-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TZIu8ajYCr6/qpBnifvFUHz1RBqNduTigb3/wvJTOdHAz35m8bYHtgRhYLmc51gW DDApyHurX3cceUCks7joJw== 0000899243-97-001138.txt : 19970619 0000899243-97-001138.hdr.sgml : 19970619 ACCESSION NUMBER: 0000899243-97-001138 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950427 FILED AS OF DATE: 19970618 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEINGARTEN REALTY INVESTORS /TX/ CENTRAL INDEX KEY: 0000828916 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 741464203 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09876 FILM NUMBER: 97625674 BUSINESS ADDRESS: STREET 1: 2600 CITADEL PLAZA DR CITY: HOUSTON STATE: TX ZIP: 77008 BUSINESS PHONE: 7138666000 MAIL ADDRESS: STREET 1: P O BOX 924133 STREET 2: P O BOX 924133 CITY: HOUSTON STATE: TX ZIP: 77292-4133 DEF 14A 1 DEFINITIVE PROXY MATERIAL SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 WEINGARTEN REALTY INVESTORS - -------------------------------------------------------------------------------- (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)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------------- Notes: WEINGARTEN REALTY INVESTORS 2600 CITADEL PLAZA DRIVE HOUSTON, TEXAS 77008 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS APRIL 27, 1995 To Our Shareholders: Notice is hereby given that the Annual Meeting of Shareholders of Weingarten Realty Investors (the "Company") will be held at The Houstonian, 111 N. Post Oak Lane, Houston, Texas on Thursday April 27, 1995, at 4:00 p.m., Houston time. Shareholders will be asked to vote on the following proposals: Proposal 1: The election of nine trust managers to serve until the next Annual Meeting of Shareholders or until their successors have been elected and qualified. Proposal 2: Ratification of the appointment of Deloitte & Touche llp, independent certified public accountants, as the Company's auditors for the ensuing year. Proposal 3: The amendment of the 1988 Share Option Plan of the Company to increase the number of shares available thereunder from 500,000 to 700,000. The enclosed Proxy Statement includes information relating to these proposals. Additional purposes of the meeting are to receive reports of officers (without taking action thereon) and to transact such other business as may properly come before the meeting. All shareholders of record as of the close of business on March 3, 1995 are entitled to notice of and to vote at the meeting. At least a majority of the outstanding common shares of the Company is required for a quorum. The Board of Trust Managers appreciates and encourages your participation in the Company's annual meeting. Whether or not you plan to attend the meeting, it is important that your shares be represented. Accordingly, please sign, date and promptly return the enclosed proxy in the postage-paid envelope provided. If you attend the meeting, you may withdraw your proxy, if you wish, and vote in person. By order of the Board of Trust Managers, M. CANDACE DuFOUR Vice President and Secretary March 23, 1995 Houston, Texas WEINGARTEN REALTY INVESTORS 2600 CITADEL PLAZA DRIVE HOUSTON, TEXAS 77008 PROXY STATEMENT SOLICITATION AND REVOCABILITY OF PROXIES This Proxy Statement is furnished by the Board of Trust Managers of Weingarten Realty Investors (the "Company") in connection with the solicitation of proxies for use at the Annual Meeting of Shareholders of the Company to be held April 27, 1995, and at any adjournment thereof. This Proxy Statement relates to a meeting of the holders of common shares of beneficial interest, par value $0.03 per share ("Common Shares"), of the Company to consider and act upon the proposals set forth in the notice of meeting attached hereto, including the election of trust managers. This Proxy Statement and the related form of Proxy will be sent or given to shareholders beginning on or about March 23, 1995. The Common Shares represented by the form of proxy enclosed herewith will be voted in accordance with the specifications noted thereon. If no choice is specified, said Common Shares will be voted in favor of the proposals set forth in the notice attached hereto. The affirmative vote of two-thirds of the outstanding Common Shares is required to elect each trust manager nominee. The affirmative vote of the holders of a majority of the Common Shares present in person or by proxy at the Annual Meeting of Shareholders and entitled to vote is required for approval of the ratification of the appointment of auditors and for the amendment of the 1988 Share Option Plan. The Texas Real Estate Investment Trust Act does not specifically address the treatment of abstentions and broker non-votes. The Company's Bylaws provide that shares abstaining from a vote or not voted on a matter will not be treated as entitled to vote. The form of proxy also confers discretionary authority with respect to amendments or variations to matters identified in the notice of meeting and any other matters that may properly come before the meeting. A shareholder who has given a proxy may revoke it as to any motion on which a vote has not already been taken by signing a proxy bearing a later date or by written notice delivered to the Secretary of the Company at the Company's principal executive office, 2600 Citadel Plaza Drive, Houston, Texas 77008 (the mailing address for the Company is P. O. Box 924133, Houston, Texas 77292- 4133), at any time up to the meeting or any adjournment thereof, or by delivering it to the Chairman of the meeting on the date of the meeting or any adjournment thereof. The cost of solicitation of these proxies will be paid by the Company, including reimbursement paid to brokerage firms and other custodians, nominees and fiduciaries for reasonable costs incurred in forwarding the proxy material to and solicitation of proxies from the beneficial owners of Shares held of record by such person. It is anticipated that the solicitation will be primarily by mail on or about March 23, 1995, but proxies also may be solicited personally or by telephone by regular employees of the Company without additional compensation. VOTING SECURITIES AND PRINCIPAL HOLDERS All shareholders of record as of the close of business on March 3, 1995, are entitled to notice of and to vote at the meeting. Provided a complete and executed form of proxy shall have been delivered to the Secretary of the Company prior to the meeting, any person may attend and vote that number of shares for which he holds proxy. On March 3, 1995, the Company had 26,367,799 Common Shares outstanding, which were held of record by 2,688 persons. The Common Shares are the only class of voting securities of the Company. Each Common Share is entitled to one vote. The following table sets forth the beneficial ownership of the Company's Common Shares with respect to each person known by the Company to be the beneficial owner of more than five percent of the Company's currently outstanding Common Shares as of March 3, 1995.
NAME AND BUSINESS ADDRESS AMOUNT AND NATURE OF PERCENT OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP OF CLASS ------------------------- -------------------- -------- Stanford Alexander................................ 2,022,577(1) 7.7% P.O. Box 924133 Houston, Texas 77292-4133 The Capital Group Companies, Inc. ................ 2,111,840(2) 8.0% 333 South Hope Street Los Angeles, California 90071
- -------- (1) Includes 376,170 shares held by various trusts for the benefit of Mr. Alexander's children and 296,675 shares for which voting and investment power are shared with Andrew M. Alexander and Melvin A. Dow, trust managers of the Company; 16,200 shares subject to restrictions on transfer for which Mr. Alexander has the right to vote and 25,000 shares that may be purchased by Mr. Alexander upon exercise of share options that are currently exercisable or that will become exercisable within 60 days of the date for which beneficial ownership is provided in the table. Also includes 228,125 shares held by a charitable foundation, which Mr. Alexander and his wife Joan control. (2) Pursuant to information contained in a Schedule 13G filed with the Securities and Exchange Commission in February 1995 and in a letter from The Capital Group Companies, Inc. ("CG") in February 1995, the Company was informed that as of December 31, 1994, Capital Guardian Trust Company, a trust company, and Capital Research and Management Company, a registered investment advisor, both of which are operating subsidiaries of CG, exercised as of December 31, 1994, investment discretion with respect to 550,000 and 1,561,840 shares, respectively, or a combined total of 8.0% of outstanding shares which was owned by various institutional investors. 2 PROPOSAL 1 ELECTION OF TRUST MANAGERS The Board of Trust Managers has nominated and urges you to vote "FOR" the nine nominees listed below as trust managers who, if elected, would serve until the next Annual Meeting of Shareholders or until their successors have been elected and qualified. The persons whose names are set forth as proxies in the enclosed form of proxy will vote all shares for which they hold proxies "FOR" the election of the nominees named herein unless otherwise directed. Although the trust managers of the Company do not contemplate that any of the nominees will be unable to serve, if such a situation should arise prior to the meeting, the appointed proxies will use their discretionary authority pursuant to the proxy and vote in accordance with their best judgment. The affirmative vote of the holders of two-thirds of the outstanding Common Shares is required to elect each trust manager nominee. All of the nominees for election as trust managers are members of the present Board of Trust Managers and have consented in writing to be named in this proxy statement and to serve as a trust manager, if elected. Set forth below is certain information as of March 3, 1995, for (i) the members of the present Board of Trust Managers, (ii) the executive officers of the Company set forth under "-- Executive Compensation" and (iii) the trust managers and executive officers of the Company as a group:
SERVED AS TRUST AMOUNT AND MANAGER NATURE OF PERCENT NAME AGE SINCE BENEFICIAL OWNERSHIP OF CLASS ---- --- --------- -------------------- -------- Stanford Alexander(1)............... 66 1956 2,022,577(4) 7.7% Andrew M. Alexander................. 38 1983 601,522(5) 2.3% Martin Debrovner(1)................. 58 1976 120,253(6) * Melvin A. Dow(2)(3)................. 67 1984 522,443(7) 2.0% Stephen A. Lasher(1)(3)............. 46 1980 525,102(8) 2.0% Joseph W. Robertson, Jr. ........... 47 1978 116,850(9) * Douglas W. Schnitzer................ 38 1984 630,280(10) 2.4% Marc J. Shapiro(2)(3)............... 47 1985 11,500(11) * J. T. Trotter(2).................... 68 1985 1,000 * Gary Cunningham(12)................. 45 22,442(13) * All trust managers and executive officers as a group (17 persons)... 4,184,082(14) 15.9%
