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 (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 pursuant to Rule 14a-12
GENERAL GROWTH 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, 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.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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GENERAL GROWTH PROPERTIES, INC.
110 NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 8, 2002
To our Stockholders:
We are notifying you that the Annual Meeting of Stockholders of General
Growth Properties, Inc. will be held on Wednesday, May 8, 2002 at 9:00 a.m.
local time at our principal executive offices located at 110 North Wacker Drive,
Chicago, Illinois 60606 for the following purposes:
1. To elect two directors, each for a term of three years;
2. To approve an amendment to our 1998 Incentive Stock Plan to increase the
number of shares of our common stock available for issuance under the
plan by 1,000,000 shares; and
3. To transact other business properly coming before the meeting.
Each of these matters is described in further detail in the enclosed proxy
statement. We have also enclosed a copy of our 2001 Annual Report. Only
stockholders of record at the close of business on March 21, 2002 are entitled
to vote at the meeting or any postponement or adjournment of the meeting. A
complete list of these stockholders will be available at our principal executive
offices prior to the meeting.
Please use this opportunity to take part in our affairs by voting your
shares. Whether or not you plan to attend the meeting, please complete the
enclosed proxy card and return it in the envelope provided as promptly as
possible, or follow the instructions on the proxy card for voting by telephone
or through the Internet. Your proxy can be withdrawn by you at any time before
it is voted.
By order of the Board of Directors,
/s/ Matthew Bucksbaum
Chairman of the Board
Chicago, Illinois
April 5, 2002
TABLE OF CONTENTS
PAGE
----
ABOUT THE MEETING........................................... 1
What is the purpose of the annual meeting?................ 1
What are the board's voting recommendations?.............. 1
What happens if additional proposals are presented at the
meeting?............................................... 1
Who is entitled to vote?.................................. 1
What constitutes a quorum?................................ 1
How do I vote?............................................ 2
Can I vote by telephone or through the Internet?.......... 2
Can I change my vote after I return my proxy card or after
I vote by telephone or through the Internet?........... 2
What vote is required to approve each matter that comes
before the meeting?.................................... 2
Who will bear the costs of soliciting votes for the
meeting?............................................... 2
ELECTION OF DIRECTORS....................................... 2
BOARD STRUCTURE AND COMPENSATION............................ 4
Board of Directors and Board Committees................... 4
Compensation of Directors................................. 5
Compensation Committee Interlocks and Insider
Participation.......................................... 5
FEES OF INDEPENDENT AUDITORS AND AUDIT COMMITTEE REPORT..... 5
Fees Billed by Independent Auditors....................... 5
Report of the Audit Committee............................. 6
STOCK OWNERSHIP............................................. 7
Common Stock Ownership of Certain Beneficial Owners....... 7
Equity Ownership of Management............................ 7
Section 16(a) Beneficial Ownership Reporting Compliance... 9
EXECUTIVE OFFICERS.......................................... 9
EXECUTIVE COMPENSATION...................................... 10
Summary of Cash and Certain Other Compensation............ 10
Option Grants............................................. 11
Option Exercises and Year-End Values...................... 11
Long Term Incentive Plan Awards........................... 12
Standard Employee Benefits................................ 12
Report of the Compensation Committee on Executive
Compensation........................................... 12
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS........ 16
PERFORMANCE GRAPH........................................... 17
INDEPENDENT AUDITORS........................................ 18
APPROVAL OF AMENDMENT TO 1998 INCENTIVE STOCK PLAN.......... 18
STOCKHOLDER PROPOSALS....................................... 21
GENERAL GROWTH PROPERTIES, INC.
110 NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
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PROXY STATEMENT
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The Board of Directors of General Growth Properties, Inc. is asking for
your proxy for use at the annual meeting of our stockholders to be held on
Wednesday, May 8, 2002 at 9:00 a.m. local time at our principal executive
offices located at 110 North Wacker Drive, Chicago, Illinois, and at any
postponements or adjournments of the meeting. We are initially mailing this
proxy statement and the enclosed proxy to our stockholders on or about April 5,
2002.
ABOUT THE MEETING
What is the purpose of the annual meeting?
At our annual meeting, stockholders will act upon the matters outlined in
the accompanying notice of meeting, including:
- the election of two directors, each for a term of three years (see page
2); and
- the approval of an amendment to our 1998 Incentive Stock Plan (the "1998
Incentive Plan") to increase the number of shares of our common stock
available for issuance under the plan by 1,000,000 shares (see page 18).
In addition, our management will report on our company's performance during
fiscal 2001 and respond to questions from stockholders.
What are the board's voting recommendations?
Our board of directors recommends that you vote your shares "FOR" the
election of each of the nominees to the board and "FOR" the approval of an
amendment to our 1998 Incentive Plan.
What happens if additional proposals are presented at the meeting?
Other than the matters described in this proxy statement, we do not expect
any additional matters to be presented for a vote at the annual meeting. If
other matters are presented and you vote by proxy, your proxy grants the persons
named as proxy holders the discretion to vote your shares on any additional
matters properly presented for a vote at the meeting.
Who is entitled to vote?
Only stockholders of record at the close of business on the record date,
March 21, 2002, are entitled to receive notice of the annual meeting and to vote
the shares of common stock that they held on that date at the meeting, or any
postponement or adjournment of the meeting. Each outstanding share of common
stock entitles its holder to cast one vote on each matter to be voted on.
What constitutes a quorum?
If a majority of the shares outstanding on the record date are present at
the annual meeting, either in person or by proxy, we will have a quorum at the
meeting, permitting the conduct of business at the meeting. As of the record
date, we had 62,017,756 shares of common stock outstanding and entitled to vote.
Any shares represented by proxies that are marked to abstain from voting on a
proposal will be counted as present for purposes of determining whether we have
a quorum. If a broker, bank, custodian, nominee or other record
1
holder of our common stock indicates on a proxy that it does not have
discretionary authority to vote certain shares on a particular matter, the
shares held by that record holder (referred to as "broker non-votes") will also
be counted as present in determining whether we have a quorum.
How do I vote?
You may vote in person at the annual meeting or you may vote by proxy by
signing, dating and mailing the enclosed proxy card. If you vote by proxy, the
individuals named on the card as proxy holders will vote your shares in the
manner you indicate. If you sign and return the card without indicating your
instructions, your shares will be voted "FOR":
- the election of the two nominees for director, and
- the approval of the amendment to our 1998 Incentive Plan.
Can I vote by telephone or through the Internet?
Yes. If you are a record holder of our common stock (that is, if you hold
your stock in your own name in the company's stock records maintained by our
transfer agent), you may vote by telephone or through the Internet by following
the instructions included with your proxy card.
Can I change my vote after I return my proxy card or after I vote by telephone
or through the Internet?
Yes. Even after you have submitted your proxy, you may change your vote at
any time before the proxy is exercised at the annual meeting by delivering to
the Secretary of our company a written notice of revocation or a properly signed
proxy bearing a later date, or by attending the annual meeting and voting in
person (although attendance at the meeting will not cause your previously
granted proxy to be revoked unless you specifically request that your previously
granted proxy be revoked). To revoke a proxy previously submitted through the
Internet or by telephone, you may simply vote again at a later date, using the
same procedures, in which case the later submitted vote will be recorded and the
earlier vote revoked.
What vote is required to approve each matter that comes before the meeting?
Director nominees must receive the affirmative vote of a plurality of the
shares represented at the meeting, meaning that the two nominees for director
with the most votes will be elected. Votes withheld and broker non-votes will
not be counted toward a nominee's total.
Approval of the amendment to the 1998 Incentive Plan requires the
affirmative vote of a majority of the shares of common stock represented at the
meeting in person or by proxy. Abstentions will have the same effect as a vote
against this proposal, while broker non-votes will not be treated as entitled to
vote on this proposal and, accordingly, will not affect the outcome of the vote.
Who will bear the costs of soliciting votes for the meeting?
Our company will bear the entire cost of the solicitation of proxies from
its stockholders, which is currently estimated to be less than $10,000. In
addition to the mailing of these proxy materials, the solicitation of proxies or
votes may be made in person, by telephone or by electronic communication by our
directors, officers and employees, who will not receive any additional
compensation for such solicitation activities. We will also reimburse brokerage
houses and other custodians, nominees and fiduciaries for their reasonable out-
of-pocket expenses for forwarding proxy and solicitation materials to our
stockholders.
ELECTION OF DIRECTORS
Our board of directors is currently comprised of seven members. Our bylaws
divide the board into three classes, as nearly equal in number as possible, with
each class of directors serving a three-year term. The term of office of the
classes of directors expires in rotation so that one class is elected at each
annual meeting for a full three-year term.
2
The board of directors has nominated and urges you to vote "FOR" the
election of the two nominees named below for terms of office ending in 2005.
Proxies will be so voted unless stockholders specify otherwise in their proxies.
Each of the two nominees is currently a member of the board of directors.
In the event a nominee is not available to serve for any reason when the
election occurs, it is intended that the proxies will be voted for the election
of the other nominee and may be voted for any substitute nominee. Our board of
directors has no reason to believe that either nominee will not be a candidate
or, if elected, will be unable or unwilling to serve as a director. In no event
will the proxies be voted for a greater number of persons than the number of
nominees named.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION TO THE BOARD
OF EACH OF THE NOMINEES NAMED BELOW.
NOMINEES FOR ELECTION AT THIS MEETING FOR TERMS EXPIRING IN 2005:
Matthew Bucksbaum, 76, has served as a director of our company since 1986
and as Chairman of the Board since July 1995. Mr. Bucksbaum also served as our
Chief Executive Officer from July 1995 through June 1999, as President of our
company from December 1992 through June 1995 and as our Secretary and Treasurer
from 1986 to December 1992. Mr. Bucksbaum has served as President of General
Growth Companies, Inc., of which he is the sole stockholder and director, since
1985. In addition, Mr. Bucksbaum has served and continues to serve as a director
and/or officer of various of our affiliates and wholly-owned subsidiaries. Mr.
Bucksbaum is an ex-officio trustee of the International Council of Shopping
Centers, and previously served as chairman. Mr. Bucksbaum is also a member of
the Urban Land Institute and the National Association of Real Estate Investment
Trusts ("NAREIT"), and is a trustee and chairman of the board of the Aspen Music
Festival and School. Mr. Bucksbaum is the father of John Bucksbaum, the Chief
Executive Officer of our company.
Beth Stewart, 45, has served as a director of our company since 1993. Ms.
Stewart has served as Chief Executive Officer of Storetrax, Inc., a Web-based
company focused on the retail real estate sector, since August 2001 and
Co-Chairman of the Board of Storetrax since October 1999. From December 1992
until August 2001, Ms. Stewart was a private real estate consultant and
investor. From 1986 to November 1992, she served as Vice President of Goldman,
Sachs & Co. Ms. Stewart is a director of Imperial Parking Corporation, a
Canadian parking company, and Avatar, Inc., a Florida-based home builder.
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2003:
Morris Mark, 61, has served as a director of our company since 1993. Mr.
Mark has served as general partner of Mark Partners, an investment partnership,
since June 1985, President of Mark Asset Management, an investment advisory
firm, since December 1986, and President of Mark International Management, LLC,
an investment management company, since 1989. From 1975 to 1984, Mr. Mark was a
Vice President of Goldman, Sachs & Co., where he was a security analyst
specializing in the real estate and building industries. He is a founder of the
Real Estate Analysts Group and the Real Estate Investment Trust Analysts
Association. Mr. Mark serves as a member of the advisory board of Harvard Law
School, from which he graduated in 1964. He also serves as a trustee of the
Brooklyn College Foundation, a member of the board of Guild Hall, and a member
of the advisory board of Empower America, an economically growth-oriented think
tank and advocacy group.
