SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] 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 Section 240.14a-11c or Section 240.14a-12
EASTGROUP PROPERTIES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
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:
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(2) Aggregate number of securities to which transaction applies:
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(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 is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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EASTGROUP PROPERTIES, INC.
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
April 15, 2003
Dear Stockholder:
You are cordially invited to the annual meeting (the "Meeting") of
stockholders of EastGroup Properties, Inc. (the "Company"), to be held on May
29, 2003 at 9:00 a.m., Jackson time, at the Company's offices, 300 One Jackson
Place, 188 East Capitol Street, Jackson, Mississippi.
Stockholders will be asked to vote on the election of eight directors of
the Company and to transact such other business as may properly come before the
Meeting or any adjournment thereof.
The election of directors is important to you as a stockholder. Therefore,
whether or not you plan to attend the Meeting, I urge you to give your immediate
attention to voting. Please review the enclosed materials, sign and date the
enclosed proxy card and return it promptly in the enclosed postage-paid
envelope.
Very truly yours,
/s/ Leland R. Speed
LELAND R. SPEED
Chairman of the Board of Directors
EASTGROUP PROPERTIES, INC.
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 2003
To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of EastGroup Properties, Inc. (the "Company") will be held at the
Company's offices, 300 One Jackson Place, 188 East Capitol Street, Jackson,
Mississippi, on Thursday, May 29, 2003 at 9:00 a.m., Jackson time, for the
following purposes:
1. To elect eight directors of the Company; and
2. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 14, 2003 are
entitled to notice of and to vote at the Meeting and any adjournment thereof.
The directors sincerely desire your presence at the Meeting. However, so
that we may be sure your vote will be included, please sign and return the
enclosed proxy promptly. A self-addressed, postage-paid return envelope is
enclosed for your convenience.
The prompt return of your proxy will avoid delay and save the expense
involved in further communication. The proxy may be revoked by you at any time
prior to its exercise, and the giving of your proxy will not affect your right
to vote in person if you wish to attend the Meeting.
By Order of the Board of Directors
/s/ N. Keith McKey
N. KEITH MCKEY
Executive Vice President, Chief
Financial Officer,
Treasurer and Secretary
DATED: April 15, 2003
THIS IS AN IMPORTANT MEETING. STOCKHOLDERS ARE URGED TO VOTE BY SIGNING,
DATING AND RETURNING THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE TO WHICH NO
POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
EASTGROUP PROPERTIES, INC.
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
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PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 2003
The following information is being furnished to the stockholders of
EastGroup Properties, Inc. (the "Company") in connection with the solicitation
of proxies by the Board of Directors of the Company for use at its Annual
Meeting of Stockholders (the "Meeting"), to be held on May 29, 2003 at 9:00
a.m., Jackson time, at the Company's offices, 300 One Jackson Place, 188 East
Capitol Street, Jackson, Mississippi. A copy of the Company's Annual Report for
the fiscal year ended December 31, 2002 accompanies this Proxy Statement.
Additional copies of the Annual Report, Notice, Proxy Statement and Form of
Proxy may be obtained from the Company's Secretary, P.O. Box 22728, Jackson,
Mississippi 39225-2728. A COPY OF THE COMPANY'S FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ("SEC") IS AVAILABLE WITHOUT CHARGE UPON
WRITTEN REQUEST TO THE COMPANY'S SECRETARY AT THE COMPANY'S CORPORATE OFFICES,
VIA E-MAIL ADDRESSED TO INVESTOR@EASTGROUP.NET, FROM THE COMPANY'S WEB SITE AT
WWW.EASTGROUP.NET OR FROM THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT
WWW.SEC.GOV. This Proxy Statement, Annual Report and Form of Proxy will first be
sent to stockholders on or about April 25, 2003.
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy for the Meeting is being solicited by the directors of
the Company. Any person giving a proxy may revoke it at any time prior to the
exercise thereof by filing with the Secretary of the Company a written
revocation or duly executed proxy bearing a later date. The proxy may also be
revoked by a stockholder attending the Meeting, withdrawing the proxy and voting
in person.
The expense of preparing, printing and mailing the form of proxy and the
material used in the solicitation thereof will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited by the directors,
officers and regular employees of the Company (who will receive no additional
compensation therefor) by means of personal interview, telephone or facsimile.
It is anticipated that banks, brokerage houses and other institutions,
custodians, nominees, fiduciaries or other record holders will be requested to
forward the soliciting material to persons for whom they hold shares and to seek
authority for the execution of proxies; in such cases, the Company will
reimburse such holders for their charges and expenses. The Company has retained
InvestorCom, Inc. to assist with the solicitation of proxies and will pay
InvestorCom, Inc. a fee of $2,500 plus reimbursement of out-of-pocket expenses
for its services.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The record date for determining shares of common stock, par value $0.0001
per share, of the Company (the "Common Stock"), and shares of Series B
Cumulative Convertible Preferred Stock, par value $0.0001 per share (the "Series
B Preferred Stock"), entitled to vote at the Meeting has been fixed at the close
of business on
April 14, 2003. On such date there were 16,184,809 shares of Common Stock
outstanding and 2,800,000 shares of Series B Preferred Stock outstanding. The
holders of Common Stock are generally entitled to one vote for each share of
Common Stock on each matter submitted to a vote at a meeting of stockholders.
The holders of Series B Preferred Stock are generally entitled to 1.1364 votes
for each share of Series B Preferred Stock on each matter submitted to a vote at
a meeting of stockholders. Pursuant to the Company's Bylaws, directors will be
elected by a plurality of the votes with each share being voted for as many
individuals as there are directors to be elected and for whose election the
share is entitled to vote.
