SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BEDFORD PROPERTY INVESTORS, INC.
--------------------------------
(Name of Registrant as Specified in Its Charter)
-------------
(Name of Person(s) Filing Proxy Statement, if other than the 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 which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee was calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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Dear Stockholder:
The directors and officers join me in extending to you a cordial invitation to
attend our annual meeting of stockholders. This meeting will be held on
Thursday, May 17, 2001 at 1:00 p.m. at the Soda Activity Center at Saint Mary's
College, 1928 St. Mary's Road, Moraga, California. There is a map to Saint
Mary's College on page 21 of this proxy.
Enclosed you will find the Notice of Meeting, Proxy Statement and Proxy Card. At
this Meeting we are seeking to elect five directors, all of whom will be elected
by the Stockholders, voting as a single class. Stockholders will also be asked
to ratify the appointment of KPMG LLP as the Company's independent public
accountants for the upcoming year.
Your management and Board of Directors unanimously recommend that you vote FOR
all nominees for directors and FOR the other proposal.
Please take time to review and vote on each proposal. Your vote is important.
Please remember to return your Proxy Card or to vote by Internet or telephone
voting.
I hope to see you at the Annual Meeting.
Very truly yours,
/s/ Peter B. Bedford
- ---------------------------------
Peter B. Bedford
Chairman of the Board and Chief Executive Officer
BEDFORD PROPERTY INVESTORS, INC.
270 LAFAYETTE CIRCLE
LAFAYETTE, CA 94549
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2001
---------------------
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Bedford Property Investors, Inc., a
Maryland corporation (the "Company"), will be held at the Soda Activity Center
at Saint Mary's College, 1928 St. Mary's Road, Moraga, California, on Thursday,
May 17, 2001 at 1:00 p.m. local time, to consider the following proposals:
1. Election by the holders of Common Stock of five directors to serve
until the next annual meeting of stockholders and until their
successors are duly elected and qualified;
2. To ratify the appointment by the Board of Directors of the Company's
independent public accountants for the year ending December 31, 2001;
and
3. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on March 23, 2001 are
entitled to notice of and to vote at the meeting and any adjournment or
postponement thereof.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. THE
PRESENCE AT THE MEETING, IN PERSON OR BY PROXY, OF STOCKHOLDERS ENTITLED TO CAST
A MAJORITY OF ALL THE VOTES ENTITLED TO BE CAST AT THE MEETING SHALL CONSTITUTE
A QUORUM. A PROXY CARD ACCOMPANIES THIS PROXY STATEMENT. IF YOU CANNOT ATTEND
THE MEETING, PLEASE (1) COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE, OR (2) CALL THE 800 TOLL-FREE NUMBER LISTED ON THE PROXY
CARD, OR (3) VOTE VIA THE INTERNET AS INDICATED ON THE PROXY CARD.
By Order of the Board of Directors
/s/ Dennis Klimmek
-----------------------------------
DENNIS KLIMMEK
SECRETARY
April 10, 2001
Lafayette, California
BEDFORD PROPERTY INVESTORS, INC.
270 LAFAYETTE CIRCLE
LAFAYETTE, CA 94549
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PROXY STATEMENT
---------------------
MAY 17, 2001
ANNUAL MEETING OF STOCKHOLDERS
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board of Directors" or the "Board") of Bedford
Property Investors, Inc., a Maryland corporation (the "Company"), of proxies
from the holders (the "Common Stockholders") of the Company's issued and
outstanding shares of Common Stock, par value $.02 per share (the "Common
Stock"), to be exercised at the Annual Meeting of Stockholders to be held on
Thursday, May 17, 2001 at 1:00 p.m., local time, and at any adjournment(s) or
postponement(s) of such meeting (the "Annual Meeting"), for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders.
The purpose of the Annual Meeting is to consider and act upon the following
proposals:
1. Election by the holders of Common Stock of five directors to serve until
the next annual meeting of stockholders and until their successors are
duly elected and qualified;
2. To ratify the appointment by the Board of Directors of the Company's
independent public accountants for the year ending December 31, 2001;
and
3. To transact such other business as may properly be brought before the
Annual Meeting.
This Proxy Statement and the enclosed Proxy Card are being mailed to the
Common Stockholders on or about April 10, 2001.
The holders of record of the shares of Common Stock at the close of
business on March 23, 2001 (the "Record Date") are entitled to notice of and to
vote at the Annual Meeting in relation to proposals 1 and 2, above, on which
they will vote as a class. At the close of business on the Record Date,
17,811,510 shares of Common Stock were outstanding (the "Outstanding Stock"),
each of which is entitled to cast one vote.
The presence at the Annual Meeting, in person or by proxy, of Common
Stockholders holding shares entitled to cast a majority for each proposal of all
the votes entitled to be cast at the Annual Meeting shall constitute a quorum
for the transaction of business at the Annual Meeting. Abstentions and broker
non-votes (i.e., votes not cast by a broker or other record holder in "street"
or nominee name solely because such record holder does not have discretionary
authority to vote on the matter) will be counted toward the presence of a
quorum. The directors (Proposal 1) will be elected by a plurality of all the
votes cast at the Annual Meeting. Accordingly, abstentions as to the election of
directors will not affect the election of the candidates receiving the plurality
of votes. The affirmative vote of a majority of all the votes cast by holders of
Common Stock is necessary for ratification of the appointment of independent
public accountants for the fiscal year ending December 31, 2001 (Proposal 2).
Abstentions as to this proposal will not be counted as votes cast and will have
no effect on the result of the vote on this proposal.
Under the Maryland General Corporation Law, holders of shares of
Outstanding Stock will not be entitled to appraisal rights with respect to such
shares with respect to any of the proposals.
All expenses in connection with the solicitation of proxies will be borne
by the Company. In addition to solicitation by mail, officers and directors of
the Company may also solicit proxies by mail, telephone, facsimile or in person.
Additionally, the Company may retain the services of a professional proxy
solicitation firm to assist in the solicitation of proxies, at a cost of
approximately $5,000 plus expenses, which would be borne by the Company.
A proxy card for use by the Common Stockholders accompanies this proxy
statement. The shares of Common Stock represented by properly executed proxy
cards will be voted at the Annual Meeting as indicated or, if no instruction is
given, in favor of Proposals 1 and 2. The Company does not presently know of any
other business that may come before the Annual Meeting. Any person giving a
proxy has the right to revoke it at any time before it is exercised (a) by
filing with the Secretary of the Company a duly signed revocation or proxy
bearing a later date or (b) by voting in person at the Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of five members.
Accordingly, the Common Stockholders, voting as a class, have the right to elect
all five members to the Board of Directors to serve until the next annual
meeting of Common Stockholders and until their respective successors are duly
elected and qualified.
The Board of Directors has nominated the five individuals listed below to
serve as directors of the Company. Management knows of no reason why any of
these nominees would be unable or unwilling to serve, but if any nominee should
be unable or unwilling to serve, the proxies will be voted for the election of
such other persons for the office of director as management may recommend in the
place of such nominee.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMMON STOCKHOLDERS VOTE "FOR"
THE FIVE NOMINEES LISTED BELOW.
