SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
REGENCY CENTERS CORPORATION
(Name of Registrant as Specified in Its Charter)
------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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[X] No fee required.
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computed pursuant to Exchange Act Rule 0-11 (Set forth the
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REGENCY CENTERS CORPORATION
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NOTICE AND PROXY STATEMENT
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 1, 2001
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the annual meeting of shareholders of
Regency Centers Corporation will be held on Tuesday, May 1, 2001, at 10:00 A.M.,
local time, in the second floor auditorium of the Modis Building, Independent
Square, One Independent Drive, Jacksonville, Florida.
The meeting will be held for the following purposes:
1. To elect one Class III Director, one Class I Director and four
Class II Directors to serve terms expiring at the annual
meeting of shareholders to be held in 2002, 2003 and 2004,
respectively, and until their successors have been elected and
qualified.
2. To consider and vote upon continuation for an additional five
years of the participation rights granted to Security Capital
to purchase shares of capital stock issued by Regency in the
future.
3. To consider and vote upon the proposed amendment to Regency's
charter to delete the restrictions on foreign ownership of
Regency's capital stock.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The shareholders of record at the close of business on March 13, 2001
will be entitled to vote at the annual meeting.
We hope you will be able to attend the meeting, but in any event we
would appreciate your dating, signing and returning the enclosed proxy as
promptly as possible. You may also vote via the internet, or by telephone, as
instructed on the enclosed proxy. If you are able to attend the meeting, you may
revoke your proxy and vote in person.
By Order of the Board of Directors,
J. Christian Leavitt
Senior Vice President, Secretary
and Treasurer
Dated: March 25, 2001
TABLE OF CONTENTS
Page
VOTING SECURITIES ............................................................1
Standstill...........................................................4
PROPOSAL 1: ELECTION OF DIRECTORS ..........................................4
Section 16(a) Beneficial Ownership Reporting Compliance .............8
Board of Directors and Standing Committees .........................8
AUDIT COMMITTEE REPORT .......................................................9
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION .....................11
COMPARATIVE STOCK PERFORMANCE ..............................................15
CERTAIN TRANSACTIONS .......................................................19
PROPOSAL 2: APPROVAL OF CONTINUATION OF SECURITY CAPITAL
PARTICIPATION RIGHTS ..........................................20
Background ........................................................20
Participation Rights ...............................................20
Consequences of Failure to Ratify Participation Rights .............21
PROPOSAL 3: AMENDMENT OF REGENCY'S CHARTER TO DELETE FOREIGN OWNERSHIP
RESTRICTIONS ...................................................22
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ....................................23
OTHER MATTERS ..............................................................23
SHAREHOLDER PROPOSALS ......................................................23
ANNUAL REPORT ..............................................................24
EXPENSES OF SOLICITATION ...................................................24
APPENDIX A .................................................................25
Audit Committee Charter ............................................25
APPENDIX B .................................................................28
Proposed Charter Amendment .........................................28
Current Text of Section 5.14 of Articles of Incorporation ..........29
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Regency Centers Corporation
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
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PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD MAY 1, 2001
This proxy statement and the enclosed form of proxy are first
being sent to shareholders of Regency Centers Corporation on or about March 25,
2001 in connection with the solicitation by Regency's board of directors of
proxies to be used at Regency's 2001 annual meeting of shareholders. The meeting
will be held on Tuesday, May 1, 2001, at 10:00 A.M., local time, in the second
floor auditorium of the Modis Building, Independent Square, One Independent
Drive, Jacksonville, Florida.
The board of directors has designated Martin E. Stein, Jr.,
Mary Lou Fiala and Bruce M. Johnson, and each or any of them, as proxies to vote
the shares of common stock solicited on its behalf. If you sign and return the
enclosed form of proxy, you may nevertheless revoke it at any time insofar as it
has not been exercised by (1) giving written notice to Regency's Secretary, (2)
delivering a later dated proxy, or (3) attending the meeting and voting in
person. The shares represented by your proxy will be voted unless the proxy is
mutilated or otherwise received in such form or at such time as to render it not
votable. If you have access to the Internet you may vote your proxy
electronically at the address on your proxy card. Please carefully follow the
directions on your proxy card.
If necessary, the holders of the proxies may vote in favor of
a proposal to adjourn the meeting to permit further solicitation of proxies in
order to obtain sufficient votes to approve any of the matters being considered
at the meeting. If the meeting is adjourned for any reason, at any subsequent
reconvening of the meeting all proxies may be voted in the same manner as the
proxies would have been voted at the original convening of the meeting (except
for any proxies that have effectively been revoked or withdrawn).
VOTING SECURITIES
The record of shareholders entitled to vote was taken at the
close of business on March 13, 2001. At such date, Regency had outstanding and
entitled to vote 57,422,226 shares of common stock, $.01 par value, and
1,487,507 shares of Series 2 cumulative convertible redeemable preferred stock,
$.01 par value. The Series 2 preferred stock votes together with the common
stock as a single class. Each share of voting stock entitles the holder to one
vote. Holders of a majority of the outstanding voting stock must be present in
person or represented by proxy to constitute a quorum at the annual meeting.
The following table shows information relating to the
beneficial ownership as of March 13, 2001 of (1) each person known to Regency to
be the beneficial owner of more than 5% of Regency's voting stock, (2) each
director and nominee, (3) each of the executive officers named in the summary
compensation table elsewhere in this proxy statement, and (4) all
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directors and executive officers as a group. Except as otherwise indicated, the
shareholders listed exercise sole voting and dispositive power over the shares.
Amount and Nature of Shares Beneficially Owned(1)
Percent of
Number of Outstanding
Title of Shares Right to Restricted Percent Voting
Name Class Owned(2) Acquire(3) Stock(4) of Class Shares
---- -------- --------- ---------- ---------- ------- -----------
Security Capital Group Common 34,273,236(5) - - 59.7% 58.2%
Incorporated(5)
Martin E. Stein, Jr. Common 737,103(6) 339,530 15,712 1.9% 1.8%
Mary Lou Fiala Common 7,821 68,491 37,985 * *
Raymond L. Bank Common 6,819 5,250 - * *
C. Ronald Blankenship Common - - -
A. R. Carpenter Common 16,790 8,250 - * *
J. Dix Druce Common 30,227 8,250 - * *
John T. Kelley, III Common 40,767 3,793 - * *
Douglas S. Luke Common 19,367 7,294 - * *
John C. Schweitzer Common 12,500 3,170 - * *
Thomas G. Wattles Common 49 - -
Terry N. Worrell Common 373,012 3,793 - * *
Bruce M. Johnson Common 82,637 133,504 12,895 * *
All directors and Common 1,327,096 581,325 66,592 3.4% 3.3%
Executive officers as a
group (a total of 12
persons)
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*Less than one percent
(1) Information presented in this table and related notes has been obtained
from the beneficial owner and from reports filed by the beneficial owner
with the Securities and Exchange Commission pursuant to Section 13 of
the Securities Exchange Act of 1934.
(2) Excludes shares that:
o are restricted stock holdings, or
o may be acquired through stock option exercises.
(3) Shares that can be acquired through stock option exercises through May
24, 2001, or through conversion of limited partnership interest in
Regency Centers, L.P.
(4) Shares subject to a vesting schedule, forfeiture risk and other
restrictions.
(5) These shares are owned through SC Realty Incorporated, a wholly owned
subsidiary of Security Capital Group Incorporated. The business address
of Security Capital Group Incorporated is 125 Lincoln Avenue, Santa Fe,
New Mexico 87501.