- -------- * Beneficial ownership of less than 1% of the class is omitted. (1) Member of Executive Committee. (2) Member of Audit Committee. (3) Member of Executive Compensation Committee. (Notes continued on following page) 3 (4) See note (1) to the table on page 2 for information with respect to Mr. Alexander's beneficial ownership of such shares. (5) Includes the 296,675 shares described in note (1) to the table on page 2 for which voting and investment power are shared with Stanford Alexander and Melvin A Dow; 5,400 shares subject to restrictions on transfer for which Mr. Alexander has the right to vote and 18,000 shares that may be purchased by Mr. Alexander upon the exercise of Share options that are currently exercisable or that will become exercisable within 60 days of the date for which beneficial ownership is provided in the table. (6) Includes 26,878 shares held in trust for the benefit of Mr. Debrovner's children for which he exercises voting power. Also includes 11,500 shares subject to restrictions on transfer for which Mr. Debrovner has the right to vote and 21,000 shares that may be purchased upon the exercise of Share options that are currently exercisable or that will become exercisable within 60 days of the date for which beneficial ownership is provided in the table. (7) Includes the 296,675 shares described in note (1) to the table on page 2 for which voting and investment power are shared with Andrew M. Alexander and Stanford Alexander and 20,166 shares held in trusts for the benefit of children of Stanford Alexander, for which Mr. Dow is the trustee. (8) Includes 57,785 shares held by trusts for the benefit of Mr. Lasher's children for which Mr. Lasher exercises voting power. (9) Includes 7,100 shares subject to restrictions on transfer for which Mr. Robertson has the right to vote and 12,000 shares that may be purchased upon the exercise of share options that are currently exercisable or that will become exercisable within 60 days of the date for which beneficial ownership is provided in the table. (10) Voting and investment power are shared with Joan Weingarten Schnitzer under trusts for Joan Weingarten Schnitzer with respect to all such shares. (11) Includes 2,600 shares owned by Mr. Shapiro's children for which he disclaims beneficial ownership because he holds no custodial authority with respect to such shares. (12) Mr. Cunningham is an executive officer of the Company and not a member of the Board of Trust Managers. (13) Includes 3,550 shares subject to restrictions on transfer for which Mr. Cunningham has the right to vote and 12,000 shares that may be purchased upon the exercise of share options that are currently exercisable or that will become exercisable within 60 days of the date for which beneficial ownership is provided in the table. (14) Includes 152,100 shares that may be purchased upon the exercise of share options that are currently exercisable or that will become exercisable within 60 days of the date for which beneficial ownership is provided in the table. 4 Set forth below is certain biographical information with respect to the business experience of the nine nominees to serve as the Company's trust managers for at least the last five years. Mr. Stanford Alexander is the Company's Chairman and its Chief Executive Officer. He has been employed by the Company since 1955 and has served in his present capacity since January 1, 1993. Prior to becoming Chairman, Mr. Alexander served as President and Chief Executive Officer of the Company since 1962. Mr. Alexander is President, Chief Executive Officer and a trust manager of Weingarten Properties Trust and a member of the Houston Regional Advisory Board of Texas Commerce Bank National Association, Houston, Texas ("TCB"). Mr. Andrew Alexander became Executive Vice President/Asset Management of the Company on January 1, 1993. Prior to his present position, Mr. Alexander was Senior Vice President/Asset Management of Weingarten Realty Management Company (the "Management Company"). Prior to such time, Mr. Alexander was Vice President of the Management Company and, prior to the Company's reorganization in December 1984, was Vice President and an employee of the Company since 1978. Mr. Alexander has been primarily involved with leasing operations at both the Company and the Management Company. Mr. Alexander is also a trust manager of Weingarten Properties Trust and a director of Charter Bank Houston, N.A. Mr. Debrovner became President and Chief Operating Officer of the Company on January 1, 1993. Prior to assuming such position, Mr. Debrovner served as President of the Management Company since the Company's reorganization in December 1984. Prior to such time, Mr. Debrovner was an employee of the Company for 17 years, holding the positions of Senior Vice President from 1980 until March 1984, and Executive Vice President until December 1984. As Executive Vice President, Mr. Debrovner was generally responsible for the Company's operations. Mr. Debrovner is also a trust manager of Weingarten Properties Trust. Mr. Dow has been engaged in the private practice of law and was named Chairman/CEO in January 1995 of Dow Cogburn & Friedman, P.C. Prior to assuming such position, Mr. Dow served as President and was a partner of the predecessor Houston law firm of Dow, Cogburn & Friedman since 1954. Mr. Dow is also a trust manager of Weingarten Properties Trust. Mr. Lasher has been President of The GulfStar Group, Inc., an investment banking firm since January 1991. Prior to such time, he was Executive Vice President and Managing Director of Corporate Finance of Rotan Mosle Inc., an investment banking firm headquartered in Houston, for more than the last five years. Mr. Lasher is also a trust manager of Weingarten Properties Trust, a director of American Oilfield Divers, Inc. and Conservatek, Inc. Mr. Robertson is Executive Vice President of the Company and its Chief Financial Officer. Prior to becoming Executive Vice President, Mr. Robertson served as Senior Vice President and Chief Financial Officer since 1980. He has been with the Company since 1971. Mr. Robertson is also a trust manager of Weingarten Properties Trust and a director of PaineWebber Retail Properties Investments, Inc. 5 Mr. Douglas Schnitzer is Chairman/CEO of Senterra Development Corp., a commercial real estate development and management company headquartered in Houston. Mr. Schnitzer served as President and Chief Executive Officer of Senterra Development from August 1989 until December 1994. Prior to such time, he served as Senior Vice President/General Marketing & U.S.C.B of Century Development Corporation for more than the last five years. Mr. Shapiro has served as Chairman, President and Chief Executive Officer of TCB since January 1994. Prior to such time, he served as President and Chief Executive Officer of TCB since December 1989 and Chairman and Chief Executive Officer of TCB since 1987. Mr. Shapiro is also currently an executive officer of Chemical Banking Corporation. From 1982 to 1989, Mr. Shapiro served as Vice Chairman and Chief Financial Officer of TCB. Mr. Shapiro is also a director of Sante Fe Energy Resources, Inc. and Browning-Ferris Industries. Mr. Trotter has been a private investor for more than the last five years. Mr. Trotter is a director of Houston Industries, Inc., Houston Lighting & Power Company, Zapata Corporation, Howell Corporation, First Interstate Bank of Texas, N.A., Continental Airlines, Inc. and King Ranch, Inc. Andrew M. Alexander is the son of Stanford Alexander. Stephen A. Lasher is a first cousin of Douglas W. Schnitzer, a first cousin once-removed of Stanford Alexander and a second cousin of Andrew M. Alexander. Douglas W. Schnitzer is a first cousin once-removed of Stanford Alexander and a second cousin of Andrew M. Alexander. Martin Debrovner is a first cousin of Mrs. Stanford (Joan) Alexander. BOARD COMMITTEES AND MEETINGS The Board of Trust Managers of the Company met five times in 1994. During 1994, each trust manager attended at least 75 percent of the aggregate of (a) the total number of meetings of the Board of Trust Managers and (b) the total number of meetings held by any committee of the Board on which he served. The Company's Board of Trust Managers has standing Executive, Audit and Executive Compensation Committees. The Board of Trust Managers does not have a nominating committee. Executive Committee. The Executive Committee is comprised of Messrs. S. Alexander, Debrovner and Lasher. Pursuant to the Company's bylaws, the Executive Committee shall have such authority and powers as may from time to time be delegated thereto by the Board of Trust Managers. The Executive Committee has been granted the authority to acquire and dispose of real property up to $25,000,000 in value and has the power to authorize, on behalf of the full Board, the execution of certain contracts and agreements, including those related to the borrowing of money by the Company. The Executive Committee did not meet during 1994. Audit Committee. The Audit Committee is composed of three independent trust managers, Messrs. Dow, Shapiro and Trotter. The Audit Committee was established to make recommendations concerning the engagement of independent public accountants, to review with the independent public accountants the plans for and results of the audit engagement, to approve professional services provided by the independent public accountants, to review the independence of the independent public accountants, to consider the range of audit and non-audit fees and to review the adequacy of the Company's internal accounting controls. The Audit Committee met twice during 1994. 