ten percent holders were complied with on time, except
that Carl E. Berg and certain members of the Berg Group did not timely file
seven reports on Form 4 that may have been due with respect to acquired O.P.
Units issued pursuant to the Berg land holdings option agreement.
REPORT ON EXECUTIVE COMPENSATION BY THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee (the "Committee") comprises three independent
members of the Board of Directors. The Company's Board of Directors has
delegated to the Committee responsibility for reviewing, recommending and
approving the Company's compensation policies and benefits programs. The
Committee also has the principal responsibility for the administration of the
company's stock plans, including approving stock option grants to executive
officers.
COMPENSATION PHILOSOPHY
The Company's executive compensation policy is designed to attract and
retain qualified executive personnel by providing executives with a competitive
total compensation package based in large part on their contribution to the
financial and operational success of the Company, the executive's personal
performance and increases in stockholder value as measured by the Company's
stock price.
COMPENSATION PROGRAM
The compensation package for the Company's executive officers consists of the
following three components:
BASE SALARY. The Committee determines the base salary of each executive
based on the executive's scope of responsibility, past accomplishments and
experience and personal performance, internal comparability considerations and
data regarding the prevailing compensation levels for comparable positions in
relevant competing executive labor markets. The Committee may give different
weight to each of these factors for each executive, as it deems appropriate. In
selecting comparable companies for the purpose of setting competitive
compensation for the Company's executives, the Committee considers many factors
not directly associated with stock price performance, such as geographic
location, annual revenue and profitability, organizational structure,
development stage and market capitalization.
ANNUAL INCENTIVE COMPENSATION. At the present time, the Company does not
have an annual incentive compensation program in place. However, the Committee
may in the future at the Committee's discretion institute an annual incentive
program.
STOCK OPTIONS. The Committee believes that granting stock options to
executives and other key employees on an ongoing basis gives them a strong
incentive to maximize stockholder value and aligns their interests with those of
other stockholders. The Committee determines stock option grants to executives
and has authorized the Company's CEO to determine stock option grants for all
other employees, subject to the Committee's approval of total share allocations
from the Company's option plan. In determining the size of stock option grants,
the Committee considers the executive's current position with and
responsibilities to the Company, potential for increased responsibility and
promotion over the option term, tenure with the Company and performance in
recent periods, as well as the size of comparable awards made to executives in
similar positions in competing executive labor markets. Generally, each stock
option grant allows the executive to purchase shares of the Company's Common
Stock at a price per share equal to the market price on the date the option is
granted, but the Committee has the power to grant options at a lower price if
considered appropriate under the circumstances. Each stock option grant
generally becomes exercisable, or vests, in installments over time, contingent
upon the executive's continued employment with the Company.
- 13 -
COMPENSATION OF CHIEF EXECUTIVE OFFICER. The annual salary for Mr. Berg was
set in 1997 and first became payable in 1998. The Committee has no plan to
adjust his compensation.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M). Section 162(m) of the
Internal Revenue Code generally disallows a tax deduction to publicly-held
companies for compensation paid to certain executive officers, to the extent
that compensation paid to the officer exceeds $1 million during the Company's
taxable year. the compensation paid to the company's executive officers for the
year ended December 31, 2001 did not exceed the $1 million limit per officer. In
addition, the Company's 1997 Stock Option Plan and executive incentive option
grants have been structured so that any compensation deemed paid to an executive
officer in connection with the exercise of his or her outstanding options with
an exercise price per share equal to the fair market value per share of the
Common Stock on the grant date will qualify as performance-based compensation
that will not be subject to the $1 million limitation. It is very unlikely that
the cash compensation payable to any of the Company's executive officers in the
foreseeable future will approach the $1 million limit, and the Committee does
not expect to take any action at this time to modify cash compensation payable
to the Company's executive officers to avoid the application of Section 162(m).
The Compensation Committee of the Board of Directors
John C. Bolger
William A. Hasler
Lawrence B. Helzel
- 14 -
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors was formed in December
1998 and currently is comprised of Messrs. John C. Bolger, William A. Hasler and
Lawrence B. Helzel. None of these individuals were at any time during 2001, or
at any other time, an officer or employee of the Company. No executive officer
of the Company serves as a member of the Compensation Committee of any other
entity that has one or more executive officers serving as a member of the
Company's Board of Directors or Compensation Committee.
