WRI Proxy Filing 2006
WEINGARTEN
REALTY INVESTORS
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
May
1, 2006
To
Our Shareholders:
You
are
invited to attend our annual meeting of shareholders that will be held at our
corporate office located at 2600 Citadel Plaza Drive, Houston, Texas, on Monday,
May 1, 2006, at 9:00 a.m., Houston time. The purpose of the meeting is to vote
on the following proposals:
Proposal
1: To
elect
nine trust managers to serve until their successors are elected and
qualified.
Proposal
2: To
ratify
the appointment of Deloitte & Touche LLP as independent registered public
accounting firm for the fiscal year ending December 31, 2006.
Proposal
3: To
approve the amendment of the 2001 Long Term Incentive Plan to increase the
number of shares available under the plan to 4,750,000.
Proposal
4: To
vote
on one shareholder proposal entitled "Pay-For-Superior-Performance
Proposal."
Shareholders
of record at the close of business on March 14, 2006 are entitled to notice
of,
and to vote at, the annual meeting. A proxy card and a copy of our annual report
to shareholders for the fiscal year ended December 31, 2005 are enclosed with
this notice of annual meeting and proxy statement.
Your
vote is important. Accordingly,
you are asked to vote, whether or not you plan to attend the annual meeting.
You
may vote by: (i) mail by marking, signing, dating and returning the accompanying
proxy card in the postage-paid envelope we have provided, or returning it to
Weingarten Realty Investors, c/o ADP, 51 Mercedes Way, Edgewood, NY 11717,
(ii)
using the Internet at www.proxyvote.com,
(iii) phone by calling 1-800-690-6903, or (iv) attending the annual meeting
in
person. If
you plan to attend the annual meeting to vote in person and your shares are
registered with our transfer agent, Mellon Investor Services LLC, in the name
of
a broker or bank, you must secure a proxy from the broker or bank assigning
voting rights to you for your shares.
By
Order
of the Board of Trust Managers,
M.
Candace DuFour
Sr.
Vice
President and Secretary
March
22,
2006
Houston,
Texas
TABLE
OF CONTENTS
|
Page
No.
|
|
|
General
Information
|
1
|
Proposal
One - Election of Trust Managers
|
3
|
Share
Ownership of Certain Beneficial Owners
|
9
|
Executive
Officers
|
11
|
Executive
Compensation
|
12
|
Management
Development and Compensation Committee Report on Executive
Compensation
|
17
|
Report
of the Audit Committee of the Board of Trust Managers
|
22
|
Proposal
Two - Ratification of Independent Registered Public Accounting
Firm
|
24
|
Proposal
Three - Amendment of 2001 Long Term Incentive Plan
|
26
|
Proposal
Four - Shareholder Proposal
|
29
|
Other
Matters
|
31
|
Shareholder
Proposals
|
31
|
Annual
Report
|
31
|
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
Monday,
May 1, 2006
Weingarten
Realty Investors
2600
Citadel Plaza Drive
Houston,
Texas 77008
The
board
of trust managers is soliciting proxies to be used at the 2006 annual meeting
of
shareholders to be held at our corporate office located at 2600 Citadel Plaza
Drive, Houston, Texas 77008, on Monday, May 1, 2006, at 9:00 a.m., Houston
time.
This proxy statement, accompanying proxy card and annual report to shareholders
for the fiscal year ended December 31, 2005 are first being mailed to
shareholders on or about March 22, 2006. Although the annual report is being
mailed to shareholders with this proxy statement, it does not constitute part
of
this proxy statement.
Who
May Vote
Only
shareholders of record at the close of business on March 14, 2006 are entitled
to notice of, and to vote at, the annual meeting. As of March 14, 2006, we
had
89,569,048 common shares of beneficial interest issued and outstanding. Each
common shareholder of record on the record date is entitled to one vote on
each
matter properly brought before the annual meeting for each common share
held.
In
accordance with our amended and restated bylaws, a list of shareholders entitled
to vote at the annual meeting will be available at the annual meeting and for
10
days prior to the annual meeting, between the hours of 9:00 a.m. and 4:00 p.m.
local time, at our principal executive offices listed above.
How
You May Vote
You
may
vote using
any
of the following methods:
· |
BY
MAIL: Mark,
sign, and date your proxy card and return it in the postage-paid
envelope
we have provided, or return it to Weingarten Realty Investors, c/o
ADP, 51
Mercedes Way, Edgewood, NY 11717. The named proxies will vote your
shares
according to your directions. If you submit a signed proxy card without
indicating your vote, the person voting the proxy will vote your
shares in
favor of proposals one, two and three and against proposal
four.
|
· |
BY
INTERNET: Go
to and
use the Internet to transmit your voting instructions and for electronic
delivery of information until 11:59 P.M. Eastern Time on April 30,
2006.
Have your proxy card in hand when you access the Web site and then
follow
the instructions.
|
·
|
BY
PHONE: Call
1-800-690-6903 and use any touch-tone telephone to transmit your
voting
instructions up until 11:59 P.M. Eastern Time on April 30, 2006.
Have your
proxy card in hand when you call and then follow the
instructions.
|
· |
BY
ATTENDING THE ANNUAL MEETING IN PERSON:
|
You
may
revoke your proxy at any time before it is exercised by:
· |
giving
written notice of revocation to our Secretary, M. Candace DuFour,
at
Weingarten Realty Investors, P.O. Box 924133, Houston, Texas,
77292-4133;
|
· |
timely
delivering a properly executed, later-dated proxy; or
|
· |
voting
in person at the annual meeting.
|
Voting
by
proxy will in no way limit your right to vote at the annual meeting if you
later
decide to attend in person. If you hold common shares through any of our share
purchase or savings plans, you will receive voting instructions. Please sign
and
return those instructions promptly to assure that your shares are represented
at
the annual meeting. If your shares are held in the name of a bank, broker or
other holder of record, you must obtain a proxy, executed in your favor, to
be
able to vote at the annual meeting. If no direction is given and the proxy
is
validly executed, the shares represented by the proxy will be voted in favor
of
proposals one, two and three and against proposal four. The persons authorized
under the proxies will vote upon any other business that may properly come
before the annual meeting according to their best judgment to the same extent
as
the person delivering the proxy would be entitled to vote. We do not anticipate
that any other matters will be raised at the annual meeting.
Quorum
The
presence, in person or represented by proxy, of the holders of a majority
(45,680,214 shares) of the common shares entitled to vote at the annual meeting
is necessary to constitute a quorum at the annual meeting. However, if a quorum
is not present at the annual meeting, the shareholders present in person or
represented by proxy have the power to adjourn the annual meeting until a quorum
is present or represented. Pursuant to our amended and restated bylaws,
abstentions and broker “non-votes” are counted as present and entitled to vote
for purposes of determining a quorum at the annual meeting. A broker “non-vote”
occurs when a nominee holding common shares for a beneficial owner does not
vote
on a particular proposal because the nominee does not have discretionary voting
power with respect to that item and has not received instructions from the
beneficial owner.
Required
Vote
The
affirmative vote of the holders of a majority (45,680,214 shares) of the common
shares present in person or represented by proxy is required to re-elect trust
managers. Any trust manager who is currently on the board shall remain on the
board, regardless of the number of votes he receives, unless he is replaced
by a
nominee who receives the requisite vote to become a new trust manager. All
of
the nominees for trust manager served as our trust managers in 2005. Abstentions
and broker non-votes are not counted for purposes of the election of trust
managers.
The
ratification of the appointment of Deloitte & Touche LLP requires the
affirmative vote of the holders of a majority (45,680,214 shares) of the common
shares represented in person or by proxy at the annual meeting and entitled
to
vote thereon in order to be approved.
The
approval of the amendment to the 2001 Long Term Incentive Plan and the
shareholder proposal requires the affirmative vote of the holders of a majority
(45,680,214 shares) of the common
shares
represented in person or by proxy at the annual meeting and entitled to vote
thereon in order to be approved.
Cost
of Proxy Solicitation
The
cost
of soliciting proxies will be borne by us. Proxies may be solicited on our
behalf by our trust managers, officers, employees or soliciting service in
person, by telephone, facsimile or by other electronic means. In accordance
with
SEC regulations and the rules of the New York Stock Exchange (NYSE), we will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
their expenses incurred in mailing proxies and proxy materials and soliciting
proxies from the beneficial owners of our common shares.
PROPOSAL
ONE
ELECTION
OF TRUST MANAGERS
Pursuant
to the Texas Real Estate Investment Trust Act, our amended and restated
declaration of trust, and our amended and restated bylaws, our business,
property and affairs are managed under the direction of the board of trust
managers. At the annual meeting, nine trust managers will be elected by the
shareholders, each to serve until his successor has been duly elected and
qualified, or until the earliest of his death, resignation or retirement.
Regardless of the number of votes each nominee receives, pursuant to the Texas
Real Estate Investment Trust Act, each trust manager will continue to serve
unless another nominee receives the affirmative vote of the holders of 66 2/3%
of our outstanding common shares.
The
persons named in the enclosed proxy will vote your shares as you specify on
the
enclosed proxy. If you return your properly executed proxy but fail to specify
how you want your shares voted, the shares will be voted in favor of the
nominees listed below. The board of trust managers has proposed the following
nominees for election as trust managers at the annual meeting. Each of the
nominees is currently a member of the board of trust managers.
Nominees
Stanford
Alexander,
Chairman of the Board of Trust Managers since 2001. Chief Executive Officer
from
1993 to December 2000. President and Chief Executive Officer from 1962 to 1993.
Trust manager since 1956 and our employee since 1955. Age: 77
Andrew
M. Alexander,
trust
manager since 1983. Chief Executive Officer since January 2001. President since
1997. Executive Vice President/Asset Manager from 1993 to 1996 and President
of
Weingarten Realty Management Company since 1993. Senior Vice President/Asset
Manager of Weingarten Realty Management Company from 1991 to 1993, and Vice
President from 1990 to 1991 and, prior to our reorganization in 1984, Vice
President from 1988 to 1990. Mr. Alexander has been our employee since 1978.
He
is a director of Academy Sports & Outdoors, Inc. Age: 49
J.
Murry Bowden,
trust
manager since 2003. Mr. Bowden is Founder, Chairman and CEO of The Hanover
Company and has been involved in all aspects of apartment development,
construction, management and finance for more than 30 years. Age:
57
James
W. Crownover, trust
manager since 2001. Since 1998, Mr. Crownover has managed his personal
investments. Mr. Crownover completed a 30-year career with McKinsey &
Company, Inc. in 1998 where he was managing director of its southwest practice
and a member of the firm’s board of directors. He currently serves as a director
on the boards of Chemtura Corporation and Allied Waste Industries (audit
committee member). Age: 62
Robert
J. Cruikshank,
trust
manager since 1997. Since 1993, Mr. Cruikshank has managed his personal
investments. Senior partner of Deloitte & Touche LLP from 1989 to 1993.
