DEF 14A: Definitive proxy statements
Published on April 5, 2001
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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 Under Rule 14a-12
KIMCO REALTY CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(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:
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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:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
KIMCO REALTY CORPORATION
3333 NEW HYDE PARK ROAD
NEW HYDE PARK, NY 11042-0020
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 15, 2001
Notice is hereby given of, and you are cordially invited to attend the
2001 Annual Meeting of Stockholders (the "Meeting") of Kimco Realty Corporation,
a Maryland corporation (the "Company"), to be held on Tuesday, May 15, 2001, at
10 o'clock a.m. at 270 Park Avenue, 11th Floor, Room C, New York, NY 10017 for
the following purposes:
1. To elect directors to serve for a term of one year and until
their successors are duly elected and qualify;
2. To approve a recommendation by the Executive Compensation
Committee of the Board of Directors that the number of shares of
the Company's Common Stock, par value $.01 per share, subject to
Option under the Company's 1998 Equity Participation Plan be
increased by 3,000,000 shares;
3. To consider and vote upon a proposal to amend the charter of the
Company to permit the Board of Directors to change the number of
authorized shares of stock of the Company; and
4. To transact such other business as may properly come before the
Meeting or any adjournment(s) or postponement(s) thereof.
Only common stockholders of record at the close of business on April 5,
2001, will be entitled to vote at the Meeting or any adjournment(s) or
postponement(s) thereof.
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING IN PERSON, PLEASE SIGN
AND DATE THE ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS,
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE OR ALTERNATIVELY, YOU MAY VOTE
BY TELEPHONE OR BY INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Bruce M. Kauderer
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Bruce M. Kauderer
Secretary
April 10, 2001.
KIMCO REALTY CORPORATION
3333 NEW HYDE PARK ROAD, NEW HYDE PARK, NY 11042-0020
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PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
to be held on May 15, 2001
This Proxy Statement is furnished to common stockholders of Kimco Realty
Corporation, a Maryland corporation (the "Company"), in connection with the
solicitation of proxies in the form enclosed herewith for use at the 2001 Annual
Meeting of Stockholders (the "Meeting") of the Company to be held on Tuesday,
May 15, 2001, at 10 o'clock a.m. for the purposes set forth in the Notice of
Annual Meeting of Stockholders.
This solicitation is made by the Company on behalf of the Board of
Directors of the Company (the "Board of Directors" or the "Board"). Costs of
this solicitation will be borne by the Company. Directors, officers and
employees of the Company and its affiliates may also solicit proxies by
telephone, telegraph, fax or personal interview. The Company will reimburse
banks, brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy material to stockholders.
The Company's Annual Report for the calendar year ended December 31,
2000, has been mailed with this Proxy Statement. This Proxy Statement and the
enclosed form of proxy were mailed to stockholders on or about April 12, 2001.
The principal executive offices of the Company are located at 3333 New Hyde Park
Road, New Hyde Park, New York 11042-0020; telephone (516) 869-9000.
Holders of record of the Common Stock of the Company, par value $.01 per
share (the "Common Stock"), as of the close of business on the record date,
April 5, 2001, are entitled to receive notice of, and to vote at, the Meeting.
The outstanding Common Stock constitutes the only class of securities entitled
to vote at the Meeting, and each share of Common Stock entitles the holder
thereof to one vote. At the close of business on April 5, 2001, there were
63,526,737 shares of Common Stock issued and outstanding.
Shares represented by proxies in the form enclosed, if such proxies are
properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned form of
proxy, the shares will be voted FOR the election of all nominees for Director
(See Proposal 1), FOR the recommendation by the Executive Compensation Committee
of the Board of Directors that the shares of the Company's Common Stock subject
to Option under the Company's 1998 Equity Participation Plan (the "Equity
Participation Plan") be increased by 3,000,000 shares (See Proposal 2) and FOR
the proposed amendment of the Company's charter to permit the Board of Directors
to change the number of authorized shares of stock of the Company (See Proposal
3). To be voted, proxies must be filed with the Secretary of the Company prior
to voting. Proxies may be revoked at any time before exercise by filing a notice
of such revocation, by filing a later dated proxy with the Secretary of the
Company or by voting in person at the Meeting. Dissenting stockholders will not
have rights of appraisal with respect to any matter to be acted upon at the
Meeting.
Under Maryland law, shares represented by proxies that reflect
abstentions or "broker non-votes" (i.e., shares held by a broker or nominee
which are represented at the Meeting, but with respect to which such broker or
nominee is not empowered by the beneficial owner of the stock to vote on a
particular proposal) will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum.
1
PROPOSAL 1
Election of Directors
The Company's By Laws provide that all directors be elected at each
annual meeting of stockholders. Pursuant to the Company's charter and such By
Laws, the Directors have fixed the number of directors to be elected at seven.
The persons named as proxies in the accompanying form of proxy intend to vote in
favor of the election of the seven nominees for director designated below, all
of whom are presently directors of the Company, except for David B. Henry who
joined the Company during April 2001, to serve until the next annual meeting of
stockholders and until their respective successors are duly elected and qualify.
It is expected that each of these nominees will be able to serve, but if any
such nominee is unable to serve, the proxies may vote for another person
nominated by the Board of Directors or the Board may amend the By Laws to reduce
the number of directors to be elected at the meeting.
Information Regarding Nominees (as of April 5, 2001)
Present Principal Occupation or
Name Age Employment and Five-Year Employment History
---- --- -------------------------------------------
Martin S. Kimmel(2)(3)(4) 85 Chairman (Emeritus) of the Board of
Directors of the Company since November
1991; Chairman of the Board of Directors
of the Company for more than five years
prior to such date. Founding member of the
Company's predecessor in 1966.
Milton Cooper(2)(3)(4) 72 Chairman of the Board of Directors of the
Company since November 1991; Director and
President of the Company for more than
five years prior to such date. Founding
member of the Company's predecessor in
1966.
Richard G. Dooley(1)(3)(4) 71 Director of the Company since December 1991.
Consultant to, and from 1978 to 1993,
Executive Vice President and Chief
Investment Officer of Massachusetts Mutual
Life Insurance Company.
Michael J. Flynn(2) 65 Vice Chairman of the Board of Directors of
the Company since January 1996 and, since
January 1997, President and Chief
Operating Officer; Director of the Company
since December 1991. Chairman of the Board
and President of Slattery Associates, Inc.
for more than five years prior to joining
the Company in 1996.
Joe Grills(1)(3)(4) 66 Director of the Company since January 1997.
Chief Investment Officer for the IBM
Retirement Funds from 1986 to 1993.
David B. Henry 52 Chief Investment Officer of the Company
since April 2001. Prior to joining the
Company, Mr. Henry was Chief Investment
Officer of G.E. Capital Real Estate since
1997 and held various positions at G.E.
Capital for more than five years prior to
1997.
Frank Lourenso (1)(3)(4) 60 Director of the Company since December 1991.
Executive Vice President of J.P. Morgan
("J.P. Morgan", and successor by merger to
The Chase Manhattan Bank and Chemical
Bank, N.A.) since 1990. Senior Vice
President of J.P. Morgan for more than
five years prior to that time.
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(1) Member of Audit Committee.
(2) Member of Executive Committee.
(3) Member of Executive Compensation Committee.
(4) Member of Nominating Committee.
2
Mr. Cooper is also a director of Getty Realty Corp. and Blue Ridge Real
Estate/Big Boulder Corporation and a trustee of MassMutual Corporate Investors
and MassMutual Participation Investors. He also serves as a member of the Board
of Governors of the National Association of Real Estate Investment Trusts.
Mr. Dooley is also a director of Advest Group, Inc., Hartford Steam
Boiler Inspection and Insurance Co. and Jefferies Group, Inc. and a trustee of
MassMutual Corporate Investors and MassMutual Participation Investors.
Mr. Flynn is also Chairman of the Board of Directors of Blue Ridge Real
Estate/Big Boulder Corporation.