Robert Michaels, 58, has served as a director of our company and as our
President and Chief Operating Officer since 1995. In addition, Mr. Michaels has
served and continues to serve as a director and/or officer of various of our
affiliates and wholly-owned subsidiaries. Mr. Michaels also serves on the board
of directors of the Center for Urban Land Economics Research at the School of
Business of the University of Wisconsin-Madison and the board of trustees of the
University of South Dakota Foundation.
3
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2004:
John Bucksbaum, 45, has served as a director of our company since 1992, and
has served as our Chief Executive Officer since July 1999. From December 1992
through June 1999, Mr. Bucksbaum served as Executive Vice President of our
company. In addition, Mr. Bucksbaum has served and continues to serve as a
director and/or officer of various of our affiliates and wholly-owned
subsidiaries. Mr. Bucksbaum is a member of the board of governors of NAREIT, the
executive committee of the National Realty Council, the policy advisory board of
the University of California Real Estate Center and the executive committee of
the Wharton School Advisory Board. He also serves as a trustee of the
International Council of Shopping Centers and the Urban Land Institute. Mr.
Bucksbaum is the son of Matthew Bucksbaum, the Chairman of the Board of our
company.
Alan Cohen, 41, has served as Vice President, Marketing of Tahoe Networks,
Inc., a company specializing in networking infrastructure and operations
solutions, since October 2001. From March 2000 to October 2001, Mr. Cohen served
as Senior Director, Marketing, Service Provider Line of Business of Cisco
Systems, Inc., a provider of Internet networking solutions. From June 1999 to
March 2000, Mr. Cohen served as General Manager, SP Solutions, in Cisco's
Customer Advocacy division and from June 1998 to June 1999, as Cisco's Director
of Internet Business Solutions. Prior to joining Cisco, Mr. Cohen was employed
by International Business Machines Corporation, an information technology
company, acting in the capacity of Chief Marketing Executive for IBM's Global
Telecommunications and Media business unit from January 1997 to June 1998 and
Managing Director of B2B Electronic Commerce for IBM's Internet division from
June 1995 to January 1997. Mr. Cohen serves on the advisory boards of Vista
Broadband Networks, Inc., an Internet service provider, and CPlane, Inc., a
company specializing in network control software products.
Anthony Downs, 71, has served as a director of our company since 1993.
Since 1977, Mr. Downs has been a Senior Fellow at The Brookings Institution, a
private, non-profit policy research center, and a self-employed speaker and
writer. Mr. Downs served as an executive consultant to Salomon Brothers Inc.
from 1986 to 1994 and to Aetna Realty Investors from 1977 to 1994. Mr. Downs is
a trustee of the Urban Land Institute and the Urban Institute, and is a director
of the National Housing Partnerships Foundation, the NAACP Legal and Education
Defense Fund, Inc. and the Counselors of Real Estate. He is also a director of
Bedford Property Investors, Inc. and Massachusetts Mutual Life Insurance
Company.
BOARD STRUCTURE AND COMPENSATION
BOARD OF DIRECTORS AND BOARD COMMITTEES
Our board of directors has a standing audit committee and compensation
committee to assist the board in the discharge of its responsibilities. The
board has no nominating committee; rather, the board of directors as a whole
performs the functions which would otherwise be delegated to such a committee.
During 2001, the board of directors held ten meetings and took action by written
consent seven times. With the exception of Mr. Mark, all of the directors
attended at least 75% of all the meetings of the board and those committees on
which he or she served during 2001.
The functions of the audit committee include recommending the engagement of
our independent auditors and reviewing with our auditors the scope of audit and
non-audit assignments and related fees, accounting principles we use in
financial reporting, internal auditing procedures, the adequacy of our internal
control procedures and the independence of our auditors. The members of the
audit committee are Messrs. Downs and Mark and Ms. Stewart (Chair), each of whom
is an "independent" director as defined in the listing standards of the New York
Stock Exchange. The audit committee met four times during 2001.
The functions of the compensation committee include determining the
compensation for our Chief Executive Officer, approving the compensation for our
other executive officers and administering our Employee Stock Purchase Plan, as
well as our 1993 Stock Incentive Plan (the "1993 Plan"), our Cash Value Added
Incentive Compensation Plan (the "CVA Plan"), the 1998 Incentive Plan and all
other executive compensation plans which we may adopt from time to time. During
fiscal 2001, the compensation committee
4
was comprised of Messrs. Matthew Bucksbaum (Chair) and Downs and Ms. Stewart.
Effective March 25, 2002, Mr. Bucksbaum resigned from the committee, at which
time the committee was reconstituted to consist of Messrs. Cohen and Downs
(Chair) and Ms. Stewart. The compensation committee met twice during 2001.
COMPENSATION OF DIRECTORS
Directors who are also our employees receive no fees for their services as
directors. Outside directors receive an annual fee of $25,000, a meeting fee of
$1,000 for each board or committee meeting attended, and reimbursement of
expenses incurred in attending meetings.
Under the 1993 Plan, all outside directors are entitled to receive, upon
joining the board of directors, an option to purchase 1,000 shares of our common
stock having an exercise price equal to the fair market value of a share of our
common stock on the date of grant. In addition, under the 1993 Plan, each
outside director automatically receives on the first business day in January of
every year, an option to purchase 1,000 shares of our common stock having an
exercise price equal to the fair market value of a share of our common stock on
the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the compensation committee have any "interlocking"
relationships as defined by the Securities and Exchange Commission (the "SEC"),
in that none of them serve on the board of directors or compensation committee
of any other company where an executive officer of that company is on the board
of directors or compensation committee of our company. Matthew Bucksbaum,
Chairman of the Board and member of the compensation committee until March 25,
2002, was the only member of the compensation committee who is a present or
former officer or employee of our company or of GGP Limited Partnership, the
partnership in which we own an approximate 76% partnership interest and of which
we are the sole general partner (the "Operating Partnership").
FEES OF INDEPENDENT AUDITORS AND AUDIT COMMITTEE REPORT
FEES BILLED BY INDEPENDENT AUDITORS
The aggregate fees billed or to be billed to the company by Deloitte &
Touche LLP, the company's principal independent auditors, for the fiscal year
ended December 31, 2001 were as follows:
AUDIT FEES: for services rendered for the annual audit of
the company's consolidated financial statements for fiscal
2001 and the quarterly reviews of the financial statements
included in the company's Quarterly Reports on Form 10-Q $ 350,000
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION
FEES: for services rendered in connection with the design
and implementation of software systems that aggregate
source data underlying our financial statements.(1) 2,600,000
ALL OTHER FEES
Audit Related Fees: for other accounting and auditing
services primarily related to the company's private and
public offerings of debt and equity securities 575,000
Other Non-audit Related Fees: primarily related to tax
compliance and tax consulting services 375,000
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All Other Fees 950,000
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TOTAL SERVICES $3,900,000
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-------------------------
(1) The company retained Deloitte & Touche LLP to perform these services in
August 2000. Subsequently, in March 2001, upon the completion of a
competitive bid process in which several auditing firms (including
PricewaterhouseCoopers LLP) were invited to participate, our board of
directors approved the engagement of Deloitte & Touche LLP to serve as the
company's independent auditors for fiscal 2001 to
5
replace PricewaterhouseCoopers LLP, who previously served as the company's
independent auditors. See "Independent Auditors," below.
The following report of the audit committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other of our filings under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent we specifically incorporate this report by
reference therein.
REPORT OF THE AUDIT COMMITTEE
The audit committee of the board of directors is responsible for providing
independent, objective oversight of the company's accounting and system of
internal controls, the quality and integrity of the company's financial reports
and the independence and performance of the company's independent auditors. The
audit committee is comprised of independent directors and operates under a
written charter, a copy of which was attached as Appendix A to the proxy
statement for the company's annual meeting of stockholders held on May 8, 2001.
Management is responsible for the company's internal controls and the
financial reporting process. The independent auditors are responsible for
performing an independent audit of the company's financial statements in
accordance with generally accepted auditing standards and issuing a report on
those financial statements. The audit committee monitors and oversees these
processes.
In this context, the audit committee has reviewed and discussed the audited
financial statements for fiscal 2001 with management and with the independent
auditors. Specifically, the audit committee has discussed with the independent
auditors the matters required to be discussed by Statement on Auditing Standards
No. 61 (Communications with Audit Committees), as amended by Statements on
Auditing Standards Nos. 89 and 90.
The audit committee has also received the written disclosures and the
letter from the independent auditors required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees) and has
discussed with the independent auditors the issue of their independence from the
company and management. In addition, the audit committee has considered whether
the independent auditors' provision of information technology services or other
non-audit services to the company is compatible with maintaining the
independence of the auditors and has concluded that it is.
Based on its review of the audited financial statements and the various
discussions noted above, the audit committee recommended to the board of
directors that the audited financial statements be included in the company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
Respectfully submitted by the audit
committee,
Anthony Downs
Morris Mark
Beth Stewart (Chair)
6
STOCK OWNERSHIP
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following sets forth, as of March 15, 2002, certain information
concerning each stockholder who is known by us to beneficially own 5% or more of
our outstanding common stock. The table is based upon reports on Schedules 13D
or 13G filed by the stockholders with the SEC. Unless otherwise noted, each
stockholder has sole voting and investment power for all shares shown.
NUMBER OF SHARES APPROXIMATE
NAME AND ADDRESS BENEFICIALLY OWNED PERCENT OF CLASS
---------------- ------------------ ----------------
General Trust Company, as trustee........................... 18,399,153(1) 23.0%
300 North Dakota Avenue
Suite 202
Sioux Falls, South Dakota 57104
Cohen & Steers Capital Management, Inc...................... 7,185,925(2) 11.6%
757 Third Avenue
New York, New York 10017
LaSalle Investment Management (Securities), L.P............. 3,108,892(3) 5.0%
LaSalle Investment Management, Inc.
200 East Randolph Drive
Chicago, Illinois 60601
-------------------------
(1) Based on the Schedule 13G filed on February 13, 2002, this amount includes
18,057,257 shares of common stock issuable, in certain circumstances, upon
conversion of limited partnership units in the Operating Partnership, as
described in "Certain Relationships and Related Party Transactions." These
units are owned by a partnership, the general partners of which are various
trusts for which General Trust Company serves as trustee. The beneficiaries
of the trusts are members of the Bucksbaum family which, for purposes
hereof, include the descendants of Martin, Matthew and Maurice Bucksbaum,
including John Bucksbaum, Chief Executive Officer and a director of our
company.
(2) Based on the Schedule 13G filed on February 13, 2002, Cohen & Steers Capital
Management, Inc. has sole voting power with respect to 6,374,125 shares and
has sole dispositive power with respect to 7,185,925 shares.
(3) Based on the Schedule 13G filed on February 27, 2002, this amount represents
the aggregate number of shares beneficially owned by LaSalle Investment
Management (Securities), L.P. ("LIMS") and LaSalle Investment Management,
Inc. ("LaSalle") as a group. LIMS, excluding the shares beneficially owned
by LaSalle, reported beneficial ownership with respect to an aggregate of
2,598,692 shares, with sole voting power with respect to 125,700 shares,
shared voting power with respect to 2,382,392 shares, sole dispositive power
with respect to 93,600 shares and shared dispositive power with respect to
2,505,092 shares. LaSalle, excluding the shares beneficially owned by LIMS,
reported beneficial ownership of an aggregate of 510,200 shares, with sole
voting and dispositive power with respect to 132,000 shares and shared
dispositive power with respect to 378,200 shares.
EQUITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 15, 2002, by (a) each of our directors
and nominees for election as directors, (b) each of our executive officers named
in the Summary Compensation Table and (c) all of our directors and executive
officers as a group. Unless otherwise noted, each person named in the table has
sole voting and investment power for all shares shown.
7
For information regarding the beneficial ownership of our depositary shares
by each of the persons indicated above, we refer you to footnotes (5) and (9)
below.
DIRECTORS AND NUMBER OF SHARES APPROXIMATE
EXECUTIVE OFFICERS BENEFICIALLY OWNED PERCENT OF CLASS
------------------ --------------------- ----------------
Matthew Bucksbaum...................................... 1,152,912(1)(2) 1.9%
John Bucksbaum......................................... 159,149(1)(3)(4)(5) *
Alan Cohen............................................. 2,000(4) *
Anthony Downs.......................................... 8,942(4) *
Morris Mark............................................ 10,261(4)(6) *
Robert Michaels........................................ 204,352(7) *
Beth Stewart........................................... 6,500(4) *
Bernard Freibaum....................................... 967,924(5)(7)(8) 1.6%
Jean Schlemmer......................................... 22,212(4)(7) *
Joel Bayer............................................. 152,219(4)(7) *
All directors and executive officers as a group (11
persons)............................................. 2,779,163(9) 4.5%
-------------------------
* Represents less than 1% of our outstanding common stock.
(1) This amount does not include (i) shares of common stock beneficially owned
by General Trust Company (see "Common Stock Ownership of Certain Beneficial
Owners," above), or (ii) an aggregate of 960,000 shares of common stock
owned by a partnership, the general partners of which are various trusts for
the benefit of members of the Bucksbaum family for which CIBC Trust Company
(Bahamas) Limited serves as trustee.
(2) This amount includes 838,245 shares beneficially owned by Mr. Bucksbaum as
co-trustee of the Martin Bucksbaum Marital GST Trust and 114,236 shares held
by Mr. Bucksbaum in retirement accounts. However, this amount excludes 4,136
shares of common stock beneficially owned by Mr. Bucksbaum's spouse and
240,644 shares of common stock beneficially owned by the Matthew and Carolyn
Bucksbaum Family Foundation, as to which Mr. Bucksbaum disclaims beneficial
ownership.
(3) This amount does not include 4,293 shares of common stock beneficially owned
by Mr. Bucksbaum's spouse, as to which Mr. Bucksbaum disclaims beneficial
ownership.
(4) This amount includes shares of our common stock that such person has the
right to acquire within 60 days after the date of this table pursuant to
stock options awarded under the 1993 Plan. These amounts are as follows: Mr.
John Bucksbaum, 107,000 shares; Mr. Cohen, 2,000 shares; Mr. Downs, 5,500
shares; Mr. Mark, 3,000 shares; Ms. Stewart, 3,500 shares; Ms. Schlemmer,
14,150 shares; and Mr. Bayer, 70,000 shares.
(5) Mr. John Bucksbaum and Mr. Freibaum own 2,550 and 1,000 depositary shares,
respectively. Each depositary share represents 1/40 of a share of 7.25%
Preferred Income Equity Redeemable Stock, Series A and is immediately
convertible at the option of the holder into shares of common stock at a
conversion rate of 0.6297 shares of common stock for each depositary share.
Accordingly, the shares owned by Mr. Bucksbaum and Mr. Freibaum include,
respectively, 1,606 and 630 shares of common stock issuable upon conversion
of their depositary shares.
(6) This amount includes 1,375 shares beneficially owned by Mr. Mark as
co-trustee of a trust for the benefit of his mother and 736 shares
beneficially owned by Mr. Mark as a general partner of a family limited
partnership. However, this amount excludes 2,350 shares beneficially owned
by Mr. Mark's spouse, as to which Mr. Mark disclaims beneficial ownership.
(7) Does not include shares of our common stock that such person has the right
to acquire pursuant to stock options awarded under the 1998 Incentive Plan
which are not currently exercisable. For information related to awards made
under the 1998 Incentive Plan during 2001, see "Executive Compensation --
Long Term Incentive Plan Awards."
(8) This amount does not include an aggregate of 8,000 shares of common stock
beneficially owned by Mr. Freibaum's spouse and his children or an aggregate
of 5,038 shares of common stock issuable upon conversion of 8,000 depositary
shares beneficially owned by Mr. Freibaum's spouse and his children, as to
which Mr. Freibaum disclaims beneficial ownership.
8
(9) This amount includes an aggregate of 297,369 shares of common stock that our
directors and executive officers have the right to acquire within 60 days
after the date of this table pursuant to stock options awarded under the
1993 Plan and an aggregate of 2,235 shares of common stock issuable upon
conversion of an aggregate of 3,550 depositary shares which are immediately
convertible at the option of the holder.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and holders of more than 10% of our common stock
to file with the SEC reports regarding their ownership and changes in ownership
of our common stock. Based solely on our review of the reports furnished to us,
we believe that all of our directors, executive officers and 10% stockholders
complied with all Section 16(a) filing requirements during fiscal 2001.
EXECUTIVE OFFICERS
The executive officers of our company are as follows:
NAME AGE POSITION
---- --- --------
Matthew Bucksbaum....................... 76 Chairman of the Board
John Bucksbaum.......................... 45 Chief Executive Officer
Robert Michaels......................... 58 President and Chief Operating Officer
Bernard Freibaum........................ 49 Executive Vice President and Chief Financial Officer
Jean Schlemmer.......................... 55 Executive Vice President, Asset Management
Joel Bayer.............................. 38 Senior Vice President and Chief Investment Officer
Ronald L. Gern.......................... 43 Senior Vice President and Assistant Secretary
We refer you to "Election of Directors" above for biographical information
concerning Messrs. Matthew Bucksbaum, John Bucksbaum and Robert Michaels.
Biographical information concerning our other executive officers is set forth
below.
Bernard Freibaum has served as Executive Vice President and Chief Financial
Officer of our company since October 1993. In addition, Mr. Freibaum has served
and continues to serve as a director and/or officer of various of our affiliates
and wholly-owned subsidiaries. From August 1992 and prior to joining our
company, Mr. Freibaum was a consultant with Ernst & Young. From 1985 through
1992, Mr. Freibaum was Chief Financial Officer and General Counsel of Stein &
Company, a real estate development and service company. From 1973 through 1985,
Mr. Freibaum held various positions with Ernst & Young, American Invsco Corp.
and Coopers & Lybrand L.L.P.
Jean Schlemmer has served as Executive Vice President, Asset Management of
our company since April 2000. In addition, Ms. Schlemmer serves as an officer of
one of our wholly-owned subsidiaries. Ms. Schlemmer also served as our Senior
Vice President, Asset Management from September 1997 to April 2000, our Senior
Vice President of Leasing from 1995 to September 1997, and our Vice President of
Leasing from 1989 to 1995. Prior to such time, Ms. Schlemmer was the Vice
President of Leasing for The Center Companies from 1986 to 1989 and, from 1984
to 1986, was the President of her own real estate company.
Joel Bayer has served as Senior Vice President and Chief Investment Officer
of our company since May 2001, Senior Vice President -- Acquisitions of our
company from March 1998 to May 2001 and as Vice President of our company from
September 1993 to March 1998. In addition, Mr. Bayer has served and continues to
serve as a director and/or officer of various of our affiliates and wholly-owned
subsidiaries. From July 1988 through August 1993, Mr. Bayer held various
positions with Equity Financial and Management Company.
Ronald L. Gern has served as Senior Vice President and Assistant Secretary
of our company since December 1997. In addition, Mr. Gern has served and
continues to serve as a director and/or officer of various of our affiliates and
wholly-owned subsidiaries. From 1985 to November 1997, Mr. Gern was employed by
Kravco Company, a shopping center management and development company, acting in
the capacity of Vice
9
President and General Counsel from 1990 to November 1997, and Counsel from 1985
to 1990. From 1982 to 1985, Mr. Gern was associated with the law firm of Wolf,
Block, Schorr & Solis-Cohen.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table discloses compensation received by our Chairman of the
Board, our Chief Executive Officer and our four other most highly compensated
executive officers (together, the "named executive officers") in the three most
recent years.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
----------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ----------- --------------
-------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING LTIP
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) COMPENSATION ($) OPTIONS (#) PAYOUTS ($)(2)
--------------------------- ---- ---------- ------------ ---------------- ----------- --------------
Matthew Bucksbaum............ 2001 $200,000 -- -- -- --
Chairman of the Board 2000 $200,000 -- -- -- --
1999 $200,000 -- -- -- --
John Bucksbaum............... 2001 $225,000 -- -- -- --
Chief Executive Officer 2000 $225,000 -- -- -- --
1999 $225,000 -- -- 40,000 --
Robert Michaels.............. 2001 $550,000 $265,095 -- 86,236 $ 80,113
President and Chief 2000 $500,000 $253,052 -- 21,755 $114,170
Operating Officer 1999 $450,000 $361,363 -- 30,246 $ 34,058
Bernard Freibaum............. 2001 $750,000 $361,494 -- 89,607 $ 80,113
Executive Vice President 2000 $500,000 $328,968 150,000(3) 121,755 $114,170
and Chief Financial Officer 1999 $450,000 $361,363 -- 30,246 $ 34,058
Jean Schlemmer............... 2001 $325,000 $156,648 -- 31,180 $ 33,728
Executive Vice President, 2000 $275,000 $139,179 -- 10,477 $ 49,491
Asset Management 1999 $240,000 $183,728 -- 14,577 $ 15,763
Joel Bayer................... 2001 $360,000 $173,518 -- 7,191 $ 53,408
Senior Vice President and 2000 $320,000 $161,954 -- 14,504 $ 58,611
Chief Investment Officer 1999 $300,000 $240,908 -- 12,757 $ 5,203
-------------------------
(1) With the exception of amounts shown for John Bucksbaum, these bonuses
represent amounts earned under the CVA Plan for the year shown and paid
during the following year. For each of Mr. Michaels, Mr. Freibaum, Ms.
Schlemmer and Mr. Bayer, respectively, additional amounts of (i) $160,225,
$160,225, $67,456 and $106,817 were credited to a bonus bank for 1999, half
of which was earned during each of 2000 and 2001, and (ii) $68,115, $68,115,
$31,526 and $10,407 were credited to a bonus bank for 1998, half of which
was earned during each of 1999 and 2000. See footnote (2) below. The amounts
credited to the "bonus bank" are "at risk" in the sense that they will
either be earned by such persons over the following two years or forfeited,
depending, primarily, on the extent to which future annual financial
performance goals under the CVA Plan are achieved. See "Report of the
Compensation Committee on Executive Compensation" for a description of the
CVA Plan.
(2) The long-term incentive plan ("LTIP") payouts reported in this column
represent amounts previously credited to an individual's bonus bank for 1998
and 1999 (see footnote (1) above) that were earned during the year shown and
paid during the following year.
(3) This amount represents the forgiveness of a portion of certain indebtedness
owed by Mr. Freibaum to our company. See "Certain Relationships and Related
Party Transactions."