He currently serves on the boards of Encysive Pharmaceuticals, Inc. (audit
committee chairman), MAXXAM, Inc., (audit committee member), and Kaiser Aluminum
Corp. (audit committee member). Age: 75
Melvin
A. Dow,
trust
manager since 1984. Shareholder, Winstead, Sechrest & Minick P. C.
since August 2001. Chairman/Chief Executive Officer of Dow, Cogburn &
Friedman, P.C. (which merged with Winstead, Sechrest & Minick P.C. in 2001)
from 1995 to 2001. Age: 78
Stephen
A. Lasher,
trust
manager since 1980. President of The GulfStar Group, Inc. since January 1991.
Age: 58
Douglas
W. Schnitzer,
trust
manager since 1984. Chairman/Chief Executive Officer of Senterra Real Estate
Group, L.L.C. since 1994. Age: 49
Marc
J. Shapiro,
trust
manager since 1985. Since 2003, Mr. Shapiro has served as a consultant to J.
P.
Morgan Chase & Co. as a non-executive Chairman of its Texas operations.
Former Vice Chairman of J. P. Morgan Chase & Co. from 1997 through
September, 2003. He served as Chairman and Chief Executive Officer of Chase
Bank
of Texas from January 1989 to 1997. He currently serves as Director of
Kimberly-Clark Corporation and Burlington Northern Santa Fe Corporation (audit
committee member). Age: 58
Andrew
M.
Alexander is the son of Stanford Alexander.
The
governance committee will consider trust manager candidates nominated by
shareholders. Recommendations, including the nominee’s name and an explanation
of the nominee’s qualifications should be sent to Candace DuFour, Sr. Vice
President and Secretary, at P.O. Box 924133, Houston, Texas 77292-4133. The
procedure for nominating a person for election as a trust manager is described
under “Shareholder Proposals” on page 31.
The
board of trust managers unanimously recommends that you vote FOR the election
of
trust managers as set forth in Proposal One.
Board
Meetings and Committees
During
fiscal 2005, the board of trust managers held five meetings. No trust manager
attended less than 75% of the total number of board and committee meetings
on
which the trust manager served that were held while the trust manager was a
member of the board or committee, as applicable. All of our trust managers
are
strongly encouraged to attend our annual meeting of shareholders. All of our
trust managers attended our 2005 annual meeting of shareholders. The board’s
current standing committees are as follows:
Name
|
Governance
Committee
|
Audit
Committee
|
Management
Development
&
Compensation
Committee
|
Executive
Committee
|
Pricing
Committee
|
|
|
|
|
|
|
Employee
Trust Managers:
|
|
|
|
|
|
Stanford
Alexander
|
|
|
|
X
|
X
|
Andrew
M. Alexander
|
|
|
|
X
(1)
|
X
(1)
|
Non-Employee
Trust Managers:
|
|
|
|
|
|
J.
Murry Bowden
|
X
|
X
|
|
|
|
James
W. Crownover
|
X
|
X
(1)
|
|
|
|
Robert
J. Cruikshank
|
|
X
|
X
(1)
|
X
|
|
Melvin
A. Dow
|
|
|
|
X
|
|
Stephen
A. Lasher
|
|
|
X
|
X
|
X
|
Douglas
Schnitzer
|
|
X
|
|
|
|
Marc
J. Shapiro
|
X
(1)
|
|
X
|
|
|
___________
(1) Chairman
Governance
Committee
The
governance committee has the responsibility to (1) oversee the nomination of
individuals to the board, including the identification of individuals qualified
to become board members and recommending such nominees; (2) develop and
recommend to the board a set of governance principles; and (3) oversee matters
of governance to insure that the board is appropriately constituted and operated
to meet its fiduciary obligations, including advising the board on matters
of
board organization, membership and function and committee structure and
membership. The committee also recommends trust manager compensation and
benefits. The governance committee will consider nominees made by shareholders.
Shareholders should send nominations to the company’s secretary, Candace DuFour.
Any shareholder nominations proposed for consideration by the governance
committee should include the nominee’s name and qualifications for board
membership. The
governance committee recommends to the board the slate of individuals to be
presented for election as trust managers. The
governance committee shall establish criteria for the selection of potential
trust managers, taking
into account the following desired attributes: ethics; leadership; independence;
interpersonal
skills; financial acumen; business experiences; industry
knowledge;
and diversity of viewpoints. See
“Shareholder Proposals” on page 31. The governance committee met three times in
2005.
Audit
Committee
The
audit
committee assists the board in fulfilling its responsibilities for general
oversight of (1) our financial reporting processes and the audit of our
financial statements, including the integrity of our financial statements;
(2)
our compliance with ethical policies contained in our code of conduct and
ethics; (3) legal and regulatory requirements; (4) the independence,
qualification and performance of our independent registered public accounting
firm; (5) the performance of our internal audit function; and (6) risk
assessment and risk management. The committee has the responsibility for
selecting our independent registered public accounting firm and pre-approving
audit and non-audit services. Among other things, the audit committee prepares
the audit committee report for inclusion in the annual proxy statement; reviews
the audit committee charter and the audit committee’s performance; approves the
scope of the annual audit; and reviews our disclosure controls and procedures,
internal controls, information security policies, internal audit function,
and
corporate policies with respect to financial information and earnings guidance.
The audit committee also oversees investigations into complaints concerning
financial matters. The audit committee has the authority to obtain advice and
assistance from outside legal, accounting or other advisors as the audit
committee deems necessary to carry out its duties. The audit committee met
five
times in 2005. The board of trust managers has determined that Mr. Cruikshank’s
simultaneous service on the audit committees of more than three public companies
will not impair his ability to serve on our audit committee.
Management
Development and Compensation Committee
The
management development and compensation committee (1) discharges the board’s
responsibilities to establish the compensation of our executives; (2) produces
an annual report on executive compensation for inclusion in our annual proxy
statement; (3) provides general oversight for our compensation structure,
including our equity compensation plans and benefits programs; and (4) retains
and approves the terms of the retention of any compensation consultant or other
compensation experts. Other specific duties and responsibilities of the
committee include reviewing the leadership development process; reviewing and
approving objectives relative to executive officer compensation; approving
employment agreements for executive officers; approving and amending our
incentive compensation and share option programs (subject to shareholder
approval if required); and annually evaluating its performance and its charter.
The committee met three times in 2005.
Executive
Committee
The
executive committee has the authority to enter into transactions to acquire
and
dispose of real property, execute certain contracts and agreements, including,
but not limited to, borrowing money and entering into financial derivative
contracts, leases (as landlord or tenant) and construction contracts valued
from
$30,000,000 up to $100,000,000. The committee was established by the board
to
create and reinforce the approval and decision making process around these
significant transactions. We have a detailed process that is followed for all
of
these transactions and the execution of unanimous consents for such transactions
is the final documentation of such process. The executive committee did not
meet
in person during 2005, but conducted business by the execution of four unanimous
written consents during that year.
Pricing
Committee
The
pricing committee is authorized to exercise all the powers of the board of
trust
managers in connection with the offering, issuance and sale of our securities.
The pricing committee did not meet in person during 2005, and did not execute
any unanimous written consents during that year.
Corporate
Governance
Independence
of Trust Managers and Committee Members.
Our
board has determined that each of the following trust managers standing for
re-election has no material relationship with us (either directly or as a
partner, shareholder or officer of an organization that has a relationship
with
us) and is independent within the meaning of our trust manager independence
standards, which reflect exactly NYSE Director Independence Standards, as
currently in effect: Messrs. Bowden, Crownover, Cruikshank, Lasher, Schnitzer
and Shapiro. The board has determined that Messrs. S. Alexander, A. Alexander
and Dow are not independent trust managers within the meaning of the NYSE
Director Independence Standards. Furthermore, the board has determined that
each
of the members of each of the governance, audit and management development
and
compensation committees has no material relationship with us (either directly
as
a partner, shareholder or officer of an organization that has a relationship
with us) and is independent within the meaning of our trust manager independence
standards.
Audit
Committee Financial Expert. The
board
of trust managers has determined that Mr. Cruikshank meets the definition of
audit committee financial expert promulgated by the Securities and Exchange
Commission and is independent, as defined in the New York Stock Exchange Listing
Standards.
Committee
Charters and other Governance Materials.
Our
board has adopted (1) a governance committee charter, a management development
and compensation committee charter and an audit committee charter; (2) standards
of independence for our trust managers; (3) a code of conduct and ethics for
all
trust managers, officers and employees; and (4) corporate governance guidelines.
Our governance committee charter, management development and compensation
committee charter, audit committee charter, corporate governance guidelines
and
code of conduct and ethics are available on our Web site at www.weingarten.com.
These
materials are also available in print to any shareholder who requests them
by
submitting a written request to Brook Wootton, Director of Investor Relations,
2600 Citadel Plaza Drive, Suite 300, Houston, Texas 77008.
Communications
with the Board.
Individuals may communicate with the board by sending a letter to:
M.
Candace DuFour
Secretary
to the Board of Trust Managers
2600
Citadel Plaza Drive, Suite 300
Houston,
Texas 77008
All
trust
managers have access to this correspondence. Communications that are intended
specifically for non-management trust managers should be sent to the street
address noted above, to the attention of the chair of the Governance Committee.
In accordance with instructions from the board, the secretary to the board
reviews all correspondence, organizes the communications for review by the
board, and posts communications to the full board or individual trust managers
as appropriate.
Executive
Sessions.
Generally, executive sessions of non-employee trust managers are held at the
end
of each board meeting. In accordance with our Governance Policies, our
independent trust managers will meet at least once per year in executive
session. The chairman of the governance committee,
currently
Marc J. Shapiro, will chair this executive session. During 2005, our
non-employee trust managers met four times in executive session.
Compensation
of Trust Managers
Employee
trust managers receive no compensation for board service.
During
2005, our non-employee trust managers received the following
compensation:
Annual
retainer fee
|
|
$
|
20,000
|
|
Fee
for each board meeting attended
|
|
|
1,000
|
|
Audit
committee chairman retainer
|
|
|
10,000
|
|
Audit
committee member retainer
|
|
|
5,000
|
|
Chairman
retainer for other committees
|
|
|
6,000
|
|
Other
committee members retainer
|
|
|
4,000
|
|
Additionally,
each non-employee trust manager received an award of 1,400 restricted shares.
