SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
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[ ] Preliminary Proxy Statement
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14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
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fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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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 3, 2005
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 3, 2005, at 11:00 A.M.,
eastern time, in The River Room, Salon One of the River Club, 35th Floor of the
Modis Building, One Independent Drive, Jacksonville, Florida.
The meeting will be held for the following purposes:
1. To elect a board of directors to serve until the 2006
annual meeting of shareholders and until their
successors have been elected and qualified.
2. To transact such other business as may properly come
before the meeting or any adjournment.
The shareholders of record at the close of business on March
18, 2005 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 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 31, 2005
TABLE OF CONTENTS
Page
DELIVERY OF PROXY MATERIALS...................................................1
Electronic Delivery..................................................1
VOTING ELECTRONICALLY OR BY TELEPHONE.........................................2
VOTING SECURITIES.............................................................2
Stock Ownership Policy for Officers and Directors....................4
ELECTION OF DIRECTORS.........................................................6
Section 16(a) Beneficial Ownership Reporting Compliance..............9
Board of Directors and Standing Committees..........................10
AUDIT COMMITTEE REPORT.......................................................12
Compensation Committee Report on Executive Compensation......................14
What is Regency's philosophy of executive compensation?.............14
What are the annual cash compensation components?...................14
What is Regency's philosophy for long-term incentive compensation?..15
How did Regency perform in 2004?....................................16
How is the CEO compensated?.........................................16
How is the company addressing Internal Revenue Code limits?.........16
COMPARATIVE STOCK PERFORMANCE................................................17
EXECUTIVE COMPENSATION.......................................................18
CERTAIN TRANSACTIONS.........................................................22
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS....................................22
OTHER MATTERS................................................................23
SHAREHOLDER PROPOSALS AND COMMUNICATIONS WITH THE BOARD OF DIRECTORS.........23
ANNUAL REPORT................................................................24
EXPENSES OF SOLICITATION.....................................................24
APPENDIX A - Audit Committee Charter .......................................A-1
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 3, 2005
This proxy statement and the enclosed form of proxy are first
being sent to shareholders of Regency Centers Corporation on or about March 31,
2005 in connection with the solicitation by Regency's board of directors of
proxies to be used at Regency's 2005 annual meeting of shareholders. The meeting
will be held on Tuesday, May 3, 2005, at 11:00 A.M., eastern time, in The River
Room, Salon One of the River Club, 35th Floor of the Modis Building, 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. Proxies will be tabulated by Regency's transfer agent, Wachovia Bank,
N.A.
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).
DELIVERY OF PROXY MATERIALS
Electronic Delivery
You may choose to receive stockholder materials, including
proxy statements and annual reports, via electronic delivery in the future,
which can help us achieve a substantial reduction in our printing and mailing
costs as well be environmentally friendly. If you choose to receive your proxy
materials electronically, then before next year's annual meeting, you will
receive an e-mail notification when the proxy materials and annual report are
available over the Internet. Your election to receive electronic delivery of
these materials will remain in effect for all future stockholder meetings unless
you revoke it before the meeting by following the instructions set forth at the
applicable website below. If you elect to access our stockholder materials
electronically, you may still request paper copies by contacting our Investor
Relations Department at the address set forth above.
If your shares are registered in your own name (instead of
through a broker or other nominee), sign up for electronic delivery of proxy
materials in the future at:
https://www.giveconsent.com/reg
-------------------------------
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If you hold your shares in an account at a brokerage firm or
bank participating in a "street name" program, you can sign up for electronic
delivery of proxy materials in the future by contacting your broker.
VOTING ELECTRONICALLY OR BY TELEPHONE
If your shares are registered in your own name (instead of
through a broker or other nominee), you can vote your shares on the Internet by
following the instructions at the Internet voting website at
https://www.proxyvotenow.com/reg. Please carefully follow the directions on your
proxy card. If you vote via the Internet you may be required to bear costs
associated with electronic access, such as usage charges from Internet access
providers and telephone companies.
To vote by telephone, you should dial (toll-free)
1-888-216-1308; you will then be prompted to enter the control number printed on
your proxy card and to follow subsequent instructions.
The giving of a proxy via the Internet or by telephone will
not affect your right to vote in person should you decide to attend the annual
meeting or to change your vote electronically or by telephone.
Regency reserves the right to cancel the electronic voting or
telephone voting program at any time.
If your shares are held in an account at a brokerage firm or
bank participating in a "street name" program, you may already have been offered
the opportunity to vote using the Internet. A number of brokerage firms and
banks participate in a program that offers Internet voting options for shares
held in "street name."
VOTING SECURITIES
The record of shareholders entitled to vote was taken at the
close of business on March 18, 2005. At such date, Regency had outstanding and
entitled to vote 63,073,286 shares of common stock, $.01 par value. Each share
of common stock entitles the holder to one vote. Holders of a majority of the
outstanding common 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 18, 2005 of
o each person known to Regency to be the beneficial owner of more than 5%
of Regency's voting stock,
o each director and nominee,
o each of the executive officers named in the summary compensation table
elsewhere in this proxy statement, and
o all directors and executive officers as a group.
Except as otherwise indicated, the shareholders listed
exercise sole voting and dispositive power over the shares.
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Amount and Nature of Shares Beneficially Owned(1)
Number of
Title of Shares Right to Percent of
Name Class Owned(2) Acquire(3) Class
---- ----- ----- ------- -----
Deutsche Bank AG(4) Common 4,139,255 - 6.6%
Wellington Management Company, Common 4,064,200 - 6.4%
LLP(5)
Morgan Stanley(6) Common 3,632,023 - 5.8%
AEW Capital Management, L.P. Common 3,222,300(7) - 5.1%
Martin E. Stein, Jr. Common 988,720(8) 413,223 2.2%
Mary Lou Fiala Common 143,778(9) 156,091 *
Bruce M. Johnson Common 157,649 164,958 *
Raymond L. Bank Common 20,433 14,140 *
C. Ronald Blankenship Common 1,630 -
A. R. Carpenter Common 40,761 11,875 *
J. Dix Druce, Jr. Common 20,433 15,527 *
Douglas S. Luke Common 36,780 15,051 *
John C. Schweitzer Common 13,415 20,670 *
Thomas G. Wattles Common 13,591(10) -
Terry N. Worrell Common 34,128(11) 12,999 *
All directors and executive officers Common 1,471,318(8)(9) 824,534 3.6%
as a group (a total of 11 persons) (10)(11)
_________________________
*Less than one percent
(1) Information presented in this table and related notes has been obtained
from the beneficial owner or 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 or stock rights;
o may be acquired through stock option exercises; or
o have been deferred under our deferred compensation plan.
(3) Shares that can be acquired through stock option exercises through May
30, 2005. Excludes shares which may be issued upon vesting of restricted
stock or stock rights described in footnote (2) to the Summary
Compensation Table included elsewhere in this proxy.
(4) Includes the following shares which are held by RREEF America, L.L.C.,
Deutsche Investment Management Americas Inc. and Deutsche Bank Trust
Company Americas, each of which is a subsidiary of Deutsche Bank AG:
3,783,955 shares held by RREEF America, L.L.C.
274,000 shares held by Deutsche Investment Management Americas
Inc.
12,000 shares held by Deutsche Bank Trust Company Americas
The business address for Deutsche Bank AG is Taunusanlage 12, D-60325,
Frankfort am Main, Federal Republic of Germany.
(5) The business address for Wellington Management Company, LLP is 75 State
Street, Boston, Massachusetts 02109.
(6) The business address for Morgan Stanley is 1585 Broadway, New York, New
York 10036.
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(7) The business address of AEW Capital Management, L.P. is World Trade
Center East, Two Seaport Lane, Boston, Massachusetts 02110.
