SCHEDULE 14A
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
SIZELER PROPERTY INVESTORS, 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):
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
SIZELER PROPERTY INVESTORS, INC.
2542 Williams Boulevard
Kenner, Louisiana 70062
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 10, 2002
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Sizeler Property Investors, Inc. (the "Company") will be held at
the Four Seasons Resort, 2800 South Ocean Boulevard, Palm Beach, Florida, on
Friday, May 10, 2002, at 10:00 a.m., local time, for the following purposes:
1. To elect two directors to serve until the 2005 Annual Meeting of
Stockholders or until their successors are duly elected and qualified.
2. To consider and take action on an amendment to the Company's 1996 Stock
Option Plan, as amended, (i) to increase the total number of shares of
common stock available under the plan, (ii) to increase the number of
shares of common stock with respect to which options may be granted to
non-employee directors individually and as a group, and (iii) to modify
the definition of a "change of control."
3. To consider and take action on an amendment to the Company's 1994
Directors' Stock Ownership Plan, as amended, to increase the number of
shares of common stock granted to non-employee directors on an annual
basis.
4. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 22, 2002 are
entitled to receive notice of and to vote at the Meeting or any adjournments
thereof.
The Company's Board of Directors would like to have as many stockholders as
possible present or represented at the Meeting. If you are unable to attend in
person, please vote, sign, date and return your enclosed proxy card promptly or
use the convenience of telephone or
Internet to authorize the Proxies to vote your shares. Postage is not required
for mailing proxy cards in the United States. The Company will reimburse
stockholders mailing proxy cards from outside the United States for the cost of
mailing.
By Order of the Board of Directors
THOMAS A. MASILLA, JR.
President
DATED: April 9, 2002
STOCKHOLDERS ARE URGED TO AUTHORIZE THE PROXIES TO VOTE YOUR
SHARES USING TELEPHONE OR INTERNET VOTING OR BY SIGNING, DATING
AND RETURNING THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE TO
WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
April 9, 2002
SIZELER PROPERTY INVESTORS, INC.
2542 WILLIAMS BOULEVARD
KENNER, LOUISIANA 70062
__________
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 10, 2002
The following information is furnished in connection with the Annual
Meeting of Stockholders of Sizeler Property Investors, Inc. (the "Company") to
be held on Friday, May 10, 2002, at 10:00 a.m., local time, at the Four Seasons
Resort, 2800 South Ocean Boulevard, Palm Beach, Florida (the "Meeting"). A copy
of the Company's Annual Report to Stockholders for the fiscal year ended
December 31, 2001 accompanies this Proxy Statement. Additional copies of the
Annual Report, Notice, Proxy Statement and form of proxy may be obtained from
the Company's Secretary, 2542 Williams Boulevard, Kenner, Louisiana 70062. A
COPY OF THE COMPANY'S FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ("SEC") IS AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE
COMPANY'S INVESTOR RELATIONS DEPARTMENT AT THE COMPANY'S CORPORATE OFFICES OR
FROM THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT WWW.SEC.GOV. This
Proxy Statement, Annual Report and the form of proxy will first be sent to
stockholders on or about April 9, 2002.
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy for the Meeting is being solicited by the directors of
the Company. Any person giving a proxy may revoke it any time prior to its
exercise by filing with the Secretary of the Company a written revocation or
duly executed proxy bearing a later date. The proxy may also be revoked by a
stockholder attending the Meeting, withdrawing the proxy and voting in person.
The cost of soliciting the proxies on the enclosed form will be paid by the
Company. In addition to the use of the mails, proxies may be solicited by the
directors and their agents (who will receive no additional compensation
therefor) by means of personal interview, telephone, facsimile, e-mail or other
electronic means, and it is anticipated that banks, brokerage houses and
other institutions, nominees or fiduciaries will be requested to forward the
soliciting material to their principals and to obtain authorization for the
execution of proxies. The Company may, upon request, reimburse banks, brokerage
houses and other institutions, nominees and fiduciaries for their expenses in
forwarding proxy material to their principals. The Company has retained
InvestorCom, Inc. ("ICOM") to assist with the solicitation of proxies and will
pay ICOM a fee of $6,000 plus reimbursement of out-of-pocket expenses for its
services.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The record date for determining shares of common stock, $0.0001 par value
per share ("Shares"), entitled to vote at the Meeting has been fixed at the
close of business on March 22, 2002. On that date there were 12,479,671 Shares
outstanding. The holders of Shares are generally entitled to one vote for each
Share on each matter submitted to a vote at a meeting of stockholders.
Pursuant to the Company's Bylaws, directors will be elected by a plurality of
the votes cast at the Meeting with each share being voted for as many
individuals as there are directors to be elected and for whose election the
share is entitled to vote. The approval of the amendments to the Company's 1996
Stock Option Plan and the 1994 Directors' Stock Ownership Plan requires the
affirmative vote of a majority of votes cast on the proposal, provided that the
total vote cast on the proposal represents over 50% in interest of all
securities entitled to vote on the proposal.
The presence, in person or by properly executed proxy, of the holders of
Shares entitled to cast a majority of the votes entitled to be cast by the
holders of all outstanding Shares is necessary to constitute a quorum. Shares
represented by a properly signed, dated and returned proxy card and Shares
represented by a proxy authorized via telephone or the Internet will be treated
as present at the Meeting for purposes of determining a quorum. Proxies
relating to "street name" Shares that are voted by brokers will be counted as
Shares present for purposes of determining the presence of a quorum, but will
not be treated as Shares having voted at the Meeting as to any proposal as to
which the broker does not vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the best of the Company's knowledge, no person or group (as those terms
are used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) owned beneficially, as of February 14, 2002, more than
five percent of the outstanding Shares except as described in the following
table:
2
AMOUNT AND
NATURE OF PERCENTAGE
NAME AND ADDRESS BENEFICIAL OF SHARES
OF BENEFICIAL OWNER OWNERSHIP OUTSTANDING (1)
------------------- ----------- ---------------
Sidney W. Lassen
2542 Williams Boulevard
Kenner, LA 70062 730,095 (2) 5.9%
Deer Isle Partners, L.P.
Deer Isle Management, L.L.C.
David M. Brown
860 Fifth Avenue
Suite 18A
New York, NY 10021 741,300 (3) 5.9%
Palisade Capital Management, L.L.C.
One Bridge Plaza
Suite 695
Fort Lee, NJ 07024 703,400 (4) 5.6%
_______________________
(1) Based on the number of Shares outstanding on March 22, 2002 which was
12,479,671 Shares.
(2) These Shares include (i) 7,500 Shares owned by the Company and credited to
the Company's deferred compensation account for the benefit of Mr. Lassen;
(ii) 227,500 Shares Mr. Lassen has the right to acquire pursuant to
exercisable options granted under the Company's 1986 Stock Option Plan (the
"1986 Option Plan") and the Company's 1996 Stock Option Plan, as amended
(the "1996 Stock Option Plan"); (iii) 82,500 Shares owned directly by
Sizeler Realty Co., Inc. ("Sizeler Realty"), in which a beneficial minority
interest is owned by Mr. Lassen and the balance is owned by the family of
Mr. Lassen's wife and her parents' estates; (iv) 60,000 Shares owned by a
limited liability company of which Mr. Lassen is manager and Mr. Lassen's
wife owns an approximately 26% interest; and (v) 18,000 Shares owned by a
Lassen family partnership. These Shares do not include (i) 11,800 Shares
with respect to which Mr. Lassen's daughter, Jill L. Botnick, has voting
and investment power; (ii) 5,000 Shares held by Mr. Lassen's wife; and
(iii) 30,000 Shares owned by I. William Sizeler, brother of Mr. Lassen's
wife. Mr. Lassen disclaims beneficial interest in, and voting or
investment power over, the Shares described in the preceding sentence; and
he disclaims beneficial interest in all the Shares held by the limited
liability company and in all but 1.9% of the Shares held by the Lassen
family partnership, respectively items (iv) and (v) in the first sentence
of this note.
3
(3) Based upon a Schedule 13G dated April 13, 2000 filed with the SEC that
indicates that Mr. Brown has sole voting and dispositive power with respect
to 18,000 Shares and shared voting and dispositive power with respect to
723,300 Shares, 666,200 Shares of which is shared with Deer Isle
Management, L.L.C. and Deer Isle Partners, L.P. Mr. Brown is the managing
member of Deer Isle Management, L.L.C., which is the general partner of
Deer Isle Partners, L.P.
(4) Based upon a Schedule 13G dated January 29, 2002 filed with the SEC by
Palisade Capital Management, L.L.C. ("Palisade"), that indicates that
Palisade has sole voting power with respect to 691,000 Shares and sole
dispositive power with respect to 703,400 Shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the Shares beneficially owned as of February
14, 2002 by each director, nominee for director, executive officer, and by the
directors and executive officers of the Company as a group. Unless otherwise
stated, each person has sole voting and investment power with respect to the
Shares set forth in the table.
PERCENT
AMOUNT AND NATURE OF SHARES
NAME OF BENEFICIAL OWNERSHIP OUTSTANDING (1)
---- ------------------------ ---------------
J. Terrell Brown....................... 40,750 (2) *
Francis L. Fraenkel.................... 180,685 (3) 1.4%
Harold B. Judell....................... 66,033 (4) *
Sidney W. Lassen....................... 730,095 (5) 5.9%
Thomas A. Masilla, Jr. ................ 206,596 (6) 1.7%
James W. McFarland..................... 40,500 (7) *
Richard L. Pearlstone.................. 65,848 (8) *
Theodore H. Strauss.................... 70,600 (9) *
James W. Brodie........................ 64,564 (10) *
Robert A. Whelan....................... 27,804 (11) *
All directors and
executive officers as a group......... 1,493,475 (12) 12.0%
_____________________________
* Indicates ownership of less than 1%.
4
(1) Based on the number of Shares outstanding on March 22, 2002 which was
12,479,671 Shares.
(2) Includes 28,000 Shares Mr. Brown has the right to purchase pursuant to
exercisable options granted under the 1986 Option Plan and the 1996 Stock
Option Plan.
(3) Mr. Fraenkel has sole voting power with respect to 19,000 Shares and sole
dispositive power with respect to 136,685 Shares. Includes 25,000 Shares
Mr. Fraenkel has the right to purchase pursuant to exercisable options
granted under the 1986 Option Plan and the 1996 Stock Option Plan and
25,000 Shares he has the right to acquire beneficial ownership of pursuant
to the conversion of the Company's convertible subordinated debentures due
July 15, 2003.
(4) Includes 26,693 Shares Mr. Judell has the right to purchase pursuant to
exercisable options granted under the 1986 Option Plan, the Company's 1989
Stock Option Plan and the 1996 Stock Option Plan.
(5) See note (2) to table under "Security Ownership of Certain Beneficial
Owners."
(6) Includes (i) 20,170 Shares owned by the Company and credited to the
Company's deferred compensation account for the benefit of Mr. Masilla and
(ii) 174,500 Shares Mr. Masilla has the right to purchase pursuant to
exercisable options granted under the 1986 Option Plan and the 1996 Stock
Option Plan.
(7) Includes 29,000 Shares Mr. McFarland has the right to purchase pursuant to
exercisable options granted under the 1986 Option Plan and the 1996 Stock
Option Plan.