Mr. Grills is also a Director of certain Merrill Lynch and Mercury HW
Mutual Funds, Duke Management Company and the LaSalle Street Fund. He also
serves as a member of the Investment Advisory Committees of the State of New
York Common Retirement Fund and the Virginia Retirement System. Mr. Grills is a
member of the Financial Executives Institute Committee on Investment of Employee
Benefit Assets, its executive committee and is a former chairman of that
committee.
All directors of the Company serve terms of one year and until the
election and qualification of their respective successors. All of the Directors
of the Board were in attendance at each of the four regular meetings of the
Board of Directors held during 2000, which occurred on March 1, May 4, July 26
and November 1, and at the 2000 Annual Meeting of Stockholders held on April 5,
2000.
Committees of the Board of Directors
Audit Committee. The Board of Directors has established an Audit
Committee consisting of three independent Directors to make recommendations
concerning the engagement of independent public accountants, review with the
independent public accountants the plans and results of the audit engagement,
approve professional services provided by the independent public accountants,
review the independence of the independent public accountants, consider the
range of audit and non-audit fees and review the adequacy of the Company's
internal accounting controls. Two formal meetings of the Audit Committee were
held during 2000 on March 1, 2000 and November 1, 2000, in addition; the Audit
Committee held a meeting on February 15, 2001.
Executive Committee. The Executive Committee has been granted the
authority to acquire and dispose of real property, to borrow money on behalf of
the Company and to authorize, on behalf of the full Board of Directors, the
execution of certain contracts and agreements (except for contracts between the
Company and KC Holdings, Inc. -- see "Compensation Committee Interlocks and
Insider Participation"). The Executive Committee convened twice during 2000, on
May 4, 2000 and November 1, 2000.
Executive Compensation Committee. The Board of Directors has established
an Executive Compensation Committee to determine compensation for the Company's
executive officers, in addition to administering the Company's Equity
Participation Plan (as defined herein). One meeting of the Executive
Compensation Committee was held during 2000, on March 1, 2000; in addition; the
Executive Compensation Committee held a meeting on February 15, 2001.
Nominating Committee. The Board of Directors has established a
Nominating Committee which met on February 15, 2001. The functions of the
Nominating Committee include recommending candidates for annual election to the
Board of Directors and to fill vacancies on the Board of Directors that may
arise from time to time. The Nominating Committee will consider all candidates
recommended by shareholders in accordance with the procedure established in the
Company's By Laws which requires recommendations to be submitted in writing
ninety days in advance of the annual meeting of shareholders. Such
recommendations should include the name and address and other pertinent
information about the candidate as is required to be included in the Company's
proxy statement. Recommendations should be submitted to the Secretary of the
Company.
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Each of the Directors comprising these various Committees of the Board
of Directors was in attendance at all meetings of such Committees held on the
dates indicated.
Compensation of Directors
Members of the Board of Directors and Committees thereof who are not
also employees of the Company ("Non-employee Directors") receive an annual fee
of $24,000, plus fees of $2,000 for attending each regular or special meeting of
the full Board. The Non-employee Directors, other than Mr. Kimmel, receive $500
for attending each Executive Compensation Committee and Nominating Committee
meeting and $1,000 for attending each Audit Committee Meeting. The Non-employee
Directors who are members of the Audit Committee also receive an annual fee of
$4,000. In accordance with the Company's Equity Participation Plan (as defined
herein), the Non-employee Directors may be granted awards of deferred stock
("Deferred Stock") in lieu of directors' fees. Unless otherwise provided by the
Board, a grantee of Deferred Stock shall have no rights as a Company stockholder
with respect to such Deferred Stock until such time as the Common Stock
underlying the award has been issued. Pursuant to such arrangements, each of
Messrs. Kimmel, Dooley, Grills and Lourenso received directors' fees in cash of
$16,000, $23,500, $23,500 and $23,500, respectively, during 2000. During 2000,
Messrs. Kimmel, Dooley, Grills and Lourenso each received Deferred Stock awards
valued at $16,000, in lieu of directors' fees and meeting fees. Employees of the
Company who are also Directors are not paid any directors' fees.
During 1998 and 1999, the Company granted each Non-employee Director
options to acquire 7,500 shares of Common Stock at $37.375 and $32.00 per share,
respectively, the market prices on the dates of such option grants. During 2000,
the Company granted each Non-employee Director options to acquire 7,500 shares
of Common Stock at $40.75 per share. See "Executive Compensation and
Transactions with Management and Others - Executive Compensation and Employment
Contracts" for information concerning stock options granted to Mr. Cooper, Mr.
Flynn and Mr. Kornwasser. The Company intends to grant Non-employee Directors,
options to acquire an additional 7,500 shares during 2001 at the then current
market price.
Mr. Kimmel received $50,000 during 2000 as payment for consulting
services rendered to, and reimbursement of certain expenses incurred on behalf
of, the Company.
Vote Required
Assuming the presence of a quorum, a plurality of all the votes cast by
the holders of shares of Common Stock present, in person or by proxy, and
entitled to vote at the Company's Annual Meeting will be sufficient to elect a
nominee as a director. Accordingly, abstentions or broker non-votes as to the
election of directors will not affect the election of the candidates receiving
the plurality of the votes cast at the Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMEND THAT YOU VOTE FOR ALL OF
THE NOMINEES SET FORTH IN THIS PROXY STATEMENT.
4
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information available to the
Company as of April 5, 2001, with respect to shares of its Common Stock and
Depositary Shares representing its Class A, Class B, Class C and Class D
Preferred Stock (i) held by those persons known to the Company to be the
beneficial owners (as determined under the rules of the U.S. Securities and
Exchange Commission, the "SEC") of more than 5% of such shares and (ii) held,
individually and as a group, by the directors and executive officers of the
Company:
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* Less than 1%
5
(1) Includes 1,070,889 shares held by Mr. Cooper as trustee for the benefit of
Mr. Kimmel's son. Does not include 256,573 shares held by adult members of
Mr. Cooper's family, as to all of which shares Mr. Cooper disclaims
beneficial ownership.
(2) Includes 19,100 depositary shares held by Mr. Cooper as trustee for the
benefit of Mr. Kimmel's son. Does not include 1,000 depositary shares held
by Mrs. Shirley Cooper, wife of Mr. Milton Cooper, as to all of which
shares Mr. Cooper disclaims beneficial ownership.
(3) Does not include 1,070,889 shares held in trust by Mr. Cooper for Mr.
Kimmel's son or 1,300,828 shares held by Mrs. Helen Kimmel, his wife, as to
all of which shares Mr. Kimmel disclaims beneficial ownership. Also, does
not include 781,667 shares held by foundations and trusts for which Mrs.
Kimmel is a trustee, as to all of which shares Mr. Kimmel disclaims
beneficial ownership.
(4) All Depositary Shares and Percent of Class represent ownership of Class D
Preferred Stock.
(5) Does not include 2,736,617 shares held by Mr. Kimmel, her husband, or
1,070,889 shares held in trust by Mr. Cooper for Mr. Kimmel's son, as to
all of which shares Mrs. Kimmel disclaims beneficial ownership.
(6) Does not include 1,090,099 shares held by KC Holdings, Inc., a related,
private corporation in which Mr. Cooper holds a controlling interest. See
"Compensation Committee Interlocks and Insider Participation - Transactions
with KC Holdings, Inc."
Executive Compensation and Transactions with Management and Others
Executive Officers. Reference should be made to the Company's annual
report on Form 10-K for the year ended December 31, 2000, incorporated herein by
reference, following Part I, Item IV, for information with respect to the
executive officers of the Company.
Executive Compensation. The following table sets forth the summary
compensation of the Chairman of the Board of Directors (and Chief Executive
Officer) and the four other most highly paid executive officers of the Company
for calendar years 2000, 1999 and 1998.
SUMMARY COMPENSATION TABLE
(1) No named officer received perquisites or other personal benefits
aggregating the lesser of 10% of annual salary and bonus or $50,000.
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(2) Options to acquire shares of Common Stock at exercise prices equal to the
fair market value on the dates of grant.
(3) The amounts shown represent the value of Company paid group term life
insurance premiums.
(4) See "Executive Compensation and Transactions with Management and Others -
Employment Contracts".