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(6) Includes the following shares over which Mr. Stein is deemed to have
shared voting and investment power:
o 160,263 shares held by The Regency Group (Nevada) Limited
Partnership, the sole general partner of which is a
wholly-owned subsidiary of The Regency Group, Inc. All of the
outstanding stock of The Regency Group, Inc. is owned by The
Regency Square II (Nevada) Limited Partnership, the sole
general partner of which is a corporation in which all of the
outstanding stock is owned by Mr. Stein and members of his
family.
o 307,147 shares held by The Regency Group II. Mr. Stein is a
general partner of The Regency Group II and a trustee of a trust
which is also a general partner.
o 108,235 shares held by Regency Square II. Mr. Stein is a
general partner of Regency Square II and a trustee of a trust
which is also a general partner.
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Standstill
Security Capital has agreed to a "standstill" ending January
10, 2003 (renewable for additional one-year terms) in its Stockholders Agreement
with Regency, as amended. A "standstill" is an agreement by a shareholder to
refrain from changing its position, most frequently involving an agreement not
to acquire additional shares and/or not to take certain actions relating to
management or control, such as replacing one or more members of the board of
directors. Under the terms of Security Capital's standstill, Security Capital
may not, among other things,
* acquire more than 60% of Regency's outstanding common
stock on a fully diluted basis,
* transfer shares in a negotiated transaction that would
result in any transferee beneficially owning more than
9.8% of Regency's capital stock unless Regency approves
the transfer, in its sole discretion,
* act in concert with any third parties as part of a 13D
group, or
* seek to change the composition or size of the board of
directors, except as provided in the Stockholders
Agreement with respect to Security Capital's representa-
tion on the board.
During the standstill term, Security Capital is generally
required to vote its shares of common stock in accordance with the
recommendation of Regency's board of directors or proportionally in accordance
with the vote of the other holders of the common stock except (1) with respect
to the election of Security Capital's nominees to Regency's board (as to which
Security Capital can vote its shares in its sole discretion); (2) with respect
to any amendment to Regency's articles of incorporation or bylaws that would
reasonably be expected to materially adversely affect Security Capital; and (3)
certain extraordinary matters (as to which Security Capital may vote common
stock owned by it, not to exceed 49% of the outstanding shares, in its sole
discretion).
Security Capital's standstill requires it to vote at the
annual meeting for the board of directors' nominees (other than Security
Capital's representatives) or vote proportionally for such nominees in
accordance with the vote of the other shareholders.
Security Capital's standstill provides for automatic
termination prior to the end of its stated term upon the occurrence of certain
events, including the acquisition by another person or group of 9.8% or more of
the voting power of Regency's outstanding voting securities and defaults by
Regency under the Stockholders Agreement.
PROPOSAL 1: ELECTION OF DIRECTORS
Regency's Restated Articles of Incorporation divide the board
of directors into three classes, as nearly equal as possible. At the meeting,
one Class III Director will be elected to serve for a one-year term, one Class I
director will be elected to serve for a two-year term, and four Class II
directors will be elected to serve for terms of three years. All directors will
serve
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until their successors are elected and qualified. The board of directors has
nominated C. Ronald Blankenship and Thomas G. Wattles to stand for reelection as
Class I and Class III Directors, respectively, and Martin E. Stein, Jr.,
Raymond L. Bank, A. R. Carpenter and J. Dix Druce to stand for reelection as
Class II Directors. All nominees are presently directors. Mr. Blankenship and
Mr. Wattles were elected to the board in January 2001 to fill the board seats
vacated by Mr. Thomas B. Allin and Mr. Jeffrey Cozad. Messrs. Stein, Bank,
Carpenter and Druce were elected at the 1998 annual meeting of shareholders.
Directors will be elected by a plurality of votes cast by shares entitled to
vote at the meeting.
The accompanying proxy will be voted, if authority to do so is
not withheld, for the election as directors of each of the board's nominees.
Each nominee is presently available for election. If any nominee should become
unavailable, which is not now anticipated, the persons voting the accompanying
proxy may in their discretion vote for a substitute.
Information concerning all incumbent directors and all
nominees for director, based on data furnished by them, is set forth below.
Under the terms of a Stockholders Agreement between Regency and Security
Capital, Security Capital has the right, under certain circumstances, to
nominate for election by shareholders its proportionate share of the members of
the board (generally not fewer than two, but no more than 49% of the directors).
Mr. Blankenship and Mr. Wattles have been designated by Security Capital as its
representatives to Regency's board of directors. Security Capital currently has
the right to designate three more members to the board of directors but has
chosen not to do so. In connection with the Company's acquisition of assets from
Branch Properties, L.P. in March 1997, Opportunity Capital Partners II Limited
Partnership, a Maryland limited partnership acquired shares of common stock in
exchange for its interest in Branch. OCP had the right to nominate one member of
the board so long as it retained the shares of common stock received in
connection with the Branch transaction. On liquidation of OCP, a majority of its
Regency stock was distributed to the Oregon Public Employees Retirement Fund.
With Regency's consent, OPERF succeeded to OCP's right to nominate one board
member. Mr. Raymond Bank has been designated by OPERF as its representative to
the Company's board of directors. In accordance with the Agreement and Plan of
Merger between Regency and Pacific Retail Trust, Pacific Retail named Mr. John
T. Kelley, III, Mr. John C. Schweitzer, and Mr. Terry N. Worrell as its
representatives to the board.
The board of directors of Regency recommends a vote "for" the
election of each of its nominees. Proxies solicited by the board will be so
voted unless shareholders specify in their proxies a contrary choice.
MARTIN E. STEIN, JR.
Director since 1993; standing for reelection to Class II term expiring 2004
Mr. Stein, age 48, is Chairman of the Board and Chief
Executive Officer of Regency. He served as President of Regency from its
initial public offering in October 1993 until December 31, 1998. Mr. Stein also
served as President of Regency's predecessor real estate division since 1981,
and Vice President from 1976 to 1981. He is a director of Patriot Transportation
Holding, Inc., a publicly held transportation and real estate company, and Stein
Mart, Inc.
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MARY LOU FIALA
Director since 1997; Class I term expiring 2003
Ms. Fiala, age 49, became President and Chief Operating
Officer of Regency in January 1999. Before joining Regency she was Managing
Director - Security Capital U.S. Realty Strategic Group from March 1997 to
January 1999. Ms. Fiala was Senior Vice President and Director of Stores,
New England - Macy's East/Federated Department Stores from 1994 to March 1997.
From 1976 to 1994, Ms. Fiala held various merchandising and store operations
positions with Macy's/Federated Department Stores.
RAYMOND L. BANK
Director since 1997; standing for reelection to Class II term expiring 2004
Mr. Bank, age 47, has been President and Chief Operating
Officer of Merchant Development Corporation, a venture capital and buy-out firm
focusing on consumer retail, direct marketing, and service companies, since
1994. He has also served as President of Raymond L. Bank Associates, Inc., a
consulting firm serving a diverse clientele in corporate development, retail,
and direct marketing strategies, since 1991. He is a director of OfficeMax, Inc.
C. RONALD BLANKENSHIP
Director since 2001; standing for reelection to Class I term expiring 2003.
Mr. Blankenship, age 51, has been Director, Vice Chairman and
Chief Operating Officer of Security Capital since May 1998. He was Managing
Director of Security Capital from 1991 until May 1998. Prior to June 1997, he
was the Chairman of Archstone Communities Trust. Mr. Blankenship is trustee of
Archstone, trustee of ProLogis Trust, director of Belmont, CarrAmerica Realty
Corporation, InterParking Incorporated and Storage USA, Inc. and Interim
Chairman, Chief Executive Officer and director of Homestead Village Incorporated
since May 1999.
A. R. CARPENTER
Director since 1993; standing for reelection to Class II term expiring 2004.