(8) 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 Group II (Nevada) Limited
Partnership, the sole general partner of which is a
corporation all of the outstanding stock of which 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 that 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 that is also a general partner.
o 4,000 shares held for the benefit of Mr. Stein by the
Wellhouse Trust. Mr. Stein has investment power with
respect to such shares.
o 6,053 shares held by Mr. Stein as custodian for his minor
children.
(9) Includes 67,915 shares owned by Mrs. Fiala's spouse.
(10) Includes 7,000 shares held in a trust. Mr. Wattles has investment power
over these shares.
(11) Includes 7,500 shares held in two trusts. Mr. Worrell has investment
power over these shares.
Stock Ownership Policy for Officers and Directors
Our board of directors has adopted a stock ownership policy
for senior officers and outside directors in order to encourage them to focus on
creating long-term shareholder value. The policy sets stock ownership targets
for officers as a multiple of base salary. For example, the target for the chief
executive officer is five times his annual base salary. The target for outside
directors is the greater of five times their annual retainer fees or $250,000
(exclusive of fees for committee service or attendance fees). The targets are to
be achieved by directors and executive officers over a five-year accumulation
period. The stock ownership policy also requires the chief executive officer,
the chief operating officer, the chief financial officer and the board of
directors:
o to retain the after-tax value of Regency shares acquired on the exercise
of stock options or on the vesting of stock awards for one year after
exercise or vesting, and
o to retain 60% of that value so long as they remain an officer or
director.
Compliance with the policy is measured by using the higher of
the trading price of the shares on the date of acquisition or the 30-day average
before the measurement date. Any options, restricted stock or stock rights
awards granted to a participant while he or she is not in compliance with these
guidelines will vest over five rather than four years or such longer period as
the compensation committee determines, in its discretion.
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ELECTION OF DIRECTORS
At the 2004 annual meeting, shareholders approved a proposal
eliminating classification of our board of directors. Consequently, all eleven
members of the board are standing for reelection at the 2005 meeting. All
directors will serve until the 2006 annual meeting and until their successors
are elected and qualified. The board of directors has nominated the directors
named below. All nominees are presently directors and were elected by
shareholders, except for Mr. Bruce M. Johnson, who was elected by the board in
July, 2004. Directors will be elected by a plurality of votes cast by shares
entitled to vote at the meeting.
Year First Elected to the
Nominee Board
Martin E. Stein, Jr. 1993
Mary Lou Fiala 1997
Bruce M. Johnson 2004
Raymond L. Bank 1997
C. Ronald Blankenship 2001
A. R. Carpenter 1993
J. Dix Druce, Jr. 1993
Douglas S. Luke 1993
John C. Schweitzer 1999
Thomas G. Wattles 2001
Terry N. Worrell 1999
Regency's board of directors has determined that Messrs.
Raymond L. Bank, C. Ronald Blankenship, A. R. Carpenter, J. Dix Druce, Douglas
S. Luke, John C. Schweitzer, Thomas G. Wattles and Terry N. Worrell, being a
majority of our directors, are independent as defined by Sections 303.1(B)(2)(a)
and (3) of the New York Stock Exchange listing standards. In determining
independence, the following commercial or charitable relationships will not be
considered to be material relationships that would impair a director's
independence:
(i) if a Regency director or his or her immediate family member is an
executive officer of another company that does business with
Regency and the annual payments by Regency to the other company
are less than 1% of the annual consolidated revenues of the other
company;
(ii) if a Regency director or his or her immediate family member is an
executive officer of another company which is indebted to Regency,
or to which Regency is indebted, and the total amount of either
company's indebtedness to the other is less than 1% of the total
consolidated assets of the other company; and
(iii) if a Regency director serves as an officer, director or trustee of
a charitable organization, and Regency's discretionary charitable
contributions to the organization are less than 1% of that
organization's total annual charitable receipts (Regency's
automatic matching of employee charitable contributions will not
be included in the amount of Regency's contributions for this
purpose).
The board will annually review all commercial and charitable relationships
of directors and determine whether directors meet these categorical
independence tests.
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During 2004, the spouse of Mr. Douglas S. Luke provided
services to Regency in connection with preparation of the non-financial
statement portions of our annual report to shareholders. The board considered
the terms of Mrs. Luke's engagement and determined that it was not material
because of the nominal fees involved, and that Mr. Luke therefore qualifies as
independent. See "Certain Transactions" for additional information concerning
Mrs. Luke's engagement.
During 2004, Regency's contributions to any tax exempt
organization in which any of Regency's independent directors serves as an
executive officer did not exceed $1 million or 2% of the tax exempt
organization's consolidated gross revenue.
The board of directors has adopted a code of business conduct
and ethics for our directors, officers and employees. The text of this code of
conduct is posted on our website at www.regencycenters.com. Copies of the code
of conduct may also be obtained by contacting Roger Frank, Vice
President-Internal Audit, at (904) 598-7000.
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.
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.
Information concerning all nominees for director, based on
data furnished by them, is set forth below.
MARTIN E. STEIN, JR.
Mr. Stein, age 52, 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, Stein Mart, Inc.,
a publicly held upscale discount retailer, EverBank Financial Corp, a privately
held savings and loan company, and its affiliate, EverBank, a federal savings
bank. Mr. Stein also serves on the Board of Governors and the Executive
Committee of the National Association of Real Estate Investment Trusts and is a
member of the International Council of Shopping Centers, the Urban Land
Institute and the Real Estate Roundtable.
MARY LOU FIALA
Mrs. Fiala, age 53, 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. Mrs. 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, Mrs. Fiala held various merchandising and store operations
positions with Macy's/Federated Department Stores. Mrs. Fiala is a director of
Build-A-Bear Workshop, Inc. and the University of North Florida Foundation. She
6
is also a member of the board of trustees of the International Council of
Shopping Centers and a National Trustee for Boys & Girls Clubs of America.
BRUCE M. JOHNSON
Mr. Johnson, age 57, has been Managing Director and Chief
Financial Officer of Regency since July 1993. From 1979 to October 1993, he
served as Executive Vice President and Chief Financial Officer of Regency's
predecessor real estate division. Prior to joining Regency, Mr. Johnson was Vice
President of Barnett Winston Trust, an equity and mortgage real estate
investment trust. Mr. Johnson is Chairman of Brooks Rehabilitation Hospital, a
private not-for-profit rehabilitation hospital, and serves on the Board and the
Executive Committee of its private parent company, Brooks Health Systems.
RAYMOND L. BANK
Mr. Bank, age 51, was a founder and President of Merchant
Partners, a venture capital firm focusing on retail, direct marketing, and
consumer service companies from 1994 through 2004. He also serves as President
of Raymond L. Bank & Associates, Inc., a firm investing in and advising
marketing-driven companies in the retail, direct marketing and services sectors,
since 1991.
C. RONALD BLANKENSHIP
Mr. Blankenship, age 55, has been Co-Chairman of Verde Group
since June 2003. He was Vice Chairman of Security Capital from May 1998 until
June 2003. He was Chief Operating Officer of Security Capital from 1998 to May
2002 and Managing Director from 1991 until May 1998. Prior to June 1997, he was
the Chairman of Archstone Communities Trust. Mr. Blankenship was formerly a
trustee of ProLogis Trust, and was formerly a director of BelmontCorp, InterPark
Holdings Incorporated, Storage USA, Inc. and Macquarie Capital Partners, LLC. He
also served as Interim Chairman, Chief Executive Officer and director of
Homestead Village Incorporated from May 1999 until November 2001.
A. R. CARPENTER
Mr. Carpenter, age 63, retired from CSX Corporation as Vice
Chairman, a position he held from July 1999 to February 2001. 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. and Stein Mart,
Inc.
J. DIX DRUCE, JR.
Mr. Druce, age 57, has been President and Chairman of the
Board of National P.E.T. Scan, LLC since June 2000. From 1988 until 2000, he
served as President and Chairman of the Board of Life Service Corp., Inc., a
life insurance management company, and President and director of American
Merchants Life Insurance Company and its parent, AML Acquisition Company, from
October 1992 until the companies' sale in 2000. 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. Mr. Druce is a director
of Florida Rock Industries, Inc.
