-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pwe4+vCSEYg38btOX2wOGTqTWJrhPd7haN0h1HvXw+4JtTF/sJqwZwDEZmHzt/Id xhBpD9ePmOp1PUyq3TjuZQ== 0000950149-96-000468.txt : 19960501 0000950149-96-000468.hdr.sgml : 19960501 ACCESSION NUMBER: 0000950149-96-000468 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960430 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEREGRINE REAL ESTATE TRUST CENTRAL INDEX KEY: 0000314485 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 942255677 STATE OF INCORPORATION: CA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-09097 FILM NUMBER: 96553770 BUSINESS ADDRESS: STREET 1: 1300 ETHAN WAY, SUITE 200 CITY: SACRAMENTO STATE: CA ZIP: 95825 BUSINESS PHONE: 916-929-8244 MAIL ADDRESS: STREET 2: 705 UNIVERSITY AVE CITY: SACRAMENTO STATE: CA ZIP: 95825 FORMER COMPANY: FORMER CONFORMED NAME: COMMONWEALTH EQUITY TRUST DATE OF NAME CHANGE: 19920703 10-K/A 1 FORM 10-K/A FOR PERIOD ENDING 12/31/95 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 1 TO FORM 10-K on FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee Required] For the fiscal year ended December 31, 1995 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the Transition period from ------------------------ Commission File Number 0-9097 THE PEREGRINE REAL ESTATE TRUST ------------------------------- (Exact Name of Registrant as Specified in its Charter) CALIFORNIA 94-2255677 ---------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1300 ETHAN WAY, SUITE 200, SACRAMENTO, CALIFORNIA 95825 (Address of principal executive office) ----- (Zip Code) Registrant's telephone number, including area code: (916) 929-8244 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Title of Each Class ------------------- Common Shares of Beneficial Interest Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to the filing requirements for at least the past 90 days. Yes X No --- --- Sequential Page: 01 of Exhibit Index: Page 2 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] MARKET VALUE There is no active trading market for the Trust's Common Shares of Beneficial Interest. APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No --- --- OUTSTANDING SHARES As of March 31, 1996, there were 4,881,055 outstanding Common Shares of Beneficial Interest. DOCUMENTS INCORPORATED BY REFERENCE None. 2 3 - -------------------------------------------------------------------------------- PART III - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Item 10. Trustees and Executive Officers of the Registrant - -------------------------------------------------------------------------------- (a) Executive Officers. See "Executive Officers of the Registrant," in Part I of this report. (b) Trustees. The Restated Declaration of Trust provides that, so long as any Preferred Shares are outstanding, the Trust is to be managed by a Board of five trustees, four of whom are to be elected by the holders of Common Shares, and one of whom is to be elected by holders of Preferred Shares. At the time of the reorganization, five trustees were designated, but due to the resignation of Frank A. Morrow in February 1996, the Board is currently composed of four trustees. At the next annual meeting of shareholders, the holders of Common Shares will have the right to elect four trustees, for a term of one year and until their successors are elected and qualified. Holders of Preferred Shares may, at any time, elect a fifth trustee. If the holders of Preferred Shares do not elect a fifth trustee, the unfilled position will remain vacant, in accordance with the provisions of the Restated Declaration of Trust. The following table sets forth certain information as of March 31, 1996 with respect to the trustees of the Trust, all of whom have served as trustees since October 1994.