10
OPTION GRANTS
The following table provides information on grants of options under the
1993 Plan to the named executive officers during 2001. For information related
to awards made under the 1998 Incentive Plan to the named executive officers
during 2001, see "Long Term Incentive Plan Awards," below.
OPTION GRANTS IN 2001
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR PER SHARE DATE VALUE(1)
---- ---------- ------------- ----------- ---------- ----------
Matthew Bucksbaum..................... -- -- -- -- --
John Bucksbaum........................ -- -- -- -- --
Robert Michaels....................... 75,000 35.2% $33.945 2/12/11 $229,500
Bernard Freibaum...................... 75,000 35.2% $33.945 2/12/11 $229,500
Jean Schlemmer........................ 25,000 11.7% $33.945 2/12/11 $ 76,500
Joel Bayer............................ -- -- -- -- --
-------------------------
(1) This amount was estimated using the Black-Scholes Option Pricing Formula on
the basis of the following assumptions: expected volatility: 19.48%; risk
free rate of return: 4.90%; dividend yield: 6.81%; and expected time until
exercise: 4.5 years.
OPTION EXERCISES AND YEAR-END VALUES
The following table provides information on option exercises during 2001 by
each of the named executive officers and the value of each of such officer's
unexercised in-the-money options at December 31, 2001.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NO. OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT YEAR-END AT YEAR-END
ACQUIRED VALUE --------------------------- ---------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------- ---------- ----------- ------------- ----------- -------------
Matthew Bucksbaum.... -- -- -- -- -- --
John Bucksbaum....... -- -- 99,000 16,000 $968,640 $ 105,760
Robert Michaels...... 155,000 $1,055,725 0 108,237 $ 0 $ 671,510
Bernard Freibaum..... 155,000 $ 463,050 0 171,608 $ 0 $1,215,122
Jean Schlemmer....... -- -- 15,650 62,975 $ 50,191 $ 294,212
Joel Bayer........... 20,000 $ 100,000 70,000 34,452 $633,150 $ 248,126
On December 31, 2001, the closing price per share of our common stock on
the New York Stock Exchange was $38.80.
11
LONG TERM INCENTIVE PLAN AWARDS
The following table provides information on awards under the 1998 Incentive
Plan to the named executive officers during 2001.
LONG TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
NO. OF SECURITIES PERFORMANCE OR
UNDERLYING OTHER PERIOD
OPTIONS UNTIL MATURATION
NAME GRANTED (1) OR PAYOUT (2)
---- ----------------- ----------------
Matthew Bucksbaum........................................... 0 --
John Bucksbaum.............................................. 0 --
Robert Michaels............................................. 11,236 --
Bernard Freibaum............................................ 14,607 --
Jean Schlemmer.............................................. 6,180 --
Joel Bayer.................................................. 7,191 --
-------------------------
(1) Awards granted during 2001 under the 1998 Incentive Plan are in the form of
threshold-vesting stock options ("TSOs"), which, when vested, are
exercisable for shares of common stock. The exercise price of each of the
TSOs shown in this column is $34.725 per share, the fair market value of one
share of common stock on the date of grant.
(2) The TSOs will vest, and therefore will become exercisable, if shares of
common stock achieve and sustain a threshold market price of $48.704 per
share for at least 20 consecutive trading days at any time over the five
years following the date of grant (i.e., on or before April 10, 2006). If
the TSOs do not vest by April 10, 2006, they will be forfeited. If, however,
the TSOs vest by this date, they will be exercisable until April 10, 2011,
at which time they will expire. As of March 15, 2002, none of the TSOs had
vested.
STANDARD EMPLOYEE BENEFITS
During 2001, we contributed toward the cost of health, life and disability
insurance for our employees as part of a standard employee benefit package. We
also provided employees the opportunity to contribute pre-tax salary (subject to
applicable limitations) to a company-sponsored 401(k) plan. Messrs. Matthew
Bucksbaum, John Bucksbaum, Michaels, Freibaum, and Bayer and Ms. Schlemmer chose
to contribute a portion of their respective salaries to the 401(k) plan during
2001, and we made a matching contribution of $8,500 on behalf of each of them.
The following report of the compensation committee on executive compensation and
the performance graph included elsewhere in this proxy statement do not
constitute soliciting material and should not be deemed filed or incorporated by
reference into any other of our filings under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent we specifically
incorporate this report or the performance graph by reference therein.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
GENERAL. The company's executive compensation program is administered by
the compensation committee of the board of directors. During fiscal 2001, the
compensation committee was comprised of Matthew Bucksbaum, Anthony Downs and
Beth Stewart. Effective March 25, 2002, Matthew Bucksbaum resigned from the
compensation committee, at which time the committee was reconstituted to consist
of Alan Cohen, Anthony Downs and Beth Stewart. The compensation committee is
responsible for determining the level of compensation paid to our Chief
Executive Officer (with Matthew Bucksbaum historically abstaining), approving
the level of compensation paid to our other executive officers and determining
awards under, and administering, our Employee Stock Purchase Plan, the 1993
Plan, the CVA Plan and the 1998 Incentive Plan. The compensation committee is
also responsible for reviewing and establishing all other executive compensation
plans which the company may adopt from time to time.
12
EXECUTIVE COMPENSATION POLICY. The company's compensation policy for
executive officers consists of three key elements:
- a base salary,
- a performance-based annual bonus comprised of both cash and stock
options, and
- periodic grants of stock options.
The compensation committee believes that this three-part approach best
serves the interests of the company and its stockholders. It enables the company
to recruit and retain highly-qualified individuals by providing them with a
compensation package which is competitive and has financial incentives which are
aligned with the company's performance. Under this approach, compensation for
these officers involves a portion of pay that is "at risk" -- namely, the
annual cash and stock option bonus. The annual bonus is variable and is based on
a measure of company performance known as "cash value added," as described
below. Annual stock option awards relate a significant portion of an employee's
long-term remuneration directly to stock price appreciation realized by all of
the company's stockholders.
BASE SALARY. In establishing the base salary paid to each of our executive
officers for fiscal 2001, the compensation committee reviewed the compensation
paid by comparable REITs to their executive officers and determined it to be in
the best interests of the company and our stockholders for our executive
officers generally to be in the lower-to-mid portion of the range. The
compensation committee also took into account such factors as a subjective
assessment of the nature of the position, the contribution and experience of the
executive officer, and the length of the executive officer's service to the
company.
ANNUAL BONUS. Since its adoption in 1998, bonus awards for the company's
executive officers have generally been determined in accordance with the CVA
Plan. The purpose of the CVA Plan is to provide additional incentive
compensation to participants by relating the financial reward of such
participants to the increase in the value of the company realized by its
stockholders. To date, various members of management of the company and certain
of its subsidiaries (excluding Matthew Bucksbaum and John Bucksbaum) have been
designated by the compensation committee as participants under the CVA Plan.
In general, "cash value added" or "CVA" is determined to be the excess of
net operating income less a capital charge that is intended to represent the
return expected by the providers of the company's capital. The compensation
committee believes that increases in CVA represent a performance standard that
is closely coordinated with increases in stockholder value.
The CVA Plan is intended to provide a target incentive award generally
ranging from between 5% and 50% of salary for participants. Under the CVA Plan,
the annual bonus award for a participant for a particular year is generally
equal to base salary x target incentive award x performance factor (although the
compensation committee may retain discretion to determine whether a participant
receives all or a portion of such award). The performance factor is determined
by reference to the amount of improvement or deterioration in CVA measured
against established targets based, in part, on prior performance. The
performance factor calculation will produce an amount in excess of the target
incentive award if actual CVA exceeds targeted CVA and will produce an amount
which is less than the target incentive award if actual CVA is less than
targeted CVA.
The CVA Plan provides the opportunity for enhanced bonuses, but also uses a
"bonus bank" feature to ensure that increases in CVA are sustained before
extraordinary bonus awards are paid out. Each year, two-thirds of any annual
bonus award in excess of 125% of the target incentive award is added to the
outstanding bonus bank balance. The bonus paid to a participant is equal to the
annual bonus award for the year, up to a maximum of 125% of the target incentive
award, plus one-third of the annual bonus award in excess of 125% of the target
incentive award. In addition, amounts added to the bonus bank in any year are
paid in equal installments over the following two years, unless that amount is
forfeited under the "at risk" rules of the CVA Plan. A bonus bank balance is
considered "at risk" in the sense that in any year the annual bonus award is
negative, the negative annual bonus award amount will be subtracted from the
outstanding bonus bank balance.
13
Our 1998 Incentive Plan generally has been integrated with the CVA Plan.
Under the 1998 Incentive Plan, the compensation committee is authorized to grant
to employees of the company, its subsidiaries and affiliates (other than Matthew
Bucksbaum and John Bucksbaum) stock incentive awards in the form of
threshold-vesting stock options ("TSOs"). In any particular year, the number of
TSOs to be granted to a participant under the 1998 Incentive Plan will be
determined, generally, by multiplying a participant's annual bonus award under
the CVA Plan by a percentage specified by the compensation committee and then
dividing the resulting amount by 10% of the fair market value of a share of
common stock on the date the option is granted. An option granted under the plan
generally vests after the fair market value of a share of common stock has
sustained a target price level for at least 20 consecutive trading days within
the five-year period following the date of grant of the option. A general
description of our 1998 Incentive Plan can be found under "Approval of Amendment
to 1998 Incentive Stock Plan," below.
Compensation under the 1998 Incentive Plan is intended to reinforce the
attainment of annual performance goals while encouraging sustained profitable
long-term growth. We believe that the 1998 Incentive Plan accomplishes this by
providing a portion of annual compensation in options to purchase common stock,
the vesting of which is tied directly to a sustained increase in our economic
value to our stockholders. By doing so, the 1998 Incentive Plan aligns the
interests of our management employees with those of our stockholders. Based upon
the recommendation of the compensation committee, our board of directors has
approved an increase in the number of shares of common stock reserved for
issuance under the 1998 Incentive Plan, subject to stockholder approval of such
increase at the annual meeting. See "Approval of Amendment to 1998 Incentive
Stock Plan," below.
OTHER STOCK OPTIONS AWARDS. Stock options have historically been an
important element of our compensation program and have generally been awarded to
our executive officers either as an inducement to join our company or in
recognition of exceptional performance. Particular awards have generally been
made without specific reference to any aspect of the company's performance at
such time. Rather, the Chief Executive Officer and President have historically
recommended to the compensation committee the size of a particular award under
the 1993 Plan based upon their subjective assessments of factors such as job
responsibilities undertaken and efforts expended on behalf of the company,
contributions to the company and leadership qualities. Options granted to
executive officers pursuant to the 1993 Plan have an exercise price equal to the
fair market value of the common stock on the date of grant, are for 10-year
terms and are generally exercisable in either 33 1/3% or 20% annual increments
from the date of grant.
COMPENSATION OF MATTHEW AND JOHN BUCKSBAUM. In establishing the
compensation to be paid to each of Matthew Bucksbaum and John Bucksbaum, the
compensation committee (with Matthew Bucksbaum abstaining), noted that their
salaries were originally established at subjective levels prior to the company's
initial public offering in 1993 and had only been moderately adjusted since such
time. The committee also recognized the unique position occupied by each of
Matthew Bucksbaum and John Bucksbaum by virtue of the Bucksbaums' ownership of
an approximate 19.1% limited partnership interest in the Operating Partnership
(subject to dilution in certain circumstances) and their rights to increase
their ownership in the company, primarily as trust beneficiaries, to 25% of our
outstanding common stock by converting a portion of the units representing their
limited partnership interest in the Operating Partnership into shares of common
stock. See "Stock Ownership -- Common Stock Ownership of Certain Beneficial
Owners," "Stock Ownership -- Equity Ownership of Management," and "Certain
Relationships and Related Party Transactions." Accordingly, the compensation
paid to Matthew Bucksbaum and John Bucksbaum during 2001 was not based upon, and
had no specific relation to, the company's performance during such period.