6 Executive Compensation Committee. The Executive Compensation Committee, also composed of independent trust managers, is responsible for determining compensation for the Company's executive officers, in addition to administering the Company's 1988 Share Option Plan (the "1988 Plan") and the 1993 Incentive Share Plan (the "1993 Plan"). During 1994, the Executive Compensation Committee consisted of Messrs. Dow, Lasher and Shapiro. The Executive Compensation Committee met twice in 1994. COMPENSATION OF TRUST MANAGERS During the year ended December 31, 1994, fees paid to all the Company's trust managers as a group aggregated $38,750. Company trust managers received $2,500 annually, $1,000 for each Board meeting attended and $500 for each committee meeting attended. Employees of the Company are not paid any trust manager fees. No member of the Board of Trust Managers of the Company was paid any compensation in 1994 for his service as a trust manager of the Company other than pursuant to the standard compensation arrangement for trust managers. REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE ON ANNUAL COMPENSATION OF EXECUTIVE OFFICERS The Executive Compensation Committee of the Board of Trust Managers (the "Compensation Committee"), which is entirely comprised of independent outside directors, is responsible for evaluating and establishing the level of executive compensation and administering the Company's share option plans. COMPENSATION PHILOSOPHY AND OBJECTIVES It is the philosophy of the Compensation Committee and the Company that in order to achieve continual growth and financial success, the Company must be able to attract and retain qualified executives. In order to achieve its objective, the Company has structured an incentive based compensation system tied to the Company's financial performance and portfolio growth. Where material and supportive of the Company's compensation philosophy, the Company will attempt to maximize the amount of compensation expense that is tax deductible. Each year, the Compensation Committee reviews the Company's compensation program to insure that pay levels and incentive opportunities are competitive and reflect the performance of the Company. The executive compensation system is basically comprised of base salary, bonus compensation, share options/grants and restricted shares. The Company's annual executive compensation package, including that of the Chief Executive Officer ("CEO") and the Chief Operating Officer ("COO"), generally has lower base salaries than comparable companies coupled with a leveraged incentive bonus system which will pay more with good performance and less with performance that is below expectation. Generally, the CEO's and COO's bonus is within 25% to 50% of the entire cash compensation (salary and bonus), depending on the size of the incentive bonus awarded. BASE SALARY Base salary levels for executive officers are largely derived through an evaluation of the responsibilities of the position held and the experience of the particular individuals both compared to companies of similar 7 size, complexity and, where comparable, in the same industry. The determination of comparable companies was based upon selections made by both the Company, as to comparable companies in the real estate industry, and by independent compensation consultants, as to other comparable companies. Not all companies included in the National Association of Real Estate Investment Trust's ("NAREIT") All Equity Index described on page 10 are comparable in size and complexity, and not all comparable real estate companies are real estate investment trusts. Actual salaries are based on the executive's skill and ability to influence the Company's financial performance and growth in both the short-term and long-term. During 1994, the Compensation Committee used salary survey data supplied by the Wyatt Report and Ferguson Partners Ltd., outside consultants, in establishing base salaries. The executive officers' salaries, including that of the CEO and COO, were generally set at the mid range of the survey data. BONUS COMPENSATION All the Company's executive officers, except Mr. Cunningham, participate in a bonus program whereby the individual is eligible for a bonus based on a percent of the individual's base salary. This bonus program has been in effect for more than 15 years. The bonus percentage is also based on competitive analysis. Again, the executive's ability to influence the Company's success is considered in establishing this percentage. Earned bonuses are determined annually on the basis of performance against pre-established goals. Other than for the CEO and COO, the eligible bonus percentage is allocated 50% to the Company's goals and 50% to the individual's goals. Specific individual goals for each officer are established at the beginning of the year and are tied to the functional responsibilities of each executive. Individual goals include both objective financial measures as well as such subjective factors as efficiency in managing capital resources, successful acquisitions, good investor relations and the continued development of management. The Company's goals are primarily based on operating performance, as measured by factors such as the Company's funds from operations, and achieving the appropriate growth objective, relating primarily to portfolio acquisitions and new development. Other than the allocation between individual and Company goals, no specific weights are assigned to the individual goals. The bonus of both the CEO and COO is based entirely on the Company's performance. The individual and Company performance targets were met in fiscal 1994 and consequently the executives were eligible for full bonus awards. Mr. Cunningham, as Vice President of New Development and Acquisitions, does not participate in the regular bonus program. His incentive compensation is directly tied to the achievement of the return on investment on the Company's new developments and acquisitions in which he is involved. The Company does not establish specific new development or acquisition goals for Mr. Cunningham. SHARE INCENTIVE PROGRAM The Compensation Committee strongly believes that by providing the executives who have substantial responsibility for the management and growth of the Company with an opportunity to increase their ownership of Common Shares of the Company, the best interests of shareholders and executives will be closely aligned. Therefore, executives are eligible to receive share options from time to time, giving them the right to purchase Common Shares of the Company. The number of options granted to an executive is based on practices of the same comparable companies used to derive base salary levels. Share options historically 8 have not been a consistently utilized element of the Company's executive compensation system and the Company does not adhere to any firmly established formulas or schedules for the issuance of options, but options are awarded when considered appropriate. In 1994, the Compensation Committee granted 62,900 restricted shares to the executive officers and 428,100 share options to officers and management personnel of the Company. The restricted shares vest ratably over ten years with the options vesting 20% annually starting in the fourth year. CEO PERFORMANCE EVALUATION For 1994, the Compensation Committee evaluated the CEO's performance based on the Company's financial performance and its growth in real estate assets. The Company achieved its funds from operations objective and achieved its goals for its acquisition and new development programs by adding 1.2 million square feet of income-producing properties to the portfolio with returns in excess of 11%. Mr. S. Alexander received 100% of his potential bonus based on the Company exceeding its corporate goals and objectives for 1994. Mr. Alexander's compensation is awarded by the Compensation Committee without reference to any specific performance factor or component (i.e. base salary, bonus compensation, and the share incentive program). The report of the Compensation Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts. The foregoing report is given by the following members of the Compensation Committee: MELVIN A. DOW STEPHEN A. LASHER MARC SHAPIRO 9 PERFORMANCE GRAPH The following performance graph compares the performance of the Company's Common Shares to the S&P 500 Index and to the published NAREIT All Equity Index. The graph assumes that the value of the investment in the Company's Common Shares and each index was 100 at December 31, 1989 and that all dividends were reinvested. The Company will provide upon request the names of the companies included in the NAREIT All Equity Index. COMPARISON OF FIVE-YEAR CUMULATIVE RETURN [PASTEUP GRAPH]
1989 1990 1991 1992 1993 1994 - ----------------------------------------------------------------------------------------- WRI 100 84 119 141 152 163 - ----------------------------------------------------------------------------------------- S&P 500 Index 100 97 126 136 150 152 - ----------------------------------------------------------------------------------------- NAREIT All Equity Index 100 85 115 132 157 162
The foregoing price performance comparisons shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or under the Exchange Act, except to the extent that the Company specifically incorporates this graph by reference, and shall not otherwise be deemed filed under such acts. There can be no assurance that the Company's share performance will continue into the future with the same or similar trends depicted in the graph above. The Company will not make or endorse any predictions as to future share performance. 10 EXECUTIVE COMPENSATION The following table lists, for each of the three years ended December 31, 1994, cash compensation paid to each of the Company's executive officers. SUMMARY COMPENSATION TABLE
LONG TERM ANNUAL COMPENSATION COMPENSATION AWARDS ------------------------------ ------------------------ SECURITIES OTHER ANNUAL RESTRICTED UNDERLYING SALARY BONUS COMPENSATION STOCK OPTIONS/SAR'S ALL OTHER NAME YEAR ($) ($) ($)(1) AWARDS ($) (#)(2) COMPENSATION ---- ---- ------ ----- ------------ ---------- ------------- ------------ Stanford Alexander, 1994 $470,000 $235,000 $322,430 $666,000 120,000 $13,598(3) Chairman and Chief 1993 440,000 220,000 138,500 14,000 Executive Officer 1992 316,500 316,500 59,079 25,000 9,822 Martin Debrovner, 1994 342,400 120,300 201,519 425,500 80,000 134,450(5) President and Chief 1993 320,000 110,400 86,564 54,631 Operating Officer(4) Joseph W. Robertson, Jr. 1994 265,000 67,500 161,215 262,700 50,000 45,779(6) Executive Vice President 1993 250,000 75,000 69,250 32,062 and Chief Financial Officer 1992 228,200 138,788 29,540 18,000 34,235 Andrew M. Alexander, 1994 203,000 51,000 120,911 199,800 38,000 30,474(7) Executive Vice President/ 1993 190,000 47,500 51,938 16,360 Asset Management(4) Gary Cunningham, 1994 150,000 75,400 131,350 25,000 26,100(8) Vice President/New 1993 96,700 136,300 31,903 Development and Acquisitions
- -------- (1) The values shown represent amounts for federal income tax "gross-ups" for the share awards granted and reported for prior periods. (2) No SARs were granted during 1992, 1993 or 1994. (3) Includes $8,978 of premiums paid by the Company under "split dollar" life insurance agreements and $4,620 for the Company's contributions to the Company's 401(k) Savings and Investment Plan (the "Savings Plan") on behalf of Mr. S. Alexander. (4) Became an employee and officer of the Company effective January 1, 1993. (5) Includes $2,452 of premiums paid by the Company under "split dollar" life insurance agreements, $4,620 for the Company's contributions to the Company's Savings Plan on behalf of Mr. Debrovner, and $127,378 contributed to the Company's Supplemental Retirement Plan. (6) Includes $4,620 for the Company's contributions to the Company's Savings Plan on behalf on Mr. Robertson, and $41,159 contributed to the Company's Supplemental Retirement Plan. (7) Includes $4,620 for the Company's contributions to the Company's Savings Plan on behalf of Mr. A. Alexander and $25,854 contributed to the Company's Supplemental Retirement Plan. (8) Includes $4,620 for the Company's contributions to the Company's Savings Plan on behalf of Mr. Cunningham and $21,480 contributed to the Company's Supplemental Retirement Plan. 11 SHARE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES Shown below is information for the indicated persons with respect to the options exercised during 1994 and the unexercised options to purchase the Company's Common Shares granted during 1994 and prior years under the Share Option Plan and the 1993 Plan.