The presence, in person or by properly executed proxy, of the holders of
shares of Common Stock and Series B Preferred Stock entitled to cast a majority
of all the votes entitled to be cast at the Meeting is necessary to constitute a
quorum. Holders of shares of Common Stock and Series B Preferred Stock
represented by a properly signed, dated and returned proxy will be treated as
present at the Meeting for purposes of determining a quorum. Proxies relating to
"street name" shares that are voted by brokers will be counted as shares present
for purposes of determining the presence of a quorum but will not be treated as
votes cast at the Meeting as to any proposal as to which the brokers abstain.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the best of the Company's knowledge, no person or group (as those terms
are used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) beneficially owned, as of April 14, 2003, more than five
percent of the shares of Common Stock and shares of Series B Preferred Stock
outstanding, except as set forth in the following table.
AMOUNT AND PERCENT OF PERCENT OF
NAME AND ADDRESS NATURE OF SHARES SERIES B COMMON
OF BENEFICIAL OWNER BENEFICIALLY OWNED PREFERRED STOCK STOCK (1)
------------------- ------------------ --------------- ----------
Five Arrows Realty Securities II L.L.C. 2,800,000 shares
c/o Rothchild Realty Inc. of Series B
1251 Avenue of the Americas Preferred Stock
New York, New York 10020......................... (2) 100% --(2)
T. Rowe Price Associates, Inc.
100 East Pratt Street 1,597,000 shares of
Baltimore, Maryland 21202........................ Common Stock (3) -- 9.9%
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(1) Based on the number of shares of Common Stock outstanding as of April 14,
2003 which was 16,184,809 shares of Common Stock.
(2) The 2,800,000 shares of Series B Preferred Stock are convertible into
3,181,920 shares of Common Stock or 16.4% of the outstanding shares of
Common Stock as of April 14, 2003.
(3) Based upon a Statement on Schedule 13G filed with the SEC which indicated
that these securities are owned by various individual and institutional
investors, including T. Rowe Price Small-Cap Stock Fund, Inc. (which has
sole voting power with respect to 887,600 shares of Common Stock
representing 5.5% of the shares of Common Stock outstanding), for which T.
Rowe Price Associates, Inc. ("Price Associates") serves as investment
adviser with power to direct investments and/or sole power to vote the
securities. For purposes of the reporting requirements of the Exchange Act,
Price Associates is deemed to be a beneficial owner of such securities;
however, Price Associates expressly disclaims that it is, in fact, the
beneficial owner of such securities.
2
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information available to the Company
with respect to shares of Common Stock and Series B Preferred Stock owned by
each director, each nominee for director, each executive officer and all
directors, nominees and executive officers as a group, as of April 14, 2003.
NUMBER OF SHARES
OF SERIES B
NUMBER OF SHARES PERCENTAGE OF PREFERRED STOCK PERCENTAGE OF SHARES
DIRECTORS, NOMINEES OF COMMON STOCK SHARES OF BENEFICIALLY OF SERIES B
AND EXECUTIVE OFFICERS BENEFICIALLY OWNED COMMON STOCK (1) OWNED PREFERRED STOCK
---------------------- ------------------ ------------------- ---------------- --------------------
D. Pike Aloian................. 14,250(2) * 2,800,000(3) 100%
Alexander G. Anagnos........... 25,500(4) * 0 *
H.C. Bailey, Jr. .............. 27,852(5) * 0 *
Hayden C. Eaves, III........... 17,050(6) * 0 *
Fredric H. Gould............... 27,000(7) * 0 *
David M. Osnos................. 36,150(8) * 0 *
Leland R. Speed................ 327,442(9) 2.0% 0 *
David H. Hoster II............. 318,431(10) 1.9% 0 *
N. Keith McKey................. 139,078(11) * 0 *
John F. Coleman................ 23,556(12) * 0 *
C. Bruce Corkern............... 20,000(13) * 0 *
William D. Petsas.............. 32,000(14) * 0 *
All directors, nominees and
executive officers as a
group........................ 1,008,309(15) 6.0% 2,800,000(3) 100%
---------------
* Less than 1.0%.
(1) Based on the number of shares of Common Stock outstanding as of April 14,
2003 which was 16,184,809 shares of Common Stock.
(2) Includes 14,250 shares of Common Stock that Mr. Aloian has the right to
acquire under the Company's 2000 Directors' Stock Option Plan (the "2000
Directors' Plan") and the Company's 1991 Directors' Stock Option Plan, as
amended (the "1991 Directors' Plan").
(3) The 2,800,000 shares of Series B Preferred Stock are held by Five Arrows
Realty Securities II L.L.C. ("Five Arrows"), a Delaware limited liability
company in which Rothschild Realty Investors IIA L.L.C., the managing
member, has appointed Mr. Aloian, among others, as manager of Five Arrows.
Mr. Aloian disclaims beneficial ownership of all of the shares of Series B
Preferred Stock and the 3,181,920 shares of Common Stock (or 16.4% of the
outstanding shares of Common Stock) issuable upon conversion of the shares
of Series B Preferred Stock.
(4) Includes 25,500 shares of Common Stock that Mr. Anagnos has the right to
acquire under the 2000 Directors' Plan and the 1991 Directors' Plan.
(5) Includes (i) 13,500 shares of Common Stock that Mr. Bailey has the right to
acquire under the 2000 Directors' Plan and the 1991 Directors' Plan; (ii)
4,536 shares of Common Stock with respect to which Mr. Bailey has sole
voting and dispositive power; and (iii) 9,816 shares of Common Stock with
respect to which Mr. Bailey has shared voting and dispositive power.
3
(6) Includes (i) 9,750 shares of Common Stock that Mr. Eaves has the right to
acquire under the 2000 Directors' Plan; (ii) 4,000 shares of Common Stock
owned by Mr. Eaves and his spouse as co-trustees; (iii) 1,000 shares of
Common Stock owned by a family foundation of which Mr. Eaves is President;
(iv) 300 shares of Common Stock owned by a trust for the benefit of Mr.