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on options to acquire shares of
the Company's Common Stock granted to the named executive officers during 2000.
(1) Assumed annual rates of stock price appreciation, as determined by the SEC,
for illustrative purposes only. Actual stock prices will vary from time to
time based upon market factors and the Company's financial performance. No
assurance can be given that such rates will be achieved.
(2) Options become exercisable one-third on each of the first three
anniversaries of the date of grant.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table provides information on options to acquire shares of
Common Stock exercised in 2000 by the named executive officers, and the value of
each such officer's unexercised options to acquire shares of Common Stock
outstanding at December 31, 2000.
(1) Based upon the closing price of the Company's Common Stock on the New York
Stock Exchange on December 31, 2000 of $44.1875 per share.
(2) See "Executive Compensation and Transactions with Management and Others -
Employment Contracts".
Employment Contracts. In November 1998, the Company entered into a new
five-year employment agreement with Mr. Michael J. Flynn pursuant to which Mr.
Flynn continues to serve as Vice Chairman of the Board of Directors and
President and Chief Operating Officer of the Company. In accordance with this
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employment agreement, Mr. Flynn (i) is to receive a base salary of $650,000 per
annum, (ii) shall be eligible to receive a bonus in such amounts, if any, as the
Board, in its sole discretion shall determine and (iii) shall be eligible to
receive grants of Common Stock of the Company or options with respect thereto,
in such amounts, if any, as the Board, in its sole discretion shall determine.
In June 1998, the Company entered into a three-year employment agreement
with Mr. Joseph K. Kornwasser, which expires on June 19, 2001, pursuant to which
Mr. Kornwasser was appointed as a director of the Board and began to serve as
Senior Executive Vice President of the Company. In accordance with this
employment agreement, Mr. Kornwasser is to receive $650,000 per annum ($425,000
base salary and $225,000 guaranteed bonus) as compensation for his services. The
agreement further provides that Mr. Kornwasser be granted options to acquire
250,000 shares of the Company's Common Stock at an exercise price of $37.437 per
share, the market price on the date of grant. These stock options are to be
considered qualified incentive stock options, as defined in and to the extent
permitted under the Company's Equity Participation Plan (as defined herein).
Options with respect to these shares shall vest in three equal installments upon
each of the first three anniversaries of the date of grant.
In June 1998, the Company entered into a three-year employment agreement
with Mr. Jerald Friedman, pursuant to which Mr. Friedman began to serve as
Executive Vice President of the Company. In accordance with this employment
agreement, Mr. Friedman was to receive $450,000 per annum ($300,000 base salary
and $150,000 guaranteed bonus) as compensation for his services. The agreement
further provides that Mr. Friedman be granted options to acquire 100,000 shares
of the Company's Common Stock at an exercise price of $37.437 per share, the
market price on the date of grant. These stock options are to be considered
qualified incentive stock options, as defined in and to the extent permitted
under the Company's Equity Participation Plan (as defined herein). Options with
respect to these shares shall vest in three equal installments upon each of the
first three anniversaries of the date of grant. In the event of, and depending
upon the reasons for, a termination of Mr. Friedman's employment with the
Company prior to such dates, (i) any such non-vested shares would become 100%
vested as of the termination date and (ii) Mr. Friedman would receive severance
in the amount equal to the base salary and bonus then in effect for the greater
of the balance of the term of this agreement or one year. In addition, in the
event that the Company determines to distribute to its stockholders equity
interests in one of its subsidiaries that is qualified as a real estate
investment trust and structured to be a so-called "leveraged REIT", Mr. Friedman
shall be entitled to receive options to acquire shares of common stock of such
subsidiary equal to 0.4% of the outstanding (not diluted) common shares of such
subsidiary immediately following their distribution to the Company's
stockholders. The exercise price of such options shall equal the distribution
value for tax purposes of the underlying shares at the time of distribution.
Such options shall otherwise be structured and exercisable with terms similar in
all material respects to the terms of the Equity Participation Plan (as defined
herein) of the Company. The Company shall undertake to cause such subsidiary to
effect the registration under the Securities Act of the shares issuable upon
exercise of such options, including resale thereof. Following any such
distribution to the Company's stockholders, Mr. Friedman's salary set forth
herein shall be apportioned between the Company and such subsidiary in the
manner determined by the Company.
In April 2000, the Company amended and restated the employment agreement
(the "Amended Agreement") with Mr. Friedman whereby effective January 1, 2000,
Mr. Friedman will also serve as President of the Company's new development
subsidiary (the "Development Company"). The term of this agreement will be
through December 31, 2001 unless sooner terminated or extended. In accordance
with the Amended Agreement, Mr. Friedman is to receive a base salary of $450,000
per annum. In addition, Mr. Friedman shall be eligible to earn a bonus upon the
calculation of Development Company Profits, as defined in the Amended Agreement.
The bonus shall be determined and paid semi-annually. Pursuant to the Amended
Agreement, the bonus payable to Mr. Friedman for each six month period ending on
the June 30th Measurement Date, as defined, shall be an amount equal to the
lesser of (i) fifteen percent (15%) of Development Company Profits for that six
month period or (ii) $225,000. The bonus payable to Mr. Friedman for each six
month period ending on the December 31st Measurement Date, as defined, shall be
an amount equal to fifteen percent (15%) of Development Company Profits for the
twelve month period just ended, minus the bonus calculated on the immediately
preceding June 30th Measurement Date, provided that the annual bonus to be
earned by Mr. Friedman shall never exceed $450,000 for any said twelve month
period ending on December 31.
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In April 1997, the Company entered into a two-year employment agreement
with Michael V. Pappagallo pursuant to which Mr. Pappagallo began to serve as
Chief Financial Officer effective May 27, 1997. In accordance with this
employment agreement, Mr. Pappagallo is to receive $400,000 per annum ($250,000
base salary and $150,000 guaranteed bonus) as compensation for his services. The
agreement further provides that Mr. Pappagallo be granted options to acquire
50,000 shares of the Company's Common Stock at an exercise price of $31.125 per
share, the market price on the date of grant. These stock options are to be
considered incentive stock options, as defined in and to the extent permitted
under the Company's Equity Participation Plan (as defined herein), and otherwise
shall be non-qualified options. Options with respect to these shares shall vest
in three equal installments upon each of the first three anniversaries of the
date of grant. In the event of, and depending upon the reasons for, a
termination of Mr. Pappagallo's employment with the Company prior to such dates,
(i) any such non-vested shares would become 100% vested as of the termination
date and (ii) Mr. Pappagallo would receive the remaining compensation due
through the term of his employment agreement. Mr. Pappagallo's employment
agreement has been extended through May 2001.
Effective April 2001, the Company commenced a five-year employment
agreement with David B. Henry pursuant to which Mr. Henry will serve as Chief
Investment Officer and has been nominated as Vice Chairman of the Board of
Directors which will be voted upon by the shareholders in connection with
Proposal 1 of this Proxy Statement. In accordance with this employment
agreement, Mr. Henry is to receive $750,000 per annum ($500,000 base salary and
$250,000 guaranteed bonus) as compensation for his services. In addition, Mr.
Henry received a grant of 25,000 shares of the Company's Common Stock which vest
immediately. Mr. Henry was also granted options to acquire 250,000 shares of the
Company's Common Stock at an exercise price equal to the market price on the
date of grant. With respect to 25,000 of these stock options, they are to be
considered qualified incentive stock options, as defined in and to the extent
permitted under the Company's Equity Participation Plan, and the remaining
225,000 stock options shall be non-qualified options. Options with respect to
these shares vest in three equal installments upon each of the first three
anniversaries of the date of grant. In the event of, and depending upon the
reasons for a termination of Mr. Henry's employment with the Company prior to
such dates, (i) any such non-vested shares would become 100% vested as the
termination date and (ii) Mr. Henry would receive severance in the amount equal
to the base salary and guaranteed bonus then in effect for the greater of the
balance of the term of his employment agreement or one year.