(8) Mr. Pearlstone shares voting and investment power over 12,000 of these
Shares as co-trustee of certain trusts and has an economic interest in
another 12,000 of these Shares as the beneficiary of certain trusts.
Includes 26,000 Shares Mr. Pearlstone has the right to purchase pursuant to
exercisable options granted under the 1986 Option Plan and 1996 Stock
Option Plan.
(9) Includes 30,000 Shares Mr. Strauss has the right to purchase pursuant to
exercisable options granted under the 1986 Option Plan and 1996 Stock
Option Plan.
(10) Includes 61,250 Shares Mr. Brodie has the right to purchase pursuant to
options granted under the 1986 Option Plan and the 1996 Stock Option Plan.
(11) Includes (i) 4,213 Shares owned by the Company and credited to the
Company's deferred compensation account for the benefit of Mr. Whelan and
(ii) 22,500 Shares Mr. Whelan has the right to purchase pursuant to
exercisable options granted under the 1996 Stock Option Plan.
5
(12) See notes (2) through (11) above.
1. ELECTION OF DIRECTORS
INFORMATION CONCERNING DIRECTORS
The Company's Articles of Incorporation and Bylaws, as amended, provide
that the number of directors will be not less than one and not more than fifteen
and that the directors will be divided into three classes containing as nearly
equal a number of directors as possible, with one class standing for election
each year. The board has set the number of directors at eight effective at the
Meeting, and two of those directors are to stand for election at the Meeting.
Each person so elected will serve until the 2005 Annual Meeting of Stockholders
or until his successor is duly elected and qualified. The affirmative vote of a
plurality of the votes cast at the Meeting is necessary for election of a
director.
The directors recommend a vote FOR the directors standing for election
listed below. Unless instructed otherwise, proxies will be voted FOR these
nominees. Although the directors do not contemplate that either of the nominees
listed below will be unable to serve, if such a situation arises prior to the
Meeting, the proxy will be voted in accordance with the best judgment of the
person or persons voting the proxy.
The following table sets forth information regarding the directors standing
for election and directors whose terms continue beyond the Meeting.
NAME, TENURE AND PRINCIPAL OCCUPATION AND BUSINESS
POSITION(S) WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS (1)
-------------------------------- --- -------------------------------------------
DIRECTORS STANDING FOR ELECTION
Francis L. Fraenkel 69 Managing Director of Neuberger Berman
Director since 1993 since December 2000; Prior to December
2000, Managing Director of Delta Capital
Management, LLC (investment
management) since April 1999; Chairman
of Delta Capital Management, Inc. prior to
April 1999. (2)
6
NAME, TENURE AND PRINCIPAL OCCUPATION AND BUSINESS
POSITION(S) WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS (1)
-------------------------------- --- -------------------------------------------
Sidney W. Lassen 67 Chairman of the Board and Chief Executive
Chairman of the Board and Officer of the Company; Chairman of the
Chief Executive Officer Board and Chief Executive Officer of
since 1986 Sizeler Realty.
DIRECTORS WHOSE TERMS EXPIRE IN 2003
Thomas A. Masilla, Jr. 55 Vice Chairman of the Board since 1994,
Vice Chairman of the Board President and Principal Operating Officer
since 1994, President and since 1995 and Chief Financial Officer
Principal Operating Officer from 1996 through May 1999.
since 1995, Director since
1986
James W. McFarland 56 Dean of A.B. Freeman School of Business,
Director since 1994 Tulane University.
Theodore H. Strauss 77 Senior Managing Director with Bear
Director since 1994 Stearns & Co. Inc.
DIRECTORS WHOSE TERMS EXPIRE IN 2004
J. Terrell Brown 62 Chairman of GMFS, LLC (mortgage
Director since 1995 lending) since May 1999. Prior to May
1999, Chairman and Chief Executive
Officer of United Companies Financial
Corporation (financial services). (3)
Harold B. Judell 87 Senior partner in the law firm of Foley &
Director since 1986 Judell, LLP; Chairman of the Board of
Dauphine Orleans Hotel Corporation.
Richard L. Pearlstone 54 President of The Pearlstone Group, Inc.
Director since 1986 (investments) since 1995; Chief Executive
Officer of Cross Keys Asset Management,
Inc. (investment advisors) since November
1986; and Chief Executive Officer of SNP
Management LLC (management company)
since November 1999.
7
___________________________
(1) Unless otherwise stated, each director has held the position indicated for
at least the past five years.
(2) On April 1, 1999, Delta Capital Management, Inc. reorganized into a limited
liability company and changed its name to Delta Capital Management, LLC.
(3) On March 1, 1999, United Companies Financial Corporation announced that it
was reorganizing under Chapter 11 of the United States Bankruptcy Code.
OTHER TRUSTEESHIPS AND DIRECTORSHIPS
The directors of the Company serve on the Boards of Directors or the Boards
of Trustees of the following publicly held companies:
NAME COMPANY
---------------------- ----------------------------------
Sidney W. Lassen............ Hibernia Corporation
James W. McFarland.......... Stewart Enterprises, Inc.
Theodore H. Strauss......... Clear Channel Communications, Inc.
Hollywood Casino Corporation
Texas Capital Bankshares
COMMITTEES AND MEETING DATA
The Executive Committee of the Board of Directors consists of Messrs.
Judell, Lassen, Masilla, McFarland, Pearlstone and Strauss. It has all the
authority of the Board of Directors (except for action relating to certain
fundamental corporate changes) between board meetings, including the authority
to declare a dividend and to authorize the issuance of stock. The Executive
Committee did not meet in 2001.
The Strategic Planning Committee, which was formed in 2001, consists of
Messrs. Judell, McFarland and Brown. The Strategic Planning Committee met five
times during 2001. The Strategic Planning Committee is responsible for
developing and evaluating strategic initiatives for the Company.
The Audit Committee of the Board of Directors consists of Messrs. Brown,
Fraenkel, Judell and McFarland. The Audit Committee met five times during 2001.
Its functions are to recommend the appointment of independent accountants;
review the arrangements for and scope
8
of the audit by independent accountants; review the independence of the
independent accountants; consider the adequacy of the system of internal
accounting controls and review any proposed corrective action; review and
monitor the Company's policies regarding business ethics and conflicts of
interests; discuss with management and the independent accountants the Company's
draft quarterly and annual financial statements, earnings releases and key
accounting and/or reporting matters; and review the activities and
recommendations of the Company's financial staff. See "-- Audit Committee
Report" below and the Audit Committee Charter attached to this Proxy Statement
as Appendix A.
The Compensation Committee consists of Messrs. Judell, McFarland and
Strauss. The Compensation Committee met one time during 2001. The function of
the Compensation Committee is to review the compensation program for executive
officers and to administer the 1986 Option Plan and the 1996 Stock Option Plan.
The Company does not have a separate nominating committee or any committee
performing a similar function. The Board handles all nomination matters.
During 2001 the full Board of Directors met on six occasions. All
directors attended at least 75% of the aggregate total number of meetings held
by the Board of Directors and all committees of the Board on which such director
served.
Audit Committee Report. The Audit Committee of the Board of Directors is
responsible for providing independent, objective oversight of the Company's
accounting functions and internal controls. The Audit Committee is composed of
four directors, Messrs. Brown, Fraenkel, Judell and McFarland, each of whom is
independent as defined by the New York Stock Exchange listing standards. The
Audit Committee operates under a written charter approved by the Board of
Directors and amended in 2001. A copy of the amended charter is attached to
this Proxy Statement as Appendix A.
Management is responsible for the Company's financial reporting process
including its system of internal control, and for the preparation of
consolidated financial statements in accordance with accounting principles
generally accepted in the United States of America. The Company's independent
auditors are responsible for auditing those financial statements. Our
responsibility is to monitor and review these processes. It is not our duty or
our responsibility to conduct auditing or accounting reviews or procedures. We
are not employees of the Company and we may not be, and we may not represent
ourselves to be or to serve as, accountants or auditors by profession or experts
in the fields of accounting or auditing. Therefore, we have relied, without
independent verification, on management's representation that the financial
statements have been prepared with integrity and objectivity and in conformity
with accounting principles generally accepted in the United States of America
and on the representations of the independent auditors included in their report
on the Company's financial statements. Our oversight does not provide us with
an independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or policies, or appropriate
internal controls and
9
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, our considerations and discussions
with management and the independent auditors do not assure that the Company's
financial statements are presented in accordance with accounting principles
generally accepted in the United States of America, that the audit of our
Company's financial statements has been carried out in accordance with generally
accepted auditing standards or that our Company's independent accountants are in
fact "independent."
In this context, the Audit Committee has met and held discussions with
management and the independent accountants. Management represented to the Audit
Committee that the Company's consolidated financial statements were prepared in
accordance with accounting principles generally accepted in the United States of
America, and the Audit Committee has reviewed and discussed the consolidated
financial statements with management and the independent accountants. The Audit
Committee also discussed with the independent accountants the matters required
by Statement on Auditing Standards No. 61 (Communication with Audit Committees).
The Audit Committee received written disclosures from the independent
accountants required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit Committee
discussed with the independent accountants that firm's independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the representations
of management and the report of the independent accountants to the Audit
Committee, the Audit Committee recommended that the Board of Directors include
the audited consolidated financial statements in the Company's Annual Report on
Form 10-K for the year ended December 31, 2001, to be filed with the SEC.
THE AUDIT COMMITTEE
J. TERRELL BROWN, Chair
FRANCIS L. FRAENKEL
HAROLD B. JUDELL
JAMES W. McFARLAND
EXECUTIVE OFFICERS
The following is a listing of the Company's executive officers:
10
NAME, TENURE AND PRINCIPAL OCCUPATION AND BUSINESS
POSITION(S) WITH THE COMPANY AGE EXPERIENCE FOR PAST FIVE YEARS (1)
--------------------------------------- --- --------------------------------------------
Sidney W. Lassen....................... 67 See table under "Information Concerning
Chairman of the Board and Directors."
Chief Executive Officer since
1986
Thomas A. Masilla, Jr. ................ 55 See table under "Information Concerning
Vice Chairman of the Board Directors."
since 1994, President and
Principal Operating Officer
since 1995 and Director since
1986
Robert A. Whelan....................... 34 Chief Financial Officer of the Company
Chief Financial Officer since since May 1999. Real Estate Consultant for
1999 Ernst & Young/Kenneth Leventhal Real
Estate Group prior to joining the Company.
James W. Brodie........................ 33 Vice President of the Company since 1991;
Vice President since 1991 and Secretary of the Company since 1999;
Secretary since 1999 Assistant Secretary from 1997 to 1999.
___________________________
(1) Unless otherwise stated, each executive officer has held the position
indicated for at least the past five years.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table contains information with
respect to the annual and long-term compensation for the years ended December
31, 2001, 2000 and 1999 for the Company's chief executive officer and each other
person who was an executive officer of the Company on December 31, 2001 who
received cash compensation in excess of $100,000 during 2001 (the "Named
Officers").