Members of the executive and pricing committees receive no additional
compensation for their services.
Compensation
Committee Interlocks and Insider Participation
During
fiscal 2005, three of our independent trust managers served on the management
development and compensation committee. The committee members for 2005 were
Messrs. Cruikshank, Lasher and Shapiro. No member of the management development
and compensation committee has any interlocking relationship with any other
company that requires disclosure under this heading.
Certain
Transactions
Mr.
Dow
is a shareholder of Winstead, Secrest & Minick P. C., a law firm that had a
relationship with Weingarten during the 2005 fiscal year. Mr. Dow performs
a
significant amount of work for us. Payments made by us to Winstead, Secrest
& Minick P. C. for his work constituted less than 5% of the firm’s total
revenue for 2005.
SHARE
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The
following table sets forth certain information regarding the beneficial
ownership of our common shares as of February 17, 2006 by (1) each person known
by us to own beneficially more than 5% of our outstanding common shares, (2)
each current trust manager, (3) each named executive officer, and (4) all
current trust managers and executive officers as a group. The number of shares
beneficially owned by each entity, person, trust manager or executive officer
is
determined under the rules of the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the individual has the
sole
or shared voting power or investment power and also any shares that the
individual has a right to acquire as of April 18, 2006 (60 days after February
17, 2006) through the exercise of any share option or other right. Unless
otherwise indicated, each person has sole voting and investment power (or shares
such powers with his spouse) with respect to the shares set forth in the
following table. Unless otherwise noted in a footnote, the address of each
person listed below is c/o Weingarten Realty Investors, 2600 Citadel Plaza
Drive, Houston, Texas 77008.
Certain
of the shares listed below are deemed to be owned beneficially by more than
one
shareholder under SEC rules.
Name
|
Amount
and Nature of
Beneficial
Ownership
|
Percent
of Class
|
|
|
|
|
Trust
Managers and Executive Officers
|
|
|
|
Stanford
Alexander
|
5,462,130
|
(1)
|
6.1%
|
Andrew
M. Alexander
|
1,525,836
|
(2)
|
1.7%
|
J.
Murry Bowden
|
18,115
|
|
*
|
James
W. Crownover
|
11,665
|
|
*
|
Robert
J. Cruikshank
|
6,865
|
|
*
|
Martin
Debrovner
|
429,928
|
(3)
|
*
|
Melvin
A. Dow
|
1,138,237
|
(4)
|
1.3%
|
Stephen
A. Lasher
|
651,115
|
(5)
|
*
|
Douglas
W. Schnitzer
|
1,421,420
|
(6)
|
1.6%
|
Marc
J. Shapiro
|
38,140
|
|
*
|
Johnny
Hendrix
|
55,509
|
(7)
|
*
|
Stephen
C. Richter
|
159,220
|
(8)
|
*
|
All
trust managers and executive officers as
a group (12 persons)
|
10,918,180
|
(9)
|
10.7%
|
Five
Percent Shareholder
|
|
|
|
Barclays
Global Investors NA
|
5,016,585
|
(10)
|
5.6%
|
___________
* Beneficial
ownership of less than 1% of the class is omitted.
(1)
|
Includes
887,618 shares held by various trusts for the benefit of Mr. Alexander’s
children and 667,518 shares for which voting and investment power
are
shared with Andrew M. Alexander and Melvin A. Dow, 87,437 shares
that may
be purchased by Mr. Alexander upon exercise of share options that
are
currently exercisable or that will become exercisable on or before
April
18, 2006. Also includes 1,012,670 shares held by two charitable
foundations, over which shares Mr. Alexander and his wife Joan have
voting
and investment power.
|
(2)
|
Includes
667,518 shares over which Messrs. S. Alexander and Dow have shared
voting
and investment power, and 86,042 shares that Mr. A. Alexander may
purchase
upon the exercise of share options that will be exercisable on or
before
April 18, 2006. Also includes 56,250 shares held by a charitable
foundation, over which shares Mr. A. Alexander and his wife Julie
have
voting and investment power.
|
(3)
|
Includes
40,997 shares held in trust for the benefit of Mr. Debrovner’s children,
for which he has voting and investment power, and 39,082 shares that
may
be purchased upon the exercise of share options that will be exercisable
on or before April 18, 2006.
|
(4)
|
Includes
667,518 shares over which Messrs. S. Alexander and A. Alexander have
shared voting and investment power.
|
(5)
|
Includes
112,500 shares held by trusts for the benefit of Mr. Lasher’s children,
over which Mr. Lasher exercises voting and investment power.
|
(6)
|
Mr.
Schnitzer owns 3,290 shares individually. With respect to the remaining
shares beneficially owned, Mr. Schnitzer shares voting and investment
power with Joan Weingarten Schnitzer under trusts for Joan Weingarten
Schnitzer.
|
(7)
|
Includes
5,373 shares
that may be purchased upon the exercise of share options that will
be
exercisable
|
|
on
or before April 18, 2006.
|
(8)
|
Includes
7,818 shares held in trust for the benefit of Mr. Richter’s children, for
which he has voting and investment power, and 37,187 shares that
may be
purchased upon the exercise of share options that will be exercisable
on
or before April 18, 2006.
|
(9)
|
Includes
255,121 shares that may be purchased upon the exercise of share options
that will be exercisable on or before April 18, 2006.
|
(10)
|
Pursuant
to information contained in a Schedule 13G filed by or on behalf
of the
beneficial owners with the SEC on January 27, 2006. The Schedule
13G lists
the address of Barclays Global Investors NA/CA, 45 Fremont Street,
17th
floor, San Francisco, CA 94105.
|
We
are
pleased to report that management, employees, trust managers and their extended
families own, in the aggregate, 12.9% of our outstanding common shares as of
February 17, 2006, not including any unexercised share options.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires our trust managers and
executive officers, and persons who own more than 10% of a registered class
of
our equity securities, to file reports of holdings and transactions in our
securities with the SEC and the NYSE. Executive officers, trust managers and
greater than 10% beneficial owners are required by applicable regulations to
furnish us with copies of all Section 16(a) forms they file with the
SEC.
Based
solely upon a review of the reports furnished to us with respect to fiscal
2005,
we believe that all SEC filing requirements applicable to our trust managers,
executive officers and 10% beneficial owners were satisfied.
EXECUTIVE
OFFICERS
No
trust
manager or executive officer was selected as a result of any arrangement or
understanding between the trust manager or executive officer and any other
person. All executive officers are elected annually by, and serve at the
discretion of, the board of trust managers.
Our
executive officers are as follows:
Name
|
Age
|
Position
|
Recent
Business Experience
|
|
|
|
|
Stanford
Alexander
|
77
|
Chairman
of the Board
|
See
“Election of Trust Managers”
|
|
|
|
|
Andrew
M. Alexander
|
49
|
President
and Chief Executive Officer
|
See
“Election of Trust Managers”
|
|
|
|
|
Martin
Debrovner
|
69
|
Vice
Chairman
|
1997
to Present - Vice Chairman; 1993 to 1997 - President and Chief
Operating Officer
|
|
|
|
|
Stephen
C. Richter
|
51
|
Executive
Vice President and Chief Financial Officer
|
Appointed
Executive Vice President, February 2005; 2000 to 2004 - Senior Vice
President and Chief Financial Officer; 1997 to 2000 - Senior Vice
President and Treasurer
|
|
|
|
|
Johnny
Hendrix
|
48
|
Executive
Vice President/
Asset
Management
|
Appointed
Executive Vice President, February 2005; 2001 to 2004 - Senior Vice
President/Director of Leasing; 1998 to 2000 - Vice President/Associate
Director of Leasing
|
EXECUTIVE
COMPENSATION
Compensation
of Executive Officers
The
following table summarizes the compensation paid by us for each of the fiscal
years ended December 31, 2005, 2004 and 2003 to the Chief Executive Officer
and the four other most highly compensated executive officers who received
a
total annual salary and bonus in excess of $100,000 in fiscal 2005.
|
|
|
|
Annual
Compensation
|
|
Long-Term
Compensation Awards
|
|
|
|
Name
and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Restricted
Share Awards ($)
|
|
Securities
Underlying Options/SARs
(#)
(1)
|
|
All
Other Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanford
Alexander
|
|
|
2005
|
|
$
|
625,000
|
|
$
|
375,000
|
|
$
|
325,380
|
(2)
|
|
86,908
|
|
$
|
7,912
|
(7)
|
Chairman
|
|
|
2004
|
|
|
600,000
|
|
|
471,500
|
|
|
279,999
|
|
|
58,455
|
|
|
9,831
|
|
|
|
|
2003
|
|
|
575,000
|
|
|
345,000
|
|
|
237,519
|
|
|
78,991
|
|
|
10,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew
M. Alexander
|
|
|
2005
|
|
|
650,000
|
|
|
487,500
|
|
|
400,367
|
(3)
|
|
106,962
|
|
|
778,513
|
(8)
|
President
and Chief
|
|
|
2004
|
|
|
625,000
|
|
|
596,563
|
|
|
337,517
|
|
|
70,459
|
|
|
296,336
|
|
Executive
Officer
|
|
|
2003
|
|
|
575,000
|
|
|
345,000
|
|
|
275,022
|
|
|
91,465
|
|
|
170,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin
Debrovner
|
|
|
2005
|
|
|
475,000
|
|
|
237,500
|
|
|
230,384
|
(4)
|
|
61,507
|
|
|
586,818
|
(9)
|
Vice
Chairman
|
|
|
2004
|
|
|
450,000
|
|
|
288,500
|
|
|
199,982
|
|
|
41,754
|
|
|
64,082
|
|
|
|
|
2003
|
|
|
425,000
|
|
|
178,500
|
|
|
162,513
|
|
|
54,047
|
|
|
9,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen
C. Richter
|
|
|
2005
|
|
|
330,000
|
|
|
115,500
|
|
|
100,606
|
(5)
|
|
26,811
|
|
|
225,974
|
(10)
|
Executive
Vice
|
|
|
2004
|
|
|
315,000
|
|
|
125,213
|
|
|
80,056
|
|
|
16,712
|
|
|
108,579
|
|
President/Chief
Financial Officer
|
|
|
2003
|
|
|
300,000
|
|
|
103,500
|
|
|
70,628
|
|
|
23,486
|
|
|
79,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Johnny
L. Hendrix
|
|
|
2005
|
|
|
300,000
|
|
|
126,000
|
|
|
96,230
|
(6)
|
|
25,638
|
|
|
176,669
|
(11)
|
Executive
Vice
|
|
|
2004
|
|
|
285,000
|
|
|
150,335
|
|
|
79,063
|
|
|
16,505
|
|
|
88,760
|
|
President/
|
|
|
2003
|
|
|
273,000
|
|
|
125,580
|
|
|
69,771
|
|
|
23,199
|
|
|
69,064
|
|
Asset
Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
No
SARs were granted during 2003, 2004 or
2005.