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED OPTIONS HELD AT IN-THE-MONEY OPTIONS AT SHARES DECEMBER 31, 1994(#) DECEMBER 31, 1994 ACQUIRED ON VALUE ------------------------- ------------------------- NAME EXERCISE(#) RECEIVED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ----------- -------- ----------- ------------- ----------- ------------- Stanford Alexander...... -- -- 16,666 128,334 $114,662 $162,938 Martin Debrovner........ -- -- 14,000 87,000 96,320 118,560 Joseph W. Robertson, Jr..................... -- -- 12,000 56,000 82,560 85,289 Andrew M. Alexander..... -- -- 12,000 44,000 82,560 74,720 Gary Cunningham......... -- -- 10,000 27,000 104,800 35,760
PENSION PLAN The following table shows the approximate annual retirement benefits under the Company's non-contributory pension plan (the "Pension Plan") (before the reduction made for social security benefits) to eligible employees in specified compensation and years of service categories, assuming retirement occurs at age 65 and that benefits are payable only during the employee's lifetime. Benefits are not actuarially reduced, where survivorship benefits are provided.
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT - ----------------------------------------------------------------------- YEARS OF SERVICE AVERAGE --------------------------------------------------------- COMPENSATION 15 20 25 30 35 40 - ------------ -------- -------- -------- -------- -------- -------- $125,000 $ 28,125 $ 37,500 $ 46,875 $ 56,250 $ 65,625 $ 75,000 150,000 33,750 45,000 56,250 67,500 78,750 90,000 175,000** 39,375 52,500 65,625 78,750 91,875 150,000 200,000** 45,000 60,000 75,000 90,000 105,000 120,000* 225,000** 50,625 67,500 84,375 101,250 118,125 135,000* 250,000** 56,250 75,000 93,750 112,500 131,250* 150,000* 300,000** 67,500 90,000 112,500 135,000* 157,500* 180,000* 400,000** 90,000 120,000* 150,000* 180,000* 210,000* 240,000* 450,000** 101,250 135,000* 168,750* 202,500* 236,250* 270,000* 500,000** 112,500 150,000* 187,500* 225,000* 262,500* 300,000*
- -------- * The maximum annual pension benefit which currently may be paid under a qualified plan is $118,800 subject to certain grandfather rules for limitation years beginning in 1994. ** Compensation in excess of $150,000 is disregarded with respect to plan years beginning in 1994. Accordingly, the compensation of each executive officer included in the Summary Compensation Table on page 11 which was covered by the Pension Plan was limited to $150,000. 12 The compensation used in computing average monthly compensation is the total of all amounts paid by the Company as shown on the employee's W-2 Form, plus amounts electively deferred by the employee under the Savings Plan and (S)125 cafeteria plan. Compensation in excess of $150,000 is disregarded. Credited years of service for certain employees of the Company as of March 3, 1995, are as follows: Mr. S. Alexander, 41 years; Mr. Debrovner, 27 years; Mr. Robertson, 23 years; Mr. A. Alexander, 17 years; and Mr. Cunningham, 8 years. The Pension Plan covers all employees who are age 21 or over, with at least one year of employment with the Company except leased employees, employees covered by a collective bargaining agreement and employees whose regular place of employment is in New Mexico. The Pension Plan pays benefits to an employee in the event of death, disability, retirement, or other termination of employment after the employee meets certain vesting requirements (generally, 20% vesting after two years of service and an additional 20% vesting each year thereafter until 100% vested). Under the Pension Plan, the amount of the monthly retirement benefit payable beginning at age 65, the normal retirement age, is equal to (i) 1.5% of average monthly compensation during five consecutive years, within the last ten years, which would yield the highest average monthly compensation multiplied by years of service rendered after age 21 (not in excess of 40 years), minus (ii) 1.5% of the monthly social security benefits in effect on the date of retirement multiplied by years of service rendered after age 21 and after July 1, 1976 (not in excess of 33.3 years). PROPOSAL 2 RATIFICATION OF THE APPOINTMENT OF AUDITORS The Board of Trust Managers has unanimously approved and urges you to vote "FOR" approval of this Proposal 2. Proxies solicited hereby will be so voted unless the shareholders specify otherwise in their proxies. The affirmative vote of the holders of a majority of the Common Shares present in person or by proxy at the Annual Meeting of Shareholders and entitled to vote is required for approval of this proposal. The Board of Trust Managers has appointed, and recommends the ratification of Deloitte & Touche llp as auditors for the Company for the year ending December 31, 1995. This firm, or its predecessors, has served in such capacity for the Company for more than 30 years and is familiar with the Company's affairs and financial procedures. Ratification of their appointment as auditors for the year ended December 31, 1994 was approved by the shareholders at the Company's last Annual Meeting of Shareholders. Representatives of Deloitte & Touche llp are expected to be present at the Annual Meeting of Shareholders and will have an opportunity to make a statement, if they desire to do so, and to respond to appropriate questions from those attending the meeting. 13 PROPOSAL 3 AMENDMENT OF THE WEINGARTEN REALTY 1988 SHARE OPTION PLAN The Company has established, and the shareholders have previously approved, the Weingarten Realty Investors 1988 Share Option Plan (the "1988 Plan"). An amendment to the 1988 Plan increasing the number of Common Shares available under the plan from 290,810 to 500,000 was approved by the shareholders on April 9, 1992. The Company has further amended, subject to shareholder approval, the 1988 Plan to increase the number of Common Shares available thereunder from 500,000 to 700,000. The Board of Trust Managers has unanimously approved and urges you to vote "FOR" the approval of a second amendment to the 1988 Plan. The Board of Trust Managers believes that the Company's long term success is dependent upon the ability of the Company to attract and retain outstanding individuals who, by virtue of their ability and qualifications, make important contributions the Company. The second amendment to the 1988 Plan will enable the Company to continue in its ability to provide key employees with meaningful awards and incentives commensurate with their contributions and competitive with those offered by other employers. Proxies solicited hereby will be voted in favor of this Proposal 3 unless the shareholders specify otherwise in their proxies. The favorable vote of the holders of a majority of the outstanding Common Shares present in person or by proxy at the Annual Meeting of Shareholders is required for adoption of this proposal. The 1988 Plan allows the grant of options and share grants and provides for a termination date of December 31, 1997. The number of Common Shares that may be issued pursuant to the exercise of options and share grants granted under the 1988 Plan is subject to certain adjustments to prevent dilution. The terms of the 1988 Plan are described below, and the 1988 Plan, including the proposed amendment, is set forth in its entirety as Appendix A hereto. Options and share grants may be granted under the 1988 Plan only to full time employees of the Company and it Affiliates (as defined in the 1988 Plan) who, in the opinion of the Executive Compensation Committee, have substantial executive or administrative responsibility in the management or development of the business of the Company. Share options granted under the 1988 Plan may be either Incentive Stock Options ("ISOs") under the provisions of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or Nonqualified Stock Options ("NSOs"). The 1988 Plan is administered by the Company's Executive Compensation Committee, which, under the terms of the 1988 Plan, must consist of disinterested persons within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended. The Executive Compensation Committee has complete discretion in determining the key executives and employees of the Company and its Affiliates who shall receive share options and/or share grants and the number of such options and/or shares to be granted. The 1988 Plan provides that, in making grants, the Executive Compensation Committee shall take into consideration the contribution the employee has made or may make to the success of the Company and such other factors as the Executive Compensation Committee shall determine. The exercise price of the share options must be at least 100% of the fair market value of the Common Shares on the date of grant. The Executive Compensation Committee also has the discretion to grant a share appreciation right ("SAR") in tandem with any option granted under the 1988 Plan, or after the date of grant, to amend any 14 NSO to include an SAR. An SAR entitles an optionee to surrender an unexercised option to the Company and to receive in exchange therefor the number of Common Shares having an aggregate value equal to the excess of the fair market value of one Common Share on the date of exercise over the purchase price per Common Share specified in such option, times the number of Common Shares called for by the option (or portion thereof) surrendered. In addition, the Executive Compensation Committee may elect to settle the Company's obligation with respect to the exercise of an SAR by the payment of cash equal to the aggregate fair market value of the Common Shares it would otherwise be obligated to give. Any such SAR is subject to such terms and conditions, not inconsistent with the 1988 Plan, as the Executive Compensation Committee may impose. Any SAR granted under the 1988 Plan is only exercisable to the extent that the related option is exercisable. Further, an SAR is only exercisable upon a showing of hardship by the optionee and upon consent of the Executive Compensation Committee. Because of the hardship requirement and the consent required from the Executive Compensation Committee with respect to the exercise of a tandem SAR, the Company will not, at the time of grant, have to recognize as compensation expense the value of the SAR for financial reporting purposes. Share grants made pursuant to the 1988 Plan may be subject to a vesting period as set at the time of grant. All share grants made to date vest over a four year period. All share options expire ten years from the date of grant, or upon an optionee's termination of employment with the Company or an Affiliate for any reason other than death, except that the Executive Compensation Committee may, in its discretion, grant an option which permits the exercise after the optionee's retirement. Upon an optionee's termination of employment by reason of death, the optionee's options, to the extent then exercisable, may be exercised