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS DIRECTOR SINCE
- ------------------------------------------------------------------------------------------------------------------------------
Peter B. Bedford 63 Mr. Bedford has been Chairman of the Board since May 1991
1992 and Chief Executive Officer since November 1992.
Mr. Bedford has been engaged in the commercial real estate
business, primarily in the Western United States, for over 37
years and has been responsible for the acquisition, ownership,
development and management of an aggregate of
approximately 26 million square feet of industrial, office and
retail properties, as well as land, in 14 states. Mr. Bedford
serves on the board of directors of Bixby Ranch Company,
a real estate investment company; eVAULT, a data storage
company; and First American Title Guarantee Co., a title
insurance company. Mr. Bedford is the recipient of numerous
awards recognizing his contributions to the real estate
industry and serves as a governor of the Urban Land
Foundation and an overseer of the Hoover Institution. His
previous experience also includes serving as Vice Chairman
of the National Realty Committee and of the Hoover
Institution and as Chairman of the Real Estate Advisory
Board of the Wharton School of Business. Mr. Bedford
received his B.A. in Economics from Stanford University.
Anthony Downs 70 Mr. Downs is a Senior Fellow at The Brookings Institution, 1992
a non-profit policy research organization. Mr. Downs
serves on the Board of Directors of General Growth
Properties, Inc., a REIT; Massachusetts Mutual Life
Insurance Co.; the Urban Institute; the NAACP Legal and
Educational Defense Fund, Inc.; the National Housing
Partnership Foundation, a developer of low-income
housing; the Urban Land Institute; Counselors of Real
Estate; and Penton Media, Inc. Mr. Downs received a
B.A. in International Relations and Political Theory
from Carleton College and an M.A. and Ph.D. in
Economics from Stanford University.
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS DIRECTOR SINCE
- ------------------------------------------------------------------------------------------------------------------------------
Anthony M. Frank 69 Mr. Frank served as Postmaster General of the United 1992
States from 1988 to 1992 and as Chairman and Chief
Executive Officer of First Nationwide Bank from 1971 to
1988. During that time, he was Chairman of the Federal
Home Loan Bank of San Francisco, Chairman of the
California Housing Finance Agency, Chairman of
Independent Bancorp of Arizona, and the first Chairman
of the Federal Home Loan Mortgage Corporation
Advisory Board. Currently he is founding Chairman of
Belvedere Capital Partners and serves on the Board of
Directors of Crescent Real Estate Equities, a REIT; Charles
Schwab & Co., a brokerage firm; Temple-Inland, Inc.,
a forest products company; and Cotelligent, Inc., an
information technology services company. Mr. Frank
received a B.A. from Dartmouth College and an M.B.A.
from the Tuck School of Business at Dartmouth.
Thomas H. Nolan, Jr. 43 Mr. Nolan is a Principal of AEW Capital Management, 1995
L.P. (AEW), a national real estate investment adviser,
and President and Senior Portfolio Manager of the AEW
Partners Funds. Mr. Nolan joined AEW in 1984.
Mr. Nolan's responsibilities include the oversight of
investments made by certain partnerships managed by
AEW. In that capacity he serves on a number of Boards
of private companies and has formerly served on the
Board of Directors of Crocker Trust, Inc., a REIT, and
the Partnership Committee of the Taubman Realty Group
L.P. Mr. Nolan earned a B.B.A. in Business
Administration from the University of Massachusetts.
Martin I. Zankel, Esq. 67 Mr. Zankel has been a Director of the Company since 1992
May 1992. He is Senior Principal in the law firm of
Bartko, Zankel, Tarrant & Miller. In addition, Mr. Zankel
has more than 35 years experience as a real estate investor
and developer, including Chairman of the Board and
Chief Executive Officer of Landsing Pacific Fund, Inc.,
a REIT (ASE); and Managing Member of ZORO, LLC,
a developer of San Francisco multimedia real estate facilities.
Mr. Zankel is the Chairman of the Board of trustees of the
Berkeley Repertory Theater. He received a B.S. in
Economics from the Wharton School of Commerce and
Finance at the University of Pennsylvania and a J.D. from
the Hastings College of the Law at the University of
California in San Francisco.
COMPENSATION OF DIRECTORS
Members of the Board of Directors who are not employees of the Company are
currently paid an annual retainer fee of $17,500 and an additional fee of $2,500
for each Board meeting attended. The Chairpersons of the Audit and Compensation
Committees each receive an additional $3,000 annually for their work on those
committees. Any non-employee Director attending in person a duly constituted
meeting of a committee of the Board of Directors of which such Director is a
member receives, in addition to any other fees to which he may be entitled, a
separate meeting attendance fee equal to $2,500 for his or her attendance in
person at any such committee meeting not held on the same day, the day preceding
or the day following a regular or special meeting of the Board of Directors. Any
non-employee member of the Board of Directors who participates in a regular or
special meeting of the Board of Directors by conference telephone or similar
communications equipment receives $600 for each such meeting. Non-employee
Directors are reimbursed for out-of-pocket expenses in connection with
attendance at meetings. If a non-employee member of the Board of Directors
travels to conduct a site inspection of a property to be acquired by the
Company, such Director is paid $1,000 per day and reimbursed for related travel
expenses. Non-employee Directors receive no other cash compensation for their
services on behalf of the Company. Pursuant to the Company's Amended and
Restated 1992 Directors' Stock Option Plan, all Directors (whether or not
employed by the Company) receive annual grants of 10,000 stock options and newly
elected members receive 25,000 stock options.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held four regular meetings and no special meetings
during 2000. Each member of the Board of Directors attended at least 75% of the
aggregate number of meetings of the Board of Directors and the committees of
which he was a member during the last year.
The Company has an Audit Committee, which currently consists of Messrs.
Frank (Chairman), Downs and Nolan. The Audit Committee reviews the internal
financial procedures and controls of the Company and reviews the services
performed and to be performed by the independent auditors of the Company during
the year. The members of the Audit Committee also meet regularly with the
independent auditors to review the scope and results of the annual audit and the
Chairman participates in quarterly conference calls with the independent
auditors at which time the auditors present their analysis of procedures and a
review of the quarter results. The Audit Committee met twice during 2000.
The Company also has a Compensation Committee, which currently consists of
Messrs. Zankel (Chairman), Frank and Nolan. The Compensation Committee is
responsible for the administration of the Amended and Restated Employee Stock
Option Plan (the "Employee Plan"). The Compensation Committee met once during
2000.
The Company also has a Nominating Committee, which currently consists of
Messrs. Bedford (Chairman), Downs and Frank. The Nominating Committee is
responsible for submitting nominations for the directors, elections for whom are
held at the annual meeting of Stockholders. The Nominating Committee does not
consider nominees proposed by Stockholders. The Nominating Committee met once
during 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 2000 were Messrs. Zankel,
Frank and Nolan. None of these individuals were officers or employees of the
Company at any time during the year ended December 31, 2000, nor have any of
these individuals ever been an officer of the Company or any of its
subsidiaries. In addition, none of the executive officers of the Company served
on the compensation committee of another entity or as a director of an entity
that employs any of the members of the Compensation Committee.