11
Long Term
Annual Compensation
Compensation Awards
-------------------- ---------------- All Other
Name and Principal Position Year Salary Bonus (1) Options/SARs (2) Compensation (3)
------------------------------------ ---- -------- --------- ---------------- ----------------
Sidney W. Lassen 2001 $325,000 $75,000 35,000 $32,500
Chairman of the Board and 2000 325,000 50,000 35,000 32,500
Chief Executive Officer 1999 305,000 51,850 30,000 30,500
Thomas A. Masilla, Jr. 2001 $260,000 $50,000 25,000 $26,000
Vice Chairman of the 2000 250,000 40,000 25,000 25,000
Board, President and 1999 235,000 39,950 20,000 23,500
Principal Operating Officer
Robert A. Whelan (4) 2001 $142,000 $ 8,000 15,000 $14,200
Chief Financial Officer 2000 135,000 8,000 15,000 13,500
James W. Brodie (5) 2001 $180,000 $20,000 15,000 $18,000
Secretary and Vice President 2000 165,000 20,000 15,000 16,500
Acquisitions and
Development
-----------------------
(1) This amount was paid one-half in Shares and one-half in cash.
(2) These options were granted under the 1996 Stock Option Plan.
(3) These amounts were paid under a nonelective deferred compensation agreement
with each Named Officer, pursuant to which an amount of deferred
compensation was credited annually to a bookkeeping account maintained for
them. Upon the Named Officer's election to retire at age 65, earlier
termination of employment or death, the Company will pay him his vested
interest in his account.
(4) Mr. Whelan joined the Company as Chief Financial Officer in May 1999 and his
compensation for 1999 did not exceed $100,000.
(5) Mr. Brodie became an executive officer of the Company effective January 1,
2000.
Option Grants. The following table gives information with respect to
option grants made to the Named Officers during 2001. The information regarding
potential realizable value assumes
12
that the price of the Shares will appreciate at the compounded percentage rate
set forth in the table during the entire term of the option. There can be no
assurance that such appreciation will occur.
Potential Realizable Value
at Assumed Annual Rates
of Stock Price
Appreciation for
Individual Grants Option Term
------------------------------------------------------------------------------------------- --------------------
Percent of
Number of Total
Securities Options/SARs Exercise
Underlying Granted to of Base
Options/SARs Employees Price Expiration
Name Granted (#) in Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- ------------ --------------- ---------- ---------- -------- --------
(a) (b) (c) (d) (e) (f) (g)
Sidney W. Lassen............... 35,000 (1) 35% $8.47 2/7/11 $186,436 $472,465
Chairman of the Board and
Chief Executive Officer
Thomas A. Masilla, Jr. ........ 25,000 (2) 25% $8.47 2/7/11 $133,168 $337,475
Vice Chairman of the
Board, President and
Principal Operating
Officer
Robert A. Whelan............... 15,000 (3) 15% $8.47 2/7/11 $ 79,901 $202,485
Chief Financial Officer
James W. Brodie................ 15,000 (3) 15% $8.47 2/7/11 $ 79,901 $202,485
Secretary and Vice
President Acquisitions
and Development
___________________________
(1) Becomes exercisable with respect to 17,500 Shares on February 8, 2002, and
17,500 Shares on February 8, 2003.
(2) Becomes exercisable with respect to 12,500 Shares on February 8, 2002, and
12,500 Shares on February 8, 2003.
(3) Becomes exercisable with respect to 7,500 Shares on February 8, 2002, and
7,500 Shares on February 8, 2003.
Option Exercises and Fiscal Year End Values. No Named Officer exercised
options during 2001. The following table shows information with respect to the
value of unexercised options held by the Named Officers as of December 31, 2001.
Valuation calculations for unexercised options
13
are based on the closing price ($9.02) of a Share on the New York Stock Exchange
on December 31, 2001.
Aggregated Options/SAR Exercises with Last Fiscal Year
and FY-End Option/SAR Values
----------------------------
Value of
Number of Unexercised Unexercised In-The-Money
Options/SARs at Options/SARs at
December 31, 2001 (#) December 31, 2001 ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
Sidney W. Lassen..................... 192,500/52,500 $49,050/$37,100
Chairman of the Board and
Chief Executive Officer
Thomas A. Masilla, Jr. .............. 150,500/37,500 $37,500/$26,500
Vice Chairman of the Board,
President and Principal
Operating Officer
Robert A. Whelan..................... 7,500/22,500 $ 7,650/$15,900
Chief Financial Officer
James W. Brodie...................... 46,250/22,500 $17,556/$15,900
Secretary and Vice President
Acquisitions and Development
Agreements with Executive Officers. The Company has entered into an
agreement with each of its executive officers. Each agreement has a two-year
term that is extended automatically each month so that the remaining term of the
agreement is 24 months. Each such officer is entitled to a minimum base salary
under his agreement ($325,000 for Mr. Lassen; $260,000 for Mr. Masilla; $142,000
for Mr. Whelan; and $180,000 for Mr. Brodie). The board may terminate an
agreement at any time with no further obligation upon a finding that an officer
has breached or neglected his duties, and an officer may resign at any time upon
30 days' notice. The board may also terminate an agreement at any time without
cause; in that event, or upon death or disability, the officer is entitled to 24
months continued salary and (except in the case of death or disability)
benefits. Provisions for termination of employment upon a change in control
supersede the agreements' regular termination provisions. "Change in control"
is defined, subject to various qualifications, as the acquisition by a person or
group of beneficial ownership of 25% or more of the Shares; or the election of a
member of the board whose nomination or election was not approved by a majority
of the members of the board who were members of the board on the date of the
agreement or whose election to the board was previously so approved; or a merger
or similar transaction after which the Company's stockholders hold 50% or less
of the voting securities in the resulting entity. If, within 24 months of a
change in control, either the Company
14
terminates an officer's employment for reasons other than a willful breach of
duty that is demonstrably and materially injurious to the Company or disability,
or the officer resigns because of certain changes in the circumstances of his
employment (including the assignment to the officer of duties inconsistent with
his prior position; reduction in salary; and relocation), the officer is
entitled to three times the sum of (i) his annual salary, (ii) one-half the
amount of the bonuses and nonelective deferred compensation paid or credited to
him in the past 24 months, and (iii) the amount the Company would have
contributed for the officer for a year under its defined contribution plan. In
addition, the officer is entitled to a portion of the incentive bonus he would
have earned for the year of termination (proportionate to the part of the year
elapsed by termination), continuation of life and health insurance benefits for
up to 36 months, and reimbursement for out-placement expenses not in excess of
$20,000. The agreements provide that if the receipt of benefits in connection
with a change in control would subject an officer to excise tax under section
280G of the Code, then the officer will also receive a cash gross-up payment so
that he will realize the same amount net after-tax that he would have realized
had the excise tax not been applicable.
Compensation Committee Report. During 2001, the members of the Company's
Compensation Committee were Messrs. McFarland (Chairman), Judell and Strauss.
The Compensation Committee believes that the primary goals of the Company's
compensation policies should be as follows:
. To provide total compensation opportunities for executive officers
which are competitive with those provided to persons in similar
positions in companies with which the Company competes for employees.
. To strengthen the mutuality of interest between management and
stockholders through the use of incentive compensation directly
related to corporate performance and through the use of stock-based
incentives that result in increased Share ownership by executive
officers.
In furtherance of these policies the Company adopted the agreements with
officers and non-elective deferred compensation agreements which are described
elsewhere in this Proxy Statement. The Company also adopted an Incentive Award
Plan. The Compensation Committee believes that the employment agreements provide
the Company's executive officers with sufficient compensation and security in
their present positions. The non-elective deferred compensation agreements
provide future benefits to the executive officers for retirement. The
Compensation Committee believes that the Incentive Award Plan will align the
interests of the executive officers with those of the stockholders by (i) basing
incentive awards on funds from operations ("FFO") per share, which the Company
and the real estate investment trust industry believe to be an important measure
of the financial performance of a real estate investment trust, and (ii) paying
50% of each incentive award in Shares. The Incentive Award Plan also grants the
Compensation Committee discretion to make awards less than those indicated by
the Incentive Award Plan's targets if the Compensation Committee believes that
reduction is appropriate. The Compensation
15
Committee will continue to evaluate the Company's compensation program to
determine whether it is providing the incentives for which it is intended.
The Compensation Committee believes that the main purpose of base
compensation is to provide sufficient compensation to the executive officers of
the Company relative to salary levels for other real estate investment trusts
and the officer's level of responsibility. With respect to Mr. Lassen, the
Company's chief executive officer, the Committee considered a number of factors
in setting the compensation set forth in the agreement with him, the most
important of which were the level of compensation paid to chief executive
officers of other real estate investment trusts relative in size to the Company
and the success of the Company's program instituting operating efficiencies,
controlling costs and increasing rental rates and percentages leased, which was
developed under Mr. Lassen's direction, and the success of the Company in
raising capital during 2001.
In determining compensation to be paid to the executive officers of the
Company other than Mr. Lassen in 2001, the Compensation Committee designed its
compensation policies to align the interests of the executive officers of the
Company with the Company's business strategies. These policies are intended to
reward executives for putting into effect the Company's long-term business
strategies and for enhancing stockholder value, while at the same time providing
sufficient compensation to executives so that the Company can retain the
services of executives whose abilities are critical to the Company's long-term
success.
The Compensation Committee believes that long term stock-based incentive
compensation encourages senior management to operate in a manner consistent with
the interests of the Company's stockholders. In 2001, the Company granted Mr.
Lassen an option to purchase 35,000 Shares, Mr. Masilla an option to purchase
25,000 Shares and each of Messrs. Whelan and Brodie an option to purchase 15,000
Shares.
The Compensation Committee administers an Incentive Award Plan adopted by
the Company in 1994. The purpose of the Plan is to reward eligible officers of
the Company on the basis of their contribution to the Company. In August of
2001, the Company completed the sale of its Camelot Shopping Center,
representing the disposition of a mature property in a market not part of the
Company's current geographic focus. In October of 2001, the Company became
fully self-managed by completing the acquisition of Sizeler Real Estate
Management Co., Inc. In December of 2001, the Company raised approximately
$28.6 million of new equity from the issuance of 3,450,000 new shares of common
stock, initially using the proceeds to pay down floating rate bank debt. During
2001, the Company increased revenues while containing controllable operating
expenses. These operating results were partially offset by increased real
estate taxes and insurance costs. For the twelve months ended December 31,
2001, basic funds from operations increased $787,000 to $13.7 million, compared
to $12.9 million earned for the same period a year ago. On a per share basis,
basic funds from operations was $1.65 on weighted average shares of 8,313,000
for the twelve months of 2001, compared to $1.62 on weighted average shares of
7,950,000 for the same period in 2000. The larger number of average shares
16
in 2001 was due to new shares being issued from the Company's direct stock
purchase and dividend reinvestment plan, as well as new shares issued from the
public equity offering completed in December 2001. Considering all of the above
factors, among others, the Compensation Committee granted bonuses to executive
officers totaling $153,000 (paid one-half in cash and one-half in shares of the
Company).
JAMES W. McFARLAND
HAROLD B. JUDELL
THEODORE H. STRAUSS
Members of the Compensation Committee
This Compensation Committee Report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement and any portion thereof into any filing under the Securities Act of
1933, as amended or under the Exchange Act and shall not otherwise be deemed
filed under such acts.