Compensation Committee Interlocks and Insider Participation
The Executive Compensation Committee of the Board of Directors,
comprised of Messrs. Martin Kimmel, Milton Cooper, Richard Dooley, Joe Grills
and Frank Lourenso, is charged with the responsibility of determining
compensation levels, including awards pursuant to the Company's Equity
Participation Plan (as defined herein), for the named executive officers other
than Mr. Cooper. Mr. Cooper's compensation and participation in the Equity
Participation Plan is subject to review and approval by the members of the
Executive Compensation Committee other than Mr. Cooper.
Mr. Milton Cooper is Chairman of the Board of Directors of the Company,
and Mr. Martin Kimmel is Chairman Emeritus of the Board. Messrs. Cooper and
Kimmel were founding members of the Company's predecessor in 1966.
Transactions with KC Holdings, Inc. To facilitate its initial public
stock offering in November 1991 (the "IPO"), the Company transferred its
interests in 46 shopping center properties to a newly-formed corporation, KC
Holdings, Inc. ("KC Holdings"), and subsidiaries of KC Holdings. The stock of KC
Holdings is owned by the stockholders of the Company prior to the IPO. All of
the real estate interests owned by KC Holdings and its subsidiaries are subject
to purchase options held by the Company which expire in November 2001.
As of April 1, 2001, KC Holdings' subsidiaries had conveyed 32 shopping
center properties back to the Company and had disposed of ten additional centers
in transactions with third parties. Of the 32 shopping center properties
9
conveyed to the Company, three shopping center property interests were acquired
in March 2001 in connection with the Company's exercise of its option to acquire
GC Buffalo Corp., a subsidiary of KC Holdings, which owns a 50% general
partnership interest (the "GCBC G.P. Interest") in a partnership which owns fee
title to the properties. The Company acquired the GCBC G.P. Interest for an
aggregate option price of approximately $3.5 million, paid $0.8 million in
shares of the Company's Common Stock (valued at $41.50 per share) and
approximately $2.7 million in cash. In June 2000, two shopping center properties
were acquired in connection with the Company's exercise of its option to acquire
KC Holdings Harrisburg Inc. and Kimco Michigan, Inc., subsidiaries of KC
Holdings. The Company acquired the properties for an aggregate purchase price of
$12.2 million, paid approximately $11.6 million in shares of the Company's
Common Stock (valued at $40.7625 per share) and $0.6 million through the
assumption of mortgage debt encumbering one of the properties. During 1999, 13
shopping center properties were acquired in connection with the Company's
exercise of its option to acquire KCHGC, Inc., a subsidiary of KC Holdings.
These shopping center properties where acquired for an aggregate option purchase
price of approximately $39.8 million, paid $15.7 million in shares of the
Company's Common Stock (valued at $39.00 per share) and $24.1 million through
the assumption of mortgage debt encumbering the properties. The mortgage debt
was repaid by the Company during 1999. The members of the Company's Board of
Directors who are not also shareholders of KC Holdings have unanimously approved
the Company's acquisition of all 32 shopping center properties that have been
conveyed back to the Company.
The Company is party to a management agreement pursuant to which it
manages three of KC Holdings' four remaining shopping center properties under
terms which the Company believes are no less favorable than would be obtained in
negotiations with an independent third party. The remaining property is owned in
a joint venture and is managed by an unaffiliated joint venture partner. The
management agreement was approved by a majority of the Company's Directors who
are not also stockholders of KC Holdings. Management fees paid by KC Holdings to
the Company totaled approximately $0.1 million during 2000.
Joint Ventures. Members of the Company's management have investments in
certain real estate joint ventures or limited partnerships, which own and/or
operate seven of the Company's 499 property interests as of December 31, 2000.
Such management investments predate the Company's IPO and, in each case, the
Company is a general partner of the joint venture or partnership and controls or
directs the management of the joint venture or partnership. Any material future
transactions involving these joint ventures or partnerships, such as major
renovations, disposal or sale, will be subject to the approval of a majority of
disinterested directors of the Company.
Relationship with J.P. Morgan. Mr. Lourenso, an Executive Vice President
of J.P. Morgan, has been a Director of the Company since December 1991. The
Company has maintained its principal banking relationship with J.P. Morgan. J.P.
Morgan, together with a consortium of ten additional banks, has provided the
Company with a $250.0 million, unsecured revolving credit facility which is
scheduled to expire in August 2003. At December 31, 2000 there was $45.0 million
outstanding under this facility.
Relationship with The State of New York Common Retirement Fund. Mr.
Grills is a member of the Investment Advisory Committee of The State of New York
Common Retirement Fund (the "NYSCRF"). Mr. Grills has been a Director of the
Company since January 1997. During 1999, the Company entered into a joint
venture arrangement with the NYSCRF and other institutional investors in
connection with the Kimco Income Operating Partnership ("KIR"), an entity
established for the purposes of investing in high quality retail properties,
financed primarily through the use of individual non-recourse mortgages. The
NYSCRF has committed approximately $267.0 million to the joint venture of which
$139.5 million has been contributed. This investment by the NYSCRF was reviewed
by the NYSCRF Real Estate Advisory Committee of which Mr. Grills is not a
member.
10
Report of the Executive Compensation Committee
on Executive Compensation
The Executive Compensation Committee has provided the following Report
on Executive Compensation:
Compensation Strategy and Performance Criteria. The members of this
Committee believe the Company's success is attributable in large part to the
talent and dedication of its associates and, in particular, to the management
and leadership efforts of its executive officers. Accordingly, the Company,
under the guidance of the Executive Compensation Committee, is committed to
develop and maintain compensation policies, plans and programs which seek to
enhance cash flows, and consequently real property and stockholder values, by
aligning the financial interests of the Company's senior management with those
of its stockholders.
In furtherance of these goals, the Company relies, to a large degree, on
annual and longer term incentive compensation (that is, specifically cash
bonuses, stock grants and stock option grants) to attract and retain corporate
officers and other key associates of outstanding ability, and to motivate such
persons to perform to their fullest potential. These forms of incentive
compensation are variable and designed to effectuate a pay-for-performance
philosophy which considers management's ability to consistently improve the
Company's Funds from Operations (a widely-accepted measure of performance for
real estate investment trusts) to be of paramount importance. Other performance
criteria which effect incentive awards include the demonstrated ability to
strengthen the Company's capital structure, the measure of improved total return
to stockholders and individual performance/contributions to corporate goals and
objectives.
The Committee annually deliberates the appropriate combination of cash
and stock-based compensation, and weighs the competitiveness of the Company's
plans in relation to compensation practices employed by a select group of
successful real estate investment trusts that are (i) included in the NAREIT
equity index used in the accompanying stock performance graph, and (ii) believed
to be comparable to the Company based on market capitalization, portfolio size
and distribution and product type. In general, the Committee has set base
compensation levels for the Company's executive officers at competitive levels
relative to this peer group. The number of stock options granted annually is an
amount which the Committee, after due consideration of corporate and individual
performance, changes in job function or title, competitive option grant levels
and previously awarded options, considers appropriate to fairly compensate and
properly motivate its officers.
From time to time the Committee may retain compensation and other
management consultants to assist with, among other things, structuring the
Company's various compensation programs and determining appropriate levels of
salary, bonus and other awards payable to the Company's officers and key
personnel, as well as to guide the Company in the development of near-term
individual performance objectives necessary to achieve long-term profitability.
No compensation consultants were retained during the years for which
compensation information has been provided in this Proxy Statement.
2000 Performance. In evaluating 2000 performance, particularly
noteworthy was the Company's ability, under senior management's direction, to
increase Funds from Operations for the year ended December 31, 2000 to $254.1
million, or $4.03 per share on a diluted basis, from $221.4 million, or $3.61
per share on a diluted basis, during the preceding year. The growth in Funds
from Operations resulted from (i) the Company's strong acquisition and
investment program which added 12 property interests comprising 1.4 million
square feet of leaseable area coupled with the full year results from the prior
year's acquisition of 35 property interests, (ii) the significant growth and
contribution of KIR which acquired 24 property interests for approximately
$421.0 million during 2000 and (iii) internal growth from the completion of
development and redevelopment projects and significant leasing within the
portfolio. The Company increased its occupancy level to 92.9% at December 31,
2000 as compared to 91.4% in the preceding year and continued to increase its
average annualized base rent per square foot, capitalizing on its below
market-rate rents.