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DOUGLAS S. LUKE
Mr. Luke, age 63, 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 MeadWestvaco Corporation, a diversified paper and
chemicals manufacturing company.
JOHN C. SCHWEITZER
Mr. Schweitzer, age 60, is President of Westgate Corporation,
which holds investments in real estate and venture capital operations. Mr.
Schweitzer is a trustee of Archstone Smith Communities Trust, and a director of
J.P. Morgan Chase Bank of Texas-Austin and KLRU Austin Public Television. He
previously served as a member of Pacific Retail Trust's board of trustees before
its merger into Regency in February 1999. Mr. Schweitzer was also director or
officer of a number of public companies and financial institutions, including
Franklin Federal Bancorp, Elgin Clock Company, El Paso Electric Company, MBank
El Paso, the Circle K Corporation, Homestead Village Incorporated and Enerserv
Products.
THOMAS G. WATTLES
Mr. Wattles, age 53, has been Chairman and Chief Investment
Officer of Dividend Capital Trust, a publicly held industrial property REIT,
since March 2003 and Principal of Black Creek Group, a real estate investment
management firm, since February 2003. He served as Managing Director of Security
Capital from 1991 to 2002 and as a trustee of ProLogis Trust from 1993 to May
2002. He was a director of ProLogis' predecessor from its formation in 1991, and
was Non-Executive Chairman of ProLogis from March 1997 to May 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.
TERRY N. WORRELL
Mr. Worrell, age 60, is a private investor in commercial
properties and other business ventures. Mr. Worrell is a director of Crescent
Real Estate Equities Company, a real estate investment trust, and NL Industries,
Inc., an international producer of titanium dioxide pigments. Mr. Worrell was a
member of Pacific Retail Trust's board of trustees before its merger into
Regency in February 1999. 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, an
officer, director or 10% shareholder must file a Form 4 reporting the
acquisition or disposition of Regency equity securities with the Securities and
Exchange Commission no later than the end of the second business day after the
day 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 these reports furnished to it and written representations that no
other reports were required, the officers, directors, and greater than 10%
8
beneficial owners complied with all applicable Section 16(a) filing requirements
during 2004.
Board of Directors and Standing Committees
The board held four regular meetings during 2004. All
directors attended at least 75% of all meetings of the board and board
committees on which they served during 2004.
Regency's independent directors meet quarterly in conjunction
with the regular board meetings. The independent directors have elected John C.
Schweitzer as lead director. As lead director, Mr. Schweitzer presides at the
independent directors' meetings. See "Shareholder Proposals and Communications
with the Board of Directors" for information on how to communicate with Mr.
Schweitzer or any of the other independent directors.
The board of directors has established five standing
committees: an executive committee, an audit committee, a compensation
committee, a nominating and corporate governance committee and an investment
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. The charter of each committee is available on our website
at www.regencycenters.com or by contacting Roger Frank, Vice President -
Internal Audit at (904) 598-7000.
Executive Committee. The executive committee presently is
composed of Martin E. Stein, Jr. (Chairman) or Mary Lou Fiala if Mr. Stein is
unavailable and any two other directors who qualify as "independent" directors,
as defined by the New York Stock Exchange, who are available to meet when
committee action is required. The executive committee did not meet during 2004.
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 or the rules of
the New York Stock Exchange for the full board of directors and, in addition,
may not declare dividends.
Audit Committee. The audit committee, which has been
established in accordance with Section 3(a)(58)(A) of the Securities Exchange
Act, presently is composed of J. Dix Druce, Jr. (Chairman), Raymond L. Bank, and
A. R. Carpenter, all of whom are considered independent under the rules of the
New York Stock Exchange. The audit committee met ten times during 2004. The
principal responsibilities of and functions to be performed by the audit
committee are established in the audit committee charter. The audit committee
charter was adopted by the board of directors and is reviewed annually by the
audit committee. A copy of the audit committee charter is attached as Appendix A
and is also available on our website at www.regencycenters.com. See "Audit
Committee Report" for a description of the audit committee's responsibilities.
The board of directors has determined that Messrs. Carpenter,
Druce and Raymond L. Bank are independent as defined by Sections 303.1(B)(2)(a)
and (3) of the New York Stock Exchange listing standards. Our board of directors
also has determined that Messrs. Carpenter and Druce are audit committee
financial experts as defined in Regulation S-K 401(h) and that Messrs.
Carpenter, Bank and Druce all meet the financial literacy requirements of the
New York Stock Exchange.
Nominating and Corporate Governance Committee. The nominating
and corporate governance committee, which is presently composed of A. R.
Carpenter (Chairman), Raymond L. Bank and John C. Schweitzer, met twice during
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2004. All members of the nominating and corporate governance committee are
independent as defined in the listing standards for the New York Stock Exchange.
The purpose of the nominating and corporate governance committee is:
o to assist the board in establishing criteria and qualifications for
potential board members;
o to identify high quality individuals who have the core competencies and
experience to become members of Regency's board and to recommend to the
board the director nominees for the next annual meeting of
shareholders;
o to establish corporate governance practices in compliance with
applicable regulatory requirements and consistent with the highest
standards, and recommend to the board the corporate governance
guidelines applicable to Regency;
o to lead the board in its annual review of the board's performance and
establish appropriate programs for director development and education;
and
o to recommend to the board director nominees for each committee.
A copy of the nominating and corporate governance committee charter is available
on our website at www.regencycenters.com.
The nominating and corporate governance committee will
consider written recommendations from shareholders for nominees for director.
Shareholders wishing to submit names for consideration should submit the
following to the Corporate Secretary, at Regency's address set forth on page 1
of this proxy statement:
o Biographical information about the candidate and a statement about his
or her qualifications;
o Any other information required to be disclosed about the candidate under
the Securities and Exchange Commission's proxy rules (including the
candidate's written consent to being named in the proxy statement and
to serve as a director, if nominated and elected);
o The names and addresses of the shareholder(s) recommending the candidate
for consideration and the number of shares of Regency common stock
beneficially owned by each.
Shareholders should submit recommendations in the time frame described under the
caption "Shareholder Proposals and Communications with the Board of Directors"
below.
The committee will apply the same criteria to all candidates
it considers, including any candidates submitted by shareholders. These criteria
include independence, personal integrity, leadership skills, strategic thinking,
willingness to make a time commitment, and breadth of knowledge about matters
affecting Regency and its industry. In addition, the committee will look for
skills and experience that will complement the board's existing make-up.
10
The committee evaluates each incumbent director to determine
whether he or she should be nominated to stand for re-election, based on the
types of criteria outlined above as well as the director's contributions to the
board during their current term. Since the committee's appointment in 2002, all
nominees have been incumbent directors except Mr. Bruce M. Johnson, our chief
financial officer, who was elected to the board in July 2004. When vacancies
develop, the committee will solicit input regarding potential new candidates
from a variety of sources, including existing directors and senior management.
If the committee deems it appropriate, it may engage a third-party search firm.
The committee will evaluate potential candidates based on their biographical
information and qualifications and also may arrange personal interviews of
qualified candidates by one or more committee members, other board members and
senior management.
Compensation Committee. The compensation committee presently
is composed of John C. Schweitzer (Chairman), C. Ronald Blankenship, A. R.
Carpenter and Douglas S. Luke. The compensation committee held two meetings
related to reviewing 2004 annual performance, to discuss leadership development
and succession planning, and to review and approve modifications 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, and makes grants of employee
stock options and other stock awards under Regency's Long-Term Omnibus Plan.
Investment Committee. The investment committee presently is
composed of Thomas G. Wattles (Chairman), C. Ronald Blankenship, Martin E.