PERFORMANCE COMPARISON
Set forth below is a line graph comparing the percentage change in the
cumulative total return to stockholders on the Shares over the five years ended
December 31, 2001 against the cumulative total return of a Peer Group of
diversified real estate investment trusts, the Standard & Poor's 500, the
Wilshire REIT Index and the Wilshire RE Securities Index. The companies
contained in the Peer Group are listed in the footnote below.
[Performance Graph Appears Here]
===================================================================================================
INDEX 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
---------------------------------------------------------------------------------------------------
The Company 100.00 118.75 108.44 111.50 106.82 153.20
---------------------------------------------------------------------------------------------------
Sizeler Custom Peer Group (1) 100.00 124.35 123.08 114.88 149.84 171.06
---------------------------------------------------------------------------------------------------
Wilshire REIT Index 100.00 119.65 99.30 96.74 126.77 142.43
---------------------------------------------------------------------------------------------------
Wilshire RE Securities Index 100.00 119.76 98.89 95.75 125.17 138.25
---------------------------------------------------------------------------------------------------
S&P 500 100.00 133.37 171.44 207.52 188.62 166.22
==================================================================================================
(1) The Peer Group consists of the following companies in addition to the
Company: BNP Properties, BRT Realty Trust, Colonial Properties Trust,
Cousins Properties Incorporated, CV REIT, Inc., Duke Realty Corporation,
EastGroup Properties, Inc., EQK Realty Investors (data through Sept. 11,
2000), Glenborough Realty Trust, Inc., HMG/Courtland Properties, Inc.,
Income Opportunity Realty Investors, Inc., Kramont Realty Trust,
17
Lexington Corporate Properties Trust, MGI Properties (data through Sept.
27, 2000), Property Capital Trust (data through June 4, 1999), Presidential
Realty Corporation, Pennsylvania Real Estate Investment Trust, Pittsburgh &
West Virginia Railroad, Transcontinental Realty Investors, and Washington
Real Estate Investment Trust.
DIRECTORS' FEES
Directors who are also executive officers of the Company are not separately
compensated for their services as directors. Directors who are not executive
officers are compensated in accordance with the Company's 1994 Directors' Stock
Ownership Plan (the "Directors' Plan"). The Directors' Plan provides for a stock
award of 1,500 Shares (2,000 Shares in the event the stockholders approve the
proposal to amend the Directors' Plan) to be made to each director annually on
the first business day following January 15. A director may elect to be paid a
cash substitute rather than all or part of an annual stock award. The cash
substitute will equal 90% of the value of the Shares for which the director
elects the cash substitute. Directors are also paid a meeting fee of $1,000 per
board meeting and $500 per committee meeting. In addition, directors who are
not also employees of the Company were granted an option to purchase 5,000
Shares on February 8, 2001 for a purchase price of $8.47 per Share pursuant to
the 1996 Stock Option Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of reports filed pursuant to Section 16(a) of
the Exchange Act or written representations from directors and executive
officers required to file such reports, the Company believes that all such
filings required of its executive officers and directors were timely made.
MANAGEMENT AGREEMENTS
On October 5, 2001, the Company completed the acquisition of Sizeler Real
Estate Management Co., Inc. (the "Management Company") from Sizeler Realty and
the Management Company became a wholly-owned subsidiary of the Company. Mr.
Lassen, Chairman of the Company's Board of Directors, owned a minority
beneficial interest in the Management Company with the balance owned by members
of his wife's family and her parents' estates. The purchase price for this
acquisition was $3,050,000. This transaction was approved unanimously by the
Company's Board of Directors, after receiving the recommendation of a committee
of independent directors and a fairness opinion from an independent financial
advisor. As a result of this transaction the Company is now fully self-managed,
consistent with the general trend of real estate investment trusts throughout
the country.
18
Subsidiaries of the Company have contracts (the "Management Agreements")
with the Management Company. Under the Management Agreements, the Management
Company performs leasing and management services with respect to the operation
of all of the Company's properties, including accounting and data processing
services, collecting rents, making repairs, cleaning and maintenance, etc. Upon
request of the Company, the Management Company performs or causes to be
performed advertising, promotion, market research and management information
services.
Under the Management Agreements, the annual management fee is paid ratably
on a monthly basis and is calculated based upon .65% of the Company's gross
investment in real estate at the beginning of each year (as shown on the
Company's audited financial statements for the previous year), and is adjusted
for acquisitions or dispositions of property during a year effective upon the
acquisition or disposition. Previously, at the end of each year, the management
fee was adjusted (either upward or downward) by the percentage increase or
decrease in the Company's FFO per Share compared to the previous year. During
2001, subsidiaries of the Company paid the Management Company $2,800,000
consisting of management and leasing fees and reimbursement for certain
administrative expenses.
Prior to the Company's acquisition of the Management Company, the directors
of the Company not affiliated with Sizeler Realty or the Management Company (the
"Unaffiliated Directors") were required to determine that the compensation the
Company contracted to pay for management services was reasonable in relation to
the nature and quality of services performed and that such compensation was
within the limits prescribed in the Management Agreements. The determination
was to be based upon such factors as the Unaffiliated Directors deem
appropriate, including the size of the fee in relation to the size, composition
and profitability of the Company's real property interests under management, the
rates charged to other real estate investment trusts and to investors other than
real estate investment trusts by firms performing similar services, the amount
of additional revenues realized by such firm and its affiliates for other
services performed for the Company's properties under management (including
income, conservation or appreciation of capital) and the quality of those
properties. During 2001 and prior to the Company's acquisition of the
Management Company, the Unaffiliated Directors determined that the compensation
the subsidiaries of the Company contracted to pay for management services was
reasonable.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
The Company holds its interest in the Westland Shopping Center pursuant to
a long term ground lease with Westland Shopping Center LLC (the "LLC"), expiring
on December 31, 2046. The LLC is owned by an entity of which an officer and
director and his wife and her brother and brother's wife own interests. The
Company was charged ground rent of $61,000 in 2001, $55,000 in 2000 and $56,000
in 1999.
19
The Company leases approximately 14,000 square feet at the Westland
Shopping Center to Sizeler Realty. Under this lease, Sizeler Realty paid annual
rent, including expense reimbursements, of $105,300 in 2001, $103,000 in 2000,
and $104,000 in 1999. The Management Company reimbursed Sizeler Realty for
approximately $15,000 of these expenses in 2001. The lease expires January 31,
2007 and the lease provides for one remaining five-year renewal option.
In March 1991, the Company purchased a one-half interest in the Southwood
Shopping Center, a 40,000 square foot community shopping center in Gretna,
Louisiana, from Sizeler Realty Co.(LaPalco), Inc. ("LaPalco"), a wholly-owned
subsidiary of Sizeler Realty, for $900,000. The Southwood Shopping Center is
subject to a ground lease from an entity in which Sidney W. Lassen and his wife,
and I. William Sizeler, Mrs. Lassen's brother, and his wife own interests.
The ground lease's term runs through March 31, 2031. The rent under the ground
lease is 50% of cash flow (after debt service and certain other adjustments
described below) up to a maximum of $225,000 and in the event the rental payment
shall reach $225,000 in any year, it shall remain fixed at $225,000 for each
year thereafter. No ground rent was payable in 2001. The Company and LaPalco
each contributed their one-half interests in the Southwood Shopping Center to a
partnership. Under the terms of the partnership agreement, the Company is to
receive a preferential return equal to 11.25% of (i) its initial contributions
to the partnership (valued at $900,000) plus (ii) any subsequent contributions
less (iii) any distributions to the Company from sums available from sale or
refinancing. Profit and loss allocations after this preferential allocation and
the distribution of a like sum to LaPalco will be based on respective ownership
interests. Payments of rent under the ground lease are subordinate to payment
of the Company's preferential return. LaPalco is the primary obligor on a
mortgage note payable with a principal balance of approximately $1,027,000 on
December 31, 2001 and maturing in September 2004, secured by the Southwood
Shopping Center guaranteed by Sizeler Realty, which LaPalco was obligated to
satisfy out of its partnership distributions or other sources. In the event of
a sale of the Southwood Shopping Center, proceeds would be distributed as
follows: first, to the Company in the amount of any unpaid preferential return
plus the amount of its contributions; second, to LaPalco in an amount equal to
the greater of the amount distributed to the Company or the amount of financing
still outstanding; and finally, to the partners in accordance with their
respective interests.
The Company through wholly-owned subsidiaries, owns its interests in
Southland Mall, North Shore Square Mall, Gonzales Plaza, Hammond Square Mall,
Westgate Shopping Center, Westland Shopping Center, Airline Park Shopping
Center, Azalea Gardens Shopping Center, Colonial Shopping Center, Steeplechase
Apartments, Garden Lane Apartments, Georgian Apartments, Colonial Manor
Apartments, Magnolia Place Apartments, Governors Gate Apartments and developable
land through limited liability companies or partnerships in which the Company
has a 99% interest and its partner has a 1% interest. In each case, its partner
is a wholly-owned subsidiary of Sizeler Realty.
20
See "--Management Agreements" for information concerning the Company's
acquisition of the Management Company as well as the compensation by the Company
of the Management Company pursuant to the Management Agreements and the prior
affiliation of a Company director and officer with the former parent company of
the Management Company.
2. PROPOSAL TO AMEND THE SIZELER PROPERTY
INVESTORS, INC. 1996 STOCK OPTION PLAN
At the Meeting, the stockholders will be asked to vote on a proposal to
approve the amendments to the 1996 Stock Option Plan. The approval of the
amendments to the 1996 Stock Option Plan requires the affirmative vote of a
majority of votes cast on the proposal, provided that the total vote cast on the
proposal represents over 50% in interest of all securities entitled to vote on
the proposal. The directors recommend a vote FOR adoption of the amendments to
the 1996 Stock Option Plan. Unless otherwise instructed, proxies will be voted
FOR adoption of the amendments to the 1996 Stock Option Plan.
Appendix B to this Proxy Statement sets forth the text of the 1996 Stock
Option Plan, as amended. The following description of the 1996 Stock Option
Plan contains summaries of certain provisions of the 1996 Stock Option Plan and
is qualified in its entirety by reference to the 1996 Stock Option Plan itself.
SUMMARY OF THE 1996 STOCK OPTION PLAN
The 1996 Stock Option Plan, as amended subject to stockholder approval,
authorizes the issuance of up to 1,800,000 Shares pursuant to options granted to
key employees and directors of the Company during the ten year period beginning
February 1, 1996. Before amendment, the plan authorized the issuance of up to
600,000 Shares. An option entitles the optionee to purchase Shares at the
exercise price specified in the option; in order to obtain the Shares, the
optionee must pay the exercise price in cash, Shares, or a combination of both.
Non-Employee Director Options. Under the 1996 Stock Option Plan, the Board
of Directors determines, in its discretion, the non-employee directors who are
to receive options, the number of Shares that may be issued under such options,
and when such options shall be granted, subject to three limits. The first
limit, which was not amended, is that the maximum number of Shares with respect
to which options may be granted to any one non-employee director during a
calendar year is 10,000. As amended, subject to stockholder approval, the other
two limits are: (i) the total number of Shares with respect to which options may
be granted to any one non-employee director during the term of the plan is
60,000 Shares; and (ii) the aggregate number of Shares with respect to which
options may be granted to non-employee directors as a group is 500,000 Shares.