11
Further, consideration was given to management's ability to continue its
strengthening of the Company's consolidated balance sheet through (i) completing
a primary offering of 1.8 million shares of its Common Stock which has added
approximately $72.4 million to stockholders' equity and provided capital for
continued investment in KIR and for property acquisitions and (ii) effectively
utilizing its medium-term notes ("MTN") program to issue $210.0 million in
cost-effective unsecured debt financing during 2000 providing capital for debt
repayment and property acquisitions. As a result of these transactions, the
Company continues to maintain a strong, prudent capital structure as evidenced
by the percentage of its total debt to total market capitalization of 30% at
December 31, 2000. In addition, the Company was able to attract capital
commitments of $170.0 million from third party investors to complement its own
commitment of $130.0 million for KIR. These new commitments are in addition to
the initial commitments of $269.0 million made during 1999, of which the Company
contributed $117.0 million.
As a result of the Company's 2000 performance, the Board of Directors in
December 2000 authorized an increase in dividends on the Common Stock to $0.72
per share from $0.68 per share. The Company previously increased the dividend
per common share from $0.66 to $0.68 in July 2000.
During the course of 2000, high growth sectors such as technology and
internet related stocks experienced significant erosion of investor support, and
the REIT industry was a beneficiary of this changing sentiment primarily because
of the strong dividend levels and stable characteristics of REIT stocks. The
Company's excellent financial performance was rewarded in this shifting
environment, and the combination of the Company's dividend and stock price
improvement produced total returns to stockholders during 2000 of approximately
39%.
2000 Incentive Compensation. In establishing 2000 incentive compensation
(that is, the cash bonuses and stock option grants as set forth in the
accompanying Summary Compensation and Option Grants in Last Fiscal Year tables)
for the Company's named executive officers, the Committee concluded that each
such officer had individually made a very substantial contribution toward
achieving the aforementioned performance levels. The Committee did not
specifically relate any measure of performance or any accomplishment to the
incentives awarded, nor did the Committee assign relative weight to any specific
performance factor. Rather, the Committee members made the subjective
determination that the incentives awarded were appropriate in view of previously
awarded incentives and their qualitative assessment that 2000 represented a year
of significant achievement for the Company that was, in large part, attributable
to the talents and efforts of its executive officers.
The annual bonus and option to acquire shares of the Company's Common
Stock awarded during 2000 to Mr. Cooper, Chairman of the Board of Directors and
Chief Executive Officer, as set forth in the accompanying Summary Compensation
Table, was determined by the members of the Executive Compensation Committee,
other than Mr. Cooper, after evaluating generally the Company's achievements for
the year and specifically Mr. Cooper's contributions towards realizing such
performance levels. The Board concluded that Mr. Cooper's leadership, vision and
decision making contributed significantly to these accomplishments and warranted
the bonus awarded to Mr. Cooper.
Martin S. Kimmel
Milton Cooper
Richard G. Dooley
Joe Grills
Frank Lourenso
As to that portion of the report which pertains to
Mr. Cooper's compensation:
Martin S. Kimmel
Richard G. Dooley
Joe Grills
Frank Lourenso
12
Stock Price Performance. The following stock price performance chart compares
the Company's performance to the S&P 500 and the index of equity real estate
investment trusts prepared by the National Association of Real Estate Investment
Trusts ("NAREIT"). Equity real estate investment trusts are defined as those
which derive more than 75% of their income from equity investments in real
estate assets. The NAREIT equity index includes all tax qualified equity real
estate investment trusts listed on the New York Stock Exchange, American Stock
Exchange or the NASDAQ National Market System. Stock price performance,
presented quarterly for the five years ended December 31, 2000, is not
necessarily indicative of future results. All stock price performance assumes
the reinvestment of dividends.
Kimco Realty Corporation
2000 Total Return Proxy Data
(January 1996 - December 2000; Benchmarked at December 1995 = 100.00)
NAREIT S & P 500 KIMCO
------------------------------------------------------
Dec-95 100.00 100.00 100.00
Mar-96 102.27 105.37 100.57
Jun-96 106.82 110.10 106.80
Sep-96 113.81 113.50 114.05
Dec-96 135.27 122.96 135.50
Mar-97 136.21 126.26 127.93
Jun-97 142.98 148.30 126.71
Sep-97 159.88 159.41 140.69
Dec-97 162.67 163.99 144.37
Mar-98 161.91 186.86 146.89
Jun-98 154.49 193.04 172.46
Sep-98 138.23 173.84 161.66
Dec-98 134.20 210.86 171.08
Mar-99 127.73 221.35 158.95
Jun-99 140.61 236.95 174.16
Sep-99 129.30 222.15 159.05
Dec-99 128.00 255.20 156.30
Mar-00 131.06 261.05 173.02
Jun-00 144.87 254.11 192.54
Sep-00 155.95 251.65 201.55
Dec-00 161.75 231.96 217.85
Audit Committee Report
The Audit Committee of the Board of Directors of the Company is
responsible for providing objective oversight of the Company's financial
accounting and reporting functions, system of internal control and audit
process. The Audit Committee is composed of three directors, each of whom is
independent as defined under the listing standards of the New York Stock
Exchange. The Audit Committee operates under a written charter approved by the
Board of Directors. A copy of the Audit Committee Charter is attached to this
Proxy Statement as Appendix A.
Management of the Company is responsible for the Company's system of
internal control and its financial reporting process. The independent
accountants, PricewaterhouseCoopers LLP, are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with auditing standards generally accepted in the United States of
America and to issue a report thereon. The Audit Committee is responsible for
the monitoring and oversight of 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 consolidated 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). The Audit Committee also
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.
13
Base 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 SEC.
Equity Participation Plan
Description of Plan. The Company maintains its Stock Option Plan (the
"Stock Option Plan") and its 1998 Equity Participation Plan (the "Equity
Participation Plan") for the benefit of its eligible employees, consultants and
directors. The Equity Participation Plan was established for the purpose of
attracting and retaining the Company's directors, executive officers and other
key employees by offering them an opportunity to own Common Stock of the Company
and/or rights which will reflect the growth, development and financial success
of the Company. The Equity Participation Plan provides that the Executive
Compensation Committee or the Board, as applicable, may grant or issue
"incentive" stock options and "non-qualified" stock options (within the meaning
of the Internal Revenue Code, the "Code"), that vest over time and are
exercisable at the "fair market value" of the Common Stock at the date of grant.
In addition, the Equity Participation Plan provides for the granting of deferred
stock ("Deferred Stock") to the Non-employee Directors of the Company. Deferred
Stock may be granted to Non-employee Directors in lieu of directors' fees which
would otherwise be payable to such Non-employees Directors, pursuant to such
policies as may be adopted by the Board from time to time. Unless otherwise
provided by the Board, a grantee of Deferred Stock shall have no rights as a
Company stockholder with respect to such Deferred Stock until such time as the
Common Stock underlying the award has been issued. The term of an award of
Deferred Stock shall be set by the Board in its sole discretion.
The Executive Compensation Committee has the authority under the Equity
Participation Plan to determine the terms of options granted under the Equity
Participation Plan, including, among other things, the individuals (who may be
employees, consultants or directors of the Company) who shall receive options,
the times when they shall receive them, whether an incentive stock option and/or
non-qualified option shall be granted, the number of shares to be subject to
each option and the date or dates each option shall become exercisable. The
Executive Compensation Committee also has the authority to grant options upon
the condition that the employee agrees to cancel all or a part of a previously
granted option and to amend or accelerate the vesting of previously granted
options.