Martin I. Zankel, a director of the Company, and his associates provided
legal services to the Company for which his firm was paid, in the aggregate,
$5,854 in 2000.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
KPMG LLP, Certified Public Accountants, served as independent accountants
of the Company for the fiscal year ended December 31, 2000. The Board of
Directors, acting upon the recommendation of its audit committee, has appointed
KPMG LLP to audit the financial statements of the Company for the fiscal year
ending December 31, 2001. A representative of KPMG LLP is expected to be present
at the Annual Meeting and will have the opportunity to make a statement if he or
she so desires and will be available to respond to appropriate questions from
the Common Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMMON STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS INDEPENDENT ACCOUNTANTS OF THE
COMPANY.
INFORMATION REGARDING EXECUTIVE OFFICERS
EXECUTIVE OFFICERS OF THE COMPANY
The following persons serve as executive officers of the Company:
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS OFFICER SINCE
- -----------------------------------------------------------------------------------------------------------------------------
Peter B. Bedford 63 Mr. Bedford has been Chairman of the Board since May 1992
1992 and Chief Executive Officer since November 1992.
Mr. Bedford has been engaged in the commercial real estate
business, primarily in the Western United States, for over 37
years and has been responsible for the acquisition, ownership,
development and management of an aggregate of
approximately 26 million square feet of industrial, office and
retail properties, as well as land in 14 states. Mr. Bedford
serves on the board of directors of Bixby Ranch Company,
a real estate investment company; eVAULT, a data storage
company; and First American Title Guarantee Co., a title
insurance company. Mr. Bedford is the recipient of numerous
awards recognizing his contributions to the real estate
industry and serves as a governor of the Urban Land
Foundation and an overseer of the Hoover Institution. His
previous experience also includes serving as Vice Chairman
of the National Realty Committee and of the Hoover
Institution and as Chairman of the Real Estate Advisory
Board of the Wharton School of Business. Mr. Bedford
received his B.A. in Economics from Stanford University.
James R. Moore 60 Mr. Moore has been Executive Vice President and Chief 1995
Operating Officer since January 1998 and joined the
Company in September 1995. From September 1995 to June
1997, Mr. Moore was Vice President of Property/Asset
Management. From June 1997 to January 1998, Mr. Moore
was Senior Vice President of Property/Asset Management.
From 1983 to 1994, he was Managing Director of Cushman
and Wakefield, an international commercial real estate
services firm. Mr. Moore was also a branch manager and
commercial real estate broker at Cushman and Wakefield.
He served on the Board of Trustees of The Lindsay Museum
between 1984 and 1999. Mr. Moore has the CCIM
designation and has lectured at the University of San
Francisco and San Francisco State University. He received a
B.A. in History from the University of California at
Berkeley, an M.B.A. from the University of San Francisco
and a Doctorate in Business Administration Degree from
Golden Gate University.
Hanh Kihara 52 Ms. Kihara has been Senior Vice President and Chief 1997
Financial Officer of the Company since January 1999. From
May 1993 to January 1999, Ms. Kihara served as Vice
President and Controller of the Company. Prior to joining the
Company, she was Controller and Assistant Controller of
Bedford Properties Holdings, Ltd. a company wholly-owned
by Mr. Bedford (BPHL), from 1990 to 1993. From 1986 to
1990, Ms. Kihara was a Manager at Armstrong, Gilmour and
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS OFFICER SINCE
- -----------------------------------------------------------------------------------------------------------------------------
Associates, a certified public accounting firm. Ms. Kihara
has been a certified public accountant since 1989.
Ms. Kihara received a B.S. in Administration and
Accounting from California State University of Hayward.
Dennis Klimmek 56 Mr. Klimmek has been Secretary of the Company since 1997
January 1998 and General Counsel since December 1998.
From October 1997 he has been Senior Vice President of the
Company and of Bedford Acquisitions, Inc., a California
corporation wholly-owned by Mr. Bedford. From 1992 to
1997, Mr. Klimmek served as Vice President and General
Counsel of Kemper Real Estate Management Company and
its affiliated real estate companies, which included real estate
development, management and home building companies.
From 1986 to 1992, he was Vice President and General
Counsel of BPHL. Mr. Klimmek has been a member
of the California Bar since 1974. He received a B.S. in
Business Administration from Pepperdine University, a M.S.
in Engineering from the University of Southern California
and a J.D. from Loyola University.
Anne L. Hoffman 48 Ms. Hoffman has been Senior Vice President, Development 1998
of the Company and Bedford Acquisition, Inc. since March
1998. Ms. Hoffman has personally managed the development
of over 1.5 million square feet of suburban office, R&D,
warehouse and service buildings. In the four years immediate
prior to joining the Company, Ms. Hoffman was the principal
of a real estate consulting practice providing a variety of
services to corporate and developer clients including Catellus,
The Martin Group, Chevron, Ryerson Steel, and Vintage
Properties. From 1992 to 1994, Ms. Hoffman was Vice
President of Sales and Marketing for HQ Network System,
the franchise organization for HQ Business Centers. From
1984 to 1991 Ms. Hoffman was a Partner and Project
Manager for the Philadelphia based Rouse & Associates.
COMPENSATION OF NAMED EXECUTIVE OFFICERS
The following table sets forth information regarding compensation paid by
the Company for services rendered during the past three fiscal years for (i) the
Chief Executive Officer, (ii) the two next most highly compensated executive
officers of the Company who were employed by the Company as of December 31,
2000, and (iii) the two most highly compensated executive officers of Bedford
Acquisition, Inc. who are officers of the Company but were employed by Bedford
Acquisition, Inc. as of December 31, 2000 (collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------- ----------------------
RESTRICTED ALL OTHER
SALARY BONUS STOCK AWARDS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(3) (#) ($)(1)
---- ------- ---------- ---------- ---------- ----------
Peter B. Bedford....................2000 175,000 200,000(2) 403,144 10,000(4) 14,583
Chief Executive Officer 20,000(5)
1999 175,000 150,000(2) 398,578 10,000(4) 14,190
1998 154,500 50,000(2) 292,500 10,000(4) 8,190
100,000(5)
James R. Moore......................2000 175,000 175,000(6) 204,848 15,000(5) 14,583
Executive Vice President and1999 175,000 100,000(6) 398,578 - 14,190
Chief Operating Officer 1998 151,875 100,000(6) 121,875 75,000(5) 8,190
Hanh Kihara.........................2000 150,000 150,000 140,491 15,000(5) 14,583
Senior Vice President and 1999 150,000 65,000 290,972 - 14,190
Chief Financial Officer 1998 96,500 40,000 97,500 25,000(5) 1,590
Dennis Klimmek......................2000 175,000 175,000 172,648 15,000(5) 14,583
Senior Vice President, 1999 150,000 150,000 318,891 - 14,190
General Counsel and Secretary 1998 151,500 100,000 97,500 50,000(5) 8,190
Anne L. Hoffman(7)..................2000 150,000 150,000 102,750 15,000(5) 12,183
Senior Vice President, 1999 150,000 150,000 271,050 - 11,790
Development 1998 120,250 150,000 97,500 25,000(5) 4,893
- ---------------------------------------------------------------------------------------------------------------------------
(1) Includes auto allowance (in an aggregate amount of $30,600 for 2000,
$30,600 for 1999, and $23,125 for 1998), premiums paid by the Company for
term life insurance (in an aggregate amount of $540 for 2000, $450 for
1999, and $428 for 1998) and matching contributions under the Company's
401(k) Plan (in an aggregate amount of $39,375 for 2000, $37,500 for 1999,
and $7,500 for 1998).