NAME AGE POSITION - ---- --- -------- John McMahan 58 Chairman of the Board of Trustees; Interim Chief Executive Officer E. Lawrence Hill 44 Trustee John F. Salmon 50 Trustee Kenneth T. Seeger 46 Trustee
There are no arrangements or understandings between any Trustee and any other person pursuant to which the Trustee was selected as a Trustee except as specified in the Plan. There are no family relationships among any of the Trustees. Mr. McMahan also serves on the Board of Trustees of CalREIT. The principal occupations and affiliations of the Trustees are as follows: JOHN MCMAHAN, CHAIRMAN OF THE BOARD. Mr. McMahan is President of The McMahan Group, a San Francisco-based real estate management firm founded in 1994. Mr. McMahan has also served as the Chief Executive Officer of Mellon/McMahan Real Estate Advisors, Inc., which grew into one of the country's largest real estate investment advisors. He is a faculty member at the Haas Graduate School of Business at the University of California at Berkeley. Mr. McMahan has published many articles on real estate investment and has been active in several national real estate organizations, including the National Association of Real Estate Investment Trusts. Mr. McMahan graduated from the University of Southern California and received an MBA degree in 1961 from the Harvard Graduate School of Business. He serves on the boards of California Real Estate Investment Trust and BRE Properties, Inc., and has been chairman of The National Association of Real Estate Investment Managers. 3 4 E. LAWRENCE HILL, JR., TRUSTEE. Mr. Hill is the founder and President of Hickey & Hill, Inc., a 12-year old turnaround and workout specialty firm based in the San Francisco bay area. Mr. Hill's firm has worked with a variety of clients including high-technology, banking and real estate companies requiring near and/or long term rescue. His real estate clients have included hotel, mixed-use light industrial, residential and retail property owners. Successful turnarounds managed by his company have used various restructuring, recapitalization and reorganization strategies. Prior to founding his own company, Mr. Hill was a Vice President with the Bank of California in its Workout and Restructuring Department. In this capacity, for more than five years, he managed approximately one-third of the bank's non-performing assets implementing appropriate hold/sell plans for each property. Mr. Hill received a BS degree and an MS degree in engineering from Stanford University in 1974. He currently serves as interim Chief Executive Officer of Carlos Murphy's, Inc. JOHN F. SALMON, TRUSTEE. Mr. Salmon is a San Francisco-based commercial real estate consultant. He previously served in Sacramento for five years as Director of the Governor's Office of Asset Management of the State of California. While in that position, he established procedures for reviewing the state's sizable real estate holdings, developed real property operating and disposition proposals for the Administration and the Legislature, redirected the state's office leasing policies and counseled state government agencies on institutional facility and asset management strategies. Prior to joining the Governor's Office, Mr. Salmon was the Vice President, Property Development and Sales of Santa Fe Pacific Realty Corporation (now Catellus Development Corporation) in San Francisco. There he managed the land planning, building development and property disposition activities of the company's three million acre, 18-state real estate portfolio. Mr. Salmon graduated from the University of Notre Dame in 1967 with a BBA degree in Accounting, and received a JD degree from the University of Illinois in 1971. KENNETH T. SEEGER, TRUSTEE. Mr. Seeger is the president of The Presidio Group, Inc., TPG Management, Inc., and Residences, Inc., all of which are real estate asset management and development companies based in the San Francisco Bay Area. Until November 1993, Mr. Seeger was responsible for all finance and acquisition activities for Southwest Diversified/Coscan Partners, a major Irvine-based development company. Real estate development projects have included both residential and commercial properties throughout California and in Arizona. Prior to that, Mr. Seeger was a Senior Vice President with The Fox Group of Companies where he was responsible for all project financing. He also has had considerable experience in risk management, income-property operations and new business development. Mr. Seeger graduated from the Wharton School at the University of Pennsylvania in 1972. He is a full member of the Urban Land Institute, is on the Pacific Rim Urban Planning and Development Council and has served on the Advisory Board of the School of Real Estate at the University of California at Berkeley. COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Section 16(a) of the Securities Exchange Act of 1934 requires the Trust's trustees and executive officers, and persons who own more than ten percent (10%) of a registered class of its equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of all equity securities of the Trust. To the Trust's knowledge, based solely on review of the copies of such reports furnished to it and written representations that no other reports were required during the fiscal year ended December 31, 1995, all Section 16(a) filing requirements applicable to its officers, trustees and greater than ten percent shareholders were complied with. 4 5 - -------------------------------------------------------------------------------- Item 11. Executive Compensation - -------------------------------------------------------------------------------- SUMMARY COMPENSATION TABLE The following Summary Compensation Table shows compensation paid by the Trust from the effective date of the reorganization in 1994 until the end of fiscal 1995 to Frank A. Morrow, who served as chief executive officer of the Trust during fiscal 1995, and to each other executive officer whose annual compensation exceeded $100,000 (together, the "Named Officers"). Mr. Morrow's engagement with the Trust as Chief Executive Officer was terminated on January 18, 1996 in accordance with the terms of his services agreement. John McMahan was appointed interim Chief Executive Officer as of such date. Mr. Arnold Brown's engagement with the Trust as Vice President and Chief Financial Officer was terminated in November 1995 in accordance with the terms of his services agreement. SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION NAME AND OTHER ANNUAL PRINCIPAL POSITION PERIOD* SALARY BONUS COMPENSATION ------------------ ------ ------ ----- ------------ Frank A. Morrow 1995 $300,000 -- -- Chief Executive Officer October 7 to during 1995 December 31, 1994 $ 70,000 -- -- Arnold E. Brown** 1995 $ 99,750 -- $28,500*** Vice President and Chief October 7 to Financial Officer December 31, 1994 $ 28,500 $12,500 --
*The officers named above were engaged at the time of the Effective Date of the Plan of Reorganization on October 7, 1994. Accordingly, compensation information is provided from the date of engagement until the end of fiscal 1995. **In addition , Mr. Brown received from CalREIT salary and severance pay of $40,500 in 1995, and salary of $9,000 in 1994. ***Consists of severance pay, as described below. COMPENSATION OF TRUSTEES During 1995, each Trustee of the Trust was paid $5000 per quarter, $1000 for each full-day Board of Trustees meeting attended, and $500 for each half-day meeting, telephone meeting, or special committee meeting attended. Under the terms of the Trust's Stock Option Plan, options to purchase Common Shares have been granted to members of the Board of Trustees who are not full time employees or officers of the Trust or any subsidiary of the Trust. During 1995, the four non-employee trustees received options covering a total of 26,668 Common Shares. The exercise price in each case was $2.00 per share. No outstanding options were exercised under the Stock Option Plan during 1995. EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS The Chief Executive Officer of the Trust during 1995, Frank A. Morrow, was engaged at the time of the reorganization in October 1994 pursuant to a personal services contract (the "Services Contract") between the Trust, Mr. Morrow, and a management company of which Mr. Morrow is a principal. The terms of the Services Contract 5 6 were approved by the Bankruptcy Court. Compensation provided to Mr. Morrow under the Services Contract was in a fixed monthly amount of $25,000. The Services Contract was terminated on January 18, 1996 pursuant to its terms. Upon termination, Mr. Morrow was entitled to receive and did receive a severance payment equal to $212,500. The former Chief Financial Officer of the Trust, Arnold Brown, was engaged at the time of the reorganization in October 1994 pursuant to an independent contractor agreement (the "Independent Contractor Agreement") between the Trust and a corporation of which Mr. Brown is a principal. Compensation provided to Mr. Brown under the Independent Contractor Agreement was in a fixed monthly amount of $9,500. The Independent Contractor Agreement was terminated in November 1995 and Mr. Brown was entitled to and did receive a severance payment equal to three months compensation, or $28,500. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The Board of Trustees has established a Compensation Committee consisting of one independent trustee, Kenneth T. Seeger. Mr. John McMahan, the Chairman of the Board of Trustees and interim Chief Executive Officer, also serves on the Board of Trustees of CalREIT. Mr. Frank A. Morrow, the former Chief Executive Officer during 1995, also served and continues to serve as Chairman of the Board of Trustees and Chief Executive Officer of CalREIT. Mr. Arnold Brown, the Trust's former Chief Financial Officer during part of 1995, also served and continues to serve as a trustee of CalREIT. Both the Trust and CalREIT are self-administered. However, they share certain costs, including personnel costs, for which CalREIT reimburses the Trust pursuant to a cost allocation agreement based on each trust's respective asset values (real property and notes receivable) that is negotiated annually. During 1995 reimbursable costs charged by the Trust to CalREIT approximated $435,000. - -------------------------------------------------------------------------------- Item 12. Security Ownership of Certain Beneficial Owners and Management - -------------------------------------------------------------------------------- The following table sets forth certain information as of March 31, 1996 with respect to the beneficial ownership of the outstanding Common Shares and Preferred Shares by (i) all persons known by the Trust to own more than five percent of either class of shares, or to be a member of a group that owns more than five percent of either class of shares, and (ii) by each trustee, or Named Officer.