for a period of one year after the date of the optionee's death, but no more than ten years after the date an option was granted. The 1988 Plan permits the Company to allow an optionee, upon exercise of an option, to satisfy any applicable federal income tax requirements in the form of either cash or Common Shares, including Common Shares issuable upon exercise of such option. Pursuant to the discretion given to the Executive Compensation Committee to impose conditions upon options granted under the 1988 Plan, all options granted to date under the 1988 Plan are exercisable to the extent of one-third of the option shares after the expiration of one year from the date of grant, two- thirds after the expiration of two years and in full after the expiration of three years. Further, options may be exercised only after one year of continuous employment with the Company. The Board of Trust Managers of the Company may amend the 1988 Plan at any time, except that any amendment that affects the aggregate number of Common Shares that may be issued under share options granted pursuant to the 1988 Plan or the material terms of the share options granted pursuant to the 1988 Plan, would require shareholder approval. Unless previously terminated by the Board of Trust Managers, the 1988 Plan will terminate on December 31, 1997. Federal Income Taxes. As a general rule, no income will be recognized by an employee upon the grant of either ISOs or NSOs. Upon the exercise of an NSO, the employee will be treated as receiving compensation 15 income in an amount equal to the excess of the fair market value of the Common Shares at the time of exercise over the option price paid for the Common Shares, and the Company may claim a deduction for compensation paid in the same amount and at the same time as compensation is taxable to the employee, provided the Company makes the proper tax withholding with respect to the exercise by an employee and the amount of such compensation income is reasonable under the Code. Upon a subsequent disposition of the Common Shares, any difference between the fair market value of the Common Shares at the time of exercise and the amount realized on the disposition would be eligible for treatment as long-term capital gain or loss if the Common Shares were held for more than twelve months. The exercise of an ISO, on the other hand, does not subject the optionee to federal income tax; however, the "spread" upon the exercise of an ISO is an item of adjustment for purposes of the alternative minimum tax. If the optionee holds the Common Shares received upon the exercise of an ISO for the requisite holding period, gain on the disposition of such Common Shares is treated as long-term capital gain. If a disposition of such Common Share is made in a taxable transaction before expiration of the holding period, a portion of the gain on disposition will be treated as ordinary income and the balance as long-term or short-term capital gain, depending on the length of time the Common Shares were held. The Company is allowed a deduction in the year of disposition of Common Shares received upon exercise of an ISO only to the extent the amount of any gain is taxable to the optionee as ordinary income. An optionee who receives an SAR will not recognize any taxable income upon receipt of the SAR, but upon exercise of the SAR, the fair market value of the Common Shares (or the cash in lieu of Common Shares) received must be treated as ordinary income by the optionee for that year. Under such circumstances, the Company will, in general, be entitled to a deduction equal to the amount taxable to the optionee as ordinary income as described above with respect to NSOs. If the optionee receives Common Shares upon the exercise of an SAR and thereafter disposes of such Common Shares in a taxable transaction, the difference between any amount realized on such disposition and the amount treated as ordinary income upon the exercise of the SAR will be treated as a capital gain or loss (provided the Common Shares were held as a capital asset on the date of disposition), which will be a long or short-term capital gain or loss depending on the holding period of the Common Shares. In general, no income will be recognized by an employee upon the receipt of a share grant. Upon the date that Shares granted become either transferable by the employee or no longer subject to a substantial risk of forfeiture, the employee will be treated as receiving compensation income in an amount equal to the then fair market value of the Shares, and the Company will be entitled to a deduction in the same amount, provided that it makes the proper tax withholding and the amount is reasonable compensation under the Code. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The members of the Company's Compensation Committee are Messrs. Dow, Lasher and Shapiro. Mr. Shapiro, an executive officer and director of TCB, serves on the Compensation Committee. The Company and certain of its joint ventures are depositors with TCB. Additionally, the Company has entered into a $150 million syndicated revolving credit agreement of which TCB participates in an amount of $110 million and is 16 the agent for the syndication. As of December 31, 1994, $145 million was outstanding under such agreement. From time to time, the Company has made short-term borrowings from independent third parties which were arranged through TCB. The principal amount of such borrowings, which did not exceed $52.4 million during 1994, was secured by government-backed securities owned by the Company. TCB is also the trustee under the grantor trust, which holds certain employee deferred compensation funds. Weingarten Properties Trust ("WPT"), a Texas real estate investment trust that owns five shopping centers and also currently qualifies as a REIT, shares certain common officers and/or Board members with the Company. Messrs. S. Alexander, Debrovner, Dow, Lasher, Robertson, A. Alexander and Cunningham are officers and/or directors of WPT. During 1994, the Company borrowed funds from WPT pursuant to a short-term unsecured note for short-term investment of WPT's excess cash. Interest on funds advanced from WPT to the Company accrues at the 30-day certificate of deposit rate and ranged from 2.7% to 4.0% during 1994. The largest amount owed by the Company during 1994 was $.7 million. As of December 31, 1994, the Company owed WPT $.7 million. During 1994, the Company paid WPT $9,352 in interest on the funds advanced. The Company currently owns 76% of the outstanding common stock of WPT. The Company may, in the future, attempt to acquire the remaining stock ownership of WPT through negotiated or open market purchase or by means of a tender offer or a business combination. The Company also contracts to manage the day-to-day business and properties of WPT. WPT paid the Company approximately $.2 million during 1994 for the management of its properties and the operation of its business. Messrs. S. Alexander, A. Alexander, Debrovner, Dow, Lasher and Schnitzer are shareholders and officers and/or directors of WRI Holdings, Inc., a Texas corporation ("Holdings"). In December 1984, the Company contributed certain assets and cash to Holdings in exchange for, among other consideration, $26.8 million original principal amount of debt securities (the "Holdings Debt Securities") and common stock of Holdings. The assets contributed by the Company to Holdings included unimproved land in the Railwood Industrial Park in northeast Houston ("Railwood"), and all of the issued and outstanding capital stock of Plaza Construction, Inc. ("Plaza") and Leisure Dynamics, Inc. ("Leisure Dynamics"). The Holdings Debt Securities were issued pursuant to three separate trust indentures and originally consisted of $16.7 million principal amount of debt securities (the "Hospitality Bonds") due December 28, 2004, $7.0 million principal amount of debt securities (the "Railwood Bonds") due December 28, 2004 and $3.2 million principal amount of debt securities (the "Plaza Bonds") due December 28, 1994. The Plaza Bonds were extended and are currently due December 28, 1995. Interest must be paid on the outstanding principal amount of the Hospitality Bonds at a rate equal to the greater of 16% per annum or 11% of Holdings' pro rata share of the gross revenues per year from eight hotels currently owned by the Hospitality Ventures, but not more than 18%, the maximum lawful rate in Texas applicable to the Hospitality Bonds. The Hospitality Bonds were structured so that the Company would, under certain circumstances, receive interest income based on the revenues of the Hospitality Ventures. As of March 3, 1995, $16.0 million remained owing under the Hospitality Bonds. 17 As of March 3, 1995, the outstanding principal amount owing on the Railwood Bonds and the Plaza Bonds were $6.2 million and $3.2 million, respectively. Interest on both bonds accrues at the rate of 16% per annum (the "accrual rate"), but is due and payable quarterly at the rate of 10% per annum (the "pay rate"). The difference between the accrual rate and the amount of interest paid by Holdings at the pay rate on such debt securities is treated as unpaid accrued interest, which will not accrue any compound interest and is payable with the principal at maturity. The Company recognizes as interest income only the amount actually received at the pay rate. Therefore, the Company does not carry the difference between the accrual rate and the pay rate as an asset on the Company's Consolidated Balance Sheet. Such nonrecognized accrued interest outstanding as of December 31, 1994 under the Railwood and Plaza Bonds was $4.1 million and $1.9 million, respectively. Pursuant to a loan agreement between Holdings and the Company and pursuant to a note, dated December 28, 1984, as amended in October 1987, January 1991 and March 1994 (the "Accrual Note"), Holdings may borrow from the Company the amount necessary, up to a maximum of $20 million, to enable Holdings to pay the interest owing on the Holdings Debt Securities. Interest on the Accrual Note will accrue at the highest rate per annum permitted by Texas law as to a portion of the debt and at the TCB prime rate plus 2% per annum (but not in excess of the maximum legal rate) as to the balance of the debt. The Accrual Note is payable December 28, 2004. As of December 31, 1994, $17.8 million was outstanding under the Accrual Note, which represents the difference between the amount recognized as interest income on the Holdings Debt Securities and the pay rate applicable to such bonds, i.e., the Company did not recognize as income that portion of the pay rate interest received by the Company which had been borrowed by Holdings under the Accrual Note. In November 1982, the Company entered into a loan agreement (the "River Pointe Loan Agreement"), which was amended effective December 1, 1991, with River Pointe Venture I, a joint venture in which Plaza was a joint venture partner until October 1987, at which time Plaza acquired all the joint venture interest in such venture owned by the other joint venture partner and became the successor of such joint venture under the River Pointe Loan Agreement. Under the terms of the River Pointe Loan Agreement, the Company may lend Plaza up to $12 million for construction and development of River Pointe. Interest accrues at the prime rate plus 1%, but not in excess of the maximum rate permitted by law, and payment of the outstanding principal balance is due December 1, 1995. As of December 31, 1994, the principal amount outstanding under the River Pointe Loan Agreement was $10.6 million plus accrued interest of $4.8 million. Mr. Dow, president and a shareholder of Dow, Cogburn, & Friedman, P.C., serves on the Compensation Committee. During the year ended December 31, 1994, the Company and certain of the joint ventures in which the Company was a venturer paid such law firm $.8 million for certain legal services. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Section 16(a) of the Exchange Act requires the Company's officers, trust managers, and persons who own more than 10 percent of the Company's Common Shares, to file initial reports of ownership and reports of changes in ownership (Forms 3, 4 and 5) of Common Shares with the Securities and Exchange Commission 18 ("SEC") and the New York Stock Exchange. Officers, trust managers and greater than 10 percent holders are required by SEC regulation to furnish the Company with copies of all such forms that they file. To the Company's knowledge, based solely on the Company's review of the copies of such reports received by the Company and written representations that no Form 5s were required, the Company believes that during the fiscal year ended December 31, 1994, all Section 16(a) filing requirements applicable to its officers, trust managers and greater than 10 percent beneficial owners were complied with, except that Mr. Robertson, an executive officer of the Company, made a late filing for a Form 4 which reported purchases in 1991 and 1993 through an IRA totaling 307 shares, Mr. Jeffrey Tucker, an executive officer of the Company, failed to timely report the purchase of 100 shares through his IRA and Mr. Lasher, a trust manager of the Company, made a late filing for a Form 3 relating to a personal trust. SHAREHOLDER PROPOSALS Shareholder proposals to be presented at the next Annual Meeting of Shareholders must be in writing and received at the Company's principal executive office by the Company's Secretary no later than November 24, 1995, in order to be included in the next year's proxy statement. OTHER BUSINESS The trust mangers of the Company know of no matters expected to be presented at the Annual Meeting of Shareholders other than those described above; however, if other matters are properly presented to the meeting for action, it is intended that the persons named in the accompanying form of proxy, and acting thereunder, will vote in accordance with their best judgment on such matters. FORM 10-K REPORT UPON THE WRITTEN REQUEST OF EACH SHAREHOLDER SOLICITED HEREBY, ADDRESSED TO THE COMPANY, ATTENTION: M. CANDACE DUFOUR, SECRETARY, 2600 CITADEL PLAZA DRIVE, HOUSTON, TEXAS 77008, THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 13A-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934 FOR THE YEAR ENDED DECEMBER 31, 1994. ANY BENEFICIAL OWNER MAKING SUCH A REQUEST MUST SET FORTH THEREIN A GOOD-FAITH REPRESENTATION THAT AS OF MARCH 3, 1995, HE WAS A BENEFICIAL OWNER OF THE COMPANY'S SECURITIES ENTITLED TO VOTE AT THE ANNUAL MEETING OF SHAREHOLDERS. By order of the Board of Trust Managers M. CANDACE DuFOUR Vice President and Secretary Dated March 23, 1995 Houston, Texas 19 APPENDIX A WEINGARTEN REALTY INVESTORS 1988 SHARE OPTION PLAN 1. PURPOSE The purpose of the Weingarten Realty Investors 1988 Share Option Plan (the "Plan") is to advance the interests of Weingarten Realty Investors ("WRI"), a Texas real estate investment trust, and its Affiliates (as defined below) by providing share ownership opportunities to certain key employees of WRI and its Affiliates who contribute significantly to the performance of WRI. In addition, the Plan is intended to enhance the ability of WRI and its Affiliates to attract and retain individuals of superior managerial ability and to motivate such key employees to exert their best efforts toward future progress and profitability of WRI. For purposes of the Plan, an Affiliate shall be any corporation in which WRI has a direct or indirect ownership interest of 50% or more of the total combined voting power of all classes of stock in such corporation. 2. ADMINISTRATION AND INTERPRETATION a. Administration. The Plan shall be administered by a committee (the "Committee") consisting of not less than three members of the Trust Managers of WRI appointed by and serving at the pleasure of the Trust Managers. All members of the Committee shall be "disinterested persons" within the meaning of Rule 16b-3 of the General Rules and Regulations under the Securities Exchange Act of 1934. The Trust Managers may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill vacancies, however caused, in the Committee. The Committee may prescribe, amend and rescind rules and regulations for administration of the Plan and shall have full power and authority to construe and interpret the Plan. A majority of the members of the Committee shall constitute a quorum and the acts of a majority of the members present at a meeting or the acts of a majority of the members evidenced in writing shall be the acts of the Committee. The Committee may correct any defect or any omission or reconcile any inconsistency in the Plan or in any award or grant made hereunder in the manner and to the extent it shall deem desirable. The Committee shall have the full and exclusive right to grant all share options ("Options") and to make all awards under the Plan. In granting Options or making awards, the Committee shall take into consideration the contribution the employee has made or may make to the success of WRI or its Affiliates and such other factors as the Committee shall determine. The Committee shall also have the authority to consult with and receive recommendations from officers and other employees of WRI and its Affiliates with regard to these matters. In no event shall any employee, his legal representatives, heirs, legatees, distributees, or successors have any right to participate in the Plan except to such extent, if any, as the Committee shall determine. The Committee may from time to time in granting Options or making awards under the Plan prescribe such other terms and conditions concerning such Options or awards as it deems appropriate, including, A-1 without limitation, the achievement of specific goals established by the Committee, provided that such terms and conditions are not more favorable to an employee than those expressly set forth in the Plan. The day-to-day administration of the Plan may be carried out by such officers and employees of WRI or its Affiliates as shall be designated from time to time by the Committee. b. Interpretation. The interpretation and construction by the Committee of any provisions of the Plan or of any grant or award under the Plan and any determination by the Committee under any provision of the Plan or any such grant or award shall be final and conclusive for all purposes. c. Limitation on Liability. Neither the Committee nor any member thereof shall be liable for any act, omission, interpretation, construction or determination made in connection with the Plan in good faith, and the members of the Committee shall be entitled to indemnification and reimbursement by WRI in respect of any claim, loss, damage or expense (including counsel fees) arising therefrom to the full extent permitted by law. The members of the Committee shall be named as insureds under any directors and officers (or similar) liability insurance coverage which may be in effect from time to time. 3. SHARES SUBJECT TO GRANTS UNDER THE PLAN a. Limitation on Number of Shares. The shares subject to grants of Options and awards of Restricted Shares ("Restricted Shares") shall be shares of WRI's authorized but unissued common shares of beneficial interest in WRI ("Shares"), and such Shares, if any, held as "treasury stock" by WRI. Subject to adjustment as hereinafter provided, the aggregate number of Shares as to which Options may be granted or that may be subject to awards of Restricted Shares under the Plan shall not exceed 500,000. Shares ceasing to be subject to an Option or Restricted Share award because of the exercise of such Option or the vesting of such award shall no longer be subject to any further grant under the Plan. However, if any outstanding Option, in whole or in part, expires or terminates unexercised or is cancelled or any Restricted Share award, in whole or in part, expires or is terminated or forfeited, for any reason prior to January 1, 1998, the Shares allocable to the unexercised, terminated, cancelled or forfeited portion of such Option or Restricted Share award may again be made the subject of grants or awards under the Plan. b. Adjustments of Aggregate Number of Shares. The aggregate number of Shares stated in Section 3(a) shall be subject to appropriate adjustment, from time to time, in accordance with the provisions of Section 6 hereof. 