Mr. Carpenter, age 59, recently retired as Vice Chairman of
CSX Corporation, a position he held since July 1999. From 1962 until February
2001, he held a variety of positions with CSX, including President and Chief
Executive Officer (from 1992 to July 1999) and Executive Vice President-Sales
and Marketing (from 1989 to 1992) of CSX Transportation, Inc. Mr. Carpenter is
a director of Florida Rock Industries, Inc., Stein Mart, Inc. and Birmingham
Steel Corporation.
J. DIX DRUCE, JR.
Director since 1993; standing for reelection to Class II term expiring 2004.
Mr. Druce, age 53, has been President and Chairman of the
Board of Life Service Corp., Inc., a life insurance management company, since
1988, and President and director of
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American Merchants Life Insurance Company and its parent, AML Acquisition
Company, since October 1992. He was President and director (Chairman from May
1989 to July 1991) of National Farmers Union Life Insurance Company from 1987 to
1991, and President and director of Loyalty Life Insurance Company and NFU
Acquisition Company from 1987 to 1991.
JOHN T. KELLEY, III
Director since 1999; Class III term expiring 2002
Mr. Kelley, age 60, was Chairman of Pacific Retail Trust's
board of trustees before its merger into Regency in February 1999. He is a
Trustee of Archstone Communities Trust, an advisory trustee of Prologis Trust
and a director of Security Capital Group Incorporated. From 1987 to 1991 he was
Chairman of the Board of Kelley-Harris Company, Inc., a real estate investment
company, and from 1968 to 1987 he was Managing Director of LaSalle Partners
Limited, specializing in corporate real estate services.
DOUGLAS S. LUKE
Director since 1993; standing for re-election to Class I term expiring 2003
Mr. Luke, age 59, is President and Chief Executive Officer of
HL Capital, Inc., a personal management and investment company. Mr. Luke was
President and Chief Executive Officer of WLD Enterprises, Inc., a Ft.
Lauderdale, Florida based diversified private investment and management company
with interests in securities, real estate and operating businesses from 1991 to
1998. From 1987 to 1990 he was Managing Director of Rothschild Inc./Rothschild
Ventures. He is director of Orbital Sciences Corporation, a space systems
company, and Westvaco Corporation, a diversified paper and chemicals
manufacturing company.
JOHN C. SCHWEITZER
Director since 1999; Class III term expiring 2002
Mr. Schweitzer, age 56, was a member of Pacific Retail Trust's
board of trustees before its merger into Regency in February 1999. He is
President of Westgate Corporation and Managing Partner of Campbell Capital,
Ltd., which holds investments in real estate and venture capital operations. Mr.
Schweitzer is a trustee of Archstone Communities Trust, and a director of
Homestead Village Incorporated, Chase Bank of Texas-Austin, Texas Christian
University, Fort Worth, Texas and KLRJ Austin Public Television. He previously
served as a director or officer of many public companies and financial
institutions, including Franklin Federal Bancorp, Elgin Clock Company, El Paso
Electric Company, MBank El Paso, the Circle K Corporation and Enerserv Products.
THOMAS G. WATTLES
Director since 2001; standing for re-election to Class III term expiring 2002.
Mr. Wattles, age 48, has been Managing Director of Security
Capital since 1991 and a trustee of ProLogis Trust since 1993. He was a director
of ProLogis' predecessor from its formation in 1991, and was Non-Executive
Chairman of ProLogis from March 1997 to May
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1998. Mr. Wattles was Co-Chairman and Chief Investment Officer of ProLogis and
its former REIT Manager from November 1993 to March 1997, and director of the
former REIT Manager from June 1991 to March 1997. Mr. Wattles is trustee of CWS
Communities and Director of Access, Akeler, Bernheim Comofi, InterParking
Incorporated and Security Capital European Realty.
TERRY N. WORRELL
Director since 1999; standing for election to Class I term expiring 2003
Mr. Worrell, age 56, was a member of Pacific Retail Trust's
board of trustees before its merger into Regency in February 1999. He is a
private investor in commercial properties and other business ventures. From 1974
to 1989 he was President and CEO of Sound Warehouse of Dallas, Inc. prior to its
purchase by Blockbuster Music.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act, a Form 4
reporting the acquisition or disposition of Regency equity securities by an
officer, director or 10% shareholder must be filed with the Securities and
Exchange Commission no later than the 10th day after the end of the month in
which the transaction occurred unless certain exceptions apply. Transactions not
reported on Form 4 must be reported on Form 5 within 45 days after the end of
the company's fiscal year. To Regency's knowledge, based solely on a review of
the copies of such reports furnished to it and written representations that no
other reports were required, during its 2000 fiscal year all applicable Section
16(a) filing requirements were complied with by the officers, directors, and
greater than ten-percent beneficial owners.
Board of Directors and Standing Committees
The board held four regular meetings and one special meeting
during 2000. All directors attended at least 75% of all meetings of the board
and board committees on which they served during 2000.
The board of directors has established four standing
committees: an executive committee, an audit committee, a compensation committee
and a nominating committee, which are described below. Members of these
committees are elected annually at the regular board meeting held in conjunction
with the annual shareholders' meeting.
Executive Committee. The executive committee presently is
comprised of Martin E. Stein, Jr. (Chairman) or Mary Lou Fiala if Mr. Stein is
unavailable, one independent non-Security Capital director, and any one
independent director nominee of SC Realty. The executive committee did not meet
during 2000. The executive committee is authorized by the resolutions
establishing the committee to handle ministerial matters requiring board
approval. The executive committee may not perform functions reserved under
Florida law for the full board of directors and, in addition, may not declare
dividends.
Audit Committee. The audit committee presently is comprised of
J. Dix Druce, Jr. (Chairman), Raymond L. Bank, and Douglas S. Luke, all of whom
are considered "independent"
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under the rules of the New York Stock Exchange. The audit committee met six
times during 2000. The principal responsibilities of and functions to be
performed by the audit committee are established in the audit committee charter
which was adopted in May 2000, a copy of which is attached as Appendix A to this
proxy statement. These responsibilities and functions include reviewing
Regency's internal controls and the objectivity of its financial reporting,
making recommendations regarding Regency's employment of independent auditors,
and reviewing the annual audit with the auditors.
Nominating Committee. The nominating committee presently is
comprised of John C. Schweitzer (Chairman), C. Ronald Blankenship, A. R.
Carpenter, John T. Kelley, III and Martin E. Stein, Jr. The nominating
committee, which makes nominations for election of directors, also has
responsibility for accepting nominations from shareholders. The nominating
committee met once during 2000. Regency's bylaws require that any nominations
by shareholders be delivered to Regency no later than the deadline for
submitting shareholder proposals. See "Shareholder Proposals."
Compensation Committee. The compensation committee presently
is comprised of John C. Schweitzer (Chairman), C. Ronald Blankenship, A. R.
Carpenter and John T. Kelley, III. The compensation committee held three
meetings during 2000 to review annual performance and to review and approve
changes to Regency's current executive compensation plans. This committee has
the responsibility of approving the compensation arrangements for senior
management of Regency, including annual bonus and long term compensation. It
also recommends to the board of directors adoption of any compensation plans in
which officers and directors of Regency are eligible to participate, as well as
makes grants of employee stock options and other stock awards under Regency's
Long Term Omnibus Plan.
AUDIT COMMITTEE REPORT
The audit committee of the board is responsible for providing
independent, objective oversight of the company's accounting functions and
internal controls. The audit committee is composed of three directors, each of
whom is independent as defined by the New York Stock Exchange's listing
standards. The audit committee operates under a written charter approved by the
board of directors. A copy of the charter is attached to this proxy statement as
Appendix A.