(2) 50% of Mr. Bedford's 2000 bonus and 30% of his 1999 bonus were paid by
Bedford Acquisitions, Inc., a California corporation wholly owned by Mr.
Bedford. See "Certain Relationships and Related Transactions Funding of
Acquisitions and Financing Costs."
(3) Valued using the closing price of the common stock on the date of grant.
All restricted stock granted in 1998, except for the restricted stock
granted to Mr. Klimmek under the terms of his prior employment agreement,
will fully vest five years from the date granted. In the case of restricted
stock granted to Mr. Klimmek in 1998, 20% of the restricted stock vests
annually from the date granted. Restricted stock granted in 1999 and 2000
vests 13% each anniversary of the date of grant, with the remaining 48%
vesting on the fifth anniversary of the grant. The aggregate restricted
stock held by the Named Executive Officers as of December 31, 2000 and the
aggregate cash value of those shares based on the closing price of the
common stock on the date of the respective grants were as follows: Mr.
Bedford 66,315 shares/$1,192,345; Mr. Moore 43,400 shares/$774,111; Ms.
Kihara 30,994 shares/$551,504; Mr. Klimmek 31,741 shares/$563,380; and Ms.
Hoffman 24,746 shares/$436,064. The Named Executive Officers are paid
dividends on their holdings of restricted stock.
(4) Represents stock options granted pursuant to the Director Plan.
(5) Represents stock options granted pursuant to the Employee Plan.
(6) 50% of Mr. Moore's 2000, 1999 and 1998 bonuses were paid by Bedford
Acquisitions, Inc., a California corporation wholly owned by Mr. Bedford.
(7) Ms. Hoffman commenced employment with the Company and Bedford Acquisitions,
Inc., a California corporation wholly owned by Mr. Bedford, in March 1998.
OPTION GRANTS
The following table sets forth certain information concerning options
granted during 2000 to the Named Executive Officers.
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OPTION GRANTS IN 2000 OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(3)
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS GRANTED EMPLOYEES IN PRICE EXPIRATION 5% 10%
NAME (#) FISCAL YEAR ($/SH) DATE ($) ($)
Peter B. Bedford......... 10,000 (1) N/A $17.94 11/18/2010 $112,808 $285,877
20,000 (2) 16% $17.94 5/18/2010 $225,616 $571,755
James R. Moore........... 15,000 (2) 12% $17.94 5/18/2010 $169,212 $428,816
Hanh Kihara............. 15,000 (2) 12% $17.94 5/18/2010 $169,212 $428,816
Dennis Klimmek.......... 15,000 (2) 12% $17.94 5/18/2010 $169,212 $428,816
Anne Hoffman............ 15,000 (2) 12% $17.94 5/18/2010 $169,212 $428,816
- ---------------------------------------------------------------------------------------------------------------------------
(1) Represents stock options granted pursuant to the Director Plan, which
options vest and become exercisable six months after the date of grant.
(2) Represents stock options granted pursuant to the Employee Plan in 2000.
(3) Potential gains are net of exercise price, but before taxes associated with
exercise. These amounts represent certain assumed rates for appreciation
only, based on SEC rules, and do not represent the Company's estimate or
projection of the price of the Company's stock in the future. Actual gains,
if any, on stock option exercises depend upon the actual future performance
of the Common Stock and the continued employment of the option holders
throughout the vesting period. Accordingly, the potential realizable values
set forth in this table may not be achieved.
AGGREGATE OPTION EXERCISES IN 2000 AND VALUES AT YEAR-END 2000
The following table sets forth information regarding the number of shares
acquired and value realized for options exercised by the Named Executive
Officers during the year ended December 31, 2000 and the number and aggregate
dollar value of unexercised options held at the end of 2000.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND YEAR-END OPTION/SAR VALUES
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY OPTIONS
UNEXERCISED OPTIONS AT YEAR-END
SHARES ACQUIRED VALUES REALIZED AT FISCAL YEAR-END ($)(1)
NAME ON EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Peter B. Bedford................60,000 205,220 58,750 88,750 131,670 149,223
James R. Moore........ 22,500 77,227 22,500 60,000 63,984 93,281
Hanh Kihara.....................12,750 51,586 5,000 32,500 14,249 63,516
Dennis Klimmek...................... - - 15,000 55,000 6,094 66,699
Anne Hoffman........................ - - 12,500 27,500 11,322 49,283
- --------------------------------------------------------------------------------------------------------------------------
(1) For all unexercised in-the-money options, assumes a fair market value at
December 31, 2000 of $20.47 per share of Common Stock (being the average of
the high and low price on the last trading day before that date), which is
the last transaction in the Common Stock on the New York Stock Exchange on
that date.
(2) Based on the difference between the closing price of the Common Stock on
the day the options were exercised less the exercise price of the options.
EMPLOYMENT AGREEMENT WITH PETER B. BEDFORD
On February 16, 1993, the Company entered into an employment agreement
("Employment Agreement") with Mr. Bedford, Chairman and Chief Executive Officer,
and amended the agreement on September 18, 1995. Pursuant to the amended
Employment Agreement, Mr. Bedford agreed to serve as Chairman and Chief
Executive Officer of the Company on a substantially full-time basis until the
agreement's expiration on September 18, 2000. As of September 18, 2000, the
agreement has been automatically renewed for an additional one-year term ending
September 18, 2001, after which time the agreement will be extended for
successive one year terms until either party gives the other notice of
non-renewal. Under the Employment Agreement, the Company agrees to pay Mr.
Bedford a salary of not less than $150,000 per annum, plus automobile and
parking allowances. The amended Employment Agreement provides that the Company
will pay Mr. Bedford a severance payment equal to his base salary in the event
that his employment is terminated by the Company without cause or Mr. Bedford
resigns following a change in control of the Company. The agreement defines a
"change of control" as a transaction not approved by a majority of the Board
that results in the acquisition by any person of 35% of the voting stock of the
Company, other than persons who had such voting control at the time the
agreement was originally entered into.