Shares Name and Address of Beneficially Percent Title of Class Beneficial Owner Owned of Class - -------------- ---------------- ----- -------- Redeemable Convertible Pacific Mutual Life Insurance Company Preferred Shares c/o Ronn Cornelius 700 Newport Center Drive Newport Beach, CA 92660 3,475,384 26.6% The Prudential Insurance Company of America(1) c/o Don Dyche Corporate Finance Group, 9th Floor Four Gateway Center 100 Mulberry Center
6 7
Shares Name and Address of Beneficially Percent Title of Class Beneficial Owner Owned of Class - -------------- ---------------- ----- -------- Newark, NJ 07102-4069 2,172,115 16.6% TCW Special Credits Plus Fund(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 1,729,178 13.3% TCW Special Credits Fund IV(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 1,617,617 12.4% TCW Special Credits Trust IV(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 1,394,498 10.7% PRUCO Life Insurance Company(1) c/o Don Dyche Corporate Finance Group, 9th Floor Four Gateway Center 100 Mulberry Street Newark, NJ 07102-4069 1,303,270 10.0% Orix USA Corp. c/o Arnold Kawano 780 Third Avenue, Floor #48 New York, NY 10017 521,308 4.0% Weyerhaeuser Company Master Retirement Trust(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 502,019 3.8% TCW Special Credits Fund IVA(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 334,680 2.6% ---------- --- Total 13,050,069 100%
7 8 (1) Shares held by: Gateway Recovery Trust c/o Michael Morcom Trust Administrator Chemical Bank 450 West 33rd Street New York, NY 10001-2697 (2) Shares held by: Salkeld & Company c/o Bankers Trust Company 16 Wall Street, M/S 4042 New York, NY 10015 8 9
Shares Name and Address of Beneficially Percent Title of Class Beneficial Owner Owned of Class - -------------- ---------------- ----- -------- Common Shares Pacific Mutual Life Insurance Company c/o Ronn Cornelius 700 Newport Center Drive Newport Beach, CA 92660 681,913 13.9% The Prudential Insurance Company of America(1) c/o Don Dyche Corporate Finance Group, 9th Floor Four Gateway Center 100 Mulberry Center Newark, NJ 07102-4069 426,195 8.7% TCW Special Credits Plus Fund(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 339,286 6.9% TCW Special Credits Fund IV(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 317,396 6.5% TCW Special Credits Trust IV(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 273,618 5.6% PRUCO Life Insurance Company(1) c/o Don Dyche Corporate Finance Group, 9th Floor Four Gateway Center 100 Mulberry Street Newark, NJ 07102-4069 255,717 5.2% Orix USA Corp. c/o Arnold Kawano 780 Third Avenue, Floor #48 New York, NY 10017 102,287 2.1%
9 10
Shares Name and Address of Beneficially Percent Title of Class Beneficial Owner Owned of Class - -------------- ---------------- ----- -------- Weyerhaeuser Company Master Retirement Trust(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 98,502 2.0% TCW Special Credits Fund IVA(2) Richard Masson c/o Oaktree Capital Management 550 South Hope Street, Floor #22 Los Angeles, CA 90071 65,668 1.3% --------- Subtotal 2,560,582 E. Lawrence Hill, Jr. 13,334** * John McMahan*** 13,334** * John F. Salmon 13,334** * Kenneth T. Seeger 13,334** * Subtotal 53,336 --------- Total 2,613,918 =========
(1) Shares held by: Gateway Recovery Trust c/o Michel Morcom Trust Administrator Chemical Bank 450 West 33rd Street New York, NY 10001-2697 (2) Shares held by: Cede & Company 7 Hanover Square New York, NY 10004 No Other Officers or Trustees beneficially own any shares. * Does not exceed one percent of outstanding shares. ** Shares under option. *** John McMahan also owns 10,000 shares of the California Real Estate Investment Trust ("CalREIT"), which is 76% owned by the Trust (see "Certain Relationships and Related Transactions" below). Such shares represent less than .001% of the outstanding shares of CalREIT. 10 11 - -------------------------------------------------------------------------------- Item 13. Certain Relationships and Related Transactions - -------------------------------------------------------------------------------- The Trust owns 76% of the shares of CalREIT and Messrs. McMahan, Morrow and Brown are trustees of CalREIT. Both the Trust and CalREIT are self-administered. However, they share certain costs, including personnel costs, for which CalREIT reimburses the Trust pursuant to a cost allocation agreement based on each trust's respective asset values (real property and notes receivable) that is negotiated annually. During 1995 reimbursable costs charged by the Trust to CalREIT approximated $435,000. Employees of The McMahan Group, a real estate management firm of which the Trust's interim Chief Executive Officer, Mr. John McMahan, is a principal, began providing consulting services in 1996 to the Trust for hourly rates up to $150.00. 11 12 Signatures Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE PEREGRINE REAL ESTATE TRUST April 30, 1996 /s/ John McMahan ---------------- John McMahan Chairman of the Board Interim Chief Executive Officer 12 -----END PRIVACY-ENHANCED MESSAGE-----