14
INTERNAL REVENUE CODE SECTION 162(M). As one of the factors in its review
of compensation matters, the compensation committee considers the anticipated
tax treatment to our company and to our executives of various payments and
benefits. The deductibility of some types of compensation payments depends upon
the timing of an executive's vesting or exercise of previously granted rights.
Furthermore, interpretations of and changes in the tax laws and other factors
beyond the compensation committee's control also affect the deductibility of
compensation. For these and other reasons, the committee will not necessarily
limit executive compensation to that deductible under Section 162(m) of the
Internal Revenue Code. The compensation committee will consider various
alternatives to preserving the deductibility of compensation payments and
benefits to the extent reasonably practicable and to the extent consistent with
its other compensation objectives.
Respectfully submitted by the
compensation committee,
Matthew Bucksbaum (Chair)(1)
Alan Cohen (2)
Anthony Downs (Chair)(3)
Beth Stewart
-------------------------
(1) Chair and member until March 25, 2002.
(2) Member effective March 25, 2002.
(3) Chair effective March 25, 2002.
15
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our company is the general partner of the Operating Partnership and
currently the owner of an approximate 76% interest in the Operating Partnership.
Members of the Bucksbaum family currently own an approximate 19.1% limited
partnership interest in the Operating Partnership (subject to dilution in
certain circumstances) and certain rights to increase their ownership in our
company, primarily as trust beneficiaries, by converting a portion of the units
representing their interests in the Operating Partnership into shares of our
common stock until they own up to 25% of the outstanding common stock and,
subject to certain limitations, by selling their remaining interests in the
Operating Partnership to us for cash or common stock, or a combination thereof,
at our election.
We have made a loan program available to our executive officers in order to
facilitate their exercise of options to purchase shares of our common stock.
Under the loan program, an executive officer is eligible to receive a loan in
the amount of the exercise price of the options and/or the income taxes owing in
connection with the exercise of the options. In this regard, certain of our
executive officers have issued notes to us in connection with their exercise of
stock options. Specifically, Mr. Freibaum has issued a note in the aggregate
principal amount of $16,470,975 (which gives effect to the forgiveness of
$150,000 of previous indebtedness and an additional loan of $75,000 to enable
Mr. Freibaum to pay taxes relating to such forgiveness), of which $1,669,875
represents withholding taxes paid by us on behalf of Mr. Freibaum, relating to
his exercise during the last several years of options to purchase an aggregate
of 555,000 shares of our common stock. As of March 31, 2002, the outstanding
balance on Mr. Freibaum's note was $16,547,883, including $76,908 of accrued
interest.
In addition, Mr. Bayer has issued a note to us in the aggregate principal
amount of $1,614,336, of which $199,336 represents withholding taxes paid by us
on behalf of Mr. Bayer, relating to his exercise during the last several years
of options to purchase an aggregate of 65,000 shares of our common stock. As of
March 31, 2002, the outstanding balance on Mr. Bayer's note was $1,620,504,
including $6,168 of accrued interest.
Mr. Michaels has also issued a note to us in the aggregate principal amount
of $6,001,106, of which $373,256 represents withholding taxes paid by us on
behalf of Mr. Michaels, relating to his exercise during 2001 and February 2002
of options to purchase an aggregate of 180,000 shares of our common stock. As of
March 31, 2002, the outstanding balance on Mr. Michael's note was $6,023,453,
including $22,347 of accrued interest.
These notes, which bear interest at a rate computed as a formula of a
market rate (3.10% per annum at December 31, 2001) adjusted quarterly, are full
recourse to the executive officers, are collateralized by the shares of common
stock issued upon the exercise of such options, provide for quarterly payments
of interest and are payable to us on demand.
In December 2001, we issued and sold to the public an aggregate of
9,200,000 shares of our common stock at an initial public offering price of
$37.95 per share. A partnership, the general partners of which are trusts for
the benefit of members of the Bucksbaum family (for which an independent third
party serves as trustee), purchased an aggregate of 960,000 shares of common
stock in this offering and Mr. Freibaum purchased an aggregate of 305,000 shares
of common stock. The price paid by each such purchaser was $37.95 per share. No
loans were made by the company to assist either purchaser with the purchase of
such shares.
General Growth Companies, Inc., a Delaware corporation whose sole
stockholder and director is Matthew Bucksbaum, owns a 25% undivided interest in
two airplanes which were used during 2001 for business travel by certain of our
executive officers, employees and third parties on company business. Aircraft
expenses incurred and paid or payable by us to General Growth Companies in
connection with such business travel during 2001 were approximately $288,245.
Because of the Internal Revenue Code's ownership requirements for REITs,
certain of our executive officers, certain trusts for the benefit of the
Bucksbaums and certain of our employees purchase, or in the case of employees,
receive as additional compensation, from time to time, a preferred stock
ownership interest in one or more private REITs in which our company and/or the
Operating Partnership has an interest. While the aggregate value of all such
preferred stock ownership interests may exceed $60,000 at any time, no
individual's ownership interest in such preferred stock exceeds $60,000 at any
time.
16
PERFORMANCE GRAPH
The graph below compares the five-year cumulative total stockholder return
assuming the investment of $100 on January 1, 1997 (and the reinvestment of
dividends thereafter) in each of our company's common stock, the S&P 500 Stock
Index, the NAREIT All Equity REIT Total Return Index and a peer index of
enclosed mall REITs (currently comprised of our company, CBL & Associates
Properties, Inc., Crown American Realty Trust, JP Realty, Inc., The Macerich
Company, Taubman Centers, Inc., Simon Property Group, Inc., Glimcher Realty
Trust, The Mills Corporation and The Rouse Company). The comparisons in the
graph below are not intended to forecast the possible future performance of our
common stock.
TOTAL RETURN PERFORMANCE
[PERFORMANCE GRAPH]
PERIOD ENDING
INDEX 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
General Growth Properties, Inc. 100.00 118.04 128.61 100.63 139.16 158.54
S&P 500 100.00 133.37 171.44 207.52 188.62 166.22
NAREIT All Equity REIT Index 100.00 120.26 99.21 94.63 119.59 136.24
General Growth Properties Peer Group 100.00 111.22 105.11 89.54 106.46 141.60
17
INDEPENDENT AUDITORS
Our board of directors has approved the engagement of Deloitte & Touche LLP
as the company's independent auditors for the fiscal year ending December 31,
2002. Deloitte & Touche LLP also served as the company's independent auditors
for the fiscal year ended December 31, 2001. A representative of Deloitte &
Touche LLP is expected to attend the annual meeting where he or she will be
available to respond to appropriate questions and, if he or she desires, to make
a statement.
On March 29, 2001, the company informed its previous independent auditors,
PricewaterhouseCoopers LLP ("PwC"), that it would no longer serve as the
company's independent auditors and, on the same date, our board of directors,
acting upon the recommendation of the audit committee, approved the engagement
of Deloitte & Touche LLP as independent auditors for fiscal 2001. The audit
reports of PwC on the consolidated financial statements of the company for the
fiscal years ended December 31, 1999 and 2000 did not contain any adverse
opinion or a disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles.
During the company's fiscal years ended December 31, 1999 and 2000 and the
subsequent interim period through March 29, 2001, there were no disagreements
with PwC on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to PwC's satisfaction, would have caused PwC to make reference to
the subject matter of such disagreements in connection with its audit reports.
APPROVAL OF AMENDMENT TO 1998 INCENTIVE STOCK PLAN
Our board of directors recommends that the stockholders approve an
amendment to the 1998 Incentive Plan to increase the number of shares of our
common stock available for issuance under the plan from 1,000,000 shares to
2,000,000 shares. Our board believes that the 1998 Incentive Plan plays an
important role in our company's efforts to attract and retain employees of
outstanding ability and encourages these individuals to take into account the
long-term interests of our company and its stockholders. Currently, over 500 of
our employees are participants in this plan.
The shares of common stock originally reserved for issuance under the plan
in 1998 are expected to be fully utilized by early 2003. Our board has approved
an increase in the number of reserved shares from 1,000,000 to 2,000,000,
subject to stockholder approval. Our board is not proposing any other change in
the terms of the plan at this time. Approval of this amendment requires the
affirmative vote of a majority of the shares of common stock represented at the
meeting in person or by proxy. In the event stockholder approval is not
obtained, we will not increase the number of shares reserved for issuance under
the plan, but awards may continue to be made under the terms of the plan as
currently in effect.
The following is a summary of the material terms of the 1998 Incentive
Plan. The summary is not complete, however, and is qualified by the terms of the
plan, a copy of which we have attached to this proxy statement as Appendix A.
GENERAL DESCRIPTION OF PLAN
Under the 1998 Incentive Plan, the compensation committee of our board of
directors is authorized to grant to employees of our company, its subsidiaries
and affiliates (other than Matthew Bucksbaum and John Bucksbaum) stock incentive
awards in the form of threshold-vesting stock options. As described in "Report
of the Compensation Committee on Executive Compensation," above, this plan
generally has been integrated with the CVA Plan.
In any particular year, the number of TSOs to be granted to a participant
under the 1998 Incentive Plan will be determined, generally, by multiplying the
annual bonus award to a participant under the CVA Plan by a percentage amount
(not exceeding 25%) selected by the compensation committee (such product is the
"percentage bonus amount") and then dividing the percentage bonus amount by 10%
of the fair market value of a share of common stock on the date of grant. The
exercise price of the TSOs to be granted to a participant
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will be the fair market value of a share of common stock on the date the TSO is
granted. The threshold price which must be achieved in order for the TSO to vest
will be determined by multiplying the fair market value on the date of grant by
the estimated annual growth rate (currently set at 7% by the compensation
committee) and compounding the product over a five year period. Shares of our
common stock must achieve and sustain the threshold price for at least 20
consecutive trading days at any time over the five years following the date of
grant in order for the TSO to vest. All TSOs granted will have a term of 10
years but must vest within 5 years of the grant date in order to avoid
forfeiture.
In April 2000, we granted TSOs to our employees at an exercise price of
$29.96875 per share, the vesting of which was conditioned upon our common stock
achieving and sustaining a threshold price of $42.03 for at least 20 consecutive
trading days. These TSOs, covering an aggregate of 235,022 shares of our common
stock, vested on March 22, 2002.
PURPOSE OF THE PLAN
The purpose of the 1998 Incentive Plan is to give our company an advantage
in attracting, retaining and motivating employees and to provide us with the
ability to provide competitive incentives which are directly linked to the
profitability of our business and increases in stockholder value. Compensation
under the plan is intended to reinforce the attainment of annual performance
goals while encouraging sustained profitable long-term growth. We believe that
the plan accomplishes this by aligning the interests of employees with those of
the stockholders by providing a portion of annual compensation in options to
purchase common stock, the vesting of which is tied directly to a sustained
increase in our company's economic value to its stockholders which increase is
equal to or in excess of the estimated annual growth rate.