RETENTION AGREEMENTS
The Company has entered into retention agreements ("Retention Agreements")
with Mr. Bedford, Mr. Moore, Ms. Hoffman, Ms. Kihara, Mr. Silla and Mr. Klimmek
providing for certain cash payments in the event of an executive's termination
of employment following a change in control of the Company. For purposes of the
Retention Agreements, a "change in control" is defined as (i) the acquisition by
any person of 30% or more of the combined voting power of the Company (with
certain exceptions), (ii) a change in 50% of the membership of the Board during
any consecutive two-year period, where new members of the Board were not
approved by members at the beginning of the period or by other members so
approved, (iii) the occurrence of a reorganization, merger, consolidation or
other transaction after which the stockholders of the Company immediately prior
to the transaction do not, immediately following the transaction, own more than
50% of the combined voting power of the Company or (iv) a sale, liquidation or
distribution of all or substantially all of the assets of the Company. Mr.
Bedford may elect to receive termination payment under his Retention Agreement
or his Employment Agreement, but not both.
In the event of an Involuntary Termination (as defined in the Retention
Agreements) of a participating executive within two years following a change in
control, such executive will be entitled to receive a cash payment equal to the
sum of the executive's salary plus their average bonus received over the prior
three years, except in the case of Mr. Bedford, in which case the payment is
three times the sum of his salary and average bonus. Any severance payable under
an executive's retention agreement will be reduced by any amount of severance
payable to such executive under any other plan, arrangement or agreement under
which the executive is entitled to receive cash severance payments. In addition,
the participating executive will be entitled to receive a pro rata bonus for the
year in which the Involuntary Termination occurs.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW
During 2000 the members of the Compensation Committee were Messrs. Zankel,
Ballard and Frank. The Compensation Committee is responsible for the general
compensation policies of the Company, and in particular is responsible for
setting and administering the policies that govern executive compensation. The
Compensation Committee evaluates the performance of management and determines
the compensation levels for all executive officers.
The primary objectives of the Company's compensation policies and programs
are (i) to attract and retain key executives, (ii) to reward performance by
these executives that benefits the Stockholders and (iii) to align the financial
interests of the Company's executive officers directly with those of the
Stockholders. The primary elements of executive officer compensation are base
salary, annual cash bonus, and stock option and restricted stock awards. The
salary is based on factors such as related experience, level of responsibility,
and comparison to similar positions in comparable companies. The annual cash
bonuses are based on the Company's performance measured against attainment of
financial and other objectives, and on individual performance. Stock option and
restricted stock awards are intended to align the executive officer's interest
with those of the Stockholders, and are determined based on the executive
officer's level of responsibility, number of options or shares previously
granted, and contributions toward achieving the goals and objectives of the
Company. Additional information on each of these compensation elements follows.
SALARIES
Base salaries for the executive officers are adjusted annually, following a
review and recommendation to the Committee by the Chairman and Chief Executive
Officer (the "CEO") of the Company. In completing the review, performance of the
individual with respect to specific objectives is evaluated, as are increases in
responsibility and salaries for similar positions in the industry. Comparisons
are made to the total compensation packages of other publicly traded real estate
investment
trusts of similar size, with a comparable number of properties and employees.
These comparisons are completed through a review of various public filings as
well as through a review of the results of the REIT Executive Compensation
Survey sponsored by the National Association of Real Estate Investment Trusts
(NAREIT) and other industry compensation surveys. When all reviews are
completed, the CEO makes a recommendation to the Compensation Committee for its
review and final approval.
With respect to the CEO, the Compensation Committee considers a number of
factors in setting his compensation, the most important of which are the level
of compensation paid to chief executive officers of other real estate investment
trusts, the success of the Company's recent acquisition and development of new
properties, and his importance to the Company's efforts to raise capital in the
public markets. The current base salary for Mr. Bedford, the Company's CEO, is
less than the average for chief executive officers of similar real estate
investment trusts. However, his total compensation is deemed appropriate in view
of the restricted stock and the stock options he holds.
ANNUAL BONUSES
Annual bonuses are awarded on a discretionary basis and reflect both
Company and individual performance. The Compensation Committee considers
numerous qualitative and quantitative factors in determining these bonus awards,
including the success of the Company's acquisition and sale programs, the amount
of financings obtained by the Company, and the growth in the Company's funds
from operations, after adjustment for lease commissions, tenant improvements and
other capital expenditures.
STOCK OPTION AWARDS
Stock options are an integral part of each executive officer's compensation
and are utilized by the Company to provide an incentive to the officer, and to
align the interests of the executive with those of the Stockholders by providing
him or her with a financial interest in the Company. Options granted by the
Compensation Committee under the Company's Employee Stock Option Plan are made
at fair market value on the date of the grant, vest over various time periods of
up to four years and expire after ten years. In making grants, the Compensation
Committee takes into account the executive officer's contributions to the
Company, scope of responsibilities, salary and the number of options previously
granted. In 2000 the Company granted 127,000 options to employees.
RESTRICTED STOCK AWARDS
A share of restricted stock entitles a participant to receive a share of
common stock at a specified vesting date, subject to vesting criteria, and, in
the discretion of the Compensation Committee performance criteria. All
restricted stock granted prior to 1999, except for restricted stock granted to
Mr. Klimmek in 1998 under the terms of his prior employment agreement, will
fully vest five (5) years from the date granted. In the case of the restricted
stock granted to Mr. Klimmek in 1998, 20% of that restricted stock vests
annually on each anniversary of the grant. Restricted stock granted in 1999 and
2000 vests at the rate of 13% per year on each anniversary of the grant. On the
fifth anniversary of the grant, the remaining 48% of the stock will vest,
provided the recipient remains an employee of the Company on that date. Much
like stock options, restricted stock awards are utilized by the Company to
provide an incentive to the employee, and to align the interests of the employee
with those of the Stockholders by providing the employee with a financial
interest in the Company. During 2000, the Company granted 142,576 shares of
restricted stock. These grants included 21,526 shares of restricted stock
granted to employees, including executive officers, under an election to acquire
restricted stock by returning to the Company options with twice the equivalent
value of each option using a Black-Scholes valuation.
SECTION 162(m)
The Company intends that compensation paid to its executive officers will
be deductible under Section 162(m) of the Internal Revenue Code.
Respectfully submitted,
THE COMPENSATION COMMITTEE
Martin I. Zankel (Chairman)
Anthony M. Frank
Thomas H. Nolan, Jr.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and any person who owns more than ten
percent (10%) of a registered class of the Company's equity securities, to file
reports of securities ownership on Form 3 and changes in ownership on Form 4 or
5 with the Securities and Exchange Commission (the "SEC"). Such officers,
directors and greater than ten percent (10%) stockholders are also required by
SEC rules to furnish the Company with copies of all Section 16(a) forms that
they file.
Based solely on its review of copies of such reports furnished to the Company,
the absence of a Form 3 or Form 5 or written representations that no Form 5 was
required, the Company believes that all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten percent (10%)
stockholders during the fiscal year ended December 31, 2000 were satisfied.