Before amendment, these two limits had been: 25,000 Shares for any one
21
non-employee director during the term of the plan and 125,000 Shares in the
aggregate for non-employee directors as a group. The exercise price for options
granted to non-employee directors is the average of the high and low sales price
for a Share on the exchange on which Shares are listed on the date of grant.
Such options are exercisable in full six months after the date of grant and
expire ten years after the date of grant or, if earlier, six months after the
termination of the optionee's service as a director or employee. Options granted
to non-employee directors are non-qualified options, that is, options that are
not incentive stock options under section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
Key Employee Options. The Compensation Committee of the Board of Directors
determines, in its discretion, the officers and employees who are to receive
options, the number of Shares that may be issued under such options, the terms,
conditions, and periods of exercisability of such options, and whether such
options shall be incentive stock options under section 422 of the Code or non-
qualified options. Under the 1996 Stock Option Plan, the Compensation Committee
must be composed of non-employee directors.
Options granted to officers and employees are exercisable no earlier than
twelve months after the date of grant and expire ten years after the date of
grant or, if earlier, upon the termination of the optionee's employment, except
that options exercisable on the date of termination of employment remain
exercisable for specified periods after that date, but not beyond ten years
after the date of grant. The Compensation Committee may determine the exercise
price of options granted to officers and employees, but the price may not be
less than the average of the high and low sales price for a Share on the
exchange on which Shares are listed on the date of grant.
General Provisions. Outstanding options are subject to adjustment in the
event of a stock dividend, stock split, or other change in the Company's capital
structure. As amended subject to stockholder approval, the 1996 Stock Option
Plan provides that upon a change of control of the Company, all outstanding
options would automatically become fully exercisable and the Compensation
Committee would have discretion to adjust options further. Before amendment,
the acceleration of exercisability upon a change of control would have been
within the discretion of the Compensation Committee rather than automatic. As
amended, subject to stockholder approval, the definition of change of control
under the 1996 Stock Option Plan includes the acquisition of at least 25 percent
of the voting power of Shares by a person or group, the election of a director
without the approval of a majority of directors whose election was previously so
approved, or a merger after which the Company's stockholders do not have at
least 50 percent voting control of the survivor. Before amendment, the
definition of change of control included a merger in which the Company was not
the survivor, a sale of substantially all the Company's assets, and a change in
ownership of 45 percent of Shares through concerted action. The Board of
Directors may amend the 1996 Stock Option Plan except that an amendment that
would (i) materially increase the cost of the plan to the Company, (ii) increase
the number of Shares that may be issued under the plan (other than increases by
reason of a stock dividend or stock split), (iii) change the class of persons
eligible to receive options under the plan, (iv) extend the term of the plan, or
(v)
22
provide for the administration of the plan other than by a committee composed
entirely of non-employee directors, requires the approval of the stockholders of
the Company.
RECENT AWARDS
Each non-employee director received grants of options for 5,000 Shares of
common stock in 2001 (subsequent to the annual meeting of stockholders in 2001)
and 5,000 Shares in 2002. These awards were subject to stockholder approval of
the amendments to the 1996 Stock Option Plan at the next-occurring meeting of
stockholders, which is the meeting to which this proxy statement pertains. If
the amendments are not approved, each non-employee director will receive options
for 4,333 Shares in lieu of the 10,000 Shares initially awarded.
In 2002 the directors approved option grants to management, including the
Named Officers, also subject to stockholder approval of the proposed amendments
to the 1996 Stock Option Plan. The grants of options to each Named Officer and
to all other optionees as a group and the adjustments in the options if the
amendments are not approved are set forth in the following table and the
footnote:
Options Awarded by
Name of Optionee Compensation Committee (1)
------------------------- --------------------------
Sidney W. Lassen................. 35,000
Thomas A. Masilla, Jr. .......... 25,000
Robert A. Whelan................. 15,000
James W. Brodie.................. 17,500
All other optionees ............. 28,000
------
TOTAL 120,500 Shares
___________________________
(1) If the amendments are not approved, the option award to each optionee will
be reduced by approximately 48%.
FEDERAL TAX TREATMENT OF THE 1996 STOCK OPTION PLAN
An optionee granted a non-qualified stock option will not recognize income
for federal income tax purposes upon the grant of the option but will, upon the
exercise of the option, recognize ordinary income equal to the amount by which
the fair market value of the Shares acquired through the exercise of the option
exceeds the exercise price of the option.
When an optionee exercises a non-qualified option, the Company is entitled
to a
23
deduction for federal income tax purposes equal to the amount of income
recognized by the optionee upon the exercise of the option, provided any federal
income tax withholding requirements are satisfied.
An employee granted an incentive stock option under section 422 of the Code
will not recognize income for federal income tax purposes upon the grant or
exercise of the option. However, the amount by which the fair market value of
the Shares acquired through the exercise of the incentive stock option exceeds
the exercise price of the option is an item of tax preference for the purpose of
computing the employee's alternative minimum taxable income for the year of
exercise.
The Company is not entitled to a deduction for federal income tax purposes
in connection with the grant or exercise of an incentive stock option. However,
if within one year of an employee's acquisition of Shares through the exercise
of an incentive stock option the employee disposes of the Shares, the employee
will recognize ordinary income and the Company will be entitled to a deduction
in the year of the disposition equal to the amount by which the fair market
value of the Shares on the date of exercise (or, in certain cases, if lower, the
amount of the proceeds of the disposition) exceeds the exercise price of the
option.
An optionee's basis for determining capital gain or loss on the sale or
exchange of Shares acquired through the exercise of an option will be, in the
case of a non-qualified option, the exercise price of the option plus any
ordinary income recognized upon the exercise of the option, or, in the case of
an incentive stock option, the exercise price of the option plus, if the sale or
exchange occurs within one year of the employee's acquisition of the Shares, any
ordinary income recognized on the sale or exchange.
3. PROPOSAL TO AMEND THE SIZELER PROPERTY
INVESTORS, INC. 1994 DIRECTORS' STOCK OWNERSHIP PLAN
At the Meeting, stockholders will be asked to vote on a proposal to approve
the adoption of an amendment to the Company's 1994 Directors' Stock Ownership
Plan (the "Directors' Plan"). The approval of the amendment to the Directors'
Plan requires the affirmative vote of a majority of votes cast on the proposal,
provided that the total vote cast on the proposal represents over 50% in
interest of all securities entitled to vote on the proposal. The directors
recommend a vote FOR adoption of the amendment to the Directors' Plan. Unless
otherwise instructed, proxies will be voted FOR adoption of the amendment to the
Directors' Plan.
The description of the Directors' Plan set forth below is qualified in its
entirety by the text of the Directors' Plan, which is set forth in Appendix C to
this Proxy Statement.
24
SUMMARY OF THE DIRECTORS' PLAN
The Directors' Plan provides for the payment of annual fees to directors of
the Company who are not employees of the Company. The Directors' Plan is
intended to encourage directors to increase their proprietary interest in the
Company by receipt of their annual fees in the form of Shares. The Directors'
Plan provides for a stock award to be made to each director annually on the
first business day following January 15. A newly-appointed or elected director
shall also receive a stock award, provided the director's appointment or
election precedes October 1 of a year. As amended, subject to stockholder
approval, effective January 15, 2002, the number of Shares of common stock in
each such award would be 2,000. Prior to amendment, the number was 1,500. A
director may elect to be paid a cash substitute rather than all or part of an
annual stock award. The cash substitute will equal 90 percent of the value of
the Shares for which the director elects the cash substitute. For purposes of
the Directors' Plan, the value of a Share is deemed to equal the average closing
price of a share on the exchange on which Shares are listed on the last five
days on which Shares were traded prior to the date of receipt of the annual
stock award. The Board of Directors may amend or terminate the Directors' Plan,
provided, however, that no amendment that would materially increase the benefits
accruing to directors may be made without stockholder approval.
AMOUNT OF AWARDS FOR 2002
Each director, except Mr. Lassen and Mr. Masilla (who are salaried
officers), was granted an award of 2,000 Shares on January 15, 2002, subject to
stockholder approval. The award would be reduced to 1,500 Shares in the event
the stockholders do not approve this proposal. No directors elected cash.
4. OTHER MATTERS
The directors know of no business to be brought before the Meeting other
than as set forth above. If, however, any other business should properly come
before the Meeting, it is the intention of the persons named in the enclosed
form of proxy to vote such proxies in accordance with their best judgment on
such matters.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed KPMG LLP, independent public
accountants, to act as auditors for the fiscal year ending December 31, 2002.
KPMG LLP has audited the books of the Company since 1995. A representative of
KPMG LLP is expected to be present at the Meeting and will have an opportunity
to make a statement, if he so desires, and will be available to respond to
appropriate questions.
25
During the fiscal year ending December 31, 2001, KPMG LLP provided various
audit and non-audit services to the Company as follows:
Audit Fees. The aggregate fees billed to the Company by KPMG LLP during
the fiscal year 2001 for the audit of the Company's annual financial statements
and the review of those financial statements in the Company's quarterly reports
on Form 10-Q totaled $75,000.
Financial Information Systems Design and Implementation Fees. Our
independent auditors did not render information technology services to us during
the fiscal year ending December 31, 2001.
All Other Fees. The aggregate fees billed by our independent auditors for
professional services rendered to us during fiscal year 2001, other than the
audit services referred to above, were approximately $185,000 and primarily
included services rendered to us in connection with tax preparation, tax
consulting services and fees related to review of the Company's registration
statements filed with the Securities and Exchange Commission.
The Audit Committee of the Board of Directors has considered whether
provision of the services described above is compatible with maintaining the
independent accountants' independence and has determined that such services have
not adversely affected KPMG LLP's independence.
STOCKHOLDER PROPOSALS FOR THE 2003
ANNUAL MEETING OF STOCKHOLDERS
PROPOSALS IN COMPANY'S PROXY STATEMENT
Stockholder proposals submitted for inclusion as a stockholder proposal in
the Company's proxy materials for the 2003 Annual Meeting of Stockholders must
be received by the Company at its office at 2542 Williams Boulevard, Kenner,
Louisiana 70062 no later than December 10, 2002.
PROPOSALS TO BE INTRODUCED AT THE ANNUAL MEETING BUT NOT INTENDED TO BE INCLUDED
IN THE COMPANY'S PROXY STATEMENT
For any stockholder proposal to be presented in connection with the 2003
Annual Meeting of Stockholders, including any proposal relating to the
nomination of a director to be elected to the Board of Directors of the Company,
a stockholder must give timely written notice thereof in writing to the
Company's Chairman of the Board in compliance with the advance notice and
eligibility requirements contained in the Company's Bylaws. To be timely,
26
a stockholder's notice must be delivered to the Chairman of the Board at the
principal executive offices of the Company not less than 90 days nor more than
120 days prior to the first anniversary of the date of mailing of the notice for
the preceding year's annual meeting; provided, however, that in the event that
the date of the annual meeting is advanced by more than 30 days or delayed by
more than 60 days from such anniversary date, notice by the stockholder to be
timely must be so delivered not earlier than the 120th day prior to the date of
mailing of the notice for such annual meeting and not later than the close of
business on the later of the 90th day prior to the date of mailing of the notice
for such annual meeting or the 10th day following the day on which public
announcement of the date of mailing of the notice for such meeting is first
made. The notice must contain specified information about each nominee or the
proposed business and the stockholder making the nomination or proposal.