The exercise price and term of each option are fixed by the Executive
Compensation Committee, provided, however, that the exercise price must be at
least equal to the fair market value of the stock on the date of grant and the
term cannot exceed 10 years; and further provided that in the case of an
incentive stock option granted to an individual who owns (or is deemed to own)
at least 10% of the total combined voting power of all classes of stock of the
Company, a subsidiary or a parent (within the meaning of Section 424 of the
Code), the exercise price must be at least 110% of the fair market value on the
date of grant and the term cannot exceed five years. Incentive stock options may
be granted only within 10 years from the date of adoption of the Equity
Participation Plan. The aggregate fair market value (determined at the time the
option is granted) of shares with respect to which incentive stock options may
be granted under the Equity Participation Plan, or any other plan of the Company
or any parent or subsidiary, which stock options are exercisable for the first
time during any calendar year, may not exceed $100,000. The maximum number of
non-qualified options that may be granted to any one individual is 500,000,
provided that the grant of the options will not cause the Company to fail to
qualify as a real estate investment trust for Federal income tax purposes. An
optionee may, with the consent of the Executive Compensation Committee, elect to
pay for the shares to be received upon exercise of his options in cash, shares
of Common Stock of the Company or any combination thereof.
Option Grants. A maximum aggregate of 6,000,000 shares of the Company's
Common Stock have been reserved for issuance under the Stock Option Plan
(3,000,000 shares, all of which have been issued) and the Equity Participation
Plan (3,000,000 shares). Options to acquire 898,425, 799,050 and 1,023,500
shares were granted during 2000, 1999 and 1998 at weighted average exercise
prices of $40.63, $32.33 and $37.32 per share, respectively. A total of
14
3,692,537 options at a weighted average exercise price of $33.66 per share were
outstanding at December 31, 2000, and as of such date 608,695 shares were
available for future grant under the Equity Participation Plan.
Proposal to Increase Shares Subject to Option. The Executive
Compensation Committee of the Board of Directors has recommended that the shares
of the Company's Common Stock subject to Option under the Equity Participation
Plan be increased by 3,000,000 shares (See Proposal 2).
401(k) Plan
The Company maintains a 401(k) retirement plan covering substantially
all officers and employees of the Company. The 401(k) plan permits participants
to defer up to a maximum of 10% of their eligible compensation, which deferrals
generally are matched concurrently by the Company up to a maximum of 5% of the
employee's eligible compensation. Participants in the 401(k) Plan are not
subject to Federal and state income tax on salary deferral contributions or
Company contributions or on the earnings thereon until such amounts are
withdrawn from the 401(k) Plan. Salary reduction contributions are treated as
wages subject to FICA tax. Withdrawals from the plan may only be made upon
termination of employment, or in connection with certain provisions of the
401(k) Plan that permit hardship withdrawals.
Certain Relationships and Related Transactions
Members of the Company's management hold investments in certain real
estate joint ventures or limited partnerships to which the Company is a party.
Such investments predate the Company's IPO and, in each case, the Company
controls or directs the management of the joint venture or limited partnership.
Any material future transactions involving these joint ventures or partnerships
require the approval of a majority of disinterested directors of the Company.
See "Compensation Committee Interlocks and Insider Participation".
Messrs. Kimmel and Cooper, Directors of the Company, are stockholders of
KC Holdings. See "Compensation Committee Interlocks and Insider Participation".
Mr. Frank Lourenso, a Director of the Company, is also an Executive Vice
President of J.P. Morgan. The Company maintains its principal banking
relationship with J.P. Morgan. See "Compensation Committee Interlocks and
Insider Participation".
Mr. Joe Grills, a Director of the Company, is also a member of the
Investment Advisory Committee of NYSCRF. The Company has a joint venture
arrangement with NYSCRF. See "Compensation Committee Interlocks and Insider
Participation".
Mr. Paul Dooley, Manager of Real Estate Tax Administration and Insurance
for the Company, is the son of Mr. Richard G. Dooley, a director of the Company.
Mr. Paul Dooley was paid a cash salary in 2000 as an employee of the Company
that is commensurate with his position and was granted 7,000 options in 2000
pursuant to the Equity Participation Plan. In addition, Mr. Dooley was extended
a loan in the amount of $36,960 in 2000 and $62,865 in 1999 to supplement
available margin loans and partially fund the purchase of 2,310 shares and 3,300
shares, respectively, of the Company's Common Stock. The stock purchase loans
are scheduled to be repaid over a term of two years, however, the term may be
extended at the discretion of the Board of Directors. The amount outstanding as
of April 5, 2001 was $94,132.
During May 2000, the Company purchased from Joseph K. Kornwasser, a
Senior Vice President and Director of the Company, 100,217 depositary shares of
its Class D Convertible Preferred Stock, at a price of $25.00 per depositary
share, totaling approximately $2.5 million. The purchase price was at par, which
was less than the market price on the date of purchase.
15
Indebtedness of Management. The following table sets forth information
with respect to indebtedness of Directors and executive officers to the Company.
(1) Represents (i) loans extended to Mr. Flynn during 1996 to fund the purchase
of 10,000 outstanding shares of the Company's Common Stock and in 1997,
1998 and 2000 to fund amounts associated with a previously granted
restricted stock award and this stock purchase loan is collateralized by
the shares of Common Stock acquired and is repayable, commencing in 1999,
over an approximate term of eight years and (ii) loans extended during 1999
and 2000 to supplement available margin loans and partially fund the
purchase of 121,180 shares and 3,125 shares of the Company's Common Stock,
respectively. The stock purchase loans are scheduled to be repaid over a
term of two years, however, the term may be extended at the discretion of
the Board of Directors. Mr. Flynn repaid these loans in full during March
2001.
(2) Loans extended during 1999 and 2000 to supplement available margin loans
and partially fund the purchase of 33,000 and 3,125 shares, respectively,
of the Company's Common Stock by Mr. Pappagallo. These stock purchase loans
are scheduled to be repaid over a term of two years, however, the term may
be extended at the discretion of the Board of Directors.
(3) Loans extended during 1999 and 2000 to supplement available margin loans
and partially fund the purchase of 9,900 shares and 3,125 shares,
respectively, of the Company's Common Stock by Mr. Cohen. These stock
purchase loans are scheduled to be repaid over a term of two years,
however, the term may be extended at the discretion of the Board of
Directors.
(4) Loans extended during 1999 and 2000 to supplement available margin loans
and partially fund the purchase of 3,960 shares and 1980 shares,
respectively, of the Company's Common Stock by Mr. Callan. These stock
purchase loans are scheduled to be repaid over a term of two years,
however, the term may be extended at the discretion of the Board of
Directors.
16
(5) Indebtedness outstanding as of April 5, 2001.
Independent Public Accountants
PricewaterhouseCoopers LLP was engaged to perform the annual audit of
the books of account of the Company for the calendar year ended December 31,
2000. There are no affiliations between the Company and PricewaterhouseCoopers
LLP, its partners, associates or employees, other than as pertain to its
engagement as independent auditors for the Company in previous years.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the
Meeting and will be given the opportunity to make a statement if they so desire
and to respond to appropriate questions.
The following table provides information relating to the fees billed to
the Company by PricewaterhouseCoopers LLP for the year ended December 31, 2000:
Audit Fees (1) $161,000
Financial Information Systems
Design and Implementation $ 0
All Other Fees(2) $ 48,400
(1) Audit fees include all fees for services in connection with the annual
audit of the Company's fiscal 2000 financial statements included in its
annual report on Form 10-K and the review of the financial statements
included in the Company's quarterly reports on Form 10-Q for the quarters
ended March 31, 2000, June 30, 2000 and September 30, 2000 and for the
audit of the fiscal 2000 financial statements of KIR, an entity in which
the Company has a 43.3% non-controlling limited partnership interest.
(2) Includes fees for the audit of the Company's employee benefit plan, the
review and signing of the 1999 corporate tax returns and for the consents
and comfort letters in connection with equity and debt offerings during
2000. The Audit Committee discussed these services with
PricewaterhouseCoopers LLP and determined that their provision of these
services is compatible with maintaining PricewaterhouseCoopers LLP's
independence.
The Audit Committee of the Board of Directors annually submits its
recommendation with respect to the engagement of independent public accountants
at the meeting of the full Board of Directors which takes place each year during
the Company's third fiscal quarter. PricewaterhouseCoopers LLP has been the
Company's independent public accountants since 1986. The Audit Committee of the
Board of Directors will review the appointment of PricewaterhouseCoopers LLP for
2001 later this year.