AUDIT COMMITTEE REPORT TO SHAREHOLDERS
The Audit Committee of the Board is responsible for providing independent,
objective oversight of the Company's accounting functions and internal controls.
The Audit Committee is composed of three directors, each of whom is independent
as defined by the National Association of Securities Dealers' listing standards
and each of whom is financially literate as required by New York Stock Exchange
rules. The Audit Committee operates under a written charter approved by the
Board of Directors. A copy of the charter is attached to this Proxy Statement as
Appendix A.
Management is responsible for the Company's internal controls and financial
reporting process. The independent accountants are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes.
In connection with these responsibilities, the Audit Committee met with
management and the independent accountants to review and discuss the December
31, 2000 financial statements. The Audit Committee also discussed with the
independent accountants the matters required by Statement on Auditing Standards
No. 61 (Communication with Audit Committees), including the independent
accountants' judgment about the quality, rather than just the acceptability, of
the Company's accounting principles and underlying estimates in its financial
statements. The Audit Committee also received the written disclosures and the
letter from the independent accountants required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the Audit
Committee discussed with the independent accountants that firm's independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the representations
of management and the independent accountants, the Audit Committee recommended
that the Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000, to be filed with the Securities and Exchange Commission.
AUDIT FEES
The aggregate fees billed for professional services rendered by KPMG LLP
for the audit of the Company's annual financial statements for the year ended
December 31, 2000, and the reviews of the condensed financial statements
included in our quarterly Reports on Forms 10-Q for the year ended December 31,
2000, were $101,300.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
KPMG LLP did not render any information technology services to the Company
during the year ended December 31, 2000.
ALL OTHER FEES
The aggregate fees billed for all other services, exclusive of the fees
disclosed above relating to financial statement audit services rendered by KPMG
LLP during the year ended December 31, 2000, were $220,149. The audit committee
has considered whether the other non-audit services are compatible with
maintaining the auditor's independence.
Respectfully submitted,
THE AUDIT COMMITTEE
Anthony M. Frank (Chairman)
Anthony Downs
Thomas H. Nolan, Jr.
STOCK PRICE PERFORMANCE GRAPH
The following line graph illustrates a six-year comparison of the
cumulative total stockholder return on the Common Stock against the cumulative
total return of the Standard & Poor's 500 Composite Stock Index and the SNL
Securities Corporate Performance Index Value of all publicly-traded real estate
investment trusts ("REITs") holding greater than a 75% equity interest in their
REIT-qualifying assets. The graph assumes that $100 was invested on December 31,
1995 in the Common Stock and the indices, and that all dividends were reinvested
throughout the period.
TOTAL RETURN PERFORMANCE
[PERFORMANCE GRAPH]
SIX-YEAR CUMULATIVE TOTAL STOCKHOLDER RETURN
YEAR ENDING
INDEX 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
- ---------------------------------------------------------------------------------------------------------------------------------
Bedford Property Investors, Inc. 100.00 133.41 176.19 146.21 162.17 221.09
S&P 500 100.00 122.86 163.86 210.64 254.97 231.74
SNL All Equity REITs 100.00 135.95 163.67 135.42 128.07 161.23
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 15, 2001, with
respect to directors, certain employees of the Company and each person who is
known by the Company to own beneficially more than 5% of the shares of its
Common Stock, and with respect to shares of Common Stock owned beneficially by
all directors and officers of the Company as a group.
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS BENEFICIALLY OWNED CLASS
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Growth Management..............................................1,440,000 7.86%
Peter B. Bedford.......................................................1,269,212 (1) 6.93%
ICM Asset Management.....................................................912,375 4.98%
Westfield Capital Management.............................................844,950 4.61%
Heitman/PRA Securities Advisors, Inc.....................................764,571 4.18%
Anthony Downs.............................................................86,410 (2) **
Anthony M. Frank..........................................................89,534 (2) **
Martin I. Zankel.........................................................104,694 (3) **
Thomas H. Nolan, Jr.......................................................75,000 (4) **
James R. Moore...........................................................149,960 (5) **
Hanh Kihara...............................................................70,831 (6) **
Dennis Klimmek............................................................83,130 (7) **
Anne Hoffman..............................................................53,050 (8) **
All directors and officers as a group (16 persons).....................2,169,235 (9) 11.85%
- ---------------------------------------------------------------------------------------------------------------------------------
** Less than 1%.
(1) Includes 140,000 shares owned by Mr. Bedford's children (as to which Mr.
Bedford has sole voting power and may be deemed to be the beneficial
owner), 1,490 shares held in trust for Mr. Bedford's grandchildren, and
83,750 shares of Common Stock subject to options which are currently
exercisable or will become exercisable within 60 days of March 15, 2001.
(2) Includes 50,000 shares subject to options that are currently exercisable or
will become exercisable within 60 days of March 15, 2001.
(3) Includes 8,991 partnership units convertible into 8,991 shares of Common
Stock and 50,000 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 15, 2001.
(4) Includes 50,000 shares subject to options that are currently exercisable or
will become exercisable within 60 days of March 15, 2001.
(5) Includes 41,250 shares subject to options that are currently exercisable or
will become exercisable within 60 days of March 15, 2001.
(6) Includes 11,250 shares subject to options that are currently exercisable or
will become exercisable within 60 days of March 15, 2001.
(7) Includes 27,500 shares subject to options that are currently exercisable or
will become exercisable within 60 days of March 15, 2001.
(8) Includes 18,750 shares subject to options that are currently exercisable or
will become exercisable within 60 days of March 15, 2001.
(9) Includes 8,991 partnership units convertible into 8,991 shares of Common
Stock and 417,750 shares subject to options which are currently exercisable
or will become exercisable within 60 days of March 15, 2001.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
FUNDING OF ACQUISITION, DISPOSITION AND DEVELOPMENT COSTS
Due to the Company's limited financial resources, its activities relating
to the acquisition of new properties, sales of Company owned real estate and
development of real property are currently performed by Bedford Acquisitions,
Inc., ("Bedford Acquisitions"), a corporation wholly owned by Peter B. Bedford,
the Company's Chairman and Chief Executive Officer, pursuant to a written
contract dated January 1, 1995. The contract provides that Bedford Acquisitions
is obligated to provide services to the Company with respect to the Company's
acquisition, disposition, development and financing activities, and that Bedford
Acquisitions is responsible for the payment of its expenses incurred in
connection therewith. Such expenses include certain costs incurred by the
Company on behalf of Bedford Acquisitions, including the cost of officers and
directors insurance coverage under the Company's insurance policy. Bedford
Acquisitions also paid one-half of Mr. Bedford's bonus ($100,000), one-half of
Mr. Moore's bonus ($87,500), and all compensation paid to Mr. Klimmek and Ms.