Management is responsible for the company's internal controls
and financial reporting process. The independent accountants are responsible for
performing an independent audit of the company's consolidated financial
statements in accordance with generally accepted auditing standards and to issue
a report thereon. The audit committee's responsibility is to monitor and oversee
these processes.
In connection with these responsibilities, the audit committee
met with management and the independent accountants to review and discuss the
December 31, 2000 financial statements. The audit committee also discussed with
the independent accountants the matters required by Statement on Auditing
Standards No. 61 (Communication with audit committees). The audit committee also
received written disclosures from the independent accountants required by
Independence Standards Board Standard No. 1 (Independence Discussions with audit
committees), and the audit committee discussed with the independent accountants
that firm's independence.
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Based upon the audit committee's discussions with management
and the independent accountants, and the audit committee's review of the
representations of management and the independent accountants, the audit
committee recommended that the board of directors include the audited
consolidated financial statements in Regency's annual report on Form 10-K for
the year ended December 31, 2000, to be filed with the Securities and Exchange
Commission.
J. Dix Druce, Chairman
Raymond L. Bank
Douglas S. Luke
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report of the compensation committee and the
performance graph included elsewhere in this proxy statement do not constitute
soliciting materials and should not be deemed filed or incorporated by reference
into any other filing made by Regency under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent Regency specifically
incorporates this report or the performance graph by reference therein.
The compensation committee of the board of directors is
responsible for evaluating and establishing executive compensation and other
benefit plans of Regency. The committee is comprised entirely of independent
non-employee directors.
How did Regency perform in 2000?
2000 was a successful year for Regency. The company enhanced its
position as the leading national owner, operator, and developer of grocery
anchored neighborhood retail centers through the continued growth in its
development and operating programs. As Regency continued to grow, the management
team produced solid FFO per share growth and strengthened the balance sheet,
generating a total shareholder return for the year of 28%.
Funds from operations ("FFO") increased to $158.8 million from $141
million in 1999 while per share FFO grew by 7.8% to $2.64. Return on invested
capital increased to 9.9% from 9.4%. These results reflect solid operating
performance from the high quality diversified portfolio of neighborhood retail
centers, a strong development program, and the execution of a conservative
capital strategy, cost effectively funding the development activity while
maintaining the strength of the balance sheet.
For the full year 2000, same-property net operating income grew
approximately 3%. In order to generate this growth, occupancy was maintained at
approximately 95%. Over 1,200 renewals and new leases were signed for
approximately 4.5 million square feet, and rent growth of 8% was achieved.
Through the "Premier Customer Initiative" Regency's relationships were
strengthened with leading side shop tenants like Hallmark, Starbucks, General
Nutrition Centers, and Radio Shack.
In 2000, Regency completed 34 shopping center and build-to-suit
developments at a cost of $236 million. On average, the developments were 96%
leased with an annualized unleveraged return on investment of 10.6%. During the
year $481 million of new developments were started. The grocery-anchored
developments were anchored by leading super market chains including Kroger,
Publix, Safeway, and Albertson's.
During the year, 22 for-sale development properties with total proceeds
exceeding $140 million and a partnership interest in two core development
properties were sold. Combined, these transactions produced approximately $180
million in total proceeds generating $20 million in profits.
Regency reported several significant financing events in 2000. Standard
& Poor's upgraded Regency's debt rating from BBB- to BBB and the preferred stock
rating from BB+ to BBB-. Regency extended the maturity date on its $625 million
unsecured revolving line of credit to March 26, 2002. The company raised $254
million of permanent capital and closed on
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the initial funding of a joint venture with an affiliate of Oregon Public
Employees Retirement Fund. Together with property sales and joint ventures,
Regency's institutional quality balance sheet enabled the company to implement a
conservative self-funding business model.
What is Regency's philosophy of executive compensation?
Regency's executive compensation program is incentive based,
and has been designed to attract, motivate, reward and retain executives who are
results-oriented and capable of achieving the company's key objectives. The
committee recognizes that the interests of the shareholders are best served by
allowing executives the opportunity to participate in the appreciation of the
company through the granting of stock awards and stock options.
The committee evaluates and establishes the company's
executive compensation program based upon current market information including
comparative executive compensation studies provided by Arthur Andersen.
Regency's program is comprised of both annual and long-term incentive
components. Both of these forms of incentive compensation are primarily variable
in nature, and designed to effectuate a pay-for-performance philosophy. This
program considers management's ability to (1) grow funds from operations per
share (FFO is the most widely accepted measure of performance for real estate
investment trusts), (2) increase returns on invested capital, (3) position the
company for future FFO per share growth, and (4) strengthen the company's
capital structure. Regency's philosophy is that the consistent achievement of
these objectives should over time result in total shareholder returns that are
above the average for shopping center REITs.
What are the annual incentive components?
Base Salary. Base salaries are reviewed annually by the
committee. In determining appropriate base salaries, the committee considers
external competitiveness in relation to Regency's current financial condition
and capital resources, the roles and responsibilities of the executive, their
contribution to the company's business, an analysis of job requirements and the
executive's prior experience and accomplishments.
Annual Performance Bonus. To provide additional incentive to
achieve outstanding performance, the committee makes cash bonus awards based on
corporate and individual performance. The compensation plan for 2000 established
target cash bonuses based on achievement of quantitative and qualitative
financial and operational goals for the company and, where appropriate, those
activities of the company managed by the executive. The committee also has the
discretion to increase the annual bonus in any given year to take into account
what it deems to be extraordinary performance.
What are the long-term incentive components?
The committee strongly believes that providing executives with
an opportunity to increase their ownership of common stock aligns their
interests with and best serves the stockholders.
Stock Options and Dividend Equivalents. In 2000, the company
granted stock options to the executive officers as part of their performance
review. Options are granted at fair market value on the date of grant, vest 25%
per year, and expire after 10 years. Options also
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receive dividend equivalents for the first five years equal to the company's
dividend yield less the average dividend yield of the S&P 500. Dividend
equivalents are funded in Regency common stock, and vest at the same rate as the
options upon which they are based.
Restricted Stock Plan. Regency grants restricted stock to the
executive officers based upon their contribution to the Company's performance.
Shares granted for 2000 performance were issued at fair market value on the date
of grant, and vest over four years. A portion of the grant vests based on
continued service, and the remainder of the grant's vesting is contingent
primarily upon achieving FFO per share growth targets and other performance
criteria determined by the compensation committee.
Stock Purchase Plan. In previous years, the committee
structured a stock purchase plan whereby executives could acquire common stock
at fair market value by investing their own capital in combination with loans
provided by Regency. These full recourse loans are secured by stock, which is
held as collateral by Regency. As part of the loan program, executives are
granted annual loan repayments over a vesting period. A portion of the grant
vests based on continued service, and the remainder of the grant's vesting is
contingent primarily upon achieving specific FFO per share growth targets and
other performance criteria determined by the compensation committee.
How is the CEO compensated?
The committee's policies for determining Mr. Stein's
compensation are the same as the other executives. For 2001, Mr. Stein's base
compensation was increased to $425,000. As a result of 2000 performance, Mr.
Stein received an incentive bonus of $500,000 and stock loan amortization of
$132,950 related to a 1993 and 1996 stock purchase plan. Mr. Stein was also
granted the right to earn $720,000 through a combination of restricted stock
grants and stock loan repayments over the next four years. The actual amount of
the grant to be earned by Mr. Stein is subject to continued service and other
performance criteria determined by the compensation committee. Mr. Stein was
also granted options to purchase 78,261 shares of common stock at an exercise
price of $23 per share, the fair market value on the date of grant. Mr. Stein
continues to serve under a rolling three-year employment agreement.
How is the Company addressing Internal Revenue Code limits on deductibility of
compensation?