Stein, Jr. and Terry N. Worrell. This committee was formed to review and
approve Regency's capital allocation strategy, to approve investments and
dispositions exceeding certain thresholds and to review Regency's investment and
disposition programs and the performance of in-process developments. The
investment committee met seven times during 2004.
AUDIT COMMITTEE REPORT
The management of Regency Centers Corporation (Regency) is
responsible for the company's internal controls and financial reporting process;
the purpose of the audit committee is to assist the board of directors in its
general oversight of Regency's financial reporting, internal controls and audit
functions. The audit committee operates under a written charter adopted by the
board of directors. The three directors who serve on the audit committee have no
financial or personal ties to Regency (other than director compensation and
equity ownership as described in this proxy statement) and are all "financially
literate" and "independent" for purposes of the New York Stock Exchange listing
standards. That is, the board of directors has determined that none of the audit
committee members have a relationship with Regency that may interfere with the
member's independence from Regency and its management.
The audit committee met with management ten times during the
year to consider and discuss the adequacy of Regency's internal controls and the
objectivity of its financial reporting; in addition, the audit committee was on
call as needed by management and the independent auditors to meet with or
discuss any issues arising during the course of the year. The audit committee
discussed these matters with Regency's independent auditors and with the
appropriate financial personnel and internal auditors. The audit committee also
discussed with Regency's senior management and independent auditors the process
used for certifications by Regency's chief executive officer and chief financial
11
officer which is required by the SEC for certain of Regency's filings with the
SEC. The audit committee met privately with both the independent auditors and
the internal auditors, each of whom has unrestricted access to the audit
committee.
The audit committee has reviewed and discussed the
consolidated financial statements with management and the independent auditors.
Management is responsible for the preparation, presentation and integrity of
Regency's financial statements; accounting and financial reporting principles;
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rule 13a-15(e)); establishing and maintaining internal control over
financial reporting (as defined in Exchange Act Rule 13a-15(f)); evaluating the
effectiveness of disclosure controls and procedures; evaluating the
effectiveness of internal control over financial reporting; and evaluating any
change in internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, internal control over
financial reporting. The independent auditors are responsible for performing an
independent audit of the consolidated financial statements and expressing an
opinion on the conformity of those financial statements with accounting
principles generally accepted in the United States of America, as well as
expressing an opinion on (i) management's assessment of the effectiveness of
internal control over financial reporting and (ii) the effectiveness of internal
control over financial reporting.
During the course of 2004, management completed the
documentation, testing and evaluation of Regency's system of internal control
over financial reporting in response to the requirements set forth in Section
404 of the Sarbanes-Oxley Act of 2002, in the Public Company Accounting
Oversight Board's "Auditing Standard No. 2", and in other related regulations.
The audit committee was kept apprised of the progress of the evaluation and
provided oversight and advice to management during the process. In connection
with this oversight, the audit committee received periodic updates provided by
management and the independent auditors at each regularly scheduled audit
committee meeting. At the conclusion of the process, management provided the
audit committee with and the audit committee reviewed a report on the
effectiveness of Regency's internal control over financial reporting. The audit
committee also reviewed the report of management contained in Regency's Annual
Report on Form 10-K for the year ended December 31, 2004 filed with the SEC, as
well as KPMG LLP's Report of Independent Registered Public Accounting Firm
included in Regency's Annual Report on Form 10-K related to its audit of (i) the
consolidated financial statements and financial statement schedule, (ii)
management's assessment of the effectiveness of internal control over financial
reporting, and (iii) the effectiveness of internal control over financial
reporting.
The audit committee supervises the relationship between
Regency and its independent auditors, including making decisions about their
appointment or removal, reviewing the scope of their audit services, approving
non-audit services, and confirming their independence. The Audit committee has
discussed with the independent auditors the matters required to be discussed by
Statement on Auditing Standard No. 61, "Communication with Audit Committees,"
and Public Company Accounting Oversight Board Auditing Standard No. 2, "An Audit
of Internal Control Over Financial Reporting Performed in Conjunction with an
Audit of Financial Statements." In addition, the audit committee has received
from the independent auditors the written disclosure required by Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," and discussed with them their independence from Regency and its
management. The audit committee has considered whether the provision of
permitted non-audit services by the independent auditor to Regency is compatible
with the auditor's independence.
12
Based on these reviews and discussions, the audit committee
recommended to the Board of Directors and the Board of Directors approved that
the audited financial statements be included in Regency's Annual Report on Form
10-K for the year ended December 31, 2004.
J. Dix Druce, Jr.,
Chairman Raymond L.
Bank A. R. Carpenter
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the Board of Directors is
responsible for evaluating and establishing executive compensation and other
benefit plans for Regency that attract, motivate, and retain a top notch
management team and align the interests of executives with shareholders. Part of
this responsibility includes evaluating CEO performance and determining CEO
compensation. Additionally the committee oversees company policies and practices
that advance organizational development, including those designed to achieve the
most productive engagement of the company's workforce. The committee is composed
entirely of independent directors, as defined by the New York Stock Exchange.
What is Regency's philosophy of executive compensation?
Regency's executive compensation program is incentive-based,
and has been designed to attract, motivate, and retain executives who are
capable of achieving the company's key strategic goals. The committee aligns the
interest of management with shareholders by awarding executives cash bonuses and
stock awards for achieving specified key objectives. Regency's compensation
philosophy is to set base salaries in a range that is near the competitive
median. Total direct compensation opportunities, including the cash bonuses and
the long-term incentives are targeted to a range near the 60th - 75th
percentiles for high levels of performance. The company will pay higher
incentives for exceptional performance.
The committee evaluates and establishes the company's
executive compensation program based upon current market information, including
comparative executive compensation studies. During 2004, the committee engaged
Deloitte Consulting to advise on its compensation matters.
What are the annual cash compensation components?
Base Salary. The compensation committee reviews base salaries
annually. In determining appropriate base salaries, the committee considers
external competitiveness in relation to Regency's performance and capital
structure, the roles and responsibilities of the executives, their contribution
to the company's business, an analysis of job requirements and the executives'
prior experience and accomplishments.
Annual Performance Bonus. To provide incentives to achieve key
corporate objectives, the committee makes cash bonus awards based on corporate
and individual performance. Each year the committee establishes a compensation
plan that establishes target cash bonuses based on achievement of specific
financial and operating objectives for the company and those activities managed
by the executive. For the named executive officers, the plan is based on
increases in funds from operations ("FFO") per share. FFO is the most widely
accepted measure of performance for REITs.
13
The compensation committee may also give significant
consideration to the achievement of other key financial and strategic goals,
including:
o Total shareholder return relative to Regency's peer
group;
o Return on equity;
o Maintenance of unsecured debt ratings;
o Growth in same property net operating income;
o Value achieved from development completions;
o Dollar amount of new development starts; and o Growth in
joint ventures and third party income.
Regency's philosophy is that the consistent achievement of
these objectives should, over time, result in total shareholder returns that are
meaningfully above the average for shopping-center REITs.
What is Regency's philosophy for long-term incentive compensation?
The committee strongly believes that providing executives with
an opportunity to increase their ownership of common stock aligns their
interests with stockholders. The company has stock ownership and retention
guidelines for senior executive officers as well as the Board of Directors,
which are described elsewhere in the proxy statement.
Regency grants stock rights awards to executive officers based
upon their contribution to the company's performance and achievement of specific
objectives. Each year the committee establishes a compensation plan that
establishes target award levels based on the achievement of specific performance
objectives.
For the named executive officers in 2004, 40% of the stock
rights grant was based upon FFO per share growth in 2004. The balance of the
opportunity, 60%, is tied to future compounded growth in FFO per share. The
period for which all grants can be earned and vested is four years. For other
senior executive officers, stock rights grants as well as cash bonuses were
based on both FFO per share growth and other performance objectives including
same property NOI growth, development starts and the value realized from
in-process developments. The portion of the 2004 stock rights grants tied to
future FFO per share growth is 33% for other senior executive officers. The
remaining portion of the stock rights grants for 2004 performance will vest at
the rate of 25% per year over four years.