AUDIT COMMITTEE REPORT
The Audit Committee reviews, acts on and reports to the Board with respect
to various auditing and accounting matters, including the selection of the
Company's independent public accountants, the scope of the annual audits, fees
to be paid to the Company's accountants, the performance of the Company's
accountants, the audit report on the Company's consolidated financial statements
following completion of the audit and the accounting practices of the Company
with respect to internal accounting and financial controls. The Board of
Directors of the Company adopted an Audit Committee Charter on June 9, 2000. The
Audit Committee is currently comprised of Messrs. John C. Bolger, William A.
Hasler, and Lawrence B. Helzel, all of whom are independent. The Audit Committee
met three times during fiscal year 2001.
The Audit Committee has reviewed and discussed the audited financial
statements of the Company for fiscal year 2001 with management and the Company's
independent public accountants, PricewaterhouseCoopers LLP ("PWC"). The
Committee discussed with PWC matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). The Audit
Committee was also provided by PWC the written disclosures required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and the Committee discussed with PWC that firm's independence.
Based on the discussions with PWC concerning the audit, the independence
discussions and the financial statement review, and such other matters deemed
relevant and appropriate by the Audit Committee, the Audit Committee recommended
to the Board that the Company's financial statements for the fiscal year ended
December 31, 2001 be included in its 2001 Annual Report on Form 10-K filed with
the Securities and Exchange Commission.
The Audit Committee of the Board of Directors
John C. Bolger
William A. Hasler
Lawrence B. Helzel
- 15 -
--------------------------------------------------------
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
--------------------------------------------------------
At the Meeting, five directors (constituting the entire Board of Directors)
are to be elected to serve until the next annual meeting of Stockholders and
until a successor for such director is elected and qualified, or until the
death, resignation or removal of such director. There are five nominees, all of
whom are currently directors of the Company.
NOMINEES
Set forth below is information regarding the nominees for election to the
Board of Directors:
Name Position(s) with the Company First Elected Director
- --------------------------------- --------------------------------------------------------------- ----------------------------
Carl E. Berg Chairman of the Board, Chief Executive Officer and Director 1997
Raymond V. Marino President, Chief Operating Officer and Director 2001
John C. Bolger Director 1998
William A. Hasler Director 1998
Lawrence B. Helzel Director 1998
In accordance with the Company's Bylaws, it is a qualification of two
directors that they be nominated by the Berg Group and that one such director be
Carl E. Berg or the Berg Designee as long as the Berg Group and its affiliates
(other than the Company and the Operating Partnership) own at least 15% of the
Fully Diluted number of shares. The Company has been advised by Mr. Berg, who
represents the Berg Group, that he will be the only Berg Group nominee for
election at this meeting.
A plurality of the votes cast at the Meeting is required to elect each
nominee as a director. Unless authority to vote for any of the nominees named
above is withheld, the shares represented by the enclosed proxy will be voted
FOR the election as directors of such nominees. Each person nominated has agreed
to serve if elected, and the Board of Directors has no reason to believe that
any nominee will be unavailable or will decline to serve. In the event, however,
that any nominee is unable or declines to serve as a director at the time of the
Meeting, the proxies will be voted for any nominee who is designated by the
current Board of Directors to fill the vacancy.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF ALL OF THE ABOVE NOMINEES.
- 16 -
--------------------------------------------------------
PROPOSAL NO. 2:
INDEPENDENT PUBLIC ACCOUNTANTS
--------------------------------------------------------
The Board of Directors has appointed PricewaterhouseCoopers LLP,
independent public accountants, to audit the financial statements of the Company
for the year ending December 31, 2002. The Board of Directors proposes that the
stockholders ratify this appointment. The Company expects that representatives
of PricewaterhouseCoopers LLP ("PWC") will be present at the Annual Meeting,
will have the opportunity to make a statement if they desire to do so, and will
be available to respond to appropriate questions.