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public corporations for compensation over $1,000,000 paid for any
fiscal year to the corporation's chief executive officer and four other most
highly compensated executive officers as of the end of any fiscal year. However,
the statute exempts qualifying performance-based compensation from the deduction
limit if certain requirements are met. The compensation committee intends to
structure performance-based compensation, including stock option grants and
annual bonuses, to executive officers who may be subject to Section 162(m) in a
manner that satisfies those requirements.
The compensation committee reserves the authority to award
non-deductible compensation in circumstances as it deems appropriate. Further,
because of ambiguities and uncertainties as to the application and
interpretation of Section 162(m) and the regulations issued thereunder, no
assurance can be given, notwithstanding the company's efforts, that
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compensation intended by the company to satisfy the requirements for
deductibility under Section 162(m) does in fact do so.
John C. Schweitzer, Chairman
C. Ronald Blankenship
A. R. Carpenter
John T. Kelley, III
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COMPARATIVE STOCK PERFORMANCE
The graph below provides an indicator of cumulative total
shareholder returns for Regency as compared with the S&P Stock Index and the
NAREIT Equity Index, weighted by market value at each measurement point. The
graph assumes that $100 was invested on January 1, 1996 in Regency common shares
and that all dividends were reinvested by the shareholder.
[Object Omitted]
1995 1996 1997 1998 1999 2000
REGENCY CENTERS CORP. 100.00 168.48 189.27 163.30 160.01 207.07
NAREIT EQUITY INDEX 100.00 135.27 162.67 134.20 128.00 161.75
S&P 500 INDEX 100.00 122.96 163.98 210.84 255.22 231.98
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EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or
accrued by Regency for services rendered during fiscal 2000, 1999 and 1998 to
Regency's Chief Executive Officer and Regency's two other executive officers
during the year ended December 31, 2000.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
------------------- ----------------------------
Restricted Securities
Name & Principal Stock Underlying SPP Loan All Other
Position Year Salary(1) Bonus Awards(2) Options/SARs(3) Awards(4) Compensation(5)
-------- ---- --------- ----- --------- --------------- --------- ---------------
Martin E. Stein, Jr. 2000 $400,000 $500,000 $360,000 78,261 $ 132,950 $ 9,139
Chairman and Chief 1999 $400,000 $520,000 $ 0 125,000 $ 85,213 $ 9,941
Executive Officer 1998 $275,000 $350,000 $ 0 123,596 $ 135,775 $ 14,813
Mary Lou Fiala 2000 $325,000 $345,313 $511,875 55,639 $ 0 $ 9,139
President and Chief 1999 $325,000 $360,000 $ 0 75,000 $ 0 $ 10,021
Operating Officer 1998 $ 0 $ 0 $500,000 87,640 $ 0 $ 0
Bruce M. Johnson 2000 $250,000 $187,500 $135,000 29,348 $ 65,910 $ 9,139
Managing Director and 1999 $225,000 $175,000 $100,000 30,000 $ 37,268 $ 11,707
Chief Financial Officer 1998 $190,000 $150,000 $100,000 29,213 $ 60,675 $ 15,870
- -------------------------
(1) Includes amounts deferred under the 401(k) feature of Regency's profit
sharing plan.
(2) Consists of the fair market value of restricted stock awards in each of
the years of grant. Awards granted for 2000 vest over a four-year period
subject primarily to FFO per share growth targets being met during the
vesting period. 1999 and 1998 awards vest as follows: year 1 - 10%, year
2 - 20%, year 3 - 30%, year 4 - 40%. Under the 1999 and 1998 grants, the
executive is entitled to dividends and voting rights on unvested shares.
Shares representing the full amount of the awards listed above, held by
the named executives are as follows: Mr. Stein, 15,652 shares; Ms.
Fiala, 44,727 shares; and Mr. Johnson, 15,411 shares.
(3) The exercise prices of stock option grants are equal to fair market
value of Regency's common stock on date of grant.
(4) Represents amounts earned by the named executive officers in the form of
loan forgiveness in accordance with the terms of the stock purchase plan
that is part of Regency's 1993 Long Term Omnibus Plan, primarily based
upon FFO per share growth greater than 7%, annual shareholder return of
15% or more and cumulative shareholder return of 20% or more since
January 1, 1996.
(5) The amounts shown in this column for 2000 include the following:
Life Insurance Company Contribution to Other
Premiums 401(k)/Profit Sharing Plan Compensation
-------------- -------------------------- ------------
Mr. Stein $2,139 $6,000 $1,000
Ms. Fiala $2,139 $6,000 $1,000
Mr. Johnson $2,139 $6,000 $1,000
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Stock Purchase Plan. The following table sets forth as of
March 1, 2001, the amounts outstanding under the SPP loan program due from each
of Regency's executive officers who have outstanding loans.
Largest Balance
During Fiscal Year
SPP Loan Balance Ended
Executive Officer March 1, 2001 Interest Rate December 31, 2000
- ----------------- ------------- ------------- -----------------
Martin E. Stein, Jr. $893,676 6% - 7.3% $1,307,728
Bruce M. Johnson $741,117 6% - 7.3% $ 846,064
Stock Options. The following table sets forth information
concerning the value of unexercised options as of December 31, 2000 held by the
executive officers named in the summary compensation table above.
AGGREGATED OPTION EXERCISES DURING FISCAL 2000
AND OPTION YEAR-END VALUES TABLE
Number of Value of Unexercised
Shares Number of Unexercised In-the-Money
Acquired Value Options at Options at
Upon Realized December 31, 2000 December 31, 2000
Exercise Upon Exercisable/ Exercisable/
Name Options Exercise Unexercisable Unexercisable
---- ------- -------- ------------- -------------
Martin E. Stein, Jr. 0 $0 339,530 (E) / $343,462 (E) /
279,097 (U) $447,985 (U)
Mary Lou Fiala 0 $0 68,491 (E) / $125,674 (E) /
155,710 (U) $284,978 (U)
Bruce M. Johnson 0 $0 133,504 (E) / $97,866 (E) /
96,250 (U) $114,667 (U)
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The following table sets forth information with respect to option grants to the
executive officers named in the Summary Compensation Table above during 2000 and
the potential realizable value of such option grants.
OPTION GRANTS DURING FISCAL 2000
% of Total Options Hypothetical
Number of Options Granted Exercise Price Expiration Value at
Executive Officer Granted(1) during 2000 ($/share) Date Grant Date(2)
----------------- ------- ----------- --------- ---- -------------
Martin E. Stein, Jr. 78,261 48% $23 12/13/10 $170,609
Mary Lou Fiala 55,639 34% $23 12/13/10 $121,293
Bruce M. Johnson 29,348 18% $23 12/13/10 $63,979
- ---------------------
(1) Stock options granted in 2000 vest 25% per year over 4 years. These
options, if exercised, may be reloaded, but expire after 10 years. These
options also earn dividend equivalents units (DEU) that vest at the same
rate as the underlying option. During years 1-5, DEU's are credited to
the participant's account annually based upon the current dividend rate
of Regency common stock less the average dividend rate of the S&P 500.
(2) The estimated present value at grant date of each option granted during
2000 has been calculated to be $2.18 using the Black-Scholes option
pricing model. The valuation is based upon the following assumptions:
o estimated time until exercise of 6.0 years
o a risk-free interest rate of 6.7%; a volatility rate of 20%
o a dividend yield of 8.1%.
The approach used in developing the assumptions upon which the
Black-Scholes valuation was calculated is consistent with the
requirements of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation." The actual value of the
options may be significantly different, and the value actually realized,
if any, will depend upon the excess of the market value of the common
stock over the option exercise price at the time of exercise.
Change of Control Agreements. Regency has entered into change
of control agreements with each of the executive officers named in the Summary
Compensation Table providing for the executive officer to receive base salary
and benefits for 24 months in the event of a change of control and termination.