The shares will not be issued until earning and vesting
requirements are satisfied. Shares issued upon vesting will be accounted for
based on the fair market value of the underlying stock on the date of grant. The
number of shares issued upon vesting will be increased as though dividends that
would have been paid on these shares, had they been outstanding from the date of
the stock rights award, were reinvested annually in Regency common stock.
14
How did Regency perform in 2004?
Based upon the growth in FFO per share of 8.1% in relation to
the specific performance objective that was set by the committee, Regency
achieved a high level of performance. Other key accomplishments include the
following:
o 46.2% total shareholder return as compared to our
shopping center peer group of 36.7%;
o an increase in return on equity to 13.7% (including
construction in progress), up from 13% for 2003;
o improved Regency's unsecured debt ratings;
o a 2.75% growth in same property net operating income,
coupled with a 96.1% occupancy rate at December 31, 2004
and a 10.1% rental rate growth;
o sold developments and outparcels totaling $236 million,
recognizing $36.4 million in profits net of taxes;
o completed $264.2 million in developments with a
stabilized NOI yield of 9.6%;
o $269.6 million of new development starts;
o execution of Regency's self-funding capital strategy
through property, development and outparcel sales,
totaling $526.7 million.
In accordance with the established performance criteria for
the incentive compensation plan, the committee awarded to top management a
multiple of 1.5 times the target cash bonus awards and 1.5 times the target
long-term incentive award opportunity.
How is the CEO compensated?
As a result of Regency's FFO per share growth and in
accordance with the company's incentive compensation plan for the CEO in 2004,
Mr. Stein received a cash bonus of $780,000 and a stock rights award for 15,187
shares. The stock rights award will vest at the rate of 25% per year over four
years. Additionally, Mr. Stein received a stock rights award for 22,780 shares
that will be earned and vested subject to future FFO per share growth over a
four-year period. If the FFO per share growth objectives are not met, the shares
will be forfeited. The number of shares issued upon vesting of the stock rights
awards will be increased as though dividends that would have been paid on these
shares, had they been outstanding from the date of the stock rights award, were
reinvested annually in Regency common stock. Mr. Stein continues to serve under
a severance and change-in-control agreement. For 2005, Mr. Stein's base
compensation was increased to $550,000.
How is the company addressing Internal Revenue Code limits?
The compensation committee is aware of the limitations imposed
by Section 162(m) of the Internal Revenue Code on the deductibility of
compensation paid to senior executives named in the compensation table to the
15
extent it exceeds $1 million per executive. The law exempts compensation paid
under plans that relate compensation to performance. Although Regency's plans
are designed to relate compensation to performance, certain elements of the
plans do not meet the tax law's requirements, e.g., because they allow the
compensation committee to exercise discretion in setting compensation. The
compensation committee is of the opinion that it is better to retain discretion
in determining executive compensation. However, the compensation committee will
continue to monitor the requirements of the Internal Revenue Code to determine
what actions, if any, should be taken with respect to Section 162(m).
John C. Schweitzer, Chairman
C. Ronald Blankenship
A. R. Carpenter
Douglas S. Luke
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, 2000 in Regency common shares
and that all dividends were reinvested by the shareholder.
[Graphic omitted]
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
------------------------ FISCAL YEAR ENDING ---------------------
COMPANY/INDEX/MARKET 12/31/1999 12/29/2000 12/31/2001 12/31/2002 12/31/2003 12/31/2004
Regency Centers Corporation 100.00 129.41 164.33 205.37 268.28 392.28
NAREIT Equit Index 100.00 126.37 143.97 149.97 204.98 269.70
S&P Composite 100.00 90.89 80.09 62.39 80.29 89.02
16
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or
accrued by Regency for services rendered during 2004, 2003 and 2002 to Regency's
Chief Executive Officer and Regency's two other executive officers.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
----------------------- ------------------------------
Stock Securities
Name & Principal Rights Underlying All Other
Position Year Salary(1) Bonus Awards(2) Options/SARs(3) Compensation(4)
-------- ---- --------- ----- --------- --------------- ---------------
Martin E. Stein, Jr. 2004 $520,000 $780,000 $1,950,000 666,704 $ 10,174
Chairman and Chief 2003 $450,000 $619,000 $1,857,000 241,510 $ 10,174
Executive Officer 2002 $440,000 $550,000 $1,650,000 379,330 $ 10,174
Mary Lou Fiala 2004 $382,000 $487,000 $1,368,000 172,168 $ 10,174
President and Chief 2003 $368,000 $430,000 $1,214,000 133,781 $ 10,174
Operating Officer 2002 $360,000 $382,500 $1,080,000 78,989 $ 10,174
Bruce M. Johnson 2004 $290,000 $300,000 $ 810,000 240,450 $ 12,934
Managing Director and 2003 $277,000 $248,000 $ 719,000 88,691 $ 12,934
Chief Financial Officer 2002 $271,000 $211,000 $ 542,000 158,761 $ 12,934
- -------------------------
(1) Includes amounts deferred under the 401(k) feature of Regency's profit
sharing plan.
(2) Consists of the fair market value of stock rights awards in each of the
years of grant, based on the trading price of our common stock at the
time of grant. The total number and value of stock rights held by the
named executives at December 31, 2004 are as follows:
Stock Aggregate
Rights Value
------ ----------------
Mr. Stein 140,317 $ 7,773,543
Mrs. Fiala 95,378 $ 5,283,961
Mr. Johnson 50,545 $ 2,800,171
In January 2005, we granted stock rights awards for an aggregate of
80,373 shares to the named executive officers based on performance in
2004. Forty percent of these awards vest 25% per year beginning on the
first anniversary of the date of grant and the remaining sixty percent
vest over four years based upon the FFO per share growth rate each year.
In January 2004, we granted stock rights awards for an aggregate of
94,820 shares to the named executive officers based on performance in
2003. One half of these awards vest 25% per year beginning on the first
anniversary of the date of grant and the remaining half cliff vest after
eight years, but contain provisions that allow annual accelerated
vesting based upon FFO per share growth and total shareholder return in
relation to Regency's peers.
In December 2002, we granted stock rights awards for an aggregate of
104,908 shares to the named executive officers. One-third of these
awards vest 25% per year beginning on the first anniversary of the date
of grant. The remaining two-thirds cliff vest after eight years, but
contain provisions that allow annual accelerated vesting based upon FFO
per share growth and total shareholder return in relation to Regency's
peers. In addition, during 2002 Messrs. Stein and Johnson received stock
rights awards for 11,761 shares and 4,988 shares, respectively, which
vest one-third per year beginning January 1, 2003 to provide them with
the same level of benefit that they would have received for specified
forgiveness amounts on stock purchase loans that they repaid in
September 2002.
Stock rights awards earn dividend equivalent units at the same rate as
dividends paid on the common stock. The executive is entitled to these
dividend equivalents under the same vesting schedule as the related
restricted stock rights. Executives do not have voting rights on shares
subject to stock rights awards until vested.
(3) All option grants are replenishment options as a result of option
exercises during 2004. The exercise prices of stock option grants are
equal to fair market value of Regency's common stock on date of grant.
17
(4) The amounts shown in this column for 2004 include the following:
Life Insurance Company Contribution to Other
Premiums 401(k)/Profit Sharing Plan Compensation*
-------- -------------------------- -------------
Mr. Stein $3,174 $6,000 $1,000
Mrs. Fiala $3,174 $6,000 $1,000
Mr. Johnson $5,934 $6,000 $1,000
--------------------
* Christmas bonus.
Stock Options. The following table sets forth information with
respect to option grants to the executive officers named in the summary
compensation table above during 2004 and the potential realizable value of such
option grants. All option grants are replenishment options as a result of option
exercises during 2004.