PWC were the Company's independent accountants for the last fiscal year
ended December 31, 2001. The Company incurred the following fees for PWC's
services last year:
AUDIT FEES. The aggregate fees billed by PWC for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended December 31, 2001 and the reviews of the interim financial
statements included in the Company's Quarterly Reports on Form 10-Q for the
fiscal year ended December 31, 2001 were approximately $100,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. During 2001,
PWC did not render any services to the Company related to financial information
systems design and implementation.
ALL OTHER FEES. The aggregate fees billed by PWC for compliance services
rendered to the Company, other than the services described under "Audit Fees"
and "Financial Information Systems Design and Implementation Fees," for the
fiscal year ended December 31, 2001 were approximately $7,000.
In the event that stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors, in its discretion, may direct the appointment of a different
independent accounting firm at any time during the year if the Board of
Directors determines that such a change would be in the Company's best
interests.
The affirmative vote of a majority of the votes cast affirmatively or
negatively at the Meeting is required to ratify the appointment of the
independent public accountants.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP TO SERVE AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 2002.
- 17 -
STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
To be considered for inclusion in the Company's proxy card and proxy
statement relating to the 2003 Annual Meeting of Stockholders, proposals subject
to SEC Rule 14a-8 must be received at the Company's principal office no later
than December 23, 2003.
In addition, if you desire to bring other business, including director
nominations, for the 2003 Annual Meeting that will not be included in the
Company's proxy card and proxy statement, your notice must be delivered to the
Company no earlier than February 22, 2003 and no later than March 24, 2003.
For additional requirements, a stockholder should refer to our Bylaws,
Article II, Section 12, "Nominations and Proposals by Stockholders," a current
copy of which may be obtained from our Secretary. If the Company does not
receive timely notice pursuant to the Company's Bylaws, any proposal will be
excluded from consideration at the 2003 Annual Meeting. All stockholder
proposals should be addressed to the attention of the Secretary at the principal
office of the Company.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
stockholder action at the Meeting. However, if other matters do properly come
before the Meeting or any adjournments or postponements thereof, the Board of
Directors intends that the persons named in the proxies will vote upon such
matters in accordance with the best judgment of the proxy holders.
BY ORDER OF THE BOARD OF DIRECTORS
Raymond V. Marino
----------------------------------
Secretary
Cupertino, California
April 30, 2002
- 18 -
MISSION WEST PROPERTIES, INC.
------------------
------------------------
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 2002 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Carl E. Berg and Raymond V. Marino, each
with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, all shares of common stock of Mission West Properties,
Inc. (the "Company") held of record by the undersigned on April 17, 2002 at the
2002 Annual Meeting of Stockholders to be held May 23, 2002 and any adjournments
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE
VOTED FOR SUCH PROPOSAL.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE REQUIRED IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
DETACH HERE
[X] Please mark vote
as in this example
FOR AGAINST ABSTAIN
1. Election of Directors 2. Ratify the appointment of [ ] [ ] [ ]
NOMINEES: 01 Carl E. Berg 02 John C. Bolger PricewaterhouseCoopers LLP
03 William A. Hasler 04 Lawrence B. Helzel as independent auditors.
05 Raymond V. Marino
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
(except as marked)
Instructions: To withhold authority to vote for any 3. In their discretion, the proxies are authorized to vote
indicated nominee, write the number(s) of the nominee(s) upon any other business that may properly come before
in the box provided below. the meeting.
[ ]
- ---------------------------------------------------- MARK HERE FOR
Name ADDRESS CHANGE [ ]
AND NOTE AT LEFT
- ----------------------------------------------------
Street Address Please sign exactly as name appears hereon. Joint owners
should each sign. Executors, administrators, trustees,
guardians or other fiduciaries should give full title as
- ---------------------------------------------------- such. If signing for a corporation, please sign in full
City State Country Zip Code corporate name by a duly authorized officer.
[ ] Please check here if you plan on attending the 2002 Annual Stockholders Meeting.
Signature: ________________________ Date: ________________ Signature: __________________________ Date: _________________