SHARES AVAILABLE UNDER THE PLAN
The aggregate number of shares of common stock which may be subject to TSOs
issued pursuant to the plan will be, after the proposed amendment is effective,
2,000,000, subject to certain customary adjustments to prevent dilution. If any
TSO or any portion of a TSO is terminated or surrendered for any reason without
being exercised, the shares subject to the unexercised portion of the TSO will
become available for subsequent TSO grants under the plan. The compensation
committee may grant TSOs until the earlier to occur of (1) TSOs covering all
shares authorized for issuance pursuant to the 1998 Incentive Plan have been
issued or (2) the 1998 Incentive Plan has been terminated.
PLAN ADMINISTRATION
The plan is administered by the compensation committee. The compensation
committee determines the participants in the CVA Plan who are also eligible for
awards under the 1998 Incentive Plan, establishes and may thereafter modify the
terms of such awards, establishes rules and guidelines relating to the 1998
Incentive Plan, and is entitled to take such other action as may be necessary
for the proper administration of the plan.
PLAN PARTICIPANTS
Employees of our company, its subsidiaries and affiliates who are
responsible for or contribute to the management, growth and profitability of our
company and who are selected by the compensation committee are eligible to be
granted awards under the plan. Currently, over 500 of our employees are
participants in the plan.
AWARDS AVAILABLE UNDER THE PLAN
TSOs granted under the plan are not intended to qualify as incentive stock
options under the Internal Revenue Code of 1986, as amended (the "Code"). The
term during which each TSO may be exercised is determined by the compensation
committee, but no TSO may be exercised more than ten years after the date of
grant.
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TRANSFERABILITY OF OPTIONS
TSOs granted under the plan may be exercised during a participant's
lifetime, only by the participant, his or her guardian or legal representative
and are not transferable except by will or the laws of descent and distribution
or pursuant to a qualified domestic relation order (as defined in the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder (collectively, "ERISA")).
TERMINATION, AMENDMENT AND ERISA STATUS
The plan will remain in effect through 2008, unless terminated earlier by
our board of directors. The plan provides that the board may generally amend,
alter or discontinue the plan and the compensation committee may prospectively
or retroactively amend and modify any or all of the terms of the awards under
the plan, including, without limitation, the estimated annual growth rate and/or
the threshold vesting criteria, or take into account changes in law, tax and
accounting rules without further stockholder action, but no such amendment or
modification may adversely affect or in any way impair the rights of a
participant under any award previously granted without such participant's
consent.
The 1998 Incentive Plan is not subject to the provisions of ERISA.
ANTIDILUTION PROVISIONS
The number of shares of common stock authorized to be issued pursuant to
TSOs to be granted and outstanding under the plan (and the purchase or exercise
price thereof) may be adjusted to prevent dilution or enlargement of rights in
the event of any stock dividend, reorganization, reclassification,
recapitalization, stock split, combination, merger, consolidation or other
relevant capitalization change.
1998 INCENTIVE STOCK PLAN TABLE
Set forth below is a summary of the awards made under the 1998 Incentive
Plan since its inception until March 15, 2002, to the following named executive
officers:
NO. OF SHARES
UNDERLYING
TSOS
NAME AND POSITION GRANTED
----------------- -------------
Matthew Bucksbaum
Chairman of the Board..................................... 0
John Bucksbaum
Chief Executive Officer................................... 0
Robert Michaels
President and Chief Operating Officer..................... 71,260
Bernard Freibaum
Executive Vice President and Chief Financial Officer...... 77,548
Jean Schlemmer
Executive Vice President, Asset Management................ 35,975
Joel Bayer
Senior Vice President and Chief Investment Officer........ 39,703
Since adoption of the 1998 Incentive Plan:
- all current executive officers, as a group, have been granted TSOs under
the plan covering 248,887 shares of common stock, which represents
approximately 22% of the total number of TSOs granted under the plan; and
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- certain exempt employees, excluding executive officers, as a group (over
500 persons) have been granted TSOs under the plan covering 736,797
shares of common stock, which represents approximately 64% of the total
number of TSOs granted under the plan.
On March 15, 2002, the closing price per share of our common stock on the
New York Stock Exchange was $43.95.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income tax
consequences of the grant and exercise of TSOs granted under the plan and the
subsequent disposition of shares acquired upon such exercise. This summary is
not intended to be exhaustive and does not describe all Federal, state or local
tax laws.
TAXATION OF OPTIONS. TSOs are not intended to qualify under Section 422 of
the Code. A participant will not realize any income upon the grant of a TSO.
Upon the participant's exercise of a TSO, however, the amount by which the fair
market value of the shares of common stock received upon the exercise of such
option ("Option Stock") on the date of exercise exceeds the exercise price
(i.e., the "spread") will be taxed as ordinary income to the participant and the
company will be entitled to a deduction in an equal amount, which may be limited
by Section 162(m) of the Code. The participant and the company will also be
subject to employment taxes (i.e., Social Security and Medicare taxes) on the
spread. As a condition to the issuance of the Option Stock, the participant will
be required to arrange for payment to the company of the tax withholding
obligation which arises due to the participant's recognition of ordinary income
upon exercise of the TSO.
Upon subsequent sales of Option Stock, the participant may realize
short-term or long-term capital gain or loss, depending upon the holding period
of the shares, if such shares constitute capital assets in the participant's
hands. The gain or loss will be measured by the difference between the sales
price and the tax basis of the shares sold. The tax basis for this purpose will
be the sum of the exercise price and the amount of ordinary income realized by
the participant as a result of such exercise.
PAYMENT OF THE EXERCISE PRICE IN SHARES. If a TSO is exercised and payment
is made using previously acquired shares, a participant will not recognize gain
or loss with respect to such previously acquired shares. The participant's basis
in the newly acquired shares is the same as his or her basis in the previously
acquired shares, increased by the amount of any additional cash paid and the
ordinary income realized by the participant for Federal income tax purposes on
the exercise of the TSO.
Exercising a TSO using shares of common stock received upon the exercise of
an incentive stock option granted under an incentive stock option plan
maintained by the company ("ISO Stock") will not constitute a "disqualifying
disposition" of such ISO Stock. If, however, the shares of Option Stock are not
held for the balance of the required holding periods relating to the ISO Stock,
there will be a disqualifying disposition for Federal income tax purposes. The
disqualifying disposition will result in the recognition by the participant of
ordinary income equal to the excess of the fair market value of the ISO Stock at
the time such shares of ISO Stock were originally acquired over the exercise
price (but not in excess of the participant's gain).
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF AN
AMENDMENT TO OUR 1998 INCENTIVE STOCK PLAN.
STOCKHOLDER PROPOSALS
Notice of any stockholder proposal that is intended to be included in our
proxy statement and form of proxy for next year's annual meeting must be
received by us at our principal executive offices no later than December 7,
2002. Such notice must be in writing and must comply with the other provisions
of Rule 14a-8 under the Securities Exchange Act of 1934. In addition, the
persons named in the proxy for the next annual meeting will have discretionary
authority to vote with respect to any matter that is brought by any stockholder
during the meeting and that is not described in the proxy statement for such
meeting if we receive notice before February 7, 2003 or after March 9, 2003 that
such matter would be raised at the meeting. Any notices regarding shareholder
proposals must be received by us at our principal executive offices at 110 North
Wacker Drive, Chicago, Illinois, 60606, Attention: Secretary.
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APPENDIX A
GENERAL GROWTH PROPERTIES, INC.
1998 INCENTIVE STOCK PLAN
(AS AMENDED AND RESTATED AS OF FEBRUARY 6, 2002)
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the Plan is to give the Company a significant advantage in
attracting, retaining and motivating employees (other than Matthew Bucksbaum and
John Bucksbaum) and to provide the Company, its Affiliates and Subsidiaries with
the ability to provide competitive incentives which are directly linked to the
profitability of the Company's business and increases in stockholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
"Affiliate" means General Growth Management, Inc. and any other corporation
or other entity controlled by the Company and designated by the Committee as
such.
"Award" means a Threshold-Vesting Stock Option.
"Award Year" shall have the meaning set forth in the Cash Incentive Plan.
"Board" means the Board of Directors of the Company.
"Cash Incentive Plan" means the General Growth Properties, Inc. Cash Value
Added Incentive Compensation Plan.
"Cause" has the meaning set forth in Section 5(i).
"Change in Control" and "Change in Control Price" have the meanings set
forth in Sections 6(b) and (c) respectively.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
"Commission" means the Securities and Exchange Commission or any successor
agency.
"Committee" means the Committee referred to in Section 2.
"Common Stock" means common stock, par value $.10 per share, of the
Company.
"Company" means General Growth Properties, Inc., a Delaware corporation,
and its successors and assigns.
"Employer" means the Company and any Subsidiary or Affiliate whose
employees are participants in the Plan.
"Estimated Annual Growth Rate" means such rate as shall be established by
the Committee on the date a Stock Option is granted.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.
"Fair Market Value" means, as of any given date, the mean between the
highest and lowest reported sales prices of the Common Stock on the New York
Stock Exchange Composite Tape or, if not then listed on such exchange, on any
other national securities exchange on which the Common Stock is then listed or
on NASDAQ. If there is then no regular public trading market for such Common
Stock, the Fair Market Value of the Common Stock shall be determined by the
Committee in good faith.
"Measurement Year" shall have the meaning set forth in the Cash Incentive
Plan.
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"Non-Qualified Stock Option" means a Stock Option that is not an incentive
stock option as defined by Section 422 of the Code.
"Plan" means the General Growth Properties, Inc. 1998 Incentive Stock Plan,
as set forth herein and as hereinafter amended from time to time.
"Retirement" means retirement from active employment under a pension plan
of the Company, any Subsidiary or Affiliate, or under an employment contract
with any of them, or termination of employment at or after age 65 under
circumstances which the Committee, in its sole discretion, deems equivalent to
retirement.
"Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
"Subsidiary" means any corporation, partnership or other entity of which
the Company or any Subsidiary owns, directly or indirectly, a majority of the
voting power of the voting equity securities or a majority of the equity
interest and shall not be deemed to be a "subsidiary" for any other purpose.
"Termination of Employment" means the termination of the participant's
employment with the Company or any Subsidiary or Affiliate. A participant
employed by a Subsidiary or an Affiliate shall also be deemed to incur a
Termination of Employment if the Subsidiary or Affiliate ceases to be such a
Subsidiary or Affiliate, as the case may be, and the participant does not
immediately thereafter become an employee of the Company or another Subsidiary
or Affiliate.
"Total Disability" means complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which a
Participant was employed by an Employer when such total disability commenced,
all as determined by the Committee. All determinations as to the date and extent
of total disability of any Participant shall be made by the Committee, upon the
basis of such evidence, including independent medical reports and data, as the
Committee deems necessary and desirable, and all such determinations of the
Committee shall be final.
"Threshold Price" means the Fair Market Value of a share of Common Stock
multiplied by the Estimated Annual Growth Rate, compounded annually for a
five-year period.
"Threshold-Vesting Stock Option" or "Stock Option" means an option granted
under Section 5.
In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Compensation Committee of the Board
or such other committee appointed by and serving at the pleasure of the Board
(the "Committee"). If at any time no Committee shall be in office, the functions
of the Committee specified in the Plan shall be exercised by the Board.