Hoffman in 2000. Bedford Acquisitions must submit to the Company a direct cost
estimate for the Company's approval relating to each acquisition, disposition or
development, setting forth the estimated timing and amount of all projected
Bedford Acquisitions costs relating to the acquisition or financing. Pursuant to
the contract, Mr. Bedford is obligated to make the payments of Bedford
Acquisitions' expenses described above if Bedford Acquisitions fails to make any
such payments in a timely fashion, provided that Mr. Bedford is not obligated to
pay any such amounts exceeding $1 million or following a termination of Bedford
Acquisitions' obligations based on the expiration or termination of the term of
the contract. The contract provides that Bedford Acquisitions is to be paid a
fee in an amount equal to the lesser of (i) (w) 1 1/2% of the purchase price of
property acquisitions, plus (x) 1 1/2% of the sale price of dispositions, plus
(y) 1 1/2% of the amount of any loans (less any third-party commissions) plus
(z) 5% of the total costs paid on each development project, or (ii) an amount
equal to (a) the aggregate amount of approved expenses funded by Bedford
Acquisitions through the time of such acquisition or financing minus (b) the
aggregate amount of fees previously paid to Bedford Acquisitions pursuant to
such arrangement. In no event will the aggregate amount of fees paid to Bedford
Acquisitions exceed the aggregate amount of costs funded by Bedford
Acquisitions. The agreement with Bedford Acquisitions will expire on January 1,
2003 unless earlier terminated by the Company.
For the year ended December 31, 2000, the Company had paid Bedford
Acquisitions an aggregate of approximately $2,430,682 for acquisition,
disposition and development activities performed pursuant to the foregoing
arrangements which was approximately $1,565,447 less than the sum of 1.5% of the
aggregate purchase price of acquired or sold properties and properties financed
plus 5% of development costs. The Company believes that since the fees charged
under the foregoing arrangements (i) have been and continue to be comparable to
those charged by other sponsors of real estate investment entities or other
third-party service providers and (ii) have been and continue to be charged only
for services on acquired,
sold, financed or developed properties, such fees were and continue to be
properly includable in direct acquisition costs or financing costs and
capitalized as part of the asset or financing activities. If the Company were to
discontinue this arrangement, its acquisition, disposition and development
activities would have to be paid by the Company, as incurred, out of cash from
operations or borrowings and certain of such costs would be reflected as
operating expenses in its statement of operations rather than being capitalized.
For example, without the described arrangement with Bedford Acquisitions, the
Company may have incurred substantial operating expenses relating to
acquisition, sale, financing and development activities. If the Company had
employed the same personnel and incurred the same expenses as Bedford
Acquisitions, net income and Funds from Operations for the year ended December
31, 2000 each would have been reduced by approximately $1,789,088 (or $0.10 per
common share assuming dilution) compared to the corresponding amounts actually
reported for that period. The Company intends to discontinue this fee
arrangement if and when its operating results permit it to sustain acquisition,
disposition and development activities internally. However, the termination of
this arrangement prior to that time would likely require the Company to decrease
its acquisition, disposition and development efforts, which could have a
material adverse effect on the Company's ability to grow.
OTHER TRANSACTIONS
Martin I. Zankel, a member of the Board of Directors of the Company, and
his associates provide legal services to the Company for which his firm was
paid, in the aggregate, $5,854 in 2000.
INDEBTEDNESS OF MANAGEMENT
In September 1995, the Company established a Management Stock Acquisition
program, which program was modified by the Board in 2000. Under the program,
options exercised by key members of management may be exercised and paid for
with a note payable to the Company. Each note is due the earlier of nine years
and nine months after the date of the option grant or within ninety days from
termination of employment, with interest payable quarterly. Mr. Bedford, Mr.
Moore and Ms. Kihara, all of whom are executive officers of the Company, have
exercised options in the aggregate for 85,000, 50,000 and 12,750 shares of
Common Stock, respectively, in exchange for notes totaling $1,081,300, $650,000
and $149,625, respectively. All of the notes are payable to the Company, bear
interest at 7.5% per annum, are full recourse and are secured in part by a
pledge to the Company of the Common Stock. As of February 28, 2001, $881,116,
$511,817 and $136,258, was the principal amount outstanding, respectively, under
the notes owed by Mr. Bedford, Mr. Moore and Ms. Kihara.
OTHER INFORMATION
A COPY OF THE COMPANY'S ANNUAL REPORT OR FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2000, MAY BE OBTAINED, WITHOUT CHARGE, BY WRITING TO DENNIS
KLIMMEK, GENERAL COUNSEL, BEDFORD PROPERTY INVESTORS, INC., 270 LAFAYETTE
CIRCLE, LAFAYETTE, CA 94549.
OTHER MATTERS
The Board of Directors knows of no matter to be presented at the Annual
Meeting other than those set forth in the Notice of Meeting and described in
this Proxy Statement. If, however, any other business should properly come
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in their discretion.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the annual meeting of
Stockholders to be held in 2002 must be received by the Company at its principal
executive offices no later than March 10, 2002 for inclusion in the Company's
Proxy Statement and form of proxy relating to that meeting. Such proposals must
meet the requirements of the rules of the Securities and Exchange Commission
relating to stockholder proposals.
By Order of the Board of Directors,
/s/ Dennis Klimmek
--------------------------------------
Dennis Klimmek
Secretary
April 10, 2001
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE
BEDFORD PROPERTY INVESTORS, INC.
The Audit Committee (the "Committee") of the Board of Directors (the
"Board") of Bedford Property Investors, Inc. (the "Company") will have the
oversight responsibility, authority and specific duties described below.
PURPOSE
- -------
The purpose of the Committee is to assist the Board in fulfilling its
responsibilities to oversee the Company's financial reporting process, including
monitoring the integrity of the Company's financial statements and the
independence and performance of the Company's outside auditors. It is the
responsibility of executive management of the Company to prepare financial
statements in accordance with generally accepted accounting principles and of
the Company's independent auditors to audit those financial statements. The
Committee's role includes a particular focus on the qualitative aspects of
financial reporting to shareholders and on company processes for the management
of business/financial risk and for compliance with significant applicable legal,
ethical and regulatory requirements.
MEMBERSHIP REQUIREMENTS
- -----------------------
The Committee will be comprised of the number of directors as determined by
the Board from time to time, such number not to be less than three (3)
directors, each of whom shall meet all applicable requirements of the New York
Stock Exchange (the "Exchange") with respect to independence, financial
literacy, accounting or related financial expertise, as well as any other
matters required by the Exchange. The members of the Committee will be elected
annually by the Board and will be listed in the annual report to the
shareholders. The Board will elect one of the members of the Committee to serve
as the Chairperson.
AUTHORITY
- ---------
Subject to the prior approval of the Board, the Committee is granted the
authority to investigate any matter or activity involving financial accounting
and financial reporting as well as the internal controls of the company. In that
regard, the Committee will have the authority to approve the retention of
external professionals to render advice and counsel in such matters. All
employees will be directed to cooperate with respect thereto as requested by
members of the Committee.