4. ELIGIBILITY The individuals who shall be eligible to receive Options and Restricted Shares under the Plan shall be such key employees of WRI or any Affiliate as the Committee from time to time shall determine. A-2 5. OPTIONS a. Grants of Options. Options granted under the Plan may be either nonqualified stock options or incentive stock options ("ISO's"). The term ISO shall mean an option which is intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). With respect to an Option that is intended to be an ISO, the aggregate Market Value Per Share (determined at the date such Option was granted) of the Shares with respect to which such ISO is exercisable for the first time by the optionee during any calendar year (under all such plans of the individual's employer corporation and its parent and subsidiary corporations) shall not exceed $100,000. No ISO shall be granted to any person who, at the time of the grant, owns Shares possessing more than 10% of the total combined voting power of WRI or any parent or subsidiary of WRI, unless (A) on the date such ISO is granted the option price is at least 110% of the Market Value Per Share of the Shares subject to the ISO and (B) such ISO by its terms is not exercisable after the expiration of five years from the date such ISO is granted. Options granted under the Plan shall be of such type (i.e., a nonqualified stock option or an ISO), for such number of Shares, and be subject to such terms and conditions, which may include, without limitation, the achievement of specific goals, as the Committee shall designate. Options may be granted by the Committee to any individual eligible to receive the same at any time and from time to time. b. Terms of Options. Options granted pursuant to this Plan shall be evidenced by written agreements (separate agreements shall be used with respect to grants of nonqualified stock options and ISO's) which shall comply with and be subject to the following terms and conditions and may contain such other provisions, consistent with the terms of this Plan, as the Committee shall deem advisable. References herein to agreements shall include, to the extent applicable, any amendments to such agreements. (1) Payment of Option Exercise Price. Upon exercise of an Option, the full option purchase price for the Shares with respect to which the Option is being exercised shall be payable to WRI (i) in cash or by check payable and acceptable to WRI or (ii) subject to the approval of the Committee, by tendering to WRI Shares owned by the optionee having an aggregate Market Value Per Share as of the date of exercise and tender which is not greater than the full option purchase price for the Shares with respect to which the Option is being exercised and by paying the remainder of the option purchase price as provided in (i) above; however, the Committee may, upon confirming that the optionee owns the number of additional Shares being tendered, authorize the issuance of a new certificate for the number of Shares being acquired pursuant to the exercise of the Option less the number of Shares being tendered upon the exercise and return to the optionee (or not require surrender of) the certificate for the Shares being tendered upon the exercise. Payment instructions will be received subject to collection. (2) Number of Shares. Each agreement shall state the total number of Shares which are subject to the Option. A-3 (3) Exercise Price. The exercise price for each Option shall be fixed by the Committee at the date of grant but in no event may such exercise price per share be less than the Market Value Per Share on the date of the grant of the Option. (4) Market Value Per Share. The Market Value Per Share as of any particular date shall be determined by any fair and reasonable means determined by the Committee. (5) Term. The term of each Option shall be determined by the Committee at the date of grant; provided, however, that each Option that is an ISO shall, notwithstanding anything in the Plan or an agreement to the contrary, expire not more than ten years from the date the Option is granted or, if earlier, the date specified in the agreement at the date of grant of such Option. An Option that is a nonqualified stock option shall expire not more than ten years plus one day from the date the Option is granted, or if earlier, the date specified in the agreement at the date of grant of such Option. (6) Date of Exercise. Each agreement may, in the discretion of the Committee, state that the Option granted therein may not be exercised in whole or in part for a period or periods of time specified in such agreement and except as so specified therein, any Option may be exercised in whole at any time or in part from time to time during its term. (7) Termination of Employment. In the event that an individual's employment with WRI and its Affiliates shall terminate, for reasons other than (i) retirement pursuant to a retirement plan or policy of WRI or one of its Affiliates ("retirement"), (ii) permanent disability as determined by the Committee based on the opinion of a physician selected or approved by the Committee ("permanent disability") or (iii) death, the individual's Options shall be exercisable by him, subject to subsections (5) and (6) above, only within three months after such termination, but only to the extent the Option was exercisable immediately prior to such termination of employment. If, however, any termination of employment is due to retirement or permanent disability, the individual shall have the right, subject to the provisions of subsections (5) and (6) above, to exercise his Option at any time within the 12-month period commencing on the day next following after such termination of employment to the extent that the individual was entitled to exercise the same on the day immediately prior to such termination. Whether any termination of employment is due to retirement or permanent disability and whether an authorized leave of absence or absence on military or government service or for other reasons shall constitute a termination of employment for the purposes of the Plan shall be determined by the Committee. If an individual shall die while entitled to exercise an Option, the individual's estate, personal representative or beneficiary, as the case may be, shall have the right, subject to the provisions of subsections (5) and (6) above, to exercise the Option at any time within 12 months from the date of the optionee's death, to the extent that the optionee was entitled to exercise the same on the day immediately prior to the optionee's death. A-4 The Committee may, in its discretion, accelerate the exercisability of all or part of an individual's Options. c. Options Granted by Other Corporations. Options may be granted under the Plan from time to time in substitution for stock options held by employees of corporations who become key employees of WRI or of any Affiliate as a result of any "corporate transaction" as defined in the Treasury Regulations promulgated under Section 424 of the Code. 6. RESTRICTED SHARES a. Awards of Restricted Shares. Restricted Shares may be awarded by the Committee to any individual eligible to receive the same, at any time and from time to time before January 1, 1998. An award may be a contingent award of Restricted Shares to be issued to the employee in the future after the employee has met the terms and conditions of the contingent award set by the Committee at the time of the contingent award. b. Description of Restricted Shares. A Restricted Share is a share that may not be sold, exchanged, pledged, transferred, assigned or otherwise encumbered or disposed of until the terms and conditions set by the Committee at the time of the award of the Restricted Shares have been satisfied. A Restricted Share shall be subject to such restrictions, terms and conditions as the Committee may establish, which may include, without limitation, "lapse" and "non-lapse" restrictions (as such terms are defined in regulations promulgated under Section 83 of the Code) and the achievement of specific goals. If an employee receives Restricted Shares (whether or not escrowed as provided below), the employee shall be the record owner of such shares and shall have all the rights of a shareholder with respect to such shares (unless the escrow agreement, if any, specifically provides otherwise), including the right to vote and the right to receive dividends or other distributions made or paid with respect to such shares. Any certificate or certificates representing Restricted Shares shall bear a legend similar to the following: The shares represented by this certificate have been issued pursuant to the terms of the Weingarten Realty Investors 1988 Share Option Plan and may not be sold, pledged, transferred, assigned or otherwise encumbered in any manner except as is set forth in the terms of such award dated , 199 . In order to enforce the restrictions, terms and conditions that may be applicable to an employee's Restricted Shares, the Committee may require the employee, upon the receipt of a certificate or certificates representing such shares, or at any time thereafter, to deposit such certificate or certificates, together with stock powers and other instruments of transfer, appropriately endorsed in blank, with WRI or an escrow agent designated by WRI under an escrow agreement, which may be a part of a Restricted Share agreement, in such form as shall be determined by the Committee. After the satisfaction of the terms and conditions set by the Committee at the time of an award of Restricted Shares to an employee, which award is not subject to a non-lapse feature, a new certificate, without the legend set forth above, for the number of shares that are no longer subject to such restrictions, terms and A-5 conditions shall be delivered to the employee. The remaining Restricted Shares issued with respect to such award, if any, shall either be reacquired by WRI or, if appropriate under the terms of the award applicable to such shares, shall continue to be subject to the restrictions, terms and conditions set by the Committee at the time of award. c. Payment of Restricted Shares. The satisfaction of the terms and conditions set by the Committee at the time of an award (including an award made pursuant to a contingent award) of Restricted Shares and the delivery of a certificate, without the legend set forth above, for the portion of such award that is no longer subject to such restrictions, terms and conditions is hereinafter referred to as the "payment" of such portion of the award. Subject to the provisions above, each award shall be paid at the time and in the manner specified by the Committee at the time of the award. d. Payment in the Event of Termination of Employment. If the employment with WRI and its Affiliates of an employee to whom an award (including a contingent grant) of Restricted Shares has been made is terminated for any reason before satisfaction of the terms and conditions for the payment of all or a portion of the award, then only such portion of the award, if any, that is payable pursuant to its terms and conditions as of the date of the employee's termination shall be paid and the remaining portion of such award shall be reacquired by WRI and forfeited; provided, however, if the termination is due to the employee's death, permanent disability or retirement, the Committee may, in its sole discretion, deem that the terms and conditions have been met for all or part of such remaining portion. If Restricted Shares issued shall be reacquired by WRI and forfeited as provided above, the employee, or in the event of his death his personal representative, shall forthwith deliver to the Secretary of WRI the certificates for the Restricted Shares awarded pursuant to the Plan to the employee, accompanied by such instrument of transfer, if any, as may reasonably be required by the Secretary of WRI. If an employee to whom Restricted Shares have been awarded dies after satisfaction of the terms and conditions for the payment of all or a portion of the award but prior to the actual payment of all or such portion thereof, such payment shall be made to the employee's beneficiary or beneficiaries at the time and in the same manner that such payment would have been made to the employee. 