Under the Company's Bylaws, based upon an initial mailing date of April 9,
2002, for this Proxy Statement, a qualified stockholder intending to introduce a
proposal or nominate a director at the 2003 Annual Meeting of Stockholders but
not intending the proposal to be included in the Company's proxy materials
should give written notice to the Company's Chairman of the Board not later than
January 9, 2003 and not earlier than December 10, 2002.
The advance notice provisions in the Company's Bylaws also provide that in
the case of a special meeting of stockholders called for the purpose of electing
one or more directors, a stockholder may nominate a person or persons (as the
case may be) for election to such position if the stockholder's notice is
delivered to the Secretary at the principal executive offices of the Company not
earlier than the 90th day prior to the special meeting and not later than the
close of business on the later of the 60th day prior to the special meeting or
the 10th day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting.
The specific requirements of the advance notice and eligibility provisions
with respect to the Company, are set forth in Article II, Section 9, 11 and 12
of the Bylaws, a copy of which is available upon request. Such requests and any
stockholder proposals should be sent to the Chairman of the Board of the Company
at 2542 Williams Boulevard, Kenner, Louisiana 70062.
By Order of the Board of Directors
THOMAS A. MASILLA, JR.
President
Kenner, Louisiana
27
Appendix A
SIZELER PROPERTY INVESTORS, INC.
(the "Company")
AUDIT COMMITTEE CHARTER
ORGANIZATION
A committee of the Board of Directors is designated as the Audit Committee
("Committee"). The Audit Committee shall be composed of three or more directors,
one of whom shall be Chairman, as determined from time to time by the Board of
Directors. Each member of the Audit Committee ("Member") shall be independent of
the management of the Company and free of any relationship that, in the judgment
of the Board of Directors, may interfere with the exercise of that Member's
independence. In determining whether any Member is independent, the Board of
Directors will be guided by the definition of "Independent" contained in the
Corporate Responsibility provisions of the New York Stock Exchange Listed
Company Manual as amended from time to time ("Listed Company Manual"). The
Committee's Members shall have such additional qualifications as required by the
Listed Company Manual.
STATEMENT OF POLICY
The Committee shall provide assistance to the corporate directors in
fulfilling their responsibilities to the shareholders and investment community
relating to corporate accounting, reporting practices of the Company and the
quality and integrity of the Company's financial reports.
RESPONSIBILITIES
In carrying out its responsibilities, the Committee shall maintain free and
open means of communication among its Members, the independent auditors, and the
financial management of the Company. The Audit Committee's policies and
procedures should remain flexible, to react to changing conditions and to
achieve and maintain a standard that the corporate accounting and reporting
practices of the Company are in accordance with accounting principles generally
accepted in the United States of America, and of the highest quality.
In carrying out these responsibilities, The Committee will:
1. Review this Charter on an annual basis and update it as conditions dictate.
2. Review with management the Company's annual financial statements, including
significant changes in accounting principles or their application.
A-1
3. Review with the independent auditors their audit report on the annual
financial statements, including the application of the Company's accounting
principles; and discuss with the independent auditors and management their
judgment as to the quality of the Company's accounting principles.
4. Based on the Committee's review and discussion of the Company's annual
financial statements with management and the independent auditors, recommend
to the Board that the annual financial statements be included in the
Company's Annual Report on Form 10-K.
5. With respect to the independent auditors' audit of the Company's annual
financial statements and review of its quarterly financial statements,
discuss with the independent auditors those matters described in Statement
on Auditing Standards 61, as amended or supplemented from time to time.
6. Review the audit plans and activities of the independent auditors and their
coordination with the Company's financial management.
7. Recommend to the Board the selection or replacement of the independent
auditors, taking into consideration independence and effectiveness. As part
of such process, obtain from such auditors, and discuss with them, the
disclosures regarding independence required by Independence Standards Board
Standard No. 1, as amended or supplemented from time to time.
8. Review the fees paid to the independent auditors with respect to all
services.
9. Review with management and the independent auditors the adequacy of the
Company's internal controls and management's responses with respect to
recommendations for internal control improvements.
10. Meet with the Company's chief executive officer (CEO) and financial
management and with the independent auditors in separate executive sessions
to discuss any matters which the Committee or the CEO or financial
management believe should be discussed privately with the Committee.
11. Report Committee actions to the Board of Directors, with such
recommendations as the Committee deems appropriate.
12. Report to stockholders in the Company's annual proxy statement on those
matters required by Securities and Exchange Commission Rules.
13. Conduct or authorize investigations into any matters within the Committee's
scope of responsibilities.
A-2
14. Consider such other matters with respect to the Company's financial affairs,
internal controls and financial management, and audits as the Committee may
deem advisable.
15. Hold such regular and special meetings of the Committee as shall be
appropriate to carry out the Committee's responsibilities and comply with
any requests of the Board of Directors.
A-3
Appendix B
SIZELER PROPERTY INVESTORS, INC.
1996 STOCK OPTION PLAN, as
amended through March 22, 2002
1. PURPOSE.
The purpose of the Sizeler Property Investors, Inc. 1996 Stock Option Plan
("Plan") is to offer officers, key employees and directors of Sizeler Property
Investors, Inc. (the "Company") the opportunity to own shares of Common Stock of
the Company and receive cash payments based on the performance of Common Stock
and, by doing so, to increase the incentive for such employees and directors to
put forth maximum effort for the success of the Company's business. The Plan is
intended to enhance the Company's ability to attract and retain highly qualified
persons for the successful conduct of its business.
2. DEFINITIONS.
As used in this Plan:
(a) "Common Stock" means the common stock, $0.0001 par value, of
the Company.
(b) "Key Employees" means officers and other key employees of the
Company.
(c) "Fair Market Value" of a share of Common Stock on any date means the
average of the high and low sales prices of a share of Common Stock if the
Company's stock is listed on an exchange or the average between the bid and the
asked price for that date if the shares are traded over-the-counter (or, if no
such shares were publicly traded on that date, the next preceding date that such
shares were so traded), all as published in The Wall Street Journal or in any
other publication selected by the Committee; provided, however, that if shares
of Common Stock shall not have been publicly traded for more than ten days
immediately preceding such date, then the Fair Market Value of a share of Common
Stock shall be determined by the Committee in such manner as it may deem
appropriate.
(d) "Option" means an option granted pursuant to the Plan to purchase
shares of Common Stock, and may refer to either an incentive stock option as
defined in Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), or a non-qualified stock option, that is, a stock option that is not
an incentive stock option.
B-1
(e) "Committee" means the Compensation Committee of the Board of
Directors of the Company or such other committee of the Board that the Board has
appointed to administer the Plan. The Committee shall consist of two or more
members of the Board of Directors of the Company who are Non-Employee Directors.
Members of the Committee shall be disinterested persons as defined in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, or any successor rule.
(f) "Non-Employee Director" means a director of the Company who is not,
and has not been for a period of at least one year prior to that date as of
which the determination is made, an employee of the Company.
(g) "Change of Control" means:
(i) any person (which, for all purposes this Section 2(g), shall
include, without limitation, an individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate and a trustee, executor, administrator or
other legal representative) (a "Person") or any group of two or more Persons
acting in concert who or that becomes the beneficial owner, directly or
indirectly, of securities of the Company representing, or acquires the right to
control or direct, or to acquire through the conversion of securities or the
exercise of warrants or other rights to acquire securities, 25 percent or more
of the combined voting power of the Company's then outstanding securities;
provided that for the purposes of this Section 2(g), (A) "voting power" means
the right to vote for the election of directors, and (B) any determination of
percentage of combined voting power shall be made on the basis that all
securities beneficially owned by the Person or group or over which control or
direction is exercised by the Person or group that are convertible into
securities carrying voting rights have been converted (whether or not then
convertible) and all options, warrants, or other rights that may be exercised to
acquire securities beneficially owned by the Person or group or over which
control or direction is exercised by the Person or group have been exercised
(whether or not then exercisable), and no such convertible securities have been
converted by any other Person and no such options, warrants, or other rights
have been exercised by any other Person and provided further that "Person" shall
not include the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company, any entity holding shares
of Common Stock organized, appointed, or established by the Company or any of
its Subsidiaries for or pursuant to the terms of any such plan, Sidney W.
Lassen, together with his spouse, descendants, and any trust established for the
benefit of Sidney W. Lassen, his spouse, and descendants or any one or more of
them, or Sizeler Realty Co., Inc.; or
(ii) there shall be elected or appointed to the Board of Directors of
the Company any director or directors whose appointment or election to the board
or nomination for election by the Company's stockholders was not approved by a
vote of at least a majority of the directors then in office who were directors
on February 15, 2002, or whose election or appointment or nomination for
election was previously so approved; or
B-2
(iii) a reorganization, merger, consolidation, combination,
corporate restructuring, or similar transaction (an "Event"), in each case, in
respect of which the beneficial owners of the outstanding voting securities of
the Company immediately prior to such Event do not, following such Event,
beneficially own, directly or indirectly, more than 50 percent of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the Company and any resulting Parent
in substantially the same proportions as their ownership, immediately prior to
such Event, of the outstanding voting securities of the Company.
(h) "Parent" shall mean any entity that directly or indirectly through one
or more entities owns or controls more than 50 percent of the voting stock or
Common Stock of the Company.
(i) "Subsidiary" shall mean any entity 50 percent or more of the equity
securities of which is owned or controlled, directly or indirectly, by the
Company.
3. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee shall have
all the powers vested in it by the terms of the Plan. The Committee shall be
authorized to interpret the Plan and the Options granted under the Plan, to
establish, amend, and rescind rules and regulations relating to the Plan, and to
make any determinations it believes necessary or advisable for the
administration of the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Option in the
manner and to the extent the Committee deems desirable. Any decision of the
Committee in the administration of the Plan shall be in its sole discretion and
conclusive. The Committee may act only by a majority of its members in office,
except that the members of the Committee may authorize any one or more of their
number or any officer of the Company to execute and deliver documents on behalf
of the Committee.
4. SHARES AVAILABLE.
A total of 1,800,000 shares of Common Stock of the Company shall be
available for grant under the Plan, of which a maximum of 500,000 shares may be
issued to Non-Employee Directors upon the exercise of non-qualified stock
options granted pursuant to Section 5(c). The aggregate number of shares that
may be subject to an Option shall not exceed the available number of shares.
Upon the expiration or termination in whole or part of any unexercised Option,
the shares of Common Stock subject to such Option shall again be available for
grant under the Plan.
5. GRANT OF OPTIONS.
(a) The Company may grant Options to Key Employees to purchase shares of
Common Stock under the Plan.
B-3
(b) The Committee shall select the Key Employees to whom Options are to be
granted and shall determine when Options are to be granted and the number of
shares to be subject to each Option. No incentive stock option shall be granted
to any employee who, at the time the incentive stock option would be granted,
owns stock possessing more than 10 percent of the combined voting power of all
classes of stock of the Company.