OPTION GRANTS DURING FISCAL 2004
% of
Number Total Options Exercise Price Hypothetical
of Options Granted ($/share) Expiration Value at
Executive Officer Granted(1) during 2004 -------- Date Grant Date(2)
----------------- ------- ----------- ---- ----------
Martin E. Stein, Jr. 10,341 0.54% $45.95 01/13/07 $ 37,021
50,379 2.65% $46.50 01/13/07 $ 180,357
22,903 1.20% $45.95 01/14/07 $ 81,993
48,808 2.56% $54.05 01/15/07 $ 231,838
18,070 0.95% $48.85 01/15/07 $ 85,833
2,420 0.13% $44.40 01/15/07 $ 7,526
20,332 1.07% $40.30 01/15/07 $ 63,233
54,663 2.87% $44.94 01/15/07 $ 116,432
21,418 1.12% $48.85 01/23/08 $ 101,736
24,098 1.27% $40.30 01/23/08 $ 74,945
22,835 1.20% $45.95 10/01/08 $ 81,749
31,931 1.68% $54.05 12/15/08 $ 151,672
961 0.05% $52.80 12/15/08 $ 4,565
18,504 0.97% $48.85 12/15/08 $ 87,894
21,951 1.15% $40.30 12/15/08 $ 68,268
61,260 3.22% $44.94 12/15/08 $ 130,484
17,922 0.94% $52.80 07/29/09 $ 85,130
9,859 0.52% $45.95 07/29/09 $ 35,295
21,096 1.11% $40.30 07/29/09 $ 65,609
9,935 0.52% $44.94 07/29/09 $ 21,162
18,139 0.95% $52.80 12/14/09 $ 86,160
19,169 1.01% $45.95 12/14/09 $ 68,625
10,598 0.56% $40.30 12/14/09 $ 32,960
10,484 0.55% $42.11 12/14/09 $ 22,330
36,135 1.90% $52.80 01/01/11 $ 171,641
33,896 1.78% $40.30 01/01/11 $ 105,417
8,423 0.44% $42.11 01/01/11 $ 17,940
12,377 0.65% $54.52 01/01/11 $ 58,791
5,273 0.28% $54.05 12/14/11 $ 25,047
10,346 0.54% $52.80 12/14/11 $ 49,144
12,179 0.64% $40.30 12/14/11 $ 37,877
Mary Lou Fiala 1,326 0.07% $54.05 06/12/07 $ 6,299
1,485 0.08% $44.94 06/12/07 $ 3,163
604 0.03% $54.05 06/19/07 $ 2,869
676 0.04% $44.94 06/19/07 $ 1,440
665 0.03% $54.05 12/31/07 $ 3,159
18
% of
Number Total Options Exercise Price Hypothetical
of Options Granted ($/share) Expiration Value at
Executive Officer Granted(1) during 2004 -------- Date Grant Date(2)
----------------- ------- ----------- ---- ----------
745 0.04% $44.94 12/31/07 $ 1,587
631 0.03% $54.05 06/24/08 $ 2,997
707 0.04% $44.94 06/24/08 $ 1,506
11,982 0.63% $54.05 12/15/08 $ 56,915
6,220 0.33% $45.95 12/15/08 $ 22,268
51,774 2.72% $44.94 12/15/08 $ 110,279
661 0.03% $44.94 12/31/08 $ 1,408
17,173 0.90% $45.95 07/29/09 $ 61,479
5,871 0.31% $44.94 07/29/09 $ 12,505
23,688 1.24% $45.95 12/14/09 $ 84,803
28,161 1.48% $45.95 01/01/11 $ 100,816
8,195 0.43% $54.52 01/01/11 $ 38,926
3,667 0.19% $54.05 12/14/11 $ 17,418
3,964 0.21% $45.95 12/14/11 $ 14,191
3,973 0.21% $44.94 12/14/11 $ 8,462
Bruce M. Johnson 41,313 2.17% $46.50 01/13/07 $ 147,901
14,467 0.76% $46.50 01/14/07 $ 51,792
15,297 0.80% $54.05 01/15/07 $ 72,661
4,056 0.21% $44.40 01/15/07 $ 12,614
17,132 0.90% $44.94 01/15/07 $ 36,491
3,578 0.19% $54.52 01/15/07 $ 16,996
13,629 0.72% $48.85 01/23/08 $ 64,738
15,335 0.81% $40.30 01/23/08 $ 47,692
16,436 0.86% $46.50 10/01/08 $ 58,841
12,928 0.68% $54.05 12/15/08 $ 61,408
4,743 0.25% $46.50 12/15/08 $ 16,980
14,479 0.76% $44.94 12/15/08 $ 30,840
2,097 0.11% $54.05 07/29/09 $ 9,961
4,319 0.23% $48.85 07/29/09 $ 20,515
1,311 0.07% $46.50 07/29/09 $ 4,693
4,859 0.26% $40.30 07/29/09 $ 15,111
1,001 0.05% $46.73 07/29/09 $ 3,113
2,348 0.12% $44.94 07/29/09 $ 5,001
2,315 0.12% $48.85 12/14/09 $ 10,996
6,995 0.37% $46.50 12/14/09 $ 25,042
2,605 0.14% $40.30 12/14/09 $ 8,102
4,671 0.25% $53.70 01/01/11 $ 22,187
9,310 0.49% $48.85 01/01/11 $ 44,223
4,992 0.26% $46.50 01/01/11 $ 17,871
10,475 0.55% $40.30 01/01/11 $ 32,577
1,820 0.10% $54.05 12/14/11 $ 8,645
3,736 0.20% $48.85 12/14/11 $ 17,746
4,203 0.22% $40.30 12/14/11 $ 13,071
(1) All option grants are replenishment options as a result of option
exercises during 2004. Under the replenishment feature, if the optionee
paid the exercise price through the delivery of previously-owned shares
of Regency's common stock that the optionee had owned for at least six
months and the fair market value of the shares acquired on exercise was
at least 20% greater than the option exercise price, the optionee
received an additional option to purchase the same number of shares of
common stock as the optionee delivered in payment for such exercise.
Replenishment options expire on the same date as the original options
but have an exercise price equal to the fair market value of the shares
surrendered. In December 2004 Regency offered option holders the
opportunity to exchange replenishment rights under outstanding options
for new options or stock rights awards. As part of this program, in
January 2005, each of the named executive officers exchanged all
replenishment rights for new options without replenishment rights.
All options earn dividend equivalents units (DEUs) that vest at the same
rate as the underlying option. 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. The following table
19
reflects the number and value of shares distributed to the named
executive officers for vested DEUs during 2004:
Vested DEU Shares Taxable DEU Value
----------------- -----------------
Mr. Stein 15,010 $665,694
Ms. Fiala 8,601 $381,454
Mr. Johnson 5,216 $231,330
(2) The estimated present value at grant date of each option granted during
2004 has been calculated using the Black-Scholes option pricing model.
The valuation is based upon the following assumptions for options
granted during each quarter in 2004:
March 31, June 30, September 30, December 31,
2004 2004 2004 2004
---- ---- ---- ----
Estimated time until exercise 2.5 years 2.5 years 2.3 years 2.1 years
Risk-free interest rate 1.8% 2.8% 2.5% 2.9%
Volatility rate 14% 18% 18% 19%
Dividend yield 5.0% 5.3% 4.6% 4.0%
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.
The following table sets forth information concerning the
value of unexercised options as of December 31, 2004 held by the executive
officers named in the summary compensation table above.