Eaves' child; and (v) 500 shares of Common Stock owned by Mr. Eaves as
trustee.
(7) Includes 16,500 shares of Common Stock that Mr. Gould has the right to
acquire under the 2000 Directors' Plan and the 1991 Directors' Plan, and
4,500 shares of Common Stock owned by a limited partnership of which Mr.
Gould is a general partner and an executive officer and sole shareholder of
the managing general partner (Mr. Gould has shared voting and dispositive
control over these shares). Mr. Gould disclaims beneficial ownership as to
the 4,500 shares of Common Stock owned by the limited partnership.
(8) Includes 20,250 shares of Common Stock that Mr. Osnos has the right to
acquire under the 2000 Directors' Plan and the 1991 Directors' Plan.
(9) Includes 169,951 shares of Common Stock that Mr. Speed has the right to
acquire pursuant to exercisable options granted under the Company's 1994
Management Incentive Plan, as amended (the "1994 Incentive Plan"), and does
not include 27,288 shares of Common Stock beneficially owned by Mr. Speed's
spouse, as to which he disclaims beneficial ownership. Mr. Speed also owns
1,340 shares of 9.00% Series A Cumulative Redeemable Preferred Stock, par
value $0.0001 per share ("Series A Preferred Stock"), that do not have
voting rights at the Meeting.
(10) Includes 171,419 shares of Common Stock that Mr. Hoster has the right to
acquire pursuant to exercisable options granted under the 1994 Incentive
Plan and 42,000 shares of Common Stock granted as incentive restricted
shares under the 1994 Incentive Plan. Does not include 4,680 shares of
Common Stock beneficially owned by Mr. Hoster's wife and daughters, as to
which he disclaims beneficial ownership.
(11) Includes 43,907 shares of Common Stock that Mr. McKey has the right to
acquire pursuant to exercisable options granted under the 1994 Incentive
Plan and 30,000 shares of Common Stock granted as incentive restricted
shares under the 1994 Incentive Plan.
(12) Includes 6,500 shares of Common Stock that Mr. Coleman has the right to
acquire pursuant to exercisable options granted under the 1994 Incentive
Plan and 15,000 shares of Common Stock granted as incentive restricted
shares under the 1994 Incentive Plan.
(13) Includes 9,000 shares of Common Stock that Mr. Corkern has the right to
acquire pursuant to exercisable options granted under the 1994 Incentive
Plan, 10,000 shares of Common Stock granted as incentive restricted shares
under the 1994 Incentive Plan and 1,000 shares owned by Mr. Corkern's
daughter and son.
(14) Includes 10,000 shares of Common Stock that Mr. Petsas has the right to
acquire pursuant to exercisable options granted under the 1994 Incentive
Plan and 15,000 shares of Common Stock granted as incentive restricted
shares under the 1994 Incentive Plan.
(15) Includes 99,750 shares of Common Stock that directors of the Company have
the right to acquire under the 2000 Directors' Plan and the 1991 Directors'
Plan, 410,777 shares of Common Stock that officers of the Company have the
right to acquire pursuant to exercisable options granted under the 1994
Incentive Plan and 112,000 shares of Common Stock granted to officers as
incentive restricted shares under the 1994 Stock Option Plan.
4
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
NOMINEES
Pursuant to the Bylaws of the Company, the number of directors shall be
eight. All eight positions on the Board of Directors are to be filled by the
vote of the stockholders at the Meeting. Each person so elected shall serve
until the Company's next Annual Meeting of Stockholders and until his successor
is elected and qualified.
The Company's directors recommend a vote FOR the eight nominees listed
below. Except where authority to do so has been withheld, it is the intention of
the persons named in the accompanying Form of Proxy to vote at the Meeting FOR
these nominees. Each of the nominees listed below was elected a director at the
Company's 2002 Annual Meeting of Stockholders.
Although the directors do not contemplate that any of the nominees listed
below will be unable to serve, if such a situation arises prior to the Meeting,
the enclosed proxy will be voted in accordance with the best judgment of the
person or persons voting the proxy.
NAME, POSITION(S) AND
TENURE WITH THE COMPANY AGE PRINCIPAL OCCUPATION AND BUSINESS FOR THE PAST FIVE YEARS (1)
----------------------- --- -------------------------------------------------------------
D. Pike Aloian....................... 48 Managing Director of Rothschild Realty Inc. (real estate
Director since 1999 investment advisory services).
Alexander G. Anagnos................. 76 Financial Advisor with W. R. Family Associates.
Director since 1994
H.C. Bailey, Jr...................... 63 Chairman and President of H. C. Bailey Company (real estate
Director since 1980 development and investment).
Hayden C. Eaves, III................. 57 President of Hayden Holdings, Inc. (real estate investment)
Director since March 2002 since 1995; Managing Director of Investment Development
Services, Inc. (real estate management) since 1996.
Fredric H. Gould..................... 67 General Partner of Gould Investors L.P.; Chairman of BRT
Director since 1998 Realty Trust; Chairman of One Liberty Properties, Inc.
David H. Hoster...................... 57 Chief Executive Officer of the Company since 1997 and
Director and President President since 1993; Executive Vice President of the Company
since 1993, Chief Executive until 1993.
Officer since 1997
David M. Osnos....................... 71 Of Counsel to (and, until December 31, 2002, partner in) the
Director since 1993 law firm of Arent Fox Kintner Plotkin & Kahn.
Leland R. Speed...................... 70 Chairman of the Board of the Company and Parkway Properties,
Director since 1978 and Inc. (2); Chief Executive Officer of the Company and Parkway
Chairman since 1983 Properties, Inc. until 1997.
---------------
(1) Unless otherwise stated, each nominee has held the positions indicated for
at least the past five years.