17
PROPOSAL 2
Proposal Regarding Equity Participation Plan
The Company maintains its Stock Option Plan and its Equity Participation
Plan pursuant to which the Executive Compensation Committee of the Board of
Directors may grant incentive and non-qualified stock options, for the purposes
of (i) furthering the growth, development and financial success of the Company
by providing additional incentive to its directors, executive officers,
consultants and other key employees who have been or will be given
responsibilities for the management or administration of the Company's business
affairs, and (ii) enabling the Company to attract and retain the services of the
type of professional and managerial personnel considered essential to the long
range success of the Company by providing an opportunity for such personnel to
become owners of capital stock of the Company.
A maximum aggregate of 6,000,000 shares of the Company's Common Stock
are reserved for issuance under the Stock Option Plan (3,000,000 shares, all of
which have been issued) and the Equity Participation Plan (3,000,000 shares).
Options to acquire 5,391,305 shares at a weighted average exercise price of
$29.97 have been granted through December 31, 2000, and as of such date 608,695
shares remain available for future grant under the Equity Participation Plan.
The Executive Compensation Committee of the Board of Directors considers
the future grant of options under the Equity Participation Plan to be an
integral part of the Company's compensation strategies and polices, as it seeks
to enhance cash flows, and consequently real property and stockholder value, by
aligning the financial interests of the Company's directors, executive officers,
consultants and other key employees with those of its shareholders. Accordingly,
the members of the Executive Compensation Committee have recommended that the
Equity Participation Plan be amended so that the number of shares of the
Company's Common Stock subject to Option under the Equity Participation Plan
would be increased by 3,000,000 shares. The directors, executive officers,
consultants and other key employees who may receive grants of options to acquire
such additional shares will continue to be determined in the future by the
Executive Compensation Committee of the Board of Directors. The persons named as
proxies in the accompanying form of proxy intend to vote FOR this
recommendation.
Vote Required
Approval of the recommendation by the Executive Compensation Committee
to increase the numbers of shares of the Company's Common Stock subject to
Option under the Equity Participation Plan by 3,000,000 shares requires approval
by the affirmative vote of the holders of a majority of the votes cast at the
Meeting; provided that the total number of votes cast at the Meeting represents
over 50% in interest of all Kimco Common Stock entitled to vote on such
proposal. Accordingly, abstentions and broker non-votes will have the effect of
a vote against such proposal unless holders of more than 50% in interest of all
securities entitled to vote on such proposal cast votes, in which event
abstentions will have no effect on the result of such vote.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR THE
PROPOSAL TO INCREASE THE NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK SUBJECT
TO OPTION UNDER ITS EQUITY PARTICIPATION PLAN.
18
PROPOSAL 3
Proposal to Amend the Charter of the Company to Permit the Board of Directors to
Change the Number of Authorized Shares of Stock of the Company
In 1999, the Maryland General Corporation Law (the "MGCL") was amended
to permit the board of directors of a Maryland corporation, such as the Company,
to include in its charter a provision permitting the board of directors to amend
the charter to increase or decrease the aggregate number of shares of stock or
the number of shares of stock of any class that the corporation has authority to
issue.
Currently, the Company is required to obtain the approval of its Board
of Directors and its stockholders each time it proposes to amend its charter to
increase or decrease its number of authorized shares of stock. This process is
expensive and time-consuming. Adopting the proposed amendment to the charter
will enable the Board of Directors alone to amend the charter of the Company to
increase or decrease the number of authorized shares of stock. The proposed
amendment requires the approval of the stockholders of the Company.
Accordingly, the Board of Directors has unanimously adopted a resolution
declaring that it is advisable and in the best interests of the Company to add
to Article IV, Section A of the charter the following sentence: "The Board of
Directors, without any action by the stockholders of the Company, may amend the
charter from time to time to increase or decrease the aggregate number of shares
of stock or the number of shares of stock of any class that the Company has
authorized to issue."
The effect of this amendment will be to permit the Board of Directors,
without stockholder action, to increase or decrease (a) the total number of
authorized shares of stock of the Company and/or (b) the number of authorized
shares of stock of any one or more classes. Maryland law permits a corporation
to have shares of stock that are assigned to a particular class as well as
shares that are not assigned to a particular class but are available to be
classified by the board of directors at a later time. Thus, the total number of
authorized shares of stock may exceed the total number of authorized shares of
all classes.
At present, the Company is authorized to issue 310,600,000 shares,
consisting of 200,000,000 shares of Common Stock, 102,000,000 shares of excess
stock, 5,000,000 shares of preferred stock, 345,000 shares of 7-3/4% Class A
Cumulative Redeemable Preferred Stock, 345,000 shares of Class A Excess
Preferred Stock, 230,000 shares of 8-1/2% Class B Cumulative Redeemable
Preferred Stock, 230,000 shares of Class B Excess Preferred Stock, 460,000
shares of 8-3/8% Class C Cumulative Redeemable Preferred Stock, 460,000 shares
of Class C Excess Preferred Stock, 700,000 shares of 7-1/2% Class D Cumulative
Convertible Preferred Stock, 700,000 shares of Class D Excess Preferred Stock,
65,000 shares of Floating Rate Class E Cumulative Redeemable Preferred Stock,
and 65,000 shares of Class E Excess Preferred Stock. Of the 200,000,000
authorized shares of Common Stock, there are already issued and outstanding over
63.4 million shares and an additional 3.6 million shares are issuable upon
exercise of outstanding options. The shares of excess stock are reserved for
issuance, if necessary, in connection with certain provisions of the charter
relating to the exchange of shares if certain events occur that could jeopardize
the Company's qualification as a REIT under the Code.
The Board of Directors believes that it is in the best interests of the
Company and its stockholders to permit the Board of Directors, without the
necessity of stockholder approval, to increase or decrease either the aggregate
number of shares of stock or the number of shares of any class of stock that the
Company has authority to issue in order to provide the Company with maximum
flexibility to meet a variety of business needs and future opportunities. These
business needs and opportunities may include share dividends, share splits,
retirement of indebtedness, employee benefit programs, business combinations,
acquisitions of property and raising cash for general purposes. Responding to
such needs or opportunities often requires quick action. The process of
obtaining stockholder approval to amend the charter is both time-consuming and
expensive. The Board of Directors currently does not have any plans to increase
the aggregate number of authorized shares or the number of shares of any class
of stock to issue any significant number of shares of stock.
19
If the proposed amendment is adopted, authorized shares of stock of the
Company as established from time to time by the Board of Directors in excess of
those issued from time to time will be available for issuance at such times and
for such purposes as the Board of Directors may deem advisable without further
action by the Company's stockholders, unless such action is otherwise required
by applicable law or the rules of the New York Stock Exchange.
As discussed above, the advantages to the Company's stockholders of the
proposed amendment include the flexibility it would give the Company in raising
capital and acquiring property and the avoidance of delay and expense. However,
even if the proposed amendment is adopted, shareholder approval would continue
to be required under the rules of the New York Stock Exchange for any
transaction or series of related transactions (other than a public offering for
cash) in which shares of common stock or securities convertible into or
exercisable for shares of common stock are to be issued if (i) the newly issued
shares have voting power equal to or in excess of 20% of the voting power of the
outstanding shares of common stock prior to such transaction, (ii) the number of
newly issued shares of common stock is equal to or in excess of 20% of the
number of outstanding shares of common stock before such transaction (other than
stock splits or stock dividends) or (iii) the issuance would result in a change
of control of the Company.
The Board of Directors does not intend to increase the aggregate number
of authorized shares of stock or the number of shares of any class of stock or
to issue any shares of stock except on terms or for reasons that the Board deems
to be in the best interest of the Company. Because the holders of shares of
Common Stock of the Company do not have preemptive rights, the issuance of
additional shares of Common Stock (other than on a pro rata basis to all current
stockholders) would reduce current stockholders' proportionate interest.