7. RECAPITALIZATION The aggregate number of Shares stated in Section 3a, the number of Shares to which each outstanding Option relates, the exercise price in respect of each such Option and the number of Restricted Shares awarded or outstanding, may be proportionately adjusted in an equitable manner determined by the Committee, in its sole discretion and without liability to any person, for any increase or decrease in the number of issued Shares resulting from the payment of a Share dividend, a Share split or any transaction which is a "corporation transaction" (as defined in the Treasury Regulations promulgated under Section 424 of the Code). 8. EMPLOYEE'S AGREEMENT If, at the time of the exercise of any Option or the making of an award of Restricted Shares, in the opinion of counsel for WRI, it is necessary or desirable, in order to comply with any then applicable laws or A-6 regulations relating to the sale of securities, that the individual exercising the Option or receiving the Restricted Shares shall agree to hold any Shares issued to the individual for investment and without any present intention to resell or distribute the same and that the individual will dispose of such Shares only in compliance with such laws and regulations, the individual will, upon the request of WRI, execute and deliver to WRI a further agreement to such effect. 9. WITHHOLDING FOR TAXES No Option may be exercised or distribution of shares be made under the Plan until appropriate arrangements have been made by the individual with the Company for the payment of any amounts that the Company may be required to withhold with respect thereto. 10. TERMINATION OF AUTHORITY TO MAKE GRANT No Options will be granted or awards will be made pursuant to this Plan after December 31, 1997. 11. AMENDMENT AND TERMINATION The Trust Managers of WRI may from time to time and at any time alter, amend, suspend, discontinue or terminate this Plan and any grants or awards hereunder; provided, however, that no such action of the trust managers of WRI may, without the approval of the shareholders of WRI, alter the provisions of the Plan so as to (i) increase the maximum number of Shares which may be subject to awards and grants and distributed in the payment of awards and exercises under the Plan (except as provided in Section 3b); (ii) change the class of employees eligible to receive awards and grants under the Plan; (iii) extend beyond ten years the maximum terms of ISO's granted under the Plan, extend beyond ten years and one day the maximum terms for nonqualified share options granted under the Plan, or extend the term of the Plan; or (iv) decrease the exercise price applicable to any Option. 12. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS Anything in the Plan or any agreement entered into pursuant to the Plan to the contrary notwithstanding, if, at any time specified herein or therein for the making of any determination, the issue or other distribution of Shares, or any law, regulation or requirement of any governmental authority having jurisdiction in the premises shall require either WRI or the employee (or the employee's beneficiary), as the case may be, to take any action in connection with any such determination, the Shares then to be issued or distributed, or such payment, the issue or distribution of such Shares or the making of such determination or payment, as the case may be, shall be deferred until such action shall have been taken. 13. MISCELLANEOUS a. No Employment Contract. Nothing contained in the Plan shall be construed as conferring upon any employee the right to continue in the employ of WRI or any Affiliate. A-7 b. Employment with Affiliates. Employment by WRI for the purpose of this Plan shall be deemed to include employment by, and to continue during any period in which an employee is in the employment of, any Affiliate. c. No Rights as a Shareholder. An employee shall have no rights as a shareholder with respect to Shares covered by the employee's Option or Restricted Share award until the date of the issuance of such Shares to the employee pursuant thereto. No adjustment will be made for dividends or other distributions or rights for which the record date is prior to the date of such issuance. d. No Right to Trust Assets. Nothing contained in the Plan shall be construed as giving an employee, the employee's beneficiaries or any other person any equity or interest of any kind in any assets of WRI or an Affiliate or creating a trust of any kind or a fiduciary relationship of any kind between WRI or an Affiliate and any such person. e. No Restriction on Trust Action. Nothing contained in the Plan shall be construed to prevent WRI or any Affiliate from taking any action that is deemed by WRI or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any grant made under the Plan. No employee, beneficiary or other person shall have any claim against WRI or any Affiliate as a result of any such action. f. Nonassignability. Neither an employee nor an employee's beneficiary shall have the power or right to sell, exchange, pledge, transfer, assign or otherwise encumber or dispose of such employee's or beneficiary's interest arising under the Plan nor shall such interest be subject to seizure for the payment of an employee's or beneficiary's debts, judgments, alimony, or separate maintenance or be transferable by operation of law in the event of an employee's or beneficiary's bankruptcy or insolvency and to the extent any such interest arising under the Plan is awarded to a spouse pursuant to any divorce proceeding, such interest shall be deemed to be terminated and forfeited notwithstanding any vesting provisions or other terms herein or in the agreement evidencing such award. g. Application of Funds. The proceeds received by WRI from the sale of Shares pursuant to the Plan will be used for its general business purposes. h. Governing Law; Construction. All rights and obligations under the Plan shall be governed by, and the Plan shall be construed in accordance with, the laws of the State of Texas without regard to the principles of conflicts of laws. Titles and headings to Sections herein are for purposes of reference only, and shall in no way limit, define or otherwise affect the meaning or interpretation of any provisions of the Plan. 14. APPRECIATION RIGHTS. Any option granted under the Plan may include, or after the date of grant any nonqualified option may be amended to include, in the discretion of the Committee, a share appreciation right. Such share appreciation A-8 right shall be subject to such terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall impose including the following: (a) A share appreciation right shall be exercisable to the extent, and only to the extent, the related option is exercisable. (b) A share appreciation right shall entitle an optionee to surrender to WRI unexercised the option in which it is included, or any portion thereof, and to receive from WRI in exchange therefor the number of Shares having an aggregate value equal to the excess of the fair market value of one share on the date of exercise of the purchase price per share specified in such option, times the number of shares called for by the option, or portion thereof, which is so surrendered; provided, however, that such share appreciation right shall only be exercisable upon a showing of "hardship" by the optionee (or his successor) and upon consent of the Committee; and provided further that the Committee shall be entitled to elect to settle WRI's obligation, or any portion thereof, arising out of the permitted exercise of a share appreciation right, by the payment of cash equal to the aggregate fair market value of the shares on the date of exercise it would otherwise be obligated to give. The Committee shall promulgate a standard for determining a "hardship," said standard to be applied uniformly to all optionees (or their successors) under the Plan. The fair market value of said shares shall be determined by any fair and reasonable means fixed by the Committee, including, if the Shares are listed for trading on a national securities exchange, the mean of the high and low sales prices on such exchange on the date in question, or if the Shares shall not have been traded on such exchange on such date, the mean of the high and low sales prices on such exchange on the first day prior thereto on which the Shares were so traded. A-9 - -------------------------------------------------------------------------------- PROXY WEINGARTEN REALTY INVESTORS PROXY THIS PROXY IS SOLICITED BY THE BOARD OF TRUST MANAGERS The undersigned hereby appoint(s) STANFORD ALEXANDER, MARTIN DEBROVNER AND JOSEPH W. ROBERTSON, JR., or any of them, lawful attorneys and proxies of the undersigned with full power of substitution, for and in the name, place and stead of the undersigned to attend the Annual Meeting of Shareholders of Weingarten Realty Investors to be held at The Houstonian, 111 N. Post Oak Lane, Houston, Texas on Thursday, April 27, 1995, at 4:00 p.m., Houston time, and any adjournment(s) thereof, with all powers the undersigned would possess if personally present and to vote the number of votes the undersigned would be entitled to vote if personally present. THE BOARD OF TRUST MANAGERS RECOMMENDS A VOTE "FOR" PROPOSALS NUMBER 1, 2 AND 3. PROPOSAL 1: The Election of [_] FOR nominees listed [_] WITHHOLD AUTHORITY Trust Managers: below to vote for all (Except as marked to nominees listed the contrary) below Stanford Alexander, Andrew M. Alexander, Martin Debrovner, Melvin A. Dow, Stephen A. Lasher, Joseph W. Robertson, Jr., Douglas W. Schnitzer, Marc J. Shapiro, J. T. Trotter INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME HERE: - -------------------------------------------------------------------------------- PROPOSAL 2: Ratification of the appointment of Deloitte & Touche as the independent auditors of the Company. [_] FOR [_] AGAINST [_] ABSTAIN - -------------------------------------------------------------------------------- PROPOSAL 3: To amend the 1988 Share Option Plan of the Company to increase the number of shares available from 500,000 to 700,000: [_] FOR [_] AGAINST [_] ABSTAIN (TO BE SIGNED ON THE OTHER SIDE) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In accordance with their discretion, said Attorneys and Proxies are authorized to vote upon such other matters or proposals not known at the time of solicitation of this proxy which may properly come before the meeting. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1, 2 AND 3. ANY PRIOR PROXY IS HEREBY REVOKED. Dated: _______________________________, 1995 ____________________________________________ Signature ____________________________________________ (Signature if held jointly) Please sign exactly as your name appears at the left. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or corporation, please sign in full corporate name by president or other authorized person. If a partnership, please sign in partnership name by authorized person. PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE. THANK YOU. - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----