(2) Mr. Speed is not involved in the operation of the business of either company
on a day-to-day basis. Rather, he consults with management of both companies
on issues with respect to which such management seeks his advice and input.
He allocates his time between the two companies depending on which company
desires his input at a particular time.
5
OTHER DIRECTORSHIPS AND TRUSTEESHIPS
Directors and nominees to the Company's Board of Directors serve on the
Boards of Directors or the Boards of Trustees of the following publicly-held
companies:
NAME COMPANY
---- -------
D. Pike Aloian................................... Koger Equity, Inc.
Brandywine Realty Trust
Fredric H. Gould................................. BRT Realty Trust
One Liberty Properties, Inc.
David M. Osnos................................... VSE Corporation
Washington Real Estate Investment Trust
Leland R. Speed.................................. Parkway Properties, Inc.
COMMITTEES AND MEETING DATA
For 2002, the Audit Committee of the Company's Board of Directors consisted
of Messrs. Aloian, Gould and Osnos. The Audit Committee met four times during
the Company's 2002 fiscal year. The functions performed by this committee
consist principally of conferring with and reviewing the reports of the
Company's independent accountants and bringing to the entire Board of Directors
for review those items relating to audits or to accounting practices which the
Audit Committee believes merit such review. See " Audit Committee Report" below.
The Compensation Committee of the Company's Board of Directors during 2002
consisted of Messrs. Anagnos, Bailey and Eaves. Its function is to recommend
compensation levels for directors, review compensation levels for executive
officers and administer the 1994 Incentive Plan. The Compensation Committee met
five times during the Company's 2002 fiscal year.
For 2002, the Investment Committee of the Company's Board of Directors
consisted of Messrs. Bailey, Hoster and Speed. Its function is to approve any
purchase of a real estate asset or investment on which the total investment by
the Company does not exceed $7,500,000. The Investment Committee met five times
during the Company's 2002 fiscal year.
The Nominating and Corporate Governance Committee of the Company's Board of
Directors consisted of Messrs. Aloian, Bailey and Osnos during 2002. During
2002, the function of this committee was to establish qualifications for
membership on the Board of Directors, to consider and recommend candidates for
election to the Board and to recommend a candidate to fill the office of
Chairman of the Board. The Nominating Committee met once during the Company's
2002 fiscal year.
The Board of Directors held four meetings during the Company's 2002 fiscal
year. Each director attended at least 75% of the aggregate of the total number
of meetings of the Board of Directors and meetings held by all committees of the
Board of Directors on which he served.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is responsible for providing
independent, objective oversight of the Company's accounting functions and
internal controls. The Audit Committee is composed of three
6
directors, Messrs. Aloian, Gould and Osnos, each of whom is independent under
the current rules of the New York Stock Exchange. The Audit Committee operates
under a written charter approved by the Board of Directors.
Management is responsible for the Company's financial reporting process
including its system of internal controls, and for the preparation of
consolidated financial statements in accordance with accounting principles
generally accepted in the United States of America. The Company's independent
auditors are responsible for auditing those financial statements. Our
responsibility is to monitor and review these processes. It is not our duty or
our responsibility to conduct auditing or accounting reviews or procedures or to
determine that the Company's financial statements are complete and accurate and
are in accordance with accounting principles generally accepted in the United
States of America. This is the responsibility of management and the independent
auditor.
The Audit Committee has met and held discussions with management and the
independent accountants. Management represented to the Audit Committee that the
Company's consolidated financial statements were prepared in accordance with
accounting principles generally accepted in the United States of America, and
the Audit Committee has reviewed and discussed the consolidated financial
statements with management and the independent accountants. The Audit Committee
also discussed with the independent accountants the matters required by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
The Audit Committee received written disclosures 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 report of the independent accountants to the Audit
Committee, 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, 2002, to be filed with the Securities
and Exchange Commission.
THE AUDIT COMMITTEE
DAVID M. OSNOS
D. PIKE ALOIAN
FREDRIC H. GOULD
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that directors, officers and
more than 10 percent stockholders of the Company file reports with the SEC to
report a change in ownership within two business days following the day on which
the transaction occurs. During 2002, no officer or director of the Company was
late in filing a report under Section 16(a) except Hayden C. Eaves, III who was
six days late filing a Form 4 with respect to purchases of 3,700 shares of
Common Stock in April 2002.
7
EXECUTIVE OFFICERS
The following is a list of the Company's executive officers:
NAME, POSITION AND PRINCIPAL OCCUPATION AND BUSINESS
TENURE WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS
----------------------- --- ---------------------------------
Leland R. Speed...................... 70 See table under 'Nominees.'
Director since 1978 and
Chairman since 1983
David H. Hoster II................... 57 See table under 'Nominees.'
Director and President since 1993,
Chief Executive Officer since 1997
N. Keith McKey....................... 52 Executive Vice President of the Company since
Executive Vice President since 1993, Chief Financial Officer and Secretary since
1993, Chief Financial Officer and 1992 and Treasurer since 1997.
Secretary since 1992, Treasurer
since 1997
William D. Petsas.................... 45 Senior Vice President of the Company since 2000;
Senior Vice President since 2000 Vice President of ProLogis Trust (a real estate
investment trust that owns and operates
industrial properties) until 2000.
C. Bruce Corkern..................... 41 Senior Vice President and Controller of the
Senior Vice President and Company since 2000; Vice President of Finance of
Controller since 2000 Time Warner Cable (Jackson/Monroe Division) until
2000.
John F. Coleman...................... 43 Senior Vice President of the Company since 2001;
Senior Vice President Since 2001 Senior Vice President of Duke-Weeks Realty
Corporation (an industrial/office real estate
investment trust) until 2001.
There are no family relationships between any of the directors or executive
officers of the Company.