|
(2)
|
Of
the 8,690 restricted shares awarded in 2005, 1,738 will vest on each
of
December 5, 2006, 2007, 2008, 2009 and 2010. Ten shares were also
gifted
as restricted shares to employees with a value of $374. Dividends
are
payable on restricted shares. As of December 31, 2005, Mr. S. Alexander
held 19,063 restricted shares having a market value on that date
of
$720,772.
|
(3)
|
Of
the 10,695 restricted shares awarded in 2005, 2,139 will vest on
each of
December 5, 2006, 2007, 2008, 2009 and 2010. Ten shares were also
gifted
as restricted shares to employees with a value of $374. Dividends
are
payable on restricted shares. As of December 31, 2005, Mr. A. Alexander
held 22,973 restricted shares having a market value on that date
of
$868,609.
|
(4)
|
Of
the 6,150 restricted shares awarded in 2005, 1,230 will vest on each
of
December 5, 2006, 2007, 2008, 2009 and 2010. Ten shares were also
gifted
as restricted shares to employees with a value of $374. Dividends
are
payable on restricted shares. As of December 31, 2005, Mr. Debrovner
held
16,583 restricted shares having a market value on that date of
$507,297.
|
(5)
|
Of
the 2,680 restricted shares awarded in 2005, 536 will vest on each
of
December 5, 2006, 2007, 2008, 2009 and 2010. Ten shares were also
gifted
as restricted shares to employees with a value of $374. Dividends
are
payable on restricted shares. As of December 31, 2005, Mr. Richter
held
7,042 restricted shares having a market value on that date of
$215,555.
|
(6)
|
Of
the 2,563 restricted shares awarded in 2005, 512 will vest on each
of
December 5, 2006, 2007, 2008, 2009 and 2010. Ten shares were also
gifted
as restricted shares to employees with a value of $374. Dividends
are
payable on restricted shares. As of December 31, 2005, Mr. Hendrix
held
6,871 restricted shares having a market value on that date of
$209,732.
|
(7)
|
Includes
$6,300 for our contributions to the 401(k) Savings and Investment
Plan on
behalf of Mr. S. Alexander.
Also includes $149 for federal income taxes paid on 10 shares of
WRI stock
gifted to employees and $1,463 for expenses of personal usage of
company
automobile.
|
(8)
|
Includes
$6,300 for our contributions to the 401(k) Savings and Investment
Plan on
behalf of Mr. A. Alexander and $764,708 contributed to the Supplemental
Retirement Plan (which includes $269,237 for the year 2004). Also
includes
$192 for federal income taxes paid on 10 shares of WRI stock gifted
to
employees and $7,313 for expenses of personal usage of company
automobile.
|
(9)
|
Includes
$6,300 for our contributions to the 401(k) Savings and Investment
Plan on
behalf of Mr. Debrovner and $577,751 contributed to the Supplemental
Retirement Plan (which includes $208,257 for the year 2004). Also
includes
$153 for federal income taxes paid on 10 shares of WRI stock gifted
to
employees and $2,614 for expenses of personal usage of company
automobile.
|
(10)
|
Includes
$6,300 for our contributions to the 401(k) Savings and Investment
Plan on
behalf of Mr. Richter and $214,885 contributed to the Supplemental
Retirement Plan (which includes $87,645 for the year 2004). Also
includes
$64 for federal income taxes paid on 10 shares of WRI stock gifted
to
employees and $4,725 for expenses of personal usage of company
automobile.
|
(11)
|
Includes
$6,300 for our contributions to the 401(k) Savings and Investment
Plan on
behalf of Mr. Hendrix and $164,331 contributed to the Supplemental
Retirement Plan (which includes $70,828 for the year 2004). Also
includes
$109 for federal income taxes paid on 10 shares of WRI stock gifted
to
employees and $5,929 for expenses of personal usage of company
automobile.
|
Option
Grants in 2005
The
following table sets forth information concerning grants of share options during
2005 to each of the executive officers named in the Executive Compensation
Table
who were executive officers in 2005 and the potential realizable value of the
options at assumed annual rates of share price appreciation for the option
term.
OPTION
GRANTS IN 2005
|
|
|
|
Individual
Grants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
of Total
|
|
|
|
|
|
Potential
Realizable Value
|
|
|
|
Number
of
|
|
Options
|
|
|
|
|
|
at
Assumed Annual Rate
|
|
|
|
Securities
|
|
Granted
to
|
|
Exercise
|
|
|
|
of
Share Price
|
|
|
|
Underlying
|
|
Employees
|
|
or
Base
|
|
|
|
Appreciation
For Option
|
|
|
|
Options
|
|
In
Fiscal
|
|
Price
|
|
Expiration
|
|
Term
(2)
|
|
Name
|
|
Granted
(#)
|
|
Year
|
|
($/Sh)
|
|
Date
|
|
5%
($)
|
|
10%
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanford
Alexander
|
|
|
86,898
|
(1)
|
|
16.1
|
|
$
|
37.40
|
|
|
12-5-15
|
|
$
|
2,045,313
|
|
$
|
5,181,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew
M. Alexander
|
|
|
106,952
|
|
|
19.8
|
|
|
37.40
|
|
|
12-5-15
|
|
|
2,517,323
|
|
|
6,377,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin
Debrovner
|
|
|
61,497
|
|
|
11.4
|
|
|
37.40
|
|
|
12-5-15
|
|
|
1,447,451
|
|
|
3,667,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen
C. Richter
|
|
|
26,801
|
|
|
5.0
|
|
|
37.40
|
|
|
12-5-15
|
|
|
630,813
|
|
|
1,598,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Johnny
L. Hendrix
|
|
|
25,628
|
|
|
4.7
|
|
|
37.40
|
|
|
12-5-15
|
|
|
603,205
|
|
|
1,528,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The
plans governing share option grants provide that the option price
per
share shall not be less than 100% of the market value per share of
our
common shares at the grant date. The term of any option is no more
than 10
|
|
years
from the date of grant. Options granted in 2005 become exercisable
after
one year in five equal annual installments of 20%. Shares were
granted
based on an average price for December 5,
2005.
|
(2) |
The
dollar amounts under these columns are the result of calculations
assuming
annual rates of share price appreciation over the option term at
the 5%
and 10% rates set by SEC rules and are not intended to forecast possible
future appreciation, if any, in our common share
price.
|
Option
Exercises and Fiscal Year-End Option Values
The
following table sets forth certain information concerning exercises of share
options during 2005 by our named executive officers who were executive officers
in 2005 and the value of the unexercised options as of December 31, 2005, based
on the closing price of $37.81 per share of our common shares on December 30,
2005.
|
|
|
|
|
|
Number
of Securities Underlying
|
|
|
|
Name
|
|
Shares
Acquired on Exercise (#)
|
|
Value
Realized
|
|
Number
of Unexercised Options Held at
December 31, 2005
|
|
Value
of Unexercised In-the-Money Options at December 31,
2005
|
|
|
|
|
|
|
|
Exercisable
|
|
Unexercisable
|
|
Exercisable
|
|
Unexercisable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanford
Alexander
|
|
|
33,734
|
|
$
|
610,844
|
|
|
87,437
|
|
|
302,695
|
|
$
|
982,545
|
|
$
|
2,354,599
|
|
Andrew
M. Alexander
|
|
|
131,625
|
|
|
2,719,517
|
|
|
185,486
|
|
|
412,244
|
|
|
2,580,900
|
|
|
3,486,043
|
|
Martin
Debrovner
|
|
|
21,707
|
|
|
343,688
|
|
|
66,074
|
|
|
227,146
|
|
|
769,988
|
|
|
1,873,016
|
|
Stephen
C. Richter
|
|
|
5,000
|
|
|
99,405
|
|
|
56,992
|
|
|
101,796
|
|
|
867,185
|
|
|
868,317
|
|
Johnny
L. Hendrix
|
|
|
-
|
|
|
-
|
|
|
22,589
|
|
|
95,906
|
|
|
274,929
|
|
|
792,978
|
|
Retirement
Plan
The
following table shows the approximate annual retirement benefits under our
non-contributory retirement plan (before the reduction made for social security
benefits) to eligible grandfathered 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
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
|
* |
|
600,000
|
|
|
135,000
|
|
|
|
|
180,000
|
* |
|
|
|
225,000
|
* |
|
|
|
270,000
|
* |
|
|
|
315,000
|
* |
|
|
|
360,000
|
* |
|
700,000
|
|
|
157,500
|
|
|
|
|
210,000
|
* |
|
|
|
262,500
|
* |
|
|
|
315,000
|
* |
|
|
|
367,500
|
* |
|
|
|
420,000
|
* |
|
800,000
|
|
|
180,000
|
* |
|
|
|
240,000
|
* |
|
|
|
300,000
|
* |
|
|
|
360,000
|
* |
|
|
|
420,000
|
* |
|
|
|
480,000
|
* |
|
900,000
|
|
|
202,500
|
* |
|
|
|
270,000
|
* |
|
|
|
337,500
|
* |
|
|
|
405,000
|
* |
|
|
|
472,500
|
* |
|
|
|
540,000
|
* |
|
1,000,000
|
|
|
225,000
|
* |
|
|
|
300,000
|
* |
|
|
|
375,000
|
* |
|
|
|
450,000
|
* |
|
|
|
525,000
|
* |
|
|
|
600,000
|
* |
___________
*
Currently, the maximum annual pension benefit, which currently may be paid
under
a qualified plan is $170,000 (subject to certain grandfather rules) for
limitation years beginning in 2005.
**
Compensation
in excess of $200,000 is disregarded with respect to all plan years before
2004,
compensation in excess of $205,000 is disregarded with respect to the 2004
plan
year, and compensation in excess of $210,000 is disregarded with respect to
the
2005 plan year. Accordingly, the compensation of each named executive officer
included in the Executive Compensation Table, which was covered by the
non-contributory retirement plan was limited to $210,000.
The
compensation used in computing average monthly compensation is the total of
all
amounts paid by us, plus amounts electively deferred by the employee under
our
savings plan, 125 cafeteria plan and nonqualified deferred compensation plan.
Credited years of service for named executive officers as of March 15, 2006
are
as follows: Mr. S. Alexander, 52 years; Mr. Debrovner, 38 years; Mr. A.
Alexander, 28 years; Mr. Hendrix, 20 years and Mr. Richter, 26 years. Mr. S.