AGGREGATED OPTION EXERCISES DURING FISCAL 2004
AND OPTION YEAR-END VALUES TABLE
Value of
Number of Number of Unexercised
Shares Unexercised In-the-Money
Acquired Value Options at Options at
Upon Realized December 31, 2004 December 31, 2004
Exercise Upon Exercisable/ Exercisable/
Name Options Exercise Unexercisable Unexercisable
---- ------- -------- ------------- -------------
Martin E. Stein, Jr. 778,625 $ 8,240,975 413,223 (E) / $ 2,373,861 (E) /
7,813 (U) $ 226,562 (U)
Mary Lou Fiala 213,942 $ 3,113,540 156,091 (E) / $ 1,323,221 (E) /
5,433 (U) $ 157,564 (U)
Bruce M. Johnson 278,699 $ 2,811,167 164,958 (E) / $ 1,084,621 (E) /
2,696 (U) $ 78,174 (U)
Severance and Change in Control Agreements. Regency has
severance and change-of-control agreements with each of the executive officers
named in the summary compensation table. In the event of termination, Mr. Stein
and Mrs. Fiala would receive one and a half times their annual compensation and
benefits. Mr. Johnson would receive one times his annual compensation and
benefits. In the event of a change in control and termination within two years
after the change in control, Mr. Stein and Mrs. Fiala would receive three times
their annual compensation and benefits and accelerated vesting of unvested
long-term incentive compensation. Mr. Johnson would receive two times his annual
20
compensation and benefits along with the same accelerated vesting provisions. As
part of the agreements, the named executives are subject to certain restrictive
covenants and consulting arrangements. The agreements expire on December 31,
2007 and automatically renew for successive additional five-year terms unless
either party gives written notice of non-renewal.
Compensation of Directors. In 2004, Regency paid an annual fee
of $28,000 to each of its non-employee directors, plus $1,500 for each board
meeting attended. Committee chairpersons receive $3,000 annually. Chairpersons
of the board committees receive $1,500 for each committee meeting attended and
all other board committee members receive $1,000 for each board committee
meeting attended. Directors' fees are currently paid in cash or shares of common
stock.
Non-employee directors also received stock rights awards of
2,000 shares each immediately following the 2004 annual meeting. The stock
rights entitle the director to receive dividend equivalent units at the same
rate as dividends paid on the common stock. The stock rights and dividend
equivalent units vest 25% on each of the first four anniversary dates of the
grant.
CERTAIN TRANSACTIONS
The audit committee of the board of directors is responsible
for evaluating the appropriateness of all related-party transactions.
Disinterested directors must approve related party transactions involving
directors or executive officers.
During 2004, insurance services for our properties were
provided by Palmer & Cay, for which we paid premiums of approximately $2,645,488
and administrative fees of $120,000. Prior to April 2004, Mr. Martin E. Stein
Jr.'s brother was a shareholder in and employed by Palmer & Cay. He continues to
act as a consultant to Palmer & Cay.
During 2004, the spouse of Mr. Douglas S. Luke provided
services to Regency in connection with preparation of its annual report to
shareholders for which she was paid $35,174.
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The board of directors has selected the firm of KPMG LLP to
serve as the independent registered public accountants for Regency for the
current fiscal year ending December 31, 2005. 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.
All decisions regarding selection of independent accounting
firms and approval of accounting services and fees are made by our audit
committee in accordance with the provisions of the Sarbanes-Oxley Act of 2002.
There are no exceptions to the policy of securing pre-approval of the audit
committee for any service provided by our independent accounting firm.
21
The following table provides information relating to the fees
billed to Regency by KPMG LLP for the years ended December 31, 2004 and 2003:
2004 2003
---- ----
Audit Fees1 $ 1,241,000 $ 877,986
Audit Related Fees2, 3 $ 108,461 $ 123,002
Tax Fees3, 4 $ 36,300 $ 42,150
All Other Fees $ 0 $ 0
-------------------------
1 Audit fees include all fees and out-of-pocket expenses for services in
connection with (i) the annual audits and review of quarterly financial
statements for Regency and its operating partnership, Regency Centers,
L.P., (ii) audits related to management's assessment of internal control
over financial reporting and (iii) KPMG LLP's opinion as to
effectiveness of internal control over financial reporting.
2 Consists primarily of assistance in documenting internal control
policies and procedures over financial reporting and audits of employee
benefit plans.
3 The audit committee discussed these services with KPMG LLP and
determined that their provision would not impair KPMG LLP's
independence.
4 Consists of fees for tax consultation and tax compliance services.
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 proxies 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 AND COMMUNICATIONS WITH THE BOARD OF
DIRECTORS
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 proposal to be
included in Regency's proxy statement and form of proxy relating to the 2006
annual meeting, a written copy of their proposal must be received at Regency's
principal executive offices no later than December 1, 2005. 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 December 1, 2005. To ensure prompt receipt
by Regency, proposals should be sent certified mail, return receipt requested.
Shareholders who wish to communicate with the board of
directors or with a particular director may send a letter to the Corporate
Secretary at Regency's address set forth on page 1 of this proxy statement. The
22
mailing envelope should contain a clear notation indicating that the enclosed
letter is a "Shareholder-Board Communication" or "Shareholder-Director
Communication." All such letters should identify the author as a shareholder and
clearly state whether the intended recipients are all members of the board or
just certain specified individual directors. The Secretary will make copies of
all such letters and circulate them to the appropriate director or directors.
Shareholders may also communicate with the board of directors or with a
particular director by contacting Regency's AlertLine at 1-877-861-6669.
Regency does not have a formal policy requiring directors to
attend annual meetings. However, because the annual meeting generally is held on
the same day as a regular board meeting, Regency anticipates that directors
would attend the annual meeting unless, for some reason, they are unable to
attend the board meeting on the same date. Nine of ten of Regency's directors at
the time attended the 2004 annual meeting.
ANNUAL REPORT
A copy of Regency's annual report for the year ended December
31, 2004 accompanies this proxy statement. Additional copies may be obtained by
writing to Diane Ortolano, at Regency's principal executive offices, at the
address set forth below.
A copy of Regency's annual report on Form 10-K will be provided, without charge,
upon written request addressed to Ms. Ortolano at Regency's principal executive
offices at 121 West Forsyth Street, Suite 200, Jacksonville, Florida 32202.
Regency's annual report to shareholders and Form 10-K are also available on our
website at www.regencycenters.com.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by Regency. We
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.
Please specify your 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.
* * * * * * * * *
The reports of the audit committee and 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 that Regency specifically incorporates these reports or the performance
graph by reference in another filing.
23
Appendix A
REGENCY CENTERS CORPORATION
AUDIT COMMITTEE CHARTER
Purpose
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
independence and qualifications of the company's independent auditors, (3) the
performance of the company's internal and external auditors and (4) the
compliance by the company with legal and regulatory requirements.
Membership
The Audit Committee shall consist of at least three members. 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
and applicable laws and regulations, including the independence requirements of
Rule 10A-3 under the Securities Exchange Act of 1934.
Outside Advisors
The Audit Committee shall have the authority, without seeking Board approval, to
retain independent legal, accounting or other advisors to the extent that the
Audit Committee deems necessary or appropriate in fulfilling its duties, and the
Company shall provide funding, as determined by the Audit Committee, for the
payment of compensation to such advisors.
Meetings
The Audit Committee shall meet at least quarterly.
The Audit Committee shall meet periodically in separate sessions with:
A. management;
B. the internal auditors or other personnel responsible for the
company's internal audit function (referred to below as the
"internal audit function"); and
C. the independent auditors.
The Audit Committee may request any officer or employee of the company, the
company's outside counsel or the independent auditors to meet with the Audit
Committee or any of its members or advisors.
The Audit Committee will meet at the call of its Chairman or the Chairman of the
Board.
A majority of the Audit Committee members will be quorum for the transaction of
business.
A-1
The action of a majority of those present at a meeting at which a quorum is
present will be the act of the Audit Committee.
Any action required to be taken at a meeting of the Audit Committee will be
deemed the action of the Audit Committee without a meeting if all of the Audit
Committee members executed, either before or after the action is taken, a
written consent and the consent is filed with the Corporate Secretary.
Minutes shall be taken at each meeting of the Audit Committee and included in
the permanent minutes of the company.