8
EXECUTIVE COMPENSATION
The following table summarizes, for the fiscal years ended December 31,
2002, 2001 and 2000, the amount of compensation paid by the Company to its Chief
Executive Officer and the four other most highly compensated executive officers
(the "Named Officers").
LONG TERM
COMPENSATION
-----------------------
AWARDS
-----------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
NAME AND ------------------- STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(3) OPTIONS(4) COMPENSATION(5)
------------------ ---- -------- -------- ---------- ---------- ---------------
Leland R. Speed........... 2002 $150,000 $ 22,500(1) -0- -0- $13,395
Chairman 2001 175,000 94,500(1) -0- -0- 9,850
2000 165,000 525,500(1)(2) -0- -0- 9,500
David H. Hoster II........ 2002 325,000 73,125(1) -0- -0- 17,237
President and Chief 2001 270,000 182,250(1) -0- -0- 14,281
Executive Officer 2000 255,000 210,375(1) 42,000 -0- 16,900
N. Keith McKey............ 2002 215,000 37,625(1) -0- -0- 16,424
Executive Vice
President, 2001 195,000 105,300(1) -0- -0- 13,441
Chief Financial Officer, 2000 185,000 122,100(1) 30,000 -0- 14,968
Treasurer and Secretary
John F. Coleman........... 2002 185,000 38,500 -0- -0- 5,900
Senior Vice President 2001(6) 180,000 19,000 15,000 15,000 352
William D. Petsas......... 2002 200,000 40,625 -0- -0- 16,123
Senior Vice President 2001 187,000 54,000 -0- -0- 11,867
2000(7) 170,000 55,250 15,000 15,000 4,642
---------------
(1) This is the amount of incentive compensation payable to the Named Officer
under the 1994 Incentive Plan. This amount was paid 60% in cash and 40% in
shares of Common Stock.
(2) Mr. Speed received a one-time cash award of $410,000 in lieu of an award of
incentive restricted shares granted to the remaining Named Officers.
(3) On December 5, 2000, the Compensation Committee of the Board of Directors
granted restricted shares to the Named Officers, effective as of January 1,
2000. Under these grants of restricted shares, employees' rights to the
restricted shares are conditioned on the Company's achievement of specified
performance goals. The Company's performance goal with respect to these
awards is the achievement of cumulative funds from operations ("FFO") for
the years 2000 through 2003 of $11.80 per share of Common Stock (10.6%
compounded growth). For the years 2000 through 2002, cumulative FFO was
$7.84 per diluted share. The employees' agreements provide that, if the
Company's cumulative FFO is $11.80 or greater by December 31, 2003, the
employees' interest in 40% of the restricted shares will become
nonforfeitable as of December 31, 2003 and 10% will become nonforfeitable as
of December 31 for each of the next six years, provided the employee is
still employed by the Company on the relevant vesting date. If the Company's
cumulative FFO is at least $11.60 but less than $11.80 as of December 31,
2003, 30% of the restricted shares will become nonforfeitable as of such
date and 11.67% will vest on December 31 of each of the next six years,
provided employee is still employed by the Company on the relevant vesting
date. If the Company's cumulative FFO is at least $11.40 but less than
$11.60 as of December 31, 2003, 20% becomes nonforfeitable as of such date
and 13.33% will vest on December 31 of each of the next six years, provided
employee is still employed by
9
the Company on the relevant vesting date. If the Company's cumulative FFO is
at least $11.20 but less than $11.40 as of December 31, 2003, 10% of the
restricted shares will become nonforfeitable as of December 31, 2003 and 15%
will vest on December 31 of each of the next six years, provided the
employee is still employed by the Company on the relevant vesting date. If
the Company's cumulative FFO is less than $11.20 as of December 31, 2003,
20% of the restricted shares will vest on December 31, 2005 and for the
following four years, provided the employee is still employed by the Company
on the relevant vesting date. If an employee's employment terminates before
December 31, 2009 by reason of death or disability, the employee's interest
in any forfeitable restricted shares may become nonforfeitable depending on
the number of restricted shares already vested or the number of years
elapsed since the date of grant. Dividends on the restricted shares will be
retained by the Company, to be paid only when the related shares become
nonforfeitable.
(4) These options were granted under the Company's 1994 Incentive Plan and
become exercisable with respect to one-half of the shares on the first
anniversary date of grant and one-half of the shares on the second
anniversary date of grant.
(5) This is the Company's discretionary contribution and matching contribution
to its 401(k) Plan for the Named Officer's benefit and the amount of premium
paid by the Company for group term life insurance on the Named Officer's
life.
(6) Mr. Coleman became an executive officer of the Company during 2001.
(7) Mr. Petsas became an executive officer of the Company during 2000.
Option Grants. No options were granted to the Named Officers during the
year ended December 31, 2002.
Option Exercises and Year End Values. No options were exercised by Mr.
Coleman during 2002. The following table shows the value realized by Messrs.
Speed, Hoster, McKey and Petsas upon the exercise of options, and the year-end
value of unexercised in-the-money options held by the Named Officers at the
fiscal year-end. Year-end values are based upon the closing price of shares of
Common Stock on the New York Stock Exchange, Inc. on December 31, 2002 ($25.50).