However, in any such event, stockholders wishing to maintain their interests may
be able to do so through normal market purchases. While the issuance of shares
of stock by certain entities in certain instances may have the effect of
delaying, deferring or preventing a hostile takeover, the Board of Directors
does not believe that the authority to increase or decrease the authorized
shares of stock is likely to have a significant anti-takeover effect because of
existing provisions in the Company`s charter restricting the concentration of
ownership of the outstanding shares of stock of the Company in order to maintain
the Company's qualification as a REIT under the Internal Revenue Code.
Vote Required
Approval of the recommendation by the Board of Directors to amend the
charter of the Company to permit the Board of Directors to change the number of
authorized shares of stock of the Company requires approval by the affirmative
vote of holders of shares entitled to cast two-thirds of all the votes entitled
to be cast on the matter. Accordingly, any shares not voted (whether by
abstentions, broker non-votes or otherwise) will have the same effect as votes
against the proposed amendment to the Company's charter. If this proposal is
approved by the stockholders, it will become effective upon the filing of
Articles of Amendment with the State Department of Assessments and Taxation of
Maryland, which will occur as soon as reasonably practicable after approval.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR THE
PROPOSAL TO AMEND ARTICLE IV, SECTION A OF THE COMPANY'S CHARTER TO PERMIT THE
BOARD OF DIRECTORS TO AMEND THE CHARTER TO INCREASE OR DECREASE THE AGGREGATE
NUMBER OF SHARES OF STOCK OR THE NUMBER OF SHARES OF ANY CLASS OF STOCK THAT THE
COMPANY IS AUTHORIZED TO ISSUE.
Other Matters
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a)
of the Exchange Act requires the Company's officers and directors, and persons
who own more than ten percent of a registered class of the Company's equity
securities, to file reports (Forms 3, 4 and 5) of the ownership and changes in
the ownership of such equity securities with the SEC and the New York Stock
Exchange. Officers, directors and beneficial owners of more than ten percent of
the Company's stock are required by SEC regulation to furnish the Company with
copies of all such forms which they file.
20
Based solely on the Company's review of the copies of Forms 3, 4 and 5
and amendments thereto received by it for the year ended December 31, 2000, or
written representations from certain reporting persons that no such forms were
required to be filed by those persons, the Company believes that during the year
ended December 31, 2000, all filing requirements were complied with by its
officers, directors, beneficial owners of more than ten percent of the Company's
stock and other persons subject to Section 16 of the Exchange Act.
Financial and Other Information. Reference should be made to the
Company's annual report on Form 10-K for the year ended December 31, 2000, and
the Company's Annual Report delivered together with this Proxy Statement, such
documents incorporated herein by reference, for financial information and
related disclosures required to be included herein.
Stockholders' Proposals. Proposals of stockholders intended to be
presented at the Company's Annual Meeting of Stockholders to be held in 2002
must be received by the Company no later than January 3, 2002, in order to be
included in the Company's proxy statement and form of proxy relating to that
meeting. Such proposals must comply with the requirements as to form and
substance established by the SEC for such proposals in order to be included in
the proxy statement. A stockholder who wishes to make a proposal at the 2002
Annual Meeting without including the proposal in the Company's proxy statement
and form of proxy relating to that meeting must notify the Company by March 6,
2002. If the stockholder fails to give notice by this date, then the persons
named as proxies in the proxies solicited by the Board for the 2002 Annual
Meeting may exercise discretionary voting power with respect to any such
proposal.
Documents Incorporated by Reference. This Proxy Statement incorporates
documents by reference which are not presented herein or delivered herewith.
These documents (except for certain exhibits to such documents, unless such
exhibits are specifically incorporated herein) are available upon request
without charge. Requests may be oral or written and should be directed to the
attention of the Secretary of the Company at the principal executive offices of
the Company.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof and prior to the date
of the Meeting shall be deemed incorporated by reference into this Proxy
Statement and shall be deemed a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this Proxy
Statement to the extent that a statement contained herein (or subsequently filed
document which is also incorporated by reference herein) modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Proxy Statement, except as so modified or superseded.
Other Business. All shares represented by the accompanying proxy will be
voted in accordance with the proxy. The Company knows of no other business which
will come before the Meeting for action. However, as to any such business, the
persons designated as proxies will have authority to act in their discretion.
21
Appendix A
KIMCO REALTY CORPORATION
AUDIT COMMITTEE CHARTER
Mission Statement and Organization
The Audit Committee of the Board of Directors will:
o Oversee the Company's accounting and financial reporting policies and
practices and system of internal control;
o Oversee the quality and objectivity of its financial statements and
the independent audit thereof; and
o Act as a liaison between the Company's independent auditors and its
full board of directors.
This Audit Committee shall consist entirely of members of the Board that are
free of any relationships that, in the opinion of the Board, would interfere
with the exercise of their independent judgment. The Audit Committee shall
consist of three members, each of whom shall have accounting or financial
management experience and expertise, as determined by the full Board in its
business judgment. One member shall serve as Committee Chair. The Audit
Committee will meet at least two times per year with special meetings called as
circumstances warrant, and shall meet annually with the Chief Financial Officer
of the Company. The Audit Committee will review and reassess the adequacy of
this charter on an annual basis.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control, and the independent auditor's responsibility to plan and carry out a
proper audit.
Roles and Responsibilities
o To recommend the selection, retention or termination of independent
auditors and to evaluate their independence;
o Meet with the Company's independent auditors, including private
meetings, as deemed necessary to:
- to review the arrangements for the annual audit and any special
audits;
- to discuss any matters of concern brought to their attention
relating to the Company's financial statements;
- consider the auditors' comments with respect to the Company's
financial policies, procedures and internal accounting controls
and management's responses thereto;
- to review the form of opinion the auditors propose to render to
the Board and shareholders; and
- to review the Company's quarterly financial results prior to the
public release and/or the Company's quarterly financial
statements prior to filing or distribution. The Committee Chair
may represent the full Committee for the review of the quarterly
statements.
o To receive reports concerning any changes in accounting principles or
practices proposed by management or the independent auditors;
o To review the fees charged by the independent auditors for audit and
non-audit services brought to the Committee's attention by management;
o To investigate improprieties or suspected improprieties in the
Company's operations; and
o Regularly update the Board of Directors with respect to the above and
other matters as the Committee may deem necessary or appropriate and
make appropriate recommendations.
The Committee shall have the resources and authority appropriate to discharge
its responsibilities, including the authority to retain special counsel and
other experts or consultants at the expense of the Company.
2740-PS-01
DETACH HERE
KRC83B
PROXY
KIMCO REALTY CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Milton Cooper, Michael J. Flynn and
Bruce Kauderer as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all of the
shares of Common Stock of Kimco Realty Corporation held of record by the
undersigned on April 5, 2001, at the Annual Meeting of Stockholders to be held
on May 15, 2001, or any adjournment(s) or postponements(s) thereof. The
undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of
Stockholders and the accompanying Proxy Statement.
The Board of Directors recommends a vote (1) FOR all of the nominees for
director, (2) FOR the recommendation by the Executive Compensation Committee of
the Board to increase by 3,000,000 shares the number of shares of the Company's
Common stock subject to Option under the Company's 1998 Equity Participation
Plan and (3) FOR the proposal to amend the Charter of the Company to permit the
Board of Directors to change the number of authorized shares of stock of the
Company.
To vote FOR all of the nominees for director, FOR the increased number
of shares subject to Option under the Company's 1998 Equity Participation Plan
and FOR the proposal to amend the Charter to permit the Board of Directors to
change the number of authorized shares of stock of the Company, just sign and
date the reverse side. No boxes need to be checked.
- ------------ ------------
SEE SEE
REVERSE SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE REVERSE SIDE
- ------------ ------------
Kimco Realty Corporation
c/o EquiServe
P.O. Box 8040
Boston, MA 02266-8040
Do Not return your Proxy Card if you are voting by Telephone or Internet
DETACH HERE
KRC83A
Please mark
votes as in
this example.
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 election of all nominees for directors FOR Proposals 2 and 3, and
in the discretion of the Proxies upon such other business as may properly come
before the Meeting. By executing this proxy, the undersigned hereby revokes all
prior proxies.
Signature: Date:
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Signature: Date:
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