Alexander and Mr. Debrovner commenced receiving benefits under the Plan in
January 1996 and June 2001, respectively.
The
non-contributory pension plan converted to a cash balance retirement plan on
April 1, 2002. A grandfathered participant will remain covered by the provisions
of the plan prior to the conversion to the cash balance plan. A grandfathered
participant is any participant born prior to January 1, 1952, who was hired
prior to January 1,1997, and was an active employee on April 1, 2002. The
retirement plan pays benefits to grandfathered participants in the event of
death, disability, retirement or other termination of employment after the
employee meets certain vesting requirements (all grandfathered participants
are
100% vested). 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, 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 1/3
years).
Cash
Balance Retirement Plan
The
following table shows the approximate annual retirement benefits under our
non-contributory cash balance retirement plan 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. No opening
balance was included in the table.
|
|
Estimated
Annual Benefits Upon Retirement
Years
of Service
|
Average
Compensation**
|
|
15
|
|
|
|
20
|
|
|
25
|
|
|
30
|
|
|
35
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
200,000
|
|
$
|
10,928
|
|
|
|
$
|
16,958
|
|
|
|
$
|
25,228
|
|
|
|
$
|
35,338
|
|
|
|
$
|
47,698
|
|
|
|
$
|
62,809
|
|
|
225,000
|
|
|
12,295
|
|
|
|
|
19,077
|
|
|
|
|
28,381
|
|
|
|
|
39,756
|
|
|
|
|
53,661
|
|
|
|
|
70,660
|
|
|
250,000
|
|
|
13,661
|
|
|
|
|
21,197
|
|
|
|
|
31,535
|
|
|
|
|
44,173
|
|
|
|
|
59,623
|
|
|
|
|
78,511
|
|
|
300,000
|
|
|
16,393
|
|
|
|
|
25,437
|
|
|
|
|
37,842
|
|
|
|
|
53,008
|
|
|
|
|
71,548
|
|
|
|
|
94,213
|
|
|
350,000
|
|
|
19,125
|
|
|
|
|
29,676
|
|
|
|
|
44,149
|
|
|
|
|
61,842
|
|
|
|
|
83,472
|
|
|
|
|
109,916
|
|
|
400,000
|
|
|
21,857
|
|
|
|
|
33,915
|
|
|
|
|
50,456
|
|
|
|
|
70,677
|
|
|
|
|
95,397
|
|
|
|
|
125,618
|
|
|
450,000
|
|
|
24,589
|
|
|
|
|
38,155
|
|
|
|
|
56,763
|
|
|
|
|
79,511
|
|
|
|
|
107,322
|
|
|
|
|
141,320
|
|
|
500,000
|
|
|
27,321
|
|
|
|
|
42,394
|
|
|
|
|
63,070
|
|
|
|
|
88,346
|
|
|
|
|
119,246
|
|
|
|
|
157,022
|
|
|
600,000
|
|
|
32,785
|
|
|
|
|
50,873
|
|
|
|
|
75,684
|
|
|
|
|
106,015
|
|
|
|
|
143,095
|
|
|
|
|
188,427
|
* |
|
700,000
|
|
|
38,250
|
|
|
|
|
59,352
|
|
|
|
|
88,298
|
|
|
|
|
123,684
|
|
|
|
|
166,945
|
|
|
|
|
219,831
|
* |
|
800,000
|
|
|
43,714
|
|
|
|
|
67,831
|
|
|
|
|
100,912
|
|
|
|
|
141,353
|
|
|
|
|
190,794
|
* |
|
|
|
251,236
|
* |
|
900,000
|
|
|
49,178
|
|
|
|
|
76,310
|
|
|
|
|
113,526
|
|
|
|
|
159,023
|
|
|
|
|
214,643
|
* |
|
|
|
282,640
|
* |
|
1,000,000 |
|
|
54,642 |
|
|
|
|
84,789 |
|
|
|
|
126,140 |
|
|
|
|
176,692 |
* |
|
|
|
238,492 |
* |
|
|
|
314,045 |
* |
___________________
* Currently,
the maximum annual pension benefit, which currently may be paid under a
qualified plan is $170,000 (subject to certain grandfather rules) for limitation
years beginning in 2005.
** Compensation
in excess of $200,000 is disregarded with respect to all plan years before
2004,
compensation in excess of $205,000 is disregarded with respect to the 2004
plan
year, and compensation in excess of $210,000 is disregarded with respect to
the
2005 plan year. Accordingly, the compensation of each named executive officer
included in the Executive Compensation Table, which was covered by the
non-contributory retirement plan was limited to $210,000.
The
non-contributory cash balance retirement plan covers all employees beginning
on
April 1, 2002 with no age or service minimum requirement. However, leased
employees and employees covered by a collective bargaining agreement will not
participate in the plan. The cash balance plan pays benefits in the event of
death (if married), retirement or termination of employment after the
participant meets certain vesting requirements (generally 100% vested after
5
years of service). The amount of the monthly retirement benefit payable
beginning at age 65, the normal retirement age, is equal to the greater of
(i)
the monthly benefit that is actuarial equivalent of the cash balance account,
or
(ii) the accrued monthly benefit under the prior plan as of January 1, 2002.
The
opening balance of a cash balance participant, who was an active participant
in
the plan on January 2, 2002 and was an active employee on April 1, 2002, is
the
actuarial equivalent present value of his frozen accrued benefit on January
1,
2002. Interest Credits are determined on the last day of each plan years based
on the annual rate of interest on the ten-year US Treasury Bill Constant
Maturities on October 1 of the immediately preceding the Plan Year. A Service
Credit will be credited to the cash balance account of any cash balance
participant who is an active participant at any time during the plan year.
The
amount of the Service Credit shall be a percentage of the participant’s earnings
for the plan year based on the years of credited service on the last day of
the
prior Plan Year.
Years
of Credited Service
|
|
Percentage
of Earnings
|
0
through 9.99
|
|
3%
|
10
through 19.99
|
|
4%
|
20
or more
|
|
5%
|
Change
In Control Arrangements
Messrs.
S. Alexander, A. Alexander and M. Debrovner have not entered into change in
control arrangements with us.
We
have
however, entered into a severance and change in control agreement with each
of
Mr. Hendrix and Mr. Richter which becomes operative only upon a change in
control. All other Vice Presidents have also entered into the same change in
control agreement with us. A change in control is deemed to occur upon any
one
of five events: (1) we merge, consolidate or reorganize into or with another
corporation or legal entity and we are not the surviving entity; (2) we sell
or
otherwise transfer 50% or more of our assets to one entity or in a series of
related transactions; (3) any person or group acquires 25% or more of our then
outstanding voting shares; (4) we file a report or proxy statement with the
SEC
disclosing that a change in control has occurred or will occur; or (5) if,
during any 12-month period, trust managers at the beginning of the 12-month
period cease to constitute a majority of the trust managers.
If
Mr.
Hendrix, Mr. Richter or any other Vice President is terminated under specified
conditions within one year following a change in control, he will be entitled
to
a severance benefit in an amount equal to (1) 2.99 times his annualized base
salary as of the first date constituting a change in control or, if greater,
(2)
2.99 times his highest base salary in the five fiscal years preceding the first
event constituting a change in control, plus, in either case, 2.99 times his
targeted bonus for the fiscal year in which the first
event
constituting a change in control occurs. In addition, Mr. Hendrix, Mr. Richter
or any other Vice President, as applicable, is entitled to receive an additional
payment or payments to the extent the severance benefit is subject to the excise
tax imposed by Section 4999 of the Code or any similar tax imposed by state
or
local law, or any penalties or interest with respect to the tax. Mr. Hendrix
and
Mr. Richter will also receive one year of employee benefits coverage
substantially similar to what he received or was entitled to receive prior
to
the change in control.
Management
Development and Compensation Committee Report On Executive
Compensation
Overview
Our
executive compensation is supervised by the management development and
compensation committee of the board of trust managers which is comprised
entirely of independent trust managers as determined by the board within the
meaning of the applicable NYSE listing standards currently in effect. The board
designates the members and the chairman of the committee on an annual basis.
The
committee is responsible for developing, administering and monitoring the
executive compensation programs, ensuring that the executive compensation
programs are designed to be consistent with our corporate strategies and
business objectives; reviewing and approving all compensation plans affecting
senior management; and determining the specific amounts of compensation for
the
officers. Additionally the committee is responsible for administering our share
option and deferred compensation plans. Our share option programs are for all
of
our associates, including our officers. The specific duties and responsibilities
of the committee are described in the charter of the management development
and
compensation committee, which is available on our Web site at www.weingarten.com.
The
committee met three times during fiscal 2005. The meetings generally focus
on
long-term management development, the compensation policy including both
short-term and long-term forms of compensation, the review of best practices
in
executive compensation, the evaluation of the independent consultants’ report to
the committee on the compensation of the executive officers, and the evaluation
of the CEO’s performance. All committee members are actively engaged in the
review of matters presented. The committee has direct access to independent
compensation consultants and other experts for survey data, best practices
and
other information, as it deems appropriate.
Compensation
Philosophy and Objectives.
The
members of the committee attribute our historical success in large part to
the
talent and dedication of our associates and, in particular to the management
and
leadership efforts of our executive officers. The goal of our compensation
program is to attract, motivate and retain the highly talented individuals
needed to operate, acquire, develop and re-merchandise our properties for the
long-term. We seek to provide executive compensation that will support the
achievement of our financial and growth goals and objectives. When our
performance is better than the goals and objectives set for the performance
period, our associates should be paid more, and when our performance does not
meet one or more of our financial or other objectives, any incentive award
payment is at the committee’s discretion. In order to achieve our goals and
objectives, we have structured an incentive based compensation system tied
to
our financial performance and portfolio growth. We will attempt to maximize
the
amount of compensation expense that is tax deductible where consistent with
our
compensation philosophy.
Our
committee annually reviews our compensation programs to ensure that pay levels
and incentive opportunities are competitive and reflect our performance. In
general, the proportion of an
officer's
total compensation that is dependent on our performance should increase as
the
scope and level of the individual's business responsibilities increase.