10
AGGREGATED OPTIONS EXERCISES WITH LAST FISCAL YEAR
AND FY-END OPTION VALUES
VALUE OF
UNEXERCISED IN-THE-
NUMBER OF UNEXERCISED MONEY
SHARES OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)
ACQUIRED VALUE ----------------------------- -------------------------
ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE(1) EXERCISABLE/UNEXERCISABLE
----------- -------- ----------------------------- -------------------------
Leland R. Speed................ 1,657 $21,508 169,951/0 $1,601,916/$0
Chairman
David H. Hoster II............. 23,796 $260,975 196,419/0 $1,428,703/$0
President and Chief Executive
Officer
N. Keith McKey................. 67,216 $805,453 77,784/0 $435,671/$0
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
John F. Coleman................ 0 N/A 7,500/7,500 $18,375/$18,375
Senior Vice President
William D. Petsas.............. 4,000 $19,848 11,000/0 $52,932/$0
Senior Vice President
---------------
(1) These options, both exercisable and unexercisable, represent options granted
to the Named Officer under the 1994 Incentive Plan.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors for 2002 consisted of
Messrs. Anagnos, Bailey and Eaves. The Compensation Committee believes that base
compensation to the executive officers of the Company should be commensurate
with salary levels for other real estate companies and the officer's level of
responsibility. The Compensation Committee considered a number of factors in
setting the base compensation of Mr. Hoster, the Company's Chief Executive
Officer, the most important of which were the level of compensation paid to the
chief executive officers of other real estate companies of comparable size, the
success of the Company's strategy of acquiring industrial properties and
developing industrial properties and his importance in delineating and
implementing the Company's future strategies.
The Compensation Committee has determined that the primary goals of the
Company's compensation policies should be as follows:
- To provide total compensation opportunities for executive officers which
are competitive with those provided to persons in similar positions with
which the Company competes for employees.
- To strengthen the mutuality of interest between management and
stockholders through the use of incentive compensation directly related
to corporate performance and through the use of the stock-based
incentives that result in increased Common Stock ownership by executive
officers.
The Compensation Committee believes that incentive compensation payable to
the executive officers of the Company should be based upon the Company's
performance and align the interests of management and the Company's
stockholders. In 1994, the Compensation Committee, in conjunction with an
independent compensation consultant, formulated the 1994 Incentive Plan. The
1994 Incentive Plan was approved by the Company
11
stockholders in December 1994. Under the 1994 Incentive Plan, each year the
Compensation Committee establishes a goal for funds from operations ("FFO") per
share, a minimum level for FFO per share below which incentive compensation
should not be paid, and an incentive award payout objective for each executive
officer. The Compensation Committee determined the FFO targets based upon its
analysis of the Company's internally projected financial results for 2002 and
the estimates of 2002 FFO prepared by independent securities analysts who
followed the Company. For 2002, 60% of the incentive award was paid in cash and
40% in shares of Common Stock. For 2002, the target bonus amounts were 60% of
total base salary for Messrs. Speed and McKey and 75% for Mr. Hoster. The
Compensation Committee believed that the stockholders of the Company would be
benefitted significantly if the FFO goal were met and would be further
benefitted if such goal were exceeded, and that management should be compensated
for the benefits derived by the Company's stockholders. The target bonus amounts
were set by the Compensation Committee after consultation with the compensation
consultant who helped the Compensation Committee formulate the 1994 Incentive
Plan.
The 2002 FFO goal, which was set by the Compensation Committee at the
beginning of the year, underestimated the depth of the nation's economic
slowdown during 2002. This sluggishness in the economy was the principal factor
in the Company's achievement of only 25% of its target bonus goal for the year.
In spite of the fact that the goal was below its target, it was largely
non-controllable by management as indicated above. The Company's total return to
stockholders was 19.3% and the Company compared favorably to both the S&P 500
and the NAREIT Equity Index as shown in the chart below. As much, the
Compensation Committee determined that each of Messrs. Speed, Hoster and McKey
should be paid 25% of the amount of incentive compensation provided by the above
formula, under which Messrs. Speed, Hoster and McKey received bonuses with
respect to 2002 of $22,500, $73,125 and $37,625, respectively, 60% paid in cash
and 40% paid in shares of Common Stock.
THE COMPENSATION COMMITTEE
ALEXANDER G. ANAGNOS
H. C. BAILEY, JR.
HAYDEN C. EAVES, III
This Compensation Committee Report shall not be deemed incorporated by
reference by any general statement incorporating by reference this document or
any portion thereof into any filing under the Securities Act of 1933, as
amended, or the Exchange Act and shall not otherwise be deemed filed under such
acts.
12
Performance Comparison. Set forth below is a line graph comparing the
percentage change in the cumulative return to stockholders on shares of Common
Stock over the five years ending December 31, 2002 against the cumulative return
of the Standard & Poor's 500 ("S&P 500"), and the Equity REIT Index prepared by
the National Association of Real Estate Investment Trusts ("NAREIT Equity").
[LINE GRAPH]
----------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------
The Company 100.00 91.60 99.66 129.46 144.35 171.70
----------------------------------------------------------------------------------
S&P 500 100.00 128.58 155.63 141.46 124.65 97.10
----------------------------------------------------------------------------------
NAREIT Equity 100.00 82.50 78.69 99.43 113.29 117.61
----------------------------------------------------------------------------------
Directors' Fees. Under the Company's standard compensation arrangements
with directors (except Mr. Speed and Mr. Hoster who are salaried officers),
directors are paid a monthly stipend of $1,500. In addition, they are paid
$1,000 plus reimbursement of expenses for attendance at each meeting of the
Board of Directors and $750 plus reimbursement of expenses for each meeting of a
committee established by the Board of Directors. Only one fee is paid in the
event that more than one meeting is held on a single day.