These agreements were effective June 1, 2000 and have an initial term of five
years, automatically renewing for successive additional five year terms unless
either party gives written notice of non-renewal.
Compensation of Directors. In 2000, Regency paid an annual fee
of $28,000 to each of its non-employee directors, plus $500 for each board
committee meeting attended. Directors' fees are currently paid in shares of
common stock, unless the director elects to receive the fees in cash.
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Non-employee directors also receive non-qualified options to
purchase 5,000 shares of common stock each year. These options are granted
immediately after each annual meeting and also entitle the director to receive
dividend equivalent units on the same basis as employee optionees. The options
have a term of ten years, and have an exercise price equal to the greater of the
fair market value of the common stock on the date of grant or the average
trading price of the common stock for the 20 business days preceding the date of
grant. The annual options vest 25% on each of the first four anniversary dates
of the grant, and will become fully vested upon the involuntary termination,
death or disability of the director.
CERTAIN TRANSACTIONS
The audit committee of the board of directors is responsible
for evaluating the appropriateness of all related-party transactions.
Cost Sharing Arrangement with Management Company. Regency
manages, leases and develops properties under employee and cost sharing
arrangements with Regency Realty Group, Inc., its management company. Martin E.
Stein, Jr., owns 93% of the voting common stock of the management company, and
Regency, through its investment in Regency Centers, L.P., owns 100% of the
management company's non-voting preferred stock and 7% of its voting common
stock. The cost sharing arrangements are based on allocations of management time
and general overhead made on an arm's-length basis and comply with applicable
regulations of the Internal Revenue Service. All such cost sharing arrangements
must be reviewed annually by the audit committee of the board of directors, and
any changes in such arrangements must be approved by a majority of Regency's
independent directors. Under generally accepted accounting principles, all items
of income and expense of the management company are consolidated with Regency
and included in Regency's financial statements, net of inter-company
transactions.
Transactions with SC Realty. Regency has entered into an
agreement with Macquarie Capital Partners LLC whereby Macquarie Capital Partners
LLC will act as Regency's financial advisor in connection with identifying
alternative sources of capital including arranging and structuring a joint
venture or fund that owns grocery-anchored shopping centers. Fees paid to
Macquarie Capital Partners LLC will be based upon a percentage (a range of 2% -
3%) of capital raised. Based upon commitments entered into during 2000, Regency
will pay approximately $1.5 million for these services.
Regency has an administrative services agreement with Security
Capital Group Incorporated to provide risk management, property tax, and income
tax consulting services. During 2000, the Company paid Security Capital Group
Incorporated approximately $460,000 for these services.
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PROPOSAL 2: APPROVAL OF CONTINUATION OF
SECURITY CAPITAL PARTICIPATION RIGHTS
The members of the Regency board of directors, other than
Security Capital's representatives, who abstained, have unanimously approved,
and recommend that Regency shareholders vote "FOR," the proposal to continue the
participation rights granted to Security Capital for an additional five years.
As required by the New York Stock Exchange, the affirmative vote of a majority
of the voting stock voted with respect to the matter is required to approve this
proposal, provided that the number of total votes cast represents over 50% of
the shares of common stock outstanding on the record date. Broker non-votes and
abstentions will have no effect on the vote, assuming the number of votes cast
represents over 50% of all outstanding shares of common stock.
Background
In connection with the 1996 investment in Regency by Security
Capital U.S. Realty ("US Realty"), Regency and US Realty entered into a
Stockholders Agreement which granted participation rights to US Realty so long
as US Realty's common stock ownership does not drop below 15% on a fully diluted
basis for more than 180 days. Our shareholders approved the US Realty
transaction in 1996. The New York Stock Exchange requires that our shareholders
approve these participation rights every 5 years.
On January 16, 2001, in connection with the acquisition of the
assets of US Realty, a Luxembourg corporation, by its U.S. affiliate, Security
Capital Group Incorporated ("Security Capital"), a Security Capital subsidiary
succeeded to US Realty's rights under the Stockholders Agreement. As of March
13, 2001, Security Capital owns ___% of our common stock on a fully diluted
basis.
Participation Rights
The Stockholders Agreement provides that if Regency issues
shares of capital stock, Security Capital is entitled to purchase shares in an
amount sufficient to maintain its percentage of common stock ownership before
the transaction, but not more than 49% of the capital stock issued in that
transaction. Security Capital also has participation rights if (1) Regency
issues options, securities convertible into capital stock or other rights to
acquire capital stock or (2) if Regency Centers, L.P., the subsidiary through
which Regency owns and operates its properties, issues partnership interests. If
Security Capital elects to participate in the issuance of a convertible
security, it has no right to participate in the issuance of stock when that
security is converted. If Regency Centers, L.P. issues partnership interests,
Security Capital may instead elect to purchase an equal number of shares of
Regency stock at that time.
Security Capital may participate in the issuance of capital
stock by Regency pursuant to benefit, option, stock purchase or similar plans,
including upon the exercise of options or warrants, but its purchase price will
be the market price on the date of issuance and not the price paid by the plan
participant. All other purchases pursuant to participation rights will be at the
same price and on the same terms as are applicable to other purchasers.
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Since its participation rights became effective, out of a
maximum of ________ shares that Security Capital was entitled to purchase,
Security Capital has exercised its participation rights to acquire ________
shares of common stock at a total price of $________.
Consequences of Failure to Ratify Participation Rights
If shareholders do not ratify Security Capital's participation
rights, Regency will be prohibited by New York Stock Exchange policy from
complying with the terms of the Stockholders Agreement relating to the
participation rights to the extent Security Capital elects to purchase more than
5% of the common stock outstanding without further shareholder approval. If
Regency breaches its obligations under the participation rights, Security
Capital's standstill obligation will terminate. Under the Stockholders Agreement
until January 10, 2003, Security Capital may not:
* sell, pledge, transfer or otherwise dispose of any shares
of common stock except in sales in limited amounts,
privately negotiated sales, and sales under its
registration rights agreement, and transfers to a bona
fide financial institution for the purpose of securing
bona fide indebtedness;
* make any transfers in a negotiated transaction which
would result in any transferee beneficially owning more
than 9.8% of Regency's capital stock unless Regency
approves the transfer, in its sole and absolute
discretion;
* act in concert with any other person by becoming a member
of any group acquiring, holding, voting, or disposing of
voting securities under Section 13(d) of the Exchange Act
(other than a group comprised exclusively of Security
Capital and its affiliates);
* solicit or propose a merger, liquidation, sale of all or
substantially all of Regency's assets or other change of
control of Regency;
* participate in any solicitation of proxies or in any
election contest;
* call for any special meeting of shareholders or solicit
shareholders for the approval of any shareholder
proposal;
* seek board representation or a change in the composition
or size of the board, except for its board representa-
tives permitted by the Stockholders Agreement;
* request an amendment or waiver of the foregoing
limitations or of the ownership limitations in Regency's
articles of incorporation; or
* assist or encourage any person with respect to any of the
foregoing.
In addition, as long as these "standstill provisions" are in
effect, Security Capital:
i must vote its shares of common stock generally either in
accordance with the recommendation of Regency's board of
directors or in proportion to the votes of other share-
holders; and
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* may not elect directors representing more than 49% of
Regency's board of directors, even if Security Capital
owns more than 49% of the common stock.
The board of directors believes that it is in the best
interest of Regency's shareholders to approve Security Capital's participation
rights and to keep the standstill obligations of Security Capital described
above in effect.