RESPONSIBILITIES
- ----------------
The following are the general responsibilities of the Committee and are set
forth only for its guidance. The Committee may diverge from these
responsibilities and may assume other responsibilities as it deems necessary or
appropriate in carrying out its oversight functions. The Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes in compliance with applicable NYSE Audit Committee
Requirements to the Board for approval.
2. Review the Company's accounting and financial reporting controls with
management and independent accountants. Obtain annually in writing from
the independent accountants their letter as to the adequacy of such
controls.
3. Review significant accounting and reporting principals, practices and
procedures applied by the Company in preparing its financial statements
with the Company's management and independent accountants. Discuss with
the independent accountants their judgments about the quality, not just
the acceptability, of the Company's accounting principles used in
financial reporting.
4. Review the scope and general extent of the independent accountants'
annual audit. The Committee's review should include an explanation from
the independent accountants of the factors considered by them in
determining the audit scope, including the major risk factors.
5. Inquire as to the independence of the independent accountants and
obtain from them, at least annually, a formal written statement
delineating all relationships between the independent accountants and
the Company as contemplated by Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees. The Committee is
responsible for actively engaging in dialogue with the outside auditors
with respect to any disclosed relationships or services that may impact
the objectivity and independence of the outside auditor, and for
recommending that the Board take appropriate action in response to the
outside auditors' report to satisfy itself of the outside auditors'
independence.
6. Establish an arrangement with the independent accountants whereby they
advise the Committee and management of any matters identified through
procedures followed for interim quarterly financial statements, and
that notification as required under standards for communication with
audit committees is to be made prior to the related press release or,
if not practicable, prior to filing Form 10-Q. Also receive a written
confirmation provided by the independent
accountants at the end of each of the first three quarters of the year
that they have nothing to report to the Committee, if that is the case,
or the written enumeration of required reporting issues.
7. At the completion of the annual audit, review the following with
management and the independent accountants:
o The annual financial statements and related footnotes and
financial information to be included in the Company's annual
report to shareholders and on Form 10-K.
o Results of the audit of the financial statements and the
related report thereon and, if applicable, a report on changes
during the year in accounting principles and their
application.
o Significant changes to the audit plan, if any, and any serious
disputes or difficulties with management encountered during
the audit.
o Other communications as required to be communicated by the
independent accountants by Statement of Auditing Standards
(SAS) 61, as amended by SAS 90, relating to the conduct of
audit. Further, receive a written communication from the
independent accountants concerning the quality of the
Company's accounting principles, as outlined in SAS 61 and
that they concur with management's representation concerning
audit adjustments.
If deemed appropriate after such review and discussion,
recommend to the Board that the financial statements be included
in the Company's annual report on Form 10-K
8. After preparation by management and review by independent accountants,
approve the report required under SEC rules to be included in the
Company's annual proxy statement as an appendix every three years.
9. Meet with management and the independent accountants to discuss any
relevant significant recommendations that the independent accountants
may have, particularly those characterized as "material" or "serious".
10. Recommend to the Board the selection, retention or termination of the
Company's independent accounts.
11. Review with management and the independent accountants the methods used
to establish and monitor the Company's policies with respect to
unethical or illegal activities by Company employees that may have a
material impact on the financial statements.
MEETINGS
- --------
The Committee will meet at least four times annually. Content of the
agenda for each meeting should be cleared by the Committee Chairperson. The
Committee is to meet in separate executive sessions with the Chief Financial
Officer and independent accountants at least once each year and at other times
when considered appropriate.
- --------------------------------------------------------------------------------
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. 5055
-----
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
THE NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2.
1. Election of Directors FOR WHITHHELD Nominees:
(See list to the right) [ ] [ ] ---------
01. Peter B. Bedford
02. Anthony Downs
For, except vote withheld from the following 03. Anthony M. Frank
nominee(s): 04. Thomas H. Nolan Jr.
05. Martin I. Zankel, Esq.
------------------------------------------
2. Proposal to ratify the appointment of KPMG FOR AGAINST ABSTAIN
LLP as independent accountants, for the fiscal [ ] [ ] [ ]
year ending December 31, 2001.
Check this box if you have comments or a change [ ]
of address and use the back of this card.
Check this box if you wish to, attend and vote at [ ]
the meeting.
SIGNATURE(S) DATE
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NOTE: Your signature should conform with your name as printed above. If signing
as attorney, executor, administrator, trustee or guardian, please give your full
title. If stock is owned by a partnership or corporation, please indicate your
capacity in signing the proxy. If stock is held in joint partnership, all
co-owners must sign. Please sign, date, and return promptly.
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Detach Proxy Card Here If You Are Voting by Mail and Return in Enclosed Envelope
BEDFORD PROPERTY INVESTORS, INC.- ANNUAL MEETING - MAY 17, 2001
BEDFORD OFFERS PHONE OR INTERNET VOTING
24 hours a day, 7 days a week
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On a touch-tone phone. call toll-free 1- 877-779-8683. You will hear these
instructions:
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o Enter the last four digits from your social security number.
o Enter the control number from the box above, just below the
perforation.
o You will then have two options:
OPTION 1: To vote as the Board of Directors recommends on all
two proposals; or
OPTION 2: to vote on each proposal separately.
o Your vote will be repeated to you and you will be asked to confirm it.
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Log onto the Internet and type: http://www.eproxyvote.com/bed
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o Have your proxy card ready and follow the instructions.
o You will be able to elect to receive future mailings via the Internet.
Your electronic vote authorizes the proxies named on the reverse of this card to
vote your shares the same extent as if you marked, signed, dated and returned
the proxy card.
IF YOU HAVE VOTED BY PHONE OR INTERNET, PLEASE DO NOT RETURN THE PROXY CARD.
THANK YOU FOR VOTING!
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P OF BEDFORD PROPERTY INVESTORS, INC.
The undersigned, whose signature appears on the reverse, hereby appoints
R DENNIS KLIMMEK and HANH KIHARA, and each of them, proxies with full power of
substitution for and in the name of the undersigned to vote all the shares of
Common Stock of Bedford Property Investors, Inc., which the undersigned would
O be entitled to vote if personally present at the Annual Meeting of
Stockholders to be held on May 17, 2001, and at any and all adjournments
thereof, on all matters that may properly come before the meeting.
X
Your shares will be voted as directed on this card. If signed and no
direction is given for any item, it will be voted in favor of items 1 and 2.
Y
To vote by telephone or Internet, please see the reverse of this card. To
vote by mail, please sign and date this card on the reverse, tear off at the
perforation, and mail promptly in the enclosed postage-paid envelope.
If you have any comments or a change of address, mark the appropriate box on
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the reverse side and use the following space:
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YOUR VOTE IS IMPORTANT. BY RETURNING YOUR VOTING INSTRUCTIONS PROMPTLY, YOU CAN
AVOID THE INCONVENIENCE OF RECEIVING FOLLOW-UP MAILING PLUS HELP
THE COMPANY AVOID ADDITIONAL EXPENSES.
Detach Proxy Card Here If You Are Voting by Mail and Return in Enclosed Envelope
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