Directors' Stock Option Plan. At the 2000 annual meeting, the stockholders
of the Company approved the 2000 Directors' Plan which replaced the 1991
Directors' Plan. The 2000 Directors' Plan authorizes the issuance of options of
up to 150,000 shares of Common Stock to directors of the Company who are not,
and have not been for at least one year prior to the date of determination,
employees of the Company ("Non-Employee Directors"). Under the 1991 Directors'
Plan, each Non-Employee Director of the Company on March 15, 1991 was
automatically granted an option to purchase 7,500 shares of Common Stock. Under
the 2000 Directors' Plan, each person who first becomes a Non-Employee Director
after June 1, 2000 is automatically granted an option to purchase 7,500 shares
of Common Stock on the date the person becomes a Non-Employee Director, if such
shares of Common Stock are available. Each Non-Employee Director is also granted
an option to purchase 2,250 additional shares of Common Stock on the date of any
annual meeting at which such Non-Employee Director is reelected to the Board of
Directors. The option exercise price is the closing price of a share of Common
Stock if shares of Common Stock are listed on an exchange or the average between
the bid and the asked price for the date if the shares of Common Stock are
traded over-the-counter (or, if no shares of Common Stock were publicly traded
on that date, the preceding date that such shares of Common Stock were so
traded). Such options are
13
exercisable in full on the date of grant and expire ten years from the date of
grant, or, if earlier, six months after the termination of the optionee's
service as a Non-Employee Director, unless such service is terminated by reason
of death, in which case the optionee's legal representative shall have one year
in which to exercise the options.
No director exercised options under the 1991 Directors' Plan or 2000
Directors' Plan during 2002. On March 7, 2002, Mr. Eaves received an option to
purchase 7,500 shares of Common Stock at an exercise price of $24.89 per share.
On May 29, 2002, Messrs. Aloian, Anagnos, Bailey, Eaves, Gould and Osnos each
received an option to purchase 2,250 shares of Common Stock at an exercise price
of $24.02 per share.
EQUITY COMPENSATION PLANS
The following table summarizes information, as of December 31, 2002,
relating to equity compensation plans of the Company pursuant to which grants of
options, restricted stock or other rights to acquire shares may be granted from
time to time.
EQUITY COMPENSATION PLAN INFORMATION
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
NUMBER OF SECURITIES FUTURE ISSUANCE UNDER
TO BE ISSUED UPON WEIGHTED-AVERAGE EQUITY COMPENSATION
EXERCISE OF OUTSTANDING EXERCISE PRICE OF PLANS (EXCLUDING
OPTIONS, WARRANTS OUTSTANDING OPTIONS, SECURITIES
AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN (a))
PLAN CATEGORY (a) (b) (c)
------------- ----------------------- -------------------- ------------------------
Equity compensation plans approved by
security holders................... 672,954 $18.639 273,110
Equity compensation plans not
approved by security holders....... -- -- --
------- ------- -------
Total.............................. 672,954 $18.639 273,110
======= ======= =======
CERTAIN TRANSACTIONS AND RELATIONSHIPS
Cost Sharing Arrangement with Parkway Properties, Inc. Currently, Parkway
Properties, Inc. and the Company equally share the services and expenses of the
Chairman of the Board of Directors. These services and expenses include rent for
office and storage space, administrative costs, insurance benefits,
entertainment and travel expenses, and the salary and benefits associated with
the Chairman's administrative assistant. For the year ended December 31, 2002,
EastGroup's share for these services and expenses totaled approximately $40,000.
EastGroup also leases 12,000 square feet of space for its executive offices in
Jackson, Mississippi in a building owned by Parkway. EastGroup paid Parkway
$203,000 in rent for this space for the year ended December 31, 2002.
Change in Control Agreements. The Company is a party to a Change in
Control Agreement with each of Messrs. Speed, Hoster, McKey, Coleman and Petsas
(the "Executives"). These agreements provide that if an Executive is terminated
or leaves the Company's employment for certain reasons during the 36-month
period with respect to Messrs. Speed, Hoster and McKey and the 18-month period
with respect to Messrs. Coleman and Petsas, following a Change in Control, the
Company will pay the Executive a lump sum benefit of 2.99 times in the cases of
Messrs. Speed, Hoster and McKey and 1.5 times in the cases of Messrs. Coleman
and Petsas, the average of the Executive's salary and accrued bonus for the
three calendar years that ended immediately before (or coincident with) the
Change in Control (the "Average Annual Compensation"). The Change in Control
14
Agreement also gives the Executive the ability to leave the employment of the
Company at any time during the six-month period following a Change in Control,
in which case the Executive will receive severance payments from the Company for
a period of 36 months in the cases of Messrs. Speed, Hoster and McKey and 18
months in the cases of Messrs. Coleman and Petsas equal to one-twelfth of the
Executive's Average Annual Compensation; provided that if the Executive receives
any remuneration in the form of wages, salary or consulting fees from another
employer or income from self-employment during the 36-month (in the case of
Messrs. Speed, Hoster and McKey) or 18-month (in the case of Messrs. Coleman and
Petsas) severance pay period, the Company's obligation under this sentence shall
be reduced by one-half of the amount of such remuneration. Change in Control is
defined in such agreement as (i) any change in control of a nature that would be
required to be represented under the Exchange Act proxy rules; (ii) any person
acquiring beneficial ownership of securities representing 30 percent or more of
the combined voting power of the Company's outstanding securities; (iii) certain
changes in the Company's Board of Directors; (iv) certain mergers; or (v) the
approval of a plan of liquidation by the Company.
PROPOSAL NO. 2 -- OTHER MATTERS
The management of the Company does not know of any other matters to come
before the Meeting. However, if any other matters come before the Meeting, it is
the intention of the persons designated as proxies to vote in accordance with
their judgment on such matters.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed KPMG LLP, independent public
accountants, to act as auditors for the fiscal year ending December 31, 2003. A
representative of KPMG LLP is expected to be present at the Meeting and will
have an opportunity to make a statement, if he so desires, and will be available
to respond to appropriate questions.
During the fiscal year ended December 31, 2002, KPMG LLP provided various
audit and non-audit services to the Company as follows:
Audit Fees. The aggregate fees billed to the Company by KPMG LLP during
the fiscal year 2002 for audit of the Company's annual financial statements and
review of those financial statements in the Company's quarterly reports on Form
10-Q totaled $173,150.
Financial Information Systems Design and Implementation Fees. KPMG LLP did
not render information technology services to the Company during the fiscal year
ended December 31, 2002.