(c) (i) Automatic grants of Options were made to Non-Employee Directors
before February 5, 1999, pursuant to the following provisions of this Section
5(c)(i); no Options shall be granted pursuant to Section 5(c)(i) after February
4, 1999. Each person who first becomes a Non-Employee Director after February 1,
1996, and before February 5, 1999, will automatically be granted on the date
such person becomes a Non-Employee Director a non-qualified stock option to
purchase 5,000 shares of Common Stock. On the first business day of January in
each calendar year following the calendar year in which a Non-Employee Director
is first granted an Option to purchase Common Stock pursuant to this Section
5(c), or, in the case of a person who became a Non-Employee Director prior to
February 1, 1996, on the first business day of January, the Non-Employee
Director will automatically be granted a non-qualified stock option to purchase
2,000 shares of Common Stock, provided the optionee continues to be a Non-
Employee Director on such date, and provided further that no Options shall be
granted pursuant to this sentence after February 4, 1999. Notwithstanding the
foregoing sentence, each optionee who is a Non-Employee Director on August 16,
1996, will be granted on that date a non-qualified stock option to purchase
2,000 shares of Common Stock less the number of shares of Common Stock, if any,
for which an option is granted to that Non-Employee Director on that date
pursuant to the Company's 1986 Stock Option Plan, as amended; any Non-Employee
Director who is granted an Option to purchase shares of Common Stock on August
16, 1996, pursuant either to the preceding clause or to the Company's 1986 Stock
Option Plan or both, shall not be granted the Option which would otherwise be
granted under this Plan on the first business day of January 1997.
(ii) After February 4, 1999, the Company shall grant Options to
purchase shares of Common Stock to Non-Employee Directors pursuant to Section
5(c)(iii) of the Plan.
(iii) The Board of Directors shall select the Non-Employee Directors
to whom Options are to be granted after February 4, 1999, and shall determine
when Options are to be granted and the number of shares of Common Stock to be
subject to each Option, provided, however, that the maximum number of shares
with respect to which Options may be granted to any one Non-Employee Director in
any one calendar year (including Options granted pursuant to Section 5(c)(i))
shall be 10,000.
(iv) The aggregate number of shares of Common Stock with respect to
which Options may be granted to any one Non-Employee Director pursuant to this
Section 5(c) during the term of the Plan shall not exceed 60,000.
B-4
6. TERMS OF OPTIONS GRANTED TO KEY EMPLOYEES.
Each Option granted to a Key Employee under the Plan shall be evidenced by
a written stock option agreement executed by the Company and the holder of the
Option, in such form and upon such terms and conditions as the Committee shall
determine and as are consistent with the provisions of the Plan, including the
following:
(a) The purchase price of each share of Common Stock subject to an Option
shall not be less than the Fair Market Value of a share of Common Stock on the
date the Option is granted.
(b) An Option may be exercised in whole or in part from time to time
during such period as the Option shall specify, provided that no Option shall be
exercisable within one year after, or more than ten years after, the date of the
grant of the Option.
(c) An Option may require that the optionee represent at the time of each
exercise of the Option that the shares purchased are being acquired for
investment and not with a view to distribution.
(d) The purchase price of the shares with respect to which an Option is
exercised shall be payable in full on the date the Option is exercised, in cash
or, to the extent authorized by the Committee at the time the Option is granted,
in shares of Common Stock or in a combination of cash and such shares. The
value of a share of Common Stock delivered in payment of the purchase price
shall be its Fair Market Value on the date the Option is exercised.
(e) An Option shall not be assignable or transferable by the employee to
whom granted except by will or the laws of descent and distribution and shall be
exercisable, during the employee's lifetime, only by him.
(f) An Option may require that the optionee sell back to the Company any
shares acquired pursuant to the exercise of the Option upon the termination of
the optionee's employment with the Company at the then Fair Market Value of the
shares as determined by the Committee, if such shares have not been registered
under applicable securities laws or if there is no public market for such shares
of the Company's Common Stock.
(g) Unless the Committee shall specify otherwise, the right of each
optionee to exercise his Option to purchase the number of shares to which his
Option initially related shall accrue on a cumulative basis as follows:
(i) One year after the Option is granted: 1/4
(ii) Two years after the Option is granted: 1/4
(iii) Three years after the Option is granted: 1/4
B-5
(iv) Four years after the Option is granted: 1/4
(h) Each agreement relating to an Option granted to a Key Employee shall
state the extent to which such Option is intended to be either an incentive
stock option or a nonqualified stock option.
(i) Any Option that has not already expired, shall expire upon the
termination of the optionee's employment with the Company, whether by death or
otherwise, and no shares of Common Stock may thereafter be purchased pursuant to
such Option, except that:
(i) An optionee may, within three months after the date of the
termination of his employment, purchase any shares of Common Stock that the
optionee was entitled to purchase under an Option on the date of the termination
of his employment. If the optionee is disabled (within the meaning of Section
422(c) of the Code) upon the termination of his employment, the three-month
period provided in this paragraph shall be extended to twelve months.
(ii) Upon the death of any optionee while employed with the Company,
or within the three-month period referred to in Section 6(i)(i) above (twelve
months, in the case of a disabled optionee), the optionee's estate or the person
to whom such optionee's rights under the Option are transferred by will or the
laws of descent and distribution may, within one year after the date of the
optionee's death, purchase any shares of Common Stock that the optionee was
entitled to purchase under an Option on the date of his death.
Nothing in this subsection shall authorize the exercise of an Option
after the expiration of the exercise period provided in the Option, nor later
than ten years after the date of the grant of the Option.
7. ADDITIONAL TERMS OF INCENTIVE STOCK OPTIONS.
Each incentive stock option granted under the Plan shall be subject to the
following terms and conditions in addition to the terms and conditions described
in Section 6 above:
(a) The aggregate Fair Market Value (determined as of the date an
incentive stock option is granted) of the shares of Common Stock for which any
employee may be granted incentive stock options first exercisable in any
calendar year (under this Plan and under all plans of the Company) shall not
exceed $100,000.
(b) If an optionee disposes of shares acquired pursuant to the exercise of
an incentive stock option in a disqualifying disposition within the time periods
identified in Section 422(a)(1) of the Code, the optionee shall be required to
notify the Company of such disposition and provide the Company with information
as to the date of disposition, sales price, and number of shares involved, and
with any other information about such disposition that the Company may
reasonably request.
B-6
7.1 TERMS OF OPTIONS GRANTED TO NON-EMPLOYEE DIRECTORS.
Each Option granted under the Plan to a Non-Employee Director shall be
evidenced by a written stock option agreement executed by the Company and the
holder of the Option, including the following terms and conditions:
(a) The purchase price of each share of Common Stock subject to an Option
granted to a Non-Employee Director shall equal the Fair Market Value of a share
of Common Stock on the date the Option is granted.
(b) An Option granted to a Non-Employee Director shall be exercisable in
full on the date that is six months after the date of the grant of the Option
and, to the extent not already exercised, shall expire upon the earlier to occur
of (i) the date that is six months after the termination of the Non-Employee
Director's service as a Non-Employee Director or a Key Employee and (ii) the
date that is ten years after the date of the grant of the Option.
(c) An Option shall require that the optionee represent at the time of
each exercise of the Option that the shares purchased are being acquired for
investment and not with a view to distribution.
(d) The purchase price of the shares with respect to which an Option is
exercised shall be payable in full on the date the Option is exercised, in cash
or in shares of Common Stock or in a combination of cash and such shares. The
value of a share of Common Stock delivered in payment of the purchase price
shall be its Fair Market Value on the date the Option is exercised.
(e) An Option shall not be assignable or transferable by the optionee
except by will or the laws of descent and distribution and shall be exercisable,
during the optionee's lifetime, only by him.
8. ADJUSTMENT OF SHARES AVAILABLE.
If there is any change in the number of outstanding shares of Common Stock
of the Company through the declaration of stock dividends or through stock
splits, then the number of shares available for Options and of shares subject to
any Option shall be automatically adjusted. If there is any change in the
number of outstanding shares of Common Stock of the Company through any change
in the capital account of the Company or through any other transaction referred
to in section 424(a) of the Internal Revenue Code, then the number of shares
available for Options and of shares subject to any Option and the purchase price
of any share subject to any Option shall be appropriately adjusted by the
Committee, except to the extent the Committee takes other action pursuant to the
following paragraph.
B-7
Upon a Change of Control of the Company, all terms, conditions,
restrictions, and limits in effect on outstanding Options shall lapse as of the
Change of Control, and all outstanding Options shall be immediately exercisable.
Further, upon a Change of Control, the Committee in its sole discretion may
(i) provide for the purchase of each Option then outstanding for an amount of
cash equal to the excess of the Fair Market Value of the shares subject to such
Option (which shall not be less than the amount of cash and the fair market
value of other consideration tendered for such shares in the Change of Control
transaction) over the aggregate purchase price of the shares subject to the
Option, (ii) make such adjustments to Options then outstanding as the Committee
finds appropriate to reflect the Change of Control, or (iii) cause any surviving
corporation in the Change of Control to assume Options then outstanding or
substitute new options for such outstanding Options.
9. AMENDMENT.
The Board of Directors of the Company may amend the Plan in any respect,
provided, however, that without the approval of the shareholders of the Company
the Board may not (i) except as provided in Section 8, increase the maximum
number of shares of Common Stock that may be issued under the Plan as set forth
in Section 4 or decrease the minimum purchase price of shares of Common Stock
subject to an Option, as set forth in Sections 6(a) and 7.1(a); (ii) extend the
term of the Plan; (iii) change the classes of employees and directors to whom
Options may be granted under the Plan; (iv) provide for the administration of
the Plan otherwise than by a Committee composed entirely of Non-Employee
Directors as set forth in Section 2(e); or (v) materially increase the cost of
the Plan to the Company. No amendment of the Plan shall adversely affect any
right of any holder of an Option already granted without such optionee's written
consent.
10. TERMINATION OF PLAN.
The Board of Directors may terminate the Plan at any time with respect to
any shares of Common Stock that are not then subject to grants. Unless
terminated earlier by the Board of Directors, the Plan shall terminate on
February 1, 2006.
11. NO RIGHT TO CONTINUED EMPLOYMENT.
Nothing in the Plan or in any Option granted pursuant to the Plan shall
confer upon any employee the right to continue in the employ of the Company or
restrict the right of the Company to terminate the employment of any employee.
B-8
12. RIGHTS AS STOCKHOLDER.
No person shall have the rights of a stockholder with respect to shares of
Common Stock subject to an Option until the date of issuance, if any, of a stock
certificate pursuant to the exercise of an Option.
13. REGULATORY APPROVALS AND LISTING.
The Company shall not be required to issue any certificate or certificates
for shares of Common Stock upon the exercise of an Option prior to (a) the
obtaining of any approval from any government agency that the Company shall, in
its sole discretion, determine to be necessary or advisable, (b) the admission
of such shares to listing on any stock exchange on which the Common Stock may
then be listed, and (c) the completion of any registration or other
qualification of such shares under any state or Federal law or rulings or
regulations of any governmental body that the Company shall, in its sole
discretion, determine to be necessary or advisable.