PROPOSAL 3: AMENDMENT OF REGENCY'S CHARTER TO DELETE
FOREIGN OWNERSHIP RESTRICTIONS
The members of the Regency board of directors have unanimously
approved, and recommend that Regency shareholders vote "FOR," the proposal to
amend Regency's articles of incorporation to delete the foreign ownership
limitations. The affirmative vote of a majority of the voting stock voted with
respect to the matter is required to approve this proposal, assuming the
presence of a quorum. Broker non-votes and abstentions will have no effect on
the vote, assuming the presence of a quorum.
In connection with US Realty's investment in Regency in 1996,
at the request of US Realty, Regency amended its charter to prevent a non-U.S.
holder from acquiring common stock if it would cause Regency to fail to qualify
as a domestically-controlled REIT. As a foreign corporation, US Realty could
derive potential tax benefits if Regency was a domestically-controlled REIT.
Although Regency no longer qualified as a domestically-controlled REIT after the
Pacific Retail Trust merger in 1999, these restrictions remained in place to
help Regency requalify as a domestically-controlled REIT in the future.
In connection with the acquisition of US Realty by Security
Capital, Security Capital agreed to delete these foreign ownership restrictions
contained in Section 5.14 of Regency's articles of incorporation. Since Security
Capital is not a foreign corporation, it derives no benefit from Regency
regaining its status as a domestically-controlled REIT. To our knowledge, the
restrictions in Section 5.14 are not expected to benefit any other current
shareholders of Regency.
Section 5.14 of the articles invalidates any issuance or
transfer of shares that would:
* result in 4.9% or more of the fair market value of
Regency's capital stock being held by non-U.S. persons,
excluding Security Capital, or
* result in 50% or more of such fair market value being
held by non-U.S. persons, including Security Capital.
Security Capital has the right to waive any of these restrictions.
Section 5.14 also contains prohibitions on transfers of shares
which are intended to:
* preserve Regency's ability to requalify as a domestically
controlled REIT if ownership by non-U.S. persons drops
below 50% by value of Regency's outstanding capital
stock, and
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* ensure that once Regency returns to the status of a
domestically controlled REIT, it will remain one unless
such restrictions are waived by Security Capital.
If Section 5.14 is deleted, shareholders will no longer be
restricted from transferring their shares to foreign persons because of these
limitations. In addition, without these restrictions, Regency will have the
flexibility to raise capital from non-U.S. persons.
A copy of the current text of Section 5.14, as well as a copy
of the articles of amendment deleting this provision and the definition of
"non-U.S. person" in their entirety, is attached as Appendix B.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The board of directors has selected the firm of KPMG LLP to
serve as the independent certified public accountants for Regency for the
current fiscal year ending December 31, 2001. That firm has served as the
auditors for Regency since 1993. Representatives of KPMG LLP are expected to be
present at the annual meeting of shareholders and will be accorded the
opportunity to make a statement, if they so desire, and to respond to
appropriate questions.
The following table provides information relating to the fees
billed to Regency by KPMG LLP for the year ended December 31, 2000.
Audit Fees1 $350,000
Financial Information Systems
Design and Implementation Fees $ 0
All Other Fees2 $185,345
- -------------------------
1 Audit fees include all fees and out-of-pocket expenses for services in
connection with the annual audits and review of quarterly financial
statements for Regency and its operating partnership, Regency Centers,
L.P.
2 All other fees include $81,495 for tax compliance and consulting
services, $78,900 for due diligence, consents and comfort letters in
connection with debt offerings, $19,950 for the audit of Regency's
employee benefit plan and $5,000 for the audit of Regency's affiliated
investment advisor. The audit committee discussed these services with
KPMG LLP and determined that their provision would not impair KPMG LLP's
independence.
OTHER MATTERS
The board of directors does not know of any other matters to
come before the meeting. However, if any other matters properly come before the
meeting, it is the intention of the persons designated as proxy to vote in
accordance with their best judgment on such matters. If any other matter should
come before the meeting, action on such matter will be approved if the number of
votes cast in favor of the matter exceeds the number opposed.
SHAREHOLDER PROPOSALS
Regulations of the Securities and Exchange Commission require
proxy statements to disclose the date by which shareholder proposals must be
received by the company in order to be included in the company's proxy materials
for the next annual meeting. In accordance with these regulations, shareholders
are hereby notified that if, pursuant to Rule 14a-8, they wish a
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proposal to be included in Regency's proxy statement and form of proxy relating
to the 2002 annual meeting, a written copy of their proposal must be received at
Regency's principal executive offices no later than November 25, 2001. Proposals
must comply with the proxy rules relating to shareholder proposals in order to
be included in Regency's proxy materials. Notice to Regency of a shareholder
proposal submitted otherwise than pursuant to Rule 14a-8 will be considered
untimely if received by Regency after November 25, 2001, and the persons named
in proxies solicited by Regency's board for its annual meeting of shareholders
to be held in 2002 may exercise discretionary voting power with respect to any
such proposal as to which Regency does not receive timely notice. To ensure
prompt receipt by Regency, proposals should be sent certified mail return
receipt requested.
ANNUAL REPORT
A copy of Regency's annual report for the year ended December
31, 2000 accompanies this proxy statement. Additional copies may be obtained by
writing to Lesley Stocker, at Regency's principal executive offices, at 121 West
Forsyth Street, Suite 200, Jacksonville, Florida 32202.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by Regency.
[Regency also has engaged _________ to solicit shareholder proxies on its
behalf. The solicitation fee of $______ will be paid by Regency.] In addition,
Regency may reimburse brokers and other persons holding stock in their names, or
in the names of nominees, for their expenses for sending proxy material to
principals and obtaining their proxies.
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, POSTAGE FOR WHICH HAS
BEEN PROVIDED. YOUR PROMPT RESPONSE WILL BE APPRECIATED. IF SUBMITTING YOUR
PROXY VIA THE INTERNET PLEASE CAREFULLY FOLLOW THE INSTRUCTIONS ON YOUR PROXY
CARD.
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APPENDIX A
REGENCY CENTERS CORPORATION
Audit Committee Charter
The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the integrity of the financial statements of the company, (2) the compliance
by the company with legal and regulatory requirements and (3) the independence
and performance of the company's internal and external auditors.
The members of the Audit Committee shall be appointed by the Board and shall
possess the independence and other qualifications required by the New York Stock
Exchange.
The Audit Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee. It may also request any officer or
employee of the company, or the company's outside counsel or independent
auditor, to attend a meeting of the Committee or to meet with any members of, or
consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
In discharge of its responsibilities, the Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
2. Review the annual audited financial statements and major issues with
management, including those issues regarding accounting and auditing
principles and practices as well as the adequacy of internal controls
that could significantly affect the company's financial statements.
Such review will be completed prior to the filing of the company's
Annual Report on Form 10-K.
3. Discuss with management and the external auditor significant financial
reporting issues and judgements made in connection with the preparation
of the company's financial statements.
4. Review, by its chairman or by the Committee, with management and the
external auditor, the company's quarterly financial statements prior to
filing the company's quarterly report on Form 10-Q.
5. Meet periodically with management to review the company's major
financial risk exposures and the steps management has taken to monitor
and control such exposures.
6. Review major changes to the company's auditing and accounting
principles and practices as suggested by the external auditor, internal
auditor or management.
7. Recommend to the Board the appointment of the external auditor, which
firm is ultimately accountable to the Audit Committee and the Board.
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8. Approve the fees to be paid to the external auditor.
9. Receive periodic reports from the external auditor regarding the
auditor's independence, discuss such reports with the external auditor,
and, if so determined by the Audit Committee, recommend that the Board
take appropriate action to satisfy itself of the independence of the
auditor.
10. Evaluate together with the Board the performance of the external
auditor and, if so determined by the Audit Committee, recommend that
the Board replace the external auditor.
11. Review the appointment or replacement of all senior internal auditing
executives or contracted internal audit firms.