The Committee shall have plenary authority to grant Awards pursuant to the
terms of the Plan to participants in the Cash Incentive Plan designated by the
Committee.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) to select the participants in the Cash Incentive Plan to whom
Awards under the Plan may from time to time be granted;
(b) to determine the number of shares of Common Stock to be covered by
each Award granted hereunder;
(c) to determine the terms and conditions of any Award granted
hereunder (including, but not limited to, subject to Section 5(a), the
option price, any vesting restriction or limitation and any vesting
acceleration or forfeiture waiver regarding any Award and the shares of
Common Stock relating thereto, based on such factors as the Committee shall
determine);
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(d) to modify, amend or adjust the terms and conditions of any Award,
at any time or from time to time;
(e) to determine to what extent and under what circumstances Common
Stock and other amounts payable with respect to an Award shall be deferred;
and
(f) to determine under what circumstances a Stock Option may be
settled in cash or Common Stock under Section 5(k).
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
The Committee may act with respect to the Plan only by a majority of its
members then in office, except that the members thereof may (i) delegate to an
officer of the Company the authority to make decisions pursuant to paragraphs
(c), (f), (g), (h) and (i) of Section 5 (provided that no such delegation may be
made that would cause Awards or other transactions under the Plan to cease to be
exempt from Section 16(b) of the Exchange Act) and (ii) authorize any one or
more of their number or any officer of the Company to execute and deliver
documents on behalf of the Committee.
Any determination made by the Committee or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Award shall be made
in the sole discretion of the Committee or such delegate at the time of the
grant of the Award or, unless in contravention of any express term of the Plan,
at any time thereafter. All decisions made by the Committee or any appropriately
delegated officer pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Company and Plan participants.
SECTION 3. COMMON STOCK SUBJECT TO PLAN.
Subject to adjustment as provided herein, the total number of shares of
Common Stock available for distribution pursuant to Awards under the Plan shall
be 2,000,000 shares of Common Stock. Shares subject to an Award under the Plan
may be authorized and unissued shares or may be treasury shares. If a Stock
Option is forfeited, expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant under the Plan (unless the Plan has
terminated).
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, extraordinary distribution with
respect to the Common Stock or other change in corporate structure affecting the
Common Stock, the Committee or Board may make such substitution or adjustments
in the aggregate number and kind of shares reserved for issuance under the Plan,
in the number, kind and option price of shares subject to outstanding Stock
Options and/or such other substitution or adjustments in the consideration
receivable upon exercise as it may determine to be appropriate in its sole
discretion; provided, however, that the number of shares subject to any Award
shall always be a whole number.
SECTION 4. ELIGIBILITY.
Employees of the Company, its Subsidiaries and Affiliates who are
responsible for or contribute to the management, growth and profitability of the
business of the Company, its Subsidiaries and Affiliates and who are designated
by the Committee are eligible to be granted Awards under the Plan.
SECTION 5. THRESHOLD-VESTING STOCK OPTIONS.
The Committee shall have the authority each Award Year to grant any
optionee Threshold-Vesting Stock Options after the Committee has determined the
Annual Bonus Awards under the Cash Incentive Plan based on the financial results
in the applicable Measurement Year. The number of Stock Options to be granted to
an
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optionee will be based on the optionee's Annual Bonus Award under the Cash
Incentive Plan in the current Award Year and shall be determined as follows:
Step One: the optionee's Annual Bonus Award under the Cash Incentive Plan
shall be multiplied by a percentage, not to exceed 25%, to be determined by the
Committee;
Step Two: the product obtained under Step One shall be divided by ten
percent (10%) of the Fair Market Value of a share of Common Stock on the date of
grant of the Stock Option.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve and shall constitute a Non-Qualified
Stock Option. Stock Options shall be evidenced by option agreements, the terms
and provisions of which may differ, to the extent permitted by the Plan. An
option agreement shall indicate on its face that it is intended to be a
Non-Qualified Stock Option. The grant of a Stock Option shall occur on the date
the Committee by resolution selects an individual to be a participant in any
grant of a Stock Option, determines the number of shares of Common Stock to be
subject to such Stock Option to be granted to such individual and specifies the
terms and provisions of the Stock Option. The Company shall notify a participant
of any grant of a Stock Option, and a written option agreement or agreements
shall be duly executed and delivered by the Company to the participant. Such
agreement or agreements shall become effective upon execution by the
participant.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock
purchasable under a Stock Option shall be the Fair Market Value of the
Common Stock subject to the Stock Option on the date of grant.
(b) Option Term. The term of each Stock Option shall be established
by the Committee and shall not exceed 10 years from the date the Stock
Option is granted.
(c) Exercisability. Threshold-Vesting Stock Options shall be
exercisable only after the Stock Option has vested. Vesting in such Stock
Options shall occur after the Fair Market Value of the Common Stock has
achieved and sustained the Threshold Price for at least 20 consecutive
trading days at any time during the five-year period following the date of
grant of the Stock Option, or at such time and under such conditions as are
determined by the Committee.
(d) Method of Exercise. Subject to the provisions of this Section 5,
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Company specifying
the number of shares of Common Stock subject to the Stock Option to be
purchased.
The option price of Common Stock to be purchased upon exercise of any Stock
Option shall be paid in full in cash (by certified or bank check or such other
instrument as the Company may accept) or, if and to the extent set forth in the
option agreement, may also be paid by one or more of the following: (i) in the
form of unrestricted Common Stock already owned by the optionee based in any
such instance on the Fair Market Value of the Common Stock on the date the Stock
Option is exercised; or (ii) by a combination thereof, in each case in the
manner provided in the option agreement.
In the discretion of the Committee, payment for any shares subject to a
Stock Option may also be made by delivering a properly executed exercise notice
to the Company, together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds to pay the
purchase price. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.
No shares of Common Stock shall be issued until full payment therefor has
been made. An optionee shall have all of the rights of a stockholder of the
Company holding the Common Stock that is subject to such Stock Option
(including, if applicable, the right to vote the shares and the right to receive
dividends), when the optionee has given written notice of exercise, has paid in
full for such shares and, if requested, has given the representation described
in Section 9(a).
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(e) Non-transferability of Stock Options. No Stock Option shall be
transferable by the optionee other than (i) by will or by the laws of
descent and distribution or (ii) pursuant to a qualified domestic relations
order (as defined in the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder). All Stock
Options shall be exercisable, during the optionee's lifetime, only by the
optionee or by the guardian or legal representative of the optionee or by
an alternate payee pursuant to such qualified domestic relations order, it
being understood that the terms "holder" and "optionee" include the
guardian and legal representative of the optionee named in the option
agreement and any person to whom an option is transferred by will or the
laws of descent and distribution or pursuant to a qualified domestic
relations order.
(f) Termination by Death. If an optionee's employment terminates by
reason of death, any Stock Option held by such optionee may thereafter be
exercised, to the extent then otherwise exercisable, for a period of one
year (or such other period as the Committee may specify in the option
agreement) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(g) Termination by Reason of Total Disability. If an optionee's
employment terminates by reason of Total Disability, any Stock Option held
by such optionee may thereafter be exercised by the optionee, to the extent
it was otherwise exercisable at the time of termination, for a period of
three years (or such shorter period as the Committee may specify in the
option agreement) from the date of such termination of employment or until
the expiration of the stated term of such Stock Option, whichever period is
the shorter; provided, however, that if the optionee dies within such
three-year period (or such shorter period), any unexercised Stock Option
held by such optionee shall, notwithstanding the expiration of such
three-year (or such shorter) period, continue to be exercisable to the
extent to which it was exercisable at the time of death for a period of one
year from the date of such death or until the expiration of the stated term
of such Stock Option, whichever period is the shorter.
(h) Termination by Reason of Retirement. If an optionee's employment
terminates by reason of Retirement, any Stock Option held by such optionee
may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of such Retirement or on such accelerated basis as
the Committee may determine, for a period of three years (or such shorter
period as the Committee may specify in the option agreement) from the date
of such termination of employment or until the expiration of the stated
term of the Stock Option, whichever period is the shorter; provided,
however, that if the optionee dies within such three-year (or such shorter)
period, any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such three-year (or such shorter) period,
continue to be exercisable to the extent to which it was exercisable at the
time of death for a period of one year from the date of such death or until
the expiration of the stated term of such Stock Option, whichever period is
the shorter.
(i) Other Termination. Unless otherwise determined by the Committee,
if there occurs a Termination of Employment for any reason other than
death, Total Disability, Retirement or Cause, any Stock Option held by such
Optionee shall thereupon terminate, except that such Stock Option, to the
extent then exercisable, or on such accelerated basis as the Committee may
determine, may, if such Termination of Employment is without Cause, be
exercised for one year from the date of such Termination of Employment or
the balance of such Stock Option's term; provided, however, that if the
optionee dies within such one-year period, any unexercised Stock Option
held by such optionee shall notwithstanding the expiration of such one-year
period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of one year from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of Termination of Employment
for Cause, any unexercised Stock Option held by such optionee shall expire
immediately upon the giving to the optionee of notice of such Termination
of Employment. Unless otherwise determined by the Committee, for the
purposes of the Plan, "Cause" shall mean (i) the conviction of the optionee
for committing a felony under Federal law or the law of the state in which
such action occurred, (ii) dishonesty in the course of fulfilling the
optionee's employment duties or (iii) willful
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and deliberate failure on the part of the optionee to perform his
employment duties in any material respect.
(j) Forfeitability and Termination. If a Threshold-Vesting Stock
Option does not vest during the five-year period following the date of
grant of the Stock Option, the Stock Option shall be forfeited and the
Shares covered by such Option shall revert to the Plan. If an optionee does
not exercise his Stock Option within the time period specified in the Plan,
the Stock Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
(k) Cashing Out of Stock Option. On receipt of written notice of
exercise, the Committee may elect to cash out all or any part of the shares
of Common Stock for which a Stock Option is being exercised by paying the
optionee an amount, in cash or Common Stock, equal to the excess of the
Fair Market Value of the Common Stock over the option price times the
number of shares of Common Stock for which the Stock Option is being
exercised on the effective date of such cash out.
(l) Change in Control Cash Out. Notwithstanding any other provision
of the Plan, during the 60-day period from and after a Change in Control
(the "Exercise Period"), unless the Committee shall determine otherwise at
the time of grant, an optionee shall have the right, whether or not the
Stock Option is fully exercisable and in lieu of the payment of the
exercise price for the shares of Common Stock being purchased under the
Stock Option and by giving notice to the Company, to elect (within the
Exercise Period) to surrender all or part of the Stock Option to the
Company and to receive cash, within 30 days of such notice, in an amount
equal to the amount by which the Change in Control Price per share of
Common Stock on the date of such election shall exceed the exercise price
per share of Common Stock under the Stock Option (the "Spread") multiplied
by the number of shares of Common Stock granted under the Stock Option as
to which the right granted under this Section 5(l) shall have been
exercised; provided, however, that if the Change in Control is within six
months of the date of grant of a particular Stock Option held by an
optionee who is an officer or director of the Company and is subject to
Section 16(b) of the Exchange Act no such election shall be made by such
optionee with respect to such Stock Option prior to six months from the
date of grant. Notwithstanding any other provision hereof, if the end of
such 60-day period from and after a Change in Control is within six months
of the date of grant of a Stock Option held by an optionee who is an
officer or director of the Company and is subject to Section 16(b) of the
Exchange Act, such Stock Option shall be cancelled in exchange for a cash
payment to the optionee, effected on the day which is six months and one
day after the date of grant of such Option, equal to the Spread multiplied
by the number of shares of Common Stock granted under the Stock Option.
SECTION 6. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. Notwithstanding any other provision of the Plan
to the contrary, in the event of a Change in Control any Stock Options
outstanding as of the date such Change in Control is determined to have
occurred and not then exercisable and vested shall become fully exercisable
and vested to the full extent of the original grant.