14. CONSTRUCTION.
The Plan shall be construed in accordance with the law of the State of
Delaware. With respect to any Options granted under the Plan that are intended
to qualify as incentive stock options as defined in Section 422 of the Code, the
terms of the Plan and of each incentive stock option granted pursuant to the
Plan shall be construed to effectuate such intention. The Committee shall have
the power to amend the Plan to conform with Section 422 of the Code or of any
new revenue laws of the United States that accord similar tax treatment to stock
option plans.
15. SATISFACTION OF TAX LIABILITIES.
Notwithstanding any other provision of this Plan, the Company shall not be
required to issue any certificate for shares of Common Stock upon the exercise
of an Option unless any Federal, state, or local tax withholding obligation
incurred by the Company in connection with the exercise of the Option has been
provided for by the optionee through the delivery of a sufficient amount of cash
to the Company or, with the consent of the Committee, through the retention of
shares of Common Stock otherwise issuable on the exercise of the Option or the
delivery of Common Stock to the Company by the optionee, under such terms as the
Committee finds appropriate. Whenever under the Plan payments are made in cash,
such payments shall be net of amounts sufficient to satisfy federal, state and
local withholding tax requirements.
B-9
APPENDIX C
SIZELER PROPERTY INVESTORS, INC.
1994 DIRECTORS' STOCK OWNERSHIP PLAN
AS AMENDED THROUGH JANUARY 15, 2002
SECTION 1. INTRODUCTION
Sizeler Property Investors, Inc. (the "Company"), established the
Sizeler Property Investors, Inc. 1994 Directors' Stock Ownership Plan effective
January 1, 1994, and amended the Plan by the First Amendment effective August 1,
1994, the Second Amendment, effective August 16, 1996, and the Third Amendment
effective January 15, 2002. The Plan, as restated to incorporate the amendments
made by the First, Second, and Third Amendments is set forth below and is to be
known as the Sizeler Property Investors, Inc. Directors' Stock Ownership Plan,
as amended, effective January 15, 2002 (the "Plan").
In connection with the establishment of the Plan, the Company determined
to grant no additional options under the 1989 Directors' Stock Option Plan.
SECTION 2. PURPOSES
The purpose of the Plan is to promote the interests of the Company
and its shareholders by strengthening the Company's ability to attract and
retain the services of experienced and knowledgeable directors and by
encouraging directors to increase their proprietary interest in the Company
through receipt of their annual fees in the form of shares of the common stock,
$0.0001 par value, of the Company ("Shares").
SECTION 3. PARTICIPATION
Each member of the Company's Board of Directors who is not an
employee of the Company (a "Director") shall be eligible to participate in the
Plan.
SECTION 4. ANNUAL STOCK AWARD
(a) There shall be an Annual Award Date under this Plan for each
calendar year beginning with 1994. The Annual Award Date shall be the first
business day following January 15 of the calendar year, except that, for the
year 1995, the Award Date shall be February 15.
On each Annual Award Date after December 31, 1996, and before January 1,
2002, each then-current Director shall automatically receive an
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award of 1,500 Shares. On each Annual Award Date after December 31, 2001, each
then-current Director shall automatically receive an award of 2,000 shares. Such
an award and any award pursuant to Section 4(b) shall be referred to in this
Plan as the Annual Stock Award.
(b) A Director who is elected to the Board of Directors at an annual
meeting of shareholders or who is appointed to fill a vacancy on the Board of
Directors at any time prior to October 1 of any calendar year and who has not
previously been issued an Annual Stock Award for the calendar year in which the
Director was so elected or appointed shall receive an Annual Stock Award for
that calendar year five business days after the date of such election or
appointment to the Board.
SECTION 5. ISSUANCE OF SHARES
Subject to the provisions of Sections 6, 7 and 12, the Company shall issue
to an eligible Director the requisite number of Shares included in an Annual
Stock Award as soon as practicable following the date of receipt of the Annual
Stock Award.
SECTION 6. RESTRICTIONS ON ISSUANCE OF SHARES; RIGHTS AS SHAREHOLDERS
The obligation of the Company to issue Shares pursuant to an Annual Stock
Award shall be subject to the condition that, should the Board of Directors of
the Company determine that the listing, registration, or qualification of the
Shares upon any securities exchange or under any state or federal law or the
consent or approval of any regulatory body is necessary or desirable as a
condition to or in connection with the issuance of the Shares, no such Shares
may be issued unless such listing, registration, qualification, consent, or
approval has been effected or obtained free of any conditions not acceptable to
the Board of Directors.
The certificates representing Shares issued by the Company in connection
with an award under this Plan may bear a legend describing any restrictions on
resale of such Shares under applicable securities laws and stop transfer orders
with respect to such certificates may be entered on the Company's stock transfer
records.
A Director will have no rights as a shareholder of the Company with respect
to any Shares to be issued in connection with an award under this Plan until the
date of issuance of the certificate for such Shares. No adjustment shall be made
for dividends or other rights for which the record date precedes the date the
certificate is issued.
SECTION 7. CASH ELECTION
Except as provided in Paragraph (iii) below, a Director who will be
eligible for an Annual Stock Award on an Annual Award Date may elect a cash
payment in the amount described below (the "Cash Substitute") instead of the
issuance of some or all of the Shares included in the Director's Annual Stock
Award. The Company shall pay the Cash Substitute as soon as practicable
following the Annual Award Date.
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The Cash Substitute shall equal 90 percent of the value, as determined
below, of that number of Shares included in the Annual Stock Award which the
Director elects not be issued. For the purposes of this Plan, the value of each
Share included in the Annual Stock Award shall be deemed to equal the average
closing price of a Share on the New York Stock Exchange (or, if not listed on
that exchange, on any other national securities exchange or over-the-counter
market selected by the Board of Directors on which the Shares were traded) on
the last five days preceding the Annual Award Date on which Shares were traded,
as reported in The Wall Street Journal or another publication selected by the
Board of Directors.
To elect the Cash Substitute, a Director shall file an irrevocable written
election with the Secretary of the Company by June 30 preceding the Annual Award
Date, subject to the following provisions:
(i) An election relating to an Annual Stock Award to be made on
January 17, 1994, may be filed until January 14, 1994.
(ii) An election relating to an Annual Stock Award to be made on
February 15, 1995, may be filed until August 12, 1994.
(iii) A Director may not elect a Cash Substitute for an Annual Stock
Award to be made pursuant to Section 4(b) upon the Director's election or
appointment to the Board of Directors, nor may a Director elect a Cash
Substitute for an Annual Stock Award to be made on an Annual Award Date unless
the Director was a Director on and filed an election on or before the last date
for filing an election relating to that Annual Award Date.
SECTION 8. ADMINISTRATION
The Board of Directors shall administer the Plan. Any determination of the
Board of Directors with respect to participation, the amount of awards, the
payment of awards, or any matter involving the interpretation of the Plan shall
be conclusive and binding on all participants.
SECTION 9. NO ASSIGNMENT
A Director may not assign any right to an award or payment under this Plan,
and awards and payments shall not be subject to alienation whether by
garnishment, lien, or otherwise, except as required by law.
SECTION 10. CAPITAL ADJUSTMENTS
The number of Shares included in an Annual Stock Award pursuant to Section
4 shall be proportionately adjusted for any increase or decrease in the number
of issued Shares resulting from a stock dividend, stock split, reclassification,
recapitalization, combination, or exchange with respect to the Shares.
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SECTION 11. AMENDMENT AND TERMINATION
The Board of Directors of the Company may amend or terminate this Plan at
any time by resolution, provided, however, that no amendment or termination of
the Plan may adversely affect any award to which a Director has previously
become entitled, and provided, further, that no amendment that would materially
increase the benefits accruing to Directors shall be made without the approval
of the Company's shareholders.
SECTION 12. APPROVAL OF SHAREHOLDERS
This Plan shall be effective immediately upon approval by the Company's
shareholders. Any issuance of Shares prior to the approval of the Plan by the
Company's shareholders may be conditional upon the subsequent approval of
shareholders at the next annual meeting of shareholders.
SECTION 13. OTHER DIRECTOR COMPENSATION
This Plan does not preclude payment of fees to a Director for attendance at
meetings of the Board of Directors and of committees of the Board of Directors
in such amounts and upon such terms as the Board of Directors shall approve from
time to time.
SECTION 14. AUTHORIZATION
The Board of Directors of the Company authorized the establishment of this
Plan by action duly taken at its meeting on October 29, 1993.
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SIZELER PROPERTY INVESTORS, INC.
2542 Williams Boulevard
Kenner, Louisiana 70062
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints SIDNEY W. LASSEN and THOMAS A. MASILLA, JR.
and each or either of them, Proxies for the undersigned, with full power of
substitution, to vote all shares of common stock, par value $0.0001 per share,
of Sizeler Property Investors, Inc. (the "Company") which the undersigned would
be entitled to vote at the Annual Meeting of Stockholders to be held at the Four
Seasons Resort, 2800 South Ocean Boulevard, Palm Beach, Florida on Friday, May
10, 2002 at 10:00 a.m., local time, or any adjournment thereof, and directs that
the shares represented by this Proxy shall be voted as indicated on the reverse
side.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. THE BOARD OF DIRECTORS FAVORS A VOTE FOR PROPOSALS 1, 2 AND 3. IF
NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 ON THE
REVERSE AND WILL BE VOTED IN THE DISCRETION OF THE PROXIES NAMED HEREIN WITH
RESPECT TO ANY MATTER REFERRED TO IN 4 ON THE REVERSE. YOU ARE ENCOURAGED TO
SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
(Continued and to be dated and signed on the reverse side.)
1. ELECTION OF DIRECTORS: Election of the two nominees listed below to serve
until the 2005 Annual Meeting of Stockholders and until their successors
are duly elected and qualified.
FOR all nominees [_] WITHHOLD AUTHORITY [_] Exceptions [_]
listed below to vote for all nominees
listed below
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through his name in the list below.
Nominees: 01 - Francis L. Fraenkel and 02 - Sidney W. Lassen
2. AMENDMENT TO 1996 STOCK OPTION PLAN: Proposal to approve the amendments to
the Company's 1996 Stock Option Plan, as amended, (i) to increase the total
number of shares of common stock available under the plan, (ii) to increase
the number of shares of common stock with respect to which options may be
granted to non-employee directors individually and as a group, and (iii) to
modify the definition of a "change of control."
FOR [_] AGAINST [_] ABSTAIN [_]
3. AMENDMENT TO 1994 DIRECTORS' STOCK OWNERSHIP PLAN: Proposal to approve the
amendments to the Company's 1994 Directors' Stock Ownership Plan, as
amended, to increase the number of shares of common stock granted to non-
employee directors on an annual basis.
FOR [_] AGAINST [_] ABSTAIN [_]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
To change your address, please mark this box. [_]
Please date and sign your name exactly as it appears below and return this Proxy
promptly in the enclosed envelope, which requires no postage if mailed in the
United States.
PLEASE SIGN EXACTLY AS NAME(S) APPEAR ON STOCK CERTIFICATE(S). A corporation is
requested to sign its name by its President or other authorized officer, with
the office held so designated. A partnership should sign in the partnership
name by an authorized person. Executors, trustees, administrators, etc. are
requested to indicate the capacity in which they are signing. JOINT TENANTS
SHOULD BOTH SIGN.
________ ________________________ ________________________
Date Share Owner sign here Co-Owner sign here
(BACK)