All Other Fees. The aggregate fees billed by KPMG LLP for professional
services rendered to the Company during fiscal year 2002, other than the audit
services referred to above, were $100,200 for tax preparation and tax consulting
services.
The Audit Committee of the Board has considered whether provision of the
non-audit related services described above is compatible with maintaining the
independent accountants' independence and has determined that those services
have not adversely affected KPMG LLP's independence.
15
STOCKHOLDER PROPOSALS FOR THE
2004 ANNUAL MEETING OF STOCKHOLDERS
PROPOSALS FOR THE COMPANY'S PROXY MATERIAL
Any Company stockholder who wishes to submit a proposal for presentation at
the Company's 2004 Annual Meeting of Stockholders must submit such proposal to
the Company at its office at 300 One Jackson Place, 188 East Capitol Street,
Jackson, Mississippi 39201, Attention: Secretary, no later than December 26,
2003, in order to be considered for inclusion, if appropriate, in the Company's
proxy statement and form of proxy relating to its 2004 Annual Meeting of
Stockholders.
PROPOSALS TO BE INTRODUCED AT THE MEETING BUT NOT INTENDED TO BE INCLUDED IN THE
COMPANY'S PROXY MATERIAL
For any stockholder proposal to be presented in connection with the 2004
Annual Meeting of Stockholders, including any proposal relating to the
nomination of a director to be elected to the Board of Directors of the Company,
a stockholder must give timely written notice thereof in writing to the
Secretary of the Company in compliance with the advance notice and eligibility
requirements contained in the Company's Bylaws. To be timely, a stockholder's
notice must be delivered to the Secretary at the principal executive offices of
the Company not less than 60 days and not more than 90 days prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of the annual meeting is advanced by more than 30 days
or delayed by more than 60 days from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the 90th day
prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made. The
notice must contain specified information about each nominee or the proposed
business and the stockholder making the nomination or proposal.
In the event that the number of directors to be elected to the Board of
Directors is increased and there is no public announcement naming all of the
nominees for director or specifying the size of the increased Board of Directors
made by the Company at least 70 days prior to the first anniversary of the
preceding year's annual meeting, a stockholder's notice will be considered
timely, but only with respect to nominees for any new positions created by such
increase, if the notice is delivered to the Secretary at the principal executive
offices of the Company not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
Company.
Based upon a meeting date of May 29, 2004 for the 2004 Annual Meeting of
Stockholders, a qualified stockholder intending to introduce a proposal or
nominate a director at the 2004 Annual Meeting of Stockholders should give
written notice to the Company's Secretary not later than March 30, 2004 and not
earlier than February 28, 2004.
The advance notice provisions in the Company's Bylaws also provide that, in
the case of a special meeting of stockholders called for the purpose of electing
one or more directors, a stockholder may nominate a person or persons (as the
case may be) for election to such position if the stockholder's notice is
delivered to the Secretary at the principal executive offices of the Company not
earlier than the 90th day prior to the special meeting and not later than the
close of business on the later of the 60th day prior to the special meeting or
the 10th day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting.
16
The specific requirements of these advance notice and eligibility
provisions are set forth in Article II, Section 12 of the Company's Bylaws, a
copy of which is available upon request. Such requests and any stockholder
proposals should be sent to the Secretary of the Company at 300 One Jackson
Place, 188 East Capitol Street, Jackson, Mississippi 39201.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ N. Keith McKey
N. KEITH MCKEY
Executive Vice President, Chief
Financial Officer, Treasurer and
Secretary
17
PROXY
EASTGROUP PROPERTIES, INC.
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints DAVID H. HOSTER II and N. KEITH McKEY, or either
of them, Proxies for the undersigned, each with full power of substitution, and
hereby authorizes them to represent and to vote all shares of common stock,
$0.0001 par value per share, of EastGroup Properties, Inc. (the "Company"), and
all shares of Series B cumulative convertible preferred stock, par value $0.0001
per share, of the Company which the undersigned would be entitled to vote at the
Annual Meeting of Stockholders to be held at the Company's offices, 300 One
Jackson Place, 188 East Capitol Street, Jackson, Mississippi, on Thursday, May
29, 2003, at 9:00 a.m., Jackson time, or any adjournment or postponement
thereof, and directs that the shares represented by this Proxy shall be voted as
indicated on the reverse.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD IN THE
ACCOMPANYING POSTAGE-PAID ENVELOPE.
(Continued and to be signed on the reverse side.)
Has Your Address Changed? Do You Have Any Comments?
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
Please mark your vote as in this example. [X]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE MATTER INDICATED IN 1 BELOW AND WILL BE VOTED IN THE DISCRETION OF
THE PROXIES NAMED HEREIN WITH RESPECT TO ANY MATTERS REFERRED TO IN 2 BELOW. YOU
ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, BUT YOU
NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN
AND RETURN THIS CARD.
1. ELECTION OF DIRECTORS
[ ] FOR ALL [ ] WITHHOLD FROM [ ] FOR ALL EXCEPT
NOMINEES ALL NOMINEES
Nominees: D. Pike Aloian; Alexander G. Anagnos; H. C. Bailey, Jr.;
Hayden C. Eaves, III; Fredric H. Gould; David H. Hoster II; David M.
Osnos; and Leland R. Speed.
----------------------------------------------------------------------
For all nominees, except as written above.
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
PLEASE SIGN EXACTLY AS NAME(S) APPEAR ON
STOCK CERTIFICATE(S). A corporation is
requested to sign its name by its President
or other authorized officer, with the office
held so designated. A partnership should
sign in the partnership name by an
authorized person. Executors, trustees,
administrators, etc. are requested to
indicate the capacity in which they are
signing. JOINT TENANTS SHOULD BOTH SIGN.
YOUR VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD
IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.
-------------------------------------------
Signature Date
-------------------------------------------
Signature Date