Through
the design of our compensation program, we look to balance the focus of our
officers on achieving strong short-term, or annual results in a manner that
will
ensure our long-term viability and success. Therefore, to reinforce the
importance of balancing these perspectives, our officers are regularly provided
with both annual and long-term incentives. Thus, we generally compensate our
officers through a combination of base salary, annual bonus compensation and
annual awards of share options and restricted shares. Our Chairman, Chief
Executive Officer and the Vice Chairman, generally have 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, target bonuses for our executive officers are within
30%
to 75% of the base compensation of the individual, 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 Company’s performance over time, each executive officer’s performance and
subjective features like individual experience. The committee periodically
evaluates the appropriate combination of cash and stock-based compensation,
and
weighs the competitiveness of our plans in relation to compensation practices
of
companies of similar size, complexity and, where comparable, in the same
industry. The determination of comparable companies was based upon selections
made by both us, 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 NAREIT All Equity Index described on page 21 are
comparable in size and complexity, and not all comparable real estate companies
are REITs. Actual salaries are based on an executive officer’s skill and ability
to influence our financial performance and growth in both the short-term and
long-term. During 2005, our committee used compensation information provided
by
an outside consultant, Ferguson Partners Ltd., in establishing base
salaries.
Bonus
Compensation
We
design
the annual incentive or bonus compensation to align pay with our annual
performance. We establish, at the beginning of each year, the key performance
measures we believe require the special focus of all of our associates,
including our officers, to move the business forward and create value for our
shareholders. All of our officers participate in our bonus program. Each
individual’s eligible bonus is based on a percentage of the individual’s base
salary. This bonus program has been in effect for more than 25 years. The bonus
percentage is also based on a competitive analysis and is reviewed with the
independent consultants.
Again,
the officer’s ability to influence our success is considered in establishing
this percentage. Incentive compensation earned is determined annually on the
basis of performance against the pre-established goals and objectives. Other
than for the Chairman, Vice Chairman and Chief Executive Officer, the eligible
bonus percentage for officers is generally allocated 50% to company performance
and 50% to the individual performance. Specific individual goals for each
officer are established at the beginning of the year and are tied to the
functional responsibilities of each executive officer. Individual goals include
both objective financial measures as well as subjective factors such as
efficiency in managing capital resources, successful acquisitions and new
developments, good investor relations and the continued development of
management. Company performance is primarily based on operating performance,
as
measured by factors such as our funds from operations, and achieving the
appropriate growth objective, relating primarily to portfolio acquisitions
and
new development. Other than the allocation between company performance and
individual performance, no specific weights are assigned to the individual
goals. The bonuses of the Chairman, Vice Chairman and Chief Executive Officer
are based
entirely
on our performance. Our performance targets and all individual goals were met
in
fiscal 2005 and, consequently, the executive officers were eligible for full
bonus awards.
Share
Incentive Program
Our
committee strongly believes that by providing our officers with an opportunity
to increase their ownership of common shares, the interests of shareholders
and
the officers will be closely aligned. Therefore, the long-term incentive
component for our officer’s total compensation program is provided in two forms,
share options and restricted share awards. Recently the committee has altered
the allocation between restricted shares and share options, placing more
emphasis on restricted shares. The management development and compensation
committee feels that the use of both forms of long-term incentive compensation
is appropriate. Thus, our officers are eligible to receive both restricted
share
awards and share options annually, giving them the right to purchase our common
shares. The number of share options granted to an executive officer is based
on
practices of the same comparable companies used to define base salary levels.
Share awards and options are a significant part of our executive compensation
system, and these awards and options are issued on an annual basis.
Because
of our strong belief in aligning our officers with the interest of shareholders
through share ownership, we have provided guidelines for ownership of our shares
over time. Our Chairman, CEO, and Vice Chairman must own shares equal to five
times their base compensation, executive vice presidents three times, senior
vice presidents 2.5 times and vice presidents one time. These officers are
provided various ways to become shareholders including the share incentive
program, an employee share purchase program, and our 401(k) savings
plan.
2005
Performance
The
committee determines base salary and incentive compensation of senior management
based, in part, on the Company’s performance. In evaluating 2005 performance,
the committee noted the Company’s ability, under the direction of senior
management, to increase its Funds from Operations, or FFO, for the year ended
December 31, 2005 to $244.3 million as compared to $219.4 million for the year
ended December 31, 2004. On a diluted per share basis, FFO increased 7.9% to
$2.72 for the year ended December 31, 2005 from $2.52 for the previous year.
FFO
is a widely accepted supplemental non-GAAP measure of performance for real
estate investment trusts.
The
Company’s improved performance reflects the combined effect of (i) acquisitions
of operating properties during 2005 and 2004 providing base minimum rentals
of
$31.8 million for the year ended December 31, 2005 and (ii) same-property net
operating income growth of 4.6 % for the year ended December 31, 2005 as
compared to 3.0% December 31, 2004.
As
a
result of the Company’s improved 2005 performance, the Board of Directors
increased the annualized cash dividend beginning in 2006 by 5.7% to $1.86 per
share as compared to $1.76 per share for 2005.
The
Executive Compensation Committee believes the Company’s 2005 financial and
operating performance underscores the Company’s long-term strategy to maintain a
strong balance sheet while investing selectively in order to enhance stockholder
value.
The
Committee determined bonuses and stock awards for senior management in 2005
based on its analysis of the Company’s 2005 performance and the ability of
individual members of management to achieve targeted earnings, operations and
financing objectives.
Chief
Executive Officer Performance Evaluation
The
compensation of Mr. A. Alexander, Chief Executive Officer, for the year ended
December 31, 2005 was determined in accordance with the criteria discussed
above. In addition, the committee annually reviews and approves the objectives
for the Chief Executive Officer, including financial performance of the Company
and growth in real estate assets. The committee has reviewed all components
of
Mr. Alexander’s compensation, including base salary, bonus compensation and the
share incentive program.
As
we met
our 2005 company performance goals, Mr. A. Alexander received 100% of his
potential bonus for 2005. Mr. A. Alexander’s bonus in 2005 was lower than his
2004 bonus as we exceeded our 2004 compensation goals resulting in Mr. A.
Alexander receiving 115% of his 2004 targeted bonus. The management development
and compensation committee finds Mr. A. Alexander’s total compensation to be
reasonable and not excessive in the aggregate. In considering the components
of
Mr. A. Alexander’s total compensation, the committee takes into account the
aggregate amounts and mix of all components.
Respectfully
Submitted,
Management
Development and Compensation Committee
Robert
J.
Cruikshank, 2005 Chairman
Stephen
A. Lasher
Marc
J.
Shapiro
Performance
Graph
SEC
rules
require the presentation of a line graph comparing, over a period of five years,
the cumulative total shareholder return to a performance indicator of a broad
equity market index and either a nationally recognized industry index or a
peer
group index constructed by us.
The
graph
below provides an indicator of cumulative total shareholder returns for us
as
compared with the S&P 500 Stock Index and the NAREIT All Equity Index,
weighted by market value at each measurement point. The graph assumes that
$100
was invested on December 31, 2000 in our common shares and that all dividends
were reinvested by the shareholder.
Comparison
of Five Year Cumulative Return
|
|
|
2001
|
|
|
2002
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
Weingarten
|
|
|
117.56
|
|
|
144.03
|
|
|
183.19
|
|
|
260.82
|
|
|
257.52
|
|
S&P
500 Index
|
|
|
88.11
|
|
|
68.64
|
|
|
88.33
|
|
|
97.94
|
|
|
102.75
|
|
The
NAREIT All Equity Index
|
|
|
113.93
|
|
|
118.29
|
|
|
162.21
|
|
|
213.43
|
|
|
239.39
|
|
There
can
be no assurance that our share performance will continue into the future with
the same or similar trends depicted in the graph above. We will not make or
endorse any predications as to future share performance.
Report
of the Audit Committee of the Board of Trust Managers
The
audit
committee is composed of four independent non-employee trust managers and
operates under a written charter adopted by the board (a copy of which is
available on our Web site). The board has determined that each committee member
is independent within the meaning of the applicable NYSE listing standards
currently in effect.
Management
is responsible for the financial reporting process, including the system of
internal controls, and for the preparation of consolidated financial statements
in accordance with GAAP. Our independent registered public accounting firm
is
responsible for auditing those financial statements and expressing an opinion
as
to their conformity with GAAP. The committee’s responsibility is to oversee and
review these processes. We are not, however, professionally engaged in the
practice of accounting or auditing, and do not provide any expert or other
special assurance as to such financial statements concerning compliance with
the
laws, regulations or GAAP or as to the independence of the registered public
accounting firm. The committee relies, without independent verification, on
the
information provided to us and on the representations made by management and
the
independent registered public accounting firm. We held five meetings during
fiscal 2005. The meetings were designed, among other things, to facilitate
and
encourage communication among the committee, management, the internal audit
function and our independent registered public accounting firm, Deloitte &
Touche LLP (Deloitte). We discussed with Deloitte the overall scope and plans
for their audit. We met with Deloitte, with and without management present,
to
discuss the results of their examinations and their evaluations of our internal
controls.
We
have
reviewed and discussed the audited consolidated financial statements for the
fiscal year ended December 31, 2005 with management and Deloitte. We also
discussed with management and Deloitte the process used to support
certifications by our Chief Executive Officer and Chief Financial Officer that
are required by the SEC and the Sarbanes-Oxley Act of 2002 to accompany our
periodic filings with the SEC. In addition, we reviewed and discussed our
progress on complying with Section 404 of the Sarbanes-Oxley Act of 2002,
including the Public Company Accounting Oversight Board’s (PCAOB) Auditing
Standard No. 2 regarding the audit of internal control over financial
reporting.
In
addition, the audit committee obtained from Deloitte a formal written statement
describing all relationships between Deloitte and the company that might bear
on
Deloitte’s independence consistent with Independence Standards Board Standard
No. 1, “Independence Discussions with Audit Committees,” discussed with Deloitte
any relationships that may impact their objectivity and independence, and
satisfied itself as to their independence. When considering Deloitte’s
independence, we considered whether their provision of services to the company
beyond those rendered in connection with their audit of our consolidated
financial statements and reviews of our consolidated financial statements,
including in its Quarterly Reports on Form 10-Q, was compatible with maintaining
their independence. We also reviewed, among other things, the audit and
non-audit services performed by, and the amount of fees paid for such services
to, Deloitte. The audit committee also discussed and reviewed with the
independent registered public accounting firm all communications required by
generally accepted auditing standards, including those described in Statement
on
Auditing Standards (SAS) No. 61, as amended, “Communication with Audit
Committees,” SAS 99 “Consideration of Fraud in a Financial Statement Audit,” and
SEC rules discussed in Final Release Nos. 33-8183 and 33-8183a.
Based
on
our review and these meetings, discussions and reports, and subject to the
limitations on our role and responsibilities referred to above and in the audit
committee charter, we recommended to the board of trust managers (and the board
has approved) that the audited financial statements for the year ended December
31, 2005 be included in Weingarten’s Annual Report on Form 10-K. We have
selected Deloitte as our independent registered public accounting firm for
the
fiscal year ending December 31, 2006, and have presented the selection to the
shareholders for ratification.