(b) Definition of Change in Control. For purposes of the Plan, a
"Change in Control" shall mean the happening of any of the following
events:
(i) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (1) the
then outstanding shares of common stock of the Company (the "Outstanding
Common Stock") or (2) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Voting Securities"); excluding,
however, the following: (1) any acquisition directly from the Company,
other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself acquired
directly from the Company, (2) any acquisition by the Company, or
members of the Company's management, or any combination thereof, (3) any
acquisition by any employee benefit
A-6
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any
Person pursuant to a transaction which complies with clauses (1), (2)
and (3) of subsection (iii) of this Section 6(b); or
(ii) A change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute the
Board (such Board shall be hereinafter referred to as the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board; provided, however, for purposes of this Section 6(b), that any
individual who becomes a member of the Board subsequent to such
effective date whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of
those individuals who are members of the Board and who were also members
of the Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of the
Incumbent Board; but, provided further, that any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board shall not be so considered as a member of
the Incumbent Board; or
(iii) The approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company ("Corporate
Transaction"); excluding, however, such a Corporate Transaction pursuant
to which (1) all or substantially all of the individuals and entities
who are the beneficial owners, respectively, of the Outstanding Common
Stock and Outstanding Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or indirectly,
more than 60% of, respectively, the outstanding shares of common stock,
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more Subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Corporate Transaction, of the Outstanding Common Stock and
Outstanding Voting Securities, as the case may be, (2) no Person (other
than the Company, any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company or such corporation resulting from such Corporate Transaction)
will beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power
of the outstanding voting securities of such corporation entitled to
vote generally in the election of directors except to the extent that
such ownership existed with respect to the Company prior to the
Corporate Transaction and (3) individuals who were members of the
Incumbent Board will constitute at least a majority of the members of
the board of directors of the corporation resulting from such Corporate
Transaction; or
(iv) The approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(c) Change in Control Price. For purposes of the Plan, "Change in
Control Price" means the higher of (i) the highest reported sales price,
regular way, of a share of Common Stock in any transaction reported on the
New York Stock Exchange Composite Tape or other national securities
exchange on which such shares are listed or on NASDAQ, as applicable,
during the 60-day period prior to and including the date of a Change in
Control and (ii) if the Change in Control is the result of a tender or
exchange offer or a Corporate Transaction, the highest price per share of
Common Stock paid in such tender or exchange offer or Corporate
Transaction; provided, however, that in the case of a Stock Option which
(x) is held by an optionee who is an officer or director of the Company and
is subject to Section 16(b) of the Exchange Act and (y) was granted within
240 days of the Change in Control, then the Change in Control Price for
such Stock Option shall be the Fair Market Value of the Common Stock on the
date such Stock Option is exercised or cancelled. To the extent that the
consideration paid in any
A-7
such transaction described above consists all or in part of securities or
other non-cash consideration, the value of such securities or other
non-cash consideration shall be determined in the sole discretion of the
Board.
SECTION 7. TERM, AMENDMENT AND TERMINATION.
The Plan will terminate on December 31, 2008. Under the Plan, Awards
outstanding as of December 31, 2008 shall not be affected or impaired by the
termination of the Plan.
The Board may amend, alter, or discontinue the Plan, including, without
limitation, to provide for the transferability of any or all Stock Option(s) in
the event the instructions to Form S-8 promulgated pursuant to the Securities
Act of 1933, as amended, or any successor form, are hereafter amended to permit
registration of shares issuable upon the exercise of options such as the Stock
Options which are transferable, but no amendment, alteration or discontinuation
shall be made which would impair the rights of an optionee under a Stock Option
theretofore granted without the optionee's consent. In addition, no such
amendment shall be made without the approval of the Company's stockholders to
the extent such approval is required by law or agreement.
The Committee may amend the terms of any Stock Option theretofore granted,
prospectively or retroactively, including, without limitation, to provide for
the transferability of such Stock Option in the event the instructions to Form
S-8 promulgated pursuant to the Securities Act of 1933, as amended, or any
successor form, are hereafter amended to permit registration of shares issuable
upon the exercise of options such as the Stock Options which are transferable,
but no such amendment shall impair the rights of any holder without the holder's
consent except such an amendment made to cause the Option to qualify for the
exemption provided by Rule 16b-3(d).
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
SECTION 8. UNFUNDED STATUS OF PLAN.
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or make payments; provided, however, that, unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
SECTION 9. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing or receiving
shares pursuant to an Award to represent to and agree with the Company in
writing that such person is acquiring the shares without a view to the
distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on
transfer.
All certificates for shares of Common Stock or other securities delivered
under the Plan shall be subject to such stock transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Commission, any stock exchange upon which the
Common Stock is then listed and any applicable Federal or state securities law,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(b) Nothing contained in the Plan shall prevent the Company or any
Subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) The adoption of the Plan shall not confer upon any employee any
right to continued employment nor shall it interfere in any way with the
right of the Company or any Subsidiary or Affiliate to terminate the
employment of any employee at any time.
A-8
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal income tax
purposes with respect to any Award under the Plan, the participant shall
pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any Federal, state, local or foreign taxes of any
kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations may be
settled with Common Stock, including Common Stock that is part of the Award
that gives rise to the withholding requirement. The obligations of the
Company under the Plan shall be conditional on such payment or
arrangements, and the Company, its Subsidiaries and its Affiliates shall,
to the extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the participant. The Committee may
establish such procedures as it deems appropriate, including the making of
irrevocable elections, for the settlement of withholding obligations with
Common Stock.
(e) At the time of grant, the Committee may provide in connection with
any grant made under the Plan that the shares of Common Stock received upon
exercise of such Option shall be subject to a right of first refusal
pursuant to which the participant shall be required to offer to the Company
any shares that the participant wishes to sell at the then Fair Market
Value of the Common Stock, subject to such other terms and conditions as
the Committee may specify at the time of grant.
(f) The Committee shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to whom any
amounts payable in the event of the participant's death are to be paid.
(g) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
Delaware.
SECTION 10. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the later of (a) the date it is approved by
the stockholders of the Company and (b) the date, if any, specified by the Board
at the time it is approved by the Board.
A-9
GENERAL GROWTH PROPERTIES, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Matthew Bucksbaum, Beth Stewart and Marshall E. Eisenberg, and each of
them, are hereby constituted and appointed the lawful attorneys and proxies of
the undersigned, with full power of substitution, to vote and act as proxy with
respect to all shares of common stock, $.10 par value, of GENERAL GROWTH
PROPERTIES, INC., standing in the name of the undersigned on the Company's books
at the close of business on March 21, 2002, at the Annual Meeting of
Stockholders to be held at the Company's principal executive offices, 110 North
Wacker Drive, Chicago, Illinois, at 9:00 a.m., local time, on May 8, 2002, or at
any postponement(s) or adjournment(s) thereof, as follows:
The powers hereby granted may be exercised by any of said attorneys or
proxies or their substitutes present and acting at the above-described Annual
Meeting of Stockholders or any postponement(s) or adjournment(s) thereof, or, if
only one be present and acting, then by that one. The undersigned hereby revokes
any and all proxies heretofore given by the undersigned to vote at said meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE NOMINEES FOR DIRECTOR AND FOR THE APPROVAL OF AN AMENDMENT TO THE 1998
INCENTIVE STOCK PLAN.
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-- FOLD AND DETACH HERE --
YOU CAN NOW ACCESS YOUR GENERAL GROWTH PROPERTIES, INC. ACCOUNT ONLINE.
Access your General Growth Properties, Inc. stockholder account online
via Investor ServiceDirect(SM) (ISD).
Mellon Investor Services LLC, agent for General Growth Properties, Inc., now
makes it easy and convenient to get current information on your shareholder
account. After a simple, and secure process of establishing a Personal
Identification Number (PIN), you are ready to log in and access your account to:
- View account status - View payment history for dividends
- View certificate history - Make address changes
- View book-entry information - Obtain a duplicate 1099 tax form
- Establish/change your PIN
VISIT US ON THE WEB AT HTTP://WWW.MELLONINVESTOR.COM
AND FOLLOW THE INSTRUCTIONS SHOWN ON THIS PAGE.
STEP 1: FIRST TIME USERS - ESTABLISH A PIN
You must first establish a Personal Identification Number (PIN) online by
following the directions provided in the upper right portion of the web screen
as follows. You will also need your Social Security Number (SSN) available to
establish a PIN.
INVESTOR SERVICEDIRECT(SM) IS CURRENTLY ONLY AVAILABLE FOR DOMESTIC INDIVIDUAL
AND JOINT ACCOUNTS.
- SSN
- PIN
- Then click on the [Establish PIN] button
Please be sure to remember your PIN, or maintain it in a secure place for future
reference.
STEP 2: LOG IN FOR ACCOUNT ACCESS
You are now ready to log in. To access your account please enter your:
- SSN
- PIN
- Then click on the [Submit] button
If you have more than one account, you will now be asked to select the
appropriate account.
STEP 3: ACCOUNT STATUS SCREEN
You are now ready to access your account information. Click on the appropriate
button to view or initiate transactions.
- Certificate History
- Book-Entry Information
- Issue Certificate
- Payment History
- Address Change
- Duplicate 1099
FOR TECHNICAL ASSISTANCE CALL 1-877-978-7778 BETWEEN
9AM-7PM MONDAY-FRIDAY EASTERN TIME
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2:
Please mark
your votes as
indicated in [X]
this example
1. Election of directors:
FOR all nominees WITHHOLD
listed below AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed below
[ ] [ ]
Nominees: 01 Matthew Bucksbaum, 02 Beth Stewart
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of an amendment to the 1998 [ ] [ ] [ ]
Incentive Stock Plan:
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any postponement(s) or
adjournment(s) thereof.
Mark here if you plan to attend the meeting [ ]
"By checking the box to the right, I consent to future [ ]
delivery of the Annual Report, Proxy Statements, and
other communications in connection with future
shareholder meetings electronically via the Company's
web site. I understand that the Company may no longer
distribute printed materials to me for any future
shareholder meetings until such consent is revoked.
I understand that I may revoke any consent at any time
by contacting the Company's transfer agent, Mellon
Investor Services, Ridgefield Park, NJ and that costs
normally associated with electronic access, such as
usage and telephone charges, will be my responsibility."
SIGNATURE SIGNATURE DATE
---------------------- ---------------------- ------------
(Please sign this proxy as your name appears on the Company's corporate records.
Joint owners should each sign personally. Trustees and others signing in a
representative capacity should indicate the capacity in which they sign.)
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-- FOLD AND DETACH HERE --
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 4PM EASTERN TIME
THE BUSINESS DAY PRIOR TO THE ANNUAL MEETING DAY.
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR
SHARES IN THE SAME MANNER AS IF YOU MARKED,
SIGNED AND RETURNED YOUR PROXY CARD.
INTERNET
HTTP://WWW.EPROXY.COM/GGP
Use the Internet to vote your proxy. Have your proxy card in hand when you
access the web site. You will be prompted to enter your control number, located
in the box below, to create and submit an electronic ballot.
OR
TELEPHONE
1-800-435-6710
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter your control number, located in the
box below, and then follow the directions given.
OR
MAIL
Mark, sign and date
your proxy card
and
return it in the
enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
YOU CAN VIEW THE ANNUAL REPORT AND PROXY STATEMENT
ON THE INTERNET AT: HTTP://WWW.GENERALGROWTH.COM