12. Review the significant reports to management prepared by the internal
audit department or internal audit firm and management's responses.
13. Meet with the external auditor prior to the annual audit to review the
planning and staffing of the audit.
14. Obtain from the external auditor assurance that it will inform the
company's management concerning any information indicating that an
illegal act has or may have occurred, and assure that such information
has been conveyed to the Audit Committee.
15. Discuss with management, the internal auditor and the external auditor
any condition which comes to their attention indicating that the
company's subsidiaries and affiliated entities, domestic and foreign,
are not conforming to applicable legal requirements or the company's
Code of Conduct.
16. Discuss with the external auditor the matters required to be discussed
by Statement on Auditing Standards No. 61, as such may be amended or
superseded, related to the conduct of the annual audit.
17. Review with the external auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the
auditor and the company's response to the letter. Such review should
include:
a. Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access
to required information.
b. Any changes required in the planned scope of the internal audit.
c. The internal auditor's support, if applicable, of the annual
independent audit.
18. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the company's annual proxy statement.
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19. Advise the Board with respect to the company's policies and procedures
regarding compliance with applicable laws and regulations and with the
company's Code of Conduct.
20. Review with the company's General Counsel legal matters that may have a
material impact on the financial statements, the company's compliance
policies, and any material reports or inquiries received from
regulators or governmental agencies.
21. Meet at least annually with the company's financial management, and the
external auditor in separate executive sessions.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the external auditor. Nor will it be the duty
of the Audit Committee to conduct investigations or resolve disagreements, if
any, between management and the external auditor or to assure compliance with
laws and regulations and the company's Code of Conduct.
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APPENDIX B
Proposed Charter Amendment
REGENCY CENTERS CORPORATION
AMENDMENT TO ARTICLES OF INCORPORATION
This corporation was incorporated on July 8, 1993 effective July 9,
1993 under the name Regency Realty Corporation. Pursuant to Sections 607.1003,
607.1004 and 607.1006, Florida Business Corporation Act, the following
amendments to the Articles of Incorporation, as restated on November 4, 1996,
were approved by the Board of Directors at a meeting held on January 30, 2001
and adopted at a meeting of shareholders on May 1, 2001. The only voting group
entitled to vote on the adoption of the amendment consists of the holders of the
corporation's common stock and Series 2 Preferred Stock, voting together as a
single class. The number of votes cast by such voting group was sufficient for
approval by that voting group. The Restated Articles of Incorporation of the
corporation are hereby amended as follows:
Section 5.1(i) "Non-U.S. Person" is hereby deleted.
Section 5.14 Certain Transfers to Non-U.S. Persons Void is
hereby deleted in its entirety.
IN WITNESS WHEREOF, the undersigned Senior Vice President of this
corporation has executed these Articles of Amendment this day of May, 2001.
-----------------------------------------
J. Christian Leavitt, Senior Vice
President
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REGENCY CENTERS CORPORATION
Current Text of Section 5.14 of Articles of Incorporation
Section 5.14 Certain Transfers to Non-U.S. Persons Void.
-------------------------------------------
(a) At any time that Non-U.S. Persons (including Special Shareholders
who will at all times be presumed to be Non-U.S. Persons) own directly or
indirectly 50% or more of the fair market value of the issued and outstanding
shares of Capital Stock of the Corporation, any Transfer of shares of Capital
Stock of the Corporation by any Person (other than a Special Shareholder) on or
after the effective date of this Amendment that results in such shares being
owned directly or indirectly by a Non-U.S. Person (other than a Special
Shareholder) shall be void ab initio to the fullest extent permitted under
applicable law and the intended transferee shall be deemed never to have had an
interest therein.
(b) At any time that Non-U.S. Persons (including Special Shareholders
who will at all times be presumed to be Non-U.S. Persons) own directly or
indirectly less than 50% of the fair market value of the issued and outstanding
shares of Capital Stock of the Corporation, any Transfer of shares of Capital
Stock of the Corporation by any Person (other than a Special Shareholder) to
any Person on or after the effective date of this Amendment shall be void ab
initio to the fullest extent permitted under applicable law and the intended
transferee shall be deemed never to have had an interest therein if such
Transfer
(i) occurs prior to the 10% Termination Date and results in the
fair market value of the shares of Capital Stock of the
Corporation owned directly or indirectly by Non-U.S. Persons
(other than Special Shareholders) comprising 4.9 percent
(4.9%) or more of the fair market value of the issued and
outstanding shares of Capital Stock of the Corporation; or
(ii) results in the fair market value of the shares of Capital
Stock of the Corporation owned directly or indirectly by
Non-U.S. Persons (including Special Shareholders who will at
all times be presumed to be Non-U.S. Persons) comprising fifty
percent (50%) or more of the fair market value of the issued
and outstanding shares of Capital Stock the Corporation.
(c) If any of the foregoing provisions is determined to be void or
invalid by virtue of any legal decision, statute, rule or regulation, then the
shares of Capital Stock of the Corporation held or purported to be held by the
transferee shall, automatically and without the necessity of any action by the
Board of Directors or otherwise:
(i) be prohibited from being voted;
(ii) not be entitled to dividends with respect thereto;
(iii) be considered held in trust by the transferred for the benefit
of the Corporation and shall be subject to the provisions of
Section 5.3(c) as if such shares of Capital Stock were the
subject of a Transfer that violates Section 5.2; and
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(iv) not be considered outstanding for the purpose of determining a
quorum at any meeting of shareholders.
(d) The special Shareholders may, in their sole discretion, with prior
notice to the Board of Directors, waive, alter or revise in writing all or any
portion of the Transfer restrictions set forth in this Section 5.14 from and
after the date on which such notice is given, on such terms and conditions as
they in their sole discretion determine.
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REGENCY CENTERS CORPORATION
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 1, 2001
The undersigned, having received the Notice of Annual Meeting
of Shareholders and Proxy Statement, appoints Martin E. Stein, Jr., Mary Lou
Fiala and Bruce M. Johnson, and each or any of them, as proxies, with full power
of substitution and resubstitution, to represent the undersigned and to vote all
shares of common stock of Regency Centers Corporation which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be held
on May 1, 2001, and any and all adjournments thereof, in the manner specified.
1. Election of Directors nominated by the Board of Directors
to serve in the following Classes:
Class I: (01) C. Ronald Blankenship
Class II: (02) Martin E. Stein, Jr.
(03) Raymond L. Bank
(04) A. R. Carpenter and
(05) J. Dix Druce, Jr.
Class III: (06) Thomas G. Wattles
[_] FOR all nominees listed [_] WITHHOLD AUTHORITY INSTRUCTION: To withhold authority to vote
(except as marked to to vote for all for any individual nominee, write that
the contrary to the nominees. nominee's name in the space provided below.)
right).
--------------------------------------------
2. Approval to continue the participation rights granted to
Security Capital to purchase additional shares of capital stock issued by
Regency.
[_] FOR [_] AGAINST [_] ABSTAIN
3. Approval and adoption of the Amendment to the Company's
charter to eliminate restrictions on foreign ownership of Regency's capital
stock.
[_] FOR [_] AGAINST [_] ABSTAIN
(Continued and to be SIGNED and dated on the reverse side.)
(Continued from reverse side)
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" ELECTION OF EACH NOMINEE.
Should any other matters requiring a vote of the shareholders
arise, the above named proxies are authorized to vote the same in accordance
with their best judgment in the interest of the Company. The Board of Directors
is not aware of any matter which is to be presented for action at the meeting
other than the matters set forth herein.
Dated:________________, 2001
________________________________(SEAL)
________________________________(SEAL)
(Please sign exactly as name or names appear hereon. Executors, administrators,
trustees or other representatives should so indicate when signing.)