Duties and Authority
General
1. The Audit Committee shall have sole authority and responsibility to
appoint, approve the terms of engagement (including fees), oversee,
evaluate and replace the company's independent auditors, including
resolving disagreements between management and the auditors regarding
financial reporting. The independent auditors shall report directly to
the Audit Committee.
2. The Audit Committee or a designated member shall pre-approve all audit
services and all permissible non-audit services, except in the case of
permissible non-audit services, if:
A. such services qualify as de minimus under Section 10A of the
Securities Exchange Act of 1934;
B. such services were not recognized by the company at the time
of engagement to be non-audit services; and
C. the Audit Committee, or one or more of its designated members,
approves the permissible non-audit services before completion
of the audit.
When one or more designated members pre-approves services hereunder,
such approval shall be presented to the Audit Committee at its next
scheduled meeting.
3. The Audit Committee shall report regularly to the Board.
Matters Relating to Financial Statements and Disclosure
1. The Audit Committee shall:
A. Meet with the independent auditors before the annual audit to
review the planning and staffing of the audit;
B. Discuss periodically with management and the independent
auditors significant financial reporting issues and judgments
made in connection with preparing the company's financial
statements, including any significant changes in the selection
or application of critical accounting policies and the effect of
such changes, and any significant issues regarding the adequacy
A-2
of the company's internal controls and any special audit steps
adopted in light of any material control deficiencies.
C. Discuss the annual audited financial statements and quarterly
financial statements with management and the independent
auditors, together with the disclosures in "management's
discussion and analysis of financial condition and results of
operations" in the company's Form 10-K, and recommend to the
Board whether the audited financial statements should be
included in the company's Form 10-K;
D. Generally discuss with management the types of information and
the types of presentations to be made in (i) earnings releases
and (ii) earning guidance and financial information provided to
analysts and rating agencies, including the use of pro forma or
adjusted non-GAAP information, but the Audit Committee shall not
be required to discuss specific releases, guidance or financial
information in advance; and
E. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the company's annual proxy
statement.
2. The Audit Committee's meetings with the independent auditors shall
include, at the appropriate times:
A. reports by the auditors required by law; and
B. the matters required to be discussed by SAS 61 relating to the
conduct of the audit, including any difficulties encountered in
the course of the audit work, any restrictions on the scope of
the independent auditors' activities or on access to requested
information, and any significant disagreements with management.
3. The Audit Committee shall discuss periodically with management the
company's major financial risk exposures and review generally the
guidelines and policies governing the process by which management
assesses and manages such risk exposures.
Oversight of Independent Auditors
1. At least annually, the audit committee shall evaluate the
independent auditors' qualifications, performance and
independence and report its conclusions to the Board. As part
of the evaluation process, in addition to taking into account
the opinions of management and the company's internal audit
function, the Audit Committee shall obtain and review a report
by the independent auditors describing:
A. The auditing firm's internal quality control procedures;
B. Any material issues and any steps to deal with such issues
raised (i) by the auditing firm's most recent internal quality
control review, or peer review of the firm, or (ii) by any
inquiry or investigation by governmental or professional
authorities within the preceding five years, regarding one or
more independent audits performed by the firm; and
A-3
C. All relationships between the independent auditors and the
company, including the provision of non-audit services (which
the audit committee should discuss with the auditors in order
to enable the Audit Committee to assess the auditors'
independence).
The Audit Committee shall also:
A. Annually review and evaluate the lead partner of the independent
auditors; and
B. Confirm the regular rotation required by law of the lead or
reviewing partners.
2. The Audit Committee should consider, at such intervals as it deems
appropriate, whether regular rotation of the auditing firm itself would
assure continuing independence of the auditors.
3. The Audit Committee shall establish hiring policies for the Company
regarding employees or former employees of the independent auditors who
participated in any audit of the company.
Oversight of Internal Audit Function
The Audit Committee shall:
1. Review the appointment or replacement of all senior internal auditing
executives or internal audit firms.
2. Discuss with the independent auditors and management the
responsibilities, budget and staffing of the internal audit function
and any recommended changes in the planned scope of the internal audit.
3. Review the significant reports to management prepared by the internal
audit function and management's responses.
4. Review disclosures made to the Audit Committee by the company's CEO and
CFO during their certification process for Form 10-K and Form 10-Qs
about any (i) significant deficiencies in the design or operation of
internal controls, (ii) material weaknesses in internal controls and
(iii) fraud involving management or other employees who have a
significant role in the company's internal controls.
Compliance Oversight
The Audit Committee shall:
1. To the extent that it deems appropriate, review reports of related
party transactions.
2. Obtain from the independent auditors assurance that they will inform
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.
3. Discuss with management, the internal audit function and the
independent auditors any condition which comes to their attention
indicating that the company's subsidiaries and affiliated entities,
A-4
domestic and foreign, are not conforming to applicable legal
requirements or the company's Code of Business Conduct and Ethics.
4. Advise the Board with respect to the company's policies and procedures
regarding compliance with applicable laws and regulations and with the
company's (i) Code of Business Conduct and Ethics and (ii) Code of
Ethics for senior financial officers.
5. Establish procedures for:
A. The receipt, retention and treatment of complaints received by
the company regarding accounting, internal accounting controls
or auditing matters; and
B. The confidential, anonymous submission by employees of the
company of concerns regarding questionable accounting or
auditing matters.
6. 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.
Subcommittees
To the extent permitted by law and rules of the New York Stock Exchange, the
Audit Committee may delegate specific responsibilities to one or more of its
members, including matters with respect to earnings guidance.
Annual Review
The Audit Committee annually shall:
1. Review and reassess the adequacy of this Charter and recommend any
proposed changes to the Board for approval; and
2. Conduct an evaluation of the Audit Committee's own performance.
Limitations
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.
A-5
REGENCY CENTERS CORPORATION
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 3, 2005
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 3, 2005, and any and all adjournments thereof, in the manner specified.
1. Election of directors nominated by the board of
directors to serve until the 2006 annual meeting of shareholders and until their
successors have been elected and qualified:
(01) Martin E. Stein, Jr. (07) Bruce M. Johnson
(02) Raymond L. Bank (08) Douglas S. Luke
(03) C. Ronald Blankenship (09) John C. Schweitzer
(04) A. R. Carpenter (10) Thomas G. Wattles
(05) J. Dix Druce (11) Terry N. Worrell
(06) Mary Lou Fiala
[_] FOR all nominees listed [_] WITHHOLD AUTHORITY INSTRUCTION: To withhold authority to vote
(except as marked to to vote for all for any individual nominee, strike through
the contrary. See nominees. that nominee's name.
instruction to the
right).
(Continued and to be SIGNED and dated on the reverse side.)
________________________________________________________________________________
YOU MAY VOTE TOLL-FREE BY TELEPHONE
OR ON THE INTERNET
(OR BY COMPLETING THE PROXY CARD BELOW
AND RETURNING IT BY MAIL)
(Available only until 3:00 pm EDST on May 2, 2005)
TO VOTE BY TELEPHONE OR INTERNET,
USE THE CONTROL NUMBER IN THE BOX BELOW
Call Toll-Free To vote by Internet, have this form
on a Touch-Tone Telephone and follow the directions when you
24 hours a day, 7 days a week visit:
1-888-216-1308 https://www.proxyvotenow.com/reg
Have this form available when you --------------------------------
call the toll-free number. Then,
enter your control number and follow
the simple prompts.
CONTROL NUMBER FOR
TELEPHONIC/INTERNET VOTING
[ ]
DO NOT RETURN THIS CARD
IF YOU HAVE VOTED BY TELEPHONE OR INTERNET.
FOLD AND DETACH HERE AND READ 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 THE BOARD'S NOMINEES.
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:________________, 2005 ________________________________(SEAL)
________________________________(SEAL)
(Please sign exactly as name or names appear hereon. Executors, administrators,
trustees or other representatives should so indicate when signing.)