The
undersigned members of the audit committee have furnished this report to the
board of trust managers.
Respectfully
Submitted,
Audit
Committee
James
W.
Crownover, 2005 Chairman
Robert
J.
Cruikshank
J.
Murry
Bowden
Douglas
Schnitzer
PROPOSAL
TWO
RATIFICATION
OF INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
The
audit
committee has appointed Deloitte & Touche LLP (Deloitte) as independent
registered public accounting firm to audit our financial statements for the
fiscal year ending December 31, 2006. During fiscal 2005, Deloitte served as
our
independent registered public accounting firm and also provided certain tax
and
other audit related services. Deloitte, or its predecessors, has served as
our
independent registered public account firm for more than 30 years and is
familiar with our affairs and financial procedures.
Principal
Accounting Firm Fees
Aggregate
fees billed to us for the fiscal years ended December 31, 2005, and 2004 by
Deloitte are set forth below:
|
|
2005
|
|
2004
|
|
|
|
($
in thousands)
|
|
Audit
Fees (a)
|
|
$
|
1,100.4
|
|
$
|
1,082.2
|
|
Audit-Related
Fees (b)
|
|
|
-
|
|
|
8.0
|
|
Tax
Fees (c)
|
|
|
405.7
|
|
|
312.6
|
|
All
Other Fees
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,506.1
|
|
$
|
1,402.8
|
|
|
(a)
|
Fees
for audit services billed in 2005 consisted of: audit of the Company’s
annual financial statements, audit of the Company’s internal control over
financial reporting, reviews of the Company’s quarterly financial
statements, consents and other services related to Securities and
Exchange
Commission matters.
|
Fees
for
audit services billed in 2004 consisted of: audit of the Company’s annual
financial statements, audit of the Company’s internal control over financial
reporting, reviews of the Company’s quarterly financial statements, statutory
and regulatory audits, consents and other services related to SEC
matters.
(b) |
Fees
for audit-related services billed in 2004 consisted of financial
accounting and reporting
consultations.
|
|
(c)
|
Fees
for tax services billed in 2005 and 2004 consisted of tax compliance
and
tax planning and advice. Fees for tax compliance services totaled
$367,600
and $279,300 in 2005 and 2004, respectively. Tax compliance services
are
services rendered based upon facts already in existence or transactions
that have already occurred to document, compute, and obtain government
approval for amounts to be included in tax filings and consisted
of
Federal, state and local income tax return assistance, research for
technical advice regarding technical terminations and disguised sales,
research for technical advice and analysis for the purpose of filing
amended returns and assistance with earnings and profits calculation
and
review.
|
Fees
for
tax planning and advice services totaled $38,100 and $33,300 in 2005 and 2004,
respectively. Tax planning and advice are services rendered with respect to
proposed transactions
or
that
alter a transaction to obtain a particular tax result. Such services consisted
of tax advice related to structuring certain proposed mergers, acquisitions
and
disposals, tax advice related to Internal Revenue Code §1031 exchanges and tax
advice related to an intra-group restructuring.
At
its
regularly scheduled and special meetings, the audit committee considers and
pre-approves any audit and non-audit services to be performed by our independent
accountants. The audit committee has delegated to its chairman, an independent
member of our board of trust managers, the authority to grant pre-approvals
of
non-audit services provided that any such pre-approval by the chairman shall
be
reported to the audit committee at its next scheduled meeting. However,
pre-approval of non-audit services is not required if (i) the aggregate amount
of non-audit services is less than 5% of the total amount paid by us to the
auditor during the fiscal year in which the non-audit services are provided;
(ii) such services were not recognized by us as non-audit services at the time
of the engagement; and (iii) such services are promptly brought to the attention
of the audit committee and, prior to completion of the audit, are approved
by
the audit committee or by one or more audit committee members who have been
delegated authority to grant approvals.
The
audit
committee has considered whether the provision of these services is compatible
with maintaining the independent accountants’ independence and has determined
that such services have not adversely affected Deloitte’s independence.
Representatives
of Deloitte will be present at the annual meeting and will have an opportunity
to make a statement, if they desire to do so, and to respond to appropriate
questions from shareholders.
The
board of trust managers unanimously recommends that you vote FOR the
ratification of independent registered public accounting firm as set forth
in
Proposal Two. Proxies solicited by the board of trust managers will be so voted
unless you specify otherwise in your proxy.
PROPOSAL
THREE
WEINGARTEN
REALTY INVESTORS
AMENDMENT
TO
2001
LONG TERM INCENTIVE PLAN
Our
board
of trust managers has approved an amendment to our 2001 Long Term Incentive
Plan
to change the number of common shares of beneficial interest issuable under
the
plan from the as adjusted number of 2,250,000 shares currently issuable
thereunder to 4,750,000 shares and has directed that the amendment to the plan
be submitted to the shareholders for approval. If approved, the second sentence
of Section 1.6 of the plan would be amended in its entirety to read as follows:
"Subject
to the provisions of Section 1.10, the number of Shares available under the
Plan
for the grant of Share Options and Restricted Shares shall not exceed 4,750,000
Shares in the aggregate."
In
the
opinion of our board of trust managers, it is appropriate to amend the plan
to
increase the number of shares issuable pursuant to awards granted under the
plan
because the board believes that providing share ownership opportunities to
employees of the company is in the best interests of the company and its
continued growth. We currently have only 666,000 shares left for issuance under
the plan, and our board believes the increased number will provide the company
a
sufficient number of shares for issuance for the remainder of the term of the
plan.
Purpose.
The
purpose of the plan is to secure for us and our shareholders the benefits
arising from share ownership by selected key employees, consultants and trust
managers of the company or its subsidiaries as the compensation committee may
from time to time determine. We believe that the possibility of participation
in
the plan through receipt of incentive share options, nonqualified share options
and common shares of beneficial interest that are restricted will provide
participants an incentive to perform more effectively and will assist us in
attracting and retaining people of outstanding talent and ability.
Administration.
The
plan is administered by the management development and executive compensation
committee, which consists solely of two or more non-employee trust managers.
All
questions of interpretation and application of the plan are determined by the
committee, and each award granted under the plan has a term selected by the
committee.
Participation.
All
regular, full-time employees, meaning an employee who works at least 30 hours
or
more per week, consultants and trust managers of the company or any subsidiary
of the company are eligible for selection to participate in the plan. The
committee will determine from time to time the individuals who are to receive
awards under the plan. The number of employees eligible to participate in the
plan is approximately 350. During the lifetime of participants, share options
are exercisable only by the optionee, and no share options will be transferable
otherwise than by will or the laws of descent and distribution; provided,
however, that the option agreement may allow nonqualified share options to
be
transferred to permitted transferees (as defined in the plan).
Shares
Available for Grant. If
this
amendment is approved, a total of 4,750,000 of our common shares of beneficial
interest are reserved for issuance under the plan. The shares may be either
authorized and unissued shares or issued and outstanding shares (including,
in
the discretion of the committee, shares purchased in the open market). If a
share option expires unexercised, is terminated, or is cancelled or forfeited,
the shares allocable to the unexercised portion of that share option may again
be subject to a share option under the plan.
The
plan
provides that in the event of any change in the outstanding shares of the
company by reason of any share dividend, split, spin-off, recapitalization,
merger, consolidation, combination, exchange of shares or other similar change,
the aggregate number of shares with respect to which awards may be made under
the plan, the terms and the number of outstanding shares, and the exercise
price
of a share option, may be equitably adjusted by the board in its sole
discretion.
Share
Options.
The
committee may designate a share option as an incentive share option or a
nonqualified share option, or the committee may award a grant of restricted
shares. The terms of each award shall be set out in a written award agreement
which incorporates the terms of the plan.
The
exercise price of a nonqualified share option and/or an incentive share option
shall be determined by the committee; provided, however, that the exercise
price
of an option may not be less than 100% of the fair market value (as defined
in
the plan) of a share on the date of grant, and options may not be exercisable
after 10 years from the date of grant. Additionally, the grant of incentive
share options to an employee owning over 10% of our voting shares must be at
an
exercise price of not less than 110% of the fair market value of the shares
on
the date of grant, and the incentive share option may not be exercisable after
five years from the date of grant. The aggregate fair market value of all shares
with respect to which incentive share options are exercisable for the first
time
by any optionee during any one calendar year shall not exceed $100,000,
determined based on the option exercise price on the date of grant. The purchase
price of restricted shares will be determined by the committee on the date
the
restricted shares are granted, and the restricted shares will be free of the
restrictions at the end of the restricted period (as defined in the plan).
Incentive
share options and nonqualified share options may be exercised by payment of
the
share option price in cash, in shares valued at fair market value on the date
of
exercise, or any combination thereof. A holder of nonqualified share options
may
also make payment, unless restricted by the committee or the award agreement,
in
shares purchased upon the exercise of nonqualified share options through our
withholding of shares (valued at fair market value as of the date of exercise)
that would otherwise be issuable upon exercise of such options equivalent to
the
purchase price of the nonqualified share options. Special rules apply which
limit the time of exercise of a share option following an employee’s termination
of employment. The committee may impose additional restrictions on the exercise
of any share option.
Amendment
of the Plan. The
board
may amend, suspend or terminate the plan at any time; provided, however, that
no
action by the board shall, without further approval of the shareholders,
increase the total number of shares under the plan, materially increase the
benefits accruing under the plan or materially modify the requirements as to
eligibility for participation in the plan.
Change
in Control/Corporate Transactions.
The
plan provides that in the event of any recapitalization, merger, consolidation
or conversion, under which the holders of share options do not receive any
securities or other property, all awards will remain outstanding and will
continue in full force and effect in accordance with their terms. If the
corporate transaction is consummated and the holders of share options receive
transactional consideration, the awards will be modified as follows: (i) if
the
corporate transaction provides for the assumption by the entity issuing
transactional consideration of the awards without any modification or amendment,
the awards will remain outstanding and will continue in full force and effect;
(ii) if the corporate transaction does not provide for the assumption by the
entity issuing transactional consideration, all vesting restrictions applicable
to awards which will not be assumed will accelerate and the award holders may
exercise/receive the benefits of the awards during the 10 day period immediately
preceding the consummation of the corporate transaction.
Federal
Tax Consequences.
The
grant of incentive share options to an employee does not result in any income
tax consequences. The exercise of an incentive share option generally does
not
result in
any
income tax consequences to an employee if (i) the incentive share option is
exercised by the employee during his employment with us or one of our
subsidiaries, or within a specified period after termination of employment,
and
(ii) the employee does not dispose of shares acquired pursuant to the exercise
of an incentive share option before the expiration of two years from the date
of
grant of the incentive share option or one year after exercise and the
transfer of the shares to him, whichever is later. However, the excess of the
fair market value of the shares as of the date of exercise over the option
exercise price is includable in an employee’s alternative minimum taxable income
in the year of exercise.
An
employee who disposes of his incentive share option shares prior to the
expiration of the waiting period generally will recognize ordinary income in
the
year of sale in an amount equal to the excess, if any, of (a) the lesser of
(i) the fair market value of the shares as of the date of exercise or (ii)
the amount realized on the sale, over (b) the incentive share option
exercise price. Any additional amount realized on an early disposition should
be
treated as capital gain to the employee, short or long term, depending on the
employee’s holding period for the shares. If an employee sells shares acquired
pursuant to the exercise of an incentive share option, the employee will
generally recognize a long-term capital gain or loss on the sale if the shares
were held for more than 12 months.
We
will
not be entitled to a deduction as a result of the grant of an incentive share
option, the exercise of an incentive share option, or the sale of incentive
share option shares after the waiting period. If an employee disposes of
incentive share option shares in an early disposition, we would be entitled
to
deduct the amount of ordinary income recognized by the employee.
The
grant
of nonqualified share options under the plan will not result in the recognition
of any taxable income by the optionee. An optionee will recognize ordinary
income on the date of exercise of the nonqualified share option equal to the
excess, if any, of (i) the fair market value of the shares acquired as of
the exercise date, over (ii) the exercise price. The income reportable on
exercise of a nonqualified share option is subject to federal income and
employment tax withholding. Generally, we will be entitled to a deduction for
our taxable year within which the optionee recognizes compensation income in
a
corresponding amount.
Generally,
the recipient of an award of restricted shares is taxed upon the fair market
value of the shares at the date or dates that such shares vest, and we are
entitled to a deduction at the same time in the same amount.
Grants
under the Plan.
There
have been no grants under the plan since the board approved the amendment
described in this proposal; accordingly, the benefits or amounts that will
be
received as a result of the adoption of the plan are not currently
determinable.
Shareholder
Approval Requirement.
The
approval of the amendment requires the affirmative vote of a majority of our
common shares of beneficial interest voting on the matter. Abstentions and
broker non-votes will not be included in the tabulation of votes cast on this
proposal.
The
board of trust managers unanimously recommends that shareholders vote FOR the
amendment of the plan as set forth in this Proposal Three. Proxies solicited
by
the board of trust managers will be so voted unless you specify otherwise in
your proxy.
PROPOSAL
FOUR
SHAREHOLDER
PROPOSAL
We
have
received a shareholder proposal from the Massachusetts State Carpenter's Fund,
(MSCF), 350 Fordham Road, Wilmington, Massachusetts 01887. MSCF has requested
that we include the following proposal and supporting statement in our proxy
statement for our 2006 annual meeting of shareholders, and if properly
presented, this proposal will be voted on at the annual meeting. MSCF
beneficially owns approximately 1,000 of our common shares. The shareholder
proposal is quoted verbatim in italics below.
Our
board
of trust managers disagrees with the adoption of the resolution proposed below
and asks shareholders to read through our board of trust manager's response,
which follows the shareholder proposal.
SHAREHOLDER
PROPOSAL: PAY-FOR-SUPERIOR-PERFORMANCE PROPOSAL
This
proposal was submitted by the Massachusetts State Carpenters Fund, 350 Fordham
Road, Wilmington, Massachusetts 01887, which owns approximately 1,000 shares
of
our common stock.
RESOLVED:
That the shareholders of Weingarten Realty Investors (“Company”) request that
the Board of Director’s Executive Compensation Committee establish a
pay-for-superior-performance standard in the Company’s executive compensation
plan for senior executives (“Plan”), by incorporating the following principles
into the Plan:
1. |
The
annual incentive component of the Company’s Plan should utilize financial
performance criteria that can be benchmarked against peer group
performance, and provide that no annual bonus be awarded based on
financial performance criteria unless the Company exceeds the median
or
mean performance of a disclosed group of peer companies on the selected
financial criteria;
|
2. |
The
long-term equity compensation component of the Company’s Plan should
utilize financial and/or stock price performance criteria that can
be
benchmarked against peer group performance, and any options, restricted
shares, or other equity compensation used should be structured so
that
compensation is received only when Company performance exceeds the
median
or mean performance of the peer group companies on the selected financial
and stock price performance criteria;
and
|
3. |
Plan
disclosure should allow shareholders to monitor the correlation between
pay and performance established in the
Plan.
|
SUPPORTING
STATEMENT: We feel it is imperative that executive compensation plans for senior
executives be designed and implemented to promote long-term corporate value.
A
critical design feature of a well-conceived executive compensation plan is
a
close correlation between the level of pay and the level of corporate
performance. We believe the failure to tie executive compensation to superior
corporate performance has fueled the escalation of executive compensation and
detracted from the goal of enhancing long-term corporate value. The median
increase in CEO total compensation between 2003 and 2004 was 30.15% for S&P
500 companies, twice the previous year increase of 15.04% according to The
Corporate Library’s CEO Pay Survey.
The
pay-for-performance concept has received considerable attention, yet most
executive compensation plans are designed to award significant amounts of
compensation for average or below average peer group performance. Two common
and
related executive compensation practices have
combined
to produce pay-for-average-performance and escalating executive
compensation.
First,
senior executive total compensation levels are targeted at peer group median
levels. Second, the performance criteria and benchmarks in the incentive
compensation portions of the plans, which typically deliver the vast majority
of
total compensation, are calibrated to deliver a significant portion of the
targeted amount. The formula combines generous total compensation targets with
less than demanding performance criteria and benchmarks.
We
believe the Company’s Plan fails to promote the pay-for-superior-performance
principle. Our Proposal offers a straightforward solution: The Compensation
Committee should establish and disclose meaningful performance criteria on
which
to base annual and long-term incentive senior executive compensation and then
set and disclose performance benchmarks to provide for awards or payouts only
when the Company exceeds peer group performance. We believe a plan to reward
only superior corporate performance will help moderate executive compensation
and focus senior executives on building sustainable long-term corporate
value.
The
board of trust managers believes that the proposal is contrary to the interests
of the company and our shareholders, and accordingly is recommending that you
vote AGAINST the proposal for the following reasons:
The
management development and compensation committee of our board of trust
managers, which is comprised entirely of independent trust managers, supervises
our executive compensation. As described in the report of the management
development and compensation committee, the committee already considers our
performance when determining appropriate levels of executive compensation.
Our
Chairman, Chief Executive Officer and the Vice Chairman generally have 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. The management development and compensation committee
believes it is in our best interest to retain certain flexibility when setting
compensation levels instead of being tied to specific metrics, such as stock
price performance, that may or may not be an accurate measure of our performance
during any given period. The bonuses of the Chairman, Vice Chairman and Chief
Executive Officer are based entirely on our performance.
Even
though certain components of executive compensation are based on our
performance, our board of trust managers does not believe it is in our best
interest to disclose specific performance targets, as they are subject to large
degrees of uncertainty and are derived based on material, nonpublic
information.
Please
refer to the report of the management development and compensation committee
of
our board of trust managers for a more detailed explanation of our executive
compensation arrangements.
The
board of trust managers unanimously recommends that you vote AGAINST the
shareholder proposal as set forth in Proposal Four. Proxies solicited by the
board of trust managers will be so voted unless you specify otherwise in your
proxy.
OTHER
MATTERS
As
of the
mailing date of this proxy statement, the board of trust managers knows of
no
other matters to be presented at the meeting. Should any other matter requiring
a vote of the shareholders arise at the meeting, the persons named in the proxy
will vote the proxies in accordance with their best judgment.
SHAREHOLDER
PROPOSALS
Any
shareholder who intends to present a proposal at the annual meeting in the
year
2007, and who wishes to have the proposal included in our proxy statement for
that meeting, must deliver the proposal to our corporate secretary M. Candace
DuFour, at P.O. Box 924133, Houston, Texas 77292-4133 by November 23, 2006.
All
proposals must meet the requirements set forth in the rules and regulations
of
the SEC in order to be eligible for inclusion in the proxy statement for that
meeting.
Any
shareholder who intends to bring business to the annual meeting in the year
2007, but not include the proposal in our proxy statement, or to nominate a
person to the board of trust managers, must give written notice to our corporate
secretary, M. Candace DuFour, at P.O. Box 924133, Houston, Texas 77292-4133,
by
January 19, 2007.
ANNUAL
REPORT
We
have
provided without charge a copy of the annual report to shareholders for fiscal
year 2005 to each person being solicited by this proxy statement. Upon
the written request by any person being solicited by this proxy statement,
we
will provide without charge a copy of the annual report on Form 10-K as filed
with the SEC (excluding exhibits, for which a reasonable charge shall be
imposed).
All
requests should be directed to: M. Candace DuFour, Sr. Vice President and
Secretary at Weingarten Realty Investors, P.O. Box 924133, Houston, Texas
77292-4133. This information is also available via the Internet at our Web
site
(www.weingarten.com)
and the
EDGAR version of such report (with exhibits) is available at the SEC’s world
wide Web site (www.sec.gov).
HOUSEHOLDING
ELECTION
The
Securities and Exchange Commission has enacted a rule that allows multiple
investors residing at the same address the convenience of receiving a single
copy of annual reports, proxy statements, prospectuses and other disclosure
documents if they consent to do so. This is known as “Householding.” Please
note, if you do not respond, Householding will start 60 days after the mailing
of this notice. We will allow Householding only upon certain conditions. Some
of
those conditions are:
You
agree
to or do not object to the Householding of your materials,
You
have
the same last name and exact address as another investor(s).
If
these
conditions are met, and Securities and Exchange Commission regulations allow,
your household will receive a single copy of annual reports, proxy statements,
prospectuses and other disclosure documents.
The
HOUSEHOLDING ELECTION, which appears on the enclosed proxy card, provides a
means for you to notify us whether or not you consent to participate in
Householding. By marking “Yes” in the block provided, you will consent to
participate in Householding. By marking “No,” you will withhold your consent to
participate. If you do nothing, you will be deemed to have given your consent
to
participate. Your consent to Householding will be perpetual unless you withhold
or revoke it. You may revoke your consent at any time by contact ADP-ICS, either
by calling toll-free at (800) 542-1061, or by writing to ADP-ICS, Householding
Department, 51 Mercedes Way, Edgewood, New York, 11717. We will remove you
from
the Householding program within 30 days of receipt of your response, following
which you will receive an individual copy of our disclosure
document.
34